GAO-10-206, Surface Coal Mining: Financial Assurances for, and Long-Term Oversight of, Mines with Valley Fills in Four Appalachian States


This is the accessible text file for GAO report number GAO-10-206 
entitled 'Surface Coal Mining: Financial Assurances for, and Long-Term 
Oversight of, Mines with Valley Fills in Four Appalachian States' 
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[Note: On April 29, 2010, GAO revised this product to correct information 
published on page 10 in footnote 22. The original product indicated 
that the Corps completed a modification to Nationwide Permit 21 on 
July 15, 2009. The text has been corrected to indicate that the Corps 
proposed that modification on July 15, 2009.] 

Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

January 2010: 

Surface Coal Mining: 

Financial Assurances for, and Long-Term Oversight of, Mines with 
Valley Fills in Four Appalachian States: 

GAO-10-206: 

GAO Highlights: 

Highlights of GAO-10-206, a report to congressional requesters. 

Why GAO Did This Study: 

Surface mining for coal in Appalachia has generated opposition because 
rock and dirt from mountaintops is often removed and placed in nearby 
valleys and streams. The Office of Surface Mining Reclamation and 
Enforcement (OSM) in the Department of the Interior and states with 
approved programs regulate these mines under the Surface Mining 
Control and Reclamation Act (SMCRA). The Army Corps of Engineers 
(Corps), the Environmental Protection Agency (EPA), and states also 
regulate different aspects of coal mining, including the filling of 
valley streams, under the Clean Water Act. Under SMCRA, mine operators 
must provide financial assurances sufficient to allow mines to be 
reclaimed. Under the Clean Water Act, the Corps may require financial 
assurances that the impact of mines on streams can be mitigated. GAO 
was asked to examine (1) the approaches OSM, the states, and the Corps 
have taken to obtain financial assurances for surface coal mines with 
valley fills; (2) federal and state agencies’ monitoring of these 
mines after reclamation and mitigation are complete; and (3) the 
federal laws agencies may use, and have used, to address latent 
environmental problems. GAO gathered information from state and 
federal agencies in Kentucky, Tennessee, Virginia, and West Virginia 
about their financial assurances practices, long-term monitoring, and 
use of federal laws to address environmental impacts at former mine 
sites. This report makes no recommendations. 

What GAO Found: 

OSM, the states, and the Corps use different approaches to financial 
assurances for reclamation and mitigation. Under SMCRA, states have 
flexibility to require mine operators to provide a bond for the full 
cost of reclamation or participate in an alternative bonding system 
such as a bond pool, which may combine bonds, taxes on coal 
production, and other sources of funding. West Virginia relies 
exclusively on an alternative bonding system, while Tennessee 
exclusively uses a full-cost bonding system. The other two states, 
Virginia and Kentucky, rely on a combination of full-cost bonds and an 
alternative bonding system. Under the Clean Water Act, the Corps has 
discretion to require that mine operators provide assurances that 
funds will be available to mitigate the effects of burying streams 
with valley fills but it has not done so in the four states we 
reviewed. Instead, the Corps has relied on other mechanisms to ensure 
that mitigation will be completed satisfactorily, according to Corps 
officials. For example, some Corps officials said they rely on SMCRA 
financial assurances to ensure required mitigation. 

OSM, EPA, the Corps, and the four states’ mining and environmental 
agencies are not required to monitor former mountaintop mines with 
valley fills for long-term environmental degradation after reclamation 
and mitigation are complete and financial assurances have been 
released. However, several of them, along with the U.S. Geological 
Survey, have conducted or funded analyses of conditions near reclaimed 
mine sites with valley fills that have shown environmental impacts. 
Specifically, analyses have shown that (1) reforestation efforts at 
some reclaimed surface coal mine sites needed improvement; (2) surface 
coal mine sites have contaminated streams and harmed aquatic 
organisms; (3) valley fills may affect water flow; and (4) mine 
operators have not always returned mine sites to their approximate 
original contour when required to do so under SMCRA. Federal and state 
agencies have taken some actions to respond to these findings, 
including adopting new guidelines for reforestation practices. 

Several federal laws may be available under limited circumstances to 
address long-term environmental problems at former mine sites. These 
laws include SMCRA; the Clean Water Act; the Comprehensive 
Environmental Response Compensation and Liability Act (CERCLA), also 
commonly known as Superfund; and the Resource Conservation and 
Recovery Act. For example, the Clean Water Act authorizes EPA or a 
state to require a permit if discharges are detected from a former 
surface mine, and CERCLA may authorize EPA to respond to certain 
pollution from former surface mines. According to the agencies, they 
have rarely or never needed to use these authorities. 

We provided a draft of this report to OSM, the Corps, EPA, Kentucky, 
Virginia, and West Virginia for review and comment. The federal 
agencies generally agreed with the report, while the states were 
critical of what they perceived to be the message of the report. 

View [hyperlink, http://www.gao.gov/products/GAO-10-206] or key 
components. For more information, contact Anu Mittal at (202) 512-3841 
or mittala@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Mining Agencies and the Corps Use Different Approaches to Financial 
Assurances for Reclamation and Mitigation: 

Federal and State Agencies Are Not Required to Monitor Former Mine 
Sites but Have Conducted Some Analyses of Environmental Impacts: 

Federal Laws May Be Available Under Limited Circumstances to Address 
Long-term Environmental Problems Associated with Valley Fills but Have 
Rarely or Never Been Needed or Used, According to Agency Officials: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Selected Surface Mining Control and Reclamation Act 
Reclamation Standards: 

Appendix III: Comments from the Department of the Interior: 

Appendix IV: Comments from the Department of Defense: 

Appendix V: Comments from the Environmental Protection Agency: 

Appendix VI: Comments from the Kentucky Department for Natural 
Resources: 

Appendix VII: Comments from the Virginia Department of Mines, Minerals 
and Energy: 

Appendix VIII: Comments from the West Virginia Department of 
Environmental Protection: 

Appendix IX: GAO Contact and Staff Acknowledgments: 

Figure: 

Figure 1: A Valley Fill in West Virginia: 

Abbreviations: 

AOC: Approximate original contour: 

Corps: Army Corps of Engineers: 

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

EPA: Environmental Protection Agency: 

OSM: Office of Surface Mining Reclamation and Enforcement: 

PEIS: Programmatic environmental impact statement: 

RCRA: Resource Conservation and Recovery Act: 

SMCRA: Surface Mining Control and Reclamation Act: 

TMDL: Total maximum daily load: 

[End of section] 

United States Government Accountability Office: Washington, DC 20548: 

January 14, 2010: 

The Honorable Jeff Bingaman: 
Chairman: 
Committee on Energy and Natural Resources: 
United States Senate: 

The Honorable Lamar Alexander: 
Ranking Member: 
Subcommittee on Children's Health: 
Committee on Environment and Public Works: 
United States Senate: 

Surface mining for coal in the mountainous areas of Appalachia--a 
process often referred to as mountaintop mining--has generated 
opposition in recent years because of its impact on landscapes, 
streams, ecosystems, and communities. In mountaintop mining, before 
the underlying coal can be extracted, the land is cleared of forests 
and other vegetation. Explosives or other techniques are then used to 
break up the overlying solid rock, creating dislodged earth, rock, and 
other materials known as "spoil." Some or most of the spoil is placed 
back on the mined-out area to return it to its approximate original 
contour. However, excess spoil that cannot be safely placed back is 
often placed as "fill" in adjacent valleys or hollows.[Footnote 1] In 
some cases, this excess fill buries the headwaters of streams. (See 
figure 1 for an example of a valley fill.) 

Figure 1: A Valley Fill in West Virginia: 

[Refer to PDF for image: photograph] 

Source: GAO. 

Note: The triangular area in the middle of the photo is a valley fill. 
The fill material is dirt and rock that have been placed into the 
valley. The visible terraces help control the flow of water across the 
fill. Fill material may bury the headwaters of a small stream in a 
valley such as this one. 

[End of figure] 

Mountaintop coal mines that produce valley fills have affected the 
land and streams in the central Appalachian states of Kentucky, 
Tennessee, Virginia, and West Virginia. According to federal and state 
estimates, from 1994 through 2003, surface mining had disturbed about 
400,000 mostly forested acres in these states and generated thousands 
of valley fills.[Footnote 2] Furthermore, these valley fills buried 
724 miles of headwater streams in the four states from 1985 through 
2001. Another 367 miles of streams in the Appalachian region are 
expected to be affected by surface mines that were approved for 
permits from October 2001 through June 2005.[Footnote 3] In December 
2009, we reported on characteristics of mining in the mountainous 
areas of Kentucky and West Virginia, including the number of valley 
fills approved in those states since 2000.[Footnote 4] Specifically, 
we reported that Kentucky and West Virginia collectively approved 
nearly 2,000 fills to store at least 4.9 billion cubic yards of excess 
spoil in nearby valleys.[Footnote 5] 

Surface coal mining is regulated by the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA). SMCRA created the Office of Surface 
Mining Reclamation and Enforcement (OSM) in the Department of the 
Interior to implement and enforce the act. SMCRA allows an individual 
state to develop its own program to implement the act if the Secretary 
of the Interior finds that the state program is in accordance with 
federal law.[Footnote 6] A state with an approved program is said to 
have "primacy" for that program. OSM has approved state programs for 
Kentucky, Virginia, and West Virginia, and annually evaluates how well 
the state programs are administered. OSM manages the mining program in 
Tennessee.[Footnote 7] One goal of SMCRA's, among others, is to assure 
that mines are reclaimed as contemporaneously as possible with surface 
coal mining operations and to protect the environment from problems-- 
such as water quality degradation--that may result from mining. SMCRA 
requires the operator to provide financial assurance, in the form of a 
performance bond, in an amount sufficient to allow the relevant 
regulatory authority--either OSM or the state mining agency--to 
reclaim the mine site if the operator does not.[Footnote 8] 

Mountaintop coal mine operators may also be required to obtain permits 
under the Clean Water Act.[Footnote 9] The Department of Defense's 
Army Corps of Engineers (Corps), the Environmental Protection Agency 
(EPA), and state agencies may all have a role in approving or 
overseeing permits issued under the Clean Water Act for certain 
activities associated with surface coal mine operations. For example, 
the Corps has the authority to issue a permit to a mine operator who 
seeks to discharge spoil into a stream when constructing a valley 
fill, and it may require the operator to compensate for the loss of 
the stream through mitigation--actions such as creating a new stream 
or enhancing a degraded stream.[Footnote 10] The Corps also has the 
authority to require an operator to provide financial assurances to 
ensure a high level of confidence that the compensatory mitigation 
project will be successfully completed. 

In this context, you asked us to examine (1) the approaches OSM, the 
states, and the Corps have taken to obtain financial assurances for 
surface coal mines with valley fills; (2) the extent to which federal 
and state agencies monitor and evaluate these mines after reclamation 
and mitigation are complete; and (3) the federal laws agencies may 
use, and have used, to address any latent environmental problems 
associated with these mines that may occur after SMCRA or Clean Water 
Act financial assurances have expired. 

This report focuses on the four Appalachian states of Kentucky, 
Tennessee, Virginia, and West Virginia because these areas accounted 
for nearly 83 percent of the surface coal production in Appalachia in 
2008 and more than 98 percent of recently-approved valley fills across 
the country.[Footnote 11] 

To address our objectives, we reviewed relevant federal and state 
laws, regulations, and policy guidance on surface coal mining, 
financial assurances, reclamation, and mitigation. We also spoke with 
headquarters and field officials from OSM, the Corps, EPA, and state 
mining agencies regarding financial assurance practices in Kentucky, 
Tennessee, Virginia, and West Virginia. Furthermore, we interviewed 
federal and state agency officials to obtain information on the long- 
term monitoring and evaluation their agencies have done related to 
reclaimed and mitigated mine sites. We also analyzed the applicability 
of selected environmental laws--in addition to SMCRA and the Clean 
Water Act--to address long-term environmental problems that might be 
caused by mine sites with valley fills, and interviewed agency 
officials to learn if such laws had been used in that context. A more 
detailed description of our scope and methodology can be found in 
appendix I. 

We conducted this engagement from October 2008 to January 2010 in 
accordance with all sections of GAO's Quality Assurance Framework that 
are relevant to our objectives. The framework requires that we plan 
and perform the engagement to obtain sufficient and appropriate 
evidence to meet our stated objectives and to discuss any limitations 
in our work. We believe that the information and data obtained, and 
the analysis conducted, provide a reasonable basis for any findings 
and conclusions in this report. 

Background: 

The central Appalachian coal region plays a large part in supplying 
the country with its energy needs. Specifically, in 2008, West 
Virginia and Kentucky were the second-and third-largest coal-producing 
states in the nation--behind Wyoming--and accounted for more than 76 
percent of the coal produced from surface mines in Appalachia. West 
Virginia produced about 69 million tons of coal from surface mines, 
while Kentucky produced about 51 million tons. Virginia produced close 
to 9 million tons and Tennessee less than 2 million tons from surface 
mines in 2008, respectively. 

SMCRA Regulates Surface Coal Mining Operations and Requires Financial 
Assurances: 

SMCRA requires mine operators to obtain a permit before starting to 
mine.[Footnote 12] The permit process requires operators to submit 
detailed plans describing the extent of proposed mining operations, 
how reclamation on the mine site will be achieved, and the estimated 
per-acre cost of reclamation. In reclaiming the mine site, operators 
must comply with regulatory standards that govern, among other things, 
how the reclaimed area is regraded, replanting of the site, and the 
quality of water flowing from the site.[Footnote 13] (See app. II for 
selected details about these key reclamation standards.) In general, 
an operator must reclaim the land to a use it was capable of 
supporting before mining or an alternative post-mining land use that 
the regulatory authority deems higher or better than the pre-mining 
land use. Additionally, although the operator is generally required to 
redeposit spoil on the mine site so that it approximates the original 
contour of the site, the operator may in certain circumstances receive 
a variance to this general requirement and leave the land flat or 
gently rolling. In addition, a mountaintop removal operation is one 
that, by definition, will not restore the area to its approximate 
original contour.[Footnote 14] However, only specific types of post-
mining land uses--including industrial, commercial, agricultural, 
residential, or public uses--are allowed for mountaintop removal 
operations.[Footnote 15] 

SMCRA requires the operator to submit a bond in an amount sufficient 
to ensure that adequate funds will be available for the regulatory 
authority--either OSM or a state with primacy--to complete the 
reclamation if the operator does not do so.[Footnote 16] The bond 
provisions of SMCRA apply generally to all types of coal mines and do 
not include any requirements that are specific to mines with valley 
fills. However, the bond amount for a particular site cannot be less 
than $10,000 and must also be sufficient to ensure the completion of 
the reclamation plan for that particular site if the work had to be 
completed by the regulatory authority in the event of forfeiture. In 
this report, we refer to a bond that is equal to the expected cost to 
reclaim the entire site as a "full-cost bond." OSM has prepared 
guidance for mine operators on how to calculate their bond amounts to 
capture the likely costs of reclamation. Bond amounts can be adjusted 
as the size of the permit area or the projected cost of reclamation 
changes. When all reclamation standards identified in SMCRA and the 
operator's permit--including compliance with water quality standards-- 
have been met, the bond is completely "released" to the operator. 
[Footnote 17] 

The OSM regulations implementing SMCRA recognize three major types of 
bonds: corporate surety bonds, collateral bonds, and self-bonds. 

* A surety bond is a bond in which a surety company guarantees the 
performance of the permittee's obligation to reclaim the mine site. If 
the mining company does not reclaim the site, the surety company must 
pay the bond amount to the regulatory authority or the regulatory 
authority may allow the surety company to perform the reclamation 
instead of paying the bond amount. 

* Collateral bonds include cash; certificates of deposit; liens on 
real estate; letters of credit; federal, state, or municipal bonds; 
and investment-grade securities deposited directly with the regulatory 
authority. 

* A self-bond is a bond in which the permittee guarantees its own 
performance with or without separate surety. Self-bonds are available 
only to operators who meet certain financial conditions. To remain 
qualified for self-bonding, operators must, among other requirements, 
maintain a net worth of at least $10 million, possess fixed assets in 
the United States of at least $20 million, and have an "A" or higher 
bond rating. 

