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


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

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

                                (112-30)

                                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 11, 2011

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


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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
JEFFREY M. LANDRY, Louisiana         DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
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
                               Panel One

Carey, Michael, President, Ohio Coal Association.................     7
Hopper, M. Reed, Principal Attorney, Pacific Legal Foundation....     7
Roberts, Steve, President, West Virginia Chamber of Commerce.....     7
Sunding, David L., University of California, Berkeley............     7

                               Panel Two

Stoner, Nancy K., Acting Assistant Administrator, Environmental 
  Protection Agency, Office of Water.............................    28

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Carey, Michael...................................................    54
Hopper, M. Reed..................................................    59
Roberts, Steve...................................................    67
Stoner, Nancy K..................................................    71
Sunding, David L.................................................    81

                       SUBMISSIONS FOR THE RECORD

Stoner, Nancy K., Acting Assistant Administrator, Environmental 
  Protection Agency, Office of Water, submittal of peer-reviewed 
  literature published since 2007 that supports the Spruce Mine 
  404(c) final determination.....................................    38

                        ADDITIONS TO THE RECORD

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

  Cover letter to Hon. Bob Gibbs, Chairman, Subcommittee on Water 
    Resources and Environment, May 17, 2011......................    85
  Letter regarding permit delays to Nancy Stoner, Acting 
    Assistant Administrator, Office of Water, Environmental 
    Protection Agency, May 17, 2011..............................    86
  ``EPA Specific Permit Objection--CY2000 to Present''--
    Spreadsheet showing EPA objections to Kentucky permits.......    90
  ECOS, ``Objection to U.S. Environmental Protection Agency's 
    Imposition of Interim Guidance, Interim Rules, Draft Policy 
    and Reinterpretation Policy''................................    94
  National Mining Association Memorandum Opinion.................    96

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

                              ----------                              


                         THURSDAY, MAY 11, 2011

                  House of Representatives,
                    Subcommittee on Water Resources
                                   and Environment,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:37 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Bob Gibbs 
(chairman of the subcommittee) presiding.
    Mr. Gibbs. Good morning. The committee of--the Subcommittee 
of Water Resources and Environment, subcommittee of 
Transportation and Infrastructure, will come to order. Today we 
are having our--we are calling it a part two hearing of EPA 
mining policies and the effect on jobs in Appalachia.
    I will start with an opening statement. Welcome, again. The 
Appalachian region is being subjected to an unequal treatment 
under the law by the Environmental Protection Agency for the 
arbitrary reason that it produces a domestic source of energy.
    The United States consumes 1.1 billion tons of coal every 
year--33 percent of this coal, or approximately 390 million 
tons--annually comes from the Appalachian region of the United 
States. And 50 percent of the power generated in this Nation 
comes from coal as its fuel source.
    Coal is an abundant and domestic source of energy. Its use 
is not subject to the whims of foreign cartel, nor does it tend 
to thrust us into international conflicts. In addition, using 
domestic coal creates American jobs. 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.
    But to quote one of our witnesses from last week's panel, 
Michael Gardner, general counsel of Oxford Resources, one of 
the job providers harmed by the actions of the EPA--as he 
quotes, ``These permit applications literally fell into a black 
hole, where no information was forthcoming. Literally, the 
opposite of transparency. You couldn't find out why a permit 
was on the list. You couldn't find out how to get them issued 
off the list. This was a de factor moratorium on section 404 
permits. So much for transparency and the EPA enhanced 
coordination.''
    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 Procedures Act. This Act lays 
out a process for public comment, making amendments to policy 
for States to object and for judicial review. By ignoring the 
Administrative Procedures Act, EPA is changing the Clean Water 
Act, it is implementing regulations through means of interim 
guidance, interim rules, draft policy, or reinterpretation of 
policy.
    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. Through its practices, 
EPA is usurping the role of the States.
    At last week's hearing on this issue, the committee heard 
from two State regulators on the issue of EPA's legally dubious 
interpretation of the law. As Teresa Marks, representing the 
Environmental Council of the States, the 50 State departments 
of environmental quality agencies, said last week, ``Requiring 
States to implement interim guidance puts each State in the 
position of deciding whether it will break the Federal law or 
State law. At the very least, this should be a good enough 
reason why a Federal agency should never ask a State to 
implement something that is not final.''
    Even though EPA is very much involved in the permit 
application process with the States, the Corps of Engineers, 
and other Federal agencies, EPA is now revoking permits that 
have already been issued. This is not legal. In addition, 
revoking a permit after it has been issued is an arbitrary and 
irresponsible way for a Government to act. I consider this 
regulatory overreach, and to be a fundamental property rights 
issue. This is an example of Government that thinks it has no 
limitations on its power.
    What does it really mean to get a permit? What does it mean 
to get a final decision from the Federal Government? If an 
agency is given the right to unilaterally revoke an already-
issued permit, then nothing can ever be considered final. The 
issuance of a Federal permit should come with some certainty 
that the activity can go 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 the economic development, nationwide.
    I would like to close my statement with a quote. As our 
committee ranking member, Mr. Rahall, eloquently said last 
week, ``EPA has a legitimate role to play in the Clean Water 
Act permitting process. 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, and for many years. 
Unfortunately, we have been disappointed, as a result of the 
guidance that the EPA issues in April of last year, guidance 
with far-reaching consequences that was made effective 
immediately, without the opportunity for the public comment. 
Instead of offering that clarity and certainty, the regime set 
forth by the EPA has thrown the entire permitting process 
throughout the region into utter turmoil.'' End quote from 
Ranking Member Rahall.
    I welcome our witnesses today. Before we move to our 
witnesses, I recognize Ranking Member Representative Bishop for 
an opening statement.
    Mr. Bishop. Thank you, Mr. Chairman. Today marks the second 
of two planned hearings on issues surrounding the oversight and 
regulation of surface coal mining. As I mentioned at last 
week's hearing, while I do not live with the day-to-day impacts 
of surface coal mining, I have quickly learned that few issues 
engender a more passionate response from industry, from mine 
workers, and from everyday citizens as this one.
    Last week we heard the concerns from representatives of the 
States and mining industry on recent actions by the Obama 
administration related to surface coal mining operations. Today 
we will have the opportunity to hear from other affected 
interests, as well as a witness from the United States 
Environmental Protection Agency.
    Mr. Chairman, when we last met I noted that the issue of 
surface coal mining highlights the complex balance in providing 
well-paying jobs for American families, in ensuring the 
continued growth and economic health and safety of our 
communities, and in protecting our natural environment for 
current and future generations. Finding this balance can--
finding this balance point can be particularly tricky, 
especially when we consider that the production of energy 
itself comes with a significant cost.
    Several Members have already alluded to a pendulum of 
oversight and regulation of surface coal mining practices that 
may have been too lax in the last administration--is now 
swinging back in the other direction.
    I am hopeful today the administration will have the 
opportunity to explain its actions with respect to surface coal 
mining, and its reasons for undertaking its actions to date. I 
welcome all of the witnesses. I look forward to your testimony. 
I yield back the balance of my time.
    Mr. Gibbs. Thank you. Ranking Member Rahall, do you have a 
statement?
    Mr. Rahall. No, Mr. Chairman. I don't have any statement. I 
appreciate, again, you having these hearings. I think I said it 
all last week--I must have, since you quoted me this morning--I 
appreciate it.
    But I do want to welcome our president of the West Virginia 
Chamber of Commerce, Steve Roberts, a constituent of mine--I 
believe you still live in Huntington--and looking forward to 
his testimony, as well as the entire panel.
    Thank you, Mr. Chairman.
    Mr. Gibbs. At this time I recognize Representative Capito.
    Mrs. Capito. Thank you, Mr. Chairman. Thank you, Chairman 
Gibbs, and thank you, Ranking Member Bishop, for holding this 
second hearing regarding jobs and job loss in Appalachia.
    I, too, would like to join my colleague from West Virginia 
in welcoming Mr. Steve Roberts, who is the president of our 
West Virginia Chamber of Commerce. Thank you, Steve, for coming 
today, and thank you for your hard work in creating and 
preserving our jobs in West Virginia.
    As we all know, I come from West Virginia. West Virginia is 
a major producer of coal and natural gas. These industries 
produce thousands of jobs and millions of dollars in tax 
revenue for my home State, our home State, of West Virginia. 
The administration's coordinated effort to end coal mining 
threatens the very future, I believe, of our Appalachia, and I 
am here today to continue to fight for every mining job that 
the EPA policies threaten.
    In fact, as I have stated numerous times before, when I met 
with Administrator Jackson she told me point blank that she 
does not take into consideration the economic or the job impact 
of the policies or decisions that they make. Well, I am here to 
tell the members of the committee that these policies are 
threatening communities, and potentially hurting our families. 
And if you look out into the audience, you will see the faces 
of coal who are here today to protect an industry that is so 
important to the way of life of Appalachia.
    The revocation of the 404 permit given to Spruce Mine No. 1 
in West Virginia sent shock waves throughout the entire energy 
industry. Last week, during his testimony, Dr. Leonard Peters 
stated that the science the EPA is using to revoke the permit 
from Spruce Mine No. 1, as well as review 235 other permits, is 
``incomplete.''
    Furthermore, the EPA revocation is without precedent. While 
the EPA does have the authority to veto an existing permit, it 
is questionable whether EPA has the authority to revoke a 
permit that has already been approved by the Army Corps of 
Engineers and the EPA. The EPA has not given any indication how 
revoked permits could be regained.
    This massive overreach by the EPA has created so much 
uncertainty within Appalachia that companies are beginning to 
withdraw their own permit requests, and that means job loss. 
Companies are not willing to invest hundreds of millions of 
dollars in a mining operation that could be shut down at a 
moment's notice.
    We are now seeing inflation on the rise, and food costs are 
soaring through the roof, and employment has been at or above 9 
percent for the last 2 years. It seems incomprehensible to me 
that our Government would take such drastic measures that could 
result in job loss, increase our energy costs for every 
American, and increase our demand for overseas energy sources.
    Mr. Chairman and members of the committee, if the 
administration is willing to take drastic measures to destroy 
coal, what would they be willing to do to the industries in 
your district?
    I look forward to hearing today's testimony, and I yield 
back my time.
    Mr. Gibbs. I would just like to give notice to the people 
in the audience that outbursts will not be tolerated, and you 
will be removed. Just decorum and respect to the Members and 
the witnesses.
    At this time I recognize Representative Cravaack for an 
opening statement.
    Mr. Cravaack. Thank you, Chairman Gibbs and Ranking Member 
Bishop, for holding the second part of this important hearing 
to the effect the EPA has on mining jobs in Appalachia. I would 
like to welcome today's witnesses for our panel, and I look 
forward to hearing your testimony, the EPA's permitting 
process, and how it affects jobs not only in the Appalachian 
coal mining communities, but also in the taconite and precious 
metal mining communities in Minnesota's Iron Range.
    As you know, 50 percent of our Nation's power comes from 
coal; 33 percent of the coal mines for--come right from the 
Appalachian regions. Coal mining provides thousands of jobs and 
supports numerous businesses and communities throughout the 
United States.
    In times of rising energy costs and high unemployment, jobs 
must be protected and costs must be kept as low as possible, 
while at the same time protecting our environment. I am 
concerned at some of the steps recently taken by the EPA to 
expand its oversight, and to impose increased burdensome 
regulation on industry. The new process is creating a 
permitting process that is more burdensome, and with proven 
inefficiencies.
    I find the EPA's new regulations and overreach very 
troubling, and I worry about the effect it will have on the 
mining jobs in and outside of Appalachia. I wonder why the 
changing permitting process is necessary, and also what thought 
was put into making these changes the EPA is attempting to push 
through.
    I look forward to hearing from our witnesses today, and 
their thoughts on what steps can be taken to protect thousands 
of jobs within the United States. Thank you again, and I look 
forward to hearing from your testimony.
    And I yield back, sir.
    Mr. Gibbs. Mr. Landry, do you have an opening comment? 
Proceed.
    Mr. Landry. Thank you, Mr. Chairman, for calling today's 
hearing. Thank you all for participating.
    Today's hearing addresses part of an enormous problem in 
this country: the EPA and the 404 permit process is stifling 
economic progress and job creation in this county. According to 
Chairman Mica's landmark study entitled, ``Sitting on our 
Assets,'' a 404 permit application costs over $271,000 to 
prepare, not counting the cost of mitigation, design changes, 
carrying capital, and other costs. And it takes more than 2 
years to secure.
    Each and every year, businesses and local governments spend 
more than $1.7 billion trying to secure 404 permits. But as 
today's hearing will show, even after a 404 permit applicant 
completes this onerous process, the EPA can simply come in and 
arbitrarily revoke a permit. This is exactly what they did to 
Mingo Logan, a subsidiary of Arch Coal. This company created a 
1,600-page permit document for a mine which impacted 8.1 acres 
of applicable water. And after all of the work, the EPA 
unilaterally and retroactively revoked this permit last year. 
In doing so, the EPA acted far outside the authority Congress 
has provided to it.
    The EPA has also acted outside of congressional authority 
by issuing guidance which virtually halts Appalachian coal 
mining, short-circuits the official rulemaking process, and 
completely undermines the expedient 404 permit process 
envisioned by Congress.
    The sum of EPA's action in Appalachian coal mines have been 
the loss of at least 17,000 coal mining jobs, and more 
expensive power for much of the eastern seaboard. However, this 
is not the only region to be hurt by EPA's abuse of the Clean 
Water Act. In 2008, EPA revoked the 404 permit for the Yazoo 
Backwater Area Project. This project was designed to protect 
more than 400,000 acres of land and 1,300 homes from flooding 
by installing a pumping system to drain the area during 
flooding. That project was authorized and appropriated by 
Congress, and provided a permit by the U.S. Army Corps of 
Engineers. Yet, even after all of this study and approval, EPA 
pulled the permit at the last minute. In their official 
documents they said they were pulling the permit because the 
project would endanger 67,000 acres of wetlands.
    This makes absolutely no sense. How can EPA endanger 
countless lives, 400,000 acres of land, 1,300 homes, in order 
to save 6,000 acres of wetlands? Where is our priorities and 
where is our balance? When will EPA see that residents of those 
1,300 homes, residents who are currently homeless, due to the 
historic flooding experienced in the Mississippi River Valley 
are more important than the 6,000 acres of wetlands they claim 
that it would protect?
    I hope today's hearing sheds some light on these issues, 
and helps us get back to the path where we prevent EPA from 
utilizing the Clean Water Act to put supposed wetlands 
protection ahead of people's lives and their livelihood.
    Thank you, Mr. Chairman.
    Mr. Gibbs. Representative Altmire, do you have an opening 
statement?
    Mr. Altmire. Thank you, Mr. Chairman. I would say thank you 
to the witnesses for being here for this second hearing on this 
topic. I found the first to be very productive.
    And I wanted to just shed some light in a bipartisan way on 
our support, as a group, this entire committee, of cultivating 
our own domestic resources. There is a national security 
implication, there is an economic implication, a jobs 
implication, and certainly an energy implication to using all 
of our resources. And anything that we can do to help lessen 
the burden that is in front of you in doing that, we want to 
assist with that, and we very much appreciate your being here 
today to discuss this issue, because we take it in the national 
interest. And certainly being from western Pennsylvania, it is 
critical to my region of the country, also. So, thank you, Mr. 
Chairman, for holding the hearing. I look forward to hearing 
the witnesses.
    Mr. Gibbs. Representative Herrera-Beutler, do you have a 
comment? OK. No? Lankford, Representative Lankford?
    Mr. Lankford. Thank you. And thank you for being here. You 
will find a common passion among many of the representatives 
for clean water and clean air and an interest in living in a 
society that we are very grateful for our own children to grow 
up in, and that we want to be good stewards of our environment, 
as well. But we also are a Nation that has to have power, and 
that continues to fuel our economy and jobs. And we need to be 
able to strike a balance.
    As you are very aware, EPA's mission began in the Nixon 
administration, with the beginning point of those five major 
focus areas. But during the Carter administration, there was a 
dramatic shift to be able to push more and more of the Federal 
Government towards coal. And that became a major focus during 
that administration and the days after that. Many of these 
power plants responded by continuing to use coal as the piece 
of energy that was encouraged by our Federal Government. They 
have done a good job, they have been good stewards with those 
things. They have made corrections, and they have made changes 
along the path.
    As a Nation that needs more power, though, we are bumping 
up against, I sense, an EPA that is continuing to focus on its 
central core mission of land, air, and water, but that is 
changing the rules on a lot of people that felt like they were 
abiding by the rules. When a permit can change in the middle of 
a 10-year process, that makes a big shift for a group of people 
that were trying to play by the rules.
    When 316(b) rules change, or they are not clear for a coal-
fired power plant, and they are not sure what happens around 
the intake valve, there is no clarity and there is no ability 
to be able to plan. When the air quality rules change on them, 
good players are not able to determine what are the fair rules, 
and how do we do this. And when it takes 10 years to do an 
environmental study, at some point we have to ask the question: 
Is EPA intentionally standing in the way of developing more 
power for the United States, and slowing down our economy?
    Now, I would hope the answer to that would be no. And I 
would anticipate from you it would be. But we are going to have 
to look at the facts and the details and say, ``Are these 
continual changing rules changing our power capacity and our 
jobs in the United States?'' And, if so, we need to be able to 
hold those to account, and to be able to hear clearly, ``Where 
are we going from here?''
    With that, I yield back.
    Mr. Gibbs. Thank you. And again, I welcome our witnesses 
today. We are going to have two panels. The first panel, we 
have: Mr. Michael Carey, president of the Ohio Coal 
Association; also, Mr. Steve Roberts, president of the West 
Virginia Chamber of Commerce; Dr. David Sunding, University of 
California at Berkeley; and Mr. Reed Hopper, principal of the 
Pacific Legal Foundation.
    And in our second panel will be acting assistant 
administrator of the Environmental Protection Agency, Office of 
Water, Ms. Nancy Stoner.
    Welcome, Mr. Carey. The floor is yours.

