Mountain-top mining has probably generated more controversy in the United States than any other current resource extraction process, and recent USEPA activities have significantly increased attention to the process. Before discussing the regulatory developments, some background information may be helpful. Mountain-top mining is utilized to remove low-sulfur coal from the tops of mountains in the Appalachian region. The mining company timbers the mountain-top and removes the topsoil. The company then uses explosives to remove the overburden rock to expose the coal seams. The overburden is typically pushed into a nearby valley, creating a valley fill. The coal is excavated and washed (creating a significant amount of coal slurry waste), and the top of the mountain is reclaimed and revegetated. The process results in permanent changes to the topography and permanent impacts to the regions streams and water quality.

Mountain-top mining is allowed under section 515(c)(1) of the Surface Mining Control and Reclamation Act (SMCRA). However, in order to deposit the overburden into the valley, and the valley watershed, the mining company must obtain a permit from the U.S. Army Corps of Engineers (USACE). A permit is required under section 404 of the Clean Water Act (CWA) in order to discharge dredged or fill material into the waters of the United States. The permit is issued by the USACE using the guidelines developed by the Environmental Protection Agency (EPA). Under Section 404(c) of the CWA, the EPA has the authority to deny a permit for the discharge of dredged or fill material if it determines that "that the discharge of such materials into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas (including spawning and breeding areas), wildlife, or recreational areas."

Until recently, EPA has not invoked its authority under section 404(c) to limit or stop mountain-top mining. However, two recent decisions on proposed mining projects indicates that this situation may change. EPA issued letters to the USACE regarding two proposed mining projects, one in Kentucky, and one in West Virginia. For the Kentucky project, the EPA indicated that it believed the proposed project did not adequately avoid and minimize the impacts on the watershed, and that the proposed mitigation will not adequately offset the persistent and permanent impacts to the aquatic ecosystems' communities and functions. EPA was even more direct in the letter regarding the project in West Virginia. EPA stated that it believed the project required an environmental impact statement pursuant to section 102 of the National Environmental Policy Act (NEPA). Under NEPA, any project which requires federal agency action must be evaluated by the agency to determine if the environmental impacts of the project are significant. If the agency determines that there is no impact, it issues a Finding of No Significant Impact (FONSI). If there is an impact, it becomes necessary to prepare an environmental impact statement (EIS).

Even more significant, the letter indicates that because of the cumulative and other impacts of the proposed projects, there is a high potential that EPA would use its authority under section 404(c) of the CWA to prohibit the issuance of a 404 permit for the discharge of fill from the project. If followed through, it would effectively end the project, as the mining company would be unable to dispose of the overburden created during mining.

The letters created such a controversy that EPA had to issue a press release stating that it were not "halting, holding or placing a moratorium" on mining permit applications. While this may be true, the effect of requiring the preparation of a full EIS in the case of mountain-top mining may have the same effect as a moratorium. The preparation of an EIS can be complex, time consuming and subjects the project to public review and scrutiny. Furthermore, an objective evaluation may show that the environmental costs do not outweigh the project benefits, and the decision may be to not issue a permit.