SMCRA also authorizes states to enact an OSM-approved alternative to a 
full-cost bonding system as long the alternative achieves the same 
objectives. One kind of alternative bonding system is known as a "bond 
pool." Under this type of system, the operator may post a bond--e.g., 
a surety bond or collateral bond--for an amount determined by 
multiplying the number of acres in the permit area by a per-acre 
assessment. The per-acre assessment may vary depending on the site-
specific characteristics of the planned mining operation and the 
operator's history of compliance with state regulations. However, the 
per-acre bond amount may be less than the estimated cost of 
reclamation. To supplement the per-acre bond, the operator generally 
must pay a fee for each ton of mined coal and may also be required to 
pay other types of fees. Funds are placed within a pool and can be 
used to reclaim sites that participants in the alternative bonding 
system do not reclaim.[Footnote 18] Under OSM regulations, all 
alternative bonding systems must provide a substantial economic 
incentive for the operator to comply with reclamation requirements and 
must ensure that the regulatory authority has adequate resources to 
complete the reclamation plan for any sites that may be in default at 
any time. 

Once bonds have been completely released to a mine operator, the 
relevant regulatory authority may terminate its jurisdiction under 
SMCRA.[Footnote 19] However, the regulatory authority may also revoke 
an operator's permit if the operator fails to comply with the permit's 
provisions. Under those circumstances, the operator may forfeit the 
bond to the regulatory authority. The regulatory authority then 
becomes responsible for reclaiming the land to the reclamation 
standards found in the operator's permit. If the amount forfeited is 
insufficient to pay for the full cost of reclamation, the operator 
remains liable for remaining costs. The regulatory authority may 
complete reclamation and may sue the operator to recover additional 
expenses. Failure to complete reclamation has other serious 
consequences for mine operators--SMCRA prohibits applicants from 
obtaining future SMCRA permits if they have unabated violations of law 
or regulations applicable to surface mining; state regulations 
specifically note that bond forfeitures based on violations that are 
not subsequently corrected disqualify operators from obtaining future 
permits. 

Clean Water Act Provisions Also Regulate Aspects of Surface Coal 
Mining Operations: 

The objective of the Clean Water Act is to restore and maintain the 
chemical, physical, and biological integrity of the nation's waters. 
Section 404 of the act allows the Corps to issue permits for the 
discharge of material, including fill material, into waters of the 
United States at specified disposal sites.[Footnote 20] Such permits 
are needed for the construction of a valley fill.[Footnote 21] Section 
404(c) authorizes EPA to deny or restrict the use of any disposal site 
where it finds that the discharge will have unacceptable adverse 
effects. Mining companies may be able to construct valley fills under 
one of two types of permits issued by the Corps. First, the mining 
company may be authorized to construct a valley fill under the Corps' 
"nationwide permit" for surface coal mining.[Footnote 22] A nationwide 
permit provides coverage for substantially similar activities that are 
expected to cause only minimal adverse environmental effects on an 
individual and cumulative basis. Second, the Corps may issue an 
"individual permit." Individual permits are issued on a case-by-case 
basis for activities that are expected to have more than a minimal 
impact. Before issuing an individual permit, the Corps must evaluate 
the operator's proposed activity for several factors, including, but 
not limited to, its effects on environmental values--such as fish, 
wildlife, and water quality--and safety issues, as well as any 
proposed mitigation for the project. 

Under guidelines prepared by the EPA Administrator and the Secretary 
of the Army acting through the Chief of Engineers, pursuant to section 
404, the Corps may issue permits to discharge fill material, if, at a 
minimum, compliance with the guidelines is demonstrated. One aspect of 
compliance is that the discharge does not cause or contribute to 
"significant degradation" of waters of the United States.[Footnote 23] 
Under these guidelines, an operator would not be permitted to 
discharge fill materials into waters of the United States if there is 
a practicable alternative to such a discharge and would be required to 
minimize discharges that cannot be avoided. If such discharges are 
unavoidable, the Corps can require as a condition of the permit that 
the operator compensate for the loss or degradation of regulated 
waters. In the case of valley fills that bury streams, such 
compensatory mitigation could involve (1) creating a new stream, (2) 
enhancing a degraded stream, or (3) preserving an existing stream. The 
mitigation work may be done within the permitted area (on-site) or 
outside of the permitted area (off-site). Mitigation may be performed 
by the mine operator or a third party, such as a public or nonprofit 
entity, under agreement with the Corps. 

The Corps' Clean Water Act implementing regulations and related 
policies authorize the Corps' district engineers to require financial 
assurances when approving section 404 permits in order to ensure a 
high level of confidence that compensatory mitigation will be 
successfully completed.[Footnote 24] The Corps allows financial 
assurances to be in the form of bonds, escrow accounts, casualty 
insurance, letters of credit, legislative appropriations for 
government sponsored projects, or other appropriate instruments, 
subject to the approval of the district engineer. If assurances are 
required, district engineers are to determine the amount based on 
factors such as the size and complexity of the compensatory mitigation 
project, the likelihood of success, the past performance of the 
project sponsor, and any other factors they deem appropriate. Also, 
Corps district engineers must release financial assurances once they 
determine that the operator has demonstrated that a compensatory 
mitigation project has successfully met its performance standards. 
Typically, the monitoring period to assess the success of a 
compensatory mitigation project is 5 years but this period may be 
extended for projects that take longer, such as stream restoration. 

The Corps' authority to require financial assurances to ensure 
compensatory mitigation differs from the authority that mining 
agencies have under SMCRA to require bonds for mine reclamation. 

* While SMCRA explicitly calls for mining agencies to require all 
operators to provide bonds, the Corps' Clean Water Act regulations 
authorize district engineers to decide whether financial assurances 
are necessary on a permit-by-permit basis. The district engineer may 
determine that financial assurances are not necessary for a specific 
project if an alternate mechanism is available to ensure a high level 
of confidence that the compensatory mitigation will be provided and 
maintained. 

* While SMCRA authorizes mining agencies to directly hold and use 
financial assurances to ensure the required reclamation is completed 
if the operator defaults on its reclamation obligations, the Corps 
does not have statutory authority under the Clean Water Act to do so. 
[Footnote 25] In light of that limitation, the Corps' regulations and 
policies stipulate that if a district engineer does choose to require 
financial assurances, those assurances must be payable to a third 
party--such as a governmental or nongovernmental environmental 
management organization--that will agree to hold the funds and 
complete the mitigation in accordance with the Corps' instructions if 
the operator defaults on its obligations. 

In addition to needing a Clean Water Act section 404 permit to 
construct a valley fill, mine operators need to obtain a National 
Pollutant Discharge Elimination System, or section 402, permit if they 
discharge pollutants from industrial point sources.[Footnote 26] Point 
sources are discrete conveyances such as pipes.[Footnote 27] Section 
402 permits, generally administered by the states under EPA-approved 
programs, include limits on the amount of pollutants--such as 
suspended solids--that mines can directly discharge into bodies of 
water.[Footnote 28] Surface coal mines contain sediment ponds and 
drainage ditches that collect runoff from all disturbed areas, 
including water from the base or perimeter of valley fills or other 
locations that may then flow into a stream. These flows may need to 
comply with point source pollutant limitations specified in a section 
402 permit. Section 402 permits also require that mine operators 
submit periodic discharge monitoring reports to the regulatory 
authority, which is typically a state agency.[Footnote 29] A mine 
operator cannot obtain the release of its SMCRA bond if the land is 
contributing suspended solids and other pollutants, in excess of 
applicable state effluent limitations, to stream flow or runoff 
outside the SMCRA permit approved area. 

Under SMCRA and the Clean Water Act, Agencies Have Approved Permits 
for Mines with Thousands of Valley Fills in Central Appalachia: 

The regulatory authorities in the four states we reviewed have 
collectively authorized thousands of valley fills since the enactment 
of SMCRA in 1977. Although the total number of valley fills approved 
since 1977 is uncertain, data we collected from OSM, Kentucky, 
Virginia, and West Virginia show that at least 2,343 valley fills have 
been authorized since January 2000.[Footnote 30] Specifically, 

* Kentucky authorized 1,488 valley fills through July 30, 2008; 

* Tennessee authorized 17 valley fills through December 31, 2008; 

* Virginia authorized 327 valley fills through August 17, 2009; and: 

* West Virginia authorized 511 valley fills through July 30, 2008. 

Notably, approval of a valley fill does not necessarily mean that it 
will be constructed. For example, according to Virginia state 
officials, of the 327 valley fills approved between January 2000 and 
August 2009, 97 were completed, 103 were under construction, 90 were 
not started, and 37 were "not needed and/or not constructed." 

While OSM and state mining agencies have been approving SMCRA permits 
with valley fills since the late 1970s, the Corps did not begin to 
consistently require section 404 permits for valley fills until the 
spring of 2002, when the Corps and EPA jointly issued regulations 
revising the definition of fill material. Prior to this revision, the 
Corps interpreted excess spoil to be a "waste" regulated under section 
402 of the Clean Water Act rather than a fill material regulated under 
section 404. 

The Corps could not readily provide us with data on the total number 
of section 404 permits it has issued for valley fills, the number of 
operators it has required to complete mitigation for valley fills, the 
types of mitigation called for, or the status of mitigation projects. 
The Corps did provide us electronic data showing that in the four 
states we reviewed it approved 378 Nationwide Permit 21 permits from 
March 2002 through December 2008 and 171 individual permits for 
surface coal mining operations from March 2002 through September 2009. 
[Footnote 31] However, its database does not contain information on 
how many of those permits were for valley fills.[Footnote 32] In 
addition, its electronic database indicated that only 57 of the 
nationwide permits required compensatory mitigation projects; Corps 
officials believed that number to be understated because the database 
is not complete. Although not captured in its electronic database, the 
information on valley fills and required compensatory mitigation 
projects is more completely documented in the Corps' paper permit 
files, according to agency officials. 

Mining Agencies and the Corps Use Different Approaches to Financial 
Assurances for Reclamation and Mitigation: 

The four states in our review use different approaches to fulfill 
SMCRA's requirement that mine operators provide adequate financial 
assurances for completing reclamation. These states primarily vary in 
whether they require mine operators to fulfill their financial 
assurance obligation strictly through a full-cost bond or whether they 
allow operators to use alternative bonding systems that combine bonds, 
taxes on coal production, and other sources of funding. The Corps has 
not used its discretionary authority to require surface coal mine 
operators in the four states to provide financial assurances for 
mitigation work required as part of their section 404 permit, 
according to Corps officials. Furthermore, Corps officials said the 
Corps has relied on other permit conditions for assurance that 
mitigation will be satisfactorily completed. 

State Mining Agencies' Approaches to Financial Assurances Vary: 

The three states with primacy that we examined--West Virginia, 
Virginia, and Kentucky--have financial assurance programs that differ 
from each other and from the federal program that OSM administers in 
Tennessee. Each of the three states has received approval from OSM to 
use an alternative bonding system, although they do so to varying 
degrees. 

* West Virginia requires that all operators participate in a bond pool. 

* Virginia relies primarily on a bond pool but also uses a full-cost 
bonding system. 

* Kentucky relies primarily on a full-cost bonding system but also 
uses a bond pool. 

* Tennessee uses a full-cost bonding system. 

West Virginia: 

All mine operators must participate in the state's alternative bond 
system. The state has limited the site-specific per-acre bond to 
between $1,000 and $5,000.[Footnote 33] The state also collects a tax 
on each ton of coal produced. The current tax is 14.4 cents per ton of 
clean coal produced. The state deposits those funds into a Special 
Reclamation Fund and a Special Reclamation Water Trust Fund.[Footnote 
34] As of June 2008, the combined balance for the two funds was $46.9 
million. The state can use these funds to reclaim lands that were 
permitted and abandoned after August 3, 1977, for which there is not 
enough bond amount to cover reclamation. 

The West Virginia legislature created an advisory council in 2001 to 
ensure the effective, efficient, and financially stable operation of 
the Special Reclamation Fund. The advisory council is required to 
report to the legislature every year on the financial condition of the 
fund. Furthermore, the West Virginia Department of Environmental 
Protection is required to conduct formal actuarial studies every 2 
years and conduct informal reviews annually on the Special Reclamation 
Fund and Special Reclamation Water Trust Fund. In January 2009, 
recognizing that the tax rate was scheduled to drop from 14.4 cents 
per ton to 7 cents later that year, the advisory council recommended 
that the state legislature adjust the tax rate to 13 cents per ton for 
at least a 5-year period or provide for additional funding needed to 
ensure solvency. While the council concluded that the fund was solvent 
as of January 2009, it stated that, based upon projections in the 2008 
actuarial study and with only the known revenue sources at that time, 
the fund balance would be negative by 2015. In April 2009, the state 
legislature set the tax rate at 14.4 cents per ton, effective July 1, 
2009; called for a review of the tax every 2 years to determine 
whether it should be continued; and stipulated that the tax could not 
be reduced until the funds have sufficient monies to carry out 
required reclamation. 

Virginia: 

Virginia offers the option of a bond pool to operators who meet 
eligibility criteria; other operators must post a full-cost bond. As 
of October 2009, the majority of active surface mine permits were 
covered by the bond pool. According to officials from the Virginia 
Department of Mines, Minerals and Energy, as of October 13, 2009, 
there were 148 active surface mine permits in the bond pool and 18 
surface mines covered by full-cost bonding. The total bonded amount in 
the bond pool was about $143 million, while the total for full-cost 
bonding was about $14 million. An operator must be able to demonstrate 
at least 3 consecutive years of compliance under Virginia's Coal 
Surface Mining and Coal Reclamation Act or any other comparable state 
or federal act to participate in the bond pool. Once in the pool, an 
operator cannot opt out. Operators in the pool must pay an entrance 
fee of $1,000 when the total balance of the pool is determined to be 
greater than $2 million; the entrance fee increases to $5,000 if the 
total fund balance falls below $1.75 million, and remains at $5,000 
until the balance again exceeds $2 million. A fee of $1,000 is 
required of all operators in the pool when the permit is 
renewed.[Footnote 35] Participants in the bond pool also furnish a 
bond of $1,500 or $3,000 per acre, depending on when the permit was 
issued.[Footnote 36] Regardless of acreage, bonds for operations 
entering the fund on or after July 1, 1991, must be at least $100,000. 
If forfeiture occurs, the state may, after using the available bond 
monies, use the bond pool funds as necessary to complete reclamation 
liabilities for the permit area. 

To oversee the bond pool's general operations, the Virginia 
legislature created a reclamation fund advisory board that meets at 
least twice each year to make recommendations to the director of the 
Department of Mines, Minerals and Energy.[Footnote 37] The advisory 
board must also report to the director and to the governor on the 
pool's financial status and recommend to the director any new or 
amended regulations for administering or operating the pool. According 
to the department, the advisory board concluded in August 2009 that 
the fund was solvent. 

Kentucky: 

Kentucky offers mine operators who meet eligibility criteria the 
option of participating in a bond pool, but the vast majority of 
operators provide full-cost bonds. According to the most recently 
available state data, as of May 2007, only 65 permits were covered by 
the bond pool. As of June 30, 2009, OSM data showed that there were a 
total of 893 permits for surface mining in Kentucky. To participate in 
the bond pool, state regulations require that an operator have an 
acceptable or better history of compliance with the state's mining 
regulations, among other criteria. The cost of membership ranges from 
$1,000 to $2,500 and depends on a member's performance record. In 
addition, participants must obtain a bond that ranges from $500 to 
$2,000 per acre, depending on the performance rating of the member. 
Finally, members pay a 5 cent per-ton fee for surface-mined coal. When 
the Kentucky Bond Pool Fund reaches $17.4 million, the assessment of 
tonnage fees is to be suspended for all members who have made 36 or 
more monthly payments to the fund. If the fund level drops to $12.3 
million, the tonnage fee requirement will be reinstated for all 
members. The funds in the pool are available only for reclamation 
costs at sites operated by members of the pool. Bond pool members' per-
acre bonds are fully released at the completion of the initial phase 
of reclamation. After the initial phase, a permit is covered only by 
the bond pool. 

In Kentucky, the law requires a review of the actuarial soundness of 
the bond pool every 3 years. The last Kentucky actuarial study, which 
evaluated the pool as of May 31, 2007, concluded that the fund, with a 
balance of $19.7 million, was solvent and that it had been building 
its assets at a faster pace than the increase in its outstanding 
liabilities. As an indication of the pool's financial soundness, the 
study noted, the pool could survive the failure of its two largest 
members. The study concluded that the fund's soundness had improved 
because its liability was more evenly spread among its members. The 
study recommended that the state continue the 5 cent per ton fee for 
surface coal mines and limit the maximum amount of bond funds held for 
any member operator to $6 million, or about 30 percent of the total 
bond pool. According to the state's bond pool administrator, the pool 
has continued the 5 cent per ton fee as recommended. He also said 
there has never been a member of the bond pool to have bonds in excess 
of $4 to $5 million because the program primarily offers bonding 
assistance to small coal operators. 

