Phosphate Mining: Oversight Has Strengthened, but Financial Assurances and Coordination Still Need Improvement
Published: 2012-05-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: For over 100 years in the United States, phosphate has been mined on federal land primarily for use in fertilizer and herbicides. The Department of the Interiors Bureau of Land Management (BLM) is responsible for leasing and overseeing such mines on federal land. In 1996, selenium contamination from phosphate mines was discovered in Idaho, threatening the health of livestock and wildlife. Mines in the area are now being assessed for cleanup under the Environmental Protection Agencys (EPA) Superfund program. Agencies may require mine operators to post financial assurances, which are usually in the form of a bond, to ensure they meet their leasing and cleanup obligations. GAO was asked to determine the (1) extent to which federal oversight for phosphate operations has changed since 1996; (2) actions federal agencies and mine operators have taken to address contamination, amounts spent to date, and estimated remaining costs; and (3) types and amounts of financial assurances in place for phosphate-mining operations. GAO reviewed agency data and documents, and interviewed key agency and mine operator officials.
section_title: What GAO Found
paragraphs: Since 1996, federal agencies have taken several actions to strengthen their oversight of phosphate mining on federal land. For example, BLM now conducts more detailed environmental analysis when evaluating new mine plans; requires phosphate mine operators to provide more comprehensive plans for reclaiming mine sites (restoring the land to a stable condition that can support other uses); and requires the mine operators to provide financial assurances that are based on the full estimated cost of reclaiming mines, in contrast to BLMs previous practice of calculating financial assurances based simply on the acreage associated with mines. However, gaps remain in agency policies and coordination that could limit the agencies efforts to address contamination from phosphate-mining operations. For example, BLM has not documented its new full-cost financial assurance practice in agency policy and therefore has limited assurance that it will be implemented consistently. BLM also has not fully coordinated with the Forest Service when establishing mine lease conditions and setting financial assurance amounts. Limited coordination is of particular concern because 16 phosphate leases in Idaho are scheduled for review and possible readjustment in the next 5 years, and once a lease is readjusted, its provisions are in effect for 20 years.
Over the last 16 years, federal agencies and mine operators have primarily focused on assessing the extent of selenium contamination in Idaho and have conducted only limited remediation actions. The agencies have conducted or overseen high-level assessments of contamination at 16 of the 18 mines where federal agencies are overseeing mining operations or cleanup activities, and at several of these mines the agencies and mine operators are now conducting more detailed assessments, known as remedial investigations and feasibility studies. However, no final cleanup actions have been chosen at any of the sites, and according to officials, most sites will require years of additional investigative work before final cleanup actions are selected. Federal agencies reported that they have spent about $19 million since 2001 to oversee these assessments and undertake a limited number of remediation actions, roughly half of which has been reimbursed by the mine operators under cleanup settlement agreements. Mine operators told GAO that they too have spent millions of dollars in additional assessment and remediation work but did not provide documentary evidence to support these claims. Agency officials told GAO that they have not developed estimates for the remaining cleanup costs because final cleanup remedies have not yet been identified. However, their informal estimates suggest that remaining cleanup costs may total hundreds of millions of dollars for the contamination from mining in Idaho.
Federal agencies reported holding about $80 million in financial assurances for reclaiming phosphate mines in Idaho. Most of this amountover $66 millionis associated with the two most recently approved phosphate mines. Agencies reported holding an additional $11.5 million in financial assurances to cover site assessment and limited cleanup activities under EPAs Superfund program, but some of these are in the form of corporate guarantees, which the agencies have determined are riskier than other types of financial assurances. No financial assurances have been established to cover future cleanup costs because remaining cleanup actions have not yet been identified, according to agency officials.
section_title: What GAO Recommends
paragraphs: Among other things, GAO recommends that BLM document its financial assurance practice in policy and consult with the Forest Service to better protect the federal government from cleanup costs. In commenting on a draft of this report, Interior, the Forest Service, and EPA generally agreed with GAOs findings and recommendations.

section_title: Letter
paragraphs: Since the early 1900s, phosphate rock—the only economically viable  source of phosphorus used to make detergents, herbicides, and  fertilizer—has been mined on predominantly federal land in southeastern  Idaho, which is part of the Western Phosphate Field. The Western  Phosphate Field comprises about 86 million acres of land in the Rocky  Mountains from Utah and Colorado stretching north into Idaho, Montana,  and Wyoming. However, in 1996 selenium—a potentially toxic chemical  that leached out of the waste rock taken from phosphate mines—was  discovered in southeastern Idaho, and since then an estimated 600 head  of livestock (including horses, cattle, and sheep) have died after ingesting  plants or surface water containing high concentrations of selenium. As  was common practice at these mines, to facilitate the removal of the  phosphate rock, operators had used the waste rock, called overburden,  as backfill and placed it in large external waste rock piles or in adjacent  valleys. The selenium present in the overburden has been transported  by rain and snow run-off into groundwater or into streams and rivers  inhabited by native fish, and accumulated in ground cover plants that  have been consumed by livestock and other animals such as deer and  elk. Much of the mining in this area has taken place on federal land, and  federal agencies are currently overseeing mining operations or selenium  cleanup at 18 phosphate mines, of which 5 are active and 13 inactive.the 18 mines, 16 are contaminated with selenium and most are being  assessed under the Comprehensive Environmental Response,  Compensation, and Liability Act (CERCLA), also known as Superfund, for  future cleanup.
The phosphate reserves being mined in southeast Idaho contain  phosphate formations that are thicker and richer, on average, than in the  other states and account for about 30 percent of total U.S. reserves,  according to the U.S. Geological Survey. The Western Phosphate Field  represents one of two commercially-viable phosphate reserves in the  nation—the other is located primarily on private land in the southeastern  United States. About 80 percent of the phosphate reserves in  southeastern Idaho lie underneath land managed by the Department of  Agriculture’s Forest Service as part of the 3-million acre Caribou-Targhee  National Forest.
Phosphate deposits on these lands are leased to mine operators by the  Secretary of the Interior under the Mineral Leasing Act of 1920, which,  with the regulations implementing the act, creates a system to lease  these resources and charge a royalty for their extraction. Interior’s Bureau  of Land Management (BLM) is responsible for issuing leases for solid  mineral deposits, such as phosphate, on federal land. Under the  provisions of the Mineral Leasing Act, BLM issues leases for 20 years  and as long thereafter as the operator maintains compliance with lease  terms and other conditions, but the leases are subject to readjustment  every 20 years, at which time BLM has the opportunity to modify lease  terms and conditions. For federal phosphate leases, BLM is responsible  for approving mine operators’ plans of operation for proposed mines and  is authorized to monitor mine operations during production and to ensure  the mine operators complete reclamation once the operations have  ceased. In overseeing phosphate mining, BLM works with other federal  agencies, including the Forest Service; Interior’s Bureau of Indian Affairs  (BIA) and Fish and Wildlife Service (FWS); the Environmental Protection  Agency (EPA); and the U.S. Army Corps of Engineers (Corps). BLM also  works with state agencies, including the Idaho Department of  Environmental Quality (IDEQ). This involves coordinating inspections,  enforcement, and mine-plan reviews and giving consideration to federal  laws, such as the National Environmental Policy Act (NEPA),  Endangered Species Act, and Clean Water Act,plans that BLM and the Forest Service have developed.
BLM requires mine operators to provide financial assurances to ensure  that they meet the obligations specified in their leases and permits, such  as paying royalties and complying with requirements for mine operations  and reclamation. If the mine operator fails, for example, to reclaim a  mine site after production has ceased or to pay federal royalties, BLM can  demand payment from the financial assurance to cover the obligation.  Other agencies may also hold financial assurances for activities  associated with mining. For example, the Forest Service can require that  mine operators post financial assurances when obtaining permits to  construct roads through a national forest to access a leased site.  Additionally, federal agencies, including EPA, can obtain financial  assurances from mine operators to help ensure performance in  accordance with settlement agreements negotiated under CERCLA for  assessing and cleaning up contamination from mines.
You asked us to review issues surrounding the oversight and cleanup of  phosphate mines on federal lands. This report examines the (1) extent to  which federal agencies’ oversight of phosphate operations has changed  since the discovery of selenium contamination in Idaho in 1996, and  whether those changes appear sufficient to help the agencies prevent  future contamination; (2) actions that federal agencies and mine  operators have taken to assess and remediate contamination from  phosphate mining on federal land, amounts they have spent on these  actions, and estimated remaining costs; and (3) types and amounts of  financial assurances in place for phosphate mining operations and the  extent to which these assurances are likely to cover future cleanup costs.
To address the first objective, we reviewed relevant agency documents  and reports created both before and after 1996. These include BLM’s and  the Forest Service’s land-use plans; BLM records of decision for new  mine plans and associated NEPA documents; and BLM lease and bond  reports. We interviewed officials with BIA, BLM, FWS, and the Office of  Natural Resources Revenue, within the Department of the Interior; the  Forest Service; EPA; the Corps; and IDEQ. We also interviewed  representatives of the three phosphate mine operators who operate in  Idaho and visited the phosphate mines operating as of June 2011. To  address the second objective, we reviewed BLM, Forest Service, EPA,  and IDEQ documents and reports on the status of assessment and  cleanup efforts, and the related settlement agreements with the mine  operators. We obtained data on agency expenditures from Interior, BLM,  FWS, the Forest Service, EPA, and IDEQ, including the source of the  funds, and data on the amount of expenditures reimbursed by mine  operators under the CERCLA settlement agreements. To evaluate the  reliability of these data and determine their limitations, we reviewed the  agencies’ internal controls of their data systems and interviewed agency  officials and determined that the expenditure data were sufficiently  reliable for our purposes. To address the third objective, we obtained  financial assurance data from BLM, BIA, the Forest Service, and EPA,  including data on financial assurances held by Idaho state agencies for  operations on federal land. To evaluate the reliability of the financial  assurance data, we interviewed agency officials, examined agency  records, and cross-checked the data with the financial assurance  amounts listed in agency databases and CERCLA settlement  agreements, and determined that these data were sufficiently reliable for  our purposes. To obtain additional perspectives on the issue of  phosphate mining, we also interviewed representatives from regionally- focused environmental advocacy groups, including the Idaho  Conservation League and the Greater Yellowstone Coalition. Appendix I  describes our scope and methodology in more detail.
