Report to Congressional Requesters

United States Government Accountability Office

GAO 

January 2010 SURFACE COAL 

MINING 

Financial Assurances 

for, and Long-Term 

Oversight of, Mines 

with Valley Fills in 

Four Appalachian 

States 

GAO-10-206 

On April 29, 2010, GAO revised this product to correct 

information published on page 10 in footnote 22. The original 

product indicated that the Corps completed a modification to 

Nationwide Permit 21 on July 15, 2009. The text has been 

corrected to indicate that the Corps proposed that 

modification on July 15, 2009. 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

January 2010

SURFACE COAL MINING

Financial Assurances for, and Long-Term Oversight 

of, Mines with Valley Fills in Four Appalachian States

Highlights of GAO-10-206, a report to 

congressional requesters 

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. 

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. View GAO-10-206 or key components.

For more information, contact Anu Mittal at 

(202) 512-3841 or mittala@gao.gov. 
Page i GAO-10-206 

Contents 

Letter 1

Background 6 

Mining Agencies and the Corps Use Different Approaches to 

Financial Assurances for Reclamation and Mitigation 15 

Federal and State Agencies Are Not Required to Monitor Former 

Mine Sites but Have Conducted Some Analyses of 

Environmental Impacts 22 

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 30 

Agency Comments and Our Evaluation 35 

Appendix I Objectives, Scope, and Methodology 38 

Appendix II Selected Surface Mining Control and Reclamation 

Act Reclamation Standards 42 

Appendix III Comments from the Department of the Interior 46 

Appendix IV Comments from the Department of Defense 47 

Appendix V Comments from the Environmental Protection 

Agency 49 

Appendix VI Comments from the Kentucky Department for 

Natural Resources 50 

Appendix VII Comments from the Virginia Department of Mines, 

Minerals and Energy 56 

Surface Coal Mining 
Appendix VIII Comments from the West Virginia Department of 

Environmental Protection 60 

Appendix IX GAO Contact and Staff Acknowledgments 63 

Figure 

Figure 1: A Valley Fill in West Virginia 2 

Abbreviations 

AOC Approximate original contour 

Corps Army Corps of Engineers 

CERCLA Comprehensive Environmental Response, Compensation, 

 and Liability Act 

EPA Environmental Protection Agency 

OSM Office of Surface Mining Reclamation and Enforcement 

PEIS Programmatic environmental impact statement 

RCRA Resource Conservation and Recovery Act 

SMCRA Surface Mining Control and Reclamation Act 

TMDL Total maximum daily load 

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Page ii GAO-10-206 Surface Coal Mining
Page 1 GAO-10-206 

 

United States Government Accountability Office

Washington, DC 20548 

 

January 14, 2010 

The Honorable Jeff Bingaman 

Chairman 

Committee on Energy and Natural Resources 

United States Senate 

The Honorable Lamar Alexander 

Ranking Member 

Subcommittee on Children’s Health 

Committee on Environment and Public Works 

United States Senate 

Surface mining for coal in the mountainous areas of Appalachia—a 

process often referred to as mountaintop mining—has generated 

opposition in recent years because of its impact on landscapes, streams, 

ecosystems, and communities. In mountaintop mining, before the 

underlying coal can be extracted, the land is cleared of forests and other 

vegetation. Explosives or other techniques are then used to break up the 

overlying solid rock, creating dislodged earth, rock, and other materials 

known as “spoil.” Some or most of the spoil is placed back on the minedout area to return it to its approximate original contour. However, excess 

spoil that cannot be safely placed back is often placed as “fill” in adjacent 

valleys or hollows.1

 In some cases, this excess fill buries the headwaters of 

streams. (See fig. 1 for an example of a valley fill.) 

1

Federal and state regulations identify different types of fills, including valley fills, head-ofhollow fills, and durable rock fills. These definitions differ in their description of fill 

characteristics, including placement, slope, and material composition. For ease of reading, 

we refer to all types of fills as valley fills in this report. 

 Surface Coal Mining 
 

Figure 1: A Valley Fill in West Virginia 

Source: GAO.

Note: The triangular area in the middle of the photo is a valley fill. The fill material is dirt and rock that 

have been placed into the valley. The visible terraces help control the flow of water across the fill. Fill 

material may bury the headwaters of a small stream in a valley such as this one. 

Mountaintop coal mines that produce valley fills have affected the land 

and streams in the central Appalachian states of Kentucky, Tennessee, 

Virginia, and West Virginia. According to federal and state estimates, from 

1994 through 2003, surface mining had disturbed about 400,000 mostly 

Page 2 GAO-10-206 Surface Coal Mining
 

forested acres in these states and generated thousands of valley fills.2

Furthermore, these valley fills buried 724 miles of headwater streams in 

the four states from 1985 through 2001. Another 367 miles of streams in 

the Appalachian region are expected to be affected by surface mines that 

were approved for permits from October 2001 through June 2005.3

 In 

December 2009, we reported on characteristics of mining in the 

mountainous areas of Kentucky and West Virginia, including the number 

of valley fills approved in those states since 2000.4

 Specifically, we 

reported that Kentucky and West Virginia collectively approved nearly 

2,000 fills to store at least 4.9 billion cubic yards of excess spoil in nearby 

valleys.5

Surface coal mining is regulated by the Surface Mining Control and 

Reclamation Act of 1977 (SMCRA). SMCRA created the Office of Surface 

Mining Reclamation and Enforcement (OSM) in the Department of the 

Interior to implement and enforce the act. SMCRA allows an individual 

 

2

Environmental Protection Agency (EPA), Mountaintop Mining/Valley Fills in 

Appalachia Draft Programmatic Environmental Impact Statement, U.S. EPA Region 3, 9-

03-R-00013 (2003). The impact statement was prepared by EPA, the Army Corps of 

Engineers, the Office of Surface Mining, the U.S. Fish and Wildlife Service, and the West 

Virginia Department of Environmental Protection. The document was incorporated by 

reference in a final impact statement dated October 2005. 

3

Department of the Interior, Office of Surface Mining Reclamation and Enforcement, 

Environmental Impact Statement: Proposed Revisions to the Permanent Program 

Regulations Implementing the Surface Mining Control and Reclamation Act of 1977 

Concerning the Creation and Disposal of Excess Spoil and Coal Mine Waste and Stream 

Buffer Zones, OSM-EIS-34 (2008). 

4

GAO, Surface Coal Mining: Characteristics of Mining in Mountainous Areas of 

Kentucky and West Virginia, GAO-10-21 (Washington, D.C.: Dec. 9, 2009). 

5

Among the factors affecting the construction of valley fills is a Department of the Interior 

regulation known as the stream buffer zone rule. The rule, as originally promulgated in 

1983, prohibited the dumping of excess spoil material within 100 feet of a perennial or 

intermittent stream except when such activities “will not cause or contribute to the 

violation of state or federal water quality standards and will not adversely affect the water 

quantity or quality or other environmental resources of the stream.” In December 2008, the 

previous administration modified the rule to allow a surface coal mine operator to place 

excess spoil material excavated by the operation into streams if the operator can show it is 

not reasonably possible to avoid doing so. The current administration unsuccessfully 

sought to have the U.S. District Court of the District of Columbia vacate the 2008 rule. On 

November 30, 2009, the Department of the Interior published an advance notice of 

proposed rulemaking requesting comments on alternatives for revising the current Surface 

Mining Control and Reclamation Act regulations, which include the 2008 rule. Kentucky, 

Virginia, and West Virginia have not implemented any changes to their own stream buffer 

zone rules in the wake of the federal rule change. 

Page 3 GAO-10-206 Surface Coal Mining
 

state to develop its own program to implement the act if the Secretary of 

the Interior finds that the state program is in accordance with federal law.6

A state with an approved program is said to have “primacy” for that 

program. OSM has approved state programs for Kentucky, Virginia, and 

West Virginia, and annually evaluates how well the state programs are 

administered. OSM manages the mining program in Tennessee.7

 One goal 

of SMCRA’s, among others, is to assure that mines are reclaimed as 

contemporaneously as possible with surface coal mining operations and to 

protect the environment from problems—such as water quality 

degradation—that may result from mining. SMCRA requires the operator 

to provide financial assurance, in the form of a performance bond, in an 

amount sufficient to allow the relevant regulatory authority—either OSM 

or the state mining agency—to reclaim the mine site if the operator does 

not.8

Mountaintop coal mine operators may also be required to obtain permits 

under the Clean Water Act.9

 The Department of Defense’s Army Corps of 

Engineers (Corps), the Environmental Protection Agency (EPA), and state 

agencies may all have a role in approving or overseeing permits issued 

under the Clean Water Act for certain activities associated with surface 

coal mine operations. For example, the Corps has the authority to issue a 

permit to a mine operator who seeks to discharge spoil into a stream when 

constructing a valley fill, and it may require the operator to compensate 

for the loss of the stream through mitigation—actions such as creating a 

 

6

In passing SMCRA, Congress found that “because of the diversity in terrain, climate, 

biologic, chemical, and other physical conditions in areas subject to mining operations, the 

primary governmental responsibility for developing, authorizing, issuing, and enforcing 

regulations for surface mining and reclamation operations subject to this act should rest 

with the states.” 

7

The Secretary of the Interior conditionally approved a Tennessee state program on August 

10, 1982; however, because Tennessee failed to adequately implement certain parts of its 

program, OSM took over its inspection and enforcement responsibilities on April 18, 1984. 

Subsequently, the state repealed most of the Tennessee Coal Surface Mining Law of 1980 

and its implementing regulations, effective October 1, 1984. As a result, on October 1, 1984, 

OSM withdrew approval of the Tennessee permanent regulatory program and promulgated 

a federal program for the state. 

8

In this report, we use the terms “financial assurance” and “bond” interchangeably. 

9

The Clean Water Act is codified at 33 U.S.C. §§ 1251-1387 (2006). 

Page 4 GAO-10-206 Surface Coal Mining
 

new stream or enhancing a degraded stream.10 The Corps also has the 

authority to require an operator to provide financial assurances to ensure 

a high level of confidence that the compensatory mitigation project will be 

successfully completed. 

In this context, you asked us 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) 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 SMCRA or Clean Water Act financial 

assurances have expired. 

This report focuses on the four Appalachian states of Kentucky, 

Tennessee, Virginia, and West Virginia because these areas accounted for 

nearly 83 percent of the surface coal production in Appalachia in 2008 and 

more than 98 percent of recently-approved valley fills across the country.11

To address our objectives, we reviewed relevant federal and state laws, 

regulations, and policy guidance on surface coal mining, financial 

assurances, reclamation, and mitigation. We also spoke with headquarters 

and field officials from OSM, the Corps, EPA, and state mining agencies 

regarding financial assurance practices in Kentucky, Tennessee, Virginia, 

and West Virginia. Furthermore, we interviewed federal and state agency 

officials to obtain information on the long-term monitoring and evaluation 

their agencies have done related to reclaimed and mitigated mine sites. We 

also analyzed the applicability of selected environmental laws—in addition 

to SMCRA and the Clean Water Act—to address long-term environmental 

problems that might be caused by mine sites with valley fills, and 

interviewed agency officials to learn if such laws had been used in that 

 

10Before requiring mitigation, the Corps requires a demonstration that impacts to U.S. 

waters have been avoided where practicable and that unavoidable impacts have been 

minimized to the extent practicable. According to the Corps, it provides an evaluation and 

analysis of avoidance, minimization, and compensation strategies and ensures that all 

unavoidable losses of waters are adequately offset through compensation on the vast 

majority of projects associated with surface coal mining sites. 

11The data on coal production is from the Energy Information Administration and can be 

found at http://www.eia.doe.gov/cneaf/coal/page/acr/table1.html. The data on valley fills 

are based on permits approved from October 1, 2001, through June 30, 2005, as reported in 

OSM-EIS-34. 

Page 5 GAO-10-206 Surface Coal Mining
 

context. A more detailed description of our scope and methodology can be 

found in appendix I. 

We conducted this engagement from October 2008 to January 2010 in 

accordance with all sections of GAO’s Quality Assurance Framework that 

are relevant to our objectives. The framework requires that we plan and 

perform the engagement to obtain sufficient and appropriate evidence to 

meet our stated objectives and to discuss any limitations in our work. We 

believe that the information and data obtained, and the analysis 

conducted, provide a reasonable basis for any findings and conclusions in 

this report. 

The central Appalachian coal region plays a large part in supplying the 

country with its energy needs. Specifically, in 2008, West Virginia and 

Kentucky were the second- and third-largest coal-producing states in the 

nation—behind Wyoming—and accounted for more than 76 percent of the 

coal produced from surface mines in Appalachia. West Virginia produced 

about 69 million tons of coal from surface mines, while Kentucky 

produced about 51 million tons. Virginia produced close to 9 million tons 

and Tennessee less than 2 million tons from surface mines in 2008, 

respectively. 

Background 

SMCRA Regulates Surface 

Coal Mining Operations 

and Requires Financial 

Assurances 

SMCRA requires mine operators to obtain a permit before starting to 

mine.12 The permit process requires operators to submit detailed plans 

describing the extent of proposed mining operations, how reclamation on 

the mine site will be achieved, and the estimated per-acre cost of 

reclamation. In reclaiming the mine site, operators must comply with 

regulatory standards that govern, among other things, how the reclaimed 

area is regraded, replanting of the site, and the quality of water flowing 

from the site.13 (See app. II for selected details about these key reclamation 

standards.) In general, an operator must reclaim the land to a use it was 

 

12For simplicity in this report, we refer to permittees and operators as operators. The 

permittee is the person or entity who holds the permit and is legally responsible for the 

permit, whereas the operator is the person or entity who conducts coal removal operations. 

The permittee and the operator may or may not be the same person or entity. 

13A purpose of SMCRA is to ensure that adequate procedures are undertaken to reclaim 

surface areas as contemporaneously as possible with the surface coal mining operations. 