Tennessee: 

Tennessee is the only one of the four states we reviewed to use a full-
cost bond system exclusively. As of September 30, 2008, the state had 
15 active surface coal mines. OSM held bonds totaling about $17.8 
million for those 15 mines. In 2007 OSM revised its regulations for 
Tennessee to address concerns that full-cost bonds were not adequate 
to handle the problem of post-mining acid-or toxic-mine drainage. 
[Footnote 38] Specifically, the new regulations provide a mechanism in 
Tennessee to allow operators to establish a trust fund or annuity to 
cover the cost of postmining pollution discharges in lieu of a 
performance bond.[Footnote 39] OSM's policy in Tennessee is to assume 
that post-mining pollution discharges will need to be treated for at 
least 75 years, barring evidence to the contrary. When OSM established 
the trust fund and annuity options in Tennessee, it stated that a 
system that provides an income stream may be better suited than full-
cost bonds to ensure the long-term treatment of postmining pollution 
discharges. According to OSM, surety bonds, the most common form of a 
full-cost bond, are especially ill-suited for this purpose because 
surety companies normally do not underwrite a bond when there is no 
expectation of release of liability. The addition of this authority in 
Tennessee builds upon the experience of Pennsylvania, which had 
already established a process for accepting trust funds or annuities 
to pay for postmining discharges. 

OSM Oversees State Bonding Programs and Has Made Bonding a National 
Priority for the 2010 Evaluation Year: 

In October 2009, the acting director of OSM announced that OSM was 
making bonding a national priority of its 2010 annual evaluation of 
state mining programs.[Footnote 40] Specifically, the acting director 
instructed regional and field office directors to evaluate how states 
are complying with their own regulations for determining required bond 
amounts. The instructions further stated that the evaluations should 
assess whether (1) the states' methods of determining bond amounts 
ensure that adequate funds are available to the state in the event 
that the operator forfeits its bond, (2) the bond calculation methods 
include a mechanism to adjust bond amounts or provide other financial 
assurance to cover the cost of unanticipated long-term postmining 
pollutional discharges that develop after permit approval, and (3) the 
state re-evaluates the bond amount each time a permit is revised or 
renewed. According to an OSM official in the Appalachian Regional 
Office, OSM chose bonding as a national priority after surveying 
managers and staff for their oversight priorities. OSM's November 2009 
work plan calls for OSM to examine a sample of forfeited sites to 
determine whether adequate bonds were posted and whether the sites 
were reclaimed as proposed in their reclamation plans. For those sites 
covered in part or in total by a full-cost bond, OSM plans to use its 
directive on bond calculation as a basis for evaluating the adequacy 
of bonds. OSM plans to finalize a report on its findings by September 
1, 2010. 

In addition, OSM announced in November 2009 that it was considering 
rulemaking to address concerns related to bonding programs. One of 
OSM's concerns is that mine operators do not always apply for bond 
release in a timely manner, particularly for phases II and III. OSM 
noted that there is no legal requirement that operators apply for bond 
release in a timely manner and identified several options for 
improving timeliness. Another concern of OSM was that the data needed 
to assess the success of reclamation has not been adequate. To improve 
data quality, OSM is considering requiring operators to submit an 
annual status report to the regulatory authority with information on 
areas that are permitted, bonded, disturbed, backfilled and graded, 
newly planted, and that have reached one or more of the phases of bond 
release. 

While OSM has made bonding an oversight priority for 2010 and is 
considering related rulemaking options, it has reported on various 
aspects of state bonding programs in prior annual evaluations. For 
example, in its 2009 evaluation year report on West Virginia, OSM 
reported that it did not appear that the state was meeting 
requirements for inspections at bond forfeiture sites. OSM estimated 
that the state had completed about 55 percent of the required 
inspections at bond forfeiture sites.[Footnote 41] In its 2009 report 
on Virginia, OSM reported that it had reviewed a sample of operators 
that applied for phase III bond release during the year and found that 
on-the-ground reclamation had been successful. In its 2009 report on 
Kentucky, OSM provided information on the number of forfeited permits 
at which reclamation was complete or underway. OSM has reported on the 
states' bonding programs in other evaluations, but it was not within 
the scope of our review to assess the effectiveness of those programs. 

The Corps Has Not Required Financial Assurances for Valley Fill 
Permits in the Four States but Has Relied on Other Mechanisms: 

The Corps has not required operators with section 404 permits for 
mines with valley fills to provide financial assurances to ensure 
mitigation is completed, according to officials in the five district 
offices that approve permits in the four states we reviewed. Corps 
officials said they have not required financial assurances for the 
following reasons: 

* The agency does not have statutory authority to directly hold and 
use performance bonds to ensure that mitigation is completed. 
Officials said that if they did require financial assurances, an 
operator would need to identify a third party to hold the assurances 
and complete the mitigation if the operator does not. Some Corps 
officials said, however, that few third parties with the ability to 
conduct stream restoration have been available. 

* The mine operators have had sufficient capital to complete required 
mitigation or have demonstrated their ability to successfully complete 
other mitigation work. 

* It is assumed that mine operators will comply with compensatory 
mitigation requirements without financial assurances. 

* The operators' approved mitigation projects are not yet complete and 
therefore the Corps has no evidence that these projects will be 
unsuccessful. 

Corps officials told us the Corps has relied on mechanisms other than 
financial assurances to ensure that mitigation associated with valley 
fill permits will be satisfactorily completed. Specifically, one 
mechanism may require the operator, under the terms of its permit, to 
prepare an adaptive management plan. Such a plan would identify 
alternative mitigation actions the operator would take in the event 
that elements of the original plan did not succeed. In addition to an 
adaptive management plan, the Corps may require a permit to include a 
contingency plan that identifies acceptable alternative compensatory 
mitigation should the approved mitigation project fail. A contingency 
plan could require that the operator purchase mitigation credits from 
an in-lieu-fee program if the planned mitigation does not succeed. 
[Footnote 42] 

Some Corps officials also told us that the SMCRA bond could be used to 
cover the mitigation required under section 404, but others disagreed. 
According to a Norfolk, Virginia district Corps official, when off-
site mitigation is part of the 404 permit, the Virginia state mining 
agency will expand the area covered by the SMCRA bond beyond the mine 
area to include land on which the 404 mitigation is to be done. The 
Norfolk, Virginia district official stated that this practice is 
consistent with the Corps' 2004 mitigation policy for surface mining 
operations.[Footnote 43] This policy encourages district engineers to 
coordinate with state or OSM staff and the mining operators to 
incorporate required SMCRA features--such as drainage ditches and 
sediment ponds--into section 404 compensatory mitigation plans. On the 
other hand, Corps officials in Huntington, West Virginia, said they 
consider the SMCRA bond as a financial assurance only for mitigation 
projects done on the surface mine site. In further contrast, a Corps 
district official we spoke with in Louisville, Kentucky, does not 
consider the SMCRA bond to be an assurance for on-site section 404 
mitigation because the goals of reclamation and mitigation are not 
always the same. According to Corps headquarters officials, the 
district offices have the discretion to decide if SMCRA mitigation 
projects qualify as section 404 mitigation. Officials from OSM's 
Appalachian region and field offices agreed that on-site section 404 
compensatory mitigation can be incorporated as a special condition of 
the surface mining reclamation plan in a SMCRA permit. 

Federal and State Agencies Are Not Required to Monitor Former Mine 
Sites but Have Conducted Some Analyses of Environmental Impacts: 

OSM, the states' mining or environmental agencies, EPA, and the Corps 
are not required to monitor former mountaintop mines with valley fills 
for long-term environmental degradation after reclamation and 
mitigation are complete and financial assurances have been released. 
While the agencies are not required to collect post-reclamation 
monitoring data, several have analyzed conditions near reclaimed mine 
sites with valley fills and found that (1) reforestation efforts at 
some reclaimed surface coal mine sites needed improvement, (2) some 
surface coal mine sites have contaminated streams and harmed aquatic 
organisms, (3) a link exists between valley fills and changes to water 
flow, and (4) mine operators have not always returned mine sites to 
their approximate original contour when required to do so under SMCRA. 
Several federal and state agencies have taken some actions to respond 
to these findings. 

Additional Monitoring after Releasing Financial Assurances Is Not 
Required or Needed, According to Many Agency Officials: 

Federal and state agencies in the four Appalachian states we reviewed 
are not required by SMCRA or the Clean Water Act to monitor mine sites 
with valley fills or associated mitigation sites after they have 
determined that reclamation and mitigation are complete. Most 
officials we interviewed at the federal and state mining and 
environmental protection agencies in the four states we reviewed said 
post-reclamation or post-mitigation monitoring is not needed, with 
officials from several agencies explaining that the laws or their 
implementing regulations require adequate monitoring before an agency 
can determine that either reclamation or mitigation is complete. For 
example, in order to obtain bond release under SMCRA, mine operators 
must be able to demonstrate to agency inspectors that revegetation, 
water quality, and other standards are being met. Generally, this 
period is 5 years after the last reclamation activity. Officials from 
EPA and the state departments of environmental protection also told us 
that they do not monitor mine sites for water pollution discharges 
after they have been reclaimed. In order to achieve bond release, 
according to OSM and state officials, the operator typically removes 
and reclaims all sediment ponds that are subject to section 402 
discharge permits and must demonstrate that discharge limits have not 
been exceeded for a year. Therefore, once the bond has been released, 
officials would no longer have a reason to monitor the site for 
section 402 permit violations. Officials from two Corps districts said 
that the Corps' requirement that the operator monitor and report on 
mitigation sites for 5 to 10 years before the Corps will determine 
that the mitigation is complete is sufficient. In addition, officials 
from three Corps district offices told us that because they did not 
begin to consistently issue section 404 permits for valley fills until 
2002, few mitigation projects have been in place long enough to have 
been completed and thus are not available for post-mitigation review. 

While the agency officials we spoke with generally said that 
additional monitoring is not necessary after reclamation and 
mitigation are complete, there were some that said that additional 
monitoring is needed to evaluate the long-term effectiveness of those 
activities. Specifically, officials from EPA's Office of Water and 
region 3 and 4 offices said that they believe monitoring has not been 
adequate to document the success of section 404 mitigation projects. 
[Footnote 44] Officials from the U.S. Geological Survey Water Science 
Center in West Virginia told us that additional long-term monitoring 
is needed to collect data on a range of issues, including water 
contamination, flooding, and land stability. 

Agencies Have Conducted Some Studies, which Show Long-Term Impacts 
from Valley Fills, and Taken Some Actions: 

Several agencies have conducted or funded studies that show some 
evidence of the effect of environmental changes associated with 
mountaintop mines with valley fills after reclamation. The majority of 
the studies that agencies referred us to were done as part of the 2003 
draft multiagency programmatic environmental impact statement (PEIS) 
on mountaintop mining and valley fills.[Footnote 45] Among the 
concerns raised by these studies were reforestation efforts, effects 
of mining on aquatic organisms, relations between valley fills and 
floods, and reclamation to the approximate original contour. Several 
agencies have taken actions in response to some of these concerns, 
such as promoting new reforestation methods. 

OSM and State Mining Agency Studies Found that Reforestation Efforts 
at Reclaimed Mine Sites Needed Improvement: 

OSM and state mining agencies have found that reclamation efforts on 
mountaintop mines and valley fill sites could be improved to yield 
more successful reforestation. For example, the 2003 draft PEIS noted 
that previously forested mountaintop mine sites were more likely to 
have been revegetated with grasses than with trees. One PEIS study 
compared revegetation at a sample of southern West Virginia 
mountaintop removal and valley fill mining sites with adjacent unmined 
sites; the revegetation had occurred from 8 to 26 years prior to the 
study, and therefore the operators probably had their bonds released. 
[Footnote 46] According to the study, poor vegetation development with 
time was typical of the reclaimed sites, with significantly lower tree 
diversity on the mined sites than in adjacent forests. The study found 
that its data and other published studies supported the conclusion 
that mining reclamation procedures limit the overall ecological health 
and inhibit the desired growth of native tree and shrub species on the 
site.[Footnote 47] With regard to the study in the draft PEIS, OSM 
officials told us that SMCRA permits do not always call for 
reforestation. For example, a mine site might be approved for 
reclamation as pasture or commercial development. Therefore, reclaimed 
mine sites may not need to become forested to meet SMRCA requirements. 

In June 2008, OSM issued a policy directive to promote the 
reestablishment of forest land where existing forests had been removed 
by surface mining.[Footnote 48] In its directive, and in related 
advisory documents, OSM noted that past reclamation and revegetation 
efforts had not been fully successful and had led to low rates of tree 
survival and growth, forest fragmentation, reduced carbon 
sequestration, loss of wildlife habitat and forest products, and 
increased potential for floods. To reverse this trend, the directive 
encourages, but does not require, the widespread and routine planting 
of native, high-value trees that should help restore the uses and 
ecosystems provided by forests prior to mining. The directive also 
encourages mine operators to avoid compacting the top 4 feet of soil 
on reclaimed mine sites in order to promote water infiltration and 
tree growth. The OSM directive is part of a broader effort known as 
the Appalachian Regional Reforestation Initiative--formed in 2004 by 
federal and state agencies, the coal industry, environmental 
organizations, and others in the Appalachian region--to promote 
improved reforestation techniques on surface-mined lands.[Footnote 49] 
Officials from Kentucky, Virginia, and West Virginia told us that the 
OSM initiative built upon changes in reforestation policy or 
regulation at the state level. According to an OSM Appalachian Region 
official, while he believes that the use of these techniques is 
increasing, he also said that reliable data showing the acres of mined 
land planted using these techniques are not available. According to 
this official, OSM is working with participants in the reforestation 
initiative on methods for assessing success. 

Federal Agencies Have Found That Contaminants from Mine Sites, 
Including Reclaimed Sites with Valley Fills, Have Harmed Aquatic 
Organisms: 

According to the 2003 draft PEIS, approximately 1,200 miles of 
headwater streams within the boundaries of mining permits (or 2 
percent of the streams in the central Appalachian study area) were 
directly affected by mountaintop mining and valley fills. For example, 
streams below valley fills were characterized by contaminants 
discharged from mine sites as well as less diverse and more pollutant-
tolerant aquatic invertebrates and fish. Furthermore, in some 
locations, streams where mountaintop mines and valley fills exist, 
concentrations of selenium, a potentially toxic element that 
accumulates in aquatic organisms, were found to exceed standards. 

In 2008, EPA scientists reported that aquatic life downstream from 27 
active and reclaimed mountaintop mines with valley fills showed subtle 
to severe effects compared with aquatic life downstream in similar, 
but unmined, West Virginia watersheds.[Footnote 50] More specifically, 
the authors compared three reclaimed mine sites with three unmined 
sites over a period of 6 to 7 years. According to the study, two of 
the three reclaimed mine sites showed further degradation of aquatic 
organisms over the period while the third showed some improvement, but 
in each case the three reclaimed sites were impaired compared with the 
unmined sites. 

EPA has cited the 2008 study, as well as other analyses, in recent 
actions that it has taken on section 404 permits for valley fills. In 
September 2009, EPA announced its plan for the "enhanced coordinated 
review" of 79 section 404 permit applications for surface mines with 
valley fills pending with the Corps.[Footnote 51] In making its 
announcement, EPA stated, among other things, that on the basis of the 
scientific literature, its field experience, and available project 
information, it was concerned that the mitigation proposed may not be 
sufficient to replace lost aquatic resources. On the other hand, Corps 
officials told us that they believe that the scientific literature EPA 
referred to is not complete; specifically, that it lacks adequate site-
specific analysis. 

