2017 West Virginia Department of Environmental Protection Annual Evaluation Report Prepared By: Charleston Field Office Office of Surface Mining Reclamation and Enforcement Charleston, West Virginia OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT Annual Evaluation Report for the Regulatory and Abandoned Mine Lands Reclamation Programs Administered by the West Virginia Department of Environmental Protection of WEST VIRGINIA for Evaluation Year 2017 July 1, 2016 to June 30, 2017 Prepared by Charleston Field Office Table of Contents Executive Summary .......................................................................................................... 1 I. Introduction....................................................................................................................... 6 II. Overview of the Coal Mining Industry in the State of West Virginia .............................. 8 III. Overview of the Public Participation Opportunities in the Oversight Process................. 12 IV. Major Accomplishments and Innovations ........................................................................ 13 V. Success in Achieving the Purposes of SMCRA ............................................................... 15 A. Off-Site Impacts.......................................................................................................... 15 A. Bonded Sites ......................................................................................................... 16 B. Forfeited Sites ....................................................................................................... 16 B. Reclamation Success................................................................................................... 17 C. Customer Service Review........................................................................................... 18 VI. General Oversight Topic Reviews .................................................................................... 19 A. Oversight Inspections.................................................................................................. 19 1. General Oversight Inspections.............................................................................. 18 2. Impoundment Oversight Inspections .................................................................... 20 3. State Inspection Frequency Activity..................................................................... 20 B. Program Amendment Status/Program Maintenance................................................... 21 1. Program Amendment Status ................................................................................. 21 a. Statutory/Regulatory Amendments (WV-113/WV-114) .................................. 21 b. Alternative Bonding System Revisions (WV-115)........................................... 22 c. Statutory/Regulatory Revisions (WV-116)....................................................... 23 d. Statutory/Regulatory Revisions (WV-117)....................................................... 24 e. Regulatory Revisions (WV-118)....................................................................... 25 f. Special Reclamation Tax Revisions (WV-119)................................................. 25 g. Federal Lands Cooperative Agreement (WV-120)........................................... 26 h. Award of Attorney Fees and Costs (WV121)……………………………………....... ........................................................ 27 i. Bond Forfeiture Tax Incentive and Informal Conference Procedures (WV-122)........................................................................................................... 27 j. Office of Explosives and Blasting, Blasting Rule, Hydrologic Protection and Stormwater Runoff Analysis (WV-123) ..................................................... 28 k. Inactive Status, Bonding, Topsoil, and Contemporaneous Reclamation (WV-124).......................................................................................................... 29 l. Pre-Blast Surveys, Bond Release and Other Bonding Requirements, and Payments from the Special Reclamation Water Trust Fund (WV-125)…........ 30 2. Program Maintenance ........................................................................................... 30 a. Required Program Amendments ....................................................................... 31 b. 30 CFR Part 732 Notifications.......................................................................... 30 c. 30 CFR Part 733 Evaluation – Substituting Federal Enforcement and Withdrawing Approval of a State Program ...................................................... 31 C. Notices of Intent to Sue (NOIs) Filed Against OSMRE............................................. 31 a. Notice of Intent to Sue (NOI) Regarding the State’s Failure to Properly Administer its Approved Program ........................................................................ 31 b. Notice of Intent to Sue (NOI), 30 CFR Part 733 Evaluation Request, and 30 CFR Part 732 Request Regarding the State’s Bonding Program .................................. 32 D. Follow Up State Improvements Commitments 2.a Follow Up State Improvements Commitments (CHIA) ....................................... 34 2.b Follow Up State Improvements Commitments (NPDES) .................................... 35 2.c Follow Up State Improvements Commitments (TOPSOIL)................................. 35 2.d Follow Up State Improvements Commitments (SWROA) .................................. 36 E. Acid Mine Drainage (AMD) Inventory of Active Permits......................................... 37 F. Reforestation Activities .............................................................................................. 38 G. State Regulatory Staffing/Program Funding............................................................... 40 H. State Bond Forfeiture Administration Grant Reimbursement Rate ............................ 41 I. Dam Compaction ....................................................................................................... 41 J. Litigation..................................................................................................................... 41 1. Litigation Involving OSMRE ............................................................................... 42 a. Ongoing Litigation Regarding the State’s Bonding Program......................... 42 b. Litigation Concerning a West Virginia Operation that had Not Started Mining within Three Years of Permit Issuance ........................................................... 43 2. Litigation Involving the WVDEP ......................................................................... 45 a. Citizen Suits Regarding Water Quality Violations at Bond Forfeiture Sites................................................................................................................. 45 3. Litigation Filed Against Various Coal Companies ............................................... 47 a. Citizen Suit Against Hobet Mining Concerning Selenium............................. 47 b. Citizen Suit Filed in West Virginia Against Fola Coal Company .................. 49 4. Bankruptcy Filings of Coal Companies Operating in West Virginia ................... 51 a. Alpha Natural Resources Inc. – Case No. 3:15-bk-33896 (KRH).................. 51 b. Arch Coal, Inc. – Case No. 4:16-bk-40120 .................................................... 53 c. Peabody Energy Corporation – Case No. 16-42529 (BSS) ............................ 54 K. Monitoring and Improvement to West Virginia’s Alternative Bonding System......................................................................................................................... 55 L. Trend Station/Watershed Health Oversight ................................................................ 58 M. Slurry Impoundment/Basin Breakthrough/Dams Action Plan ................................... 58 N. Incidental Boundary Revisions (IBR)......................................................................... 59 O. Lands Unsuitable Petitions ......................................................................................... 59 P. Underground Mine Hydrology Field Review ............................................................. 59 VII. Regulatory Program Problems and Issues ........................................................................ 60 A. Slurry Impoundment Basin Breakthrough Potential................................................... 60 B. Acid Mine Drainage Inventory of Active Permits ...................................................... 60 C. State Regulatory Staffing and Program Funding ........................................................ 61 D. Customer Service –Citizen Complaint System........................................................... 61 E. Acid Mine Drainage Prediction-Underground Mining and Expansions Underground Mine Monitoring................................................................................... 61 F. Financial Adequacy of the Special Reclamation Fund (SRF) .................................... 62 G. Issues from OSMRE January 12, 2017 Decision on 30 CFR 733 Petition................. 62 VIII. OSMRE Assistance – Regulatory Program ...................................................................... 63 A. Underground Mine Monitoring – Technical Guidance Manual ................................. 63 B. Technical Training – Technical Innovation and Professional Services (TIPS) and National Technical Training Program (NTTP) .................................................... 63 C. Lexington Coal Company ........................................................................................... 63 D. The Quality Assessment Quality Control Panel (QAQC Panel) ................................ 64 E. GeoMine Project ......................................................................................................... 66 IX. Abandoned Mine Lands Reclamation Program ................................................................ 66 A. General........................................................................................................................ 66 1. Introduction........................................................................................................... 66 2. Program Administration........................................................................................ 66 3. Abandoned Mine Land Inventory System Update................................................ 67 4. AMLER Economic Development Pilot Project.................................................... 70 B. Noteworthy Accomplishments.................................................................................... 71 1. WebAML Updates ................................................................................................ 71 2. OAMLR Training ................................................................................................. 71 3. USACE Meetings.................................................................................................. 72 4. AMD Set-Aside Projects....................................................................................... 73 C. Utilization of OSMRE Technical Assistance ............................................................. 74 1. Technical Training ................................................................................................ 74 2. OSMRE/Fish & Wildlife Programmatic Consultation Update............................. 74 D. Public Participation and Outreach .............................................................................. 75 E. Results of Evaluation Year 2017 Reviews.................................................................. 75 1. Regular AML Construction Program.................................................................... 75 2. Emergency Program.............................................................................................. 76 3. OAMLR Project Oversight ................................................................................... 77 4. OAMLR Enhancement 3.14 ................................................................................. 78 5. Project Maintenance Program Oversight .............................................................. 78 F. OAMLR Program Problems and Issues...................................................................... 79 Regulatory Tables Corrections for EY 2017 Reg-8 tables due to errors in EY 2016 AML Tables Annual Evaluation Report – West Virginia 2017 Executive Summary This 2017 Annual Evaluation Report contains information regarding the effectiveness of the West Virginia Department of Environmental Protection (WVDEP) in the implementation of the Surface Mining Control and Reclamation Act of 1977 (SMCRA) during the period of July 1, 2016, through June 30, 2017. The Office of Surface Mining Reclamation and Enforcement (OSMRE) Charleston Field Office (CHFO) oversees the Regulatory and Abandoned Mine Lands Programs of the WVDEP. Inspections are an integral part of OSMRE’s oversight activities, but OSMRE also utilizes programmatic reviews to investigate potential problems. OSMRE also monitors activities such as coal company bankruptcy filings and litigation for trends that might impact on the program. Highlights of some of the significant findings and activities are outlined below: A. REGULATORY PROGRAM SUMMARY A.1. State Accomplishments and Successes • WVDEP is converting all of its existing paper permit files into an electronic format managed by a program called Application Xtender. This program can scan, store, and retrieve permit file information accessible in either intranet or through web browser. It will reduce the reliance on conventional paper based systems and promote immediate benefits such as increased customer service, responsiveness and efficiency. This all translates to reduced waste and lower departmental costs. • Procedural improvements have been made to reclamation bond releases, particularly underground mining permits. • Office of Explosives & Blasting has been officially transferred to the Division of Mining and Reclamation (DMR). • DMR has updated the MR-35 citizen complaint forms to include additional rights regarding inspection information. • DMR has increased training in explosives and blasting to all inspection and enforcement personnel. Developing and testing 360 Camera and associated (VR) software and systems for use in SMCRA field data collection. This work is being conducted with WVDEP and the OSMRE Mobile Computing Work Group. • Fully deployed and trained all DMR Inspectors on AvenzaMaps for field use. • Deployed all Mining Permit Maps in GeoPDF format for use in this IOS based Cell Phone Software. • Tested deployment of mining Geographic Information System (GIS) data in ESRI ArcGIS Online for use in the IOS Collector Application. Page 1 Annual Evaluation Report – West Virginia 2017 • A.2. DMR began working with TAGIS, Office of Special Reclamation and OSMRE to develop drone-based SMCRA data collection systems and protocols. National Measurement Elements  Off-Site Impacts: The evaluation revealed that 93 percent of the State’s 1,866 permitted sites were off-site impact free and 84 percent of the State’s 273 bond forfeiture sites were off-site impact free. As part of the evaluation of off-site impacts, OSMRE used the State’s enforcement records to determine that the primary cause is operator negligence. (See Section V.A)  Reclamation Success: OSMRE inspections indicate that State bond release data can be a valid measurement of reclamation success. Actual bond release acres were up from previous years. (See Section V.B)  Customer Service – Blasting Claims and Arbitration Process: During this evaluation year, OSMRE examined the State’s blasting claims and arbitration process. Overall, OSMRE found the State’s claims and arbitration process was effective and responsive to citizen complaints alleging blasting related damage. (See Section V.C.) A.3. Other State Specific Oversight/Topic Reviews Evaluation Summary of Oversight Inspections: During Evaluation Year (EY) 2017, the CHFO completed 339 random oversight inspections, six citizen complaint referrals, eight follow up inspections on federal actions, and one other mine site evaluation. (See Section VI.A.1 and VI.A.2) Impoundment Oversight Inspections: During EY 2017, OSMRE continued the emphasis on review of slurry impoundments and refuse compaction. Five impoundment inspections were conducted. On the four regular oversight inspections, one violation was identified for failure to maintain drainage control. OSMRE deferred this violation to the WVDEP for issuance of a Notice of Violation (NOV) (Refer to Section VI.A.2) 30 CFR Part 733 Evaluation – Substituting Federal Enforcement and Withdrawing Approval of a State Program: On June 24, 2013, eighteen (18) environmental, civic and religious groups filed a petition under 30 CFR 733 demanding that the Federal Government takeover regulation of surface coal mining and reclamation activities in West Virginia. On December 30, 2013, OSMRE dismissed 14 of the allegations, but agreed to evaluate the State’s administration of its approved program in five areas. The review considered the State’s administration of requirements related to storm water runoff analysis, topsoil handling, citation of SMCRA violations based on NPDES standards, cumulative hydrologic impact assessments and selenium discharge prevention. On January 12, 2017, OSMRE found the WVDEP was properly administering its program. WVDEP is addressing issues discovered during the review process. Page 2 Annual Evaluation Report – West Virginia 2017 A.4. Program Amendment Status/Maintenance In addition, this annual evaluation report also discusses West Virginia Program Amendment status and maintenance. WVDEP has no outstanding required program amendments, but the following revisions to its Surface Coal Mining and Reclamation Act or Surface Mining Reclamation Regulations and its Federal Lands Cooperative Agreement are pending or under review:             Statutory/Regulatory Amendments (WV-113/WV-114)(Submitted 2008); Alternative Bonding System Revisions (WV-115)(Submitted 2009); Statutory/Regulatory Revisions (WV-116)(Submitted 2009); Statutory/Regulatory Revisions (WV-117)(Submitted 2011); Regulatory Revisions (WV-118)(Submitted 2011); Special Reclamation Tax Revisions (WV-119)(Submitted 2012); Federal Lands Cooperative Agreement (WV-120)(Submitted 2014); Award of Attorney Fees and Costs (WV-121)(Submitted 2013); Bond Forfeiture Tax Incentive and Informal Conference Procedures (WV-122)(Submitted 2013); Office of Explosives and Blasting, Blasting Rule, Hydrologic Protection and Storm water Runoff Analysis (WV-123); and Inactive Status, Bonding, Topsoil, and Contemporaneous Reclamation (WV-124) (Submitted 2016). Pre-Blast Surveys, Bond Release and Other Bonding Requirements, and Payments from the Special Reclamation Water Trust Fund (WV-125) (Submitted 2017). Final decisions are pending. Once approved, the decisions will be publicized in the Federal Register. (Refer to Section VI.B.1) A.5. Litigation OSMRE is directly involved in two (2) lawsuits:  West Virginia Highlands Conservancy v. Secretary Ken Salazar and West Virginia Coal Association, DOI, Civil Action No. 2:00-cv-1062 (S.D. W.Va.). Regarding the State’s Bonding Program.  Coal River Mountain Watch, et al., v. United States Department of the Interior, et al., Civil Action No. 1:13-cv-01606-KBJ (D.D.C). and Civil Action No. 2:13-cv-26251 (S.D. W.Va.). Regarding Not Started Mining Activities within Three Years of Permit Issuance. WVDEP is continuing to follow through with obtaining NPDES permits for forfeiture sites as its commitments to settle litigation regarding water quality violations at bond forfeiture sites OSMRE is also monitoring two (2) cases involving litigation between environmental groups and various permittees involving the SMCRA or the Clean Water Act (CWA). Additionally, Page 3 Annual Evaluation Report – West Virginia 2017 OSMRE is monitoring seven (7) Bankruptcy filings of coal companies operating in West Virginia. Regulatory Program Problems and Issues A.6. Action Plans In January 2011, OSMRE issued a national Directive (REG-23) which formalized a procedure for resolving issues found during oversight that take longer than six months to resolve and which could indicate a failure of a State to properly administer all or part of its program. During EY 2017, OSMRE continued to address one on-going action plan:  Slurry Impoundment Breakthrough Potential: (See Sections VII.A) WVDEP completed its commitments to review all impoundments for the potential of the slurry basin to breakthrough into underground works. OSMRE sampled 12 of the State’s recent decisions and determined that WVDEP had fully implemented all requirements. The action plan is considered closed. A.7. Other Issues The annual report also lists areas where OSMRE finds the State could improve its program, but the issues do not yet rise to the level of a program deficiency, or the issues are expected to be resolved within 180 days. These include:    B. B.1. Acid Mine Drainage Inventory of Active Permits: (See Section VII.B) State Regulatory Staffing/Program Funding: (See Section VII.C) Adequacy of the Special Reclamation Fund: (See Section VII.G.) ABANDONED MINE LAND RECLAMATION PROGRAM Abandoned Mine Land Grant Funding The Fiscal Year (FY) 2017 Abandoned Mine Land Grant performance period extends from January 1, 2017, to December 31, 2019. Funding in the amount of $23,750,487.00 was awarded to the Office of Abandoned Mine Land Reclamation (OAMLR) in 2017. Because the grants are awarded for a three year time frame, some funding was also provided in the previous three year’s Abandoned Mine Land Grants and used to complete work this evaluation year. B.2. Accomplishments Major accomplishments being reported for EY 2017 include:  Acid Mine Drainage (AMD) Set-Aside Projects: Through their original 2017 grant award, and a subsequent amendment, OAMLR placed $3,378,856 into their AMD set-aside fund this year. As reported in the 2016 Annual Evaluation Report, OAMLR Page 4 Annual Evaluation Report – West Virginia 2017 continues to accrue interest on their set-aside funds utilizing a revised funding mechanism that now is growing the fund at a more reasonable rate of return. (See Section IX.B.4) B.3. Results of Evaluation Year 2017 Reviews  Regular AML Construction Program: The number of completed designs and construction contracts issued were up relative to EY 2016. (See Section IX.E.1)  Emergency Program: During EY 2017, the AML Emergency Program investigated 280 complaints, resulting in the declaration of 31 emergencies. (See Section IX.E.2)  AML Project Oversight: During EY 2017, the CHFO conducted 36 AML project oversight inspections. This number was an increase from the 15 site inspections completed last year. Refer to Section IX.E.3 for further information on CHFO’s EY 2017 oversight of the OAMLR reclamation program. B.4. Staffing Staffing within the AML Program remains nearly identical to last year. Currently, OAMLR has 55 FTE positions filled and 9 vacancies. A complete description of AML Program administration is provided in Section IX.A.2 of this report. B.5. AML Program Problems and Issues There are no Problems or Issues concerning the WV AML Program (See Section IX.F) Page 5 Annual Evaluation Report – West Virginia 2017 I. Introduction SMCRA created the Office of Surface Mining Reclamation and Enforcement (OSMRE) within the Department of the Interior (DOI). SMCRA provides authority to OSMRE to oversee the implementation of and provide Federal funding for the state and tribal Regulatory and Abandoned Mine Lands Programs that have been approved by the Secretary of the Interior as meeting the minimum standards specified by SMCRA. This report contains summary information regarding the West Virginia program and the effectiveness of the West Virginia program in meeting the applicable purposes of SMCRA as specified in Section 102. This report covers EY 2017, which includes the period of July 1, 2016, to June 30, 2017. Detailed background information and comprehensive reports for the program elements evaluated during the period are available for review and copying at OSMRE’s Charleston Field Office, 1027 Virginia Street, East, Charleston, West Virginia 25301, telephone (304) 347-7158, or by email at OSM-CHFO@osmre.gov. Oversight documents can be found at ODOCS, OSMRE’s REG-8 Oversight Database at: http://odocs.osmre.gov/. ODOCS is a searchable database of all oversight documents. Our web site has changed: http://www.arcc.osmre.gov/about/offices/chfo.shtm. Information on West Virginia’s oversight program can be found at the following link: http://www.arcc.osmre.gov/about/states/wv.shtm, which also contains a link to the ODOCS Database. The following acronyms are used in this report: A&E ABS AER AMD AML AMLIS AOC ARRI AVS BCR CCR CHFO CHIA CRMW CSR CWA DMR DOI EPA Administration and Enforcement Alternative Bonding System Annual Evaluation Report Acid Mine Drainage Abandoned Mine Land Abandoned Mine Land Inventory System Approximate Original Contour Appalachian Regional Reforestation Initiative Applicant Violator System Biological Chemical Reactor Citizen Complaint Referral Charleston Field Office Cumulative Hydrologic Impact Assessment Coal River Mountain Watch Code of State Regulations Clean Water Act Division of Mining and Reclamation United States Department of Interior United States Environmental Protection Agency Page 6 Annual Evaluation Report – West Virginia 2017 ERIS Environmental Resources Information System ERIS/EQuIS Environmental Resources Information System/Environmental Quality Information System EY Evaluation Year FAM Federal Assistance Manual FBR Fluidized Bed Reactor FIMS Financial Information Management System FR Federal Register FRA Forestry Reclamation Approach FTACO Failure to Abate Cessation Order FTE Full Time Equivalent FWS United States Fish and Wildlife Service FY Fiscal Year IBR Incidental Boundary Revisions IMB Investment Management Board IU Inspectable Unit NLEB Northern Long Eared Bat NOI Notice of Intent to Sue NOV Notice of Violation NPDES National Pollutant Discharge Elimination System NTTP National Technical Training Program OAMLR Office of Abandoned Mine Land Reclamation OASIS Our Advanced Solution with Integrated Systems OSMRE Office of Surface Mining Reclamation and Enforcement OSR (WVDEP) Office of Special Reclamation OVEC Ohio Valley Environmental Coalition PAD Problem Area Description QAQC Quality Assessment Quality Control SLOC Standby Letter of Credit SMA Surface Mining Application SMCRA Surface Mining Control and Reclamation Act of 1977 SRF Special Reclamation Fund SRWTF Special Reclamation Water Trust Fund SWROA Storm Water Runoff Analysis TDN Ten-Day Notice TIPS Technical Innovation and Professional Services USACE United States Army Corps of Engineers USGS United States Geological Survey WVDEP West Virginia Department of Environmental Protection WVHC West Virginia Highlands Conservancy WVSCMRA West Virginia Surface Coal Mining and Reclamation Act Page 7 Annual Evaluation Report – West Virginia 2017 II. Overview of the Coal Mining Industry in the State of West Virginia Coal has been mined in West Virginia using underground methods since the early 1700's. Underground mining increased throughout the 1800's and into the 1950's. Surface mining began around 1916, but significant production from surface mining did not occur until World War II. Mining activities occurring before passage of the Surface Mining Control and Reclamation Act (SMCRA) in 1977 resulted in many unreclaimed or under reclaimed areas within the State, given that some reclamation standards were less stringent than SMCRA. Currently, there are 4,565 problem sites listed in the Abandoned Mine Land Inventory System (AMLIS) for West Virginia. Seven percent of them are funded, 51 percent are unfunded, and 42 percent have been completed through the State’s Abandoned Mine Land Reclamation (AMLR) Program. AMLR has estimated that it will cost approximately $1.6 billion to reclaim the 2,343 unfunded problem sites within the State. West Virginia’s demonstrated coal reserve base totals 30.7 billion tons, and its estimated recoverable reserves total 16.7 billion tons. The State’s estimated recoverable coal reserves at producing mines totaled 1.7 billion tons in 2015. West Virginia ranks fourth in the country in demonstrated coal reserves and third in recoverable coal reserves at producing mines. Coal occurs in all but two of the State’s 55 counties. Mineable seams occur in 43 of the 55 counties. Of the 117 identified coal seams in the State, 65 seams are mineable using current technology. West Virginia’s coal production accounts for about 10.7 percent of the Nation’s total coal production. In 2015, West Virginia produced 102.9 million tons of coal, allowing it to retain its ranking as the second largest coal producing State in the Nation (see Table 1, Appendix A for coal production based on sales). Coal was produced from 38 different seams in 2015. The Pittsburgh, Stockton-Lewiston, Lower Kittanning, Pocahontas 3, Coalburg, Clarion, Eagle, Peerless, Alma, Powellton, and Upper Freeport coal seams accounted for about 85 percent of the State’s total coal production. During 2015, coal was produced in 25 counties in West Virginia. The top ten coal producing counties in 2015 by production were: Marshall, Marion, Ohio, Kanawha, Logan, Boone, Raleigh, Mingo, Monongalia, and Wyoming Counties. These counties generated 83 percent of the State’s total coal production. Most coal production in the State has shifted from the southern coal field to the northern coal field in recent years. In 2015, Taylor County had the highest increase in coal production with almost 0.7 million tons, and Boone County had the largest decrease in coal production with 4.5 million tons. The State’s producing mines had an average coal recovery rate of 65.8 percent, or a rate that was 1.6 percent higher than the previous year. The average market price per ton of coal mined in West Virginia during 2015 decreased by about 8 percent to $60.31. The largest price decrease occurred in underground mined coal. The average market price per ton of coal nationwide also decreased to $31.83 in 2015. West Virginia continues to lead the Nation in underground coal production. Twenty five percent of the Nation’s underground coal production comes from West Virginia. Underground mines produce approximately 82 percent of the State’s total coal production. In 2016, there were 37 longwall mines operating in the country. Longwall mining activities occurred in eleven States. With twelve longwall mines operating in the State, West Virginia had more longwall mining Page 8 Annual Evaluation Report – West Virginia 2017 operations than any other State in 2016. With 32 percent of the Nation’s longwall mining operations, longwall mining in the State accounted for about 29 percent of the Nation’s longwall coal production in 2016. Longwall mining operations accounted for 51 percent of the State’s underground coal production and 50 percent of the State’s total coal production in 2015. Surprisingly, State longwall coal production decreased by 4.8 percent in 2015, and production by continuous miners increased by 15.6 percent. Longwall mining remains the predominate method of underground coal production in West Virginia and the Nation. Contour, area, auger, mountaintop, and highwall mining operations are the most common methods of surface mining within the State. Eighteen percent of the coal produced in West Virginia is by surface mining methods. Five percent of the Nation’s surface mined coal comes from West Virginia. During 2015, surface coal production within the State declined by about 39 percent, and underground coal production declined by approximately 9 percent. Total coal production is down 17 percent from 2014. The mountaintop mining method continues to produce the most surface mined coal within the State. However, coal production by this method of mining declined by about 45 percent. In addition, surface coal production by the traditional contour mining method decreased by 44 percent in 2015. Excluding coal exploration operations, West Virginia has 2,038 inspectable units that include 1,103 active mines, 651 inactive mines, and 273 bond forfeiture sites. The average number of acres per inspectable unit is 169 acres. Surface mines average 329 acres per unit, whereas underground mines average 45 acres per unit for the surface disturbance area. The area above the underground works is not bonded. The number of new permits issued annually by the State has continued to decline. Approximately 55 percent of the State’s permits are active and require monthly inspections by the West Virginia Department of Environmental Protection (WVDEP). Underground mines account for about 35 percent of the total inspectable units and surface mines account for 39 percent. The remaining 26 percent consists of other facilities, such as preparation plants, coal refuse piles, loading facilities, and haulroads. Approximately 67 percent of the coal produced in West Virginia is used domestically, with about 33 percent of that coal being