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Non-meandered Waters – Chapter 2

Posted by David Ganje - January 31st, 2018

The non-meandered waters law of 2017 is about to slide into long-term legal acceptance by the state legislature. A bill is now pending before the 2018 legislature to extend the life of this new set of statutes.  The non-meandered water law passed last year at a special session of the legislature is an error-ladened compromise which, if continued without correction, will indeed slide into an indifferent acceptance by the state. The purpose of the law is to open up temporary bodies of water to public use.  The law has several good points and is an effort to fix a very unique set of challenges presented by Mother Nature.  It also has several clear problems.  Its provisions do not have a proper definition of the owner of land, creates different rules and rights for different landowners, does not allow for setbacks and does not provide for a quiet time for recreational use of the waters.  I outlined these and other problems in my open letter to the legislature:  http://www.capjournal.com/opinions/columnist/a-bill-of-particulars-for-the-legislature/article_ce1b72ee-563e-11e7-93d2-67b295d08c1a.html

This new water law created two sets of laws for non-meandered lakes. The rights, duties and liabilities of landowners under the law’s particularly designated non-meandered lakes are not the same as the rights, duties and liabilities as those of the landowners under all other non-meandered lakes.  Many of the non-meandered waters are over private land.  The management of non-meandered waters has a more significant, direct and personal impact on private landowners than do other public bodies of water in the state.  That is why the special legislative session gave authority in the law to the Game, Fish and Parks Commission to write rules to make everything ‘all right.’  The GFP Commission created new rules.  Those rules tell a certain class of landowner how he might petition the Commission to take his public property off the list of waters over which sportsmen might hunt and fish. The waters in one class are automatically, under the 2017 law, open to hunting and fishing.  The petition process allows for no real due process.  The rules were written poorly. The legislature should correct this. It should discharge its duty and not rush to a muddled consensus on important property rights issues.

In the Fall of 2017 several landowners in Marshall County wanted a 100 yard setback of public activity on the non-meandered water covering their property.  They were caught in a legal trap created by the legislature and enforced by GF&P.  What they sought was not unreasonable.  In fact the new law permits creating a setback for other non-meandered landowners who may do it on their own initiative. Nevertheless the water over the owner’s Marshall County land was a part of those water bodies the legislature declared to be ‘automatically’ open to public use and access.  The owners of other non-meandered waters in the state can put up access restrictive buoys and create a setback.  But these Marshall County landowners had to petition the GFP Commission before they might do this very act because their land fell within the ‘automatically open’ class of lakes.  Additionally these landowners had the legal burden of proof to show that what they wanted was justifiable.  Such a burden of proof is not required of other non-meandered landowners.  In November the Commission denied the request stating that the landowners had not met their burden of proof to show why such a setback should be granted.  Property rights are not an experiment.  This law should not be treated like an experiment in resource management. A system creating a second class of landowners who are required to meet a higher legal benchmark to do something their neighbors can already do, all on non-meandered bodies of water, should not be tolerated in a just system.

 

David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law


How not to transfer real estate and mineral interests

Posted by David Ganje - January 31st, 2018

It’s not your father’s Oldsmobile anymore:  the world of real estate and mineral interests has changed.  Yet, in the law, adherents to customs abound aplenty.  Keeping, transferring and ‘devising’ real estate and mineral interests is not what you were taught.  Following long-standing old usages can result in modern mistakes.  Let me provide but a few examples.

