United States Office of Water EPA 821-B-00-002

Environmental Protection (4303) March 2000

Agency

Economic and

Environmental Impact

Assessment of Proposed

Effluent Limitations 

Guidelines and 

Standards for the

Coal Mining Industry:

Remining and Western

Alkaline Subcategories

Economic and Environmental Impact Assessment 

of Proposed Effluent Limitations Guidelines and Standards 

for the Coal Mining Industry:

Remining and Western Alkaline Subcategories

Kristen L. Strellec

Engineering and Analysis Division

Office of Science and Technology

U.S. Environmental Protection Agency

Washington, DC 20460

March 2000

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Table of Contents

Executive Summary ............................................................ ES-1

Introduction ............................................................. ES-1

Coal Remining Subcategory .......................................... ES-1

Western Alkaline Coal Mining Subcategory .............................. ES-2

Industry Compliance Costs ................................................. ES-2

Coal Remining Subcategory .......................................... ES-3

Western Alkaline Coal Mining Subcategory .............................. ES-4

Industry Impacts ......................................................... ES-6

Economic Achievability ............................................. ES-6

Impacts on Small Firms ............................................. ES-8

Impacts on New Sources ............................................. ES-8

Additional Economic Impacts ............................................... ES-9

Costs to NPDES Permitting Authorities ................................. ES-9

Community Impacts ................................................ ES-9

Foreign Trade Impacts ............................................. ES-10

Environmental Impacts and Benefits ......................................... ES-10

Coal Remining Subcategory ......................................... ES-10

Western Alkaline Coal Mining Subcategory ............................. ES-12

Social Costs and Benefits ................................................. ES-14

Chapter 1: Introduction .......................................................... 1-1

1.0 Overview and Definitions ............................................. 1-1

1.1 Coal Remining Subcategory ........................................... 1-2

1.1.1 Background ................................................. 1-2

1.1.2 Summary of the Proposed Subcategory ............................. 1-4

1.2 Western Alkaline Coal Mining Subcategory ............................... 1-5

1.2.1 Background ................................................. 1-5

1.2.2 Summary of the Proposed Subcategory ............................. 1-6

1.3 Structure of the Report ............................................... 1-7
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Chapter 2: Data Sources ......................................................... 2-1

2.0 Introduction ....................................................... 2-1

2.1 General Industry Sources ............................................. 2-1

2.1.1 DOE/EIA Coal Data (Form 7A) .................................. 2-1

2.1.2 Keystone Coal Industry Manual .................................. 2-2

2.1.3 Census Data ................................................. 2-2

2.1.4 Financial Data ............................................... 2-2

2.2 Sources for Coal Remining Subcategory .................................. 2-3

2.2.1 AMLIS Database ............................................ 2-3

2.2.2 NALIS Database ............................................. 2-3

2.2.3 EPA Coal Remining Database ................................... 2-4

2.2.4 Interstate Mining Compact Commission Solicitation ................... 2-5

2.2.5 Total Maximum Daily Load Tracking System ........................ 2-6

2.2.6 EPA Region III GIS Database ................................... 2-6

2.2.7 Pennsylvania’s 112 Remining Site Study ........................... 2-7

2.3 Sources for Western Alkaline Coal Mining Subcategory ...................... 2-7

2.3.1 Profile of Affected Coal Mining Operations ......................... 2-7

2.3.2 Model Mine Analysis .......................................... 2-8

2.3.3 Information on Environmental Impacts ............................. 2-8

Chapter 3: Industry Profile and Economic Baseline .................................... 3-1

3.0 Introduction ....................................................... 3-1

3.1 Overview of the Coal Industry .......................................... 3-1

3.1.1 Coal Remining ............................................... 3-3

3.1.2 Western Alkaline Coal Mining ................................... 3-3

3.2 Current Regulatory Requirements ....................................... 3-4

3.2.1 Current Effluent Guidelines ..................................... 3-4

3.2.2 SMCRA .................................................... 3-5

3.2.3 The Rahall Amendment ........................................ 3-7

3.2.4 State Remining Permit Programs ................................. 3-7

3.3 Characterizing the Economic Baseline .................................... 3-8

3.3.1 Coal Remining ............................................... 3-8

3.3.2 Western Alkaline Coal Mining .................................. 3-11
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Chapter 4: Industry Compliance Costs .............................................. 4-1

4.0 Introduction ....................................................... 4-1

4.1 Coal Remining ..................................................... 4-2

4.1.1 Methodology ................................................ 4-2

4.1.2 Monitoring Costs ............................................. 4-2

4.1.3 Pollution Abatement Plan Costs .................................. 4-6

4.1.4 Total Annual Compliance Costs for the Coal Remining Subcategory ....... 4-7

4.2 Western Alkaline Coal Mining ......................................... 4-7

4.2.1 Methodology ................................................ 4-7

4.2.2 Watershed Modeling Costs ...................................... 4-8

4.2.3 Reduced Sediment Control Costs ................................. 4-8

4.2.4 Savings Associated with Earlier Bond Release ...................... 4-11

4.2.5 Total Compliance Costs for the Western Alkaline Coal Mining Subcategory 4-18

4.3 Summary of Compliance Costs ........................................ 4-18

Chapter 5: Industry Impacts ...................................................... 5-1

5.0 Introduction ....................................................... 5-1

5.1 Impacts of the Coal Remining Subcategory ................................ 5-1

5.1.1 Methodology ................................................ 5-1

5.1.2 Results ..................................................... 5-2

5.1.3 Impacts on Small Firms ........................................ 5-5

5.2 Impacts of the Western Alkaline Coal Mining Subcategory .................... 5-6

5.2.1 Methodology ................................................ 5-6

5.2.2 Results ..................................................... 5-6

5.2.3 Impacts on Small Firms ........................................ 5-8

5.2.4 Impacts on New Sources ....................................... 5-8

Chapter 6: Additional Economic Impacts ............................................ 6-1

6.0 Introduction ....................................................... 6-1

6.1 Costs to the NPDES Permitting Authority ................................. 6-1

6.2 Community Impacts ................................................. 6-2

6.3 Foreign Trade Impacts ............................................... 6-3
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Chapter 7: Cost-Effectiveness ..................................................... 7-1

Chapter 8: Environmental Impacts and Benefits ....................................... 8-1

8.0 Introduction ....................................................... 8-1

8.1 Coal Remining Subcategory ........................................... 8-1

8.1.1 Environmental Impacts of AML .................................. 8-1

8.1.2 Impacts of Remining on Environmental Quality ...................... 8-2

8.1.3 Methodology for Estimating Benefits .............................. 8-4

8.1.4 Results ..................................................... 8-5

8.2 Western Alkaline Coal Mining Subcategory .............................. 8-10

8.2.1 Environmental Impacts from Western Mining ....................... 8-10

8.2.2 Potential Benefits Categories ................................... 8-10

8.2.3 Methodology and Results ...................................... 8-12

Chapter 9: Social Costs and Benefits of the Proposed Rule .............................. 9-1

9.0 Introduction ....................................................... 9-1

9.1 Social Costs and Benefits of the Proposed Remining Subcategory ............... 9-1

9.2 Social Costs and Benefits of the Proposed Western Alkaline 

Coal Mining Subcategory ............................................. 9-4

References .................................................................... R-1

Appendix A: State Remining Programs .............................................. A-1

A.1 State Programs ..................................................... A-1

A.2 Summary of State Sampling Requirements ................................ A-4

Appendix B: AML Reclamation Program ............................................ B-1

B.1 AML Reclamation Program and Fund .................................... B-1

B.2 AMLIS ........................................................... B-2
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List of Tables

Table ES-1: Annual Compliance Costs for the Proposed Coal Remining Subcategory ............ ES-4

Table ES-2: Annual Costs and Cost Savings for the Proposed Western Alkaline Coal Mining 

Subcategory ............................................................ ES-6

Table ES-3: Estimated Benefits for the Proposed Coal Remining Subcategory ................ ES-12

Table ES-4 Estimated Benefits for the Proposed Western Alkaline Coal Mining Subcategory ..... ES-14

Table ES-5: Annual Social Costs and Benefits for the Proposed 

Coal Remining Subcategory $1998) .......................................... ES-15

Table ES-6: Annual Social Costs, Cost Savings and Benefits for the Proposed Western 

Alkaline Coal Mining Subcategory ($1998) .................................... ES-16

Table 3-1: Potential Remining Operations by State ....................................... 3-9

Table 3-2: Estimated Remining Operations Permitted Annually ............................ 3-10

Table 3-3: Annual Estimates of Affected Remining Sites Used in the Economic and Environmental 

Impact Analysis ......................................................... 3-11

Table 4-1: Estimated Increase in Annual Monitoring Costs: Low Estimate ..................... 4-4

Table 4-2: Estimated Increase in Annual Monitoring Costs: High Estimate ..................... 4-5

Table 4-3: Annual Costs for the Coal Remining Subcategory ............................... 4-7

Table 4-4: Model Mine Reclamation Sediment Control Costs: 

Current Effluent Guideline versus Proposed Subcategory (1998 dollars) ................. 4-9

Table 4-5: Present Value of Sediment Control Savings per Acre Reclaimed ................... 4-10

Table 4-6: Estimated Savings in Sediment Control Costs ................................. 4-11

Table 4-7: Estimated Savings from Earlier Phase 2 Bond Release- Low Estimate ............... 4-16

Table 4-8: Estimated Savings from Earlier Phase 2 Bond Release- High Estimate ............... 4-17

Table 4-9: Annual Costs and Cost Savings for the Western Alkaline Coal Mining Subcategory .... 4-18

Table 4-10: Summary of Estimated Annual Compliance Costs and Cost Savings ............... 4-18

Table 5-1: Impact of Increased Annual Monitoring Costs Per Ton of Coal Mined ................ 5-4

Table 5-2: Estimated Savings to Western Surface Mines, Per Ton and as a Percent of Current Annual

Production Value, Selected Mines ............................................. 5-9

Table 8-1: Summary of Benefit Estimates for the Coal Remining Subcategory .................. 8-9

Table 8-2: Annual Land-Related Benefits from Western Alkaline Coal Mining Subcategory ....... 8-15

Table 8-3: Total Monetized Benefits for the Western Alkaline Coal Mining Subcategory ......... 8-18
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Table 9-1: Annual Social Costs and Benefits of the Proposed Coal Remining Subcategory ($1998) ... 9-2

Table 9-2: Assumptions, Exclusions & Uncertainties in Estimated Coal Remining Subcategory 

Costs and Benefits ......................................................... 9-3

Table 9-3: Social Costs/Savings and Benefits of the Proposed Western Alkaline Coal Mining 

Subcategory ($1998) ....................................................... 9-5

Table 9-4: Assumptions, Omissions & Uncertainties in Estimated 

Western Alkaline Coal Mining Subcategory Costs and Benefits ....................... 9-6

Table A.1: State Sampling Requirements: Rahall vs. Non-Rahall Sites ........................ A-5
ES-1

Executive Summary

Introduction

EPA is proposing amendments to effluent limitations guidelines and standards for coal mining under the

Clean Water Act (40 CFR part 434). EPA is proposing two new subcategories for coal mining, the first

applying to coal remining operations and the second applying to reclamation activities at western alkaline

coal mines. This Economic and Environmental Impact Assessment (hereafter referred to as the EA)

presents an analysis of costs, benefits, economic impacts and environmental impacts attributed to each of

the proposed subcategories.

Coal Remining Subcategory 

Coal remining is the mining of surface mine lands, underground mine lands, and coal refuse piles that were

abandoned prior to the enactment of the Surface Mining Control and Reclamation Act (SMCRA) in 1977. 

Prior to SMCRA, reclamation of mine lands was not a federal requirement. Many coal mines were left in

an abandoned state and continue to degrade the environment and pose health and safety risks. The acid

mine drainage that originates from these abandoned mine lands is considered “pre-existing discharges.”

Acid mine drainage from abandoned coal mines is a major environmental problem in the Appalachian and

mid-Continent Coal Regions of the eastern United States. EPA is proposing the Coal Remining

Subcategory to provide regulatory guidance to encourage remining activities, and in turn, reduce acid mine

drainage and improve water quality. Remining is also expected to reduce the risk of injury at abandoned

sites by closing mine openings, removing highwalls, and stabilizing spoils. 

EPA is proposing BPT, BCT, and BAT limitations that have an equivalent technical basis for the Coal

Remining Subcategory. The proposed limitations are defined through a combination of numeric and nonnumeric standards. Specifically, EPA is proposing that BAT is implementation of a pollution abatement

plan that incorporates best management practices designed to improve pH and reduce pollutant levels of

iron and manganese, and a requirement that such pollutant levels are not increased over baseline conditions. 

This is essentially the level of treatment currently required under permits issued in accordance with the

Rahall Amendment to the Clean Water Act. EPA is not proposing NSPS standards. 
ES-2

Western Alkaline Coal Mining Subcategory

The existing effluent guidelines for reclamation areas establish numeric effluent limits based on the use of

sedimentation pond technology. The discharge from reclamation areas must meet effluent limitations for

settleable solids and pH. Although sedimentation ponds are proven to be effective at reducing sediment

discharge, EPA believes that there are numerous non-water quality impacts from their use in the arid west

that need to be considered. Controlling sediment in areas that naturally contain large amounts of sediment

through the exclusive use of sedimentation ponds can disturb the natural hydrologic balance, accelerate

erosion, reduce groundwater recharge, reduce water availability, and impact large areas of land for pond

construction. To address these impacts, EPA is proposing a new subcategory that requires coal mine

operators to implement BMPs so that post-mined lands are reclaimed to mimic natural conditions that were

present prior to mining activities.

EPA is proposing BPT, BAT, and NSPS limitations that have an equivalent technical basis for the Western

Alkaline Coal Mining Subcategory. EPA is proposing that a mine operator must develop a site-specific

sediment control plan for surface reclamation areas. The sediment control plan must identify BMPs, and

present design, construction, and maintenance specifications and expected performance. Specifically, EPA

is proposing that BPT consist of BMP requirements projected through modeling to maintain average annual

sediment yield at or below pre-mined undisturbed conditions. EPA would require that the coal mining

operator develop and implement a sediment control plan to demonstrate compliance. In addition, EPA is

proposing that BAT and NSPS standards be established equivalent to BPT. EPA is not proposing to

establish BCT limitations at this time. 

This executive summary reviews the major components of the EA, including: (1) estimates of industry

compliance costs; (2) evaluation of the economic impacts to the coal mining industry, including impacts on

small firms and new sources; (3) analysis of additional economic impacts, including costs to NPDES

permitting authorities, community impacts, and impacts on foreign trade; (4) evaluation of environmental

impacts and benefits; and (5) a summary of the social costs and benefits attributed to the proposed rule.

Industry Compliance Costs

EPA analyzed the costs and cost savings to the coal mining industry attributed to the proposed rule. 

These are the changes in compliance costs associated with differences between current requirements and
ES-3

requirements under the proposed subcategories. Except where noted, all costs are reported in 1998 dollars;

the present value of costs that are incurred in the future is calculated using a 7 percent discount rate; and

annualized costs are developed using an annualization period of 10 years and a 7 percent discount rate.

Coal Remining Subcategory 

EPA estimated economic baseline conditions for remining based on existing state and federal regulations

and current industry practices. EPA assumed as economic baseline conditions remining under a Rahall

permit, pursuant to section 301(p), rather than comparing compliance with Part 434 regulations. EPA

projects that states will permit 43 to 61 new remining sites each year under the proposed subcategory (see

Chapter 3). EPA projected costs for each remining site by calculating the cost of added requirements

beyond those currently required for Rahall permits. These include the cost of increased monitoring

requirements for determining baseline, the cost of potential increases in compliance monitoring

requirements, and the potential costs associated with developing and implementing the required pollution

abatement plan.

To assess the increased monitoring requirements of the proposal, EPA evaluated current state requirements

for operations permitted under the Rahall provision and calculated the proposed sample collection costs

that exceed the current state requirements. Under the proposed rule, EPA is requiring that operators

conduct one year of monthly sampling to characterize the baseline pollutant levels for pH, iron (total), and

manganese (total). Although EPA is not requiring a specific monitoring frequency to demonstrate

compliance, EPA has assumed monthly compliance monitoring for costing purposes. EPA estimates that

the total annual incremental monitoring costs are in the range of $133,500 to $193,500. Of this,

approximately $83,000 to $120,000 is associated with incremental baseline monitoring requirements and

approximately $50,500 to $73,500 results from incremental compliance monitoring during a five year

remining period.

In addition to monitoring requirements, remining operators must develop and implement a site-specific

pollution abatement plan for each remining site. In many cases, EPA believes that the requirements for the

pollution abatement plan will be satisfied by an approved SMCRA plan. However, EPA recognizes that

some operators may be required to implement additional or incremental BMPs under the proposed rule

beyond what is included in a SMCRA-approved pollution abatement plan. EPA developed a general
ES-4

estimate of the potential costs of additional BMPs based on review of existing remining permits contained

in the EPA’s Coal Remining Database (U.S. EPA, 1999a), and on information provided in the Coal

Remining Best Management Practices Guidance Manual (U.S. EPA, 2000d). Total estimated costs

associated with potential additional BMP effort are between $199,500 and $565,000 per year. 

The total estimated annual compliance costs associated with the proposed Coal Remining Subcategory are

approximately $333,000 to $758,500 per year. Table ES-1 summarizes the incremental compliance costs

associated with the proposed subcategory. 

Table ES-1.: Annual Compliance Costs for the Proposed Coal

Remining Subcategory

Monitoring Costs $133,500 - $193,500

Additional BMP Effort $199,500 - $565,000

Total Compliance Costs $333,000 - $758,500

Western Alkaline Coal Mining Subcategory

EPA determined that 46 surface coal mines and 24 underground coal mines are likely to be in the scope of

the proposed subcategory. EPA believes that the proposed rule will be at worst cost-neutral for the

underground operators. Although EPA believes that compliance with the proposed rule will result in

operational savings for many underground producers, EPA did not estimate the savings due to data

limitations. Hence, only the 46 surface mines were included in the analyses of costs and benefits.

EPA expects that the sediment control plan will largely consist of materials generated as part of the

SMCRA permit application. The requirement to use watershed modeling techniques is also consistent with

these materials. While the Office of Surface Mining (OSM) does not specifically require modeling, most

coal mine operators already perform watershed modeling to support their SMCRA permit application that

is sufficient to meet the proposed requirements. However, some incremental costs may occur for cases

where the proposed rule increases model complexity. 

Information provided by OSM indicates that a surface mine operator might incur a one-time additional 

cost of up to $50,000 to meet the proposed watershed modeling requirements. Although most sites are 

not expected to incur any additional modeling costs, EPA conservatively assumed that all 46 existing

surface operators would incur additional costs of $50,000. The $50,000 estimate represents an 
ES-5

annualized cost of $7,119 per mine, resulting in a total annualized cost estimate of $327,500. These costs

would be offset by reduced sediment control costs associated with implementing the proposed sediment

control plans and savings resulting from an expected reduction in the reclamation bonding period.

EPA projects that reclamation costs at western alkaline surface coal mines will be lower with the proposed

BMP approach than with exclusive use of sedimentation ponds. An analysis provided by the Western

Coal Mining Work Group (WCMWG) calculated cost savings for a representative model coal mine. EPA

extrapolated from the WCMWG model mine analysis and industry profile information to estimate savings

in sediment control costs. EPA projects that the proposed subcategory will result in annual savings of

$30.8 million in sediment control costs.

EPA also calculated cost savings that may result due to earlier Phase 2 bond release. The OSM hydrology

requirements to release performance bonds at Phase 2 at 30 CFR part 800.40(c)(1) requires compliance

with the existing effluent standard. The use of BMPs under the proposed subcategory is expected to allow

earlier Phase 2 bond release, because less time will be needed to meed the hydrology bond release

requirements. According to information provided by the WCMWG, the BMP-based approach would

reduce the time it takes reclaimed lands to qualify for Phase 2 bond release from ten years or more to

approximately five years. EPA used a number of simplifying assumptions to estimate the savings

associated with earlier Phase 2 bond release. The WCMWG industry profile provides information

necessary to calculate associated bond savings for 26 mines. The total estimated savings for these mines

range from $197,000 to $289,000 when annualized over a five year permit period. EPA assumed that the

remaining 20 mines for which savings could not be calculated would achieve the average savings per mine

($7,600 to $11,100), resulting in total annualized savings of between $349,000 and $511,500.

The estimated net savings in compliance costs associated with the proposed subcategory, considering

additional modeling costs and the savings to mine operations in sediment control and bonding costs, is

estimated to be approximately $31.0 million, as shown in Table ES-2.
ES-6

Table ES-2: Annual Costs and Cost Savings for the Proposed Western

Alkaline Coal Mining Subcategory 

Incremental Modeling Costs $ 327,500

Sediment Control Costs (Savings) ($ 30,835,000)

Earlier Phase 2 Bond Release (Savings) ($ 349,000 - $ 511,500)

Total Compliance Costs (Savings) ($ 30,857,000 - $ 31,019,000)

Industry Impacts

EPA is required to assess the economic achievability of effluent limitations guidelines and standards that

are based on the best available technology economically achievable (BAT). To assess the economic

achievability of the requirements, EPA assesses the expected impacts on the profitability of the potentially

affected facilities, the firms that own these facilities, and the directly-affected industry as a whole. 

Requirements that may result in significant numbers of facility or firm closures, or that may otherwise

cause significant reductions in financial returns to the affected economic activities, may be deemed to be

economically unachievable.

Economic Achievability

For purposes of this economic impact analysis, EPA assumes that the proposed Coal Remining

Subcategory will not impact existing Rahall-type permits with established BPJ limitations. Thus, the

proposed subcategory will not have any economic impacts on operations under existing Rahall-type

permits. For new permits, remining operators will have the opportunity to assess the overall economic

return to remining in compliance with the proposed requirements before any investment is made at a

remining site.

The methods used to assess the economic achievability of the proposed Coal Remining Subcategory 

differ from approaches EPA has used in analyses for other rules because EPA believes that the proposed

requirements will only affect new remining permits. Hence, information needed to quantify the 

economic impacts to industry in terms of facility closures or impacts to firm financial ratios is not

available. Alternatively, EPA compared the potential added costs of the proposed requirements with the

current price of coal produced from the Appalachian region to provide a measure of economic impacts. 
ES-7

Where additional requirements imposed by the proposed subcategory represent only a small percentage of

the price received for coal, EPA concludes that the proposed requirements will not have a significant

economic impact on potential remining projects. 

Under worst-case assumptions, EPA estimates that additional monitoring costs could represent as much as

$0.11 per ton remined. However, even this worst-case estimate represents less than one-half of one percent

of the 1997 average price of $26.55 per ton of coal mined in the Appalachian region. These findings

suggest that the proposed incremental monitoring requirements will not deter investments in remining

projects. EPA estimates that the additional BMP costs associated with the pollution abatement plans could

represent 5.6 cents per ton of coal recovered, or two-tenths of one percent of the 1997 average price of coal

mined in the Appalachian region. However, these additional BMPs will be site-specific, with economic

achievability considered in BPJ determination. 

Since the proposed Western Alkaline Coal Mining Subcategory results in net cost savings to existing mine

operations, it is inherently economically achievable. Because reclamation costs under the proposal will be

less than or equal to those under the existing effluent guidelines for all individual operators, no facility

closures or direct job losses associated with post-compliance closure are expected. However, EPA

estimated changes in labor requirements attributed to the proposed subcategory by extrapolating from the

WCMWG model mine results, which calculated change in labor hours associated with changes in the types

of erosion and sediment control structures used. EPA estimates that the proposed subcategory could result

in the loss of 9.2 full-time equivalent employees (FTEs) per year. This represents 0.1 percent of the total

1997 coal mine employment (6,862 FTEs) in the western alkaline region states. 

The cost savings associated with the proposed rule are not expected to have a substantial impact on the

industry average cost of mining per ton of coal, and are therefore not expected to have a major impact on

coal prices. While the savings are substantial in aggregate, on average the savings represent a small

portion of the total value of coal produced by the affected mines. The proposed rule is not expected to

result in significant industry-level changes in coal production or prices.
ES-8

Impacts on Small Firms

The Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act of

1996 (SBREFA), generally requires an agency to prepare a regulatory flexibility analysis for any rule

subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any

other statute unless the agency certifies that the rule will not have a significant economic impact on a

substantial number of small entities. An agency may certify that a rule will not have a significant economic

impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a

positive effect on all small entities subject to the rule.

For purposes of this analysis, small entity is defined as: (1) a small business that has 500 or fewer

employees (based on SBA size standards); (2) a small governmental jurisdiction that is a government of a

city, county, town, school district or special district with a population less than 50,000; and (3) a small

organization that is any not-for-profit enterprise which is independently owned and operated and is not

dominant in its field.

The proposed Coal Remining Subcategory provides standardized procedures for developing effluent limits

for pre-existing discharges, thereby reducing the uncertainty involved in interpreting and implementing

current Rahall requirements. The proposed subcategory is intended to remove barriers to the permitting of

remining sites with pre-existing discharges, and is therefore expected to encourage remining activities by

small entities. Thus, the Agency concludes that the proposed subcategory will relieve regulatory burden for

all small entities. EPA projects that the proposed Western Alkaline Coal Mining Subcategory will result in

cost savings for all small surface mining operators. For all small underground operators, EPA projects no

incremental costs, and the Agency believes that many are likely to experience some cost savings. Thus, the

Agency concludes that the proposed subcategory will have a positive impact on all affected small entities. 

The Agency thereby certifies that the proposed rule will not have a significant economic impact on a

substantial number of small entities. 

Impacts on New Sources

EPA does not believe that the proposed rule will present any barriers to entry in the coal mining 

industry. EPA is not proposing NSPS limitations for the Coal Remining Subcategory. EPA believes that

the proposed option will not impact existing remining permits. For new permits, remining operators will
ES-9

have the opportunity to choose among potential remining sites, and will only select sites that they believe

are economically achievable to remine. The proposed requirements will not create any barriers to entry in

coal remining, but instead are specifically designed to encourage new remining operations.

