William C. Herz

Vice President,

Scientific Programs

Capitol View 202.962.0490 425 Third Street, S.W., Suite 950 202.962.0577 fax Washington, DC 20024 www.tfi.org April 13, 2011

Via Electronic Delivery

Ben Lesser, Senior Advisor U.S. Environmental Protection Agency Office of Resource Conservation and Recovery Attention: Docket ID Nos. EPA-HQ-SFUND-2009-0265 and EPA-HQ-SFUND-2009-0834

Mailcode 5305T 1200 Pennsylvania Avenue, N.W. Washington, DC 20460 Lesser.Ben@epa.gov

RE: The Fertilizer Institute’s Comments on EPA’s Proposed Priority Identification of Hardrock Mini ng Facilities fo r Development of CERCLA 108(b) Financial Responsi bility Requirements (Docket Nos. EPA-HQ-SFUND-2009-0265 and EPA-HQ-SFUND-2009-0834)

Dear Mr. Lesser:

The Fertilizer Institute (TFI), on behalf of its member companies, submits these comments in response to the U.S. Environmental Protection Ag ency’s (EPA) notice under Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), entitled “Identification of Priority Classes of Facilities for Developm ent of CERCLA Section 108(b) Financial Responsibility Requireme nts” (the Notice), 74 Fed. Reg. 37,213 (July 28, 2009), identifying classes of fac ilities within the hardrock mi ning industry for which EPA will develop financial responsibil ity requirements under CERCLA.

STATEMENT OF INTEREST

TFI represents the nation’s fertilizer industr y including producers, importers, retailers, wholesalers and companies that pr ovide services to the fertilizer industry. Its membership is served by a full-time Washington, D.C. staff in va rious legislative, educational and technical

areas as well as with informa tion and public relations programs.Ben Lesser, Senior Advisor April 13, 2011 Page 2

TFI members operate, or rely on, mining opera tions producing raw materials for fertilizer production, including the mining of phosphate rock, which is expre ssly identified in the Notice as “hardrock mining” potentially subject to EPA’s forthcoming fina ncial responsibility requirements pursuant to CERCLA § 108. TFI me mbers also operate, or depend on, facilities which extract, beneficiate, or process phosphate rock, and thus potentially fall within the scope

of the Notice.

Consistent with EPA’s stated need for additi onal research and outreach with stakeholders, 1 TFI provides the following comments on the Notice for EPA’s consideration when developing financial responsibility requirements under CERCLA for the hardrock mining industry.

COMMENTS

I. EPA Inappropriately Identifies Ph osphate Rock Mining, Extraction, Beneficiation and Processing as “Hardrock Mining” under the Notice

In the Notice, EPA defines “hardrock mining” as the “extraction, beneficiation or processing of metals,” such as copper, gold, iron, etc ., “and non-metallic, non-fuel minerals ( e.g ., asbestos, gypsum, phosphate rock, and sulfur).” 74 Fe d. Reg. at 37,214. The inclusion of phosphate mining as “hardrock mining,” and its treatment as being similar to metal mining, is not supported by the current regulatory treatment and industr y understanding that phosphate mining is excluded from the definition of hardrock mining, and is not supported by the eviden ce cited by EPA in the

Notice.

In identifying “hardrock mining” facilities as a priority for financial responsibility regulation under CERCLA, EPA stated that it evaluated th e following factors: (1) annual amounts of

hazardous substances released to the environm ent, based on “Toxic Release Inventory” (TRI) data; (2) number of facilities in active operation and production; (3) the physical size of the operation; (4) the extent of environmental c ontamination; (5) the number of sites on the CERCLA “National Priorities List” (NPL); (6) government expenditures; (7) projected clean-up expenditures; and (8) corporate structure and bankruptcy pote ntial. 74 Fed. Reg. at 37,214. However, EPA provides no information in the Noti ce as to how these factors were evaluated for individual types of facilities included within its br oad definition of “hardrock mining” facilities. Notably, “hardrock mining” traditionally has mean ing as a category based on how ore is situated in its natural setting and doe s not include phosphate rock.

