March 26, 2009

The Honorable Lisa Jackson

Administrator U.S. Environmental Protection Agency Ariel Rios Building 1200 Constitution Avenue, N.W.

Mail Code 1101A Washington, DC 20460

Dear Administrator Jackson:

Recently, the U.S. Environmental Prot ection Agency (EPA) announced that it would be undertaking the development of a regulatory proposal for the disposal of coal combustion waste (coal ash) by the e nd of the year. This announcement follows on the heels of several Congressional actions to address the matter, including Senate

Resolution No. 64 and a bill introdu ced by House Natural Resources Committee Chairman Nick Rahall II (H.R. 493). As st ate agencies responsible for regulating the placement of coal ash at both coal and nonc oal mines nationwide, we have a vested interest in EPA’s future proposal and reque st the opportunity to work closely with EPA as co-regulators in the development of the proposal, whatever form it may take.

As you know, in May of 2000, the U.S. Environmental Protection Agency (EPA) published a Notice of Regulatory Determination on Wastes from the Combustion of Fossil Fuels. Among other th ings, and of particular concern to the states, EPA found that, although coal com bustion wastes (CCWs) did not warrant regulation under subtitle C of the Resource Conservation and Recovery Act (RCRA) as “hazardous waste”, the agency had de termined that national regulations under subtitle D of RCRA and/or po ssible modifications to exis ting regulations established under the Surface Mining Control and Reclamation Act of 1977 (SMCRA) are

warranted when these materials are used as fill in surface or underground mines. IMCC was especially concerned about the “mine placement” aspects of the determination given the significant interp lay between approved state regulatory programs under SMCRA and any potential adjustments to the SMCRA federal regulations (which serve as a templa te for state regulatory programs).

Following publication of EPA’s notice, IMCC took the lead on behalf of the

states to address the matter and initiated a series of discussions between states, the Office of Surface Mining (OSM) and EPA concerning next steps pursuant to the regulatory determination. The first of the state/federal dialogues occurred in May of

2001 and over the course of the next three years, the parties shared and discussed information and analyses of their respec tive regulatory programs under SMCRA andRCRA. The states also provided data and inform ation from state approved permits where mine placement was predominant to demonstrate the type s of environmental controls applicable in these situations and the environmental protectio n afforded by exiting regulatory standards. Copies of the various documents and notes generated at the four state/federal dialogues are

available at www.epa.gov/epaoswer/other/fossil/index.htm

.

On March 1, 2006, the National Research C ouncil (NRC) within the National Academy

of Sciences releas ed a report entitled Managing Coal Combustion Residues in Mines . The study was in response to a request from Congress and was initia ted in June of 2004. The NRC conducted the study to examine the health, safet y, and environmental risks associated with using coal combustion residues (a lso referred to as coal combus tion wastes or coal ash) in

reclamation at active and abandoned coal mines. The study was to determine whether CCWs were placed and disposed of in coal mines with adequate safeguards and whether this activity is degrading water supplies in coal mines in co ntravention of SMCRA. IMCC, on behalf of the states, once again provided data and information to the NRC regard ing the nature and status of state regulatory program requirements fo r the placement of CCWs in mines.

Most recently, IMCC submitted statements to the House Energy and Mineral Resources

Subcommittee for inclusion in the record of tw o hearings held by the Subcommittee: one on June 10, 2008 regarding “How Should the Fede ral Government Address the Health and

Environmental Risks of Coal Combustion Wast es?” and another on February 12 concerning H.R. 493, the “Coal Ash Reclamation, Environment and Safety Act of 2009”. Copies of those

statements are attached. In both statements IMCC articulates the perspective of the states as primary regulators in the area of mine placem ent concerning the development of any new federal regulatory program by OSM or EPA. In this regard, we would note that OSM has already developed a draft proposed rule on mine placement which we believe serves as an reasonable starting point for fu rther discussions about devel oping a new federal regulatory

framework.

The states, through the IMCC, have been active participants in the regulatory development arena with OSM and EPA over the pa st ten years. As noted in the attached resolution adopted by IMCC, we trust that we w ill continue our close working relationship on this important matter. In this regard, we w ould request an opportunity to meet with you or members of your staff to discuss the specifics of your regulatory proposal and provide early input from the states.

