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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

May 2012: 

Phosphate Mining: 

Oversight Has Strengthened, but Financial Assurances and Coordination 
Still Need Improvement: 

GAO-12-505: 

GAO Highlights: 

Highlights of GAO-12-505, a report to congressional requesters. 

Why GAO Did This Study: 

For over 100 years in the United States, phosphate has been mined on 
federal land primarily for use in fertilizer and herbicides. The 
Department of the Interior’s Bureau of Land Management (BLM) is 
responsible for leasing and overseeing such mines on federal land. In 
1996, selenium contamination from phosphate mines was discovered in 
Idaho, threatening the health of livestock and wildlife. Mines in the 
area are now being assessed for cleanup under the Environmental 
Protection Agency’s (EPA) Superfund program. Agencies may require mine 
operators to post financial assurances, which are usually in the form 
of a bond, to ensure they meet their leasing and cleanup obligations. 
GAO was asked to determine the (1) extent to which federal oversight 
for phosphate operations has changed since 1996; (2) actions federal 
agencies and mine operators have taken to address contamination, 
amounts spent to date, and estimated remaining costs; and (3) types 
and amounts of financial assurances in place for phosphate-mining 
operations. GAO reviewed agency data and documents, and interviewed 
key agency and mine operator officials. 

What GAO Found: 

Since 1996, federal agencies have taken several actions to strengthen 
their oversight of phosphate mining on federal land. For example, BLM 
now conducts more detailed environmental analysis when evaluating new 
mine plans; requires phosphate mine operators to provide more 
comprehensive plans for reclaiming mine sites (restoring the land to a 
stable condition that can support other uses); and requires the mine 
operators to provide financial assurances that are based on the full 
estimated cost of reclaiming mines, in contrast to BLM’s previous 
practice of calculating financial assurances based simply on the 
acreage associated with mines. However, gaps remain in agency policies 
and coordination that could limit the agencies’ efforts to address 
contamination from phosphate-mining operations. For example, BLM has 
not documented its new full-cost financial assurance practice in 
agency policy and therefore has limited assurance that it will be 
implemented consistently. BLM also has not fully coordinated with the 
Forest Service when establishing mine lease conditions and setting 
financial assurance amounts. Limited coordination is of particular 
concern because 16 phosphate leases in Idaho are scheduled for review 
and possible readjustment in the next 5 years, and once a lease is 
readjusted, its provisions are in effect for 20 years. 

Over the last 16 years, federal agencies and mine operators have 
primarily focused on assessing the extent of selenium contamination in 
Idaho and have conducted only limited remediation actions. The 
agencies have conducted or overseen high-level assessments of 
contamination at 16 of the 18 mines where federal agencies are 
overseeing mining operations or cleanup activities, and at several of 
these mines the agencies and mine operators are now conducting more 
detailed assessments, known as remedial investigations and feasibility 
studies. However, no final cleanup actions have been chosen at any of 
the sites, and according to officials, most sites will require years 
of additional investigative work before final cleanup actions are 
selected. Federal agencies reported that they have spent about $19 
million since 2001 to oversee these assessments and undertake a 
limited number of remediation actions, roughly half of which has been 
reimbursed by the mine operators under cleanup settlement agreements. 
Mine operators told GAO that they too have spent millions of dollars 
in additional assessment and remediation work but did not provide 
documentary evidence to support these claims. Agency officials told 
GAO that they have not developed estimates for the remaining cleanup 
costs because final cleanup remedies have not yet been identified. 
However, their informal estimates suggest that remaining cleanup costs 
may total hundreds of millions of dollars for the contamination from 
mining in Idaho. 

Federal agencies reported holding about $80 million in financial 
assurances for reclaiming phosphate mines in Idaho. Most of this 
amount-—over $66 million-—is associated with the two most recently 
approved phosphate mines. Agencies reported holding an additional 
$11.5 million in financial assurances to cover site assessment and 
limited cleanup activities under EPA’s Superfund program, but some of 
these are in the form of corporate guarantees, which the agencies have 
determined are riskier than other types of financial assurances. No 
financial assurances have been established to cover future cleanup 
costs because remaining cleanup actions have not yet been identified, 
according to agency officials. 

What GAO Recommends: 

Among other things, GAO recommends that BLM document its financial 
assurance practice in policy and consult with the Forest Service to 
better protect the federal government from cleanup costs. In 
commenting on a draft of this report, Interior, the Forest Service, 
and EPA generally agreed with GAO’s findings and recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-12-505]. For more 
information, contact Anu K. Mittal at (202) 512-3841 or mittala@gao.gov.

[End of section] 

Contents: 

Letter: 

Background: 

Agencies Have Provided More Rigorous Oversight of Phosphate Mining 
Since 1996, but Oversight Gaps Remain: 

Agencies and Mine Operators Have Focused on Assessing Contamination, 
Not Conducting Remediation, and Total Cleanup Costs Are Currently 
Unknown: 

Agencies Hold Millions of Dollars in Financial Assurances for Site 
Reclamation and Assessment, but Some Are in the Form of Potentially 
Risky Corporate Guarantees: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Information on 18 Phosphate Mines Overseen by Federal 
Agencies in Southeastern Idaho, and CERCLA Cleanup Expenditures: 

Appendix III: Comments from EPA: 

Appendix IV: Comments from the Department of Agriculture: 

Appendix V: Comments from the Department of the Interior: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Production Status and Presence of Selenium Contamination at 
Phosphate Mines in Southeastern Idaho: 

Table 2: CERCLA Activities at 16 Contaminated Mines, by Assessment 
Process: 

Table 3: Acres Disturbed, CERCLA Lead Agency, and Surface Land 
Ownership at 18 Phosphate Mines in Southeastern Idaho: 

Table 4: Assessment and Cleanup Expenditures at the 16 Contaminated 
Phosphate Mines in Southeastern Idaho, from Fiscal Years 2001 through 
2011: 

Figures: 

Figure 1: Map of the Western Phosphate Field: 

Figure 2: An Active Phosphate Mine in Southeastern Idaho: 

Figure 3: An Inactive Phosphate Mine in Southeastern Idaho with a 
Cross-Valley Fill: 

Figure 4: How Phosphate Mining Overburden Can Release Selenium: 

Figure 5: The CERCLA Non-Time Critical Removal Assessment and Cleanup 
Process: 

Figure 6: The CERCLA Remedial Action Process: 

Figure 7: Total Agency Expenditures for Overseeing Phosphate Mine 
Assessment and Remediation, and Percentage and Amounts Reimbursed by 
Mine Operators, 2001-2011: 

Figure 8: Amount and Composition of BLM-Held Reclamation Financial 
Assurances: 

Abbreviations: 

BIA: Bureau of Indian Affairs: 

BLM: Bureau of Land Management: 

CERCLA: Comprehensive Environmental Response, Compensation, and 
Liability Act: 

FWS: Fish and Wildlife Service: 

EIS: Environmental impact statement: 

EPA: Environmental Protection Agency: 

E.O.: Executive Order: 

IDEQ: Idaho Department of Environmental Quality: 

NEPA: National Environmental Policy Act: 

NPDES: National Pollution Discharge Elimination System: 

NPL: National Priorities List: 

TMDL: Total Maximum Daily Load: 

Corps: U.S. Army Corps of Engineers: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

May 4, 2012: 

The Honorable Barbara Boxer:
Chairman:
Committee on Environment and Public Works: 
United States Senate: 

The Honorable Edward J. Markey:
Ranking Member:
Committee on Natural Resources:
House of Representatives: 

Since the early 1900s, phosphate rock--the only economically viable 
source of phosphorus used to make detergents, herbicides, and 
fertilizer--has been mined on predominantly federal land in 
southeastern Idaho, which is part of the Western Phosphate Field. The 
Western Phosphate Field comprises about 86 million acres of land in 
the Rocky Mountains from Utah and Colorado stretching north into 
Idaho, Montana, and Wyoming. However, in 1996 selenium--a potentially 
toxic chemical that leached out of the waste rock taken from phosphate 
mines--was discovered in southeastern Idaho, and since then an 
estimated 600 head of livestock (including horses, cattle, and sheep) 
have died after ingesting plants or surface water containing high 
concentrations of selenium.[Footnote 1] As was common practice at 
these mines, to facilitate the removal of the phosphate rock, 
operators had used the waste rock, called overburden, as backfill and 
placed it in large external waste rock piles or in adjacent valleys. 
[Footnote 2] The selenium present in the overburden has been 
transported by rain and snow run-off into groundwater or into streams 
and rivers inhabited by native fish, and accumulated in ground cover 
plants that have been consumed by livestock and other animals such as 
deer and elk. Much of the mining in this area has taken place on 
federal land,[Footnote 3] and federal agencies are currently 
overseeing mining operations or selenium cleanup at 18 phosphate 
mines, of which 5 are active and 13 inactive.[Footnote 4] Of the 18 
mines, 16 are contaminated with selenium and most are being assessed 
under the Comprehensive Environmental Response, Compensation, and 
Liability Act (CERCLA), also known as Superfund, for future cleanup. 

The phosphate reserves being mined in southeast Idaho contain 
phosphate formations that are thicker and richer, on average, than in 
the other states and account for about 30 percent of total U.S. 
reserves, according to the U.S. Geological Survey. The Western 
Phosphate Field represents one of two commercially-viable phosphate 
reserves in the nation--the other is located primarily on private land 
in the southeastern United States. About 80 percent of the phosphate 
reserves in southeastern Idaho lie underneath land managed by the 
Department of Agriculture's Forest Service as part of the 3-million 
acre Caribou-Targhee National Forest. 

Phosphate deposits on these lands are leased to mine operators by the 
Secretary of the Interior under the Mineral Leasing Act of 1920, 
which, with the regulations implementing the act, creates a system to 
lease these resources and charge a royalty for their extraction. 
Interior's Bureau of Land Management (BLM) is responsible for issuing 
leases for solid mineral deposits, such as phosphate, on federal land. 
Under the provisions of the Mineral Leasing Act, BLM issues leases for 
20 years and as long thereafter as the operator maintains compliance 
with lease terms and other conditions, but the leases are subject to 
readjustment every 20 years, at which time BLM has the opportunity to 
modify lease terms and conditions. For federal phosphate leases, BLM 
is responsible for approving mine operators' plans of operation for 
proposed mines and is authorized to monitor mine operations during 
production and to ensure the mine operators complete reclamation once 
the operations have ceased.[Footnote 5] In overseeing phosphate 
mining, BLM works with other federal agencies, including the Forest 
Service; Interior's Bureau of Indian Affairs (BIA) and Fish and 
Wildlife Service (FWS); the Environmental Protection Agency (EPA); and 
the U.S. Army Corps of Engineers (Corps). BLM also works with state 
agencies, including the Idaho Department of Environmental Quality 
(IDEQ). This involves coordinating inspections, enforcement, and mine-
plan reviews and giving consideration to federal laws, such as the 
National Environmental Policy Act (NEPA),[Footnote 6] Endangered 
Species Act,[Footnote 7] and Clean Water Act,[Footnote 8] as well as 
land-use plans that BLM and the Forest Service have developed. 

BLM requires mine operators to provide financial assurances to ensure 
that they meet the obligations specified in their leases and permits, 
such as paying royalties and complying with requirements for mine 
operations and reclamation.[Footnote 9] If the mine operator fails, 
for example, to reclaim a mine site after production has ceased or to 
pay federal royalties, BLM can demand payment from the financial 
assurance to cover the obligation. Other agencies may also hold 
financial assurances for activities associated with mining. For 
example, the Forest Service can require that mine operators post 
financial assurances when obtaining permits to construct roads through 
a national forest to access a leased site. Additionally, federal 
agencies, including EPA, can obtain financial assurances from mine 
operators to help ensure performance in accordance with settlement 
agreements negotiated under CERCLA for assessing and cleaning up 
contamination from mines.[Footnote 10] 

You asked us to review issues surrounding the oversight and cleanup of 
phosphate mines on federal lands. This report examines the (1) extent 
to which federal agencies' oversight of phosphate operations has 
changed since the discovery of selenium contamination in Idaho in 
1996, and whether those changes appear sufficient to help the agencies 
prevent future contamination; (2) actions that federal agencies and 
mine operators have taken to assess and remediate contamination from 
phosphate mining on federal land, amounts they have spent on these 
actions, and estimated remaining costs; and (3) types and amounts of 
financial assurances in place for phosphate mining operations and the 
extent to which these assurances are likely to cover future cleanup 
costs. 

To address the first objective, we reviewed relevant agency documents 
and reports created both before and after 1996. These include BLM's 
and the Forest Service's land-use plans; BLM records of decision for 
new mine plans and associated NEPA documents; and BLM lease and bond 
reports. We interviewed officials with BIA, BLM, FWS, and the Office 
of Natural Resources Revenue, within the Department of the Interior; 
the Forest Service; EPA; the Corps; and IDEQ. We also interviewed 
representatives of the three phosphate mine operators who operate in 
Idaho and visited the phosphate mines operating as of June 2011. To 
address the second objective, we reviewed BLM, Forest Service, EPA, 
and IDEQ documents and reports on the status of assessment and cleanup 
efforts, and the related settlement agreements with the mine 
operators. We obtained data on agency expenditures from Interior, BLM, 
FWS, the Forest Service, EPA, and IDEQ, including the source of the 
funds, and data on the amount of expenditures reimbursed by mine 
operators under the CERCLA settlement agreements. To evaluate the 
reliability of these data and determine their limitations, we reviewed 
the agencies' internal controls of their data systems and interviewed 
agency officials and determined that the expenditure data were 
sufficiently reliable for our purposes. To address the third 
objective, we obtained financial assurance data from BLM, BIA, the 
Forest Service, and EPA, including data on financial assurances held 
by Idaho state agencies for operations on federal land. To evaluate 
the reliability of the financial assurance data, we interviewed agency 
officials, examined agency records, and cross-checked the data with 
the financial assurance amounts listed in agency databases and CERCLA 
settlement agreements, and determined that these data were 
sufficiently reliable for our purposes. To obtain additional 
perspectives on the issue of phosphate mining, we also interviewed 
representatives from regionally-focused environmental advocacy groups, 
including the Idaho Conservation League and the Greater Yellowstone 
Coalition. Appendix I describes our scope and methodology in more 
detail. 

We focused our report on agencies' and mine operators' activities in 
Idaho for two primary reasons. First, phosphate-mining operations on 
federal land are generally limited to the Western Phosphate Field, and 
all but one of these operations are located in Idaho. Second, the 
occurrence of selenium contamination resulting from phosphate mining 
operations on federal lands is currently limited to Idaho; similar 
levels of contamination have not been discovered in the neighboring 
state where a portion of the Western Phosphate Field is mined. 

We conducted this performance audit from May 2011 through May 2012 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

Phosphate is used in the manufacture of a variety of products, 
including toothpaste, soft drinks, and dishwashing and laundry 
detergents. Over 95 percent of the phosphate produced in the United 
States, however, is used in the manufacture of fertilizers and animal 
feed supplements. This section provides information on phosphate 
mining in Idaho, the phosphate-leasing process, the mine plan approval 
process, the Clean Water Act permitting process, and the CERCLA 
assessment and remediation process. 

Phosphate Mining in Idaho: 

Roughly 12 percent of the phosphate currently produced in the United 
States comes from the five active mines located in southeastern Idaho 
on lands managed by BLM, the Forest Service, the State of Idaho, and 
private landowners.[Footnote 11] In addition, phosphate mining 
occurred historically on nearby lands in Idaho leased by the Shoshone-
Bannock Tribes on the Fort Hall Indian Reservation. The entire area of 
southeastern Idaho is at the center of the Western Phosphate Field 
that extends into six western states. Figure 1 shows the location of 
the field. 

Figure 1: Map of the Western Phosphate Field: 

[Refer to PDF for image: illustrated map] 

Depicted on the map: 

Western Phosphate Field; 
Area in Southeastern Idaho with a high concentration of phosphate 
mines; 
White areas represent exposed phosphate formations. 

Source: GAO analysis of U.S. Geological Survey data; Map Resources 
(map). 

