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Last week the EPA officially published its proposal to impose over $7 billion of financial assurance requirements on the owners and operators of currently active or idle hardrock mines and mineral processing facilities. 82 Fed. Reg. 3388 (Jan. 11, 2017).  These proposed requirements are intended to cover estimated response costs, natural resource damages, and health assessment costs for which an owner or operator could be liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) should a hazardous substance release occur.  The EPA estimates that 221 hardrock mining facilities would be subject to these proposed requirements, which would be in addition to financial assurance already required by other federal or state agencies for things such as closure and reclamation.  The deadline for submitting comments on the EPA’s proposal is March 13, 2017.Capture
Continue Reading EPA Proposes to Require $7+ Billion of Financial Assurances from U.S. Hardrock Mining Industry Under CERCLA Section 108(b)

As we discussed earlier, environmental activists have asked the Environmental Protection Agency (“EPA”) to update its oil and gas drilling waste disposal rules under the Resource Conservation and Recovery Act (“RCRA”).  The groups sought to force the EPA’s hand by suing the EPA in an attempt to get a court order requiring the EPA to update its regulations.

Under RCRA, non-hazardous solid waste, which includes oil and gas production waste, is governed by Subtitle D. Subtitle D focuses on state and local governments as the primary regulating entities for the management of non-hazardous solid waste. It establishes minimum federal technical standards and guidelines for state solid waste regulations.  The EPA is required to review and approve state Subtitle D waste disposal programs to ensure that they meet the minimum standards.

Section 2002(b) of RCRA requires the EPA to review and, if necessary, revise at least once every three years the Subtitle D regulations. The activists have asked the EPA to revise its Subtitle D regulations and set clear requirements to govern the storage and disposal of oil and gas waste amid a “patchwork of [state] requirements with varying protections.”
Continue Reading Industry Groups Push Back Against Environmental Activists in Suit Over Oil & Gas Waste Disposal Regs.

UPDATE: Quickly following on the heels of the Wyoming federal district court’s order striking down the Bureau of Land Management’s (BLM) hydraulic fracturing rules, the state governments of North Dakota, Wyoming, Colorado, and Utah have now moved to dismiss the pending Tenth Circuit appeal of the district court’s preliminary injunction order.  Those state government indicated in their brief that they had unsuccessfully attempted to reach out to counsel for the BLM and the environmental groups who filed that appeal, but expected those parties will oppose the dismissal motion.

Separately, the BLM and the intervening environmental groups each filed notices seeking to directly appeal the district court’s June 21 order and judgment striking the BLM’s rules to the Tenth Circuit.  While it remains unclear exactly how this matter will now proceed on appeal, it seems likely that the Tenth Circuit will combine or consolidate all of these appeal issues in one way or another.

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As we’ve previously reported, a Wyoming federal court issued a preliminary injunction order last year that temporarily halted the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands.  Since that time, the case has split into two proceedings: the Wyoming court moved forward with conducting a full legal analysis of the BLM’s final rule, while several environmental groups who had intervened in the lawsuit appealed the preliminary injunction order to the Tenth Circuit Court of Appeals.  This week we received some clarity on one of those proceedings, while the other remains pending.

District Court Strikes Down BLM Final Rule

On June 21, the Wyoming court struck down the BLM’s final rule, finding the agency lacked the legal authority to promulgate those regulations.

In his order, Judge Scott Skavdahl premised his opinion on whether Congress delegated requisite authority to the BLM to regulate hydraulic fracturing on public lands, and “not whether hydraulic fracturing is good or bad for the environment or the citizens of the United States.”  Ultimately, Judge Skavdahl held, a federal agency “may not exercise its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law.”Continue Reading Wyoming Court Strikes Down BLM Hydraulic Fracturing Rule; Existing Appeal Remains Pending (For Now)

The Alaska DNR is requesting public comments on its mining regulations for establishing and maintaining mining claims – 11 AAC Chapter 86. These regulations (as well as related regulations at 11 AAC 82 and 11 AAC 88) establish or address many of the requirements for locating claims on state lands, performing assessment work, paying rent,…

In one of the most sweeping proposals since the creation of the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), the agency has announced proposed regulations to update requirements relating to gas gathering and transmission lines.  We find that there are four main areas our readers definitely should be aware of.

First, the proposed regulations would add new assessment and repair criteria for gas pipelines.  Most notably, the proposal will subject thousands of miles of pipelines built before 1970 to verification and testing requirements. These older pipelines had previously been exempt from such requirements.  This new requirement would mean that operators of older pipelines will need to make safety assessments on pipelines which were largely unregulated.  This may be challenging and costly for operators given the lack of records and age of many of these pipelines.

