04/23/2019 - Regulatory Rollback

Financial Assurance Requirements for Hardrock Mining

by Caitlin McCoy

The Environmental & Energy Law Program is tracking the environmental regulatory rollbacks of the Trump administration. Click here for the list of rules we are following. If you’re a reporter and would like to speak with an expert on this rule, please email us.

Why it Matters

Hardrock mining involves the exploration, extraction, and processing of certain mineral and metal deposits like copper, gold, iron ore, lead, molybdenum, phosphate rock, platinum, potash, silver, uranium, and zinc. Unlike the oil, coal, and natural gas industries, the hardrock mining industry does not pay royalties to the federal government for minerals extracted from public lands. There are half a million hardrock mine sites that are estimated to be abandoned across the U.S. with an estimated price tag of $32 to $72 billion to clean up the most contaminated of those sites.

A rule that created financial responsibility requirements for hardrock mining was designed over years and proposed in January 2017 to prevent “owners or operators from shifting the burden of cleanup to other parties, including the taxpayers,” and to incentivize environmentally sound practices. In December 2017, EPA announced that it would not pursue the rulemaking any further, asserting that “modern mining” presents a low risk of taxpayer-funded response, and that the financial assurances regulations are therefore not necessary.

Current Status

July 19, 2019 The D.C. Circuit rules against the environmental organizations, finding that EPA’s decision to not issue final regulations was legally sound and not arbitrary. Idaho Conservation League, et al v. Andrew Wheeler, et al, case no. 18-1141 (D.C. Cir.).

History

July 28, 2009 EPA announces which classes of hardrock mining facilities it would prioritize when developing financial responsibility requirements for the industry through a rulemaking.

Aug. 11, 2014 Environmental groups file a petition in the D.C. Circuit, asking the court to compel EPA to issue rules for financial assurances and finalize them by Jan. 1, 2016. In re Idaho Conservation League (D.C. Cir.).

Jan. 29, 2016 EPA agrees to a schedule for a rulemaking for the hardrock mining industry and timetable for considering whether to include other industries. In re Idaho Conservation League, 811 F.3d 502, (D.C. Cir. 2016).

Jan. 11, 2017 EPA publishes proposed regulations: Financial Responsibility Requirements Under CERCLA § 108(b) for Classes of Facilities in the Hardrock Mining Industry.

Trump Era

Dec. 1, 2017 EPA announces its decision not to issue final regulations based on the proposed regulations for financial responsibility requirements for hardrock mining facilities. EPA explains that it “…has determined that final regulations are not appropriate. This decision is based on EPA’s interpretation of the statute and analysis of its record developed for this rulemaking.”

Feb. 21, 2018 EPA publishes its decision not issue final regulations in the Federal Register.

May 16, 2018 A coalition of environmental organizations challenge the decision not to issue final regulations in the U.S. Court of Appeals for the D.C. Circuit. Several states (Alaska, Arkansas, Colorado, Louisiana, Michigan, Montana, Nevada, South Carolina, South Dakota, Utah, Wisconsin, and Wyoming) and agencies of the New Mexico and Arizona governments intervene on behalf of the EPA in the litigation. Mining companies and industry trade groups also intervene on behalf of the EPA or file amicus curiae briefs. Idaho Conservation League, et al v. Andrew Wheeler, et al, case no. 18-1141 (D.C. Cir. May 16, 2018).

March 13, 2019 The D.C. Circuit hears oral argument in Idaho Conservation League, et al v. Andrew Wheeler, et al. A recording of the argument is available here.

July 19, 2019 The D.C. Circuit rules against the environmental organizations, finding that EPA’s decision to not issue final regulations was legally sound and not arbitrary.

State Action

Jan. 26, 2018 California proposes a regulation that would change some of the rules regarding financial assurance mechanisms in accordance with a state law, AB 1142, passed in 2016 that made significant revisions to California’s Surface Mining and Reclamation Act.

Sept. 28, 2018 California proposes a regulation that would change the appeals process regarding financial assurance cost estimates for surface mining facilities.

Thank you to Harvard Law Student Sebastian Spitz, JD 2021, for assistance with this rule.