&EPA
United States
Environmental Protection
Agency
Office of Water
(4303)
EPA821-B-01-013
December 2001
Economic and
Environmental Impact
Assessment of Final
Effluent Limitations
Guidelines and
Standards for the
Coal Mining Industry:
Remining and Western
Alkaline Subcategories
-------
Economic and Environmental Impact Assessment
of Final Effluent Limitations Guidelines and Standards
for the Coal Mining Industry:
Remining and Western Alkaline Subcategories
Engineering and Analysis Division
Office of Science and Technology
U.S. Environmental Protection Agency
Washington, DC 20460
-------
ACKNOWLEDGMENTS AND DISCLAIMER
This document was prepared by the Office of Water staff The following contractors provided
assistance and suppoit in peifonning the underlyrng analysis supporting the conclusiow detailed in this
document
Abt Associates, Inc.
DynCo ip I&ET
Eastern Research Group, Inc.
The Western Coal Mining Work Group
The Office of Water has reviewed and approved this document for publication. The Office of Science
and Technology directed, managed, and reviewed the work of the contractois in preparing this
document. Neither the United States Government nor any of its employees, contractors,
subcontractors, or their employees makes any warranty, expressed or implied, or assumes any legal
liability or responsibility for any third party’s we of or the results of such use of any infomiation,
apparatus, product, or process discussed in this document, or represents that its use by such party
would not infringe on privately owned rights.
-------
Table of Contents
Executive Summary . ES-I
introduction • ES-I
Coal Renting Subcategoiy ES-I
Western Alkaline Coal Mining Subcategozy E &2
Industry Compliance Costs ES-3
Coal Remin ig Subcategory ES-3
Western Alkaline Coal Mining Subcategory ES-4
industry Impacts ES-6
Economic Achievability ES-7
lmpactson small Firms ES-8
Impacts on New Sources ES-9
Additional Economic Impacts ES- b
Costs to NPDES Permitting Authorities ES- b
Community Impacts ES- 10
Foreign Trade impacts ES-Il
Environmental Impacts and Benefits ES-I 1
Coal Remining Subcategoiy ES-Il
Western Alkaline Coal Mining Subcategory ES-13
Social Costs and Benefits ES-is
Chapter 1: Introduction 1-I
1.0 Overview and Definitions 1- 1
1.1 CoalReminingSubcatego’y 1-3
1.1.1 Background 1-3
1.12 SummaryoftheNewSubcategofy 1-4
1.2 Western Alkaline Coal Mining Subcategory I-S
1.2.1 Background 1-5
1.2.2 Summary of the New Subcategoiy 1-6
1
-------
1.3 Structure of the Report . 1-8
Chapter 2: Data Sources . 2-1
2.0 Introduction 2-1
2.1 General Industry Sources 2-1
2.1.1 DOEIBIA Coal Data (Form 7A) 2-1
2.1.2 Keystone Coal Industiy Manual 2-2
2.1.3 Census Data 2-2
2.1.4 Financial Data 2-2
2.2 Sources for Coal Remining Subcategoiy 2-3
2.2.1 AMLIS Database 2-3
2.2.2 NALIS Database 2-4
2.2.3 EPA Coal Remining Database 2-5
2.2.4 Interstate Mining Compact Commission Solicitation 2-5
2.2.5 Total Maximum Daily Load Tracking System 2-6
2.2.6 EPA Region III GIS Database 2-7
2.2.7 Pennsylvania’s 112 Remining Site Study 2-7
2.3 Sources for Western Alkaline Coal Mining Subcategoiy 2-7
2.3.1 Profile of Affected Coal Mining Operations 2-8
2.3.2 Model Mine Analysis 2-8
2.3.3 Information on Environmental Impacts 2-9
Chapter 3: Industry Profile and Economic Baseline 3-1
3.0 Introduction 3-1
3.1 Overview of the Coal Industiy 3-1
3.1.1 Coal Remining 3-3
3.1.2 Western Alkaline Coal Mining 3-4
3.2 Current Regulatory Requirements 3-5
3.2.1 Current Effluent Guidelines 3-5
3.2.2 SMCRA 3-6
3.2.3 The Rahall Amendment 3-7
11
-------
3.2.4 State Rernining Permit Programs
3.3 Characterizing the Economic Baseline
3.3.1 CoalRemining
3.3.2 Western Alkaline Coal Mining
Industry Compliance Costs
Introduction
Coal Remining
4.1.1 Methodology
4.1.2 Monitoring Costs
4.1.3 Pollution Abatement Plan Costs
4.1.4 Total Annual Compliance Costs for the Coal Returning Subcategoiy
4.2 Western Alkaline Coal Mining
4.2.1 Methodology
4.2.2 Watershed Modeling Costs
4.2.3 Reduced Sediment Control Costs
4.2.4 Savings Associated with Earlier Bond Release
4.2.5 Total Compliance Costs for the Western Alkaline Coal Mining
Subcategory
4.3 Summary of Compliance Costs
Chapter 5:
5.0
5.1
Industry Impacts 5-1
Introduction 51
Impacts of the Coal Remining Subcategory 5- 1
5.1.1 Methodology 5-1
5.1.2 Results 5-3
5.1.3 Impacts on Small Firms 5-5
5.2 Impacts of the Western Alkaline Coal Mining Subcategoiy 5-7
5.2.1 Methodology 5-7
5.2.2 Results 57
5.2.3 Impacts on Small Finns 5-10
01
Chapter 4:
4.0
4.1
3-8
3-9
3-9
3-12
4-I
4-I
4-2
4-2
4-3
4-6
4-7
4-7
4-7
4-8
4-8
4-16
4-22
4-22
-------
5.2.4 Impacts on New Sources . 5-10
Chapter 6: Additional Economic Impacts . 6-1
6.0 Introduction 6-1
6.1 Costs to the NPDES Permitting Authority 6-I
6.2 Community Impacts 6-2
6.2.1 Regional Competitiveness 6-2
6.2.2 Regional Employment 6-4
6.3 Foreign Trade Impacts 6 -5
Chapter 7: Cost-Effectiveness 7-1
Chapter 8: Environmental Impacts and Benefits 8-1
8.0 Introduction 8-1
8.1 Coal Remining Subcategory 8-1
8.1.1 EnvironmentallmpactsofAbandonedMineLands 8-1
8.1.2 Impacts of Rmiining on Environmental Quality 8-2
8.1.3 Methodology for Estimating Benefits 8-4
8.1.4 Results 8-5
8.2 Western Alkaline Coal Mining Subcategory 8-9
8.2.1 Environmental Impacts from West n Mining 8-9
8.2.2 Potential Benefits Categories 8-10
8.2.3 Methodology and Results 8-Il
Chapter 9: Social Costs and Benefits of the Proposed Rule 9-1
9.0 Introduction 9-1
9.1 Social Costs and Benefits of the Final Retnining Subcategory 9-1
9.2 Social Costs and Benefits of the Final Western Alkaline
Coal Mining Subcategory 9-3
iv
-------
References R-I
Appendix A: State Remining Programs A-i
A.I State Programs A-I
A.2 Summaiy of State Sampling Requirements A-4
Appendix B: AML Reclamation Program B-I
B. 1 AML Reclamation Program and Fund B-i
8.2 AMLIS 8-2
V
-------
List of Tables
Table ES- 1: Annual Compliance Costs for the Final Coal Remining Subcategoiy. ES-4
Table ES-2: Annual Costs and Cost Savings for the Final Western Alkaline Coal
Mining Subcategoiy ES4
Table ES-3: Estimated Benefits for the Final Coal Renting Subcategoiy ES-13
Table ES-4: Estimated Benefits for the Final Western Alkaline Coal Mining Subcategozy ES-l5
Table ES-5: Annual Social Casts and Benefits for the Final Coal Remining
Subcategoty ($1998) ES-16
Table ES-6: Annual Social Coa Cost Savings and Benefits for the Final Western
Alkaline Coal Mining Subcategoiy Rule ($1998) 6-17
Table 3-1: Potential Ranining Opezations by State 3-10
Table 3-2: Estimated Remining Operations Permitted Annually 3-11
Table 3-3: Annual Estimates of Affected Reinining Sites Used in the Economic and
Environmental Impact Analysis 3-12
Table 4-I: Estimated Increase in Annual Monitoring Costs: Low Estimate 4-4
Table 4-2: Estimated Increase in Annual Monitoring Costs: High Estimate 4 -5
Table 4-3: Annual Costs for the Coal Rernining Subcategoiy 4-7
Table 4-4: Model Mine Reclamation Sediment Control Costs and Present Value of Sediment
Control Savings per Acre Reclaimed Current Effluent Guideline versus
Proposed Subcategory (1998 dollars) 4-10
Table 4-5: Estimated Subcategoiy Sediment Control Cost Savings 4-14
Table 4-6: Estimated Savings from Early Phase 2 Bond Release 4-20
Table 4-7: Annual Costs and Cost Savings for the Western Alkaline Coal Mining Subcategay 4-22
Table 4-8: Sumznazy of Estimated Annual Compliance Costs and Cost Savings 4-23
Table 5-I: Impact of Increased Annual Monitoring Costs Per Ton of Coal Mined 5-4
Table 5-2: Estimated Savings to Western Alkaline Suthce Mines per Ton Produced and as
Percent of Value or Production, Selected Mines 5-9
Table 8-I: Surnmaiy of Benefit Estimates for the Coal Remining Subcategosy 8-9
Table 8-2: Annual Land-Related Benefits from Western Alkaline Coal Mining Subcategory .. 8-15
vi
-------
Table 8-3: Total Monetized Benefits for the Western Alkaline Coal Mining Subcategory . 8-17
Table 9-I: Annual Social Costs and Benefits of the Final Coal Rernining Subcategory ($1998).. 9-2
Table 9-2: Assumptions, Exclusions & Uncertainties in Estimated Coal Remining
Subcategory Costs and Benefits 9-4
Table 9-3: Annual Social Costs/Savings and Benefits of the Final Western Ailcaline Coal Mining
Subcategoiy ($1998) 9-5
Table 9-4: Assumptions, Omissions & Unceitainties in Estimated Western Alkaline Coal
Mining Subcategory Costs and Benefits 9-6
Table A. 1: State Sampling Requirements: Rahall vs. Non-Rahall Sites A-5
VII
-------
Executive Summary
Introduction
EPA has finalized amendments to effluent limitations guidelines and standards for coal mining under the
Clean Water Act (40 CFR part 434). The fmal amendments add two new subcategories for coal mining,
the first applying to coal rernining operations and the second applying to reclamation activities at western
alkaline coal mines. This Economic and Environmental Impact Assessment (hereafter referred to as the
EA) presents an analysis of costs, benefits, economic impacts and environmental impacts attributed to
each of the additional subcategoiy rules.
Coal Remining Subca egory
Coal remining is the mining of surface mine lands, underground mine lands, and coal refuse piles on a site
where coal mining was previously conducted and where the site has been abandoned or the performance
bond has been forfeited. Prior to SMCRA, reclamation of mine lands was not a federal requirement.
Many coal mines were left in an abandoned state and continue to degrade the environment and pose
health and safety risks. The acid mine drainage that originates from these abandoned mine lands is
considered “pre-existing discharges.” Acid mine drainage from abandoned coal mines is a major
enviromnental problem in the Appalachian and mid-Continent Coal Regions of the eastern United States.
The Coal Remining Subcategoiy was added to provide a regulatory structure to encourage remining
activities, and in turn, reduce acid mine drainage and improve water quality. Remining is also expected to
reduce the risk of injury at abandoned sites by closing mine openings, removing highwalls and stabilizing
spoils.
EPA’s final amendments include BPT, BCT, BAT, and NSPS limitations that have an equivalent
technical basis for the Coal Reinming Subcategoiy. The final limitations have been established as a
combination of numeric and non-numeric standards. Specifically, BAT is defmed as impiementation of a
pollution abatement plan that incorporates best management practices designed to reduce pollutant levels
ES- 1
-------
of acidity, TSS, iron, and manganese, as well as a requirement that such pollutant levels arc not increased
over baseline conditions. This is essentially the level of treatment cuirently required under permits issued
in accordance with the Rahall Amendment to the Clean Water Act.
Western Alkaline Coal Mining Sub category
The previous effluent guidelines at 40 CFR Pait 434 subpart E for reclamation areas established numeric
effluent limits based on the use of sedimentation pond technology. Although sedimentation ponds are
proven to be effective at reducing sediment discharge, EPA believes that there are numerous non-water
quality impacts from their use in the arid west that need to be considered. Controlling sediment in areas
that naturally contain large amounts of sediment through the exclusive use of sedimentation ponds can
disturb the natural hydrologic balance, accelerate erosion, reduce groundwater recharge, reduce water
availability, and impact large areas of land for pond construction. EPA established this new subcategoiy
to address these impacts.
For the Western Alkaline Coal Mining Subcategozy, the final amendments established BPT, BAT, and
NSPS limitations as having an equivalent technical basis. The regulation requires the mine operator to
develop a site-specific sediment control plan for surface reclamation and non-process areas. The
sediment control plan must identi1 BMPs, and present design, construction, and maintenance
specifications and expected performance. Specifically, BPT must consist of BMP requirements projected
through modeling to maintain average annual sediment yield at or below pre-mined undisturbed conditions.
The rule requires that the coal mining operator develop and implement a sediment control plan to
demonstrate compliance. BAT and NSPS Standards will be equivalent to BPT. EPA did not establish
BCT limitations wider this rulemaking.
This executive summary reviews the major components of the EA, including: (1) estimates of industiy
compliance costs; (2) evaluation of the economic impacts to the coal mining industry, including impacts on
small finns and new sources; (3) analysis of additional economic impacts, including costs to NPDES
permitting authorities, community impacts, and impacts on foreign trade; (4) evaluation of environmental
impacts and benefits; and (5) a summary of the social costs and benefits attributed to the final nile.
ES-2
-------
Industry Compliance Costs
EPA analyzed the costs and cost savings to the coal mining industzy attributed to the final rule. These are
the changes in compliance costs associated with differences between current requirements and
requirements under the final subcategories. Except where noted, all costs are reported in 1998 dollars;
the present value of costs that are incurred in the future is calculated using a 7 percent discount rate;
annualized costs are developed using an annualization period of 10 years and a 7 percent discount rate.
Coal Remining Subcategory
EPA estimated economic baseline conditions for remining based on existing state and federal regulations
and current industiy practices. As economic baseline, EPA assumed the conditions that would exist if
remining under a Rahall permit, pursuant to section 301 (p), rather than comparing compliance with Part
434 regulations. EPA projects that states will permit 43 to 61 new remining sites each year under this
new subcategory (see Chapter 3). EPA projected costs for each remining site by calculating the cost of
added requirements beyond those currently required for Rahall permits. These include the cost of
increased monitoring requirements for determining baseline, the cost of potential increases in compliance
monitoring requirements, and the potential costs associated with developing and implementing the required
pollution abatement plan.
To assess the increased monitoring requirements of the rule, EPA evaluated current state requirements
for operations permitted under the Rahall provision and calculated the sample collection costs that exceed
the current state requirements. Under the final rule, EPA requires operators to conduct monthly sampling
for a period of one year to characterize the baseline pollutant levels for iron (total), and manganese (total),
and TSS. EPA has assumed monthly compliance monitoring for costing purposes. EPA estimates that
the total annual incremental monitoring costs are in the range of $133,500 to $193,500. Of this,
approximately 583,000 to $120,000 is associated with incremental baseline monitoring requirements and
approximately $50,500 to $73,500 results from incremental compliance monitoring during a five year
ranining period.
ES-3
-------
In addition to monitoring requirements remining operators must develop and iznpleanent a site-specific
pollution abatement plan for each remining site. in many cases, EPA believes that the requirements for
the pollution abatement plan ‘ vilJ be satisfied by an approved SMCRA plan. However, EPA recognizes
that some operators may be required to implement additional or incremental BMPs under the final rule
beyond what is included in a SMCRA-approved pollution abatement plan. EPA developed a general
estimate of the potential costs of additional BMPs based on review of existing reinining permits contained
in the EPA’s Coal Remining Database (U.S. EPA, I 999a), and on information provided in the Coal
Remining Best Management Practices Guidance Manual (U.S. EPA, 2000d). Total estimated costs
associated with potential additional BMP effort are between $199,500 and $565,000 per year.
The total estimated annual compliance costs associated with the final Coal Reniining Subcategory are
approximately $333,000 to $758,500 per year. Table ES-i summarizes the total incremental compliance
costs.
Table ES-I: Annual Compliance Costs for (be Final Coal Remlnlng
Subcategory
Monitoring Costs S133,500-$193,500
Additional BMP Effoit $199,500- $565,000
Total Compliance Costs $333,000 - $758,500
Western Alkaline Coal Mining Subcategory
EPA determined that 46 surf ce coal mines and 24 underground coal mines are likely to be in the scope
of the new subcategory. EPA believes that the rule will be at worst cost-neutral for the underground
opemtors. Although EPA believes that compliance with the final rule will result in operational savings for
many underground producers, EPA did not estimate the savings due to data limitations. Hence, only the
46 surface mines were included in the analyses of costs and benefits.
EPA expects that the sediment control plan will largely consist of matetials generated as part of the
SMCRA permit application. The requirement to use watershed modeling techniques is not inconsistent
ES-4
-------
with these materials. While the 0111cc of Surface Mining (OSM) does not specifically require rnodelin&
most coal mine operators already perform watershed modeling to support their SMCRA permit application
that is sufficient to meet EPA’s new effluent guideline subcategory requirements. However, some
incremental costs may occur for cases where this rule increases model complexity.
Information provided by OSM for proposed rulemaking indicates that a surface mine operator might incur
a one-time additional cost of up to $50,000 to meet the watershed modeling requirements. Although most
sites are not expected to incur any additional modeling costs (as supported by OSM comments on the
proposed rule), EPA conservatively assumed that all 46 existing surface operators would incur additional
costs of $50,000. The $50,000 estimate represents an annualized cost of $7,119 per mine, resulting in a
total annualized cost estimate of $327,000. These costs would be offset by reduced sediment control
costs associated with implementing the required sediment control plans, as well as savings resulting from
an expected reduclien in the reclamation bonding period.
EPA projects that reclamation costs at western alkaline surface coal mines will be lower with the required
BMP approach than with exclusive use of sedimentation ponds. Analyses provided by the Western Coal
Mining Work Group (WCMWG) calculated cost savings for three representative model coal mines
differentiated by geographic region: Desert Southwest (DSW), Intennountain (IM), and Northern Plains
(NP). EPA extrapolated from the WCMWG model mine analyses and industzy profile information to
estimate savings in sediment control costs. EPA projects that compliance with the final rule will result in
annual savings of $12.7 million in sediment control costs.
EPA also calculated cost savings that may result due to earlier Phase 2 bond release. The OSM
hydrology requirements to release performance bonds at Phase 2 at 30 CFR part 800.40(c)(1) requires
compliance with the existing effluent standard. The use of BMPs under the final rule for this subcategozy
is expected to allow earlier Phase 2 bond release, because less time will be needed to meet the hydrology
bond release requirements. According to information provided by the WCMWG, the BMP-based
approach would reduce the time it takes reclaimed lands to quali for Phase 2 bond release by about five
years. EPA used a number of simplifying assumptions to estimate the savings associated with earlier
Phase 2 bond release. The WCMWG industry profile provides information necessary to calculate
associated bond savings for 26 mines. The total estimated savings for these mines range from $197,000
ES-5
-------
to $289,000 when annualized over a five year permit peiiod. EPA assumed that the remaining 20 mines,
for which savings could not be calculated, would achieve similar savings ($7,200 to $10,600 per mine),
resuliing in total annualized savings of between $341,900 and $501,400.
The estimated net savings in compliance costs associated with this subcategory of the final nile,
considering additional modeling costs and the savings to mine opomlions in sediment contiol and bonding
costs, is estimated to be approximately $12.8 million, as shown in Table ES-2.
Table ES-2: Annual Costs and Cast Savings for the Final Western Alkaline
Coal Mining Subcategory
Incremental Modeling Costs $327,000
Sediment Control Costs (Savings) ($12,721,000)
Earlier Phase 2 Bond Release (Savings) ($341,900- $501,400)
Total Compliance Costs (Savings) ($12,735,900 - $12,895,400)
Industry Impacts
EPA is required to assess the economic achievabiity of effluent limitations guidelines and standards that
are based on the best available technology economically achievable (BAI). To assess the economic
achievability of the requirements, EPA assesses the expected impacts on the profitability of the potentially
affected facilities, the firms that own these facilities, and the directly-affected industiy as a whole.
Requirements that may result in significant numbers of facility or firm closures, or that may otherwise
cause significant reductions in financial returns to the affected economic activities, may be deemed to be
economically unachievable.
ES-6
-------
Economic Achievability
For purposes of this economic impact anaIysis EPA assumes that the final Coal Rernining Subcategory
will not impact existing Rahall-type permits with established “best professional judgement” (BPJ)
limitations. Thus, the final subcategoiy will not have any economic impacts on operations under existing
Rahall-type permits. For new permits, remining operators will have the oppoilunity to assess the overall
economic return to remining in compliance with the final requirements before any investment is made at a
remining site.
The methods used to assess the economic impacts of the final Coal Remining Subcategory differ from
approaches EPA has used in analyses for other rules because EPA believes that the final requirements
will only affect new remining permits. Hence, information needed to quantify the economic impacts to
industry in terms of facility closures or impacts to finn financial ralios is not available. Alternatively, EPA
compared the potential added costs of the final requirements with the current price of coal produced from
the Appalachian region to provide a measure of economic impact. Where additional requirements
imposed by the final subcatcgoiy represent only a small percentage of the price received for coal, EPA
concludes that the final requirements will not have a significant economic impact on potential remining
projects.
Under worst-case assumptions, EPA estimates that additional monitoring costs could represent as much
as $0.11 per ton remined. However, even this worst-case estimate represents less than one-half of one
percent of the 1997 average price of £26.55 per ton of coal mined in the Appalachian region. These
findings suggest that the incremental monitoring requirements will not deter investments in remining
projects. EPA estimates that the additional BMP costs associated with the pollution abatement plans
could represent 5.6 cents per ton of coal recovered, or two-tenths of one percent of the 1997 average
price of coal mined in the Appalachian region. However, these additional BMPs will be site-specific, with
economic achievability considered in BPJ determination.
Since the final Western Alkaline Coal Mining Subcategory rule results in net cost savings to existing mine
operations, it is inherently economically achievable. Because reclamation costs under the n ile will be less
than or equal to those under the existing effluent guidelines for all individual operators, no facility closures
ES-7
-------
or direct job losses associated with post-compliance closure are expected. However, EPA estimated
changes in labor requirements attributed to the fmal subcategoiy rule by extrapolating from the WCMWG
model mine results which calculated change in labor hours associated with changes in the types of
erosion and sediment control structures used. EPA estimates that the subcategoiy requirements could
result in the loss of 5.2 full-time equivalent employees (FTEs) per year. This represents less than 0.1
percent of the total 1997 coal mine employment (6,862 FTEs) in the western alkaline region States.
The cost savings associated with the final rule are not expected to have a substantial impact on the
industry average cost of mining per ton of coal, and are therefore not expected to have a major impact on
coal prices. While the savings are substantial in aggregate, on avemge the savings represent a small
portion of the total value of coal produced by the affected mines. The final rule is not expected to result
in significant industry-level changes in coal production or prices.
Impacts on Small Finns
The Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act
of 1996 (SBREFA), generally requires an agency to prepare a regulatory flexibility analysis for any rule
subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a significant economic impact on a
substantial number of small entities. An agency may certify that a rule will not have a significant
economic impact on a substantial number of small entities if the rule relieves regulatory burden, or
otherwise has a positive effect on all small entities subject to the rule.
For purposes of this analysis, small entity is defined as: (1) a small business that has 500 or fewer
employees (based on SBA size standards); (2) a small governmental jurisdiction that is a government of a
city 1 county, town, school district or special district with a population less than 50,000; c c (3) a small
organization that is any not-for-profit enterprise which is independently owned and operated and is not
dominant in its field.
The final Coal Rerninung Subcategory provides standardized procedures for developing effluent limits for
pre-existing discharges, thereby reducing the uncertainty involved in interpreting and implementing current
ES-8
-------
Rahall requirements. The final subcategory is intended to remove bamers to the permitting of remining
sites with pre-existing discharges, and is therefore expected to encourage remining activities by small
entities. Thus, the Agency concludes that the subcategoiy will relieve regulatoiy burden for all small
entities. EPA projects that the final Western Alkaline Coal Mining Subcategory will result in cost savings
for all small surface mining operators. For all small underground operators, EPA projects no incremental
costs, and the Agency believes that many are likely to experience some cost savings. Thus, the Agency
concludes that the subcategory will have a positive impact on all affected small entities. The Agency
thereby certifies that the final nile Will not have a significant economic impact on a substantial number of
small entities.
Impacts on New Sources
EPA does not believe that the final nile will present any barriers to entiy in the coal mining industiy. EPA
believes that the final nile will not impact existing remining permits. For new permits, remining operators
will have the opportunity to choose among potential remining sites, and will only select sites that they
believe are economically achievable to reinine. The final requirements will not create any bathers to
enizy in coal remining, but instead are specifically designed to encourage new reinining operations.
EPA beheves that new sources will be able to comply with the NSPS requirements under the final
Western Alkaline Coal Mining Subcatcgoiy rule at costs that are similar to or less than the costs for
existing operators. New sources can plan for site-specific BMP reclamation from the outset rather than
altering existing reclamation plans based on the new requirements. For example, new sources would be
able to avoid costs associated with designing and installing sedimentation ponds. There is nothing about
the final rule that would give existing operators a cost advantage over new mine operators. Therefore,
NSPS limitations will not present a bather to entiy for new operators.
ES-9
-------
Additional Economic Impacts
EPA evaluated three additional categories of economic impacts for the final rule: costs to NPDES
permitting authorities, community impacts (due to potential impacts on employment), and potential foreign
trade impacts.
Costs to NPDES Permitting Authorities
NPDES permitting authorities will incur additional costs to review new permit applications and issue
revised permits based on the fmal rule. Total additional NPDES permit review costs for the final rule are
estimated to be between $60,000 and $80,000 per year ($47,500 to $67,500 for remining permits, and
$12,500 for pemüts under the Westem Alkaline Coal Mining Subcategoiy).
Community Impacts
The final nile could have community-level and regjonal impacts if it significantly altered the competitive
position of coal produced in different regions of the county, or led to growth or reductions in employment
in different regions and communities. EPA concluded that the final rule would not have a significant
impact on relative coal production in the West vemis the East. This is because: (1) annualized cost
savings estimates for Western Alkaline surface mines average about $0.033 per ton, or 0.4 percent of the
value of coal production from these mines; (2) coal from western mines appears to compete directly with
eastern coal in about eight states, where the $0033 savings per ton comprises about 0.13 percent of the
average delivered price (the average delivered price of coal in these eight “competitive” states was about
$25.51 per ton in 1998); and (3) Department of Energy data indicates that the average cost of rail
transportation for coal from western to midwestern states is approximately $0.00912 per ton-mile,
implying that Western Alkaline mines would be able to ship their coal about 4 additional miles while
maintaining the same delivered price. The final Coal Remining Subcategozy rule is likely to shift the
location of production and employment toward eligible abandoned mine lands, but not to increase national
coal production or affect coal prices significantly overall.
ES-lO
-------
EPA projects that impacts of the final rule on mine employment will also be minor. Increased remining
might create new employment opportunities in some locations. As discussed above, EPA estimated a
reduction in labor requirements of 5.2 FTEs per year for the final Western Alkaline Coal Mining
Subcategoiy rule. The estimated annual 5.2 FFE direct job losses would result in an additional 8.7 FTh
indirect job losses based on RIMS11 regional employment multipliers for the western alkaline states.
Therefore, the total impact on employment, direct and indirect, that may result from the final Western
Alkaline Coal Mining Subcategory is a reduction of between 13.9 FTEs per year.