We focused our report on agencies’ and mine operators’ activities in  Idaho for two primary reasons. First, phosphate-mining operations on  federal land are generally limited to the Western Phosphate Field, and all  but one of these operations are located in Idaho. Second, the occurrence  of selenium contamination resulting from phosphate mining operations on  federal lands is currently limited to Idaho; similar levels of contamination  have not been discovered in the neighboring state where a portion of the  Western Phosphate Field is mined.
We conducted this performance audit from May 2011 through May 2012  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Phosphate is used in the manufacture of a variety of products, including  toothpaste, soft drinks, and dishwashing and laundry detergents. Over 95  percent of the phosphate produced in the United States, however, is used  in the manufacture of fertilizers and animal feed supplements. This section  provides information on phosphate mining in Idaho, the phosphate-leasing  process, the mine plan approval process, the Clean Water Act permitting  process, and the CERCLA assessment and remediation process.
subsections: section_title: Phosphate Mining in Idaho
paragraphs: Roughly 12 percent of the phosphate currently produced in the United  States comes from the five active mines located in southeastern Idaho on  lands managed by BLM, the Forest Service, the State of Idaho, and  private landowners. In addition, phosphate mining occurred historically  on nearby lands in Idaho leased by the Shoshone-Bannock Tribes on the  Fort Hall Indian Reservation. The entire area of southeastern Idaho is at  the center of the Western Phosphate Field that extends into six western  states. Figure 1 shows the location of the field.
Three mine operators currently mine phosphate at the five active mines in  southeastern Idaho. At each of these mines, operators use drilling and  blasting to expose the layers of phosphate ore so that it can be excavated  and hauled by truck, train, or pipeline to a facility for processing.these operators process the phosphate ore into fertilizer products, while  the third produces elemental phosphorus for use in herbicides. To access  the phosphate ore, the mine operators must also remove the  overburden—that is, the layers of rock that overlay, or in some cases are  layered between, the phosphate ore. The overburden was historically  placed in external waste dumps or used as backfill in mine pits or in  nearby valleys, creating what are known as cross-valley fills. Figure 2  shows an active phosphate mine in southeastern Idaho, and figure 3  shows an inactive phosphate mine with a cross-valley fill.
After horses grazing downstream from a cross-valley fill on federal land  became sick and had to be euthanized in 1996, it was discovered that  much of the overburden at phosphate mines in Idaho contains high  concentrations of selenium—a naturally occurring element that in trace  amounts is essential to the normal functioning of cells in animals but that  can be poisonous in large concentrations. The selenium present in the  overburden can be transported by rain and snow into the groundwater or  into rivers and streams, or picked up by the roots of plants growing on the  waste piles. The uptake of selenium contamination in vegetation or the  frequent ingestion of selenium by animals can cause it to build up over  time in a process known as bioaccumulation. BLM officials estimate that  over 600 head of livestock have died from selenium poisoning since 1996  in the area—including a 2005 incident involving the deaths of over 30  sheep near a mine on federal land. Adverse effects due to selenium  contamination have also been documented in birds and aquatic animals  such as fish and invertebrates. Figure 4 shows the phosphate mining  process and how it can result in the release of selenium.
In southeastern Idaho, selenium contamination has been measured at 3  of the 5 active mines, and at all 13 of the inactive mines. Table 1 shows  the 18 phosphate mines in southeastern Idaho and their production  status, and the locations where selenium contamination and livestock  deaths have occurred. See appendix II for more detailed information on  the acres and surface land ownership of these mines.
BLM issues phosphate leases under the Mineral Leasing Act of 1920.
BLM is responsible for leasing on federal lands, but it must consult with  the agency having jurisdiction over the surface, such as the Forest  Service, with respect to surface protection and reclamation requirements.  BLM will decline to issue a lease for phosphate mining if it is inconsistent  with an applicable land-use plan. According to BLM officials, most of the  86 phosphate leases in southeast Idaho were issued over 50 years ago,  and BLM last held a competitive lease sale in 1991. However, additional  lands have been leased through lease modifications—a non-competitive  process whereby a mine operator requests that BLM expand an existing  lease to include lands adjacent to an active or proposed mine. Leases are  for indefinite terms; however, BLM may make reasonable adjustments to  the lease conditions once every 20 years. Lessees have the right to  challenge the terms and conditions proposed by BLM through  readjustment, including a right of appeal to the Interior Board of Land  Appeals.need to obtain a special-use permit to use National Forest System land  for off-lease activities, such as the construction of access roads. Mine  operators must pay a royalty of at least 5 percent of the gross value of  phosphate rock and associated minerals produced, as well as annual rent  of up to $1.00 per acre. For leases that have not been in production for 6  or more years, mine operators pay an annual royalty of $3 per acre that  includes rent. According to officials with Interior’s Office of Natural  Resources Revenue, the federal government collected roughly $7 million  in royalties and rents from phosphate mine operations on federal land in  fiscal year 2010.
section_title: The Mine Plan Approval Process
paragraphs: Before conducting any operations under a lease, an operator must submit  to BLM a mine plan detailing the operations to be conducted. The mine  plan outlines basic mine operations and mine-specific production  measurement methods for calculating royalties. The mine plan also is to  include information on the environmental aspects of the proposed mine,  such as pollutants that may enter waters, measures to be taken to  prevent air and water pollution and damage to fish or wildlife, and a  reclamation plan. The reclamation plan details the steps the operator will  take to restore the land to its previous condition, including action such as  recontouring hillsides, removing roads and structures, and planting  vegetation. BLM is required to consult with other federal agencies, such  as those having jurisdiction over surface land, prior to approval and may  require modifications to an approved plan if conditions warrant. For  example, BLM may seek to modify a mine plan if selenium is discovered  at the site after operations begin. After the approval of a mine plan, BLM  sets a financial assurance amount for the mining operation. Financial  assurances may cover individual leases or all leases for a single lessee in  a state or nationwide. The minimum amount for an operator is $5,000 for  individual leases, $25,000 for all of the operator’s leases statewide, or  $75,000 for all of the operator’s leases nationwide. BLM may enter into  agreements with states whereby any financial assurance provided to a  state would also satisfy BLM’s requirements. BLM will release a financial  assurance when it determines that the operator has (1) paid all royalties,  rents, penalties, and assessments; (2) satisfied all lease obligations; (3)  reclaimed the site; and (4) taken effective measures to ensure that the  mineral prospecting or development activities will not adversely affect  surface or subsurface resources. The Forest Service may also require  operators to post financial assurances for activities associated with  special-use permits.
In association with the mine approval processes, BLM—in cooperation  with the Forest Service if National Forest System land is involved—must  evaluate the proposed mine under NEPA. NEPA requires federal  agencies to evaluate the likely environmental effects of a proposed  project using an environmental assessment or, if the project is likely to  significantly affect the environment, a more detailed environmental impact  statement (EIS). EPA officials told us that EPA is required to review, and  issue written comments on, each draft EIS, which BLM may accept or  reject. As part of the NEPA process, and also to comply with the  Endangered Species Act, BLM and the Forest Service may also  undertake a biological assessment to identify endangered or threatened  species and critical habitat that may be affected by mine operations. If  BLM and the Forest Service determine that a mine may affect an  endangered or threatened species, FWS may issue a biological opinion  as to whether the activity is likely to jeopardize the continued existence of  the species. If FWS finds that the activity will not jeopardize the species,  its opinion will still list measures that can be taken to minimize impacts on  the species. The outcomes of these analyses may affect BLM’s final  decision on an operator’s mining plan.
Mine operators may also need to work with other agencies to obtain  additional permits or certifications before they can begin mining  operations. For example, operators must obtain a permit under section  404 of the Clean Water Act from the Corps for the discharge of dredged  or fill material into waters of the United States at specified disposal sites.  Such discharges can include disposal of mine overburden. In addition,  operators must obtain a permit under Section 402 of the Clean Water Act  from EPA for discharges of storm water runoff that is contaminated by  contact with certain materials such as overburden. Under such permits,  operators may need to implement technology-based controls to protect  waters, but operators may also be required to implement other controls  based on the quality of the water into which they are discharging.
In addition, under section 303(d) of the Clean Water Act, states must  establish a Total Maximum Daily Load (TMDL) for any water body that  cannot meet applicable water quality standards even after technology- based controls are applied to sources of water pollution. The TMDL  represents the total amount of a pollutant that can be discharged into a  water body each day without exceeding the water quality standard for that  water body. The state of Idaho has identified selenium as a substance  impairing water quality in some of its waters, but it has not yet established  any TMDLs for selenium. provides states with the opportunity to object to the issuance of federal  permits and licenses, including section 404 or 402 permits that may affect  water quality in the state. Accordingly, an operator seeking a federal  permit for a project that may affect water quality in Idaho must also seek  section 401 certification for the proposal from IDEQ.
Section 303(d) of the Clean Water Act does not provide any specific deadline for the  development of TMDLs.
section_title: The CERCLA Assessment and Remediation Process
paragraphs: Environmental contamination discovered at a mine may require  remediation under CERCLA, the federal government’s principal program to  respond to releases or substantial threats of releases of hazardous  substances, pollutants, or contaminants which may present an imminent  and substantial danger to the public health or welfare. Under CERCLA, the  federal government has the authority to compel parties responsible for  contaminating sites to clean them up, or to conduct cleanups itself and then  seek reimbursement from the responsible parties. The National Priorities  List (NPL) is EPA’s list of the nation’s most contaminated sites, and  cleanups of these sites are typically expensive and lengthy. For NPL sites  on Forest Service or BLM land, the land management agencies and EPA  work together under interagency agreements to implement response  actions. For non-NPL sites on Forest Service or BLM land, the land  management agencies take the lead on implementing CERCLA response  actions, except for emergencies which have been delegated exclusively to  EPA.
