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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC Comments On OSM Acid Mine Drainage Proposal  Posted: October 30, 2002

October 15, 2002

Administrative Record

Office of Surface Mining

Reclamation and Enforcement, Room 101

1951 Constitution Avenue NW Washington, D.C. 20240 by e-mail osmrules@osmre.gov

Re: Advanced Notice of Proposed Rulemaking

Bonding and Other Financial Assurance

Mechanisms for Treatment of Long-Term

Pollutional Discharges and Acid/Toxic Mine

Drainage (AMP) Related Issues

67 Fed. Reg. 35070

To Whom It May Concern:

These comments are submitted by the Kentucky Resources Council, Inc., a non-profit environmental advocacy organization incorporated under the laws of the Commonwealth of Kentucky and dedicated to prudent use and conservation of the natural resources of the Commonwealth. KRC's membership includes numerous individuals who live, work or engaged in recreational activities in areas of the state that have been damaged by pollution discharges of acid and toxic mine drainage from unreclaimed and improperly reclaimed surface coal mining operations.

OSM invited comment on an advanced notice of proposed rulemaking (ANPR) by notice published May 17, 2002, with the comment period closing on July 16, 2002. By subsequent notice dated July 16, 2002, the comment period was extended an additional 90 days. 67 Fed. Reg. 46617.

As framed by the ANPR, the question for which OSM is seeking public comment is

what types of financial guarantees will best ensure adequate funding

for the treatment of unanticipated long-term pollutional discharges,

including acid or toxic mine drainage (collectively referred to as AMD),

that develop as a result of surface coal mining operations. Specifically,

we are interested in views from all parties on how we can best

address the proper level of treatment and the number of years

to use in calculating financial assurance amounts for AMD,

appropriate financial mechanisms to cover treatment costs, and

suggestions on appropriate enforcement in cases where financial

assurance is not fully adequate for the long term, but AMD is still being

treated. We also invite comment on whether codification of our AMD

policy would be helpful.

67 FR 35070-1.

The ANPR frames the issue as one in which "events occur during mining and reclamation that were not anticipated during development of the reclamation plan" which cannot be remedied with "corrective actions to eliminate the violation" and which "require long-term treatment and are not easily addressed."

Specifically, OSM expresses concern that issues such as formation of acid or toxic mine drainage (collectively referred to as AMD) require long-term treatment and that the "complexity" of the issues associated with financial assurance for long-term treatment of AMD suggest the "need for financial mechanisms more appropriate to address a long-term commitment to treat AMD."

OSM asks whether the agency should codify "the following requirements:"

That only permits where the operation is designed to prevent

off-site material damage to the hydrologic balance and minimize

both on- and off-site disturbances to the hydrologic balance will

be approved and (2) that financial responsibility associated with

AMD should be fully addressed.

OSM also asks for "input" on how to best address the "proper level of treatment and number of years to use in calculating financial assurance amounts for AMD, appropriate financial mechanisms to cover costs, and suggestions on appropriate enforcement in cases where financial assurance is absent or not fully adequate for the long-term, but AMD is still being treated. 67 FR 35071.

Comments

In this ANPR, OSM poses a series of questions. Following the outline of the ANPR, KRC responds in this manner:

Should OSM codify the requirements that permits not be approved unless the operation is designed to prevent off-site material damage to the hydrologic balance and minimize both on- and off-site disturbances to the hydrologic balance?

Should financial responsibility associated with AMD be fully addressed?

A passing glance at the text of the federal law and existing regulations reflects graphically that these "principles" are already part of the law if properly administered.

Section 509(a) already requires that the performance bond be posted in an amount and form sufficient to assure faithful performance of all of the requirements of the Act and the permit, in an amount sufficient to allow completion of the reclamation plan by a third party in the event of operator default. Where the cost of future reclamation changes, the regulatory authority has both the obligation and authority to adjust the bond amount upwards. Section 509(e).

So too, the requirements for protection of the hydrologic balance on and off the minesite are already firmly in law, and need no "codification." Section 515(a) requires that any permit issued under a state or federal program must comply with the environmental performance standards of Sections 515 (and with some adjustments, 516) including, but not limited to a mandatory obligation to

minimize the disturbances to the prevailing hydrologic balance

at the mine-site and in associated off-site areas and to the quality and

quantity of water in surface and ground water systems both during

and after surface coal mining operations and during reclamation by –

(A) avoiding acid or other toxic mine drainages by such measures

as, . . . .

If all that OSM accomplishes through this rulemaking process is to codify these two proposed principles – prevention of material damage to the hydrologic balance and requiring that financial responsibility be "fully addressed," then the agency will have done nothing more than rearrange the deckchairs on a foundering ship.

