Western Officials Fear New EPA Rules Could Cripple Mining Operations

There is growing fear among officials across the West that in the waning days of the Obama administration his Environmental Protection Agency may enact regulations that could cost the hard rock mining industry billions of dollars, jeopardizing jobs and entire communities.

Earlier this year, the EPA, as is its wont, settled a lawsuit from a passel of self-styled environmental groups by agreeing to write further regulations requiring additional financial assurances — in the form of expensive surety bonds — that mining sites will be adequately cleaned up and reclaimed at the end of operations.

The court gave the EPA until Dec. 1 to write these new rules.

Lest we forget, it was the geniuses at the EPA who bungled the reclamation of the  Gold King mine near Silverton, Colo., a year ago, dumping millions of gallons of toxic-metal-laced pollutants into the Animas River, turning it a bright yellow.

The Western Governors’ Association and the chairs of two key U.S. House committees have sent letters to Gina McCarthy, administrator of the EPA, asking for information about what the agency plans to do and pointing out that the states and various federal agencies already have reclamation bonding requirements in place and that any additional requirements could be duplicative and costly to the industry.

The letter from Energy and Commerce Committee Chairman Fred Upton, R-Mich., and Natural Resources Committee Chairman Rob Bishop, R-Utah, stressed their concerns that the EPA is not analyzing existing federal and state reclamation requirements.

“If the Agency fails to reduce the amount of the CERCLA (Comprehensive Environmental Response, Compensation and Liability Act, otherwise dubbed the Superfund Law) financial assurance obligation to account for these programs, it will result in the unnecessary and duplicative imposition of many billions of dollars of financial assurance requirements on the mining industry.”

The governors’ letter, signed by Wyoming’s Matthew Mead and Montana’s Steve Bullock, asks for an explanation as to why “existing state programs are insufficient to address the concerns …”

A spokesman for Nevada Rep. Cresent Hardy commented, “This administration has an unfortunate track record of issuing onerous regulations that are especially painful for states like Nevada that have large mining sectors. As an active member of the Natural Resources Committee, Congressman Hardy will continue to work with the chairman to hold the EPA accountable and prevent job-killing regulations from doing further damage to our state economy.”

Nevada Mining Association President Dana Bennett has sent a letter to EPA officials saying that the new regulations would have significant economic impact on all miners in the state, “but it will be Nevada’s small miners, who have limited financial and human resources, that will be hit the hardest.”

She also said the proposed rules duplicate currently effective state and federal programs.

Bennett wrote that the EPA has failed to establish a need for further federal rulemaking and has not provided those who will be affected with necessary scientific or economic analysis, noting there has been no cost-benefit analysis and that the costs “appear to vastly outweigh any potential health or environmental benefits.”

She also argued that current mines should be exempted from any new programs because it would be fundamentally unfair to add unanticipated regulatory costs that would “threaten the economic viability of the mines and associated jobs and community benefits.”

The National Mining Association has reported that “a growing number of organizations – from state governments to surety underwriters — are expressing concern that EPA is about to impose economically harmful and unnecessary bonding requirements on mineral mining companies.”

In mid-June the House Natural Resources Committee passed a package of 19 mining bills to address funding, technical and legal impediments to mine cleanup efforts. Of course, that will not deter the EPA.

Bishop said at the time, “If we’ve learned anything from the EPA’s Gold King mine disaster, it’s that the federal government lacks the expertise, resources and capacity to reclaim abandoned mines. … This package provides much-needed liability protections and creative solutions to develop the technical talent and funding resources to ensure cleanup is done safely and without further delay.”

According to the Nevada Department of Employment, Training and Rehabilitation, mining accounts for a large majority of the jobs in Esmeralda, Eureka and Lander counties and a large percentage in several other rural counties.

Excessive regulatory costs added to the already uncertain fortunes of mining companies in a volatile market could devastate some communities that rely on gold, silver, copper and, perhaps someday, lithium production.

Thomas Mitchell is a longtime Nevada newspaper columnist. You may email him at thomasmnv@yahoo.com. He also blogs at http://4thst8.wordpress.com/.