Foreign Trade Impacts
EPA does not expect any foreign trade impacts as a result of the final rule. U.S. coal exports consist
primaiily of Appalachian bituminous coal, especially from West Virginia, Virginia and Kentucky. Coal
imports to the U.S. are insignificant. The final rule could encourage additional exports, with a positive
impact on the U.S. balance of trade, if coal from expanded renuning in the Appalachian region found
markets overseas. Impacts are difficult to predict, however, since coal exports are determined by
economic conditions in foreign markets and changes in the international exchange rate for the U.S. dollar.
Any impacts on foreign trade are likely to be small, given EPA’s expectation that the final rule will not
increase overall coal production.
Environmental Impacts and Benefits
Coal Remining Subcategory
Appalachia has been the site of substantial coal mining historically, and much of this mining took place
before passage of laws regulating the environmental impacts of coal mining. The result is an
environmental legacy that includes more than a million of acres of abandoned mine lands. These areas
are associated with a wide range of public health and safety problems and aesthetic degradation, including
abandoned mine openings, highwalls, unstable spoils, and hazardous water bodies. In addition, acid mine
ES-Il
-------
drainage from abandoned mine lands causes serious water quality problems, and is a major source of
water quality impairments in Appalachia
EPA evaluated the environmental impacts of remining BMPs on land and water resources using data
from a Pennsylvania study of 112 closed ranining sites and another study of 105 Pennsylvania remining
permits. The 1 12-site Pennsylvania study found significant decreases or elimination in the levels of
specific pollutants in 381044 percent of the pre-existing discharges monitored. Based on an assumption
that discharges are evenly distributed across reclaimed acres, EPA estimated that 38 percent to 44
percent of the additional AML acres reclaimed per year will experience significant decreases in pollutant
levels. EPA further assumed that 57 percent of the acres permitted would actually be reclaimed, based
on a study of 105 Pennsylvania remming pennits (Hawkins, 1995).
EPA was able to quantiFy some of the benefits expected from increased remining, and was able to
monetize some of the quantified benefits u.cing a benefits transfer approach. Benefits transfer involves use
of the results of previous studies that estimate consumers’ willingness to pay for various improveme nts in
environmental quality. EPA applied willingness to pay values from previous studies of similar
environmental improvements to estimate the value of the environmental iinpiovemeziis expected to result
from the final rule. Benefits are estimated by multiplying relevant values from the literature by the
additional acreage reclaimed under the final subcategoiy rule. EPA assumed that benefits from reznining
begin to occur five years after permit issuance and are calculated for a five year period.
Table ES-3 presents EPA’s estimates of total annual monetized benefits for the final Coal Remining
Subcategory. These estimates include values of enhanced recreational use of water bodies and reclaimed
abandoned mine land, the value of aesthetic improvements to water bodies, and nonuse values associated
with improved water bodies. Nonuse values are assumed to equal one-half of water-related use values.
Annual monetized benefits are estimated to range from approximately $0.70 to SI .2 million using a
discount rate of 3 percent, and between $0.6 and $0.9 million using a discount rate of 7 percent. In
addition to these monetized benefits, EPA estimates that between 216,000 and 307,000 additional feet of
highwall will be removed each year, resulting in significant public safety benefits. Remining may also
reduce drinking water treatment costs; reduce damage to wells, pipes, and other structures; and enhance
ES- 12
-------
the commercial potential of the affected areas. EPA was unable to quantil5r these benefits in the
analysis.
Table ES-3: Estimated Benefits for the Final Coal Reinlwng Subcategory Rule
Estimated Present Value Estimated Present Value
Annual of Benelits from olBenefits from
Additional Acres Present Remining Permits Issued Remining Permits Issued
Value from Each Year Eadi Year
Benefit Source reclaimed year’ Literature 3 Discounted at 3%4 Discounted at 70/•4
Recreational Use of 667- 1,115 $37 $100,500-$168,000 577,000-5129,000
Improved Water Bodies
Aesthetic Improvements to 667- 1,115 $140 $380,000- $635,500 $292,000- $488,500
Water Bodies
Recreational Use of 1,773 - 2,512 $28 $202,000 - $286,000 $155,000- $220,000
Reclaimed Land
Nonuse (Improved Water 667-1,115 $19 551,500-586,000 540,000-566,500
bodies)
Total $734,000- $1,175,500 $564,000- $904,000
1. Assumes that implementation of the rule will result in an additional 3,111 to 4,407 acres of AML permitted for lemming per
year, that 57% of those acres are actually reclaimed, and that significant water quality Improvements will occur in 38% to 44% of
the reclaimed acres
2. Per acre per year (S 1998). See text for literature sources for these values.
3. Benefits = (Acres reclaimed * Value) I ((1 + r)’ (1 + 5)) , where r discount rate and average life of remining
operation 5 years.
4. Numbers are rounded to the nearest $500.
Western Alkaline Coal Mining Subcategory
Affected western mines are located in arid and semiarid regions characterized by very low annual
precipitation. Rainfall occurs generally during localized, high-intensity, short-duration thunderstorms, with
runoff often resulting from flash flooding. Evapotranspiration noimally exceeds precipitation. These
conditions create severe soil moisture deficits, limited surface water resources, and poor plant growth and
ES-I 3
-------
cover. Most runoff from undisturbed areas has baseline sediment levels that exceed the 40 CFR part 434
guidelines for settleable solids.
The exclusive use of sediment ponds to treat runoff from reclamation areas can have detrimental
environmental effects in arid and semiarid regions. Sedimentation ponds create large disturbance areas
which may disrupt fragile habitats and sensitive hydrological features. Sedimentation ponds also reduce
water quantities downstream. Site-specific BMPs have the potential to conserve topsoil, control suiface
erosion and sedimentation, increase vegetation density, and minimize disruption of downstream flows.
The WCMWG Model Mine Report compares the performance, costs, and benefits under existing
reclamation requirements to a BMP approach for three model mines typical of surface mines in the
arid/semiarid west. EPA extrapolated the model mine estimates of sediment loadings, runoff delivery
downstream from the reclamation areas, changes in vegetative cover, and size of disturbed area to assess
benefits associated with the final subcatego iy rule. EPA used a benefits transfer approach to value two
categories of benefits: land-related benefits and water-related benefits.
The land-related benefits stem from the increased availability of open space, which provides enhanced
hunting opportunities. EPA estimates that annual land-related benefits range from $2,000 to $13,000 per
year discounted at 3 percent, and from $1,500 to $11,000 per year discounted at 7 percent.
Estimated water-related benefits include the value of enhanced recreational opportunities due to improved
water flow. EPA used “willingness to pay” (WTP) values for preserving perennial stream flows
sufficient to support abundant stream side plants, animals and fish from a previous study. EPA applied
this WTP value to the estimated number of water-based recreation participants in western counties where
there are mining operations that affect water bodies with perennial flows. The estimated monetary value
of recreational water-related benefits for these streams ranges from $25,000 to $488,000. EPA assumed
that nonuse benefits were equal to one-half of the water-related recreational benefits, or $12,500 to
$244,000 per year.
As shown in Table ES-4, total estimated annualized benefits from implementing the final subcategoiy rule
range from $39,500 to $745,000 discounted at 3 percent, and from $39,000 to $743,000 discounted at 7
ES-l4
-------
Benefit Categories
Avoided Surface Disturbance
Recreational Benefits from Improved Water Flow
Nonuse Benefits
Total Benefits
‘Resulls have been rounded to the nearest $500.
Annual Benefit Values ($1998)’
Discounted at 3% Discounted at 7%
$2,000-$ 13,000 $1,50 0-$I1,000
$25,000 - $488,000 $25,000 - $488,000
$12,500 - $244,000 $12,500 - $244,000
$39,500 - $745,000 $39,000 - $743,000
Tables ES-S and ES-6 summarize the estimated total annual social costs and benefits of the two final
subcategories. The estimated social costs include industry compliance costs and the costs incurred by
NPDES permitting authorities to implement the final rule. The benefit estimates presented reflect only
those benefit categories that EPA was able to quantify and monetize.
percent. The benefits estimates do not include a number of benefit categories, including nonuse
ecological benefits, the benefits of increased vegetative cover, and possible recreational fishing benefits.
Table ES-4: Estimated Benefits for the Final Western Alkaline Coal Mining
SubcategoryRule - -_____________________________________________
Social Costs and Benefits
ES-IS
-------
Table ES-5: Annual Social Costs and Bendts for the Final Coal
Renzlwng Subcategory Ride ($1998)
Social Costs:
Compliance Costs:
Additional BMP effort
Monitoring costs
Costs to NPDES Permitting Authorities:
Total Social Costs
Discounted at 7%
$199,500- $565,000
$133,500- $193,500
$47,500- $67,500
5380,500- $826,000
Monetized Benefits:
Recreational Use of Improved Water Bodies
Aesthetic Improvements to Water Bodies
Nonuse (related to improved water bodies)
Total Water-Related Benefits:
Recreational Use of Reclaimed Land
Total Monetized Benefits:
Note: Totals n ay not add due to rounding
Discounted at 3%
$100,500-S168,000
$380,000- $635,500
$51,500- $86,000
5532,000 - 5889,500
$202,000- $286,000
5734,000 - 51,175,500
Discounted at 7%
$77,000- $129,000
$292,000- $488,500
$40,000- $66,500
5409,000 - $684,000
$155,000- $220,000
5564,000 - 5904,000
EPA projects that states will permit 431061 new remining sites each year under this new subcategoiy.
Based on this projection, EPA estimates annual industzy compliance costs in the range of $333,000 to
$758,500. This estimate includes potential costs associated with increased BMP effort (i.e., pollution
abatement plan costs) and additional monitoring. Estimated annual costs to NPDES permitting authorities
are between $47,500 and $67,500. The estimated total annual social cost of this subcategory rule ranges
from $380,500 to $826,000.
ES- 16
-------
Sediment Control Costs (Savings)
Earlier Phase 2 Bond Release (Savings)
Costs to NPDES Permitting Authorities:
Total Social Costs (Savings)
Benefit Categories
Avoided Surface Disturbance
Recreational Benefits from Improved Water Flow
Nonuse Benefits
Total Monetized Benefits
Note. Totals may not add due to rounding
$327,000
($12,721,000)
($341,900- $501,400)
$12,500
(512,723,400- 512,882,900)
Annual Benefit Values ($1998)
Discounted at 3% DIscounted at 7%
$2,000-$13,000 $l , 500-$1i,000
$25,000- $488,000 $25,000- $488,000
$12,500- $244,000 $12,500- $244,000
$39,500- $745,000 $39,000- $743,000
The total monetized benefits range from $734,000 to $1,175,500 discounted at 3 percent, and from
$564,000 to $904,000 discounted at 7 percent. Between 72 and 76 percent of the total monetized benefits
result from projected improvements to water bodies. Of the water-related benefits, 71 percent reflects
the value of aesthetic improvements to water bodies, 19 percent reflects water-related recreational
benefits, and the remainder reflects nonuse benefits. Estimated land-related benefits result from
improved recreatiott on reclaimed lands, including hunting and wildlife-viewing, and account for 241028
percent of the total monetized benefits.
In addition to the benefits EPA was able to monetize, the projected increase in remining is expected to
result in the removal of approximately 216,00010 307,000 feet of highwall each year, resulting in
substantial benefits associated with increased public safety. Furthermore, increased remining has the
potential to recover and utilize coal resources that might otherwise remain unrecovered. Other benefit
categories that EPA was not able to monetize include health and safety benefits, nonuse benefits related
Table ES-6: Annual Social Costs, Cost Savings and Benefits for the Final Western Alkaline Coal
Mining Subcategory Rule ($1998)
Social Costs Discounted at 7%:
Compliance Costs (Savings)
Incremental Modeling Costs
ES-li
-------
to reclaimed land, potential savings in drinking water treatment costs, and secondaiy economic impacts
from increases in tourism and recreation.
The final Western Alkaline Coal Mining Subcategory rule is prqjected to result in substantial industry cost
savings while creating environmental benefits for society, as summarized in Table ES-6.
EPA believes that the only in einental industiy compliance costs attributed to the final subcategory rule
are associated with the watershed modeling requirements, estimated to be approximately $327,000 per
year. These costs would be offset by reduced sediment control costs associated with implementing the
required sediment control plans (an estimated savings of approximately $12.7 million) and savings
resulting from an expected reduction in the reclamation bonding period (an estimated savings of $341,900
to $501,400). EPA estimates that the annual cost to NPDES permitting authorities to implement the final
subcategory rule will be approximately $12,500, resulting in a total annual social cost savings of
approximately $12.8 million.
The final Western Alkaline Coal Mining Subcategoiy rule is also expected to result in environmental
benefits. Total monetized benefits range from $39,500 to $745,000 per year discounted at 3 percent, and
from $39,000 to $743,000 discounted at 7 percent The majority of the monetized benefits results from
improved water flow that will preserve perennial water bodies affected by western coal mining
operations.
The improved flow is expected to result in benefits to water-based recreation consumers ($25,000 to
$488,000), and in water-related nonuse benefits ($12,500 to $244,000). Land-related benefits result from
reduced disturbance of land areas. EPA estimated the value of enhanced hunting opportunities associated
with the undisturbed lands, but was not able to monetize other land-related benefits. Categories of
benefits that EPA was not able to monetize include land-related ecological benefits, the benefits of
increased vegetative cover, and possible recreational fishing benefits.
ES-I 8
-------
Chapter 1
Introduction
1.0 Overview and Definitions
The Federal Water Pollution Control Act Aine.ndments of 1972 established a comprehensive prognuu to
“restore and maintain the chemical, physical, and biological integrity of the Nation’s waters” (Section
101(a)). To implement these amendments, the U.S. Environmental Protection Agency (EPA) issues
effluent limitations guidelines and standards for categories of industrial dischargers. The regulations that
the EPA establishes are:
• Rest Practicable Control Technology Currently Available (B PT). These rules apply
to existing industrial direct dischargers, and generally cover discharge of conventional
pollutants.
Best Available Technology Economically Achievable (BAT). These rules apply to
existing industrial direct dischargers and the control of priority and non-conventional
pollutant discharges.
• Best Conventional Pollutant Control Technology (BCT). These rules are an additional
level of control beyond BPT for conventional pollutants.
• Pretreatment Standards for Existing Sources (PSES). These rules apply to existing
indirect dischargers (i.e., facilities whose discharges enter Publicly Owned Treatment
Works, or POTWs). They generally cover discharge of toxic and non-conventional
pollutants that pass through the POTW or interfere with its operation.
1—1
-------
• New Source Performance Standards (NSPS). These rules apply to new industrial
direct discharges and cover all pollutant categories.
• Pretreatment Sean dards for New Sources (PSNS). These rules apply to new indirect
dischargers and generally cover discharge of toxic and non-conventional pollutants that
pass through the P01W or interfere with its operation..
This report presents the economic and environmental impact asses rient for the final amendments to
effluent limitations guidelines and standards for coal mining imder the Clean Water Act (40 CFR part
434). EPA is adding two new subcategories for coal mining, the first applying to coal renuning operations
and the second applying to reclamation activities at western alkaline coal mines. This report discusses the
two new subcategories, provides a biief overview of the coal industiy, and describes the mining
operations that will be affected by the final nile. The report then presents an analysis of costs, benefits,
economic impacts, and environmental impacts attributed to each of the final subcategories. This report
supports EPA’s compliance with the following requirements:
• The Regulatoiy Flexibility Act (RFA) as amended by the Small Business Regulatozy
Enforcement Fairness Act (SBREFA), which requires, among other things, that the
Agency determine whether a rule will have a “significant impact on a substantial number
of small entities;”
• The Unfunded Mandates Refonn Act (UMRA), which requires that the Agency assess
the effects of regulatozy actions on state, local and tribal govemments and the private
sector;
• Executive Order 12866, which requires that the Agency determine whether a regulatory
action is “significant.”
1-2
-------
1.1 Coal Remining Subcategory
1.1.1 Background
Coal remining is the mining of surface mine lands, underground mine lands, and coal refuse piles on a site
on which coal mining was previously conducted and where the site has been abandoned or the
performance bond has been forfeited. Prior to SMCRA, reclamation of mine lands was not a federal
requirement. Many coal mines were left in an abandoned state and continue to degrade the environment
and pose health and safety risks. The acid mine drainage that originates from these abandoned mine
lands is considered “pre-existing discharges.” Acid mine drainage from abandoned coal mines is a major
environmental problem in the Appalachian and mid-Continent Coal Regions of the eastern United States.
Information gathered from the Interstate Mining Compact Commission (IMCC) and OSM’s Abandoned
Mine Land lnventozy System (AMLIS) indicates that there are over 1.1 million acres of abandoned mine
lands, over 9,700 miles of streams polluted by acid mine drainage, and many miles of dangerous
embankrnents, highwalls, and surface impoundments.
The guidelines at 40 CFR Part 434 subpart C include numerical limits on pH, iron, manganese and total
suspended solids (TSS). No distinction was made between new coal mining operations and remining
operations, or between pre-existing and new discharges at remining sites. The previous regulations
created a disincentive for remining by imposing limitations on pre-exisling discharges for which
compliance is cost prohibitive. Congress attempted to address this problem by passing the Rahall
Amendment to the Clean Water Act (CWA) to provide incentives to encourage coal remining. The
Rahall Amendment (Section 301 (p)) allows NPDES pennit writers to issue permits with site-specific
limits for iron, manganese, and pH for pre-existing discharges at remimng sites where remining has the
potential to improve water quality. These modified limits may not exceed baseline levels in the pre-
existing discharges, and discharges from the remining operation may not violate any state water quality
standards.
EPA recognizes that one of the most successful means for improving abandoned mine land is for coal
mining companies to remine abandoned areas and extract the coal reserves that remain. EPA also
1-3
-------
recognizes that if abandoned mine lands are ignored during coal mining of adjacent areas, a time-crjticaJ
opportunity for reclaiming the abandoned mine land is lost. During resuming operations, acid-fonning
materials are removed with the extraction of the coal, pollution abatement best management practices
(BMPs) are implemented under applicable regulatoiy requirements, and the abandoned mine land is
reclaimed. During remining, many of the problems associated with abandoned mine land (AML), such as
dangerous bighwalls, can be corrected without the use of public funds. Fuiihermnore, implementation of
appropriate BMPs during reinming operations can be effective at improving the water quality of pre-
existing discharges.
Unfortunately, the potential of the Rahall Amendment to remove the disincentives and derive the
maximum environmental benefits from rernining has not been fully realized in the absence of implementing
regulations. The statute does not specify how to detennine site-specific limits or baseline pollutant
discharge levels, Ieaving these decisions to individual pezmitting authorities. Without standardized
procedures for developing effluent limits for pie-existing discharges, many states with extensive AM!.
remain hesitant to pursue formal remining programs. EPA is implementing the Coal Ramming
Subcategoiy to provide a regulatoiy stiucture to encourage remining activities, and in turn, reduce acid
mine drainage and improve water quality.
1.1.2 Summary of the New Subcategory
The new subcategory will apply only to “pre-existing discharges” located within pollution abatement areas
of coal rernining operations and that are not commingled with wastestreams from active mining activities.
All other discharges will continue to be subject to the current effluent limitations. EPA is establishing a
new subcategoiy with effluent guideline limitations based on a combination of numeric limits and non-
numeric BMP requirements. EPA is also establishing a standardized procedure for determining pollutant
levels for baseline and compliance monitoring. Potential BMPs include: daylighting abandoned
underground mines, removing coal refuse piles, reducing the volume of acid mine drainage through proper
handling of acid-forming materials, eliminating abandoned highwalls, reconstructing streambeds, draining
and backfllling abandoned pits, and establishing vegetation.
1-4
-------
EPA is incorporating BMP standards into the new rule by requiring that remining operators develop and
implement a site.specific pollution abatement plan for each remining site. In many cases, EPA believes
that the requirements for the pollution abatement plan will be satisfied by an approved SMCRA plan.
However, EPA or the State NPDES permitting authority will review the plan and will retain the authority
to recommend additional or incremental BMPs as necessary to meet Clean Water Act requirements.
The final effluent limitations guidelines and standards for the Coal Remining Subcategoiy are established
as follows:
• EPA is establishing BPT, BCT, BAT, and NSPS limitations that have an equivalent technical
basis for the Coal Remining Subcategoiy. The final limitations are defined through a combination
of numeric and non-numeric standards. Specifically, EPA is establishing that BAT is
implementation of a pollution abatement plan that incorporates BMPs designed to reduce pollutant
levels of acidity, TSS, iron, and manganese, and a requirement that such pollutant levels are not
increased over baseline conditions.
• EPA did not consider any regulatory options for new sources for the Coal Remining Subcategory,
and therefore is not establishing NSPS standards. By definition, pre-existing discharges at
abandoned mine lands covered by this nile were in existence prior to passage of SMCRA in
1977. Therefore, all pre-existing discharges are considered existing sources, and are subject to
the requirements for BPT, BCT, and BAT.
1.2 Western Alkaline Coal Mining Subcategory
1.2.1 Background
The previous effluent guidelines at 40 CFR Part 434 subpart E for reclamation areas established BPT,
BAT, and NSPS numeric effluent limits based on the use of sedimentation pond technology. These
guidelines applied to all reclamation areas throughout the United States, regardless of climate, topography,
or type of drainage (i.e., acid or alkaline). These guidelines established relatively stringent controls on the
amount of sediment that could be discharged into waterways from post-mined areas. In the arid and
semiarid west, use of sedimentation ponds was generally required to meet these standards. Although
sedimentation ponds are proven to be effective at reducing sediment discharge, EPA believes that there
1-5
-------
are nu mer-ous non-water quality impacts from their use in the arid and semiarid west that need to be
considered.
EPA believes that environmental conditions in the arid and semiarid west differ significantly from those in
other coal mining areas. In arid and semiarid regions, the natural veg titi e cover is sparse and rainfall is
commonly received during localized, high-intensity, short-duration storms. These conditions ccnmbute to
flash-floods and turbulent flows that transprMt large amounts of sediment. Controlling sediment in areas
that naturally contain large amounts of scdünent through the predominant use of sedimentation ponds can
result in numerous non-water quality impacts that harm the environment, including disturbing the natural
hydrologic balance, accelerating erosion, reducing groundwater recharge, reducing water availability, and
impacting large areas of land for pond construction. To address these impacts, the new subcategory nile
requires coal mine operators to implement BMPs so that post-mined lands are reclaimed to mimic natural
conditions that were present prior to mining activities.
1.2.2 Summary of the New Subcategory
In order to maintain natural conditions at reclamation areas, EPA is requiring that non-numeric effluent
limits be based on the design, implementation, and maintenance of best management practices (BMPs).
BMP technologies for the coal mining industry are well knowa and established. Common BMPs used at
post-mining coal areas include: regrading, revegetation, mulching, check dams, vegetated channels, and
contour terracing, as well as sedimentation ponds.
Specifically, EPA is requiring that operators develop and implement site-specific sediment control plans
for surface reclamation areas in lieu of the numeric limits for pH and Settleable Solids (SS) required under
current guidelines. The sediment control plan must identify BMPs and present design, constriction, and
maintenance specifications, and expected performances. The regulation requires the operator to select
BMPs aimed at ensuring that average annual sediment levels in drainage from the reclamation area does
not exceed predicted natural background levels of sediment discharges at that site. The operator is
required to demonstrate, using watershed models accepted by the regulatory authority, that
implementation of the selected BMPs meets this goal.
1-6
-------
EPA expects that the components of the sediment control plan will largely be satisfied by materials
generated as part of the SMCRA permit application. The SMCRA permit application process requires
that a coal mining operator submit a reclamation plan, documentation and analysis to OSM or the
permitting authority for approval. Based on these requirements, EPA believes that plans developed to
comply with SMCRA requirements will usually fuffihl EPA’s requirements regarding sediment control
plans. The requirement to use modeling techniques is not inconsistent with OSM reclamation plans.
While modeling is not a required component of the SMCRA permit application, mining facilities already
submit a watershed model as part of their SMCRA reclamation plan. EPA believes modeling is
particularly valuable in arid and semiarid areas where the infrequency of precipitation makes it difficult to
gather data. While EPA is not specifying a particular model be used, the Agency wants the model be the
same watershed model the operator used to acquire the SMCRA permit.
The final efiluent limitations guidelines and standards for the Western Alkaline Coal Mining Subcategory
are established as follows:
• BPT consist of BMP requirements projected through modeling to maintain average annual
sediment yield at or below pre-mined undisturbed conditions. EPA requires the coal mining
operator to develop and implement a sediment control plan to demonstrate compliance.
• No BCT limitations are being established at this time since numerical effluent limitations for any
conventional pollutants are not being established.
• BAT standards will be established equivalent to BPT.
• NSPS standards will be established equivalent to BAT and BPT. EPA estimates that the rule will
result in a net cost savings to all affected surface mine operators, and will be at worst cost-neutral
to affected underground operators. Therefore, implementing NSPS standards will result in no
barrier to entry based upon the establishment of this level of control for new sources.
1-7
-------
1.3 Structure of the Report
This report presents EPA’s analysis of the costs, benefits, economic impacts and environmental impacts
attributed to the final rule. Separate analyses are presented for each of the two final subcategories. Both
analyses start with identification of the afl’ected mine operations and characterization of the economic
baseline, and then estimate the incremental industry compliance costs attributed to the final rule. The
analyses of the economic impacts of each final subcategoiy include analysis of potential impacts on coal
mine opemtors, coal markets (coal production and prices), employinent, and small coal mining companies.
In addition to these industry impacts, EPA also examined additional impacts, such as costs to the NPDES
permitting authority to implement the final standards, community impacts, and foreign trade impacts.
EPA analyzed the adverse environmental impacts of current practices as a basis for assessing the
incremental environmental impacts and benefits of the final rule. These baseline impacts include the
effects of pollution from abandoned mine lands that have not been reclaimed or remined, and the
hydrologic effects and land disturbance caused by predominant use of sedimentation ponds to control
sediment loadings from western alkaline mine reclamation areas. EPA then assessed reductions in these
baseline adverse environmental impacts that will result from implementation of the final rule. EPA was
able to quantify these environmental improvements for some categories of benefits, and estimate their
value using benefits transfer techniques. Benefits transfer involves use of the results of previous studies
that estimate consumers’ willingness to pay for various improvements in environmental quality. EPA
applied willingness to pay values from previous studies of similar environmental improvements to estimate
the value of the environmental improvements expected to result from the final rule.
The remainder of this report is organized as follows:
• Chapter 2 describes the data sources used in the economic and environmental impact
assessment.
• Chapter 3 provides a profile of the affected mines and a description of the economic
baseline. The chapter first presents a brief overview of the coal industry in general and
discusses the two subcategories. The regulatory requirements that currently apply to the
affected coal mining operations are then examined. The final section describes how the
economic baselines were characterized for the two subcategories.
1-8
-------
• Chapter 4 presents EPA ’s estimate of the industry compliance costs attributed to the final
rule.
• Chapter 5 discusses the economic impacts to industry of the final rule. This chapter
discusses the potential significance of the economic impacts in general, and analyzes
potential impacts for small entities and new sources in particular.
• Chapter 6 presents an evaluation of additional economic impacts, including: costs to the
NPDES permitting authority to implement the final standards; impacts on coal production
and prices; community employment impacts; and foreign trade impacts.
• Chapter 7 discusses cost-effectiveness.
• Chapter 8 discusses the environmental impacts of the final nile, and presents EPA’s
analysis of the benefits of the rule.
• Chapter 9 summarizes the social costs and benefits of the final rule.
• References for all chapters are provided at the end of the main body of the report.
• The following appendices support the report:
— Appendix A provides information on cunent state remining programs.
— Appendix B provides information on the Office of Surface Mining’s Abandoned
Mine Lands Program, including the abandoned mine land (AML) fund and the
Abandoned Mine Land Inventory System (AMLIS) database.
1-9
-------
Chapter 2
Data Sources
2.0 Introduction
This chapter desciibes the data sources used by EPA to p the economic and environmental impact
analyses of the final nile. EPA is developing this regulation using an e?qedited rulemaking process. As
part of the expedited approach, EPA chose not to gather data using the time-consuming approach of a
Clean Water Act Section 308 questionnaire. Therefore, EPA’s economic analysis relied on industry
profile information voluntanly provided by stakeholdeTs, on data compiled from individual mining permits,
and on data from publicly available sources. These sources include those that provide data on the coal
industry as a whole, and sources that are specific to the Coal Remining Subcatcgoiy or to the Western
Alkaline Coal Mining Subcategoiy in particular. The categories of sources are described in separate
sections below.