Also in September 2009, EPA asked the Corps to reconsider a section 
404 permit that it issued in 2007 for the Spruce No. 1 mine in West 
Virginia with planned valley fills that, if built, would fill more 
than 8 miles of headwater streams. EPA expressed concerns that the 
Corps decision to issue the permit did not reflect studies showing 
that impairments from surface coal mining are persistent over time and 
cannot be easily mitigated or removed. EPA also raised specific 
concerns about the mitigation plan in the issued permit, including the 
planned use of drainage ditches--such as might be constructed at the 
perimeter of valley fills--as compensatory stream channels. EPA said 
that it has consistently objected to the use of these ditches as 
compensation for lost headwater stream channels and requested that the 
Corps re-evaluate the mitigation plan to ensure that it achieves 
functional replacement of lost aquatic resources. On September 30, 
2009, the Corps' district engineer in Huntington, West Virginia, 
responded to EPA, noting that the decision to issue the permit had 
followed extensive coordination with EPA for nearly 10 years 
concerning the project's scope, alternatives, and compensatory 
mitigation and included the preparation of an Environmental Impact 
Statement. Furthermore, the district engineer said that there were no 
factors at that time that compelled him to consider suspending, 
modifying, or revoking the permit. However, EPA's acting regional 
administrator for Region 3 wrote to the Corps on October 16, 2009, 
that additional modifications would need to be made if the permit were 
to comply with the Clean Water Act and the regulations implementing 
the act. 

EPA is preparing additional analysis of the impacts of mountaintop 
mining sites, including reclaimed sites, on water quality and aquatic 
life. EPA's Office of Research and Development plans to release for 
public comment a draft assessment in early 2010 that evaluates 
restoration and recovery methods that mining companies use to address 
the ecological impacts associated with mountaintop mining and valley 
fills.[Footnote 52] EPA plans to prepare the assessment with advice 
from an expert panel chartered under the Federal Advisory Committee 
Act. 

Federal Agencies and the State of West Virginia Have Drawn a Link 
between Valley Fills and Changes to Water Flow: 

Federal and state agencies examining the impact of mountaintop mines 
with valley fills have found that in streams downstream from these 
sites, low flows are usually increased and storm flows are sometimes 
increased. For example, according to the 2003 draft PEIS, streams in 
watersheds below valley fills tended to have greater base flows. 
[Footnote 53] Streams with fills were generally less likely to 
experience increases in peak flow than unmined areas during most 
storms. However, they were more likely to experience increases in peak 
flow during more intense rainfall events. Consequently, the draft PEIS 
concluded that water flows may increase below valley fills, but that 
the effects are site-specific. This conclusion was derived, at least 
in part, from studies by the U.S. Geological Survey, which compared 
changes in water flow in watersheds with valley fills (some of which 
had been reclaimed) with watersheds without valley fills. 

In addition, the state of West Virginia has examined the extent to 
which mining activities may have contributed to flooding associated 
with a particular storm event. On July 8, 2001, the southern portion 
of West Virginia experienced a major rainstorm that produced 
disastrous flooding. This flooding damaged or destroyed hundreds of 
homes and many businesses. Most of the affected counties are in the 
heart of West Virginia's southern coalfields and have extensive 
underground and surface mining activities. Logging is also prevalent 
in this region. In response to public concerns, the governor created a 
Flood Investigation Advisory Committee and a Flood Analysis Technical 
Team to focus specifically on the impacts of the mining and logging 
industry on the July 8th flooding. 

The team compared two watersheds with extensive mining (and logging) 
activities, including valley fills, with a third watershed with no 
such activities. In general, according to the team, the contributions 
of mining and logging to increased water flow were relatively small 
when compared to the total stream flow volumes.[Footnote 54] It 
concluded, however, that mining and logging influenced the studied 
watersheds by increasing surface water runoff and the resulting stream 
flows at various evaluation points. Consequently, the flood analysis 
technical team recommended that, among other things, the state revise 
its regulations to prohibit any increase in surface water discharge 
over pre-mining conditions and modify certain requirements for valley 
fill construction. In 2003, the state received OSM's approval to 
revise its mining regulations to require that permit applications 
contain a storm water runoff analysis and that the worst case during 
mining and post-mining evaluations must show no net increase in peak 
runoff compared with the pre-mining evaluation.[Footnote 55] According 
to the Secretary of the West Virginia Department of Environmental 
Protection, the state has also modified its valley fill construction 
rules to further ensure no flooding potential in times of short, 
intense runoff from flash storms.[Footnote 56] These modifications 
include engineering requirements to help ensure the stability of the 
valley fill.[Footnote 57] 

OSM Has Studied Operators' Reclamation of Mountaintops to Approximate 
Original Contour: 

Returning spoil material to a mined out area in order to approximate 
the original contour and elevation of the mountain helps to reduce the 
amount of excess spoil that otherwise might be placed in a valley 
fill. As we reported in December 2009, most operators in West Virginia 
and Kentucky have not requested a variance from this requirement. 
[Footnote 58] However, according to OSM studies in 1999 and 2001 of 
West Virginia and Kentucky's implementation of the approximate 
original contour standard, some reclaimed sites where the operator was 
supposed to return the land to approximate original contour differed 
little from sites that had been granted variances.[Footnote 59] OSM 
also reported in 1999 that most mountaintop removal projects in 
Virginia were reclaimed to a configuration closely resembling the 
approximate original contour, even when the state had granted a 
variance to the operator. Following those findings, the states issued 
new guidance on how to achieve approximate original contour. In 2007 
and 2008, OSM reviewed the effectiveness of the states' new contour 
policies and procedures; the results of those reviews were not 
available as of November 2009. In October 2009, OSM's acting director 
instructed the field offices to assess all the states' implementation 
of approximate original contour standards starting in 2010. 

Federal Laws May Be Available Under Limited Circumstances to Address 
Long-term Environmental Problems Associated with Valley Fills but Have 
Rarely or Never Been Needed or Used, According to Agency Officials: 

Several federal laws may be available, under limited circumstances, to 
address environmental problems associated with mountaintop mines with 
valley fills after SMCRA or Clean Water Act financial assurances have 
expired, but these have rarely been needed or used, according to 
federal and state officials. We selected four federal laws for 
analysis in this regard: SMCRA; the Clean Water Act; the Comprehensive 
Environmental Response Compensation and Liability Act (CERCLA), also 
commonly known as Superfund; and the Resource Conservation and 
Recovery Act (RCRA). 

SMCRA Provides Limited Authority to Address Environmental Problems at 
Former Mine Sites after Bond Release: 

OSM and state mining agencies can use additional SMCRA provisions 
under two limited sets of circumstances to address environmental 
problems at former mine sites. First, SMCRA regulations require a 
mining agency to reassert jurisdiction over a mine site after a bond 
release if it can demonstrate that the release was based on the 
operator's fraud, collusion, or misrepresentation of a material fact. 
According to OSM, reassertion of jurisdiction could involve reopening 
the permit and requiring a new bond. However, OSM and state officials 
reported to us that they have rarely needed to use this authority. For 
example, OSM told us that it had reasserted jurisdiction on one post-
bond release site in West Virginia that was discharging pollution 
after the agency successfully argued in court that the company had 
misrepresented material facts when the bond was released. 

Second, SMCRA authorizes OSM and approved states to use funds from 
OSM's Abandoned Mine Land Fund to reclaim some sites. SMCRA 
established the fund to reclaim certain sites mined prior to SMCRA's 
passage in 1977. However, amendments to SMCRA have made these funds 
available for additional projects. Specifically, OSM and primacy 
states can use these funds to reclaim sites for which any bond or 
other source of funds is insufficient for reclamation when (1) mining 
occurred between the enactment of SMCRA and OSM approval of a state 
program or (2) mining occurred between the enactment of SMCRA and its 
amendment in 1990 and the mine operator's surety has become insolvent. 
[Footnote 60] Moreover, these funds must be used to rectify situations 
posing extreme danger or adverse effects to public health and safety 
before they are used to restore environmental resources. Funds for 
carrying out these purposes are generated by a tax on coal production 
and may also be generated by penalties assessed for violations of 
SMCRA.[Footnote 61] OSM officials told us that each year a small 
amount of civil penalty money is available for any state that requests 
it, on a competitive basis for site reclamation and that the agency 
has used these funds in the past for as many as four inadequately 
reclaimed mine sites each year. 

The Clean Water Act Authorizes EPA or State Water Quality Regulators 
to Require a Permit for Discharges from Former Surface Mines: 

Two provisions of the Clean Water Act authorize EPA or state water 
quality regulators to address or monitor water quality issues 
associated with former mine sites. First, the act authorizes EPA or 
EPA-authorized states to regulate discharges of pollutants from point 
sources by issuing and enforcing National Pollutant Discharge 
Elimination System section 402 permits that include limits on 
discharges of specific pollutants. According to EPA officials, a point 
source at a mining site could be, for example, a ditch draining a 
sediment pond at the base of a valley fill. Mine operators typically 
remove such point sources prior to receiving full bond release. 
However, in some circumstances, sediment ponds and associated drainage 
ditches may be authorized to remain on site if provisions for ongoing 
maintenance of the pond are made. If, after bond release, conditions 
at the former mine site change so that pollutants are being discharged 
from a point source, the party responsible for maintaining the point 
source--which could be the former mine operator or the landowner of 
the mine site--would have to obtain a section 402 permit and would be 
subject to applicable pollutant discharge limitations. EPA officials 
emphasized that a point source may remain after bond release and that 
the requirement to maintain a permit for any such remaining point 
source would be indefinite. However, state officials told us that they 
have rarely, if ever, needed to use this Clean Water Act authority to 
require a new permit for a point source at a surface coal mine. 
[Footnote 62] 

Second, the Clean Water Act requires states to identify impaired 
waters and to develop "total maximum daily loads" (TMDLs) for impaired 
waters.[Footnote 63] States may be able to use information on impaired 
waters to indirectly mitigate latent pollution associated with former 
surface coal mine sites. Specifically, if the state determines that a 
water body is impaired, it must eventually develop, for each pollutant 
causing an impairment, a TMDL--the amount of the pollutant that the 
water body can receive, taking into account seasonal variations and a 
margin of safety, and still meet the water quality standard applicable 
to that body of water. To implement a TMDL, states allocate pollutant 
loadings among specific sources, such as mines, and incorporate the 
loads into the state's water quality management plans and section 402 
permits. Thus, if a proposed mine would cause a body of water to 
exceed its TMDL for a given pollutant, the state may, among other 
things, impose stricter discharge limits in that site's section 402 
permit in order to achieve water quality standards. In addition, the 
Corps and EPA may use the information on impaired waters in 
considering whether a section 404 permit for a valley fill operation 
should be issued. For example, in raising concerns regarding the 
Corps' permit for the Spruce No. 1 mine in West Virginia in 2007, EPA 
cited the existence of a TMDL in the mine's watershed; EPA's decision 
as to whether to veto this permit was pending as of October 2009. 

The states we reviewed have identified mining as a general cause of 
impairment for certain bodies of water, but they have not attributed 
such impairments to specific mine sites. For example, West Virginia's 
2006 Water Quality Assessment Report identified coal mining as a 
probable source of impairments for about 4,066 miles of streams in the 
state, but did not identify specific mining permits as a source. 

CERCLA May Authorize EPA to Respond to Pollution from Former Mines: 

CERCLA, commonly known as Superfund, authorizes, but does not require, 
EPA to respond to the release or threatened release of hazardous 
substances from a former surface coal mine.[Footnote 64] Whether a 
particular release from a former mine constitutes a hazardous 
substance must be determined on a case-by-case basis. Some of the 
pollutants commonly associated with coal or coal mining, such as 
selenium, are considered hazardous substances under CERCLA. CERCLA 
allows the government to collect the costs of mitigating or cleaning 
up these substances from responsible parties. However, EPA officials 
said that the agency has not used CERCLA authority to respond to mine 
pollution released from a former surface coal mine site.[Footnote 65] 
EPA has noted that coal contains trace amounts of hazardous 
substances, but that such amounts as may be released over time from a 
former surface mine might not rise to the level that would trigger an 
EPA response.[Footnote 66] 

EPA is Considering Regulating Coal Combustion Residue at Surface Mines 
under RCRA: 

As currently implemented, the hazardous waste provisions of RCRA would 
not generally be available to address environmental issues at former 
surface coal mines because many of the wastes associated with the 
extraction, processing, and combustion of coal have been exempted from 
the definition of hazardous waste.[Footnote 67] However, concern over 
one particular coal by-product, coal combustion residue, may lead to 
regulation of the material as a hazardous waste in the future. Coal 
combustion residue--the material that is left once coal has been 
burned, as in a power plant--is sometimes placed on surface mines to 
abate acid mine drainage. According to OSM, the residue may also be 
used to enhance soil, seal and encapsulate material, and backfill mine 
sites. If coal combustion residue were deemed a hazardous waste, 
surface mines receiving such materials might be subjected to RCRA's 
hazardous waste provisions and could be forced to address releases of 
hazardous wastes.[Footnote 68] Currently, EPA is developing 
regulations on managing coal combustion residue, including those 
managed in surface impoundments, such as one that failed in Tennessee 
in December 2008.[Footnote 69] EPA is considering a number of 
approaches for regulating coal combustion residue, including using the 
solid waste provisions of RCRA, or a combination of the solid and 
hazardous waste provisions of RCRA. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Department of the Interior, 
the Department of Defense, and the Environmental Protection Agency for 
review and comment. We also provided a draft of this report to the 
Kentucky Department for Natural Resources; the Virginia Department of 
Mines, Minerals and Energy; and the West Virginia Department of 
Environmental Protection. The three federal agencies generally agreed 
with our findings, while the three state agencies were critical of 
what they perceived to be the message of the report. 

The Department of the Interior said that it believed the report is an 
informative and fair characterization of the federal and state program 
requirements under SMCRA pertaining to financial assurances in the 
four states we reviewed. The Department of Defense said that, in 
general, it believed the report is informative and provides a good 
discussion of the issues involved in financial assurances for surface 
coal mining in Appalachia. The Environmental Protection Agency noted 
that the report provides a factual presentation of issues associated 
with the review and regulation of surface coal mining practices. The 
agency also noted that the data presented in this and a December 2009 
GAO report provide helpful context for federal and state agencies as 
they continue to work together to address both the near-and long-term 
consequences of surface coal mining activities on the environment, 
water quality, and Appalachian coalfield communities. 

The three state agencies' comments were critical of the draft report. 
For example, Kentucky commented that it believed the report is overly 
broad in its generalized statements, that terms and phrases are used 
interchangeably so as to confuse the issues, and that the report is 
written in a manner to misrepresent and sensationalize the issues. We 
do not agree that the report misrepresents or sensationalizes the 
issues, and have reviewed our use of terms--such as mountaintop 
mining, mountaintop removal mining, valley fills, and hollow fills--to 
ensure that they are used consistently and appropriately throughout 
the report. 

Virginia commented that the report appears to be based on an 
assumption that there are post-bond release pollution discharges below 
valley fills, and that it was concerned with our use of an EPA study 
(by Pond, Passmore, et al.) to support the point that such discharges 
may occur. The state also noted that pollution problems that may occur 
are likely to be site-specific. We disagree with Virginia's 
characterization of our report because we did not assume that there 
are post-bond release pollution discharges below valley fills. In 
fact, our report notes that there is little monitoring of sites after 
bond release, thereby making it difficult to assess post-bond release 
conditions. Nevertheless, we recognize in the report that there is 
some evidence, including in the EPA study, that such problems may 
occur. We agree that problems, if they occur, are likely to be site-
specific. 

West Virginia noted that all coal mines--not just Appalachian mines 
with valley fills--are subject to SMCRA and the Clean Water Act. The 
state also commented that the report seemed to imply that there is a 
bonding or financial assurance problem in the four Appalachian states 
we reviewed and that surface coal mines with valley fills are the only 
mines that have the potential to cause environmental harm. West 
Virginia also commented that the report implied that the monitoring 
period before bond release should be longer. While we recognize that 
other types of coal mining are subject to these laws and may affect 
the environment, our report focused on surface coal mining with valley 
fills. The four states we reviewed have more than 98 percent of the 
recently approved valley fills across the country. In addition, our 
report contained no conclusions about the adequacy of the bonding 
programs in the four states or the length of the monitoring period; 
instead, we attempted to present information on the requirements of 
the relevant laws. Although West Virginia commented that the report 
did not give full credit to the state for improvements it has made in 
reforestation, approximate original contour, and surface water runoff 
practices, it did not provide any additional information to support 
these statements. The report does provide information on actions taken 
by the state in these areas. 

