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Coal Update

Fish & Wildlife Service and OSM Release Memorandum of Understanding on Endangered Species Act Issues Which Immediately Incorporates Stream Protection Rule

January 13, 2017

By: Matthew S. Tyree

In combination with the release of the Stream Protection Rule (“SPR”), previously reported, the Obama administration released a Memorandum of Understanding (MOU) between the U.S. Fish and Wildlife Service (“F&WS”) and the United States Office of Surface Mining (“OSM”) which expands the role of the OSM in delegated state program oversight and the consideration of permitting actions that may impact endangered species. Referenced in the MOU, though not published or released by either F&WS or OSM, is a new Programmatic Biological Opinion (“PBO”) which outlines the implementation and enforcement of the SPR in ESA-related SMCRA permitting actions.

The MOU and PBO provide “guidance” for reviewing SMCRA permits both before and after implementation of the SPR. Unlike the SPR, however, they are effective now. They provide F&WS and OSM the tools needed to incorporate many provisions of the SPR into the SMCRA permitting process under the guise of a review of potential ESA impacts. 

Previously, the SMCRA regulatory authority (“RA”)—WVDEP in West Virginia and PADEP in Pennsylvania—was required to provide written notification to the F&WS whenever the RA received an application for a new permit, significant revision, or permit renewal. To approve the permit, the RA was required to make a written finding that a proposed operation would not jeopardize threatened or endangered species or critical habitat. This finding was based upon information gathered and the development of enhancement and protection plans to minimize effects on listed species, if necessary. The F&WS could request the information relied upon by the RA to make the written finding, but this was not common.

Now, the F&WS will request and review all information relied upon by the RA to make the written finding. Additionally, the baseline information needed to satisfy the F&WS will expand based upon SPR provisions. Further, any disagreements between RAs and the F&WS about the adequacy of the information reviewed or the protections included in the permit will be governed by a time-consuming “technical assistance process.” This process essentially establishes a timed process between the RA and F&WS to work through disputes. In the event that a dispute cannot be resolved, there is now an “elevation process” (the guidance suggests that RAs defer final action during this elevation process). Regional Review Teams have been created to resolve these disputes. These teams will consist of executives or designees from RAs, F&WS, and OSM. Finally, this “technical assistance process” is not limited to permit issuance, significant revisions, and renewals. Rather, it must be initiated anytime the operator new species listed or proposed that may be affected or any new information reveals effects of the operation that may affect listed species or critical habitat. Altogether, the MOU and PBO setup a process that will make the ESA consultation much more cumbersome—if not impossible—to successfully complete.

For instance, once notified of a new permit, significant revision, or renewal impacting ESA-listed resources, the F&WS field office will request that the RA provide the F&WS all fish and wildlife resource information contained in the permit application and the fish and wildlife protection and enhancement plan contained in the permit application. The F&WS will evaluate these materials and decide whether they are sufficient to determine if and how the permitted operation will affect listed species or habitats. This evaluation, however, incorporates many SPR provisions. Baseline monitoring requirements will be more cumbersome. The “guidance” suggests expanding the suite of surface and groundwater water parameters tested before, during, and after mining (e.g., conductivity constituents and selenium which have been relied upon heavily to initiate citizen suits). Additionally, biological assessments of perennial and intermittent streams may be required before, during, and after mining within the proposed permit area and those that could be affected in the adjacent area (the PBO states that benthic macroinvertebrates must be identified to the genus level where possible—also relied upon in citizen suits). Moreover, surveys for ESA-listed or proposed species may be required (e.g., presence/absence or status surveys).

In the interim period before implementation of the SPR, the MOU and PBO direct the F&WS to ameliorate “insufficiencies in the existing regulations” by providing species-specific protective measures to the RAs (to be implemented by the operators) during the technical assistance process. Thus, the MOU and PBO, effective now, essentially direct the F&WS to implement the SPR through the guise of species-specific protective measures in SMCRA permits.

Below is a more detailed review of the ESA, MOU, and PBO.


