House Republican slams OSM over report on stream buffer rulemaking

House Natural Resources Committee Chairman Doc Hastings, R-Wash., on Jan. 9 renewed his attack on U.S. Office of Surface Mining efforts to rewrite on a 2008 George W. Bush Administration rule on buffer zones around streams.

OSM’s efforts, long in a back room after reports a couple of years ago that they would have devastating impacts on the coal industry, have been a continuing focus of complaint by Republicans, especially in the GOP-dominated House. The 2008 rule, which replaced a 1983 version, was imposed in the last days of the Bush Administration and was considered relativly friendly to the coal industry. 

Hastings’ full committee on Jan. 9 held an oversight hearing with a decidedly biased title: “Obama Administration’s War on Coal: The Recent Report by the Office of the Inspector General.”

“We’re here today to discuss the U.S. Department of the Interior Office of Inspector General’s new report on the Office of Surface Mining Reclamation and Enforcement’s (OSM) rewrite of the 2008 Stream Buffer Zone Rule,” said a statement from Hastings. “By now, everyone on this Committee is very familiar with this rewrite, and it has been the subject of Committee oversight and investigation for well over two years. In short…the Administration has spent millions of dollars, in secret, working on a new regulation that will put thousands of Americans out of work and increase electricity costs. It’s one of the most covert, but destructive tactics in President Obama’s war on coal.”

Within days of taking office, the Obama Administration discarded the Bush rule, which underwent five years of environmental review and public comment. Hastings said it entered into a “secret settlement agreement” with environmental groups to rewrite the rule in an unachievable time frame.

In September of 2012, the committee released a report based on its investigation that included internal documents and audio recordings obtained by the committee. “The report exposed gross mismanagement of the rulemaking process, potential political interference, and widespread economic harm the proposed regulation would cause,” said Hastings.

Nearly a year and a half later, the IG finally released its report. It includes similar findings, said Hastings. For example, according to the report, “OSM employees involved in the project asked contractors to change a variable in the calculations” and “they knew that this would lower the potential job-loss numbers.” It also states that “the contractors and career-OSM employees believed this change would produce a less-accurate number.”

The IG report also points out that despite OSM Director Joe Pizarchik’s testimony to this committee that a 7,000 job loss figure was just a “placeholder,” that the numbers that went into that figure were “not fabricated.” This report directly contradicts the testimony of Pizarchik, said Hastings.

He added: “I also must again express my concern that Deputy Inspector General Mary Kendall is withholding information from Congress when the IG is charged with being an independent watchdog for Congress. The IG is refusing to provide Congress with an un-redacted copy of this report based on directions by the Department of the Interior. For example, large parts of a section of the report entitled ‘Issues with the New Contract,’ have been blacked out. I have been vocal about the mismanagement of the IG’s office under the leadership of Ms. Kendall. As I’ve said before, we need a permanent IG.”

Inspector General witness says rule writing was a ‘poorly managed process’

The only witness for the Jan. 9 hearing was Robert Knox out of the IG’s office. He wrote in his prepared testimony: “We found that OSM initially directed contractors to use the 1983 rule to estimate coal production losses and job losses associated with the Stream Protection Rule. In 2011, after the contractors estimated that there would be high costs to the industry and significant job losses, OSM told the contractors that the 2008 rule should be applied in making the calculations. The OSM employees involved said they understood that this would lower the potential job-loss numbers. The Office of Management and Budget, which examines these economic reviews, originally approved the application of the 1983 rule, but subsequently told us that using either the 1983 or the 2008 rules was acceptable. Clearly, however, the direction given to the contractor was not consistent, and, in fact, there was even disagreement within OSM about which rule to apply in the baseline analysis. While we found that OSM only began to seriously consider terminating the EIS contract after the job loss numbers were leaked, interviews and internal communications revealed that OSM’s dissatisfaction with the contract communications revealed that OSM’s dissatisfaction with the contractors’ work product and overall performance was longstanding. Finally, rather than terminate the contract, OSM chose simply not to renew it.”

He added: “In conclusion, our investigation revealed a poorly managed process that resulted in over $3.7 million in contract costs, over a year of effort, and no final EIS/RIA. The Department has advised us that it has taken action to correct the management of developing another EIS/RIA, to include retaining a more technically capable contractor, forming a more robust project oversight team, and ensuring closer involvement of OSM senior leadership.”

“EIS” means, of course, environmental impact statement, while “RIA” is a Regulatory Impact Analysis, which is required for federal rules with major economic significance.

Surface coal mining, and preparation of surface support area for underground mines, often involve removing an immense amount of excess dirt and rock, known as “spoil,” which is typically dumped in nearby valleys and can damage or bury the streams that flow through them. As part of the regulations implementing the 1977 Surface Mining Control and Reclamation Act, OSM adopted requirements for a 100-foot “buffer zone” around streams as a means to protect the stream channels from erosion from nearby mining activities. OSM modified this Stream Buffer Zone rule in 1979, 1983, and most recently in 2008.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.