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

Kentucky Heartwood and KRC comment on proposed Consent Decree affecting Daniel Boone National Forest  Posted: July 16, 2012
July 16, 2012

Assistant Attorney General
Environment and Natural Resources Division
Post Office Box 7611
U.S. Department of Justice
Washington, DC 20044-7611

By email only pubcomment-ees.enrd@usdoj.gov

Re: United States v. The Stearns Co., Ltd., and
Stearns Enterprises, Inc., Case No. 12-cv-191-JMH
D.J. Ref. 90-11-2-10012

To whom it may concern:

This letter is tendered concerning the proposed Consent Decree in the above-captioned case, in response to the solicitation of public comment announced in the June 19, 2012 Federal Register, 77 F.R. 26575. This letter is submitted on behalf of the Board and membership of Kentucky Heartwood, a not-for-profit organization and community of individuals dedicated to the health and well-being of Kentucky's native forests, and the Kentucky Resources Council, a nonprofit environmental advocacy organization providing legal and technical assistance to low-income individuals, community groups, and local governments on a range of environmental and energy-related issues. The membership of both organizations include numerous individuals and families who use and enjoy the Daniel Boone National Forest.

The Consent Decree describes the numerous adverse impacts that prior mining in the Rock Creek Watershed have caused on the quality of the local environment, including acid mine drainage, landslides, and contamination of water resources from metals leached from mine wastes. Commenters support the proposed Consent Decree, but are concerned with two provisions in the Decree relating to past and future mining on lands that will be transferred by the Defendants under the decree.

The Definition of “Real Property Interests”

The Consent Decree proposes that the $31,800,000 judgment for past and future response costs be satisfied, in part, through the transfer of all of the Defendants’ “real property interests,” (with certain enumerated exceptions). The term is defined to include “any and all rights, title, and interests, including fee title parcels, easements, improvements, and appurtenant rights, if any, of either Defendant located in Wayne and McCreary Counties, Kentucky,
including all surface and Mineral Rights.” In turn, “mineral rights” are defined to include “any and all rights, title, and interests in the subsurface estate including, but not limited to, coal, oil, gas, stone, clay, sand, and any other similar materials, as well as any and all rights necessary or appurtenant to the exploration, development, and transportation of minerals and mineral
materials.”

Surface coal mining operations, other than underground mining, are prohibited in the Daniel Boone National Forest pursuant to 30 U.S.C. 1272(e)(2), which provides in part that

"After August 3, 1977, and subject to valid existing rights no surface coal mining operations except those which exist on August 3, 1977, shall be permitted—

* * *

(2) on any Federal lands within the boundaries of any national forest: Provided, however, That surface coal mining operations may be permitted on such lands if the Secretary finds that there are no significant recreational, timber, economic, or other values which may be incompatible with such surface mining operations and—

(A) surface operations and impacts are incident to an underground coal mine; …."

In order to assure that the conveyance of the real property interests terminates any future conflict over the development of mineral rights held by the Defendants, Commenters recommend that the definition of “real property interests” be amended, or that a separate clause be incorporated into the Decree, clarifying that the Defendants are transferring “any and all claims of valid existing rights with respect to such mineral interests.”

Clarifying Decree Language Regarding Future Mining On Transferred Property

The text of the Consent Decree, and of the public notice regarding the decree, is of concern to the Commenters inasmuch as it suggests that the past and future response costs may be paid for out of the value of the mineral interests conveyed to the Forest Service.

Specifically, Section VI Para. 5 states in part that:

"Each Defendant hereby agrees to entry of a judgment against itself and in favor of the United States in the amount of thirty one million eight hundred thousand dollars ($31,800,000) for response costs incurred or to be incurred by the United States under CERCLA at the Site. Although the United States may file this judgment as and where necessary to preserve secured creditor status in favor of the United States, Defendants acknowledge that such filing is not a condition precedent to the United States’ secured creditor status. Such judgment shall be satisfied solely through:

a. The United States’ recovery of insurance proceeds from any Insurance Policies;

b. Defendants’ transfer of the Real Property Interests pursuant to Paragraph 7 (Transfer of Real Property Interests); and

c. The Defendants’ withdrawal of its SMCRA Compatibility Determination Application."

The concern with this language is the implication that the funds needed for compensation for past and future response costs for the various sites will be generated from the Real Property Interests transferred by the Defendants, which include mineral interests under forest lands. The transfer of those interests certainly have intrinsic value to the Forest Service, in terms of ending the possibility of litigation over any reserved or outstanding rights claims, VER claims, and the like, but the transfer of the lands does not generate direct funds for payment of response costs.

Commenters request that clarification that the language in the Consent Decree does not commit the Forest Service to leasing or otherwise developing the minerals beneath Forest Service properties that are transferred as Real Property Interests under the decree, and does not commit the Bureau of Land Management to leasing or otherwise developing minerals under private lands, and that no leasing or other mineral development activity will be permitted on such lands.

Thank you in advance for your consideration of these comments.

Cordially,

Jim Scheff
Director
Kentucky Heartwood

Tom FitzGerald
Director
Kentucky Resources Council, Inc.

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