The ESA is aimed at protecting endangered and threatened species and the ecosystems upon which they depend. It requires RAs to consult with the F&WS to ensure that actions they authorize, fund, or carry out are not likely to jeopardize the continued existence of any listed species or result in the destruction or adverse modification of designated critical habitat of such species. 

The ESA prohibits any action that causes a “take” of any listed—threatened or endangered—species. “Take” is defined broadly by the ESA as to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect. Harm may include significant habitat modification where it kills or injures a listed species through impairment of essential behavior (e.g., nesting or reproduction). Actions, such as mining activities, that result in a “take” without an exemption violate the ESA and subject the permittee to legal liability and civil penalties (fines).

To obtain an exemption from the prohibition against take of a listed species, SMCRA permittees must obtain an incidental take statement by participating in the newly formed “technical assistance process” under the PBO and MOU.[1] The incidental take statement must (1) specify the impact of the taking; (2) specify reasonable and prudent measures to minimize the impact; and (3) include terms and conditions that the permit applicant must comply with to implement the reasonable and prudent measures.


The MOU provides “guidance” for procedures and protocols concerning ESA-related activities that must be followed by OSM, F&WS, and RAs during the SMCRA permitting process.

The MOU:

  1. Provides guidance on procedures for OSM, F&WS, and state regulatory agencies (RAs) to follow in connection with permitting decisions on proposed, threatened, and endangered species and proposed and designated critical habitats;
  2. Establishes protocols for elevating disputes between OSM, F&WS, and RAs during the permitting process;
  3. Creates local and regional teams to promote cooperation on various activities related to SMCRA and the ESA; and
  4. Establishes a National Surface Mining Liaison at the F&WS to facilitate implementation of the MOU.

Most concerning, the MOU creates a cumbersome and potentially time-consuming “technical assistance process” providing guidance for demonstrating compliance with the terms and conditions of the 2016 PBO. The coordination process contains “elevation procedures” to manage disagreements between RAs and the F&WS regarding the adequacy of protections for ESA species in permits. The coordination process and elevation procedures expand the roles of F&WS and OSM in the ESA consultation process.

The MOU contains several provisions that differ from previous ESA-related reviews of SMCRA permits. These differences immediately incorporate many ESA-related provisions from the SPR. These provisions are incorporated through an expansion of the permit information that F&WS will review to make ESA determinations.

The MOU provides guidance on the type of information that F&WS should require for a permit review, including information concerning the proposed permit area and adjacent areas along with baseline monitoring:

  1. Prior to implementation of SPR, the F&WS will require species-specific protective measures to be incorporated into permits if impacts to the hydrologic balance may occur and would negatively affect ESA-listed or –proposed resources. The F&WS will rely on the newly defined meaning of “hydrologic balance” which, under the SPR, expands the area examined to the permit and adjacent areas. The guidance expressly aligns the definition of “adjacent area” with that of the “Action Area” defined by the F&WS: https://www.fws.gov/northeast/nyfo/es/actionarea.htm. This would greatly expand prior interpretations of “hydrologic balance” under SMCRA.
  2. Monitoring will be expanded, at the request of the F&WS, for baseline monitoring along with monitoring during and after permit duration. The guidance contains detailed lists of parameters of concern for ESA species and urges F&WS to expand parameter requests to numerous parameters such as selenium, conductivity constituents, and stream flow. These parameters have been relied upon in many Clean Water Act citizen suits against mining companies and the F&WS may rely on them in requesting species-specific protective measures.
  3. If the F&WS determines that ESA-listed resources may be affected in the 100-foot stream buffer zones, the F&WS may require species-specific protective measures to be implemented. This would potentially result in the immediate implementation of the SPR protections if the F&WS finds ESA-listed resources in these buffer zones for a permit application.
  4. The SPR would substantially reduce the placement of excess spoil in streams. Prior to implementation of the SPR, the MOU directs the F&WS to provide species-specific protective measures to avoid and minimize impacts to ESA-listed of –proposed species in streams proposed to be filled by permits. No limit is placed on which protective measures the F&WS may require. Thus, the F&WS may indirectly implement the SPR’s rules related to fill placement in streams through species-specific protective measure requirements.

