The Front Porch Blog, with Updates from AppalachiaThe Front Porch Blog, with Updates from Appalachia

Appalachian Voices and Partners Challenge Kentucky’s Backroom Deal With Coal Company

Friday, May 17th, 2013 | Posted by Eric Chance | No Comments

Watercolors by Frasure Creek. State inspector's photos show a variety of colors of water at Frasure Creek mines.

Yesterday, Appalachian Voices and our partner organizations filed a “petition for review”, essentially an appeal of a settlement between Frasure Creek Mining and the Kentucky Energy and Environment Cabinet. This settlement lets Frasure Creek off the hook for thousands of water quality violations over the past two years, while doing little to ensure that the company fixes its water quality problems.

Our challenge of this settlement focuses on the way in which it came about. But first, a bit of background.

We have a separate case that is ongoing against Frasure Creek for submitting false water monitoring data (entire reports were duplicated and only the dates were changed). After we uncovered this problem the company began turning in more accurate reports, which for the first time showed lots of pollution problems. We then filed a second suit against Frasure Creek for thousands of these pollution problems (which had been hidden by reporting problems before our first suit). Then the cabinet also filed a complaint for these pollution violations and more like them in state administrative court (a court run by the cabinet itself).

We intervened in that case and became full parties to it, but were then shut out of it completely. In fact the settlement was entered despite our previous objections, and there is no evidence that our objections were even considered. The cabinet and Frasure Creek negotiated a settlement completely without us. The law and common sense both dictate that an agreement is not valid unless all the parties involved agree to it, and that is the basis for our challenge of this settlement yesterday.

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Kentucky’s Lab Certification- Is it strong enough?

Wednesday, May 1st, 2013 | Posted by Eric Chance | No Comments

Yesterday, Appalachian Voices submitted public comments on a proposed wastewater lab certification program in Kentucky. To discharge polluted water, coal companies must receive a permit under the Clean Water Act. This permit that requires companies to test wastewater and report the data to ensure it falls within the limits of the permit. In Kentucky, there are currently no standards for labs that do this type of testing.

The proposed certification program is a direct result of the lawsuits for falsified water monitoring data we filed against three of the state’s largest coal mining companies. Our investigation revealed that many coal companies were repeatedly submitting the same data and knowingly leaving out reports of any violations of their permits. After we filed these lawsuits, the Kentucky Energy and Environment Cabinet inspected the labs being used for this monitoring and found that in many cases they were not even capable of correctly performing the required tests.

This graph shows some of the inaccurate data submitted by Frasure Creek Mining before our lawsuits lead them to start using a new lab. Click to enlarge.

We believe that enforcing standards on labs used by coal companies will help ensure that labs report accurate data, and that the regulations meant to protect water and those that depend on it from dangerous pollution are effectively enforced. This proposed rule will be a big step forward and we have applauded the cabinet for its efforts to fix these problems. However, there are several weaknesses in the rule that we hope are fixed before it is finalized.

All too often the cabinet has failed to live up to its obligations to protect the people and environment in Kentucky. That is why our comments suggest that discretionary duties given to the cabinet in this rule be made mandatory. Appalachian Voices will continue to work to require the state agencies to actually enforce these standards.

>>Click here to see our comments
>>Click here to read the proposed lab certification rule
>>Click here to read the draft lab manual

Appalachain Voices and Partners Object to Backroom Deal With Kentucky Coal Company

Monday, February 4th, 2013 | Posted by Eric Chance | No Comments

Frasure Creek owner, and billionaire, Ravi Ruia's yacht. Note the matching helicopter! Frasure Creek Mining is apparently on the verge of bankruptcy, but it's owners seem to be doing just fine. Click the image to learn more about the boat.

A coalition of citizens’ groups including Appalachian Voices filed objections to a proposed settlement between Kentucky’s Energy and Environment Cabinet and one of the state’s largest coal mining companies, Frasure Creek Mining. The agreement would legally resolve over a thousand water pollution violations from 2011 and 2012 at all of Frasure Creek’s mines across Eastern Kentucky, but the agreement will not fix the pollution problems.