In enforcing CERCLA, federal agencies generally attempt to reach an  agreement—known as a settlement agreement—with responsible parties  (such as mine operators or other entities) to perform and pay for site  cleanups once contamination has been discovered. Under these  agreements, responsible parties may be required to post a financial  assurance to ensure the performance of agreed-upon cleanup actions.  However, there are currently no regulations that require mine operators to  provide such financial assurances; agencies and responsible parties  negotiate these terms in each settlement.  Under CERCLA, EPA is  required to issue regulations requiring certain businesses that handle  hazardous substances to demonstrate their ability to pay for  environmental cleanup costs, but the agency has not yet issued such  regulations. However, the agency expects to propose such a rule for  certain types of mining, which could include phosphate mining, in 2013,  according to EPA officials.
EPA has model settlement agreements to help guide negotiations.
After contamination has been identified, the agency taking the lead on the  cleanup initiates a process to investigate the extent of the contamination,  decide on the actions that will be taken to address contamination, and  implement those actions. The CERCLA program has two basic types of  cleanup: (1) cleanups under the removal process, which generally  address short-term threats, and (2) cleanups under the remedial action  process, which are generally longer-term cleanup actions.
Removal actions include (1) time-critical removals for threats requiring  action within 6 months, and (2) non-time-critical removals for threats  where action can be delayed to account for a 6-month planning  period. As shown in figure 5, the non-time-critical removal process  involves three primary phases, (1) a site evaluation, including site  investigation and engineering evaluation/cost analysis, to characterize  the site and identify and analyze removal alternatives; (2) selection  and implementation of the removal action; and (3) monitoring and  maintenance.
The remedial action process begins with a remedial investigation and  a feasibility study to characterize site conditions, assess the risks to  human health and the environment, and to evaluate various options to  address the problems identified, among other things. These findings  and decisions are documented in a record of decision. Implementation  of the remedial action is divided into two parts: (1) remedial design, a  further evaluation of the best way to implement the chosen remedy;  and (2) remedial action, the implementation of the remedy selected.  When physical construction of all remedial actions is complete and  other criteria are met, the lead agency deems the site to be  construction complete. Most sites then enter an operation and  maintenance phase, wherein the responsible party or the state  maintains the remedy, while the lead agency conducts periodic  reviews to ensure that the remedy continues to protect human health  and the environment. For example, at a mine site with piles of  overburden contaminated with selenium, the remedial action could  consist of building a cap over the contaminated soil, while the  operation and maintenance phase would consist of monitoring and  maintaining the cap. The remedial action process is a more  transparent and comprehensive process with more distinct steps than  the removal action process. For example, CERCLA and its  implementing regulations provide more opportunities for the public to  participate in the remedial action process, including participation in  site-related decisions, than are required in the removal action  process, which may be limited to a single comment period. The  remedial investigation/feasibility study process is subject to more- detailed data requirements than the site evaluation process for a  removal action, and under section 121 of CERCLA, remedial actions  generally require completed sites to achieve certain cleanup  standards, which is not necessarily the case for removal actions.  Finally, the remedial action process favors permanent remedies over  short-term abatement. Figure 6 shows the remedial action process.
Responsibility for selenium contamination in southeastern Idaho has been  the subject of a recent CERCLA lawsuit. Under CERCLA, a party can be  held liable for cleanup costs as an owner or operator of a facility where  there was a release of hazardous substances or if the party arranged for  disposal of hazardous substances. In 2009, a phosphate mine operator  sued to compel the federal government to share the costs of cleaning up  contamination under CERCLA at four mines, asserting that the  government was an owner, arranger, and operator of the waste disposal  sites at those mines. In the first step of the litigation, the court held in  2011 that the government was an owner, arranger, and operator.  Specifically, the court found that the government owned the mine site,  owned the middle waste shale that is the source of the hazardous  substance involved (selenium), had the authority to control the disposal of  that substance, and exercised some actual control over the disposal of  that substance. Furthermore, the government managed the design and  location of waste dumps at the mines and regularly inspected the mines  to ensure compliance with the mining plans and waste disposal  guidelines. The court did not determine the amount of cleanup costs the  government owes, deferring that to a subsequent phase of the litigation.  The parties have since agreed to settle the issues remaining in the  case.
section_title: Agencies Have Provided More Rigorous Oversight of Phosphate Mining Since 1996, but Oversight Gaps Remain
paragraphs: Federal agencies have taken steps to strengthen their oversight of  phosphate mining on federal land since selenium contamination was  discovered in 1996 by requiring more detailed environmental analysis and  reclamation plans, requiring financial assurances that provide more  coverage, hiring additional staff, and revising land-use plans.  Nevertheless, oversight gaps remain that limit the agencies’ ability to  effectively address contamination from phosphate mining operations.  These gaps include inadequate documentation of BLM’s financial  assurance practices, inconsistent coordination on financial assurances,  an ineffective process for resolving agency disagreements on lease terms  and conditions, and insufficient mechanisms for overseeing activities  being conducted by third party contractors.
subsections: section_title: Agencies Have Strengthened Their Oversight to Address Selenium Contamination
paragraphs: In an effort to reduce the likelihood that new and ongoing mines will result  in additional sources of selenium contamination and improve the  management of ongoing CERCLA cleanups, BLM and the Forest Service  have taken the following steps to strengthen their oversight of phosphate  mining operations.
BLM requires a more detailed environmental analysis for approving  mine plans. According to BLM officials, in 1998 the agency began to  prepare a full site-specific EIS when evaluating new mine plans,  instead of relying on a 1977 areawide programmatic EIS and  conducting site-specific environmental assessments that were more  limited in scope, as had been done previously. Under the new EIS,  officials told us, they conduct enhanced environmental testing and  analysis to understand the potential sources of selenium at proposed  mine sites, investigate how proposed mines would affect surface  water and groundwater, and evaluate engineering models for options  to prevent or mitigate the contamination.
BLM requires more comprehensive reclamation plans. BLM officials  told us that the agency now requires mine operators that propose new  mine sites to develop more comprehensive reclamation plans than  operators did previously. For example, mine operators are now  generally required to agree to backfill open mine pits and not  construct cross-valley fills; separate selenium-contaminated waste  from other waste; engineer systems of natural or synthetic caps and  covers for both reducing the infiltration of surface water into waste  piles that can contribute to groundwater contamination and preventing  the uptake of selenium by the roots of vegetation planted for  reclamation; and select plants for revegetating mine sites that  minimize selenium uptake and reduce the risk of ingestion by  livestock and wildlife. In addition, the new mine plans provide for  enhanced inspection of the mine operations in order to, among other  things, monitor groundwater to detect selenium contamination early  and oversee the construction of waste pile caps and covers. Since the  state of Idaho decided to list parts of the Blackfoot River as impaired  for selenium under section 303(d) of the Clean Water Act in 2002,  BLM has also been requiring mine operators to demonstrate through  their mine and reclamation plans that the mines will not add any  measurable selenium contamination to the river and its tributaries.
BLM requires full-cost financial assurances for new mines. BLM  officials told us that the agency decided in 2001 to set financial  assurances for new mining operations using a formula based on the  estimated full cost of reclaiming the site—meaning that, if the mine  operator defaults on its reclamation obligation, the financial assurance  would be adequate for BLM to hire contractors and incur oversight  and overhead costs to perform the work—plus 3 months of estimated  royalties. In the past, BLM officials told us, as agreed with the state of  Idaho, BLM generally set financial assurance amounts at not more  than $2,500 per acre of surface disturbance, regardless of the  potential cost of reclamation. The financial assurances for the new  mines are substantially higher than those set under the per-acre  calculation. For example, one mine approved in 2011 was required to  provide a financial assurance valued at nearly $22 million; based on  general past practices, that financial assurance would have been set  at about $1.7 million, according to our analysis. The adequacy of  these larger financial assurances for reclamation has not yet been  tested, however, because all of the mines at which they have been  required are still active. BLM officials told us that they generally have  not increased or decreased financial assurance amounts for inactive  phosphate mine operations because most of those mines will require  further remediation for selenium contamination under CERCLA, and  the costs to reclaim and remediate those sites—which would form the  basis for any adjustment in the financial assurance amounts—have  not yet been estimated.
BLM and the Forest Service have made changes to readjusted  leases, and BLM has denied lease relinquishments. To help ensure  that phosphate mine operators are liable for any environmental  damage they may cause, BLM and the Forest Service jointly devised  a lease stipulation that has been included in every lease readjustment  since 2002, covering a total of 63 leases. Under the new stipulation,  the mine operator agrees to pay for certain environmental damage it  causes and, when requesting that a lease be relinquished, to  conduct an environmental site assessment of the mine site to identify  any possible contamination. BLM also made other changes, such as  the addition of a notification to phosphate lessees that details the  information that should be included in a proposed mine plan, and  language stating that lessees will be required to comply with  CERCLA, as well as other environmental laws. BLM officials told us  they intend to use the environmental site assessment in evaluating  whether to allow the operator to relinquish the lease. Until the lease is  relinquished, BLM can maintain the financial assurance associated  with the lease, and any terms and conditions of the lease including  reclamation obligations remain in effect. BLM officials told us that their  practice has been to deny lease relinquishments if there are any  indications that further CERCLA cleanup may be necessary to  address selenium contamination, and that they last relinquished a  phosphate lease in 1997 at a site where no phosphate production had  occurred. No phosphate mine operators requested a lease  relinquishment from 1993 through 2003, and since 2003, BLM has not  approved any of the 8 requests it has received for lease  relinquishment, according to BLM officials.
