trending Market Intelligence /marketintelligence/en/news-insights/trending/lAuPAiFp3CEledDKRHpHsg2 content esgSubNav
In This List

Budget bill could undercut Clean Water Rule; technical limitations delay MSHA dust sampling


Insight Weekly: Unease roils markets; US likely to slip into recession; firms' cash ratios fall


Insight Weekly: Bank boards lag on gender parity; future of office in doubt; US LNG exports leap


Insight Weekly: Job growth faces hurdles; shale firms sit on cash pile; Africa's lithium future


Insight Weekly: Loan growth picks up; US-China PE deals fall; France faces winter energy crunch

Budget bill could undercut Clean Water Rule; technical limitations delay MSHA dust sampling

TheU.S. House Appropriations Committee released its fiscal year 2017 energy andwater budget bill on April 12, legislation that seeks to raise funding forfossil energy research but could further undercut the Obama administration'stroubled Clean Water Rule.

Thebill would boost appropriations for the U.S. Department of Energy's fossil energyresearch and development to $645 million, a $13 million increase fromprior-year enacted levels and above the $600 million by the Obama administration inits budget request released in February. Nuclear energy research, developmentand demonstration activities would get $1.01 billion under the committee'sbill, up by $25 million from the fiscal year 2016 enacted level. Overallfunding for DOE energy programs would total $11.08 billion, up by $56 millionfrom the fiscal year 2016 enacted level but $1.3 billion below the president'srequest.

Thelegislation also includes policy items that could further prevent the U.S. EPAand U.S. Army Corps of Engineers from implementing their Clean Water Rule,which a federal appeals court already stayednationwide in October 2015 pending the outcome of lawsuits against theregulation. The budget bill would prohibit any changes to federal jurisdictionunder the Clean Water Act, a restriction that could ease concerns from coalproducers and other energy-related industries that the recently finalized CleanWater Rule would drastically expand water bodies subject to federal regulation.

Citingnewly discovered technical limitations, the U.S. Mine Safety and HealthAdministration announced that the agency would temporarily delay its ownrespirable dust sampling, and "the requirement that coal mine operatorsconduct respirable coal mine dust sampling."

Inan announcement late last week, MSHA noted that it had recently discoveredinterference between proximity detection systems and respirable dust samplingdevices, telling miners to hold off on required sampling.

Thedelay comes as the industry continues its challenge to new federal rules onrespirable dust, which they have insistedwould "cripple" the coal sector if implemented. Most recently,Murray Energy Corp.and the National Mining Association arguedthat a panel of judges for the U.S. Court of Appeals for the 11th Circuit erredin denying the coal industry attempt to overturn new rules aimed at loweringthe incidence of black lung.

Thateffort came after a second phase of the rule came into effect Feb. 1.

urged federal transportation regulators to reject a bid by andRocker Six Cattle Co. to terminate its proposed Montana-based rail line on thebasis that the Otter Creek mine project, which it will serve, has beenabandoned.

Theproposed 42-mile line would connect ArchCoal Inc.'s Otter Creek mine in the Powder River Basin with aBNSF Railway Co.track, facilitating shipments to domestic buyers or overseas customers viaterminals on the West Coast.

OnMarch 10, TRRC filed a supplement related to its November 2015 petition totemporarily suspendits permitting efforts for the construction of the rail line project, amiddelays in the approval of mining permits for the Otter Creek mine. Thesupplement advised the board that Arch is putting on hold its efforts in developing the Montanacoal project.

Oralarguments in a case to decide whether the federal government actedinappropriately when it canceled a mining permit for what could have been oneof the country's largest mountaintop removal projects began April 11 in theU.S. Court of Appeals for the District of Columbia Circuit.

Thecase, which was remanded back to the court after the U.S. Supreme Courtdeclined to hear it,concerns the denial of a mining permit granted by the U.S. Army Corps ofEngineers by the U.S. EPA based on environmental grounds. Specifically, theagency argued that the permit was deniable under the Clean Water Act.

Accordingto the EPA, at question in the case is whether the agency can base its permitdecision on what it deemed an unacceptable adverse effect downstream of adisposal area at the Spruce mine and whether the agency adequately explainedits factual conclusion that fill material proposed for discharge would have anunacceptable adverse effect on wildlife.

Followingup on briefs submittedby both sides in December 2015, attorneys for , a subsidiary ofArch Coal Inc.,argued that the EPA had acted "arbitrarily and capriciously" indenying a permit for the Spruce Mine No. 1.

is suing the U.S.Department of Labor seeking relief from the government's efforts to imposeliability for Patriot Coal Corp.'sblack lung claims after Patriot's liquidation.

Archis currently in the midst of a Chapter 11 bankruptcy reorganization. In anApril 8 filing in the U.S. District Court for the District of Columbia, Archasked a judge to provide declaratory and injunctive relief from a final agencyaction it says violates the mine operator liability provisions of the BlackLung Benefits Act.

Archsold several of its subsidiaries to MagnumCoal Co. in December 2005. Prior to Arch's sale to Magnum, Archsaid the government had approved self-insurance of its own black lung benefitsliability.

Aspart of the sale, Magnum assumed the liabilities associated with thesubsidiaries Arch divested. Magnum would later become a part of Patriot, nowliquidated after its second bankruptcy reorganization. Patriot, which wasformed in 2007 as a spinoff from PeabodyEnergy Corp., was weighed heavily by assorted worker liabilitiesfrom its largely unionized workforce centered in Appalachia. The company filedbankruptcy in 2012 and again in in 2015. When Patriot sold most of itsoperating assets to BlackhawkMining LLC and the VirginiaConservation Legacy Fund Inc., neither company was obligated toassume the black lung benefits under an agreement approved by the bankruptcycourt.

Archargues that the benefits should be covered by the Black Lung Disability TrustFund and said the Department of Labor is reaching beyond authority provided byregulations in imposing liability on prior stockholders or owners to cover theliability of an insolvent operator.