Despite the fact that we are full parties to this enforcement action, this agreement was crafted entirely behind closed doors without us. Over and over again the cabinet has made every effort to exclude us and aid polluters. One of our objections to this settlement is that it has violated our right to due process since our names are on this agreement yet we had no say in it whatsoever.

Some of Frasure Creek's false conductivity values

Even more alarming, we expect that if this agreement is entered the cabinet will likely try to argue that this makes another ongoing case that we are involved in moot. That case is primarily based on blatantly false water monitoring reports submitted by Frasure Creek. Prior to that legal action, Frasure never admitted having pollution problems like the ones at issue in this case. It was not until they came under increased scrutiny, following our initial court filing, that they began reporting more truthful water monitoring data, uncovering the pollution violations at issue in this settlement.

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Kentucky Governor Under Suit for Pro-Coal Corruption

Friday, October 19th, 2012 | Posted by Eric Chance | No Comments

Kentucky Governor Steve Beshear

Former Mine Permits director Ron Mills claims he was fired for failing to sign illegal coal mining permits.

Mills was a political appointee of Kentucky Governor Steve Beshear, whose official website states:

As governor, Beshear has helped restore public trust by creating a culture of integrity in state government that has included rooting out cronyism and implementing stronger ethics standards.

Click below to read the recent Lexington Herald Leader stories:
>>Trial delayed again in case that probes coal’s influence on Beshear
>>Beshear trying to settle lawsuit brought by former mine permits director

Landmark Settlement Proposed in Kentucky Water Pollution Case

Friday, October 5th, 2012 | Posted by Eric Chance | No Comments

Appalachian Voices, along with a coalition of citizens’ groups, has reached a historic agreement with International Coal Group, Inc. (ICG), and the Kentucky Energy and Environment Cabinet over years of false reporting and water pollution violations in Eastern Kentucky and a failure by the state to enforce the Clean Water Act.

We are very glad to achieve this settlement which will help clean up pollution in streams throughout the coal-impacted region, and we are proud to have worked with our partners in this important case that has already yielded changes in the coal industry and state regulatory agencies. The agreement was filed today in Franklin County Circuit Court and needs to be approved by the judge before taking effect.

Read our press release to find out more about the settlement.

In 2010, we uncovered dozens of pollution monitoring reports submitted by ICG and Frasure Creek Mining to the cabinet that were clearly false. Our analysis showed that some reports included all the same data as previous reports, but the dates had been changed. In other cases, there were multiple and contradictory reports for the same discharge point. Not only were the reports inaccurate, they were masking major pollution problems, as can be seen in the graphs below.

ICG Knott Conductivity


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Court Update on Frasure Creek and ICG Clean Water Act Cases

Monday, July 16th, 2012 | Posted by Erin Savage | No Comments

A status conference was held today regarding the Clean Water Act enforcement lawsuits against Kentucky coal mining companies, Frasure Creek and International Coal Group (ICG). The conference was ordered by Judge Phillip Shepherd, of the Franklin Circuit Court in Kentucky, to update the court on progress made toward settlement in both cases.

Appalachian Voices, Kentuckians for the Commonwealth, Waterkeeper Alliance, Kentucky Riverkeeper, and four individuals originally gave notice of intent to sue both companies in 2010 and 2011 for more than 24,000 violations of the Clean Water Act. In response, the Kentucky Energy and Environment Cabinet filed its own enforcement against the companies and negotiated a settlement to resolve the violations in December of 2010. Appalachian Voices and its partners intervened in the state enforcement to challenge the settlement, which, among other deficiencies, inadequately fined the companies less than 1% of allowable fines under the law. In April of this year, the Kentucky Supreme Court set legal precedent by affirming the rights of Appalachian Voices and our partners to intervene in the state’s enforcement.

The last hearing in these cases in the Franklin Circuit Court, held in September 2011, allowed parties to present evidence on whether the state’s proposed settlement was “fair, adequate, reasonable, and in the public interest.” After that hearing, Judge Shepherd ordered the parties back to mediation. Settlement talks with both companies have been ongoing since January of this year.

In preparation for today’s conference, Judge Shepherd ordered Commissioner of the Department of Environmental Protection, Bruce Scott, to submit an affidavit detailing the status of the department’s budget and staffing. Further summary of responses by the Cabinet and Bruce Scott can be found here and here.

