[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
   THE SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977: A 30\TH\ 
                          ANNIVERSARY REVIEW 

=======================================================================

                           OVERSIGHT HEARING

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                        Wednesday, July 25, 2007

                               __________

                           Serial No. 110-36

                               __________

       Printed for the use of the Committee on Natural Resources



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                     COMMITTEE ON NATURAL RESOURCES

               NICK J. RAHALL II, West Virginia, Chairman
              DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan             Jim Saxton, New Jersey
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Wayne T. Gilchrest, Maryland
Solomon P. Ortiz, Texas              Chris Cannon, Utah
Frank Pallone, Jr., New Jersey       Thomas G. Tancredo, Colorado
Donna M. Christensen, Virgin         Jeff Flake, Arizona
    Islands                          Stevan Pearce, New Mexico
Grace F. Napolitano, California      Henry E. Brown, Jr., South 
Rush D. Holt, New Jersey                 Carolina
Raul M. Grijalva, Arizona            Luis G. Fortuno, Puerto Rico
Madeleine Z. Bordallo, Guam          Cathy McMorris Rodgers, Washington
Jim Costa, California                Bobby Jindal, Louisiana
Dan Boren, Oklahoma                  Louie Gohmert, Texas
John P. Sarbanes, Maryland           Tom Cole, Oklahoma
George Miller, California            Rob Bishop, Utah
Edward J. Markey, Massachusetts      Bill Shuster, Pennsylvania
Peter A. DeFazio, Oregon             Dean Heller, Nevada
Maurice D. Hinchey, New York         Bill Sali, Idaho
Patrick J. Kennedy, Rhode Island     Doug Lamborn, Colorado
Ron Kind, Wisconsin                  Mary Fallin, Oklahoma
Lois Capps, California               Kevin McCarthy, California
Jay Inslee, Washington
Mark Udall, Colorado
Joe Baca, California
Hilda L. Solis, California
Stephanie Herseth Sandlin, South 
    Dakota
Heath Shuler, North Carolina

                     James H. Zoia, Chief of Staff
                   Jeffrey P. Petrich, Chief Counsel
                 Lloyd Jones, Republican Staff Director
                 Lisa Pittman, Republican Chief Counsel
                                 ------                                





















                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Wednesday, July 25, 2007.........................     1

Statement of Members:
    Duncan, Hon. John J., Jr., a Representative in Congress from 
      the State of Tennessee.....................................     5
    Pearce, Hon. Stevan, a Representative in Congress from the 
      State of New Mexico........................................     3
    Rahall, Hon. Nick J., II, a Representative in Congress from 
      the State of West Virginia.................................     1

Statement of Witnesses:
    Bandy, Earl, Chief, Applicant Violator System Office, Office 
      of Surface Mining Reclamation and Enforcement, U.S. 
      Department of the Interior, Washington, D.C................     9
        Prepared statement of....................................    10
    Conrad, Gregory E., Executive Director, Interstate Mining 
      Compact Commission, Herndon,Virginia.......................    23
        Prepared statement of....................................    26
        Additional information submitted for the record..........    34
    Corra, John, Director, Wyoming Department of Environmental 
      Quality, Cheyenne, Wyoming.................................    85
        Prepared statement of....................................    87
    Fry, Eric, Director of Regulatory Services, Peabody Coal 
      Company, St. Louis, Missouri, on behalf of the Illinois 
      Coal Association...........................................   202
    Husted, John F., President, Deputy Chief, Division of Mineral 
      Resources Management, Ohio Department of Natural Resources, 
      Columbus, Ohio.............................................    68
        Prepared statement of....................................    70
    Loomis, Marion, Executive Director, Wyoming Mining 
      Association, Cheyenne, Wyoming.............................   207
        Prepared statement of....................................   210
    Lovett, Joe, Executive Director, Appalachian Center for the 
      Economy and the Environment, Lewisburg, West Virginia......   127
        Prepared statement of....................................   128
    Morris, Walton D., Jr., Attorney-at-Law, Charlottesville, 
      Virginia...................................................   115
        Prepared statement of....................................   116
        Response to questions and attachments submitted for the 
          record.................................................   121
    Owens, Glenda H., Deputy Director, Office of Surface Mining 
      Reclamation and Enforcement, U.S. Department of the 
      Interior, Washington, D.C..................................     9
    Pfister, Ellen, Shepherd, Montana, on behalf of the Northern 
      Plains Resource Council and the Western Organization of 
      Resource Councils..........................................   141
        Prepared statement of....................................   143
    Quinn, Harold P., Jr., Senior Vice President and General 
      Counsel, Legal & Regulatory Affairs, The National Mining 
      Association, Washington, D.C...............................   158
        Prepared statement of....................................   161
    Raney, William B., President, West Virginia Coal Association, 
      Charleston, West Virginia..................................   167
        Prepared statement of....................................   168
        Additional information submitted for the record..........   172
    Roberts, Cecil E., President, United Mine Workers of America, 
      Fairfax, Virginia..........................................   101
        Prepared statement of....................................   103
    Timmermeyer, Stephanie R., Cabinet Secretary, West Virginia 
      Department of Environmental Protection, Charleston, West 
      Virginia...................................................    63
        Prepared statement of....................................    65
    Wright, Brian, Coal Policy Director, Hoosier Environmental 
      Council, Indianapolis, Indiana.............................   132
        Prepared statement of....................................   135

Additional materials supplied:
    Bird, Cathie, Chair, Save Our Cumberland Mountains, on behalf 
      of the members of SOCM Stripmine Issues Committee, Letter 
      submitted for the record...................................   218
    Blumenshine, Joyce, Peoria, Illinois, Letter submitted for 
      the record.................................................   222
    Bonds, Julia, Rock Creek, West Virginia, Letter submitted for 
      the record.................................................   225
    Braverman, Beverly, Executive Director, Mountain Watershed 
      Association, Letter submitted for the record...............   229
    Haltom, Vernon, Co-Director, Coal River Mountain Watch, 
      Letter submitted for the record............................   285
    Johnson, Robert L., PE, Collinsville, Illinois, Letter 
      submitted for the record...................................   288
    Loucks, Clarence, Hillsboro, Illinois, Letter and attachments 
      submitted for the record...................................   292
    Wall Street Journal article entitled, ``Coal's Doubters Block 
      New Wave of Power Plants'' submitted for the record by 
      Congressman Pearce.........................................     6
    Webb, David, Naoma, West Virginia, Letter submitted for the 
      record.....................................................   303
    Yarbrough, Ronald E., Ph.D., PG, Professor Emeritus, Earth 
      Sciences, Southern Illinois University, Comments submitted 
      for the record.............................................   305
    Yingling, Mark R., Vice President of Environmental Services 
      and Conservancy, Representing Peabody Energy and the 
      Illinois Coal Association, Statement submitted for the 
      record.....................................................   204


 OVERSIGHT HEARING ON ``THE SURFACE MINING CONTROL AND RECLAMATION ACT 
                 OF 1977: A 30\TH\ ANNIVERSARY REVIEW''

                              ----------                              


                        Wednesday, July 25, 2007

                     U.S. House of Representatives

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 10:01 a.m. in Room 
1324, Longworth House Office Building, Hon. Nick Rahall, II, 
[Chairman of the Committee] presiding.
    Present: Representatives Rahall, Holt, Grijalva, Bordallo, 
Sarbanes, Kind, Inslee, Baca, Shuler, Duncan, Pearce, Shuster, 
Heller, Sali, and Lamborn.

STATEMENT OF THE HONORABLE NICK J. RAHALL, II, A REPRESENTATIVE 
          IN CONGRESS FROM THE STATE OF WEST VIRGINIA

    The Chairman. The full Committee on Natural Resources will 
come to order.
    Before the Chair proceeds this morning, I know we are 
celebrating an anniversary, but there is one other celebration 
I would like to note, and it has to do with age, as well. And 
that is the birthday of one individual sitting to my immediate 
left, who has been with me for, well, he doesn't like me to say 
ages any more, not only how long he has been with me nor his 
actual age, because he wants all the certain individuals in the 
crowd to know that he is single once again, so I won't mention 
any ages.
    But I do want to wish my Chief of Staff on the Committee, 
and long-time confidante, and a man for whom I deeply 
appreciate his loyalty and dedication and work on behalf of the 
people of West Virginia, and serving me for over 27 years, Jim 
Zoia. Happy Birthday, Jim.
    [Applause.]
    The Chairman. I didn't want to ruin his day by singing.
    [Laughter.]
    The Chairman. OK. The Committee is meeting today to conduct 
an oversight hearing on the implementation of the Surface 
Mining Control and Reclamation Act of 1977, as we approach the 
30th anniversary of its enactment on August 3.
    I have had a long relationship with this law, having served 
on this committee and on the Conference Committee on H.R. 2 as 
a freshman Member of this body back in 1977, for the 
legislation that was enacted as SMCRA. Today, 30 years later, 
of those Members of the House of Representatives who signed 
that conference report, I am the only one still in office. 
Senator Pete Domenici remains as the only Senator who signed 
the conference report still in office.
    I recall very well standing on that hot day in the Rose 
Garden of the White House with coal field activists, 
representatives of the coal industry, and elected officials, 
when President Jimmy Carter signed H.R. 2 into law. After years 
of struggle, highlighted by the disaster that took place in 
1972 at Buffalo Creek in Logan County, West Virginia, and two 
Presidential vetoes, the Nation finally had a surface mining 
control and reclamation law.
    As with most laws, this law was a compromise. President 
Carter pointed out and expressed some misgivings in his remarks 
on that hot August day. But at the same time, Chairman Mo Udall 
noted, and I quote, ``And by getting this bill passed today, we 
are showing this nation loves its land and respects it, and is 
going to protect the land, while at the same time we increase 
the production of coal.''
    On a personal note, I am indeed honored to hold this 
hearing today as Chairman of the Committee that Mo Udall once 
chaired, as I look up and gaze at his portrait, in a room named 
after him, and with his son, Mark Udall, as a member of this 
committee.
    Just as it was a struggle to get SMCRA enacted into law, it 
has been a 30-year struggle to implement and properly enforce 
it. The rapid progress made during the very early years by the 
first Director of the Office of Surface Mining Enforcement, 
Walter Hines, and his staff, was squashed with the advent of 
the Reagan Administration under the banner of regulatory 
relief. I am not so certain the agency ever fully recovered.
    While I salute the many hardworking employees at the Office 
of Surface Mining Reclamation and Enforcement, on too many 
occasions the agency has been a rudderless ship lacking strong 
leadership. This morning, for instance, its director will not 
present testimony before this committee, because the agency 
lacks one. My sense is that the agency is once again adrift, 
floating in a sea of coal-field citizen unrest and industry 
desire to have regulatory stability.
    It was the intention of SMCRA to dovetail the needs of the 
environment and the need for coal production. Today, 
regrettably, I believe that goal remains elusive.
    While there are successes, primarily in the area of 
reclaiming abandoned coal mines, much remains wanting. The rise 
of mountaintop-removal coal mining during the late 1990s was 
directly related to the enactment of stronger Federal Clean Air 
Act legislation, which placed an even greater premium on low-
sulfur coal reserves, such as in my district in southern West 
Virginia, eastern Kentucky, and southwestern Virginia.
    SMCRA explicitly allows this type of mining to take place 
by giving it an exemption from the overall requirement that 
mine lands be returned to their approximate original contour, 
provided--and I stress provided--that post-mining land use be 
implemented that gives rise to developments which help the 
people and sustain the coalfield economy, be it industrial, 
commercial, residential, or agricultural.
    And I recall very well that spring of 1977, my first year 
in this body, when at my invitation then-Chairman Mo Udall 
visited mine sites in southern West Virginia. And he agreed 
that with flatland at such a premium, that we should not 
totally abolish the practice of mountaintop mining; but that we 
should have an exemption, an exemption that would allow for 
better post-mining uses of that land.
    The question today is whether this is truly taking place; 
whether it is the rule, or whether it is the exception.
    There is no doubt in my mind that the enforcement of the 
Surface Mining Control and Reclamation Act has and continues to 
be an issue in virtually all areas, including blasting and 
control of acid-mine drainage; the disposal of coal combustion 
waste into mines; the conflicts in the western states between 
surface coal mining and other land uses; and certainly, there 
are water quality issues.
    I am well aware of the concerns and criticisms of those 
coalfield residents whose homes and way of life are being 
disrupted by surface coal mining operations. And I am equally 
aware of the pressing need for the production of coal, for the 
jobs, for the contribution to the coalfield economies. And I am 
also aware of the need for regulatory stability, so that all 
interested parties know what is expected.
    Earlier I noted that SMCRA's goal of dovetailing the 
interests of the environment and coal production remains 
elusive, but it must not remain so. We can do better. Those of 
us here gathered today in this room and those watching this 
proceeding on the Internet, working together can make that goal 
a reality.
    Today this committee will hear from a well-represented list 
of people who have a stake in the Surface Mining Control and 
Reclamation Act. I have endeavored to have each panel--
representatives from the states, citizen groups, and the 
industry--reflect the geographical areas of mining in this 
country. As well, I am particularly honored and pleased that 
coal labor is represented with us today, in the presence of its 
International President of the United Mine Workers Union, Cecil 
Roberts.
    This will be a lengthy hearing, and the subject matter is 
deserving of it. I would remind the witnesses as I conclude to 
limit their oral presentations to five minutes so that we have 
ample time for further discussion and interaction during the 
questioning period.
    With that, I recognize the Ranking Member, Mr. Pearce of 
New Mexico.

 STATEMENT OF THE HONORABLE STEVE PEARCE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW MEXICO

    Mr. Pearce. Thank you, Chairman. I know that the Surface 
Mining Act has been very important in West Virginia; it has 
also been very important in New Mexico. Coal has been mined in 
New Mexico since the time of Spanish settlement.
    In the 1860s the Army and railroads further developed the 
resource. However, significant development of New Mexico's 
coalfields did not occur until after the enactment of the 
Surface Mining Act passed in 1977.
    Coal resources underlie 12 percent of New Mexico. Most of 
these resources lie under Indian tribal lands in northern New 
Mexico. In 2004, 1,697 people were employed at seven coal 
mines, with an annual production value of more than $650 
million. That coal is used to generate electricity for fellow 
New Mexicans and our neighbors in Arizona.
    Nationally, coal provides 52 percent of our electricity, 
energy, and specifically energy produced from coal is the fuel 
that drives this nation's economic engine, currently the most 
robust in the world. This electricity is used to heat and cool 
our homes, run our computers, cook our dinners, communicate 
with one another, keep abreast of local and world events, and 
provide a healthy living environment.
    Nevertheless, fear of human-caused climate change has led 
many to call for radical reductions in coal consumption and 
other fossil fuels until we can successfully sequester the 
CO2 that is released by burning these resources.
    In May the Energy and Parks Subcommittees held a joint 
oversight hearing entitled, ``The Future of Fossil Fuels, 
Geological and Terrestrial Sequestration of Carbon Dioxide.'' 
At that hearing witnesses testified that the technology to 
sequester CO2 was not ready for commercial use, and 
would not be ready for years into the future, even with 
sequestration study programs such as the one in the Chairman's 
H.R. 2337.
    We also heard testimony that sequestering the 
CO2 would add as much as 25 percent to the cost of 
energy produced from coal-fired power plants, if not more. In 
today's Wall Street Journal there is an article which points 
out the increase in cost. A hearing judge of the Minnesota 
Public Utilities Commission concluded it would cost $472 
million in 2011 dollars to make the power plant that is 
proposed capable of capturing about 30 percent of its carbon 
dioxide emissions, and it would cost another $635 million to 
build a pipeline to move the greenhouse gas to the nearest deep 
geologic storage in Alberta, Canada.
    Thus, $1.1 billion in additional costs for that power 
plant, adding $50 per megawatt hour, making that energy twice 
as costly as energy from other plants.
    We see in that same article that 150 new coal generating 
plants were contemplated as late as May of this year, but now 
plans for many of those are being pulled off of the shelves 
because of the increased cost, and because of the discussions 
that we are having here.
    I fear for the future of coal, based on the discussions 
that we are having in Washington today. I fear that if we act 
on climate-change legislation before the sequestration 
technology has become economic, well-meaning but misguided 
individuals will force our nation to dramatically reduce its 
coal consumption. This will force mines to close, cost jobs, 
cause rural mining communities to face high unemployment, major 
tax and royalty revenue loss, and force electricity prices to 
skyrocket for Americans and American businesses.
    These policies, the Surface Mining Act, and climate change 
legislation, caps and trade on carbon or carbon taxes are 
directly linked. To look at them in a separate vacuum would be 
misleading.
    For example, if we reduce our use of coal and do not use 
this abundant natural resource, where and who will pay the 
abandoned mine land fee that is used to clean up the many 
abandoned coal mines that had operated prior to the enactment 
of a SMCRA in 1977?
    In New Mexico, more than $8 million has been spent from 
monies collected from coal operations to clean up and secure 
high-priority abandoned mine land reclamation projects, since 
the program was approved in 1981.
    I thank the witnesses for their time and testimony, and 
look forward to hearing from you all. Thank you, Mr. Chairman, 
for this hearing.
    The Chairman. Thank you, Mr. Pearce. Before I recognize, do 
other members wish to make statements?
    Mr. Duncan of Tennessee.

       STATEMENT OF THE HONORABLE JOHN J. DUNCAN, JR., A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

    Mr. Duncan. Well, thank you very much, Mr. Chairman, and 
thank you for calling this hearing. This is a very important 
topic, and I am sure that a lot of good things have come out of 
this law. But I am glad that you are holding this hearing, 
because I am not going to be able to stay for very much longer 
because of so many other things on my schedule.
    But I did want to come here to express my concerns about 
what I believe was an unintended consequence, maybe unintended, 
at least on the part of some people. And that is, I was told a 
few years ago that in 1978 there were 157 small coal companies 
in east Tennessee, and now there are none. And the coal 
production in east Tennessee, or in the whole State of 
Tennessee, is a fourth of what it was, and has been at that 
level for many years.
    And maybe not all of those companies should have been in 
existence, but I also know that what happened, we opened up an 
Office of Surface Mining in Knoxville at that time. And it is 
much easier for a Federal bureaucrat to deal with one large 
company instead of 100 little ones. But I think it is kind of 
sad that so many small businesses went out of business because 
of the activities of that office, and really regulatory 
overkill, based on the people I think taking, some regulators 
taking this law further than what I am sure some of the authors 
intended.
    And just to show you, a few years ago I saw a sad sight 
that I never thought I would see. I came back from lunch at a 
restaurant in Knoxville, and I saw 125 miners demonstrating in 
front of the Office of Surface Mining there in Knoxville with 
signs saying please let us work, please let us mine. And I 
thought, you know, that is a sad sight to see Americans who 
want to work, but their government is not allowing them to do 
so. And what was the saddest part was that some of the Federal 
regulators there at that time were looking out of their windows 
in this old hotel which had been converted into an office 
building, laughing at these poor, unemployed miners. And so a 
lot of people lost their small businesses, and a lot of people 
lost employment in my area.
    And so I hope that as we look at these laws in the future, 
that we will keep the poor and the lower income and the working 
people in mind. Because you have to have balance and common 
sense in these things. If you go too far in one direction, you 
destroy jobs and you drive up prices. And it helps the big 
giants in these industries, but it sure hurts the little guy.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, gentlemen. Before recognizing the 
panel, I do want to note the presence in the room of another 
individual that was behind President Jimmy Carter, besides 
myself, 30 years ago on that hot August day in 1977. And that 
is Louise Dunlap, who is standing in the back of the room here, 
and who was noted by President Jimmy Carter in his comments 
when he signed the law, I might add, when he said, and I quote, 
``I think all of you know that Louise Dunlap has in the last 
six years organized and worked and been persistent in the face 
of diversity and disappointment.'' Welcome, Louise.
    Let us proceed with the panel.
    Mr. Pearce. Mr. Chairman, if I may.
    The Chairman. Oh, I am sorry. The gentleman from New 
Mexico.
    Mr. Pearce. Yes. I would make a unanimous consent request 
to enter into the text of today's hearing the Wall Street 
Journal article that I referred to.
    The Chairman. Without objection, so ordered.
    [The Wall Street Journal article follows:]
Coal's Doubters Block New Wave of Power Plants
By REBECCA SMITH
July 25, 2007
    From coast to coast, plans for a new generation of coal-fired power 
plants are falling by the wayside as states conclude that conventional 
coal plants are too dirty to build and the cost of cleaner plants is 
too high.
    If significant numbers of new coal plants don't get built in the 
U.S. in coming years, it will put pressure on officials to clear the 
path for other power sources, including nuclear power, or trim the 
nation's electricity demand, which is expected to grow 1.8% this year. 
In a time of rising energy costs, officials also worry about the long-
term consequences of their decisions, including higher prices or the 
potential for shortages.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

LUMPS FOR COAL
      Dwindling Fleet: A new generation of power plants is 
stalling due to concerns over their fuel: coal.
      Cheap and Dirty: Coal is plentiful in the U.S. but is a 
major source of emissions that contribute to global warming.
      The Long Term: Blocked plants could prompt power 
officials to try to quell consumption or advance other sources.
    As recently as May, U.S. power companies had announced intentions 
to build as many as 150 new generating plants fueled by coal, which 
currently supplies about half the nation's electricity. One reason for 
the surge of interest in coal was concern over the higher price of 
natural gas, which has driven up electricity prices in many places. 
Coal appeared capable of softening the impact since the U.S. has deep 
coal reserves and prices are low.
    But as plans for this fleet of new coal-powered plants move 
forward, an increasing number are being canceled or development slowed. 
Coal plants have come under fire because coal is a big source of carbon 
dioxide, the main gas blamed for global warming, in a time when climate 
change has become a hot-button political issue.
    An early sign of the changing momentum was contained in the $32 
billion private-equity deal earlier this year to buy TXU Corp. To gain 
support for the deal, the buyers decided to trim eight of 11 coal 
plants TXU had proposed in Texas. Recent reversals in Florida, North 
Carolina, Oregon and other states have shown coal's future prospects 
are dimming. Nearly two dozen coal projects have been canceled since 
early 2006, according to the National Energy Technology Laboratory in 
Pittsburgh, a division of the Department of Energy.
    It's hard to say how many proposed plants will never be built. Some 
projects suffer public deaths when permits are denied. Many more simply 
wither away, lost in the multiyear process of obtaining permits, 
fending off court challenges and garnering financing.
    In the wake of the fading coal proposals, and others that are 
expected to follow, Citigroup downgraded the stocks of coal-mining 
companies last week, noting that ``prophesies of a new wave of coal-
fired generation have vaporized.'' On Monday, Steve Leer, chief 
executive of Arch Coal Inc., said some of the power plants he had 
expected to be built ``may get stalled due to the uncertainty over 
climate concerns.''
    For now, coal companies haven't taken steps to ratchet back 
production or big projects because of coal-plant delays. They believe 
that in a time of global energy concerns, U.S. coal supplies will be 
seen as too important to dismiss. The U.S. has the world's largest coal 
reserves and is sometimes called ``the Saudi Arabia of coal'' by 
energy-industry observers.
    ``It would be quite foolish and quite unthinkable not to have coal 
play an important role,'' says investor Wilbur Ross, who has increased 
his coal holdings and is nonexecutive chairman of International Coal 
Group Inc. He predicts cleaner-coal technology will improve enough to 
become viable.
    Roadblocks for coal put greater attention on other sources. The 
U.S. power industry is exploring building more nuclear power plants. 
But those plans are several years away, and nuclear power currently 
provides only about a fifth of U.S. needs. Other sources, like wind, 
don't provide around-the-clock energy, while solar is relatively 
expensive and isn't yet capable of producing large amounts of 
electricity.
    That puts the focus on natural gas. ``Gas is the bridge fuel'' that 
will step in if coal stumbles, says Marc Spitzer, a member of the 
Federal Energy Regulatory Commission, regulator of the nation's 
wholesale gas and electricity markets.
    Currently, clean-burning gas provides roughly a fifth of the 
nation's power needs. But the nation's gas production has been flat, 
and other industries are increasingly using it as a fuel or raw 
material. Mr. Spitzer says that the nation needs more facilities to 
accept liquefied natural gas, which is gas cooled into a liquid that 
can be imported from overseas.
    The rapid shift away from coal shows how quickly and powerfully 
environmental concerns, and the costs associated with eradicating them, 
have changed matters for the power industry. One place where sentiment 
has swung sharply against coal is Florida. Climate change is getting 
more attention there because the mean elevation is only 100 feet above 
sea level, so melting ice caps would eat away at both its Atlantic and 
Gulf of Mexico coasts.
    In mid-July, Florida Gov. Charlie Crist convened a climate-change 
summit to explore ways the state could improve its environmental 
profile. In June, he signed into law a bill that authorizes the Florida 
Public Service Commission to give priority to renewable energy and 
conservation programs before approving construction of conventional 
coal-fired power plants.
    The law was bolstered by a recent report from the nonprofit 
American Council for an Energy Efficient Economy that found Florida 
could reduce its need for electricity from conventional sources, like 
gas and coal, by 29% within 15 years if it implemented aggressive 
energy efficiency measures.
    On the eve of the governor's summit, backers of a major power-plant 
proposal said they would suspend development activities for an 800-
megawatt coal-fired plant proposed by four city-owned utilities 
including the one serving the state capital, Tallahassee. (One megawatt 
can power 500 to 1,000 homes.) The backers cited environmental issues.
    That decision followed the rejection by the utility commission of a 
proposal by Florida Power & Light Co., a unit of FPL Group Inc., to 
build a 1,960-megawatt coal plant in Glades County, Fla. The commission 
found that the plant was cost effective in fewer than half the 
scenarios examined. One reason for its poor showing is uncertainty 
about the future cost to curb carbon dioxide pollution. Coal plants 
emit more than twice as much carbon dioxide per unit of electricity 
produced as natural-gas-fired plants, but there's no cheap, easy way to 
capture and dispose of the greenhouse gas.
    Even proposals to build so-called ``clean coal'' plants have been 
met with skepticism. This new technology, which primarily involves 
converting coal into a combustible gas for electricity generation, has 
been touted as a solution to coal's global-warming problems.
    A hearing judge at the Minnesota Public Utilities Commission is 
urging commissioners to reject a plan for Northern States Power Co., a 
unit of Xcel Energy Inc., Minneapolis, to buy about 8% of its 
electricity from a coal-gasification power plant that was proposed by 
Excelsior Energy Inc., Minnetonka, Minn. The judge concluded the 600-
megawatt Excelsior plant wouldn't be a good deal for consumers.
    The judge concluded it would cost an extra $472.3 million, in 2011 
dollars, to make the power plant capable of capturing about 30% of its 
carbon dioxide emissions, and another $635.4 million to build a 
pipeline to move the greenhouse gas to the nearest deep geologic 
storage in Alberta, Canada. Thus, $1.1 billion in pollution controls 
had the potential to inflate the cost of power coming from the plant by 
$50 a megawatt hour, making electricity from Excelsior twice as costly 
as power from many older coal-fired plants that simply vent their 
carbon dioxide. The recommendation will be considered by the commission 
on Aug. 2.
    In the West, Washington has followed California in prohibiting 
utilities from entering into arrangements to obtain electricity from 
plants that aren't as clean as modern gas-burning plants. The intent is 
to discourage construction of conventional coal-fired plants anywhere 
in the region.
    In January, Oregon utility regulators blocked PacifiCorp., a unit 
of Berkshire Hathaway Inc., from a plan to charge Oregon consumers for 
part of the cost of building new coal plants outside the state, saying 
Oregonians didn't need the power.
    Even in states where coal projects are going forward, they are 
happening more often with a nod to environmental concerns. Xcel Energy, 
through its Public Service of Colorado unit, has agreed to obtain 775 
megawatts worth of wind power to supplement the power that will come 
from a 750 megawatt coal plant it is building near Pueblo, Colo. It 
also has agreed to install more pollution controls at existing units, 
and to cut energy demand by more than 300 megawatts in coming years.
    ``It will change their portfolio in a fundamental way,'' says 
Vickie Patton, senior attorney for environmental group Environmental 
Defense in Colorado.
    Rising construction costs are another reason that the future looks 
murky for big coal burners. Duke Energy Inc. created a stir eight 
months ago when it announced that the expected cost of a new twin-unit 
power plant in North Carolina had ballooned to about $3 billion, up 50% 
from about 18 months earlier. That run up in cost and other factors 
compelled the North Carolina Utilities Commission to nix one of the two 
proposed units.
    The coal industry is looking for ways to make its product more 
palatable. Earlier this week, Peabody Energy and ConocoPhillips said 
they are exploring the possibility of constructing a coal-gasification 
plant at a mine in Illinois, Indiana or Kentucky that would convert 
coal into 50 billion to 70 billion cubic feet of pipeline-quality 
synthetic gas a year. It said it would have its analysis completed in 
early 2008. It would be cost competitive at $5 to $6 per million 
British thermal units, which is less than today's prices.
--Kris Maher contributed to this article.
Write to Rebecca Smith at [email protected]
                                 ______
                                 
    The Chairman. Our first panel is composed of Glenda H. 
Owens, the Deputy Director, Office of Surface Mining 
Reclamation and Enforcement, the U.S. Department of Interior, 
Washington, D.C., and Earl Bandy, the Chief, Applicant Violator 
System Office, Office of Surface Mining Reclamation and 
Enforcement, U.S. Department of Interior, Washington, D.C.
    We welcome you both to the panel. Glenda, would you like to 
proceed first?
    Ms. Owens. Thank you.
    The Chairman. And as I said earlier, we have your prepared 
testimonies. They will be made part of the record as if 
actually read, and you are encouraged to summarize.
    You may proceed.

   STATEMENT OF GLENDA H. OWENS, DEPUTY DIRECTOR, OFFICE OF 
SURFACE MINING RECLAMATION AND ENFORCEMENT, U.S. DEPARTMENT OF 
                 THE INTERIOR, WASHINGTON, D.C.

    Ms. Owens. Thank you, Mr. Chairman. Good morning, Mr. 
Chairman and members of the Committee.
    I am pleased to appear before you today, along with Mr. 
Earl Bandy, on behalf of the Office of Surface Mining 
Reclamation and Enforcement on the occasion of the 30th 
anniversary of the enactment of the Surface Mining Control and 
Reclamation Act of 1977, or SMCRA.
    I have been Deputy Director of the Office of Surface Mining 
Reclamation and Enforcement since 2001. Before that, I was an 
assistant solicitor for surface mining in the Solicitor's 
Office at the Department of the Interior, where I worked on 
various legal issues associated with the Surface Mining 
Program.
    Over the 30 years since SMCRA was enacted, OSM has 
confronted many challenges in implementing the Act. Mr. Bandy 
is here today to share his experience in effectively addressing 
issues that threaten OSM's ability to ensure the reclamation 
which SMCRA envisioned: coal company bankruptcies.
    Mr. Bandy has been integrally involved in these and other 
issues. He has worked at OSM for 28 years. He has been an 
inspector, an investigator, manager, head of the Applicant 
Violator System Office, and he is soon to be Director of OSM's 
Knoxville, Tennessee field office. I would like to ask Mr. 
Bandy to share some of his experiences in implementing SMCRA.

   STATEMENT OF EARL BANDY, CHIEF, APPLICANT VIOLATOR SYSTEM 
 OFFICE, OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT, 
       U.S. DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.

    Mr. Bandy. Thank you, Ms. Owens. Mr. Chairman and members 
of the Committee, I am honored to be here today to discuss 
SMCRA, a law that I have spent nearly 30 years enforcing.
    I was born and raised in a coal camp in Harlan County, 
Kentucky. My father and my grandfather were coal miners.
    Today's industry is not the same as it was 30 years ago. As 
Mr. Duncan pointed out, most of the mom-and-pop operations are 
gone. Nearly 80 percent of the industry is publicly owned.
    Although ownership of the industry has changed, the goal 
remains the same: to make a profit. Our goal as regulators also 
remains the same as it was in 1977: to achieve reclamation.
    I want to share a few examples of how OSM and our state 
partners have adapted enforcement strategies in just the last 
four years to achieve reclamation in this changing economic 
environment.
    Lodestar Energy held 75 permits in three states. The owners 
worked on Wall Street. When the company failed to produce a 
profit, they filed bankruptcy. Some of the coal operations were 
sold, and they planned to abandon 20 remaining unreclaimed 
sites. To further complicate matters, the surety company that 
guaranteed the bonds was in receivership.
    Rather than give up, the state and Federal regulators 
combined efforts. Federal enforcement actions were issued, and 
we persuaded the owners that achieving total reclamation was 
the best solution. In the end, over $12 million was distributed 
among the three states to complete reclamation.
    Horizon Natural Resources was the largest coal bankruptcy 
case in U.S. history. The regulators were faced with how to 
reclaim 300 abandoned sites in five states, at an estimated 
cost of $350 million. Although the surety bonds were viable, 
they were not sufficient to achieve reclamation on a permit-
specific basis. Working together, the regulators developed a 
strategy to keep the assets with the liabilities, to utilize 
alternative enforcement, and to insist that no permit be left 
behind.
    The result was a settlement agreement that created a 
reclamation-only company with sufficient assets to cover 
reclamation costs. I am happy to report the job is nearly 
three-quarters done. Reclamation liability decreases daily.
    The final example is a case where the abandoned mines and 
permits were in Virginia, but the assets to reclaim the sites 
were in Texas. OSM again used enforcement to assist the state, 
and persuaded the owners to fund the reclamation. The savings 
to the Virginia bond pool was $1.5 million.
    In all three cases I have described, regulators used the 
tools available in SMCRA to bring about reclamation. Although 
these were mainly state issues, OSM used its national presence 
to help the states reach beyond their borders to achieve 
reclamation.
    I am proud of what we have accomplished in 30 years. I am 
not here to say SMCRA is without flaws, or our decisions were 
always correct. But I do believe SMCRA was good for the 
country, and one of the best things Congress has done for the 
environment.
    I know what life was like before SMCRA. I have lived the 
changes. They are good. SMCRA was the right thing to do.
    Thank you, Mr. Chairman. I would be happy to answer any 
questions that you or the Committee members may have.
    [The prepared statement of Mr. Bandy follows:]

   Statement of Earl Bandy, Chief, Applicant Violator System Office, 
Office of Surface Mining Reclamation and Enforcement (OSM), Introduced 
 by Glenda Owens, Deputy Director, OSM, U.S. Department of the Interior

    Mr. Chairman and Members of the Committee, it is a great honor to 
appear before you today as a witness for the Office of Surface Mining 
Reclamation and Enforcement (OSM) on the Surface Mining Control and 
Reclamation Act (SMCRA) of 1977.
    August 2007 will mark the 30th Anniversary of SMCRA, and September 
2007 will mark my own 28th anniversary working for OSM. I have served 
OSM as an inspector, investigator, and manager and, in a few weeks, I 
will begin a new position as Director of OSM's Knoxville Field Office 
with responsibility for the Tennessee Federal Program and with 
oversight responsibility for Virginia. In my various positions, I have 
inspected mine sites in at least a dozen states and visited coal mines 
in nearly every state in this nation with active operations.
    For nearly three decades, I have seen how SMCRA works on the 
ground, and the evolution of its implementation. I have had the 
opportunity to personally witness many of OSM's greatest successes as 
well as some of its failures.
    Like many of my colleagues in OSM, I grew up with coal. My late 
father and grandfather were coal miners in Harlan County, Kentucky. I 
was born in the company hospital and lived in a company-owned house. As 
a child, I learned that our existence revolved around coal. Not only 
did coal heat our house, it also put the groceries on the table, 
clothes on my back, and toys in my stocking. I also remember learning 
that the coal company made the rules and that was the final word.
    I spent my childhood hunting, fishing, gardening, climbing trees 
and climbing mountains. My great appreciation for nature led me to 
study earth sciences and, specifically, reclamation in college. My 
first job was as an inspector for the State of Kentucky.
The Need for SMCRA
    During the mid 1970s, most counties in the Appalachian coal fields 
were dotted with hundreds of small surface mines. Small operators were 
often heavily in debt and light on experience. One unanticipated event 
could easily lead to a total business failure. In contrast, large 
operators supported local economies by providing large numbers of jobs, 
related infrastructure, and a local revenue stream.
    From both the small and large operations I saw streams choked with 
sediment, and spoil and rocks dumped on the downslope in steep terrain. 
I witnessed the results of unpredictable blasting events and saw the 
exposed highwalls and abandoned entries that were left behind. These 
failures to reclaim the land resulted from many failures in the system 
that existed then--under-capitalized operators and highly variable 
regulatory standards and inconsistent enforcement from one state to the 
next. This created an economic advantage for operations in states with 
low reclamation standards or lax enforcement. In short, the reclamation 
principles now embodied by Congress under SMCRA were not used in a 
consistent way by state regulators or by the industry prior to its 
passage.
    It was these conditions that were to be addressed by SMCRA, which 
was enacted by Congress in 1977. Mr. Chairman, you were there, and you 
don't need to be reminded that SMCRA was hotly debated, vetoed twice 
and remained controversial for years. There were those who thought that 
enacting SMCRA was the end of the world. A great many disparaging 
things were said then about SMCRA and about OSM. Given this tense 
environment, it is amazing to me that the authors of the SMCRA had the 
foresight to see so far into the future and give us such a coherent 
framework in a very complex document. I can say that now, having 
witnessed three decades of SMCRA's development.
Implementation of SMCRA
    SMCRA leveled the playing field in a number of ways. It 
standardizes coal mining and reclamation regulations from State to 
State. It assures that coal mining operations in one State do not have 
an economic advantage over operations in another State. It requires the 
companies to take responsibility for the impacts of their operations. 
Perhaps most importantly, it requires that citizens have a voice in the 
permitting process, enforcement of regulations, and rulemaking.
    During the early years of SMCRA's implementation, I believe the OSM 
inspector was the most unpopular person in the coal fields. The State 
agencies just could not imagine someone telling them how to permit or 
inspect operations within their boundaries. The coal operators disliked 
OSM even more and often attempted to play us and the states against 
each other. Finally, there were the citizens. They were upset because 
they thought we should put an end to all surface coal mining 
operations.
    Despite the resistance to change, OSM inspectors marched on. If 
someone threatened us, we figured they were just having a bad day; if 
our tires were flattened, we simply changed the tire; if we were 
refused entry at the mine, we returned with the U.S. Marshall. We did 
not go away, and slowly, we began to see a change.
    In those early years, OSM experienced one of its first course 
corrections. Initially, each violation carried a mandatory civil 
penalty that increased daily if operators did not comply. Very soon, 
using our enforcement authority, OSM had issued thousands of violations 
and assessed millions of dollars in unpaid federal civil penalties. 
However, OSM was doing little to compel compliance beyond requiring 
cessation of operations, and basically nothing was done to collect 
outstanding penalties from the under-capitalized small operations that 
found it easier to quit than to comply, particularly when facing 
penalties that were increasing each day. Further, some of those same 
individuals that abandoned sites created new companies and came right 
back in business under a new name. Citizens groups sued OSM because of 
the huge backlog of unpaid fines that had developed.
    In 1980, OSM revised its rules to place a cap on penalties for 
unabated violations and required the use of one or more alternative 
tools to achieve compliance. Soon after, my job changed from being an 
inspector to being an investigator for a task force created 
specifically to deploy one of those alternative tools from the tool bag 
Congress gave us in Section 521(c) of SMCRA. This provision authorizes 
OSM to compel individuals who own or control coal mines to correct 
violations attributable to a corporate permittee.
    Members of the task force worked closely with the Solicitors Office 
to determine if owners or controllers had sufficient corporate or 
personal assets for us to compel them to reclaim the land. That Task 
Force and resulting case law established the principle that the ability 
to control a coal mine creates the duty to comply with environmental 
aspects of SMCRA. I investigated a number of these cases and when it 
was all said and done the result was thousands of acres of land 
reclaimed and collection of many outstanding penalties. This concept, 
known as alternative enforcement, has continued to gain momentum in 
getting land reclaimed and, more importantly, serves as a powerful 
deterrent for companies who consider abandoning a site without 
conducting proper reclamation.
    Another problem in the early days was the two-acre exemption, a 
loophole in the law by which large mining companies avoided regulation 
by working through contractor companies to mine along a string of 
operations, which individually could qualify for the two-acre 
exemption. Congress eventually closed the two-acre exemption loophole, 
but that did not eliminate all abuses that were associated with coal 
mining through contract operators.
    I investigated many instances in which well-heeled coal operators 
who used contractors (who had to deliver the coal they mined to them) 
were claiming they had no responsibility for complying with SMCRA at 
these contract operations. OSM and the States had to start paying 
attention to the ability of larger coal companies to control those 
contractors and hold the controlling companies responsible under 
appropriate circumstances. In response to a 1985 Court case settlement 
involving civil penalty collections, OSM developed the Applicant/
Violator System (AVS) to track control of mining operations and hold 
controlling companies and individuals responsible for mining within the 
regulations, paying fees, and reclaiming the land.
    Since 1990, I have served as investigator, team leader and manager 
of the AVS Office. The AVS implements another tool Congress supplied in 
Section 510(c) of the Act. Under this provision of SMCRA permittees 
know that if they control a site with outstanding violations or unpaid 
penalties or fees, they cannot obtain additional permits until the 
outstanding issues are resolved. In my opinion, this has been SMCRA's 
most effective tool in changing the behavior of coal companies.
    AVS has been very effective in making sure those companies and 
individuals interested in remaining in the coal mining business take 
care of past problems they can be linked to. The AVS has given us a 
means of resolving unabated state and federal environmental violations 
and civil penalty assessments without resorting to court action to 
compel reclamation. Since the AVS was created we have resolved hundreds 
of cases attributable to past operations of the major producers. One of 
those accounted for reclamation of nearly 500 contract mining 
operations in three states. The reclamation alone was valued at over 
five million dollars. The AVS has produced thousands of settlement 
agreements resulting in considerable reclamation and millions of 
dollars of payment in fees and penalties for both OSM and the State 
Regulatory Authorities.
    In the 1990s, the hostile relationship between States and OSM began 
to fade. This began with the effort by Director Robert Uram to refocus 
OSM's oversight role on results and to involve the states more directly 
in the evaluation process. Rather than spend days pointing out each 
others shortcomings, the States and OSM began working as partners to 
find resolutions to problems. That relationship, the true ``cooperative 
federalism'' envisioned in SMCRA, has continued to build to this day.
    More recently, the State Regulatory Authorities and OSM have added 
a new meaning to cooperative federalism. Beginning in 2002, we saw 
several entities file bankruptcy in an attempt to evade reclamation 
obligations. These were multi-state operations where the mines and 
liabilities are located in one state and the assets and ultimate 
controllers are located in another. One case involving 425 SMCRA 
permits located across five states was the largest coal bankruptcy case 
in history. By utilizing duel enforcement and combining legal 
resources, the States and OSM together sent a clear message that it was 
unacceptable to socialize reclamation liabilities. The result was 
reclamation activities and assurances valued at nearly 400 million 
dollars.
The Continuing Legacy of SMCRA
    I cannot imagine what our nation's land and water resources would 
be today if it were not for SMCRA. Congress' enactment of such a 
forward-thinking law was an awakening and recognition of the 
potentially dangerous and harmful cumulative effects of coal mining on 
the land and water. After years of resistance, coal companies 
acknowledge that reclaiming the land benefits them as well as the 
communities in which they operate. I believe that these companies now 
approach reclamation thoughtfully, with a businesslike attitude and an 
awareness of environmental impacts that did not exist before SMCRA. 
This is the true success of SMCRA.
    About 29.5 billion tons of coal have been mined while SMCRA has 
been in place. Most of that, about 90 percent, was used to generate 
electrical power. During this same time, the coal mining industry has 
successfully reclaimed more than 2 million acres (2,238,560) of mined 
lands. The reclamation accomplishments at many of these mines are truly 
impressive, exceeding all State and Federal regulations. Millions of 
trees have been planted for both commercial forestry and wildlife 
habitat, trees that recreate or extend the hardwood or pine forests 
native to the area. Wetlands, often part of mine drainage control, also 
have been reclaimed and restored. Mines that have been reclaimed for 
farmland show high levels of productivity. In re-mining operations, 
similar results occur with the added benefit of cleaning up abandoned 
surface, as well as underground mines.
    In addition to ensuring that active mines operate in an 
environmentally-sustainable manner, the other daunting task assigned to 
OSM under SMCRA was to restore mined lands that were abandoned before 
the law was passed. Today, almost 240,000 acres of high-priority mine 
lands abandoned before 1977 have been reclaimed. The Abandoned Mine 
Land Program has eliminated safety and environmental hazards on a total 
of 314,108 acres. As with the active mining operations, the reclamation 
accomplishments are extensive and can now be done to a standard barely 
imaginable when the law passed. Useful buildings have been saved from 
collapse, sheer highwalls turned to rolling grassland, streams where 
fish could not live now support thriving wildlife populations. Forests 
are beginning to grow.
    The credit for these accomplishments belongs largely to the people 
working in the regulatory and reclamation programs for the coal States 
and Indian Tribes. There are about 2,400 people in this country 
responsible for implementing the Surface Mining Act. Only a little over 
500 of them work for OSM. That's the way Congress envisioned things 
working when it gave us SMCRA. We try to set the standards and solve 
the problems at the federal level, but it's the States and Tribes and 
their citizens who know their own issues best.
    The first 30 years of SMCRA have shown that we can balance the 
nation's need for domestic coal energy with protection for the 
environment. Mining should be a temporary use of the land and when 
mining is done, the land should be put back the way it was or put to 
some good use.
The Next 30 Years of SMCRA
    Over the next 30 years, I expect that vibrant debate will continue 
over provisions of the law or how it's implemented. Many citizens are 
opposed to mining techniques like longwall mining or mountaintop 
mining. Some oppose the use of coal ash in reclaiming abandoned mines. 
Ongoing litigation continues between OSM and the mining industry over 
issues like ownership and control.
    As someone who has lived through and participated in many of the 
debates in SMCRA's history, I have confidence that eventually these 
questions will be settled, and the discussion will move on to new 
issues. When we experience failures, as in the examples I have cited 
today, we should do our best to turn them into successes. SMCRA will be 
better for it, as will the coalfields, communities, and the States.
    My generation--SMCRA's first generation--is getting to be 
retirement age. In the next five or six years we're going to be 
replaced by a new generation. These new folks coming up bring with them 
new ideas and new technological tools my generation could not have 
dreamed possible. For example, technology continues to provide us with 
new ways to measure and mitigate environmental impacts. One of the 
challenges we face now is how to combine what my generation has learned 
with what the next generation can discover and use it to benefit 
Americans living and working in the coalfields.
Conclusion
    I appreciate this opportunity to provide my personal insight into 
30 years of the Surface Mining Control and Reclamation Act. I am not 
here today to say SMCRA is without flaws or has always been perfectly 
implemented. But I do believe that SMCRA has been good for the country. 
It may well be one of the best things Congress has done for the 
environment.
    So, as a boy who grew up in the old coalfields, who has devoted his 
career to OSM, and who has seen dramatic changes for the better because 
of what Congress did back in 1977, I am here to say thanks. It was the 
right thing to do.
    Mr. Chairman, I would be happy to answer any questions that you or 
members of the Committee may have.
                                 ______
                                 
    The Chairman. Thank you both for being with us this 
morning. And Mr. Bandy, thank you for your testimony.
    Mr. Bandy. Thank you.
    The Chairman. I appreciate the manner in which you gave it. 
It was from the heart, and so much so that I have to question 
whether OMB actually heard it. Or whether they cleared it or 
not would be a better question. Do you happen to know?
    Mr. Bandy. Mr. Chairman, I know it was submitted to OMB.
    [Laughter.]
    The Chairman. Deputy Director Owens, what is the status of 
your implementing the National Research Council's 
recommendations on the use of coal power plant waste in mine 
reclamation?
    Ms. Owens. Mr. Chairman, OSM published an advanced notice 
of proposed rulemaking in March of 2007. The comment period of 
that notice closed in June. We are currently reviewing 
comments, and our plan is to get a proposed rule out by the end 
of the year.
    The Chairman. Is this going the way of your agency's 
reaction to the National Academy's Coal Waste Empowerment 
Study? The number of National Academy assigned studies? The 
Office of Surface Mining is ignoring or starting to stack up, 
it appears, like building blocks.
    Ms. Owens. We have no intention of ignoring it, sir. In 
fact, as I said, our every intention is to have the rule 
published by the end of the year.
    The Chairman. OK. You spoke of the cooperative Federalism 
with respect to a relationship between the agency and the 
states. My fear is that this may have evolved into cooperative 
cronyism. Enforcing SMCRA is not about winning a popularity 
contest.
    For instance, does deferring to a state's 10-day notice 
response constitute independent oversight that the Act 
envisioned?
    Ms. Owens. Sir, I think that the Act requires, because of 
the way that the Act is constructed, and that is what the 
state's taking primacy and having primary regulatory 
responsibility, and OSM functioning in an oversight capacity, 
it is our responsibility to allow the states to take the 
corrective action that is necessary, which is why the Act 
provides for the 10-day notice process.
    The Chairman. But that does not preclude Federal 
enforcement. Is that correct? Would you agree with that 
statement?
    Ms. Owens. Certainly not, sir, it does not. In the event 
where the determination is made that the state has not taken 
appropriate action, OSM will take necessary action.
    The Chairman. OK. Deputy Director Owens, in 1998 I publicly 
expressed concern with a report that the majority of 
mountaintop removal mines in West Virginia were given permits 
without AOC variances. A great deal of litigation and policy 
changes have taken place since that time. However, my concern 
remains. And I touched upon this in my opening remarks. And 
that is, to what extent are mining operations that are viewed 
as mountaintop removal technically not categorized as such?
    They may use a combination of point removal, area mining, 
and contour cuts. And for all intents and purposes have the 
character of a mountaintop removal operation, but have not 
received an AOC variance, and have not submitted a post-mining 
land use plan that includes those higher uses that would 
benefit the economies of coalfield communities, the better 
post-mining uses to which I referred.
    I would expect your agency has looked into this matter as 
part of its oversight. Would you care to comment?
    Ms. Owens. Mr. Chairman, that is, in fact, correct. OSM is 
very much aware of the issues associated with mountaintop 
mining. As you mentioned, there has been litigation on the 
issue since 1998. We have engaged in rulemaking, and in fact 
currently we are working cooperatively with state and Federal 
regulators in the development of guidance on certain issues 
related to mountaintop mining, such as AOC, the variances, the 
post-mining land uses, and return of mined land to useful and 
productive hardwood forestry.
    We have also engaged in a national rulemaking on two of the 
issues associated with mountaintop mining: extreme buffer zone 
and excess spoiled fuel rule. We have a proposal that is in 
final review, and it should be published in the near future.
    The Chairman. Well, I would only respond that it has been a 
little over 10 years I think since we last had our oversight 
hearing, where I asked a similar question and got a similar 
answer.
    Ms. Owens. Well, I wasn't here 10 years ago. But I can tell 
you that I was in the Solicitor's Office at that time, and I 
was involved in the litigation on mountaintop mining. I know 
that it has been a struggle getting through these issues 
because of the controversies and the confusion that the 
regulation has wrought, which is why OSM now feels that a 
national rulemaking on these issues is appropriate.
    The Chairman. But does OSM have a definition of AOC, 
approximate original contour?
    Ms. Owens. We do not have a definition at this point. We 
are, in fact, working on a definition, looking into whether the 
definition at this time is appropriate.
    The Chairman. Thirty years, and we are still looking for a 
definition of AOC.
    Ms. Owens. I am sorry. Yes, sir. I thought that was a 
statement.
    The Chairman. And your response is yes. OK. Let me ask one 
more question.
    Turning to the recently enacted amendments to the Abandoned 
Mine Reclamation Program, is it the agency's view that as a 
result of those amendments, the states cannot use their AML 
grants for non-coal mine reclamation.
    Ms. Owens. That is an issue that we are currently working 
with our solicitors on, to make sure that we follow the law as 
written. So we are, a decision has not been made, but we are 
working with our solicitors on that issue.
    The Chairman. Continuing on this issue, and I have already 
taken issue with Brent Wahlquist on this when he was Acting 
Director, the Office of Surface Mining has taken the position 
that the minimum program states will not receive the full $3 
million minimum program amount until Fiscal Year 2010. This is 
a great injustice; it is not how I read the law. And I would 
appreciate if you would elaborate on how this position is being 
taken.
    Ms. Owens. Again, Mr. Chairman, that issue, we understand 
the position of the Chair. We are looking at and working with 
our solicitors to make sure that we follow the written law.
    The Chairman. That you follow, I am sorry, the written law?
    Ms. Owens. Written law. The law as it is written.
    The Chairman. Are you talking about the amendments that we 
enacted end of last session?
    Ms. Owens. Yes, I am, sir.
    The Chairman. Have you perhaps not read them yet?
    Ms. Owens. I have read them.
    The Chairman. Perhaps we have a disagreement of the intent 
of that legislation, then.
    My time is up. I will yield to the Ranking Member, Mr. 
Pearce.
    Mr. Pearce. Thank you, Mr. Chairman. Ms. Owens, what is the 
legal foundation for the regulations under the SMCRA of surface 
mining on non-Federal lands? What is the legal foundation?
    Ms. Owens. I am sorry, sir, could you--I am not 
understanding your question.
    Mr. Pearce. The legal foundation for the national 
regulations for those non-public, non-Federal lands.
    Ms. Owens. Non-public, non-Federal lands?
    Mr. Pearce. Yes, the mining----
    Ms. Owens. The legal foundation for all of our regulations 
are the Surface Mining Act.
    Mr. Pearce. OK. But the underlying foundation of those 
regulations, I understand it comes from the Act. I am asking 
about the legal foundations.
    Ms. Owens. The Act does provide the legal foundation, 
unless I am missing something, sir. I apologize.
    Mr. Pearce. Have any of the foundations been challenged in 
court?
    Ms. Owens. Of regulation?
    Mr. Pearce. The legal foundations for the regulation. In 
other words, has a court looked at the legal foundation for the 
regulatory basis of SMCRA?
    Ms. Owens. Mr. Congressman, as I am sure you are aware, 
most of, or I should say a large percentage of regulations that 
are promulgated and that have been promulgated under SMCRA over 
the years and currently are challenged in court.
    Mr. Pearce. And generally what is the finding of the court? 
Supporting the regulatory basis, or are they not?
    Ms. Owens. We have had instances, because of the breadth of 
the challenges to the regulations, we have prevailed in some 
cases and not in others. And when we have not, we have taken 
action accordingly with the courts' decisions.
    Mr. Pearce. Do you think that Congress can effectively 
preempt states' regulation of oil and gas production on non-
Federal lands? Do you think that we can do that here in 
Congress?
    Ms. Owens. Well, Congress has the power to write the laws. 
I would assume that if you write them in that way, you could.
    Mr. Pearce. OK. Do you know, Mr. Bandy, you had mentioned 
that you kind of confirmed the statements made by Mr. Duncan, 
that we have evolved from the mom-and-pop operations to 80 
percent publicly traded. Is that healthy for the industry? Has 
that been a good change?
    Mr. Bandy. Well, the industry has changed a lot in 30 
years. The amount of work that goes into obtaining a permit is 
very expensive. There is a lot of engineering and design work 
that goes into that, and a lot of equipment cost. It is 
expensive.
    It is being approached more as a business approach. And I 
see maturity in the industry, and likewise in the state 
programs.
    Mr. Pearce. As a regulator looking at it, is it a healthier 
industry now? Is it safer, cleaner, everything that regulators 
look at?
    Mr. Bandy. Yes, sir. We have looked at numbers, and one of 
the things I currently do is the applicant violator system, 
which looks at violations, companies with violations. And we 
see a decreasing number of non-forfeitures and a decreasing 
number of cessation orders when you compare back to previous 
years.
    The industry as a whole has consolidated, and you see quite 
a bit of consolidation of the industry today.
    Mr. Pearce. I wonder how many people were employed in the 
coal mining industry.
    Mr. Bandy. I think it is about 250,000, but I am not 
positive of that, nationwide.
    Mr. Pearce. And an average coal miner might make what?
    Mr. Bandy. I would say $100 a day.
    Mr. Pearce. A thousand dollars a week then, more or less.
    Mr. Bandy. I guess so.
    Mr. Pearce. So it is pretty good, high-paying jobs, 
compared to New Mexico scale. And the contribution to the GDP? 
Ms. Owens, would you know that?
    Ms. Owens. No, sir, I am sorry, I don't.
    Mr. Pearce. I think it is about $100 billion. A lot of 
those are union jobs. I think what we do here has a great 
effect on the economy, the cost of our energy, and on the jobs 
in the coal industry.
    Thank you, Mr. Chairman. I see my time is about to elapse.
    The Chairman. Jim, let us see. Let me recognize in order in 
which you came in. Mr. Grijalva, Mr. Inslee.
    Mr. Inslee. Yes. A few months ago I talked to a lady from 
Marsh Fork Hollow. And she told me about the destruction of her 
community by mountaintop mining. And as someone who is not 
personally familiar with it, it was really distressing. She 
told about her son going out; the first time it really got bad 
is in the creek behind their house, a place that they had 
played for generations, becoming just, the water just looked 
threatening. Not a place where a kid could play any more.
    Then they started talking about the dust. Then they talked 
about the dam, that she couldn't sleep at night because they 
all had to sleep in one room. They were worried it was going to 
collapse. And they eventually had to leave. And this whole 
community basically, not on the land that was owned by the 
mine, but adjacent to it. And they all left.
    And listening to her, it was apparent to me that Federal 
policy had failed to protect Americans from some of the 
devastation caused by this particular kind of mining.
    I am not as familiar with the specifics as the Chairman and 
the other members of the Committee. I am concerned when I hear 
that there has apparently been a violation of a failure by the 
Federal government to protect against the destruction of 
streams by this, by issuing permits, if you will, at the same 
time that we are destroying these stream beds.
    It seems to me like there needs to be some significant 
review of the performance of the Executive Branch, and/or a 
change in the law, given the destruction that at least I have 
been told is occurring. Could you both comment on that?
    Ms. Owens. Mr. Congressman, as I mentioned earlier, OSM is 
painfully aware of the issues associated with mountaintop 
mining. And in an effort to address many of those issues, we 
have been and continue to work cooperatively with the state and 
Federal regulators.
    One of the things that we are currently doing is working 
with the EPA, the Corps of Engineers, the Fish and Wildlife 
Service, to come up with ways to ensure that we issue better 
permits; that there is coordination between those agencies--in 
particular, the Corps of Engineers--that have responsibility to 
ensure that the Clean Water Act requirements are met.
    In the stream buffer zone regulation that we are proposing, 
one of the issues we are addressing is to clarify the 
conditions under which mining activities can occur in or near 
streams. So we are looking at those issues and attempting to 
address them.
    Mr. Inslee. What is the status of this? At one time there 
was litigation, I think last year, where the Administration was 
allowing mining that they were aware were filling in stream 
beds, and actually physically destroying the stream bed. And my 
understanding is that the Administration allowed that to occur. 
There was litigation, and my understanding is the court issued 
an injunction or stopped the Administration somehow from doing 
that. What is the status of that?
    Ms. Owens. Well, I think you are referring to a District 
Court decision, which the District Court Judge did not allow 
the decision; said that there could be no placement of spoil in 
perennial streams. However, the Fourth Circuit Court of Appeals 
overturned that.
    Notwithstanding that fact, we recognize that there are 
issues, and we have begun to address them in the proposed 
rulemaking.
    Mr. Inslee. Well, maybe you can tell me. Do you think it 
should be the law that mountaintop mining could result in 
destroying these streams? Do you think that should be the law?
    Ms. Owens. No, I don't.
    Mr. Inslee. And under the current law, are they allowed to 
do so?
    Ms. Owens. The law does not allow for destroying of the 
streams. In fact, one of the issues associated with the stream 
buffer zone rule is some of the confusion we realized through 
the course of the litigation over this is that there was 
confusion over the interpretation of the rule, which is why we 
have----
    Mr. Inslee. Do we need a statutory change to clarify that? 
I mean, if you are telling me that you think they shouldn't be 
destroyed, but the Fourth Circuit Court allowed the mining to 
go through, which dumped spoils in a stream bed and literally 
destroyed it, does that suggest we need a statutory change? Or 
is the Executive just not applying the statute correctly?
    Ms. Owens. I think our regulations have attempted to apply 
the law correctly. We have, however, as I said, as a result of 
litigation and the different results that came out of that 
litigation, our regulation now attempts to add some clarity to 
the confusion that exists.
    Mr. Inslee. And have those then issued? Is there a proposed 
regulation out?
    Ms. Owens. No. The proposed regulation is in final review, 
and we expect that it will be issued soon. In the near future.
    Mr. Inslee. Well, we hope to see it. Thank you.
    The Chairman. The gentleman from North Carolina, Mr. 
Shuler?
    [No response.]
    The Chairman. The gentlelady from Guam, Ms. Bordallo?
    [No response.]
    The Chairman. The gentleman from Maryland, Mr. Sarbanes?
    [No response.]
    The Chairman. OK. Oh, I am sorry.
    Mr. Shuster. You forgot me over here.
    The Chairman. The gentleman from Pennsylvania, Mr. Shuster. 
I am sorry, Bill.
    Mr. Shuster. Thank you very much, Mr. Chairman. I am 
equally concerned about what has happened in mining and to the 
environment. But I have seen in my district communities 
destroyed, not necessarily because of what has happened to the 
environment, but because of what has happened to coal mining, 
and the burden and the regulatory burden that the government 
has placed on it now.
    I certainly think that we have to have laws in place to 
protect the environment, but we also have to make sure that we 
protect this industry so that it can create the jobs that are 
so necessary to get the coal out of the ground, to be able to 
use it for power in this country.
    As I have said, I have seen a number of communities that 
have been destroyed and are trying to rebuild themselves, 
trying to open up mines that were at one time very productive 
mines, closed down for various reasons. But the process they 
have to go through is very burdensome. It takes a long period 
of time, it is very expensive. And I hope that we can 
streamline some of this, so that we can open some of these 
mines that, as I have said, had been mined in the past in 
western Pennsylvania, and are important to this nation, 
important to my district, important to regular people.
    I think somebody mentioned about the kind of money a miner 
makes today. One of the, I guess it is a good problem we have, 
is we can't get enough miners in western Pennsylvania to mine 
the coal. So I am very concerned about the regulatory burden 
that we place on these companies.
    One question I wonder if you might be able to comment on, 
on lands that have been reclaimed. What is the record on their 
productivity once they have been reclaimed, that you have 
found?
    Ms. Owens. I couldn't answer across the board, but I can 
say that one of the initiatives that OSM is engaged in now is 
ARRIs, our Appalachian Regional Reforestation Initiative. And 
that is an effort to return mined lands to productive hardwood 
forests. And of course, that has all the benefits of the 
reforestation creating natural habitat for wildlife and carbon 
sequestration possibilities.
    The goal of the Surface Mining Act and the regulatory 
program is to ensure that post-mining land uses return the land 
to at least as good, if not better, uses than prior to mining.
    Mr. Shuster. And do you have any statistics, any records on 
if that has been the case?
    Ms. Owens. I can get statistics. I don't have any with me.
    Mr. Shuster. But it has been my, in traveling throughout my 
district--of course, mining is important, but also hardwoods. 
Pennsylvania has some of the greatest hardwood forests in the 
world. And when I have been talking to folks that timber, they 
say the productivity in cases has exceeded what it was before 
mining went there. But again, I would like to see some 
statistics on your department, if you keep that and track those 
kinds of things. I think it would be very important to us as we 
craft legislation, as we go through this Act.
    The other question that I have is concerning the fees that 
are collected from the operators. They are done on a voluntary 
basis. What is your feeling? Do you feel as though they are 
being collected? Are we getting 100 percent, or close to 100 
percent, of what we think should be collected, to be able to do 
these recommendations?
    Ms. Owens. Fees assessed against coal produced?
    Mr. Shuster. Yes.
    Ms. Owens. Well, that is not voluntary. That is required 
under the Act.
    Mr. Shuster. I know that. But the reporting, I guess, is 
voluntary, is that correct?
    Ms. Owens. I am sorry?
    Mr. Shuster. The reporting on the production, is that 
voluntary, or is there an auditing process in place?
    Ms. Owens. That is required, as well. And I believe we have 
99 percent compliance with that requirement.
    Mr. Shuster. OK. The other thing that I wanted you to 
comment on was that in recent years they have increased the 
flexibility of how those monies can be used. A portion of it, 
or it seems to be an increasing portion of it is going into 
water systems, which of course is important. But I am concerned 
that the money is not being spent on reclaiming the land, and 
then down the road somewhere we need to figure out how to get 
money in to improve those water systems.
    What do your numbers show as far as that? Are we seeing a 
significant increase in those monies being used for water 
treatment facilities instead of the reclamation?
    Ms. Owens. I am sorry, I don't have the statistics on that. 
I do know that the monies, the fees that are collected on the 
coal produced go into the Abandoned Mine Land Fund, and the 
projects that that fund finances are those that come from our 
Abandoned Mine Land Inventory System. And those are high-
priority projects that the Act established and requires us to 
require states with abandoned mine land programs to clean up.
    Mr. Shuster. Well, at some point, you probably have 
statistics on that, also. Again, my question was because of the 
flexibility we put in the law, more of that money is going into 
cleaning the water systems instead of the reclamation projects. 
Sometimes that goes hand in hand, but I wonder if you could 
give me some statistics on that and see where that money is 
flowing.
    Ms. Owens. To the extent that we can get those, I will.
    Mr. Shuster. Thank you very much. Thank you, Mr. Chairman.
    The Chairman. The gentleman from Idaho, Mr. Sali.
    Mr. Sali. Thank you, Mr. Chairman. Ms. Owens first, and 
then Mr. Bandy. And just a short answer.
    Do you feel like your office has been able to do a good job 
of regulating coal mining and reclaiming land, and protecting 
the environment through the Surface Mining Act?
    Ms. Owens. I think that we have, what we have done is done 
a good job. We are in the process of--and Mr. Chairman alluded 
to this earlier--establishing a regulatory framework that 
allows for the states and tribes to regulate under the surface 
mining programs.
    Ninety-seven percent of the coal that is produced in this 
nation is permitted and regulated under the state regulatory 
programs. And it is in our interest to make sure that those 
states succeed. And the way----
    Mr. Sali. Do you believe they are succeeding in taking care 
of the environmental concerns and whatnot with regulating coal 
mining in this country today?
    Ms. Owens. I think they are improving. As you know, this 
has been a 30-year effort. We have had some successes, we have 
had some challenges. We have had some failures. But we have not 
ceased to work on the improvement of our effort, and to 
continue to work cooperatively with the states.
    What we have found is that our increased cooperative effort 
with the states is yielding better results than when we were in 
a confrontational mode with them. So it can----
    Mr. Sali. Mr. Bandy, do you feel like your office has been 
able to do a good job of regulating coal mining in this country 
and protecting the environment, all those goals that are set 
out in the Surface Mining Act?
    Mr. Bandy. Yes, sir, I do. I don't think we have been 
perfect, but I would hate to see what it would have been like 
without us 30 years ago, in 30 years. I see a lot of maturity 
and a lot of dedicated people.
    The problem with, or the issue with being a regulator is 
you kind of straddle the fence. And nobody is ever really happy 
with your decision, neither the industry or the citizens. But 
you try to find that balance, as laid out in the purposes of 
the Act, to balance our country's energy needs with their 
environmental concerns.
    Mr. Sali. And along those lines, I guess the point I am 
trying to get to is this. I know you have new regulations that 
have been promulgated and will guide the future, I guess is 
probably the best way to say that.
    Is there any authority that you lack in your office, under 
the Surface Mining Act, that you need to be able to go out and 
protect the environment in ways that it is not being protected 
today? And I recognize, Mr. Bandy, that you use judgment; 
sometimes you don't use the full extent of your authority. But 
is there a place where you run up against a lack of authority 
from your office to be able to regulate for the environment? To 
be able to punish people who offend? To be able to come up with 
regulations that will take care of any issues that have come 
up? And I say that, tempering, knowing that the courts get 
involved and sometimes interpret things differently.
    But do you lack authority to deal with the issues that are 
supposed to be taken care of under the Surface Mining Act?
    Mr. Bandy. No, sir. One of the things that inspectors and 
regulators have dealt with for years, how to deal with 
bankruptcies. And pretty much, we figured, and when they file 
bankruptcy, it is all over; everybody loses.
    But the cases I have pointed out in my oral testimony is it 
is an example of how we tweak and reused what SMCRA gave us 30 
years ago in today's economy, in today's environment, to get 
favorable results.
    Mr. Sali. Ms. Owens, would you respond to that question? Is 
there any place where you lack authority to act that you would 
need Congress to engage?
    Ms. Owens. Nothing that comes to mind immediately, Mr. 
Congressman. As Mr. Bandy said, we have been able to, through 
the years, adapt to the needs of the Surface Mining Program. 
The challenge that we have, as he also stated, is striking that 
balance. And I think that we have done a pretty good job of 
attempting to do that.
    Mr. Sali. You would agree that striking that balance 
generally means that you would exercise less authority than you 
have under the Act?
    Ms. Owens. No, not at all. It just means that we exercise 
the authority that is given us, recognizing the need; the need 
for coal by the nation. But then also to make sure that it is 
done in an environmentally sound manner. And I think SMCRA 
gives us the tools to do that. And I think we are doing a 
pretty good job of utilizing those tools to that result.
    Mr. Sali. Thank you, Mr. Chairman.
    The Chairman. The gentleman from Nevada, Mr. Heller.
    Mr. Heller. No questions. Thank you.
    The Chairman. The gentleman from New Jersey, Mr. Holt.
    Mr. Holt. I pass, Mr. Chairman.
    The Chairman. OK. Before we let you go, let me just go back 
one more time to the definition of AOC. You are saying 30 years 
now, we still don't have a definition of approximate original 
contour. I would seriously, seriously ask you, how do you 
expect anybody to comply with the law if 30 years later you 
still don't have a definition of what one of the basic tenets 
of that law, return to AOC, approximate original contour?
    Ms. Owens. Mr. Chairman, I think you are aware that there 
is a statutory definition of approximate original contour, and 
that is the definition that we follow.
    The Chairman. I have in front of me the original SMCRA Act, 
1977. My copy. My notes I wrote on it 30 years ago. I wish I 
still had a picture of what I looked like at that time to put 
in here, as well.
    [Laughter.]
    The Chairman. But here are my notes. ``Strong bill.'' And 
``requiring return to approximate original contour.'' My 
eyesight is not as good as it was 30 years ago, either. Well, 
my handwriting has gotten worse, that is for sure.
    The bottom line is I wrote on here, ``approximate original 
contour and better post-mining uses of the land.'' This bill 
was supposed to address the problems of small operators and 
permits, the states' rights if the states meet Federal 
guidelines. This is a note I must have written for a press 
interview or something. But anyway, approximate original 
contour. And we still don't have a definition.
    Ms. Owens. Well, Mr. Chairman, unfortunately we didn't have 
the benefit of your handwritten notes. We only have the 
statutory definition, which we have attempted to follow over 
the years.
    The Chairman. Well, I would hope we could get something 
more definite than a statutory definition, so that we know what 
is legal and how to comply, the operators know how to comply 
with the law. I think the agency must have a definition.
    Ms. Owens. Well, we are, in fact, now working with the 
state and Federal regulators to provide guidance. We are 
working to develop guidance on AOC and the variances and post-
mining land uses.
    The Chairman. OK. Thank you both for your testimony today.
    Ms. Owens. Thank you, Mr. Chairman.
    Mr. Bandy. Thank you.
    The Chairman. Thank you. Our next panel is composed of 
Gregory E. Conrad, Executive Director, Interstate Mining 
Compact Commission, Herndon, Virginia; Stephanie R. 
Timmermeyer, the Cabinet Secretary, West Virginia Department of 
Environmental Protection, from Charleston, West Virginia; John 
F. Husted, Deputy Chief, Division of Mineral Resource 
Management, Ohio Department of Natural Resources, Columbus, 
Ohio; Mr. John Corra, the Director of the Wyoming Department of 
Environmental Quality, Cheyenne, Wyoming.
    The Chair would like to welcome the panel for being with us 
this morning, some of whom have traveled long distances. And 
again, I commend you for your work. Stephanie, it is good to 
see you again, and thank you for what you do in our home state 
of West Virginia. I hope the baby is doing well.
    We have your prepared testimony; it will be made part of 
the record as if actually read. And I understand, Mr. Conrad, 
you will be the lead-off witness.
    Mr. Conrad. Mr. Conrad, if you would give me a moment here 
while we set up.
    The Chairman. OK.