In the industry and in other regulatory regime s, phosphate rock mining is excluded from the definition of “hardrock mining” facilities. See, e.g. , Hardrock Mining and Reclamation Act of 2009, H.R. 699, S. 796; Bureau of Land Manageme nt Mineral Leasing Regulations under 40 C.F.R. § 3501.5; and 40 C.F.R. Part 60, SubpartLL, Standards of Performance for Metallic Mineral Processing Plants (defining a “metallic mineral concentrate” as a concentrate that “contains at least one of the following metals in any of its oxidation states and at a concentration

1 74 Fed. Reg. at 37,214 n.5.Ben Lesser, Senior Advisor April 13, 2011 Page 3

that contributes to the concen trate’s commercial value: Al uminum, copper, gold, iron, lead, molybdenum, silver, titanium, tungs ten, uranium, zinc, and zirconiu m.”). Despite this fact, EPA appears to equate “hardrock mining” with “metal mining,” without any justification. See 74 Fed. Reg. at 37,215. For example, in its discussion of the first factor set forth above (annual TRI data), EPA discusses 2007 TRI data and c oncludes “that the metal mining industry ( e.g., gold ore mining, lead ore and zinc ore mining, and copper or e and nickel ore mining) releases enormous quantities of toxic chemicals, at nearly 1.15 b illion pounds or approximate ly 28 percent of the total releases by the U.S. industry that is required to report under the TRI program.” Id. It appears EPA’s data regarding metal mining is based on metal mining in North American Industrial Classification Sy stem (NAICS) Code 2122. Id . at 37,215 n.9. This industry code does not represent phosphate rock mining, however, which is NAICS Code 2123. 2 Further, phosphate mining is not even subject to TRI reporting and EPA has denied a petition to include phosphate mining in the TRI Program. 61 Fed. Reg. 33,588, 33,591-592 (June 27, 1996) (“[t]wo industries, non-metal mining classified in SIC code 14 and w holesale durable goods classified in SIC code 50, were excluded from further cons ideration for this action based on a belief that the majority of activities conducted by facilities ope rating in these groups are believ ed to involve materials that are not EPCRA section 313 listed chemicals.”).

Similarly, EPA relies on the same TRI data to determine that mining operations generate significant quantities of waste that may contain and account for releases of hazardous substances; of course, these data contain no information on phosphate mining. Id . at 37,316. The error of these assumptions is compounded for phosphate mi ning when EPA discusses the severity of consequences of releases from hardrock mining, particularly in light of EPA’s claim that the hardrock mining industry has experienced a patter n of failed operations, which often results in industry being unable to respond to releases. Id . at 37,218 (citing failures related to traditional hardrock mining, not phosphate mining). EPA is improperly associating perceived problems in the hardrock mining i ndustry with the phospha te mining industry.

Ultimately, EPA fails to justify the inclusion of phosphate rock mines within the definition of “hardrock mining,” based on industr y standards, other regulatory re gimes, its past conduct, and on the eight factors it has listed. 3 In short, EPA cannot arbitrarily group phosphate mining with traditional hardrock mining, based solely on informati on about the latter. This is particularly true when phosphate mining and processing facilities ar e very different in many ways from metal mining facilities. EPA should exclude phosphate rock mining from its proposed CERCLA financial responsibility require ments for “hardrock mining.”

2 Further, metal mining is under Standard Industrial Classification (SIC) Code 10, whereas phosphate mining

is under SIC Code 14.

