This case has been on a roller coaster since 2007 when the Corps of Engineers issued a Section 404 permit allowing a large surface mine to operate in West Virginia (UP). In 2009, well after the mine had begun development and significant capital had been invested, EPA announced that it would revoke parts of the permit (DOWN) – not because of violations of the permit – but because they decided it was not protective enough. The US District Court agreed with industry that retroactively revoking the permit was not supportable (UP). The D.C. Circuit Court upheld EPA’s action based on their reading of the language of the Clean Water Act (DOWN).
With the announcement by the Supreme Court that they will not hear the appeal of the Circuit Court decision (DEAD END – RIDE OVER), we now know that your permit, even if you are in compliance, is not a sure thing. EPA – and potentially other agencies – can change their minds, or change administrations, and the certainty of your investment in a project can turn to dust.
The impact of this decision on the availability of capital investment to projects subject to this kind of permitting may be enormous. In our experience, no significant project will reach financial close without being able to show that it has obtained or is highly likely to obtain all its environmental permits. That is a primary due diligence subject for capital investment. This decision supporting EPA’s ability to revoke a permit without cause removes certainty and will likely endanger economic development.