20080868 Ver 2_Add Info for 401_20081103

PCS
Phosphate VAURORA
PCS PHOSPHATE COMPANY, INC.
P.O. BOX 48, AURORA, NO U.S.A. 27808
November 3, 2008
Federal Express
Mr. John Domey
Section Chief, Surface Water Protection Section
Division of Water Quality
Department of Environment and Natural Resources
2321 Crabtree Boulevard, Suite 250
Raleigh, NC 27604
Subject: PCS Phosphate mine continuation
Request for additional infonnation for 401 Water Quality Certification
US Army Corps of Engineers Action ID No. 200110096
Mr. Dorney:
In a letter from Mr. Paul Rawls dated August 7, 2008, the Division of Water Quality (DWQ)
requested additional information for processing of the PCS Phosphate 401 Water Quality
Certification. Responses to the majority of issues identified in Mr. Rawls' letter were addressed
in a letter from PCS dated September 4, 2008. PCS personnel have subsequently corresponded
with DWQ staff on frequent occasions. The following text addresses all of the issues in the order
and format as presented in the referenced letter.
1. Groundwater monitoring plan - PCS received information from DWQ today, November 3,
2008 describing the expectations of the referenced groundwater monitoring plan. PCS intends to
comply with the requirement for a groundwater monitoring plan that will meet DWQ's
requirements. PCS agrees that utilizing the existing groundwater monitoring programs currently
reporting to DWQ is the best approach to meet the requirements of the 401 Water Quality
Certification process. Please note that DWQ's reference to "dewatering" wells should be revised
to "depressurization" wells.
2. PCS has performed an exhaustive search for available tracts of land that have the potential for
restoration or enhancement of non-forested buffer, including reviews of all available mapping
(USGS and county soil surveys), LIDAR data, and field reconnaissance. Through this process
PCS has identified a number of sites that should yield sufficient stream and wetland restoration
credit to satisfy the stream and wetland compensatory mitigation needs for Alt L. However,
based upon the proposed buffer impacts and the ratio applied to such impacts under the Tar-Pam
buffer rules, a deficit of appropriate buffer restoration sites to compensate for these impacts may
occur.
During the search for buffer mitigation sites, several un-buffered channelized drainage features
(ditches), and Waters of the State (streams), located in agricultural tracts were identified for
potential buffer restoration. The concept of buffer development (with permanent conservation
easements) while providing continued agricultural use of the remaining property was presented
to the landowners. During discussions and negotiations, landowners consistently expressed
concerns about limited access and limited ability to periodically clean out these drainage
features, and therefore were unwilling to sell a 100-foot wide strip of their property. Many
potential sites were comprised of a mosaic of several landowners, and obtaining agreements from
the necessary parties to create a satisfactory length of stream buffer has not been possible.
The revised buffer variance request submitted to DWQ by e.-mail on August 20, 2008 did not
include a request for buffer credit based on conducting research. This was deleted from previous
versions of the buffer variance request.
Also, the revised 8/20/08 buffer variance submittal included the PCS support for establishment
of a broad-based stakeholder advisory group to help guide the selection of alternative BMP sites,
and to review and comment on the proposed method to calculate offset credits.
A "Request for a Major Variance from the Tar-Pamlico Riparian Buffer Protection Rules (15A
NCAC 2B .0259 and .0260) for Buffer Mitigation for the PCS Phosphate Company, Inc." was
scheduled for consideration by the Environmental Management Commission Water Quality
Committee at their September 10, 2008 meeting. The agenda item was revised to "Information
Item on Buffer Mitigation at PCS Phosphate Company, Inc.", and then, after consultation with
representatives of PCS, North Carolina Attorney General, and Southern Environmental Law
Center, DWQ chose to withdraw the agenda item.
PCS understands that DWQ intends to issue a conditional 401 Water Quality Certification in
consideration of a mitigation plan that will provide stream buffer mitigation on the NCPC tract
through projects defined in the Final Environmental Impact Statement (FEIS) and in-lieu fee
provisions through the North Carolina Ecosystem Enhancement Program (NCEEP) without
immediate consideration of stream buffer credit for riparian headwater stream restoration or
flexible buffer mitigation projects. Riparian headwater stream restoration and flexible buffer
mitigation project credit will be addressed in the future through creation of a program and/or
rule-making in accordance with N.C. Gen. Stat. 143-21.4.20.