[End of figure] 

Three mine operators currently mine phosphate at the five active mines 
in southeastern Idaho. At each of these mines, operators use drilling 
and blasting to expose the layers of phosphate ore so that it can be 
excavated and hauled by truck, train, or pipeline to a facility for 
processing.[Footnote 12] Two of these operators process the phosphate 
ore into fertilizer products, while the third produces elemental 
phosphorus for use in herbicides. To access the phosphate ore, the 
mine operators must also remove the overburden--that is, the layers of 
rock that overlay, or in some cases are layered between, the phosphate 
ore. The overburden was historically placed in external waste dumps or 
used as backfill in mine pits or in nearby valleys, creating what are 
known as cross-valley fills. Figure 2 shows an active phosphate mine 
in southeastern Idaho, and figure 3 shows an inactive phosphate mine 
with a cross-valley fill. 

Figure 2: An Active Phosphate Mine in Southeastern Idaho: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

Figure 3: An Inactive Phosphate Mine in Southeastern Idaho with a 
Cross-Valley Fill: 

[Refer to PDF for image: photograph] 

Inset on photo: Location of cross-valley fill. 

Source: Forest Service. 

[End of figure] 

After horses grazing downstream from a cross-valley fill on federal 
land became sick and had to be euthanized in 1996, it was discovered 
that much of the overburden at phosphate mines in Idaho contains high 
concentrations of selenium--a naturally occurring element that in 
trace amounts is essential to the normal functioning of cells in 
animals but that can be poisonous in large concentrations. The 
selenium present in the overburden can be transported by rain and snow 
into the groundwater or into rivers and streams, or picked up by the 
roots of plants growing on the waste piles. The uptake of selenium 
contamination in vegetation or the frequent ingestion of selenium by 
animals can cause it to build up over time in a process known as 
bioaccumulation. BLM officials estimate that over 600 head of 
livestock have died from selenium poisoning since 1996 in the area--
including a 2005 incident involving the deaths of over 30 sheep near a 
mine on federal land. Adverse effects due to selenium contamination 
have also been documented in birds and aquatic animals such as fish 
and invertebrates. Figure 4 shows the phosphate mining process and how 
it can result in the release of selenium. 

Figure 4: How Phosphate Mining Overburden Can Release Selenium: 

[Refer to PDF for image: illustration] 

Depicted on the illustration: 

Rock with selenium; 
Phosphate ore underneath. 

Phosphate ore to processing plant; 
Waste rock: affected by rain and snow: 
Stream and groundwater contamination; 
Plants take up selenium through roots; 
Animals ingest contaminated water and plants. 

Source: GAO analysis of BLM data; Art Explosion (clip art). 

[End of figure] 

In southeastern Idaho, selenium contamination has been measured at 3 
of the 5 active mines, and at all 13 of the inactive mines. Table 1 
shows the 18 phosphate mines in southeastern Idaho and their 
production status, and the locations where selenium contamination and 
livestock deaths have occurred. See appendix II for more detailed 
information on the acres and surface land ownership of these mines. 

Table 1: Production Status and Presence of Selenium Contamination at 
Phosphate Mines in Southeastern Idaho: 

Mine name: Ballard; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Blackfoot Bridge; 
Status: Active; 
Selenium contamination detected: [Empty]; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Champ; 
Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Conda; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Check}. 

Mine name: Diamond Gulch; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Dry Valley; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Dry Valley, South Extension; 
Status: Active; 
Selenium contamination detected: [Empty]; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Enoch Valley;
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Gay; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Georgetown Canyon; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Check}. 

Mine name: Henry; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Mountain Fuel; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: North Maybe; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Check}. 

Mine name: Rasmussen Ridge; 
Status: Active; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Smoky Canyon; 
Status: Active; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: South Maybe Canyon; 
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Check}. 

Mine name: South Rasmussen; 
Status: Active; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: [Empty]. 

Mine name: Wooley Valley;
Status: Inactive; 
Selenium contamination detected: [Check}; 
Livestock deaths or illnesses have occurred: 
[Check}. 

Mine name: Total; 
Active: 5; 
Inactive: 13; 
Selenium contamination detected: 16; 
Livestock deaths or illnesses have occurred: 5. 

Source: BLM. 

[End of table] 

The Phosphate-Leasing Process: 

BLM issues phosphate leases under the Mineral Leasing Act of 
1920.[Footnote 13] BLM is responsible for leasing on federal lands, 
but it must consult with the agency having jurisdiction over the 
surface, such as the Forest Service, with respect to surface 
protection and reclamation requirements. BLM will decline to issue a 
lease for phosphate mining if it is inconsistent with an applicable 
land-use plan. According to BLM officials, most of the 86 phosphate 
leases in southeast Idaho were issued over 50 years ago,[Footnote 14] 
and BLM last held a competitive lease sale in 1991. However, 
additional lands have been leased through lease modifications--a non-
competitive process whereby a mine operator requests that BLM expand 
an existing lease to include lands adjacent to an active or proposed 
mine. Leases are for indefinite terms; however, BLM may make 
reasonable adjustments to the lease conditions once every 20 years. 
Lessees have the right to challenge the terms and conditions proposed 
by BLM through readjustment, including a right of appeal to the 
Interior Board of Land Appeals.[Footnote 15] In addition to obtaining 
a lease from BLM, mine operators may need to obtain a special-use 
permit to use National Forest System land for off-lease activities, 
such as the construction of access roads. Mine operators must pay a 
royalty of at least 5 percent of the gross value of phosphate rock and 
associated minerals produced, as well as annual rent of up to $1.00 
per acre. For leases that have not been in production for 6 or more 
years, mine operators pay an annual royalty of $3 per acre that 
includes rent. According to officials with Interior's Office of 
Natural Resources Revenue, the federal government collected roughly $7 
million in royalties and rents from phosphate mine operations on 
federal land in fiscal year 2010. 

The Mine Plan Approval Process: 

Before conducting any operations under a lease, an operator must 
submit to BLM a mine plan detailing the operations to be conducted. 
The mine plan outlines basic mine operations and mine-specific 
production measurement methods for calculating royalties. The mine 
plan also is to include information on the environmental aspects of 
the proposed mine, such as pollutants that may enter waters, measures 
to be taken to prevent air and water pollution and damage to fish or 
wildlife, and a reclamation plan. The reclamation plan details the 
steps the operator will take to restore the land to its previous 
condition, including action such as recontouring hillsides, removing 
roads and structures, and planting vegetation. BLM is required to 
consult with other federal agencies, such as those having jurisdiction 
over surface land, prior to approval and may require modifications to 
an approved plan if conditions warrant. For example, BLM may seek to 
modify a mine plan if selenium is discovered at the site after 
operations begin. After the approval of a mine plan, BLM sets a 
financial assurance amount for the mining operation. Financial 
assurances may cover individual leases or all leases for a single 
lessee in a state or nationwide. The minimum amount for an operator is 
$5,000 for individual leases, $25,000 for all of the operator's leases 
statewide, or $75,000 for all of the operator's leases nationwide. BLM 
may enter into agreements with states whereby any financial assurance 
provided to a state would also satisfy BLM's requirements. BLM will 
release a financial assurance when it determines that the operator has 
(1) paid all royalties, rents, penalties, and assessments; (2) 
satisfied all lease obligations; (3) reclaimed the site; and (4) taken 
effective measures to ensure that the mineral prospecting or 
development activities will not adversely affect surface or subsurface 
resources. The Forest Service may also require operators to post 
financial assurances for activities associated with special-use 
permits. 

In association with the mine approval processes, BLM--in cooperation 
with the Forest Service if National Forest System land is involved--
must evaluate the proposed mine under NEPA. NEPA requires federal 
agencies to evaluate the likely environmental effects of a proposed 
project using an environmental assessment or, if the project is likely 
to significantly affect the environment, a more detailed environmental 
impact statement (EIS). EPA officials told us that EPA is required to 
review, and issue written comments on, each draft EIS, which BLM may 
accept or reject.[Footnote 16] As part of the NEPA process, and also 
to comply with the Endangered Species Act, BLM and the Forest Service 
may also undertake a biological assessment to identify endangered or 
threatened species and critical habitat that may be affected by mine 
operations.[Footnote 17] If BLM and the Forest Service determine that 
a mine may affect an endangered or threatened species, FWS may issue a 
biological opinion as to whether the activity is likely to jeopardize 
the continued existence of the species. If FWS finds that the activity 
will not jeopardize the species, its opinion will still list measures 
that can be taken to minimize impacts on the species. The outcomes of 
these analyses may affect BLM's final decision on an operator's mining 
plan. 

The Clean Water Act Permitting Process: 

Mine operators may also need to work with other agencies to obtain 
additional permits or certifications before they can begin mining 
operations. For example, operators must obtain a permit under section 
404 of the Clean Water Act from the Corps for the discharge of dredged 
or fill material into waters of the United States at specified 
disposal sites. Such discharges can include disposal of mine 
overburden. In addition, operators must obtain a permit under Section 
402 of the Clean Water Act from EPA for discharges of storm water 
runoff that is contaminated by contact with certain materials such as 
overburden.[Footnote 18] Under such permits, operators may need to 
implement technology-based controls to protect waters, but operators 
may also be required to implement other controls based on the quality 
of the water into which they are discharging. 

In addition, under section 303(d) of the Clean Water Act, states must 
establish a Total Maximum Daily Load (TMDL) for any water body that 
cannot meet applicable water quality standards even after technology-
based controls are applied to sources of water pollution. The TMDL 
represents the total amount of a pollutant that can be discharged into 
a water body each day without exceeding the water quality standard for 
that water body. The state of Idaho has identified selenium as a 
substance impairing water quality in some of its waters, but it has 
not yet established any TMDLs for selenium.[Footnote 19] Section 401 
of the Clean Water Act also provides states with the opportunity to 
object to the issuance of federal permits and licenses, including 
section 404 or 402 permits that may affect water quality in the state. 
Accordingly, an operator seeking a federal permit for a project that 
may affect water quality in Idaho must also seek section 401 
certification for the proposal from IDEQ. 

The CERCLA Assessment and Remediation Process: 

Environmental contamination discovered at a mine may require 
remediation under CERCLA, the federal government's principal program 
to respond to releases or substantial threats of releases of hazardous 
substances, pollutants, or contaminants which may present an imminent 
and substantial danger to the public health or welfare. Under CERCLA, 
the federal government has the authority to compel parties responsible 
for contaminating sites to clean them up, or to conduct cleanups 
itself and then seek reimbursement from the responsible parties. The 
National Priorities List (NPL) is EPA's list of the nation's most 
contaminated sites, and cleanups of these sites are typically 
expensive and lengthy. For NPL sites on Forest Service or BLM land, 
the land management agencies and EPA work together under interagency 
agreements to implement response actions. For non-NPL sites on Forest 
Service or BLM land, the land management agencies take the lead on 
implementing CERCLA response actions, except for emergencies which 
have been delegated exclusively to EPA.[Footnote 20] 

In enforcing CERCLA, federal agencies generally attempt to reach an 
agreement--known as a settlement agreement--with responsible parties 
(such as mine operators or other entities) to perform and pay for site 
cleanups once contamination has been discovered. Under these 
agreements, responsible parties may be required to post a financial 
assurance to ensure the performance of agreed-upon cleanup actions. 
However, there are currently no regulations that require mine 
operators to provide such financial assurances; agencies and 
responsible parties negotiate these terms in each settlement.[Footnote 
21] Under CERCLA, EPA is required to issue regulations requiring 
certain businesses that handle hazardous substances to demonstrate 
their ability to pay for environmental cleanup costs, but the agency 
has not yet issued such regulations. However, the agency expects to 
propose such a rule for certain types of mining, which could include 
phosphate mining, in 2013, according to EPA officials. 

After contamination has been identified, the agency taking the lead on 
the cleanup initiates a process to investigate the extent of the 
contamination, decide on the actions that will be taken to address 
contamination, and implement those actions. The CERCLA program has two 
basic types of cleanup: (1) cleanups under the removal process, which 
generally address short-term threats, and (2) cleanups under the 
remedial action process, which are generally longer-term cleanup 
actions. 

* Removal actions include (1) time-critical removals for threats 
requiring action within 6 months, and (2) non-time-critical removals 
for threats where action can be delayed to account for a 6-month 
planning period. As shown in figure 5, the non-time-critical removal 
process involves three primary phases, (1) a site evaluation, 
including site investigation and engineering evaluation/cost analysis, 
to characterize the site and identify and analyze removal 
alternatives; (2) selection and implementation of the removal action; 
and (3) monitoring and maintenance. 

Figure 5: The CERCLA Non-Time Critical Removal Assessment and Cleanup 
Process: 

[Refer to PDF for image: illustration] 

Milestone: 
Discovery or Notification of Contamination; 

Phase: 
Site investigation and engineering evaluation/cost analysis. 

Milestone: 
Action Memorandum. 

Phase: 
Non-time critical removal action implementation. 

Milestone: 
Removal Site Closeout. 

Phase: 
Post-removal maintenance and monitoring. 

Source: GAO based on EPA data.    

[End of figure] 

* The remedial action process begins with a remedial investigation and 
a feasibility study to characterize site conditions, assess the risks 
to human health and the environment, and to evaluate various options 
to address the problems identified, among other things. These findings 
and decisions are documented in a record of decision. Implementation 
of the remedial action is divided into two parts: (1) remedial design, 
a further evaluation of the best way to implement the chosen remedy; 
and (2) remedial action, the implementation of the remedy selected. 
When physical construction of all remedial actions is complete and 
other criteria are met, the lead agency deems the site to be 
construction complete. Most sites then enter an operation and 
maintenance phase, wherein the responsible party or the state 
maintains the remedy, while the lead agency conducts periodic reviews 
to ensure that the remedy continues to protect human health and the 
environment. For example, at a mine site with piles of overburden 
contaminated with selenium, the remedial action could consist of 
building a cap over the contaminated soil, while the operation and 
maintenance phase would consist of monitoring and maintaining the cap. 
[Footnote 22] The remedial action process is a more transparent and 
comprehensive process with more distinct steps than the removal action 
process. For example, CERCLA and its implementing regulations provide 
more opportunities for the public to participate in the remedial 
action process, including participation in site-related decisions, 
than are required in the removal action process, which may be limited 
to a single comment period. The remedial investigation/feasibility 
study process is subject to more-detailed data requirements than the 
site evaluation process for a removal action, and under section 121 of 
CERCLA, remedial actions generally require completed sites to achieve 
certain cleanup standards, which is not necessarily the case for 
removal actions. Finally, the remedial action process favors permanent 
remedies over short-term abatement. Figure 6 shows the remedial action 
process. 

Figure 6: The CERCLA Remedial Action Process: 

[Refer to PDF for image: illustration] 

Milestone: 
NPL listing/Settlement agreement signed/Agency initiates cleanup 
process. 

Phase: 
Remedial investigation/Feasibility study. 

Milestone: 
Record of Decision. 

Phase: 
Remedial design/Remedial action. 

Milestone: 
Construction complete. 

Phase: 
Postconstruction completion[A]. 

Source: GAO analysis of EPA data. 

[A] Postconstruction completion includes activities such as operation 
and maintenance, long-term response actions, and 5-year reviews, which 
ensure that Superfund cleanup actions provide for the long-term 
protection of human health and the environment. 

