BEFORE THE POLLUTION CONTROL HEARINGS BOARD

STATE OF WASHINGTON

OKANOGAN HIGHLANDS ALLIANCE, WASHINGTON ENVIRONMENTAL COUNCIL, CENTER FOR ENVIRON- MENTAL LAW & POLICY, CONFEDERATED TRIBES OF THE COLVILLE RESERVATION, and ROGER LORENZ, Appellants, v. STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY, and BATTLE MOUNTAIN GOLD COMPANY, Respondent.	) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )	PCHB NO. 97-146 PCHB NO. 97-182 PCHB NO. 97-183 PCHB NO. 97-186 PCHB NO. 99-019 FINAL FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
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This matter came before the board for hearing on May 11-20, 1998 and on September 14-17, 1999. The board was comprised of James A. Tupper, Jr., presiding, Ann Daley, and Robert V. Jensen. Gene Barker and Associates of Olympia, Washington provided Court reporting services.

For the 1998 hearing appearances were as follows:

Adam Berger for the Okanogan Highlands Alliance, the Washington Environmental Council, and the Center for Environmental Policy, Rachael Paschal for the Center for Environmental Law and Policy, Stephen H. Suagee for Confederated Tribes of the Colville Reservation, and Geraldine Payton for Roger Lorenz.

Assistant Attorney General Joan M. Marchioro and Assistant Attorney General Jay J. Manning for the Department of Ecology.

Glenn J. Amster, Michael J. Malmquist and Craig D. Galli for Battle Mountain Gold Company.

For the 1999 hearing appearances were as follows:

David Mann for the Okanogan Highlands Alliance and the Washington Environmental Council. Assistant Attorney General Joan M. Marchioro and Assistant Attorney General Tom McDonald for the Department of Ecology.

Glenn J. Amster, Michael J. Malmquist and Craig D. Galli for Battle Mountain Gold Company

FINDINGS OF FACT

Project Description and Background

1. The Crown Jewel Mine is proposed to be constructed near the summit of Buckhorn Mountain in Okanogan County. Buckhorn Mountain is located in the Kettle River Basin straddling the Myers Creek and Toroda Creek watersheds. In 1991, the United States Forest Service and Ecology entered into a partnership to complete a National Environmental Policy Act (NEPA) and State Environmental Policy Act (SEPA) environmental impact statement (EIS) for the proposed Crown Jewel Mine project.

2. The process began with a series of scoping meetings in which the potential impacts of the project were identified. At the conclusion of project scoping in early 1992, Ecology received comments and suggestions regarding possible alternatives to Battle Mountain Gold’s (BMG) proposal. Staff from Ecology and the Forest Service developed an array of alternatives for various mining and milling processes and facilities. The array of alternatives was drawn from reviews of relevant literature, the mining experience of Ecology staff, and comments received during the scoping process. Meetings were held throughout 1992 and 1993 to refine and accurately describe the alternatives identified. The product of these meetings is Chapter 2-Alternatives Including the Proposed Action of the EIS. The purpose of Chapter 2 was to describe the proposed project and the identified alternatives to allow a meaningful comparative analysis of all options and their respective environmental impacts.

3. During the time the EIS was being developed, BMG applied to Ecology requesting water for the proposed mine. On November 20, 1992, BMG submitted 20 applications to Ecology’s Central Regional Office in Yakima. BMG subsequently withdrew four applications. In November 1994, BMG published public notices for the remaining 16 applications. The applications requested six new water rights, changes to eight existing water rights and two reservoir permits. Ecology received over 70 letters of protest or concern regarding BMG’s applications.

4. Water supply is limited in the Myers Creek and Toroda Creek basins. Myers Creek, which flows north into Canada where it meets the Kettle River, was the subject of a general adjudication in the 1930s. In addition to the Washington surface water users on Myers Creek, the adjudication included all of the Canadian users as well. The most senior irrigation right confirmed in the adjudication is a Class 2 right providing for diversion of water just north of the Canadian border. Ecology and its predecessor agencies have consistently honored requests from Canadian authorities to regulate Washington users to protect this senior right.

5. Toroda Creek, unlike Myers Creek, historically has not been the subject of formal regulation. Over the years, the Washington State Department of Fish and Wildlife and its predecessor agencies have stated to Ecology that the remaining unappropriated water of Toroda Creek and its tributaries is required to maintain fish resources. While no formal closure is in place, Ecology’s position has been that, absent augmentation with water from another source, further appropriation of water in hydraulic continuity with Toroda Creek during the months of July through September would be detrimental to instream values in Toroda Creek and has denied applications for appropriation on that basis.

6. In July 1994, as part of the development of the EIS for the mine, an Instream Flow/Incremental Method (IFIM) study was conducted on Myers Creek. The purpose of the study was to determine the instream flows necessary for spawning and rearing of brook and rainbow trout. The IFIM study established the following minimum flows for Myers Creek from February 1 through July 31: (1) minimum flow in Myers Creek from February 1 to April 1 is 6 cubic feet per second (cfs); (2) after April 1, when the 7-day running mean water temperature rises to 6ºC but does not exceed 8ºC, the minimum flow is 9 cfs; and (3) once the 7-day running mean water temperature rises above 8ºC, the minimum flow is 12 cfs.

7. Analysis of BMG’s mine proposal through the EIS process and water rights investigation indicates that the development of the mine and proposed appropriation of water would result in streamflow depletions in the Myers Creek and Toroda Creek basins. As the mine is developed, groundwater will seep into the pit, and precipitation will collect in the pit and fully lined Tailings Disposal Facility (TDF). Groundwater on Buckhorn Mountain is hydraulically connected to tributaries of both Toroda Creek and Myers Creek. Likewise, precipitation in the vicinity of the TDF normally would contribute to tributary flows. Absent mitigation, therefore, groundwater and surface runoff captured by the pit and TDF would cause a reduction in those flows. Development of the mine also will cause a slight shift in the groundwater divide on Buckhorn Mountain. As a consequence, following the closure of the mine, a small amount of water which previously flowed to the Myers Creek catchment will flow to the Toroda Creek catchment. As part of the reclamation of the mine site, BMG will pump water from the Starrem Creek Reservoir to accelerate filling part of the pit with water. Upon completion of reclamation, and establishment of a hydrologic equilibrium, the shift in the groundwater divide will remain, causing predicted reductions of mean annual flow in Bolster and Gold Creeks, respectively (Myers Creek catchment), and in Marias Creek (Toroda Creek catchment), with corresponding increases in flows in Nicholson Creek. Because reduced flows in these drainages might lead to impairment of senior rights and reduced flows necessary for fish and instream resources, Ecology informed BMG that water was not available for consumptive use in Myers Creek and Toroda Creek basins absent mitigation. In response, BMG developed a Streamflow Mitigation Plan that is intended to compensate for the predicted impacts to streamflows due to the mine.

8. The Streamflow Mitigation Plan is designed to replace water in the affected basins in the amounts of the predicted depletions during times of potential impairment. The Streamflow Mitigation Plan, which is based on the hydrologic modeling performed for the EIS, provides mitigation during the mine’s operation, reclamation and post-closure phases. During the operation and reclamation phases, mitigation consists of pumping water from the Starrem Creek Reservoir, where water diverted from Myers Creek and Starrem Creek will be stored, to the mine head tank where it will be delivered through underground pipes to the affected drainages. Water will be released to all affected basins when IFIM flows are not being met in Myers Creek. Water will also be released to the Myers Creek and Toroda Creek basins during typical low flow periods, regardless of whether the IFIM minimum flow is being met in Myers Creek.