STATEMENT OF GREGORY E. CONRAD, EXECUTIVE DIRECTOR, INTERSTATE 
          MINING COMPACT COMMISSION, HERNDON, VIRGINIA

    Mr. Conrad. Good morning, Mr. Chairman, members of the 
Committee. I appreciate the opportunity to appear before you 
this morning, and to introduce the perspective from the states 
concerning the Surface Mining Control and Reclamation Act, as 
we reflect on 30 years of its implementation.
    I will present a general overview of state regulation under 
SMCRA, and then my colleagues from West Virginia and Wyoming 
will share a more regional perspective, followed by a viewpoint 
from those who operate abandoned mine land programs for the 
states and tribes.
    As one of the original framers of SMCRA, Mr. Chairman, you 
are very familiar with the state lead concept that underpins 
the implementation of the Act. In designing a regulatory model 
that would be both effective and efficient, Congress decided 
that the states should be authorized to regulate surface mining 
and reclamation operations within their borders.
    Due to the diversity of terrain, climate, and other 
conditions related to mining operations, it simply made sense 
to rely upon the states to implement programs based on national 
standards. The other part of the equation was financial. It was 
anticipated, and indeed has proven true, that the states would 
be able to operate their programs at significantly lower cost 
than the Federal government.
    We are happy to report today, Mr. Chairman, that the 
regulatory regime established by SMCRA is a success, and is 
working notably well. The purposes of the Act are being 
accomplished, and the overall goal of establishing a nationwide 
program to protect society and the environment from the adverse 
effects of past and present coal mining operations has been 
achieved.
    Drainage and runoff controls are in place to ensure that 
downstream waters are not filled with sediment or otherwise 
polluted. Blasting operations are controlled to prevent damage 
to nearby property. Final grading and reshaping of mine lands 
are undertaken to ensure that they are stable and approximate 
their original contour. Topsoil is preserved and then replaced 
to accomplish high levels of productivity, and mine lands are 
reclaimed to a variety of beneficial uses, and then returned to 
local landowners in equal or better condition than before 
mining. And all of these statutory requirements are being 
accomplished while maintaining a viable coal mining industry 
that is essential for meeting our nation's energy needs.
    Examples of some of the excellent reclamation that is 
occurring under the Act, along with some of the various post-
mining land uses, can be seen in our two exhibits, which 
highlight area state and national reclamation award winners. I 
would request permission to submit these two exhibits for the 
record. Thank you.
    As we look to the future, Mr. Chairman, the states faced 
several challenges, perhaps the most crucial being adequate 
funding for state regulatory programs. Pursuant to Section 705 
of SMCRA, OSM is authorized to make annual grants to the states 
of up to 50 percent of the total costs incurred for the 
purposes of administering and enforcing their programs. This 
percentage has increased for states regulating on Federal 
lands.
    As you know, these grants are essential to the full and 
effective operation of state regulatory programs. For the past 
several fiscal years, the amounts for state Title V grants has 
been flatlined, as you will note in this graph. What this does 
not show is that these grants have been stagnant for over 12 
years.
    Looking at the graph once again, another disturbing trend 
is evidenced, and that is that the gap between the state's 
requests and what states are receiving in annual grants is 
widening. In the end, this increasing gap is compounding the 
problem caused by inflation, and uncontrollable costs is 
undermining our efforts to realize needed program improvements 
and enhancements, and jeopardizes our efforts to minimize the 
impact of coal extraction operations on people and the 
environment.
    Should the Federal government be faced with operating these 
programs, the impact on their budget will be significant. So 
for all of these reasons, we have urged Congress to increase 
funding for state Title V grants in OSM's 2008 budget to $67 
million. We are encouraged that both the House and the Senate 
are moving in this direction.
    Let me turn briefly to some of the key successes and future 
challenges facing the states. Over the past 20 years, state 
programs have improved to the point that implementation is 
highly successful. The overall programmatic emphasis under 
SMCRA has shifted from structural and administrative issues to 
specific technical issues that are encountered as reclamation 
technology and science are advanced.
    This is where OSM serves a valuable support mechanism for 
the states, particularly through their TIPS program and the 
agency's technical training program, both of which undergird 
the states' efforts to operate efficient and effective 
programs.
    On another front, the states have worked cooperatively with 
OSM and others to address acid-mine drainage issues through the 
Acid Drainage Technology Initiative. The states have made 
significant strides in advancing reforestation efforts on 
reclaimed lands through the Appalachian Regional Reforestation 
Initiative. And through a partnership among the states' OSM and 
EPA we have achieved momentum in the remaining area, where 
thousands of acres of abandoned mine lands have been restored 
as part of active mining operations.
    Among the future technical and regulatory challenges facing 
the states are those related to adequate financial assurance 
for long-term impacts beyond normal reclamation, prime farmland 
productivity, and underground mine mapping. In each of these 
instances, and in others, such as subsidence control, blasting, 
and hydrologic protection, the states are actively engaged in 
seeking technical solutions, as well as regulatory program 
enhancements, that will fully and adequately address the 
concerns associated with these issues.
    Much progress has been made over the past 30 years to 
accomplish the purpose and objectives of SMCRA. At this point 
in the Act's implementation, we believe that it is most 
relevant for OSM to focus its energies and resources on 
assisting and supporting the states through adequate funding 
for state grants, sound technical assistance, and opportunities 
for the states to actively participate in the agency's training 
program. The overall result will be excellence in state program 
implementation and enhancement of the Federal/state 
partnership, and better on-the-ground performance by the 
regulated industry.
    Thank you very much.
    [The prepared statement of Mr. Conrad follows:]

          Statement of Gregory E. Conrad, Executive Director, 
                  Interstate Mining Compact Commission

    Good morning Mr. Chairman and Members of the Committee. My name is 
Greg Conrad and I serve as Executive Director of the Interstate Mining 
Compact Commission. The Compact is comprised of 24 states throughout 
the country that together produce some 90% of our Nation's coal, as 
well as important non-fuel minerals. The Compact's purposes are to 
advance the protection and restoration of land, water and other 
resources affected by mining through the encouragement of programs in 
each of the member states that will achieve comparable results in 
protecting, conserving and improving the usefulness of natural 
resources and to assist in achieving and maintaining an efficient, 
productive and economically viable mining industry. Participation in 
the Compact is gained through the enactment of legislation by the 
member states authorizing their entry into the Compact and their 
respective Governors serve as Commissioners. We appreciate the 
opportunity to participate in this oversight hearing on ``A 30th 
Anniversary Review of the Surface Mining Control and Reclamation Act of 
1977''. I will present a general overview of the states' experience 
with SMCRA's implementation and will then turn to my colleagues from 
West Virginia and Wyoming to provide insights into the operation of 
state programs in two important coal mining regions of the country. 
Finally, John Husted of Ohio, who serves as President of the National 
Association of Abandoned Mine Land Programs, will share the state and 
tribal perspective on the AML program under SMCRA.
    The Surface Mining Control and Reclamation Act is one of several 
laws passed in the environmental decade of the 1970s that provided for 
a unique blend of federal and state authority for implementation of its 
provisions. As one of the original framers of this landmark law, Mr. 
Chairman, you know that one of its key underpinnings was that the 
primary governmental responsibility for developing, authorizing, 
issuing and enforcing regulations for surface mining and reclamation 
operations subject to the Act should rest with the states, due to the 
diversity of terrain, climate, biologic, chemical and other physical 
conditions related to mining operations. We are here to report on our 
role and experience as primary regulatory authorities under SMCRA.
    By almost all accounts, the implementation of SMCRA by the states 
has been a resounding success. The anticipated purposes of the Act have 
been or are being accomplished and the overall goal of establishing a 
nationwide program to protect society and the environment from the 
adverse effects of past and present surface coal mining operations has 
been achieved. Drainage and runoff controls are in place to ensure that 
downstream waters are not filled with sediment or otherwise polluted by 
mining activity. Blasting operations are controlled to prevent damage 
to nearby buildings and other property. Final grading and reshaping of 
mined lands are undertaken to ensure that they are stable and 
approximate their original contour. Topsoil is preserved and then 
replaced on mined lands to accomplish high levels of productivity. 
Mined lands are reclaimed to a variety of beneficial uses within a few 
years after the completion of mining. Once reclaimed lands are fully 
bond released, they are returned to local landowners in equal or better 
condition than before mining began. All of these statutory requirements 
are being accomplished while maintaining a viable coal mining industry 
that is essential for meeting our Nation's energy needs. Examples of 
some of the excellent reclamation that is occurring under the Act can 
be seen in our two exhibits, which highlight various state, IMCC and 
OSM reclamation award winners.
    As we reflect back on the past 30 years since the enactment of the 
Surface Mining Control and Reclamation Act (SMCRA), much has changed 
and yet some things remain the same. In the early years, we were 
focused on the development of a comprehensive federal regulatory 
program that would serve as the baseline for SMCRA's implementation. 
Many of these initial rules faced legal challenges as being arbitrary, 
capricious or inconsistent with law and took many years to resolve. A 
few, like the definition of valid existing rights and the procedural 
rules concerning ownership and control that underpin the Applicant/
Violator System, are still unsettled. However, the majority of the 
federal rules are in place and working effectively. This is not to say 
that we are out of the woods with respect to significant future 
rulemakings. Two examples of rules currently before the Office of 
Surface Mining, Reclamation and Enforcement (OSM) are stream buffer 
zones and mine placement of coal combustion by-products, both of which 
the agency will soon be proposing. However, in general, the regulatory 
program is more stable and certain than it was even 10 years ago, which 
benefits both coal operators and citizens.
    One of the key components of SMCRA when first enacted was its 
reliance on a unique and challenging arrangement of state and federal 
authority to accomplish its intended purposes and objectives. Pursuant 
to the state primacy approach embodied in SMCRA, the states serve as 
the front-line authorities for implementation of the public protection 
and environmental conservation provisions of the Act, with a supporting 
oversight role accorded to OSM. It has taken a good portion of the past 
thirty years to sort out the components of these often competing roles, 
but the result has been a balance of authority that generally works.
    During the past ten or so years, the working relationship between 
the states and OSM has been particularly productive and non-
contentious. We have moved beyond the second-guessing of state 
decisions that predominated the early years of state program 
implementation and instead are engaged in more cooperative initiatives 
where OSM strives to support the states through technical advice and 
training and where the states and OSM work together to solve difficult 
policy and legal questions. OSM's oversight program is more focused on 
results, looking at on-the-ground reclamation success and off-site 
impacts, which better reflect the true measure of whether the purposes 
of SMCRA are being met. In fact, over the years, both OSM's oversight 
program, as well as several state performance-based regulatory 
programs, have received national recognition for their effectiveness 
and efficiency.
    This is not to say that there are not several challenges ahead of 
us as we look to the future. Perhaps the most crucial at this juncture 
is adequate funding for state regulatory programs. Pursuant to section 
705 of SMCRA, OSM is authorized to make annual grants to the states of 
up to 50 percent of the total costs incurred by the states for the 
purposes of administering and enforcing their programs. This percentage 
is increased for those states that regulate on federal lands. As you 
know, Mr. Chairman, these grants are essential to the full and 
effective operation of state regulatory programs. For the past several 
fiscal years, the amount for state Title V grants has been flat-lined. 
(See figure 1) What this graph does not show is that these grants have 
been stagnant for over 12 years. The appropriation for state Title V 
grants in FY 1995 was $50.5 million. Essentially, we have attempted to 
operate effective, high performance programs with a meager $6 million 
increase spread over 12 years. By most standards, this is remarkable, 
and clearly a bargain for the federal government. Over this same period 
of time, coal production has risen substantially and OSM's own budget 
for federal program costs has increased by over $25 million. Given the 
fact that it is the states that operate the programs that address the 
environmental impacts of coal mining operations, a similar increase 
would have been expected. But instead, state regulatory grants have 
remained flat-lined.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

    For Fiscal Year 2008, in an attempt to reverse this trend, OSM has 
proposed a modest increase for state Title V grants. However, it may be 
too little too late, especially for some states such as Virginia and 
Utah. In Virginia, for instance, coal production and operating costs 
have increased, while federal funding for state-based coal regulatory 
programs has consistently decreased. The rise in costs associated with 
wages, employee benefits, and transportation fuels have risen 
approximately 15% over the past four years. Due to the loss of federal 
funds, Virginia is unable to fill many staff postings, including that 
of the critical field inspector. Without a full staff of reclamation 
inspectors, Virginia may not meet federal inspection guidelines. 
Virginia is also unable to fill technical support staff positions. This 
will limit the assistance the Commonwealth can offer to coal companies 
and significantly delay the review and approval process for surface 
mining permits. Virginia's situation is symptomatic of what other 
states are facing--or will soon face--if the debilitating trend for 
Title V grant funding is not reversed.
    It must be kept in mind that state coal regulatory program 
permitting and inspection workloads are in large part related to coal 
mine production. In general, as coal production increases, the need for 
additional permitting and operational inspections also increases. State 
programs must be adequately funded and staffed to insure that 
permitting and inspection duties are both thorough and timely as states 
experience the reality of accelerating coal mine production and 
expansion activities. As program funding shortfalls continue, states 
risk the possibility of delayed production and negative impacts to the 
environment. The situation in Colorado exemplifies this reality. From 
2002 to 2006, Colorado production increased approximately 10%. Permit 
revision activity increased nearly 50% during the same period. This 
reality has stressed existing program resources and caused the delay or 
elimination of lower priority program functions.
    Just as with the federal government, state regulatory programs are 
personnel intensive, with salaries and benefits constituting upwards of 
80 percent of total program costs. And, just like the federal 
government, state personnel costs are increasing. (See figure 2) States 
must have sufficient staff to complete permitting, inspection and 
enforcement actions needed to protect citizens of the coalfields. When 
funding falls below program needs, states may struggle to keep active 
sites free of offsite impacts, reclaim mined areas, and prevent 
injuries.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Looking again at figure 1, another disturbing trend is evident. The 
gap between the states' requests, which are based on anticipated 
expenditures, and what states are receiving in annual grants, is 
widening. The numbers in this chart are taken from OSM budget 
justification documents, OSM's website, and estimates provided to OSM 
from the states. Please note that these numbers have not been adjusted 
for inflation--which means the situation is actually more bleak. There 
is no disagreement about the need demonstrated by the states. In fact, 
in OSM's own budget justification document, OSM states that: ``the 
states have the unique capabilities and knowledge to regulate the lands 
within their borders. Providing a 50 percent match of Federal funds to 
primacy States in the form of grants results is the highest benefit and 
the lowest cost to the Federal government. If a state were to 
relinquish primacy, OSM would have to hire sufficient numbers and types 
of Federal employees to implement the program. The cost to the Federal 
government would be significantly higher.'' (Page 71 of OSM's Budget 
Justification)
    The enormity of this funding challenge will become increasingly 
clear as the federal government is faced with the dilemma of either 
securing the necessary funding for state programs or implementing those 
programs (or portions thereof) themselves--at significantly higher 
costs. In Virginia alone, for instance, the cost of OSM running the 
program would likely amount to $8-10 million based on what it currently 
costs OSM to run the comparable federal program in Tennessee. For 
perspective, in Fiscal Year 2007, Virginia has been offered $3.175 
million in federal funding to operate its program (although actual 
needs amount to $3.6 million--an overall shortfall of nearly $1 million 
when the state match is factored in). If this analysis was expanded to 
all of the 24 state programs, the overall savings to the federal 
government would be dramatic. In addition, as anticipated by SMCRA's 
framers, the states are closer to the action, are able to account for 
local conditions and circumstances and can be more responsive.
    In the end, the increasing gap between the states' anticipated 
expenditures and actual Federal funding is compounding the problem 
caused by inflation and uncontrollable costs, undermines our efforts to 
realize needed program improvements and enhancements, and jeopardizes 
our efforts to minimize the impact of coal extraction operations on 
people and the environment. For all these reasons, we have urged 
Congress to increase funding for state Title V regulatory grants in 
OSM's FY 2008 budget to $67 million, as fully documented in the states' 
estimates for actual program operating costs. A resolution adopted by 
IMCC at its recent annual meeting addressing this matter is attached to 
our testimony (Attachment No. 1). At this point, the House has approved 
an additional $2 million over the Administration's request of $60.2 
million and the Senate Appropriations Committee has approved a $6 
million increase over that request. This is very encouraging and we 
trust that in the end, Congress will approve the full $66.2 million for 
state Title V grants.
    It must be kept in mind that where there is inadequate funding to 
support state programs, some states will be faced with turning all or 
portions of their programs back to OSM (as in the case of Virginia) or, 
in other cases, will face potential lawsuits for failing to fulfill 
mandatory duties in an effective manner (as has occurred in Kentucky 
and West Virginia in the past). Of course, where a state does, in fact, 
turn all or part of its Title V program back to OSM (or if OSM forces 
this issue based on an OSM determination of ineffective state program 
implementation), the state would be ineligible for Title IV funds to 
reclaim abandoned mine lands. This would be the height of irony given 
the recent reauthorization and revitalization of the AML program.
    Speaking of the Title IV AML program, the states were greatly 
encouraged by the passage of the 2006 Amendments to SMCRA, which 
culminated over 12 years of work by the states and others to 
reauthorize this vital program. The AML program has been one of the 
hallmarks of SMCRA and has accomplished much over the years, as you 
will hear from Mr. Husted. With the infusion of new life and funding, 
the program holds out great promise for the future. The states have 
been working closely with OSM to design rules that will appropriately 
implement the provisions of the 2006 amendments and allow the states to 
put money into projects that meet the purposes and objectives of the 
new law. Among the key issues we have addressed in our discussions with 
OSM are the following:
      Use of the grant mechanism to distribute payments from 
the U.S. Treasury
      Funding for minimum program states
      Use of unappropriated state share balances for noncoal 
reclamation and the acid mine drainage set aside
      The effective date of certain payments under the new law
      Adjustments to the current grants process
We look forward to pursuing these issues in greater detail with OSM 
over the coming months. Should the Committee desire a copy of our more 
detailed comments on the draft proposed rules, please let us know.
    With regard to funding for state Title IV Abandoned Mine Land (AML) 
program grants, recent Congressional action to reauthorize Title IV of 
SMCRA has significantly changed the method by which state reclamation 
grants are funded. Beginning with FY 2008, state Title IV grants are to 
be funded primarily by permanent appropriations. The only programs that 
continue to be funded through discretionary appropriations are high-
priority federal reclamation programs, state and federal emergency 
programs, and OSM operations. As a result, the states will receive 
mandatory funding in FY 2008 of $288.4 million for AML reclamation 
work. OSM also proposes to continue its support of the Watershed 
Cooperative Agreement program in the amount of $1.6 million, a program 
we strongly endorse.
    Assuming that permanent appropriations for state AML grants do, in 
fact, become a reality (and we trust they will), there are three 
remaining discretionary funding priorities for the states: minimum 
program funding; federal emergency programs; and Clean Streams funding. 
With respect to minimum program states, under the new funding formula 
provided by OSM, all of the states and tribes will receive immediate 
funding increases except for minimum program states. Under OSM's 
interpretation of the 2006 Amendments, those programs remain stagnant 
for the next two fiscal years at $1.5 million, a level of funding that 
greatly inhibits the ability of these states to accomplish much in the 
way of substantive AML work. Many of these states have pending high 
priority AML projects ``on the shelf'' that cost several million 
dollars. The challenge for these states is putting together enough 
moneys to address these larger projects given minimum funding. It is 
both unfair and inappropriate for these states to have to wait another 
two years to receive any funding increases when they are the states 
most in need of AML moneys. We have therefore urged Congress to fund 
these states at the statutorily authorized level of $3 million in FY 
2008 so as to level the playing field and allow these states to get on 
with the critical AML projects that await funding.
    We have also urged Congress to approve continued funding for 
emergency programs in those states that have not assumed these 
programs. Funding the OSM emergency program should be a top priority 
for OSM's discretionary spending. This funding has allowed OSM to 
address the unanticipated AML emergencies that inevitably occur each 
year in states without state-administered emergency programs. Without 
this funding, it will be up to the states to address the emergencies 
that occur. In states that have federally-operated emergency programs, 
the state AML programs are not structured or staffed to move quickly to 
address these dangers and safeguard the coalfield citizens whose lives 
and property are threatened by these unforeseen and often debilitating 
events. Finally, we have urged Congress to approve continued funding 
for the Clean Streams Initiative. OSM has chosen to eliminate funding 
for this worthwhile program in FY 2008. We believe this is a mistake. 
Significant environmental restoration of impacted streams and rivers 
has been accomplished pursuant to this program, to say nothing of the 
goodwill that the program has engendered among local communities and 
watershed groups. For the small investment of money that is 
appropriated for this program each year (approximately $3 million), the 
return is huge.
    Future challenges for the AML program include the perpetual 
operation and maintenance costs associated with acid mine drainage 
treatment; assuring that maximum flexibility is provided to the states 
to determine their respective AML project priorities; and enhancing 
opportunities for economic development (including recreation and 
tourism) in depressed areas of the coalfields.
    As mentioned earlier, one of OSM's primary missions under the 
Surface Mining Act is evaluating the states' administration of their 
programs, otherwise known as oversight. This process has undergone a 
significant metamorphosis, the result of which has been a more credible 
and useful program for informing Congress and others about the status 
of state program administration. The first attempt at designing a 
meaningful oversight program in the mid-1980's was merely an exercise 
in data gathering or output measurement. We were concerned then with 
numbers of inspections, numbers of permit reviews and numbers of 
enforcement actions. OSM also tended to look behind state permitting 
decisions to determine whether OSM would have handled them the same way 
the states did. This type of ``second guessing'' generated significant 
conflict and even resentment between the states and OSM. In addition, 
the numbers that were collected into oversight reports told us little 
or nothing about whether the objectives of SMCRA were being met (i.e. 
what was happening on the ground? how effectively were state programs 
actually protecting the environment? how well was the public being 
protected and how effectively were citizens being served? how well were 
we working together as state and federal governments in implementing 
the purposes of SMCRA?).
    Following an effort by OSM and the states in the late 1980's to 
fashion a more effective state program evaluation process based on a 
goal-oriented or results-oriented oversight policy and another review 
of the process in the mid-1990's, a performance measurement approach 
was adopted, based in large part on the requirements of the Government 
Performance and Results Act (GPRA). The new outcome indicators now 
focus on the following: the percentage of coal mining sites free of 
off-site impacts; the percentage of mined acreage that is reclaimed 
(i.e. that meets the bond release requirements for the various phases 
of reclamation); and the number of federal, private and tribal land and 
surface water acres reclaimed or mitigated from the effects of natural 
resource degradation from past coal mining, including stream 
restoration, water quality improvement, and correction of conditions 
threatening public health or safety. These new measurements are 
intended to provide Congress and others with a better picture of how 
well SMCRA is working and how well the states are doing in protecting 
the public and the environment pursuant to their federally approved 
programs. Much of this can also be told in pictures of reclaimed mined 
areas like those shown in our exhibits, many of which reflect winners 
of IMCC's and OSM's national reclamation awards. Effective program 
implementation by the states and compliance by the coal industry are 
resulting in the reclamation and restoration of both active and 
abandoned sites that meet the objectives of SMCRA and benefit both 
people and the environment.
    Over the past twenty years, state regulatory programs have improved 
to the point that implementation is highly successful. Due to this 
success, the overall programmatic emphasis under SMCRA has shifted from 
structural and administrative issues to specific technical issues that 
are encountered as reclamation technology and science are advanced. 
These issues tend to manifest themselves as environmental challenges 
unique to particular regions or states, many of which must be resolved 
during the permitting process. They may also arise as a result of state 
inspections at mining sites. In any event, due to constraints on 
existing state resources, states may be unable to undertake the type of 
technical analyses that attend these issues. This is where OSM serves a 
valuable support mechanism for the states (as anticipated by Section 
705 of SMCRA) by providing technical assistance. In addition to 
meaningful and properly focused assistance, the states also look to 
OSM's Technical Innovation and Professional Services (TIPS) program. 
This has been one of OSM's most valuable and effective initiatives and 
serves as the cornerstone of the states' computer capability, 
particularly now that many states are utilizing electronic permitting. 
We trust that OSM and Congress will continue their support for TIPS and 
for the hardware and software upgrades that are required to assure the 
system's integrity and usefulness. TIPS training is also critical.
    One of the key successes of SMCRA over the years has been its 
training program. Through a combination of both state and federal 
agency instructors, OSM's National Technical Training Program (NTTP) 
assures that newly hired state and federal employees, especially 
inspectors and permit writers, receive adequate and credible training 
both on basic elements of program implementation and on cutting-edge 
technical and policy subjects. The NTTP has also allowed more seasoned 
employees to fine tune their skills and update their knowledge on 
important topics. OSM's training program is especially important for 
smaller states that do not otherwise have access to such resources. In 
addition to NTTP classes, IMCC (working in cooperation with NTTP) has 
developed and facilitated a series of benchmarking workshops for both 
state and federal agency personnel that has allowed them to improve and 
enhance their respective regulatory programs and skills in such areas 
as blasting, subsidence, bonding, underground mine mapping, and 
permitting related to hydrologic balance. OSM has also sponsored 
several interactive forums on a variety of subjects of mutual interest 
to the states and we urge the agency to continue this practice, again 
with state input. All of these training components will become 
increasingly more critical as OSM and the states face a retiring 
workforce and the attendant succession planning that follows.
    There have been other notable successes in SMCRA's implementation, 
in both the regulatory and policy areas. The states have worked 
cooperatively with OSM and others to address acid mine drainage issues 
through the Acid Drainage Technology Initiative, which focuses on 
prediction, prevention, avoidance, remediation and treatment. Again 
working cooperatively with OSM, the states have made significant 
strides in advancing reforestation efforts on reclaimed lands, 
particularly through the Appalachian Regional Reforestation Initiative. 
Through a partnership among the states, OSM and the Environmental 
Protection Agency (EPA), we have also seen major strides in the 
remining arena, where thousands of acres of abandoned mine lands have 
been restored as part of active mining operations, thereby saving 
valuable AML Trust Fund dollars and returning the land to productive 
use. We have also been working with EPA and OSM to revisit the current 
effluent limitation for manganese so as to reduce or prevent the 
adverse effects and potential hazards arising from some of the 
treatment technologies related to control of manganese.
    In its 1990 monograph on ``Environmental Regulation of Coal Mining: 
SMCRA's Second Decade'', the Environmental Policy Institute identified 
and commented on several challenges facing the states and OSM, as 
follows:
        The issues facing regulators today are more difficult than they 
        were in 1977. Many of the easier and more blatant problems have 
        been addressed [such as the two acre exemption]....The 
        regulatory issues today include the prevention of hydrologic 
        damage, the control of subsidence and subsidence damage, the 
        establishment of adequate reclamation bond amounts, the use of 
        permit-based enforcement, and the improvement of federal 
        oversight. Also of concern is the massive shortfall in the 
        federal fund meant to reclaim areas abandoned prior to 1977 
        without reclamation. [Page3]
    Throughout SMCRA's third decade, many of these issues have been 
addressed and resolved. Congress has addressed the shortfall of moneys 
in the AML Trust Fund with the 2006 Amendments to SMCRA and OSM and the 
states are well on their way to implementing those adjustments and 
putting more money on the ground to restore AML sites. Federal 
oversight (and the attendant state/federal relationship under SMCRA) 
has advanced by significant degrees and is no longer the flashpoint 
that it once was. Through advances in electronic permitting and the use 
of tools available through OSM's TIPS program, state permitting actions 
are timely, comprehensive and accurate, thereby insuring more effective 
compliance with the law.
    That being said, given the nature and scope of today's mining and 
reclamation operations and attendant environmental impacts, we continue 
to face challenges as regulatory authorities under SMCRA. A few 
examples follow:
      Bonding--one of the larger challenges concerning the 
bonding provisions of SMCRA is with regard to post closure issues. 
While SMCRA originally envisioned the bond as a guarantee of 
performance during mining, it did not anticipate the challenges 
associated with postmining concerns such as long-term treatment 
associated with acid mine drainage or long-term impacts from 
subsidence. For instance, OSM's current rules on bonding require that 
the bond amount be adjusted for potential subsidence damage repairs. 
However, nothing is said about how the bond release procedure will 
apply in these situations. The result is that surety companies are 
reluctant to write bonds for reclamation because of the long term 
nature and unknown extent of the liability. The states have been 
working with OSM to address this matter through the use of other 
financial assurance mechanisms, such as trust funds. There are also 
issues associated with bond release in general. Given that the 
procedures attending release are so cumbersome and expensive, coal 
operators simply choose not to apply for them. This further impacts the 
availability of bond capacity in the market and results in unnecessary 
expenses for states related to continued inspection and enforcement on 
these essentially completed reclamation sites.
      Prime farmland--the requirements related to proof of 
productivity (five year minimum) prior to termination of jurisdiction 
and before the land can be returned to the owner are cumbersome. The 
mid-continent states are currently undertaking research through a major 
Midwestern agronomy/soil science university to determine proper testing 
techniques to ensure soil capabilities are present, in the hope that an 
alternative method for demonstrating productivity can be attained, thus 
returning land much sooner back to the owner of record.
      AVS--over the past twenty years, the states have worked 
diligently with OSM to develop the Applicant/Violator System (AVS), 
which assists us in implementing section 510(c) of SMCRA, particularly 
the issuance of permits. Early in the development of AVS, the states 
focused on designing a system that would allow them to identify and 
block violators and other scofflaws without bogging down the database 
with useless or unproductive information. While we have made progress 
in this regard, we continue to examine ways to improve and enhance 
overall system effectiveness. For example, a critical aspect of AVS is 
the rules that define ownership and control; permit and application 
information requirements; and the transfer, assignment or sale of 
permit rights. These rules have been under a constant state of flux 
since their original promulgation in 1988 and a recent OSM rulemaking 
attempts to bring closure to several key issues that remain unresolved 
or problematic.
      Underground mine mapping--another continuing challenge 
that we face concerns accurate and readily available underground mine 
maps, which are essential for protecting the public, the environment 
and infrastructure from the threats posed by unknown underground mines. 
Events such as the Quecreek incident in Pennsylvania and the Martin 
County Coal Company impoundment failure in Kentucky were high profile 
demonstrations of the kinds of incidents that can occur when mine maps 
are inaccurate or unavailable. IMCC has sponsored a series of national 
and regional benchmarking workshops that have focused on the 
collection, handling, scanning, georeferencing and validation of mine 
maps. While the expertise and technology is available to tackle this 
issue and accomplish these tasks, our biggest challenge is the lack of 
funding for personnel, hardware, software upgrades and database 
development to move the initiative forward.
    In each of these instances, and in others such as subsidence 
control, blasting and hydrologic protection, the states are actively 
engaged in seeking technical solutions, as well as regulatory program 
enhancements, that will fully and adequately address concerns 
associated with these issues. As an example, over the past several 
years, IMCC has sponsored benchmarking workshops on subsidence impacts, 
blasting, financial assurance, electronic permitting and hydrologic 
balance, all of which have provided state and federal regulators with 
an opportunity to examine these issues in detail with an eye toward 
regulatory program improvements. IMCC is currently preparing for its 
next workshop on surface and ground water database development and use 
as part of the permitting process. The overall goal is to continually 
assess and enhance our performance as regulatory authorities in an 
effort to achieve ever higher levels of program effectiveness.
    Much progress has been made over the past 30 years to accomplish 
the purposes and objectives of SMCRA. From our perspective, the basic 
organization of OSM is working well. At this point of SMCRA's 
implementation, neither the states nor OSM are dealing with the same 
types of issues or problems that attended the early years of program 
formation and administration. We have moved away from questions of 
adequate state program components and state implementation techniques 
to more substantive issues associated with technical, on-the-ground 
problems or with thorny legal and policy questions associated with 
interpretation of our programs. We therefore believe that it is most 
relevant for OSM to focus its energies and resources on assisting and 
supporting the states through adequate funding for state grants, sound 
technical and legal assistance, and opportunities for the states to 
actively participate in the agency's excellent training program. The 
overall result will be less federal intrusion in the states' 
administration of their programs, a concomitant enhancement of the 
federal/state partnership, and better on-the-ground performance by the 
regulated industry.
    We appreciate the opportunity to present this testimony today and 
welcome the opportunity to work with your Committee, Mr. Chairman, to 
insure the effective implementation of SMCRA in the 21st century.
                            attachment no. 1
                               Resolution
                  interstate mining compact commission
BE IT KNOWN THAT:
    WHEREAS, the Surface Mining Control and Reclamation Act (SMCRA) 
provides for the assumption of authority by state governments to 
regulate surface coal mining and reclamation operations within their 
borders following approval by the federal Office of Surface Mining 
(OSM) of state programs; and
    WHEREAS, section 705 of SMCRA requires the federal government to 
provide annual grants up to 50 percent for costs incurred by the states 
for the purpose of administering and enforcing their approved 
regulatory programs; and
    WHEREAS, over the past 25 years the states have been led to 
believe, based on actual practice and OSM policy, that the federal 
government would base annual grants on the states' estimated costs for 
implementing their regulatory programs, pursuant to the principles of 
primacy and partnership embedded in SMCRA; and
    WHEREAS, in recent years federal funding for state regulatory 
grants has stagnated, resulting in a $10 million gap between the 
states' estimated program costs and actual grant funding; and
    WHEREAS, this debilitating funding trend is severely impacting the 
states' ability to run efficient and effective regulatory programs that 
meet the purposes and objectives of SMCRA, with some states having to 
overmatch federal grants dollars and other states being forced to 
seriously consider turning all or portions of their programs back to 
the federal government; and
    WHEREAS, the costs for the federal government to operate regulatory 
programs in primacy states will, by OSM's own admission, be 
significantly higher than what the states currently spend; and
    WHEREAS, there is strong, widespread support for increases in state 
regulatory grants from both the regulated industry and citizen groups 
so as to preserve the quality and integrity of state programs;
NOW THEREFORE BE IT RESOLVED:
    That the Interstate Mining Compact Commission (IMCC) strongly urges 
Congress, the Office of Management and Budget, the Department of the 
Interior and OSM to shore up and support state regulatory programs 
through full funding of state grants so that states can effectively 
meet the objectives and mandates of SMCRA; and
BE IT FURTHER RESOLVED:
    That IMCC specifically requests that funding for state regulatory 
grants in OSM's proposed FY 2008 budget be increased by $7 million for 
a total of $67 million.
    Issued this 2nd day of May, 2007

ATTEST:

_________
Executive Director
                                 ______
                                 
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July 31, 2007

The Honorable Nick J. Rahall II
Chairman
Committee on Natural Resources
U.S. House of Representatives
Room 1324 LHOB
Washington, DC 20515

Dear Mr. Chairman:

    DurIng the course of an oversight hearing on the 30th Anniversary 
of the Surface Mining Control and Reclamation Act (SMCRA) on July 25, 
several allegations were leveled at the States of Virginia, Indiana and 
Illinois concerning implementation of various aspects of their 
regulatory programs. You specifically requested that I follow up on a 
situation in Virginia where a citizen had filed a complaint against A 
and G Coal Company for mining without a permit. There were also 
allegations concerning groundwater protection standards and adequate 
public participation in the states of Indiana and Illinois. I contacted 
each of these states and they have provided the following information 
regarding the allegations raised during the hearing.
    Virginia--in his testimony, Mr. Walt Morris alleged that ``the 
state regulatory authority in Virginia continues to refuse to 
investigate citizen allegations that a coal operator is conducting 
mining operations without a permit--on the incredible theory that the 
state has no obligation to inspect because it has not issued a permit 
for the mine.'' Mr. Morris went on to allege that ``OSM's Virginia 
field office continues to ignore a citizen request for inspection and 
enforcement in the same matter, even though the time for responding 
under OSM's regulations has long since expired.'' Since the hearing on 
July 25, Mr. Morris has sent a formal apology to OSM's Virginia field 
office indicating that, indeed, a timely response by OSM to the citizen 
request for inspection and enforcement had been made. What he fails to 
mention is that OSM also found that Virginia's response to a Federal 
Ten Day Notice regarding the matter was appropriate and that Virginia 
has ``shown good cause for not taking enforcement actions in this 
case.'' As indicated in the attached documents, it is very clear that 
all of the activity at the alleged mining site was related to logging 
operations, oil and gas well development activity and two completed and 
fully reclaimed coal exploration sites. Because of his lack of first 
hand knowledge concerning the situation at the site, Mr. Morris misled 
the Committee concerning activity at the site, the citizen complaint, 
and Virginia's and OSM's handling of the complaint. Mr. Morris also 
impugned the integrity of the Virginia program and its handling of this 
matter. The Virginia Department of Mines, Minerals and Energy makes 
extraordinary efforts to work with and assist its citizens and has 
received national recognition for those efforts. Unfounded allegations 
such as those leveled by Mr. Morris do little to support the excellent 
work being done by the states under SMCRA. We believe that he not only 
owes OSM an apology, but the Commonwealth of Virginia as well.
    Indiana--in his testimony, Mr. Brian Wright made several inaccurate 
and misleading statements regarding the Indiana regulatory program, 
particularly with respect to protection of groundwater resources and 
mine placement of coal combustion wastes. An explanation from the state 
of Indiana addressing these matters is attached to this letter.
    Illinois--in his statement, Mr. Wright also mischaracterized or 
made false accusations regarding several aspects of the Illinois 
program, including groundwater protection standards, longwall mining 
and subsidence protection requirements, lands unsuitable petitions and 
citizen participation. An explanation from the state of Illinois 
addressing each of these matters is attached.
    Pennsylvania--Mr. Wright also mentioned that the Commonwealth of 
Pennsylvania is preparing a report on coal combustion waste. To 
clarify, no such report is in the works. What Pennsylvania is 
developing are updated and expanded policy guidelines regarding mine 
placement of coal combustion waste in light of the NRC report. Once 
prepared, these guidelines will be available for public review and 
comment.
    Thank you for the opportunity to address and clarify these 
inaccuracies, misrepresentations and allegations. Many of them are very 
serious and we trust that the record will reflect the corrections and 
explanations offered by the states. Should you have any questions or 
require additional information, please do not hesitate to contact me. 
And once again, our sincere appreciation for holding the oversight 
hearing and for the opportunity to participate.

Sincerely,

Gregory E. Conrad
Executive Director

Attachments
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    The Indiana Department of Natural Resources, Division of 
Reclamation (DOR) is the regulatory authority for coal mining in the 
State of Indiana. We take issue with the manner in which our program 
was mischaracterized in the testimony of the Hoosier Environmental 
Council on July 25, 2007 before the House Natural Resources Committee 
concerning the implementation of the Surface Mining Control and 
Reclamation Act of 1977. The testimony contained inaccuracies 
concerning Indiana's coal regulatory program and its alleged lack of 
adequate protection for groundwater resources and the public, along 
with other misconceptions. We appreciate the opportunity to clarify 
these matters.
    Staff of the DoR include hydrogeologists with decades of experience 
in coal mine regulation. Not only do regulations contain numerous and 
extensive hydrology related requirements but, as will be discussed 
below, the State of Indiana has a groundwater standards rule which has 
been implemented within Indiana's surface coal mining regulations. 
Contrary to some testimony, the DoR's regulatory framework and 
implementation of the surface coal mining regulations does provide 
adequate protection and safeguards to citizenry and the environment 
living in and near the coalfields of Indiana.
    As discussed in the Hoosier Environmental Council testimony, 
regulations require that coal mines minimize disturbance of the 
hydrologic balance within the permit and adjacent areas, prevent 
material damage to the hydrologic balance outside the permit area, to 
assure the protection or replacement of water rights, and to support 
approved post mining land uses, 30 CFR 816.41. It was stated these 
regulations have been applied inadequately to protect the water of 
coalfield residents. In actuality, the groundwater standards 
regulations within Indiana's surface coal mining regulations were 
developed and implemented on the precise premise that requires the 
state to follow the federal law and regulations as it pertains to 
minimizing impacts within the permit area and preventing material 
damage outside the permit area. Coal mining operations must implement 
groundwater protection measures including proper handling, treatment, 
and disposal of any coal refuse and any acid and/or toxic forming 
earthen materials. Further, specific protective measures are employed 
such as proper sealing of boreholes, auger holes, etc....,as well as 
special handling provisions to prevent formation of acid mine drainage 
(measures to minimize disturbance of the hydrologic balance within the 
permit and adjacent areas) and to ensure that mineralization of the 
water which recharges within the spoil mass does not migrate off-site 
and adversely impact residential wells or groundwater resources 
(prevent material damage to the hydrologic balance outside the permit 
area).
    Indiana's groundwater standards were developed by the Water 
Pollution Control Board of the Indiana Department of Environmental 
Management as a part of a public process including a workgroup made up 
of academia, industries, the public, environmental groups, and state 
regulatory personnel. An outcome of that regulation was a requirement 
that other state regulatory authorities would develop regulations 
within their frameworks to implement the groundwater standards. That is 
exactly what the DoR did with the groundwater standards promulgated for 
ensuring protection at coal mine sites. The surface coal mining 
regulations were developed with input from the Indiana Department of 
Environmental Management who endorsed the final regulations (see report 
at end). It should be noted that the groundwater standards are state 
regulations above and beyond the federal Surface Mining Control and 
Reclamation Act (SMCRA). Federal SMCRA regulations do not contain 
specific groundwater standards. Rather, the states develop and 
implement groundwater standards by choice. Indiana chose to provide 
protections, beyond that required within federal SMCRA, to groundwater 
resources and groundwater users by not only ensuring compliance with 
federal SMCRA but also to provide additional protections through state 
groundwater standards regulation. An Informational Bulletin, adopted in 
May 2003, explaining the rationale behind this regulation follows the 
narrative at the end of this document. Both of these were approved at a 
public meeting by the DoR's ultimate state authority, the Natural 
Resources Commission. The public testimony at this meeting is included 
following the policy document.
    Another inaccuracy to the testimony is the claim that Indiana does 
not characterize pre-mine hydrologic conditions. Each application for a 
mining permit contains groundwater quantity and quality information 
gathered over many months in order to characterize any seasonal 
variation. Moreover, aquifer testing (contrary to the claims in the 
written testimony) is conducted to determine hydraulic characteristics 
such as permeability and rate of flow. Groundwater availability in the 
coal region of Indiana is typically very low with exception of those 
areas along major river systems. The rock overlying the coal is simply 
not conducive to large amounts of water movement and thus the pits 
during mining are most often quite dry. For this reason, the citizens 
using water wells typically drill them to depths ranging up to 300 feet 
and normally much deeper than the lowest coal seam to be mined by 
surface mining techniques. The reason citizens construct wells in this 
fashion is due to the lack of a reliable, shallow groundwater source, 
thus they take advantage of a deep well with adequate storage capacity. 
Monitoring well installations for the purpose of monitoring aquifer 
characteristics (both quantity and quality) are developed in a similar 
fashion. Should wells in an area be developed in a single geologic unit 
then monitoring wells are installed in a single unit. But, typically 
monitoring wells are constructed over the entire bedrock interval due 
to the fact that is the manner most citizen wells are installed.
    Indiana's surface mining regulations require the replacement of the 
water supply in the unlikely event of interruption or adverse effects 
to a user of groundwater. Replacement can occur by many methods 
including hook ups to a municipal water supply, drilling a new well, or 
any other method acceptable that will provide an equivalent water 
delivery system. The permittee of the mining operation must also 
provide payment of operational and maintenance costs in excess of 
customary and reasonable delivery costs for premining water supplies.
    Hoosier Environmental Council testimony also indicates that Indiana 
rules eliminate any incentive to minimize impacts to groundwater 
quality. Indiana's statute and regulations provide numerous hydrology 
related operational and performance standards that must be adhered to 
or face enforcement action and potential permit revocation and 
exclusion from future mining nationally which is certainly incentive to 
comply.
    One area of agreement with the Hoosier Environmental Council 
testimony is in regard to the statement that ``It would be unrealistic 
to assume ground water in mined areas will remain in pristine 
condition''. As was mentioned by an industry representative in the oral 
testimony, the mineralization of groundwater is an unavoidable result 
of any surface mining due to the breaking of rock and the additional 
surface area available for groundwater to contact. These constituents 
were present in the rock prior to mining. It would be unrealistic to 
place a qualitative, numeric standard within the spoil or refuse areas 
and regulate a coal mine operator with unreasonable or potentially 
unattainable expectations. A mine operator can comply fully with all 
aspects of law and regulation and mineralization of groundwater will 
still occur. To what extent is dependent on conditions beyond the 
control of the mine operator. For that reason, the rule writers of 
SMCRA thirty years ago set forth regulations calling for minimization 
within the mined area and prevention of material damage beyond. We 
believe these provisions were put in place by a group of very wise 
individuals with great understanding of groundwater issues related to 
coal mining. Indiana's regulations, both for coal mining and 
groundwater standards concerning coal mines, are based on this exact 
premise and do provide adequate protection to the citizens and the 
environment of the coal region of Indiana.
    Another issue Indiana wishes to clarify is that of the volume of 
coal combustion wastes permitted for disposal as described by the 
Hoosier Environmental Council testimony. It was stated that 125 million 
tons of coal combustion waste has been approved for disposal in Indiana 
mines. This figure has been frequently misrepresented. In reality, 
numerous coal combustion waste disposal applications contain a request 
to dispose of the same waste from the same generator. Sometimes a part 
of the bidding for a coal contract with a major utility contains a 
provision to return a quantity of coal combustion waste to the mine 
site. Numerous applications contained a request to dispose the same 
material. This has been explained many times to the Hoosier 
Environmental Council and others, but the Hoosier Environmental Council 
continues to misrepresent the actual amount of material that could be 
disposed or has been disposed. The State of Indiana generates 5 to 7 
million tons of coal combustion waste annually. Disposal at coal mines 
has been permissible since 1988. In that 19 years period the State of 
Indiana has produced well over 100 million tons while less than 9 
million tons has actually been disposed at Indiana coal mines.

NATURAL RESOURCES COMMISSION

Information Bulletin #38 (First Amendment)

SUBJECT: Implementation of the Indiana Ground Water Quality Standards 
at Coal Mines Regulated under IC 14-34
I. HISTORY
    A technical amendment is made to this information bulletin adding 
the Indiana Register publication citation for LSA Document #02-104(F) 
to facilitate historical research of amendments to 312 IAC 25. This 
document supersedes Information Bulletin #38 published at 27 IR 1665.
II. PURPOSE
    The purpose of this nonrule policy is to provide guidance and added 
explanation of rules adopted by the Natural Resources Commission for 
implementation by the Department of Natural Resources, Division of 
Reclamation. These rules were given final adoption by the Commission on 
May 20, 2003, as amendments to 312 IAC 25 and are more particularly 
described as Legislative Services Document #02-104(F) (26 IR 3860). 
They help implement the Indiana ground water standards established 
through the rules adopted by the Water Pollution Control Board that 
became effective March 6, 2002.
    As required by IC 13-18-17-5, an agency with jurisdiction over an 
activity must adopt rules to apply the ground water quality standards 
adopted by the Water Pollution Control Board. As described in 327 IAC 
2-11-2(b), when adopting rules an agency shall ``...ensure that 
facilities, practices, and activities are designed and managed to 
eliminate or minimize, to the extent feasible, potential adverse 
impacts to the existing ground water quality by applying preventative 
action levels, design standards, a monitoring framework, or other 
regulatory methods.'' The amendments to 312 IAC 25 were developed in 
this context.
    The amendments to 312 IAC 25 assist in the implementation of IC 14-
34 (the Indiana Surface Mining Control and Reclamation Act or ``Indiana 
SMCRA'') governing surface coal mining and reclamation activities. The 
rules contain criteria for ground water classification, monitoring, and 
compliance that apply at sites regulated under Indiana SMCRA. This 
information bulletin has been developed to provide information 
concerning procedures and issues regarding the implementation of the 
rule amendments.
    The following sections include a discussion of the background for 
the rulemaking, a section that describes the mines and associated 
activities that are subject to the rules, ground water classification, 
standards to be met, the establishment of a ground water management 
zone (or ``GMZ''), the location at which the standards must be met, 
requirements for additional monitoring wells to serve as early 
detection wells, and the plans or actions that must occur if a standard 
is exceeded.
III. REGULATORY FRAMEWORK
    The rules and their interpretations were developed within the 
context of existing state and federal mandates concerning coal mining. 
The existing program requires compliance with state water quality 
standards (IC 14-34-10-2(13), 312 IAC 25-6-12(c), and 312 IAC 25-6-
76(c)). Coal mine operations are required to minimize disturbances to 
the prevailing hydrologic balance on the mine site and associated off 
site areas (IC 14-34-10-2(13)). Further, surface and underground coal 
mining activities must be planned, conducted, and designed to minimize 
changes to the prevailing hydrologic balance in the permit area and 
adjacent areas, to prevent material damage to the hydrologic balance 
outside the permit area, in order to prevent long term adverse changes 
in that balance that could result from those activities (312 IAC 25-6-
12(a) and 312 IAC 25-6-76(a)). It is clear that this language 
recognizes the possibility of impacts beyond the permitted area. It is 
also clear that any such impacts, should they occur, must be minimized 
and must not materially damage the hydrologic balance outside the 
permit boundaries.
    Indiana SMCRA and rules developed under Indiana SMCRA recognize the 
potential for impacts to occur beyond the permit area or to 
uncontrolled properties within the permit area. Existing standards 
already require replacement of any water supply when used for any 
legitimate purpose is diminished, contaminated, or interrupted by 
mining activities. The rules do not grant anyone a right to cause 
impacts to adjacent or uncontrolled properties. Rather, Indiana SMCRA 
and rules developed under Indiana SMCRA recognize that a permittee may 
follow its approved plan, comply with all legal mandates, conduct 
operations in accordance with best management practices, and yet still 
have an impact on ground water off-site. Wide-scale off-site impacts in 
Indiana are very uncommon and, consequently, the rule amendments are 
not being developed to correct a problem. The rule amendments require 
that a specific standard be met at a specific distance or location.
    Although impacts to water wells off the permitted area do 
occasionally occur, existing standards at 312 IAC 25-4-33, 312 IAC 25-
4-78, 312 IAC 25-6-25, and 312 IAC 25-6-88 adequately address these 
problems. When an impact does occur, an alternate source of water is 
provided by the permittee. Moreover, the rule amendments in LSA 
Document #02-104(F) (26 IR 3860) do not impart a permittee with any 
additional rights to intentionally or unintentionally cause impacts to 
adjacent areas and uncontrolled properties. The rights of property 
owners to take action against a permittee as a result of an impact to 
their property, beyond requirements imposed by these rule amendments, 
remain unaffected.
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312060445NRA Page 1
IV. APPLICABILITY
    The rule amendments apply to coal extraction areas where surface 
and underground coal mining and reclamation permits are issued under 
Indiana SMCRA. For the purposes of the rule amendments, coal extraction 
areas include augering, coal processing, coal processing waste 
disposal, spoil deposition, or underground development waste deposition 
that occurs after the effective date of the amendments or on which a 
disposal activity subject to IC 13-19-3-3 has occurred and the area is 
not fully released from the performance bond required by IC 14-34-6.
V. GROUND WATER CLASSIFICATION
    Ground water must be classified according to 327 IAC 2-11-4 to 
determine the appropriate narrative and numeric criteria and level of 
protection that applies to the ground water. The classification of the 
ground water at the boundary of the GMZ is drinking water class unless 
it has been classified as limited class ground water or impaired class 
drinking water by 327 IAC 2-11. It should be noted, the limited class 
ground water classified according to 327 IAC 2-11-4(d) must meet the 
requirements found at 327 IAC 2-11-7(b), which include only the 
constituent concentrations attributable to coal mining, not those 
associated with the disposal of coal combustion waste. See 327 IAC 2-
11-5 through 327 IAC 2-11-8 for further information on the criteria for 
all ground water, drinking water class ground water, limited class 
ground water, and impaired drinking water class ground water.
    Should a permittee wish to propose a reclassification of ground 
water, the IDEM Ground Water Section should be contacted to discuss the 
IDEM procedures, specific information requirements, and the criteria 
for limited class ground water and impaired drinking water class ground 
water.
VI. STANDARDS
    Surface and underground coal mining and reclamation operations must 
be planned and conducted to prevent violations of the ground water 
quality standards found in 327 IAC 2-11. Mining and reclamation 
operations are to be performed to minimize the effects of mining and 
reclamation on the hydrologic balance in the permit area and adjacent 
areas and to prevent material damage to the hydrologic balance outside 
the permit area. Once the ground water has been classified, the 
monitoring framework has been established, and a plan has been included 
in the permit application to indicate the location the standards will 
be met, a demonstration including the measures that will be taken to 
ensure the protection of the hydrologic balance is to be made.
    The standards found in 327 IAC 2-11 are point specific. The rules 
require that a specific standard be met at a specific distance or 
location. An exceedance at one point, even if that point is outside the 
permitted area, may not constitute material damage to the hydrologic 
balance, a concept that by definition at 312 IAC 25-1-67 involves a 
hydrologic system existing in an area. Both the rules and this 
information bulletin have been developed in this context.
VII. GROUND WATER MANAGEMENT ZONE (the ``GMZ'')
    The point of compliance in 327 IAC 2-11 is the boundary of the 
ground water management zone (``GMZ''). The standards established by 
327 IAC 2-11 must be met at and beyond the GMZ as established in 312 
IAC 25-6-12.5(d) and 312 IAC 25-6-76.5(d). The boundary of the GMZ will 
be established during initial permit review and may be modified in 
response to changes in operations plans or alterations of permit 
boundaries throughout the life of the mine. Ground water monitoring 
plans included in the permit application will provide the manner in 
which water quality at the GMZ boundary will be measured. The location 
of the boundary of the GMZ will be based on the location of drinking 
water wells or a distance from mining related activities identified in 
subdivision (1) of 312 IAC 25-6-12.5(d) or 312 IAC 25-6-76.5(d) of the 
rules. In general, the GMZ boundary will be established three hundred 
(300) feet from the edge of:
    (1)  coal extraction areas;
    (2)  coal mine processing waste disposal sites if not within coal 
extraction areas;
    (3)  areas where coal is extracted by auger mining methods;
    (4)  locations at which coal is crushed, washed, screened, stored, 
and loaded at or near the mine site unless the locations are within the 
coal extraction areas; or
    (5)  spoil deposition areas.
    An exception to this condition will occur when the permit boundary 
or the extent of property controlled by the permittee is located at a 
distance less than three hundred (300) feet from areas requiring a GMZ. 
While the standards will apply at the boundary of the GMZ, ground water 
monitoring wells will be required at locations within the control of 
the mining company that are within the GMZ (i.e., less than 300 feet 
from the mining activities that define the GMZ). To minimize confusion, 
DOR will refer to those wells established within the GMZ as 
``interception wells.'' Likewise, in the event a drinking water well is 
located within three hundred (300) feet of areas requiring a GMZ, and 
there is a likelihood of impact, a monitoring well (interception well) 
may be required between the drinking water well or wells and the 
activities that define the GMZ.
    Indiana Register Date: Jul 26, 2007 2:24:30PM EDT DIN: 20061011-IR-
312060445NRA Page 2
    For underground mines, the GMZ boundary will normally be 
established at a distance of three hundred (300) feet from the edge of 
the area containing the surface effects of the mining operation. These 
include:
    (1)  coal mine processing waste disposal sites;
    (2)  locations at which coal is crushed, washed, screened, stored, 
and loaded at or near the mine site; or
    (3)  underground development waste and spoil deposition areas.
    As with the surface mines, a monitoring well will be required 
within the GMZ when the GMZ boundary falls on uncontrolled properties. 
When coal refuse is disposed in the underground works, the GMZ boundary 
will be modified to incorporate any area in which this activity 
occurred.
    Posted: 10/11/2006 by Legislative Services Agency
    An html version of this document.
    Indiana Register Date: Jul 26,2007 2:24:30PM EDT DIN: 20061011-IR-
312060445NRA Page 3

Consideration of Recommendation of Hearing Officer to the Natural 
Resources Commission with Report of Public Hearing and Written Public 
Comments, Responses by the Division of Reclamation, and Presentation 
for Final Adoption of SMCRA Water Quality Amendments (312 IAC 25) to 
Implement 327 IAC 2; Administrative Cause Number 02-160L (LSA #02-
104(F))