What is needed, and what the agency has avoided since the AMD policy adoption, is a renewed emphasis both in oversight of approved state and tribal programs and implementation of federal programs, on proper collection and analysis of sufficient information on the chemistry and composition of each strata of overburden material proposed to be removed or disturbed and on the coal seam itself to allow for realistic predictive analysis of the impact of the mining operation, realistic bonds posted at full reclamation cost based on maximum disturbance with a margin of safety, rather than mythical costs; enhanced water quality monitoring and compliance sampling, and immediate intervention to require revision to reclamation plans and augmentation of financial responsibility in the event of "unanticipated" AMD generation.

The agency failed in 1996 and continues to fail to focus its efforts on the area where most significant gains can be made in addressing AMD – prevention through proper permit review.

As KRC commented in a letter to then-Director Uram dated August 19, 1996

OSM's focus in developing a policy regarding acid mine drainage (AMD) has been unduly preoccupied with the treatment of acid mine drainage (AMD) rather than placing appropriate emphasis on the significant responsibilities of the state or federal program managers to prevent AMD through appropriate geologic and hydrologic investigation prior to permit issuance.

The Act demands minimization of impacts to water quality and the hydrologic balance on and off the minesite, yet the ANPR, like the AMD Policy before it, ignores the need to enhance permit review and instead focuses on the management of the problem after-the-fact to prevent “material” off-site damage, seemingly resigning itself and the residents of the coalfields to the inevitability of on-site damage and of unanticipated risks.

The proper planning of a surface coal mining operation to avoid acid and toxic material exposure to the elements so as to form AMD is not rocket science. The agency must, in order to credibly address this problem, begin at the permitting stage in order to require the operator to perform a higher degree of physical and chemical assessment of site-specific geologic data, speciated by strata, and a more rigorous inquiry of the acid and toxic-forming potential of the strata.

OSM acknoweldged in the response to public comments on the 1996 Draft AMD Policy, that no permit should be issued where creation of AMD was likely.

Properly implemented, the permitting program should result in a high degree of certainty regarding the acid or toxic-forming potential of various strata under the management approach proposed under the mining and reclamation plan. The agency focus in addressing the problem of "unanticipated" development of acid and toxic forming drainage, must be first to use existing regulatory authority to demand that state and federal program managers properly adhere to the mandates of Section 515 of SMCRA, which in no uncertain terms demand that the permit applicant demonstrate, and the regulatory authority affirmatively find (Section 510(b)), that the proposed mining and reclamation plan will “avoid[] acid or other toxic drainage[.]” The requirement to prevent off-site material damage under 30 CFR 816.41(a) must be read in the context of the other statutory obligations of the operator, which include appropriate identification of potentially acid- and toxic-forming strata before mining, proper handling of that material in order to isolate the strata from air and water necessary to cause AMD, and which demand that the Mining and Reclamation Plan demonstrate that such drainage will be avoided, not merely that “material damage” off the mine site will be avoided or “managed.”

Before focusing on the financial responsibility mechanisms for addressing pollutional discharges, the agency should focus oversight inspection, enforcement and program review on the many existing weaknesses in the permitting processes, which allow the permitting of operations whose spoil- and material-handling practices create AMD, such as:

1. The lack of appropriate analyses to demonstrate the presence or absence of acid or toxic-forming material, assuring that geologic core information is drawn in a manner and spacing sufficient to demonstrate that each strata has been tested for acid and toxic potential; (rather than allowing the blending of strata for analytical purposes, or selection of widely-spaced coring intervals for analysis);

2. The absence of appropriate and robust modeling and chemical analyses demonstrating that the material will remain isolated from water over the long-term to prevent the formation of acid drainage; and

3. The failure to assure that such material is handled in a manner that mini-

mizes adverse impacts on the mined areas, rather than merely on off-site areas.

Unless OSM intends to aggressively oversee state and federal program implementation to assure that the permitting process is properly assessing AMD potential, the success of an AMD initiative is made impossible. In recent years, OSM has moved from rigorous program oversight to a "results-oriented" approach that measures success of state program implementation by violations encountered. In this area, the failure of that approach is no where more evident, since AMD violations may first become detected long after improper handling of materials has resulted in the conditions under which AMD can form, and once detected by the regulatory agency, the only options available are to attempt to adjust upwards the financial responsibility after the fact, or to attempt for cause forfeiture of an almost-certainly inadequate bond.

KRC believes that OSM's strategy must first demand improvement in state permitting of mining operations in order to require the operator to demonstrate in more rigorous terms how the method of mining and spoil management will minimize the disturbances to the prevailing hydrologic balance applies “at the mine-site” as well as associated off-site areas. The bar was set high intentionally by Congress, and Section 515(b)(10)(A) demands that the operator “avoid[] acid or other toxic mine drainage” rather than manage it; by “preventing or removing water from contact with toxic producing deposits,” as well as other techniques to keep watercourses from being affected. Those techniques must, as the Interior Board of Land Appeals determined in the Rith Energy decision, meet the requirement of avoidance of AMD and toxic drainage; not merely manage or treat the drainage.