BLM and the Forest Service have taken some steps to supplement  staff resources. Since selenium contamination was discovered in  1996, BLM and the Forest Service have combined their mine  oversight field staff in southeastern Idaho into a minerals branch  under an interagency initiative known as Service First. According to  BLM officials, this initiative has allowed the agencies to eliminate  redundant mine oversight, increase efficiency, and accomplish more  work. BLM and the Forest Service have also hired additional staff to  help manage the increased workload associated with overseeing new  and ongoing mines. For example, the Forest Service has, among  other things, created a new position to oversee its selenium  remediation efforts. This position is currently held by a former EPA  employee with 15 years of experience managing CERCLA cleanups.  In addition, BLM has arranged to have mine operators pay for third- party contractors to support BLM staff in certain aspects of mine  oversight. For example, mine operators have paid contractors to  prepare EISs, and BLM has directed two mine operators to enter  into and pay for contracts with third parties to provide monitoring and  other services associated with constructing and implementing cover  systems for waste rock. BLM has also asked mine operators to  reimburse it directly to fund two BLM positions to conduct mine  oversight. Despite these efforts, BLM officials in Idaho told us that  they still face challenges in meeting their workload demands,  particularly because changes in the oversight process since 1996  have required additional time and effort to implement. For example,  BLM officials told us that it typically takes 5 years to complete an EIS  for a proposed new mine, and this process can incur contractor costs  of over $2 million. In contrast, BLM could complete the environmental  assessment process it used previously in 2 years using agency  resources.
BLM and the Forest Service have revised their land-use plans to  address contamination. BLM began the process of revising its land- use plan for the area covering the Idaho portion of the Western  Phosphate Field in 2003, and in 2010 issued a final EIS for the draft  plan that provides direction for managing phosphate activities,  preventing contamination, and setting standards for contaminants.  BLM officials told us that these changes are intended to help ensure  that phosphate mine operators provide adequate financial assurances  and that operators adequately reclaim mine sites, including preventing  selenium contamination. BLM officials told us that they expect to  approve the record of decision for the plan in 2012. Similarly, the  Forest Service issued a revised forest plan for the Caribou National  Forest in 2003 that set new standards and guidelines for phosphate  mine development on forest lands to help detect and prevent  selenium contamination. For example, the revised plan contains new  standards that, among other things, stipulate that vegetation used in  reclamation must be monitored for bioaccumulation of hazardous  substances, such as selenium, and that financial assurances should  be based on the estimated full cost of reclamation and in place before  the mine operator disturbs the land surface.
section_title: Oversight Gaps Remain in Agency Policy and Coordination
paragraphs: We identified four gaps in the agencies’ oversight efforts that could limit  their ability to address ongoing problems with selenium contamination.  First, although BLM has strengthened its oversight of new phosphate  mines by requiring that operators provide financial assurances to cover  the estimated full cost of reclamation, BLM has not documented this  practice in its official agency policy. In a 2002 internal evaluation of  financial assurance policies, BLM recognized that its practices for  phosphate mines in Idaho are not reflected in current policy and  determined that the agency should revise the manual associated with this  program to recognize these practices. However, BLM officials told us  that the agency has not yet done so. As noted in the Standards for  Internal Control in the Federal Government, agency policies should be  clearly documented and readily available for examination to ensure  effective program management. Without documenting its bonding  practices in official agency policy, BLM cannot be assured that the current  full-cost financial assurance practices for phosphate mines in Idaho will  be implemented completely and consistently.
Second, according to Forest Service officials, since at least 2006, BLM  has not consistently coordinated with the Forest Service about the  financial assurances for phosphate mining operations on National Forest  System land. BLM must consult with the agency that administers the  surface land prior to issuing a lease and, generally, regarding the surface  protection and reclamation requirements of the lease. Forest Service  officials told us that they are not consistently consulted about the  appropriate level of financial assurances nor made aware of the decisions  regarding financial assurances being made by BLM. BLM and the Forest  Service have an interagency agreement that includes procedures for  coordinating on issues involving licenses, permits, and leases, but this  agreement does not expressly discuss issues related to financial  assurances. Similarly, BLM and the Forest Service have drafted an  agreement covering the sharing of staff and resources under their Service  First initiative in Idaho, but this draft agreement does not provide details  on the steps the agencies should take to coordinate on financial  assurances. The resulting inconsistency in coordination is of particular  concern to Forest Service officials, because they consider financial  assurance amounts, particularly for existing mines, to be potentially  inadequate to cover the estimated reclamation costs. These officials told  us that additional communication and coordination with BLM when  establishing and reviewing the adequacy of financial assurances would  allow them to offer relevant information that might help BLM officials in  setting bond amounts. They also noted that additional coordination would  help ensure that the mine operator is acting in accordance with the  portions of the forest plan specifying that financial assurances should be  adequate to cover the full cost of reclamation and should be in place  before surface disturbance occurs. BLM officials told us that while they do  coordinate with the Forest Service, it tends to be on a case-by-case basis  and that in some instances they are limited in their ability to coordinate by  insufficient staff.
Third, BLM and the Forest Service have not in all cases been able to reach  agreement on lease terms and conditions to include when issuing new  leases and readjusting existing leases. BLM and the Forest Service have  an interagency agreement that states the agencies will coordinate at the  local level on issues involving lease terms and conditions, and at the  headquarters level on issues involving agency-wide lease terms and  conditions. However, the agencies do not have a detailed process for doing  so in a timely manner. For example, beginning in 2010, BLM and the  Forest Service discussed potential changes proposed by the Forest  Service to the terms and conditions in three existing phosphate leases.  According to BLM and Forest Service officials, although BLM made some  of the changes the Forest Service was seeking, most of the substantive  changes being proposed by the Forest Service necessitated coordination  with BLM’s Washington, D.C., headquarters because they would require  changes to the standard leasing forms used by BLM. Subsequently, in  December 2011, the Forest Service proposed several changes to BLM’s  general lease terms and conditions to BLM’s Washington, D.C.,  headquarters office that, in the Forest Service’s view, would better protect  the government from potential liability associated with selenium  contamination in the future, particularly in light of the lawsuit noted earlier.  However, as of April 2012, the agencies had not yet reached agreement on  whether or how to change the general lease terms and conditions. During  this period, BLM has renewed three phosphate leases for another 20 years  without including the changes the Forest Service was seeking, in part to  meet the deadline for renewing the leases. In commenting on a draft of this  report, Interior noted that an additional reason the leases were renewed  without including the Forest Service’s proposed changes was a difference  in professional judgment between officials of the two agencies. Without a  timely process for resolving disagreements on the part of BLM and the  Forest Service regarding lease terms and conditions, we are concerned  that BLM may again readjust leases or issue new leases in the future  without having resolved disagreements that may exist between the  agencies about proposed lease terms and conditions. For Forest Service  officials, this is of particular concern because 16 leases on Forest Service  land are scheduled for readjustment in the next 5 years, and once a lease  is readjusted, as noted earlier, its provisions are in effect for 20 years. In  commenting on a draft of this report, both Interior and the Forest Service  told us they have begun working to improve the coordination process.
Fourth, BLM does not have mechanisms in place for overseeing all  activities that are being conducted by third-party contractors, and the  agency could not identify the statutory or regulatory provisions that  authorize or lay out its responsibilities with regard to directing and  overseeing such arrangements. In two instances, BLM has directed mine  operators to enter into and pay for contracts with third parties to provide  monitoring and other services associated with the construction and  installation of waste-pile cover systems and other related reclamation  activities on mine sites.However, in neither instance does BLM have a  written agreement with the mine operators to outline expectations for the  monitoring contracts or clearly define the roles and responsibilities of the  various parties. BLM officials told us that even without such agreements,  they believe that they have adequate controls in place and can take  enforcement actions over the work being done. For example, officials noted  that BLM, rather than the mine operator, selected the contractor for one  mine and will do so for the second. In addition, they noted that one of the  contracts between the operator and the third party is based on a statement  of work BLM wrote and that this contract repeatedly states that work is  being done for BLM and at BLM’s direction. Further, BLM officials told us  that even without such written agreements, under the applicable  regulations the agency can issue enforcement orders to compel the mine  operator’s compliance with established requirements, including those  contained in the records of decision approving the mine plans.  Nevertheless, we are concerned that without written agreements with mine  operators, BLM’s ability to ensure that the work is carried out to its  satisfaction is unclear. For example, while BLM officials cited the agency’s  ability to issue enforcement orders as a useful control mechanism, agency  officials have also noted limitations with this process. Specifically, they told  us that an operator may take many months to comply with an enforcement  order and that BLM lacks the authority to issue fines to, or impose fees on,  phosphate mine operators for failing to comply with an enforcement  order. Moreover, we have broader concerns because BLM could not  identify the statutory or regulatory provisions that specifically authorize or  lay out its responsibility with regard to the contractual arrangements the  agency has required mine operators to enter into.
section_title: Agencies and Mine Operators Have Focused on Assessing Contamination, Not Conducting Remediation, and Total Cleanup Costs Are Currently Unknown
paragraphs: Since selenium contamination was discovered in 1996, federal agencies  and phosphate mine operators in Idaho have largely taken actions  focused on assessing the extent of selenium contamination at the 16  mines where such contamination has been identified, and have  conducted limited remediation. The federal agencies reported having  spent about $19 million on this effort, about half of which has been  reimbursed by mine operators. The mine operators have incurred  additional costs for assessment and remediation activities, according to  agency officials, but the operators did not provide documentary evidence  to support these claims. Future cleanup costs are unknown because the  agencies have not selected final cleanup actions, although agency  officials informally estimate these costs could amount to hundreds of  millions of dollars.
subsections: section_title: Actions to Date to Address Selenium Contamination Have Included Lengthy Assessment Efforts and Limited Remediation
paragraphs: Since the discovery of selenium contamination in 1996, federal and state  agencies and mine operators have worked to assess the extent of the  contamination caused by phosphate mining, and have conducted some  limited remediation. Agency officials described a number of factors they  believe contributed to the amount of time spent on these efforts, including  a shift in their cleanup approach after nearly 10 years of activity.
According to federal and state officials, in 1997 the agencies and mine  operators formed a voluntary working group led by the mine operators to  collaborate on efforts to investigate the selenium contamination  discovered at that time. As part of this and other parallel efforts, mine  operators and the agencies, including the Forest Service and the U.S.  Geological Survey, spent 4 to 5 years collecting water-quality and other  data and publishing reports that helped quantify the scope of the  selenium problem, according to these officials. These data-gathering  efforts indicated that high concentrations of selenium were widespread  throughout the area.