consumed within the State. Most coal produced in West Virginia is used to generate electricity. Seventy-nine percent of the State’s domestic coal production is used by electric utilities in 21 states, including West Virginia. Pennsylvania, North Carolina, Ohio, Virginia, South Carolina, Kentucky, Maryland, and Indiana are the largest consumers of West Virginia coal for electrical production. Coal produces 94 percent of the electricity generated at the 10 power plants located within the State. Less than 50 percent of the electricity produced in West Virginia is consumed by its residents, thus making West Virginia a leader in the Nation in net interstate sales of electricity. West Virginia’s electric power industry produces approximately 3.3 percent of the Nation’s carbon dioxide emissions. Approximately 17 percent of the State’s domestic coal production is used by coke plants and the remaining 4 percent is for industrial, commercial and institutional use. Pennsylvania, Ohio, North Carolina, Indiana, Virginia, Kentucky, Michigan, and South Carolina import 60 percent of West Virginia’s domestic coal production. Florida reduced consumption of West Virginia coal by 69 percent, whereas South Carolina increased consumption by 36 percent. Most of this coal was used for electrical production. Almost fifty percent of the State’s coal production was transported by water, 39 percent was transported by railroad, and the remaining 11 percent by truck, conveyor, Page 9 Annual Evaluation Report – West Virginia 2017 or was stockpiled. Historically, the railroad has been the primary means of transporting West Virginia coal. In 2015, the price of coal produced within the State averaged about $60 per ton. The price of underground mined coal averaged $61 per ton in 2015, and the price of surface mined coal averaged about $57 per ton during the same period. The average price of West Virginia coal in 2015 decreased by about 8 percent over that paid in 2014. Coal in Wyoming during the same period averaged $14 per ton. Nationwide, the price of underground mined coal averaged about $52 per ton and surface mined coal averaged about $21 per ton, with an average price for both at about $32 per ton. West Virginia exports approximately 33 percent of the coal it produces. West Virginia is the Nation’s leading coal exporter with about 32 percent of the country’s foreign coal exports. In 2016, Canada, China, Belgium, Brazil, Netherlands, South Korea, Japan, and India were the leading importers of West Virginia products based on value. Coal constitutes 25 percent of the total value, and coal sales declined 27 percent during that period. Metallurgical coal has historically comprised about 85 percent of West Virginia’s coal exports to foreign countries, and steam coal makes up the rest. Historically, about half of the Nation’s metallurgical coal exports come from West Virginia. Seventy percent of the Nation’s coal exports in 2016 consisted of metallurgical coal and the rest was steam coal. In 2016, the Nation’s foreign coal exports decreased by about 19 percent. The Netherlands, Brazil, India, Canada, Japan, Korea, Germany and Mexico were the largest importers of coal from the United States in 2016. They accounted for about 72 percent of our Nation’s coal exports. Coal exports averaged about $74 per short ton in 2016. Steam coal exports averaged $50 per short ton and metallurgical coal exports averaged $83 per short ton in 2016. U.S. coal imports declined 13 percent in 2016. Ninety-seven percent of the coal imports into the U.S. came from Colombia, Canada, and Indonesia, and cost an average of $66 per short ton. Approximately 290 companies produce coal in West Virginia. Due to increased mechanization and consolidation in the mining industry, more than 13,000 mining jobs have been lost in the State since 1990. Most of the decline in employment in the past has been at underground mines. In 2015, coal employment in the State declined by 14 percent due to declines in employment at both surface and underground mines. West Virginia lost 2,475 mining jobs in 2015. The counties that lost the most mining jobs were Boone, Monongalia, Logan, McDowell, Marshall and Raleigh Counties. Taylor and Braxton Counties had the largest increase in mining jobs in 2015. Coal mining jobs at surface mines declined by 27 percent, and underground mining jobs declined by 15 percent in 2015. During 2015, the State’s coal mining industry directly employed 15,194 people with a payroll of more than $1.4 billion. Total employment, including independent contractors, was about 45,500 employees with a payroll of about $3 billion in 2015. Eighty percent of the miners within the State work in underground mines. Coal mining operations in Kanawha, Marshall, Boone, Raleigh, Logan, Marion, Wyoming, and Monongalia Counties employ 69 percent of the miners in the State. Mountaintop mining operations employ 35 percent of the miners who work at the State’s surface mines. Surface mines employ 20 percent of the miners in the State. Union representation in the State continued to decline in 2015 Page 10 Annual Evaluation Report – West Virginia 2017 after increasing slightly in 2010 after a period of long decline. Union miners produce approximately 40 percent of the coal produced in West Virginia. Unions represent 29 percent of the miners in the State, and the remaining miners are non-union. In 2015, 33 percent of the State’s underground miners and 11 percent of the State’s surface miners belonged to unions. West Virginia’s union miners comprise 31 percent of the Nation’s union miners. West Virginia’s miners produced an average of 2.7 tons of coal per miner per hour in 2015, which was up 3.2 percent from 2014. Estimates are that the State’s coal industry generates approximately 80,000 additional coal-related jobs. West Virginia’s Gross State Product, a measure of the total value of all goods and services produced in the State, totaled $73 billion in 2016. Coal mining accounts for nearly 15 percent of the State’s Gross State Product. Coal, the State’s leading export, was valued at $1.3 billion in 2016. The average coal miner earned about $55,000 in 2016. The State’s severance tax rate is 5 percent of the gross value of coal production. Of that amount, the State retains 93 percent. The remaining 7 percent is apportioned among the State's counties and municipalities. Seventy-five percent of that 7 percent is distributed to coal-producing counties. The remaining twenty-five percent is distributed to all counties and municipalities of the State, based on their population, without regard to coal having been produced therein. Effective July 1, 2016, five percent of the tax attributable to the severance of coal was distributed for the use and benefit of the coalproducing counties. West Virginia collected more than $425 million in severance taxes in 2016. West Virginia’s coal industry annually pays approximately 64 percent of the severance taxes to the State and local governments, whereas the natural gas and oil industry pays about 32 percent. The coal industry accounts for nearly 27 percent of the State’s business tax and approximately 10 percent of the statewide property tax collections. Overall, it is estimated that every $1 billion worth of coal production generates $3.5 billion throughout the State’s economy. ________________ Data Sources: West Virginia Office of Miners’ Health, Safety and Training; West Virginia Department of Environmental Protection; West Virginia State Tax Department; West Virginia Department of Revenue; U.S. Bureau of Economic Analysis; U.S. Bureau of Labor Statistics; U.S. Census Bureau, U.S. Department of Commerce; U.S. Department of Energy, Energy Information Administration; National Institute for Occupational Safety and Health; States In Profile, Indiana Business Research Center at Indiana University; West Virginia University, Bureau of Business and Economic Research; West Virginia Coal Association; and Office of Surface Mining Reclamation and Enforcement, U.S. Department of the Interior. Page 11 Annual Evaluation Report – West Virginia 2017 III. Overview of the Public Participation Opportunities in the Oversight Process During the evaluation year, the CHFO took the following steps to facilitate public participation in the SMCRA program:  Sent letters and e-mails to citizens and groups advising the annual report was available and offering to meet with groups at any time, even after business hours, to discuss SMCRA issues;  Requested public participation in the State program amendment process through Federal Register announcements and Federal and State agency notification letters;  Posted AML NEPA decision for Reclamation Projects, Annual Reports, work plans, and the complete text of detailed oversight reports on the CHFO website as these documents were completed. The CHFO web site includes a “State” specific page that contains relevant information about the oversight of West Virginia’s Program. The site is accessible on OSMRE’s home page at: http://www.arcc.osmre.gov/about/states/wv.shtm.  Participated and presented at several conferences open to the public and other symposia;  Conducted telephone calls with individuals from special interest groups to discuss oversight topics and other issues of concern.  Participated in numerous meetings with non-profit organizations working on watershed restoration projects;  Responded to Congressional inquiries and or Freedom of Information Act requests;  Routinely participated in discussions with the Special Reclamation Fund Advisory Council that represents multiple interests;  Routinely interacted with the State’s Permitting Quality Assurance Quality Control Panel that represents multiple interests; and  Routinely interacted with citizens who call or write seeking information about abandoned mine lands or surface coal mining and reclamation activities or requirements. To measure the State’s success in meeting the environmental protection goals and health and safety provisions of SMCRA, OSMRE and the WVDEP have cooperatively developed Regulatory and AML Performance Agreements for that purpose. The Agreements focus on measuring the on-the-ground success of the approved program and identifying the need for financial, technical, and other program assistance during the evaluation year. The Agreements contain the basic framework for oversight activities for a two-year period. The current Agreements cover the period starting July 1, 2015, and ending on June 30, 2017, and are available to the public at the web address provided above. A new Agreement has been Page 12 Annual Evaluation Report – West Virginia 2017 developed during this review period for EY 18 and EY 19. When developing a new Performance Agreement, OSMRE solicits input from the public and other State and Federal agencies to identify program areas to review. West Virginia’s approved Regulatory and AML Programs provide additional opportunities for public participation.  The WVDEP AML Program provides an opportunity at least once/year to receive public comments on projects selected for reclamation during the upcoming years.  Filing written citizen complaints concerning specific issues (both for the Regulatory and AML programs) also gives citizens the opportunity to participate in the inspection and enforcement process at particular mine sites or to have mining conditions evaluated to determine eligibility for reclamation through the AML program.  Through its rulemaking process, the WVDEP routinely notifies and solicits comments from the public on all proposed revisions to its rules (either AML or Regulatory).  In the permitting process under the Regulatory Program, the State requires the applicant to advertise each application for a new or revised permit and must provide interested citizens the opportunity to comment. Citizens may request that the WVDEP hold an informal conference to discuss a permit application before making a decision to issue or deny the permit. A similar process also applies to completed surface mining and reclamation operations at the time of bond release. They may also seek administrative review of WVDEP decisions by the West Virginia Surface Mine Board and judicial review through the State and Federal court systems. IV. A. Major Accomplishments and Innovations State Accomplishments and Successes • WVDEP is converting all of its existing paper permit files into an electronic format managed by a program called Application Xtender. This program can scan, store, and retrieve permit file information accessible in either intranet or through web browser. It will reduce the reliance on conventional paper based systems and promote immediate benefits such as increased customer service, responsiveness and efficiency. This all translates to reduced waste and lower departmental costs. • Procedural improvements have been made to reclamation bond releases, particularly underground mining permits. • Office of Explosives & Blasting has been officially transferred to the DMR. • DMR has updated the MR-35 citizen complaint forms to include additional rights regarding inspection information. • DMR has increased training in explosives and blasting to all inspection and enforcement personnel. Developing and testing 360 Camera and associated VR Page 13 Annual Evaluation Report – West Virginia 2017 Software and systems for use in SMCRA field data collection. This work is being conducted with WVDEP and the OSMRE Mobile Computing Work Group. • Fully deployed and trained all DMR Inspectors on AvenzaMaps for field use. • Deployed all Mining Permit Maps in GeoPDF format for use in this IOS based Cell Phone Software. • Tested deployment of mining GIS data in ESRI ArcGIS Online for use in the IOS Collector App. • DMR began working with TAGIS, Office of Special Reclamation and OSMRE to develop drone-based SMCRA data collection systems and protocols. Page 14 Annual Evaluation Report – West Virginia 2017 V. Success in Achieving the Purposes of SMCRA A. Off-Site Impacts Offsite Sediment Control Structure Failure Kanawha County Page 15 Annual Evaluation Report – West Virginia 2017 Introduction: OSMRE REG 8 Directive requires the evaluation of off-site impacts found on non-forfeited and forfeited sites. This study evaluated the effectiveness of the West Virginia regulatory program in protecting the environment and public from off-site impacts resulting from surface coal mining and reclamation operations. Summary tables of off-site impacts are set forth in Table 5. Methodology: OSMRE reviewed the State inspection reports, inspector enforcement statements, and enforcement actions on the 1,866 non-forfeited sites during the review period of July 1, 2016, through June 30, 2017, for off-site impacts. The State’s Office of Special Reclamation (OSR) evaluated all 273 of the forfeited sites for off-site impacts. A.1. Bonded Sites OSMRE conducted an evaluation of all West Virginia inspectable units to determine the effectiveness of the State program in protecting the environment and the public from off-site impacts resulting from surface coal mining and reclamation operations. The evaluation revealed that 93 percent of the State’s 1,866 permitted sites were off-site impact free and 84 percent of the State’s 273 bond forfeiture sites were off-site impact free. The total number of sites free of offsite impacts for EY 2017 is 93 percent, compared with last year’s 92 percent. OSMRE used the State’s penalty assessment in determining that the most frequent cause of off-site impacts is based on operator negligence. During this evaluation period, the State conducted 18,899 inspections and issued 739 enforcement actions. Of these enforcement actions, 224 off-site impacts were found on 136 permits. In comparison to last year’s 198 impacts on 135 permits, the number of off-site impacts and the number of permits has slightly increased. The off-site impacts were categorized as 56 percent minor, 42 percent moderate and 2 percent major. The figures representing resources affected, degree of impact, and type of impact can be found on Table 5. Hydrology, representing 69 percent of the type of impact affected this year, still remains the most common type of impact by the mining operations. This category has decreased from last year’s 75 percent. A.2. Forfeited Sites The State’s OSR conducted an off-site impact evaluation of the forfeited sites. During this period of review, no permits were forfeited. The State completed land reclamation on 8 bond forfeiture sites during the review period. The OSR maintains the inventory of the State’s forfeited sites, now stands at 273. The number of off-site impacts associated with those sites totaled 44 during the review period. Of the 44 sites, 34 off-site impacts are related to water quality, 10 to land - (5 to Land Stability, 2 to Encroachment, and 3 to Other.) The State’s un-reclaimed bond forfeiture sites were 84 percent free of offsite impacts during EY 2017. Page 16 Annual Evaluation Report – West Virginia 2017 B. Reclamation Success Figure 1 Hayland / Pasture Monongalia County Introduction: The success of the State program in ensuring reclamation success is based on the number of acres that meet State bond release standards, including postmining land use, and have had their performance bond released by the WVDEP. State reclamation bonds are released in three phases. Phase I bond release indicates that the land contour has been returned to its approximate original contour or an approved variance. The Phase II release verifies that the vegetative cover or other erosion control measures have adequately stabilized the surface from erosion and the soil resources are adequate to support that cover. In addition, the site is not contributing suspended solids to stream flow or runoff outside the permit area. Finally, Phase III, or final bond release, confirms that the mine site is fully reclaimed and the approved post mining land use has been achieved. Complete restoration of land and water resources affected by mining is demonstrated by this release. Methodology: OSMRE conducted 35 oversight bond release inspections on permits where the permittee had requested bond release during the evaluation year. Field conditions were compared to the reclamation plan contained in the permit. 23 inspections were on Phase III releases, 5 on Phase II releases, 3 on Phase I releases, and 4 on combined/incremental releases. WVDEP provided OSMRE with the Bond Release Application Issued report, which includes the information for completing Table 6. Findings: OSMRE oversight inspections for bond release resulted in no violations being issued, but reclamation did not meet the required standards in all cases, at the time of the inspection. 26 of the 35 release applications inspected by OSMRE were approved by the end of the evaluation Page 17 Annual Evaluation Report – West Virginia 2017 year. The remaining 9 still needed administrative corrections, minor field repairs, or completion of documentation for Post Underground Mining Assessment (PUMA). During the evaluation year, WVDEP approved 97 Phase III bond releases, of which 35 were incremental releases, totaling 7,550 acres, as reported in Table 6. There were 24 Phase I bond releases, of which 16 were incremental releases, totaling 2,214 acres, and 27 Phase II bond releases, of which 18 were incremental bond releases, totaling 3,797 acres. OSR completed land reclamation on 8 bond forfeiture sites. In addition to the sites where land and water reclamation was completed during the evaluation year, the OSR issued a reclamation contract on 8 projects for land reclamation. The OSR continues to maintain an inventory of the State’s bond forfeiture sites, and oversees the reclamation of these sites. C. Customer Service – Blasting Claims and Arbitration Process During this evaluation year, OSMRE examined the State’s blasting claims and arbitration process, which entailed the review of 150 blasting damage complaints that WVDEP received between January 2009 and February 2017, in addition to reviewing related records for contracts, violations, State policies and interviewing State employees. OSMRE’s review of the 150 damage complaints over the eight year period found only 7 instances where the State inspector failed to document the required determination about the merit of the blasting damage claim as the first stage of the process. These determinations occurred after the State made policy changes and submitted some blasting revisions. However, even in those instances, the claim went to the claims administrator for the final review. During the evaluation period, there was only one claim that was eventually found by the claims adjuster to have merit for actually causing blasting damage. In addition, there were six other cases where the blasting damage complainants went through the State sponsored arbitration process after the WVDEP inspector and the claims adjuster determined the claims had no merit, but neither WVDEP, nor OSMRE, could review those records since the records are considered to be confidential during the arbitration process. Overall, OSMRE found the State’s claims and arbitration process was effective and responsive to citizen complaints alleging blasting related damage. WVDEP’s use of an independent claims administrator and claims adjuster and the availability of an arbitration process provide an additional layer of quality control to State employee findings concerning blasting damage. OSMRE did observe that WVDEP’s actual procedures, such as the elimination of its use of the claims administer, varied from its approved program. OSMRE intends to continue working with WVDEP to ensure that the approved program reflects the actual procedures employed in the blasting claims process. WVDEP is reviewing its process to determine if the program or procedures should be modified. Page 18 Annual Evaluation Report – West Virginia 2017 VI. General Oversight Topic Reviews A. Oversight Inspections A.1. General Oversight Inspections During EY 2017, the CHFO completed 339 oversight inspections and 6 citizen complaint referrals under West Virginia’s program. This includes, eighty-eight of the oversight inspections that were conducted in response to rain events exceeding a 1yr/24hour storm event. Also, as part of the oversight inspection process, CHFO conducted a review of West Virginia’s bond release activities, and continued our review of slurry impoundments. This report also contains a summary of citizen complaints received during this review period. The following is a breakdown of the inspections by type. Bond Release Review Sample Selection – Comprehensive Sample Selection – Partial Follow-up on State Action Other Total 31 61 235 8 4 339 There were a total of 97 violations of the State program identified. Eighty violations were deferred to State action, two were referred to the State through Ten-Day Notice, fourteen were previously cited by the State, and one was abated during or before the completion of OSMRE’s oversight. A.1.a. Bond Release This review consisted of on-the-ground inspections of bond released sites. The on-the-ground review consisted of sites which were in varying stages of release. In addition to randomly selecting sites for review, OSMRE conducts an inspection on any site for which a release is requested, if the site is listed on the acid mine drainage inventory. OSMRE conducted an on-the­ ground review of 31 sites that requested any bond release. An on-the-ground review was conducted on 21 sites which requested a Phase III release, four sites requesting Phase II release, two sites requesting Phase I bond release, and four sites with multiple phases of release. OSMRE did identify potential issues with the final evaluation of hydrologic conditions for underground mines, but each case was resolved through working with State officials. OSMRE notes improvements in WVDEP bond release procedures that were implemented during evaluation period. Therefore, the sites inspected demonstrated satisfactory reclamation and shows that West Virginia is conducting its bond release program in accordance with applicable laws, regulations and policies. The reported bond release activities can be used as indicators of reclamation success. Page 19 Annual Evaluation Report – West Virginia 2017 A.1.b. Citizen Complaints The CHFO received six citizen complaints alleging 21 violations during the evaluation year. All of the alleged violations were referred to the WVDEP via 6 TDNs. OSMRE is currently reviewing five of the TDN responses from WVDEP. OSMRE has found WVDEP took appropriate action or showed good cause for not issuing a violation for one of the TDNs. A.2. Impoundment Oversight Inspections During EY 2017, OSMRE continued the emphasis on review of slurry impoundments and refuse compaction. Seven impoundment inspections were conducted. All seven were conducted as part of OSMRE’s regular random oversight inspections. One violation was identified for failure to maintain drainage control. OSMRE deferred this violation to the WVDEP for issuance of a NOV. A.3. State Inspection Frequency Activity During EY 2017, WVDEP had 1,990 permanent program Inspectable Units (IU). These units are required to be inspected with a frequency that is set by WVDEP’s program. This requires active, inactive, and abandoned sites to be inspected with a required frequency. The data demonstrates WVDEP is conducting a sufficient number of inspections overall, but sometimes does not schedule the inspections so as to meet the requirement that each site be inspected specifically on a monthly or quarterly basis. This frequency for EY 2017’s IUs is defined in Table 10 and below. Active Inactive Abandoned Totals     Complete Inspections Required 4,124 2,744 273 7,141 Partial Inspections Required 8,248 0 0 8,248 Conducted Complete Inspections 4,204 2,677 1,039 7,920 Conducted Partial Inspections 10,035 1,296 3,255 14,586 Active sites require one complete inspection and two partial inspections quarterly. Inactive sites require one complete inspection every quarter. Abandoned sites, which have been forfeited, require one complete inspection per year once inspection frequency has been reduced. Not Started sites require one complete inspection per quarter. While the above table shows WVDEP completes more inspections than required, OSMRE also examined each permit to determine if the inspections were completed each month or quarter as required. In other words, if WVDEP did 3 inspections but 2 were within the same month during the quarter, then that site was not inspected on a “monthly” basis. This provides a slightly different picture of compliance. Total frequency inspections for complete was 1809 IU’s out of Page 20 Annual Evaluation Report – West Virginia 2017 2019(91%) IU’s; partial IUs were out of 1600(81%), and IUs that met both complete and partial frequency rates was 1467(73%). 91% of Inspectable Units received all Required Complete Inspections on time 81% of Inspectable Units received all Required Partial Inspections • 73% of Inspectable Units Received all Required Partial and Complete Inspections on time Statewide, 9 percent (712) more complete inspections were conducted than required along with 57 percent (6289) more partial inspections required by WVDEP’s program. Last year’s (EY 2016) combined inspection frequency for complete and partial inspection frequency was 85 percent. This EY’s inspection frequency of 73 percent is lower, but it still less than what the State program requires. WVDEP is conducting more inspections overall than required, but is not meeting its time frequency requirements. WVDEP also provides a report that identifies the number of inspections in a given quarter without the month by month analysis. Under that report, WVDEP is producing the required number of inspections (eg. 3 for an active site in a total 3 month period) 96.7 percent of the time OSMRE continues to encourage the State to improve its scheduling to consider a monthly rather than quarterly review of compliance. However, since WVDEP does more total inspections than required and meets its inspection frequency if you consider only the total number of inspections per quarter, OSMRE is not suggesting any formal corrective action. B. Program Amendment Status/Program Maintenance B.1. Program Amendment Status B.1.a. Statutory/Regulatory Amendments (WV-113/WV-114) By letter dated April 8, 2008, and received electronically by OSMRE on April 17, 2008, (Administrative Record Number WV-1503), the WVDEP submitted an amendment to its program under the Federal Surface Mining Control and Reclamation Act (30 U.S.C. 1201 et seq.). The amendment consisted of changes to the West Virginia Code of State Regulations (CSR) and the West Virginia Code, as contained in Committee Substitutes for Senate Bills 373 and 751. Committee Substitute for Senate Bill 373 authorized revisions to the State’s Surface Mining Reclamation Regulations at 38 CSR 2 and its Surface Mining Blasting Rule at 199 CSR 1. Page 21 Annual Evaluation Report – West Virginia 2017 Committee Substitute for Senate Bill 373 was adopted by the Legislature on March 6, 2008, and signed into law by the Governor on March 28, 2008. West Virginia Code at paragraphs 64-3-1 (o) and (p) authorized WVDEP to promulgate the revisions to its rules as legislative rules. The revisions related to a variety of topics, including new language for technical completeness of permit applications, incidental boundary revisions, permit issuance findings, inspection of impoundments, reclamation of natural drainways subsequent to sediment pond removal, storm water runoff analysis, contemporaneous reclamation standards regarding excess spoil fills and bonding of certain types of excess spoil fills, and effluent limits and bond releases on remining operations. Most blasting provisions have been removed from the Surface Mining Reclamation Regulations and will now only be found in the State’s Surface Mining Blasting Rule. In addition, the amendment contained Committee Substitute for Senate Bill 751, which was adopted by the Legislature on March 8, 2008, and approved by the Governor on March 27, 2008. Committee Substitute for Senate Bill 751 amended and reenacted Section 22-3-11 of the West Virginia Surface Coal Mining and Reclamation Act (WVSCMRA) relating to the State’s alternative bonding system, which is commonly known as the Special Reclamation Fund (SRF). In a Federal Register notice dated June 16, 2008, OSMRE approved, on an interim basis, a portion of the Committee Substitute for Senate Bill 751 (73 FR 33884-33888). Among other things, the bill reinstated and increased the special reclamation tax and created the Special Reclamation Water Trust Fund (SRWTF). OSMRE specifically approved the reinstatement of the seven cents per ton special reclamation tax, its increase to seven and four-tenths cents, and the creation of the SRWTF for the purpose of designing, constructing and maintaining water treatment systems on bond forfeiture sites in the State. OSMRE also announced a public comment period on those provisions and the other revisions set forth in Committee Substitute for Senate Bill 751. The public comment period closed on July 16, 2008. In addition, OSMRE published another notice soliciting public comments on all of the proposed revisions to the State’s Surface Mining Reclamation Regulations and its Surface Mining Blasting Rule, as provided by Committee Substitute for Senate Bill 373. The notice was published in the Federal Register on July 8, 2008 (73 FR 38941-38951). The public comment period closed on August 7, 2008. A rule setting forth OSMRE’s final decision on the State’s proposed program amendments will be published in the Federal Register. B.1.b. Alternative Bonding System Revisions (WV-115) On May 28, 2009, WVDEP submitted a proposed statutory amendment to its alternative bonding system (Administrative Record No. WV-1521). The amendment consists of Committee Substitute for Senate Bill No. 600 which amends §22-3-11(h) of the West Virginia Code concerning the State’s alternative bonding system, commonly referred to as the Special Reclamation Fund. This bill was passed by the Legislature on April 10, 2009, and signed by the Governor on May 4, 2009, with an effective date of July 1, 2009. In its letter, WVDEP acknowledged that Committee Substitute for Senate Bill No. 600 amends §22-3-11 of the Code of West Virginia to implement actuarial recommendations relating to the continued fiscal Page 22 Annual Evaluation Report – West Virginia 2017 viability of the Special Reclamation Fund. The legislation consolidates what has been known as the “7-and- 7.4 tax” (the 7.4 portion of which is currently subject to annual renewal) into a 14.4 cents tax per ton of clean coal mined, reviewable every two years by the Legislature. As proposed, the State intends to eliminate the additional seven cents per ton tax and increase and extend the special reclamation tax from seven and four-tenths to fourteen and four-tenths cents per ton of clean coal mined. In addition, instead of being reviewed annually, the special reclamation tax will be reviewed biannually by the Legislature to determine whether the tax should be continued. A notice announcing receipt of the proposed amendment and request for public comments was published in the Federal Register on July 