By Lee Buchsbaum

Throughout the fall of 2008 many Appalachian political insiders warned their constituents and Vice-Presidential Candidate Biden said the future Obama administration planned to bankrupt the coal industry. Though candidate Obama promised to restore funding for a revised FutureGen and a host of other clean coal projects, his newly empowered Environmental Protection Agency (EPA) on January 20, 2009—inauguration day—immediately began sending objection letters to coal companies telegraphing its real intents. 

In the months since, using pseudo-science, mythology and public opinion, it has declared war on the entirety of the Appalachian coal industry and is threatening the future of the rest of it. Under the guise of protecting and ensuring water quality, a cadre of unelected, appointed ideologues at the EPA have found an angle of attack that could shutter hundreds of Central Appalachian mines. 

Using the Clean Water Act (CWA) as a cudgel, the EPA has determined that alleged coal mining caused alterations in measurable stream conductivity is harming that most endangered of organisms in West Virginia, Kentucky, Virginia and several other states: the lowly Mayfly insect. As former President Reagan once opined, fear has spread throughout Appalachia as government agents have arrived with the promise that they are here to help.

Led mainly by officials in the EPA Region III office in Philadelphia, throughout the fall and winter of 2009, the agency has increased its political jockeying and now has, more or less, assumed supremacy over a newly prostrate Army Corps of Engineers and a variety of state offices. Without regard for established protocol and state’s rights, on April 1, the EPA released a new set of proposed mining regulations that, if allowed to become law, would virtually criminalize the extraction of Appalachia’s most valuable commodity.

Despite the billions of dollars coal contributes to local, state, regional and the national economies, despite the soaring export value of U.S. metallurgical coal, and despite a deepening recession, the eco-zealots at the EPA are determined to protect the valuable lives of those hardworking Mayflies and ensure that future Americans will eventually be able to visit the emptied hollers, overgrown mountains and boarded up storefronts of a new tourism-based Appalachian economy that will eventually, no doubt, romanticize their former, once vibrant, regional mining culture. 

The Draconian Effects of the EPA’s Manifesto
Historically, the EPA develops recommendations for minimum and maximum State Water Quality Standards. The individual state then has to adopt those recommendations as they apply. The West Virginia Legislature is forced by statute to approve those changes. However, states determine their own narrative qualities and the overarching theme of what those standards should be able to achieve. Though narrative quality standards cannot have conditions that cause adverse impacts, the EPA has generally allowed the individual states to interpret those standards. In West Virginia, the preamble to the state’s Water Pollution Control Act mentions water quality but also the maintenance of a healthy industrial base that provides employment opportunities for the citizens of the state. In
other words, the state government must strike a balance between environmental interests and the economic needs of the citizenry.

“The EPA’s ‘manifesto’ is not based on sound interpretation of state water quality standards. They are simply substituting their own judgments for the state’s. As it stands, I don’t know how we can live with this,” said Jason Bostic, vice president, West Virginia Coal Association. EPA Administrator Lisa Jackson has stated that she knows implementation of these rules is going to have a severe and detrimental effect on the industry and the people of West Virginia. Tens of thousands of jobs are on the line, billions of dollars in state, local and federal income are now in jeopardy.

The current mountaintop mining controversy is nothing new. In the late 1990s, the EPA’s Region III office was involved in a number of studies and initiatives aimed at curtailing the practice. Frustrated by their failure, “they have been laying in wait very patiently for the opportunity to come back at us,” said Bostic. The first new EPA comment letters were dated January 20, 2009. They weren’t waiting any longer. “The political appointees—they don’t necessarily have philosophical disagreements with what some of the lower-level bureaucrats are doing. Also, the Council on Environmental Quality—a pseudo-agency within the Executive Branch has been extremely involved in this process. They are now choosing to look at this as a social and environmental justice issue,” said Bostic.