[End of figure] 

Responsibility for selenium contamination in southeastern Idaho has 
been the subject of a recent CERCLA lawsuit. Under CERCLA, a party can 
be held liable for cleanup costs as an owner or operator of a facility 
where there was a release of hazardous substances or if the party 
arranged for disposal of hazardous substances. In 2009, a phosphate 
mine operator sued to compel the federal government to share the costs 
of cleaning up contamination under CERCLA at four mines, asserting 
that the government was an owner, arranger, and operator of the waste 
disposal sites at those mines. In the first step of the litigation, 
the court held in 2011 that the government was an owner, arranger, and 
operator.[Footnote 23] Specifically, the court found that the 
government owned the mine site, owned the middle waste shale that is 
the source of the hazardous substance involved (selenium), had the 
authority to control the disposal of that substance, and exercised 
some actual control over the disposal of that substance. Furthermore, 
the government managed the design and location of waste dumps at the 
mines and regularly inspected the mines to ensure compliance with the 
mining plans and waste disposal guidelines. The court did not 
determine the amount of cleanup costs the government owes, deferring 
that to a subsequent phase of the litigation. The parties have since 
agreed to settle the issues remaining in the case.[Footnote 24] 

Agencies Have Provided More Rigorous Oversight of Phosphate Mining 
Since 1996, but Oversight Gaps Remain: 

Federal agencies have taken steps to strengthen their oversight of 
phosphate mining on federal land since selenium contamination was 
discovered in 1996 by requiring more detailed environmental analysis 
and reclamation plans, requiring financial assurances that provide 
more coverage, hiring additional staff, and revising land-use plans. 
Nevertheless, oversight gaps remain that limit the agencies' ability 
to effectively address contamination from phosphate mining operations. 
These gaps include inadequate documentation of BLM's financial 
assurance practices, inconsistent coordination on financial 
assurances, an ineffective process for resolving agency disagreements 
on lease terms and conditions, and insufficient mechanisms for 
overseeing activities being conducted by third party contractors. 

Agencies Have Strengthened Their Oversight to Address Selenium 
Contamination: 

In an effort to reduce the likelihood that new and ongoing mines will 
result in additional sources of selenium contamination and improve the 
management of ongoing CERCLA cleanups, BLM and the Forest Service have 
taken the following steps to strengthen their oversight of phosphate 
mining operations. 

* BLM requires a more detailed environmental analysis for approving 
mine plans. According to BLM officials, in 1998 the agency began to 
prepare a full site-specific EIS when evaluating new mine plans, 
instead of relying on a 1977 areawide programmatic EIS and conducting 
site-specific environmental assessments that were more limited in 
scope, as had been done previously. Under the new EIS, officials told 
us, they conduct enhanced environmental testing and analysis to 
understand the potential sources of selenium at proposed mine sites, 
investigate how proposed mines would affect surface water and 
groundwater, and evaluate engineering models for options to prevent or 
mitigate the contamination. 

* BLM requires more comprehensive reclamation plans. BLM officials 
told us that the agency now requires mine operators that propose new 
mine sites to develop more comprehensive reclamation plans than 
operators did previously. For example, mine operators are now 
generally required to agree to backfill open mine pits and not 
construct cross-valley fills; separate selenium-contaminated waste 
from other waste; engineer systems of natural or synthetic caps and 
covers for both reducing the infiltration of surface water into waste 
piles that can contribute to groundwater contamination and preventing 
the uptake of selenium by the roots of vegetation planted for 
reclamation; and select plants for revegetating mine sites that 
minimize selenium uptake and reduce the risk of ingestion by livestock 
and wildlife. In addition, the new mine plans provide for enhanced 
inspection of the mine operations in order to, among other things, 
monitor groundwater to detect selenium contamination early and oversee 
the construction of waste pile caps and covers. Since the state of 
Idaho decided to list parts of the Blackfoot River as impaired for 
selenium under section 303(d) of the Clean Water Act in 2002, BLM has 
also been requiring mine operators to demonstrate through their mine 
and reclamation plans that the mines will not add any measurable 
selenium contamination to the river and its tributaries. 

* BLM requires full-cost financial assurances for new mines. BLM 
officials told us that the agency decided in 2001 to set financial 
assurances for new mining operations using a formula based on the 
estimated full cost of reclaiming the site--meaning that, if the mine 
operator defaults on its reclamation obligation, the financial 
assurance would be adequate for BLM to hire contractors and incur 
oversight and overhead costs to perform the work--plus 3 months of 
estimated royalties. In the past, BLM officials told us, as agreed 
with the state of Idaho, BLM generally set financial assurance amounts 
at not more than $2,500 per acre of surface disturbance, regardless of 
the potential cost of reclamation. The financial assurances for the 
new mines are substantially higher than those set under the per-acre 
calculation. For example, one mine approved in 2011 was required to 
provide a financial assurance valued at nearly $22 million; based on 
general past practices, that financial assurance would have been set 
at about $1.7 million, according to our analysis. The adequacy of 
these larger financial assurances for reclamation has not yet been 
tested, however, because all of the mines at which they have been 
required are still active. BLM officials told us that they generally 
have not increased or decreased financial assurance amounts for 
inactive phosphate mine operations because most of those mines will 
require further remediation for selenium contamination under CERCLA, 
and the costs to reclaim and remediate those sites--which would form 
the basis for any adjustment in the financial assurance amounts--have 
not yet been estimated. 

* BLM and the Forest Service have made changes to readjusted leases, 
and BLM has denied lease relinquishments. To help ensure that 
phosphate mine operators are liable for any environmental damage they 
may cause, BLM and the Forest Service jointly devised a lease 
stipulation that has been included in every lease readjustment since 
2002, covering a total of 63 leases. Under the new stipulation, the 
mine operator agrees to pay for certain environmental damage it causes 
and, when requesting that a lease be relinquished,[Footnote 25] to 
conduct an environmental site assessment of the mine site to identify 
any possible contamination. BLM also made other changes, such as the 
addition of a notification to phosphate lessees that details the 
information that should be included in a proposed mine plan, and 
language stating that lessees will be required to comply with CERCLA, 
as well as other environmental laws. BLM officials told us they intend 
to use the environmental site assessment in evaluating whether to 
allow the operator to relinquish the lease. Until the lease is 
relinquished, BLM can maintain the financial assurance associated with 
the lease, and any terms and conditions of the lease including 
reclamation obligations remain in effect. BLM officials told us that 
their practice has been to deny lease relinquishments if there are any 
indications that further CERCLA cleanup may be necessary to address 
selenium contamination, and that they last relinquished a phosphate 
lease in 1997 at a site where no phosphate production had occurred. No 
phosphate mine operators requested a lease relinquishment from 1993 
through 2003, and since 2003, BLM has not approved any of the 8 
requests it has received for lease relinquishment, according to BLM 
officials. 

* BLM and the Forest Service have taken some steps to supplement staff 
resources. Since selenium contamination was discovered in 1996, BLM 
and the Forest Service have combined their mine oversight field staff 
in southeastern Idaho into a minerals branch under an interagency 
initiative known as Service First. According to BLM officials, this 
initiative has allowed the agencies to eliminate redundant mine 
oversight, increase efficiency, and accomplish more work. BLM and the 
Forest Service have also hired additional staff to help manage the 
increased workload associated with overseeing new and ongoing mines. 
For example, the Forest Service has, among other things, created a new 
position to oversee its selenium remediation efforts. This position is 
currently held by a former EPA employee with 15 years of experience 
managing CERCLA cleanups. In addition, BLM has arranged to have mine 
operators pay for third-party contractors to support BLM staff in 
certain aspects of mine oversight. For example, mine operators have 
paid contractors to prepare EISs,[Footnote 26] and BLM has directed 
two mine operators to enter into and pay for contracts with third 
parties to provide monitoring and other services associated with 
constructing and implementing cover systems for waste rock. BLM has 
also asked mine operators to reimburse it directly to fund two BLM 
positions to conduct mine oversight.[Footnote 27] Despite these 
efforts, BLM officials in Idaho told us that they still face 
challenges in meeting their workload demands, particularly because 
changes in the oversight process since 1996 have required additional 
time and effort to implement. For example, BLM officials told us that 
it typically takes 5 years to complete an EIS for a proposed new mine, 
and this process can incur contractor costs of over $2 million. In 
contrast, BLM could complete the environmental assessment process it 
used previously in 2 years using agency resources. 

* BLM and the Forest Service have revised their land-use plans to 
address contamination. BLM began the process of revising its land-use 
plan for the area covering the Idaho portion of the Western Phosphate 
Field in 2003, and in 2010 issued a final EIS for the draft plan that 
provides direction for managing phosphate activities, preventing 
contamination, and setting standards for contaminants. BLM officials 
told us that these changes are intended to help ensure that phosphate 
mine operators provide adequate financial assurances and that 
operators adequately reclaim mine sites, including preventing selenium 
contamination. BLM officials told us that they expect to approve the 
record of decision for the plan in 2012. Similarly, the Forest Service 
issued a revised forest plan for the Caribou National Forest in 2003 
that set new standards and guidelines for phosphate mine development 
on forest lands to help detect and prevent selenium contamination. For 
example, the revised plan contains new standards that, among other 
things, stipulate that vegetation used in reclamation must be 
monitored for bioaccumulation of hazardous substances, such as 
selenium, and that financial assurances should be based on the 
estimated full cost of reclamation and in place before the mine 
operator disturbs the land surface.[Footnote 28] 

Oversight Gaps Remain in Agency Policy and Coordination: 

We identified four gaps in the agencies' oversight efforts that could 
limit their ability to address ongoing problems with selenium 
contamination. First, although BLM has strengthened its oversight of 
new phosphate mines by requiring that operators provide financial 
assurances to cover the estimated full cost of reclamation, BLM has 
not documented this practice in its official agency policy. In a 2002 
internal evaluation of financial assurance policies, BLM recognized 
that its practices for phosphate mines in Idaho are not reflected in 
current policy and determined that the agency should revise the manual 
associated with this program to recognize these practices.[Footnote 
29] However, BLM officials told us that the agency has not yet done 
so. As noted in the Standards for Internal Control in the Federal 
Government, agency policies should be clearly documented and readily 
available for examination to ensure effective program management. 
[Footnote 30] Without documenting its bonding practices in official 
agency policy, BLM cannot be assured that the current full-cost 
financial assurance practices for phosphate mines in Idaho will be 
implemented completely and consistently. 

Second, according to Forest Service officials, since at least 2006, 
BLM has not consistently coordinated with the Forest Service about the 
financial assurances for phosphate mining operations on National 
Forest System land. BLM must consult with the agency that administers 
the surface land prior to issuing a lease and, generally, regarding 
the surface protection and reclamation requirements of the 
lease.[Footnote 31] Forest Service officials told us that they are not 
consistently consulted about the appropriate level of financial 
assurances nor made aware of the decisions regarding financial 
assurances being made by BLM. BLM and the Forest Service have an 
interagency agreement that includes procedures for coordinating on 
issues involving licenses, permits, and leases, but this agreement 
does not expressly discuss issues related to financial assurances. 
Similarly, BLM and the Forest Service have drafted an agreement 
covering the sharing of staff and resources under their Service First 
initiative in Idaho, but this draft agreement does not provide details 
on the steps the agencies should take to coordinate on financial 
assurances. The resulting inconsistency in coordination is of 
particular concern to Forest Service officials, because they consider 
financial assurance amounts, particularly for existing mines, to be 
potentially inadequate to cover the estimated reclamation costs. These 
officials told us that additional communication and coordination with 
BLM when establishing and reviewing the adequacy of financial 
assurances would allow them to offer relevant information that might 
help BLM officials in setting bond amounts. They also noted that 
additional coordination would help ensure that the mine operator is 
acting in accordance with the portions of the forest plan specifying 
that financial assurances should be adequate to cover the full cost of 
reclamation and should be in place before surface disturbance occurs. 
BLM officials told us that while they do coordinate with the Forest 
Service, it tends to be on a case-by-case basis and that in some 
instances they are limited in their ability to coordinate by 
insufficient staff. 

Third, BLM and the Forest Service have not in all cases been able to 
reach agreement on lease terms and conditions to include when issuing 
new leases and readjusting existing leases. BLM and the Forest Service 
have an interagency agreement that states the agencies will coordinate 
at the local level on issues involving lease terms and conditions, and 
at the headquarters level on issues involving agency-wide lease terms 
and conditions. However, the agencies do not have a detailed process 
for doing so in a timely manner. For example, beginning in 2010, BLM 
and the Forest Service discussed potential changes proposed by the 
Forest Service to the terms and conditions in three existing phosphate 
leases. According to BLM and Forest Service officials, although BLM 
made some of the changes the Forest Service was seeking, most of the 
substantive changes being proposed by the Forest Service necessitated 
coordination with BLM's Washington, D.C., headquarters because they 
would require changes to the standard leasing forms used by BLM. 
Subsequently, in December 2011, the Forest Service proposed several 
changes to BLM's general lease terms and conditions to BLM's 
Washington, D.C., headquarters office that, in the Forest Service's 
view, would better protect the government from potential liability 
associated with selenium contamination in the future, particularly in 
light of the lawsuit noted earlier. However, as of April 2012, the 
agencies had not yet reached agreement on whether or how to change the 
general lease terms and conditions. During this period, BLM has 
renewed three phosphate leases for another 20 years without including 
the changes the Forest Service was seeking, in part to meet the 
deadline for renewing the leases. In commenting on a draft of this 
report, Interior noted that an additional reason the leases were 
renewed without including the Forest Service's proposed changes was a 
difference in professional judgment between officials of the two 
agencies. Without a timely process for resolving disagreements on the 
part of BLM and the Forest Service regarding lease terms and 
conditions, we are concerned that BLM may again readjust leases or 
issue new leases in the future without having resolved disagreements 
that may exist between the agencies about proposed lease terms and 
conditions. For Forest Service officials, this is of particular 
concern because 16 leases on Forest Service land are scheduled for 
readjustment in the next 5 years, and once a lease is readjusted, as 
noted earlier, its provisions are in effect for 20 years. In 
commenting on a draft of this report, both Interior and the Forest 
Service told us they have begun working to improve the coordination 
process. 

Fourth, BLM does not have mechanisms in place for overseeing all 
activities that are being conducted by third-party contractors, and 
the agency could not identify the statutory or regulatory provisions 
that authorize or lay out its responsibilities with regard to 
directing and overseeing such arrangements. In two instances, BLM has 
directed mine operators to enter into and pay for contracts with third 
parties to provide monitoring and other services associated with the 
construction and installation of waste-pile cover systems and other 
related reclamation activities on mine sites.[Footnote 32]However, in 
neither instance does BLM have a written agreement with the mine 
operators to outline expectations for the monitoring contracts or 
clearly define the roles and responsibilities of the various parties. 
BLM officials told us that even without such agreements, they believe 
that they have adequate controls in place and can take enforcement 
actions over the work being done. For example, officials noted that 
BLM, rather than the mine operator, selected the contractor for one 
mine and will do so for the second. In addition, they noted that one 
of the contracts between the operator and the third party is based on 
a statement of work BLM wrote and that this contract repeatedly states 
that work is being done for BLM and at BLM's direction. Further, BLM 
officials told us that even without such written agreements, under the 
applicable regulations the agency can issue enforcement orders to 
compel the mine operator's compliance with established requirements, 
including those contained in the records of decision approving the 
mine plans.[Footnote 33] Nevertheless, we are concerned that without 
written agreements with mine operators, BLM's ability to ensure that 
the work is carried out to its satisfaction is unclear. For example, 
while BLM officials cited the agency's ability to issue enforcement 
orders as a useful control mechanism, agency officials have also noted 
limitations with this process. Specifically, they told us that an 
operator may take many months to comply with an enforcement order and 
that BLM lacks the authority to issue fines to, or impose fees on, 
phosphate mine operators for failing to comply with an enforcement 
order.[Footnote 34] Moreover, we have broader concerns because BLM 
could not identify the statutory or regulatory provisions that 
specifically authorize or lay out its responsibility with regard to 
the contractual arrangements the agency has required mine operators to 
enter into. 

Agencies and Mine Operators Have Focused on Assessing Contamination, 
Not Conducting Remediation, and Total Cleanup Costs Are Currently 
Unknown: 

Since selenium contamination was discovered in 1996, federal agencies 
and phosphate mine operators in Idaho have largely taken actions 
focused on assessing the extent of selenium contamination at the 16 
mines where such contamination has been identified, and have conducted 
limited remediation. The federal agencies reported having spent about 
$19 million on this effort, about half of which has been reimbursed by 
mine operators. The mine operators have incurred additional costs for 
assessment and remediation activities, according to agency officials, 
but the operators did not provide documentary evidence to support 
these claims. Future cleanup costs are unknown because the agencies 
have not selected final cleanup actions, although agency officials 
informally estimate these costs could amount to hundreds of millions 
of dollars. 