22, 2009 (74 FR 36113-36116). The public comment period closed on August 21, 2009. In the same notice, OSMRE also approved the proposed increase and extension of the special reclamation tax on a temporary basis. This was necessary because the existing special reclamation tax was due to expire on June 30, 2009. The proposed State revisions were to take effect on July 1, 2009, and any delay in the implementation of the State’s special reclamation tax could jeopardize the financial solvency of the State’s alternative bonding system. A final decision on this amendment will be incorporated into WV-116, as discussed below, and will be published in the Federal Register. B.1.c. Statutory/Regulatory Revisions (WV-116) By letter dated May 11, 2009, WVDEP submitted an amendment to its regulatory program, which included Committee Substitute for Senate Bill 153. This bill modified the State’s Surface Mining Reclamation Regulations concerning the continued oversight of “approved” persons who prepare, sign, or certify mining permit applications and related materials. The bill also proposes to modify incidental boundary revisions (IBRs) to existing permits, clarify certain types of collateral activities, delete the bonding matrix forms, change the term “bio-oil” to biofuel, and clarify standards for hayland and pasture use (Administrative Record Number WV-1522). On May 22, 2009, the WVDEP submitted copies of Senate Bill 436. Senate Bill 436 amends West Virginia Code 22-3-8 by changing references to “the commissioner of the Bureau of Employment Programs” to “executive director of Workforce West Virginia” and “the executive director of the workers’ compensation commission” to “Insurance Commissioner” (Administrative Record Number WV-1521). On July 6, 2009, WVDEP also submitted a copy of Senate Bill 1011. Senate Bill 1011 amends West Virginia Code by requiring surface mine reclamation plans to comport with approved master land use plans and authorizing surface mine reclamation plans to contain alternative postmining land uses (Administrative Record Number WV-1523). A proposed rule announcing the receipt and a public comment period on all of the proposed State revisions was published in the Federal Register on October 21, 2009 (74 FR 53972-53979). The public comment period closed on November 20, 2009, but it was extended until December 18, 2009, at the request of a public interest group. Various Federal and State agencies were notified of the proposed revisions and submitted comments in response to them. Page 23 Annual Evaluation Report – West Virginia 2017 During EY 2012, OSMRE had to seek further clarification from WVDEP regarding its proposal to change the term bio-oil crop land to bio-fuel crop land at CSR 38-2-7.2.e., 7.3.d, and 7.8. OSMRE published a notice in Federal Register on February 7, 2011 (76 FR 6589-6590) reopening the comment period and affording the public an opportunity to comment on the State’s proposed changes. The public comment period closed on February 22, 2011. In addition, the State provided OSMRE additional clarification on November 9, 2011, regarding this matter. As mentioned above, OSMRE intends to combine WV-115 and WV-116 and publish its final decision in the Federal Register. B.1.d. Statutory/Regulatory Revisions (WV-117) On May 2, 2011, WVDEP submitted revisions to its permanent surface coal mining regulatory program (Administrative Record Number WV-1557). The amendment consists of statutory revisions to the State’s Surface Coal Mining and Reclamation Act as authorized by Enrolled Committee Substitute for House Bill No. 2955 (HB 2955) and regulatory revisions to the State’s Surface Mining Reclamation Regulations as authorized by Enrolled Committee Substitute for Senate Bill No. 121 (SB 121). HB 2955 was adopted by the West Virginia Legislature on March 18, 2011, and approved by the Governor on April 5, 2011. HB 2955 increased the filing fee for the State’s surface mining permit to $3,500, the permit renewal fee to $3,000, and established a notice of intent to prospect fee of $2,000, a significant permit revision fee of $2,000, a permit amendment fee of $550, a permit transfer fee of $1,500, a permit assignment fee of $1,500, and an inactive status approval fee of $2,000. WVDEP requested that these revisions be approved by OSMRE on an interim basis in the Federal Register and take effect immediately upon publication of the interim rule. SB 121 passed the West Virginia Legislature on March 18, 2011, and was signed by the Governor on March 30, 2011. SB 121 authorized WVDEP to promulgate several revisions to its Surface Mining Reclamation Regulations. SB 121 authorizes regulatory revisions which, among other things, provide for a minimum incremental bonding rate of $10,000 per increment at CSR 38-2-11.4.a.2. Section 22-3-11(a) of WVSCMRA currently requires mining operators to furnish a minimum bond of $10,000, regardless of acreage. Under the revised provision, an operator will have to post a minimum bond of $10,000 for each increment that is to be mined. A notice announcing receipt of the proposed amendment and request for public comments was published in the Federal Register on June 29, 2011 (76 FR 37996-38000). The public comment period closed on July 29, 2011. The notice also announced OSMRE’s decision to approve the State’s new and increased permit fees and its minimum bonding rate of $10,000 per increment on a temporary basis. Because State permit fees provide a source of revenue for the State to administer its permanent regulatory program, OSMRE found that it was in the public’s interest that the new and increased permit fees and the incremental bonding rate be implemented without further delay. The fee increase resulted in additional revenue of about $1.65 million annually for WVDEP. These funds are used to match Federal funding provided WVDEP through its Federal regulatory grant. Page 24 Annual Evaluation Report – West Virginia 2017 OSMRE intends to combine its decision on the State’s modification relating to incremental bonding with WV-118, as discussed below. The revisions increasing the State’s permit fees on a permanent basis will be combined with WV-121. As discussed below, a final rule is being prepared on those amendments, and will be published in the Federal Register. B.1.e. Regulatory Revisions (WV-118) On May 2, 2011, WVDEP submitted regulatory revisions to the State’s Surface Mining Reclamation Regulations as authorized by Enrolled Committee Substitute for Senate Bill No. 121 (SB 121) (Administrative Record Number WV-1561). In addition to the minimum incremental bonding rate of $10,000 per increment as discussed above, SB 121 authorized WVDEP to modify its Surface Mining Reclamation Regulations by codifying an emergency rule filed on December 2009 relating to the establishment of trust funds and annuities; clarifying the format and information necessary for a complete permit application submittal and for the renewal process to take into account WVDEP’s electronic filing process; providing that an approved person must be capable and maintain the capability of submitting maps, plans and all other technical data in an electronic format proscribed by the Secretary; providing that pre-subsidence surveys shall be confidential and only used for evaluating damage relating to subsidence; clarifying that bonding for a permit in inactive status shall remain in effect for the life of the operation; and providing that the Secretary shall provide e-mail notice of the issuance of a show cause order to members of the public who have subscribed to the Secretary’s e-mail notification service and otherwise provide notice to any person whose citizen complaint has resulted in the issuance of any enforcement action that led to the issuance of a show cause order. A notice announcing receipt of the proposed regulatory revisions and request for public comments was published in the Federal Register on November 2, 2011 (76 FR 67637-67640). The public comment period closed on December 2, 2011. As mentioned above, OSMRE intends to combine WV-117 regarding incremental bonding with WV-118, and publish a final rule on both amendments in the Federal Register. B.1.f. Special Reclamation Tax Revisions (WV-119) By letter dated April 27, 2012, WVDEP submitted a proposed statutory amendment to its alternative bonding system (Administrative Record No. WV-1577). The amendment consists of Enrolled Senate Bill No. 579 which amends §22-3-11(h) of the West Virginia Code concerning the State’s alternative bonding system, commonly referred to as the Special Reclamation Fund. This bill was passed by the Legislature on March 9, 2012, and signed by the Governor on March 30, 2012, with an effective date of July 1, 2012. As detailed in WVDEP’s transmittal letter, “Senate Bill 579 amends § 22-3-11 of the Code of West Virginia to implement actuarial recommendations relating to the continuing fiscal viability of the Special Reclamation Fund.” Subsection 22-3-11(h) (1) of the WVSCMRA is substantively amended by increasing the amount of the special reclamation tax to twenty-seven and nine-tenths cents per ton of clean coal mined. Page 25 Annual Evaluation Report – West Virginia 2017 The former special reclamation tax, effective as of July 1, 2009, required remittance of fourteen and four-tenths cents per ton of clean coal mined; the collection of this tax is eliminated and replaced with the aforementioned amount. Additionally, the amended language requires fifteen cents per ton of the collected twenty-seven and nine-tenths cents per ton, be deposited in the SRWTF. Historically, although not codified, WVDEP allocated three cents per ton of clean coal mined to finance the Water Trust Fund, resulting in a severely underfunded account. A notice announcing receipt of the proposed amendment and request for public comments was published in the Federal Register on July 11, 2012 (77 FR 40793-40796). The public comment period closed on August 10, 2012. In the same notice, OSMRE also approved the proposed increase and allocation of the special reclamation tax on a temporary basis. This was necessary because the proposed special reclamation tax was due to take effect on July 1, 2012, and any delay in the implementation of the State’s special reclamation tax could jeopardize the financial solvency of the State’s alternative bonding system and result in the continued underfunding of the Water Trust Fund. OSMRE is preparing a final decision on the State’s bonding requirements. OSMRE plans to combine WV-119 with WV-121, as discussed below, and publish a final rule on both of them in the Federal Register. B.1.g. State-Federal Cooperative Agreement (WV-120) In 2009, WVDEP expressed an interest in revising its State-Federal Cooperative Agreement. West Virginia had entered a cooperative agreement with OSMRE in 1983 to regulate coal mining on Federal lands within the State. However the initial agreement does not allow the State to regulate all mining activities on Federal lands, especially those involving federally leased coal. From 2009 through 2013, OSMRE, in cooperation with WVDEP, developed several draft Federal Lands Cooperative Agreements based on the State’s existing agreement and other state agreements. During EY 2013, CHFO provided WVDEP a final draft Cooperative Agreement for consideration. The revised agreement will enable WVDEP to regulate all coal exploration activities and surface coal mining reclamation operations on Federal lands involving federally leased coal. During EY 2014, WVDEP provided CHFO comments on the draft Cooperative Agreement on two occasions. As a result of those comments, CHFO either explained the provision or modified the proposed agreement and returned it to WVDEP with an explanation and a copy of the procedures for submitting it for approval. On August 4, 2014, WVDEP submitted revisions to its State-Federal Cooperative Agreement. The State is interested in regulating underground coal mining activities currently proposed on U.S. Army Corps of Engineers’ property near East Lynn Lake in Wayne County, West Virginia. OSMRE has prepared a Federal Register notice announcing receipt of the revised State-Federal Cooperative Agreement and providing opportunity for public hearing and comment on the proposed amendment. Once published, the proposed agreement will be subject to the Page 26 Annual Evaluation Report – West Virginia 2017 rulemaking provisions at 30 CFR Part 745. If it is determined that the amendment is consistent with the Federal requirements, the Secretary or her designee will sign the agreement or a revision thereto, and the Governor will sign it. A copy of the final decision, together with a copy of the executed agreement, will be published in the Federal Register. B.1.h. Award of Attorney Fees and Costs (WV-121) On September 11, 2013, WVDEP submitted revisions to its permanent surface coal mining regulatory program (Administrative Record Number WV-1584). The amendment consists of statutory revisions to West Virginia’s Surface Coal Mining and Reclamation Act, as authorized by Enrolled Senate Bill No. 497 (SB 497) relating to the award of attorney fees and costs by the State’s Surface Mine Board and circuit courts under West Virginia’s approved regulatory program. SB 497 was adopted by the West Virginia Legislature on March 10, 2012, and approved by the Governor on March 30, 2012. The purpose of SB 497 is to authorize the Surface Mine Board or the reviewing Circuit Court to award attorney fees and costs in administrative proceedings arising under the WVSCMRA. A notice announcing receipt of the proposed amendment and request for public comments was published in the Federal Register on May 20, 2014 (79 FR 28860-28862). The public comment period closed on June 19, 2014. Various Federal and State agencies were notified of the proposed revision and requested to comment on it. As discussed above, once a final decision is made on the State amendments relating to permit fee increases (WV-117), special reclamation tax increases (WV-119), and the award of costs and attorney fees (WV-121), a Federal Register notice will be published on all of these program amendments. B.1.i. Bond Forfeiture Tax Incentive and Informal Conference Procedures (WV-122) On August 14, 2013, WVDEP submitted revisions to its permanent surface coal mining regulatory program (Administrative Record Number WV-1587). The amendments consist of Enrolled Senate Bill 462 and Enrolled Committee Substitute for House Bill 2352. WVDEP requested that this amendment be given priority over other amendments pending before OSMRE. Senate Bill 462 was adopted by the West Virginia Legislature on April 11, 2013, and approved by the Governor on April 29, 2013. Senate Bill 462 amends West Virginia Code §§22-3-20 and 21 to conform the State’s requirements for informal conferences and decisions on surface mining permit applications with parallel provisions of Federal law. Committee Substitute for House Bill 2352 was adopted by the West Virginia Legislature on April 13, 2013, and approved by the Governor on April 29, 2013. Committee Substitute for House Bill 2352 amends West Virginia Code §22-3-11 to provide tax incentives for mine operators who reclaim bond forfeiture sites within the State. Page 27 Annual Evaluation Report – West Virginia 2017 A notice announcing receipt of the proposed revisions and request for public comments was published in the Federal Register on May 20, 2014 (79 FR 28858-28860). The public comment period closed on June 19, 2014. Various Federal and State agencies were provided an opportunity to comment on the proposed changes. On August 7, 2014, WVDEP submitted a Special Reclamation Tax Credit Rule to implement the special reclamation tax incentive provisions for mine operators who reclaim bond forfeiture sites. On November 13, 2014, OSMRE published a Federal Register notice that reopened the comment period on the Special Reclamation Tax Credit Rule, which was adopted by the State Tax Department on June 6, 2014 (79 FR 67396-67398). The comment period closed on November 24, 2014. Once rendered, a final decision on the proposed amendment will be published in the Federal Register announcing OSMRE’s decision. B.1.j. Office of Explosives and Blasting, Blasting Rule, Hydrologic Protection and Storm water Runoff Analysis (WV-123) On April 4, 2016, WVDEP notified OSMRE of the adoption of House Bill 4726 (HB 4726), which passed the Legislature on March 11, 2016, and was approved by the Governor on April 1, 2016, with an effective date of June 9, 2016. HB 4726 terminated the Office of Explosives and Blasting (OEB) with the passage of Section 22-3-34 of the West Virginia Code and transferred the duties and responsibilities relating to blasting to the Division of Mining and Reclamation (DMR). HB4726 also provides that DMR would continue to enforce OEB’s Blasting Rule at Code of State Regulations (CSR) 199-1 until DMR could promulgate its own blasting rules for legislative approval. Furthermore, HB 4726, at Section 22-3-13(g) of the West Virginia Code, authorizes WVDEP to revise its rules regarding hydrologic protection and storm water runoff analyses for mining operations and to promulgate rules that conform with Federal requirements to minimize disturbances to the prevailing hydrologic balance at a mine site and in associated off-site areas. The bill also provides that a cumulative hydrologic impact assessment may be conducted by WVDEP, and requires a statement of probable hydrologic consequences and to prevent flooding by an operator. WVDEP is to conform these rules to the Federal regulations at 30 CFR 816.41 and 816.45 through 816.47 when proposing the State rule, and it cannot propose rules that are more stringent than the Federal requirements. These rules are to be promulgated for review and consideration by the West Virginia Legislature during the 2017 regular legislative session. OSMRE was in the process of preparing a proposed rule announcing receipt of the proposed State program amendment when WVDEP requested that OMSRE temporarily delay action on WV-123. WVDEP advised OSMRE that it plans to make additional revisions to its blasting statute beyond those in WV-123. In addition, revisions to its proposed blasting rules have been delayed. As mentioned above, WVDEP was authorized by the Legislature to implement OEB’s Blasting Rule until it could promulgate its own blasting rules for legislative approval. In the Page 28 Annual Evaluation Report – West Virginia 2017 past, OSMRE has encouraged WVDEP to submit both its statutory and regulatory revisions together to ensure an accurate and complete review of all program requirements. B.1.k. Inactive Status, Bonding, Topsoil, and Contemporaneous Reclamation (WV-124) By letter dated June 14, 2016, and received by OSMRE on June 21, 2016, WVDEP submitted an amendment to its permanent regulatory program under SMCRA (Administrative Record No. WV-1606). The proposed amendment consists of regulatory revisions to West Virginia’s Surface Mining Reclamation Regulations. As mentioned previously, Senate Bill No. 357 (SB 357) was adopted by the West Virginia Legislature on March 3, 2015, and was approved by the Governor on March 12, 2015. On March 25, 2015, WVDEP notified OSMRE of the passage of SB 357 (Administrative Record No. WV-1604). SB 357 authorized WVDEP to promulgate several revisions to its Surface Mining Reclamation Regulations. SB 357 amended West Virginia Code Sections 22-3-13 and 19 and authorized WVDEP to promulgate revisions to its contemporaneous reclamation and inactive status regulations. On July 10, 2015, OSMRE notified WVDEP that the statutory revisions regarding contemporaneous reclamation and inactive status, also known as temporary cessation did not have to be submitted, because they only authorized WVDEP to promulgate revision to its regulatory requirements (Administrative Record No. WV-1605). However, WVDEP was advised that any revisions to its inactive status or contemporaneous reclamation regulations would have to be submitted to OSMRE as a program amendment. Committee Substitute for House Bill 117 (HB 117) was passed by the West Virginia Legislature on June 2, 2016, and took effect upon passage. According to State officials, HB 117 provides that the legislative rule filed by WVDEP in the State Register on July 27, 2015, that includes revisions regarding contemporaneous reclamation, inactive status and topsoil were authorized by the West Virginia Legislature. In addition, amendments regarding bonding requirements for permit renewals and incremental bonding for permit renewals were authorized by the Legislature. In accordance with HB 117, WVDEP filed revised regulations with the Secretary of State that had an effective date of July 1, 2016. OSMRE is finalizing a Federal Register notice that announces the receipt of WVDEP’s proposed revisions to its bonding, inactive status, topsoil and contemporaneous reclamation requirements. The proposed rule will also provide for a public comment period and opportunity for hearing on the State’s proposed regulatory revisions. Page 29 Annual Evaluation Report – West Virginia 2017 B.1.l. Pre-Blast Surveys, Bond Release and Other Bonding Requirements, and Payments from the Special Reclamation Water Trust Fund (WV-125) On May 3, 2017, WVDEP submitted Enrolled Senate Bill 687 to OSMRE for approval. The proposed amendment consists of statutory revisions relating to pre-blast survey requirements, bond release and bonding requirements, and Special Reclamation Water Trust Fund payments (Administrative Record Number WV-1608). Senate Bill 687 was adopted by the West Virginia Legislature on April 8, 2017, and approved by the Governor on April 9, 2017. These provisions took effect from the date of passage on April 8, 2017. Enrolled Senate Bill 687 amends West Virginia Code §§22-3-11(g) (1) and (2), 22-3-13a (a) and (b), 22-3-13a (f) and (h), and 22-3-23 (c) and (i) providing that moneys be paid from the Special Reclamation Water Trust Fund to assure a reliable source of capital and operating expenses for the treatment of discharges from bond forfeited sites; modifying notification requirements for pre-blast surveys for surface mining operations and certain other blasting activities; and removing minimum bond requirements related to certain reclamation work. OSMRE is in the process of preparing a proposed rule that announces the receipt of the proposed State program amendments and provides for a public comment period and opportunity for hearing on the proposed amendments. B.2. Program Maintenance B.2.a. Required Program Amendments West Virginia has no outstanding required program amendments. With the approval of an amendment on March 2, 2006, the State resolved all of the outstanding required amendments on its permanent regulatory program (FR 10764-10790). B.2.b. 30 CFR Part 732 Notifications As reported earlier, the State also resolved all program issues resulting from the issuance of 30 CFR Part 732 notifications by OSMRE. The Part 732 notifications were issued to the State as a result of changes in Federal law or regulations. As previously reported, OSMRE agreed in 2003 that, given ongoing litigation, the State did not have to take any action with regard to the Part 732 notifications concerning ownership and control, subsidence, and valid existing rights. A formal announcement of that decision was published in the Federal Register on April 29, 2004 (69 FR 23474). On December 3, 2007, OSMRE published final ownership and control regulations in the Federal Register on December 3, 2007 (72 FR 68000-68031). In July 2008, the National Mining Association filed a writ of certiorari with the U.S. Supreme Court questioning a January 2008 Page 30 Annual Evaluation Report – West Virginia 2017 U.S. Court of Appeals decision which found that OSMRE’s definition of valid existing rights does not violate the Constitution’s takings and due process clauses. In December 2008, the U.S. Supreme Court declined to hear that appeal. All litigation concerning the Federal requirements mentioned above have now been resolved. OSMRE is to notify the State when it will have to revise its program in response to the Federal regulations that were in litigation. OSMRE has not formally notified WVDEP, pursuant to 30 CFR Part 732, of which State program requirements will need to be revised in order to be consistent with the Federal changes noted above. C. Notices of Intent to Sue (NOIs) Filed Against OSMRE C.1. Notice of Intent to Sue (NOI) Regarding the State’s Failure to Properly Administer its Approved Program On March 17, 2015, seven environmental groups, including Coal River Mountain Watch, Ohio River Valley Environmental Coalition, Inc., West Virginia Highlands Conservancy, Inc., West Virginia Rivers Coalition, Sierra Club, National Wildlife Federation, and Center for Biological Diversity, filed a NOI against OSMRE pursuant to section 520 of SMCRA and 30 CFR 700.13 for its failure to perform certain non-discretionary acts and duties with regard to West Virginia’s implementation of its approved permanent regulatory program. According to the NOI, the WVDEP has failed to properly implement, enforce and maintain its approved State program, and OSMRE has failed to promulgate a Federal regulatory program for the State pursuant to section 504(a)(3) of SMCRA or to order Federal enforcement of the State program in a manner prescribed by section 521(b) of SMCRA. The environmental groups allege that WVDEP has failed to: 1) conduct at least one complete inspection of each active and inactive surface coal mining operation per calendar quarter; 2) file an inspection report that is adequate to enforce the requirements of the approved West Virginia program and demonstrates WVDEP’s onsite review of the permittee’s compliance with all the provisions of the West Virginia program and the terms and conditions of the applicable permit; 3) determine and report compliance with each permittee’s duty to ensure that discharges of water from disturbed areas comply with all applicable State and Federal water quality laws and regulations; 4) determine and report each permittee’s compliance with NPDES effluent limitations; 5) determine and report each permittee’s compliance with the duty to prevent material damage to the hydrologic balance outside the permit area; 6) determine and report compliance with applicable backfilling and regrading requirements; 7) determine and report compliance with applicable explosive and blasting requirements; 8) withhold approval of new and revised permit applications until an assessment has been made of the probable cumulative impacts of all anticipated mining in the area on the hydrologic balance in the cumulative impact area; and 9) designate “cumulative impact areas” in accordance with the State’s regulatory definition. Page 31 Annual Evaluation Report – West Virginia 2017 In 2015, OSMRE officials met with representatives of the citizen groups and their attorneys to discuss the allegations. OSMRE is considering its response. C.2. Notice of Intent to Sue (NOI), 30 CFR Part 733 Evaluation Request, and 30 CFR Part 732 Request Regarding the State’s Bonding Program On February 24, 2016, the West Virginia Highlands Conservancy, Ohio Valley Environmental Coalition, and the Sierra Club (WVHC et al.) notified Secretary Jewell and Director Pizarchik that they intend to sue DOI and OSMRE pursuant to §520(a) (2) of the SMCRA for failing to enforce violations of non-discretionary duties under 30 CFR Part 732 concerning West Virginia’s alternative bonding system. In addition, the WVHC et al. requested that OSMRE conduct an evaluation of the State’s bonding program pursuant to 30 CFR 733.12(a) (2). WVHC et al. state that SMCRA provides that an alternative bonding system must assure that the regulatory authority will have available sufficient money to complete the reclamation plan for any areas which may be in default at any time. The NOI then lists several “facts” which WVHC et al. contend demonstrate the State program has been changed sufficiently to cause OSMRE to require a program amendment under OSMRE’s non-discretionary duties established under 30 CFR Part 732 and/or initiate a program evaluation under 30 CFR Part 733. OSMRE is considering its response. D. 30 CFR Part 733 Allegation Validation D.1. Original Petition and Findings On June 24, 2013, eighteen (18) environmental, civic and religious groups filed a petition with OSMRE demanding that the Federal Government takeover regulation of surface coal mining and reclamation activities in West Virginia because of alleged chronic failures by WVDEP to properly administer its approved regulatory program in 19 specific areas. The petition was filed in accordance with the Federal regulations at 30 CFR Part 733. On December 30, 2013, OSMRE found 14 of the allegations did not rise to the level of reason to believe there were program failures, but OSMRE agreed to continue the validation process on five program areas. The five program areas where OSMRE agreed required further evaluation, pursuant to 30 CFR 733.12(a)(2), resulted in the development of four work plans that included the evaluation of the State’s storm water runoff analysis (SWROA) procedures; its topsoil protection, removal and redistribution procedures, including topsoil substitutes; its operational and permit changes to correct water quality issues as identified by exceedances of National Pollutant Discharge Elimination System (NPDES) effluent limitations, including selenium discharges; and its cumulative hydrologic impact assessment (CHIA) procedures, with an emphasis on the cumulative impact area and the identification and prevention of selenium discharges. It was agreed that selenium would be evaluated by both the NPDES and CHIA teams. OSMRE conducted the review process from January 2014 to late 2016. A report was prepared on each of the four topics. Page 32 Annual Evaluation Report – West Virginia 2017 In early November 2016, OSMRE and WVDEP officials participated in a meeting to discuss the findings and to discuss possible actions that the State was willing to undertake to resolve any identified issues and to enhance its overall program. WVDEP officials agreed to provide OSMRE a formal response to the findings and propose remedial measures that would satisfy any outstanding issues. WVDEP’s written response was submitted to OSMRE on December 29, 2016. While all the 30 CFR Part 733 evaluations identified some issues with West Virginia’s implementation of its approved regulatory program, none of the issues identified as a result of the evaluations rose to the level of program failures. In addition, when considering the nature of the actions WVDEP had already taken or had promised to take in the future, OSMRE concluded that the issues identified as a result of the 30 CFR Part 733 evaluations did not represent program failures that would justify further steps toward OSMRE withdrawing approval of part or all of West Virginia’s approved regulatory program. In January 2017, OSMRE notified the Petitioners of its decision. While the 30 CFR 733.12(a)(2) evaluations did identify some issues in each of the five program areas, OSMRE found that those issues did not rise to the level of systemic program failures, particularly in light of ongoing State improvement activities. By agreeing to implement remedial measures within specified timeframes that will require further oversight by OSMRE, WVDEP had demonstrated a willingness, capability and intent to continue the administration of its approved permanent regulatory program. OSMRE, therefore, considers the allegation validation process to be complete, and it did not recommend that the Director take further action pursuant to 30 CFR 733.12(b). OSMRE’s formal decision regarding this 30 CFR Part 733 evaluation may be found at odocs.osmre.gov in the 2017 evaluation documents for West Virginia. Because the actions planned by WVDEP required further details and schedules, OSMRE committed to oversee and provide technical assistance to WVDEP in developing and implementing those plans, and as a commitment to the citizens who filed the original petition. For further information regarding the status of WVDEP’s plans and schedules to make further improvements in its regulatory program, please refer to Subsections VI.D.2.a through 2.d below. D.2. Follow-Up State Improvement Commitments D.2.a. CHIA In response to OSMRE’s Part 733 CHIA evaluation, the WVDEP has proposed changes to their CHIA process. There are eight (8) elements that the WVDEP have proposed that will enhance their permit CHIA process: 1. Updating the existing draft CHIA policy/guidance document with assistance from the QA/QC panel and current DMR permit review CHIA writers. When this task is completed it will be used by the CHIA writers to ensure consistency in the regional Page 33 Annual Evaluation Report – West Virginia 2017 2. 3. 4. 5. 6. 7. 