Copyright 2000 Federal News Service, Inc.
Federal News Service
June 21, 2000, Wednesday
SECTION: PREPARED TESTIMONY
LENGTH: 3928 words
HEADLINE:
PREPARED TESTIMONY OF DAVID GERARD RESEARCH ASSOCIATE POLITICAL ECONOMY RESEARCH
CENTER (PERC) BOZEMAN, MONTANA
BEFORE THE SENATE
ENVIRONMENT AND PUBLIC WORKS COMMITTEE FISHERIES AND WILDLIFE AND WATER
SUBCOMMITTEE
SUBJECT - S. 1787: "GOOD SAMARITAN ABANDONED OR
INACTIVE MINE WASTE REMEDIATION ACT"
BODY:
PERC is the nation's oldest and largest
nonprofit institute dedicated to original research that advocates using market
principles to address environmental problems. More than 90 percent of our
funding comes from foundations and individual donors. As part of its mission,
PERC produces independent scholarly research on environmental policies. Thus,
PERC's comments on the proposed Clean Water Act revisions do not represent the
views of any affected parties or special interest groups, but instead represent
the interests of American citizens.
PERC has ongoing research on mining
and hazardous waste issues, including a current study of abandoned mines. Our
abandoned mines project is in the process of examining the status of abandoned
mine reclamation efforts, identifying issues confounding reclamation (including
liability issues), and exploring alternative approaches for encouraging and
funding site reclamation.
We would like to express our thanks to the
members of the Committee for allowing us to testify on this proposed
legislation. Summary of Testimony on S.1787
The intent of S. 1787 is to
encourage parties that are not responsible for environmental conditions to take
steps to improve water quality at abandoned mine sites. The question is: Are any
Good Samaritans likely to emerge? If not, why not? And, if so, will their
resources be put to their best use?
The proposed legislation responds to
the provisions of the Clean Water Act (CWA) that discourage parties from
remediating waste discharges from abandoned mine sites. The disincentive stems
from the fact that, pursuant to the CWA, any party that in any way affects a
discharge becomes fully responsible in perpetuity to meet the CWA water quality
standard. This full compliance holds even if the remediating party had no role
in creating the conditions that originally caused the adverse water quality
impacts. Thus, it is not possible for a remediating party simply to improve
water quality; the party must meet the water quality standard specified by the
CWA, whatever the cost.
As the title of the legislation suggests,
meeting the CWA standard at many abandoned sites is such a daunting
responsibility, even the proverbial Good Samaritan would need an additional
incentive before undertaking site remediation. The legislation provides this
incentive by amending the CWA to allow a remediating party to improve water
quality without being held responsible to comply fully with the CWA water
quality standard. Thus, the intent of the proposed legislation is to promote
voluntary cleanup.
My analysis of the proposed legislation draws two
principal conclusions: S.1787 will have positive environmental impacts on sites
addressed through state abandoned mine programs. S.1787 does not encourage Good
Samaritans to undertake cleanup efforts, and will therefore have little impact
on the number of sites addressed.
For sites slated for reclamation or
already in the remediation process, the proposed legislation will broaden the
scope of activities allowable. The resulting environmental quality at reclaimed
sites will be higher once the CWA liability is relaxed.
At the same
time, however, the disincentives built into S.1787 make it unlikely that new
remediation parties will emerge. For instance, the proposed legislation forces
the Good Samaritan to expend resources on an owner/operator search, which has
proven to be a costly and uncertain process in other contexts. In addition, the
proposed legislation does not eliminate all relevant liability concerns.
Specifically, potential liability under the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA) is a major industry concern, and might
also be of concern to other potential remediating parties. These liability
concerns alone make industry Good Samaritan efforts unlikely. Almost without
exception, the proposed legislation discourages potential remediation parties
from pursuing cleanup efforts.
Abandoned Mines Background
There
are thousands of abandoned noncoal mine sites in the U.S. that pose
environmental and/or safety hazards. Some of these abandoned sites are the
source of environmental contamination, including heavy metal and acid discharges
that degrade surface or groundwater quality.
