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March 2009 4th Circuit Finds § 404 Permits Properly Issued in Surface Mining Operation The Fourth Circuit Court of Appeals (Fourth Circuit) overturned a district court decision which would have greatly restricted coal mining in Appalachia. The district court decision restricted the ability of the U.S. Army Corps of Engineers (CORPS) to issue § 404 dredge and fill permits under the Clean Water Act (CWA). At issue were four permits that allowed mining companies to construct valley fills in conjunction with their respective mountain top removal surface mining operations. Environmental groups alleged that the agency action and the permits violated CWA, 33 U.S.C. § 1251 et seq.; the National Environmental Policy Act (NEPA) 42 U.S.C. § 4321 et seq.; and the United States Administrative Procedure Act (APA) 5 U.S.C. § 701 et seq. Plaintiffs asserted various claims regarding the scope and breath of CORPS’ study of the potential adverse effects occasioned by the issuance of the permits. In addition, Plaintiffs attacked the sufficiency of CORPS’ review of, and the viability of, the mitigation plans submitted by the mining companies. Plaintiffs further claimed that CORPS lacked the authority to approve the discharge of fill material into streams as CORPS had improperly excluded certain stream segments from the definition of waters of the United States. The district court ruled in favor of Plaintiffs finding that CORPS’ actions violated both NEPA and CWA. The district court rescinded the § 404 valley fill permits and entered permanent injunctions prohibiting both CORPS and the mining companies from undertaking future activities authorized by the permits. Further, the district court found that CORPS’ definition of jurisdictional waters was incorrect and ruled that the water segments linking valley fills to down-stream sediment ponds were jurisdictional waters. The district court held that discharges from the fill into the stream segments between the toe of the fill and the down-stream sediment pond were impermissible without first obtaining a National Pollutant Discharge Elimination System permit pursuant to § 402 of CWA. CORPS, the mining companies and several intervenors appealed the district court decision to the Fourth Circuit Court of Appeals. The Fourth Circuit reversed the district court decision and directed the district court to take the actions necessary to dissolve the injunctions and re-instate the permits. The Fourth Circuit found that the district court had over-stepped its bounds in reviewing decisions made by CORPS. The Fourth Circuit concluded that CORPS’ actions and interpretations of the applicable rules were entitled to great deference by a reviewing court. Applying the deference standards, the Fourth Circuit ruled that CORPS properly issued the valley fill permits under § 404. The Appeals Court further rejected the argument that CORPS improperly limited the scope of its environmental analyses under NEPA. The Fourth Circuit also found that the methods used by CORPS to assess mitigation plans were sufficient under the same deferral standards. Finally, the Fourth Circuit addressed the district court’s ruling regarding CORPS’ interpretation of the definition of jurisdictional waters. CORPS’ interpretation excluded certain stream segments from waters of the United States as “waste treatment systems” and that term included treatment ponds or lagoons designed to meet the requirements of CWA. The Fourth Circuit held that CORPS’ interpretation was entitled to deference and was permissible. The Fourth Circuit concluded that CORPS could permit valley fills together with sediment ponds to be constructed in the stream segments pursuant to its authority under § 404. The Fourth Circuit’s decision is an important ruling for the coal industry which has relied upon the use of permitted valley fills as an integral part of the surface mining methods in West Virginia. The full opinion should be reviewed to obtain a complete understanding of the numerous points and conclusion reached by the Fourth Circuit. Permit Upheld for Pulverized Coal Power Plant Texans Protecting Our Water Environment and Natural Resources (TPOWER) and Environmental Defense, Inc. (EDI) sued for judicial review of the actions of the Texas Commission on Environmental Quality (Commission). The Commission had approved an application of Sandy Creek Energy Associates, L. P. (Sandy Creek) for an air quality permit to construct and operate an 800 megawatt pulverized coal power plant in McLennan County, Texas. The trial court affirmed the final order of the Commission, and on January 29, 2009, the Court of Appeals of Texas in Amarillo affirmed the judgment of the trial court. The Federal Clean Air Act