Renewable Energy Update

IT’S THE GIVING SEASON: OBAMA ADMINISTRATION LEAVES PARTING GIFTS FOR THE COAL INDUSTRY

January 5, 2017

By: Douglas J. Crouse and Robert G. McLusky

Obamanation: 8 Years Later, OSM Finalizes Stream Protection Rule   

The United States Office of Surface Mining (“OSM”) has finalized its “Stream Protection Rule (“SPR”) (12/20/16). This was formerly known as the “buffer zone rule” and dates to the early 1980s. OSM adopted it originally as a means of keeping sediment out of streams. It prohibited land disturbance within 100 feet of intermittent or perennial streams unless the applicant made certain showings about protecting water quality and environmental resources. In the late 1990s, though, the rule became the centerpiece of the assault on surface coal mining operations when a federal court in West Virginia relied on it to prohibit the construction of new excess spoil valley fills. Although that ruling was reversed on jurisdictional grounds, anti-mining advocates continued to advance it in permit challenges. In the waning days of the George Bush administration, in late 2008, OSM substantially revised the rule. That rule expressly recognized that SMCRA could not be used to prohibit valley fills authorized under Section 404 of the Clean Water Act, but did require applicants to make extensive showings that they had minimized generation of excess spoil. Anti-mining forces immediately challenged the rule as insufficiently stringent, and claimed OSM had failed to consult with the U.S. Fish & Wildlife Service. The new Obama administration attempted to vacate the rule immediately by “confessing error,” but the Court ruled that OSM would either have to litigate the issue or vacate the rule through rulemaking.

For the past 8 years, the Obama administration has fumbled its way through the rulemaking process to produce the current SPR. The current rule started as a means to limit surface mining, but is now also widely regarded as a vehicle to restrict longwall underground impacts to streams. Along the way, leaks from OSM’s review process suggested that the rule would result in widespread unemployment in the east. OSM has spent several years trying to repair this damage, and now implausibly claims that the rule will result in a net employment increase. OSM concedes that coal mining jobs will diminish, but claims that more people will be hired to comply with the mitigation and restoration portions of the rule—a claim that seems to assume mining will proceed apace and that industry will absorb all of the new costs imposed by the rule with no production decreases. That might have been true if cheap and widespread sources of shale gas had not become available over the last 8 years, but is economic nonsense in the current environment.

The State of North Dakota has already challenged the rule, which is set to become final on January 19, 2017. Other industry challenges are sure to follow, and it is likely that the rule will become the object of a disapproval resolution under the Congressional Review Act, which empowers Congress to void so-called “midnight” rules by the executive branch.  OSM has issued briefing documents and a press release regarding the elements of the final rule. 

EPA Releases Draft Field-Based Methods for Developing Aquatic Life Criteria for Specific Conductivity (12/10/16): Specific conductance, or conductivity, is a surrogate for measuring dissolved salts in water. Most water quality standards to protect aquatic life are developed using the results of laboratory exposure tests on a variety of aquatic life, and EPA has never adopted a recommended aquatic life criterion for conductivity. Nor have many states adopted conductivity criterion to protect aquatic life.

In 2011, however, as part of its efforts to restrict surface mining in the east, EPA developed a “conductivity benchmark” which it used as a sort of informal water quality standard in objecting to NPDES permits that did not include conductivity limits. The Benchmark did not rely on exposure tests performed in laboratories. Instead, using a database from the WVDEP of paired water chemistry and aquatic insect sampling, EPA inferred causative impacts to different insects at varying conductivity levels. It arrived at a “suggested” range of 300-500 ?S/cm, a value widely considered unachievable downstream of most surface mining.

EPA purportedly relied on epidemiological principles and statistics to discount potential alternative or confounding factors. Now, it has proposed documents that can be used by states to adopt their own aquatic life criterion for conductivity using their own field data. It also suggests a method by which states with sufficient water chemistry information, but without paired benthic insect sampling, may extrapolate from the work done with the WV and other databases to develop a criterion. And, finally, the released documents include a suggested criterion of about 500 ?S/cm to protect fish based on a review of eastern data.

EPA’s documents note that the draft documents are not a rule and do not establish legally binding requirements, but there is little doubt that anti-development activists will rely on the data to force EPA to adopt a recommended criterion and on states to do the same. EPA is providing a 60-day public comment period that will run from the date of publication in the federal register.

This article was authored by Robert G. McLusky and Douglas J. Crouse, Jackson Kelly PLLC.