CHAPTER 2 A LANDMAN'S “HOW-TO-DO-IT” PERSPECTIVE ON MINERAL EXPLORATION PERMITTING

• Jurisdiction: United States

Land and Permitting
(Jan 1994)
CHAPTER 2
A LANDMAN'S "HOW-TO-DO-IT" PERSPECTIVE ON MINERAL EXPLORATION PERMITTING
Michael R. Neumann
TerraMatrix
Steamboat Springs, Colorado
Joseph H. Baird
Givens Pursley & Huntley
Boise, Idaho

I. INTRODUCTION

Hoop jumping as a mandatory sporting event for mineral exploration companies is not getting any easier. Increasing pressures in recent years on extractive resource users of public lands in the United States have caused federal land management agencies to exert greater control over many activities on lands within their domain.¹ Current legislative proposals to reform the 1872 Mining Law (HR 322 and S 775) focus on the alleged need for greater environmental protection of public lands and cleanup of abandoned hardrock mine sites.² Proposed changes to mining claim patenting provisions and assignment of liability for cleanup of abandoned hardrock mines reemphasize the need for mineral exploration companies to carefully examine potential liabilities associated with property acquisition, and to exercise caution when contemplating mineral exploration activities on federal lands. Increasingly regulatory pressures for the cleanup of pre-existing problems arise not just from federal "Superfund" authorities and federal land management agencies, but from state cleanup authorities, and various permit-based requirements. This paper will focus on permitting requirements for conducting mineral exploration on federal lands, the expanded nature of potential liability for pre-existing environmental problems and avoidance strategies for minimizing potential regulatory liability prior to turning the geologists loose with a drill rig.

II. AVOIDING LIABILITY FOR PRE-EXISTING ENVIRONMENTAL PROBLEMS AND THE NPDES STORM WATER PROGRAM

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A. Introduction and Summary

The NPDES storm water program, a relatively new program, requires certain exploration activities to obtain an approval to discharge storm water pursuant to an NPDES storm water permit. As discussed below, this "permit," if required at all, will typically be a "general permit," which requires notification of the activity and observance of relatively modest "best management practices" ("BMP's"). Thus, on an operational level, obtaining an NPDES storm water permit should only place a modest additional burden on exploration activities. However, this program could significantly increase the risk to conducting exploration programs in historical mining districts with pre-existing mining disturbances because of the significantly increased likelihood that such activities will trigger requirements for the exploration operator to limit or prevent discharges of storm water to a "water of the United States"...even though such "discharges" are not impairing water quality values, and even though the discharges are from disturbances which antedate the exploration operator's tenure.

B. NPDES Permitting of Exploration Projects

The Clean Water Act ("CWA") and the regulations promulgated under this Act broadly prohibit the "discharge of pollutants, from a point source, to waters of the United States"³ without a permit.

For a number of reasons, EPA and authorized NPDES States have failed to issue NPDES permits for the majority of point source discharges of storm water. Recognizing this, Congress added Section 402(p) to the CWA in 1987 to establish a comprehensive framework for addressing storm water discharges under the NPDES program.

58 Fed. Reg. 61146, 61247 (November 19, 1993). The NPDES storm water program is in the final stages of implementation.

Section 405 of the 1987 Amendments to the CWA required all "storm water discharges associated with industrial activity" to have an NPDES permit. The Standard Industrial Classification Manual includes exploration under the SIC codes for metal mining, p. 40, Office of Management and Budget (1987); therefore, EPA deems exploration activities to be an "industrial activity" subject to the NPDES storm water program. 40 CFR § 122.26(a)(14)(x) . Nevertheless, EPA has specifically deemed exploration to be a "construction activity," therefore, typically (individual states may take a different approach), exploration activities are not subject to the Ore Mining and Dressing Storm Water General Permit, but a construction general permit. 58 Fed. Reg. 61146, 61247 (November 19, 1993). EPA's current storm water regulations governing construction activities currently except "operations that result in the disturbance of less than five acres of total land area which are not part of a larger common plan of development or

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sale." 40 CFR § 122.26(a)(14)(x) . Thus, although specific state requirements vary, currently EPA does not require a stormwater general permit for disturbances of less than five acres.

