FRANKFORT — A fee increase has helped eliminate most of the backlog in state mining permits, but state regulators and mining operators say there is still room for improvement.
A year after Gov. Steve Beshear increased mining permit fees so the state could afford to hire additional staff in the state mining permit office, the backlog has declined by more than 70 percent, according to figures the Division of Mine Permits released to a legislative committee.
In November 2009, there were more than 179 permits that the agency had not acted on in the required time frame. Some coal operators were waiting six months and longer for permits that the agency was supposed to have completed in 65 days.
Allen Luttrell, director of the Division of Mine Permits, told the Interim Joint Committee on Natural Resources and the Environment on Thursday that the number of delinquent permits had dropped to 48 out of more than 520 pending applications as of Oct. 31.
That's a delinquency rate of about 9 percent.
Luttrell and others hope that by January — when more staff is hired — the number will drop to 25, or less than 5 percent of all applications.
The hiring of state staffers has been partially paid for by the industry. Frustrated by long waits for approvals, the coal operators, Beshear and legislators agreed to increase mining permit fees so the cash-strapped state could hire more people to process applications.
The increase is expected to result in an additional $1 million for the department, half of which will come from a federal match, according to information from the Division of Mine Permits.
Bill Bissett, president of the Kentucky Coal Association, said the industry, as a whole, has been happy with the agency's progress.
"We have seen marked improvement in reviewing applications" because of more training and hiring, Bissett said.
Tom FitzGerald of the Kentucky Resources Council, an environmental group, had raised concerns that an increase in new mines could overwhelm the state's mine inspectors.
FitzGerald said Monday that he had not heard of the state pushing through permits without due diligence. The council, however, has concerns about other issues, including whether there are adequate studies on the impact of mines on streams and water and whether the state is requiring miners to post adequate bonds for reclamation if mining is stopped. Environmentalists and the state are working to address those issues, FitzGerald said.
Lawsuit against EPA
But a greater problem looms for the coal industry.
Even though the state has addressed the backlog, the coal association and the state have sued the Environmental Protection Agency to stop the agency from blocking state coal permits over water pollution standards.
Previously, coal operators would pay $375 for a permit application. Under new regulations approved by the legislature earlier this year, the fees have increased to $750 to $2,500, depending on the type of application.
The Division of Mine Permits had 82 staff members on Oct. 30, 2009. It now has 96 employees and is looking to hire seven more, Luttrell said.
Still, legislators from coal-producing counties said it is taking too long for some coal operators to receive permits. And delays cost money.
Rep. Keith Hall, D-Phelps, said counties and cities depend on coal severance taxes to fuel all types of projects, from social programs to roads.
"It's our lifeblood," Hall said of the taxes.
Sen. Brandon Smith, R-Hazard, said several coal operators have questioned why it takes so long for the state to process a permit today when 20 or 30 years ago there were more coal operations but little wait for permits.
Energy and Environment Cabinet Secretary Len Peters told committee members that the due diligence staff members must perform before a permit is issued has changed dramatically. The Division of Mine Permits is part of the Energy and Environment Cabinet.
In addition to more staff, Peters said the agency wants to move to electronic permits, which would expedite the process.
"Right now it moves from desk to desk to desk," Peters said.
With an electronic copy of the permit, three staff members could be looking at the application at the same time.
The office is scheduled to begin electronic filing of all permits by Jan. 3.