Sincerely,

Gregory E. Conrad

Executive Director

Attachment

cc. All Commissioners

Matthew Hale

Richard Kinch Glenda Owens, OSMStatement of Gregory E. Conrad, Executi ve Director, Interstate Mining Compact

Commission to the House Subcommittee on Energy and Mineral Resources re the Legislative Hearing on H.R. 493, the “Coal Ash Reclamation, Environment, and Safety Act of 2009”

My name is Gregory E. Conrad and I serv e as Executive Director of the Interstate Mining Compact Commission (IMCC), a multi-state gove rnmental organization representing the natural res ource and environmental protectio n interests of its 24 member states. We appreciate the opportunity to submit this statement for the record of the legislative hearing held by the Subcommittee on February 12, 2009 regarding H.R. 493, the “Coal Ash Reclamation, Environment, and Safety Act of 2009. The IMCC member states share the concern of Chairman Rahall, the bill’s sponsor, that effective government oversight is necessary, regardless of whether coal ash is placed in surface impoundments,

landfills or active or abandoned mines. As st ate agencies responsible for the regulation of coal and noncoal mining operations thr oughout the United States, IMCC’s member states are committed to implementing and enforcing national and state laws that provide for the proper disposal and placement of coal combustion wastes in a manner that protects public hea lth and safety and the environment.

Our understanding is that H.R. 493 is ta rgeted primarily at the safety and structural stability of coal ash impoundments throughout th e United States. We agree that this is a very important matter. As Ch airman Rahall noted in his opening remarks at the February 12 th legislative hearing: “The bill I have introduced deals with just one aspect of the issue of regulating the management of coal combustion wastes. It is a rifle shot aimed at ensuring the structural stability of coal ash impoundments. There remains the much broader issue of regulating the disposal of these wastes in landfills and coal

mines.” We address the “broader issue” of mine placement below. However, with respect to the intended purposes of H.R. 493, we have several concerns.

The bill anticipates that those states with primacy programs under the Surface Mining Control and Reclamation Act of 1977 (SMCRA) can elect to implement the regulatory requirements under the legislation for the safe stor age and disposal of covered wastes in impoundments upon approval by the S ecretary of the Interior. While we are

uncertain from the definition of “covered wa stes” in H.R. 493 exactly what types of waste this might include, we do know that th ese types of impoundme nts are generally not located at or near surface coal mining operati ons. Rather, they are generally sited near coal-fired power plants. The additional dut y to regulate coal ash storage and disposal impoundments under SMCRA is a significant expansion of SMCRA’s intent and

purposes.

SMCRA primacy states have a fair am ount of experience and expertise with respect to coal waste impoundments at surface coal mining sites. Expanding the states’ jurisdiction beyond these traditional mining ac tivities to include coal ash impoundments wherever they may be found could significan tly impact overall program operations. The bill does not seem to provide a specific f unding mechanism for the additional resources that will be required to permit and inspect these coal impoundments, much less undertake

1enforcement actions. It could be argued th at, since the Secretary would be approving the extension of existing SMCRA state programs to include the regulation of coal ash impoundments under the bill, Ti tle V funding under SCMRA should be increased to include the expenses associated with this additional program activity. However, this would likely be a significant fiscal impact a nd it should therefore be explicitly addressed in the legislation. In this regard, we urge that 100 pe rcent federal funding be made available to support this new regulatory component of state programs. Even with that, some states may still be either unable or uninterested in taking on this additional regulatory responsibility under th eir SMCRA programs due to fiscal and other resource

constraints.

There also remains the problem of ho w these coal ash im poundments will be regulated in those states wit hout SMCRA programs. Obviousl y, these states will not be in a position to consider taki ng on these regulatory programs, even if they desired to do so, without adjustments to the legislation permitting them to do so. If the legislation is adjusted to authorize non-SMCRA program st ates to assume regulation of coal ash storage and disposal impoundment s, the legislation should also provide the states with the necessary funding to perform these regulatory activities. Funding fo r states to do this additional work should be 100 percent federal.