8. offices. This task would result in a permit review checklist, and enhanced (Probable Hydrologic Consequences) PHC determinations and CHIA narratives; Delineation of Cumulative Impact Areas (CIA) for surface and groundwater. This task will involve training of DMR staff to ensure all potential impacts from all mining operations on surface and groundwater in the permit CIA are addressed; 2.) All Anticipated Mining operations are identified and incorporated in the CIA, and discussed in the CHIA narratives; Review the development of material handling plans for acid/toxic overburden material for proper placement of these materials, and topsoil substitutes. This task involves training of DMR staff to ensure that identification of acid/toxic strata in the overburden and validating the applicant’s permit special handling plan that may contain problematic overburden. This task would involve the utilization of acid-base accounting and other analytical tests to determine the adequacy of material handling plans for overburden placement, and nutrient analyses that can characterize the permit’s topsoil so that suitable substitutes can be utilized; Trend analysis for monitored CIA watersheds, utilizing TMDL reports, and recognizing stream use designations. This task would involve training DMR staff in accessing and using the WVDEP Trend Station data that has been gathered for the past decade. The TMDL data and reports would be incorporated into permit reviewers CHIA’s to reflect all available data sources; Perform trends and update analysis on CHIAs every year. This task would involve the selections of six (6) active permits that are selected at renewal or midterm review. The conclusions of the CHIA, the PHC and the HRP (Hydrologic Reclamation Plan) for the selected permits will be assessed by senior reviewers to determine if the predicted results are being attained; Perform quality control assessments on completed CHIAs. This task will involve the review of newly drafted CHIAs for SMAs (surface mine applications) and Amendments by senior reviewers using the proposed, developed CHIA policy to ensure consistency in writing CHIA narratives; Assessments that overburden testing for selenium in applicant’s permits is occurring, and that special handling plans are adequate to isolate the problematic overburden strata occurring in certain permits This would involve task training for WVDEP geologists to review the proper procedures to identify and validate applicant’s material handling plan when selenium occurs in the permit overburden; and Update State selenium policy once new fish tissue based selenium limits are finalized and implemented. This task would involve training for DMR staff on the finalized selenium policy/guidance to reflect the outcome of the new fish tissue based selenium limits. OSMRE will follow-up on State improvements after the WVDEP has had time to implement the above measures. Page 34 Annual Evaluation Report – West Virginia 2017 D.2.b. SMCRA Actions Relative to Exceedances of NPDES Effluent Limitations Based on the findings from the Part 733 evaluation relative to NPDES violations, the WVDEP has initiated a series of actions to improve its SMCRA inspection and enforcement procedures regarding exceedances of NPDES effluent limitations including:  In 2015, changes were initiated as required by USEPA.  The State agreed to identify water sampling protocols and increase water sampling frequency to at least quarterly, with an emphasis on outlets with self-reported exceedances.  The State agreed to cite exceedances of NPDES effluent limits and water quality violations observed during State inspections under SMCRA.  The State agreed to make State and Federal Court Orders or other decisions available in electronic format to its staff.  The State agreed to conduct additional water sampling when discharge monitoring reports or field sampling demonstrate exceedances of average monthly limits set forth in NPDES permits. In addition, it increased its budget for water sampling by $95,000 in 2017.  The State agreed to inspection portals as a permit requirement for Underground Injection Control (UIC) sites to allow sampling. During EY 2017, OSMRE initiated an oversight review of the State’s implementation actions and will report on those findings during EY 2018. D.2.c. Topsoil During OSMRE’s two-year review process, WVDEP initiated several improvements to ensure topsoil and substitute material were properly handled and it addressed issues discovered during OSMRE’s Part 733 allegation review. The last remaining task was for WVDEP to evaluate existing permits to ensure that the correct requirements were applied to the original permit approval. A listing of these permits is updated monthly by WVDEP to document the progress. WVDEP identified a total of 126 permits that needed a topsoil substitute variance and/or supporting rationale. Of the total permits, 69 have been revised, and 30 additional permits have revisions pending. OSMRE initiated emphasis on topsoil as part of its random inspection process in March 2017. Thus far, OSMRE is finding WVDEP is effectively administering its program. However of the 103 sites inspected as part of OSMRE’s process, only twenty-five were on surface mining permits. Four of these 25 permits had a post mining land use of hayland/pasture or industrial. Of the remaining 21 permits, 11 contained a topsoil substitute variance and had language in the planting plan that was consistent with the rules. The Reclamation Specialist indicated that the operator was implementing proper topsoil substitute and State reforestation practices on these sites, or the site had been granted at least a Phase I bond release. The other 10 permits, which did not include a topsoil substitute variance, have been reclaimed to at least a Phase I standard. Page 35 Annual Evaluation Report – West Virginia 2017 Data from a full year review would be more representative and most likely include more current active surface mines. Therefore, OSMRE will continue these efforts in EY 2018. Event 733-Topsoil 733-Topsoil 733-Topsoil 733-Topsoil Objective Fulfill requirements per response to 733 dated Fulfill requirements per response to 733 dated Fulfill requirements per response to 733 dated Fulfill requirements per response to 733 dated Defining Document Responsibility Task Due Date Comments Noted in WVDEP response to 10/25/16 draft decision Charlie Sturey Regulation change completed rule change submitted 6/14/2016 to OSM waiting decision Noted in WVDEP response to 10/25/16 draft decision Charlie Sturey check list and completed develop check list and certification language 02/24/2017 certification language for substitute for substitute Noted in WVDEP response to 10/25/16 draft decision John Flesher Noted in WVDEP response to 10/25/16 draft decision John Flesher Topsoil & Topsoil completed distributed and Substitute Guidance, 9/28/2016 discussed at annual dated September 28, training 2016 Permit Revisions 8/31/2017 permits meeting required, obtain criteria as defined in topsoil substitute the 733 workplan, to variance submit revisions Deliverables used guidance dated 9/28/2016 till rule approved check list and certification language to be used on revisions and new applications used guidance dated 9/28/2016 till rule approved revised permits, spreadsheet with activities WVDEP began issuing Director’s Orders in March 2017to the permittees whose permits did not contain the required topsoil substitute variance or supporting documentation. The planned review process is as follows: ¨ Active permits with no waivers but needing them, with supporting rationale. ¨ Active permits with approved topsoil waivers, but lacking supporting rationale. ¨ Not-started permits with topsoil waivers to be addressed prior to activation. WVDEP committed to providing deliverables described in the aforementioned table by the listed due dates. The only deliverable or task remaining is to revise all permits, meeting the criteria as defined in the Part 733 work plan, so that they have an approved topsoil substitute variance by August 31, 2017. Surface mine permits with 300 acres or 35 percent of the permit yet to be disturbed would be required to obtain a topsoil substitute variance. D.2.d. SWROA Storm Water Runoff Analysis (SWROA) procedures to minimize off-site flooding potential was one of the five program areas where OSMRE agreed required further evaluation, pursuant to 30 CFR 733.12(a)(2). As a result, OSMRE has conducted meetings with WVDEP and developed specific schedules for improvement efforts concerning SWROA. The WVDEP has promised to: (1) develop a document based on evidence of absence criteria supporting SWROA effectiveness and function, (2) evaluate violations and offsite occurrences, (3) develop a checklist to ensure consistency for adequate modeling assumptions, (4) ensure that SWROAs are revised as per field and permit changes, and (5) provide for continuous training with industry, field, and office staff. OSMRE has implemented a study to follow-up and monitor the WVDEP progress. Page 36 Annual Evaluation Report – West Virginia 2017 E. Acid Mine Drainage (AMD) Inventory of Active Permits WVDEP has continued to maintain AMD inventories. WVDEP and OSMRE executed a work plan in 2006 to assist the State in the development of an ongoing inventory of active mining operations requiring AMD treatment and to implement procedures that would allow for the collection of raw water data at those sites on a regular basis. The team identified approximately 370 active permits in the State with appreciable water treatment costs. This project met with some success, but inadequate data regarding pump discharge rates at underground mines and inadequate flow and chemistry data to estimate water treatment costs proved insurmountable and the project was never completed. Estimating project cost for both land and water treatment is critical to assessing the solvency of the SRF. As in past years, WVDEP continued to provide OSMRE an updated list of all permits within the State that have AMD and/or required water treatment during the prior year. This listing is used by OSMRE inspectors and is modified based on any water quality data that OSMRE provides WVDEP. During EY 2017, OSMRE completed updating its Inspection and Enforcement (I&E) System to automatically capture AMD data that CHFO inspectors include on their inspection forms. CHFO also initiated uploading water quality data from past inspection reports into the I&E system. This information will be compared to State inspection data to verify accuracy and will eventually be provided the State in an electronic format. As mentioned last year, WVDEP established a team to evaluate permits on its AMD inventory in an attempt to more precisely estimate water treatment costs at both active and forfeited mine sites within the State. The State does have water treatment cost data at most bond forfeiture sites, but it lacks complete data for some forfeited sites. Some operators have provided the State water treatment cost data for their mines, but WVDEP lacks similar data for most active mine sites within the State. WVDEP is taking several steps to improve its inventory. It has tasked its inspection staff with validating the actual sites that are likely to be treating water after active mining. It is evaluating the cost information provided during the recent bankruptcies as it relates to water treatment. It is developing cost categories to allow for more timely assessments of liability based on flow and chemistry. It is also exploring information that may be garnered through operator information available to the West Virginia Coal Association. WVDEP expects these efforts to result in an inventory with appropriately assessed liabilities by the end of 2018. Finally, OSMRE notes that WVDEP has improved its efforts to obtain accurate information on deep mine discharges which are one of the most costly and difficult to predict pollution discharges. WVDEP is working with OSMRE on the development of improved guidance for deep mine hydrologic monitoring and permitting and has also increased emphasis on the assessment of hydrologic information after the mine has closed. Page 37 Annual Evaluation Report – West Virginia 2017 F. Reforestation Activities During Evaluation Year 2017, the WVDEP issued 18 surface mine permits and 3 surface mine permit amendments covering 2,129.13 acres. Sixteen of the 21 permits issued propose forestland as the post mining land use, and 2 more are to be returned to fish and wildlife habitat. 82 percent of all permits issued, covering 2,013.6 acres, contain reclamation plans that require the implementation of State forestry practices. 1,369,000 trees were planted in the spring of 2017 on approximately 2,000 acres of West Virginia mine sites. All of these trees were planted on sites where forestry practices are required by permit, but it is not always being fully implemented. Over compaction of the growth medium is still common. OSMRE reclamation specialists continue to work with WVDEP inspectors and coal operators to insure that the proper growth medium is placed, loose grading is performed, and native non-competitive ground covers are seeded. There were 7,550 acres approved for Phase III bond release in EY 2017. 3,587 acres (47.5 percent) were planted in trees for either forestland (769.03 acres) or wildlife habitat (2,818 acres) post mining land uses. 531.67 acres were returned to hayland / pasture. The Office of Special Reclamation did not contract for any tree planting on bond forfeited permits in 2017. The Office of Abandoned Mine Lands and Reclamation did not include tree planting on any of its projects in EY 2017. Figure 2 Forestry Postmining Land Use Tucker County Page 38 Annual Evaluation Report – West Virginia 2017 West Virginia University, in cooperation with Catenary Coal Company, now ERP Environmental Fund, Inc. completed their monitoring of tree growth and survival on its experimental practice site in Kanawha County. This site is being used to compare the effects of different growth mediums and compaction rates on tree survival and growth rates. A technical report entitled Final Monitoring Report Catenary Coal Company Experimental Practice Commercial Hardwood Reforestation and Soil Medium Study was published in 2016. The 10­ year study concluded that brown sandstone was a better medium for the growth of trees than gray sandstone. OSMRE and WVDEP presented the 2016 ARRI Excellence in Reforestation Award to CoalMac, Inc.’s Phoenix Surface Mine No. 1, located in Logan County. (shown below) This site was also selected as the Regional Award winner for 2016. The 11th annual ARRI Reforestation Conference was held in Morgantown, West Virginia, in April 2017. The conference was held in conjunction with the American Society for Mining and Reclamation and the West Virginia Mine Drainage Task Force. Joint Conference Presentations can be viewed at https://wvmdtaskforce.com/. The 12th annual ARRI Reforestation Conference will be held in Virginia in August 2018. For further information concerning the Appalachian Regional Reforestation Initiative (ARRI) refer to: http://www.arri.osmre.gov Page 39 Annual Evaluation Report – West Virginia 2017 G. State Regulatory Staffing/Program Funding During EY 2017, the State had an approved regulatory program staff of 255.48 Full Time Equivalent (FTE) positions, but there were 41 vacant positions, resulting in only 214.48 FTE filled positions as shown in Table 8. The State’s regulatory program staff declined by 8.77 FTE positions compared to last year. Staffing increased in inspection and enforcement, administration and its bond forfeiture program. In addition, the number of vacancies increased forty one percent more than last year. Seventy one percent of the vacancies were in permitting and inspection and enforcement. During EY 2017, the State also submitted its proposed 18-month budget estimate for FY 2019. WVDEP projects that its regulatory staff will remain at 255.48 FTE positions in FY 2019. In addition, the number of vacancies is expected to slightly decline. WVDEP expects to have 37.25 vacant positions in FY 2019. Seventy eight percent of the vacancies are expected to be in permitting and inspection and enforcement. Unlike prior years, the State is not having much success in filling vacant positons. Given that approximately 20 percent of the existing regulatory staff is eligible to retire, State officials anticipate that its vacancy problem will continue, and they will have more vacant positions to fill in the future. As discussed in Subsection VI.B.1.d above, WVSCMRA was amended to increase the filing fee for surface mining permits and to increase or establish new fees for other permitting actions. Revenue from these fees is used to administer the State’s regulatory program. However, State officials agree that revenue from those fees is insufficient to offset the revenue lost due to the repeal of the synfuels tax in December 2007. WVDEP, in cooperation with OSMRE, is continuing to evaluate other potential sources of revenue to permanently fund the State’s administration of its approved regulatory program. WVDEP was able to meet its matching requirements under its regulatory grant in FY 2017, due mostly to higher than projected revenue estimates and a settlement in a litigation case that resulted in civil penalty assessments under the CWA. State officials recently acknowledged that WVDEP should be able to cover its 50 percent matching requirement under its Administration and Enforcement Grant through FY 2020. As mentioned, higher than expected permit fees and coal tax revenue estimates caused them to increase prior projections. However, OSMRE is concerned this source of funding is only a temporary fix, and WVDEP will have to identify other sources of revenue if it is to meet its future funding obligations under its grant. Although recent revenues were above projections, most coal models project that State coal production will continue to decline well into the future. Informal assessments show that the continued decline in State coal production will result in a revenue loss of about $4 million annually for the regulatory program and associated costs. OSMRE is somewhat encouraged that State revenue estimates now show that WVDEP should be able to meet its funding obligations under its Administration and Enforcement (A&E) Grant through 2020. However, given that any State proposal to increase revenue requires legislative approval, WVDEP must act by 2019 to find a permanent source of revenue for its regulatory program, if it is to effectively resolve this ongoing problem. Page 40 Annual Evaluation Report – West Virginia 2017 H. State Bond Forfeiture Administration Grant Reimbursement Rate WVDEP reclaims bond forfeiture sites through its Office of Special Reclamation. Section 3-01­ 20 of the Federal Assistance Manual (FAM) provides that only those bond forfeiture costs that are not directly associated with site-specific activities are allowable under the State’s A&E Grant. OSMRE and WVDEP have agreed to temporarily fund 45 percent of the field staff for the OSR under the A&E Grant, but this funding rate still requires OSMRE grants validation. OSMRE expects to complete this review in 2018. I. Dam Compaction During EY 2011, OSMRE began an evaluation of compaction of coarse refuse slurry impoundment embankments. The intent of this evaluation was to determine if the operators were consistently able to adequately compact the coarse refuse under conditions that would often appear to be adverse (placement under all weather conditions). The evaluation was conducted by employing an independent consulting firm to perform compaction testing during unannounced inspections at selected sites. OSMRE completed the field work for this study in EY 2012. However, the WVDEP initiated a follow up study covering the same sites, with some additions. The field work for the WVDEP study is reportedly complete. However, a comprehensive report of their findings was not submitted at the end of the EY 2017. Certain differences of opinion with regard to appropriate laboratory and field compaction control procedures were noted between OSMRE and the WVDEP during the study. OSMRE and the WVDEP will continue working to resolve these differences. Also, OSMRE and WVDEP began a joint study during EY 2015 entitled “Verification of comp action on impoundment embankments and hydraulic barriers in conjunction with normal oversight inspections.” Both WVDEP and the Mine Safety and Health Administration observed the field testing and sampling for this study. Nineteen coarse coal refuse embankments were sampled and tested for compaction. The results are currently being evaluated. J. Litigation This section includes discussion of existing cases in four categories of litigation:     Litigation against OSMRE; Litigation involving WVDEP; Litigation involving various coal companies; and Bankruptcy filings of coal companies operating in West Virginia. Although OSMRE was named as a litigant in only two of the cases discussed herein, we find it useful to monitor these cases to assist in our oversight of the West Virginia program. Outcomes of some lawsuits may set a precedent which could influence future rulings. We monitor citizen suits against coal companies involving both the CWA and SMCRA. OSMRE also monitors NOIs that are required to be filed by SMCRA or the CWA before a citizen suit can be filed, but the NOIs are not addressed herein. For a discussion of NOIs that have been filed against OSMRE, please refer to Section VI.C above. Page 41 Annual Evaluation Report – West Virginia 2017 J.1. J.1.a Litigation Involving OSMRE Ongoing Litigation Regarding the State’s Bonding Program West Virginia Highlands Conservancy v. Secretary Ken Salazar and West Virginia Coal Association, DOI, Civil Action No. 2:00-cv-1062 (S.D. W.Va.). On March 15, 2011, the West Virginia Highlands Conservancy (WVHC) moved to reopen a case involving the solvency of West Virginia’s ABS, a bond pool made up of forfeited bonds and taxes on coal production. This was the third time WVHC had contested OSMRE’s 2002 approval of changes to the State’s bonding program. The initial complaint was filed in November 2000. Although the U.S. District Court neither reversed nor remanded OSMRE’s approval in the previous two rulings, the Court had not dismissed this case altogether. Therefore, WVHC filed a motion to reopen the case, rather than issuing a NOI. In the subject complaint, WVHC alleged that the WVDEP had undermined the Special Reclamation Fund Advisory Council’s annual report recommendation that West Virginia increase revenue in its ABS to meet anticipated shortfalls in funding the treatment of water pollution discharges by increasing the tax on coal from14.4 cents to 25.49 cents per ton. In addition, WVHC maintained that the State had not included in its projections the cost to obtain NPDES permits for long-term water discharges at bond forfeiture sites. On August 25, 2011, the Plaintiff and the Defendants, DOI and the West Virginia Coal Association, filed a joint status report with the Court in response to its Order of August 5, 2011. The Plaintiffs stated that the Court should not delay reopening the case until the new actuarial report and Advisory Council recommendations are issued, whereas the Defendants recommended that it was premature for the Court to reopen this matter prior to the close of the 2012 legislative session. In addition to the recommendations, the report included the minutes of the Advisory Council’s meeting of August 10, 2011, and a preliminary draft of Consensus Coal Production Forecast for West Virginia 2011. On March 30, 2012, a status conference call was conducted by the Court. In light of the enactment of Senate Bill 579 that increased the special reclamation tax from 14.4 cents to 27.9 cents per ton of clean coal mined, the Plaintiff acknowledged that it would move to withdraw its Second Motion to reopen and refile it to address the changed circumstances that have occurred since the filing of its motion to reopen. On April 2, 2012, the WVHC filed its Motion to withdraw its Second Motion to reopen this case with the Court. On August 5, 2012, the Court issued an Order granting the Plaintiff’s Motion to withdraw its Second Motion. In addition, the Court granted the WVHC leave to file an additional motion to explain deficiencies that remain, notwithstanding the recent revenue increase in the Special Reclamation Fund. Although the Court had previously granted the WVHC leave to file an additional motion to explain deficiencies that remain in the Special Reclamation Fund, the WVHC had not filed its Page 42 Annual Evaluation Report – West Virginia 2017 motion by the end of the reporting period. However, counsel for the WVHC provided the Court notice of a change of attorney during the last evaluation year. J.1.b. Litigation Concerning a West Virginia Operation that had Not Started Mining within Three Years of Permit Issuance Coal River Mountain Watch, et al., v. United States Department of the Interior, et al., Civil Action No. 1:13-cv-01606-KBJ (D.D.C). and Civil Action No. 2:13-cv-26251 (S.D. W.Va.). On October 21, 2013, Coal River Mountain Watch (CRMW) filed a lawsuit against DOI and OSMRE over an August decision that OSMRE rendered concerning a West Virginia coal company that had not commenced mining operations within three years of the mine’s permit issuance. The lawsuit was filed in U.S. District Court for the District of Columbia (Civil Action No. 1:13-cv-01606-KBJ) and a parallel complaint (Civil Action No. 2:13-cv-26251) was filed in the U.S. District Court for the Southern District of West Virginia. On August 20, 2013, OSMRE’s Deputy Director reversed an OSMRE CHFO decision that found, among other things, that the WVDEP response to a TDN was inappropriate, arbitrary, and capricious and an abuse of discretion because a permit issued to Marfork Coal Company expired by operation of law under Section 506(c) of SMCRA when mining had not started within three years of permit issuance. Among other things, the Deputy Director’s decision concluded that the language of Section 506(c) does not require automatic termination or forfeiture if a mining operation is not commenced within three years; rather, the permit is subject to termination by the regulatory authority which, under WVDEP's policy, was required to give notice to the permittee. CRMW alleges in its complaint that OSMRE's August 20th decision constitutes a "national rule" in violation of the Administrative Procedure Act and SMCRA. Answers to both complaints were to be filed by December 30, 2013. However, on December 19, 2013, the Department of Justice filed motions requesting that the Defendants’ response due date be extended to January 31, 2014. On December 19, 2013, the U.S. District Court Judge for the District of Columbia issued a Minute Order granting the motion for extension of time to answer. The U.S. District Court Judge for the Southern District of West Virginia issued an order on December 20, 2013, requiring the Defendants to answer or otherwise respond to the complaint on or before January 31, 2014. Answers to both complaints were filed on January 31, 2014. On April 15, 2014, the Federal Defendants filed a Motion to Dismiss or stay the related case pending before the U.S. District Court for the District of Columbia (D.C. Court). The Federal Defendants maintain that the D.C. Court should dismiss the case before it because the Southern District of West Virginia is the appropriate forum for the Plaintiff’s claims. The parties submitted a Joint Motion to stay the case pending resolution of the Federal Defendants’ motion by the D.C. Court. On April 2, 2014, the Court granted the Motion and stayed the case. However, on April 24, 2014, the Plaintiff filed a Motion to dismiss since it has become convinced that the challenged action is a national rule over which the D.C. Court has exclusive jurisdiction. On May 8, 2014, the Federal Defendants requested the Court to stay and delay consideration of the Plaintiff’s Motion until the D.C. Court has had the opportunity to rule on the Page 43 Annual Evaluation Report – West Virginia 2017 motion to dismiss currently pending before it. The Plaintiff responded on May 15, 2014, that the Court should allow it to voluntarily withdraw its law suit from the West Virginia Southern District Court. The Plaintiff maintains that a voluntary dismissal of this case has no bearing on the D.C. Court’s assessment of proper venue. Rather, it correctly signals that the Plaintiff does not seek to pursue duplicitous litigation. According to the Plaintiff, dismissing the case will not prevent the D.C. Court from finding that West Virginia is the more appropriate venue for this case, if it so wishes, and it will accommodate a more expeditious resolution of its claims. On December 2, 2014, the D.C. Court granted the Plaintiff’s motion and denied the Federal Defendant’s pending motion to dismiss or, in the alternative, stay without prejudice and with leave to refile. At the same time, the Plaintiffs filed an amended complaint against the Federal Defendants requesting the D.C. Court to declare the 2013 de facto rule a national rulemaking and find that the Federal Defendants have violated the Administrative Procedures Act. On December 5, 2014, a Notice of Decision and Joint Status Report was filed by the Defendants pursuant to Court Order dated April 21, 2014. To avoid duplicative litigation, the parties request that the West Virginia Southern District Court continue to stay the case pending resolution of the Federal Defendant’s motion to dismiss the Plaintiff’s Amended Complaint by the D.C. Court. The parties agree to file a joint report within two weeks of the D.C. Court’s ruling on the Federal Defendants’ motion. On December 19, 2014, the Federal Defendants filed an answer to the Plaintiff’s amended complaint. The Federal Defendants requested that the D.C. Court dismiss the amended complaint without prejudice. The Federal Defendants clarified that they no longer seek a stay in light of the Plaintiff’s motion to dismiss currently pending in the West Virginia case. On January 16, 2015, the Plaintiff filed a Memorandum in Opposition to the Federal Defendants’ Motion to Dismiss the Plaintiff’s Amended Complaint. In addition, the Plaintiff requested the D.C. Court to determine whether it has jurisdiction to determine the merits of this case. On January 30, 2015, the Federal Defendants filed a reply in support of its Motion to Dismiss the Plaintiff’s Amended Complaint. The Federal Defendants request that the D.C. Court dismiss the case, so the matter can be decided in West Virginia. No other action was taken in this case in either court. During this reporting period, the CRMW attorney filed a jointly prepared Appendix to the Plaintiff’s Motion for Summary Judgment. In addition, the Plaintiff’s attorney filed a notice to alert the Court to a recent decision of the United States District Court for the District of Alaska in Castle Mountain Coalition, et al. v. Office of Surface Mining Reclamation and Enforcement, et al., No. 3:15-cv-00043-SLG (July 7, 2016), which, according to the attorney, is relevant to the Court’s consideration of the Plaintiff’s Motion for Summary Judgment. On December 26, 2016, the U.S. District Judge ordered that OSMRE’s decision of August 20, 2013, finding that WVDEP did not act arbitrarily or capriciously in failing to terminate Marfork Coal Company’s permit was vacated, and the matter remanded to OSMRE for reconsideration in light of the District of Alaska’s decision in Castle Mountain Coalition v. OSMRE, No. 3:15-cvPage 44 Annual Evaluation Report – West Virginia 2017 00043-SLG, 2016 WL 3688424 (D. Alaska July 7, 2016). The Court closed the case, but retained jurisdiction over it for the limited purpose of ensuring that OSMRE issues a new informal review decision expeditiously, and Plaintiff may move to reopen the case if Defendant fails to act accordingly on remand. On January 27, 2017, CHFO provided WVDEP the District Court’s order granting the government’s motion for vacate and voluntary remand in this case. In addition, CHFO requested WVDEP to provide OSMRE any supplemental information that their agency may have concerning this matter. On March 9, 2017, CHFO submitted WVDEP’s supplemental information together with CHFO’s analysis of the situation to Headquarters and the Appalachian Regional Office for further consideration. On June 16, 2017, a motion for a stipulated settlement agreement regarding Plaintiff’s request for attorney fees and costs was submitted, but a determination had not been rendered by the Court at the end of the evaluation year. J.2. J.2.a. Litigation Involving the WVDEP Citizen Suits Regarding Water Quality Violations at Bond Forfeiture Sites West Virginia Highlands Conservancy, et al. v. West Virginia Department of Environmental Protection, Civil Action Nos. 2:07-cv-00410 and 1:07-cv-00087-IMK, (S.D. and N.D. W.Va.). This case involved two U.S. District Court Orders finding that the WVDEP was violating the CWA by emitting pollutants into navigable water ways of the United State from a point source without a permit and ordered WVDEP to apply for and obtain NPDES permits for discharges from 21 bond forfeiture sites within the State. On April 23, 2009, WVDEP filed an appeal with the U.S. Court of Appeals for the Fourth Circuit (4th Cir. No. 09-1474). The Fourth Circuit issued a Briefing Order on July 13, 2009, and the State filed its opening brief on August 24, 2009. On January 11, 2010, the Plaintiffs filed a NOI with WVDEP. In the NOI, the Plaintiffs alleged that WVDEP