BY Lee Buchsbaum

Since February, the EPA has placed 175 surface coal mining projects under review and halted 79 of them because of their effects on surface water. Nationwide, the Clean Water Act has become one of the main prisms through which the anti-mining movement, led now by the U.S. Environmental Protection Agency (EPA), focuses their tactics. They are using selenium, total dissolved solids, salts, and osmotic pressure as effective bludgeons against mining. The other hammer is stream conductivity, which is a surrogate metric for total dissolved solids. The issue is not whether the stream runs properly, but whether, because of upstream water “fouling,” the changed character of the stream disrupts mayfly populations. While this change generally does not affect fish and other aquatic life, it causes a shift in benthic communities as indicated by the absence of certain mayflies.
Put more precisely: during the course of normal surface mining activity, inevitably traces of naturally occurring conductive elements will be disturbed. And in turn, this may affect some, but not all mayflies. Just the ones the EPA has determined are the right kinds. But there’s a further catch. There may not be a way to actually prevent water’s conductivity from being altered.
With their fates now held hostage by a government more focused on coming to the rescue of a particular species of bug than on coming to the rescue of Appalachian Main Streets, Coal Age looks at how two mining operations, Arch Coal’s Spruce Fork mine in West Virginia and International Coal Group’s (ICG) Thunder Ridge mine in Kentucky, are struggling to appease, defeat or compromise with an unleashed EPA. Their individual successes and failures in and out of the courtroom and the court of public opinion will have a precedent setting impact on how coal will be mined in Appalachia for the foreseeable future.

The EPA, the Corps and Spruce Fork
Since it first applied for a permit, Arch Coal’s Mingo-Logan Spruce Fork No. 1 mine has been a lightning rod of controversy. For years, it underwent a comprehensive review way beyond any other Appalachian mine. The fact that environmentalists have not yet been able to legally kill it off has only the made the struggle more bloody. The battle has now caused a public tussle between the U.S. Army Corps of Engineers (Corps), which believes Spruce Fork deserves its 404 permit and the EPA, which is attempting to veto the Corps permit and is sending in the Department of Justice (DoJ) to force the issue to a climax.
The largest of all the pending mountaintop mines in Appalachia, Spruce Fork has undergone a complete National Environmental Policy Act (NEPA) evaluation and developed and filed a full Environmental Impact Statement (EIS). While mines on federal leases routinely require an EIS, Spruce is the only surface mine in all of Appalachia completely located on private property that has been subjected to an EIS. “You can look back over the past decade and certainly Spruce Fork’s permit was one that was wholly obtained within increasingly stringent regulations. Everyone believed it was properly issued. During that time, it went through a significant EPA review as well,” said Peter Lawson, executive vice president, Marshall Miller.
However, in a September 3, 2009, letter to the Corps, the EPA “requested” that the Huntington, W.Va., District office “suspend, revoke or modify the permit” on the grounds that a re-evaluation of the circumstances and conditions of the permit is in the public interest. “Since issuance of the permit in January 2007, new information and circumstances have arisen which justify reconsideration of the permit,” stated the letter. “Scientific and field observations strongly suggest that compensatory mitigation measures heretofore accepted by the Corps, such as on-site stream creation, may not result in functional replacement with specific observable performance criteria.”
In other words, “the Corps has basically been told to re-evaluate their decision in light of new information. But other than changes in leadership in Washington, nothing has changed and no new information has come to light,” said Jason Bostic, vice president, West Virginia Coal Association.
Recent data and analyses, the EPA cites, “have revealed that downstream water quality impacts have not been adequately addressed…EPA is concerned about the likelihood that the project may cause or contribute to a violation of the state’s water quality standards or anti-degradation policy,” they said in the letter.
“To come back now after the fact and say that you are not sure if that review was thorough or complete enough is unconscionable,” said Lawson. Since the late 1990s, Spruce Fork has been involved in quite a bit of litigation and Arch has made many significant refinements to their permit. “In response to a lengthy and exhaustive review, including an EIS, the permit was granted. Now, with the mine in initial development stages the new EPA is raising new issues,” said Lawson.
