[Senate Hearing 110-272]
[From the U.S. Government Printing Office]



                                                        S. Hrg. 110-272
 
                   HARD-ROCK MINING ON FEDERAL LANDS

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   TO

         RECEIVE TESTIMONY ON HARD-ROCK MINING ON FEDERAL LANDS

                               __________

                           SEPTEMBER 27, 2007


                       Printed for the use of the
               Committee on Energy and Natural Resources



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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

DANIEL K. AKAKA, Hawaii              PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota        LARRY E. CRAIG, Idaho
RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           BOB CORKER, Tennessee
KEN SALAZAR, Colorado                JOHN BARRASSO, Wyoming
ROBERT MENENDEZ, New Jersey          JEFF SESSIONS, Alabama
BLANCHE L. LINCOLN, Arkansas         GORDON H. SMITH, Oregon
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
JON TESTER, Montana                  MEL MARTINEZ, Florida

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
              Frank Macchiarola, Republican Staff Director
             Judith K. Pensabene, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Barrasso, Hon. John, U.S. Senator From Wyoming...................     7
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Butler, Jim, Attorney, Parsons Behle & Larimer, Salt Lake City, 
  UT.............................................................     8
Craig, Hon. Larry E., U.S. Senator From Idaho....................     2
Domenici, Hon. Pete V., U.S. Senator From New Mexico.............     4
Horwitt, Dusty, Public Lands Analyst, Environmental Working Group    44
Leshy, John D., Harry D. Sunderland Distinguished Professor of 
  Law, University of California, Hastings College of the Law, San 
  Francisco, CA..................................................    17
Salazar, Hon. Ken, U.S. Senator From Colorado....................     5
Snider, Tim, President and Chief Operating Officer, Freeport 
  McMoran Copper & Gold, Representing the National Mining 
  Association, Phoenix, AZ.......................................    39

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    57

                              Appendix II

Additional material submitted for the record.....................    69


                   HARD-ROCK MINING ON FEDERAL LANDS

                              ----------                             


                      THURSDAY, SEPTEMBER 27, 2007

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. Why don't we go ahead and start the hearing. 
Thank you all for being here. This hearing is in regards to 
mining on Federal lands, a topic of interest to me, of course, 
because of the prevalence of mining in New Mexico and 
throughout the West.
    The mining industry plays an important role in our country. 
It provides jobs, it fuels local economies, it produces raw 
materials for industry. It also contributes, substantially, to 
our national security.
    At the same time, the mining industry has been subjected to 
criticism, on both fiscal and environmental grounds. From my 
perspective at least, some of that problem perhaps is a result 
of the Mining Law of 1872 and our failure to do anything to 
change that law in the last century and more.
    Efforts to comprehensively reform the mining law have been 
ongoing, literally, for decades. Results have been elusive. 
Congress came close to enacting comprehensive reform in 1994. 
Congress has enacted moratoria on patent issuance, and has 
imposed claim maintenance fees through the appropriations 
process.
    However, the problems with the Mining Law and criticism of 
its fiscal implications continue. The failure to collect any 
payment on hard-rock mineral production from Federal lands is a 
source of concern as is the continuation on the books of the 
patent system, under which titles to Federal lands can be 
conveyed for $2.50 to $5 per acre.
    Also, there are those who argue that we must take 
additional steps to ensure that mining operations are conducted 
in an environmentally sound fashion. I understand that there 
may be renewed interest on the part of many, both in the 
industry and in the environmental community, in taking a 
serious look at reforming the Mining Law. In fact, there are 
growing number who say that this Congress is the time to 
achieve this long-awaited reform.
    This is the first hearing before the committee in this 
Congress to address the important topic. We've asked two legal 
experts to testify, to help define and focus the legal issues 
related to mining law reform, that would need to be addressed 
in any reform legislation. We will also hear from a 
representative of the mining industry and a representative of 
the environmental community. I look forward to hearing from the 
witnesses.
    I know Senator Domenici was delayed a few minutes and is on 
his way, but let me just see if Senator Craig was prepared to 
make a short opening statement on his behalf, and then we'll go 
to the witnesses.

        STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR 
                           FROM IDAHO