We also believe it is critical in the legi slation, or in report la nguage, to distinguish between the purposes and intent of this bill (i.e . structural stability and safety of coal ash impoundments) and the placement of coal as h at active and abandoned mines. The IMCC member states recognize that coal as h, in appropriate circumstances, can be successfully used in the reclama tion of mines. We also are of the view that coal ash is only to be used at a mine in a manner that does not cause pollution and is protective of the environment and public health and safety.

In May of 2000, the U.S. Environmenta l Protection Agency (EPA) published a Notice of Regulatory Determination on Wastes from the Combustion of Fossil Fuels. Among other things, and of particular conc ern to the states, EPA found that, although coal combustion by-products (CCBs) (or coal combustion residues (CCRs)) did not warrant regulation under subtitle C of the Resource Conservation and Recovery Act (RCRA) as “hazardous waste”, th e agency had determined that national regulations under subtitle D of RCRA and/or po ssible modifications to exis ting regulations established

under SMCRA are warranted when these materials are used as fill in surface or underground mines. IMCC was especially concerned about the “mine placement” aspects of the determination given the significant interp lay between approved state regulatory programs under SMCRA and any potential adjustments to the national SMCRA regulations (which serve as a te mplate for state regulatory programs).

Following publication of EPA’s notice, IMCC took the lead on behalf of the states

to address the matter and initiated a series of discussions between states, the Office of Surface Mining (OSM) and EPA concerning ne xt steps pursuant to the regulatory

determination. The first of the state/federa l dialogues occurred in May of 2001 and over the course of the next three years, the pa rties shared and discussed information and

2analyses of their respective regulatory programs under SMCRA and RCRA. The states also provided data and information from state approved permits where mine placement was predominant to demonstrate the types of environmental c ontrols applicable in these situations and the environmental protection afforded by exiting regulatory standards. Copies of the various documents and notes ge nerated at the four state/federal dialogues

are available at www.epa.gov/epaoswer/other/fossil/index.htm

.

On March 1, 2006, the National Research Council (NRC) within the National Academy of Sciences released a report entitled Managing Coal Combustion Residues in

Mines . The study was in response to a request from Congress and was initiated in June of 2004. The NRC conducted the study to examin e the health, safety, and environmental risks associated with using coal combustion residues (also referred to as coal combustion wastes or coal ash) in reclamation at activ e and abandoned coal mines. The study was to determine whether CCRs were placed and dis posed of in coal mines with adequate safeguards and whether this activity is de grading water supplies in coal mines in contravention of the Surface Mining Control and Reclamation Act (SMCRA). IMCC, on behalf of the states, once agai n provided data and informa tion to the NRC regarding the

nature and status of state regulatory program requirements for the placement of CCRs in mines. Most recently, IMCC submitted a stat ement to this Subcommittee for inclusion in the record of the hearing held on June 10, 2008 regarding “How Should the Federal

Government Address the Health and Environm ental Risks of Coal Combustion Wastes?” A copy of that statement is attached and we reque st that it be incorporated into the record of this hearing.

As an overall objective in the area of regulating mine placement of CCBs, the states have attempted to strike a balan ce between existing stat e regulatory program requirements and any gaps that may be define d and justified. The few areas within state programs that have been targeted for some degree of shoring up, as suggested in the NRC report, can best be addressed through con tinued inter-governmental efforts between the states, OSM and EPA. Where specific regulat ory gaps are confirmed to exist, then it would be appropriate to cons ider national guidance from OS M (the agency recommended by the NRC to take the lead in this area). In this regard, IMCC a dopted a resolution in May of 2006 that addresses this issue, a copy of which is attached.

From the states’ perspective, now that the NRC has completed its work and issued its report, we are hopeful that OSM, in coordination with EPA, will move forward with its position on the need for additional federa l regulation of minefill practices for coal

combustion wastes. We believe that all of the information requi red by the agency to

make this decision is now in hand and that it is well poised to render that decision. In this regard, we understand that OSM has drafted a proposed rule that addresses placement of

CCBs at active and abandoned coal mine sites. In the end, we anticipate that OSM, in coordination with EPA, can appropriately r ecommend that the states continue their ongoing efforts to work cooperatively with both ag encies to assess the effectiveness of their respective regulatory programs and make appr opriate adjustments, given the flexibility

and discretion afforded the states under SMCRA’s state primacy design. In the final analysis, we believe that our citizenry and the environment will be well served by state

3regulatory programs that fully comply with a pplicable federal laws and that reflect the

results of the laboratorie s of invention inherent in state pr imacy. We also believe that an effective regulatory regime for the mine placement of coal combustion by-products will

insure that there are effective and safe al ternatives to classic land disposal while enhancing the reclamation of bot h active and abandoned mined lands.

