Interim Joint Committee on Natural Resources and Environment


Minutes of the<MeetNo1> 5th Meeting

of the 2010 Interim


<MeetMDY1> October 7, 2010


Call to Order and Roll Call

The<MeetNo2> 5th meeting of the Interim Joint Committee on Natural Resources and Environment was held on<Day> Thursday,<MeetMDY2> October 7, 2010, at<MeetTime> 1:00 PM, in<Room> Room 149 of the Capitol Annex. Representative Jim Gooch Jr., Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Brandon Smith, Co-Chair; Representative Jim Gooch Jr., Co-Chair; Senators David E. Boswell, Ray S. Jones II, Bob Leeper, Dorsey Ridley, John Schickel, Katie Kratz Stine, and Gary Tapp; Representatives Hubert Collins, Tim Couch, Keith Hall, Stan Lee, Reginald Meeks, Don Pasley, Marie Rader, Ancel Smith, Fitz Steele, Jim Stewart III, and Jill York.


Legislative Guest:    Representative Fred Nesler


Guests:  Bruce Scott, Kentucky Department of Environmental Protection; Lloyd Cress and Bill Bissett, Kentucky Coal Association; Cam Metcalf, Lissa McCracken, and Don Douglas, Kentucky Pollution Prevention Center; Colonel Keith Landry, Sarah Devasher, Carol Labashosky, Lee Anne Devine, Jim Townsend, and William James, United States Army Corps of Engineers; David Cobb, Armstrong Coal; Sean Alteri, Millie Ellis, Kentucky Division of Air Quality; Sandy Gruzesky, Kentucky Division of Water; and Bruce Williams, Kentucky Conservation Committee.


LRC Staff:  Stefan Kasacavage, Biff Baker, and Kelly Blevins


The committee had a quorum. Minutes from the September 2, 2009 meeting were approved.


Update on Coal Permitting in Kentucky relative to Conductivity Issues

  Representative Gooch welcomed Bruce Scott, Commissioner of the Kentucky Department for Environmental Protection (KY EPA), and two representatives from the Kentucky Coal Association-- Bill Bissett, President and Lloyd Cress, General Counsel.


  Commissioner Scott identified the three major coal mining permits--federal surface mining and reclamation permit (SMCRA), 402 and 404--issued under the Federal Clean Water Act.  This testimony will focus on the 402 permit which regulates discharges of waste water.  Commissioner Scott described the 2009 memorandum of understanding (MOU) between Office of Surface Mining (OSM), United States Army Corps of Engineers (USACE), and the United States Environmental Protection Agency (USEPA) which escalated review of mountaintop mining in six Appalachian states and the resultant guidance document which establishes a benchmark of 300-500 microsiemens per centimeter for water conductivity. The guidance document prompted litigation by the National Mining Association, and there may be litigation by individual states.  West Virginia has already filed suit against US EPA.


Commissioner Scott described the new 90 day permit review process and stated some permits are receiving formal objections by US EPA.  He then discussed the reissuance of a state general permit and described the permit’s term and allowable coverages. Commissioner Scott then described the individual permits and the individual permit process and US EPA’s role in making objection letters on those permits.  Commissioner Scott explained that for new or expanded operations, there will continue to be general permit coverages, but all other must get individual 402 permits.  If the state is unable to resolve US EPA’s objections, then the permits will be federalized, and Kentucky will have no jurisdiction over the mining operation in Kentucky.  A federalization of a mining permit is a very rare occurrence nationally.


In response to a question about when the Clean Water Act passed, Commissioner Scott stated that it passed in 1972 and has been amended since then.  During the past year, there has been a significant change in US EPA’s perspective towards coal operations in Appalachia.  In response to remarks that US EPA has refused to attend the committee meeting and to explain how to address the regulatory agency’s concerns over mining operations, Commissioner Scott replied that KY EPA has expressed those same concerns to Washington.  The US EPA asserts it is making a new interpretation of existing law.  The KY EPA will need the full 90 days to response to US EPA; however, the federal government is not under prescribed time frames. 


