Section 404 Section 404 Permitting of Coal MinesPermitting of Coal MinesPermitting of Coal Mines Permitting of Coal Mines

Impacts on SupplyImpacts on Supplyp pp yp pp y

Management OverviewManagement OverviewManagement OverviewManagement OverviewThe image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again.

Regulatory Future of Coal Mining Regulatory Future of Coal Mining i b i R d fi d i thi b i R d fi d i this being Redefined in the is being Redefined in the

Central Appalachian RegionCentral Appalachian Regionpp gpp g

• Permitting of Valley Fills

• Mining is being FederalizedMining is being Federalized

BackgroundBackgroundBackgroundBackground

• Judicial Action since 2000Judicial Action since 2000– OVEC versus USACE

• Executive Action (EPA)– MOU June 11, 2009 – EPA Letter September 30, 2009– EPA Letter January 4, 2010– EPA Letter April 1, 2010p ,

Permitting of Surface MinesPermitting of Surface MinesPermitting of Surface MinesPermitting of Surface Mines

1. SMCRA Permit2. NPDES Permit 3 St t 401 WQ C tifi ti3. State 401 WQ Certification4. USACE Section 404 Permit4. USACE Section 404 Permit

USACE Section 404 PermitsUSACE Section 404 PermitsUSACE Section 404 PermitsUSACE Section 404 Permits

• Nationwide Permit 21 (NWP21)

• Individual Permit• Individual Permit

NWP 21 vs. Individual PermitNWP 21 vs. Individual PermitNWP 21 vs. Individual Permit NWP 21 vs. Individual Permit

• NWP 21• NWP 21– $15,000 - 25,000 – 3 to 9 months

• Individual Permit– $50,000-250,000– 12 to 24 months

History of Litigation History of Litigation 2000 t 20092000 t 20092000 to 20092000 to 2009

• 2004 Suspended NWP 21• 2004 Suspended NWP 21Overturned 2005

• 2005 MOU (OSM-ACE-EPA)2005 MOU (OSM ACE EPA)

• 2007 Rescinded PermitOverturned 2009Overturned 2009

Regulatory ProcessRegulatory ProcessRegulatory ProcessRegulatory Process

2005 MOU (OSM ACE EPA)2005 MOU (OSM-ACE-EPA)

• Establishes Joint SMCRA-404 Process

• Combined Decision Document (CDD)

• Allows USACE to issue NWP 21

Executive Action (EPA)Executive Action (EPA)Executive Action (EPA)Executive Action (EPA)

• MOU June 11, 2009 • EPA Letter September 30, 2009• EPA Letter January 4 2010• EPA Letter January 4, 2010 • EPA Letter April 1, 2010

MOU June 11, 2009MOU June 11, 2009MOU June 11, 2009MOU June 11, 2009

• Suspends NWP # 21• Suspends NWP # 21• Increases Regulatory Burden

– 404 (b) 1 Guidelines– Stream Buffer Zone RuleStream Buffer Zone Rule

• EPA push State WQ Standards• Broaden Scope 404 NEPA

EPA Letter EPA Letter S t b 30 2009S t b 30 2009September 30, 2009September 30, 2009

• List of 79 Permits• List of 79 Permits• “ECP Process”

–Avoidance & MinimizationW t Q lit–Water Quality

–Cumulative Impactsp–Mitigation

EPA Hobet Mining Letter EPA Hobet Mining Letter J 4 2010J 4 2010January 4, 2010January 4, 2010

• Reduced Stream Impacts by 50%• Reduced Stream Impacts by 50%• Stream Monitoring Plan

– Chemical – BenthicBenthic

• AMP for ConductivityB li D t & T d A l i– Baseline Data & Trend Analysis

– Exceedance & Additional “Mitigation”

EPAEPA -- March 26, 2010March 26, 2010EPA EPA March 26, 2010March 26, 2010

Logan Spruce No. 1 Mine (Logan, WV)Logan Spruce No. 1 Mine (Logan, WV)