controlled and operated facilities at an additional 131 bond forfeiture sites in West Virginia that were discharging pollutants into waters of the United States without the required NPDES permits. On November 8, 2010, the 4th Circuit Court of Appeals affirmed the Northern District Court’s ruling of January 2009 that required WVDEP to improve the treatment of AMD and other pollution at abandoned coal mines that were being reclaimed by the State. The Court of Appeals found that WVDEP must obtain NPDES permits for the 18 bond forfeiture sites in the northern part of the State that required water treatment. A similar decision in the Southern District Court held that WVDEP had to improve treatment so discharges from three other abandoned mine sites Page 45 Annual Evaluation Report – West Virginia 2017 in the southern part of the State would comply with State water quality standards. Although the ruling only addressed the northern sites, WVDEP is developing NPDES applications for all bond forfeiture sites where water discharges are currently being treated by the State. On August 2, 2011, the Plaintiffs filed two new law suits against WVDEP regarding the 131 additional bond forfeiture sites that were discharging pollutants into waters of the United States without NPDES permits, West Virginia Rivers Coalition et al. v. Huffman, Civil Action No. 1:11-cv-118 (N.D. W. Va.) and West Virginia Rivers Coalition et al. v. Huffman, Civil Action No. 2:11-cv-524 (S.D. W. Va.). On August 3, 2011, WVDEP submitted Progress Reports to both District Courts. Attached to the reports was a proposed Consent Decree. The proposed Consent Decree involved 192 bond forfeiture sites and provided that WVDEP would issue final NPDES permits for the 21 sites in the aforementioned cases by September 1, 2011. Under the Consent Decree that was approved by the U.S. District Court in October 2011, WVDEP would prepare a complete inventory of bond forfeiture sites requiring water treatment by August 15, 2011. By September 1, 2011, WVDEP would issue NPDES permits for the 18 bond forfeiture sites in the Northern District and the three bond forfeiture sites in the Southern District. By October 15, 2011, WVDEP would prepare and submit a priority ranking of the sites based on the annual pollutant loading discharged from each site. By December 1, 2011, WVDEP would prepare a Treatment Cost Report in which it would determine the capital cost and annual operating and maintenance costs for treating water discharged from each bond forfeiture site to meet applicable effluent limitations based on compliance with West Virginia’s numeric and narrative water quality standards and calculated using the reasonable potential analysis required by 40 CFR 122.44(d). By December 31, 2015, WVDEP would issue NPDES permits for the remaining 169 bond forfeiture sites that required water treatment. The WVDEP also agreed to use the information and analyses developed under the Consent Decree to make recommendations to the Special Reclamation Fund Advisory Council and the West Virginia Legislature about needed adjustment to the Special Reclamation Fund to provide necessary funding for investments in water treatment at these sites. The Northern District Court entered the Consent Decree on October 12, 2011, and the Southern District Court entered the Consent Decree on February 10, 2012. The Consent Decree resolves all four law suits that were filed by the Plaintiffs. Pursuant to the Consent Decree, the District Courts retain jurisdiction over this matter pending compliance with the terms of the Consent Decree. The Consent Decree is to terminate within 30 days after the issuance of the NPDES permits for all 169 sites listed in the Appendix of the approved Consent Decree. Including the 21 sites mentioned earlier, WVDEP is to obtain NPDES permits on 192 bond forfeiture sites by December 31, 2015. Last year, WVDEP had obtained NPDES permits for 144 bond forfeiture sites that require water treatment. The State had until December 31, 2015, to obtain NPDES permits on the remaining 19 bond forfeiture sites. Because NPDES permits can include more than one mining permit, WVDEP estimated that it would only have to obtain 163 NPDES permits for the bond forfeiture sites that require water treatment. Page 46 Annual Evaluation Report – West Virginia 2017 Like last year, WVDEP had completed and/or approved 164 NPDES permits, which included 270 bond forfeiture sites that were part of the Consent Decree. WVDEP still plans to obtain 3 additional NPDES permits that include 3 more bond forfeiture sites. Once approved, WVDEP will have obtained a total of 167 NPDES permits on 203 bond forfeiture sites that were previously permitted under Article 3 permits. J.3. Litigation Filed Against Various Coal Companies J.3.a. Citizen Suit Against Hobet Mining Concerning Selenium Ohio Valley Environmental Coalition, Inc., West Virginia Highlands Conservancy, Inc. and the Sierra Club v. Hobet Mining, Inc. Civil Action No. 3:09-cv-1167, (S.D. W.Va.). On October 23, 2009, the Ohio Valley Environmental Coalition, et al. (OVEC) filed a complaint for declaratory and injunctive relief and for civil penalties against Hobet Mining, -LCC (Hobet) in the United States District Court for the Southern District of West Virginia. OVEC alleged that Hobet discharged and continues to discharge pollutants, including selenium, aluminum, and iron into Berry Branch of the Mud River in violation of Section 301 of the CWA and Section 515(b) of SMCRA. According to the complaint, Hobet committed at least 22 violations of its NPDES permit WV1022911 at its Surface Mine No. 22 operation between December 1, 2008, and June 30, 2009. In an Order dated September 1, 2010, as amended on October 8, 2010, Hobet was ordered to submit a treatment plan for Hobet 22 by October 1, 2010, and Hobet 22 Outfall 1 had to be in compliance with its effluent limitations for selenium by May 1, 2013. Patriot’s Chapter 11 bankruptcy filing in July 2012 has stayed compliance with the original deadlines in the Court’s revised Order. Approval for changing the ABMet treatment system to a Biological Chemical Reactor (BCR) treatment system was granted in July 2013. Design work on the BCR treatment system was completed on July 19, 2013. The compliance deadline for this project was August 1, 2014. During EY 2014, both cells of the BCR continued in the acclimation phase. Work continued on the clean water collection pond. In addition, work continued on Ponds A, B, and C. The underground injection control permit application was submitted to WVDEP in May 2014. Drilling of holes for injection of water into Berry Branch deep mine is planned for July. The Standby Letter of Credit (SLOC) for this project was replaced with a $28.5 million Guaranty provided by Peabody Corporation. Hobet has been reporting its progress to the Court and a special master on a monthly basis. The BCR treatment system is estimated to cost $12.3 million. Prior expenditures relating to the FBR and ABMet treatment systems bring the estimated total cost of the project to $25.2 million. Hobet has spent $4.6 million on the BCR treatment system to date. Total expenditures on the Hobet 22 water treatment project to date amount to $17.5 million. Page 47 Annual Evaluation Report – West Virginia 2017 On August 21, 2014, a Joint Stipulation was filed by Hobet and the Plaintiffs with the Court regarding selenium treatment activities at Hobet 22. The Stipulation was filed to provide the Court, Special Master, and Parties with necessary clarity regarding the Parties’ expectations related to the “prove-out” period for the BCR technology at Hobet Surface Mine No. 22. Hobet has completed installation of the BCR treatment technology as designed and has been treating water from Hobet 22 and Outfall 004. On December 22, 2014, the District Court approved an Amended Agreed Order and Amendment 1 to the Guaranty, which reduced the amount to be guaranteed by Peabody Corporation to $15 million. During EY 2015, Hobet filed 15 status reports. On July 8, 2015, Hobet reported that construction activities for the BCR system were completed in July 2014. In addition, the storm water system utilizing underground injection into the deep mine was placed into service in September 2014. In June 2015, samples taken at Outlet 004 were out of compliance with daily maximum effluent limits. The discharge was untreated raw water which exceeded the capacity of the treatment system. The NOV that had been issued by the WVDEP in April 2014, was extended to allow for testing of water in the polishing ponds to meet compliance. The consulting contractor received the sample results and recommended a solution. Changes are being made in the field to implement the recommendations. During EY 2016, Hobet filed 11 status reports. On October 9, 2015, U.S. District Court Judge Robert Chambers issued an Order directing Hobet to file a memorandum explaining how the final approved plan in the Patriot Coal Chapter 11 Bankruptcy proceedings would have on the $15 million Peabody Energy Corporate Guarantee. In addition, on October 19, 2015, the Court directed Hobet to file a supplemental memorandum addressing the effect, if any, the final plan in the Patriot Coal Bankruptcy proceedings would have on Peabody’s Guaranty. The responses concluded that nothing in the Reorganization Plan releases Hobet from its obligation in this action, or modifies the nature of those obligations. The attorney for Hobet also asserted that if the Virginia Conservation Legacy Fund, Inc. (VCLF) is substituted for Hobet in this action, VCLF will become counterparty in place of Hobet under the Peabody Guaranty. During the course of the 2015 bankruptcy proceedings, Hobet and its parent, Patriot Coal Corporation, negotiated the sale of Hobet and substantially all its assets to VCLF and ERP Compliant Fuels, LLC (VCLF collectively). ERP Compliant Fuels, LLC assigned its obligations in this matter to ERP Environmental Fund, Inc. (ERP). At the end of 2016, the Plaintiffs and Defendants, Hobet and/or ERP, were attempting to extend the deadline to achieve compliance with the selenium effluent limitations in the NPDES permit from August 1, 2014, to August 1, 2018. According to the Plaintiffs, noncompliance was partially the result of Hobet’s bankruptcy proceedings and due to ERP’s financial condition. To provide time for ERP to come into compliance, the Plaintiffs and ERP agreed that an extension of the compliance deadline was warranted and appropriate. During 2016, the BCR system experienced operational issues that were expected to require the installation of a sand filter at substantial cost to gain compliance. As of June 2016, Hobet had Page 48 Annual Evaluation Report – West Virginia 2017 expended approximately $9.5 million on the BCR system. It is estimated that the total BCR project will cost $12.3 million to complete. On February 10, 2017, the District Court, at the request of the Plaintiff’s, granted an order allowing ERP to temporarily submit quarterly reports beginning April 1, 2017, instead of monthly reports as currently required. ERP is to resume monthly reporting on February 1, 2018. On March 31, 2017, ERP submitted its first quarter selenium status report. ERP acknowledged that it is continuing to evaluate the BCR system and other technologies for outfalls. ERP also acknowledged that during the second quarter of 2017 most of the BCR system components would be stored to prevent theft until the systems could be reinstalled to meet the revised Consent Decree timeframes. On July 28, 2017, the District Court Ordered ERP or other responsible party to pay four outstanding invoices of a former employee of the Special Master by August 18, 2017, or be held in contempt of Court. This case was still ongoing at the end of the evaluation year. J.3.b. Citizen Suit Filed in West Virginia Against Fola Coal Company Ohio Valley Environmental Coalition, Inc., et al. v. Fola Coal Company, Civil Action No. 2:13­ cv-21588 (S.D. W.Va.). On August 8, 2013, the Ohio Valley Environmental Coalition, the West Virginia Highlands Conservancy and the Sierra Club (collectively OVEC et al.) filed a complaint for declaratory and injunctive relief and civil penalties against Fola Coal Company, LLC, a subsidiary of Consol Energy, Inc. According to the complaint, since September 2007, Fola’s Surface Mine #4A has discharged, and continues to discharge pollutants, which cause acute and chronic toxicity, ionic stress, and biological impairment, into Leatherwood Creek and its Tributaries, including Right and Rocklick Forks, (Clay County, West Virginia) in violation of West Virginia’s narrative water quality standards for biological integrity and aquatic life protection. The client alleges high levels of conductivity and sulfates are the primary causes of the water quality impairments. By violating State water quality standards, they allege that Fola has also violated, and is continuing to violate, the performance standards incorporated as conditions in its West Virginia SMCRA permit. The Plaintiffs ask the Court to cease such activity; construct treatment systems that will effectively treat its effluent to levels that comply with all water quality standards; and order Fola to pay appropriate civil penalties up to $37,500 per day for each CWA violation. This case was combined with Civil Action No. 2:13-cv-16044, and it has been designated as the lead case. During EY 2015, a bench trial was held on this case before District Court Judge Chambers from June 1, 2015, through June 4, 2015. A transcript of the Court proceedings was made available on June 17, 2015. On June 24, 2015, the Plaintiffs filed a Post-Trial Brief in this case, and the Defendants filed a response on July 13, 2015, in opposition to the Post-Trial Brief filed by the Plaintiffs. The Plaintiffs contend that the Court should enter a declaratory judgment finding Fola liable for violating its CWA and SMCRA permits. Page 49 Annual Evaluation Report – West Virginia 2017 On August 12, 2015, the District Court Judge issued a Memorandum Opinion and Order in this case. The Court found that the Plaintiffs have established that Fola had committed at least one violation of its permits governing Fola Mine No. 2 and Fola Mine No. 6 by discharging into Road Fork and Cogar Hollow high levels of ionic pollution, which have caused or materially contributed to a significant adverse impact to the chemical and biological components of the applicable streams’ aquatic ecosystem, in violation of the narrative water quality standards that were incorporated into those permits. However, the Court further found that the Plaintiffs did not meet their burden in establishing liability for alleged violations with respect to discharges from Fola Mine No. 4A into Right Fork, under NPDES Permit No. WV1013815. From May 9 to 10, 2016, the Court held a bench trial on the issue of remedying violations found in the liability phase of this litigation. On June 7, 2016, the District Court Judge issued a Memorandum Opinion and Order regarding injunctive relief. The Court found injunctive relief was appropriate and necessary to remedy Fola’s permit violations determined in Phase I. The Court further found the data presented at the Phase II trial pertaining to water flow and water quality in Road Fork and Cogar Hollow streams provided an inadequate basis for the Court to order any of the alternative remedies proposed by the Parties. Accordingly, the Court stayed its decision on a specific remedy and ordered Fola to submit a proposed plan for collecting water flow and quality data for Road Fork and Cogar Hollow. In addition, the Court held that Fola should be prepared to implement a data collection plan. The data collection plan would, at a minimum, collect measurements necessary to evaluate and decide which of the remedies proposed at the bench trial, namely water treatment through reverse osmosis or water management plans that divert flow high in ionic toxicity away from the impaired streams, will ensure Fola’s compliance with its permits as soon as possible. Although the Court had required collection of additional data, the Court also found time is of the essence in collecting data and remedying Fola’s violations. For that reason, the Court ordered the Parties to appear for periodic case management conferences to guarantee swift progress on choosing a specific remedy and implementing it. The Court also found and appointed a Special Master to ensure Fola’s prompt compliance. On September 13, 2016, the District Court issued an order giving the Special Master until September 30, 2016, to issue a report on the feasibility of implementing a reverse osmosis system to treat high-conductivity water discharge by the Defendant. The final report entitled, “Report on the Current and Proposed Use of Reverse Osmosis Treatment in Surface and Underground Mine Sites” was distributed to the parties by the Special Master on October 27, 2016. On November 17, 2016, Fola filed a response to the Special Master’s Reverse Osmosis Report. Fola questioned whether the reverse osmosis treatment of mine drainage water is technically and economically feasible. Foal estimated that the cost of one alternative treatment approach would exceed $350 million over the life of the facility. Fola requested a meeting with the Special Master to discuss these and other issues, as well as the encouraging flow and conductivity data collected thus far pursuant to the monitoring plan ordered by the Court. Page 50 Annual Evaluation Report – West Virginia 2017 On May 2, 2017, the District Court issued a Memorandum Opinion and Order granting the Plaintiff’s motion of an interim award of attorney fees and costs. On June 30, 2017, the Plaintiff’s filed a motion for the Court to issue a scheduling order to determine a specific remedy in the case, and to provide further guidance on the framework for deciding that remedy. This case was still ongoing at the end of the evaluation year. J.4. Bankruptcy Filings of Coal Companies Operating in West Virginia J.4.a. Alpha Natural Resources Inc. – Case No. 3:15-bk-33896 (KRH) On August 3, 2015, Alpha Natural Resources Inc. (Alpha) and 150 subsidiaries based in Bristol, Virginia, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Virginia. The filing lists the company’s assets at $10.1 billion and its total liabilities at $7.1 billion, including $1.96 billion in secured debt and $2.1 billion in outstanding unsecured bonds. Alpha reports that it has 33 active mines and 13 preparation plants in West Virginia. It employs 4,300 people within the State. Alpha produces steam and metallurgical coal in West Virginia. According to the Energy Information Administration, Alpha was the 4th largest U.S. coal producer in 2013 with 84.9 million tons or 8.9 percent of our Nation’s total coal production. Alpha is the world’s thirdlargest supplier of metallurgical coal used in making steel. Alpha’s mining subsidiaries in West Virginia include Alex Energy, Inc.; Aracoma Coal Company, Inc.; Bandmill Coal Corporation; Barnabus Land Company; Big Bear Mining Company; Black Castle Mining Inc.; Black King Mine Development; Boone East Development Co.; Brooks Run Mining Company LLC; Brooks Run South Mining, LLC; Clear Fork Coal Company; Dehue Coal Company; Delbarton Mining Company; Duchess Coal Company; Eagle Energy, Inc.; Elk Run Coal Company, Inc.; Goals Coal Company; Green Valley Coal Company; Greyeagle Coal Company; Herndon Processing Company LLC; Highland Mining Company; Independence Coal Company, Inc.; Jacks Branch Coal Company; Kanawha Energy Company; Kepler Processing Company, LLC; Kingston Mining, Inc.; Kingwood Mining Company, LLC; Litwar Processing Company LLC; Lynn Branch Coal Company, Inc.; Maple Meadow Mining Co.; Marfork Coal Company, Inc.; Omar Mining Company; Paynter Branch Mining, Inc.; Peerless Eagle Coal Co.; Performance Coal Company; Pioneer Fuel Corporation; Power Mountain Coal Company; Premium Energy LLC; Rawl Sales & Processing Co.; Republic Energy Inc.; Riverside Energy Company, LLC; Riverton Coal Production, Inc.; Road Fork Development Company, Inc.; Robinson-Phillips Coal Co.; Rockspring Development, Inc.; Rum Creek Coal Sales, Inc.; Shannon Pocahontas Mining Company; Stirrat Coal Company, Inc.; Sycamore Fuels; Trace Creek Coal Company; Twin Star Mining, Inc.; and Wyomac Coal Company, Inc. These mining operations have a total of 496 active and inactive mining permits within the State. In July 2016, Alpha reached a $325 million agreement with WVDEP regarding its outstanding reclamation obligations within the State. Under the agreement, Alpha’s surety bonds will remain in place, but given that Alpha also had self-bonding obligations, the company agreed to provide Page 51 Annual Evaluation Report – West Virginia 2017 WVDEP an additional $100 million in surety and other forms of bond to replace the self-bonds at its active and inactive mines within the State. Alpha also agreed to provide WVDEP $39 million in letters of credit or cash bonds, as financial assurance for reclamation and water treatment at its other self-bonded mines in the State. Alpha and its secured creditors through Contura agreed to provide WVDEP at least an additional $229 million in secured funding as financial assurance for the company’s additional commitment to post bonds for and reclaim and treat water at all of its remaining mines, including mines in other states. Of the $229 million, at least $124 million will go toward reclamation and water treatment over a 10-year period. Contura agreed to provide an additional $55 million in reclamation and water treatment funding over the next five years, as well as a guaranty of Alpha’s excess operating cash flow commitment up to an additional $50 million. More than 80 percent of the $229 million will go toward reclamation and water treatment in West Virginia during the first two years. On July 7, 2016, the Bankruptcy Court for the Eastern District of Virginia approved, with modifications as set out in open court, Alpha’s Second Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. The plan allowed Alpha to move assets to its major creditors and to emerge from bankruptcy. The Court also approved Alpha’s request to sever its contract with the United Mine Workers of America (UMWA). The UMWA provided active employees $53 million in health care benefits and 2,600 retirees $872 million in health care benefits. Any new agreements will not cover defined benefit pensions and retiree health care. Under the agreement, Alpha agreed to make a lump sum payment of $28.5 million into a voluntary employees’ beneficiary association (VEBA). The UMWA has expressed concern that funding in VEBA will not last long, and it is counting on Congress to pass the Miners Protection Act to provide additional funding. On July 26, 2016, Alpha announced plans to split into two mining companies, the new Alpha and Contura Energy, Inc. (Contura). Alpha will operate eighteen mines and eight preparation plants in West Virginia and Kentucky. David Stetson was appointed Chief Executive Officer (CEO) of the reorganized company. Contura was created to acquire and operate Alpha’s core operations in Northern Appalachia, including the Cumberland mine complex, the Powder River Basin, and three Central Appalachian mining complexes, the Nicholas Mine in West Virginia and the McClure and Toms Creek Mines in Virginia. Contura will operate 11 mines within these regions. Contura also purchased Alpha’s interest in the Dominion Terminal Associates coal export terminal in eastern Virginia. Kevin Crutchfield was named CEO of the new company. On July 19, 2017, Alpha announced it entered an Asset Purchase Agreement to convey real and personal properties in Kentucky, Illinois, Tennessee, and West Virginia to Lexington Coal Company (LLC). The conveyance will include approximately 280 permits, substantial reclamation equipment, ongoing royalty payments associated with the properties, and 100 million tons of coal reserves. LCC will receive approximately $204 million in cash at the time of closing and $112 million in installment payments to assist in the fulfillment of bonding, reclamation, water treatment, and other obligations. Page 52 Annual Evaluation Report – West Virginia 2017 According to Alpha, the transaction with LCC will eliminate all its remaining self-bonds in West Virginia. Alpha acknowledged that prior to emerging from bankruptcy, it had approximately $250 million in outstanding self-bonds. Working with West Virginia regulators during the past year, Alpha has been able to reduce its liability to approximately $150 million. According to Alpha, the agreement is to be completed by the third quarter of 2017. The completion of the agreement is contingent on Alpha obtaining financing and entering into agreements with various state and Federal regulatory agencies on the transfer of the permits. After closing, Alpha will continue to operate 19 mines and 9 preparation plants in West Virginia, and it plans to produce 14 million tons of metallurgical and thermal coal in 2017. Alpha’s bankruptcy case was still open at the close of the evaluation period. J.4.b. Arch Coal, Inc. – Case No. 4:16-bk-40120 On January 11, 2016, Arch Coal, Inc. (Arch) and 72 subsidiaries based in St. Louis, Missouri, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Missouri. The filing lists the company’s assets at $5.9 billion and its total liabilities at $6.5 billion, including $364 million in secured debt and $6.1 billion in unsecured debt. Arch reports that it has 5 active mining complexes and 5 coal preparation plants in West Virginia. Arch produces steam and metallurgical coal in West Virginia. Arch is the second largest coal producer and marketer of coal in the United States, with operations and coal reserves in each of the major coal-producing regions of the country. It is the second largest holder of coal reserves in the United States, owning or controlling over five billion tons of proven and probable coal reserves. Arch’s mining subsidiaries in West Virginia include Allegheny Land Company, Arch Reclamation Services, Ark Land Company, Bronco Mining Company, Inc., Coal-Mac, Inc., Cumberland River Coal Company, Hawthorne Coal Company, Inc., ICG Beckley, LLC, ICG Eastern, LLC, ICG Tygart Valley, LLC, International Coal Group, Inc., Juliana Mining Company, Inc., King Knob Coal Company, Mingo Logan Coal Company, Mountain Gem Land, Inc., Otter Creek Coal, LLC, Patriot Mining Company, Inc., Shelby Run Mining Company, LLC, Upshur Property, Vindex Energy Corporation, and Wolf Run Mining Company. These subsidiaries have approximately 227 permits in West Virginia. These permits consist of approximately 78,000 acres and have performance bonds totaling more than $64 million. On May 5, 2016, Arch filed a Debtors Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and a Disclosure Statement. On June 14, 2016, Arch filed an Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and an Amended Disclosure Statement. Furthermore, on July 6, 2016, Arch filed a Third Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and a Third Amended Disclosure Statement. On July 8, 2016, the Bankruptcy Court for the Eastern District of Missouri issued an Order approving Arch’s Disclosure Statement; approving the forms of ballots; establishing solicitation and voting procedures; establishing procedures for allowing and estimating certain Page 53 Annual Evaluation Report – West Virginia 2017 claims for voting purposes; scheduling a confirmation hearing; and establishing notice and objection procedures. On October 5, 2016, the U.S. Bankruptcy Court for the Eastern District of Missouri entered Orders confirming Arch’s third and fourth amended joint plan of reorganization under Chapter 11 of the Bankruptcy Code. This action enabled Arch to emerge from bankruptcy. According to Arch, it was emerging with more than $300 million in cash on its balance sheet and a debt level of $363 million, consisting of a new loan and capital leases. The company’s total debt was 7 percent of what it was prior to restructuring. Arch has five mines operating in West Virginia. They include the Beckley Complex, Coal-Mac, Inc., Leer Mining Complex (ACI Tygart Valley, LLC), Mountain Laurel, and Sentinel. These five operations produced approximately 9.8 million tons of coal in 2016. On July 19, 2017, the U.S. Bankruptcy Court for the Eastern District of Missouri approved a final decree closing the Chapter 11 case on four of Arch’s reorganized debtors, which included Arch Wester Resources, LLC, Ark Land Company, Mountain Coal Company, LLC, and Wolf Run Mining Company. This case was still ongoing at the end of the review period. J.4.c. Peabody Energy Corporation – Case No. 16-42529 (BSS) On April 13, 2016, Peabody Energy Corporation (Peabody) and 153 subsidiaries based in St. Louis, Missouri, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Missouri. The filing lists the company’s assets at $11 billion and its total liabilities at $10 billion, including $3.3 billion in secured debt and $6.7 billion in unsecured debt. Peabody does not have any active mines in West Virginia. However, it has guaranteed reclamation obligations for some of its former affiliates that continue to operate within the State. As discussed above under Subsection 3.a, Peabody agreed to provide a $15 million Guaranty to construct a BCR treatment system at Hobet 22. Although Peabody filed for Chapter 11 bankruptcy, attorneys for the company acknowledged that it still has a responsibility to fulfill its legal obligations at Hobet 22. On behalf of itself and its affiliates, Peabody entered a settlement agreement with the UMWA on December 30, 2015. Under the agreement, Peabody agreed to pay $75 million into VEBA in ten installments between January 4, 2016, and October 3, 2016. In addition, Peabody agreed to establish an irrevocable letter of credit, so VEBA could draw on it if Peabody failed to make installment payments under the settlement agreement. On April 3, 2017, the U.S. Bankruptcy Court for the Eastern District of Missouri entered an Order confirming Peabody’s second amended joint plan of reorganization as revised on March 15, 2017. This case was still open at the close of the review period. Peabody is the largest coal producer in the United States and the fifth-largest coal producer in Australia, with interests in 26 active mining operations in both countries. It is the largest holder Page 54 Annual Evaluation Report – West Virginia 2017 of coal reserves in the United States with approximately 6.3 billion tons of proven and probable coal reserves. Peabody has approximately 7,100 employees. Impact of Bankruptcies on West Virginia Approximately 1,093 mining permits within West Virginia were held by the six publicly-traded coal mining companies that filed for Chapter 11 bankruptcy protection between April 2014 and January 2016. The permits held by these bankrupt companies comprised 52 percent of West Virginia’s inspectable units and 59 percent of the State’s total active and inactive mines. To date, none of these bankruptcies have resulted in permit revocations and/or bond forfeitures within the State. K. Monitoring and Improvements to West Virginia’s Alternative Bonding System (ABS) Alternative Bonding System During EY 2017, the Special Reclamation Fund Advisory Council (Advisory Council), in cooperation with WVDEP and OSMRE, continued monitoring the State’s ABS, commonly known as the Special Reclamation Fund (SRF). Several noteworthy events occurred during the year and are discussed below. During the reporting period, the Advisory Council, through the WVDEP, awarded a contract to Pinnacle Actuarial Resources, Inc. (Pinnacle) of Bloomington, Illinois to conduct an actuarial study of the ABS. The study is to be completed by the end of 2017, and provided to the Legislature in 2018. By law, an actuarial study is to be conducted on the State’s ABS every two years, and informal reviews are to be done annually. Pursuant to State law, the Advisory Council is authorized to make recommendations to the Legislature regarding the financial adequacy of the State’s SRF. On March 10, 2016, the Advisory Council recommended that the current reclamation tax of 27.9 cents remain in force. In addition, the Advisory Council recommended that the Legislature form a panel to examine elements of our State code that result in uncontrolled liabilities, how other states deal with such issues, and finally to propose a State legislative initiate to rationalize water quality regulation to meet the conditions of the Federal Clean Water Act (CWA), while adding rationality and certainty to the process. Last year, both former Governor Tomblin and former WVDEP Secretary Huffman acknowledged that, given the current state of the coal industry, additional changes will be needed to the State’s ABS to ensure that revenue will be sufficient to satisfy future bond forfeiture reclamation obligations. As a result, WVDEP initiated an evaluation of various bonding alternatives for the State and publicly stated that the State would propose significant changes to its existing bonding program. However, the proposed legislative changes were never submitted to the Legislature for approval. Page 55 Annual Evaluation Report – West Virginia 2017 As noted in past annual reports, OSMRE