2.1 General Industry Sources
2.1.1 DOE/EIA Coal Data (Form 7A)
The Department of Energy’s Energy Information Administration (DOEIE IA) collects and reports a wide
range of energy-related information, including information on coal production and use. These include data
collected from coal produceLs using EIA Form 7A, which must be completed by all coal mining
companies that own a mining operation that produced, processed or prepared coal during the reporting
year. Data are reported separately for each mining operation. However, most of the data are reported
only by mines producing 10,000 short tons per year or more of coal. This form collects a variety of
information on mining operations, including type of mine, mining methods, coal beds mined, recoverable
reserves, coal production, quantity and value of sales, employment and productivity. Summaries and
2-I
-------
analyses of these data forl 997 are reported in DOE/EIA’s Coal Annual 1997. In addition, some data
are available publicly in electronic form from the DOE/E 1A website. 1 The publically-available data
include identi1 ’ing information for the coal company and mine (name and location), type of mine, state and
Mine Safety and Health Administmtion (MSFIA) permit numbers, mine type (underground, sflip, auger,
strip/auger combination, etc.), type of operator (independent, operating subsidiary, or contractor), location
on federal property, and coal production for the reporting year. The DOE’EIA data were used to prepare
the profile of western surface and underground mines, as well as to provide basic mdustiy information on
prices, production and employment needed to assess the economic impacts of the final nile.
2.1.2 Keystone Coal Industry Manual
The 1998 Keystone Coal Industry Manual provided infounation on the ownership and production of
individual mines, as well as background information on industry conditions from the Coal Age Year in
Review summaiy (e.g., information on acquisitions and company sales, and recent regional trends in
production).
2.1.3 Census Data
Census data summarized in the Statistics of US. Businesses were used to assess the size of firms that
own coal mining operations. The 1992 Census of Mineral Industries provided information on revenues,
costs and employment by size of establishment (mine).
2.1.4 Financial Data
EPA used the Security and Exchange Commission’s (SEC) Edgar database, which provides access to
various filings by publicly held firms, such as 8Ks and I OKs, for financial data and information on
corporate sinictures. EPA also used a database maintained by Dun & Bradstreet (D&B), which
provides estimates of employment and revenue for many privately held firms, and obtained indusuy
financial performance data from Leo Troy’s Almanac of Business and industrial Financial Ratios.
I http://www.eia.doe/cneau/coaildata/summary/files.html
2-2
-------
2.2 Sources for Coal Remining Subcategory
Various databases were used to characterize abandoned mine lands that are potential candidates for
remining, and to characteTize past and potential future remining sites. These databases are described
below.
2.2.1 AMLIS Database
The Abandoned Mine Land Inventory System (AMLIS) database (U.S. DO!, I 998b) characterizes the
extent of environmental problems associated with AML in the United States. The database, which
provides an inventory of water bodies and lands impacted by abandoned coal mining sites is maintained
by the Office of Surface Mining (OSM) to provide information needed to implement the Surface Mining
Control and Reclamation Act of 1977 (SMCRA). The AIsILIS database is a dynamic system that is
continuously updated by OSM program officials, states, and tribes with field survey data
The AMLIS data are presented in two different tables. One table presents basic information about
problem areas, and the other defines specific problem types that exist within problem areas. The first
“problem area” table gives a general count of problem areas and contains information such as ownership,
mine type, and location. Overall, there are 14,852 problem areas in the AMLIS database as of February,
1999. Of these, 7,966 problem areas (accounting for 368,804 acres) arc former coal mining sites that
have not been funded for reclamation. The second table collects data on the specific types of problems
and problem size (e.g., feet of abandoned bighwall, counts of mine openings), as well as estimated
reclamation costs. Each problem type is reported only once for each area. Therefore, the feet reported
for abandoned highwall at a given area, for example, represents the total footage of all highwall at that
area. (Definitions of the AMLIS problem types are provided in Appendix B.) In total, there are 18,426
problems that have not yet been funded for reclamation at coal-related sites. 2
2 The AMLIS data analysis excluded problem areas that did not have a problem type reported.
2-3
-------
2.2.2 NALIS Database
The National Abandoned Land Information Systan (NALIS) database is maintained by the Pennsylvania
Depailnient of Environmental Protection (PA DEP, 1 999b) and supplements the AMLIS data for the
Commonwealth. EPA used NALIS data available as of March 1999 in the economic analyses. NALIS
includes 5,488 problem areas identified from high altitude aenal photography as resembling mine lands.
Data available for each problem area include location, ownership, and whether an active mine drainage
permit may apply to the problem area. From these 5,488 problem areas, Pennsylvania selected 2,218
problem areas that might qualify for federal funding and gathered data on these areas using the Inventoiy
Update Form. The lnventoiy Update Form includes data on:
• Location and total acres of problem area;
• Reclamation costs;
• Mine type;
• Type and quantity of priority 1 and 2 problems;
• Type and size of priority 3 problems;
• Injury/death, accident, or property damage reports;
• Problem area visibility status;
• Extent of public access; and
• Number of people directly affected by problem area.
The NALIS database provides more comprehensive information on Pennsylvania AML than does
AJvILIS. NALIS includes 2,218 problem areas, slightly more than the 2,095 problem areas included in
AMLIS that actually meet the standards for federal funding in Pennsylvania However, there are 6,055
problem types reported in NALIS for Pennsylvania, compared with 4,022 problem types reported for the
Commonwealth in AMLIS. The following data are reported for each problem type:
• Funding source;
• Problem and mine type;
• Height or depth of mine lands;
• Volume or flow of water; and
2-4
-------
• Miles of streams polluted by a given discharge.
2.2.3 EPA Coal Rernining Database
EPA’s Coal Remining Database (U.S. EPA, I 999a) includes information on remining and AML
reclamation operations for selected sites in six Appalachian states (WV, VA, PA, AL, KY, and TN).
EPA compiled the database from existing state data packages. The database contains the following
information:
• Mine permit data;
• Mine location;
• Affected acres;
• Discharge and water quality data;
• Mine geology; and
Information on abatement techniques (BMP5).
As of December 1998, the database contains information on 62 Appalachian mine sites, 19 of which are
located in Pennsylvania 3 Information is also provided for Alabama, Kentucky, Tennessee, Virginia and
West Virginia sites. Three of the sites were not included in the economic impact analysis, because they
involved only reclamation and not remining as defined by the final rule. Of the 59 permits included in the
analysis, the Commonwealth of Pennsylvania has the largest number of records (18), followed by
Alabama (16), West Virginia (9), Virginia (8), and Kentucky and Tennessee (both with 4).
2.2.4 interstate Mining Compact Commission Solicitation
The Interstate Mining Compact Commission (IMCC, 1999) obtained information on current remining
activities and potential future remining from state agencies. As of July 1999, twenty states had responded
to the IMCC solicitation (Alaska, Alabama, Colorado, Illinois, Indiana, Kentucky, Mazyland, Missouri,
Note that of the 19 Pennsylvania mines included in the database, only 9 matched with problem areas in NALIS.
NAIlS and EPA’s Coal Remining Database are not directly comparable, since EPA’s database reports on specific mine sites and
NALIS reports on problem areas.
2-5
-------
Mississippi, Montana, North Dakota, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, Virginia,
West Virginia and Wyoming). The data provided include types of remining pe.nnits issued (e.g., Rahall,
non-Rahall), characteristics of current and potential future reniining operations (e.g., numbers of
abandoned coal refuse piles, surface mined and underground mined sites), types of best management
practices (BMPs) used and assessments of their success, stream miles impacted by acid mine drainage
(AMD), and industzy profile statistics. The industzy profile data include numbers of companies holding
remining permits, total employment at rernining operations, annual coal production from remining sites, and
estimated coal resaves that could be remined. The IMCC data were used to estimate the number of
potential future remining sites and to supplement information provided in EPA’s Coal Reinining Database.
2.2.5 Total Maximum Daily Load Tracking System
The Total Maximum Daily Load (TMDL) Tracking System (U.S. EPA, 1996) was used to characterize
the environmental impacts of AML. The database provides information collected under Section 303(d) of
the Clean Water Act (CWA) on waters that do not currently support designated uses. Section 3 03(d)
requires states to identif r such waters and to develop TM])Ls for them. The tracking system combines
all final 1996 303(d) lists from all states into a common database. Because the data were compiled at the
state level, information is not always reported in the same format and some data fields are incomplete.
This database contains information on water body type, size of impaired water body, and cause of the
impainnent. Water quality impairments that are likely to be caused by AMD from coal mines were
variously reported as caused by: AMD, AML discharge, mining operations, mining or resource
extraction TMDL infonnation was used to identi1 ’ water bodies impaired by coal mining activities in
individual states. To the extent possible, EPA excluded extraction of mineral resources other than coal
from the relevant causes of water quality impainnent. Nevertheless, the assessment of water quality
inipaiiment is likely to include adverse effects on water quality from resource extraction activities other
than coal and pollutants other than those found in AMD.
2-6
-------
2.2.6 EPA Region III GIS Database
EPA’s Region III office in Wheeling, West Virginia compiled a Geographic Information System (GIS)
database of streams with fisheries impacted by acid mine drainage in 1995 (U.S. EPA, 1995). This EPA
database defined two levels of impact: streams with severe impacts were characterized as “no fish” by
state fisheries biologists; and streams with less severe impacts were denoted “some fish,” where acid
mine drainage had reduced the number of species or reduced productivity. These data cover all six states
(PA, WV, VA, MD, OH and DE) in EPA Region III. Three of these states (PA, WV, and VA) are also
included in EPA’s Coal Remining Database. EPA used the Region III database to estimate the number
of streams with fisheries impacted by acid mine drainage in each state.
2.2.7 Pennsylvania’s 112 Remining Site Study
A study of 112 closed rernining sites prepared by the Pennsylvania Department of Environmental
Protection evaluated the impact of remining on the water quality of pre-existing and post-remining
discharges (PA DEP, 1999a). The study was used to estimate the average number of pre-existing
discharges per remining site and to assess the impact of remining on pollutant levels in the discharges.
2.3 Sources for Western Alkaline Coal Mining Subcategory
EPA worked with a Western Coal Mining Work Group (WCMWG) composed of representatives from
the Office of Surface Mining (OSM), the Western Interstate Energy Board (WIEB), State regulatory
authorities, the National Mining Association (NMA), and other stakeholders to identi1 r, compile and
analyze existing information and data. NMA supplied EPA with a number of reports supporting the need
for, and feasibility of, establishing a separate Western Alkaline Coal Mining Subcategory. The group
provided three overall types of information relevant to this report.
2-7
-------
2.3.1 Profile of Affected Coal Mining Operations
The WCMWG provided mdusny profile information on western alkaline surface and underground coal
mines believed to be in the scope of the final rule (WCMWG, 1999b). These data included infoimation
on:
• Mine name and location;
• Date when the mining operation began;
• Annual coal production (1,000 tons);
• Average value of coal sold by all reporting mines in the state in which the mines are
located ($&on);
• Mining ermit information including permit number and the issuance date;
• Whether the mine is located on Indian Tribal lands;
• Number of acres disturbed to date by the mining operation;
• Projected additional acres disturbed over the lifetime of each mine;
• Projected mine life;
• Bond amount; and
• Name and characteristics of the receiving waters.
The infonnation was compiled from DOE/EIA data, the Keystone Manual, and data from current permits
for individual mines.
2.3.2 Model Mine Analysis
The work group also supplied EPA with a mine modeling study sponsored by the National Mining
Association and reviewed by OSM (WCMWG, 1999a, 2001). The study presents a comprehensive
analysis comparing the predicted performance, costs and benefits of current 40 CFR part 434 Guidelines
to the requirements for the final subcategory rule for three representative model mines in the and and
2-8
-------
semiarid western coal region. Characterization of background water quality, soil loss rates, and sediment
yield were predicted using computer models for both pre-mining (undisturbed) and post-mining
(reclamation) conditions. The model cost estimates of the two reclamation systems relied on cost data
taken from case study mine permit applications, mine records, technical resources and industry
experience. The study esthnated capital costs (design, construction and removal of ponds and BMPs) and
operating costs (inspection, maintenance, and operation) over the anticipated bonding period. Cost
savings result both from lower capital and operating costs associated with the BMP systems and from an
expected reduction in the bonding period during which the reclamation costs will be incuned. The
calculations assume that the post-mining Phase II bond release period is 10 years under the cuffent
effluent guidelines and that Phase II bond release could occur in five years under the new subcategoiy
rule. The cost model is discussed in detail in Development Document for Final Effluent Limitations
Guidelines and Standards for the Western Alkaline Coal Mining Subcategory (US. EPA, 2001).
2.3.3. Information on Environmental Impacts
The WCMWG provided information on the environmental impacts of reclamation practices at western
alkaline mines, including the impacts of sedimentation ponds and various sediment control BMPs, in the
following formats:
• Paired watershed studies, which assess water quantity and quality impacts of different
types of sediment controls.
• Technical Information Package: Western Alkaline Mining Subca:egory (WCMWG,
1999c). This package provides an overview of the environmental characteristics of
western ailcaline mines, a description of the current BMPs and alternate sediment control
technologies (ASCTs) to control sediment runoff, and a discussion of potential
environmental impacts from different types of BMPs, based on a variety of sources.
2-9
-------
Chapter 3
Industry Profile and Economic Baseline
3.0 Introduction
This chapter describes the foundation of the economic impact analysis of the final rule. The chapter
begins with a brief overview of the U.S. coal mining industiy. This section discusses industiy profile data
market characteristics, and recent trends in coal mine production and employment. The chapter then
describes the current regulatoiy requirements that apply to coal mining operations that are affected by the
final n ile, including existing effluent guidelines, SMCRA requirements, the Rahall Amendment to the
Clean Water Act, and state rernining programs. Finally, the chapter describes how the economic
baselines were characterized for the two coal mining industry segments that will be affected by the final
rule. EPA’s estimates of the number and acreage of new remining sites that will be permitted each year
under the final Coal Rernining Subcategory are presented, and the western alkaline coal mines that are
considered in the economic impact analysis for the Western Alkaline Coal Mining Subcategory are
discussed.
3.1 Overview of the Coal Industry
The United States produces approximately one-fourth of the world’s coal, and is the second largest
national holder of coal reserves. Estimated recoverable reserves in the U.S. equal more than 250 years’
supply at today’s production levels. The U.S. coal industry has undergone substantial streamlining and
restructuring in recent years in an attempt to remain profitable, including a dramatic reduction in the
number of mines, increases in mining productivity and the average size of mines, regional shifts in
production, and consolidation in ownership (DRI, 1998).
3-1
-------
Coal is mined from several distinct regions and provinces in the United States, which differ significantly in
both their economic and environmental characteristics. The major regions include:
• Appalachian: Alabama, Georgia, Eastern Kentucky, Maiyland, Ohio, Pennsylvania,
Tennessee, Virginia, and West Virginia,
• Interior Arkansas, illinois, Indiana, Iowa, Kansas, Western Kentucky, Louisiana,
Missouri, Oklahoma and Texas;
• Western: Alaska, Arizona, California, Colorado, Montana, New Mexico, North Dakota,
Utah, Washington, and Wyoming
Historically, the Appalachian Region has been the Nation’s most important sonrcc of coal, accounting for
about three-fourths of the annual production as recently as J 970. However its share of total U.S.
production has been decthning steadily since that time. A major consolidation and a shill in production
from eastern to western coal mines has occuired over the last 10 years. There has been a significant
reduction in the total number of coal operations since 1988, with the sharpest reduction occurring in the
Appalachian region. Froni 1988 to 1997, the number of coal mine operations decreased by:
• 54 percent in the Appalachian Region, falling from 3,469 mines to 1,602 mines;
• 46 percent in the Interior Region, dropping from 277 mines to 149 mines; and
• 32 percent in the Western Region, decreasing from 114 mines to 77 mines.
While the number of mines has decreased since 1988, total U.S. coal production has increased over the
same period. Production has increased in the Appalachian Region by four percent, declined in the Interior
Region by almost twelve percent, and increased by over 46 percent in the Western Region. By 1997,
western production was almost equal to total production from the Appalachian Region — the United
States produced 1.09 billion short tons of coal, with the Appalachian Region producing approximately 468
million short tons, the Interior Region producing approximately 172 million short tons, and the Western
Region producing approximately 451 million short tons.
DOE/EIA, 1995. Information in the remainder of this section is taken from DOE/EIA, 1995; DOEfEIA, 1997; and
DOE/EIA, 1999.
3-2
-------
Employment in coal mining has shown a long-term decline, despite the increase in coal production. This
decline in employment reflects the replacement of manual labor by machines in virtually all aspects of
mining Overall coal employment has declined from appioximately 229,000 in 1980 to less than 82,000 in
1997. Employment reductions have been the greatest in Appalachia, where employment has fallen from
171,000 in 1980 to less than 55,000 in 1997. Despite the decline, coal mining anploymcntis still
substantially higher in Appalachia than in other regions, due to the use of more labor-intensive
underground mining methods. Appalachian, interior and Western mining accounted for 72, 16 and 12
percent of 1997 coal mining employment, respectively.
3.1.1 Coal Reinining
IMCC member slates have çstimated that there are currently 150 mining companies in ten states involved
in remining operations (under either Rahall-type permits or current 40 CFR 434 limitations). These
companies are producing approximately 25 millions tons of coal annually, and are employing
approximately 3,000 people. To date, approximately 1,072 permits that include coal remining operations
have been issued. Of these, 330(31 percent) are Rahall-type permits where the operator is required to
meet determined baseline limits for pre-existing discharges. Seven states have established formal
remining programs, and combined have issued approximately 330 Rahall permits. The vast majonty of
these, approximately 300, were issued by the Commonwealth of Pennsylvania. Of the remaining thirty,
ten were issued by Alabama, eight by West Virginia, four by Kentucky, three by Virginia, three by Ohio,
and two by Maryland.
Renuning operations currently underway have proven to be a viable means of remediating the
environmental conditions associated with abandoned mine lands without imposing a significant cost burden
to industry. Remining operations are affecting approximately 270 abandoned coal refuse piles, 1,600
abandoned surface mines, and 1,100 abandoned underground mines. Information provided by IMCC
indicates that there are approximately 2,100 coal refuse piles, 2,000 abandoned surface mines, and over
8,000 abandoned underground mines that have the potential for remining.
3-3
-------
3.1.2 Western Alkaline Coal Mining
This section desaibes the subset of coal mines that would be eligible for the final Western Alkaline Coal
Mining Subcategory. These are mines west of the 1 O0 meridian, located in areas with 26 inches or less
annual precipitation, and in arid or semiarid environments. States in the coal-bearing zones of the West
are: Arizona, Colorado, Utah, Montana, New Mexico, Wyoming, and portions of North Dakota. Coal
mines hi the western alkaline region represented only 3.7 percent of U.S. coal mines in 1997, but
accounted for 38 percent of total coal production.
EPA prepared the document Coal Remining and Western Alkaline Mining: Economic and
Environmental Profile (US. EPA, 1999e) in support of this nile. The report provides industry profile
infonnation on the 47 surface coal mines and 24 underground coal mines initially believed to be in the
scope for the final subcategoxy rule. 5 Future reclamation at these existing mines, as well as reclamation
at new western alkaline niming operations, will be eligible for the new subcategory. Forty-two of the
surface mines report positive coal production, totaling 502.6 million tons with an estimated value of $4.4
billion in 1996-97. Four of these (producing 26.5 million tons) were located on Indian Tribal land, including
two mines on Navajo land and two mines on both Navajo and Hopi land. DOE/EIA data on the 24
existing underground nunes show that they produced 47.4 million tons of coal in 1997. Most of the finns
operating coal mines in the western arid/semiarid region are large, as defined by the Small Business
Administration (more than 500 employees). Based on Dun & Bradstreet information on parent finn
employment, only three of the surface mines and three of the underground mines are owned by small
finns’
EPA later determined that one of the surface mines profiled was already in the final reclamation stage and would not
be affected by the final rule; hence, only the remaining 46 surface mines were included in the analyses of costs and benefits.
‘Five surface mines and eight underground mines could not be classified by size of parent firm.
3-4
-------
3.2 Current Regulatory Requirements
This section describes the relevant state and federal requirements that currently apply to coal mine
operators affected by the final rule. This description provides the basis for determining how the final rule
will change compliance requirements, resulting in the costs, cost savings, environmental benefits, and
economic impacts that are estimated in subsequent chapters.
3.2.1 Current Effluent Guidelines
Discharges from coal mines are regulated as point sources under the Federal National Pollutant
Discharge Elimination System (NPDES), established under Section 402 of the Federal Clean Water Act.
EPA promulgated the effluent limitations guidelines and standards that are in effect today for coal mining
under 40 CFR part 434 on October 9, 1985 (50 FR 41296). Currently, there are four subcategories,
including: Coal Preparation Plants and Coal Preparation Plant Associated Areas, Acid or Ferruginous
Mine Drainage, Alkaline Mine Drainage, and Post-Mining Areas, along with a subpart for Miscellaneous
Provisions.
Under the existing rule, a remining operation is defined as a new source coal mine. No distinction is made
between new coal mining operations and remining operations, or between preexisting and new
discharges at reinining sites. Hence, the effluent limitations set by NPDES permit writers for all
discharges at remining operations must be at least as stringent as the federal new source performance
standards (NSPS) at 40 CFR part 434. The guidelines include numerical limits on iron (total), manganese
(total), pH, and total suspended solids (TSS).
The existing regulations for post-mining areas (subpart E) apply to all reclamation areas throughout the
United States, regardless of climate, topography, or type of drainage (i.e., acid or alkaline). Hence, the
effluent limitations set by NPDES permit writers for discharges from reclamation areas at western coal
mines must be at least as stringent as the federal BPT, BAT, and NSPS limitations at 40 CFR part 434.
The guidelines include numencal limits for settleable solids and pH, at 0.5 mI/L and 6 to 9 units
respectively.
3-5
-------
3.2.2 SMCRA
The Surface Mining Control and Reclamation Act passed in 1977 esiablished programs to control the
negative environmental impacts of surface coal mining. SMCR.A created the Office of Surface Mining
Reclamation and Enforcement in the Department of Intenor, and provided for two major programs. The
first establishes standards and procedures to prevent environmental degradation from active coal mining
and reclamation operations both surface and underground. The second is a reclamation program for
abandoned mine lands funded by fees on coal production, to reclaim land and water resources adversely
affected by pre-1977 coal mining and not adequately reclaimed. OSM has promulgated comprehensive
regulations to control surface coal mining and the surface effects of underground coal mining at 30 CFR
parts 700 et seq.
SMCRA requires that mine operators obtain mining penuits from OSM or a delegated state agency. The
existing permitting process under SMCRA is a site-specific process requiring baseline data to describe the
quality and quantity of both the affected ground and surface water. To be eligible, a permit must be dated
on or after August 4, 1977 and must be accompanied by a reclamation plan. To be approved, the
proposed surface mining operation must not further degrade any surface or ground water basins, and the
affected area must be capable of being reclaimed. If the mining permit is approved, the mining operators
must adhere to a number of OSM performance standards, and must accept all potential environmental
liabilities associated with the site, such as AMD and public health risks. The SMCRA nrles also
reference existing water quality laws and existing federal or state programs to regulate effluent
discharges.
Mining operators must post a performance bond payable to the federal government or the state, in an
amount sufficient to assure the completion of the reclamation plan if the woñc has to be completed by the
governing agency. The bond can only be fully released after the regulatoiy authority certifies that all
performance standards have been met and full reclamation of the site has occuned. Such a determination
is generally not made until the mine operation has been completed for five years in the east and midwest
regions, and JO years in the western region. However, the bond can be partially released at various
stages (as discussed in Chapter 4) if the reclamation plans are being met on schedule.
3-6
-------
Prior to the 1977 promulgation of SMCRA, some operators remined abandoned mine land because they
were held to less restrictive environmental standards given the already-poor environmental conditions at
the sites (Veil, 1993). In the process of remining, safety, aesthetics, and water quality conditions were
often improved. After passage of SMCRA, much of the rernining of the most degraded areas ceased,
because SMCRA shifted total liability for environmental impacts to the present operator of the site,
regardless of past practices. Operators were reluctant to accept liability, particularly for water quality
requirements, and instead mined virgin sites or sites without pre-existing discharges.
A number of amendments and changes to the SMCRA permitting program have been adopted to
encourage more reimning of AML Federal SMCRA regulations include less restrictive standards for
remming operations regarding topsoil, revegetation, and backfilling and grading. In addition, the Small
Operator Assistance Program (SOAP) (30 CFR 795) provides assistance to eligible small coal mine
operators, including rernining operators, by providing funding for site evaluations required to obtain a
permit. Operators are eligible if they intend to apply for a permit under SMCRA, and can demonstrate
that the probable total attributed annual production for all locations on which they are issued a surface
coal mining and reclamation permit will not exceed 300,000 tons. States are granted the authority to use
alternate criteria for determining operator eligibility so long as the grant request does not exceed the
amount that would be authorized under the federal SOAP provisions.
3.2.3 The Rahall Amendment
The Clean Water Act was amended by the Water Quality Act of 1987. The amendments added Section
301(p), commonly referred to as the Rahall Amendment, to provide incentives to encourage coal
remirnng. The Rahall Amendment allows the NPDES permit writers to issue pemils with site-specific
limits for iron, manganese, and pH for pre-existing discharges at remining sites where remining has the
potential to improve water quality. Technology-based limits for these pollutants are based on BPJ. These
modified limits may not exceed baseline levels in the pre-existing discharges, and discharges from the
remining operation may not violate any state water quality standards.
3-7
-------
To date, EPA has not established regulations or guidance implementing the Rahall Amendment. The final
Coal Reinining Subcategoiy rule will establish specific requirements for eligible sites consistent with the
Rahall Amendment provisions.
3.2.4 State Renuning Permit Programs
Many states have been delegated authority under SMCRA and the NPDES program, and several states
have established or are developing remining programs. Slate reinining panut teims and conditions must
follow provisions established in the SMCRA regulations, except where these provisions are modified by
the state and approved by the Secretazy of the Interior. The IMCC solicitation collected information on
twenty states’ reinining programs (IMCC, 1999). As of July 1999, seven of the twenty states responding
(Alabama, Kentucky, Maryland, Ohio, Pennsylvania, Virginia and West Virginia) had issued Rahall
permits, and another four states (Illinois, Indiana, Missouri, and Tennessee) had issued non-Rahall
renuning permits. Pennsylvania had issued by far the greatest number of Rahall permits (300), followed
by Alabama (10).
Pennsylvania has a particularly active ranining program. Pennsylvania has standardized requirements for
remining pernuts, and provides for a single application that covers both SMCRA and NPDES
requirements. Pennsylvania establishes BPJ limits for iron, manganese, and acidity for preexisting
discharges under ramming regulations that were approved by OSM and EPA in March 1986. Bond
release is contingent on the post-mining discharge having pollutant levels equal to, or less than, the pre-
rernining baseline. Vegetation must be restored to pre-remining levels as well. Applicants must provide
data on baseline water quality and quantity sufficient to charactenze baseline pollutant levels, and must
develop a pollution abatement plan that is integrated with the mining and reclamation plan. Appendix A
provides additional infonuation on state remining programs.
3-8
-------
3.3 Characterizing the Economic Baseline
3.3.1 Coal Remining
EPA estimated economic baseline conditions based on existing state and federal regulations and current
industiy practices. For reinining, EPA assumed economic baseline conditions to be reinining under a
Rahall permit, pursuant to Section 301(p), rather than comparing to compliance with cunent part 434
regulations. The Agency relied on information provided by the states on the number and acreage of AML
sites that are potential candidates for remining as well as information on Pennsylvania’s experience with
permitting under its active reinining program, to estimate the number of new remining sites with pre-
existing discharges that might be permitted each year under the final subcategoxy.