• USACE (Hngtn) issued 404 permit in 2007( g ) p– Seven miles of HW streams impacted by Six VF– Env. Groups challenged permit in Fed District Court; Litigation is

pending• Oct 2009 – EPA informed USACE that proposed project

may result in unacceptable averse effects - 404(C) veto authority au o y

• EPA issue public notice of impact (60-day period, 6/1)• EPA can Prohibit, Restrict or Agree as Authorized

EPA Letter EPA Letter A il 1 2010A il 1 2010April 1, 2010April 1, 2010

Detailed Guidance to strengthen permit review for A l hi S f C l Mi i A ti itiAppalachian Surface Coal Mining Activities

• NPDES PermitsReasonable Potential Analysis• Reasonable Potential Analysis

• Numeric and Narrative WQ Standards • Anti-degradation Analysis

• 404 Permits P t Si ifi t D d ti• Prevent Significant Degradation

• Ensure WQ protection, effective monitoring• Assessment of Cumulative Impacts• Assess and mitigate stream function

401 St t C tifi ti E WQ t ti• 401 – State Certification – Ensure WQ protection• NEPA – Comprehensive Evaluation of Impacts – 1-mile of stream

loss likely to result in adverse impact (i.e. No FONSI)

How will this Affect How will this Affect C l S li & C t?C l S li & C t?Coal Supplies & Cost?Coal Supplies & Cost?

• Short Term Reduction in Supply• Short Term Reduction in Supply– Permitting Delays– Reduced Production

(OB Haul Distance)( )• Increased Cost

Additional Permitting Cost– Additional Permitting Cost– Additional Haul Cost

Factors Affecting Factors Affecting P d ti C tP d ti C tProduction CostProduction Cost

• Prorated Permitting Cost• Prorated Permitting Cost• Additional Monitoring CostAdditional Monitoring Cost• Additional “Mitigation” Cost• Additional OB Haul Cost

)200

t ($K

)

150

Cos

t

100

tting

NWP2150

erm

it

NWP21

Ephemeral Intermittent Perennial

2412 186 219 1530

Pe

0 2412 186 219 153

Permitting Time (Months)

Additional Permitting CostAdditional Permitting CostAdditional Permitting CostAdditional Permitting Cost

• $250 000 Permitting Cost• $250,000 Permitting Cost

• 10 MT Life of Permit

• $0 025 per ton Additional Cost• $0.025 per ton Additional Cost

Additional Water Quality Additional Water Quality M it i C tM it i C tMonitoring CostMonitoring Cost

• $100 000 Annual Monitoring• $100,000 Annual Monitoring

• 500 KT per Year

• $0 20 per ton Additional Cost• $0.20 per ton Additional Cost

Additional “Mitigation” CostAdditional “Mitigation” CostAdditional Mitigation CostAdditional Mitigation Cost

• Exceedance of Baseline Trend• Exceedance of Baseline Trend• In lieu Fee Payments y• Amount Unknown • Estimate Four $10K per Year• $0 08 per ton Additional Cost• $0.08 per ton Additional Cost

Additional Haul CostAdditional Haul CostAdditional Haul CostAdditional Haul CostThe Big UnknownThe Big Unknown

• Haul Cost Very Site Specific y p• Cost Range from $0.20 to $1.00

Y d Milper Yard-Mile• SLI uses “Guess-estimated ”SLI uses Guess estimated

Rate of $0.45 per Yard-Mile

Additional Cost per Ton per Mile

$10

p p

$10

st

$9.00

$5

ul C

os

$4.50

Hau

10 201510 2015

Ratio (yards/ton)

Factors Affecting Factors Affecting P d ti C tP d ti C tProduction CostProduction Cost

Bottom line:Bottom-line:Haul cost major the factorHaul cost major the factoraffecting per ton costaffecting per ton cost

Management StrategiesManagement StrategiesManagement StrategiesManagement Strategies

1 Long Range Planning1. Long Range Planning2. USACE Coordination3. Challenge USACE Jurisdiction4 Attractive Mitigation Packages4. Attractive Mitigation Packages5. Maintain WQ Standard6. Be Politically Active