required Sandy Creek to obtain the air quality permit. The proposed plant met definitions as a major source of emissions and would be located in the Dallas and Fort Worth area (DFW) where national ambient air quality standards (NAAQS) were being met. With its application, Sandy Creek submitted analyses of the proposed plant for prevention of significant deterioration review. The Commission referred the application to the State Office of Administrative Hearings (SOAH). The SOAH recommended that the Commission find the proposed plant in compliance with applicable law, and the Commission issued the permit to Sandy Creek. TPOWER and EDI sued for a review of the Commission’s actions. On appeal, TPOWER contended that since the Commission had found that the proposed plant would increase ozone levels in DFW nonattainment areas, either the Commission must deny the application or Sandy Creek must obtain ozone offsets. Rather than being a direct emission, ozone is created when sunlight acts upon a mix of volatile organic compounds and oxides of nitrogen (NOx). Guidelines of the Commission provide that a NOx-dominated source has insignificant ozone impacts. The Commission found the proposed plant to be NOx-dominated so its ozone impact would be insignificant. Therefore, there was substantial evidence to support the Commission’s issuance of the permit, and the appellate court overruled TPOWER’s issue. EDI’s issue on appeal was whether the Commission erred when it had excluded evidence that the “best available control technology” (BACT) analysis for the proposed plant should have included an analysis of emissions limitations achievable through the coal-conversion process of integrated gasification/combined cycle (IGCC). Analyzing the statutory construction of the BACT definition, the appellate court concluded that a BACT analysis must consider only control technology that may be applied to the proposed facility, not any control technology requiring a redesign of the facility and thereby constituting an alternative proposal. The Commission concluded that IGCC would have required Sandy Creek to redesign the proposed plant. As a result, the appellate court also overruled EDI’s issue. PA Supreme Court Finds Oil and Gas Act Does Not Preempt Local Ordinance Huntley & Huntley, Inc. (Huntley) sought to drill and operate an oil and gas well on property located in an R-1 (single family) residential zoning district. The Pennsylvania Department of Environmental Protection issued a permit approving drilling of the well. The Borough Council (Council) indicated that its own zoning ordinance (Ordinance) permitted extraction of minerals only as a conditional use. Huntley perfected a conditional use application. Council then determined the well did not constitute mineral extraction based on the Pennsylvania common law presumption that “mineral” does not include oil and gas. Council denied the conditional use application, and the common pleas court affirmed Council’s decision. The Commonwealth Court reversed, determining that § 205 of the Oil and Gas Act (Act) preempted the Ordinance by addressing gas well location. The court further found that § 602 of the Act prohibits municipal ordinances from imposing restrictions or conditions on matters governed by the Act. The court disagreed with Council’s interpretation of the Ordinance as not permitting extraction of oil and gas as a conditional use, noting that the ordinance’s enabling statute, the Municipalities Planning Code (MPC), recognizes natural gas as a mineral and the dictionary defines “mining” to include mineral extraction. Council petitioned the Supreme Court for appeal to determine: (1) whether the Oil and Gas Act precludes municipalities from exercising zoning powers to regulate oil and gas well location; and (2) whether such municipalities must use the strict definition of minerals adopted in the MPC. The Supreme Court determined that § 602 applies to technical aspects and features of oil and gas well operation, rather than well location, and concluded that the Ordinance and the Act serve different purposes. The Supreme Court found that the Ordinance’s “overall restriction on oil and gas wells in R-1 districts is not preempted” by the Act. The court then approved the reasoning of the Commonwealth Court in utilizing MPC’s definition of the term “mineral” to include natural gas, “and that Council improperly denied conditional use approval predicated on its after-the-fact, restrictive interpretation of the phrase, ‘extraction of minerals.’” The Supreme Court reversed the court below “insofar as it held that the Oil and Gas Act preempts the zoning ordinance in question, but it is affirmed in all other respects.” The matter was remanded for further proceedings consistent with the