Actions to Date to Address Selenium Contamination Have Included 
Lengthy Assessment Efforts and Limited Remediation: 

Since the discovery of selenium contamination in 1996, federal and 
state agencies and mine operators have worked to assess the extent of 
the contamination caused by phosphate mining, and have conducted some 
limited remediation. Agency officials described a number of factors 
they believe contributed to the amount of time spent on these efforts, 
including a shift in their cleanup approach after nearly 10 years of 
activity. 

Assessments Have Been Ongoing Since 1997: 

According to federal and state officials, in 1997 the agencies and 
mine operators formed a voluntary working group led by the mine 
operators to collaborate on efforts to investigate the selenium 
contamination discovered at that time. As part of this and other 
parallel efforts, mine operators and the agencies, including the 
Forest Service and the U.S. Geological Survey, spent 4 to 5 years 
collecting water-quality and other data and publishing reports that 
helped quantify the scope of the selenium problem, according to these 
officials. These data-gathering efforts indicated that high 
concentrations of selenium were widespread throughout the area. 

According to Forest Service and state officials, given the broad scope 
of the problem and the potential risks posed by the contamination 
identified by these early efforts, federal and state agencies decided 
it would be beneficial to move from a largely voluntary effort 
primarily paid for by mine operators to one in which the agencies 
formally coordinated their actions under federal and state 
authorities. As a result, in 2000 the six agencies with authority over 
cleanup efforts--BLM, FWS, BIA, the Forest Service, EPA, and IDEQ--and 
the Shoshone-Bannock Tribes signed a memorandum of understanding that 
provided a framework for coordinating their investigations of, and 
responses to, the contamination.[Footnote 35] The memorandum 
identified a two-pronged approach: agencies would conduct (1) an 
areawide investigation to continue the work the mine operators and 
agencies had initiated through the working group and (2) site-specific 
investigations to address contamination sources at individual mines. 

The areawide investigation began in 2001 and was led by IDEQ. The 
agencies' costs for this investigation were to be reimbursed by the 
operators in accordance with the terms of a settlement agreement. The 
investigation included gathering available data and identifying data 
gaps, conducting water and other environmental sampling, completing 
risk assessments that identified contaminant sources and ways in which 
humans and wildlife could be exposed, and developing guidance based on 
these risk assessments for remediation goals to potentially be used in 
the site-specific efforts. Sampling efforts showed selenium levels 
above state water quality standards; as a result, IDEQ listed more 
than 150 miles of streams flowing near and through the mines as 
impaired under the Clean Water Act. According to a senior IDEQ 
official, water quality monitoring work under the areawide 
investigation continues, although the settlement agreement for the 
investigation expired in 2011. 

Site-specific investigations began in 1998 and as of March 2012, 
assessment activities were continuing, according to Forest Service and 
EPA officials. Officials told us that the agencies originally decided 
to conduct this assessment work under CERCLA's non-time critical 
removal process, during which a site investigation and engineering 
evaluation/cost analysis is conducted before a removal action is 
selected and implemented. According to EPA officials, this process is 
ideally suited for isolated contamination sources that have proven 
remedies. Forest Service and EPA officials told us that the agencies 
chose this route because the officials responsible at the time 
believed it would be the quickest way to control and abate immediate 
threats posed by the contamination within waste rock dumps. From 1998 
to 2004, the agencies and mine operators entered into non-time 
critical removal process settlement agreements at six mines, with 
final engineering evaluation/cost analysis reports issued for two of 
these mines in 2006 and 2011. 

According to EPA and Forest Service officials, however, in 2006--after 
nearly 10 years of pursuing actions under the non-time critical 
removal process--the agencies decided to switch their approach and 
address the contamination issues at mine sites under the longer-term 
remedial action process, resulting in further clean-up delays as 
additional site-specific data were collected. In explaining the 
switch, Forest Service and EPA officials told us that information 
generated from the areawide and site-specific investigations conducted 
prior to 2006 indicated that the contamination issues at the mines 
were more complex and widespread than originally suspected and that 
many mines would likely require long-term water treatment of a kind 
not typically implemented as part of a non-time critical removal 
action. As a result, according to EPA and Forest Service officials, 
the approach offered by CERCLA's remedial action process would allow a 
more comprehensive investigation and evaluation of the mines and 
remediation that would fully address long-term threats posed by 
selenium. Forest Service officials told us that at three of the six 
mines where non-time critical settlement agreements had been reached, 
the Forest Service decided to continue with the non-time critical 
removal process to address contamination at waste rock dumps, while 
also negotiating settlement agreements with the mine operators to 
address other contamination at these sites through the long-term 
remedial action process. At the remaining three mines that were 
undergoing assessment under the non-time critical removal process, EPA 
began negotiating settlement agreements for remedial investigations 
and feasibility studies rather than continuing with the non-time 
critical removal process. 

As of March 2012, mine operators and agencies had begun work on the 
first step of remedial action process--conducting remedial 
investigations--at 7 of the 16 mines known to have selenium 
contamination, including 5 of the 6 mines that were being addressed 
under the non-time critical removal process. The agencies and mine 
operators are still in the early stages of this process--none had 
produced a complete remedial investigation report as of March 2012--
and, according to officials, completing this process at all mines will 
likely require years of additional work before final cleanup remedies 
are selected. For the remaining 9 of the 16 contaminated mines, a 
senior Forest Service official told us officials are negotiating 
settlement agreements at 3 mines but have not initiated the remedial 
action process at the 6 others,[Footnote 36] either because the 
agencies have not had sufficient resources to begin negotiations, the 
agencies have not reached settlements with the mine operators, or (for 
two mines) the agencies are addressing the contamination under 
provisions of the Clean Water Act or the terms of the reclamation 
plan. Table 2 shows the CERCLA activities that have occurred at these 
16 mines, as well as estimated dates for future activities. 

Table 2: CERCLA Activities at 16 Contaminated Mines, by Assessment 
Process: 

Mine: Ballard [Shaded]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: [Empty]; 
Non-Time Critical Removal Process: 
Process initiated[B]: 2003; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: 2009; 
Remedial investigation complete: (2013); 
Feasibility study complete: (2013). 

Mine: Enoch Valley [Shaded]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: [Empty]; 
Non-Time Critical Removal Process: 
Process initiated[B]: 2003; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: 2009; 
Remedial investigation complete: (2014); 
Feasibility study complete: (2014). 

Mine: Henry [Shaded]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: [Empty]; 
Non-Time Critical Removal Process: 
Process initiated[B]: 2003; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: 2009; 
Remedial investigation complete: (2013); 
Feasibility study complete: (2014). 

Mine: North Maybe [Shaded]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2000; 
Non-Time Critical Removal Process: 
Process initiated[B]: 2004; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: 2008[C]; 
Remedial Action Process: 
Process initiated[B]: 2010; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Smoky Canyon [Shaded]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: [Empty]; 
Non-Time Critical Removal Process: 
Process initiated[B]: 2003; 
Final site investigation report: 2005; 
Final engineering evaluation/cost analysis report: 2006; 
Removal action completed: 2007; 
Remedial Action Process: 
Process initiated[B]: 2009; 
Remedial investigation complete: (2013); 
Feasibility study complete: (2014). 

Mine: South Maybe Canyon [Shaded]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: [Empty]; 
Non-Time Critical Removal Process: 
Process initiated[B]: 1998; 
Final site investigation report: 2007; 
Final engineering evaluation/cost analysis report: 2011; 
Removal action completed: (2014); 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Champ; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2000; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Conda; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2008; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: 2011; 
Removal action completed: (2013); 
Remedial Action Process: 
Process initiated[B]: 2008; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: (2014). 

Mine: Diamond Gulch; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2007; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Dry Valley; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2008; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Gay; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2003; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: 2010; 
Remedial investigation complete: (2015); 
Feasibility study complete: (2016). 

Mine: Georgetown Canyon; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2007; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Mountain Fuel; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2000; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Rasmussen Ridge[D]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2002; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: South Rasmussen[D]; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: [Empty]; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Mine: Wooley Valley; 
Pre-Removal or Remedial Process: Preliminary assessment[A]: 2000; 
Non-Time Critical Removal Process: 
Process initiated[B]: [Empty]; 
Final site investigation report: [Empty]; 
Final engineering evaluation/cost analysis report: [Empty]; 
Removal action completed: [Empty]; 
Remedial Action Process: 
Process initiated[B]: [Empty]; 
Remedial investigation complete: [Empty]; 
Feasibility study complete: [Empty]. 

Source: GAO analysis of agency data. 

Notes: Dates in parenthesis represent estimates for future milestones. 
Shading indicates mines that had been initially assessed under the non-
time critical removal process. 

[A] Preliminary assessments under CERCLA are often the first step 
undertaken after a potentially contaminated site has been identified. 
They are used to identify potential threats, determine the need for 
further investigation under the removal or remedial process, and 
gather information to evaluate eligibility for the National Priorities 
List. 

[B] In most cases, this process was initiated when the agencies and 
mine operators signed a settlement agreement. 

[C] The action at this mine was a time-critical removal action, the 
need for which was discovered as part of the assessment work conducted 
under the non-time critical removal action process. 

[D] This is an active mine not currently being assessed for cleanup 
under CERCLA. 

[End of table] 

Federal agencies have also begun using CERCLA to address harm to fish 
and wildlife resources from contamination associated with the 
phosphate mines in southeastern Idaho. According to FWS officials, in 
2011 the agency initiated the first step in a CERCLA process known as 
natural resource damage assessment, under which the agency may 
ultimately seek damages for harm to natural resources caused by 
phosphate mining and conduct natural resource restoration activities. 
[Footnote 37] Through this process, mine operators may work 
cooperatively with federal agencies to develop an assessment and 
implement natural resource restoration activities, or the agencies may 
independently develop a damage claim to be resolved through settlement 
or litigation. FWS officials told us they are determining whether a 
natural resource damage assessment is warranted and are working with 
other agencies in the area to determine whether they are interested in 
participating in the process. 

Agencies and Operators Have Conducted Limited Remediation: 

Since selenium contamination was discovered in 1996, federal agencies 
and mine operators have taken some limited cleanup actions to address 
highly problematic sources of contamination at three phosphate mines. 

* Smoky Canyon mine. In 2007, to help reduce the amount of selenium 
leaching into a creek, a mine operator built a pipeline to divert 
water around a contaminated waste rock dump at the Smoky Canyon mine 
on Forest Service land. This action was the culmination of a 2003 
CERCLA settlement agreement under the non-time critical removal 
process. According to Forest Service officials, this waste rock dump--
overburden placed into the bottom of a valley--was the source of one 
of the highest concentrations of selenium in the area, and the 
diversion appears to have substantially reduced the amount of selenium 
coming out of the waste dump. Officials from EPA and IDEQ, however, 
have voiced concerns with the effectiveness of the diversion, 
especially after large amounts of precipitation in 2011 caused the 
system to overflow, allowing water to once again flow through the 
waste rock and carry high amounts of selenium into the creek. The 
mine, including this waste rock dump, is being assessed as part of an 
ongoing remedial investigation and additional cleanup measures to 
address the waste rock dump are expected to emerge from the 
investigation. 

* North Maybe mine. As part of assessment work performed under the non-
time critical removal process, one mine operator identified elevated 
selenium levels in ponds at the bottom of a large waste rock dump at 
the North Maybe mine. These selenium levels posed a threat to an 
adjacent creek if a large amount of precipitation should cause the 
ponds to overflow into the creek. To mitigate this threat, in 2008 the 
Forest Service approved a time-critical removal action where the mine 
operator excavated contaminated sediments from the ponds. The operator 
then disposed of the sediments by adding them to a separate waste dump 
at the site and covering them with organic material to reduce exposure 
to precipitation. The Forest Service project manager reported that 
care was taken to ensure that this action would be consistent with 
potential future cleanup activities. 

* South Rasmussen mine. After water quality monitoring revealed that a 
waste dump at the South Rasmussen mine was discharging selenium into a 
creek without a required permit, EPA took an enforcement action 
against the mine operator under the Clean Water Act. The mine operator 
agreed to pay $1.4 million in fines and, according to an EPA official, 
has begun to address the discharge by capturing the outflow from the 
dump and storing it temporarily in ponds. According to EPA officials, 
the mine operator will need to follow up with a more permanent 
solution to address the contamination from the mine, but the officials 
have not determined the most appropriate approach for doing so. EPA 
officials told us they are currently determining whether other active 
mines in the area may also potentially be violating the Clean Water 
Act, but said that their efforts have been limited because EPA has not 
had sufficient staff or funding. EPA officials told us they may also 
initiate additional enforcement actions under the Clean Water Act at 
inactive mines if they determine that no progress is being made under 
CERCLA. 

At a fourth mine, BLM officials told us they are working with a mine 
operator to arrange for additional mitigation measures to stem an 
ongoing selenium discharge, although such measures have not yet been 
taken. Specifically, BLM officials told us they are working with the 
operator to incorporate additional mitigation measures into a 
reclamation plan being implemented at a portion of the Rasmussen Ridge 
mine that has already been mined. BLM officials told us that they are 
able to take this somewhat unusual approach because other portions of 
the mine are still active and the operator has equipment on site that 
could be used to implement these mitigation measures, and undertaking 
these efforts now would help reduce costs for the operator. These 
officials also noted that the mine operator has an incentive to agree 
to this approach because the operator has other mine plan approvals 
pending with the agency and cooperating would help demonstrate 
willingness to address contamination resulting from this operator's 
mining activities. 

Since 1996, mine operators have also conducted mitigation work, 
including testing remediation methods, outside the purview of CERCLA 
settlement agreements, according to operator representatives with whom 
we spoke. For example, these representatives told us that they took 
steps to restrict livestock and wildlife access to ponds and other 
water at their mines. In addition, according to one mine operator, the 
operators have supported research projects related to selenium 
contamination, including one that involved applying cheese whey and 
iron granules to contaminated soils to test whether the materials 
could prevent plant uptake of selenium, making it biologically 
unavailable.[Footnote 38] A representative from this operator told us 
that some of these projects were successful, although further research 
is needed before these techniques can be applied on a large scale. 
Further, EPA officials also noted that mine operators have taken 
action to reduce the uptake of selenium in reclamation vegetation and 
better control stormwater runoff. 

Several Factors Contributed to Lengthy Time Spent on Assessment: 

Agency officials told us that five factors have contributed to the 
length of time spent conducting assessments at contaminated phosphate 
mines in southeastern Idaho. First, the phosphate mines present 
complicated, large-scale contamination challenges that are unique to 
the area, according to agency officials. While the agencies have 
experience dealing with other contaminated, large-scale mines, 
especially hardrock mines, officials told us that the phosphate mines 
in southeastern Idaho feature a complex interaction of selenium in the 
waste rock with the surrounding surface water and groundwater. EPA 
officials explained that complex systems such as those found at the 
phosphate mines require considerable time to understand, which is why 
the agencies have spent--and will likely continue to spend--years 
assessing contamination at these mines. 

Second, having multiple agencies with authority over some aspect of 
cleanup at the mines--including different agencies acting as the lead 
at different sites--has slowed down the assessment process, according 
to officials with these agencies. For example, EPA and Forest Service 
officials noted that it is time-consuming to coordinate the other 
agencies' involvement, including obtaining, considering, and 
reconciling multiple, often conflicting, opinions. EPA officials told 
us that technical disagreements among agencies have led to delays in 
reviewing some operators' assessment documents. Further, according to 
these officials, the situation is exacerbated at those mines located 
on private and federal land where decision-making authority is shared, 
requiring those agencies to come to full agreement before moving 
forward with decisions or actions that affect the entire site. In 
addition, the agencies' roles sometimes needed clarification. For 
example, at one mine located on an Indian reservation, agency 
officials said BIA and EPA spent 2 years negotiating which agency 
would take the lead in managing cleanup work under CERCLA because the 
agencies disagreed over which agency had the legal authority to do so. 