9. After mining, all diversions of water will cease as the new water rights will lapse and the changed certificates will revert to the prior permittees at the previous point of diversion. The remaining impact of the reclaimed mine will be the hydraulic shift between Myers Creek and Toroda Creek drainages. Post-closure mitigation to address the hydraulic shift consists of drilling two nearly horizontal boreholes from the pit lake to Bolster and Gold Creeks in the Myers Creek watershed. The boreholes will contain HDPE plastic pipe with valves and flow meters to regulate and measure flow rates. Water will flow by gravity to the affected drainages throughout the year in an amount equal to the total reduction in Myers Creek runoff caused by the hydraulic shift.

10. Pursuant to the Metals Mining and Milling Operation Act, ch 78.56 RCW, BMG posted an Environmental Protection and Performance Security (EPPS) bond with Ecology for the water rights the company sought. The purpose of this EPPS bond is to ensure BMG’s performance of conditions placed upon any water right permits granted by Ecology. If BMG fails to comply with the specified conditions, the bond provides financial resources for Ecology to carry out both the short-term and long-term mitigation requirements envisioned in the Streamflow Mitigation Plan. Specifically, the bond provides funds for: (1) operation of the streamflow mitigation system during the operation and reclamation phases of the project; (2) construction of the boreholes and treatment system to deliver post reclamation augmentation flows; (3) completion of an acceptable final comprehensive Operations and Maintenance Manual for the mitigation plan; and (4) establishment of the Myers Creek Charitable Trust to ensure the perpetual operation and maintenance of the post reclamation mitigation system. The Trust will be created by BMG following reclamation. BMG will fund the Trust either directly or through the EPPS bond if BMG defaults on its obligations secured by the bond.

11. In the late spring of 1996, Phil Crane of Ecology’s Central Regional Office was assigned to investigate the pending water right applications in the Okanogan County portion of WRIA 60, including BMG’s 16 applications. Mr. Crane conducted the preliminary investigation of BMG’s water right applications. In light of the large scale of BMG’s proposed project, the number of water right decisions to be made, and the level of scrutiny being applied to the project, Ecology decided that final decisions on BMG’s water right applications would be made by the Program Manager for Water Resources. As Carol Fleskes had recently left that position and no successor had been appointed, Ms. Fleskes was asked to make the final determinations on BMGs pending applications.

12. Ecology issued reports of examination granting 12 of the 16 applications submitted by BMG:

Reservoir Permit Application No. R4-31558, the Starrem Creek Reservoir, requested a permit to store water diverted under several water rights in the Myers Creek watershed. The reservoir would be located on Starrem Creek, a tributary of Myers Creek. The reservoir would be lined to reduce leakage, have a storage capacity of 428 acre-feet and would inundate 19.9 acres of land. The dam would be 59 feet high, with a crest length of 1300 feet and crest width of 20 feet, and an estimated maximum depth of 49 feet. An eight-inch outflow pipe would deliver water to the mine site. Ecology approved the application, finding: (1) water is available for impoundment and storage from changes to the existing water rights and new water rights requested in Myers Creek basin; (2) existing water rights will not be impaired; (3) the secondary uses at the mine for industrial mining, including dust control and mitigation water, are beneficial uses; and (4) considering the entire project, including the Streamflow Mitigation Plan, issuing the permit is not contrary to the public interest.

Reservoir Permit Application No. R4-31741 requested a reservoir permit for the mine’s Tailings Disposal Facility, which relies on two impoundment dams to contain the mine tailings. DOE Ex. 9. The reservoir would be located near the headwaters of Marias Creek, a tributary of Toroda Creek. Although designed to hold 360 acre-feet, under normal operations of the mine the pool was projected to hold 10 to 20 acre-feet of water. A double liner system and leak detection system would be installed to contain the tailings and pond. Water in the reservoir would come from the ore processing facility, mine pit, mine dewatering well, and, if necessary for water quality reasons, the tailings underdrain. Water in the reservoir would be used at the ore processing facility. Ecology approved the application, finding: (1) water is available for impoundment and storage from new water rights; (2) existing water rights will not be impaired; (3) the secondary uses at the mine for industrial mining are beneficial uses; and (4) considering the entire project, including the Streamflow Mitigation Plan, issuing this permit is not contrary to the public interest.

Applications for change of Myers Creek Adjudicated Certificate Nos. 45, 47, 48, 67, 68, 69, and 70, requested the right to use 0.16 cfs, 0.293 cfs, 0.187 cfs, 0.293 cfs, 0.093 cfs, 0.053 cfs, and 0.04 cfs, respectively, of water from Myers Creek for irrigation of 94 acres. The change applications sought to temporarily change the place of use from the Leslie Ranch to the mine site, the point of diversion from its present location to a point downstream on Myers Creek and the purpose of use from irrigation to mining purposes. Because the change applications proposed to transfer water out of the basin leaving no opportunity for return flows, only the crop-water duty and consumptively used water (evaporation) were considered for change. Ecology’s investigation determined that the historic beneficial use of the seven adjudicated rights was the irrigation of approximately 48 acres and represented a total instantaneous quantity of water of 0.64 cfs. The 0.64 cfs authorized corresponded to Certificate Nos. 45, 47 and 48. Ecology found that the proposed change in point of diversion will not impair existing rights, changing the place of use will not impair other water rights since only the consumptively used water was considered for change, and the proposed change in the purpose of use will not impair other water rights. Based on this information, Ecology granted BMG’s applications to change Certificate Nos. 45, 47 and 28. Due to Ecology’s finding regarding the historic beneficial use of the Leslie Ranch adjudicated certificates, BMG’s applications to change Certificate Nos. 67, 68, 69 and 70 were denied.

Application for Change of Ground Water Certificate No. G4-22893C, requested a change to a certificated right to use 400 gallons per minute (gpm) of water from a well for irrigation of 120 acres. DOE Ex. 17. The application sought a temporary change in use from irrigation to mining and place of use from its present location to the mine site. Pump tests performed by BMG indicated that the well produced less than the 200 gpm authorized under the certificate. Because the water under the proposed change would be transferred out of the basin leaving no opportunity for return flows, only the crop water duty and consumptively used water (evaporation) were considered to change; resulting in a maximum annual quantity authorized for change of 113.88 acre-feet per year during the irrigation season. Ecology determined that the proposed change in the place of use will not impair other water rights because only the consumptively used water was considered for change and changing the purpose of use will not impair other existing water rights. Based on these findings, Ecology approved BMG’s change application authorizing a maximum instantaneous withdrawal of 265 gpm and a maximum annual quantity of 113.88 acre-feet per year from April 1 through October 1.