opinion. PA Supreme Court Strikes Ordinance Restricting Oil & Gas Operations Salem Township (Township), Westmoreland County, enacted an ordinance directed at regulating the development of oil and gas operation. The ordinance restricted oil and gas drilling activities as to permits for drilling, location, design and construction of access roads, transmission lines, water treatment facilities and well heads. It also established a fee for permit applications and included criminal penalties for non-compliance. A group of oil and gas producers (Producers) sued seeking a declaration that the ordinance was invalid due to non-compliance with the Municipalities Planning Code (MPC), preemption by the Pennsylvania Oil and Gas Act (Act), and preemption by other state and federal enactments, and under due process and regulatory takings theories. The trial court granted partial summary judgment in favor of Producers, finding the Act preempted the Township’s oil and gas regulations and invalidated the ordinance. The Commonwealth Court affirmed. Township appealed, seeking a review of (1) whether the preemptive scope of the Act was as broad as the interpretation of the trial court, and (2) whether the entire ordinance was properly invalidated. The Supreme Court found that the ordinance “reflects an attempt by the Township to enact a comprehensive regulatory scheme relative to oil and gas development within the municipality.” In some instances, the ordinance was found to be more stringent than the Act, requiring costs in excess of those imposed by the Act. Further, the court held that even to the extent that certain provisions contained within the ordinance were unaddressed by the Act, such provisions were part of “the framework of and ordinance specifically directed to oil and gas well operations, [and] they plainly constitute an impermissible form of regulation…” which is improper under § 602 of the Act. The Supreme Court affirmed the order of the Commonwealth Court. Kansas Finds Lease Cancellation is Premature A state district court terminated Kansas Production Company’s (KPC) 1972 oil and gas lease on the Lewis’ land, citing a breach of the implied covenant to explore and develop. The lease was divided into upper and lower subterranean portions by a prior owner of the lease in 1994. The prior owner retained the upper portion of the leased premises, which was in continuous production since 1994, and KPC came to hold the lower portion of the lease by a series of assignments. KPC admitted at trial that it had not taken steps to develop its portion of the lease. The lease contained no specific time provisions for development. Importantly, there was never a request by the property owners that KPC comply with the implied covenant to explore and develop the lease. In 2004, the property owners demanded that KPC release its lease interest, reasoning that KPC breached “the implied covenant to produce [KPC’s] portion of said oil and gas lease.” In 2007, approximately two years after suit was filed, KPC obtained a commitment to drill a test well on the subject premises. Despite the commitment, the court terminated the lease for breach of covenant to explore. KPC filed a motion for reconsideration of termination of the lease, which the district court denied. The case was governed by the Kansas Deep Horizons Act, K.S.A. § 55-223 et seq., which implies a covenant to “reasonably explore and develop the minerals which are the subject of [an oil and gas] lease.” This covenant is a burden on the lessee and “any successors in interest.” Under Kansas law, K.S.A. § 55-226, a court has the authority to either allow the lessee a reasonable amount of time to comply with such an implied covenant or terminate the lessee’s right to the land covered by the lease. Kansas common law regards forfeitures, like that imposed on KPC by the district court, as an ultimate remedy, one available only where damages or equitable orders would be insufficient. Under certain circumstances, like abandonment and futility, a demand for compliance with the implied covenant is not a necessary condition for cancellation of a lease, but the best practice is for a landowner to demand that a lessee comply with the covenant before suing for forfeiture. Since there was no request for compliance, and no evidence of abandonment or futility, the Court of Appeals determined that cancellation of KPC’s lease was inappropriate. Prior to the “extreme remedy of forfeiture” of KPC’s lease, there should have been a demand for compliance. Absent such a demand, KPC should be afforded a reasonable time to comply with the lease. The court reversed and remanded for proceedings consistent with its opinion. Kentucky Finds 1924 Coal Deed Conveyed Coalbed Methane The Fourth Judicial Circuit