3 In the Notice, EPA appears to acknowledge that its definition of “hardrock mining” is out of step with industry norms and other regulatory regimes governing hardrock mining, as it states that the definition is to be used for the “purposes of this [N]otice only.” Id . at 37,214.Ben Lesser, Senior Advisor April 13, 2011 Page 4

II. CERCLA’s Financial Resp onsibility Requirements Do Not Apply to Phosphate Mining Facilities

CERCLA’s financial responsibility requirements do not apply to facilities that are already subject to the financial responsibility re quirements under Subtitle C of the Resource Conservation and Recovery Act (RCRA), which governs the management of hazardous waste, and other federal laws. Speci fically, CERCLA Section 108(b) requires EPA to “promulgate requirements (for facilities in addition to thos e under subtitle C of [RCRA] and other Federal law) that classes of fac ilities establish and maintain evidence of financial re sponsibility . . . .” 42 U.S.C. § 9608(b)(1). The vast majority of hard rock mining facilities, in general, and phosphate mining facilities, in particular, are already subj ect to financial responsibility requirements under other federal laws, such as those related to reclamation under the Federal Land Policy and Management Act, as well as comprehensive fi nancial assurance requir ements under state law. 4
Thus, under the plain language of Section 108, EP A is not required to promulgate financial responsibility requirements for phosphate mining under CERCLA.

TFI members operating phosphate rock mining and mi neral processing facilities are subject to a myriad of financial assurance ob ligations. For example, one TFI member company operates four phosphate rock mining and processing facilities in a single state. These four facilities have existing financial assurance obligations under multiple state and federal programs (including RCRA) directed at remediation and reclama tion in amounts totaling $53.2 million, $53.5 million, $84.1 million, and $100.9 million, respectively. A nother TFI member company with six facilities in a single state has existing financial assurance obligations under currently applicable state and federal regulations for reclama tion and remediation totaling $25.7 million, $81.8 million, $110.9 million, $185.6 million, $215.7 million, and $395.4 million, respectively. In another state, where contamination from phospha te mining has occurred, TFI member companies have signed orders with stat e and federal agencies under CERCLA to address environmental concerns, including providi ng financial assurance.

The plain language of Section 108 (b) evidences Congressi onal intent only to require financial responsibility requirements under CERCLA for facili ties that are not alre ady required to do so; Congress clearly intended for CERCLA not to impose an unne cessarily duplicative burden on facilities that are already required to ensure adequate funds to fu lly reclaim their facilities and respond to environmental contamination.

III. Even Assuming Regulation Was Appropriate, EPA Must Properly Evaluate Risk from Each Industry

Under CERCLA § 108(b), EPA must quantify the ri sk associated with the regulated class of facilities and adopt financ ial responsibility requirements “cons istent with the degree and duration of risk.” 42 U.S.C. § 9608(b)(1). Section 108 does not set forth a specific methodology to be used in identifying and prioritizing classes of f acilities for application of financial responsibility

4 See, e.g. , Fla. Stat. Ann. § 378.208.1 (requiring mine operator to provide appropriate financial assurance).Ben Lesser, Senior Advisor April 13, 2011 Page 5

regulations. EPA explicitly de clined to solicit comments on its methodology for identifying first priority facilities. Because this methodology is the first step in determining whether a proposed rulemaking is necessary for any class of facilities, including ph osphate mining, it should be the subject of public notice and co mment prior to its use. Specifically, the two overriding requirements of the statutory prov ision at issue are that such regulations address current and future (1) environmental risks ( i.e. , risks of release of hazardous substances), and (2) financial risks (impacts to sustainability and viab ility of the CERCLA Superfund). 42 U.S.C. § 9608(b)(1)-(2). Yet, there is little to no actual evaluation of actual risk in EPA’s methodology (which appears to simply be EPA’s list of eight factors). Instead, EPA’s methodology uses surrogates for risk, such as TRI da ta regarding volume, and dramatic leaps in logic, such as its statement that toxicity (a factor EPA says is relevant in determining risk) apparently can be

assumed at some unknown level due to the mere designation of a subs tance as hazardous. Id

. Further, EPA stated that expos ure is relevant to determini ng risk, yet its methodology does not appear to account for this either. A method based on generalizations regarding volumes and unsupported assumptions regarding toxicity is in consistent with the statute’s focus on risk.