With respect to H.R. 493, we urge the Subcommittee to seriously consider the concerns articulated above regarding the pot ential impacts of the legislation on existing state regulatory programs, esp ecially in the area of funding and resources. We welcome the opportunity to work with the Subcommitt ee and others to address these concerns. Thank you for the opportunity to submit this st atement. We would be happy to answer any questions that you may have or to provide additional information.

4

# Resolution

Interstate Mining Compact Commission

BE IT KNOWN THAT:

WHEREAS , in 1980 Congress passed the Bevill Amendment to the Resource Conservation and Recovery Act (RCRA) (42 U.S.C. Sec. 6982(n)), which required the U.S. Environmental Protection Agency (EPA ) to conduct a detailed and comprehensive study and submit a report on the adverse effect s on human health and the environment, if any, from the disposal and utiliz ation of fly ash waste, bottom ash waste, slag waste, flue gas emission control waste, and other byproduc t materials generated primarily from the combustion of coal or other fossil fuels; and

WHEREAS

, on May 22, 2000, EPA published a regulator y determination on wastes from the combustion of fossil fuels (65 Fed. Re g. 32214), wherein it c oncluded that coal combustion wastes do not warrant regulation und er subtitle C of RCRA when they are disposed in landfills or surface impoundments, and that regulations under subtitle D of RCRA and/or the Surface Mining Control a nd Reclamation Act (SMCRA) are warranted when these wastes are used to fill surface or underground mines; and

WHEREAS

, concerns about the potential public health and environmental risks associated with using coal combustion wast es for reclamation in active and abandoned mines led Congress in 2004 to direct EPA to commission an independent study to examine this topic, pursuant to which th e National Research C ouncil (NRC) established

the Committee on Mine Placement of Coal Combustion Wastes; and

WHEREAS

, on March 1, 2006, the NRC released its report on Managing Coal

Combustion Residues in Mines ; and

WHEREAS

, beginning in May of 2001, the Inters tate Mining Co mpact Commission (IMCC) sponsored and facilitated a series of intergovernmental discussions with the Office of Surface Mining (OSM), EPA and othe r stakeholders concerning existing state and federal regulatory programs and controls for the mine placement of coal combustion residues; and

WHEREAS

, IMCC endorses the finding in the N RC report that OSM and its SMCRA state partners should take the lead in de veloping any new national standards for the placement of coal combustion residues in mi nes because the framework is already in place to deal with mine-related issues

5NOW THEREFORE BE IT RESOLVED:

That the Interstate Mining Compact Commi ssion encourages OSM and EPA to formally

confirm OSM

= s lead role in the development of any new national rules regarding mine placement of coal combustion residues; and

That OSM, in coordination with EPA, work closely with the states through IMCC in responding to the recommendations of the NRC report and devel oping any new rules.

Issued this 3 rd day of May, 2006

ATTEST:

Gregory E. Conrad [Signed]

Executive Director

6Statement of Gregory E. Conrad, Executi ve Director, Interstate Mining Compact

Commission to the Subcommittee on Ener gy and Mineral Resources re Oversight Hearing on “How Should the Federal Government Address the Health and

Environmental Risks of Coal Combustion Wastes?”

My name is Gregory E. Conrad and I serv e as Executive Director of the Interstate Mining Compact Commission (IMCC), a multi-state gove rnmental organization representing the natural res ource and environmental protectio n interests of its 24 member states. We appreciate the opportunity to submit this statement to the Subcommittee regarding the environmental risks associated w ith the disposal and/or beneficial use of coal combustion by-products (CCB’s) or resi dues (CCR’s). We will focus our statement primarily on the mine placement of CCB’s, give n the fact that our organization consists of state agencies who regula te both the coal and noncoa l mining industries throughout the

United States.