Court, Hopkins Circuit Court, entered an opinion and judgment on February 13, 2009, finding that coalbed methane (CBM) is owned by the coal owner so long as CBM remains within the coal seam. Plaintiffs brought a Petition for Declaration of Rights under a 1924 coal deed conveying “[a]ll the veins and beds of coal in and underlying 1060.99 acres of land . . . together with the fire clay immediately underlying the said veins and beds of coal . . . and for draining and ventilating any mines . . . .” Ownership of the coal estate was vested in Defendants. In 1960, the surface was conveyed, excepting therefrom the coal previously conveyed and “all other minerals and mineral rights in and under” the property. Ownership of “all other minerals” was vested in Plaintiffs. Kentucky follows the “Rule of Capture” for fugacious oil and gas interests. The court addressed two issues: (1) whether the conveyance of the coal estate included the CBM; and (2) whether there are correlative rights as between Plaintiffs as owners of “all other minerals” and Defendant surface owners. The court found that Defendants own CBM within the coal seams and veins. The 1924 deed creating the mineral interest owned by Defendants was unambiguous and conveyed, “[a]ll the veins and beds of coal in and underlying 1060.99 acres of land . . . together with the fire clay immediately underlying the said veins and beds of coal . . . .” The court made clear that the owners of this coal estate are the owners of the CBM within the coal veins and beds so long as the CBM remains within the seam or vein. Should CBM migrate from the coal seam or vein, it is subject to capture by Plaintiffs. Although the analysis was similar, this decision is contrary to the holding in Geiger v. U.S., 456 F.Supp.2d 885 (2006), where the United States District Court for the Western District of Kentucky held that the CBM did not belong to the coal owners based upon the language in the instrument that conveyed coal title. The court cautioned that Geiger should not be read to mean that oil and gas owners always own CBM. The second issue decided by the court involved the revised reclamation plan submitted by Hopkins County Coal, LLC (HCC) and approved by the Department of Natural Resources (DNR). HCC originally planned to reclaim the land by filling in the mined pit with dirt, but the estimated $23 million cost caused a change in plans when the time for reclamation drew near. HCC submitted a revised plan to reclaim the pit by filling it with water, creating an impoundment covering 145.284 acres, 36 of which are on the property at issue. Plaintiffs argued impoundment would create an unreasonable or material interference with their activities and operations connected to their mineral ownership. The court found that Kentucky Revised Statute § 353.510 allows reasonable opportunity for oil and gas right owners to recover and receive oil and gas, without waste, in and under the tract or tracts of land. There is, however, a “correlative right” on the part of the surface owner to use and deal with the surface estate in a manner not inconsistent with the rights of the mineral owners. The court ruled that the approved water impoundment did not materially interfere with Plaintiffs’ rights as mineral owners and Plaintiffs may use different drilling techniques to gain access to their minerals. The court reasoned that only about three percent of the surface of the 1,060-acre tract at issue would be occupied by the impoundment. Kansas Finds 1924 Coal Deed Does Not Convey Coalbed Methane The Supreme Court of Kansas, on an issue of first impression, held that coal deeds executed in 1924-26, which conveyed “all coal” together with mining rights, did not, in fact, convey ownership of coalbed methane. The court declined to adopt the “first severance/container theory,” noting that “if a coal deed is to include coalbed methane, that inclusion must emanate from the parties’ intent.” Specifically, during the time period of 1924 to 1926, coalbed methane gas was known by the industry to be a hazardous by-product of mining. Coalbed methane was a mineral separate and distinct from solid mineral coal. Its release as a consequence of mining was a source of great danger to life in the coal mines and, thus, additional expense was required to ventilate and control the gas during the mining process. The court noted that in 1924, ownership and responsibility for coalbed methane was not desired by either party; coalbed methane was a useless gas to the landowner and a source of danger to the coal owner. Indiana Sides with Coalbed Methane Lessee for Production of Coalbed Methane In 1976, Gletus and Ernestine Hardiman (Hardimans), owners of the surface and all underlying minerals, entered into a conventional oil