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They got the Gold Mine ... 

He got the shaft

click to enlarge KENNETH WAJDA

One glance at the dilapidated headframe of the old El Paso Mine and you know its owner, Dennis Schoger, 53, ain't no miner -- or at least he's never done any mining at this worn-down hillside a few miles outside of Cripple Creek.

The weathered tower, a creaking derrick of wood and twisted steel, stands sentry over a crater of rubble.

"I've never done any mining here or anywhere," said Schoger, looking down at the caved-in shaft. "I'm a farmer and a rancher. My brother bought this property as an investment."

Like hundreds of other owners of inactive mines around the state, Schoger says he came into the property as a lark. A few years after his brother bought the land in 1968, Schoger joined him to form a corporation thinking that, someday, it might be worth something.

Turns out, it might not have been the best investment.

Schoger's company, El Paso Gold Inc., is being blamed for all the pollution running out of the historic Roosevelt drainage tunnel that runs underneath his property and empties roughly 2.5 miles away onto land owned by the federal Bureau of Land Management on the banks of Cripple Creek.

Solely to blame

Schoger's trouble began in the fall of 2001, when two environmental groups sued his neighbor, the massive Cripple Creek and Victor Gold Mining Company, blaming the state's largest gold mining operation for polluting Cripple Creek and nearby gullies.

Investigations related to the lawsuits quickly put some of the spotlight on water and pollution spilling from Schoger's El Paso mine into the Roosevelt Tunnel. Levels of zinc and manganese in the tunnel exceed safe-water standards set by the Environmental Protection Agency.

After that discovery, the Sierra Club and the Mineral Policy Center (an environmental watchdog group based in Washington D.C.), sued Schoger in Federal Court for violating the Clean Water Act by emitting pollution into a federal waterway, in this case, Cripple Creek. A few months later, the state got into the act, issuing Schoger's company a Notice of Violation for years of low-level pollution discharges.

Nine months ago, a federal magistrate ruled Schoger must pay $94,900 in fines, possibly build a treatment plant, and pay some $247,000 in attorney's fees to the Sierra Club and Mineral Policy Center. Schoger has appealed the decision to the 10th Circuit Court of Appeals.

At the heart of Schoger's defense is a basic question: "Why me?" Why, he wonders, did the environmental groups decide he alone was to blame?

Since the tunnel was built by dozens of mine owners to benefit the entire gold-mining district in Cripple Creek -- and since the tunnel spans nearly seven miles under a variety of owners, including the federal government -- Schoger thinks that all property owners should help solve the problem.

"To take someone like ourselves who maybe have 800 feet of tunnel and say we're responsible for seven miles of drainage -- it's just foolish," he said.

For its part, the Mineral Policy Center says it wasn't trying to single out Schoger. They were suing the Cripple Creek and Victor mine over alleged Clean Water Act violations and it became clear to them that Schoger was responsible for some pollution too. So they sued him in order to affect a cleanup.

Roger Flynn, an attorney representing the Mineral Policy Center, the legal team that brought the suit, says tests show most of the water flowing into the Roosevelt Tunnel comes from the long nonoperational El Paso Mine.

"When you buy a piece of property, you get the benefits and the liabilities," he says, noting that the benefits could include mining revenue sometime in the future. "There's no exemption in the Clean Water Act for someone who is not actively mining."

If people were let off the hook because they didn't themselves do any digging, Flynn says, mining companies could restructure their corporate ownership or purchase land without having to accept any environmental liability. "You could drive a huge mining truck through that loophole," he said.

Going it alone

Schoger's old mine is at the center of one of the most pernicious pollution conundrums facing the Rocky Mountain West: Who should clean up the toxic metals and acid-rich water that run off from thousands of abandoned mines littering Western states? (See sidebar, page 21.)

click to enlarge Dennis Schoger - KENNETH WAJDA

Around the United States, more than a half million such mines or mine-waste sites leak acid and heavy metals into once vibrant ecosystems. In Colorado, the agency that regulates mines, the Division of Minerals and Geology, estimates some 33,000 abandoned mines are scattered around the state.

But since most of the companies that created the waste a century ago are long gone, most of these historic mines are now in the hands of private landowners (many of whom, like Schoger, purchased the land well after mining ended on the property) as well as public land agencies such as the U.S. Forest Service and the U.S. Bureau of Land Management.

