20080868 Ver 2_EPA Comments_20090617

JaptED STATZS
T, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
$ a WASHINGTON, D.C. 20460
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'JUN 17 2009
Terrence "Rock" Salt
Acting Assistant Secretary (Civil Works) OFFICE OF
WATER
Department of the Army
108 Army Pentagon
Room 3E446
Washington, DC 20310-7401
Dear Acting Assistant Secretary Salt:
I am writing to inform you that the U.S. Environmental Protection Agency (EPA)
has decided not to seek additional review of the Section 404 permit to the Potash
Corporation of Saskatchewan Phosphate Division (PCS or the Applicant) to expand an
existing phosphate mining operation (Action ID: AID 200110096) in Beaufort County,
North Carolina (NC). EPA Headquarters and Region 4 have jointly made this decision
after thoroughly reviewing the U.S. Army Corps of Engineers Wilmington District's (the
Corps) June 3, 2009, proffered permit and Record of Decision (ROD), received on June
4, 2009. The 15,100 acre project area is located adjacent to the Pamlico River which is
part of the nationally significant Albemarle Pamlico Estuary Complex. The project area
is composed of three tracts identified as the NCPC, Bonnerton, and South of NC
Highway 33 (S33) tracts which collectively contain 6,293 acres of wetlands and 115,843
linear feet of streams that support the Albemarle Pamlico Estuary. The mine advance
described in the proffered permit involves mining and mining related activities within
approximately 11,343 total acres, resulting in direct adverse impacts to approximately
3,909 acres of wetlands and 22,435 linear feet of streams.
On April 3, 2009, EPA elevated an earlier version of the proposed permit
(February 24, 2009, proposed permit) to the Assistant Secretary of the Army - Civil
Works (ASA-CW) for review pursuant to Part IV of the 1992 Memorandum of
Agreement (MOA) between EPA and the Department of the Army under Section 404(q)
of the CWA. In response to this permit elevation, a number of changes have been made
to the proposed project to reduce the scope of its environmental impacts, particularly in
the most valuable and sensitive areas, and reflect additional conditions designed to
improve site reclamation practices and the monitoring and adaptive management of both
the impact and compensatory mitigation sites. EPA has fully considered the revised
project in the context of CWA Section 404 (q) and 404(c), including assessment under
relevant portions of the CWA Section 404(b)(1) Guidelines. Based on the revisions made
to the proposed permit as well as the other factors discussed below, and after close
consultation, EPA Headquarters and Region 4 have decided that the Section 404(q)
process has been resolved, and EPA has decided not to pursue review of the project
pursuant to Section 404(c) at this time.
Internet Address (URL) • http://www.epa.gov
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Impact Avoidance
The first step of the section 404(b)(1) review is to avoid impacts to waters of the
U.S. Under the Guidelines, an alternative is practicable if it is "available and capable of
being done after taking into consideration cost, existing technology, and logistics in light
of overall project purposes." The Applicant is currently operating under a CWA Section
404 permit issued by the Corps in 1997 that authorized impacts to approximately 1,268
acres of wetlands at the project site. Rather than continuing to permit impacts to the
site's valuable aquatic resources in a "piecemeal" manner, the Corps is approaching the
current permit more holistically and issuing what it has referred to as a "life of mine"
permit. Consistent with this approach, the project's Environmental Impact Statement
(EIS) classifies and maps aquatic resources across the entire 15,100 acre project area.
The revised permit authorizes impacts to approximately 11,343 acres of uplands and
wetlands and avoids impacts to the approximately 2,445 acres of waters of the United
States (see ROD permit Special Condition DD) that the Corps, EPA and the other federal
and state resource agencies agree represent the site's most ecologically important aquatic
resources.
In this case, the Corps Wilmington District determined that economic
practicability of the project turns on the availability of approximately 15 years of mining
in the two tracts north of Highway 33 (the NCPC and Bonnerton tracts). In our elevation
we raised concerns with the economic analysis used by the Corps in determining
practicability. The District's analysis was reviewed by Corps HQ and confirmed by the
ASA-CW in his response to EPA's Section 404(q) elevation. Although EPA continues to
have questions regarding this specific analysis, we recognize that economic viability is an
important part of the alternatives analysis. The Applicant has stated that at this time,
given the current state of the phosphate market, it would not be economically feasible to
move to S33 in the near future. Further, PCS has emphasized that the phosphate ore in
the northern tracts is of higher value, and more cost-effective to mine, than that in the
southern tract. The Applicant has stated that, as a result of these factors, mining in the
southern tract would not be cost-effective in the absence of a substantial improvement in
the market. (It should be noted that the Applicant did not originally apply for a permit for
S33; the Corps required that tract to be included as part of the "life of mine" permit
process.) Therefore, the Applicant has asserted that there must be significant mining
north of S33 in order for the project to be viable. The Applicant has also reiterated that
the project which was the subject of the 404(q) elevation, and would provide about 14
years of mining in the two northern tracts, is marginally practicable under current market
conditions.