The new April 1 directive affects all new permits going forward and all plans to expand existing permits. “If you’re asking to add a new outlet for instance, the EPA is requiring that all permitting actions in West Virginia be sent to Region III offices in Philadelphia.  That way, if you’re creating an outlet, the EPA has a chance to comment,” said Gene Kitts, senior vice president, mining services, International Coal Group, Inc.

The EPA’s water quality standards for coal mining are now so high that many regional and municipal water systems, if put to the same criteria, would not pass muster. “Some cities are in the 600 to 700 conductant range. EPA drinking water standards is 500.   Bottled Fiji water has a higher conductivity than what the EPA is requiring of us. Their conductivity standards are half again of what bottled water would be. This is nothing more than a perversion of science to achieve a political goal. The EPA is simply catering to its anti-mining and anti-coal political base,” said Kitts.

Though the EPA has affectively made surface mining impossible, the practice remains legal under SMCRA, which was passed by an elected body of legislators, not put forth by unelected appointees. “Rather than go through a rule making process to attack surface mining, they went through the CWA and came up with this somewhat contrived limit of 500 conductivity. That number will catch all types of mining, be it underground, coal preparation, surface mining, refuse disposal or normal site development,” said Kitts.

When rock is broken, the minerals released generally cause conductivity to increase.  No matter what the genesis of the activity, be it highway construction or commercial development, over time, normal weathering and oxidation will cause that rock to yellow. The net effect of all forms of mining, underground or surface, is that certain minerals will be released. Stream conductivity issues are not unique to Appalachia. One of the first studies to cite this comes from an environmental impact document written 30 years ago about the Big Muskie mine in Ohio.

Perhaps most frustrating is that over the last three decades, the mining community has designed and managed strict Approximate Original Contour (AOC) requirements—the strictest and most complicated model in existence anywhere in the world.

“Again based on EPA concerns, we comply with the CWA. This is reflected in our 401 permits and certifications. After more than 30 years since SMCRA, we’ve learned quite a bit about how to revegetate post mined lands, as well as how to better develop that land for other uses. The Obama EPA, however, is choosing to focus on the one thing that’s a fact of life: when you disturb the earth, water conductivity goes up,” said Bostic.

 

Gary White, president and CEO, International Industries Inc., which owns or controls several coal mines including Hampden Coal was shocked when he first read the April 1 memo. “After I read it, I contacted my engineering team and found out that we have roughly 20 permits up for renewal in the next few years that these new regulations pertain to. I asked how many would meet these new conductivity requirements. My engineering team replied that all would fail to meet them. Stunningly, only one of those 20 is related to a surface mine. All the rest are for deep mines or prep plants,” said White.

“There are no known alternative mining methods that would achieve the EPA’s stringent new water quality standards,” said Kitts. If these statutes are enacted, “industry will be staggered by this. If you look across the Appalachian region, and take a scan of the water quality data, there are very few existing operations that consistently discharge less than 500 conductants. Most, in fact, are double or triple that number,” White said.

The guidance the EPA issued basically says, “if you have a project with no fills then you might get a permit. If you’ll require one fill and you can prove that you can meet their new criteria, then you might be able to get a permit. But if you have a project with multiple fills, the EPA may allow you the first and then they will determine if monitoring shows you can stay within their new limits. If you can, then you may be able to put in other fills in sequence. But it’s all very uncertain,” said Kitts.

In effect, the EPA is stating a major operation with millions of dollars tied up in equipment and site development will only be able to move forward one valley fill at a time, on a site by site basis, at the will of the EPA. The federal injection of uncertainty will terrify investors and no doubt “very few operators would elect to follow that route,” said Kitts.

Throughout April and continuing today, the affected states, mainly West Virginia, Virginia and Kentucky, are trying to evaluate their next steps. “We’re hopeful that the states will come up with something that is more reasonable and defensible. Until then, we’re at a standstill,” said Kitts.