EPA believes that new sources will be able to comply with the NSPS requirements under the proposed

Western Alkaline Coal Mining Subcategory at costs that are similar to or less than the costs for existing

operators. New sources can plan for site-specific BMP reclamation from the outset rather than altering

existing reclamation plans based on the new requirements. For example, new sources would be able to

avoid costs associated with designing and installing sedimentation ponds. There is nothing about the

proposed rule that would give existing operators a cost advantage over new mine operators. Therefore,

NSPS limitations will not present a barrier to entry for new operators.

Additional Economic Impacts

EPA evaluated three additional categories of economic impacts for the proposed rule: costs to NPDES

permitting authorities, community impacts (due to potential impacts on employment), and potential foreign

trade impacts. 

Costs to NPDES Permitting Authorities

NPDES permitting authorities will incur additional costs to review new permit applications and issue

revised permits based on the proposed rule. Total additional NPDES permit review costs for the proposed

rule are estimated to be between $60,000 and $80,000 per year ($47,500 to $67,500 for remining permits,

and $12,500 for permits under the Western Alkaline Coal Mining Subcategory).

Community Impacts

The proposed rule could have community-level and regional impacts if it significantly altered the

competitive position of coal produced in different regions of the country, or led to growth or reductions in

employment in different regions and communities. The proposed rule is not likely to have significant

impacts on relative coal production in the West versus the East. The proposed Coal Remining Subcategory

is likely to shift the location of production and employment toward eligible abandoned mine lands, but not

to increase national coal production or affect coal prices significantly overall. 
ES-10

EPA projects that impacts of the proposed rule on mine employment will also be minor. Increased

remining might create new employment opportunities in some locations. As discussed above, EPA

estimated a reduction in labor requirements of 9.2 FTEs per year for the proposed Western Alkaline Coal

Mining Subcategory. Regional multipliers relating total direct and indirect employment to coal industry

employment range from 2.6 to 3.2 for the western alkaline states. Therefore, the total impact on

employment, direct and indirect, that may result from the proposed Western Alkaline Coal Mining

Subcategory is a reduction of between 24 and 29 FTEs per year.

Foreign Trade Impacts

EPA does not expect any foreign trade impacts as a result of the proposed rule. U.S. coal exports consist

primarily of Appalachian bituminous coal, especially from West Virginia, Virginia and Kentucky. Coal

imports to the U.S. are insignificant. The proposed rule could encourage additional exports, with a positive

impact on the U.S. balance of trade, if coal from expanded remining in the Appalachian region found

markets overseas. Impacts are difficult to predict, however, since coal exports are determined by economic

conditions in foreign markets and changes in the international exchange rate for the U.S. dollar. Any

impacts on foreign trade are likely to be small, given EPA’s expectation that the proposed rule will not

increase overall coal production.

Environmental Impacts and Benefits

Coal Remining Subcategory

Appalachia has been the site of substantial coal mining historically, and much of this mining took place

before passage of laws regulating the environmental impacts of coal mining. The result is an environmental

legacy that includes more than a million of acres of abandoned mine lands. These areas are associated with

a wide range of public health and safety problems and aesthetic degradation, including abandoned mine

openings, highwalls, unstable spoils, and hazardous waterbodies. In addition, acid mine drainage from

abandoned mine lands causes serious water quality problems, and is a major source of water quality

impairments in Appalachia. 

EPA evaluated the environmental impacts of remining BMPs on land and water resources using data 

from a Pennsylvania study of 112 closed remining sites and another study of 105 Pennsylvania remining
ES-11

permits. The 112-site Pennsylvania study found significant decreases or elimination in the levels of specific

pollutants in 38 to 44 percent of the pre-existing discharges monitored. Based on an assumption that

discharges are evenly distributed across reclaimed acres, EPA estimated that 38 percent to 44 percent of

the additional AML acres reclaimed per year will experience significant decreases in pollutant levels. EPA

further assumed that 57 percent of the acres permitted would actually be reclaimed, based on a study of

105 Pennsylvania remining permits (Hawkins, 1995).

EPA was able to quantify some of the benefits expected from increased remining, and was able to monetize

some of the quantified benefits using a benefits transfer approach. Benefits transfer involves use of the

results of previous studies that estimate consumers’ willingness to pay for various improvements in

environmental quality. EPA applied willingness to pay values from previous studies of similar

environmental improvements to estimate the value of the environmental improvements expected to result

from the proposed rule. Benefits are estimated by multiplying relevant values from the literature by the

additional acreage reclaimed under the proposed subcategory. EPA assumed that benefits from remining

begin to occur five years after permit issuance and are calculated for a five year period. 

Table ES-3 presents EPA’s estimates of total annual monetized benefits for the proposed Coal Remining

Subcategory. These estimates include values of enhanced recreational use of water bodies and reclaimed

abandoned mine land, the value of aesthetic improvements to water bodies, and nonuse values associated

with improved water bodies. Nonuse values are assumed to equal one-half of water-related use values. 
ES-12

Table ES-3: Estimated Benefits for the Proposed Coal Remining Subcategory

Benefit Source

Additional

Acres AML

reclaimed/year1

Annual

Present

Value from

Literature3

Estimated Present Value

of Benefits from

Remining Permits

Issued Each Year

(r=3%)4

Estimated Present Value

of Benefits from

Remining Permits

Issued Each Year

(r=7%)4

Recreational Use of

Improved Water Bodies

667 to 1,115 $37 $100,500 to $168,000 $77,000 to $129,000

Aesthetic Improvements

to Water Bodies

667 to 1,115 $140 $380,000 to $635,500 $292,000 to $488,500

Recreational Use of

Reclaimed Land

1,773 to 2,512 $28 $202,000 to $286,000 $155,000 to $220,000

Nonuse (Improved Water

bodies)

667 to 1,115 $19 $51,500 to $86,000 $40,000 to $66,500

Total $734,000 to $1,175,500 $564,000 to $904,000

1. Assumes that implementation of the rule will result in an additional 3,111 to 4,407 acres of AML permitted for remining per year, that 57% of

those acres are actually reclaimed, and that significant water quality improvements will occur in 38% to 44% of the reclaimed acres.

2. Per acre per year ($1998). See text for literature sources for these values.

3. Benefits = {Acresreclaimed *Value} / {( r)^ (i )} , where r = discount rate and average life of remining operation =

i

1 5

0

5

+ +

=

∑

5 years.

4. Numbers are rounded to the nearest $500.

Annual monetized benefits are estimated to range from approximately $0.70 to $1.2 million using a

discount rate of 3 percent, and between $0.6 and $0.9 million using a discount rate of 7 percent. In

addition to these monetized benefits, EPA estimates that between 216,000 and 307,000 additional feet of

highwall will be removed each year, resulting in significant public safety benefits. Remining may also

reduce drinking water treatment costs; reduce damage to wells, pipes, and other structures; and enhance the

commercial potential of the affected areas. EPA was unable to quantify these benefits in the analysis.

Western Alkaline Coal Mining Subcategory 

Affected western mines are located in arid and semiarid regions characterized by very low annual

precipitation. Rainfall occurs generally during localized, high-intensity, short-duration thunderstorms, 

with runoff often resulting from flash flooding. Evapotranspiration normally exceeds precipitation. 

These conditions create severe soil moisture deficits, limited surface water resources, and poor plant
ES-13

growth and cover. Most runoff from undisturbed areas has baseline sediment levels that exceed the 40

CFR part 434 guidelines for settleable solids.

The exclusive use of sediment ponds to treat runoff from reclamation areas can have detrimental

environmental effects in arid and semiarid regions. Sedimentation ponds create large disturbance areas

which may disrupt fragile habitats and sensitive hydrological features. Sedimentation ponds also reduce

water quantities downstream. Site-specific BMPs have the potential to conserve topsoil, control surface

erosion and sedimentation, increase vegetation density, and minimize disruption of downstream flows. 

The WCMWG Model Mine Report compares the performance, costs, and benefits under existing

reclamation requirements to a BMP approach for a model mine typical of surface mines in the

arid/semiarid west. EPA extrapolated the model mine estimates of sediment loadings, runoff delivery

downstream from the reclamation areas, changes in vegetative cover, and size of disturbed area to assess

benefits for the proposed subcategory. EPA used a benefits transfer approach to value two categories of

benefits: land-related benefits and water-related benefits. 

The land-related benefits stem from the increased availability of open space, which provides enhanced

hunting opportunities. EPA estimates annual land-related benefits of approximately $5,500 to $36,500 per

year.

Estimated water-related benefits include the value of enhanced recreational opportunities due to improved

water flow. EPA used “willingness to pay” (WTP) values for preserving perennial stream flows sufficient

to support abundant stream side plants, animals and fish from a previous study. EPA applied this WTP

value to the estimated number of water-based recreation participants in western counties where there are

mining operations that affect water bodies with perennial flows. The estimated monetary value of

recreational water-related benefits for these streams ranges from $25,000 to $488,000. EPA assumed that

nonuse benefits were equal to one-half of the water-related recreational benefits, or $12,500 to $244,000

per year.

Total estimated annualized benefits from implementing the proposed subcategory range from $43,000 to

$768,500, as shown in Table ES-4. The benefits estimates do not include a number of benefit categories,

including nonuse ecological benefits, the benefits of increased vegetative cover, and possible recreational

fishing benefits. 
ES-14

Table ES-4: Estimated Benefits for the Proposed Western Alkaline Coal Mining Subcategory

Benefit Categories

Annual Benefit Values (1998$)1

Low High

Avoided Surface Disturbance $5,500 $36,500

Recreational Benefits from Improved Water Flow $25,000 $488,000

Nonuse Benefits $12,500 $244,000

Total Benefits $43,000 $769,500

1Results have been rounded to the nearest $500.

Social Costs and Benefits 

Tables ES-6 and ES-7 summarize the estimated total annual social costs and benefits of the two proposed

subcategories. The estimated social costs include industry compliance costs and the costs incurred by

NPDES permitting authorities to implement the proposed rule. The benefit estimates presented reflect only

those benefit categories that EPA was able to quantify and monetize.

 
ES-15

Table ES-5: Annual Social Costs and Benefits for the Proposed Coal Remining

Subcategory ($1998)

Social Costs (Discounted at 7%) :

Compliance Costs:

 Additional BMP effort $199,500 - $565,000

 Monitoring costs $133,500 - $193,500

Costs to NPDES Permitting Authorities: $47,500 - $67,500

Total Social Costs $380,500 - $825,500

Monetized Benefits (Discounted at 3%):

Recreational Use of Improved Water Bodies $100,500 - $168,000

Aesthetic Improvements to Water Bodies $380,000 - $635,500

Recreational Use of Reclaimed Land $202,000 - $286,000

Nonuse (related to improved water bodies) $51,500 - $86,000

Total Monetized Benefits: $734,000 - $1,175,500

Note: Totals may not add due to rounding

EPA projects that states will permit 43 to 61 new remining sites each year under the proposed subcategory. 

Based on this projection, EPA estimates annual industry compliance costs in the range of $333,000 to

$758,500. This estimate includes potential costs associated with increased BMP effort (i.e., pollution

abatement plan costs) and additional monitoring. Estimated annual costs to NPDES permitting authorities

are between $47,500 and $67,500. The estimated total annual social cost of the proposed subcategory

ranges from $380,500 to $825,500.

The total monetized benefits range from $734,000 to $1,175,500. Between 72 and 76 percent of the total

monetized benefits ($532,000 to $889,500) result from projected improvements to water bodies. Of the

water-related benefits, 71 percent ($380,000 to $635,500) reflects the value of aesthetic improvements to

water bodies, 19 percent ($100,500 to $168,000) reflects water-related recreational benefits, and the

remainder ($51,500 to $86,500) reflects nonuse benefits. Estimated land-related benefits result from

improved recreation on reclaimed lands, including hunting and wildlife-viewing, and account for 24 to 28

percent of the total monetized benefits ($202,000 to $286,000). 

In addition to the benefits EPA was able to monetize, the projected increase in remining is expected to

result in the removal of approximately 216,000 to 307,000 feet of highwall each year, resulting in
ES-16

substantial benefits associated with increased public safety. Furthermore, increased remining has the

potential to recover and utilize coal resources that might otherwise remain unrecovered. Other benefit

categories that EPA was not able to monetize include health and safety benefits, nonuse benefits related to

reclaimed land, potential savings in drinking water treatment costs, and secondary economic impacts from

increases in tourism and recreation.

The proposed Western Alkaline Coal Mining Subcategory is projected to result in substantial industry cost

savings while creating environmental benefits for society, as summarized in Table ES-6.

Table ES-6: Annual Social Costs, Cost Savings and Benefits for the Proposed

Western Alkaline Coal Mining Subcategory ($1998)

Social Costs (Discounted at 7%) :

Compliance Costs (Savings)

 Incremental Modeling Costs $327,500

 Sediment Control Costs (Savings) ($30,835,000)

 Earlier Phase 2 Bond Release 

 (Savings) 

($349,000 - $ 511,500)

Costs to NPDES Permitting Authorities: $12,500

Total Social Costs (Savings) ($30,845,000 - $31,007,000)

Monetized Benefits (PV at 3%): 

Avoided Surface Disturbance $5,500 - $36,500

Recreational Benefits from Improved

Water Flow

$25,000 - $488,000

Nonuse Benefits $12,500 - $244,000

Total Monetized Benefits: $43,000 - $768,500

 Note: Totals may not add due to rounding

EPA believes that the only incremental industry compliance costs attributed to the proposed subcategory

are associated with the watershed modeling requirements, estimated to be approximately $327,500 per

year. These costs would be offset by reduced sediment control costs associated with implementing the

proposed sediment control plans (an estimated savings of approximately $30.8 million) and savings

resulting from an expected reduction in the reclamation bonding period (an estimated savings of 

$349,000 to $511,500). EPA estimates that the annual cost to NPDES permitting authorities to 
ES-17

implement the proposed subcategory will be approximately $12,500, resulting in a total annual social cost

savings of approximately $31.0 million. 

The proposed Western Alkaline Coal Mining Subcategory is also expected to result in environmental

benefits. Total monetized benefits range from $43,000 to $768,500 per year. The majority of the

monetized benefits ($37,500 to $732,000) results from improved water flow that will preserve perennial

water bodies affected by western coal mining operations. The improved flow is expected to result in

benefits to water-based recreation consumers ($25,000 to $488,000), and in water-related nonuse benefits

($12,500 to $244,000). Land-related benefits of $5,500 to $36,500 result from reduced disturbance of

land areas. EPA estimated the value of enhanced hunting opportunities associated with the undisturbed

lands, but was not able to monetize other land-related benefits. Categories of benefits that EPA was not

able to monetize include land-related ecological benefits, the benefits of increased vegetative cover, and

possible recreational fishing benefits.

1-1

Chapter 1

Introduction

1.0 Overview and Definitions

The Federal Water Pollution Control Act Amendments of 1972 established a comprehensive program to

“restore and maintain the chemical, physical, and biological integrity of the Nation’s waters” (Section

101(a)). To implement these amendments, the U.S. Environmental Protection Agency (EPA) issues

effluent limitations guidelines and standards for categories of industrial dischargers. The regulations that

the EPA establishes are:

• Best Practicable Control Technology Currently Available (BPT). These rules apply to

existing industrial direct dischargers, and generally cover discharge of conventional

pollutants.

• Best Available Technology Economically Achievable (BAT). These rules apply to

existing industrial direct dischargers and the control of priority and non-conventional

pollutant discharges.

• Best Conventional Pollutant Control Technology (BCT). These rules are an additional

level of control beyond BPT for conventional pollutants.

• Pretreatment Standards for Existing Sources (PSES). These rules apply to existing

indirect dischargers (i.e., facilities whose discharges enter Publicly Owned Treatment

Works, or POTWs). They generally cover discharge of toxic and non-conventional

pollutants that pass through the POTW or interfere with its operation.

• New Source Performance Standards (NSPS). These rules apply to new industrial direct

discharges and cover all pollutant categories.

• Pretreatment Standards for New Sources (PSNS). These rules apply to new indirect

dischargers and generally cover discharge of toxic and non-conventional pollutants that

pass through the POTW or interfere with its operation.

This report presents the economic and environmental impact assessment for proposed amendments to

effluent limitations guidelines and standards for coal mining under the Clean Water Act (40 CFR 

part 434). EPA is proposing two new subcategories for coal mining, the first applying to coal remining
1-2

operations and the second applying to reclamation activities at western alkaline coal mines. This report

discusses the two proposed subcategories, provides a brief overview of the coal industry, and describes the

mining operations that will be affected by the proposed rule. The report then presents an analysis of costs,

benefits, economic impacts, and environmental impacts attributed to each of the proposed subcategories. 

This report supports EPA's compliance with the following requirements:

• The Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory

Enforcement Fairness Act (SBREFA), which requires, among other things, that the

Agency determine whether a rule will have a "significant impact on a substantial number

of small entities;"

• The Unfunded Mandates Reform Act (UMRA), which requires that the Agency assess the

effects of regulatory actions on state, local and tribal governments and the private sector;

• Executive Order 12866, which requires that the Agency determine whether a regulatory

action is “significant.”

1.1 Coal Remining Subcategory

1.1.1 Background

Coal remining is the mining of surface mine lands, underground mine lands, and coal refuse piles that were

abandoned prior to the enactment of the Surface Mining Control and Reclamation Act (SMCRA) in 1977. 

Prior to SMCRA, reclamation of mine lands was not a federal requirement. Many coal mines were left in

an abandoned state and continue to degrade the environment and pose health and safety risks. The acid

mine drainage that originates from these abandoned mine lands is considered “pre-existing discharges.”

Acid mine drainage from abandoned coal mines is a major environmental problem in the Appalachian and

mid-Continent Coal Regions of the eastern United States. Information gathered from the Interstate Mining

Compact Commission (IMCC) and OSM’s Abandoned Mine Land Inventory System (AMLIS) indicates

that there are over 1.1 million acres of abandoned mine lands, over 9,700 miles of streams polluted by acid

mine drainage, and many miles of dangerous embankments, highwalls, and surface impoundments.
1-3

The current 40 CFR part 434 guidelines include numerical limits on pH, iron, manganese and total

suspended solids (TSS). No distinction is made between new coal mining operations and remining

operations, or between pre-existing and new discharges at remining sites. The current regulations create a

disincentive for remining by imposing limitations on pre-existing discharges for which compliance is cost

prohibitive. Congress attempted to address this problem by passing the Rahall Amendment to the Clean

Water Act (CWA) to provide incentives to encourage coal remining. The Rahall Amendment (Section 301

(p)) allows NPDES permit writers to issue permits with site-specific limits for iron, manganese, and pH for

pre-existing discharges at remining sites where remining has the potential to improve water quality. These

modified limits may not exceed baseline levels in the pre-existing discharges, and discharges from the

remining operation may not violate any state water quality standards. 

EPA recognizes that one of the most successful means for improvement of abandoned mine land is for coal

mining companies to remine abandoned areas and extract the coal reserves that remain. EPA also

recognizes that if abandoned mine lands are ignored during coal mining of adjacent areas, a time-critical

opportunity for reclaiming the abandoned mine land is lost. During remining operations, acid-forming

materials are removed with the extraction of the coal, pollution abatement best management practices

(BMPs) are implemented under applicable regulatory requirements, and the abandoned mine land is

reclaimed. During remining, many of the problems associated with abandoned mine land (AML), such as

dangerous highwalls, can be corrected without the use of public funds. Furthermore, implementation of

appropriate BMPs during remining operations can be effective at improving the water quality of preexisting discharges.

Unfortunately, the potential of the Rahall Amendment to remove the disincentives and derive the maximum

environmental benefits from remining has not been fully realized in the absence of implementing

regulations. The statute does not specify how to determine site-specific limits or baseline pollutant

discharge levels, leaving these decisions to individual permitting authorities. Without standardized

procedures for developing effluent limits for pre-existing discharges, many states with extensive AML

remain hesitant to pursue formal remining programs. EPA is proposing the Coal Remining Subcategory to

provide regulatory guidance to encourage remining activities, and in turn, reduce acid mine drainage and

improve water quality.
1-4

1.1.2 Summary of the Proposed Subcategory

Consistent with the Rahall Amendment, the proposed subcategory will apply only to "pre-existing

discharges" located within pollution abatement areas of coal remining operations and that are not

commingled with wastestreams from active mining activities. All other discharges will continue to be

subject to the current effluent limitations. EPA is proposing a new subcategory with effluent guideline

limitations based on a combination of numeric limits and non-numeric BMP requirements. EPA is also

proposing a standardized procedure for determining pollutant levels for baseline and compliance

monitoring. Potential BMPs include: daylighting abandoned underground mines, removing coal refuse

piles, reducing the volume of acid mine drainage through proper handling of acid-forming materials,

eliminating abandoned highwalls, reconstructing streambeds, draining and backfilling abandoned pits, and

establishing vegetation.

EPA is incorporating BMP standards into the proposal by requiring that remining operators develop and

implement a site-specific pollution abatement plan for each remining site. In many cases, EPA believes

that the requirements for the pollution abatement plan will be satisfied by an approved SMCRA plan. 

However, EPA or the State NPDES permitting authority will review the plan and will retain the authority

to recommend additional or incremental BMPs as necessary to meet Clean Water Act requirements.

The proposed effluent limitations guidelines and standards for the Coal Remining Subcategory are

established as follows:

• EPA is proposing BPT, BCT, and BAT limitations that have an equivalent technical basis for the

Coal Remining Subcategory. The proposed limitations are defined through a combination of

numeric and non-numeric standards. Specifically, EPA is proposing that BAT is implementation

of a pollution abatement plan that incorporates BMPs designed to improve pH and reduce pollutant

levels of iron and manganese, and a requirement that such pollutant levels are not increased over

baseline conditions. This is essentially the level of treatment currently required under permits

issued in accordance with the Rahall Amendment.

• EPA did not consider any regulatory options for new sources for the Coal Remining 

Subcategory, and therefore is not proposing NSPS standards. By definition, pre-existing

discharges at abandoned mine lands covered by this proposal were in existence prior to passage 
1-5

of SMCRA in 1977. Therefore, all pre-existing discharges are considered existing sources, and are

subject to requirements proposed for BPT, BCT, and BAT. 

1.2 Western Alkaline Coal Mining Subcategory

1.2.1 Background

The existing effluent guidelines for reclamation areas establish BPT, BAT, and NSPS numeric effluent

limits based on the use of sedimentation pond technology. The discharge from reclamation areas must meet

effluent limitations for settleable solids and pH. The existing guidelines apply to all reclamation areas

throughout the United States, regardless of climate, topography, or type of drainage (i.e., acid or alkaline). 

The existing guidelines establish relatively stringent controls on the amount of sediment that can be

discharged into waterways from post-mined areas. In the arid and semiarid west, use of sedimentation

ponds is generally required to meet these standards. Although sedimentation ponds are proven to be

effective at reducing sediment discharge, EPA believes that there are numerous non-water quality impacts

from their use in the arid and semiarid west that need to be considered. 

EPA believes that environmental conditions in the arid and semiarid west differ significantly from those in

other coal mining areas. In arid and semiarid regions, the natural vegetative cover is sparse and rainfall is

commonly received during localized, high-intensity, short-duration storms. These conditions contribute to

flash-floods and turbulent flows that transport large amounts of sediment. Controlling sediment in areas

that naturally contain large amounts of sediment through the predominant use of sedimentation ponds can

result in numerous non-water quality impacts that harm the environment, including disturbing the natural

hydrologic balance, accelerating erosion, reducing groundwater recharge, reducing water availability, and

impacting large areas of land for pond construction. To address these impacts, EPA is proposing a new

subcategory that requires coal mine operators to implement BMPs so that post-mined lands are reclaimed

to mimic natural conditions that were present prior to mining activities.
1-6

1.2.2 Summary of the Proposed Subcategory

In order to maintain natural conditions at reclamation areas, EPA is proposing that non-numeric effluent

limits be based on the design, implementation, and maintenance of best management practices (BMPs). 

BMP technologies for the coal mining industry are well known and established. Common BMPs used at

post-mining coal areas include: regrading, revegetation, mulching, check dams, vegetated channels, and

contour terracing, as well as sedimentation ponds. 

Specifically, EPA is proposing that a requirement to develop and implement site-specific sediment control

plans apply in lieu of numeric limits for pH and Settleable Solids (SS) required under current guidelines. 

EPA is proposing that a mine operator must develop a site-specific sediment control plan for surface

reclamation areas. The sediment control plan must identify BMPs and present design, construction, and

maintenance specifications, and expected performances. The proposed regulations would require the

operator to select BMPs aimed at ensuring that average annual sediment levels in drainage from the

reclamation area would not exceed predicted natural background levels of sediment discharges at that site. 

The operator would be required to demonstrate, using watershed models accepted by the regulatory

authority, that implementation of the selected BMPs would meet this goal. 

EPA expects that the components of the sediment control plan will largely be satisfied by materials

generated as part of the SMCRA permit application. The SMCRA permit application process requires that

a coal mining operator submit a reclamation plan, documentation and analysis to OSM or the permitting

authority for approval. Based on these requirements, EPA believes that plans developed to comply with

SMCRA requirements will usually fulfill the requirements proposed by EPA for sediment control plans. 

The requirement to use modeling techniques is also consistent with OSM reclamation plans. While

modeling is not a required component of the SMCRA permit application, mining facilities already submit a

watershed model as part of their SMCRA reclamation plan. EPA believes modeling is particularly

valuable in arid and semiarid areas where the infrequency of precipitation makes it difficult to gather data. 

While EPA is not requiring that a specific model be used, the Agency is proposing to require that the model

be the same watershed model the operator used to acquire the SMCRA permit. 

The proposed effluent limitations guidelines and standards for the Western Alkaline Coal Mining

Subcategory are established as follows:
1-7

• EPA is proposing that BPT consist of BMP requirements projected through modeling to maintain

average annual sediment yield at or below pre-mined undisturbed conditions. EPA would require

that the coal mining operator develop and implement a sediment control plan to demonstrate

compliance. 

• EPA is not proposing numerical effluent limitations for any conventional pollutant and hence need

not propose to establish BCT limitations at this time. 

• EPA is proposing that BAT standards be established equivalent to BPT. 