Stream buffer impacts under Alt L will require stream buffer mitigation credits of 37.1 acres on
the NCPC tract. HIS mitigation projects will provide 26.6 acres of stream buffer mitigation.
The remaining 10.5 acres of stream buffer mitigation will be provided through the NCEEP in-
lieu fee program. An "In-Lieu Fee Request Form" was submitted by PCS to NCEEP on October
6, 2008. NCEEP provided notice of acceptance for this request on October 20, 2008. A copy of
this acceptance documentation was forwarded to DWQ on October 21, 2008.
3. PCS is in agreement that the existing water quality and biota monitoring that is being done to
determine if there are any water quality, water quantity or biological effects of mining through
drainage area reductions in the small streams draining into South Creek and other tributaries of
the Pamlico River will be included in the new Certification. PCS also agrees to notify DWQ
biological monitoring staff at least one month in advance of any sampling so they could
accompany our biologists during sampling visits.
We understand that DWQ staff has recently discussed the issue of using a certified lab for
evaluation of estuarine or marine benthic invertebrate samples, and that DWQ has decided that
use of a certified lab will not be required. A condition of a new pennit may require benthic
invertebrate collections and identification by a competent/knowledgeable firm. PCS is prepared
to accept this condition.
4. Mitigation (Wetlands, Streams, and Buffers)
As requested by DWQ at the October 3, 2008 meeting, PCS provided a compilation of success
criteria requirements and information to DWQ (Eric Kulz) on October 10, 2008. This
information is applicable to several of the individual issues addressed in this section. Written
correspondence from DWQ (Tammy Hill) dated October 30, 2008 indicates that the mitigation
issues cited in DWQ's August 7, 2008 have been adequately discussed or resolved, with the
exception of the mitigation ratios for Parker Fann Sections I and J. This issue is addressed in
Section 4.A.1I.c below.
4.A.I.a. PCS agrees with DWQ's conclusion that wetland restoration acreage meets or exceeds
impact acreage for all wetland types, so the State's requirement for 1;1 restoration or creation is
satisfied for the entire proposed mining operation.
4.A.I.b. U.S. Army Corps of Engineers Regulatory Guidance Letter (RGL) 02-2 (2002) states
that "for wetlands, the objective is to provide, at a minimum, one-to-one functional replacement,
i.e., no net loss of functions, with an adequate margin of safety to reflect anticipated success."
Functions are defined as the normal or characteristic biological, chemical, geochemical, and
ecological activities that take place in wetland ecosystems and the values attributed to these
functions are defined as benefits. In order to identify appropriate mitigation ratios based on
replacement of lost functions and values, various attempts have been made to devise
scientifically valid, efficient, and regionally replicable functional assessments of wetlands and
streams (HGM, IBI, and others). In North Carolina, a state and federal interagency group has
made significant progress on a functional wetland assessment methodology (Draft NC WAM is
soon to be made "official") and has begun preliminary efforts on a functional stream assessment
methodology (NC SAM). However, there is no agency-approved functional assessment
methodology for streams or wetlands at this time.
Guidelines on ratios are given in several documents, with one being the EPA Region IV draft
mitigation banking guidance (US Environmental Protection Agency 1992). The 1990 MOA
between EPA and USACE states, "In the absence of more definitive information on the functions
and values of specific wetland sites, a minimum of 1:1 acreage replacement may be used as a
reasonable surrogate for no net loss of function and values." RGL 02-2 states that "In the
absence of more definitive information on the functions of a specific wetland site, a minimum of
one-to-one acreage replacement may be used as a reasonable surrogate for no net loss of
functions." The more recent EPA Region IV Compensatory Mitigation Policy states that in the
absence of a functional assessment methodology predetermined general compensatory ratios are
used as a guide (US Environmental Protection Agency 2001). This Region IV Policy suggests
general ratios of 2:1 for restoration, 4:1 for enhancement, 6:1 for creation, and 10:1 to 60:1 for
preservation. The 10 April 2008 mitigation rule states that "if a functional or condition
assessment or other suitable metric is not used, a minimum one-to-one acreage or linear foot
compensation ratio must be used".