According to Forest Service and state officials, given the broad scope of  the problem and the potential risks posed by the contamination identified  by these early efforts, federal and state agencies decided it would be  beneficial to move from a largely voluntary effort primarily paid for by  mine operators to one in which the agencies formally coordinated their  actions under federal and state authorities. As a result, in 2000 the six  agencies with authority over cleanup efforts— BLM, FWS, BIA, the Forest  Service, EPA, and IDEQ—and the Shoshone-Bannock Tribes signed a  memorandum of understanding that provided a framework for  coordinating their investigations of, and responses to, the  contamination.agencies would conduct (1) an areawide investigation to continue the  work the mine operators and agencies had initiated through the working  group and (2) site-specific investigations to address contamination  sources at individual mines.
The memorandum identified a two-pronged approach:  The areawide investigation began in 2001 and was led by IDEQ. The  agencies’ costs for this investigation were to be reimbursed by the  operators in accordance with the terms of a settlement agreement. The  investigation included gathering available data and identifying data gaps,  conducting water and other environmental sampling, completing risk  assessments that identified contaminant sources and ways in which  humans and wildlife could be exposed, and developing guidance based  on these risk assessments for remediation goals to potentially be used in  the site-specific efforts. Sampling efforts showed selenium levels above  state water quality standards; as a result, IDEQ listed more than 150  miles of streams flowing near and through the mines as impaired under  the Clean Water Act. According to a senior IDEQ official, water quality  monitoring work under the areawide investigation continues, although the  settlement agreement for the investigation expired in 2011.
Site-specific investigations began in 1998 and as of March 2012,  assessment activities were continuing, according to Forest Service and  EPA officials. Officials told us that the agencies originally decided to  conduct this assessment work under CERCLA’s non-time critical removal  process, during which a site investigation and engineering evaluation/cost  analysis is conducted before a removal action is selected and  implemented. According to EPA officials, this process is ideally suited for  isolated contamination sources that have proven remedies. Forest  Service and EPA officials told us that the agencies chose this route  because the officials responsible at the time believed it would be the  quickest way to control and abate immediate threats posed by the  contamination within waste rock dumps. From 1998 to 2004, the agencies  and mine operators entered into non-time critical removal process  settlement agreements at six mines, with final engineering evaluation/cost  analysis reports issued for two of these mines in 2006 and 2011.
According to EPA and Forest Service officials, however, in 2006—after  nearly 10 years of pursuing actions under the non-time critical removal  process—the agencies decided to switch their approach and address the  contamination issues at mine sites under the longer-term remedial action  process, resulting in further clean-up delays as additional site-specific  data were collected. In explaining the switch, Forest Service and EPA  officials told us that information generated from the areawide and site- specific investigations conducted prior to 2006 indicated that the  contamination issues at the mines were more complex and widespread  than originally suspected and that many mines would likely require long- term water treatment of a kind not typically implemented as part of a non- time critical removal action. As a result, according to EPA and Forest  Service officials, the approach offered by CERCLA’s remedial action  process would allow a more comprehensive investigation and evaluation  of the mines and remediation that would fully address long-term threats  posed by selenium. Forest Service officials told us that at three of the six  mines where non-time critical settlement agreements had been reached,  the Forest Service decided to continue with the non-time critical removal  process to address contamination at waste rock dumps, while also  negotiating settlement agreements with the mine operators to address  other contamination at these sites through the long-term remedial action  process. At the remaining three mines that were undergoing assessment  under the non-time critical removal process, EPA began negotiating  settlement agreements for remedial investigations and feasibility studies  rather than continuing with the non-time critical removal process.
As of March 2012, mine operators and agencies had begun work on the  first step of remedial action process—conducting remedial  investigations—at 7 of the 16 mines known to have selenium  contamination, including 5 of the 6 mines that were being addressed  under the non-time critical removal process. The agencies and mine  operators are still in the early stages of this process—none had produced  a complete remedial investigation report as of March 2012—and,  according to officials, completing this process at all mines will likely  require years of additional work before final cleanup remedies are  selected. For the remaining 9 of the 16 contaminated mines, a senior  Forest Service official told us officials are negotiating settlement  agreements at 3 mines but have not initiated the remedial action process  at the 6 others, either because the agencies have not had sufficient  resources to begin negotiations, the agencies have not reached  settlements with the mine operators, or (for two mines) the agencies are  addressing the contamination under provisions of the Clean Water Act or  the terms of the reclamation plan. Table 2 shows the CERCLA activities  that have occurred at these 16 mines, as well as estimated dates for  future activities.
Federal agencies have also begun using CERCLA to address harm to  fish and wildlife resources from contamination associated with the  phosphate mines in southeastern Idaho. According to FWS officials, in  2011 the agency initiated the first step in a CERCLA process known as  natural resource damage assessment, under which the agency may  ultimately seek damages for harm to natural resources caused by  phosphate mining and conduct natural resource restoration activities.  Through this process, mine operators may work cooperatively with federal  agencies to develop an assessment and implement natural resource  restoration activities, or the agencies may independently develop a  damage claim to be resolved through settlement or litigation. FWS  officials told us they are determining whether a natural resource damage  assessment is warranted and are working with other agencies in the area  to determine whether they are interested in participating in the process.
Since selenium contamination was discovered in 1996, federal agencies  and mine operators have taken some limited cleanup actions to address  highly problematic sources of contamination at three phosphate mines.
Smoky Canyon mine. In 2007, to help reduce the amount of selenium  leaching into a creek, a mine operator built a pipeline to divert water  around a contaminated waste rock dump at the Smoky Canyon mine  on Forest Service land. This action was the culmination of a 2003  CERCLA settlement agreement under the non-time critical removal  process. According to Forest Service officials, this waste rock dump— overburden placed into the bottom of a valley—was the source of one  of the highest concentrations of selenium in the area, and the  diversion appears to have substantially reduced the amount of  selenium coming out of the waste dump. Officials from EPA and  IDEQ, however, have voiced concerns with the effectiveness of the  diversion, especially after large amounts of precipitation in 2011  caused the system to overflow, allowing water to once again flow  through the waste rock and carry high amounts of selenium into the  creek. The mine, including this waste rock dump, is being assessed  as part of an ongoing remedial investigation and additional cleanup  measures to address the waste rock dump are expected to emerge  from the investigation.
North Maybe mine. As part of assessment work performed under the  non-time critical removal process, one mine operator identified  elevated selenium levels in ponds at the bottom of a large waste rock  dump at the North Maybe mine. These selenium levels posed a threat  to an adjacent creek if a large amount of precipitation should cause  the ponds to overflow into the creek. To mitigate this threat, in 2008  the Forest Service approved a time-critical removal action where the  mine operator excavated contaminated sediments from the ponds.  The operator then disposed of the sediments by adding them to a  separate waste dump at the site and covering them with organic  material to reduce exposure to precipitation. The Forest Service  project manager reported that care was taken to ensure that this  action would be consistent with potential future cleanup activities.
South Rasmussen mine. After water quality monitoring revealed that a  waste dump at the South Rasmussen mine was discharging selenium  into a creek without a required permit, EPA took an enforcement  action against the mine operator under the Clean Water Act. The mine  operator agreed to pay $1.4 million in fines and, according to an EPA  official, has begun to address the discharge by capturing the outflow  from the dump and storing it temporarily in ponds. According to EPA  officials, the mine operator will need to follow up with a more  permanent solution to address the contamination from the mine, but  the officials have not determined the most appropriate approach for  doing so. EPA officials told us they are currently determining whether  other active mines in the area may also potentially be violating the  Clean Water Act, but said that their efforts have been limited because  EPA has not had sufficient staff or funding. EPA officials told us they  may also initiate additional enforcement actions under the Clean  Water Act at inactive mines if they determine that no progress is being  made under CERCLA.
At a fourth mine, BLM officials told us they are working with a mine  operator to arrange for additional mitigation measures to stem an ongoing  selenium discharge, although such measures have not yet been taken.  Specifically, BLM officials told us they are working with the operator to  incorporate additional mitigation measures into a reclamation plan being  implemented at a portion of the Rasmussen Ridge mine that has already  been mined. BLM officials told us that they are able to take this somewhat  unusual approach because other portions of the mine are still active and  the operator has equipment on site that could be used to implement these  mitigation measures, and undertaking these efforts now would help  reduce costs for the operator. These officials also noted that the mine  operator has an incentive to agree to this approach because the operator  has other mine plan approvals pending with the agency and cooperating  would help demonstrate willingness to address contamination resulting  from this operator’s mining activities.
Since 1996, mine operators have also conducted mitigation work,  including testing remediation methods, outside the purview of CERCLA  settlement agreements, according to operator representatives with whom  we spoke. For example, these representatives told us that they took steps  to restrict livestock and wildlife access to ponds and other water at their  mines. In addition, according to one mine operator, the operators have  supported research projects related to selenium contamination, including  one that involved applying cheese whey and iron granules to  contaminated soils to test whether the materials could prevent plant  uptake of selenium, making it biologically unavailable.from this operator told us that some of these projects were successful,   A representative  although further research is needed before these techniques can be  applied on a large scale. Further, EPA officials also noted that mine  operators have taken action to reduce the uptake of selenium in  reclamation vegetation and better control stormwater runoff.
Agency officials told us that five factors have contributed to the length of  time spent conducting assessments at contaminated phosphate mines in  southeastern Idaho. First, the phosphate mines present complicated, large- scale contamination challenges that are unique to the area, according to  agency officials. While the agencies have experience dealing with other  contaminated, large-scale mines, especially hardrock mines, officials told  us that the phosphate mines in southeastern Idaho feature a complex  interaction of selenium in the waste rock with the surrounding surface water  and groundwater. EPA officials explained that complex systems such as  those found at the phosphate mines require considerable time to  understand, which is why the agencies have spent—and will likely continue  to spend—years assessing contamination at these mines.
Second, having multiple agencies with authority over some aspect of  cleanup at the mines—including different agencies acting as the lead at  different sites—has slowed down the assessment process, according to  officials with these agencies. For example, EPA and Forest Service  officials noted that it is time-consuming to coordinate the other agencies’  involvement, including obtaining, considering, and reconciling multiple,  often conflicting, opinions. EPA officials told us that technical  disagreements among agencies have led to delays in reviewing some  operators’ assessment documents. Further, according to these officials,  the situation is exacerbated at those mines located on private and federal  land where decision-making authority is shared, requiring those agencies  to come to full agreement before moving forward with decisions or actions  that affect the entire site. In addition, the agencies’ roles sometimes  needed clarification. For example, at one mine located on an Indian  reservation, agency officials said BIA and EPA spent 2 years negotiating  which agency would take the lead in managing cleanup work under  CERCLA because the agencies disagreed over which agency had the  legal authority to do so.