  1. Old practices die hard. The old practice of a current deed simply cutting and pasting some prior deed language is risky business. A prior deed holder’s assertion in a deed that he owned something does not make it so.  In a case this year the SD Supreme Court ruled that current property owner’s reliance on their deed and on prior recorded deeds which asserted that an easement existed was wrong.  The reason?  Historically no party had ever properly created or declared the so-called easement.  That’s a big problem for the current owners.  Do not blindly rely upon the historical chain of title.  Just because your father told you Oldsmobiles are the best cars made, you had better check.  Oldsmobiles aren’t made anymore.
  2. Christmas gifts and girlfriends.  In South Dakota you cannot convey to a purchaser but still reserve back as a Christmas gift an interest in the property in favor of your current or future girlfriend.  Yes, this has happened.  Reservations in a deed in favor of a third party do not work.  Nevertheless there are modern statutes authorizing the use of a deed outside of probate by which you can designate recipients to the property upon the expiration of your ‘credit card.’   When done correctly it is an alternative to formal estate planning.  This procedure is not used enough although it is less expensive than other estate planning tools.
  3. Caveat Emptor is for fools. All buyers require special attention.  I insist that my commercial and ag sellers comply, at a minimum, with similar a disclosure report following the disclosures required for residential sales.  I also require that a buyer of property which includes mineral interests make a representation that he has himself researched the value of the interests.  When selling real estate do not allow for a small item to become a deal breaker.  Over-disclose.  I know of a transaction where the seller did not disclose that an end-of-life event had occurred in the cistern of a property.  This could have canceled the deal.  On the obnoxiously humorous side, in a large transaction involving land and buildings, the buyers at the closing table were petty and complained about holes in the wall of the residence.  The small holes were caused by the removal of the seller’s hanging pictures.  At the closing table I volunteered that the holes came with the sale.  This comment could have canceled the deal.  Disclose. Disclose.  A transaction is not the same as a first date when one suggests to the date that he is a professional baseball player.  Disclose and be truthful.
  4. Getting title insurance is daredevil business. The use of title insurance is common today.  Advising a land or commercial client to only obtain standard title insurance is to invite a malpractice claim.  Under South Dakota law standard title insurance insures against “loss by encumbrance, or defective titles, or invalidity, or adverse claim to title.”  Standard title insurance has significant limitations.  Generally speaking, title insurance covers only whether the owner has good ‘legal title’ to the land. Title insurance will not cover the physical state or condition of the land.  Mineral interests and mineral ownership are not covered by title insurance.  The existence of environmental contamination is not an insured event.  The existence of zoning laws or related covenants which restrict the use of property are not an insured condition.  One court has held that, “zoning or environmental laws of general application, which are not recorded against specific parcels of property, are generally excluded from standard form ALTA title insurance policies . . .”  There is an important difference between having good legal title —  and the physical condition of the land itself.  One can obtain perfectly good insured legal title to valueless property.  That’s why you hire a lawyer.

 

David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law.


South Dakota Underground Trespass

Posted by David Ganje - January 1st, 2018

South Dakota courts have not to the date of this opinion piece adopted a definition, nor have the courts ruled on the civil wrong called ‘underground trespass.’  Yet going back to 1877 South Dakota territorial real estate law holds, “The owner of land . . . has the right to the surface and to everything permanently situated beneath or above it.”  Beyond this definition of land ownership the legislature has not acted on the issue of underground trespass.  Even though South Dakota has no case law on the subject, the state supreme court has a known preference for following a particular legal treatise when deciding legal cases.  This treatise clearly defines civil trespass as a wrongful intrusion on one’s property committed on, beneath, or above the surface of the earth with an exception that relates to airspace intrusions.

I leave for another discussion whether the upstanding property-owning residents of Lead and the reputable denizens of Deadwood might, under modern law, be the victims of underground trespass because of the honeycombed labyrinth of old mining tunnels running every which way under the surface of these fine cities.  In point of fact most incidents of underground trespass occur out on the plains.

How does underground trespass occur on the plains?  Without belaboring a lot of examples, this might occur from underground pipeline leaks, leaking or corroded underground storage tanks, overzealous oil operators infringing a bit too far under unleased property, a so-called disposal well’s ‘waste fluids’ migrating beyond its permissible subsurface boundaries, and so forth.

Is a man’s subsurface his castle?  Maybe.  A Nebraska Court addressed the issue of subterranean trespass.  The court held that the operator of an injection well could be liable if the damaged party could show that fluid migration harmed the damaged party’s ability to produce oil.  The North Dakota Supreme Court has ruled that a claim in underground trespass may be trumped by a properly obtained force-pooling order from the state authority which oversees gas and oil operations.  In the North Dakota case it must be noted that the claimant property owner did not allege any actual damage to his interests. That claimant was about as smart as the guy who takes a lady out on a date without enough pocket money to buy the coffee. A West Virginia court, in a case that was finally settled and dismissed, ruled that subsurface horizontal fracturing for minerals very close to a Plaintiff’s property line was to be considered underground trespass.  The lesson is that modern society and the laws that follow it will consider the issue of trespass on more than just the surface of property.

In addition to underground trespass claims other types of legal claims based on subterranean intrusion are nuisance, negligence, or strict liability.  The question then is:  What could the actual damage be to subsurface property from such an intrusion?  Answers to this include contamination of existing water rights, wrongful taking of a property owner’s mineral rights, contamination of surface soil productivity and degradation of an owner’s foreseeable rights to mineral extraction.  I submit that these subsurface intrusions will – if they have not already – occur in the state.  There will be much work for the courts to do.