Now, it seems, Schoger is an unwitting pioneer. When the state issued its Notice of Violation against him in the summer of 2002, Schoger became the only "wholly passive" mine owner to be forced by the state to get a permit for pollution from a historic mine. He's the first exception to a long-held policy that the state would not enforce against nonactive owners of abandoned mines unless the pollution was deemed "significant."

Because there are so many old mines in Colorado, the state simply doesn't have the time, money or manpower to track down owners of abandoned mines, conduct research, test pollution levels, issue permits and oversee compliance, said Dave Akers, manager of the water quality protection section of the Colorado Department of Public Health and Environment.

"There are so many complicating issues of ownership, surface ownership, mineral ownership, separate water rights ownership, so it's extremely complicated in the sense of even finding out who the responsible party might be," Akers said.

Generally cooperative

Though Schoger is an obvious exception, federal and state agencies have generally adopted a cooperative approach with individual landholders, rather than aggressive enforcement and expensive litigation.

Take the case of the Dinero Mine near Leadville, a cleanup orchestrated by the Bureau of Land Management. Instead of slapping the current owner, a retiree who lives in California named John Lundquist, whose only role in mining history was to inherit 70 acres of land, the federal government and other local groups are cleaning up contaminated wetlands for him.

"It's been cooperative on both sides," said Lundquist, a 73-year-old former government worker from Placerville, Calif., who intends residential development for the property. "The [BLM] got a grant to do this and they're putting some money into it."

There are dozens of similar cases around Colorado in which government agencies are working with the owners of historic mines to clean up the property, most often without legal action, fines or lawsuits.

A similar unofficial pact has evolved between environmental enforcement agencies and the federal land agencies. "You could call it a gentleman's agreement," said Rob Robinson, who coordinates mine reclamation projects for the Bureau of Land Management, which has several major cleanup projects underway around the state.

After all, notes Robinson, the BLM didn't make the mess. "The federal government ended up with these mines almost by accident, through no action on our part," he said.

Even in the state's worst environmental disasters -- superfund sites like the sprawling California Gulch mining district around Leadville or the five-mile Argo Tunnel in Idaho Springs -- EPA officials generally don't go after owners of small mine parcels that may be contributing some of the pollution, said Mike Holmes, project manager for three of the state's biggest historic mine superfund cleanups.

Some say enforcement actions against historic mines often just get in the way of already slow and difficult cleanups.

In some cases, mine reclamation work is stopped short because landowners are scared off by the threat of ongoing legal liability. Under the Clean Water Act, anyone disturbing water flow in an area of a pollution "discharge" must get a permit, which in turn could force the groups to build a multimillion-dollar treatment plant.

"It inhibits everyone," says Bill Simon, coordinator of the Animas River Stakeholder Group, a consortium of environmental, mining and civic groups cleaning up dozens of mines in the Silverton area in southwest Colorado.

"A private landowner is not going to want to voluntarily clean up his property because it would draw attention to his property. Once you're on the radar screen [of regulators], you're exposed to endless liability."

Ad hoc enforcement

That is exactly what happened to El Paso Gold Inc. When asked why a relatively modest polluter gets prosecuted when much larger polluters get kinder, gentler treatment, the state's Akers said it was simple. "First of all, a case has to come to attention," he said. "In this case [it] came to our attention because of the lawsuit [filed by the Sierra Club and Mineral Policy Center]."

The result, however, is that enforcement against passive mine owners is ad hoc, with abandoned mine owners getting treated in drastically different ways.

Just a few miles from the El Paso mine site, for example, an abandoned tailings pile in Milsap Gulch is sending tons of fine-grained nontoxic sediment 12 miles downstream, choking rancher Bob Shoemaker's irrigation ditches and alfalfa crops.

click to enlarge The entrance to the Roosevelt Tunnel, which drains into Cripple Creek, is dry most of the year, but its the heart of the lawsuit against El Paso Gold Inc. - KENNETH WAJDA
  • Kenneth Wajda
  • The entrance to the Roosevelt Tunnel, which drains into Cripple Creek, is dry most of the year, but its the heart of the lawsuit against El Paso Gold Inc.

But no action has been taken against the landowner.