The second prong of any strategy must be, for those coalfield areas in which it is suspected that acid or toxic-forming strata may be present, an enhanced requirement for monitoring under pollutant discharge permits and the SMCRA permit. The presence of acid or toxic discharges could be detected by requiring sampling and reporting of pollution loading upstream of the treatment facility, in order to determine whether the raw water pH from the disturbed areas is significantly acidic. While the OSM ANPR suggests that AMD problems are unanticipated events arising after mining, in reality the discharges are often present during mining and the extent of the problem is masked by treatment, emerging only after bond release or reclamation because the discharge is no longer artificially kept within limits by treatment. Complete inspections for each approved state and federal program should include more attention to collection and sampling of runoff from disturbed areas in order to provide earlier detection of problems in spoil and water management on site.

The third prong must be immediate intervention in situations where AMD is detected, in order to require the operator to revise the reclamation plan to identify the acid and toxic forming material and to isolate the material from air and water in order to eliminate the AMD. The ANPR goes directly from permitting to bond adjustments and perpetual treatment, ignoring that in many cases more permanent structural solutions can and should be used to direct the excavation or isolation of the material, or barrier technologies to minimize saturation and creation of AMD. Any encountered AMD, whether currently treated or not, is a violation of the performance standard requirement to avoid creation of AMD, and must be subject to enforcement action to revise the permit reclamation plan and adjust the bond accordingly.

The fourth prong must be financial assurances. The initial financial responsibility must be better calculated to address these problems, particularly since states such as Kentucky which substantially fail to calculate AMD potential as a bonded liability at all. However, higher bonds are not an acceptable method of legitimizing a mining operation that otherwise has a realistic potential to create AMD and which should not be permitted at all; nor are raising bonds after the fact a realistic approach to addressing problems after they arise. KRC is unaware that any surety or bank will bond or guarantee such a problem after it becomes manifest.

In the event that AMD is encountered, an independent assessment of the extent of the problem and costs of remedial actions and/or necessary treatment to abate the discharge should be required, and the financial responsibility mechanism must be sufficient to complete that plan as provided in Section 509.

Corporate self-bonding is an allowable but not required component of approved state programs, and states such as Kentucky that have had significant problems with surety insolvencies, have wisely avoided the potential problems of self-bonding. Nothing short of deposited funds should be allowed for addressing AMD, due to the difficulty of predicting the duration of necessary treatment and the problems of corporate bankruptcies and abrupt changes of fortune within the mining industry.

However the operator proposes to provide bond coverage for the cost of this reclamation, no bond can be released in the presence of AMD. The bond must be sufficient to assure availability of funds to eliminate the AMD problem at the source, since that is the only remedy consistent with the intent of the Act that mining be a temporary use of land" rather than a perpetual source of pollution management responsibility. In all cases, the minimum standard must be attainment of appropriate water quality and effluent standards, including any TMDL requirements, and the remedial plan and bond amount must be geared to attainment of that goal. Absent effective action to eliminate AMD at the source, the funded liability must be sufficient to provide for perpetual treatment. The fund should be deposited as part of the proposed remedial plan and be sufficient so that the interest would meet the annualized treatment, monitoring and other remedial obligations with appropriate elevator for third-party overhead and COLA adjustment.

Nothing is a surrogate for much more intensive site-specific assessment and review based on properly-designed geologic data collection, prior to issuance of mining permits; or for permit denial in areas of AMD potential absent submittal of workable, enforceable and monitored plans for isolation and management of acid and toxic-forming material to prevent AMD formation. Serious consideration must be given to reviewing hydrologic data in areas of known acid overburden and coal, to assure that before any bond (in particular Phase 1) release occurs the absence of AMD has been demonstrated and verified by the agencies through inflow and outflow monitoring; otherwise insufficient bond will remain to address the AMD issues. Calculations of bonds in AMD-producing areas must also consider the cost of treatment and of on-site actions at source control (such as installing liners; source removal; and other remedial measures) that could be taken to remedy any AMD. Any AMD policy codification should consider the totality of obligations of any operator under Section 515(b)(10) and Section 510(b)(1) of the Act; not merely the duty to prevent off-site “material” damage. Absent a critical assessment of the failure of permitting among the states to identify acid and toxic-producing strata, to predict AMD creation, with concrete actions to revamp permitting to address these long-standing deficiencies; and the courage to deny permits where mining cannot be conducted so as to prevent AMD generation, any policy will be ineffective in assuring the prevention of AMD and will find it problematic to secure third-party assurances or meaningful self-assurances to pay for long-term treatment.

Thank you in advance for your consideration of these comments.

Sincerely,

Tom FitzGerald

Director

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