After hearing from the parties today, Judge Shepherd indicated that he is prepared to make a ruling on the original state settlements with the companies, but will give the parties 60 days to complete negotiation of a new settlement.

Appalachian Voices and its partners continue to work diligently to reach settlements that will be in the best interest of the people and waterways of Eastern Kentucky.

Official EPA Comments on 36 Ky Permits

Thursday, June 28th, 2012 | Posted by Pallavi Podapati | No Comments

Appalachian Voices submitted official comments following the EPA’s public hearing on June 2nd and 4th. Our comments affirm the EPA’s objections to 36 water pollutant discharge permits for surface mines in Kentucky. The 36 draft permits were issued by the Kentucky Energy and Environment Cabinet.

Under the Clean Water Act, the EPA must ensure state compliance with clean water laws to protect public health and the environment. Our official comments explain why we agree with the EPA’s decision, and address misinformation and additional problems with the permits.

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KY Supreme Court Rules in Favor of Citizens and Water

Friday, April 27th, 2012 | Posted by Eric Chance | 1 Comment

Yesterday the Kentucky State Supreme Court ruled in favor of Appalachian Voices and our partners KFTC, Waterkeeper and the Kentucky Riverkeeper. The ruling upheld lower court rulings allowing us to intervene in a lawsuit between Frasure Creek Mining and the Kentucky Energy and Environment Cabinet.

That case was brought about in October 2010 when we filed a Notice of Intent to Sue against Frasure Creek Mining, and International Coal Group (Now an Arch Coal subsidiary) for 20,000 violations of the Clean Water Act with potential penalties of over $700 million. The bulk of these violations relate to false and potentially fraudulent reporting of water pollution levels. Under the Clean Water Act companies have limits on the amount of pollution they are allowed to release, and they are required to monitor their pollution to make sure they meet these limits.

In an effort to keep us from being able to bring a case in federal court, the coal companies reached settlements with the Kentucky Energy and Environment Cabinet, but those settlements needed to be approved by a state court. The settlements amounted to little more than a slap on the wrist; they have minimal fines and no meaningful measures to ensure that the same problems will not continue. Through the citizen suit provision of the Clean Water Act, citizen are allowed to participate in legal actions to protect public waters. Using this provision, we intervened in the state court case in order to argue that the state’s settlement was not fair, adequate and in the public interest.


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Nally & Hamilton Case Continues in State Court

Friday, December 9th, 2011 | Posted by Eric Chance | 2 Comments

Yesterday Appalachian Voices along with our partners Kentucky Riverkeeper, Kentuckians For The Commonwealth, and Waterkeeper Alliance challenged the recent settlement between Nally & Hamilton and the Kentucky Energy and Environment Cabinet in state court.

Click here to see the press release with more information on this newest development.

Click here to see the how the case has developed.

Click here to view the state court petition.

Several Kentucky news outlets covered this development. Click the links below to see the news articles.
Ronnie Ellis for the Daily Independent
Erica Peterson for WFPL Public Radio
Bill Estep and Beth Musgrave for the Lexington Herald-Leader

Kentucky Energy and Environment Cabinet cuts deal with Nally and Hamilton for Water Pollution Violations

Wednesday, November 23rd, 2011 | Posted by Eric Chance | No Comments

Last week the Kentucky Energy and Environment Cabinet entered a settlement with Nally and Hamilton Enterprises to resolve tens of thousands of violations of the Clean Water Act. The pending agreed order, originally submitted in September, was signed by the Cabinet Secretary Len Peters, now making it official.

Nally and Hamilton is one of the largest producers of Mountain Top removal Coal in Kentucky. They are also being sued by a number of citizens over flooding caused by one of their mines, which lead to a great deal of property damage and killed two people. (more…)

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Higher Fines For Big Coal, More Secrecy From The Kentucky Energy And Environment Cabinet

Wednesday, September 21st, 2011 | Posted by Erin Savage | 6 Comments

On September 14th, a conference was held with Hearing Officer Blanton in the Office of Administrative Hearing case brought by the Kentucky Energy and Environment Cabinet against Nally & Hamilton. The conference determined whether Appalachian Voices, Kentuckians for the Commonwealth, Kentucky Riverkeeper, and Waterkeeper Alliance, represented by Natural Resources Defense Council attorneys, may continue with legal proceedings as intervenors in the case. Unfortunately for Appalachian Voices and the citizens of Kentucky, the results of the hearing will allow the Cabinet to continue making deals with Nally & Hamilton behind closed doors.