• EPA is proposing that NSPS standards be established equivalent to BAT and BPT. EPA estimates

that the proposed rule will result in a net cost savings to all affected surface mine operators, and

will be at worst cost-neutral to affected underground operators. Therefore, implementing NSPS

standards will result in no barrier to entry based upon the establishment of this level of control for

new sources. 

1.3 Structure of the Report

This report presents EPA’s analysis of the costs, benefits, economic impacts and environmental impacts

attributed to the proposed rule. Separate analyses are presented for each of the two proposed

subcategories. Both analyses start with identification of the affected mine operations and characterization

of the economic baseline, and then estimate the incremental industry compliance costs attributed to the

proposed rule. The analyses of the economic impacts of each proposed subcategory include analysis of

potential impacts on coal mine operators, coal markets (coal production and prices), employment, and

small coal mining companies. In addition to these industry impacts, EPA also examined additional

impacts, such as costs to the NPDES permitting authority to implement the proposed standards, community

impacts, and foreign trade impacts.

EPA analyzed the adverse environmental impacts of current practices as a basis for assessing the

incremental environmental impacts and benefits of the proposed rule. These baseline impacts include the

effects of pollution from abandoned mine lands that have not been reclaimed or remined, and the 

hydrologic effects and land disturbance caused by predominant use of sedimentation ponds to control

sediment loadings from western alkaline mine reclamation areas. EPA then assessed reductions in these
1-8

baseline adverse environmental impacts that will result from implementation of the proposed rule. EPA

was able to quantify these environmental improvements for some categories of benefits, and estimate their

value using benefits transfer techniques. Benefits transfer involves use of the results of previous studies

that estimate consumers’ willingness to pay for various improvements in environmental quality. EPA

applied willingness to pay values from previous studies of similar environmental improvements to estimate

the value of the environmental improvements expected to result from the proposed rule.

The remainder of this report is organized as follows:

• Chapter 2 describes the data sources used in the economic and environmental impact

assessment.

• Chapter 3 provides a profile of the affected mines and a description of the economic

baseline. The chapter first presents a brief overview of the coal industry in general and

discusses the two subcategories. The regulatory requirements that currently apply to the

affected coal mining operations are then examined. The final section describes how the

economic baselines were characterized for the two subcategories.

• Chapter 4 presents EPA's estimate of the industry compliance costs attributed to the

proposed rule.

• Chapter 5 discusses the economic impacts to industry of the proposed rule. This chapter

discusses the potential significance of the economic impacts in general, and analyzes

potential impacts for small entities and new sources in particular.

• Chapter 6 presents an evaluation of additional economic impacts, including: costs to the

NPDES permitting authority to implement the proposed standards; impacts on coal

production and prices; community employment impacts; and foreign trade impacts.

• Chapter 7 discusses cost-effectiveness.

• Chapter 8 discusses the environmental impacts of the proposed rule, and presents EPA’s

analysis of the benefits of the proposed rule.
1-9

• Chapter 9 summarizes the social costs and benefits of the proposed rule.

• References for all chapters are provided at the end of the main body of the report.

• The following appendices support the report:

— Appendix A provides information on current state remining programs.

— Appendix B provides information on the Office of Surface Mining’s Abandoned

Mine Lands Program, including the abandoned mine land (AML) fund and the

Abandoned Mine Land Inventory System (AMLIS) database.

1

http://www.eia.doe/cneaf/coal/data/summary/files.html

2-1

Chapter 2

Data Sources

2.0 Introduction

This chapter describes the data sources used by EPA to support the economic and environmental impact

analyses of the proposed rule. EPA is developing this regulation using an expedited rulemaking process. 

As part of the expedited approach, EPA chose not to gather data using the time-consuming approach of a

Clean Water Act Section 308 questionnaire. Therefore, EPA’s economic analysis relied on industry profile

information voluntarily provided by stakeholders, on data compiled from individual mining permits, and on

data from publicly available sources. These sources include those that provide data on the coal industry as

a whole, and sources that are specific to the Coal Remining Subcategory or to the Western Alkaline Coal

Mining Subcategory in particular. The categories of sources are described in separate sections below. 

2.1 General Industry Sources

2.1.1 DOE/EIA Coal Data (Form 7A)

The Department of Energy's Energy Information Administration (DOE/EIA) collects and reports a wide

range of energy-related information, including information on coal production and use. These include 

data collected from coal producers using EIA Form 7A, which must be completed by all coal mining

companies that own a mining operation that produced, processed or prepared coal during the reporting

year. Data are reported separately for each mining operation. However, most of the data are reported 

only by mines producing 10,000 short tons per year or more of coal. This form collects a variety of

information on mining operations, including type of mine, mining methods, coal beds mined, recoverable

reserves, coal production, quantity and value of sales, employment and productivity. Summaries and

analyses of these data for1997 are reported in DOE/EIA's Coal Annual 1997. In addition, some data are

available publicly in electronic form from the DOE/EIA website.1 The publically-available data include 
2-2

identifying information for the coal company and mine (name and location), type of mine, state and Mine

Safety and Health Administration (MSHA) permit numbers, mine type (underground, strip, auger,

strip/auger combination, etc.), type of operator (independent, operating subsidiary, or contractor), location

on federal property, and coal production for the reporting year. The DOE/EIA data were used to prepare

the profile of western surface and underground mines, as well as to provide basic industry information on

prices, production and employment needed to assess the economic impacts of the proposed rule.

2.1.2 Keystone Coal Industry Manual

The 1998 Keystone Coal Industry Manual provided information on the ownership and production of

individual mines, as well as background information on industry conditions from the Coal Age Year in

Review summary (e.g., information on acquisitions and company sales, and recent regional trends in

production). 

2.1.3 Census Data

Census data summarized in the Statistics of U.S. Businesses were used to assess the size of firms that own

coal mining operations. The 1992 Census of Mineral Industries provided information on revenues, costs

and employment by size of establishment (mine).

2.1.4 Financial Data

EPA used the Security and Exchange Commission’s (SEC) Edgar database, which provides access to

various filings by publicly held firms, such as 8Ks and 10Ks, for financial data and information on

corporate structures. EPA also used a database maintained by Dun & Bradstreet (D&B), which provides

estimates of employment and revenue for many privately held firms, and obtained industry financial

performance data from Leo Troy’s Almanac of Business and Industrial Financial Ratios. 
2The AMLIS data analysis excluded problem areas that did not have a problem type reported.

2-3

2.2 Sources for Coal Remining Subcategory

Various databases were used to characterize abandoned mine lands that are potential candidates for

remining, and to characterize past and potential future remining sites. These databases are described

below. 

2.2.1 AMLIS Database 

The Abandoned Mine Land Inventory System (AMLIS) database (U.S. DOI ,1998b) characterizes the

extent of environmental problems associated with AML in the United States. The database, which provides

an inventory of water bodies and lands impacted by abandoned coal mining sites, is maintained by the

Office of Surface Mining (OSM) to provide information needed to implement the Surface Mining Control

and Reclamation Act of 1977 (SMCRA). The AMLIS database is a dynamic system that is continuously

updated by OSM program officials, states, and tribes with field survey data. 

The AMLIS data are presented in two different tables. One table presents basic information about problem

areas, and the other defines specific problem types that exist within problem areas. The first “problem

area” table gives a general count of problem areas and contains information such as ownership, mine type,

and location. Overall, there are 14,852 problem areas in the AMLIS database as of February, 1999. Of

these, 7,966 problem areas (accounting for 368,804 acres) are former coal mining sites that have not been

funded for reclamation. The second table collects data on the specific types of problems and problem size

(e.g., feet of abandoned highwall, counts of mine openings), as well as estimated reclamation costs. Each

problem type is reported only once for each area. Therefore, the feet reported for abandoned highwall at a

given area, for example, represents the total footage of all highwall at that area. (Definitions of the AMLIS

problem types are provided in Appendix B.) In total, there are 18,426 problems that have not yet been

funded for reclamation at coal-related sites.2

2.2.2 NALIS Database

The National Abandoned Land Information System (NALIS) database is maintained by the Pennsylvania

Department of Environmental Protection (PA DEP, 1999b) and supplements the AMLIS data for the
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Commonwealth. EPA used NALIS data available as of March 1999 in the economic analyses. NALIS

includes 5,488 problem areas identified from high altitude aerial photography as resembling mine lands. 

Data available for each problem area include location, ownership, and whether an active mine drainage

permit may apply to the problem area. From these 5,488 problem areas, Pennsylvania selected 2,218

problem areas that might qualify for federal funding and gathered data on these areas using the Inventory

Update Form. The Inventory Update Form includes data on:

• Location and total acres of problem area; 

• Reclamation costs; 

• Mine type; 

• Type and quantity of priority 1 and 2 problems; 

• Type and size of priority 3 problems; 

• Injury/death, accident, or property damage reports; 

• Problem area visibility status; 

• Extent of public access; and

• Number of people directly affected by problem area.

The NALIS database provides more comprehensive information on Pennsylvania AML than does AMLIS. 

NALIS includes 2,218 problem areas, slightly more than the 2,095 problem areas included in AMLIS that

actually meet the standards for federal funding in Pennsylvania. However, there are 6,055 problem types

reported in NALIS for Pennsylvania, compared with 4,022 problem types reported for the Commonwealth

in AMLIS. The following data are reported for each problem type:

• Funding source;

• Problem and mine type;

• Height or depth of mine lands;

• Volume or flow of water; and

• Miles of streams polluted by a given discharge.

2.2.3 EPA Coal Remining Database 

 

EPA’s Coal Remining Database (U.S. EPA, 1999a) includes information on remining and AML

reclamation operations for selected sites in six Appalachian states (WV, VA, PA, AL, KY, and TN). 
3Note that of the 19 Pennsylvania mines included in the database, only 9 matched with problem

areas in NALIS. NALIS and EPA’s Coal Remining Database are not directly comparable, since EPA’s

database reports on specific mine sites and NALIS reports on problem areas. 

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EPA compiled the database from existing state data packages. The database contains the following

information:

• Mine permit data;

• Mine location;

• Affected acres;

• Discharge and water quality data; 

• Mine geology; and

• Information on abatement techniques (BMPs). 

As of December 1998, the database contains information on 62 Appalachian mine sites, 19 of which are

located in Pennsylvania.3 Information is also provided for Alabama, Kentucky, Tennessee, Virginia and

West Virginia sites. Three of the sites were not included in the economic impact analysis, because they

involved only reclamation and not remining as defined by the proposed rule. Of the 59 permits included in

the analysis, the Commonwealth of Pennsylvania has the largest number of records (18), followed by

Alabama (16), West Virginia (9), Virginia (8), and Kentucky and Tennessee (both with 4). 

2.2.4 Interstate Mining Compact Commission Solicitation

The Interstate Mining Compact Commission (IMCC, 1999) obtained information on current remining

activities and potential future remining from state agencies. As of July 1999, twenty states had 

responded to the IMCC solicitation (Alaska, Alabama, Colorado, Illinois, Indiana, Kentucky, Maryland,

Missouri, Mississippi, Montana, North Dakota, New Mexico, Ohio, Pennsylvania, Tennessee, Texas,

Utah, Virginia, West Virginia and Wyoming). The data provided include types of remining permits 

issued (e.g., Rahall, non-Rahall), characteristics of current and potential future remining operations (e.g.,

numbers of abandoned coal refuse piles, surface mined and underground mined sites), types of best

management practices (BMPs) used and assessments of their success, stream miles impacted by acid 

mine drainage (AMD), and industry profile statistics. The industry profile data include numbers of

companies holding remining permits, total employment at remining operations, annual coal production 

from remining sites, and estimated coal reserves that could be remined. The IMCC data were used to
2-6

estimate the number of potential future remining sites and to supplement information provided in EPA’s

Coal Remining Database. 

2.2.5 Total Maximum Daily Load Tracking System

The Total Maximum Daily Load (TMDL) Tracking System (U.S. EPA, 1996) was used to characterize the

environmental impacts of AML. The database provides information collected under Section 303(d) of the

Clean Water Act (CWA) on waters that do not currently support designated uses. Section 303(d) requires

states to identify such waters and to develop TMDLs for them. The tracking system combines all final

1996 303(d) lists from all states into a common database. Because the data were compiled at the state

level, information is not always reported in the same format and some data fields are incomplete. This

database contains information on water body type, size of impaired water body, and cause of the

impairment. Water quality impairments that are likely to be caused by AMD from coal mines were

variously reported as caused by: AMD, AML discharge, mining operations, mining, or resource extraction. 

TMDL information was used to identify water bodies impaired by coal mining activities in individual

states. To the extent possible, EPA excluded extraction of mineral resources other than coal from the

relevant causes of water quality impairment. Nevertheless, the assessment of water quality impairment is

likely to include adverse effects on water quality from resource extraction activities other than coal and

pollutants other than those found in AMD. 

2.2.6 EPA Region III GIS Database

EPA’s Region III office in Wheeling, West Virginia compiled a Geographic Information System (GIS)

database of streams with fisheries impacted by acid mine drainage in 1995 (U.S. EPA, 1995). This EPA

database defined two levels of impact: streams with severe impacts were characterized as "no fish" by state

fisheries biologists; and streams with less severe impacts were denoted "some fish," where acid mine

drainage had reduced the number of species or reduced productivity. These data cover all six states (PA,

WV, VA, MD, OH and DE) in EPA Region III. Three of these states (PA, WV, and VA) are also included

in EPA’s Coal Remining Database. EPA used the Region III database to estimate the number of streams

with fisheries impacted by acid mine drainage in each state. 
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2.2.7 Pennsylvania’s 112 Remining Site Study 

A study of 112 closed remining sites prepared by the Pennsylvania Department of Environmental

Protection evaluated the impact of remining on the water quality of pre-existing and post-remining

discharges (PA DEP, 1999a). The study was used to estimate the average number of pre-existing

discharges per remining site and to assess the impact of remining on pollutant levels in the discharges. 

2.3 Sources for Western Alkaline Coal Mining Subcategory

EPA worked with a Western Coal Mining Work Group (WCMWG) composed of representatives from the

Office of Surface Mining (OSM), the Western Interstate Energy Board (WIEB), State regulatory

authorities, the National Mining Association (NMA), and other stakeholders to identify, compile and

analyze existing information and data. NMA supplied EPA with a number of reports supporting the need

for, and feasibility of, establishing a separate Western Alkaline Coal Mining Subcategory. The group

provided three overall types of information relevant to this report.

2.3.1 Profile of Affected Coal Mining Operations

The WCMWG provided industry profile information on western alkaline surface and underground coal

mines believed to be in the scope of the proposed rule (WCMWG, 1999b). These data included

information on:

• Mine name and location; 

• Date when the mining operation began;

• Annual coal production (1,000 tons);

• Average value of coal sold by all reporting mines in the state in which the mines are

located ($/ton);

• Mining permit information including permit number and the issuance date; 

• Whether the mine is located on Indian Tribal lands;

• Number of acres disturbed to date by the mining operation;

• Projected additional acres disturbed over the lifetime of each mine; 

• Projected mine life; 

• Bond amount; and 

• Name and characteristics of the receiving waters. 
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The information was compiled from DOE/EIA data, the Keystone Manual, and data from current permits

for individual mines. 

2.3.2 Model Mine Analysis

The work group also supplied EPA with a mine modeling study sponsored by the National Mining

Association and reviewed by OSM (WCMWG, 1999a). The study presents a comprehensive analysis

comparing the predicted performance, costs and benefits of current 40 CFR part 434 Guidelines to the

requirements for the proposed subcategory for a representative model mine in the arid and semiarid western

coal region. Characterization of background water quality, soil loss rates, and sediment yield were

predicted using computer models for both pre-mining (undisturbed) and post-mining (reclamation)

conditions. The model cost estimates of the two reclamation systems relied on cost data taken from case

study mine permit applications, mine records, technical resources and industry experience. The study

estimated capital costs (design, construction and removal of ponds and BMPs) and operating costs

(inspection, maintenance, and operation) over the anticipated bonding period. Cost savings result both

from lower capital and operating costs associated with the BMP systems and from an expected reduction in

the bonding period during which the reclamation costs will be incurred. The calculations assume that the

post-mining Phase II bond release period is 10 years under the current effluent guidelines and that Phase II

bond release could occur in five years under the proposed subcategory. The cost model is discussed in

detail in Development Document for Proposed Effluent Limitations Guidelines and Standards for the

Western Alkaline Coal Mining Subcategory (U.S. EPA, 2000c).

2.3.3. Information on Environmental Impacts

The WCMWG provided information on the environmental impacts of reclamation practices at western

alkaline mines, including the impacts of sedimentation ponds and various sediment control BMPs, in the

following formats:

• Paired watershed studies, which assess water quantity and quality impacts of different

types of sediment controls.
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• Technical Information Package: Western Alkaline Mining Subcategory (WCMWG,

1999c). This package provides an overview of the environmental characteristics of

western alkaline mines, a description of the current BMPs and alternate sediment control

technologies (ASCTs) to control sediment runoff, and a discussion of potential

environmental impacts from different types of BMPs, based on a variety of sources.

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Chapter 3

Industry Profile and Economic Baseline

3.0 Introduction

This chapter describes the foundation of the economic impact analysis of the proposed rule. The chapter

begins with a brief overview of the U.S. coal mining industry. This section discusses industry profile data,

market characteristics, and recent trends in coal mine production and employment. The chapter then

describes the current regulatory requirements that apply to coal mining operations that are affected by the

proposed rule, including existing effluent guidelines, SMCRA requirements, the Rahall Amendment to the

Clean Water Act, and state remining programs. Finally, the chapter describes how the economic baselines

were characterized for the two coal mining industry segments that will be affected by the proposed rule. 

EPA’s estimates of the number and acreage of new remining sites that will be permitted each year under the

proposed Coal Remining Subcategory are presented, and the western alkaline coal mines that are

considered in the economic impact analysis for the Western Alkaline Coal Mining Subcategory are

discussed.

3.1 Overview of the Coal Industry

The United States produces approximately one-fourth of the world’s coal, and is the second largest national

holder of coal reserves. Estimated recoverable reserves in the U.S. equal more than 250 years’ supply at

today’s production levels. The U.S. coal industry has undergone substantial streamlining and restructuring

in recent years in an attempt to remain profitable, including a dramatic reduction in the number of mines,

increases in mining productivity and the average size of mines, regional shifts in production, and

consolidation in ownership (DRI, 1998).

Coal is mined from several distinct regions and provinces in the United States, which differ significantly in

both their economic and environmental characteristics. The major regions include:

• Appalachian: Alabama, Georgia, Eastern Kentucky, Maryland, Ohio, Pennsylvania,

Tennessee, Virginia, and West Virginia;
4DOE/EIA, 1995. Information in the remainder of this section is taken from DOE/EIA, 1995;

DOE/EIA, 1997; and DOE/EIA, 1999.

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• Interior: Arkansas, Illinois, Indiana, Iowa, Kansas, Western Kentucky, Louisiana,

Missouri, Oklahoma and Texas; 

• Western: Alaska, Arizona, California, Colorado, Montana, New Mexico, North Dakota,

Utah, Washington, and Wyoming.

Historically, the Appalachian Region has been the Nation’s most important source of coal, accounting for

about three-fourths of the annual production as recently as 1970.4 However, its share of total U.S.

production has been declining steadily since that time. A major consolidation and a shift in production

from eastern to western coal mines has occurred over the last 10 years. There has been a significant

reduction in the total number of coal operations since 1988, with the sharpest reduction occurring in the

Appalachian region. From 1988 to 1997, the number of coal mine operations decreased by:

• 54 percent in the Appalachian Region, falling from 3,469 mines to 1,602 mines;

• 46 percent in the Interior Region, dropping from 277 mines to 149 mines; and

• 32 percent in the Western Region, decreasing from 114 mines to 77 mines. 

While the number of mines has decreased since 1988, total U.S. coal production has increased over the

same period. Production has increased in the Appalachian Region by four percent, declined in the Interior

Region by almost twelve percent, and increased by over 46 percent in the Western Region. By 1997,

western production was almost equal to total production from the Appalachian Region -- the United States

produced 1.09 billion short tons of coal, with the Appalachian Region producing approximately 468 million

short tons, the Interior Region producing approximately 172 million short tons, and the Western Region

producing approximately 451 million short tons.

Employment in coal mining has shown a long-term decline, despite the increase in coal production. This

decline in employment reflects the replacement of manual labor by machines in virtually all aspects of

mining. Overall coal employment has declined from approximately 229,000 in 1980 to less than 82,000

 in 1997. Employment reductions have been the greatest in Appalachia, where employment has fallen 

from 171,000 in 1980 to less than 55,000 in 1997. Despite the decline, coal mining employment is still

substantially higher in Appalachia than in other regions, due to the use of more labor-intensive 
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underground mining methods. Appalachian, Interior and Western mining accounted for 72, 16 and 12

percent of 1997 coal mining employment, respectively. 

3.1.1 Coal Remining

IMCC member states have estimated that there are currently 150 mining companies in ten states involved in

remining operations (under either Rahall-type permits or current 40 CFR 434 limitations). These

companies are producing approximately 25 millions tons of coal annually, and are employing

approximately 3,000 people. To date, approximately 1,072 permits that include coal remining operations

have been issued. Of these, 330 (31 percent) are Rahall-type permits where the operator is required to meet

determined baseline limits for pre-existing discharges. Seven states have established formal remining

programs, and combined have issued approximately 330 Rahall permits. The vast majority of these,

approximately 300, were issued by the Commonwealth of Pennsylvania. Of the remaining thirty, ten were

issued by Alabama, eight by West Virginia, four by Kentucky, three by Virginia, three by Ohio, and two by

Maryland. 

Remining operations currently underway have proven to be a viable means of remediating the

environmental conditions associated with abandoned mine lands without imposing a significant cost burden

to industry. Remining operations are affecting approximately 270 abandoned coal refuse piles, 1,600

abandoned surface mines, and 1,100 abandoned underground mines. Information provided by IMCC

indicates that there are approximately 2,100 coal refuse piles, 2,000 abandoned surface mines (plus

228,000 acres), and over 8,000 abandoned underground mines that have the potential for remining. 

3.1.2 Western Alkaline Coal Mining

This section describes the subset of coal mines that would be eligible for the proposed Western Alkaline

Coal Mining Subcategory. These are mines west of the 100th meridian, located in areas with 26 inches or

less annual precipitation, and in arid or semiarid environments. States in the coal-bearing zones of the

West are: Arizona, Colorado, Utah, Montana, New Mexico, Wyoming, and portions of North Dakota. 

Coal mines in the western alkaline region represented only 3.7 percent of U.S. coal mines in 1997, but

accounted for 38 percent of total coal production. 
5EPA later determined that one of the surface mines profiled was already in the final reclamation

stage and would not be affected by the proposed rule; hence, only the remaining 46 surface mines were

included in the analyses of costs and benefits. 

6Five surface mines and eight underground mines could not be classified by size of parent firm.

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EPA prepared the document Coal Remining and Western Alkaline Mining: Economic and Environmental

Profile (U.S. EPA, 1999e) in support of the proposed rule. The report provides industry profile

information on the 47 surface coal mines and 24 underground coal mines initially believed to be in the

scope of the proposed subcategory.5 Future reclamation at these existing mines, as well as reclamation at

new western alkaline mining operations, will be eligible for the proposed subcategory. Forty-two of the

surface mines report positive coal production, totaling 502.6 million tons with an estimated value of $4.4

billion in 1996-97. Four of these (producing 26.5 million tons) were located on Indian Tribal land,

including two mines on Navajo land and two mines on both Navajo and Hopi land. DOE/EIA data on the

24 existing underground mines show that they produced 47.4 million tons of coal in 1997. Most of the

firms operating coal mines in the western arid/semiarid region are large, as defined by the Small Business

Administration (those with 500 employees or less). Based on Dun & Bradstreet information on parent firm

employment, only three of the surface mines and three of the underground mines are owned by small firms.6

3.2 Current Regulatory Requirements

This section describes the relevant state and federal requirements that currently apply to coal mine

operators affected by the proposed rule. This description provides the basis for determining how the

proposed rule will change compliance requirements, resulting in the costs, cost savings, environmental

benefits, and economic impacts that are estimated in subsequent chapters.

3.2.1 Current Effluent Guidelines

Discharges from coal mines are regulated as point sources under the Federal National Pollutant 

Discharge Elimination System (NPDES), established under Section 402 of the Federal Clean Water Act. 

EPA promulgated the effluent limitations guidelines and standards that are in effect today for coal 

mining under 40 CFR part 434 on October 9, 1985 (50 FR 41296). Currently, there are four

subcategories, including: Coal Preparation Plants and Coal Preparation Plant Associated Areas, Acid or
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Ferruginous Mine Drainage, Alkaline Mine Drainage, and Post-Mining Areas, along with a subpart for

Miscellaneous Provisions. 

Under the existing rule, a remining operation is defined as a new source coal mine. No distinction is made

between new coal mining operations and remining operations, or between pre-existing and new discharges

at remining sites. Hence, the effluent limitations set by NPDES permit writers for all discharges at

remining operations must be at least as stringent as the federal new source performance standards (NSPS)

at 40 CFR part 434. The guidelines include numerical limits on iron (total), manganese (total), pH, and

total suspended solids (TSS). 

The existing regulations for post-mining areas (subpart E) apply to all reclamation areas throughout the

United States, regardless of climate, topography, or type of drainage (i.e., acid or alkaline). Hence, the

effluent limitations set by NPDES permit writers for discharges from reclamation areas at western coal

mines must be at least as stringent as the federal BPT, BAT, and NSPS limitations at 40 CFR part 434. 

The guidelines include numerical limits for settleable solids and pH, at 0.5 ml/L and 6 to 9 units

respectively.

3.2.2 SMCRA

The Surface Mining Control and Reclamation Act passed in 1977 established programs to control the

negative environmental impacts of surface coal mining. SMCRA created the Office of Surface Mining

Reclamation and Enforcement in the Department of Interior, and provided for two major programs. The

first establishes standards and procedures to prevent environmental degradation from active coal mining

and reclamation operations, both surface and underground. The second is a reclamation program for

abandoned mine lands, funded by fees on coal production, to reclaim land and water resources adversely

affected by pre-1977 coal mining and not adequately reclaimed. OSM has promulgated comprehensive

regulations to control surface coal mining and the surface effects of underground coal mining at 30 CFR

parts 700 et seq. 

