Raney said the arrangement could cost the state up to 1,000 jobs at companies that have mountaintop removal permits pending.
"There are permits pending that have short triggers or have been in the pipeline for 24 months or more," Raney said. "The industry just can't operate this way. We depend on the timely issuance of permits."
Privately, officials from the DEP Office of Mining and Reclamation have also complained about the lawsuit settlement.
The settlement does not dismiss separate allegations that DEP has improperly permitted mountaintop removal mines that violate stream buffer zone rules and post-mining development requirements for flattened mine sites.
Roger Wolfe, a lawyer for three Arch Coal Inc. subsidiaries, said his clients have not decided whether they will fight the settlement. Wolfe said he wants to see what the conservancy and the government say the settlement means before a decision is made.
"Who can tell you, from that document, what you need to do to get a permit?" Wolfe said. "It just doesn't say.
"Just what does it mean and what effect will it have on the industry?" he said. "It's just a very amorphous document that doesn't address any of these things."
The federal plan itself may not need Haden's approval. But the motion to dismiss the allegations against the Corps - a condition of the settlement containing the plan - must be authorized by the judge.
Cindy Rank, mining chairwoman of the conservancy, said the settlement is a reasonable compromise that the coal industry should accept.
"I knew they wouldn't like it, but it's impressive how much they don't like it," Rank said.
"I don't know what this means in the long run," she said. "But as much as we had trouble accepting it, it's a reasonable compromise. To think that even such a reasonable resolution of these questions would be challenged is a little outrageous."