Third, the decision to switch from the non-time critical removal 
process to the remedial action process resulted in delays. According 
to Forest Service and EPA officials, the agencies and mine operators 
spent additional time renegotiating settlement agreements at mines 
where they had begun to address contamination under the non-time 
critical removal process, delaying the process of negotiating new 
agreements at the mines that had not yet been addressed. These 
officials also told us that some of the data collected under the non-
time critical removal process needed to be validated by third-party 
external contractors, which resulted in additional delays. Senior EPA 
and Forest Service officials who entered the process after the non-
time critical approach was selected told us they believed the agencies 
could have started the CERCLA remedial action process initially, in 
part because of the large sizes of the mine sites and the high degree 
of uncertainty associated with them. EPA and Forest Service officials 
told us that selecting the remedial action process from the beginning 
may have streamlined the process of assessing contamination. 

Fourth, according to EPA, Forest Service, and state officials, an 
individual mine operator's level of participation and cooperation 
influences the amount of progress that can be made at the contaminated 
mines, and a difficult situation with a mine operator can slow down 
the assessment process. According to agency officials, this has 
happened in several cases. For example, as noted earlier, one mine 
operator sued to compel the federal government to share liability for 
the costs of cleaning up contamination under CERCLA at four mines; 
Forest Service officials told us that responding to that lawsuit has 
taken resources and attention away from managing assessment and 
cleanup activities at the other mines on its land, resulting in 
additional delays to the assessment process. Ultimately, the 
difficulties associated with this situation resulted in the agency's 
terminating the assessment work the mine operator had been conducting 
at two of the mines and undertaking the work itself. In addition, EPA 
officials told us they have had concerns with the quality of the draft 
reports the mine operators produced for review by the agencies as part 
of the assessment process. These officials told us the agencies 
provided extensive comments on the draft reports, necessitating 
significant rework by the mine operators. 

Finally, the Forest Service did not have sufficient technical and 
management expertise in place, or a sufficient focus on enforcement, 
in the early years of the assessment efforts to successfully manage 
those efforts under CERCLA, according to Forest Service and EPA 
officials. For example, according to an internal Forest Service 
review, the CERCLA knowledge and expertise of the Forest Service field 
staff were not sufficient to address the complexity of the mines, 
which limited cleanup progress. The review also found the agency did 
not hire enough technical support contractors with relevant expertise 
to assist with oversight. As a result, according to Forest Service 
officials and the review, it was difficult for the Forest Service to 
critically assess the mine operators' work, and the agency did not 
always conduct oversight in a timely manner. In addition, according to 
EPA officials, the Forest Service was not aggressive in enforcing the 
terms of its early settlement agreements, which led to a site 
assessment lasting 13 years in one case. Moreover, these officials 
told us they believe the lack of enforcement occurred in part because 
the Forest Service, unlike EPA, generally does not have experience 
with CERCLA enforcement. 

In 2008--12 years after the contamination was first identified--the 
Forest Service recognized it needed staff with more CERCLA-specific 
experience to manage the cleanup work, and in 2009 it hired a former 
EPA official to manage its cleanup program. According to this 
official, the Forest Service also hired more experienced project 
managers for each mine and increased its use of technical support 
contractors to bolster its oversight of mine operators. EPA officials 
told us they believe the composition of the Forest Service staff is 
now appropriate for managing the cleanup work at the phosphate mines 
but that having the Forest Service manage the CERCLA cleanup work at 
the mines may continue to pose certain challenges. For example, EPA 
officials told us they believe the Forest Service lacks the 
institutional support for its CERCLA project managers that is 
available to EPA's project managers.[Footnote 39] 

Since 2001, Agencies Have Spent About $19 Million to Oversee 
Assessment and Remediation, but Costs of Mine Operators' Activities 
Were Unavailable: 

Federal and state agencies reported having spent about $19 million 
since fiscal year 2001 to oversee assessment and remediation efforts 
at contaminated phosphate mines in southeastern Idaho,[Footnote 40] 
according to our analysis of federal and state data.[Footnote 41] Of 
this amount, these agencies spent $10 million on general project 
management and assessment efforts that reached across multiple mines, 
including time spent planning and consulting over the cleanup process 
and working on the areawide investigation, with the remainder spent 
primarily on oversight of activities at individual mines. 

Agencies also reported that the mine operators, who have carried out 
most of the assessment and remediation efforts, have reimbursed the 
agencies for 44 percent of the total agency expenditures under CERCLA 
settlement agreements, and the rest has come from the agencies' 
budgets. Figure 7 shows, by agency, expenditures paid from agency 
budgets and expenditures reimbursed by mine operators. 

Figure 7: Total Agency Expenditures for Overseeing Phosphate Mine 
Assessment and Remediation, and Percentage and Amounts Reimbursed by 
Mine Operators, 2001-2011: 

[Refer to PDF for image: stacked horizontal bar graph] 

Dollars in 2012 constant dollars: 

Agency: Forest Service; 
Agency budget: $6,340,262; 
Operator reimbursements: $2,165,782; 
Percent operator reimbursement: 25%. 

Agency: Idaho Department of Environmental Quality; 
Agency budget: $427,006; 
Operator reimbursements: $3,388,350; 
Percent operator reimbursement: 89%. 

Agency: Environmental Protection Agency; 
Agency budget: $669,315; 
Operator reimbursements: $2,692,854; 
Percent operator reimbursement: 80%. 

Agency: Bureau of Land Management; 
Agency budget: $2,363,495; 
Operator reimbursements: $143,341; 
Percent operator reimbursement: 6%. 

Agency: Bureau of Indian Affairs; 
Agency budget: $890,937; 
Operator reimbursements: $0; 
Percent operator reimbursement: 0%. 

Agency: Fish and Wildlife Service; 
Agency budget: $42,937; 
Operator reimbursements: $151,638; 
Percent operator reimbursement: 78%. 

Source: GAO analysis of agency data. 

Notes: In some cases, mine operators have contributed additional 
amounts that the agencies expect to use to defray future costs. 
Because the agencies have not yet expended these amounts, this figure 
does not reflect these amounts. Expenditures include the agencies' 
administrative costs. 

[End of figure] 

As figure 7 shows, the agencies reported varying amounts of 
expenditures and rates of reimbursement. The Forest Service, which is 
managing cleanup efforts at 7 of the 16 contaminated mines, reported 
spending the largest amount--about $9 million--an amount that 
approaches the other agencies' expenditures combined. The Forest 
Service also reported incurring more expenditures that were not 
reimbursed--about $6 million--than the other agencies, receiving 
reimbursement for 25 percent of its expenditures. According to Forest 
Service officials, the agency's relatively low reimbursement rate 
occurs, in part, because the Forest Service did not have cost recovery 
provisions in its settlement agreements for any of its oversight work 
until 2006. BLM and BIA also reported low overall rates of 
reimbursement because, for the most part, these agencies did not have 
cost recovery arrangements at the mines where they were most active 
until settlement agreements were signed in 2008 or later. Instead, 
they paid for oversight at these mines in the years leading up to the 
settlement agreements out of their budgets. In contrast, EPA has 
managed cleanup at five mines and reported incurring about $3 million 
in expenditures, of which 80 percent has been reimbursed by mine 
operators. EPA officials told us that because of limited funding and 
staff resources, as well as other factors, EPA Region 10 (which 
oversees phosphate assessment and cleanup activities in Idaho) helps 
oversee CERCLA assessments primarily at mines where it has negotiated 
cost recovery mechanisms as part of settlement agreements, or expects 
to do so in the future. Similarly, FWS officials told us that because 
of the agency's own funding constraints, they have also restricted 
their involvement to those mines where cost recovery is available, 
also resulting in a high rate of reimbursement. According to the EPA 
and FWS officials, this approach protects the agencies financially, 
but it has also limited their ability to contribute their expertise 
across the cleanup efforts. See appendix II for more detailed 
information on agency expenditures and amounts reimbursed by mine 
operators at each of the 16 mines known to have selenium contamination. 

The approximately $19 million in expenditures for agency oversight 
efforts does not include the cost of assessment and remediation work 
the mine operators have conducted, either under the terms of 
settlement agreements or independently, according to agency officials. 
For example, the operators' costs for developing and implementing 
plans for water quality sampling or constructing a diversion pipeline 
are not included in the agencies' expenditure total. We requested 
documentary evidence to support the costs incurred by the mine 
operators but they did not provide these documents to us. Anecdotal 
information suggests that the mine operators have spent a significant 
sum on assessment and remediation work. For example, one mine operator 
representative told us his company spent $12 million on assessment and 
remediation actions taken under settlement agreements from 2003 
through 2011 at its three mines, and another mine operator reported it 
had spent about $10 million on cleanup-related work at four of its 
mines. Nevertheless, without the mine operators' expenditure 
information, we cannot be assured of the accuracy of the amounts the 
mine operators reported spending on assessment and remediation work. 

Agencies Have Not Developed Cost Estimates for Future Cleanup Actions 
Because Site Assessment Efforts Have Not Been Completed: 

According to EPA and Forest Service officials, they have not developed 
cost estimates for future cleanup actions at any of the 16 
contaminated phosphate mines because agencies are still conducting 
assessment work, and these officials will not determine cleanup 
actions until they have completed this work. However, information from 
phosphate and hardrock mines provides an indication of potential 
future costs that are likely, and which, according to informal 
estimates provided by EPA officials, could total hundreds of millions 
of dollars, in part because several of the mines are likely to require 
long-term remedial actions that are typically costly to implement. 

According to EPA and Forest Service officials, the following two 
cleanup actions, if required, would significantly influence cleanup 
costs at phosphate mines in southeastern Idaho: 

* Long-term water collection and treatment. According to EPA 
officials, the need for long-term water collection and treatment can 
be the most costly remedial action at a mine site, primarily because 
water collection and treatment can require ongoing activity for more 
than 100 years. Costs for this type of action include design; the 
initial capital investment in infrastructure for collection, storage, 
and treatment of the water; ongoing infrastructure upgrades and 
replacements; and personnel costs for continual operation. Such costs 
can be significant; for example, at another cleanup site in Region 10, 
the Holden hardrock mine in Washington State, EPA and the Forest 
Service have estimated the cost for long-term water treatment will be 
about $47 million. EPA officials told us that, based on information 
gathered to date, at least five phosphate mines may require long-term 
water treatment. 

* Waste rock covers. According to EPA officials, the cost of 
consolidating and capping large volumes of waste rock materials can 
vary depending on the number of acres needing coverage, the type of 
cover required, and the topography of the area to be covered. For 
example, the Forest Service recently approved a cover, consisting of a 
clay layer, a synthetic membrane, and soil, that will be implemented 
as part of a non-time-critical removal action at one phosphate mine 
and is estimated to cost about $17 million to cover roughly 100 acres 
of a cross-valley fill. A synthetic cover recently required as part of 
the reclamation plan at a new mine is estimated to cost about $29 
million to cover nearly 400 acres.[Footnote 42] According to a Forest 
Service official, long-term monitoring and maintenance can further 
increase the costs of these covers. 

Based on our review, several other factors add to the uncertainty 
about the level of cleanup that will be required in the area, and the 
amount and allocation of cleanup costs. 

* The selenium water quality standard is expected to change. According 
to EPA officials, final remedial actions under CERCLA will be based, 
in part, on the state's water quality standard for selenium in rivers 
and streams. This standard is based on a national recommendation 
issued by EPA, which is in the process of updating its recommendation 
to better protect fish and other aquatic organisms. After the new 
recommendation is issued, according to EPA officials, Idaho will 
likely adopt a new state standard, using the recommendation as a 
basis. If the new standard is more stringent than the current 
standard, the level of cleanup required may change as well, increasing 
the costs associated with cleanup.[Footnote 43] 

* A total maximum daily load for selenium has not yet been 
established. Because the streams in the Blackfoot River watershed--the 
main watershed affected by selenium contamination in Idaho--have been 
listed as impaired for selenium under section 303(d) of the Clean 
Water Act, the state is required to establish a TMDL for selenium for 
those waters. According to IDEQ and EPA officials, the state has 
delayed developing the TMDL, in part because the ongoing CERCLA 
assessment process is yielding valuable information about the sources 
of selenium in the watershed and how these sources interact with one 
another--and this information will be critical to helping the state 
establish a TMDL for selenium. Once a TMDL is established, it may 
inform pollution limits that are established for the mines that 
directly discharge selenium to the watershed. According to EPA 
officials, a TMDL would also likely help provide a road map for 
handling the selenium contamination at the remaining mines where 
CERCLA actions have not yet been initiated. 

* The government's share of future cleanup costs is not yet 
determined. One outcome of the lawsuit filed against the government by 
a mine operator under CERCLA is that according to the court decision, 
the government is potentially liable for costs associated with 
environmental contamination at the four mine sites at issue in the 
litigation. However, the court has not determined the government's 
share of the cleanup costs. As of April 2012 the government and the 
mine operator were negotiating a proposed settlement regarding 
allocation of past and future costs that will be final once approved 
by the court. Because of the court's decision holding the government 
potentially liable, agency officials told us other mine operators may 
also seek to have the government share cleanup costs with them. If 
they are successful, the agency officials said the government's costs 
could ultimately be significant. 

Agencies Hold Millions of Dollars in Financial Assurances for Site 
Reclamation and Assessment, but Some Are in the Form of Potentially 
Risky Corporate Guarantees: 

Federal agencies reported holding financial assurances for phosphate 
mine operations in southeastern Idaho for about $91 million to cover 
(1) mine reclamation and related activities and (2) site assessment 
and limited remediation activities negotiated under CERCLA settlement 
agreements. Specifically, the agencies reported holding financial 
assurances valued at approximately $80 million to cover mine 
reclamation and related activities and $11.4 million to cover site 
assessment and limited remediation activities negotiated under CERCLA 
settlement agreements. About $4.5 million of this amount was in the 
form of corporate guarantees, a type of financial assurance that both 
BLM and EPA have stated is potentially risky because corporate 
guarantees are not covered by a specific financial asset. The agencies 
have not entered into settlement agreements or established financial 
assurances to cover future cleanup costs because, as described in the 
prior section, they have not determined the actions that will be 
needed or the associated costs. 

BLM and the Forest Service Reported Holding About $80 Million in 
Financial Assurances for Reclamation-Related Activities: 

As of March 2012, BLM reported holding about $75.2 million in 
reclamation financial assurances for 13 of the 18 phosphate mines 
where federal agencies are overseeing mining operations or cleanup 
activities.[Footnote 44] (The five mines without BLM financial 
assurances are all inactive and are being assessed for cleanup under 
CERCLA.) Over 95 percent of this amount--almost $72 million--is 
associated with the five currently active mines, and nearly all of 
that amount--over $66 million--is associated with the two most 
recently approved active mines, the Blackfoot Bridge and Smoky Canyon 
mines. BLM also reported holding an additional $127,200 in financial 
assurances for eight leases where the operator is engaging in 
exploratory activities but where mine operations have not yet 
commenced and other unmined sites. Figure 8 shows the amount and 
composition of BLM-held reclamation financial assurances for phosphate 
mines in Idaho, including the amounts associated with each of the five 
active mines. 

Figure 8: Amount and Composition of BLM-Held Reclamation Financial 
Assurances, for Phosphate Mines in Idaho: 

[Refer to PDF for image: pie-chart and sub-chart] 

Active mines: $71,918,131 (95.6%); 
Inactive mines: $3,196,864 (4%); 
Unmined/exploratory sites: $127,200 (0.4%). 

Of the active mines: 
Smoky Canyon: $44,927,698 (62%); 
Blackfoot Bridge: $21,825,000 (30%); 
Rasmussen Ridge: $3,454,000 (5%); 
South Rasmussen: $1,183,433 (2%); 
Dry Valley: $528,000 (1%). 

Source: GAO analysis of BLM data. 

[End of figure] 

In addition, as of March 2012, the Forest Service reported holding 
$5.2 million in financial assurances for reclamation of mining-related 
activities associated with six special-use permits. These financial 
assurances are for reclamation of disturbed surfaces that are 
associated with, but not physically located on, federal leases on 
Forest Service land,[Footnote 45] through activities such as removing 
access roads and auxiliary structures and restoring forest land. Of 
this total, about 54 percent--or $2.8 million--is for the Smoky Canyon 
mine. 