OSM and the states have regulations requiring that backfilling and grading begin within a 

certain number of days after coal removal in a particular area. 

Page 6 GAO-10-206 Surface Coal Mining
 

capable of supporting before mining or an alternative post-mining land use 

that the regulatory authority deems higher or better than the pre-mining 

land use. Additionally, although the operator is generally required to 

redeposit spoil on the mine site so that it approximates the original 

contour of the site, the operator may in certain circumstances receive a 

variance to this general requirement and leave the land flat or gently 

rolling. In addition, a mountaintop removal operation is one that, by 

definition, will not restore the area to its approximate original contour.14

However, only specific types of post-mining land uses—including 

industrial, commercial, agricultural, residential, or public uses—are 

allowed for mountaintop removal operations.15

SMCRA requires the operator to submit a bond in an amount sufficient to 

ensure that adequate funds will be available for the regulatory authority—

either OSM or a state with primacy—to complete the reclamation if the 

operator does not do so.16 The bond provisions of SMCRA apply generally 

to all types of coal mines and do not include any requirements that are 

specific to mines with valley fills. However, the bond amount for a 

particular site cannot be less than $10,000 and must also be sufficient to 

ensure the completion of the reclamation plan for that particular site if the 

work had to be completed by the regulatory authority in the event of 

forfeiture. In this report, we refer to a bond that is equal to the expected 

cost to reclaim the entire site as a “full-cost bond.” OSM has prepared 

guidance for mine operators on how to calculate their bond amounts to 

capture the likely costs of reclamation. Bond amounts can be adjusted as 

the size of the permit area or the projected cost of reclamation changes. 

When all reclamation standards identified in SMCRA and the operator’s 

 

14Other types of mountaintop mining have different requirements. For example, steep slope 

mining describes mining operations in mountainous terrain that may, or may not, include 

an approximate original contour variance. Steep slope operations that do not have an 

approximate original contour variance follow the same requirements as other permits that 

comply with approximate original contour requirements. 

15State regulations regarding allowable post-mining land uses vary. For example, West 

Virginia prohibits certain agricultural alternative post-mining land uses for mountaintop 

mining operations, including rangeland and hayland. 

16The operator may choose to provide “incremental” bonds covering a portion of the 

permitted area rather than the entire permitted area. 

Page 7 GAO-10-206 Surface Coal Mining
 

permit—including compliance with water quality standards—have been 

met, the bond is completely “released” to the operator.17

The OSM regulations implementing SMCRA recognize three major types of 

bonds: corporate surety bonds, collateral bonds, and self-bonds. 

• A surety bond is a bond in which a surety company guarantees the 

performance of the permittee’s obligation to reclaim the mine site. If the 

mining company does not reclaim the site, the surety company must pay 

the bond amount to the regulatory authority or the regulatory authority 

may allow the surety company to perform the reclamation instead of 

paying the bond amount. 

• Collateral bonds include cash; certificates of deposit; liens on real estate; 

letters of credit; federal, state, or municipal bonds; and investment-grade 

securities deposited directly with the regulatory authority. 

• A self-bond is a bond in which the permittee guarantees its own 

performance with or without separate surety. Self-bonds are available only 

to operators who meet certain financial conditions. To remain qualified for 

self-bonding, operators must, among other requirements, maintain a net 

worth of at least $10 million, possess fixed assets in the United States of at 

least $20 million, and have an “A” or higher bond rating. 

SMCRA also authorizes states to enact an OSM-approved alternative to a 

full-cost bonding system as long the alternative achieves the same 

objectives. One kind of alternative bonding system is known as a “bond 

pool.” Under this type of system, the operator may post a bond—e.g., a 

surety bond or collateral bond—for an amount determined by multiplying 

the number of acres in the permit area by a per-acre assessment. The peracre assessment may vary depending on the site-specific characteristics of 

the planned mining operation and the operator’s history of compliance 

with state regulations. However, the per-acre bond amount may be less 

than the estimated cost of reclamation. To supplement the per-acre bond, 

 

17SMCRA creates three discrete phases of reclamation for purposes of bond release. Phase 

I includes backfilling, regrading, and drainage control. Upon successful Phase I 

reclamation, up to 60 percent of the bond can be released. Phase II occurs after 

establishment of revegetation. No part of the bond can be released at this point if the water 

flowing from the permit area is exceeding applicable state effluent limitations established 

under the Clean Water Act. Phase III requires meeting post-mine land use standards, which 

may include revegetation success standards and meeting all other applicable reclamation 

requirements. 

Page 8 GAO-10-206 Surface Coal Mining
 

the operator generally must pay a fee for each ton of mined coal and may 

also be required to pay other types of fees. Funds are placed within a pool 

and can be used to reclaim sites that participants in the alternative 

bonding system do not reclaim.18 Under OSM regulations, all alternative 

bonding systems must provide a substantial economic incentive for the 

operator to comply with reclamation requirements and must ensure that 

the regulatory authority has adequate resources to complete the 

reclamation plan for any sites that may be in default at any time. 

Once bonds have been completely released to a mine operator, the 

relevant regulatory authority may terminate its jurisdiction under 

SMCRA.19 However, the regulatory authority may also revoke an operator’s 

permit if the operator fails to comply with the permit’s provisions. Under 

those circumstances, the operator may forfeit the bond to the regulatory 

authority. The regulatory authority then becomes responsible for 

reclaiming the land to the reclamation standards found in the operator’s 

permit. If the amount forfeited is insufficient to pay for the full cost of 

reclamation, the operator remains liable for remaining costs. The 

regulatory authority may complete reclamation and may sue the operator 

to recover additional expenses. Failure to complete reclamation has other 

serious consequences for mine operators—SMCRA prohibits applicants 

from obtaining future SMCRA permits if they have unabated violations of 

law or regulations applicable to surface mining; state regulations 

specifically note that bond forfeitures based on violations that are not 

subsequently corrected disqualify operators from obtaining future permits. 

Clean Water Act Provisions 

Also Regulate Aspects of 

Surface Coal Mining 

Operations 

The objective of the Clean Water Act is to restore and maintain the 

chemical, physical, and biological integrity of the nation’s waters. Section 

404 of the act allows the Corps to issue permits for the discharge of 

material, including fill material, into waters of the United States at 

specified disposal sites.20 Such permits are needed for the construction of a 

 

18In commenting on a draft of this report, the Department of the Interior noted that bond 

pools may also include civil penalties and interest. 

19State regulations may require termination of jurisdiction over a mining operation once a 

bond is released. 

2033 U.S.C. § 1344 (2006). The Corps regulates discharges of fill material into three 

categories of stream known as ephemeral, intermittent, and perennial. According to the 

Corps, most valley fill construction in the four states we reviewed has involved the 

discharge of fill material into ephemeral streams. 

Page 9 GAO-10-206 Surface Coal Mining
 

Page 10 GAO-10-206 Surface Coal Mining 

valley fill.21 Section 404(c) authorizes EPA to deny or restrict the use of any 

disposal site where it finds that the discharge will have unacceptable 

adverse effects. Mining companies may be able to construct valley fills 

under one of two types of permits issued by the Corps. First, the mining 

company may be authorized to construct a valley fill under the Corps’ 

“nationwide permit” for surface coal mining.22 A nationwide permit 

provides coverage for substantially similar activities that are expected to 

cause only minimal adverse environmental effects on an individual and 

cumulative basis. Second, the Corps may issue an “individual permit.” 

Individual permits are issued on a case-by-case basis for activities that are 

expected to have more than a minimal impact. Before issuing an individual 

permit, the Corps must evaluate the operator’s proposed activity for 

several factors, including, but not limited to, its effects on environmental 

values—such as fish, wildlife, and water quality—and safety issues, as well 

as any proposed mitigation for the project. 

Under guidelines prepared by the EPA Administrator and the Secretary of 

the Army acting through the Chief of Engineers, pursuant to section 404, 

the Corps may issue permits to discharge fill material, if, at a minimum, 

compliance with the guidelines is demonstrated. One aspect of compliance 

is that the discharge does not cause or contribute to “significant 

degradation” of waters of the United States.23 Under these guidelines, an 

operator would not be permitted to discharge fill materials into waters of 

the United States if there is a practicable alternative to such a discharge 

 

21According to the Corps, a section 404 permit does not cover the construction of an entire 

valley fill: the Corps only authorizes the discharge of fill material into waters of the United 

States in association with the underdrain beneath the valley fill; the construction of the rest 

of the fill is regulated pursuant to SMCRA. For ease of reading, we will continue to refer to 

this process as the construction of a valley fill. 

22Surface coal mine operators must notify the Corps of their intent to discharge fill material into 

waters of the United States in association with surface coal mining and reclamation activities 

under a nationwide permit—known as Nationwide Permit 21—and receive written 

authorization prior to commencing activity. In March 2009, a federal district court judge in the 

Southern District of West Virginia vacated Nationwide Permit 21 and enjoined the Corps from 

issuing authorizations pursuant to Nationwide Permit 21 in the district until the Corps has 

determined that Nationwide Permit 21 will not have adverse cumulative impacts as required by 

the Clean Water Act. A June 11, 2009, Memorandum of Understanding between the Corps, the 

Department of the Interior, and EPA states that the Corps will propose to modify Nationwide 

Permit 21 to prohibit its use to authorize discharges of dredged or fill material into waters of the 

United States for surface coal mining activities in the Appalachian region of Kentucky, Ohio, 

Pennsylvania, Tennessee, Virginia, and West Virginia, and on July 15, 2009, the Corps proposed 

that modification. 

2340 CFR Part 230. 
 

and would be required to minimize discharges that cannot be avoided. If 

such discharges are unavoidable, the Corps can require as a condition of 

the permit that the operator compensate for the loss or degradation of 

regulated waters. In the case of valley fills that bury streams, such 

compensatory mitigation could involve (1) creating a new stream, (2) 

enhancing a degraded stream, or (3) preserving an existing stream. The 

mitigation work may be done within the permitted area (on-site) or 

outside of the permitted area (off-site). Mitigation may be performed by 

the mine operator or a third party, such as a public or nonprofit entity, 

under agreement with the Corps. 

The Corps’ Clean Water Act implementing regulations and related policies 

authorize the Corps’ district engineers to require financial assurances 

when approving section 404 permits in order to ensure a high level of 

confidence that compensatory mitigation will be successfully completed.24

The Corps allows financial assurances to be in the form of bonds, escrow 

accounts, casualty insurance, letters of credit, legislative appropriations 

for government sponsored projects, or other appropriate instruments, 

subject to the approval of the district engineer. If assurances are required, 

district engineers are to determine the amount based on factors such as 

the size and complexity of the compensatory mitigation project, the 

likelihood of success, the past performance of the project sponsor, and 

any other factors they deem appropriate. Also, Corps district engineers 

must release financial assurances once they determine that the operator 

has demonstrated that a compensatory mitigation project has successfully 

met its performance standards. Typically, the monitoring period to assess 

the success of a compensatory mitigation project is 5 years but this period 

may be extended for projects that take longer, such as stream restoration. 

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. 

 

24The district engineer is the lead official in each district. There are 38 Corps districts in the 

United States. According to Corps officials, there are five Corps districts in Appalachia that 

are responsible for implementing the section 404 permit program in the four states we 

reviewed. Those district offices are located in Louisville, Kentucky; Pittsburgh, 

Pennsylvania; Nashville, Tennessee; Norfolk, Virginia; and Huntington, West Virginia. Corps 

regulations and policies are 33 CFR Part 332 (Compensatory Mitigation For Losses Of 

Aquatic Resources) and Guidance on the Use of Financial Assurances, and Suggested 

Language for Special Conditions for Department of the Army Permits Requiring 

Performance Bonds, Regulatory Guidance Letter, No. 05-1 (Feb. 14, 2005). 

Page 11 GAO-10-206 Surface Coal Mining
 

• While SMCRA explicitly calls for mining agencies to require all operators 

to provide bonds, the Corps’ Clean Water Act regulations authorize district 

engineers to decide whether financial assurances are necessary on a 

permit-by-permit basis. The district engineer may determine that financial 

assurances are not necessary for a specific project if an alternate 

mechanism is available to ensure a high level of confidence that the 

compensatory mitigation will be provided and maintained. 

• While SMCRA authorizes mining agencies to directly hold and use 

financial assurances to ensure the required reclamation is completed if the 

operator defaults on its reclamation obligations, the Corps does not have 

statutory authority under the Clean Water Act to do so.25 In light of that 

limitation, the Corps’ regulations and policies stipulate that if a district 

engineer does choose to require financial assurances, those assurances 

must be payable to a third party—such as a governmental or 

nongovernmental environmental management organization—that will 

agree to hold the funds and complete the mitigation in accordance with 

the Corps’ instructions if the operator defaults on its obligations. 

In addition to needing a Clean Water Act section 404 permit to construct a 

valley fill, mine operators need to obtain a National Pollutant Discharge 

Elimination System, or section 402, permit if they discharge pollutants 

from industrial point sources.26 Point sources are discrete conveyances 

such as pipes.27 Section 402 permits, generally administered by the states 

under EPA-approved programs, include limits on the amount of 

pollutants—such as suspended solids—that mines can directly discharge 

into bodies of water.28 Surface coal mines contain sediment ponds and 

drainage ditches that collect runoff from all disturbed areas, including 

water from the base or perimeter of valley fills or other locations that may 

 

25Under 31 U.S.C. §3302(b), any funds that the Corps receives, such as a bond, must be 

accounted for as a “miscellaneous receipt” under the Miscellaneous Receipts Statute and 

must be deposited in the General Fund of the U.S. Treasury. Thus, those funds could not be 

used to provide the required compensatory mitigation for a specific project. 

26These pollutant discharge limits are derived from technology-based “effluent guidelines” 

established by EPA or in water-quality standards developed by states and approved by 

EPA. 