and gas lease (Oil and Gas Lease) that was ultimately assigned to Cimarron Oil Corporation (Defendant). The Oil and Gas Lease granted Defendant the exclusive right to explore for and produce oil and gas. Subsequently, in 2001, the Hardimans entered into a coalbed methane lease (CBM Lease) with Howard Energy Corporation (Plaintiff). The CBM Lease granted Plaintiff the right to explore for and produce coalbed methane. Plaintiff brought a declaratory judgment action against Defendant seeking a determination of which party had the right to recover the coalbed methane. The court held that Plaintiff had the exclusive right to recover all the coalbed methane underlying the subject property. In reaching its decision, the court focused on Indiana’s public policy interest to protect its natural resources and the intent of the parties. In its public policy discussion, the court noted that if control of the coalbed methane generally stays with the owner of the coal then there is incentive for coalbed methane production to be done in a manner enhancing the value of the coal. When the court discussed the intent of the parties, it reasoned that it is unlikely that a coal owner would intend to grant the right to seriously damage the valuable coal seam in an oil and gas lease. The court further reasoned that, given the execution date of the Oil and Gas Lease, the parties did not contemplate or intend to include coalbed methane within the definition of gas. The decision was appealed on February 4, 2009, but hearing on the matter has not been scheduled. MSHA Rules on Training Vacated United Mine Workers of America (UMWA) filed a petition in the United States Court of Appeals, District of Columbia, for review of a final rule promulgated by the Mine Safety & Health Administration (MSHA). The court found the final rule inconsistent with the MINER Act in three respects. The court held that the final rule contradicted § 4 of the MINER Act as to: (1) frequency of mine rescue training for small mines; (2) frequency of mine rescue contests; and (3) fulfillment of mine rescue training as a judge rather than a participant. The MINER Act provides that operators of mines with 36 or less employees must have two certified rescue teams whose members participate, at least semi-annually, in mine rescue training underground. The court found that MSHA’s rule requiring only annual training contradicted the unambiguous language of the MINER Act. Section 4 of the MINER Act requires rescue teams at both large and small mines to participate in two local mine rescue contests each year. The final rule permits mine rescue team members who are state employees with certain job duties to substitute job experience for up to fifty percent of their training requirements. In effect, the rule would require teams to engage in only one mine rescue contest per year. The court was not persuaded by MSHA that one contest and work experience was functionally equivalent to the two contests required by the MINER Act and struck down that portion of the rule. MSHA’s rule would also permit rescue teams to fulfill the rescue contest requirement by participating in one contest and judging another contest. The court found that the MINER Act explicitly demanded experiential education, not the cerebral hands-off activity of evaluation. In striking down the rule, the court stated “MSHA's conclusions that one can participate in a mine contest by judging is at odds with the statutory language.” Permit Required before Discharge of Acid Mine Drainage into Streams Plaintiffs filed suit against the Secretary of the West Virginia Department of Environmental Protection (WVDEP), claiming that WVDEP was polluting waterways in violation of the Clean Water Act, 33 U.S.C. § 1251, et seq. Plaintiffs sought injunctive relief, claiming that Defendant was required to obtain permits from the National Pollution Discharge Elimination System (NPDES) to conduct its operation. Defendant, which operated eighteen bond forfeiture sites throughout West Virginia, treated and released acid mine drainage into streams at each of these sites. It was not disputed that the levels of acid mine drainage exceeded the requirements of the Clean Water Act. The district court granted Plaintiffs’ motion for summary judgment and ordered Defendant to apply for NPDES permits. The court rejected Defendant’s argument that sovereign immunity barred Plaintiffs’ suit, noting that citizen suits for injunctive relief under the Clean Water Act are permissible under the Eleventh Amendment. The court also rejected Defendant’s argument that bond forfeiture sites did not qualify as “point sources” under the Clean Water Act. Finally, the court held that Defendant was an “operator” for the purposes of the Clean Water Act. Therefore, Defendant