Ground Water Application No. G4-31611 requested a water right for use of 400 gpm, up to 240 acre-feet per year, of ground water from the mine pit for general mining purposes. DOE Ex. 2. Because excavation of the mine pit would result in a small shift in the hydraulic divide between Myers Creek and Toroda Creek basins, the Streamflow Mitigation Plan provides for the distribution of water in perpetuity to Gold and Bolster Creek within the Myers Creek basin to compensate for the shift in the divide. Ecology approved the application, finding: (1) water is available from the Toroda Creek drainage provided that adequate water is delivered to the affected drainages as described in the Streamflow Mitigation Plan; (3) the proposed use is beneficial; and (4) considering the entire project, including the Streamflow Mitigation Plan, issuing the permit is not contrary to the public interest.

Ground Water Application No. G4-31612 requested 100 gpm of water from an underdrain emerging from below the tailings facility. DOE Ex. 3. The underdrain would be composed of several gravel-filled trenches designed to draw water from under the tailings facility to a collection pond where the water would be sampled for water quality purposes. Water would be appropriated under the permit only if the water emanating from the underdrain exceeded Washington’s water quality standards. If water were appropriated, it would be pumped into the tailings facility for use at the mill and ore processing facility. Ecology approved the application, finding: (1) without augmentation with water from another source, water is not available from the Toroda Creek drainage during the months of July through September and whenever water is withdrawn from the infiltration trench, an equal amount of water must be delivered to the drainage just downstream from the point of withdrawal; (2) other water rights should not be impaired as long as the augmentation for this permit is carried out as described; (3) the proposed use is beneficial; and (4) considering the entire project including, the Streamflow Mitigation Plan, issuing the permit is not contrary to the public interest.

Ground Water Application No. G4-31272 requested 15 gpm of water from a well for domestic supply for the mine site. DOE Ex. 4. Water would be used for toilets, showers and drinking supply. The annual water usage was estimated at 7.5 acre-feet. Ecology approved the application, finding: (1) water is available from Toroda Creek drainage provided adequate water is delivered to the affected drainages as described in the Streamflow Mitigation Plan; (2) other water rights should not be impaired as long as the augmentation and mitigation proposed for the project is carried out according the Streamflow Mitigation Plan; (3) the proposed use is beneficial; and (4) considering the entire project including, the Streamflow Mitigation Plan, issuing the permit is not contrary to the public interest.

Ground Water Application No. G4-31556 requested up to 50 gpm from a well to assist in dewatering the mine pit. DOE Ex. 5. The water withdrawn would be used as process water at the mine site. Ecology approved the application, finding: (1) water is available from Toroda Creek drainage provided adequate water is delivered to the affected drainages as described in the Streamflow Mitigation Plan; (2) other water rights should not be impaired as long as the augmentation and mitigation proposed for the project is carried out according the Streamflow Mitigation Plan; (3) the proposed use is beneficial; and (4) considering the entire project including, the Streamflow Mitigation Plan, issuing the permit is not contrary to the public interest.

Surface Water Application No. S4-31554 requested 5 cfs of water from Myers Creek, up to 650 acre-feet per year. DOE Ex. 6. Diversion of water under the permit would occur during the spring freshet and high runoff period between February 1 and July 31. Water would be diverted from Myers Creek to the Starrem Creek Reservoir and ultimately pumped to the mine site for use in mining operations. Ecology approved the application, finding: (1) water is available from Myers Creek during the spring freshet, provided minimum instream flows as established by the IFIM study are met; (2) provided the Streamflow Mitigation Plan is implemented, the proposed appropriation will not impair existing water rights; (3) the proposed use is beneficial; and (4) considering the entire project, including the Streamflow Mitigation Plan, issuing the permit is not contrary to the public interest.

Surface Water Application No. S4-31555 requested 20 cfs from Starrem Creek, a tributary of Myers Creek. DOE Ex. 7. A dam would be constructed near the mouth of this watershed and would impound the waters of Starrem Creek. The water would be used for industrial mining, including milling, ore processing, dust suppression, fire control, reclamation and streamflow augmentation. The diversion would appropriate water during the spring freshet and high runoff period between February 1 and July 31. Water would be stored in Starrem Creek Reservoir for later use at the mine site. Ecology approved the application, finding: (1) water is available from Starrem Creek during the spring freshet provided minimum instream flows on Myers Creek are met; (2) provided the Streamflow Mitigation Plan is implemented, the proposed appropriation will not impair existing water right; (3) the proposed use is beneficial; and (4) considering the entire project, including the Streamflow Mitigation Plan, issuing the permit is not contrary to the public interest.

13. On November 3, 1997, Ecology issued its decisions on BMG’s applications. Notice was sent to BMG, all protestants and interested parties. Appellants timely appealed Ecology’s decisions to the Board.

Pit Inflow Study/Stream Depletion - Technical Issues

14. The pit inflow study, stream depletion report, and mitigation plan all suffer from serious omissions and flaws in methodology. The original mitigation plan underestimated the magnitude of the streamflow depletions and required mitigation quantities. Just prior to the original hearing BMG and its consultants substantially increased their streamflow depletion and mitigation estimates. These revised values still fall far short of accurately predicting depletions and required mitigation. The mitigation plan is unprecedented in its complexity and required permanent duration. The last minute revisions demonstrate substantial uncertainty in the hydrogeologic modeling and streamflow depletion estimates underlying the mitigation plan. The uncertainty and errors, coupled with the extremely water-short status of the Myers and Toroda Creek basins, make it unreasonable to conclude that the mitigation plan will prevent impairment to existing rights, instream values, and the public interest.

15. The Roosevelt adit is an abandoned underground mine located on the eastside of Buckhorn Mountain. Excavation of the Crown Jewel pit will reduce the amount of groundwater that collects in the adit and discharges into Nicholson Creek. The streamflow depletion study failed to consider how reduced flows from the Roosevelt adit will affect streamflow reductions in Nicholson Creek. The failure to incorporate flow depletions in the Roosevelt adit caused the stream flow depletion report to underestimate depletions in Nicholson and Toroda Creeks. BMG concedes that the original calculations underestimated depletions. It is not clear whether the revised depletion estimates are still too low.

16. The stream depletion study and mitigation plan focus exclusively on how the capture of groundwater discharge and surface runoff by the mine pit would reduce flows in adjacent creeks. However, the mitigation plan failed to account for flow reductions in Marias Creek caused by the capture of precipitation within the lined tailings pond. BMG concedes that the original mitigation plan entirely overlooked this impact and increased its estimate of streamflow reductions and required mitigation. It is unclear whether the revisions still underestimate expected depletions.

17. The stream depletion study relies on precipitation data and streamflow measurements from the 1993 and 1994 water years to establish linear relationships between precipitation and streamflow for monitoring sites on affected streams. These linear relationships were then used to estimate baseflow, surface runoff, and streamflow depletions at these sites in an average precipitation year. Appellants criticized the use of estimated rather than actual mine site precipitation data for water year 1993 on the grounds that the methods used to estimate 1993 data were unreliable and created significant uncertainty in estimates of streamflow depletions. In response to this critique, the precipitation analysis underlying the streamflow depletion estimates was recalculated. The new analysis, which incorporates an additional three years of actual mine site precipitation data, results in very different precipitation estimates. This raises a substantial concern that the use of such limited precipitation data results in highly uncertain depletion estimates. The use of an additional three years of precipitation data in the revised analysis does little to reduce the uncertainty inherent in relying on limited data.