Arizona has surveyed 5,890
mine openings, shafts, adits, prospects, and quarried out areas. Of these sites,
118 (2 percent) have possible environmental hazards, and 668 (11 percent) pose
public safety hazards (Arizona, 1999). In Montana the state has evaluated more
than 3,800 sites based on their environmental and safety characteristics, and
has designated 380 priority cleanup sites from this list.
As the table
indicates, these sites are located both on private and on public lands. The
table, however, belies the complex ownership patterns of historic mining
districts. As a result of various land policies, it was common for the same mine
site and processing facilities to be located both on public land (e.g., mining
claims) and private land. Even for sites on private lands, however, often there
is either no identifiable owner or the owner does not have the financial
resources to reclaim the site. In cases where there is no identifiable and
solvent owner, the site is considered to be abandoned.
Table: Ownership
of Inactive Mines and Priority Cleanup Sites in Montana
Priority Sites
All Inactive Sites
Private 262 1820 Public 85 1325 Unclassified 33 709
Total 380 3834
Source: Montana Department of Environmental
Quality, August 1998
The legacy of abandoned mines is attributed to both
a lack of industry and public concern about potential hazards and an absence of
environmental regulation to address these hazards. Of course, public attitudes
and regulatory systems have changed radically over the past three decades, and
mining is now one of the country's most heavily regulated industries. Mining
activities are subject to federal statutes and federal land agency regulations,
as well as state statutes and regulations. These regulations also affect
activities at inactive and abandoned mines. Though intended to promote sound
environmental management, these regulations can discourage remediation of
hazardous waste sites, including abandoned mined lands.
The Clean Water
Act and Abandoned Mine Land Remediation
The U.S. Environmental
Protection Agency (EPA) maintains that discharges from abandoned mine sites are
subject to the National Pollutant Discharge Elimination System (NPDES) under
Section 402 of the Clean Water Act. Thus, whether the mine is active or
inactive, the mine owner must obtain an NPDES permit, and the owner is
responsible for meeting water quality standards as specified in the permit.
Many abandoned sites produce discharges that contribute to degradation
of water quality. In such cases a party that begins remediation activity that
alters the current discharge becomes permanently responsible for meeting the
permit standard. The assignment of liability occurs even though the remediating
party did not create the conditions causing or contributing to the water quality
degradation and had no previous responsibility or liability for the condition of
the site. This potential liability discourages parties that might otherwise take
steps to improve water quality at abandoned mines.
Enter the Good
Samaritan?
The proposed legislation (S. 1787) addresses these
disincentives. The legislation allows the potential remediating party - the Good
Samaritan - to obtain a permit that allows it to take steps to improve water
quality without being required to comply fully with the water quality standard.
The liability shield from liability for parties that had no role in
creating the water quality degradation would allow remediating parties
particularly state abandoned mine land programs- to expand the types of
allowable activities (i.e., activities that affect the discharge covered by
NPDES permit). What is less clear is whether the liability shield would be
sufficient to encourage new parties to pursue or to expand remediation
activities. To address this issue, consider the following possible Good
Samaritan candidates:
Federal agencies (Bureau of Land Management,
Forest Service, National Park Service) - local governments - non-profit groups -
mining companies Federal Agencies: The legislation prohibits federal agencies
from acting as Good Samaritans on lands owned by the federal government. In
fact, if federal agencies are always considered responsible parties on federal
lands, it could be the case that S.1787 does not apply to any abandoned mine
sites on federal lands (see below).
Local Governments and Private
Groups: The legislation builds in a number of hurdles for private groups.
Specifically, it requires Good Samaritans to identify the identity and financial
solvency of the property owners, even though these expenditures do nothing to
improve the water quality at the site. Nonprofit groups may also have concerns
about being exposed to liability under CERCLA.
