Law to Halt Strip-Mining Abuses Is Widely Ignored : Abandoned Claims Deface Appalachia Mountain Slopes

It was seven years ago that a self-styled developer named Peyton Smith began blasting away the side of a mountain overlooking the nearby Rockcastle River for what he proudly boasted would be “a fancy condo development for rich New Yorkers.”

Today, all that remains of that project--which Smith had dubbed “Sportsman’s Paradise”--is a violent gash in the earth, scarred with the tracks of strip-miners’ bulldozers and spilling piles of ugly rubble down the slope.

There are no condos, nor were there ever meant to be. For all his boasting, Smith’s grandiose plan was nothing more than a scheme to strip-mine the lucrative layer of coal beneath the surface of the mountain without being burdened with the usual environmental precautions.

Such flagrant practices, once commonplace in the Appalachia coal country, were supposed to come to an end under a landmark federal strip-mining bill signed into law in 1977, the year before Smith started blasting.

That legislation, which won approval only after a decade of bitter congressional struggle, set stiff rules for strip-mining operations. It requires, among other things, that the land be restored to approximately its original contour and that adequate precautions be taken in mining to prevent problems such as sediment runoff and acid drainage.

Pattern of Abuse

A look at the strip-mining heartland of eastern Kentucky illustrates, however, that the law has fallen far short of its promise. A pervasive pattern of abuse has emerged over the last eight years, overshadowing the abundant examples of good reclamation and casting serious doubt on the effectiveness of federal and state enforcement efforts.

Much like the moonshiners, who work in these same hills, hordes of “wildcatters” operate outside the law. They leave behind untold numbers of abandoned mines with their large, exposed cliffs or “highwalls,” black pit floors and piles of debris that give the land the appearance of a moonscape. Hundreds of legitimate operators have successfully ignored federal orders to repair damage to land and water.

Schemes to circumvent reclamation standards have proliferated. State inspectors often wink at violations, and millions of dollars in overdue fines and reclamation fees remain unpaid.

Advocates of rigorous strip-mining regulation say the picture is so unsettling that they often feel as if they were back at square one.

“We are definitely backsliding,” said Thomas J. FitzGerald, an environmental attorney with the Frankfort-based Kentucky Resources Council who has been in the forefront of the fight against strip-mining abuse.

L. Thomas Galloway, a Washington attorney who has headed many successful legal challenges to attempts to sap the law, likened the abuses to the “massive resistance” of white Southerners to school desegregation orders and civil rights legislation during the 1950s and 1960s.

Disturbing Proportions

Publicly, coal industry spokesmen tend to play down the problem, and brand most abuses as unscrupulous acts of a venal minority. But privately, many concede that the violations have grown to disturbing proportions and that action must be taken to combat them.

“We want to get the outlaws out of the business, too,” said one industry lobbyist. “We have no sympathy for wildcatters. We have no sympathy for people who don’t pay their back fines and fees. They give the industry a bad name.”

The two sides differ radically, however, over the causes of the excesses.

Environmentalists charge that lax enforcement, gross mismanagement and “malign neglect” on the part of state and federal regulators have played a major role. Industry spokesmen say the chief fault is the law itself. The rules are so overly demanding and rigidly drawn that they invite abuse, they contend.

“It’s as if the federal government were trying to create a whole new class of criminals,” said Daniel R. Gerkin, president of the Mining and Reclamation Council, a Washington-based lobby representing strip-mine operators.

Wherever the truth lies on that issue, the toll on the environment is painfully evident.

6,000 Mines Unreclaimed

In the last eight years, 6,000 mines ranging in size from two acres to 40 acres, many of them in eastern Kentucky, have been left unreclaimed, according to federal officials and environmentalists.

“The damage they can do is all out of proportion to their size,” Galloway said. “One five-acre mine can easily devastate a 100-acre area through erosion, landslides and toxic discharge.”

The quality of human life has also suffered. In the rural Laurel County community of White Oak, for example, the well water of at least two families, and perhaps as many as 14, has been polluted beyond use as a result of the improper disposal of toxic materials at a nearby strip-mining operation, a preliminary federal investigation recently concluded.

“We’re living primitively--eating off paper plates, heating up water on the stove, driving 60 miles round-trip twice a week to my mother’s to fill up our plastic water jugs,” said Sandy Reynolds, 38, describing her family’s daily routine. “And it’s been this way for the past four years.”

Internal Disorders

Reynolds, whose well water has turned a murky reddish brown and was one of the two cases the federal test definitely linked to the mine, is one of several residents who have complained of internal disorders that may be linked to the polluted water.

The strip-mining abuses have ranged from outright lawlessness to elaborate schemes employing shell companies and “front” men.

One of the most prevalent involves the so-called “two-acre exemption.” That is a provision written into the federal law exempting strip-mining operations of two acres or less from all federal reclamation regulations. It was designed to ease the financial burden on “one-man” operations or “pick-and-shovel” jobs.

Many bigger companies and even some giants of the industry have exploited this loophole by putting together a series of two-acre sites in what environmentalists describe as a “string of pearls.” Out of an estimated 1,800 two-acre exemptions granted in Kentucky since 1978, 60% to 75% are in violation of the law, environmentalists and federal officials say.

Abuse of this exemption has also been rampant in southwestern Virginia and northern Tennessee, where about 1,200 exemptions have been granted so far.