In our elevation we looked to the statement in the FEIS that an alternative would
be reasonable if it provided "the applicant with the certainty of practicable costs for at
least 15 years." Based on that statement, our analysis of what the least environmentally
damaging practicable alternative would be used the assumption that 15 years of mining
on any combination of the three tracts would make the project viable. However, after
considering the company's analysis and conclusions on this matter, we now are
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convinced that mining on S33 can not be considered to provide the "certainty of
practicable costs" in the near future. While we are not able to determine exactly how
many years of mining would be required on the two northern tracts to make a project
economically viable, we now accept that something closer.to 15 years on the northern
tract is appropriate.
Subsequent to our elevation we suggested that avoidance of approximately 450
acres would be practicable. However, just as we have strongly argued. throughout this
process that not all waters are of equal value, similarly not all mining configurations are
of equal value (or practicability). The Corp has determined that achieving that level of
avoidance would make the project impractical. It is important to note that it can be
particularly difficult to determine practicability of alternatives in situations such as this,
where mining can occur only where the resource is located, and not all resources are
equal in value or cost-effectiveness. The revised permit does in fact provide for less than
the original goal of 15 years of mining in the northern tracts (by about a year and a half).
The FEIS identified Alternative L as the applicant's modified permit request. This
proposed permit request was subsequently reduced in impacts on NCPC and S33 tracts
through discussions between the Corps District and the applicant. The proposed impacts
for the original Alternative L were for 4120 acres of wetlands and 29,288 linear feet of
stream. The State of North Carolina further reduced the impacts through the State's
Section 401 certification. EPA proposed additional avoidance in its permit elevation. In
response to additional avoidance sought by EPA, a number of changes have been made to
the proposed project to reduce the scope of its environmental impacts, including
additional impact avoidance to approximately 111 acres of wetlands, waters, and uplands,
including 3,293 linear feet of streams. EPA, along with FWS and NMFS believe these
additional changes protect the most valuable resources that were minable under the
revised permit, and thus reduce the expected over-all environmental impact.
Our April 3, 2009, elevation request emphasized the importance of permanently
protecting, via conservation easements, those wetlands and streams avoided under the
proposed permit from the adverse effects of future mining. In response to this
recommendation, the Applicant has agreed to expand the amount of avoided areas
protected via conservation easements from 174 acres to 5981 acres on the proposed site.
These additional easements are along the 4 tidal creeks on the NCPC tract and one tidal
creek on the Bonnerton tract discussed below under Significant Degradation, and one
creek on the S33 tract. This will ensure that some of the highest value aquatic resources
on the NCPC and Bonnerton tracts are protected from future mining and other
development. The Applicant has also agreed to place conservation easements on
approximately 206 acres of the Porter Creek and Cypress Run Creek watersheds that are
1 This number reflects the 174 acres (as stated in the Corps' February 24, 2009 notice of intent letter to
EPA Region 4 and in the June 3, 2009, ROD) already protected by the State's CWA Section 401 Water
Quality Certification as well as the additional acreage PCS has offered to put under easement in response to
EPA's elevation which includes approximately 354 acres on the NCPC Tract, 42 acres on the Bonnerton
Tract, and 28 acres on the S33 Tract.

adjacent to the project site.2 In light of the high quality of the remaining avoided areas
not subject to conservation easements, and the expectation that this is a life-of-mine
permit, future requests to impact the over 1,800 acres of avoided wetlands and other
waters not protected from future mining by conservation easements could trigger review
pursuant to CWA Section 404(c).
In light of the information provided by the Applicant, the avoidance described
above (and in greater detail below under Significant Degradation), and the difficulty
inherent in this determination, EPA accepts that the current configuration is the least
environmentally damaging, economically feasible, and practicable alternative.
Impact Minimization
The second step in the Section 404(b)(1) analysis concerns minimizing the
unavoidable impacts to waters of the U.S. In addition to highlighting the need for
additional impact avoidance, our April 3, 2009, elevation request also stressed the need to
incorporate additional measures into the permit to minimize project impacts by
improving post-mining land reclamation practices at the site. In response to this request,
the revised permit includes new reclamation measures that require: 1) stockpiling and
reuse of topsoil for the reclaimed areas, especially in the drainage areas; 2) planting of
agency-specified tree species; and 3) development of a plan to monitor and manage water
within the reclamation area to optimize the amount and quality of water being released.