 TESTIMONY OF MICHAEL CAREY, PRESIDENT, OHIO COAL ASSOCIATION; 
 STEVE ROBERTS, PRESIDENT, WEST VIRGINIA CHAMBER OF COMMERCE; 
 DAVID L. SUNDING, UNIVERSITY OF CALIFORNIA, BERKELEY; AND M. 
   REED HOPPER, PRINCIPAL ATTORNEY, PACIFIC LEGAL FOUNDATION

    Mr. Carey. Chairman Gibbs, Ranking Member Bishop, 
Congressman Rahall, members of the committee, good morning. I 
want to thank you for inviting me to testify at this important 
hearing regarding the litany of new regulations being put forth 
by the U.S. EPA, and their effects on Appalachian jobs. My name 
is Mike Carey; I am president of the Ohio Coal Association. The 
Association provides a voice for many thousands of citizens 
working in Ohio's coal sector. I also serve on the National 
Coal Council, an advisory committee to the Secretary of Energy 
on energy resource issues.
    Cheap, abundant coal is what powers the manufacturing base 
and provides affordable energy for families across the Midwest 
and other regions in America. The companies we represent, both 
large and small, directly employ over 3,000 individuals in Ohio 
alone, and over 30,000 secondary jobs that are dependent upon 
our industry.
    The Obama administration and its allies have declared war 
on coal across Appalachia. We are at ground zero for the 
fundamental overreach by this administration's regulatory 
agenda. The rural regions of Ohio, Kentucky, West Virginia, 
Tennessee, Illinois, Pennsylvania, and Indiana would all be 
devastated from losing major employers such as coal companies.
    In a rare statement of honesty, which actually bordered on 
hubris, last year the Office of Surface Mining stated, in 
justification for the Stream Protection Rule, that 7,000 jobs--
7,000 jobs--would be lost in Appalachia. That was OK, because 
some jobs would be created out West. Mr. Chairman, that is 
simply unacceptable.
    In fact, just last week, the Army Corps of Engineers filed 
a lawsuit against Buckingham Coal Company related to an 
operation in Morgan County, Ohio, which is right in your 
congressional district. They are attempting to prevent access 
for mining coal reserves already permitted under our State 
regulatory authority. Doing so ignores the intent of this 
committee and Congress when it wrote the Clean Water Act and 
SMCRA, where permitting jurisdiction was to be vested to the 
States.
    As you can clearly see, this administration is picking 
winners and losers by regulatory proclamation. The policies of 
the current administration will force fuel-switching and shifts 
in regional coal from eastern to western reserves, which would 
lead to an increase in utility costs.
    Some people may think that I am exaggerating, but one need 
only look at the host of new regulatory proposals that are 
aimed at the Appalachian coal industry that are not only just 
coming from the EPA, but they are coming from the Department of 
Interior, MSHA, and, as I mentioned before, the Army Corps of 
Engineers, a partial list of which has been provided in my 
written testimony.
    Mr. Chairman, we need to do four things to stop this abuse 
on Appalachian coal jobs. First, we need to declare a 
regulatory time-out. We are still recovering from a recession. 
And this administration seems to forget that, compared to 30 
years ago, our air is cleaner, our mines are safer, and of 
course, our water resources are better protected.
    Number two, we need to reassert the primary role of the 
States in permitting decisions. We need legislation clarifying 
that our States continue to have primacy in interpreting the 
relevant portions of the Clean Water Act.
    Three, end the abusive use of regulatory guidance 
documents. If it is important enough to be issued as a guidance 
document, then it is important enough to go through the normal 
public notice and comment period.
    Number four, provide certainty in permitting decisions. 
Unfortunately, we need Congress to tell the administration to 
live up to its permitting promise. We also need the permits to 
be processed in a timely manner.
    The thousands of workers that are affected in Appalachia 
deserve the right to earn a livelihood without being subjected 
to the whims of bureaucracy. And, unfortunately, the 
administration is pushing bureaucracy to advance the most 
extreme anti-coal agenda that our Nation has ever seen.
    And how do we know this? They simply are following through 
on their campaign plan. Also, as Commissioner of the New Jersey 
Department of Environmental Protection, current EPA 
administrator, Lisa Jackson, issued the New Jersey global 
warming plan, which called for a moratorium on all coal-fired 
power plants. Now, she may not be calling for a moratorium 
today at the EPA, but her regulatory policies are certainly 
creating them.
    Again, Mr. Chairman, this committee could declare a 
regulatory time-out, reassert State primacy in permitting 
decisions, end the abuse of the regulatory guidance documents, 
and provide certainty in permitting decisions.
    Mr. Chairman, I appreciate the opportunity to testify, and 
I look forward to your questions.
    Mr. Gibbs. Thank you.
    And our next panelist is Mr. Steve Roberts, president of 
the West Virginia Chamber of Commerce.
    Welcome.
    Mr. Roberts. Thank you. Thank you very much for having me. 
Ladies and gentlemen, honorable chairman, and members of the 
committee, thank you very much for your interest and concern 
about the impact of actions of the U.S. EPA on mining 
production, energy needs, employment, and quality of life in 
mining communities throughout West Virginia and the Nation. I 
particularly want to acknowledge and express appreciation to 
Chairman Gibbs, to the Honorable Nick Rahall, and Shelley Moore 
Capito, who I am proud to know, and by whom I and my family 
members living in both Huntington and Charleston, West 
Virginia, are so proud to be represented. I am Steve Roberts, I 
am the president of the West Virginia Chamber.
    West Virginia is a beautiful State, populated by decent, 
hardworking, caring people. We are proud of our over-20 
colleges and universities, our well-developed transportation 
network, our breathtaking peaks and valleys, and our industrial 
base that supplies the much-needed coal, gas, timber, and 
electricity that have helped build our great Nation.
    West Virginia proudly boasts the Nation's lowest crime 
rate, the highest level of home ownership, and the first public 
schools found in the post-Civil War South. The West Virginia 
mountains have given our Nation many famous Americans. Coal and 
energy production have long been key components of our State's 
being. And because of that, we are especially afraid of the 
assault referred to in this hearing's title.
    Outside of Wyoming, we produce the most coal in the United 
States. Because of the sensitive nature of our economy, these 
jobs are more than important. Without them, tens of thousands 
of families, and a historic American mountaineer culture, would 
cease to exist here.
    The best jobs in our State's neediest areas are nearly 
always mining jobs. Per capita income in southern West Virginia 
is about half the national figure. Yet the average coal job 
pays more than four times that amount. A mining income can 
stabilize an extended family, providing support for the 
elderly, a future for children, and a livelihood for many 
relatives of the wage earner. Killing off such work will do the 
opposite. Tens of thousands of families will be thrown into 
crisis.
    If surface mining ended in West Virginia, coal production 
would be cut by 40 percent. There are 537 mines in West 
Virginia, and 232 of those are surface mines. If permitted, 
more could exist.
    As the country's second-largest coal mining State, limiting 
40 percent of our production would be destructive to our 
country, broadly, at a time when our country needs energy. 
Locally, 6,255 surface miners would be jobless. Many workers at 
coal handling facilities would be let go, and secondary 
industries would experience cuts, as well. For these reasons, 
the environmental impact of surface mining can never be 
considered in isolation from the real experience of real people 
who live in this environment.
    Before I delve further into statistics, let me quote one of 
these people. Ellen Taylor is the president of the Beckley-
Raleigh County Chamber of Commerce. Her area is particularly 
rich in coal and coal mining history. She knows mining 
communities. She says, in reference to 404 mining permits, that 
``Canceling permits will have a disastrous affect on the people 
here. Not only mining families, but local businesses will be 
widely affected.''
    To use one of many examples, buying groceries could become 
a real problem if they were to lose their jobs. Stores would 
close. Refusing to issue permits would have a terribly harsh 
trickle-down effect on the economy. Many, many families depend 
on that paycheck from mining companies, Ms. Taylor says.
    This is because those companies treat their employees well. 
In the mining industry, wages have increased 3.9 percent 
yearly, on average, through 2008. Mining companies freely 
maximize their employment. They do not risk pressuring 
employees by under-hiring. As of 2008, the coal industry in 
West Virginia employs over 20,000 people, more than any other 
State. These workers were paid $1.5 billion with total 
compensation of $2.8 billion. And these statistics and those to 
follow come from recent studies by West Virginia's two largest 
universities.
    I have just listed some of the direct benefits of coal. The 
indirect benefits are also vast. In 2008, coal companies paid 
over almost $700 million in taxes, amounting to a substantial 
portion of all State revenue. It is the Chamber's assessment 
that this contribution will shrink to the point of State crisis 
if 404 mining permits are denied. The loss of property taxes 
alone would be fatal to local governments, the above-referenced 
study found.
    Thank you for the opportunity to testify, Mr. Chairman. We 
believe the denial and revocation of 404 permits has already 
threatened our economy and workforce. There could be much more 
damage still. For this reason, I appreciate your attention to 
our struggle, as we try to retain jobs in this most traditional 
of Appalachian industries. Thank you very much.
    Mr. Gibbs. Thank you.
    Our next panelist is Dr. David Sunding, University of 
California at Berkeley.
    Welcome.
    Mr. Sunding. Thank you. Chairman Gibbs, members of the 
subcommittee, it is an honor to speak here today.
    This committee is considering an issue of regulatory policy 
that has significant implications for the vast range of public 
and private projects that must receive permits under section 
404 of the Clean Water Act. The willingness of the EPA to 
revoke a valid discharge permit approved after a decade-long 
review process including in-depth environmental impact 
assessment and public comment, as well as the direct 
involvement by the EPA and the permitting process, can have 
far-reaching economic incentive effects.
    The EPA's action may bring into question any future 
investment, hiring, or development decisions in projects that 
rely on an approved section 404 permit. These activities are 
vital to the American economy, and include pipelines and 
electric transmission, housing and commercial development, 
renewable energy projects like wind, solar, and biomass, 
transportation infrastructure, including roads and rail, 
agriculture, and many others.
    The Army Corps of Engineers estimates that over $220 
billion of investment each year is conditioned on the issuance 
of 404 permits. EPA's precedential decision to override the 
judgement of the Corps of Engineers in this case alters the 
incentive to invest in projects requiring a permit under 
section 404.
    Project development often requires significant capital 
expenditure over a sustained period of time, after which the 
project generates some return. Actions that undermine the 
certainty of the 404 permit raise the threshold for any private 
or public entity to undertake the required early-stage 
investment. In this way, the EPA's action may chill investment 
in activities requiring 404 authorization.
    Increasing the level of uncertainty can also reduce 
investment by making it more difficult to obtain project 
financing. Land development activities, infrastructure 
projects, and the like, often require a significant level of 
capital formation. Reducing the reliability of the section 404 
permit will make it harder for project proponents to find 
financing at attractive rates, as lenders and bond holders will 
require higher interest rates to compensate for increased risk. 
And some credit rationing may also result.
    It is worth remembering that public and private activities 
requiring section 404 authorization generate significant and 
direct benefits to affiliated industries, thus reduced levels 
of project investment translate directly into lost jobs and 
lost economic activity. You have just heard testimony about the 
indirect impacts of mining on the economies of the Appalachian 
States.
    Similar indirect benefits are evident for housing and 
commercial development, road-building, and other activities. In 
the case of housing construction, for example, which, over the 
long run, accounts for as much as 15 percent of all economic 
activity in the United States, every $1 spent on housing 
construction produces roughly $2 in total economic activity. 
And every $1 billion in residential construction generates 
nearly 12,000 new jobs. Regulation that creates a disincentive 
for investment in projects requiring 404 authorization places 
these indirect economic benefits at risk.
    A reduced level of investment in projects requiring a 
section 404 permit would have effects that go far beyond the 
industry participants themselves. Private projects authorized 
under section 404 increase the supply of housing, commercial 
development, and the like. When development projects are not 
undertaken, these consumer benefits are reduced or lost all 
together.
    Public sector activities, like road building and repair and 
utility infrastructure also contribute in fundamental ways to 
the quality of life throughout the Nation, as evidenced by the 
frequently large benefit cost ratios associated with 
transportation infrastructure projects. Similarly, other types 
of public land development, such as libraries, schools, and 
emergency response infrastructure generate significant levels 
of economic welfare, some part of which would be at risk, as a 
result of the EPA's actions.
    Finally, it should be remembered that land owners could 
suffer losses and wealth as a result of the EPA's action. In a 
competitive land market, prices reflect the discounted value of 
the returns earned from dedicating land to its highest and best 
use. For undeveloped land, this sum is typically equal to the 
value of rents when the land is in an undeveloped condition, 
plus the amount that developers are willing to pay for land 
when they ultimately initiate their project. Regulation that 
lowers the profits from development will be capitalized into 
current land values, meaning that the equilibrium market price 
of land will be lower, as a result.
    I am currently working on a study of these various 
disincentive effects and economic impacts of the EPA's actions 
with respect to the Spruce Mine matter, and hope to have 
results on their importance within the next few weeks. I will 
make the results of the study available to the committee, and 
look forward to discussing them with you and your staff. Thank 
you.
    Mr. Gibbs. Thank you.
    Our final panelist on this panel is Mr. Reed Hopper, from 
the Pacific Legal Foundation.
    Welcome.
    Mr. Hopper. Thank you. Mr. Chairman, members of the 
committee, as an attorney with the Pacific Legal Foundation, a 
non-profit public interest organization dedicated to the 
protection of individual rights and private property rights, I 
wish to thank you for this opportunity to testify.
    The handling of the Mingo Logan permit is instructive in a 
number of ways, in that it raises a number of red flags that 
indicate when an agency is pursuing a political agenda, as 
opposed to pursuing its statutory mandate.
    The first red flag is when the agency response is 
disproportionate to the payoff. The final notice of the permit 
revocation indicates, for example, that the Mingo Logan Mine is 
one of the largest mining projects of its type, and therefore, 
is unprecedented. However, it fails to mention that the 
evaluation of this particular project was also unprecedented.
    This was the first time that a full EIS has been completed 
for such a project. As has already been indicated, 10 years in 
review, 1,600 pages in length, 58 pages responding to comments 
of the EPA. More importantly, the two agencies that issued 
permits for the project, the State department of environmental 
protection and the Corps of Engineers, opposed this revocation, 
and indicated that the mine has been in full compliance with 
the permit, that these agencies continue to monitor compliance 
regularly, and that they have the wherewithal to address any 
unforseen impacts. The notion that the EPA suddenly needed to 
intervene to protect us against some sort of a significant 
disastrous ecological impact simply is not credible.
    The second red flag is when the agency abruptly changes its 
policy or practice. This typically results when an agency is 
pushing the envelop on its statutory or regulatory authority. 
In this case, the Agency has, for the first time in its 
history, used the 404(c) veto power retroactively to suspend a 
permit that has been ongoing and has been held in compliance 
for over 3 years.
    In most cases, the courts would require the agency to 
justify this type of change in policy or practice, which brings 
me to the third red flag, and that is when the agency policy or 
practice is changed by means of ``guidance,'' as opposed to the 
formal APA rulemaking procedure. Using internal guidance as a 
means to substantively change the law is a recurring practice 
with the EPA. We saw this with the SWANCC guidance after the 
2001 Supreme Court decision, after the Rapanos decision in 
2006, and now, with this mining policy. The sole purpose 
appears to be to insulate the Agency from having its broad 
interpretation of the law subject to any sort of direct legal 
challenge. The guidance forces a case-by-case challenge, which 
means that, overall, there can never be any real change in 
Agency practice, even if a court finds that the application of 
its policy is illegal in a particular circumstance.
    Another red flag is when the agency changes its policy or 
practice, and creates greater uncertainty, instead of more 
uniformity. The proper purpose, I think, of agency rules or 
guidance should be to ensure objective and uniform 
administration of the law. But the new mining policy does just 
the opposite: it demonstrates that the Agency can change 
procedures and standards at will; and, with respect to 404(c), 
that it can revoke a permit whenever it deems appropriate. This 
is the very definition of arbitrary Government.
    Finally, I think that another red flag is when the agency 
shows little or no regard for the impact its change in policy 
or practice will have on affected parties. The new mining 
policy truly is an assault on jobs, individual rights, property 
rights, and the economy.
    Until now, 404 permits could be modified or revoked only 
with a consideration of the effect on the investment and the 
reliance that the permit-holder had in properly complying with 
the permit. But EPA has thrown that out the window.
    Instead of viewing land owners and permit-holders as allies 
to be helped, the EPA views land owners and permit holders as 
enemies to be thwarted. I believe this needs to change.
    Mr. Gibbs. Thank you. We will begin our first round of 
questions. Mr. Carey, you are a member of the National Coal 
Council advisory board of the Department of Energy. How many 
meetings does the Council have with the Secretary of Energy, 
the administrator of the EPA, and how would you describe those 
meetings?
    Mr. Carey. Mr. Chairman, I would be unprepared to give you 
that, but I would be happy to find out exactly how many 
meetings took place, and provide that to the committee.
    I would not be able to answer that question, because I 
don't know exactly----
    Mr. Gibbs. Yes. The second part of the question is how 
would you describe the tone of the meetings?
    Mr. Carey. Well, again, I wasn't in the meetings, so it 
would be hard for me to actually answer that question, Mr. 
Chairman.
    Mr. Gibbs. OK. Let's go on to Mr. Hopper. Since a section 
404 permit has never been revoked prior to the Arch Coal 
permit. What types of compensation would you suggest would be, 
you know, warranted?
    Mr. Hopper. Well, that has to be determined on a case-by-
case basis by the court. But it is clear that the coal company 
has spent millions of dollars in reliance on this permit. The 
courts typically look at the reasonableness of that reliance, 
the extent of the reliance, and issue a mandate as to how much 
that compensation should be.
    As you know, the mine has sued the Agency, arguing that the 
retroactive application of this 404(c) veto power is illegal, 
and they have itemized in those pleadings the extent of their 
reliance.
    Mr. Gibbs. OK, thank you. Mr. Roberts, in your testimony, 
you talked about how important the jobs are to West Virginia, 