EPA's general permit for storm water discharges from construction activities requires, among other things, submission of a "Notice of Intent" at least forty-eight hours prior to commencement of construction, submission of a storm water pollution prevention plan and implementation of "best management practices" ("BMP's") during construction activities. 57 Fed. Reg. 41176, 41217 (September 9, 1992). These requirements do not seem to be particularly onerous and should not dramatically impact exploration activities in the field. However, the more surprising impact of the storm water program's may result from its expansion of the obligations required of an exploration "owner" or "operator" under the CWA for elimination of discharges of storm water from areas previously disturbed by mining. The following section seeks to describe the nature of this expanded liability and to place it in context.

C. Expansion of the NPDES Ore Mining and Dressing Category to Require an NPDES Permit Subject to Part 440 Limitations for Essentially All Significant Storm Water Discharges from Active and Inactive Mining Sites

The EPA general permit for industrial storm water discharges was final and effective on September 9, 1992. 57 Fed. Reg. 41236. This general permit does not authorize discharges of storm water associated with industrial activity that are subject to an existing effluent limitation guideline for storm water runoff or a combination of storm water and process water. EPA specifically identified 40 C.F.R. Part 440 (the "Ore Mining and Dressing Point Source Category"), as one of several effluent guidelines that "address storm water or a combination of storm water and process water...." Id. at 41240, fn. 6.

The Ore Mining and Dressing Point Source Category, which provides industry-specific technology-based effluent limitations for most types of metal mining operations, was promulgated on December 3, 1982 at 40 CFR Part 440 (the "Part 440 Regulations"). Since that time, the Part 440 Regulations have governed discharges of "mine water" and "process wastewater." As a general proposition, these terms have been applied to mine dewatering discharges from both surface and underground workings and to mineral process wastewater (e.g., tailings and spent process fluids); however, commingling of storm water with these mine-generated fluids would subject the discharge to the permit requirements of the Part 440 Regulations. Traditionally, storm water run-off that has not been commingled with mine water or process wastewater has not been routinely subjected to the Part 440 Regulation NPDES permit requirements, although such requirements have been applied on a permit-specific basis where a specific water quality problem has been at issue. Thus, since exploration activities do not generate significant quantities of waste or wastewater, generally these activities have not been subject to NPDES permitting. EPA's draft general permit for "Storm Water Associated with Industrial Activity from Metal Mining (Ore Mining and Dressing Facilities)" changes that situation. Moreover, by dramatically expanding the universe of discharges subject to the Part 440 Regulations, virtually all storm water leaving a mine site (active or inactive) may be subject to Part 440. Considering that the Part 440

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Regulations provide a "no discharge" standard in parts of the country where evaporation exceeds rainfall, this can be an incredibly burdensome requirement, particularly for inactive facilities.

This change in approach to mining storm water discharges finally surfaced in November 1993 after several years of informal discussions and statements, when EPA formally took the position that essentially all storm water runoff from a mine site is covered by the effluent guidelines of 40 CFR Part 440. Specifically, on November 19, 1993, the EPA issued a notice of proposed rulemaking for the federal⁴ general permits covering storm water discharges associated with industrial activities, including discharges from the ore mining and dressing point source category. This proposed permit takes an expansive approach to defining most significant sources of storm water runoff at a mine site as "mine drainage," rather than as storm water. As discussed above, discharges of "mine drainage" are subject to the Part 440 Regulations, including the potentially applicable "no discharge" standard. This policy effectively limits the scope of true "storm water" runoff at active mine sites to storm water discharges from the following areas of active and temporarily inactive metal mining facilities:

topsoil piles; offsite haul/access roads, if off active areas; onsite haul roads if not constructed of waste rock or if spent ore and mine water is not used for control; runoff from tailings dams/dikes when not constructed of waste rock/tailings and no process fluids are present; concentrator building, if no contact with material piles; mill site, if no contact with material piles; chemical storage area; docking facility, if no excessive contact with waste product; explosive storage; reclaimed areas released from reclamation bonds prior to...