"A lot of times, by the time it gets down here, it's like pancake dough," Shoemaker said. "As soon as the water slows down, the sediment drops out of it. It just covers the ground. It leaves about two inches of silt in the irrigation ditch. In places where it gets thick, it smothers the hay."

In fact, the site is the subject of a cooperative cleanup effort between the BLM, the Division of Minerals and Geology, Cripple Creek & Victor gold mine, the National Association of Mines and the landowner.

Still, most of these sites involved significant pollution problems that were documented over decades by numerous agencies. There is no such history with the El Paso mine.

So while the Dinero Mine and others like it get help from the government to clean up their messes, Schoger, without warning, got slapped with a lawsuit.

Lava and hot gasses

On a recent fall day, the hillsides around the El Paso mine are eerily quiet. The only sound is the wind rushing through the dazzling flourishes of aspen leaves that have turned surrounding hills into a patchwork of bright gold.

But this property wasn't always so serene. A century ago, it was the site of a full-blown mining operation, bustling with energy and noise. The steel cable that lowered some 200 miners a day down 1,300 feet into the earth squawked and wailed, and a nearby ore-processing plant rumbled and moaned.

Today, it's a mini ghost town. The old elevator cable pops out of the caved-in shaft -- a twisted, rusted old strand of steel.

But the story of Schoger's run-in with environmental history doesn't even start here. The long tale of the pollution from the El Paso mine begins a long time before that -- roughly 35 million years ago, when what would later be known as the "Front Range" was a violent, rocking swath of volcanic activity belching lava and hot gases.

That's when molten rock from the Earth's core shot its way through the earth, driving a wedge of lava right up through the heart of what is now the Cripple Creek historic mining district. The exploding lava rocked the world around it, shooting branches of molten rock into the surrounding earth, cracking massive formations along fault lines and filling up the void with burning ooze.

As that lava mineralized over the eons, it created the veins of gold ore that would later be tapped by miners like Bob Womack and Winfield Scott Stratton. The geologic veins and fractures ultimately contributed to the side effect of mining: water pollution.

"The rain water gets into the fractures and runs down the fractures in mineralized areas where most of metals and sulfides are," said Robinson, coordinator of mine reclamation projects for the Bureau of Land Management. "When the water and the sulfides get mixed up together you get sulfuric acid, which leaches the metals out of the rock."

When the rock is freshly disturbed, water comes in contact with sulfur and metals and it creates a fresh palate of pollutants ready to be taken downstream. Mine "tailing piles" or dumps of unused rock are particularly nasty because the minerals are exposed directly to the elements.

Draining the district

By the beginning of the 1900s, owners of the El Paso and other mines had dug down far enough to begin hitting water. They pumped the water out, but after a series of expensive floods ruined mine gear, a few owners, led by a banker named Bert Carlton, decided they needed to do something more profound. They decided to drain the whole district.

The solution was something called the Roosevelt Tunnel. They started drilling into the canyon walls that line Cripple Creek and headed north. In the end, they had a seven-mile tunnel that ran from the heart of the gold district (now under the CC&V mine) past the El Paso Mine and on down to Cripple Creek.

The tunnel, completed in 1907, worked fabulously. It lowered the water table some 1,500 feet, allowing mines all over the district to go even deeper. If not for the Roosevelt, one of Cripple Creek's most fantastic discoveries would not have been made: the Portland Vug, a huge geode of gold crystals the size of a living room -- a one-time bonanza that netted some $3 million, according to historian Marshall Sprague.

Later, in the 1940s, mine owners once again pooled their resources and built another drainage tunnel, the Carlton Tunnel, which sits more directly under the Cripple Creek and Victor Gold Company.

The tunnels enabled the miners to dig even deeper, but both the Roosevelt and the Carlton ultimately became funnels for pollutants that now drain into Cripple Creek. Now, environmental regulators hold CC&V responsible for water coming from Carlton Tunnel, which rests mainly under their property, and the El Paso mine for the Roosevelt.

Schoger says it's not fair. The Roosevelt Tunnel, he maintains, was built by dozens of mine owners for everyone's benefit. Now, nearly 100 years later, one company that has no assets and no mining history is being blamed for the results. On top of that, he says, the area's complex hydrology means that no one is really sure who is responsible for the water or the pollution.

click to enlarge The Roosevelt Tunnel also runs under land owned by The Cripple Creek & Victor Gold Mine company, an expansive ongoing gold mining operation. - KENNETH WAJDA
  • Kenneth Wajda
  • The Roosevelt Tunnel also runs under land owned by The Cripple Creek & Victor Gold Mine company, an expansive ongoing gold mining operation.