    Stephen Lucas, Hearing Officer, introduced this item. He explained 
that this was a proposition for an important set of rule proposals. ``I 
think they are all important, but this one is perhaps more noteworthy 
than some and drew more attention than some.'' Lucas stated that, as 
Hearing Officer, he did not make certain recommendations, but the 
``parties did a particularly good of expressing their perspectives and 
providing important information on the rule proposal. I do want to 
publicly thank those who participated in the very helpful way in which 
they worked with me as the hearing officer. This is the kind of issue 
that could be very difficult and unpleasant, because feelings are 
sometimes are very strong. But in this instance the staff, the public, 
and the regulated community were extremely helpful in delineating this 
report.'' Lucas then deferred to Marvin Ellis of the Division of 
Reclamation.
    Marvin Ellis, Hydro-geologist in the Technical Services Section of 
the Division of Reclamation, addressed the Commission. Ellis explained 
that the rules would amend 312 IAC 25, the Indiana Surface Mining 
Control and Reclamation Act. Ellis stated that the rule amendments 
implement the ground water quality standards established by IDEM's 
Water Pollution Control Board and include classification criteria for 
ground water, numeric standards and narrative criteria that must be 
met, and ground water management zones.
    Ellis explained that the Indiana coal mining and land reclamation 
programs already include extensive groundwater protection measures, and 
said that they are being updated to incorporate these added provisions. 
He said the amendments do not replace existing program criteria, but 
further define and strengthen the coal and land restoration programs 
for the citizens of the State of Indiana. Ellis said that the proposed 
rule is based upon the IDEM rule which became effective March 6, 2002. 
He explained that the rule applies the IDEM groundwater classification 
scheme and numeric standards. The rule also establishes a management 
zone with specific compliance points from a mining activity based upon 
default criteria within the IDEM rule. Ellis reported that Division of 
Reclamation staff met with staff of IDEM's Office of Water Quality 
Drinking Water Branch on several occasions to ensure they were applying 
the rule consistent with the intent of the statute. ``We wish to 
express our appreciation to the staff of IDEM who have provided us 
valuable input while drafting this rule.'' Ellis said that the Division 
of Reclamation also met with the Hoosier Environmental Council and coal 
industry regarding the rule and extended appreciation for their input 
and ``well thought out written comments throughout the public comment 
period.''
    Ellis explained that in response to written comments provided by 
members of the public, the Hoosier Environmental Council, the Indiana 
Coal Council, and other organizations, the rule amendments have been 
revised to reflect many of the suggestions. He said that the Department 
responses to all comments were included in the report provided by the 
Hearings Officer.
    Ellis noted that in addition to the proposed rule, the Division of 
Reclamation also developed a nonrule policy for the implementation of 
the ground water quality standards at mines. He said that the purpose 
of the nonrule policy was to provide support guidance and added 
explanation of the proposed rule. He informed that the nonrule policy 
document contains a discussion of the ground water management zone and 
how its location is determined. The policy document also addresses the 
installation of monitoring wells, termed interception wells, that will 
be located between the mining activities and drinking water wells or 
property boundaries, for the purposes of early detection and added 
level of protection. In order to assist in understanding the rule and 
the policy Ellis provided a visual aid that depicted an example for the 
establishment of the groundwater management zone and the locations at 
which monitoring would occur.
    Ellis thanked the Commission for their consideration of the 
proposed rule, package and non-rule policy document.
    Ray McCormick said, ``In the example you give here, we have one 
contiguous block of land that is represented by the permitted area. 
However, in my area, the tunnels and the mine areas extend out for five 
miles in different directions, and it's a matrix of people that are 
leased at that particular coal company. There are some that are leased 
at different coal companies, and some that are not leased. McCormick 
referenced the example map and asked whether the permitted area and 
each one of the farmsteads would be monitored or well identified out to 
the 300-foot zone from each of the 40-acre tracts or 100-acre tracts 
that occur underground from the center of the mine.
    Ellis said, ``When you get out in the areas that are leased and 
they are mining deep underground, we refer to that often times as 
shadow acres.--He explained that in the permitting process the 
applicant has to identify all the groundwater users that are within the 
surface effect area and within the shadow area, whether it's a 1,000-
acre shadow area or multi-thousand acre shadow area. Ellis explained 
that the process can identify owners, their uses and a sampling occurs 
as part of the establishment for base-line purposes prior to issuance 
within the permit area.
    McCormick continued, ``So you're saying that this example is for 
activities above surface and during low ground water, but for areas 
outside of the surface activity, these standards do not really apply?''
    Ellis said the standard would apply at the drinking water wells, 
but the management zone is going to be drawn based on the proposed 
activities. ``Focus is on surface effects area. That is where the 
management zone will initially be drawn.'' However, ``depending on the 
nature activity if there are some waste returned to the underground 
works, then that would influence its location.'' He said sampling 
occurs throughout the entire permit process for baseline purposes, 
prior to permit issuance and also later when the active mining 
operations are occurring. Ehret interjected that the Department treats 
surface and underground mines differently, because of the ``nature of 
problems are somewhat different. Historically, if we have problems in 
proximity to underground mine work, which I think Ray is talking about, 
it usually has to do with a potential loss of water quantity as opposed 
to water quality. We don't have those happen a lot, but the Surface 
Mining Act outside the requirements of this particular amendment has a 
protection for restoration of the loss of water due to mining.'' He 
explained that if a person lost a domestic well or an agricultural 
well, the coal operator would be responsible for the replacement of 
that source of water.
    Martha Clark, Chief of the Watershed Branch, Indiana Department of 
Environmental Management, submitted written comments to the Commission. 
Clark said she was the previous Chief of the Groundwater Section and 
was ``intimately involved for many years'' in the development of the 
Groundwater Quality Standards rule, which the DNR, Division of 
Reclamation is trying to pull into their rule to meet the requirement 
of those standards.
    Clark stated, ``We believe at IDEM that these amendments, coupled 
with existing regulatory controls, meet the goals of groundwater 
quality standards rule and demonstrate as required in Section 2 of the 
groundwater quality standards rules that DNR will ensure that 
facilities practices and activities are designed and managed to 
eliminate and minimize potential adverse impacts to the existing 
groundwater quality.'' She said IDEM wanted to ``emphasize'' the 
importance that DNR staff implement the revised regulations to ensure 
that the goals of the groundwater quality standards. ``We support the 
final adoption of the rule by the Commission.''
    Nat Noland, President of the Indiana Coal Council addressed the 
Commission. He said, ``I appreciate the opportunity to be here today to 
testify on this rule of proposal before you. Noland stated that he 
represented the Indiana Coal Council, which is a trade association that 
represents approximately 90% of the Indiana's coal operators throughout 
southwest Indiana. He said, ``As we debate this rule today, I think 
it's important that we all remember that this rule is not a requirement 
of any federal law, and particularly the Federal Surface Mine and 
Control Reclamation act. Noland explained that the rule proposal was a 
result of a separate and independent state statute that was passed in 
1988 to ensure groundwater quality protections throughout Indiana. He 
noted that IDEM promulgated the groundwater rule as indicated and 
``your job today is to implement that rule today as part of the surface 
mine program. Staff has proposed a rule that does just that. It 
implements IDEM's rule; that is all that is required. Any concerns that 
have been raised by others about the standards or the place where the 
standards should apply are more appropriately addressed to IDEM, who 
proposed and adopted the original groundwater rule.'' Noland said, that 
although coal mining is ``one of the heaviest regulated industries in 
Indiana, we do support this rule today.'' He stated that the nonrule 
policy does a ``good job'' of explaining to the ICC and the regulated 
community, and to others how this rule will be implemented.''
    Noland stated that coal mining has been conducted in Indiana for 
over 100 years. ``Throughout that time, and particularly since the 
passage of the federal law in 1977, there had been virtually no 
significant effects on groundwater quality outside what will be the 
groundwater management zone after this rule is adopted today.'' He 
supported and ``confirmed'' his statement by citing an informal study 
that IDEM completed at the Peabody Linnville Mine years ago.
    He said that third parties, as well as the coal industry 
participated in the development of the IDEM rule and the rule proposal 
before the Commission. Noland said that IDEM's Task Force and their 
Rule Workgroup had discussed coal mine issues ``specifically and 
exhaustively several times.'' ``While the IDEM rule does not address 
nondrinking water wells that some in the public were concerned with, 
the changes made today proposed by staff will offer protection for 
nondrinking water wells and drinking wells.'' Noland noted that third 
parties had raised concerns about the location of the groundwater 
management zone. ``IDEM directed other implementing agencies, such as 
DNR, to establish groundwater management zones for their regulatory 
program as this rule reflects.'' Noland said the proposed nonrule 
policy does a ``good job'' explaining how the groundwater management 
zone will be created and how monitoring will occur throughout the 
mining activities. Noland said that the Indiana public already has 
protection for drinking water wells that no other state or federal 
government has provided. He said the coal industry proposed legislation 
a few years ago before the Indiana General Assembly to expand a post-
1977 reclamation fund to be used to provide monies to replace drinking 
water wells that may be affected by past mining practices. ``Monies in 
the fund come solely from civil penalties paid by coal operators.'' He 
said the proposed rule, with the Indiana surface mining laws and 
statutes and the fund provide ``more than adequate protection to 
property owners.''
    Noland said that third parties also commented that certain 
groundwater standards should apply within the mined area. ``That notion 
was completely contrary to IDEM's rule, and no further changes should 
be made in a proposed rule. He noted that Reclamation staff indicated 
in their response to comments, ``mineralization of groundwater within a 
mined area will occur, but the extent of that mineralization cannot be 
predicted. Groundwater in a mined area will not be used for drinking 
water and does not need monitoring by these rules. The purpose for the 
Groundwater Management Zone is to ensure that the effects will not 
occur outside the boundaries of the groundwater management zone.'' 
Noland said the proposed rules ``are not required by Indiana Surface 
Mining law or the federal law as previously indicated. In fact, 
groundwater standards are not a part of regulatory program in many 
coal-mining states; however, we will support the rule today. Coal mine 
operators can implement the rule and we urge you to go forward with the 
document that has been presented by the staff.''
    Rae Schnapp represented the Hoosier Environmental Council. Schnapp 
thanked the DNR for amending the rule to change the groundwater 
management zone so that it does not extend beyond the property 
boundaries. ``That is a very important aspect of the rule. Schnapp 
expressed that the groundwater management zone is essentially a 
``sacrifice zone where no standards apply, and that zone is 300 feet 
deep.'' She stated that HEC did not ``believe'' the proposed rule was 
``not consistent'' with federal SMCRA rules. Schnapp explained that 
federal SMCRA requires operators to focus first on prevention. The 
SMCRA approach is to view mining as a temporary activity, a temporary 
land use, and full capability of land use is to be restored.'' She 
stated that groundwater contamination is ``likely to be permanent.''
    Schnapp stated that the proposed rule ``only protects existing 
wells and allows the ambient groundwater to be contaminated.'' She 
added that the proposed rules also allow for wells used for livestock 
or irrigation to be contaminated ``up to a point.'' Schnapp said that 
HEC does ``appreciate'' the change in the rule that puts the 
interceptor wells between the mining activity and an existing drinking 
water well, but ``we feel that really is not enough.'' She said that 
HEC had submitted comments and suggestions about language that would 
define minimizing pollution that have not been incorporated into the 
rule. ``We urge you to seriously consider that, because we think that 
the rule needs to have more focus on prevention.
    Director Goss commented, ``I think we all, at least the people who 
have been on this committee, know the importance of this. We've 
anxiously awaited IDEM's guidelines.'' He stated the DNR may be the 
first state agency to propose these detailed regulations, and may be 
``even ahead of up IDEM's other divisions in adopting this.'' Goss 
thanked the Division of Reclamation for the amount of effort put into 
the rule proposal, and also thanked the private industry, Indiana Coal 
Council, and the Hoosier Environmental Council and other citizen 
groups. ``We have had literally dozens and dozens of conversations this 
year, and it's all been positive and friendly on how to improve this 
and make it work. I think this has been a very good process.''
    Jerry Miller moved to approve for final adoption of SMCRA Water 
Quality Amendments in 312 IAC 25 to implementing 327 IAC 2. Damian 
Schmelz seconded the motion. Upon a voice vote, the motion carried.
    Jerry Miller moved to adopt the Nonrule Policy Document 
(Information Bulletin #38) implementing the Indiana groundwater 
standards at coalmines regulated under IC 14-34.
    Damian Schmelz seconded the motion. Upon a voice vote, the motion 
carried.
    The Wright testimony, on page 4, misrepresents groundwater 
protection standards in Illinois and the regulatory provisions provided 
under SMCRA. The testimony reveals the author has a lack of 
understanding of the mining process and how the local geology 
influences groundwater after the commencement mining operations. Mr. 
Wright requests that SMCRA establish numeric standards to determine 
when contamination occurs. While we agree with Mr. Wright's statement 
that it would be unrealistic to assume groundwater in mined areas will 
remain pristine, the establishment of nationwide, numeric groundwater 
standards would be unrealistic considering the varying geologic 
conditions of each region of the nation.
    Illinois has statewide groundwater protection standards for offsite 
impacts as provided by Illinois Environmental Protection Agency's 
groundwater rules at 35 IAC 620. Mining related constituent standards 
are set at the existing concentrations in the groundwater within the 
permit boundary at the time of reclamation. Constituents outside the 
permit boundary must comply with the applicable class standard for the 
groundwater. These rules were implemented to protect the groundwater 
supply surrounding a mining operation and provide a numeric standard 
for determining when contamination does occur. The use of regional 
groundwater protection standards is a much more practical approach than 
trying to establish national standards for groundwater.
    Mr. Wright has obviously been misinformed concerning the ``high 
levels of arsenic'' mentioned on page 6. The wells with ``high levels 
of arsenic'' are not in the same aquifer as that being addressed at the 
mine site. And, the so-called ``high levels'' of arsenic are within 
state standards. Mr. Wright fails to acknowledge that the company is 
addressing its environmental responsibility in a professional manner 
while under the jurisdiction of the state regulatory agencies using 
existing regulations.
    On page 6 of his testimony, Mr. Wright states that ``Illinois DNR 
ignored the request for a Public Hearing about the high hazard dams 
that contain waste. In 2003, the DNR granted a public hearing on the 
reclamation plan, but refused to answer any of the public's questions 
on the plan.''
        The request of a public hearing concerning high hazards dams is 
        a provision of a law not related to SMCRA and not enforced by 
        the division of DNR that is the regulatory authority for 
        Illinois' Permanent Program. The public hearing held in 2003 
        was held according to the regulations. The purpose of such 
        hearings is to receive public comments, but once the hearing 
        record closed agency officials were available to answer 
        questions. All comments received at the hearing were addressed 
        in the permit decision document issued concerning this 
        application. In addition, the Illinois DNR in 2006 held a 
        lengthy public informational forum to discuss questions from 
        the public. Among the issues raised were design, maintenance 
        and use of the ``high hazard dam'' as refuse retention 
        structures at the reclaimed mine site in question.
    Mr. Wright goes on to state on page 6 that ``In 2003, the 
reclamation plan was approved despite the fact that the mining company 
did not tell where the monitoring wells on the site were located. 
Illinois DNR itself admitted in its own evaluation that this made it 
impossible to determine whether any possible contamination was 
migrating off site....The reclamation plan has been under appeal for 
over 4 years. The appeal is now at the federal level.''
        These statements are untrue. The application for the permit 
        revision in question contained the location of the monitoring 
        wells, and the admission referred to is a total fabrication.

        The permit revision referred to was issued on March 3, 2004. 
        Local citizens requested administrative review of the decision 
        to issue the revision. The final administrative ruling on the 
        decision to issue the revision was handed down on May 25, 
        2005--approximately two years after the review was requested--
        not four years. The ruling was in DNR's favor.

        This permit revision approval is not the subject of a federal 
        appeal. The federal appeal deals with a notice sent to DNR by 
        OSM alleging violations of performance standards. DNR's 
        response to OSM concerning these allegations was deemed 
        appropriate and no federal enforcement action was taken. A 
        local citizen is now appealing OSM's decision to not take 
        enforcement action, not DNR's decision to issue the revision.
    In referring to a pipeline to the Kaskaskia River, on page 6 Mr. 
Wright's testimony alleges that DNR sent legal arguments to the OSM for 
review, ``who found that the mine arguments were not valid. In December 
2006, Illinois DNR nevertheless changed their position in favor of the 
mine.''
        DNR forwarded the legal rationale of the mine operator to OSM 
        requesting their solicitor's opinion. The solicitor did not 
        find the arguments invalid as Mr. Wright claims. The DNR's 
        decision to approve the pipeline is the subject of 
        administrative review requested by the citizen. A recent ruling 
        by the administrative hearing officer presiding over this 
        review found the citizen's ``pleadings grossly mis-characterize 
        both the Illinois Department of Natural Resources and the 
        federal Office of Surface Mining analysis''.
    On page 7 of his testimony Mr. Wright makes several statements 
concerning Illinois' regulation of longwall mining. All of these 
statements are misrepresentations of the facts. Mr. Wright obviously 
accepted verbatim the positions of an anti-longwall mining group in 
Montgomery County without bothering to confirm whether the information 
provided was factual.
    ``Illinois DNR has claimed that it has no authority over longwall 
mines even though SMCRA regulates the surface impacts of underground 
mining.''
        This statement is blatantly false. In Illinois, longwall mining 
        has been performed in 11 different mining operations located 
        within 6 counties. To date, over 240 modern longwall panels 
        have been extracted in Illinois. Since 1983, Illinois 
        regulations have required the mitigation of all subsidence 
        impacts, resulting from all types of underground mining, to 
        both land and structures. There are currently two longwall 
        mines operating in Illinois. Land and structures impacted by 
        subsidence from these mines are routinely repaired and 
        landowners are paid for crop losses incurred until repairs are 
        completed.
    ``The Illinois DNR has repeatedly refused to address citizen 
concerns about possible damage to their homes and farms on the grounds 
that SMCRA does not give them authority to regulate underground 
mines.''
        This statement is false. DNR personnel have met numerous times 
        with citizens as part of Farm Bureau sponsored meetings to 
        discuss the issue of underground mining and subsidence repair.
    ``Illinois DNR has denied the [lands unsuitable petition] 
repeatedly on the grounds it cannot accept such petitions for 
underground mines, but this would appear to directly contradict their 
own regulations, which declare `An area shall be designated as 
unsuitable for all or certain types of mining operations.'''
        The regulations state at 30 CFR 762.11, and the Illinois 
        counterpart 62 Ill. Adm. Code 1762.11, that lands unsuitable 
        petitions may be submitted for surface coal mine operations. 
        The definition of surface coal mine operations states that 
        ``Such activities include excavation for the purpose of 
        obtaining coal, including such common methods as contour, 
        strip, auger, mountaintop removal, box cut, open pit, and area 
        mining, the uses of explosives and blasting; in situ 
        distillation or retorting; leaching or other chemical or 
        physical processing; and the cleaning, concentrating, or other 
        processing or preparation of coal.''

        This regulatory definition of ``surface coal mining 
        operations'' describes activities conducted on the surface of 
        lands in connection with a surface coal mine or surface 
        operations. Such surface mining extraction activities have been 
        interpreted to include excavation for the purpose of obtaining 
        coal including such common methods as contour, strip, auger, 
        mountaintop removal, box cut, open pit, and area mining....and 
        all areas on which such activities occur or where such 
        activities disturb the natural land surface. These surface coal 
        mining activities are distinguished from underground coal 
        mining activities. Underground coal mining activities include 
        the standard mining methods known as room and pillar 
        excavation, high extraction retreat mining, and longwall 
        mining.

        The petition referred to sought a lands unsuitable for mining 
        designation based upon longwall mining operations. Longwall 
        mining is not a surface coal mining extraction method; it is an 
        extraction method used for underground coal mining operations. 
        Longwall mining extraction is not conducted on the surface of 
        the land, and as such, it is not a surface coal mining 
        operation. DNR determined that it is not authorized to review 
        lands unsuitable for mining petitions that do not relate to 
        surface coal mining operations.
    ``The Illinois DNR seems to be completely unwilling to take any 
sort of regulatory action in regards to longwall mining. This situation 
leaves citizens with no recourse for protecting their homes and their 
property from possible damage from longwall mines.''
        As indicated above this accusation is simply not true. Illinois 
        has over 24 years of experience in regulating longwall mining 
        and the affects to both land and structures resulting from 
        subsidence caused by longwall mining. All underground mine 
        operators are required to repair subsidence damage resulting 
        from underground mining, whether it be conventional room and 
        pillar mining or longwall mining.
                                 ______
                                 
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                                                  
STATEMENT OF STEPHANIE R. TIMMERMEYER, SECRETARY, WEST VIRGINIA 
   DEPARTMENT OF ENVIRONMENTAL PROTECTION, CHARLESTON, WEST 
                            VIRGINIA

    Ms. Timmermeyer. Mr. Chairman and members of the Committee, 
thank you for the opportunity to speak on behalf of West 
Virginia to commemorate this, the 30th anniversary of SMCRA.
    To say that this legislation is important to the Mountain 
State would be an understatement. Fortunately, as mining 
practices have evolved, so has SMCRA. To illustrate that point, 
in my travels here I have brought two permits. This permit was 
issued in 1977. This permit was signed this week. Both allow 
for surface mining on similar acreage.
    This permit basically just outlines the boundaries of the 
mining area and the number of acres to be mined. This one is 
clearly far more comprehensive. It includes a surface water 
runoff analysis, a community impact statement, baseline water 
quality data, a stability analysis, a sediment control plan, 
among many other additions. Clearly, SMCRA and our correlating 
state regulations have come a long way since 1977.
    Our agency continues to work every day to find new ways to 
reduce mining's impact on the environment and keep folks in 
business. Both mining and environmental protection are big 
business in our state.
    West Virginia has had a long-time relationship with the 
coal industry. In 1939, long before SMCRA was contemplated, 
West Virginia was the first state in the Nation to enact 
environmental laws to regulate coal mining. As the coal boom 
continued and as companies walked away from sites, leaving a 
legacy of environmental damage, an energetic freshman 
Congressman from West Virginia helped craft and build support 
for landmark legislation that would require responsible mining 
and reclamation across the country.
    SMCRA created Federal oversight for mining activities, and 
empowered the states to protect human health and the 
environment. I am humbled by the great strength of character 
and great leadership that you showed, Mr. Chairman, to take 
such a bold step as the member of a coal state's delegation. 
Your actions helped propel West Virginia into the forefront as 
a leader in environmental protection issues.
    Through SMCRA and a solid state mining regulatory program, 
coal operators are far more responsible in mining activities. 
Planned reclamation has become a given in coal mining today. 
Industry has progressed from claiming that SMCRA and any 
changes to it would put them out of business, to vying for 
reclamation awards and showcasing successful reclamation sites.
    Too often that wasn't the case in years past. West Virginia 
is still riddled with pre-law mine sites that continue to 
pollute our streams and pose safety hazards to residents. 
Thanks to SMCRA, West Virginia has a means to tackle that 
problem.
    I won't spend a lot of time on this issue, because I know 
others will address it later, but I could talk all day about 
how important the recent AML fund reauthorization is to West 
Virginia. I will just quickly note that West Virginia Governor 
Joe Manchin has announced that $58 million of the nearly $1 
billion that West Virginia will receive will go to create 
valuable water infrastructure to the old mining communities 
that need it the most.
    The industry, government, and citizens have become more 
sophisticated since 1977. Decisions on mining matters are far 
more deliberative and comprehensive. Now more than ever, permit 
decisions are inclusive of the public. The DEP prides itself in 
its progressive approach to public participation. Individuals 
can subscribe to an online email notification system. Citizens 
are in our DEP offices every day reviewing permit files to make 
informed comments on draft permits. Public hearings are 
commonplace. And the agency makes itself available for 
question-and-answer sessions and citizen inspections. Without 
the groundwork of SMCRA, this may not have been possible.
    Post-mining land uses are a very important component of 
SMCRA. Due in part to the steep topography of West Virginia, 
many new commercial developments are on previously mined and 
reclaimed land, particularly in the southern coal fields. 
Shopping malls, schools, wood product plants, golf courses, and 
athletic complexes have sprung up on old mine sites.
    One of the most significant projects in the state is the 
King Coal Highway, which will enable residents of once-isolated 
communities to travel farther in shorter timeframes. The 
highway will spur economic development along the route, 
providing the critical travel infrastructure that West Virginia 
needs. It is by no means the D.C. Beltway, but it sure is a far 
cry from the twisting, winding, narrow roads that we West 
Virginians are used to.
    West Virginia Governor Joe Manchin realizes the importance 
of post-mining land use requirements and the development 
opportunities that they present. An Executive Order is being 
drafted that sets in motion a framework for future industrial, 
commercial, and agricultural projects that will tap into the 
experience of the state's economic development and science 
leaders.
    Coal won't be here forever, so West Virginia is looking to 
diversify its economic development and growth options, so that 
it can keep its residents employed and living in the Mountain 
State.
    I hope that SMCRA will continue to evolve and mature, in 
order to take into consideration the states' infrastructure 
needs, environmental protection needs, and development needs on 
mine lands that might otherwise lie dormant. Instead of a 
legacy of problems, today's legacy is this: Thanks to SMCRA, 
mining companies are held to a high standard. They have 
recognized that there is an inherent wealth in a community's 
heritage and well-being.
    Mining is also a part of our state's social fabric, and it 
provides an integral part of West Virginia's well-being in 
culture, as well as the nation's economy. With forward-thinking 
legislators like Congressman Rahall and our Governor, Joe 
Manchin, West Virginia will continue to lead in mining and 
reclamation regulation, while seeking out new ways to provide 
energy and fuel the nation's economy.
    Thank you for providing this opportunity to speak. It is 
truly an honor to be able to provide West Virginia's 
perspective on this issue.
    [The prepared statement of Ms. Timmermeyer follows:]

       Statement of Stephanie R. Timmermeyer, Cabinet Secretary, 
          West Virginia Department of Environmental Protection

    Mr. Chairman and members of the committee,
    Thank you for the opportunity to speak on behalf of West Virginia 
to commemorate the 30th anniversary of the Surface Mining Control and 
Reclamation Act of 1977. The measure has been hugely important to the 
Mountain State as coal mining practices have evolved over the past 30 
years. Natural resource extraction and regulation has quite a history 
in West Virginia.
    In 1939, West Virginia was the first state in the nation to enact 
environmental laws to regulate coal mining. The legislation required 
that companies obtain a permit, post a bond and reclaim the land. The 
environmental protection movement for mineral extraction was born.
    Over the next few decades, coal mining became more prevalent, and 
the boom of the northern underground coal mines prompted companies to 
explore the southern coalfields and burrow underground for the resource 
that would propel the United States into the forefront of industrial 
production and electricity supply.
    An incredible amount of wealth was leaving West Virginia. Mining 
companies not only took the valuable coal out of the state, but also 
destroyed the heritage and fabric of communities. They often left 
nothing behind but unsafe sites, open mine portals and dead streams. 
Despite early legislation, little was being done to stem the tide of 
destruction from mining. During World War II, the demand for energy 
peaked, and millions of tons of coal were mined quickly. Before long, 
more than 102,000 acres were disturbed with no reclamation.
    That prompted West Virginia legislators to again take action to 
strengthen the surface mining law. In 1959, lawmakers required 
vegetation on disturbed areas, though the law was fairly weak, and it 
did little to fix the reclamation problem.
    A new surface mining law was enacted in 1967 that gave what we now 
call the West Virginia Department of Environmental Protection the 
responsibility for all phases of mining. The 1967 act was considered to 
be one of the toughest surface mining laws in the U.S. The act required 
prospecting permits, surface mining permit fees, bonds for disturbed 
acres, basic preplanning responsibilities, and monthly inspections. All 
of these requirements were precursors to our modern-day rules and 
regulations governing mining operations, and, I might say, a 
foreshadowing of what was to come in 1977.
    In that decade to come, West Virginia was in the limelight for a 
couple of reasons. In 1972, a coal dam burst on Buffalo Creek, killing 
125 people and wreaking havoc on families and communities in the wake 
of the rushing water. That incident put a renewed focus on the mining 
industry through the creation of dam safety laws.
    Momentum continued to build, and an energetic freshman congressman 
from West Virginia helped craft and build support for landmark 
legislation that would require responsible mining and reclamation 
across the country. The birth of SMCRA, thanks to Congressman Rahall 
and his colleagues, has leveled the playing field for mining companies 
through federal oversight and it empowered states to protect human 
health and the environment. It took incredible leadership for 
Congressman Rahall to take such a bold step as part of a major coal 
state's delegation, and it thrust West Virginia into the forefront 
again as a leader in environmental protection issues.
    No law has had a bigger impact on mining in West Virginia than 
SMCRA. Above all, SMCRA greatly reduced mining's impacts through 
minimum requirements and an emphasis on reclamation. No longer could 
coal companies take the valuable coal and leave behind a legacy of acid 
mine drainage and dangerous land formations. Although there are still 
impacts from mining, the practice is now carefully planned and 
permitted with extensive scientific, regulatory and public input.
    To illustrate that point, I have brought, on my travels here, two 
permits. This permit was issued in 1977. This permit was signed 
yesterday. Both allow for surface mining on similar acreage. This 
permit basically outlines the boundaries of the mining area and the 
number of acres to be mined. This one is far more comprehensive. It 
includes a surface water runoff analysis, a community impact statement, 
baseline water quality data, a stability analysis, and a sediment 
control plan, and many other additions.
    Clearly, SMCRA and our correlating state regulations have come a 
long way since 1977. Our agency works every day to find new ways to 
reduce mining's impact on the environment and keep folks in business. 
Both mining and environmental protection are big business in our state.
    The DEP combines the administration of the SMCRA and Clean Water 
Act 401 and 402 programs to regulate active mining. The integrated 
program for coal mining in West Virginia processed permitting 
transactions and inspection/enforcement activities at over 1,900 
permitted sites that together produced 159 million tons of coal in 
2006. That resource generated over 90% of the state's electricity 
consumption and helped fuel a state economy that supplies products and 
services essential to the welfare of the nation.
    Through SMCRA and a solid state mining regulatory program, coal 
operators are far more responsible in mining activities. Planned land 
reclamation has become a given in coal mining today. Industry has 
progressed from claiming that SMCRA and any changes to it would put it 
out of business to vying for reclamation awards and showcasing 
successful reclamation sites.
    Too often that wasn't the case in years past. West Virginia is 
still riddled with pre-law mine sites that continue to pollute our 
streams and pose safety hazards to residents. Thanks to SMCRA, West 
Virginia has a means to tackle the problem. The Abandoned Mine Land 
Fund created by SMCRA uses industry dollars to fund mine cleanup 
projects from old rogue operations.
    In West Virginia, the Abandoned Mine Land program has eliminated 
and reclaimed tens of thousands of acres of abandoned mine sites by 
abating hazards and restoring land and water to beneficial uses. Many 
miles of streams, such as the Blackwater and Middle Fork rivers have 
been restored to viable fisheries. Public water systems have been 
installed where past mining destroyed potable water supplies. The 
recent reauthorization of the program, thanks in part to the leadership 
of West Virginia's congressional delegation, will provide the 
opportunity to accelerate the program. Earlier this year, Governor 
Manchin announced that $58 million of the nearly $1 billion West 
Virginia will receive will go to creating valuable water infrastructure 
to the old mining communities that need it most.
    The West Virginia AML program has received in excess of $617 
million over the past 30 years to achieve the mission of the program. 
In the past 30 years, DEP eliminated 49 miles of highwalls, sealed 
2,688 portals, abated 439 acres of residential and urban subsidence 
areas, and eliminated 739 impoundments, all of which posed significant 
public health and safety hazards. Through the AML program, there are 
over 12,215 West Virginia families, churches, schools, and businesses 
that have clean, safe, and reliable drinking water. Since 1988, more 
than 779 emergency projects have been completed, in some cases saving 
the lives of people at risk of an impending impoundment failure or 
landslide. Despite all of our work, there is much more to do. West 
Virginia has documented over $1.8 billion in reclamation needs in the 
Office of Surface Mining's inventory.
    The West Virginia Special Reclamation Fund to reclaim coal mined 
lands abandoned after 1977 is another example of how SMCRA has led the 
regulated community to take responsibility for environmental legacy 
costs. The fund, in part, is based on the early landmark West Virginia 
statute that required funds be paid by the operator to address land 
reclamation and water pollution. The program is funded by forfeited 
bonds, civil penalties and a reclamation tax on mined coal. Since its 
inception, DEP's Office of Special Reclamation has reclaimed 1,592 bond 
forfeited coal-mining permits totaling 26,691 acres at a cost of over 
$101 million. In addition, DEP has constructed and maintains 105 water 
treatment sites at a capital cost of $17 million, and an additional $26 
million in operating and maintenance costs.
    The permitting process under SMCRA has afforded opportunities to 
avoid and minimize potential problems, thus providing some direction 
for mining operations. For example, improvements in the prediction and 
prevention for modeling acid mine drainage has contributed to the fact 
that since 1999, only 3.2% of permits have developed acid mine 
drainage. This represents a continual downward trend since the passage 
of SMCRA.
    The realization of ownership and control requirements through SMCRA 
and the corresponding state programs and maintenance of nationwide 
databases like the Applicant Violator System imposed accountability and 
made possible the removal and blocking of irresponsible operators. A 
challenge is maintaining the level of accountability requirements in 
light of the changes in ownership structures of coal companies, 
especially the multitude of ownership forms (e.g. investment groups, 
limited liability corporations) and bankruptcy law protections used by 
some coal operators.
    SMCRA has been effective in preventing and remediating offsite 
impacts that can occur with coal mining. In West Virginia, water 
replacement is now the rule rather than the exception. Also, a blasting 
program insisted upon in SMCRA provides neighbors of mining operations 
with protections in advance of blasting and avenues for redress in the 
event of damages.
    The industry, government and citizens have become more 
sophisticated since 1977. Decisions on mining matters are far more 
deliberative and comprehensive. Now, more than ever before, permit 
decisions are inclusive of public comment and participation. The DEP 
prides itself in its progressive approach to public participation. 
Individuals can subscribe to an online e-mail notification system to 
see public notices for any county in the state. Citizens are in our DEP 
offices every day reviewing permit files and arming themselves with 
information to make informed comments on draft permits or to provide 
testimony in mining permit appeals. Public hearings are commonplace, 
and the agency attempts to make itself available for question and 
answer sessions and citizen inspections. Without the groundwork of 
SMCRA, this may not have been possible.
    The permitting process, in fact, has become a planning tool for 
companies and communities. The SMCRA requirement to reclaim mined lands 
and return them to uses equal or better than those which existed before 
mining has become an important economic development component for West 
Virginia.
    In 2006, approximately 75% of all surface mine applications 
approved in West Virginia set forth forestland as the post mining land 
use. This equates to approximately 8,000 acres. Over the past three 
years, 6 million seedlings were planted on mined lands. This sets the 
stage for a future viable forestry industry in the years to come.
    Due in part to the steep topography of West Virginia, many new 
commercial developments are on previously mined and reclaimed land. 
Particularly in the southern coalfields, shopping malls, schools, wood 
products plants, golf courses, and athletic complexes have sprung up on 
old mine sites. One of the biggest up and coming projects in the state 
is the King Coal Highway, constructed as a post mining land use. The 
highway will enable residents of once isolated communities to travel 
farther in shorter time frames. The highway will spur commercial 
development along the route, providing the critical travel 
infrastructure West Virginia needs. It is by no means the Washington, 
D.C. beltway, but it sure is a far cry from the twisting, winding, 
narrow roads West Virginians are used to.
    West Virginia Governor Joe Manchin realizes the importance of post 
mining land use requirements and the development opportunities they 
present. An executive order is being drafted that sets in motion a 
framework for future industrial, commercial and agricultural projects 
that will tap into the know-how the state's economic development and 
science leaders. Coal won't be here forever, so West Virginia is 
looking to diversify its economic development and growth options so 
that it can keep its residents employed and living in the Mountain 
State. I hope that SMCRA will continue to evolve in order to take into 
consideration states' infrastructure, environmental protection, and 
development needs on mined lands that might otherwise lie dormant.
    It has taken decades of science, expertise and diplomacy to get 
where we are today in mining and regulating coal. The changes have been 
drastic and have led to a dramatic improvement from the old days of 
digging coal and leaving behind a legacy of problems.
    Instead of a legacy of problems, today's legacy is this--thanks to 
SMCRA, mining companies are held to a high standard. They have 
recognized that there is an inherent wealth in a community's heritage 
and well being. Mining is also a part of the state's social fabric, and 
it provides an integral part of the nation's economy and West 
Virginia's well being and culture. With forward-thinking legislators 
like Congressman Rahall and our Governor, Joe Manchin, West Virginia 
will continue to lead in mining and reclamation regulation while 
seeking out new ways to provide energy and fuel the nation's economy.
    Thank you for providing this opportunity to speak. It is truly an 
honor to be able to provide West Virginia's perspective on such 
important legislation.
                                 ______
                                 
    The Chairman. Mr. Husted.

  STATEMENT OF JOHN HUSTED, DEPUTY CHIEF, DIVISION OF MINERAL 
  RESOURCES MANAGEMENT, OHIO DEPARTMENT OF NATURAL RESOURCES, 
                         COLUMBUS, OHIO

    Mr. Husted. Greetings, Mr. Chairman and members of the 
Committee. I am the Deputy Chief of the Ohio Division of 
Mineral Resource Management, and also the President of the 
National Association of Abandoned Mine Land Programs. And I 
have been working with Title IV and Title V programs since 
1979.
    I am submitting the testimony on the behalf of the National 
Association of Abandoned Mine Land Programs. The Association is 
an organization consisting of 30 states and Indian tribes with 
a history of coal mining and coal mining-related hazards, which 
is overseen by the Office of Surface Mining Reclamation and 
Enforcement.
    I would like to present the member states' and tribes' 
views and sentiments related to the implementation of Title IV 
AML reclamation program under SMCRA.
    Since the enactment of SMCRA, the AML program has reclaimed 
thousands of dangerous sites left by abandoned coal mines, 
resulting in increased safety for millions of Americans. 
Unfortunately, three billion priority-one and two problems 
still threaten the public's safety and remain unreclaimed.
    The Association is extremely pleased over the passage of 
the 2006 amendments to SMCRA. The 15-year extension, coupled 
with the increased off-budget funding, will provide the states 
and tribes with the ability to be able to carry out the 
remaining AML reclamation work.
    Included in your testimony is a copy of the AML booklet 
called Safeguarding, Reclaiming, and Restoring, which 
highlights the various AML projects across the United States 
that have protected the public's health and safety. It is 
important to remember that the AML program is, first and 
foremost, designed to protect the public's health and safety. 
The majority of the state and tribal AML projects specifically 
correct AML features that threaten someone's personal safety or 
welfare.
    While state and tribal AML programs do complete significant 
projects that benefit the environment, the primary focus has 
been on eliminating health and safety hazards first. The OSM 
inventory of completed work reflects this task.
    The following quotes and excerpts are from the Association 
members that I believe are representative of many of the 
members' views, and are intended to address the effectiveness 
of Title IV of SMCRA.
    Number one, comments from Montana's AML program. From the 
Montana perspective, the AML program has been a huge success. 
Montana's program is a success from the aspect of protecting 
human health and safety, and protecting the environment. From 
the program management perspective, Montana's AML program is a 
success because of the manner in which the AML program is 
managed by OSM. Montana's experience with OSM's oversight in 
the AML program is one of collaborative assistance that focuses 
on accomplishments, the goals of the AML.
    In addition, OSM sponsors training through the National 
Technical Training Program in subjects such as subsidence 
control, mine fire abatement, mine hydrology, and project 
management.
    Comments from North Dakota's AML program. Overall, I 
believe the AML program has been very successful in identifying 
abandoned mine sites and eliminating safety hazards associated 
with many of them. As you know, much more AML work remains to 
be done, and in most states, reauthorization of the program 
will allow most of the remaining work to be completed over the 
next 15 years.
    However, for the minimum program states, one of the 
failures has been the lack of full funding for minimum program 
states over the past 15 years.
    In closing, as President of the Association, I would like 
to commend OSM for their efforts to work with the states and 
tribes in the rulemaking process for the implementation of the 
2006 amendments to SMCRA.
    Several issues still have not been resolved; thus, the 
states and tribes have serious concerns about how effectively 
the 2006 amendments will be implemented.
    Number one. Funding for minimum program states. The minimum 
programs should receive $3 million per fiscal year, commencing 
in 2008, and not wait until Fiscal Year 2010.
    Number two. Distribution of payments from the U.S. 
Treasury. The states and tribes would like the option of 
receiving the payments using the current grant system, or 
payments directly by the Treasurer, similar to mineral 
royalties paid to states under the Mineral Leasing Act.
    Number three. Use of unappropriated state's share balances. 
The states and tribes assert that these monies should also be 
available for non-coal reclamation, and for the 30 percent AMD 
set-aside.
    These issues are very important, and we request the 
Committee to urge OSM to address these problems, as we believe 
they will lay the foundation for successful implementation for 
the AML program for the next 15 years.
    The Association would like to submit for the record a copy 
of a May 2007 letter to OSM which provides significant detail 
and rationale behind our concerns over these listed topics and 
other important issues.
    Thank you for the opportunity to provide testimony, and 
your strong support for the AML program.
    [The prepared statement of Mr. Husted follows:]

    Statement of John F. Husted, President, National Association of 
  Abandoned Mine Land Programs, and Deputy Chief, Ohio Department of 
Natural Resources, Division of Mineral Resources Management, Columbus, 
                                  Ohio

    Greetings Mr. Chairman and Members of the Committee. My name is 
John F. Husted and I am the Deputy Chief of the Ohio Department of 
Natural Resources, Division of Mineral Resources Management and also 
the President of the National Association of Abandoned Mine Land 
Programs (NAAMLP). I started my career in 1979 with the State of Ohio 
and have worked exclusively in Title IV and Title V programs under the 
Surface Mining Control and Reclamation Act of 1977. I have represented 
the Ohio Department of Natural Resources as a member of the NAAMLP 
since 1993 and have been proudly serving as President of the 
Association since September 2006.
    I am submitting this testimony on behalf of the NAAMLP. The NAAMLP 
is a tax-exempt organization consisting of 30 states and Indian tribes 
with a history of coal mining and coal mine related hazards. These 
states and tribes are responsible for 99.5 percent of the Nation's coal 
production. All of the states and tribes within the NAAMLP administer 
abandoned mine land (AML) reclamation programs funded and overseen by 
the Office of Surface Mining Reclamation and Enforcement (OSM) pursuant 
to Title IV of SMCRA, P.L. 95-87.
    The Association appreciates the opportunity to participate in this 
oversight hearing on ``The Surface Mining Control and Reclamation Act 
of 1977: A 30th Anniversary Review''. I would like to present the 
member states' and tribes' views and sentiments related to 
implementation of the Abandoned Mine Land Reclamation Program (Title 
IV) under SMCRA.
    Since the enactment of the SMCRA by Congress in 1977, the AML 
program has reclaimed thousands of dangerous sites left by abandoned 
coal mines, resulting in increased safety for millions of Americans. 
Specifically, more than 285,000 acres of abandoned coal mine sites have 
been reclaimed through $3.5 billion in grants (administration and 
construction) to states and tribes under the AML program. This means 
hazards associated with more than 27,000 open mine portals and shafts, 
2.9 million feet of dangerous highwalls, and 16,000 acres of dangerous 
piles and embankments have been eliminated and the land reclaimed. 
Despite these impressive accomplishments, $3 billion Priority 1 and 2 
problems threaten public health and safety and remain unreclaimed. 
These hazardous sites require safeguarding by the states and tribes AML 
programs.
    The Association is extremely pleased over the passage of the 2006 
Amendments to SMCRA. The 15-year extension coupled with increased 
funding will provide the states and tribes with the ability to carry 
out the remaining AML reclamation work. It is the intention of the 
states and tribes to focus on the protection of the public health and 
safety to ensure restoration in the coalfields of America. The 
Association would also like to thank the Congress for reauthorizing the 
AML Program and for taking the AML funding to states and tribes ``off-
budget''. With the funding off-budget, this will finally allow the 
states and tribes to make staffing decisions and in turn begin planning 
for long range design and reclamation activities. Included with our 
testimony is a copy of an AML booklet called ``Safeguarding, 
Reclaiming, Restoring'' for your review. The booklet was developed by 
the Association and OSM to highlight the various AML projects across 
the United States that have protected the public's health and safety.
    It is important to remember that the AML program is first and 
foremost designed to protect public health and safety. The majority of 
state and tribal AML projects specifically correct AML features that 
threaten someone's personal safety or welfare. While state and tribal 
AML programs do complete significant projects that benefit the 
environment, the primary focus has been on eliminating health and 
safety hazards first. The OSM inventory of completed work reflects this 
fact.
    This committee has asked the NAAMLP to comment on the 30th 
Anniversary Review of SMCRA. The following quotes and excerpts are from 
some of the Association members that I believe are representative of 
many of the members views and are intended to address the effectiveness 
of Title IV of SMCRA:
    1. Montana: ``From the Montana perspective the Abandoned Mine 
Reclamation Program under Title IV of SMCRA has been a huge success. 
Montana's AML program was approved in 1980 and the program has had a 
high approval rating ever since. Montana's program is a success from 
the aspect of protecting human health and safety, protecting the 
environment, and from the perspective of creating jobs and putting 
people to work. Acceptance of the AML program has run high because AML 
results in on the ground accomplishments that are immediately visually 
apparent.
    From the program management perspective Montana's AML program is a 
success because of the manner in which the Abandoned Mined Lands 
program is managed by Office of Surface Mining. Montana's experience 
with OSM oversight in the AML program is one of collaborative 
assistance that focuses on accomplishing the goals of AML. OSM provides 
the oversight and assistance necessary to keep the AML program on track 
without creating unnecessary or confusing paperwork or reports.
    OSM provides important training in the areas of computer software 
and modeling geographic information systems, and data systems. This 
focused training gets staff trained using software packages that would 
not be available through State computer systems. In addition, OSM 
sponsors training through their National Technical Training Program in 
subjects such as subsidence control, mine fire abatement, mine 
hydrology and project management. This specialized training is just not 
available from other sources and without it Montana AML would not have 
the necessary problem solving tools.
    2. North Dakota: ``Overall, I believe the AML program has been very 
successful in identifying abandoned mine sites and eliminating safety 
hazards associated with many of them. As you know, much more AML work 
remains to be done in most states and re-authorization of the program 
will allow most of this remaining work to be completed over the next 15 
years. However, for the minimum program states, one of the failures has 
been the lack of full funding for the minimum program states over the 
past 15 years. SMCRA amendments in 1992 set the minimum program funding 
level at 2 million dollars per year, but Congress typically 
appropriated only enough funds for 1.5 million per year. If the other 
0.5 million dollars had been appropriated each year, the backlog of AML 
work in these states would be much less and hazards would have been 
eliminated sooner and at lower costs. Since there is nothing that can 
be done about past actions, we shouldn't dwell too much on that and 
move forward instead. With re-authorization now in place, it's time for 
OSM to ensure that funding for minimum program states is at the 3 
million dollars per year authorized in that legislation. The increased 
funding to that level for the minimum program states needs to begin in 
FY 2008.''
    In closing, I would like to commend OSM for their efforts to work 
with the states and tribes in the rulemaking process for the 
implementation of the 2006 Amendments to SMCRA. OSM has spent 
considerable time and effort meeting and responding to questions and 
concerns from the Association regarding rule development. Although much 
has been done to address problems identified by the states and tribes, 
there are still significant shortcomings that need to be addressed. 
Several issues still have not been resolved, thus the states and tribes 
have serious concerns about how effectively the 2006 Amendments to 
SMCRA will be implemented. The issues are:
1. Funding for Minimum Program States.
      The Minimum Program States are Alaska, Arkansas, Iowa, 
Kansas, Maryland, Missouri, and Oklahoma.
      OSM has indicated that the minimum program states will 
not receive the full $3 million allocation until FY 2010. The states 
believe that this is a misinterpretation by OSM and that the minimum 
programs should receive $3 million per year beginning in FY 2008.
2. Use of Grant Mechanism to Distribute Payments from the U.S. Treasury 
        for both the prior unappropriated state/tribal balances and 
        payments in lieu of future state and tribal share to certified 
        states and tribes.
      The states and tribes would like the option of receiving 
the Treasury payment by the current grant process or by direct payment 
from the Treasury similar to mineral royalties paid to states under the 
Mineral Leasing Act.
      The states and tribes want flexibility and discretion 
with regard to the types of mechanisms that are available for 
distributing and expending Treasury payments.
3. Use of Unappropriated State Share Balances for Noncoal Reclamation 
        and AMD Set-Aside.
      In its most recent interpretation of the 2006 Amendments, 
OSM has stated that the funds returned to the states and tribes from 
the unappropriated state share balance cannot be used for noncoal 
reclamation or for the 30 percent AMD set-aside.
      Pursuant to Section 411(h)(1) of the 2006 Amendments, the 
states and tribes assert that these moneys should also be available for 
noncoal reclamation under Section 409 and for the 30 percent AMD set-
aside. There is nothing in the new law that would preclude this 
interpretation. Policy and practice over the past 30 years confirm it.
    These three items represent some of the unresolved issues between 
OSM and the States and Tribes on the 2006 Amendments to SMCRA. These 
issues are very important and we request that this Committee urge OSM 
to address these problems, as we believe they will lay the foundation 
for successful implementation of the AML Program for the next 15 years. 
The Association can provide this committee a copy of a letter to OSM 
dated May 21, 2007 which provides significant detail and rationale 
behind our concerns over these listed topics and other important 
issues. We can also provide a copy of the response letter from OSM 
dated June 14, 2007.
    Thank you for the opportunity to submit this statement and provide 
comments. Please contact me if the NAAMLP can provide more information 
or assist the Committee in any way.
                                 ______
                                 
    [NOTE: The AML booklet entitled ``Safeguarding, Reclaiming, 
Restoring'' has been retained in the Committee's official files.]

                              May 21, 2007

Brent Wahlquist
Acting Director
Office of Surface Mining
1951 Constitution Avenue, N.W.
Washington, DC 20240

Dear Mr. Wahlquist:

    This letter represents the comments of the National Association of 
Abandoned Mine Land Programs (NAAMLP) and the Interstate Mining Compact 
Commission (IMCC) regarding draft rules (proposed and interim final) 
developed by the Office of Surface Mining (OSM) to implement the 
provisions of the Surface Mining Control and Reclamation Act (SMCRA) 
Amendments of 2006 (P.L. 109-432). OSM provided both the NAAMLP and 
IMCC with copies of the draft rules in April and also attended a 
meeting of both organizations on May 2 and 3 in Indianapolis to discuss 
the rules. We appreciate the opportunity to submit comments on the 
draft rules as OSM prepares to move forward with their promulgation 
later this year.
    There are several key sections of the draft rules that we will 
address in these comments, as noted below. However there are a few 
over-arching issues related to the interpretation of the new law that 
we will discuss first, as they set the stage for some of our 
recommended changes to the rules. All of these issues grow out of OSM's 
``Major Policy Issues'' paper that was also shared with the states in 
April.
I. GENERAL OVERVIEW COMMENTS
Use of Grant Mechanism to Distribute Payments from the U.S. Treasury
    Pursuant to the 2006 Amendments to SMCRA, two new types of payments 
from the U.S. Treasury are established: 1) distribution of the prior 
unappropriated state/tribal share balances over a seven year period 
(Section 41 l(h)(l)) and 2) payments in lieu of future state/tribal 
shares formerly paid out of the AML Trust Fund pursuant to section 
401(g)(l) (Section 41 l(h)(2)). Section 402(i)(2) requires the 
Secretary of the Treasury to transfer to the Secretary of the Interior 
``such sums as are necessary to pay the amount'' described above, but 
no specific payment mechanism is prescribed. OSM prefers to distribute 
these payments via grants to states and tribes, based on its reading of 
the law and on past practice, rather than via direct distribution of 
cash from the Treasury. The states and tribes posit that the new law 
does not directly address this matter and therefore the Secretary has 
the discretion to design a payment mechanism that meets the needs of 
the states and tribes. In line with this discretionary authority, the 
states and tribes prefer an approach that will provide them with 
immediate access to those moneys that are due and owing from the 
Treasury. This can be accomplished through a traditional grant process 
for those who desire the ``protection'' and guidance that such a 
process affords these monetary distributions. However, there is also 
flexibility to design either a grant or a direct payment mechanism that 
provides more unrestricted and immediate access to these moneys for 
states who desire maximum discretion with regard to the use of these 
moneys in line with the language in Section 41 l(h)(l)(D)(i) and (ii). 
In the latter circumstance, the state legislatures will exercise their 
fiduciary responsibility to insure that the funds are spent legally and 
appropriately in accordance with the dictates of the 2006 Amendments 
and state contracting law. Federal audits will also provide a measure 
of scrutiny and review of project selection and expenditures. There are 
also other mechanisms available for tracking and facilitating these 
payments, one example being the management of mineral royalties paid to 
states under the Mineral Leasing Act and another being a general 
statement of work detailing how the money will be spent. The states and 
tribes therefore urge OSM to incorporate significant flexibility and 
discretion with regard to the types of mechanisms that are available 
for distributing and expending Treasury payments for both the prior 
unappropriated state/tribal balances and payments in lieu of future 
state/tribal share to certified states and tribes.
Funding for Minimum Program States
    The 2006 Amendments include several provisions that govern the 
award of grant funds by OSM to states. Section 402(g) has three 
paragraphs that bear on that topic. Section 402(g)(I) directs that; 
``50 percent of the reclamation fees collected annually in any State'' 
be distributed to that state. Under section 402(g)(5)(A), ``[t]he 
Secretary shall allocate 60 percent of the amount in the fund after 
making the allocation referred to in paragraph (1)'' for additional 
grants to states. And section 402(g)(8) states that ``In making funds 
available under this title, the Secretary shall ensure that the grant 
awards total not less than $3,000,000 annually to each State and each 
Indian tribe...'' (emphasis added). This latter provision provides OSM 
the justification for insuring annual minimum program grant funding in 
excess of the base $3 million level as long as OSM does not contribute 
more than $3 million from its own discretionary funds.
    Section 401 of the bill also has relevant provisions. Sections 
401(f)(l) and (2) direct OSM to distribute grant funds to states 
annually, including the amount needed for the adjustment under section 
402(g)(8) (i.e., the ``minimum program'' adjustment up to $3.0 
million). Section 401(f)(3) has a similar provision:
        ``IN GENERAL.--...for each fiscal year, of the amount to be 
        distributed to States and Indian tribes pursuant to paragraph 
        (2), the Secretary shall distribute--
             (i) the amounts allocated under paragraph (1) of section 
            402(g), the amounts allocated under paragraph (5) of 
            section 402(g), and any amount reallocated under section 41 
            l(h)(3) in accordance with section 41 l(h)(2), for grants 
            to States and Indian tribes under section 402(g)(5); and
            (ii) the amounts allocated under section 402(g) (8).''
This again makes it clear that the legislation requires OSM to provide 
minimum program states at least $3.0 million annually, under section 
402(g)(8), commencing October 1, 2007.
    In its restrictive reading of the bill, OSM depends upon a single 
provision in section 401(f)(5)(B) to reduce the amounts of annual 
grants to minimum program states from the minimum $3.0 million annual 
required grant amount. That provision reads (with emphasis added):
        ``(B) EXCEPTIONS.--Notwithstanding paragraph (3), the amount 
        distributed under this subsection for the first 4 fiscal years 
        beginning on and after October 1, 2007, shall be equal to the 
        following percentage of the amount otherwise required to be 
        distributed:
             (i)  50 percent in Fiscal Year 2008.
             (ii)  50 percent in Fiscal Year 2009.
            (iii)  75 percent in Fiscal Year 2010.
             (iv)  75 percent in Fiscal Year 2011.''
    OSM's reliance on this provision ignores the fact that by its own 
terms (i.e. the ``notwithstanding'' phrase), it only overrides the 
requirements of section 401(f)(3). Yet other provisions of the bill 
independently require the distribution of the minimum amount of $3.0 
million. See sections 401(f)(l) and (2) and section 402(g)(8). The 
provision cited by OSM does not override the clear requirements of 
those other parts of the bill.
    The phase-in schedule of section 401(f)(5) only applies to such 
additional funds as might otherwise be provided by OSM to the minimum 
program states above the guaranteed distributions required elsewhere in 
the statute. This means that OSM cannot contribute more than $1.5 
million in additional funding to each minimum program state in Fiscal 
Years 2008 and 2009, and not over $2.3 million in additional funding in 
each of Fiscal Years 2010 and 2011, and not over $3.0 million in 
additional funding in each subsequent year through Fiscal Year 2024.
    This debate goes much deeper than the interpretations of the two 
sections mentioned above. Congressional intent and history in the 
passage of P.L. 95-87, the original ``Surface Mining Control and 
Reclamation Act of 1977,'' deserves merit in the interpretation debate. 
In the 95th Congress, the late Morris K. Udall (considered by many as 
the ``father'' of P.L. 95-87) worked tirelessly with government 
agencies, industry, and other organizations to make sure this law 
became a reality. With regard to the reclamation of abandoned mine 
lands, Title IV of P.L. 95-87 has been the guiding light for both OSMRE 
and the States/Tribes for almost 30 years. During this time, AML 
funding issues have overshadowed Congressman Udall's intent as outlined 
in Section 403 of P.L. 95-87 ``Objectives of the Fund.'' Section 403 
set specific priorities as to the expenditure of moneys from the AML 
fund. The number one priority is ``the protection of public health, 
safety, and property from extreme danger of adverse effects of coal 
mining practices,'' It is significant that the Surface Mining Control 
and mandated annual $2 million was ``budget deficits.'' Then under the 
Clinton administration, there was a ``budget surplus,'' but the annual 
allocation remained at $1.5 million. For the last 13 years, Minimum 
Program States have been critically underfunded in respect to the 
number of Priority 1 and Priority 2 AML hazards that need to be 
reclaimed. Respective Administration budgets and Congressional budgets 
continued to hold the AML Fund ``hostage,'' while unappropriated 
balances continued to rise.
    In early December 2006, much to the surprise of both OSMRE and 
States/Tribes, the 2006 Amendments took AML funding off budget. No 
longer would Congress appropriate AML funds on an annual basis. The 
pressure was now on OSMRE to develop a method(s) to distribute the AML 
funds to States and Tribes. OSMRE began to develop future funding 
projections under the new law. Since December 2006, OSMRE has 
distributed four different funding charts. With each successive chart, 
the funding numbers for the States and Tribes would change. But in all 
four of these OSMRE charts, there was one constant--the Minimum Program 
States (Alaska, Arkansas, Iowa, Kansas, Maryland, Missouri, and 
Oklahoma) would receive no funding increases for FY 2008 and FY 2009. 
Not until FY 2012 would Minimum Program States receive an annual $3 
million.
    In the last OSMRE Funding distribution chart (Chart 4), the 
following funding increases are reflected when comparing FY 2007 AML 
funding to FY 2008 AML funding, as well as the amount of Priority 1 and 
Priority 2 coal hazards in the AML Inventory for each state:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Reclamation Act Amendments of 2006 removed the words ``general 
welfare'' from the original wording of Section 403(1). In their 
infinite wisdom, the 109th Congress wanted to further strengthen 
Section 403(1) by placing a special emphasis on public health, safety, 
and property.
    There are no specific provisions in P.L. 95-87 or the 2006 
Amendments that discuss in detail the specific State/Tribe AML funding 
formulas that embrace historic coal production, state share (present 
coal production), and federal discretionary expenses. However, in the 
2006 Amendments Congress did single out states and tribes specifically 
in Section 402(g)(8)(A) stating, ``In making funds available under this 
title, the Secretary shall ensure that the grant awards total not less 
than $3,000,000 annually to each State and each Indian Tribe having an 
approved abandoned mine reclamation program pursuant to section 405 and 
eligible land and water pursuant to Section 404, so long as an 
allocation of funds to the State or tribe is necessary to achieve the 
priorities stated in paragraphs (1) and (2) of section 403(a).'' The 
fact that Congress has always (and in the 2006 Amendments continues to) 
dedicate a section of the law to states and tribes traditionally known 
as those with ``Minimum Programs'' solidifies the Congressional intent 
that these states and tribes annually receive not less than $3,000,000.
    In the late 1980s the Mid-Continent Coal Coalition was formed 
because the Minimum Program States and Tribes had several hundreds of 
millions of dollars worth of Priority 1 and Priority 2 AML hazards that 
posed, and continue to pose, a very high public health and safety risk. 
AML funding had fallen to an annual $1 million level that would not 
allow the efficient operation of a State/Tribal AML Program. This 
Coalition gathered Congressional support through letters, resolutions, 
testimony at Congressional committee hearings, etc. As a result, the 
budget reconciliation bill passed by the 101st Congress in the fall of 
1990 required that the Secretary allocate annually not less than 
$2,000,000 to Minimum Program States and Tribes. The passage of this 
bill inl990 was definitive proof that Congress supported an increase in 
funding for the Minimum Program States and Tribes.
    For three years (FY1992, FY 1993, and FY 1994) the Minimum Program 
States received $2 million annually. Since that time the Minimum 
Program States have been limited to an annual allocation of only $1.5 
million. The primary reason given for not allocating the statutorily 
could be used to help fund the Minimum Programs at the annual $3 
million level Furthermore, in its News Release of February 5, 2007, OSM 
noted that it has off-budget funds in its FY 2008 budget that could 
fully fund AML minimum programs at not less that the $3 million level. 
This money was provided to OSM for the purpose of, and should be used 
for, fully funding the minimum programs at the $3 million level. The 
bottom line is the Minimum Programs have been ignored for too many 
years. With the passage of P.L. 109-432, Congress has sent a message to 
OSMRE that Minimum Programs should be funded at an annual rate of $3 
million, starting with the FY 2008 budget. The sad part of this impasse 
is the fact that those living near or visiting these Priority 1 and 
Priority 2 AML sites are exposed on a daily basis to the possibility of 
death and/or injury.
    Congress gave OSMRE the authority to develop the AML funding 
distribution numbers for the states and tribes. The NAAMLP and IMCC 
urge that during the development of proposed rules and regulations for 
the 2006 Surface Mining Control and Reclamation Act Amendments, OSMRE 
``look outside the box'' and consider the real reason that Title IV was 
enacted almost 30 years ago.
Use of Unappropriated State Share Balances for Noncoal Reclamation and 
        AMD Set-Aside
    Since the inception of SMCRA in 1977 and the approval of state/
tribal AML programs in the early 1980's, the states and tribes have 
been allowed to use their state share distributions under section 
402(g)(l) of the AML Trust Fund for high priority noncoal reclamation 
projects pursuant to section 409 of SMCRA and to calculate the set-
aside for acid mine drainage (AMD) projects. Under the new amendments, 
states and tribes will receive their unappropriated balances in seven 
equal payments beginning in FY 2008. In its most recent interpretation 
of the 2006 Amendments, OSM has stated that these moneys cannot be used 
for noncoal reclamation or for the 30% AMD set-aside. OSM also 
initially stated that the historic coal distribution to non-certified 
states and tribes would also not be available for noncoal reclamation, 
but the agency appears to have relented on this issue and will allow 
these moneys to be used for both noncoal reclamation and the 30% AMD 
set-aside. With regard to the unappropriated state and tribal share 
balances that will be distributed pursuant to Section 41 l(h)(l) of the 
2006 Amendments, the states and tribes assert that these moneys should 
also be available for noncoal reclamation under section 409 and for the 
30% AMD.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    It should be noted that the term ``minimum program'' does not refer 
to lack of AML hazards that a state or tribe has to address, but rather 
with the lack of funding being generated by active coal mines within 
the state or tribe for purposes of remediating hazards associated with 
past coal mining. For example, Oklahoma has an AML inventory of 
priority 1 and 2 sites that will cost between $125 and 130 million to 
reclaim using today's cost figures. Kansas has an AML inventory of 
priority 1 and 2 sites that will cost over $200 million to remediate. 
However, funds generated by current coal mining activities in these two 
states generate around $25,000 annually for Kansas and around $100,000 
annually for Oklahoma. For perspective, states like Kentucky and West 
Virginia receive between $6,800,000 and $8,300,000 annually to perform 
remediation of hazardous AML sites. Interestingly (and in some 
respects, unfortunately), Oklahoma has an AML inventory of priority 1 
and 2 hazards that will cost more to remediate than 14 of the states 
and tribes listed above and Kansas has an AML inventory of priority 1 
and 2 hazards that will cost more to remediate than 16 of the above-
listed states and tribes. Therefore, even though the ``minimum 
program'' states may get minimum funding, they certainly have their 
fair share of AML priority 1 and 2 hazards.
    From December 2006 through February 2007, OSMRE continued to change 
their funding distribution charts, using factors such as historic coal 
production, state share fund balances, and present coal production. 
During this three month process, each time a new chart was developed 
OSMRE failed to put emphasis on the real problem; How much is the 
public affected by Priority 1 and Priority 2 AML hazards? Ignoring AML 
project sites that are an eminent danger to the health and safety of 
the public is not what Congress intended.
    OSMRE can find the funds in their FY 2008 budget to fond AML 
Minimum Programs. OSMRE is phasing out the Clean Streams Initiative 
Program and the Watershed Cooperative Agreements Program. This money 
set-aside. There is nothing in the new law that would preclude this 
interpretation. Policy and practice over the past 30 years confirm it. 
The unappropriated state and tribal share balances consist of past 
moneys collected from coal producers in these states and tribes that 
were never distributed due to restricted and under-funded 
appropriations. This money has always been ``colored'' as state/tribal 
share money, available for expenditure in accordance with the 
provisions of SMCRA and now 30 years of experience. The fact that the 
money is being paid out of Treasury funds does not change the ``color'' 
or operation of that money--it has been and will always be state/tribal 
share money allocated pursuant to section 402(g)(l) of SMCRA.
    OSM's new interpretation of SMCRA based on the 2006 Amendments is 
without support in the law when read as a whole. In interpreting the 
meaning of section 411, the entire statute must be read in context. 
Section 403 (which OSM points to) is modified by Section 409, which 
provides for the expenditure of AML funds at any priority 1 or 2 site, 
regardless of the commodity that was mined. Section 409(b) indicates 
that the 50% state share (from 402(g)(l)) and the historic production 
distribution (402(g)(5)) can be used for noncoal reclamation. If 
Congress had intended to limit the use of the unappropriated state/
tribal share balances (or historic production distributions) that are 
now finally being returned pursuant to section 41 l(h)(l), it could 
have easily done so. However, no changes were made in section 411 to 
accomplish this. Nor was Section 409 amended in any way.
    OSM's new interpretation is also a dangerous policy choice. OSM 
claims that once a state has completed all of its coal projects, it can 
then use all of its grant funds for noncoal projects. This will require 
that states spend years working on high-cost, low-priority coal 
projects that present little threat to public health and safety, while 
numerous highly hazardous abandoned noncoal mines remain unattended. In 
many western states, the AML programs have employed their AML grants to 
protect people and property threatened by noncoal abandoned mines. In 
New Mexico, for instance, the state estimates that over 10,000 mine 
openings remain. The overwhelming majority of these openings are at 
abandoned noncoal mines. All of the fatalities at abandoned mines in 
New Mexico over the past few decades have occurred at noncoal mines. 
With urban growth pushing into undeveloped areas and recreational uses 
increasing, the danger to public health and safety from abandoned 
noncoal mines throughout the country is increasing
    Much of the above reasoning also holds true for the availability of 
the unappropriated balances for purposes of calculating the 30% set-
aside for AMD abatement. Again, this work falls within the clear 
purposes of section 403 of SMCRA and thus any type of restriction on 
the use of these funds for AMD remediation is inappropriate. Section 
403(g)(6)(B)(ii)(I) establishes and defines the use of AMD set-aside 
funds. That section states that a qualified hydrologic unit destined 
for AML abatement must have land and water that ``...include any of the 
priorities described in Section 403.'' Obviously, this passage provides 
a clear nexus to section 403 of the Act. The 2006 Amendments at section 
41 l(h)(l)(D)(ii) state that non-certified states must use amounts 
provided from Treasury funds in place of the unappropriated balances 
for ``...purposes described in Section 403.'' Again, a clear nexus to 
section 403 is stated. Actually, the references in sections 402 and 411 
to section 403 are identical. Therefore AMD abatement is a purpose 
under section 403 and Treasury funds should not be artificially 
excluded for use in the set-aside for AMD. Finally, we should note that 
each appropriation bill over the past several years has included 
language that supports the use of funds made available under Title IV 
of SMCRA for the purpose of environmental restoration related to 
treatment or abatement of AMD without restriction. Based on the above, 
the NAAMLP and IMCC request that OSM reconsider its interpretation on 
the use of unappropriated state and tribal share balances for noncoal 
reclamation and the AMD set-aside. Adjustments to the draft rules based 
on these arguments appear below.
Reduction of the Treasury l/7th payments for the unappropriated balance 
        by the amount of the export tax lawsuit loss
    The relevant citations:
    411(h)(l)(A)(i)ofP.L. 109-432
    In General--Notwithstanding section 401(f)(3)(B), from funds 
referred to in section 402(i)(2), the secretary shall make payments to 
States or Indian tribes for the amount due for the aggregate 
unappropriated amount to the State or Indian tribe under subparagraph 
(A) or (B) of section 402(g)(l)
    41l(h)(l)(B) of P.L. 109 432 (emphasis added)
    Amount Due--In this paragraph, the term ``amount due'' means the 
unappropriated amount allocated to a State or Indian Tribe before 
October 1, 2007 under subparagraph (A) or (B) of section 402(g)(l).
    As a part of our discussion on the unappropriated balance, OSM has 
stated that should the export tax lawsuit ultimately be lost on appeal, 
the loss shall be paid out of the trust fund and the l/7th payments out 
of the Treasury to each State or Tribe shall be reduced by the like 
amounts each State or Tribe owed for the lawsuit.
    Section 41l(h)(l)(B) of P.L. 109-432 states that the amount due 
each State or Tribe is the amount allocated to each State or Tribe 
(State Share) before October 1, 2007. Unless the export tax lawsuit is 
resolved prior to October 1, 2007, then the amount paid out of the 
Treasury in l/7th installments to each State or Tribe for the 
unappropriated balance should not be reduced due to the lawsuit. 
Although the trust fund would ultimately be reduced by the amount of 
the export tax lawsuit loss, the payments out of the Treasury should 
remain unchanged since the amount the payments will be based upon will 
be established as of October 1, 2007. Further, we do find any language 
in P.L. 109-432 that can be interpreted to give OSM the authority to 
reduce payments from the Treasury for the unappropriated balance.
Effective Date of In-Iieu Payments
    There has been some confusion about when in-lieu payments from the 
U.S. Treasury begin under the 2006 Amendments. OSM has stated that they 
begin in FY 2009, and that payments to certified states and tribes of 
their 50% share in FY 2008 are made from the AML Trust Fund. Our 
reading of the 2006 Amendments is that the in-lieu payments from the 
Treasury begin immediately in FY 2008. The relevant citations are:
    Section 401 (f)(3)(B) of P.L. 109-432:
    (B) EXCLUSION. ``Beginning on October 1, 2007, certified States 
shall be ineligible to receive amounts under section 402(g)(l).
    Section 411 (h)(l)(B & C) of P.L. 109-432:
    (B) AMOUNT DUE.--In this paragraph, the term ``amount due'' means 
the unappropriated amount allocated to a State or Indian tribe before 
October 1, 2007 under subparagraph (A) or (B) of section 402(g)(l).
    (C) SHEDULE.--Payments under subparagraph (A) shall be made in 7 
equal annual installments, beginning with Fiscal Year 2008.
    Section 411 (h)(2)(A) of P.L. 109-432:
        (A) IN GENERAL.--Notwithstanding section 401(f)(3)(B), from 
        funds referred to in section 402(i)(2), the Secretary shall pay 
        to each certified state or Indian tribe an amount equal to the 
        sum of the aggregate unappropriated amount allocated on or 
        after October 12, 2007, to the certified State or Indian tribe 
        under subparagraph (A) or (B) of section 402(g)(l).
OSM has advanced the following explanation to support its current 
declared intention to pay state share funds to the certified states 
under section 402 (g)(l) in FY 2008 (emphasis added):
    ``Certified states and tribes will receive distributions under 
section 401(f) only in FY 2008 because the bill adds a new section 
401(f)(3)(B), which provides that certified states and tribes are 
ineligible to receive their state-share or tribal-share allocations 
with respect to fees collected after FY 2007. However, FY 2008 
distributions consist of FY 2007 fee collections, so certified states 
and tribes are eligible to receive 50% of their state or tribal share 
allocation of fees collected for that year.
    Beginning with FY 2009, certified states and tribes will receive 
annual payments from the Treasury in lieu of the amount of fee 
collections during the previous year that would otherwise have been 
allocated to their state or tribal share accounts in the AML fund in 
the absence of new section 401(f)(3)(B) of SMCRA. Section 4U(h)(2) 
ofSMCRA. \1\
-----------------------------------------------------------------------
    \1\ Major Provisions of P.L. 109-432: SMCR.A Amendments Act of 
2006. page 3. Distributed to NAAMLP members at its business meeting 
February 28 - March 1. 2007.
-----------------------------------------------------------------------
    Section 401(f)(3)(B) of P.L. 109-432 states that beginning October 
1, 2007, certified states shall not be paid under 402(g)(l). This 
provision is a complete exclusion. It prohibits certified States or 
Indian tribes from receiving grants funded by the reclamation fee 
effective October 1, 2007. There is no language in this section to 
support an interpretation that a certified State or Indian Tribe can 
receive after October 1, 2007 grants funded by reclamation fees 
collected prior to October 1, 2007.
    In order to support the position that the exclusion established by 
Section 401(f)(3)(B) does not apply to grants issued in Fiscal Year 
2008 if funded by reclamation fees collected during Fiscal Year 2007, 
OSM staff have explained that the term ``received'' as used in Section 
401(f)(3)(B) means ``allocated''. This interpretation is contrary to 
the normal and ordinary usage of the term ``received'' and is contrary 
to standard principles of statutory construction. Unless the context 
clearly indicates otherwise, or the word has been given a specific 
definition, words in a statute are to be given their normal meaning.
    Relying on this interpretation, OSM has developed a distribution 
chart dated February 22, 2007, showing that $41.6 million will be paid 
to the certified States or Indian tribes under 402(g)(l) in FY 2008. 
This distribution represents FY 2007 fee collections. This approach is 
correct for distributions to non-certified states as required by 
401(f)(2) and (3). However, Section 401(f)(3)(B) prohibits certified 
States or Indian tribes from receiving payments of funds under 401(f) 
beginning on October 1, 2007. The fees collected and allocated in FY 
2007 are to be included in the amounts due to the states that are 
allocated but not appropriated under Section 41 l(h)(l)(B). These funds 
are then paid over seven years, beginning in FY 2008 under 41 
l(h)(l)(C).
    The effect of this misinterpretation of Section 401(f)(3)(B) and 41 
l(h)(l)(B) is that $41.6 million would be paid to certified States or 
Indian tribes with fee collections instead of Treasury funds as 
required by Section 41 l(h)(l)(A)(i). The funds so paid will then not 
be available to be reallocated as historic share funds available for 
grants under Section 41 l(h)(4)(A). Furthermore, the interest that 
should be earned annually on this $41.6 million and paid to the 
Combined Benefit fund would not be earned and available to be paid.
    The draft language in the Proposed and the Interim-final 
regulations on this subject is consistent with the statutory language 
in P.L. 109-432 and so does not need to be changed. However OSM's 
interpretation of P.L. 109-432 is flawed. Based on the above arguments, 
the NAAMLP and IMCC urge OSM to revise the proposed AML funding 
distribution chart to show that:
    (a)  no state share funds are distributed to the certified States 
or Indian tribes in FY 2008; but,
    (b)  the $41.6 million should then be included in the calculation 
of the amount due to certified States and Indian tribes under Section 
411(h)(1)(B).
Adjustments to the Grants Process
    There is a fair amount of concern by the states and tribes about 
how the grants process will work under the 2006 Amendments. With the 
increased amount of money that will be flowing to the states, it will 
be incumbent on both OSM and the states and tribes to be particularly 
sensitive to the impacts on the grants process--especially with regard 
to the length of grants, rollovers, tracking of grant amount 
(especially by account), recapture, and paperwork reduction. We assert 
that the timing is ripe for revisiting the existing simplified grants 
process to consider additional streamlining and simplification. There 
is some concern that the 2006 Amendments could unnecessarily complicate 
the paperwork demands associated with annual grants, especially if we 
are required to track various kinds of moneys that are received. It 
will be particularly important to clarify that moneys are ``expended'' 
once they are obligated, encumbered or otherwise committed for 
projects. Even with this, deobligation could become a problem if we are 
unable to roll grants over from year to year. We understand that OSM 
will be considering various adjustments to the Federal Assistance 
Manual and to its AML directives and we request an opportunity to 
review those revisions once they are available. This may present an 
ideal opportunity for further clarifications to address the above 
concerns.
Annual Distribution Charts
    It will be critical for the states and tribes to receive the annual 
distribution charts for AML grants as soon as practicable after the 
beginning of each fiscal year (i.e. by no later than November 15). This 
will be particularly true in the first few years as the states and 
tribes attempt to forecast how the distribution will impact their 
respective programs. In this regard, we have attached a chart that, in 
simplified terms, demonstrates our understanding of the gross 
distribution formula as presented by OSM to date. It should be noted 
that the states and tribes do not agree with this distribution formula, 
as indicated by our comments on the proposed and interim rules. In 
fact, we have argued in these comments for various adjustments to the 
formula and to the use of the distributed funds based on our reading of 
the new 2006 AML amendments. Nonetheless, we would appreciate OSM's 
comments on our attempt to capture OSM's distribution formula under 
their interpretation of the 2006 Amendments and any additional 
explanations (flowcharts) that OSM can share with us regarding their 
interpretation of the distribution formula under the new law.
Training
    It will be very important for the states and tribes to receive the 
necessary training to implement the provisions of the new rules, once 
they are in place--especially as they impact the grants process. We 
urge OSM to keep this in mind as they consider implementation plans for 
the future.
Preamble Language
    We recognize that one mechanism OSM has available to clarify 
certain aspects of the proposed and interim final rules is through the 
use of preamble language. We would encourage OSM to do so. One example 
is the need to adjust the priority matrix contained in the Federal 
Assistance Manual (FAM) to reflect regional differences in land use 
patterns. Given that much of SMCRA's history was predicated on land use 
patterns and experience with hazards in the Eastern United States, 
there are unintentional gaps that fail to recognize the uniqueness of 
circumstances in other regions of the country. Whereas residents of 
Eastern states, for instance, may have residences or other structures 
that were built adjacent to known hazards, residents of Western states 
(and non-resident recreational users of Western lands) are exposed to 
AML features that consist of largely unknown hazards that are equally, 
if not more, dangerous than ``known'' features. Thus, as we consider 
what would be defined as an ``extreme danger'', we need to be cognizant 
of the fact that unknown hazards in remote or rural areas can be even 
more dangerous than known dangers as the unsuspecting public encroaches 
on these areas through occasional use or through urban sprawl. 
Recognizing the exposure of the populace to the hazards associated with 
abandoned mine sites will assist the states, tribes and the federal 
government in fully implementing the objectives of the AML program 
under SMCRA.
II. PROPOSED REVISIONS TO OSM'S DRAFT PROPOSED AND INTERIM RULES
    The NAAMLP and IMCC recommend the following changes to OSM's draft 
proposed and interim final rules based on the above commentary.
Section 870.5--Definitions
    ``Adjacent''--change to read as follows:
    ``Adjacent means adjoining, in proximity to or contiguous with 
eligible lands and waters.''
    Justification: OSM's draft rule implies that a Priority 1 or 2 
project must be undertaken in order for a Priority 3 project to be 
considered ``adjacent to'' the Priority 1 or 2 problem. This is not 
what the law requires. It is not a matter of priority; it is a matter 
of proximity. As long as the Priority 3 project is geographically 
connected to the Priority 1 or 2 site, the test is satisfied. 
Furthermore, OSM's proposed language conflicts with statutory 
provisions in sections 403(a)(l)(B)(ii) and (2)(B)(ii) that eligible 
lands include those that ``are adjacent to a site that has been or will 
be remediated. (emphasis added). In its proposed language, OSM is 
implying that for a priority 3 feature to be eligible, it has to be 
reclaimed in order to access or remediate the priority 1 or 2 feature. 
This simply cannot be the case if the priority 1 or 2 feature has 
already been reclaimed or may be so in the future, as anticipated by 
the 2006 amendments. We recommend use of the common dictionary 
definition of ``adjacent''. We also oppose the concept of tying the 
definition to a monetary determination. There is nothing in the law to 
support this criterion and we believe it would be difficult to 
determine and apply. The use of a proximity criterion will also allow 
us to take into consideration public rights of way, roads, etc, that 
may be present at or near the site. Finally, to define the term 
otherwise would be to severely limit the number and types of Priority 3 
projects that could be addressed, which is contrary to the intent of 
the law.
    ``In conjunction with''--change to read as follows:
    ``In conjunction with means reclamation of priority 3 features in 
phases or through a combination of contracting and construction with 
priority 1 and/or 2 features.''
    Justification: It is important to recognize that Priority 3 work 
cannot only be done in conjunction with a Priority 1 or 2 feature 
through a combined contracting or construction effort, but in phases of 
construction with a Priority 1 or 2 project, especially where the 
project is particularly large or the AML program is small (as with the 
minimum program states). We recommend deletion of the phrase ``would 
have provided significant savings to the AML fund'' for the same reason 
we recommend deletion of the last sentence in the definition: these 
terms are elusive and difficult to define and quantify. The law does 
not specify this type of monetary criterion and it would be challenging 
to implement. We assert that it is best to focus on the administrative 
aspects of project work, which are easier to define. Finally, to define 
the term otherwise would be to severely limit the number and types of 
Priority 3 projects that could be addressed, which is contrary to the 
intent of the law.
    ``Qualified Hydrologic Unit''--change to read as follow:
    Change the word ``and'' to ``or'' between subparagraphs (b)(l) and 
(2), as in the existing regulations.
    Justification: We realize that OSM's new definition is consistent 
with the statutory language, but actual practice over the past 25 years 
has been that hydrologic units are defined as containing lands and 
waters that are either eligible OR the subject of bond forfeitures, but 
not both. To define the term otherwise would be to severely limit the 
scope of this important provision of the law. With the new emphasis on 
allowing states to set aside upwards of 30% of their AML funds for the 
abatement of acid mine drainage projects, to limit the definition in 
this way would emasculate the purposes and intent of the program.
Section 872.1 l(b)(l)--Abandoned Mine Reclamation Fund
    Delete section 872.1 l(b)(4)(ii)(E).
    Justification: Based on the arguments articulated above with 
respect to the use of the states' and tribes' unappropriated share 
balances, this section should be deleted. There is no basis to restrict 
the use of these moneys for noncoal reclamation.
Section 872.13--Other Treasury Funds for Abandoned Mine Reclamation 
        Programs
    Change the reference in the introductory phrase of subparagraphs 
(a) and (b) to read: ``872.1 l(b)(l)(vi) and (b)(2)(vi)''--NOT 
``(vii)''.
    Change Subparagraph (a) and (b) to read as follows: 
``Notwithstanding Sec. 872.1 l(b)(l)(vi) and (b)(2)(vi), from funds in 
the Treasury not otherwise appropriated and transferred to the 
Secretary of the Interior pursuant to section 402(i)(2) of the Act, 
effective October 1, 2007, OSM shall make payments to States and Indian 
tribes....'' Also, in subparagraph (a), change the reference to ``prior 
balance funds'' to ``prior balance payments''.
    Change section 872.13(a)(3) to read as follows: ``States and Indian 
tribes may apply for and receive these annual installments in grants, 
following the provision of Section 886. Unless a certified State or 
Indian tribe specifically requests that OSM disburse funds due the 
State or Tribe in whole or in part through a grant or grants, payments 
referred to in Section 41 l(h)(l)(A) (prior balance payments) shall be 
made in one lump sum payment to the State or Tribe no later than 90 
days after the start of the federal fiscal year in which the payment is 
due.''
    Change section 872.13(b)(3) as follows: delete the current language 
and insert the following: ``Unless a certified State or Indian tribe 
specifically requests that funds be disbursed through a grant or grants 
following the provisions of section 886, payments referred to in 
Section 41 l(h)(2)(A) (in lieu of payments) shall be made annually in 
one lump sum payment to the State or Tribe no later than 90 days after 
the end of the federal fiscal year in which the collections are made.''
    Change section 872.1 l(b)(4) by striking the word ``shall'' and 
inserting ``may''.
    Justification: All of these changes are intended to reflect the 
discretionary authority vested in the Secretary to make payments to 
states and tribes through either grants or direct payments, depending 
on the preference and needs of the respective state or tribe. Section 
411 (h) uses the term ``payments'' which appears to embrace a wider 
degree of flexibility regarding distribution of funds other than just 
grants. See also the discussion on this topic above.
    Change subparagraph 872.13(a)(5) to read as follows:
    ``(5) States and Indian tribes that are not certified under section 
41 l(a) of the Act shall use any amounts available under this paragraph 
to achieve the priorities described in sections 403(a)(l),(2) and (3) 
of the Act, for water supply restoration under sections 403(b)(l) and 
(2) of the Act, for AMD abatement under section 402(g)(6) and for 
noncoal reclamation under section 409 of the Act.''
    Justification: The 2006 Amendments at Section 41 l(h)(l)(D)(ii) 
state that the unappropriated prior state and tribal share funds must 
be used as described at section 403. In interpreting the meaning of 
sections 411 and 403, the entire statute must be read in context. When 
doing so, it is clear that section 403 is modified by section 409. 
Section 409 provides for expenditure of funds at any priority 1 or 2 
site, regardless of commodity mined. Furthermore, section 409(b) states 
that the 50% state and tribal share can be used for noncoal reclamation 
(referencing section 402(g)). The unappropriated state and tribal 
shares are in fact the balance of the 50% shares referenced in section 
402(g) that have been held in abeyance over the years. There should be 
little ambiguity that this money is available for noncoal reclamation 
(as well as for the 30% AMD set-aside). If Congress had intended to 
somehow qualify or restrict the use of the unappropriated balances, it 
could easily have done so in section 411. However, it failed to do so 
and thus we can only assume that the traditional funding mechanism that 
has prevailed over the past 30 years remains intact. Such an 
interpretation is also consistent with the purposes and objectives of 
Title IV of SMCRA, which are to protect citizens from the adverse 
impacts of past mining practices--both coal and noncoal.
    Add a new subparagraph 872.13(b)(5) as follows: ``Payments referred 
to in section 872.13(b)(3) to certified States and Tribes shall be used 
with priority given to abandoned coal mine reclamation needs until the 
State or Tribe and OSM determine that abandoned coal mine reclamation 
is substantially complete. Thereafter, current in lieu payments will be 
used for purposes established by the state legislature or tribal 
council.''
    Justification: The law and draft rules are unclear as to how 
certified states and tribes may use current in lieu funds when the 
state or tribe has completed abandoned coal mine reclamation. Current 
in lieu funds in excess of those required for completion of abandoned 
coal mine reclamation should be used for purposes established by the 
state legislature or tribal council with priority given to addressing 
the impacts of mineral development.
Section 873.12--Future set-aside program criteria
    In subparagraph (a), change the last phrase to read as follows: 
``...are expended by the State or Indian tribe solely to achieve the 
priorities stated in Sections 403(a) and 409 of the Act, 30 U.S.C. 1233 
and 1239, after September 30, 1995''.
    Justification: This adjustment is needed to clarify that funds set-
aside by the states prior to December 12, 2006 are available for both 
coal and noncoal work.
Section 875.15--Reclamation priorities for noncoal program.
    Delete Subparagraphs (c) - (f)-
    Justification: These subparagraphs must be deleted in order to be 
consistent with the new provisions in the 2006 Amendments at section 41 
l(h)(l)(D)(i) regarding use of AML funds by certified states and 
tribes. Pursuant to this section of the 2006 Amendments, certified 
states and tribes are allowed to use their AML funds ``for the purposes 
established by the State legislature or tribal council of the Indian 
tribe, with priority given for addressing the impacts of mineral 
development''. Thus those provisions in OSM's existing regulations that 
provide for a concurrence role by the OSM Director are no longer 
applicable and should be removed. Furthermore, as we argue above, the 
payment mechanism that will attend the distribution of these funds will 
likely be different than what has occurred in the past, and therefore 
the provisions in subparagraphs (c), (e) and (f) will likely no longer 
be applicable.
Section 876--Acid Mine Drainage Treatment and Abatement Program
    Section 876.12 Eligibility--add the following: ``or up to 30% of 
the funds received pursuant to Section 412 l(h)(l) of the Act.''
    Justification: this language clarifies that up to 30% of the prior 
unappropriated state and tribal share balances distributed form 
Treasury funds may be deposited into state and tribal AMD set-aside 
funds.
Section 886.12(b)--Coverage and amount of grants.
    Change subparagraph (b) to read: ``Grants shall be approved for 
reclamation of eligible lands and water in accordance with sections 404 
and 411 of the Act and 30 CFR 874.12, 875.12 and 875.14, and in 
accordance with the priorities stated in sections 403, 409 and 411 of 
the Act....''
    Justification: We have added section 409 as part of the priority 
reference to be consistent with the above changes regarding noncoal 
reclamation and to specifically reference noncoal lands.
Section 886.13 (b)--Grant period
    Change subparagraph (b) to read as follows: ``The Director shall 
approve a grant period on the basis of the information contained in the 
grant application. The grant period should normally be for 3 years, and 
may be extended. Grants of funds distributed in Fiscal Years 2008, 2009 
and 2010 shall be awarded for 5 years.''
    Justification: We understand that OSM will not require specific 
projects to be listed in the grant application, so this phrase has been 
removed. We also Understand that OSM will allow extensions of the 
normal 3 year grant period and that those extensions may be for more 
than one year, which we believe is appropriate. Finally, we assert that 
the 2006 Amendments specifically call for a 5 year grant period for 
Fiscal Years 2008-2010 and that this is a mandatory requirement.
    One further note: it does not appear that the section 41 l(h)(l) 
Treasury funds are subject to any of the grant period timelines 
established by section 402(g)(l)(D). Nor does there appear to be any 
authority in the Act to establish timelines for the use of 411 funds. 
Thus, an annual distribution payment in the full amount due under 
section 411 should be available as an option for grants to each state/
tribe, which in turn could be deposited into a separate state account 
and considered state funds and used without restriction for any section 
403 priority (including AMD abatement).
Section 886.16(a)--Grant agreements.
    Change subparagraph (a) to read as follows: ``OSM shall prepare a 
grant agreement that includes a general statement of the types of work 
to be covered by the grant.''
    Justification: We assert that the grant agreement need only contain 
a general statement of the types of work to be covered by the grant, 
not a listing of specific projects. This change is intended to clarify 
that intent.
Section 886.26--Unused Funds
    Delete subsections 886.26 (a)(iii) and (iv). Also, delete 
subparagraph 886.26(b) and add the following: ``Deobligation 
requirements do not apply to certified States and Tribes.''
    Justification: No treasury payments should be subject to 
deobligation requirements. OSM should work with the states and tribes 
to insure that funds do not revert back to the Treasury. With maximum 
flexibility in designing payment protocols and with appropriate grant 
periods and applicable requirements, there should be no need for 
reversion of these payments, especially if OSM and the states/tribes 
are working together to closely monitor the situation.
    We appreciate the opportunity to submit these comments and trust 
that OSM will give them serious consideration as the agency moves 
forward with the development of the proposed and interim final rules. 
We would welcome the opportunity to meet with OSM to further discuss 
the draft rules, should you so desire. Should you have any questions or 
require additional information, please do not hesitate to contact us.