and of course, the whole Appalachian region. With these new 
policies coming from this administration in regards to the 
mining policies, what--have you seen anything the 
administration has done to help bring new jobs to your State?
    Mr. Roberts. We are very concerned about the actions that 
have an impact on mining jobs, because those are the jobs that 
really pay the kinds of benefits that can support families. We 
have not seen any sort of commensurate effort, in terms of 
bringing new jobs into the area where mining occurs, and 
particularly into southern West Virginia, where this method of 
mining is most prevalent.
    Mr. Gibbs. OK. Dr. Sunding, I am really concerned about the 
EPA's policy on the conductivity tests for water quality. It is 
my understanding that the science advisory board really 
convened after that decision was made by the EPA. Do you think 
that is--that they kind of went backwards, that they should 
have developed the science first before they put out the 
guidance--guidelines?
    Mr. Sunding. Well, I am an economist, so that is somewhat 
outside my area of expertise. Maybe there are others here on 
the panel that can----
    Mr. Gibbs. OK, we can open it up to the rest of the 
panelists.
    Mr. Sunding [continuing]. That could address that. Sure.
    Mr. Gibbs. Anybody else want to comment on that? Mr. Carey?
    Mr. Carey. Mr. Chairman, I will comment. I think it would 
be nice to actually--to have the development of the policies 
before you actually make the outcome. So I would agree with 
that, Mr. Chairman.
    Mr. Gibbs. Also for the panelists, the expanded 
coordination. Want to comment a little bit about that?
    When I read through your testimony, it kind of looks like 
that's a procedure they kind of put in place to, at least at 
the very minimum, delay permitting action by 60 days, and 
really go on forever. Because, the way I read the law, there is 
no provision to do that in expanded coordination that is in 
law. How do you see the impact of what's happened on that, and 
what is your feelings about--with regard to the law?
    Mr. Carey. Mr. Chairman, I would be happy to answer that 
question. I think, if you looked at just Ohio, you had a 
company from Ohio that talked about having permits that were 
caught in that tidal wave, where they were in no-man's land, 
nobody knew where they were.
    But I think if you look to our neighbor just to the south 
of us, in West Virginia, they clearly had over 154 permits that 
were tied up in that. And that truly devastated them, because 
how do you make investments in moving forward with mining 
operations and meeting market demands? So, clearly, it hasn't 
worked.
    Mr. Gibbs. OK. At this time I will yield to Mr. Rahall. Do 
you have questions for the panelists?
    Mr. Rahall. Did you want to go first? Go ahead.
    Mr. Gibbs. Whoever wants to go first.
    Mr. Rahall. Yes, let----
    Mr. Gibbs. OK. Mr. Bishop?
    Mr. Rahall. Thank you, Mr. Chairman, I appreciate it.
    Mr. Bishop. Thank you, Mr. Chairman. And, Mr. Rahall, thank 
you.
    I always find it helpful--and we all have the same set of 
facts--both Mr. Carey and Mr. Roberts, I think it's fair to 
characterize or summarize your testimony that--and I believe, 
Mr. Carey, you may have even used this phrase, that the current 
administration is--has declared a war on coal. Is that pretty 
much what you said? I don't want to put words in your mouth.
    Mr. Carey. That is true.
    Mr. Bishop. OK. Here is my understanding of the permitting 
numbers since the Obama administration took office, that they 
inherited 140 pending permits. Of that number--for surface 
mining--52 have been approved. Of the 88 that have not been 
approved, none have been denied. Some are still pending. And 
some were withdrawn. Do you feel that those, that set of 
numbers, you still keep to your characterization?
    Mr. Carey. Mr. Chairman, Ranking Member Bishop, I would say 
not just only in the numbers of permits, but I think, if you 
look at my written testimony, I describe a series of attacks on 
the coal industry, not just from the EPA perspective, but also 
if you look at MSHA, if you look at the Office of Surface 
Mining. If you look at the myriad of issues that are now facing 
the coal industry, there is no doubt in my mind, Mr. Chairman, 
Ranking Member Bishop, that the coal industry is under assault.
    And as far as the numbers of permits, where the permitting 
numbers are concerned, I think you have to look back at 
certainly there were 140 permits, but then, when you throw all 
those permits back into some coordinated policy that delays the 
time period, I think that is an issue.
    Mr. Bishop. But to be clear, the current administration 
inherited 140 pending permits. So, if they were thrown back, as 
you just said, into some other process, that was a process that 
perhaps took place prior to the advent of this administration?
    Mr. Carey. Mr. Chairman, again, I would have to look at the 
exact permits to which you were referring in order to be able 
to answer that question. But I would be happy to provide those 
answers to you.
    Mr. Bishop. Mr. Roberts?
    Mr. Roberts. Sir, I--the information that I had provided to 
me indicates that there is a backlog of 239 permit 
applications, and that 190 of those had already been considered 
complete by the U.S. Corps of Engineers. So, one of the 
challenges for us is to deal with the sort of going back and 
re-looking at permits that have also received the blessing of 
the appropriate regulatory authorities in the States and within 
the U.S. Corps of Engineers.
    Mr. Bishop. But the fact that remains is that, of the 
applications that have been acted on by the current 
administration, with the exception of the Spruce Mine, 100 
percent of the decisions rendered have been favorable decisions 
allowing that mining to go forward.
    Mr. Roberts. I wouldn't have--that is just not information 
I have. The information I have is related to the 235----
    Mr. Bishop. It is information that we have. So----
    Mr. Roberts. Thank you.
    Mr. Bishop [continuing]. Thank you. Let me just go to the 
issue of jobs. And, again, something all of us need to be--have 
a heightened concern about, no matter where we live, what we 
represent.
    My understanding is that--and this is data that comes from 
MSHA--is that over the recent past, mining employment has 
dropped from about 60,000 jobs to about 30,000 jobs. Does that 
comport pretty much with--Mr. Carey, Mr. Roberts, or Mr. 
Sunding, does that comport--Dr. Sunding, I'm sorry, does that 
comport pretty much with your information?
    Mr. Carey. Mr. Chairman, Mr. Bishop, I would say that I can 
tell you about the 3,000 direct employees that are employed in 
Ohio's coal mining industry--and I believe that there are 
17,000 that are in our sister State of West Virginia, and 
somewhere in the middle in Pennsylvania. So it would be hard 
for me to quantify that exact----
    Mr. Bishop. My understanding, again, from MSHA, is that we 
have gone from about 60,000 employees in the mining industry to 
about 30,000, and that all of that job loss took place prior to 
the Obama administration, and that the vast majority of that 
job loss is related to a move away from underground mining and 
more so towards surface mining, because it is considered to be 
less expensive and safer. Does that comport with your 
information?
    Mr. Carey. Mr. Chairman, Mr. Bishop, I would say that is 
absolutely not true.
    Mr. Bishop. So what is the loss? If the loss took place 
prior to the advent of the Obama administration, and it is not 
related to the move to surface mining, then what is it related 
to?
    Mr. Carey. Mr. Chairman and Mr. Bishop, I would say that if 
you're--what time period are you referring to, that there is a 
loss of 30,000 coal jobs? I would argue very clearly that there 
is probably a difference in the amount of wagon wheel makers 
from 1890 to 1940.
    Mr. Bishop. Trust me, I am not trying to be that specious, 
OK? We are--this is recent data from MSHA. And I do think wagon 
wheel production has gone down. I'm not sure of that, but I 
think it has.
    [Laughter.]
    Mr. Carey. Mr. Chairman and Mr. Bishop, as has the pick 
axe.
    But I will tell you that I would again have to see the 
numbers for which you are referring. Because, certainly, as 
mining practices have improved, just the amount of tonnage that 
you can get out of an underground coal mine now by man-hour is 
completely different than it was 20, 30, 40 years ago. But as 
far as the move to western coal, again, I would--it would be 
hard to quantify that.
    Mr. Bishop. But--I'm sorry, my time has expired. Thank you, 
Mr. Chairman.
    Mr. Gibbs. We will have another round.
    Mr. Bishop. Thank you for indulging.
    Mr. Gibbs. I would just like to interject, just to clarify 
a question. Mr. Bishop talked about the number of permits. When 
I have looked at this, it looks like to me that just close to 
250 permits that are under the enhanced coordination process. 
And in my understanding, that's kind of fallen into a black 
hole, where nobody knows what is happening. And then some of 
those permits, I think, have been withdrawn, because they have 
given up. Is this accurate, this statement? Anybody want to 
answer that?
    Mr. Carey. Mr. Chairman, I would agree with that, 
completely.
    Mr. Gibbs. So enhanced coordination is really the issue 
here on the permitting part?
    Mr. Carey. Mr. Chairman, members of the committee, I think 
it's a myriad of things. But I think certainly that is one 
issue.
    Mr. Gibbs. OK. At this time we will move on to 
Representative Cravaack. Do you have questions?
    Mr. Cravaack. Thank you, Mr. Chairman. Thank you, 
panelists, as well.
    Dr. Sunding, what are the added costs, in your opinion, 
related to the permitting and any uncertainty of the whole EPA 
process here? Could you comment on that?
    Mr. Sunding. Sure. I mentioned a few types of direct and 
indirect effects in my testimony. Two that I would point out, 
just as a matter of economic theory, almost.
    The issue of delay, which is related to uncertainty, we 
were discussing it a few minutes ago. In the context of most 
land development activities, delay is tremendously significant. 
And it is often sort of a hidden cost of regulation. The fact 
that the permitting process under 404 has no certain end to it 
can be very significant when developers, lenders, other 
entities are considering whether or not to enter into an 
activity in the first place. So I would point out, first, 
delay.
    Second, I did speak directly to the issue of uncertainty. 
The way most development, private and public, works is a 
significant amount of money is put up first, in terms of, you 
know, investment in the permitting process, and required 
capital expenditures. And then the returns come later. What 
this process does, what the EPA's action does, is put more 
uncertainty onto that stream of returns, which makes it much 
less likely that the investment will pass the required 
threshold in the first place. So that is probably the most 
important incentive effect that I would point out.
    Mr. Cravaack. Related to that, can you tell me--I don't 
know if you have these kind of figures--what kind of job loss 
are we talking about during a time period like that, or lack of 
job creation? Would you have numbers on that?
    Mr. Sunding. Right. I think we have better information on--
sort of at the project level, you know. For a typical land 
development project, a housing project, typical mining project, 
we know.
    To figure out the expected economic cost of what the EPA 
has done in this case, it's important to have a lot of other 
information about the whole range of economic activities that 
get permitted under 404. I think we're not quite there yet, I'm 
just not able to give you, you know, a number for, ``Here is 
the cost on the economy.''
    But what I can do is point out--pretty effectively, I 
think--some of the fundamental economic incentive effects of 
eliminating the certainty of the 404 permit, and then talking 
on a project-by-project or activity-by-activity basis, what the 
impacts might be. And they are potentially very significant.
    Mr. Cravaack. OK. Thank you very much, sir. Appreciate it.
    Mr. Carey, I'm assuming you're a Buckeye?
    Mr. Carey. Mr. Chairman--Congressman, that is for sure, 
yes.
    Mr. Cravaack. I'm a fellow Buckeye too, so I was kind of--I 
was born in Charleston, grew up in Ohio, so there you go.
    I just have one quick question for you. We have open pit 
mining in Minnesota, in the Iron Range. We mine taconite. And 
this concerns me greatly, what you guys have happening in the 
Appalachian mines, as well.
    How important in your industry--and one of the problems 
that we're having is we're trying to actually get an open pit 
precious metal mine. We're talking 7 years, I think over $27 
million in--just in studies and EPA studies. And one of the 
things I keep on hearing more and more is that the EPA keeps on 
moving the bar, which moves the timeline, almost to see who is 
the last man standing at the end of this game. That is the 
impression that I am getting. We are trying to open up a 
taconite mine that--it's an old mine. It's going to do the same 
thing it did before, but more efficiently, and more 
environmentally friendly, and we are still having those--these 
type of problems.
    How important is--in the industry--would you say is a 
pretty solid timeline to the coal industry?
    Mr. Carey. Mr. Chairman, Congressman, I--clearly, any time 
that you are investing millions and millions of dollars into a 
project, you want to have a rate of return. And if you simply 
can't get the permit, you can't get your product to market, you 
are not going to make that investment. And that investment, 
those investment dollars, will go offshore. We need the 
material.
    Mr. Cravaack. I couldn't agree with you more. And I just 
hope to keep our mines open in Minnesota, as well, because it 
is essential to not only the Iron Range, but it is also 
essential to Minnesota. And I thank you for all the efforts 
that you are going through right now.
    So, Mr. Chairman, with that I have got about 18 seconds, so 
I will just go ahead and yield back my time. Thank you.
    Mr. Gibbs. Mr. Rahall?
    Mr. Rahall. Thank you, Mr. Chairman. I appreciate all the 
panel's testimony this morning. And in particular, thank you, 
Mr. Roberts, for giving the committee some insight into the 
history and the heritage of West Virginia, and our relationship 
to coal mining, and what it means for job creation, what it 
means for, literally, keeping the lights on and employing a lot 
of law enforcement officials in our southern counties who 
otherwise would not have the budget from coal severance taxes 
to do such. And it is a story that is not well known in many 
parts of this Nation, yet it is a story that has contributed so 
much to the energy security of this Nation.
    Now, we all want to see our economy diversified, and we 
want to see other job creation, which the Chamber of Commerce 
is certainly in the lead in developing. And I am sure you 
recognize, as much as the next person, how we have struggled 
over decades in West Virginia to strike this proper balance 
between job creation, diversifying our economy, and 
environmental preservation. And it can be done.
    You know the importance of tourism to our State of West 
Virginia, for example, and how those figures keep on the 
upswing. So we can do it. We can preserve our beauty, we can 
create jobs in tourism at the same time that we provide jobs in 
coal mining.
    I wanted to comment--that's just a comment, not a question. 
I wanted to comment on what my dear friend, Mr. Bishop, brought 
up in regard to the pending permits, 140 pending--I believe he 
was quoting, obviously, EPA statistics--and 52 approved. And of 
the 88 not approved, none were denied, I believe, is an 
accurate description.
    I would say of those 52 that were approved, it was one heck 
of a process to get those 52 approvals. I mean it was--to say 
put the industry through the ringer would be an understatement. 
And a lot of concessions were made along the way by industry--
by all groups, both sides. As we know, it is part of the 
approval process.
    And some of those that were approved were characterized by 
many as a dare-to-mine permit, if you will. In other words, 
conditions were placed upon that approval such that one 
misstep, however slight, could cause a revocation of that 
permit approval. And now we have seen, since the Spruce 
revocation, that there is even the further danger that these 
approvals don't really mean much if the Agency can come back 
later and revoke a permit that has been granted.
    In addition, there is court cases. Court cases have 
contributed a great deal to this backlog, more so than what any 
administration has done. So, it is one hell of a process. And I 
am not saying that is bad, because there are obviously--there 
is obviously a negotiating process that has to occur here.
    But I guess I would ask you, you know, it does have an 
effect upon business' ability to make a decision for job 
creation, because they need a certainty. And is it your 
understanding that many of these permit applications have been 
withdrawn because the industry simply has gotten so frustrated, 
has been unable to make those decisions to keep people working, 
and are not sure of the rules of the game because they keep 
shifting, and in other cases cannot even find out what they 
have to do? So it is a whole maze of uncertainty here. Did you 
wish to comment on that?
    Mr. Roberts. I would comment briefly, sir, that employers 
very much need stability and predictability, and that without 
stability and predictability the level of risk goes up 
enormously.
    And then the cost benefit ratio begins to turn into, ``Well 
maybe it is safer to not then,'' too, and that is where, 
really, the risk of--managing the risk comes into play. It is 
predictability and stability that the companies are saying they 
need as much--it is not their inability to play within the 
rules, it is the ability to know what the rules are, and for 
those rules to be stable and predictable.
    Mr. Rahall. Thank you. Thank you, Mr. Chairman.
    Mr. Gibbs. Before I go to the next--our next question, I 
just want to interject a question here to the panel. My 
understanding of enhanced coordination and dealing with the 
criteria integrated resource assessment, MCIR, it is unique to 
the Appalachian region. And it is also my understanding that 
there is close to about 250 of those permits under enhanced 
coordination. And I think only two have been approved.
    Now, when you talk about permits being approved, is that a 
national figure, what is happening in Appalachia is because of 
enhanced coordination that we are not getting those approved? 
Is--would you have any insight on that, Mr. Carey, or anybody?
    Mr. Carey. Mr. Chairman, I would go back to what Mr. Rahall 
said, with describing a lot of those permits that were in the 
process of--they had already been in the process, and some 
things--the things that were given by those permits to move 
forward was almost a dare-to-mine type of scenario. So I would 
clearly--and your numbers may be more correct.
    But I would also say the concern that we have, as producers 
of a commodity, is for our customers. Our customers have to 
have reliability that we will be able to get our product to 
market. And if we in Ohio and West Virginia, Kentucky, 
Pennsylvania cannot meet that market demand for coal, that coal 
will come from someplace else. We need to have consistency and 
permitting. We need to have a reasonable time schedule so we 
can get our product to market.
    Mr. Gibbs. But it is clear to understand that there is, 
from this administration, the Appalachian region has been 
targeted, compared to the rest of the country. Is that true?
    Mr. Carey. Mr. Chairman, I would clearly say that, and I 
believe I did say that in my testimony.
    Mr. Gibbs. OK, thank you. Mr. Landry, do you have 
questions?
    Mr. Landry. Thank you, Mr. Chairman. Mr. Carey, you don't 
believe that the Federal agencies in this country create 
uncertainty in industries, do you?
    Actually, my questions are for Mr. Hopper. You served as 
counsel for the board of the Mississippi Levee Commission, is 
that not correct?
    Mr. Hopper. Yes, our foundation does.
    Mr. Landry. Are you--were you involved, or do you know the 
particulars of the vetoing of the Yazoo Backwater Area Project 
permit?
    Mr. Hopper. I know some of them, yes.
    Mr. Landry. And I am sure you understand the impact that 
the current flood waters are having on the Yazoo River basin.
    If those levies fail, is--I guess could--if EPA would not 
have vetoed that permit, and that project would have been 
allowed to proceed, would it--would the levee system be in a 
better position to handle the flood waters currently than they 
are now?
    Mr. Hopper. Certainly for that area, there is no question 
about it.
    Mr. Landry. So, just to make sure I understand, so EPA's 
vetoing of that permit could be endangering over 1,000 homes 
and hundreds of thousands of acres right now.
    Mr. Hopper. That is correct.
    Mr. Landry. All right. So, it would be logic to say that if 
EPA would have been around in 1927, and would have been vetoing 
404 permits, could we have built the Mississippi River and 
tributaries levees that are protecting, you know, not only 
Mississippi, but Louisiana, Arkansas, as well?