The Blair Witch Project

"This video is gonna look like something out of The Blair Witch Project."

The man holding the video camera is chuckling, but his comment is not far off. If not for the hard hats and occasional pauses -- to measure water flow, take a water sample and make matter-of-fact recordings of location points -- David Vardiman's video could seem like a takeoff of that famous B-movie takeoff.

The shaky hand-held camera. The head lamps bouncing off the tunnel walls in jerky movements. The echo of voices into a dark, cavernous void.

But this isn't a low-budget feature: It's the key piece of evidence in the state's case against El Paso Gold. In 2001, four environmental engineers for CC&V, already being sued themselves for discharges from that tunnel, strapped on headgear and headed into the tunnel in an effort to document where the water and pollution in the tunnel were coming from.

As they make their way up the tunnel, water on the tunnel floor is a solid sheet of ice. A bit farther up, as the ice gives way to a trickle of water, some 2 to 3 inches deep, they pass stalactites of ice, hanging from the ceiling.

They pass water dripping out of rock walls, cave-ins that form small dams for pools of icy water. They spot white chalky mineral deposits that Vardiman notes is likely residue from mining activity in the area. They spot footprints from the last time CC&V engineers walked up the tunnel to inspect water quality: 1998.

Finally, they reach the bottom of the El Paso shaft. The video records a shower of drips that, while hard to see on the screen, make a rich cascading sound.

Farther up the tunnel, the pathway is relatively dry, indications that engineers and lawyers contend show that most of the water originates at the El Paso mine shaft. What else did the engineers find? Levels of zinc and manganese were high where the mine drained into the Roosevelt Tunnel.

To the state Division of Water Quality, as well as lawyers for the Sierra Club and Mineral Policy Center, that confirmed earlier readings that clearly proved El Paso mine's guilt: Pollution and water were leaving the mine and pollution was entering Cripple Creek at the end of the Roosevelt Tunnel.

But there's a problem with that logic, argues attorney Steve Harris, a Colorado Springs environmental activist who -- in a reversal of his usual role -- is representing the mining company.

In the two and a half miles of tunnel between the El Paso mine shaft and Cripple Creek, levels of both pollutants and water fluctuate dramatically, indicating that water may come and go through thousands of tiny fissures in the tunnel walls and floor. In short, there may be no clear link between pollution from the mine and the water entering Cripple Creek, Harris said.

In court documents, engineers and consultants for the state disagreed, arguing that the tunnel is built through less-porous granite and that sediments on the bottom would stop water from escaping. It's only reasonable to conclude, they contend, that the El Paso mine is providing most of the pollutants and water entering Cripple Creek.

In February this year, federal Magistrate Patricia A. Coan agreed with those experts, and ruled on summary judgment (without trial, testimony and cross-examination) that El Paso was solely responsible for discharging pollutants into Cripple Creek.

However, in a twist of events, a state administrative law judge presiding over El Paso Gold's appeal of the state's Notice of Violation ruled differently, finding there was "insufficient evidence" to conclude that the mine shaft was responsible for the pollution entering Cripple Creek.

Lawyers for the environmental groups shrug off the state ruling, noting that the state courts have little authority compared with the federal judge's ruling. Still, Harris takes comfort in the fact that the state judge, who actually held a trial and listened to full discussion of evidence, found in favor of his client.

Hard luck

Good luck has made men millionaires in Cripple Creek. And bad luck made many a pauper too. Was it just bad luck that Schoger's brother bought an old mine that happened to pop onto the radar screen of two powerful environmental groups?

Or did he just make a bad decision: not researching his property thoroughly for liabilities before signing on the dotted line? Schoger defends the purchase, noting his brother bought the property before the Clean Water Act even existed.

That comment draws the following rebuttal from Roger Flynn: "That's like the city of Denver saying we were around before the Clean Water Act, so we shouldn't have to treat our pollution either."