David Ganje. David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law. The website is Lexenergy.net

 

 


Wind turbine ordinances revisited

Posted by David Ganje - November 15th, 2017

Walworth County passed a new wind turbine Zoning Ordinance this past spring.   It is a comprehensive planning and zoning ordinance which holds the ominous name of Ordinance #2017-1. What is the most controversial provision of the ordinance?  Wind turbines must meet the following minimum spacing requirements:  A distance at 10,560 feet or 2 miles from existing off-site residence, business and churches.  The distance from other existing buildings or structures shall be at least 1,000 feet with distance from on-site or lessor’s residence shall be a least 500 feet.  Is it reasonable? Yes. These terms require a greater setback than several other wind project ordinances in North and South Dakota. It is also contrary to the South Dakota Public Utility Commission’s ridiculously inadequate recommendation of a 1000 foot setback.  The ordinance was challenged; first by petitions for a special election by county residents, and then by a court challenge which invalidated the petitions. Welcome to America.  I would prefer that a special election of Walworth County residents go forward, but that is not the subject of today’s sermon.

This opinion piece discusses the terms of the ordinance not the pending legal procedures.  I am not involved in the legal challenge to the ordinance.   Let us remember that all politics is local. Indeed, all planning and zoning politics should be local. One cannot compare the wind tower setback of ‘two miles’ for Walworth County with ordinances written for Lincoln County or other South and North Dakota counties. Why the difference? Population densities are different. Topography is different. Traffic patterns for road and highway use are different.  Local economies and local communities are always unique: What percentage of an affected wind farm area is ag?   What percentage of effected land is industrial or commercial?  What are the preferences of the local community and its political leaders?  All this is very relevant and sui generis to the county.

A nationally recognized expert in property valuations and land use evaluations, Michael S. McCann, has used a recommended two-mile minimum as a benchmark for turbine setbacks in his advocacy. He uses a ‘use and enjoyment’ argument regarding surrounding properties. His arguments regarding setback terms merit consideration.

Is the proposed Walworth Ordinance perfect? No. It contains certain errors and general provisions that do not necessarily fit the locale. It is part template and part editing from other ordinances. Is it better than the prior ordinance? Yes. Is it workable? Yes. Could it use improvement? Please don’t ask my ex-girlfriend about making improvements.

Does wind power have a place in the region’s economy?  Indeed it should and it does. Consider the local economic effects of a wind farm.  I will leave for a separate discussion significant and relevant environmental impact and risk issues which matters should also be properly and concisely addressed in any proposed project plans. What are the local economic benefits of a wind project? 1. Landowner rental payments. 2. Initial construction jobs. 3. Some additional regional long term employment. 4. Limited albeit local redistribution of tax collections. 5. Wind projects put minimal strain on local government on matters of law enforcement, or on increased costs to maintain local school districts. Brookings County has 140 wind turbines. I know of no farmer or politician in Brookings County who complains of the many turbines in the county. 6. I have not experienced one case of an actual reduction in agricultural or livestock production caused by a nearby wind farm in either state.  And I know of no evidence that the value of agricultural or ranch land is reduced by operating wind turbines which are properly maintained.  Nevertheless it is my opinion (notwithstanding a 2009 US Department of Energy study to the contrary) that residential property values located close to wind turbines are negatively affected by the presence of nearby turbines.

Perfect legislation and rule-making are not achievable on this earth. The Walworth Ordinance has imperfections.  I would place other safeguards and standards in the ordinance. It is nevertheless a good step forward, and brings into today’s world the 1983 Walworth County Zoning Ordinance. The proposed ordinance is a modern, good effort toward rule-making oversight for wind farms.

David Ganje practices in the area of natural resources, environmental and commercial law in South Dakota and North Dakota.


How not to transfer real estate and mineral interests

Posted by David Ganje - November 1st, 2017

It’s not your father’s Oldsmobile anymore: the world of real estate and mineral interests has changed. Yet, in the law, adherents to customs abound aplenty. Keeping, transferring and ‘devising’ real estate and mineral interests is not what you were taught. Following long-standing old usages can result in modern mistakes. Let me provide but a few examples.