2733 U.S.C. § 1362(14) (2006). 

28EPA regulations have established effluent guidelines for coal mining and preparation 

under section 402 for iron, manganese, total suspended solids, and pH. States may establish 

standards for these and other pollutants associated with surface coal mines. For any 

pollutant without a published standard, permit writers may use their best professional 

judgment. 

Page 12 GAO-10-206 Surface Coal Mining
 

then flow into a stream. These flows may need to comply with point 

source pollutant limitations specified in a section 402 permit. Section 402 

permits also require that mine operators submit periodic discharge 

monitoring reports to the regulatory authority, which is typically a state 

agency.29 A mine operator cannot obtain the release of its SMCRA bond if 

the land is contributing suspended solids and other pollutants, in excess of 

applicable state effluent limitations, to stream flow or runoff outside the 

SMCRA permit approved area. 

Under SMCRA and the 

Clean Water Act, Agencies 

Have Approved Permits for 

Mines with Thousands of 

Valley Fills in Central 

Appalachia 

The regulatory authorities in the four states we reviewed have collectively 

authorized thousands of valley fills since the enactment of SMCRA in 1977. 

Although the total number of valley fills approved since 1977 is uncertain, 

data we collected from OSM, Kentucky, Virginia, and West Virginia show 

that at least 2,343 valley fills have been authorized since January 2000.30

Specifically, 

• Kentucky authorized 1,488 valley fills through July 30, 2008; 

• Tennessee authorized 17 valley fills through December 31, 2008; 

• Virginia authorized 327 valley fills through August 17, 2009; and 

• West Virginia authorized 511 valley fills through July 30, 2008. 

Notably, approval of a valley fill does not necessarily mean that it will be 

constructed. For example, according to Virginia state officials, of the 327 

valley fills approved between January 2000 and August 2009, 97 were 

completed, 103 were under construction, 90 were not started, and 37 were 

“not needed and/or not constructed.” 

 

29While it retains independent oversight authority, EPA has approved the permitting and 

compliance authorities of the section 402 program in Kentucky, Tennessee, Virginia, and 

West Virginia. 

30The data from Kentucky and West Virginia are from electronic databases. While both 

states have collected some information in their databases since the late 1970s, Kentucky 

officials told us their fill data are less reliable prior to 2000. West Virginia officials also told 

us they did not consistently record information on fills in their database until the late 

1990s. Virginia officials told us that they did not have an electronic database with 

information on valley fills. They collected information for us by reviewing the hardcopy 

files of permits issued since 2000. Similarly, OSM officials conducted a review of permit 

files to provide us with information on fills in Tennessee—the state with the fewest fills. 

Page 13 GAO-10-206 Surface Coal Mining
 

While OSM and state mining agencies have been approving SMCRA 

permits with valley fills since the late 1970s, the Corps did not begin to 

consistently require section 404 permits for valley fills until the spring of 

2002, when the Corps and EPA jointly issued regulations revising the 

definition of fill material. Prior to this revision, the Corps interpreted 

excess spoil to be a “waste” regulated under section 402 of the Clean 

Water Act rather than a fill material regulated under section 404. 

The Corps could not readily provide us with data on the total number of 

section 404 permits it has issued for valley fills, the number of operators it 

has required to complete mitigation for valley fills, the types of mitigation 

called for, or the status of mitigation projects. The Corps did provide us 

electronic data showing that in the four states we reviewed it approved 

378 Nationwide Permit 21 permits from March 2002 through December 

2008 and 171 individual permits for surface coal mining operations from 

March 2002 through September 2009.31 However, its database does not 

contain information on how many of those permits were for valley fills.32 In 

addition, its electronic database indicated that only 57 of the nationwide 

permits required compensatory mitigation projects; Corps officials 

believed that number to be understated because the database is not 

complete. Although not captured in its electronic database, the 

information on valley fills and required compensatory mitigation projects 

is more completely documented in the Corps’ paper permit files, according 

to agency officials. 

 

31The 171 individual permits represented the approximate number of permits the Corps 

approved during that period for surface mining operations in the counties in Kentucky, 

Tennessee, Virginia, and West Virginia that the agency identified as being in the 

Appalachian region affected by its July 15, 2009, proposal to prohibit the use of the 

Nationwide Permit 21 for surface coal mining activities. See footnote 22. 

32The Corps may approve other types of mining activity besides valley fills under the 

Nationwide Permit 21 and individual permits for surface coal mining. 

Page 14 GAO-10-206 Surface Coal Mining
 

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. The Corps has not used its discretionary authority to 

require surface coal mine operators in the four states to provide financial 

assurances for mitigation work required as part of their section 404 permit, 

according to Corps officials. Furthermore, Corps officials said the Corps 

has relied on other permit conditions for assurance that mitigation will be 

satisfactorily completed. 

Mining Agencies and 

the Corps Use 

Different Approaches 

to Financial 

Assurances for 

Reclamation and 

Mitigation 

State Mining Agencies’ 

Approaches to Financial 

Assurances Vary 

The three states with primacy that we examined—West Virginia, Virginia, 

and Kentucky—have financial assurance programs that differ from each 

other and from the federal program that OSM administers in Tennessee. 

Each of the three states has received approval from OSM to use an 

alternative bonding system, although they do so to varying degrees. 

• West Virginia requires that all operators participate in a bond pool. 

• 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. 

• Tennessee uses a full-cost bonding system. 

All mine operators must participate in the state’s alternative bond system. 

The state has limited the site-specific per-acre bond to between $1,000 and 

$5,000.33 The state also collects a tax on each ton of coal produced. The 

current tax is 14.4 cents per ton of clean coal produced. The state deposits 

those funds into a Special Reclamation Fund and a Special Reclamation 

West Virginia 

 

33The amount within that range is determined using criteria spelled out in West Virginia’s 

regulations. These criteria include such factors as the type of surface mining being 

proposed, the number of excess spoil fills, other geologic and hydrologic characteristics of 

the site, and the compliance history of the operator, among other things. 

Page 15 GAO-10-206 Surface Coal Mining
 

Water Trust Fund.34 As of June 2008, the combined balance for the two 

funds was $46.9 million. The state can use these funds to reclaim lands 

that were permitted and abandoned after August 3, 1977, for which there is 

not enough bond amount to cover reclamation. 

The West Virginia legislature created an advisory council in 2001 to ensure 

the effective, efficient, and financially stable operation of the Special 

Reclamation Fund. The advisory council is required to report to the 

legislature every year on the financial condition of the fund. Furthermore, 

the West Virginia Department of Environmental Protection is required to 

conduct formal actuarial studies every 2 years and conduct informal 

reviews annually on the Special Reclamation Fund and Special 

Reclamation Water Trust Fund. In January 2009, recognizing that the tax 

rate was scheduled to drop from 14.4 cents per ton to 7 cents later that 

year, the advisory council recommended that the state legislature adjust 

the tax rate to 13 cents per ton for at least a 5-year period or provide for 

additional funding needed to ensure solvency. While the council 

concluded that the fund was solvent as of January 2009, it stated that, 

based upon projections in the 2008 actuarial study and with only the 

known revenue sources at that time, the fund balance would be negative 

by 2015. In April 2009, the state legislature set the tax rate at 14.4 cents per 

ton, effective July 1, 2009; called for a review of the tax every 2 years to 

determine whether it should be continued; and stipulated that the tax 

could not be reduced until the funds have sufficient monies to carry out 

required reclamation. 

Virginia offers the option of a bond pool to operators who meet eligibility 

criteria; other operators must post a full-cost bond. As of October 2009, 

the majority of active surface mine permits were covered by the bond 

pool. According to officials from the Virginia Department of Mines, 

Minerals and Energy, as of October 13, 2009, there were 148 active surface 

mine permits in the bond pool and 18 surface mines covered by full-cost 

bonding. The total bonded amount in the bond pool was about $143 

million, while the total for full-cost bonding was about $14 million. An 

Virginia 

 

34In 2008, the West Virginia legislature authorized, but did not separately fund, the Special 

Reclamation Water Trust Fund (Water Trust Fund). Since July 2008, coal tax revenues 

based on a tax rate of 1.5 cents per ton have been paid into the Water Trust Fund, while 

coal tax revenues based on a rate of 12.9 cents per ton have been paid into the Special 

Reclamation Fund. According to the state, payments for both land and water reclamation 

will be made from the Special Reclamation Fund until 2018, at which time payments for 

water treatment would be made from the Water Trust Fund. 

Page 16 GAO-10-206 Surface Coal Mining
 

operator must be able to demonstrate at least 3 consecutive years of 

compliance under Virginia’s Coal Surface Mining and Coal Reclamation 

Act or any other comparable state or federal act to participate in the bond 

pool. Once in the pool, an operator cannot opt out. Operators in the pool 

must pay an entrance fee of $1,000 when the total balance of the pool is 

determined to be greater than $2 million; the entrance fee increases to 

$5,000 if the total fund balance falls below $1.75 million, and remains at 

$5,000 until the balance again exceeds $2 million. A fee of $1,000 is 

required of all operators in the pool when the permit is renewed.35

Participants in the bond pool also furnish a bond of $1,500 or $3,000 per 

acre, depending on when the permit was issued.36 Regardless of acreage, 

bonds for operations entering the fund on or after July 1, 1991, must be at 

least $100,000. If forfeiture occurs, the state may, after using the available 

bond monies, use the bond pool funds as necessary to complete 

reclamation liabilities for the permit area. 

To oversee the bond pool’s general operations, the Virginia legislature 

created a reclamation fund advisory board that meets at least twice each 

year to make recommendations to the director of the Department of 

Mines, Minerals and Energy.37 The advisory board must also report to the 

director and to the governor on the pool’s financial status and recommend 

to the director any new or amended regulations for administering or 

operating the pool. According to the department, the advisory board 

concluded in August 2009 that the fund was solvent. 

Kentucky offers mine operators who meet eligibility criteria the option of 

participating in a bond pool, but the vast majority of operators provide 

full-cost bonds. According to the most recently available state data, as of 

May 2007, only 65 permits were covered by the bond pool. As of June 30, 

2009, OSM data showed that there were a total of 893 permits for surface 

mining in Kentucky. To participate in the bond pool, state regulations 

require that an operator have an acceptable or better history of 

Kentucky

 

35Permits are renewed after 5 years. 

36Bonds for permits issued prior to July 1, 1991, were $1,500 per acre, while those issued 

after are $3,000 per acre. 

37According to state regulation, the Reclamation Fund Advisory Board is to consist of five 

members appointed by the governor subject to confirmation by the General Assembly, 

three of whom shall represent the coal industry; one of whom shall be a representative of 

the director to the Department of Mines, Minerals and Energy; and one of whom shall be a 

member of the public without any coal industry interests. 

Page 17 GAO-10-206 Surface Coal Mining
 

compliance with the state’s mining regulations, among other criteria. The 

cost of membership ranges from $1,000 to $2,500 and depends on a 

member’s performance record. In addition, participants must obtain a 

bond that ranges from $500 to $2,000 per acre, depending on the 

performance rating of the member. Finally, members pay a 5 cent per-ton 

fee for surface-mined coal. When the Kentucky Bond Pool Fund reaches 

$17.4 million, the assessment of tonnage fees is to be suspended for all 

members who have made 36 or more monthly payments to the fund. If the 

fund level drops to $12.3 million, the tonnage fee requirement will be 

reinstated for all members. The funds in the pool are available only for 

reclamation costs at sites operated by members of the pool. Bond pool 

members’ per-acre bonds are fully released at the completion of the initial 

phase of reclamation. After the initial phase, a permit is covered only by 

the bond pool. 

In Kentucky, the law requires a review of the actuarial soundness of the 

bond pool every 3 years. The last Kentucky actuarial study, which 

evaluated the pool as of May 31, 2007, concluded that the fund, with a 

balance of $19.7 million, was solvent and that it had been building its 

assets at a faster pace than the increase in its outstanding liabilities. As an 

indication of the pool’s financial soundness, the study noted, the pool 

could survive the failure of its two largest members. The study concluded 

that the fund’s soundness had improved because its liability was more 

evenly spread among its members. The study recommended that the state 

continue the 5 cent per ton fee for surface coal mines and limit the 

maximum amount of bond funds held for any member operator to $6 

million, or about 30 percent of the total bond pool. According to the state’s 

bond pool administrator, the pool has continued the 5 cent per ton fee as 

recommended. He also said there has never been a member of the bond 

pool to have bonds in excess of $4 to $5 million because the program 

primarily offers bonding assistance to small coal operators. 

Tennessee is the only one of the four states we reviewed to use a full-cost 

bond system exclusively. As of September 30, 2008, the state had 15 active 

surface coal mines. OSM held bonds totaling about $17.8 million for those 

15 mines. In 2007 OSM revised its regulations for Tennessee to address 

concerns that full-cost bonds were not adequate to handle the problem of 

Tennessee 

Page 18 GAO-10-206 Surface Coal Mining
 

post-mining acid- or toxic-mine drainage.38 Specifically, the new 

regulations provide a mechanism in Tennessee to allow operators to 

establish a trust fund or annuity to cover the cost of postmining pollution 

discharges in lieu of a performance bond.39 OSM’s policy in Tennessee is to 

assume that post-mining pollution discharges will need to be treated for at 

least 75 years, barring evidence to the contrary. When OSM established the 

trust fund and annuity options in Tennessee, it stated that a system that 

provides an income stream may be better suited than full-cost bonds to 

ensure the long-term treatment of postmining pollution discharges. 

According to OSM, surety bonds, the most common form of a full-cost 

bond, are especially ill-suited for this purpose because surety companies 

normally do not underwrite a bond when there is no expectation of release 

of liability. The addition of this authority in Tennessee builds upon the 

experience of Pennsylvania, which had already established a process for 

accepting trust funds or annuities to pay for postmining discharges. 

