Prove Mining Assurances Need EPA Boost, States Say

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By Brian Dabbs

Aug. 17 — The Environmental Protection Agency continues to fall far short in placating opposition to a new Superfund financial assurance rule for hardrock mining, according to interviews and comments released to Bloomberg BNA.

Some state stakeholders, in fact, strongly contest the need for any new federal assurance regulations.

State regulations are proving sufficient to cover hardrock mining risk, argued comments made to the EPA. Further, the agency's unwillingness to disclose substance indicators for the new rule is leading to frustration and confusion among some with the Interstate Mining Compact Commission, the Western Governors' Association and other state representatives, those groups said in comments to the agency and in interviews.

The opportunity for state stakeholders to comment to the EPA, which wrapped up on Aug. 17, complies with federalism Executive Order 13132.

States and the mining industry fear the EPA regulations will duplicate or preempt existing state assurance rules, they said in comments.

Hardrock refers to minerals that contain gold, silver, iron, copper, zinc, nickel, tin and lead, as opposed to, for instance, coal.

Proposal Deadline Looms

The U.S. Court of Appeals for the District of Columbia in early 2016 backed an agreement to force the EPA to release a new hardrock mining assurance rule by Dec. 1 ( In re Idaho Conservation League, D.C. Cir., No. 14-cv-01149, 1/29/16 ).

The EPA agreed to begin the rulemaking process, which will fall under the Comprehensive Environmental Response, Compensation and Liability Act, more commonly known as Superfund, by Dec. 1, with notice of final action by Dec. 1, 2017.

The Superfund law, enacted in 1980, gave the EPA the go-ahead to move forward with financial assurance regulations for different industry sectors, but the agency never put that authority to use.

This stage of the regulatory process does not go through the Federal Register, and the comments are not publicly available. Bloomberg BNA obtained the comments directly from stakeholders.

EPA's Office of Land and Emergency Management didn't respond to requests for comment. Bloomberg BNA asked the agency for responses more than three full business days in advance of publication.

Sufficient State Coverage?

Financial assurances regulations aim to lock in place guarantees that entities have put aside money or have access to money to cover operational risk.

Many U.S. states, particularly those in the West, have long implemented assurance regulations for the hardrock industry.

States have honed regulatory regimes in recent years, improving their ability to calculate appropriate bond amounts, ensuring reclamation and safeguarding environmental and public health, the Interstate Mining Compact Commission said in comments.

“The states have also developed the staff and expertise necessary to make informed predictions of how the real value of financial assurance may change over the life of the mine, including post-closure,” the comments said. “They have the authority to make adjustments to financial assurance requirements when necessary.”

The Environmental Council of States (ECOS) submitted comments with roughly identical language.

The compact commission, which released far more thorough comments than ECOS, pointed to Nevada's bond calculation framework and hazardous release response mechanisms, Utah's deleterious material disposal rules and South Dakota's spill bond rules as examples of valuable regulations already in place.

Conservationist Rebuttal

Meanwhile, environmental groups such as Earthworks contest the adequacy of state rules, pointing to a $20 billion to $54 billion EPA estimate for the current backlog of Superfund remediation of hardrock mines.

Current assurance regulations are sorely underestimated, and EPA assurance rules are necessary to prevent taxpayer remediation bailout through the agency's Superfund program, Earthworks official Bonnie Gestring told Bloomberg BNA in an interview.

“The regulations are required to be complementary; they're not supposed to be duplicative or supersede the regulations that either state or other federal agencies might hold,” said Gestring, referring to similar Bureau of Land Management and Forest Service rules. “We’ve had decades of federal agencies underestimate what these costs are and the public is left with costs of cleanup mine after mine after mine. EPA deserves a seat at the table because they inherit these sites when other agencies get it wrong.”

The EPA adds contamination sites, including hardrock mines, to its Superfund National Priorities List once conditions reach a certain severity threshold.

Gestring pointed to a Montana Department of Environment Quality June 2016 bid to force Atna Resources Inc. and affiliates to pay more than $6 million to remediate water contamination at the state's Kendall mine due to bond insufficiency.

Apples and Oranges?

State and industry representatives countered, however, that the EPA rules wouldn't address that undisputed backlog.

“There is certainly evidence that our opponents are deliberately using this legacy issue as a red herring to advocate for rules that are redundant and duplicative today,” Luke Popovich, spokesman for the National Mining Association, told Bloomberg BNA in an interview. “We're mixing, therefore, sort of apples and oranges if you will. What we've been at pains to show, and what our opponents have equally been at pains to obscure, is the fact that we're not operating under the same conditions that created those problems.”

Katie Sweeney, National Mining Association general counsel, told Bloomberg BNA the backlog is due, at least partially, to mine operations that predate modern regulations, some of which are hundreds of years old.

Process Qualms

Regardless of these widely divergent views, industry advocates knocked the EPA for refusing to disclose more information about the proposal.

“The agency has only shared vague conceptual information and sample scenarios that do not necessarily reflect conditions and characteristics of actual mining operations with the various states,” the Interstate Mining Compact Commission commented. “Without having detailed information about the draft rule and model, we can only comment on what we ‘think' EPA intends to include, and it is impossible to understand and comment on the relationship between the draft rule and existing state programs.”

That organization called on the EPA to release a rule draft along with an assurance calculation model. The comments also pushed the agency to delay the rulemaking.

“These are significant issues and concerns here, and EPA doesn't seem to listen very well,” Stephen Smithson, a lawyer with Snell and Wilmer who represents mining companies, told Bloomberg BNA in an interview. “EPA will meet with folks, but it doesn’t seem particularly interested in the feedback it's getting.”

The Western Governors' Association comments echoed those concerns.

“EPA has not offered to engage in substantive consultation with Western Governors since late January,” said the comments, authored by Montana Gov. Steve Bullock (D) and South Dakota Gov. Dennis Daugaard (R). “The agency has recently chosen to engage with state partners on a perfunctory basis. EPA has not, however, engaged in substantive discussion of the pending proposed rule.”

To contact the reporter on this story: Brian Dabbs in Washington at

To contact the editor responsible for this story: Larry Pearl at

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