We present the agencies' letters containing their general comments, 
along with our responses to them, as necessary, in appendixes III 
through VIII. The agencies, with the exception of EPA, also provided 
technical comments that we incorporated into the report, as 
appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution for 30 days 
from the report date. At that time, we will send copies of this report 
to interested congressional committees, the Secretaries of the 
Interior and Defense, and the Administrator of the Environmental 
Protection Agency. The report will also be available at no charge on 
the GAO Web site 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. GAO staff who made major 
contributions to this report are listed in appendix IX. 

Signed by: 

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

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This appendix details the methods we used to examine (1) the 
approaches the Office of Surface Mining (OSM), the states we reviewed, 
and the Army Corps of Engineers (Corps) have taken to obtain financial 
assurances for surface coal mines with valley fills; (2) the extent to 
which federal and state agencies monitor and evaluate these mines 
after reclamation and mitigation are complete; and (3) the federal 
laws agencies may use, and have used, to address any latent 
environmental problems associated with these mines that may occur 
after Surface Mining Control and Reclamation Act (SMCRA) or Clean 
Water Act financial assurances have expired. 

This report focused on the four Appalachian states of Kentucky, 
Tennessee, Virginia, and West Virginia because these areas account for 
more than 83 percent of the surface coal production in Appalachia and 
more than 98 percent of recently approved valley fills across the 
country. The data on coal production is from the Energy Information 
Administration and can be found at [hyperlink, 
http://www.eis.doe.gov/cneaf/coal/page/arc/table1.html]. The data on 
valley fills are based on permits approved from October 1, 2001, 
through June 30, 2005, as reported in Department of Interior, Office 
of Surface Mining Reclamation and Enforcement, Environmental Impact 
Statement: Proposed Revisions to the Permanent Program Regulations 
Implementing the Surface Mining Control and Reclamation Act of 1977 
Concerning the Creation and Disposal of Excess Spoil and Coal Mine 
Waste and Stream Buffer Zones, OSM-EIS-34 (2008). We also gathered 
background data on valley fills approved in the four states from 
January 1, 2000, through various dates in mid-2008 to mid-2009. The 
data from Kentucky and West Virginia are drawn from GAO-10-21, Surface 
Coal Mining: Characteristics of Mining in Mountainous Areas of 
Kentucky and West Virginia. Neither Virginia nor Tennessee maintained 
valley fill data in electronic form. State officials provided fill 
data for Virginia and OSM officials provided fill data for Tennessee 
by reviewing hardcopy permits issued since 2000. We interviewed state 
and OSM officials about the reliability of the data they provided and 
compared their results to OSM's 2008 environmental impact statement on 
excess spoil and stream buffer zones. We determined the data were 
sufficiently reliable for our purposes. 

To address each of the objectives, we obtained documents from and 
interviewed officials at several federal and state agencies. These 
included officials in the Department of the Interior's OSM in (1) 
headquarters; (2) Appalachian Regional Office in Pittsburgh, 
Pennsylvania; and (3) field offices in Lexington, Kentucky; Knoxville, 
Tennessee; Charleston, West Virginia; and Big Stone Gap, Virginia. The 
OSM field office in Knoxville manages the mining program in Tennessee. 
We also interviewed and obtained information from officials in the 
Environmental Protection Agency (EPA) headquarters and regional 
offices in Philadelphia, Pennsylvania (Region 3) and Atlanta, Georgia 
(Region 4); officials in the U.S. Geological Survey; and officials in 
the Corps of Engineers headquarters and district offices in 
Louisville, Kentucky; Pittsburgh, Pennsylvania; Nashville, Tennessee; 
Norfolk, Virginia, and Huntington, West Virginia. Those five district 
offices are responsible for issuing and enforcing the Clean Water Act 
section 404 permits to surface mines in the states of Kentucky, 
Tennessee, Virginia, and West Virginia. Moreover, we interviewed and 
obtained information from the following state agencies in the four 
states we reviewed: the Kentucky Department for Natural Resources; 
Kentucky Division of Water; Tennessee Department of Environment and 
Conservation; Virginia Department of Mines, Minerals and Energy; 
Virginia Department of Environmental Quality; and West Virginia 
Department of Environmental Protection. 

To describe the approaches OSM, the states, and the Corps have taken 
to obtain financial assurances for surface coal mines with valley 
fills, we reviewed relevant sections of SMCRA and OSM's implementing 
regulations and policy guidance to identify national requirements for 
financial assurances associated with surface mining reclamation. We 
also reviewed state mining laws in the three states that have primacy 
for administering SMCRA--Kentucky, Virginia, and West Virginia--as 
well as those states' mining agency implementing regulations and 
policy guidance, to identify the states' approaches to financial 
assurances for surface mining reclamation established in accordance 
with the federal standards. We also spoke with officials from OSM 
headquarters, the Appalachian Regional Office, and field offices, as 
well as officials from the state mining agencies in Kentucky, 
Virginia, and West Virginia. We spoke with officials from the OSM 
field office in Knoxville to discuss financial assurances in Tennessee 
because these officials manage the mining program in that state. We 
also reviewed section 404 of the Clean Water Act and the Corps' 
implementing regulations and policy guidance to identify requirements 
and policy for financial assurances associated with compensatory 
mitigation projects. In addition, we contacted Corps officials in the 
headquarters and the five district offices to identify the extent to 
which the Corps has included financial assurance requirements in 
permits it has issued to surface mines for valley fills. We also 
interviewed officials from the EPA to identify their role and 
responsibility for overseeing section 404 permits. 

To examine the extent to which federal and state agencies monitor and 
evaluate surface coal mines with valley fills after reclamation and 
mitigation are complete, we obtained information from and interviewed 
officials in OSM's Appalachian Regional Office and field offices, as 
well as state officials at the mining agencies in Kentucky, Virginia, 
and West Virginia to identify any routine monitoring and "one-time" 
evaluations that these agencies have done of mine sites to assess the 
long-term environmental impact of the reclamation after the SMCRA 
reclamation bonds have been released. We also interviewed and obtained 
information from officials in the Corps' five district offices to 
identify any routine monitoring the Corps has done of mitigation 
projects after determining that operators have completed their 
mitigation obligations or any specific studies of completed surface 
coal mine mitigation projects. In addition, we interviewed and 
obtained information from officials in EPA's Office of Water in 
headquarters and regions 3 and 4; the U.S. Geological Survey; and 
state water quality regulators in Kentucky, Tennessee, Virginia, and 
West Virginia regarding any monitoring or evaluation of the long-term 
environmental impact of former surface mines with valley fills. Among 
the 11 federal and state agencies that we interviewed, none replied 
that they had done routine monitoring of this nature, and most replied 
that they had not done any "one-time" studies. The few agencies that 
replied they had done one-time studies referred us primarily to 
studies completed as part of the 2003 draft multiagency programmatic 
environmental impact statement (PEIS). OSM's 2008 final environmental 
impact statement on proposed regulations for excess spoil management 
also generally cited the 2003 draft PEIS as a source of information on 
the environmental impacts of valley fills. The federal and state 
agencies that collaborated on the draft PEIS conducted or funded more 
than 30 studies of the impacts of mountaintop mining and associated 
valley fills and used them as support for evaluating the impacts of 
various programmatic alternatives. With these facts in mind, we relied 
heavily on the conclusions that the authors of the draft PEIS drew 
concerning a number of environmental impacts, including reforestation, 
water quality and impacts on aquatic organisms, and water flow. We 
also cited more recent studies provided to us by agency officials, 
such as a 2008 study by EPA Region 3 on water quality and aquatic 
organisms near valley fills. Also, during the course of our review, we 
learned from OSM officials about OSM's evaluation of mine operators' 
compliance with approximate original contour policies in Kentucky, 
Virginia, and West Virginia. We reported the results of those 
evaluations because of their relevance to the construction of valley 
fills. 

To examine the federal laws agencies may use, and have used, to 
address any latent environmental problems associated with surface 
mines with valley fills that may occur after SMCRA or Clean Water Act 
financial assurances have expired, we analyzed SMCRA and the Clean 
Water Act and identified provisions that provide mining agencies and 
water quality regulators authority to address environmental problems 
on a former mine site after SCMRA bonds have been released. We also 
interviewed officials from OSM, state mining agencies, and state water 
quality regulators in the four states we reviewed to learn the extent 
to which these authorities have been used in the past to address any 
environmental problems that may have occurred on or caused by a former 
mine site with valley fills. In addition, we analyzed two other 
federal environmental laws--the Comprehensive Environmental Response 
Compensation and Liability Act (CERCLA, also known as Superfund) and 
the Resource Conservation and Recovery Act (RCRA)--to identify 
provisions that may authorize or require EPA to address environmental 
problems that may occur on or be caused by a former surface mine after 
bonds have been released. We interviewed officials from EPA's Office 
of Solid Waste and Emergency Response to learn if CERCLA had been used 
in the past in that context. We also we reviewed an EPA regulatory 
determination published in 2000 on whether regulation of coal 
combustion residue was warranted under the hazardous substance 
provisions of RCRA. 

We conducted this engagement from October 2008 to January 2010 in 
accordance with all sections of GAO's Quality Assurance Framework that 
are relevant to our objectives. The framework requires that we plan 
and perform the engagement to obtain sufficient and appropriate 
evidence to meet our stated objectives and to discuss any limitations 
in our work. We believe that the information and data obtained, and 
the analysis conducted, provide a reasonable basis for any findings 
and conclusions in this report. 

[End of section] 

Appendix II: Selected Surface Mining Control and Reclamation Act 
Reclamation Standards: 

The Surface Mining Control and Reclamation Act (SMCRA) requires that 
mined land be reclaimed consistent with environmental performance 
standards, including making the land available for post-mining uses. 
The SMCRA permit process requires operators to submit detailed plans 
describing the extent of the proposed mining operations and how 
reclamation will be achieved. In reclaiming the land, operators must 
comply with regulatory standards that govern, among other things, the 
final contour of the reclaimed area, the revegetation of reclaimed 
mine sites, and the quality of water leaving the mine site. This 
appendix describes these key reclamation standards. 

Standards for Approximate Original Contour: 

In general, mountaintop mine operators are required to return mine 
sites to their approximate original contour (AOC) unless the operator 
receives a variance from the regulatory authority. This means that the 
surface configuration achieved by backfilling and grading of the mined 
area must closely resemble the general surface configuration of the 
land prior to mining and blend into and complement the drainage 
pattern of the surrounding terrain, with all highwalls[Footnote 70] 
and spoil piles eliminated. 

The Office of Surface Mining (OSM) and the states may grant a variance 
from the requirement to return the site to AOC--meaning that the land 
would be left relatively flat--in certain circumstances, including 
those in which the operator can demonstrate that the site will be 
suitable for certain post-mining land uses.[Footnote 71] According to 
OSM, these variances present an opportunity to create relatively flat, 
flood-free land capable of supporting economic development. In our 
recent report on trends in mountaintop mining, we reported that 
variances from the AOC requirement have been relatively rare in 
Kentucky and West Virginia.[Footnote 72] 

A purpose of SMCRA is to assure that adequate procedures are 
undertaken to reclaim surface areas as contemporaneously as possible 
with the surface coal mining operations. OSM and the states require 
that backfilling and grading begin within a certain number of days 
after coal removal in a particular area. 

Standards for Revegetation: 

OSM and state law and regulations for mine reclamation also address 
how sites are to be revegetated after they have been backfilled and 
graded. To obtain bond release under SMCRA, mine operators must show 
successful revegetation 5 full years after the last year of augmented 
seeding, fertilizing, irrigation, or other work.[Footnote 73] What is 
planted depends on the approved post-mining land use, such as forestry 
or hayland and pasture. 

State regulations set forth different requirements for factors 
including plant species, variety, density, and coverage for different 
post-mining land uses. The states have standards for the extent of 
vegetation that must be initially planted and how much must survive in 
order to receive bond release. For example, West Virginia's 
regulations call for mines sites with a forest land post-mining land 
use to be planted with at least 500 woody plants per acre. This is to 
include at least 350 trees and 150 shrubs. The state specifies that a 
least 5 species of trees be used, including at least 3 higher value 
hardwoods such as oak, ash, or maple. The state also specifies a 
minimum success standard of at least 450 trees and shrubs per acre and 
a 70-percent ground cover. 

Standards for Water Quality: 

SMCRA requires that mine operators' bonds be of an amount sufficient 
to ensure the completion of the site's reclamation plan by the 
regulatory authority, which includes compliance with water quality 
standards. These standards include those established by EPA or the 
states under the Clean Water Act and referenced by SMCRA. Each 
reclamation plan is to include a detailed description of the measures 
to be taken during the mining and reclamation process to ensure the 
protection of the quality of surface and ground water systems, both on-
and off-site, from adverse effects of the mining and reclamation 
process. OSM has stated that a reclamation bond may not be released 
where active or passive water treatment systems are being used to 
achieve compliance with applicable standards.[Footnote 74] 

SMCRA regulations contain specific water protection requirements. The 
regulations include requirements that all surface mining and 
reclamation activities be conducted to minimize disturbance of the 
hydrologic balance within the permit and adjacent areas and to prevent 
material damage to the hydrologic balance outside the permit area. The 
hydrologic balance requirements include standards for water quality 
and effluent limitations, sediment control, siltation and discharge 
structures, and activities in or adjacent to perennial or intermittent 
streams. Permit applicants must submit a probable hydrologic 
consequences determination with their permit application as well as a 
hydrologic reclamation plan indicating how any probable hydrologic 
consequences will be prevented or remediated, including how the 
general hydrologic balance requirements will be met. In addition, the 
regulations that address backfilling and grading require operators to 
cover acid-or toxic-forming materials with a minimum of 4 feet of 
nontoxic material, or treat the material to neutralize its toxicity in 
order to prevent water pollution. With regard to excess spoil used as 
fill material, the regulations require that leachate and surface 
runoff from the fill will not degrade surface or ground waters or 
exceed effluent limitations set for iron, manganese, total suspended 
solids, and pH. The regulations also require that slopes be protected 
to minimize surface erosion at the site and that the fill be designed 
using recognized professional standards, certified by a registered 
professional engineer, and approved by the regulatory authority. 

[End of section] 

Appendix III: Comments from the Department of the Interior: 

United States Department of the Interior: 
Office Of The Secretary: 
Washington, D.C. 20240: 

December 22, 2009: 

Ms. Robin M. Nazzaro: 
Director, Natural Resources and Environment: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548: 

Dear Ms. Nazzaro: 

Thank you for providing the Department of the Interior the opportunity 
to review and comment on the draft Government Accountability Office 
Report entitled "Surface Coal Mining: Financial Assurances for, and 
Long-Term Oversight of, Mines with Valley Fills in Four Appalachian 
States" (GA0-10-206). 

We appreciate the diligent work of the team that prepared the report 
and the large amount of data collected, synthesized, and analyzed. In 
general, we believe that this report is an informative and
fair characterization of the Federal and state program requirements 
under the Surface Mining Control and Reclamation Act of 1977 
pertaining to financial assurances in Kentucky, Tennessee, Virginia, 
and West Virginia. We have enclosed several comments and suggestions 
that, in our view, will enhance the quality and clarity of the report. 

If you have any questions, or need additional information, please 
contact Michael K. Robinson, Chief, Office of Surface Mining 
Reclamation and Enforcement's Appalachian Region Technical Support 
Division, at (412) 937-2882. 

Sincerely, 

Signed by: 

Wilma A. Lewis: 
Assistant Secretary: 
Land and Minerals Management: 

Enclosure: 

[End of section] 

Appendix IV: Comments from the Department of Defense: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

Department Of The Army: 
Office Of The Assistant Secretary: 
Civil Works: 
108 Army Pentagon: 
Washington, DC 20310-0108: 

December 15, 2009: 

Ms. Robin M. Nazzaro, Director: 
Natural Resources and Environment: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Ms. Nazarro: 

This is a Department of Defense (DOD) response to the GAO Draft Report 
GAO-10206, "Surface Coal Mining: Financial Assurances for, and Long-
Term Oversight of, Mines with Valley Fills in Four Appalachian 
States," dated November 23, 2009 (GAO Code 361023). 