was required to apply for NPDES permits to continue its operation on the eighteen sites. Massachusetts Denies Right of Eminent Domain for 77 Year Old Pipeline Easement Mobil Pipe Line (Mobil) owns and operates a 77-year-old oil pipeline running between East Providence, Rhode Island and Springfield, Massachusetts. A 120-foot section of the pipeline passes underneath a railroad bed owned by Providence and Worcester Railroad Company (P&W). Since the pipeline’s construction, P&W or its predecessors have leased an easement to Mobil or its predecessors covering this strip of land. Upon the expiration of the most recent lease, however, the parties were unable to negotiate a new agreement, and Mobil filed a petition with the Massachusetts Energy Facilities Siting Board (Board) to take the easement by eminent domain pursuant to authority granted under Massachusetts General Laws 164 § 69S. The statute authorizes the taking of land for “oil facilities,” which are defined in relevant part as “any new pipeline for the transportation of oil . . . .” The Board recognized that Mobil’s pipeline was not “new” under the ordinary meaning of the word, but nevertheless held that it had the authority to grant eminent domain requests for existing pipelines. The Board determined that a literal reading of the statute would be inconsistent with legislative intent to enact a comprehensive scheme of legislation that “‘[l]ogically . . . should include [the power to authorize a taking by eminent domain for] both existing and new oil pipelines.’” P&W appealed the Board’s decision to the Supreme Judicial Court of Massachusetts. In overturning the Board’s decision, the court noted that the power of eminent domain must be granted by express terms or by necessary implication and that eminent domain statutes must be strictly construed because of their effects on private property rights. Because the statutory language in this case was “clear and unambiguous,” the court was constrained to “give effect to the [l]egislature’s expressed intent.” The court noted that the legislature had enacted other statutes which authorized takings for both new and existing facilities on behalf of gas and electric companies. Therefore, had the legislature intended to empower the Board to authorize the taking of land for existing pipelines, it “knew how to make its intent clear.” The court was not persuaded by Mobil’s view that the statute provided for an exception. Mobil argued that the “except” clause of the oil facilities definition, which limited such structures to new pipelines “greater than one mile in length except restructuring, rebuilding or relaying of existing pipelines,” created an exception to the requirement that a pipeline must be “new.” Rejecting this argument, the court held that the “most plausible purpose of this clause is to clarify that an existing pipeline that has been ‘restructur[ed], rebuil[t], or relay[ed]’ is not an ‘oil facility,’ even though its components are fresh, ‘renovated’ or ‘recreated.’” Federal Grand Jury Indicts Mine Foreman In January 2006, a conveyor belt in Aracoma Coal Company’s Alma No. 1 mine in Logan County, West Virginia overheated and caught fire, trapping 12 miners underground. Ten of the miners found an alternate escape route, but two miners did not escape and died from carbon monoxide poisoning. On January 29, 2009, a federal grand jury in West Virginia indicted David Runyon, an underground mine crew foreman at the Alma No. 1 mine, on two counts of failing to conduct escapeway drills and three counts of falsifying records to indicate that the drills were actually done. Runyon was scheduled to make an initial appearance on February 17, 2009 before U.S. Magistrate Judge Mary Stanley. According to the U.S. Attorney’s Office, Runyon faces up to seventeen years in prison and a $950,000 fine, if convicted. Earlier this year, Aracoma, which is a subsidiary of Richmond, Virginia-based Massey Energy Company, pleaded guilty to nine counts of willfully violating mandatory safety standards and one count of making a false statement, as part of an agreement with the U.S. Attorney’s Office. Aracoma is also paying a $2.5 million fine for related safety violations and it will pay an additional $1.7 million in civil penalties for violating the Federal Mine Safety and Health Act. The settlement, according to the U.S. Attorney’s Office, is the largest in the history of the coal industry. As part of the guilty plea, Aracoma admitted that its employees removed two ventilation controls from the Alma No. 1 mine in 2005 and that it failed to replace the ventilation controls or to provide additional ventilation controls leading to a primary escapeway. Aracoma is scheduled to be sentenced on April 15, 2009 by U.S. District