SMCRA requires that mine operators obtain mining permits from OSM or a delegated state agency. 

The existing permitting process under SMCRA is a site-specific process requiring baseline data to describe

the quality and quantity of both the affected ground and surface water. To be eligible, a permit must be

dated on or after August 4, 1977 and must be accompanied by a reclamation plan. To be approved, the
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proposed surface mining operation must not further degrade any surface or ground water basins, and the

affected area must be capable of being reclaimed. If the mining permit is approved, the mining operators

must adhere to a number of OSM performance standards, and must accept all potential environmental

liabilities associated with the site, such as AMD and public health risks. The SMCRA rules also reference

existing water quality laws and existing federal or state programs to regulate effluent discharges.

Mining operators must post a performance bond payable to the federal government or the state, in an

amount sufficient to assure the completion of the reclamation plan if the work has to be completed by the

governing agency. The bond can only be fully released after the regulatory authority certifies that all

performance standards have been met and full reclamation of the site has occurred. Such a determination is

generally not made until the mine operation has been completed for five years in the east and midwest

regions, and 10 years in the western region. However, the bond can be partially released at various stages

(as discussed in Chapter 4) if the reclamation plans are being met on schedule.

Prior to the 1977 promulgation of SMCRA, some operators remined abandoned mine land because they

were held to less restrictive environmental standards given the already-poor environmental conditions at the

sites (Veil, 1993). In the process of remining, safety, aesthetics, and water quality conditions were often

improved. After passage of SMCRA, much of the remining of the most degraded areas ceased, because

SMCRA shifted total liability for environmental impacts to the present operator of the site, regardless of

past practices. Operators were reluctant to accept liability, particularly for water quality requirements, and

instead mined virgin sites or sites without pre-existing discharges.

A number of amendments and changes to the SMCRA permitting program have been adopted to encourage

more remining of AML. federal SMCRA regulations include less restrictive standards for remining

operations regarding topsoil, revegetation, and backfilling and grading. In addition, the Small Operator

Assistance Program (SOAP) (30 CFR 795) provides assistance to eligible small coal mine operators,

including remining operators, by providing funding for site evaluations required to obtain a permit. 

Operators are eligible if they intend to apply for a permit under SMCRA, and can demonstrate that the

probable total attributed annual production for all locations on which they are issued a surface coal mining

and reclamation permit will not exceed 300,000 tons. States are granted the authority to use alternate

criteria for determining operator eligibility so long as the grant request does not exceed the amount that

would be authorized under the federal SOAP provisions.
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3.2.3 The Rahall Amendment

The Clean Water Act was amended by the Water Quality Act of 1987. The amendments added Section

301(p), commonly referred to as the Rahall Amendment, to provide incentives to encourage coal remining. 

The Rahall Amendment allows the NPDES permit writers to issue permits with site-specific limits for iron,

manganese, and pH for pre-existing discharges at remining sites where remining has the potential to

improve water quality. Technology-based limits for these pollutants are based on "best professional

judgement" (BPJ). These modified limits may not exceed baseline levels in the pre-existing discharges, and

discharges from the remining operation may not violate any state water quality standards.

To date, EPA has not established regulations or guidance implementing the Rahall Amendment. The

proposed Coal Remining Subcategory will establish specific requirements for eligible sites consistent with

the Rahall Amendment provisions.

3.2.4 State Remining Permit Programs

Many states have been delegated authority under SMCRA and the NPDES program, and several states

have established or are developing remining programs. State remining permit terms and conditions must

follow provisions established in the SMCRA regulations, except where these provisions are modified by the

state and approved by the Secretary of the Interior. The IMCC solicitation collected information on twenty

states’ remining programs (IMCC, 1999). As of July 1999, seven of the twenty states responding

(Alabama, Kentucky, Maryland, Ohio, Pennsylvania, Virginia and West Virginia) had issued Rahall

permits, and another four states (Illinois, Indiana, Missouri, and Tennessee) had issued non-Rahall

remining permits. Pennsylvania had issued by far the greatest number of Rahall permits (300), followed by

Alabama (10). 

Pennsylvania has a particularly active remining program. Pennsylvania has standardized requirements for

remining permits, and provides for a single application that covers both SMCRA and NPDES

requirements. Pennsylvania establishes BPJ limits for iron, manganese, and acidity for pre-existing

discharges under remining regulations that were approved by OSM and EPA in March 1986. Bond 

release is contingent on the post-mining discharge having pollutant levels equal to, or less than, the preremining baseline. Vegetation must be restored to pre-remining levels as well. Applicants must provide

data on baseline water quality and quantity sufficient to characterize baseline pollutant levels, and must
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develop a pollution abatement plan that is integrated with the mining and reclamation plan. Appendix A

provides additional information on state remining programs.

3.3 Characterizing the Economic Baseline

3.3.1 Coal Remining

EPA estimated economic baseline conditions based on existing state and federal regulations and current

industry practices. For remining, EPA assumed economic baseline conditions to be remining under a

Rahall permit, pursuant to Section 301(p), rather than comparing to compliance with current part 434

regulations. The Agency relied on information provided by the states on the number and acreage of AML

sites that are potential candidates for remining, as well as information on Pennsylvania's experience with

permitting under its active remining program, to estimate the number of new remining sites with preexisting discharges that might be permitted each year under the proposed subcategory. 

Specifically, this estimate was based on states’ responses to the IMCC survey, which included a request for

information on the number of potential remining sites in three categories: coal refuse piles, surface mined

sites, and underground mined sites. Table 3-1 provides EPA’s estimates of potential remining operations

per state (U.S. EPA, 1999b).
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Table 3-1: Potential Remining Operations by State

State

Number of Coal Refuse

Piles

Number of Surface

Mined Sites

Number of

Underground Mined

Sites

AL 1 -- --

IL 30 10 12

IN 150 453 615

KY 200 400-600 800-1,000

MD 10 75 75

OH 219* 605* 4,000

PA 858 4,183* 831*

TN 36* 1,210* 800

VA 400-450 750 800

WV -- 3 --

Totals 1,900 7,790 8,000

* denotes numbers calculated by EPA based on state estimate of potential remining acres

-- = no response

Source: U.S. EPA, 1999b.

In order to evaluate how many remining permits would be issued annually due to the proposed subcategory,

EPA evaluated the number of remining permits issued in Pennsylvania following state implementation of a

regulation that is similar to the proposed remining rule. EPA believes that implementing the proposed rule

is likely to have a similar effect on other states with remineable coal reserves and similar acid mine

drainage problems. In an average year, Pennsylvania issued permits to 0.36% of the potential remining

sites in the Commonwealth, with a maximum of 0.51% being issued in 1990. Therefore, EPA calculated

the number of sites potentially affected by assuming that each state would issue permits to 0.36% to 0.51%

of their reported potential remining sites on an annual basis. Table 3-2 presents these estimates. 
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Table 3-2: Estimated Remining Operations Permitted Annually

Coal Refuse Piles Surface Mined Sites

Underground Mined

Sites

# acres # acres # acres

Alabama 0 0 0 0 0 0

Illinois 0 1 0 1 - 2 0 2

Indiana 1 3 - 4 2 62 - 88 2 - 3 84 - 119

Kentucky 1 4 - 5 2 - 3 68 - 97 3 - 5 123 - 174

Maryland 0 0 0 10 - 15 0 10 - 15

Ohio 1 4 - 6 2 - 3 83 - 117 14 - 20 2,160-3,060

Pennsylvania 3 - 4 15 - 22 15 - 21 572-811 3 - 4 114-161

Tennessee 0 1 4 - 6 166-235 3-4 109-155

Virginia 2 8-11 3-4 103-145 3-4 109-155

West Virginia 0 0 0 0-1 0 0

Total Sites

Permitted Each

Year

7-10 35-49 28-40 1,066-1,510 29-41 2,712-3,840

Source: U.S. EPA, 1999b.

Entries may not sum to totals due to rounding.

Although EPA estimated that the Coal Remining Subcategory would be applicable to 64 to 91 remining

sites and 3,810 to 5,400 acres annually, EPA projects that fewer sites would realize costs or benefits from

the proposed rule. The Commonwealth of Pennsylvania has an advanced remining program, and EPA does

not believe that the proposed rule will have a measurable impact on Pennsylvania’s remining activities. 

Therefore, EPA did not include Pennsylvania’s remining sites in the estimation of costs or benefits. EPA’s

cost and benefit analysis were based on a total of 43 to 61 sites representing 3,100 to 4,400 permitted acres

each year. EPA assumed that 57 percent of the acres permitted (1,800 to 2,500 acres) would actually be

reclaimed each year based on a study of 105 remining remining permits in Pennsylvania (Hawkins, 1995). 

The study found that on average, a remining site had 67 AML acres, of which 38 acres (or 57 percent),

were actually reclaimed. Table 3-3 shows the various estimates EPA used in the economic and

environmental impact analysis. 
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Table 3-3: Annual Estimates of Affected Remining Sites Used in the 

Economic and Environmental Impact Analysis

Additional Sites Permitted Number of Sites Acres Used in Analysis of:

All types, all states

(initial estimate) 64 - 91 3,812 - 5,401

All types, excluding PA 43 - 61 3,111 - 4,407

Monitoring costs for selected

states; NPDES permitting

authority costs 

10% of surface & underground sites only (no coal

refuse piles), excluding PA 3.9 - 5.6 309 - 438 Costs of additional BMPs

Additional acres reclaimed:

(57% of acres permitted, all

types excluding PA) 1,773 - 2,512

Benefits from recreational use

of reclaimed land

Additional acres reclaimed

expected to have significant

decreases in AMD pollutant

levels (37.6 - 44.4% of

additional reclaimed acres) 667 - 1,115

Benefits from recreational use

of improved water bodies;

Aesthetic improvements in

water bodies; Nonuse benefits 

As discussed in Chapter 8, EPA evaluated evidence on the impacts of remining on water quality and on

various hazards posed by abandoned mine lands to estimate environmental impacts of the proposed

subcategory. This analysis included a detailed review of BMP performance, loadings and water quality

impacts for a sample of remining sites, as well as review of other literature on the impacts of remining. 

Based on this evidence, the Agency was able to quantify and monetize some of the benefits of additional

remining induced by the proposed subcategory using a benefits transfer approach. The Agency was not

able to quantify other important potential benefits of the rule, however, including human health and safety

impacts. 

3.3.2 Western Alkaline Coal Mining

EPA prepared the document Coal Remining and Western Alkaline Mining: Economic and Environmental

Profile (U.S. EPA, 1999e) in support of the proposed rule. The report provides industry profile

information on the 47 surface coal mines and 24 underground coal mines initially believed to be in the

scope of the proposed subcategory. However, EPA determined that one of the surface mines profiled 
3-12

was already in the final reclamation stage and would not be affected by the proposed rule; hence, only the

46 remaining surface mines were included in the analyses of costs and benefits.

As discussed in Chapter 4, EPA believes that the only incremental cost attributed to the proposed

subcategory is associated with watershed modeling requirements. Information provided by the Office of

Surface Mining indicates that a typical underground operator would not incur any additional modeling

costs as a result of the proposed rule due to the small acreage and lack of complexity associated with these

reclamation areas (U.S. DOI, 1999a, 1999b). EPA projects that cost savings for this subcategory would

result from lower capital and operating costs associated with implementing the proposed BMP plans, and

from an expected reduction in the reclamation bonding period. The methodologies used to estimate the

costs and cost saving are discussed in Chapter 4. 

Although EPA believes that compliance with the proposed rule would result in operational savings for

many underground producers, EPA did not estimate the savings due to data limitations. The industry

profile data submitted by the WCMWG did not provide information on disturbance acreage, mine life, or

bond amounts for the underground mines, and the model mine analysis addressed conditions typical of

surface mines rather than underground mines. It was therefore not possible to estimate cost savings

associated with the proposed subcategory for reclamation of surface areas at underground mines. 

However, any savings are likely to be small given the limited acreage and lack of complexity associated

with these reclamation areas. Hence, EPA assumes that the proposed rule would be cost-neutral for the

underground operators. The remainder of this report considers only the 46 active surface mines in its

discussion.

The WCMWG model mine analysis on comparative sediment loadings, as well as other evidence from the

literature, supported EPA's analysis of the environmental impacts of the proposed subcategory. 

EPA developed a partial monetary estimate of expected benefits attributed to the proposed regulation for

two categories: land-related benefits and water-related benefits. The estimated water-related benefits

include the value of enhanced recreational opportunities from improved water flow conditions. The landrelated benefits result from reduced land disturbance due to the reduced use of sedimentation ponds. The

benefits estimates do not include a number of benefit categories, including nonuse ecological benefits.
4-1

Chapter 4

Industry Compliance Costs

4.0 Introduction

This chapter presents EPA's analysis of the costs and cost savings to the coal mining industry attributed to

the proposed rule. These are the changes in compliance costs associated with differences between current

requirements and requirements under the proposed subcategories. 

EPA estimated compliance costs for two additional requirements associated with the proposed Coal

Remining Subcategory: (1) monitoring costs; and (2) pollution abatement plan costs. The Agency

evaluated current state requirements for operations permitted under the Rahall provision and calculated the

proposed sample collection costs that exceed the current state requirements based on estimates of typical

sampling, analysis and monitoring device costs. EPA also estimated the costs associated with developing

and implementing a pollution abatement plan. In many cases, EPA believes that the requirements for the

pollution abatement plan will be satisfied by an approved SMCRA plan. However, EPA recognizes that

some operators may be required to implement additional or incremental BMPs under the proposed rule

beyond what is included in a SMCRA-approved pollution abatement plan. EPA developed a general

estimate of the potential costs of these additional BMPs. 

For the Western Alkaline Coal Mining Subcategory, EPA believes that plans developed to comply with

SMCRA requirements will usually fulfill the requirements proposed by EPA for sediment control plans. 

The requirement to use watershed modeling techniques is also consistent with OSM reclamation plans. 

While OSM does not specifically require modeling, most coal mine operators already perform watershed

modeling to support their SMCRA permit application that is sufficient to meet the proposed requirements. 

However, some incremental costs may occur where the rule increases model complexity. EPA developed a

conservative estimate of these costs by assuming that all existing surface mines would need to perform

additional modeling effort. EPA also estimated the cost savings for this subcategory expected to result

from lower capital and operating costs associated with implementing the proposed BMP plans, and from an

expected reduction in the reclamation bonding period. 
4-2

Except where noted, all costs are reported in 1998 dollars; the present value of costs that are incurred in the

future are calculated using a 7 percent discount rate; and annualized costs are developed using an

annualization period of 10 years and a discount rate of 7 percent. The following formula was used to

calculate annualized costs and cost savings:

Annualized Cost ' PV ×

r × (1 % r)

n

(1 % r)

n & 1

where

PV = Present value of compliance costs

r = Discount rate (7% in this analysis)

t = Amortization period (10 years)

4.1 Coal Remining

4.1.1 Methodology

EPA projected that states will permit 43 to 61 new remining sites each year under the proposed

subcategory (see Chapter 3). EPA projected costs for each remining site by calculating the cost of added

requirements beyond those currently required for Rahall permits. These include the cost of increased

monitoring requirements for determining baseline, the cost of potential increases in compliance monitoring

requirements, and the potential costs associated with implementing the required pollution abatement plan. 

4.1.2 Monitoring Costs

To assess the increased monitoring requirements of the proposal, EPA evaluated current state requirements

for operations permitted under the Rahall provision and calculated the proposed sample collection costs

that exceed the current state requirements. Current state sample collection requirements for determining

and monitoring baseline are included in Appendix A.

Under the proposed rule, EPA is requiring that operators conduct one year of monthly sampling to

characterize the baseline pollutant levels for pH, iron (total), and manganese (total). Although most 

states with remining activities have similar requirements, remining sites in Alabama and Kentucky will 
4-3

be required to add six samples annually. EPA did not have data for Illinois, Indiana, or Tennessee, because

the remining operations that occur in these states do not incorporate Rahall provisions for pre-existing

discharges. For these states, EPA has conservatively assumed monitoring costs for 12 additional samples

annually, and that remining operators would have to purchase and install flow weirs to comply with the

baseline determination and monitoring requirements.

Although EPA is not requiring a specific monitoring frequency to demonstrate compliance, EPA has

assumed monthly compliance monitoring for costing purposes. Most states already have similar

requirements, with the exception of Ohio, which currently requires quarterly sampling. Again, EPA did not

have data for Illinois, Indiana, or Tennessee, because these states do not incorporate Rahall provisions in

their remining permits. EPA has conservatively assumed that an additional 12 compliance monitoring

samples per year would be required for these states and has costed this requirement for five years. 

Because each remining site will typically have more than one pre-existing discharge, EPA reviewed

Pennsylvania remining sites to estimate the average number of pre-existing discharges per site. EPA used

this calculated average of four pre-existing discharges per site for estimating baseline determination and

compliance monitoring costs. Tables 4-1 and 4-2 show the expected incremental monitoring costs required

for each state (low and high estimates respectively). These represent an upper bound estimate of additional

monitoring requirements based on the assumptions discussed above. 
4-4

Table 4-1: Estimated Increase in Annual Monitoring Costs: Low Estimate

Baseline Monitoring Compliance Monitoring

Annual No. 

of Sites

Permitted 

Total Incremental Cost

State # Add'l

Samples/

Year

Increased

Cost/

Mine (PV)*

# Add'l

Samples/

Year

Increased

Cost/

Mine (PV)**

Baseline

Monitoring

Compliance

Monitoring

Total

AL 6 $1,128 0 $0 0 $0 $0 $0

IL*** 12 $6,928 12 $9,900 0 $0 $0 $0

IN*** 12 $6,928 12 $9,900 4 $27,712 $9,024 $36,736

KY 6 $1,128 0 $0 6 $6,768 $0 $6,768

MD 0 $0 0 $0 1 $0 $0 $0

OH 0 $0 8 $6,600 17 $0 $25,568 $25,568

PA 0 $0 0 $0 21 $0 $0 $0

TN*** 12 $6,928 12 $9,900 7 $48,496 $15,792 $64,288

VA 0 $0 0 $0 7 $0 $0 $0

WV 0 $0 0 $0 0 $0 $0 $0

Total 64 $82,976 $50,384 $133,360

* Number of additional samples per year * $188/sampling period ($47 per sample * 4 average sampling points)

** Number of additional samples per year * $825 present value of annual compliance sampling (present value of $160 per year for 5 years @ 7%)

*** Baseline requirements not available; assumed to require 12 additional samples per year for baseline and compliance monitoring plus 4 flow weirs at $1,168 per weir. 
4-5

Table 4-2: Estimated Increase in Annual Monitoring Costs: High Estimate

Baseline Monitoring Compliance Monitoring

Annual No. 

of Sites

Permitted 

Total Incremental Cost

State # Add'l

Samples/

Year

Increased

Cost/

Mine (PV)*

# Add'l

Samples/

Year

Increased

Cost/

Mine (PV)**

Baseline

Monitoring

Compliance

Monitoring

Total

AL 6 $1,128 0 $0 0 $0 $0 $0

IL*** 12 $6,928 12 $9,900 0 $0 $0 $0

IN*** 12 $6,928 12 $9,900 6 $41,568 $13,536 $55,104

KY 6 $1,128 0 $0 8 $9,024 $0 $9,024

MD 0 $0 0 $0 1 $0 $0 $0

OH 0 $0 8 $6,600 25 $0 $37,600 $37,600

PA 0 $0 0 $0 30 $0 $0 $0

TN*** 12 $6,928 12 $9,900 10 $69,280 $22,560 $91,840

VA 0 $0 0 $0 10 $0 $0 $0

WV 0 $0 0 $0 0 $0 $0 $0

Total 91 $119,872 $73,696 $193,568

* Number of additional samples per year * $188/sampling period ($47 per sample * 4 average sampling points)

** Number of additional samples per year * $825 present value of annual compliance sampling (present value of $160 per year for 5 years @ 7%)

*** Baseline requirements not available; assumed to require 12 additional samples per year for baseline and compliance monitoring plus 4 flow weirs at $1,168 per weir. 
7EPA assumed that ten percent of the surface and underground remining site acreage in states other

than Pennsylvania would require addition of alkaline material.

4-6

As shown in Tables 4-1 and 4-2, the total annual incremental monitoring costs are estimated to be in the

range of $133,500 to $193,500. Of this, between $83,000 and $120,000 is associated with incremental

baseline monitoring requirements and between $50,500 and $73,500 results from incremental compliance

monitoring during a five year remining period. 

4.1.3 Pollution Abatement Plan Costs

In addition to monitoring costs, remining operators must develop and implement a site-specific pollution

abatement plan for each remining site. In many cases, EPA believes that the requirements for the pollution

abatement plan will be satisfied by an approved SMCRA plan. However, EPA recognizes that some

operators may be required to implement additional or incremental BMPs under the proposed rule beyond

what is included in a SMCRA-approved pollution abatement plan. EPA developed a general estimate of

the potential costs of additional BMPs based on review of existing remining permits contained in the EPA’s

Coal Remining Database, and on information provided in the Coal Remining Best Management Practices

Guidance Manual (U.S. EPA, 2000d). 

EPA determined that the most likely additional BMP that NPDES permit writers might require would be a

one-time increase in the amount of alkaline material used as a soil amendment to prevent the formation of

acid mine drainage. EPA assumed that an average mine facility requiring additional BMP effort would

need to increase its alkaline addition by a rate of 50 to 100 tons per acre to meet the additional NPDES

permit review requirements. Finally, EPA estimated an average cost for alkaline addition of $12.90/ton,

and assumed that 10 percent of surface and underground remining sites would be required to incur these

additional BMP costs.7 Because the typical BMP for coal refuse piles is simply removal of the pile, EPA

believes that no incremental BMP costs would be incurred for these sites.

Based on EPA's estimate that between 309 and 438 acres could require additional alkaline addition each

year, the estimated annual cost of additional BMP requirements would range from $199,500 to $565,000:

(3,091 acres in remining * 10% requiring alkaline addition * 50 tons alkaline material per acre *

$12.90 per ton for alkaline material); and
4-7

(4,380 acres in remining * 10% requiring alkaline addition * 100 tons alkaline material per acre *

$12.90 per ton for alkaline material). 

4.1.4 Total Annual Compliance Costs for the Coal Remining Subcategory

The estimated annual incremental costs attributed to the proposed rule range from $333,000 and $758,500

per year. This cost includes $133,500 to $193,500 in estimated incremental monitoring costs, and

$199,500 to $565,000 in estimated additional BMP effort per year. These costs are based on EPA’s

estimates of future remining, and would most likely be incurred by new remining operations. Table 4-3

summarizes the incremental costs associated with the proposed subcategory. 

Table 4-3: Annual Costs for the Coal Remining Subcategory

Monitoring Costs $133,500 - $193,500

Additional BMP Effort $199,500 - $565,000

Total Compliance Costs $330,000 - $758,500

4.2 Western Alkaline Coal Mining

4.2.1 Methodology

The cost impacts of the proposed subcategory will vary, depending on the site-specific conditions at each

eligible coal mine. However, based on data and information gathered to date, EPA believes that the costs

of reclamation under the proposed rule will be less than or equal to reclamation costs under the existing

effluent guidelines for each individual operator, and thus, for the subcategory as a whole. 

 EPA expects that the sediment control plan will largely consist of materials generated as part of the

SMCRA permit application. The SMCRA permit application requires that a coal mining operator submit 

a reclamation plan, documentation and analysis to OSM or the permitting authority for approval. Based 

on these requirements, EPA believes that plans developed to comply with SMCRA requirements will

usually fulfill the requirements proposed by EPA for sediment control plans. The requirement to use

watershed modeling techniques is also consistent with OSM reclamation plans. While OSM does not

specifically require modeling, most coal mine operators already perform watershed modeling to support
4-8

their SMCRA permit application that is sufficient to meet the proposed requirements. However, some

incremental costs may occur where the rule increases model complexity. As discussed below, these costs

would be offset by reduced sediment control costs associated with implementing the proposed BMP plans

and savings resulting from an expected reduction in the reclamation bonding period.

4.2.2 Watershed Modeling Costs

As discussed above, EPA believes that some operators may incur incremental watershed modeling costs

where the proposed rule increases model complexity. Information provided by OSM indicates that a

typical surface mine operator may incur a one-time additional cost of zero to $50,000 to meet the modeling

requirements (U.S. DOI, 1999a, 1999b). This figure represents the additional modeling effort attributed to

the proposed requirements; it does not represent the total cost associated with watershed modeling. 

Although most sites would not incur additional modeling costs, EPA conservatively assumes that all 46

existing surface operators would incur additional modeling costs of $50,000. The $50,000 estimate

represents an annualized cost of $7,119 per mine, resulting in a total cost estimate of $327,500 (46 sites *

$7,119 per site). These costs would be offset by the cost savings discussed below. 

4.2.3 Reduced Sediment Control Costs

EPA projects that cost savings would result from lower capital and operating costs associated with

implementing the proposed BMP plans relative to the predominant use of sedimentation ponds. The costs

savings for sediment controls based on BMPs were calculated for a representative model mine and were

submitted by the Western Coal Mining Work Group (WCMWG, 1999a). The cost model is discussed in

detail in the Development Document for Proposed Effluent Limitations Guidelines and Standards for the

Western Alkaline Coal Mining Subcategory (U.S. EPA, 2000c). The cost estimates of the model mine

relied on data taken from case study mine permit applications, mine records, technical resources, and

industry experience. The study estimated capital costs (design, construction, and removal of ponds and

BMPs) and operating costs (inspection, maintenance, and operation) over the anticipated bonding period. 

EPA extrapolated from the WCMWG model mine analysis and industry profile information to estimate

savings in sediment control costs for the proposed subcategory. Cost savings for reclamation at existing

western surface mines were calculated by extrapolating the cost savings per disturbed acre calculated for

the model mine. To the extent that individual mines would achieve lower or higher savings per acre than
4-9

estimated for the model mine based on site-specific conditions, this estimate of total cost savings may be

over- or underestimated. 

Table 4-4 shows the sediment control costs estimated by the WCMWG for post-mining reclamation for the

model mine. 