We appreciate the work of the team that collected and analyzed the 
data and prepared the report. In general, we believe the report is 
informative and provides a good discussion of the issues involved in 
financial assurances for surface coal mining in Appalachia. We have 
several general and specific comments and appreciate the opportunity 
you provided to review this draft document. If our comments are 
addressed, we feel that the quality and clarity of the final report 
will be enhanced. Our comments are attached in the enclosure. We draw 
your attention to General Comment Number 3, which concerns your 
discussion of pending projects subject to the Enhanced
Coordination Procedures and the Spruce Mine permit in West Virginia. 
[See comment 1] The Spruce Mine permit decision is currently in 
litigation and we therefore recommend that you remove the discussion 
associated with this project. Further, the discussion of both Spruce 
and projects on the ECP list are not relevant to the three objectives 
you have identified in this study and we therefore request that you 
remove this information from the report. [See comment 2] 

Please do not hesitate to contact me if you have any questions. Your 
staff may also contact Mr. Chip Smith, my Assistant for Environment, 
Tribal and Regulatory Affairs, at (703) 693-3655. 

Very truly yours, 

Signed by: 

[Illegible] for: 
Jo-Ellen Darcy: 
Assistant Secretary of the Army (Civil Works): 

The following are GAO's comments on the letter dated December 15, 
2009, from the Assistant Secretary of the Army, Civil Works. 

[End of letter] 

GAO Comments: 

1. While we appreciate the Army Corps of Engineers' (Corps) 
sensitivity to the litigation associated with the Spruce mine, we do 
not feel that any change to our report is warranted. We do not 
specifically discuss the litigation, which was brought by 
environmental groups against the Corps, but rather an ancillary 
conflict between the Corps and the Environmental Protection Agency 
(EPA). Our brief discussion of the matter presents both sides of the 
conflict between EPA and the Corps using the agencies' own words 
sourced wholly from publicly available documents and refrains from 
making any conclusions as to the merits of the case. 

2. We disagree with the Corps' comment that a discussion of projects 
subject to the enhanced coordination procedure and the Spruce mine are 
irrelevant to the objectives of our study. Both of these points are 
relevant to our second objective, which asks us to describe the extent 
to which federal and state agencies monitor and evaluate the impacts 
of surface coal mining activities. Both the enhanced coordination 
procedure and the Spruce mine case provide examples of how federal 
regulators are using studies that we discuss in the report. Therefore, 
we did not revise the report in response to this comment. 

[End of section] 

Appendix V: Comments from the Environmental Protection Agency: 

United States Environmental Protection Agency: 
Office of Water: 
Washington, D.C. 20460: 
[hyperlink, http://www.epa.gov] 

December 24, 2009: 

Ms. Robin M. Nazzaro: 
Director: 
Natural Resources and Environment: 
U.S. Government Accountability Office: 
Washington, DC 20548: 

Dear Ms. Nazzaro: 

Thank you for your November 23, 2009, correspondence to U.S. 
Environmental Protection Agency (EPA) Administrator, Lisa P. Jackson, 
concerning interagency review of the proposed report, Surface Coal 
Mining: Financial Assurances for, and Long-Term Oversight of Mines 
with Valley Fills in Four Appalachian States (GAO-10-206). As EPA 
Assistant Administrator for Water, I want to express my appreciation 
for the continued attention and objective focus given to this very 
important environmental issue. EPA has provided technical assistance 
to the U.S. Government Accountability Office (GAO) in the development 
of this report. We have also reviewed the current draft report, noting 
that it provides a factual presentation of issues associated with the 
review and regulation of surface coal mining practices and offers no 
specific recommendations for the agencies. EPA has no additional 
comments to offer. 

I would, however, like to take this opportunity to recognize one or 
the key premises on which this report is based -- the importance of 
better understanding the long-term implications of authorized surface 
coal mining activities. As the draft report points out, valley fills 
have directly impacted almost 1,100 miles of streams in the central 
Appalachian States of Kentucky, Tennessee, Virginia and West Virginia 
from 1985 through 2005. Furthermore, the draft report refers to a 
recent finding from the final report GAO-10-21, which states that 
nearly 2,000 valley fills were approved in the States of Kentucky and 
West Virginia from 2000 through 2008. These and other data presented 
in both GAO reports provide helpful context for Federal and State 
agencies as we continue to work together to address both the near and 
long-term consequences of surface coal mining activities on the 
environment, water quality, and Appalachian coalfield communities. 

Thank you again for the opportunity to review draft report GAO-10-206. 
We appreciate your ongoing contribution of helpful information in 
regard to this important issue. EPA will continue to utilize this data 
as we work with our Federal and State regulatory partners, industry, 
and the public to improve the environmental review of surface coal 
mining under the Clean Water Act. 

Sincerely, 

Signed by: 

Peter S. Silva: 
Assistant Administrator: 

cc: Ms. Andrea Brown, GAO: 
Mr. Ross Campbell, GAO: 

[End of section] 

Appendix VI: Comments from the Kentucky Department for Natural 
Resources: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

Commonwealth of Kentucky: 
Energy And Environment Cabinet: 
Department For Natural Resources: 
2 Hudson Hollow: 
Frankfort, Kentucky 40601: 
Phone: (502)564-6940: 
Fax: (502)564-5698: 
[hyperlink, http://www.eec.ky.gov] 
[hyperlink, http://www.dnr.ky.gov] 

Steven L. Beshear, Governor: 
Leonard K. Peters, Secretary: 
Carl L. Campbell, Commissioner: 

December 17, 2009: 

Ms. Robin M. Nazzaro, Director: 
Natural Resources and Environment: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Ms. Nazzaro: 

Reference is made to your correspondence of November 23, 2009 where in 
you conveyed a draft copy of your proposed report entitled "Surface 
Coal Mining: Financial Assurances tint, and Long-Term Oversight of, 
Mines with Valley Fills in Four Appalachian States (GAO-10-206)" for 
our review and comment. We have reviewed the draft document and our 
comments and suggestions are as follows: 

General Comments: 

1. We sincerely appreciate GAO's intent to craft an informational 
document designed to provide credible information and reliable data. 
However, we believe this document is overly broad in its generalized 
statements, Terms and phrases are used interchangeably so as to 
confuse the issues and written in a manner that appears to 
misrepresent and sensationalizes the issues. Because coal mining and 
coal energy issues have become increasingly prevalent in the press, it 
is imperative that clear and accurate facts utilizing correct language 
be presented to appropriate agencies and the public. [See comment 1] 

2. As was previously pointed out to GAO staff, we felt the Kentucky 
"Statement of Facts" we received from your stall was a "bit thin", so 
we didn't have a significant number of comments or concerns to convey 
during the conference call of November 3, 2009. Had we had the 
opportunity to review the statements that are made in the draft report 
we would have provided considerably more comments. The work of federal 
and state governments must be transparent so that our stakeholders may 
be well informed for learned decisions. Therefore, we must point out 
that throughout the report you use several terms interchangeably that 
can create a false impression with your readers: 

a) You call all excess spoil disposal areas "Valley Fills". As you 
observe in footnote # 23, there are significant differences. Valley 
fills result in a much larger "disturbed" footprint and directly 
impact intermittent and perennial streams compared to hollow fills 
that impact ephemeral stream reaches. These substantial differences of 
types of fills should not be buried in a footnote but rather be made 
part of the report text. Incidentally, there are very few valley fills 
in the Kentucky coalfields. [See comment 3] 

b) You use the term "Mountaintop Mining" and "Mountaintop Removal" as 
though they are synonymous and these terms occur in the same sentence 
(e.g. page 7 — next to last sentence in the first paragraph; page 7— 
footnote #11). Mountaintop removal is a regulatory defined mining 
method that bears the weight of law in its application and 
restrictions. Mountaintop mining is truly an egregious term that has 
no regulatory reference and misconstrues actual mining activities. We 
believe that the language of "mining in mountainous areas" that GAO 
used in their previous report (GAO-10-21) more aptly describes the 
mining scenarios in the eastern Kentucky coalfields. [See comment 4] 

c) There is a significant difference between the number of fills 
approved and the number actually constructed. Your agency has made 
that observation in the past and we feel that it deserves being 
restated in this report. Advancing this flawed premise for tabulating 
stream miles buried (pgs.2-3, 28) is simply erroneous and falsely 
alarms the reader. [See comment 5] 

Specific Comments: 

3. Page 9, 2nd paragraph: The statement "Once bonds have been 
completely released to a mine operator, the relevant regulatory 
authority may terminate its jurisdiction under SMCRA," should be 
revised to say "Regardless of band type, bonds that have been 
completely released to a mine operator, the relevant regulatory 
authority must terminate its jurisdiction under SMCRA." [See comment 6] 

4. Page 10, top partial paragraph: It should also be noted that SMCRA 
also prohibits applicants from obtaining future SMCRA permits if they 
have previous bond forfeitures. [See comment 7] 

5. Page 14, Footnote 24: It is true that Tennessee has the fewest 
fills. Compared to Kentucky and West Virginia, Tennessee has a very 
small coal mining industry and thus, the fewest mining permit 
applications. This information should be included or recognized in 
your report. [See comment 8] 

6. Page 15, 2nd paragraph: A new paragraph starting with "The Corps 
has not used its discretionary authority..." should be inserted as 
previous statements in the paragraph refer to the SMCRA process. We 
also believe the Corps has used its authority via in-lieu fees to 
provide financial assurance for 404 mitigation work. [See comment 9] 

7. Page 24, 2nd paragraph: The statements in this paragraph reflect 
some sort of investigation(s). However, no citations of these 
"findings" are given. Additionally, we recommend using the phrase 
"tenuous link" rather than "tentative link" when describing the 
relationship between water flow and valley fills. [See comment 10] 

8. Page 25, 2nd paragraph: The statements from the EPA's Office of 
Water are largely editorial and do not apply to the purpose of this 
report. Also, we are not surprised that USGS asks for additional long-
term monitoring as that is one of their agency responsibilities and 
they seek financial assistance in this effort whenever possible. [See 
comment 11] 

9. Page 27, Footnote 41: The statement that "amphibians and reptiles 
were affected by the presence or absence of mining" leads us to 
believe that herpetiles are basically intolerant of any condition. 
That being said, perhaps this statement needs to be removed. [See 
comment 12] 

10. Page 31, 3rd paragraph: When discussing water flow, it seems 
somewhat contradictory to state that "contributions of mining and 
logging to increased water flow were relatively small" compared to the 
need to "ensure no flooding potential." Though the authors are 
specifically targeting West Virginia for this concern, Kentucky has 
regulations in place for flooding analysis and the assurance of no 
change in pre-, during and post-mining water flows. [See comment 13] 

11. Page 32, 2nd paragraph: In reference to the OSM (Kentucky) study 
on approximate original contour, "the operator was supposed to return 
the land to approximate original contour differed from sites that had 
been granted variances," it should be noted that those Kentucky sites 
were returned to AOC despite the approval for a variance. [See comment 
14] 

Again, we sincerely appreciate the opportunity for review and comment. 
Please let us know if you have any questions or if we can be of 
further assistance. 

Respectfully, 

Signed by: 

Carl E. Campbell, Commissioner: 

[End of letter] 

The following are GAO's comments on the letter dated December 17, 
2009, from the Commissioner, Department for Natural Resources. 

GAO Comments: 

1. We do not agree that the report misrepresents or sensationalizes 
the issues; however, we do agree that it is important to be accurate 
and use correct terminology. Throughout the report we have strived to 
be accurate and have been careful to consistently and accurately use 
terms and phrases that are commonly used in regulation or the coal 
mining literature. In its comment, the state did not provide specific 
examples of what it believes are inaccurate facts or inappropriate 
terms. However, subsequent comments from the state referred to our use 
of the terms mountaintop mining, mountaintop removal mining, valley 
fills, and hollow fills. We have reviewed our use of these terms 
throughout the report to ensure that they are used consistently and 
appropriately. 

2. The state is referring to our practice of holding "exit 
conferences" near the end of our review. Our policy is to provide the 
agencies with relevant program responsibilities--typically federal 
agencies but in this case a state agency--with excerpted material from 
the draft report. We call this document a "statement of facts." The 
purpose of the exit conference is to obtain the agency's input 
regarding the accuracy of the facts presented. The purpose is not to 
obtain comments on the entire draft report; that step comes later in 
the process. Therefore, the statement of facts that we sent to 
Kentucky contained information describing laws, policies, and 
conditions that pertained directly to the state. We understand that 
agencies are likely to have additional comments on the full draft 
report--as Kentucky did in this instance--but also believe that our 
process of holding exit conferences to discuss the statement of facts 
followed by a request for formal comments on the full report is a 
transparent one. 

3. We understand that Kentucky's regulations define both hollow fills 
and valley fills, but not all states make this distinction in 
practice. Federal and state regulations identify different types of 
fills, including valley fills, head-of-hollow fills, and durable rock 
fills. These definitions differ in their characteristics, including 
placement, slope, and material composition. For ease of reading, we 
refer to all types of fills as valley fills in this report. The term 
valley fill is not meant to indicate the size of a particular fill or 
the type of stream affected--ephemeral, intermittent, or perennial. 

4. We agree with the state's specific comment and have clarified the 
report accordingly. In our discussion of post-mining land use 
requirements, we are referring specifically to mountaintop removal, 
one type of mountaintop mining. For further clarity, we have added a 
footnote that compares the requirements for mountaintop removal to 
those for steep slope mining, another kind of mountaintop mining. 
Throughout the rest of the report, however, we continue to use the 
term mountaintop mining to refer generally to all types of coal mining 
in mountainous areas. This usage is consistent with our previous 
report mentioned by the state (GAO-10-21) that was also recently 
reviewed by state officials. This usage is also consistent with the 
Environmental Protection Agency's (EPA) 2003 draft Programmatic 
Environmental Impact Statement on Mountaintop Mining/Valley Fills in 
Appalachia. 

5. We agree that not all fills approved are ultimately constructed, 
and make that point in the report. However, we do not believe that our 
report overstates the miles of buried streams and did not modify the 
report in response to this comment. The sources for the data that we 
include in the report are the 2003 draft Programmatic Environmental 
Impact Statement on mountaintop mining and valley fills and the Office 
of Surface Mining's 2008 final environmental impact statement on 
excess spoil and the stream buffer zone. For example, the 2003 draft 
statement reported that 724 miles of streams were "directly impacted 
by valley fills (i.e., covered by fill)." 

6. We disagree with the comment. While we understand that some state 
regulations require termination of jurisdiction at bond release, the 
federal regulations only state that the relevant regulatory authority 
may terminate its jurisdiction under the Surface Mining Control and 
Reclamation Act (SMCRA) at bond release. Therefore, we have not 
revised the report in response to the comment. 

7. We disagree with the comment. SMCRA does not specifically prohibit 
applicants from obtaining future SMCRA permits if they have previous 
bond forfeitures. SMCRA generally prohibits applicants from obtaining 
future permits if they have unabated violations. However, in response 
to the comment, we have added detail on the state regulations, which 
do specifically note that bond forfeiture based on violations that are 
not subsequently corrected disqualify operators from obtaining future 
permits. 

8. We did not modify the report in response to this comment because 
the background section of the report does include data on the 
differences in recent surface coal mine production in the four states. 
Specifically, the report notes that Kentucky produced about 51 million 
tons while Tennessee produced less than 2 million tons in 2008. 

9. This paragraph summarizes the section that follows, and we do not 
agree that an editorial change is needed. We believe that our 
description of the Army Corps of Engineers' practices is accurate on 
the basis of information obtained from that agency. 

10. The citations on which the findings are based are provided later 
in the body of the report. We did not add citations to this summary 
paragraph. However, we have deleted the word "tentative" from our 
discussion of impacts on water flows. We believe that the documents we 
cite, along with comments we received from the Department of the 
Interior, support our characterization in the final draft of the 
report. 

11. We do not agree that the EPA statements are largely editorial and 
made no change to them. We believe that the EPA and U.S. Geological 
Survey statements on inadequate monitoring are as germane to the 
purpose of the report as the statements from state agency officials, 
who believe monitoring is adequate. 

12. We have clarified the footnote to indicate that the mix of 
amphibian and reptile populations was affected by the presence of 
mining. 

13. We have not modified our characterization of the West Virginia 
Flood Advisory Technical Task Force report because we believe it is an 
accurate summary of the task force report. However, we have modified 
the report to include Kentucky's comment on its regulations related to 
flood analysis and avoidance. 

