[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                          EPA MINING POLICIES:
                  ASSAULT ON APPALACHIAN JOBS--PART I

=======================================================================

                                (112-29)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 5, 2011

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


         Available online at: http://www.gpo.gov/fdsys/browse/
        committee.action?chamber=house&committee=transportation



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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey        Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire       RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois             GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota             MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas              JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana               TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri                 HEATH SHULER, North Carolina
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania         LAURA RICHARDSON, California
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
STEPHEN LEE FINCHER, Tennessee       DONNA F. EDWARDS, Maryland
JEFFREY M. LANDRY, Louisiana
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
VACANCY

                                  (ii)


            Subcommittee on Water Resources and Environment
                       BOB GIBBS, Ohio, Chairman

DON YOUNG, Alaska                    TIMOTHY H. BISHOP, New York
JOHN J. DUNCAN, Jr., Tennessee       JERRY F. COSTELLO, Illinois
GARY G. MILLER, California           ELEANOR HOLMES NORTON, District of 
TIMOTHY V. JOHNSON, Illinois         Columbia
BILL SHUSTER, Pennsylvania           RUSS CARNAHAN, Missouri
SHELLEY MOORE CAPITO, West Virginia  DONNA F. EDWARDS, Maryland
CANDICE S. MILLER, Michigan          CORRINE BROWN, Florida
DUNCAN HUNTER, California            BOB FILNER, California
ANDY HARRIS, Maryland                EDDIE BERNICE JOHNSON, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
JAIME HERRERA BEUTLER, Washington,   GRACE F. NAPOLITANO, California
Vice Chair                           JASON ALTMIRE, Pennsylvania
CHIP CRAVAACK, Minnesota             STEVE COHEN, Tennessee
LARRY BUCSHON, Indiana               LAURA RICHARDSON, California
JEFFREY M. LANDRY, Louisiana         MAZIE K. HIRONO, Hawaii
JEFF DENHAM, California              NICK J. RAHALL II, West Virginia
JAMES LANKFORD, Oklahoma               (Ex Officio)
JOHN L. MICA, Florida (Ex Officio)
VACANCY

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Gardner, Michael B., General Counsel, Oxford Resource Partners, 
  LP.............................................................     9
Marks, Teresa, Director, State of Arkansas Department of 
  Environmental Quality, and Secretary-Treasurer, Environmental 
  Council of the States (ECOS)...................................     9
Peters, Leonard K., Secretary, State of Kentucky Energy and 
  Environment Cabinet............................................     9
Quinn, Hal, President and CEO, National Mining Association.......     9

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Gardner, Michael B., and Exhibits A-N............................    35
Marks, Teresa....................................................   163
Peters, Leonard K................................................   167
Quinn, Hal.......................................................   172

                       SUBMISSIONS FOR THE RECORD

Quinn, Hal, President and CEO, National Mining Association:

  Photographs of reclaimed land.................................. 25-27
  GEI Consultants, Inc., ``Final Report--Technical Review: A 
    Field-based Aquatic Life Benchmark for Conductivity in 
    Central Appalachian Streams,'' submitted to National Mining 
    Association, September 2010, Project 091380..................   182
  GEI Consultants, Inc., ``Final Report--Variability of Benthic 
    Invertebrate Communities of Headwater Streams in Southern 
    West Virginia,'' submitted to National Mining Association, 
    March 2011, Project 091380...................................   262

                        ADDITIONS TO THE RECORD

Peters, Leonard K., Secretary, State of Kentucky Energy and 
  Environment Cabinet:

  Letter regarding permit delays to Nancy Stoner, Acting 
    Assistant Administrator, Office of Water, Environmental 
    Protection Agency..........................................384, 385
  ``EPA Specific Permit Objection--CY2000 to Present''--
    Spreadsheet showing EPA objections to Kentucky permits.......   389
  ECOS, ``Objection to U.S. Environmental Protection Agency's 
    Imposition of Interim Guidance, Interim Rules, Draft Policy 
    and Reinterpretation Policy''................................   393
  National Mining Association Memorandum Opinion.................   395
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                          EPA MINING POLICIES:

                  ASSAULT ON APPALACHIAN JOBS--PART I

                              ----------                              


                         THURSDAY, MAY 5, 2011

                  House of Representatives,
                    Subcommittee on Water Resources
                               and the Environment,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:03 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Bob Gibbs 
(Chairman of the subcommittee) presiding.
    Mr. Gibbs. The committee will come to order, Water 
Resources and Environment Subcommittee of Transportation and 
Infrastructure. Welcome.
    I am going to start. My Ranking Member, Mr. Bishop, has to 
leave, and he wants to do his quick opening statement. So 
proceed.
    Mr. Bishop. Thank you, Mr. Chairman. I thank you very much 
for indulging my schedule.
    As a representative of Long Island, I am not faced with the 
day-to-day implications of surface coal mining. However, I have 
quickly learned that few issues have energized or engendered a 
more passionate response from industry, from mine workers, and 
from everyday citizens than recent actions by the current 
administration to provide oversight of surface coal mining 
operations.
    Mr. Chairman, your decision to hold this series of hearings 
provides an opportunity for our Members to learn more about 
this important issue. It also highlights the complex balance 
that policymakers face in providing well-paying jobs for 
American families, and ensuring the continued growth and 
economic health of our communities, and in protecting our 
natural environment for current and future generations. In my 
view, this balance is often times most evident in relation to 
providing safe and reliable sources of energy for our Nation.
    We recognize that energy generation is an essential element 
of modern society, and is critical to growing the U.S. economy 
and protecting American jobs. However, we are also coming to 
recognize that energy generation itself comes with a 
significant cost. As the experiences of the past few years have 
demonstrated, the goals of domestic energy generation and 
protection of the environment are not mutually exclusive.
    However, the reality is that the pendulum cannot sway too 
far to either side. I am hopeful that these hearings start the 
debate on reaching that careful balance point, and I yield back 
the balance of my time with my gratitude for your indulgence of 
my schedule.
    Mr. Gibbs. Thank you. I have an opening statement, but 
first of all I want to welcome everybody again to this hearing, 
``EPA Mining Policies,'' a discussion about assault on jobs. 
And we will have a part two of the hearing next week.
    Coal mining is an important aspect of the Nation's mining 
industry and is woven into the fabric of Appalachian life. 
Today coal is mined in 26 States. While Wyoming is the leading 
coal-producing State, it is closely followed by West Virginia 
and Kentucky. The United States consumes 1.1 billion tons of 
coal every year. Thirty-three percent of the coal--
approximately 390 million tons annually--comes from the 
Appalachian region of the United States, and 50 percent of the 
power in the Nation comes from coal as a fuel source.
    Coal is an abundant and domestic source of energy. Its use 
does not subject us to the whims of a foreign cartel, nor does 
it tend to thrust us into international conflicts. In addition, 
using domestic coal creates American jobs.
    While it is important to continue our research and 
development into new sources of energy, it is clear that coal 
will and must remain a major source of energy well into the 
future. And therefore, it is important that we keep coal as a 
safe and inexpensive alternative to other energy options.
    For this reason, I am concerned about the Environmental 
Protection Agency's recent policy decisions regarding coal 
mining activities. It would appear that the objective of the 
Agency is to make coal mining so expensive that alternative 
sources of energy will become more attractive. The effect of 
such a policy is to significantly drive up the cost of energy. 
Since energy cost is a factor in all aspects of our economy, 
this policy will act like an anchor that drags down our short-
term economic recovery and our long-term economic global 
competitiveness.
    While Congress has passed no law amending the Clean Water 
Act, and the Environmental Protection Agency has promulgated 
new regulations changing the Clean Water Act, EPA has issued 
draft and interim guidance and--substantively changes how the 
Clean Water Act applies to surface mining, and is using it as 
de facto law to unlawfully delay or kill Clean Water Act 
permits for surface mining operations in Appalachia.
    In doing this, I am extremely concerned how the 
administration is attempting to short-circuit the process for 
changing substantive Agency policy under the Clean Water Act 
without following the proper, transparent rulemaking process 
that is dictated by the Administrative Procedure Act. By 
ignoring the Administrative Procedure Act, EPA is changing the 
Clean Water Act and its implementing regulations. EPA is taking 
these actions with little regard to economic consequences, with 
little regard to national security, and most importantly, with 
little regard to the law.
    Much of the Clean Water Act is a delegated program. States 
that have received approval to implement Clean Water Act 
programs have demonstrated to the Environmental Protection 
Agency that they have adopted laws, regulations, and policies 
at least as stringent as the Federal laws, regulations, and 
policies, and these States have developed and demonstrated the 
capability to maintain existing and assume new responsibilities 
under the Act.
    Congress, in the Administrative Procedures Act and 
environment statutes, established a formal administrative 
rulemaking process that provides a mechanism for public 
comment, proposing amendments, or allowing States to object and 
provide its standards for judicial review of the agency 
actions.
    Section 404 of the Clean Water Act assigns the EPA to two 
tasks in regard to fill material. First, EPA must develop the 
guidelines in conjunction with the Corps of Engineers in 
determining whether to permit a discharge of fill material. 
Second, the Act confers EPA the authority, under specified 
procedures, to prevent the Corps from authorizing certain 
disposal sites. EPA guides the Corps' review of the 
environmental effects of the proposed disposal sites. For 
example, no permit shall be issued if it causes or contributes 
to any water quality standard violations.
    EPA may comment on the Corps' application of the Section 
404 guidelines to particular permit applications during the 
interagency review period required for each permit. In 
addition, EPA has limited authority under Section 404 to 
prevent the Corps from authorizing a particular disposal site. 
To exercise that authority, EPA must determine, after notice 
and an opportunity for a public hearing, that certain 
unacceptable environmental effects on municipal water supplies, 
shellfish beds and fishery areas, wildlife, or recreation areas 
would result. But, EPA does not have the authority to revoke an 
already issued Section 404 permit.
    Even though the EPA is very much involved in the permit 
application process along with the State, the Corps of 
Engineers, and other Federal agencies, the EPA is now revoking 
permits that have already been issued. That is illegal. That is 
not legal.
    EPA is clearly ignoring the Clean Water Act and other laws 
as it relates to surface mining activities in Appalachia. EPA's 
continued imposition of interim guidance, interim rules, draft 
policy or reinterpretation of policy has led to uncertainty 
regarding actions taken by the State and Federal regulatory 
bodies.
    In addition, it is simply not a responsible way for 
government to act. This regulatory overreach should be 
considered a property rights issue. What does it really mean to 
get a permit? Shouldn't it come with some certainty that the 
activity can move forward unencumbered, but within the bounds 
of the permit, particularly those activities on private lands?
    This no longer seems to be the case and it is going to have 
a stifling effect on not just mining operations in Appalachia, 
but on economic development projects nationwide. While the 
President and his administration talks a good game about job 
creation and removing unnecessary governmental burdens on 
business, in reality the Environmental Protection Agency is 
crippling economic growth with little or no benefit to the 
environment.
    I welcome our witnesses to the hearing today, and I look 
forward to hearing from each of you in the next coming minutes.
    But at this time I want to recognize the Ranking Member of 
the T&I Committee, Congressman Rahall.
    Mr. Rahall. Thank you, Chairman Gibbs. I appreciate very 
much your holding this hearing, and I welcome our witnesses 
today, and extend my appreciation for their participation.
    You know, the subject of this hearing is one of great 
interest to the Appalachian region. But it is of acute concern 
to the people in the district that I am honored to represent. 
This hearing is intended to delve into a matter that we, in 
southern West Virginia, have been struggling with for decades, 
for decades: The delicate balance between producing domestic 
energy while preserving our national resources and the health 
and safety of our coal field residents.
    In fact, I would wager to say that there is nowhere in this 
Nation--nowhere in this Nation--where our citizens know better 
the difficulty and the tensions entailed in trying to strike 
that balance than in the communities I represent.
    The people in southern West Virginia love--love--the 
natural beauty of our land. We want clean water, clean air. We 
want our children and grandchildren to live and breathe and 
grow up in clean environments. But we want jobs, as well. We 
want jobs for our children and grandchildren, as well.
    We do not condone coal companies' failure to ensure the 
safety of their miners and the well-being of the communities in 
which they operate. That is simply wrong. But it is also wrong 
for a Federal agency to circumvent the law and treat guidance 
as binding policy, particularly when that policy targets only 
one industry in only one region of the country. And I know you 
referred to that, Mr. Chairman, in your comments.
    As I have said before, the EPA has a legitimate role to 
play in the Clean Water Act permitting process. And early on in 
this administration, many had high hopes that the EPA would 
provide the clarity and the certainty that coal mining 
constituencies throughout Appalachia have been asking for, 
pleading for, for many years. Unfortunately, we have been 
disappointed, as a result of the guidance that the EPA issued 
in April of last year, guidance with far-reaching consequences 
that was made effective immediately, without the opportunity 
for the public to comment.
    Through that guidance, the EPA is not only dictating the 
Army Corps of Engineers 404 permitting process, but it is also 
intervening in State-issued 402 discharge permits, bypassing 
existing law and longstanding regulation in substituting a 
wholly new, barely studied, entirely confusing criterion for 
determining water quality, along with new timelines for review 
and approval of petitions. Instead of offering that clarity and 
certainty, the regime set forth in that guidance has thrown the 
entire permitting process throughout the region into utter 
turmoil.
    Nobody can say with any certainty what will gain a mine an 
approved permit, and what will earn one a refusal. Or, still, 
nobody can now say what it will take to keep an existing permit 
because the Agency has used criteria in that guidance to veto a 
permit that was granted years before the guidance document was 
ever written.
    As a result, coal miners in my district are consistently 
concerned about losing their jobs, and communities fear that 
they will not generate sufficient revenue to support schools, 
to keep the lights on, and to build basic infrastructure and 