concurs that changes to the bonding system are likely necessary as the current fee-based system will not sustain funds necessary for treatment systems that may be in place for decades or centuries to come. During the evaluation year, the Advisory Council commissioned the completion of the 2017 Consensus Coal Production Forecast for West Virginia by the Center for Business and Economic Research at Marshall University. This forecast, which is a consensus of four other forecasts, is to be completed by mid-year and provided to Pinnacle for consideration in its actuarial study. Water Trust Fund Through the State Investment Management Board (IMB), the Advisory Council continued to invest Special Reclamation Water Trust Fund (SRWTF) revenue in long-term bond investments. In addition, it was agreed that this revenue would be set aside and not used to fund water treatment activities at bond forfeiture sites until after 2019. SRF revenue, which is used to fund land reclamation activities and water treatment activities for the time being, is invested in shortterm financial instruments. The adoption of this investment strategy has resulted in increased rates of return for the SRWTF and to a lesser extent for the SRF. At the end of the evaluation period, the return on investments had improved somewhat compared to last year. During the reporting period, the Office of Special Reclamation (OSR) used State inspectors to inspect completed bond forfeiture sites to ensure compliance with approved reclamation plans, and DMR issued letters terminating jurisdiction over the sites. WVDEP retains jurisdiction over any bond forfeiture site, or portions thereof, that require treatment of discharges emanating from such sites. WVDEP continued working with the United States Environmental Protection Agency (EPA) and OSMRE to pursue an alternative means for treating water within the Martin Creek and Sandy Creek Watersheds. Rather than treating water discharges from bond forfeiture sites on a site-by­ site basis, WVDEP plans to conduct in-stream treatment, thus addressing both pre-law and postlaw AMD problems, while improving each stream’s biological integrity. The agencies are using the same techniques that the State’s AML program has successfully used in bringing life back to the Three Forks Creek Watershed. During the reporting period, WVDEP continued working with EPA to develop a watershed-based NPDES permit under the CWA. In June 2017, EPA approved WVDEP’s request for a variance. Water treatment sites within the watershed where the variance is to be applied will be covered by the watershed-based NPDES permit, and WVDEP will be required to meet in-stream water quality standards at predetermined stream locations. WVDEP continued working with West Virginia University’s Water Research Institute to determine where best to locate dosers to treat the two streams on a watershed basis. Geomorphic Landform Design (GLD) During the evaluation year, OSR partnered with West Virginia University’s Civil and Environmental Engineering Department (WVU) and OSMRE and evaluated Geomorphic Landform Design technology in the reclamation of the Royal Scot Refuse site in Greenbrier County, West Virginia. This bond forfeiture site was chosen by OSR to apply this new Page 56 Annual Evaluation Report – West Virginia 2017 technology, given its steep topography and the high infiltration of storm water into the refuse pile resulting in AMD production. OSR and WVU applied GLD to engineer a cap and cover system with ground contouring to minimize precipitation infiltration and direct surface runoff using four engineered stream channels. The reclamation cost is estimated at $2,809,587. The initial outcomes of the project demonstrated that landforming could be used to alter hydrology to reduce infiltration into the refuse pile. Both the topography and channels incorporated into the design quickly moved streamflow off the site. Finally, it was determined that geomorphic slopes would cost less and perform better than conventional design. WVU plans to continue using field site investigations to validate its laboratory material property test values for coarse coal refuse and to obtain construction parameters such as field compaction limits. A field mixing and grass growth study is also planned to evaluate if a 60 percent refuse to 40 percent short paper fiber (MGro TM) blend would create a better growth medium. Golden Delicious Apple The Central Appalachian Empowerment Zone has signed an MOU with the West Virginia National Guard (WVNG) and will be partnering with West Virginia State University, West Virginia Department of Agriculture, and the Office of Coalfield Community Development to reintroduce the Golden Delicious Apple to Clay County, West Virginia. The WVNG approached OSR about using a bond forfeiture site in Clay County as a test orchard. As a result, Greendale Coal, Permit No. S-73-83, was selected as the test site. Through joint discussions with OSR and the landowner, the WVNG was able to lease 10 acres of land from within the forfeited site. The WVNG cleared and prepared the 10 acres for planting. Approximately 1,500 samplings were planted by the WVNG and inmates at the Department of Corrections. OSR plans to construct an AMD treatment facility on this site. The WVNG plans to experiment using both untreated and treated water for irrigations purposes. OSR plans to incorporate access points for irrigation throughout its treatment system, which could lead to a potential cost savings to OSR considering that for each 3,000 trees planted 18 gallons of water is consumed each day. T & T Treatment Plant Southwestern Energy Company (SWN), the 3rd largest producer of natural gas in the lower 48 states, partnered with OSR on a project to collect and convey AMD sources in the Muddy Creek watershed to the T&T Treatment Plant currently under construction. Although not a contributor to AMD, SWN does operate in the area, utilizes water in their operations, and is concerned about water quality. The goal of the project is to restore water quality in Muddy Creek and improve water quality in the Cheat River. Once completed, the project will collect and transport an average of 1,200 gallons of raw water per minute to the T&T Treatment Plant for processing and discharge. SWN has sent a conditional letter of commitment in support of the project. SWN is prepared to provide funds necessary to construct the project up to $2.5 million and for the related operation and maintenance of the pipelines conveying the water under the project up to $375,000 per year for up to 5 years from 2017 through 2012. As discussed in Subsection VI.B.1.i, WVDEP submitted a statutory revision that would provide tax incentives for mine operators who reclaim bond forfeiture sites within the State. Pursuant to WV Code §22-3-11(h), the State Tax Department is authorized to promulgate rules to carry out Page 57 Annual Evaluation Report – West Virginia 2017 the purposes of this law. On June 6, 2014, the State Tax Department filed its rules with the Secretary of State. On November 13, 2014, OSMRE published a Federal Register notice that reopened the comment period on the Special Reclamation Tax Credit Rule. The comment period closed on November 24, 2014. Once finalized, OSMRE will publish its decision in the Federal Register. The tax credit can be used by operators, who complete reclamation on other bond forfeiture sites, to offset their special reclamation tax liability. Part of the intent is to free up OSR personnel to work on other bond forfeiture sites throughout the State. Bond Forfeiture NPDES As discussed in Subsection VI.L.2.a, the U.S. Fourth Circuit Court of Appeals upheld a U.S. District Court decision that found the State was violating the CWA by emitting pollutants from a point source without a permit, and ordered WVDEP to get NPDES permits for discharges from 21 bond forfeiture sites within the State. As a result of this decision, the State entered a Consent Decree that was approved by both the Northern and Southern District Courts. Like last year, WVDEP had obtained 164 NPDES permits for 200 bond forfeiture sites in accordance with the Consent Decree, but it still plans to obtain 3 more NPDES permits to treat at a total of 203 bond forfeiture sites. L. Trend Station/Watershed Health Oversight During EY 2017, two AmeriCorps members with OSMRE CHFO developed tools to investigate the possibility of post-SMCRA mining contributing to stream degradation. Work continues on the development of a procedure that will utilize existing water quality monitoring programs to prioritize inspections. M. Slurry Impoundment/Basin Breakthrough/Dams Action Plan During EY 2012, OSMRE and the WVDEP completed the final phase of a three phase technical review of breakthrough potential at coal refuse impoundments in West Virginia that was begun in February of 2001. Upon completion of the Phase III evaluation, WVDEP agreed to favorably address all issues identified during the evaluations. OSMRE developed an Action Plan requiring WVDEP to address all the remaining permits over a 2 ½ year period through a complete evaluation of breakthrough potential to be performed at the next renewal, mid-term, or revision of a permit for a site that contains an impoundment. In addition, if a potential breakthrough issue is identified at any site before it is scheduled to be evaluated, it will be evaluated in response to an order. All evaluations will be made considering the issues identified in the OSMRE studies. Although WVDEP did not sign the action plan, it did initiate a process to address all impoundment issues by Director’s orders. Progress on this effort is described in in Section VII.A.2 of this report. The OSMRE conducted a study in Evaluation Year 2016 of the WVDEP efforts to re-evaluate the potential for slurry impoundment breakthrough into underground mine works that are in close proximity to Class C High Hazard Impoundments. In all, WVDEP required 116 facilities to re-evaluate their Class C Impoundments for potential breakthrough into underground mine works. OSMRE evaluated 12 of the approvals (4 from each of the 3 regional offices) for Page 58 Annual Evaluation Report – West Virginia 2017 compliance and adequacy and determined WVDEP’s actions to be appropriate and meeting the requirements of the WVDEP Director’s Order and an Action Plan drafted by OSMRE. OSMRE considers the action plan now closed. N. Incidental Boundary Revisions (IBR) As previously reported, CHFO evaluated the State’s implementation of its IBR requirements. The evaluation found that WVDEP was performing many aspects of its IBR process well in that all new acreage was being added under an IBR or amendment and it was being bonded. In addition, WVDEP recognized that an IBR application did not quite fit the profile of a minor boundary revision and treated such requests as significant permit revisions with public comment periods. However, many of the IBRs in the review were combined with other operational changes, and the IBR acreage limits for surface mines were exceeded making the classification of all the changes subject to question as an IBR. Some of the problems identified in the study relate to the State’s IBR policy which, in some instances, does not require all the necessary information or conflicts with State program requirements. That policy provides waivers reserved for underground mining operations to be used for coal refuse disposal or coal preparation operations where the activity directly facilitates underground mining operations. OSMRE found examples where waivers were granted in those situations that do not meet program requirements. Because WVDEP submitted a program amendment to OSMRE relating to its IBR requirements that may resolve some of these concerns, OSMRE and WVDEP agreed to complete processing the program amendment before taking any action on this issue. The review of WVDEP’s IBR modification is being completed as part of a larger effort, and it was pending OSMRE’s approval at the end of the reporting period. For further information regarding the status of this effort, see Subsection VI.B.1.c above. Once a final decision is rendered on the State’s proposed IBR modification, additional action may be needed to address the issues described in the IBR oversight evaluation. O. Lands Unsuitable Mining Petitions As shown in Table 12, during the evaluation year, WVDEP did not receive any new lands unsuitable petitions to declare certain areas within the State unsuitable for surface coal mining activities. Furthermore, because there were no pending land unsuitable applications, the State did not have to render any prior lands unsuitable determinations during this reporting period. WVDEP uses existing available staff to review and process lands unsuitable petitions as they are submitted by various individuals and special interest groups throughout the year. P. Hydrologic Evaluation of Completed Underground Mines From November 15, 2015, to November 15, 2016, the CHFO conducted inspections of 22 Underground Mine permits where the operator requested a bond release based on its assertion that the mine was fully reclaimed. In addition to on-the-ground inspections, an important element of the review was an evaluation of the current hydrologic conditions within the deep Page 59 Annual Evaluation Report – West Virginia 2017 mine and project the stability of those conditions into the future to prevent adverse impacts to the hydrologic balance outside the permit area. In November 2012, WVDEP developed guidance to aid in the evaluation process with a requirement for a Post Underground Mining Assessment. CHFO’s hydrology staff used this guidance in its evaluation. On June 13, 2016, WVDEP issued a policy clarification to their November 2012 guidance for “Underground Mine Outcrop Barriers and Post Mining Hydrology Evaluation”. As the OSMRE study was progressing, WVDEP made significant changes as to how and when the final hydrologic impacts would be evaluated. On June 13, 2016, WVDEP issued instructions requiring underground mines to submit a “Deep Mine Abandonment Plan” in the form of an Article 3 permit revision. This new process is intended to ensure the operator provides sufficient information to uphold the approved PHC and HRP and reduce the need for a separate PUMA. The memo also provides clarification of how the documents and bond releases will be reviewed within WVDEP. All of CHFO samples in this report were started before the requirement for an abandonment plan. CHFO will continue its sampling process, but believes the procedures being implemented by WVDEP will address the issues being identified during OSMRE reviews. CHFO anticipates completing the study effort with a full report in 2018. VII. A. Regulatory Program Problems and Issues Slurry Impoundment/Basin Breakthrough/Dams Action Plan OSMRE completed its oversight this year of the State’s efforts to comply with an Action Plan proposed to resolve findings from a 2012 OSMRE study. OSMRE considers all issues resolved. See Section VI.M for details. B. Acid Mine Drainage Inventory of Active Permits As previously reported, a joint WVDEP-OSMRE team was established to update information regarding water treatment activities on active permits within the State. The team identified approximately 370 active permits in the State with appreciable water treatment costs. As discussed in Subsection VI.E, work on this project was never completed due to the lack of accurate and complete water treatment cost data. Knowledge of active mine treatment liabilities is necessary to properly evaluate the solvency of the SRF. As noted in subsection VI.E, WVDEP has several activities ongoing to improve its inventory. WVDEP anticipates completing new assessments of all sites with long-term treatment liabilities by the end of 2018. Page 60 Annual Evaluation Report – West Virginia 2017 C. State Regulatory Staffing and Program Funding As discussed in Subsection VI.G, the State has a regulatory program staff of 255.48 FTE positions in EY 2017, but there are almost 41 vacancies, resulting in a total regulatory staff of 217.48 FTE positions. WVDEP’s regulatory staff last year was 264.25 FTE positions, and it had 29 vacancies. Like last year, most of its existing vacancies are in the permitting and inspection and enforcement programs. WVDEP continued to increase its hiring efforts during the evaluation year, but the number of vacant positions increased significantly. WVDEP estimates that for FY 2019 its regulatory staff will remain at 255.48 FTE positions, with 37 of those positions being vacant. As previously reported, the State did increase its permit fees, resulting in approximately $3.8 million in additional revenue to administer its regulatory program. In addition, coal tax revenue exceeded projections, and WVDEP collected approximately $2.3 million in coal taxes and other revenue. However, these increases have not made up for the lost revenue from the repeal of the synfuels tax. WVDEP now projects that it should have sufficient revenue to meet the 50 percent matching requirement under its regulatory grant through 2020. However, WVDEP and OSMRE must still find a permanent solution to the State’s revenue problem by 2019, if it is to resolve this ongoing issue. D. Customer Service – Citizen Complaint System A joint team of WVDEP and OSMRE personnel was selected to evaluate the citizen complaint process and provide information to determine if the WVDEP is successfully documenting, tracking, and resolving citizen complaints. The team determined that WVDEP has formal procedures and a process for responding to citizen complaints. However, the team noted that information provided on complaint inspection forms (MR-35/EB-35) was not always clear as to whether or not the right to accompany was given to the citizen before the inspection investigation was conducted. In response to these findings the WVDEP has updated their MR-35/EB-35 forms to revisions as necessary, to record accompaniment rights at informed times, and to enforce revision standardization. This customer service report can be found in EY 2016 at www.odocs.osmre.gov. This issue is considered resolved. E. Acid Mine Drainage Prediction-Underground Mining and Expansions – Underground Mine Monitoring During a previous study, OSMRE and the WVDEP completed a review of nine underground mining permits where AMD had developed. The review was designed to determine whether AMD formation could have been predicted and properly addressed through more informed permitting considerations and decisions. The review found that available data could be used by State permit reviewers to more consistently predict and prevent or address AMD issues, and that revised CHIAs should be required with significant underground mine expansions. This action is consistent with the guidance and recommendations put forth by a 2007 joint Quality Assessment Page 61 Annual Evaluation Report – West Virginia 2017 Quality Control (QAQC) panel that was comprised of WVDEP/OSMRE/industry specialists that completed CHIA guidance for DMR permit reviewers. At that time, the WVDEP agreed to take several actions to improve how AMD issues would be addressed in the future. These included updating of the WVDEP CHIA Guidance document. In addition, a WVDEP/OSMRE task group developed a Guidance Manual for Monitoring Underground Coal Mining Operations for use by WVDEP DMR permit review staff and the coal industry. This manual addresses issues concerning the prediction and monitoring of potential hydrologic impacts from underground coal mining operations. In EY 2013, a joint OSMRE and WVDEP task group completed a draft of the Guidance Manual. The WVDEP has yet to complete the review of this document. However, during EY 2017, CHFO worked with the DMR in reviewing and editing the document to bring this project close to completion. F. Financial Adequacy of the Special Reclamation Fund (SRF) As discussed in Section VI.K, the Advisory Council, through WVDEP, has awarded a contract to conduct another actuarial study of the SRF by the end of 2017. By law, an actuarial study is to be done every two years, and informal reviews are to be done annually. The State’s earlier actuarial analysis projected the SRF to be financially solvent through 2035. However, as discussed throughout this report, there are several issues that require close monitoring to ensure the State's SRF remains financially adequate. In Section VI.J.4, it is noted that 59 percent of the State's active and inactive permits were owned by coal companies in some stage of bankruptcy during the past two years. None of the bankruptcies resulted in a forfeited permit. However, the State will face potential reclamation liability as a result of those bankruptcies well into the future. In Section II, this report acknowledges a continued declining long-term trend in State coal production, which is the primary source of funding for the SRF. Furthermore, as discussed in Section VI.K, another Consensus Coal Production Forecast was commissioned by the Advisory Council for 2017, but like last year, the trend in State coal production is not expected to improve. Moreover, the proposed legislative changes that may have resulted in long-term improvements to the State’s SRF were never submitted for legislative approval. Nevertheless, as described in Section VI.B, OSMRE supports the various efforts the State has taken to improve its SRF, and we will continue working with WVDEP to make further improvements to its bonding program in the future. G. Issues from OSMRE January 12, 2017, Decision on 30 CFR 733 Petition As noted in sections D.2.a-d, WVDEP agreed to make improvements in its administration of the topics evaluated as part OSMRE’s decision on citizens’ allegations related to the storm water runoff analysis, the Cumulative Hydrologic Impact Assessments, SMCRA inspections and violations related to NPDES compliance, topsoil handling, and selenium prevention and treatment. OSMRE will monitor progress on those improvements. but it will not list them as separate issues, unless oversight findings so indicate. Page 62 Annual Evaluation Report – West Virginia 2017 VIII. OSMRE Assistance – Regulatory Program A. Underground Mine Monitoring – Technical Guidance Manual OSMRE is assisting the WVDEP with the preparation of a Guidance Manual to promote consistency and efficiency in the preparation and review of the hydrologic portions of underground mine permit information. A draft of this document was completed in May 2013, and WVDEP management has yet to complete its review of this document. During EY 2017, CHFO has been reviewing and editing the document with DMR management. This project should be completed during EY 2018. B. Technical Training – Technical Innovation and Professional Services (TIPS) and National Technical Training Program (NTTP) OSMRE organizes and conducts classroom style training courses throughout the year for State and Federal program staff. The trainings are specifically oriented toward the latest technologies useful for the regulation of active mining and reclamation of abandoned mines. These courses are administered through OSMRE’s NTTP and TIPS Programs. During EY 2017, WVDEP sent 65 regulatory staff to NTTP courses and 14 regulatory staff to 16 TIPS courses. Also, OSMRE makes online training courses available for various subjects through its TIPS training program, and WVDEP regulatory staff participated in the online courses during the year. C. Lexington Coal Company Horizon Natural Resources Company (Horizon) filed for Chapter 11 bankruptcy protection in November 2002, resulting in the largest coal company bankruptcy in U.S. history at the time. In August 2004, the U.S. Bankruptcy Court in Kentucky approved the company’s reorganization plan which included the formation of Lexington Coal Company, LLC (LCC). LCC’s primary responsibility was to complete land reclamation on the remaining permits and to provide for the treatment of any pollutional discharges that may be present. As a result of the bankruptcy, there were 16 sites, involving 13 permits, in West Virginia that required land reclamation by LCC. LCC completed the land reclamation of all of those sites by EY 2014. LCC also created three Trust Fund Agreements to treat water at four of the reclaimed mine sites. LCC is expected to provide for perpetual water treatment at those sites through 2091. During EY 2017, LCC continued water treatment activities at the four sites. No water quality violations were reported at any of those sites during the evaluation year. LCC submits to WVDEP summaries of its operation and maintenance and capital improvement costs at the sites that require water treatment. Pursuant to the Trust Fund and Bond Agreements, WVDEP and LCC are to review and update the water treatment cost estimates and adjust the bond amounts based on the Primary and Capital Trust and Target valuations set forth in the Agreements. Based on this review, monies within the Trust Funds can be adjusted over time. If the Trust valuations are less than the Target valuations, WVDEP can request that LCC add monies to the Funds. However, if the Trust valuations are more than the Target valuations used Page 63 Annual Evaluation Report – West Virginia 2017 in managing the Trust Funds, WVDEP is required to instruct the Trustee to disburse the excess funds to LCC. In 2017, LCC requested that WVDEP reimburse it for operation and maintenance and capital costs it incurred during 2015 and 2016. During this evaluation period, WVDEP, in cooperation with OSMRE, reviewed LCC’s request and applied it to a model previously developed by OSMRE for evaluating trust funds. Based on its review, WVDEP reimbursed LCC $135,611 for water treatment activities at two sites. WVDEP did not approve LCC’s request for reimbursement at its ORGAS site, since LCC’s Trust valuations were less than its Target valuations, thus making it ineligible for reimbursement. WVDEP and OSMRE will continue to monitor and report on LCC’s water reclamation activities at these four mine sites in future reports. In addition, since the model OSMRE developed is only a 10-year model and WVDEP has used it for seven years, OSMRE and WVDEP may have to revise the current model and reexamine some of the historical rates of return and tangible net value estimates that were used in developing the current model. D. The Quality Assessment Quality Control Panel (QAQC Panel) The QAQC Panel was created as part of the Bragg versus Robertson Lawsuit Consent Decree entered in the U. S. District Court for Southern West Virginia on December 22, 1999. Pursuant to this Consent Decree, the overall purpose of the QAQC Panel is to “review surface mining permits and visit mine sites, as appropriate, to apprise the Director respecting administrative completeness of permits and to help assure consistent application of policies and procedures.” The consent decree also specified that the Director create and post new positions to include a biologist (with at least a Master’s Degree in biology) and a trained and qualified (professional) engineer with at least a B.S. in mining or civil engineering. The QAQC Panel is made up of two coal industry representatives, two environmental representatives, and one WVDEP representative. OSMRE is not a member of the panel, but often has a representative attend meetings as an observer and resource to the team. WVDEP also provides a full-time “Approximate Original Contour (AOC) Engineer” and other WVDEP representatives as may be needed to assist and support the Panel. The Panel is required to meet nine times per year. This generally consists of four, two-day sessions at WVDEP regional offices and two one-half-day sessions to prepare and present the Panel’s annual report to the Director and his staff at WVDEP headquarters. While the Panel reviews and monitors the overall completeness and quality of permit applications, examples of specific technical areas on which it has concentrated in the past include:      AOC calculations, determinations, and compliance certifications; AOC variances and alternate post mining land use justifications; Contemporaneous reclamation plans and variances; Topsoil substitute waivers; Storm Water Runoff Analyses (SWROAs); Page 64 Annual Evaluation Report – West Virginia 2017     Drainage control designs; Slurry impoundment construction plans; §404 Clean Water Act delineation and mitigation requirements; and Field application of specific reclamation techniques (such as forestland and ARRI). The Panel also reviews annual permitting statistics, reports on recent trends and practices in permitting, and make recommendations to improve permit quality, and the efficiency of permit review. Over the past several years, the panel has identified and reviewed the most recently submitted permit applications within each regional office and commented on their general completeness and any potential deficiencies that may need to be addressed. At the request of WVDEP staff, the Panel has also in the past reviewed specific state policies and/or proposed guidelines, offered assistance with the development or revision of various certification forms, assisted with industry training sessions, and recommended measures to clarify / update WVDEP’s e-permitting system (now called ESS or Electronic Submission System). The panel’s plans and goals for 2017 include:         Visit each regional office, as practicable; Continue to review most recently-submitted SMAs by region; Propose clarification policy regarding consistent use of NOAA Atlas 14 rainfall predictions; Conduct site visits, limited to 1 or 2 meeting days; Review an AOC+ certification during a site visit; Review SWROA structure (as-built construction) versus approved permit; Perform any special project or review of issues requested by the Director; and Assist with training seminars / sessions, if requested. Panel accomplishments to date during 2017 (5 of 9 meetings complete) include:     Finalized and Distributed Electronic Submission System (ESS) Questionnaire. Analyzed ESS Questionnaire results and presented to the Director. Visited 2 Regional Offices and the Charleston Office Prepared and presented End of Year (EOY) Report to the Director Office review of the following permits to date during 2017 has included:    Permit S-5015-96, Elkay Mining Inc., Wade No. 3 Mine; Permit S-5023-93, Elkay Mining Inc., Tower Mountain Surface Mine; and Permit E-0124-00, Elkay Mining Inc., Elkay No. 3 No site visits have been conducted to date in 2017. Four QAQC panel meetings remain in 2017. Efforts will focus on reviewing and assisting with the WVDEP/OSM 733 Follow-up guidelines and comments as per Director Ward’s letter (currently reference as the “Dashboard”). The QAQC Panel’s annual report to the Director is Page 65 Annual Evaluation Report – West Virginia 2017 expected to be presented in early December and will summarize 2017 activities, recent permitting trends, plans for 2018, and any Panel recommendations to WVDEP. E. GeoMine Project OSMRE initially provided WVDEP funding for its GeoMine Project on September 15, 2011, in the amount of $398,103. Additional funding under WVDEP’s FY 2011 GeoMine Cooperative Agreement brought the total amount to $642,000. The GeoMine Project ran from September 1, 2011, through December 31, 2014. Due to the need to allow WVDEP to pay for unexpected expenditures toward the end of the project, the closeout of the State’s FY 2011 GeoMine Cooperative Agreement was delayed until August 26, 2016. The project enabled WVDEP to hire 11 AmeriCorps members, employee 13 part-time college students and purchase computing equipment to convert into digital form mine permit data and maps related to active and abandoned coal mine sites, so that the data could be stored in a WVDEP Geographic Information System (GIS) and uploaded into an OSMRE cloud-based GeoMine system for use by other State and Federal agencies. OSMRE closed out the State’s GeoMine Cooperative Agreement on August 26, 2016. The State expended $581,579 during the life of the project. OSMRE provided WVDEP 100 percent Federal funding to operate the project for almost three years. WVDEP acknowledged that both its regulatory and AML programs benefited tremendously from the work performed under the Cooperative Agreement. WVDEP’s regulatory program is continuing to maintain nine geospatial layers from mine permit applications and progress maps and transfer the data into WVDEP’s GIS. In addition, its AML program is continuing to evaluate the more than 6,100 AML sites that were digitized using ArcMap and uploaded into WVDEP’s GIS. Although additional funding was to be provided WVDEP to continue the GeoMine project, it did not occur. WVDEP has advised OSMRE that should additional funding become available, it would be interested in continuing this project. IX. Abandoned Mine Lands Reclamation Program A. General A.1. Introduction The mission of the Abandoned Mine Land Reclamation Program is to reclaim AML sites by abating hazards, reducing or mitigating the adverse effects of past mining, and restoring adversely affected lands and water to beneficial uses. The WVDEP’s OAMLR is successfully carrying out this mission by addressing the most serious of the health and safety issues created by these AML problems. There remain many more AML problems on West Virginia landscapes and streams that need to be addressed and ultimately abated. OAMLR conducts all of the AML reclamation in West Virginia. Page 66 Annual Evaluation Report – West Virginia 2017 A.2. Program Administration The OSMRE has approved four primary AML components to the West Virginia program:  The regular construction program abates high priority, non-emergency problems caused by past mining practices. The OSMRE approved the regular abandoned mined lands construction program on February 23, 1981.  