14. We have added this information to footnote 57. 

[End of section] 

Appendix VII: Comments from the Virginia Department of Mines, Minerals 
and Energy: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

Commonwealth Of Virginia: 
Department of Mines, Minerals and Energy: 
Washington Building, 8th Floor: 
1100 Bank Street: 
Richmond, Virginia 23219-3638: 
(804)692-3200: 
Fax: (804)692-3237: 
[hyperlink, http://www.dmme.virginia,gov] 

Memorandum: 

To: Robin M. Nazzaro: 
Director, Natural Resources and Environment: 
Government Accountability Office: 

From: [Signed by] Stephen Walz, Director: 
Virginia Department of Mines, Minerals and Energy: 

Subject: Draft GAO-10-206: Surface Coal Mining: Financial Assurances 
for, and Long-Tenn Oversight of, Mines with Valley Fills in Four 
Appalachian States: 

Date: December 22, 2009: 

Thank you for the opportunity to review the GAO draft report on 
mountaintop mining and financial assurances. The Virginia Department 
of Mines, Minerals and Energy offers the following comments. We would 
be glad to discuss these further if needed. 

The draft report appears to be based on an assumption that there are 
post bond release pollution discharges below fills. The Pond-Passmore 
Report that has been used to support this assumption cites impacts to 
one species of mayflies due to total dissolved solids (TDS). We are 
concerned about basing conclusions on this report as it has not been 
widely peer reviewed and other scientific studies refute the TDS 
issue. Additionally, problems such as selenium have not been 
identified as being a problem in Virginia. Conclusions based on such 
assumptions should be modified to note that such problems are site 
specific and any proposed modification to regulatory approaches should 
account for such site-specific conditions. Across the board, one size 
fits all changes to the regulatory program may not be appropriate for 
all sites in all states. [See comment 1] 

When addressing water quality, the draft report does not acknowledge 
the presence of other extensive land disturbing activities in 
watersheds being mined and their impacts on water quality. To provide 
a complete picture, the draft report should recognize that these 
activities add to stream impacts and should he accounted for in any 
assessment of how surface coal milling activities affect water 
quality. [See comment 2] 

All state regulatory programs require that permitted operators take 
actions to minimize the disturbances to the hydrologic balance. This 
is not noted in the draft report. For example, mine operators are 
required to conduct a Probable Hydrologic Consequence assessment 
before a permit is issued and address any negative impact to the 
hydrologic balance. The draft report should address how these actions 
protect water quality in the area affected by coal mining operations. 
[See comment 3] 

Concerns over water quality downstream of fills after bond release 
could be addressed by the use of wetlands below fills. Passive wetland 
systems have proven to be effective in treating water during bond 
release. Use of passive wetland systems would require a change to OSM 
regulations. [See comment 4] 

Throughout the draft report there are numerous references to the 2003 
Mountaintop Mining/Valley Fills in Appalachia Draft Programmatic 
Environmental Impact Statement or 2003 draft PETS. This document was 
finalized in October 2005 and should be noted as such. [See comment 5] 

We have additional comments regarding specific points in the draft 
report. We are providing them below. 

[End of memorandum] 

The following are GAO's comments on the letter dated December 22, 
2009, from the Director, Department of Mines, Minerals and Energy. 

GAO Comments: 

1. We do not assume that post-bond release pollution discharges occur 
below valley fills. In addition to the Pond-Passmore study, our draft 
report cited the 2003 draft Programmatic Environmental Impact 
Statement, which concluded that streams below mountaintop mines with 
valley fills were characterized by contamination. We agree that the 
contamination may not necessarily have been post-bond release, and we 
agree that contamination problems are likely to be site specific, when 
they occur. We did not revise the report in response to this comment. 

2. The focus of this report was surface coal mining and not all 
activities that may affect water quality. Therefore, while we agree 
that other land disturbing activities may affect water quality in 
watersheds with mining, we have not included a discussion of those 
activities. 

3. Points relating to hydrologic balance, such as effluent 
limitations, are discussed throughout the report in general terms and 
more specifically in Appendix II. We have added more detail on 
hydrologic balance requirements to Appendix II in response to this 
comment. This material is included in the appendix because, while we 
understand that adherence to regulations designed to protect the 
hydrologic balance of the mine site during the mining operation may 
help to minimize water quality issues after bond release, we were 
asked to discuss mechanisms available to address environmental 
problems after bond release, when the Surface Mining Control and 
Reclamation Act's hydrologic balance requirements would no longer 
apply. 

4. We have not modified the report in response to the state's comment 
because we did not analyze the use of passive wetlands, or other 
methods, for treating water after bond release. 

5. The state is correct that the 2003 draft programmatic environmental 
impact statement was finalized in October 2005, and we have revised 
footnote 2 to make that clear. The final version of the statement 
incorporated the 2003 draft statement by reference. However, the 2005 
final statement did not contain all of the material found in the draft 
statement. For example, studies of the impacts of mountaintop mining 
were in the appendixes of the 2003 draft, but not the 2005 final 
statement. Therefore, we believe that it is preferable to refer the 
readers of our report to the 2003 draft statement instead of the 2005 
final statement. 

[End of section] 

Appendix VIII: Comments from the West Virginia Department of 
Environmental Protection: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

West Virginia Department of Environmental Protection: 
Division of Mining & Reclamation: 
December 22, 2009: 
601 57th St., SE: 
Charleston, WV 25304: 
Phone (304)926-0490; Facsimile (304)926-0456: 

Joe Manchin III, Governor: 
Randy C. Hoffman, Cabinet Secretary: 
[hyperlink, http://wwww.wvdep.org] 
			
Robin Nazzaro: 
Director, Natural Resources and Environment: 
Government Accountability Office: 
441 0 Street, NW: 
Washington, DC 20548: 

Dear Ms. Nazzaro: 

Thank you for the opportunity to review and comment on the draft 
Government Accountability Office report GAO-10-206, "Financial 
Assurances for, and Long-Term Oversight of, Mines with Valley Fills in 
Four Appalachian States." 

All coal mining nationwide is subject to the Federal Surface	
Control and Reclamation Act (SMCRA) and the Clean Water Act. Mining of 
coal nationwide has similar potential to impact to the environment. 
Bonds and or financial assurances are required in all states and are 
not unique to the four states chosen for the report. It seems the GAO 
is artificially implying that there is a bonding or financial 
assurance problem in the four states and that mines with valley fills 
are the only mines that have the potential to cause environmental 
harm. [See comment 1] 

West Virginia's bond forfeiture program is one of the most aggressive 
in the nation in assuring reclamation of sites which have had bonds 
forfeited, including the treatment of water on sites that require 
chemical treatment of water. The West Virginia regulatory program has 
addressed most of the needed improvements identified in the analyses 
referenced in your report, in reforestation, approximate original 
contour compliance. surface water runoff as well as other improvements 
beyond the scope of GAO's findings. The GAO makes it sound as if all 
these studies are recent and that little has been done about the 
findings. More recently studies on impacts to aquatic organisms are 
being evaluated. [See comment 2] 

Furthermore, although the report contained no recommendations it 
implies that monitoring periods before bond release should be longer. 
In reality. the bond release period turns out to be much longer than 
the required evaluation time due to maintenance or other requirements 
that would start the clock over. To require a never ending, 
jurisdiction for formerly mined sites would be contradictory to the 
basic premise of ending jurisdiction under SMCRA. [See comment 3] 

In closing it appears that this report could have presented a more 
complete story. More specific comments are attached. If you have 
questions or comments please contact this office. 

Sincerely, 

Signed by: 

Lewis A. Halstead: 
Deputy Director: 

LAH/cm: 

Attachment: 

[End of letter] 

The following are GAO's comments on the letter dated December 22, 
2009, from the Deputy Director, Division of Mining and Reclamation. 

GAO Comments: 

1. We agree that mining nationwide has similar potential to impact the 
environment. We also agree that the Surface Mining Control and 
Reclamation Act requires financial assurances in all states. However, 
we were asked to examine financial assurances and activities related 
to monitoring at coal mines with valley fills. The four states we 
reviewed have the vast majority of coal mines with valley fills. 
Therefore, we did not revise the report in response to this comment. 

2. Our report notes that the state has made changes to its policies 
and practices related to reforestation, approximate original contour, 
and surface water runoff. We did not revise the report in response to 
this comment. 

3. It is correct that we are not making any recommendations regarding 
the length of the monitoring period before bond release. Our report 
notes that most, but not all, agencies we contacted, believe that 
monitoring is adequate. At the same time, there is evidence from some 
monitoring that environmental problems may occur after bonds have been 
released. We did not revise the report in response to this comment. 

[End of section] 

Appendix IX: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

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

Staff Acknowledgments: 

In addition to the contact named above, Robin Nazzaro (Director), 
Andrea Wamstad Brown (Assistant Director), Sherry McDonald (Assistant 
Director); Ross Campbell, Antoinette Capaccio, Brian Friedman, Brandon 
Haller, Carol Hernstadt Shulman, and Desiree Thorp made key 
contributions to this report. Josey Ballenger, Charlie Egan, Carol 
Kolarik, and Rebecca Shea also contributed to this report. 

[End of section] 

Footnotes: 

[1] Federal and state regulations identify different types of fills, 
including valley fills, head-of-hollow fills, and durable rock fills. 
These definitions differ in their description of fill characteristics, 
including placement, slope, and material composition. For ease of 
reading, we refer to all types of fills as valley fills in this report. 

[2] Environmental Protection Agency (EPA), Mountaintop Mining/Valley 
Fills in Appalachia Draft Programmatic Environmental Impact Statement, 
U.S. EPA Region 3, 9-03-R-00013 (2003). The impact statement was 
prepared by EPA, the Army Corps of Engineers, the Office of Surface 
Mining, the U.S. Fish and Wildlife Service, and the West Virginia 
Department of Environmental Protection. The document was incorporated 
by reference in a final impact statement dated October 2005. 

[3] Department of the Interior, Office of Surface Mining Reclamation 
and Enforcement, Environmental Impact Statement: Proposed Revisions to 
the Permanent Program Regulations Implementing the Surface Mining 
Control and Reclamation Act of 1977 Concerning the Creation and 
Disposal of Excess Spoil and Coal Mine Waste and Stream Buffer Zones, 
OSM-EIS-34 (2008). 

[4] GAO, Surface Coal Mining: Characteristics of Mining in Mountainous 
Areas of Kentucky and West Virginia, [hyperlink, 
http://www.gao.gov/products/GAO-10-21] (Washington, D.C.: Dec. 9, 
2009). 

[5] Among the factors affecting the construction of valley fills is a 
Department of the Interior regulation known as the stream buffer zone 
rule. The rule, as originally promulgated in 1983, prohibited the 
dumping of excess spoil material within 100 feet of a perennial or 
intermittent stream except when such activities "will not cause or 
contribute to the violation of state or federal water quality 
standards and will not adversely affect the water quantity or quality 
or other environmental resources of the stream." In December 2008, the 
previous administration modified the rule to allow a surface coal mine 
operator to place excess spoil material excavated by the operation 
into streams if the operator can show it is not reasonably possible to 
avoid doing so. The current administration unsuccessfully sought to 
have the U.S. District Court of the District of Columbia vacate the 
2008 rule. On November 30, 2009, the Department of the Interior 
published an advance notice of proposed rulemaking requesting comments 
on alternatives for revising the current Surface Mining Control and 
Reclamation Act regulations, which include the 2008 rule. Kentucky, 
Virginia, and West Virginia have not implemented any changes to their 
own stream buffer zone rules in the wake of the federal rule change. 

[6] In passing SMCRA, Congress found that "because of the diversity in 
terrain, climate, biologic, chemical, and other physical conditions in 
areas subject to mining operations, the primary governmental 
responsibility for developing, authorizing, issuing, and enforcing 
regulations for surface mining and reclamation operations subject to 
this act should rest with the states." 

[7] The Secretary of the Interior conditionally approved a Tennessee 
state program on August 10, 1982; however, because Tennessee failed to 
adequately implement certain parts of its program, OSM took over its 
inspection and enforcement responsibilities on April 18, 1984. 
Subsequently, the state repealed most of the Tennessee Coal Surface 
Mining Law of 1980 and its implementing regulations, effective October 
1, 1984. As a result, on October 1, 1984, OSM withdrew approval of the 
Tennessee permanent regulatory program and promulgated a federal 
program for the state. 

[8] In this report, we use the terms "financial assurance" and "bond" 
interchangeably. 

[9] The Clean Water Act is codified at 33 U.S.C. §§ 1251-1387 (2006). 

[10] Before requiring mitigation, the Corps requires a demonstration 
that impacts to U.S. waters have been avoided where practicable and 
that unavoidable impacts have been minimized to the extent 
practicable. According to the Corps, it provides an evaluation and 
analysis of avoidance, minimization, and compensation strategies and 
ensures that all unavoidable losses of waters are adequately offset 
through compensation on the vast majority of projects associated with 
surface coal mining sites. 

[11] The data on coal production is from the Energy Information 
Administration and can be found at [hyperlink, 
http://www.eia.doe.gov/cneaf/coal/page/acr/table1.html. The data on 
valley fills are based on permits approved from October 1, 2001, 
through June 30, 2005, as reported in OSM-EIS-34. 

[12] For simplicity in this report, we refer to permittees and 
operators as operators. The permittee is the person or entity who 
holds the permit and is legally responsible for the permit, whereas 
the operator is the person or entity who conducts coal removal 
operations. The permittee and the operator may or may not be the same 
person or entity. 

[13] A purpose of SMCRA is to ensure that adequate procedures are 
undertaken to reclaim surface areas as contemporaneously as possible 
with the surface coal mining operations. OSM and the states have 
regulations requiring that backfilling and grading begin within a 
certain number of days after coal removal in a particular area. 

[14] Other types of mountaintop mining have different requirements. 
For example, steep slope mining describes mining operations in 
mountainous terrain that may, or may not, include an approximate 
original contour variance. Steep slope operations that do not have an 
approximate original contour variance follow the same requirements as 
other permits that comply with approximate original contour 
requirements. 

[15] State regulations regarding allowable post-mining land uses vary. 
For example, West Virginia prohibits certain agricultural alternative 
post-mining land uses for mountaintop mining operations, including 
rangeland and hayland. 

[16] The operator may choose to provide "incremental" bonds covering a 
portion of the permitted area rather than the entire permitted area. 

[17] SMCRA creates three discrete phases of reclamation for purposes 
of bond release. Phase I includes backfilling, regrading, and drainage 
control. Upon successful Phase I reclamation, up to 60 percent of the 
bond can be released. Phase II occurs after establishment of 
revegetation. No part of the bond can be released at this point if the 
water flowing from the permit area is exceeding applicable state 
effluent limitations established under the Clean Water Act. Phase III 
requires meeting post-mine land use standards, which may include 
revegetation success standards and meeting all other applicable 
reclamation requirements. 

[18] In commenting on a draft of this report, the Department of the 
Interior noted that bond pools may also include civil penalties and 
interest. 

[19] State regulations may require termination of jurisdiction over a 
mining operation once a bond is released. 

[20] 33 U.S.C. § 1344 (2006). The Corps regulates discharges of fill 
material into three categories of stream known as ephemeral, 
intermittent, and perennial. According to the Corps, most valley fill 
construction in the four states we reviewed has involved the discharge 
of fill material into ephemeral streams. 

[21] According to the Corps, a section 404 permit does not cover the 
construction of an entire valley fill: the Corps only authorizes the 
discharge of fill material into waters of the United States in 
association with the underdrain beneath the valley fill; the 
construction of the rest of the fill is regulated pursuant to SMCRA. 
For ease of reading, we will continue to refer to this process as the 
construction of a valley fill. 

[22] Surface coal mine operators must notify the Corps of their intent 
to discharge fill material into waters of the United States in association 
with surface coal mining and reclamation activities under a nationwide 
permit—known as Nationwide Permit 21—and receive written authorization 
prior to commencing activity. In March 2009, a federal district court 
judge in the Southern District of West Virginia vacated Nationwide Permit 
21 and enjoined the Corps from issuing authorizations pursuant to Nationwide 
Permit 21 in the district until the Corps has determined that Nationwide 
Permit 21 will not have adverse cumulative impacts as required by the 
Clean Water Act. A June 11, 2009, Memorandum of Understanding between the 
Corps, the Department of the Interior, and EPA states that the Corps will 
propose to modify Nationwide Permit 21 to prohibit its use to authorize 
discharges of dredged or fill material into waters of the United States 
for surface coal mining activities in the Appalachian region of Kentucky, 
Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia, and on July 15, 
2009, the Corps proposed that modification. 

[23] 40 CFR Part 230. 