PCS used all this information and guidance in the development of the mitigation ratios. If using
prior-converted cropland for mitigation, all ratios are 2:1 except when mitigating for pine
plantations and herbaceous assemblage wetland habitats, which are at 1:1, since they are
generally lower quality than the other wetland habitat types. However, the Corps of Engineers
has indicated that the required ratio to mitigate for the Bonnerton wet hardwood forests within
the NCNHP Significant Natural Heritage Area will be 4:1. If a site is used for mitigation that
has been ditched and drained, but the forest vegetation (trees) still exists, all ratios are 1:1. We
believe that since the trees are already present, if the hydrology is restored by eliminating the
drainage ditches, full function is restored almost immediately with no lag time for tree growth
and no risk for tree seedling mortality, and therefore no ratio penalty should be applied.
A similar reasoning is behind the enhancement ratios. If a site is used for mitigation that has
been ditched and trees are still standing, but the ditching has not adequately drained the site and
it is still a jurisdictional wetland, then restoring the full hydrology by eliminating the drainage
effect would warrant a lower enhancement ratio than the default 4:1. PCS ratios are 3:1 for all
biotic community impacts except pine plantation and herbaceous assemblage, which are at 1.5:1.
Preservation ratios are discussed in Section 4.A.I.d. below.
4.A.I.e. PCS agrees with DWQ's conclusion that proposed mitigation credits are adequate to
meet regulatory requirements designed to offset projected wetland impacts.
4.A.I.d. PCS believes that an 8:1 preservation ratio for all wetland biotic community types
except pine plantation and herbaceous assemblage (which are at a 6:1 ratio) is appropriate,
because of the locations of the various preservation parcels in the mitigation plan. All
preservation parcels either serve to connect together past or future wetland mitigation projects to
make an extensive wildlife corridor, or are adjacent to or within proposed wetland restoration
sites which serve to expand and improve the value of them. The majority of preservation
involves tracts along the South Creek Corridor. The lower portions of these tracts are made up
of high quality bottomland hardwood forests or brackish marshes, the width of the tracts serve as
a valuable water quality buffer to upper South Creek, and they form a wildlife corridor that
extends for 4.5 miles.
4.A.I1.a. More detailed mitigation plans for several mitigation projects have been submitted for
agency review since the publication of the Final EIS, and additional work is being done on
several others. Site visits to each mitigation site for agency personnel have been held since July
29, 2008. All specific details for each mitigation project may not be fully ag=reed upon with
agencies before permits are issued. However, PCS believes that enough project details are
provided for each site for DWQ to be able to issue a pen-nit, with requirements for specific
project detail approvals written into the conditions of the pen-nit. PCS encourages DWQ
personnel to coordinate with the Corps staff to reach agreement on mitigation plan approvals
and/or permit condition language.
4.A.I1.b. Restoration of vegetation at Hell Swamp has been designed to reflect soil
characteristics, elevations, field observations, expected hydrology, and suitable species found in
Beaufort County obtainable from local or regional nurseries. To accommodate varying
hydrologic regimes, planting zones have been designated based on design topography and soils.
In addition to hardwood trees, some small polygons of shrubs will be incorporated into the plan
to promote a diverse suite of habitat, food, and cover options in the landscape. Restored areas
will be planted with bare-root seedlings and some tublings of native tree and shrub species that
are known to have occurred historically in the area and/or observed on similar or reference sites.
Trees in the interstream flats will be planted on a 9 x 12 spacing (density of 403 trees per acre)
and shrubs will be planted on a 9 x 9 spacing (538 shrubs per acre). Since juvenile water,
willow, and laurel oaks are difficult to distinguish, Zones 3 and 4 are each divided into two
separate segments depending on the mix of oaks within the zone such that laurel and water oaks
do not occur in the same section. Riparian buffer restoration vegetation planting along the main
segment of Scott Creek will occur in accordance with 15 A NCAC 0213.0260 to ensure that an
adequate riparian buffer is installed at the site. Planting within the 100-foot riparian buffer along
Scott Creek restoration reaches and all riparian headwater systems will be on 9 x 9 spacing and
contain at least two species of hardwood and where appropriate, will be in accordance with 2003
Stream Mitigation Guidelines.
