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

KRC Opposes Request for "Valid Existing Rights" Finding That Would Allow Strip Mining Within Daniel Boone National Forest  Posted: November 10, 2010

November 1, 2010

Joseph L. Blackburn
Office of Surface Mining Reclamation
And Enforcement
2675 Regency Road
Lexington, Kentucky 40503
Via email jblackburn@osmre.gov

Re: 75 FR 53340
Request for Determination of Valid Existing Rights Within The Daniel Boone National Forest, Kentucky

Dear Director:

These comments are submitted on behalf of the membership of the Kentucky Resources Council, Inc., a nonprofit environmental advocacy organization providing legal and strategic assistance without charge to community organizations, low-income individuals and communities. KRC submits these comments on behalf of KRC members who use and enjoy the scenic and natural resources of the Daniel Boone National Forest in Clay County, Kentucky, and who will be adversely affected if a determination is made finding that “valid existing rights” to conduct surface coal mining operations has been demonstrated in this instance. These comments are also submitted on behalf of Kentucky Heartwood.

As you are aware, Section 522(e) of SMCRA, 30 U.S.C. 1272(e) prohibits surface coal mining operations on certain lands after the date of SMCRA's enactment, which was August 3, 1977. The Act specifies (without defining) that these prohibitions and restrictions are "subject to valid existing rights." The Act further provides that these prohibitions and restrictions do not apply to operations that were in existence on the date of enactment.

Specifically, with respect to the request for a determination filed on June 7, 2010 as to VER to conduct surface coal mining operations on approximately 175 acres of land owned by the U.S. Forest Service within the Daniel Boone National Forest in Clay County, Section 522(e)(2) prohibits surface coal mining operations on Federal lands within the boundaries of any national forest, with two exceptions, neither of which applies in this case, since the first allows the approval of surface operations and impacts incident to an underground mine after the making of certain findings, and the second applies only west of the 100th meridian.

On December 17, 1999, OSMRE published a final rule defining, for purposes of Section 522(e), what constitutes “Valid Existing Rights” (VER) so as to allow an applicant to avoid the prohibitory effect of that section. With respect to surface coal mining, VER is defined in this manner at 30 CFR 761.5:

"Valid existing rights means a set of circumstances under which a person may, subject to regulatory authority approval, conduct surface coal mining operations on lands where 30 U.S.C. 1272(e) and § 761.11 would otherwise prohibit such operations. Possession of valid existing rights only confers an exception from the prohibitions of § 761.11 and 30 U.S.C. 1272(e). A person seeking to exercise valid existing rights must comply with all other pertinent requirements of the Act and the applicable regulatory program.

(a) Property rights demonstration. Except as provided in paragraph (c) of this definition, a person claiming valid existing rights must demonstrate that a legally binding conveyance, lease, deed, contract, or other document vests that person, or a predecessor in interest, with the right to conduct the type of surface coal mining operations intended. This right must exist at the time that the land came under the protection of § 761.11 or 30 U.S.C. 1272(e). Applicable State statutory or case law will govern interpretation of documents relied upon to establish property rights, unless Federal law provides otherwise. If no applicable State law exists, custom and generally accepted usage at the time and place that the documents came into existence will govern their interpretation.

(b) Except as provided in paragraph (c) of this definition, a person claiming valid existing rights also must demonstrate compliance with one of the following standards:

(1) Good faith/all permits standard. All permits and other authorizations required to conduct surface coal mining operations had been obtained, or a good faith effort to obtain all necessary permits and authorizations had been made, before the land came under the protection of § 761.11 or 30 U.S.C. 1272(e). At a minimum, an application must have been submitted for any permit required under subchapter G of this chapter or its State program counterpart.

(2) Needed for and adjacent standard. The land is needed for and immediately adjacent to a surface coal mining operation for which all permits and other authorizations required to conduct surface coal mining operations had been obtained, or a good faith attempt to obtain all permits and authorizations had been made, before the land came under the protection of § 761.11 or 30 U.S.C. 1272(e). To meet this standard, a person must demonstrate that prohibiting expansion of the operation onto that land would unfairly impact the viability of the operation as originally planned before the land came under the protection of § 761.11 or 30 U.S.C. 1272(e). Except for operations in existence before August 3, 1977, or for which a good faith effort to obtain all necessary permits had been made before August 3, 1977, this standard does not apply to lands already under the protection of § 761.11 or 30 U.S.C. 1272(e) when the regulatory authority approved the permit for the original operation or when the good faith effort to obtain all necessary permits for the original operation was made. In evaluating whether a person meets this standard, the agency making the determination may consider factors such as:

(i) The extent to which coal supply contracts or other legal and business commitments that predate the time that the land came under the protection of § 761.11 or 30 U.S.C. 1272(e) depend upon use of that land for surface coal mining operations.

(ii) The extent to which plans used to obtain financing for the operation before the land came under the protection of § 761.11 or 30 U.S.C. 1272(e) rely upon use of that land for surface coal mining operations.

(iii) The extent to which investments in the operation before the land came under the protection of § 761.11 or 30 U.S.C. 1272(e) rely upon use of that land for surface coal mining operations.

