Guest opinion: Mining Utah taxpayers

Scott Pruitt, the Environmental Protection Agency administrator, dropped the Obama-era rule claiming modern mining practices made an increased fiscal responsibility rule “superfluous.”

Rio Tinto, the parent company of Kennecott (KUC) which owns the Bingham Canyon Mine (the largest open pit mine in the world), was in a room with Pruitt and lobbied for this change. The move was lauded by the Western Governors’ Association claiming states already had financial responsibility requirements in place. This is not the case for the Bingham Canyon mine, the source of most of the toxics released in Utah.

While western states benefited economically from mining, taxpayers are often left with most of the cleanup costs. The Federal government created Superfund, a taxpayer funded program designed to pay for cleaning up sites with hazardous substances and pollutants in soils and groundwater. The Washington Post reported on 9/20/17: “Over the past 20 years, … taxpayers have spent more than $21 billion in cleanup and oversight costs for Superfund properties polluted by dangerous wastes, while hundreds of companies responsible for contaminating water paid little to nothing, an analysis of congressional budget data shows.” EPA Appropriations Estimates, 2016, p. V states: “Approximately 166 million people, roughly 53 percent of the U.S. population including 55 percent of all children under the age of five, live within three miles of a Superfund”.

Utah has 25 Superfund sites contributing to Utah’s rating as the third most toxic state in the country according to the EPA 2016 Toxic Release Inventory with 273,000,000 lbs. of releases. Salt Lake County contributes 250,000,000 lbs., 92% of the state total. KUC and US Magnesium, both partial superfund sites, are primary contributors.

KUC has two troublesome zones, one bordering the Great Salt Lake. Both were almost placed on the Superfund National Priorities List (NPL). The South Zone temporarily is not listed as KUC has agreed to remediate the site.

However, the North Zone NPL site is and reviewed every five years including the tailings pond, smelter, refinery, along with the contaminated “treated” water released into the Great Salt Lake. Years of mining have left contamination (e.g., cancer-causing arsenic, cadmium, lead, selenium) in soils, ponds, wetlands, and groundwater. There is not any thorough discussion in the literature of what sustainable massive industrial mining/smelting-refining/waste disposal and water treatment mitigation might mean on this scale in an urban environment.

The Bingham Canyon Mine does not have an instrument of near- and long-term financial assurance. In 2016 they spent $64,000,000 remediating according to a handshake agreement from the ‘70s.  In 2011, I made a presentation to the Utah Division of Oil, Gas, and Mining Board stating that the lack of financial assurance was shortchanging Utah taxpayers. I submitted an analysis of KUC financial assurance instruments at sites other than Bingham Canyon. KUC has a total of seven major mines that disturb 30,915 acres, for which the state has an existing amount of financial assurance of approximately $51 million, an average of $1,646 per acre, the lowest of all the western states. Professionals with years of experience estimate that cleanup costs vary from $11,000 to $50,000/acre. Given the scope and years of mining by KUC, the higher cost per acre is reasonable; the underfunding of KUC operations may be over $2B, not including revenue losses from uninhabitable lands, the revitalization of local communities, nor the cost of litigation if KUC reneges on its obligations.

Last year I commented to the Board that nothing had been done. According to inquiries by me last year, the Board had not asked for nor received financial statements from KUC to determine if it has the financial wherewithal to address near- and long-term mitigation. Yet, according to Ruland Gill, Board Chair: “It is their obligation”.

On 10/30/2017 The DOGM Board and directors of Utah’s Divisions of Natural Resources and Environmental Quality received a memo from me proposing to rectify the absence of a financial assurance instrument by requiring KUC to develop and fund a cost estimate  determine an amount necessary to cover reclamation  and closure of the KUC operations, long-term water treatment,  the loss of use and revenues for communities from uninhabitable land, the cost of litigation if KUC reneges on obligations, and that the initiative be conducted by independent and qualified parties. No word to date.

KUCs self-insured contract, a handshake, would be enforceable through costly and lengthy appeals and litigation processes if KUC reneged. Utah may be left with a huge cleanup burden without financial assurance from KUC. There is no cost to Utah by requiring financial assurance, but a huge cost if it is not required and Utah is left to clean up.