OSM Oversees State 

Bonding Programs and Has 

Made Bonding a National 

Priority for the 2010 

Evaluation Year 

In October 2009, the acting director of OSM announced that OSM was 

making bonding a national priority of its 2010 annual evaluation of state 

mining programs.40 Specifically, the acting director instructed regional and 

field office directors to evaluate how states are complying with their own 

regulations for determining required bond amounts. The instructions 

further stated that the evaluations should assess whether (1) the states’ 

methods of determining bond amounts ensure that adequate funds are 

available to the state in the event that the operator forfeits its bond, (2) the 

bond calculation methods include a mechanism to adjust bond amounts or 

provide other financial assurance to cover the cost of unanticipated longterm postmining pollutional discharges that develop after permit approval, 

and (3) the state re-evaluates the bond amount each time a permit is 

 

38Acid mine drainage is acidic water rich in heavy metals that forms through the chemical 

reaction of surface water (rainwater, snowmelt, and pond water) and shallow subsurface 

water with rocks that contain sulfur-bearing minerals, resulting in sulfuric acid. Acid mine 

drainage commonly flows from or is caused by surface mining, deep mining, or coal refuse 

piles. According to EPA, there are a number of major environmental problems caused by 

acid mine drainage: (1) disrupts growth and reproduction of aquatic plants and animals, 

(2) diminishes valued recreational fish species, (3) degrades outdoor recreation and 

tourism, (4) contaminates surface and groundwater drinking supplies, and (5) causes acid 

corrosion of infrastructure like wastewater pipes. 

39Tennessee Federal Regulatory Program, 72 Fed. Reg. 9616 (Mar. 2, 2007). 

40A new director of OSM was confirmed subsequent to this announcement. The agency’s 

2010 evaluation year is from July 1, 2009, through June 30, 2010. 

Page 19 GAO-10-206 Surface Coal Mining
 

revised or renewed. According to an OSM official in the Appalachian 

Regional Office, OSM chose bonding as a national priority after surveying 

managers and staff for their oversight priorities. OSM’s November 2009 

work plan calls for OSM to examine a sample of forfeited sites to 

determine whether adequate bonds were posted and whether the sites 

were reclaimed as proposed in their reclamation plans. For those sites 

covered in part or in total by a full-cost bond, OSM plans to use its 

directive on bond calculation as a basis for evaluating the adequacy of 

bonds. OSM plans to finalize a report on its findings by September 1, 2010. 

In addition, OSM announced in November 2009 that it was considering 

rulemaking to address concerns related to bonding programs. One of 

OSM’s concerns is that mine operators do not always apply for bond 

release in a timely manner, particularly for phases II and III. OSM noted 

that there is no legal requirement that operators apply for bond release in 

a timely manner and identified several options for improving timeliness. 

Another concern of OSM was that the data needed to assess the success of 

reclamation has not been adequate. To improve data quality, OSM is 

considering requiring operators to submit an annual status report to the 

regulatory authority with information on areas that are permitted, bonded, 

disturbed, backfilled and graded, newly planted, and that have reached 

one or more of the phases of bond release. 

While OSM has made bonding an oversight priority for 2010 and is 

considering related rulemaking options, it has reported on various aspects 

of state bonding programs in prior annual evaluations. For example, in its 

2009 evaluation year report on West Virginia, OSM reported that it did not 

appear that the state was meeting requirements for inspections at bond 

forfeiture sites. OSM estimated that the state had completed about 55 

percent of the required inspections at bond forfeiture sites.41 In its 2009 

report on Virginia, OSM reported that it had reviewed a sample of 

operators that applied for phase III bond release during the year and found 

that on-the-ground reclamation had been successful. In its 2009 report on 

Kentucky, OSM provided information on the number of forfeited permits 

at which reclamation was complete or underway. OSM has reported on the 

states’ bonding programs in other evaluations, but it was not within the 

scope of our review to assess the effectiveness of those programs. 

 

41In commenting on a draft of this report, West Virginia noted that it conducted additional 

inspections not counted by OSM, including site visits related to contract monitoring and 

water treatment activities. 

Page 20 GAO-10-206 Surface Coal Mining
 

The Corps has not required operators with section 404 permits for mines 

with valley fills to provide financial assurances to ensure mitigation is 

completed, according to officials in the five district offices that approve 

permits in the four states we reviewed. Corps officials said they have not 

required financial assurances for the following reasons: 

• The agency does not have statutory authority to directly hold and use 

performance bonds to ensure that mitigation is completed. Officials said 

that if they did require financial assurances, an operator would need to 

identify a third party to hold the assurances and complete the mitigation if 

the operator does not. Some Corps officials said, however, that few third 

parties with the ability to conduct stream restoration have been available. 

The Corps Has Not 

Required Financial 

Assurances for Valley Fill 

Permits in the Four States 

but Has Relied on Other 

Mechanisms 

• The mine operators have had sufficient capital to complete required 

mitigation or have demonstrated their ability to successfully complete 

other mitigation work. 

• It is assumed that mine operators will comply with compensatory 

mitigation requirements without financial assurances. 

• The operators’ approved mitigation projects are not yet complete and 

therefore the Corps has no evidence that these projects will be 

unsuccessful. 

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. Specifically, one mechanism may 

require the operator, under the terms of its permit, to prepare an adaptive 

management plan. Such a plan would identify alternative mitigation 

actions the operator would take in the event that elements of the original 

plan did not succeed. In addition to an adaptive management plan, the 

Corps may require a permit to include a contingency plan that identifies 

acceptable alternative compensatory mitigation should the approved 

mitigation project fail. A contingency plan could require that the operator 

purchase mitigation credits from an in-lieu-fee program if the planned 

mitigation does not succeed.42

 

42In-lieu-fee arrangements are often sponsored by public or nonprofit entities. Under 

agreements with the Corps, in-lieu-fee sponsors receive payments from multiple operators 

required to perform compensatory mitigation. Then, at a later date, the sponsors use these 

funds to implement compensatory mitigation projects. 

Page 21 GAO-10-206 Surface Coal Mining
 

Some Corps officials also told us that the SMCRA bond could be used to 

cover the mitigation required under section 404, but others disagreed. 

According to a Norfolk, Virginia district Corps official, when off-site 

mitigation is part of the 404 permit, the Virginia state mining agency will 

expand the area covered by the SMCRA bond beyond the mine area to 

include land on which the 404 mitigation is to be done. The Norfolk, 

Virginia district official stated that this practice is consistent with the 

Corps’ 2004 mitigation policy for surface mining operations.43 This policy 

encourages district engineers to coordinate with state or OSM staff and 

the mining operators to incorporate required SMCRA features—such as 

drainage ditches and sediment ponds—into section 404 compensatory 

mitigation plans. On the other hand, Corps officials in Huntington, West 

Virginia, said they consider the SMCRA bond as a financial assurance only 

for mitigation projects done on the surface mine site. In further contrast, a 

Corps district official we spoke with in Louisville, Kentucky, does not 

consider the SMCRA bond to be an assurance for on-site section 404 

mitigation because the goals of reclamation and mitigation are not always 

the same. According to Corps headquarters officials, the district offices 

have the discretion to decide if SMCRA mitigation projects qualify as 

section 404 mitigation. Officials from OSM’s Appalachian region and field 

offices agreed that on-site section 404 compensatory mitigation can be 

incorporated as a special condition of the surface mining reclamation plan 

in a SMCRA permit. 

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 and State 

Agencies Are Not 

Required to Monitor 

Former Mine Sites but 

Have Conducted 

Some Analyses of 

Environmental 

Impacts 

 

43The Corps, Mitigation for Impacts to Aquatic Resources from Surface Coal Mining, 

(May 7, 2004). 

Page 22 GAO-10-206 Surface Coal Mining
 

Federal and state agencies in the four Appalachian states we reviewed are 

not required by SMCRA or the Clean Water Act to monitor mine sites with 

valley fills or associated mitigation sites after they have determined that 

reclamation and mitigation are complete. Most officials we interviewed at 

the federal and state mining and environmental protection agencies in the 

four states we reviewed said post-reclamation or post-mitigation 

monitoring is not needed, with officials from several agencies explaining 

that the laws or their implementing regulations require adequate 

monitoring before an agency can determine that either reclamation or 

mitigation is complete. For example, in order to obtain bond release under 

SMCRA, mine operators must be able to demonstrate to agency inspectors 

that revegetation, water quality, and other standards are being met. 

Generally, this period is 5 years after the last reclamation activity. Officials 

from EPA and the state departments of environmental protection also told 

us that they do not monitor mine sites for water pollution discharges after 

they have been reclaimed. In order to achieve bond release, according to 

OSM and state officials, the operator typically removes and reclaims all 

sediment ponds that are subject to section 402 discharge permits and must 

demonstrate that discharge limits have not been exceeded for a year. 

Therefore, once the bond has been released, officials would no longer 

have a reason to monitor the site for section 402 permit violations. 

Officials from two Corps districts said that the Corps’ requirement that the 

operator monitor and report on mitigation sites for 5 to 10 years before the 

Corps will determine that the mitigation is complete is sufficient. In 

addition, officials from three Corps district offices told us that because 

they did not begin to consistently issue section 404 permits for valley fills 

until 2002, few mitigation projects have been in place long enough to have 

been completed and thus are not available for post-mitigation review. 

Additional Monitoring 

after Releasing Financial 

Assurances Is Not 

Required or Needed, 

According to Many Agency 

Officials 

While the agency officials we spoke with generally said that additional 

monitoring is not necessary after reclamation and mitigation are complete, 

there were some that said that additional monitoring is needed to evaluate 

the long-term effectiveness of those activities. Specifically, officials from 

EPA’s Office of Water and region 3 and 4 offices said that they believe 

monitoring has not been adequate to document the success of section 404 

mitigation projects.44 Officials from the U.S. Geological Survey Water 

Science Center in West Virginia told us that additional long-term 

 

44EPA’s Region 3 includes Virginia and West Virginia, as well as Delaware, the District of 

Columbia, Maryland, and Pennsylvania. Region 4 includes Kentucky and Tennessee, as well 

as Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina. 

Page 23 GAO-10-206 Surface Coal Mining
 

monitoring is needed to collect data on a range of issues, including water 

contamination, flooding, and land stability. 

Agencies Have Conducted 

Some Studies, which Show 

Long-Term Impacts from 

Valley Fills, and Taken 

Some Actions 

Several agencies have conducted or funded studies that show some 

evidence of the effect of environmental changes associated with 

mountaintop mines with valley fills after reclamation. The majority of the 

studies that agencies referred us to were done as part of the 2003 draft 

multiagency programmatic environmental impact statement (PEIS) on 

mountaintop mining and valley fills.45 Among the concerns raised by these 

studies were reforestation efforts, effects of mining on aquatic organisms, 

relations between valley fills and floods, and reclamation to the 

approximate original contour. Several agencies have taken actions in 

response to some of these concerns, such as promoting new reforestation 

methods. 

OSM and state mining agencies have found that reclamation efforts on 

mountaintop mines and valley fill sites could be improved to yield more 

successful reforestation. For example, the 2003 draft PEIS noted that 

previously forested mountaintop mine sites were more likely to have been 

revegetated with grasses than with trees. One PEIS study compared 

revegetation at a sample of southern West Virginia mountaintop removal 

and valley fill mining sites with adjacent unmined sites; the revegetation 

had occurred from 8 to 26 years prior to the study, and therefore the 

operators probably had their bonds released.46 According to the study, 

poor vegetation development with time was typical of the reclaimed sites, 

with significantly lower tree diversity on the mined sites than in adjacent 

forests. The study found that its data and other published studies 

supported the conclusion that mining reclamation procedures limit the 

overall ecological health and inhibit the desired growth of native tree and 

OSM and State Mining Agency 

Studies Found that 

Reforestation Efforts at 

Reclaimed Mine Sites Needed 

Improvement 

 

45EPA, Mountaintop Mining/Valley Fills in Appalachia Draft Programmatic 

Environmental Impact Statement, U.S. EPA Region 3, 9-03-R-00013 (2003). The draft PEIS 

was prepared by EPA, the Corps, OSM, the U.S. Fish and Wildlife Service, and the West 

Virginia Department of Environmental Protection. The purpose of the PEIS was to evaluate 

options for improving agency programs under the Clean Water Act, SMCRA, and the 

Endangered Species Act that will contribute to reducing the adverse environmental 

impacts of mountaintop mining operations and excess spoil valley fills in Appalachia. 

46Steven N. Handel, “Terrestrial Plant (Spring Herbs, Woody Plants) Populations of 

Forested and Reclaimed Sites.” Appendix in Mountaintop Mining/Valley Fills in Appalachia, 

Draft Programmatic Environmental Impact Statement, Region 3, U.S. Environmental 

Protection Agency. (Available from: 

http://www.epa.gov/region3/mtntop/eis2003appendices.htm#appe.) 

Page 24 GAO-10-206 Surface Coal Mining
 

shrub species on the site.47 With regard to the study in the draft PEIS, OSM 

officials told us that SMCRA permits do not always call for reforestation. 

For example, a mine site might be approved for reclamation as pasture or 

commercial development. Therefore, reclaimed mine sites may not need to 

become forested to meet SMRCA requirements. 

In June 2008, OSM issued a policy directive to promote the 

reestablishment of forest land where existing forests had been removed by 

surface mining.48 In its directive, and in related advisory documents, OSM 

noted that past reclamation and revegetation efforts had not been fully 

successful and had led to low rates of tree survival and growth, forest 

fragmentation, reduced carbon sequestration, loss of wildlife habitat and 

forest products, and increased potential for floods. To reverse this trend, 

the directive encourages, but does not require, the widespread and routine 

planting of native, high-value trees that should help restore the uses and 

ecosystems provided by forests prior to mining. The directive also 

encourages mine operators to avoid compacting the top 4 feet of soil on 

reclaimed mine sites in order to promote water infiltration and tree 

growth. The OSM directive is part of a broader effort known as the 

Appalachian Regional Reforestation Initiative—formed in 2004 by federal 

and state agencies, the coal industry, environmental organizations, and 

others in the Appalachian region—to promote improved reforestation 

techniques on surface-mined lands.49 Officials from Kentucky, Virginia, and 

West Virginia told us that the OSM initiative built upon changes in 

reforestation policy or regulation at the state level. According to an OSM 

Appalachian Region official, while he believes that the use of these 

techniques is increasing, he also said that reliable data showing the acres 

of mined land planted using these techniques are not available. According 

to this official, OSM is working with participants in the reforestation 

initiative on methods for assessing success. 