Impact Compensation
The third step in the Section 404(b)(1) analysis is to provide compensatory
mitigation to offset the impacts to waters of the U.S. To compensate for the ecosystem
services lost over the life of the project, the Applicant has developed a comprehensive
mitigation plan that involves multiple sites and strategies. The proposed restoration
efforts primarily focus on croplands and drained forested wetlands underlain by hydric
soils that are expected to be good candidates for wetland restoration. Targeting
mitigation in these areas is expected to have a positive benefit for water quality in the
Pamlico River which is designated as nutrient sensitive water and is currently listed as
impaired for chlorophyll a. Achieving further reductions in nutrient loadings from
agricultural lands will support the State's implementation of actions to restore the nutrient
sensitive waters of the Pamlico River. The proposed mitigation would not occur on-site
but rather at sites further south of the Pamlico River, and at sites north of the Pamlico
River.
Under the plan, 7,968; 756; and 2,472 acres of wetlands would be restored,
enhanced, and preserved, respectively. Wetland replacement-to-loss ratios used by the
Corps are 2:1 for restoration, 3:1 for enhancement, and 8:1 to 10:1 for preservation. Also
z The Applicant has stated that protection of this off-site acreage is subject to its "inability to place
restrictions on non-owned properties" and it indicated to the Corps on June 5, 2009, that it owns
approximately 90 percent of this off-site acreage.
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under the plan, 44,043; 7,994; and 32,851 linear feet of streams would be restored,
enhanced and preserved, respectively. The ratio for linear feet of stream impact will meet
the requirements of the 2003 NC Stream Mitigation Guidelines (1:1 for poor quality
streams, 2:1 for good quality streams and 3:1 for excellent quality streams).
Significant Degradation
Finally, the Section 404(b)(1) Guidelines require a determination that significant
degradation will not occur to waters of the U.S. Our April 3, 2009, elevation package
highlighted our concerns regarding the magnitude of the proposed impacts associated
with the February 24, 2009, proposed permit, specifically the direct impacts to portions of
a nonriverine hardwood wetland forest on the Bonnerton tract designated as a Nationally
Significant Natural Heritage Area (SNHA) by the NC Natural Heritage Program
(NCNHP), and the indirect impacts associated with the large reduction in the drainage
basins of the site's tidal creeks, foul of which have been designated as Primary Nursery
Areas (PNAs)3 by the IBC Wildlife Resources Commission.
Significant Natural Heritage Area: The SNHA is an approximately 272 acre area
on the Bonnerton tract. The Corps' February 24, 2009, notice of intent letter to EPA
Region 4 indicated that, as part of the NC Division of Water Quality's (NCDWQ) CWA
Section 401 water quality certification, 174 acres of this 272 acre area would be avoided.
The State certification allows a 1,145 foot wide mining and utility corridor through the
connecting area with a requirement for this area to be restored pursuant to a State
approved reclamation and revegetation plan, and monitored for at least. 10 years post
mining in order to ensure that restoration has established reference hydrology for this
area. In addition, a reclamation and revegetation plan for this area is required for State
approval. The State's certification also requires the avoided area to be protected in
perpetuity with a conservation easement. The 174 acre area protected by the State's
certification represents the most mature portions of the SNHA.
The remaining 98 acres of the SNHA that was not protected by the NCDWQ's
CWA Section 401 certification consists of the northwest portion of the SNHA and a
connecting area between this portion and the southwest portion. In response to questions
from the NCDWQ concerning this portion of the SNHA, the NCNHP responded that this
area is the least ecologically significant of the three portions of the SNHA because the
patch size is smaller and the forest is less mature. We note that a study conducted for the
Applicant similarly concludes that this area was less ecologically significant. The
NCNHP concluded that the SNHA would still be considered to be a "nationally" SNHA
without the northwest portion unless, in the unlikely circumstance, another better area
s The State of North Carolina was the first state to designate nursery areas to protect the salt marshes and
estuaries along the coast that serve as nursery grounds for 90 percent of the State's fisheries. Primary
Nursery Areas (PNAs) are located in the upper portions of creeks and bays. These are usually shallow with
soft muddy bottoms and surrounded by marshes and wetlands. The low salinity and abundance of food in
these areas is ideal for young fish and shellfish. There are 80,144 acres designated as PNAs in North
Carolina. (www.ncfisheries.net/habitaYpna.htm). Tidal creeks and streams that are not formally
designated PNAs may still provide similar functions.