A. EPA’s Data Do Not Demonstrate Actual Risk from Hardrock or Phosphate Mining

As previously discussed, EPA cites TRI data to support its prioritization of hardrock mining for financial assurance regulation in the Notice. 74 Fed. Reg. at 37,215. TRI da ta, however, is not a meaningful source of information for purposes of prioritizing CERC LA § 108(b) regulation,

which is directed at facilities with the “highest level of risk of injury.” The TRI reporting program is a volume-based reporting requirement having no relation to injury risks. Indeed, EPA itself has emphasized the limitations of relyi ng on TRI data for risk assessment, noting that

such information is “not sufficient to determ ine exposure or calculat e potential risks.” See EPA 2008 TRI National Analysis. 5 EPA fails to account for the inad equacy of TRI data in the Notice or to explain why those concerns raised in the Agency’s other publications relative to the use of TRI data in risk assessments do not apply for the purposes of the Notice. The Notice must, by statute, prioritize based on risk levels, yet EPA’ s own guidance states that TRI data provide an incomplete picture, at be st, of potential risks.

Furthermore, EPA fails to place TRI data in c ontext by ignoring the fact that TRI data from traditional hardrock mining facilities includes (and in fact mostly relates to) naturally occurring compounds present in the rock excavated and move d by the facility. These naturally occurring compounds may appear in the TRI database as la rge releases; but instead often represent the mere movement of overburden or permanent clos ure of an impoundment system. These closures actually further reduce the risk that the public will be exposed to any TRI listed chemicals.

EPA’s reliance on TRI data and its failure to cont extualize and qualify that reliance results in the Notice giving a distorted view of the risks associated with mining operations. 6

5 http://www.epa.gov/tri/tridata/tr i08/national_analysis/index.htm

6 It also ignores EPA’s own statement that facilities with the largest disposal or other releases “do notBen Lesser, Senior Advisor April 13, 2011 Page 6

Likewise, EPA also fails to properly evaluate information from the NPL, upon which the Agency relies in support of its prioritization of hardrock mining facilities’ “level of risk of injury.” 74 Fed. Reg. at 37,217. EPA catalogs hi storic NPL hardrock mining sites in the Notice without making any connection between those legacy sites (many of which did not operate under current environmental regulatory strictures) and the potential for currently operating mining facilities to present a high risk of injury from future releases . In contrast, in its draft financial responsibility preliminary reports, EPA acknowledged this probl em and altered its analysis of the NPL information accordingly. EPA, Draft CERCLA 108(b) Financial Responsibility, Phase I: Preliminary Analysis (Feb. 2009). In particular, EPA looked at the NPL sites and then performed three screening steps to “eliminate sites that would not likely be among EPA’s highest priority.” Id . at 1. The first step was to eliminat e 143 facilities initially identified as RCRA treatment, storage, and disposal sites because they were already s ubject to financial assurance requirements. Id . at ES-2. EPA then eliminated 177 fede ral facilities site because they are excluded from programs requi ring financial assurance and are self-insured. Id . (“EPA believes that the existing RCRA regulatory framework is the appropriate mechanism for addressing financial assurance responsibilities at these faci lities.”). Finally, EPA chose to consider only

those sites listed after 1990 in a limited at tempt to avoid “legacy” contamination when identifying sites that still pos e threats under modern waste regulations. Indeed, 1990 was chosen

because at that time much of RCRA’s waste ma nagement standards were in place, many state programs were well-developed, and liability und er CERCLA was understood. EPA did not take any of these steps or considerations in the No tice when (a) determining whether to prioritize hardrock mining for regulation under Section 108, and (b) figuring out what type of mining was appropriate for such regulation.

