Interim Joint Committee on Natural Resources and Environment


Minutes of the<MeetNo1> 5th Meeting

of the 2011 Interim


<MeetMDY1> October 6, 2011


Call to Order and Roll Call

The<MeetNo2> 5th meeting of the Interim Joint Committee on Natural Resources and Environment was held on<Day> Thursday,<MeetMDY2> October 6, 2011, at<MeetTime> 1:00 PM, in<Room> Room 171 of the Capitol Annex. Representative Jim Gooch Jr., Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Brandon Smith, Co-Chair; Representative Jim Gooch Jr., Co-Chair; Senators Joe Bowen, Ernie Harris, Bob Leeper, Dorsey Ridley, Johnny Ray Turner, and Robin L. Webb; Representatives Stan Lee, Reginald Meeks, Tim Moore, Marie Rader, John Short, Kevin Sinnette, Fitz Steele, Jim Stewart III, and Jill York.


Guests: Commissioner Bruce Scott, Department for Environmental Protection; Bill Bissett, Kentucky Coal Association; Lloyd Cress, Kentucky Coal Association.


LRC Staff: Stefan Kasacavage, Biff Baker, and Kelly Blevins.




Update on water quality regulations relating to coal mining

            Commissioner Bruce Scott, Department of Environmental Protection (DEP), discussed new developments with six different water quality regulations that impact the coal mining industry Kentucky. House Bill 385 of the 2011 General Assembly authorized DEP to create a Kentucky wastewater lab certification program and to develop regulations for the certification of laboratories performing analysis for wastewater, subject to Clean Water Act Section 402 or NPDES permits. The Kentucky antidegredation implementation procedures have been stalled by the United States Environmental Protection Agency (USEPA), but the Cabinet is expecting that new regulations may be approved in October 2011. Commissioner Scott testified that the USEPA has announced that it has been in the process of revising the Federal Water Quality Standards regulations for the first time since 1983. He said the USEPA has verbally indicated that it will continue to recognize both the parameter by parameter approach for determining regulatory scope used by some states as well as the water body approach that Kentucky uses.


The USEPA issued Proposed Guidance on Identifying Waters of the United States on April 27, 2011, which is to be used primarily in USEPA’s oversight of the Clean Water Act 402 and 404 matters, and indicated intent to finalize the guidance in the near future. The USEPA has also indicated that revisions will be made to the federal NPDES regulations, including proposed changes to the application requirements, fact sheet requirements, reasonable potential procedures, and interim objection procedures. All of these proposed changes relate to Kentucky’s ongoing conflicts with USEPA regarding the permitting of coal mining operations. Commissioner Scott concluded by discussing the Final Guidance on Surface Coal Mining in Appalachia that had been issued by USEPA on July 21, 2011.


            In response to questions by Chairman Gooch, Commissioner Scott responded that the Environmental Council of the States’ (ECOS) Resolution says that under current law, if USEPA makes an objection to a permit, the courts have determined that the objection is not a final agency determination by the federal government, and thus not subject to judicial recourse by any interested party. Also, when USEPA makes an objection, it is under no time limits and can hold the permit indefinitely. The ECOS Resolution and Governor Beshear both encourage change in the oversight process because they feel that there is not sufficient due process at this time.


            Commissioner Scott responded to a question by Senator Harris regarding antidegredation procedure, explaining that every effort should be made to keep relevant dissolved contaminant levels at 0.5 mg/L, but the concern is that USEPA may make a change to those standards. He noted that this will affect anyone with a permit, which could include farmers.


            Senator Webb noted that Congressional and state legislative action needs to take place to remedy the situation and encouraged members and citizens of the Commonwealth to call on their Congressional delegates.


            Representative Lee expressed concern that representatives of the USEPA have not attended committee meetings, and Chairman Gooch stated that they have been invited to testify before the committee on several occasions but have declined.


Industry perspectives on latest environmental regulations impacting coal mining

                        Mr. Lloyd Cress, General Counsel, Kentucky Coal Association (KCA), updated the committee on two pieces of litigation that KCA has filed. One is a challenge to the Memorandum of Agreement between the United States Army Corps of Engineers and the USEPA for Clean Water Act Section 404 permit procedures. The case is proceeding and was the subject of oral argument in the Federal District Court for the District of Columbia on September 16, 2011. The judge originally expressed his opinion that USEPA had exceeded its authority and that he would rule within thirty days. Mr. Cress explained that the second piece of litigation, which contested the USEPA’s Interim Guidance on Surface Coal Mining in Appalachia of April 1, 2010, has been delayed by the USEPA’s filing of the Final Guidance on July 21, 2011.


            In response to a question by Chairman Gooch, Mr. Cress noted that the USEPA must conduct hearings if a state objects to a filing, but there are no timeframes in place. The state requested 21 hearings in December of 2010, but no hearings have been scheduled.


            Mr. Cress discussed the July 21, 2011 Final Guidance on Surface Coal Mining in Appalachia, which differed substantially from the previously proposed guidance and presented fresh obstacles for industry as new mining permits are pursued. The July 21, 2011 Final Guidance changed the numeric standard for conductivity, allowed states to use numeric effluent limitations for certain common constituents of Appalachian surface coal mining discharges instead of numeric conductivity standards, and introduced the concept of “offsets,” which allows a discharger to meet a water quality-based effluent limitation standard by utilizing offsets from another source that is contributing the pollutant of concern in the area. Mr. Cress noted that USEPA filed one objection letter that applied to 19 facilities rather than individually addressing the deficiencies on a permit by permit basis, using such terms as “in some cases” and “in some permits a problem exists.” He stated that as a permit applicant it is impossible to know which deficiencies apply to your individual permit. Section 402 of the Clean Water Act calls for an individual review of each permit.


            Mr. Bill Bissett, President, KCA, noted that it is important to remember that since the April 1, 2010 issuance of the Interim Guidance on Surface Coal Mining in Appalachia from USEPA Administrator Lisa Jackson, no eastern Kentucky surface mine has received an individual permit. He explained that the impact of 19 facilities receiving USEPA objections to their permit applications would be the loss of $123 million in severance tax, 125 million tons of coal that will not be mined, and most importantly, 4,000 direct and indirect Kentucky coal jobs that will either be laid off or not hired. The ripple effect to the economy of Kentucky is of great concern.


            Meeting materials are on file with the LRC Library. There being no further business, the meeting was adjourned at approximately 2:45 PM.