The “Fill Rule” Controversy Explained

by William Yeatman on March 2, 2011

in Blog, Features

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Elsewhere, I’ve described two fronts the Obama administration is waging against coal production in Appalachia (see here and here).

Since the President took office, environmentalists have been urging the administration to open a third front against Appalachian coal. This one pertains to the so-called “fill rule.” Here’s how the Sierra Club describes it: “In 2002, the Bush administration changed a key Clean Water Act rule to allow mining companies to dump their waste into waterways. Known as the “Fill Rule,” it allows mountaintop removal coal mine operators to bury Appalachian streams with their waste.”

As I demonstrate below, virtually the whole of the Sierra Club’s characterization of the “fill rule” is incorrect, starting with the fact that the rule originated with the Clinton administration, not the Bush administration. In fact, the “fill rule” is a relatively innocuous regulation that acts primarily to allow the EPA’s long held definition of “fill material” to trump that of the U.S. Army Corps of Engineers.

The “Fill Rule”: A Tortuous History

The Clean Water Act prohibits all pollution discharges into navigable waters, unless the “polluter” obtains a permit. Generally speaking, there are two such variances: (1) Section 402 permits, for “point source” discharges (like a pipe), which are issued by the EPA or by a state agency whose guidelines are EPA-approved and (2) 404 permits, for “dredge and fill” projects (such as filling a swamp to create a new housing development), which are issued by the U.S. Army Corps of Engineers in accordance with guidelines set by the EPA.

The “fill rule” controversy pertains to Section 404 permits, and is based on an ambiguity in the definition of “fill material.” In 1975, the EPA adopted an “effects based” definition of “fill material.” That is, a discharge is “fill material” if its effect is to replace navigable waters with dry land.

Initially, the U.S. Army of Corps of Engineers adopted an identical definition, but in 1977, it changed its interpretation of “fill material” from the EPA’s “effects based” definition, to a “purpose based” definition. In particular, the U.S. Army Corps of Engineer’s definition excluded from the definition of “fill material” any material discharged with the purpose of waste disposal.

The diverging definitions created a problem for surface coal mining in Appalachia. When you dig up coal, the loosened dirt and rock, known as overburden, have more volume than when they were compacted. Much of this overburden is used to reconstruct the approximate original contour of the mined terrain. However, there is almost always “extra” overburden, and this excess dirt and rock is placed in the valley at the base of the mine, often resulting in the burial of ephemeral or intermittent streams. This is known as a “valley fill.” These valley fills are inherent to surface coal mining in the steep terrain of Appalachia. Furthermore, they are unambiguously authorized by the 1977 Surface Mining Control and Reclamation Act.

However, this “extra” overburden can be construed as mining waste. Under the EPA’s “effects based” definition of “fill material” the fact that overburden is “waste” is immaterial, because its “effect” is to replace water. But under the U.S. Army Corps of Engineers “purpose based” definition of “fill material,” interpreting mining overburden as “waste” means that it cannot obtain a Section 404 dredge and fill permit.

In 1986, the EPA and the U.S. Army Corps of Engineers sought to reconcile their respective definitions with a “Memorandum of Agreement on Solid Waste,” by which the U.S. Army Corps of Engineers agreed to exercise its Section 404 authority over certain “solid wastes,” despite its “purpose based” definition of “fill material.” Under the Memorandum, jurisdictional authority over valley fills would be determined on a case-by-case basis.

Importantly, the Clean Water Act gives the EPA primacy over the U.S. Army Corps of Engineers and, in 1988, the Agency conducted a formal rulemaking to affirm its original “effects based” definition of “fill material.” Moreover, the 1986 Memorandum was an ad-hoc solution, that necessitated an extra regulatory process (i.e., determining who had authority over solid waste permitting on a case by case basis). In order to clarify the Clean Water Act, and also simplify the regulatory process, the Clinton administration in April 2000 initiated a rulemaking to effectively abandon the U.S. Army Corps of Engineer’s “purpose based” test. After due process, this rule was finalized by the Bush administration in 2002.

Environmentalist Priority

Environmentalists hate the 2002 “fill rule” because it ended the definitional ambiguity on “fill material,” and, thereby ended an avenue to litigate coal. If mining overburden—the material that goes into a valley fill—can be interpreted as “waste,” then environmentalist lawyers could argue that this “waste” is excluded from the U.S. Army Corps of Engineers’s “purpose based” definition of “fill material.” As a result, these litigants would allege that the Corps doesn’t have the authority to issue section 404 permits to valley fills.

To be sure, such litigation would have been unfounded. It would require a federal judge to discard the 1986 Memorandum, and even if he/she did, then the judge would then have to ignore EPA’s primacy over the U.S. Army Corps of Engineers regarding the section 404 permitting process. However, environmentalists have proven adept at getting their court cases before sympathetic judges (for example, Judge Charles Haden), before whom law takes a backseat to ideology.

A year ago, it seemed as if the Obama administration would seek to overturn the 2002 “fill rule.” In a January 2010 interview with Rolling Stone magazine, EPA Administrator Lisa Jackson said that the Agency was working on it. However, GreenWire reported last week that the Administration is having second thoughts about reworking the rule, much to the displeasure of green special interests. It is still unclear why the administration is backing off. My guess is that a more restrictive, “purpose based” definition of fill material would cause problems for other industries in addition to coal, and that the administration wanted to avoid a head ache.

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