The Forest Service and EPA Hold $11.4 Million in CERCLA Financial 
Assurances for Site Assessment and Limited Remediation Activities, but 
Some EPA Financial Assurances May be Risky: 

As of March 2012, there were 6 mines undergoing CERCLA assessment for 
which the Forest Service and EPA reported holding financial assurances 
valued at $11.4 million. Such assurances are intended to help ensure 
mine operators' performance under CERCLA settlement agreements. For 
one of these mines, the Forest Service holds a financial assurance, 
which is valued at about $3.9 million and covers both a CERCLA 
assessment and previous remediation work at that mine to construct a 
water diversion pipeline, according to agency officials. For the other 
five mine sites, EPA holds $7.5 million in financial assurances to 
cover CERCLA assessments, according to agency officials. 

About $4.5 million of the $7.5 million in financial assurances that 
EPA holds for three of the five mines is in the form of corporate 
guarantees. Corporate guarantees are promises by mine operators, 
sometimes accompanied by a test of financial stability, to pay 
remediation costs, but these guarantees do not require that funds be 
set aside by the operators to pay such costs. As a result, for these 
three sites, EPA does not hold a financial asset that it could use to 
pay for the work specified in the settlement agreement should the 
operator fail to do so. EPA officials noted, however, that these 
guarantees cover only the investigation and planning stage of the 
process, and that the operator at these mines has already successfully 
completed a significant portion of the activities under an earlier 
removal settlement agreement. Nevertheless, EPA Region 10 has 
acknowledged the risk associated with corporate guarantees. In its 
2009 Region 10 Mining Financial Assurance Strategy,[Footnote 46] the 
region noted that the form of a financial assurance is as important as 
the amount and stated that corporate guarantees are not a secure 
mechanism should a company go bankrupt or have financial difficulties. 
As an example, the region cited a corporate guarantee that it had 
accepted from an operator of a mine smelter site in Washington State. 
When EPA requested a more secure type of financial assurance, the 
operator filed for bankruptcy, leaving the federal government with 
additional responsibility for the cleanup costs at that site. 
Recognizing the inherent risks associated with corporate guarantees, 
the region stated in its strategy that it would no longer accept them 
as part of CERCLA consent decrees or settlement agreements related to 
cleanup actions for mining operations. 

Such concerns about corporate guarantees have been raised previously 
by others. In 2000, for example, BLM stopped accepting corporate 
guarantees for new mining operations, stating that they are less 
secure than other forms of financial assurance, particularly in light 
of fluctuating commodity prices and the potential for an operator to 
declare bankruptcy.[Footnote 47] Moreover, as we reported in August 
2005, EPA has stated that corporate guarantees offer EPA minimal long-
term assurance that a company with environmental liability will be 
able to fulfill its financial obligations.[Footnote 48] As a result, 
EPA and taxpayers may be exposed to significant financial risk, 
especially at mining sites where one or a few parties are liable for 
cleanups--as is the case for phosphate mining in Idaho. We also noted 
in our August 2005 report that EPA's selection of a reliable financial 
assurance mechanism is particularly important given the potential for 
large liabilities stemming from mining sites. EPA does not have 
regulations on the use of corporate guarantees as financial assurances 
under CERCLA, however. EPA is considering promulgating regulations 
related to financial assurances for mining and other industries and 
has solicited public comments on the risks associated with corporate 
guarantees and the experiences of regulators who have attempted to use 
them. EPA expects to publish a proposed rule outlining its approach to 
financial assurances later in 2013, according to EPA officials. 

Conclusions: 

Selenium contamination from phosphate mining has been a concern in 
southeastern Idaho for over 15 years. Federal agencies have taken 
steps to strengthen their oversight of phosphate mining on federal 
land since selenium contamination was discovered in 1996 by requiring 
more detailed environmental assessments and reclamation plans, 
requiring financial assurances that provide more coverage, and hiring 
additional staff. However, addressing the contamination has been a 
lengthy undertaking with many factors contributing to the length of 
this process, including the complexity and scale of the sites, 
sometimes-difficult relations with mine operators, an initial lack of 
expertise and resources on the part of the Forest Service, and the 
decision to switch to a more comprehensive cleanup approach. 
Nevertheless, the fact remains that after years of study and millions 
of dollars spent, the agencies and mine operators are still years away 
from fully understanding the extent of contamination in the area and 
many more years away from completing actual mine cleanup. 

The agencies have taken important steps aimed at preventing future 
contamination, including BLM's use of more rigorous oversight 
procedures when considering or approving new mines, but gaps in agency 
policies and coordination may result in missed opportunities for the 
agencies to fully implement the approaches they have developed. For 
example, while BLM's practice of setting financial assurances to cover 
the estimated full cost of reclamation for new phosphate mines may 
better protect the government from future cleanup liability, the 
agency has not documented this practice in official agency policy--
lessening the certainty that the practice will be consistently 
followed in the future. Likewise, the lack of established coordination 
practices between BLM and the Forest Service may result in cases where 
BLM may not give full or timely consideration to the Forest Service's 
input when establishing mine lease terms and conditions or setting 
financial assurance amounts for mines in southeastern Idaho. As a 
result, BLM in some cases may be basing its decisions on incomplete 
information. Additionally, while BLM has attempted to leverage its 
limited resources by requiring mine operators to pay for contractors 
to help oversee reclamation work, it does not have mechanisms in place 
to fully oversee such activities and could not identify its 
authorities for directing and overseeing such arrangements. And 
finally, EPA's acceptance of financial assurances in the form of 
corporate guarantees related to assessment (and, potentially, cleanup) 
activities leaves the federal government at increased risk of 
shouldering more of the financial burden for these tasks should the 
mine operators fail to carry them out or declare bankruptcy. In its 
current efforts to draft regulations for financial assurances under 
CERCLA, EPA has stated that it plans to assess the risks associated 
with different forms of financial assurances, including corporate 
guarantees, and the experiences of regulators to assess the adequacy 
of various financial mechanisms--which we believe is an important step 
in ensuring that the financial assurances accepted by the federal 
government are adequately reducing the government's exposure for 
cleanup costs. 

Recommendations for Executive Action: 

To ensure effective oversight of phosphate-mining operations and 
reclamation and cleanup, we are making three recommendations to the 
Secretary of the Interior and one to the Administrator of EPA. 
Specifically, we recommend that the Secretary of the Interior direct 
the Director of BLM to: 

* document the practice of requiring financial assurances to cover the 
estimated full cost of reclamation in BLM's official agency policy; 

* work with the Chief of the Forest Service to develop a coordinated 
process for (1) proposing and evaluating lease terms and conditions 
for phosphate mines in southeastern Idaho, and (2) sharing information 
on the amount and adequacy of financial assurances to provide better 
coordination between federal agencies regarding phosphate mine 
oversight; and: 

* analyze BLM's authorities for directing operators to enter into 
third-party contracting mechanisms. If BLM confirms that it has the 
authority, it should develop a policy document to ensure consistent 
implementation, including a requirement that BLM reach written 
agreement with operators regarding arrangements for third-party 
contracting. Should BLM determine that it does not have the authority 
to use such mechanisms--and should it wish to continue the practice--
it should seek appropriate legislation for doing so. 

In addition, we recommend that the Administrator of EPA ensure that 
the agency complete its plan to assess whether corporate guarantees 
are an adequate financial mechanism, including giving due 
consideration to the experience of EPA Region 10 and BLM in using such 
assurances. If EPA determines that corporate guarantees are not an 
appropriate form of financial assurance, then their use should be 
prohibited in the financial assurance regulations that the agency 
expects to promulgate for the mining industry. 

Agency Comments and Our Evaluation: 

We provided EPA and the Departments of Agriculture, Defense, and the 
Interior with a draft of this report for their review and comment. 
EPA, the Forest Service (responding on behalf of the Department of 
Agriculture), and Interior generally agreed with our findings and 
recommendations, and their written comments are reproduced in 
appendixes III, IV, and V respectively. Each of these agencies also 
provided technical comments which we incorporated as appropriate. The 
Department of Defense declined to provide comments. 

While the Department of the Interior generally agreed with our 
findings and recommendations, it expressed concern that our discussion 
on BLM's coordination with the Forest Service on leasing activities 
could be misleading. Interior noted that in some instances BLM does 
not accept the Forest Service's recommended changes to existing 
phosphate leases because of differences in professional judgment, not 
because of a lack of coordination. Furthermore, Interior noted that 
BLM and the Forest Service have been discussing the Forest Service's 
proposed revisions to the standard lease terms and conditions for new 
leases to further protect the government from potential liability 
associated with selenium contamination, but that such discussions are 
necessarily detailed and time consuming, and the lack of agreement to 
date does not constitute a lack of coordination. In this context, the 
Forest Service also noted that it places great value on its 
collaborative relationship with BLM, and is committed to working with 
BLM to improve coordination and information sharing. We have made 
changes to the report to provide additional context and clarification 
regarding the agencies' coordination efforts. Nevertheless, while we 
acknowledge that BLM and the Forest Service have begun efforts to 
improve their coordination on these issues, we continue to believe 
that they would benefit from a clearer process for coordinating in a 
timely manner and elevating issues to the headquarters level when 
necessary. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Secretaries of Agriculture, Defense, and the Interior; the 
Administrator of the Environmental Protection Agency; the Chief of the 
Forest Service; the Assistant Secretary for Indian Affairs; the 
Directors of the Bureau of Land Management and Fish and Wildlife 
Service; appropriate congressional committees; and other interested 
parties. In addition, the report will be available at no charge on the 
GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-3841 or mittala@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. Key contributors to this report are 
listed in appendix VI. 

Signed by: 

Anu K. Mittal: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Scope and Methodology: 

This appendix details the methods we used to examine the issues 
surrounding the oversight and cleanup of phosphate mines on federal 
lands. Specifically, we were asked to provide information on the (1) 
extent to which federal agencies' oversight of phosphate operations 
has changed since the discovery of selenium contamination in Idaho in 
1996, and whether those changes appear sufficient to help the agencies 
prevent future contamination; (2) actions that federal agencies and 
mine operators have taken to assess and remediate contamination from 
phosphate mining on federal land, amounts they have spent on these 
actions, and estimated remaining costs; and (3) types and amounts of 
financial assurances in place for phosphate mining operations and the 
extent to which these assurances are likely to cover future cleanup 
costs. 

For all objectives, we focused our report on agencies' and mine 
operators' activities in Idaho for two primary reasons. First, 
phosphate-mining operations on federal land are generally limited to 
the Western Phosphate Field, and all but one of these operations are 
located in Idaho. Second, the occurrence of selenium contamination 
resulting from phosphate-mining operations on federal lands is 
currently limited to Idaho; such contamination has not been discovered 
in neighboring states containing portions of the Western Phosphate 
Field. 

To address the first objective, we reviewed federal laws and 
regulations relevant to the federal agencies' oversight of phosphate-
mining operations on federal land in Idaho, including the National 
Environmental Policy Act (NEPA), the Mineral Leasing Act, the Clean 
Water Act, and the Endangered Species Act. In addition, we reviewed 
relevant agency documents and reports created both before and after 
1996. These include Bureau of Land Management (BLM) and Forest Service 
land-use plans; BLM records of decision for new mine plans, and 
associated NEPA documents; BLM instructional memorandums; BLM lease 
and bond abstracts; and correspondence between BLM and the Forest 
Service regarding lease stipulations. We interviewed officials with 
the Bureau of Indian Affairs (BIA), BLM, the Fish and Wildlife Service 
(FWS), and the Office of Natural Resources Revenue within Interior; 
the Forest Service; the Environmental Protection Agency (EPA); the 
Army Corps of Engineers; and the Idaho Department of Environmental 
Quality (IDEQ). We also interviewed representatives of the three Idaho 
phosphate mine operators and visited the three phosphate mines 
operating as of June 2011, and twelve of the sixteen mines where 
selenium contamination has been detected. To obtain additional 
perspectives beyond those offered by agency officials and mine 
operators, we also interviewed representatives from the Shoshone-
Bannock Tribes, on whose reservation one of the largest phosphate 
mines is located, and from regionally-focused environmental advocacy 
groups, including the Idaho Conservation League and the Greater 
Yellowstone Coalition. 

To address the second objective, we interviewed officials from BIA, 
BLM, FWS, the Forest Service, EPA, IDEQ, the mine operators, and the 
Shoshone-Bannock Tribes, and reviewed documents and reports on the 
status of assessment and cleanup efforts and related settlement 
agreements under the Comprehensive Environmental Response, 
Compensation, and Liability Act (CERCLA). To determine the amount 
federal and state agencies have spent on these actions and the amount 
each agency received in reimbursement from mine operators, we obtained 
expenditure and collections data from each agency where available from 
fiscal year 2001 through fiscal year 2011. Specifically, for EPA, we 
collected data from EPA's Superfund Cost Recovery Package Imaging and 
On-Line System, which included EPA's expenditures at each mine, as 
well as information on funds received from mine operators. For BLM, we 
received data from BLM's Management Information System for fiscal 
years 2001-2008 and from Interior's Financial and Business Management 
System for fiscal years 2009-2011. Because BLM's data from these 
systems applied to cleanup work at Idaho phosphate mines generally, we 
also collected mine-specific expenditure information where available, 
including from the cost documentation packages that BLM submitted to 
the mine operators for six mines as part of settlement agreements to 
which BLM was a party. We received information on funds BLM received 
from mine operators from Interior's Federal Financial System. For the 
Forest Service, we received data from the Forest Service's Foundation 
Financial Information System, which included the Forest Service's 
expenditures at each mine and funds received from mine operators. For 
FWS, we collected data from cost documentation packages submitted to 
the mine operators for five mines and the areawide investigation where 
FWS was a party to a settlement agreement, and from the Federal 
Financial System for additional expenditures as well as funds received 
from mine operators. For BIA, officials estimated their annual 
expenditures based on records kept internally showing hours worked on 
cleanup at phosphate mines in Idaho. For IDEQ, we received data from 
the department's General Online Reporting System, which included 
IDEQ's costs as well as funds received from mine operators. 

To evaluate the reliability of these data and determine their 
limitations, we reviewed the data obtained from each agency's system 
as well as the cost documentation packages generated by the agencies 
and sent to mine operators. For each of these data sources, we 
analyzed related documentation, examined the data to identify obvious 
errors or inconsistencies, and compared the data we received with 
other published data sources, where possible. We also interviewed 
officials from each agency to obtain information on the internal 
controls of their data systems. On the basis of our evaluation of 
these sources, we concluded that the expenditure data we collected and 
analyzed were sufficiently reliable for our purposes. 

For all agencies, at least some of the expenditures they reported 
included expenses paid to cover indirect costs associated with work 
performed by the agencies, which is in accordance with the terms of 
many of the settlement agreements. However, these indirect costs were 
not included in all of the expenditure data shared with us. Therefore, 
in order to report similar types of expenditures across agencies, we 
applied agency-specific historic annual indirect cost rates to those 
expenditures we received where it was not already included. In order 
to determine costs in constant 2012 dollars, we adjusted the amounts 
reported to us for inflation by applying the fiscal year chain-
weighted gross domestic product price index, with fiscal year 2012 as 
the base year. 

To determine estimated remaining costs for future cleanup actions at 
the sites, we interviewed EPA, Forest Service, and BLM officials, and 
reviewed reports from phosphate mines where CERCLA removal actions 
have occurred or have been approved and mines with recently approved 
reclamation plans that include measures to prevent selenium 
contamination. EPA and Forest Service officials provided information 
regarding likely cost drivers for cleanup at phosphate mines, and, to 
provide context, EPA officials identified hardrock mines in the region 
with similar general characteristics where these cost drivers are 
expected to be applied. 