Specifically, this estimate was based on states’ responses to the IMCC survey, which included a request
for information on the number of potential remining sites in three categories: coal refuse piles, surface
mined sites, and underground mined sites. Table 3-1 provides EPA’s estimates of potential remining
operations per state (U.S. EPA, I 999b).
3-9
-------
Table 3-1: PotentIal Remining Operations by State
Totals 1,900 7,790
* denotes numbers calculated by EPA based on state estimate of potential remining acres
-- = no response
Source: US. EPA, 1999b.
In order to evaluate how many remining permits would be issued annually due to the new subcategory,
EPA evaluated the number of remining permits issued in Pennsylvania following state implementation of a
regulation that is similar to the linal remining nile. EPA believes that implementing the nile is likely to
have a similar effect on other states with remineable coal reserves and similar acid mine drainage
problems. In an average year, Pennsylvania issued permits to 0.36 percent of the potential remining sites
in the Commonwealth, with a maximum of 0.51 percent being issued in 1990. Therefore, EPA calculated
the number of sites potentially affected by assuming that each state would issue permits to 0.36 percent to
0.51 percent of their reported potential remining sites on an annual basis. Table 3-2 presents these
estimates.
State
Number of
Coal Refuse Piles
Number of
Surface
Mined Sites
NumberofUnderground
Mined Sites
AL
I
—
—
IL
30
10
12
IN
150
453
615
KY
200
400- 600
800-1,000
MD
10
75
75
OH
219
605*
4(3()()
PA
858
4,183*
53J*
TN
36*
1,210*
800
VA
400-450
750
800
WV
—
3
8,000
3-10
-------
Table 3-2: Estimated Reminmg Operations Permitted Annually
Coal Refuse Piles Surface Mined Sites Underground Mined Sites
Number Acres Number Acres Number Acres
Alabama 0 0 0 0 0 0
Illinois 0 1 0 1-2 0 2
Indiana 1 3-4 2 62-88 2-3 84-119
Kentucky 1 4-5 2-3 68-97 35 123174
Maryland 0 0 0 10- 15 0 10- 15
Ohio 1 4-6 2-3 83-117 14-20 2,160-3,060
Pennsylvania 3-4 15-22 15-21 572-811 3-4 114-161
Tennessee 0 1 4-6 166-235 3-4 109-155
Virginia 2 8-11 3-4 103-145 3-4 109- 155
- West Virginia 0 0 0 0- I 0 0
Total SItes 7 - 10 35-49 28 -40 1,066 - 1,510 29 -41 2,712 - 3,840
Permitted Each
Year
Source: U.S. EPA, 1999b.
Entries may not sum to totals due to rounding
Although EPA estimated that the Coal Remining Subcatcgoiy would be applicable to 64 to 91 remining
sites and 3,810 to 5,400 acres annually, EPA projects that fewer sites would realize costs or benefits from
the final rule. The Commonwealth of Pennsylvania has an advanced remining program, and EPA does
not believe that the final rule will have a measurable impact on Pennsylvania’s remining activities.
Therefore, EPA did not include Pennsylvania’s remining sites in the estimation of costs or benefits.
EPA’s cost and benefit analysis were based on a total of 43 to 61 sites representing 3,100 to 4,400
permitted acres each year. EPA assumed that 57 percent of the acres permitted (1,800 to 2,500 acres)
would actually be reclaimed each year based on a study of 105 remining reinining permits in Pennsylvania
(Hawkins, 1995). The study found that on average, a remining site had 67 AML acres, of which 38 acres
(or 57 percent), were actually reclaimed. Table 3-3 shows the various estimates EPA used in the
economic and environmental impact analysis.
3-Il
-------
Table 3-3: Annual Estimates of Affected Remhdng
Economic and Environmental Impact Analysis
Sites Used in the
Additional Sites Permitted Number of Sites
Acres
Used In Analysis of:
All types, all states
(initialestimate) 64-91
3,812-5,401
All types, excluding PA 43-61
3,111 - 4,407
Monitoring costs for selected
states; NPDES pennitting
authority costs
I O°h of surface & under- ground
sites only (no coal refuse piles),
excluding PA 3.9- 5.6
309-438
Costs of additional BMPs
Additional acres reclaimed:
(57% of acres permitted, all
types excluding PA)
1,773 - 2,512
Benefits from recreational use of
reclaimed land
Additional acres reclaimed
expected to have significant
decreases in AMD pollutant
levels (37.6- 44.4% of
additional reclaimed acres)
667- 1,115
Benefits from recreational use of
improved water bodies; Aesthetic
improvements in waler bodies;
Nonuse benefits
As discussed in Chapter 8, EPA evaluated evidence on the impacts of remining on water quality and on
various hazards posed by abandoned mine lands to estimate environmental impacts of the final
subcategoiy rule. This analysis included a detailed review of BMP performance, loadings and water
quality impacts for a sample of reniining sites, as well as review of other literature on the impacts of
remining. Based on this evidence, the Agency was able to quantify and monetize some of the benefits of
additional reinining induced by the final subcategoiy rule using a benefits transfer approach. The Agency
was not able to quantify other important potential benefits of the rule, however, including human health
and safety impacts.
3.3.2 Western Alkaline Coal Mining
EPA prepared the document Coal Remining and Western Alkaline Mining: Economic and
Environmental Profile (U.S. EPA, 1999e) in support of the rule. The report provides industiy profile
3-12
-------
information on the 47 surface coal mines and 24 underground coal mines initially believed to be in the
scope of the new subcategory. However, EPA determined that one of the surface mines profiled was
already in the final reclamation stage and would not be affected by the final rule; hence, only the 46
remaining surface mines were included in the analyses of costs and benefits.
As discussed in Chapter 4, EPA believes that the only incremental cost atinbuted to the final subcategory
is associated with watershed modeling requirements. Information provided by the Office of Surface
Mining indicates that a typical underground operator would not incur any additional modeling costs as a
result of the final nile due to the small acreage and lack of complexity associated with these reclamation
areas (U.S. DOl, 1999a, 1999b). EPA projects that cost savings for this subcategory would result from
lower capital and operating costs associated with implementing the required BMP plans, and from an
expected reduction in the reclamation bonding period. The methodologies used to estimate the costs and
cost saving are discussed in Chapter 4.
Although EPA believes that compliance with the final rule would result in operational savings for many
underground produceLs, EPA did not estimate the savings due to data limitations. The industiy profile
data submitted by the WCMWG did not provide infonnation on disturbance acreage, mine life, or bond
amounts for the underground mines, and the model mine analysis addressed conditions typical of surface
mines rather than underground mines. It was therefore not possible to estimate cost savings associated
with the subcategory for reclamation of surface areas at underground mines. However, any savings are
likely to be small given the limited acreage and lack of complexity associated with these reclamation
areas. Hence, EPA assumes that the final rule would be cost-neutral for the underground operators. The
remainder of this report considers only the 46 active surface mines in its discussion.
The WCMWG model mine analysis on comparative sediment loadings, as well as other evidence from the
literature, supported EPA’s analysis of the environmental impacts of the new subcategory.
EPA developed a partial monetaly estimate of expected benefits attributed to the final regulation for two
categories: land-related benefits and water-related benefits. The estimated water-related benefits include
the value of enhanced recreational opportunities from improved water flow conditions. The land-related
benefits result from reduced land disturbance due to the reduced use of sedimentation ponds. The
benefits estimates do not include a number of benefit categories, including nonuse ecological benefits.
3-13
-------
Chapter 4
Industry Compliance Costs
4.0 Introduction
This chapter presents EPA’s analysis of the costs and cost savings to the coal mining industry attributed to
the final rule. These are the changes in compliance costs associated with differences between current
requirements and requirements under the new subcategories.
EPA estimated compliance costs for two additional requirements associated with the final Coal Remining
Subcategozy: (I) monitoring costs; and (2) pollution abatement plan costs. The Agency evaluated current
state requirements for operations permitted under the Rahall provision and calculated the sample
collection costs that exceed the current state requirements based on estimates of typical sampling,
analysis and monitoring device costs. EPA also estimated the costs associated with developing and
implementing a pollution abatement plan. In many cases, EPA believes that the requirements for the
pollution abatement plan will be satisfied by an approved SMCRA plan. However, EPA recognizes that
some operators may be required to implement additional or incremental BMPs under the final rule beyond
what is included in a SMCRA-approved pollution abatement plan. EPA developed a general estimate of
the potential costs of these additional BMPs.
For the Western Alkaline Coal Mining Subcategoiy, EPA believes that plans developed to comply with
SMCRA requirements will usually fulfill the new requirements for sediment control plans. The
requirement to use watershed modeling techniques is not inconsistent with OSM reclamation plans. While
OSM does not specifically require modeling most coal mine operators already perform watershed
modeling to support their SMCRA permit application that is sufficient to meet the new subcategory
requirements. However, some incremental costs may occur where the rule increases model complexity.
EPA developed a conservative estimate of these costs by assuming that all existing surface mines would
need to perform additional modeling. EPA also estimated the cost savings for this subcategoiy expected
4-1
-------
to result from lower capital and operating costs associated with implementing the BMP plans, and from
an expected reduction in the reclamation bonding period.
Except where noted, all costs are reported in 1998 dollars; the present value of costs that are incurred in
the future are calculated using a 7 percent discount rate; and annualized costs are developed using an
annualization period of 10 years and a discount rate of 7 percent. The following formula was used to
calculate annualized costs and cost savings:
AnnualizedCosl=PVx rx (1 +r )
(l4 r)N_ I
where
PV = Present value of compliance costs
r Discount rate (7 percent in this analysis)
n = Amortization period (10 years)
4.1 Coal Remining
4.1.1 Methodology
EPA projected that states will permit 43 to 61 new remining sites each year under the new subcategory
(see Chapter 3). EPA projected costs for each remining site by calculating the cost of added
requirements beyond those currently required for Rahall permits. These include the cost of increased
monitoring requirements for determining baseline, the cost of potential increases in compliance
monitoring requirements, and the potential costs associated with implementing the required pollution
abatement plan.
4-2
-------
4.1.2 Monitoring Costs
To assess the increased monitoiing requirements of the final rule, EPA evaluated current state
requirements for operations permitted under the Rahall provision and calculated the sample collection
costs that exceed the current state requirements. Current state sample collection requirements for
detenuining and monitoring baseline are included in Appendix A.
Under the fmal nile, EPA is requiring that operators conduct one year of monthly sampling to characterize
the baseline pollutant levels for iron (total), manganese (total), acidity, and TSS. Although most slates
with remining activities have similar requirements, renuning sites in Alabama and Kentucky will be
required to add six samples annually. EPA did not have data for Illinois, Indiana, or Tennessee, because
the remining operations that occur in these states do not incorporate Rahall provisions for pre-existing
discharges. For these states, EPA has conservatively assumed that 12 additional samples will be
necessaiy for monitoring annually, and that remining operators would have to purchase and install flow
weirs to comply with the baseline determination and monitoring requirements.
Although EPA is not requiring a specific monitoring frequency to demonstrate compliance, EPA has
assumed monthly compliance monitoring for costing purposes. Most states already have similar
requirements, with the exception of Ohio, who currently requires quaiterly sampling Again, EPA did not
have data for Illinois, Indiana, or Tennessee, because these states do not incorporate Rahall provisions in
their rernining permits. EPA has conservatively assumed that an additional 12 compliance monitoring
samples per year would be required for these states and has costed this requirement for five years.
Because each remining site will typically have more than one pre-existing discharge, EPA reviewed
Pennsylvania remining sites to estimate the average number of pre-existing discharges per site. EPA
used this calculated average of four pre-existing discharges per site for estimating baseline determination
and compliance monitoring costs. Tables 4-1 and 4-2 show the expected incremental monitoring costs
required for each state (low and high estimates respectively). These represent an upper bound estimate
of additional monitoring requirements based on the assumptions discussed above.
4-3
-------
Table 4 -1: EstImated Increase in Annual Monitoring Costs: Low Estimate
State
AL
IN 5 *
KY
MD
OH
PA
TN ” 5
VA
WV
Baseline
Monitoring
Compliance
Monitoring
Annual
Number
of Sites
Permitted
Total
incremental Cost
Baseline
Monitoring
Compliance
Monitoring
Total
Number of
Additional
Samples/Year
Increased
Cost/Mine
(PV)*
Number of
Additional
Samples/Year
Increased
Cost/Mine
(PV)
6
$1,128
0
$0
0
$0
$0
$0
12
$6,928
12
$9,900
0
50
$0
$0
12
$6,928
12
$9,900
4
$27,712
$9,024
$36,736
6
51,128
0
$0
6
$6,768
$0
$6,768
0
50
0
$0
1
$0
$0
$0
0
SO
8
56,600
17
$0
$23,568
$25,568
0
$0
0
50
21
$0
$0
$0
12
$6,928
12
$9,900
7
$48,496
$15,792
$64,288
0
50
0
50
7
¶0
$0
SO
0
$0
0
50
0
$0
$0
so
64 $82,976 $50,384 $133,360
Total
- -
• Number of additional samples per year $188/sampling period ($47 per sample * 4 averege sampling points)
** Number of additional samples per year 5825 present value of annual compliance sampling {piessnt ‘va’ue of 5160 per year for 5 years 7%)
Baseline requirements .ic1 availeble assumed to require 12 addilionat samples per year forbaselino and compliance monitodng plus 4 flow weirs at $1168 per weir.
4-4
-------
Table 4-2: EstImated Increase In Annual Monitoring Costs: Bigh Estimate
State
AL
IL ”
N” *
KY
MD
OH
PA
TN”
VA
WV
Baseline Monitoring
Number of Increased
Additional Cost/Mine
Samples/Year (PV) ’
6 51,128
12 $6,928
12 $6,928
6 $1,128
O 50
o so
o so
12 $6,928
o so
o so
Compliance Monitoring
Number of Increased
Additional Cost/Mine
Samples/Year (PV)**
O $0
12 $9,900
12 $9,900
o so
o so
8 $6,600
o so
12 $9,900
o so
0 $0
Total Incremental Cost
Annual
Number
of Sites
Permitted
0
0
6
8
I
25
Baseline
Monitoring
Compliance
Monitoring
Total
$0
$0
$0
$0
$0
$0
$41,568
$13,536
$55,104
$9,024
$0
$9,024
$0
$0
$0
$0
$37,600
$37,600
30
$0
$0
$0
10
$69,280
$22,560
$91,840
10
$0
$0
$0
0
$0
$0
$0
91 $119,872 $73,696 $193,568
Total
—
* Number of addilional samples per year SI 88lsampling period ($47 per sample * 4 average sampling points)
‘ Number ofadditional samples per year * $825 present value of annual compliance sampling (present value of5160 per year for 5 years® 7%)
‘‘ Baseline requirements not available: assumed to require 12 additional samples per year for baseline and compliance monitoring plus 4 flow weirs at $1,168 per weir.
4-5
-------
As shown in Tables 4-1 and 4-2, the total annual incremental monitoring costs are estimated to be in the
range of $133,500 to $193,500. Of this, between $83,000 and $120,000 is associated with incremental
baseline monitoring requirements and between $50,500 and $73,500 results from incremental compliance
monitoring during a five year remining period.
4.1.3 Pollution Abatement Plan Costs
In addition to monitoring costs, remining operators must develop and implement a site-specific pollution
abatement plan for each renlining site. In many cases, EPA believes that the requirements for the
pollution abatement plan will be satisfied by an approved SMCRA plan. However, EPA recognizes that
some operators may be required to implement additional or incremental BMPs under the final rule beyond
what is included in a SMCRA-approved pollution abatement plan. EPA developed a general estimate of
the potential costs of additional BMPs based on review of existing remining permits contained in the
EPA’s Coal Remining Database, and on information provided in the Coal Remining Best Management
Practices Guidance Manual (U.S. EPA, 2000d).
EPA determined that the most likely additional BMP that NPDES permit writers might require would be a
one-time increase in the amount of alkaline material used as a soil amendment to prevent the formation of
acid mine drainage. EPA assumed that an average mine facility requiring additional BMP effort would
need to increase its alkaline addition by a rate of 50 to 100 tons per acre to meet the additional NPDES
permit review requirements. Finally, EPA estimated an average cost for alkaline addition of $l2.90hon,
and assumed that 10 percent of surface and underground remining sites would be required to incur these
additional BMP costs. 7 Because the typical BMP for coal refuse piles is simply removal of the pile, EPA
believes that no incremental BMP costs would be incurred for these sites.
EPA assumed that ten percent of the surface and underground remining site acreage in states other than Pennsylvania
would require addition of alkaline material.
4-6
-------
Based on EPA’s estimate that between 309 and 438 acres could require additional alkaline addition each
year, the estimated annual cost of additional BMP requirements would range from $199,500 to $565,000:
(3,091 acres in remining * 10 percent requiring alkaline addition *50 tons alkaline material per
acre * $12.90 per ton for alkaline material); and
(4,380 acres in reinining * 10 percent requiring alkaline addition * tOO tons alkaline material per
* $12.90 per ton for alkaline material).
4.1.4 Total Annual Compliance Costs for the Coal Reminrng Subcategory
The estimated annual incremental costs attributed to the final rule range from $333,000 and $758,500 per
year. This cost includes $133,500 to $193,500 in estimated incremental monitoring costs, and $199,500 to
$565,000 in estimated additional BMP effort per year. These costs are based on EPA’s estimates of
future remining, and would most likely be incurred by new remining operations. Table 4-3 summarizes the
incremental costs associated with the new subcategory.
Table 4-3: Annual Costs for the Coal Reminlug Subcategory
Monitoring Costs $133,500- $193,500
Additional BMP Effort $199,500- $565,000
Total Compliance Costs $330,000 - $758,500
4.2 Western Alkaline Coal Mining
4.2.1 Methodology
The cost impacts of this subcategory will vaty, depending on the site-specific conditions at each eligible
coal mine. However, based on data and information gathered to date, EPA believes that the costs of
reclamation under this rule will be less than or equal to reclamation costs under the existing effluent
guidelines for each individual operator, and thus, for the subcategozy as a whole.
4-7
-------
EPA expects that the sediment control plan will consist entirely of materials generated as part of the
SMCRA permit application. The SMCRA permit application requires that a coal mining operator submit a
reclamation plan, documentation and analysis to OSM or the permitting authority for approval. Based on
these requirements, EPA believes that plans developed to comply with SMCRA requirements will fulfill
the requirements for sediment control plans. The requirement to use watershed modeling techniques is
not inconsistent with OSM reclamation plans. While OSM does not specifically require modeling, coal
mine operators already perform watershed modeling to support their SMCRA permit application that is
sufilcient to meet the final requirements. Thus, EPA expects no coal mine will incur incremental
modeling costs to develop its sediment control plan. However, some incremental costs may occur where
the rule increases model complexity. As discussed below, these costs would be offset by reduced
sediment control costs associated with implementing the required BMP plans and savings resulting from
an expected reduction in the reclamation bonding period.
4.2.2 Watershed Modeling Costs
As discussed above, EPA believes that some operators may incur incremental watershed modeling costs
where the final nile increases model complexity. Information provided by OSM indicates that a typical
surface mine operator may incur a one-time additional cost of zero to $50,000 to meet the modeling
requirements (U.S. DO!, 1999a, 1999b). This figure represents the additional modeling effort attributed to
the final requirements; it does not represent the total cost associated with watershed modeling. Although
most sites would not incur additional modeling costs, EPA conservatively assumes that all 46 existing
surface operators would incur additional modeling costs of $50,000. The $50,000 estimate represents an
annualized cost of 57,119 per mine, resulting in a total cost estimate of $327,000. These costs would be
offset by the cost savings discussed below.
4.2.3 Reduced Sediment Control Costs
EPA projects that cost savings would result from lower capital and operating costs associated with
implementing BMPs relative to the predominant use of sedimentation ponds. The costs savings for
sediment controls based on BMPs were calculated for three representative model mines differentiated by
geographic region: Desert Southwest (DSW), Inteimountain (lM), and Northern Plains (NP). The cost
4-8
-------
models were submitted by the Western Coal Mining Work Group (WCMWG, I 999a, 2001) and are
discussed in detail in the Development Document for Final Effluent Limitations Guidelines and
Standards for the Western Alkaline Coal Mining Subcalegory (US. EPA, 2001). The cost estimates
for each model mine relied on data taken from case study mine permit applications, mine records,
technical resources, and industry experience. The models estimated capital costs (design, construction,
and removal of ponds and BMPs) and operating costs (inspection, maintenance, and operation) over the
anticipated bonding period.
EPA extrapolated from the WCMWG model mine analyses and industry profile information to estimate
savings in sediment control costs for the subcategoiy. EPA identified all surface mines in the Western
Alkaline region and classified them by region within the subcategoay (DSW, IM, or NP). Cost savings for
reclamation at each mine were calculated by extrapolating the cost savings per disturbed acre calculated
for the appropriate modtl mine. Individual mines may achieve lower or higher savings per acre than the
savings estimated for its associated model mine due to site-specific conditions. To the extent that this
occurs, EPA’s estimate of total cost savings may be over- or underestimated.
Table 4-4 presents the sediment control costs and the discounted present value of those costs as
estimated by WCMWG for post-mining reclamation at each of the three model mines under both the
existing guideline and the new subcategory. Costs are discounted at a seven percent real rate over the
ten year expected reclamation period modeled for the current guideline. The present value of cost
savings for the DSW model mine is expected to be $671,897 ($1,760 per acre) under the new
subcategoiy, about 40 percent of costs under the existing guideline. For the IM model mine, the present
value of expected cost savings is $198,866 ($522 per acre), about 24 percent of costs under the existing
guideline. Finally, the NP model mine is expected to achieve a present value of cost savings of $235,377
($617 per acre) under the new subcategory, a 26 percent savings compared to the current guideline.
4-9
-------
Table 4-4:
Model Mine Reclamation Sediment Control Corn and
Present Value of Sediment Control Savings per Acre Reclaimed
Current Effluent Guideline versus Proposed Sabcategory (1998 dollars)
DFSERT SOIJrR WEST REGION
Current
Proposed
Total
Present
Total
Present
Capital &
Value of
Capital &
Value of
Operating
Total
Operating
Total
Year
Capita)
Operating
Costs
Costs
Capital
Operating
Costs
Costs
I
$975,435
$15,384
$990,819
$990,819
$760,816
$3,300
$764,116
$764,1l6
2
$2,720
$142,804
$145,524
$136,004
$43,577
$103,368
$146,945
$137,332
3
$0
$190,181
$190,181
$166,112
$0
$59,876
$59,876
$52,298
4
$0
$88,956
$88,956
$72,615
$0
$77,895
$77,895
$63,586
5
$0
$26,231
$26,231
$20,011
$0
$14,147
$14,147
$10,793
6
$0
$161,999
$161,999
$115,503
—
—
—
7
$0
$15,269
$15,269
$10,175
—
—
—
—
8
$0
$15,269
$15,269
$9,509
—
—
—
9
$0
$133,377
$133,377
$77,626
—
—
—
10
$171,607
$15,269
$186,876
$101,648
—
—
—
—
Total
$1,149,761
$804,739
$1,954,501
$1,700,021
$804,393
$258,586
$1,062,979
$1,028,124
Present Value of Total Cost Savings over 10 Years
$671,897
AcresperModelMine
381.8
Present Value of Total Cost Savings per Acre over 10 Years
$1,760
4-10
-------
Table 4-4 (continued):
Model Mine Reclamation Sediment Control Costs and
Present Value of Sediment Control Savings per Acre Reclaimed
Current Effluent Guideline versus Proposed Subcategory (1998 dollars)
Current
Proposed
Total
Present
Total
Present
Capital &
Value of
Capital &
Value of
Operating
Total
Operating
Total
Capital Operating
Costs
Costs
Capital
Operating
Costs
Costs
S479 458 $10,777
$490,235
$490,235
$428,315
$3,677
$431,992
$431,992
2 843,577 $65,142
$108,718
$101,606
$43,577
$58,065
$101,642
$94,992
3 $0 $36,230
$36,230
$31,645
$0
$29,142
$29,142
$25,454
4 SO $67,818
$67,818
$55,359
$0
$60,808
$60,808
$49,637
5 $0 $45,677
$45,677
$34,847
$53,049
$3,563
$56,612
$43,189
6 SO $41,310
$41,310
$29,453
—
—
—
—
7 $0 $10,663
$10,663
$7,105
—
—
—
—
8 $0 $10,663
$10,663
$6,640
—
—
—
—
9 $0 SL I,698
$11,698
$6,808
—
—
—
—
10 $134,550 $13,319
$147,869
$80,431
—
—
—
—
Total $657,585 $313,295
$970,881
$844,130
$524,940
$155,255
$680,195
$645,264
Present Value of Total Cost Savings over 10 Years
$198,866
Acres per Model Mine
Present Value of Total Cost Savings per Acre over
10 Years
381.2
$522
4.11
-------
Table 4-4 (continued):
Model Mine Reclamation Sediment Control Costs and
Present Value of Sediment Control Savings per Acre Reclaimed
Current Effluent Guideline versus Proposed Subcategory (1998 dollars)
NORTKERN PLAINS REGEON
Current
Proposed
Year Capital Operating
Total
Capital &
Operating
Costs
Present
Value of
Total
Costs
.
Capital
Operating
Total
Capital &
Operating
Costs
Present
Value of
Total
Costs
I $513,552 $11,682
2 $43,577 $66,628
3 $0 $37,426
4 $0 $68,723
5 $0 $46,582
6 $0 $42,408
7 $0 $11,568
8 $0 $11,568
9 $0 $12,699
10 $140,054 $14,224
Total $697,183 $323,508
$525,234
$110,204
$37,426
$68,723
$46,582
$42,408
$11,568
$11,568
$12,699
$154,278
$1,020,691
$525,234
$102,995
$32,689
$56,098
$35,537
$30,236
$7,708
$7,204
$7,391
$83,917
$889,010
$432,631
$43,577
$0
$0
$57,317
—
—
—
—
—
$533,525
$3,677
$58,646
$29,433
$60,808
$3,563
—
—
—
—
—
$156,126
$436,309
$102,223
$29,433
$60,808
$60,880
—
—
—
$689,651
$436,309
$95,535
$25,708
$49,637
$46,445
—
—
—
$653,633
Present Value of Total Cost Savings over 10 Years
$235,377
Acres per Model Mine
381.2
Present Value of Total Cost Savings per Acre over
10 Years
$617
4-12
-------
To estimate annual reclamation cost savings for existing western alkaline surface mines, EPA identified
each of the 46 mines in cwrent production by region. For those mines with data available, EPA divided
the projected disturbed acreage by the expected remaining mine life to estimate the annual acres
disturbed at each mine site. This information was available for 26 mines: two DSW mines, one IM mine,
and 23 NP mines. For each of these 26 mines, EPA multiplied estimated annual disturbed acres at the
mine by the present value of projected reclamation savings per acre for that region’s model mine ($1,760
for the DSW region, $522 for the IM region, and $617 for the NP region).
The 20 mines without data available on expected mine life and disturbed acreage are all located in the NP
(18 mines) and IM (two mines) regions. EPA used the avetage of 305 expected disturbed acres per year
for the 24 IM and NP mines with available data to estimate reclamation cost savings. 8 Average disturbed
acres were multiplied by the present value of savings per acre for the model mine in that region and
totaled. The two IM mines without data are expected to save $0.3 million annually, while annual savings
for the 18 NP mines without data are expected to total $3.4 million. Estimated annual reclamation cost
savings total $12.7 million for the 46 producing surface mines in the Western Alkaline subcategory. Table
4-5 summazizes the estimate of reclamation cost savings for the Western Alkaline subcategory.
8 EPA used only IM and NP mines to calculate average expected disturbed acres for the following reasons. First, all
mines without expected disturbance data are in the IM and NP regions, and none are in the DSW region. Second, average
expected disturbed acres for IM and NP mines with data are about 25 percent of the average for the two DSW mines. Third, the
largest mine with data in the Th4 and NP regions is only half as large as the smallest DSW mine. Because of this apparent
regional difference in mine size, EPA excluded DSW mines from the calculation of average expected disturbed acres. Data were
insufficient to support a further distinction between average disturbed acres for IM and NP mines.
