A landmark court settlement will allow coal operators to continue blasting the tops off West Virginia mountains and burying streams under waste rock and earth. Mountaintop removal mining will remain legal.

But the settlement will force environmental regulators to, for the first time, take a much closer look at how mowing down forests, flattening out hilltops and burying streams affect the environment.

The settlement, worked out in secret by lawyers for environmental groups and the federal government, gave one coal company, Arch Coal Inc., a new permit it desperately wanted.

However, a little-noticed part of the agreement could spell trouble for the rest of the strip-mining industry: If it works out as expected, the settlement will result in a two-year moratorium on new permits for large-scale mountaintop removal mines. No new mountaintop removal mines would be authorized until regulators complete a long-term study of the mining method's impacts and come up with ways to lessen those impacts.

Mountaintop removal mining uses explosives to blow apart hilltops and uncover valuable low-sulfur coal underneath. Huge shovels and dozers dump leftover rock and earth into waste piles called valley fills, which bury streams.

Under federal environmental laws, regulators are supposed to understand potential environmental effects - and force companies to take steps to minimize them - before permits are issued. State and federal officials conceded they don't fully understand mountaintop removal's long-term impacts.

In July, the West Virginia Highlands Conservancy and a coalition of coalfield residents filed a lawsuit in federal court to try to curb mountaintop removal.

Among other things, the lawsuit alleged that valley fills had been illegally permitted by the U.S. Army Corps of Engineers. The corps, the lawsuit alleged, improperly authorized valley fills under the "dredge and fill" provisions of the federal Clean Water Act. In legal depositions, corps officials agreed with these allegations. If upheld by the courts, this would have meant that the mining industry could no longer use valley fills to dispose of its waste.

On Dec. 23, various federal agencies and the Highlands Conservancy signed a settlement agreement that called for both short-term and long-range changes in mountaintop removal regulation.

The settlement would require the U.S. Environmental Protection Agency, the corps of Engineers, the federal Office of Surface Mining and the Fish and Wildlife Service to conduct a two-year study of mountaintop removal's environmental impacts. The study would be geared toward finding out what new types of rules are needed to limit adverse environmental effects.

Until the two-year study is complete, the settlement requires somewhat smaller environmental studies of every new mountaintop removal permit that proposes to fill in a stream with a drainage area of 250 acres or more. Only the Arch Coal Spruce No. 1 permit, proposed for near Blair, Logan County, would be exempt.

EPA Region III Administrator W. Michael McCabe, who pushed for environmental groups to approve the settlement, said in a news release: "Large surface mines will now have to undergo an exhaustive environmental assessment before they can be permitted. The comprehensive, unified federal plan will ensure that all the environmental impacts can be limited, and those that do occur will be properly mitigated."

What McCabe didn't say in his news release is that the smaller, single-permit environmental studies could each take two years to complete. That means that many large-scale surface mine permits now pending won't be issued for at least two years.

At least 18 of 40 mountaintop removal projects now on the drawing board would meet the 250-acre threshold, meaning individual studies would be required, according to EPA figures.

In an interview last week, McCabe conceded that the timing could allow federal officials to complete their more thorough study - and suggest more regulatory reforms - before any more new permits are issued.

"This clearly is going to change the way mountaintop removal is done," McCabe said. "They are going to have to undergo much more scrutiny. This is something that should have been done before, but we're going to do it now."

McCabe announced the settlement Dec. 23. Most coal industry observers and insiders haven't had much time to scrutinize the agreement in any detail. But, in interviews last week, most wanted to know if their fears of a moratorium were correct.

But the settlement will force environmental regulators to, for the first time, take a much closer look at how mowing down forests, flattening out hilltops and burying streams affect the environment.

The settlement, worked out in secret by lawyers for environmental groups and the federal government, gave one coal company, Arch Coal Inc., a new permit it desperately wanted.

However, a little-noticed part of the agreement could spell trouble for the rest of the strip-mining industry: If it works out as expected, the settlement will result in a two-year moratorium on new permits for large-scale mountaintop removal mines. No new mountaintop removal mines would be authorized until regulators complete a long-term study of the mining method's impacts and come up with ways to lessen those impacts.

Mountaintop removal mining uses explosives to blow apart hilltops and uncover valuable low-sulfur coal underneath. Huge shovels and dozers dump leftover rock and earth into waste piles called valley fills, which bury streams.

Under federal environmental laws, regulators are supposed to understand potential environmental effects - and force companies to take steps to minimize them - before permits are issued. State and federal officials conceded they don't fully understand mountaintop removal's long-term impacts.

In July, the West Virginia Highlands Conservancy and a coalition of coalfield residents filed a lawsuit in federal court to try to curb mountaintop removal.

Among other things, the lawsuit alleged that valley fills had been illegally permitted by the U.S. Army Corps of Engineers. The corps, the lawsuit alleged, improperly authorized valley fills under the "dredge and fill" provisions of the federal Clean Water Act. In legal depositions, corps officials agreed with these allegations. If upheld by the courts, this would have meant that the mining industry could no longer use valley fills to dispose of its waste.

