November 14, 2000


The Hon. Katherine L. Henry
Acting Director
Office of Surface Mining Reclamation and Enforcement
1951 Constitution Avenue NW
Washington, DC 20240

Re: Pennsylvania Coal Mine Bonding Program—October 11,2000, Letter from OSM Appalachian Region Director Allen D. Klein to Pa. Department of Environmental Protection Secretary James M. Seif

Dear Acting Director Henry:

I am writing, on behalf of Pennsylvania's Mining and Reclamation Advisory Board (MRAB), to express the MRAB's deep disappointment with the above-referenced letter, and in OSM's failure to play a leadership role thus far in our attempts to revise Pennsylvania's bond rate guidelines. The MRAB requests your personal attention in addressing our concerns.

MRAB was created by statute to advise and provide recommendations to the Secretary of the Pennsylvania Department of Environmental Protection (PA DEP) on matters pertaining to surface coal mining and reclamation. Members are appointed by the Governor and the leaders of the four state legislative caucuses and represent a broad array of interests, including citizen advocates, conservationists and the coal industry.

The MRAB spent considerable time and effort in assessing the magnitude and depth of the problems associated with Pennsylvania's bonding program, and in trying to fashion appropriate solutions. From October 1999, when PA DEP announced its intention to impose full cost bonding guidelines for land reclamation, until June 2000, our Board and its Regulation, Legislation and Technical Committee (the "Committee") met seven times, in an open public forum, during which full cost bonding was a principal or sole topic of discussion.

Harrisburg Field Office Director Bob Biggi and other OSM representatives attended most of these public meetings, and they freely participated in the discussions. The MRAB specifically requested OSM's input on a number of important questions, including the use of Title IV funds as a guarantee for part of the bond on certain remining sites. We also asked about federal bonding guidelines for assuring land reclamation and long-term water treatment costs. In particular, we sought guidance from OSM on appropriate options for providing sufficient financial guarantees, the experience of other states with alternative bonding systems, and whether those states were encountering similar problems with their bonding programs. In particular we wanted to know how OSM and the other states were dealing with bonding for mine drainage treatment.

The MRAB did receive some information about OSM's general policies concerning abandoned mine drainage (AMD) and your agency's efforts to assess this problem. However, most of the reports from the field office staff were limited to updates on the status of several ongoing federal inventories and studies.

Perhaps most disturbing was OSM's response, delivered to us at the eleventh hour, which disapproved our intended use of Title IV money, a major component of our proposed solution. While the Board had extensively explained the Title IV proposal to your Harrisburg staff and emphasized that it was absolutely critical to the success of improving Pennsylvania’s environmental efforts, the disapproval was in the form of a letter briefly restating a solicitor's opinion that it couldn't be done.

We received no legal guidance or proposed alternatives from OSM on this issue. Furthermore, your field staff has generally not responded to repeated requests for guidance on other issues as we reviewed the proposed revision to the bonding rate guidelines.

During our public meetings, PA DEP explained to the MRAB that current law and regulations allow the Commonwealth to adjust bonding rate guidelines as part of the approved primacy program. While some members of the MRAB questioned this, OSM never challenged this assertion. The draft proposal PA DEP distributed for public review also made clear that any revisions would be implemented by changing the bond rate guidelines. To our knowledge, OSM provided no comments on the draft.

In addition to the MRAB's meetings, the Environmental Resources and Energy Committee of the Pennsylvania House of Representatives conducted two hearings on the full cost bonding concept. Al Klein and Bob Biggi testified at the first hearing in December of 1999. While offering opinions on what was wrong with Pennsylvania’s bond system, neither Mr. Klein nor Mr. Biggi informed the legislators that a program amendment and OSM approval would be required before Pennsylvania imposes new bond rate guidelines.