1. Old practices die hard. The old practice of a current deed simply cutting and pasting some prior deed language is risky business. A prior deed holder’s assertion in a deed that he owned something does not make it so. In a case this year the SD Supreme Court ruled that current property owner’s reliance on their deed and on prior recorded deeds which asserted that an easement existed was wrong. The reason? Historically no party had ever properly created or declared the so-called easement. That’s a big problem for the current owners. Do not blindly rely upon the historical chain of title. Just because your father told you Oldsmobiles are the best cars made, you had better check. Oldsmobiles aren’t made anymore.

2. Christmas gifts and girlfriends. In South Dakota you cannot convey to a purchaser but still reserve back as a Christmas gift an interest in the property in favor of your current or future girlfriend. Yes, this has happened. Reservations in a deed in favor of a third party do not work. Nevertheless there are modern statutes authorizing the use of a deed outside of probate by which you can designate recipients to the property upon the expiration of your ‘credit card.’ When done correctly it is an alternative to
formal estate planning. This procedure is not used enough although it is less expensive than other estate planning tools.

3. Caveat Emptor is for fools. All buyers require special attention. I insist that my commercial and ag sellers comply, at a minimum, with similar a disclosure report following the disclosures required for residential sales. I also require that a buyer of property which includes mineral interests make a representation that he has himself researched the value of the interests. When selling real estate do not allow for a small item to become a deal breaker. Over-disclose. I know of a transaction where the seller did not disclose that an end-of-life event had occurred in the cistern of a property. This could have canceled the deal. On the obnoxiously humorous side, in a large transaction involving land and buildings, the buyers at the closing table were petty and complained about holes in the wall of the residence. The small holes were caused by the removal of the seller’s hanging pictures. At the closing table I volunteered that the holes came with the sale. This comment could have canceled the deal. Disclose. Disclose. Disclose. A transaction is not the same as a first date when one suggests to the date that he is a professional baseball player. Disclose and be truthful.

4. Getting title insurance is daredevil business. The use of title insurance is common today. Advising a land or commercial client to only obtain standard title insurance is to invite a malpractice claim. Under South Dakota law standard title insurance insures against “loss by encumbrance, or defective titles, or invalidity, or adverse claim to title.” Standard title insurance has significant limitations. Generally speaking, title insurance covers only whether the owner has good ‘legal title’ to the land. Title insurance will not cover the physical state or condition of the land. Mineral interests and mineral ownership are not covered by title insurance. The existence of environmental contamination is not an insured event. The existence of zoning laws or related

covenants which restrict the use of property are not an insured condition. One court has held that, “zoning or environmental laws of general application, which are not recorded against specific parcels of property, are generally excluded from standard form ALTA title insurance policies . . .” There is an important difference between having good legal title — and the physical condition of the land itself. One can obtain perfectly good insured legal title to valueless property. That’s why you hire a lawyer.

David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law.


CAFOs in South Dakota

Posted by David Ganje - October 19th, 2017

‘We used to do things for posterity.  Now we do things for ourselves and leave the bill to posterity.’  Signs of this attitude are seen in the current and historical misuse (and mismanagement) of the state’s waters.  Both groundwater and surface waters of the state are held in trust by the government for the benefit of the citizens of the state.  Waters of the state are affected by CAFOs.  CAFOs are governed by South Dakota law as well as local county ordinances.  In this opinion piece I will show how state and county governments have dropped the ball regarding CAFO regulations.  CAFOs can effect both groundwater and surface waters.  I discuss in this piece requirements for financial responsibility of a CAFO, and how that can affect the waters of the state.  This piece is not a conversation on the pros and cons of a CAFO or of its economic efficiencies.

The purpose of ‘financial assurance’ is to secure the testing and replacement of any potentially contaminated wells and water within areas near a CAFO, and to ensure proper closure of a CAFO should the operator elect to close or should the closure occur for some other reason.  Oklahoma by way of example has a financial assurance requirements which are reasonably fair from both the operator’s and the public’s perspective.

