Wednesday, August 08, 2012
The future of coal
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A confluence of events over the past few years has reduced coal consumption in the United States to its lowest level in decades.
A recent string of court victories, however, has provided a lifeline to surface mining operations (mountaintop removal) in Appalachia.
For years, about half of the electricity generated in the U.S. came from coal combustion. That number has dropped, somewhat staggeringly, to 44 percent and then to 36 percent over the past two years. The primary reason for the drop in domestic coal use is the newfound abundance of cheaper and cleaner natural gas, as well as the maturation of renewable energy sources and efforts to reduce greenhouse gas emissions.
Industry also argues that new regulations have contributed to the decreased use of coal in this country — air quality standards, increased enforcement of mine safety standards and continuing proposals to treat fly ash as a hazardous substance.
But it is the Environmental Protection Agency's attempt to utilize the Clean Water Act to limit the disposal of displaced earth that directly targets surface mining operations prevalent in Appalachia.
EPA purports to base its increased Clean Water Act enforcement on reports showing increased contamination at sites downstream of mountaintop removal operations.
The coal industry has pushed back, challenging EPA's authority in court. In three decisions over the past nine months, the D.C. District Court has sided with industry.
In the first decision, the court found that the EPA and the Army Corps of Engineers could not, by agreement, lay out a procedure whereby EPA determines which discharge permit applications should be subject to enhanced environmental review. The second decision focused on a particular permit that the Corps had issued to the Mingo Logan Coal Co.; the court found that EPA lacked the authority to veto the permit once the Corps had issued it. And the final decision, rendered on July 31, held that EPA's attempt to impose a "conductivity" water quality standard could not be done by "guidance" papers.
A bit of background is needed to understand the impact of the recent court decisions. Under the Clean Water Act, EPA has authority over the discharge of "pollutants," while the Army Corps has authority over the discharge of "dredge" or "fill" material. This makes sense — EPA is in charge of pollution-causing discharges, and the Corps is in charge of earth-moving discharges. The problem for mountaintop removal is that, while the displaced earth is clearly fill material under the Clean Water Act's definition, it also contains pollutants that reportedly lead to downstream contamination when the material is pushed off the mountain edges.
The U.S. Supreme Court has decided that the Army Corps is the primary permitting authority for the disposal of earth from surface mining operations. But EPA still has a role to play. First, EPA shares responsibility with the states to establish water quality standards, the basis for permitting requirements. Moreover, EPA has the authority to prevent the Corps from issuing a discharge permit when EPA determines that it will have an adverse effect on municipal water supplies or wildlife or recreational areas. Importantly, the recent decisions do not undermine these aspects of EPA authority.
What EPA cannot do, according to the recent decisions, is use something less than formal rule-making to set water quality standards or decide what permit applications are subject to enhanced environmental review, or veto a section 404 permit for earth-moving discharge after it has been issued by the Corps.
So, is Appalachian surface mining out of the woods after these recent decisions? No. First, the appeals process needs to run its course. Secondly, even if the District Court decisions survive, undoubtedly a win for Mingo Logan, which already has its permit in hand, it does nothing to undermine EPA's authority to stop future permits before they are issued. Moreover, nothing in the decisions prevents EPA from enacting regulations that codify both the conductivity water quality standard and the enhanced environmental review agreement between EPA and the Corps. Finally, and most importantly, the economic realities of natural gas abundance and renewable technologies, as well as the scientific realities of climate change, will determine coal's (and surface mining's) future far more than anything EPA does.
Whether EPA aggressively intervenes in section 404 permit issuance, or engages in rule-making to codify the conductivity water quality standard or the enhanced environmental review process for discharges into environmentally susceptible Appalachian streams will likely depend on the discretion of the White House occupant. But the truth is that there are forces far more powerful than EPA regulations driving the future of coal in Appalachia.
