By Luke Popovich
We can now put all that “war on coal” rhetoric aside. Today, that charge is so yesterday.
The reason it’s no longer a war on coal is because the war just got bigger. After an appellate court decision in Washington last month, the war is waged on every industry that needs a permit to build a road, dig a hole or construct a house. Can’t blame the Environmental Protection Agency this time. Thanks to federal judges sitting in Washington, any activity that disturbs nature and requires a 404 permit under the Clean Water Act is now a potential target for extinction by a federal regulator.
In a closely watched case, the D.C. circuit ruled that the EPA has unquestioned authority to yank an existing permit from most any industry at any time for any reason. That’s the conclusion industry lawyers take from the appellate court decision granting EPA the power to void a permit “whenever” it determines that an “unacceptable adverse effect” will result.
The ruling that one industry lawyer called “a disaster” began innocuously enough last year, when a lower court reversed EPA’s decision in January 2011 to void a 4-year-old permit held by the Spruce No. 1 surface mine in West Virginia. District Judge Amy Berman Jackson, siding with Mingo Logan Coal Company, said the EPA had presumed authority that Congress did not intend it to have. The Clean Water Act, she said, “does not give the EPA the power to render a permit invalid once it has been issued by the Corps.”
That’s the legal argument against the EPA’s retroactive permit veto. Just as compelling was Judge Jackson’s common sense consideration, the kind sometimes overlooked in this town. If Congress allowed the agency to void permits after approving them, she said, the permit would not be “worth the paper it is printed on.”
Well, yes, exactly. That’s why her decision appears reasonable. Without the certainty a permit provides, why have one? What reason is there to invest in any project that depends on it? In this case, the Spruce permit had been approved by the Army Corps, as well as the state after undergoing a decade-long environmental review, including a lengthy environmental impact statement that the EPA fully participated in and approved. The appeals court ignored all this to insist Congress intended the EPA to have what the judges called “broad environmental ‘backstop’ authority” over all Sec. 404 permits.
Coal industry reaction to the ruling was swift and emphatic. “A cloud of uncertainty now hangs over any project,” said NMA CEO Hal Quinn. “Companies will no longer have the assurance required to encourage investments, grow our economy and create jobs.”
Only now it will not be just coal companies that lack such assurance but all industries that use Sec. 404 permits. In one fell swoop, investing in domestic projects becomes as risky as investing in some banana republic or autocratic regime where assets can be nationalized and operations halted at the whim of officials beyond the reach of elected representatives.
But might coal emerge stronger with more allies thanks to an appeals court decision threatening other industries? After all, the “war on coal” was a battle cry of a determined but small army that lacked the firepower to win regulatory relief. Republicans found it useful to bash the Obama administration, Democrats echoed them to show they shared their constituents’ anger and pain and didn’t deserve their blame.
And anyway, “war on coal” never resonated with much conviction among ordinary Americans. For them, the EPA keeps the air and water clean, their kids safe. The Appalachian permits the EPA held up, the Spruce mine permit the agency yanked, the regulatory standard it proposed to slow greenhouses gas emissions and stop new coal plant construction—all that flew over the head of most voters who, let’s face it, know far more about the Kardashians than they do about coal.
But a “war on industry” could become a more potent and plausible concern to members of Congress who can fix a bad court decision. At press time, Democrats as well as Republicans in West Virginia’s delegation were the first to promise legislative relief from a fine legal distinction that threatens coal and much more. Additional congressional members may join them as news of the ruling sinks in.
Meanwhile, Arch Coal, owners of Mingo Logan, could ask all of the appellate judges to re-hear the case that was decided by just a few, or ask the Supreme Court to hear it.
The battle is lost, not the cause.
Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.