STATEMENT OF MICHAEL CALAGHAN,

SECRETARY, WEST VIRGINIA

DEPARTMENT OF ENVIRONMENTAL PROTECTION

Thank you, Mr. Chairman, and members of the subcommittee, for this opportunity to come before you to speak on an important issue for West Virginia and southern Appalachia.

My name is Michael Callaghan. I am the Cabinet Secretary for the West Virginia Department of Environmental Protection. I am here today to speak with you about the policy and practice of using valley fills in coal mining operations in West Virginia and southern Appalachia. While most of my testimony relates to impacts on the coal industry, the fill rule has significant implications in many areas that impact the economy throughout the country.

I am a fifth generation West Virginian who grew up in the southern coalfields. As a citizen and an avid fisherman and outdoorsman, I appreciate both the benefits and the burdens brought upon West Virginia by more than one hundred years of coal mining. West Virginians have been debating both the costs and benefits of the mining industry for many years. Health, safety, employment and environmental issues are implicated by mining practices.

Mountaintop removal mining is, as the name suggests, a mining method in which soil and rock are removed from the tops of mountains to expose a seam of coal. The excess soil and rock, known as spoil, is commonly placed in nearby valleys and hollows, thereby creating large sloped areas called valley fills. Mountaintop removal is the most economical way to mine coal in steep slope terrain, such as southern West Virginia, but it has the consequence of filling miles of mountain streams with rock and dirt. Other forms of mining such as underground mining and contour mining, also make use of valley fills, but to a lesser degree.

The demand for low sulphur coal has been steadily increasing over the last decade, and the southern Appalachian coal fields, which includes West Virginia, are a critical source of low sulphur coal. In West Virginia in 2000, 169 million tons were mined through surface and underground operations. That increased to 175 million tons in 2001 and tonnage is expected to top 180 million in 2002.

The state of West Virginia issues mining permits through a federally approved program and has primacy of its program through the Department of the Interior. That is, the Surface Mine Control and Reclamation Act (SMCRA) and its regulations dictate most aspects of the permitting process implemented by the state, including the permitting of valley fills. In West Virginia, among numerous other requirements, every permit for a mining operation which proposes filling a stream must include detailed provisions for minimizing the amount of excess spoil material, a storm water runoff analysis to prevent flooding and detailed engineering requirements to ensure structural stability. In other words, our state has a regulatory structure to analyze the impact of valley fills prior to the issuance of a state permit.

In addition to state approval, before any waters of the United States can be filled, the mining company must obtain a Section 404 permit under the Clean Water Act from the U.S. Army Corps of Engineers. The Corps has interpreted the Clean Water Act to authorize construction of valley fills.

Over the last twenty years, the state of West Virginia and federal oversight agencies, which include the Environmental Protection Agency, the Army Corps of Engineers and the Office of Surface Mining, issued permits that authorized the construction of more than 4,000 valley fills in West Virginia. Those fills have ranged in size from a few hundred yards to over two miles in length and affected approximately seven hundred and fifty miles of our streams, creeks and drainageways.

To better assess the practice of mountaintop mining, the federal oversight agencies and the state of West Virginia have been working for three years on an environmental impact statement to address mountaintop mining and valley fills. The parties are far from reaching a conclusion on the measurable, long term impact of mountaintop mining and valley fills upon the environment and the economy.

One conclusion about mountaintop mining and valley fills that is certain though is that the use of these practices has enabled the mining industry to flourish and has put thousands of West Virginians to work. In fact, under challenging market conditions, production in West Virginia has steadily increased. In numerous communities in southern West Virginia, the coal mining industry has, for many years, formed the backbone of the economy. The industry draws its workforce from the local population and many additional jobs are sustained through businesses that support mining, such as transportation, equipment sales and maintenance.

However, over the past several years, we have seen a decline in mining-related employment as increasingly large scale technology and automation facilitate the mining of larger tracts of land with fewer people. We anticipate that this trend will increase over the next fifteen years as the most accessible reserves of coal are mined out and additional automation becomes available to the mining industry.

Market factors such as western coal competition, depletion of reserves, economies of scale and industry mergers will likely lead to a decline of employment in the mining industry in Appalachia. This will leave this region, especially West Virginia, with an economic void.

Ironically, valley fills and mountaintop removal sites can serve as effective development tools for filling the gap left by the mining industry. That is, when properly planned, mountaintop mining sites have proven ideal locations for industrial, commercial, residential and recreational development. The flat topography of mountaintop removal sites in areas typically devoid of prime building locations has already proven beneficial to several businesses, including a large wood products factory, a world-class golf course, a multi-faceted recreational park and residential development.

My department is working closely with the state economic development office to more fully utilize former surface mining sites. And in the coal mining counties, individuals like Mike Whitt of the Mingo County Economic Development Authority have risen as leaders in the field, working closely with coal mining companies, state and local officials and prospective businesses, to successfully maximize the use of former surface mining sites as opportunities for growth. These efforts must be increased in the future to reinvorgate the economy of southern West Virginia.

Unfortunately, former mining sites historically have been underutilized as economic development tools. Of the several hundred surface mining sites with valley fills, less than two dozen have been used for economic or community development. State and federal law has not compelled mine operators to implement a beneficial post mining land use unless the company is seeking a variance from requirements to return a site to its approximate original contour. In such instances, the permit applicant must demonstrate that the post mining land use will be equal to or better than the premining use of the site.

Currently, there are sixty nine applications pending with my agency that contemplate filling waters of the United States. Of those applications, only seven seek a variance and propose post-mining land uses that are equal to or better than pre-mining land uses.

Prior to leading DEP, I was a federal prosecutor with experience prosecuting environmental violations. When I assumed office a little more than a year ago, one of my first acts was to appoint an environmental prosecutor from the Department of Justice in Washington to take control of our mining regulatory program. Our agency is now focused upon the strict application of the law as it applies to our mining permits. We have restructured our mining program to be more efficient and responsive to the public. Additionally, we are making the best use of emergency federal funding with a state match to upgrade our staff and to improve our technical ability.

Please know that I am fully committed to the enforcement of the existing laws and regulations to demonstrate steady progress in improving oversight of the coal industry in West Virginia. While the industry is welcome to mine coal in the Mountain State, we intend to do our job as regulators and enforce the law.

While I have addressed the limited role of the fill rule as it impacts mining in southern Appalachia, the rule has far reaching effects in other regions of the country and other sectors of the economy. The consistency in definitions of the fill rule between the Environmental Protection Agency and the Army Corps of Engineers is important to mining operations in West Virginia, but it is very important to other sectors throughout the country as well. I thank you for this opportunity today and look forward to your questions.