provide basic services such as law enforcement.
    As well, the work to shore up the long-struggling economy 
of Appalachia and ensure that our children and grandchildren 
can have a future there is further hindered because the entire 
region is being subjected to inequitable treatment under 
Federal law, in comparison to the rest of the country. It is, 
after all, the Federal Water Pollution Control Act.
    Unfortunately, the effect of all this is that we are not 
finding common ground. Instead, the parties on all sides of the 
issue have dug their heels in even more deeply. So, I 
appreciate today's hearing, I appreciate the testimony that we 
are going to hear, and which I have already reviewed. And the 
next week I hope--it is my fervent hope that we may help to 
inform this government and guide this Nation in our long-
running endeavor to reach that delicate balance between energy 
development and the protection of our natural resources.
    Thank you, Mr. Chairman.
    Mr. Gibbs. Thank you.
    Mr. Duncan?
    Mr. Duncan. Well, thank you very much, Mr. Chairman, and 
thank you for calling what I consider to be a very, very 
important hearing. And I appreciate the statement that you have 
made and that the Ranking Member just gave.
    I am in my 23rd year in the Congress, and I have never 
heard as many complaints about any agency as I have heard about 
the Environmental Protection Agency over the past couple of 
years. It seems to me that that Agency has gone power-mad. And 
in any heavily regulated or over-regulated industry, what 
happens? First the small businesses are run out. Then the 
medium-sized businesses. And these industries end up in the 
hands of a few big giants.
    And so, extremely big government, slowly, over the years, 
becomes the best thing that ever happened to extremely big 
business. But it sure hurts the little guys and the medium-
sized guys.
    And then I have noticed over the years that almost all 
environmental radicals come from very wealthy or very upper-
income families. And perhaps they don't realize how much they 
hurt the poor and the lower income and the working people by 
destroying jobs and driving up prices. But that is what they 
do, and that is what they have done in so many instances, in so 
many industries over the years. And I have seen it. These 
groups, they don't want you to drill for any oil, they don't 
want you to dig for any coal, they don't want you to cut any 
trees. And they drive up these prices.
    I mean, for instance, President Clinton vetoed the 
expansion of drilling for oil in Alaska in the mid-1990s, which 
would have meant a million barrels of oil more a day coming 
down to this country, and gas prices wouldn't be anywhere close 
to where they are today if that hadn't happened. And yet, we 
have a Secretary of Energy in this administration who says we 
need to be paying the same price for oil as they pay in Europe, 
$8 or $9 a gallon. And, obviously, the goal is to force people 
to drive less.
    And the same thing, as you noted, Mr. Chairman, is 
happening in the coal industry. Apparently, environmental 
radicals want to destroy the coal industry so that people use 
less coal. But the United States has been referred to as the 
Saudi Arabia of coal. They oppose nuclear power, they oppose 
coal, they oppose oil, they oppose every kind of energy. And 
the only thing they really help, they help foreign energy 
producers. But they hurt our people, especially the lower and 
middle-income people.
    I want to tell you what has happened in east Tennessee. I 
was told several years ago that there were 157 small coal 
companies in east Tennessee. Now there are none. We used to 
drill--we used to produce about 12 million tons a year in coal. 
Now about 2 million.
    We opened up, at that time, in--around the late 1970s we 
opened up an office of surface mining in Knoxville. And very 
quickly, within just a few years, all the small coal companies 
and all the medium-sized companies were run out of business. 
Once again, big government had helped the big giants. But they 
had hurt all the little people.
    And what does this do? It drives up the utility prices. 
Everybody's utility prices are higher today because of this. 
And, once again, going back to President Clinton, he locked up 
the largest low-sulfur coal deposit in the world after the 
Ryati brothers in Indonesia became his biggest contributors. 
But, once again, it hurt the--there are a lot of people out 
there who are having trouble paying their utility bills now 
because of that action, and because we put so many limitations 
on coal production.
    I chaired this subcommittee for 6 years, and I want clean 
air and clean water as much as anybody. But you have to have a 
little balance and common sense in these areas, and you cannot 
always give in to the far left environmental radicals. And if 
we don't wake up and realize what is happening in this country, 
we are going to destroy this country, economically, and we are 
going to send even more jobs to other countries. We are going 
to help the foreign energy producers, like I said earlier.
    And people, all these college students getting out now 
wonder why they can't find jobs and have to work as waiters or 
waitresses in restaurants. And the left-wing environmental 
movement is a large part of that cause.
    Thank you, Mr. Chairman.
    Mr. Gibbs. Thank you. Mr. Crawford, you have an opening 
statement?
    Mr. Crawford. Yes, I do. Thank you, Mr. Chairman. I want to 
welcome all the witnesses today. I appreciate your time and 
your testimony. One in particular I want to say welcome, as a 
fellow Arkansan, to Ms. Marks. And I have the pleasure of 
introducing Teresa Marks today, the director of Arkansas 
Department of Environmental Quality, and the secretary/
treasurer of the Environmental Council of the States.
    As Arkansas is the natural State, Ms. Marks is responsible 
for protecting Arkansas' air, water, and land from the threat 
of pollution. And so we welcome her leadership before the 
committee today. Thank you.
    After graduating from the University of Arkansas at 
Monticello, Ms. Marks became a high school teacher where she 
taught secondary level students in geography, history, and 
civics. She returned to the classroom the following year, 
graduating from the Bowen School of Law at the University of 
Arkansas at Little Rock with a juris doctorate degree.
    In 1995 Ms. Marks began serving the State in the office of 
attorney general, a job that lasted almost 12 years. Eventually 
Ms. Marks was named Arkansas attorney general's public 
protection department deputy attorney general, where she 
supervised several lawyers and support staff in representing 
the interests of consumers and State agencies in consumer 
protection, antitrust, utilities, and environmental matters. 
These experiences make her well-suited to testify today 
regarding the EPA's practice of combining interim guidance with 
objection authority.
    EPA actions have the practical effect of ensuring that no 
permits are issued and none are reviewable, because they only 
provide interim guidance. The EPA should finalize their 
guidance so that courts are able to review whether the final 
guidance complies with the Administrative Procedures Act.
    Once again, Ms. Marks, I thank you for your leadership, and 
I look forward to your testimony today. I yield back.
    Mr. Gibbs. Thank you. Mr. Cravaack?
    Mr. Cravaack. Thank you, Chairman Gibbs and Ranking Member 
Rahall for holding these important hearings today on how they 
affect EPA as not only mining jobs in Appalachia, but also how 
it affects the mining operations in the mines of Minnesota's 
iron range.
    I would also like to welcome our witnesses, and thank you 
very much for taking your time out of your busy schedules to be 
here today to help educate us on the best way to proceed. And I 
look forward to hearing your testimony regarding the new 
procedures the EPA has developed for permitting Appalachian 
coal mining operations.
    As we all well know, about 50 percent of our Nation's power 
comes from coal. And 3 percent of that coal comes from the 
Appalachian region. Coal mining provides thousands of jobs and 
supports numerous communities throughout the region, and is the 
essential core of our energy production.
    I am concerned at some of the steps taken recently by the 
EPA to expand its oversight and to impose increased burdensome 
regulations on the coal mining industry. These new rules seem 
to bypass the established protocols, making the permitting 
process more complicated and more time-consuming.
    I find the EPA's new regulations and ``guidelines'' very 
troubling, and I worry about their unprecedented overreach and 
the effect that they are going to have on mining jobs and 
mining communities.
    I look forward to hearing from your testimony today from 
the witnesses on this current situation of the coal mining 
industry, and their thoughts on what steps can be taken to 
protect thousands of jobs, harvest our own natural resources 
smartly, and keep energy costs low.
    Thank you very much, and I look forward to hearing from 
your testimony. And I yield back, Mr. Chairman.
    Mr. Gibbs. Thank you. Mrs. Capito?
    Mrs. Capito. Thank you, Mr. Chairman. Thank you and the 
Ranking Member Rahall, who--I am a fellow citizen of the State 
of West Virginia, and we are--we have been blessed to be one of 
the largest producers of coal, and also natural gas.
    We consider that a gift in West Virginia, and we want to be 
able to weave the delicate balance that Congressman Rahall 
talked about between the economy and the environment. Recently 
it has been difficult for us to watch as, we feel, the 
administration has targeted our cheapest and most abundant 
resource, and that is our coal. We just feel that this is 
putting us on a path of higher energy prices at a time we can 
ill afford this.
    There is so much uncertainty and concern throughout the 
State of West Virginia--those who are involved directly in coal 
mining. But whether it is the local gas station or restaurant, 
any kind of retailer, we feel this. It just tremors all through 
every economic part of our State.
    So, as we are attempting to get our economy moving in the 
right direction, I believe we shouldn't be placing undue 
burdens on our manufacturers who are depending now on our 
reasonably priced energy. Simply put, coal is and must be a 
part of our Nation's energy portfolio.
    The title of the hearing that we are going to have today is 
``EPA Mining Policies: Assault on Appalachian Jobs.'' I have 
explained I live in Appalachia, and am a proud daughter of our 
State. But in several--in a meeting that I had with the EPA, 
point blank, that was the comment that was made to me, that the 
decisions that we make, we make regardless of the impact it has 
on jobs and the economy. And that was a pretty startling 
statement, especially in the economic times we are in now, but 
in any time, from an administration official.
    And so, I think it is time for us, as Members of Congress, 
to take back the issue of how we are going to weave the balance 
between the economy and the environment, do it in a smart way, 
a smart way for our future, but a way that eases the anxieties 
that we see every day in our State, and that I know a lot of 
other States across the Nation are feeling.
    Thank you. I yield back. Thank you, Chairman.
    Mr. Gibbs. Thank you. Just for a point of information, I am 
told they are going to call votes, two votes here, in a little 
bit. And we are watching here, we will just have to break and 
have to come back. So I just want to give you--we are trying to 
move forward as much as we can, but we will have to recess for 
a short period of time.
    At this time I want to introduce our panelists. We have a 
doctor, Leonard Peters, who is the secretary of the State of 
Kentucky energy and environment cabinet, and Congressman 
Crawford already introduced Ms. Marks. And we also have Mr. 
Harold Quinn, he is president of the National Mining 
Association, and Mr. Michael Gardner, who is the general 
counsel for Oxford Resources.
    At this time, Dr. Peters, we look forward to your 
testimony. Welcome.