Table 4-4: Model Mine Reclamation Sediment Control Costs: 

Current Effluent Guideline versus Proposed Subcategory (1998 dollars)

Year

Current Effluent Guideline Proposed Subcategory

Capital Operating Capital Operating

1 $975,435 $15,384 $760,816 $3,300

2 $2,720 $142,804 $43,577 $103,368

3 $0 $190,181 $0 $59,876

4 $0 $88,956 $0 $77,895

5 $0 $26,231 $0 $14,147

6 $0 $161,999 - -

7 $0 $15,269 - -

8 $0 $15,269 - -

9 $0 $133,377 - -

10 $171,607 $15,269 - -

Total

(undiscounted)

$1,149,761 $804,739 $804,393 $258,586

Source: WCMWG, Draft Western Alkaline Mining Subcategory Mine Modeling and Performance - Cost-Benefit Analysis, June 9, 1999,

Tables 4-11 and 4-18.

The present value of the reclamation costs over the ten year period (discounting at seven percent) is

$1,700,000 for the existing guideline and $1,028,000 for the proposed subcategory, or a present value total

savings of $672,000 over ten years, as shown in Table 4-5. This represents a 39 percent overall reduction

in costs, or $1,764 in savings per acre disturbed for the 381 acre model mine. 
4-10

Table 4-5: Present Value of Sediment Control Savings per Acre Reclaimed

Year Capital Operating Total Present Value

Proposed Subcategory

1 $760,816 $3,300 $764,116 $764,116

2 $43,577 $103,368 $146,945 $137,332

3 $0 $59,876 $59,876 $52,298

4 $0 $77,895 $77,895 $63,586

5 $0 $14,147 $14,147 $10,793

Total $804,393 $258,586 $1,062,979 $1,028,124

Existing Effluent Guideline

1 975,434.77 15,383.76 990,818.53 990,819

2 2,720.00 142,804.48 145,524.48 136,004

3 0.00 190,181.32 190,181.32 166,112

4 0.00 88,955.99 88,955.99 72,615

5 0.00 26,230.71 26,230.71 20,011

6 0.00 161,998.91 161,998.91 115,503

7 0.00 15,269.22 15,269.22 10,175

8 0.00 15,269.22 15,269.22 9,509

9 0.00 133,376.64 133,376.64 77,626

10 171,606.66 15,269.22 186,875.88 101,648

Total 1,149,761.43 804,739.47 1,954,500.90 1,700,021

Present value of total savings over 10 years 671,897

Present value of savings per acre 1,764

EPA estimated annual savings for the existing western alkaline surface mines by multiplying the present

value per acre of model mine savings ($1,764) times the estimated acres disturbed annually at each mine. 

EPA used the projected disturbance acreage divided by the remaining mine life to estimate the annual acres

reclaimed at each existing mine site. This information was available for 26 mines and totaled 9,880 acres

per year, or an average of 380 acres per mine. EPA assumed that the remaining 20 mines with incomplete

data would each reclaim the average 380 acres per year, resulting in a total of 17,480 acres

[9,880+(20*380)]. Based on an average savings of $1,764 per acre, EPA projects that the proposed

subcategory will result in annual savings of $30.8 million, as shown in Table 4-6.
4-11

Table 4-6: Estimated Savings in Sediment Control Costs

Mine Life Disturbance

Acres

Disturbance

Acres/Mine

Life

Estimated

Annual

Reclamation

Savings ($)**

$12 $16,351 $1,363 $2,403,597

$6 $7,236 $1,206 $2,127,384

$18 $11,000 $611 $1,078,000

$15 $8,207 $547 $965,143

$14 $7,275 $520 $916,650

$24 $12,172 $507 $894,642

$12 $5,765 $480 $847,455

$14 $6,631 $474 $835,506

$25 $10,429 $417 $735,870

$16 $6,300 $394 $694,575

$12 $4,546 $379 $668,262

$30 $11,300 $377 $664,440

$18 $6,216 $345 $609,168

$28 $8,579 $306 $540,477

$12 $3,576 $298 $525,672

$18 $5,172 $287 $506,856

$17 $4,485 $264 $465,385

$16 $3,810 $238 $420,053

$9 $2,000 $222 $392,000

$26 $4,960 $191 $336,517

$18 $2,085 $116 $204,330

$6 $500 $83 $147,000

$15 $1,161 $77 $136,534

$28 $1,886 $67 $118,818

$32 $2,129 $67 $117,361

 $20 $875 $44 $77,175

Total for 26 mines: $17,428,870

Total for 46 mines:* $30,835,270

*Based on the assumption that sites for which projected disturbance

acres or mine life were not reported will disturb an average of 380

acres per year. 

** Annual acres disturbed * the present value of savings per acre

estimated for the model mine ($1,764). 

4.2.4 Savings Associated with Earlier Bond Release

EPA also calculated cost savings that may result due to earlier Phase 2 bond release. Under SMCRA

requirements, permit applicants must post a reclamation bond to ensure that the regulatory authority 

will have funds to reclaim the site if the permitee fails to complete the reclamation plan approved in the
8The revegetation responsibility period is ten years in the arid/semiarid west.

9Personal communication with Wayne Erickson, Habitat Management, Inc. OSM regulations

require that 15 percent of the bond amount remain in place until the end of the revegetation responsibility

period. 

4-12

permit. Permitees may apply for release of all or part of the bond as reclamation is completed. The

regulations recognize three phases of reclamation for purposes of bond release: 

• Phase 1: backfilling, regrading and drainage control;

• Phase 2: topsoil replacement and establishment of vegetation; and

• Phase 3: meeting the revegetation success standards and completing the revegetation

responsibility period.8

The amount of bond release at each phase varies from site to site. Typical stages of bond release in the

West are 60 percent released at the end of Phase 1, an additional 25 percent released at the end of Phase 2,

and the final 15 percent released at the end of Phase 3.9 

The OSM hydrology requirements to release performance bonds at Phase 2 at 30 CFR part 800.40(c)(1)

requires compliance with the existing effluent standard. The use of BMPs under the proposed subcategory

is expected to allow earlier Phase 2 bond release, because less time will be needed to meet the hydrology

bond release requirements. According to information provided by WCMWG (1999a), meeting the existing

guidelines in the arid/semiarid west may take 10 years or longer, and may require significant topographic

modifications and excessive maturation of vegetation. In addition, sampling to demonstrate compliance

with existing standards is difficult, given the infrequent and flash nature of flows in the region. The BMPbased approach in the proposed rule uses the inspection of BMP design, construction, operation and

maintenance to demonstrate compliance instead of the current sampling and analysis of surface water

drainage for reclamation success evaluations. The report estimates that the BMP-based approach would

reduce the time it takes reclaimed lands to qualify for Phase 2 bond release to about five years.
10Personal communication with Wayne Erickson, Habitat Management, Inc. 

4-13

The savings associated with earlier Phase 2 bond release will vary among individual mines, depending on

the bond amounts and on the type of bond. The cost incurred by mine operators to maintain bonds varies

according to the type of bond. For example: 

• Interest must be paid on certificates of deposit;

• Surety bonds require an annual payment based on the size of the bond -- typical annual

fees for western mines are reported to range from $3.75 to $5.50 per $1,000 in bond

value;10

• Self-bonding requires that companies submit periodic reports, and may prevent the use of

some company assets as collateral for other financing or may prevent the sale of assets.

A survey conducted by the Office of Surface Mining in 1995 found that 

...approximately 75 percent of the bonds posted for coal mining operations were corporate surety bonds. 

Small operations with bond amounts in the tens of thousands of dollars tend to use certificates of deposit

and other assets. Bond amounts in excess of tens or hundreds of millions of dollars are typically in the

form of corporate surety bonds (U.S. DOI, 1998c).

EPA used a number of simplifying assumptions about the timing of reclamation and bond release and the

cost of maintaining reclamation bonds to estimate the savings associated with earlier Phase 2 bond release. 

The WCMWG industry profile provides information necessary to calculate associated bond savings

(reclamation bond amounts, disturbance acreage, and mine life) for twenty-six mines. EPA calculated

savings for each these mines using the following assumptions:

• The amount of bond released at the end of Phase 2 is equal to 25 percent of the reported

bond amount;

• All bonds are surety bonds, with annual fees of between $3.75 and $5.50 per thousand;
4-14

• Mining under the current permit is assumed to end in year 5. Savings is calculated as the

difference between the present value of maintaining the bond for 10 years after Phase 2

bond release (i.e., in year 15) and the present value of maintaining it for 5 years (i.e., in

year 10). Costs are annualized over the 5 year permit period using a 7 percent discount

rate.

The calculation steps are as follows:

(1) Calculate the Permit Period (5-year) Disturbance Acres:

 = [ projected disturbance acres (total) / mine life ] * 5

(2) Calculate Bond Amount Attributed to Permit Period Disturbance Acres :

= total bond amount * [ permit period disturbance acres / projected disturbance acres (total) ]

(3) Calculate the Phase 2 Bond Amount Attributed to Permit Period Disturbance Acres:

= 25% of the total bond amount attributed to permit period disturbance acres

(4) Calculate the Annual Cost of Maintaining the Phase 2 Bond Amount:

= Phase 2 bond amount (in $thousands)* $3.75 (low estimate) or $5.50 (high estimate) annual

surety bond fee per $thousand;

(5) Calculate the Present Value of Savings due to Earlier Phase 2 Bond Release:

= present value of avoided payment of surety bond costs in years 11 through 15, discounted at 7

percent;

(6) Annualize the Present Value of the Avoided Surety Bond Costs: 

annualized present value over the 5 year permit period, at 7 percent.

The simplified assumptions regarding the timing of different stages of reclamation, as well as the

assumptions regarding the type and cost of bonds, may under- or overstate actual savings. The analysis

understates total savings by ignoring savings associated with reclamation bonds posted under future

permits, but may overstate costs by assuming that all bonds are surety bonds rather than self-bonding. In
4-15

addition, the timing of Phase 2 bond release will vary from site to site depending on the nature of the BMPs

used and the success in establishing revegetation. This calculation assumes that mines will achieve Phase 2

bond release five years earlier under the proposed subcategory than would otherwise occur, but the actual

results may differ from mine to mine. 

Tables 4-7 and 4-8 show that the total estimated present value of savings for the 26 mines for which bond

savings could be calculated range from $197,000 to $289,000 when annualized at seven percent over the

five year permit period. EPA assumes that the remaining 20 mines for which savings could not be

calculated would achieve the average savings per mine ($7,600 to $11,100) resulting in total annualized

savings between $349,000 and $511,500.
4-16

Table 4-7: Estimated Savings from Earlier Phase 2 Bond Release- Low Estimate

Bond Am't

($000)

Projected

Disturbanc

e Acres

Projected

Mine Life

Permit

Period

Disturbanc

e Acres*

Phase 2

Bond

Release

($000)**

Annual

Surety Cost

($) ***

PV of

Avoided

Surety Fees

($)@

Annualized

Savings ($)†

$124,002 4,546 12 1,894 $12,917 $48,438 $100,961 $24,624

$61,037 2,000 9 1,111 $8,477 $31,790 $66,261 $16,160

$79,854 16,351 12 6,813 $8,318 $31,193 $65,017 $15,857

$111,000 11,000 18 3,056 $7,708 $28,906 $60,250 $14,694

$149,388 10,429 25 2,086 $7,469 $28,010 $58,383 $14,239

$34,446 500 6 417 $7,176 $26,911 $56,091 $13,680

$142,448 8,579 28 1,532 $6,359 $23,847 $49,706 $12,123

$120,200 12,172 24 2,536 $6,260 $23,477 $48,933 $11,934

$50,026 7,275 14 2,598 $4,467 $16,750 $34,912 $8,515

$46,857 6,631 14 2,368 $4,184 $15,689 $32,701 $7,975

$47,297 8,207 15 2,736 $3,941 $14,780 $30,807 $7,514

$50,000 6,216 18 1,727 $3,472 $13,021 $27,140 $6,619

$42,000 4,485 17 1,319 $3,088 $11,581 $24,138 $5,887

$27,943 5,765 12 2,402 $2,911 $10,915 $22,751 $5,549

$24,950 3,576 12 1,490 $2,599 $9,746 $20,314 $4,954

$37,124 5,172 18 1,437 $2,578 $9,668 $20,151 $4,915

$58,500 11,300 30 1,883 $2,438 $9,141 $19,052 $4,647

$58,425 2,129 32 333 $2,282 $8,558 $17,838 $4,351

$46,838 4,960 26 954 $2,252 $8,444 $17,601 $4,293

$18,500 6,300 16 1,969 $1,445 $5,420 $11,297 $2,755

$6,198 7,236 6 6,030 $1,291 $4,842 $10,093 $2,462

$16,000 3,810 16 1,191 $1,250 $4,688 $9,770 $2,383

$2,945 875 20 219 $184 $690 $1,439 $351

$3,800 1,886 28 337 $170 $636 $1,326 $323

$2,009 1,161 15 387 $167 $628 $1,309 $319

$344 2,085 18 579 $24 $90 $187 $46

Total for 26 mines: $808,428 $197,169

Estimate for 46 mines based on the average savings per mine for 26 mines: $1,430,296 $348,837

* Projected disturbance acres divided by project mine life * 5

** Bond amount * ratio of permit period to total disturbance acres * 25% released at Phase 2

*** Phase 2 bond release * $3.75 per $1,000 bond value surety fee

@Present value of avoided annual surety costs in years 11 through 15, discounted at 7 percent

†Annualized over 5 years at 5 percent
4-17

Table 4-8: Estimated Savings from Earlier Phase 2 Bond Release - High Estimate

Bond Am't. 

($000)

Projected

Disturbanc

e Acres

Projected

Mine Life

Permit

Period

Disturbanc

e Acres*

Phase 2

Bond

Release

($000)**

Annual

Surety Cost

($)***

PV of

Avoided

Surety Fees

($)@

Annualized

Savings ($)†

$124,002 4,546 12 1,894 $12,917 $71,043 $148,077 $36,115

$61,037 2,000 9 1,111 $8,477 $46,625 $97,183 $23,702

$79,854 16,351 12 6,813 $8,318 $45,750 $95,358 $23,257

$111,000 11,000 18 3,056 $7,708 $42,396 $88,367 $21,552

$149,388 10,429 25 2,086 $7,469 $41,082 $85,628 $20,884

$34,446 500 6 417 $7,176 $39,469 $82,267 $20,064

$142,448 8,579 28 1,532 $6,359 $34,976 $72,902 $17,780

$120,200 12,172 24 2,536 $6,260 $34,432 $71,768 $17,504

$50,026 7,275 14 2,598 $4,467 $24,566 $51,204 $12,488

$46,857 6,631 14 2,368 $4,184 $23,010 $47,961 $11,697

$47,297 8,207 15 2,736 $3,941 $21,678 $45,184 $11,020

$50,000 6,216 18 1,727 $3,472 $19,097 $39,805 $9,708

$42,000 4,485 17 1,319 $3,088 $16,985 $35,403 $8,634

$27,943 5,765 12 2,402 $2,911 $16,009 $33,368 $8,138

$24,950 3,576 12 1,490 $2,599 $14,294 $29,794 $7,266

$37,124 5,172 18 1,437 $2,578 $14,179 $29,554 $7,208

$58,500 11,300 30 1,883 $2,438 $13,406 $27,943 $6,815

$58,425 2,129 32 333 $2,282 $12,552 $26,163 $6,381

$46,838 4,960 26 954 $2,252 $12,385 $25,815 $6,296

$18,500 6,300 16 1,969 $1,445 $7,949 $16,569 $4,041

$6,198 7,236 6 6,030 $1,291 $7,102 $14,803 $3,610

$16,000 3,810 16 1,191 $1,250 $6,875 $14,330 $3,495

$2,945 875 20 219 $184 $1,012 $2,110 $515

$3,800 1,886 28 337 $170 $933 $1,945 $474

$2,009 1,161 15 387 $167 $921 $1,919 $468

$344 2,085 18 579 $24 $131 $274 $67

Total for 26 mines: $1,185,694 $289,179

Total for 46 mines, based on the average savings per mine for 26 mines: $2,097,766 $511,624

* Projected disturbance acres divided by project mine life * 5

** Bond amount * ratio of permit period to total disturbance acres * 25% released at Phase 2

*** Phase 2 bond release * $5.50 per $1,000 bond value surety fee

@Present value of avoided annual surety costs in years 11 through 15, discounted at 7 percent

†Annualized over 5 years at 5 percent
4-18

4.2.5 Total Compliance Costs for the Western Alkaline Coal Mining Subcategory

The estimated net savings in compliance costs associated with the proposed subcategory, considering

additional modeling costs and the savings to mining operations in sediment control and bonding costs, is

estimated to be approximately $31.0 million, as shown in Table 4-9. 

Table 4-9: Annual Costs and Cost Savings for the Western

Alkaline Coal Mining Subcategory 

Incremental Modeling Costs $ 327,500

Sediment Control Costs (Savings) ($ 30,835,000)

Earlier Phase 2 Bond Release

(Savings) 

($ 349,000 - $ 511,500)

Total Compliance Costs

(Savings)

($ 30,857,000 - $ 31,019,000)

4.3 Summary of Compliance Costs

Table 4-10 summarizes EPA's estimates of the compliance costs and cost savings associated with the

proposed rule. These costs are before-tax changes in costs incurred by the mine operations eligible for the

two proposed subcategories.

Table 4-10: Summary of Estimated Annual Compliance Costs and Cost Savings 

Remining Subcategory:

< Monitoring Costs

< Additional BMP Effort

Subtotal

 $133,500 - $193,500

$199,500 - $565,000

$ 333,000 - $758,500

Western Alkaline Coal Mining Subcategory

< Incremental Modeling Costs

< Sediment Control Costs (Savings) 

< Earlier Phase 2 Bond Release (Savings)

Subtotal

$327,500

($30,835,000)

($349,000)-($511,500)

($30,857,000)-($31,019,000)

Total Compliance Costs (Net Savings) ($30,098,000 - $30,686,000)
5-1

Chapter 5

Industry Impacts

5.0 Introduction

This chapter presents EPA's analysis of the economic impacts to the coal mining industry as a result of

compliance with the proposed rule. The analysis considers expected impacts on the profitability of coal

mining projects at the mine and company level, and supports the Agency's findings about the economic

achievability of the proposed rule. EPA assessed the potential for significant industry-level changes in coal

production, prices, and employment by comparing estimated costs, cost savings, and direct changes in

employment under the proposed rule with current industry levels. This chapter also examines the potential

impacts on small coal mining firms and on new sources, and assesses whether the proposed rule has the

potential to create disproportionate impacts for these two categories. 

5.1 Impacts of the Coal Remining Subcategory

5.1.1 Methodology

EPA is required to assess the economic achievability of effluent limitations guidelines and standards that

are based on the best available technology economically achievable (BAT). To assess the economic

achievability of the requirements, EPA assesses the expected impacts on the profitability of the potentially

affected facilities, the firms that own these facilities, and the directly-affected industry as a whole. 

Requirements that may result in significant numbers of facility or firm closures, or that may otherwise

cause significant reductions in financial returns to the affected economic activities, may be deemed to be

economically unachievable.

EPA believes that the proposed option will not impact existing Rahall-type permits with established BPJ

limitations. EPA believes that it may not be feasible for a remining operator to re-establish baseline

pollutant levels during active remining. Therefore, EPA is considering an alternative where pre-existing

discharges at these operations would remain subject to baseline pollutant levels established during the

original permit application. For purposes of this economic analysis, EPA assumes that this alternative 
5-2

will apply. Thus, the proposed rule will not have any economic impacts on operations under existing

Rahall-type permits. For new permits, remining operators will have the opportunity to assess the overall

economic return to remining in compliance with the proposed requirements before investing at a remining

site. 

The proposed rule will encourage remining by reducing uncertainty about Clean Water Act requirements

for remining sites. The rule will reduce uncertainty about the steps that must be taken for a permit to be

approved in two ways: (1) by clarifying procedures to establish baseline conditions and monitor for

compliance with permit requirements, and (2) by providing guidance on the use of BMPs in a pollution

abatement plan to achieve the proposed requirements (see U.S. EPA, 2000d). EPA expects that the rule

will create opportunities for profitable remining at additional AML sites, particularly those with preexisting discharges. 

The methods used to assess the economic achievability of the proposed Coal Remining Subcategory differ

from approaches EPA has used in analyses for other rules because EPA believes that the proposed

remining requirements will only affect new remining permits. Hence, information needed to quantify the

economic impacts to industry in terms of facility closures or impacts to firm financial ratios is not

available. Alternatively, EPA compared the potential added costs of the proposed requirements with the

current price of coal produced from the Appalachian region to provide a measure of economic impacts. 

Where additional requirements imposed by the proposed subcategory represent only a small percentage of

the price received for coal, EPA concludes that the proposed requirements will not have a significant

economic impact on potential remining projects. EPA also evaluated the relative costs imposed on mines

owned by small entities to assess the potential for differential impacts.

5.1.2 Results

EPA expects that the proposed rule will create increased economic incentives for remining by increasing 

the expected returns to remining sites with pre-existing discharges. The use of standard procedures to

characterize baseline conditions and demonstrate compliance, and EPA’s guidance on the use and

performance of BMPs (see U.S. EPA, 2000d) will reduce the uncertainties associated with remining sites

containing pre-existing discharges. Currently, companies in some states face substantial uncertainty 

about permit requirements, and about their ability to demonstrate compliance with Rahall requirements 

for pre-existing discharges. Profit-maximizing investors require higher expected returns to justify the 
5-3

additional risk of investments with uncertain outcomes. Therefore, some sites that would otherwise provide

acceptable returns to remining, if not subject to uncertainty, are not currently remined. Based on

Pennsylvania’s experience with its standardized remining permit program, EPA expects the reduced

uncertainty provided by the proposed rule to make additional sites with pre-existing discharges attractive

for remining investments. 

As discussed in Chapter 4, the only potential costs imposed by the proposed rule are: (1) costs associated

with additional monitoring where the proposed requirements exceed current state requirements for Rahall

permits; and (2) potential costs associated with implementing the required pollution abatement plan (i.e.,

additional BMP requirements beyond what is included in a SMCRA-approved pollution abatement plan at

some sites). The following sections compare these additional costs with the average price of Appalachian

coal as a basis for assessing the economic achievability of these requirements. 

Impact of Additional Monitoring Costs

An analysis by the Department of Energy of potential remining sites estimated an average coal recovery of

between 2,300 and 3,300 ton per acre of remined land (Veil, 1993). At these coal recovery rates, the

estimated steady state annual increase in acres being remined would produce between 7.1 and 14.5 million

tons of coal per year. This represents only 1.5 to 3.1 percent of total 1997 Appalachian coal production of

468 million tons. Table 5-1 shows the estimated annual incremental monitoring costs per ton of coal from

remining sites for the states that have the potential to require increased monitoring.
11EPA did not have data on existing monitoring requirements for these states because their

remining operations do not incorporate Rahall provisions. EPA conservatively estimated incremental costs

based on: 12 baseline samples; 12 compliance monitoring samples per year for five years; and four new

flow weirs per site. 

5-4

Table 5-1: Impact of Increased Annual Monitoring Costs Per Ton of Coal Mined

Annual

Monitoring

Costs *

Acreage in

Remining per

Year **

Tons of Coal

Produced***

Average

Monitoring

Cost per Ton

IN $55,104 211 485,300 $0.11

KY $9,024 276 634,800 $0.01

OH $37,600 3,183 7,320,900 $0.01

TN $91,840 391 899,300 $0.10

Total $193,568 4,061 9,340,300 $0.02

* Table 4-2, high estimate.

** Table 3-1, high estimate. 

*** Based on an average 2,300 tons of coal recovered per acre remined, the low end of the range estimated by DOE

(2,300 - 3,000 tons per acre). See Veil, 1993. 

Because the estimates shown in Table 5-1 are based on the highest compliance monitoring cost estimates

and the low-end estimates of tonnage of coal produced, they represent an upper-bound estimate of the

economic impacts.

Under these worst-case assumptions, additional monitoring costs could represent as much as $0.10 to

$0.11 per ton remined, due primarily to the very conservative assumptions used to estimate incremental

monitoring costs for Indiana and Tennessee.11 However, even these worst-case estimates represent less

than one-half of one percent of the 1997 average price of $26.55 per ton of coal mined in the Appalachian

region (DOE/EIA, 1997). These findings suggest that the proposed incremental monitoring requirements

will not deter investments in remining projects. 

Impact of Pollution Abatement Plan Costs

As discussed in Chapter 4, EPA believes that the requirements for the pollution abatement plan will be

satisfied by an approved SMCRA plan. However, EPA recognizes that additional BMP costs may be

incurred under some new remining permits, potentially reducing expected returns on investments. EPA's
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high estimate of additional BMP costs assumes that 438 acres per year would require additional alkaline

materials, at an annual cost of $565,000. If these acres produced 1,074,000 tons of coal per year

(assuming the low-end DOE estimate of 2,300 tons per acre in Veil, 1993), the additional BMP costs

would represent only 5.6 cents per ton of coal recovered. This added cost represents only two-tenths of one

percent of the 1997 average price of $26.55 per ton of coal mined in the Appalachian region (DOE/EIA,

1997). These additional BMPs would be required by NPDES permit writers only where necessary to meet

Clean Water Act requirements. Any additional BMPs required will be site-specific, with economic

achievability considered in BPJ determination. 

EPA recognizes that some of the existing AML sites may not be profitable to remine, either under current

conditions or under the proposed requirements. However, new remining operators will have the

opportunity to choose among potential remining sites, and will only select sites that they believe are

economically achievable to remine.

5.1.3 Impacts on Small Firms

The Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act of

1996 (SBREFA) generally requires an agency to prepare a regulatory flexibility analysis for any rule

subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any

other statute unless the agency certifies that the rule will not have a significant economic impact on a

substantial number of small entities. An agency may certify that a rule will not have a significant economic

impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a

positive effect on all small entities subject to the rule.

For purposes of this analysis, small entity is defined as: (1) a small business that has 500 or fewer

employees (based on SBA size standards); (2) a small governmental jurisdiction that is a government of a

city, county, town, school district or special district with a population less than 50,000; and (3) a small

organization that is any not-for-profit enterprise which is independently owned and operated and is not

dominant in its field.

