Arch Coal Clean Water Act Settlement

(Washington, DC - March 01, 2011) The U.S. Environmental Protection Agency (EPA) and the U.S. Justice Department announced today that Arch Coal Inc., the second largest supplier of coal in the United States, has agreed to pay a $4 million dollar penalty for alleged violations of the Clean Water Act in Virginia, West Virginia, and Kentucky. Under the settlement, Arch Coal will implement changes to its mining operations in Virginia, West Virginia and Kentucky to ensure compliance with the Clean Water Act.

On this page:

• Overview of Company and Location of Sites
• Violations Alleged
• Injunctive Relief to Address Non-Selenium Exceedances
• Injunctive Relief to Address Selenium Exceedances
• Pollutant Reductions
• Health and Environmental Effects
• Civil Penalty
• State Partner
• Comment Period
• Contact

Overview of Company and Location of Sites

Arch Coal, Inc. (Arch) is the second largest U.S. coal producer, contributing approximately 16 percent of America's coal supply from mining complexes in Wyoming, Utah, Colorado, West Virginia, Kentucky, and Virginia.

The settlement resolves Clean Water Act (CWA) violations at Arch's four mining complexes at its Eastern Operations located in West Virginia, Kentucky and Virginia. The violations alleged in the complaint consist of National Pollution Discharge Elimination System (NPDES) permit limit exceedances for manganese, total suspended solids (TSS), pH , iron, aluminum, and selenium. The violations occurred from January 2003 to December 2010.

Violations Alleged

• Discharge of pollutants without a permit pursuant to Section 301 of the Clean Water Act (CWA) 33 U.S.C. §§ 1311.
• Failure to comply with the conditions of permits issued pursuant to CWA Section 402, U.S.C. § 1342. Violations of permit conditions include exceedances of certain pollutants, such as manganese, total suspended solids, selenium, aluminum, pH , and iron.

Injunctive Relief to Address Non-Selenium Exceedances

The consent decree requires Arch to implement a program that will ensure CWA compliance at its mining operations. The compliance program includes:

• Compliance Management System (CMS): Arch is required to develop and implement a CMS to help foster a top-down, compliance and prevention-focused approach to CWA issues.
• Audits and Inspections: Arch is required to conduct an
  • Initial Treatment System Audit to determine whether its current treatment systems are adequate to maintain environmental compliance.
  • Internal Environmental Audit of all of its active and inactive mines on a quarterly, semi-annual, or annual basis, depending on whether the mine has persistent noncompliance issues, or has been reclaimed.
  • Outlet Inspections at least twice a month to visually identify any problematic aspects of each outlet
  • Annual third-party Environmental Audits at each facility.

• Electronic Data Tracking and Notification: Arch is required to implement an electronic notification system or "Violations Database" to track violation information and noncompliant sample results. This information must be compiled and summarized in quarterly reports that will be sent to Arch management, EPA and the States.
• Violations Response and Stipulated Penalties: Arch is required to implement a tiered response plan that includes:
  • daily sampling and treatment,
  • consultation with in-house CWA compliance experts,
  • if violations persist, hiring a third-party consultant.
• In conjunction with the increased sampling, monitoring, and reporting, Arch must pay escalating stipulated penalties per outlet and per violation of a permit limit.

Injunctive Relief to Address Selenium Exceedances

Arch is required to install a biochemical reactor (BCR) system, or passive treatment to address selenium exceedances. Arch must install the BCR system and meet selenium permit limits by December 31, 2011.

If the BCR system fails to meet objective standards established by the consent decree prior to December 31, 2011, Arch must immediately begin implementation of an alternative active treatment system to address selenium exceedances.

Pollutant Reductions

As a result of this settlement, EPA estimates the pollutant's discharged from Arch's mining operations will be 2 million pounds reduced annually.

Health and Environmental Effects

Mining, particularly surface mining, has significant environmental and human health consequences. Mining discharges impair streams and watersheds. These impairments include high levels dissolved solids, and sulfates, which have detrimental impacts to aquatic life.

Sediment-laden runoff can result in increased turbidity and decreased oxygen in receiving waters, which in turn can result in loss of in-stream habitat for fish and other aquatic species. Sediment can kill fish directly, destroy spawning beds, suffocate fish eggs and bottom dwelling organisms, and block sunlight resulting in reduced growth of beneficial aquatic grasses.

Civil Penalty

As part of the settlement, Arch has agreed to pay a total civil penalty of $4 million dollars to the United States and the states of West Virginia and Kentucky. The penalty is allocated based on the number of alleged violations in each state as follows:

• United States:$ 2,000,000
• West Virginia: $ 1,840,000
• Kentucky: $ 160,000

State Partner

The states participating with the United States in this settlement are West Virginia and Kentucky.

Comment Period

The proposed settlement, lodged in the U.S. District Court for the Southern District of West Virginia, is subject to a 30-day comment period and final court approval. Information on submitting comments is available at the Department of Justice website.

For more information, contact:

Melissa Raack
U.S. EPA
1200 Pennsylvania Avenue, NW (2243A)
Washington, DC 20460
(202) 564-7039
Melissa Raack ([email protected])