 TESTIMONY OF LEONARD K. PETERS, SECRETARY, STATE OF KENTUCKY 
 ENERGY AND ENVIRONMENT CABINET; TERESA MARKS, DIRECTOR, STATE 
OF ARKANSAS DEPARTMENT OF ENVIRONMENTAL QUALITY, AND SECRETARY-
  TREASURER, ENVIRONMENTAL COUNCIL OF THE STATES (ECOS); HAL 
  QUINN, PRESIDENT AND CEO, NATIONAL MINING ASSOCIATION; AND 
MICHAEL B. GARDNER, GENERAL COUNSEL, OXFORD RESOURCE PARTNERS, 
                               LP

    Mr. Peters. Thank you, Mr. Chairman. members of the 
committee, thank you for the opportunity to testify today. I am 
secretary of Kentucky's Energy and Environment Cabinet, and we 
are the State's executive branch agency that has been 
delegated, by the Federal Government, primacy over 
environmental protection and coal mine permitting programs. The 
cabinet's mission also includes development of the State's 
energy resources in an environmentally responsible manner, 
including implementing programs for energy efficiency and 
renewable energy. I will provide a brief overview of my written 
comments.
    In October of last year, the Commonwealth of Kentucky 
intervened in support of the Kentucky Coal Association in its 
lawsuit against the U.S. Environmental Protection Agency. We 
took this very unusual step because we strongly believe that 
EPA's actions since April 1, 2010, when it issued its interim 
final guidance, are arbitrary, requiring Kentucky's regulators 
to adhere to permitting conditions that have not been 
promulgated in line with the Federal Administrative Procedures 
Act.
    Specifically, in our complaint the Commonwealth of Kentucky 
contends that, not withstanding the State's delegation under 
the Clean Water Act in developing water quality standards, and 
without promulgating a standard to require notice and comment 
procedures, EPA has, since April 1, 2010, unlawfully reviewed 
and objected to 402 permits proposed for coal mining operations 
in 6 Appalachian States, including Kentucky, for compliance 
with an unpromulgated water quality standard for conductivity.
    In fact, since EPA issued its interim guidance last April 
it has objected to permits that staff in my cabinet drafted in 
accordance to standards that EPA had, prior to April 1, 2010, 
supported. The interim objection letters reference the April 1 
guidance. From a regulatory viewpoint, we are concerned that 
interim guidance is not a legally defensible policy for the 
States or for EPA, yet it is still being used as a basis to 
object to State-delegated permitting actions.
    Now, as someone responsible for overseeing the State's 
environmental protection programs, I support regulations 
necessary to protect our land, air, and water resources. 
However, regulators and the regulated community need certainty 
in the process. In Kentucky, coal mining employs 18,000 people, 
brings in more than $3.5 billion from out of State each year, 
and pays more than $1 billion in direct wages. Kentucky is the 
third largest coal producing State.
    And our low electricity rates, based on our primary 
production of electricity from coal, allow us to produce a 
large share of the Nation's stainless steel, aluminum, 
automobiles, and other manufactured goods. It is for these 
reasons that Kentucky's governor, Steve Beshear, reminds us 
that coal is not a local issue, it is not a State issue, it is 
a national issue. And the importance of coal to our Nation's 
economy and security cannot be overstated.
    There are many discussions regarding states' rights on this 
and other regulatory issues. Governor Beshear and I recognize 
and respect that EPA has a responsibility and obligation to 
revise and update regulations and program requirements, as 
necessary, to protect human health and the environment.
    However, EPA should not create new regulatory requirements 
that have not undergone the appropriate congressional or 
rulemaking processes. As it is, today EPA is preventing, 
through its objection process, the delegated States from 
issuing permits with no recourse for the States or the 
regulated community. There is no recourse because, currently, 
an EPA permit objection is not deemed to be a final Agency 
determination subject to potential judicial review by an 
affected or interested party.
    Additionally, EPA is not bound by specific timeframes for 
making a final permit determination, and becomes the permitting 
authority for a permit action, instead of the delegated State. 
It is troubling that, absent a timeframe to make a final permit 
determination, whether that is permit issuance or permit 
denial, there is currently no obligation upon EPA to take any 
final action, leaving both the State and the regulated 
community in a prolonged state of uncertainty. This uncertainty 
costs jobs and affects the livelihoods of thousands of families 
in Appalachia.
    I will conclude by saying that we have not been silent on 
the issue with EPA, nor have we been in a combative 
relationship. As I mentioned, we respect their mission and 
authority to establish Federal rules to ensure consistency and 
fairness. My staff and I have been in ongoing discussions with 
our regional EPA administrator--that is in region 4--attempting 
to resolve the issues to the satisfaction of all parties: the 
EPA, the State, the regulated community, and the citizens of 
Kentucky.
    Unfortunately, I am not highly optimistic that such a 
resolution will occur, especially in light of a recent meeting 
with region 4 EPA. Indications are that these earnest 
discussions to arrive at resolution are not being accepted by 
EPA headquarters. I am disappointed that EPA Administrator 
Jackson can be so dismissive of such an important issue.
    Thank you again for the opportunity to provide these 
comments.
    Ms. Marks. Thank you. Thank you, Mr. Chairman and Mr. 
Ranking Member, for inviting me here today. And thank you, 
Congressman Crawford, for the introduction. I am Teresa Marks. 
I am the director of the Arkansas Department of Environmental 
Quality and an officer of the Environmental Council of the 
States, or ECOS, for which I am testifying today. ECOS is the 
membership organization of all the State environmental agency 
leaders.
    The reason I am testifying is to let this committee know 
that the States and ECOS are concerned about the manner in 
which the U.S. Environmental Protection Agency is combining 
interim guidance with its objection authority powers. This 
combination creates a situation in which EPA can require a 
State to insert virtually any provision EPA wants into a class 
of permits without the benefits of the due process procedures 
of the Administrative Procedures Act, such as public comment 
and judicial review. This practice is unwelcome and is 
potentially dangerous. It obviously thwarts the cooperative 
procedures that the APA was designed to foster. It is not a 
transparent way to create public policy.
    States issue the vast majority of water discharge permits. 
These permits must comply with Federal and State law and rules. 
EPA then reviews these permits, and the Clean Water Act allows 
EPA to object to them for cause. We believe this power was 
rarely exercised until recently.
    Last year, EPA issued an interim guidance to its regional 
administrators, instructing them to object to permits that did 
not follow the steps indicated within the guidance, although 
the guidance itself stated that it was not legally binding. EPA 
is not required to publish guidance, nor is it required to 
accept public comments on such guidance. EPA can issue interim 
guidance and expect full implementation in the permitting 
process, in spite of the fact that there is disclaimer language 
issued with the guidance, or that the guidance has not been 
finalized.
    Guidance, by the way, is seldom reviewed by the Office of 
Management and Budget, and so is usually issued directly from 
the Agency without further executive oversight. ECOS has no 
general concern about the use of guidance, or objection 
authority in principle.
    But there is a difference between issuing interpretive, as 
opposed to substantive guidance. EPA's use of interim guidance, 
coupled with objection authority to create substantive and 
binding changes in the permitting process amounts to final 
agency action, and warrants the due process protections of the 
Administrative Procedures Act. ECOS does not believe that EPA 
has ever attempted to require States to implement interim 
guidance by coupling it with objection authority until 
recently.
    Finally, there is another matter of how courts treat any 
Federal action that is not final. Courts routinely decline to 
review cases when requested to rule on a matter which does not 
involve final agency action. When EPA issues an interim 
guidance it follows that a court would not be inclined to 
review it, since it would not, obviously, be a final agency 
action.
    Similarly, courts refuse to rule on permits that have not 
been issued. This could create a situation in which EPA could 
object to a State-issued permit, then fail to make a permitting 
decision itself, or fail to make one in a timely manner, 
resulting in the permit applicant being stymied for months, or 
perhaps years, in obtaining a permit decision. Fortunately, in 
the case under discussion today, the court has indicated that 
EPA's actions could amount to final agency action, and 
therefore, reviewable by the court.
    We hope that the committee can see why the issue of interim 
guidance, coupled with the use of objection authority, is an 
unfair and indefensible position in which to place the States 
and the regulated community, and must not be allowed to 
continue.
    Thank you very much.
    Mr. Gibbs. There is a call to vote, but we have got 13\1/2\ 
minutes, so we will--you testify, then we will recess, then we 
will come back for Mr. Gardner.
    So go ahead, Mr. Quinn. Welcome.
    Mr. Quinn. Thank you. Good morning, Mr. Chairman, Ranking 
Member, Congressman Rahall, members of the subcommittee. I want 
to thank the subcommittee for holding this hearing to exam 
policies that continue to choke off job-creating opportunities 
in the Appalachian coal fields.
    Over 2 years ago, when the Nation was in the throws of a 
deep recession, and losing about 600,000 jobs a month, EPA 
embarked upon a series of actions that prevented coal companies 
from obtaining permits necessary to expand or start mining 
operations, projects that would preserve and create thousands 
of highway jobs in Appalachia.
    At the beginning of 2009 a backlog approaching 150 Clean 
Water Act 404 permit applications had developed, while 
litigation over the Corps' permitting process was being 
resolved. On February 13, 2009, the fourth circuit court of 
appeals issued a decision upholding the Corps' processing for 
permitting coal mines, thereby removing the obstacles to 
clearing the backlog. Shortly thereafter, EPA announced that it 
wanted to revisit some of the applications. Many had been 
pending for over a year. These are permits EPA already had 
ample time to review and raise any concerns to the Corps.
    In response to our reaction that it appeared EPA was 
instituting a permit moratorium, the Agency issued a statement 
that was ``EPA is not halting, holding, or placing a moratorium 
on any of the mining permit applications,'' plain and simple. 
As it turns out, EPA had already requested the Corps to develop 
a list of over 100 permits that were ripe for a decision by the 
Corps. And then, EPA unleashed a series of new policies in the 
form of memoranda and guidelines, altering the process, rules, 
and standards for issuing coal mine permits.
    EPA crafted a process that did not resemble anything in the 
law or the regulations. EPA commandeered the entire 404 process 
from the beginning to the end by displacing the Corps of 
Engineers. The new process allows the agencies to ignore all 
timeframes and the regulations for reaching decisions. New 
process allows EPA to run roughshod over the States that the 
Clean Water Act empowers to establish and apply water quality 
standards for waters within their borders.
    The centerpiece of this policy was a so-called enhanced 
coordinating process, outlined in a memorandum issued on June 
11, 2009. By the time the permit backlog--by this time, the 
permit backlog had grown to about 230 permit applications. How 
well did the so-called enhanced coordination process work? 
Well, well over a month later, the Army Corps of Engineers 
reported that EPA had yet to provide them with the criteria EPA 
was using to review the permits. In fact, detailed guidance was 
not issued until almost a year later, April 2010.
    A report by the Government Accountability Office requested 
by the Ranking Member, Congressman Rahall, found the following: 
``EPA and the Corps did not begin meeting with permit 
applicants until January and February of 2010, more than 6 
months after they created this new, enhanced process. EPA did 
not document the concerns it presented to the applicants. EPA 
and the Corps often met separately with the applicants, not 
together. EPA did not send to these meetings officials 
authorized to make any decisions.'' And finally, ``While the 
process imposes 60-day time period for reviewing the permits, 
the 60-day period did not begin until EPA said so. And even 
then, EPA was free to suspend or extend it.'' This hardly 
resembles a coordinated process, let alone an enhanced one, or 
one that we were told would lead to expeditious review of these 
permits.
    Companies have been worn down. Today, far more permits have 