Conductivity, Cumulative Impacts and Who Determines Impairment

If an operation is discharging into an unnamed tributary or headwater of an intermittent stream that occasionally flows into another unnamed tributary stream, the EPA can determine that that operation is having a cumulative impact. In the mountains of Appalachia there are literally tens of thousands of headwaters streams. “We’re not impacting something that’s threatened or endangered or impacted forever. In time, after mining and restoration are completed, these streams will be re-established,” said Kitts. 

Though he concedes the same amount and mixture of insects might not reappear, those that do will become part of the general food chain. The industry, however, has long understood how to ensure that streams are vibrant and support aquatic life. The specific members of the mayfly or Benthic community that are now being used as indicators are the species of mayfly most intolerant of any water quality changes. While they may temporary disappear from an affected water channel, other species of mayfly and other insect species do take their place. Even though the oft-cited Pond-Passmore study found that following a shift in the Benthic population, the overall number of aquatic life is the same and the food chain remains intact, the EPA ignores those findings while instead using other criterion.

The findings of a cumulative impact study that ICG commissioned, which essentially provided a snapshot of the health and stream quality of the Middle Fork of Kentucky River—a major tributary of the Kentucky River—were never contested by the EPA. Instead the agency ignored industry findings and simply came out with its own guidance. “They are looking at local impacts. Local, in this case, is measured at the smallest headwater streams. They don’t care that it’s not having an impact in a third or a fourth order stream below. They’re not looking at that and have ignored all the data that doesn’t support their own case. Show us where we are impacting long term? Show us the widespread devastation. They can’t because its not there,” said Kitts.

“For some reason, below these mining operations there are certain fragile species of mayfly that can’t adapt to changes. Other Benthic species can. In fact, there is still a viable bug community below most operations that’s doing everything that those mayflies did before mining. This community still processes the leaves and produces the carbon that supports the entire population. The CWA, whether it’s the state or federal CWA, is not a Mayfly Protection Act. It’s written to protect the aquatic community as a whole. There’s no evidence that we’re impairing the fish community. Nor is there any evidence the bug community completely disappears. There’s simply a shift,” said Bostic.  The EPA and its legions of ideologues are using this Benthic community shift as weapon of mass destruction against the industry as a whole. Without question, it has finally discovered a narrow avenue to force a slew of legislation.

“The EPA is effectively standing back and saying ‘sure you can mine, but you can’t have any impact on the water at or downstream of your mining site.’ They are creating a situation that, as we see it, is impossible to meet,” said Kitts.

At the moment, the EPA is saying that certain streams are impaired but the West Virginia State DNR has these same streams listed as high quality fisheries. In fact, what’s worse is that there is no clear connection between a stream’s conductivity and any measurement of stream health, especially when pertaining to fish populations.

The threat though, goes far beyond just surface mining. “Their water quality argument threatens every single thing we do. This is not about mountaintop mining. This is not about surface mining. It’s not about big operations or small operations. It’s about coal. Water pumped off of a longwall will have a higher conductivity level than water will coming off the surface. The EPA has adopted this line of attack because it pertains to everything we do,” said Bostic.

“If the legal criteria being established here is allowed to stand then whether you’re mining in the Midwest or doing super scale surface mining in the PRB, it is just a matter of time before the EPA spreads its new mandate nationwide,” said Bostic.

Shrinking Markets and Shrinking Appalachian Electric Power Coal Purchases
If able to survive legal challenges, the EPA’s decision will have the net effect of sterilizing and removing billions of tons of some of America’s most valuable coal out of the marketplace. The metallurgical portion of that is huge in terms of value. Met coal, which is roughly 45- to 50-million tons of annual production, or one quarter of the total CAPP output, will maintain a value one way or another. In affect, what the EPA is doing may have a real negative impact on reducing our trade imbalances as increasing amounts of U.S. production are heading overseas to China and India—and would be for decades to come. “It will be a boon for Canadian met coal producers, and others who can economically ship to growing Asian markets,” said Matt Preston, coal analyst, Wood Mackenzie. 