 

47The nature of the plant communities that are found on reclaimed mine sites is likely to 

affect the types and diversity of animals that inhabit those sites. According to the 2003 

draft PEIS, the mix of bird species in the study area tended to be affected by the presence 

of mined or reclaimed mine lands compared with unmined land. Similarly, the mix of 

amphibian and reptile populations was affected by the presence of mining. 

48OSM directive TSR-16, Reforestation of Title IV and Title V Mined Lands (June 10, 2008) 

available at www.osmre.gov/guidance/directives/directive931.pdf. 

49Federal agency signatories to the reforestation initiative include the Forest Service and 

the Natural Resources Conservation Service in the Department of Agriculture; the Fish and 

Wildlife Service, the Geological Survey, and OSM in the Department of the Interior; and the 

National Energy Technology Laboratory in the Department of Energy. 

Page 25 GAO-10-206 Surface Coal Mining
 

According to the 2003 draft PEIS, approximately 1,200 miles of headwater 

streams within the boundaries of mining permits (or 2 percent of the 

streams in the central Appalachian study area) were directly affected by 

mountaintop mining and valley fills. For example, streams below valley 

fills were characterized by contaminants discharged from mine sites as 

well as less diverse and more pollutant-tolerant aquatic invertebrates and 

fish. Furthermore, in some locations, streams where mountaintop mines 

and valley fills exist, concentrations of selenium, a potentially toxic 

element that accumulates in aquatic organisms, were found to exceed 

standards. 

Federal Agencies Have Found 

That Contaminants from Mine 

Sites, Including Reclaimed 

Sites with Valley Fills, Have 

Harmed Aquatic Organisms 

In 2008, EPA scientists reported that aquatic life downstream from 27 

active and reclaimed mountaintop mines with valley fills showed subtle to 

severe effects compared with aquatic life downstream in similar, but 

unmined, West Virginia watersheds.50 More specifically, the authors 

compared three reclaimed mine sites with three unmined sites over a 

period of 6 to 7 years. According to the study, two of the three reclaimed 

mine sites showed further degradation of aquatic organisms over the 

period while the third showed some improvement, but in each case the 

three reclaimed sites were impaired compared with the unmined sites. 

EPA has cited the 2008 study, as well as other analyses, in recent actions 

that it has taken on section 404 permits for valley fills. In September 2009, 

EPA announced its plan for the “enhanced coordinated review” of 79 

section 404 permit applications for surface mines with valley fills pending 

with the Corps.51 In making its announcement, EPA stated, among other 

things, that on the basis of the scientific literature, its field experience, and 

available project information, it was concerned that the mitigation 

proposed may not be sufficient to replace lost aquatic resources. On the 

other hand, Corps officials told us that they believe that the scientific 

literature EPA referred to is not complete; specifically, that it lacks 

adequate site-specific analysis. 

 

50Gregory J. Pond, Margaret E. Passmore, Frank A. Borsuk, Lou Reynolds, and Carole J. 

Rose, “Downstream effects of mountaintop coal mining: comparing biological conditions 

using family- and genus-level macroinvertebrate bioassessment tools.” Journal of the North 

American Benthological Society, vol. 27, no. 3 (2008). The Journal identifies the authors as 

EPA Region 3 scientists. 

51These 79 permit applications are in addition to a set of 48 section 404 permit applications 

that EPA reviewed earlier in 2009. EPA raised environmental concerns with 6 of the 48 

applications. 

Page 26 GAO-10-206 Surface Coal Mining
 

Also in September 2009, EPA asked the Corps to reconsider a section 404 

permit that it issued in 2007 for the Spruce No. 1 mine in West Virginia 

with planned valley fills that, if built, would fill more than 8 miles of 

headwater streams. EPA expressed concerns that the Corps decision to 

issue the permit did not reflect studies showing that impairments from 

surface coal mining are persistent over time and cannot be easily mitigated 

or removed. EPA also raised specific concerns about the mitigation plan in 

the issued permit, including the planned use of drainage ditches—such as 

might be constructed at the perimeter of valley fills—as compensatory 

stream channels. EPA said that it has consistently objected to the use of 

these ditches as compensation for lost headwater stream channels and 

requested that the Corps re-evaluate the mitigation plan to ensure that it 

achieves functional replacement of lost aquatic resources. On September 

30, 2009, the Corps’ district engineer in Huntington, West Virginia, 

responded to EPA, noting that the decision to issue the permit had 

followed extensive coordination with EPA for nearly 10 years concerning 

the project’s scope, alternatives, and compensatory mitigation and 

included the preparation of an Environmental Impact Statement. 

Furthermore, the district engineer said that there were no factors at that 

time that compelled him to consider suspending, modifying, or revoking 

the permit. However, EPA’s acting regional administrator for Region 3 

wrote to the Corps on October 16, 2009, that additional modifications 

would need to be made if the permit were to comply with the Clean Water 

Act and the regulations implementing the act. 

EPA is preparing additional analysis of the impacts of mountaintop mining 

sites, including reclaimed sites, on water quality and aquatic life. EPA’s 

Office of Research and Development plans to release for public comment 

a draft assessment in early 2010 that evaluates restoration and recovery 

methods that mining companies use to address the ecological impacts 

associated with mountaintop mining and valley fills.52 EPA plans to 

prepare the assessment with advice from an expert panel chartered under 

the Federal Advisory Committee Act. 

Federal and state agencies examining the impact of mountaintop mines 

with valley fills have found that in streams downstream from these sites, 

low flows are usually increased and storm flows are sometimes increased. 

For example, according to the 2003 draft PEIS, streams in watersheds 

Federal Agencies and the State 

of West Virginia Have Drawn a 

Link between Valley Fills and 

Changes to Water Flow 

 

5274 Fed.Reg. 48952. 

Page 27 GAO-10-206 Surface Coal Mining
 

below valley fills tended to have greater base flows.53 Streams with fills 

were generally less likely to experience increases in peak flow than 

unmined areas during most storms. However, they were more likely to 

experience increases in peak flow during more intense rainfall events. 

Consequently, the draft PEIS concluded that water flows may increase 

below valley fills, but that the effects are site-specific. This conclusion was 

derived, at least in part, from studies by the U.S. Geological Survey, which 

compared changes in water flow in watersheds with valley fills (some of 

which had been reclaimed) with watersheds without valley fills. 

In addition, the state of West Virginia has examined the extent to which 

mining activities may have contributed to flooding associated with a 

particular storm event. On July 8, 2001, the southern portion of West 

Virginia experienced a major rainstorm that produced disastrous flooding. 

This flooding damaged or destroyed hundreds of homes and many 

businesses. Most of the affected counties are in the heart of West Virginia’s 

southern coalfields and have extensive underground and surface mining 

activities. Logging is also prevalent in this region. In response to public 

concerns, the governor created a Flood Investigation Advisory Committee 

and a Flood Analysis Technical Team to focus specifically on the impacts 

of the mining and logging industry on the July 8th flooding. 

The team compared two watersheds with extensive mining (and logging) 

activities, including valley fills, with a third watershed with no such 

activities. In general, according to the team, the contributions of mining 

and logging to increased water flow were relatively small when compared 

to the total stream flow volumes.54 It concluded, however, that mining and 

logging influenced the studied watersheds by increasing surface water 

runoff and the resulting stream flows at various evaluation points. 

Consequently, the flood analysis technical team recommended that, among 

other things, the state revise its regulations to prohibit any increase in 

surface water discharge over pre-mining conditions and modify certain 

requirements for valley fill construction. In 2003, the state received OSM’s 

approval to revise its mining regulations to require that permit 

applications contain a storm water runoff analysis and that the worst case 

during mining and post-mining evaluations must show no net increase in 

 

53The base flow of a stream is the “fair weather” flow, which is largely made up of ground 

water rather than runoff from precipitation. 

54Flood Advisory Technical Taskforce, Runoff Analyses of Seng, Scrabble, and Sycamore 

Creeks (June 14, 2002). 

Page 28 GAO-10-206 Surface Coal Mining
 

peak runoff compared with the pre-mining evaluation.55 According to the 

Secretary of the West Virginia Department of Environmental Protection, 

the state has also modified its valley fill construction rules to further 

ensure no flooding potential in times of short, intense runoff from flash 

storms.56 These modifications include engineering requirements to help 

ensure the stability of the valley fill.57

Returning spoil material to a mined out area in order to approximate the 

original contour and elevation of the mountain helps to reduce the amount 

of excess spoil that otherwise might be placed in a valley fill. As we 

reported in December 2009, most operators in West Virginia and Kentucky 

have not requested a variance from this requirement.58 However, according 

to OSM studies in 1999 and 2001 of West Virginia and Kentucky’s 

implementation of the approximate original contour standard, some 

reclaimed sites where the operator was supposed to return the land to 

approximate original contour differed little from sites that had been 

granted variances.59 OSM also reported in 1999 that most mountaintop 

removal projects in Virginia were reclaimed to a configuration closely 

resembling the approximate original contour, even when the state had 

granted a variance to the operator. Following those findings, the states 

OSM Has Studied Operators’ 

Reclamation of Mountaintops 

to Approximate Original 

Contour 

 

55West Virginia Regulatory Program, 68 Fed. Reg. 40157- 40159 (Jul. 7, 2003) (codified at W. 

Va. Code R. § 38-2-5.6 (2009). 

56From a statement the Secretary of West Virginia’s Department of Environmental 

Protection submitted to the Senate Committee on Environment and Public Works 

Subcommittee on Water and Wildlife for a June 25, 2009, hearing titled “The Impacts of 

Mountaintop Removal Coal Mining on Water Quality in Appalachia.” 

57In commenting on a draft of this report, OSM noted that it had conducted an evaluation of 

the state’s storm run-off analysis in March 2009. OSM’s full evaluation report is on the Web 

at http://arcc.osmre.gov/cfo/SWORA2008.pdf. In its comments on a draft of this report, the 

Kentucky Department for Natural Resources noted that the state has regulations in place 

for flooding analysis and the assurance of no change in pre-mining, during, and post-mining 

water flows. 

58GAO-10-21. 

59Specifically, the OSM report on Kentucky found that state regulators had placed a greater 

emphasis on the amount of spoil material returned to the mined-out area and not enough 

emphasis on the post-mining land configuration, land use, slope stability, and drainage 

controls. In commenting on a draft of this report, Kentucky stated that the sites evaluated 

by OSM were returned to approximate original contour despite the approval for a variance. 

Similarly, the OSM report on West Virginia concluded that the state’s approximate original 

contour determinations should give more attention to large, post-mining changes in 

elevation in relation to the pre-mining relief; the amount and location of spoil placed 

outside the mined area; and land configuration. 

Page 29 GAO-10-206 Surface Coal Mining
 

issued new guidance on how to achieve approximate original contour. In 

2007 and 2008, OSM reviewed the effectiveness of the states’ new contour 

policies and procedures; the results of those reviews were not available as 

of November 2009. In October 2009, OSM’s acting director instructed the 

field offices to assess all the states’ implementation of approximate 

original contour standards starting in 2010. 

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). 

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 

SMCRA Provides Limited 

Authority to Address 

Environmental Problems 

at Former Mine Sites after 

Bond Release 

OSM and state mining agencies can use additional SMCRA provisions 

under two limited sets of circumstances to address environmental 

problems at former mine sites. First, SMCRA regulations require a mining 

agency to reassert jurisdiction over a mine site after a bond release if it 

can demonstrate that the release was based on the operator’s fraud, 

collusion, or misrepresentation of a material fact. According to OSM, 

reassertion of jurisdiction could involve reopening the permit and 

requiring a new bond. However, OSM and state officials reported to us that 

they have rarely needed to use this authority. For example, OSM told us 

that it had reasserted jurisdiction on one post-bond release site in West 

Virginia that was discharging pollution after the agency successfully 

argued in court that the company had misrepresented material facts when 

the bond was released. 

Second, SMCRA authorizes OSM and approved states to use funds from 

OSM’s Abandoned Mine Land Fund to reclaim some sites. SMCRA 

Page 30 GAO-10-206 Surface Coal Mining
 

established the fund to reclaim certain sites mined prior to SMCRA’s 

passage in 1977. However, amendments to SMCRA have made these funds 

available for additional projects. Specifically, OSM and primacy states can 

use these funds to reclaim sites for which any bond or other source of 

funds is insufficient for reclamation when (1) mining occurred between 

the enactment of SMCRA and OSM approval of a state program or (2) 

mining occurred between the enactment of SMCRA and its amendment in 

1990 and the mine operator’s surety has become insolvent.60 Moreover, 

these funds must be used to rectify situations posing extreme danger or 

adverse effects to public health and safety before they are used to restore 

environmental resources. Funds for carrying out these purposes are 

generated by a tax on coal production and may also be generated by 

penalties assessed for violations of SMCRA.61 OSM officials told us that 

each year a small amount of civil penalty money is available for any state 

that requests it, on a competitive basis for site reclamation and that the 

agency has used these funds in the past for as many as four inadequately 

reclaimed mine sites each year. 

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. First, the act authorizes EPA or EPA-authorized 

states to regulate discharges of pollutants from point sources by issuing 

and enforcing National Pollutant Discharge Elimination System section 

402 permits that include limits on discharges of specific pollutants. 