(iv) Whether the land lies within the area identified on the life-of-mine map submitted under § 779.24(c) or § 783.24(c) of this chapter before the land came under the protection of § 761.11."

30 CFR 761.5.

Thus, in order to establish the existence of VER with respect to a tract of land, the applicant must demonstrate the legal right to conduct the type of surface coal mining operation proposed, as well as meeting the “good faith/all permits” or “needed for and adjacent to” tests.

A review of the documentation submitted in support of the request for a determination of VER appears to fall short of that required. The documentation consists of a legal description of the land to which the request pertains, as well as several deeds documenting the chain of title for the land.

The applicant has requested a VER Determination with respect to approximately 175 acres, yet in reviewing the documentation submitted, there does not appear to be any evidence supporting a finding that the applicant possessed, at the time that the land became subject to the protections of SMCRA (that being August 3, 1977), or had made a “good faith” effort to obtain, all of the necessary permits to allow surface mining on the 175 acres.

Item 9 is an application by Mark IV Coal to conduct strip and auger mining operations, filed with the Commonwealth of Kentucky Department for Natural Resources and Environmental Protection (DNREP), seeking authorization to affect roughly 56 acres of land (52.5 acres to be mined and 3.4 for access road). It is clear from this permit application and the permit that was subsequently issued (which is identified as Item #10) that strip and auger mining activities required a permit under state law at the time of enactment of SMCRA, so that the applicant would have to possess a permit allowing the conducting of such mining operations with respect to the 175 acres, or would have had to make a “good faith” effort to have obtained such permits by having made application for all necessary permits (including a permit from the DNREP) as of August 3, 1977.

Item 10 is the permit that was issued to Mark IV Coal Company, Permit 3472-74. On the face of the permit, it is apparent that the authorization to conduct surface coal mining operations expired on November 12, 1975, so that absent a demonstration that an additional application had been made and a permit authorizing conducting of mining operations had been issued or was pending, no finding of VER can be made even as to the 59.5 acres that had been under permit to Mark IV Coal.

Items 11 and 12 reflect that final bond release under Permit 3472-74 was recommended on December 19, 1978. That the bond release occurred subsequent to the enactment of SMCRA is of no consequence, since the authorization to conduct mining activities had expired in 1975, and after that time the permittee had no authority “to engage in Strip Mining of Coal” under the 1974 permit.

The only other documentation provided in the request is a map for a strip and auger mine in the name of Mountain Clay, Inc, dated May 15, 1970, bearing the permit # 09243-2. There is no indication as to whether Mountain Clay actually applied for and received a state permit to conduct such mining activities, nor is there evidence that such an application was in existence and authorized such mining, or was pending as of August 3, 1977. There appears to be some overlap in the area identified to be mined, but it is unclear whether Permit 09243-2 was ever issued, and whether the permit was in effect and conveyed any authorization to conduct mining activities as of August 3, 1977.

In sum, the documentation reflects that Mark IV had authorization to engage in strip and auger mining with respect to 59.5 acres of land, that such authorization that expired in 1975, and that it conducted such mining and later achieved bond release after successful reclamation. After November 12, 1975, Mark IV Coal had no authority to engage in strip mining activities even with respect to 59.5 acres. Even assuming that the applicant for the VER determination was successor-in-interest to whatever “rights” were possessed by Mark IV Coal, that authorization to mine expired in 1975. For as OSMRE noted in the 1999 VER Final Rule, “Revoked, expired or lapsed permits or authorizations do not qualify for consideration under the good faith/all permits standard because (1) they are no longer valid authorizations to operate and (2), in the case of an expired permit, the failure to renew or seek renewal in a timely fashion indicates a lack of a good faith effort to obtain all necessary permits and authorizations.” 64 FR 70777.

There is insufficient documentation to support a finding that the applicant requesting the determination of VER had possession of (or had applied for) all necessary state and federal permits authorizing strip mining of coal on any of the 175 acres as of to August 3, 1977. Those necessary permits and authorizations, according to OSMRE, include, “but are not limited to, mining permits, National Pollutant Discharge Elimination System (NPDES) permits, U.S. Forest Service special use permits, Mine Safety and Health Administration authorizations, air quality plan approvals, local government approvals, and (for some types of facilities) building permits and zoning changes. 64 FR 70776-70777 (December 17, 1999).

Alternatively, there has been no demonstration that the 175 acres for which a VER determination is sought are “needed for and adjacent to” an existing mining operation. In order to meet that test, the applicant would have to demonstrate that the “land is needed for and immediately adjacent to a surface coal mining operation for which all permits and other authorizations required to conduct surface coal mining operations had been obtained, or a good faith attempt to obtain all permits and authorizations had been made, as of August 3, 1997 and that prohibiting expansion of the operation onto these 175 acres would “unfairly impact the viability of the operation as originally planned” before August 3, 1977." 64 FR 70831-2.

Inasmuch as the application does not provide the documentation required to establish VER with respect to the 175 acres for which the determination has been sought, KRC respectfully suggests that the Office of Surface Mining Reclamation and Enforcement conclude that VER has not been demonstrated in this instance.

Cordially,

/S/

Tom FitzGerald
Director

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