4-13
-------
Table 4-5: Estimated Subcategory Sediment Co troI Cost Savings
Average
NPV of
Expected
Expected
Reclamation
Disturbance
Disturbance
Savings
Acres
Acres/Year
per Acre
Region
DSW
DSW
IM
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
NP
Mine
Life
(years)
6
12
26
16
15
16
6
28
20
17
18
30
12
18
18
18
24
14
14
9
28
15
25
12
12
32
7,236
16,351
4,960
3,810
1,161
6,300
500
8 , 579
875
4,485
2,085
11,300
4,546
11,000
6,216
5,172
12172
6,631
7,275
2,000
1,886
8,207
10,429
5,765
3,576
2,129
Estimated
Annual
Reclamation
Savings
(x $1,000)
$2,122
$2,398
$100
$147
$48
$243
$51
$189
$27
$163
$72
$233
$234
$377
$213
$177
$313
$292
$321
$137
$42
$338
$258
$297
$184
$41
1,206
1,363
191
238
77
394
83
306
44
264
116
377
379
611
345
287
507
474
520
222
67
547
417
480
298
67
$1,760
$1,760
$522
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
$617
Total for 26 Mines with Data;
$9,017
21M Mines withMissing Data.
305
5522
$318
18 NP Mines with Missing Data:
305
5617
$3,386
Total Estimated Annual Savings.
$12721
4-14
-------
Comparison with Estimated Cost Savings under the Proposed Guideline
The economic impact analysis for the proposed role estimated annual reclamation cost savings of $30.8
million, significantly larger than the estimated $12.7 million annual savings for the final rule, as presented
above. The primary reason for the magnitude of this revision is differences in regional characteristics of
surface mining within the Western Alkaline subcategozy. The estimate for the proposed rule was based
on a single model mine from the DSW region. The results for this model mine were scaled to reflect all
46 mines in the subcategoty. However, compared to the region specific model mine information now
available for the IM and NP regions DSW mines appear to be significantly larger incur greater
reclamation costs under current guidelines, and are projected to receive larger savings per acre under the
proposed guidelines than other mines in the subcategory.
In summary, reclamation cost savings for the proposed rule were based on:
• I model mine representing:
—46 mines, 26 with expected disturbed acres data available,
— 380 expected distutbed acres per mine,
— $1,760 NPV of reclamation savings per acre,
—$30.8 million reclamation cost savings (46 mines x 380 acres x $1,760 per acre).
Revised reclamation cost savings for this final rule are based on:
• I model mine representing:
—2 DSW mines, both with expected disturbed acres data available,
— 1,280 expected disturbed acres per mine,
—$1,760 NPV of reclamation savings per acre,
—54.5 million reclamation cost savings (2 mines x 1,280 acres x $1,760 per acre).
• I model mine representing:
—3 IM mines, I with expected disturbed acres data available,
— 305 expected disturbed acres per mine,
— $522 NPV of reclamation savings per acre,
—$0.5 million reclamation cost savings (3 mines x 305 acres x $522 per acre).
• 1 model mine representing:
—41 NP mines, 23 with expected disturbed acres data available,
— 305 expected disturbed acres per mine,
—$617 NPV of reclamation savings per acre,
4-15
-------
— $7.7 million reclamation cost savings (41 mines x 305 acres x $617 per acre).
The decrease in total estimated annual reclamation savings is primarily due to the lower savings per acre
at IM and NP mines that compose the majority of the subcategoiy. Had EPA used the higher average
annual expected disturbed acres from the proposed rule in this analysis (380 acres instead of 305 acres),
expected annual cost savings would have totaled about $13.6 million. Thus,most of the reduction in
savings relative to those estimated in the EA for the proposed rule can be attributed to lower per acre cost
savings in the IM and NP mines.
4.2.4 Savings Associated with Earlier Bond Release
EPA also calculated cost savings that may result due to earlier Phase 2 bond release. Under SMCRA
requirements, permit applicants must post a reclamation bond to ensure that the regulatory authority will
have funds to reclaim the site if the permitee fails to complete the reclamation plan approved in the
permit. Pernütees may apply for release of all or part of the bond as reclamation is completed. The
regulations recognize three phases of reclamation for purposes of bond release:
• Phase 1: backfiuing, regrading and drainage control;
• Phase 2: topsoil replacement and establishment of vegetation; and
• Phase 3: meeting the revegetation success standards and completing the revegetation
responsibility period.’
The amount of bond release at each phase varies from site to site. Typical stages of bond release in the
West are 60 percent released at the end of Phase 1, an additional 25 percent released at the end of Phase
2, and the fmal 15 percent released at the end of Phase 3.’°
The OSM hydrology standards to release performance bonds at Phase 2 at 30 CFR part 800.40(cXl)
require compliance with the existing effluent standard. The use of BMPs under the new subcategoiy is
9 The revegetation responsibility period is ten years in the and/semiarid west.
‘° Personal communication with Wayne Erickson, Habitat Management, Inc. OSM regulations require that 15 percent
of the bond amount remain in place until the end of the revegetation responsibility period.
4-16
-------
expected to allow earlier Phase 2 bond release, because less time will be needed to meet the hydrology
bond release requirements. According to information provided by WCMWG (1999a), meeting the existing
guidelines in the and/semiarid west may take 10 years or longer, and may require significant topographic
modifications and excessive maturation of vegetation. In addition, sampling to demonstrate compliance
with existing standards is difficult, given the infrequent and flash nature of flows in the region. The BMP-
based approach for this rule uses the inspection of BMP design, constniction, operation and maintenance
to demonstrate compliance instead of sampling and analysis of surface water drainage. The report
estimates that the BMP-based approach would reduce the time it takes reclaimed lands to qua1i1 for
Phase 2 bond release by about five years.
The savings associated with earlier Phase 2 bond release will vaiy among individual mines, depending on
the bond amounts and on the type of bond. The cost incurred by mine operators to maintain bonds varies
according to the type of bond. For example:
• interest must be paid on certificates of deposit;
• Surety bonds require an annual payment based on the size of the bond — typical annual
fees for western mines are reported to range from $3.75 to $5.50 per $1,000 in bond
al’
• Self-bonding requires that companies submit periodic reports, and may prevent the use of
some company assets as collateral for other financing or may prevent the sale of assets.
A survey conducted by the Office of Surface Mining in 1995 found that
approximately 75 percent of the bonds posted for coal mining operations were corporate
surety bonds. Small operations with bond amounts in the tens of thousands of dollars tend to use
certificates of deposit and other assets. Bond amounts in excess of tens or hundreds of millions
of dollars are typically in the form of corporate surety bonds (U.S. DOl, I 998c).
Personal communication with Wayne Erickson, Habitat Management, Inc.
4-17
-------
EPA used a number of simplifying assumptions about the tuning of reclamation and bond release and the
cost of maintaining reclamation bonds to estimate the savings associated with earlier Phase 2 bond
release. The WCMWG industiy profile provides information necessaiy to calculate associated bond
savings (reclamation bond amounts, disturbance acreage, and mine life) for twenty-six mines. EPA
calculated savings for each these mines using the following assumptions:
The amount of bond released at the end of Phase 2 is equal to 25 percent of the reported
bond alnount
• All bonds are surety bonds, with annual fees of between $3.75 and $5.50 per thousand;
• Mining under the currentpeamitis assumed tocndinyear5. Savingsiscalculatedas the
difference between the present value of maintaining the bond for 10 y after Phase 2
bond release (i.e., in year 15) and the present value of maintaining it for 5 years (i.e., in
year 10). Costs are annualized over the 5 year permit period using a 7 percent discount
rate.
The calculation steps are as follows:
(1) Calculate the Percent of Expected Disturbed Acres Bond Occumng in 5 Year Permit Peiiod :
= 5 year permit period / expected mine life
(2) Calculate the Phase 2 Bond Amount Attiibuted to Permit Period Disturbed Acres :
=25 percent of total bond amount * percent expected disturbed acres in permit period
(3) Calculate the Annual Cost of Maintaining the Phase 2 Bond Amount :
= Phase 2 bond amount (in thousands of dollars) * $3.75 (low estimate) or $5.50 (high estimate)
annual surety bond fee per thousand dollars;
(4) Calculate the Present Value of Savings due to Earlier Phase 2 Bond Release :
= present value of avoided payment of surety bond costs in years II through 15, discounted at 7
percent real rate;
4-18
-------
(5) Annualize the Present Value of the Avoided Surety Bond Costs :
annualized present value over the 5 year permit period, at 7 percent real rate.
The simplified assumptions regarding the timing of different stages of reclamation, as well as the
assumptions regarding the type and cost of bonds, may under- or overstate actual savings. The analysis
understates total savings by ignoring savings associated with reclamation bonds posted under future
permits, but may overstate costs by assuming that all bonds obtained are surety bonds rather than some
obtained through self-bonding. In addition, the timing of Phase 2 bond release will vary from site to site
depending on the nature of the BMPS used and the success in establishing revegetation. This calculation
assumes that mines will achieve Phase 2 bond release five years earlier under the new subcategory than
would otherwise occur, but the actual results may differ from mine to mine.
EPA made a number of assumptions to estimate early Phase 2 bond release for the 20 mines that did not
have sufficient data available. Of these 20 mines, data on total bond value was available for 13 mines, but
needed to be estimated for seven mines (one IM mine and six NP mines). For the seven mines with
missing data, EPA used the average bond value (weighted by the percent expected disturbed acres in the
five year permit period) from the 24 IM and NP mines with available bond value, mine life, and expected
disturbed acres data. The average bond value used for each of these seven mines was $49.5 million.
EPA used the average percent expected disturbed acres in the five year permit period (31.6 percent)
from the 24 IM and NP mines with complete data available for the 20 mines without disturbed acres and
mine life data.
Table 4-6 presents the lower and upper estimates of annual bond savings in the Western Alkaline
subcategoiy. The early release bond savings for the 26 mines with complete data are projected to range
from $0.2 to $0.3 million when annualized at seven percent over the five year permit period. EPA
estimates that early release bond savings for the remaining 20 mines without complete data ranges from
$0.1 to $0.2 million. Projected bond savings for the entire subcategory total from $0.3 to $0.5 million.
These estimated bond savings are about 2 percent less than the estimated bond savings calculated for the
proposed rule. The difference in the two estimates is entirely attributable to lower expected disturbed
acres per permit period in IM and NP mines.
4-19
-------
Table 4-6: Esti mated Savbsgs from Early Phase 2 Bond Release
Exected
Disturbance Phase 2
Bond Acres per Bond
Value Permit Release
Region ($1,000) Period ($1,000)
LOWER BOUND ESTIMATE
($3.75 per $1,000 surety bonds)
UPPER BOUND ESTIMATE
($5.50 per $1,000 surety bends)
PV of Early Annualized
Annual Phase 2 Value of
Surety Bond Release Bond Release
Cost ($1,000) ($1,000)
PV of Early Annualized
Annual Phase 2 Value of
Surety Bond Release Bond Release
Cost ($1,000) ($1,000)
DSW $6,198 83.3% $1,291
DSW $79,854 41.7% $8,318
IM $46,838 19.2% $2,252
NP $16,000 31.2% $1,250
NP $2,009 33.3% $167
NP $18,500 31.2% $1,445
NP $34,446 833% $7,176
NP $142,448 17.9% $6,359
NP $2,945 25.0% $184
NP $42,000 29.4% $3,088
NP $344 27.8% $24
NP $58,500 16.7% $2,438
NP $124,002 41.7% $12,917
NP $111,000 278% $7,708
NP $50,000 27.8% $3,472
N? $37,124 27.8% $2,578
NP $120,100 20.8% $6,260
$4,842 $10.1 $2.5
$31,193 $65.0 $15.9
$8,444 $17.6 $4.3
$4,688 $9.8 $2.4
$628 $1.3 $0.3
$5,420 $11.3 $2.8
$26,911 $56.1 $13.7
$23,847 $49.7 $12.1
$690 $1.4 $0.4
$11,581 $24.1 $5.9
$90 $0.2 $0. 1 1
$9,141 $19.1 $4.6
$48,438 $101.0 $24.6
$28,906 $60.3 $14.7
$13,021 $27.1 $6.6
$9,668 $20.2 $4 9
$23,477 $48.9 $11.9
$7,102 $14.8 $3.6
$45,750 $95.4 $23.3
$12,385 $25.8 $6.3
$6,875 $14.3 $3.5
$921 $1.9 $0.5
$7,949 $16.6 $4.0
$39,469 $82.3 $20.1
$34,976 $72.9 $17.8
$1,012 $2.1 $0.5
$16,985 $35.4 $8.6
$131 $0.3 $0.1
$13,406 $27.9 $6.8
$71,043 $148.1 $36.1
$42,396 $88.4 $21.6
$19,097 $39.8 $9.7
$14,179 $29.6 $7.2
$34 432 $71.8 $17.5
4-20
-------
Table 4-6: Estimated Savings from Early Phase 2 Bond Release (continued)
Expected
Disturbance Phase 2
Bond Acres per Bond
Value Permit Release
Region ($1,000) Period ($1,000)
LOWER BOUND ESTIMATE
$3.75 per $1,000 surety bonds)
UPPER BOUND ESTIMATE
($5.50 per $1,000 surety bonds)
PV of Early Annualized
Annual Phase 2 Value of
Surety Bond Release Bond Release
Cost ($1,000) ($1,000)
PY of Early Annualized
Annual Phase 2 Value of
Surely Bond Release Bond Release
Cost ($1,000) ($1,000)
NP $46,857 35.7% $4,184
NP $50,026 35.7% $4,467
NP $61,037 55.6% $8,477
NP $3,800 179% $170
NP $47,297 333% $3,941
NP $149,388 200% $7,469
NP $27,943 41.7% $2,911
NP $24,950 4 1.7% $2,599
NP $58,425 15.6% $2,282
$15,689 $32.7 $80
$16,750 $34.9 $8.5
$31,790 $663 $162
$636 $13 $0.3
$14,780 $30.8 $7.5
$28,010 $58.4 $14.2
$10,915 $228 $55
$9,746 $20 3 $5.0
$8,558 $17.8 $44
$23,010 $480 $11.7
$24,566 $51.2 $12.5
$46,625 $972 $23.7
$933 $ 1.9 $0.5
$21,678 $45.2 $11.0
$41,082 $856 $209
$16,009 $33.4 $8.1
$14,294 $29.8 $7.3
$12,552 $262 $64
Total, 26 mines with data available
$197 2
$2892
2 IM Mines without data:’
18 NP Mines without data 2
$12.5
$132.2
$18.3
$1940
Total, 46 mines
$341.9
$501 4
Expected Disturbance Acres calculated as projected disturbance acres divided by expected mine life, multiplied by 5 (permll period in years).
Percent EDA estimated for 2 mines, bond value estimated br I mine.
2 Percent EDA estimated for 18 mines, bond value estimated tbr 6 mines
4-21
-------
4.2.5 Total Compliance Costs for the Western Alkaline Coal Mining Subcategory
The estimated net savings in compliance costs associated with the new subcategory, consideiing the
savings to mining operations in sediment control and bonding costs, is estimated to be approximately S12.8
million, as shown in Table 4-7.
Table 4-7: Annual Costs and Cost Savings for the Western Alkaline Coal
Mining Subcategory
Incremental Modeling Costs $327,000
Sediment Control Costs (Savings) ($12,721,000)
Earlier Phase 2 Bond Release (Savings) ($341,900- $501,400)
Total Compliance Costs (Savings) ($12,735,900 - $12,895,400)
4.3 Summary of Compliance Costs
Table 4-8 summarizes EPA’s estimates of the compliance costs and cost savings associated with the final
rule. These costs are before-tax changes in costs incuned by the mine operations eligible for the two
new subcategories.
4-22
-------
Table 44: Summary of Estimated Annual Compliance Costs and Cost Savings
Remining Subcategory:
• Monitoring Costs
$133,500- $193,500
• Additional BMP Effort
$199,500- $565,000
Subtotal
5333,0(N) - 5758,5(X)
Western Alkaline Coal Mining Subcategory
• Incremental Modeling Costs
$327,000
• Sediment Control Costs (Savings)
($12,721,000)
• Earlier Phase 2 Bond Release (Savings)
($341,900- $501,400)
Subtotal
( I2, 735,900- $1Z895.400)
Total Compliance Costs (Net Savings)
($12,402,900- $12,136,900)
4-23
-------
Chapter 5
Industry Impacts
5.0 Introduction
This chapter presents EPA’s analysis of the economic impacts to the coal mining industry as a result of
compliance with the final nile. The analysis considers expected impacts on the profitability of coal mining
projects at the mine and company level, and supports the Agency’s findings about the economic
achievability of the rule. EPA assessed the potential for significant industzy-Ievel changes in coal
production. prices, and employment by comparing estimated costs, cost savings, and direct changes in
employment under the final rule with current industry levels. This chapter also examines the potential
impacts on small coal mining firms and on new sources, and assesses whether the final rule has the
potential to create disproportionate impacts for these two categories.
5.1 Impacts of the Coal Remining Subcategory
5.1.1 Methodology
EPA is required to assess the economic achievabiity of effluent limitations guidelines and standards that
are based on the best available technology (BAT) economically achievable. To assess the economic
achievability of the requirements, EPA assesses the expected impacts on the profitability of the potentially
affected facilities, the firms that own these facilities, and the directly-affected industiy as a whole.
Requirements that may result in significant numbers of facility or firm closures, or that may otherwise
cause significant reductions in financial returns to the affected economic activities, may be deemed to be
economically unachievable.
5-I
-------
EPA believes that the selected option will not impact existing Rahall-type permits with established BPJ
limitations. EPA believes that it may not be feasible for a remining operator to re-establish baseline
pollutant levels during active remining. Therefore, EPA is considering an alternative where pre-existing
discharges at these cperatioàs would remain subject to baseline pollutant levels established during the
original permit application. For purposes of this economic analysis, EPA assumes that this alternative will
apply. Thus, the final rule will not have any economic impacts on operations under existing Rahall-type
permits. For new pemüts, remining operators will have the opportunity to assess the overall economic
return of remining in compliance with the new requirements before investing at a renuning site.
The final rule will enconrage remining by reducing uncertainty about aean Water Act requirements for
remining sites. The nile will reduce uncertainty about the steps that must be taken for a permit to be
approved in two ways: (I) by clarifying procedures to establish baseline conditions and monitor for
compliance with permit i equireinents, and (2) by providing guidance on the use of BMPs in a pollulion
abatement plan to meet requirements of the new rule (see U.S. EPA, 2000d). EPA expects that the nile
will create opportunities for profitable remining at additional AML sites, particularly those with pre-
existing discharges.
The methods used to assess the economic achievabiity of the Coal Remining Subcategory differ from
approaches EPA has used in analyses for other rules because EPA believes that these remining
requirements will only affect new remining pennits. Hence, information needed to quantif r the economic
impacts to industry in terms of facility closures or impacts to finn financial ratios is not available.
Alternatively, EPA compared the potential added costs of the final requirements with the current price of
coal produced from the Appalachian region to provide a measure of economic impacts. Where additional
requirements imposed by the new subcate’gory represent only a small percentage of the price received for
coal, EPA concludes that the new requirements will not have a significant economic impact on potential
remining projects. EPA also evaluated the relative costs imposed on mines owned by small entities to
assess the potential for differential impacts.
5-2
-------
5.1.2 Results
EPA expects that the final rule will create increased economic incentives for remining by increasing the
expected returns to remining sites with pre-existing discharges. The use of standard procedures to
characterize baseline conditions and demonstrate compliance, and EPA’s guidance on the use and
performance of BMPs (see U.S. EPA, 2000d) will reduce the uncertainties associated with remining sites
containing pie-existing discharges. Currently, companies in some states face substantial uncertainty about
permit requirements, and about their ability to demonstrate compliance with Rahall requirements for pre-
existing discharges. Profit-maximizing investors require higher expected returns to justiJ y the additional
iisk of investments with uncertain outcomes. Therefore, some sites that would otherwise provide
acceptable returns to remining, if not subject to uncertainty, are not currently remined. Based on
Pennsylvania’s experience with its standardized remining permit program, EPA expects the reduced
uncertainty provided byihe final rule to make additional sites with pre-existing discharges attractive for
remining investments.
As discussed in Chapter 4, the only potential costs imposed by the final subcategory are: (1) costs
associated with additional monitoring where the new requirements exceed current state requirements for
Rahall permits; and (2) potential costs associated with implementing the required pollution abatement plan
(i.e., additional BMP requirements beyond what is included in a SMCRA-approved pollution abatement
plan at some sites). The following sections compare these additional costs with the average price of
Appalachian coal as a basis for assessing the economic impacts of these requirements.
Impact ofAdditional Monitoring Costs
An analysis by the Department of Energy of potential remining sites estimated an average coal recoveiy
of between 2,300 and 3,300 ton per acre of remined land (Veil, 1993). At these coal recovely rates, the
estimated steady state annual increase in acres being remined would produce between 7.1 and 14.5
million tons of coal per year. This represents only 1.5 to 3.1 percent of total 1997 Appalachian coal
production of 468 million tons. Table 5-I shows the estimated annual incremental monitoring costs per ton
of coal from rernining sites for the states that have the potential to require increased monitoring.
5-3
-------
Table 5-1: Imp
act of Increased Annual
Monitoring Costs P
or Ton of Coal Mined
Annual
Monitoring
Costs *
Acreage in
Remf ning per
Year **
Tons of Coal
ed***
Average
Monitoring
Cost per Ton
IN
$55,104
211
485,300
$0.11
KY
$9,024
276
634,800
$0.01
OH
$37,600
3,183
7,320,900
$0.01
TN
$91,840
391
899,300
$0.10
Total
$193,568
4,061
9,340,300
$0.02
* Table 4-2, high estimate.
‘ Table 3-1, high estimate.
Based on an average 2,300 tons of coal recovered per acre remined, the low end of the range
estimated by DOE (2,300 - 3,000 tons per acre). See Veil, 1993.
Because the estimates shown in Table 5-1 are based on the highest compliance monitoring cost estimates
and the low-end estimates of tonnage of coal produced, they represent an upper-bound estimate of the
economic impacts.
Under these worst-case assumptions, additional monitoring costs could represent as much as 50.10 to
$0.11 per ton reniined, due primanly to the v y conservative assumptions used to estimate incremental
monitoring costs for Indiana and Tennessee. 12 However, even these worst-case estimates represent less
than one-half of one percent of the 1997 average price of 526.55 per ton of coal mined in the Appalachian
region (DOE/EIA, 1997). These findings suggest that the incremental monitoring requirements will not
deter investments in remining projects.
Impact of Pollution Abatement Plan Costs
As discussed in Chapter 4, EPA believes that the requirements for the pollution abatement plan will be
satisfied by an approved SMCRA plan. However, EPA recognizes that additional BMP costs may be
12 EPA did not have data on existing monitoring requirements for these states because their remining operations do not
incorporate Rahall provisions. EPA conservatively estimated incremental costs based on: 12 baseline samples; 12 compliance
monitoring samples per year for five years; and four new flow weirs per site.
5-4
-------
incurred under some new renuning permits, potentially reducing expected returns on investments. EPA’s
high estimate of additional BMP costs assumes that 438 acres per year would require additional alkaline
materials, at an annual cost of $565,000. If these acres produced 1,074,000 tons of coal per year
(assuming the low-end DOE estimate of 2,300 tons per acre in Veil, 1993), the additional BMP costs
would represent only 5.6 cents per ton of coal recovered. This added cost represents only two-tenths of
one percent of the 1997 average price of $26.55 per ton of coal mined in the Appalachian region
(DOFIE1A, 1997). These additional BMPs would be required by NPDES pezmit writers only where
necessary to meet Clean Water Act requirements. Any additional BMPs required will be site-specific,
with economic achievability considered in BPJ detennination.
EPA recognizes that some of the existing AML sites may not be profitable to remine, either under current
conditions or under the final rule requirements. However, new remining operators will have the
opportunity to choose among potential remining sites, and will only select sites that they believe are
economically achievable to remine.
5.1.3 Impacts on Small Firms
The Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act
of 1996 (SBREFA) generally requires an agency to prepare a regulatory flexibility analysis for any nile
subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any
other statute ‘unless the agency certifies that the nile will not have a significant economic impact on a
substantial number of small entities. An agency may ceitil that a rule will not have a significant
economic impact on a substantial number of small entities if the nile relieves regulatory burden, or
otherwise has a positive effect on all small entities sut j cci to the rule.
For purposes of this analysis, small entity is defined as: (I) a small business that has 500 or fewer
employees (based on SBA size standards); (2) a small governmental jurisdiction that is a government of a
city, county, town, school district or special district with a population less than 50,000; or (3) a small
organization that is any not-for-profit enterprise which is independently owned and operated and is not
dominant in its field.
5-5
-------
As discussed in Chapter 1, the cuirent regulations at 40 CFR 434 create a disincentive for reniining by
imposing limitations on pre-existing discharges for which compliance is cost prohibitive. Despite the
statutory authority provided by the Rahall Amendment, coal mining companies and states remain hesitant
to pursue rennning without formal EPA guidelines. The final Coal Reinining Subcategoiy provides
standardized procedures for developing effluent limits for pre-existing discharges, thereby reducing the
uncertainty involved in interpreting and implementing current Rahall requirements. The new subcategoiy
is intended to removç bariiers to the permitting of remining sites with pre-exisling discharges, and is
therefore expected to encourage remining activities by small entities. Thus, the Agency concludes that
the new subcategory will relieve regulatory burden for all small entities and thereby certifies that the final
subcategory nile will not have a significant economic impact on a substantial number of small entities.
Furiherniore, EPA believes that the new subcategoiy is likely to create opportunities for small finns. As
described in EPA’s Cod! Remining and Western Alkaline Mining: Economic and Environmental
Profile (U.S. EPA, I 999e), 95 percent of the finns owning coal mines in the Appalachian states are
small finns as defined by the Small Business Administration (finns with 500 or fewer employees).
Furthermore, these small firms own an estimated 74 percent of the coal mines in the Appalachian region.
It is likely that firms applying for new remining permits will be similar to, or the same as, those already
active in the region. According to an OSM source, “Quite likely, most remining related reclamation
activities will be economically feasible now and in the future only for small coal operators or, alternately,
where the AML are located adjacent to previously unmined lands containing coal” (U.S. DOI, undated).
This is because many of the available remining locations are within fragmented and relatively small sites.
While small firms may be more likely than large firms to apply for permits under the new subcategoiy, the
final rule itself does not create any particular advantage for small or large finns. The incremental
compliance costs are likely to vaiy with the size and complexity of the remining site, but not with finn size
per Se.
5-6
-------
5.2 Impacts of the Western Alkaline Coal Mining Subcategory
5.2.1 Methodology
EPA developed estimates of expected annual costs and savings associated with the Western Alkaline
Coal Mining Subcategoiy as discussed in Chapter 4. Since the subcategoiy results in net cost savings to
existing mine operations, it is inherently economically achievable. Nonetheless, EPA estimated changes in
labor requirements attributed to the rule and examined potential impacts on coal prices. It is important to
note that there is significant variability in EPA’s estimates for individual mine operations. The estimates
rely on extrapolating from model mine results using a variety of assumptions about the timing and pace of
reclamation and bond release at each site. In reality, many of the variables that affect employment and
cost savings differ significantly among individual mining operations. Nonetheless, the calculations provide
some indication of the potential economic impacts of the rule on western alkaline coal mines.
5.2.2 Results
As discussed in Chapter 1, EPA is setting BPT, BAT, and NSPS limitations that have an equivalent
technical basis for the Western Alkaline Coal Mining Subcategory. EPA concludes that nearly all
economic impacts are positive and finds the new subcategory to be a cost savings to the industry and thus,
economically achievable. Because reclamation costs under the rule will be less than or equal to those
under the existing effluent guidelines for all individual operators (thus, to the subcategoiy as a whole), no
facility closures or direct job losses associated with post-compliance closure are expected. However,
EPA did estimate potential changes in labor requirements attributable to the rule caused by changes in
labor hours associated with the types of erosion and sediment control structures used.