Vegetative restoration within the P-Lands will be done in phases detennined by a logical and
logistical approach agreed to between PCS Phosphate and Weyerhaeuser. The restoration
activities will follow the same plan for each phase in that the pines will be cleared or harvested
(depending on the age of stand), the interior ditches will be filled, and the area will be replanted
with an appropriate mix of hardwood species. The planting design will reflect soil
characteristics, elevations, field observations, expected hydrology, and suitable species found in
Beaufort County obtainable from local or regional nurseries. To accommodate varying
hydrologic regimes, planting zones will be designated based on restored topography and soils. In
addition to hardwood trees, some small polygons of shrubs will be incorporated into the plan to
promote a diverse suite of habitat, food, and cover options in the landscape. Restored areas will
be planted with bare-root seedlings and some tublings of native tree and shrub species that are
known to have occurred historically in the area and/or observed on similar or reference sites.
4.A.II.c. PCS is aware of the "Guidance on the use of Compensatory Mitigation in Adjacent
Cataloging Units" developed by the Program Assessment and Consistency Group (PACG) for
use with the North Carolina EEP program, where mitigation ratios are increased for projects in
adjacent CU's. Sections I and J of our Parker Farn are indeed in an adjacent CU (03020105)
and drain to the Bay River, however they are immediately connected to and are an extension of a
mitigation project in our CU (03020104), and serve to extend the overall wetland/wildlife
corridor of the whole system. The mouth of the Bay River and the mouth of the Pamlico River
are both located in the same general area of the western Pamlico Sound. Written comments fiom
at least three environmental agencies state that impacts under Alternative L would be detrimental
to the Albemarle-Pamlico system as a whole. The July 23, 2008 comment letter from Heinz
Mueller of EPA Region 4 states that mining at Aurora would have direct and cumulative impacts
to waters which support the Albemarle Pamlico Estuary System. The June 25, 2008 comment
letter from Pete Benjamin of the U.S. Fish and Wildlife Service Raleigh Field Office states that
such large-scale impacts would likely have direct and detrimental effects on the environmental
quality and the food webs of the Albemarle Pamlico Estuary Complex. The July 1, 2008
comment letter from Shannon Deaton of the NC Wildlife Resources Commission states that
further mining within the NCPC Tract would cause significant degradation to fish and wildlife
resources of the adjacent Pamlico Sound estuary. Considering these agencies comments, we
believe that no adjustment in mitigation ratio should be made because of the mixing of the waters
from the Pamlico River and Bay River at their mouths in the western Pamlico Sound.
4.A.II.d. The estimate of credits for the Gum Run sites is based on hydrology monitoring
through what has been abnormally dry periods. PCS agrees that additional monitoring under
normal precipitation may yield additional credits, which will be accounted for through time. In
fact, ultimate credits generated at each of the restored mitigation sites may be more or less than
what is estimated or predicted prior to restoration and monitoring.
4.A.II.e. The Sage Gut mitigation plan will be revised to show that the riparian wetlands will be
linear in nature and will fall within the topographic and geomorphic valleys of the site.
Mitigation credit values between riparian and non-riparian wetlands will be revised.
4.A.ILL As mitigation plans are revised based on agency comments, we will utilize LIDAR data
to better define what is called riparian and what is called non-riparian. As this is done,
mitigation values will be adjusted.
4.A.II.g. The error in FEIS Appendix I Table 1 has been revised to match what is shown in
Figure 4.
4.A.II.h. All mitigation plans currently identify biotic communities that are targeted for
restoration. Written correspondence from DWQ (Tammy Hill) dated October 30, 2008 indicates
that the "ecosystem types" issue has been adequately addressed through information provided in
the current mitigation plan.