been withdrawn by companies than permits issued. And most 
permits are still languishing in a regulatory limbo. Permits 
delayed are jobs denied. If the purpose of all this policy is 
to discourage new investments and job-creating opportunities, 
well, EPA can declare a mission accomplished.
    Let me close by saying that when you talk to coal miners 
about mining coal, you hear in their voices the great pride 
they take in what they do and how well they do it. They often 
speak about their families, their country, and jobs. But the 
jobs they speak about first are not their own jobs. Rather, 
they typically talk about all the other jobs they know depend 
upon them doing their job well. Today I often get questions 
from them about why their government at times seems to put so 
much effort into working against them, rather than supporting 
them in what they do for their country. I wish I had a good 
answer; they certainly deserve one.
    Thank you very much.
    Mr. Gibbs. Yes, we are going to have to recess to go vote 
for two votes. There is still almost about 9 minutes in this 
first vote, and it will be a 5-minute vote after that. So we 
will try to reconvene before--between 11:00 and 11:15.
    So, when we are back we will have Mr. Gardner's testimony, 
and then I look forward to having questions and dialogue. So 
please excuse us. Thank you.
    [Recess.]
    Mr. Gibbs. Thank you. Committee will come back into order.
    And at this time I welcome Mr. Gardner for your testimony. 
The floor is yours.
    Mr. Gardner. Good morning. My name is Michael Gardner, and 
I am general counsel of Oxford Resource Partners, a top-20 
domestic producer of steam coal in the largest surface coal 
mining company in Ohio. In addition to operations in northern 
Appalachia in Ohio, West Virginia, and Pennsylvania, Oxford has 
operations in western Kentucky in the Illinois basin. I have 
been asked to share some of Oxford's experiences in dealing 
with EPA's mining policies. But first, on behalf of Oxford, let 
me thank you for conducting these oversight hearings, and for 
the opportunity to present my testimony.
    It is imperative that this Congress carefully review EPA's 
recent activities in the area of water resources policy. On 
June 11, 2009, EPA announced its enhanced coordination 
procedures, and published an initial list of 108 section 404 
permits. I sometimes refer to this as EPA's black list. On 
September 11, 2009, EPA published its final initial black list 
of permits subject to enhanced coordination. Only four of 
Oxford's eight permits on the initial list made the final cut, 
the others having been previously issued.
    And then, on September 18, 2009, Oxford's CEO, Chuck 
Ungurean, sent an urgent letter to EPA Administrator Lisa 
Jackson. This was a plea, as a stakeholder, to meet with EPA to 
discuss the critical nature of three of our four permits on the 
black list. No response has ever been received.
    The first project on EPA's final black list that I want to 
highlight for you is Oxford's Kaiser Mathias permit. It is the 
poster child for the absurdity of EPA enhanced coordination. On 
November 4, 2008, Oxford submitted an application for a 
Nationwide 49 Permit. Nationwide 49 is a general section 404 
permit, pre-approved by EPA specifically for remining 
activities, because the benefits of remining so clearly 
outweigh any adverse environmental impacts.
    In this instance, Oxford proposed to backfill 4\1/2\ miles 
of dangerous high wall, reclaim 450 acres of previously 
unreclaimed mine land, and restore all the land to meet current 
standards. It wasn't until March 5, 2010, that EPA finally 
authorized Kaiser Mathias. This was after 9 months of EPA 
enhanced coordination of a permit that should never have been 
on EPA's radar to begin with, and a permit decision that was, 
quite literally, a no-brainer.
    But it doesn't stop there. Three days later, EPA published 
a press release, taking credit for an 80 percent reduction in 
impacts to streams, and a 70 percent reduction in impacts to 
wetland at Kaiser Mathias, all as a result of its enhanced 
coordination. The only problem with this self-serving press 
release was that the starting points for these claimed 
reductions were completely fabricated. Oxford could not have 
submitted a Nationwide 49, had it proposed the kind of impacts 
for which EPA claimed a reduction. And there was no mention of 
Nationwide 49.
    Next I would like to share with you what happened at our 
Halls Knob permit. On October 2, 2008, Oxford submitted an 
individual section 404 permit application. Almost a year later, 
on September 11, 2009, Ohio EPA issued its section 401 
certification that the project met stringent State water 
quality standards. One week later, in our September 18th plea 
to EPA Administrator Jackson, Oxford asked about EPA's 
environmental concerns, given that Ohio EPA had none. It was 
not until May 27, 2010, after nearly 1 year of EPA enhanced 
coordination, that we found out what EPA wanted to exact from 
Oxford for this permit.
    On June 6, 2010, the court drafted the permit, as 
instructed by EPA, with a host of special conditions that 
Oxford had never seen before and could not accept. EPA 
recommended denial of the permit without these special 
conditions. Now faced with shutting down the mine and laying 
off 25 coal miners, Oxford went to its congressional delegation 
for help. On June 18, 2010, a meeting was held with the EPA in 
the office which I believe is now occupied by Chairman Gibbs. 
And on July 12, 2010, the Corps reproffered the permit with 
marginally acceptable conditions after 13 months of EPA 
enhanced coordination.
    These two examples, and the others being submitted to the 
committee for the record represent five Oxford section 404 
permit applications. Permit delays from EPA enhanced 
coordination have put at risk more than 200 direct coal mining 
jobs and thousands of secondary jobs, which translates into 
nearly 2 million tons of annual coal production.
    At a time when our Nation still needs reliable, affordable 
energy to fuel economic growth and prosperity, EPA's water 
resources policies are crushing employment opportunities and 
thwarting capital investment in the coal industry that provides 
and can create high-wage, shovel-ready jobs still needed and 
valued in Appalachia. Thank you.
    Mr. Gibbs. Thank you. I will start with some questions. We 
will have a round of questions, because there is a lot of, I 
think, information that needs to be brought to light.
    I am going to start with Dr. Peters, since you are a 
chemist, by trade, I believe. I think I want to have a lot of 
discussion on the enhanced coordination, and also the 
conductivity test. Can you, first of all, explain the 
conductivity test, and then numerical versus narrative, and how 
it relates to what is going on?
    Mr. Peters. The conductivity is a measure of the actual 
electric conductance that water would carry, and it is affected 
by various species that are in water. So, you can have various 
species in that water that may give the same conductivity, but 
in fact, they could have different biological impacts, 
different chemical impacts.
    So, conductivity is a measure that, by itself, does not 
give the complete picture of the contaminants in water. And 
what EPA has done is specified limits of 500 microsiemens per 
centimeter as the break-off point in that particular regard, as 
opposed to a narrative water quality standard, where you look 
at much broader issues, and not simply conductivity in 
assessing water quality.
    Mr. Gibbs. So then, numerical standard and conductivity, it 
is narrowly focused, so it is maybe not giving a whole picture, 
but it could distort the picture?
    Mr. Peters. It is certainly not giving you the whole 
picture, because you could have the conductivity of--I mean, 
pick a number, 600 or 700 in one place. You could have the same 
conductivity in another place. And the chemicals making up 
that, or that are causing that conductivity, could be 
distinctly different, and they could have different impacts on 
health and welfare.
    Mr. Gibbs. Now, in different areas, geographical areas, 
different streams, would you get different results?
    Mr. Peters. Very frequently. One of the dominant features 
of conductivity is the geology in the area, so that the geology 
that you have in the Appalachian area is going to be different 
than what you might have in Kentucky, at least, in our western 
coal fields, so that the same conductivity, because of 
differing geologies, would probably represent different 
chemical constituents in that water.
    Mr. Gibbs. So you could get false assertions?
    Mr. Peters. You certainly don't get the entire picture, and 
you would not be able to make--I have argued, starting 2 years 
ago, that they shouldn't focus simply on conductivity in and of 
itself. It is an early indicator. It is not the conclusive 
indicator that you need to really evaluate the quality of the 
water.
    Mr. Gibbs. And so my understanding is you're head of the 
Kentucky EPA?
    Mr. Peters. Yes.
    Mr. Gibbs. OK. And that is pretty much the standard that 
the U.S. EPA is using?
    Mr. Peters. That is the standard that came out in the 
interim guidance on April 1, 2010.
    Mr. Gibbs. And in regards to interim guidance, were you, as 
the State Agency, able to object or was there hearings on that 
new procedure?
    Mr. Peters. No, there were not hearings on that new 
procedure. We had to adapt that particular procedure.
    And if I could amplify for--just very briefly--over the 
last 7 months--well, prior to April 1st, we had been putting in 
permits, 402 permits, the water permits, that were being 
accepted by EPA even as late as March 31st. Suddenly, on April 
1st, those permits that we had been submitting were no longer 
acceptable.
    We had been in discussion for 7 months with region 4, which 
is the cognizant region that we have, to try to develop a 
template permit. What would be an acceptable permit? My staff 
and region 4 staff developed a permit that was acceptable. We 
thought we had an agreement, and I just found out, actually 
yesterday, that that agreement was overruled in EPA 
headquarters.
    Mr. Gibbs. So this practice was changed when the 
administration changed.
    Mr. Peters. That is correct.
    Mr. Gibbs. OK. Let's where I want to go next. There is so 
many questions in my mind, here. I am almost out of my time. I 
am going to go to Representative Rahall for his--for a series 
of questions, and we will rotate.
    Mr. Rahall. Thank you, Mr. Chairman. I would like to ask 
the panel--you heard both myself and Chairman Gibbs reference 
during our opening comments concerns with EPA applying national 
standards and practices in order to target a particular 
industry--a single industry, if you will--and a single area of 
the country: coal mining in Appalachia, of course, which is 
part and parcel of the April 2010 guidance statement.
    Are any of you aware of any other instance where EPA has 
ever done this? And are you aware of any other situations where 
EPA is seeking to enforce conductivity as a de facto water 
quality standard?
    Mr. Gardner. I am not----
    Mr. Quinn. Congressman Rahall, no, I am not aware of, in my 
career, of ever seeing something like this: one industry, one 
region, and this type of approach.
    Mr. Rahall. That is a negative from all four of you, then?
    Ms. Marks. Yes, sir.
    Mr. Rahall. All right. The April 10th guidance document 
became effective immediately with a public comment, almost as 
an afterthought. To those of you on this panel, is this 
practice normal in your dealings with the Federal Government, 
to have such a guidance issued and then the public comment just 
kind of thrown in at the last minute?
    Mr. Quinn. Not for something that changes the rules of the 
game so substantially. And what should have been done was, if 
it was some science they wanted to have reviewed, is peer 
reviewed it out in the open, as well as in terms of their 
policies, since they are all substantially changing the rules 
of the game in midstream.
    Mr. Rahall. Anybody else wish to comment?
    Ms. Marks. Yes, sir. I think the big problem that ECOS--
from an ECOS point of view--is that there is a difference 
between interpretive and substantive guidance. Interpretive 
guidance, of course, is necessary, and it needs to be issued, 
and it serves a purpose and would probably block things or jam 
things up if it had to go through the procedural due process 
requirements of the EPA. But when you are dealing with 
substantive guidance, you are dealing with almost a rulemaking, 
basically, and you are not--you do not have those due process 
requirements that are necessary to make sure that everyone has 
a chance to be heard, and that there is a chance for judicial 
review. So, that is our concern.
    Mr. Rahall. So interpretative and minor clarifications are 
a standard----
    Ms. Marks. Yes, sir.
    Mr. Rahall [continuing]. But not such a major----
    Ms. Marks. They basically change the rules.
    Mr. Rahall [continuing]. Such a major ruling?
    Ms. Marks. Yes, sir.
    Mr. Rahall. To have it become the force of law, almost.
    Ms. Marks. Yes, sir.
    Mr. Gardner. I would agree with Ms. Marks. And our 
experience in Ohio is that when--and we are familiar with the 
Agency's publishing guidance and not necessarily of a 
substantive nature, though, but to interpret their existing 
rules and regulations. And when they do that, in Ohio, it has 
