Energy > AG Speaking Energy > D.C. Circuit Upholds EPA Power to Modify Existing Section 404 Permits
24 Apr '13

The U.S. Court of Appeals for the District of Columbia Circuit unanimously upheld the authority asserted by the U.S. Environmental Protection Agency (EPA) to “withdraw” permission to discharge dredge or fill material from a mountaintop coal mine into disposal sites allowed under a permit that had been issued by the U.S. Army Corps of Engineers (Corps) four years previously. Mingo Logan Coal Company v. EPA, __ F.3d ___, No. 12-5150 (D.C. Circuit April 23, 2013)(copy available here). The Court’s decision sent shock waves through the mining industry, introducing enormous regulatory uncertainty for entities operating under Corps-issued dredge and fill permits.

In January 2007, the Corps issued, without objection by EPA, a Clean Water Act (CWA) Section 404 permit to Mingo Logan’s predecessor to discharge material from the company’s Spruce No. 1 Mine into four West Virginia streams and tributaries. In September 2009, EPA requested that the Corps modify the permit to address “new information” about the potential to degrade downstream water quality. The Corps refused and EPA commenced regulatory action to limit the allowable discharge sites. In January 2011, EPA issued a final determination withdrawing certain discharge sites from the permit. Mingo Logan filed suit in U.S. District Court and obtained summary judgment on its claim that EPA lacked the statutory authority to invalidate an existing permit. Mingo Logan Coal Co. v. U.S. EPA, 850 F. Supp. 2d (D.D.C. 2012). EPA appealed to the D.C. Circuit.

Section 404 of the CWA authorized EPA

“to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and . . . to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site, whenever he determines,… the discharge into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas…, wildlife, or recreational areas.”

33 U.S.C. § 1311(a)(emphasis added). The court focused on the highlighted language to affirm the scope of authority asserted by EPA. The court noted that while the statute authorizes the Corps to issue permits, Section 404(c) provides EPA with a “a broad environmental ‘backstop’ authority over the [Corps’] discharge site selection.” Mingo Logan Coal Company, slip op. at 8. The court further reasoned that the statute did not impose any temporal limit on EPA’s invocation of its withdrawal authority, specifically allowing EPA to withdraw a disposal area specification “whenever” it determines that disposal at a site will have an “unacceptable adverse effect” on the environment. Id. Finally, the court noted both EPA’s consistent historical assertion of its powers and the Corps’ acquiescence in EPA’s interpretation.

As noted above, unless reversed by the D.C. Circuit in en banc review or the Supreme Court on a writ of certiorari, this decision creates essentially unlimited regulatory uncertainty for any mining operation that requires a Section 404 permit. The uncertainty exists not only during the permitting process, but also for the entire time the permit is valid, since EPA can act to modify terms “whenever” it chooses. In those instances, the sole recourse for the permit holder is to challenge and EPA determination as to potential environmental effects. While such challenges can be successful, they present substantial obstacles.