Bill Bissett, President of the Kentucky Coal Association, explained that there is a tremendous investment in making the permits, and US EPA is not communicating with the applicants.  US EPA is making decisions under the aegis of political ideology rather than law.  Lloyd Cress added that the availability of general permits is critical because the state assumes final authority for those permits.  This has allowed business to continue although in an impaired manner.  The National Mining Association has filed suit in the District of Columbia for a preliminary injunction from further enforcement of the guidance document.  The motion should be heard next month.  The state of West Virginia has filed suit in US District Court, and the Kentucky coal industry is reviewing recent objections and anticipating a decision on a course of action. 


In response to a question about whether the rules are applied discriminatorily and whether Kentucky will file suit, Mr. Cress stated that they are.  The rules are applied to six states in Appalachia and only to the coal industry.  Commissioner Scott added a lawsuit is under consideration.  


Coal Permitting under the jurisdiction of the United States Army Corps of Engineers

Colonel Landry, Commander Louisville District ACE, discussed the regulatory program and requested the written remarks be entered into the formal record.  He described the impact of coal on the Kentucky economy and USACE regulatory mission under section 404 of the Clean Water Act.  Nationwide, 21 permits were suspended, and states went to individual permits.  USACE-Louisville is the final decision maker on approval for 404 permits.  If there are potential water problems, the US EPA may veto part of the permit.


In response to questions about what interests prompted the MOU signed between the various jurisdictional agencies, Colonel Landry stated he did not know who the parties were at the higher levels.  In response to a question regarding the flow process between US EPA and USACE with the 404 permit, Colonel Landry said there is some overlap with the 402 permit.  The US EPA may comment on the 404 permit.  The US EPA can, if concerned about USACE decision on a 404, use its 404 veto power to stop it.   In response to a question about how many permits are under review, Colonel Landry stated there are 316 permit applications under review.  In response to a question regarding permissible alternative land uses after mining, Colonel Landry stated mitigation in-lieu does not address stream loss.  Historically, USACE has allowed a small percentage to be in lieu due to alternative uses of the land. 


In response to several questions on US EPA veto power over USACE final authority on 404 permits, Colonel Landry said this relates to the interpretation of the Clean Water Act, and that is what the lawsuits are about.  Authority exists in the federal rules for USEPA to put a check on my decisions.  Of the 43 permits under USACE, none has been vetoed by US EPA.  In response to remarks that the US EPA and the USACE have overstepped federal legal authority, Colonel Landry said he had not read the guidance document and it does not influence his decisions.


Kentucky Pollution Prevention Center Environmental Sustainability Technical Assistance Programs

Cam Metcalf, executive director of the Kentucky Pollution Prevention Center (KPPC), University of Louisville described the Center and its mission.  The center provides environmentally sustainable cost savings solutions to industry.  Thirteen missions to promote energy savings have been identified for the center’s customers and KPPC has served industries in all counties of the Commonwealth.  Pollution prevention means source reduction directly or via efficiency or protection of resources.  Kentucky’s definition of pollution prevention only covers hazardous waste and toxic chemicals and that definition needs to be changed. 


Mr. Metcalf also discussed the Kentucky Energy Efficiency Program (KEEPS) for schools and described the seven districts working with energy managers.  Finally, Mr. Metcalf discussed the Energy Renewable Consortium and the projects awarded by the consortium. Several legislative proposals were offered.  The first involved changing the definition of pollution prevention.  The second was changing the Hazardous Waste Fund statute.  Twenty percent of the Hazardous Waste Fund is supposed to go to KPPC, but some additional language added in Senate bill 69 allows some of the money to be diverted.  The statute should be amended to tighten up the language to ensure that all of the 20 percent is received by the center.  Finally, the statutes governing KPPC’s membership need to be amended so that ex-officio members are required to attend meetings.


In response to a question about energy consumption of schools, Mr. Metcalf acknowledged there are many energy inefficient practices in schools and higher rates.  Both have caused the 100 percent increase in energy usage by schools.


After a motion and a second, Representative Gooch adjourned the meeting.