                               Sincerely,
John Husted                                           Gregory E. Conrad
President, NAAMLP                              Executive Director, IMCC

Attachment

cc:  NAAMLP Member States and Tribes
     IMCC Commissioners

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 ______
                                 
    The Chairman. Mr. Corra.

   STATEMENT OF JOHN CORRA, DIRECTOR, WYOMING DEPARTMENT OF 
            ENVIRONMENTAL QUALITY, CHEYENNE, WYOMING

    Mr. Corra. Good morning, Mr. Chairman. I wish to thank you 
and the members of the Committee for inviting the State of 
Wyoming to testify today.
    I am here to speak about the successful implementation of 
SMCRA, and to express a few concerns over the implementation of 
the recently passed amendment to that Act.
    Wyoming is the nation's leading producer of coal, providing 
fuel for over 35 percent of the nation's coal-fired electric 
power, and by far the largest contributor to the Abandoned Mine 
Land Account. Clearly, the success of SMCRA and how well it 
functions in the future is of critical importance to my state.
    Although my remarks are somewhat Wyoming-centric, they are 
shared by the other western states and the Reclamation 
Committee of the Western Interstate Energy Board. Over half the 
nation's coal production comes from our sister states in the 
West.
    Over the years, 134,000 acres have been disturbed by coal 
mining in Wyoming. A true measure of the success of SMCRA is 
that almost half of those acres have already been reclaimed. An 
example of successful reclamation is the Dave Johnson Mine in 
Wyoming, where the land has been reclaimed to the point where 
the untrained eye cannot tell the difference between the native 
undisturbed land and the reclaimed land. I have posters behind 
me that demonstrate that.
    The photographs illustrate some of these lands. Notice the 
abundance of shrubs, a feat that can be extremely challenging 
in the arid West, particularly in Wyoming, where many areas 
have annual rainfall of less than 15 inches.
    Another example is the designation of part of the 
reclamation at the Jacobs Ranch Mine as crucial winter habitat 
for elk. And that declaration was made by the Wyoming Game and 
Fish Division.
    Another success of SMCRA is the maturation of the 
relationship between the states and the Office of Surface 
Mining. Initially there was a high level of confrontation and a 
lack of trust. This relationship has changed for the better. 
There is a desire to assist the states and be responsive to the 
states' needs, as evidenced by several technical assistance 
programs now available. These programs help the states because 
of their ability to marshal resources far greater than what the 
individual states can afford.
    These programs also contribute to the development of state 
staffs. This has allowed Wyoming to respond to ever-increasing 
coal production while reducing the number of staff due to 
shortfalls in the Federal grant. I have a couple of exhibits 
behind me, Mr. Chairman, that demonstrate those trends.
    Another success story is the cooperative relationship with 
the industry that we regulate. Over the years we have come to 
understand the value of being responsive to each other's needs. 
To be effective and efficient, we have learned that open and 
honest communication is essential. We are truly partners in 
protecting the environment.
    The biggest challenge facing the states is funding. State 
regulatory programs provide an incredible return on the 
investment of Federal dollars. In Tennessee, where the OSM has 
the responsibility to administer SMCRA, the cost to the Federal 
government is $1.13 a ton of coal mined. In contrast, 
neighboring Virginia has primacy, and the cost to the Federal 
government is a mere 11 cents a ton. The difference is 
remarkable.
    The other important part of SMCRA that I want to discuss is 
Title IV, abandoned mine lands. Although much success has been 
experienced, this success is spotty. The Act requires that 50 
percent of the abandoned mine land fees be returned to the 
states to deal with the environmental consequences and legacy 
of past mining.
    In Wyoming, the closure of 1,500 hazardous mine openings 
and the reclamation of over 32,000 acres of land are just a 
couple of examples of success. With respect to AML non-coal 
work, I want to point out that over the past 20 years, OSM has 
recognized the importance of providing support to western 
states to clean up the overwhelming number of abandoned non-
coal sites.
    Speaking for Wyoming, we have been very pleased with the 
balance of support from OSM. At this time, however, we cannot 
predict that the future will be as productive as the past, 
primarily due to current rulemaking that will implement the 
changes to SMCRA. Although OSM has been very kind in allowing 
the states to provide their viewpoints on rulemaking, I am 
compelled to express some very serious concerns.
    Much of the state share of the fee collected was never 
returned. Using Wyoming as a case-in-point, over $500 million 
has been withheld over the years. The amendments, in part, are 
intended to rectify that, as well as other problems associated 
with the funds flow to the states.
    From Wyoming's perspective, the OSM appears to be using old 
tools to implement the requirements of the new Act, primarily 
in the form of the existing grant process, to manage and 
distribute fee collections. The new language in the recent 
amendments requires that certified states, such as Wyoming, 
will receive their unappropriated balance in seven equal 
payments, beginning in Fiscal Year 2008. It further requires 
that the state's share of annual fee collections going forward 
be in the form of a payment from the U.S. Treasury in lieu of 
an actual distribution from the current fees collected.
    The traditional administrative process, which consists of 
the states applying for, and the OSM approving and authorizing, 
projects and grants does not serve the intent of the Act, and 
would be seriously flawed.
    I conclude by reinforcing the key variables to ensure that 
we build on our past successes and avoid the mistakes. First is 
to ensure that the professional relationships that have been 
built between the regulated community, the states, and the 
Federal government continue to be nurtured.
    Second, the serious funding shortfalls must be addressed to 
ensure that we maintain efficiency and not lose effectiveness.
    Last, we need to take great care in drafting the rules that 
will implement the amendments to SMCRA. This is an opportunity 
to truly leverage what we have learned over the years, and 
ensure that the pressing reclamation needs across the country 
are addressed.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Corra follows:]

                  Statement of John Corra, Director, 
              Wyoming Department of Environmental Quality

    Good morning Mr. Chairman. My name is John Corra. I am the Director 
of the Wyoming Department of Environmental Quality. I wish to thank you 
and the members of the U.S. House of Representatives Committee on 
Natural Resources for inviting the State of Wyoming to testify at this 
hearing today.
    I am here to speak about the excellent history and successful 
implementation of The Surface Mining Control and Reclamation Act of 
1977 (SMCRA) and to express a few concerns over the implementation of 
the recently passed Amendment to that Act. Wyoming is the nations 
leading producer of coal, and by far the largest contributor to the 
Abandoned Mine Land reclamation program. Clearly the success of SMCRA 
and how well it functions in the future is of critical importance to my 
State.
    Although my remarks are somewhat Wyoming centric, they are shared 
by the other western states and the Reclamation Committee of the 
Western Interstate Energy Board which is associated with the Western 
Governor's Association.
    With the passage of the Clean Air Act in 1970, Wyoming coal 
production started a steady increase. Today, Wyoming is the country's 
largest producer of coal with production approaching 450 million tons 
per year; more than double that of any other state. Wyoming coal is 
used to generate over thirty five percent of the county's coal 
generated electrical power. Over half the nation's coal production 
comes from the western states.
    Coal mining is by far the most stringently regulated mineral 
extraction industry and yet has seen tremendous growth since the 
passage of SMCRA. The biggest success of SMCRA has been the ability to 
accommodate this growth while still achieving compliance with the 
regulatory requirements. For example, over 134,000 acres have been 
disturbed by coal mining in Wyoming (an area that is nearly three and a 
half times the size of the District of Columbia). A true measure of 
success is the reclamation, and almost half of those acres have been 
reclaimed. Several innovative approaches to creative reclamation have 
been developed and implemented in Wyoming and at other western coal 
mines, resulting in better and more cost effective reclamation. These 
include the use of variable topsoil replacement depths to achieve 
specific vegetation goals; the creation of bluff features to replace 
natural features removed by mining; and the replacement of alluvial 
valley floors. Coal operators in Wyoming and the western states have 
won numerous reclamation awards as a result.
    An example of successful reclamation is the Dave Johnston Mine in 
Wyoming where the land has been reclaimed to the point where the 
untrained eye cannot tell the difference between the native-undisturbed 
land and the reclaimed land. The attached Photographs 1 thru 4 
illustrate some of these reclaimed lands. Notice the abundance of 
shrubs, a feat that can be extremely challenging in the arid West, 
particularly in Wyoming where many areas have annual rainfall of less 
than 15 inches. These shrubs provide important habitat for sage grouse 
which was considered for listing under the Endangered Species Act. 
Another example is the designation of part of the reclamation at the 
Jacobs Ranch Mine in Wyoming as Elk Crucial Winter Range by the Wyoming 
Game and Fish Department (see attached Photograph 5).
    Another success of SMCRA is the maturation of the relationship 
between the states and the Office of Surface Mining (OSM). Wyoming, as 
with many other states, had a coal regulatory program in place prior to 
the passage of SMCRA. Initially, there was a high level of 
confrontation between the state regulatory agencies and OSM. The states 
felt that OSM's attitude was ``we're here to tell you how to do it 
right'' and the states' attitude was ``we know what we're doing as we 
were doing it long before you were created.--There was also a lack of 
trust as the states felt OSM was primarily interested in catching the 
states doing something wrong. This relationship diverted energy and 
resources from the true purpose of SMCRA--that of protecting citizens 
and the environment from the impacts of coal mining.
    This relationship has changed for the better. Most within OSM truly 
have a desire to assist the states and be responsive to the states' 
needs. Programs that have exemplified this attitude include the Western 
Regional Office of Technology Transfer, OSM's National Technical 
Training Program and the Technical Innovation and Professional Services 
Program. These programs provide great assistance to the states because 
of their ability to marshal resources far greater than what individual 
states could afford. Wyoming has used this assistance to improve our 
technical capabilities in the area of Global Positioning Systems to 
track reclamation progress and problem areas in the field. The OSM's 
technical assistance and training programs have also contributed to 
staff development. This has allowed Wyoming to respond to ever 
increasing coal production while reducing the number of staff devoted 
to coal due to shortfalls in the federal grant.
    The heart of any program and the key to its success or failure is 
the people who implement it. With the maturation of the coal regulatory 
program is a corresponding maturation of the staff, both in the states 
and in OSM. The states have been successful in attracting and retaining 
well-educated staff, many of whom have been with the program for more 
than 20 years. This experience is a key ingredient in the success of 
the regulatory program. Many of the environmental issues that we face 
are long term issues and retaining and developing an experienced staff 
is therefore a high priority.
    The science of reclamation is still young and progress takes time 
and people who are willing to devote their time and energy to the work. 
When SMCRA was passed 30 years ago, achieving successful revegetation 
in arid and semi-areas with less than 15 inches of average annual 
precipitation was considered to be nearly impossible. The mines have 
demonstrated revegetation is possible. Over the past 30 years, 
dedicated individuals with the state and the mines have developed new 
reclamation techniques and seed mixes to enhance reclamation. Not only 
to achieve success at the end of the ten year bond liability period, 
but beyond.
    Another of the key elements in our maturing programs is the 
development of a cooperative relationship with the industry that we 
regulate. In the early years of our program there was a great deal of 
distrust, animosity and a generally adversarial relationship all 
around. Over the years we have come to understand the value of being 
responsive to each other's needs. In order for our programs to be 
effective and efficient we have learned that open and honest 
communication is essential. The industry needs to understand the 
regulators' concerns and vice versa. The industry and the agencies have 
learned that we are truly partners in protecting the environment. 
Partnership is founded on mutual trust and respect. An adversarial 
relationship is not generally effective for either side. This 
partnership has been crucial as our staffing levels have decreased.
    The biggest challenge facing the states is funding and this is also 
the biggest failure of SMCRA. Section 705 authorizes the Secretary to 
make annual grants to states with approved State Programs for 50% of 
the cost of the program. This amount is increased for states with 
cooperative agreements for federal lands by an amount not to exceed the 
amount the Federal Government would have expended if the state had not 
entered into a cooperative agreement. This has not happened and Title V 
Grants to the states have not kept pace with inflation.
    Attached Figure 1 shows the rise of western production along with 
the level of Title V grants to the western states. The grants have been 
adjusted to constant 1994 dollars to account for inflation. The chart 
shows that, adjusted for inflation, grants to western states have 
actually decreased. Western programs are typically small in size even 
though coal production is equal to or greater than eastern or mid 
continent states. For example, Wyoming has the largest staff with 24 
employees, while other states have less than 20 people. And, there are 
some state staffs with fewer than ten people. A small shortfall in 
funding can have a huge impact on our programs.
    States are faced with two choices. One is to use state funds to 
make up the shortage in the federal grant. While this has occurred, 
states at times are faced with budget constraints of their own. Even 
for states with robust economies, there is little desire by state 
legislatures to accept unfunded federal mandates. The other option is 
to reduce the size of their programs and operate at lower levels of 
service. Vacancies go unfilled and staff is transferred to other 
programs. The loss of one or two staff positions due to grant shortages 
can mean a five to ten percent reduction in the program effectiveness. 
This can be devastating to a small program. Montana, Utah and Wyoming 
have all experienced a reduction in coal program staffing levels due to 
grant shortfalls. This trend cannot continue without significant 
impacts to the quality of the programs, i.e., permitting and compliance 
responsibilities and mine site reclamation. In Wyoming, coal production 
is soon expected to reach 500 million tons per year. We will not be 
able to maintain our permitting, inspecting and enforcement 
capabilities at current levels if the downward trend in staffing 
continues (see Figure 2). Building on the success of SMCRA over the 
past 30 years will be very difficult, perhaps impossible, unless 
federal funding policies are changed.
    The experience in Tennessee highlights the importance of OSM 
adequately funding state programs. Tennessee relinquished its state 
program and it is now a federal program state where OSM is the 
regulatory authority. In FY 2005, 2.98 million tons of coal was 
produced in Tennessee. OSM spent $3.37 million on this program for a 
regulatory cost of $1.13 per ton. For the same year, coal production in 
neighboring Virginia was 29.64 million tons. The total cost of 
Virginia's program was $6.8 million or $0.23 per ton. OSM's grant share 
of that cost is a mere 11 cents per ton! There is a huge difference 
between the cost of OSM implementing a coal program and the states 
doing so. By extrapolation, it is estimated the cost of running federal 
programs in the western states would be $56 million. By contrast the 
western states are only asking for $9 million in their grants for the 
federal cost share of their programs. SMCRA anticipated issuing grants 
to the states to pay for implementing the coal program as if OSM were 
to implement the program. The states are requesting an amount far less 
than that. The federal government is getting a fantastic return for the 
money spent on state grants, but the ability to sustain high quality 
programs into the future is jeopardized. For the continued success of 
SMCRA, the shortfall in the federal grants to the states must be 
addressed.
    The other important part of SMCRA that I want to discuss is Title 
IV--Abandoned Mine Lands. Although much success has been experienced, 
this success is spotty. The intent of SMCRA not only was to address the 
impacts from active mines but also pre-law mined areas that were never 
reclaimed. Many of these sites not only severely impact the environment 
but posed dangerous risks to human health and safety. To address these 
issues, SMCRA imposed a fee on coal production to fund the intent of 
Title IV. The Act requires that 50% of all abandoned mine land fees 
collected by the federal government be returned to the states for use 
in reclaiming abandoned mines, and to deal with the environmental 
consequences and legacy from mining conducted prior to enactment of 
SMCRA in 1977.
    State level Abandoned Mine Land Programs have had great success as 
evidenced by the large amount of work completed. This has been possible 
through the excellent efforts of state personnel and the cooperation 
from OSM over the years. In Wyoming, since 1983, AML has closed 1,500 
hazardous mine openings, reclaimed over 32,000 acres of disturbed land, 
abated or controlled 25 mine fires and thirty eight miles of hazardous 
highwalls have been reduced to safer slopes. Additionally, over $80 
million has been spent to mitigate and prevent coal mine subsidence in 
residential and commercial areas of five Wyoming communities, and $84 
million have been invested in infrastructure projects in communities 
impacted by past mining. We also maintain an active partnership with 
federal agencies to eliminate mine-related hazards on federal lands.
    The AML program's failure is that much of the state share of the 
fee collected was never returned to the states, thus postponing the 
important work that was intended to be completed by Congress at the 
time of passage of SMCRA. Using Wyoming as a case in point, over $500 
million has been withheld over the years. Meanwhile, impacts to the 
environment continue and lives continue to be lost in old mine 
workings.
    With respect to AML non-coal work, I want to point out that over 
the past 20 years OSM has recognized the importance of providing 
support to western states to clean up the overwhelming number of 
abandoned non-coal sites. Speaking for Wyoming, we have been very 
pleased with the balance of support from OSM. At this time, however, we 
cannot predict that the future will be as productive as the past, 
primarily due to current rulemaking that will implement the changes to 
SMCRA from the recently passed Surface Mining Control and Reclamation 
Act Amendments (Amendments). Although OSM has been very kind in 
allowing the states to provide their viewpoints on the rulemaking, I am 
compelled to inform this Committee of some very serious concerns.
    From Wyoming's perspective, the OSM appears to be using old tools 
to implement the requirements of the new Act, primarily in the form of 
the existing grant process, to manage and distribute fee collections. 
The Amendments specifically state otherwise. The new language in the 
recent amendments requires that certified states such as Wyoming will 
receive their un-appropriated balance in seven equal payments beginning 
in FY 2008. It further requires that the state's share of annual fee 
collections going forward be in the form of a payment from the U.S. 
Treasury in lieu of an actual distribution from current fees collected.
    The traditional administrative process which consists of the state 
applying for and the OSM approving and authorizing projects and grants 
does not serve the intent of the Act and would be seriously flawed. The 
Act does not specify a grant process, and very clearly does say that 
payments will be made. Indeed, Sec. 401(f)(3)(B) excludes certified 
states from receiving grants. The Act also specifies that these funds 
are to be used for purposes as established by the state legislature 
with priority given to addressing the impacts of mineral development. 
Our legislature has already moved to position itself to take on this 
task. A law creating an abandoned mine land funds reserve account was 
passed earlier this year. All funds received from the federal 
government from the Surface Mining Control and Reclamation Act 
Amendments of 2006 must flow into this account and remain there until 
appropriated by the legislature. The Wyoming Legislature has a long 
history of successfully fulfilling its fiduciary responsibilities and 
competently managing funds distributed from federal accounts. The 
capability exists to do the same with the fee payments that the Act 
calls for.
    Western states are committed to completing the abandoned coal mine 
reclamation work, and fulfilling the original intent of SMCRA. But they 
are also faced with significant threats to the environment and to human 
health and safety from abandoned non-coal mines. Current rulemaking 
efforts by OSM must allow discretion to these states so that this 
serious problem can be addressed. Each state is unique, and the OSM 
should be flexible and provide a regulatory framework that meets the 
needs of each state. We believe that the core Mission of OSM, and the 
original intent of SMCRA will not be compromised by doing so.
    I conclude by reinforcing the key variables to ensuring that we 
build on our past success and avoid the mistakes. First is to ensure 
that the professional relationships that have been built between the 
regulated community, the states and the federal government continue to 
be nurtured. Second, the serious funding shortfalls must be addressed 
to ensure that we maintain efficiency and not lose effectiveness. Last, 
we need to take great care in drafting the rules that will implement 
the Amendments to SMCRA. This is an opportunity to truly leverage what 
we have learned over the years, and ensure that the pressing 
reclamation needs across the country are addressed.
                                 ______
                                 
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    The Chairman. Thank you. Thank you for your testimony this 
morning.
    Let me begin by asking you, Secretary Timmermeyer--first, 
thank you for your kind comments. I appreciate it. And before I 
ask the panel the questions I have, let me ask the audience, is 
there anybody from the Office of Surface Mining that has 
remained with us? Anybody here representing the Office of 
Surface Mining even taking notes to send to them?
    Well, I guess they are closely glued to their tubes 
watching the internet, then. I hope they are.
    Madame Secretary, you noted that about 75 percent of all 
surface mining applications in West Virginia set forest land as 
a post-mining land use. This shows that the state is stepping 
up to the plate in terms of creating natural carbon sinks to 
capture greenhouse gases.
    But at the same time, continuing with the theme that I 
started in my opening remarks and in a question to OSM, to what 
extent are mountaintop removal operations in West Virginia 
being granted an AOC exemption in providing those post-mining 
land-use plans that the law requires--commercial, et cetera--as 
opposed to timberland?
    Ms. Timmermeyer. Well, I know that we recently went through 
rulemaking in West Virginia to do what we could to spur 
companies to choose forestland as a post-mining land use. And 
there was a lot of deliberation and thought and discussion with 
scientific and technical folks that went into that.
    And so I think that we are just beginning to see that 
choice of a post-mining land use to continue to be used more. 
And certainly, as you said, that is very significant when you 
talk about climate change issues, because a growing forest 
actually uptakes more carbon dioxide than even an old-growth 
forest. So that is something that is sort of a co-benefit of 
that.
    And post-mining land use is one of the most important parts 
of SMCRA. And certainly it is our job as regulators to continue 
to assure that the land is being used for a higher and better 
purpose. And as I said, we have several examples in West 
Virginia of where that is being done.
    The Governor right now is working on, as I mentioned in my 
comments, an Executive Order to continue to take that a step 
further and make sure that the industry understands that when 
that variance is obtained, that those post-mining land uses 
should be for development purposes, and that there should be 
things left behind for the communities to be used into the 
future.
    The Chairman. Let me ask you a little further on that last 
point about this Executive Order. As I recall, the Underwood 
Administration and the Legislature created what is called the 
Coal Field Development Office, that was supposed to have done 
just to what you refer. More with the framework of these 
activities is already set forth in section 515[c] of the Act, 
established 30 years ago. And I am just wondering, could you 
elaborate just a little more on that framework? On what this 
new framework is going to be?
    Ms. Timmermeyer. Well, there is a Coal Field Community 
Development Office that has been working with communities on 
master plans, but this really is going to take it a step 
further. And we are bringing in people who haven't typically 
been working on this issue. We are bringing in many of the 
state's economic development leaders and science leaders to 
work on the issue, to try to promote more economic development 
opportunities on post-mining land use sites.
    The Chairman. Thank you. I was aware that this is going a 
little further than previous efforts, as far as being more 
inclusive of those that are involved in not only post-land use 
planning, but also economic development and the new 
technologies and the new businesses we are seeking as we seek 
to diversify our economy.
    It does involve much more. We are involved with it at the 
Rahall Transportation Institute, for example, with Marshall, 
and working with these economic development planners in 
developing better post-mine uses of the land. So I appreciate 
that effort that you and the Governor are making.
    Deputy Chief Husted, let me ask you. I note the three 
unresolved issues the states still have with OSM, with respect 
to implementing the changes in the law that Congress passed 
last year, this is a concern. But I think overall most of the 
states are pretty flush as a result of these amendments, which 
made the states' grants mandatory, no longer subject to the 
whims, the caprices, the annual appropriation process.
    My question is, to what extent are the states prepared to 
now spend those funds for on-the-ground reclamation? Are 
contracts, for example, being expeditiously entered into?
    Mr. Husted. Mr. Chairman, to answer your question across 
the board, for all the 30 states and tribes, I would have a 
difficult time saying what collectively was being done. I can 
give you an example of what is happening in Ohio.
    For the last six months we have been working on a 
reorganization plan to be able to structure our organization to 
be able to handle the increased funds that will be made 
available to the state for the purposes of being able to do 
abandoned mine land reclamation. My assumption is that you will 
be seeing the same sort of efforts taking place in other states 
and tribes.
    We won't be seeing the large increase come for about 
another two to three years. But if Ohio is any example, you 
have states and tribes out there looking at their programs and 
trying to organize themselves in such a way so that they can 
efficiently and effectively spend that new money.
    The Chairman. Any others wish to comment on that question?
    Mr. Conrad. I might add, Mr. Chairman, that part of the 
case that we attempted to make to Congress over the course of 
the last several years regarding the need for reauthorization 
for increased funding was the fact that there are several of 
these projects on the shelf, ready to go. And I believe that 
the states are preparing now to move forward with many of 
those.
    The bigger frustration continues to be with some of the 
minimum program states, who also have these larger projects 
that sometimes take multi-millions of dollars to actually 
effectuate the project. And hence, their concern about moving 
that funding forward.
    The Chairman. OK. Madame Secretary?
    Ms. Timmermeyer. Mr. Chairman, yes, I would say that it is 
an interesting and uncommon problem to have in environmental 
protection that we have more money than we can spend right now. 
Certainly what we want to do is have a plan for spending that 
money responsibly.
    I think that the real test will be 15, 25 years from now, 
if people look back and say did this agency have a plan in 
place, and did they use the monies appropriately and 
responsibly for not only reclaiming the land, but also for 
making sure we don't have a legacy of acid mine drainage 
problems in the state, and also to get water to those folks who 
had their water infrastructure affected by these pre-law sites.
    So we are certainly working feverishly to be able to get a 
program together as well in West Virginia to spend the money 
appropriately.
    The Chairman. Great. Glad to hear that. The gentleman from 
New Mexico, Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman. I appreciate the 
testimony that each one of you have given.
    Director Corra, there is discussion right now here in 
Congress about climate change. And on the cutting edge of that 
discussion is the coal industry, because there are people 
saying we can't use coal to produce that.
    If we experience a decrease in production based on 
something that we might do here in Congress, what happens to 
the AML program, the Abandoned Mine Land Program? If production 
drops, how drastically is the AML affected?
    Mr. Corra. Mr. Chairman, speaking for the State of Wyoming, 
the amount of money that we presume will be sent to us by OSM 
is sufficient to take care of our problems going forward. As 
coal production is impacted by any Federal legislation, it is 
our sense that the impacts will be gradual rather than abrupt, 
and fees will continue to be paid.
    I might add that Wyoming is a certified state, and so what 
we receive actually is a payment in lieu of the fees that are 
collected from Wyoming, from the Treasury.
    The Chairman. Thanks. Secretary Timmermeyer, I appreciate 
your observation, and I really appreciate the balance in the 
comment that we are to reduce the impact, and yet keep people 
in business. I think that that is an evolved point of view that 
is very productive, and I appreciate that.
    You were mentioning the companies that were walking away 
since we implemented SMCRA. The companies that would walk away 
probably started before that, but of the start-ups after SMCRA, 
do you find the walk-away occurring at all, or very limited? 
How does that compare to before?
    Ms. Timmermeyer. I think it certainly occurs less because 
of the program we have in place about companies, once they have 
walked away, cannot mine again, those types of issues.
    But as with any business, it really trends. And we have 
seen throughout the years since SMCRA, there will be a lot of 
bankruptcies. And that just sort of goes with coal production, 
up and down.
    I think the issue that you raised with the smaller 
companies going out of business, and now that we have larger 
companies doing business is an important point. Because now 
when companies do walk away, we have a lot larger sites and 
multiple sites on our hands to deal with in our special 
reclamation program, which deals with those post-law, post-
SMCRA bankruptcy sites.
    And so that has been an interesting twist on the way that 
we have to deal with that program. But fortunately we have a 
process in place in West Virginia, as the Chairman is well 
aware, the recently authorized seven-up tax that was put on 
coal to help deal with the older special reclamation sites. And 
we are continuing to work into the future with dealing with 
ones that are current.
    Now that really is evolving into thinking about what to do 
with those facilities which have perpetual AMD treatment 
issues. And so now we are talking about the next generation of 
how to deal with those sites, which may be water trusts and 
those types of things.
    Mr. Pearce. Now, your testimony, to me--in fact, the 
testimony of all four of the participants--came across pretty 
positive that we are moving our way to protecting our 
environment, and yet still providing a significant energy 
resource for the country.
    Has your office, Secretary, done anything, any research 
about the coal-to-liquid discussion? In other words, that is 
another thing that is very highly politically charged. People 
saying it is absolutely not possible. And yet if it were 
possible, then coal could be really a tremendous help to us 
providing energy. Has your department done anything on studies 
about the safety of coal to liquids?
    Ms. Timmermeyer. Yes, sir, really at the request of 
Governor Manchin, along with my fellow agencies in the state. 
We have been working on that issue. We have all had folks in 
our agencies actually do site visits for other states that are 
trying to introduce this technology.
    And really, the first stage of that obviously is 
gasification before you liquefy. And so we are working 
diligently right now on a potential facility that will come 
into West Virginia to start that first stage of it, and then 
possibly move to that next stage.
    So certainly it is a technology that many feel has been in 
place in other countries. And to the extent that that will help 
with our energy independence in West Virginia, our Governor is 
certainly very interested in that, and we continue to work on 
that issue.
    Mr. Pearce. And that conversion can be done with an 
environmentally safe impact?
    Ms. Timmermeyer. That would be the key to making it happen. 
Yes, sir.
    Mr. Pearce. OK. Well, thank you, Mr. Chairman. I see my 
time is up.
    The Chairman. The gentleman from Pennsylvania, Mr. Shuster.
    Mr. Shuster. Thank you, Mr. Chairman. And thank all of you 
for being here today.
    First of all, a point of clarification. Are all six or 
seven of those binders one permit?
    Ms. Timmermeyer. Yes, sir, this is one permit that was 
signed this week.
    Mr. Shuster. All of them, OK.
    Ms. Timmermeyer. And this is a separate 1977 one.
    Mr. Shuster. OK. I just wanted to be sure of that. A 
question that I have is concerning the funding. And the debate 
over the last couple years in Congress has been certainly to 
try to get increased funding for abandoned mines, but the 
debate has raged. Does the money go to the West, where now most 
of the coal is produced, and that is where most of the fees are 
coming from? Or does the bulk of it stay in the East, where for 
the last half of the 1800s and the first half of the 1900s, 
coal was, for the most part, coming out of West Virginia, 
Pennsylvania, which fueled the engine of America? So that is 
the debate.
    So I wondered if each of you can comment. I can probably 
guess by where you are from, where you are going to come down. 
But I am especially interested, Mr. Corra, what your view is, 
and what your argument is as to why the West should get--and I 
know on the surface what you are going to say, but give me your 
argument. Why don't we start with you first?
    Mr. Corra. Well, Mr. Chairman, there was a bargain struck, 
if you will, when the Act was passed. And the Act clearly 
describes that funds are to be returned to the states, in a 
specific proportion. And that has never happened. And we just 
have that as a matter of principle, and that is our view.
    I might add, though--I think it gets to your question, 
also--the recent amendments to the Act does provide for the 
actual fee collections which Wyoming coal miners will continue 
to pay on into the future, which will probably amount to about 
$125 million a year. Those actual fee collections are now going 
to be sent to other states where there are significant needs, 
such as Pennsylvania and West Virginia and some of the others. 
My personal feeling about that is that is reasonable.
    In return, what we get is, for our fee share is we will get 
payments from the Treasury. And quite honestly, Mr. Chair, we 
are still not sure how that is going to happen, and if we will 
get those payments. But we do believe, and we appreciate the 
efforts of Congress in recognizing the western states, 
particularly Wyoming, in terms of returning those state shares.
    Mr. Shuster. Secretary Timmermeyer, if you might respond to 
that.
    Ms. Timmermeyer. Well, you are right in your statement that 
the eastern states, like Pennsylvania and like West Virginia 
and also Virginia, made sacrifices years ago. And really, to be 
able to fuel the nation's economy back during that time. And so 
it was very important to us that that be taken into 
consideration as the fund was reauthorized.
    That said, I think that the result of the reauthorization 
was a compromise, and a very good compromise. And we are 
certainly excited about the prospects of the monies that we are 
going to receive over the next 15 years. And I think that that 
is our focus at this point.
    Mr. Conrad. One thing I might add, Congressman, is when we 
were first looking at potential accommodation of everyone's 
interests to find a piece of legislation that would work to 
address this issue, there was a meeting, an attempt of the 
meeting of the minds. And some of the states represented at 
this table came together early on to try to resolve those 
eastern and western differences and concerns. And the result of 
that, from my perspective, was a reauthorization bill that does 
do that, and will allow us to address the high-priority coal 
issues in the East, as well as the concerns in the West.
    Mr. Husted. Yes, Mr. Chairman, Mr. Congressman, I believe 
that the amendments passed in 2006 to SMCRA do address the 
historic coal mining problems that have plagued many of the 
eastern states. With regards to the fairness between the East 
and the West, I believe that Director Corra addressed that as 
well as it could be. But I am very satisfied with the 
reauthorization of SMCRA that took place in 2006.
    Mr. Shuster. And I wonder if you could comment--could I ask 
one more quick question--on productivity of reclaimed land. 
What have you found? I saw the pictures there, and you turn 
them into schools. But I am talking more about when you are 
turning them back into forests or other agricultural lands. How 
has the productivity been on reclaimed land, as compared to 
land that has not been mined?
    Mr. Conrad. With regard to trees, reforestation----
    Mr. Shuster. Trees, anything. Growth, agriculture, anything 
that----
    Mr. Conrad. Yes, there are statistics that are gathered on 
that. Several of the universities, like Virginia Tech, Indiana 
University for the mid-continent, for prime farmland 
productivity, Southern Illinois University, they have been in 
the forefront of gathering those kinds of productivity numbers 
and doing those kinds of analyses in terms of particularly the 
restoration of the soil to allow those kind of productivity 
numbers to get where they are today.
    And in almost every instance, they are in higher, better 
condition than would have been expected, and in some cases 
higher and better than before the land was mined. So we are 
seeing that we are able to accomplish that with some of the new 
technologies and techniques that are being used in the 
reclamation process.
    Mr. Shuster. OK. Does anybody else care to comment?
    Mr. Corra. Mr. Chair, very quickly I would just say in 
Wyoming, we have seen very good productivity. And one of the 
things that was integral to that was some flexibility on the 
part of OSM in working with us, for example on topsoil 
replacement, which, in the arid parts of our state, was pretty 
significant enabling us to do that. But we have seen good 
productivity.
    Mr. Shuster. And when good productivity, is that close to, 
as good, or better than before it was mined? That states a 
general question.
    Mr. Corra. Sure. Mr. Chairman, for the most part, better 
than it was before.
    Mr. Shuster. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Shuster. All of you have 
commented on Congress's action in the end of last session, 
reauthorizing the AML program and how it was a compromise. You 
have saluted many people, and certainly it was a coalition that 
had to come together to produce this legislation. The United 
Mine Workers deeply involved, the coal industry deeply 
involved, the Bituminous Coal Operators Association. All of you 
were involved in it, and many across the Appalachian coal 
fields were involved in putting together this compromise. And 
finally we were able to secure the approval in the Congress.
    I would also like to add and compliment a former member of 
this committee on what was then the majority side, Barbara 
Cubin, from your home state of Wyoming, who was instrumental on 
this effort, as well. We introduced the original Cubin-Rahall 
language, a bipartisan legislation that started us down this 
road to where we are today, in a successful piece of 
legislation.
    Ladies and gentlemen, thank you for being with us today. 
Did you have any further questions? OK. Thank you.
    Mr. Conrad. Thank you, Mr. Chairman.
    The Chairman. Our next panelist is Mr. Cecil E. Roberts, 
President, United Mine Workers of America. It says on the 
agenda Fairfax, Virginia, but I know him to be Cabin Creek, 
West Virginia. And the Chair would like to compliment Cecil for 
his efforts not only on behalf of our working men and women in 
our coal mines in West Virginia and across the coal fields, but 
in so many legislative efforts. Whether it is reauthorization 
of the AML or whether it is the safety and health of our 
nation's coal miners, Cecil is a true leader. And we are 
honored to have you here this morning.

 STATEMENT OF CECIL E. ROBERTS, PRESIDENT, UNITED MINE WORKERS 
                 OF AMERICA, FAIRFAX, VIRGINIA

    Mr. Roberts. Let me thank you, Mr. Chairman, for the 
invitation to be here today. And I would also like to thank you 
for your years and years of service, particularly to the coal 
miners of this nation. You give me much too much credit with 
respect to the health and safety fights that we have been 
through.
    I want to thank you for your efforts last year, when we 
faced a tremendous crisis, where 47 miners lost their lives in 
the nation's coal mines. You and other Members of the House and 
Senate took the leadership position that we needed stronger 
health and safety laws, and you led that fight. And I want to 
thank you for that.
    I want to thank you for the passage of SMCRA back in 1977. 
You mentioned the Buffalo Creek disaster, which I think was 
probably the impetus for the passage of this law.
    I just want to point out that many UMWA members lived on 
Buffalo Creek. Many UMWA members actually worked for the 
Pittston Company that constructed the impanelment that failed. 
It was a devastating time for all of us. And for you to be able 
to come to Congress as a freshman House Member and pass this 
law was truly a remarkable feat.
    And I would just say to all of us, as we reflect on the 
benefits of SMCRA over the past 30 years, there is certainly a 
lot of criticism that could be offered, obviously, and it has 
been offered today. But I would just suggest to everyone that 
we would have had many more Buffalo Creeks had we not passed 
this law 30 years ago.
    I come today as a representative of coal miners. The United 
Mine Workers have been in the coal mines for 117 years. Our 
original fights obviously were for better working conditions in 
the coal mines, fewer working hours underground, more health 
and safety, higher wages and benefits. Miners were originally 
paid by the ton, and that is the only way they got paid. If 
they didn't load any coal, they didn't get paid.
    But we have been involved in the early fights over housing 
for coal miners, and the company houses and the company towns, 
fighting over fights dealing with the company store and being 
treated fairly by the company store and their employers. We 
have been in these communities; that is where our people live. 
With respect to the mountains and the hills of West Virginia 
and Kentucky and all across this nation, coal miners do a 
couple different things. They hunt and they fish, and they mine 
coal, for sure. So it is important to our members that they 
have these opportunities available to them on a recreational 
basis, and also a safe and healthful place to work.
    I think I should just say to this committee that Congress 
stepped forward to aid coal miners in 1946 and 1947 with the 
passage or the signing of a contract that was signed by the 
Federal government to provide healthcare to retirees. And one 
of the main reasons I wanted to be here today is to speak to 
that issue.
    In 1946 the government seized the coal industry, and John 
L. Lewis and the United Mine Workers went on strike. And the 
government signed a contract with John L. Lewis saying that 
retirees would have lifetime health coverage.
    We talk about abandoned mines. We had abandoned people back 
in 1992. And through your leadership, particularly in the 
House, Mr. Chairman, we were able to pass the Coal Act. And of 
course, with Senator Rockefeller and Senator Byrd in the 
Senate, we provided legislation that protected coal miners' 
healthcare.
    That promise fell apart also as time went on, because some 
of the mechanisms that were put in the original law by Congress 
collapsed.
    I have just come today to say thank you to you. And I also 
want to mention Representative Cubin from Wyoming; she was very 
helpful with respect to trying to see and deal with the 
problems of retirees from the industry.
    Someone mentioned Horizon Natural Resources here earlier. I 
would just point out that those people who worked for Horizon 
Natural Resources, a huge company, when it went out of business 
they dumped like 5,000 or so pensioners. The UMWA paid their 
healthcare for eight months while this legislation was pending. 
Now they are covered by healthcare that is funded by the 
interest money that was set up in 1992 originally.
    And then I want to commend you and this committee for the 
work that you did last year. It is so hard to bring all the 
parties together. And I think I should publicly thank everyone 
that was involved in this. All the states looked at these 
retirees and said they should be taken care of. Every state 
said that. The environmental community said that, and I thank 
them. And the coal industry said we realize that we can't pass 
legislation without dealing with these people who gave their 
lives to this industry.
    I will just correct one thing that was said here earlier, 
when the question was posed about how many coal miners are 
there in the United States. And the answer was about 250,000. 
That is incorrect. There are less than 100,000 coal miners in 
the United States. I think that number varies somewhere between 
65,000 to 75,000 nationwide.
    But I would point out, and then I will take any questions 
that you have, that there are many people who make their living 
supporting the coal industry. And just to give you an example 
of that, there are 700,000 people that have a job in West 
Virginia. One hundred thousand of them are tied somehow to the 
coal industry, and there are only approximately 14,000 to 
17,000 coal miners in West Virginia. So the remainder of those 
people are supporting the coal industry. So there is a lot of 
jobs indirectly tied to this industry that provides good wages 
and good benefits, and I thought it would be helpful to correct 
that error from previous testimony.
    I would be glad--I know I went over a bit, and I apologize 
for that. But I will take any questions that you might have.
    [The prepared statement of Mr. Roberts follows:]

               Statement of Cecil E. Roberts, President, 
                     United Mine Workers of America

    Chairman Rahall, members of the Committee, I am Cecil E. Roberts, 
President of the United Mine Workers of America (UMWA). The UMWA is a 
labor union that has represented the interests of coal miners and other 
workers and their families in the United States and Canada for over 117 
years. We appreciate the opportunity to appear before the Committee to 
celebrate the thirtieth anniversary of the Surface Mining Control and 
Reclamation Act of 1977 (SMCRA), an historic piece of legislation that 
continues to be of vital importance to mining communities across this 
nation.
    When enacting the Surface Mining Control and Reclamation Act in 
1977, Congress found that ``surface and underground coal mining 
operations affect interstate commerce, contribute to the economic well-
being, security, and general welfare of the Nation and should be 
conducted in an environmentally sound manner.'' That statement is as 
true today as it was in 1977. Coal mining contributes significantly to 
our national economy by providing the fuel for over half of our 
nation's electricity generation. Coal miners are proud to play their 
part in supplying our nation with domestically-produced, cost-
effective, reliable energy. We also live in the communities most 
affected by coal mining and support the intent of Congress that coal 
mining must be conducted in an environmentally sound manner.
    Throughout our 117 year history, the UMWA has been in the forefront 
of bringing social, economic and environmental justice to our members 
and the nation's coal fields. Our members toil in the nation's coal 
mines to provide domestically-produced energy that helps fuel our 
economy. The UMWA's goal is to protect the interests of our members on 
the job and when they return home to their families after a hard day's 
work. The UMWA has led the fight throughout our history to enact tough 
mine health and safety laws to protect miners on the job. 
Unfortunately, advancements in health and safety too often happen only 
after miners are killed on the job, as we all witnessed again last 
year. We have fought for compensation laws to assist those who are 
injured and occupational disease laws to provide for those whose health 
has been taken from them. The UMWA has also been in the forefront of 
providing health care and pensions to workers, establishing one of the 
first industry-wide multiemployer benefit plans. Through the historic 
1946 Krug-Lewis Agreement--signed in the White House between Secretary 
of the Interior Julius Krug and UMWA President John L. Lewis--the UMWA, 
the coal industry and the federal government created the UMWA Health 
and Retirement Funds. Over the last 60 years the UMWA Funds has 
provided pensions and health care to hundreds of thousands of our 
nation's coal miners and helped to modernize the delivery of health 
care in coal field communities across the nation.
    Indeed, years ago the Funds established ten regional offices 
throughout the coal fields with the direction to make arrangements with 
local doctors and hospitals for the provision of ``the highest standard 
of medical service at the lowest possible cost.'' One of the first 
programs initiated by the Funds was a rehabilitation program for 
severely disabled miners. Under this program, more than 1,200 severely 
disabled miners were rehabilitated. The Funds identified disabled 
miners and sent them to the finest rehabilitation centers in the United 
States. At those centers, they received the best treatment that modern 
medicine and surgery had to offer, including artificial limbs and 
extensive physical therapy to teach them how to walk again. After a 
period of physical restoration, the miners received occupational 
therapy so they could provide for their families.
    The Funds also made great strides in improving overall medical care 
in coal mining communities, especially in Appalachia where the greatest 
inadequacies existed. Recognizing the need for modern hospital and 
clinic facilities, the Funds constructed ten hospitals in Kentucky, 
Virginia and West Virginia. The hospitals, known as Miners Memorial 
Hospitals, provided intern and residency programs and training for 
professional and practical nurses. Thus, because of the Funds, young 
doctors were drawn to areas of the country that were sorely lacking in 
medical professionals. A 1978 Presidential Coal Commission found that 
medical care in the coal field communities had greatly improved, not 
only for miners but for the entire community, as a result of the UMWA 
Funds. ``Conditions since the Boone Report have changed dramatically, 
largely because of the miners and their Union--but also because of the 
Federal Government, State, and coal companies.'' The Commission 
concluded that ``both union and non-union miners have gained better 
health care from the systems developed for the UMWA.'' Federal funds 
have substantially improved the overall quality of medical care in 
these previously under-served communities.
    Mr. Chairman, you know America's coal miners about as well as 
anyone I know. I think you would agree that they value the natural 
resources that God has given us. In their free time, you will find many 
of them fishing in the streams and hunting in the forests throughout 
the coalfields. Because of their love of the land, they are strong 
defenders of the need for responsible reclamation laws. Because they 
work in a vital energy industry, they also know that the nation needs 
the product of their labor. Perhaps more than most, they understand the 
need for responsible policies that balance our need for energy with our 
need to protect the environment. We believe the 1977 Surface Mining Act 
struck the right balance and the authors and supporters of that effort 
should be proud of their accomplishments. I know that Chairman Rahall 
was a member of the Committee at that time and a strong supporter of 
SMCRA during the Congressional debates of the 1970s and ever since. We 
are proud to say that the UMWA has been a steadfast supporter of SMCRA 
throughout its 30 year history.
    While more than $5.7 billion has been appropriated for mine site 
reclamation since 1978, there are still many more sites requiring 
attention. With the reauthorization of the AML program as part of the 
Tax Relief and Health Care Act last December, Congress extended the AML 
Fund for 15 years. States and tribes will finally start to receive the 
resources they need to take care of the reclamation projects within 
their respective jurisdictions. The 2006 AML reauthorization also 
provided the long term financial solution for the health care of the 
thousands of abandoned retired coal miners and their dependents whose 
employers went out of business and ceased fulfilling their contractual 
promises to pay for their retirees' health care.
    Coal miners especially appreciate the substantial financial support 
SMCRA has provided through the Abandoned Mine Land Fund (AML) to 
reclaim abandoned coal mines in the coal field communities. Through the 
AML Fund, mining communities across this country have received billions 
of dollars--monies collected through fees imposed on a per ton basis 
for all coal that is mined in the United States--to clean up abandoned 
coal mines. While the overwhelming majority of these funds has paid for 
the reclamation of abandoned mines, with the passage of the 1992 Coal 
Act, interest earned on the AML principal since 1995 has been used to 
help support the health care needs of abandoned retired coal miners. In 
other words, the Surface Mining Control and Reclamation Act has 
provided essential support for both the needs of abandoned coal mines 
and abandoned retired miners and their dependents. Once again, Chairman 
Rahall and other members of this Committee played a vital role in 
ensuring that the needs of abandoned coal miners were not forgotten.
    When Congress authorized the use of AML interest to help finance 
the cost of health care for retired coal miners, it was a logical 
extension of the original intent of Congress when the AML Fund was 
established. Congress joined these two programs together for a specific 
reason--they both represent legacy costs of the coal industry that 
compelled a national response. When Congress created the AML Fund in 
1977, it found that abandoned mine lands imposed ``social and economic 
costs on residents in nearby and adjoining areas.'' When Congress 
enacted the Coal Act in 1992, it also was attempting to avoid 
unacceptable social and economic costs associated with the loss of 
health benefits for retired coal miners and widows. Moreover, as the 
U.S. Government Accountability Office (GAO) found in its 2002 report on 
the Coal Act entitled ``Retired Coal Miners' Health Benefit Funds: 
Financial Challenges Continue,'' CBF beneficiaries traded lower 
pensions over the years for the promise of their health benefits and 
engaged in considerable cost sharing by contributing $210 million of 
their pension assets to help finance the CBF.
    Although some criticized the use of AML interest money to help 
cover the cost of coal miners' retiree health care, this marriage 
proved to be the catalyst for last year's reauthorization of the AML 
program which successfully addressed the varied--and sometimes 
conflicting--needs of the many interested parties. With all parties 
having a stake in the SMCRA debate--states and tribes, coal companies, 
environmental groups, and UMWA members--working together for the 
passage of the Tax Relief and Health Care Act last year, Congress was 
able to forge a political consensus that had eluded us for many years, 
allowing us to achieve goals that many of us have been pursuing since 
the passage of SMCRA in 1977 and the Coal Act in 1992. Not only did 
that legislation succeed in securing the long term financial support 
for retired coal miners' health care, but it modified the AML formulas 
to provide historic production states that have the most serious 
reclamation problems with higher allocations, provided relief to 
operators by reducing the AML fees by 20%, and also mandated that 
minimum program states are guaranteed at least $3 million each year for 
reclamation efforts. In addition, the legislation took a portion of the 
AML fees collected off budget and, over a seven year period, all states 
and tribes will receive from the General Treasury an amount equivalent 
to their unappropriated balances in the AML fund. The end result of the 
legislation is that it resolved many longstanding and contentious 
disputes that had blocked AML reform for several years. More 
importantly, the legislation will mean more funds will be available to 
address vital reclamation needs in the coal fields.
    In terms of abandoned retiree health care, the passage of the Tax 
Relief and Health Care Act has addressed the financial problems that 
have plagued the Coal Act since its passage in 1992. As many are aware, 
adverse court decisions and an unanticipated series of bankruptcies in 
the coal and steel industries had eroded the original financial 
mechanism Congress intended to fund Coal Act health care obligations. 
As a result, on three separate occasions Congress had to provide 
emergency appropriations, using unused AML interest money, to keep 
health care benefits from being cut. With passage of last year's AML 
reauthorization, these and many other issues have been resolved.
    Mr. Chairman, the UMWA and its members are grateful that Congress 
forged a bi-partisan consensus to reauthorize the AML Program and 
provide a long-term solution to the coal industry retiree health care 
financial crisis. We have in previous appearances before the Committee 
provided the historic context for the government's unique promise of 
health care to coal miners. You know all too well that over their 
working lives, these retirees traded lower wages and pensions for the 
promise of retiree health care that began in the White House in 1946 
when the Krug-Lewis agreement was signed. In 1992, miners willingly 
contributed $210 million of their pension money to ensure that the 
promise would be kept. Everything that this nation has asked of them--
in war and in peace--they have done. They are part of what has come to 
be called the ``Greatest Generation'' and deservedly so. They have 
certainly kept their end of the bargain that was struck with President 
Truman. In 2006 we were delighted that Congress forged the political 
consensus that allowed the federal government to keep its promise once 
again.
    Today, we appreciate having this opportunity to thank every Member 
of Congress for remembering the plight of our retired miners and 
widows. I come before you to convey a heartfelt thank you from all the 
retirees including the original 112,000 beneficiaries for the hard work 
of this Committee in keeping that promise.
    I would be happy to answer any questions you may have.
                                 ______
                                 