However, it appears the Corps is not about to capitulate to the environmentalist’s argument. In response to the EPA’s September letter, Colonel Robert D. Peterson and his staff issued a point-by-point refutation of the EPA’s “findings,” debating the agency’s objections, and publically challenging its authority.
In his letter, Peterson stated that “based on the information provided during the review of the subject project and development of the EIS, and evaluating compliance…I have determined there were no other practicable alternatives that would have less impacts on the aquatic environment. The proposed discharge would not be expected to cause or contribute to violations of the applicable state water quality standards or significant degradation of the environment, and all appropriate steps were taken to minimize potential adverse impacts. Further, the West Virginia Department of Environmental Protection [WVDEP] has advised the District that Spruce No.1 mine is currently in compliance with their existing authorizations for the mine. Therefore, I have determined that no additional evaluation of the project’s effects on the environment are warranted, the permit will not be suspended, modified, or revoked, and a supplemental EIS will not be prepared.”
When the Corps, acting on behalf of the WVDEP, refused to revoke the permit, the EPA upped the ante. On October 5, 2009, DoJ lawyers, at the request of the EPA, asked that the same judge who had granted an initial stay against Spruce, grant another 30-day delay. The extra time was granted, thus allowing the DoJ to properly advise the EPA on how they could essentially circumvent 30 years of established law and exercise supremacy over state authorities.
On October 16, 2009, EPA officials announced that they had formally moved to veto the formerly granted Clean Water Act permit for Spruce Fork. “The EPA is taking this action because it is concerned about the magnitude, scale, and severity of the direct, indirect, and cumulative adverse environmental and water quality impacts associated with this project,” the agency said in a letter.
Purporting that Spruce Fork’s mining activities “may result in unacceptable adverse impacts to fish and wildlife resources,” the ascendant EPA stated, “we are taking this unusual step in response to our very serious concerns regarding the scale and extent of significant environmental and water quality impacts associated with the Spruce No. 1 mine [which] represents the largest authorized mountaintop removal operation in Appalachia and occurs in a watershed where many streams have been impacted by previous mining activities.”
The announcement concluded with the reassurance that the EPA’s course of action “represents an unusual set of circumstances we do not expect to be repeated again.”
In response, Arch stated that, “We are shocked that the EPA would take such an action.” Calling the permit “the most carefully scrutinized and fully considered in West Virginia’s history.” Arch complained that since “the EPA was intimately involved in the preparation and approval of the Spruce permit,” it’s “difficult to understand” the recent decision to vacate that permit.
The EPA’s act is especially galling since both the Corps and the WVDEP each recommended to the EPA that it should allow the Spruce permit to move forward without any further delay. Each agency also stated separately that in the course of attempting to vacate the permit, the EPA “had provided no new information and raised no new concerns” about the permit.
In its defense, the WVDEP openly questioned the EPA saying that at “some point, a project must be deemed to have been studied enough to meet NEPA requirements.” In a further broadside against the EPA, the WVDEP stated that it does not “support retroactive, ad hoc departures from existing laws rules and guidelines. As regulators, operating within the authority of existing rules and laws, such an approach is unsupportable and undermines the considerable efforts over the years by the WVDEP, Corps and EPA to develop consistent, predictable and fair permitting programs and procedures.”
It’s becoming clearer that all this shoving around, and now aside, by the EPA may cause Spruce Fork to literally become the hill the Corps decided to die on. An obviously frustrated Arch vowed to “engage the EPA in the regulatory process provided by law in order to defend the permit and the Corps’ decision to issue it.” In other words, “see you in court.” Hearings over the mine’s permit continue to be scheduled and postponed. As of late December no decisions on the mine’s future have been made and
its legal fate remains to be determined.