In May of 2000, the U.S. Environmenta l Protection Agency (EPA) published a Notice of Regulatory Determination on Wastes from the Combustion of Fossil Fuels. Among other things, and of particular conc ern to the states, EPA found that, although coal combustion by-products (CCBs) (or coal combustion residues (CCRs)) did not warrant regulation under subtitle C of the Resource Conservation and Recovery Act (RCRA) as “hazardous waste”, th e agency had determined that national regulations under subtitle D of RCRA are warranted when these wastes are disposed in landfills or surface impoundments, and that regula tions under subtitle D and/or possible modifications to existing regulations established under the Surface Mining Control and Reclamation Act (SMCRA) are warranted when these materials are used as fill in surface or underground mines. IMCC was especially concerned about the “mine placement” aspects of the determination given the significant interplay between approved state regulatory programs under SMCRA and any potential adjustments to the national SMCRA regulations (which serve as a template for state regulatory programs).

Following publication of EPA’s notice, IMCC suggested to both EPA and the Office of Surface Mining (OSM) that an in tergovernmental forum would serve as a

valuable mechanism to initiate discussi ons between state and federal governments concerning next steps pursuant to the regulat ory determination. This suggestion followed on the heels of a resolution adopted by IMCC in May of 2000 affirming the appropriateness and effectiveness of state re gulations and policies for the safe handling, recycling, beneficial use and placement of coal combustion by-products and supporting the management of CCBs without the application of federal RCRA subtitle C requirements.

The first of the state/federal dialogue s occurred in May of 2001 and over the course of the next three year s, the parties shared and disc ussed information and analyses of their respective regulato ry programs under SMCRA and RCRA. The states also provided data and information from state approved permits where mine placement was predominant to demonstrate the types of e nvironmental controls applicable in these situations and the environmental protection afforded by exiting regulatory standards.

7Copies of the various documents and notes ge nerated at the four state/federal dialogues

are available at www.epa.gov/epaoswer/other/fossil/index.htm

.

On March 1, 2006, the National Research Council (NRC) within the National Academy of Sciences released a report entitled Managing Coal Combustion Residues in

Mines . The study was in response to a request from Congress and was initiated in June of 2004. The NRC conducted the study to examin e the health, safety, and environmental risks associated with using coal combustion residues (also referred to as coal combustion wastes or coal ash) in reclamation at ac tive and abandoned coal mines. The study was sponsored by the Environmental Protection Agency (EPA). The NRC looked at the placement of coal combustion residues (CCRs) in abandoned and active surface and underground coal mines in all major coal basi ns. The study also considered coal mines receiving large quantities of coal combustion residues. A profile of the utility industry was taken into consideration in designing the study to focus on the sources producing the greatest quantities of coal combustion residues. The study was to determine whether CCRs were placed and disposed of in coal mines with adequate safeguards and whether this activity is degrading water supplies in coal mines in contravention of the Surface Mining Control and Reclamation Act (SMCRA).

Throughout the state/federal discussions re ferenced above and in response to the NRC study, the states consisten tly articulated the following c oncerns to NAS, EPA and OSM, several of which were addressed in the NRC report:

1. most importantly, it is abundantly clear th at states are in th e best position to regulate in this area. Thos e states that have seen a significant amount of mine placement activity have developed sophist icated, comprehensive, high quality regulatory programs that incorporate, am ong other things, adequate ash and site characterization and clear performance standards.

2. SMCRA appears to serve as an adequate and effective baseline for any type of regulatory analysis concerning mine placement of CCBs. In this regard, the states see the SMCRA permit serving as the plat form for CCB mine placement at coal mines. For non-coal mines, the states believe that the exis ting state permitting framework, which is often RCRA-based, is adequate.

3. it is essential to examine the effectiveness and comprehensive nature of existing state programs before adding additional regu latory requirements. Experience at the state level in implemen ting existing state and federa l laws substantiates the overall adequacy of the exis ting regulatory structure.

4. there is a need to coordinate among all app licable statutes/regul ations that impact the regulation of mine placement of CCBs, including SMCRA, RCRA, the Clean Water Act and the Safe Drinking Water Act. There is a belief that many of the necessary regulatory requirements are al ready in place in the context of these statutes and their respective regulatory programs.

5. there is an absolute need for flexibil ity to accommodate differences among the states related to geology, climate, as h characterization and agency operation. Comprehensive federal regulation will be difficult to implement on a nationwide

basis due to these differences.