Third, the decision to switch from the non-time critical removal process to  the remedial action process resulted in delays. According to Forest  Service and EPA officials, the agencies and mine operators spent  additional time renegotiating settlement agreements at mines where they  had begun to address contamination under the non-time critical removal  process, delaying the process of negotiating new agreements at the  mines that had not yet been addressed. These officials also told us that  some of the data collected under the non-time critical removal process  needed to be validated by third-party external contractors, which resulted  in additional delays. Senior EPA and Forest Service officials who entered  the process after the non-time critical approach was selected told us they  believed the agencies could have started the CERCLA remedial action  process initially, in part because of the large sizes of the mine sites and  the high degree of uncertainty associated with them. EPA and Forest  Service officials told us that selecting the remedial action process from  the beginning may have streamlined the process of assessing  contamination.
Fourth, according to EPA, Forest Service, and state officials, an individual  mine operator’s level of participation and cooperation influences the  amount of progress that can be made at the contaminated mines, and a  difficult situation with a mine operator can slow down the assessment  process. According to agency officials, this has happened in several  cases. For example, as noted earlier, one mine operator sued to compel  the federal government to share liability for the costs of cleaning up  contamination under CERCLA at four mines; Forest Service officials told  us that responding to that lawsuit has taken resources and attention away  from managing assessment and cleanup activities at the other mines on  its land, resulting in additional delays to the assessment process.  Ultimately, the difficulties associated with this situation resulted in the  agency’s terminating the assessment work the mine operator had been  conducting at two of the mines and undertaking the work itself. In  addition, EPA officials told us they have had concerns with the quality of  the draft reports the mine operators produced for review by the agencies  as part of the assessment process. These officials told us the agencies  provided extensive comments on the draft reports, necessitating  significant rework by the mine operators.
Finally, the Forest Service did not have sufficient technical and  management expertise in place, or a sufficient focus on enforcement, in  the early years of the assessment efforts to successfully manage those  efforts under CERCLA, according to Forest Service and EPA officials. For  example, according to an internal Forest Service review, the CERCLA  knowledge and expertise of the Forest Service field staff were not  sufficient to address the complexity of the mines, which limited cleanup  progress. The review also found the agency did not hire enough technical  support contractors with relevant expertise to assist with oversight. As a  result, according to Forest Service officials and the review, it was difficult  for the Forest Service to critically assess the mine operators’ work, and  the agency did not always conduct oversight in a timely manner. In  addition, according to EPA officials, the Forest Service was not  aggressive in enforcing the terms of its early settlement agreements,  which led to a site assessment lasting 13 years in one case. Moreover,  these officials told us they believe the lack of enforcement occurred in  part because the Forest Service, unlike EPA, generally does not have  experience with CERCLA enforcement.
In 2008—12 years after the contamination was first identified—the Forest  Service recognized it needed staff with more CERCLA-specific  experience to manage the cleanup work, and in 2009 it hired a former  EPA official to manage its cleanup program. According to this official, the  Forest Service also hired more experienced project managers for each  mine and increased its use of technical support contractors to bolster its  oversight of mine operators. EPA officials told us they believe the  composition of the Forest Service staff is now appropriate for managing  the cleanup work at the phosphate mines but that having the Forest  Service manage the CERCLA cleanup work at the mines may continue to  pose certain challenges. For example, EPA officials told us they believe  the Forest Service lacks the institutional support for its CERCLA project  managers that is available to EPA’s project managers.
section_title: Since 2001, Agencies Have Spent About $19 Million to Oversee Assessment and Remediation, but Costs of Mine Operators’ Activities Were Unavailable
paragraphs: Federal and state agencies reported having spent about $19 million since  fiscal year 2001 to oversee assessment and remediation efforts at  contaminated phosphate mines in southeastern Idaho, according to our  analysis of federal and state data. Of this amount, these agencies spent  $10 million on general project management and assessment efforts that  reached across multiple mines, including time spent planning and  consulting over the cleanup process and working on the areawide  investigation, with the remainder spent primarily on oversight of activities  at individual mines.
Agencies also reported that the mine operators, who have carried out  most of the assessment and remediation efforts, have reimbursed the  agencies for 44 percent of the total agency expenditures under CERCLA  settlement agreements, and the rest has come from the agencies’  budgets. Figure 7 shows, by agency, expenditures paid from agency  budgets and expenditures reimbursed by mine operators.
As figure 7 shows, the agencies reported varying amounts of  expenditures and rates of reimbursement. The Forest Service, which is  managing cleanup efforts at 7 of the 16 contaminated mines, reported  spending the largest amount—about $9 million—an amount that  approaches the other agencies’ expenditures combined. The Forest  Service also reported incurring more expenditures that were not  reimbursed—about $6 million—than the other agencies, receiving  reimbursement for 25 percent of its expenditures. According to Forest  Service officials, the agency’s relatively low reimbursement rate occurs, in  part, because the Forest Service did not have cost recovery provisions in  its settlement agreements for any of its oversight work until 2006. BLM  and BIA also reported low overall rates of reimbursement because, for the  most part, these agencies did not have cost recovery arrangements at the  mines where they were most active until settlement agreements were  signed in 2008 or later. Instead, they paid for oversight at these mines in  the years leading up to the settlement agreements out of their budgets. In  contrast, EPA has managed cleanup at five mines and reported incurring  about $3 million in expenditures, of which 80 percent has been  reimbursed by mine operators. EPA officials told us that because of  limited funding and staff resources, as well as other factors, EPA Region  10 (which oversees phosphate assessment and cleanup activities in  Idaho) helps oversee CERCLA assessments primarily at mines where it  has negotiated cost recovery mechanisms as part of settlement  agreements, or expects to do so in the future. Similarly, FWS officials told  us that because of the agency’s own funding constraints, they have also  restricted their involvement to those mines where cost recovery is  available, also resulting in a high rate of reimbursement. According to the  EPA and FWS officials, this approach protects the agencies financially,  but it has also limited their ability to contribute their expertise across the  cleanup efforts. See appendix II for more detailed information on agency  expenditures and amounts reimbursed by mine operators at each of the  16 mines known to have selenium contamination.
The approximately $19 million in expenditures for agency oversight efforts  does not include the cost of assessment and remediation work the mine  operators have conducted, either under the terms of settlement  agreements or independently, according to agency officials. For example,  the operators’ costs for developing and implementing plans for water  quality sampling or constructing a diversion pipeline are not included in  the agencies’ expenditure total. We requested documentary evidence to  support the costs incurred by the mine operators but they did not provide  these documents to us. Anecdotal information suggests that the mine  operators have spent a significant sum on assessment and remediation  work. For example, one mine operator representative told us his company  spent $12 million on assessment and remediation actions taken under  settlement agreements from 2003 through 2011 at its three mines, and  another mine operator reported it had spent about $10 million on cleanup- related work at four of its mines. Nevertheless, without the mine  operators’ expenditure information, we cannot be assured of the accuracy  of the amounts the mine operators reported spending on assessment and  remediation work.
section_title: Agencies Have Not Developed Cost Estimates for Future Cleanup Actions Because Site Assessment Efforts Have Not Been Completed
paragraphs: According to EPA and Forest Service officials, they have not developed  cost estimates for future cleanup actions at any of the 16 contaminated  phosphate mines because agencies are still conducting assessment  work, and these officials will not determine cleanup actions until they have  completed this work. However, information from phosphate and hardrock  mines provides an indication of potential future costs that are likely, and  which, according to informal estimates provided by EPA officials, could  total hundreds of millions of dollars, in part because several of the mines  are likely to require long-term remedial actions that are typically costly to  implement.
According to EPA and Forest Service officials, the following two cleanup  actions, if required, would significantly influence cleanup costs at  phosphate mines in southeastern Idaho:
Long-term water collection and treatment. According to EPA officials,  the need for long-term water collection and treatment can be the most  costly remedial action at a mine site, primarily because water  collection and treatment can require ongoing activity for more than  100 years. Costs for this type of action include design; the initial  capital investment in infrastructure for collection, storage, and  treatment of the water; ongoing infrastructure upgrades and  replacements; and personnel costs for continual operation. Such  costs can be significant; for example, at another cleanup site in  Region 10, the Holden hardrock mine in Washington State, EPA and  the Forest Service have estimated the cost for long-term water  treatment will be about $47 million. EPA officials told us that, based  on information gathered to date, at least five phosphate mines may  require long-term water treatment.
Waste rock covers. According to EPA officials, the cost of consolidating  and capping large volumes of waste rock materials can vary depending  on the number of acres needing coverage, the type of cover required,  and the topography of the area to be covered. For example, the Forest  Service recently approved a cover, consisting of a clay layer, a  synthetic membrane, and soil, that will be implemented as part of a  non-time-critical removal action at one phosphate mine and is  estimated to cost about $17 million to cover roughly 100 acres of a  cross-valley fill. A synthetic cover recently required as part of the  reclamation plan at a new mine is estimated to cost about $29 million to  cover nearly 400 acres.term monitoring and maintenance can further increase the costs of  these covers.
According to a Forest Service official, long- Based on our review, several other factors add to the uncertainty about  the level of cleanup that will be required in the area, and the amount and  allocation of cleanup costs.
The selenium water quality standard is expected to change. According  to EPA officials, final remedial actions under CERCLA will be based,  in part, on the state’s water quality standard for selenium in rivers and  streams. This standard is based on a national recommendation issued  by EPA, which is in the process of updating its recommendation to  better protect fish and other aquatic organisms. After the new  recommendation is issued, according to EPA officials, Idaho will likely  adopt a new state standard, using the recommendation as a basis. If  the new standard is more stringent than the current standard, the level  of cleanup required may change as well, increasing the costs  associated with cleanup.