Streams of Data—ICG and Others Use Science to Prove Claims
Meanwhile, across the river in Leslie County, Ky., following a nearly two-year effort, in November 2009, ICG’s Thunder Ridge successfully battled back the environmental community to wrest a 404 permit out of the Louisville district of the Corps. Using science as a way to determine the relative impacts of mining on water quality, ICG deployed an innovative strategy to beat the environmentalists at their own game: data collection and data interpretation.
From the start one of the problems the environmentalists had in opposing Thunder Ridge’s expansion was its own proven track record. Mining first began at Thunder Ridge in the early 1990s. Since then, they have extracted more than 16 million tons of coal and have a long history of maintaining compliant levels of water quality while successfully reclaiming more than 2,500 acres of post-mined land. These were facts the environmentalists couldn’t refute.
Yet, knowing it was headed toward a fight, ICG decided to organize a larger oppositional force. In a rare move, ICG brought together dozens of stakeholders from various mining companies to work collectively in refuting the environmentalists’ claims. For this effort, ICG commissioned a vast cumulative impact study on various watersheds that later successfully proved to the environmentalists that their claims were invalid, and their concerns unfounded. Though victorious, ICG’s scientists may also have stumbled upon an unsolvable Catch 22 scenario that could further imperil the industry.
In February 2007, ICG filed the necessary 404-permit application needed for a planned expansion, requesting a permit to construct five valley fills. The permit was issued in December of that year, but three days afterward, the Sierra Club and other environmental groups filed suit against the Corps. Subsequent meetings were held, and the day after Christmas, the Corps suspended Thunder Ridge’s authorization temporarily. At the time, anti-mining campaigners “made allegations in a lawsuit and to the press that mining activity was silting up the Kentucky River all the way to Louisville, that the drinking water supply for millions of Kentuckians was at risk, and lots of other nonsense. Our objective was to rebut those claims with hard science and facts,” said Gene Kitts, senior vice president-mining services, ICG.
As part of the suspension, the Corps requested a cumulative effects assessment of the impacted watersheds in the region. ICG awarded the contract for this study to Engineering Consulting Services, Inc. (ECSI), which then retained a wide range of other experts from academia and the consulting profession. The largest single project of its kind ever conducted in the state of Kentucky, 100 scientists and engineers worked on the million-dollar study over the course of the following year.
For the study, ICG and ECSI chose representative watersheds in the Middle Fork of the Kentucky River. The area is rife with many pre-SMCRA mining sites, historical and current logging operations, oil and natural gas activities, slurry impoundments, highway construction, and residential areas. They also looked at historic data and water samples taken through and since the 1950s. However, much of this data was scattered, lost and inconsistent. Though mining companies by law have to report water quality to the state, ECSI discovered that retrieving the data was incredibly difficult as the state had misfiled and lost many of those records. “We took what we could find and added that data to our 19,000 data points and analyzed the region as best we could,” said Steve Gardner, president and CEO, ECSI.
ECSI found that the region’s water quality wasn’t necessarily correlated to mining activity but that general development, overall, is what affected wildlife the most, “the majority of which came from housing developments,” said Gardner. “In fact, our study shows that in older mining areas the wildlife is coming back. While the environmentalists may say that mining destroys streams forever, our study shows that with proper reclamation, there are functional streams. Though the structure and function of impacted streams may not come back precisely as they were before, most impacted streams are quite functional.”

Sometimes It Really Does Take a Village
When ICG decided on their approach, they asked the Kentucky Coal Association to convene a meeting of the mining community to lay out their plan of action. In attendance were about 80 people representing different companies, the state regulators, OSM, and the Corps among others. After a bit of debate several companies decided that their best option was to collaborate in similar watershed scale cumulative impact assessments.
The level of cooperation that Kitts and others subsequently achieved was unprecedented. “This is not a community that is used to working together,” he said. Late last year, several of the impact study consortiums completed sampling on the other five major watersheds of East Kentucky. Two other Cumulative Impact Assessment studies have been completed, the North Fork of the Kentucky River and the Upper Levisa. The Corps are reviewing these studies and several section 404 permits are dependent in large part on these combined cumulative assessments.