B. EPA Should Consider the Impact of Current Regulatory Regimes on Risk

To the extent that EPA does evaluate risk in the Notice, it does so in a manner inconsistent with its own guidance. In the Agency’s “Risk Char acterization Policy” and “Risk Characterization Handbook,” EPA emphasizes the importance of asse ssing risk realistically. EPA fails to realistically evaluate risk in the Notice, how ever, by failing to disti nguish between historic

environmental contamination and current conditi ons and the impact of current environmental protection regulations and mined land reclamation requirements.

As suggested above, mining facilities, includ ing phosphate mining operations, are subject to myriad federal, state, and local regulations requiring state-of-the-art control technologies, monitoring, best management practices, and in stitutional controls to prevent and address releases. Applicable federal la ws include, but are not limited to, RCRA, the Clean Air Act, the Clean Water Act, Toxic Substances Control Act, the Mining Laws, Emergency Planning and Community Right-to-Know Act, and the Federal Land Policy and Management Act. Further, state laws impose additional, and often more stringent, requirements . The extensive and

necessarily pose the greatest potential risk to the environment.” EPA, Toxic Release Inventor y 2006 Public Data Release, Key Findings http://www.epa.gov/tri/tridata/tr i06/pdr/key_findings_v12a.pdf.Ben Lesser, Senior Advisor April 13, 2011 Page 7

comprehensive regulations governing mining ope rations minimizes greatly the risk of environmental and public harm, and should be considered. 7

Even sources relied on by EPA support this point . Specifically, EPA relie s on several sources in the Notice for prioritizing hardrock mining f acilities for regulation under CERCLA § 108(b).

One such source is the National Research Counc il (NRC) report on hardrock mining. 74 Fed. Reg. at 37,215; see also Pub. L. No. 105-277, § 120, 112 St at. 2681-257 (Oct. 21, 1998) (the NRC Report). While EPA cites language in the NRC Report which identifies the potential for

environmental contamination from hardrock mining facilities, EPA ignores the NRC’s conclusion that regulations to address such contamination are “generally in place and updated...Therefore, the committee emphasizes that these potential impacts will not necessarily occur...[and] the overall structure of federal and state laws and regulations that provide miningrelated environmental protection is complicated but gene rally effective.” NRC Report at 3 & 27. The NRC Report makes explicit that broad new regulatory controls and additional, redundant financial assurance requirements are not necessar y, given the already complicated and effective regulatory regime currently in place.

CONCLUSION

TFI appreciates your considerati on of these comments on the Noti ce, and respectfully requests that they be given thought as EPA develops financial re sponsibility requirements under CERCLA. To that end, TFI requests that EPA proceed with stakeholder outreach regarding (a) the scope and definition of “hardrock mining,” (b) existing financial assurance requirements, and (c) risk assessment methodologies, or, at the very least, solicit public comment on the Notice and incorporate these comments into any proposed rule relating to regula tion of hardrock mining facilities under CERCLA § 108.

Please contact me by telephone at (202) 515-2706 or via e-mail at wcherz@tfi.org if you would

like to further discuss our comments.

7 Even if EPA determined that financial responsi bility requirements under CERCLA were appropriate for phosphate mining (which they are not), given the exis ting regulatory requirements associated with release prevention, remediation, and financial assurance, and the unique regulations and conditions associated with phosphate rock facilities, EPA should adopt requirements that are either coextensive with the industries’ existing state and federal regulations, or that are triggered only when the existing requirements fail to provide adequate guarantees of financial coverage of closure and clean-up costs. Further, consistent with Section 108(b)(2), any such requirements should afford the maxi mum degree of flexibility in terms of financial assurance mechanism ( i.e.

, insurance, corporate guarantee, surety bond, letter of credit, or qualification as a self-insurer).Ben Lesser, Senior Advisor April 13, 2011 Page 8

Sincerely yours,

William C. Herz Vice President, Scientific Programs