COAL

Fate of Obama mountaintop crackdown may hinge on judges' view of EPA guidance

U.S. EPA and the Army Corps of Engineers pressed federal appellate judges today to reverse lower court rulings that effectively threw out significant portions of the Obama administration's policies for mountaintop-removal coal mining.

The administration is asking the court to overturn district court rulings that invalidated 2009's "enhanced coordination" process with the corps on Clean Water Act strip-mining permits and an EPA guidance document that outlined preferred conditions for state-issued permits.

Industry groups led by the National Mining Association and the states of West Virginia and Kentucky quickly challenged both actions. And they cheered district court rulings that said EPA had overstepped its Clean Water Act authority with extra coordination and held that the guidance amounted to de facto rulemaking.

In oral arguments this morning, the Department of Justice's Matthew Littleton urged the U.S. Court of Appeals for the District of Columbia Circuit to reverse those rulings. He argued that the lower court had erred because it viewed the guidance as a binding regulation.

"The guidance has no legal impact," Littleton said. He added that states are free to disregard it when determining the terms of a mining permit.

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And in several instances, he said, EPA has allowed permits to move moved forward that do not comply with the guidance.

His argument was met by skepticism from Judge Brett Kavanaugh. He asked, "Then why have the guidance at all?"

Kavanaugh said that was "not how it was advertised," noting that then-EPA Administrator Lisa Jackson said the guidance would prevent most mountaintop coal mining projects in Appalachia.

He questioned Littleton's argument that the guidance has no effect on how states issue permits and whether they should be concerned that EPA would later invalidate the permits.

"You really believe that?" asked Kavanaugh, a Republican appointee.

The case dates to shortly after President Obama's arrival in the White House. The administration made improving oversight of mountaintop-removal coal mining a top priority because of the adverse environmental effects on waterways that flowed from the blasting of mountaintops to expose coal seams.

The timing coincided with a decision in another case that freed a backlog of Clean Water Act permit applications that had been stuck with the corps.

If the Army Corps had approved all the applications, it would have signed off on more mountaintop projects than during the entire George W. Bush administration. EPA quickly took steps to delay their approval with extra scrutiny through enhanced coordination with the corps.

The following year, EPA drafted new guidance outlining the agency's approach to enforcement for Appalachian strip mining. The agency finalized the document in 2011, setting guidelines for how well water near strip mines conducts electricity -- a measure of the health of aquatic life.

That spurred the lawsuit from NMA and Kentucky and West Virginia. They argued that EPA had overstepped its permit authority.

U.S. District Judge Reggie Walton for the District of Columbia agreed with the challengers in two separate rulings in 2011 and 2012, holding that the guidance amounted to new policy.

While the administration faced some tough questions on the guidance document today, the judges appeared more receptive to EPA's enhanced coordination efforts.

Attorney Kirsten Nathanson of Crowell & Moring LLP, representing NMA, argued that the coordination marked a major shift from previous protocols.

She called it a "random process that was a complete departure." Nathanson said it had caused permits to sit around "for months and months and months."

But Kavanaugh and Judge Thomas Griffith, another Republican appointee, seemed to have little problem with the agencies coordinating their efforts. Griffith contended that the Clean Water Act explicitly said Congress wanted EPA and the corps to work together.

The third judge on the panel, Srikanth Srinivasan, an Obama appointee, at one point said of enhanced coordination, "It seems like it's just good government."

Otherwise, Srinivasan gave little indication of how he viewed the case.

Did guidance stymie permitting?

The outcome may hinge on what practical impact the guidance has had on permitting.

Kavanaugh pressed attorneys on that issue. At one point, he asked, "Can the states ignore the guidance?"

Benjamin Bailey, one of the attorneys representing West Virginia, responded, "They can, at their peril."

Even though Littleton argued that the administration's actions have not slowed down or prevented permitting, Bailey said the guidance has "changed the way things are done forever" by "forcing down the [state] agencies' throats" the conductivity standards.

Mary Stephens, an attorney for Kentucky, noted that EPA had never objected to the way state regulators issue National Pollutant Discharge Elimination System permits -- until increased scrutiny took hold.

Now, she said, EPA is requiring regulators to predict a mine's potential water quality impacts, something it had never done before. Stephens said the administration has "totally stymied Kentucky's NPDES permitting program."

Earthjustice attorney Emma Cheuse, representing environmental groups, took on both EPA and the mining industry and states. She said the enhanced coordination and guidance were just steps in EPA's enforcement of the Clean Water Act.

"The mining industry got too comfortable," she said. "It's the law itself that they take issue with."

Judges wondered whether the courts should weigh in on the Obama administration's actions now or wait until states or companies challenged individual permit reviews.

Several individual permit cases have also been making their way through the courts. Tomorrow, for example, the 6th U.S. Circuit Court of Appeals will hear oral arguments on whether the corps should have permitted James River Coal Co.'s Leeco Inc. Stacy Branch Mine in Kentucky.

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