Kitts recalled that while it was challenging to get companies to work together on these studies. “Looking back, it’s quite remarkable that they would even consider this high level of collaboration. And now the fact that several of these studies have been completed is a testament to this industry pulling together to address common issues,” he said.

ICG Works to Alter Its Mine Plan
Almost immediately after the temporary suspension, ICG also looked at its mine plan to see what they could feasibly alter. First, Thunder Ridge substantially changed its material handling plan. Next, it took out one of the fills and compensated by changing the backfill configuration by putting more overburden on the mine area.
“We were able to develop a protocol that shows quantitatively that the fills we are proposing are required and it’s the best available configuration of the mine,” said Kitts. “We’ll also be using this new fill minimization design protocol going forward for all our Kentucky operations.
“When the permit was reissued back in March of this year, the plaintiffs in the lawsuit took a look at it, and decided we’d addressed many of their concerns. We took a lot of the issues out of the plaintiffs’ hands through either the findings of the study or the changes that we made to our mine plan,” said Kitts. After the Sierra Club and their attorneys reviewed it, they decided not to challenge the altered plan or the permit.

Does the Truth Really Set You Free?
As a result of the cumulative impact statements, additional studies, and the changes ICG made to its mine plan, in March 2009 the Corps reissued Thunder Ridge’s 404 permit—over the vigorous concerns of environmental groups, including the EPA. As of press time, it’s the only mountaintop mine permit issued by the Corps for eastern Kentucky since December 2007.
Eight months later, in a press release issued on November 16, 2009, ICG announced that it had reached a settlement with the Kentucky Waterways Alliance and The Sierra Club regarding the issuance of a section 404 permit for Thunder Ridge. The new 404 permit authorizes ICG Hazard to construct four valley fills at Thunder Ridge. However, they had already constructed three of the four valley fills—either before the plaintiffs sought relief in court or because of an earlier partial settlement with the plaintiffs. Under the settlement, ICG Hazard can construct the fourth and final valley fill at the Thunder Ridge surface mine.
The problem for environmentalists is that Thunder Ridge is not a hypothetical operation. It has a history of properly reclaimed land and a record of maintaining good water quality. “We even have people building new houses alongside our active haul road because they want to get out of the hollows, away from the creeks, and get up on higher, flatter ground that they didn’t have the option to live on before. One of the valley fills that the environmentalists had objected to was on property owned by a local attorney who said he wanted it on his property so he could have relatively flat land to pasture his horses. It’s hard to make a strong argument that what we were doing was wrong when the local residents were fully in support of our activity. And we had already achieved the social license to operate,” said Kitts.
Yet, at the end of the day, virtually all the EPA’s objectives “came down to one issue: water quality, specifically the electrical conductivity of water leaving the surface mine. That’s one of the primary concerns that the EPA has about surface mining permits in CAPP,” said Kitts.
Water conductivity is the result of rock weathering, and mining fractures rock. “Whether it’s in backfill or valley fills, when water and air come into contact with newly fractured rocks, it’s going to release the salts and minerals in those rocks. These in turn will be in the water runoff from the mine site,” said Kitts. Conductivity over a certain point allegedly has an adverse impact on aquatic life.
However, unlike other issues, water conductivity from surface mines is “not a problem that can be designed or engineered around. It’s a basic fact of earth disturbing activity,” said Kitts. “We can get past some of the EPA’s concerns, but how to satisfy their water quality demands is a different matter.” In many of their objection letters, the EPA has admitted that there is no practical way to treat water for conductivity.
Ironically, there is no scientific evidence to suggest conductivity has any harmful effects on fish or other higher levels of aquatic life. The EPA’s objection actually comes down to bugs. “They have determined that a certain type of Appalachian mayfly is especially susceptible to increased dissolved solids. In those areas that this particular mayfly is not found, the EPA has been making the determination that that stream area has been impaired,” said Kitts. This shift in population from one genus of mayfly to another is what troubles the EPA and the fact that other insects have taken that mayfly’s place doesn’t seem to matter to them.