    Senator Craig. Mr. Chairman, I am prepared to make a 
statement. I'll certainly let Senator Domenici speak for 
himself, as it relates to this issue.
    As you have said, we have attempted to visit reform of the 
1872 Mining Law a good number of times over the years. I've 
been with you and Pete and a good many others in that effort. 
We've not been successful for a variety of reasons.
    Clearly, during that time, some significant things have 
happened. Issues that nag us, as it relates to mining, are 
still out there. But America has also grown increasingly 
dependant upon minerals and mineral resources that no longer we 
produce. You know, whether it's, of course, the cars we drive 
and the catalytic converters or whether it's the 
pharmaceuticals that we use, minerals and metals, to our 
economy, are as or more important today than they have ever 
been.
    I once heard the argument, ``Oh, as we move into a high-
tech economy, we certainly don't need to worry about minerals 
or metals.'' Quite the opposite is true. In this great time 
stretch that we've been involved with the 1872 Mining Law, and 
looking at its realities versus its myths--and there are myths 
versus realities with it--silver no longer is a numismatic 
metal. It's now an industrial metal, used in the high-tech 
industry and used in ways that are critical. Now, as the world 
economy emerges, in 2006, U.S. metal mines produced $23.5 
billion worth of metal ores and generated 170,000 jobs. In 
every community, miners are paid more, paid well, have health 
benefits, than almost any other class of worker. That has been 
historically true.
    So those 170,000 jobs remain very, very important jobs to 
this economy and to the small rural communities often times 
where the metal resource is, that that miner and that company 
that he works for are working on. So this--this remains 
something that you just don't sweep under the rug and it ought 
to remain something that we ought not intentionally handicap.
    At the same time, while one, some would argue, ``Gee whiz, 
we're operating off of a law that was crafted in 1872 for the 
purpose of property and discovery and ownership, that helped 
finance mining operations?'' Let's also remember that that 
mining operation of today and that mining plan that must be 
submitted today, is subject to the Clean Air Act, and NEPA, and 
FLIPA, and all of the other environmental laws that are 
appropriate, every mining company must apply to today. That's 
part of a mining plan. That's part of signing off on a mining 
plan to allow that kind of operation.
    What we've also found, is that we have made it so 
difficult, so complicated to startup a new discovery on public 
lands, that unless you are the big boys, the very deep-pocketed 
of the industry, you probably will not get that kind of 
operation started.
    Lastly, let me say, Mr. Chairman, I've changed over time, 
the industry has changed, we've all changed. Idaho's no longer 
the dominant mining State that it was, but mining remains 
important to Idaho. Here's a front page of USAToday. It says, 
``Which State has the fastest growing economy?'' It's Idaho, 
thriving quietly. The picture is the heart of the old Coeur 
d'Alene mining district, which was the lead silver, lead, zinc 
operators in the country when I first came to Congress. There 
was no operation bigger in the country, other than the copper 
of Arizona, and some of the phosphates around the country.
    But having said that, when we talk about public lands and 
public land resources and the effective management of them, use 
of them, conservation of them, and preservation of them--when 
you're cutting a log on public lands, you pay a fee. When 
you're grazing on public lands, you pay a fee. When you're 
drilling on public lands, you pay a fee. I believe the mining 
industry ought to be paying a royalty.
    But as you know, Mr. Chairman, it was the debate over how 
you apply a royalty, at what point. The 8 percent net smelter 
return royalty doesn't mean anything if there isn't an industry 
to apply it to. It is so easy to move offshore today, because 
in more instances the availability at less cost of the resource 
is offshore instead of onshore. Because of either limited 
access and/or costs that are related.
    Secondly, while patenting may be the practice of the past, 
the investment longevity is not. In order for the industry to 
continue developing its resources and its investments, we have 
to have stable, long-lasting environments in which those 
investments can come about.
    Our world has changed, our environmental concerns are real, 
the industry knows it, and over the last two decades, many of 
our mining industries are absolutely picture book perfect as 
you can be for an industry that disturbs the surface, that 
disturbs the undersurface, that processes, that uses chemicals, 
and all of those kinds of things to apply.
    We know how important mining is to our country today and if 
we're going to remain, to some degree, flexible and 
independent; if we don't allow ourselves to walk down the road 
like we have with our hydrocarbons to a point where now we are 
trying to become independent, when we've become 60 percent 
dependant upon a very unfriendly world. We are now seeing 
petro-nationalism around the world that is restrictive to our 
accesses. Do we want to see, you know, mineral-nationalism? 
That says, ``No America, you're going to walk the tightrope. 
You're the big consumer, you're going to pay the price.''
    I hope if we go at reform of the 1872 Mining Law--and I'm 
certainly willing to help do that--that we do it in a 
responsible and comprehensive way that helps us recognize the 
importance of the industry to our economy, and that economy to 
the local and small communities that it most oftentimes serves.
    Thank you, Mr. Chairman.
    The Chairman. Thank you. We have four witnesses. We have 
five votes starting at 11 o'clock. So let me just see if other 
members want to make short statements here. If they do, I'm 
sure that I will certainly do that.
    Senator Domenici, did you wish to make a statement before 
we hear from witnesses?

   STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR FROM NEW 
                             MEXICO

    Senator Domenici. I want you to put my statement in the 
record, first.
    Then, I want to say that I am committed now, Mr. Chairman--
having talked with you briefly yesterday and with a number of 
members of the committee on both sides--I'm committed to strike 
out with you, in an effort to produce a bipartisan reform of 
this old Mining Law.
    We've done one piece of work that was needed by the 
country. It was big and tough and we did it on a bipartisan 
basis. There might be some that think I'm kidding, or that we 
can't do it. Not at all. I believe we can write a bipartisan 
bill, with you and I doing our share, and taking Senators with 
us that want to be meaningful participants. I think we can 
shake the country and shake the public domain and do something 
very positive for the country. I'm willing to try that.
    I thank you for your words yesterday afternoon late, when 
you welcomed that statement. Therefore, my substantive 
statement is not that relevant. The important thing is we're 
going to try to do better.
    Thank you.
    [The prepared statement of Senator Domenici follows:]

    Prepared Statement of Hon. Pete V. Domenici, U.S. Senator From 
                               New Mexico
    Good morning. Senator Bingaman, thank you for scheduling this 
hearing. The Mining Law of 1872 has stood for 135 years without 
significant alteration. Efforts to reform this law have a storied and, 
at times, contentious history. Throughout this period, however, there 
has been one constant: mining has remained of great importance to our 
nation and to my own home State of New Mexico.
    Today's conversation is a very important one, because I view this 
hearing as the first of several steps we need to take toward a 
bipartisan reform of the 1872 Mining Law. I have reached out to several 
of my colleagues to share my interest in undertaking the work needed to 
make reform a reality. This would not be the first time that we've 
considered changes to the Mining Law, but this time I would like to 
start with a clean slate. To do this, we must re-visit many issues 
related to the Mining Law, and I thank the witnesses for shouldering 
some of that burden.
    Senator Bingaman has laid out the major issues before us today. In 
the larger picture, there are some important things to keep in mind as 
well, and I would like to discuss them in the context of another issue 
that this Committee is certainly familiar with; energy.
    Trends in domestic minerals production are nearly identical to what 
we have seen of American energy resources in recent times. While our 
reliance on foreign sources of energy continues to increase, so too 
does our importation of foreign minerals. According to the U.S. 
Geologic Survey, in 2006, the U.S. met more than one third of its 
demand for 45 minerals through imports, and was 100% reliant upon 
imports for 17 of those 45. Americans spent nearly $177 billion on 
foreign minerals in 2006, a 28% increase from the previous year.
    Unlike energy resources, however, we do not have alternatives to 
the individual mineral commodities. For example, while gasoline can be 
augmented with domestic biofuels, the periodic table precludes us from 
seeking alternatives to aluminum, graphite, steel, or any other mineral 
commodity. It is for this reason that reform efforts must maintain, or 
increase, the viability of domestic minerals production.
    The impact of growth in developing countries on mineral prices is 
also comparable to the energy situation in which we find ourselves. 
Times are good for the minerals industry. Between 2005 and 2006, the 
value of minerals climbed roughly 18 percent, and spending on 
exploration worldwide topped $7 billion - a 40% increase over 2005.
    However, as I have previously noted, we find that domestic minerals 
exploration also mimics domestic energy trends. Had these increases in 
exploration occurred in 1993, the United States would have had a 20 
percent slice of the $7 billion dollar pie. Our country only managed to 
attract 8 percent of worldwide investment in 2006, however, despite 
having reserves of more commodity minerals than any other country in 
the world.
    Of course, there are also many differences between the state of 
domestic energy and the state of our mineral production. However, these 
differences are not positive developments--instead, they represent 
warning signs and the need for balanced reform. While there is a great 
deal of support for weaning ourselves off of fossil fuels, for 
instance, doing so with minerals is not only impractical, but likely 
counterproductive as well.
    Consider the fact that a hybrid vehicle on the road now uses twice 
as much copper as an S-U-V, or the importance of platinum to the next 
generation of clean, hydrogen fuel-cell vehicles. These concerns are 
compounded by the very difficult task of finding minerals in the first 
place.
    According to the National Academies of Science, ``only a very small 
portion of Earth's continental crust (less than 0.01%) contains 
economically viable mineral deposits.'' Even a brief review of the 
complexities related to minerals production makes clear that the task 
of reform is a complicated one.
    In considering changes to the Mining Law of 1872 we must balance 
these complexities with a number of priorities, including: a fair 
return to the taxpayer on American resources, providing miners with 
stable conditions to attract investment, efficient resource management 
to protect the environment, and ensuring the clean-up of abandoned 
mines in the U.S.
    I hope that we will hear from the witnesses their opinions on 
whether these objectives are being met. To the extent that these 
objectives are not being met, we welcome constructive recommendations 
on how the Committee might address these issues in a meaningful way.
    It is worth re-emphasizing that a robust, stable, domestic mining 
industry is extremely important to our economic security. By pursuing 
balanced reforms to the Mining Law in this Congress-a process which 
starts today, in this room-we will help ensure the vitality of this 
sector for many more years to come.

    The Chairman. Thank you very much. I do welcome the effort 
to come together around a joint piece of legislation we can 
move ahead with.
    Senator Salazar.

          STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR 
                         FROM COLORADO

    Senator Salazar. Thank you very much, Senator Bingaman. 
I'll put my statement in the record as well.
    I want to make just two quick comments not in my statement. 
The first is that I, too, look forward to working with you as 
Chairman and with Senator Domenici and other members of this 
committee, to see whether we can move comprehensive reform 
forward, with the 1872 Mining Law, that is thoughtful and that 
makes sense, both for mining on our public lands, as well as 
for protection of the environment.
    The second thing I want to say is that as part of this 
effort, I do hope we are able to address an age-old problem in 
the West. That's the age-old problem of abandoned mines, 
whether it's in New Mexico, Arizona, Idaho, or Colorado. It's a 
huge issue that's been unaddressed for a very, very long time.
    I had legislation last year, which we had hoped to be able 
to get through. Unfortunately, we were not able to get it 
through, but we've been working with the Western Governor's 
Association and others to try to see whether we could get Good 
Samaritan legislation through, and I'm hopeful that that is 
part of what we consider as we move forward with this.
    Thank you very much.
    [The prepared statement of Senator Salazar follows:]

   Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado
    Thank you Mr. Chairman and Ranking Member Domenici for holding 
today's important hearing on hard-rock mining issues. Hard-rock mining 
issues are particularly important in the Western United States. While 
much has changed in the West in the past 135 years, the Mining Law of 
1872 has remained essentially unchanged since it was passed. I look 
forward to hearing from our witnesses today about the issues they 
believe Congress should consider when looking at revisions to the 1872 
Mining Law.
    Today, however, I want to speak about an issue related to mining 
law reform that has been a top priority for me since I joined the 
Senate, Good Samaritan cleanups of abandoned hard-rock mining sites.
    The Western United States is pockmarked with old mines and mining 
residues. At these abandoned mines, there are frequently open shafts 
and dangerous structures that create real physical hazards to humans 
and wildlife. Earlier this month, a thirteen year old girl tragically 
died in Arizona when the all-terrain vehicle she was riding in fell 
through a brush-covered abandoned mine shaft.
    In addition to the hazards posed to humans, many of these sites 
continuously pollute the water, the land, and the air. Our rivers and 
streams suffer particularly from these old mines. Erosion and 
sedimentation, acid rock drainage, heavy metals leaching into streams, 
sulfide waste piles, contaminated soils, and improperly disposed mining 
processing chemicals are found at abandoned mine sites.
    The Environmental Protection Agency (EPA) estimates there are over 
half a million abandoned mines nationwide, most of which are former 
hard rock mines located in the western States. There is no single 
database that tracks these abandoned mines, and no consistent way of 
reporting them. Information gleaned from numerous state and federal 
databases show these abandoned mines are a problem in many western 
states. For example, there are estimated to be 100,000 abandoned mine 
sites in Arizona, 50,000 in Nevada, 22,000 in Colorado, and 20,000 in 
California, New Mexico and Utah. Clearly this is not a small problem.
    In many cases, no one alive is legally responsible for cleaning 
these sites. In other cases, those who are legally responsible lack the 
money or other resources necessary to clean them up, and the pollution 
continues.
    Fortunately, some people and some companies are willing to clean up 
mine sites in whole or in part, even though they are not legally 
responsible. These are Good Samaritans.
    They act for many reasons. Some are people who live nearby and 
suffer directly from the pollution. Others are companies that want to 
perform a service to the community and to address less fortunate 
aspects of the history of the mining industry.
    Unfortunately, though, our environmental laws create great risks of 
broad, long term, and very expensive liabilities for anyone who acts at 
a mine site, even if they act only as Good Samaritans. This problem 
understandably dissuades Good Samaritans from cleaning mine sites.
    In the 109th Congress, I introduced S. 1848, the Cleanup of 
Abandoned and Inactive Mines Act. My bill enjoyed strong bipartisan 
support and was reported favorably out of the Environment and Public 
Works Committee, but we were unable to overcome objections to the bill 
on the Senate floor. Since my bill was introduced, I am pleased to note 
that the Western Governors' Association has convened several 
stakeholder meetings to find common ground on important issues dealing 
with Good Samaritan cleanups including the scope of liability 
protection, cleanup standards, state program requirements, and 
financial assurances that would be required. I also am pleased to note 
that on June 6, 2007, the Environmental Protection Agency issued 
Interim Guiding Principles for Good Samaritan Projects at Orphan Mine 
Sites, and a model Good Samaritan Comfort/Status Letter and a model 
Good Samaritan Settlement Agreement and Order for Removal Actions at 
Orphan Mine Sites.
    I believe we are closer than we have ever been in the past to 
moving forward with Congressional action that will allow Good Samaritan 
cleanups to take place. I plan to reintroduce a bill in this session of 
Congress that builds upon the work of the Western Governors' 
Association, the EPA, and the progress we made on S. 1848 in the last 
Congress. Good Samaritan cleanups are the right thing to do, and I look 
forward to working with my colleagues to ensure we move forward in this 
Congress on encouraging the clean up of abandoned mine sites.