According to EPA officials, a point source at a mining site could be, for 

example, a ditch draining a sediment pond at the base of a valley fill. Mine 

operators typically remove such point sources prior to receiving full bond 

release. However, in some circumstances, sediment ponds and associated 

drainage ditches may be authorized to remain on site if provisions for 

ongoing maintenance of the pond are made. If, after bond release, 

conditions at the former mine site change so that pollutants are being 

discharged from a point source, the party responsible for maintaining the 

point source—which could be the former mine operator or the landowner 

of the mine site—would have to obtain a section 402 permit and would be 

subject to applicable pollutant discharge limitations. EPA officials 

 

60SMCRA was enacted on August 3, 1977, and the applicable amendments were passed on 

November 5, 1990. 

61The use of civil penalty funds is subject to authorization in an annual appropriation act or 

other relevant statute. 

Page 31 GAO-10-206 Surface Coal Mining
 

emphasized that a point source may remain after bond release and that the 

requirement to maintain a permit for any such remaining point source 

would be indefinite. However, state officials told us that they have rarely, 

if ever, needed to use this Clean Water Act authority to require a new 

permit for a point source at a surface coal mine.62

Second, the Clean Water Act requires states to identify impaired waters 

and to develop “total maximum daily loads” (TMDLs) for impaired 

waters.63 States may be able to use information on impaired waters to 

indirectly mitigate latent pollution associated with former surface coal 

mine sites. Specifically, if the state determines that a water body is 

impaired, it must eventually develop, for each pollutant causing an 

impairment, a TMDL—the amount of the pollutant that the water body can 

receive, taking into account seasonal variations and a margin of safety, 

and still meet the water quality standard applicable to that body of water. 

To implement a TMDL, states allocate pollutant loadings among specific 

sources, such as mines, and incorporate the loads into the state’s water 

quality management plans and section 402 permits. Thus, if a proposed 

mine would cause a body of water to exceed its TMDL for a given 

pollutant, the state may, among other things, impose stricter discharge 

limits in that site’s section 402 permit in order to achieve water quality 

standards. In addition, the Corps and EPA may use the information on 

impaired waters in considering whether a section 404 permit for a valley 

fill operation should be issued. For example, in raising concerns regarding 

the Corps’ permit for the Spruce No. 1 mine in West Virginia in 2007, EPA 

cited the existence of a TMDL in the mine’s watershed; EPA’s decision as 

to whether to veto this permit was pending as of October 2009. 

The states we reviewed have identified mining as a general cause of 

impairment for certain bodies of water, but they have not attributed such 

impairments to specific mine sites. For example, West Virginia’s 2006 

Water Quality Assessment Report identified coal mining as a probable 

source of impairments for about 4,066 miles of streams in the state, but did 

not identify specific mining permits as a source. 

 

62A January 2009 court decision from the Northern District of West Virginia ruled that the 

West Virginia Department of Environmental Protection was required to apply for section 

permits for discharges at 18 forfeited mine sites at which it had taken over reclamation. In 

August 2009, the Southern District of West Virginia issued a similar ruling with regard to 

three additional bond forfeiture sites. 

63A TMDL is the maximum amount of a pollutant that can enter into a body of water 

without violating the relevant water quality standard. 

Page 32 GAO-10-206 Surface Coal Mining
 

CERCLA, commonly known as Superfund, authorizes, but does not 

require, EPA to respond to the release or threatened release of hazardous 

substances from a former surface coal mine.64 Whether a particular release 

from a former mine constitutes a hazardous substance must be determined 

on a case-by-case basis. Some of the pollutants commonly associated with 

coal or coal mining, such as selenium, are considered hazardous 

substances under CERCLA. CERCLA allows the government to collect the 

costs of mitigating or cleaning up these substances from responsible 

parties. However, EPA officials said that the agency has not used CERCLA 

authority to respond to mine pollution released from a former surface coal 

mine site.65 EPA has noted that coal contains trace amounts of hazardous 

substances, but that such amounts as may be released over time from a 

former surface mine might not rise to the level that would trigger an EPA 

response.66

CERCLA May Authorize 

EPA to Respond to 

Pollution from Former 

Mines 

 

64A “hazardous substance” refers to material that is listed or would be characterized as 

hazardous under CERCLA, the Clean Water Act, RCRA, the Clean Air Act, or the Toxic 

Substances Control Act. 

65Specifically, EPA officials told us that they have never used CERCLA to conduct a 

removal action—an emergency response to address threats to people and the environment 

in the short term—to address an issue at a former surface coal mine site and have never 

listed a former surface coal mine site on the National Priorities List—EPA’s list of some of 

the most contaminated sites in the country. 

66Although EPA has not used CERCLA to respond to mine pollution released from former 

mine sites, it has conducted removal actions under CERCLA to respond to pollution 

associated with coal production. For example, EPA used CERCLA to respond to a 2000 

coal slurry spill resulting from an impoundment failure at a coal preparation plant in Martin 

County, Kentucky. EPA also used CERCLA to respond to a December 22, 2008, breach in a 

dike at the Tennessee Valley Authority Kingston Fossil Plant that resulted in the release of 

5.4 million cubic yards of coal combustion residue into the nearby Emory River. The spill 

covered more than 300 acres, made 3 homes uninhabitable and damaged 23 other homes, 

plus roads, rail lines, and utilities. In addition, EPA has used CERCLA to respond to 

releases of hazardous substances that were stored at former surface mines but that were 

not directly related to the surface mining operation. 

Page 33 GAO-10-206 Surface Coal Mining
 

As currently implemented, the hazardous waste provisions of RCRA would 

not generally be available to address environmental issues at former 

surface coal mines because many of the wastes associated with the 

extraction, processing, and combustion of coal have been exempted from 

the definition of hazardous waste.67 However, concern over one particular 

coal by-product, coal combustion residue, may lead to regulation of the 

material as a hazardous waste in the future. Coal combustion residue—the 

material that is left once coal has been burned, as in a power plant—is 

sometimes placed on surface mines to abate acid mine drainage. 

According to OSM, the residue may also be used to enhance soil, seal and 

encapsulate material, and backfill mine sites. If coal combustion residue 

were deemed a hazardous waste, surface mines receiving such materials 

might be subjected to RCRA’s hazardous waste provisions and could be 

forced to address releases of hazardous wastes.68 Currently, EPA is 

developing regulations on managing coal combustion residue, including 

those managed in surface impoundments, such as one that failed in 

EPA is Considering 

Regulating Coal 

Combustion Residue at 

Surface Mines under RCRA 

 

67RCRA establishes a framework for regulation of hazardous and solid wastes: Subtitle C 

establishes federal “cradle-to-grave” regulation of hazardous wastes, and Subtitle D sets out 

minimum standards for state management of solid waste in landfills. RCRA includes 

provisions governing “corrective action”—cleanup—of hazardous wastes at covered 

facilities, and also authorizes EPA to issue orders requiring persons contributing to an 

imminent hazard to take necessary actions to clean up hazardous or solid waste releases. 

An amendment to RCRA, the Bevill amendment, exempted wastes from the extraction, 

processing and combustion of coal, among others, from the definition of hazardous waste 

pending further study by EPA. Based on these studies, EPA determined that regulation of 

these materials as hazardous wastes was not warranted and thus continued the exemption 

of these materials from the definition of hazardous waste. The Bevill amendment does not 

necessarily apply to every waste generated by a coal mine; any hazardous waste not 

exempted under the Bevill amendment would be subject to regulation under RCRA Subtitle 

C. Furthermore, waste exempted under the Bevill amendment, as well as any other waste 

that meets the definition of solid waste under RCRA, can in some circumstances be 

addressed under section 7003 of RCRA. Section 7003 of RCRA allows EPA to restrain the 

handling, storage, treatment, transportation or disposal of any solid waste or hazardous 

waste that may present an imminent and substantial endangerment to health or the 

environment. Thus, for example, EPA could prevent the storage of coal waste in an 

impoundment on a surface coal mine if such storage presents an imminent and substantial 

danger. 

68The placement of coal combustion residue on surface mines for reclamation purposes is 

currently regulated in general terms under SMCRA in that any material used to reclaim a 

permitted mine site must comply with SMCRA permitting requirements and performance 

standards. In commenting on this report, OSM noted that some states allow disposal on 

mine sites. In May 2000 EPA determined that more specific regulation of the placement of 

such material on a mine site might be appropriate under the solid waste provisions of 

RCRA or under SMCRA. In 2007 OSM issued an advance notice of proposed rulemaking to 

regulate such wastes specifically under SMCRA and drafted but did not publish a proposed 

rule. 

Page 34 GAO-10-206 Surface Coal Mining
 

Tennessee in December 2008.69 EPA is considering a number of 

approaches for regulating coal combustion residue, including using the 

solid waste provisions of RCRA, or a combination of the solid and 

hazardous waste provisions of RCRA. 

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. We also provided a draft of this report to the 

Kentucky Department for Natural Resources; the Virginia Department of 

Mines, Minerals and Energy; and the West Virginia Department of 

Environmental Protection. 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. 

Agency Comments 

and Our Evaluation 

The Department of the Interior said that it believed the report is an 

informative and fair characterization of the federal and state program 

requirements under SMCRA pertaining to financial assurances in the four 

states we reviewed. The Department of Defense said that, in general, it 

believed the report is informative and provides a good discussion of the 

issues involved in financial assurances for surface coal mining in 

Appalachia. The Environmental Protection Agency noted that the report 

provides a factual presentation of issues associated with the review and 

regulation of surface coal mining practices. The agency also noted that the 

data presented in this and a December 2009 GAO report provide helpful 

context for federal and state agencies as they continue to work together to 

address both the near- and long-term consequences of surface coal mining 

activities on the environment, water quality, and Appalachian coalfield 

communities. 

The three state agencies’ comments were critical of the draft report. For 

example, Kentucky commented that it believed the report is overly broad 

in its generalized statements, that terms and phrases are used 

interchangeably so as to confuse the issues, and that the report is written 

in a manner to misrepresent and sensationalize the issues. We do not agree 

that the report misrepresents or sensationalizes the issues, and have 

reviewed our use of terms—such as mountaintop mining, mountaintop 

 

69See footnote 66. The surface impoundment at the Kingston Fossil Plant was not located 

on a surface mining operation, but at a coal processing plant. 

Page 35 GAO-10-206 Surface Coal Mining
 

removal mining, valley fills, and hollow fills—to ensure that they are used 

consistently and appropriately throughout the report. 

Virginia commented that the report appears to be based on an assumption 

that there are post-bond release pollution discharges below valley fills, and 

that it was concerned with our use of an EPA study (by Pond, Passmore, et 

al.) to support the point that such discharges may occur. The state also 

noted that pollution problems that may occur are likely to be site-specific. 

We disagree with Virginia’s characterization of our report because we did 

not assume that there are post-bond release pollution discharges below 

valley fills. In fact, our report notes that there is little monitoring of sites 

after bond release, thereby making it difficult to assess post-bond release 

conditions. Nevertheless, we recognize in the report that there is some 

evidence, including in the EPA study, that such problems may occur. We 

agree that problems, if they occur, are likely to be site-specific. 

West Virginia noted that all coal mines—not just Appalachian mines with 

valley fills—are subject to SMCRA and the Clean Water Act. The state also 

commented that the report seemed to imply that there is a bonding or 

financial assurance problem in the four Appalachian states we reviewed 

and that surface coal mines with valley fills are the only mines that have 

the potential to cause environmental harm. West Virginia also commented 

that the report implied that the monitoring period before bond release 

should be longer. While we recognize that other types of coal mining are 

subject to these laws and may affect the environment, our report focused 

on surface coal mining with valley fills. The four states we reviewed have 

more than 98 percent of the recently approved valley fills across the 

country. In addition, our report contained no conclusions about the 

adequacy of the bonding programs in the four states or the length of the 

monitoring period; instead, we attempted to present information on the 

requirements of the relevant laws. Although West Virginia commented that 

the report did not give full credit to the state for improvements it has made 

in reforestation, approximate original contour, and surface water runoff 

practices, it did not provide any additional information to support these 

statements. The report does provide information on actions taken by the 

state in these areas. 

We present the agencies’ letters containing their general comments, along 

with our responses to them, as necessary, in appendixes III through VIII. 

The agencies, with the exception of EPA, also provided technical 

comments that we incorporated into the report, as appropriate. 

Page 36 GAO-10-206 Surface Coal Mining
 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution for 30 days from the 

report date. At that time, we will send copies of this report to interested 

congressional committees, the Secretaries of the Interior and Defense, and 

the Administrator of the Environmental Protection Agency. The report will 

also be available at no charge on the GAO Web site at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-3841 or mittala@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

Anu K. Mittal 

listed in appendix IX. 

Director, Natural Resources and Environment 

Page 37 GAO-10-206 Surface Coal Mining
Appendix I: Objectives, Scope, and 

Methodology 

Page 38 GAO-10-206 

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. 

This report focused on the four Appalachian states of Kentucky, 

Tennessee, Virginia, and West Virginia because these areas account for 

more than 83 percent of the surface coal production in Appalachia and 

more than 98 percent of recently approved valley fills across the country. 

The data on coal production is from the Energy Information 

Administration and can be found at 

http://www.eis.doe.gov/cneaf/coal/page/arc/table1.html. The data on valley 

fills are based on permits approved from October 1, 2001, through June 30, 

2005, as reported in Department of Interior, Office of Surface Mining 

Reclamation and Enforcement, Environmental Impact Statement: 

Proposed Revisions to the Permanent Program Regulations 

Implementing the Surface Mining Control and Reclamation Act of 1977 

Concerning the Creation and Disposal of Excess Spoil and Coal Mine 

Waste and Stream Buffer Zones, OSM-EIS-34 (2008). We also gathered 

background data on valley fills approved in the four states from January 1, 

2000, through various dates in mid-2008 to mid-2009. The data from 

Kentucky and West Virginia are drawn from GAO-10-21, Surface Coal 

Mining: Characteristics of Mining in Mountainous Areas of Kentucky 

and West Virginia. Neither Virginia nor Tennessee maintained valley fill 

data in electronic form. State officials provided fill data for Virginia and 

OSM officials provided fill data for Tennessee by reviewing hardcopy 

permits issued since 2000. We interviewed state and OSM officials about 

the reliability of the data they provided and compared their results to 

OSM’s 2008 environmental impact statement on excess spoil and stream 

buffer zones. We determined the data were sufficiently reliable for our 

purposes. 

