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Mining companies scramble to fight burdensome new EPA rule

The Number 10 shaft at the Resolution copper mine near Superior, Arizona. (Photo: Barbara Mannino/FoxNews.com)

(Special to FoxNews.com)

Mining companies are excited about a proposed federal rule change that would jack up the wallet companies must have access to to cover any environmental damage their work may cause.

The proposed EPA (Environmental Protection Agency) changes, a shift of the burden of the financing of Superfund cleanups — which are also known as the National priorities List, or NPL sites — away from the federal government to the mining facilities, a move that would cost the industry $171 million per year and save the EPA $527 million, more than 34 years, according to the bureau of the regulatory impact assessment.

Companies will see an additional tax as much as 20 times higher of the insurance and bonds that they should receive, and believe the change will have a devastating effect on the economy of states like Nevada, which the U.S. in gold production, and other metal-mining states, most of them in the western half of the country.

The amendment of article 108(b) of the EPA’s Comprehensive Environmental Response Compensation and Liability Act (CERCLA) is meant to “increase the likelihood that owners and operators will have the resources that are required for the CERCLA liabilities at their facilities, which will prevent the burden of cleaning from falling to the other parties, including the American taxpayer.”

But at what cost?

A Nevada gold mining company reports that the bond requirement could skyrocket from $20.4 million to $495.8 million. And an Arizona copper mine on the hook for an additional $715 million, despite getting some relief from the new rule provides for a safe mining practices.

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(Special to FoxNews.com)

Hard rock mining executives told FoxNews.com they are afraid that companies will end up with excessive debt, that may slow growth, chill investment in the industry and the increasing US dependence on foreign mineral sources, said Debra Struhsacker, an environmental compliance and government affairs consultant.

“There is a question about the motivation for the security companies and banks to issue [financial instruments] to support the increased capacity,” Laura Skaer, executive director of the American Exploration and Mining Association (AEMA), told FoxNews.com.

CERCLA was put on the books in the 1980s as a statute that would identify sectors that made the greatest risks for public health and the environment, according to Tawny Bridgeford, deputy general counsel at the National Mining Association (NMA).

The statute went 30 years without rules on the books. During that time, mining regulatory programs established written financial assurance responsibility rules by public authorities, as well as the Bureau of Land Management (BLM) and the U. S. Forest Service (USFS).

These offices provide almost $2.66 billion of financial assurance for hardrock mines in Nevada, in Struhsacker said. Another $3.2 billion comes from the BLM for mines on federal public lands in the western united states

Understandably, there are indications that a number of the sites will eventually be on a double bound.

What’s more, the critics, the EPA formula is based on a number of mines which the national priority list (NPL), and cases prior to the passage of the current mining laws, and for technological improvements in the sector, was introduced.

“The states have approved more than 3,300 mining plans since 1990, and zero [of them] causes a Superfund problem, nor have they been identified as a CERCLA NPL site,” said Skaer.

According to the EPA, the rule change represents the agency of the fulfillment of a January 2016 court and a congress directive, which has emerged from a 2014 lawsuit brought by environmental Ngos.

But the timing of the implementation is the question in two ways.

Mining companies are dissatisfied with the short period between January 2016, when the DC district Court issued its order, and Dec. 1 — when the EPA published the proposed rule.

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“I’ve seen accounts for a fraction of this size and a whole lot less complicated to be subject to a 100-day review period, or longer,” the NMA is Bridgeford said.

Also the change comes during Barack Obama’s time as a lame-duck president. The culture of the EPA is likely to shift dramatically as Oklahoma Attorney General Scott Pruitt, known as an opponent of excessive environmental regulation replaces McCarthy.

Bridgeford also pointed out FoxNews.com that “Western governors were deeply shocked by the lack of consultation with [mining] states.” This week, the West-Presidents of the Association, in a statement demands the EPA consultation with them and state regulators on the new requirements.

According to Elizabeth Horowitz, a spokeswoman for the Small Business Administration, the EPA failed to provide important data during the process.

Bridgeford said the EPA denied NMA’s request to perform an analysis of the existing programs and also denied the association’s request to perform site-specific evaluations that people in the mining industry believe, are of crucial importance for the determination of a realistic financial requirements.

There is hope that the new government, the EPA will take a fresh look at this rule, Bridgeford said.

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