always been a collaborative effort, where you meet with all the 
stakeholders and you pound things out and you come up with, you 
know, a consensus, if you will, of how this is going to apply, 
how this is going to work to move things forward. That never 
happened in this instance, that I am aware of.
    Mr. Rahall. Yes. I know we are here, and this committee's 
jurisdiction is over the Clean Water Act and its application to 
coal mining. But I do not believe we could have this 
conversation without reference to the Federal office of surface 
mining and SMCRA. I, having been in the Congress when SMCRA was 
enacted, served on the committee when it was passing the law in 
1977. And I am sure the witnesses know that SMCRA explicitly 
provides for a variance from the requirement that mine lands be 
reclaimed to their approximate original contour if certain 
conditions are met--in layman's terms, mountaintop removal 
mining and valley fills--provided that post-mining land use 
supports some type of economic development--industrial, 
commercial, agricultural, and the like.
    Let me ask you, Mr. Quinn, are you aware of EPA challenging 
proposed post-mine land uses of this nature as part of its 404 
permit reviews?
    Mr. Quinn. Yes, I am. Two examples, I guess, for brevity 
purposes.
    In your State, if I recall, there was two--three 
operations, and two operations involved King Coal Highway. And 
the post-mining land use was designed to allow the road bed, 
flat or rolling terrain, to accommodate the road bed for that 
highway. My understanding is there was an estimate that that 
work would save the taxpayers $100 million.
    There was another case where EPA questioned the need for 
post-mining land use being proposed down in Logan County, in 
your district, for leaving land suitable for an emergency flood 
housing, and they questioned the need for such housing. And, of 
course, anybody who is familiar with that county down there 
knows that flooding is a situation that emergency housing is 
necessary. And this was to be operated by FEMA.
    Mr. Rahall. Thank you. I appreciate the Chairman's 
indulgence while I ask one more question of the whole panel. I 
think it is extremely important that the science used to 
support government environmental policies be peer-reviewed. Are 
any of you aware of, and can you comment on the science used to 
support the EPA's April 2010 guidance, and whether it was peer 
reviewed?
    Mr. Peters. There was a peer review that took place 
subsequent to the issuance of it. It had not taken place prior 
to it. And there are differing views on the science. At this 
point in time, probably the best terms to use for the science 
is that it is incomplete, at best. It is not totally 
conclusive, in that particular regard.
    So, there is certainly not unanimous and uniform agreement. 
But it was only peer-reviewed after the interim final guidance 
was issued, and that was a number of months after the case.
    Mr. Gibbs. Dr. Peters, would it be fair to say that they 
developed the policy and then kind of figured out what the 
science should be?
    Mr. Peters. Well, they did have some science ahead of time, 
but that was science that had not been peer-reviewed prior to 
that point in time. And I think we all recognize that the peer 
review is a very important step in evaluating the quality and 
the voracity of that science.
    Mr. Gibbs. Representative Cravaack, do you have questions? 
Go ahead.
    Mr. Cravaack. Thank you, Mr. Chairman. Mr. Gardner, if I 
could, sir, why do you think the EPA issues guidance? Why don't 
they just issue a rule? What is your opinion on that?
    Mr. Gardner. Well, I think the Administrative Procedures 
Act is, you know, difficult. It is a long process. And guidance 
documents are easy to generate. On every guidance document I 
have ever seen there is always a disclaimer that says, ``This 
guidance document does not have the force of law,'' yet at the 
same time it is being foisted on the industry, and you are 
required to meet the standards that are established in that as 
binding conditions for getting a permit.
    Mr. Cravaack. So, what you have found in your experience is 
that these guidances have, in de facto, become rules.
    Mr. Gardner. Absolutely, yes.
    Mr. Cravaack. That is what I hear. Thank you, sir.
    Also, Director Marks, in your opinion as a State 
legislator, do you feel the EPA has overreached its authority?
    Ms. Marks. In a situation where EPA--such as this, where 
EPA has combined their guidance authority with their objection 
powers to make it basically binding, to make sure that they 
guidance followed in permitting decisions made by the States, 
yes sir, we do think that they have gone too far. As far as 
that goes, there should be due process and a chance to comment 
from the States.
    Mr. Cravaack. And what rule do they state that says that 
they can interfere with states' rights?
    Ms. Marks. I am not aware of any rule. The response, 
generally, we have received from EPA is that they use guidance, 
and they have used it for years, which is absolutely true.
    And we see the need for guidance. We don't think that there 
is a problem with the use of guidance, as long as that guidance 
is not used to basically change the rules and make them binding 
on the regulated community and the States, without that ability 
to challenge.
    Mr. Cravaack. OK. Thank you very much.
    Mr. Quinn, sir, compared to previous permitting timelines 
and costs, how do you expect the future--the expected timelines 
and cost to change in this new process?
    Mr. Quinn. Well, right now it is taking several years, 
where it used to take us maybe 4 to 6 months. So now are seeing 
an increase four or five-fold.
    In terms of cost, it is--what is happening now is it is not 
only taking longer, but with the conditions they are trying to 
place on these permits, the productivity of these operations is 
dropping. And, in fact, the Energy Information Administration 
recently came out in its energy outlook and has lowered the 
productivity projections for surface coal mines in Appalachia 
by 20 percent. That is a very substantial regulatory penalty 
that is being assessed against the operations in this region.
    Mr. Cravaack. Yes, we are experiencing the same kind of 
operations in Minnesota, as well, in our iron range region. We 
are trying to get some open pit mining done, as well, for 
precious metals. So we are finding the same kind of--the 
permitting process in the coal industry is also reflective of 
other mining operations, as well.
    Mr. Quinn. Mine permitting in this country is the largest 
impediment to new domestic investment in the mining industry in 
this country, with taking up to 10 years to get permits.
    Mr. Cravaack. And I totally agree with you on it being a 
national security issue, as well. So--and depending on our own 
natural resources. So I agree.
    Dr. Peters--thank you, sir. Dr. Peters, why do--what do you 
think the driving force is behind the EPA's changing their 
process?
    Mr. Peters. I wish I could answer that. It is very 
difficult----
    Mr. Cravaack. I really wish you could, too.
    Mr. Peters [continuing]. To do anything other than 
conjecture at this particular point in time. When you ask EPA 
what does a good mining permit--what does an acceptable mining 
permit look like, we cannot get a definitive answer today. So 
when you cannot get that definitive answer, you begin to ask 
yourself, ``What is the motive?'' And all you can do is 
conjecture and hypothesize. And being a scientist, I would 
rather not hypothesize on that.
    But it is definitely stymying the industry. It is not--not 
only is it not valuable for the--hurting the industry and the 
regulatory community in the State, it is really, in a very 
significant way, breaking that Federal-State cooperative 
partnership to protect the environment that we had for so many 
years.
    The only thing I could say is if that partnership is not 
entirely broken at this point in time, it certainly is severely 
fractured. And that is, I think, one of the fatalities of--or 
certainly one of the fatalities of what we are seeing at this 
point in time.
    Mr. Cravaack. I am almost out of time. But America's 
Commitment to Clean Water Act was passed in the House last 
year, and did not go forward. But what I am seeing now is they 
are trying to implement the America's Commitment to Clean Water 
Act, not through legislation, but through mandatory rulemaking. 
And do you see that, as well?
    Mr. Peters. That is certainly one of the reasons that 
people are offering for it, yes.
    Mr. Cravaack. Thank you very much, sir. And, Mr. Chairman, 
I yield back.
    Mr. Gibbs. Thank you. I think we are hitting conductivity 
pretty good, but I have got one more follow-up on that of Dr. 
Peters. I have got a report here that talks about the guidance 
effectively established the regionwide--and we talked about the 
geographical problems and issues with that--but the 
conductivity levels should not exceed 500 siemens.
    It is my understanding that this bottle of water exceeds 
that level. Would that be true?
    Mr. Peters. I cannot speak for that bottle of water, but 
there are many bottles of water that do exceed that value, yes.
    Mr. Gibbs. So you are telling me that the standard that 
would be applied under the permit to pass the test would have 
to be cleaner than most bottled water?
    Mr. Peters. That is correct. And it varies from region to 
region to region. But, yes, absolutely.
    Mr. Gibbs. That is absurd, but I mean I--that is hard to 
understand, but that makes it, gives me a red flag that there 
is a different agenda going on here.
    I want to talk, Mr. Gardner, to the enhanced coordination. 
In your written testimony, it talked about, on the 
applications, filed--it was kind of like going in a black hole, 
you couldn't get any answers, you couldn't get back--can you 
expound a little bit on the enhanced coordination? I believe 
the enhanced coordination is dealing with the Corps, the EPA, 
and the Department of the Interior, is that correct?
    Mr. Gardner. In theory, yes. But, I mean, it is all being 
directed by U.S. EPA, you know. The example I gave you, Halls 
Knob, that was a permit that, you know, we received a copy of a 
letter from U.S. EPA to the Corps saying, ``These are the 
special conditions to put in the permit,'' and the Corps 
obediently drafted the permit with those conditions in it.
    So, as far as coordination goes, you know, we tried to 
coordinate with the Corps on it, and they said, you know, ``You 
are not going to get your permit unless you have these 
conditions in it,'' and that is when we went to the 
congressional delegation.
    Mr. Gibbs. Let me just----
    Mr. Gardner. You know----
    Mr. Gibbs. It is my understanding, then, that the enhanced 
coordination is something that kind of supersedes that, maybe 
the whole permit application process too, that they can put 
road blocks up in front of you before you really get into the 
permit process with the Corps?
    Mr. Gardner. Yes, exactly. I mean initially it came out 
they published a list of permits that were subject to enhanced 
coordination. And I call it the black list, not just because it 
was permits subject to enhanced coordination, but because, 
literally, the permits went into a black hole. You couldn't get 
any information out of EPA, you know, why your permit got on 
the list, how you get your permit off the list. It was just, 
you know, radio silence for months and months and months. And 
then they come out, you know, and start issuing the permits.
    But that's been our experience with enhanced coordination. 
The procedures that they are deploying are more suitable for 
courtroom litigants than the regulatory process, where you 
first--you know, you ignore your opponent and then you stall 
and delay and--until they either run out of money or time or 
both, and they are forced to settle or go away.
    Mr. Gibbs. I don't believe there is anything in the Clean 
Water Act or law anywhere that talks about enhanced 
coordination. So I don't know where they get the jurisdiction 
to do that. I don't know if you agree or not. When did this new 
policy and procedures come into effect?
    Mr. Gardner. I would say with the publication of their 
announcement June 11, 2009. Coordination is kind of a term of 
art. You know, we have been coordinating with the Corps years 
before that to get our permits. The initial step in that 
process is generally what is called a jurisdictional 
determination, where you submit a preliminary mine plan to the 
Corps, and they go out and review where the jurisdictional 
waters are that are proposed to be impacted, and that is 
coordination. Enhanced coordination is a, you know, figment of 
EPA's imagination.
    Mr. Gibbs. Oxford, I believe, is surface operations, right?
    Mr. Gardner. Correct.
    Mr. Gibbs. In your written testimony--I was reading it last 
night--you talked about filling in where high walls are, the 
dangerous high walls, which would be, I guess, hundreds of 
feet. Can you explain a little bit, you know, the reclamation 
process that Oxford uses, and what the end result is, and the 
regulatory process you have to go through?
    Mr. Gardner. Sure. I mean, ordinarily, most all of our 
operations are remining operations, to some extent. That means 
we are going back in to areas that were mined before SMCRA was 
passed in 1977, where there were, you know, miles of exposed 
high wall hundreds of feet high that are dangerous for people 