    Mr. Hopper. Well, I don't know how to answer that. But I 
think, clearly, it is contrary to the public interest to stand 
in the way of these flood protection programs. The EPA needs to 
facilitate these things, and not hinder them.
    As you say, this backwater area is flooded regularly. We 
now have serious flooding because of the rising Mississippi 
currently that has resulted in harm to individuals, private 
property, and to the ecosystem itself.
    The EIS, the new EIS that the Corps did, indicated that 
there would be a net improvement of wetland resources. The veto 
is based on a technicality that shouldn't come into play.
    Mr. Landry. I just wonder whether or not, you know, the--
this 404 permit, had it been around, you know, between 1927 
and, I guess, you know, into the 1960s, if the Corps would have 
been able to even build the system that is currently protecting 
hundreds of thousands of Americans right now in that 
Mississippi River basin, in addition to the property that it is 
currently protecting.
    We certainly noted there are weaknesses in the system right 
now. I pray that the Corps is able to, you know, rectify those 
weaknesses in the levee system. But I think it is important for 
people to understand that if EPA would have been around back 
then, we might not have those levees.
    One last question. In reading your statement I found it 
interesting that you believe that--do you believe--see if I can 
make this brief--do you believe that EPA's retroactive vetoing 
of a 404 permit to be a Government taking?
    Mr. Hopper. Yes. I think that the argument could be made 
that it is a Government taking. The courts have recognized that 
when one relies to one's detriment reasonably on a valid 
permit, that one establishes a vested right, which is a 
property interest, and it cannot be taken away without regard 
for an opportunity to recoup the investment. I think that is 
black letter law.
    But, that is just one means by which these new mining 
policies can result in a taking of private property. There are 
other means, as well.
    Mr. Landry. Thank you, Mr. Chairman. I yield back.
    Mr. Gibbs. Representative Lankford, do you have questions?
    Mr. Lankford. Thank you, Mr. Chairman. Mr. Carey, you 
mentioned four things that we can do to try to find some 
balance here: regulatory time-out; the State, making them the 
primary permitting authority; ending the guidance document 
without any kind of public comment; and then also certainty in 
permits. Let me just specify one of those.
    Let's talk a little bit more about the State being primary 
in the permitting process. Do you know of a State out there 
that you would look at, Mr. Carey, and say, ``This State is 
really not competent to handle the energy sources,'' whether 
they be coal, oil, natural gas--whatever the energy--wind, that 
that State, in particular, does not have competent leadership?
    Mr. Carey. Mr. Chairman, Congressmen, there are actually a 
couple of States that are currently--the Federal Government 
currently does the permitting and the inspecting. I believe 
Tennessee is one of those States, and I could be mistaken, but 
I believe the Missouri. But I could provide those numbers to 
you.
    So I think there are certain models that, clearly, the 
Federal Government has taken over the State programs when they 
have proved to be inefficient or unable to actually meet the 
challenge under the Federal law of SMCRA.
    Mr. Lankford. OK. A Federal structured program for, let's 
say, coal mining. Mining of coal, is it the same in West 
Virginia and Ohio and Wyoming, Oklahoma? They're all pretty 
much the same, each one is the same, acts the same, has the 
same kind of regulations and permits, or are they uniquely 
different, State to State?
    Mr. Carey. Mr. Chairman, Congressman, no. Each State is 
different. Each State has different topography. Each State has 
different coal seams that are mined in different manners. So 
each State is different.
    Mr. Lankford. So, have you seen EPA regulations show that 
kind of flexibility, that they are different in Ohio than they 
are in West Virginia or Kentucky or Wyoming, or are they pretty 
much trying to regulate with the same instrument in every 
single State?
    Mr. Carey. Mr. Chairman, Congressman, they are trying to 
regulate the same in all States, and break it up by regions. 
And that simply does not work.
    Mr. Lankford. OK. Dr. Sunding, let's talk about some 
economic models here. Investment slows down when you don't have 
certainty in the permitting process. If you are trying to get 
investment into any type of energy, then obviously that slows 
down when no one has any idea what is going to be permitted.
    What we have--seem to have at this point is an 
administration that, at their whims, is going to try to pick 
and choose winners and losers. When a plant started the 
permitting process 10 years ago, now with a change of 
administration, you lose favor and now you have millions of 
dollars on the line.
    Based on that, what type--and knowing the topography--who 
knows what is going to happen in the Presidential election next 
time. Based on--if this model continues, where it is not based 
on science, it is based on the politics of what is the 
preferences of an executive when an energy company has to plan 
10 years in advance, what type of energy would you recommend 
for any power company out there and say, ``This would be a good 
investment model, I would look at this?''
    Mr. Sunding. Right. Well, I think you are right to focus on 
the incentive effects, and I will say a few remarks about 
energy, but then I want to return to a broader focus, not to 
minimize the importance of energy at all, but the 404 program 
touches virtually every part of the economy.
    Mr. Lankford. Right.
    Mr. Sunding. And I do want to return to that a little bit.
    You are quite correct to point out that the EPA's decision 
in this case is precedential, and can have impacts that last 
far into the future, way beyond the case with just Arch Coal. I 
think it is fair to say that it would have a chilling effect on 
any potential investment that requires a 404 permit, whether it 
is energy or otherwise. So I think your point there is very 
well taken.
    With respect to other kinds of activities, let me come back 
again to something I talked about in my testimony, residential 
construction and transportation. By many measures, economists 
would say those are the most important sectors of the economy, 
in the sense that the average household in this country spends 
over half of their disposable income on housing and 
transportation, transportation being linked to energy, of 
course.
    But this is a tremendously important economic decision. And 
housing permits, or housing projects, most of the large 
projects that I know or have studied, require 404 
authorization. So this could not be more important for the 
housing sector. And----
    Mr. Lankford. So, basically, you are saying this removes 
certainty from all of the most critical parts of our economy.
    Mr. Sunding. Yes.
    Mr. Lankford. That if we don't have certainty in permitting 
in this, we are in trouble economically, because no one can 
plan, no one knows how to invest, and it is at the whims of 
whatever the policies are at the moment, rather than based on 
long-term science and planning and certainty.
    Mr. Sunding. Right. The ability to revoke a permit like 404 
can have very important incentive effects on investment across 
the entire economy.
    Mr. Lankford. OK. Let me just ask an opinion question of 
Mr. Hopper, as well. How long should a 404 permit take? What is 
a reasonable period of time?
    Mr. Hopper. A reasonable period of time would be 90 days to 
6 months.
    Mr. Lankford. And they typically take how long now?
    Mr. Hopper. According to----
    Mr. Lankford. If they hold?
    Mr. Hopper [continuing]. The research by Dr. Sunding, they 
typically take 2 years or more.
    Mr. Lankford. OK. Thank you. I yield back.
    Mr. Gibbs. Thank you. Representative Capito?
    Mrs. Capito. Yes, thank you. Mr. Roberts, you mentioned in 
your testimony that if surface mining were to be discontinued 
in West Virginia it would cost directly 6,255 jobs. But there 
is a job multiplier, I am sure, that you use. What is that job 
multiplier? For every one of those jobs, how many ancillary 
jobs?
    Mr. Roberts. Mr. Chairman and Congresswoman, we think that 
a reasonable multiplier could be perhaps--a reasonable and 
conservative multiplier could be anything from one-and-a-half 
to two, related to those jobs. And I think that is probably on 
the very--if that is an error, it is on the very low side.
    Our estimates are that, while we have approximately 21,000 
mining jobs in West Virginia, and nationwide approximately 
81,000 mining jobs, according to the U.S. Bureau of Labor 
Statistics, that we have another close to 80,000 jobs in West 
Virginia that exist because of the mining industry. So, if we 
were to extrapolate from that that 40 percent of those jobs are 
related to surface mining, that is 32,000 ancillary jobs 
related to surface mining in West Virginia.
    Mrs. Capito. OK, thank you. And then, just recently--I 
believe maybe Monday--in Congressman Rahall's district was 
announced the beginning of a construction of a coal-to-liquid 
plant which will obviously create jobs, another usage of coal, 
and will also help with our dependence issue on the foreign 
sources of oil.
    We have had stops and starts with coal-to-liquid before, 
because of the high expense of converting. How do you see this, 
in terms of the future and the longevity of coal, other uses of 
coal, and what kind of things are we doing in West Virginia to 
promote this?
    Mr. Roberts. I am actually pretty optimistic about the 
long-term prospects for using coal and converting it to other 
types of energy, and doing it cleanly and in an environmentally 
sound way.
    One of the mantras that people who are close to coal tend 
to have is that in our country and in the world we are going to 
need all of the energy we can get, on a going forward basis, 
and we are going to need it from virtually every source that we 
can think to create it. And to that extent, what we are hopeful 
about is that more research dollars will go into how we convert 
coal to other energy uses, and then how we do that cleanly and 
in an environmentally sound way, and how we transport that 
energy, once we convert it.
    But from a looking-forward basis, there is lots of reason 
for optimism that the massive coal reserves we have can be 
converted to other energy uses.
    Mrs. Capito. Right, and our universities are doing that 
right now, particularly WVU and Marshall--there again, another 
job creator, in terms of the development of technology and 
research around coal.
    Dr. Sunding, let me ask you a question. Does the EPA have 
to consider energy and economic impacts when they are making a 
decision? My understanding is that that should be part of their 
decision. And our next witness says in there that they do 
consider that, although, as I said in my opening statement, the 
administrator said that's not a consideration that she takes. 
What is your take on that?
    Mr. Sunding. Right. My take would be that, as a matter of 
public policy, they should be considering economic impacts. 
Earlier this morning I forget who was talking about balancing. 
And I think that is what we are ultimately trying to find here, 
is some kind of balance. Economic impacts and jobs are part of 
the balancing test.
    Mrs. Capito. But is it statutory that they consider this? 
Is it in the statute?
    Mr. Sunding. Well, again, I am not an attorney. There are 
probably better people here to----
    Mrs. Capito. There is Mr. Hopper. You are an attorney. Is 
it in the statute?
    Mr. Hopper. I am not aware of a requirement in the statute.
    Mrs. Capito. To consider that as an impact?
    Mr. Hopper. But the administrator has very broad discretion 
in how she administers the law, including rulemaking and 
enforcement.
    Mrs. Capito. OK. And one last question for Mr. Roberts. 
West Virginia generates, what is it, 98 percent of our energy 
from coal.
    Mr. Roberts. From coal.
    Mrs. Capito. For obvious reasons. We are right there, we 
have a lot of it.
    When you are recruiting businesses to West Virginia and 
asking them to relocate to West Virginia, one of our primary 
recruiting goals is our affordable energy resources, because of 
the proximity of the resource, the abundance of the resource, 
and the fact that we are very reliant on the resource.
    If that goes away, what kind of disadvantage would that put 
our State--but other States, like Indiana, I think, is one of 
the States that has a large reliance on coal as a resource.
    Mr. Roberts. Yes.
    Mrs. Capito. What would you----
    Mr. Roberts. The result of the high level of electricity 
generation that comes from coal in our State and in many 
similar States is that we have the--among the lowest 
electricity cost for commercial and industrial users in the 
Nation. For many years, West Virginia has had the second-lowest 
electricity costs in the Nation for industrial and commercial 
users. And that is very important, as our country tries to see 
its manufacturing economy recover. The recovery is likely to 
occur in the States that can provide the energy and provide it 
in a dependable, reliable, and low-cost way. And, for West 
Virginia, that has been a key factor in keeping some of the 
industrial facilities that we have in our State.
    Mrs. Capito. Thank you, and I think my time has expired. 
But the other question I wanted to ask--so I am just going to 
put it out there--is in West Virginia we have had a lot of 
issues around DEP, who has primacy on water rights, you know, 
the Corps, and it looks like a circle that keeps going around.
    And I think this is something that we need to have decided, 
because our State government officials are in a quandary, not 
knowing how to react, not only--well, around the permitting 
issues. Not only the private sector doesn't know how to react, 
but the State government is in a big quandary as to the correct 
way to move forward on what they think is an authority that the 
State DEP has.
    And with that, I thank you.
    Mr. Gibbs. Thank you. Representative Richardson, do you 
have a question?
    Ms. Richardson. Thank you, Mr. Chairman. I just have two 
questions.
    Dr. Sunding, first of all, welcome. I am from California, 
so welcome here. In your testimony you argued that EPA's 
decision to override the judgement of the Corps of Engineers in 
the Arch Coal case alters the incentives to invest in projects 
requiring a permit under section 404, and that the EPA's 
actions will chill investment in activities requiring a 404 
authorization. Could you elaborate a little further on that 
point?
    Mr. Sunding. Sure, I would be happy to.
    Ms. Richardson. And if you could, provide some specific 
examples.
    Mr. Sunding. Yes, sure, I would be happy to. I could give 
you some examples.
    Let me just say, as a threshold comment, that people often 
forget--I am not saying any members of the committee have 
forgotten--but the 404 program touches, as we were talking 
about a minute ago, many parts of the economy, not just the 
mining sector, not just housing. Virtually all public 
infrastructure projects can potentially have to get 404 
authorization: school building, road building, emergency 
response infrastructure, utility pipelines. These are all 
projects that routinely get 404 authorization.
    And if you think about the economic incentive effects of 
being able to revoke a valid permit ex-post, that is very 
different than the economic incentive effects of not just 
approving it in the first place. Because the investment has 
already been made. So that money is sunk. And it can't be 
recovered. Once part of a road is built, or part of a project 
is completed, it is irreversible, can't be recouped if the EPA 
changes its mind.
    So, that is a much more consideration, ex ante, than just 
the ability to have a permit denied in the first place, before 
the investment is made. So when I talk about the direct 
incentive effects of the action on all kinds of activities that 
happen in the economy, that is really what I am referring to.
    Ms. Richardson. OK. Thank you, sir. And, Mr. Carey, in your 
statement today you argued that one of the four things that 
could help to stimulate job creation in the Appalachian coal 
mining industry is to declare a regulatory time-out.
    Sir, with all due respect, if you look at various things 
that have happened in this country, whether it is financial 
regulation, whether it is the Deepwater Horizon, I don't think, 
realistically, you are going to get support of a regulation 
time-out. So what might you suggest that would be something 
more in the middle that we could possibly address and help you 
with?
    Mr. Carey. Mr. Chairman, Congresswoman, I think I laid out 
pretty specifically what I think this committee could outline 
to promote jobs in Appalachia. To take a middle ground 
approach, I am not sure what that means. If we are saying--if 
we are looking at what the surface mining or the 7,000 jobs 
that--the direct jobs that would be lost in Appalachia because 
of the surface mining rules, and other jobs grown into the 
west, I am not sure that is--how do you cut that in half and 
say, ``Well, I will take half of those job losses?''
    The Penn State University did a study a number of years ago 
that says for one coal job, up to 11 spin-off jobs are 
associated with that one job. So, if we are talking 7,000 
people----
    Ms. Richardson. Excuse me.
    Mr. Carey [continuing]. Congressman, we are looking at a 
factor of 77,000.
    Ms. Richardson. Excuse me. Excuse me. Excuse me. This is my 
time. You already gave your testimony, OK? So excuse me.
    And I do want to say for the record, Mr. Chairman, I was a 
little offended by this gentleman's testimony in reference to 
the President and to the EPA administrator. I have been on this 
committee 4 years, and we don't attack our administrators, and 
I don't think we allow people giving testimony to do so, 
either.
    Sir, the question I was asking you--and I am trying to help 
you, I am not against you--my question to you was you are not 
going to see no regulation. You know, you can sit here, if you 
want people to lie to you, you know, look at someone else. But 
I am just telling you I seriously doubt you are going to see 
anything that is going to be no regulation.
    So, if it is going to be no regulation--and we are talking 
about regulations, I am not talking about a specific job--what 
specific things could we do--because, you know, EPA is coming 
up next--what specific items could we help you within that 
regulation to ease--to get to the point of where you are trying 
to go? I am trying to help you.
    Mr. Carey. Mr. Chairman, Congresswoman, I would be happy to 
outline several different things that you could help with.
    Ms. Richardson. OK.
    Mr. Carey. I would be more than happy. But I do want to say 
something. I don't think that I ever inflammatorily went after 
the director of the EPA. I just stated what she did as an EPA 
administrator in New Jersey.
    Ms. Richardson. We normally don't reference specific to our 
administrators or to the President, and I don't know if you 
have testified here before, but I thought it was a little over 
the top, in my opinion.
    I welcome your comments of specific examples, and I would 
be happy to work with the chairman and the ranking member to 
assist you to achieve your goal. We want to help you, and we 
want you to be successful. Thank you.
    Mr. Gibbs. Mr. Bishop?
    Mr. Bishop. Thank you. Just one point, and I thank the 
chairman for indulging me.
    Dr. Sunding, and I think Mr. Roberts and Mr. Carey all made 
reference to the fact that the section 404 veto authority 
remains with the EPA, leads to a level of uncertainty that is 
debilitating.
    Under the heading of us all having the same set of facts, 
in the last 39 years--which I think we will agree is the post-
wagon wheel era--in the last 39 years, the Army Corps of 
Engineers has authorized over 2 million activities in the 
waters of the United States that are subject to section 402 
regulatory authority. There have been 13 vetoes. And, to be 
specific, the Obama administration, one veto. The Bush II 
administration, one veto. Bush I, four vetoes. Reagan, seven 
vetoes.
    So, I think 2 million permits set against 13 vetoes, it is 
a little difficult to argue that there is a level of 
uncertainty that is debilitating.
    I thank you, I yield back.
    Mr. Gibbs. Thank you. I want to thank this panel for your 
coming and testifying. It is very enlightening. And just a 
quick comment.
    You know, we are--I am really personally concerned about 
the revocation of a permit after 3 years it was issued. That is 
different from a veto, in my opinion. I think in the process, 
the application process, the EPA has the right to veto it. But 
the question here is after the fact, for not being in violation 
of that permit. And I haven't seen any evidence yet that they 
were in violation of the permit.
    So, again, thank you, and we are going to conclude this 
first panel and move on to our second panel, with the 
administrator, Ms. Stoner.
    Welcome, Ms. Stoner. At this time I welcome Ms. Stoner, the 
acting assistant administrator of the Environmental Protection 
Agency Office of Water. The floor is yours.

