The Corps’ authority to require financial assurances to ensure  compensatory mitigation differs from the authority that mining agencies  have under SMCRA to require bonds for mine reclamation. Mining Agencies and the Corps Use Different Approaches to Financial Assurances for Reclamation and Mitigation

The four states in our review use different approaches to fulfill SMCRA’s  requirement that mine operators provide adequate financial assurances for  completing reclamation. These states primarily vary in whether they  require mine operators to fulfill their financial assurance obligation strictly  through a full-cost bond or whether they allow operators to use alternative  bonding systems that combine bonds, taxes on coal production, and other  sources of funding. Furthermore, Corps officials said the Corps  has relied on other permit conditions for assurance that mitigation will be  satisfactorily completed. Virginia relies primarily on a bond pool but also uses a full-cost bonding  system. Kentucky relies primarily on a full-cost bonding system but also uses a  bond pool. West Virginia

All mine operators must participate in the state’s alternative bond system. Corps officials told us the Corps has relied on mechanisms other than  financial assurances to ensure that mitigation associated with valley fill  permits will be satisfactorily completed. Federal and State Agencies Are Not Required to Monitor Former Mine Sites but Have Conducted Some Analyses of Environmental Impacts

OSM, the states’ mining or environmental agencies, EPA, and the Corps  are not required to monitor former mountaintop mines with valley fills for  long-term environmental degradation after reclamation and mitigation are  complete and financial assurances have been released. While the agencies  are not required to collect post-reclamation monitoring data, several have  analyzed conditions near reclaimed mine sites with valley fills and found  that (1) reforestation efforts at some reclaimed surface coal mine sites  needed improvement, (2) some surface coal mine sites have contaminated  streams and harmed aquatic organisms, (3) a link exists between valley  fills and changes to water flow, and (4) mine operators have not always  returned mine sites to their approximate original contour when required to  do so under SMCRA. Several federal and state agencies have taken some  actions to respond to these findings. Federal Laws May Be Available Under Limited Circumstances to Address Long-term Environmental Problems Associated with Valley Fills but Have Rarely or Never Been Needed or Used, According to Agency Officials

Several federal laws may be available, under limited circumstances, to  address environmental problems associated with mountaintop mines with  valley fills after SMCRA or Clean Water Act financial assurances have  expired, but these have rarely been needed or used, according to federal  and state officials. We selected four federal laws for analysis in this regard:  SMCRA; the Clean Water Act; the Comprehensive Environmental  Response Compensation and Liability Act (CERCLA), also commonly  known as Superfund; and the Resource Conservation and Recovery Act  (RCRA). The Clean Water Act Authorizes EPA or State Water Quality Regulators to Require a Permit for Discharges from Former Surface Mines

Two provisions of the Clean Water Act authorize EPA or state water  quality regulators to address or monitor water quality issues associated  with former mine sites. Agency Comments and Our Evaluation

We provided a draft of this report to the Department of the Interior, the  Department of Defense, and the Environmental Protection Agency for  review and comment. The three federal agencies generally agreed  with our findings, while the three state agencies were critical of what they  perceived to be the message of the report. Appendix I: Objectives, Scope, and Methodology

This appendix details the methods we used to examine (1) the approaches  the Office of Surface Mining (OSM), the states we reviewed, and the Army  Corps of Engineers (Corps) have taken to obtain financial assurances for  surface coal mines with valley fills; (2) the extent to which federal and  state agencies monitor and evaluate these mines after reclamation and  mitigation are complete; and (3) the federal laws agencies may use, and  have used, to address any latent environmental problems associated with  these mines that may occur after Surface Mining Control and Reclamation  Act (SMCRA) or Clean Water Act financial assurances have expired. In addition, we  interviewed and obtained information from officials in EPA’s Office of  Water in headquarters and regions 3 and 4; the U.S. Geological Survey; and  state water quality regulators in Kentucky, Tennessee, Virginia, and West  Virginia regarding any monitoring or evaluation of the long-term  environmental impact of former surface mines with valley fills. The focus of this report was surface coal mining and not all activities  that may affect water quality.
Why GAO Did This Study

Surface mining for coal in Appalachia has generated opposition because rock and dirt from mountaintops is often removed and placed in nearby valleys and streams. The Office of Surface Mining Reclamation and Enforcement (OSM) in the Department of the Interior and states with approved programs regulate these mines under the Surface Mining Control and Reclamation Act (SMCRA). The Army Corps of Engineers (Corps), the Environmental Protection Agency (EPA), and states also regulate different aspects of coal mining, including the filling of valley streams, under the Clean Water Act. Under SMCRA, mine operators must provide financial assurances sufficient to allow mines to be reclaimed. Under the Clean Water Act, the Corps may require financial assurances that the impact of mines on streams can be mitigated. GAO was asked to examine (1) the approaches OSM, the states, and the Corps have taken to obtain financial assurances for surface coal mines with valley fills; (2) federal and state agencies' monitoring of these mines after reclamation and mitigation are complete; and (3) the federal laws agencies may use, and have used, to address latent environmental problems. GAO gathered information from state and federal agencies in Kentucky, Tennessee, Virginia, and West Virginia about their financial assurances practices, long-term monitoring, and use of federal laws to address environmental impacts at former mine sites. This report makes no recommendations.

What GAO Found

OSM, the states, and the Corps use different approaches to financial assurances for reclamation and mitigation. Under SMCRA, states have flexibility to require mine operators to provide a bond for the full cost of reclamation or participate in an alternative bonding system such as a bond pool, which may combine bonds, taxes on coal production, and other sources of funding. West Virginia relies exclusively on an alternative bonding system, while Tennessee exclusively uses a full-cost bonding system. The other two states, Virginia and Kentucky, rely on a combination of full-cost bonds and an alternative bonding system. Under the Clean Water Act, the Corps has discretion to require that mine operators provide assurances that funds will be available to mitigate the effects of burying streams with valley fills but it has not done so in the four states we reviewed. Instead, the Corps has relied on other mechanisms to ensure that mitigation will be completed satisfactorily, according to Corps officials. For example, some Corps officials said they rely on SMCRA financial assurances to ensure required mitigation. OSM, EPA, the Corps, and the four states' mining and environmental agencies are not required to monitor former mountaintop mines with valley fills for long-term environmental degradation after reclamation and mitigation are complete and financial assurances have been released. However, several of them, along with the U.S. Geological Survey, have conducted or funded analyses of conditions near reclaimed mine sites with valley fills that have shown environmental impacts. Specifically, analyses have shown that (1) reforestation efforts at some reclaimed surface coal mine sites needed improvement; (2) surface coal mine sites have contaminated streams and harmed aquatic organisms; (3) valley fills may affect water flow; and (4) mine operators have not always returned mine sites to their approximate original contour when required to do so under SMCRA. Federal and state agencies have taken some actions to respond to these findings, including adopting new guidelines for reforestation practices. Several federal laws may be available under limited circumstances to address long-term environmental problems at former mine sites. These laws include SMCRA; the Clean Water Act; the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), also commonly known as Superfund; and the Resource Conservation and Recovery Act. For example, the Clean Water Act authorizes EPA or a state to require a permit if discharges are detected from a former surface mine, and CERCLA may authorize EPA to respond to certain pollution from former surface mines. According to the agencies, they have rarely or never needed to use these authorities. We provided a draft of this report to OSM, the Corps, EPA, Kentucky, Virginia, and West Virginia for review and comment. The federal agencies generally agreed with the report, while the states were critical of what they perceived to be the message of the report.