driving ATVs in the wilderness and falling off of high walls, 
or they were abandoned final-cut pits from the prior mining 
that had acid mine water in it.
    And we are--in our permitting operations, we proposed to go 
back in there, remine the area, which means we go back in and 
we have to get rid of all the toxic water that was there, and 
we will go back in and remove additional coal reserves that 
were left, because it was easy coal that was taken, you know, 
40, 50 years ago. We will go back in and remove additional coal 
and then backfill, from our operations, the hundreds of feet of 
abandoned high wall and restore the land to meet current mining 
standards.
    Mr. Gibbs. Did you give this to us, the committee, these 
pictures?
    Mr. Gardner. I think that is from Mr. Quinn, but----
    Mr. Gibbs. Oh, OK. Well, I guess, Mr. Quinn, I will just go 
to you here. I guess I am out of time, but I will yield myself 
a little bit more. I don't think the Ranking Member will mind.
    I understand these are pictures of reclaimed land?
    Mr. Quinn. Yes, that is reclaimed land. That is in eastern 
Kentucky, where we have an arrangement with the Rocky Mountain 
Elk Foundation. We have introduced the largest set of Rocky 
Mountain elk in the east.
    Mr. Gibbs. Pretty nice looking pictures to me with the elk 
on there. And I was reading--I think it was your testimony--
that there has been some issues on permitting on your--I mean 
you're doing a mining operation during the permit to get the 
reclamation plans, I guess. There was some issues with the EPA 
about the issue of wildlife being on the reclaimed land and 
the--I guess, lack of better term--manure from the wildlife 
coming into the streams. Is that an issue?
    Mr. Quinn. Well, they are questioning, as Mr. Rahall is 
indicating, they are questioning the post-mining land uses that 
are being chosen by the companies. In some cases it is wildlife 
habitat, in other cases it is industrial development or housing 
development. So they are getting way outside their scope and 
sphere by getting into the areas that the office of surface 
mining and the State mining regulators are the ones who are 
qualified and empowered to make those decisions.
    Mr. Gibbs. OK, thank you. Mr. Rahall?
    Mr. Rahall. Thank you, Mr. Chairman. I have just a general 
thought I would like to throw out to the panel, as I am sitting 
here listening to questions, especially those from the 
gentleman from Minnesota. And I have thrown this out before in 
the public arena.
    But in looking at why all this is happening to this generic 
arena of applications that are out there, is it possible that 
during the previous administration, that perhaps EPA was told 
not to exercise their legal right under the CWA to review these 
permits? In other words they were told to stay out.
    And with the advent of a new administration, could there be 
those within the EPA that felt they were wrongly shut aside 
during the previous administration, and now, with a vengeance, 
want to come back, and we see the pendulum swinging too far the 
other way, in which they are exercising a personal vendetta or 
agenda, whichever you want to use, because of not being allowed 
to do what they thought was proper during the previous 
administration?
    In other words, pendulum went too far one way, now it is 
going too far the other way. Don't we need to get back to the 
middle?
    And I don't reference permits that have been granted, such 
as a spruce permit in my district. That is totally beyond what 
I am talking about. I am not talking about previously approved 
permits being revoked. But I am just talking about the generic 
field of surface mine applications out there.
    Mr. Gardner. I will take a stab at that for you. I don't 
know that there was any administration that told EPA to stay 
out of coal mining permits. But the Clean Water Act itself 
delegates responsibility under section 404 to the Secretary of 
Army and the Corps of Engineers, and wisely so, because they 
are more familiar with it. EPA has its hands full with, you 
know, an number of different regulatory programs.
    And I think it is fair to say, though, when this 
administration came in, they stepped up the efforts, 
particularly after the fourth district court of appeals 
overturned or reauthorized or upheld the Corps' authority to 
issue 404 permits under the Clean Water Act. That is when they 
really ramped up their efforts to get involved with reviewing 
what was previously the Corps' exclusive jurisdiction.
    Mr. Quinn. Let me say that I have heard that, and perhaps 
that might be some motivation, but I would say the following 
things.
    One, I think it is more likely that coal mine permitting 
was not a priority. Nobody ever told them they couldn't 
comment. It was not a priority because it is already well 
regulated. You already had the Surface Mining Control 
Reclamation Act, which already evaluates much of what EPA now 
says it wants to look at, which is operation plans, water 
impacts, water management, post-mining land use, things along 
those lines.
    If EPA felt it was shunted aside in the prior 
administration, then the answer would have been return to their 
normal authorized role, which is to file comments with the 
Corps of Engineers about pending permits. Instead, they have 
created a process that has displaced the Corps of Engineers 
from the front end of the process. The Corps--actually gets to 
screen which permits it will allow the Corps to actually 
review. And at the end of the process, whatever decision is 
made by the Corps has to align with what EPA wants.
    So, if that was the sole concern, which was commenting, 
that is--they have gone well beyond that.
    Ms. Marks. Yes, sir. I would have to say that I have not 
heard anybody express that concern among the States. ECOS does 
not have an official position on that issue. But I have not 
personally been concerned that there has been some type of 
policy swing in that regard. And I have not heard other States 
express that.
    The concern that we have, of course, is it is easier--it is 
certainly quicker, it is easier to go ahead and institute 
guidance. And if you can do that without the due process 
issues, then it is easier to get it in place and get it 
started. The problem is, when you are dealing with these 
substantive issues, you just cannot ignore the due process. It 
has to be in place, and--for the States to have a cooperative 
relationship with EPA. And that is certainly what we strive to 
have, is a cooperative relationship.
    Mr. Rahall. Mr. Peters?
    Mr. Peters. I was not present in--I was not in my current 
position during the prior administration, during President 
Bush's administration, so I have no firsthand knowledge of 
that. Some of my staff have said that is the case, but that is 
simply what they have indicated.
    Mr. Rahall. Some of your staff who were around during the 
previous administration?
    Mr. Peters. That is correct.
    Mr. Rahall. Thank you.
    Mr. Gibbs. Before I go to you, I want to ask for unanimous 
consent to have these put in the record, Mr. Quinn, these 
pictures of the reclaimed land.
    [No response.]
    Mr. Gibbs. I heard no objection. Enter into the record.
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    Mrs. Capito. Thank you. Thank you. Pardon if you have 
answered this already, but as you have probably figured out, we 
like to have things answered several times, to make sure we 
clearly understand.
    Part of the things that I am hearing in West Virginia, in 
terms of working with the EPA and trying to reach a sense of 
fairness is the prolonging, or the time spans are becoming so 
much lengthier, and--that you are really not getting a yes or a 
no answer, it is just a continuation of changing the process or 
redoing the process. And sometimes I think in life it is better 
to get a no than a maybe. Or, ``That might work.''
    Do you find this to be the case, that it is more of a 
moving the goal post with the different provisions and working 
with the Corps and the DEPs, or do you find that it is more a 
sense of an absolute answer, one way or the other? I am curious 
to know about that. Dr. Peters?
    Mr. Peters. Certainly in our case it has greatly prolonged 
the process. And it has prolonged the process to the point 
where some companies are simply withdrawing permits because 
they do not see the end in sight. And that prolonging of the 
permits, of course, costs them money.
    Mrs. Capito. Right.
    Mr. Peters. And they have to make a business judgment as to 
whether or not they can persist for that length of time.
    But, you know, our data clearly show that it is much, much 
longer to get a permit today than it was 3 years ago or 5 years 
ago. We have, right now, 162 permits that we are about ready--
we are trying to figure out what we need to do with them so 
that they will be acceptable to EPA. And they are OK and 
approved by the State standards. But by the same token, if we 
begin to move forward with submitting them to region 4 for 
their comment, they are just going to be delayed much longer.
    So, that is why we have been in great discussions with 
region 4 as to how we can expedite the process. But it is 
definitely prolonging the process without a definite yes or no.
    Mrs. Capito. Does anybody else want to comment on that?
    Mr. Quinn. Well, I agree with Dr. Peters. That is the 
experience of our members. There is no end in sight. As I 
indicated in my testimony, the results of this process is more 
permits have actually been withdrawn by the operators than 
actually issued.
    If I have a $50 million or $100 million or $150 million 
initial investment, if I am faced with the prospect of not 
getting a permit 2, 3, 4, 5 years, I can take that money and go 
to another State, get a return on my investment sooner. Or, 
even worse--or even perhaps take that investment to another 
country and get it a lot sooner. And that can make a big 
difference, in value proposition.
    Mrs. Capito. Going along the lines of the topic, which is 
the jobs issue--and I think we all addressed this in our 
statements--I know that part of the permitting process is 
obviously public comment period, probably public hearings in 
the affected areas where individuals who are more deeply 
affected maybe have a chance to voice their opinion. And also, 
I would imagine in the--and I know this to be true in West 
Virginia, that when a project is on the table it is quantified 
many times in terms of how many jobs it might be.
    Going along the lines of my opening statement, when the EPA 
looks at these particular issues in terms of permitting, they 
readily admit that the job data is irrelevant to their 
decision. How would you characterize that, in terms of how you 
think your individual States or your individual communities 
would feel about that, when they have obviously poured their 
heart out at a public meeting, talking about job and ability to 
stay in their own community and live and work in a place where 
they love? Have you heard this as a theme throughout the--this 
process? Dr. Peters?
    Mr. Peters. Certainly in Kentucky we have heard that 
expressed. And we take the position in our cabinet that it is 
not something that we can ignore. We cannot ignore the jobs 
involved in it. It is finding the right balance between what we 
need to do with getting a permit issued and the jobs in place. 
Because not only are you putting those--by delaying the 
permits, not only are you putting that business in the dark, 
you are leaving those miners in the dark, wondering when they 
are going to be able to get back to work.
    So, we do look at that. We do try to make some assessments 
in that particular regard. And we do remind region 4 EPA that 
jobs are something that we must consider, and we do need to 
consider within our State, even though they tell us that jobs 
is not one of their considerations.
    Mrs. Capito. Thank you. Thank you, Mr. Chairman.
    Mr. Gibbs. Mr. Altmire, do you have any questions?
    Mr. Altmire. Thank you, Mr. Chairman. Mr. Quinn, I know 
that the NMA has commissioned some scientific studies that 
raise concerns with the EPA's studies, and specifically the 
methodologies that they use. And you referenced that in your 
testimony and in the Q&A today also.
    And I was just wondering. Has the EPA responded to any of 
NMA's concerns or studies?
    Mr. Quinn. Thank you, Mr. Altmire. No, they have not. And I 
have the studies here with me, if the Chairman will accept them 
for submission in the record. They have looked at--we retained 
an independent, well-known firm to look at EPA studies and the 
methodology. They came back and found that there was no causal 
relationship proven, in terms of EPA's work. EPA was actually 
imposing a standard that is higher than background levels, and 
also did not use its standard methodology for reaching its 
conclusions.
    So, the short answer is no, we have yet to hear anything 
from EPA about----
    Mr. Gibbs. Without objection, we will accept those into the 
record.
    [No response.]
    Mr. Gibbs. Hearing none----
    Mr. Altmire. Yes, it would seem to me, even if they may be 
skeptical of the source of the commission, this is something 
that--you are owed a response, at minimum, from the EPA.
    Mr. Quinn. I would think so, even more--for more reasons 
than just a courtesy. Because I think if they want to have 
confidence in their own work, they would take a look at this 
and consider it. And if they find it persuasive, then look into 