18. The stream depletion report and the mitigation plan predicted that post-reclamation overflow from the refilled pit lake would increase flows to Nicholson and Toroda Creeks over pre-mining conditions. However, this analysis failed to take into account revegetation of the pit lake area, as described in the EIS. Revegetation will decrease surface runoff and increase losses due to evapotranspiration, thereby reducing pit inflows. Accounting for revegation and increased evaporation from the pit lake surface, there will be a net consumption of water by the pit lake during dry years, particularly in summer months when demand is highest and water is most scarce. Instead of increased flow in Nicholson Creek post-reclamation, there will be unmitigated reductions in flow during the most critical periods of need.

Further, because post-reclamation mitigation is required in perpetuity to offset the permanent shift in the groundwater divide, the boreholes and treatment facilities required for post-reclamation mitigation must be maintained forever.

19. Accurate calculation of baseflow and surface runoff in the affected streams is critical to an estimate of streamflow depletion. The higher the measured flows, the greater the estimated impact from loss of catchment area to the mine pit. BMG measured flows in affected streams using both weir or culvert measurements and concurrent bucket measurements. The bucket measurements were consistently and significantly higher than weir or culvert measurements; in fact, bucket measurements were 67% to 92% higher. In calculating baseflow in the stream depletion report, the report relied exclusively on the lower weir and culvert measurements and completely disregarded the higher bucket measurements. Use of the bucket measurements would have increased stream depletion estimates by 28.4 to 39.0 AF/year.

20. Accurate hydrogeological characterization of the area surrounding the pit is essential to accurate analysis of estimated streamflow depletions. Inaccurate or uncertain hydrogeologic characterization creates uncertainties in computer modeling used to predict the area of groundwater recharge captured by the pit. Uncertainties in modeling the pit capture zone translate directly in uncertainties in predicted streamflow depletions.

Reliable field testing of aquifer properties has been limited largely to the north-central area of the pit itself and is scarce in areas outside the pit where streamflow depletions will actually occur. The tested areas revealed the existence of preferential flow conduits and other heterogeneous hydraulic features that significantly affect groundwater flow patterns near the top of Buckhorn Mountain. These findings are consistent with the fractured bedrock structure of the area’s hydrogeology.

Nonetheless, the model originally used to predict the size and shape of the pit’s capture zone assumed that the untested portions of the aquifer behave like an equivalent porous media with no preferential flow features that would affect the extent of the capture zone and correspondent streamflow depletions. The likelihood that untested areas within the pit’s zone of influence contain such heterogeneities was not considered in the original computer modeling, nor was the possibility that preferential flow conduits in the characterized portion of the pit had been inaccurately modeled.

Mitigation Plan - Technical Issues

21. The mitigation plan fails to account for all streamflow depletion attributable to the mine pit while the pit is filling with water during the reclamation phase. As the fully excavated pit is filled with water, adjacent groundwater storage will gradually be replenished, but that replenishment of this storage lags behind the refilling of the pit. The streamflow depletion analysis does not reflect any lag time, but rather simply models the final steady state after pit filling is completed. This omission results in an underestimation of the extent of streamflow depletion during pit filling.

22. The mitigation plan also fails to consider or account for lag time between release of mitigation water from the discharge points and its appearance in affected streams. The Streamflow Mitigation Plan Evaluation published in March 1998 states that the lag time will be from 1.5 months to just over two years between release of mitigation water and its appearance in the intended stream. Recalculations of the lag time in pre-filed written testimony submitted on behalf of respondents reduced the lag time to a matter of days. The revised calculations are derived from assumptions of soil conductivity values that are significantly higher than the values actually documented in the EIS from testing of deposits on site. As a result, the board accords these recalculations no weight.

23. The mitigation plan also fails to adequately address depletion of Ethel Creek in the Myers Creek drainage. The mitigation plan incorrectly assumes that there would be no streamflow depletion to Ethel Creek. In fact, the pit zone of influence will extend into the Ethel Creek watershed and cause a depletion for which no mitigation is provided either during mining, reclamation or post-reclamation on a permanent basis. Respondents modeling found that there is in fact a reduction in Ethel Creek flows of 2 gallons per minute or 0.3 acre feet per year.

24. Ecology failed to consider the cumulative impacts of granting BMG’s water rights on local water supply in light of concurrently planned or reasonably foreseeable future actions. For example, Ecology did not consider how granting BMG 1,528.5 AF/year in new withdrawals would affect the ability of local water supplies to accommodate anticipated increases in population growth or what the cumulative impacts of the mine and growth would be. The EIS predicts a substantial 14% population increase locally over the next ten years regardless of whether the mine is developed. Mine operations would add another 2% in local population growth. The EIS states that housing development in all incorporated communities within the study area has been “problematic” due in part to water supply constraints, and the “[a]vailability of water is a particular concern.” The EIS acknowledges that it will be particularly difficult to meet future local water demand because most of the new housing development will likely occur beyond the reach of existing public water supply systems.

Ecology never evaluated whether the local water supply is sufficient to support anticipated population growth in light of increased demand from BMG’s diversions. Furthermore, Ecology never considered the cumulative impacts of BMG’s new rights and existing and future demand from exempt wells and reasonably foreseeable development projects, either independent of or prompted by the mine’s development.

25. Ecology failed to consider the impacts of new withdrawals in Myers and Toroda Creeks on flows in the Kettle River. Both Ecology and BMG were aware that state wildlife agencies had established recommended minimum flows in the Kettle River to protect aquatic resources. Ecology has conditioned other water rights granted in Kettle River tributaries on maintenance of these minimum flow levels. Ecology’s failure to consider the potential adverse impacts of new withdrawals on Kettle River flows in its decision to grant BMG’s applications is inconsistent with past actions and problematic for this application.

26. In summary, the streamflow depletion report and mitigation plan suffer from a number of deficiencies. Taken together, the deficiencies in pit inflow study, the streamflow depletion report and mitigation plan, compel the conclusion that the mitigation plan contains too much uncertainty to adequately protect existing rights and instream flows from harm. The level of uncertainty is demonstrated by the prehearing revisions to these studies. Even as revised, the mitigation plan substantially underestimates the likely streamflow depletions and required mitigation quantities. The mitigation plan does not protect existing rights and instream flows because it is too speculative and error-ridden to compensate for streamflow depletions likely to be caused by excavation of the mine pit.

Quantity of Water Rights Available for Transfer

27. Appellants contend that Ecology improperly calculated the extent of beneficial use for the proposed transfer of the Lost Creek and Leslie Ranch rights. To quantify the Lost Creek well right, Ecology relied on affidavits attesting to 120 acres of irrigation and disregarded aerial photographs showing only 97.9 acres under irrigation. To quantify the Leslie Ranch rights, Ecology relied on aerial photographs showing 48 acres of irrigation and disregarded an affidavit stating that only 46 acres had been irrigated historically and that 19 of those acres had not been irrigated since 1989. The evaluation by Ecology was reasonable under the circumstances and based on the available evidence. There is no indication that Ecology simply quantified the rights by relying on whatever evidence showed the highest historic use, rather than the average of recent, continuous use. The estimates of beneficial use did not result in any expansion of the transferred rights

401 Certification

28. We turn now to the § 401 Certification for the Crown Jewel Mine Project issued by Ecology on January 13, 1999. The Certification was issued in connection with BMG’s application for a dredge and fill permit from U.S. Army Corps of Engineers (Corps) under Section 404 of the Federal Clean Water Act. The Corps issued BMG a § 404 Permit, accompanied by a Record of Decision, on June 28, 1999 (Department of the Army Permit No. 199-2-4-1078 and Record of Decision). The § 404 Permit incorporates and requires BMG to comply with the conditions contained in Ecology’s § 401 Certification.

