Improving Incentives for Mine Lands Reclamation Activities

Improving Incentives for Mine Lands Reclamation Activities Reclaiming the Sierra 2015 Issue Paper Version 1 October 29, 2014 This issue paper has been developed by The Sierra Fund and partners to frame the Policy and Coordination track of the Reclaiming the Sierra 2015 conference. This and the three other issue papers associated with the three other event tracks are working documents intended to frame the issues that will be addressed at the conference. As a result, they will be revised and updated leading up to the conference. Policy and Coordination Track Reclaiming the Sierra: The New Gold Rush, April 20-21, 2015 Moderators: Julie Griffith-Flatter, Sierra Nevada Conservancy Other moderators TBD Speakers: Glenda Marsh, Department of Conservation Abandoned Mine Lands Unit Elizabeth Martin, The Sierra Fund Other speakers TBD *indicates speaker who has expressed interest in presenting, but has not yet confirmed availability Background California is the only state in the nation that has a Surface Mining and Reclamation Act (SMARA). SMARA was adopted in the early 1970s to regulate both the opening of new mines and the reclamation of operating mines. It has been amended several times over the last 40 years. Prior to the adoption of SMARA, mining in California, like all other states in the nation, was regulated by the federal 1872 Surface Mining Act (SMA), and the state served as the lead agent for permitting and regulating mining in the state. Prior to the adoption of the California SMARA, there were no requirements that mines be reclaimed. SMARA delegates regulatory and permitting functions on private property to the local land use agency, usually cities or counties. These lead agencies perform the environmental evaluation of mines required by CEQA, as well as review and approve the reclamation plan as part of the overall mining permit they issue. The lead agency is also responsible for mine inspections and enforcement activities. Mines on federal lands are regulated by the land manager, usually the US Bureau of Land Management (BLM), the US Forest Service (USFS) or National Park Service (NPS). Version 1 October 29, 2014 Page 1

Complex Regulatory Structure One upshot of this regulatory structure in the state is that mine permitting is no simple matter, with 57 counties and scores of cities regulating their mines, plus dozens of state and federal agencies, each with their own procedures and protocols that are regulated by either the SMARA or the 1872 SMA. There are several key agencies and pieces of legislation which shape mine reclamation in California: The Office of Mine Reclamation (OMR), part of the Department of Conservation (DOC), is the primary state agency with oversight over mine regulation as outlined by SMARA. They have a very limited role in actually implementing SMARA, however, as those powers have been reserved for local government. Local Governments (cities and counties) are the lead agencies for enforcing SMARA. Recent research by California Senate Natural Resources Committee staff has shown that SMARA is enforced inconsistently by the counties and cities that serve as lead agency. While some local jurisdictions do an excellent job of regulating their mines, some counties and cities have been found to have a spotty record of inspection, enforcement and reclamation of mines in their jurisdiction. This has in some cases allowed mine operators to re-open gold mines that have not been operated for many years because they were never properly closed. In other instances mines that are known to not be in compliance with the law are allowed to operate and sell their products to the State despite the mine's failure to comply with state law. OMR has an Abandoned Mine Lands Unit (AMLU) that has led the effort to address legacy, abandoned mines. They are funded by a $5.00/oz. fee on gold, and $0.10/oz. of silver recovered and sold into the market, paid by current mine operations in the state. The AMLU has proven to be creative and efficient in their work, but their limited funding has generally made it difficult to take on anything more complex than physical hazard remediation on public lands. Federal programs under CERCLA/ Superfund have played some role in taking action on large, visible mine hazards. In addition, recent brownfields grants from the US EPA to the Gold Rush towns of Nevada City and Grass Valley have demonstrated how helpful these funds are to assess and remediate hazards in those towns. However, at this point federal programs lack of sufficient funding for mine reclamation activities on private or public lands. Clean Water Act regulations, enforced in California by the State Water Resources Control Board also create real challenges for landowners that may want to remediate their property in order to allow development. Currently, when a cleanup activity significantly reduces the amount of contamination discharging into the water using best available technologies and methods but still fails to meet the Clean Water Act quantitative standards the landowner has actually increased their liability even though there may be no viable way to meet these standards. In these cases, identification of best available technologies and methods and requirement that these standards be employed should be an acceptable shield for liability. Version 1 October 29, 2014 Page 2