4.A.I1i. Preservation of bypassed areas - PCS does not intend to provide on-site preservation of
wetland areas in the NCPC and Bonnerton tracts that are not proposed for mining. These
resources represent significant assets to PCS. At some point in the future, technology may be
developed that will allow for the recovery of the phosphate reserves in these areas. In addition,
information has been provided to DWQ by PCS counsel indicating there is no statutory and
regulatory authority to support such a requirement (October 20, 2008). While PCS must propose
and carry out mitigation measures to address unavoidable impacts in accordance with applicable
state and federal statutes, rules and regulations, there simply does not appear to be any federal or
state authority for any state or federal agency to unilaterally impose a requirement that PCS
convey permanent conservation easements on specific property as a condition of Section 401
certification or Section 404 permitting.
4.B.I. PCS disagrees with the use of the word creation to describe the zero-order stream
mitigation. We believe we have demonstrated through the use of the recent LIDAR technology
and several reference areas that these riparian headwater stream systems existed in the past and
we are restoring them. We agree and acknowledge that detailed success criteria must be
included in each specific mitigation plan. As requested by DWQ at the October 3, 2008 meeting,
PCS provided a compilation of success criteria requirements and information to DWQ (Eric
Kulz) on October 10, 2008. These success criteria have been developed through coordination
with the Corps of Engineers. PCS acknowledges that the documentation of flow is required for
stream credit to be awarded.
4.B.II. PCS will revise the proposed mitigation ratio for stream enhancement. The guidelines
call for a 1.5 ratio multiplier for enhancement, therefore the new proposed ratio for stream
enhancement will be 2.7:1. The FEIS mitigation table (Table 4) has been revised to reflect this
change. No stream enhancement mitigation is currently proposed in any of the identified
mitigation projects, so mitigation credits will not change. A preservation value of 4:1 was
chosen from the sliding scale of 2.5:1 to 5:1 to be slanted more heavily toward the upper end of
the range, recognizing that mitigation by preservation is not the preferred option.
4.C PCS agrees that a hardship exists with respect to riparian buffer mitigation, and that the
hardship provides justification for the DWQ supported Tar-Pamlico buffer rules major variance
request.
4.D.I. PCS agrees to propose a stream restoration/wetland enhancement project in the Porter
Creek headwater area by plugging or tilling the existing ditch which runs parallel to the
uppermost end of Porter Creek. DWQ personnel conducted an NC WAM assessment and
evaluation for the area involved in this project on October 24, 2008.
4.D.11. PCS accepts DWQ plans to condition the 401 Certification to require written DWQ
approval for detailed mitigation plans for all stream, buffer and wetland sites proposed now or in
the future for the mine continuation. However, the state 401 Water Quality Certification rules at
15 NCAC 02H .0506 (h)(1) state that "mitigation required by the U.S. Army Corps of Engineers
shall be considered to constitute the mitigation required by the certification unless the Director
determines that the mitigation proposal does not meet the criteria established in Subparagraph (6)
of the Paragraph." The August 7, 2008 letter from Paul Rawls to Ross Smith states in paragraph
4.A.I.a. that "wetland restoration acreage meets or exceeds impact acreage for all wetland types,
so the State's requirement for 1:1 restoration or creation acreage is satisfied for the entire
proposed mining operation." Therefore, we encourage DWQ to coordinate with the Corps staff
on the specifics of this mitigation plan.
4.D.III. As requested by DWQ at the October 3, 2008 meeting, PCS provided a compilation of
success criteria requirements and infonnation to DWQ (Eric Kulz) on October 10, 2008. These
success criteria have been developed through coordination with the Corps of Engineers.
Criteria need to be simple and straightforward, able to indicate that the restored wetland or
stream is functioning and must be able to be measured and reported within a regulatory context.
We all might like these restoration sites to be university research projects. However, because of
regulatory time-frames and lack of enough high quality natural reference areas to encompass a
meaningful range of natural variability within a biotic community, we do not believe it is
appropriate or necessary to develop criteria to address and evaluate the level of attainment of
targeted ecological conditions across each mitigation site. PCS encourages DWQ personnel to
coordinate with the Corps staff related to this issue.