29. Issuance of the § 401 Certification and the § 404 Permit culminated a process that began with initial proposal of the Crown Jewel Mine Project and continued through the development of the EIS. The Corps became a formal “cooperating” agency in the EIS preparation process in late 1992. In addition to wetlands issues, Ecology was also closely involved in overseeing the geochemical testing, waste rock characterization, pit lake modeling and assessment of waste rock impacts done as part of EIS preparation.

30. The Project area contains just under 50 acres of wetlands. Under the initial and several subsequent revisions of BMG’s Mine Plan, the tailings and waste rock disposal facilities would have covered over 10 acres of these wetlands, including the “frog pond” wetland located southwest of the north waste rock disposal site and the “nine-acre” wetland near the head of the Nicholson Creek drainage. These two wetlands were subsequently determined by the agencies to be the most valuable wetlands on the site.

31. The proposed mine plan was revised during the EIS process to reduce direct wetland impacts by 2/3, to approximately 3.5 acres. The revised configuration avoided impacts to the frog pond and the nine-acre wetland.

In March, 1996, following release of the draft EIS, BMG formally submitted a joint application for a § 401 Certification and a § 404 Permit. The agencies determined at that time that notice of the application would not be issued until the EIS was finalized.

The final EIS was issued on January 1997. It included a description of aquatic resources impacts and of mitigation measures then proposed by BMG and being considered by the agencies. The EIS also included a discussion of the pit lake water quality modeling and results, and based on those results, required BMG to prepare a Contingent Pit Water Treatment Plan, to be secured by a performance security. Both a detailed description of the geochemical testing program performed by BMG and the agencies to characterize waste rock, pit wall rock, ore and tailings at the site, and an assessment of the water quality impacts and risks presented by such materials to surface and groundwater were also included.

In addition, the EIS noted that BMG would be required to secure Ecology and Department of Natural Resources (DNR) approval of a waste rock management plan, to address potential acid generation and metals release, as part of the National Pollutant Discharge Elimination System (NPDES) and state Waste Discharge permit process and prior to placement of waste rock.

Notice of the BMG’s § 401 and § 404 applications was published and a public hearing was held in June 1997. BMG began working with Ecology to develop the Contingent Pit Water Treatment Plan as required by the EIS, which together with a companion pit water monitoring plan was submitted in final form to Ecology in May of 1998.

Also in May 1998, BMG withdrew and then resubmitted its § 401 application because the one-year time period for Ecology’s certification decision was about to lapse. Notice of the resubmitted application was published on June 19, 1998, and public comments were accepted until July 30, 1998. The notice expressly referenced BMG’s proposed contingent pit water treatment and monitoring plans, and sought comments on the same.

In December 1998, Ecology issued a SEPA Addendum describing enhancements which had been made in BMG’s Aquatic Resources Mitigation Plan and Streamflow Mitigation Plan since issuance of the EIS, and describing the Contingent Pit Water Treatment Plan. The enhancements included doubling of the size of the Myers Creek wetlands mitigation site, from 50 to 97 acres; supplying augmentation water to the nine-acre wetland and another wetland denominated “C-9” to protect both from potential flow reductions; providing additional mitigation at the Pine Chee, Bear Trap Canyon and Cedar Grazing Allotment sites; and creating additional seeps, springs and wetland areas at the site on Buckhorn Mountain.

In the Addendum, Ecology concluded that the primary effect of the various additional mitigation and contingent mitigation measures was to further reduce environmental impacts, and that while the modifications and additions would themselves cause some impacts, no additional significant adverse impacts beyond those identified in the original environmental document have been identified. The United States Forest Service and the Bureau of Land Management, who manage most of the land at the site, provided their comments on the Addendum and concurred with the conclusion of no significant impacts.

32. About a month after release of the Addendum, on January 13, 1999, Ecology issued BMG its § 401 Certification. The § 401 Certification relies substantially on the NPDES permit process. During the time Ecology was preparing the EIS and processing BMG’s § 401 Certification, it was also processing BMG’s other water quality permits. On September 19, 1997, Ecology approved BMG’s Construction Stormwater NPDES permit, authorizing discharges associated with construction of the mine and all ancillary facilities, other than discharges from waste rock disposal facilities, which require issuance of the pending individual NDPES/Waste Discharge Permit. This Construction Stormwater Permit was appealed by OHA to the Board, which ultimately rejected the appeal and upheld the Permit. Compliance with Construction Stormwater Permit is a condition of the § 401 Certification.

The individual NPDES/Waste Discharge permitting process formally began in April 1996, when BMG submitted a permit application to Ecology. By November 1997, Ecology issued a draft permit and fact sheet that included design requirements, treatment requirements, monitoring effluent limits and performance security.

After receipt of the draft permit, BMG proposed alternative points of compliance (APOC), one for the north waste rock facility and one for the south waste rock facility, for certain constituents that could infiltrate into groundwater from beneath the facilities and could potentially exceed groundwater enforcement limits at the toe of the facilities. Ecology has discretionary authority to approve an APOC under WAC 173-200-060.

BMG prepared and submitted two reports in support of its application for the APOC. One of the reports is titled Evaluation of Groundwater Quality Beneath the Waste Rock Disposal Areas (BMG Feb. 1999)(Groundwater Evaluation). The Groundwater Evaluation contains predictions of groundwater quality at two locations for each of the two proposed waste rock disposal facilities in an assumed groundwater well located at the ultimate toe of each of the waste rock disposal facilities, and at a proposed APOC well located downhill from each of the waste rock disposal facilities.

The Groundwater Evaluation’s prediction of metal concentrations is derived from a steady state thermodynamic model developed for the proposed waste rock facilities. The Groundwater Evaluation’s prediction of nitrate concentrations, and also a confirmatory prediction of metals concentrations, are derived from a transient mixing cell model (Mixing Cell Model).

The results predicted by the two Models, as documented in the Groundwater Evaluation, are that nitrate and certain metals would exceed groundwater limits directly at the waste rock facility toe wells, but that all constituents would meet all groundwater standards at the proposed APOC wells. Ecology has not yet finally approved the Groundwater Evaluation, nor has it approved the APOC. Both are part of the NPDES/Waste Discharge process.

In light of the prediction in the Groundwater Evaluation that groundwater underneath and at the toe of the waste rock facilities could exceed groundwater standards, and concerns by Ecology that some of this groundwater could potentially discharge to down gradient surface water features, Ecology required BMG to develop a monitoring plan designed specifically to protect these features. The plan, referred to as the Technical Memorandum, North and South Waste Rock Facility hydrologic Monitoring Plan (‘Technical Memorandum”) was developed by BMG under the guidance of Mr. Bob Raforth of Ecology, and imposed as a condition of the

§ 401 Certification.