The state’s emergency program abates problems caused by past coal mining practices that must be expedited because the health and safety issues result from a sudden occurrence, and are too serious to be addressed under the regular construction program. The OSMRE approved the state’s emergency program section on August 26, 1988. In FY 2011, the OSMRE stopped providing specific funding for emergency projects, but OAMLR continues to address emergency issues with their regular grant funding, and continues to operate their emergency program as they did prior to the elimination of direct, federal emergency funding.  Potable water supply provisions allow the State to repair or replace water supplies when the damage from past mining practices occurred primarily before August 3, 1977. The OSMRE approved this program provision on July 25, 1990.  The Acid Mine Drainage Abatement and Treatment Program (AMD set-aside) allows the State to use a percentage of its annual grant allocation to reclaim watersheds impacted by AMD. OSMRE originally approved this program component on March 26, 1993, and limited the amount of the “set-aside” to ten percent. The 2006 Reauthorization of the AML program allowed the State to increase the amount of funding in the set-aside for acid mine drainage treatment and abatement to thirty percent of its annual grant.  Abandoned Mine Lands and Reclamation Economic Development Pilot Program (PILOT): During EY 2016, as part of The Consolidated Appropriation Act of 2016 (Public Law 114-113), 30 million dollars was made available to the WVDEP to partner with other state entities to develop economic revitalization projects focused in areas of the state severely impacted by the recent economic downturn in the coal market. The focus of these grant monies is to accelerate the remediation of AML sites with economic and community development end uses, and to explore strategies to convert legacy coal sites into productive land uses. During EY 2017, another 25 million has been made available to the WVDEP. The WVDEP has submitted six potential projects for OSMRE review. See Section IX.A.4 for additional information regarding West Virginia’s PILOT program projects. A.3. Abandoned Mine Land Inventory System Update On December 12, 2012, the OSMRE finalized the agency directive, AML-1, which outlines the policies and procedures for developing and maintaining the AMLIS. OAMLR staff continues to Page 67 Annual Evaluation Report – West Virginia 2017 develop Problem Area Description (PAD) forms and associated documents for inclusion into AMLIS. These PADs, along with significant changes to existing PADs, are submitted to OSMRE for approval. The electronic version of AMLIS (e-AMLIS) allows for multiple maps and documents to be uploaded to the system and linked directly to problem areas. This information, as well as completion data, can now be easily accessed at later dates through queries and downloads. OAMLR staff continues to amend existing information within e-AMLIS to more accurately reflect existing conditions in the field and update AMLIS with completion data as sites are reclaimed. This information is available to the public at https://amlis.osmre.gov. Programs developed within AMLIS allow users to enter problem type units, such as numbers of portals, gallons of water, or feet of highwall, and the program equates those problems to a predetermined number of acres for a problem type. A consistent measurement such as this allows users to get a general idea of the overall status of reclamation throughout the nation. The following chart shows the status of reclamation in West Virginia and the changes that have occurred in recent years. It is important to note that last EY, the OAMLR had entered 55 new PADs into AMLIS for OSMRE’s approval. This year, OAMLR submitted 160 new PADs into AMLIS for OSMRE approval. This significant increase was due to an effort by the OAMLR to include an existing inventory of abandoned AML eligible highwalls into the system which were previously disallowed by OSMRE several years ago. This effort will continue until this data update is completed. OAMLR then proposes to add a large mine fire inventory to AMLIS that has not yet been recorded. Also, there is a concerted effort on the part of OAMLR to enter completion data into AMLIS as soon as possible after project completion to ensure that the database contains the most accurate data possible. OSMRE concurs that many changes in the local communities including the proliferation of off road utilities vehicles has led to much greater public access to areas previously considered too remote to be considered a priority 1-2 hazard. Page 68 Annual Evaluation Report – West Virginia 2017 “At-a-Glance” $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Unfunded AML Liabilities Completed AML Projects Unfunded OAMLR Liabilities vs. Completed OAMLR Projects (2003-Present) (Chart reflects cumulative amounts between years) As presented above, completed AML projects (sites that have been reclaimed, including a variety of project types – both Priority 1 and Priority 2) continue to increase yearly as more projects are addressed by the OAMLR. The chart also shows that unfunded AML liabilities (problem areas which are inventoried sites that require reclamation), continue to heavily outweigh completed projects which abate these liabilities. An increase in AML funding occurred after 2007 as a result of the 2006 reauthorization. Over the past five years, a decrease in grant funding occurred, largely the result of a federally required sequestration and less income into the state share of the AML fund because of reduced mining and the decline of coal sales due to the significant drop in the coal market. OAMLR continues to complete AML projects and the upward trend in completed projects shown on the graph also reflects an increase in water supply projects and AMD stream treatment projects which have been added to the inventory. An important factor regarding the West Virginia AML inventory; OAMLR has a large number of liabilities such as highwalls, AMD stream treatment sites, and underground mine fires that do not appear on the inventory. As previously outlined in this report, OAMLR has initiated an effort to update AMLIS with eligible abandoned highwall information. These highwalls, and the other AML features indicated above, will be added to the inventory, to accurately display the state’s reclamation liabilities. Below is an “at-a-glance” summary of the current West Virginia AML inventory costs as reflected in eAMLIS. The detailed AML tables attached to this report provide an in-depth look at the State AML inventory and the status of the state’s reclamation accomplishments. Page 69 Annual Evaluation Report – West Virginia 2017 “At-a-Glance” West Virginia Inventory Summary (as currently reported in AMLIS) Unfunded OAMLR Liability Status (AML Problems Requiring Reclamation): $1,494,515,006 Funded OAMLR Liability Status (Current AML Projects under, or proposed for, reclamation): $69,481,499 Completed OAMLR Liability Status (Completed AML Projects): $668,059,571 A.4 AMLER Economic Development Pilot Project During EY 2017(FY 2016 – State), OAMLR submitted six AMLER Pilot projects for approval through CHFO. The following table outlines current information regarding each project. Name Pilot Funding Description Aquaponics on AML: Fish, $3,581,989 Project proposes to harness mine air/water Vegetables, Renewables, and and solar energy to aid in production of Mine Air/Water fish and vegetables, providing employment and educational opportunities. An Authorization to Proceed (ATP) has not been issued for this project. Only developmental funds have been expended to date. Sullivan Industrial Park $12,000,000 Project proposes to build an industrial park designed to allow the West Virginia National Guard Repair Program to perform vehicle repairs for the Department of Defense. The grantee was preparing to finalize the design contract, but the state administration has placed the project on hold pending further review. Thus far no Pilot funds have been expended. CHFO has not issued an ATP for this project to date. Page 70 Annual Evaluation Report – West Virginia 2017 I-79 Technology Park Mine $3,994,000 Reclamation and Economic Expansion Patriot Guardens Delicious Apple Project Danese PSD Crickmer Waterline Extension Golden $5,295,000 Road $1,000,000 Danese PSD Highland Mountain $3,100,000 Waterline Extension B. Noteworthy Accomplishments B.1. WebAML Updates Project proposes to expand infrastructure of existing industrial park, utilizing the federal anchor model, to provide employment and diversify the economy. Project is on hold due to bankruptcy with WV High Technology Consortium Foundation subsidiary. No Pilot funds have been expended. CHFO has not issued an ATP for this project to date. Project proposes to plant fruit orchards and construct a processing plant to provide employment opportunities and improve food security in the state. Only developmental funds have been expended to date. CHFO has not issued an ATP for this project. Project proposes to provide clean water for local residents and businesses. Project has gone to bid, and a contractor is being selected. No Pilot funds have been expended. ATP issued 11/29/16. Project proposes to provide clean water for local residents and businesses. Project has gone to bid, and a contractor is being selected. No Pilot funds have been expended. ATP issued 11/29/16. In EY 2008, West Virginia OAMLR began development of a new information database and management system known as WebAML. In April 2010, WebAML became a reality, allowing AML management and staff to store and manage data electronically. The system is the primary source for information for all aspects of the AML program and continues to be utilized by CHFO staff on a regular basis. WebAML continues to improve and expand from the basic framework to include access to more data and programs. This EY, time was spent on data quality, operational adjustments, security adjustments, and user support. Several upgrades to the system were completed this year, including several “mobile-friendly” additions which will make the system more compatible with the mobile devices being utilized by the OAMLR staff. Page 71 Annual Evaluation Report – West Virginia 2017 B.2. OAMLR Training The fourth annual state-wide OAMLR training was held in January 2017 for all field employees in the OAMLR program. CHFO assisted with training, discussing results of OSMRE studies, issues and successes observed in oversight inspections, and the role of CHFO in the state’s AML program. The training included discussions by the AML Chief and all the group managers (planning, realty, design, construction, and emergency), as well as presentations by the Army Corps of Engineers permitting section, iPad data collection, project design discussions, and an update on AML PILOT projects. The training was well received and beneficial to CHFO and OAMLR staff and is a regular, annual event. B.3. U.S. Army Corp of Engineers (USACE) Meetings OAMLR has started meeting with the USACE and OSMRE on a regular basis to improve communication to help expedite the permit process involved in AML reclamation project approval. This year’s initial meeting was held August 3-4, 2016 at Chief Logan State Park in Logan, West Virginia and was very successful in providing all involved with a better understanding of each other’s goals and program requirements. These meetings focused on USACE regulatory procedures and proposed revisions to the OAMLR regional permit. Also, each meeting includes a field exercise at current or proposed OAMLR project sites, which are subject to USACE permitting requirements. The draft OAMLR regional permit is currently out for public comment and is expected to be finalized by September 2017. B.4. AMD Set-Aside Projects West Virginia continues to have over 500 streams with a combined length of approximately 2,700 miles that are impaired due to AMD from pre-law mining. SMCRA allows up to 30 percent of the state and historic coal share funding to be placed into an AMD abatement and treatment fund, also known as the set-aside fund. This fund, including all interest, must be expended by the State for the abatement of the causes and treatment of the effects of AMD in a comprehensive manner within qualified hydrologic units affected by past coal mining practices. Through their original 2017 grant award, and a subsequent amendment, OAMLR placed $3,378,856 into their AMD set-aside fund this year. CHFO encourages OAMLR to make every attempt to add funding to this account on an annual basis due to the significant need in West Virginia for cleaning up AMD impacted streams. Table 2 of this report outlines the annual accomplishments by OAMLR utilizing its set-aside funding. However, Table 4 (EY 2017 Completed Projects) does not include this data since the expenditures of this funding is a project maintenance type requirement to continue to treat AMD impacted streams at several of their established water treatment facilities. The following table outlines the AMD treatment projects in which eAMLIS indicate set-aside funding was utilized during the past year: Page 72 Annual Evaluation Report – West Virginia 2017 Project Name Middle Fork Stream Restoration Three Forks Creek Watershed Restoration Laurel Run Mine Shaft GIPRA Acres Reclaimed 12,096 Number of People No Longer at Risk 155 EY 17 Expenditures $59,904 82,085 223 $175,587 250 155 $18,725 As outlined earlier in this report, OAMLR is now utilizing a new funding mechanism to accrue interest on the AMD abatement and treatment fund. Leaving the principle amount in the fund, the OAMLR uses only the accrued interest to fund the approximately $750,000.00 annual operation and maintenance costs associated with their AMD treatment facilities. Under this new investment strategy, the majority of the approximately 60 million dollars that OAMLR has available in the AMD set-aside fund has been included in the State of West Virginia’s Investment Management (IMB) financial investment pool. Traditionally, the State of West Virginia allowed investments in money market and short term bond type accounts. These types of investments normally provided a minimal yearly return rate, often less than one percent annually. This new investment mechanism allows the AMD set-aside funding to grow at a more substantial rate. It should be noted, since this investment strategy is subjected to overall market activity, the fund is subject to both positive and negative market conditions. To date, this approach has yielded overall positive results for the set aside fund. CHFO will continue to monitor this revised investment program and reports its progress in subsequent Annual Evaluation Reports (AERs). As reported in 2016, OAMLR agreed to partner with the OSR in their pilot efforts to perform instream dosing for treatment of discharges from both bond forfeiture sites and pre-law mines. During June 2017, the OSR received final approval from the EPA to allow for instream dosing at certain bond forfeiture sites. OAMLR is now partnering with OSR, and plans to contribute funds, to an extent allowed by regulations, for other in stream treatment projects in partnership with OSR. This will allow a water treatment cost sharing opportunity for the treatment of pre and post law discharges into watersheds that currently have little to no aquatic life. CHFO will monitor this plan and report on it in future AERs. C. Utilization of OSMRE Technical Assistance C.1. Technical Training OSMRE conducts classroom style courses throughout the year in the latest technology related to active and abandoned mine regulations. These courses are administered through OSMRE’s NTTP and the TIPS programs. During EY 2017, the OAMLR sent 27 employees to NTTP courses and no employees to a TIPS course. OSMRE makes online training courses available for various subjects through its TIPS training program. However, no OAMLR employees were reported to have participated in an online course this EY. Page 73 Annual Evaluation Report – West Virginia 2017 C.2. OSMRE/Fish & Wildlife Programmatic Consultation Update In April 2008, OSMRE and the United States Fish & Wildlife Service (FWS) signed an agreement, titled “Programmatic Consultation on the Abandoned Mine Lands Reclamation Program” (Programmatic Agreement). The agreement allows AML project activities to be conducted without prior notification to the FWS for specific activities the agencies agree would have no effect on federally listed species or critical habitats. On March 19, 2013, a new agreement was signed, which is valid for five years (until March 19, 2018). In preparation for the upcoming reissuance of the Programmatic Agreement, CHFO and OAMLR met with FWS in Charleston, West Virginia on May 8-9, 2017. As part of this meeting, the agencies toured several active and completed OAMLR reclamation sites throughout southern West Virginia. This activity allowed all parties to assess how the Programmatic Agreement is being implemented, and to obtain information valuable in incorporating into the pending Programmatic Agreement renewal. Of significant importance is assessing the impacts that revised terrestrial and aquatic buffers will have on the consultation process in regards to environmental assessment development by OAMLR, and the subsequent issuance of ATP’s by CHFO. The CHFO will be working with the FWS during the upcoming year to revise the current programmatic agreement with the agency. D. Public Participation and Outreach Please refer to Section III, Overview of the Public Participation Opportunities in the Oversight Process, located near the beginning of this report. CHFO combines both the Regulatory and AML programs in the AER and in our outreach efforts so that the public and stakeholders are aware of all OSMRE activities in West Virginia. E. Results of Evaluation Year 2017 Reviews E.1. Regular AML Construction Program Although grant distributions to OAMLR continue to decline, the OAMLR had a significant increase in the number of non-water construction contracts started and completed during this year. A major reason for this increase is a full year of the utilization of the WVDEP’s revised purchasing system that has improved its construction contracting process. Past AER’s have documented OAMLR’s issues with delays and timely initiation and completion of reclamation contracts which were subject to State of West Virginia purchasing guidelines. Over the past several years, the WVDEP had framed the legislative changes required to move the administration of a portion of their purchasing requirements from the State’s purchasing division to the WVDEP. These revisions to the purchasing requirements were adopted during the 2016 legislative session (WV Senate Bill 474) and took effect on June 6, 2016. Since that time, the Page 74 Annual Evaluation Report – West Virginia 2017 WVDEP revised its in-house purchasing guidelines and staffing duties to move forward with these changes. As a result of these changes, the OAMLR issued 33 new construction contracts this EY, up from only 13 during EY 16. A breakdown of these activities over time is outlined later in this section. A higher than normal number of waterline projects was budgeted during the last four grant years. After AML reauthorization, which allowed 100 percent funding of eligible waterline construction, the then governor required AML eligible waterline projects be funded on a readyto-proceed basis. That directive has been minimized somewhat with the change in West Virginia’s current leadership. However, waterline funding continues to represent a significant part of OAMLR’s annual grants. As such, a large portion of the AML grant is budgeted for waterline projects, resulting in a decrease of “ground-type” reclamation work. As part of their water supply restoration program, the OAMLR, whether entirely or in partnership with another entity, initiated six water supply projects during EY 2017. The following table outlines information associated with these the water supply projects funded over the past evaluation year. Page 75 Annual Evaluation Report – West Virginia 2017 Water Supply Project Name Boone Co. PSD- Morrisvale/ Cameo Preston PSD #2­ Pell/ St. Joe/ Birds Creek Preston PSD #4­ Hudson to State Line # 2 Greenbrier PSD #2- Peaser Knob TOTALS OAMLR Funding Amount Number of Customers Served $2,100,000 45 $2,300,000 99 $11,700,000 141 $1,100,000 $17,200,000 29 314 OAMLR issued 33 construction contracts during the past year. However, as can be seen on the chart below, the number of construction projects requesting an authorization to proceed was up only one from last year. EY 2017 EY 2016 EY 2015 EY 2014 EY 2013 EY 2012 EY 2011 EY 2010 EY 2009 EY 2008 EY 2007 Total Average Authorizations To Proceed 22 21 16 22 42 44 56 53 62 12 16 366 33 Completed Designs 26 24 27 28 39 48 64 60 55 36 18 425 39 Construction Contracts Issued 33 13 17 29 28 54 50 45 31 21 10 331 30 Construction Contracts Complete* 36 29 34 24 42 38 41 39 20 14 17 334 30 * This number reflects projects which may have been implemented under preceding grant years. The actual accomplishments of the on-ground reclamation are accessible in AMLIS. AMLIS provides the units of problem areas reclaimed for all work completed and is publicly available on the OSMRE website. The tables at the end of this report also provide specific information concerning the actual accomplishments. E.2. Emergency Program During EY 2017, OAMLR’s program investigated 280 citizen’s complaints, resulting in the declaration of 31 emergencies. All emergency projects were initiated in a timely manner, with most projects being abated within days or weeks of the Authorization to Proceed. The larger Page 76 Annual Evaluation Report – West Virginia 2017 projects, such as a coal seam fire project and three landslide projects, required a longer performance period to address the emergency aspects of the project. Evaluation Year EY 2017 EY 2016 EY 2015 EY 2014 EY 2013 EY 2012 EY 2011 EY 2010 E.3. Complaints Investigated 280 281 278 249 213 261 260 306 Emergency Declarations Issued 31 21 28 33 22 30 33 34 OAMLR Project Oversight During the evaluation year, the CHFO conducted oversight inspections of OAMLR reclamation projects in various stages of construction, including 36 site visits on 16 abandoned mine land reclamation projects during pre-bid, construction, post-construction operations, and projects that were deemed complete by OAMLR. Emergency projects that received CHFO oversight inspections this year were Mammoth (Shamblen) Landslide, Procious (Douthy) Landslide, Scotch Hill Underground Mine Fire Phase I, Scotch Hill Underground Mine Fire Phase II, Werth Landslide and Wingrove (Donaly) Airshaft. Non-emergency projects that received CHFO oversight inspections this EY were Camp Creek Portals, Crany Mine Dump, Layland Refuse, Lynnbrook (Boyd) Drainage, Morrisvale (Holstein) Drainage, Oldfield Branch, Red Warrior Drainage, Ridgeview (Dunlap) Portals, Stonecoal Enhancement Project, and Sugarcamp Run Refuse. Field review of the majority of the projects found the construction activities to be basically in compliance with the plans and specifications, and it appears that the OAMLR is attempting to continue to implement findings identified by CHFO in past AER’s. CHFO continues to find some inconsistencies between the project plans and the as-built configurations of several types of the structures incorporated into the reclamation plans. Of the 16 projects that were the subject of EY 2017 oversight, CHFO found issues on four of them. When issues of concern are documented during CHFO’s oversight, each issue is outlined in a transmittal correspondence to the OAMLR Chief when he is provided a copy of the oversight document. One of the projects, Crany Mine Dump, lacked proper erosion and sediment control measures along a site access roadway. A follow up inspection by CHFO at this site showed proper corrective measures were installed shortly after the initial inspection. Another, Red Warrior Drainage, contained a diversion channel which became unstable shortly after construction. OAMLR was aware of the situation, and was preparing corrective measures to be applied when favorable weather conditions would permit the work to be completed. The third project, Ridgeview (Dunlap) Page 77 Annual Evaluation Report – West Virginia 2017 Portals, contained two diversion channels that lacked the specified dimensions, and three mine seals that CHFO noted were not properly installed. These issues were repaired within a few days according to telephone correspondence from the project inspector to CHFO. Lastly, CHFO observed that the project contractor on the Sugarcamp Branch Burning Refuse II project had prepared an area of the site to obtain diversion channel stone by blasting methods. CHFO file review quickly found that the OAMLR inspector at the site had ceased this operation prior to blasting. CHFO continues to work with the OAMLR to address any issues found during our oversight process. OAMLR has responded positively to CHFO’s concerns outlined in last year’s AER which outlined two high volume releases of mine water during the dewatering process of mine seal installation. OAMLR continues to attempt the installation of piezometers in locations which give the most accurate mine pool elevations and water quality data possible. Also, horizontal boring methods are frequently being employed, when possible, to provide a more controlled mine pool dewatering option, in lieu of the traditional excavation of material at the mine entry. OAMLR has indicated that OSMRE field inspections provide a significant benefit toward staff development and the quality of reclamation projects. OAMLR continues to request an increase in the frequency of field reviews by OSMRE. E.4. OAMLR Enhancement 3.14 During EY 12, a work plan was developed and accepted by OAMLR for an oversight study on approved Abandoned Mine Land Enhancement and Refuse Removal projects included in Title 38 CSR 2 3.14 of the West Virginia Surface Coal Mining Regulations. The study is being conducted by CHFO in cooperation with the OAMLR. The evaluation is examining the State’s execution in carrying out its approved reclamation program by conducting comprehensive site and file reviews of these type reclamation projects. This study was not completed during this year and is expected to be completed during EY 2018. However, during EY 2017, the OAMLR did submit an ATP request for the Stonecoal AML Enhancement Project, located in Raleigh County, West Virginia. Although the findings of CHFO’s oversight study have not been officially completed, OAMLR worked closely with CHFO during the development of this project to ensure that the issues found in past enhancement projects were minimized. CHFO’s project oversights on this project, to date, have found only minimal discrepancies between what is required in the project plans and is what is being completed in the field. E.5. Project Maintenance Program Oversight During EY 17, a work plan was developed and accepted by OAMLR for an oversight study on their project maintenance program utilized to correct deficiencies found on AML project completed in past years. Included in this review will be an evaluation of the policy/procedures used by OAMLR to determine when maintenance is required and the course of action; Page 78 Annual Evaluation Report – West Virginia 2017 maintenance program planning, type of maintenance, funding, construction, inspection, procurement, and payment for services. This oversight will also include an analysis of whether or not maintenance projects should be subjected to updated NEPA reviews. This oversight is planned to be completed during EY 2018. This work plan can be viewed on OSMRE’s website at www.odocs.osmre.gov. F. OAMLR Program Problems and Issues There were no major program problems or issues identified in the OAMLR program during the past evaluation year. Page 79 Annual Evaluation Report – West Virginia 2017 Regulatory Tables Corrections for EY 2017 Reg-8 tables due to errors in EY 2016 Due to errors that discovered after certification of EY 2016 tables, the EY 2017 tables are being modified to correct cumulative values for future AERs. Table 6 bond releases and Table 7 bond forfeiture are being modified. The changes are listed below. Table 6 2016 2016 (Original) (adjusted) Total Acres Released in Approved Phase 1 Releases 1,156 1,156 Total Acres Released in Approved Phase 2 Releases 3,088 Acres Not Previously Released Under Phase 1 Differenc e 2017 2017 (actual) (adjusted) 0 2,214 2,214 3,750 662 3,797 4,459 107 823 716 1,006 1,722 Total Acres Released in Approved Phase 3 Releases 2,782 6,870 4,088 9,597 13,685 Acres Not Previously Released Under Phase 2 616 2,278 1,662 2,642 4,304 Acres Not Previously Released under Phase 1 or 2 329 608 279 1,946 2,225 Page 80 Annual Evaluation Report – West Virginia 2017 2016 2016 (Original) (adjusted) 309 313 Bond Forfeiture Difference 4 2016 (Original) (adjusted) 1,178 6,000 2017 (actual) (adjusted) 261 265 2017 2017 (actual) (adjusted) 4,196 9,018 284,200 284,200 Area Bonded for Disturbance for Which Phase 1 Bond Release Has Been Approved 17,774 16,932 Area Bonded for Disturbance for Which Phase 2 Bond Release Has Been Approved 12,438 4,679 5370 9,018 New Area Bonded for Disturbance 2016 2017 Difference 4,822 Area Bonded for Disturbance without Phase 1 Bond Release Disturbed Area 126,548 132,548 Table 7 2017 2017 Difference Total Sites Total Sites (revised) 2 275 273 (Original) Sites with bonds forfeited and collected that were reclaimed during Evaluation Year 2017 (current evaluation year) 8 10 Page 81 West Virginia EY 2017, ending June 30, 2017 TABLE 1 COAL PRODUCED FOR SALE , TRANSFER, OR USE A (Millions of short tons) Calendar Year Surface Mines Underground Mines Total 2013 34.6 76.9 111.5 2014 31.0 81.3 112.3 2015 21.1 74.4 95.5 2016 17.6 65.2 82.8 Coal production is the gross tonnage (short tons) and includes coal produced during the calendar year (CY) for sale, transfer or use. The coal produced in each CY quarter is reported by each mining company to OSM during the following quarter on line 8(a) of form OSM-1, "Coal Reclamation Fee Report." Gross tonnage does not provide for a moisture reduction. OSM verifies tonnage reported through routine auditing of mining companies. This production may vary from that reported by other sources due to varying methods of determining and reporting coal production. A West Virginia EY 2017, ending June 30, 2017 TABLE 1 COAL PRODUCED FOR SALE, TRANSFER, OR USE DURING THE CALENDAR YEAR (Millions of short tons) COAL PRODUCED FOR SALE , TRANSFER, OR USE A (Millions of short tons) Calendar Year Surface Mines Underground Mines Total 2013 34.6 76.9 111.5 2014 31.0 81.3 112.3 2015 21.1 74.4 95.5 2016 17.6 65.2 82.8 TABLE 1 Coal production is the gross tonnage (short tons) and includes coal produced during the calendar year (CY) for sale, transfer or use. The coal produced in each CY quarter is reported by each mining company to OSM during the following quarter on line 8(a) of form OSM-1, "Coal Reclamation Fee Report." Gross tonnage does not provide for a moisture reduction. OSM verifies tonnage reported through routine auditing of mining companies. This production may vary from that reported by other sources due to varying methods of determining and reporting coal production. A West Virginia EY 2017, ending June 30, 2017 TABLE 2 PERMANENT PROGRAM PERMITS, INITIAL PROGRAM SITES, INSPECTABLE UNITS, AND EXPLORATION Numbers of Permanent Program Permits and Initial Program Sites Permanent Program Permits Mines and Other Facilities Active Aban­ Inactive doned Area in Acres³ Permanent Program Permits (Permit Area) Initial Program Sites Total Active Inactive Aban­ doned Insp. Total Units¹ ² State/ Tribal and Private Lands Federal Lands Initial Program Sites State/ Tribal and Private Lands Total Area Federal Lands Surface Mines 419 182 175 776 0 0 10 10 786 0 256,835 0 744 257,579 Underground Mines 339 325 56 720 0 0 1 1 721 56 32,229 0 6 32,291 Other Facilities 345 144 42 531 0 0 2 2 533 0 53,730 0 11 53,741 1,103 651 273 2,027 0 0 13 13 2,040 56 342,794 0 761 343,611 Permanent Program Permits and Initial Program Sites (Number on Federal Lands: 2) Total Number: 2,040 Average Acres per Site: 168.44 Average Number of Permanent Program Permits and Initial Program Sites per Inspectable Unit (IU): Total Number: 1.00 Average Acres per IU: 168.44 Total Number: 131 Number More than 3 Years: 12 Total Permanent Program Permits in Temporary Cessation: EXPLORATION SITES Total Number of Sites Sites on Federal LandsϺ Exploration Inspectable Units Exploration Sites with Permits: 0 0 