The state this week finalized new rules on coal-mining permits that include upgraded water-quality standards.
Several environmental groups argue the rules aren't strong enough, however, and are suing over one key provision.
The standards are in what is called the general permit for coal. The rules govern discharges of water from mines and coal-processing facilities into streams.
Based on various factors, coal companies must get either a general or individual permit allowing such discharges because the mine runoff can contain pollutants such as sulfates and metals. Applications for individual permits undergo greater scrutiny.
There are an estimated 2,000 entities in Kentucky under general permit coverage, compared to nearly 200 under individual permits, said R. Bruce Scott, commissioner of the Kentucky Department for Environmental Protection.
Scott said the new general permits — one for Eastern Kentucky coal mining and a separate one for Western Kentucky — include significant changes to better protect human health and the environment.
The U.S. Environmental Protection Agency has told the state the new rules are acceptable, which state regulators "believe says a lot," Scott said.
EPA's approval is significant because the agency began objecting in 2010 to permits for surface mines in Eastern Kentucky that state officials had already approved, ultimately holding up about 40.
The federal agency said proposed permits were not adequate to protect streams in the face of growing evidence that runoff from surface mines and valley fills in Appalachia hurts water quality and aquatic life.
Surface mining on the steep slopes of Eastern Kentucky typically involves blasting off the upper reaches of mountains to uncover coal seams, then putting excess rock into nearby valleys, burying sections of streams.
EPA's move to block permits added to the controversy surrounding mountaintop mining, feeding charges of an Obama administration "war on coal" in a region with few other good-paying jobs.
However, environmental groups applauded the EPA's decision as a move to protect the environment and people in a place where mining has degraded many streams, and where studies have found a correlation between mining pollution and human health problems.
State regulators developed the new general permit with an eye toward resolving EPA's objections.
The permit includes a new requirement for coal companies to test discharges for toxicity, and mandates increased biological and chemical monitoring to check streams for conductivity, an indicator of the level of contaminants in water.
It also includes a new rule for companies to do trend analyses on water samples, and, if water quality declines, to review their practices for controlling pollution.
The permit requires companies to apply for individual permits for any discharge with concentrations of metals with a reasonable potential to exceed water-quality standards.
The rules also will allow people to sign up for notification of when a coal company files a notice that it intends to apply for a general mining permit, and of when the state takes final action on the permit.
The state posted those notices on the Internet before, but wanted to improve public notice, Scott said.
"We wanted to change that to put as much daylight and transparency in the process as we could," Scott said.
The permit also requires electronic reporting of water-quality tests coal companies have to do, with the results publicly available.
The permit keeps a requirement for coal companies to seek an individual permit for any discharge within five miles upstream of a water-system intake.
That provision was in the old general permit. Regulators dropped it from the draft of the new permit but put it back after hearing concern about the change.
The five-mile limit has helped citizens in their effort to block a request by a coal company to surface-mine on the flanks of Black Mountain, above the historic mining town of Lynch, according to Tom FitzGerald of the Kentucky Resources Council.
One piece of the new general permit, on selenium testing, is at issue in a federal lawsuit.
The EPA last year let the state switch from making coal companies test for selenium in water to test instead for concentrations in fish tissue.
Environmental groups sued, arguing the new method will not adequately protect all streams and all aquatic life.
Several environmental groups acknowledged this week that the new general permit is an improvement over the prior rules, but said they still have concerns.
In addition to the selenium limit being hard to enforce, the permit will not do enough to control conductivity because it does not set a firm limit, environmentalists argue.
Environmental groups have also said the state has not set adequate limits on pollution based on the condition of the stream receiving mine runoff, meaning streams could become more impaired.
"The permit is not gonna be sufficiently protective," said Judith Petersen, of the Kentucky Waterways Alliance.
Several groups also complained that it is improper to allow surface mining in Eastern Kentucky under a general permit because it limits opportunity to comment on the proposed mine and does not take into account the varying environmental conditions at each site.
"A blanket permit allowing corporations to pollute is completely inappropriate," said Alice Howell, a member of the Sierra Club's Cumberland Chapter in Kentucky.
Scott said it is not practical or necessary to have an individual permit for each mine.
The coal industry expressed concern about the new permit driving up water-testing costs, but supported putting a new general permit in place.
The permit should resolve the impasse between the state and EPA that has held up mining permits "and contributed significantly to the decline of coal production in Eastern Kentucky," Bill Bissett, president of the Kentucky Coal Association, said Wednesday.
Coal production and jobs have gone down sharply in the region because of a number of factors, including tougher federal regulation and competition from natural gas and other coalfields.
Whether mining projects could start or expand under the new rules will depend largely on the market for coal.