To address each of the objectives, we obtained documents from and 

interviewed officials at several federal and state agencies. These included 

officials in the Department of the Interior’s OSM in (1) headquarters; (2) 

Appalachian Regional Office in Pittsburgh, Pennsylvania; and (3) field 

offices in Lexington, Kentucky; Knoxville, Tennessee; Charleston, West 

Virginia; and Big Stone Gap, Virginia. The OSM field office in Knoxville 

 Surface Coal Mining 
Appendix I: Objectives, Scope, and 

Methodology 

manages the mining program in Tennessee. We also interviewed and 

obtained information from officials in the Environmental Protection 

Agency (EPA) headquarters and regional offices in Philadelphia, 

Pennsylvania (Region 3) and Atlanta, Georgia (Region 4); officials in the 

U.S. Geological Survey; and officials in the Corps of Engineers 

headquarters and district offices in Louisville, Kentucky; Pittsburgh, 

Pennsylvania; Nashville, Tennessee; Norfolk, Virginia, and Huntington, 

West Virginia. Those five district offices are responsible for issuing and 

enforcing the Clean Water Act section 404 permits to surface mines in the 

states of Kentucky, Tennessee, Virginia, and West Virginia. Moreover, we 

interviewed and obtained information from the following state agencies in 

the four states we reviewed: the Kentucky Department for Natural 

Resources; Kentucky Division of Water; Tennessee Department of 

Environment and Conservation; Virginia Department of Mines, Minerals 

and Energy; Virginia Department of Environmental Quality; and West 

Virginia Department of Environmental Protection. 

To describe the approaches OSM, the states, and the Corps have taken to 

obtain financial assurances for surface coal mines with valley fills, we 

reviewed relevant sections of SMCRA and OSM’s implementing regulations 

and policy guidance to identify national requirements for financial 

assurances associated with surface mining reclamation. We also reviewed 

state mining laws in the three states that have primacy for administering 

SMCRA—Kentucky, Virginia, and West Virginia—as well as those states’ 

mining agency implementing regulations and policy guidance, to identify 

the states’ approaches to financial assurances for surface mining 

reclamation established in accordance with the federal standards. We also 

spoke with officials from OSM headquarters, the Appalachian Regional 

Office, and field offices, as well as officials from the state mining agencies 

in Kentucky, Virginia, and West Virginia. We spoke with officials from the 

OSM field office in Knoxville to discuss financial assurances in Tennessee 

because these officials manage the mining program in that state. We also 

reviewed section 404 of the Clean Water Act and the Corps’ implementing 

regulations and policy guidance to identify requirements and policy for 

financial assurances associated with compensatory mitigation projects. In 

addition, we contacted Corps officials in the headquarters and the five 

district offices to identify the extent to which the Corps has included 

financial assurance requirements in permits it has issued to surface mines 

for valley fills. We also interviewed officials from the EPA to identify their 

role and responsibility for overseeing section 404 permits. 

To examine the extent to which federal and state agencies monitor and 

evaluate surface coal mines with valley fills after reclamation and 

Page 39 GAO-10-206 Surface Coal Mining
Appendix I: Objectives, Scope, and 

Methodology 

mitigation are complete, we obtained information from and interviewed 

officials in OSM’s Appalachian Regional Office and field offices, as well as 

state officials at the mining agencies in Kentucky, Virginia, and West 

Virginia to identify any routine monitoring and “one-time” evaluations that 

these agencies have done of mine sites to assess the long-term 

environmental impact of the reclamation after the SMCRA reclamation 

bonds have been released. We also interviewed and obtained information 

from officials in the Corps’ five district offices to identify any routine 

monitoring the Corps has done of mitigation projects after determining 

that operators have completed their mitigation obligations or any specific 

studies of completed surface coal mine mitigation projects. 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. Among the 

11 federal and state agencies that we interviewed, none replied that they 

had done routine monitoring of this nature, and most replied that they had 

not done any “one-time” studies. The few agencies that replied they had 

done one-time studies referred us primarily to studies completed as part of 

the 2003 draft multiagency programmatic environmental impact statement 

(PEIS). OSM’s 2008 final environmental impact statement on proposed 

regulations for excess spoil management also generally cited the 2003 

draft PEIS as a source of information on the environmental impacts of 

valley fills. The federal and state agencies that collaborated on the draft 

PEIS conducted or funded more than 30 studies of the impacts of 

mountaintop mining and associated valley fills and used them as support 

for evaluating the impacts of various programmatic alternatives. With 

these facts in mind, we relied heavily on the conclusions that the authors 

of the draft PEIS drew concerning a number of environmental impacts, 

including reforestation, water quality and impacts on aquatic organisms, 

and water flow. We also cited more recent studies provided to us by 

agency officials, such as a 2008 study by EPA Region 3 on water quality 

and aquatic organisms near valley fills. Also, during the course of our 

review, we learned from OSM officials about OSM’s evaluation of mine 

operators’ compliance with approximate original contour policies in 

Kentucky, Virginia, and West Virginia. We reported the results of those 

evaluations because of their relevance to the construction of valley fills. 

To examine the federal laws agencies may use, and have used, to address 

any latent environmental problems associated with surface mines with 

valley fills that may occur after SMCRA or Clean Water Act financial 

assurances have expired, we analyzed SMCRA and the Clean Water Act 

Page 40 GAO-10-206 Surface Coal Mining
Appendix I: Objectives, Scope, and 

Methodology 

and identified provisions that provide mining agencies and water quality 

regulators authority to address environmental problems on a former mine 

site after SCMRA bonds have been released. We also interviewed officials 

from OSM, state mining agencies, and state water quality regulators in the 

four states we reviewed to learn the extent to which these authorities have 

been used in the past to address any environmental problems that may 

have occurred on or caused by a former mine site with valley fills. In 

addition, we analyzed two other federal environmental laws—the 

Comprehensive Environmental Response Compensation and Liability Act 

(CERCLA, also known as Superfund) and the Resource Conservation and 

Recovery Act (RCRA)—to identify provisions that may authorize or 

require EPA to address environmental problems that may occur on or be 

caused by a former surface mine after bonds have been released. We 

interviewed officials from EPA’s Office of Solid Waste and Emergency 

Response to learn if CERCLA had been used in the past in that context. We 

also we reviewed an EPA regulatory determination published in 2000 on 

whether regulation of coal combustion residue was warranted under the 

hazardous substance provisions of RCRA. 

We conducted this engagement from October 2008 to January 2010 in 

accordance with all sections of GAO’s Quality Assurance Framework that 

are relevant to our objectives. The framework requires that we plan and 

perform the engagement to obtain sufficient and appropriate evidence to 

meet our stated objectives and to discuss any limitations in our work. We 

believe that the information and data obtained, and the analysis 

conducted, provide a reasonable basis for any findings and conclusions in 

this report. 

Page 41 GAO-10-206 Surface Coal Mining
A

and Re

ppendix II: Selected Surface Mining Control 

clamation Act Reclamation Standards 

Page 42 GAO-10-206 

Appendix II: Selected Surface Mining Control 

and Reclamation Act Reclamation Standards 

The Surface Mining Control and Reclamation Act (SMCRA) requires that 

mined land be reclaimed consistent with environmental performance 

standards, including making the land available for post-mining uses. The 

SMCRA permit process requires operators to submit detailed plans 

describing the extent of the proposed mining operations and how 

reclamation will be achieved. In reclaiming the land, operators must 

comply with regulatory standards that govern, among other things, the 

final contour of the reclaimed area, the revegetation of reclaimed mine 

sites, and the quality of water leaving the mine site. This appendix 

describes these key reclamation standards. 

In general, mountaintop mine operators are required to return mine sites 

to their approximate original contour (AOC) unless the operator receives a 

variance from the regulatory authority. This means that the surface 

configuration achieved by backfilling and grading of the mined area must 

closely resemble the general surface configuration of the land prior to 

mining and blend into and complement the drainage pattern of the 

surrounding terrain, with all highwalls1

 and spoil piles eliminated. 

Standards for 

Approximate Original 

Contour 

The Office of Surface Mining (OSM) and the states may grant a variance 

from the requirement to return the site to AOC—meaning that the land 

would be left relatively flat—in certain circumstances, including those in 

which the operator can demonstrate that the site will be suitable for 

certain post-mining land uses.2

 According to OSM, these variances present 

an opportunity to create relatively flat, flood-free land capable of 

supporting economic development. In our recent report on trends in 

 

1

A highwall is a cliff of exposed rock left after a surface mining operation has cut into the 

landscape. 

2

SMCRA authorizes both “exceptions” and “variances,” to AOC requirements, but federal 

and state regulations use only the term “variance,” as we do for consistency. The AOC 

requirements may not apply to permits to remine a previously mined site. The reason is 

that a previously mined site may not have enough material to regrade the site to the AOC 

standard. 

 Surface Coal Mining 
Appendix II: Selected Surface Mining Control 

and Reclamation Act Reclamation Standards 

mountaintop mining, we reported that variances from the AOC 

requirement have been relatively rare in Kentucky and West Virginia.3

A purpose of SMCRA is to assure that adequate procedures are undertaken 

to reclaim surface areas as contemporaneously as possible with the 

surface coal mining operations. OSM and the states require that backfilling 

and grading begin within a certain number of days after coal removal in a 

particular area. 

OSM and state law and regulations for mine reclamation also address how 

sites are to be revegetated after they have been backfilled and graded. To 

obtain bond release under SMCRA, mine operators must show successful 

revegetation 5 full years after the last year of augmented seeding, 

fertilizing, irrigation, or other work.4

 What is planted depends on the 

approved post-mining land use, such as forestry or hayland and pasture. 

Standards for 

Revegetation 

State regulations set forth different requirements for factors including 

plant species, variety, density, and coverage for different post-mining land 

uses. The states have standards for the extent of vegetation that must be 

initially planted and how much must survive in order to receive bond 

release. For example, West Virginia’s regulations call for mines sites with a 

forest land post-mining land use to be planted with at least 500 woody 

plants per acre. This is to include at least 350 trees and 150 shrubs. The 

state specifies that a least 5 species of trees be used, including at least 3 

higher value hardwoods such as oak, ash, or maple. The state also 

 

3

See GAO, Surface Coal Mining: Characteristics of Mining in Mountainous Areas of 

Kentucky and West Virginia, GAO-10-21 (Washington, D.C.: Dec. 9, 2009). According to 

Kentucky’s and West Virginia’s data, most recently issued surface coal mining permits 

issued required the land to be reclaimed to AOC, although both states also granted some 

permits with AOC variances. Specifically, 76 percent (or 294 permits) of the 388 permits 

that Kentucky issued from January 2002 through July 2008 required the operator to reclaim 

the land to AOC. The remaining 24 percent (or 94 permits) contained 99 AOC variances. In 

West Virginia, 85 percent (or 181 permits) of the 212 permits issued between January 2000 

and July 2008 required the operator to reclaim the land to AOC. The remaining 15 percent 

(or 31 permits) contained 33 AOC variances. We did not collect data on AOC variances for 

Virginia for the purposes of that report or for this review. However, in commenting on a 

draft of this report, Virginia said that “variances from AOC have traditionally been, and 

currently are, rare.” 

4

The 5-year period of responsibility applies to regions of the country, such as Appalachia, 

that receive at least 26 inches of rain per year. In drier regions, the period of responsibility 

is 10 years. 

Page 43 GAO-10-206 Surface Coal Mining
Appendix II: Selected Surface Mining Control 

and Reclamation Act Reclamation Standards 

specifies a minimum success standard of at least 450 trees and shrubs per 

acre and a 70-percent ground cover. 

SMCRA requires that mine operators’ bonds be of an amount sufficient to 

ensure the completion of the site’s reclamation plan by the regulatory 

authority, which includes compliance with water quality standards. These 

standards include those established by EPA or the states under the Clean 

Water Act and referenced by SMCRA. Each reclamation plan is to include 

a detailed description of the measures to be taken during the mining and 

reclamation process to ensure the protection of the quality of surface and 

ground water systems, both on- and off-site, from adverse effects of the 

mining and reclamation process. OSM has stated that a reclamation bond 

may not be released where active or passive water treatment systems are 

being used to achieve compliance with applicable standards.5

Standards for Water 

Quality 

SMCRA regulations contain specific water protection requirements. The 

regulations include requirements that all surface mining and reclamation 

activities be conducted to minimize disturbance of the hydrologic balance 

within the permit and adjacent areas and to prevent material damage to 

the hydrologic balance outside the permit area. The hydrologic balance 

requirements include standards for water quality and effluent limitations, 

sediment control, siltation and discharge structures, and activities in or 

adjacent to perennial or intermittent streams. Permit applicants must 

submit a probable hydrologic consequences determination with their 

permit application as well as a hydrologic reclamation plan indicating how 

any probable hydrologic consequences will be prevented or remediated, 

including how the general hydrologic balance requirements will be met. In 

addition, the regulations that address backfilling and grading require 

operators to cover acid- or toxic-forming materials with a minimum of 4 

feet of nontoxic material, or treat the material to neutralize its toxicity in 

order to prevent water pollution. With regard to excess spoil used as fill 

material, the regulations require that leachate and surface runoff from the 

fill will not degrade surface or ground waters or exceed effluent 

limitations set for iron, manganese, total suspended solids, and pH. The 

regulations also require that slopes be protected to minimize surface 

erosion at the site and that the fill be designed using recognized 

 

5

Craig B. Giffin, West Virginia’s Seemingly Eternal Struggle for a Fiscally and 

Environmentally Adequate Coal Mining Reclamation Bonding Program, 107 W. Va. L. 