The MOU requires SMCRA permits to be reviewed by the F&WS on a permit-by-permit basis through the coordination process. If the coordination process concludes with F&WS permit issuance and agreement that the entire SMCRA operation and conservation plan will not jeopardize species or adversely modify critical habitats, then any take associated with the permitted operation will be exempted by the ESA. The guidance, however, substantially increases the hurdles needing cleared to obtain ESA exemption and expands OSM’s participation in the F&WS review of SMCRA permits for ESA exemptions.

Even if a permittee obtains exemption, several requirements remain in place:

  1. The permittee must promptly notify F&WS when a dead or impaired individual of a proposed or listed species is discovered within the permit or adjacent areas;
  2. The permittee must promptly notify F&WS whenever the permittee becomes aware of a newly-listed species, newly-discovered species, or newly-discovered critical habitat within the permit area or adjacent area that was not considered at the time of permit issuance; and
  3. The permittee must reinitiate the technical assistance process if;    
    1. The amount or extent of incidental take is exceeded;
    2. New information reveals effects of the operation that may affect listed species or critical habitat;
    3. The operation is modified in a manner causing an effect not previously considered; or
    4. A new species is listed or proposed or critical habitat designated or proposed that may be affected by the permitted operation.

Previously, consideration of newly-proposed or listed species occurred during permit issuance, significant revisions, or renewal. Now, permittees will be subject to the constant threat of reinitiation of the coordination process if they become aware of a newly-listed or proposed species within the permit area or adjacent area.


In 2008, the United States Office of Surface Mining (“OSM”) revised the Stream Protection Rule (“SPR”) to expressly recognize that SMCRA could not be used to prohibit valley fills authorized under Section 404 of the Clean Water Act. After a challenge from anti-mining forces, a court held the rule as insufficient holding that OSM unreasonably relied on the U.S. Fish & Wildlife Service’s (“F&WS”) 12-year-old biological opinion concluding that surface mining and reclamation operations conducted in accordance with existing regulations implementing SMCRA were not likely to jeopardize threatened or endangered species or critical habitat. The court held that reliance on the 1996 Biological Opinion did not satisfy OSM’s requirement of formal consultation with F&WS prior to promulgating the 2008 SPR, where F&WS’s biological opinion did not consider the ESA effects of the revised 2008 rule.

The PBO replaced the 1996 Biological Opinion with the 2016 update to avoid a similar ruling on any challenge of the recently issued SPR. However, permitting actions under the terms of the 1996 Biological Opinion remain valid, unless a proposed permitting action would expand the potential impact on ESA species. This will provide little comfort to the industry, however, because the PBO itself expands the ESA impact area to align it with the SPR.

The PBO develops procedures intended to fulfill OSM’s need under the ESA to consult on the potential for a proposed action to adversely affect threatened or endangered species and proposed and designated critical habitat areas under the ESA.

As described above, the MOU contains several consultation requirements that indirectly implement the SPR. The PBO contains detailed descriptions of various ESA-protected and –proposed species. For each species, it outlines their distribution, habitat, threats, and critical habitat. As detailed earlier, it includes greatly increased monitoring requirements. Combined with the MOU, the PBO will result in an increased examination of each permit for potential effects on these species. The areas where permittees must search for these species will be expanded and the parameters which may affect these species will be expanded. Finally, the F&WS will use the expanded information to require species-specific protective measures.

Together, the MOU and PBO work to incorporate the provisions of the SPR into the SMCRA permitting process under the guise of an ESA review. As they are effective immediately, any attacks of the SPR should consider the inclusion of this recent “guidance.”

This article was authored by Matthew S. Tyree, Jackson Kelly PLLC.


[1] Alternatively, compliance could also be demonstrated by obtaining a permit under Section 10 of the ESA. However, the Section 10 permit process is simply too cumbersome for a single project.


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