Overall, “price volatility will increase as the coal supply is shrinking fast,” said Preston. “We estimate a 10% increase in the long run on prices as there will be much less production, and that’s assuming the new rules don’t make a big cut into deep mines.  Over a 20-year period, we see that CAPP steam demand will drop to very little. It’s not a question of what the value of those reserves is, it’s a question of how to actually mine and sell them.” No doubt Illinois Basin, Latin American and PRB coal will fill in the steam coal void, but what of the communities and lives affected? 

Currently the Pittsburgh No. 8 seam, which is a potential replacement for some of the affected coal—both steam and PCI—is under threat too. “In order to meet the new dissolved solids standards, you have to put that water through a reverse osmosis process. Until then, no process that uses water in Pennsylvania would qualify under the new standards,” said Preston.

The number of factors putting increasing pressure on Central Appalachian coal, according to internal projections by American Electric Power (AEP), the largest single buyer of coal in the U.S. and historically one of the most prolific consumers of CAPP coal, “will drive the prices for other eastern coals—Northern Appalachian and Illinois Basin” as they fill in the void left behind. “We’ve seen this coming for a while. That’s one of the reasons we’ve worked to reduce our reliance on Central Appalachian coal and increase our use of Northern Appalachian coal and, to a lesser extent, Illinois Basin and possibly PRB,” said Pat Hemlepp, director, corporate media relations, AEP.

“If folks in the Southeast needed excuses to close coal fired power plants, this is going to help make them think about gas plants as they may not be able to rely upon coal supply,” said Preston. 

The Future of Appalachia

From here out, according to Kitts, the coal industry’s best hopes are new inventions, lawsuits, or a combination of both. “The states still have a long shot to be able to create their own interpretive guidance and do battle in court with the EPA. We’ve faced challenges starting in 1977 with SMCRA. We’ve been able to engineer around, design through or just avoid these issues. Industry now works diligently to avoid any creation of acid mine drainage and mitigate other discharges. But when the EPA says you can’t have any impact on water—not that you can’t kill streams, which we readily accept—but you can’t have any discernable impact on the most fragile and intolerant insect in the stream, that’s going too far,” said Kitts.

Kitts recommends that individual states should develop their own protocols that would allow mining to continue. While they create these, the EPA should open up its studies and allow others to attempt to replicate its findings. At the moment, there are some studies underway searching for a direct link between stream conductivity and overall aquatic health. Additionally, industry is working with various research universities including the University of Kentucky to develop new types of valley fills that feature a more compacted cap which in turn should minimize the amount of water that’s impacted by the fill. 

Given that mountaintop mining has been an ongoing practice for more than 30 years, Kitts questions how much attention has been paid to determining stream conductivity beneath older fills. Instead of only measuring where mining is active, why not look at areas that have long ago been in advanced stages of reclamation? 

“If you apply their guidance to new and expanding permits, and if you don’t have a permit in hand or are operating, then you’re future mining is severely limited. You may be able to mine what’s under permit now, but if these guidance documents become hard and fast rules, I see very little opportunity for continued mining after your permit expires,” said Kitts.

“One of the most offensive aspects of this debate is for the EPA to construe it as an environmental justice issue. Mining jobs are the best paying in the region and the money generated from coal is far and away the largest financial engine in the area. The worst enemy of the environment is poverty. Take away those jobs and that revenue stream and you’ll really see an environmental injustice,” said Bostic.

“If the current administration doesn’t change its direction or isn’t caused to change its direction than we may need to eventually develop a new make-work program to hire former coal miners now driven into desperate poverty,” said White.

“The ultimate answer, like most political problems, will come to us when there is a crisis.  If this administration is successful in pursing the agenda it appears they have, then the situation will only correct itself when people here start paying $0.25 per kilowatt-hour like folks do in New York City as opposed to $.05 here. You have to personalize this through the ultimate cost of the price of energy,” said White.

Either way, “we’re going to stay in the game and fight with every tactic we can,” said Kitts.

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.