Second, the proposal also expands the agency’s definition of a “gathering line” that is subject to the new safety standards, potentially embracing pipelines previously classified as unregulated production lines. This is an expansive extension of federal authority into oil and gas production areas that have previously been regulated by individual state agencies and state law.
Continue Reading Proposed Rules Coming Down the Pipeline for Gas Gathering and Transmission Lines

On January 29, 2016, the U.S. Court of Appeals for the District of Columbia Circuit ordered the Environmental Protection Agency (“EPA”) to finalize the long-awaited “financial assurance” regulations under section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”).  The hard rock mining industry is first in line to be subject to  the new requirements.

The D.C. Circuit’s order is the result of a case brought by several environmental groups against the EPA seeking to force the EPA to put into effect the so-called “financial assurance regulations.”

In enacting CERCLA in 1980, Congress directed the EPA to ensure that companies remain financially capable of cleaning up contaminated sites. These financial assurance rules were intended to prevent companies from creating toxic sites and then becoming financially unable to clean them up, often causing the cleanup to be delayed for years.

In the intervening thirty years since CERCLA took effect, the EPA made little progress toward promulgating any financial assurance regulations, that is, until a court ruling in 2009 (brought by many of the same groups) ordered them to start. Pursuant to the 2009 ruling, the EPA published a notice in the Federal Register designating the hard rock mining industry as its priority for the development of financial responsibility requirements.  In making this determination, the EPA cited a heightened “risk” associated with hard rock mining which increases the likelihood of releases of hazardous substances.
Continue Reading Financial Assurance Requirements are on the Horizon for Hard Rock Miners

On Friday, January 22, 2016 the federal Department of the Interior’s (“DOI”) Bureau of Land Management (“BLM”) issued a proposed rule on reducing waste and methane emissions in oil and gas operations.  The rule would limit oil and gas flaring, venting, and leaking on federal and Indian lands.  While the U.S. has become the largest natural gas producer in the world and U.S. oil production is at its highest level in nearly 30 years, the current regulations  hearken back to the mid-1980’s, when gas production and greenhouse gas concerns were very different than they are today.

The proposed rule is composed of “commonsense and cost-effective measures,” according to Janice Schneider, Assistant Secretary for Land and Minerals Management.  Broadly, the proposed rule would require operators to adopt currently available technologies in order to limit the rate of flaring at oil wells, and would require operators to inspect for leaks and replace equipment that vents methane emissions into the air.Continue Reading BLM Proposes “Commonsense” Rule to Limit Methane Emissions from Oil & Gas Operations

Following a Wyoming federal court’s order temporarily halting the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands, Sierra Club and several other environmental groups requested the court enter final judgment and delay proceedings while they pursue an appeal through the Tenth Circuit Court of Appeals.  (Our complete coverage of this…

Late yesterday, Judge Scott Skavdahl of the federal district court in Wyoming issued a much-anticipated order granting a series of preliminary injunction motions filed in litigation challenging the Bureau of Land Management’s (BLM) final rule regulating hydraulic fracturing on public lands.  (Our full coverage of the litigation is available here.)  In a detailed 54-page…

In June, a Wyoming federal district court temporarily delayed implementation of the Bureau of Land Management’s (“BLM”) new final rule regulating hydraulic fracturing on federal public lands, while it granted the BLM an extension to lodge its administrative record and permitted the parties more time to file citations to that record in support of their…

The U.S. Environmental Protection Agency (“EPA”) has recently announced that it would take steps to finalize rules establishing financial responsibility requirements for hard rock mines under section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”).

Section 108(b) gives the EPA the authority to require certain facilities to have some type of financial security mechanism in place – such as a bond or insurance policy – that can be used to pay for spills or cleanups should a mining or mineral processing company declare bankruptcy or be otherwise unable to conduct necessary response activities. CERCLA requires the financial responsibility to be consistent with the degree of risk associated with the production, transportation, treatment, storage or disposal of hazardous substances.

In 2009, the EPA published a notice in the Federal Register designating the hard rock mining industry as its priority for the development of financial responsibility requirements. In making this determination, the EPA cited a heightened “risk” associated with hard rock mining which increase the likelihood of releases of hazardous substances.

The framework for the new regulations assigns financial responsibility amounts based on a facility’s characteristics (i.e., open pits, waste rock, tailings, heap leach, process ponds, water management, and operations, maintenance and monitoring). Natural resources damages and health assessment costs would be separate fixed amounts imposed on each facility. The financial responsibility requirements are intended to be separate and distinct from other federal closure and reclamation bonding requirements imposed under other statutes.
Continue Reading Miners and States take Notice, the EPA is Updating its CERCLA Financial Responsibility Requirements

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Here Stoel Rives shares insight and analysis about key mineral law developments. Drawing on a very active natural resources practice, we aim to keep readers informed about the legal aspects of news that impacts exploration and development of all things mineral.