But could Schoger have been one of those cooperative landowners that would have cooperated with federal and state agencies had they approached him about the pollution first? One of Schoger's first responses when the lawsuit was filed was to propose a solution that would have all the landowners who likely contribute to the pollution -- the CC&V gold mine, the Bureau of Land Management and his own mine -- take joint responsibility.

click to enlarge At the turn of the 20th century, the El Paso Gold mine (as shown in this old historic postcard) employed some 200 miners.
  • At the turn of the 20th century, the El Paso Gold mine (as shown in this old historic postcard) employed some 200 miners.

The record shows that his proposal -- to create a limited liability holding company representing all landowners -- was first ignored by the state and then denied with no dialogue between the two parties. Flynn dismissed the idea as "a classic mining industry dodge."

"It was an asset-less corporation," Flynn said of the proposal. "[It] existed only on paper. It was a shell."

But Harris maintains that his client also has no assets, other than a piece of property that has now become a huge environmental liability.

"If there's going to be a solution to this, it's got to be a universal solution," Harris said. "You can't just single out a single property owner who has 100 acres and start flogging him."

Editor's note: This is the first in an occasional series on the impact of abandoned mines around Colorado and efforts to clean up the mess.

The problem

In the past, mining companies have established a rather nasty reputation for taking the gold, then heading for the hills. The gold runs out, or prices go down, and the company declares bankruptcy and leaves behind a mess.

According to Burden of Gilt, a comprehensive study by the Mineral Policy Center published almost 10 years ago, "mine effluents have already polluted 12,000 miles of the nation's waterways and 180,000 acres of our lakes and reservoirs and are a growing threat to underground aquifers." As a result, there's no cache of funds ready to cover cleanup costs, which would likely run somewhere between $32 and $71 billion nationally.

The poster child of Colorado's abandoned mines is the infamous Summitville disaster, which operated in southwest Colorado until the 1980s. Cyanide used to extract gold from crushed ore, as well as acid-rich water, seeped from the mine into area creeks, which in turn fed the Alamosa River. Though the company tried to treat its waste, acid-laced runoff killed aquatic life along a 17-mile stretch of the river. When the state tried to get the mining company to clean the mess, both it and its parent company filed for bankruptcy. Taxpayers were left holding the bag.

Around Colorado and the West, there are thousands of mini-Summitvilles, many killing off swaths of wetlands and creeks -- though the vast majority of those mines (unlike Summitville) stopped working decades before the Clean Water Act was enacted.

Given the history, it's no wonder that environmentalists like attorney Roger Flynn have little sympathy for people or companies who say they didn't do the mining, so they're not responsible.

"The argument is raised by small mining companies all over the West: 'We're not actively mining so we're not responsible for the pollution.' But if I buy a house that has a pollution problem, well that's too bad, I own it," Flynn said.

Others who are involved in historic mine cleanups around Colorado say enforcement actions or lawsuits against small-time owners of historic mines often just get in the way of already slow and difficult clean-ups.

"I don't think coming in with a big bat on [private mine owners] does any good -- all it does is make people angry and costs people incredible amounts of money," says Cathy Patti, a former Lake County administrator who has been involved in mining cleanup efforts for more than a decade.

The solution?

While Flynn and Patti may disagree on some strategies, there is almost universal agreement among regulators, activists and federal land agencies about one possible solution: the "Good Samaritan" law.

Under current environmental law, anyone altering water flow on an old mine site may become forever liable for the pollution exiting the property.

Now, several lawmakers have proposed bills to address that problem. The most well-known is a proposal by Colorado Rep. Mark Udall to create a national "good Samaritan" permit program that would protect do-gooders who agree to clean up old mines.

Another proposal by Colorado Rep. Scott McInnis, would create a similar exemption for Colorado's Animas River watershed as a pilot study, while Sen. Ben Nighthorse Campbell is also weighing in with a bill that deals primarily with old mines on public land.

Environmentalists support Udall's bill largely because it would also levy a fee (based on mineral extraction rates) against current-day mining companies to generate roughly $40 million annually for abandoned mine cleanup. Though it is not primarily geared toward protecting landowners, some say it might encourage more landowners to come forward on cooperative cleanup projects. The threat of enforcement often scares private landowners and is a huge deterrent, some say.

Mining companies, meanwhile, have urged Congress to follow through on promises to reform the federal Mining Act of 1872, which helped create the mess by allowing miners to dig anywhere in the West without paying a penny in royalties to the federal treasury.

-- Malcolm Howard

  • He got the shaft

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