 TESTIMONY OF NANCY K. STONER, ACTING ASSISTANT ADMINISTRATOR, 
        ENVIRONMENTAL PROTECTION AGENCY, OFFICE OF WATER

    Ms. Stoner. Good morning, Chairman Gibbs, Ranking Member 
Bishop, and members of the committee. Mr. Rahall, as well. I am 
Nancy Stoner, acting assistant administrator of the office of 
water at the U.S. EPA. I appreciate the opportunity to testify 
before you on EPA's work to protect all of America's waters, 
including those in Appalachia.
    Mr. Chairman, before I describe EPA's obligations to 
protect water quality and the environment, allow me to repeat 
something EPA Administrator Lisa Jackson has said many times: 
``Americans do not need to choose between having clean water 
and a health economy; they deserve both.''
    Let me also repeat another point the administrator has 
made. None of EPA's actions are about ending coal mining. They 
are about reducing coal pollution and protecting the health and 
the environment of coal field communities. We have a 
responsibility under the Clean Water Act passed by Congress to 
ensure that surface coal mining projects do not impair water 
quality or endanger human health or environmental health. We 
are committed to fulfilling that responsibility, because we 
believe that every community deserves our full protection under 
that law.
    In the last 29 months we have worked with our Federal and 
State colleagues and with mining companies to design projects 
so they do not adversely impact water quality, so that they can 
move ahead. In fact, since 2009, more than 50 of the permits 
have now been issued that had been stalled, due to litigation 
or other factors.
    We all want our communities to be successful. The health of 
humans and ecosystems is an essential part of this equation. 
And clean water is essential to the health and well-being of 
every American. When the water is polluted, the community 
struggles, as we have seen in parts of the world where people 
have inadequate access to clean water, and are forced to rely 
on contaminated sources.
    In 2010 an independent peer-reviewed study by 2 university 
professors found that communities near degraded streams have 
higher rates of respiratory, digestive, urinary, and breast 
cancer. The study was not conducted in a far-off country. It 
was conducted here, in the U.S., in Appalachian communities.
    A peer-reviewed West Virginia University study released 
yesterday concludes that Appalachian citizens in areas affected 
by mountaintop mining experience significantly more unhealthy 
days each year than the average American.
    Healthier watersheds mean healthier people. It has been a 
high priority of this administration to reduce the substantial 
human health and environmental consequences of surface coal 
mining in Appalachia, to minimize further impairment of already 
compromised watersheds. We have demonstrated a constructive 
approach in our work with mining companies. When people of good 
will work together, we are able to find approaches that allow 
mining projects to move forward without degrading water 
quality.
    Let me make two specific points about this. First, initial 
monitoring data shows that mines that use modern practices to 
protect the environment can achieve downstream water quality 
well below levels of concern. These companies should be 
commended for working with EPA to protect water quality and 
human health while also mining coal.
    Second, given the discussion today about Arch Coal's Spruce 
Mine permit, I would like to point out that EPA offered a 
pathway for that project to move forward in a manner that did 
not impair water quality, just as we did with the projects we 
approved. Unfortunately, the company rejected this approach, 
and refused to modify the mine to protect waterways and stream 
life, as required by law.
    EPA reserves its authority to veto permits for only truly 
unacceptable circumstances. EPA has used its authority to 
revoke an issued permit only twice since 1972. We have stood 
our ground in this case, based on peer-reviewed science that 
has increasingly documented the effects of surface coal mining 
operations on downstream water quality and aquatic life. I have 
brought some of those peer-reviewed studies with me here today.
    Peer-reviewed studies have found elevated levels of highly 
toxic and bioaccumulative selenium, sulfates, and total 
dissolved solids in streams downstream of valley fills. Studies 
by the West Virginia Department of Environmental Protection 
have emphasized the role of high selenium levels in causing 
developmental effects in fish.
    EPA itself recently completed a review of the scientific 
literature related to the environmental impacts of surface coal 
mining, and found effects that included resource loss, water 
quality impairment, and degradation of aquatic ecosystems. We 
also completed an extensive assessment of the relationship 
between stream quality and high levels of conductivity. Both 
EPA reports were subject to extensive peer--public comment, and 
have been independently peer-reviewed by our science advisory 
board.
    In conclusion, Mr. Chairman, science has told us that when 
we don't protect our waters from coal pollution, our 
communities and future generations will suffer. As leaders, we 
should be taking every possible step to keep them healthy, and 
working together to provide a clear path for the future of 
coal, a path that ensures the health and prosperity of 
Americans living in Appalachia, and the energy future for our 
Nation.
    Just months before his passing, after serving 57 years in 
the U.S. Congress, Senator Robert Byrd stated eloquently that, 
``The greatest threats to the future of coal do not come from 
possible constraints on mountaintop removal mining, or other 
environmental regulations. But rather, from rigid mindsets, 
depleting coal reserves, and the declining demand for coal. The 
future of coal--and, indeed, of our total energy picture--lies 
in change and innovation.''
    I sincerely respect Senator Byrd's challenge to all of us 
to embrace the future. EPA will continue to work with our 
Federal partners, State agencies, the mining industry, and the 
public to fulfill our common goals of reducing adverse impacts 
to water quality, aquatic ecosystems, and human health. Thank 
you.
    Mr. Gibbs. Thank you for your testimony, Ms. Stoner. I will 
get right to the questions.
    My first question with the Spruce permit. Did the State of 
West Virginia support EPA's veto, or the--what you call a veto, 
I call it revocation of the permit.
    Ms. Stoner. No, sir. I don't believe they did so. The U.S. 
Fish and Wildlife Service supported it, and U.S. EPA made the 
determination.
    Mr. Gibbs. Did the Army Corps of Engineers support it?
    Ms. Stoner. They did not indicate that they thought a veto 
was necessary.
    Mr. Gibbs. Did they find any information that--in your 
testimony you talk about--because information had changed that 
warranted the revocation of the permit. Did the Corps give any 
new information to the EPA that there was any new information 
from the Corps?
    Ms. Stoner. They have specific statutory factors that they 
need to follow. They didn't find that those were met. But the 
new information, the science that I just referred to, I have 
brought with us today. These are scientific----
    Mr. Gibbs. Well, let me just stay with the Corps a second. 
Is that true, that the Corps submitted a report that was at 
least 50 pages long with no new information?
    Ms. Stoner. The correspondence that I saw referred to the 
statutory factors for the Corps' decision about whether to take 
further action.
    Mr. Gibbs. OK, but for the record, they did not support 
EPA's action.
    Ms. Stoner. They did not ask EPA to take that action, that 
is correct.
    Mr. Gibbs. OK. Can the EPA revoke a permit, even though the 
applicant is in full compliance with the law, and the 
regulations and water quality standards are in effect?
    Ms. Stoner. The statute specifies withdrawing a 
specification. It indicates the criteria for a 404 that include 
significant adverse impacts on wildlife, drinking water 
sources, other specific factors. That is what the statute 
refers to.
    Mr. Gibbs. In your testimony you talk about there was 
significant new scientific information that emerged, because I 
keep in mind that they went through an environmental impact 
study of about 10 years, got--and, of course, they got their 
permit there in 2007. And in your testimony you talk about how 
there was significant new scientific information. Can you be 
specific of what that information is?
    Ms. Stoner. Yes. Again, I brought more than 100 studies. I 
would actually like to have them be made a part of the record, 
if I could. And what that scientific information is, is 
documentation of the adverse impacts of valley fills and 
mountaintop mining, discharges in waterways on both the stream 
communities buried by that fill and downstream----
    Mr. Gibbs. Would that be using the conductivity as a test, 
as the main component of the studies?
    Ms. Stoner. Conductivity is a measure of stream 
degradation. So there are studies on conductivity, including 
one that EPA did and was peer-reviewed by the SAB. But there is 
lots of different studies that show the adverse impacts on 
public health and the environment. And those studies have been 
coming in in large numbers since 2007.
    Mr. Gibbs. Just so you are aware, last week we had a Dr. 
Leonard Peters, who is the secretary of the State of Kentucky 
energy and environment, he is a chemical engineer, and he 
testified on the conductivity that your standard that you 
have--that the EPA is imposing now, the water cannot exceed 500 
siemens. And I am told that most bottled water is allowed up to 
750. Is that true?
    Ms. Stoner. It is a standard that is based on fresh water. 
So it is what creatures that live in the water all the time 
need in order to survive. It is different than what we drink, 
and the salt that we are used to.
    Mr. Gibbs. In regards to enhanced coordination, there has 
been concern, we have had testimony that this procedure only 
applies to the Appalachian region, it doesn't apply anywhere 
else in the country.
    Do you think that--where do you--where can you tell me 
where it is in the law, that the EPA has the authority to do 
the enhanced coordination? Because, to me, it looks like it is 
kind of circumventing the permitting process. Can you----
    Ms. Stoner. It is designed to have agencies work together 
better to make decisions, provide clarity to industry, to do so 
in a timely way. That is the purpose of the process----
    Mr. Gibbs. I think the facts of what has happened, the 
results, have been that there is many--numerous delays. And 
since you are using that procedure that is not in law, there is 
nothing in the law that says you have to move forward in a 
timely fashion under enhanced coordination, because enhanced 
coordination does not exist in the law, is my understanding.
    Ms. Stoner. The enhanced coordination procedures actually 
has time limits in it. And those are designed to help move the 
permitting process along. As I said, more than 50 permits have 
moved through that process. A lot of those permits were stalled 
prior to the development of the enhanced coordination process.
    Mr. Gibbs. My understanding, there has only been two 
permits issued under enhanced coordination. Is that correct, 
out of the 250 that you had when you started your 
administration?
    Ms. Stoner. No, sir, I don't believe that is correct.
    Mr. Gibbs. OK. OK, Representative Rahall?
    Mr. Rahall. Thank you, Mr. Chairman. And thank you, 
Administrator Stoner, for once again being before our committee 
on water resources.
    As you certainly know, I have a number of concerns 
regarding EPA's review of Corps-issued section 404 permits and 
its intervention in coal-related State-issued section 402 
permits in West Virginia, throughout the Appalachian region.
    Now, with respect to the April 2010 guidance document 
affecting mining permits in Appalachia--and only, by the way, 
only by the way, coal mining in Appalachia, no other industry, 
no other region has been targeted by this guidance document, 
April 2010. You have testified previously that this kind of 
guidance is just a first step, and that such guidance, the 
documents are never binding and mandatory.
    Yet the EPA is using that guidance document in discussions 
with State agencies to comment on, dictate the terms of, and 
object to coal mining permits in Appalachia. This guidance 
document, along with other guidance documents on this matter, 
sets new timelines and criteria for permits that differ from 
the law and current regulation.
    So, my question is, how do you reconcile the way the 
guidance is being issued by EPA with the Agency's assertion 
that the guidance is not binding?
    And then, a second question I have is how many permits have 
been approved--because that seems to be a topic of discussion 
today--how many permits have been approved since that April 
2010 guidance document was issued?
    Ms. Stoner. First, on the guidance document, it applies to 
Appalachia because of the science on which it is based, which 
is science that was done in the field in Appalachia. So that is 
why the guidance document applies to Appalachia. It is not 
binding. And there have been no decisions that have been made 
that are based on guidance, as opposed to on the statutes and 
the regulations that govern our decisionmaking. They are 
informed by that science that has been done.
    So, that is the way that we are using it. It has timeframes 
in it to try to get the agencies to work promptly with mining 
companies to find solutions that allow mining to continue and 
protect water quality.
    Mr. Rahall. So you are working with coal companies to try 
to develop these models, or whatever, to--so we can move 
forward?
    Ms. Stoner. Yes, sir. We are working with coal companies. 
We have been very proud of the progress that we have made in a 
number of situations, including with Coal-Mac, with Hobet 45 in 
having permits that are issued that protect public health and 
allow coal mining to continue.
    And even in Spruce, the mining that had already started was 
allowed to continue. So we are looking for solutions. We are 
looking for ways of protecting public health and protecting the 
economy in Appalachia.
    Mr. Rahall. Why is it that the April 2010 guidance document 
issued ``for surface coal mining in Appalachia'' is being 
applied to all types of mining, including deep mining and 
mining that not even occurs in jurisdictional waters?
    Ms. Stoner. It applies to surface coal mining in 
Appalachia. And the information----
    Mr. Rahall. Not deep mining?
    Ms. Stoner. The information in it may be relevant, but the 
guidance is limited to--those areas in which the information 
was gathered was surface coal mining in Appalachia.
    Mr. Rahall. All right. Let me ask you. On April--I'm sorry, 
May 2nd of this year, the EPA and the U.S. Corps of Engineers 
jointly published in the Federal Register their proposal to 
issue clarifying guidance for determining which waters and 
wetlands throughout the Nation are protected in the CWA 
programs. That draft guidance was made public, and the Agency 
solicited comments from all interested parties.
    In April 2010 the EPA issued its detailed guidance for 
permitting and surface coal mining in Appalachia. It was made 
effective immediately. And the public comment was only 
solicited afterward.
    Can you tell me why the EPA, on the one hand, felt it was 
important to allow the public to weigh in on new guidance 
before it took effect, but on the other hand, in the instance 
involving only the Appalachian States, it did not allow that 