    The Chairman. Thank you very much.
    Senator Barrasso.

         STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR 
                          FROM WYOMING

    Senator Barrasso. Thank you very much, Mr. Chairman. If 
it's alright with you, I'll include my comments as part of the 
records. I'm looking forward to this panel today.
    Being from Wyoming, an energy State and a State where 
mining is very important, I look very carefully upon this. 
Reforms to me, Mr. Chairman, that are overly burdensome can 
result the loss of good-paying jobs, increased reliance of 
foreign countries, many of whom operate with much less care for 
the environment than we do here. So, I'm looking forward to 
working with you and other members of the committee in finding 
the right balance on these difficult issues. Because I think, 
philosophically, we have many agreements, but when it gets to 
the practical issues, we need to make sure that things are done 
right for our States.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Barrasso follows:]

  Prepared Statement of Hon. John Barrasso, U.S. Senator From Wyoming
    Thank you, Mr. Chairman. And, I thank the informed panelists 
assembled before us today for their participation and instruction.
    Reading through the prepared materials submitted by the panelists, 
I am struck by the agreement I found at the most philosophical level. 
Examples of such agreement include the recognition that:

   Mining provides materials essential to our economy.
   Some provisions in the hardrock mining law deserve a careful 
        look, and potentially reformat the question of royalties, for 
        example.
   There should be a framework and funding to insure 
        responsible reclamation.
   Mining activities should respect and protect the 
        environment.
   And, the notion that privatization, or patenting, could 
        continue to serve a role in certain circumstances.

    It would be my hope that another area for agreement would be that 
the legal and regulatory framework would be efficient, well-understood, 
and predictable.
    Nonetheless, below this high level of philosophical agreement, 
there are profound differences as to the best course of action.
    Therefore, let me offer a few of my own observations. Domestic 
mineral production offers benefits to labor, consumers, industry, and 
even national security.
    As an orthopedic surgeon, I am cognizant that the medical 
instruments I used everyday in my practice are derived from both common 
and rare minerals. The advances in medical technology would not have 
been possible but for the minerals extracted from the earth.
    Some benefits from the mining industry are intangible:

   They are intangible for my patients and
   They are intangible for my medical colleagues.

    Not everything we will be hearing today can be melted down into a 
gold bar and fully described by a spot market price.
    With respect to the environment, I am fortunate to come from 
Wyoming where responsible mining operations have been the norm, not the 
exception.
    Our State's Department of Environmental Quality is working 
diligently to resolve any outstanding environmental concerns and 
appropriately addressing abandoned mines.
    And, I'm no stranger to protecting very special environments. As I 
have previously announced, I am just finishing up work on a draft that 
will remove significant portions of the Wyoming Range in the Bridger 
Teton National Forest from future mineral leasing.
    That said, I believe this Committee should proceed cautiously with 
proposed changes that:

   would discourage new mines from being economically viable,
   close existing operations, or
   discourage investment in technologies or full mineral 
        recoveries.

    Reforms that are overly burdensome can result in:

   the loss of good paying jobs,
   increased reliance on foreign countries-many of which 
        operate with much less care for the environment, and,
   in the case of uranium, opportunities to produce carbon-free 
        energy.

    Mr. Chairman, I look forward to today's hearings, and I look 
forward to finding balance on these difficult issues just below the 
philosophical statements of agreement.

    The Chairman. Thank you very much.
    Why don't we call the first panel forward? The first panel 
consists of two witnesses: Jim Butler, who is with Parsons 
Behle & Latimer in Salt Lake City, who has concentrated his 
legal practice on mining law issues for many years and John 
Leshy, who is now with Harvard Law School and was our dislister 
in our Department of Interior in the previous Administration, 
in the Clinton Administration.
    Thank you both for being here. Why don't you go ahead, Mr. 
Butler, with your statement? Then we'll call on Mr. Leshy.