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was discovered in North Carolina or Virginia. [Email correspondence from Mike
Schafale (NCNHP) to John Dorney (NCDWQ) dated April 23, 2009]. Based on this
information it does not appear that the mining impacts to the remaining 98 acres would
cause or contribute to significant degradation of the SNHA.
Primary Nurse Areas: In our April 3, 2009, elevation request we highlighted
our concerns regarding the proposed project's potential indirect impacts to the site's ten
tidal creeks, four of which have been designated as PNAs for fisheries by the NC
Wildlife Resources Commission (i.e., Jacks, Jacobs, Tooley and Porter Creeks). The
functions of the PNAs most critical to supporting fisheries are their ability to provide
refuge for the larval and juvenile life stages of important commercial and recreational
species, to maintain adequate water quality to ensure survival of these life stages, and to
provide sufficient input of organic carbon and nutrients to drive the detrital food web
needed to support these life stages. Maintenance of adjacent areas in the watershed is
critical to the streams being able to support these functions.
The additional wetland and stream impact avoidance reflected in the revised
permit has been targeted to maximize protection of the four PNAs as well as a fifth tidal
creek, Drinkwater Creek, which although not formally designated as a PNA, provides
similar functions. With the additional impact avoidance in the revised permit, based on
the most recent estimates provided in the ROD, the cumulative percent of the watershed
for each of these five tidal creeks that will be impacted by mining has been reduced.
EPA continues to have concerns that reductions in watershed area of this magnitude
could potentially impair functions, particularly by affecting the hydrology and the
delivery of organic carbon and nutrients. The Corps, however, has asserted that, for these
PNAs, hydrology and delivery of organic carbon and nutrients are tidally driven as
opposed to headwater/watershed driven. Therefore, the Corps has concluded that the
reduction in watershed area will not have a significant adverse effect. The May 2008
final EIS and June 2009 ROD point to site-specific data collected on the NCPC Tract to
support this position. However, this remains a continuing concern for EPA, and we are
pleased that Special Condition S in the proffered permit incorporates additional scientific
review on this subject.
Following the elevation to the ASA (CW), EPA held further discussions with the
FWS and the NMFS to ensure that we fully understood their concerns and considered
their recommendations with respect to further avoidance actions at the permit site. The
FWS stated that while avoidance of additional wetlands at the site would have been
desirable; based on the information currently available it is not possible to clearly
quantify the impacts to the Albemarle-Pamlico Estuary, which according to the FWS is a
nationally significant resource. FWS recommended that the permit contain a robust and
enforceable adaptive management component that would provide a structured process for
addressing the uncertainty inherent in this decision and to provide decision support tools
for determining needed avoidance, restoration, remediation, and monitoring measures
through the life of the permit.
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We also discussed the project further with the NMFS. These discussions were
especially important because some of the most significant concerns which EPA raised in
its elevation and which the ASA-CW cited in his referral to the District focused on the
PNAs in the tidal creek area on the NCPC and Bonnerton tracts. In response to our
concerns, NMFS informed us that the modifications adopted by the Applicant and the
Corps following EPA's elevation bolstered NMFS' conclusion that direct impacts to
these PNAs would be unlikely. NMFS agreed with FWS on the importance of strong
restoration, remediation, and monitoring measures to promote adaptive management at
the site.
Adaptive Mana ems: We are pleased that to address scientific uncertainty and
EPA, FWS, and NMFS concerns, the Corps is requiring an extensive monitoring and
adaptive management program of both the impact and mitigation sites. According to the
revised permit, this plan will be carried out by the Applicant, with federal oversight, as a
safeguard, to modify or prohibit mining that would be allowed under the permit should
monitoring data reveal that direct and indirect impacts are greater than expected.
The Applicant will be required to monitor ground water within and surrounding
the reclamation areas to ensure that heavy metal/toxic pollutants including cadmium are
not entering the groundwater. In addition to these ground water monitoring requirements,
the Applicant will be required to develop a Plan of Study to address the effects of the
reduction in headwater wetlands on the utilization of Porter Creek, Tooley Creek, Jacobs
Creek, Drinkwater Creek, and Jacks Creek as nursery areas by resident fish and
appropriate invertebrate species. According to the revised permit, this plan will be
submitted to the Corps and NCDWQ for approval within 1 year of the issuance of this
permit.
The monitoring will be required to commence immediately upon approval of the
monitoring plan by the Corps and the State and continue for 10 years following the
completion of all reclamation work in the subject headwater creeks. The monitoring
provisions also require the establishment of an independent panel of scientists to provide
input on the design, study methods and data analysis included in the Plan of Study and to
annually evaluate whether direct and indirect impacts from mining and benefits from the
compensatory mitigation are in accordance with expectations at the time of permitting.