public input?
    Ms. Stoner. We are, as you may know, getting input on the 
mining guidance. We got it through the past year, we are 
analyzing that input, and are planning to move forward with a 
revised guidance, based on that input and based on our 
experience.
    We did feel it was important to get the science out to 
people to address the clarity issues that have come up several 
times in the hearing.
    Mr. Rahall. But all that was done after you implemented.
    Ms. Stoner. No, the science was put out at the same time, 
April of last year, the science reports from our office of 
research and development. We felt it was important to get that 
science out at that time so people could look at the science, 
which went through a peer review process thereafter, as well as 
the guidance, and have the best information possible on the 
clarity that people are seeking on how the permit process would 
work, so that we could reach our solutions of having mining 
permits issued that protect public health and the environment.
    Mr. Rahall. Why did you seek OMB review of your national 
guidance on jurisdictional waters but not on the guidance 
targeting Appalachian coal mining?
    Ms. Stoner. OMB is currently reviewing the revision to the 
Appalachian coal mining guidance. So we are seeking OMB review, 
other agencies' review----
    Mr. Rahall. At my request, by the way.
    Ms. Stoner [continuing]. Through that process. We were glad 
to see to that request.
    Mr. Rahall. What is the timeline for the EPA issuing its 
final guidance?
    Ms. Stoner. I expect it to come out later this month.
    Mr. Rahall. Thank you. Thank you, Mr. Chairman.
    Mr. Gibbs. Representative Cravaack, have you got a 
question? Yes.
    Mr. Cravaack. Thank you, Mr. Chairman. Ms. Stoner, last 
time we spoke--I appreciate you being here today--I asked you 
what the definition of navigable waters is. Can you please tell 
me what the definition of navigable water is in the new 
guidance?
    Ms. Stoner. The new guidance has a number of elements that 
are involved in the definition of navigable waters that relate 
to tributaries, that relate to wetlands, that relate to those 
connections to traditionally navigable waters and interstate 
waters.
    Mr. Cravaack. Would it include a seasonal slough or a wet 
meadow?
    Ms. Stoner. It would depend on the specific facts and 
circumstances associated with those.
    Mr. Cravaack. So you are saying that it would include a 
seasonal slough or a wet meadow at times?
    Ms. Stoner. It could, if they had a significant nexus to a 
traditional navigable water or an interstate water. The point 
of the draft guidance is to close loopholes and, again, as with 
the mountaintop mining guidance, provide greater clarity to the 
public to speed the permitting process and allow projects to 
move forward.
    Mr. Cravaack. Well, this isn't just affecting mountaintop 
mining. It is also affecting open pit mining in Minnesota. For 
example, the Keetac Mine has gone through 3 years and $300 
million of EPA studies in regards to trying to get a mine open 
that was already a previous mine that has just been shut down 
for a number of years. So the issue is there.
    So what wasn't able to go through the Clean Water--
America's Commitment to Clean Water Act, it seems like you are 
legislating by regulating.
    Well, let me ask you, then. If the EPA has guidance, would 
you agree that it should not be binding in any way?
    Ms. Stoner. EPA guidance is not binding. That is correct, 
Congressman.
    Mr. Cravaack. OK. If this is correct, if this is true, why 
would you propose such guidance?
    Ms. Stoner. It is to provide information and clarity to the 
regulated public.
    Mr. Cravaack. Why not a white paper?
    Ms. Stoner. A white paper could be considered a guidance.
    Mr. Cravaack. OK. But you are classifying it a guidance. 
And the reason why I bring this up, I have seen what guidance 
has done to our timber industry in the northern part of 
Minnesota; it has become a mandate. And that is what we are 
very concerned with, as well.
    Could you tell me just yes or no, do you believe the 
implementation of the ERP presents a substantive change to 
prior regulations?
    Ms. Stoner. I am not sure what the ERP is. Are you talking 
about the enhanced coordination process?
    Mr. Cravaack. Yes, yes.
    Ms. Stoner. Yes, that is not a substantive change. That is 
a process.
    Mr. Cravaack. OK. You think it is a process. All right.
    What authority, then, is the EPA acting under this enhanced 
review procedure, instead of the Corps regulations to process a 
certain coal permits selected by the EPA?
    Ms. Stoner. It is just a coordination process among Federal 
agencies. So we are operating with our Federal agencies to 
enhance our coordination to improve the permitting process.
    Mr. Cravaack. OK. I just understood--didn't I understand 
that the Army Corps did not agree with your assessment?
    Ms. Stoner. That was a question about the Spruce Mine veto. 
They very much agreed to and signed an MOU with us on the 
enhanced coordination process. We are working closely with the 
Army Corps on that process to get permits issued that protect 
public health and the environment.
    Mr. Cravaack. OK. So then how does the EPA reconcile the 
fact that in this process that you are saying--called the 
enhanced review of permits, suspends the Corps timeline for 
issuing the 404 permits required by the Clean Water Act and the 
Corps regulations?
    Ms. Stoner. It is my understanding that it includes dates 
for speeding up the process, not for slowing down the process.
    Mr. Cravaack. OK. Again, I will go back to the Keetac Mine 
with 3 years and, you know, through this process moving--the 
experience that we have seen in Minnesota is that the EPA keeps 
on changing the bar, where they will come up to a certain 
point--PolyMet Project, as well--where they will come up to a 
certain point, and then they will reach that point, and then 
the EPA changes the point, the data point, once again.
    So, my question is, you know, how can--and we talked just 
recently in the previous panel--how can business go about and 
do any type of certainty if EPA keeps on moving the bar on us?
    Ms. Stoner. We are very anxious to provide the certainty 
which you are seeking, and that is actually what these efforts 
are about.
    One thing about the scope of Clean Water Act jurisdiction 
is that we had heard from a lot of different entities from 
different perspectives that there was a lack of clarity. That 
is one of the reasons to provide the guidance and close those 
loopholes, provide that clarity the regulated entities need.
    Mr. Cravaack. Well, ma'am, to tell you the truth, and 
speaking in regards to the mines in Minnesota--and I will--the 
people of the mines in Appalachia--I can tell you there is not 
one person or one entity that has said the EPA gives them any 
type of certainty. As a matter of fact, it does the exact 
opposite.
    So, that is my comment to you. And I am out of time, and I 
will yield back, sir.
    Mr. Gibbs. Thank you. Representative Richardson?
    Ms. Richardson. Thank you, Mr. Chairman. Ms. Stoner, you 
mentioned about EPA working together. Do you have a 
stakeholders group or an advisory group regarding mining, coal 
mining, specifically?
    Ms. Stoner. We have advisory groups on a lot of different 
topics. I am not sure whether we have one on coal mining, in 
particular.
    Ms. Richardson. OK. Might I suggest that if something 
raises to the level of the U.S. House of Representatives, you 
might want to consider having a stakeholders group. I don't 
really think, legitimately, you can say that you are working 
together if you don't even have a group where you are seeking 
their feedback to be able to work with them.
    So, my request would be--if you would take it back to the 
administrator--if she would consider having a stakeholders 
advisory--whatever you want to call it--and I think certainly, 
with all due respect to Mr. Carey, he should be one of the 
people that is first on the list to be considered as a part of 
that group. Would you consider that?
    Ms. Stoner. I would be happy to take that suggestion back.
    Ms. Richardson. Thank you, Ms. Stoner. My second question 
would be any time something like this rises to the level, it 
says to us there is probably a problem, and I listen to my 
colleagues here. Have you had any hearings in the Appalachian 
area to talk about some of the concerns that have been brought 
forward to us today?
    Ms. Stoner. Yes, we have. We have had hearings, including 
hearings on the Spruce Mine itself, in which we had lots of 
public interest, lots of testimony from people from various 
perspectives within Appalachia: people who were concerned about 
public health, people who were concerned about the environment, 
people who were concerned about jobs, people who were concerned 
about all kinds of issues. And we did listen to and considered 
all of the input we received at those hearings.
    Ms. Richardson. And specifically regarding the ability to 
do jobs, what have you implemented, based upon those hearings 
that you had?
    Ms. Stoner. Our strategy is to work with companies to meet 
the requirements of the Clean Water Act to protect public 
health and the environment and get permits issued that allow 
mining to continue and provide those jobs, while protecting 
public health.
    Ms. Richardson. And what, specifically, are you doing to 
help them to do that?
    Ms. Stoner. We are doing that in individual cases, working 
with those companies under the ECP process that we have been 
talking about, mostly through our regions. Most of the 
implementation of the Clean Water Act is through our regions. 
And we have been proud of the success that we have had. We have 
data showing that--recent data from Coal-Mac permits showing 
that the requirements of the Clean Water Act can be met in 
those cases, and jobs can be preserved, as well. That is our 
strategy.
    Ms. Richardson. OK. Ms. Stoner, I thank you for your time, 
and I would just really urge you to--if we say we are working 
together, we need to be able to prove that we are working 
together. And I would just strongly encourage some sort of 
group where the impacted people have an opportunity to work 
with you and make some changes.
    Mr. Carey, I asked him--I apologize, Mr. Chairman--I asked 
Mr. Carey if he would give us some specific examples of 
regulatory things that could be done to help. Are you willing 
to consider those and answer what he provides to this 
committee?
    Ms. Stoner. Of course.
    Ms. Richardson. Thank you, ma'am. I yield back.
    Mr. Gibbs. Representative Capito, do you have a question?
    Mrs. Capito. Thank you. I am sorry I had to be out of the 
room, but I read your testimony, and I appreciate you coming 
before the committee.
    I want to ask a question about the interplay between the 
EPA and the DEP. My understanding is that the DEP--the State 
DEP--I am from West Virginia--is tasked with setting the water 
quality standards, correct? But EPA has come in and keeps 
changing the standards and overturning what the State is doing.
    How are you working with the State to try to work out those 
issues?
    Ms. Stoner. We are not overturning State standards. So you 
are correct, that West Virginia sets State standards.
    Mrs. Capito. Right.
    Ms. Stoner. Some of the standards are narrative standards, 
and they need interpretation. And the science that we are 
working on is to help interpret those standards so that they 
can achieve their goals, which is ensuring that waters are 
usable for the people of West Virginia.
    And so, we are in regular contact with the State in 
discussing those State standards, and discussing particular 
permits, and trying to move forward together to get the permits 
issued to protect public health for citizens in West Virginia.
    Mrs. Capito. When you are considering the standards--and 
you heard, probably, my testimony, and you heard my 
conversation with Administrator Jackson telling me that the 
implications of jobs and the economy is something that she 
considers when making a decision, because her job is to oversee 
the Clean Water Act, exclusively.
    And in your statement, you talk about--and we have talked 
about this--the balance between healthy watersheds and a 
healthy economy. What considerations do you have when you are 
looking at a permit, in terms of the economic impact? Do you 
have a job impact statement? Do you have a--do you go to the 
community and talk to people that are actually living and 
working there, what kind of impact this is going to have on 
their livelihoods?
    Is that part of your written statement? Is there a metric 
that you have to follow? Or is that, in fact, as the 
administrator said, that is not considered, in terms of whether 
to move forward?
    Ms. Stoner. It--first of all, with respect to the Spruce 
Mine, as I mentioned, we had a hearing in West Virginia where 
we had lots of people, and could consider all of the different 
input that they provided at that hearing.
    But our strategy on jobs is to work with the company to 
meet the requirements of the Clean Water Act, which are about 
meeting those water quality standards that you referenced 
before. And those standards are set to ensure that waters are 
usable for the things that people use them for: drinking, 
swimming, fishing, and so forth. Those are all economic 
activities. The Clean Water Act supports strong economies.
    And so, having clean water, having a strong economy, having 
public health protection in West Virginia, that is our goal.
    Mrs. Capito. Well, I mean, I agree clean water--I mean I 
live in West Virginia, it is important to all of us across the 
Nation. I mean I don't think there is a disagreement there.
    But I think you would agree and I would agree that weaving 
the balance between the economy and the environment is 
difficult, not just in mining, but in--we are seeing this in 
our natural gas exploration in the northern part of our State. 
The ag community has seen it, the hard rock mining folks are 
seeing it.
    And so, I guess basically what you are telling me is that, 
no, you don't, as the EPA, consider the job and economic 
impact. That is the company's job, to put forth the job and 
economic impacts, and to--and so, in plain talk I guess, what I 
want to see is you basically following up with what you are 
actually saying, and having behavior follow what the rhetoric 
is. And that is my concern. And that is our concern in West 
Virginia.
    Ms. Stoner. So what I am saying is that Appalachian 
communities don't need to choose between jobs and a healthy 
environment. They deserve and can have both. And we are totally 
committed to following up to ensure that we are working toward 
that common goal.
    Mrs. Capito. Well, I wish I could feel that that were 
absolutely the case. But, as I said, actions speak louder than 
words. And, unfortunately, a lot of the actions that we are 
seeing don't follow with what you are telling me today.
    I would yield back.
    Mr. Gibbs. Ms. Richardson, you had a follow-up?
    Ms. Richardson. Yes, Mr. Chairman. I just wanted to 
clarify. I didn't hear for the record. Did you accept Ms. 
Stoner's materials into the printed record? She had asked, but 
I did not hear us confirm it.
    Mr. Gibbs. Oh, yes, we will.
    [The information follows:]

    The studies may be accessed online at the Government Printing 
Office's Federal Digital System (FDsys) at: http://www.gpo.gov/fdsys/
search/pagedetails.action? st=jacketid%3A72-211&granuleId=CPRT-
112HPRT72211&packageId=CPRT-112HP RT72211. In the ``Download Files'' 
section of the Web page, select the PDF format.