This case is the Cabinet’s response to the Notice of Intent to sue Nally & Hamilton for 12,000 violations of the Clean Water Act, filed in March 2011 by Appalachian Voices and its partners. To address the violations identified by Appalachian Voices, the Cabinet settled with Nally & Hamilton for $507,000 in fines, topping the previous record-setting fines issued in Appalachian Voices’ other on-going cases against big coal in which Frasure Creek and ICG coal companies were fined $310,000 and $350,000, respectively.

Though these fines represent a great step toward holding coal companies accountable for the pollution they create, the fines are still insufficient. Under Kentucky law, Nally & Hamilton could be fined as much as $300 million for the 12,000 violations. The recognition that the Cabinet consistently does not adequately enforce the law is one reason Appalachian Voices and its partners stepped in as intervenors in the Cabinet’s case. Once the Cabinet and Nally & Hamilton proposed a token settlement in the case they then filed a motion for a continuance. In the conference, the Hearing Officer granted the motion for continuance, based on his determination that he did not have authority to require more discovery in our case.

Those of you without a legal degree are probably wondering what all of this means. I’ll do my best to explain – in short, the Cabinet continues to shield the coal companies, without adequate prosecution. The continuance effectively halts legal proceedings – in this case, it halts discovery, or our ability to request further documentation and other evidence from Nally & Hamilton and the Cabinet, which would likely strengthen and clarify our case. We will still be allowed to submit comments on the Agreed Order between the Cabinet and Nally & Hamilton before the order is sent to the Cabinet Secretary for review.

Besides filing the motion for continuance, the Cabinet has attempted to undermine our involvement in other ways as well. The Cabinet failed to respond to any of our discovery requests, despite the responses being due in August. Because of this, we have been unable to determine the facts the Cabinet considered when entering into the settlement with Nally & Hamilton. We do not know how fines were determined, what violations were identified, or how thorough an investigation was conducted.

The Clean Water Act violations that were identified indicate that pollution is being under reported and inaccurately reported. This improper reporting harms Kentucky’s waterways and the health of Kentucky’s citizens. The Cabinet failed to identify most of these violations until they were uncovered by Appalachian Voices. Despite the Hearing Officer’s request to the Cabinet and Nally that they include Appalachian Voices and its partners in the settlement negotiations, the Cabinet completed a closed-door settlement with Nally & Hamilton and is attempting to prevent further action by us. The current settlement provides a relatively low monetary penalty, does not provide for true stipulated penalties for future violations, ignores the potential of intentional fraud, and claims to resolve Nally’s liability for all previous violations of “the same type” despite there being no evidence the Cabinet bothered to identify different types of violations.

It is obvious the Cabinet is taking the side of big coal in this case. The settlement clearly does not provide for effective, ongoing protection of the people of Kentucky from corporate coal abuses. Kentucky citizens deserve better than this from their state officials.

Big Coal’s Watergate Hearing Wrap Up

Wednesday, September 7th, 2011 | Posted by Erin Savage | No Comments

The hearing against the Kentucky Energy and Environment Cabinet, and ICG and Frasure Creek coal companies wrapped up last Friday. Appalachian Voices, Kentuckians for the Commonwealth, Kentucky Riverkeeper, and Waterkeeper Alliance intervened in the settlement between the Cabinet and the coal companies, arguing the settlement was not fair, reasonable or in the public interest. Appalachian Voices has identified more than 20,000 Clean Water Act (CWA) violations committed by the two companies between 2008 and 2009. Additional violations have been identified in 2011, but are the subject of a separate Notice of Intent to sue. Under the CWA, the violations could result in fines of more than $740 million dollars. The Cabinet originally fined the two companies a total of $1.25 million, but negotiated a consent judgment of $660,000 — $310,000 for Frasure Creek and $350,000 for ICG. These fines represent less than 1% of the total possible fines.

