Ground-Up Waste Rock is Fill Material and Not Mine Wastewater – U.S. Army Corps of Engineers, Not EPA, Has Permit Authority

The U.S. Supreme Court, in a recent opinion, has overruled the U.S. Court of Appeals for the Ninth Circuit in determining that tailings (waste rock, a.k.a. slurry) from mining operations are “fill material” and, as such, the U.S. Army Corps of Engineers (COA) has the authority to issue permits for their dumping into a waterway without satisfying all of the pollution limits that the Environmental Protection Agency (EPA) enforces.  The ruling, allows the discharge of approximately 4.5 million tons of leftover pulverized rock from gold mining operations into a lake about 45 miles north of Juneau.  The discharge is anticipated to raise the lake’s bottom approximately 50 feet, increase its size from 23 acres to 60 acres and kill all of the fish in the lake. But, the mining company would treat the water coming out of the lake to make another existing lake a larger, more productive lake. 

The plaintiff, an Alaskan gold mine, planned to dispose of the slurry (combination of pulverized rock and water) produced as a by-product from its operations by pumping it into a nearby lake and then discharging purified lake water (after treatment) into a downstream creek.  Under the Clean Water Act (CWA), crushed rock falls under the definition of “pollutant” and requires that the party seeking its discharge to secure a permit before doing so.  So, if slurry fits within the statutory definition of “pollutant” the discharge permit must be obtained from the EPA.  However, if slurry is “fill material” the discharge permit is to be issued by the COA.  A joint EPA/COA regulation defines “fill material” as “any material that has the effect of changing the bottom elevation of water including slurry…or similar mining materials.”  Based on that regulation, the mining company sought and obtained a CWA discharge permit from the COA for the slurry (the water going into the lake) and an EPA discharge permit for the lake water discharge (the water going out of the lake).  The COA viewed the mine’s plan as the most cost-effective and least damaging to the environment, and EPA didn’t object. 

A coalition of environmental activist groups sued claiming that the mining company needed an EPA permit for the slurry discharge and that the slurry discharge would violate the “new source performance standard” that EPA has promulgated.  In essence, they claimed that the discharges would turn the lake into a tailings pond and that would violate the CWA.  The Federal District Court granted summary judgment for the mining company, but the U.S. Circuit Court of Appeals for the Ninth Circuit reversed on the basis that the slurry discharge would violate the EPA’s performance standard under the CWA. 

The Supreme Court granted review and reversed.  The Court determined that neither the CWA nor the regulations were entirely clear on the matter, but that the Court should defer to the COA and EPA regulations unless they were arbitrary and capricious.  They weren’t – and under them the slurry discharge constitutes “fill material” falling under the COA’s permitting authority.  The Court noted that even the EPA’s own regulatory interpretation of the matter reached the conclusion that “fill material” does not also need a “pollution” discharge permit from the EPA.  On the EPA performance standard issue, the Court noted that the EPA had issued a memorandum explaining that the CWA performance standard does not apply to the initial discharge of slurry into the lake.  That memo, the Court stated, was not plainly erroneous or inconsistent with existing regulations.  Also, the environmental groups failed to cite even a single instance where the EPA had applied a performance standard to discharge of fill material, but the mining company did show that the COA had issued a discharge permit which authorized mines to discharge solid waste as fill material. 

The Court’s opinion looks to be a win for responsible natural resource development – the most cost effective (a contrary ruling would likely have had a severely detrimental impact on the mining industry and the related economy) and least damaging to the environment (an alternative would have placed the slurry on nearby wetlands resulting in a pile “twice as high as the Pentagon and cover three times as many acres”).  However, legislation currently winding its way through the Congress – The Clean Water Restoration Act – would redefine “fill” to exclude mining waste.  That would have a noticeable, and negative, impact on the mining industry and those persons and local economies dependent on the industry.  Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, et al., No. 07-984, 2009 U.S. LEXIS 4730 (U.S. Jun. 22, 2009).