A total maximum daily load for selenium has not yet been established.
Because the streams in the Blackfoot River watershed—the main  watershed affected by selenium contamination in Idaho—have been  listed as impaired for selenium under section 303(d) of the Clean  Water Act, the state is required to establish a TMDL for selenium for  those waters. According to IDEQ and EPA officials, the state has  delayed developing the TMDL, in part because the ongoing CERCLA  assessment process is yielding valuable information about the  sources of selenium in the watershed and how these sources interact  with one another—and this information will be critical to helping the  state establish a TMDL for selenium. Once a TMDL is established, it  may inform pollution limits that are established for the mines that  directly discharge selenium to the watershed. According to EPA  officials, a TMDL would also likely help provide a road map for  handling the selenium contamination at the remaining mines where  CERCLA actions have not yet been initiated.
The government’s share of future cleanup costs is not yet determined.
One outcome of the lawsuit filed against the government by a mine  operator under CERCLA is that according to the court decision, the  government is potentially liable for costs associated with  environmental contamination at the four mine sites at issue in the  litigation. However, the court has not determined the government’s  share of the cleanup costs. As of April 2012 the government and the  mine operator were negotiating a proposed settlement regarding  allocation of past and future costs that will be final once approved by  the court. Because of the court’s decision holding the government  potentially liable, agency officials told us other mine operators may  also seek to have the government share cleanup costs with them. If  they are successful, the agency officials said the government’s costs  could ultimately be significant.
section_title: Agencies Hold Millions of Dollars in Financial Assurances for Site Reclamation and Assessment, but Some Are in the Form of Potentially Risky Corporate Guarantees
paragraphs: Federal agencies reported holding financial assurances for phosphate  mine operations in southeastern Idaho for about $91 million to cover (1)  mine reclamation and related activities and (2) site assessment and  limited remediation activities negotiated under CERCLA settlement  agreements. Specifically, the agencies reported holding financial  assurances valued at approximately $80 million to cover mine  reclamation and related activities and $11.4 million to cover site  assessment and limited remediation activities negotiated under CERCLA  settlement agreements. About $4.5 million of this amount was in the form  of corporate guarantees, a type of financial assurance that both BLM and  EPA have stated is potentially risky because corporate guarantees are  not covered by a specific financial asset. The agencies have not entered  into settlement agreements or established financial assurances to cover  future cleanup costs because, as described in the prior section, they have  not determined the actions that will be needed or the associated costs.
subsections: section_title: BLM and the Forest Service Reported Holding About $80 Million in Financial Assurances for Reclamation-Related Activities
paragraphs: As of March 2012, BLM reported holding about $75.2 million in  reclamation financial assurances for 13 of the 18 phosphate mines where  federal agencies are overseeing mining operations or cleanup activities.(The five mines without BLM financial assurances are all inactive and are  being assessed for cleanup under CERCLA.) Over 95 percent of this  amount—almost $72 million—is associated with the five currently active  mines, and nearly all of that amount—over $66 million—is associated with  the two most recently approved active mines, the Blackfoot Bridge and  Smoky Canyon mines. BLM also reported holding an additional $127,200  in financial assurances for eight leases where the operator is engaging in  exploratory activities but where mine operations have not yet commenced  and other unmined sites. Figure 8 shows the amount and composition of  BLM-held reclamation financial assurances for phosphate mines in Idaho,  including the amounts associated with each of the five active mines.
section_title: The Forest Service and EPA Hold $11.4 Million in CERCLA Financial Assurances for Site Assessment and Limited Remediation Activities, but Some EPA Financial Assurances May be Risky
paragraphs: As of March 2012, there were 6 mines undergoing CERCLA assessment  for which the Forest Service and EPA reported holding financial  assurances valued at $11.4 million. Such assurances are intended to help  ensure mine operators’ performance under CERCLA settlement  agreements. For one of these mines, the Forest Service holds a financial  assurance, which is valued at about $3.9 million and covers both a  CERCLA assessment and previous remediation work at that mine to  construct a water diversion pipeline, according to agency officials. For the  other five mine sites, EPA holds $7.5 million in financial assurances to  cover CERCLA assessments, according to agency officials.
About $4.5 million of the $7.5 million in financial assurances that EPA  holds for three of the five mines is in the form of corporate guarantees.  Corporate guarantees are promises by mine operators, sometimes  accompanied by a test of financial stability, to pay remediation costs, but  these guarantees do not require that funds be set aside by the operators  to pay such costs. As a result, for these three sites, EPA does not hold a  financial asset that it could use to pay for the work specified in the  settlement agreement should the operator fail to do so. EPA officials  noted, however, that these guarantees cover only the investigation and  planning stage of the process, and that the operator at these mines has  already successfully completed a significant portion of the activities under  an earlier removal settlement agreement. Nevertheless, EPA Region 10  has acknowledged the risk associated with corporate guarantees. In its  2009 Region 10 Mining Financial Assurance Strategy, the region noted  that the form of a financial assurance is as important as the amount and  stated that corporate guarantees are not a secure mechanism should a  company go bankrupt or have financial difficulties. As an example, the  region cited a corporate guarantee that it had accepted from an operator  of a mine smelter site in Washington State. When EPA requested a more  secure type of financial assurance, the operator filed for bankruptcy,  leaving the federal government with additional responsibility for the  cleanup costs at that site. Recognizing the inherent risks associated with  corporate guarantees, the region stated in its strategy that it would no  longer accept them as part of CERCLA consent decrees or settlement  agreements related to cleanup actions for mining operations.
Such concerns about corporate guarantees have been raised previously  by others. In 2000, for example, BLM stopped accepting corporate  guarantees for new mining operations, stating that they are less secure  than other forms of financial assurance, particularly in light of fluctuating  commodity prices and the potential for an operator to declare  bankruptcy. Moreover, as we reported in August 2005, EPA has stated  that corporate guarantees offer EPA minimal long-term assurance that a  company with environmental liability will be able to fulfill its financial  obligations. As a result, EPA and taxpayers may be exposed to  significant financial risk, especially at mining sites where one or a few  parties are liable for cleanups—as is the case for phosphate mining in  Idaho. We also noted in our August 2005 report that EPA’s selection of a  reliable financial assurance mechanism is particularly important given the  potential for large liabilities stemming from mining sites. EPA does not  have regulations on the use of corporate guarantees as financial  assurances under CERCLA, however. EPA is considering promulgating  regulations related to financial assurances for mining and other industries  and has solicited public comments on the risks associated with corporate  guarantees and the experiences of regulators who have attempted to use  them. EPA expects to publish a proposed rule outlining its approach to  financial assurances later in 2013, according to EPA officials.
section_title: Conclusions
paragraphs: Selenium contamination from phosphate mining has been a concern in  southeastern Idaho for over 15 years. Federal agencies have taken steps  to strengthen their oversight of phosphate mining on federal land since  selenium contamination was discovered in 1996 by requiring more  detailed environmental assessments and reclamation plans, requiring  financial assurances that provide more coverage, and hiring additional  staff. However, addressing the contamination has been a lengthy  undertaking with many factors contributing to the length of this process,  including the complexity and scale of the sites, sometimes-difficult  relations with mine operators, an initial lack of expertise and resources on  the part of the Forest Service, and the decision to switch to a more  comprehensive cleanup approach. Nevertheless, the fact remains that  after years of study and millions of dollars spent, the agencies and mine  operators are still years away from fully understanding the extent of  contamination in the area and many more years away from completing  actual mine cleanup.
The agencies have taken important steps aimed at preventing future  contamination, including BLM’s use of more rigorous oversight  procedures when considering or approving new mines, but gaps in  agency policies and coordination may result in missed opportunities for  the agencies to fully implement the approaches they have developed. For  example, while BLM’s practice of setting financial assurances to cover the  estimated full cost of reclamation for new phosphate mines may better  protect the government from future cleanup liability, the agency has not  documented this practice in official agency policy—lessening the certainty  that the practice will be consistently followed in the future. Likewise, the  lack of established coordination practices between BLM and the Forest  Service may result in cases where BLM may not give full or timely  consideration to the Forest Service’s input when establishing mine lease  terms and conditions or setting financial assurance amounts for mines in  southeastern Idaho. As a result, BLM in some cases may be basing its  decisions on incomplete information. Additionally, while BLM has  attempted to leverage its limited resources by requiring mine operators to  pay for contractors to help oversee reclamation work, it does not have  mechanisms in place to fully oversee such activities and could not identify  its authorities for directing and overseeing such arrangements. And  finally, EPA’s acceptance of financial assurances in the form of corporate  guarantees related to assessment (and, potentially, cleanup) activities  leaves the federal government at increased risk of shouldering more of  the financial burden for these tasks should the mine operators fail to carry  them out or declare bankruptcy. In its current efforts to draft regulations  for financial assurances under CERCLA, EPA has stated that it plans to  assess the risks associated with different forms of financial assurances,  including corporate guarantees, and the experiences of regulators to  assess the adequacy of various financial mechanisms—which we believe  is an important step in ensuring that the financial assurances accepted by  the federal government are adequately reducing the government’s  exposure for cleanup costs.
section_title: Recommendations for Executive Action
paragraphs: To ensure effective oversight of phosphate-mining operations and  reclamation and cleanup, we are making three recommendations to the  Secretary of the Interior and one to the Administrator of EPA. Specifically,  we recommend that the Secretary of the Interior direct the Director of  BLM to document the practice of requiring financial assurances to cover the  estimated full cost of reclamation in BLM’s official agency policy; work with the Chief of the Forest Service to develop a coordinated  process for (1) proposing and evaluating lease terms and conditions  for phosphate mines in southeastern Idaho, and (2) sharing  information on the amount and adequacy of financial assurances to  provide better coordination between federal agencies regarding  phosphate mine oversight; and analyze BLM’s authorities for directing operators to enter into third- party contracting mechanisms. If BLM confirms that it has the  authority, it should develop a policy document to ensure consistent  implementation, including a requirement that BLM reach written  agreement with operators regarding arrangements for third-party  contracting. Should BLM determine that it does not have the authority  to use such mechanisms—and should it wish to continue the  practice—it should seek appropriate legislation for doing so.