The Technical Memorandum includes installation of six additional groundwater monitoring wells, located between the waste rock facilities and the frog pond (2 wells), wetland C-9 (1 well), and wetlands C-6, C-7, and Spring JJ-15 and Seep JJ-34 (3 wells). The plan also requires regular surface water quality monitoring of these features.

33. In addition to the Groundwater Evaluation (an earlier version) and the Technical Memorandum, when Ecology issued the § 401 Certification, it had reviewed and was familiar with at least the following NPDES-related water quality reports submitted by BMG and related to waste rock water quality:

AKART Analysis, Waste Rock Disposal Areas, Crown Jewel Project (Arcadis Geraghty & Miller, April 1998);

Water Quality Prediction, Crown Jewel Project (Montgomery Watson, October 1998);

Waste Rock Management Plan, Crown Jewel Project (Montgomery Watson, October 1998) (“Waste Rock Management Plan”);

Conceptual Design Report Diversion Channels and Sediment Traps (Golder & Associates); and

Hydrologic Monitoring Plan, Crown Jewel Project (Montgomery Watson, Sept. 1998).

34. Based on this review Ecology concluded that there is reasonable assurance that the Crown Jewel Project will comply with water quality standards, and that waste rock discharges can be controlled through an NPDES/Waste Discharge Permit. Based on this conclusion Ecology issued the § 401 Certification.

35. The proposed Crown Jewel Mine will result in the creation of an open pit of approximately 116 acres on the top of Buckhorn Mountain. This pit will be approximately 800 feet deep and extend 350 feet below the existing water table. During mining, a series of wells and pumps will ensure that groundwater and surface water do not seep into and accumulate in the pit. At the conclusion of mining, the former pit will begin to fill with water and create a lake in the northern portion. Water from the Starrem Creek reservoir will be pumped into the pit lake until it is filled to approximately the 4,850-foot level. This enhanced filling proposal is expected to take five years. The filled lake will be approximately 350 feet deep and have steep side slopes.

36. The Certification sets forth a determination by Ecology that the pit lake will be a water of the state under RCW 90.48.020 and subject to state water quality standards. The proposed pit lake will also discharge to surface waters. Once the pit lake is filled, it will discharge into Nicholson Creek. The discharge to Nicholson Creek will be controlled through an engineered outlet. The Nicholson Creek discharge is necessary for downstream water rights as well as for mitigation in Wetlands C1 and potentially the Frog Pond. Additionally, pit water will be discharged from the pit lake into both Gold and South Bolster Creek through subsurface bore holes. This water is necessary for mitigation of downstream water rights and beneficial uses. It is also predicted that approximately 6.6 acre feet per year (or 4.1 gallons per minute) will be lost from the pit lake to groundwater seepage. This seepage is expected to reach surface waters approximately 1,500 feet from the pit in the Gold Bowl drainage. There also exists the likelihood for large-scale preferential flow features on Buckhorn Mountain that would introduce more uncertainty for prediction of groundwater flow patterns and rates. A preferential flow feature crossing the filled pit lake would likely cause significant unanticipated seepage loss.

37. Consequently, in addition to being a water of the state itself, the water in the filled pit lake will discharge to surface waters through seepage and through engineered output. Much of the water released through engineered outputs is necessary for mitigation of either aquatic resources or downstream water rights or beneficial uses.

38. The pit lake is projected to exceed applicable water quality standards. The § 401 Certification states:

The FEIS for the project includes a prediction that water in the filled pit lake will exceed the Washington State Freshwater Chronic and Acute Criteria for one or more toxic water pollutants.

This prediction is based on modeling prepared by Schafer & Associates in 1995 and 1996. The modeling results are produced in the Final Environmental Impact Statement at § 4.6.3; Table 4.7.4; and Appendix E. Notwithstanding these water quality predictions, the Department of Ecology cites two reasons for its ability to provide reasonable assurance that water quality in the pit lake will not exceed standards. First, Ecology believes that the prediction is conservative. Second, even if standards are exceeded, Ecology believes that water in the pit can be treated.

39. The geochemical modeling prepared for the pit lake is not, in fact, conservative in nature. The pit lake water quality modeling relied on what are called humidity cell tests (HCT) that were conducted over a shortened timeframe and on an inadequate number of samples. Leachate concentrations from week 15 HCT results form the foundation for prediction of metal concentrations in the pit lake. The short length of the tests makes it extremely unlikely that maximum metal concentrations were attained from the tests. Metal concentrations and pH values used as inputs to the model did not always reflect the highest metal concentrations or the lowest pH values observed in the HCTs. In addition, leachate metal concentrations for week 15 of the tests appear to be invalid due to exceedence of holding times and undocumented storage and preservation methods. For these reasons, the board does not consider the predicted concentrations for the pit lake to be environmentally conservative. After initial filling with storm reservoir water, when concentrations will be relatively low, pit lake water quality is expected to degrade and contain concentrations of toxic metals that will exceed state water quality standards.

40. The Certification responds to the eventual contamination in the pit lake by requiring the construction of a water treatment plant. The timing of plant construction will be triggered by water quality monitoring during reclamation. If the monitoring results confirm contamination, BMG will be required to proceed with implementing the Contingent Pit Water Treatment Plan. The plan calls for the construction of a water treatment facility that will require perpetual maintenance and upkeep. The plan does not require any assurance for meeting water quality standards during the seven and a half years it will take to construct and implement a treatment plan. During this time contaminated water will be discharging from the pit lake to surface and ground water.

Waste Rock

41. As discussed above, the proposed mine project will result in the creation of two large waste rock facilities. The North Waste Rock pile is proposed to hold approximately 53 million tons of rock and cover roughly 161 acres. The North Waste Rock pile is proposed in the headwaters of Nicholson Creek. The South Waste Rock pile is proposed to hold over 39 million tons or rock and cover approximately 127 acres. Groundwater flow from the South Waste Rock pile will likely reach Marias Creek.

42. The § 401 Certification recognizes that there are significant issues remaining regarding leachate from the waste rock:

The project will result in discharges of leachate from two areas of waste rock to groundwater. These discharges are predicted to exceed the state’s groundwater standards for several contaminants. The applicant has provided a report showing that all known, available and reasonable methods of prevention, control, and treatment (AKART) will not be adequate for these discharges to meet the state’s groundwater standards at the toe of the waste rock piles. The applicant has therefore requested alternate points of compliance for the leachate to meet groundwater standards. Ecology has not yet approved the request.

For the North Waste Rock pile, the applicant has requested an alternate point of compliance to be located approximately at Sediment Trap 6. There are two aquatic resources identified between the North Waste Rock pile and this requested point of compliance-the Frog Pond and Wetland C9. For the South Waste Rock pile, the applicant has requested an alternate point of compliance to be located just down gradient from the tailings facility. There are several aquatic resources between the South Waste Rock pile and this requested point of compliance, including Wetlands C6 and C7, Spring JJ15, and Seep JJ34. Some of the predicted contaminants in the leachate may also exceed surface water quality standards and acute or chronic criteria as well as exceed the groundwater standards.

§ 401 Certification, pp. 12-13. The basis for the § 401 Certification’s determination that leachate will exceed groundwater standards are a series of reports provided by Battle Mountain Gold to the Department of Ecology.