This patchwork of agencies creates some serious problems for those interested in remediating abandoned mines. For example, mercury in soil is regulated by one agency using certain criteria, dissolved in water it is regulated by another with different criteria, when evaporated into the air a third entity and when it goes into the food chain yet another agency regulates with different measures. Unfortunately, mercury regularly goes between all of these forms. Unlike industrial pollution sources such as smokestacks or tailpipes, contamination of water from legacy abandoned mines comes not from ongoing mining activities at legacy abandoned mines instead, it is eroded from legacy mine sites with the rain. Stormwater runs out of the forests, sometimes through old tunnels, and pours into the river. This water is often loaded with sediment which is in turn loaded with mercury and other heavy metals. The Sierra Fund has called for these agencies to find ways to harmonize their regulations to agree upon common assessment standards and remediation practices. In particular, within California the Department of Toxic Substances and the Water Boards need to come to agreement on their standards, and then work with the US EPA, the USFS and the BLM to gain agreement across the board for common standards of assessment and remediation. This is especially crucial as many abandoned mine sites cross boundaries to cover both land owned by the federal government and lands owned by either private individuals or the state. Pre- vs. Post-SMARA Matters Another consequence is that mines have different regulations depending upon their operational status in 1972: Mines that shut their doors prior to 1972 were not required to conduct reclamation activities. These legacy mines can be on public or private land, and are considered abandoned by the statute. There are an estimated 40,000 abandoned mines in the state, 67% of them on federal land. Mines that started operation prior to 1972, and have continued to operate, are considered to have vested rights that allow them to continue operation in a special policy environment. They are still required to have an updated reclamation plan and to be regularly inspected. Mines that started operation after 1972 are required by their lead agency to undergo a full CEQA evaluation and development of a reclamation plan prior to issuing a permit for operation. These mines are required to post bonds to cover the cost of reclamation when the operation ends. They are supposed to be regularly inspected and to be reclaimed when operation ceases. This regulatory structure creates special challenges for legacy, abandoned gold mines that were never properly reclaimed but whose owners hope to begin gold mining again on those mine scarred lands. This challenge is made even more difficult when the legacy, abandoned gold mines have been built upon, and communities have grown on top of the tunnels or ore bodies that are still loaded with gold. Recommendations for Action Version 1 October 29, 2014 Page 3

To date there has not been much effort to reclaim legacy mines unless they have highly visible impact, such as the infamous Sacramento River fish kills from acid mine drainage coming from Iron Mountain Mine. Until recently the biggest concern about legacy mines was their physical hazards. Recent concern about the contribution of legacy mines to toxic mercury flowing into the Delta and San Francisco Bay, however, have built awareness of the need to reclaim mines that are tributaries to these water bodies. There is a real need to reform the policy framework in order to incentivize mine reclamation. We have identified three strategic objectives to incentivize reclamation: I. Improve coordination both among governmental regulatory agencies with jurisdiction over private and public land management and reclamation, and also with the academic, business, community and conservation institutions with interest in mine reclamation. Develop tyop The Sierra Fund has built relationships with the leaders and institutions with a stake in mining to improve coordination around these issues. TSF s Mining Toxins Working Group was formed in 2006 as part of creating our 2008 ground-breaking publication. Different subsets of this Working Group have participated in specific scientific research and evaluation activities. There are some tantalizing opportunities to work together to address problems. For example, The Sierra Fund s collaborative project works with an alphabet soup of partners in our project with California State Parks to assess the Humbug Creek that receives the drainage from the mining pit at their Malakoff Diggins State Historic Park and to develop a management plan to address this problem. The Sierra Fund's Reclaiming the Sierra conference is another tool we developed to improve coordination and information exchange between partners not only in government regulatory or land management agencies but also at academic, business, non-profit and community institutions impacted by mine-scarred lands. Legislative oversight hearings have also provided an important avenue for governmental agencies to provide coordinated and informative presentations to legislators. The 2014 hearing by Assembly Committee Water, Parks & Wildlife (then chaired by Assemblymember Chesbro) is a great example of a method that the public can use to help stimulate coordination and conversation between the various stakeholders interested in mine reclamation. The Cosumnes, American, Bear, Yuba (CABY) Integrated Regional Water Management (IRWM) group has recently begun a series of coordinated projects at several significant legacy mine sites in their watershed. These projects range from remediating a mine on land owned by the USFS, to exploring the effectiveness of the Combie Reservoir mercury removal project by the Nevada Irrigation District, to developing management and engineering plans for potential implementation in Malakoff Diggins State Historic Park. These projects give everyone practice working within each entity s cultural and regulatory frameworks. Coordination has also been improved by the re-invigoration of the California Abandoned Mine Lands Version 1 October 29, 2014 Page 4