On Dec. 23, various federal agencies and the Highlands Conservancy signed a settlement agreement that called for both short-term and long-range changes in mountaintop removal regulation.

The settlement would require the U.S. Environmental Protection Agency, the corps of Engineers, the federal Office of Surface Mining and the Fish and Wildlife Service to conduct a two-year study of mountaintop removal's environmental impacts. The study would be geared toward finding out what new types of rules are needed to limit adverse environmental effects.

Until the two-year study is complete, the settlement requires somewhat smaller environmental studies of every new mountaintop removal permit that proposes to fill in a stream with a drainage area of 250 acres or more. Only the Arch Coal Spruce No. 1 permit, proposed for near Blair, Logan County, would be exempt.

EPA Region III Administrator W. Michael McCabe, who pushed for environmental groups to approve the settlement, said in a news release: "Large surface mines will now have to undergo an exhaustive environmental assessment before they can be permitted. The comprehensive, unified federal plan will ensure that all the environmental impacts can be limited, and those that do occur will be properly mitigated."

What McCabe didn't say in his news release is that the smaller, single-permit environmental studies could each take two years to complete. That means that many large-scale surface mine permits now pending won't be issued for at least two years.

At least 18 of 40 mountaintop removal projects now on the drawing board would meet the 250-acre threshold, meaning individual studies would be required, according to EPA figures.

In an interview last week, McCabe conceded that the timing could allow federal officials to complete their more thorough study - and suggest more regulatory reforms - before any more new permits are issued.

"This clearly is going to change the way mountaintop removal is done," McCabe said. "They are going to have to undergo much more scrutiny. This is something that should have been done before, but we're going to do it now."

McCabe announced the settlement Dec. 23. Most coal industry observers and insiders haven't had much time to scrutinize the agreement in any detail. But, in interviews last week, most wanted to know if their fears of a moratorium were correct.

"I don't have a warm and fuzzy feeling about that," said Ben Greene, president of the West Virginia Mining and Reclamation Association. "Two years is out of the question. You're going to see a lot of people out of work."

Greene said he is particularly worried that the settlement's provisions won't be enforced in other coal states, especially Kentucky. That would put West Virginia operators at a disadvantage, Greene said.

Bill Raney, president of the West Virginia Coal Association, said the coal industry wasn't consulted about the settlement. Of particular concern, Raney said, was why only the Arch Coal permit, and not other pending permits, was exempted from the settlement requirements.

"We'd like to have a little bit of input somewhere along the line, since it affects use," Raney said. "I wasn't at the table. No one cared about my opinion until you asked me."

Coal industry groups that intervened in the lawsuit filed a motion late last week asking Chief U.S. District Judge Charles Haden to hold a conference or hearing to discuss the settlement's potential impacts. Haden scheduled a closed-door conference for Thursday. Haden must approve a motion to dismiss parts of the lawsuit before the settlement is finalized.

Environmental activists had their own problems with the settlement.

Many felt it didn't go far enough, and wanted to reject the deal and litigate the case, hoping to win a ruling that would result in a ban on valley fills altogether. Others felt such a ruling, which would cripple the mining industry, would never occur or, at least, wouldn't stand up under appeal.

"Short of the world rising up and saying that mountaintop removal is wrong and shouldn't happen, which is what a lot of us want, this is our best shot," said Cindy Rank, mining chairwoman for the Highlands Conservancy.

Environmentalists did manage to stall EPA for several weeks and strengthen certain portions of the settlement. They also refused to sign off on the granting of the Arch Coal permit, maintaining their right to challenge it in court separately.

Also, environmentalists refused to drop separate allegations in their lawsuit against the state Division of Environmental Protection.

Those allegations charge that DEP ignores various permit requirements, such as stream buffer zones and a mandate that land flattened by mountaintop removal be reclaimed for use by factories, shopping malls or public parks. Those portions of the lawsuit will be litigated later this year.

Rank said the settlement is far from the end of the mountaintop removal controversy.

When the Legislature comes to town next week, mountaintop removal will be among the top issues. Some citizen groups plan to continue to press for a ban on mountaintop removal. Others want further limits on blasting, or the repeal of a bill lessening the requirements for mitigating for streams buried by valley fills.

In the end, Rank said, citizens will have to keep a close watch on state and federal regulators if the settlement is to do any good.

"A whole lot depends on how willing EPA is to put forth an extraordinary effort over the next few years," Rank said. "The only thing that will make this work is that kind of commitment.

"This settlement is a good step forward," she said. "How good a step it is depends on the resources and the resolve that are available at the agencies involved.

"We need a lot of vigilance on the part of the people who are already stretched thin. At best, this will control, but if we want to stop this, we have to keep bringing to the public images of the loss of communities and the loss of Appalachia."