    The Chairman. Thank you, Cecil. You have referred to the 
original legislation in 1992, in which I was heavily involved, 
as well. It did allow for the first time the interest on the 
unappropriated balance in the AML to be used for coal miner 
healthcare. You refer to that and the ensuing amendments of 
last year, and all the individuals and groups involved. I 
certainly commend you for your leadership, as well.
    Mr. Roberts. Thank you.
    The Chairman. It would not have happened if the United Mine 
Workers had not been there and deeply involved on a daily 
basis, especially the individual sitting right behind you in 
the name of Bill Bannick. We appreciate the professional and 
respected team you have working for you here.
    So I guess I would just ask one simple question. And you 
referred to the promise of healthcare that goes back to John L. 
Lewis days. Have we kept the promise? Has Congress kept the 
promise of cradle-to-death healthcare for our nation's coal 
miners?
    Mr. Roberts. I can report to you, as of the end of 
December, every retiree that had the requisite years of 
service--20 years, age 55--and whose company was gone, went 
bankrupt, abandoned them, as you will; as of the end of 
December, every one of those retirees had their healthcare. And 
this Congress I think should feel good that they kept the 
promise that this government made.
    Now, as time goes on, people will retire. There will be 
some dispute, debate about the eligibility requirements. But 
when we finalized this bill at the end of December, every 
single retiree who was pension-eligible or had that promise 
made to them was getting their healthcare. And I just feel that 
I should say thank you to this Congress for that.
    The Chairman. Well, I am glad to hear that. And you 
mentioned it, and I mentioned it throughout these 
deliberations. As we seek to address the problems of abandoned 
mine lands, it is most important that we not forsake the 
abandoned coal miner, him or herself.
    Mr. Roberts. That is true. And one of the things I would 
point out, more often than not when a mine site is abandoned, 
that company has probably gone into bankruptcy; probably left 
people without their wages, without their benefits, without 
their healthcare.
    And so we have two types of problems here with respect to 
this. It is abandoned mines and the communities that are 
adversely affected by that. But we also have abandoned human 
beings who gave their lives to this industry.
    The Chairman. Thank you. Let me ask you one final question. 
Thomas Jefferson once wrote, and I quote, ``I much prefer the 
dreams of the future than the history of the past.'' And I 
applaud that sentiment. Yet the past of your union is so 
clearly grounded in places like Paint Creek, Cabin Creek, Blair 
Mountain, where the struggle for dignity, the struggle for 
workers' rights were fought with blood. That while we can 
prefer the dreams of the future, the past certainly cannot be 
ignored. Equally with the history of surface mining.
    So as we look to the future, do you see a time in the hills 
and hollows of the Appalachian coalfields where we can have a 
dovetailing, as I referred to in my opening statement, of the 
interests of environment with that of surface mining?
    Mr. Roberts. As has been properly pointed out here today, 
it is a difficult struggle. But I happen to believe, as we came 
together last year with so many competing interests, and sent 
together people from Wyoming and people from Pennsylvania and 
West Virginia, and all across this nation--quite frankly, 
Republicans and Democrats, conservatives and liberals--and came 
to grips with this extremely, extremely complex problem of how 
to re-fund and reauthorize AML, and we did it. It wasn't easy, 
but it took your leadership and others, and Representative 
Cubin's leadership also. I would like to think that people of 
good mind and good heart and common objectives can do that.
    The Chairman. Thank you. Mr. Pearce?
    Mr. Pearce. Thank you, Mr. Chairman. I appreciate your 
testimony, Mr. Roberts.
    As I listened to Secretary Timmermeyer's on the last panel, 
she talked about the companies that are more sophisticated, 
that was from her environmental point of view that they are 
more geared for today's regulatory environment in our culture.
    What about from the worker's point of view? Are the 
companies more sophisticated? Give me a little bit of insight 
on that.
    Mr. Roberts. Well, companies, I am sure the industry might 
have a different perspective on this, on any given day I am 
either up here working with the industry or fighting with the 
industry. And that is just the nature of what I do.
    But I think there are many sophisticated companies out 
there, and then there are some companies that are not too 
sophisticated, and quite frankly are living way, way in the 
past, just to be quite honest about it. But many of the 
companies that we deal with, we have disagreements, for 
instance, with Council and Peabody, but we find a way to work 
out our differences. And generally when they have a good labor 
relations program, they don't necessarily leave the environment 
in a mess, either.
    But it is the companies that want to have bad labor 
relations, that takes you to bad environmental record. There 
are some companies--and you can look at the statistics and see 
who they are--that have horrendous environmental records in 
West Virginia.
    Mr. Pearce. Talking about environmental things, you heard 
my questions earlier about coal to liquids. Has the UMWA taken 
a position on coal to liquids?
    Mr. Roberts. Absolutely. We have supported this. It seems 
ironic to me, if you read the history of World War II, the Nazi 
war effort was fought with fuel made from coal because the oil 
supplies were bombed by the Allies. But they found a way back 
in the 1940s to convert coal to liquid and jet plane fuel, and 
fueled artillery pieces, and transported them by fuel made from 
coal.
    There is a picture, I am sure Congressman Rahall has seen 
it, of former Senator Jennings Randolph. It must have been 
taken I guess in the late fifties, mid-fifties. He was in a 
plane that he was flying that someone had made fuel from coal, 
and he was flying in that plane. It is a very famous picture 
back in West Virginia.
    We are extremely supportive of this program.
    Mr. Pearce. OK. So I have an online petition that was 
submitted to us that basically says, I think, that liquid coal 
would be a disaster in our fight against the climate crisis; 
Congress should vote against tax breaks and substitutes for 
coal. So I suspect that I would clearly understand that you 
would ask that I not respond in a positive way to this 
particular online poll?
    Mr. Roberts. Oh, I am not going to sign that petition, if 
that is what----
    [Laughter.]
    Mr. Pearce. What about the, there is a move in Congress to 
have the coastal states be allowed to prevent coal mining in 
inland states. Has your UMWA taken a position on that?
    Mr. Roberts. We have not. When you talk about the inland 
states, very little coal--and I might stand to be corrected 
when I give this a little bit of thought--is mined from inland 
states. But I guess----
    Mr. Pearce. New Mexico does have----
    Mr. Roberts. Yes. And I think, I don't know if Louisiana 
has a coal mine now or not. But New Mexico does. We have UMWA 
members mining coal in New Mexico.
    Mr. Pearce. But the discussion is that we would allow those 
states on the coast to dictate, to actually shut down mining in 
the----
    Mr. Roberts. Oh, you are saying that coastal states could 
dictate to anyone.
    Mr. Pearce. Yes, yes.
    Mr. Roberts. No, we would not be supportive of that.
    Mr. Pearce. That actually is a provision.
    Mr. Roberts. I misunderstood your point.
    Mr. Pearce. I appreciate that. It was actually a provision. 
It was in H.R. 2337 that we passed out of here, that would 
allow that to occur. It is a provision that concerned me quite 
a lot, and we actually spoke about that and tried an amendment, 
unsuccessfully.
    But the stakes are very high right now for the coal 
industry. The climate-change argument has coal exactly in its 
bomb sites, and there are people who would shut down the entire 
production of electricity from coal, who we have had testimony 
in this room that would say stop coal, use wind and solar. And 
you produce 52 percent of the nation's energy; wind and solar, 
1 percent producers. I personally don't see how we could get 
from 1 percent wind to let 50 percent of our power be produced 
by wind.
    Have you got any comments about that focus that is on you 
all as an industry?
    Mr. Roberts. Well, our analysis of removing coal from the 
energy mix would be impossible. If you passed a law today and 
said you couldn't burn coal, why, I think you would be 
revisiting that issue pretty rapidly, because many people would 
lose their lights, their heat, their air conditioning.
    Let me make another comment about that, if I might. We 
approach this from another direction. There are 36 or 37 
million people in this country living in poverty, as we speak. 
Coal provides the cheapest form of electricity in the United 
States, and we have benefitted from that for many, many years. 
And there isn't enough natural gas, by the way, to substitute 
for coal. And if there was enough natural gas to substitute for 
coal, people's electric bills would either double or triple, 
more likely triple. Although the BTU cost right now is about 
twice as much as the BTU cost from coal.
    When you start talking about taking coal out of the 
competition, then natural gas prices are going to go through 
the roof. So people probably could not afford to pay their 
electric bills if that happened.
    With respect to wind, there is no way to generate enough 
electricity from wind to substitute what coal does.
    I think the answer here, and we have been an advocate of 
this for many, many years, and we have been here to Congress to 
advocate that we invest in technology to find a way to remove 
carbon from the burning of coal. The issue about coal to 
liquids is that particular issue: you do generate more carbon 
when you do this than with just gasoline that we use today.
    But it seems to me that we invest an awful lot of money, 
Congressman, to figure out how to fight wars, and all the 
technology that goes into smart bombs and all this. I would 
like to see us invest some of that money in smart energy and 
how to burn coal more cleanly, so we maybe wouldn't need all 
those weapons that we invest in, and our economy could thrive, 
and people in West Virginia could have jobs, and people all 
across this country could have jobs. That seems like a pretty 
good idea to me.
    Mr. Pearce. Well stated. Thank you, Mr. Chairman.
    The Chairman. Thank you. The Chair would just like to 
respond to the statement the gentleman from New Mexico just 
made in regard to this committee's energy bill, something to 
the effect that we allow coastal states to prohibit coal 
development through our energy bill. And I am just totally 
flabbergasted. I am not sure what provision to which the 
gentleman refers.
    I do recall that we set up, or we voted a couple times, and 
our language does allow the coastal states, through their 
coastal management plans, to come together and coordinate and 
make sure and decide that what they do as far as offshore OCS 
drilling is not in violation of any Federal laws or state plans 
that they have. I don't interpret that as, in any way, saying 
that these states could, coastal states, could join together to 
prohibit the development of coal on inland states.
    Mr. Pearce. And with the Chairman's permission, we would 
like to get the testimony that occurred in that hearing, if you 
don't mind, and see if we can connect those dots, and see if my 
memory is correct or not.
    The Chairman. Testimony. But I am looking for the language 
in the bill.
    Mr. Pearce. The testimony that the language in the bill 
actually does that, and there appear to be deep consensus. But 
let me see if our staff can find that. I do appreciate that 
question, thanks.
    The Chairman. The gentleman from Pennsylvania, Mr. Shuster.
    Mr. Shuster. Thank you, Mr. Chairman. And Mr. Roberts, 
great to have you here with us today.
    Mr. Roberts. Thank you.
    Mr. Shuster. I hail from western Pennsylvania, which is, I 
have a lot of coal in my district. And as I mentioned earlier 
in questioning, coal is coming back strong. One of the problems 
I hear from coal companies is we don't have enough, we can't 
train enough people to get into the mines. So that is a good 
problem to have, to employ more people.
    And it is good to hear that you report that at the end of 
December, that 100 percent of the retirees had healthcare.
    Mr. Roberts. A lot of them in your state, by the way.
    Mr. Shuster. Yes, sir, I do know that. And certainly one of 
my goals here in Congress is to seek coal production, coal 
employment rise in western Pennsylvania and across this 
country, because I think it is a large part of the answer to 
our energy situation. And mining it, and figuring out ways to 
liquefy it naturally, I believe about $100 million was 
appropriated to a coal liquefication plant in eastern 
Pennsylvania. I certainly wanted it in western Pennsylvania, 
but you don't always win those fights. But I am very pleased 
that the money is there to try to move forward on that.
    My question to you is that it seems to me that, and as the 
Ranking Member mentioned, the coal industry is under attack by 
groups in this country. And I think, as I said, it is good for 
workers, it is good for communities. And many communities in my 
district felt the effects of the decline in coal. And now we 
are struggling to reopen mines, and it is very difficult, very 
costly to get them open. In fact, one company made a big 
announcement they were going to try to open a mine, and it was 
going to take five or six years. And they have decided to 
abandon that idea.
    So I just wanted your thoughts on how do we move forward? 
What do you see are the hurdles, the stumbling blocks to 
mining, to creating these jobs? Because in the end, the best 
thing I think we can do for coal miners is create more jobs for 
them. So what are the hurdles? What are the things that you see 
out there in the regulatory arena that we need to change or 
streamline?
    Mr. Roberts. Let me just harken back to testimony I gave I 
guess three or four years ago on another committee, and I was 
asked that very question.
    I think the biggest challenge for coal miners, and you talk 
about well, you can't find enough coal miners, there are a lot 
of people who are not certain that they would like to work in 
this industry. Not because the industry doesn't pay well, and 
not because there isn't an excellent benefit plan available, 
particularly at union mines, but because of the uncertainty.
    I would suggest to you, Congressman--I could perhaps go for 
another 30 minutes talking about this--the uncertainty about 
this industry. And it has probably been this way for 40 or 50 
years, but it is probably more so right now.
    Two years ago or thereabouts, there was a lot of investment 
in the industry. If you have read the financial pages recently, 
there are many analysts suggesting that coal is not a good 
investment, or at least is not as good an investment as they 
have been recommending, because of the uncertainty of what is 
going to happen.
    That is true I think in any type of mining, in any state of 
the Union right now, and on a national basis. I think a number 
of coal companies, a number of investors, and for that matter 
young people trying to decide if this is an industry that they 
want to spend their future in, whether or not this industry is 
going to exist. And if it is going to exist, at what level, and 
what are the rules they must play by going into the future. 
That is a summary pretty much.
    One word is uncertainty, both to coal miners and the 
industry itself, as to what the future might hold.
    Mr. Shuster. And what is the key component of that 
uncertainty, in your view?
    Mr. Roberts. Well, I think if you read, it is not secret 
that for a number of years now there has been a huge debate, 
not just in this country but around the world, about global 
warming, and rightfully so.
    We opposed the Kyoto Treaty not because we didn't think 
that greenhouse gases existed, and not because we had some 
belief that earth wasn't warming. The Kyoto Treaty did not 
require what was known then, and I assume they still call 
themselves this, the G-67 plus one. The plus one was China, and 
the 77 were the developing nations of the world, to be bound by 
this treaty.
    Part of the problem we fight with over every day in the 
labor movement is the trade deficit. And that trade deficit is 
climbing rapidly, as we speak here, to billions of dollars, as 
we speak. And it gets higher and higher and higher every year.
    The question is, if China doesn't have to comply with what 
we do here, and Mexico doesn't have to comply, and India 
doesn't have to comply, how are we going to control the 
emissions in the atmosphere? It doesn't mean we shouldn't do 
anything. It does mean we should compel others to do something 
correspondingly with what we do.
    We went on record, and some of my friends in the coal 
industry would tell you that I shouldn't have, supporting the 
Bingaman approach. But the Bingaman approach requires the 
developing countries of the world to participate in anything 
that we are doing here to control emissions into the 
atmosphere.
    So that is part, probably the biggest question mark as we 
move forward. What is going to happen with respect to what 
Congress may do with respect to that.
    Mr. Shuster. Well, I see my time has expired, but I agree 
with your 100 percent. And not only were they not going to 
comply, but it was really a drop in the bucket.
    And again, I agree. Is there global warming? Yes, probably. 
But 96 percent, 97 percent of it is not caused by plants that 
are burning coal, or even the cars that are burning gasoline. 
So if we are going to move forward, you are absolutely right; 
everybody ought to have to get on the same playing field. Fair 
trade is what we try to achieve in the world. Free trade 
doesn't exist anywhere, but on Main Street USA, when you can 
decide which store you are going to buy, or which car 
dealership you are going to buy a car from.
    So I appreciate your testimony today. Thank you, Mr. 
Chairman.
    The Chairman. Thank you. The gentleman from Washington, Mr. 
Inslee.
    Mr. Inslee. Thank you. Mr. Roberts, thanks for being here. 
I am a person who has been active. Excuse me, I turned that 
off. Excuse me.
    Mr. Roberts. I heard you, but it was a little hard.
    Mr. Inslee. Thank you. And coal is obviously an enormous 
potential for us to get hundreds of years of supply, but 
obviously it puts out prodigious amounts of CO2. And 
I have been one who has supported the concept of doing vigorous 
research in trying to figure a way to burn coal cleanly.
    I have recently reviewed the MIT study that suggests that 
there is at least a good chance of being able to find some 
economic way to sequester CO2. And I support a 
Federal investment on that in an accelerated way, to do as much 
as we can to figure out what that capacity is.
    Now, that is not a unanimous opinion, because some folks, 
because of coal's history, have just failed to be able to 
envision a way to burn it cleanly. And my view is we need to 
try to find a way to do that.
    But there are issues about the environmental issues 
regarding to mining, particularly the amount and type of mining 
issues that we have. And I thought that if we were going to 
build support, broad-based support for clean coal technology, 
it would be helpful to be able to give people confidence that 
the mining process will not extract unacceptable environmental 
consequences. All energy sources have environmental 
consequences. There is no totally benign energy source. Solar-
cell energy creates mining issues for the rare minerals we use. 
Wave-power technology interferes with some fishing issues. Wind 
power has a visual impact. Everything has some environmental 
consequence.
    But I think it would be helpful to build confidence in a 
potential clean-coal future if we can find a way to tell 
Americans we are trying to move forward to reduce the 
environmental consequences of mining, particularly this 
mountaintop mining that is contentious.
    Do you have any thoughts in that regard, how we could try 
to build that confidence to help us in those efforts?
    Mr. Roberts. I would consider that along the same lines as 
the Chairman's question about whether or not people of good 
heart and mind and objectives could sit down and find a way to 
come to grips with some of these difficult problems.
    I think, from my perspective, one of the things that I have 
seen, particularly on this mountaintop mining situation, I know 
there are some folks who are adamantly opposed to it and want 
to abolish it. I respect that. There are others on the other 
side who might be making their living doing that.
    I find myself, quite frankly, in a unique position. In one 
week about a month ago, two coal company executives wrote 
letters to the editor criticizing me, and one environmentalist, 
for being too close to the coal companies. So in a week I ran 
the entire gauntlet. So that tells me I must be somewhere in 
the middle here.
    But coal miners, just to make a point, they don't get to 
decide what type mining the company does. The company decides 
that.
    One of the issues has been let us stop mountaintop mining, 
and let us do deep mining. Well, if you can convert those jobs 
that the people have right into that, that would be a good 
point. The problem we have is we live in a competitive economic 
environment. If a coal company shuts down any mine, whether it 
is a deep mine or a mountaintop mine or a contour mine, 
whatever it might be, long-wall mining, miner sections, they 
close it down. What happens is it is like a jump ball in 
basketball. Those jobs don't belong to West Virginia. They 
don't belong to Kentucky. They don't belong to Wyoming. That 
marketplace doesn't belong to West Virginia. That marketplace 
doesn't belong to Wyoming.
    The utility, once someone who is supplying to coal to them, 
now say OK, who wants to fill this order. And the truth is, if 
you go back and look from the passage, you talk about 
unintended consequences, I would suggest to you the 1990 Clean 
Air Act had some unintended consequences here. We lobbied here 
to require technology to be placed--and it was available on 
every utility in the United States. And we lost that fight.
    But what happened is coal mines in northern West Virginia 
closed. Coal mines in western Kentucky closed. All the mining 
industry in Illinois shut down. The mining in Indiana shut 
down. Did mining stop? No. The mining shifted from traditional 
deep mines in those areas to the Powder River Basin. And it is 
good for Wyoming, but it is not very labor-intensive in 
Wyoming, because it is low-sulfur coal. So we displaced all 
those coal miners who used to belong to our union. We didn't 
get as good a result with respect to reducing sulphur nitrite, 
which we were attempting to do with the passage of the Clean 
Air Act. And we lost all these jobs. And then we had the 
problem that Congressman Rahall and I have been trying to deal 
with since the late eighties and early nineties, is what do we 
do with all these people who lost their jobs and lost their 
healthcare in the Appalachian communities.
    So one of the things we have to be very careful with, the 
mentality, if we close some type of mining down, we are just 
going to shift that from Boone County over to Logan County, and 
we will all still have these jobs. It won't happen. Those 
markets will be made available. And what has happened here, 
there is more coal being mined, as we speak, west of the 
Mississippi River than east of the Mississippi River. And for 
the first couple hundred years of our history, that wasn't the 
case. But that is a direct, unintended consequence of shifting 
markets and shifting jobs from West Virginia, Ohio, 
Pennsylvania, Indiana, Illinois, and western Kentucky to west 
of the Mississippi River with the passage of the Clean Air Act.
    And if you can show me, or if somebody can have a 
conversation with me on how we are going to keep these people 
working. One of the things that happens to me, put yourself in 
my position, I have been around a long time. I started mining 
coal in 1971. I hate to be this long, but I have to make this 
point. I apologize.
    I started mining coal in 1971. People don't call me 
President that is in our union; they call me Cecil. Because we 
have known each other for 30 years. And I get a call from 
somebody I have known for 30 years, been in our union 30 years, 
and say hey, they are closing our mine down. Which side am I 
supposed to be on in that fight? I have to be on the side of 
the union members that I have known for 30 years.
    I don't want to fight with somebody else. I mean, a lot of 
the people are on the other side of this issue, and I have 
great respect for them. But when you start saying well, we are 
going to put your members out of a job, there is only one place 
for the union president to be. If you get a union president who 
is not there, he is probably a person who shouldn't be 
representing workers.
    So to answer your question in short, I think it is a 
difficult proposition. That is utopia, and that is what we 
would like to do, but it is hard, because we have all been 
through this for the last 30 years. This is not a new issue for 
us, trying to figure out how to keep jobs and dealing with the 
environment.
    We predicted this, by the way, when we were up here--we 
were much younger then--when we were up here in 1990, saying we 
think there is going to be a tremendous job shift here. We 
think these jobs going west of the Mississippi River, and all 
these communities are going to be devastated. And guess what, 
they were. We have tried to recover from that, but it has made 
it more difficult.
    Mr. Inslee. Thank you.
    The Chairman. Mr. Pearce?
    Mr. Pearce. Mr. Chairman, in response to your question, and 
I appreciate that, section 472 is where I drew the comments 
from that amends the Coastal Zone Management Act of 1972 by 
allowing for climate change. And specifically, as we go through 
the wording, in paragraph one it provides the assistance on 
down to a state that, to minimize the contributions to climate 
change and to prepare for and reduce the negative consequences 
that may result from climate change in the coastal zone, in our 
attempt to amend the Act and take this provision or somehow 
limit it, that was our point. That this section is going to 
allow the coastal states to go to the non-coastal states in 
saying that you are affecting us, you are affecting our 
management zone by your output of carbons. And we will then 
effect those negative consequences--line 21.
    I still feel like that with your question, that this does 
have a serious impact and a serious implication. I understand 
what your questions are, but the bill nowhere mentions, in this 
section, simply limiting to offshore production. It is a very 
broad application. And that is then the reason that we then 
submitted the amendment, to tighten it up or avoid the adverse 
impacts. Because I think that we all want to protect the 
environment, but we do need to be aware of what is taking place 
here.
    The entire State of Florida is defined as a coastal zone, 
and so that gives us some understanding of the broadness of 
this. And I would yield to questions from the Chairman, but 
appreciate his observations.
    The Chairman. The Chair will respond to the language that 
the gentleman just read from our energy bill that came out of 
our committee.
    We in no way are granting the coastal zone states any 
regulatory authority. It does say in the coastal zone, those 
decisions are to be made. It is bootstrapping to arrive at the 
conclusion that any regulatory authority is in that provision.
    So the Chair would respond in that manner to the 
gentleman's concerns.
    Cecil, thank you.
    Mr. Roberts. Well, thank you. I am sorry I got so----
    The Chairman. This particular point did not involve you.
    Mr. Roberts. I am sorry I got--two things I didn't 
understand. The Ranking Member's original question, I apologize 
for that. And I apologize for being so--I have been accused of 
this--long-winded with the answer.
    But I want to make sure before I leave here that you and 
this committee and all Members of Congress, on behalf of the 
original 112,000 retirees whose healthcare was at risk, that we 
appreciate so much what you have done for us. Thank you.
    The Chairman. Thank you for being with us. We do have a 
series of votes on the House Floor at this time, probably 30 
minutes at least worth of votes. So with the concurrence of the 
minority, it would be the Chair's idea, and the patience and 
forbearance of the panels yet to be heard from, and I 
appreciate that, that we recess and come back at 1:30. I am 
sorry, 12:30. What is that, 11:30?
    Mr. Pearce. It is 12:30.
    The Chairman. It is 12:30 now. We will come back at 1:30. 
The Committee stands in recess.
    [Recess.]
    The Chairman. The Committee will resume its hearing, and 
call to the witness table panel number four, composed of Walton 
D. Morris, Jr., of Charlottesville, Virginia; Joe Lovett, the 
Executive Director, Appalachian Center for the Economy and the 
Environment, Lewisburg, West Virginia; Brian Wright, Coal 
Policy Director, Hoosier Environmental Council, Indianapolis, 
Indiana; and Ellen Pfister, Shepherd, Montana, on behalf of the 
Northern Plains Resource Council and the Western Organization 
of Resource Councils.
    Lady and gentlemen, we have your prepared testimony. It 
will be made part of the record as if actually read. And you 
may proceed as you desire. Mr. Morris, you want to start first?

              STATEMENT OF WALTON D. MORRIS, JR., 
                   CHARLOTTESVILLE, VIRGINIA

    Mr. Morris. Good afternoon, Mr. Chairman. Thank you for the 
opportunity to speak here today.
    I am Walton Morris, an attorney based in Charlottesville, 
Virginia. For the past 17 years I have practiced law on behalf 
of environmental organizations and the residents of America's 
coalfields in matters arising under the Surface Mining Act.
    Earlier in my career, I served for nine years in the 
Solicitor's Office of the Department of the Interior. During 
that time I litigated, or supervised other lawyers who 
litigated, most of the important early cases involving the 
Surface Mining Act.
    Today I wish to address the history, current status, and 
future of the Surface Mining Act's public participation 
provisions.
    The Committee's report on the bill that became the Surface 
Mining Act correctly concluded that the success or failure of a 
national coal surface mining regulation program will depend, to 
a significant extent, on the role played by citizens in the 
regulatory process. With that conviction in mind, Congress 
established a broad range of public participation procedures 
meant to empower coalfield citizens, to supplement governmental 
regulatory efforts, and ensure effective oversight of state 
programs.
    Soon after Congress enacted the Surface Mining Act, 
coalfield citizens actually began to use these provisions; to 
play precisely the role that Congress expected. Citizen efforts 
led to important successes in rulemaking, the maintenance of 
state programs, on-the-ground enforcement actions, and 
designation of lands as unsuitable for coal mining. These 
successes demonstrated the wisdom and practicality of 
Congress's plan for vigorous public participation.
    However, even as citizens successfully invoked the Surface 
Mining Act's public participation provisions, obstacles began 
to appear. Rather than valuing the help that citizens provide, 
OSM grew hostile to public prodding, and has remained so, even 
to the point of stonewalling or unreasonably delaying response 
to the public's requests for basic information. As a result, 
the inspection and enforcement requests on both the state and 
Federal level are now turned aside for entirely unjustified 
reasons, or ignored altogether.
    To compound matters, a host of misguided administrative and 
judicial decisions have curtailed the public's ability to 
compel inspection or enforcement action, or to correct state 
program deficiencies through actions in Federal Court. As a 
result, public participation under the Surface Mining Act has 
become so hobbled that, as a practical matter, citizens can no 
longer play the important supporting role that Congress 
envisioned.
    For example, today OSM continues to withhold copies of 
permit application materials from New Mexico citizens despite a 
January 11, 2007, administrative decision directing OSM to make 
the requested documents available no later than 20 days from 
the date of that decision.
    Today OSM, as the regulatory authority in Tennessee, 
routinely delays citizen requests to review permit applications 
and inspection documents. And the agency refuses to allow 
citizens to speak to mine inspectors regarding conditions that 
the mine inspectors have seen on the ground.
    Today the state regulatory authority in Virginia continues 
to refuse to investigate citizen allegations that a coal 
operator is mining without a permit on the incredible theory 
that the state has no obligation to inspect, because it hasn't 
issued a permit yet for the mining operation in question.
    Today Virginia's field office continues to ignore a citizen 
request for inspection and enforcement in the very same manner, 
even though the time for responding, under OSM's own 
regulations, has long since passed.
    Today coalfield citizens in West Virginia face the 
crippling expense and uncertainty of a second round of 
administrative hearings in two appeals before a so-called 
multiple interest board, solely because the testimony of state 
and industry witnesses in the first round of hearings does not 
support legal arguments that the state regulatory authority 
subsequently dreamed up in a desperate attempt to prevail in 
the case.
    Today citizens throughout America's coalfields are 
compelled to address environmental problems caused by surface 
coal mining operations under such statutes as the Clean Water 
Act, or the Resource Conservation and Recovery Act, because 
courts have foreclosed the use of the Surface Mining Act's 
citizen suit provision against state regulators who fail to 
perform mandatory duties that the Surface Mining Act imposes on 
those officials.
    To restore public participation as an effective supplement 
to governmental regulatory efforts, and as a means for securing 
effective oversight of state programs, I urge this committee, 
and the Congress as a whole, to investigate and then counteract 
agency stonewalling of citizen requests for information, 
unwarranted deference to state regulators by Federal officials 
who are charged with oversight of state programs, the injustice 
of administrative review before state multiple-interest boards, 
and recent judicial misinterpretations of the statute.
    I have addressed these problems more specifically in my 
written statement, and so I will now yield to my colleagues on 
this panel.
    Thank you again, Mr. Chairman, for the opportunity to 
speak.
    [The prepared statement of Mr. Morris follows:]

          Statement of Walton D. Morris, Jr., Attorney-at-Law

    I am Walton Morris, an attorney based in Charlottesville, Virginia. 
For the past seventeen years, I have practiced law on behalf of 
environmental organizations and residents of America's coalfields in 
cases arising under the Surface Mining Control and Reclamation Act of 
1977 (``the Surface Mining Act''). Earlier in my career, I served for 
nine years in the Solicitor's Office of the Department of the Interior. 
During that time I litigated, or supervised other lawyers who 
litigated, most of the important early cases involving the Surface 
Mining Act.
Introduction
    This Committee's report on the bill that became the Surface Mining 
Act concluded that:
        The success or failure of a national coal surface mining 
        regulation program will depend, to a significant extent, on the 
        role played by citizens in the regulatory process. The State or 
        Department of Interior can employ only so may inspectors, only 
        a limited number of inspections can be made on a regular basis 
        and only a limited amount of information can be required in a 
        permit or bond release application or elicited at a 
        hearing....Thus in imposing several provisions which 
        contemplate active citizen involvement, the committee is 
        carrying out its conviction that the participation of private 
        citizens is a vital factor in the regulatory program as 
        established by the act.
    With that conviction in mind, and mindful also that ``increased 
opportunity for citizens to participate in the enforcement program are 
necessary to assure that the old patterns of minimal [state] 
enforcement are not repeated,'' Congress established a broad range of 
public participation procedures meant to empower coalfield citizens to 
supplement governmental regulatory efforts and ensure effective 
oversight of approved state programs. These procedures implement the 
public's statutory rights:
    (1)  to comment on proposed regulations and obtain judicial review 
of final rulemaking;
    (2)  to comment on proposed state program provisions and to obtain 
judicial review of decisions to approve them;
    (3)  to review and obtain copies of permit applications, inspection 
materials, and other information obtained or developed by the 
regulatory authority;
    (4)  to comment on permit applications and obtain administrative 
and judicial review of permitting decisions;
    (5)  to notify federal officials of violations of the Surface 
Mining Act or its implementing regulations, to participate in 
inspections conducted as a result of such notices, and to obtain review 
of adverse inspection or enforcement decisions; and
    (6)  to bring civil actions to compel coal operators to obey the 
law or to compel regulatory officials to perform any of the mandatory, 
non-discretionary duties the statute imposes on them.
    Soon after Congress enacted the Surface Mining Act, coalfield 
citizens began to use the statute's public participation provisions to 
play precisely the role that Congress expected. Citizen comments on 
OSM's initial and permanent program regulations helped shape those 
rules into effective tools which ended many of the abuses that 
bedeviled America's coalfields. In litigation challenging rules that 
OSM improperly adopted, coalfield citizens further ensured that federal 
surface mining regulations accurately reflected Congress's intent.
    In other litigation coalfield citizens reached settlements with OSM 
which led to correction of the coal industry's gross abuse of the so-
called ``two acre'' exemption and to creation of OSM's Applicant/
Violator System Office, which began the process of holding major coal 
producers accountable for environmental violations committed by 
business entities that those producers owned or controlled--generally, 
their ``contract miners.'' Additionally, citizens prosecuted civil 
actions that ultimately caused State officials to strengthen state 
regulatory programs that had fallen far short of ``minimum floor'' that 
Congress meant the Surface Mining Act to establish.
    In the administrative sphere, citizens filed inspection and 
enforcement requests and appeals to the Interior Board of Surface 
Mining Appeals (later the Board of Land Appeals) that ultimately led 
OSM and state regulators to compel major coal producers to reclaim 
mines that their contract miners had abandoned and to pay delinquent 
abandoned mine land fees associated with those mines. These and many 
other citizen successes proved the wisdom and practicality of 
Congress's plan to supplement governmental enforcement of the Surface 
Mining Act with the efforts of empowered coalfield citizens.
The Current Impairment of Public Participation Under the Surface Mining 
        Act
    Even as citizens used the Surface Mining Act's public participation 
provisions to achieve numerous successes, obstacles to effective public 
participation began to appear. Rather than valuing the help citizens 
provide, OSM became hostile to public prodding and has remained so--
even to the point of stonewalling or unreasonably delaying response to 
the public's requests for basic information in instances where OSM is 
the regulatory authority. Inspection and enforcement requests on both 
the state and federal level are turned aside for entirely unjustified 
reasons or ignored altogether. To compound matters, a host of misguided 
administrative and judicial decisions have curtailed the public's 
ability to compel inspection or enforcement action or to correct state 
program deficiencies through actions in federal court. As a result, 
public participation under the Surface Mining Act has become so hobbled 
that, as a practical matter, citizens can no longer play the important 
supporting role that Congress envisioned. For example:
      Today, OSM continues to withhold copies of permit 
application materials from New Mexico citizens despite a January 11, 
2007, administrative decision directing OSM to make the requested 
documents available no later than twenty working days from that date;
      Today, OSM, as the regulatory authority in Tennessee, 
routinely delays citizen requests to review permit applications and 
inspection documents, and the agency refuses to allow citizens to speak 
to mine inspectors regarding the conditions they have observed on the 
ground;
      Today, the state regulatory authority in Virginia 
continues to refuse to investigate citizen allegations that a coal 
operator is conducting mining operations without a permit--on the 
incredible theory that the State has no obligation to inspect because 
it has not issued a permit for the mine;
      Today, OSM's Virginia field office continues to ignore a 
citizen request for inspection and enforcement in the same matter, even 
though the time for responding under OSM's regulations has long since 
expired, and OSM continues to question in other proceedings whether the 
agency must make any response at all to a citizen complaint that OSM 
deems insufficient--even a response that simply informs the complainant 
of OSM's view;
      Today, coalfield citizens in West Virginia face the 
crippling expense and uncertainty of a second round of administrative 
hearings in two appeals before a so-called ``multiple interest'' board, 
solely because the testimony of State and industry witnesses in the 
initial hearings did not support legal arguments that the state 
regulatory authority subsequently dreamed up in a desperate attempt to 
prevail;
      Today, citizens throughout America's coalfields are 
compelled to address environmental problems caused by surface coal 
mining operations under the Clean Water Act, the Resource Conservation 
and Recovery Act, or other federal statutes because the courts have 
foreclosed the use of the Surface Mining Act's citizen suit provision 
against state regulators who fail to perform mandatory duties that the 
Surface Mining Act imposes on them.
    To restore public participation as an effective supplement to 
governmental regulatory efforts and a means for securing appropriate 
oversight of state programs, I urge this Committee and the Congress as 
whole to investigate and then counteract agency stonewalling of 
information requests, unwarranted deference to state regulators by 
federal officials charged with oversight of state programs, the 
injustice of administrative review before state ``multiple interest'' 
boards, and judicial misinterpretation of the statute. I address each 
of these problems in turn.
Stonewalling Information Requests
    Without ready access to permit applications, inspection reports, 
enforcement citations, and other documents generated in the regulatory 
process, the public cannot effectively participate in the regulatory 
scheme. For the most part, state regulatory authorities provide 
documents on request without significant delay and in convenient 
formats for the public's use. In marked contrast, OSM currently appears 
engaged in a puzzling effort to hamper citizen participation by denying 
information requests that state regulatory authorities fulfill 
routinely as a matter of ordinary business. As mentioned above, the 
agency continues to ignore its clear duty to produce permitting 
materials for New Mexico citizens concerned about mining operations on 
Indian lands in that State, where OSM is the regulatory authority.
    In Tennessee, where OSM also is the regulatory authority, the 
agency has imposed an arbitrary two-day waiting period before it will 
allow any citizen to review permitting, inspection, or enforcement 
materials. Far worse, the agency has refused to allow citizens to speak 
with mining inspectors regarding on-the-ground conditions at mines that 
may adversely affect the citizens' interests. Conversations between 
citizens and mine inspectors employed by state regulatory authorities 
are commonplace and highly beneficial to all concerned, because mine 
inspectors often correct misunderstandings and, in other instances, 
confirm facts on which citizens subsequently rely in making inspection 
or enforcement requests.
    The only conceivable reason for OSM's stonewalling of citizen 
requests for information about specific mining operations is to curtail 
or misdirect efforts by the public to participate in the regulatory 
scheme in the manner Congress expressly intended. In the interest of 
effective public participation, I ask this Committee to investigate the 
marked differences between OSM's performance in this area and that of 
state regulatory authorities and then to take appropriate action to 
cause OSM to provide requested information without undue delay or 
restriction.
OSM's Unwarranted Deference to State Regulators
    After noting that ``[e]ffective enforcement is central to the 
success for the surface mining control program contemplated by H.R. 
2,'' this Committee's report on the bill that became the Surface Mining 
Act emphasized that ``a limited Federal oversight role as well as 
increased opportunities for citizens to participate in the enforcement 
program are necessary to assure that the old patterns of minimal 
[State] enforcement are not repeated.'' The essence of both effective 
Federal oversight and citizen supplementation of governmental 
enforcement is a thorough, independent assessment by OSM of whether a 
violation exists and whether prescribed remedial measures are adequate 
to correct it.
    To oversee a state enforcement program effectively in the context 
of a citizen's request for inspection and enforcement, OSM must take a 
critical, independent look at the State's response to each ten-day 
notice. Where any doubt remains whether an alleged violation actually 
exists or whether prescribed remedial action is sufficient to correct a 
violation, OSM can meet the Surface Mining Act's enforcement mandate 
only by conducting a federal inspection and deciding the matter on the 
basis of OSM's independent evaluation of the facts and the law. If OSM 
merely defers to the State in resolving doubts about the validity of a 
citizen complaint, the agency will, for that reason alone, overlook a 
multitude of violations that an independent assessment of the facts and 
the law would detect.
    Despite this straightforward principle, OSM in 1988 formally 
adopted the ``arbitrary or capricious'' standard for evaluating the 
responses of state regulatory authorities to ten-day notices that OSM 
issues in response to citizen requests for inspection and enforcement 
action. From that point forward, OSM has systematically relied on the 
``arbitrary and capricious'' standard as a basis for preferring a 
State's paper denial that a violation exists over a citizen's assertion 
to the contrary. In such situations OSM refuses to conduct the federal 
inspection necessary to a make a thorough, fully informed, and 
independent assessment of whether the citizen's complaint is valid. 
Indeed, under OSM's current standard for evaluating state responses to 
citizen complaints, the agency rarely, if ever, permits the complaining 
citizen to rebut the State's assertions. As a result, citizen efforts 
to supplement or strengthen enforcement of the Surface Mining Act are 
often stymied without the federal inspection that Congress intended OSM 
generally to make.
    Section 521(a) of the Surface Mining Act, which prescribes the ten-
day notice process, contains not one word authorizing OSM to defer to 
the response of a state regulatory authority where doubt remains 
regarding the existence of a violation or the effectiveness of remedial 
action that a State has ordered where the violation is not in doubt. 
The statute authorizes OSM to decline to inspect only where a State's 
response to a ten-day notice firmly establishes either that the State 
has taken appropriate action to cause the violation to be corrected or 
that the State has ``good cause'' for failing to take such action.
    Deference to the views of state regulatory officials is inherently 
incompatible with the vigorous, independent oversight process that 
Section 521(a) prescribes. This is so because deference requires OSM to 
accept a State's ten-day notice response even where, on balance, OSM 
would decide the matter differently. Both OSM's role as watchdog of 
America's coalfields and the need for effective citizen participation 
in enforcing the Surface Mining Act demand that OSM inspect in such 
circumstances and respond based on conditions on the ground rather than 
simply defer to whatever view State officials may express on paper.
    To revive effective public participation in overseeing state 
efforts to enforce the requirements of the Surface Mining Act, I urge 
this Committee and Congress to consider and enact an amendment to the 
statute which forbids OSM from deferring to the responses of state 
regulatory authorities to ten-day notices. The Committee and Congress 
should require instead that OSM conduct a federal inspection wherever a 
State's response does not demonstrate to a certainty that an alleged 
violation does not exist or that there is no need for additional 
remedial measures.
The Injustice of Administrative Review Before State ``Multiple 
        Interest'' Boards
    Where OSM is the regulatory authority or acts in its oversight 
capacity, citizens may obtain administrative review of adverse agency 
decisions before full-time administrative law judges who are free of 
any conflict of interest in matters that come before them and who 
generally have sufficient training and resources to provide effective 
review consistent with the due process of law. In marked contrast, 
administrative review of the decisions of many state regulatory 
authorities occurs before ``multiple interest'' boards whose members 
are not ``employees'' of the regulatory authority for conflict-of-
interest purposes and who, in fact, own coal mines or are employed by 
those who do. Although such boards typically have one or more members 
drawn from environmental protection organizations, State multiple 
interest boards are generally, if not uniformly, dominated by 
majorities drawn from the coal industry, consultants to the coal 
industry, and other pro-development interests. As a result, citizens 
are compelled to seek administrative review of adverse permitting or 
enforcement decisions before tribunals that are manifestly biased 
against them.
    Wholly apart from pro-industry bias, State multiple interest boards 
typically do not have a majority of members who have the necessary 
training or experience to conduct evidentiary hearings or to issue 
review decisions in a manner consistent with the requirements of 
applicable administrative procedure statutes. Consequently, citizens 
who seek review before these boards are often prohibited from 
introducing vital evidence or else see the board wholly ignore 
citizens' evidence in reaching a decision. The procedural errors that 
these boards routinely commit in conducting hearings and issuing 
decisions trigger judicial review in an inordinately large number of 
cases, no matter who prevails before the board. Judicial review in such 
circumstances results only in remand to the multiple interest board for 
yet another hearing and decision, with no promise that the second round 
will not end up as procedurally flawed as the first.
    For all these reasons, state multiple interest boards are where 
public participation in state regulatory programs comes to die. The 
substantial financial expense and time investment necessary to pursue 
administrative review in the first place becomes overwhelming to 
citizens where review results in procedurally flawed decisions that 
must be reviewed again once they are overturned on judicial review. As 
mentioned earlier, one multiple interest board has recently ordered a 
second round of hearings in two appeals for the sole stated reason that 
the record made in the first round of hearings did not support 
arguments that the State's lawyers later decided to make. Add to all 
this the fatal anti-citizen bias of these boards and it is easy to see 
why citizen participation in States that have multiple interest boards 
does not accomplish what Congress hoped.
    To secure the benefit of meaningful public participation in all 
state regulatory programs, I urge this Committee to investigate the 
role of multiple interest boards in stifling effective citizen 
involvement. Based on that investigation, I urge the Committee and the 
Congress to amend the Surface Mining Act to prohibit multiple interest 
boards from conducting administrative review of the decisions of state 
regulatory authorities and to require instead that administrative 
review occur before administrative law judges who are free of conflicts 
of interest and who are adequately trained to conduct hearings in 
accordance with state administrative procedure requirements.
Judicial Misinterpretation of the Surface Mining Act's Citizen Suit 
        Provision
    In reporting the bill that became the Surface Mining Act, this 
Committee found that ``providing citizens access to administrative 
appellate procedures and the courts is a practical and legitimate 
method of assuring the regulatory authority's compliance with the 
requirements of the act.'' Accordingly, the Surface Mining Act includes 
a provision authorizing any adversely affected person to bring an 
action in federal court to compel ``the appropriate State regulatory 
authority'' to perform any act or duty under the statute which is not 
discretionary.
    From enactment of the statute until 2003, citizens brought actions 
under the Surface Mining Act's citizen suit provision which resulted in 
settlements or court orders that corrected a host of shortfalls on the 
state level and strengthened overall administration of the statute. 
Beginning in 2003, however, a string of judicial decisions has 
misinterpreted the scope of the citizen suit provision and rendered its 
authorization of actions against state regulatory authorities virtually 
a dead letter.
    These decisions mistakenly construe state regulatory programs that 
implement the Surface Mining Act as purely state law rather than as 
both state law and federal law by virtue of the Secretary's approval of 
them and their codification in the Code of Federal Regulations. Based 
on the misinterpretation of state regulatory programs as purely state 
law, the pertinent judicial decisions reason that the Eleventh 
Amendment bars actions that the Surface Mining Act expressly authorizes 
citizens to bring against State officials. Accordingly, these decisions 
close the federal courts to citizen suits that would otherwise identify 
regulatory lapses on the part of State officials and compel them to 
correct those lapses.
    To restore the ability of citizens ``keep regulators on their 
toes'' and ensure implementation of state regulatory programs in 
accordance with the requirements of the Surface Mining Act, I urge this 
Committee and Congress as whole to consider and enact appropriate 
amendments to correct, in any one of several possible ways, the 
judicial misinterpretation of statute I have just described. The 
viability of public participation in the oversight of state programs 
depends on the enactment of such an amendment as soon as possible.
Conclusion
    I thank the Committee for the opportunity to address these issues, 
and I look forward with hope to the Committee's response. If I may 
provide additional information, I will be pleased to do so on request.
                                 ______
                                 

    [Additional information submitted for the record by Mr. 
Morris follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The Chairman. Joe.

STATEMENT OF JOE LOVETT, EXECUTIVE DIRECTOR, APPALACHIAN CENTER 
 FOR THE ECONOMY AND THE ENVIRONMENT, LEWISBURG, WEST VIRGINIA

    Mr. Lovett. Good afternoon, Mr. Chairman, and thank you for 
the opportunity to appear here today.
    First of all, after listening to OSM and state regulators 
here this morning, one would think that all is well with 
environmental regulation of coal mining in the Appalachian 
coal-bearing regions. Sadly, nothing could be further from the 
truth.
    Bureaucratic double-speak and sugar-coating reclamation 
failures, and a few carefully chosen pictures, cannot change 
the facts. Mountaintop removal is destroying a huge swath of 
Appalachia forever, and the regulators are complicit in this 
disaster.
    The Surface Mining Act is an imperfect, but useful, law. 
The problem is that the Bush Administration's OSM has 
completely refused to enforce that Act. The outright failure of 
OSM to carry out its duties is devastating our region. In fact, 
I believe that if OSM disappeared tomorrow, there would be no 
negative impact to the environment. OSM has become a useless 
agency, and as such, has rendered SMCRA itself useless.
    Appalachian coal mining has worldwide effects. Burning coal 
from only three Appalachian states--West Virginia, Kentucky, 
and Virginia--accounted for approximately 15 percent of total 
CO2 emissions generated in the entire United States 
from all fossil fuels in 2001. Burning coal produces more CO-2 
per BTU than any other energy source, and now accounts for more 
than 50 percent of U.S. electricity consumption.
    If you care about the future of our planet's climate, you 
must care about burning coal. Coal to liquids would be an added 
insult to our region. CO-2 produced from coal to liquids is 
tremendous, but it would also exacerbate mountaintop removal 
mining.
    The coal-rich mountains of central Appalachia are home to 
generations-old communities, and contain beautiful hollows 
through which thousands of miles of pristine and ecologically 
rich mountain streams flow. Mountaintop removal mining 
carelessly lays waste to our mountain environment and 
communities.
    This deforestation is not only an ecological loss, but is a 
permanent blow to a sustainable forest economy in a region in 
desperate need of long-term economic development. Mountaintop 
removal has already transformed huge expanses of one of the 
oldest mountain ranges in the world, into a moonscape of barren 
plateaus and rubble.
    Appalachian coal is cheap only because OSM and other 
agencies ignore their duty to enforce the Act, and allow the 
coal industry to pass its costs on to workers, communities, and 
local and state economies, as well as the environment. The 
mining industry naturally takes advantage of the Federal 
regulators' failure to enforce the law. One of the worst 
consequences of OSM's disregard of the law is the prevalence of 
these mountaintop removal mines, and the attendant large valley 
fills.
    Mountaintop removal mines are changing the landform of our 
region in a way more profound than any change occurring in the 
United States. A recent study singles out mountaintop removal 
and valley fills in West Virginia and adjacent states as by far 
the greatest contributor to earth-moving in the United States.
    Mountaintop removal and other large surface mining 
operations have been authorized by permitting authorities that 
have allowed the destruction of over 2,000 miles of our 
streams, and have allowed the destruction of over a million 
acres of our forests. These headwater streams and forests, the 
most productive and diverse tempered hardwood forests in the 
world, are valuable long-term economic assets that are being 
lost forever. Future generations will not forgive us for what 
we are now doing to the Appalachian Mountains.
    In a few decades we have destroyed mountains and forests 
that have taken hundreds of thousands of years to create. 
Appalachian mining may cumulatively impact 1.4 million acres, 
or 11.5 percent of the area being mined, according to a Federal 
EIS.
    I will just touch on one big problem with the OSM's 
regulation, and that is its failure to enforce the rules 
requiring restoration to approximate original contour. The Act 
requires that the post-mining land generally resemble the 
surface configuration of the pre-mining land. Anybody can look 
at these mines and know that is not the case. The valley fills 
that are part of these operations look like no landscape on 
earth, much less like our Appalachian Mountains.
    The agency's continued issuance of these permits is a clear 
violation of the Act. There are several other violations of the 
Act cited in my statement, written statement, and I won't 
bother to go through them here.
    I will just summarize by saying that what we heard about 
reclamation here today is also a sham, and I would like to take 
the opportunity to invite members of this committee and its 
staff to come to West Virginia to witness the devastation 
caused by these mountaintop removal mines, and appreciate the 
incalculable harm that OSM's failure to enforce the Act has 
done to our region.
    Contrary to what we heard OSM say here today, and what you 
will undoubtedly hear from the industry, reclamation, to put it 
kindly, is a joke in our state. You need to see it to believe 
it.
    Thank you for your time.
    [The prepared statement of Mr. Lovett follows:]

             Statement of Joe Lovett, Executive Director, 
         Appalachian Center for the Economy and the Environment

Introduction
    Good morning Chairman Rahall and members of the Committee. Thank 
you for the opportunity to testify today. My name is Joe Lovett and I 
am the Executive Director of the Appalachian Center for the Economy and 
the Environment, a law and policy center located in Lewisburg, West 
Virginia. I am also a lawyer who has been attempting to enforce surface 
coal mining and other environmental laws that federal and state 
regulators refuse to enforce in Appalachia.
    From its inception in 2001, the Appalachian Center has been at the 
forefront of the battle to end the abuses associated with the 
devastating method of coal mining known as mountaintop removal. The 
Center serves low-income citizens, generations-old communities, and 
local and grassroots groups of central Appalachia.
    Unfortunately, it is necessary for us to direct much of our work to 
rein in federal agencies, whose refusal to enforce environmental laws 
in our region permits the environmental devastation and community 
destruction that results from mountaintop removal coal mining.
    In the abstract, the Surface Mining Control and Reclamation Act is 
an imperfect but useful law. Since at least 2001, however, the Office 
of Surface Mining Reclamation and Enforcement has refused to enforce 
the Act. The outright failure of OSM to carry out its duties has had 
devastating impacts on Appalachia.
    Appalachian coal has world-wide effects: burning coal from only 
three Appalachian states (West Virginia, Kentucky, and Virginia) 
accounted for approximately 15% of the total CO2 emissions 
generated in the entire United States from all fossil fuel sources 
(including petroleum) in 2001. Burning coal produces more 
CO2 per BTU than any other energy source and now accounts 
for more than 50% of U.S. electric consumption.
    The local impacts of coal mining, particularly mountaintop removal 
mining, are just as devastating to the environment of the Appalachian 
region as coal burning is to the global climate.
    The coal-rich mountains of central Appalachia are home to 
generations-old communities and contain beautiful hollows through which 
thousands of pristine and ecologically rich mountain streams flow. 
Mountaintop removal mining carelessly lays waste to our mountain 
environment and communities. The deforestation is not only an 
ecological loss, but a permanent blow to a sustainable forest economy 
in a region in desperate need of long-term economic development. 
Mountaintop removal has already transformed huge expanses of one of the 
oldest mountain ranges in the world into a moonscape of barren plateaus 
and rubble.
    Appalachian coal is ``cheap'' because OSM ignores its duty to 
enforce the Act and allows the coal industry to pass its costs onto 
workers, communities, local and state economies, and the environment. 
The mining industry naturally takes advantage of federal regulators' 
failure to enforce the law. One of the worst consequences of OSM's 
disregard for the law is the prevalence of mountaintop removal mines, 
large strip mines with attendant valley fills.
Mountaintop Removal Coal Mining
    Disregarding human and environmental costs, mountaintop removal 
coal mining as currently practiced in Appalachia eradicates forests, 
razes mountains, fills streams and valleys, poisons air and water, and 
destroys local residents' lives. Toxic mine pollution contaminates 
streams and groundwater; hunting and fishing grounds are destroyed. 
Because the large-scale deforestation integral to mountaintop removal 
takes away natural flood protections, formerly manageable storms 
frequently inundate and demolish downstream homes.
    Mountaintop removal mines are changing the landform of our region 
in a way more profound than is occurring in any other area. A recent 
study singles out mountaintop removal mining and valley fills in West 
Virginia and adjacent states as by far the greatest contributor to 
earth moving activity in the United States. Hooke, R.L. 1999, ``Spatial 
distribution of human geomorphic activity in the United States: 
Comparison with rivers, Earth Surface Processes and Landforms 24: 687-
92. In other words more earth is moved in this region than in 
intensively developed areas like southern California or the Northeast 
corridor.
    Mountaintop removal and other large scale surface mining operations 
have been authorized by permitting authorities that have allowed the 
destruction of over 2,000 miles of Appalachian streams and more than 
1,500 square miles of forested mountain terrain. These headwater steams 
and forests (the most productive and diverse temperate hardwood forests 
in the world) are valuable long-term economic assets to the local 
communities and to the Nation and are being forever lost.
Environmental Impact Statement on Mountaintop Removal
    Because of litigation that I brought in 1998, a programmatic 
Environmental Impact Statement on mountaintop removal was performed by 
EPA, the Army Corps of Engineers and OSM. The EIS found that present 
and future mining in Appalachia may cumulatively impact 1.4 million 
acres, or 11.5% of the study area, and that the destruction of these 
nearly 1.5 million acres of forest is profound and permanent because 
``unlike traditional logging activities associated with management of 
hardwood forest, when mining occurs, the tree, stump, root, and growth 
medium supporting the forest are disrupted and removed in their 
entirety.''
    The EIS also determined that mountaintop removal mining causes 
``fundamental changes to the terrestrial environment,'' and 
``significantly affect[s] the landscape mosaic,'' with post-mining 
conditions ``drastically different'' from pre-mining conditions. 
Further, mining impacts on the nutrient cycling function of headwaters 
streams ``are of great concern'' and mining impacts to habitat of 
interior forest bird species could have ``extreme ecological 
significance.''
    The EIS further concluded that mining could impact 244 terrestrial 
species, including, for example, 1.2 billion individual salamanders, 
and that the loss of the genetic diversity of these affected species 
``would have a disproportionately large impact on the total aquatic 
genetic diversity of the nation.'' Finally, the EIS observed that 
valley fills are strongly associated with violations of water quality 
standards for selenium, a toxic metal that bioaccumulates in aquatic 
life. All 66 selenium violations identified in the EIS were downstream 
from valley fills, and no other tested sites had selenium violations.
    OSM's response to these devastating conclusions was to further 
weaken its enforcement of the Act in Appalachia.
    In 2001 and 2002, the federal agencies responsible for regulating 
mountaintop removal weakened the EIS and did not proceed with necessary 
scientific studies when they realized that the science was showing that 
mountaintop removal could not be practiced without devastating the 
environment and economy of our region. The agencies simply halted the 
economic study that was crucial to the EIS when it became apparent that 
the results were not what OSM wanted them to be.
    In sum, the EIS was supposed to demonstrate the environmental and 
economic impacts of large scale strip mining on Appalachia and propose 
ways to protect the environment and mitigate the impacts of mining on 
the region. In spite of the fact that the environmental studies that 
were performed all showed significant harm to the environment, OSM 
guided the other agencies involved to make permits easier for mining 
operators to receive. OSM ignored the science and turned the EIS on its 
head.
    Because of OSM's role in this process, we still desperately need an 
adequate and impartial EIS to be performed to demonstrate the far 
reaching impacts this form of mining is having on the Appalachian 
region.
Approximate Original Contour
    The heart of the Surface Mining Control and Reclamation Act is the 
requirement that mining companies must restore surface mines to 
approximate original contour, or AOC. If mines are restored to AOC, the 
disturbed area is smaller, valley fills and stream impacts are reduced. 
The Act provides that approximate original contour is the surface 
configuration achieved by backfilling and grading of the mined area so 
that the reclaimed area closely resembles the general surface 
configuration of the land prior to mining and blends into and 
complements the drainage pattern of the surrounding terrain.
    Remarkably, there are few, if any, large surface mines in 
Appalachia that comply with this basic requirement. Instead, mining 
operators, with the acquiescence of OSM, thumb their noses at the law 
and create monstrous valley fills and sawed off mountains that more 
closely resemble the surface of the moon than our lush, green hills.
    Mountaintop removal mines are not required to restore the post 
mining site to AOC. The Act sanctioned mountaintop removal mining, but 
only in very limited circumstances. The Act requires that all mines be 
restored to AOC unless the mining company shows that it will restore 
the site to an industrial, commercial, agricultural, residential, or 
public facility (including recreational facilities) use.
    Almost no postmining land in Appalachia is put to any of these 
uses. The post mining land is in isolated mountain areas, the land is 
unstable for building and it will no longer support native vegetation. 
There is no surface or groundwater available on the post mining sites 
because the mountain has been blown to bits. In short, mountains and 
valleys have been changed dramatically in contour so that they resemble 
no surface configuration on Earth and the land is useless for future 
development. Whether the mines are technically ``mountaintop removal 
mines'' or not (and OSM has so bent the definition of ``mountaintop 
removal'' that not all mines that have the affect of mountaintop 
removal mines are classified as such), almost all Appalachian surface 
mines fit this description. OSM has not lifted a finger to stop this 
complete abuse of the most important provision of the Act.
Stream Buffer Zone
    Another of the most important provisions of the Act requires that 
no mines be permitted unless they prevent material damage to the 
hydrologic balance off site and minimize disturbance on site. OSM 
promulgated the stream buffer zone rule in 1983 to carry out the 
Congressional mandate to protect the hydrologic balance.
    The buffer zone rule, 30 C.F.R. 816.57, states that no land within 
100 feet of a perennial stream or an intermittent stream may be 
disturbed by surface mining unless the regulatory authority 
specifically authorizes surface mining activities closer to, or 
through, such a stream. The regulatory authority may authorize such 
activities only upon finding that surface mining activities will not 
cause or contribute to the violation of applicable State or Federal 
water quality standards, and will not adversely affect the water 
quantity and quality or other environmental resources of the stream.
    On its face, this rule prohibits valley fills in intermittent and 
perennial streams and, in 1999, a federal judge in West Virginia agreed 
that this is what the rule means. That decision was reversed on appeal 
for purely procedural reasons--the Court of Appeals did not reach the 
merits.
    To protect the coal industry, OSM is in the process of trying to 
promulgate a new and weaker rule to override this 25 year old rule. It 
is absurd to allow, as OSM has, more than 2,000 miles of mountain 
streams to be permanently buried beneath mining waste and still claim 
to be protecting the hydrologic balance. Rather than weakening the rule 
to accommodate the mining industry, a responsible agency would force 
the industry to conform to the law.
Cumulative Hydrologic Impacts
    OSM is also charged with protecting the cumulative hydrological 
integrity of the mining region. Again, OSM utterly fails to discharge 
its duty to assure that states are performing adequate cumulative 
hydrological impact analyses as the Act requires. For example, 
according to information released by the Corps, by 2001 as much as two 
percent--1,208 miles--of streams in Appalachia had been buried or 
directly harmed by valley fills and over 1.5 million acres of forest 
had been destroyed. This amounts to 11.5 percent of the land area in 
the region encompassing eastern Kentucky, southern West Virginia, 
western Virginia, and areas of eastern Tennessee. As a result of this 
destruction of headwater streams, mountaintop removal mines 
cumulatively devastate aquatic ecosystems. OSM has not attempted (and 
has not forced the states to attempt) to analyze and minimize the 
environmental harm of past, present, and reasonably foreseeable future 
surface mining operations in Appalachia. These impacts include total 
elimination of all aquatic life in buried streams, negative impacts on 
the proper functioning of aquatic ecosystems (including fisheries 
located downstream of mountaintop removal mining operations), and 
impairment of the nutrient cycling function of headwater streams.
    For example, in the Coal River watershed in West Virginia, existing 
and pending surface mining permits cover 12.8% of the watershed. In the 
Laurel Creek of the Coal River watershed, existing and pending surface 
mining permits cover 28.6% of the watershed. Surface mining permits 
including valley fills cover 14.5% of first order streams and 12% of 
all streams in the Coal River watershed and surface mining permits 
including valley fills cover 37.3% of first order streams and 27.9% of 
all streams in the Laurel Creek watershed.
    The United States Fish and Wildlife Service recognizes that 
mountaintop removal mining results in forest loss and fragmentation 
that is significant not only within the project area, but also 
regionally and nationally. In particular, the mines cause a fundamental 
change in the environment from forestland to grassland habitat, cause 
significant adverse impacts to the affected species, cause loss and/or 
reduced quality of biodiversity, and cause loss of bird, invertebrate, 
amphibian, and mammalian habitat.
    When Congress passed the Surface Mining Control and Reclamation Act 
in 1977, it thought that it was enacting a law to protect the 
environment and citizens of the region. OSM has used, and has allowed 
the states to use, the Act as a perverse tool to justify the very harm 
that Congress sought to prevent. The Members of Congress who voted to 
pass the Act in 1977 could not have imagined the cumulative destruction 
that would be visited on our region by the complete failure of the 
regulators to enforce the Act.
Higher and Better Use and Topsoil
    The Act requires that all postmining sites be restored either to 
conditions that are capable of supporting the uses they were capable of 
supporting before any mining or to higher or better uses. The Act also 
requires operators to save and replace the topsoil found on the mining 
site.
    Again, OSM's record here is dismal. Our mountains have been reduced 
to scrubland that will not support native hardwood tree species. Far 
from requiring a higher or better use of that land, OSM has acquiesced 
to allowing operators to turn the most productive temperate hardwood 
forests in the world into useless and unproductive grasslands. One of 
the reasons for the sham reclamation practices that are common practice 
on Appalachian surface mines is OSM's failure to assure that operators 
save and reuse the topsoil. Very few, if any operators, save the 
topsoil as the law requires. Instead, they are permitted to use 
``topsoil substitutes'' and dump the irreplaceable topsoil into the 
bottoms of valley fills.
Economics
    Mountaintop removal is also devastating the economy of the coal 
bearing regions of Appalachia. In 1948, there were 125,669 coal mining 
jobs in West Virginia and 168,589,033 tons of coal mined. In 1978, 
there were still 62,982 coal mining jobs in West Virginia with only 
84,696,048 tons mined. By 2005, however, only 17,992 of these jobs 
remained despite the fact that coal production had again risen to 
159,498,069 tons mined.
    So, although coal production today is roughly the same as it was 
sixty years ago, the number of coal mining jobs has decreased by more 
than 85%. This job loss has been driven not by environmental production 
or decreased production, but by coal operators themselves who have 
replaced workers with machines and explosives. McDowell County, which 
has produced more coal than any other county in West Virginia, is now 
one of the poorest counties in the Nation. Far from being an economic 
asset to communities, mountaintop removal devastates economies wherever 
it occurs.
Summary
    With increasing global demands for energy, the oppressive influence 
of ``big coal'' has not weakened in our region since 1977. As the price 
of coal increases and so-called ``clean coal'' and coal conversion 
technologies are promoted, the pressure to evade the law and recklessly 
permit mines will increase. The peak of world oil production, the 
political vulnerability of the world's oil supply, and the increased 
price of oil has quickly transformed the economics of the ``coal to 
liquids'' industry. The United States has the largest coal reserves in 
the world and we must control ourselves to protect the Earth and our 
region.
    There is no such thing as ``clean coal.'' Increased burning or 
liquefying of coal will produce unsustainable levels of carbon dioxide. 
Mountaintop removal mining destroys forever central Appalachia's 
communities, forests, streams, and wildlife. The region is a ``hot 
spot'' for migratory birds and the giant holes now being opened in the 
forest canopy by mountaintop removal mining are devastating important 
populations of migratory birds. To compound the problem, as the price 
of coal rises, coal operators are today mining coal that until now was 
too expensive to recover in the past. As the price of coal increases or 
as mining technology becomes more ``efficient,'' coal seams that were 
off limits in the past are coming on line. Mining those more 
``marginal'' seams is even more environmentally harmful as coal 
operators are able to blow up more mountains and move more earth to get 
at ever thinner and deeper coal seams. The nation is at a tipping point 
on energy and climate change policy and the impacts of coal mining on 
Appalachia are an essential consideration in the development of an 
environmentally responsible energy policy.
Conclusion
    I am pleased to see that this Committee is conducting this hearing 
on the thirtieth anniversary of the Act. I hope that it will actually 
take action to compel OSM to discharge its duties. The absence of 
energetic oversight invariably leads to problems, particularly with 
agencies like OSM that have close ties with the industries that they 
regulate.
    Finally, I would like to take this opportunity to invite members of 
the Committee and its staff to travel to West Virginia to witness the 
devastation caused by mountaintop removal to help you appreciate the 
incalculable harm that OSM's failure to enforce the Act has done to our 
region. We would be pleased to provide flyovers of mountaintop removal 
areas and to arrange meetings with community members whose lives and 
property are severely impacted by the illegal mountaintop removal mines 
that OSM refuses to regulate.
                                 ______
                                 
    The Chairman. Mr. Wright.