Mining Companies: Mining
companies face these same hurdles, and are particularly concerned about
potential CERCLA liability. In addition, the proposed legislation removes other
incentives by prohibiting retaining and mineral exploration, and also by
prohibiting remediating parties from profiting from a Good Samaritan cleanup.
Thus, there are clear obstacles other than CWA liability that could
prevent Good Samaritan cleanups.
Disincentives for Potential Remediating
Parties
This brief survey indicates that new parties might not emerge
because (1) all liability is not removed, and (2) additional hurdles and
disincentives are added. I discuss these problems in greater detail below.
1. The Search for Owner/Operators and the Solvency Test - Wasting Time
and Resources while Water Quality Deteriorates
As part of the permit
requirements, the potential remediating party is required to take steps to
identify an owner or operator (e.g., current or past owners, mine operators,
lessees). An identifiable owner is defined as a party that (1) is responsible
for creating or contributing to the current waste discharge; and (2) "is
financially capable of compliance with requirements of sections 301,302, and
402" of the Clean Water Act.
The EPA (the Administrator) will approve
the permit application only if"no identifiable owner or operator exists." Thus,
EPA can reject a permit if the Good Samaritan has not taken" reasonable efforts"
to identify an owner/operator; or if the Administrator determines that the party
identified, in fact, meets the rather loosely defined solvency requirements.
It is not clear why the potential remediating party should be required
to expend resources on an owner/operator search. Even so, the proposed
legislation does nothing to limit owner liability. If an owner is identified, it
will still be responsible for bringing water quality into compliance with CWA
permit requirements.
Moreover, the search process is likely to be
complicated. The Good Samaritan is required to not only to search for an
operator, but also to determine whether the operator is solvent. As we have
seen, land ownership in historic mining districts is most often a mixture of
public and private land, and therefore there are often several parties with
partial ownership or some history of operations at a given site. The search
requirement does nothing to improve environmental quality. Instead it creates
uncertainty as to the issuance of a permit and diverts resources that could
otherwise be allocated toward cleanup.
Why should legislation prohibit a
Good Samaritan effort to mitigate the effects of ongoing waste discharges? If
private funds are used, that is the choice of the private party; if public funds
are used, the state or federal agency would be able to put a lien on the
property or to sue to recover the remediation costs. There is no reason to
believe that environmental quality would suffer if the search provision was
eliminated from the proposed legislation.
The Forest Service's abandoned
mine cleanup efforts are instructive on these issues. According to a 1996
Inspector General (IG) audit, the Forest Service had identified 335 contaminated
sites, but the agency had remediated only 16 of these sites. The IG makes it
clear that the Forest Service's emphasis on determining the existence of a
potentially-responsible party (PRP) limited the number of site cleanups:
Because of emphasis on sites where (the Forest Service) is the only
responsible party, (the Forest Service) has, so far, spent about
$12.7 million on actual cleanup of mines and only 16 sites have
been completely cleanup up (USDA, 1996, 9).
The passage suggests that
there will be few cases where there are no parties that satisfy some element of
the "ownership" criteria as spelled out in the proposed legislation.
Even where the Forest Service found a PRP, however, it found it
difficult to collect funds. The IG found that:
(The Forest Service) has
pursued PRP's (sic) at 29 sites with estimated cleanup cost of
$48.5 million. Bills of collection totaling
$4.3 million have been issued at only 6 sites and only
$2.2 million collected. Of the $2.2 million
collected, $1.56 million came from one PRP (USDA, 1996,
16).Although the emphasis on sites with no identifiable PRPs delayed cleanup
efforts, it did little to actually collect funds from PRPs. Presumably no
cleanup had occurred at these sites. At the same time, because the Forest
Service identified owners, these 29 sites would have been off limits to any Good
Samaritan efforts (the EPA will not approve a permit if an identifiable owner
exists). As a result, the offensive discharge will continue.
The benefit
of finding an owner/operator comes at a very high price: The search for an
owner/operator will be time consuming and costly, which will delay cleanup and
limit resources available for site remediation. If an owner/operator is located,
the EPA will deny the permit application, further delaying cleanup.