  STATEMENT OF JIM BUTLER, ATTORNEY, PARSONS BEHLE & LARIMER, 
                       SALT LAKE CITY, UT

    Mr. Butler. Thank you very much, Mr. Chairman, for inviting 
me here. It's an honor to appear.
    Senator Domenici, in an earlier life, I worked for Utah 
Governor Scott Matheson, and I know he spent a lot of time with 
you in the 1980s and thought very highly of you. So it's nice 
to see you again.
    Senator Craig, I know how hard you've worked on these 
issues and it's a personal pleasure to see you here this 
morning.
    Because the time is very limited, I have prepared a written 
statement. I going to skip just to a few of the substantive 
issues in that statement and try and talk some about royalties 
and environmental regulations. If there's time, I'll talk about 
some of the other issues.
    There's little disagreement that the Federal Government 
should receive some payment from the production of minerals on 
Federal lands. The issues, as Senator Craig said today, are how 
this royalty should be structured and how it should be applied. 
He talked about a gross versus a net royalty. I want to talk 
briefly and try and demonstrate how the gross royalty affects 
investment decisions.
    What I have in this chart*--this is from the 1977 National 
Academy of Sciences report, which I've doctored up a little 
bit--and it describes a model, a very simplified model, for how 
investments are made in new mining projects. The costs that are 
incurred by the mining company are the blue, they're below the 
line. The cash that's realized by the mining company, is the 
green above the line. There are a couple of things here that I 
think this model, very simplified, illustrates.
---------------------------------------------------------------------------
    * Chart has been retained in committee files.
---------------------------------------------------------------------------
    One is, a lot of the costs precede the cash-flow. This is a 
unique thing about the mining industry. There is exploratory 
drilling, development drilling, baseline studies, environmental 
permitting, environmental documents, geotechnical drilling, 
acquisition of land and water rights--all of those come before, 
in these early stages, and there's no cash-flow, again, in a 
new property.
    Then you have the mine design. After you have the 
permitting decision, you have the mine construction. Again, 
there's usually, typically a large capital investment there.
    In the case of a gross royalty, the way mining companies 
make this decision, obviously, is they say, ``This it, these 
are the costs that we will sink into this property, these are 
the revenues we expect to receive.'' There are a lot of 
complicated assumptions that go into each element of the costs 
and to the revenues. We could spend a long time talking about 
that, but I'm going to gloss over it.
    Then the question is, in today, ``Do we get a sufficient 
rate of return to justify that investment?'' The rate of return 
has to account for the alternatives, where else you might put 
that money and the level of risk that is associated with that 
investment.
    If you apply a gross royalty, let's say that at the 8 
percent gross royalty in the House, what you do to the 
investment decision, is you take 8 percent from this line and 
you move it down here. You're sitting here today, or in these 
early stages, trying to make an investment decision and trying 
to calculate a potential rate of return on a mining project. 
Moving those dollars from cash-flow to cost has a major impact 
on the projected rate of return. That is why the gross royalty 
has a dampening affect on mineral investments.
    The Chairman. Let me just ask a question on that. I can 
understand why you would take it off of the top, off the 
revenue, if you had a gross royalty. Why would you add it to 
the costs?
    Mr. Butler. Because it's a cash-flow you have to pay out, 
like a fuel expense or a labor expense. It moves, you have an 
offsetting----
    The Chairman. But you're not off----
    Mr. Butler. I don't want to double count, so let me----
    The Chairman. Yes, but that's what I think you're doing.
    Mr. Butler. I don't mean to double count, but it is what 
you would--you would take dollars from here. Maybe the cash-
flow, this square would be the same size, but these dollars 
would be moved to a cost item down here. You're right, I don't, 
and I didn't intend to double count.
    The Chairman. Either you take it off the top and don't add 
it to the bottom or you leave it in the top and do add it to 
the bottom. Right?
    Mr. Butler. You're correct. In--the way this shading is in 
the model, what you would do is you would add it to the bottom.
    The Chairman. Right.
    Mr. Butler. Yes. I didn't mean to double count. But it 
would affect the cash-flow decision, the rate of return that 
you make right here. I thank you for clarifying that. You're 
right.
    The net royalty, because it's tied to profitability, one of 
the reasons that people invest in mines, is because there's 
upside. You can strike it rich. Prices may exceed your 
expectations. The ore that you have in the ground may exceed 
what you projected at this point. You may make a profit. So in 
the net royalty sense, you know, there is some money and I--
there is the prospect of additional cash-flow out here, that 
you can't count on at the investment stage, but that you hope 
to get.
    The net royalty comes more from that, more from the 
expectation, because it's tied to profitability and it's not 
moved below to a cost line.
    There are different impacts on existing operations, but 
I'll talk about those separately.
    I also want to talk briefly about environmental 
regulations. That's basically my bread and butter legal work. 
Last year I worked with the State of Nevada, BLM Office. We had 
a task force to try and help their field offices coordinate the 
permitting process between the BLM Federal permitting and the 
Nevada State permitting. One of the products, one of our work 
products was a chart. I apologize at the, that that is not 
legible, but you should all have a blown-up copy in front of 
you that is at least legible.
    All I'm trying to illustrate with this is, that it is, to 
give you some hands-on illustration of the level of detail and 
complexity that goes into this process. Every plan of 
operations is supported by a bunch of backup data and 
additional plans, reclamation plans, waste rock plans, water 
management plans, quality assurance plans, and must be part of 
an environmental impact statement for a major project.
    On the State side you have water quality permits, you have 
air quality permits, you have reclamation permits. What I do 
when the mining industry is good, is I help clients find their 
way through this process. Because what they want to know, is 
from this point here where I submit a plan of operations to the 
BLM, to this point here when I get a permit decision, what do I 
have to do, what are the hoops that I have to jump through, and 
what substantive standards does my operation have to meet?
    I want to talk briefly about those regulations. In 1998, 
Congress asked the National Academy of Science to study this 
system, this coordinated system of Federal and State 
regulations, to determine if it was effective in protecting the 
environment from hard-rock mining on Federal lands. That report 
came back in September 1999 and answered ``Yes''. It said even 
though this system is complicated, the report found that it was 
generally effective.
    Congress also asked the National Academy of Sciences to 
identify regulatory gaps in the current program. The report 
identified nine gaps. Seven of those gaps have been filled by 
changes to BLM's 3809 regulations. One of those is an expanded 
bonding requirement. Everybody, regardless of the size of the 
operation, is required to post a bond before surface 
disturbance activities begin.
    Two gaps were left and those have to be filled by Congress. 
One of those is the Good Samaritan legislation that Senator 
Salazar mentioned. NAS recommended that the law be changed so 
that mining companies could perform cleanups without assuming 
extra liability. The second is, the report recommended that BLM 
be given authority to impose civil penalties in administrative 
enforcement actions. I think that requires Congressional 
action, as well.
    There were some additional regulations in 2000. The 
regulations went beyond the recommendations of the National 
Academy of Sciences report and I expect Mr. Leshy will talk 
about those and then we can answer some questions.
    The last thing I want to do in my remaining minute, is talk 
just briefly about context. Senator Craig and others have noted 
that demand and prices are driven now primarily by China. 
That's true. Everything that's happened in the mining industry 
in the past 5 years can be traced to the modernization of 
China.
    But I want to focus on just one related aspect of that. The 
mining industry in the U.S., if we are not receptive to 
investment, if we're not going to meet the needs, the 
increasing global demand, not only are we not competitive in 
terms of being a consumer, but we're not competitive in terms 
of being a producer. We face the potential of falling behind in 
technologies like metallurgy and mining technology, mine 
engineering and design, because those investments, those people 
are being trained in other places. I know that the Congress has 
had hearings about these shortages. There's a generation in the 
mining industry of technically trained people that's missing. I 
think that's a follow-up issue to the question of Chinese 
demand and the changing global market.
    Thank you very much and I look forward to your questions.
    [The prepared statement of Mr. Butler follows:]