   STATEMENT OF BRIAN WRIGHT, COAL POLICY DIRECTOR, HOOSIER 
          ENVIRONMENTAL COUNCIL, INDIANAPOLIS, INDIANA

    Mr. Wright. Thank you for this opportunity to speak. My 
name is Brian Wright; I am the Coal Policy Director for Hoosier 
Environmental Council, a statewide organization in Indiana that 
represents over 25,000 members.
    In the nine years that I have worked for the Council, I 
have spent thousands of hours reviewing mining permits, ground-
to-surface-water monitoring records, and scientific studies and 
government reports on the disposal of coal combustion waste in 
mines. I have also spoken with numerous citizens in Indiana and 
across the country on the impacts of mining on their homes, 
quality of life, and environment.
    I have come here to speak on behalf of residents in the 
Illinois coal basin, which stretches from Illinois into 
southwest Indiana.
    While SMCRA has addressed some of the most damaging mining 
practices within the coal basin, coalfield residents must still 
contend with contamination, loss of local groundwater, lasting 
damage to homes, unresponsive regulatory agencies, large-scale 
open dumping of coal combustion waste in the mines, and growing 
concern about damage from longwall mining.
    In 1977, the U.S. Congress decided that it would no longer 
allow the coalfields of this country to be treated as sacrifice 
zones, and coalfield residents to be treated as second-class 
citizens. So has SMCRA lived up to these intended purposes in 
the Illinois coal basin? It has the skeleton of a good law, but 
in many areas SMCRA still lacks the muscles and teeth needed to 
adequately protect coalfield communities and their environment.
    For example, SMCRA lays the groundwork for good groundwater 
protection, but the language in SMCRA remains too vague to 
offer meaningful protection for this vital resource.
    As you brought up earlier with the language of the 
approximate original contour and the fact that it has never 
been clearly defined in the law, SMCRA and Federal regulations 
have never defined the provisions and requirements for 
groundwater protection.
    SMCRA requires mines to minimize disturbance within the 
mined area to the hydrologic balance, and prevent material 
damage outside of the mine to groundwater, but has never 
defined either of these terms. As a result, state agencies have 
been given too much wiggle room in how to interpret these 
standards.
    Illinois and Indiana groundwater rules are written in such 
a way as to turn mine areas into sacrifice zones once again. 
During the mining process, no standards actually apply within 
the mined area. In the case of Indiana, any contamination that 
occurred in the mine would have to migrate 300 feet beyond the 
mine area and all the mine operations before any regulatory 
action would be applied. By that time, the contamination would 
be so well established that it would be extremely difficult to 
take any meaningful action.
    Once bond release occurs, in both states the groundwater 
receives a permanent designation as impacted by the mines, and 
the groundwater standard within those mine permit areas becomes 
the amount of contamination caused by the mining. There is no 
numeric standard holding them to minimizing contamination 
within the mine area, or preventing material damage outside.
    Both of these rules were given full approval by the Office 
of Surface Mining, despite their clear contradiction to the 
regulations and intent of SMCRA.
    Coalfield residents are supposed to receive help from their 
state agencies when they have a complaint about blasting, water 
loss, or other damage from the mine. And regardless of the area 
of the country, the mining agency or official or the mining 
company involved, I have heard the same consistent story time 
and time again from coalfield residents. No matter how well 
they can document the damage to their property, both the 
agencies and the mining companies continue to dismiss their 
complaints, or perform token actions which truly don't address 
the damage.
    Citizens consistently find themselves placed in an 
adversarial relationship with the very agencies that are 
supposed to be protecting their interests.
    In addition to all of these existing problems, coal mines 
in the Midwest and throughout the country are now being used as 
open dumps for vast quantities of coal combustion waste. SMCRA 
was never designed to regulate these types of dumping 
operations, and coalfield residents have been forced to fight 
an unjust double standard when it comes to dumping in 
minefields. Disposal practices that would not be allowed 
anywhere else--for example, mass dumping in direct contact with 
groundwater--are allowed in the coalfields, strictly on the 
basis the dumping is occurring in mines.
    While OSM has called for a rulemaking on this practice, 
based on my experience with the Office of Surface Mining and 
state mining agencies coming from years of being involved in 
public forums, OSM conferences on mine disposal, and other 
rulemakings, state rulemakings throughout the last nine years, 
I can say with complete confidence that coalfield residents 
will not get meaningful protection for their health and their 
water unless you step in to demand that protection.
    The very recommendations given in National Research 
Council's report on mine disposal are almost word-for-word 
regulations that citizens have been struggling for years to try 
and get in their own states, only to have OSM and state 
agencies fight them at every step of the way and oppose those 
types of safeguards. To now expect them to immediately do a 
180-degree turn and turn around and support those 
recommendations from the National Research Council I found 
somewhat unbelievable.
    Concern has come up that is not being taken care of in any 
way, shape, or form by the local agencies is underground 
longwall mining. This is a serious concern to the citizens I 
contacted in Illinois, getting prepared for this testimony.
    Unlike traditional coal mining, longwall mines are allowed 
to completely collapse. This can lead to subsidence that can 
drop the ground as much as four to five feet on the surface. In 
Pennsylvania, subsidence from longwall mines has damaged homes, 
destroyed streams, and ruined farmland. The Illinois DNR 
refuses to accept any sort of regulatory authority over the 
surface impacts of these mines.
    We ask that you please consider taking the following steps 
to give SMCRA the muscles and teeth it needs to adequately 
protect coalfield communities and their environment.
    Number one. Defining what it means to minimize disturbances 
and prevent material damage to the hydrologic balance.
    Create better oversight of the state agencies.
    Require national regulations on mine disposal that at a 
minimum incorporate the recommendation of the National Research 
Council's report, managing coal combustion residues in mines.
    And pass requirements to minimize surface impacts from 
longwall mining.
    Thank you.
    [The prepared statement of Mr. Wright follows:]

           Statement of Brian Wright, Coal Policy Director, 
                     Hoosier Environmental Council

    Members of the Natural Resources Committee:
    Thank you for this opportunity to speak on this important issue. My 
name is Brian Wright. I am the Coal Policy Director for Hoosier 
Environmental Council, a statewide environmental organization in 
Indiana that represents over 25,000 members. In the 9 years I have 
worked for the Council, I have spent hundreds of hours reviewing permit 
applications and ground and surface water monitoring records for 
Indiana coal mines. I have spoken with numerous citizens in Indiana and 
across the country about the effects of mining on the property rights, 
quality of life, health, and environment, and witnessed first hand 
damage to homes that coalfield citizens assert is from blasting at 
nearby coal mines. I have also played a central role in national 
campaigns to create national regulations on the disposal of power plant 
wastes in coal mines.
Introduction
    My comments are presented on behalf of coalfield residents and 
citizen advocacy groups in the Illinois coal basin. The basin stretches 
through southern Illinois and southwest Indiana. Mining in the area is 
mostly done by surface mining, but the number of underground mines is 
growing in both states. While SMCRA has addressed some of the most 
egregious mining practices, coalfield residents must still contend with 
contamination and loss of local ground water, blasting damage to homes, 
unresponsive regulatory agencies, large scale open dumping of 
industrial wastes into mines, and growing concern about subsidence from 
longwall mining.
    In 1977, the U.S. Congress decided that it would no longer allow 
the coalfields of this country to be treated as sacrifice zones and 
coalfield residents to be treated like second class citizens. SMCRA was 
passed with the goal that the mined land be returned to original or 
better uses instead of being reduced to moonscapes, that ground and 
surface water quality and quantity be protected instead of being 
rendered too acidic to support life, and that the homes and quality of 
life of coalfield residents would be protected instead of damaged or 
destroyed in the name of extracting the coal. In order to ensure that 
SMCRA was carried out properly, requirements for public participation 
were put into place in order to ensure citizens could hold mining 
companies and state and federal agencies accountable when mining laws 
and regulations were not followed.
    So how effective has SMCRA been in protecting the property rights, 
quality of life, and environment of the residents of the Illinois coal 
basin from modern day mining operations? SMCRA has the skeleton of a 
good law, but in many areas it lacks the muscles and teeth needed to 
adequately protect coalfield residents and the environment. In the 
rural areas where these mines are located, ground water most often 
makes up the only reliable source of water for residents. SMCRA lays 
the ground work for good ground water protection. However, the language 
in SMCRA remains too vague to offer meaningful protection to this vital 
resource.
    The law contains protections for homes from blasting damage, but I 
have visited many homes and received many complaints from coalfield 
residents who watch as large cracks appear in their walls and their 
foundation after the mines move in. When they bring these damages to 
the attention of the state mining agency, the damage to their homes is 
dismissed as the house settling. In our experience, coalfield residents 
are left feeling despair and hopelessness as no amount of documentation 
or evidence seems to change the state agencies explanation to the 
damage to their homes.
    Regardless of the area of the country, the mining agency or 
official, or the mining company, I have heard the same consistent story 
time and time again from coalfield residents: agencies and mining 
companies dismiss the complaints of citizens no matter how well they 
can document damage to their property. Whether it is an issue on 
blasting damage to homes, harm to wells, or a rulemaking issue, 
citizens consistently find themselves placed in an adversarial 
relationship with the very agencies that are supposed to be protecting 
their interests.
    Citizens seeking relief through the permit appeal process find the 
deck stacked against them. Even in instances where citizens can clearly 
document where a permit application fails to meet state and federal 
requirements, the state agencies still consistently side with the 
mining company. Citizens are then forced into devoting scarce resources 
into fighting the uphill legal battle of convincing the agency's own 
judges that their agency has acted in error in granting a deficient 
permit.
    Beyond these threats and challenges posed to coalfield residents, 
there are two practices never envisioned by the writers of SMCRA that 
are becoming increasingly common in the Illinois coal basin. Coal mines 
in the Midwest and throughout the country are being used as open dumps 
for vast quantities of power plant wastes. SMCRA was never designed to 
regulate these types of dumping operations. Coalfield residents have 
been forced to fight an unjust double standard when it comes to dumping 
in mines. Disposal practices that would not be allowed anywhere else 
such as disposal into direct contact with groundwater are allowed in 
the coalfields. The National Research Council, in their 2006 report 
``Managing Coal Combustion Residues in Mines'', found that national 
regulations are needed to prevent harm to the health of coalfield 
residents and their environment.
    Based on my experience with the Office of Surface Mining (OSM) and 
state mining agencies, I say with complete confidence that coalfield 
residents will not get meaningful protection for their health and their 
water unless you step in and demand that protection. For years, OSM and 
state agencies have fought against citizen requests for regulations 
similar to the recommendations made in the OSM report.
    Mining companies in the Midwest are increasingly turning to 
underground mining. If these companies decide to use the longwall 
mining method, there are no federal laws or regulations in place to 
protect coalfield residents from the surface impacts of longwall 
mining. Unlike traditional coal mining, which leaves pillars in place 
to prevent collapse, longwall mines are allowed to collapse. This can 
cause the ground to drop as much as 4-5 feet. The subsidence from 
longwall mines has damaged homes, destroyed streams, and ruined 
farmland. The Illinois and Ohio Farm Bureaus have passed resolutions 
calling for regulations on longwall mining out of concern over the 
damage this mining method could cause to prime farmland and historic 
farms in the Midwest. SMCRA must be amended to regulate all surface 
impacts from underground mines. Otherwise, citizens are helpless 
towards protecting their property and their environment from the 
impacts of longwall mining.
Ground Water Protection
    Federal mining regulations require that coal mines ``minimize 
disturbance of the hydrologic balance within the permit and adjacent 
areas, prevent material damage to the hydrologic balance outside the 
permit area, to assure the protection or replacement of water rights, 
and to support approved postmining land uses.'' (30 CFR Sec. 816.41) 
The regulations also require that the mine conduct a thorough, site 
specific analysis of the local ground and surface water resources, the 
cumulative hydrological impact assessment (CHIA). If the water source 
of a landowner does become contaminated, the mine owner is required to 
replace it. These requirements create the good framework for protection 
of ground water resources in the coalfields, but in reality these 
regulations have been inadequately applied in order to protect the 
water of coalfield residents in the Midwest.
    SMCRA and its associated regulations have never defined what it 
means to minimize disturbance within the permit area or prevent 
material damage. As a result, state programs are given too much 
latitude in deciding when a problem actually occurs. The Indiana ground 
water rule (327 IAC 2-11) makes it almost impossible to properly 
enforce these regulations. While the mine operation is occurring, a 
ground water management zone is established that extends 300 ft. from 
the mined area in all directions. Ground water standards are only 
applied at the boundary of the ground water management zone or beyond. 
No standards apply within the ground water management zone. This means 
that any contamination must migrate 300 ft. from the mine or the mine 
property boundary before any standards would be applied, meaning that 
any ground water pollution will be well established by the time it is 
subject to regulation.
    Once the mine has achieved bond release, the permit area of the 
mine becomes designated as limited class ground water (327 IAC 2-11-
4(d) (1)). The standards for this area become the existing levels of 
contamination within the mined area at the time of bond release. This 
rule runs completely counter to the requirements and intent of SMCRA. 
Instead of setting standards and requirements to prevent the 
contamination, the state allows existing levels of contamination to 
lower the bar and water quality.
    Federal and state mining law require that mined land be reclaimed 
to original or better uses. 30 U.S.C.A. Sec. 1265; Ind. Code Sec. 14-
34-10-2. However, the adopted ground water rule will automatically 
designate all ground water in mined areas damaged by the mining 
activities. Under this Rule, no mine can return an area to original or 
better uses if those uses relied on ground water, in violation of the 
federal and state SMCRA requirements.
    Under SMCRA, all mining operations must also ``minimize the 
disturbance to the prevailing hydrologic balance at the mine-site and 
in associated offsite areas and to the quality and quantity of water in 
surface and ground water systems both during and after surface coal 
mining operations and during reclamation.'' 30 U.S.C.A. Sec. 1265(b) 
(10); Ind. Code Sec. 14-34-10-2 (13). Indiana's rule eliminates any 
incentives to minimize impacts to ground water quality because the area 
will be designated as limited upon bond release. Furthermore, Section 4 
of the Rule contemplates that the limited classification may apply to 
an undefined zone of influence around a coal mine area, outside the 300 
ft. limit.
    The Indiana Department of Natural Resources has stated that the 
limited use designation will not change the requirements for 
reclamation, but Section 4 of the Rule clearly states that the limited 
use designation will have an impact on Ind. Code Sec. 14-34-4-7, coal 
mine permit or approval. Section 7 states what is expected of the mine 
operator in terms of protecting ground water in order for the permit to 
be approved. The fact that this section of mining law is affected by 
the limited use designation would seem to indicate that a lesser 
expectation of ground water protection would result. It is reasonable 
to expect some impact upon ground water within the mined area, but this 
rule would make mined areas permanent sacrifice zones in regards to 
ground water.
    Indiana is not the only state that seems to remove mines from any 
accountability to ground water standards. The Illinois ground water 
rule (35 IAC 620) is similar to the Indiana rule. No ground water 
quality standards apply for inorganic constituents and pH within the 
area covered by the cumulative hydrologic impact area while the mine is 
in operation (35 IAC 620.450). Once bond release occurs, the ground 
water for mined areas is classified as ``other groundwater''. The 
standard for this classification is the existing level of contaminants 
present in the mine area. This classification is also extended to coal 
mine refuse disposal areas not contained within an area from which 
overburden has been removed, a coal combustion waste disposal area at a 
surface coal mine, or an impoundment that contains sludge, slurry, or 
precipitated process material at a coal preparation plant (35 IAC 
620.240).
    It would be unrealistic to assume ground water in mined areas will 
remain in pristine condition. There should be a qualitative, numeric 
standard in place that establishes a clear line when an unacceptable 
amount of contamination occurs. SMCRA only creates a narrative standard 
and gives no real clarification on this issue. Without any real measure 
of when mines violate the ground water protection provisions of SMCRA, 
there is no accountability toward protecting the water of coalfield 
communities. When the drinking water of coalfield communities is at 
stake, the decision of when action needs to be taken should not be left 
to opinion. SMCRA needs to be amended to provide a clear, defined point 
where enforcement is needed.
    In order to determine how to go about minimizing the damage to 
water resources within the mine area and preventing material damage 
outside the permit area, each mine is expected to complete a cumulative 
hydrological impact assessment (CHIA), which evaluates the probable 
impacts to the area's ground and surface water due to mining. The CHIA 
should examine site specific information in order to accomplish this 
task.
    HEC reviewed five CHIAs prepared by the Indiana regulatory agency 
that covered mines in five separate counties across a large 
geographical area. In all five, almost identical boiler plate language 
was used to describe the geologic conditions, the geochemistry of sites 
and effects on groundwater after mining. None contained the detailed 
site-specific analysis required before a responsible determination can 
be made of the possible impacts on the ground and surface water and how 
to best minimize these impacts. All five CHIAs assumed that the mine 
had a clay layer to prevent downward migration of water. Not one 
contained any analysis--much less acknowledgement--that water moves 
sideways and downgradient.
    There is little if any aquifer specific information in Indiana's 
strip mining permits; The state does not require that different 
aquifers be sampled individually for quality, or that bale tests or 
pump tests be performed on aquifers individually to determine their 
permeability, rate of flow or connections with other aquifers. The 
state is not requiring that recharge rates be calculated for individual 
aquifers or cumulatively for all aquifers in the area to be mined. The 
state assumes that the direction of ground water flow is according to 
the structural contour of the layers of earth, or simply quotes the 
U.S. Geological Survey's estimate for general flow of ground water for 
the entire region. Indiana does not require that static water levels be 
mapped from individual aquifers to determine direction of flow. Without 
this aquifer specific information, a proper analysis of the possible 
impacts of the mining on nearby wells is not possible.
    All five assessments also made the statement that the mine area had 
very little ground water regardless of the number of ground water users 
in the area. For example, the CHIA for the Farmersburg mine, permit # 
S-287-1, made this declaration despite the presence of hundreds of 
households within 5 miles of the northern end of the mine that used 
ground water as their primary source of drinking water.
    The CHIA was supposed to be a valuable tool in addressing site 
specific ground water concerns at each mine. Instead, these assessments 
have become boiler plate reports used to belittle ground water concerns 
rather than address them. Without numeric standards in place or 
adequate site characterization, the drinking water supply for numerous 
coalfield communities is not being adequately protected.
Citizen Participation
    When SMCRA passed in 1977, it included ground breaking language on 
citizen participation. Citizens were given the right to actively 
participate in the permitting process, the right to file a Lands 
Unsuitable for Mining Petition (LUMP), the ability to hold agencies 
accountable when the law is not properly enforced, and the ability to 
recover legal costs when they are forced to take legal action to ensure 
proper enforcement. Citizens were given tools including pre-blast 
surveys in order to protect their homes from blasting damage. The 
rights granted to citizens are one of the most important parts of 
SMCRA.
    These rights are not being upheld by the state agencies. I spoke 
with a number of Illinois residents while doing research for this 
testimony. They have all encountered stonewalling, refusal to accept 
citizen petitions, refusal to hold a public hearing, and long delays in 
the administrative appeals process that can last for years by the 
Illinois DNR. The citizens of Indiana have encountered similar tactics 
from the Indiana DNR. In fact, lack of good public participation was 
the most consistent complaint I have heard from Illinois residents.
    For example, at the closed Monterey Mine 2, ExxonMobil refused to 
place an impermeable cap over their 30 million cubic yard coal waste 
pile, claiming the pile wasn't contaminating the groundwater off-site 
even though high levels of arsenic were being detected in nearby 
drinking water wells. In 2002, Illinois DNR ignored the request for a 
Public Hearing about the high hazard dams that contain the waste. In 
2003, The DNR granted a public hearing on the reclamation plan, but 
refused to answer any of the public's questions on the plan.
    In 2003, the reclamation plan was approved despite the fact that 
the mining company did not tell where the monitoring wells on the site 
were located. Illinois DNR itself admitted in its own evaluation that 
this made it impossible to determine whether any possible contamination 
was migrating off site. Without this data, there is no way to address 
whether the reclamation plan adequately addressed possible ground water 
contamination at the site. The reclamation plan has been under appeal 
for over 4 years. The appeal is now at the federal level. Meanwhile, 
the first off-site sampling of the groundwater by the mine was 
performed in 2006 and showed contamination.
    In August 2005, Illinois DNR found that the pipeline the mining 
company had been operating to pump diluted contaminated groundwater 
into the Kaskaskia River was an on-going regulated activity. As a 
result, the public had a right to a public hearing on the pipeline. 
Illinois DNR had agreed to hold a hearing, but backed down when 
ExxonMobil filed extensive legal briefs arguing against the need for a 
hearing and designation of the pipeline as regulated under mining law. 
DNR sent the legal arguments to the OSM for review, who found that the 
mine arguments were not valid. In December 2006, Illinois DNR 
nevertheless changed their position in favor of the mine. The appeal of 
that decision is still underway.
    In a recent case in Indiana, citizens appealed the issuance of the 
mining permit for Vigo Coal Company's Chili Pepper Mine. The appeal was 
based on the fact that the mine permit application did not have all 
necessary documents required for approval of the permit. Indiana 
regulations (312 IAC 25-4-23) clearly require that the mine list the 
permit numbers or permit application numbers for other necessary 
permits. Even though the language of the regulation is clear and 
unambiguous, the Indiana Natural Resources Commission ruled in favor of 
the Indiana DNR on the grounds that the Commission always defers to 
agency interpretation of the regulations. The Natural Resources 
Commission is supposed to be the rulemaking body over the Indiana DNR, 
and is the final step in the administrative appeal process. Yet, they 
admitted in the public hearing on this appeal that they will always 
defer to agency opinion.
    The citizens filing the appeal did not have the resources to appeal 
the case to the state's courts so the precedent is established that 
agency interpretation of regulations will be a deciding factor in 
appeal cases. This has the effect of making any citizen appeal of a DNR 
decision a lost cause from the state unless they have the resources 
available to pursue the multi-year appeal process through the state and 
possibly federal courts. In short, the appeal process in Indiana is 
broken.
    For the sake of brevity, I have only included two examples of how 
the permit appeal process has been skewed against citizens. More can be 
provided to the committee upon request. Coalfield residents wishing to 
appeal a permit must fight the uphill battle of convincing the agency's 
own judges to rule that their agency has acted in error. Before they 
can reach any truly independent court, they must spend a large amount 
of time and money going through the administrative process. This system 
does not provide true oversight.
Power Plant Waste Disposal
    Coal mines across the country are increasingly used as dump sites 
for coal power plant wastes (PPW). The disposal of millions of tons of 
PPW raises unique problems and issues that are very different from 
those created by mining. SMCRA is simply not written with the intent of 
ever regulating such disposal operations. State regulations and 
policies on mine disposal of these wastes consistently fail to enact 
the most basic environmental safeguards needed to adequately protect 
human health and the environment. Disposal practices that would be 
forbidden under solid waste laws for the same wastes are approved in 
mines.
    The National Research Council (NRC) did a thorough study of the 
placement of PPW in mines throughout the country, ``Managing Coal 
Combustion Residues in Mines'' (2006). The study found that 
``enforceable federal standards are needed for the disposal of [coal 
combustion residues] in minefills to ensure that states have specific 
authority and that states implement adequate safeguards.'' The report 
found major deficiencies in existing state regulations on mine 
placement including inadequate waste and site characterization and the 
lack of enforceable performance standards.
    The focus of SMCRA and the regulatory agencies in regards to 
protecting water quality is preventing acid mine drainage, which 
results from the oxidization of sulfur and iron deposits in the mine 
overburden. PPW, on the other hand, presents completely different kinds 
of concerns and thus requires very different solutions. The major 
concern with PPW is that wastes have the potential to produce toxic 
levels of a number of different pollutants when they come into contact 
with water.
    The NRC's report found that ``high contaminant levels in many [coal 
combustion residues] leachates may create human health and ecological 
concerns at or near some mine sites over the long term.'' PPW contains 
concentrated levels of different pollutants including arsenic, cadmium, 
lead, selenium, boron, and sulfates. Dozens of scientific studies have 
found that contamination from PPW can cause deformities, reproductive 
problems, and death in mammals, fish, and reptiles. Despite all the 
available evidence of contamination problems from PPW, most state 
mining agencies refuse to admit that any threat is posed to ground and 
surface water quality by these wastes.
    The OSM has announced that it will be conducting a rulemaking on 
the placement of PPW in mines. We are thankful to OSM for starting the 
process of developing these regulations, but we have serious concerns 
whether the OSM will develop regulations that offer a sufficient level 
of protection to citizens beyond the status quo. For many years, OSM 
and state agencies have vehemently opposed citizen requests to enact 
regulations similar to the recommendations made in the NRC report. In 
order to ensure that the proposed federal regulations adequately 
protect human health and the environment, HEC believes the following 
elements must be included into the rule:
    The proposed rule must include the basic requirements of the 
Resource Conservation and Recovery Act (RCRA). The disposal of large 
quantities of PPW raises unique problems and issues that are very 
different from those created by mining. The proposed rule must include 
the basic safeguards laid out in the federal waste rule, the Resource 
Conservation and Recovery Act (RCRA), such as separation of the wastes 
from ground water, long-term ground water monitoring, and corrective 
action standards in order to ensure that these disposal operations are 
managed properly. Incorporation of RCRA into the rule will also ensure 
that citizens will receive a consistent level of protection for their 
health, water, and environment regardless of what kind of disposal 
facility they live next to.
    The current system of some disposal sites being regulated under 
RCRA and some under SMCRA has resulted in a double-standard for 
citizens living next to mine disposal sites in violation to their right 
of equal protection under the law. Coalfield citizens have been exposed 
to disposal practices at mines that would be in violation of RCRA such 
as open dumping into direct contact with groundwater. We therefore ask 
that OSM choose its recommended options of either a joint SMCRA and 
RCRA rule on mine disposal or a RCRA Subtitle D rule that is 
enforceable through SMCRA permits. These options are necessary to 
ensure a rule that provides adequate and equal protection to coalfield 
citizens.
    The regulations should include at a minimum the basic environmental 
safeguards recommended by the National Research Council study. These 
safeguards include waste characterization, site characterization, 
monitoring, standards for clean ups, and public input requirements. The 
study also recommends that contact between the wastes and water be 
minimized. We believe this would be best achieved by a requirement to 
prohibit disposal of the wastes below the pre-mining ground water 
table. These requirements should be enforced regardless of whether the 
PPW is being dumped or used for ``reclamation'' in active or abandoned 
mines.
    OSM should adhere to the Federal Advisory Committee Act (FACA) 
process in order to ensure that all stakeholders are brought to the 
table for an open discussion of the proposed rule. Coalfield residents 
and citizens groups have been underrepresented at numerous OSM forums 
on the issue of mine placement of PPW. These stakeholder groups deserve 
adequate representation in discussions of the proposed rule. We ask 
that regional public hearings be held on the proposed rule to ensure 
citizens have adequate opportunity to voice their concerns.
Longwall Mining
    In Illinois and Ohio, homeowners and farmers are very concerned 
about the increased use of longwall mining. Unlike traditional room and 
pillar mining, longwall mining removes the entire coal seam in thousand 
foot long panels beneath an area that can extend for tens of thousands 
of acres. The mines are allowed to subside, which can cause the surface 
to sink as much as four to five feet. Illinois DNR has claimed that it 
has no authority over longwall mines even though SMCRA regulates the 
surface impacts of underground mining (30 USC 1266).
    The subsidence from longwall mining has caused a number of serious 
problems in Pennsylvania. Houses have suffered severe damage including 
being pulled off their foundation, fallen chimneys, broken window and 
door frames, and broken water and gas pipes. Longwall mining can also 
have a serious effect on ground and surface water. The subsidence can 
cracks to form in aquifers, which leads to dried up wells and springs. 
On the surface, it can alter the flow of streams, turning the waterways 
into isolated pools.
    The major concern for residents of Montgomery County Illinois will 
be the impact on farmland. Many of the farms in the area are centennial 
farms that have been owned by families for generations. In 
Pennsylvania, longwall mining has altered drainage patterns and 
rendered farmlands too wet to be farmed. Over 27,000 acres of the 
farmland in this county is in bottomlands and subsidence of four feet 
would most likely disrupt drainage ways, and lead to more flooding of 
the farms. Subsidence from longwall mining has also opened up cracks 
and deep fissures in crop and pasture land that pose serious hazards to 
livestock and farm equipment.
    The Illinois DNR has repeatedly refused to address citizen concerns 
about possible damage to their homes and farms on the grounds that 
SMCRA does not give them the authority to regulate underground mines. 
Citizens in Montgomery County have filed a petition to designate the 
area as lands unsuitable for mining. The Illinois DNR has denied the 
permit repeatedly on the grounds that it cannot accept such petitions 
for underground mines, but this would appear to directly contradict 
their own regulations, which declare the ``An area shall be designated 
as unsuitable for all or certain types of mining operations.'' (225 
ILCS 720/7.02)
    The Illinois DNR seems to be completely unwilling to take any sort 
of regulatory action in regards to longwall mining. This situation 
leaves citizens with no recourse for protecting their homes and their 
property from possible damage from longwall mines. Coalfield residents 
in Pennsylvania have also experienced the same resistance from their 
state agency. Congress must take action to protect the property rights 
and environment of citizens potentially impact by these mines. 
Currently, mines are given a green light to damage peoples' property.
Conclusion
    While SMCRA is at its core a good law, the language needs to be 
strengthened in many places in order to adequately protect coalfield 
communities and their environment. The need for coal is not going away 
anytime soon, but that need must not grant companies a license to 
damage homes, quality of life, and drinking water.
    We ask that you please consider taking the following steps to give 
SMCRA the muscles and teeth it needs to adequately protect coalfield 
communities and their environment:
      Define what it means to minimize disturbances and prevent 
damage to the hydrologic balance
      Create better oversight of the state agencies
      Require national regulations on mine disposal that at a 
minimum incorporate the recommendations of the National Research 
Council's report Managing Coal Combustion Residues in Mines
      Adopt requirements to minimize surface impacts from 
longwall mining
    Thank you for the opportunity to testify on this important law.
                                 ______
                                 
    The Chairman. Ms. Pfister.

 STATEMENT OF ELLEN PFISTER, ON BEHALF OF THE NORTHERN PLAINS 
   RESOURCE COUNCIL AND THE WESTERN ORGANIZATION OF RESOURCE 
                  COUNCILS, SHEPHERD, MONTANA

    Ms. Pfister. Mr. Chairman, members of the Committee, thank 
you for the opportunity to testify today on the 30th 
anniversary of this landmark legislation.
    I am Ellen Pfister, a rancher from the Bull Mountains North 
of Shepherd, Montana. Unlike most, if not all, of you here 
today, I own property that is the subject of an ongoing coal 
permit.
    I first testified before this committee in September 1972 
in support of Representative Kenneth Heckler's bill for a 
temporary ban on strip mining. At that time, strip mining was 
proposed for the north end of our ranch. Like many others who 
were involved in the passage of SMCRA, I was naive enough to 
believe that the law would be enforced, and that I could go on 
about my life.
    From 1988 through 2007, I have been involved with the 
permitting process for a speculative longwall mine that will 
undermine part of my property. Right now it is shut down for 
lack of money, but, like cancer, it has not gone away yet.
    SMCRA is a good law as far as it goes. It has resulted in 
the regarding of a great many spoils areas and revegetation of 
those areas, with varying degrees of success.
    But the three biggest failures in SMCRA are the failure to 
include the reclamation of surface effects of longwall mining 
beyond the mine adit areas, the failure to anticipate the 
expansion of mountaintop removal, and the failure to reclaim 
underground water resources by minimizing damage to them. The 
first two are omissions from the law, and the third is a 
failure to adequately enforce the law.
    In the West we don't have mountaintop removal, but we have 
aquifer removal, because surface mining in the West is mining 
the aquifer. The damage mountaintop removal does is 
spectacular, like beheading a person. Longwall and aquifer 
mining are like dying of pancreatic cancer. One death is much 
more spectacular and visual, but one is just as dead from 
cancer.
    The failure to protect our water resources is connected to 
overall reclamation rates in the West that are abysmal. OSMRE 
data shows only about 6 percent as much acreage reclaimed as 
mined in the West over the last 10 years.
    Western Organization of Resource Councils and the Natural 
Resource Defense Council will be releasing a report next 
Friday, the 30th anniversary of the Act, with this and other 
findings about the status of reclamation and enforcement under 
the Act in the West. We will provide copies of this report to 
the Committee, and ask that it be made part of the record.
    One of the reasons for this low level of bond release is 
the way the permit plans have been approved. Decker and Spring 
Creek Mines in Montana were allowed to mine for years before 
regrading any appreciable acreages, let alone beginning 
revegetation. We believe the permits which allowed that were 
granted in violation of SMCRA's standard that reclamation be as 
contemporaneous as possible. Twenty years does not meet that 
standard. The State of Montana should not have allowed it, and 
OSMRE should have held the state responsible.
    This situation presents a good opportunity for further 
oversight by Congress. There is another phrase that has no 
definition after 30 years of the law.
    Additional reasons for low levels of final bond release 
detailed in my written statement are the attitudes of company 
managers, which are reflected in the revegetation on the 
ground, and do very significantly. The use of rolling bonds and 
the failure to reclaim the water resource, which is required 
before final bond release, water replacement in Montana is 
euphemistically termed opportunistic. This means no positive 
action is taken to prevent the destruction of aquifers, and no 
plan exists to replace or protect the damaged water.
    Mining companies are allowed simply to keep their eyes open 
for opportunities to replace destroyed wells and springs as 
they mine along. However, they do seem to overlook 
opportunities.
    I do not believe there is anything especially wrong with 
SMCRA, with the exception of not covering longwall mining and 
mountaintop removal. But I do believe that as an agency, OSMRE 
has long been lacking the intent and resources to enforce SMCRA 
as it should be enforced.
    The inspectors are the face of OSMRE and the states to 
protect the citizens from the effects of coal mining. SMCRA was 
well drawn, with two enforcement agencies, state and Federal, 
because it is all too easy to co-opt one or the other. It is a 
little harder to co-opt both, although I am now beginning to 
wonder.
    Essentially, OSMRE inspection personnel are constables on 
patrol, and if a state has primacy, their inspectors have the 
same mandate.
    In closing, Congress could pass more laws and see them 
twisted or ignored. It is better to seek enforcement of the law 
you have. When the agency charged with enforcing laws you have 
passed attempts to withdraw from enforcement and hide from the 
public, who believed in the law you have passed, the agency 
causes the public, both industry and citizens, to hold the law 
in contempt.
    Mr. Chairman and members of the Committee, you should be 
angry that SMCRA is being administered in this fashion. We 
appreciate your action in holding this hearing, but you need to 
do closer oversight on OSMRE, in Washington and in the field, 
to hold OSMRE accountable for its enforcement of the Act, and 
for adopting regulations and policies consistent with the 
intent of Congress, and for ensuring that state agencies do 
likewise.
    We urge you to use your oversight authority to impress upon 
OSMRE the importance of improving reclamation, with a special 
attention to reclamation of water resource within the mine 
permitted areas. Whether the issue is acid mine drainage, the 
impacts of mountaintop removal and longwall mining, and the 
routine aquifer removal we see in western strip mines.
    We also suggest that you demand improved reporting from 
OSMRE, and urge you to support more funds to OSMRE and state 
agencies. The agencies can do a much better job with the amount 
of money they have, but it is also clear that lack of funds and 
personnel is part of the problem.
    I am submitting some pictures showing some of the coal mine 
sites I have visited over the years, as well as a copy of a 
document from the Western Interstate Coal Board, called an 
impending crisis for coal supplies, which deals with funding to 
the coal programs of the western states.
    Mr. Chairman, before I close I would like to thank you for 
your leadership on the 1872 Mining Law Reform, as well. Western 
Organization of Resource Councils and Northern Plains also 
strongly support your legislation that is being heard tomorrow.
    Thank you.
    [NOTE: The pictures contained on a CD have been retained in 
the Committee's official files.]
    [The prepared statement of Ms. Pfister follows:]

            Statement of Ellen Pfister, Shepherd, Montana, 
           on behalf of the Northern Plains Resource Council

    I am Ellen Pfister, a rancher from the Bull Mountains North of 
Shepherd, Montana. I own property that is the subject of an ongoing 
coal mining permit. I am testifying today for the Northern Plains 
Resource Council and the Western Organization of Resource Councils. 
Northern Plains is a grassroots conservation and family agriculture 
group that organizes Montana citizens to protect our water quality, 
family farms and ranches, and unique quality of life. WORC is a 
regional network of seven grassroots community organizations, including 
Northern Plains, which have 9,500 members and 45 local chapters in 
seven states, including the coal-mining states of Montana, Wyoming, 
Colorado, and North Dakota.
    In the early 1970s, huge energy corporations threatened the homes 
and livelihoods of ranch families near Colstrip and in the Bull 
Mountains. Those families and other Montanans formed Northern Plains in 
1972. Northern Plains' early efforts led to passage of a state strip 
mine law, and Northern Plains was also a national leader in securing 
passage of the historic federal strip mine law in 1977.
    I first testified before this committee in September 1972 in 
support of Representative Kenneth Heckler's bill for a temporary ban on 
strip mining. Little did I know that I was about to get involved with a 
sideline project that would occupy the rest of my life. At that time, 
strip mining was proposed for the north end of our ranch. There were no 
safeguards for the surface property owner at all. On the third attempt 
at passage, the Surface Mining Control and Reclamation Act of l977 was 
passed by Congress and signed by President Carter.
30 Years of SMCRA
    SMCRA is a good law as far as it goes. It has resulted in the 
regrading of a great many spoils areas and revegetation of those areas 
with varying degrees of success. There has been little success in 
reforesting areas which were previously hardwood forests. Most of the 
mountaintop removal areas are denuded of trees. The western prairies 
have vegetation ranging all the way from weed patches to some pretty 
good looking mixed grasslands. The spoils are being regraded to 
approximate original contour to a greater or lesser extent.
    The three biggest failures in SMCRA are the failure to include the 
reclamation of the surface effects of longwall mining beyond the mine 
adit areas, the failure to anticipate the expansion of mountaintop 
removal and the failure to reclaim underground water resources. The 
first two are omissions from the law, and the third is a failure to 
adequately enforce the law.
    Underground coal mining, whether room and pillar or longwall or any 
other kind of underground extraction, should be included within the 
purview of SMCRA. When the strippable coal is gone the coal industry 
will turn to other methods for coal recovery. The surface damages and 
damage to water will not abate with a change in the method of mining. 
These surface impacts of underground mining should be clearly included.
    When it passed SMCRA, Congress did not foresee the damages that 
large scale longwall mining can do or the potential for explosion in 
size of mountaintop removal. In the West, surface mining removes the 
underground water aquifer--the coal seam. All of these mining methods 
are extremely damaging to water regimes. All of these damage the 
surface, but in different ways. Mountaintop removal is like beheading a 
person, and longwall mining and surface mining are like dying of liver 
or pancreatic cancer. Beheading is much more spectacular and visual, 
but one is just as dead from cancer.
    OSM has permitted the States to approve permits that I believe 
violate mandates within SMCRA itself, such as the standard for 
reclamation to follow behind mining as contemporaneously as possible. 
Permits that allow a mine to wait 20 years before beginning regrading 
and other reclamation procedures certainly have no element of 
contemporaneous reclamation. SMCRA is bent to the mine operator's 
complete convenience. Certain pits that are left open for years on the 
chance that the mine may need that coal to blend fall short of 
contemporaneous reclamation as well.
    The practice seems to be that the terms of permits will be enforced 
even if the permit does not comply with SMCRA, as long as the permit is 
complete by dealing with every section of the state regulations. 
Granting the permit gives an easy out on enforcement of the standards 
of SMCRA to the permittee and the agencies.
    As a subject and participant in the permitting process in Montana, 
I have come to the conclusion that it can be summed up as ``Promise her 
anything, but give her Arpege''...or maybe, dime store perfume. Any 
remediation in the permit can be relaxed or voided if the permittee 
cries economic hardship. As someone who will suffer economic harm if 
remediation measures are not enforced and successfully implemented, I 
really do not know what the final remediation will look like. I suspect 
the permittee's economic hardship will trump my economic hardship. The 
permit is supposed to be a promise of reclamation and repair by the 
State to its citizens, because the State approved the reclamation plan 
and accepted the promise from the permittee. I have grave doubts as to 
how binding that promise is on the permittee.
Speculative Mine Permitting
    From my personal experience, application of SMCRA's mine permitting 
procedures by state and federal agencies does not deter application for 
permits by speculative ventures. I hope that what I have dealt with for 
the last 18 years is not common nationwide.
    Like many others who fought for passage of SMCRA, I was naive 
enough to believe the law would be enforced, and that I could go about 
my life. Coal entered my life again at Christmas l988, when two boys 
from Pikeville, Kentucky, came around wanting to start a coal mine that 
would affect the north end of our place. Then a bigger fish, Burlington 
Resources, came around with the idea of a longwall mine and a proposal 
to trade Federal coal for some of their land. It would be a large block 
of coal and would support a 3 million ton a year mine. I knew 
Burlington Resources would never mine a lump of coal on their own. 
Their ambition was to be gentlemen royalty collectors, but the 
permitting process began, and regardless of how speculative a mine plan 
is, a landowner or party adjacent to a mine cannot afford to ignore it. 
The permitting process grinds on regardless of the economic feasibility 
of a project. This speculative mine has occupied my time and the 
Montana Coal Program's time for 18 years with no sign of economic 
success for the mine.
    Burlington Resources put the permit on the market as soon as it was 
issued in l992 and finally found a buyer in John Bauges, Jr. of 
Tennessee in l995. He began mining then, but in l998, the permit was 
permanently revoked for mining with a pattern of violations, and the 
bond forfeited. Two years later the state of Montana had barely begun 
to clean up Baugues' mess, when John Baugues showed up again, striking 
a deal with the State of Montana to reduce his fines by about two-
thirds and requesting that the State of Montana resurrect the 
permanently revoked permit. OSMRE was brought in to rule on whether a 
permanently revoked permit could be resurrected. OSMRE ruled that there 
was one precedent for doing so from West Virginia; however, no permit 
number or mine name or location was ever cited. No one that I met from 
West Virginia had ever heard of it. OSMRE enabled the resurrection of a 
mine that is a pure speculation.
    Once the permit was resurrected in 2000, Baugues et al came back 
with a bigger and better plan to mine 12 million tons a year, which 
would take out the whole coal reserve in our area in 30 years and leave 
the entire heart of the Bull Mountain recharge area with deeply damaged 
water. In addition to the mine, the Baugues consortium proposed a 700 
MW merchant power plant, which has now morphed into a 300 MW power 
plant and a 22,000 barrel a day coal to liquid fuels plant, which in 
turn needs an additional 150 million tons of strippable coal to be even 
remotely feasible.
    The Bull Mountain Mine shut down again in March 2007, as it was 
being sued in foreclosure by bond holders, North Carolina and Florida 
churches and retirees, who were promised 11% return on their investment 
bonds. While Baugues et al were defaulting on their bonds, they were 
running around our country trying to buy ranches, some of which they 
lost their earnest money on, not being able to make the final payment.
    In January 2007, Montana DEQ finally approved the permit amendment 
to the Bull Mountain Mine, which takes in the north end of our place. 
They claim our high springs will not be damaged. Our springs are in the 
vicinity of 500 feet above the coal. Aside from the property owned by 
the coal company, our ranch will be the second property to be damaged 
when the second longwall panel begins operation. I am not optimistic 
about the future of our water; ``no damage'' does not jibe with what I 
have seen in other areas of the country. The primary authority relied 
upon by the state is a consultant paid by the permittee in l992, who 
cited no specific instances in western longwall mining similar to the 
geologic conditions in the Bull Mountains in finding that there would 
be little or no damage to our water.
    Since the mine was first permitted in l992, it has never operated 
on the schedule shown on the permit. They are months and years behind 
schedule. The mine would eventually take out a subdivision in the Bull 
Mountains, if it proceeds as planned. Those homeowners are hoping the 
threat will go away, and don't want to face the problem of what and 
when will something happen to their property. The town of Roundup no 
longer holds its breath with anticipation when the mine makes an 
announcement promising jobs and economic development, and payment terms 
in Roundup are cash only for the mine. The permit is the only thing 
that holds this speculation together.
Longwall Mining
    Most of the longwall mines in the West are under public lands; the 
people are gone. The effects are hidden underground, known only to the 
regulators and the mining companies. Since the U.S. Bureau of Mines was 
closed in 1996, there have been and still are no studies being done on 
the effects of longwall mining. The only studies I could find were 
scientists putting their sensors down well holes in the east, and 
bewailing the fact that after the longwall machine passed, they 
couldn't get anymore readings on where the water went. They had no 
money to pursue the information, and probably no way to access legally 
the land that was mined. That is a failure in SMCRA. The entire area in 
an underground permit should be included in SMCRA, because the affects 
of longwall coal removal go to the surface miles away from the adits 
and processing plants. Unless there is jurisdiction through government 
action, there is no way for follow-up studies to be done of water 
damage in longwall mine areas, and no one with the resources to find 
the lost water.
    Since l989 when longwall mining came to the Bull Mountains, I have 
tried to find out what has happened in longwall areas across the 
country. The water buffalo--a plastic above-ground cistern, usually set 
on the road in front of a house, which mining companies use to deliver 
replacement water to homes and farms--is the indicator species for the 
health of water in longwall areas. Where has the original water gone 
that was once in wells and springs? No one seems to know, and 
landowners are powerless to force a search. I cannot think that water 
stored for home use in water buffaloes is healthy for families.
    I met a dairyman in Western Pennsylvania whose farm dated back to 
l795 who was ultimately forced out of dairying because the water hauled 
to his cows was chlorinated, and they could not thrive on it. I have 
been visiting by e-mail with a farmer, Floyd Simpson, in Southeastern 
Ohio whose land lies about 500 feet over the coal seam being 
longwalled, who lost springs going back to the late 1700's, and old 
wells. It took about three weeks for the water to fail after 
undermining. The coal company has been very slow to deal with the 
promises it made him prior to undermining. He has had trouble with 
water haulers after undermining, and his historic farm buildings were 
severely damaged. He has a website, www.countrymilefarm.com, with a 
diary of the damage that occurred when he was undermined in late 2003. 
He does not know where his water went. He knows he does not have the 
water he had.
    Southwestern Pennsylvania has been devastated by longwall mining; 
it is a land of leaning chimneys, damaged homes, and water buffaloes. 
Interstate highways as well as county roads have been undermined. I 
have seen half a county road slipped 40 feet down the hill from where 
it had been, thanks to subsidence.
Acid Mine Drainage
    Permits that allow acid mine drainage are still being issued. I do 
not find that a failure in the law, but in the administration of the 
law. Acid mine drainage from Eastern mines seems to be the norm. Save 
Our Cumberland Mountains fought for 10 years to get Fall Creek Falls 
State Park in Tennessee declared unfit for mining due to the certainty 
that mining in that watershed would cause acid mine drainage over the 
falls. I doubt if many permits have been denied on the grounds that 
mining would cause acid mine drainage. Although SMCRA allows the 
designation of areas unsuitable for mining, very few areas have that 
designation, and it is difficult to get.
    Save Our Cumberland Mountains did a study in l989 on acid mine 
drainage on reclaimed sites in Tennessee and found a lot of it, despite 
the promise we saw in SMCRA to end it. I have watched over the years as 
OSMRE tried different things to mitigate the improvidently granted mine 
permits that were discharging acid mine drainage. There was the 
Appalachian Clean Streams Initiative that tried to dip into USDA funds 
to help out, as well as waylay any other money that could be found. 
There was AMD and ART, which was an attempt to show how acid mine 
drainage treatment areas could be turned into a community enhancement. 
That, too, used funds other than funds from the party who caused the 
damage in the first place. OSMRE has not had the guts to face down the 
companies to make them internalize the costs of their actions, and fix 
the damage that is occurring on permitted mine sites.
    Since the passage of SMCRA in l977 the size of Eastern mines, 
particularly longwall and mountaintop removal, is increasing and 
beginning to approach the size of some Western mines. The Eighty-four 
longwall mine at Washington PA was permitted to undermine 22,000 
suburban acres initially. The mountaintop removal mines are up to 5,000 
acres and above. The mountaintop removal mines are depopulating the 
towns and settlements that are unlucky enough to reside below them.
    The Western mines depopulate areas as well. The practice has been 
to buy out the rancher and give them an option to buy back at some time 
in the future. If the mine is on public lands, the public is excluded 
from the mining area. Both East and West are depopulating coal bearing 
areas. If one becomes a tenant of the company when he had previously 
been a landowner, he is no longer independent or in a position to speak 
his own mind. The company regards the permit as being between the 
company and the agency and no one else should have anything to say. If 
the people are gone, there is no one to see or to tell how badly the 
mines reclaim the mined lands.
Water Damage
    We don't have mountaintop removal in the West, but we have aquifer 
removal. The mining companies and regulatory agencies regard water in 
the western mines as fair game for damage and diminution. Water from 
disrupted aquifers comes into the pit, with no attempt to insulate the 
water from contact with the spoils materials. Experimental practices 
have been suggested from outside the agencies and industry, but those 
practices would take planning at the permit issuance stage. That has 
not been done in the past, and there are no plans to do it in the 
future. Some of the Western mines are dry in the pit, but others have 
quite a lot of water that pours into the pit. The flushing that does 
occur within the pit is unpredictable and uncontrolled. Now, to add 
insult to injury, OSMRE is considering a new regulation that would 
allow the dumping of fly ash in the strip pits in the East. I do not 
believe that Congress meant to allow the dumping of industrial wastes 
in surface mining pits when it passed SMCRA.
    The Colstrip, Montana, electric generating plants offer a good 
preview of what can happen when fly ash is mixed with water. The fly 
ash pond at Colstrip was constructed in about 1974 to a depth of eighty 
feet, but only the top 40 feet were lined with impermeable material. 
Water began leaking from the bottom of the fly ash pond shortly after, 
contaminating the wells on the Kluver Ranch downstream. Thirty years 
later, the pollution has advanced downstream to contaminate the wells 
on the McRae Ranch. The ranch wells were drilled deeper to get below 
the pollution, but there is nothing to keep the pollution from 
eventually reaching the deeper water as well. The company has been 
pumping the surface water from the toe of the pond back into the pond, 
but the water keeps traveling underground. I do not think OSMRE has the 
will to enforce anything that might approach safe storage of fly ash 
underground in a wet mine, and I know the State of Montana does not.
    Recently the Rosebud Mine at Colstrip cut into an area called Lee 
Coulee, which was a new mining area. They hit a tremendous vein of 
water which they pumped on down the coulee, ruining 90 acres of hay 
land. It drained the springs above the mine cut. They are no more. Don 
Bailey's hay ground is ruined, and the water is gone. He had to sue the 
mine to recover his damages. The waste of water from Lee Coulee is an 
act of extravagance like lighting cigars with thousand dollar bills.
    The Rosebud mine also had a twenty mile highwall open for a number 
of years--10 miles on the north side of the hill, and 10 miles on the 
south side of the hill, and the mine is moving in a direction which has 
the potential to create even longer highwalls. The mine was keeping the 
mine road at the base of the highwall open to have a loop road on which 
to haul coal.
    The State of North Dakota issued a permit to turn Kenney and Gwen 
Thompson's farm land into a dump for an adjacent mine that was mining 
on the farm. The farm couple didn't know about it until diesel fuel 
turned up in the well at their house. OSMRE was no help to them. They 
eventually sold to the mine due to the farmer's ill health. Miners at 
the mine told the couple about all the hazardous waste the mine dumped 
in the mine pit on their land.
    Now there is a lawsuit filed in Denver over dumping fly ash in the 
Navajo Mine in New Mexico and leaving it open, blowing ash in the wind. 
OSMRE is responsible for mining on Indian lands. OSMRE allows dumping 
fly ash in the mine pit, which is not clearly authorized by SMCRA. The 
mine operator is not even covering it in a prompt manner, which should 
be required even if SMCRA authorized dumping fly ash in a mine. I saw 
fly ash being dumped in that mine in a flyover in l992. There is a lot 
more fly ash there now.
    When we were in the permitting stage of the initial Bull Mountain 
Mine, we were told by state agency personnel that water replacement 
would be ``opportunistic''. This means that the mine operator would 
develop sources of replacement water when they run across them, in the 
course of mining--as opposed to having a plan for replacing the water 
up-front, in the permit, before mining begins. A Colstrip area rancher 
watched one of the mines bury a spring that could have been developed 
with a little care--so much for opportunistic development.
    The Jacobs Ranch Mine in Wyoming is finally putting in for bond 
release on the areas against the Rochelle Hills, which were mined about 
1980 when the mine opened, because water is finally beginning to 
infiltrate into the mine areas from the undisturbed areas toward the 
hills, starting to re-establish the groundwater that was there before 
mining. As it advances west, the mine is also dewatering the coal in 
advance of its mining area to get the coalbed methane out before it 
removes the coal. The combination of surface mining and coalbed methane 
development may result in an area devoid of any water for a very long 
time.
    Water loss in the East is typically dealt with by either a water 
buffalo or connecting people to a pipeline from somewhere else. I have 
always wondered what will happen when that ``somewhere else'' is also 
damaged by coal mining, and that water disappears as well.
The Citizen: Regulation and the Law: State and Federal
    To the ordinary person, of the 4 sets of documents that can govern 
coal mine reclamation, SMCRA is the plainest to read and understand. 
The language is generally set in terms of ``shall'' and ``will'', which 
most people understand, whether they like it or not. Going back about 
the last 25 years at least, OSM has been in the business of putting out 
regulations to bend ``shall'' and ``will'' into something else, if 
possible. I don't know of any proposals to strengthen SMCRA regulations 
during that time.
    Neither the states nor OSMRE have any programs to educate citizens 
about their rights under SMCRA, the law's citizen enforcement 
provisions, or the standards of reclamation established by SMCRA on 
other than an ad hoc basis. There is no easy reading document for 
citizens. The text of SMCRA itself is the plainest of the materials 
available.
    The federal regulations are long and a lawyer's joy. When the state 
laws and regulations are added on top of that, which is the case when a 
state has primacy, the amount of material to digest becomes nearly 
overwhelming. Montana's education for citizens about what the law says 
was to give them a copy of the state regulations, but even that seems 
to have gone by the wayside in recent years.
    The Montana law has gone from a law which said ``shall'' and 
``will'' to one which says ``may'' and ``should'' to favor the newly 
fashionable tenses in legal writing. ``Shall'' and ``will'' are clearly 
defined in court cases and English classes. The Department of 
Environmental Quality, acting at the direction of the Montana 
legislature, is attempting to conceal the mandatory effect of SMCRA, 
and OSMRE has gone right along with this, although SMCRA requires state 
programs to be no less effective than the federal program. Essentially, 
OSMRE inspection personnel should act as constables on patrol, and if a 
State has primacy their inspectors have the same mandate. Montana is 
trying to obscure that mandate and to remove the sense of immediacy of 
enforcement under the law changes of 2003 and 2005. OSMRE tried to 
obscure the sense of immediacy with its Reg. 8.
    Reg 8, in its latest, 1999 incarnation, is an internal OSMRE 
directive that has functionally eroded the independence and ability of 
the agency's field staff in overseeing state programs. Much like 
``Catch-22'', Reg 8 effectively allows state agencies a veto over what 
part of their programs can be evaluated and corrected by OSMRE, and 
prohibits evaluation of off-site impacts by OSMRE if the state program 
doesn't define them as off-site impacts.
    It takes years for OSMRE to approve or disapprove changes to 
Montana's law and regulations. In the meantime, the Montana agency 
enforces changes made by the legislature to the law and its own changes 
to implementing regulations, regardless of whether they comply with 
SMCRA or have been approved by OSMRE. I wonder what happens when 
Montana approves actions under its law while waiting for OSMRE to rule, 
and later it is found that the approved action was not in compliance 
with SMCRA.
    OSMRE's budget for ``environmental protection,'' which includes 
funding for state program evaluation, fell by almost 18 percent, 
adjusted for inflation, between 1997 and 2005. The number of state 
program evaluation staff also fell. This may explain why OSMRE is so 
slow in processing regulatory packages. It takes so long, that if one 
has commented on a package, by the time the ruling comes out, one has 
almost forgotten about it. If the non-compliant action is ensconced in 
the permit, will Montana enforce that rather than an action which would 
comply with SMCRA?
Regulation and Money: State and Federal Relationship
    OSMRE was a victim of the Clinton balanced budget drives. The first 
people cut were the inspectors, and the first of those to go were women 
and minorities. The cuts have not slowed down under subsequent 
administrations. It is no wonder that now, as its personnel ages and 
retirees, OSMRE is running into a shortfall of qualified people to move 
up.
    The inspectors are the face of OSMRE and the states. They protect 
the citizens from the effects of coal mining. OSMRE has tried to 
withdraw itself from direct enforcement and contact with possible on 
the ground enforcement. SMCRA was well-drawn with two enforcement 
agencies, state and federal,
    because it is all too easy to co-opt one or the other. It is a 
little harder to co-opt both, although I am now beginning to wonder. 
OSMRE has further tried to reduce its presence by refusing to consider 
offsite impacts from mining unless the states report the offsite damage 
in state statistics.
    The Western Area Office of OSMRE is not even listed as tenant in 
the Denver office building in which it is located on the 33rd floor. 
Not only has OSMRE tried to withdraw from direct enforcement by way of 
Regulation 8, but apparently the Western District Office of OSMRE is 
trying to physically hide.
    In passing SMCRA, Congress intended that the regulating agency keep 
a presence in the coalfields and that the permits be available for 
inspection in the coal fields. Montana is just barely in compliance 
with SMCRA on that point, with the Billings Office having only a 
generalist and a secretary. The generalist employee is also an 
inspector. All the other inspectors in Helena are also specialists in 
other fields, and every specialist is an inspector. The question is 
whether academic specialists also have the temperament to make the 
kinds of decisions that an inspector must make. Billings is about 90 
miles from the closest big surface mine. The rest are hundreds of miles 
further. Helena is 250 miles from Billings. Inspecting from Helena will 
be difficult, and I think the amount of travel time will render the 
coal program less effective.
    The Montana Coal Program has been losing employees, and the money 
to hire replacement employees has been declining, especially from 
Federal sources. The Federal Government was obligated to fund the 
Western States to the extent that the coal in the state belonged to the 
United States. The Western Interstate Energy Board says that the 
Federal Government is saving money with the states accepting primacy, 
because the state pay levels are so much lower. Yet the Federal 
Government still keeps cutting real dollars from OSMRE and state 
budgets.
    Montana has been saving money by paying wages for people with 
advanced degrees that are significantly below what they could earn in 
industry. Either the people who chose to work for Montana are dedicated 
to something other than top dollar, or they are short on competence, or 
they have reached a certain age in industry where industry no longer 
wants to hire them. I do know that the State has been a revolving door 
for hydrologists of all types. They get a little experience from the 
State to show on their resume, and then move on. The Montana Coal 
Program has been defunded and short changed on personnel, and it is no 
wonder it is teetering on the brink of someone requesting a 731--asking 
OSMRE to take over a state program because of the state's failure to 
meet the requirements of SMCRA. The Montana legislature found $250,000 
additional temporary funding this year, but now it appears that only 
part of the money will be available to alleviate the employment 
problems at DEQ.
    If there is not better funding forthcoming, it is possible that the 
United States will have to pick up the tab for regulating the damage 
that will come from its appetite for coal. Funding less today will cost 
you more tomorrow.
Bond Release
    OSMRE data shows that 22,905 acres have been reclaimed and achieved 
final (Phase III) bond release in the West over the last ten years; 
meanwhile, 400,000 acres were disturbed by new mining. I think there 
are several reasons for this low level of bond release (about six 
percent as much acreage reclaimed as mined).
    The first is the way the permit mine plans were approved by the 
agencies. Decker and Spring Creek in Montana were allowed to mine for 
years before treating any appreciable acreages for regrading, let alone 
revegetation. We believe the permits which allowed that were granted in 
violation of SMCRA's standard that reclamation be as contemporaneous as 
possible. Twenty years does not meet that standard. The State of 
Montana should not have allowed it, and OSMRE should have held the 
state responsible. This situation presents a good opportunity for 
further oversight by Congress.
    The second reason is that some companies do not want to comply with 
the revegetation standards. Westmoreland has been head butting Montana 
over that for some years now. Westmoreland lobbied successfully for 
significant changes to revegetation and postmining land use standards 
in the 2003 Montana legislature--just as another mine in the state 
showed that it was possible to meet Montana's the previous, standard 
for revegetation. The difference was the attitude of company 
management. The mine which did a good job was a Rio Tinto mine, and its 
company managers had decided it was cheaper to comply with 
environmental laws than to constantly be hauled into court. The 
attitude of the managers was reflected in the quality of reclamation on 
the ground.
    Revegetation is possible in most of the northern high plains, given 
the right company attitudes, but water resource reclamation is much 
more problematic, and is the third reason why final bond release is 
low. Water resource reclamation has had the lowest priority in the 
permitting and reclamation process. There are promises in the permits 
to replace individual water resources, but it is unclear whether and 
how those promises have been kept. Replacing individual resources 
depends on having a resource that can be found and depended upon to be 
potable, at the very least. I don't know how the states are going to 
meet the standard of not degrading and diminishing the water resource 
in the mine area. The practice today--leaving up to time and fate to 
clean up water quality and quantity--is not satisfactory to those of us 
who live in the coal fields. There is no research in the area, and the 
regulators are accepting time and fate instead of requiring specific 
actions to restore pre-mining hydrology.
    Until the water is reclaimed, there should not be bond release. The 
States and OSMRE are coupled in ignoring this problem. If the States 
and OSMRE accept any more permits or permit amendments that ignore 
reclamation of the total water resource, a fine would be in order 
again.
    Montana has been doing what is called rolling bond release, which 
is a fourth reason why final bond release is so low. In Montana, Stage 
IV bond release is the final stage indicating that the water resource 
has been reclaimed, and the state retains a small amount of bond money 
until Stage IV release. 9/11 raised the costs of bonds across many 
industries, including coal. The Stage IV bond money is now mounting up, 
and there are fears that if large amounts of acreage are suddenly up 
for bond release, there will be great pressure on the state to release, 
regardless of quality of reclamation, because if something should cause 
a bond forfeiture, there would not be enough money left to fix the 
problem.
    Self bonding is allowed in some states. The State of Colorado 
allowed the Mid-Continent Mine to self bond with a limestone plant as 
collateral. The sole market for the limestone plant was Mid-Continent 
mine. Korea cancelled its marketing agreement with Mid-Continent. The 
mine closed. The bond was forfeited, the limestone plant now a 
worthless property that had lost its market. Meanwhile, the family that 
owned Mid-Continent had invested in Colorado mountain real estate. 
OSMRE had the authority to pursue that money, but did not with any 
vigor. The taxpayers have picked up the tab for what reclamation has 
been done on the Forest Service land where Mid-Continent operated.
Citizen Action
    Citizens can file complaints in writing under SMCRA, but there are 
informal ways to make one's voice heard. The regulators see industry 
people on a regular basis. They develop a familiarity with each other. 
They drink beer together in the hotel bar, if they are at an away 
meeting. If there is a regulatory office in a reasonably convenient 
location, citizens should stop by when they don't have a complaint. If 
there is a basis of familiarity, perhaps relations would be a little 
better. Such visits also help inform the citizens about conditions 
within their regulatory agency.
    In Montana, it would be helpful if more of the state regulatory 
agency were closer to the mines. Because of the travel distances 
involved, most of the contact between the Montana state agency and 
citizens near the Eastern Montana mines consists of more formal 
meetings, and because of the turnover of regulatory personnel in 
sensitive areas, frequently the sacrificial agency lamb at such 
meetings is the newest and most inexperienced of Montana personnel.
    The Casper Field Office of OSMRE, which regulates the highest 
producing coal area in the United States, has the most area to cover, 
and probably the fewest inspectors. Distance operates against a citizen 
getting a clear idea of how that office operates. It is 379 miles from 
Casper to Billings, 629 miles from Casper to Helena, and God knows how 
far to North Dakota. For quite a while last year, the Casper Office 
operated without a field office director. The Field Office Director 
from Albuquerque filled in. I would say that is hardly effective 
administration. Getting acquainted with the regulators will not solve 
all the problems relating to SMCRA enforcement, but it is a small step 
that citizens can take.
Conclusion: Congress' Responsibility for the Enforcement of SMCRA
    Some of the agency actions are in effect, actions in contempt of 
Congress, as evidenced by Congress' intention expressed in SMCRA. I do 
not believe there is anything especially wrong with SMCRA, with the 
exception of not covering longwall mining and not coping with 
mountaintop removal, but I do believe that as an agency OSMRE has long 
been lacking intent to enforce SMCRA as it should be enforced. The 
agency has been a great hand to not want to take action on something 
unless it is immediately hazardous to human life. That is a judgment 
call, and the agency is not prescient. The process to pass SMCRA began 
with the disaster at Buffalo Creek, WVA. Fortunately, a similar tragedy 
for human life has not happened again, but how much luck was involved 
with the Kentucky River flood through Louisa, KY or the water break out 
at the AEP mine in Ohio? There are a number of sludge ponds throughout 
the East that are known by the agency to be unstable, but they remain 
unremediated, and the locations are not known to the public. Is OSMRE 
prescient as to which one will break first? Where are the states and 
OSMRE on this? Both are negligent and trying to hide out from that 
unpleasant policeman's task.
    Congress could pass more laws and see them twisted and ignored. It 
is better to seek enforcement of the law you have. When the agency 
charged with enforcing laws you have passed attempts to withdraw from 
enforcement and hide from the public who believed in the law you have 
passed, the agency causes the public--both industry and citizens--to 
hold the law in contempt.
    Mr. Chairman and members of the Committee, you should be angry that 
SMCRA is being administered in that fashion. We appreciate your action 
in holding this hearing, but you need to do closer oversight on OSMRE. 
We respectfully suggest you hold more such hearings both here and in 
the field, to hold OSMRE accountable for its enforcement of the Act, 
for adopting regulations and policies consistent with the intent of 
Congress, and for ensuring that state agencies do likewise.
    We also suggest that you demand improved reporting from OSMRE. You 
also have the power to issue contempt citations, and I believe that you 
should seriously consider doing so. If you cannot get OSMRE to respect 
and enforce the law which it is paid to administer, then perhaps you 
should consider housecleaning in the agency.
    We urge Congress to provide more funds to OSMRE and state agencies. 
The agencies can do a much better job with the amount of money they 
have, but it is also clear that lack of funds and personnel is part of 
the problem.
    OSMRE and the states should require vastly improved reclamation at 
all phases, from regrading to water resource reclamation, revegetation, 
and final bond release. The percentage of mined acres reclaimed in the 
West is abysmal, and does not meet any definition of ``contemporaneous 
reclamation,'' as the Act requires. A critical first step is for OSMRE 
to define contemporaneous reclamation, a job that has been pending for 
years now. OSMRE should also make clear in its regulations that mine 
permits will not be issued for areas in which a mine plan does not 
allow for and require contemporaneous reclamation, and consider 
increasing bond amounts to provide an adequate incentive for companies 
to apply for bond release, but also to do better reclamation in the 
first place. We urge you to use your oversight authority to impress 
upon OSMRE the importance of addressing these problems, with special 
attention to reclamation of the water resource within mine-permitted 
areas--whether the issue is acid mine drainage, the impacts of 
mountaintop removal and long wall mining, or the routine aquifer 
removal we see in Western strip mines.
    Finally, OSMRE should adopt a policy prohibiting the issuance of 
new mine permits or expansions in areas where stripmined land remains 
unreclaimed after more than ten years.
    NOTE: A report entitled ``An Impending Crisis for Coal Supplies: 
Demand Rises, Regulatory Grants Fall Short'' prepared by the Western 
Interstate Energy Board dated November 30, 2006, is available at http:/
/www.westgov.org/wieb/reclamation/2006/12-01finalrpt.pdf.
                                 ______
                                 