Why require financial assurance of a business which affects the environment?   There are plenty of examples of businesses shutting down and not cleaning up after themselves.  South Dakota requires financial assurance terms for oil well permits, for mining operations, for
sand and gravel permits, for wind turbines, but not for CAFOs. This noticeable absence of financial terms is also followed by counties who hold legal authority over CAFOs. Consider the current status of surface water in the state.  This is from the state’s official 2016 assessment of surface water quality:  “Currently, 21.3% of the assessed stream miles fully support all assigned beneficial uses; a decrease from 30.6% in the 2014 Integrated Report. 78.7% do not presently support one or more uses. The high percentage of impairment can be attributed largely to high levels of TSS, E. coli, and fecal coliform bacteria.”   Groundwater is also put at risk by CAFO operations.  In a 2006 study in Idaho samples from six private wells formerly used as sources for drinking water by the residents of a nearby CAFO were collected to assess the impact on the quality of the local groundwater.  The samples were found contaminated by antimicrobials and also contained elevated concentrations of nitrate and ammonium.  It is telling that South Dakota requires monitoring wells for 96 CAFOs. My concern is practical.  To whom do the neighbors turn if a CAFO cannot clean up contamination at the closure of its operations?  Discussing a CAFO Chapter 11 bankruptcy filing in Indiana, a local newspaper reported, “If a CAFO ceases operations, the state of Indiana apparently has no way to ensure an environmental cleanup because the state does not require owners/operators of CAFOs to provide financial assurance for closure.”

What happens in an abandonment of the operation, in a Chapter 7 Bankruptcy filing, or in a closure when the operation has no capital?  How does an agency hold such an operator responsible for clean up?  In this arena state and local governments have indeed dropped the ball.

Both state and counties have broad jurisdiction over writing CAFO laws and regulations.  Both write and oversee permitting.  The difference between state and county jurisdiction is not as important as the fact that they fail to deal correctly with an exit plan, also known as financial assurance, for CAFOs.   CAFO laws are complicated.  They involve providing soil and water data, nutrient management plans, buffer zones, maintaining effluent limits, hiring an engineer to ‘certify’ an operation, setback requirements, water right permits, surface water discharge permits, rules for treatment ponds or lagoons and so forth.  Taken together these laws can be called a code.  A code is a comprehensive set of rules meant to be a complete system in a particular area of law.  But in South Dakota it doesn’t.

State permitting rules require no environmental insurance or other type of financial assurance for a CAFO.  CAFOs are permitted in the following counties but the counties have no financial assurance requirements:  Minnehaha County, Lawrence County, Brown County, Spink County, to name but a few.  Clay County requires insurance in an unspecified amount to take care of closure and clean-up.  Brookings and Hughes require environmental insurance with a $100,000. minimum.  The efforts of these counties are very incomplete but do start to recognize a way to remedy the risks.

In testimony to the US Senate the USGS Associate Director stated, “The USGS has found CAFOs to be a source of nutrient, pharmaceutical, and metal contaminants in nearby waters and lands receiving wastes.”   Are state and county officials in charge of the stewardship of public waters in favor of continued indifference to clean, potable, usable water?

David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law.


Covet not thy neighbor’s water

Posted by David Ganje - October 4th, 2017

Here we go again. The South Dakota Supreme Court decided another case this summer on surface water drainage.  It is the perennial water problem in the state:  some have too much water and some have too little.  Neighbor versus neighbor.  Mother nature does not distribute surface water or drainage equitably.  The latest case decided by the Court is mostly right, and gives us an opportunity to look at what I call the grand inequity of surface water law.  I am sure the ‘editorial board’ will not find these comments to their liking, but the comments should be made.  To the devil with the editorial board.

We are taught that the stranger who dwelleth with you shall be unto you as one born among you.  This stranger should be treated as a guest.  Even so, this good rule applies to people, not things.  Unwanted water is a thing.  A neighbor’s surface water on one’s commercial, residential or ag land is an unwelcome guest.  Let’s call it an unruly, inconsiderate, delinquent and disrespectful guest.  And this can get problematic when it is a city or government doing the diverting.

East River drainage disputes occur more often, and can be more technically difficult on account of the land not having as much undulation.  But the West River disputes are more entertaining as they can involve calls to the sheriff, communications suggesting a physical resolution of the pending dispute and other such florid utterances.  Some of these problems are dreadful serious and impede land production. Some are so trivial you want to incarcerate the complainant for stupidity:  why make a federal case out of water drainage from a swimming pool onto your land?  Some would like to.

To make my comments on water drainage tactile, understandable and straight to the mark, I will use a dance analogy.  Put your mindset into that of a ballroom dancer and we can begin our review.  Fast dance:  If you are the water-sending party and your efforts to drain your land cause water to flow over your neighbor’s land in a “sporadic and forceful’ way.  That’s okay.  If the water sits on the receiving neighbor’s land for only a short period of time, the world is good.  That’s a fast dance.  That’s okay.  If the owner of the sending flow does not substantially alter on a permanent basis the course of flow, the amount of flow, or the time of flow, that’s okay.  It appears some landowners are in need of lessons in the samba, rumba, cha-cha and even the East Coast Swing.