To address the third objective, we first reviewed BLM, Forest Service, 
and EPA regulations; BLM and Forest Service manuals; and BLM 
memorandums to obtain agency financial assurance standards and 
procedures. We then obtained financial assurance data from records 
maintained by Idaho-based officials with BLM, the Forest Service, and 
EPA, which included data on bonds held by Idaho state agencies for 
operations on federal land. We also interviewed officials from these 
agencies to obtain insights into agency financial assurance practices 
and the extent to which current financial assurances are sufficient to 
cover future cleanup actions. We evaluated the reliability of BLM 
financial assurance data by interviewing BLM officials and 
corroborating the data maintained by BLM officials in Idaho with data 
maintained in BLM's centralized database, known as LR2000. We 
evaluated the reliability of Forest Service and EPA data by 
interviewing agency officials, examining agency records, and cross-
checking these data to the bonds amounts listed in CERCLA settlement 
agreements. We determined that the financial assurance data from BLM, 
the Forest Service, and EPA were sufficiently reliable for the purpose 
of determining the types and amounts of financial assurances in place 
for phosphate mining operations in Idaho. 

We conducted this performance audit from May 2011 through April 2012 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Information on 18 Phosphate Mines Overseen by Federal 
Agencies in Southeastern Idaho, and CERCLA Cleanup Expenditures: 

This appendix provides information on the acres disturbed, CERCLA lead 
agency, and surface land ownership at 18 phosphate mines in 
southeastern Idaho (table 3), and the agency assessment and cleanup 
expenditures at the 16 of those mines with selenium contamination 
(table 4). 

Table 3: Acres Disturbed, CERCLA Lead Agency, and Surface Land 
Ownership at 18 Phosphate Mines in Southeastern Idaho: 

Mine: Ballard; 
Acres disturbed[A]: 640; 
CERCLA lead agency: EPA; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Empty]; 
Tribal: [Empty]; 
State: [Check]; 
Private: [Check]. 

Mine: Blackfoot Bridge[B]; 
Acres disturbed[A]: 90; 
CERCLA lead agency: [Empty]; 
Surface Land Ownership: 
BLM: [Check]; 
Forest Service: [Empty]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Mine: Champ; 
Acres disturbed[A]: 390; 
CERCLA lead agency: Forest Service; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Empty]. 

Mine: Conda; 
Acres disturbed[A]: 1,510; 
CERCLA lead agency: EPA; 
Surface Land Ownership: 
BLM: [Check]; 
Forest Service: [Empty]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Mine: Diamond Gulch; 
Acres disturbed[A]: 30; 
CERCLA lead agency: Forest Service; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Empty]. 

Mine: Dry Valley; 
Acres disturbed[A]: 340; 
CERCLA lead agency: IDEQ; 
Surface Land Ownership: 
BLM: [Check]; 
Forest Service: [Empty]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Mine: Dry Valley, South Extension[B]; 
Acres disturbed[A]: 540; 
CERCLA lead agency: [Empty]; 
Surface Land Ownership: 
BLM: [Check]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Check]; 
Private: [Check]. 

Mine: Enoch Valley; 
Acres disturbed[A]: 580; 
CERCLA lead agency: EPA; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Mine: Gay; 
Acres disturbed[A]: 4,740; 
CERCLA lead agency: EPA; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Empty]; 
Tribal: [Check]; 
State: [Empty]; 
Private: [Empty]. 

Mine: Georgetown Canyon; 
Acres disturbed[A]: 250; 
CERCLA lead agency: IDEQ; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Mine: Henry; 
Acres disturbed[A]: 1,070; 
CERCLA lead agency: EPA; 
Surface Land Ownership: 
BLM: [Check]; 
Forest Service: [Empty]; 
Tribal: [Empty]; 
State: [Check]; 
Private: [Check]. 

Mine: Mountain Fuel; 
Acres disturbed[A]: 720; 
CERCLA lead agency: Forest Service; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Empty]. 

Mine: North Maybe; 
Acres disturbed[A]: 600; 
CERCLA lead agency: Forest Service; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Mine: Rasmussen Ridge[B]; 
Acres disturbed[A]: 760; 
CERCLA lead agency: [Empty]; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Check]; 
Private: [Empty]. 

Mine: Smoky Canyon; 
Acres disturbed[A]: 2,510; 
CERCLA lead agency: Forest Service; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Mine: South Maybe Canyon; 
Acres disturbed[A]: 600; 
CERCLA lead agency: Forest Service; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Empty]. 

Mine: South Rasmussen[B]; 
Acres disturbed[A]: 390; 
CERCLA lead agency: [Empty]; 
Surface Land Ownership: 
BLM: [Empty]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Check]; 
Private: [Empty]. 

Mine: Wooley Valley; 
Acres disturbed[A]: 810; 
CERCLA lead agency: Forest Service; 
Surface Land Ownership: 
BLM: [Check]; 
Forest Service: [Check]; 
Tribal: [Empty]; 
State: [Empty]; 
Private: [Check]. 

Source: BLM, Forest Service, and IDEQ. 

[A] Acres disturbed represent estimates as of December 31, 2011, and 
include all acreages that have also been reclaimed. 

[B] This is an active mine that is not being assessed under CERCLA. 

[End of table] 

Table 4: Assessment and Cleanup Expenditures at the 16 Contaminated 
Phosphate Mines in Southeastern Idaho, from Fiscal Years 2001 through 
2011: 

Dollars in 2012 constant dollars: 

Mine: Ballard/Enoch Valley/Henry[C]; 
FS: $377,000; 
IDEQ: $405,000; 
EPA: $1,496,000; 
BLM: $11,000; 
BIA: $0; 
FWS: $20,000; 
Total agency expenditures[A]: $2,310,000; 
Total reimbursed by mine operators[B]: $1,806,000. 

Mine: North Maybe; 
FS: $1,735,000; 
IDEQ: $88,000; 
EPA: $85,000; 
BLM: $80,000; 
BIA: $0; 
FWS: $32,000; 
Total agency expenditures[A]: $2,019,000; 
Total reimbursed by mine operators[B]: $1,671,000. 

Mine: Smoky Canyon; 
FS: $1,263,000; 
IDEQ: $168,000; 
EPA: $335,000; 
BLM: $39,000; 
BIA: $0; 
FWS: $57,000; 
Total agency expenditures[A]: $1,862,000; 
Total reimbursed by mine operators[B]: $1,094,000. 

Mine: Conda; 
FS: $0; 
IDEQ: $427,000; 
EPA: $902,000; 
BLM: $65,000; 
BIA: $0; 
FWS: $37,000; 
Total agency expenditures[A]: $1,432,000; 
Total reimbursed by mine operators[B]: $1,321,000. 

Mine: Gay; 
FS: $0; 
IDEQ: $0; 
EPA: $224,000; 
BLM: $37,000; 
BIA: $380,000; 
FWS: $10,000; 
Total agency expenditures[A]: $650,000; 
Total reimbursed by mine operators[B]: $179,000. 

Mine: South Maybe Canyon; 
FS: $336,000; 
IDEQ: $3,000; 
EPA: $0; 
BLM: $13,000; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $352,000; 
Total reimbursed by mine operators[B]: $113,000. 

Mine: Wooley Valley/Diamond Gulch[C]; 
FS: $172,000; 
IDEQ: $37,000; 
EPA: $1,000; 
BLM: $0; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $210,000; 
Total reimbursed by mine operators[B]: $0. 

Mine: Rasmussen Ridge; 
FS: $85,000; 
IDEQ: $0; 
EPA: $0; 
BLM: $77,000; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $162,000; 
Total reimbursed by mine operators[B]: $0. 

Mine: Champ/Mountain Fuel[C]; 
FS: $122,000; 
IDEQ: $1,000; 
EPA: $0; 
BLM: $7,000; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $131,000; 
Total reimbursed by mine operators[B]: $8,000. 

Mine: South Rasmussen; 
FS: $0; 
IDEQ: $40,000; 
EPA: $0; 
BLM: $0; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $40,000; 
Total reimbursed by mine operators[B]: $0. 

Mine: Georgetown Canyon; 
FS: $2,000; 
IDEQ: $15,000; 
EPA: $0; 
BLM: $0; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $18,000; 
Total reimbursed by mine operators[B]: $0. 

Mine: Dry Valley; 
FS: $4,000; 
IDEQ: $0; 
EPA: $0; 
BLM: $0; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $4,000; 
Total reimbursed by mine operators[B]: $0. 

Activity: 

Mine: Project management[D]; 
FS: $4,410,000; 
IDEQ: $0; 
EPA: $319,000; 
BLM: $2,178,000; 
BIA: $0; 
FWS: $0; 
Total agency expenditures[A]: $6,908,000; 
Total reimbursed by mine operators[B]: $0. 

Mine: Areawide investigation; 
FS: $0; 
IDEQ: $2,630,000; 
EPA: $0; 
BLM: $0; 
BIA: $551,000; 
FWS: $38,000; 
Total agency expenditures[A]: $3,179,000; 
Total reimbursed by mine operators[B]: $2,349,000. 

Mine: Total agency expenditures; 
FS: $8,506,000; 
IDEQ: $3,815,000; 
EPA: $3,362,000; 
BLM: $2,507,000; 
BIA: $891,000; 
FWS: $195,000; 
Total agency expenditures[A]: $19,276,000. 

Mine: Total reimbursed by mine operators; 
FS: $2,166,000; 
IDEQ: $3,388,000; 
EPA: $2,693,000; 
BLM: $143,000; 
BIA: $0; 
FWS: $152,000; 
Total reimbursed by mine operators[B]: $8,542,000. 

Source: GAO analysis of agency data. 

Notes: Numbers may not total because of rounding. 

[A] Expenditures and reimbursements include agency-specific 
administrative, or indirect, costs. 

[B] In some cases, mine operators have contributed additional amounts 
that the agencies expect to use to defray future costs. Because the 
agencies have not yet expended these amounts, this table does not 
reflect these amounts. 

[C] Expenditures for these mines were reported as combined by one or 
more agencies. 

[D] Project management includes activities that spanned multiple 
mines--for example, planning and consulting over the overall cleanup 
process in the area. For BLM, this category also includes all mine-
specific work that was not covered by a cost recovery agreement with a 
mine operator. 

[End of table] 

[End of section] 

Appendix III: Comments from EPA: 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY: 
OFFICE OF SOLID WASTE ANd EMERGENCY RESPONSE: 
WASHINGTON, D.C. 20460: 

April 20, 2012:  

Ms. Anu K. Mittal, Director: 
Natural Resources and Environment: 
Government Accountability Office: 
Washington, D.C. 20548: 

Dear Ms. Mittal: 

Thank you for the opportunity to comment on the draft report entitled 
"Phosphate Mining: Oversight Has Strengthened, but Financial 
Assurances and Coordination Still Need Improvement” (GAO-12-505). The 
draft report presents one recommendation to the U.S. Environmental 
Protection Agency (EPA) Administrator and three recommendations to the
Secretary of the Interior. We have responded below to the 
recommendation presented to the EPA. Other specific comments on the 
draft report are included in the Enclosure. 

We appreciate GAO incorporating most of our previous comments on the 
Statement of Facts, which preceded the development of this draft 
report and for the collegial working relationship and dialogue with 
our staff at the EPA. 

GAO Recommendation: 

GAO recommends that "the Administrator of EPA ensure that the agency 
complete its plan to assess whether corporate guarantees are an 
adequate financial mechanism, including giving due consideration to 
the experience of EPA Region 10 and BLM in using such assurances. If 
it determines that they are not an appropriate form of financial 
assurance, then their use should be prohibited in the financial 
assurance regulations that the agency expects to promulgate for the 
mining industry." 

EPA Response: 

EPA agrees with GAO's recommendation. As was noted in GAO's draft 
report, EPA is currently developing proposed regulations under Section 
108(b) of the Comprehensive Environmental Response, Compensation and 
Liability Act (CERCLA) that would require financial responsibility for 
classes of facilities within the hardrock mining industry. 

Section 108(b)(2) of CERCLA includes a guarantee mechanism and 
qualification as a self insurer in a list of mechanisms that may be 
used to establish financial responsibility. That section states:  

...Financial responsibility may be established by any one, or any 
combination, of the following: insurance, guarantee, surety bond, 
letter of credit, or qualification as a self-insurer...  

Thus, as part of development of the proposed regulations, EPA is 
evaluating the use of a financial test by an owner or operator and by 
a corporate guarantor. EPA is considering its experience in 
implementing financial responsibility requirements, including the 
financial test and corporate guarantee, as part of that evaluation. In 
addition, EPA will consult with federal land managers, including BLM, 
as the Agency develops the proposed rule. The Agency will consider a 
range of factors in its evaluation of financial responsibility 
mechanisms, including corporate guarantees. EPA will include an 
evaluation of the potential risks and benefits to the federal 
government associated with each financial responsibility mechanism, 
including the financial test.  

In closing, we believe that there is substantial useful information in 
this report. Please feel free to contact me or your staff may contact 
Shahid Mahmud in EPA's Office of Superfund Remediation and Technology 
Innovation, at 703-6034789 with additional questions. 

Sincerely,  

Signed by: 

Mathy Stanislaus: 
Assistant Administrator: 
 
Enclosure:  

cc: Cynthia Giles, OECA: 
Barry Breen, OSWER: 
Lisa Feldt, OSWER: 
Susan Bromm, OFA: 
Dan Opalski, EPA Region 10: 
Suzanne Rudzinski, OSWER/ORCR: 
James Woolford, OSWER/OSRTI: 
Bobbie Trent, OSWER: 
Johnsie Webster, OSWER:  

[End of section] 

Appendix IV: Comments from the Department of Agriculture: 

USDA 
United States Department of Agriculture: 
Forest Service: 
Washington Office: 
1400 Independence Avenue, SW
Washington, DC 20250: 

File Code: 1420: 

Date: April 6, 2012: 

Ms. Anu K. Mittal: 
Director, Natural Resources and Environment: 
U.S. Government Accountability Office: 
441 G. Street, N.W. 
Washington, DC 20548: 

Dear Ms. Mittal: 

Thank you for the opportunity to review and provide comments on the 
draft U.S. Government Accountability Office (GAO) Report on "Phosphate 
Mining: Oversight Has Strengthened, but Financial Assurances and 
Coordination Still Need Improvement" (GA0-12-505). The Forest Service 
has reviewed the report and generally agrees with its findings and 
recommendations. 

The Forest Service is committed to working with the Bureau of Land 
Management (BLM) to improve coordination related to proposing and 
evaluating lease terms and conditions, and sharing information on the 
amount and adequacy of financial assurances. Such coordination was 
recently initiated by a conference call between the two agencies at 
the Washington Office level with additional coordination planned 
relative to phosphate lease terms. The report and its recommendations 
also bring to mind that it is a good time to closely review and update 
if needed the Memorandum of Understanding that the FS has with the BLM. 

The Forest Service places great value on our collaborative 
relationship with the BLM and our joint roles in providing for and 
producing mineral resources for the needs of the American public. We 
arc committed to improve our efforts and coordination with BLM to 
limit any future liabilities related to mining activities. 

Thank you again for the opportunity to review your draft report. If 
you have any questions, please contact Thelma Strong, Acting Chief 
Financial Officer, at 202-205-1321 or tstrong@fs.fed.us. 

Sincerely, 

Signed by: 

Mary Wagner, for: 
Thomas L. Tidwell: 
Chief: 

[End of section] 

Appendix V: Comments from the Department of the Interior: 

United States Department of the Interior: 
Office of the Secretary: 
Washington, DC 20240: 

April 20, 2012: 

Ms. Anu K. Mittal: 
Director, Natural Resources and Environment: 
U. S. Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548: 

Dear Ms. Mittal: 

Thank you for the opportunity to review and comment on the Government 
Accountability Office (GAO) draft report entitled, Phosphate Mining: 
Oversight Has Strengthened, but Financial Assurances and Coordination 
Still Need improvement (GA0-12-505). The draft GAO report includes 
three recommendations for the Secretary of the Interior that are 
intended to strengthen oversight of phosphate mining in southeast 
Idaho. More specifically, the GAO's recommendations address financial 
assurances, coordination with the U.S. Forest Service (FS), and third 
party contracting guidelines. Responses to each recommendation are 
provided below. In addition, we are enclosing some additional 
technical comments on the draft report. 