Wednesday, the first day of the hearing, began with opening statements, in which our attorney, Mary Cromer, argued the Cabinet’s fines were insufficient and did not account for the financial benefit gained by the companies through inaccurate reporting. The types of violations identified by Appalachian Voices included repeating data in reports from different quarters, and exceeding pollution limits. State employees, Jeff Cummins, Assistant Director of the Division of Environmental Protection, and R. Bruce Scott, Commissioner of Environmental Protection, were questioned to determine how violations were identified and counted, as well as how fines were assessed. Cabinet attorneys objected to many of the questions regarding the Cabinet’s deliberative process. Judge Shepherd, a former Cabinet Secretary, rejected most of the objections, stating that an understanding of the process was necessary to determine whether fines were adequate, and would probably help the Cabinet’s case.

The Cabinet employees reported that they did not know the total number of pollution discharges held between the two coal companies. Mark Cleland, Environmental Control Manager, attributed some of the violations to transcription and administrative errors. Recognizing the implications of inaccurate discharge monitoring reports (DMRs), Judge Shepherd later asked Scott, without accurate data, “how will the cabinet ever determine if there is a water pollution violation?”

On Thursday, the opposing counsel requested summary judgment from Judge Shepherd, but the judge declined. Tom Gabbard, manager of the Cabinet’s Compliance and Technical Assistance branch, was called as a witness. Gabbard testified to inspections of three sediment ponds. Gabbard reported high conductivity readings, as well as red-orange precipitate, indicative of acid-mine drainage, extending as far as 300 feet down a stream exiting one of the ponds. While the Cabinet’s settlement does require corrective action plans, Gabbard stated that, besides remedial action, the plans do not require anything further than what is already required under existing law.

Eric Chance, of Appalachian Voices, testified that he calculated $31,000 per month saved by Frasure Creek and $10,000 saved by ICG through the use of non-certified, and therefore less expensive, labs. Patrick Garrity, the state’s Drinking Water Laboratory Certification Officer, testified the previous day to the inadequacies of one of the labs used by the coal companies. He cited a lack of record keeping, failure to use proper quality control procedures, and disorganized equipment in the lab. The opposing counsel challenged Chance’s data interpretation. When asked by Frasure Creek attorney Jack Bender if he had included the instances of repeating data in his graphs, he replied, “It was not our priority to correct your DMRs.”

In the final day of the hearing, Bruce Scott was called as a witness for a second time, this time in defense of the Cabinet. He testified to the Cabinet’s efforts in addressing the violations of ICG and Frasure Creek, but claimed that the suit was interfering in the ability of the Cabinet to pursue other environmental problems within the state. Nevertheless, Scott also admitted that Appalachian Voices identified violations that had not been noticed by the Cabinet. Furthermore, the Cabinet has only investigated and fined the three coal companies original identified by Appalachian Voices as having violated the CWA. The coal companies each called a witness to assert that the problems were merely a result of substandard lab work and that the companies had quit using the offending lab, S & S Monitoring. ICG has recently hired a new company, East Kentucky Water Monitoring, to collect water samples. The company was founded and operated by the same employees who previously worked at S & S Monitoring.

At the end of the hearing, all parties agreed to submit post-trial findings and conclusions within 30 days, in place of oral closing statements. Judge Shepherd strongly urged all parties to attempt to settle through a second round of mediation. Judge Shepherd stated that he foresees “difficult and novel issues that are likely to keep the problem in litigation for a long time.”

Appalachian Voices is willing to consider a second round of mediation, provided the other parties come to the table in good faith. Any settlement reached must assure that these companies stop polluting Kentucky’s waterways. Barring successful mediation, we look forward to continuing with this precedent-setting litigation. Setting new legal precedents in clean water act litigation is something that makes Waterkeepers very happy. Regardless of the future outcome, we have already succeeded in achieving record-setting Clean Water Act fines against coal companies in Kentucky and changing the way they have to do environmental compliance.

Additional coverage of the hearing can be found in the following news articles:

Wall Street Journal
The Lexington Herald-Leader
The Independent: article 1, article 2, article 3



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