20080868 Ver 2_Response to Add Info from_20080905

PCS
Phosphate
AURORA
PCS PHOSPHATE COMPANY, INC.
P.O. BOX 48, AURORA, NC U.S.A. 27806
September 4, 2008
Federal Express

Mr. John Dorney
Section Chief, Surface Water Protection Section
Division of Water Quality
Department of Environment and Natural Resources
2321 Crabtree Boulevard, Suite 250
Raleigh, NC 27604
S
DONR ,
Subject: PCS Phosphate mine continuation
Request for additional information 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. The following response addresses each issue in the order and format as presented
in the referenced letter.
1. Groundwater monitoring plan - PCS is working on the response to this issue and we plan to
have a response to you within 30 days.
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.
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 permit may require benthic
invertebrate collections and identification by a competent/knowledgeable firm, which PCS
agrees with.
4.A.La. 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. 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.Lc. PCS agrees with DWQ's conclusion that proposed mitigation credits are adequate to
meet regulatory requirements designed to offset projected wetland impacts.
4.A.Ld. 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, 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.ILa. 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 agreed 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 permit, with requirements for specific
project detail approvals written into the conditions of the permit. PCS encourages DWQ
personnel to coordinate with the Corps staff to reach agreement on mitigation plan approvals
and/or permit condition language.
4.A.II.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 02B.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 determined 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 Farm are indeed in an adjacent CU (03020105),
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.
We therefore believe that no adjustment in mitigation ratio should be made.
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.II.f. 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. PCS requests clarification on what is meant by "ecosystem types" and exactly what is
meant by "verified". All mitigation plans currently identify biotic communities that are targeted
for restoration.
4.A.II.i. Preservation of bypassed areas - PCS is working on the response to this issue and we
plan to have a response to you within 30 days.
4.B.L 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, and are actively engaged in discussions with regulatory
agencies to reach agreement on exactly what the success criteria should be. PCS forwarded a set
of draft riparian headwater success criteria to the Corps of Engineers on August 20 by e-mail,
and the Corps representative is planning on discussing these draft criteria with DWQ. PCS
acknowledges that the documentation of flow is required for stream credit to be awarded.
4.B.IL 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.L PCS agrees to propose a stream restoration/wetland enhancement project in the Porter
Creek headwater area by plugging or filling the existing ditch which runs parallel to the
uppermost end of Porter Creek. We will schedule John Domey and a Corps staff person for a
site visit to conduct an NC WAM assessment and evaluation.
4.D.II. 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.IIL PCS agrees that detailed success criteria must be developed for each mitigation plan,
and we are actively engaged in discussions with regulatory agencies to reach agreement on
exactly what the success criteria should be. PCS forwarded a set of draft riparian headwater
success criteria to the Corps of Engineers on August 20 by e-mail, and the Corps representative
is planning on discussing these draft criteria with DWQ. 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 to reach
agreement on appropriate mitigation plan success criteria.
5.A. Bonnerton WHF avoidance - PCS is working on the response to this issue and we plan to
have a response to you within 30 days.
5.B. Wetland Sand Ridge avoidance - PCS is working on the response to this issue and we plan
to have a response to you within 30 days.
5.C. Huddles Cut BLH avoidance - PCS is working on the response to this issue and we plan to
have a response to you within 30 days.
5.D. Additional BLH & stream system avoidance - PCS is working on the response to this issue
and we plan to have a response to you within 30 days.
The preceding information is provided in response to DWQ's August 7, 2008 information
request. PCS requests that DWQ review this information and continue to process the 401 Water
Quality Certification. As stated, PCS plans to provide responses to any outstanding issues from
this information request within 30 days.
Please contact me or Jeff Furness (252-322-8249) if you have any questions or require additional
information.
Sincerely yours,

Ross M. Smith
Manager, Environmental Affairs
PCS Phosphate Company, Inc.
252-322-8270