EPA based its estimates of changes in labor requirements on the detailed cost estimates developed for the
three model mines by the WCMWG (1999,2001). For a 380-acre model mine in the DSW region,
approximately 2.2 fewer full time equivalent employees (FTEs) over ten years are needed under the final
rule compared to the current guidelines. In model mines of similar size, labor savings in the IM region
model mine total 0.9 FTEs over 10 years, while 1.1 fewer FTEs are needed in the NP region model mine
over the same time period.
5-7
-------
It is important to note that the estimated net reduction in labor hours at each model mine are the sum of a
relatively small number of reductions in hours distributed over many different jobs and different
reclamation years. For example, the expected net reduction of approximately 1,800 labor hours over 10
years at the IM model mine is attiibutablc to changes in design hours required in year 1, equipment
operator, supervisoiy, and consirnction labor hours to build the sediment pond in year 1, clean the pond in
yearS, and remove it in year 10, pe iodic sampling by environmental technicians, and periodic inspection
by engineers — to mention just a few line items. Because the reduced hours are spread over many jobs
in different years, these results cannot be intcipreted simply as one FTE lost over 10 y .
Dividing the FTh reduction for each model mine by the 10-year project life results in an estimated annual
reduction of 0.22 FFE at theDSWmodel mine, 0.11 FTE attheNPmodel mine, andO.O9FFEatthelM
model mine. Scaling the model mine reductions in FTE to each mine in the appropriate reg on results in an
estimated annual reduction of 5.2 FTEs in the 46 Western Alkaline surface mines. This represents less
than 0.1 percent of total 1997 coal mine employment (6,862 FFEs) in the western alkaline region states.
The cost savings associated with the final role are not expected to have a substantial impact on the industiy
average cost of mining per ton of coal, and are therefore not expected to have a major impact on coal
prices. While the savings are substantial in aggregate (and for some individual mine operators), on average
the savings represent a small portion of the total value of coal produced by the affected mines. Table 5-2
compares the estimated cost savings with the value of current annual production for 25 surface mines with
sufficient information available to estimate sediment control and bond release savings, as well as having
annual production and value of production data available. Table 5-2 also provides the estimated cost
savings relative to production and value of production for 19 mines which do not have complete data
available, and presents overall estimates based on the 44 mine total. ‘ On average, the overall estimated
cost savings are 3 cents per ton, about 0.4 percent of the value of production. In addition, note that value of
production reflects the value of coal at the mine head. Transportation costs of coal, especially from the
Western Alkaline region to Midwestern utilities and other consumers, are significant and the estimated
savings as a percent of delivered coal price will be smaller than 0.4 percent. Thus, as with the Coal
Renuning Subcategoiy, the Western Alkaline Coal Mining Subcategory is not expected to result in
significant industry-level changes in coal production or prices.
13 One IM and one NP region mine did not have production or value of production available.
5-8
-------
—
Table 5-2: Estimated Savings to Western Alkaline Surface Mines per Ton Produced and as Percent of Value of
Production, Selected Mines - - -
Annual Savings
Value of
Estimated
Annual Savings
as Percent of
Production
Production
Annual Cost 2
per Ton
Value of
Region
(1,000 tons)
($1,OO0
($1,000)
Produced
Production
DSW
4,634
$116,638
$2,125.4
$046
1.82%
DSW
7,090
$178,455
$2,415
$034
135%
IM
4,402
$26,412
$1048
$0.02
0.40°f .
NP
2,002
$36,957
$2465
$0.12
0.67°f .
NP
9,015
$88,708
$1702
$0.02
019%
NP
330
$3,333
$27.4
$0.08
0.82%
NP
4,200
837,800
$157.1
$0.04
0.42%
NP
2,375
$51,846
$71.6
$0.03
014%
NP
8,200
$213,200
$395.5
$0.05
019%
NP
5,544
$102,342
$150.0
$0.03
015%
NP
4,335
$42,656
$683
$002
016%
NP
4,900
$106,967
$2383
$0.05
0.22%
NP
6,607
$144,231
$2643
80.04
018%
NP
11,700
$115,128
$204.1
$0.02
0.18%
NP
3,242
$19,452
$46.4
$0.01
024%
NP
13,559
$81,354
$183.5
$001
023%
NP
27,113
$162,678
$347.1
$001
0.21%
NP
500
$3,000
$190.1
5038
634%
NP
14,681
$88,086
$3023
$0.02
034%
NP
13,324
$79,944
$331.4
$0.02
0.41%
NP
50,000
$300,000
$327.9
$0.01
0.11%
NP
1,005
$6,030
$42.0
$0.04
0.70°h
NP
600
$3,600
$303.5
$0.51
843%
NP
6,231
$37,386
$275.1
$0.04
0.74%
NP
4,072
$88,892
$221.4
$005
0.25%
Total, 44 mines 5
Total, 25 mjnes
Average
209,661
8,386
$2,135,095
$85,404
$9,211.7
$368.5
NA
$0.044
NA
0.43%
Total, l9mines 4
187,667
$1,193,760
$3,714.3
NA
NA
Average
9,877
$62,829
$195.5
80.020
0.31%
—
397,328 $3,328,855 $12,925 9 NA NA
Average -- -- -_9,030 $75,656 $293.8 80.033 039%
‘Mine production multiplied by the average value per ton of coal sold in the state in which the mine is located. Where state
values are unavailable, EPA used the western region average value (see Economic Profile, U.S. EPA. 1999e).
2 Estisnated annual reclamation cost savings plus midpoint of early Phase 2 bond release savings.
‘Mines with complete production, acreage, and bond value data available.
4 Mines for which at least one of the following was estimated: production, acreage, bond value.
‘Production and value of production data is unavailable for one IM and one NP mine.
—
5-9
-------
5.2.3 Impacts on Small Firms
The Regulatozy Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act
of 1996 (SBREFA) generally requires an agency to prepare a regulatory flexibility analysis for any rule
subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a significant economic impact on a
substantial number of small entities. For the purpose of this analysis, small entity is defined as: (I) a small
business that has 500 or fewer employees (based on SBA size standards); (2) a small governmental
jurisdiction that is a government of a city, county, town, school di tnct or special district with a population
less than 50,000; or (3) a small organization that is any not-for-profit enterprise which is independently
owned and operated and is not dominant in its field.
In determining whether a rule has significant economic impact on a substantial number of small entities,
the impact of concern s any significant adverse economic impact on small entities, since the primary
purpose of the regulatory flexibility analysis is to identil r and address regulatoiy alternatives “which
minimize any significant economic impact of the final rule on small entities” (5 U.S.C. sections 603 and
604). Thus, an agency may certify that a rule will not have a significant economic impact on a substantial
number of small entities if the nile relieves regulatory burden, or otherwise has a positive economic effect
on all of the small entities subject to the rule.
EPA projects that the final rule will result in cost savings for all small surface mining operators. For all
small underground mine operators, EPA projects no incremental costs, and the Agency believes that many
are likely to experience some cost savings. Chapter 4 discusses the likely cost savings associated with
the subcategozy in more detail. Thus, the Agency concludes that the final rule will not have a significant
economic impact on a substantial number of small entities.
5.2.4 Impacts on New Sources
EPA is setting NSPS limitations equivalent to the limitations for BPT and BAT for the subcategory. In
general, EPA believes that new sources will be able to comply at costs that are similar to or less than the
costs for existing sources, because new sources can apply control technologies more efficiently than
5-10
-------
sources that need to retrofit for those technologies. In this case, new sources would be able to avoid
costs associated with installing sedimentation ponds. There is nothing about the final nile that would give
existing operators a cost advantage over new mine operators; therefore, NSPS limitations wilt not present
a bather to entiy for new facilities.
5-11
-------
Chapter 6
Additional Economic Impacts
6.0 Introduction
This chapter discusses three additional categories of potential economic impacts attributed to the final
rule. The chapter first estimates costs that may be incurred by NPDES permitting authorities to review
permit applications under the final nile. The chapter then discusses potential impacts on communities (due
to potential impacts on employment), and potential foreign trade impacts.
6.1 Costs to the NPDES Permitting Authority
Additional costs will be incurred by the NPDES pemiitiing authority to review new permit applications
and issue revised permits based on the final nile. Reviewers will incur additional costs because permit
applications under the final rule will require more time to review than would an existing permit on the five-
year review cycle. Under the final rule, NPDES permitting authorities will review baseline monitoring
results and pollution abatement plans for the Coal Remining Subcategoiy, and watershed modeling results
and sediment control plans for the Western Alkaline Coal Mining Subcategory.
EPA estimates that permit review will require an average of 35 hours of a permit writer’s time per site.
This includes 25 hours per plan review (based on OSM’s estimated SMCRA burden for review of
reclamation plans) plus 10 hours per plan for NPDES permit preparation.. EPA assumes that permit
writers receive an hourly wage of $31.68. The average annual salary rate reported by the U.S.
Department of Labor for state and local government employees is $41,185, or $19.80 per hour for 2,080
available labor hours per year. EPA estimates that overhead costs for state and local government
6-1
-------
employees are 60 percent of the direct labor cost. The total loaded hourly rate is therefore 531.68
(1.6*519.80). At this rate, each permit would cost $1,109.’
Based on these assumptions, total annual costs to the NPDES permitting authorities range from $47,500 to
$67,500 for the 43 to 61 additional sites expected to be permitted each year under the final Coal Remining
Subcategoiy.’ 5 An upper bound estimate of costs associated with implementing the final Western
Alkaline Coal Mining Subcategory assumes that all 46 existing surface mine permits are renewed at one
time. The total incremental annual cost would be $12,500 when annualized over the 5-year permit life.
Total incremental NPDES permit review costs for the final rule are therefore estimated to be between
$60,000 and $80,000 per year.
6.2 Community Impacts
6.2.1 Regional Competitiveness
The final rule could have community-level and regional impacts if it significantly altered the competitive
position of coal produced in different regions of the countiy, or led to growth or reductions in employment
in different regions and communities. As described in Chapter 3, there has been a long-term trend toward
higher production in the West and a decline in coal employment in the Appalachian region.
EPA examined the potential impact of the proposed guidelines on the competitiveness of coal production
in the East relative to coal production in the West. First, revised cost savings estimates for Western
Alkaline subcategoiy suiface mines total 512.8 million per year (reclamation cost savings plus the
midpoint of early Phase 2 bond release savings). The revised estimated cost savings comprise an average
14 The estimated number of hours required per permit and the average hourly rate for staff review are consistent with
those used in the ICR for the proposed rule (U.S. EPA, 2000b).
Remining estimates were based on the annual number of permits reviewed; hence, costs did not need to be
annualized.
6-2
-------
of about $0.03 saved per ton of coal produced in Western Alkaline surface mines (397 million tons per
year), or about 0.4 percent of the value of coal production ($3.3 billion).
Second, based on Energy Information Administration (EIA) data, either Eastern or Western coal tends to
dominate regional coal markets; direct competition appears to occur in only a handful of states. Thus,
Eastern coal producers provide almost 100 percent of coal to the New England, Middle Atlantic and South
Atlantic Census Divisions. Western states dominate the coal market in the West North Central,
Mountain, and Pacific Census Divisions. In eight states Western coal has a market share greater than 20
percent but less than 80 percent: Alabama, Illinois, Indiana, Louisiana, Michigan, Mississippi, Tennessee
and Texas. In four of these states, Alabama, Illinois, Louisiana, and Texas the competition lies primarily
between coal produced within the state and Western coal (i.e.. in Texas almost all coal purchased is
produced either in Texas or in Western states). In Indiana, Michigan, Mississippi, and Tennessee
significant competition exists from out-of-state, non-western coal producers. This geographic pattern of
competition emphasizes the importance of transportation costs in the coal market.
Third, due to transportation costs, the delivered price of coal in these “competitive” states is much higher
than the Western minehead price. EPA estimated the average minthead price for affected Western
Alkaline surface mines as $8.34 per ton. Based on EIA data, the average price of coal delivered to
electric utilities in the eight “competitive” states was $25.51 per ton in 1998 (electric utilities accounted for
over 90 percent of U.S. coal usage in 1998). Thus, while the $0.03 savings per ton represents 0.4 percent
of the average minehead price, it comprises a much smaller 0.13 percent of the average delivered price in
the eight “competitive” states.
Fourth, EIA data indicates that the average cost of rail transportation from Western to Central states is
approximately 50.00912 per ton-mile. This suggests that under the proposed guidelines Western mines
can ship their coal about four additional miles and maintain the same delivered price attained under the
current guidelines.
The relatively small percentage decrease in delivered price, combined with the effect of transportation
costs suggest that the impact of the savings on the relative competitiveness of Eastern and Western coal
should be veiy small. Finally, note that while Western Alkaline surface mines account for peii aps 80
6-3
-------
percent of total Western coal production, a significant percentage of Western coal production will not
achieve these cost savings. EPA therefore concludes that the final rule is not likely to have significant
impacts on relative coal production in the West versus the East.
The new Coal Reinining Subcategoiy may shift the location of production and employment toward eligible
abandoned mine lands, but is not likely to increase national coal production or affect coal prices
significantly overall. Furthermore, the projected cost savings td western mine operators do not represent
a large portion of the value of western coal production, and therefore are not likely to result in a
signilicant change in the relative cost advantage of western verses eastern production.
6.2.2 RegIonal Employment
EPA projects that impacts of the fmal nile on coal mine employment will also be minor. Increased
remining might create new employment opportunities in some locations. If total coal production from
remining sites were to increase by the estimated 1.2 to 2.9 percent; employment in the affected regions
could also experience similar increases. However, it is possible that much of the increase in coal
production from remining will displace production elsewiiere, with offsetting decreases in employment at
other locations. The new subcategory may shift the location of production and employment toward
eligible abandoned mine lands, but is not likely to increase coal production and employment or affect coal
prices significantly overall.
As discussed in Chapter 5, EPA estimated a reduction in labor requirements of 5.2 FTEs per year for the
final Western Alkaline Coal Mining Subcategoiy by extrapolating from the model mine results. This
represents less than 0.1 percent of the 6,862 total 1997 coal mine employment in the western alkaline
region states. Regional multipliers relating total direct and indirect employment to coal industiy
employment range from 2.6 to 32 for the western alkaline states (U.S. Bureau of Economic Analysis,
RIMSII). The estimated annual 5.2 FTE direct mine job losses would result in an additional 8.7 FTh
indirect job losses based on RIMSH regional employment multipliers. Thus, FTE losses, both direct and
indirect, resulting from the projected reclamation cost savings will total 13.9 jobs. This ignores any
potential positive employment impact resulting from increased output due to lower production costs.
6.4
-------
6.3 Foreign Trade Impacts
EPA does not expect any foreign trade impacts as a result of the final rule. U.S. coal exports consist
primanly of Appalachian bituminous coal, especially from West Virginia, Virginia and Kentucky. Coal
imports to the U.S. are insignificant (DOE/EIA, 1995; DOE/EIA, 1997). The final rule could encourage
additional exports, with a positive impact on the U.S. balance of trade, if coal from expanded remining in
the Appalachian region found markets overseas. Impacts are difficult to predict, however, since coal
exports are determined by economic conditions in foreign markets and changes in the international
exchange rate for the U.S. dollar. The impacts on foreign trade are likely to be small, given the relatively
small projected increase in production from increased remining.
6-5
-------
Chapter 7
Cost-Effectiveness
Cost-effectiveness calculations are used during the development of effluent limitations guidelines and
standards to compare the efficiency of regulatory options in removing toxic and non-conventional
pollutants. Cost-effectiveness is calculated as the incremental annual cost of a pollution control option per
incremental pollutant removal. The increments are considered relative to another option or to a
benclunark, such as existing treatment. In cost-effectiveness analysis, pollutant removals are measured in
toxicity normalized units called “pounds-equivalent.” The cost-effectiveness value, therefore, represents
the unit cost of removing an additional pound-equivalent of pollutants. In general, the lower the cost-
effectiveness value, the more cost-efficient the regulation will be in removing pollutants, taking into
account their toxicity. While not required by the Clean Water Act, cost-effectiveness analysis is a useful
tool for evaluating regulatoiy options for the removal of toxic pollutants.
While cost-effectiveness results are usually reported with the economic analysis for effluent guidelines,
such results are not presented in this report because of the nature of the two subcategories. For the Coal
Remining Subcategory, EPA is unable to predict pollutant reductions that would be achieved at future
reinining operations. It is difficult to project the results, in tenns of measured improvements in pollutant
discharges, that will be produced through the application of any given BMP or group of BMPs at a
particular site. EPA is therefore unable to calculate cost-effectiveness. For the Western Alkaline Coal
Mining Subcategory, cost-effectiveness was not calculated because there are no incremental costs
attributed to the new requirements.
7-1
-------
Chapter 8
Environmental Impacts and Benefits
8.0 Introduction
EPA analyzed the adverse environmental impacts of current practices as a basis for assessing the
incremental environmental impacts of the final rule. These baseline impacts were discussed previously in
the EA. This chapter describes the methodologies EPA used to assess the environmental improvements
that will result from implementation of the final rule. EPA was able to quantify these environmental
improvements for some categories of beneflts and estimate their value using benefits transfer techniques
described below.
The analyses summarized in this chapter are described in detail in Benefits Assessment of Proposed
Effluent Limitations Guidelines and Standards for the Coal Mining Industry: Remining and Western
Alkaline Subcategories (hereafter referred to as the “Benefits Assessment”; U.S. EPA, 2000a).
8.1 Coal Remining Subcategory
8.1.1 Environmental Impacts of Abandoned Mine Lands
Appalachia has been the site of substantial coal mining historically, and much of this mining took place
before passage of laws regulating the environmental impacts of coal mining. The result is an
environmental legacy that includes more than a million acres of abandoned mine lands (AML). AMLs
are associated with a wide range of public health and safety problems and aesthetic degradation, including
abandoned mine openings, highwalls, unstable spoil piles, and hazardous water bodies. In addition, acid
mine drainage (AMD) from AML causes serious water quality problems. AMD is highly acidic, and may
contain high levels of dissolved metals or salts. Common AMD contaminants include total suspended
8-1
-------
solids (TSS), iron (Fe), manganese (Mn), and aluminum (Al). AMD may contaminate groundwater
and/or nm off directly into adjacent streams or creeks.
Acidity from AMD influences chemical reactions in receiving streams. Some of these reactions increase
the toxicity of other pollutants. For example, aluminum in combination with low pH can exacerbate the
toxicity of aluminum alone and therefore represent an additional stress to aquatic receptoi . Other
reactions result in aesthetic degradation of the sw-face water. Dissolved iron can coat banks and stream
bottoms with a nisty, brownish-red discoloration. Iron and aluminum oxides will precipitate out of solution
at higher pHs and can make the water cloudy or cover the stream bottom with a layer of colloidal
materiaL Such conditions are unaesthetic.
Acidity alone or in combination with high levels of metals, dissolved solids, and suspended solids affects
sensitive life stages of fish and invertebrate species. The most sensitive vertebrate and invertebrate
species die off at pH between 6.0 and 6.5. Most fish species are eliminated when pH reaches 5.0, and
only a few can survive at pH 4.5. Over time, the diversity of the aquatic communities may decrease
downstream from AMD discharges.
8.1.2 Impacts of Remining on Environmental Quality
EPA’s benefits analysis included an evaluation of the environmental impacts of remining best
management practices on land and water resources using data contained in EPA’s Coal Remining
Database (U.S. EPA, 1999a). EPA used only those mines that had both baseline and active remining or
post-remining (post-baseline) data to assess the potential impacts of remining BMPs on water quality.
Complete information on mine discharges was available for 13 mines. These 13 mines were associated
with 42 pre-existing discharges. In addition, EPA used information on 105 remining permits issued for the
bituminous region in Pennsylvania to assess benefits from improved landscape quality and enhanced
public safety stemming from remining and subsequent reclamation of AML (Hawkins, 1995).
8-2
-------
EPA performed statistical analyses to evaluate the effect of remining on water quality at the 13 remining
sites for which sufficient water quality information was available.’ 6 Approximately 24 to 38 percent
showed a statistically significant decrease in pollutant levels for acidity, total aluminum, total iron, and
sulfate. Flow significantly decreased for 35 percent of the post-baseline observations. The mine locations
examined in this analysis are active remining operations, and decreases in pollutant levels are expected to
become more significant with lime.
EPA compared findings from the analysis with those from a Pennsylvania study of remining sites. The
Pennsylvania Remining Site Study of 112 closed remining sites is summarized in EPA’s Coal Reinining
Bess Management Practices Guidance Manual (U.S. EPA, 2000d). The Pennsylvania study focused
on sites that had been reclaimed to at least Stage Ii bond release, and therefore reflects the effects of
BMPs more fully than the EPA’s analysis. The Pennsylvania study found significant decreases or
elimination of levels for acidity, total iron, total manganese, and total aluminum in 44 percent 42 percent,
41 percent, and 38 percent respeciively, of the pre-existing discharges monitored.
EPA identified three broad categories of potential benefits from increased remining: (1) improvements in
human health and public safety; (2) ecological benefits; and (3) economic productivity benefits. Remining
can generate human health benefits by reducing the risk of injury at AML sites and reducing discharge of
acid mine drainage to waterways from which water is taken for human consumption. However, the
human health benefits associated with consumption of water and organisms taken from the water bodies
affected by AMD are unlikely to be significant because: (1) most acid mine drainage constituents are not
bioaccumulativc, and therefore adverse health effects associated with fish consumption are not
expected;’ 7 and (2) public drinking water sources are treated for most acid mine drainage constituents
that are associated with adverse health effects.’ 8 Improving public safety is a significant benefit of
“The complete list of statistical results are provided in Appendix B of the Benefits Assessment (U.S. EPA, 2000a).
17 One constituent, aluminum, has a potential to bioaccuxnulate in aquatic blots. However, EPA has established oral
RfDs for aluminum phosphide only; no R.tDs for other aluminum compounds (i.e., aluminum compounds found in AMD) are
available.
‘ 8 A secondary drinking water standard is set for sulfate, which is not enforceable. (See Tabk A-4 of Appendix A to
U.S. EPA, 2000a.) Recent health studies indicate that sulfate may cause diarrhea Epidemiological data are not conclusive,
however.
8-3
-------
rernining. Eliminating safety hazards by closing abandoned mine openings, regrading highwalls, stabiJizing
unstable spoils, and removing hazardous water bodies potentially prevents injwies and saves lives.
Remining and the associated reclamation of AML is expected to generate ecological and recreational
benefits by improving teffestrial wildlife habitat and reducing pollutant concentnitions below levels that
adversely affect aquatic biota. Remining is also likely to improve the aesthetic quality of land and water
resources. Finally, remining and reclamation of AML sites may result in several economic productivity
benefits, including reduced drinking water treatment costs and enhanced commercial potential of the
affected areas.
8.1.3 Methodology for Estimating Benefits
EPA was able to quanti1 some of the benefits expected from increased remining, and was able to
monetize some of the quantified benefits using benefits transfer techniques. Beneilts iransfer involves
use of the results of previous benefits analyses that estimate consumers’ willingness to pay (WTP) for
vanous improvements in environmental quality. EPA applied WFP values from previous studies of similar
environmental improvements to estimate the value of improved environmental conditions at reanining sites
under the final rule. EPA reviewed six candidate studies to support valuation of recreational use, passive
use, and drinking water treatment benefits at rernining sites, and selected two of the studies for use in this
anal is ‘
The first isa study of surface mine reclamation in Appalachia by Randall et al. (1978). The study
estimates the total annual value of environmental damage and the present value of water-related damage
from disturbing land for coal mining. For analyzing impacts of the final rule, EPA assumes that the
benefits from AML reclamation can be equated to the value of reversing environmental damages from
disturbing land surfaces. EPA used a study by Feather et al (1999) to assess various categories of land-
related benefits from remming. The study focuses on improved recreational opportunities for hunting and
nature viewing due to preservation of wildlife habitats.
19 The studies reviewed by EPA and the criteria used to select studies for the benefits transfer analysis are described in
the Benefits Assessment document (U.S. EPA, 2000a)
8-4
-------
EPA estimated the total monetary value of ecological benefits from remining by summing over each
benefit category from Randall et al. (1978) and Feather et al. (1999) deemed applicable to reminin&
Based on these studies, benefits associated with reclamation of AML sites are estimated as follows:
Estimate the percentage of additional acres expected to experience sign fican:
decreases in AMD pollutant levels. EPA estimates that from 38 to 44 percent of AML
acres affected by remining would expenence significant decreases in AMD pollutant
levels. Thus, 667 to 1,115 of the projected 1,773 to 2,512 additional AML acres
reclaimed per year will experience significant decreases in AMD pollutant levels. In-
stream water quality improvements are assumed to occur as a result of decreases in
pollutant levds.
• Estimate benefit values using benefits transfer techniques. EPA applied WTP values
from the two studies to estimate the value of the environmental improvements expected
to result from the new subcategoiy.
• Estimate the annual monetized environmental benefits. To estimate total annual
benefits, the Agency calculated the present value of the stream of environmental benefits
from AML sites beginning renunrng each year. EPA a umes that annualized benefits
from remining begin to occur five years after permit issuance and are calculated for a
five year period.
8.1.4 Results
Human Health Benefits
In addition to the monetized benefits described above, the increase in remining is projected to
result in the removal of some 216,000 to 307,000 feet of highwall each year. It is clear that AMLs are
dangerous sites and that the resuming rule will result in benefits from making these sites more safe. For
example, there are 305 AML problem areas in Pennsylvania where injury, death, accident, or damage to
property has been recorded (PA DEP, 1997). Ten deaths have been recorded since 1952 at the Muddy
Creek AML area (U.S. DO!, 1998a) alone. However, although anecdotal evidence of the hazardous
nature of AtvlL is available, EPA was unable to find systematic, reliable data to evaluate the decreased
risk of serious injury or death resulting from remining safety improvement. Had EPA been able to
estimate the reduction in the rate of accidents at AML sites attributable to the remining nile, the number
8-5
-------
of lives saved annually would have been evaluated using the concept of the value of a statistical life
(VSL). VSL measures willingness to pay for a small reduction in the risk of premature death. Most
estimates of VSL range from $3 million to $9 million (Viscusi, 2000).
Water-Related Benefits
Randall et al. (1978) analyzed the environmental damage from coal mining for a study area that
expeneiiced both surface and underground mining. The regional population of the study area is about
80,000 persons, with socioeconomic cnaracteristics typical of the central Appalachian coal region (i.e.,
incomes are lower and families are larger than the national average). The study identifies and estimates
five mutually exclusive categories of environmental damage associated with coal mining. EPA
determined that three of the damage categories were not directly applicable to remining. Therefore, EPA
based the value of water-related benefits for remining on the two remaining damage catego r i e s 2 °
Degradation of life-suppoit systems for fisk wildlife, and recreation resources . The
study estimated recreational losses due to degradation of water quality for three
recreational activities — fishing, boating, and swimming. First, the study estimated the
reduction in recreational use (days lost) of the affected water resources due to water
quality ünpainnent. Then, the value of the recreation lost was estimated based on the
user day values (deiived from a recreational demand model). In addition, regional fishing
losses were quantified based on an annual cost of fish replacement (i.e., the cost of
purchasing fish and restocking streams). The total recreational losses were estimated by
summing over the estimates of fish replacement cost and lost recreation values. This
yielded an estimate of $37 per acre per year.
• Aesthetic damages to landscape and water . Aesthetic damages to water result from
increased stream siltation and discoloration of water by AM]). Aesthetic damages to the
landscape occur due to “drastic landscape modifications including exposed bighwalls, flat
benches, mountaintop removal, and soil deposits.” Individual willingness to pay (WTP)
for improved aesthetic quality of landscape and water are derived from a contingent
valuation study. Based on the regional WTP for aesthetic improvements, the estimated
value of aesthetic damages from mining one acre of land is $140 per year.
20 study values were adjusted to 1998 dollars based on the relative change in the Consumer Price Index from 1976
to 1998 (2.89) and rounded to the nearest dollar.