The MRAB has sought to improve Pennsylvania's bonding program by increasing environmental safeguards, without jeopardizing remining and reclamation activities. We were, therefore, surprised and frustrated by Mr. Klein's letter, delivered long after the MRAB had conditionally and unanimously approved a proposal that meets these objectives. The letter suggests that OSM will prohibit Pennsylvania from implementing any improvements to our bond rate guidelines until a program amendment incorporating those changes is submitted by Pa. DEP and approved by OSM. Requiring formal federal approval before we can proceed further with a solid program improvement would provide no "on the ground" benefit and would impose unreasonable delay and uncertainty on PA DEP, our citizens, the industry and most importantly, the environment.

Frankly, the MRAB does not understand OSM's reasoning on this issue. At our most recent meeting, on October 26, Mr. Biggi explained that OSM has maintained this position since 1991. Why, then, did your field staff fail to explain this to us during our consideration of the proposed revisions to the bond rate guidelines? We further understand that PA DEP and OSM have been discussing this topic for more than a year. If OSM had a longstanding policy, it should have been made clear to us early in the process. Instead, OSM has summarily ordered DEP to produce a detailed plan that conforms to OSM's requirements within 30 days, on an issue that has been outstanding for nine years.

I want to stress that the above summary is intended to help you understand the MRAB's frustration and serious concern as we continue our efforts to revise the bond rate guidelines. We have sought OSM's active participation in this process, and we encourage leadership from your agency. Accordingly, we believe certain actions are appropriate.

First, OSM should withdraw or modify the October 11 letter to Secretary Seif. Mr. Klein's letter recognizes the complexity of the program change contemplated by OSM and states a willingness to work cooperatively with PA DEP to develop an appropriate and achievable timetable. However, the letter also expressly requires "that OSM must approve a program amendment prior to [Pennsylvania's] implementation of the bonding program changes" described in the MRAB's meetings. It is counterproductive to delay changes to the bond rate guidelines for the sake of process and to impose an unreasonable deadline for submitting a comprehensive state plan that addresses a problem your field staff has acknowledged is national in scope.

I assure you that the MRAB intends to continue to work diligently on this matter. However, there is simply no way that we can fulfill our statutory mandate to advise PA DEP in preparation of a detailed plan addressing the issues outlined in the enclosure to the October 11 letter by the 30-day deadline. We ask that you keep in mind that these issues are some of the most challenging problems that have ever arisen under SMCRA and are the subject of litigation or potential litigation in Pennsylvania and several other states. In the past year, PA DEP has made great progress on the bonding issue; however, given the importance of this issue, deliberate and thoughtful effort is necessary.

Second, we believe OSM should make a firm commitment to actively engage itself in the discussion and resolution of these issues at the national level. The MRAB has approached this issue with a sense of urgency and purpose. However, federal SMCRA was created to impose a uniform regulatory program on operators for a number of reasons – including allowing operators to compete on a level playing field. It is not consistent with SMCRA for OSM to unilaterally require Pennsylvania to commit to a program amendment before OSM has resolved the substantial questions raised about those requirements, and before those requirements are imposed on other states. If this is a national problem, then a uniform national solution must be developed in a public forum. OSM must be a leader on this issue! A veiled threat to institute a Part 733 proceeding, as implied in Mr. Klein's letter, is not indicative of leadership.

Finally, we would like OSM to provide the MRAB with a detailed explanation of the actions OSM may take in Pennsylvania if PA DEP is unable to comply with the demands set forth in the October 11 letter. We believe it is important to our continued deliberations on this issue to know as much as possible about the potential consequences arising from the October 11 letter and the implications for mining, reclamation and the environment in Pennsylvania.

The MRAB appreciates your personal attention to this matter. We anticipate your prompt reply and look forward to working with your agency on remaining issues of concern.

  Fred W. Wolf, P.E.

cc: Governor Tom Ridge
  Secretary James M. Seif, PA DEP
  Members, Pennsylvania Congressional Delegation
  Members, Pennsylvania Senate Environmental Resources and Energy Committee
  Members, Pennsylvania House Environmental Resources and Energy Committee
  Members, Pennsylvania Legislative Coal Caucus
  Members, Mining and Reclamation Advisory Board
  Allen D. Klein, Director, OSM Appalachian Region
  Robert J. Biggi, Director, OSM Harrisburg Field Office