    Ms. Richardson. Perfect. Thank you, sir. Appreciate that.
    Mr. Gibbs. Representative Landry?
    Mr. Landry. Ms. Stoner, I was glad to see the chairman 
point out the fact that, you know, in your guidance on 
conductivity standards you said that they could not exceed 500 
siemens, and Perrier doesn't--would exceed that. So should I 
not put Perrier in my fish tank, or should I not swim in it, or 
should I not drink? I mean I am trying to understand. You know, 
what exactly is--you know, are we setting as a threshold?
    Ms. Stoner. Well, first of all, in the guidance 500 is not 
a standard, as you suggested. It is--again, based on the 
science, it is a benchmark. But what it is designed to do is to 
protect fresh water communities. So there is fish and various 
different kinds of creatures that live in fresh water and some 
that live in salt water. This is fresh water communities. And 
what we are doing is, based on the science, what is necessary 
to protect those.
    And what we have seen is that high conductivity levels are 
linked with high levels of dissolved solids that are 
detrimental to that stream life. So the conductivity limit is 
about protecting 95 percent of the species that one would find 
in a mountain stream.
    Mr. Landry. Well, but what I am concerned about is whether 
or not you put out these guidance documents, and then you 
strong-arm those permitees by threatening your use of your veto 
power. So it is kind of like we want you to--this is a 
guidance, but if you don't meet it, remember we can veto you 
over here.
    You know, that is what concerns, I believe, not only me but 
my colleagues here, is what goes on not in this committee room 
and your answers, but when you all close the door and put those 
companies in your office. Believe you me, as a business owner, 
I wouldn't deny that you all do that, because I have 
experienced it.
    The other thing that kind of strikes me is that section 
101(f) of the Clean Water Act states, ``It is the national 
policy that, to the maximum extent possible, the procedures 
utilized for implementing this act shall encourage the drastic 
minimization of paperwork.''
    Now, considering that a 404 permit required an EIS on a 
permit that I studied that I had mentioned earlier that spanned 
over 1,600 pages, including 58 pages just to respond to your 
EPA comments, would you say that you all are failing to 
actively implement that section?
    Ms. Stoner. Most 404 permits are issued through a general 
permit process, and that is about 80,000 per year, as I 
understand it. And they take less than 90 days. So that is how 
most 404 authorizations occur.
    Mr. Landry. Well now, I want you to know something. Down--
you know, look, I have got levee districts back in Louisiana 
that basically can't repair their levees because the cost of 
your permit is more expensive than the cost to repair the 
levee. Do you understand what kind of effect you all are 
having?
    Ms. Stoner. I agree with you on the importance of limiting 
paperwork, and in speed and efficiency in Government 
operations. That is in everybody's interest. I completely 
agree.
    Mr. Landry. Well, I don't understand, because back when the 
Chapala Basin levee was first--or when it was strengthened back 
in the 1980s, the 404 permit came like that. But yet--so at a 
time when the 404 permits started, the issuance of them 
happened at a quicker pace. But yet, as time has dragged on, 
the amount of time that it's taken to get that permit has 
continued to exceed what it was prior to it.
    So, what you are saying, your actions don't match the 
rhetoric.
    Ms. Stoner. Well, we are working closely with the Army 
Corps to make permit decisions expeditiously, and to make 
decisions that meet the requirements of the law and protect 
public health.
    Mr. Landry. Well, I am about to run out of time, but are 
you familiar with the fact that you all vetoed a permit in the 
Yazoo River Basin that now could come back to cost hundreds of 
millions of dollars if those levees fail? Do you understand 
that impact of what that decision may create for those people? 
And I do not represent Mississippi.
    Ms. Stoner. I was not personally involved in the decision 
having to do with the Yazoo pumps veto, but my understanding is 
that it actually was not about flooding in the Mississippi 
River. So it was actually about pumping backwater behind the 
levees. That is my understanding, and that 67,000 acres of 
wetlands were involved in that decision.
    Mr. Landry. Have you ever lived in an area that is prone to 
flooding?
    Ms. Stoner. You know, interesting that you ask that. I grew 
up in a flood plain, sir. I grew up in the flood plain on the 
south fork of the Shenandoah River in Waynesboro, Virginia. And 
my house was frequently flooded. And I am very interested in 
protection against flooding.
    Mr. Landry. Well, I hope that EPA never vetoes any of the 
permits that would protect that area you used to live in. I 
yield back.
    Mr. Gibbs. Representative Young?
    Mr. Young. Thank you, Mr. Chairman. Ms. Stoner, the newly 
created enhancement review procedures is--it is the EPA, not 
the Corps, that determines permit review criteria and--coal 
mining section and 404 permits. So who is making the ultimate 
determination of those permits, the Corps, the EPA regional 
offices, EPA headquarters, or the administrator?
    Ms. Stoner. Normally, decisions about Corps 404 permits are 
made by the Corps.
    Mr. Young. By the Corps?
    Ms. Stoner. Yes, sir.
    Mr. Young. OK, that is enough. What authority was EPA 
acting under when it created new enhanced review procedures 
instead of the Corps regulations to process certain coal 
permits as selected by EPA? What authority?
    Ms. Stoner. It didn't take away the authority of the 
Corps----
    Mr. Young. What authority did it act under?
    Ms. Stoner. This is intergovernmental relations within the 
executive----
    Mr. Young. What authority did the EPA act under?
    Ms. Stoner. We are acting under the Clean Water Act, our 
authority, the Corps' authority----
    Mr. Young. So, you usurped the Corps?
    Ms. Stoner. No, sir.
    Mr. Young. That is what--my interpretation.
    Ms. Stoner. It is about----
    Mr. Young. That is enough. Yes or no, do you believe that 
implementation enhanced review procedures represents a change 
in our prior regulations?
    If yes, why didn't the Agency go through the formal 
rulemaking process to make these changes to the regulatory 
program, particularly since the CWA requires any changes to the 
404(b)(1) guidelines must be done through rulemaking?
    Ms. Stoner. They are not regulatory changes.
    Mr. Young. They are not? So you don't consider this a 
substantive change?
    Ms. Stoner. No, sir. They are not a regulatory----
    Mr. Young. It is not a substantive change, yet you are 
overcoming the Corps.
    Ms. Stoner. And it doesn't overcome the Corps. We are 
working with the Corps. That is what the enhanced----
    Mr. Young. The Corps doesn't agree with you.
    Ms. Stoner. Well, that is----
    Mr. Young. And I have talked to the Corps. You are not 
working together. You are running roughshod, as an agency. And 
I think you can tell that Congress understands that.
    Ms. Stoner. I meet with the Corps on a regular basis.
    Mr. Young. You meet with the Corps, but you are not 
working. You are dictating to the Corps.
    Ms. Stoner. We work closely with----
    Mr. Young. Now--that is enough.
    Ms. Stoner [continuing]. Congressman.
    Mr. Young. Under the MOA issued by the administration 
almost 2 years ago, the administration stated new procedures 
were then necessary to streamline and coordinate the permitting 
process. And how do you explain that the new process has only 
resulted in an issuance of eight permits in nearly 2 years?
    Ms. Stoner. We--you are not counting the 42 that we issued 
immediately.
    Mr. Young. No, what----
    Ms. Stoner. More than 50 had been----
    Mr. Young. In 2 years you issued eight permits. After this 
was organized, 2 years, eight permits. How is that a 
streamline?
    Ms. Stoner. Since January----
    Mr. Young. It is not a streamline, and you and I know it.
    Ms. Stoner. Since January of 2009, it has been more than 
50.
    Mr. Young. Ms. Stoner, I have to tell you I am not a happy 
person with EPA. I think you have gone far beyond your 
authority. You have been dancing very well at this hearing. And 
what you are doing is using abusive power against the 
legislative intent.
    I watched this in Alaska. You came in and set different 
standards on arsenic, which is natural, after we put a plan in 
20 years ago. You changed it, and cost the community $37 
million to meet your standards without any science. The science 
you have is flawed.
    Now, what I am suggesting to any State or any area to have 
a good set of scientists and contradict what you do. You are 
doing--you have an agenda. Your agenda does not make this 
country productive. It takes away jobs from this country. We 
are not producing in this country. And you look at every time 
we try to produce something, you are involved. And your 
administrator is directly involved. This administration has a 
new agenda. The agenda is non-production. No working for the 
working man. People sitting in their little office, making 
regulations.
    Mr. Chairman, this has to stop, and the only way it can 
stop is de-fund them. Go through each area and de-fund when it 
doesn't make sense and when the science is not there. When they 
don't listen to the other science, they use the science of a 
university to get the money from this Congress. And that is 
where we have to stop it. I yield back.
    Mr. Gibbs. I thank you. Representative Lankford?
    Mr. Lankford. Thank you, Mr. Chairman. Thanks for being 
here, as well.
    Obviously, we have a lot of questions and a lot of 
concerns. The last time you were here I asked you point blank 
if there was a State that you could identify their department 
of environmental quality, or whatever term they may use, that 
was incompetent for the task on that. At the time, you said 
back to me, ``We don't know of a State, they are all working, 
they are all doing a great job.'' I affirm that, that is great.
    The issue comes up in a situation like this, where a State 
is saying, ``We are walking through this process, we are trying 
to establish it,'' EPA steps over the top of them and says, 
``No, we have got this, we are now going to take this on.''
    And though the science comes up--and you referenced earlier 
we have a high propensity for, or higher propensity for certain 
diseases and things in this area--there is not a causal 
relationship that I am hearing from that science, unless you--
unless there is something I missed on that. To say that this 
particular area has certain health issues, and then to say, 
``And it is because this water issue'' is a different gap.
    Is your science saying that it is causal, or is your 
science saying that it exists here? Because there are lots of 
issues that could be causing that. Is there something that you 
are saying that is causing it?
    Ms. Stoner. There are two studies, one about cancer rates 
and another about other health indices that show a correlation 
between degraded streams, between mountaintop mining, and 
between people's health issues in Appalachia. So I am referring 
to the correlation that was found to be statistically 
significant by scientists at Virginia Tech, University of West 
Virginia, and the medical school at University----
    Mr. Lankford. Part of what you gave to us today.
    Ms. Stoner. Yes, sir.
    Mr. Lankford. Because I would be interested--I didn't get a 
chance to see that. Because, obviously, there are a lot of 
assumptions that are made to say, ``This occurs, and so 
naturally it is because of this, because we don't like this at 
this point, and so we will try to shut this down,'' whatever 
the ``this'' is at the moment of that.
    Let me shift a little bit. Obviously, the Federal 
Government, for years, has promoted coal. You go back to the 
Carter administration, as I mentioned earlier, the Carter 
administration was a leading advocate for coal, and pushing a 
lot of companies to start using more and more and more of that. 
Now they are, now America is very focused in on using coal, 
which has been very affordable and has been very efficient for 
us, and now there is--this administration is pulling away from 
it as fast as they possibly can, and there is a shift on that.
    We are seeing that not only in the mining of that, but also 
in coal production. Let me give you an example from my State, 
the 316(b). Cooling ponds next to a coal-fired power plant have 
some fish that are getting caught into it, and so EPA has 
recently contacted them and said, ``You are going to have to 
change the way that you do your intakes.''
    Is there a certain number--because they are trying to 
find--is there a certain number of minnows--and that is what it 
is in one of these ponds, literally, it is bait fish that are 
getting caught against this--is there certain minnows, a number 
out there, that they can go by and say if there are 300 minnows 
killed in a year that is OK, if there is 1,000 it is not OK? 
How is that guideline working? Because it is moving for them, 
and it is about to cost Oklahoma consumers of energy millions 
of dollars to make an adjustment.
    Ms. Stoner. First of all, let me just say EPA actually is 
not working to end coal mining. What we are doing is addressing 
coal mining pollution and protecting public health and the 
environment under the statutes that we are authorized to 
implement.
    Mr. Lankford. All right.
    Ms. Stoner. With respect to 316(b), we are currently 
working on standards for existing facilities--I don't know if 
this is an existing----
    Mr. Lankford. It is an existing facility.
    Ms. Stoner. And those standards are not yet complete.
    Mr. Lankford. Correct. And they have been years in the 
process.
    Ms. Stoner. That is right.
    Mr. Lankford. And now--waiting, and now it is all coming 
down.
    My concern on it is there is no standard. There are 
millions of dollars in now having to retrofit something where 
there is something--and I am going to ask the same question. If 
there is going to be some standard implemented for how many 
minnows can be killed in an area, I am going to ask the same 
question. How many birds can be killed at a wind farm? Will EPA 
also be submitting--you know, we can't have more than 10 birds 
a year killed at a wind farm, or else there is going to have to 
be some new guidance, some new something that happens in that.
    This is the moving process that is occurring in every form 
of energy production currently, that as soon as mining starts 
or shifts or begins to plan, they can't plan because they don't 
know what the EPA guidelines are going to be. These plants 
can't change on a dime. They are 10 years in process to get up 
to speed.
    And currently, no one knows what type of energy is the new 
form of energy. Because if they put up wind offshore, Sierra is 
going to hit them because there are birds being killed there. 
So maybe that is going to last long, maybe that is not going to 
last long. We cannot do nuclear now, and we cannot do, really, 
coal now, because the permitting takes so long, and we don't 
know if that is going to be acceptable.
    And for the energy companies, they have no idea about rules 
and now water streams and--they have no idea. ``We would like 
to shift to natural gas.'' Oh, no, wait. EPA is doing a whole 
big study now on hydraulic fracking. My State in Oklahoma, 
since 1949, has been doing hydraulic fracking. Come drink our 
water and breath our air. It is a beautiful State.
    No one knows what energy they can use. You are shutting 
down the production of energy, based on these arbitrary rulings 
and guidelines that go out that may have some scientists on it, 
but there is no correlation between reality of how things 
really get paid for and what really occurs. We have got to have 
some stability.
    If there is anything the EPA can give to us, it is a break 
in the regulatory environment and provide our consumers some 
stability so that we can catch up. That would be a great gift 
to our economy. And with that, I yield back.
    Mr. Gibbs. Thank you. Representative Bucshon?
    Dr. Bucshon. Thank you for coming. I am a cardio-vascular 
surgeon, so I know something about peer-reviewed studies. And 
the question I have is you mentioned the environmental impact 
studies that were published and peer reviewed. And who were the 
scientists that peer-reviewed them and their organizations?
    Any--I mean do any of the studies that you are saying that 
are applying to this, did they come from outside of Government 
organizations or organizations that were contracted by the 
Government to provide that data?
    Ms. Stoner. Well, there are a number of studies. As I said, 
more than 100. So there are EPA studies that are peer-reviewed 
by our science advisory board. There are also studies from----
    Dr. Bucshon. Can I ask a question? Who appoints the science 
advisory board? Is that someone--does the administration pick 
the members of that?
    Ms. Stoner. I don't know the answer to that question. I 
would be happy to submit it for the record.
    Dr. Bucshon. You know, because I think that is critically 
important.
    The point I am trying to make here is that if you are 
quoting peer-reviewed studies, like in health care--for 
example, would you believe a peer-reviewed study of a product 
if the companies that make the product did the peer review?
    Ms. Stoner. That would be a factor to look at in evaluating 
the study.
    Dr. Bucshon. That is just a yes or no. I mean would you 
believe--do you think the American people would believe a study 
on a product that is being made, if the people that make--or 
companies making the product did the peer reviewing, and then 
said it was peer-reviewed?
    Ms. Stoner. There are such studies all the time.
    The other studies that I was referencing were ones from 
universities----
    Dr. Bucshon. My point is this. If your peer review that you 
are talking about are all Government agencies, or people who 
the Government has contracted on behalf of the Government to 
give peer review, that is not peer review. What peer review is, 
is independent people that have no financial or political 
motivation about what the results show.
    And so, I will--we will--it will be interesting to see 
those studies and see that--whether or not there is any of 
those type of folks that are telling you the same thing, or 
else--or whether or not this is all stuff that the Federal 
Government is doing. And I will be honest with you. As a 
citizen I don't have a great deal of confidence that, because 
of politics and because of other reasons, there won't be some 
outside thing motivating the results as a means to an end.
    The other question I have is do we have baseline 
conductivity, water--conductivity studies from water all around 
the country in different areas? You guys just--do you have 
just, you know, streams, rivers, everywhere, do you have, like, 
a whole list of what the--just baseline is of conductivity?
    Ms. Stoner. Congressman, I have some information on the 
science advisory board. So we solicit nominations for reviewers 
from outside entities, including from mining representatives.
    Dr. Bucshon. Great.
    Ms. Stoner. And the other studies are from universities. 
And I think that the universities know how to do peer review 
work.
    Dr. Bucshon. They may, unless you have contracted with them 
for the information.
    Ms. Stoner. No, no. I am talking about studies they have 
done----
    Dr. Bucshon. That is a big, big difference.
    Ms. Stoner. That they have done, not that we----
    Dr. Bucshon. Well, they have done the studies. But if the 
EPA contacted them and they--and asked them to do the study and 
they are getting funded through some Government organization to 
do the study, that is not an independent peer review. That is 
a--and the--because I have trained at universities, I have went 
to multiple universities. I understand the whole university, 
you know, publish or perish environment. I understand all that.
    And if--say, for example, if a drug company came to a 
university and said, ``Could you guys test our drug,'' and the 
drug company was going to pay them a bunch of money to do it, 
would you believe that? I wouldn't.
    Ms. Stoner. No, I understand about the conflicts of 
interest point that you are making. It is an excellent point.
    Dr. Bucshon. Yes.
    Ms. Stoner. I would be happy to provide more information 
about the peer-review process.
    Dr. Bucshon. That would be great. On the baseline 
conductivity, I am interested in how you establish--first of 
all, how you establish what is safe. And do we have baseline 
conductivity--and, for that matter, you know, particle studies 
like the selenium you are quoting--from multiple streams 
throughout the country to give us--you know, to see how--if 
there is a scientific baseline?
    Do we have that? Because if I was--as a scientist, want to 
say, ``OK, I am going to set a level,'' I would want 
information from all my streams and waterways from all over the 
country, and I would look at all that, and I would say, ``Well, 
here is what is reasonable.''
    Because I know you are making the distinction between the 
water and what is survivable by fish or other things, and that 
is a good distinction. But on the other hand, then where are 
you getting that survivability data from? Who studied it, and 
where is the baseline--how is the baseline established?
    Ms. Stoner. We have an existing water quality criteria for 
selenium, so we have done----
    Dr. Bucshon. From--where did that come from, though? That 
is the--see, I understand that you have criteria, but the 
question is, who did it? Did you--if you did it, do you have 
scientific data that has shown it? Have they done--you know, 
that is the question.
    Ms. Stoner. Right. We go through a rigorous scientific 
process to do a water quality criteria. And we would have data 
from different areas of the country for selenium----
    Dr. Bucshon. Could you please provide all of the water 
quality data based on conductivity and all other foreign 
products that are in water from every--from all 50 States, for 
example, so you can help the Congress establish what is 