43. It is probable that the existing geochemical modeling for the waste rock

under-predicts the contaminant level in the waste rock leachate. The use of metal concentrations from flawed test results and the use of low metal concentrations from humidity cell leachate tests has resulted in a potentially unreliable underestimation of metal concentrations in leachate used for the waste rock model.

44. Knowledge of discharges from the proposed waste rock facilities is limited. At present, we know that the leachate that will discharge from the waste rock piles is predicted to violate state groundwater standards and that this leachate will travel down gradient as groundwater and discharge to surface waters. Ecology has not accepted Battle Mountain Gold’s predicted flow model describing the path or speed that the leachate will follow from the waste rock facility to surface waters. We note that during the first phase of the hearing in 1998 the respondents represented that mitigation water will flow rapidly through the system to receiving waters. In the second phase of the hearing respondents operated on the opposite assumption that contaminated groundwater from the waste rock piles will take years to reach surface waters. Ecology has not conducted its own modeling to make its own determination on this important issue. Ecology also has not accepted Battle Mountain Gold’s prediction of water quality down gradient of the waste rock piles. Neither has Ecology conducted its own model of water quality down gradient from the proposed rock piles. In short, Ecology’s review of discharges from the waste rock facilities is a work in progress. Ecology’s determination that it could provide reasonable assurance is based on its belief that it can control discharges through the NPDES permit process.

45. The fate and direction of waste rock leachate is a significant area of concern. Where the contaminated leachate will go raises two significant areas of concern: contamination of Nicholson or Marias Creeks as well as the Frog Pond located immediately adjacent to the North Waste Rock Facility.

46. Hydrogeologic characterization in the vicinities of the proposed waste rock facilities is largely limited to definition of surface features. Additional characterization is required before monitoring systems can be designed and assurances provided. Characterizations performed within the proposed pit area cannot be reasonably extrapolated to surrounding areas, especially at the level of detail needed to predict contaminant transport pathways. However, evidence from the pit area and the surrounding areas supports the presence of large-scale heterogeneities and preferential flow features. Such features can have a profound influence on groundwater flow patterns and contaminant transport.

47. Model predictions of groundwater flow directions surrounding the proposed facilities are also insufficient to establish that a monitoring system based largely on modeled predictions can provide reasonable assurance that contaminants would be detected before reaching surface water. The model largely assumes a homogeneous bedrock aquifer outside of the proposed pit, thus disregarding the influence of potential heterogeneities and preferential flow features.

48. Prediction of flow and transport is typically much more difficult in fractured rock than in porous media. Heterogeneities that assert a relatively small influence on regional groundwater flow can strongly influence patterns of transport. A relatively large portion of contaminants can be transported in relatively few features, and prediction of mixing along a groundwater flow path is less certain than for more homogeneous porous media. An isotrophy in bedrock aquifers (due to fractured geometries) can cause contaminants to move in directions inconsistent with predictions based on groundwater level monitoring. These additional uncertainties dictate increased conservation in both monitoring and predictive analyses.

49. The effectiveness of groundwater modeling systems for detecting subsurface contamination can be significantly reduced due to inherent uncertainties and heterogeneities. These features also make treatment of contamination in fractured rock more difficult and typically less successful.

50. There are no firm conclusions on the range of predictions for the length of time it would take for groundwater moving from the North Waste Rock pile to reach the Frog Pond. Predictions range from days to decades. While a monitoring well next to the Frog Pond may detect contaminants moving from the waste rock pile toward the Frog Pond, the amount of response time the detection will provide is unknown.

51. In summary, Ecology has not obtained sufficient information to provide reasonable assurance that water quality standards will be protected from leachate discharging from the waste rock facilities.

Aquatic Resources Mitigation Plan

52. The proposed mine will result in direct impacts through filling and excavation to approximately 3.6 acres of wetlands and 8 springs and seeps. In addition, the proposed mine will result in indirect impacts to approximately 15.15 acres of wetlands and 9 springs and seeps. The indirect impacts are primarily from flow reduction from dewatering during mining and from draw down caused by the post-mining pit lake.

53. These impacts are addressed under an Aquatic Resources Mitigation Plan (ARMP). Compensation for these impacts is based primarily on enhancement of downstream wetlands and streams. BMG is not able to provide extensive onsite mitigation due to resistance of federal agencies that manage the land. The federal agencies are unwilling to make long term commitments to mitigation measures that might be inconsistent with their land management priorities. The direct impacts to Buckhorn Mountain’s headwaters, wetlands, seeps, and springs, are therefore compensated by off-site and out-of-kind mitigation.

54. The ARMP focuses on preservation and limited enhancement of off-site resources, not on actual compensation for or replacement of lost resources. The level of proposed mitigation is insufficient to compensate for the impacts to wetlands and streams on Buckhorn Mountain. Many of the resources proposed for protection or enhancement are already in existence, and are already protected by existing environmental laws. Since these sites already provide some valuable functions to aquatic resources, the additional protection of these resources as proposed in the AMRP provides no real compensation for the impacts from mining operations.

55. Any conclusion of law deemed to be a finding of fact is hereby adopted as such.

Based on the foregoing findings of fact the board enters the following

CONCLUSIONS OF LAW

56. The board has jurisdiction in these appeals pursuant to Chapter 43.21B RCW.

57. There is no dispute that the proposed mine will require significant mitigation of adverse impacts to water supplies and water quality. The proposed mine will result in the degradation of nearly 800 acres of mostly public lands. When all is said and done the mine will increase consumptive water use and result in a permanent shift in the hydrogeologic divide between two watershed basins. Both of these basins have been putatively closed to new appropriations of water. For many years Ecology has denied all new water right applications in these basins to preserve adequate stream flows for fisheries. When the mine closes, we will be left with a deep pit lake, two massive waste rock disposal piles and a tailings impoundment facility. The tailings impoundment will smother over 4,200 lineal feet of a headwaters stream. The pit lake is projected to violate state water quality standards from metals leached from the exposed rock walls of the pit. The waste rock piles are also predicted to leach pollutants and will not meet state water quality standards at the toe of the piles.

58. The proposed mitigation, as more fully set forth below, is not legally sufficient to meet the criteria for approval of the water right applications or providing reasonable assurance for the § 401 Certification. The physical knowledge of the affected lands is limited in critical areas necessary to conclude that proposed mitigation water is sufficient or that the water will be delivered in a timely manner to affected streams. The mitigation is therefore highly speculative and uncertain. The same must be said for the permanent engineered solutions offered for the shift in a hydraulic divide. The proposal in essence calls for re-plumbing a watershed with facilities that must be maintained forever. The same is true for the pit lake. The response to predicted pollution in the pit lake is to construct a water treatment plant on top of a mountain that will have to be powered and maintained forever. We are unable to say what will ultimately happen with the waste rock piles. We know that they will pollute the environment. How or in what manner the applicant and state will respond to this pollution is unknown.

59. The only real assurance we have is the proposed bonding that the state may rely on to enforce environment laws in the future. This approach is tantamount to entering a busy interstate highway on an exit ramp against the traffic. The availability of insurance in that circumstance is no more comforting than the proposed bonding here. The focus of our environmental laws must be on preventing pollution and habitat degradation. It is not legally sufficient to proceed with the proposed mine without much more specific knowledge of the potential impacts from the development and meaningful means of preventing and protecting against the adverse consequences of the development. The long-term engineered solutions proposed in this case are legally insufficient.