Slow dance:  If the sending flow from your neighbor’s water is continuous, slow and causes water to stay on your land rather than quickly flow over it or flow through it, this is what the SD Court called “unnatural or unusual.”  That is a no no.  Slow or standing water of course prejudices the receiving landowner’s use of the land.  (Funny how the state can prejudice one’s use of the land in the case of non-meandered lakes but private neighbors can’t do it) There can be no slow dancing with your neighbor if you are trying to get rid of your surface water.  This is the rule even if the slow moving water is going over a natural watercourse.  So don’t ask your neighbor to do a slow dance with you.  Now, to make the dance card a bit more complicated, the latest case also suggested that the receiving landowner does not have a special duty to remove naturally occurring obstructions on the watercourse just to make the water move faster.

Are there remedies for these neighbor versus neighbor problems?  Yes there are. I have developed some.  That’s for another conversation.

David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law.


Considerations on the closing of a mine

Posted by David Ganje - October 2nd, 2017

The South Dakota mining company Powertech has applications for in situ uranium mining approval pending before several agencies including the SD DENR, EPA, NRC and BLM.  The Dewey Burdock project is large, including up to 4,000 injection wells, an in situ extraction well system using one aquifer and a waste discharge well using a different aquifer.   Powertech is required to also submit future decommissioning mine closure plans with its permit applications.  Each agency rule for mine closure is different but each requires a form of financial assurance (cash money or its equivalent) showing that a closure will be properly completed should there be a bankruptcy, a closing or an abandonment of the project.  The conventional method is by use of a bond or letter of credit.

Mining closure is often called ‘decommissioning.’   I also call it an exit plan.  Why is an exit plan important?  One issue is groundwater restoration.  The groundwater chemical baseline used by a mine should be returned as close to pre-mining (baseline) conditions as can practically be achieved.  A 2009 USGS groundwater restoration study (disputed by a 2014 private study) showed problems in groundwater restoration in uranium in situ mines in Texas after the restoration had occurred.

Several federal reports in recent years have been critical of whether federal agencies have sufficient competency to set correct financial assurance terms.  Concerning the financial assurance issue, I provide the following regional examples of agencies that imposed inadequate financial requirements are the following:  1. In the recent Anderson Seed Company insolvency, the setting of a bond by the SD PUC was too small.  $2.6 million in claims were lost. Bond payouts in the matter amounted to a little over 4 cents on the dollar.  2.  An oil well breakdown occurred near the SD town of Wasta.  A drill bit broke part way down an oil well.  The operator ran out of money.  The operator had put up a bond of $120,000 for each well.  In 2016 the state DENR estimated that the bond money was not enough to address the problem.  The official stated remedial costs could be $2 million if the project were to be plugged.  3. The Gilt Edge gold mine in the northern Black Hills closed in 1999.  Among other problems the mine was polluted with contaminated water.  The company’s bond was valued at about $8.2 million. Regulators also received another $9.8 million in settlement payments and interest. However the EPA reports that cleanup costs, likely in excess of $200 million, will be primarily funded through the EPA’s Superfund.  4. A 2007 Wyoming Land Quality Division report on the Smith uranium mine recommended the company’s “bond be immediately raised to a level of $80 million until a thorough evaluation, including critical path analysis, can be completed and an appropriate bonding level established. No permit amendments should be approved or new wellfields authorized until the bonding situation is corrected.”  In 2008 the company agreed to increase its reclamation bond from $40.7 million to $80 million.  5. In 1998 the Zortman-Landusky gold mine in Montana closed.  A $29.6 million financial security was not enough to remediate the sites.  As of 2002 Montana estimated that an additional $33.5 million would be needed from state and federal coffers.

Decommissioning requirements are written to assure sufficient funds will be available to carry out mine closure, for reclamation of disturbed areas, for waste disposal, dismantling and disposal of facilities as well as for any necessary groundwater restoration.  A US court recently stated that by requiring financial assurance the incentive for safety is obvious: the availability and cost of a bond will be tied directly to the structural integrity of a facility and the soundness of a mining company’s day-to-day operations.  Agencies however do not in each case require good exit plans for projects they regulate.  Better agency scrutiny as well as more open public comment and access to the setting and revising of adequate financial terms are essential.  I submit that decommissioning is the most significant long-term aspect to the government mine permitting process.

David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law.