As discussed in Chapter 1, the current regulations at 40 CFR 434 create a disincentive for remining by

imposing limitations on pre-existing discharges for which compliance is cost prohibitive. Despite the

statutory authority provided by the Rahall Amendment, coal mining companies and states remain hesitant

to pursue remining without formal EPA guidelines. The proposed Coal Remining Subcategory provides
5-6

standardized procedures for developing effluent limits for pre-existing discharges, thereby reducing the

uncertainty involved in interpreting and implementing current Rahall requirements. The proposed

subcategory is intended to remove barriers to the permitting of remining sites with pre-existing discharges,

and is therefore expected to encourage remining activities by small entities. Thus, the Agency concludes

that the proposed subcategory will relieve regulatory burden for all small entities and thereby certifies that

the proposed subcategory will not have a significant economic impact on a substantial number of small

entities. 

Furthermore, EPA believes that the proposed subcategory is likely to create opportunities for small firms. 

As described in EPA’s Coal Remining and Western Alkaline Mining: Economic and Environmental

Profile, 95 percent of the firms owning coal mines in the Appalachian states are small firms as defined by

the Small Business Administration (firms with 500 or fewer employees). Furthermore, these small firms

own an estimated 74 percent of the coal mines in the Appalachian region. It is likely that firms applying

for new remining permits will be similar to, or the same as, those already active in the region. According to

an OSM source, "Quite likely, most remining related reclamation activities will be economically feasible

now and in the future only for small coal operators or, alternately, where the AML are located adjacent to

previously unmined lands containing coal” (U.S. DOI, undated). This is because many of the available

remining locations are within fragmented and relatively small sites. While small firms may be more likely

to apply for permits under the proposed subcategory than large firms, the proposed rule itself does not

create any particular advantage for small or large firms. The incremental compliance costs are likely to

vary with the size and complexity of the remining site, but not with firm size per se. 

5.2 Impacts of the Western Alkaline Coal Mining Subcategory

5.2.1 Methodology

EPA developed estimates of expected annual costs and savings associated with the proposed Western

Alkaline Coal Mining Subcategory as discussed in Chapter 4. Since the proposed subcategory results in

net cost savings to existing mine operations, it is inherently economically achievable. Nonetheless, EPA

estimated changes in labor requirements attributed to the proposed rule and examined potential impacts on

coal prices. It is important to note that there is significant variability in EPA's estimates for individual

mine operations. The estimates rely on extrapolating from the model mine results using a variety of

assumptions about the timing and pace of reclamation and bond release at each site. In reality, many of 
5-7

the variables that affect employment and cost savings differ significantly among individual mining

operations. Nonetheless, the calculations provide some indication of the potential economic impacts of the

proposed rule on western alkaline coal mines. 

5.2.2 Results

As discussed in Chapter 1, EPA is proposing BPT, BAT, and NSPS limitations that have an equivalent

technical basis for the Western Alkaline Coal Mining Subcategory. EPA concludes that nearly all

economic impacts are positive and finds the proposed subcategory to be a cost savings to the industry and

thus, economically achievable. Because reclamation costs under the proposal will be less than or equal to

those under the existing effluent guidelines for all individual operators (thus, to the subcategory as a

whole), no facility closures or direct job losses associated with post-compliance closure are expected. 

However, EPA estimated changes in labor requirements attributed to the proposed subcategory by

extrapolating from the model mine results, which calculated changes in labor hours associated with changes

in the types of erosion and sediment control structures used. The results indicate that the proposed

subcategory would reduce annual labor requirements by approximately 0.2 work years for the model mine. 

EPA assumed that each of the 46 western alkaline surface mines would experience the same employment

impact as predicted by the model mine study, resulting in the loss of 9.2 full-time employees (FTEs) per

year. This represents 0.1 percent of the total 1997 coal mine employment (6,862 FTEs) in the western

alkaline region states.

The cost savings associated with the proposed subcategory are not expected to have a substantial impact on

the industry average cost of mining per ton of coal, and are therefore not expected to have a major impact

on coal prices. While the savings are substantial in aggregate (and for some individual mine operators), on

average the savings represent a small portion of the total value of coal produced by the affected mines. 

Table 5-2 compares the estimated cost savings with the value of current annual production for the 25

surface mines for which enough information was available to estimate both sediment control savings and

bond release savings. The analysis ignores potential additional modeling costs incurred at some sites, and

therefore represents an upper-bound estimate of savings. On average, the estimated cost savings are 6

cents per ton, equivalent to only 0.6 percent of the value of production. As with the Coal Remining

Subcategory, the proposed Western Alkaline Coal Mining Subcategory is not expected to result in

significant industry-level changes in coal production or prices.
5-8

5.2.3 Impacts on Small Firms

The Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act of

1996 (SBREFA) generally requires an agency to prepare a regulatory flexibility analysis for any rule

subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any

other statute unless the agency certifies that the rule will not have a significant economic impact on a

substantial number of small entities. For purposes of this analysis, small entity is defined as: (1) a small

business that has 500 or fewer employees (based on SBA size standards); (2) a small governmental

jurisdiction that is a government of a city, county, town, school district or special district with a population

less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently

owned and operated and is not dominant in its field. 

In determining whether a rule has significant economic impact on a substantial number of small entities, the

impact of concern is any significant adverse economic impact on small entities, since the primary purpose

of the regulatory flexibility analysis is to identify and address regulatory alternatives “which minimize any

significant economic impact of the proposed rule on small entities” (5 U.S.C. sections 603 and 604). Thus,

an agency may certify that a rule will not have a significant economic impact on a substantial number of

small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the

small entities subject to the rule. 

EPA projects that the proposed subcategory will result in cost savings for all small surface mining

operators. For all small underground mine operators, EPA projects no incremental costs, and the Agency

believes that many are likely to experience some cost savings. Chapter 4 discusses the likely cost savings

associated with the subcategory in more detail. Thus, the Agency concludes that the proposed subcategory

will not have a significant economic impact on a substantial number of small entities. 

5.2.4 Impacts on New Sources

EPA is proposing NSPS limitations equivalent to the limitations that are proposed for BPT and BAT 

for the subcategory. In general, EPA believes that new sources will be able to comply at costs that are

similar to or less than the costs for existing sources, because new sources can apply control technologies

more efficiently than sources that need to retrofit for those technologies. In this case, new sources 

would be able to avoid costs associated with installing sedimentation ponds. There is nothing about the 
5-9

proposed rule that would give existing operators a cost advantage over new mine operators; therefore,

NSPS limitations will not present a barrier to entry for new facilities.

Table 5-2: Estimated Savings to Western Surface Mines, Per Ton and as a Percent of Current Annual

Production Value, Selected Mines

Annual

Reclamation

Savings ($)

Annual Bond

Savings

(mid-point

estimate) ($)

Total Savings

Per Year ($)

Annual

Production

(000 tons)

Annual

Value of

Production

(000 $)

Savings

per Ton

($)

Savings as

% of

Value

$2,127,384 $3,036 $2,130,420 4,634 $116,638 $0 1.8%

$2,403,597 $19,557 $2,423,154 7,090 $178,455 $0 1.4%

$420,052 $2,939 $422,991 5,544 $102,342 $0 0.4%

$694,575 $3,398 $697,973 2,002 $36,957 $0 1.9%

$147,000 $16,872 $163,872 4,335 $42,656 $0 0.4%

$540,477 $14,952 $555,429 117,000 $1,151,280 $0 0.0%

$77,175 $433 $77,608 330 $3,333 $0 2.3%

$465,385 $7,261 $472,646 9,015 $88,708 $0 0.5%

$204,330 $57 $204,387 2,375 $51,846 $0 0.4%

$664,440 $5,731 $670,171 4,900 $106,967 $0 0.6%

$668,262 $30,370 $698,632 6,607 $144,231 $0 0.5%

$1,078,000 $18,123 $1,096,123 8,200 $213,200 $0 0.5%

$609,168 $8,164 $617,332 4,072 $88,892 $0 0.7%

$506,856 $6,062 $512,918 13,559 $81,354 $0 0.6%

$894,642 $14,719 $909,361 50,000 $300,000 $0 0.3%

$835,506 $9,836 $845,342 14,681 $88,086 $0 1.0%

$916,650 $10,502 $927,152 13,324 $79,944 $0 1.2%

$392,000 $19,931 $411,931 4,200 $37,800 $0 1.1%

$118,818 $399 $119,217 1,005 $6,030 $0 2.0%

$965,143 $9,267 $974,410 27,113 $162,678 $0 0.6%

$735,870 $17,562 $753,432 6,231 $37,386 $0 2.0%

$336,517 $5,295 $341,812 4,402 $26,412 $0 1.3%

$847,455 $6,844 $854,299 600 $3,600 $1 23.7%

$525,672 $6,110 $531,782 500 $3,000 $1 17.7%

$117,361 $5,366 $122,727 3,242 $19,452 $0 0.6%

Total $17,292,335 $242,786 $17,535,121 314,961 $3,171,247 $0 0.6%

12The estimated number of hours required per permit and the average hourly rate for staff review

are consistent with those used in the ICR for the proposed rule (U.S. EPA, 2000b).

6-1

Chapter 6

Additional Economic Impacts

6.0 Introduction

This chapter discusses three additional categories of potential economic impacts attributed to the proposed

rule. The chapter first estimates costs that may be incurred by NPDES permitting authorities to review

permit applications under the proposed rule. The chapter then discusses potential impacts on communities

(due to potential impacts on employment), and potential foreign trade impacts.

6.1 Costs to the NPDES Permitting Authority

Additional costs will be incurred by the NPDES permitting authority to review new permit applications and

issue revised permits based on the proposed rule. Reviewers will incur additional costs because permit

applications under the proposed rule will require more time to review than would an existing permit on the

five-year review cycle. Under the proposed rule, NPDES permitting authorities will review baseline

monitoring results and proposed pollution abatement plans for the Coal Remining Subcategory, and

watershed modeling results and sediment control plans for the Western Alkaline Coal Mining Subcategory. 

EPA estimates that permit review will require an average of 35 hours of a permit writer’s time per site. 

This includes 25 hours per plan review (based on OSM’s estimated SMCRA burden for review of

reclamation plans) plus 10 hours per plan for NPDES permit preparation. EPA assumes that permit

writers receive an hourly wage of $31.68. The average annual salary rate reported by the U.S. Department

of Labor for state and local government employees is $41,185, or $19.80 per hour for 2,080 available

labor hours per year. EPA estimates that overhead costs for state and local government employees are 60

percent of the direct labor cost. The total loaded hourly rate is therefore $31.68 (1.6*$19.80). At this rate,

each permit would cost $1,109.12
13Remining estimates were based on the annual number of permits reviewed; hence, costs did not

need to be annualized.

6-2

Based on these assumptions, total annual costs to the NPDES permitting authorities range from $47,500 to

$67,500 for the 43 to 61 additional sites expected to be permitted each year under the proposed Coal

Remining Subcategory.13 An upper bound estimate of costs associated with implementing the proposed

Western Alkaline Coal Mining Subcategory assumes that all 46 existing surface mine permits are renewed

at one time. The total incremental annual cost would be $12,500 when annualized over the 5-year permit

life. Total incremental NPDES permit review costs for the proposed rule are therefore estimated to be

between $60,000 and $80,000 per year. 

6.2 Community Impacts

The proposed rule could have community-level and regional impacts if it significantly altered the

competitive position of coal produced in different regions of the country, or led to growth or reductions in

employment in different regions and communities. As described in Chapter 3, there has been a long-term

trend toward higher production in the West and a decline in coal employment in the Appalachian region. 

The proposed rule is not likely to have significant impacts on relative coal production in the West versus

the East. The proposed Coal Remining Subcategory may shift the location of production and employment

toward eligible abandoned mine lands, but is not likely to increase national coal production or affect coal

prices significantly overall. Furthermore, the projected cost savings to western mine operators do not

represent a large portion of the value of western coal production, and therefore are not likely to result in a

significant change in the relative cost advantage of western verses eastern production.

EPA projects that impacts of the proposed rule on coal mine employment will also be minor. Increased

remining might create new employment opportunities in some locations. If total coal production from

remining sites were to increase by the estimated 1.2 to 2.9 percent, employment in the affected regions

could also experience similar increases. However, it is possible that much of the increase in coal

production from remining will displace production elsewhere, with offsetting decreases in employment at

other locations. The proposed subcategory may shift the location of production and employment toward

eligible abandoned mine lands, but is not likely to increase coal production and employment or affect coal

prices significantly overall.
6-3

As discussed in Chapter 5, EPA estimated a reduction in labor requirements of 9.2 FTEs per year for the

proposed Western Alkaline Coal Mining Subcategory by extrapolating from the model mine results. This

represents 0.1 percent of the 6,862 total 1997 coal mine employment in the western alkaline region states. 

Regional multipliers relating total direct and indirect employment to coal industry employment range from

2.6 to 3.2 for the western alkaline states (U.S. Bureau of Economic Analysis, RIMSII). Therefore, the

total impact on employment, direct and indirect, that may result from the proposed Western Alkaline Coal

Mining Subcategory is a reduction of about 24 to 29 FTEs per year. This reduction in employment might

be offset if lower costs under the proposed subcategory encourage growth in coal mining in the western

alkaline region.

6.3 Foreign Trade Impacts

EPA does not expect any foreign trade impacts as a result of the proposed rule. U.S. coal exports consist

primarily of Appalachian bituminous coal, especially from West Virginia, Virginia and Kentucky. Coal

imports to the U.S. are insignificant (DOE/EIA, 1995; DOE/EIA, 1997). The proposed rule could

encourage additional exports, with a positive impact on the U.S. balance of trade, if coal from expanded

remining in the Appalachian region found markets overseas. Impacts are difficult to predict, however,

since coal exports are determined by economic conditions in foreign markets and changes in the

international exchange rate for the U.S. dollar. The impacts on foreign trade are likely to be small, given

the relatively small projected increase in production from increased remining.

7-1

Chapter 7

Cost-Effectiveness

Cost-effectiveness calculations are used during the development of effluent limitations guidelines and

standards to compare the efficiency of regulatory options in removing toxic and non-conventional

pollutants. Cost-effectiveness is calculated as the incremental annual cost of a pollution control option per

incremental pollutant removal. The increments are considered relative to another option or to a benchmark,

such as existing treatment. In cost-effectiveness analysis, pollutant removals are measured in toxicity

normalized units called “pounds-equivalent.” The cost-effectiveness value, therefore, represents the unit

cost of removing an additional pound-equivalent of pollutants. In general, the lower the cost-effectiveness

value, the more cost-efficient the regulation will be in removing pollutants, taking into account their

toxicity. While not required by the Clean Water Act, cost-effectiveness analysis is a useful tool for

evaluating regulatory options for the removal of toxic pollutants.

While cost-effectiveness results are usually reported with the economic analysis for effluent guidelines,

such results are not presented in this report because of the nature of the two subcategories. For the Coal

Remining Subcategory, EPA is unable to predict pollutant reductions that would be achieved at future

remining operations. It is difficult to project the results, in terms of measured improvements in pollutant

discharges, that will be produced through the application of any given BMP or group of BMPs at a

particular site. EPA is therefore unable to calculate cost-effectiveness. For the Western Alkaline Coal

Mining Subcategory, cost-effectiveness was not calculated because there are no incremental costs

attributed to the proposed option.

8-1

Chapter 8

 Environmental Impacts and Benefits

8.0 Introduction

EPA analyzed the adverse environmental impacts of current practices as a basis for assessing the

incremental environmental impacts of the proposed rule. These baseline impacts were discussed previously

in the EA. This chapter describes the methodologies EPA used to assess the environmental improvements

that will result from implementation of the proposed rule. EPA was able to quantify these environmental

improvements for some categories of benefits, and estimate their value using benefits transfer techniques

described below.

 

The analyses summarized in this chapter are described in detail in Benefits Assessment of Proposed

Effluent Limitations Guidelines and Standards for the Coal Mining Industry: Remining and Western

Alkaline Subcategories (hereafter referred to as the “Benefits Assessment”; U.S. EPA, 2000a).

8.1 Coal Remining Subcategory

8.1.1 Environmental Impacts of AML

Appalachia has been the site of substantial coal mining historically, and much of this mining took place

before passage of laws regulating the environmental impacts of coal mining. The result is an environmental

legacy that includes more than a million acres of abandoned mine lands (AML). Abandoned mine lands are

associated with a wide range of public health and safety problems and aesthetic degradation, including

abandoned mine openings, highwalls, unstable spoil piles, and hazardous water bodies. In addition, acid

mine drainage (AMD) from AML causes serious water quality problems. AMD is highly acidic, and may

contain high levels of dissolved metals or salts. Common AMD contaminants include total suspended

solids (TSS), iron (Fe), manganese (Mn), and aluminum (Al). AMD may contaminate groundwater and/or

run off directly into adjacent streams or creeks.

Acidity from AMD influences chemical reactions in receiving streams. Some of these reactions increase

the toxicity of other pollutants. For example, aluminum in combination with low pH can exacerbate the
14The complete list of statistical results are provided in Appendix B of the Benefits Assessment

(U.S. EPA, 2000a).

8-2

toxicity of aluminum alone and therefore represent an additional stress to aquatic receptors. Other

reactions result in aesthetic degradation of the surface water. Dissolved iron can coat banks and stream

bottoms with a rusty, brownish-red discoloration. Iron and aluminum oxides will precipitate out of solution

at higher pHs and can make the water cloudy or cover the stream bottom with a layer of colloidal material. 

Such conditions are unaesthetic.

Acidity alone or in combination with high levels of metals, dissolved solids, and suspended solids affects

sensitive life stages of fish and invertebrate species. The most sensitive vertebrate and invertebrate species

die off at pH between 6.0 and 6.5. Most fish species are eliminated when pH reaches 5.0, and only a few

can survive at pH 4.5. Over time, the diversity of the aquatic communities may decrease downstream from

AMD discharges. 

8.1.2 Impacts of Remining on Environmental Quality

EPA's benefits analysis included an evaluation of the environmental impacts of remining best management

practices on land and water resources using data contained in EPA’s Coal Remining Database (U.S. EPA,

1999a). EPA used only those mines that had both baseline and active remining or post-remining (postbaseline) data to assess the potential impacts of remining BMPs on water quality. Complete information on

mine discharges was available for 13 mines. These 13 mines were associated with 42 pre-existing

discharges. In addition, EPA used information on 105 remining permits issued for the bituminous region in

Pennsylvania to assess benefits from improved landscape quality and enhanced public safety stemming

from remining and subsequent reclamation of AML (Hawkins, 1995).

EPA performed statistical analyses to evaluate the effect of remining on water quality at the 13 remining

sites for which sufficient water quality information was available.14 Approximately 24 to 38 percent

showed a statistically significant decrease in pollutant levels for acidity, total aluminum, total iron, and

sulfate. Flow significantly decreased for 35 percent of the post-baseline observations. The mine locations

examined in this analysis are active remining operations, and decreases in pollutant levels are expected to

become more significant with time.
15One constituent, aluminum, has a potential to bioaccumulate in aquatic biota. However, EPA has

established oral RfDs for aluminum phosphide only; no RfDs for other aluminum compounds (i.e.,

aluminum compounds found in AMD) are available.

16A secondary drinking water standard is set for sulfate, which is not enforceable. (See Table A-4

of Appendix A to U.S. EPA, 2000a.) Recent health studies indicate that sulfate may cause diarrhea. 

Epidemiological data are not conclusive, however.

8-3

EPA compared findings from the analysis with those from a Pennsylvania study of remining sites. The

Pennsylvania Remining Site Study of 112 closed remining sites is summarized in EPA’s Coal Remining

Best Management Practices Guidance Manual (U.S. EPA, 2000d). The Pennsylvania study focused on

sites that had been reclaimed to at least Stage II bond release, and therefore reflects the effects of BMPs

more fully than the EPA’s analysis. The Pennsylvania study found significant decreases or elimination of

levels for acidity, total iron, total manganese, and total aluminum in 44 percent, 42 percent, 41 percent, and

38 percent respectively, of the pre-existing discharges monitored. 

EPA identified three broad categories of potential benefits from increased remining: (1) improvements in

human health and public safety; (2) ecological benefits; and (3) economic productivity benefits. Remining

can generate human health benefits by reducing the risk of injury at AML sites and reducing discharge of

acid mine drainage to waterways from which water is taken for human consumption. However, the human

health benefits associated with consumption of water and organisms taken from the water bodies affected

by AMD are unlikely to be significant because: (1) most acid mine drainage constituents are not

bioaccumulative, and therefore adverse health effects associated with fish consumption are not expected;15

and (2) public drinking water sources are treated for most acid mine drainage constituents that are

associated with adverse health effects.16 Improving public safety is a significant benefit of remining. 

Eliminating safety hazards by closing abandoned mine openings, regrading highwalls, stabilizing unstable

spoils, and removing hazardous water bodies potentially prevents injuries and saves lives.

Remining and the associated reclamation of AML is expected to generate ecological and recreational

benefits by improving terrestrial wildlife habitat and reducing pollutant concentrations below levels that

adversely affect aquatic biota. Remining is also likely to improve the aesthetic quality of land and water

resources. Finally, remining and reclamation of AML sites may result in several economic productivity

benefits, including reduced drinking water treatment costs and enhanced commercial potential of the

affected areas.
17 The studies reviewed by EPA and the criteria used to select studies for the benefits transfer

analysis are described in the Benefits Assessment document (U.S. EPA, 2000a).

8-4

8.1.3 Methodology for Estimating Benefits

EPA was able to quantify some of the benefits expected from increased remining, and was able to monetize

some of the quantified benefits using benefits transfer techniques. Benefits transfer involves use of the

results of previous benefits analyses that estimate consumers’ willingness to pay (WTP) for various

improvements in environmental quality. EPA applied WTP values from previous studies of similar

environmental improvements to estimate the value of improved environmental conditions at remining sites

under the proposed rule. EPA reviewed six candidate studies to support valuation of recreational use,

passive use, and drinking water treatment benefits at remining sites, and selected two of the studies for use

in this analysis.17 

The first is a study of surface mine reclamation in Appalachia by Randall et al. (1978). The study

estimates the total annual value of environmental damage and the present value of water-related damage

from disturbing land for coal mining. For analyzing impacts of the proposed rule, EPA assumes that the

benefits from AML reclamation can be equated to the value of reversing environmental damages from

disturbing land surfaces. EPA used a study by Feather et al. (1999) to assess various categories of landrelated benefits from remining. The study focuses on improved recreational opportunities for hunting and

nature viewing due to preservation of wildlife habitats.

EPA estimated the total monetary value of ecological benefits from remining by summing over each benefit

category from Randall et al. (1978) and Feather et al. (1999) deemed applicable to remining. Based on

these studies, benefits associated with reclamation of AML sites are estimated as follows:

• Estimate the percentage of additional acres expected to experience significant decreases

in AMD pollutant levels. EPA estimates that 38% to 44% of AML acres affected by

remining would experience significant decreases in AMD pollutant levels. Thus, 667 to

1,115 of the projected 1,773 to 2,512 additional AML acres reclaimed per year will

experience significant decreases in AMD pollutant levels. In-stream water quality

improvements are assumed to occur as a result of decreases in pollutant levels. 
18EPA identified 402 Priority 3 problem areas with water quality problems in the Appalachian

region, excluding Pennsylvania (U.S. DOI, 1998b). An average problem area is 15 acres and contains

1,055 feet of highwall. Remining sites affected by the proposed rule are therefore assumed to have 70 feet

of highwall removed per acre reclaimed. 

8-5

• Estimate benefit values using benefits transfer techniques. EPA applied WTP values

from the two studies to estimate the value of the environmental improvements expected to

result from the proposed subcategory.

• Estimate the annual monetized environmental benefits. To estimate total annual benefits,

the Agency calculated the present value of the stream of environmental benefits from AML

sites beginning remining each year. EPA assumes that annualized benefits from remining

begin to occur five years after permit issuance and are calculated for a five year period. 

8.1.4 Results

Human Health Benefits

As noted above, EPA expects that the most significant human health benefits will result from the

elimination of safety hazards (e.g., removal of highwalls). The Agency estimated that AML sites with preexisting discharges have an average of 70 highwall feet per acre in the Appalachian coal region.18

Assuming that the proposed subcategory will increase acreage permitted for remining by 3,091 to 4,380

acres per year, EPA estimates that an additional 216,000 to 307,000 feet of highwall (41 to 58 mile) will

be targeted for removal each year. It is not possible to quantify or monetize human health benefits

associated with the additional highwall removal, because of a lack of information on the incidence of

accidents and human health impacts associated with unreclaimed highwalls. However, these benefits are

likely to be significant. For example, there are 305 AML problem areas in Pennsylvania where injury,

death, accident, or damage to property has been recorded (PA DEP, 1997). Ten deaths have been recorded

since 1952 at the Muddy Creek AML area (U.S. DOI, 1998a).
19All study values were adjusted to 1998$ based on the relative change in the Consumer Price

Index from 1976 to 1998 (2.89) and rounded to the nearest dollar.

8-6

Water-Related Benefits

Randall et al. (1978) analyzed the environmental damage from coal mining for a study area that

experienced both surface and underground mining. The regional population of the study area is about

80,000, with socioeconomic characteristics typical of the central Appalachian coal region (i.e., incomes are

lower and families are larger than the national average). The study identifies and estimates five mutually

exclusive categories of environmental damage associated with coal mining. EPA determined that three of

the damage categories were not directly applicable to remining. Therefore, EPA based the value of waterrelated benefits for remining on the two remaining damage categories19:

• Degradation of life-support systems for fish, wildlife, and recreation resources. The study

estimated recreational losses due to degradation of water quality for three recreational

activities -- fishing, boating, and swimming. First, the study estimated the reduction in

recreational use (days lost) of the affected water resources due to water quality

impairment. Then, the value of the recreation lost was estimated based on the user day

values (derived from a recreational demand model). In addition, regional fishing losses

were quantified based on an annual cost of fish replacement (i.e., the cost of purchasing

fish and restocking streams). The total recreational losses were estimated by summing

over the estimates of fish replacement cost and lost recreation values. This yielded an

estimate of $37 (1998$) per acre per year.