In addition, we recommend that the Administrator of EPA ensure that the  agency complete its plan to assess whether corporate guarantees are an  adequate financial mechanism, including giving due consideration to the  experience of EPA Region 10 and BLM in using such assurances. If EPA  determines that corporate guarantees are not an appropriate form of  financial assurance, then their use should be prohibited in the financial  assurance regulations that the agency expects to promulgate for the  mining industry.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided EPA and the Departments of Agriculture, Defense, and the  Interior with a draft of this report for their review and comment. EPA, the  Forest Service (responding on behalf of the Department of Agriculture),  and Interior generally agreed with our findings and recommendations, and  their written comments are reproduced in appendixes III, IV, and V  respectively. Each of these agencies also provided technical comments  which we incorporated as appropriate. The Department of Defense  declined to provide comments.
While the Department of the Interior generally agreed with our findings  and recommendations, it expressed concern that our discussion on  BLM’s coordination with the Forest Service on leasing activities could be  misleading. Interior noted that in some instances BLM does not accept  the Forest Service’s recommended changes to existing phosphate leases  because of differences in professional judgment, not because of a lack of  coordination. Furthermore, Interior noted that BLM and the Forest Service  have been discussing the Forest Service’s proposed revisions to the  standard lease terms and conditions for new leases to further protect the  government from potential liability associated with selenium  contamination, but that such discussions are necessarily detailed and  time consuming, and the lack of agreement to date does not constitute a  lack of coordination. In this context, the Forest Service also noted that it  places great value on its collaborative relationship with BLM, and is  committed to working with BLM to improve coordination and information  sharing. We have made changes to the report to provide additional  context and clarification regarding the agencies’ coordination efforts.  Nevertheless, while we acknowledge that BLM and the Forest Service  have begun efforts to improve their coordination on these issues, we  continue to believe that they would benefit from a clearer process for  coordinating in a timely manner and elevating issues to the headquarters  level when necessary.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretaries of  Agriculture, Defense, and the Interior; the Administrator of the  Environmental Protection Agency; the Chief of the Forest Service; the  Assistant Secretary for Indian Affairs; the Directors of the Bureau of Land  Management and Fish and Wildlife Service; appropriate congressional  committees; and other interested parties. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-3841 or mittala@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Key contributors to this report are listed in appendix VI.
section_title: Appendix I: Scope and Methodology
paragraphs: This appendix details the methods we used to examine the issues  surrounding the oversight and cleanup of phosphate mines on federal  lands. Specifically, we were asked to provide information on the (1) extent  to which federal agencies’ oversight of phosphate operations has  changed since the discovery of selenium contamination in Idaho in 1996,  and whether those changes appear sufficient to help the agencies  prevent future contamination; (2) actions that federal agencies and mine  operators have taken to assess and remediate contamination from  phosphate mining on federal land, amounts they have spent on these  actions, and estimated remaining costs; and (3) types and amounts of  financial assurances in place for phosphate mining operations and the  extent to which these assurances are likely to cover future cleanup costs.
For all objectives, we focused our report on agencies’ and mine  operators’ activities in Idaho for two primary reasons. First, phosphate- mining operations on federal land are generally limited to the Western  Phosphate Field, and all but one of these operations are located in Idaho.  Second, the occurrence of selenium contamination resulting from  phosphate-mining operations on federal lands is currently limited to  Idaho; such contamination has not been discovered in neighboring states  containing portions of the Western Phosphate Field.
To address the first objective, we reviewed federal laws and regulations  relevant to the federal agencies’ oversight of phosphate-mining  operations on federal land in Idaho, including the National Environmental  Policy Act (NEPA), the Mineral Leasing Act, the Clean Water Act, and the  Endangered Species Act. In addition, we reviewed relevant agency  documents and reports created both before and after 1996. These include  Bureau of Land Management (BLM) and Forest Service land-use plans;  BLM records of decision for new mine plans, and associated NEPA  documents; BLM instructional memorandums; BLM lease and bond  abstracts; and correspondence between BLM and the Forest Service  regarding lease stipulations. We interviewed officials with the Bureau of  Indian Affairs (BIA), BLM, the Fish and Wildlife Service (FWS), and the  Office of Natural Resources Revenue within Interior; the Forest Service;  the Environmental Protection Agency (EPA); the Army Corps of  Engineers; and the Idaho Department of Environmental Quality (IDEQ).  We also interviewed representatives of the three Idaho phosphate mine  operators and visited the three phosphate mines operating as of June  2011, and twelve of the sixteen mines where selenium contamination has  been detected. To obtain additional perspectives beyond those offered by  agency officials and mine operators, we also interviewed representatives  from the Shoshone-Bannock Tribes, on whose reservation one of the  largest phosphate mines is located, and from regionally-focused  environmental advocacy groups, including the Idaho Conservation  League and the Greater Yellowstone Coalition.
To address the second objective, we interviewed officials from BIA, BLM,  FWS, the Forest Service, EPA, IDEQ, the mine operators, and the  Shoshone-Bannock Tribes, and reviewed documents and reports on the  status of assessment and cleanup efforts and related settlement  agreements under the Comprehensive Environmental Response,  Compensation, and Liability Act (CERCLA). To determine the amount  federal and state agencies have spent on these actions and the amount  each agency received in reimbursement from mine operators, we  obtained expenditure and collections data from each agency where  available from fiscal year 2001 through fiscal year 2011. Specifically, for  EPA, we collected data from EPA’s Superfund Cost Recovery Package  Imaging and On-Line System, which included EPA’s expenditures at each  mine, as well as information on funds received from mine operators. For  BLM, we received data from BLM’s Management Information System for  fiscal years 2001–2008 and from Interior’s Financial and Business  Management System for fiscal years 2009–2011. Because BLM’s data  from these systems applied to cleanup work at Idaho phosphate mines  generally, we also collected mine-specific expenditure information where  available, including from the cost documentation packages that BLM  submitted to the mine operators for six mines as part of settlement  agreements to which BLM was a party. We received information on funds  BLM received from mine operators from Interior’s Federal Financial  System. For the Forest Service, we received data from the Forest  Service’s Foundation Financial Information System, which included the  Forest Service’s expenditures at each mine and funds received from mine  operators. For FWS, we collected data from cost documentation  packages submitted to the mine operators for five mines and the  areawide investigation where FWS was a party to a settlement  agreement, and from the Federal Financial System for additional  expenditures as well as funds received from mine operators. For BIA,  officials estimated their annual expenditures based on records kept  internally showing hours worked on cleanup at phosphate mines in Idaho.  For IDEQ, we received data from the department’s General Online  Reporting System, which included IDEQ’s costs as well as funds received  from mine operators.
To evaluate the reliability of these data and determine their limitations, we  reviewed the data obtained from each agency’s system as well as the  cost documentation packages generated by the agencies and sent to  mine operators. For each of these data sources, we analyzed related  documentation, examined the data to identify obvious errors or  inconsistencies, and compared the data we received with other published  data sources, where possible. We also interviewed officials from each  agency to obtain information on the internal controls of their data  systems. On the basis of our evaluation of these sources, we concluded  that the expenditure data we collected and analyzed were sufficiently  reliable for our purposes.
For all agencies, at least some of the expenditures they reported included  expenses paid to cover indirect costs associated with work performed by  the agencies, which is in accordance with the terms of many of the  settlement agreements. However, these indirect costs were not included  in all of the expenditure data shared with us. Therefore, in order to report  similar types of expenditures across agencies, we applied agency-specific  historic annual indirect cost rates to those expenditures we received  where it was not already included. In order to determine costs in constant  2012 dollars, we adjusted the amounts reported to us for inflation by  applying the fiscal year chain-weighted gross domestic product price  index, with fiscal year 2012 as the base year.
To determine estimated remaining costs for future cleanup actions at the  sites, we interviewed EPA, Forest Service, and BLM officials, and  reviewed reports from phosphate mines where CERCLA removal actions  have occurred or have been approved and mines with recently approved  reclamation plans that include measures to prevent selenium  contamination. EPA and Forest Service officials provided information  regarding likely cost drivers for cleanup at phosphate mines, and, to  provide context, EPA officials identified hardrock mines in the region with  similar general characteristics where these cost drivers are expected to  be applied.
To address the third objective, we first reviewed BLM, Forest Service, and  EPA regulations; BLM and Forest Service manuals; and BLM  memorandums to obtain agency financial assurance standards and  procedures. We then obtained financial assurance data from records  maintained by Idaho-based officials with BLM, the Forest Service, and  EPA, which included data on bonds held by Idaho state agencies for  operations on federal land. We also interviewed officials from these  agencies to obtain insights into agency financial assurance practices and  the extent to which current financial assurances are sufficient to cover  future cleanup actions. We evaluated the reliability of BLM financial  assurance data by interviewing BLM officials and corroborating the data  maintained by BLM officials in Idaho with data maintained in BLM’s  centralized database, known as LR2000. We evaluated the reliability of  Forest Service and EPA data by interviewing agency officials, examining  agency records, and cross-checking these data to the bonds amounts  listed in CERCLA settlement agreements. We determined that the  financial assurance data from BLM, the Forest Service, and EPA were  sufficiently reliable for the purpose of determining the types and amounts  of financial assurances in place for phosphate mining operations in Idaho.
We conducted this performance audit from May 2011 through April 2012  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Information on 18 Phosphate Mines Overseen by Federal Agencies in Southeastern Idaho, and CERCLA Cleanup Expenditures
paragraphs: This appendix provides information on the acres disturbed, CERCLA lead  agency, and surface land ownership at 18 phosphate mines in  southeastern Idaho (table 3), and the agency assessment and cleanup  expenditures at the 16 of those mines with selenium contamination   (table 4).
section_title: Appendix III: Comments from EPA
section_title: Appendix IV: Comments from the Department of Agriculture
section_title: Appendix V: Comments from the Department of the Interior
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Steve Gaty (Assistant Director),  Andrea Wamstad Brown, Casey L. Brown, Antoinette Capaccio, Leslie K.  Pollock, Rebecca Shea, Carol Herrnstadt Shulman, and Rajneesh Verma  made key contributions to this report.