S.A. Bonnerton WHF avoidance - Avoidance of the Bonnerton wet hardwood forest (WHF)
area(s) is not practicable. Avoidance of the NHP identified area would result in a reduction of
six million tons of recoverable phosphate concentrate. This reduction is equivalent to well over
one year of mining and would reduce mine continuation north of Highway 33 to significantly
less than 14 years. A mining boundary requiring substantial avoidance of this area is not
practicable. In addition, information has been provided to DWQ by PCS counsel indicating the
historical record of man's intervention in these areas (July 9, 2008) and the statutory and
regulatory authority related to the NHP identification of these areas (October 20, 2008). NHP
identification of these Bonnerton tracts is improper, does not and cannot confer regulatory
protected status on these areas, and Section 401 certification cannot be conditioned on the
complete avoidance of these areas.
S.B. Wetland Sand Ridge avoidance - Avoidance of the Wetland Sand Ridge communities in
Bonnerton is not practicable. The Wetland Sand Ridge areas in Bonnerton are relatively small
and dispersed throughout a significant portion of the Bonnerton tract. Avoidance of these areas
would render significant adjacent phosphate resources as unminable.
S.C. Huddles Cut BLH avoidance - On October 24, 2008, DWQ personnel re-inspected the five
Huddles Cut bottomland hardwood communities that were excluded from the 1997 404/401
permits. Avoidance of these areas would render significant adjacent phosphate resources as
unminable. After the field visit on October 24, DWQ indicated that the first four areas (labeled
A, B, C and D on the field map) would be acceptable to be impacted with mitigation. The
mitigation plan for Alternative h has already taken impacts to these areas into account.
As requested during the October 24, 2008 site visit, the bottomland hardwood acreage of
exclusion area D was re-evaluated and appropriate edits will be made to the wetland impact data.
The re-evaluation resulted in an increase of bottomland hardwood impacts of 0.44 acres (went
from 0.30 acres to 0.74 acres).
At DWQ's direction, PCS has looked at avoidance/minimization of the fifth exclusion area,
farthest to the east (area E on the field map), and proposes a minimization boundary around that
bottomland hardwood drainage. Attached is a drawing depicting the proposed minimization line.
The exclusion line written into the 1997 404/401 permits was based on biotic community
mapping from large-scale aerial photographs, which showed a linear hardwood band in the
middle of a pine plantation. However, separate recent site visits by biological consultants and
the PCS biologist have confinned a more accurate boundary of the actual bottomland hardwood
community. This area is approximately half of the length of the 1997 "mitten shaped" area. The
area proposed to be avoided is characterized by frequent saturation to the surface or periodic
inundation, and dominated by tree species such as bald cypress, willow oak, water oak, laurel
oak, green ash, blackgum, red maple and tulip poplar. At the proposed avoidance line, there is a
short transition zone, and the area above that line is much drier, with no periodic inundation.
Dominant tree species include red maple, sweetgum, tulip poplar and loblolly pine, with
switchcane growing across the bottom of the drainage.
S.D. Additional BLH & stream system avoidance - PCS considers any additional avoidance of
bottomland hardwoods and stream systems not practicable.
The preceding information is provided in response to DWQ's August 7, 2008 information
request and supplements the PCS response submitted on September 4, 2008. PCS requests that
DWQ review this infornation and issue the 401 Water Quality Certification.
Please contact me or Jeff Furness (252-322-8249) if you have any questions or require additional
infornlation.
Sincerely yours,
Ross M. Smith
Manager, Environmental Affairs
PCS Phosphate Company, Inc.
252-322-8270

1
,I
r
I

+?-
---7

ti

? C
.O
C _

u
't3 `o
w
C5
U I w° a
U
V
Q ~
w
>
? E

a
4,
a o
d o
a b
U
a dS

I

By: J.P. Schmid 1
i
Title: Impacts from NCPC Alternative L
Date: 11-3-08 Exclusion Area in East Cat Ear F-A?VAU RORA DIV ISION
Scale: 1 u = 600, Location:
Rev.: Dwg. No.