60. The water right applications are subject to the four-part test under RCW 90.03.290 and RCW 90.44.060.[1] There must be an affirmative showing that water is available for appropriation, the proposed appropriation is for a beneficial use, the appropriation will not impair existing rights, and the appropriation will not detrimentally affect the public welfare. There is no dispute that water is available and will be put to a beneficial use. There is further no dispute that the proposed water rights will result in an impairment of existing rights. This impact is resolved through the mitigation plan approved by Ecology. We conclude that the proposed mitigation is insufficient and, therefore, that the proposed water rights would result in an impairment of existing rights and not satisfy the requirements of RCW 90.03.290.

61. The inadequacy of the mitigation plan rests primarily on the lack of information supporting the scheme. As thoroughly as this proposed mine has been studied and evaluated, it is not at all certain that we have a clear understanding of the hydrogeology on the site. There are substantial questions about the stream flows, ground water flows and relative precipitation. Without more information it is uncertain how much water will be needed for mitigation and when mitigation water will reach intended streams. Further, because post-reclamation mitigation is required in perpetuity to offset the permanent shift in the groundwater divide, the boreholes and treatment facilities required for post-reclamation mitigation must be maintained forever. The speculative and perpetual nature of mitigation proposed here does not meet the requirements that new water rights not impair existing rights or the requirement that new rights not be detrimental to the public welfare. Manke Lumber Co. v. Department of Ecology, PCHB 96-102 (1996).

62. Water quality certifications are required under the following terms of section 401 of the Clean Water Act (CWA) (33 U.S.C. 1341):

Any applicant for a Federal license or permit to conduct any activity including, but not limited to, the construction or operation of facilities, which may result in any discharge into navigable waters, shall provide the licensing or permitting agency a certification from the State in which the discharge originates or will originate that any such discharge will comply with the applicable provisions of 1311,1312, 1313, 1316, and 1317 of this Title.

The state thus certifies that a proposed federal action complies with applicable water quality laws. The federal action at issue here is a dredge and fill permit under section 404 of the CWA (33 U.S.C. § 1344) to develop and operate certain aspects of the mine and mitigation measures related to the mine development. The United States Army Corps of Engineers issued a section 404 permit on June 28, 1999. The Department of Ecology issued its water quality certification on January13, 1999.

63. A § 401 Certification means that the state has reasonable assurance that there will be compliance with water quality laws. Friends of the Earth v. Department of Ecology, PCHB No. 97-64 (1988). Appellants contend that reasonable assurance is not present here because the pit lake will constitute a water of the state and the treatment plan provides for some period of time over which the water quality in the lake must come into compliance with water quality standards. The appellants moved for summary judgment on this issue. Our water pollution laws do not mandate such stringent purity in waters of the state. Waters of the state are broadly defined to include any and all surface water and groundwater. RCW 90.48.020. Water quality regulations recognize the impact of human activity and provide means to allow for reasonable compliance through measures such as mixing zones, WAC 173-201A-100, compliance schedules, WAC 173-201A-140, and, as in this case, alternate points of compliance, WAC 173-201A-060. It would be seemingly impossible to undertake any type of mining or construction without causing some disturbance of soils that might lead to a violation of water quality standards. It is therefore reasonable to establish time periods and boundaries within which a mining activity must come into compliance with applicable standards.

64. We nonetheless conclude that § 401 Certification is unsupported by the record before the board.[2] The only available model predicts that the pit-lake will violate water quality standards. The contingent response to this is to construct a high-altitude water treatment plant that must be powered and maintained in perpetuity. The long term speculative success of a permanent water treatment facility should not replace the protections afforded by our water quality laws. Even more speculative is the projected pollution from the two waste rock facilities. There is significant uncertainty about the characteristics of the pollution, its flow paths, rate of discharge or even the appropriate point of compliance. It is not appropriate to issue a Certification given the lack of information about the extent and fate of contamination from the waste rock facilities. Barrish & Sorenson Hydroelectric Co., Inc. v. Ecology, PCHB No. 94-194 (1995). Under these circumstances the more appropriate conclusion is that there is presently no reasonable assurance to support a § 401 Certification.

65. The § 401 Certification also requires reasonable assurance that any impacts to aquatic resources will be fully mitigated. This requirement is derived from the Washington State anti-degradation policy:

Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated. Wastes and other materials in the substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served.

RCW 90.54.030(3). Our water quality standards similarly emphasize that “existing beneficial uses shall be maintained and protected and no further degradation which would interfere with or become injurious to existing beneficial uses shall be allowed.” WAC 173-201A-070(1). This regulation was adopted pursuant to NPDES permit authority delegated to the State of Washington under the Federal Clean Water Act. 33 U.S.C. § 1313; PUD No. 1 v. State of Washington, 511 U.S. 700, 705 (1994). See RCW 90.48.260.

66. In the context of wetlands the anti-degradation policy is expressed in terms of a goal that there be no net-loss of wetlands. In regulating activities impacting wetlands the department requires a staged analysis and mitigation ratio. O’Hagen v. DOE, PCHB No. 95-25 (1995).

67. The anti-degradation policy does not prohibit all impacts to aquatic resources. Instead, as applied to wetlands, the policy mandates that impacts be avoided, minimized and compensated. It is true that Ecology reduced the direct wetland impacts on-site to 3.9 acres. This required some reconfiguration of the proposed operations. It is not clear, however, what analysis was made of avoiding the impacts altogether. There may be alternative locations for the tailings facilities rather than over 4,200 lineal feet of a headwater stream. However, even if the impacts are unavoidable, the record does not establish that the proposed level of compensation is adequate. The applicant is obviously limited in mitigation options because most of the site lies on publicly owned lands. This severely limits the ability of BMG to provide on-site mitigation. The resulting hodge-podge mitigation plan does not, however, provide adequate mitigation. In general the plan promotes modest improvement and protections to existing resources. The mitigation plan additionally inflates the degree of compensation afforded for the mine. Much of the acreage credited for mitigation is in fact located on uplands. Some credit is due for the extent of mitigation proposed. It is not enough, however, given the overall impact and uncertainties associated with the mine.

68. Any finding of fact deemed to be conclusion of law is hereby adopted as such.

Based on the foregoing findings of fact and conclusions of law the board enters the following

ORDER

The appeals of the water right determinations are hereby GRANTED and the subject Reports of Examination are REVERSED;

The appeals of the § 401 Certification are hereby GRANTED and the same is VACATED.

DATED this 19^th day of January, 2000.

POLLUTION CONTROL HEARINGS BOARD

JAMES A. TUPPER JR., Presiding

ANN DALEY, Chair

ROBERT V. JENSEN, Member

PCHB 97-146 Final

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[1] Our analysis here, together with the foregoing findings of fact are intended to encompass the remaining issues presented to the board for the 1998 hearing. We do not however, separately address whether a supplemental EIS was required for the streamflow mitigation. Those issues are moot given the board’s ruling today.

[2] Our analysis together with the foregoing findings of fact are intended to encompass all of the remaining issues presented to the board for hearing in 1999. Having reversed the § certification, the board does not address the SEPA issues.