actually out there as a baseline?
    Because if you set--and I can tell by your expression you 
are not quite understanding what I am saying----
    Ms. Stoner. That is true.
    Dr. Bucshon [continuing]. Or whether it is useful or not. 
But in medicine, for example, if you are going to establish a 
baseline on anything, right, you have to have a broad, diverse 
data. You can't just pull--you just can't go to one area, one 
State, and say, ``This is how this works here.'' If you are 
establishing this for the United States, I would think that you 
would want to see what your baseline levels are everywhere, and 
establish a reasonable baseline.
    Ms. Stoner. Yes, we have a strong scientific peer review 
process for all those water quality criteria. We get input from 
outside entities for all of those. In the water quality 
criteria for conductivity we did have review by the science 
advisory board, which strongly endorsed our science and said it 
was a model for future water quality studies.
    Dr. Bucshon. OK. I am over time, but what I would like to 
see is I would like to see the water quality data from around 
the country that the EPA uses to establish its baselines. Thank 
you.
    Mr. Gibbs. Thank you. I think there is a lot of things that 
just aren't reconciling with some of your statements and what 
some of our information is. So we are going to have another 
round of questioning, and I am going to start that off.
    It is my understanding, when you talk about the 
conductivity that peer reviewed, it is my understanding that 
the EPA actually put out that guideline before it was peer-
reviewed, is that correct?
    Ms. Stoner. We put it out in draft before the peer review, 
and then took public comment in, went through the peer review 
with the SAB. That is correct.
    Mr. Gibbs. OK. Because you know what is happening is some 
of these--it is kind of de facto taking effect.
    I am a little concerned. It is my understanding it took--
the EPA spent more than 15 years to revise the aquatic life 
criteria for selenium, and that effort is still not completed. 
And it is--apparently it has just taken you, literally, months 
to develop a benchmark for conductivity--a matter of months.
    Can you tell me the difference in developing a water 
quality criteria versus developing a benchmark, and then 
explain how these two limits differ in their use?
    Ms. Stoner. A water quality criteria is the science that 
EPA provides to States to use in setting water quality 
standards. It is done under a statutory provision, and has 
processes associated with it, including the science that I was 
just discussing with the other congressman.
    The benchmark is not as formal. It is based on science that 
we have been acquiring over the past several years. As I 
indicated, we did get that science peer-reviewed. But it is a 
benchmark. It is not a water quality standard, and it is not a 
water quality criteria. So it is used to provide guidance to 
States, for example, in interpreting the narrative criteria 
that they have.
    Mr. Gibbs. You referenced the science advisory board, SAB, 
panel. Apparently raised a number of issues that warranted 
further study, which certainly suggested that science is 
anything but conclusive, with respect to conductivity. How do 
you explain the response to the SAB's concerns?
    Ms. Stoner. We are revising the guidance, the guidance that 
was issued April of last year, we are revising it. It will 
reflect the recommendations from the SAB in full when we finish 
that guidance document.
    Mr. Gibbs. Did they ever respond to the National Mining 
Association's report?
    Ms. Stoner. They examined the National Mining Association's 
report, which--my understanding--was not peer-reviewed. But 
they did evaluate that in their final report. The office of 
research and development did, looked at the National Mining 
Association input.
    Mr. Gibbs. I mean I don't think they responded to them, 
though. I don't believe they did.
    Ms. Stoner. If there was correspondence with them, I am not 
aware of it. But I do know that they received the report, I 
actually saw that they had received it and were considering it.
    Mr. Gibbs. What is the cost of replacing coal provided by 
these mines with other energy resources? Are these other energy 
resources currently available domestically through currently 
permitted operations? If not, what countries would we have to 
trade with to obtain these energy resources? And what are the 
national security implications of relying on energy resources 
from these countries, since we are not permitting coal 
operations?
    Ms. Stoner. Well, it is my understanding that we have 
excess stockpiles of coal in this country at this point. I am 
not an expert in the mix of energy sources. My work relates to 
protecting water quality and human health and the environment.
    And so, the mix of energy sources, that is actually 
something that others, including the Department of Energy, 
would work on with the U.S. Congress.
    Mr. Gibbs. So it is not in consideration, then. OK.
    What EPA contracted with Morgan Worldwide to assess the 
alternative configurations for the Spruce No. 1 mine in August 
2010. A year after that, they asked the Corps to modify, 
suspend, or revoke the permit, 4 months after they issued a 
proposed determination. Why did EPA contract with, you know, 
Morgan Worldwide and offer alternatives? But I don't believe 
Arch-Coal was notified of those alternatives.
    Ms. Stoner. You are correct that we contracted to get 
information. That report was delivered last fall, I believe, in 
the hope of having successful discussions with Arch.
    Mr. Gibbs. But you revoked the permit first, didn't you?
    Ms. Stoner. No, sir. We already had that information. We 
had been successful in working with Arch in other cases, 
including Coal-Mac, and we were preparing for a negotiation 
with them, in the hope of finding a way to have the permit be 
issued to protect water quality----
    Mr. Gibbs. I believe you didn't disclose that to Arch until 
afterwards, so--after the revocation was issued.
    Ms. Stoner. They were informed of a number of different 
approaches that could be used to meet the requirements of the 
Clean Water Act. They did not express an interest in having 
further negotiations.
    Mr. Gibbs. But is it true to say that they weren't formally 
informed before the revocation was issued?
    Ms. Stoner. I am talking about discussion of alternatives 
in general. We had discussions, including region three had 
extensive discussions with Arch about sequencing as a means of 
meeting the requirements of the Clean Water Act. Arch did not 
express an interest in further modifications to the permit at 
the time that U.S. EPA headquarters met with them.
    Mr. Gibbs. Back in January, I believe this year, the 
President issued some executive order for regulatory 
streamlining. Enhanced coordination, how does that mesh with 
that?
    Ms. Stoner. It totally meshes with it. What we are trying 
to do is get agencies to work together expeditiously to make 
determinations and provide the clarity that industry wants on 
what is necessary----
    Mr. Gibbs. I think there has also been additional delays.
    Ms. Stoner. It is not intended to result in additional 
delays. And we have actually issued more than 50 permits. We 
have not completed that work. You are absolutely correct about 
that. But we are working hard at it. It does require some time, 
sometimes, to find a solution, an innovative solution that will 
work for everyone. But we are trying to do that. Sometimes it 
takes time, but it does produce results that we are proud of 
when we are able to protect water quality and public health and 
have coal mining continue.
    Mr. Gibbs. This is my last question. Would you agree that 
revoking a permit after they went through a 10-year 
environmental impact study, revoking it 3 years after the fact, 
just because you claim there is new science, what precedent or 
what signal does that send out to all sectors in our economy?
    I am really concerned about this issue. Who is going to put 
capital together? Who is going to risk capital if they have to 
get permits, knowing that they are not in violation of their 
permit but they can still lose their permit, because of a 
policy decision in Washington, I mean, doesn't that concern the 
EPA, what that is going to do to stifle economic growth and 
jobs?
    Ms. Stoner. EPA is very concerned about growth and jobs, as 
well as protection of human health and the environment. We have 
expressed concerns about that particular permit for a very long 
time. Most of the delay to which you refer has to do with 
litigation, delay associated with litigation.
    But we worked very hard to try to find a solution that 
would have allowed that permit to be issued. We would like to 
still see a solution that would allow permitting to go forward 
for any mine in West Virginia that can meet the requirements of 
the Clean Water Act.
    Mr. Gibbs. Well, we need to move that on. We agree with 
you, and I would like to see that be handled, you know, as fast 
as possible.
    Representative Cravaack, do you have any more questions?
    Mr. Cravaack. Thank you, Mr. Chairman. Ms. Stoner, I am 
trying to get to the basis of understanding why you produced a 
guidance. Why produce a guidance? Why not go through a formal 
rulemaking?
    Ms. Stoner. Is this a question about the waters of the 
U.S., or about the mountaintop mining guidance?
    Mr. Cravaack. Any. Any guidance coming out of the EPA.
    Ms. Stoner. OK.
    Mr. Cravaack. Why would you produce guidance, versus a 
rulemaking process?
    And in the guidance you just produced in 2010, you said 
there was public input to the guidance?
    Ms. Stoner. If you are talking about the mountaintop--I am 
sorry, you are asking me about two different kinds of 
guidances, so----
    Mr. Cravaack. All right. No, I am talking about any 
guidance coming out of----
    Ms. Stoner. Any guidance. Well, there is some guidance--
again, guidance is not a term that means something specific. So 
it can be correspondence, it could be white papers, it could be 
all kinds of things. And part of what we do is provide 
information out to our regions, out to States, out to the 
regulated entities that indicate how we are interpreting the 
law.
    The law is binding, the guidance is not binding, but we put 
that out, and we figure out what is it that is the best means 
of putting out that information. Sometimes it is on the 
Internet, you know, on our home page. It could be on all kinds 
of different--and then we use all these other methods to gather 
information.
    So we have been talking about advisory committees, 
stakeholder meetings. We have regular dialogue with members of 
the public from various different sectors to get input. So it 
is not a static process, it is a process of accommodation and 
working----
    Mr. Cravaack. OK.
    Ms. Stoner [continuing]. To try to get information out to 
do our job.
    Mr. Cravaack. I understand. OK, so let's specifically go 
with the mountaintop. OK. Was there public input prior to that, 
to your guidance there?
    Ms. Stoner. It was put out, and public input was solicited 
at the time that it was put out. That is correct.
    Mr. Cravaack. So after it was put out.
    Ms. Stoner. Yes, sir.
    Mr. Cravaack. The guidance was already put out, and then 
there was public input after that. And how long was the public 
input allotted? How long?
    Ms. Stoner. I believe it was 6 months. I think it was----
    Mr. Cravaack. OK.
    Ms. Stoner. No, actually, it was through the end of the 
calendar year, I think. So that is from April 1 to the end of 
the----
    Mr. Cravaack. All right. For the record, then, can this 
Congress be--can Congress be unequivocally assured that no 
agency, entity, or individual will be prosecuted, denied, or 
withdraw permitting, or made or enticed to comply with any 
guidance coming out of the EPA?
    Ms. Stoner. Only the statutes and regulations are the basis 
for those actions.
    Mr. Cravaack. OK--I just want a yes or no.
    Ms. Stoner. Not based on the guidance, that is right. 
Statutes and regulations guide those----
    Mr. Cravaack. So, just to be clear, for the record, the EPA 
will not prosecute, deny, or withdraw any permitting, or made 
to entice any agency, entity, or individual to comply with any 
guidance out of--coming out of the EPA.
    Ms. Stoner. Only the statutes and the regulations. That is 
correct.
    Mr. Cravaack. OK. Thank you very much, sir, and I yield 
back.
    Mr. Gibbs. Representative Lankford?
    Mr. Lankford. Let me finish up on that comment for 
clarification.
    So, someone can ignore a guidance, and they will be fine? 
If a guidance comes out and they get a record, they are in the 
process of doing surface mining, whatever it may be, they get a 
guidance document, here is a letter from EPA, ``Here is our 
guidance,'' they can ignore that, that is fine?
    Ms. Stoner. The guidance is our interpretation of the 
statutes and the regulations. The statutes and regulations are 
binding, the guidance is not.
    Mr. Lankford. OK.
    Ms. Stoner. So it reflects our interpretation of those. And 
guidances always indicate that in site-specific circumstances, 
something different may apply, but, ``Here is our general 
interpretation of the statutes and regulations, those are the 
legal requirements.''
    Mr. Lankford. OK. So they can ignore--they can say, 
``That's nice, I can ignore that,'' and just continue to move 
on because that is not binding, that is an opinion? Is there--
is guidance typically the first step towards rulemaking in 
saying, ``Here it comes, here is the guidance, this may become 
rule?''
    Ms. Stoner. Sometimes. Again, guidance can be used for many 
different purposes. But the statute--the regulations are what 
people need to follow, so they need to make sure----
    Mr. Lankford. Right.
    Ms. Stoner [continuing]. That they are doing that.
    Mr. Lankford. I am processing through just our conversation 
today and the multiple times that I appreciate that you have 
come back and said, ``We are not going after coal. We are not 
trying to shut down coal.'' The difficulty for me is processing 
through that from what I see on the ground.
    Currently, there is a push to make coal fly ash a hazardous 
waste, which will make disposal of that very expensive. It goes 
into a lot of products: in cement, it goes into roofing 
materials. A lot of things that are out there, that will 
dramatically increase the cost of how to handle coal on that 
side of it.
    Mining permits are slow, or we now have one pulled. 
Retrofit, costs are going up dramatically, because this 
requirement for best technology, so anyone can invent a new 
technology, no matter how expensive it is, and say, ``Now this 
is the new best technology,'' and there is a push to now try to 
retrofit a plant dealing with that.
    Regional haze, all of the changes that are happening with 
that currently, and everyone is pointing directly at coal and 
saying, ``This is the culprit on it.'' 316(b) intake, it is 
shifting--the cooling towers are having to shift around, 
another dramatic increase in cost.
    This administration is pushing to remove loans from rural 
electric companies that want to be able to do coal plants, and 
saying they can do it if they want to do wind, but they can't 
do it if they want to do coal.
    We are talking about carbon capture.
    Which one of these things would tell any investor coal is a 
good idea, if you want to invest and do something, do it in 
coal? There are eight things I just listed that are very 
specific that are--all seem to be going after coal. While I am 
hearing us say, ``We are not going after coal,'' everything 
that seems to be coming out of EPA and this administration is, 
``Oh, but yes, we are. We are just saying we are not.''
    And again, no one can evaluate motives. I am just telling 
you what I am seeing on this side of it. So that is the 
struggle that we are--let me ask you a specific question. I 
know that is not something you can really respond to on that.
    How long should a permit take? What is the target length of 
time, if they are going to request a permit from EPA? I know 
there is a given time. How long should it take?
    Ms. Stoner. It really depends on what the permit is for. So 
the bigger the impacts, the more likely a significant 
degradation, as with the more than 6 miles of streams that were 
proposed to be filled with Spruce Mine. It does take longer 
with a bigger, more complicated, more significant matter.
    As I indicated, most actions, most 404 actions, go through 
the general permitting process----
    Mr. Lankford. Which takes how long?
    Ms. Stoner. Less than 90 days.
    Mr. Lankford. OK.
    Ms. Stoner. That is--so it is designed to streamline those 
things that can go more quickly, and to spend more time on the 
more significant actions with more likely impacts on public 
health and the environment.
    Mr. Lankford. OK. I know you know this, we have talked 
about it before. I am tracking very carefully, because I am 
watching what is happening to coal, and now seeing companies 
that are trying to shift to natural gas, but also seeing on the 
horizon all of the studies that are now out there on fracking, 
knowing that the price of natural gas is dropping dramatically 
because of the supply we are able to pull out because of the 
fracking that is going on.
    It is the great unknown out there. Again, we are back to 
power plants. Can't really plan, don't really know what to 
predict, because they don't know what EPA--if they are going to 
do to natural gas what they are doing to coal, then who knows 
what to predict on that one?
    Who is better for regulating fracking, a State or the EPA?
    Ms. Stoner. I don't know that I can answer that right now. 
You know, we have studies going on on fracking. There are----
    Mr. Lankford. Do we have a date on that yet, when that is 
going to be complete?
    Ms. Stoner. I believe it is still more than a year out, 
when we expect to have that study done from the office of 
research and development on fracking.
    You know, in general, the programs are run by the States, 
and it is our preference, in general, to have State-run 
programs for the underground injection control, for the Clean 
Water Act permitting, and so forth. And so that is generally 
our preference.
    We are trying to figure out how well things are being done 
now on fracking. It is, you know, as you indicated, new, and a 
lot is still to be learned about it, outside of Oklahoma----
    Mr. Lankford. Well, yes. Fracking is not new.
    Ms. Stoner. Right.
    Mr. Lankford. I mean since 1949 it has been going on in our 
State.
    Ms. Stoner. But----
    Mr. Lankford. This is new to some areas.
    Ms. Stoner. Right.
    Mr. Lankford. It is not new to other areas.
    Ms. Stoner. No, I understand your point. And the 
technologies that are being used now are new.
    Mr. Lankford. Correct.
    Ms. Stoner. And we are trying to ensure that we are 
protecting public health. There is a lot of concern about that. 
And one of the things that we are doing is looking at where 
fracking has occurred already, to figure out what is the best 
way to do that.
    But our general answer would be we like to have States run 
the programs, not EPA. But I can't say that there isn't 
anything that EPA would need to do to ensure that public health 
is protected, with respect to fracking. There may be things 
that we need to do, as well.
    Mr. Lankford. Well, thank you. I appreciate that. I yield 
back.
    Mr. Gibbs. We are going to close this down, but just kind 
of a little bit of follow-up.
    Last week we had Ms. Teresa Marks, who is the director of 
the State of Arkansas Department of Environmental Quality, and 
she talked about this issue with the guidance. This is a little 
bit disturbing, because you put out guidance and you say it is 
not binding. But then in some instances it could be in conflict 
with State law. And she testified that they are in a Catch-22: 
they are going to violate State law or they are going to 
violate the guidance, which sometimes becomes law by de facto 
standards.
    And you talk about we need to put out--you know, you are 
working to increase the certainty versus uncertainty. And it 
seems to me there is a huge issue there where you are creating 
massive uncertainty. Can you respond to that?
    Ms. Stoner. The guidance is not binding. So it actually, I 
don't think, could put States in a bind in the way that you are 
talking about, where they can't comply with the guidance and 
with something else, because the guidance is not binding.
    Mr. Gibbs. I think what is happening in the practice, you 
know, they don't know what to do. And then, of course, in the 
private sector a person that is in business, then they really 
get confused, because they don't know what is going to come 
after them, litigation. And so it is creating a huge problem.
    And I think that we had two State directors of State EPAs 
testify to that fact. So I think you need to be--recognize that 
fact, that you are creating more uncertainty, and it is just 
bad public policy, I think, and you know, we sent a letter I 
had 172 co-sponsors on that, instead of putting out all these 
guidances and interim guidances, you need to move forward under 
the law with the regulatory process and have the public 
hearings and set the rules under that framework that is 
established by law. Because you are kind of circumventing all 
that, and it is becoming de facto rules and creating problems 
and problems to economic growth and jobs.
    Just in closing, I need to say that we are really 
concerned. Administrator Jackson was before the Ag committee a 
few weeks ago, and both sides of the aisle had massive concerns 
about what this Agency is doing. And when I see State agencies, 
the EPAs, having the same concerns, there is a problem here. 
And it needs to be addressed, because we are not putting out 
the certainty and the confidence for the private sector to grow 
their businesses and create jobs. And the EPA is a massive 
hurdle blocking that; those investments. And I think you need 
to be aware of that.
    So, this will conclude the second hearing. The meeting is 
adjourned.
    [Whereupon, at 1:17 p.m., the subcommittee was adjourned.]
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