8-6
-------
Land-Related Benefits
Restoring the surface area at AML sites by removing mine shaft openings, refuse piles, and highwalls and
by vegetating surface areas will enhance sites’ appearance and improve wildlife habitats. Improvements
in wildlife habitats will increase species abundance and diversity by improving species productivity and
survivability. These changes are likely to increase the value of land for post-remining uses. Among the
post-reclamation uses reported for past mining areas are wildlife habitat, hunting preserves,
pastureihayland, public park and open space for community use (Smith and Bridger, 1998). An increase
in the number and diversity of wildlife species, improved aesthetic quality, and availability of recreation
amenities (e.g., state parks) will enhance recreational activities such as hunting wildlife viewing biking,
hiking and photography.
A recent study by Feather et al. (1999) develops a recreational demand model for pheasant hunting and
wildlife viewing, where demand is modeled as a function of landscape characteristics, including measures
of the level of undisturbed surface, forest land, landscape diversity, and urbanization. 2 ’ Based on findings
from this study, the annual per acre recreational values resulting from open space preservation are:
• Improved pheasant hunting:
The North Eastern Region (PA, DE, MD, and OH) — $7.24
The South Eastern Region (WV, VA, KY, and TN) — N/A 22
• Enhanced wildlife viewing:
The North Eastern Region (PA, DE, MD, and OH) —$41.11
The South Eastern Region (WV, VA, KY, and TN) — $1 •54 23
21 The study used data form the National Survey of Fishing, Hunting, and Wildlife Associate Recreation. The
FHWAR survey collected information on demographic characteristics and recreation behavior using a nationwide sample of
50,000 individuals.
22 Not applicable. Only negligible pheasant hunting occurs in these regions.
23 The disparity in the wildlife viewing values is likely to result from the difference in the presence of wildlife
conservation areas, various intensities of recreation that occur in each region, and different population density.
8-7
-------
The Coal Renting Subcategory is expected to provide incentives for remining in the North Eastern and
South Eastern region states. EPA estimates an aggregate land-based benefit value of $28 per acre per
year (the sum of the average enhanced wildlife viewing value of $21 and the improved pheasant hunting
value of $7 for the Noah Eastern region).
Nonuse Benefits
Individuals who never visit or otherwise use a natural resource may nevertheless be affected by changes
in its status or quality. Empirical estimates indicate that such ‘ nonuse value” may be substantial for some
resources (Harpinan, 1993; Fisher and Raucher, 1984; Bergstrom, 1993). Because nonuse value is a
sizable component of the total economic value of water resources, EPA estimated changes in nonuse
values for water quality using a n ile of thumb developed by Fisher and Rancher (1984). For this analysis,
EPA conservatively estimated that nonuse benefits compose one-half of water-related recreational use
benefits. EPA estimates that the annual recreational use values associated with water-related benefits
are approximately $37 per acre, resulting in corresponding nonuse values of $19 per acre.
Total Annual Benefits
As shown in Table 8-1, EPA estimates that annual monetized benefits range from approximately $0.70 to
$1.2 million using a 3 percent discount rate, and between $0.6 and $0.9 million using a 7 percent discount
rate.
In addition to the benefits EPA was able to monetize, the projected increase in remining is expected to
result in the removal of approximately 216,000 to 307,000 feet of highwall each year, resulting in
substantial benefits associated with increased public safety. Other benefit categories that EPA was not
able to monetize include health and safety benefits, nonuse benefits related to reclaimed land, potential
savings in drinking water treatment costs, and secondary impacts from increases in tourism and
recreation. Omissions, biases and unceitainties in the benefits estimates are discussed in more detail in
the Benefits Assessment (U.S. EPA, 2000a).
8-8
-------
Annual
Present
Value from
Literature 2
667-1,115 $37
Estimated Present
Value of Benefits from
Remining Permits
issued Each Year
Discounted at 7%3.4
$77,000- $129,000
Aesthetic Improvements to
Water Bodies
$380,000 - $635,500
$292,000- $488,500
Recreational Use of
Reclaimed Land
1,773 -2,512
$28
$202,000 - $286,000
$155,000- $220,000
Nonuse (Improved Water
Bodies)
Total $734,000- $1,175,500 ’ $564,000- $904,000
1 Assumes that implementation of the rule will result in an additional 3,11110 4,407 acres of AML permitted for remining per
year, that 57% of those acres are actually reclaimed, and that significant water quality improvements will occur in 38% to 44%
of the reclaimed acres.
2. Per acre per year ($1998). See text for literature sources for these values.
3. Benefits = (Acres reclaimed Value) I ((1 + rY’(I + 5)}, where r discount rate and benefits from remining begin to
8.2 Western Alkaline Coal Mining Subcategory
8.2.1 Environmental Impacts from Western Mining
Affected western mines are located in arid and semiarid regions characterized by very low annual
precipitatiozt In arid and semiarid regions, the natural vegetalive cover is sparse a id rainfall is commonly
received during localized, high-intensity, short-duration storms. These conditions contribute to flash-floods
and turbulent flows that transport large amounts of sediment. Controlling sediment in areas that naturally
contain large amounts of sediment through the predominant use of sedimentation ponds can result in
Additional Acres
AML
reclaimed/year 1
Table 8-1: Summary of Benefit Estimates for the Coal Remitting Subcategoiy
Estimated Present
Value of Benefits from
Remitting Permits Issued
Each Year
Discounted at 3%3 4
Benefit Source
Recreational Use of
Improved Water Bodies
$100,500- $168,000
667- 1,115 $140
667-1,115 $19
$51,500. $86,000
$40,000- $66,500
8-9
-------
numerous non-water quality impacts that harm the environment, including disturbing the natural hydrologic
balance, accelerating erosion, reducing groundwater recharge, reducing water availability, and impacting
large areas of land for pond construction. These impacts have the potential to disrupt fragile habitats and
sensitive hydrological features. To address these impacts, EPA is requiring coal mine operators to
implement BMPs so that post-mined lands are reclaimed to mimic natural conditions that were present
prior to mining activities.
Site-specific best management practices (BMPs) have the potential to conserve topsoil, control swface
erosion and sedimentation, increase vegetation density, and minimize disruption of fluvial stability by using
more holistic approaches to reducing sediment runoff, protecting water quality, and providing water
treannent and drainage control. BMPs may be used singly or in combination with sedimentation ponds to
control and minimize erosion and sedimentation from disturbed areas, thereby reducing the adverse
hydrologic impacts associated with the predominant use of sedimentation ponds.
8.2.2 Potential Benefits Categories
EPA identified two categories of benefits associated with the new subcategoiy: ecological benefits and
economic productivity benefits. Ecological benefits result from improvements to habitats, ecosystems, or
general areas affected by an effluent or disturbed surface area. Although some ecological benefits will
have positive impacts on recreational use values (e.g., recreational fishing, hunting wildlife viewing, etc.),
others are more likely to fall under the traditional nonuse benefit categories.
Ecological benefits from implementation of the final rule have two components:
Land-related benefits : The potential land-related benefits arise from the reduced
disturbance of land area, increased soil conservation, and improved vegetation density.
Use of BMPs will reduce the land area disturbed, resulting in terrcstiial habitat protection
and improvements in aesthetic quality. In addition, implementation of BMPs enhances
soil conservation and promotes vegetation growth and development within reclamation
areas. Enhanced vegetation cover improves terrestrial habitats and attracts wildlife,
potentially resulting in increased species abundance and diversity in the affected areas.
Water-related benefits : The potential water-related benefits arise from the preservation
of natural stream flows. Sedimentation ponds reduce flows to streams and underground
8-10
-------
systems that feed surface waters, thereby reducing natural habitats for riparian and
aquatic species and disturbing natural drainage settings. Ponds also reduce sediment
delivery downstream. In and/semiarid western coal mining regions, climate, topography,
soils, vegetation and hydrologic components all combine to form a hydrologic balance that
is naturally sediment rich. Eliminating sediment deliveiy is likely to disturb d amic fluvial
systems that depend upon a continual source and flow of sediment. Implementation of
BMPs can preserve a more natural sediment delivery. Improved hydrological balance
and an increase in water quan ty is likely to have positive effects on aquatic and npanan
life habitats. The use component of water-related ecological benefits is likely to be
insignificant, however, because many of the water bodies affected by mining drainage are
intermittent and ephemeral in nature and do not support water-based recreation.
Implementation of the new subcategoiy may also generate economic productivity benefits. Because
construction and operation of sedimentation ponds have the potential to reduce the amount of surfhce
runoff available for downstream users, an increase in the quantity of water available for downstream
users is one of the most important benefits of BMP systems. For example, economic productivity gains
are expected to occur through improved supply of irrigation water for agricultural uses, municipal drinking
water, and industrial cooling water. Another possible economic productivity benefit from BMP
implementation is improved post-mining land use. In the and/semiaiid western United States, livestock
grazing is normally a part of the post-mining land use. Improved vegetation density resulting from
implementation of BMPs is likely to increase productivity of the rangeland used for livestock grazing and,
as a result, to increase the value of land for post-mining land uses.
8.2.3 Methodology and Results
This section describes the methodologies EPA used to quantify and monetize the benefits associated with
the new subcategoiy. EPA extrapolated from the WCMWG model mine analysis and industry profile
infonnation to estimate the environmental improvements attributable to the new subcategory (WCMWG,
I 999a). EPA developed monetaly estimates of these environmental impacts using the benefits transfer
techniques described below.
Land-Relaled Benefits
EPA anticipates that land-related benefits of the final rule will accrue from the following three categories:
8-Il
-------
• Decreased acreage disturbed by construction of sediment ponds;
• Increased Soil Conservation
• Improved Vegetation.
Estimation of Benefits from Avoided Disturbance Acres
Adopting the new subcategory is expected to reduce surface disturbance area. Using the three regional
model coal mines, one each for the DSW, IM, and NP regions, EPA projects that 591 fewer acres per
year will be distuibed for sedimentation ponds under the new subcategory. This includes: 37 acres for
each of two Desert Southwest mines, 11.2 acres for each of three Intermountain mines, and 11.8 acres
for each of4l Northern Plains mines.
To value avoided disturbed area, EPA estimated a range of benefits associated with enhanced hunting
opportunities stemming fran improved wildlife habitat. EPA used a benefits transfer methodology from
two wildlife habitat valuation studies to estimate these benefits.
A study by Feather et a!. (1999) provides a lower-bound estimate. The study develops a recreational
demand model for pheasant hunting, where demand is modeled as a function of pheasant habitat
characteristics, including a measure of undisturbed surface area at hunting sites. Undisturbed surface
cover is regarded as a critical habitat characteristic because it provides good nesting cover, insects for
newly hatched chicks, and winter cover. The study estimated the annual hunting benefits from increased
availability of undisturbed open space at $0.37 per acre in the Pacific/Mountain region 24
A study by Scott et al (1998) estimating various components of the natural shrub-steppe habitat value
provides an upper-bound estimate of recreational hunting benefits. The study uses a WTP value for
hunting shrub-steppe-dependent game birds to estimate a recreational element of the land preservation
value. Data yielded an aggregate estimate of annual WTP of $8.2 million for game bird hunting in the
study area, which has approximately 565,498 acres of land available for upland bird hunting Dividing the
24 EPA adjusted the 1992 study value of $0.33 using the change in the Consumer Price Index from 1992 to 1998,
yielding an estimate of $0.37 in 1998 dollars.
8-12
-------
aggregate WTP value by the estimate of bird habitat acreage yields an estimate of $6.00 per acre per
year. EPA adjusted this value according to the number of hunting licences sold in the states affected by
western surface coal mining, 25 resulting in an annual per acre value of $2.46.26
Estimation of Benefits from Increased Soil Conservation
The results from the DSW model mine analysis demonstrate that the new subcategoiy is expected to
promote soil conservation compared to undisturbed conditions. The weighted average soil loss rate for the
undisturbed slopes and slope segments is 4.7 tons per acre per year; the weighted average soil loss rate
for the post-mining model mine reclamation area under the new subcategoiy is 3.0 tons per acre per year.
This difference represents a net change in estimated average soil loss rate of 1.7 tons per acre per year
from the undisturbed to post-mining reclaimed conditions. The soil loss rates for the reclaimed area under
the existing guidelines and new subcategoiy are essentially the same, since the types and applications of
slope stabilizing alternate sediment controls remains similar between them. Therefore, EPA did not
estimate soil conservation benefits.
Estimation of Improved Vegetation
Arid/semiarid reclaimed plant communities tend to have relatively low vegetation cover and productivity,
particularly where annual rainfall is less than 9 inches per year. Total vegetation cover values frequently
fall within the range of 5 percent to 20 percent. Yearly vegetation production tends to be low, with most
reclaimed areas producing between 500 and 1,000 pounds per acre annually. Increased focus on the use
of BMPs would enhance vegetation growth and community development on reclaimed lands compared to
the existing effluent guidelines. Typical vegetative cover in this area ranges only from 5 to 20 percent.
Vegetative cover in a constructed drainage area (which is included in the model mine system) can be 25
percent or more in absolute value. Thus, at least a 5 percent increase is expected for the drainage area
(WCMWG, 1 999a, Section 4.2.2).
25 Hunting licence data are obtained from the 1996 National Survey of Fishing, Hunting, and Wildlife Associated
recreation.
26 Detailed calculations are contained in the Benefits Assessment (U.S EPA, 2000a).
8-13
-------
Individual plant and vegetation community development is holistically linked to all of the factors in the
environment that influence plant germination, establishment, and growth. The WCMWG model mine
analysis indicates that the cumulative effect of BMPs can produce a synergistic benefit to plant growth
that favorably influences vegetation production. The most significant effects that may promote an
increase in vegetation density are summarized below:
• Improved soil moisture availability;
• Decreased soil detachment and erosion;
• Enhanced nutrient retention and availability; and
• Increased plant species diversity resulting from the use of a diverse seed mixture in the
reclamation process.
However, the WCMWG model mine analysis does not quantify changes in vegetation cover, and, as a
result, EPA did not quantify or monetize benefits from enhanced vegetation cover for the new
subcategory.
As shown in Table 8.2, the expected land benefits from the new subcategoiy that could be monetized are
small, most likely ranging from $2,000 to $13,000 discounted at 3 percent and from $1,500 to $11,000
discounted at 7 percent. However, the monetized value does not include a number of benefit categories,
most notably nonuse ecological benefits that may account for the major portion of land benefits.
Water-Related Benefits
Implementation of the new subcatego iy is expected to yield water-related benefits to society by improving
hydrologic and fluvial stability in the watersheds affected by reclamation areas. EPA believes that the
use of BMPs will minimize disniptions to the hydrologic balance. Blockage of natural surface flow would
be minimized through establishment of a natural flow pattern from the reclamation area, and passage of
undisturbed area drainage through the reclaimed area in stable channels, essentially uninterrupted, to the
undisturbed watershed downstream.
8-14
-------
Table 8-2: Annual Land Related Benefits from Wes
tern Mkaiine Con
I Mining Subcategory
Benefit Category Physical Measure
Per Acre
Value ($1998)
Total Value’
Discounted at 3% Discounted at 7%
Avoided surface disturbance Decreases by 591
acres/year
$037
-
$2.47
$2,000 $1,500
- -
$13,000 $11,000
Increased soil conservation Negligible
—
—
Improved vegetation Vegetative cover
Increases by 5%
Not available
Not estimated Not estimated
Total Monetized Land
Benefits
$2,000 $1,500
- -
$13,000 $11,000
‘Numbers have been rounded to the nearest $500.
The DSW model mine analysis was used to characterize the increase in runoff delivered to the drainage
area below the reclamation area. The model predicts that approximately 73 acre-feet of water would be
released downstream from the example reclamation watershed as a result of the receipt of a 10-year,
24-hour precipitation event under the new subcategory. This represents a 49 percent increase in drainage
volume over the existing guidelines for this watershed, and is similar to the 80 acre-feet of drainage
volume from the pre-mining undistuEbed watershed scenario.
EPA estimated benefits from improvements in water quantity using benefits transfer from a study by
Crandall eta]. (1992). The study estimates the recreational value of instream flows that are considered
adequate for supporting abundant streamside plants, animals, and fish. The estimated user value of an
improvement in nparian quality from intermittent to perennial with the associated enhancement in plant
and animal habitat and animal species diversity is $81 .25.27 EPA applied this value to water-based
27 EPA adjusted the study value of $65 (1990$) to 1998 dollars using the relative change in CPI from 1990 to 1998
(1.25).
8-15
-------
recreation consumers residing in the counties affected by western alkaline coal mining operations
discharging or affecting water bodies with perennial flow. 28
Seven perennial streams located in six counties are currently affected by western alkaline coal mining
operations. The number of recreational users residing in these counties are estimated to be equal to the
percent of the population engaged in near-water recreational activities (i.e., including activities such as
wildlife viewing but excluding fishing). EPA found no evidence that fishing occurs in water bodies
affected by the new subcategoiy, and thus assumed that benefits from improvements in fishing are
negligible. Information in EPA’s Reach File I indicates that the ratio of affected reach length to the total
number of reach miles within a county ranges from 0.02 to 0.39. This analysis assumes that recreation
activity among residents of the counties affected by western mining is distributed evenly across all reach
miles within those counties. Accordingly, EPA estimates that 2 percent to 39 percent of users within the
county are affected. The average ratio of reach length to the total number of reach miles within a county
is 0.06. Annual water-related benefits are equal to the affected population multiplied by $81.25 per user.
In this analysis, EPA assumed that riparian and ecological improvements expected to occur in perennial
water bodies as a result of natural flow preservation from improved hydrological stability are similar to
improvements in riparian habitat described in Crandall, Ct al. (1992).
EPA estimated the monetized value of recreational benefits from improved water flow by applying the
WTP value for water flow preservation to water-based recreation consumers residing in the counties
affected by western alkaline coal mining operations discharging to water bodies with perennial flow.
EPA identified six counties, involving approximately 900 users, affected by western mining and containing
the relevant drainage features. The estimated monetazy value of recreational water-related benefits
ranges from $25,000 to $488,000 per year.
28 For detail on drainage features associated with Western Alkaline Coal Mining Subcategory mines, see Table F-3 in
Appendix F of the Coal Resnining and Westeni Alkaline Mining: Economic and Envim,unental Pnflk (U.S. EPA,
1999e).
8-16
-------
Non use Benefits
Individuals who never visit or otherwise use a natural resource may nevertheless be affected by changes
in its status or quality. Empirical estimates indicate that such “nonuse value” may be substantial for
some resources (Harpman eta!., 1993; Fisher and Raucher, 1984; Bergstrom, 1993). Because nonuse
value is a sizable component of the total economic value of water resources, EPA estimated change in
nonuse values using a nile of thumb developed by Fisher and Raucher (1984). For this analysis, EPA
estimates that nonuse benefits are equal to one-half of water-related recreational benefits. This yields a
range of nonuse benefits attributable to the Western Alkaline Coal Mining Subcategory of$ 12,500 to
$244,000 per year. The nonuse benefit rule of thumb method is based on water-related recreation
benefits and is therefore not applied to land-related benefits.
Total Annual Benefits
EPA estimated expected benefits for the new subcategory in terms of land-related benefits and water-
related benefits. As shown in Table 8-3, summing the monetary values reported in the preceding sections
across these two categories results in total monetized benefits per year ranging from $39,500 to $745,000
discounted at 3 percent, and from $39,000 to $743,000 discounted at 7 percent.
Table S-3: Total Monetized Benefits for the Western Alkaline Coal Mining Subcategory
Annual Benefit Values ($1998)’
Benefit Categories Discounted at 3’/. Discounted at 7%
Avoided Surface Disturbance $2,000 - $13,000 $1,500 - $1 1,000
Recreational Benelits from Improved Water Flow $25,000 - $488,000 $25,000 - $488,000
Nonuse Benefits $12,500 - $244,000 $12,500 - $244,000
Total Benefits $39,500 - $745,000 $39,000 - $743,000
‘Results have been rounded to the nearest $500
8-17
-------
Chapter 9
Social Costs and Benefits of the Final Rule
9.0 Introduction
This chapter summarizes the total estimated social costs and benefits of the two new subcategories. The
estimated social costs include industiy compliance costs and the costs incurred by NPDES permitting
authorities to implement the final rule. The benefit estimates presented reflect only those benefit
categories that EPA was able to quantify and monetize. However, benefit categories that EPA was not
able to quanti1 r and/or monetize are briefly reviewed. The chapter also examines assumptions,
exclusions, and uncertainties in the economic impact analysis, and where possible, indicates the direction
of their potential bias on the estimated costs and benefits.
9.1 Social Costs and Benefits of the Final Coal Remining
Subcategory
The previous chapters of this report provide detailed information on the Agency’s cost and benefits
analyses for the final rule. This section summarizes the results of the analyses for the final Coal Remining
Subcategoiy. Table 9-1 presents EPA’s estimate of the total annual social costs and benefits attributed to
the new subcategory.
EPA projects that states will permit 43 to 61 new remining sites each year under the new subcategoiy.
Based on this projection, EPA estimates annual industry compliance costs in the range of $333,000 to
$758,500. This estimate includes potential costs associated with increased BMP effort (i.e., pollution
abatement plan costs) and additional monitoring Estimated annual costs to NPDES permitting authorities
are between $47,500 and $67,500.
9-I
-------
Table 9-1: Annual Social Costs and Benefits of the fb al Coal Reinlaing Subcategory ($1998)
Social Costs: Discounted at 7%
Compliance Costs:
Additional BMP effort $199,500- $565,000
Monitoring costs $133,500- $193,500
Costs to NPDES Permitting Authorities: $47,500- $67,500
Total Social Costs 5380,500- 5826,000
Monetized Benefits: Discounted at 3% Discounted at 7%
Recreational Use of Improved Water Bodies $100,500- $168,000 $77,000- $129,000
Aesthetic Improvements to Water Bodies $380,000- $635,500 $292,000- $488,500
Nonuse (related to improved water bodies) $51,500- $86,000 $40,000- $66,500
Total Water-Related Benefits: $532,000- 5889,500 5409,000 - 5684,000
Recreational Use of Reclaimed Land $202,000 - $286,000 $155,000- $220,000
Total Monetized Benefits : 5734,000-51,175,500 5564,000 - 5904,000
Note: Totals may not add due to rounding
The estimated total annual social cost of the new subcategory ranges from $380,500 to $826,000.
The total monetized benefits range from $734,000 to $1,175,500. Between 72 and 76 percent of the total
monetized benefits ($532,000 to $889,500) result from prqjected improvements to water bodies. Of the
wat -related benefits, 71 percent ($380,000 to $635,500) reflects the value of aesthetic improvements to
water bodies, 19 percent ($100,500 to $168,000) reflects water-related recreational benefits, and the
remainder ($51,500 to $86,500) reflects nonuse benefits. Estimated land-related benefits result from
iiupioved recreation on reclaimed lands, including hunting and wildlife-viewin& and account for 24 to 28
percent of the total monetized benefits ($202,000 to $286,000).
In addition to the benefits EPA was able to monetize, the projected increase in rexnining is expected to
result in the removal of approximately 216,000 to 307,000 feet of highwall each year, resulting in
substantial benefits associated with increased public safety. Furthermore, increased remining has the
9-2
-------
potential to recover and utilize coal resources that might otherwise remain unrecovered. Other benefit
categories that EPA was not able to monetize include health and safety benefits, nonuse benefits related
to reclaimed land, potential savings in drinking water Ireatment costs, and secondary economic impacts
from increases in tourism and recreation.
Table 9-2 provides an overview of the assumptions, exclusions, and uncertainties in EPA’s economic
impact analysis, and where possible, indicates the direclion of their potential bias on the estimated costs
and benefits. Unceitainties result from the fact that the subcategoiy will apply to new rem ning permits
for sites with unknown characteristics.
9.2 Social Costs and Benefits of the Final Western Alkaline Coal
Mining Subcategory
The previous chapters of this report provide detailed information on the Agency’s cost and benefits
analyses for the final nile. This section summarizes the results of the analyses for the final Western
Alkaline Coal Mining Subcategoiy. Table 9-3 presents EPA’s estimate of the total annual social costs
and benefits attributed to the new subcategoiy.
The final Western Alkaline Coal Mining Subcategoiy is projected to result in substantial industry cost
savings while creating environmental benefits for society. EPA believes that the only incremental
industry compliance costs attributed to the new subcategoiy is associated with the watershed modeling
requirements, estimated to be approximately $327,000 per year. These costs would be offset by reduced
sediment control costs associated with implementing the required sediment control plans (an estimated
savings of approximately $12.7 million) and savings resulting from an expected reduction in the
reclamation bonding period (an estimated savings of $341,900 to $501,400). EPA estimates that the
annual cost to NPDES permitting authorities to implement the new subcategoiy will be approximately
$12,500, resulting in a total annual social cost savings of approximately $12.8 million.
9-3
-------
Table 9-2: Assumptions, Exclusions & Uncertainties in Estimated Coal Remining Subcategory Costs and
Benefits
Omission! Uncertainty
:
Likely impact
on Estimated Costs
Likely Impact
on Estimated
Benefits
Uncertainty about the number and characteristics of sites that
will be remined under the new subcategoiy
?
.
7
Assumption that remining sites in illinois, Indiana, and
Tennessee will require 12 baseline samples and flow weirs
+
Assumption that monthly compliance monitoring will be
required
?
Estimate of four discharge points per mine site requiring
monitoring
7
.
Assumption that alkaline addition will be required for 10% of
surface and underground remining sites
7
Health and safety improvements excluded
Land-related nonuse benefits excluded
Savings in drinking water treatment costs excluded
Indirect or secondary economic impacts (e.g., new
industry/business to support increases in tourism and
recreation) excluded
Possible differences in environmental characteristics of pre-
existing discharges between benefits transfer study sites
(mostly sediment) and future remining sites (AMD)
?
Potential that remined AML sites have undergone some
natural reclamation.
.i.
Significant decreases in AMD loads not correlated with
. .....
.
.. . .
+
..
All reclaimed acreage is expected to provide improved
hunting, fishing and wildlife viewing opportunities (the
relative value of other land uses may be higher or lower than
the value associated with recreation)
!.
?
+ may overstate costs or benefits; - may understate costs or benefits; ? likely effect unknown.
9-4
-------
Table 9-3: Annual Social Costs/Savings and Benefits of the Final Western Alkaline Coal Mining
Subcategory ($1998)
Social Costs Discounted at 7%:
Compliance Costs (Savings)
Incremental Modeling Costs $327,000
Sediment Control Costs (Savings) ($12,721,000)
Earlier Phase 2 Bond Release (Savings) ($341,900- $501,400)
Costs to NPDES Permitting Authorities: $12,500
Total Social Costs (Savings) (512,723,400-512,882,500)
Annual Benefit Values ($1998)
Benefit Categories Discounted at 3% Discounted at 7%
Avoided Surface Disturbance $2,000- $13,000 $1,500- $11,000
Recreational Benefits from Improved Water Flow $25,000- $488,000 $25,000- $488,000
Nonuse Benefits $12,500- $244,000 $12,500- $244,000
Total MonetizedBenefils $39,500- $745,000 $39,000- $743,000
Note: Totals may not add due to rounding
The final Western Alkaline Coal Mining Subcategory is also expected to result in environmental benefits.
Total monetized benefits range from $39,500 to $745,000 per year discounted at 3 percent, and from
$39,000 to $743,000 per year discounted at 7 percent. The majority of the monetized benefits results from
improved water flow that will preserve perennial water bodies affected by western coal mining
operations. The improved flow is expected to result in benefits to water-based recreation consumers, and
in water-related nonuse benefits. Land-related benefits result from reduced disturbance of land areas.
EPA estimated the value of enhanced hunting opportunities associated with the undisturbed lands, but was
not able to monetize other land-related benefits. Categories of benefits that EPA was not able to
monetize include land-related ecological benefits, the benefits of increased vegetative cover, and possible
recreational fishing benefits.
Table 9-4 provides an overview of the assumptions, exclusions, and uncertainties in EPA’s economic
impact analysis, and where possible, indicates the direction of their potential bias on the estimated costs
and benefits.