‘Two-Acred’ to Death

Seen from the air, the typical “string of pearls” looks more like a string of bomb craters pockmarking the landscape. One southeastern Kentucky mountainside is so devastated that a federal inspector was prompted to remark caustically during a recent helicopter flyover: “They’ve ‘two-acred’ that mountain to death.”

The state of Kentucky, which has primary responsibility for regulating strip mining under the “state primacy” provisions of the federal law, acknowledged the mounting “two-acre” abuse belatedly, but has since adopted most of a task force’s recommendations to combat the problem.

Another favorite scam revolved around Kentucky’s interpretation of a provision in the federal law exempting “federal, state or local government-financed highways or other construction” since such activity was regulated by other environmental laws.

Kentucky officials construed the phrase “other construction” to mean any other construction, whether public or private. This unfortunate policy decision opened the floodgates to hundreds of exemptions for mythical shopping centers, housing developments and subdivisions in the Kentucky boondocks--among them Peyton Smith’s condo retreat, “Sportsman’s Paradise.”

The state eventually repealed the construction exemption after a federal study of 100 such sites found that 80% of them were spurious.

“I knew those condos weren’t ever going to be built,” said 79-year-old Ethel Gabbard, who lives with her husband in a handsome white concrete-block home on the hill directly above the “Sportsman’s Paradise.” ’I’m sorry now I didn’t get out there with my shotgun the first time I saw Smith’s people walking around down there.”

Blasting Damaged Home

The blasting left her home with broken windows, cracked plaster and a leaking basement. Smith’s bulldozers also destroyed the only access road from her house to the main highway.

Until the county repaired the damaged road recently, she was forced to run errands by arranging for a friend or relative to meet her in a car at the bottom of the hill. She then had to hike half a mile down a steep, wooded back trail--in good weather and bad--and climb a barbed-wire-topped fence to reach the waiting vehicle.

The Office of Surface Mining, the federal agency set up to oversee the strip-mining law, has become so alarmed at the abuses in Kentucky that is has considered exercising its legal power and yanking the state’s “primacy.” Two other states--Tennessee and Oklahoma--have had the direction of all or part of their program taken over by the federal government.

In a review last December of Kentucky’s program, the federal agency said that state inspectors were writing up only one violation out of every 14 they actually saw and that they were inconsistent in levying fines.

The state has denied the charges.

Agency’s Stormy History

Congressional critics and environmentalists say Kentucky’s problems simply reflect the larger problems in the Office of Surface Mining itself. The agency has had a stormy history, with six directors in seven years, four of them since President Reagan took office.

“OSM is a disaster area, said Rep. Morris K. Udall (D-Ariz.), House Interior Committee chairman and “father” of the 1977 law. “Fortunately, the condition is not terminal, but it’s going to take a mean s.o.b. to go in there and change things.”

The agency has always seemed overwhelmed by its task. In 1980, for instance, the agency threw up its hands and said that it was going to write off $50 million in back fines and penalties on ground that it had become “unrealistic” to collect them.

Environmentalists fought back with the so-called “megabucks lawsuit” and won an agreement requiring the Office of Surface Mining to collect all outstanding fines and take civil actions against the violators.

Watt’s Reorganization

The arrival of James G. Watt as secretary of the Interior in 1981 threw the agency into further confusion. In a massive reorganization of the office, Watt cut funds, closed field offices, reduced the number of inspectors and rewrote 90% of the strip-mining regulations.

Industry applauded Watt’s moves, saying that they would bring “rationality” to the game and help keep strip-miners competitive in domestic and world markets. But environmentalists said the measures were designed to obliterate the law and turn the clock back. “Watt was charging around like a blind samurai with a meat ax in a butcher shop,” said FitzGerald of the Kentucky Resources Council.

A lawsuit by the National Wildlife Federation was successful in getting about 70% of the Watt rules reversed. A report in July by the House Government Operations Committee urged that Congress consider taking the Office of Surface Mining out of the Interior Department if the agency does not show improvement in its handling of the program within six to nine months.

Among other deficiencies, the report said, uncollected fines and fees for which the office is responsible have mounted from $150 million in early 1984 to around $200 million now, while the rate of collection of new obligations has declined from 9% to 7.8%.

Meanwhile, industry spokesmen contend that it is the “heavy-handed” regulation by OSM and the “punitive nature” of the strip-mining law that are pushing many operators to the breaking point, especially those with small or medium-sized companies on narrow profit margins.

“This is a very competitive business,” said Bill K. Caylor, vice president of the Kentucky Coal Assn. “The big operators can manage to follow the law and stay afloat. But the smaller operators are finding it damn near impossible.”

That viewpoint was echoed by Cecil Gibbs, a coal operator in his 40s from Middlesboro, a southeastern Kentucky coal community of 12,250. Gibbs is in the process of shutting down the firm, Les Juan Corp., that has been run by members of his family since the 1940s.

“Between the market and the law, a good guy can go broke,” said Gibbs, who won a 1976 state reclamation award and is widely acknowledged as a conscientious and law-abiding operator. “We need some relief from the law. And I’m not talking about a major overhaul--just a little relief.”

But so far, it is hard to see where environmentalists and industry representatives can find common ground. “They’re afraid to give in an inch to us because they think we’ll take a mile, and we’re afraid to give in an inch to them because we’re afraid they’ll take a mile,” said Galloway, the Washington attorney, expressing a common sentiment on both sides.