State Agencies: State agencies that remediate sites, however, generally
do not object to these search provisions because funding sources for these
cleanups are often tied to completing a search. For instance, the Montana State
Department of Environmental Quality (DEQ) is a primary agency involved in
abandoned mine cleanup.
The DEQ uses surplus funding from the Surface
Mining Control and Reclamation Act (SMCRA) to finance the cleanup of hardrock
sites. In order to tap this funding, DEQ must complete a PRP search. PRP
searches are also routine under federal and state Superfund programs. Thus,
S.1787 does not create an additional hurdle for state abandoned mine programs
because that hurdle already exists.
The owner/operator search is a
potentially costly hurdle. If the provision is retained (and there is no reason
to believe that the provision will have any beneficial environmental impacts)
the language should allow for fast, low-cost searches.
2. Are Federal
Lands Excluded?
The proposed legislation excludes federal agencies from
being a remediating party on federal lands. The text of the IG audit of the
Forest Service suggests that all federal lands are excluded from Good Samaritan
remediation:
Because of emphasis on sites where (the Forest Service) is
the only responsible party... (USDA, 1996, 9, emphasis mine).
This
phrase suggests that if no owner/operator exists, then the administrative agency
is considered an owner of abandoned sites on federal lands. If this is the case,
there is no possibility of a Good Samaritan cleanup because there is always a
solvent owner - the federal government. If this is the case, then the
opportunities for Good Samaritan cleanups will be limited. In Montana, more than
20 percent of priority sites are on federal land, and there are some estimates
that as much as 70 percent of abandoned mine lands are located on federal land.
This would severely limit scope of proposed legislation.
Therefore, the
legislation should explicitly provide for Good Samaritan cleanups on federal
land.
3. CERCLA Liability
A major industry concern is that a
permit obtained pursuant to the proposed legislation will move a remediating
party out of the frying pan of Clean Water Act liability and into the fire of
CERCLA liability. If there is any uncertainty about CERCLA liability, the number
of industry Good Samaritan cleanups will be roughly zero. Again, this does not
present a disincentive to state abandoned mine programs, as the states are
immune from CERCLA liability.
4. Remining and Mineral Exploration
Prohibited
In addition to exposing industry Good Samaritans to CERCLA
liability, the proposed legislation does its best to discourage involvement by
the mining industry. This is unfortunate, as industry is a primary source of
both expertise and potential reclamation funding.
Retaining: There is a
reasonable rationale for not providing for retaining. The allowance of retaining
would complicate the basic scope of the legislation by extending it beyond the
purview of the CWA.
Reprocessing: The proposed legislation requires a
remediating party that generates revenues by reprocessing materials to put those
funds back into the remediation effort. The proposed legislation stipulates that
the processing and removal of minerals can only be used to "further improve the
quality of waters identified in paragraph (3)(B)(iii)" (emphasis added). Thus, a
company cannot use proceeds to finance a remediation effort, but is required by
law to take a loss on the venture.
Exploration: Mineral exploration is
expressly prohibited.
The disincentive effects of these provisions
require no elaboration. Given the political opposition of environmental groups,
bringing retaining or mineral exploration to the table complicates passage of
this legislation. However, it is not clear why the legislation should so
thoroughly reject parties that will improve water quality at a given site.
Moreover, success of retaining at sites such as the Druid and Sunnyside Mines in
Colorado makes remining a possibility that warrants further review.
5.
Citizen Suits
The proposed legislation allows for citizen suits. The
entire rationale for Good Samaritan legislation is that the remediating party is
not a polluter, and therefore should not be treated as such. The Western
Governors Association has asserted that citizen suits are a "major disincentive"
for Good Samaritan efforts (WGA, 1998).