Rev. 105 (2004); See West Virginia Regulatory Program, 61 Fed. Reg. 6511-6517 (Feb. 21, 

1996). 

Page 44 GAO-10-206 Surface Coal Mining
Appendix II: Selected Surface Mining Control 

and Reclamation Act Reclamation Standards 

professional standards, certified by a registered professional engineer, and 

approved by the regulatory authority. 

Page 45 GAO-10-206 Surface Coal Mining
Appendix III: Comments from the Department Appendix III: Comments from the of the Interior 

Department of the Interior 

Page 46 GAO-10-206 Surface Coal Mining 
Appendix IV: Comments from the Department Appendix IV: Comments from the of Defense 

Department of Defense 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

See comment 1. 

See comment 2. 

Page 47 GAO-10-206 Surface Coal Mining
Appendix IV: Comments from the Department 

of Defense 

The following are GAO’s comments on the letter dated December 15, 2009, 

from the Assistant Secretary of the Army, Civil Works. 

1. While we appreciate the Army Corps of Engineers’ (Corps) sensitivity 

to the litigation associated with the Spruce mine, we do not feel that 

any change to our report is warranted. We do not specifically discuss 

the litigation, which was brought by environmental groups against the 

Corps, but rather an ancillary conflict between the Corps and the 

Environmental Protection Agency (EPA). Our brief discussion of the 

matter presents both sides of the conflict between EPA and the Corps 

using the agencies’ own words sourced wholly from publicly available 

documents and refrains from making any conclusions as to the merits 

of the case. 

GAO Comments 

2. We disagree with the Corps’ comment that a discussion of projects 

subject to the enhanced coordination procedure and the Spruce mine 

are irrelevant to the objectives of our study. Both of these points are 

relevant to our second objective, which asks us to describe the extent 

to which federal and state agencies monitor and evaluate the impacts 

of surface coal mining activities. Both the enhanced coordination 

procedure and the Spruce mine case provide examples of how federal 

regulators are using studies that we discuss in the report. Therefore, 

we did not revise the report in response to this comment. 

Page 48 GAO-10-206 Surface Coal Mining
Appendix V: Comments from the Appendix V: Comments from the Environmental Protection Agency 

Environmental Protection Agency 

Page 49 GAO-10-206 Surface Coal Mining
Appendix VI: Comments from the Kentucky Appendix VI: Comments from the Kentucky Department for Natural Resources 

Department for Natural Resources 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

See comment 1. 

See comment 2. 

Page 50 GAO-10-206 Surface Coal Mining
Appendix VI: Comments from the Kentucky 

Department for Natural Resources 

See comment3. 

See comment 4. 

See comment 5. 

See comment 6. 

See comment 7. 

See comment 8. 

Page 51 GAO-10-206 Surface Coal Mining
Appendix VI: Comments from the Kentucky 

Department for Natural Resources 

See comment 9. 

See comment 10. 

See comment 11. 

See comment 12. 

See comment 13. 

See comment 14. 

Page 52 GAO-10-206 Surface Coal Mining
Appendix VI: Comments from the Kentucky 

Department for Natural Resources 

Page 53 GAO-10-206 

The following are GAO’s comments on the letter dated December 17, 2009, 

from the Commissioner, Department for Natural Resources. 

1. We do not agree that the report misrepresents or sensationalizes the 

issues; however, we do agree that it is important to be accurate and 

use correct terminology. Throughout the report we have strived to be 

accurate and have been careful to consistently and accurately use 

terms and phrases that are commonly used in regulation or the coal 

mining literature. In its comment, the state did not provide specific 

examples of what it believes are inaccurate facts or inappropriate 

terms. However, subsequent comments from the state referred to our 

use of the terms mountaintop mining, mountaintop removal mining, 

valley fills, and hollow fills. We have reviewed our use of these terms 

throughout the report to ensure that they are used consistently and 

appropriately. 

GAO Comments 

2. The state is referring to our practice of holding “exit conferences” near 

the end of our review. Our policy is to provide the agencies with 

relevant program responsibilities—typically federal agencies but in 

this case a state agency—with excerpted material from the draft 

report. We call this document a “statement of facts.” The purpose of 

the exit conference is to obtain the agency’s input regarding the 

accuracy of the facts presented. The purpose is not to obtain 

comments on the entire draft report; that step comes later in the 

process. Therefore, the statement of facts that we sent to Kentucky 

contained information describing laws, policies, and conditions that 

pertained directly to the state. We understand that agencies are likely 

to have additional comments on the full draft report—as Kentucky did 

in this instance—but also believe that our process of holding exit 

conferences to discuss the statement of facts followed by a request for 

formal comments on the full report is a transparent one. 

3. We understand that Kentucky’s regulations define both hollow fills and 

valley fills, but not all states make this distinction in practice. Federal 

and state regulations identify different types of fills, including valley 

fills, head-of-hollow fills, and durable rock fills. These definitions differ 

in their characteristics, including placement, slope, and material 

composition. For ease of reading, we refer to all types of fills as valley 

fills in this report. The term valley fill is not meant to indicate the size 

of a particular fill or the type of stream affected—ephemeral, 

intermittent, or perennial. 

 Surface Coal Mining 
Appendix VI: Comments from the Kentucky 

Department for Natural Resources 

4. We agree with the state’s specific comment and have clarified the 

report accordingly. In our discussion of post-mining land use 

requirements, we are referring specifically to mountaintop removal, 

one type of mountaintop mining. For further clarity, we have added a 

footnote that compares the requirements for mountaintop removal to 

those for steep slope mining, another kind of mountaintop mining. 

Throughout the rest of the report, however, we continue to use the 

term mountaintop mining to refer generally to all types of coal mining 

in mountainous areas. This usage is consistent with our previous 

report mentioned by the state (GAO-10-21) that was also recently 

reviewed by state officials. This usage is also consistent with the 

Environmental Protection Agency’s (EPA) 2003 draft Programmatic 

Environmental Impact Statement on Mountaintop Mining/Valley Fills 

in Appalachia. 

5. We agree that not all fills approved are ultimately constructed, and 

make that point in the report. However, we do not believe that our 

report overstates the miles of buried streams and did not modify the 

report in response to this comment. The sources for the data that we 

include in the report are the 2003 draft Programmatic Environmental 

Impact Statement on mountaintop mining and valley fills and the 

Office of Surface Mining’s 2008 final environmental impact statement 

on excess spoil and the stream buffer zone. For example, the 2003 

draft statement reported that 724 miles of streams were “directly 

impacted by valley fills (i.e., covered by fill).” 

6. We disagree with the comment. While we understand that some state 

regulations require termination of jurisdiction at bond release, the 

federal regulations only state that the relevant regulatory authority 

may terminate its jurisdiction under the Surface Mining Control and 

Reclamation Act (SMCRA) at bond release. Therefore, we have not 

revised the report in response to the comment. 

7. We disagree with the comment. SMCRA does not specifically prohibit 

applicants from obtaining future SMCRA permits if they have previous 

bond forfeitures. SMCRA generally prohibits applicants from obtaining 

future permits if they have unabated violations. However, in response 

to the comment, we have added detail on the state regulations, which 

do specifically note that bond forfeiture based on violations that are 

not subsequently corrected disqualify operators from obtaining future 

permits. 

Page 54 GAO-10-206 Surface Coal Mining
Appendix VI: Comments from the Kentucky 

Department for Natural Resources 

8. We did not modify the report in response to this comment because the 

background section of the report does include data on the differences 

in recent surface coal mine production in the four states. Specifically, 

the report notes that Kentucky produced about 51 million tons while 

Tennessee produced less than 2 million tons in 2008. 

9. This paragraph summarizes the section that follows, and we do not 

agree that an editorial change is needed. We believe that our 

description of the Army Corps of Engineers’ practices is accurate on 

the basis of information obtained from that agency. 

10. The citations on which the findings are based are provided later in the 

body of the report. We did not add citations to this summary 

paragraph. However, we have deleted the word “tentative” from our 

discussion of impacts on water flows. We believe that the documents 

we cite, along with comments we received from the Department of the 

Interior, support our characterization in the final draft of the report. 

11. We do not agree that the EPA statements are largely editorial and 

made no change to them. We believe that the EPA and U.S. Geological 

Survey statements on inadequate monitoring are as germane to the 

purpose of the report as the statements from state agency officials, 

who believe monitoring is adequate. 

12. We have clarified the footnote to indicate that the mix of amphibian 

and reptile populations was affected by the presence of mining. 

13. We have not modified our characterization of the West Virginia Flood 

Advisory Technical Task Force report because we believe it is an 

accurate summary of the task force report. However, we have 

modified the report to include Kentucky’s comment on its regulations 

related to flood analysis and avoidance. 

14. We have added this information to footnote 57. 

Page 55 GAO-10-206 Surface Coal Mining
Appendix VII: Comments from the Virginia Appendix VII: Comments from the Virginia Department of Mines, Minerals and Energy 

Department of Mines, Minerals and Energy 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

See comment 1. 

See comment 2. 

See comment 3. 

Page 56 GAO-10-206 Surface Coal Mining 
Appendix VII: Comments from the Virginia 

Department of Mines, Minerals and Energy 

See comment 4. 

See comment 5. 

Page 57 GAO-10-206 Surface Coal Mining
Appendix VII: Comments from the Virginia 

Department of Mines, Minerals and Energy 

Page 58 GAO-10-206 

The following are GAO’s comments on the letter dated December 22, 2009, 

from the Director, Department of Mines, Minerals and Energy. 

1. We do not assume that post-bond release pollution discharges occur 

below valley fills. In addition to the Pond-Passmore study, our draft 

report cited the 2003 draft Programmatic Environmental Impact 

Statement, which concluded that streams below mountaintop mines 

with valley fills were characterized by contamination. We agree that 

the contamination may not necessarily have been post-bond release, 

and we agree that contamination problems are likely to be site 

specific, when they occur. We did not revise the report in response to 

this comment. 

GAO Comments 

2. The focus of this report was surface coal mining and not all activities 

that may affect water quality. Therefore, while we agree that other land 

disturbing activities may affect water quality in watersheds with 

mining, we have not included a discussion of those activities. 

3. Points relating to hydrologic balance, such as effluent limitations, are 

discussed throughout the report in general terms and more specifically 

in Appendix II. We have added more detail on hydrologic balance 

requirements to Appendix II in response to this comment. This 

material is included in the appendix because, while we understand that 

adherence to regulations designed to protect the hydrologic balance of 

the mine site during the mining operation may help to minimize water 

quality issues after bond release, we were asked to discuss 

mechanisms available to address environmental problems after bond 

release, when the Surface Mining Control and Reclamation Act’s 

hydrologic balance requirements would no longer apply. 

4. We have not modified the report in response to the state’s comment 

because we did not analyze the use of passive wetlands, or other 

methods, for treating water after bond release. 

5. The state is correct that the 2003 draft programmatic environmental 

impact statement was finalized in October 2005, and we have revised 

footnote 2 to make that clear. The final version of the statement 

incorporated the 2003 draft statement by reference. However, the 2005 

final statement did not contain all of the material found in the draft 

statement. For example, studies of the impacts of mountaintop mining 

were in the appendixes of the 2003 draft, but not the 2005 final 

statement. Therefore, we believe that it is preferable to refer the 

 Surface Coal Mining 
Appendix VII: Comments from the Virginia 

Department of Mines, Minerals and Energy 

readers of our report to the 2003 draft statement instead of the 2005 

final statement. 

Page 59 GAO-10-206 Surface Coal Mining
Appendix VIII: Comments from the West 

Virginia Department of Environmental Appendix VIII: Comments from the West Protection 

Virginia Department of Environmental 

Protection 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

See comment 1. 

See comment 2. 

See comment 3. 

Page 60 GAO-10-206 Surface Coal Mining 
Appendix VIII: Comments from the West 

Virginia Department of Environmental 

Protection 

Page 61 GAO-10-206 Surface Coal Mining
Appendix VIII: Comments from the West 

Virginia Department of Environmental 

Protection 

Page 62 GAO-10-206 

The following are GAO’s comments on the letter dated December 22, 2009, 

from the Deputy Director, Division of Mining and Reclamation. 

1. We agree that mining nationwide has similar potential to impact the 

environment. We also agree that the Surface Mining Control and 

Reclamation Act requires financial assurances in all states. However, 

we were asked to examine financial assurances and activities related 

to monitoring at coal mines with valley fills. The four states we 

reviewed have the vast majority of coal mines with valley fills. 

Therefore, we did not revise the report in response to this comment. 

GAO Comments 

2. Our report notes that the state has made changes to its policies and 

practices related to reforestation, approximate original contour, and 

surface water runoff. We did not revise the report in response to this 

comment. 

3. It is correct that we are not making any recommendations regarding 

the length of the monitoring period before bond release. Our report 

notes that most, but not all, agencies we contacted, believe that 

monitoring is adequate. At the same time, there is evidence from some 

monitoring that environmental problems may occur after bonds have 

been released. We did not revise the report in response to this 

comment. 

 Surface Coal Mining 
Appendix IX: GAO Contact and Staff Appendix IX: GAO Contact and Staff Acknowledgments 

Acknowledgments 

Anu K. Mittal, (202) 512-3841 or mittala@gao.gov

In addition to the contact named above, Robin Nazzaro (Director), Andrea 

Wamstad Brown (Assistant Director), Sherry McDonald (Assistant 

Director); Ross Campbell, Antoinette Capaccio, Brian Friedman, Brandon 

Haller, Carol Hernstadt Shulman, and Desiree Thorp made key 

contributions to this report. Josey Ballenger, Charlie Egan, Carol Kolarik, 

and Rebecca Shea also contributed to this report. 

Page 63 GAO-10-206 Surface Coal Mining

GAO Contact 

Staff 

Acknowledgments 

(361023) 
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