Judge John T. Copenhaver, Jr. in the U.S. District Court for the Southern District of West Virginia. Last November, Massey reportedly settled a wrongful death action filed by the widows of the two miners who died in the January 2006 fire; however, details of that settlement have not been released. OSM Approves Amendments to W. Va. Surface Coal Mining and Reclamation Act On December 24, 2008, the U.S. Office of Surface Mining Reclamation and Enforcement (OSM) approved two amendments to the West Virginia Surface Coal Mining and Reclamation Act (WVSCMRA) relating to the cumulative hydrologic impact assessment to be made by the West Virginia Department of Environmental Protection (WVDEP) when it considers permit applications for surface mining operations. The amendments: (1) delete the definition of “cumulative impact” contained in W.Va. C.S.R. § 38-2-2.39; and (2) add a sentence to W.Va. C.S.R. § 38-2-3.22.e defining “material damage” as “any long term or permanent change in the hydrologic balance caused by surface mining operation(s) which has a significant adverse impact on the capability of the affected water resource(s) to support existing conditions and uses. The State of West Virginia first submitted the amendments to OSM for review in 2001, and OSM approved the proposed changes in 2003. Following OSM’s decision, however, the Ohio River Valley Environmental Coalition, Inc., and others, filed a complaint in the U. S. District Court for the Southern District of West Virginia asking the court to review whether OSM’s decision violated the Administrative Procedures Act (APA). The district court vacated OSM’s decision and, by amended order, directed OSM to notify the State that it must only enforce the State program approved by OSM prior to the proposed amendments of 2001. The district court’s decision was affirmed by the Fourth Circuit Court of Appeals in 2006 in Ohio River Valley Envtl. Coalition v. Kempthorne, 473 F.3d 94. The court held that OSM’s decision was subject to the rulemaking procedures of the APA. Moreover, the court held that OSM failed to make a finding that the proposed amendments were consistent with, and no less stringent than, the provisions of the federal Surface Mining Coal and Reclamation Act (SMCRA). The amendments were re-submitted to OSM for approval by letter dated March 22, 2007, which included the State’s explanation of why the amendments would not render WVSCMRA any less stringent that SMCRA. OSM found that deletion of the definition of “cumulative impact” would have no adverse effect on WVDEP’s obligations under WVSCMRA to determine whether a proposed surface mining operation is designed to prevent “material damage to the hydrologic balance outside the permit area.” In rendering its decision regarding the addition of the definition of “material damage,” OSM noted that neither SMCRA nor its implementing federal regulations define “material damage”. OSM determined that West Virginia’s proposed definition of material damage would provide reasonable guidance to WVDEP in making determinations as to what would constitute material damage to the hydrologic balance outside the permit area. Consequently, West Virginia’s deletion of the term “cumulative impact,” and the addition of the definition of “material damage” to its permanent regulatory program would not render WVSCMRA any less stringent than its federal counterpart and no less effective than the federal regulations in achieving the purposes of SMCRA. California Commission Nixes Offshore Drilling Request On January 29, 2009, the State Lands Commission of California rejected a proposal for an offshore drilling project, which would have been California’s first in 40 years. The commission voted 2-1 against the drilling plan put together by Plains Exploration & Production Co., an oil company based in Houston, costing the company billions of dollars in lost revenue. Some analysts were surprised by the rejection since the proposal was the product of a compromise between Plains Exploration and several environmental groups that included a promise by the company to halt all drilling by 2022. The commission rejected the proposal in part because there was no guarantee that drilling would cease by 2022. Lieutenant Governor John Garamendi, chair of the Lands Commission, made his opposition to any offshore drilling clear, voicing strong support for the reinstatement of a federal moratorium on all offshore drilling. Garamendi was supported in his efforts by House Speaker Nancy Pelosi (D-Calif.) and other California members of Congress. Plains Exploration did not comment on the matter. The company has the right to appeal the decision in state court or submit a new proposal to the commission.
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