 Prepared Statement of Jim Butler, Attorney, Parsons Behle & Latimer, 
                           Salt Lake City, UT
                              introduction
    Chairman Bingaman, members of the Committee, thank you very much 
for the opportunity to appear before you to discuss implementation of 
the U.S. mining laws. By way of introduction, I am an attorney with 
Parsons Behle & Latimer. My firm has offices in Salt Lake City and 
Reno. We have been working with the mining industry since 1882, when 
the two original partners--mining lawyers from Carson City--formed the 
firm in Salt Lake City.
    My own legal career includes almost twenty years working for dozens 
of mining companies with interests on federal lands. My clients have 
included some of the world's largest companies as well as medium and 
small mining companies, and individuals and prospecting ventures who 
are engaged in mineral exploration on public lands. I have served two 
years as Chair of the American Bar Association's Mining Committee and 
four years as a vice-chair of the Public Lands Committee. In 2005, I 
was the Program Chair for the Rocky Mountain Mineral Law Foundation's 
Annual Institute.
    My particular specialization is environmental permitting and 
compliance for mining operations. I have helped clients with more than 
30 plans of operations with the Bureau of Land Management and U.S. 
Forest Service and the related environmental and reclamation permits 
from state regulatory authorities. I have also represented mining 
companies in administrative and judicial appeals relating to their 
operating permits--before the Interior Board of Land Appeals, state 
administrative appeal boards, and federal courts in Arizona, Nevada, 
Montana and Washington.
    Before joining Parsons Behle & Latimer, I worked in the office of 
Utah Governor Scott M. Matheson, where I was his staff assistant on 
natural resources issues. In that position, I was the primary contact 
with federal land management agencies, including the BLM, Forest 
Service and National Parks Service, under cooperative agreements 
between the State of Utah and those agencies.
    For your information, I am registered with the Senate as a lobbyist 
for Barrick Goldstrike Mines, Inc., which is a subsidiary of Barrick 
Gold Corporation. However, I am not appearing today on behalf of 
Barrick Goldstrike or any other mining company. Obviously, my views are 
influenced by all of my experiences, including my work for the mining 
industry, but the views I express here today are my own, and may or may 
not be the views of my clients.
                            the major issues
    Discussions with Committee staff and your invitation letter to 
appear at this hearing identified five broad categories of issues 
related to the mining laws:

