Court case: Coal mine gets permit. Can EPA take it back again?

Arch Coal and the EPA faced off in federal appeals court over agency's revoked permit for West Virginia coal mine. The case has several industries worried that the EPA could take back their permits retroactively under the Clean Water Act.

If a mine has received a federal permit to expand its current operations, can the US Environmental Protection Agency (EPA) revoke the permit retroactively to protect the nation’s water?

That was the issue at stake in a Washington, D.C., courtroom hearing held Thursday over Arch Coal’s 15-year battle to expand its mining operations in West Virginia. The case involves the EPA’s authority under the Clean Water Act and is closely watched by energy companies and other industries worried that EPA could also pull their environmental permits after the fact. Final answers aren’t expected anytime soon in a case that could go to the Supreme Court.

“Allowing EPA perpetual and unrestricted license to modify a permit after its issuance – even when the agency authorized to modify the permit has concluded there are no grounds to justify doing so – would destroy the certainty that the permit is intended to provide and upset Congress’s allocation of regulatory authority among the Corps, the States and EPA,” Arch Coal states in documents prepared for Thursday’s court hearing. “Congress did not give EPA such unbridled power.”

Explaining the coal company’s position in the US Court of Appeals March 14, Arch Coal attorney Robert Rolfe insisted that although the EPA has a recognized role in the permitting process, “that role has to be exercised before the permit is issued,” not retroactively.

Judge Brett Kavanaugh commented that while the Clean Water Act appears unclear on whether Congress intended to give the EPA the right to revoke permits issued by the Army Corps of Engineers, “What Congress may have thought is EPA may have been more sensitive to environmental issues, so let’s make them a backstop.” Judge Kavanaugh pointed out that because the corps has the authority to modify or withdraw a permit at any time, “I don't see how anyone could have a permit and assume it is going to stay in place.”

Faced with industry fears that all federal permits could be at risk, the EPA argues that it has only withdrawn a permit retroactively in three instances – 1981 in Florida, 1992 in Virginia, and in the current West Virginia coal case.

“EPA does not undertake such an action lightly,” wrote EPA Assistant Administrator Peter Silva when the agency withdrew Arch Coal’s permit in 2011. He added that EPA’s decision “does not threaten the tens of thousands of permits and authorizations that are issued by the U.S. Corps of Engineers every year.”

In 2007, the corps issued a permit to allow the practice of mountaintop removal at Arch Coal’s proposed Mingo Logan Coal Co. Spruce No. 1 mine. At the time, the EPA expressed reservations but didn’t veto the permit, which the corps issued that year. Then in 2010, citing “new information,” the EPA ruled that it would withdraw the permit in order to prevent mountaintop waste rock disposal in valleys where 6.6 miles of West Virginia streams would be buried in rubble.

In its final determination in 2011, EPA stated that withdrawing the permit was necessary to prevent “adverse chemical, physical, and biological effects.”

Arch Coal sued and won the first round in court. US District Judge Amy Berman Jackson ruled that the federal Clean Water Act “does not give EPA the power to render a permit invalid once it has been issued by the Corps.” She acknowledged that the law contains “awkwardly written and extremely unclear” wording. But she concluded that “neither the statute nor the Memorandum of Agreement between the EPA and the Corps makes any provision for a post-permit veto.” EPA’s appeal against this ruling was the issue in Thursday’s court hearing.

The EPA’s move to withdraw the permit has alarmed a range of industry groups. The U.S. Chamber warns that “billions of dollars in economic activity could be adversely affected if EPA’s unprecedented grab for veto authority goes unchecked.” The Chamber’s position has been supported by a score of industry organizations ranging from the Alabama Mining Association and the Montana Coal Council to the National Association of Manufacturers and the Wyoming Mining Association.

“The legislative history confirms that section 404(c) does not authorize EPA to act post-permit," Arch Coal argues in court papers prepared for the March 14 hearing. "The chief sponsor of the legislation explained that EPA would act under section 404(c) ‘prior to the issuance of any permit,’ and nothing in the legislative history indicates that EPA could act after permit issuance.”

The EPA view is that Section 404(c) of the Clean Water Act allows it to act whenever it determines there’s a problem, even retroactively. The EPA maintains that it has the legal authority under the Clean Water Act “to prohibit, restrict, or deny the discharge of dredged or fill material at defined sites in waters of the United States (including wetlands) whenever it determines, after notice and opportunity for public hearing, that use of such sites for disposal would have an unacceptable adverse impact on one or more of various resources, including fisheries, wildlife, municipal water supplies, or recreational areas.”

The agency’s rare vetoes of permits have been based on “extensive scientific study,” the EPA says. It notes that the Arch Coal permit withdrawal followed “a major public hearing in West Virginia and review of more than 50,000 public comments.”

In papers prepared for this week’s appeal hearing, the EPA asked the court to rule “that EPA can withdraw specifications of disposal sites after a permit issues.” EPA noted that “in 40 years, the agency has issued only 13 final determinations under section 404(c), and only three of those actions withdrew specifications authorized under active permits.”