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September 2002, VOL. 20, NO. 3

Registration Begins for IMCC Fall Meeting in Annapolis

The 2002 Fall Meeting of the Interstate Mining Compact Commission (IMCC) is scheduled to be held November 19-20 at the Historic Inns of Annapolis in Annapolis, Maryland.

IMCC’s standing committees will meet all day on Tuesday, November 19. A reception is scheduled for that evening. On Wednesday, November 20, the Executive Commission Business Meeting will take place.

A meeting announcement and registration form has recently been sent to all IMCC member states. A registration form is also included in this newsletter. Questions about the meeting should be directed to: Beth A. Botsis, phone: 703.709.8654, or E-Mail: bbotsis@imcc.isa.us.

IMCC Files Amicus Brief in Appeal of Judge Haden Decision

The Interstate Mining Compact Commission (IMCC) recently filed an amicus curiae brief in the appeal of Judge Charles Haden’s decision in Kentuckians for the Commonwealth v. Rivenburgh, et. al.

On May 8, 2002, Judge Haden of the U.S. District Court for the Southern District of West Virginia issued a decision in the above-referenced matter which was filed against various officials with the U.S. Army Corps of Engineers (COE) challenging their decision granting coverage under a general “nationwide” (Clean Water Act) Section 404 permit for 27 valley fills associated with a proposed mountaintop mining operation in Martin County, Kentucky. This decision by Judge Haden follows on the heels of his earlier ruling (October 29, 1999) which was based on nearly identical grounds. That decision, which was appealed to the U.S. 4th Court of Appeals, was reversed primarily on jurisdictional grounds. However, many of the findings that serve as the basis of Judge Haden’s most recent decision were also raised in his 1999 decision and are now more “ripe” for decision because they are part of an actual permitting decision by the COE.

Judge Haden’s most recent decision has been appealed by both the federal government and the mining industry (Kentucky Coal Association) to the same U.S. Court of Appeals – the 4th Circuit in Richmond, Virginia. The parties requested a stay and clarification of Judge Haden’s May 8th decision pending appeal, given the extensive impacts of the decision for both mine permitting and regulatory interpretation and implementation. On June 17th, Judge Haden issued another decision, denying the stay and clarifying some parts of his May 8th Order.

In the amicus curiae brief, IMCC argues that Section 404 of the Clean Water Act, which authorizes issuance of “dredge and fill” permits, does not restrict the granting of permits for fills to those having only a “primary constructive purpose” – the new standard grafted onto the statue by the district court’s ruling below. IMCC argues that even if, arguably, Section 404 is ambiguous on this point, the district court erred in not deferring to the Corps’ and Environmental Protection Agency’s (EPA) interpretation of that textual ambiguity, pursuant to which (consistent with their long-standing administration of the statute) permits for the placement of fill material into the waters of the U.S. will continue to be reviewed under Section 404, while permits for the discharge of wastewater containing pollutants will continue to be regulated under Section 402's National Pollutant Discharge Elimination System.

IMCC’s brief also states that “Neither the provisions of SMCRA [Surface Mining Control and Reclamation Act of 1977], nor the regulations issued thereunder by OSM [Office of Surface Mining Reclamation and Enforcement], have any bearing on the interpretation of the meaning of “fill” under Section 404 of the Clean Water Act. SMCRA’s provisions regulating the placement of excess spoil disposal do not limit that activity to projects involving a constructive purpose. In addition, the disposal of excess spoil in a fill which is permitted under Clean Water Act Section 404 can be undertaken in a manner that is entirely consistent with OSM’s buffer zone regulation issued under SMCRA.”

For further information regarding the IMCC brief, contact: Gregory E. Conrad, phone: 703.709.8654, or E-Mail: gconrad@imcc.isa.us.

State/OSM Performance Measurement Workshops Held

As a part of implementing President Bush’s management agenda, the Department of Interior is revising its Strategic Plan under the Government Performance and Results Act. A key part of that revision is identifying appropriate performance measures. Over the past several years, the two primary measures for the mine regulatory program have been the percent of mine sites free of off-site impacts and the acres of mined land achieving bond release. The primary measure for the abandoned mine lands (AML) program has been acres reclaimed.

The Office of Surface Mining (OSM) in the Department of the Interior (DOI) is looking to define more meaningful and effective performance measures to the regulatory and AML programs as the agency revises its strategic plan. Among the elements being considered by OSM are: First, what is the program goal; second, what are the appropriate outcome (end result) measures for evaluating success toward achieving the goal; third, what are the strategies to be used over the next 3-5 years in trying to achieve the goal; fourth, what are the intermediate goals for measuring success of the strategies; fifth, what are the outputs needed to implement the strategy; and finally, what resources (money and people) are needed to accomplish the desired outputs.

