1. Legislative / Regulatory Update Jason D. Bostic West Virginia Coal Association March 30, 2010

2. Introduction Regulatory Review (its been a tough year) Regulatory Review (its been a tough year) -New federal initiatives -OSM-EPA Spruce Veto Action Spruce Veto Action Legislative Review Legislative Review Progress (?) Progress (?)

3. New Federal Initiatives: OSM Stream Buffer Zone Rule Stream Buffer Zone Rule -Re-examine the 2008 Rule -EIS(?)-AOC -Material damage Inspection and Oversight Inspection and Oversight -Independent (and more) inspections -Less technical support and technical transfer activities Oversight of State-Issued Permits Oversight of State-Issued Permits -Use the TDN process to correct state permits Independent report of mine-specific factors to OSM Independent report of mine-specific factors to OSM Think MSHA and WV OMHS&T Think MSHA and WV OMHS&T

4. EPA Comments on Section 404 permits Comments on Section 404 permits Review and comment on Section 402 permits Review and comment on Section 402 permits Waste treatment exclusion Waste treatment exclusion Mitigation Mitigation Various categories of 404 permits Various categories of 404 permits -original list -ECP list -normal submissions Ecological assessment of surface mining (think EIS) Ecological assessment of surface mining (think EIS) Two permits issued (heavily conditioned) Two permits issued (heavily conditioned)

5. EPA continued… Using Section 404 process as ad-hoc water quality standards program: Using Section 404 process as ad-hoc water quality standards program: Coal mining causes significant degradation because the benthic shift observed below discharges (of any type) constitutes a violation of West Virginias narrative water quality standards

6. Narrative Standard

7. EPA vs. West Virginia

8. EPA vs. Corps

9. Cold War EPA: Violation of narrative standards EPA: Violation of narrative standards WV DEP: benthic shift alone NOT a violation WV DEP: benthic shift alone NOT a violation Corps: Water quality issues addressed by WV DEP through Section 402 permit and Section 401 certification process Corps: Water quality issues addressed by WV DEP through Section 402 permit and Section 401 certification process =Stalemate =Stalemate

10. EPA Continues to Move Ecological assessment expanded– consideration of Regional Advisory Criteria for conductivity Ecological assessment expanded– consideration of Regional Advisory Criteria for conductivity Advisory criteria necessary to allow EPA to interpret STATE narrative standards

11. Permitting Situation Three section 404 permits issued since new day of federal involvement Three section 404 permits issued since new day of federal involvement 2/3 heavily conditioned-- compliance with un- promulgated in-stream threshold of conductivity… further development of the operation is conditioned on meeting this (illegal) threshold 2/3 heavily conditioned-- compliance with un- promulgated in-stream threshold of conductivity… further development of the operation is conditioned on meeting this (illegal) threshold Two veto proceedings– Threat in Kentucky and initiation of process in West Virginia Two veto proceedings– Threat in Kentucky and initiation of process in West Virginia

12. Observations… Objections know no bounds Objections know no bounds -NOT about Central Appalachian surface mining -NOT about the size or type (MTM) of mining operation -NOT about valley fills -NOT about a treatment solution -Cannot reduce, restrict or mitigate your way out of this -IT IS ABOUT the proper interpretation and implementation of federal and state water laws and standards

13. Recap: EPA & Section 404 Permitting EPA: Permits will cause or contribute to violation of West Virginia waters EPA: Permits will cause or contribute to violation of West Virginia waters WV DEP: NO, thats not the intended scope or purpose of the WQStds WV DEP: NO, thats not the intended scope or purpose of the WQStds Corps- defers to the state on water issues Corps- defers to the state on water issues

14. Spruce Mine Veto Action Full EIS conducted Full EIS conducted 10 years of review 10 years of review Permit issued in 2007 Permit issued in 2007 Work on permit started Work on permit started EPA starts the process EPA starts the process Ask Corps to suspend Ask Corps to suspend Corps collects information and says NO Corps collects information and says NO EPA issues press release on Friday EPA issues press release on Friday

15. Spruce Veto Action… Only 12 404(c) actions since 1972 Only 12 404(c) actions since 1972 Never used against an already issued and operating permit Never used against an already issued and operating permit EPA signed off on the Spruce permit in 2007 EPA signed off on the Spruce permit in 2007 Tonnage, operational / disturbed area reduced Tonnage, operational / disturbed area reduced

16. Spruce Veto Action…

17. Legislative Report: 2010 Regular Session 3,370 bills introduced; 219 completed Legislative action 3,370 bills introduced; 219 completed Legislative action Quiet session Quiet session -no rule packages -everybody wanted to help -House / Senate held hearings on permitting situation

18. Legislative Details… passed SB 496– WV DEP Advisory Council SB 496– WV DEP Advisory Council SB 507- Tax credit for the deployment of innovative mine safety technology SB 507- Tax credit for the deployment of innovative mine safety technology SB 518- New coal-related responsibilities for WV DOE SB 518- New coal-related responsibilities for WV DOE HCR 50- Study of tax and fee burden on coal industry HCR 50- Study of tax and fee burden on coal industry SCR 9- Opposes national cap & trade legislation SCR 9- Opposes national cap & trade legislation

19. Legislative Details… FAILED HB 4001- Limits for TDS/ conductivity at 500; schedule, reason and amount of water withdrawals, disclosure of oil & gas discharge water constituents and amounts HB 4001- Limits for TDS/ conductivity at 500; schedule, reason and amount of water withdrawals, disclosure of oil & gas discharge water constituents and amounts SB 211- State Section 404-like dredge and fill regulatory program SB 211- State Section 404-like dredge and fill regulatory program HB 4457 (amended) relating to access to cemeteries… originally coal only… increase buffer zone, required full and free access to sites HB 4457 (amended) relating to access to cemeteries… originally coal only… increase buffer zone, required full and free access to sites And… bans on coal slurry injection, coal impoundment construction, etc. And… bans on coal slurry injection, coal impoundment construction, etc.

20. Senate Concurrent Resolution 61 EPA Not to Veto / Revoke the Spruce Mine Permit and… EPA Not to Veto / Revoke the Spruce Mine Permit and…

21. House Concurrent Resolution 111

24. Summary Interpretation and implementation of narrative standards is the job of the Legislature and WV DEP Interpretation and implementation of narrative standards is the job of the Legislature and WV DEP Any interpretation of those standards must comply with the Legislatures will and intent (reasonable standards of purity to protect environment and promote development) Any interpretation of those standards must comply with the Legislatures will and intent (reasonable standards of purity to protect environment and promote development) WVWPCA was not and does not afford special categories of protection to specific species of bugs BUT DOES seek to protect the stream and aquatic life as a whole WVWPCA was not and does not afford special categories of protection to specific species of bugs BUT DOES seek to protect the stream and aquatic life as a whole

25. Progress (?) Everyone struggling for a solution Everyone struggling for a solution Governor, Congressional Delegation, Legislature Governor, Congressional Delegation, Legislature Its all about interpretation and implementation of narrative standards Its all about interpretation and implementation of narrative standards

26. Questions ???