[24] The district engineer is the lead official in each district. 
There are 38 Corps districts in the United States. According to Corps 
officials, there are five Corps districts in Appalachia that are 
responsible for implementing the section 404 permit program in the 
four states we reviewed. Those district offices are located in 
Louisville, Kentucky; Pittsburgh, Pennsylvania; Nashville, Tennessee; 
Norfolk, Virginia; and Huntington, West Virginia. Corps regulations 
and policies are 33 CFR Part 332 (Compensatory Mitigation For Losses 
Of Aquatic Resources) and Guidance on the Use of Financial Assurances, 
and Suggested Language for Special Conditions for Department of the 
Army Permits Requiring Performance Bonds, Regulatory Guidance Letter, 
No. 05-1 (Feb. 14, 2005). 

[25] Under 31 U.S.C. §3302(b), any funds that the Corps receives, such 
as a bond, must be accounted for as a "miscellaneous receipt" under 
the Miscellaneous Receipts Statute and must be deposited in the 
General Fund of the U.S. Treasury. Thus, those funds could not be used 
to provide the required compensatory mitigation for a specific project. 

[26] These pollutant discharge limits are derived from technology-
based "effluent guidelines" established by EPA or in water-quality 
standards developed by states and approved by EPA. 

[27] 33 U.S.C. § 1362(14) (2006). 

[28] EPA regulations have established effluent guidelines for coal 
mining and preparation under section 402 for iron, manganese, total 
suspended solids, and pH. States may establish standards for these and 
other pollutants associated with surface coal mines. For any pollutant 
without a published standard, permit writers may use their best 
professional judgment. 

[29] While it retains independent oversight authority, EPA has 
approved the permitting and compliance authorities of the section 402 
program in Kentucky, Tennessee, Virginia, and West Virginia. 

[30] The data from Kentucky and West Virginia are from electronic 
databases. While both states have collected some information in their 
databases since the late 1970s, Kentucky officials told us their fill 
data are less reliable prior to 2000. West Virginia officials also 
told us they did not consistently record information on fills in their 
database until the late 1990s. Virginia officials told us that they 
did not have an electronic database with information on valley fills. 
They collected information for us by reviewing the hardcopy files of 
permits issued since 2000. Similarly, OSM officials conducted a review 
of permit files to provide us with information on fills in Tennessee, 
the state with the fewest fills. 

[31] The 171 individual permits represented the approximate number of 
permits the Corps approved during that period for surface mining 
operations in the counties in Kentucky, Tennessee, Virginia, and West 
Virginia that the agency identified as being in the Appalachian region 
affected by its July 15, 2009, proposal to prohibit the use of the 
Nationwide Permit 21 for surface coal mining activities. See footnote 
22. 

[32] The Corps may approve other types of mining activity besides 
valley fills under the Nationwide Permit 21 and individual permits for 
surface coal mining. 

[33] The amount within that range is determined using criteria spelled 
out in West Virginia's regulations. These criteria include such 
factors as the type of surface mining being proposed, the number of 
excess spoil fills, other geologic and hydrologic characteristics of 
the site, and the compliance history of the operator, among other 
things. 

[34] In 2008, the West Virginia legislature authorized, but did not 
separately fund, the Special Reclamation Water Trust Fund (Water Trust 
Fund). Since July 2008, coal tax revenues based on a tax rate of 1.5 
cents per ton have been paid into the Water Trust Fund, while coal tax 
revenues based on a rate of 12.9 cents per ton have been paid into the 
Special Reclamation Fund. According to the state, payments for both 
land and water reclamation will be made from the Special Reclamation 
Fund until 2018, at which time payments for water treatment would be 
made from the Water Trust Fund. 

[35] Permits are renewed after 5 years. 

[36] Bonds for permits issued prior to July 1, 1991, were $1,500 per 
acre, while those issued after are $3,000 per acre. 

[37] According to state regulation, the Reclamation Fund Advisory 
Board is to consist of five members appointed by the governor subject 
to confirmation by the General Assembly, three of whom shall represent 
the coal industry; one of whom shall be a representative of the 
director to the Department of Mines, Minerals and Energy; and one of 
whom shall be a member of the public without any coal industry 
interests. 

[38] Acid mine drainage is acidic water rich in heavy metals that 
forms through the chemical reaction of surface water (rainwater, 
snowmelt, and pond water) and shallow subsurface water with rocks that 
contain sulfur-bearing minerals, resulting in sulfuric acid. Acid mine 
drainage commonly flows from or is caused by surface mining, deep 
mining, or coal refuse piles. According to EPA, there are a number of 
major environmental problems caused by acid mine drainage: (1) 
disrupts growth and reproduction of aquatic plants and animals, (2) 
diminishes valued recreational fish species, (3) degrades outdoor 
recreation and tourism, (4) contaminates surface and groundwater 
drinking supplies, and (5) causes acid corrosion of infrastructure 
like wastewater pipes. 

[39] Tennessee Federal Regulatory Program, 72 Fed. Reg. 9616 (Mar. 2, 
2007). 

[40] A new director of OSM was confirmed subsequent to this 
announcement. The agency's 2010 evaluation year is from July 1, 2009, 
through June 30, 2010. 

[41] In commenting on a draft of this report, West Virginia noted that 
it conducted additional inspections not counted by OSM, including site 
visits related to contract monitoring and water treatment activities. 

[42] In-lieu-fee arrangements are often sponsored by public or 
nonprofit entities. Under agreements with the Corps, in-lieu-fee 
sponsors receive payments from multiple operators required to perform 
compensatory mitigation. Then, at a later date, the sponsors use these 
funds to implement compensatory mitigation projects. 

[43] The Corps, Mitigation for Impacts to Aquatic Resources from 
Surface Coal Mining, (May 7, 2004). 

[44] EPA's Region 3 includes Virginia and West Virginia, as well as 
Delaware, the District of Columbia, Maryland, and Pennsylvania. Region 
4 includes Kentucky and Tennessee, as well as Alabama, Florida, 
Georgia, Mississippi, North Carolina, and South Carolina. 

[45] EPA, Mountaintop Mining/Valley Fills in Appalachia Draft 
Programmatic Environmental Impact Statement, U.S. EPA Region 3, 9-03-R-
00013 (2003). The draft PEIS was prepared by EPA, the Corps, OSM, the 
U.S. Fish and Wildlife Service, and the West Virginia Department of 
Environmental Protection. The purpose of the PEIS was to evaluate 
options for improving agency programs under the Clean Water Act, 
SMCRA, and the Endangered Species Act that will contribute to reducing 
the adverse environmental impacts of mountaintop mining operations and 
excess spoil valley fills in Appalachia. 

[46] Steven N. Handel, "Terrestrial Plant (Spring Herbs, Woody Plants) 
Populations of Forested and Reclaimed Sites." Appendix in Mountaintop 
Mining/Valley Fills in Appalachia, Draft Programmatic Environmental 
Impact Statement, Region 3, U.S. Environmental Protection Agency. 
(Available from: [hyperlink, 
http://www.epa.gov/region3/mtntop/eis2003appendices.htm#appe].) 

[47] The nature of the plant communities that are found on reclaimed 
mine sites is likely to affect the types and diversity of animals that 
inhabit those sites. According to the 2003 draft PEIS, the mix of bird 
species in the study area tended to be affected by the presence of 
mined or reclaimed mine lands compared with unmined land. Similarly, 
the mix of amphibian and reptile populations was affected by the 
presence of mining. 

[48] OSM directive TSR-16, Reforestation of Title IV and Title V Mined 
Lands (June 10, 2008) available at [hyperlink, 
www.osmre.gov/guidance/directives/directive931.pdf. 

[49] Federal agency signatories to the reforestation initiative 
include the Forest Service and the Natural Resources Conservation 
Service in the Department of Agriculture; the Fish and Wildlife 
Service, the Geological Survey, and OSM in the Department of the 
Interior; and the National Energy Technology Laboratory in the 
Department of Energy. 

[50] Gregory J. Pond, Margaret E. Passmore, Frank A. Borsuk, Lou 
Reynolds, and Carole J. Rose, "Downstream effects of mountaintop coal 
mining: comparing biological conditions using family-and genus-level 
macroinvertebrate bioassessment tools." Journal of the North American 
Benthological Society, vol. 27, no. 3 (2008). The Journal identifies 
the authors as EPA Region 3 scientists. 

[51] These 79 permit applications are in addition to a set of 48 
section 404 permit applications that EPA reviewed earlier in 2009. EPA 
raised environmental concerns with 6 of the 48 applications. 

[52] 74 Fed.Reg. 48952. 

[53] The base flow of a stream is the "fair weather" flow, which is 
largely made up of ground water rather than runoff from precipitation. 

[54] Flood Advisory Technical Taskforce, Runoff Analyses of Seng, 
Scrabble, and Sycamore Creeks (June 14, 2002). 

[55] West Virginia Regulatory Program, 68 Fed. Reg. 40157-40159 (Jul. 
7, 2003) (codified at W. Va. Code R. § 38-2-5.6 (2009). 

[56] From a statement the Secretary of West Virginia's Department of 
Environmental Protection submitted to the Senate Committee on 
Environment and Public Works Subcommittee on Water and Wildlife for a 
June 25, 2009, hearing titled "The Impacts of Mountaintop Removal Coal 
Mining on Water Quality in Appalachia." 

[57] In commenting on a draft of this report, OSM noted that it had 
conducted an evaluation of the state's storm run-off analysis in March 
2009. OSM's full evaluation report is on the Web at [hyperlink, 
http://arcc.osmre.gov/cfo/SWORA2008.pdf]. In its comments on a draft 
of this report, the Kentucky Department for Natural Resources noted 
that the state has regulations in place for flooding analysis and the 
assurance of no change in pre-mining, during, and post-mining water 
flows. 

[58] [hyperlink, http://www.gao.gov/products/GAO-10-21]. 

[59] Specifically, the OSM report on Kentucky found that state 
regulators had placed a greater emphasis on the amount of spoil 
material returned to the mined-out area and not enough emphasis on the 
post-mining land configuration, land use, slope stability, and 
drainage controls. In commenting on a draft of this report, Kentucky 
stated that the sites evaluated by OSM were returned to approximate 
original contour despite the approval for a variance. Similarly, the 
OSM report on West Virginia concluded that the state's approximate 
original contour determinations should give more attention to large, 
post-mining changes in elevation in relation to the pre-mining relief; 
the amount and location of spoil placed outside the mined area; and 
land configuration. 

[60] SMCRA was enacted on August 3, 1977, and the applicable 
amendments were passed on November 5, 1990. 

[61] The use of civil penalty funds is subject to authorization in an 
annual appropriation act or other relevant statute. 

[62] A January 2009 court decision from the Northern District of West 
Virginia ruled that the West Virginia Department of Environmental 
Protection was required to apply for section permits for discharges at 
18 forfeited mine sites at which it had taken over reclamation. In 
August 2009, the Southern District of West Virginia issued a similar 
ruling with regard to three additional bond forfeiture sites. 

[63] A TMDL is the maximum amount of a pollutant that can enter into a 
body of water without violating the relevant water quality standard. 

[64] A "hazardous substance" refers to material that is listed or 
would be characterized as hazardous under CERCLA, the Clean Water Act, 
RCRA, the Clean Air Act, or the Toxic Substances Control Act. 

[65] Specifically, EPA officials told us that they have never used 
CERCLA to conduct a removal action--an emergency response to address 
threats to people and the environment in the short term--to address an 
issue at a former surface coal mine site and have never listed a 
former surface coal mine site on the National Priorities List--EPA's 
list of some of the most contaminated sites in the country. 

[66] Although EPA has not used CERCLA to respond to mine pollution 
released from former mine sites, it has conducted removal actions 
under CERCLA to respond to pollution associated with coal production. 
For example, EPA used CERCLA to respond to a 2000 coal slurry spill 
resulting from an impoundment failure at a coal preparation plant in 
Martin County, Kentucky. EPA also used CERCLA to respond to a December 
22, 2008, breach in a dike at the Tennessee Valley Authority Kingston 
Fossil Plant that resulted in the release of 5.4 million cubic yards 
of coal combustion residue into the nearby Emory River. The spill 
covered more than 300 acres, made 3 homes uninhabitable and damaged 23 
other homes, plus roads, rail lines, and utilities. In addition, EPA 
has used CERCLA to respond to releases of hazardous substances that 
were stored at former surface mines but that were not directly related 
to the surface mining operation. 

[67] RCRA establishes a framework for regulation of hazardous and 
solid wastes: Subtitle C establishes federal "cradle-to-grave" 
regulation of hazardous wastes, and Subtitle D sets out minimum 
standards for state management of solid waste in landfills. RCRA 
includes provisions governing "corrective action"--cleanup--of 
hazardous wastes at covered facilities, and also authorizes EPA to 
issue orders requiring persons contributing to an imminent hazard to 
take necessary actions to clean up hazardous or solid waste releases. 
An amendment to RCRA, the Bevill amendment, exempted wastes from the 
extraction, processing and combustion of coal, among others, from the 
definition of hazardous waste pending further study by EPA. Based on 
these studies, EPA determined that regulation of these materials as 
hazardous wastes was not warranted and thus continued the exemption of 
these materials from the definition of hazardous waste. The Bevill 
amendment does not necessarily apply to every waste generated by a 
coal mine; any hazardous waste not exempted under the Bevill amendment 
would be subject to regulation under RCRA Subtitle C. Furthermore, 
waste exempted under the Bevill amendment, as well as any other waste 
that meets the definition of solid waste under RCRA, can in some 
circumstances be addressed under section 7003 of RCRA. Section 7003 of 
RCRA allows EPA to restrain the handling, storage, treatment, 
transportation or disposal of any solid waste or hazardous waste that 
may present an imminent and substantial endangerment to health or the 
environment. Thus, for example, EPA could prevent the storage of coal 
waste in an impoundment on a surface coal mine if such storage 
presents an imminent and substantial danger. 

[68] The placement of coal combustion residue on surface mines for 
reclamation purposes is currently regulated in general terms under 
SMCRA in that any material used to reclaim a permitted mine site must 
comply with SMCRA permitting requirements and performance standards. 
In commenting on this report, OSM noted that some states allow 
disposal on mine sites. In May 2000 EPA determined that more specific 
regulation of the placement of such material on a mine site might be 
appropriate under the solid waste provisions of RCRA or under SMCRA. 
In 2007 OSM issued an advance notice of proposed rulemaking to 
regulate such wastes specifically under SMCRA and drafted but did not 
publish a proposed rule. 

[69] See footnote 66. The surface impoundment at the Kingston Fossil 
Plant was not located on a surface mining operation, but at a coal 
processing plant. 

[70] A highwall is a cliff of exposed rock left after a surface mining 
operation has cut into the landscape. 

[71] SMCRA authorizes both "exceptions" and "variances," to AOC 
requirements, but federal and state regulations use only the term 
"variance," as we do for consistency. The AOC requirements may not 
apply to permits to remine a previously mined site. The reason is that 
a previously mined site may not have enough material to regrade the 
site to the AOC standard. 

[72] See GAO, Surface Coal Mining: Characteristics of Mining in 
Mountainous Areas of Kentucky and West Virginia, [hyperlink, 
http://www.gao.gov/products/GAO-10-21] (Washington, D.C.: Dec. 9, 
2009). According to Kentucky's and West Virginia's data, most recently 
issued surface coal mining permits issued required the land to be 
reclaimed to AOC, although both states also granted some permits with 
AOC variances. Specifically, 76 percent (or 294 permits) of the 388 
permits that Kentucky issued from January 2002 through July 2008 
required the operator to reclaim the land to AOC. The remaining 24 
percent (or 94 permits) contained 99 AOC variances. In West Virginia, 
85 percent (or 181 permits) of the 212 permits issued between January 
2000 and July 2008 required the operator to reclaim the land to AOC. 
The remaining 15 percent (or 31 permits) contained 33 AOC variances. 
We did not collect data on AOC variances for Virginia for the purposes 
of that report or for this review. However, in commenting on a draft 
of this report, Virginia said that "variances from AOC have 
traditionally been, and currently are, rare." 

[73] The 5-year period of responsibility applies to regions of the 
country, such as Appalachia, that receive at least 26 inches of rain 
per year. In drier regions, the period of responsibility is 10 years. 

[74] Craig B. Giffin, West Virginia's Seemingly Eternal Struggle for a 
Fiscally and Environmentally Adequate Coal Mining Reclamation Bonding 
Program, 107 W. Va. L. Rev. 105 (2004); See West Virginia Regulatory 
Program, 61 Fed. Reg. 6511-6517 (Feb. 21, 1996). 

[End of section] 

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