• Aesthetic damages to landscape and water. Aesthetic damages to water result from

increased stream siltation and discoloration of water by AMD. Aesthetic damages to the

landscape occur due to “drastic landscape modifications including exposed highwalls, flat

benches, mountaintop removal, and soil deposits.” Individual willingness to pay (WTP)

for improved aesthetic quality of landscape and water are derived from a contingent

valuation study. Based on the regional WTP for aesthetic improvements, the estimated

value of aesthetic damages from mining one acre of land is $140 (1998$) per year.
20The study used data form the National Survey of Fishing, Hunting, and Wildlife Associate

Recreation. The FHWAR survey collected information on demographic characteristics and recreation

behavior using a nationwide sample of 50,000 individuals.

8-7

Land-Related Benefits

Restoring the surface area at AML sites by removing mine shaft openings, refuse piles, and highwalls and

by vegetating surface areas will enhance sites’ appearance and improve wildlife habitats. Improvements in

wildlife habitats will increase species abundance and diversity by improving species productivity and

survivability. These changes are likely to increase the value of land for post-remining uses. Among the

post-reclamation uses reported for past mining areas are wildlife habitat, hunting preserves,

pasture/hayland, public park and open space for community use (Smith and Bridger, 1998). An increase in

the number and diversity of wildlife species, improved aesthetic quality, and availability of recreation

amenities (e.g., state parks) will enhance recreational activities such as hunting, wildlife viewing, biking,

hiking, and photography.

A recent study by Feather et al. (1999) develops a recreational demand model for pheasant hunting and

wildlife viewing, where demand is modeled as a function of landscape characteristics, including measures

of the level of undisturbed surface, forest land, landscape diversity, and urbanization.20 Based on findings

from this study, the annual per acre recreational values resulting from open space preservation are (1998$):
21Not applicable. Only negligible pheasant hunting occurs in these regions.

22The disparity in the wildlife viewing values is likely to result from the difference in the presence

of wildlife conservation areas, various intensities of recreation that occur in each region, and different

population density.

8-8

• Improved pheasant hunting:

The North Eastern Region (PA, DE, MD, and OH) -- $7.24 

The South Eastern Region (WV, VA, KY, and TN) -- N/A21

• Enhanced wildlife viewing:

The North Eastern Region (PA, DE, MD, and OH) -- $41.11

The South Eastern Region (WV, VA, KY, and TN) -- $1.54.22

The Coal Remining Subcategory is expected to provide incentives for remining in the North Eastern and

South Eastern region states. EPA estimates an aggregate land-based benefit value of $28 per acre per year

(the sum of the average enhanced wildlife viewing value of $21and the improved pheasant hunting value of

$7 for the North Eastern region).

Nonuse Benefits

Individuals who never visit or otherwise use a natural resource may nevertheless be affected by changes in

its status or quality. Empirical estimates indicate that such “nonuse value” may be substantial for some

resources (Harpman, 1993; Fisher and Raucher, 1984; Bergstrom, 1993). Because nonuse value is a

sizable component of the total economic value of water resources, EPA estimated changes in nonuse values

for water quality using a rule of thumb developed by Fisher and Raucher (1984). For this analysis, EPA

conservatively estimated that nonuse benefits compose one-half of water-related recreational use benefits. 

EPA estimates that the annual recreational use values associated with water-related benefits are

approximately $37 per acre, resulting in corresponding nonuse values of $19 per acre.
8-9

Total Annual Benefits

As shown in Table 8-1, EPA estimates that annual monetized benefits range from approximately $0.70 to

$1.2 million using a 3 percent discount rate, and between $0.6 and $0.9 million using a 7 percent discount

rate.

Table 8-1: Summary of Benefit Estimates for the Coal Remining Subcategory

Benefit Source

Additional

Acres AML

reclaimed/year1

Annual

Present

Value from

Literature2

Estimated Present Value

of Benefits from

Remining Permits

Issued Each Year

(r=3%)3, 4

Estimated Present Value

of Benefits from

Remining Permits

Issued Each Year

(r=7%)3, 4

Recreational Use of

Improved Water Bodies

667 to 1,115 $37 $100,500 to $168,000 $77,000 to $129,000

Aesthetic Improvements

to Water Bodies

667 to 1,115 $140 $380,000 to $635,500 $292,000 to $488,500

Recreational Use of

Reclaimed Land

1,773 to 2,512 $28 $202,000 to $286,000 $155,000 to $220,000

Nonuse (Improved Water

Bodies)

667 to 1,115 $19 $51,500 to $86,000 $40,000 to $66,500

Total $734,000 to $1,175,500 $564,000 to $904,000

1. Assumes that implementation of the rule will result in an additional 3,111 to 4,407 acres of AML permitted for remining per year, that 57% of

those acres are actually reclaimed, and that significant water quality improvements will occur in 38% to 44% of the reclaimed acres.

2. Per acre per year ($1998). See text for literature sources for these values.

3. Benefits = { * } , where r=discount rate and benefits from remining begin to occur five years Acresreclaimed Value / {( r)^ (i )}

i

1 5

0

5

+ +

=

∑

after permit issuance (since the average life of a remining operation is 5 years). 

4. Numbers are rounded to the nearest $500.

In addition to the benefits EPA was able to monetize, the projected increase in remining is expected to

result in the removal of aproximately 216,000 to 307,000 feet of highwall each year, resulting in

substantial benefits associated with increased public safety. Other benefit categories that EPA was not able

to monetize include health and safety benefits, nonuse benefits related to reclaimed land, potential savings

in drinking water treatment costs, and secondary impacts from increases in tourism and recreation. 

Omissions, biases and uncertainties in the benefits estimates are discussed in more detail in the Benefits

Assessment (U.S. EPA, 2000a).
8-10

8.2 Western Alkaline Coal Mining Subcategory

8.2.1 Environmental Impacts from Western Mining

Affected western mines are located in arid and semiarid regions characterized by very low annual

precipitation. In arid and semiarid regions, the natural vegetative cover is sparse and rainfall is commonly

received during localized, high-intensity, short-duration storms. These conditions contribute to flash-floods

and turbulent flows that transport large amounts of sediment. Controlling sediment in areas that naturally

contain large amounts of sediment through the predominant use of sedimentation ponds can result in

numerous non-water quality impacts that harm the environment, including disturbing the natural hydrologic

balance, accelerating erosion, reducing groundwater recharge, reducing water availability, and impacting

large areas of land for pond construction. These impacts have the potential to disrupt fragile habitats and

sensitive hydrological features. To address these impacts, EPA is proposing to require coal mine operators

to implement BMPs so that post-mined lands are reclaimed to mimic natural conditions that were present

prior to mining activities.

Site-specific best management practices (BMPs) have the potential to conserve topsoil, control surface

erosion and sedimentation, increase vegetation density, and minimize disruption of fluvial stability by using

more holistic approaches to reducing sediment runoff, protecting water quality, and providing water

treatment and drainage control. BMPs may be used singly or in combination with sedimentation ponds to

control and minimize erosion and sedimentation from disturbed areas, thereby reducing the adverse

hydrologic impacts associated with the predominant use of sedimentation ponds. 

8.2.2 Potential Benefits Categories

EPA identified two categories of benefits associated with the proposed subcategory: ecological benefits and

economic productivity benefits. Ecological benefits result from improvements to habitats, ecosystems, or

general areas affected by an effluent or disturbed surface area. Although some ecological benefits will

have positive impacts on recreational use values (e.g., recreational fishing, hunting, wildlife viewing, etc.),

others are more likely to fall under the traditional nonuse benefit categories. Ecological benefits from

implementation of the proposed rule have two components:
8-11

• Land-related benefits: The potential land-related benefits arise from the reduced

disturbance of land area, increased soil conservation, and improved vegetation density. 

Use of BMPs will reduce the land area disturbed, resulting in terrestrial habitat 

protection and improvements in aesthetic quality. In addition, implementation of BMPs

enhances soil conservation and promotes vegetation growth and development within

reclamation areas. Enhanced vegetation cover improves terrestrial habitats and attracts

wild life, potentially resulting in increased species abundance and diversity in the affected

areas.

• Water-related benefits: The potential water-related benefits arise from the preservation 

of natural stream flows. Sedimentation ponds reduce flows to streams and underground

systems that feed surface waters, thereby reducing natural habitats for riparian and 

aquatic species and disturbing natural drainage settings. Ponds also reduce sediment

delivery downstream. In arid/semiarid western coal mining regions, climate, topography,

soils, vegetation and hydrologic components all combine to form a hydrologic balance 

that is naturally sediment rich. Eliminating sediment delivery is likely to disturb dynamic

fluvial systems that depend upon a continual source and flow of sediment. 

Implementation of BMPs can preserve a more natural sediment delivery. Improved

hydrological balance and an increase in water quantity is likely to have positive effects 

on aquatic and riparian life habitats. The use component of water-related ecological

benefits is likely to be insignificant, however, because many of the water bodies affected

by mining drainage are intermittent and ephemeral in nature and do not support waterbased recreation.

Implementation of the proposed subcategory may also generate economic productivity benefits. Because

construction and operation of sedimentation ponds has the potential to reduce the amount of surface 

runoff available for downstream users, an increase in the quantity of water available for downstream 

users is one of the most important benefits of BMP systems. For example, economic productivity gains 

are expected to occur through improved supply of irrigation water for agricultural uses, municipal 

drinking water, and industrial cooling water. Another possible economic productivity benefit from BMP

implementation is improved post-mining land use. In the arid/semiarid western United States, livestock

grazing is normally a part of the post-mining land use. Improved vegetation density resulting from 
23 Assumptions 1 and 2 are based on information contained in Section 4.2.1 of the WCMWG

model mine analysis (WCMWG, 1999a). 

8-12

implementation of BMPs is likely to increase productivity of the rangeland used for livestock grazing, and,

as a result, to increase the value of land for post-mining land uses.

8.2.3 Methodology and Results

This section describes the methodologies EPA used to quantify and monetize the benefits associated with

the proposed subcategory. EPA extrapolated from the WCMWG model mine analysis and industry profile

information to estimate the environmental improvements attributable to the proposed subcategory

(WCMWG, 1999a). EPA developed monetary estimates of these environmental impacts using the benefits

transfer techniques described below. 

Land-Related Benefits

EPA’s analysis of land-related benefits involves the following three steps:

(1) Estimate acres expected to avoid disturbance. Adopting the proposed subcategory is expected

to reduce surface disturbance area. EPA estimated the number of avoided disturbance acres using

the following assumptions: (1) on average, a sedimentation pond is required for every 127 acres of

reclaimed land; (2) on average, a sedimentation pond disturbs 12.2 acres of land; and (3) the total

annual surface disturbance from the 46 surface coal mines is 17,480 acres.23 Using the formula

below, EPA estimates that 1,679 acres of disturbance would be avoided each year under the

proposed subcategory.
24 This calculation is described earlier in Section 4.2.3 on page 4-10. Information on surface

disturbance for 26 surface mines provided by the WCMWG is used to calculate annual surface

disturbance. An average surface disturbance per mine per year was calculated by dividing the expected

total surface disturbance for each mine by the expected life of the mine. These values are averaged over 26

mines. The estimated average surface disturbance per mine per year is 380 acres. This estimated average

surface disturbance was used to estimate annual surface disturbance for the 20 sites for which WCMWG

did not provide information. Summing the estimates of annual surface disturbance over the 46 surface

western mines results in an annual surface disturbance of 17,860 acres.

25EPA adjusted the 1992 study value of $0.33 using the change in the Consumer Price Index from

1992 to 1998, yielding an estimate of $0.37 in 1998 dollars. 

8-13

TAAD ' (TASD/127 acres) × Pond Size

where:

TAAD = total annual avoided disturbance area (acres);

TASD = total annual surface disturbance area (17,480);24

Pond Size = average area disturbed per sedimentation pond (12.2 acres).

To value avoided disturbance area, EPA estimated a range of benefits associated with enhanced

hunting opportunities stemming from improved wildlife habitat using benefits transfer from two

wildlife habitat valuation studies. 

A study by Feather et al. (1999) provides a lower-bound estimate. The study develops a

recreational demand model for pheasant hunting, where demand is modeled as a function of

pheasant habitat characteristics, including a measure of undisturbed surface area at hunting sites. 

Undisturbed surface cover is regarded as a critical habitat characteristic because it provides good

nesting cover, insects for newly hatched chicks, and winter cover. The study estimated the annual

hunting benefits from increased availability of undisturbed open space at $0.37 ($1998) per acre in

the Pacific/Mountain region.25

A study by Scott et al. (1998) estimating various components of the natural shrub-steppe habitat

value provides an upper-bound estimate of recreational hunting benefits. The study uses a WTP

value for hunting shrub-steppe-dependent game birds to estimate a recreational element of the 

land preservation value. Data yielded an aggregate estimate of annual WTP of $8.2 million

(1998$) for game bird hunting in the study area, which has approximately 565,498 acres of land 
26Hunting licence data are obtained from the 1996 National Survey of Fishing, Hunting, and

Wildlife Associated recreation.

27Detailed calculations are contained in the Benefits Assessment (U.S. EPA, 2000a).

8-14

available for upland bird hunting. Dividing the aggregate WTP value by the estimate of bird

habitat acreage yields an estimate of $6.00 (1998$) per acre per year. EPA adjusted this value

according to the number of hunting licences sold in the states affected by western surface coal

mining,26 resulting in an annual per acre value of $2.46 (1998$).27

(2) Estimate of Increased Soil Conservation. The results from the WCMWG model mine analysis

demonstrate that the proposed subcategory is expected to promote soil conservation compared to

undisturbed conditions. The weighted average soil loss rate for the undisturbed slopes and slope

segments is 4.7 tons per acre per year; the weighted average soil loss rate for the post-mining

model mine reclamation area under the proposed subcategory is 3.0 tons per acre per year. This

difference represents a net change in estimated average soil loss rate of 1.7 tons per acre per year

from the undisturbed to post-mining reclaimed conditions. The soil loss rates for the reclaimed

area under the existing guidelines and proposed subcategory are essentially the same, since the

types and applications of slope stabilizing alternate sediment controls remains similar between

them. Therefore, EPA did not estimate soil conservation benefits.

(3) Estimate of Improved Vegetation. Arid/semiarid reclaimed plant communities tend to have

relatively low vegetation cover and productivity, particularly where annual rainfall is less than 9

inches per year. Total vegetation cover values frequently fall within the range of 5 percent to 20

percent. Yearly vegetation production tends to be low, with most reclaimed areas producing

between 500 and 1,000 pounds per acre annually. Increased focus on the use of BMPs would

enhance vegetation growth and community development on reclaimed lands compared to the

existing effluent guidelines. Typical vegetative cover in this area is only 5% to 20%. Vegetative

cover in a constructed drainage area (which is included in the model mine system) can be 25% or

more in absolute value. Thus, at least a 5% increase is expected for the drainage area (WCMWG,

1999a, Section 4.2.2).

Individual plant and vegetation community development is holistically linked to all of the factors in

the environment that influence plant germination, establishment, and growth. The WCMWG
8-15

model mine analysis indicates that the cumulative effect of BMPs can produce a synergistic benefit

to plant growth that favorably influences vegetation production. The most significant effects that

may promote an increase in vegetation density are summarized below:

• Improved soil moisture availability; 

• Decreased soil detachment and erosion; 

• Enhanced nutrient retention and availability; and

• Increased plant species diversity resulting from the use of a diverse seed mixture in the

reclamation process.

However, the WCMWG model mine analysis does not quantify changes in vegetation cover, and,

as a result, EPA did not quantify or monetize benefits from enhanced vegetation cover for the

proposed subcategory.

As shown in Table 8.2, the expected land benefits from the proposed subcategory that could be monetized

are small, most likely ranging from $5,500 to $36,500. However, the monetized value does not include a

number of benefit categories, most notably nonuse ecological benefits that may account for the major

portion of land benefits. 

Table 8-2: Annual Land Related Benefits from Western Alkaline Coal Mining Subcategory

Benefit Category Physical Measure

Per Acre Value

($1998) Total Value1

1. Avoided surface disturbance Decreases by 1,679

acres/year

$0.37

to

$2.47

$5,500

to

$36,500

2. Increased soil conservation Negligible --- ---

3. Improved vegetation Vegetative cover

Increases by 5%

Not available Not estimated

Total Monetized Land Benefits (1998$) $5,500

to

$36,500

1Numbers have been rounded to the nearest $500.
28EPA adjusted the study value of $65 (1990$) to 1998 dollars using the relative change in CPI

from 1990 to 1998 (1.25).

29For detail on drainage features associated with Western Alkaline Coal Mining Subcategory

mines, see Table F-3 in Appendix F of the Coal Remining and Western Alkaline Mining: Economic and

Environmental Profile (U.S. EPA, 1999e).

8-16

Water-Related Benefits

Implementation of the proposed subcategory is expected to yield water-related benefits to society by

improving hydrologic and fluvial stability in the watersheds affected by reclamation areas. EPA believes

that the use of BMPs will minimize disruptions to the hydrologic balance. Blockage of natural surface flow

would be minimized through establishment of a natural flow pattern from the reclamation area, and passage

of undisturbed area drainage through the reclaimed area in stable channels, essentially uninterrupted, to the

undisturbed watershed downstream.

The WCMWG model mine analysis was used to characterize the increase in runoff delivered to the

drainage area below the reclamation area. The model predicts that approximately 73 acre-feet of water

would be released downstream from the example reclamation watershed as a result of the receipt of a

10-year, 24-hour precipitation event under the proposed subcategory. This represents a 49 percent increase

in drainage volume over the existing guidelines for this watershed, and is similar to the 80 acre-feet of

drainage volume from the pre-mining undisturbed watershed scenario. 

EPA estimated benefits from improvements in water quantity using benefits transfer from a study by

Crandall et al. (1992). The study estimates the recreational value of instream flows that are considered

adequate for supporting abundant streamside plants, animals, and fish. The estimated user value of an

improvement in riparian quality from intermittent to perennial with the associated enhancement in plant and

animal habitat and animal species diversity is $81.25 (1998$).28 EPA applied this value to water-based

recreation consumers residing in the counties affected by western alkaline coal mining operations

discharging or affecting water bodies with perennial flow.29 

Seven perennial streams located in six counties are currently affected by western alkaline coal mining

operations. The number of recreational users residing in these counties are estimated to be equal to the

percent of the population engaged in near-water recreational activities (i.e., including activities such as

wildlife viewing but excluding fishing). EPA found no evidence that fishing occurs in water bodies 
8-17

affected by the proposed subcategory, and thus assumed that benefits from improvements in fishing are

negligible. Information in EPA’s Reach File 1 indicates that the ratio of affected reach length to the total

number of reach miles within a county ranges from 0.02 to 0.39. This analysis assumes that recreation

activity among residents of the counties affected by western mining is distributed evenly across all reach

miles within those counties. Accordingly, EPA estimates that 2% to 39% of users within the county are

affected. The average ratio of reach length to the total number of reach miles within a county is 0.06. 

Annual water-related benefits are equal to the affected population multiplied by $81.25 per user. In this

analysis, EPA assumed that riparian and ecological improvements expected to occur in perennial water

bodies as a result of natural flow preservation from improved hydrological stability are similar to

improvements in riparian habitat described in Crandall et al. (1992). 

EPA estimated the monetized value of recreational benefits from improved water flow by applying the

WTP value for water flow preservation to water-based recreation consumers residing in the counties

affected by western alkaline coal mining operations discharging to water bodies with perennial flow. EPA

identified six counties, involving approximately 900 users, affected by western mining and containing the

relevant drainage features. The estimated monetary value of recreational water-related benefits ranges

from $25,000 to $488,000 per year.

Nonuse Benefits 

Individuals who never visit or otherwise use a natural resource may nevertheless be affected by changes in

its status or quality. Empirical estimates indicate that such “nonuse value” may be substantial for some

resources (Harpman et al., 1993; Fisher and Raucher, 1984; Bergstrom, 1993). Because nonuse value is a

sizable component of the total economic value of water resources, EPA estimated change in nonuse values

using a rule of thumb developed by Fisher and Raucher (1984). For this analysis, EPA estimates that

nonuse benefits are equal to one-half of water-related recreational benefits. This yields a range of nonuse

benefits attributable to the Western Alkaline Coal Mining Subcategory of $12,500 to $244,000 per year. 

The nonuse benefit rule of thumb method is based on water-related recreation benefits and is therefore not

applied to land-related benefits.
8-18

Total Annual Benefits

EPA estimated expected benefits for the proposed subcategory in terms of land-related benefits and waterrelated benefits. Summing the monetary values reported in the preceding sections across these two

 categories results in total monetized benefits per year of $43,000 to $768,500 for the proposed

subcategory, as shown in Table 8.3.

Table 8-3: Total Monetized Benefits for the Western Alkaline Coal Mining Subcategory

Benefit Categories Annual Benefit Values (1998$)1

Low High

Avoided Surface Disturbance $5,500 $36,500

Recreational Benefits from Improvements in Water Flow $25,000 $488,000

Nonuse Benefits $12,500 $244,000

Total Benefits $43,000 $768,500

1Numbers have been rounded to the nearest $500.
9-1

Chapter 9

Social Costs and Benefits of the Proposed Rule

9.0 Introduction

This chapter summarizes the total estimated social costs and benefits of the two proposed subcategories. 

The estimated social costs include industry compliance costs and the costs incurred by NPDES permitting

authorities to implement the proposed rule. The benefit estimates presented reflect only those benefit

categories that EPA was able to quantify and monetize. However, benefit categories that EPA was not able

to quantify and/or monetize are briefly reviewed. The chapter also examines assumptions, exclusions, and

uncertainties in the economic impact analysis, and where possible, indicates the direction of their potential

bias on the estimated costs and benefits. 

9.1 Social Costs and Benefits of the Proposed Coal Remining

Subcategory

The previous chapters of this report provide detailed information on the Agency’s cost and benefits

analyses for the proposed rule. This section summarizes the results of the analyses for the proposed Coal

Remining Subcategory. Table 9-1 presents EPA’s estimate of the total annual social costs and benefits

attributed to the proposed subcategory.
9-2

Table 9-1: Annual Social Costs and Benefits of the Proposed Coal Remining

Subcategory ($1998)

Social Costs (Discounted at 7%):

Industry Compliance Costs:

 Additional BMP Effort $199,500 - $565,000

 Monitoring Costs $133,500 - $193,500

Costs to NPDES Permitting Authorities: $47,500 - $67,500

Total Social Costs $380,500 - $825,500

Monetized Benefits (Discounted at 3%):

Recreational Use of Improved Water Bodies $100,500 - $168,000

Aesthetic Improvements to Water Bodies $380,000 - $635,500

Recreational Use of Reclaimed Land $202,000 - $286,000

Nonuse (related to improved water bodies) $51,500 - $86,000

Total Monetized Benefits: $734,000 - $1,175,500

 Note: Totals may not add due to rounding

EPA projects that states will permit 43 to 61 new remining sites each year under the proposed subcategory. 

Based on this projection, EPA estimates annual industry compliance costs in the range of $333,000 to

$758,500. This estimate includes potential costs associated with increased BMP effort (i.e., pollution

abatement plan costs) and additional monitoring. Estimated annual costs to NPDES permitting authorities

are between $47,500 and $67,500. The estimated total annual social cost of the proposed subcategory

ranges from $380,500 to $825,500.

The total monetized benefits range from $734,000 to $1,175,500. Between 72 and 76 percent of the total

monetized benefits ( $532,000 to $889,500) result from projected improvements to water bodies. Of the

water-related benefits, 71 percent ($380,000 to $635,500) reflects the value of aesthetic improvements to

water bodies, 19 percent ($100,500 to $168,000) reflects water-related recreational benefits, and the

remainder ($51,500 to $86,500) reflects nonuse benefits. Estimated land-related benefits result from

improved recreation on reclaimed lands, including hunting and wildlife-viewing, and account for 24 to 28

percent of the total monetized benefits ($202,000 to $286,000). 
9-3

In addition to the benefits EPA was able to monetize, the projected increase in remining is expected to

result in the removal of approximately 216,000 to 307,000 feet of highwall each year, resulting in

substantial benefits associated with increased public safety. Furthermore, increased remining has the

potential to recover and utilize coal resources that might otherwise remain unrecovered. Other benefit

categories that EPA was not able to monetize include health and safety benefits, nonuse benefits related to

reclaimed land, potential savings in drinking water treatment costs, and secondary economic impacts from

increases in tourism and recreation.

Table 9-2 provides an overview of the assumptions, exclusions, and uncertainties in EPA’s economic

impact analysis, and where possible, indicates the direction of their potential bias on the estimated costs

and benefits. Uncertainties result from the fact that the subcategory will apply to new remining permits for

sites with unknown characteristics. 

Table 9-2: Assumptions, Exclusions & Uncertainties in Estimated Coal Remining Subcategory Costs and

Benefits

Omission/Uncertainty

Likely Impact 

on Estimated Costs

Likely Impact 

on Estimated

Benefits

Uncertainty about the number and characteristics of sites that

will be remined under the proposed subcategory

? ?

Assumption that remining sites in Illinois, Indiana, and

Tennessee will require 12 baseline samples and flow weirs

%

Assumption that monthly compliance monitoring will be

required

?

Estimate of four discharge points per mine site requiring

monitoring

?

Assumption that alkaline addition will be required for 10 %

of surface and underground remining sites

?

Health and safety improvements excluded !

Land-related nonuse benefits excluded !

Savings in drinking water treatment costs excluded !

Indirect or secondary economic impacts (e.g., new

industry/business to support increases in tourism and

recreation) excluded

!
Table 9-2: Assumptions, Exclusions & Uncertainties in Estimated Coal Remining Subcategory Costs and

Benefits

Omission/Uncertainty

Likely Impact 

on Estimated Costs

Likely Impact 

on Estimated

Benefits

9-4

Possible differences in environmental characteristics of preexisting discharges between benefits transfer study sites

(mostly sediment) and future remining sites (AMD)

?

Potential that remined AML sites have undergone some

natural reclamation.

%

Significant decreases in AMD loads not correlated with

immediate improvements in surface water quality

%

All reclaimed acreage is expected to provide improved

hunting, fishing and wildlife viewing opportunities (the

relative value of other land uses may be higher or lower than

the value associated with recreation)

?