0 Exploration Sites with Notices: 157 0 0 ¹An Inspectable Unit may include multiple small and neighboring Permanent Program Permits or Initial Program Sites that have been grouped together as one Inspectable Unit, or conversely, an Inspectable Unit may be one of multiple Inspectable Units within a Permanent Program Permit. ²Total Inspectable Units calculation includes Exploration Sites Inspectable Units ³When a Permanent Program Permit or Initial Program Site contains both Federal and State and Private lands, the acreage for each type of land is in the applicable column. ϺThe number of Exploration Sites on Federal lands includes sites with exploration permits or notices any part of which is regulated by the state under a cooperative agreement or by OSM pursuant to the Federal Lands Program, but excludes exploration sites that are regulated by the Bureau of Land Management West Virginia EY 2017, ending June 30, 2017 CHART 2A HISTORICAL TRENDS NUMBER OF INITIAL PROGRAM SITES AND PERMANENT PROGRAM PERMITS TABLE 2A NUMBER OF INITIAL PROGRAM SITES AND PERMANENT PROGRAM PERMITS Permanent Program Permits Year Initial Program Sites Surface Mines Underground Mines Other Facilities Total 2014 14 792 764 535 2105 2015 13 793 764 539 2109 2016 13 795 753 530 2091 2017 13 776 720 531 2040 West Virginia EY 2017, ending June 30, 2017 CHART 2B HISTORICAL TRENDS AREA OF INITIAL PROGRAM SITES AND PERMANENT PROGRAM PERMITS TABLE 2B AREA OF INITIAL PROGRAM SITES AND PERMANENT PROGRAM PERMITS Permanent Program Permits Year Initial Program Sites Surface Mines Underground Mines Other Facilities Total 2014 853.0 277304.0 33276.0 50466.0 361899.0 2015 761.0 277725.0 33023.0 51792.0 363301.0 2016 761.0 255724.0 32115.0 51308.0 339908.0 2017 761.0 256835.0 32285.0 53730.0 343611.0 West Virginia EY 2017, ending June 30, 2017 TABLE 3 PERMITS ALLOWING SPECIAL CATEGORIES OF MINING Numbers of Permits Special Category of Mining 30 CFR Citation Defining Permits Allowing Special Mining Practices Issued During EY Total Active and Inactive Permits Experimental Practice 785.13(d) 0 0 Mountaintop Removal Mining 785.14(c)(5) 0 182 Steep Slope Mining 785.15(c) 0 124 785.16(b)(2) 3 32 Prime Farmlands Historically Used for Cropland 785.17(e) 0 0 Contemporaneous Reclamation Variances 785.18(c)(9) 28 153 Mining on or Adjacent to Alluvial Valley Floors 785.19(e)(2) 0 0 Auger Mining 785.20(c) 0 267 Coal Preparation Plants Not Located at a Mine Site 785.21(c) 0 0 In-Situ Processing 785.22(c) 0 0 Remining 773.15(m) and 785.25 0 7 Activities in or Within 100 Feet of a Perennial or Intermittent Stream 780.28(d) and/or (e) 784.28(d) and/or (e) 1 923 AOC Variances for Steep Slope Mining West Virginia EY 2017, ending June 30, 2017 CHART 3A HISTORICAL TRENDS PERMITS ALLOWING SPECIAL CATEGORIES OF MINING TABLE 3A NUMBER OF PERMITS ISSUED AND REVISIONS APPROVED Year Experimental Mountaintop Practices Removal Mining Steep Slope Mining Steep Slope Variances Prime Farmlands 2014 0 1 7 0 0 2015 0 0 2 0 0 2016 0 0 3 0 0 2017 0 0 0 3 0 West Virginia EY 2017, ending June 30, 2017 CHART 3B HISTORICAL TRENDS PERMITS ALLOWING SPECIAL CATEGORIES OF MINING TABLE 3B NUMBER OF PERMITS ISSUED AND REVISIONS APPROVED Preparatio In-Situ Perennial/ n Plants Operation Remining Intermittent Not at s Streams Mine Site Year Contemporaneo us Reclamation Variances AVF Mining Auger Mining 2014 4 0 12 0 0 1 40 2015 3 0 8 0 0 0 30 2016 1 0 5 0 0 0 15 2017 28 0 0 0 0 0 1 West Virginia EY 2017, ending June 30, 2017 TABLE 4 PERMITTING ACTIVITY Surface Mines Type of Application App. Rec. Issued/ Appvd 7 6 Renewals 100 Transfers, sales, and assignments of permit rights Small operator assistance New Permits Underground Mines Acres 1,345 App. Rec. Issued/ Appvd 8 7 68 102 77 73 0 0 Other Facilities Acres¹ 155 App. Rec. Issued/ Appvd 7 5 68 102 0 48 0 0 Totals App. Rec. Acres 438 Issued/ Appvd 22 18 70 304 206 0 49 77 170 0 0 0 0 0 0 Exploration permits Exploration notices² Revisions that do not add acreage to the permit area 161 Revisions that add acreage to the permit area but are not incidental boundary revisions 8 3 Incidental boundary revisions 92 Totals 457 108 102 197 0 10 75 (1,973) 90 386 (431) 308 Permits terminated for failure to initiate operations: 65 60 346 323 36 0 4 573 8 17 806 52 13 60 43 381 242 170 (1,579) 287 204 234 231 1,392 999 945 1,165 Number: 0 Acres: 0.0 Acres: 13,685.0 Terminations: 0 Acres of Phase III bond releases (Areas no longer considered to be disturbed): Midterm permit reviews completed 1,938 41 173 Permits in temporary cessation Acres Notices received: 131 Number: 240 ¹Includes only the number of acres of proposed surface disturbance ²State approval not required. Involves removal of less than 250 tons of coal and does not affect lands designated unsuitable for mining. West Virginia EY 2017, ending June 30, 2017 CHART 4A HISTORICAL TRENDS NEW PERMITS ISSUED TABLE 4A NEW PERMITS ISSUED Year Surface Mines Underground Mines Other Total 2014 22 29 8 59 2015 16 9 9 34 2016 1 1 0 2 2017 6 7 5 18 West Virginia EY 2017, ending June 30, 2017 CHART 4B HISTORICAL TRENDS NEW ACREAGE PERMITTED TABLE 4B NEW ACREAGE PERMITTED Year Surface Mines Underground Mines Other Total 2014 2799.0 4851.0 603.0 8253.0 2015 3496.0 225.0 1666.0 5387.0 2016 771.0 272.0 135.0 1178.0 2017 (431.0) 204.0 1392.0 1165.0 West Virginia EY 2017, ending June 30, 2017 TABLE 5 OFF-SITE IMPACTS EXCLUDING BOND FORFEITURE SITES RESOURCES AFFECTED DEGREE OF IMPACT TYPE OF IMPACT EVENT People Land Minor Moderate Major Minor Water Moderate Major Minor Structures Moderate Major Minor Moderate Major NUMBER OF EVENTS Blasting 4 0 0 0 1 3 0 0 0 0 0 0 0 Land Stability 29 0 0 0 18 10 0 1 0 0 0 0 0 Hydrology 155 0 0 0 9 1 0 81 62 2 0 0 0 Encroachment 36 10 7 0 6 10 2 0 1 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 0 0 0 0 Total 224 10 7 0 34 24 2 82 63 2 0 0 0 % of Inspectable Units free of off-site impactsϺ: 93 Total Number of Inspectable Units¹: 1866 Inspectable Units with one or more off-site impacts: 136 Exploration Inspectable Units with one or more off-site impacts²: Inspectable Units free of off-site impacts: 1 1730 ¹ Total number of Inspectable Units is (1) the number of active and inactive inspectable units at the end of the Evaluation Year and (2) the number of Inspectable Units that were final bond released or removed during the Evaluation Year ² Exploration Inspectable Units with one or more off-site impacts is a subset of Inspectable Units with one or more off-site impacts OFF-SITE IMPACTS AT BOND FORFEITURE SITES RESOURCES AFFECTED DEGREE OF IMPACT People Minor Land Moderate Major Minor Water Moderate Major Minor Structures Moderate Major Minor Moderate Major TYPE OF IMPACT EVENT NUMBER OF EVENTS Blasting 0 0 0 0 0 0 0 0 0 0 0 0 0 Land Stability 5 0 0 3 1 1 0 0 0 0 0 0 0 Hydrology 34 0 0 0 0 0 0 14 8 12 0 0 0 Encroachment 2 0 0 0 2 0 0 0 0 0 0 0 0 Other 3 0 0 1 1 0 0 1 0 0 0 0 0 Total 44 0 0 4 4 1 0 15 8 12 0 0 0 % of Inspectable Units free of off-site impactsϺ: 84 Total Number of Inspectable Units³: Inspectable Units with one or more off-site impacts: Inspectable Units free of off-site impacts: 275 44 231 ³ Total number of Inspectable Units is (1) the number of bond forfeiture sites that were reclaimed during the Evaluation Year and (2) the number of bond forfeiture sites that were unreclaimed at the end of the Evaluation Year West Virginia EY 2017, ending June 30, 2017 TABLE 5 (Continued) TOTAL OFF-SITE IMPACTS INCLUDING BOND FORFEITURE SITES RESOURCES AFFECTED DEGREE OF IMPACT People Minor Land Moderate Major Minor Water Moderate Major Minor Structures Moderate Major Minor Moderate Major TYPE OF IMPACT EVENT NUMBER OF EVENTS Blasting 4 0 0 0 1 3 0 0 0 0 0 0 0 Land Stability 34 0 0 3 19 11 0 1 0 0 0 0 0 Hydrology 189 0 0 0 9 1 0 95 70 14 0 0 0 Encroachment 38 10 7 0 8 10 2 0 1 0 0 0 0 Other 3 0 0 1 1 0 0 1 0 0 0 0 0 Total 268 10 7 4 38 25 2 97 71 14 0 0 0 % of Inspectable Units free of off-site impactsϺ: 92 Total Number of Inspectable Unitsϻ: Inspectable Units with one or more off-site impacts: Exploration Inspectable Units with one or more off-site impacts: Inspectable Units free of off-site impacts: 2141 180 1 1961 Ϻ % of Inspectable Units free of off-site impacts is based on the number of Inspectable Units during the Evaluation Year. The number of Inspectable Units may vary during the Evaluation Year. ϻ Total number of Inspectable Units is (1) the number of active and inactive Inspectable Units at the end of the Evaluation Year and (2) the number of Inspectable Units that were final bond released or removed during the Evaluation Year and (3) the number bond forefeiture sites that were reclaimed during the Evaluation Year and (4) the number of bond forfeiture sites that were unreclaimed at the end of the Evaluation Year. West Virginia EY 2017, ending June 30, 2017 CHART 5A HISTORICAL TRENDS PERCENT OF INSPECTABLE UNITS FREE OF OFF-SITE IMPACTS TABLE 5A PERCENT OF INSPECTABLE UNITS FREE OF OFF-SITE IMPACTS Year Initial Program and Permanent Program Permits Bond Forfeiture Sites 2014 87.8 81.7 2015 88.9 87.8 2016 92.7 83.7 2017 92.7 84.0 West Virginia EY 2017, ending June 30, 2017 CHART 6A HISTORICAL TRENDS ACRES OF PHASE I, II, AND III BOND RELEASES TABLE 6A ACRES OF PHASE I, II, AND III BOND RELEASES Year Phase III Phase II Phase I 2017 13685 8763 6161 West Virginia EY 2017, ending June 30, 2017 CHART 6B HISTORICAL TRENDS ACRES BONDED FOR DISTURBANCE AND DISTURBED AREA TABLE 6B AREAS BONDED FOR DISTURBANCE AND DISTURBED AREA ACRES BONDED FOR DISTURBANCE Year Unreleased Phase I Released Phase II Released Total Bonded Area Disturbed Area 2017 311053.0 16932.0 4679 347740.0 137071.0 West Virginia * Numbers within Parenthese are Actual EY2017 Numbers EY 2017, ending June 30, 2017 TABLE 6 SURFACE COAL MINING AND RECLAMATION ACTIVITY Areas of Phase I, II, and III Bond Releases During the Evaluation Year (EY) Phase I Releases Total Acres Released in Approved Phase I Releases Phase II Releases Total Acres Released in Approved Phase II Releases 2,214 Phase III Releases Acres not previously released under Phase I Total Acres Released in Approved Phase III Releases Acres not previously released under Phase II 1,722(1006) Acres not previously released under Phase I or II Total Acres Released During the EY 2,225(1,946) 4,459(3797) 4,304(2,642) 13,685(9,597) Phase I 6,161(5,166) Phase II 8,763(6,439) Phase III 13,685(9,597) Number of Permanent Program Permits with Jurisdiction Terminated Under Phase III Bond Release During the Evaluation Year 91 Initial Program Sites with Jurisdiction Terminated During the Evaluation Year 0 Administrative Adjustments 2047 Number of Inspectable Units Removed 91 Bond Forfeiture 265(261) Other Releases - Acres Areas of Permits Bonded for Disturbance by Surface Coal Mining and Reclamation Operations Total Acres at Start of EY Total Acres at Change in Acres End of EY During EY New Area Bonded for Disturbance 9,018(4,196) Total Area Bonded for Disturbance 354,454 347,740(347,006) Area Bonded for Disturbance without Phase I Bond Release 311,373 284,200 Area Bonded for Disturbance for which Phase I Bond Release Has Been Approved 17,697 16,932(17,774) 765(77) Area Bonded for Disturbance for which Phase II Bond Release Has Been Approved 10,585 4,679(12,438) 5,906(1,853) Area Bonded for Disturbance with Bonds Forfeited During Evaluation Year 6,714(7,448) 27,173 0 Area Bonded for Remining 0 0 0 Areas of Permits Disturbed by Surface Coal Mining and Reclamation Operations Disturbed Area 128,053(126,548) 137,071(133,423) * Numbers within Parenthese are Actual EY2017 Numbers 9,018(5,370) West Virginia EY 2017, ending June 30, 2017 TABLE 7 BOND FORFEITURE ACTIVITY (Permanent Program Permits) Bond Forfeiture and Reclamation Activity Number of Sites Dollars Acres Sites with bonds forfeited and collected that were un-reclaimed at the start of the current Evaluation Year (i.e, end of previous Evaluation Year) ¹ 275 Sites with bonds forfeited and collected during the current Evaluation Year 0 Sites with bonds forfeited and collected that were re-permitted during the current Evaluation Year 0 0 Sites with bonds forfeited and collected that were reclaimed during the current Evaluation Year 10(8) 265 Sites with bonds forfeited and collected that were un-reclaimed at the end of the current Evaluation Year ¹ 265 23,553 1 35 Sites with bonds forfeited but un-collected at the end of the current Evaluation Year 23,818 0 0 Forfeiture Sites with Long-Term Water Pollution Bonds forfeited, lands reclaimed, but water pollution is still occuring Bonds forfeited, lands reclaimed, and water treatment is ongoing 88 133 Surety/Other Reclamation Activity In Lieu of Forfeiture Sites being reclaimed by surety/other party at the start of the current Evaluation Year (i.e., the end of previous Evaluation Year) ² 2 4 Sites where surety/other party agreed during the current Evaluation Year to do reclamation 0 0 Sites being reclaimed by surety/other party that were re-permitted during the current Evaluation Year 0 0 Sites with reclamation completed by surety/other party during the current Evaluation Year ³ 0 0 Sites being reclaimed by surety/other party at the end of the current Evaluation Year ² 2 4 ¹ Includes data only for those forfeiture sites not fully reclaimed. ² Includes all sites where surety or other party has agreed to complete reclamation and the site is not fully reclaimed. ³ These sites are also reported in Table 6, Surface Coal Mining and Reclamation Activity, because Phase III bond release would be granted on these sites. West Virginia EY 2017, ending June 30, 2017 CHART 7A HISTORICAL TRENDS NUMBER OF BOND FORFEITURE SITES TABLE 7A NUMBER OF BOND FORFEITURE SITES Year Bond Forfeiture Sites 2014 6 2015 14 2016 17 2017 1 West Virginia EY 2017, ending June 30, 2017 CHART 7B HISTORICAL TRENDS ACREAGE OF BOND FORFEITURE SITES TABLE 7B ACREAGE OF BOND FORFEITURE SITES Year Acres 2014 753 2015 1576 2016 2966 2017 35 West Virginia EY 2017, ending June 30, 2017 CHART 7C HISTORICAL TRENDS NUMBER OF SITES WITH WATER POLLUTION STILL OCCURRING TABLE 7C NUMBER OF SITES WITH WATER POLLUTION STILL OCCURRING Year Sites 2014 52 2015 56 2016 158 2017 88 West Virginia EY 2017, ending June 30, 2017 CHART 7D HISTORICAL TRENDS NUMBER OF SITES WITH WATER TREATMENT ONGOING TABLE 7D NUMBER OF SITES WITH WATER TREATMENT ONGOING Year Sites 2014 127 2015 145 2016 60 2017 133 West Virginia EY 2017, ending June 30, 2017 TABLE 8 REGULATORY AND AML PROGRAMS STAFFING Function Number of FTEs Regulatory Program Permit Review and Maintenance 51.50 Inspection 67.65 Other (supervisory, clerical, administrative, fiscal, personnel, etc.) 95.63 Regulatory Program Total 214.78 AML Program Total 55.00 TOTAL 269.78 West Virginia EY 2017, ending June 30, 2017 CHART 8A HISTORICAL TRENDS REGULATORY AND AML PROGRAMS STAFFING TABLE 8A REGULATORY AND AML PROGRAMS STAFFING Regulatory Program Year Permitting Inspection Admin Total AML Program 2014 63 75 116 253 59 2015 60 74 112 246 57 2016 59 70 105 234 56 2017 52 68 96 215 55 West Virginia EY 2017, ending June 30, 2017 TABLE 9 FUNDS GRANTED TO STATE OR TRIBE BY OSM (Actual Dollars Rounded to the Nearest Dollar) Type of Funding Federal Funds Awarded Total Program Cost Federal Funds Awarded as a Percentage of Total Progam Costs 50 Regulatory Funding Administration and Enforcement Grant 11,696,446 Other Regulatory Funding, if applicable 0 Subtotal (Regulatory Funding) 11,696,446 23,392,892 0 0 Abandoned Mine Land Reclamation Funding 23,750,487 23,750,487 100 Watershed Cooperative Agreement Program 114,000 355,837 32 TOTAL 35,560,933 Small Operator Assistance Program Grant Funding West Virginia EY 2017, ending June 30, 2017 CHART 9A HISTORICAL TRENDS FUNDS GRANTED TO STATE OR TRIBE BY OSM TABLE 9A FUNDS GRANTED TO STATE OR TRIBE BY OSM Year Regulatory Program SOAP AML Program Total 2014 12,900,405 0 53,355,079 66,473,276 2015 12,500,570 0 31,224,960 43,825,530 2016 12,148,586 0 30,107,822 42,594,279 2017 11,696,446 0 23,750,487 35,560,933 West Virginia EY 2017, ending June 30, 2017 TABLE 10 STATE INSPECTION ACTIVITY INSPECTABLE UNITS FOR WHICH STATE MET REQUIRED INSPECTION FREQUENCY ON AN INSPECTABLE UNIT-BY-INSPECTABLE UNIT BASIS ¹ Inspectable Units (IUs) Total number of inspectable units ² Number of inspections required annually Number of inspections conducted IUs Met Complete Inspection Frequency Requirement IUs Met Partial Inspection Frequency Requirement Complete inspections Partial inspections Complete inspections Partial inspections Number Percent Number IUs Met Complete and Partial Inspection Frequency Requirements Percent Total number of IUs Number that met inspection frequency Percent COAL MINES AND FACILITIES Active 1031 4124 8248 4204 10035 958 93 655 64 1031 646 63 Inactive 686 2744 0 2677 1296 571 83 686 100 686 529 77 Abandoned 273 273 0 1039 3255 273 100 273 100 273 273 100 TOTALS ³ 1990 7141 8248 7920 14586 1802 91 1614 81 1990 1448 73 Coal Exploration Activities Ϻ Complete Inspections Partial Inspections Exploration sites with permits 0 0 Exploration sites with notices 53 20 ¹ Caculated on a site-specific basis. ² Total number includes both permanent program permits and initial program sites. ³ OSM is assuming that all states have gone through the process described in 30 CFR 840.11(h) and 842.11(f) to reduce inspection frequency on abandoned/forfeited sites Ϻ Includes all valid notices and permits. No inspection frequency data are provided since SMCRA does not establish a minimum numerical inspection frequency for coal exploration activities. ϻ NA - Not Available West Virginia EY 2017, ending June 30, 2017 CHART 10A HISTORICAL TRENDS STATE OR TRIBAL INSPECTION ACTIVITY TABLE 10A STATE OR TRIBAL INSPECTION ACTIVITY Year Inspections Conducted Exploration Inspections 2014 25700 0 2015 25836 127 2016 24433 0 2017 22506 73 West Virginia EY 2017, ending June 30, 2017 TABLE 11 STATE OR TRIBAL ENFORCEMENT ACTIVITY Type of Enforcement Action Number of Actions ¹ Number of Violations ¹ Notice of Violation 667 667 Failure-to-Abate Cessation Order 50 50 Imminent Harm Cessation Order 22 22 ¹ Does not include actions and violations that were vacated. West Virginia EY 2017, ending June 30, 2017 CHART 11A HISTORICAL TRENDS STATE OR TRIBAL ENFORCEMENT ACTIVITY TABLE 11A STATE OR TRIBAL ENFORCEMENT ACTIVITY Year Notices of Violation Violations FTA Cessation Orders Imminent Harm Cessation Orders 2014 757 757 67 11 2015 718 718 83 7 2016 652 652 63 32 2017 667 667 50 22 West Virginia EY 2017, ending June 30, 2017 TABLE 12 LANDS UNSUITABLE ACTIVITY Activity Number Acres Petitions Received 0 Petitions Rejected 0 Petitions Accepted 0 Decisions Denying Petition 0 Decisions Declaring Lands Unsuitable 0 0 Decisions Terminating Unsuitable Designations 0 0 West Virginia EY 2017, ending June 30, 2017 CHART 12A HISTORICAL TRENDS LANDS UNSUITABLE ACTIVITY TABLE 12A LANDS UNSUITABLE ACTIVITY Year Petitions Received Petitions Rejected Unsuitability Declarations 2014 0 0 0 2015 0 0 0 2016 0 0 0 2017 0 0 0 West Virginia EY 2017, ending June 30, 2017 CHART 12B HISTORICAL TRENDS ACRES DECLARED UNSUITABLE TABLE 12B ACRES DECLARED UNSUITABLE Year Acres Declared Unsuitable 2014 0.0 2015 0.0 2016 0.0 2017 0.0 West Virginia EY 2017, ending June 30, 2017 TABLE 13 OSM OVERSIGHT ACTIVITY Oversight Inspections and Site Visits Complete Oversight Inspections Site Visits Partial Joint Non-Joint Joint Non-Joint Total 47 14 186 92 339 Technical Assistance Other Total 0 10 10 Violations Observed by OSM and Citizen Requests for Inspection¹ Type of Action Total number of each action How many violations were observed by OSM on oversight inspections? 97 Of the violations observed, how many did OSM defer to State action during inspections? 80 Of the violations observed, how many did OSM refer to the State through Ten-Day Notices? ² 2 How many Ten-Day Notices did OSM Issue for observed violations? ³ 2 How many Ten-Day Notices did OSM issue to refer citizen requests for inspection? 6 How many Notices of Violation did OSM issue? 0 How many Failure-to-Abate Cessation Orders did OSM issue? 0 How many Imminent Harm Cessation Orders did OSM issue? 0 OSM Action for Delinquent Reporting or Non-Payment of Federal AML Reclamation Fees How many Ten-Day Notices for delinquent reporting or non-payment of Federal AML reclamation fees did OSM issue? 0 How many Notices of Violation for delinquent reporting or non-payment of Federal AML reclamation fees did OSM issue? 0 How many Federal Failure-to-Abate Cessation Orders for delinquent reporting or non­ payment of Federal AML reclamation fees did OSM issue? 0 ¹ This section does not include actions for delinquent reporting or non-payment of Federal AML fees that are reported in the last section of the table. ² Number of violations contained in Ten-Day Notices not including those issued to refer citizen requests for inspection. ³ Number of Ten-Day Notices issued not including those to refer citizen requests for inspection. West Virginia EY 2017, ending June 30, 2017 CHART 13A HISTORICAL TRENDS OSM OVERSIGHT ACTIVITY TABLE 13A OSM OVERSIGHT ACTIVITY Year Number of Number Number of violations of violations observed on violations referred to OSM deferred state by oversight to state TDN inspecction action s Number of TDN's issued Number of Number of TDN's Federal issued to NOVs, refer FTACOs, & reqeuests IHCOs for issued inspection Number of oversight inspections 2014 96 59 16 6 10 0 257 2015 133 64 10 6 10 2 346 2016 48 29 8 3 7 0 350 2017 97 80 2 2 6 0 339 West Virginia EY 2017, ending June 30, 2017 TABLE 14 STATUS OF ACTION PLANS Action Plan ID 440 Problem Type¹ RP Problem Title WV-2013-001 Impoundment Breakthrough Potential Problem Description State files do not always contain information demonstrating the risk of the impounded slurry breaking through into underground works has been properly evaluated and addressed. See oversight report entitled "Coal Slurry Impoundment Breakthrough Poten ¹ Problem Type: "PA" indicates a required Program change under subchapter T or 732 "RP" indicates a Regulatory Program implementation or administrative problem Date Action Plan Initiated Scheduled Completion Date Actual Completion Date 01/10/2013 1/10/2017 08/22/2017 West Virginia EY 2017, ending June 30, 2017 TABLE 15 (Optional) POST-MINING LAND USE ACREAGE OF SITES FULLY RECLAIMED (Phase III bond release or termination of jurisdiction under the Initial Program) Land Use¹ Acres Released Cropland Pasture/Hayland 0.00 531.67 Grazingland Forestry 0.00 769.03 Residential 0.00 Industrial/Commercial 21.64 Recreation 0.00 Fish & Wildlife Habitat 2,818.00 Developed Water Resources 0.00 Undeveloped land or no current use or land management 0.00 Other - Public Utilities 0.00 Other - 0.00 Other - 0.00 Other - 0.00 Other - 0.00 Other - 0.00 Other - 0.00 Other - 0.00 Sub-Total Other 0.00 Total ¹ 4,140.34 Land uses as defined in 30 CFR 701.5 or "Other" as defined under the state or tribal program West Virginia EY 2017, ending June 30, 2017 CHART 15A HISTORICAL TRENDS POST MINING LAND USE ACREAGES TABLE 15A POST MINING LAND USE ACREAGES Year Cropland Pasture Hay Grazing Land Forest Resi­ dential Industrial Comm. Rec­ reation F&W Hab. Water Re­ sources Un­ developed Other 2014 0 0 0 0 0 0 0 0 0 0 0 2015 0 0 0 0 0 0 0 0 0 0 0 2016 0 0 0 0 0 0 0 0 0 0 0 2017 0 532 0 769 0 22 0 2818 0 0 0 Table 1 – (State/Tribe) Status of AML Inventory all Priority 1, 2, and 3 Hazards on June 30, 2017 High Priority Priority 1 Stand-Alone Priority 3 Elevated Priority 3 Priority 2 (Not adjacent or in conjunction w/ P1&2) Total UNFUNDED GPRA Acres Dollars GPRA Acres Dollars 5,715.63 60,189,069.85 77,184.22 N/A 886,814,916.36 N/A FUNDED 21.25 8,138.11 422.80 2,025,238.98 65,837,841.17 909,823.00 52,939.37 547,511,020.35 161.69 135,839.22 1,494,515,006.56 8,743.85 708,596.00 69,481,499.15 204,174.27 356,803.02 COMPLETED GPRA Acres Dollars 31,692.84 176,557,142.91 120,640.46 295.46 471,722,569.51 2,072,511.00 17,707,347.65 668,059,571.07 UNRECLAIMED/REMAINING HAZARDS (Unfunded) 5,168.15 1,976,284.00 931.00 Units 5,886.12 157.50 GPRA Acres 29,409.20 296.70 5,167.30 34,147.31 4,660.00 13,486,565.00 2,763,351.00 55,824,663.00 379,787,732.48 22,087,919.47 Dollars Units 0.10 GPRA Acres 0.50 Dollars Units GPRA Acres Dollars 70.48 172.65 Hazardous Water Body (HWB) (count) Hazardous Equip. /Facilities (HEF) (count) Gases: Hazardous /Explosive (GHE) (count) 420.09 2.00 556.00 22.00 408.64 2.00 59.90 110.00 26,758,724.00 260,000.00 8,030,997.00 461,539.00 ANNUAL RECLAMATION - EY2017 only (Completed) 9,600.00 60.00 8.00 16.50 6.00 137.10 16.50 0.60 342,892.13 1,775,438.00 1,023,930.85 1,115,161.71 HISTORICAL RECLAMATION - EY1978 - 2017 (Completed) 5,502.02 384,779.90 1,843.00 681.03 16,000.00 8.00 50,000.00 Dangerous Slide (DS) (acres) Dangerous Impoundment (DI) (count) Dangerous Highwall (DH) (feet) Dangerous Pile or Embankment (DPE)(acres) Clogged Stream (CS) (miles) Clogged Stream Lands (CSL) (acres) Table 2 - (State/Tribe) Accomplishments in Eliminating Health and Safety Hazards Related to Past Mining Priority 1 and 2 Hazards (As of July 1, 2017) 300.00 335.07 175.10 5,501.82 5,497.01 9,215.00 19,103,637.00 6,456,784.00 144,933,494.16 58,676,401.85 48,751,358.28 Table 2 Continued On Next Page 679.83 10.80 10.80 56,117,685.74 438,670.56 745.80 29.30 74.68 145.00 9,749,739.00 899,587.00 TOTAL Vertical Opening (VO) (count) Underground Mine Fire (UMF) (acres) Surface Burning (SB) (acres) Subsidence (S) (acres) Polluted Water: Human Consumption (PWHC)(count) Polluted Water:Agri/Industrial (PWAI)(count) Portal (P) (count) Industrial/Residential Waste (IRW) (acres) Table 2 - (State/Tribe) Accomplishments in Eliminating Health and Safety Hazards Related to Past Mining Priority 1 and 2 Hazards (As of July 1, 2017) UNRECLAIMED/REMAINING HAZARDS (Unfunded) Units 7 2048.1 154.8 1004 761.4 98.31 1970.7 152 N/A GPRA Acres 7 209.7 771.5 5020 760.7 98.3 1970.7 15.2 Dollars 49356 25472227.3 64506644 54931408 60263305 6857821 222272325 ANNUAL RECLAMATION - EY2017 only (Completed) $83,114.15 5024512 $948,839,089.21 Units 18 9 2.4 5 GPRA Acres 1.8 45 2.4 5 0.8 $517.70 142489.93 214080.16 208049.25 HISTORICAL RECLAMATION - EY1978 - 2017 (Completed) 115695.13 $5,247,737.16 Dollars 244000 8 N/A Units 44.10001 3380 90.9 25738 600.53 536.05 34.3 206.4 N/A GPRA Acres 43.80001 338 448.5 128690 589.11 534.65 34.3 20.63 Dollars 649022 35827484.8 15247471.6 159624512 57380270.6 $152,333.30 26817138 2315209.66 5291246.15 $648,279,712.42 Mine Opening (MO) (count) Pit, Open Pit, Strip Pit (PI) (acres) Spoil, Spoil Bank (SA) (acres) Gob (GO) (acres) Highwall (H) (feet) Haul Road (HR) (acres) PROBLEM TYPE (keyword) Equipment and Facilities (EF) (count) Industrial/Residential Waste Dump (DP) (acres) Bench , Solid Bench, Fill Bench (BE) (acres) Table 3 - (State/Tribe) Accomplishments in Eliminating Environmental Problems Related to Past Mining Priority 3 and SMCRA section 403(b) Hazards (As of July 1, 2017) 100 51.3 1184.5 UNRECLAIMED/REMAINING HAZARDS (Unfunded) Units GPRA Acres Dollars 192.3 44.25 192.3 44.15 756,901.00 95 1,285.71 3,454,396.00 13.5 9.5 1,284.21 49,358.55 13 10 51.3 1184 213,581.00 597,458.00 13,713,825.00 537,679,822.84 306,501.00 1,108,315.00 308,242.00 7,421,023.85 ANNUAL RECLAMATION - EY2017 only (Completed) Units 4.25 1 920 2 GPRA Acres 4.25 1 13.1 2 Dollars Units GPRA Acres Dollars 35000 39.5 39 140,866.00 33.55 13246 25000 HISTORICAL RECLAMATION - EY1978 - 2017 (Completed) 17 33.55 1.7 239,833.00 90,416.00 130000 138.26 53,248.00 11 13 6 394.1 136.76 760.65 11 1.3 6 394.1 2,140,234.00 6,637,087.00 107,234.00 114,215.00 40,000.00 Table 3 Continued On Next Page 2798844 Water Supplies (WS) – Section 403(b) (count) Table 3 - (State/Tribe) Accomplishments in Eliminating Environmental Problems Related to Past Mining Priority 3 and SMCRA section 403(b) Hazards (As of July 1, 2017) TOTAL Other (specify) Water (WA) (gallons) Slump (SP) (acres) Slurry (SL) (acres) Spoil, Spoil Bank (SA) (acres) PROBLEM TYPE (keyword) UNRECLAIMED/REMAINING HAZARDS (Unfunded) 1184.5 10 50.16 15,182.70 153 N/A 1184 10 50.06 4,115.53 0 7,421,023.85 12,001.00 56322.6 587,471,507.69 3,884,674.00 20,130,914.00 1,338,249.00 ANNUAL RECLAMATION - EY2017 only (Completed) 2 2 130000 394.1 394.1 94431 N/A 94431 94451.35 254216.08 HISTORICAL RECLAMATION - EY1978 - 2017 (Completed) 2 2 2798844 40,000.00 3.36 203,682.40 457462.08 0 N/A 3.36 203,080.40 0 204469.82 104,405.00 7,351,724.65 0 19,804,858.65 Table 4 – (State/Tribe) Public Well-Being Enhancement (All Priority 1, 2, and 3 AML projects completed during EY 2017) # PAD Number Project Name Problem Type(s) Reclaimed GPRA Acres Number of People with Reduced Exposure Potential (State Estimated /or/ Census Data) Cost 1 WV006800 Beckley (Busy Bee) Subsidence S 0.25 $64,680.00 8.00 2 WV006780 Bennetts Run Road (Jordan) Subsidence S 0.10 $4,500.00 174.00 3 WV006606 Bethlehem (Rose) Subsidence I S 0.10 $5,900.00 469.00 4 WV006606 Bethlehem (Rose) Subsidence II S 0.10 $11,250.00 469.00 5 WV001141 Beulah Chapel Portals DH 6.40 $50,000.00 971.00 6 WV001141 Beulah Chapel Portals DI 5.00 $30,000.00 7 WV001141 Beulah Chapel Portals GO 1.00 $13,246.00 8 WV001141 Beulah Chapel Portals P 0.60 $120,000.00 9 WV001535 Bishop Portals DI 50.00 $100,000.00 10 WV001535 Bishop Portals DPE 1.00 $12,000.00 11 WV001535 Bishop Portals VO 0.10 $7,463.38 12 WV005810 Bretz (Methany) Mine Drainage CS 0.50 $50,000.00 13 WV005810 Bretz (Methany) Mine Drainage DPE 1.00 $5,000.00 14 WV005810 Bretz (Methany) Mine Drainage H 13.10 $25,000.00 15 WV004521 Colliers (Thompson) Vertical Opening VO 0.10 $6,050.00 16 WV006775 Dans Branch (Fletcher) Landslide DS 1.00 $403,958.97 7.00 17 WV002190 Donnie Thorn Highwall DH 80.00 $1,226,705.00 450.00 18 WV002190 Donnie Thorn Highwall DI 105.00 $150,000.00 19 WV002190 Donnie Thorn Highwall DP 0.25 $10,000.00 20 WV002190 Donnie Thorn Highwall P 0.10 $12,000.00 21 WV003960 Ebenezer Run Highwall #9 DH 45.70 $398,733.00 1,431.00 22 WV006806 Enterprise (Saas) Subsidence S 0.10 $9,400.00 469.00 23 WV006537 Everettville (Rt 45/12) Subsidence II S 0.10 $2,650.00 397.00 24 WV006784 Fairmont (Windmill Park) Subsidence S 0.50 $6,400.00 1,981.00 25 WV006769 Glen Falls (Matheny) VO VO 0.10 $9,266.00 519.00 26 WV006479 Haywood Power Station Subsidence III S 0.10 $9,900.00 396.00 27 WV006631 Hepzibah (McDaniel) Subsidence II S 0.10 $15,700.00 519.00 28 WV001744 Hopewell Church Refuse & Drainage DI 25.00 $317,897.25 450.00 29 WV001744 Hopewell Church Refuse & Drainage DPE 2.00 $150,000.00 30 WV006790 Jack Run (Matheny) VOs VO 0.50 $92,915.75 519.00 31 WV006276 Junior (Rt. 250) Subsidence II S 0.10 $11,050.00 529.00 32 WV006782 Limestone Run (Gum) Subsidence S 0.10 $21,150.00 80.00 33 WV006506 Lodgeville (Poe) DS DS 0.50 $149,146.74 519.00 34 WV006799 MacArthur (Brush) Subsidence II S 0.25 $8,522.34 8.00 35 WV006827 Manley Chapel (Chips) Subsidence S 0.10 $9,516.32 1,004.00 36 WV006647 Music Valley Road (Brown) Subsidence II S 0.10 $4,688.00 519.00 37 WV001200 Parker Run DH 5.00 $100,000.00 584.00 38 WV001200 Parker Run DI 10.00 $60,000.00 39 WV001200 Parker Run DP 4.00 $25,000.00 40 WV001200 Parker Run DPE 4.00 $175,892.13 41 WV001200 Parker Run HEF 0.20 $12,000.00 42 WV001200 Parker Run P 0.90 $100,000.00 43 WV001200 Parker Run SA 2.00 $130,000.00 44 WV006801 Reynoldsville (Forinash) Subsidence S 0.10 $9,913.50 436.00 45 WV006349 Ridgeview (Dunlap) Portals DI 105.00 $366,033.60 625.00 46 WV006349 Ridgeview (Dunlap) Portals HEF 0.40 $4,000.00 47 WV006349 Ridgeview (Dunlap) Portals P 0.20 $12,000.00 48 WV006785 Roses Run Road (Carr) Subsidence S 0.10 $7,460.00 49 WV006802 Scotch Hill (Jennings) UMF Phase I UMF 5.00 $208,049.25 217.00 50 WV006807 Stonewood (Riley) Subsidence S 0.10 $11,400.00 3,451.00 51 WV006796 Werth (Starcher) Landslide DS 15.00 $562,056.00 10.00 52 WV006653 Wilderness PSD County Rt.9 WL Ext. PWHC 45.00 $142,489.93 265.00 TOTAL 538.05 5,450,983.16 397.00 340.00 1,416.00 519.00 20,148.00 Table 5 – (State/Tribe) - Partnership Financial Resources Dedicated to Protecting the Public from Adverse Effects of Past Mining (AML projects completed during EY 2017) SMCRA Alternate NonTotal nonProgram Total SMCRA SMCRA funding SMCRA Funding Funding Funding Source Source In-Kind Services 1 WV-5159 Ingrand Mine Drainage WCAP $107,000.00 EPA 319 $284,585.00 $68,415.00 $460,000.00 2 WV-1048 North Fork of Greens Run Refuse WCAP $98,977.78 EPA 319 $264,589.41 $29,700.00 $393,267.19 3 WV-5977 Sovern Run Titchnell Treatment 2 WCAP $100,000.00 EPA 319 $229,966.00 $4,800.00 $334,766.00 3 WV-6168 Summerlee AMD Treatment Phase 2 WCAP $95,871.00 EPA 319 $163,412.00 $25,748.70 $285,031.70 # PAD Number TOTAL Project Name $401,848.78 $942,552.41 Total Project Comments Funding $128,663.70 $1,473,064.89 Table 6 – (State/Tribe) – Reclamation Projects Started and/or Completed (AML projects started and/or Completed during EY 2017) Project Type State/Tribe (EY 20xx): Projects Started Projects Completed 33 36 33 36 Federal (EY 20xx): Total (EY 20xx): Table 7 – (State/Tribe) – AML Program Grant Awards and Staffing (State/Tribe) AML Program Grant Awards and Staffing (During EY 2017) AML Program Costs Administration Construction 6,312,860 12,100,000 Water Supply Construction 3,000,000 AMD Set-Aside 2,337,627 Other(s) (Specify) Total AML Funding AML Program Staffing (full-time equivalents on June 30, 2017): 0 23,750,487 55 filled with 9 vacancies