it further. If not, then respond publicly about why it is not--
lacks merit.
    Mr. Altmire. And I would just say that, being a member of 
the committee, I would appreciate the EPA giving a response to 
these concerns, too.
    Mr. Quinn. Thank you, sir.
    Mr. Altmire. Dr. Peters, thank you for being here, as well. 
I was wondering if the EPA's conductivity benchmark was derived 
using West Virginia data, but has been applied to all streams 
within central Appalachia, including my home State of 
Pennsylvania. Do you agree that it is appropriate for the EPA 
to apply the conductivity limit in this way?
    Mr. Peters. Conductivity is a measurement that does not 
give the complete picture of what is in the water. And it is 
very, very dependent on the geology, the local geology, in many 
cases.
    In fact, in Kentucky, I have asked our department of 
environmental protection, who has primary responsibility in 
this area, to look at our data that we have across the State. 
And we are not able to draw any firm conclusions across the 
State, at least at this particular point in time. It varies 
from region to region. It probably varies from microgeology to 
microgeology, as well.
    Mr. Altmire. Thank you. And on that point, Mr. Quinn--back 
to you--do you believe that the EPA's conductivity guidance 
represents a substantial change to prior regulations?
    Mr. Quinn. Oh, absolutely. It is a substantial change in 
regulations. And, actually, they are asserting themselves in 
the State water quality process, which--they don't have that 
authority, certainly not in the way they have done it.
    Mr. Altmire. Right. Lastly, Mr. Chairman, I would ask Mr. 
Gardner.
    You talk in your testimony about addressing past 
environmental problems through Oxford's remining operations. 
Can you tell the committee who would be responsible for 
addressing these environmental problems if the mining industry 
was unable to take on this remediation through its active 
mining projects?
    Mr. Gardner. Well, yes. You know, the mining industry 
itself pays a severance tax to the Federal Government, 35 cents 
a ton, that goes into an abandoned mineland fund. And those 
monies, in addition to whatever taxpayer monies, would be all 
that is available to reclaim abandoned mineland.
    Mr. Altmire. Great. Thank you. Thank you, Mr. Chairman.
    Mr. Gibbs. Thank you. Mr. Cravaack, you have another 
question?
    Mr. Cravaack. Yes. Thank you, Mr. Gibbs. Mr. Quinn, I have 
got a quick question for you in regards to--I don't know if you 
have the data, but because of these new processes that are 
being implemented, do you know what the average cost to the 
average American would be in regards, not only--but in 
electrical costs, heating costs, what we would also have to 
charge, you know, buying a gallon of milk off the shelf at the 
store?
    Mr. Quinn. From this policy? I don't have any numbers along 
those lines, Congressman, but what I can tell you is this, that 
21 of the 25 States with the lowest electricity costs depend on 
coal for 40 percent or more of their electricity. And it is no 
coincidence that those same States have the highest 
concentration of manufacturing in our country, because of low-
cost, affordable coal.
    So, I think it is clear, as you raise the cost of coal and 
raise the expense--electricity, not only are you affecting 
those businesses, but you are affecting households, which 
probably 50 percent of households in this country already spend 
20 percent of their aftertax income on energy.
    Mr. Cravaack. Yes. My electrical bill is high enough, 
thanks.
    But, anyway, Director Marks, if I could ask you--we are all 
concerned about our environment. You know, I live in a 
beautiful State called Minnesota, land of 10,000 lakes. We are 
very concerned about water quality. And it has been my opinion 
that nobody takes care of Minnesota better than Minnesotans.
    So, with that said, in your opinion, what does a perfect 
EPA look like to you, as a State representative?
    Ms. Marks. Well----
    Mr. Cravaack. You have a blank slate, here.
    Ms. Marks. That is a pretty dangerous thing. But I think 
that one thing that the States are all concerned about--and you 
know we all come from different areas, we come from different 
backgrounds. There is very few times that we agree on anything, 
all 50 of us, wholeheartedly. And this was one, when we did the 
resolution about this issue, this was one we did agree to.
    I think what the States desperately need EPA to understand 
is that we are actually implementing their rules and 
regulations. We are implementing those delegated programs, on a 
case by case basis, in our States. We need the resources and we 
need the background to be able to do that. We also need the 
science to support what we are doing. And, most importantly, we 
need to have a voice in that process.
    And that is what I would envision for EPA, is to have--to 
let the States have more of a voice in the process of what is 
going on in their States. Because, truly, they do know more 
than anybody--locals know better than anybody--what is going 
on, as far as the environment goes.
    Mr. Cravaack. Yes. You know, that is so true. Because 
Minnesota looks a lot different than New Mexico, you know, 
different--totally different issues, as well.
    Mr. Quinn, if I can ask you one more question, what can 
Congress--you know, I am a military guy, so identify the 
problem, what is the solution--what can Congress do, in your 
opinion, to address the issue of permitting, not just in 
Appalachia, but also through all mining operations?
    Mr. Quinn. Well, there is a couple things that come to 
mind, particularly based on the testimony today.
    One, you could clarify what the existing law requires, is 
that the States are responsible for establishing the water 
quality standards, interpreting them, and applying them; that 
EPA's role is one of oversight, not one of taking command of 
the process, at either the State level or the Army Corps.
    It could also clarify that point with respect to the 404 
process, with the Army Corps, and also indicate that its role 
is limited to providing comments, but not commandeering the 
process, as well.
    And it could also, given--in view of the recent activities 
where we probably have entered a--some unchartered territories, 
in terms of regulatory risk for business in this country, with 
the retroactive revocation of a permit to a coal mine in West 
Virginia, we could probably use some clarification there, that 
that is not what Congress had in mind at all, that if EPA has 
concerns they should get those to the Corps contemporaneously 
with the process about deciding over the permit, not after the 
fact.
    Mr. Cravaack. Thank you very much, sir. And, Mr. Chairman, 
I yield back my time.
    Mr. Gibbs. Thank you. Dr. Peters, just a quick follow-up 
from one of Representative Cravaack's questions with Ms. Marks: 
your experience in Kentucky running your EPA, and direction you 
have gotten from the U.S. EPA, have you had any instances where 
you have had a direction from EPA, U.S. EPA, and you have 
implemented them, and--how has it worked out?
    Mr. Peters. Well, certainly we have relied primarily--as it 
was intended--in our interactions with the regional, region 4. 
And those interactions--and I think that is true of all States. 
Your first point of contact and your most substantive 
interaction should be with the regional EPA. They are the ones 
that, while they don't know everything that is going on in 
Kentucky or Arkansas or Alabama, they have a better sense than 
what headquarters does at this point in time.
    Our interactions with region 4 have been positive. The 
breakdown, as I see it, is the breakdown has been between 
headquarters and the regional offices in this regard. If we 
could re-establish that connection, and the primacy of that 
connection, it would be much, much better used. That is an 
important interaction.
    We have--we had a set of permits prior to April 1 of 2010 
that were acceptable to EPA. Then, when that interim final 
guidance came out--within 1 week, OK--that whole picture 
changed. And it is that inconsistency that really drives the 
regulator and the regulatory community mad, when you have that 
inconsistency. Because it is not easy to justify a decision 
that you made last week when it is a different decision than 
you made the week before.
    Mr. Gibbs. OK. Mr. Quinn, one final question for you. 
Looking at the enhanced coordination process, and they have a--
I have got a document here that says EPA first utilized what 
they call the multicriteria integrated resource assessment, 
MCIR, to determine that fact. Is that used across the country, 
or is that just used in Appalachia?
    Mr. Quinn. To the best of your knowledge, Mr. Chairman, 
that is a concept for discussing issues, but not a 
decisionmaking process. But what they have done is they have 
taken this theoretical process, and have applied it in a 
decisionmaking mode.
    No, to our knowledge it is not used anywhere else for any 
type of permitting decision. It may be used for evaluating 
policy options for a program, but not for permitting decisions.
    And this is the process they use to screen which permits 
they want to work with on--with the Army Corps of Engineers on, 
which is completely different than things they have done in the 
past, which are permits are given to the Corps, the Corps makes 
the decision, EPA, like other agencies, is provided an 
opportunity to provide some comments.
    Mr. Gibbs. And it is my understanding that this enhanced 
coordination, what you just referred to, is really specifically 
just used in the Appalachian area?
    Mr. Quinn. Yes, their memorandum establishes the enhanced 
coordinating process as basically a side track for Appalachian 
coal permits in about six States, including Ohio.
    Mr. Gibbs. OK. And it is also my understanding, under this 
process, the section 404 guidelines has never formalized that 
process. So there is nothing in the law or in the 
administrative code, I guess, that puts a time limit on when 
they have to have the process done, when they go through this--
using this new procedure.
    Mr. Quinn. Not the new procedure. There is limits in the 
Army Corps of Engineers regulations for decision points. But 
those, under this policy, are all ignored. They have said in 
their policy there is a nominal 60-day period to reach 
resolution. But as I indicated in my opening remarks, EPA is--
makes--that 60-day period only starts when EPA says it starts, 
which can be months or years later. And they are free to 
suspend the 60 days, once it starts, if they decide they need 
more time.
    Mr. Gibbs. OK. So obviously, it is going to be used as a 
delaying tactic.
    Mr. Quinn. Yes.
    Mr. Gibbs. OK. Ms. Marks, in your written testimony you 
talk about how you don't believe that EPA has ever attempted to 
require States to implement interim guidance until recently, 
and you have a concern that the interim guidance could put your 
State or any State in a position to actually break Federal law 
or break State law. So that is a Catch-22.
    Ms. Marks. Yes, sir.
    Mr. Gibbs. Can you kind of expound on that a little bit?
    Ms. Marks. Yes, sir. The problem is that there are a lot of 
States--or there are some States--that cannot enact laws any 
more stringent than Federal law. That is pursuant to their 
State government, they cannot do that. When you have an interim 
guidance come down that is being used pursuant to the objection 
authority is binding in permits, you put the State in the 
position of either I have to go ahead and put these things in 
the permit that EPA wants so they won't object to the permit, 
and break State law, because this is an interim guidance, it is 
not final----
    Mr. Gibbs. OK.
    Ms. Marks [continuing]. Or, I go ahead and don't put that 
in, and then EPA can use their objection authority and my 
facility might not get their permit, or their permit may be 
delayed for a long time if EPA takes that--uses that objection 
authority.
    So, you put them in a real Catch-22. They are either going 
to violate one Federal law or State law, one or the other.
    Mr. Gibbs. Well, I appreciate all you coming into 
Washington today. This has been very enlightening for us. We 
are having a hearing next week, and the EPA will be represented 
in one of the panels.
    It is clear to me, from your testimony, that there has been 
some questions raised and concerns about the science used to 
make some of these determinations, the conductivity tests that 
we talked about. Obviously, enhanced coordination that might be 
specifically targeted to a region in the country and issues 
like that where I think, you know, under the law, due process 
and equal process under the law might be one issue. It seems 
like there is a whole host of issues here.
    And I think we have a--and what also is amazing to me, too, 
is the--we have two State EPAs represented here today that have 
serious concerns about what is going on at the Federal level, 
and making your job tougher. You know, we had regulators here 
represented, and plus, the industry represented. So, I just 
want to make that clear, that I think this was balanced. And 
next week we will have the EPA here to have them respond to 
what we learned here today.
    So, thank you very much for coming in, and that will 
conclude this hearing today.
    [Whereupon, at 12:07 p.m., the subcommittee was adjourned.]
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