9-5
-------
Table 9-4: Assumptions, Omissions & Uncertainties in Estimated Western Alkaline Coal Mining
Subcategory Costs and Benefits
Omission/Uncertainty
Likely Impact
on Estimated Costs
Likely Impact
on Estimated
Benefits
Assumption that sediment control costs per acre and impacts
on loadings and vegetation for the model mine are
representative for all western surface mines
9
?
Assumption that all surface coal mines will incur incremental
modeling costs of $50,000
+
Assumptions about the cost of performance bonds and the
effect of the subcategory on the timing of Phase 2 bond release
?
Ecological nonuse benefits not included for land-related
benefits
•
Benefits of increased vegetative cover not monetized
—
Recreational fishing benefits excluded
Recreational benefits from water quality improvements
consider resident users only
Recreational benefits from water quantity improvements
assume that perennial stream flows are preserved
+
Unknown recreational impo rtance of the affected sites
?
Sites for which infonnation on drainage features is not
available excluded from water-related benefits analysis
!
—
+ may overstate costs or benefits; - may understate costs or benefits; ? likely effect unknown.
9-6
-------
References
Bergstrom, J.C. 1993. Benefits & Costs Transfer in Natural Resource Planning. University of Georgia,
Department of Agriculture and Applied Economics. September.
Crandall, K., B. Colby, and K. Rait. 1992. Valuing Riparian Areas: A Southwestern Case Study. Rivers
3, No 2, 1992, pp. 88-89.
DRI/McGraw-Hill and Standard & Poor’s and U.S. Department of Commerce/International Trade
Administration. 1998. U.S. Industry & Trade Outlook ‘98. New York.
Dun & Bradstreet, facility and ultimate (parent) firm employment and revenues, accessed through EPA’S
IDEA database.
Feather, P., D. Hellerstein and L. Hansen. 1999. Economic Valuation of Environmental Benefits and the
Targeting of Conservation Programs, The Case of the CR?. USDA, Agricultural Economic Report No.
778. April.
Fisher, A. and R. Raucher. 1984. Intrinsic Benefits of Improved Water Quality: Conceptual and Ethical
Perspectives. Advances in Applied Micro-Economics. Vol. 3, pp. 37-66.
Harpman, D.A. et al. 1993. Nonuse Economic Value: Emerging Policy Analysis Tool, Rivers, Vol. 4
No.4, pp. 280-29 1.
Hawkins, J.W., 1995. Characterization and Effectiveness ofReminingAbandoned Coal Mines in
Pennsylvania. Report of Investigations (Ri 9562) prepared for Bureau of Mines, United States
Department of Interior.
Interstate Mining Compact Commission (IMCC). 1999. Solicitation Sheet, Summary of Responses,
July. Details available from the U.S. EPA Sample Control Center, operated by DynCorp 1&ET, 6101
Stevenson Avenue, Alexandria, VA 22304.
Keystone Coal Industry Manual, 1998.
Kentucky Department of Surface Mining Reclamation and Enforcement (DSMRE). 1998. Reclamation
Advisory Memorandum #129: Remining Issues and Procedures. April 21.
http:f/www.coaleducation.org/reg-agenlraml 29.htm.
Kentucky Revised Statutes. 1998. Title XXVIII- Mines and Minerals Chapter 350 Surface Coal
Mining.
Pennsylvania. 1998a. Title 25. Environmental Protection Chapter 86. Surface and Underground Coal
Mining General. Department of Environmental Protection.
R-I
-------
Pennsylvania. 1998b. Title 25. Environmental Protection Chapter 87. Surface Coal Mining.
Department of Environmental Protection.
Pennsylvania Department of Environmental Protection (PA DEP). 1997. A Status Report on the
Environmental Legacy of Coal Mining in Pennsylvania. httpiwww.dep.state.pa.us.
Pennsylvania Department of Environmental Protection (PA DEP). I 999a. Pennsylvania Remining Site
Study. Details available from the U.S. EPA Sample Control Center, operated by DynCoip 1&ET, 6101
Stevenson Avenue, Alexandria, VA 22304.
Pennsylvania Department of Environmental Protection (PA DEP). 1 999b. NALIS, Pennsylvania’s
Abandoned Mine Land Inventory System.
Randall, A., 0. Gnmewald, S. Johnson, R. Ausness, and A. Pagoulatos. 1978. Reclaiming Coal Surface
Mines in Central Appalachia: A Case Study of Costs and Benefits. Land Economics, Vol. 54, No.4,
November.
Scou M., G.R. Bilyard, SO. Link, CA Ulibarri, H. Westerdahi, P.F. Ricci, and H.E. Secly. 1998.
Valuation of Ecological Resources and Functions. Environmental Management, Vol. 22, No. 1:49-68.
Smith, S. and J. Bridger. 1998. Socioeconomic Impacts of Mine Reclamation Projects, Broad Top
Township. Final Report to the Westem Pennsylvania Coalition for Abandoned Mine Reclamation.
Leo Troy, Almanac of Business and Industrial Financial Ratios, 1997 Edition.
United States Bureau of the Census. 1992 Census of the Mineral Industries.
United States Bureau of the Census. Statistics of US. Businesses, 1996. In cooperation with the SBA
Office of Advocacy. http//www.sba.gov/advo/stats/int_data.html.
United States Bureau of Economic Analysis. Regional Input-Output Modeling System (RIMS!!).
United States Department of Energy. Energy Information Administration. 1995. Coal Data: A
Reference. DOE/EIA-0064(93). February.
United States Department of Energy. Energy Information Administration. 1997. Coal Industry Annual
1997. DOE/EIA-0584(97).
United States Department of Energy. Energy Information Administration. 1999. Coal Data File
Summaries. httpi/www.eiadoe.gov/cneaf/coal/datalsummaiy/files.html
United States Department of the Interior. I 998a 1998 Appalachian Regional Award: Muddy Creek East
Reclamation, Pennsylvania. Office of Surface Mining. http://www.osmre.gov/awardpa.htm
United States Department of the Interior. 1998b. AMLIS Database. Office of Surface Mining
Reclamation and Enforcement.
R-2
-------
United States Department of the Interior. 1998c. Reclamation Bonds for Coal Mining Operations.
Office of Surface Mining http:/ www.osmrc.gov/bondicigMttn
U.S. Department of the Interior. 1 998d. Annual Evaluation Summary Report for the Regulatory
Program Administered by the Knoxville Field Office of Tennessee for Evaluation Year 1998.
Office of Surface Mining Reclamation and Enforcement. November.
http://www.osmre.gov/rcport98.htm
U.S. Department of the Interior. 1998e. Annual Evaluation Summary Report for the Regulator)’ and
Abandoned Mine Land Programs Administered by the Slate of West Virginia for Evaluation Year
1998. Office of Surface Mining Reclamation and Enforcement. http://www.osmre.gov/report98.htm
United States Department of the Interior. 1999a. Telephone conversation between Joe (3aletovic, U.S.
Office of Surface Mining, Denver, CO. and K. Strellec, U.S. EPA Office of Water, Washington, DC.
December 1.
United States Department of the Interior. 1 999b. Comments on Habitat Management Inc.’s Alternate
Sediment Controls -- Factors Affecting Modeling and Planning Costs. Letter from Joe Galetovic, U.S.
Office of Surface Mining, Denver, CO. to William Telliard, U.S. EPA Office of Water, Washington, DC.
November 23.
U.S. Department of the Interior. 1 999c. Annual Evaluation Summary Report for the Regulatory and
Abandoned Mine Lands Reclamation Program Administered by the State ofAlabama for Evaluation
Year 1999. Office of Surface Mining Reclamation and Enforcement. November.
http://www.osmre.gov/repoit99.htm
U.S. Department of the Interior. 2000. Annual Evaluation Summary Report for the Regulatory
Program Administered by the State of Marylandfor Evaluation Year 1999. Office of Surface
Mining Reclamation and Enforcement. January. httpi/www.osmre.govfteport99.htm
United States Department of the Interior. Undated. Remining Program Briefing. Provided by Douglas
(]rowitz, OSM.
United States Environmental Protection Agency. 1985. 40 Code of Federal Regulations part 434-Coal
Mining Point Source Category BPT, BAT, BCT Limitations and New Source Performance Standards.
United States Environmental Protection Agency (U.S. EPA). 1995. EPA Region III GIS Acid Mine
Drainage Database.
United States Environmental Protection Agency. 1996. TMDL Tracking System (303(d) Database).
http://www.epa.gov/owowwtrl/tmd lla lpanot42999.htm l
United States Environmental Protection Agency (U.S. EPA). I 999a. Coal Remining Database. Office
of Science and Technology. Details available from the U.S. EPA Sample Control Center, operated by
DynCorp I&ET, 6101 Stevenson Avenue, Alexandria, VA 22304.
R-3
-------
United States Environmental Protection Agency (U.S. EPA). I 999b. Final Estimation of Facilities
Affected by Proposed Remining Subcategoiy. Memo from John Tinger, U.S. EPA Office of Water.
September 27.
United States Environmental Protection Agency (U.S. EPA). 1999c. Final Cost Methodology for
Proposed Option II: Remining. Memo from John Tinger, U.S. EPA Office of Water. September 27.
United States Environmental Protection Agency (U.S. EPA). 1999d. Sampling Requirements: Rahall vs.
Non-Rahall. Telephone survey between N. Jannelle, DynCorp 1&ET, and State NPDES officials.
Details available from the U.S. EPA Sample Control Center, operated by DynCorp 1&ET, 6101
Stevenson Avenue, Alexandria, VA 22304.
United States Environmental Protection Agency (U.S. EPA). l999e. Coal Remining and Western
Alkaline Mining: Economic and Environmental Profile. December.
United States Environmental Protection Agency (U.S. EPA). 2000a. Benefits Assessment of Proposed
Effluent Limitations Guidelines and Standards for the Coal Mining Industry: Remining and Western
Alkaline Subcategories. February.
United States Environmental Protection Agency (U.S. EPA). 2000b. Information Collection Request
Supporting Statement for Baseline Standards and Best Management Practices for the Coal Mining
Point Source Category (40 CFR part 434) - Coal Remining Subcategory and Western Alkaline Coal
Mining Subcategory. January 18.
United States Environmental Protection Agency (U.S. EPA). 2000d. Coal Remining -- Best
Management Practices Guidance ManuaL EPA-821-R-00-007. March.
United States Environmental Protection Agency (U.S. EPA). 2001. Development Document for Final
Effluent Limitations Guidelines and Standards for the Western Alkaline Coal Mining Subcategory.
EPA-821 -B-0l -012.
United States Securities and Exchange Commission. EDGAR Database.
http://www.sec.gov/edgarhp.htm.
United States Small Business Administration. Small Business Size Standards by SIC Code, as of June 14,
1999. http://www.sba.govfregulations/siccodes.
Veil, John A. 1993. Coal Remining: Overview andAnalysis. Prepared for U.S. DOE by Argonne
National Laboratory. March.
Viscusi, W. Kip. 2000. Misuses and Proper Uses of Hedonic Values of Life. Discussion Paper No.
292. Cambridge, MA: Harvard Law School: The Center for Law, Economics, and Business. August.
R-4
-------
Western Coal Mining Work Group (WCMWG). 1999a. Western Alkaline Mining Subcategory Mine
Modeling and Performance-Cost-Benefit Analysis (“Model Mine Report”). Draft, June 9. Details
available from the U.S. EPA Sample Control Center, operated by DynCorp 1&ET, 6101 Stevenson
Avenue, Alexandria, VA 22304.
Western Coal Mining Work Group (WCMWG). I 999b. Profile of Western Alkaline Surface Mines.
D ails available from the U.S. EPA Sample Control Center, operated by DynCorp 1&ET, 6101
Stevenson Avenue, Alexandria, VA 22304.
Western Coal Mining Work Group (WCMWG). 1999c. Technical Information Package: Western
Alkaline Mining Subcategory. Details available from the U.S. EPA Sample Control Center, operated
by DynCorp 1&ET, 6101 Stevenson Avenue, Alexandria, VA 22304.
Western Coal Mining Work Group (WCMWG). 2001. Western Alkaline Coal Mining Subcategoxy
Intezmountain and Northern Plains Regions Economic Analysis Addendum. Draft. April 30.
R-5
-------
Appendix A
State Remining Programs
Many states have been delegated authority under SMCRA and NPDES programs, and several states
have established or are developing remining programs. State remining penrat tem s and conditions must
adhere to provisions established in the SMCRA regulations, except where these provisions are modified
by the state and approved by the Secretaiy of the Interior. This appendix presents selected information
on state remining programs and provides an overview of current state monitoring requirements for coal
remining sites.
A.1 State Programs
Pennsylvania
The Commonwealth of Pennsylvania has a particularly active remining program. Pennsylvania provides a
single application that covers both SMCRA and NPDES requirements. Under remining regulations that
were approved by OSM and EPA in March 1986, Pennsylvania establishes best professional judgement
(BPJ) limits for pre-existing discharges. Bond release is contingent on the post-mining discharge having
pollutant levels equal to, or less than, the pre-remining baseline. Pennsylvania has formalized and
standardized the permit process using a series of worksheets, modules (the REMINE program developed
by EPA and researchers at Pennsylvania State University), and forms to allow efficient processing of
remining applications. Applicants must provide data on baseline water quality and quantity sufficient to
characterize baseline pollutant levels, and must develop a pollution abatement plan that is integrated with
the mining and reclamation plan. The pennitting authority establishes baseline limits for acidity, iron and
manganese based on a BPJ analysis.
Pennsylvania also has an incentives program for remining operators. The Remining Operator’s
Assistance Program (ROAP) provides subsidies to eligible operators for the initial land surveying and
A-i
-------
bonding requirement costs. The party responsible for creating the abandoned mine land cannot be an
eligible operator. Subsidies include payments to a qualified consultant to:
(1) Assess existing resources within the area adjacent to the proposed reinining area that may be
affected by sur1 ce mining activities;
(2) Collect and report general hydrological information of the proposed reinining area;
(3) Prepare a statement of results of test borings or core samples; and
(4) Provide a detailed plan of the proposed surface coal mining activities.
Subsidies may also be used to meet operator bonding obligations. Operators must reimburse the
Commonwealth for the cost of the services performed if they do not meet their obligations as described in
Title 25 of the Pennsylvania Code for Environmental Protection section 86.270 (relating to operator
liability). As of July 1999, Pennsylvania had permitted 343 remining operations, including 300 Rahall-type
permits.
Kentucky
Kentucky has a remining program similar to Pennsylvania’s. Kentucky’s permitting program requires
applicants to submit baseline monitoring data and an abatement and reclamation plan. In addition,
applicants may submit results from the REMLNE program. The applicant must demonstrate that remining
operations have the potential to improve water quality. The pennit limits are based on BPJ analysis.
While Kentucky’s program is meant to create incentives for the reclamation of AML in general, it offers
particular incentives for small mine operators. Under the Kentucky Revised Mining Statutes, small mine
operators are subsidized for at least 20 percent of the initial surveying and planning costs of remining
AML. In the event that no bids are submitted by small coal operators, these funds may be transferred to
the public. The State of Kentucky also provides bonding assistance to any applicant who obtains an
approved remining permit. Under this assistance program, the Bond Pool Commission may provide
coverage to mine operators for up 1050 percent of the bond amount determined necessary to ensure
reclamation of the remined area. The slate also imposes lower bonding requirements for eligible remining
sites: there is a two year bonding period for remining, and the base bond rate for remining areas is $1,500
A-2
-------
per acre instead of the $2,500 per acre rate that normally applies (Kentucky Department for Surface
Mining Reclamation and Enforcement, 1998).
Alabama
According to OSM’s Annual Evaluation Summary Report for Alabama, many coal mine operators are
combining remining of AML acres with regular coal mining. Sixteen of 21 permits issued by the state
between October 1996 and September 1998, and 5 of 6 permits issued between October 1998 and April
1999, involved some remining of AML acres. OSM provided assistance to the state by presenting
information on the national remining initiative and the regulatory auihonties affecting remining, and by
encouraging interest in expanded remining. OSM is discussing the potential for a working partnership of
the coal industry, the state regulatory authority, and OSM to discuss issues that would encourage
additional remining in the state (U.S. DO!, 1 999c).
Tennessee
OSM has implemented the SMCRA regulatory program in Tennessee since the state repealed its surface
mining law in October 1984. The Knoxville Field Office of the OSM formed a remining team in May
1996. The Team solicited remining initiatives from industry, the environmental community, and regulators.
The State has recently begun working with industry and OSM on a case by case basis to modify effluent
limitations requirements for remining sites (U.S. DO!, 1998d).
West Virginia
West Virginia’s NPDES penrutting requirements include the Rahall provisions which allow for modified
effluent limits in remining permits based on Best Professional Judgement (BPJ). Monitoring of baseline
conditions for at least 12 months is required, and the BPJ limits cannot exceed levels of pH, iron and
manganese in pre-existing discharges (U.S. DOl, 1998e).
A-3
-------
Maryland
The majority of coal that was surface mined in Maiyland during the penod October 1998 to September
1999 was recovered from reinining operations. Maiyland promotes remining and issued a Reclamation
Advisoiy to all coal operators in Maiy land in March 1999 outlining remining benefits and incentives to the
coal mining indusuy. The Maryland reznining program includes a variety of incentives, including bond
credits, reduced bond liability peiiod, excess spoil disposal on AML, and Rahall-type modified effluent
limitations for pre-existing discharges (U.S. DO!, 2000).
A..2 Summary of State Sampling Requirements
The IMCC solicitation collected information on twenty states’ remining programs (IMCC, 1999). As of
July 1999, seven of the twenty states responding (Alabama, Kentucky, Maryland, Ohio, Pennsylvania,
Virginia and West Virginia) had issued Rahall permits, and another four states (Illinois, Indiana, Missowi,
and Tennessee) had issued non-Rahall remining permits. Pennsylvania had issued by far the greatest
number of Rahall permits (300), followed by Alabama (10).
EPA collected information on the state monitoring requirements for reniining operations in the seven
states that have issued Rahall permits to characterize the regulatory baseline for the new subcategory.
Table A. I lists the current State monitoring requirements for both Rahall and non-Rahall permits in each
of these states.
A-4
-------
Table Al: State Sampling Requlrements Rahali vs. Non-Rahall Sites
State Baseline Monitoring
Dunn
g Mining Post-Mining
Requirements
Rahall Non-Rahall
Rahall
Non-Rahall RahaLl Non-Rahall
Alabama 6 monthly 6 monthly Monthly Monthly Monthly, for at least one year, Monthly, for at least one year,
samples samples typically at Phase II Bond typically at Phase II Bond
Release (2 yrs.) Release (2 yrs.)
Kentucky 6-12 monthly None 2 per month 2 per month 6 months + biological 2/month until Phase 1; 6
samples + months of monthly; then
Biological quarterly until Phase ill
Assessment
Maryland 12 monthly 6 monthly Monthly Quarterly Monthly, for at least one year Quarterly
samples samples
Ohio 12 monthly 6 monthly Quarterly Quarterly Quarterly until Phase ill Quarterly until Phase ill
samples samples
Pennsylvania 12 monthly 6 monthly Monthly Quarterly Monthly, for at least one year, Quarterly
samples samples typically at Phase I I Bond
Release (2 yrs.)
Virginia 12 monthly 6 monthly Biweekly Biweekly Monthly, for at least one year, Monthly, for at least one year
samples samples typically at Phase II Bond
Release (2 yrs.)
West Virginia Twice monthly 2 per month 2 per month 12 consecutive months of semi-
for 12 months monthly samples after Phase I
Bond Release
A-5
-------
Appendix B
AML Reclamation Program
B.1 AML Reclamation Program and Fund
Title IV of SMCRA established the AML Reclamation Program in response to concern about extensive
environmental damage caused by past coal mining activities. The program is funded prinianly from a fee
collected on each ton of coal mined in the countzy. The fee is deposited into a special fund, the
Abandoned Mine Land Fund, and is appropriated annually to address abandoned and inadequately
reclaimed mining areas where there is no continuing reclamation responsibility by any person under state
or federal law. Mine operators must make fee payments quarterly and accompany them with a statement
reporting the amount and type of coal mined during the quarter. The per ton fee schedule is as follows:
• 35 cents for coal produced by surface coal mining;
• 15 cents for coal produced by underground mining; and
• 10 cents for lignite coal.
While the program was initially slated to run from 1977 to 1992, Congress has reauthorized the tax to
generate AML funds through 2004. Even with this extension, OSM has estimated that only 10 percent of
AML problem areas will be corrected over the life of the reclamation program. According to estimates in
the Abandoned Mine Land Inventory System, the most serious AML problems — those identified as
Priority 1 or Priority 2 sites — would cost more than 2.6 billion dollars to reclaim. These include
highwalls, open shafts and accessible underground mines presenting a danger to human health , safety and
welfare. Many other AML sites — Priority 3 sites that do not pose the same degree of danger to the
public but that do adversely affect the environment — would cost tens of billions dollars more to correct.
There is veiy little likelihood that enough AML money will be available to fund all the reclamation of even
the most serious of the eligible sites, let alone the eligible sites with only environmental impacts. Programs
B-I
-------
that encourage renuning have the potential to address some of the AML problems without spending public
funds.
B.2 AMLIS
As desciibed in Chapter 2, the Office of Surface Mining (OSM) reports information on Abandoned Mine
Land (AML) in the Abandoned Mine Land Inventory System (AMLIS) database. AMLIS presents data
collected by OSM program officials, States and Tribes on lands and waters adversely affected by past
mining (primarily coal mining) that are eligible for reclamation under the Abandoned Mine Reclamation
Fund. The database is updated as new problems are identified and as existing problems are reclaimed.
States are required to inventory only AML with Priority 1 and Priority 2 problems — those that pose
threats to health, safety and the general welfare of people. Reporting on lower priority sites (those that
pose enviro4unental problems (Prionty 3) or that involve public facilities or the devdopment of publicly-
owned land (Priority 4 or 5) is volunlaiy and hence may not be complete.
The “problem area” is the primaiy geographic unit reported in AMLIS. Problem areas are classified by
priority and by “problem type.” A problem area may have more than one problem type, but each problem
type is reported only once for each problem area. There were 31,887 problem area/problem type
combinations in AMLIS as of Februaty 1999. Of these totals, only a subset are coal mining sites with
pre-existing discharges that have not yet been remediated or funded for reclamation. These sites are
potentially affected by the new subcategoiy. Of the total reported in AMLIS, 7,966 problem areas
(covering 368,803 acres and reporting 18,426 problem types) are coal mining sites for which some or all
problems are not yet reclaimed or funded for reclamation. Of these, 2,188 problem areas (covering
55,352 acres) have some type of water quality problem. EPA’s analysis of the Al’vILIS data included
AML with the following problem types as sites with water quality problems: clogged streams; clogged
stream lands; hazardous water body polluted water body: agjicultural or industrial use; polluted water
body human consumption; and water problem.
B-2
-------
The following are definitions of these and other AMLIS problem types:
Pnority 1 and 2 Problem Types
Clogged Streams Lands. Any AML-related pile, bank, mine waste, or earth material distributed by
mining activity which could be eroded and carried downstream by surface runoff. Clogged stream lands
are measured in acres of land affected by spoil, mine waste and earth material that are directly
contributing to the clogged streams. Those piles and banks which arc identified and included as other
AML problem types, such as dangerous highwalls, are not included in this problem type.
Clogged Streams. A filled stream bed, usually in a narrow valley, with AML-otiginated silt and debris
carried downstream by surface runoff. This causes reduced carrying capacity of the stream resulting in a
danger top p and human health, safety and welfare. Clogged streams are measured in miles of
streams that must be dredged to abate the problem.
Dangerous Highwalls. Any unprotected, unreclaimed highwall located in close proximity to a populated
area, public road, or other area of intense visitation, which poses a threat to the public health, safety and
general welfare.
Dangerous Impoundments. Any AML-related, large-volume water impoundments such as mine waste
embankments, sedimentation ponds, or underground mine water pools which pose a threat of flooding and
catastrophic destruction to downstream property and human health, safety and general welfare.
Dangerous Piles or Embankments. Any AML-rel ted waste pile or bank located within close distance
to a populated area, public road, or other area of intense visitation, and posing a danger to public health,
safety and general welfare by adverse effects resulting from an unstable steep slope or wind-blown
particulate matter.
Dangerous Slides. A land mass slide of surface-subsurface soil, a mine waste pile or bank, or surface
mine spoil that, due to instability of its own weight or lubricating effects of mine drainage water,
B-3
-------
endangers the public or threatens destruction of improved property located uphill or downhill from the land
mass.
Gases: Hazardous or Explosive. Any A1 4L-reIated venting of hazardous or explosive gases. Includes
h z rdous or explosive gases problem areas unrelated to underground mine fires.
Hazardous Equipment or Facilities. Dilapidated b dous equipment or läciities located within close
proximity of populated areas, near public roads, or other areas of intense visitation.
Hazardous Water Body. impounded water, regardless of depth or surface area, that is considered an
attractive nuisance and is located within close proximity to a populated area, public road, or other areas of
intense visitation. The hazard must result from some AML-related feature(s) such as steep or unstable
banks, hidden underwater ledges, or rocks or debris on the bottom.
Industrial or Residential Waste. Unauthorized use of AML-impacted areas for residential or industrial
waste disposal that poses a danger to the public from unsanitaiy conditions or from the toxic emissions
from burning refuse.
Polluted Water Body: Human Consumption or Agricultural and Industrial Use. Surface or
subsurface water used for either direct human consumption, or agricultural, industrial or recreational
puiposes which does not meet the standards (especially those for suspended solids, acid or alkaline
conditions, heavy metals concentrations, or radioactivity) appropiiate to the historical use.
Portals. Any AML-related surface entrances to a drift, tunnel, adit or ently which is not sealed or
barricaded and is posing a threat to the public.
Subsidence. Any surface expression of subsidence such as tension cracks, troughs, shearing faults, or
caving caused by AML-related underground mine voids which may damage property and endangers the
public.
B-4
-------
Surface Burning. The continuous combustion of mine waste material resulting in smoke, haze, heat, or
venting of hazardous gases which is currently occurring or demonstrated to occur on a regular basis.
Burning in a mine dump, even if beneath the surface of the material, is also considered surface burning.
Underground Mine Fires. The continuous combustion of underground mine waste material resulting in
smoke, haze, heat, or venting of hazardous gases which pose a danger to the public.
Vertical Openings. Openings which typically occur when subsidence results in a vertical or steeply-
inclined shafi; isolated pothole or opening which is not sealed or barricaded and that poses a threat to
public health, safely and general welfare.
Priority 3 Problem Types
Bench. A ledge that forms a single level operation along which mineral or waste material are excavated.
The portion of a bench formed on solid, unexcavated material is considered a solid bench, and the portion
which consists of unconsolidated spoil material extending outward from the solid bench is considered a fill
bench.
Industrial or Residential Waste Dump. An area used to dispose of any kind of industrial or residential
waste not related to mining or processing.
Gob. Refuse or waste removed from a mine. This includes mine waste, rock, pyrites, slate or other
unmarketable material which is separated during the cleaning process.
High wall. The face of exposed overburden or the face or bank on the uphill side of a contour strip mine
excavation or the vertical wall consisting of the deposit being mined and the overlying rock and soil strata
of the mining site.
Haul Road. A heavy built road which wns from pit to loading dock, tipple ramp or preparation plant and
is used for transporting mined materials.
B-5
-------
Pit. The last uncovered cut adjacent to the highwall. In surface mining the working area may be known
as a strip pit, and mine workings or excavations open to the surface are also tenned pits.
5 poii Area. The overburden material removed in gaining access to a coal seam or mineral deposit.
Slurry. A fine particle-size material from coal or mineral proce.tcing stored in a pond. This solid must be
separated from the water in order to have clear effluent for refuse or discharge.
Slump. A surface expression resulting from the caving in of underground mine voids.
Equipment and Facilities. Any equipment or buildings used to mine, process or transport coal or mineral
ores.
Mine Openings. Any surface entrance or opening related to an underground mine excavation.
Water Proble,n When water leaving the AML problem area causes a negative environmental impact
because of its pH, sediments load, or other pollutants, or because of its effect on other lands due to poor
drainage conditions (i.e., agiicultural flooding).
B-6
------- |