% may overstate costs or benefits - may understate costs or benefits ? likely effect unknown 

9.2 Social Costs and Benefits of the Proposed Western Alkaline Coal

Mining Subcategory

The previous chapters of this report provide detailed information on the Agency’s cost and benefits

analyses for the proposed rule. This section summarizes the results of the analyses for the proposed

Western Alkaline Coal Mining Subcategory. Table 9-3 presents EPA’s estimate of the total annual social

costs and benefits attributed to the proposed subcategory.
9-5

Table 9-3: Annual Social Costs/Savings and Benefits of the Proposed Western

Alkaline Coal Mining Subcategory ($1998)

Social Costs (Discounted at 7%):

Compliance Costs (Savings):

 Incremental Modeling Costs $327,500

 Sediment Control Costs (Savings) ($30,835,000)

 Earlier Phase 2 Bond Release 

(Savings) 

($349,000 - $ 511,500)

Costs to NPDES Permitting Authorities: $12,500

Total Social Costs (Savings) ($30,845,000 - $31,007,000)

Monetized Benefits (Discounted at 3%): 

Avoided Surface Disturbance $5,500 - $36,500

Recreational Benefits from Improved

Water Flow

$25,000 - $488,000

Nonuse Benefits $12,500 - $244,000

Total Monetized Benefits: $43,000 - $768,500

Note: Totals may not add due to rounding

The proposed Western Alkaline Coal Mining Subcategory is projected to result in substantial industry cost

savings while creating environmental benefits for society. EPA believes that the only incremental industry

compliance costs attributed to the proposed subcategory is associated with the watershed modeling

requirements, estimated to be approximately $327,500 per year. These costs would be offset by reduced

sediment control costs associated with implementing the proposed sediment control plans (an estimated

savings of approximately $30.8 million) and savings resulting from an expected reduction in the

reclamation bonding period (an estimated savings of $349,000 to $511,500). EPA estimates that the

annual cost to NPDES permitting authorities to implement the proposed subcategory will be approximately

$12,500, resulting in a total annual social cost savings of approximately $31.0 million. 

The proposed Western Alkaline Coal Mining Subcategory is also expected to result in environmental

benefits. Total monetized benefits range from $43,000 to $768,500 per year. The majority of the

monetized benefits ($37,500 to $732,000) results from improved water flow that will preserve perennial

water bodies affected by western coal mining operations. The improved flow is expected to result in
9-6

benefits to water-based recreation consumers ($25,000 to $488,000), and in water-related nonuse benefits

($12,500 to $244,000). Land-related benefits of $5,500 to $36,500 result from reduced disturbance of

land areas. EPA estimated the value of enhanced hunting opportunities associated with the undisturbed

lands, but was not able to monetize other land-related benefits. Categories of benefits that EPA was not

able to monetize include land-related ecological benefits, the benefits of increased vegetative cover, and

possible recreational fishing benefits.

Table 9-4 provides an overview of the assumptions, exclusions, and uncertainties in EPA’s economic

impact analysis, and where possible, indicates the direction of their potential bias on the estimated costs

and benefits. 

Table 9-4: Assumptions, Omissions & Uncertainties in Estimated 

Western Alkaline Coal Mining Subcategory Costs and Benefits

Omission/Uncertainty

Likely Impact 

on Estimated Costs

Likely Impact 

on Estimated

Benefits

Assumption that sediment control costs per acre and impacts

on loadings and vegetation for the model mine are

representative for all western surface mines

? ?

Assumption that all surface coal mines will incur

incremental modeling costs of $50,000 

%

Assumptions about the cost of performance bonds and the

effect of the subcategory on the timing of Phase 2 bond

release

?

Ecological nonuse benefits not included for land-related

benefits

!

Benefits of increased vegetative cover not monetized !

Recreational fishing benefits excluded !

Recreational benefits from water quality improvements

consider resident users only 

!

Recreational benefits from water quantity improvements

assume that perennial stream flows are preserved

%

Unknown recreational importance of the affected sites ?

Sites for which information on drainage features is not

available excluded from water-related benefits analysis

!

% may overstate costs or benefits - may understate costs or benefits ? likely effect unknown
R-1

References

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Department of Agriculture and Applied Economics. September.

Crandall, K., B. Colby, and K. Rait. 1992. Valuing Riparian Areas: A Southwestern Case Study. Rivers

3, No 2, 1992, pp. 88-89.

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Administration. 1998. U.S. Industry & Trade Outlook ‘98. New York. 

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Feather, P., D. Hellerstein and L. Hansen. 1999. Economic Valuation of Environmental Benefits and the

Targeting of Conservation Programs, The Case of the CRP. USDA, Agricultural Economic Report No. 

778. April.

Fisher, A. and R. Raucher. 1984. Intrinsic Benefits of Improved Water Quality: Conceptual and Ethical

Perspectives. Advances in Applied Micro-Economics. Vol. 3, pp. 37-66.

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Pennsylvania. Report of Investigations (RI 9562) prepared for Bureau of Mines, United States

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Details available from the U.S. EPA Sample Control Center, operated by DynCorp I&ET, 6101 Stevenson

Avenue, Alexandria, VA 22304.

Keystone Coal Industry Manual, 1998.
R-2

Kentucky Department of Surface Mining Reclamation and Enforcement (DSMRE). 1998. Reclamation

Advisory Memorandum #129: Remining Issues and Procedures. April 21. 

http://www.coaleducation.org/reg-agen/ram129.htm.

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Pennsylvania. 1998a. Title 25. Environmental Protection Chapter 86. Surface and Underground Coal

Mining General. Department of Environmental Protection. 

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of Environmental Protection. 

Pennsylvania Department of Environmental Protection (PA DEP). 1997. A Status Report on the

Environmental Legacy of Coal Mining in Pennsylvania. http:/www.dep.state.pa.us.

Pennsylvania Department of Environmental Protection (PA DEP). 1999a. Pennsylvania Remining Site

Study. Details available from the U.S. EPA Sample Control Center, operated by DynCorp I&ET, 6101

Stevenson Avenue, Alexandria, VA 22304.

Pennsylvania Department of Environmental Protection (PA DEP). 1999b. NALIS, Pennsylvania’s

Abandoned Mine Land Inventory System.

Randall, A., O. Grunewald, S. Johnson, R. Ausness, and A. Pagoulatos. 1978. Reclaiming Coal Surface

Mines in Central Appalachia: A Case Study of Costs and Benefits. Land Economics, Vol. 54, No. 4,

November.

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Valuation of Ecological Resources and Functions. Environmental Management, Vol. 22, No. 1:49-68.

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R-3

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Summaries. http://www.eia.doe.gov/cneaf/coal/data/summary/files.html

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Reclamation, Pennsylvania. Office of Surface Mining. http://www.osmre.gov/awardpa.htm

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Reclamation and Enforcement.

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Office of Surface Mining. http://www.osmre.gov/bonding.htm

U.S. Department of the Interior. 1998d. Annual Evaluation Summary Report for the Regulatory Program

Administered by the Knoxville Field Office of Tennessee for Evaluation Year 1998. Office of Surface

Mining Reclamation and Enforcement. November. http://www.osmre.gov/report98.htm

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Abandoned Mine Land Programs Administered by the State of West Virginia for Evaluation Year 1998. 

Office of Surface Mining Reclamation and Enforcement. http://www.osmre.gov/report98.htm
R-4

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Office of Surface Mining, Denver, CO, and K. Strellec, U.S. EPA Office of Water, Washington, DC.

December 1.

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Sediment Controls -- Factors Affecting Modeling and Planning Costs. Letter from Joe Galetovic, U.S.

Office of Surface Mining, Denver, CO, to William Telliard, U.S. EPA Office of Water, Washington, DC.

November 23.

U.S. Department of the Interior. 1999c. Annual Evaluation Summary Report for the Regulatory and

Abandoned Mine Lands Reclamation Program Administered by the State of Alabama for Evaluation Year

1999. Office of Surface Mining Reclamation and Enforcement. November.

http://www.osmre.gov/report99.htm

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Administered by the State of Maryland for Evaluation Year 1999. Office of Surface Mining Reclamation

and Enforcement. January. http://www.osmre.gov/report99.htm

United States Department of the Interior. Undated. Remining Program Briefing. Provided by Douglas

Growitz, OSM.

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Mining Point Source Category BPT, BAT, BCT Limitations and New Source Performance Standards. 

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Drainage Database.

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http://www.epa.gov/owowwtr1/tmdl/alpanot42999.html

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Science and Technology. Details available from the U.S. EPA Sample Control Center, operated by

DynCorp I&ET, 6101 Stevenson Avenue, Alexandria, VA 22304.
R-5

United States Environmental Protection Agency (U.S. EPA). 1999b. Final Estimation of Facilities

Affected by Proposed Remining Subcategory. Memo from John Tinger, U.S. EPA Office of Water.

September 27.

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Proposed Option II: Remining. Memo from John Tinger, U.S. EPA Office of Water. September 27.

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Non-Rahall. Telephone survey between N. Jannelle, DynCorp I&ET, and State NPDES officials. Details

available from the U.S. EPA Sample Control Center, operated by DynCorp I&ET, 6101 Stevenson

Avenue, Alexandria, VA 22304.

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Alkaline Mining: Economic and Environmental Profile. December.

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Effluent Limitations Guidelines and Standards for the Coal Mining Industry: Remining and Western

Alkaline Subcategories. February.

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Supporting Statement for Baseline Standards and Best Management Practices for the Coal Mining Point

Source Category (40 CFR part 434) - Coal Remining Subcategory and Western Alkaline Coal Mining

Subcategory. January 18.

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Proposed Effluent Limitations Guidelines and Standards for the Western Alkaline Coal Mining

Subcategory. EPA-821-R-00-008. March.

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Practices Guidance Manual. EPA-821-R-00-007. March.

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1999. http://www.sba.gov/regulations/siccodes.

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National Laboratory. March.

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available from the U.S. EPA Sample Control Center, operated by DynCorp I&ET, 6101 Stevenson

Avenue, Alexandria, VA 22304.

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Details available from the U.S. EPA Sample Control Center, operated by DynCorp I&ET, 6101 Stevenson

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Alkaline Mining Subcategory. Details available from the U.S. EPA Sample Control Center, operated by

DynCorp I&ET, 6101 Stevenson Avenue, Alexandria, VA 22304. 
A-1

Appendix A

State Remining Programs

Many states have been delegated authority under SMCRA and NPDES programs, and several states have

established or are developing remining programs. State remining permit terms and conditions must adhere

to provisions established in the SMCRA regulations, except where these provisions are modified by the

state and approved by the Secretary of the Interior. This appendix presents selected information on state

remining programs and provides an overview of current state monitoring requirements for coal remining

sites.

A.1 State Programs

Pennsylvania

The Commonwealth of Pennsylvania has a particularly active remining program. Pennsylvania provides a

single application that covers both SMCRA and NPDES requirements. Under remining regulations that

were approved by OSM and EPA in March 1986, Pennsylvania establishes best professional judgement

(BPJ) limits for pre-existing discharges. Bond release is contingent on the post-mining discharge having

pollutant levels equal to, or less than, the pre-remining baseline. Pennsylvania has formalized and

standardized the permit process using a series of worksheets, modules (the REMINE program developed by

EPA and researchers at Pennsylvania State University), and forms to allow efficient processing of remining

applications. Applicants must provide data on baseline water quality and quantity sufficient to characterize

baseline pollutant levels, and must develop a pollution abatement plan that is integrated with the mining and

reclamation plan. The permitting authority establishes baseline limits for acidity, iron and manganese

based on a BPJ analysis. 

Pennsylvania also has an incentives program for remining operators. The Remining Operator’s Assistance

Program (ROAP) provides subsidies to eligible operators for the initial land surveying and bonding

requirement costs. The party responsible for creating the abandoned mine land cannot be an eligible

operator. Subsidies include payments to a qualified consultant to:
A-2

(1) Assess existing resources within the area adjacent to the proposed remining area that may be

affected by surface mining activities;

(2) Collect and report general hydrological information of the proposed remining area;

(3) Prepare a statement of results of test borings or core samples; and

(4) Provide a detailed plan of the proposed surface coal mining activities.

Subsidies may also be used to meet operator bonding obligations. Operators must reimburse the

Commonwealth for the cost of the services performed if they do not meet their obligations as described in

Title 25 of the Pennsylvania Code for Environmental Protection section 86.270 (relating to operator

liability). As of July 1999, Pennsylvania had permitted 343 remining operations, including 300 Rahall-type

permits.

Kentucky

Kentucky has a remining program similar to Pennsylvania's. Kentucky’s permitting program requires

applicants to submit baseline monitoring data and an abatement and reclamation plan. In addition,

applicants may submit results from the REMINE program. The applicant must demonstrate that remining

operations have the potential to improve water quality. The permit limits are based on BPJ analysis.

While Kentucky’s program is meant to create incentives for the reclamation of AML in general, it offers

particular incentives for small mine operators. Under the Kentucky Revised Mining Statutes, small mine

operators are subsidized for at least 20 percent of the initial surveying and planning costs of remining

AML. In the event that no bids are submitted by small coal operators, these funds may be transferred to

the public. The State of Kentucky also provides bonding assistance to any applicant who obtains an

approved remining permit. Under this assistance program, the Bond Pool Commission may provide

coverage to mine operators for up to 50 percent of the bond amount determined necessary to ensure

reclamation of the remined area. The state also imposes lower bonding requirements for eligible remining

sites: there is a two year bonding period for remining, and the base bond rate for remining areas is $1,500

per acre instead of the $2,500 per acre rate that normally applies (Kentucky Department for Surface

Mining Reclamation and Enforcement, 1998).
A-3

Alabama

According to OSM’s Annual Evaluation Summary Report for Alabama, many coal mine operators are

combining remining of AML acres with regular coal mining. Sixteen of 21 permits issued by the state

between October 1996 and September 1998, and 5 of 6 permits issued between October 1998 and April

1999, involved some remining of AML acres. OSM provided assistance to the state by presenting 

information on the national remining initiative and the regulatory authorities affecting remining, and by

encouraging interest in expanded remining. OSM is discussing the potential for a working partnership of

the coal industry, the state regulatory authority, and OSM to discuss issues that would encourage

additional remining in the state (U.S. DOI, 1999c). 

Tennessee

OSM has implemented the SMCRA regulatory program in Tennessee since the state repealed its surface

mining law in October 1984. The Knoxville Field Office of the OSM formed a remining team in May

1996. The Team solicited remining initiatives from industry, the environmental community, and regulators. 

The State has recently begun working with industry and OSM on a case by case basis to modify effluent

limitations requirements for remining sites (U.S. DOI, 1998d). 

West Virginia

West Virginia’s NPDES permitting requirements include the Rahall provisions which allow for modified

effluent limits in remining permits based on Best Professional Judgement (BPJ). Monitoring of baseline

conditions for at least 12 months is required, and the BPJ limits cannot exceed levels of pH, iron and

manganese in pre-existing discharges (U.S. DOI, 1998e).

Maryland

The majority of coal that was surface mined in Maryland during the period October 1998 to September

1999 was recovered from remining operations. Maryland promotes remining and issued a Reclamation

Advisory to all coal operators in Maryland in March 1999 outlining remining benefits and incentives to the

coal mining industry. The Maryland remining program includes a variety of incentives, including bond

credits, reduced bond liability period, excess spoil disposal on AML, and Rahall-type modified effluent

limitations for pre-existing discharges (U.S. DOI, 2000). 
A-4

A.2 Summary of State Sampling Requirements

The IMCC solicitation collected information on twenty states’ remining programs (IMCC, 1999). As of

July 1999, seven of the twenty states responding (Alabama, Kentucky, Maryland, Ohio, Pennsylvania,

Virginia and West Virginia) had issued Rahall permits, and another four states (Illinois, Indiana, Missouri,

and Tennessee) had issued non-Rahall remining permits. Pennsylvania had issued by far the greatest

number of Rahall permits (300), followed by Alabama (10). 

EPA collected information on the state monitoring requirements for remining operations in the seven states

that have issued Rahall permits to characterize the regulatory baseline for the proposed subcategory. Table

A.1 lists the current State monitoring requirements for both Rahall and non-Rahall permits in each of these

states. 
A-5

Table A.1: State Sampling Requirements: Rahall vs. Non-Rahall Sites

State Baseline Monitoring

Requirements

During Mining Post-Mining

Rahall Non-Rahall Rahall Non-Rahall Rahall Non-Rahall

Alabama 6 monthly

samples

6 monthly

samples

Monthly Monthly Monthly, for at least one year,

typically at Phase II Bond

Release (2 yrs.)

Monthly, for at least one year,

typically at Phase II Bond

Release (2 yrs.)

Kentucky 6-12 monthly

samples +

Biological

Assessment

None 2 per month 2 per month 6 months + biological 2/month until Phase I; 6

months of monthly; then

quarterly until Phase III

Maryland 12 monthly

samples

6 monthly

samples

Monthly Quarterly Monthly, for at least one year Quarterly

Ohio 12 monthly

samples

6 monthly

samples

Quarterly Quarterly Quarterly until Phase III Quarterly until Phase III

Pennsylvania 12 monthly

samples

6 monthly

samples

Monthly Quarterly Monthly, for at least one year,

typically at Phase II Bond

Release (2 yrs.)

Quarterly

Virginia 12 monthly

samples

6 monthly

samples

Biweekly Biweekly Monthly, for at least one year,

typically at Phase II Bond

Release (2 yrs.)

Monthly, for at least one year

West Virginia Twice monthly

for 12 months

2 per month 2 per month 12 consecutive months of

semi-monthly samples after

Phase I Bond Release

B-1

Appendix B

AML Reclamation Program

B.1 AML Reclamation Program and Fund

Title IV of SMCRA established the AML Reclamation Program in response to concern about extensive

environmental damage caused by past coal mining activities. The program is funded primarily from a fee

collected on each ton of coal mined in the country. The fee is deposited into a special fund, the Abandoned

Mine Land Fund, and is appropriated annually to address abandoned and inadequately reclaimed mining

areas where there is no continuing reclamation responsibility by any person under state or federal law. 

Mine operators must make fee payments quarterly and accompany them with a statement reporting the

amount and type of coal mined during the quarter. The per ton fee schedule is as follows:

C 35 cents for coal produced by surface coal mining;

C 15 cents for coal produced by underground mining; and 

C 10 cents for lignite coal.

While the program was initially slated to run from 1977 to 1992, Congress has reauthorized the tax to

generate AML funds through 2004. Even with this extension, OSM has estimated that only 10 percent of

AML problem areas will be corrected over the life of the reclamation program. According to estimates in

the Abandoned Mine Land Inventory System, the most serious AML problems -- those identified as Priority

1 or Priority 2 sites -- would cost more than 2.6 billion dollars to reclaim. These include highwalls, open

shafts and accessible underground mines presenting a danger to human health, safety and welfare. Many

other AML sites -- Priority 3 sites that do not pose the same degree of danger to the public but that do

adversely affect the environment -- would cost tens of billions dollars more to correct.

There is very little likelihood that enough AML money will be available to fund all the reclamation of even

the most serious of the eligible sites, let alone the eligible sites with only environmental impacts. Programs

that encourage remining have the potential to address some of the AML problems without spending public

funds.
B-2

B.2 AMLIS

As described in Chapter 2, the Office of Surface Mining (OSM) reports information on Abandoned Mine

Land (AML) in the Abandoned Mine Land Inventory System (AMLIS) database. AMLIS presents data

collected by OSM program officials, States and Tribes on lands and waters adversely affected by past

mining (primarily coal mining) that are eligible for reclamation under the Abandoned Mine Reclamation

Fund. The database is updated as new problems are identified and as existing problems are reclaimed. 

States are required to inventory only AML with Priority 1 and Priority 2 problems -- those that pose threats

to health, safety and the general welfare of people. Reporting on lower priority sites (those that pose

environmental problems (Priority 3) or that involve public facilities or the development of publicly-owned

land (Priority 4 or 5)) is voluntary and hence may not be complete. 

The “problem area” is the primary geographic unit reported in AMLIS. Problem areas are classified by

priority and by “problem type.” A problem area may have more than one problem type, but each problem

type is reported only once for each problem area. There were 31,887 problem area/problem type

combinations in AMLIS as of February 1999. Of these totals, only a subset are coal mining sites with preexisting discharges that have not yet been remediated or funded for reclamation. These sites are potentially

affected by the proposed subcategory. Of the total reported in AMLIS, 7,966 problem areas (covering

368,803 acres and reporting 18,426 problem types) are coal mining sites for which some or all problems

are not yet reclaimed or funded for reclamation. Of these, 2,188 problem areas (covering 55,352 acres)

have some type of water quality problem. EPA’s analysis of the AMLIS data included AML with the

following problem types as sites with water quality problems: clogged streams; clogged stream lands;

hazardous water body; polluted water body: agricultural or industrial use; polluted water body: human

consumption; and water problem. 

The following are definitions of these and other AMLIS problem types:

Priority 1 and 2 Problem Types

Clogged Streams Lands. Any AML-related pile, bank, mine waste, or earth material distributed by mining

activity which could be eroded and carried downstream by surface runoff. Clogged stream lands are

measured in acres of land affected by spoil, mine waste and earth material that are directly contributing to

the clogged streams. Those piles and banks which are identified and included as other AML problem types,

such as dangerous highwalls, are not included in this problem type. 
B-3

Clogged Streams. A filled stream bed, usually in a narrow valley, with AML-originated silt and debris

carried downstream by surface runoff. This causes reduced carrying capacity of the stream resulting in a

danger to property and human health, safety and welfare. Clogged streams are measured in miles of

streams that must be dredged to abate the problem. 

Dangerous Highwalls. Any unprotected, unreclaimed highwall located in close proximity to a populated

area, public road, or other area of intense visitation, which poses a threat to the public health, safety and

general welfare.

Dangerous Impoundments. Any AML-related, large-volume water impoundments such as mine waste

embankments, sedimentation ponds, or underground mine water pools which pose a threat of flooding and

catastrophic destruction to downstream property and human health, safety and general welfare. 

Dangerous Piles or Embankments. Any AML-related waste pile or bank located within close distance to a

populated area, public road, or other area of intense visitation, and posing a danger to public health, safety

and general welfare by adverse effects resulting from an unstable steep slope or wind-blown particulate

matter.

Dangerous Slides. A land mass slide of surface-subsurface soil, a mine waste pile or bank, or surface

mine spoil that, due to instability of its own weight or lubricating effects of mine drainage water, endangers

the public or threatens destruction of improved property located uphill or downhill from the land mass. 

Gases: Hazardous or Explosive. Any AML-related venting of hazardous or explosive gases. Includes

hazardous or explosive gases problem areas unrelated to underground mine fires.

Hazardous Equipment or Facilities. Dilapidated hazardous equipment or facilities located within close

proximity of populated areas, near public roads, or other areas of intense visitation.

Hazardous Water Body. Impounded water, regardless of depth or surface area, that is considered an

attractive nuisance and is located within close proximity to a populated area, public road, or other areas of

intense visitation. The hazard must result from some AML-related feature(s) such as steep or unstable

banks, hidden underwater ledges, or rocks or debris on the bottom. 
B-4

Industrial or Residential Waste. Unauthorized use of AML-impacted areas for residential or industrial

waste disposal that poses a danger to the public from unsanitary conditions or from the toxic emissions

from burning refuse.

Polluted Water Body: Human Consumption or Agricultural and Industrial Use. Surface or subsurface

water used for either direct human consumption, or agricultural, industrial or recreational purposes which

does not meet the standards (especially those for suspended solids, acid or alkaline conditions, heavy metals

concentrations, or radioactivity) appropriate to the historical use. 

Portals. Any AML-related surface entrances to a drift, tunnel, adit or entry which is not sealed or

barricaded and is posing a threat to the public. 

Subsidence. Any surface expression of subsidence such as tension cracks, troughs, shearing faults, or

caving caused by AML-related underground mine voids which may damage property and endangers the

public. 

Surface Burning. The continuous combustion of mine waste material resulting in smoke, haze, heat, or

venting of hazardous gases which is currently occurring or demonstrated to occur on a regular basis. 

Burning in a mine dump, even if beneath the surface of the material, is also considered surface burning.

Underground Mine Fires. The continuous combustion of underground mine waste material resulting in

smoke, haze, heat, or venting of hazardous gases which pose a danger to the public. 

Vertical Openings. Openings which typically occur when subsidence results in a vertical or steeplyinclined shaft, isolated pothole or opening which is not sealed or barricaded and that poses a threat to

public health, safety and general welfare.

Priority 3 Problem Types

Bench. A ledge that forms a single level operation along which mineral or waste material are excavated. 

The portion of a bench formed on solid, unexcavated material is considered a solid bench, and the portion

which consists of unconsolidated spoil material extending outward from the solid bench is considered a fill

bench. 
B-5

Industrial or Residential Waste Dump. An area used to dispose of any kind of industrial or residential

waste not related to mining or processing. 

Gob. Refuse or waste removed from a mine. This includes mine waste, rock, pyrites, slate or other

unmarketable material which is separated during the cleaning process.

Highwall. The face of exposed overburden or the face or bank on the uphill side of a contour strip mine

excavation or the vertical wall consisting of the deposit being mined and the overlying rock and soil strata

of the mining site. 

Haul Road. A heavy built road which runs from pit to loading dock, tipple ramp or preparation plant and

is used for transporting mined materials.

Pit. The last uncovered cut adjacent to the highwall. In surface mining, the working area may be known as

a strip pit, and mine workings or excavations open to the surface are also termed pits. 

Spoil Area. The overburden material removed in gaining access to a coal seam or mineral deposit. 

Slurry. A fine particle-size material from coal or mineral processing stored in a pond. This solid must be

separated from the water in order to have clear effluent for refuse or discharge. 

Slump. A surface expression resulting from the caving in of underground mine voids. 

Equipment and Facilities. Any equipment or buildings used to mine, process or transport coal or mineral

ores. 

Mine Openings. Any surface entrance or opening related to an underground mine excavation.

Water Problem. When water leaving the AML problem area causes a negative environmental impact

because of its pH, sediments load, or other pollutants, or because of its effect on other lands due to poor

drainage conditions (i.e., agricultural flooding).