The challenge to implementing an effective adaptive management program will
be to successfully achieve early detection of unacceptable adverse impacts on the streams
and functions of the PNAs. As previously noted, there is uncertainty regarding the
degree to which mining significant portions of a watershed will impact the
hydrodynamics, water quality, nursery habitat and other ecological processes and
functions of the site's tidal creeks. The changes to the monitoring provisions adopted by
the Corps at the request of the NMFS are designed to provide for the early detection of
unacceptable impacts. Should the monitoring and adaptive management reveal that the
proposed levels of watershed impacts are indeed adversely impacting the functions of the
site's tidal creeks to an "unacceptable" level and the Corps does not take appropriate
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compliance action, then EPA would consider the project as a candidate for review
pursuant to 404(c).
Conclusion
EPA has fully considered the revised project in the context of C WA Section
404(c), including consideration of relevant portions of the CWA Section 404(b)(1)
Guidelines. Based on the revisions made to the proposed permit as well as the other
factors discussed above, EPA has decided that the Section 404(q) elevation process has
been resolved and has decided not to pursue review of the project as currently permitted
pursuant to Section 404(c) at this time.
We appreciate your efforts and the efforts of your staff to coordinate with EPA on
the review of this project. If you have any questions, please contact me, or Stan Meiburg
at 404-562-8357 or Jim Giattina at [phone].
Sincerely,
Michael H. Shapiro
Acting Assistant Administrator
Cc: Stan Meiburg, Administrator, EPA Region 4
Brigadier General Todd Semonite, South Atlantic Division, U.S. Army Corps of
Engineers
Sam Hamilton, U.S. Fish and Wildlife Service
Dee Freeman, NC Department of Environment and Natural Resources
Coleen H. Sullins, NC Department of Environment and Natural Resources,
Division of Water Quality
Jim Giattina, EPA Region 4

Dorney, John
From: Sullins, Coleen
Sent: Thursday, June 18, 2009 12:44 PM
To: Dorney, John
Subject: FW: PCS letter
Attachments: Final PCS Mine Closeout Letter.pdf
fyi
Coleen H. Sullins, Director
Division of Water Quality
Phone: [phone]
***********************************************************************************
Email correspondence to and from this address may be subject to the North Carolina Public
Records Law and may be disclosed to third parties.
***********************************************************************************
-----Original Message-----
From: Freeman, Dee
Sent: Thursday, June 18, 2009 10:34 AM
To: Sullins, Coleen; Smith, Robin; Thompson, Mary
Cc: Kees, Diana; Biser, Elizabeth; Wilder, Manly
Subject: FW: PCS letter
FYI
***********************************************
Dee Freeman, Secretary
N.C. Dept. of Environment and Natural Resources
1601 MSC, Raleigh, NC 27699-1601
[phone]; fax [phone]
Please note: my e-mail address has changed to dee.freeman(@ncdenr.gov .
E-mail correspondence to and from this address may be subject to the North Carolina Public
Records Law and may be disclosed to third parties.
-----Original Message-----
From: [e-mail] [mailto:[e-mail]]
Sent: Thursday, June 18, 2009 9:58 AM
To: Freeman, Dee
Subject: PCS letter
Dee, here is the final "closeout" letter on PCS which Mike Shapiro sent to Rock Salt late
yesterday. We have sent this letter to the 4 NC Congressional offices which had written in
earlier (Senators Burr and Hagan, and Congressmen Jones and Butterworth). We've also sent it
to Col. Ryscavage.
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i T:

EPA is not issuing a press release, and we in Region 4 are referring press questions to HQ.
We have a desk statement, which is below, but for most inquiries we are simply going to send
them the letter, which speaks for itself.
Thank you for your continued help and support on this project.
Stan
(See attached file: Final PCS Mine Closeout Letter.pdf)
EPA Desk Statement:
"EPA will not seek additional review of the Corps of Engineers permit to the Potash
Corporation of Saskatchewan Phosphate Division to expand an existing phosphate mining
operation. EPA concluded that the revised permit, which includes additional environmental
protections required by EPA, complies with the requirements of the Clean Water Act, and if
properly implemented, would not cause unacceptable adverse impacts to aquatic resources."
A. Stanley Meiburg
Acting Regional Administrator
EPA Region 4
Sam Nunn Atlanta Federal Center
61 Forsyth Street, SW
Atlanta, GA 30303
Office: [phone]
Fax: [phone]
Cell: [phone]
Email: meiburg.stan(@epa.gov
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