Agency Group (CAMLAG), a government agency-run collaborative meeting that is convened by the Department of Conservation Abandoned Mine Lands Unit (AMLU) and attended by government agency personnel. This group helps provide regulators and land managers with a regular opportunity to discuss their ideas, concerns and strategies. Possibilities for Next Steps: 1. There need to be more consistent methods of assessing and reclaiming legacy mines and mine waste, as well as prioritizing reclamation activities. This would be an excellent topic for the CAMLAG to discuss and bring forward some ideas on how to improve coordination. This could include formal MOUs between state and federal EPA regulators, new common standards for remediation, or an agreed upon set of priorities for cleanup. 2. CAMLAG should pursue a series of multi-agency pilot projects that explore best methods for collaboration among these agencies. This could help share the costs of complicated and time consuming elements of the project. 3. The state must work closely with counties to ensure consistent enforcement of SMARA, especially the requirement to reclaim a mine when the operation is complete. 4. The pending Mercury TMDL for reservoirs program now under development at the State Water Resources Control Board should be used as an opportunity for agencies to work with each other to ensure that the regulation directs some investment upstream of the reservoirs or in the reservoirs themselves to remove the mercury where appropriate. II. Develop funding sources for reclamation activities on both public and private lands. Funding for mine reclamation activities in most states is funded through taxes on coal, but California is not eligible for these funds. Primary funding for mine reclamation in California has come from: Federal funds to remediate mines on USFS, BLM or National Park Service lands EPA brownfields funds for remediation of sites with development potential in towns Bond funds managed by various state agencies including the Sierra Nevada Conservancy. In fact, the Sierra Nevada Conservancy established a funding program specifically for legacy mine assessment and remediation activities on public lands. Lawsuit-driven mine cleanups using State general funds or other responsible party sources The proposed Water Bond (Proposition 1) has money that could be used for this purpose. If the bond passes, this will be a modest beginning in providing funds for legacy mines contributing mercury to California's watershed. Another source of funds could be the use of the Pollution Credit Finance Authority to allow downstream communities to contribute to upstream mine remediation. This could stop the mercury at its source and reduce contamination flowing into the San Francisco Bay and Delta. However, this cannot Version 1 October 29, 2014 Page 5

be pursued as a viable option until methods for reducing mercury upstream are proven to actually reduce mercury in the water column or in fish tissues downstream from the reclamation activity. Possibilities for Next Steps: 1. Raise the $5.00/oz. gold fee in California, and tie future changes in the fee to the price of gold. Use these funds to remediate mining s chemical hazards on public lands, and for research to identify remediation technologies and practices that address mercury discharge. 2. Add a small gold fee to the retail consumer end transaction and apply these funds to remediation of legacy/abandoned mines. 3. Use available (and any new) water bond funds for pilot projects that contribute to knowledge about how most effectively to treat mercury-contaminated watersheds. 4. Ask the philanthropic and business community to help fund efforts to prove environmentally sound, effective technologies and protocols that remediate mercury from legacy gold mines in order to qualify for Pollution Credit Finance Authority funding opportunities. III. Create a new mechanism to incentivize mine reclamation using best available technologies and practices for responsible and pro-active mine reclamation activities that are protected from liability under the Clean Water Act. Legacy mine lands that have a storm water discharge need a different form of regulation than factories or automobiles. Fundamental to this new regulatory mechanism is the ability to identify best available technologies (BATs) and best management practices (BMPs) in a consistent way for the unique circumstances of mine reclamation. Another key element of the mechanism must be that measurable benefits must accrue to the public as a direct result of the reclamation activity. Finally, there needs to be vigorous oversight of both the reclamation activity as it is implemented and how it is monitored over the long run. Possibilities for Next Steps: 1. The Sierra Fund seeks to create a new mechanism that will allow landowners to use best available technologies and practices to treat storm water that is discharging from legacy mines and mine scarred lands without increasing their liability. One potential way to approach this would be to ask the legislature to create a new form of non-profit organization in California that has the ability to do reclamation without incurring liability if certain methods and criteria are met. The arm s length nature of the third-party cleanup could change the nature of the liability associated with the cleanup. A crucial element of this would be the ability to document public benefit from the remediation action, such as if the mine-scarred land is publicly owned or is owned by a non-profit such as a land trust. Further discussion is needed to help refine how this mechanism would work. Version 1 October 29, 2014 Page 6

2. Regulatory agencies need to be willing to accept best available technologies and practices (BATs & BMPs) to either replace or be used in conjunction with quantitative measures (such as amount of mercury in the water column) when creating regulatory actions. This will help incentivize landowners, whether public or private, to take action to improve water quality discharge from storm water flowing through legacy mines and into the state's waters. Version 1 October 29, 2014 Page 7