Federalism
Under the
Clean Water Act the EPA generally delegates authority to the states (1) to issue
discharge permits to industries and municipalities and (2) to enforce the permit
requirements. EPA has delegated this responsibility to 43 states. In the
proposed legislation, however, the EPA will not delegate authority to state
agencies. The rationale for this is that it is inappropriate for a state to
issue a permit to itself, given the uncertainty surrounding enforcement and the
general absence of checks. (Unfortunately, this provision reflects the
underlying theme of my analysis, which is that it is unlikely that remediation
parties other than the states are likely to emerge.
Because the proposed
legislation does not prohibit citizen suits, it is difficult to see why this
argument applies. If there is some question about the state's compliance with
the permit provisions in a cleanup effort, citizen suits can be used as an
enforcement mechanism.
But even without the citizen suit provision, the
explicit prohibition on delegation to the states is questionable. States are
closer to the actual situation, and therefore have a better chance to make
appropriate decisions than the national government. The purpose of the proposed
legislation is to give remediating parties greater discretion over discharge,
without assuming liability under the CWA. Thus, the legislation is intended to
encourage actions that improve water quality. It is hard to imagine how a
federal regulatory agency would have greater incentive to improve environmental
quality within a state than a state agency. It is much easier for citizens to
hold local government officials accountable and to monitor local environmental
regulations.
Conclusions
It is difficult to label S.1787 as
"Good Samaritan" legislation. Almost without exception, the provisions
discourage all potential remediating parties other than state abandoned mine
programs from undertaking cleanup efforts.
The exception, of course, is
a very important one. The proposed legislation would provide state abandoned
mine programs, such as the one operated by the Montana DEQ, with broader
latitude in their remediation activities. This should have positive impacts on
water quality at sites remediated by state agencies, though the cost of the
permit process is probably more cumbersome than it needs to be.
The
intent of the proposed legislation is to encourage parties that are not
responsible for environmental conditions to take steps to improve water quality
at abandoned mine sites. The question is: Are any other Good Samaritans likely
to emerge? And, if so, will their resources be put to their best use?
S.1787 has been marketed as legislation that provides positive
incentives for parties to address water quality problems at abandoned mine
sites. This is important conceptually because a fundamental precept of sound
environmental policy is that incentives matter. The problem, however, is the
only positive incentive contained in the legislation will primarily affect state
abandoned mine land programs that are already undertaking cleanup efforts. For
other parties the incentive structure is not as promising. Most significantly,
the legislation does not clearly eliminate all potential sources of retroactive
liability, and it builds in disincentives for other parties that might initiate
cleanup efforts. To summarize: - There is uncertainty concerning CERCLA
liability The permitting process requires the Good Samaritan to conduct a search
for a solvent owner. The search is costly and creates uncertainty, though there
are no obvious environmental benefits from the provision. Mining firms, the
source of potential funding and expertise, have no reason to act as Good
Samaritans. In addition to potential CERCLA liability, remining and mineral
exploration are expressly prohibited; processing minerals allowed only if
remediating party operates at a loss. Citizen suits create disincentive to all
potential remediating parties. The scope of the legislation will be narrow if
federal lands are excluded.
S.1787 is a positive step that will improve
environmental quality at some abandoned mine sites, but it will fail to
encourage new Good Samaritans to emerge. Therefore, I suggest the proposed
legislation is either amended to address the many disincentives to potential
remediating parties, or renamed "The Clean Water Act Liability Reduction for
State Abandoned Mine Land Programs."
References
Arizona State
Mine Inspector (1999) "Abandoned and Inactive Mine Survey," Pamphlet.
Montana Department of Environmental Quality(1998) "Montana Inactive Mine
Inventory and Mine Reclamation Priorities."
United States Department of
Agriculture, Office of the Inspector General (1996) Forest Service Management of
Hazardous Material at Active and Abandoned Mines. Audit Report No. 08601-1-At.
Atlanta: USDA.
Western Governors' Association (19989) "Background
Summary on the WGA Proposed Amendment to. the Clean Water Act Regarding Good
Samaritan Cleanups of Abandoned and Inactive Mines."
END
LOAD-DATE: June 22, 2000 