    The Chairman. Before the Chair asks its first questions, it 
is going to ask a question of the audience that he asked 
earlier. Is anybody from OSM here? Did they reappear? Anybody 
representing OSM taking notes in any way?
    [No response.]
    The Chairman. Well, let the record show that unlike OSM, 
our West Virginia State Regulatory Authority, in the form of 
our Secretary of DEP, Stephanie Timmermeyer, is still with us. 
And I appreciate very much her being here to listen to the 
panels.
    Mr. Morris, let me go back to something you mentioned about 
a mining operation taking place in Virginia, I believe it was, 
that is not permitted, and the state regulatory authority will 
not take any actions or inspect because it is not a permitted 
operation?
    Mr. Morris. That is my understanding. This is not my case, 
it is Mr. Lovett's case, and perhaps he can give you some more 
detail.
    But the claim by the citizens----
    The Chairman. Did I have the state right? In Virginia?
    Mr. Morris. It is in Virginia. The claim by the citizens is 
that a mining operator, in advance of approval of a mining 
permit for which the operator has applied, has already begun to 
conduct preliminary operations, which are surface coal mining 
and reclamation operations, without the permit.
    According to OSM's regulations, and the regulations in 
Virginia as well, that constitutes an imminent danger to the 
environment. It is supposed to be addressed in the most 
expeditious and forceful way that either agency can possibly do 
it. And Virginia is refusing to take, as I understand it, to 
allow the citizens, to take the citizens and even inspect the 
area because it hasn't issued a permit yet.
    And of course, the long and short of that is that any 
operator who goes forward without a permit in Virginia would be 
immune from action by the regulatory authority. They would 
never go out and look for it because they haven't issued a 
permit for it yet. It is absurd.
    The Chairman. Mr. Lovett, can you expound on that?
    Mr. Lovett. I agree with what Mr. Morris said. That is 
exactly what has gone on.
    In addition to that, because the state refused to take the 
citizens up, we asked OSM to take the citizens up. And that has 
been more than two weeks, OSM still has not done so. The people 
are being just completely disregarded by both agencies in 
Virginia.
    The Chairman. It is reminiscent, in my opinion, of the old 
days of the two-acre exemption and the chain of pearls. And we 
thought we had closed that exemption, and evidently we have 
not.
    Mr. Morris. Well, Mr. Chairman, in this situation it not a 
small chain-of-pearls-type operation. This is a huge mining 
permit, and the operations that are going on, according to the 
citizens' allegations, are extensive.
    The Chairman. All right. Mr. Lovett, everybody we have 
heard from so far today seem to be the most negative of 
everybody. I mean, you state our future generations will not 
forgive us. You know, I take that as an affront. I go to bed at 
night and sleep soundly, and think I am doing all I can to 
protect our environment and provide for jobs. But there is an 
insinuation there that I am not.
    You stated that we would be just as well off if OSM would 
disappear, and not be around. Let me ask, then, would we be 
just as well off if SMCRA were not ever enacted?
    Mr. Lovett. Mr. Chairman, first let me address your first 
point. I certainly didn't mean to cause affront to you 
personally; I am complicit in this, as well.
    I think that our generation is currently decimating central 
Appalachia, and I believe my children will look back to me and 
ask me questions about it, as well. I use coal as well as 
anyone else. I don't mean to exempt myself from that, and I 
don't mean to cause you personal affront.
    But I do take this as a very serious issue facing our 
region. And I think that all of us need to act to change it.
    Second, in response to your question about OSM, I think 
that SMCRA has good provisions in it. It is a good law in many 
ways, if the agency would enforce them.
    One of the questions you raised earlier was the question 
about approximate original contour. If the state agency or the 
Federal agency would enforce the requirement that the land 
look, after mining, like it did before mining, these mines 
wouldn't be occurring. Because very few of them are put to any 
productive use.
    In fact, there are a handful of examples. Now, don't forget 
there have been over a million acres stripped in this region 
since the passage of the Act. And yet there are a handful of 
projects. There aren't golf courses--I think there is one golf 
course. There aren't schools. Those are exaggerations of what 
is going on. These are very isolated mines, and there is really 
almost no development on them at all.
    So yes, I do believe that OSM's failure to enforce the Act 
has rendered it meaningless right now. I hope that we have a 
better Administration that will be willing to enforce the Act 
in the future.
    The Chairman. OK. SMCRA requires its sediment ponds be 
constructed to control runoff from mining operations, including 
mountaintop mining operations in valley fields. Do you agree 
with that statement?
    Mr. Lovett. I do.
    The Chairman. Mr. Morris, let me ask you then. Your 
experience in the Solicitor's Office lends great credence to 
what you have to say. Would you expand on what you termed as a 
judicial misinterpretation of the Act's citizen supervision?
    Mr. Morris. Well, the decision of the Fourth Circuit in 
West Virginia Coal Association v. Bragg, or actually I think it 
is Bragg v. West Virginia Coal Association, proceeded on the 
theory that approved state programs under the Surface Mining 
Act are purely state law; that they are not a hybrid Federal 
and state law, even though Federal approval of those statutes 
is necessary before they can take effect, and even though those 
statutes are codified, state statutes are codified in the 
Federal rules, the Code of Federal Regulations.
    Using that theory, that judicial misinterpretation, the 
Court went on to say that the provision that this committee and 
the Congress put in the Surface Mining Act authorizing 
adversely affected persons to sue state regulators in Federal 
Court to compel compliance with mandatory non-discretionary 
duties was unconstitutional, under the 11th Amendment, because 
the 11th Amendment will not allow private citizens to sue state 
officials for violations purely of state law.
    But when Mr. Lovett brought the case that became Bragg v. 
West Virginia Coal Association, he was suing state officials to 
comply with the state program itself, which is, in our view, 
and in the view of the Department of Justice, stated to the 
Fourth Circuit in the very case, both Federal and state law, 
and thus the citizen supervision, is entirely constitutional 
and doesn't offend the 11th Amendment in any respect.
    What we have here is a judicial misinterpretation of the 
nature of state programs under the statute, that is repeated in 
a ruling of the Third Circuit, and which the Department of 
Justice is no longer willing, as I understand it, to challenge 
in other circuits, that needs Congressional correction.
    There are several ways, it seems to me, that the statute 
might be quickly and readily amended, but that correction needs 
to happen because without it, citizens cannot use the Federal 
forum to compel state officials to carry out mandatory duties 
under the statute, even where it is clear that the state 
officials are failing to do their job. As it was, as Judge 
Haden pointed out in Mr. Lovett's case, in the Bragg case, it 
was clear. And the Fourth Circuit did not have any quarrel with 
the merits, didn't even reach the merits.
    So I repeat my urging for the Committee to take a very 
serious look at correcting that problem.
    The Chairman. Very interesting. I appreciate that. I do 
have a couple more questions, but I am out of time, and I want 
to yield to the, or excuse me, recognize the Ranking Member for 
his questions.
    Mr. Pearce. Thank you, Mr. Chairman. I appreciate each one 
of you for testifying today.
    Mr. Wright, do you think that coal has a place in today's 
energy portfolio?
    Mr. Wright. I believe it is not going to be feasible any 
time soon to remove it completely out of the portfolio. I do 
believe we need to further diversify our electricity portfolio 
to include more renewable sources, such as wind and solar. I 
think it is easily achievable, given today's technology, to 
have a renewable electricity standard of 10 percent or 20 
percent, have that achieved.
    Mr. Pearce. What level could we achieve, in your opinion?
    Mr. Wright. Ten to 20 percent.
    Mr. Pearce. Mr. Lovett, you, in the opening part of your 
statement--it is not actually part of the written statement, 
but your oral testimony--you were trying to distance yourself 
from the views in the second panel, and said that you would 
like to contrast that.
    Now, I heard a balance of views there that were reassuring, 
but I think most reassuring was Secretary Timmermeyer's 
testimony. And so you would describe her testimony as rose-
colored? What would you--because I had commented walking out 
that I was greatly reassured that they were achieving a balance 
of regulation and business interests. How would you 
characterize that testimony?
    Mr. Lovett. Well, I have had long-running disputes with the 
West Virginia Department of Environmental Protection. I do not 
believe that it is discharging its duties under the Surface 
Mining Act to require reclamation.
    It may be true that trees can be grown on these sites after 
mining. Professor James Burger at Virginia Tech has done 
significant research--I think it would probably be fair to call 
him the foremost reclamation specialist in the country--that 
shows that trees can be grown after mining.
    But it requires a couple things. It requires that the 
topsoil be saved, as the Act requires. And it requires that the 
next layer, the brown, weathered sandstone, part of that be 
saved, as well.
    Mr. Pearce. Excuse me, I was asking for you to reflect on 
her testimony.
    Mr. Lovett. OK, I will make it quicker. The DEP refuses to 
require operators to save that topsoil, even though it is 
required by the Act. And because it does so, there is no 
indication that trees will grow on any of these sites.
    So to the extent that we are saying that reclamation is 
being achieved by state regulations----
    Mr. Pearce. Excuse me, we are right back where we were. I 
was just asking you to characterize her testimony.
    Mr. Lovett. Oh. I disagree.
    Mr. Pearce. And so you find it to be false. You find her 
testimony to be false.
    Mr. Lovett. I disagree with it, yes.
    Mr. Pearce. Would you shut down all coal mines?
    Mr. Lovett. No, of course not. My lights would go off like 
everyone else's if that happened.
    Mr. Pearce. So you think that coal--in your testimony you 
say that there is no such thing as clean coal.
    Mr. Lovett. I believe that. That is why I tell my kids to 
turn the lights off.
    Mr. Pearce. So you are content with global warming effects 
that are attributed to coal, because you say there is no such 
thing as clean coal. You are satisfied with those effects into 
the future. If you don't have clean coal, and sequestration is 
a dream that is probably 40 years in the future, frankly, so 
you either shut down the mines, or you understand that we don't 
have clean coal.
    Mr. Lovett. I misunderstood your question. I thought you 
were asking me if we should shut down the mines today. The 
answer to that is no. I do believe that we need to start making 
a transition away from a coal-based energy economy to more 
renewables and to more conservation.
    Mr. Pearce. Do you think Mr. Wright was correct, that we 
can achieve 20 percent right now?
    Mr. Lovett. I don't know the answer to that. I believe that 
we need to make a serious effort as a country to wean ourselves 
from coal. I don't see that happening.
    Mr. Pearce. Do you think that the lack of preserving of the 
topsoil that you are bringing up, do you think that is because 
of just bad corporations? Or do you think it is feasibly 
impossible?
    Mr. Lovett. I don't think it is because of bad 
corporations. I think that corporations do what agencies allow 
them to do. I think that the Act clearly requires that topsoil 
be saved, unless it can be shown that there is a substitute 
that would be better than the topsoil for the use.
    I think that growing trees, growing our native trees, our 
Appalachian trees requires a slightly acidic soil, like the one 
we have.
    Mr. Pearce. Do you see any countries around that do have 
the correct standards? I mean, like the Chairman, I find you to 
be somewhat disappointed maybe in the environment that exists 
today, the environment and the regulatory agencies.
    Do you find a country where that is carried out more 
properly?
    Mr. Lovett. I don't know what happens in other countries. I 
have great hopes for our country. And all I can do, of course, 
is try to work in my state and in my country to make it as good 
as I can.
    I don't mean to be a negative person. Generally I don't 
think of myself that way, and I apologize if that is the 
impression here.
    Mr. Pearce. So you could not, in other words, you do a 
pretty good job of absolutely ripping every regulator, every 
department that is engaged in this. I think many times I am 
like the Chairman; I find that very strong.
    So if you have an opinion, then it would be productive for 
us to see good examples. If those good examples don't exist in 
the world, it just might be that you are not the only one 
correct; that maybe the regulators are doing the best they can 
with a very bad situation. And in fact, maybe those trees might 
grow.
    Mr. Chairman, I would like to finish. I have some more 
questions, too.
    Mr. Lovett. May I answer the question? I do think that the 
previous Administration was making an effort, the Clinton 
Administration was making an effort to change these things. I 
think that I am negative about the Administration that is 
currently in office, because it has gone out of its way, I 
think, to help weaken enforcement in our region. I think that, 
and I hope that we will get the next Administration, whether 
Republican or Democrat, that will take more seriously the 
concerns that we have.
    Mr. Pearce. Would any of the four of you, I will just go 
down the row, would you favor nuclear energy? Mr. Morris?
    Mr. Morris. That is out of my field, Congressman.
    Mr. Pearce. Or are all of us going to have to turn on the 
switch and get electricity? I understand. Mr. Lovett?
    Mr. Lovett. I am the same. I don't know the answer.
    Mr. Pearce. Mr. Wright?
    Mr. Wright. Well, as I said earlier, I am in favor of 
diversifying our electricity portfolio. I think there is 
cheaper options out there than nuclear.
    Mr. Pearce. Which options would that be?
    Mr. Wright. Wind is comparable with the modern-day coal 
plant. It would have to be built today and beat all the modern 
environmental requirements.
    Mr. Pearce. Are you aware that coal, I mean that wind 
places a tremendously large footprint on the environment? That 
the footprint left by one wind generator is maybe--I forget 
exactly, they testified in here--about six or eight times the 
size of an oil well. And that an oil well can be drilled out 
this way, so you get one footprint. The wind generators have to 
be multiplied. And do you think that wind, then, is a 
satisfactory environmental solution?
    Mr. Wright. Yes. And I have talked with farmers who are 
putting wind turbines onto their own property, and they are 
going to be able to farm right up to the base of that wind 
turbine.
    Mr. Pearce. No, believe me, I agree. I think we should have 
energy, and I think we should have renewable. And the wind, the 
testimony is pretty far into the distant future. And unlike 
you, the specialists in the industry say that it is not as 
economic; that in fact, we are actually subsidizing it quite 
heavily. Wind is subsidized.
    We want to shut off coal, and we think that it is not 
suitable for the environment. But we, frankly, the industry has 
testified that your 20 percent threshold is not achievable in 
the near future, and it might be 20 or 30 years away. That in 
fact it is 1 percent that it produces today. And converting 
from a 52 percent producer of energy to a 1 percent, and 
causing that 1 percent to expand geometrically 50 times, is 
technologically not capable.
    But also, there is no transmission to and from. That is one 
of my problems with the bill that we just passed out of here, 
that we tried to encourage transmission corridors for the 
renewables, wind and solar. But those transmissions corridors 
were deeply harmed in H.R. 2337.
    And so I do wonder at some point what we are going to do 
for energy. I think that Mr. Roberts testified on the previous 
panel that we are going to see 30 percent and 40 percent 
increases. And it is the low-income people in our population 
that are going to really suffer those increases.
    Mr. Chairman, I think I have finished. Thank you very much.
    Mr. Wright. If I could respond to that. I have heard 
similar industry claims. We have just gone through this debate 
in our own state, and we did a comprehensive rate base analysis 
of what the impact of a 10 percent renewable electricity 
standard would be on Indiana electricity rates. And based on 
the data we gathered, we only found a 1 percent to 2 percent 
cost increase from that 10 percent renewable electricity 
standard.
    Meanwhile, the industry came back and was claiming anywhere 
from 5 percent to 10 percent, but they refused to release any 
of the data on where they received, were able to calculate 
those figures from.
    So you will excuse me if our publicly available data comes 
up with one result, but I am somewhat skeptical when industry 
comes back with a completely different result, and refuse to 
release any of the data on how they reached it.
    The Chairman. Thank you. Before proceeding with my last 
questions, I see that Mr. Conrad is still with us in the back 
of the room, with the Interstate Mining Compact Commission. And 
I understand Virginia is a member of your organization.
    And if you could help us get to the bottom of this 
unpermitted mining issue that Mr. Morris brought up, I know 
this committee would appreciate it.
    Mr. Conrad. I had thought of it, Mr. Chairman.
    The Chairman. Thank you. I take that as an affirmative 
answer, for the record. Thank you.
    Mr. Wright, let me ask you to expand, if you would, on the 
coal power plant combustion waste issue. As you know, I am the 
one who requested the National Research Council study to which 
you referred.
    For instance, to what extent are you aware that these waste 
residues are being employed in mine reclamation?
    Mr. Wright. First of all, thank you for calling for that 
report. I can't say nationwide. I know, just for example, 
Indiana. We have calculated the total permitted tonnage 
currently existing, and it is 125 million tons just for Indiana 
mines. That is about as much as produced nationwide in one 
year.
    And I believe in Pennsylvania and West Virginia, there is 
even more large-scale dumping. So we are talking on the order 
of hundreds of millions of tons being planned to be shipped to 
these mines.
    The Chairman. Over what time period is that?
    Mr. Wright. Again, I can't answer that off the top of my 
head. There is going to be a report coming out on the 
Pennsylvania program soon that should have a little bit more 
details on that.
    The Chairman. Would you share those----
    Mr. Wright. Yes.
    The Chairman.--results with this committee?
    Mr. Wright. Yes.
    The Chairman. Thank you. Ms. Pfister, certainly you have a 
great deal of experience with SMCRA; you stated that in your 
testimony, and you have a long and dedicated history. This 
committee certainly appreciates that.
    From the perspective of the West, what is the single 
largest issue of concern? Is it the aquifer removal issue that 
you noted in your testimony?
    Ms. Pfister. I would say that it is, sir, because the water 
that lies within the mine permit area is basically considered, 
it is just like it is not there. Whatever time and fate does to 
it, that is what is going to be. There is no attempt to 
protect. There is water in some places that comes in on one 
side of the pit, goes into the spoils material, and then goes 
on down out the other way. There is no attempt to conduct that 
water to protect it from touching the soils materials, or 
completely absorbing and becoming a mud in the bottom.
    And in the West, where you don't have a whole lot of 
streams, which is typical of eastern Montana and Wyoming, that 
groundwater is the resource. For instance, at Colstrip, 
Montana, they have disturbed around 22,000 acres. So you have 
basically got 22,000 acres of unpredictable water quality in 
that area. And of course, eventually the pollution in the mine 
moves as a plume down the country.
    So what you are trying to do in the mine would be to 
minimize the amount of water quality degradation that you get 
as a result of mining.
    There is no thought, no experiments, no technical studies 
on how to do this. It is just mine it and dump it back in. And 
I would say that is the worst problem. Because if we don't have 
water in the West, we don't have anything.
    The Chairman. So you have Clean Water Act issues here, as 
well.
    Ms. Pfister. You certainly would if you threw in some coal 
combustion waste. But with what you have, I don't know if it is 
clean water, but you are just not supposed to make it so 
terrible that you can't use it.
    And of course then you have your water quality standards, 
your Class I, your Class II, and your Class III. But eventually 
there comes a point when a cow won't drink it, either.
    The Chairman. OK, thank you. Do you have any further 
questions?
    [No response.]
    The Chairman. Thank you very much for being with us today.
    Mr. Morris. Thank you, sir.
    The Chairman. Our next panel, number five, is composed of 
the following individuals: Harold P. Quinn, Jr., Senior Vice 
President, Legal and General Counsel, National Mining 
Association, Washington, D.C.; William B. Raney, President, 
West Virginia Coal Association, Charleston, West Virginia; Eric 
Fry, Director of Regulatory Services, Peabody Coal Company, St. 
Louis, Missouri, on behalf of the Illinois Coal Association; 
and Marion Loomis, Executive Director, Wyoming Mining 
Association, from Cheyenne, Wyoming.
    Gentlemen, we welcome you to the Committee. We appreciate 
the sacrifices you made to be with us today, the travel and 
being with us for close to five hours now. So we appreciate 
your patience.
    Hal, you may go first. Good to see you again. And Bill, it 
is always good to be with you, as well.

STATEMENT OF HAROLD P. QUINN, JR., SENIOR VICE PRESIDENT LEGAL 
 AND GENERAL COUNSEL, NATIONAL MINING ASSOCIATION, WASHINGTON, 
                              D.C.

    Mr. Quinn. Thank you, Mr. Chairman. Good afternoon, and 
good afternoon, Congressman Pearce. I appreciate your 
attendance today.
    We appreciate the opportunity and the invitation to be here 
to speak about our SMCRA experience on this 30th anniversary.
    Let me begin by an observation that I suspect that among 
those on hand when President Carter signed Public Law 95-87 on 
a summer morning 30 years ago, only a few perhaps would have 
forecasted the successes of this coal industry and the state 
and Federal regulators in both responding to the nation's 
increasing demand for more energy and improved environmental 
performance.
    In the 30 years since SMCRA's enactment, the coal industry 
has supplied over 29 billion tons of coal to fuel our nation's 
energy requirements and prosperity. This is the equivalent of 
115 billion barrels of oil, and is five times our proven 
domestic oil reserves.
    In the meantime, over 2.2 million acres of land supplying 
this coal resource have been restored to a wide variety of 
productive uses, including farmlands, as we see here in 
Indiana, pasture lands, wildlife refuges, gold courses--a 
stunning and challenging gold course, Twisted Gun in West 
Virginia--as well as wetlands and timberlands, recreational 
areas, and areas for even commercial development.
    These achievements of the first order in energy production, 
environmental stewardship, and reclamation are the product of 
collective efforts of the coal industry and state and Federal 
governments. They underscore the underlying strength of 
America's coal resource as a foundation of our nation's 
prosperity and energy security.
    Now, SMCRA was the culmination of a sustained effort 
throughout the 1970s to enact a comprehensive Federal 
regulatory program for coal mining. I recall that in the 1970s, 
our nation was in the throes of an economic turmoil related to 
its vulnerable dependence upon foreign sources of energy. SMCRA 
attempts to strike a balance between our nation's need for coal 
as an essential energy source, and our need to protect the 
environment.
    This balance rests upon several key principles. First, coal 
is an indispensable and prominent part of our nation's energy 
requirements and prosperity.
    Second, coal mining should serve as a temporary use of the 
land.
    Third, coal mine development and resource management must 
be integrated to successfully restore mine lands to support 
future uses.
    And finally, given the diversity in terrain and other 
physical conditions among our coal mining regions, states are 
best positioned to develop and administer programs designed to 
meet those objectives.
    SMCRA is an ambitious law. Its protracted and contentious 
legislative history caused some of your colleagues to predict 
that the law's implementation would meet with regulatory delays 
and endless litigation. Unfortunately, the early SMCRA 
experience would not disappoint them.
    The first attempt to implement the permanent regulatory 
program produced 150 pages of regulatory text to flesh out what 
was already a fairly descriptive 90-page statute. This 
regulatory text was accompanied by another 400 pages explaining 
what that regulatory text actually meant. The detail and the 
complexity of the regulations defy comprehension by those 
charged with complying with it, the industry, as well as those 
who are tasked to implement it, the states. I suspect that it 
even challenged the comprehension of the legal minds that 
produced the product itself.
    Several years later the program was revised to substitute 
performance-based approach for inflexible design standards, and 
to empower the states to tailor more suitable versions to 
accommodate their regional differences.
    Not surprisingly, based on this experience, SMCRA 
implementation has proven a fertile ground for litigation. 
About a little past a decade into its implementation, one court 
observed this history or captured aptly this history with the 
following metaphor beginning its opinion on a rules challenge. 
``As night follows day, litigation follows rulemaking under 
this statute.''
    But from there, the program also experienced a difficult 
transition from its initial phase of shared Federal and state 
responsibilities to the permanent phase that vested day-to-day 
regulatory authority with the states. The coal industry 
expected to find, during this permanent phase, only one 
regulatory master in the field: the state. Both for purposes of 
inspections, as well as permitting. Instead, the coal industry 
often found itself positioned between conflicting state 
directives and Federal demands.
    Further complicating the regulatory transition were 
structural changes the coal industry was, upon the coal 
industry by both market forces and public policy choices. These 
changes included rapid consolidation within the industry driven 
by falling prices in coal, which required a powerful and 
sustained increase in mine productivity to cope with these 
decreasing margins.
    At the same time, public policy choices and the Clean Air 
Act created a dramatic shift in coal production on the eastern 
coalfields to the western United States.
    As we have already mentioned, it was through perseverance 
and innovation that the coal industry has mastered the demands 
of the law. We have made a substantial investment, and we can 
report some impressive successes. As I previously indicated, we 
restored 2.2 million acres of land to productive uses. We have 
provided wildlife habitat for a diverse variety of species, 
created recreational areas, paid over $8 billion in abandoned 
mine land taxes to restore unreclaimed lands, mines, prior to 
SMCRA, and we have developed innovative reclamation and 
technology practices.
    These accomplishments have all occurred while the coal 
industry continues to supply the fuel that accounts for one 
third of our primary energy production, and over half of 
electricity produced in the United States.
    Tomorrow's successes will depend largely upon the lessons 
we have learned from our 30-year experience under SMCRA. At 
this point, I would like to just mention a few that we find 
particularly instructive.
    First, when it comes to regulatory approach, design 
standards versus performance standards, we find that the early 
reliance on successfully prescriptive design standards 
compounded the complexity and detail of the statute. 
Performance standards have been far more effective and 
responsive to the very conditions under which mining operations 
operate. We believe the switch to performance standards in the 
1980s has contributed greatly to the mine land reclamation 
successes we see today.
    On state primacy, each state and region has different 
conditions and needs and interests when it comes to land use. 
Mr. Chairman, as our mutual friend, Ben Green, former President 
of West Virginia Mining and Reclamation Association, once 
advised, a perfectly good hunting dog in Wyoming may not hunt 
in West Virginia, and vice-versa.
    SMCRA recognizes this. Indeed, state primacy is the 
cornerstone law because good ideas and practices in one state 
for meeting a national goal may not be a good one in another.
    However, right now it appears that state primacy may be 
threatened by fiscal constraints to some of these states that 
jeopardize their continued retention of their programs. The 
time may be coming to consider adjusting the laws matching the 
Federal funding formula in order to support the continuation of 
state primacy.
    Regulatory duplication and efficiency is still a remaining 
legacy of SMCRA. While SMCRA established a comprehensive 
program for regulating the effects of coal mining, it did not 
displace all existing laws that address the specific resources 
coal mining affects.
    A prominent example is the Clean Water Act, which overlaps 
SMCRA's extensive requirements for hydrologic analysis and 
measures to protect water quality. We believe that by relying 
more upon the regulatory benefits of SMCRA, we can avoid the 
unnecessary duplication, and achieve greater regulatory 
efficiencies.
    Let me close with this one observation. When President 
Carter signed SMCRA three decades ago, energy independence was 
a national imperative. It is no less so today. Since SMCRA's 
passage, our energy use has jumped 23 percent, but our energy 
production has increased by only 7 percent. Meanwhile, energy 
imports have climbed by 70 percent.
    There is no question that our nation will require more 
energy in the future; the only question is where we will find 
it.
    Not surprisingly, it is expected that coal will remain a 
vital national resource. Coal consumption is projected to 
increase by 50 percent through 2030 just in order to meet our 
future electricity requirements.
    Meeting these demands will be a challenge, but a challenge 
that can be met with policies that enhance the role of all our 
energy sources, including coal. SMCRA will continue obviously 
to play a major role in that effort.
    Thank you, Mr. Chairman. Thank you, Mr. Pearce, for your 
attention today.
    [The prepared statement of Mr. Quinn follows:]

      Statement of Harold P. Quinn, Jr., Senior Vice President & 
            General Counsel, The National Mining Association

    My name is Hal Quinn, senior vice president, legal and regulatory 
affairs, and general counsel for the National Mining Association (NMA). 
I am appearing on behalf of the NMA to testify about the coal mining 
industry's experience and success under the Surface Mining Control and 
Reclamation Act (SMCRA) of 1977. I suspect that among those on hand 
when President Carter signed Public Law 95-87 on a summer morning 30 
years ago, only a few would have ventured to predict the many successes 
of America's coal industry in responding to the nation's increasing 
demand for more energy and improved environmental performance.
    NMA represents producers of over 80 percent of America's coal--a 
reliable, affordable, domestic fuel that is the source of more than 50 
percent of the electricity used in America. NMA's members also include 
the producers of metals and non-metal minerals, manufacturers of mining 
equipment and supplies, transporters of coal and mineral products, and 
other firms serving the mining industry.
General Introduction
    In the 30 years since SMCRA's enactment, the coal industry has 
supplied over 29 billion tons of coal to fuel our nation's growth and 
prosperity. This is the equivalent of 115 billion barrels of oil and is 
five times our proven domestic oil reserve. Over 2.2 million acres of 
the lands supplying this coal resource have been restored to a wide 
variety of productive uses including farmlands, pastures, wildlife 
refuges, parks, recreational areas, wetlands, and commercial 
development. These achievements of the first order in energy 
production, environmental stewardship and reclamation are the product 
of the collective efforts of the coal industry, and state and federal 
governments. They underscore the underlying strength of America's coal 
resource as the foundation of our nation's prosperity and energy 
security.
SMCRA Legislative History
    SMCRA was the culmination of a sustained effort throughout the 
1970's to enact a comprehensive federal regulatory policy for coal 
mining. Unlike environmental legislation directed at the impacts of 
many industries upon one natural resource--e.g., Clean Water Act, Clean 
Air Act--SMCRA focuses upon one industry and its effect upon various 
natural resources. As the legislation proceeded through successive 
congressional sessions, the product transformed from a 17-page version 
passed by the House of Representatives in 1972 to a 90-page bill 
reported by the conference committee and signed by President Carter on 
the morning of August 3, 1977.
    Throughout the protracted legislative process, one theme emerged to 
become the central purpose of the law: strike a balance between our 
nation's need for coal as an essential energy source and protection of 
the environment. Recall that in the 1970's, this country was in the 
throes of economic turmoil related to its vulnerable dependence upon 
foreign sources of energy. The oil embargo in October of 1973 focused 
attention on domestic energy security and the ability of our domestic 
coal resources to meet increasing energy requirements. At the same 
time, concerns existed about the potential environmental consequences 
of increased coal mining.
    The balance SMCRA intends to strike between meeting our energy 
needs and environmental protection rests upon several principles. 
First, coal is an indispensable and prominent part of our nation's 
energy requirements and prosperity. Second, coal mining should serve as 
a temporary use of the land. Third, coal mine development and resource 
management must be integrated to successfully restore mined lands to 
support future uses. And, fourth, given the diversity in terrain and 
other physical conditions among our coal mining regions, states are 
best positioned to develop and administer programs designed to meet 
those objectives.
Industry's SMCRA Experience
    The protracted and contentious legislative history of SMCRA caused 
some lawmakers to predict that the law's implementation would meet with 
regulatory delays and endless litigation. See H.R. Rep. No. 218, 95th 
Cong., 1st Sess. 193 (1977). The early SMCRA experience would not 
disappoint them. The first attempt to implement the entire range of 
permanent program requirements produced 150 pages of regulatory text to 
``flesh-out'' an already prescriptive 90-page statute. An additional 
400 pages were required to explain what the regulations meant. Several 
years later, a comprehensive review of the rules converted some of the 
unyielding design standards to more flexible performance standards and 
empowered states to tailor more suitable versions to accommodate 
regional differences.
    Not surprisingly, SMCRA implementation has proven fertile ground 
for litigation. The battles waged over SMCRA implementation have 
extended from the most fundamental questions about the jurisdictional 
reach of the law to the more arcane, such as the permissible 
conservation and husbandry practices to demonstrate successful 
reclamation. One court aptly characterized this early regulatory 
history with the following metaphor: ``As night follows day, litigation 
follows rulemaking under this statute.'' National Wildlife Federation 
v. Lujan, 950 F.2d 765, 766 (D.C. Cir. 1991).
    Apart from the turmoil accompanying efforts to establish the basic 
regulatory framework, the program experienced difficulty in its 
transition from the initial phase of shared federal and state 
responsibilities to the permanent phase that vested day-to-day 
regulatory authority with the states. In the field, the coal industry 
expected to see only one regulator, the state, for both permit and 
inspection tasks. The states shared a similar expectation since SMCRA 
declared that they would assume ``exclusive'' regulatory jurisdiction 
upon approval of their laws and regulations, and that the Federal 
Office of Surface Mining (OSM) would recede to a secondary role of 
overseeing state performance. In practice, the coal industry found 
itself positioned between conflicting state and federal applications of 
the law. States saw their exclusive role undermined with little 
deference or respect accorded to their applications of the law by OSM.
    Serving two regulatory masters further compounded the difficulties 
coal companies confronted in complying with changing regulations. 
Uncertainty becomes especially frustrating to a regulated industry that 
operates under a statute that places a premium upon the principles of 
planning and sound resource management. The absence of a stable 
regulatory framework undermines the planning imperative. Changing 
standards and inconsistent application compromise the integrity of any 
planned strategy.
Changes in Industry Structure
    In the midst of this regulatory transition, the coal industry 
experienced structural changes as a result of a combination of market 
forces and public policy choices. The number and size of coal mines and 
companies changed substantially. When SMCRA was debated, economic 
analysts predicted that coal prices would soon exceed $50 a ton. These 
forecasts proved well off the mark. The average price of coal in real 
terms declined $10 per ton in just 10 years (1975-1985), and by 1988 it 
fell to $22 a ton.
    These market conditions forced a rapid consolidation within the 
industry. Between 1976 and 1986 the number of producing coal mines 
dropped by 32 percent (from 6,161 mines to 4,201 mines) while 
production increased by almost the same percent (from 685 million tons 
to 886 million tons). The remedy for the diminishing margin between 
increasing mining costs and decreasing coal prices was a powerful and 
sustained increase in productivity, i.e., more production from fewer 
and larger mines and companies. The trend in consolidation continued, 
and the coal industry today produces 40 percent more coal (1.2 billion 
tons) from 75 percent fewer mines than it did just before SMCRA's 
enactment.
    Perhaps the most significant development related to coal markets 
over the past 30 years is the shift in coal production from the Eastern 
coalfields to the Western United States. Coal demand in the United 
States is driven by the electric power sector, which consumes 90 
percent of annual coal production. The policy choices arising over the 
last two decades under the Clean Air Act substantially influenced the 
fuel choices made by the electric power industry. The increasingly more 
stringent limits on emissions of sulfur dioxide at power plants made 
low-sulfur coal in the Western United States a cost-effective 
compliance strategy for many power plants. Favorable geologic 
conditions and economies of scale off-set the disadvantages some 
Western mines confront due to their distance from markets. As a result, 
coal produced from mines west of the Mississippi--which accounted for 
only 25 percent of the annual production in 1977--comprises almost 60 
percent of production today.
SMCRA Successes
    Both the industry and the SMCRA program have evolved over the past 
30 years. Through persistence and innovation and aided in part by 
maturation in the administration of the regulatory programs, the 
industry has mastered the demands of the law. We are hopeful the 
program has turned the corner where conflict has given way to 
cooperation, and litigation has been replaced by innovation. The 
investment to date has been substantial, and we can continue to report 
impressive returns:
      Restoration of 2.2 million acres of land to productive 
uses--three times the size of Rhode Island;
      Farmland with crop yields that exceed their pre-mining 
capabilities;
      Pasture lands that support grazing of more livestock per 
acre than pre-mining capabilities;
      Wildlife refuges providing new habitats for a diverse 
variety of species;
      Recreational areas to support fishing, hunting and other 
leisure activities;
      Forest lands;
      Sites in steep slope terrain that will support 
commercial, residential and economic development in areas where land 
suitable for such purposes is limited or unavailable;
      Payment of over $8 billion in Abandoned Mine Land (AML) 
taxes to restore unreclaimed mined lands abandoned prior to SMCRA;
      Restoration through remining of more abandoned mined 
lands than the AML program--at no cost to the AML program; and
      Innovations in reclamation technology and practices 
including post mining landscape design and land use planning, water 
management and treatment technology, and ground control and subsidence 
mitigation measures.
    These accomplishments have all occurred while the coal industry 
continues to supply our nation annually with the fuel that:
      Generates over half of all the electricity in America;
      Affordably furnishes the power to support over 151 
million Americans in all activities of their daily life;
      Reliably provides the power to support employment of 
almost 127 million Americans; and
      Accounts for one-third of our primary energy production--
the largest portion of any energy source.
Lessons Learned
    It would be imprudent to simply praise these collective 
achievements without drawing any lessons from the 30 years of 
experience in the implementation of SMCRA. Tomorrow's successes will 
depend largely upon whether we learn anything from our past.
    Design vs. Performance Standards: Some have observed that the 
excessive complexity and detail of the statute, compounded by the zeal 
of the federal agency to outdo the legislators with even more detailed 
regulatory design standards, defied comprehension--let alone 
implementation--by the industry and states, and even by the legal minds 
that produced the regulatory product. Design standards are inherently 
inflexible and counterintuitive for national goals whose success will 
require the accommodation of diverse physical and geological 
conditions. A design standard approach to regulation stymies 
innovation. By contrast, a performance-based approach can accommodate 
new technology and advancements in mining and reclamation practices and 
is therefore more responsive to the diverse conditions found in the 
mining regions and an evolving industry. The switch to performance 
standards in the 1980's contributed greatly to the mined land 
reclamation successes we see today.
    State Primacy: The regulation of land use, a historically local 
prerogative, on a national basis is difficult at best, and all but 
impossible if local, state and regional differences cannot be accounted 
for in the implementation of statutory goals. Each state and region has 
different needs and interests when it comes to land use. As our good 
friend, Ben Greene, the former president of the West Virginia Mining 
and Reclamation Association, once advised, ``a perfectly good hunting 
dog in Wyoming may not hunt in West Virginia, and vice versa.'' But 
SMCRA recognizes this: indeed, state primacy is the cornerstone of the 
law precisely because good ideas and practices in one state for 
achieving a national goal may not be good ones in another. State 
primacy needs to be supported culturally and financially to assure 
continued success. For the most part, the earlier distrust of state 
capabilities has receded and has been replaced by respect and 
cooperation between the federal and state agencies. However, fiscal 
constraints in some states may jeopardize the continued retention of 
their programs. Consideration should be given to altering the law's 
matching federal funding formula, which is capped at 50 percent of 
program costs, particularly as one considers that some of the increased 
costs have arisen from new federal mandates imposed by OSM regulatory 
initiatives. The OSM experience in Tennessee is ample proof that 
investing a greater share of federal dollars into state primacy will 
save the federal government substantially, since the state programs 
have been dollar-for-dollar more cost-effective than a federal program.
    Regulatory Duplication and Efficiency: SMCRA established a 
comprehensive program for regulating the effects of coal mining upon a 
wide array of natural resources. Nonetheless, it did not displace all 
existing laws that address specific resources, for example the Clean 
Air Act or Clean Water Act. In the past, this overlap has caused 
confusion and, at times, conflict for the industry in meeting 
overlapping program goals. The Clean Water Act is a prominent example 
of this overlap. SMCRA contains extensive requirements for hydrologic 
analysis, monitoring and protection requirements for coal mines. In 
some cases, federal and state agencies have strived to reconcile these 
programs and minimize duplication. Nonetheless, more can still be done 
to rely upon the regulatory benefits of SMCRA, avoid unnecessary 
duplication, achieve regulatory efficiencies and reap the attendant 
environmental benefits as envisioned by both the Clean Water Act and 
SMCRA.
Looking Ahead
    As we reflect today upon SMCRA's 30th anniversary in light of 
today's energy picture, I cannot help but think of the film Back to the 
Future. When President Carter signed SMCRA that Wednesday morning in 
the Rose Garden, ``energy independence'' was a national imperative. It 
is no less so today, but it now goes by the name ``energy security.'' 
Today, we import about 60 percent of our petroleum needs, a share that 
the Energy Information Agency (EIA) projects will grow to 75 percent by 
2030. By that time, we will consume 28 percent more oil and 19 percent 
more natural gas. Yet the United States has only 3 percent of the 
world's oil reserves and not much more of its gas reserves. Since 
SMCRA's passage, our energy use has jumped 23 percent, but our energy 
production has increased by only 7 percent. Meanwhile, energy imports 
have climbed by 70 percent.
    We sometimes forget that the United States is a growing country. 
Our population grew by almost 3 million people in 2005 and now exceeds 
300 million. Our economic growth has eclipsed most mature economies. 
So, there is no question that our nation will require more energy in 
the future, just as it did 30 years ago, to sustain our economic 
growth. We will use energy more efficiently due to technological 
advances, conservation and increased efficiency. But, we will still use 
more energy. Not surprisingly, therefore, coal consumption is projected 
to increase from 22.9 quads in 2005 to over 34 quads in 2030, 
reflecting the 156 gigawatts of new coal-based generating capacity that 
are projected to be needed by the end of the EIA forecast period.
    Meeting this demand with reliable, affordable and secure sources 
will be a challenge, but a challenge that can be met with the correct 
policies that enhance the role of all domestic energy sources, 
including policies that ensure that our coal resources can continue to 
play the critical role in our energy future.
Conclusion
    Thank you for the opportunity to share with you the mining 
industry's experience under SMCRA and to express its views on the 
critical role of our domestic coal resources to our nation's energy 
security and prosperity.
                                 ______
                                 
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 STATEMENT OF WILLIAM B. RANEY, PRESIDENT, WEST VIRGINIA COAL 
             ASSOCIATION, CHARLESTON, WEST VIRGINIA

    Mr. Raney. Mr. Chairman, members of the Committee, I am 
Bill Raney, and I am representing the West Virginia Coal 
Association, whose members collectively produce more than 85 
percent of West Virginia's coal. And as was said earlier, we 
were the first state to gain primacy in 1979, under SMCRA.
    I am also pleased and equally proud today to represent the 
associations from seven states of the Appalachian region of 
this country, in addition to West Virginia. Those would be 
Virginia, Maryland, Pennsylvania, Ohio, Kentucky, that all 
surround us, and our southern neighbor, Alabama.
    When you think about all those who are mining the coal and 
protecting the environment in those seven states, I am very 
fortunate to be representing more practicing environmentalists 
than any organization in this country, and I suggest in this 
world. More than 20,000 of them in West Virginia are digging 
coal every day. More than 13,000 of them belong to Cecil 
Roberts' organization across the seven states.
    There are more than 54,000 coal miners in these seven 
states, and that comprises more than 70 percent of all the coal 
miners in this nation. And every one of them, as I say, is a 
practicing environmentalist. Along with the thousands of 
specialty contractors, every day they are practicing mining 
stewardship. They are constructing ponds, backfilling, watering 
roads, maintaining ditches, protecting water quality, planting 
trees and native grasses.
    They are protecting the land like it is their own, because 
they want their children and their grandchildren to hunt the 
same mountains and fish the same streams that they did when 
they were growing up. They are practicing environmental 
protection. They are not marching about it, nor are they 
preaching about it. They make it happen every day. And they are 
proud of their work, and we are extremely proud of what they do 
each day.
    But we are concerned, Mr. Chairman, about them and their 
future, and we are here to ask for some help. We were 
supportive of SMCRA in 1977, upon its passage. And because of 
the changes you made, Mr. Chairman, so that the bill would be 
workable in the East. It provided for valley fills, it provided 
for mountaintop mining, and it provided for the reasonable 
regulation of steep-slope mining. It intended for OSM and SMCRA 
to be the one and only regulatory program for coal mining 
throughout the country. And we need to return to that solid 
foundation of 30 years ago. We need your attention to remove 
the conflicts and the overlaps that we see today.
    The states and OSM continue to make professional progress, 
but other agencies are frustrating that process, as they have 
over the years. But more frustrating is the continued filing of 
opinion-based lawsuits attacking the very foundation of this 
Act by exploiting these overlaps between SMCRA and the Clean 
Water Act.
    Lawyers and opponents who seem to offer no real alternative 
continue to file suit after suit, and threaten our people's 
jobs, despite each of those suits getting overturned on appeal 
every time.
    Looking back, the purpose of the original legislation of 
striking a balance between the protection in the environment 
and the nation's need for coal as an essential source of energy 
has been accomplished, and continues to be accomplished today. 
With all the attention being given to global warming today, 
being the sexy topic of the day it seems, the world has 
overlooked our leadership: West Virginia's leadership, 
Appalachian Region's leadership, and America's leadership, and 
the continued mining of coal, and the continued protection of 
our environment. We literally in America are the best in the 
world at mining stewardship, and no one seems to be paying any 
attention.
    The Abandoned Mine Land Program created by SMCRA has been 
remarkably successful, with the reclamation of pre-law sites, 
the protection of healthcare for the United Mine Worker miners, 
and the installation of drinking water systems in many areas of 
rural America.
    However, without new permits, expanded operations and 
continued mining, the benefits of the AML program and the UMWA, 
to the UMWA and to the mining states, will cease. And 
remarkably, we have judges in West Virginia who don't seem to 
make that connection.
    Since 1977, SMCRA has provided for valley fills, drainage 
control, and mountaintop mining. And for 30 years the states 
and the industry have proven that those work. With consistent 
refinement, reclamation has been exceptional. The coordination 
of mining with highway construction and development has 
provided benefits thought impossible 30 years ago. It is the 
persistence of the industry and its vendors. It is the 
dedicated professionalism of our coal miners, the unique 
oversight of OSM, and the flexibility of the states that have 
combined with the solid platform of SMCRA to better protect the 
environment than ever before, as we continue to mine coal for 
our energy independence.
    So, Mr. Chairman, you are to be complimented, because we 
are better today than we were yesterday. In 1996, as you may 
recall, Secretary of the Interior Bruce Babbitt stood on a 
mountaintop operation with valley fills in Boone County, West 
Virginia, and stated that this is what was intended when the 
law was passed in 1977. It is that way today. The intent of the 
law is being carried out, and we are proud of that.
    However, there are judges and redundant lawsuits attempting 
to alter the 30-year-old wisdom of Congress, at the expense, 
and most concerning at the expense of our people in the East. A 
strong alliance for 30 years between the states, OSM, and 
industry has served this country well. And we hope you will 
help us, Mr. Chairman, preserve our future as we go through the 
next 30.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Raney follows:]

               Statement of William B. Raney, President, 
                     West Virginia Coal Association

    Good morning, Mr. Chairman, members of the Committee, I am Bill 
Raney, President of the West Virginia Coal Association.
    First, let me thank you, Mr. Chairman, as well as the members and 
staff of the Committee for the opportunity to participate in this 
oversight hearing regarding the 30th Anniversary of the Surface Mining 
Control & Reclamation Act (``SMCRA'') of 1977. I am very proud to be 
here on behalf of the Coal Association's membership, which accounts for 
over 85 percent of the Mountain State's underground and surface coal 
production. Today's coal industry in West Virginia directly employs 
more than 20,000 miners and more than 25,000 contractors whose 
specialty skills and services are required to keep mines operating 
everyday.
    For purposes of today's hearing, I am most proud to have been asked 
to also represent the Coal Associations from the states that 
collectively make up this country's Appalachian coal basin. In addition 
to West Virginia, those include Kentucky, Virginia, Maryland, 
Pennsylvania, Ohio and Alabama. In 2005, these states produced more 
than 37% of this nation's coal while employing more than 54,000 coal 
miners, nearly 70% of the country's total mining workforce. Again, 
using 2005 Energy Information Administration statistics, more than 62% 
of the miners in Mr. Roberts' United Mine Workers of America 
(``UMWA''), are working in one of these seven states. As you can see, 
this region is absolutely critical to sustaining this nation's energy 
production and the employment of a majority of America's coal miners 
(see generally attachments ``A'' and ``B'').
    I am honored to represent the proud heritage of mining in this 
region that fueled the industrial revolution and made the United States 
the most powerful nation in the world. The Appalachian coal basin 
fueled the furnaces, foundries and mills that built the enduring 
infrastructure of this country, it powered the nation's railroad system 
and it helped America achieve victory in two world wars. The proud 
miners of today continue that legacy so they can raise their families 
and provide a future for their children in the same area where they 
were raised, the states of Appalachia. Continued coal mining in West 
Virginia and the eastern states is absolutely critical to this future.
    That, Mr. Chairman, accentuates the importance of what you did 
thirty years ago. Your influence and involvement, recognizing the 
challenges of mining coal in the eastern United States, with provisions 
for steep slope and mountain top mining as well as the use of valley 
fills, allowed the bill to be passed and signed into law, after two 
previous vetoes and a difficult time in Congress. The passage of HR2 
and the signing of Public Law 95-87 was important to the continued 
viability of mining in the Appalachian region as it proposed national 
standards for permitting while allowing states the flexibility to 
specifically tailor their regulatory programs to meet their unique 
needs through the innovative concept of primacy. These thirty years 
have not been without difficulty, conflict and heated exchanges, but 
the original platform of SMCRA remains in place and has been 
successful. It is important that this continue because the needs of the 
eastern U.S. industry are quite different from those of the industry in 
the Midwest and the Western states.
    While the practicality of SMCRA has matured over the years through 
interpretation and regulatory implementation, it was the amazing 
foresight of its purposes that makes it more pertinent today than ever 
before. As you will recall, Mr. Chairman, thirty years ago the framers 
of this legislation stated one of the purposes of the Act was to
        ...assure the coal supply essential to the Nation's energy 
        requirements, and to its economic and social well-being is 
        provided and strike a balance between protection of the 
        environment and agricultural productivity and the Nation's need 
        for coal as an essential source of energy.
    When one considers the tremendous progress our society has made 
over the past three decades, most of which is energy-dependent, with 
the fact that America's coal production has nearly doubled in that same 
period, the relevance of that 30-year-old purpose is evident. 
Deliberate pursuit of that purpose is more important today than it was 
in 1977.
    It is imperative that U.S. coal production increases so as to 
contribute to America's energy security and it is equally critical that 
production from the Eastern states be sustained in order to ``keep 
America's lights on'' and to provide Americans with a comfortable, 
convenient, electrically-dependant, lifestyle. In so many ways, the 
modern-day American dream is one that is coal-fired and it requires all 
of our coal, whether it comes from the East, the Midwest or the West. 
OSM's demonstrated ability to run SMCRA's national regulatory program 
while recognizing the needs of different regions is critical to this 
sustainment and America's continued growth as a model for reclamation 
and environmental protection throughout the world.
    SMCRA has provided the ``baseline'' of legislation and regulation 
that has allowed our industry to answer the changing energy needs of 
this country and we have accomplished that with professional 
stewardship. It is SMCRA's solid foundation that has afforded our 
people the opportunity to ``set the pace'' for reclamation and 
environmental protection. No one ever gives credit to the states, OSM, 
Congress, the coal industry or our people for the fact that we are 
leading the world in mining stewardship. It is a fact and thereby, 
perhaps, not newsworthy! It is, however, something we point to with 
pride and is ever more important so as to preserve the jobs and 
professions of our more than 54,000 miners and thousands of specialty 
contractors.
    Because all of our employees are ``practicing environmentalists'', 
working every day to insure their environment, the environment around 
the mine, is protected, preserved and maintained. Every time I get the 
chance I tell people I am proud to represent more ``practicing 
environmentalists'' than any other organization in the world. That is 
especially true today since I am speaking for the other six Appalachian 
coal-mining states. You see, each one of these miners or contractors is 
protecting the environment while they are mining or helping to mine our 
coal. They may be protecting water quality, restoring original land 
contours or providing for future developments, planting trees, 
constructing ponds and doing the myriad tasks required to insure that 
their children and grandchildren can hunt the same mountains and fish 
the same streams as they once did. These coal miners and practicing 
environmentalists are proud of their work to both fuel this country and 
protect its social and natural environment, and we are, of course, 
proud of them and their enormous contribution to the economy, security 
and social fabric of their native states and this great country and I 
am honored to speak on their behalf today.
    While the reasonable implementation of SMCRA has provided a 
platform for these demonstrated achievements, it remains under constant 
attack by lawyers, groups and other federal agencies attempting to 
detract from its original purposes and intents. Congress intended, 
thirty years ago, for SMCRA to be the ``brace'' of protection as the 
primary environmental enforcement structure for coal mining throughout 
the federal government and to standardize the complications of 
permitting and regulation among the states and Indian reservations. 
SMCRA was to literally ``level the field'' of requirements among the 
states and other federal agencies for permitting, operating and 
reclaiming mine sites throughout the country.
    Despite this intent for SMCRA to be the ``federal baseline'', some 
30 years after its passage there remains conflict and uncertainty. 
SMCRA encouraged and, in some cases, directed other federal agencies, 
i.e., EPA, the Corps of Engineers and other Department of Interior 
offices and services, to cooperate with OSM. SMCRA's regulatory 
requirements were to become the platform for evaluating and permitting 
mining operations, no matter where they were or what type of operations 
they proposed. Here we are thirty years later and that still has not 
happened. That ``overlapping redundancy'' provides fertile ground for 
harassing lawsuits and judicially inspired regulatory confusion, which 
is typically overturned at the appeal court level.
    Since 1997, there have been scores of federal lawsuits challenging 
the very foundation of the mining regulatory structure sanctioned and 
approved by Congress in 1977. Most of these challenges centered on the 
practice of valley fill construction. All coal mining, surface and 
underground, in the steeply sloped terrain of Appalachia is dependent 
on the ability to construct valley fills, a practice that was started 
in West Virginia and recognized by Congress in SMCRA as the best 
possible way to safely and permanently store the excess dirt and rock 
not needed to restore the approximate original contours of the land 
following the completion of mining (see attachment ``C'', relevant 
pages from OSM's implementing regulations, attachment ``D'', relevant 
pages from a decision from the U.S. Court of Appeals for the Fourth 
Circuit decision regarding SMCRA and the practice of valley fill 
construction and attachment ``E'', photographs of active and reclaimed 
valley fills). As you may recall, Mr. Chairman, this was one of the 
issues that was addressed before the bill was approved in 1977. 
However, time and time again federal judges, reacting to the claims of 
extremist environmental groups, have interpreted the Clean Water Act to 
outlaw the very activities that Congress approved in SMCRA.
    For example, SMCRA mandates the installation of ponds below valley 
fills. These sediment ponds were recognized by Congress as the best 
technology available to control runoff and meet water quality standards 
from mining operations (see attachment ``F'', photographs of valley 
fills and in-stream ponds, attachment ``G'', relevant pages from an 
OSM-published Handbook for Small Mine Operators and attachment ``H'', 
relevant pages from OSM's implementing regulations). In June of this 
year, a federal judge, reacting to an extremist lawsuit, ruled that 
these ponds cannot be constructed because they are illegal under the 
Clean Water Act. So, we have a federal judge using one statute to 
outlaw another agency's regulations, despite 30 years of outstanding 
experience and accomplishment through OSM's interpretation and 
implementation of SMCRA.
    All of that frustrates the development of mining operations in 
Appalachia and needs Congressional attention. The overlaps that exist 
between SMCRA and the other federal environmental laws and programs 
need to be addressed with the same intent as expressed in 1977 that 
SMCRA was and is to be the ``federal baseline'' for permitting and 
enforcement of mining operations throughout the country. While some 
agencies have perpetuated this confusion, the U.S. Army Corps of 
Engineers through its Assistant Secretary for Civil Works and its 
Huntington and Pittsburgh District offices have done as much as 
possible to reduce and eliminate conflicting program requirements under 
SMCRA and section 404 of the Clean Water Act. Despite the cooperative 
efforts of these two agencies pursuant to SMCRA, lawyers continue to 
attempt to stop mining in West Virginia and take the jobs of our miners 
and disrupt their lives and the lives of their families. These lawyers, 
which usually end up being paid by the federal government, are 
exploiting these ``redundant overlaps'' among the programs. We hope you 
and the Committee will give this matter your prompt attention because 
the original intent of SMCRA was clear in 1977 and has typically 
withstood many legal tests.
    As mentioned earlier, the 1977 Act showed great foresight and 
vision relative to America's importance as a leader in balancing the 
world energy needs and protecting its environment. SMCRA is also unique 
in that it provided not only the structure for regulation of future 
coal mining activities, it also established the Abandoned Mine Lands 
(AML) program, funded entirely by a tax collected on active coal 
production, to address the environmental, social and infrastructure 
problems presented by older sites that had been mined prior to the 
passage of SMCRA. It is important to emphasize the fact that this 
entire program is paid for completely with industry money because many 
Americans are not aware of the benefits of this program and the fact 
that it is funded entirely by the industry. This successful program 
continues to reclaim ``pre-law'' mine sites, install much-needed 
infrastructure in rural mining areas, address emergency situations from 
past mining and provide medical benefits for thousands of the retired 
coal miners and their dependents. Again, the foresight and vision of 
SMCRA, as expressed in 1977, is evidenced in the successful AML 
Program. However we feel more credit needs to be given to the fact that 
this program is funded with money from today's coal production and how 
important it is for coal mining to continue so the AML program can be 
sustained at the same level of funding. Lawyers and judges need to 
recognize the implication of diminished domestic coal production on 
this notably successful program of environmental remediation, 
infrastructure development and social rescue.
    Back in 1977 West Virginia's pre-SMCRA mining environmental program 
served as the model for this federal legislation and West Virginia was 
the first state to obtain primacy under the cooperative federalism 
structure established by Congress that recognized not only the need for 
a level playing field of regulation for the sake of interstate commerce 
and environmental protection but also acknowledged the expertise of the 
individual states to regulate activities occurring within their own 
borders.
    We believe that SMCRA and the administration of its implementing 
regulations by the Office of Surface Mining have been largely 
successful. Again relying on Congress' stated purpose that the 
country's need for energy must be balanced with environmental 
protection, one only has to realize that coal production has increased 
since the passage of the Act in 1977 at no sacrifice to the natural 
environment.
    Sure, there have been growing pains over the years, where industry 
and sometimes even state regulators have disagreed with OSM but, by and 
large, we believe that SMCRA has achieved the environmental goals 
envisioned by this Congress 30 years ago, just as former Secretary of 
the Interior Bruce Babbitt observed when he and Chairman Rahall marked 
the 19th Anniversary of SMCRA in West Virginia in 1996 (see attachment 
``I''). On August 3, 1996, then Secretary of Interior Bruce Babbitt 
visited a reclaimed mountain top mining operation with valley fills in 
Boone County, West Virginia and observed, among other things, ``the 
landscape is better in many ways''. If former Secretary Babbitt was to 
return to the this site or any site in any of the Appalachian states he 
would be even more impressed today with the resiliency of SMCRA and the 
tremendous achievement of the miners and operators, all of whom are 
``practicing environmentalists''.
    Mr. Chairman, your attention and amendments in 1977 allowed this 
bill to be passed because those changes recognized the significance of 
coal production in the Appalachian region of this country and the need 
to sustain that production and protect the jobs of our people. Your 
amendments relevant to this Act and the Clean Water Act that have been 
passed since 1977 were also important to that sustainment and 
protection. Your continued leadership is equally important today to be 
sure those same protections are in place for the operations and the 
miners of Appalachia. You and your Committee's vision, as demonstrated 
30 years ago, is critical today to eliminate the ``redundant overlap'' 
between Congressional intent as expressed in SMCRA and the Clean Water 
Act.
    This ``overlap'' dilemma casts a long shadow over the coal industry 
in Appalachia, creating regulatory uncertainty that discourages new and 
continued investment in the very region that serves as the basis for 
the country's industrial and electrical fuel supply. Perhaps most 
disturbing, it questions the future of our more than 54,000 coal 
miners, our ``practicing environmentalists'', who continue to work, 
live and raise their families in their native Appalachia. Those workers 
are threatened by these frivolous lawsuits and continued attacks. (See 
attachment ``J'', affidavits filed by four coal miners in a related 
court case).
    Mr. Chairman and members of the Committee, we believe that these 
miners are owed a stable future as they work to provide the energy for 
the rest of the country. As we stated previously, SMCRA was a 
critically important step in providing that stable future. It 
established that federal baseline, that brace of regulation that 
leveled the playing field among the coal producing states. It provided 
protection for the natural and social environmental, allowing the 
diverse environmental setting of Appalachia to maintain and flourish. 
SMCRA protects our communities and our people, preserving the social 
fabric of the Appalachian coal mining communities where our coal miners 
live and work. But, there is still some work to be done. Removing the 
judicially-inspired regulatory confusion that flourishes because of 
these ``redundant overlaps'' between SMCRA and section 404 of the Clean 
Water Act will firmly re-establish Appalachia as a source of domestic, 
industrial and consumer energy, allowing our miners, our practicing 
environmentalists, to continue to work and live uninterrupted as they 
mine the coal which not only powers the economic engines of this 
country, but provides the revenue stream for the AML program and is the 
economic lifeline for our seven Appalachian states.
    Mr. Chairman, once again, I express our appreciation for the 
opportunity to appear before your Committee. You set the stage 30 years 
ago and have diligently protected our people and their jobs ever since 
then. We are, however, threatened today. Our people are threatened. We 
turn to you, as we did in 1977, to protect us and bring peace of mind 
to the miners and companies in the coalfields of Alabama, Kentucky, 
Maryland, Ohio, Pennsylvania, Virginia and West Virginia, the proud 
states of America's Appalachian basin.
                                 ______
                                 
                            ATTACHMENT ``A''
                     Overview of Eastern Coal 2007

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                           Production Trends

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                               Employees

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                                Reserves

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                             Research Needs
      Safety
      Production
      Thin seam mining
      Environmental
      Carbon Capture
                                 ______
                                 
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                      Congressional action needed
      Research needs
      Coal-tp-liquids incentives
      Greenhouse gas policies
                                 ______
                                 
                            Attachment ``B''
                   sustaining eastern coal production
    The Coal Industry is well poised to capitalize on the high growth 
opportunities as the country pursues energy independence and economic 
wealth from a strong domestic energy industry.
    On balance, the industry has great capacity, committed management 
teams, aggressive business plans and a strong will to succeed. 
Consequently, from a big picture or macro view, the industry is well 
situated to meet the demands of tomorrow but not without major 
challenges. Global climate change, national energy policy and the coal-
to-liquids program are at the forefront of these challenges and coal's 
future depends largely on the manner in which these policy questions 
are answered.
    From a regional standpoint, particularly the east and mid-west 
portions of the country, where overall market share has fallen in 
recent years, we have additional, unique challenges--some 
technological, some political--which must be overcome if we are to 
remain viable and retain our place in domestic and world energy 
markets.
    It has been widely reported that the eastern region is particularly 
confronted with labor shortages, ongoing environmental challenges, a 
diminishing reserve base and overall tougher geology. Geology that 
requires deeper, more difficult and more expensive mining with thinner 
seams and lower recovery ratios. The future of the coal industry in the 
states east of the Mississippi River will depend on how these issues 
are addressed.
    Operating in today's highly competitive global markets, where 
contracts are won and lost on pennies per ton, additional cost burdens 
are a tremendous obstacle to overcome. The Illinois and Appalachian 
basins are blessed with the highest quality coal in the world, mined by 
the world's best coal miners, with technology second to none. The 
region has nearly one-half (47.7%) of this nation's mineable reserves 
remaining with all the ingredients to succeed for the next 200 years, 
but we are threatened!
      On April 19, 2007, the New York investment firm, Stifel, 
Nicolaus & Co., Inc., observed: ``...We expect total Appalachian 
volumes to fall from 390 million tons in 2006 to 354 million tons in 
2008...We expect increased coal production from the western U.S. (+44 
million tons 2006 to 2008), imports, and other U.S. regions to offset 
the Appalachian declines and allow for some growth in demand.''...
      Central Appalachian coal production has been inelastic 
and resistant to price triggers during the rally of 2004, with mining 
companies straining to make the most of depleting reserves at existing 
sites and constrained from developing new mines by permitting 
delays.... Nowhere is this more true currently than in West Virginia. 
(Coal Daily--3/4/05)
    We are threatened and we need your help to sustain our production 
for tomorrow. With the threat of increased pressures from foreign and 
western coal, we must ``tool-up'' to meet the demands of today's 
market..
Production and Demand
    National energy demand is on the rise. Increasing oil prices and a 
national desire to decrease American dependence on foreign oil have 
brought coal to the forefront of energy production. We hope the strong 
market will continue, but history and world turmoil brings a sense of 
unpredictability. To prepare for this uncertainty we need to encourage 
investment to be sure we are ready to competitively meet the world's 
demands.
    Installing and expanding modern, ``state-of-the-art'' capital 
projects today will help alleviate the negative pressures of an 
unpredictable regulatory atmosphere that is more restrictive than any 
other nation and geologic conditions that are ever more challenging 
that puts the Appalachian coal industry at a competitive disadvantage.
    For the last several years, the United States has produced and 
consumed more than one billion tons of coal. That level of national 
consumption is predicted to continue. Eastern coal contributes 40% to 
the nation's needs, down from 55% ten years ago.
      Production next year will probably equate to 1.15 billion 
tons, an increase of over 4% over the 2004 levels. The National Mining 
Association expects that the bulk of this total, some 650 million tons 
will come from Western production. Permitting problems are a factor in 
constraining production in Central Appalachia... (Coal News, December 
2004)
      According to the Energy Information Administration (EIA), 
total U.S. production is 2.1% less than last year. However, production 
west of the Mississippi River is 1.7% more than last year while 
production east of the Mississippi is 7.1% less.
      For the month of February ``07, imported coal exceeded 
exported coal. 2.656M tons imported versus 2.649M tons exported. 
Although year-to-date ``07 (January ``07 and February ``07) totals 
indicate more exported than imported (6.955M tons exported v. 5.501M 
tons imported) the trend is concerning since eastern production 
accounts for the majority of exported coal in the US.
COAL PRICES
      Since Q404, the price of Appalachian steam coal has 
dropped from $62-$64 per ton to a price in Q107 of $38-$40 per ton 
(based on NYMEX pricing of 12,500 BTU <1%S coal).
    As evidenced above coal prices from the Appalachian Basin have been 
falling rapidly over the past two years. In fact, notwithstanding the 
past couple of years, coal prices were on a downward spiral for years 
amidst increasingly competitive markets which effectively inhibited the 
development of the infrastructure needed to take full advantage of the 
current demand for coal.

