Energy and Environment Monitor

OSM Announces Increase in Civil Penalties – But Not Where It Will Matter

February 13, 2017

By: Blair M. Gardner

Bad news: OSM announced an increase in the amount of civil penalties it will impose for two categories of violations. The first is a daily penalty for continuing violations which remain unabated, and the second for the maximum amount for an individual civil penalty. Good news: the increase will not apply in states which directly regulate mining, meaning most states where coal is actually mined.

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 was enacted and signed by President Obama in November 2015. It applies to all federal statues which impose civil penalties as part of their enforcement process and requires each federal agency to recalculate the civil penalties to reflect annual changes in inflation. (82 FR 9349). As a consequence of this law, the maximum daily penalty for an on-going violation in 2017 will now be $2411 up $39 from 2016.The maximum individual civil penalty will be $16,073.

While not insignificant, they will only apply in states where OSM is the regulatory authority responsible for enforcing SMCRA. Only three such states – Arizona, Tennessee and Washington – actually mine coal. In states where coal is mined and the states administer the SMCRA programs (e.g., Pennsylvania, West Virginia, Kentucky, Ohio, Indiana, Colorado and Wyoming), the rule has no effect.

In a bit of an embarrassment OSMRE acknowledged having “miscalculated the existing maximum individual civil penalty rates  . . . that it published in the Federal Register on July 8, 2016 (81 FR 44535), and which thereafter became effective on August 1, 2016. The value should have been $15,814.” This actually led to a modest reduction from the penalty noted last year.

This article was authored by Blair M. Gardner, Jackson Kelly, PLLC.