Apparently contradictory actions by federal regulators during the week of March 23 have created confusion within the mining community about whether critical permits under Section 404 of the Clean Water Act can be obtained, particularly in a timely fashion, for new and ongoing mining operations in Appalachian states. On March 23, Regions III or IV of the United States Environmental Protection Agency (USEPA) sent three separate letters to the United States Army Corps of Engineers (Army Corps) offering numerous criticisms of pending applications for three permits under § 404 of the Clean Water Act (§ 404 Permits) and recommended the denial of two of the applications. On March 25, the Louisville District of the Army Corps reinstated a § 404 Permit for a mining operation of comparable size to the three referenced in USEPA’s letters. This particular permit was previously challenged by a citizens' group on a legal theory recently rejected by the Fourth Circuit in Ohio Valley Environmental Coalition v. United States Army Corps of Engineers on February 13, 2009, and it remains to be seen whether the citizens' groups will renew application.

USEPA’s clearly coordinated actions on March 23 appear to signify a shift in USEPA’s approach to the issuance of nationwide permits for coal-mining activities in Appalachian states. In particular, many of the EPA’s criticisms in these letters tracked the arguments made by citizens' groups in a recent appeal to the Fourth Circuit, which were rejected by the appeals court. The permits in question were to authorize the construction of various fills, impoundments, sediment control ponds, and temporary stream crossings. Although two of the letters specifically referenced mountaintop mining removal methods of coal mining; the other mentioned surface mining in general. Because of the topography in West Virginia, however, most forms of mining, whether surface or underground — use similar structures in analogous locations, although the sizes will vary.

USEPA’s letters suggest that two of the proposed projects will not meet the criteria for § 404 Permits because of possible downstream impacts. Specifically, USEPA asserts that the mining activities may degrade the downstream portions of the affected watersheds based on a new study recently completed by USEPA. Likewise, at two of the sites, USEPA criticized the scope of the environmental review and suggested that a broader review of impacts, including on the forest resources in the area, need to be considered in the context of the National Environmental Policy Act (NEPA).

That position would seem to signify USEPA’s opposition to at least one aspect of the recent Fourth Circuit ruling. In that case, the court ruled that the impacts review under NEPA can be limited to the permitted activity (i.e., the placement of fill into navigable water) because the review for the mining permit considered these broader impacts. Whether USEPA will formally take this position in litigation remains to be seen.

Also worthy of note is USEPA’s perplexingly inconsistent views about the water-dependent nature of the mining activities in question. This point is critical, as “alternatives are presumed to be available...that do not involve the use of the aquatic ecosystem” for non-water dependent activities unless clearly demonstrated otherwise by the applicant. As only the least damaging practicable alternative can be authorized to proceed, this finding places a considerable burden on the permit applicant. USEPA’s long-standing position has been that extracting minerals from beneath regulated areas was a water-dependent activity. While two of the letters refer to the permits as water-dependent, one makes it clear that the activities are not to be considered water dependent. Because the nature of the activities in question appears to be the same at all three proposed mining sites, USEPA’s isolated finding in connection with one mining permit is hard to understand.

What USEPA’s letters mean on a going-forward basis remains to be seen. These letters generated significant concerns that USEPA had issued a moratorium on the issuance of § 404 Permits for mining activities in the future. USEPA issued a statement strongly denying any such moratorium. For now, it appears at a minimum, that further issuance of § 404 Permits for mining activities will be delayed.

These developments were then followed on March 25 by the reinstatement of a § 404 Permit for a surface mine in Kentucky by the Louisville District of the Army Corps. This particular permit for the Thunder Ridge mine had been voluntarily suspended by the Army Corps in connection with litigation initiated by citizens' groups. The scope and scale of the mining activities associated with Thunder Ridge are on par with those at issue in the three letters from USEPA. For now, it is not clear whether this action signifies a disagreement by the Army Corps with USEPA’s positions or whether the citizens’ groups that previously opposed this permit will renew their challenges.

For more information, please contact Vinson & Elkins lawyers Casey Hopkins or Sharon Mattox. To learn more about V&E’s Environmental Law practice, visit our website.