On Friday, December 1, 2017, the U.S. Environmental Protection Agency (EPA) decided NOT to finalize rules to require hard rock mines and mineral processing operations to provide financial assurance to fund future cleanups of their properties under the federal Superfund law (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)). A link to EPA's action can be found here.
What a Difference a Year Can Make: Brief History of the Rule from Proposal to EPA's Decision Not to Finalize
Exactly a year before, EPA had proposed such rules in order to implement section 108(b) of CERCLA, rules which were estimated by EPA to cost the mining and mineral processing industry as much as $171 million per year. EPA's proposed rule would have affected mines for minerals from asbestos to zirconium, but not sand and gravel, coal mines, or oil or gas wells. (There are a number of hard rock mines in Virginia and Maryland, including such minerals as vermiculite, limestone, and feldspar.)
EPA's action a year ago in proposing the rule, and then again on December 1, 2017, in determining that the rule was unwarranted, both were taken pursuant to a court-ordered schedule worked out in environmental groups' challenges to EPA. EPA's decision was long overdue: section 108(b) had a 1985 deadline for EPA action on such rules.
EPA's proposal reportedly attracted over 11,000 comments by the extended deadline of July 11, 2017, though more than 10,000 of these were the result of mass letter or e-mail campaigns, most of the messages using identical text.
The mining industry will view EPA's decision with great relief. The likely additional costs seemed especially daunting to miners given the low commodity prices over the past few years.
Several Factors Supported EPA's Course Change
According to EPA, several factors support the course change. These included much more rigorous state reclamation and bonding programs than had been true in 1980 when Superfund was enacted. EPA also noted similar improvements in Forest Service and Bureau of Land Management programs for mines on their lands. Most hard rock mines in the western United States are on such federal lands.
In EPA's view, the measures required by these other reclamation and bonding programs – steps such as capping mine wastes and treating polluted water from mine workings – already address potential hazardous substance releases, the objective of Superfund cleanups.
EPA stated that its original proposal had not adequately distinguished legacy site problems, some of which began mining before the Civil War, from problems arising with currently operating mines and mineral processing facilities. Once those issues were separated, the financial risk of unfunded Superfund cleanups for operating mines was estimated to be much less than the estimated cost of such financial assurance to the industry. EPA also noted serious questions about the cost and availability of the kind of financial instruments EPA had proposed to require.
EPA's Decision Will Likely Be Challenged in Court
Environmental groups reportedly will challenge EPA's decision not to proceed with the proposed regulations, a challenge likely to be filed in the U.S. Court of Appeals for the D.C. Circuit, which is the exclusive venue to litigate challenges to EPA rules under the Superfund law. This challenge may face an uphill fight, in part because some of the most negative comments about EPA's proposal came from affected state mining regulators, most of them in the western United States, as well as from several other federal agencies responsible for such programs.
These governmental comments strongly defended the financial and environmental integrity of those reclamation programs, raised serious legal questions about the effect of federal preemption of EPA's proposed rule on these state reclamation programs, and complained bitterly that EPA had failed to consult adequately with these knowledgeable agencies before EPA proposed the rules. These federalism and preemption concerns are often given greater weight by reviewing courts than the cost complaints of affected industries.
EPA's Course Change May Signal the Fate of Financial Assurance Requirements in Other Large Industry Sectors: Chemicals, Petroleum, Coal, Electric Power
EPA remains under a court-ordered schedule to make financial assurance determinations for three other large sectors of the economy: the chemical industry; the electric power industry; and the oil and gas industry. The issues in those industry sectors included duplication and overlap with other federal financial assurance mechanisms, including those under the Resource Conservation and Recovery Act (RCRA), and the Oil Pollution Act, as well as similar state law requirements. Given the importance of any decision on the mining financial assurance, it seems likely that parties from those industries will also try to participate in the court proceedings about mines' financial assurance obligations under the Superfund law.
Conclusion
Ultimately, the D.C. Circuit will decide whose financial assurance is blessed – EPA's proposed approach from last year or the current requirements imposed by state law and other federal programs.
As this issue evolves in the coming weeks and months, please check back to this blog for any updates.
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