The Modernization of the Surface Mining and Reclamation Act: Is it Necessary?

Written by Crystal Howard.

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Mining is an essential part of California’s economy and history. The state’s mineral wealth was responsible for its rapid growth and continued development. Regulation of the state’s mining industry began in 1975 with the adoption of the Surface Mining and Reclamation Act (SMARA). A number of amendments have strengthened its protections, but increased regulatory burdens have raised the bar for access to all but the largest producers.

Currently, there is a move toward “modernizing” SMARA that is pressing for increased regulatory control of California’s mining industry. What problems are they trying to solve, and if they exist, do they need to be solved legislatively?

California’s Mining Regulation

Surface mining is regulated by SMARA. The act is designed to assure adverse environmental impacts are prevented or minimized, risks to public health and safety are eliminated and the production and conservation of minerals is encouraged. It is important to note that, along with safeguards for the environment and public health and safety, the legislature emphasized the importance of the production of minerals to the state’s economy. This factor is repeated numerous times within SMARA.

SMARA is implemented at the local level by the lead agency, which is normally the city or county with land use authority where the mining operation resides. Lead agencies are responsible for issuing permits1 to allow mining and approval of reclamation plans. The permit addresses the relationship of the mining operation with the surrounding community. Permits typically regulate hours of operation, noise, dust, visibility, production levels and traffic concerns. The reclamation plan provides a blueprint for restoring the mining property to a beneficial use after mining has been completed. Prior to commencement of mining operations, the operator must also secure a financial assurance to ensure that reclamation can be completed in the event of abandonment or financial inability.

With these approvals in place, mining can commence, but is continuously monitored for compliance by the lead agency. The lead agency is required to inspect the surface mining operation annually to ensure compliance with the permit and reclamation plan. At this time, the cost of reclaiming the site is also reviewed to ensure that adequate financial assurance continues to be available.

Over the years, SMARA has been amended a number of times. Currently, there are two legislative proposals to “modernize” SMARA; State Bill 209 (Pavley) and Assembly Bill 1142 (Gray). The rational used to justify the proposed reforms contained in the bills are claims that annual inspections are inadequate, and as a derivative, financial assurances are insufficient.

Are conditions so evident that we really must modernize SMARA to increase oversight? Have mine operators abandoned their operations leaving insufficient funds after the financial assurance mechanisms are seized or forfeited to the lead agency? I called the California Office of Mine Reclamation and discovered that, over the past 5 years, out of 700 active mines in the state, there have been less than a dozen forfeitures of financial assurances (about 2%). If only 2 percent of the mines in the state have had their financial assurances seized by the lead agency over the past 5 years, during a period when the industry has experienced its greatest recession in memory, is this really a problem that needs to be fixed?

Taking a closer look, most mine sites were once permitted in rural areas; however, over time, they have become surrounded by population centers. Thus, the land these operations occupy has substantial value. The operator has every incentive to reclaim the site because the value of the real estate is significant. The question remains, is there a problem that needs to be fixed?

The quality of annual inspections is targeted for reform. The proposed solution is to require that all inspections be conducted by a licensed professional civil engineer or registered geologist. Presently, SMARA does not require professional certification of mine inspections. Whether the inspection was performed by lead agency staff members or contractors, in most cases the inspections have been completed by non-licensed professionals. However, the inspectors, with a few exceptions, had a strong knowledge of mining and reclamation methods. In discussing this subject with a number of lead agencies, I found that they overwhelmingly support the need for the inspector to have a firm understanding of SMARA and mining and reclamation practice. Just because a person has a professional certification in engineering or geology, does not mean they have experience with mining and SMARA interpretation.

What does the inspector actually do during an inspection? The objective is to ensure the mining operation is in compliance with the site’s reclamation plan. It is important to note that the reclamation plan covers many aspects of the mining operations including phasing, slope development, topsoil salvage, drainage control and revegatation. Monitoring for compliance with the reclamation plan requires a good deal of common sense, as well as an understanding of the process required to complete reclamation. While these attributes may be held by registered professionals, they are by no means exclusive to their professions. The inspector’s primary role is to observe onsite conditions and compare them to the approved plan. Where deviations are identified, the inspector may identify corrective measures and/or issue violations. If the inspector has concerns about a condition that may cause environmental harm or threats to public safety, it may be necessary to enlist the talents of a technical expert. Examples might include an over-steepened slope adjacent to a public highway.

Currently, both bills have varying proposals that would require training for non-licensed professionals – if they are employees of the lead agency. Lead agencies support the training requirement. However, many lead agencies contract with outside parties to complete inspections. Under the proposed SMARA amendment, individuals contracted to perform inspections must all be registered civil engineers or geologists. Good luck finding registered professionals that also meet the requirement for experience in land reclamation. This limitation will likely reduce flexibility to use contractors that may have more experience and expertise with mining and reclamation, but do not have a license. SMARA is a home-rule bill and it should allow the lead agency the flexibility to determine if the licensed contractor is qualified to do inspections. This should not be dictated by the State. Training would be beneficial; however, SMARA should also recognize the benefits of using contractors that are not registered, but are otherwise qualified to conduct these inspections.

Is there a problem with SMARA that needs to be fixed legislatively? I can’t remember the last time I heard about a rock quarry or gravel pit threatening the public or causing unmitigated environmental damage. Certainly compliance issues do occur, but more often than not, these issues are paper concerns. Examples are plentiful, but some that come to mind might include: extending operations beyond the “proposed” termination date of the mining operations – thereby requiring a new reclamation plan; mining disturbance extending beyond the area identified for mining disturbance in the reclamation plan; mining two phases at once; failure to submit an updated financial assurance estimate, even though the amount of the financial assurance exceed possible increases in requirements, etc. In most cases, these are paper arguments that harm nothing. Babies aren’t dying, people aren’t being poisoned, birds continue to sing. The proposed modernization of SMARA won’t fix anything. We will continue to have the same problems we have today.

SMARA is complicated enough already. Adding a raft of new requirements will only add to the complication.

Increasing regulation usually comes with unintended consequences. Increased regulation disproportionately affects the smaller operators by increasing regulatory costs. This has the effect of reducing competition and increasing the cost of products that are necessary for development and maintenance of existing infrastructure. Ultimately, the effects of increasing regulation, trickles down to the citizens of the state and reduces the quality of life.

Crystal Howard is an economist and market analyst for EnviroMINE, Inc.

1If the site is vested, no land use permit is required.