EPA ‘Guidance’ on Coal Permits Slapped Down

(CN) - The Environmental Protection Agency overstepped its statutory authority in issuing a "Final Guidance" which all but ordered its regional offices to reject discharge permits for coal mining projects, a federal judge ruled.

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Under the Surface Mining Control and Reclamation Act, the Department of the Interior can delegate its authority to issue permits for discharging water from mining projects to state agencies.

The act provides a limited role for the EPA in reviewing state permitting programs for compliance with water quality standards in the Clean Water Act, before they are approved by the Secretary of the Interior. Once approved the state programs take on all permit issuing authority related to coal mining discharges with the Interior Department acting in an oversight capacity.

In 2010 and 2011 the EPA released an interim and then final guidance memo to its field offices suggesting that applications for permits for water discharges that did not include conductivity tests to measure the salinity of the discharge, and of the water into which the discharge would flow, should be denied.

The result, said the National Mining Association which challenged the EPA's guidance memo, was a virtual moratorium on coal mining permits and the agency's usurpation of the Secretary of the Interior's and the states' permitting authority under the act.

District Court Judge Reggie Walton agreed. Using the acronym for the act Walton said, "The SMCRA grants to the EPA only the ability to comment on and provide its written concurrence prior to the Secretary's approval of a state SMCRA permitting program. In other words, once the EPA has given its assent to approve a state SMCRA permitting program, the SMCRA affords it no further authority in the oversight or administration of the SMCRA regime."

The EPA attempted to end run this argument claiming that the Final Guidance memorandum contained mere recommendations and suggestions for best practices that should be employed by state permitting agencies.

During oral arguments the attorney representing the four Appalachian states that, along with the NMA, challenged the EPA's action skewered this interpretation by asking rhetorically "When EPA Headquarters explains to its subordinate regional offices that they 'should' do something, can any region actually feel free not to comply?

The EPA also argued that its guidance documents do not have the effect of law, or regulation and therefore are not final agency actions putting them beyond the review of federal courts.

Judge Walton said the guidance fit the two prong test for determining if an agency's action is final set out by the Supreme Court in Bennett v. Spear.

First the EPA admitted that the final guidance is the ultimate product of its decision making process with regard to discharge permits after a state program for issuing permits had already been reviewed by the EPA and approved by the Secretary of the Interior.

Second the guidance, though cloaked in disclaimers about its non-binding nature had the practical effect, Walton determined, of causing "EPA field offices and the state permitting authorities to believe that permits should and will be denied if its 'suggestions' and 'recommendations' are not satisfied."

While maintaining that its guidance was nonbinding the EPA also argued that it had the authority under the Clean Water Act to review the state's draft permits for compliance with water quality standards under the CWA.

Under that authority the EPA wanted the states' to conduct an analysis to determine if the discharge from specific surface mining projects had the "reasonable potential" to violate the states' own water quality standards, before issuing a permit.

The states countered that nothing in the CWA or its implementing regulations gave the EPA such authority and that when writing the SMCRA Congress specifically limited the EPA's authority.

Judge Walton agreed the SMCRA "unambiguously limits the EPA's authority" to comment and concurrence on state plans before the secretary of the Interior delegates permitting authority.

He also agreed that the EPA's actions were not justified by the CWA or it own regulations.

"As written, the regulation does not mandate when the state permitting authority must conduct its analysis of the discharge's impact on the water quality standard," Walton said.

Walton found that the fact that the regulations were written in both present and future tense "belies the defendants assertion that the CWA ... require[s] a pre-issuance reasonable potential analysis."

In the final guidance the EPA presumed that all discharges from coal mining operations would be likely to violate state water standards and that conductivity tests to determine salinity would be instructive- hence the virtual moratorium on permit approvals.

Judge Walton said "by presuming anything with regard to the reasonable potential analysis the EPA has effectively removed the determination from the state authority."

And there can be no question that a plain reading of the regulation leaves that determination, and the decision as to when it must be made, solely to state permitting authorities," Walton said.

While the EPA was free to change the regulations through the normal rulemaking process to require a reasonable potential analysis before state's issue a permit, until it did so the "recommendation" in the final guidance had no support in the Clean Water Act Walton concluded.

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