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          mining difficulties that threaten eastern production
      Today's Appalachian coal seams are more difficult to 
access, require more sophisticated preparation and are further from the 
transportation points of rail and barge. Developing infrastructure, 
i.e., shafts, slopes, rail sidings and loading facilities, today will 
help the coal ``flow'' tomorrow.
      Mining costs, i.e., fuel, engineering, permitting and 
reclamation, personnel, equipment and supplies have all turned sharply 
upward. As always, the costs increase when prices increase, but the 
costs do not decrease when the prices drop!
      The entire industry is facing the problems of an aging 
workforce and an overall shortage of workers. It is, however, most 
critical for our region since 79.2% of the miners are working in the 
eastern and mid-western coal industry. Human infrastructure must be 
developed today.
      Legal challenges and continuing unpredictability in the 
permitting process have further inhibited the ability of the industry 
to maximize its production opportunities. Acknowledgement of 
advancements in applied technology and environmental expertise are 
immediately needed.
    We need help in addressing these challenges and uncertainty. We 
must take full advantage of today's ``optimistic atmosphere.'' It is an 
``once-in-a-lifetime'' opportunity!
Domestic Competition
    Aside from severe competition from countries that do not have the 
environmental, health and safety standards of the U.S. industry, we 
must also compete with coal from western states with more inviting 
geology. For instance, in Wyoming, the coal seams can be greater than 
80 feet in thickness while the typical seams found in eastern mines 
average from 3 to 6 feet thick.
      Output from the PRB has continued to make inroads into 
regions traditionally supplied by Central Appalachian, Illinois Basin 
or other origins, with the low-sulfur product in demand from fuel 
buyers facing increasing environmental regulation. (Coal Daily--3/4/05)

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    It is a tribute to the quality of Appalachia and Illinois Basin 
coals, to the expertise of its workers and to the efficiencies of its 
industry that this region has been able to maintain its production of 
42.3% of this nation's coal That requires proper equipment, skilled 
manpower, modern infrastructure, and a stable, predictable regulatory 
climate. The use western coal in our traditional eastern is increasing.
      A West Virginia utility is taking steps to blend western 
coal with its traditional fuel mix. (State Journal--3/11-17/05)
    It is critical to maintain market share if the eastern states are 
to continue to share in the economic prosperity of the U.S. coal 
industry. To do this, we must have regulatory predictability, a fair 
level of regulatory controls with achievable standards and an 
aggressive program to encourage future development. This is the ideal 
time for the federal government to encourage the ``re-tooling'' and 
expansion of the Appalachian industry's infrastructure to take 
advantage of the tremendous opportunity offered by current energy 
market demands.
    Frankly, many say there is not enough coal being mined in this 
country to supply its needs! However, that demand is so price sensitive 
that the attractiveness of western coal, where the seams are thick and 
mining costs are low, will overwhelm the higher cost Appalachian coals, 
found east of the Mississippi River. Without immediate attention to the 
challenges facing our eastern and mid-western coals, imported coals, 
typically mined with less environmental, safety and human regulation, 
pose the same threat. So, yes, it may be true that there is not enough 
American coal being mined to supply America's needs, but you may be 
certain that the coal will be found from some source, someplace. We 
want to maintain our market share!
Governmental Actions
    It cannot be emphasized too strongly that the actions of government 
have a very real statistical impact on coal production. Yearly 
production totals can be charted with the implementation of major 
government regulatory acts.
    History indicates that each significant action of government was 
accompanied by an immediate and negative effect on production. However, 
the reverse can also be true. That is, positive governmental 
encouragement will likely result in the capital investment necessary to 
sustain future production at or above current levels.
Partnership
    Given that coal production from the states east of the Mississippi 
River makes up a significant portion of overall domestic energy 
production (42.3%), it is incumbent on State and federal governments 
and the coal industry to act in partnership to ensure the continued 
economic viability of our industry In the Appalachian region. We must 
be competitive and prepared for the uncertainty of tomorrow. We need 
your help if the eastern states are to remain competitive.
    We have a ``once in a lifetime'' opportunity for the eastern coal 
industry. In these times of a robust energy market with strong pricing, 
we must raise the confidence of all companies to invest in this region.
Recommendations:
    1.  Increase Congressional funding for coal extraction research.
    2.  Continue funding for miner training programs.
                                 ______
                                 
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 
                                                                  
    The Chairman. Mr. Fry.

STATEMENT OF ERIC FRY, DIRECTOR OF REGULATORY SERVICES, PEABODY 
 COAL COMPANY, ST. LOUIS, MISSOURI, ON BEHALF OF THE ILLINOIS 
                        COAL ASSOCIATION

    Mr. Fry. Good afternoon, Mr. Chairman, Committee members. 
My name is Eric Fry; I work with Peabody Energy. I am here 
today representing the Illinois Coal Association, and pinch-
hitting for Mark Yingling, who was supposed to be here, but 
couldn't make it today.
    Prior to SMCRA being enacted in 1977, many states, trade 
associations, and coal operators had already established 
private-public partnerships to address mine reclamation by 
working with local legislatures. These groups developed 
regulations for regrading, soils replacement, and revegetation. 
Programs like Peabody's Operation Green Earth and the early 
state programs provided much of the basis for SMCRA, which in 
turn has guided the mining industry to the current high level 
of excellence and environmental stewardship.
    Mine reclamation has been advanced from what was once 
identified as one of this nation's major environmental 
challenges to being a story of success. Now, through 
initiatives like the Asian Pacific Partnership, many 
requirements of SMCRA are being used as examples of best 
practice across the globe.
    SMCRA provides for open involvement from stakeholders, 
regulators, and the public. The permit application, review, and 
approval and modification process allow for full 
characterization of the pre-mine resources, consistent mining 
and reclamation plans, public input, and dependable bright 
lines. The applicant violator system, financial assurance 
requirements, and bond release performance standards assist in 
maintaining a high degree of industry credibility.
    The ever-present inspection and enforcement provides for 
ongoing dialogue in planning and performance requirements. 
Reclamation of prime farmland, water resources, fish and 
wildlife resources, forestry and rangeland once thought to be a 
major challenge is now routinely accomplished. These ongoing 
successes support the realization that mining is a temporary 
use of the land, and that value creation can extend well beyond 
mineral extraction.
    A large part of the success of SMCRA is attributable to the 
singular focus on mining, as opposed to programs that address 
multiple industries. SMCRA is a mature program, administered by 
experienced and knowledgeable mining professionals in both 
Federal and state programs. This level of professionalism helps 
to provide the consistency and regulatory certainty needed by a 
dynamic coal industry.
    While SMCRA has proven to be a successful program, there is 
always room for improvement. A concerted effort should be made 
to fully utilize existing resources. Examples include items 
such as the AML Fund, where remaining projects should be 
finished as soon as practical.
    Sections 401 and 404 of the Clean Water Act are, for the 
most part, addressed in SMCRA requirements. This triple-overlap 
of regulation is confusing, inefficient, costly for both 
operators and regulators, and blurs the bright lines.
    Additionally, while SMCRA provides solid guidance, a one-
size-fits-all approach is not always appropriate. Coal regions 
span the U.S. and have wide ecological, hydro-geological, and 
climatological differences. SMCRA needs to allow for 
flexibility in the use of local proven practices, such as 
grading diversity, that creates wildlife protection zones, 
small depressions that supplement the landscape, topsoil 
substitutes that improve plant diversity, and partial highwall 
retention that improves wildlife habitat and aesthetics.
    I have some time left. I have a few slides. Go to the third 
one, active research. No, no, back. I think you picked the 
wrong one.
    There we go. Now to the third one. Peabody engages in 
active research programs. Some examples in the Midwest are the 
American Chestnut Foundation. That is a study of adaptability 
of chestnut trees on reclaimed land. We have a study with the 
University of Kentucky to study the growth rates for trees on 
reclaimed land. We work with the Indiana Division of 
Reclamation to study soil handling techniques.
    Go to the next one. No. No. This isn't working very well. 
Sorry. Back. There we go.
    Community outreach is important. Several ways that we do 
this are to hold open houses, field days that invite exchange 
between industry, agencies, and academia. The Sierra Club has 
come to these field days before.
    Also, educational workshops that are, that take place on 
the mines. OK, the next one. There we go.
    Large wildlife areas are sometimes created. In this example 
in Illinois, the River King Fish and Wildlife Area, 1800 acres 
of water and wetlands. And this is just one example of many. 
Next one.
    Ongoing wildlife research. This isn't in the Midwest, but 
this is a research project that North Antelope Rochelle, a 
three-year research project on greater sage grouse. Next one.
    Arizona Best Practices and Reclamation recognized at the 
International Global Awards. Next one.
    The Asia Pacific Partnership promotes sustainable 
practices. This is an international agreement between 
Australia, India, Japan, China, and Korea, and involves the 
development and transfer of technology on environmental issues. 
That is good.
    That is what I have got. Thank you very much.
    [The statement submitted for the record by Mr. Fry on 
behalf of Yingling follows:]

    Statement of Mark R. Yingling, VP of Environmental Services and 
    Conservancy, Representing Peabody Energy and the Illinois Coal 
                              Association

    Mr. Chairman, my name is Mark Yingling. I am the Vice President of 
Environmental Services and Conservancy for Peabody Energy and a member 
of the Executive Board for the Illinois Coal Association and I am 
committed to the proper utilization and sustainability of this 
country's natural resources.
    According to the U.S. Energy Information Administration, the United 
States currently imports 59 percent of its oil requirements. This 
dependence is expected to grow 70 percent by the year 2025. 
Additionally, natural gas accounts for 16 percent of America's energy 
imports.
    Even with our current dependency on foreign energy supplies, we 
need to celebrate the enormous American coal resource that has added to 
the security of energy in the United States. Coal mining shoulders half 
of this Country's electricity generation while lessening the dependence 
on foreign oil and, increasingly, our dependence on imported natural 
gas.
    Prior to SMCRA being enacted in 1977, many State Agencies, Trade 
Associations and Coal Operators, in conjunction with local 
Legislatures, had already established private/public partnerships to 
address mine reclamation. These groups developed regulations for re-
grading, soils replacement, and revegetation. Programs like Peabody's 
Operation Green Earth and the early State regulation provided much of 
the basis for SMCRA which, in turn, has guided the mining industry to 
its current high level of excellence in environmental stewardship. Mine 
reclamation has advanced from one of this Nation's major environmental 
challenges in the 70's to being a success story of private/public 
partnership. Through initiatives like the Asian Pacific Partnership, 
many requirements of SMCRA are now being used as examples of best 
practice across the globe.
    SMCRA provides for open involvement from stakeholders, regulators, 
and the public. The permit application, review, approval and 
modification processes allow for full characterization of the pre-mine 
resources, consistent mining and reclamation plans, public input, and 
dependable ``bright lines''. The Applicant Violator System, Financial 
Assurance requirements and Bond Release performance standards assist in 
maintaining a high degree of industry credibility. The ever present 
inspection & enforcement provides for ongoing dialogue on planning and 
performance requirements. Reclamation of prime farmland, water 
resources, fish & wildlife resources, forestry, and rangeland, once 
thought to be a major challenge, now is routinely accomplished. These 
on-going successes support the realization that mining is a temporary 
use of the land and that value creation can extend well beyond mineral 
extraction.
    A large part of the success of SMCRA is attributable to the 
singular focus on mining as opposed to programs that address multiple 
industries. SMCRA is a mature program administered by experienced and 
knowledgeable mining professionals in both the Federal and State 
programs. This level of professionalism helps to provide the 
consistency and regulatory certainty needed by a dynamic coal industry.
    While SMCRA has proven to be a successful program, there is always 
room for improvement. The ingenuity that has given confidence to 
achieving many sensitive and difficult performance standards now needs 
to be used to become more efficient in meeting and even exceeding these 
same requirements. A concerted effort should to be made to fully 
utilize existing resources. A prime example includes the AML fund where 
remaining projects should be finished as soon as practical.
    Another area that should be fully promoted are the benefits of 
reduced grading which includes lower soil compaction, reduced erosion, 
higher soil moisture retention, better water quality and lower fuel 
consumption. An associated benefit of reduced grading is increased 
vegetation production both above ground and within the rooting media 
which all leads to greater uptake and retention of atmospheric carbon 
dioxide.
    An ongoing source of permitting inefficiency is Section 401 and 
Section 404 of the Clean Water Act. These requirements are, for the 
most part, addressed in the SMCRA requirements. This triple overlap of 
regulation is confusing, inefficient, costly (for both Operators and 
Regulators), and blurs the ``bright lines''.
    Additionally, while SMCRA provides solid guidance, a ``one-size-
fits-all'' approach is not always appropriate. Coal regions span the 
U.S. and have wide ecological, hydro-geological, and climatological 
differences. SMCRA needs to allow for flexibility in the use of local 
proven practices such as grading diversity that creates wildlife 
protection zones, small depressions that supplement the landscape, 
sinuous drainage patterns that improve drainage stability, topsoil 
substitutes that improve plant diversity and partial highwall retention 
that improves wildlife habitat and aesthetics.
    Thank you for allowing me to provide these comments. Following is a 
brief set of slides on a few of the many successes during the past 30 
years of SMCRA.
                                 ______
                                 
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 
                                 
STATEMENT OF MARION LOOMIS, EXECUTIVE DIRECTOR, WYOMING MINING 
                 ASSOCIATION, CHEYENNE, WYOMING

    Mr. Loomis. Mr. Chairman, Congressman Pearce, thank you for 
inviting us to come back today. I am Marion Loomis, the 
Executive Director of the Wyoming Mining Association.
    The Wyoming Mining Association represents bentonite coal, 
trona, and uranium producers in Wyoming. I am sure that you are 
aware that Wyoming leads the Nation in production of coal, but 
you may be interested to know that Wyoming also leads the 
Nation in the production of bentonite, trona, which is 
converted into soda ash and is a primary ingredient in the 
manufacture of glass, and we lead the Nation in the production 
of uranium.
    Wyoming coal mines now produce almost 450 million tons of 
coal annually, which is 38 percent of this nation's coal 
production. Wyoming coal is shipped to 36 states, from New York 
to Washington and Texas to Minnesota.
    Mr. Chairman, some feel that Wyoming just started producing 
coal after the Clean Air Act passed in 1970, and indeed, that 
was one of the reasons for the tremendous growth in coal 
production in Wyoming. But Wyoming started producing coal in 
1869, with the completion of the Trans-Continental Railroad. At 
our peak prior to 1970, Wyoming produced 9.8 million tons of 
coal in 1945, and our peak employment came in 1922, with 9,000 
miners. So Wyoming has had a long history of providing coal to 
fuel this country's energy needs.
    After the railroad switched from coal to diesel, Wyoming 
reached a low in production in 1958, with 1.6 million tons, and 
a low of employment in 1967, with only 332 miners. However, the 
industry turned around in the 1960s, with the construction of 
several coal-fired power plants. By the time the Surface Mining 
Control and Reclamation Act passed, Wyoming mines were 
producing 44 million tons per year, with employment of 3300 
miners.
    The late 1960s, the mining industry in Wyoming recognized 
that mine lands needed to be returned to a productive use after 
mining. The industry and the Wyoming Mining Association worked 
with legislators to pass a reclamation act in 1969, called the 
Open Cut Land Reclamation Act, and it applied to all minerals, 
not just coal. All mined minerals.
    Granted, that first act was rather weak by today's 
standards, but it shows that the industry recognized the need 
for a reclamation law that applied to everyone, so no one 
company had an advantage over another. The 1969 Act was 
replaced with a much more comprehensive act in 1973, which 
addressed not only land reclamation, but air quality, water, 
and solid waste issues.
    The industry has struggled to make the provisions of SMCRA 
work in the arid West, where a lack of water and topsoil much 
different than in the East, where there is abundant rainfall 
and plenty of topsoil. It is difficult to make the one-size-
fits-all mandates of the Federal law work in all the areas. 
SMCRA and the Federal regulations do recognize the difference 
between these areas that receive less than 26 inches of 
precipitation, and those that receive more. Currently this is 
reflected in an extended bond liability period, but we feel 
this is an area that should be explored to expand and enhance 
reclamation options.
    Congress also recognized differences in mining areas of the 
country, when Representative Roncalio from Wyoming was 
successful in including a provision that recognized the unique 
features of a special bituminous mine. If that provision had 
not been inserted, one of the truly remarkable mines in Wyoming 
would have not been able to operate.
    The Kimmler Mine, located in southwest Wyoming, has 
multiple coal seams, with the bottom seam over 100 feet thick. 
The Act recognized that the backfill provisions of the Act 
would not work for the Kimmler Mine, and a special provision 
was written into the Act to allow for a different reclamation 
procedure to be used. That mine opened in 1897, and is still 
operating. To date, the Kimmler Mine has produced over 148 
million tons of coal.
    We have seen a growing understanding of the differences in 
the mining areas by those administering the Federal Act. One of 
the concerns of our companies was the ability to restore 
wildlife habitat. In many cases, the pre-mining wildlife 
habitat is eroded gullies and arroyos, which cannot be part of 
a successful reclamation effort. Our reclamation has to be 
erosionally stable.
    But we can take part in the reclaimed highwall and create 
an erosionally stable wildlife feature that will provide 
protection, diverse vegetation, and the ability to store water. 
We are pleased that OSM is now working with the industry to 
allow us to create these features in the post-mine topography 
as a replacement for natural habitat removed by mining.
    We encourage the Committee to support OSM's efforts to 
design and implement policy which will facilitate mining 
companies to create wildlife habitat.
    You are very aware of the Abandoned Mine Land Reclamation 
fund, and there has been a lot of talk about it here today. We 
are very pleased that Congress will fund the balance of the AML 
fees owed to the states. And thank you, Mr. Chairman, and we 
want to also express our thanks to Congresswoman Cubin, for all 
of her efforts and your efforts in this regard.
    Wyoming producers have paid well over $2.3 billion in AML 
fees over the last 30 years, and we are very appreciative that 
the portion owed to Wyoming will now come back for the many 
uses the state has to address mineral-impact issues.
    We are, however, somewhat concerned that OSM seems to 
believe that the money will only be released when projects are 
identified. Our understanding of the Act that you passed last 
year requires that the back balance be paid in equal 
installments. The Wyoming Legislature passed legislation this 
year to hold those back payments until the Legislature decides 
how to allocate those monies. It is our hope that the back 
payments would come to the state without any strings attached.
    In summary, we feel the industry, OSM, and the states have 
come a long way in the past 30 years. We are producing more 
coal, reclaiming more land, and providing a reliable, 
affordable energy resource for this nation. As we go forward, 
it is our hope that we will continue to work together to 
address the many issues that will face us to allow the industry 
to continue to provide a secure source of energy for our 
nation, and still restore the land to a beneficial use after 
mining is completed.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Loomis follows:]

         Statement of Marion Loomis, Wyoming Mining Association

    Mr. Chairman, my name is Marion Loomis. I am the Executive Director 
of the Wyoming Mining Association. The Wyoming Mining Association (WMA) 
represents bentonite, coal, trona and uranium producers in Wyoming. You 
know that Wyoming leads the nation in production of coal, but you may 
be interested to know that Wyoming also leads the nation in the 
production of bentonite, trona (which is converted into soda ash for 
use in glass and chemical manufacturing) and uranium.
    Wyoming coal mines now produce almost 450 million tons of coal 
annually which is 38% of this nation's coal production. Wyoming coal is 
shipped to 36 states from New York to Washington and from Texas to 
Minnesota.
    Mr. Chairman, some feel that Wyoming just started producing coal 
after the Clean Air Act passed in 1970 and indeed that act was one of 
the reasons for the tremendous growth in coal production in Wyoming, 
but Wyoming started producing coal in 1869 with completion of the 
transcontinental railroad. At our peak prior to 1970 Wyoming produced 
9.8 million tons in 1945, but our peak employment was in 1922 with 
9,192 miners, so Wyoming has had a long history of providing coal to 
fuel this country's energy needs. After the railroads switched from 
coal to diesel, Wyoming reached a low in production in 1958 with 1.6 
million tons and a low in employment in 1967 with only 332 miners. 
However, the industry turned around in the 1960's with the construction 
of several coal fired power plants. By the time the Surface Mining 
Control and Reclamation Act (SMCRA) passed, Wyoming mines were 
producing 44 million tons per year with employment of 3,300 miners.
    In the late 1960's the mining industry in Wyoming recognized that 
mined lands needed to be returned to a productive use after mining. The 
industry and the Wyoming Mining Association worked with legislators to 
pass a reclamation act in 1969 called the Open Cut Land Reclamation Act 
and it applied to all mined minerals, not just coal. Granted that first 
act was rather weak by today's standards, but it shows that the 
industry recognized the need for a reclamation law that applied to 
everyone so no one company had an advantage over another. The 1969 act 
was replaced with a much more comprehensive act in 1973 which addressed 
not only land reclamation, but air quality, water, and solid waste 
issues.
    The industry struggled to make the provisions of SMCRA work in the 
arid west where the lack of water and topsoil make reclamation much 
different than in the east where there is abundant rainfall and plenty 
of topsoil. It is difficult to make the one size fits all mandates of 
the federal law work in all areas. SMCRA and the federal regulations do 
recognize a difference between those areas that receive less than 26 
inches of precipitation and those that receive more. Currently this is 
reflected in an extended bond liability period but we feel this is an 
area that should be explored to expand and enhance reclamation options.
    Congress also recognized differences in mining areas of the country 
when Representative Roncalio from Wyoming was successful in including a 
provision that recognized the unique features of special bituminous 
mines. If that provision had not been inserted, one of the truly 
remarkable mines in Wyoming would not have been able to operate. The 
Kemmerer mine located in Southwest Wyoming has multiple coal seams with 
the bottom seam over 100 feet thick. The Act recognized that the back 
fill provisions of the Act would not work for the Kemmerer mine and a 
special provision was written into the Act to allow for a different 
reclamation procedure to be used. That mine opened in 1897 and is still 
operating. To date the Kemmerer mine has produced over 148 million tons 
of coal.
    We have seen a growing understanding of the differences in the 
mining areas by those administering the federal act. One of the 
concerns of our companies was the ability to restore wildlife habitat. 
In many cases the premining wildlife habitat is eroded gulleys and 
arroyos which cannot be part of a successful reclamation effort. Our 
reclamation must be erosionally stable. But, we can take part of the 
reclaimed highwall and create an erosionally stable wildlife feature 
that will provide protection, diverse vegetation and the ability to 
store water. We are pleased that OSM is now working with the industry 
to allow us to create these features in the post mine topography as 
replacement for natural habitat removed by mining. We encourage the 
Committee to support OSM's efforts to design and implement policy which 
will facilitate mining companies creating wildlife habitat.
    You are very aware of the Abandoned Mine Land Reclamation fund. We 
are very pleased that Congress will fund the balance of the AML fees 
owed to the states and thank you, Mr. Chairman and Representative Cubin 
for your efforts in this regard. Wyoming producers have paid well over 
$2.3 billion in AML fees over the last 30 years and we are very 
appreciative that the portion owed to Wyoming will now come back for 
the many uses the state has to address mineral impact issues. We are, 
however, somewhat concerned that OSM seems to believe that the money 
will only be released when projects are identified. Our understanding 
of the act that you passed last year requires that the back balance be 
paid in equal installments. The Wyoming legislature passed legislation 
this year to hold the back payments until the Legislature decides how 
to allocate those monies. It is our hope that the back payments would 
come to the state without any strings attached.
    In summary, we feel the industry, OSM and the states have come a 
long way in the past 30 years. We are producing more coal, reclaiming 
more land, and providing a reliable, affordable energy resource for 
this nation. As we go forward, it is our hope that we will continue to 
work together to address the many issues that will face us to allow the 
industry to continue to provide a secure source of energy for our 
nation and still restore the land to a beneficial use after mining is 
completed.
    Thank you for allowing me to provide these comments.
                                 ______
                                 
    Mr. Pearce. The Chair thanks the panel for their testimony.
    Bill, let me say first to you, I really appreciate your 
testimony. It was right on target, in my opinion. Your 
membership is a practicing environmentalist. And I have known 
many of your members, not just as constituents and good 
corporate citizens of the Congressional District I am honored 
to represent, but also as lifelong friends. And I know that 
what you said was from the heart, because your membership--we 
all are environmentalists, let us face it; each and every one 
of us are environmentalists.
    And the jobs that your membership provides are appreciated 
by all of West Virginia, and by this nation. And many of your 
membership just finished involving themselves with the most 
successful Friends of Coal Auto Show since you have been 
putting that on. And it was a great performance, a great 
turnout this past weekend in my hometown. Congratulations on 
that.
    I want to ask my first question, though, to Hal, who I must 
say I am pleased to finally get before this committee, because 
we go way back, as well. Your experiences on mining issues are 
well known, and I certainly look forward to working with you on 
reforming the Mining Law of 1872. And we are working together 
on that.
    Mr. Quinn. Yes, we are.
    The Chairman. And people can say what they want about 
mountaintop removal mining, or they can say what they want 
about me, a coal miner from the East, trying to do, as they put 
it, what I am trying to do to the hardrock mining industry in 
the West. They can say what they want about it. But at least, 
at least our surface mining coal mining industry has some 
Federal standards on the books governing their mining and the 
reclamation. And at least our mining industry pays a royalty 
when it comes to mining on Federal lands.
    So Bill, let me go back to you and ask you my first 
question, I guess. No, Hal, would you wish to comment on that?
    Mr. Quinn. Mr. Chairman, as you stated, we welcome the 
opportunity to work with you on the mining law, as we have 
discussed in the past.
    The Chairman. Which would kick off tomorrow, by the way. 
Our first hearing.
    Mr. Quinn. You will hear from a representative of our 
organization tomorrow, and I appreciate that invitation for 
that. We are looking forward to working with you in trying to 
find the balance, just like SMCRA struck a balance, but find 
some balance in how to make some changes to the mining law that 
served the country, served the industry, and move us forward on 
those issues, and keep us competitive.
    The Chairman. Bill, let me ask you. Has SMCRA truly leveled 
the playing field? Now, I am not trying to create regional 
rivalries, because, as we all know, one of the purposes of 
SMCRA was to eliminate state competition, state versus state, 
or trying to undercut each other in order to sell more coal.
    But is the regulation of surface mining in the Commonwealth 
of Kentucky, for example, the same as it is in the State of 
West Virginia?
    Mr. Fry. You know, as far as from a SMCRA standpoint, Mr. 
Chairman, I think it very much has leveled the field. And this 
is a perception from me, sitting in West Virginia not doing a 
great deal of study of other states. But my perception of that 
is that SMCRA clearly has leveled it.
    And where we run into disparity of, either on operations or 
enforcement regulation lawsuits being riled, are these eternal 
conflicts with the Clean Water Act and the interpretation that 
is given to them in different states, as compared to what we 
have in West Virginia. And that seems to be where we have the 
most difficult.
    And insofar as a framework created by SMCRA, I think it has 
very much leveled the playing field. When you think about where 
you were in 1977, and all the things that were going on in the 
different states then, then I think it very much has brought 
consistency to regulation along the line.
    The Chairman. So we don't have one state trying to undercut 
a neighboring state now in order to sell their coal.
    Mr. Fry. That is certainly not my perception, no. There is 
not enough coal being mined in this country to take care of 
this country's needs right now, which is a very fortunate 
position to be in. But, and we hope that condition continues, 
unlike some of those that came before us on testimony. We hope 
we continue to can't mine enough coal to meet America's needs.
    The Chairman. Let me continue to ask you to comment on one 
of the themes of the hearings today, which is the issue of 
whether mountaintop removal operations are indeed complying 
with the letter and the intent of SMCRA. With respect to the 
AOC variances and those more beneficial post-mine land-use 
plans.
    Mr. Fry. Absolutely they are. In our opinion, Mr. Chairman, 
they clearly are. And I think it is demonstrated, we are always 
in someone's front window in West Virginia, it seems like. And 
those are clearly being done, and approximate original contour 
is being achieved. And if it is not being achieved, then there 
is a post-mining land use that is in the plan to be 
accomplished following the mining.
    Is every site being developed? No, it isn't. But what site 
is not being developed is being restored to the approximate 
original contour.
    We do have a definition in West Virginia, a very clear 
definition. And it has come as a result of the agencies joining 
together, the initiative of the state, as well as the 
initiative of the industry. And we know what it is. It is spoil 
minimizations. Very complicated. A bunch of engineers put it 
together. I mean, you have to work your way through it. We know 
what that is in West Virginia, and we are doing that. And we 
are very pleased about it.
    It is a little bit aggravating to have everybody come in 
and disparage the fact that it is not working, because we have 
a whole gang of people every day that show up making sure it is 
working. And I think it clearly is working, and it is thanks to 
the cooperation of a whole lot of people in West Virginia.
    The Chairman. So you believe we can have a dovetailing of 
the interests of protecting our environment and mining coal at 
the same time.
    Mr. Fry. Absolutely. And the real benefit, the thing that 
we have lost in all this tale of lawsuits that runs around, is 
what a rare commodity and a valuable commodity level ground is 
in southern West Virginia in your district, Mr. Chairman. And 
in order to--we are finally getting smart enough to coordinate 
mining and highway construction, and those kinds of things.
    But just to leave the ground in a more moderate slope than 
what it was naturally there is a tremendous opportunity for an 
economic development in the future.
    Well, we pretty much have forgone that, thanks to all these 
lawsuits and everything, where you have to stack and build that 
mountainside back up now, unless you have a very specific plan. 
So we are trying to do a better job of coordinating mining with 
the economic development, thanks to the agency that was created 
under Governor Underwood you referenced and all of those 
things.
    So we are getting a little smarter about that. But the 
travesty is that there is a lot of level ground that is being 
stacked back up to 60 percent slopes.
    The Chairman. Thank you, Bill. The gentleman from New 
Mexico.
    Mr. Pearce. Thank you, Mr. Chairman. Mr. Quinn, what I read 
from H.R. 2337, Title IV, subtitle D, Chapter 2, it talks about 
having the Secretary really to assist, to develop policies that 
will assist wildlife populations and their habitats in adapting 
to and surviving the effects of global warming. That is kind of 
a theme that runs through this entire, of the section 42, and 
in the pages around that.
    Have you had a chance to take a look at that? And can you 
give some idea of what that is going to mean to miners?
    Mr. Quinn. Congressman, I have not looked at that section. 
And I will give my attention to that and try to respond to the 
question. But from what you read, I really don't know what it 
would mean, or how we would go about doing it, to be quite 
honest with you.
    In terms of trying to study the effects of----
    Mr. Pearce. No, it is not to study. It is to assist 
wildlife populations and their habitats in adapting to and 
surviving the effects of global warming.
    Mr. Quinn. Well, it would certainly add a new and very 
large wrinkle to our resource planning, under SMCRA or any 
other law that I am aware of at this point in time. But I am 
not familiar with the section, sir.
    Mr. Pearce. OK. If you get a chance to review that, you 
might give me your input.
    Mr. Quinn. Thank you.
    Mr. Pearce. Mr. Raney, I appreciate your testimony. Now, 
you heard testimony from Mr. Lovett, who is also from West 
Virginia, and he was unimpressed with the state and their 
oversight, and with the OSM and their oversight. And maybe 
even, I don't know if he actually said it, but I kind of got 
the idea that it might just be a bunch of a wink and a nod, and 
send them on their way, as the regulators looked at the 
companies.
    Do you have a particular perspective? Do you see any of 
that looking the other way, where the law is just not enforced?
    Mr. Raney. No, sir. Mr. Lovett and I ride on different 
sides of the bus, I guess. So no, absolutely not. And I mean, I 
represent a whole bunch of companies that are full of engineers 
and mine managers that absolutely would argue incessantly that 
that is patently untrue.
    And it is one of those babbling allegations that comes from 
those opponents to the industry, I think, that has absolutely 
no substance whatsoever behind it.
    Mr. Pearce. Mr. Fry, we have also the allegation that, in 
the testimony that I was referring to, that they just are 
allowed not to say the topsoil, very few say the topsoil is 
exact quote. And yet I see things growing. I see crops, and I 
see grass, and I see things like that.
    Do you all not see the topsoil? Is that fair? Is that an 
accurate allegation?
    Mr. Fry. Well, I can't really respond to that definitely in 
West Virginia. But in the----
    Mr. Pearce. No, I am talking about in general. In general. 
I mean, the reclamation, the Surface Mining Act is going to 
apply everywhere, so surely you have to----
    Mr. Fry. Yes, if you go to the mines in the Midwest and out 
west, you will find large piles of topsoil that are put back 
to----
    Mr. Pearce. Talk to the microphone. I flew jets for an 
awful long time.
    Mr. Fry. Sorry. The answer to your question is yes, that 
most mines you go to you will find large piles of topsoil that 
are put back. They are vegetated to prevent erosion, and there 
is a requirement to put them back during the reclamation 
process.
    Mr. Pearce. Now, in Mr. Wright's testimony, he claims on 
page two that he can say with complete confidence that 
coalfield residents will not get meaningful protection for 
their health and their water unless we step in and demand that 
protection. Do you all find the OSM to be that functionless? In 
other words, do you find them to be an easy touch for a company 
to go into and just move right on past? That was kind of the 
feel; that they are toothless, that they do not do their job 
very well in providing for protection. Can you talk about that 
just a bit?
    Mr. Fry. Yes. You are mostly dealing with the state 
programs, and then most of the states that I am familiar with, 
if someone has an issue with water, there is a requirement that 
the company provide the water before it is known that the 
company is at fault.
    No, there are very strict rules to make sure that water is 
replaced, and that best management practices are practiced in 
order to prevent water contamination to the degree possible.
    Mr. Pearce. Mr. Chairman, I have some other questions if 
you have a second round. Thanks.
    The Chairman. Go ahead.
    Mr. Pearce. Thanks. OK. Similarly, on this testimony of Mr. 
Wright, the, page four, he has a fairly long section where he 
is talking that Indiana test seems to remove mines from any 
accountability to groundwater standards. Do you all mine in 
Indiana?
    Mr. Fry. Yes.
    Mr. Pearce. Do you find that Indiana does not, do they not 
have--tell me about the enforcement mechanisms you all have had 
to go through on groundwater standards.
    Mr. Fry. Groundwater standards are set by the states. And 
some states don't have groundwater standards, and other states 
do have groundwater standards, and they differ in each state as 
to----
    Mr. Pearce. And you have to comply. I mean, do you have to 
do clean-ups? You have to make sure it is not contaminating, it 
is not having the aquifers contaminated, or whatever?
    Mr. Fry. Yes, there are specific standards that have to be 
met. As you probably know, that in a spoil aquifer, that there 
is some mineralization that takes place, and there is not 
anything you can do about that. And that is taken into effect 
in the groundwater standards of some states.
    Mr. Pearce. Mr. Fry, the 2262, the Hard Rock Mining Act, 
has a section in it which asks that the permits be reviewed 
every three years. From a mining point of view and working with 
bankers, my experience with oil and gas is that you are not 
going to get a project funded if you only have three years 
worth of approval.
    Can you address whether or not your financing is going to 
be facilitated or made more difficult if you have a permit 
review process that is only three-year windows, and then is up 
for review? At which point it could be declined, or maybe 
approved again. Could you address the financing possibilities 
that that will affect?
    Mr. Fry. I am not sure that I understand that question.
    Mr. Pearce. OK, that is a little out of your area. But 
just, if you have--mines are basically the same sort of 
financial structure. And I am asking a permit process. Now, I 
know you are not hardrock mine, you are a coal mine. But if a 
mine only had a window of three years, at which time it would 
have to come up for review for its permit again, I am asking is 
that going to be a process that the banks look on with favor? 
Or is that going to penalize you and give you a higher rate, or 
maybe limit capital?
    Mr. Fry. I would certainly guess the latter. And as you 
gentlemen know, mining is very capital-intensive; you have to 
lay out a lot of money at the front end of it. And regulatory 
uncertainty certainly is a big issue.
    Mr. Pearce. Mr. Raney--this will be my last question, Mr. 
Chairman. Mr. Raney, you have mentioned the lawsuit after, suit 
after suit that threatened your jobs. Do you find, when those 
suits are filed, that they have a justifiable outcome? Or do 
they appear to be simply a stalling mechanism, or may be a 
mechanism to try to stop the mine from actually going forward? 
Or can you, even if you disagree with it, look at the suit and 
say well, it is not my approach, but I understand what they are 
getting at; or do they appear to be frivolous?
    Mr. Raney. In my opinion, they are frivolous. They file the 
same suit after, and after they just get a little different 
approach to it, file the same suit. We go to Richmond, to the 
Fourth Circuit. Thank goodness the Fourth Circuit overturns it. 
And we made two or three trips down there already; they have 
done that. And we come back, and then we are confronted with 
another suit very similar to, questioning the very same thing. 
Find another judge, and you get the decision at the District 
Court level that just absolutely paralyzes the permitting 
process. And not so much at the state level with the SMCRA 
permits, but it just paralyzes the issuance of the Corps of 
Engineer 404 permits and the Clean Water Act.
    So it is that almost, you don't see the effect of it, but 
what happens is they are just tying the hands and the minds of 
those permit-issuing authorities with the confusion that is 
created in the courts. I sort of think that they are frivolous, 
and I think they are an effort to delay, and just trying to 
disrupt the coal industry of particularly our state. And they 
reach across state lines every once in a while and do the same 
thing to Kentucky.
    Mr. Pearce. I find the same thing in New Mexico, not 
necessarily with miners, but with forestlands or whatever, that 
the same objection is filed over and over. So if they were 
trying to find factual evidence or an answer, they would get 
that and then say OK, we disagree with the opinion. But instead 
it is filed and filed, and then injunctions or whatever.
    Thank you again. A great panel, and a great hearing, Mr. 
Chairman. Thank you very much.
    The Chairman. Let me say to the gentleman from New Mexico, 
if he was referring to my hardrock mining law reform bill, is 
that the bill----
    Mr. Pearce. Is this yours, Mr. Chairman?
    The Chairman. That is my name on it, yes.
    Mr. Pearce. Oh. I was just reading it in big print, sir.
    The Chairman. Well, read the fine print there; you will 
find my name on it.
    Mr. Pearce. OK.
    The Chairman. If you are referring to the three-year 
permitting review process, I would just remind the gentleman we 
in this body are up for review every two years.
    Mr. Pearce. We also don't finance, Mr. Chairman.
    The Chairman. Oh, we spend a lot of finances every two 
years.
    Let me say to the panel and to all the witnesses that were 
before us today, we certainly appreciate you being with us. 
There were a number of issues discussed, specifically the Clean 
Water Act, for example, concern to many in the industry, an 
issue over which this committee does not have jurisdiction. We 
discussed CTL today, as much as this gentleman is in favor of 
it, again an issue over which this full committee has no 
jurisdiction, but rather, other committees of the Congress.
    I am going to ask the panel in toto, give them a chance, 
that is, since they have been so patient with us, and one of 
the advantages, I guess you might say, of being last in a long 
day, is I am going to give each of you a chance to respond to 
anything you have heard during the course of the day. I believe 
most of you, if not all of you, have been here during the 
course of the day. Have a free shot at anybody. Go ahead.
    Mr. Loomis. Well, you know, my daddy said not to say 
anything bad about people if you can't say something good.
    You know, one thing I want, to invite the gentleman from 
New Mexico to come see some reclamation. I know you, as a 
panel, were invited to come see what Attorney Lovett suggested 
you need to come look at. And you, Mr. Chairman, have, of 
course, many times been on reclamation sites in West Virginia. 
And I would encourage you to bring any member of the Committee, 
all of the Committee, and certainly the staff, to come and look 
at West Virginia, and see what we are truly doing. We are very 
proud of it, and the people that are there every day doing it 
are very proud of it, as you well know, Mr. Chairman.
    But to you, sir, from New Mexico, I would certainly invite 
you to West Virginia and to Kentucky. I think any of the states 
that I mentioned would welcome you to come and look, and see 
that we are proudly mining coal, and meeting, we think, the 
energy needs of this country in a very professional manner.
    I notice, it is not up there now, but you, Mr. Chairman, 
are aware of Twisted Gun. And I promised the Buckskin Council 
that I would let you know today that the Buckskin Council is 
conducting their annual fund-raising golf tournament on Twisted 
Gun today in Mingo County, which is just full of valley fills, 
and happens to be one of those dreaded mountaintop operations 
that other testifiers have spoken so harshly about today.
    But I don't have any particular problem with anybody that 
appeared here today. They have all got their own opinions. We 
appreciate very much the opportunity, and we like to parade 
what is going on in West Virginia because we are very, very 
proud of it. So thank you, Mr. Chairman.
    The Chairman. Thank you, Bill. Anybody else?
    Mr. Quinn. If I could just supply the Committee----
    The Chairman. Yes, Hal.
    Mr. Quinn.--with some facts. Congressman Pearce was asking 
some questions at the outset of the hearing this morning.
    The amount of the production annually is about 1.2 billion 
tons. You wanted to know how many miners; I think Mr. Roberts 
answered that correctly. But the full employment directly is 
about 123,000 nationwide. Average wages annually is about 
$64,000 for a coal miner, and we know many a coal miner who 
will make plenty more than that once they do their overtime. It 
could go up to 80 or more thousand dollars a year.
    And the value of our product is about $28 to $30 billion 
annually, not including once it has passed upstream through 
electricity.
    Mr. Chairman and Congressman Pearce, I would also like to 
say a word. Thanks for your support on issues related to the 
development of a coal-to-liquids industry. And just to mention 
that, as you know, Mr. Chairman, there will be a symposium that 
we are co-sponsoring with other groups in your district next 
month.
    And thank you for your invitation today again.
    The Chairman. Thank you, Hal.
    Mr. Loomis. Mr. Chairman, I would echo what Mr. Raney said, 
too. We would welcome you and your committee to come to Wyoming 
and look at some of the reclamation that we have been able to 
accomplish, some of the wildlife habitat that we have been able 
to create.
    I grew up on a ranch and hated prairie dogs all my life. 
But one of the crowning achievement of one of the mines is 
reestablishment of a prairie dog colony on some of their 
reclamation, and creating habitat for the mountain plover, 
which is a threatened species. So we are doing some innovative 
things there that the industry is very proud of, and we would 
love to show it off to you.
    Mr. Fry. I am going to pass. Thank you very much.
    The Chairman. Gentlemen, thank you. Thank you for your 
patience and being with us today.
    As I conclude this oversight hearing on the 30th 
anniversary of SMCRA, let me say, Moe, this one is for you. 
Committee adjourned.
    [Whereupon, at 3:12 p.m., the Committee was adjourned.]

    [Additional material submitted for the record follows:]

    [A letter submitted for the record by Cathie Bird, Chair, 
Save Our Cumberland Mountains, on behalf of the members of SOCM 
Stripmine Issues Committee, follows:]

SAVE OUR CUMBERLAND MAMMALS
224 S. Main Street, Suite 1 * PO Box 479
Salt Lake City, TN 37769 * http://www.socm.org
865-426-9455 * FAX 865-426-9289

August 3rd, 2007

Jim Zoia, Staff Director
Committee on Natural Resources
U.S. House of Representatives
1324 Longworth House Office Building
Washington, DC 20515
http://www.house.gov/resources

Dear Mr. Zoia and Members of the Committee,

    Thank you for the opportunity to comment on SMCRA at its 30-year 
anniversary. A reading of the original SMCRA legislation makes it clear 
that coal extraction for U.S. energy supply was, at the time, to be 
supported by the Act. It is interesting to note that the majority of 
paragraphs specify the intention of Congress to protect citizens and 
the environment from known effects of surface mining that disturb 
surface areas in ways that ``burden and adversely affect commerce and 
the public welfare'' [30 USC 1201 Sec. 201(c)].
    Save Our Cumberland Mountains (SOCM), a member-run organization 
that encourages civic involvement among Tennessee people so that they 
may have a greater voice in determining their future, was very involved 
with other grassroots organizations in the initial SMCRA legislative 
process. When the Act became law in 1977, SOCM members hoped that it 
would bring destructive surface mining practices under control in their 
Appalachian homelands, but realized that coalfield citizens would have 
to stay involved and alert to potential shortcomings of the Act. At 
this 30th Anniversary of SMCRA, many coalfield residents are not secure 
in the belief that their homes, communities and mountains are being 
protected as this law envisioned.
Problems with enforcement
    SMCRA was designed to protect private property from water 
pollution, blasting, and other damage by surface mining, and to give 
citizens a way to seek recourse if such damage occurred. In too many 
cases this is not happening. People are left with cracked foundations, 
caked coal dust on their houses, and hot and cold running black sludge 
from their faucets. A recent study of violations and complaints about 
Zeb Mountain Mine in Campbell and Scott counties in Tennessee revealed 
that blasting has caused thousands of dollars in damage to several 
homes. In one of these homes, the water is no longer fit to drink. 
Citizens are given ridiculous explanations for their cracked walls such 
as ``closing windows, rocking in a rocking chair or jumping rope.'' The 
residents get little help from OSM enforcement personnel who are 
supposed to be protecting them, and. have had to shoulder the burden of 
responsibility for fixing the damage. We hope that members of the 
Committee will be as outraged as we are here in the coalfields, and 
that you will investigate why such things are still happening under 
SMCRA 3D-years after its adoption. Unfortunately, enforcement problems 
also allow damage to water, wildlife and forest resources.
    According to a SOCM enforcement case study at Zeb Mountain, located 
in Elk Valley, 1N. From the start of surface mining in 2003 to the 
present, a total of 31 violations have been issued. For seven of the 
violations, the federal office of surface mining has granted 
extensions. Of the seven violations, four of those violations had over 
12 extensions translating into 3-years of extension per violation. This 
is of grave concern to citizens who's homes and water have been damaged 
as a result of these violations.
    OSM has granted large numbers of numerous violations incurred by 
coal operators. In addition, the mine operator has filed many permit 
revisions, some of which were intended to fix situations created by 
illegal operations at the mine, In other words, it is commonplace for 
mining companies to mine outside the parameters of their permits, and 
then retroactively allow for a permit revision with little to no 
repercussions. These extensions by OSM and foot-dragging on required 
revision data by the operator have allowed environmental damage to 
remain unabated several years after the fact. Again, we would hope that 
the Committee would be outraged that this is happening 30 years post-
SMCRA.
Antiquated programmatic EIS
    OSM, the regulatory authority in the non-primacy state of 
Tennessee, still measures its assessments of surface mining impacts on 
the environment with a document that was adopted in 1985. Since then a 
number of changes have influenced surface mining practices, and a large 
body of scientific research has informed state-of-the-art consensus on 
the impact of mining activity on headwater streams, and even entire 
regions downstream from major coal-producing states. It is time for 
this PElS to be updated, an opinion supported by SOCM as well as the 
Tennessee Department of Environment and Conservation. Currently the 
Department of Interior has, on two occasions, denied requests from the 
State of Tennessee to revise the state's 1985 programmatic EIS.
Destruction of headwater streams by mountaintop mining
    The arrival of mountaintop mining to the coal industry's repertoire 
of extraction techniques has drastically changed the skyline of the 
Appalachians, it is estimated that over 2500 peaks in Appalachia have 
significantly altered forever as a result of mountaintop mining. In 
addition to its assaults on the homeland security of coalfield 
residents, this practice has eliminated hundreds of ephemeral, 
intermittent and perennial streams whose functioning is critical to 
water quality downstream, far from the .uplands where these 
environmental assaults are committed. The federal government's own 
Programmatic Mountaintop Removal and Valley Fill EIS speaks to the 
horrendous impacts of this practice, even though more conclusive 
research was aborted when the inconvenient truth of headwater losses 
began to emerge. We fail to understand why this destructive practice is 
still allowed. We urge the Committee to consider abolishing any mining 
practices that dumps mining wastes into streams, allows valley fills, 
or mines through streams.
Inadequate assessment of cumulative impacts
    In reviewing mining permit applications we are consistently 
disappointed in the inadequate attention to cumulative environmental 
impacts of surface mining, especially mountaintop mining. OSM has 
failed to protect cumulative hydrologic integrity of the Appalachian 
coalfields by allowing valley fills that buried more than 1200 miles of 
streams and 1.5 million acres of forest vegetation that is inextricably 
involved in maintaining hydrologic balance. These activities have 
destroyed the functioning of whole aquatic ecosystems, including 
destruction of nutrient cycling services that headwater streams provide 
for downstream fisheries and other aquatic and riparian species.
Problems with public participation
    Public participation in the control of surface mining is a core 
element of SMCRA, and, at the time, offered more opportunities for 
public involvement than perhaps any other environmental legislation. 
Under SMCRA, citizens are allowed to comment on proposed regulations, 
to obtain judicial review of final rulemaking, to comment on proposed 
state program provisions and obtain judicial review of decisions to 
approve them. They can review (and get copies of) permit applications, 
inspection materials, and other information held by the regulatory 
authority. Citizens can comment on permit applications and request 
administrative and judicial review of permitting decisions. If SMCRA is 
violated, coalfield citizens can initiate complaints to federal 
authorities and accompany inspectors who investigate their complaints. 
If not satisfied with inspection results, citizens can call for a 
review of inspection and enforcement decisions. Until court decisions 
in the past four years discouraged such, citizens were allowed to bring 
civil actions to force coal operators to obey the law or to make 
regulatory officials do their jobs under the law.
    Citizen participation since adoption of SMCRA has helped create a 
better system than the one originally on the books. But those of us on 
the front lines 30 years later still encounter delays in getting access 
to material, in some cases being required to file for information under 
FOIA. People seeking reparation for damage to their homes or water 
supplies have to negotiate the system with little assistance, and the 
results (as noted above) are often unjust and burdensome. SOCM and 
other coalfield groups have sought legal relief from intolerable 
environmental damage through NEPA and the Clean Water Act when it 
appears that no avenue is open via SMCRA. We would suggest that this in 
itself is a red flag and that the Committee needs to investigate how 
user-friendly SMCRA really is from the point of view of coalfield 
residents.
Coal: Poverty or Prosperity?
    In the past, rural Appalachian communities were dependent on coal 
mining for jobs, and often dependent on the coal companies for 
virtually all economic activity. The advent of mountaintop removal 
mining has shifted the equation. Mountaintop removal is a mining 
technique designed, from the very start, to take the labor force out of 
the mining operation. What used to take hundreds of miners employed for 
decades, now takes a half dozen heavy equipment operators and blasting 
technicians a couple of years. According to the bureau of labor 
statistics, in the early 1950's there were between 125,000 and 145,000 
miners employed in West Virginia; in 2004 there were just over 16,000. 
During that time, coal production has increased. This decline in the 
workforce continues today. Draglines and other advances in technology 
resulted in a 29% decline in mining jobs during 1987 and 1997, while 
coal production rose 32 percent during the same period.
    All of this translates into profits for mining companies, all of 
which are headquartered outside of the region. Massey Energy, for 
example, is headquartered in Richmond, Virginia. As of January 31,2007, 
Massey Energy operated 33 underground mines and 11 surface mines in 
West Virginia, Kentucky, and Virginia. In 2006 Massey earned $2.14 
billion in revenue, and CEO Don Blankenship received more than $10 
million in compensation. Arch Coal, based in St. Louis, operates 21 
mines in Appalachia and the West. In 2006, Arch brought in $2.5 billion 
in revenue. Peabody, also based in St. Louis, operates 40 coal mines in 
the U.S., Australia and Venezuela, and brought in $5.22 billion in 
revenues in 2006. A relatively new company, founded in 2002, Alpha 
Resources, has 27 active ``surface'' mines in Appalachia, as well as 
underground mines and road building operations to facilitate moving the 
coal out. Alpha is based in Abingdon, Virginia and brought in $1.96 
billion in 2006 -all based on Appalachian coal. Despite these profits, 
particularly the wealth accruing to top executives, coal companies are 
quick to label property damage resulting from their activities ``an act 
of God,'' thus avoiding any financial responsibility to the people who 
suffer the consequences.
    To add insult to injury, in addition to the loss of jobs and 
exportation of profits, mountaintop removal effectively destroys the 
potential for many alternative economic growth options. In North 
Carolina and Tennessee mountain counties without coal mining, tourism 
income far outpaces the coal income in coal counties -an option 
unavailable to counties whose mountains and streams have been 
destroyed. Traditional wild ginseng gathering and small-scale 
agriculture are also obliterated when mountains are blown up. Not only 
must mountaintop removal be stopped, aggressive alternative, 
sustainable economic development options must be pursued. People of the 
coalfields need alternative means of livelihood that do not leave them 
dependent on the very coal companies that are destroying their 
communities, health and the land they need for long-term survival.
    History demonstrates that long-term sustainable economic well-being 
eludes local economies tied to the one-time windfall of resource 
extraction, particularly coal. Coal producing counties are among the 
poorest in the nation. In a review of more than 300 studies of the 
economic impacts of mining industries on non-metropolitan communities, 
university researchers found that .roughly half of all published 
findings indicate negative economic outcomes in mining communities and 
the remaining half are split roughly evenly between positive and 
neutral/indeterminate outcomes. Positive outcomes are also more likely 
to come from the Western United States. Moreover, over half of all 
positive findings come from years prior to 1982. In virtually all other 
categories, the majority of the findings were negative. \1\
-----------------------------------------------------------------------
    \1\ Freudenburg, William, University of Wisconsin-Madison, and 
Wilson, Lisa, University of California Santa Barbara, ``Mining the 
Data: Analyzing the Economic Implications of Mining for Non-
Metropolitan Regions,'' Sociological Inquiry, Vol. 72, No. 4, Fall 
2002.
-----------------------------------------------------------------------
    Given both the negative economic track record and the severe 
ecological impacts of surface mining, it is critical that government 
fully evaluate the expected local benefits and local costs to determine 
if mining in fact brings sufficient benefits to merit the decision to 
approve a mine.
The future of coal as a workable energy source
    As discussion of a climate legislation moves onto the national 
political agenda, citizens groups-particularly citizens who have 
generations of experience with the true costs of coal are working to 
frame extraction issues as part of the larger debate. The SOCM 
Stripmine Issues Committee believes that those coalfield communities 
where coal is currently or has been extracted deserve the right to 
secure, sustainable jobs and energy sources. The committee further 
believes that while coal has provided a source of income and 
opportunity for generations, the price of coal does not expose the true 
costs of damage to the land, water and people of Tennessee. 
Additionally, as stated above, it is strongly held that failure of 
enforcement for thirty years has shown a not only a weak link in the 
system, but that it is also evidenced, that mountaintop mining can not 
occur without immensely devastating impacts to coalfield communities.
    The SOCM Stripmine Issues committee concludes that ``alternative'' 
coal technologies--such as so called ``clean coal'', IGCC, and coal to 
liquids--are incompatible with a sustainable federal energy policy and 
a step backwards for the coalfield communities of Tennessee. Therefore 
every possible immediate action must be taken by the House Natural 
Resource Committee, in their review of SMCRA, to ensure that 
mountaintop mining and other forms of steep slope mining be immediately 
abolished, and more stringent enforcement be put in place.
    Cumulatively, while we agree that some things are working, we also 
harbor a fair amount of discontent with how SMCRA is actually 
functioning, especially since the 25 th anniversary review in 2002. We 
believe that coalfield citizens have gone above and beyond the call of 
duty to keep OSM and coal companies true to the intent of SMCRA. There 
are many of us here in the coalfields who would be glad to share our 
experiences in more detail. We are interested to see how the Committee 
responds to our concerns.

Sincerely,

Cathie Bird, Chair
For the members of the SOCM Stripmine Issues Committee
                                 ______
                                 
    [A letter submitted for the record by Joyce Blumenshine, 
Peoria, Illinois, follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    [A letter submitted for the record by Julia Bonds, Rock 
Creek, West Virginia, follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    [A letter and exhibits submitted for the record by Beverly 
Braverman, Executive Director, Mountain Watershed Association, 
dated August 3, 2007, follow:]

                     Mountain Watershed Association

                              P.O. Box 408

                           Melcroft, PA 15462

August 3, 2007

Chairman Nick Rahall
House Natural Resources Committee
1324 Longworth House Office Building
Washington, D.C. 20515

Dear Chairman Rahall:

    We appreciate the opportunity to submit formal comments for 
inclusion in the record in response to the House Natural Resources 
Committee hearing concerning the SMCRA held by you on July 25, 2007.
    White SMCRA was written to answer the promise of protection in the 
coalfields, implementation has fallen short. Some of the successes have 
been restoration of some abandoned mine lands, provision for running 
state programs under Title IV, and Appalachian Clean Streams Initiative 
grants to watershed groups doing reclamation in their communities.
    These successes, however, are overshadowed by the lack of 
enforcement of the purpose and intent of the Act. The gradual erosion 
of the Act by State programs refusing to follow the laws set forth 
about blasting, strip mining, and public participation has created a 
situation where those who supported passage barely recognize ``the 
promise'' they were given in the Rose Garden those many years ago.
    The lack of implementation and enforcement of SMCRA by the federal 
and state government has seriously weakened the needed benefits and 
controls that led to its passage in the first place. The dearth of 
oversight of state promulgated coal-friendly regulations that fly in 
the face of the law has contributed to the failure of the Act to 
protect our environment, our quality of life, and our communities.
    Enclosed for inclusion in the record is a booklet (Exhibit A) 
called the True. Cost of Coal, which shows the degradation and 
destruction resulting from weak enforcement of SMCRA and passage of 
regulations that add to the emasculation of the law. This pictorial 
record includes subsided streambeds, which have occurred as a result of 
surface-effects of underground mining, an area that SMCRA was meant to 
control. Also, included are pictures of mountain top removal, which is 
totally outside the realm of the law. Many valley fills are in complete 
violation of the Act. Home, highway, water line impacts caused by 
longwall mining are also surface effects of underground mining that the 
Act was meant to control.
    In addition to these surface impacts of underground mining, OSM has 
allowed the destruction of homes on the Historic Registry. The tragic 
story of the Thralls House is a shameful abrogation of federal control 
over the coal industry.
    The promulgation of coal-friendly regulations have upheld the 
further weakening of the Act. States like Pennsylvania now permit the 
allowance of unacceptable mitigation of surface effects, such as in 
Exhibit B, a picture of a dry streambed and pipes carrying the water, 
will not be overthrown through federal oversight under SMCRA. So far, 
they have been correct in this analysis. OSMRE has been MIA.
    There is a belief that citizens in the coalfields can bear the 
burden of continued damage to their homes 'from strip mining. SMCRA was 
passed in major part to shift the burden of coal mining from citizens 
living in the coalfields to the people responsible for the burden and 
profiting from the burden, the coal companies. This burden has not been 
shifted. Living in coalfield communities means that any day a permit 
may be issued beside your home that will cause excessive amounts of 
dust and noise to become part of your daily life. It means that any 
day, you may wake up and not have water sufficient in quantity and 
quality to get you through the day OR you may not have water at all. 
You are then at the mercy of the coal company to provide you with this 
most precious resource.
    Blasting damage continues to plague citizens despite the position 
in SMCRA that NO DAMAGE, NOT EVEN COSMETIC DAMAGE, is to be allowed. In 
Pennsylvania you are expected to believe that blasting did not cause 
the damage to your home despite the reality that the damage was not 
there prior to mining as shown in your pre-blast survey but is there in 
the post blast survey--You are told that the problem of blasting damage 
is a civil matter between the homeowner and the coal company. The PA 
Department of Environmental Protection states ``it has no authority to 
require the company to compensate the homeowner for damage.'' Where is 
federal oversight under SMCRA at this point? The burden of blasting 
damage caused by strip mining has not been lifted from the citizens of 
the coalfields. Most of the communities where mining takes place are 
economically struggling and underserved. To expect the people living 
there to hire an attorney to protect their interests or pursue a 
lawsuit for damages from blasting is totally unacceptable and 
unreasonable. They cannot afford to hire an attorney. But, then, that 
is the idea, is it not?
    Another purpose of SMCRA was to improve disbursement of 
information, particularly accessibility of permit applications. This 
would be a great idea if OSM's website were not opaque, that is, if it 
was up to date with pertinent information. Further, if OSM oversaw the 
state's provision of information to citizens, it would see that they 
are being charged for copies at a high rate; permit applications are 
deemed complete even if they are only administratively complete, not 
technically complete; and permit information is submitted in a 
piecemeal fashion, which makes citizen review an ordeal.
    Inadequate bonding is another ongoing nightmare for communities. On 
August 2, 2007 the United States Court of Appeals for the Third Circuit 
gave a victory to Pennsylvania's environment and economy by ruling in 
favor of a coalition represented by Citizens for Pennsylvania's Future 
(PennFuture) that the Commonwealth of Pennsylvania must require the 
state's coal operators to post bonds to cover the entire cost of 
environmental cleanup. The case began in December 2003 FOR THE SECOND 
TIME, when PennFuture filed a lawsuit on behalf of Pennsylvania 
Federation of Sportsmen's Clubs, Pennsylvania Council of Trout 
Unlimited (formerly PA Trout), the Pennsylvania Chapter of the Sierra 
Club, the Tri-State Citizens Mining Network (now known as the Center 
for Coalfield Justice) and the Mountain Watershed Association against 
both the federal and state governments for their failure to protect 
Pennsylvania's environment from damage caused by mining operations, 
including acid stream pollution.
    I am enclosing this decision (Exhibit C), which indicates another 
serious problem with how SMCRA is enforced. It is disheartening that 
our government officials had to be taken to court and forced to do the 
right thing. With an existing $15 billion backlog of old mine damage, 
it is crystal clear we need to take action to stop the problem from 
getting any worse. But the state adopted policies that slashed the 
amount of revenue generated by its reclamation fee, and has even 
proposed to eliminate that fee entirely. The court's ruling makes clear 
that those decisions took the state in the wrong direction.
    We thought the recognition of citizen suit provisions and public 
participation by Congress was a-great step forward. But, how much 
damage has gone uncorrected in the years our bonding suit struggled 
through the courts? It certainly is much better for citizens and the 
environment if the law is enforced in the first place.
    Public participation provisions in the Act have been emasculated by 
state practice. Attached is an exchange of letters between citizens and 
the PA Department of Environmental Protection concerning the practice 
of holding public meetings in the middle of the day when most working 
citizens cannot attend. (Exhibit D) Further, public notice has become a 
farce as notices are placed in papers where few people in the proposed 
affected area are among the paper's circulation, the meeting is held in 
a neighboring township and the township supervisors of the proposed 
affected township are not notified. The request for evening meetings 
(even those requests made by the township supervisors) are rejected by 
the state regulatory agency based according to them on budgetary 
constraints. The Congressional provision for public participation has 
fallen victim to the budgetary concerns of the state. Somehow, I do not 
think that is what Congress had in mind when they provided for this 
right.
    There are numerous other concerns. However, I am certain that my 
comments are not the only ones that will be submitted for inclusion in 
this record. I leave it to others to continue my lament.

Very truly yours,

Beverly Braverman
Executive Director, Mountain Watershed Association
Home of the Youghiogheny Riverkeeper
Member, WaterkeeperTM Alliance Chair,
Center for Coalfield Justice Pennsylvania Board Representative,
Citizens Coal Council
(724) 455-4200
on behalf of:

Jim Kleissler, Executive Director,
Center for Coalfield Justice
(724) 229-3550

Krissy Kasserman
Youghiogheny Riverkeeper
(724) 455-4200
                                 ______
 
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    [A letter submitted for the record by Vernon Haltom, Co-
Director, Coal River Mountain Watch, dated August 6, 2007, 
follows:]

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    [A letter submitted for the record by Robert L. Johnson, 
PE, Collinsville, Illinois, dated August 3, 2007, follows:]

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    [A letter and attachments submitted for the record by 
Clarence Loucks, Hillsboro, Illinois, follow:]

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    [A letter submitted for the record by David Webb, Naoma, 
West Virginia, dated August 4, 2007, follows:]

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    [Comments dated August 1, 2007, submitted for the record by 
Ronald E. Yarbrough, Ph.D., PG, Professor Emeritus, Earth 
Sciences, Southern Illinois University, follow:]

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