“It’s a measurement of stream quality down to such a level that having a certain sub-set of insects leave and be replaced by others is enough to prevent mining from being allowable,” said Kitts.
Even though Thunder Ridge successfully beat back the environmentalists and is moving forward today, Kitts is still unsettled. “It’s hard to characterize this as a victory when we have this huge issue of water conductivity still hanging out there,” said Kitts “What do you do when you have spent hundreds of thousands of dollars to do things right and the EPA says that you’re still affecting the mayfly, so you can’t have a permit?”

Collateral Damage: Slow Permits Stymie Armstrong’s Progress
As the year ends, Armstrong Coal, which has been aggressively expanding in western Kentucky, has become another victim of the permitting crisis. “We have three absolutely crucial permits that are in front of the Corps of Engineers and have been on their desks for months. All year, and for some going back further, we have been desperately seeking their issuance. Today, after months of rebuilding, we have two completely rebuilt draglines ready to go, but we’re not allowed to dig any coal, so they’re just sitting there,” said Hord Armstrong, chairman and CEO, Armstrong Coal.
All together, the company has poured tens of millions of dollars in what have become stranded capital investments. They spent millions to rebuild the two draglines at Equality Boot mine, and millions more on the construction of the dock’s new coal handling facility and prep plant, mining and surface equipment, electrical services contracts and environmental studies. All further construction activities have ceased until they can use their facilities. “We are building a 4,200-ft conveyor belt that would take coal to the river which we’d then float to the dock for washing. We’ve suspended that project too,” said Armstrong.
Armstrong submitted the first of the permit applications to the Corps in October 2008. The Corps made its first and only site visitation in January 2009 and there was a public announcement made in April. Since then there has been no other activity. “We thought that permit would be issued in June. Now we don’t know if we’ll have it before January 1, 2010,” said Martin Wilson, president, Armstrong Coal. They are also waiting on a permit for their new dock, which they applied for in May 2008.
Armstrong submitted its application for the Equality Boot mine in December 2008. There was a site visit in early 2009, but since then there has been no public notice nor any apparent permit review conducted. “It’s our understanding that the Corps didn’t even read the application for a full 14 months. We thought the permit would have been issued by July, and here we sit today with millions of dollars of capital outlay and finance charges incurred and we can only sit and wait,” said Armstrong.
Company officials claim they would never have made those financial commitments had they known the delays the company would be facing. Based upon historical practices by the Corps in issuing permits over the last decade or more, “we built out and executed our total mine development plan. It’s aggressive because we are aggressive and the contracts were there. We asked the vendors to order the equipment. We let the contracts to build the facilities and now we’re SOL,” said Armstrong.
These delays have caused huge financial ripples to radiate throughout the region. “These are real pocket book issues for those hundreds of families hoping for jobs and job security,” said Armstrong. Before the new company took steps to re-invest in western Kentucky, the area had been suffering through a long-term recession that dated back to the phasing in of the Clean Air Acts in the 1990s that had, ironically enough, devasted the industry then. While jobs were scarce before Armstrong came in, the overall economic slowdown has wiped out the weak non-coal employment that still existed. Once Armstrong does receive its permits, it will have to get those employees back.
“If we had these three permits, we’d have between 200 to 250 new employees working there today, let alone all the multiplier jobs. At 4:1, that’s at up to a thousand jobs lost,” said Armstrong. “That’s roughly $10 million in mining payroll lost, not including benefits, taxes, and other revenue generated. In depressed Ohio County, it’s a huge loss and a stunning blow.”
The company’s underground mines, including the new Parkway mine, are in full production, however, “these surface mines are a big part of the building blocks for our growth platform. Equality alone is designed to mine 3 million tpy, or 60% of Armstrong’s total current production. That’s all in limbo now. We didn’t think we’d become the collateral damage of this Appalachian permitting issue, but we are,” said Armstrong.

Buchsbaum is a Denver-based freelance writer and photographer specializing in industrial subjects. He can be reached through his Web site at www.lmbphotography.com or by phone at 303-746-8172.