86. there needs to be consideration given to both coal and noncoal sites and the differences between them. In this regar d, heavy-handed federal efforts to achieve some sort of uniformity will only undermine effective and efficient regulation at

the state level.

7. to date there have been no proven, do cumented environmental damage cases found with respect to ground water polluti on associated with mine placement at coal mining sites. Where data has been presented concerning alleged damage cases, and states have been provided an oppor tunity to address this data, the states have demonstrated that the allegations relate to pollution parameters that are either aberrations, are not associated w ith mine placement of coal ash, or are

irrelevant to a determination that ground water pollution has occurred.

8. it must be kept in mind that mine placement of CCBs is a necessary and beneficial

alternative to landfills. Inappropriate and unnecessary restrictions on the use of this practice will complicate the environm ental challenges associated with the disposal of coal ash. Upwards of 50 percent of the energy generated in many states is produced from co al, with the associated by-pr oduct of coal ash that must be handled in an appropriate manner, su ch as mine placement. Furthermore, without appropriate beneficial uses of CCBs such as mine placement, those who produce energy from waste coal using co-generation technology will find themselves in an untenable position.

9. it is vitally important to understand the value of remining in the overall equation, particularly as it impacts the remediati on of abandoned mine lands. Without the availability of remining operations in ar eas such as the Anthracite region of Pennsylvania, we will miss a once-in-a -lifetime chance to reclaim abandoned mines that will otherwise likely go unaddressed.

As an overall objective in the area of regulating mine placement of CCBs, the states have striven to strike a balance between existing state regulatory program requirements and any gaps that may be defined and justified. Although there are differences among the states in the way th ey regulate mine placement of CCBs (for instance, in terms of sharing jurisdiction am ong several state agencies; relying primarily on the SMCRA program for mine placement at coal mines; and differentiating between beneficial use and classic disposal), there has been limited evidence of major gaps that require filling through new nati onal regulations under either SMCRA or RCRA. And in

those states that do not have well defined programs for mine placement of CCBs, it is usually because they have not had to deal w ith the issue within their borders. Even in those states, a comparison of their programs with states who actively regulate mine placement of CCBs demonstrates that most, if not all, of the program elements are in place and would likely operate effectively when needed.

The few areas within state programs that ha ve been shown to need some degree of shoring up, as suggested in the NRC re port, can best be addressed through intergovernmental discussions, such as have occurred over the past se veral years. Also, through a benchmarking type of approach, states can identify areas in their programs that would benefit from fine-tuning and this can be accomplished by pa tterning these areas after other state programs . We have seen this play out in several of our member states

9over the past several months, including Mary land, Pennsylvania and Virginia. If and when specific regulatory gaps are confirmed to exist in a significant majority of state programs, then it would be appropriate to consider national guidance from OSM (the agency recommended by the NAS to take the le ad in this area). In this regard, IMCC adopted a resolution in May of 2006 that addresses this issue, a copy of which is attached.

From the states’ perspective, now that the NAS has completed its work and issued its report, we are hopeful that OSM, in coordination with EPA, will move forward expeditiously with its position on the need for additional federal regulation of minefill practices for coal combustion by-products. We believe that all of the information required by the agency to make this decision is now in hand and that it is well poised to render that decision. In the end, we anticipat e that OSM, in coordi nation with EPA, can appropriately recommend that the states continue their on-going efforts to work cooperatively with both agencies to assess the effectiveness of their respective regulatory programs and make appropriate adjustments, gi ven the flexibility and discretion afforded the states under SMCRA’s state primacy desi gn. Furthermore, we anticipate that the states will continue their benchmarking init iatives, which provide for the analysis and comparison of state program elements with the overall objective of enhancing their respective programs through the adoption of lessons learned during program implementation and the incorporation of innovativ e approaches. In the final analysis, we believe that our citizenry and the environment will be well served by state regulatory programs that fully comply with applicable federal laws and that reflect the results of the

laboratories of invention inhere nt in state primacy. We also believe that an effective regulatory regime for the mine placement of coal combustion by-products will insure that

there are effective and safe alternatives to classic land disposal while enhancing the

reclamation of both active and abandoned mined lands.

10