Before addressing each of the recommendations, the Department of the 
Interior (Department) would like to provide some additional context 
for the relationship between the Bureau of Land Management (ELM) and 
the FS. The Department is concerned that the portrayal of consultation 
between the BLM and the FS on leasing activities as outlined on pages 
25 and 26 of the draft report could he misleading, particularly with 
respect to lease readjustments. 

Within the Department, the BLM is responsible for administering the 
leasing and development of Federal phosphate resources. In that role, 
as the draft report acknowledges, the BLM coordinates with the PS 
based on procedures outlined in two BLM/FS interagency agreements 
executed in 1984 and 1987. These documents identify each agency's 
responsibilities for overseeing the leasing and development of 
leasable minerals, including phosphate. These documents provide the 
framework in which the BLM has consistently operated when coordinating 
with the FS on leasing, plan approvals, and lease readjustments. 

The draft report expresses concern about the BLM readjusting leases in 
the future without the two agencies having reached agreement about 
lease terms and conditions and recommends that the agencies develop a 
coordinated process for proposing and evaluating those terms and 
conditions. While there are circumstances in the normal course of 
lease readjustments in which the BLM does not accept some 
recommendations from the PS, those circumstances do not arise because 
of a lack of coordination. Instead, they occur because of differences 
in professional judgment between the BLM, which has primary 
responsibility for leasing activities, and the FS as the surface 
managing agency. Although the two agencies may have professional 
disagreements, the FILM recognizes the FS mission and responsibilities 
for National Forest System lands and generally accepts the agency's 
recommendations, consistent with the agencies' statutory and 
regulatory requirements. 

Pages 25 and 26 of the draft report also refer to the BLM's 
Washington, D.C. headquarters office's receipt of correspondence from 
the FS in December 2011, which proposes a significant number of 
substantive changes to the BLM's overall general lease terms and 
conditions. The fact that the agencies have not yet had a meeting of 
the minds with respect to all of the FS's proposals seems to be 
offered as an example of the BIM failing to coordinate with the FS on 
lease readjustments, However, those proposed changes will require a 
considerable amount of time to evaluate, and the BLM could not have 
reasonably incorporated them into the specific lease readjustments 
that it recently completed, even if the BLM concurred with the 
recommendations. 

As the December 2011 correspondence notes, the agencies' senior 
management at headquarters, as well as their respective legal counsel, 
had been in discussions about how to reduce the Federal Government's 
potential liability under the Comprehensive Environmental
Response Compensation and Liability Act before the December 2011 
correspondence. The BLM expects these discussions to move forward, 
with the goal of having consulted fully with the FS on its proposed 
changes to the BLM's general lease terms and conditions in advance of 
the next round of readjustments scheduled for next year. 

Nevertheless, the Department recognizes there are opportunities to 
refine coordination efforts between the Bi.M and the PS on evaluating 
lease terms and conditions and financial assurances for phosphate 
mines in southeastern Idaho, The Department also recognizes that 
improvements can he made with respect to clarity and consistency of 
third party contracting. Accordingly, the Department concurs with all 
the recommendations outlined in the draft report. 

With respect to Recommendation 1, the Department acknowledges GAO's 
concerns about the need for a formal policy to document the BLM's 
practice of requiring full bonding of phosphate mines. The BLM has 
required full bonding of all new phosphate mines approved since 2001. 
The ELM will develop written policy to document its practice of 
requiring financial assurances to cover the full estimated-cost of 
reclamation. 

With respect to Recommendation 2, the BLM will work with the FS to 
improve the coordination process for proposing and evaluating lease 
terms and conditions. If appropriate, the agencies will refine their 
current interagency agreements or develop a new regional interagency 
agreement to address leasing activities in the Idaho phosphate field. 

Regarding financial assurances, the BLM and the FS established a 
Service First joint minerals branch at the Idaho BLM's Pocatello Field 
Office to process mine and reclamation plan proposals on both ELM- and 
FS-managed lands. The joint BLM-FS minerals branch reviews reclamation 
cost estimates provided by applicants, and then the BLM determines the 
amount of the full estimated-cost of reclamation bonds that applicants 
must post. The ELM will work with the joint minerals branch to ensure 
that management of both agencies are consistently informed of the 
reclamation cost estimates and the full estimated cost of reclamation 
bonds to be required. Moreover, when evaluating potential refinements 
to its current interagency agreements, the BLM will also work with the 
FS to consider including provisions regarding coordination efforts on 
financial assurances. 

For Recommendation 3, the GAO requests that the BLM analyze its 
authorities for directing operators to enter into third party 
contracting mechanisms. The BLM has well established authority and 
policy guidance for use of third party contractors, under agency 
oversight, to develop documents to comply with the National 
Environmental Policy Act. In response to this recommendation, the BLM, 
in consultation with the Department's Office of the Solicitor, will 
evaluate existing authorities to assess whether operators can be 
required to fund third party contractors, under BLM supervision, to 
monitor construction activities and the implementation of waste rock 
cover systems. Based upon that evaluation, the BLM will either (1) 
develop policy concerning written agreements with operators regarding 
arrangements for such third party contracting, or (2) through the 
Department, request legislation to provide the BLM with the 
appropriate authority. 

The Department hopes that these comments will assist you in preparing 
the final report and appreciates your suggestions for improving the 
regulatory oversight of Federal phosphate development. If you have any 
questions, please contact Mitchell Leverette, Chief. Division of
Solid Minerals, at (202) 912-7113, or LaVanna Stevenson, BLM Audit 
Liaison Officer, at (202) 912-7077. 

Sincerely, 

Signed by: 
Marcilynn A. Burke: 
Acting Assistant Secretary: 
Land and Minerals Management: 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Anu K. Mittal, (202) 512-3841 or mittala@gao.gov: 

Acknowledgments: 

In addition to the contact named above, Steve Gaty (Assistant 
Director), Andrea Wamstad Brown, Casey L. Brown, Antoinette Capaccio, 
Leslie K. Pollock, Rebecca Shea, Carol Herrnstadt Shulman, and 
Rajneesh Verma made key contributions to this report. 

[End of section] 

Footnotes: 

[1] One phosphate mine currently operates on federal land in Utah, but 
the discovery of selenium contamination associated with phosphate 
operations was limited to mining locations in Idaho. As a result, this 
report focuses on agency and mine operator activities in Idaho. 

[2] For simplicity in this report, we use the term mine operators to 
refer to those individuals and companies that engage in activities 
related to phosphate mining, such as leasing federal land, obtaining 
regulatory approval for a phosphate mine, and operating a phosphate 
mine. 

[3] Federal land is used in this report to refer to federally-owned 
surface or subsurface land. 

[4] There are additional, smaller phosphate mines in southeastern 
Idaho, none of which are currently active, where federal agencies do 
not have a role in overseeing mine operations or cleanup and that are 
considered a lower priority for cleanup. These mines are not included 
in our review. 

[5] Reclamation generally includes restoring the land to a stable 
condition that can support other uses through actions such as 
recontouring hillsides, removing roads and structures, and planting 
vegetation. 

[6] 42 U.S.C. §§ 4321-4347 (2006). NEPA requires federal agencies to 
evaluate the likely environmental effects of a proposed project using 
an environmental assessment or, if the project would likely 
significantly affect the environment, a more detailed environmental 
impact statement evaluating the proposed project and alternatives. 

[7] 16 U.S.C. §§ 1531-1544 (2006). 

[8] 33 U.S.C. §1251-1387 (2006). 

[9] These financial assurances, also referred to as bonds, can be 
surety or personal bonds. A surety bond is a third-party guarantee 
that an operator purchases from a private insurance company approved 
by the Department of the Treasury. The operator must pay a premium to 
the surety company to maintain the bond. These premiums can vary 
depending on various factors, including the amount of the bond and the 
assets and financial resources of the operator, among other factors. 
Personal bonds may be in the form of a check or negotiable U.S. 
Treasury bonds. 

[10] EPA and other federal agencies may accept financial assurances in 
the form of corporate guarantees, which are promises by mine 
operators, sometimes accompanied by a test of financial stability, to 
pay remediation costs, but they do not require that funds be set aside 
to pay such costs. 

[11] The remaining phosphate produced in the United States comes 
predominantly from phosphate mines located on mostly private land in 
the southeastern United States, as well as from one active mine on 
federal land in Utah. As noted earlier, these mines are not included 
in our study. 

[12] To transfer phosphate via pipeline, the ore must first be crushed 
and mixed with water to form a thick solution called slurry that can 
be pumped through the pipeline. The three operators also operate 
separate mineral processing facilities, each of which poses additional 
environmental issues. However, these processing facilities are not 
addressed in this report. 

[13] A phosphate lease gives the mine operator the exclusive right to 
phosphate resources on the leased land, but not to the lands 
themselves. Use of the land is subject to the terms and conditions of 
the lease. 

[14] Some mines are associated with multiple leases and some leases 
have no mining activity. As a result, the number of leases in the 
area--86--is greater than the number of mines where federal agencies 
are overseeing mining operations or cleanup activities--18. 

[15] 43 C.F.R. § 3511.26 (2011). 

[16] EPA comments on each draft EIS pursuant to section 309 of the 
Clean Air Act. 

[17] The purpose of the Endangered Species Act is to conserve 
threatened and endangered species and the ecosystems upon which they 
depend. The act includes provisions for listing species that need 
protection, designating habitat deemed critical to a listed species' 
survival, developing recovery plans, and protecting listed species 
against certain harms caused by federal and nonfederal actions. 
Section 7(c) of the act states that agencies may conduct a biological 
assessment as part of their compliance with NEPA. 

[18] National Pollution Discharge Elimination System (NPDES) permits 
are generally issued by states under EPA-approved programs, but Idaho 
does not have a program for issuing such permits; therefore, EPA 
issues these permits in Idaho. 

[19] Section 303(d) of the Clean Water Act does not provide any 
specific deadline for the development of TMDLs. 

[20] Executive Order (E.O.) 12580, Superfund Implementation, was 
issued in 1987 and delegates to EPA certain regulatory authorities 
that the statute assigns to the President, while delegating to other 
federal agencies, including Interior and the Department of Agriculture 
for the Forest Service, authority for non-NPL remedial actions and 
removal actions other than emergencies on their lands, subject to 
section 120 and other provisions of CERCLA. See E.O. No. 12580, 52 
Fed. Reg. 2923 (Jan. 23, 1987). 

[21] EPA has model settlement agreements to help guide negotiations. 

[22] Waste pile caps and covers can be made of synthetic or natural 
materials, such as compacted clay. They work to reduce the migration 
of contamination by preventing rain and snow run-off from transporting 
contamination into ground and surface water. 

[23] Nu-West Mining, Inc. v. United States, 768 F. Supp. 2d 1082 (D. 
Idaho 2011). 

[24] The terms of the settlement were not available as of this 
report's issuance. 

[25] When a lease is relinquished, the mine operator ceases operations 
and the terms and conditions of the lease are no longer in effect. A 
mine operator may relinquish a lease If BLM agrees that relinquishment 
is in the public interest and the mine operator pays accrued rentals 
and royalties and performs reclamation required by BLM. 

[26] Even if a contractor prepares an EIS, BLM officials are still 
responsible for the scope and content of the statement, furnishing 
guidance to the contractor, participating in preparation, and 
independently evaluating the statement prior to its approval. 

[27] The positions in question were identified by BLM officials as 
positions that support EIS project management. Under federal law, BLM 
is authorized to retain fees for processing, recording, or documenting 
authorizations to use public lands or resources. 43 U.S.C. § 1734a 
(2006). Also, under BLM regulations, the agency may set processing 
fees on a case-by-case basis for a plan of operations that requires 
the preparation of an EIS. 43 C.F.R. § 3800.5 (2011). We did not 
analyze whether BLM's acceptance of industry funding for salaries in 
this instance was consistent with these or other authorities. 

[28] U.S. Department of Agriculture, Revised Forest Plan of the 
Caribou National Forest (Idaho Falls, ID: February 2003). 

[29] Bureau of Land Management, Fiscal Year 2002 Program Evaluation 
Report--Bonding in the Non-Energy Leasable Minerals Program, IM 2003-
033 (Washington, D.C.: November 2002). 

[30] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: Nov. 1, 1999). 

[31] 43 C.F.R. § 3503.20(a); 43 C.F.R. § 3590.2(h). 

[32] In the first of these instances, BLM stated in its record of 
decision on the EIS for one mine that it would enter into a written 
agreement with the mine operator for monitoring the installation of a 
cover system to mitigate potential environmental impacts associated 
with the mine. In another record of decision, BLM did not specifically 
mention a written agreement, but stated that the operator would be 
responsible for certain costs associated with a similar contractual 
arrangement. 

[33] 43 C.F.R. § 3598.4 (2011). 

[34] Failure of the operator to take action in accordance with an 
enforcement order is grounds for BLM to issue an order to cease 
operations or to initiate legal proceedings against the operator and 
cancel its lease. 

[35] The responsible land management agencies have been delegated 
authority for cleanup response under CERCLA at these sites except in 
emergency situations. For the mines located partially on BLM land, BLM 
has deferred to EPA to take the CERCLA lead. For the one mine located 
on the Fort Hall Indian Reservation, home of the Shoshone-Bannock 
Tribes, the agencies determined that EPA had authority for cleanup 
response under CERCLA. 

[36] Although these nine mines have not entered the remedial action 
process, varying amounts of assessment work have occurred at each 
mine, according to agency officials. 

[37] Under CERCLA, a party responsible for the release of a hazardous 
substance is liable for injuries to natural resources resulting from 
the release. The regulations implementing the act designate certain 
federal agencies, state governments, and tribal authorities as natural 
resource trustees and authorize them to make claims against the 
parties responsible for the injuries. The federal trustees include FWS. 

[38] Whey is the water and solid components of milk that remain after 
the manufacture of cheese. 

[39] Specifically, EPA officials told us that CERCLA project managers 
who work on EPA's phosphate-related cleanup in Idaho have at their 
disposal roughly 45 full-time equivalent staff with expertise in 
contaminant cleanup--including chemists, biologists, and attorneys. 
Forest Service officials said their staff consists of five project 
managers and two technical support staff, including a geologist and an 
environmental protection specialist; they also have three attorneys 
available. However, these officials told us that they hire technical 
contractors for additional support. 

[40] In addition to oversight, the Forest Service has also directly 
conducted some limited assessment work at two mines. 

[41] Reported spending represents agency expenditures, also referred 
to as outlays, in 2012 constant dollars. Also, officials from each 
agency told us they incurred additional expenses related to cleanup at 
the phosphate mines in southeastern Idaho prior to fiscal year 2001, 
but since not all of the agencies had records of those expenses, we 
are reporting expenditures beginning in 2001. 

[42] These estimated costs represent the cost to the government to 
construct the covers; according to BLM officials, the costs would be 
less if the operators were to perform the work. 

[43] One phosphate mine operator is developing a proposal for a site-
specific water quality standard for selenium at one of its mines, 
which is allowed under EPA regulations. According to EPA officials, in 
some locations, the nationally recommended standard may be considered 
under- or overprotective if the species at a site have different 
sensitivities than those considered for the national recommendation. 
EPA will ultimately decide whether to approve the site-specific 
standard. 

[44] This figure includes financial assurances held by the state of 
Idaho and BIA for phosphate operations on federal land overseen by 
BLM. According to BLM officials, BLM can use these financial 
assurances to help cover the cost of reclamation or federal royalty 
obligations. As a result, we have included them with the reclamation 
bonds held by BLM. 

[45] As noted, BLM holds financial assurances related to mining 
activities physically located on leased Forest Service land. 

[46] EPA Region 10, Region 10 Mining Financial Assurance Strategy, 
(Seattle, WA: January 2009). 

[47] 65 Fed. Reg. 69998, 70004, 70074 (Nov. 21, 2000). 

[48] GAO, Environmental Liabilities: EPA Should Do More to Ensure that 
Liable Parties Meet Their Cleanup Obligations, [hyperlink, 
http://www.gao.gov/products/GAO-05-658] (Washington, D.C.: Aug. 17, 
2005). 

[End of section] 

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