Against this background, OSM recently invited a number of state representatives to participate in two facilitated workshops. The two workshops focused on performance objectives for the Title V and Title IV programs respectively. The workshops were intended to provide OSM an opportunity to work with the states in developing clear, measurable objectives with outcome measures that will support efforts by OSM to increase regulatory grant funding for the two programs.

For further information, contact: Gregory E. Conrad, phone: 703.709.8654, or E-Mail: gconrad@imcc.isa.us.

IMCC Publishes 2001 Annual Report

The Interstate Mining Compact Commission (IMCC) recently published its 2001 Annual Report. The report provides overviews of committee and commission activities for the 2001 calendar year, along with the Fiscal Year 2001 financial reports. Copies of the report were sent to all IMCC member states this summer. Additional copies are available by contacting: Beth A. Botsis, phone: 703.709.8654, or E-Mail: bbotsis@imcc.isa.us.

IMCC Holds Bonding Meeting

The Environmental Affairs Committee of the Interstate Mining Compact Commission (IMCC) recently met to discuss bonding and financial assurance requirements for both the coal and noncoal sectors, especially in light of the current economic climate. Guests from the Office of Surface Mining (OSM), the surety and insurance industries, and the mining industry were invited to share their unique perspectives on the current state of the bonding situation.

Robert Duke of the Surety Association of America noted that the issue of bond availability is tied to underwriting policies and how risk is determined. The financial and loss conditions influenced by events over the last two years have resulted in a tightening of risk characteristics. Mr. Duke identified the major risk factors in the mining industry to be: concerns about the duration of bonds (which range anywhere from 5-40 years); the amount of bond “called” if forfeiture occurs (which tends to be the full amount); and the overall regulatory climate related to mining. All of these concerns taken together have resulted in a “correction” in underwriting policy, thus impacting bond availability. In addition, Mr. Duke noted that the re-insurance market, which is a critical part of the overall reclamation bonding scenario, has been significantly impacted by the events of 9/11, since these companies tend to be subsidiaries of larger insurance company parents. Mr. Duke noted that the bonding and insurance markets tend to go through phases of loss and profitability. He fully expects the markets to recover within the next few years. In the meantime, he emphasized the importance of the mining industry and the states working with the surety industry to effectively understand and minimize risk factors in an effort to improve bond capacity.

Several key insights shared by others in attendance were:
  • In an effort to spread the risk associated with reclamation bonding, it might be well to consider the potential of several sureties sharing the risk on the same phase of bonding (where phased bonding is permissible), or to have separate sureties on each phase of the bond – or potentially only on the first two phases in an effort to eliminate the risk associated with the final, longer term phase.
  • A similar suggestion was to provide for an ascending fund to replace descending bond amounts and requirements in an effort to avoid the long “tails” of responsibility, which often discourage sureties from accepting bonds in the first place.
  • The major concerns of the surety industry can be summarized as follows: duration of bonds; bond release procedures and certainty of release; and the certainty of knowing what’s covered under the bond (i.e. unanticipated acid mind drainage treatment).
  • It is important for state regulatory authorities and the mining industry to work with the surety industry in terms of potential solutions for the current bonding environment. Among the solutions is the “claims side” of the business, where states can work with sureties to encourage more surety reclamation where forfeitures occur.
Several suggestions and potential approaches to address bonding challenges were put forth and discussed by the committee and guests.

As a result of the discussions, IMCC’s Environmental Affairs Committee members made several decisions: IMCC agreed to work with OSM pursuant to their Advance Notice of Proposed Rulemaking (ANPR) on bonding to pursue in greater detail IMCC’s suggested approaches for addressing the long-term bonding issues addressed during the meeting and in the ANPR. A small work group of state representatives was formed to work with OSM. IMCC also agreed to submit comments on OSM’s ANPR by the October 15, 2002 due date. Discussions at the meeting will serve as the basis for IMCC’s comments.

IMCC Co-Sponsoring IOGCC Conference

The Interstate Mining Compact Commission (IMCC) is co-sponsoring a conference being held by the Interstate Oil & Gas Compact Commission (IOGCC) on “Natural Gas from Coal Seams in The Northern Appalachian Basin.” The conference is intended to provide coal and gas industry leaders a forum to interact with state and federal agencies on issues related to the production and conservation of this valuable mineral resource. The conference is being held on September 24, 2002 from 8:30 a.m. to 4:00 p.m. at The Summit Conference Center, 129 Summers Street, in Charleston, West Virginia. A reception is scheduled for the evening of September 23 at the Governor’s Mansion. For more information, visit the IOGCC website: www.iogcc.state.ok.us. , or phone: 405.525.3556.
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