Royalty
   Should the law impose a royalty on the production of hard 
        rock minerals from federal lands and, if so, what form should 
        that royalty take?
Patenting
   Should the opportunity to patent mining claims be revived, 
        or, if not, whatalternatives can provide security of land 
        tenure for mining investments?
Mining Law Administration
   Are there ways to improve the efficiency and administration 
        of the current law?
Environmental Regulation
   Should the law be amended to include additional 
        environmental standards or regulations?
   Should a federal land manager be able to deny approval of a 
        mining plan of operations which meets environmental standards 
        to favor other land or resource uses?
Abandoned Mines
   What is the extent of environmental problems associated with 
        abandoned mining operations on federal lands, and what are the 
        alternatives to address that problem?
                                royalty
    The question of whether a royalty should be imposed on the 
production of hard rock minerals from federal lands has been settled 
since at least 1995, when the mining industry supported legislation 
contained in the Budget Reconciliation Act which would have imposed a 
5% net proceeds royalty on new claims. The debate now focuses almost 
entirely on the structure and level of the royalty.
    With regard to structure, the choices are between a gross royalty, 
which is based upon the total revenue from the sale of minerals, and a 
net royalty, which allows the operator to deduct specified costs of 
production from the value of the minerals before the royalty is 
calculated. The advantage of the net royalty in the mining context is 
that it is tied to profitability and does not exaggerate the inevitable 
price swings in the minerals markets. Royalty payments increase when 
prices and profits are high, but fall when prices are low and times are 
hard, allowing operations to cut costs and maintain production and 
employment.
    A profit-based royalty also has a less dampening effect on mining 
investment. Mining investments typically seek a long-term rate of 
return based on alternative investments and comparative risks. A 
royalty payment based on a percentage of the total proceeds from 
mineral sales directly reduces the potential rate of return--making all 
mining investments less attractive. Because revenue projections (and 
rates of return) are typically based on conservative price assumptions, 
the possibility that prices may exceed expectations--along with profits 
and royalty payments--does not reduce the initial projected rate of 
return. A recent study prepared for the World Bank discusses the 
various royalty options and describes how they might affect investment 
decisions and the availability of reserves.
    With regard to rate, there are two considerations. The first is how 
the royalty payments fits with the overall economic contribution from 
mining activities. Mining produces substantial government revenue, even 
without a federal royalty. Mining operations pay property taxes, sales 
and use taxes, and business fees and taxes. In Nevada, for example, 
where mine operators pay a 5% net proceeds tax that is shared between 
state and county governments, the industry paid more than $192 million 
in direct tax payments in 2006, including almost $62 million in net 
proceeds tax. That calculation includes only direct taxes and does not 
account for the income taxes paid by mine owners or shareholders or the 
taxes paid by mine employees and businesses that sell products and 
services to the mining industry. The second consideration is how that 
rate will affect mine investment. It is axiomatic that if the 
government takes too much of the potential profit, investors will put 
their dollars elsewhere.
                       environmental regulations
    Mining operations on federal lands are subject to the full range of 
federal and state environmental laws as well as federal regulations and 
state laws and regulations relating specifically to mining operations, 
reclamation and closure. When mines are expanding or new mines are 
being built, mining clients come to me to help them navigate through 
the procedural rules of these various laws and regulations. Before 
construction, the typical mining operation on federal lands will be 
required to obtain:

   Approval of a plan of operations from the BLM or Forest 
        Service, including a reclamation plan, closure plan, and 
        cultural resources plan.
    --Applications for plans of operations are supported by 
            environmental baseline studies for air, water, and 
            wildlife, geochemical testing of ore, tailings and waste 
            rock material, geochemical and hydrological modeling, 
            cultural resources studies and reclamation studies.
   Air quality permits from EPA or state agencies with 
        delegated programs under the Clean Air Act. The complexity of 
        the air quality permits increases if there are substantial 
        onsite processing facilities. All sites must have an approved 
        fugitive dust control program.
   Water quality permits from EPA or state agencies with 
        delegated programs under theClean Water Act. Water quality 
        permits can include discharge permits, stormwater management 
        permits and section 404 permits. States also require permits to 
        address potential impacts to ground water.
   Rights to use or consume water from appropriate state 
        authorities.
   Hazardous waste permits that govern storage, transportation 
        and disposal of laboratory or processing wastes.
   Authorization under the National Historic Preservation Act 
        if cultural or historic resources are present.
   Permits to construct tailings ponds or other impoundments.
   Financial assurance equal to the cost that would be borne by 
        the government if it had to contract with a third party to 
        complete reclamation of the site.

    Each of these permits is typically accompanied by an agency and 
public review process. Every operation that requires a federal decision 
to authorize mining activities is subject to the National Environmental 
Policy Act (``NEPA''). For any large project, this requires preparation 
of an environmental impact statement, which evaluates potential 
environmental impacts of the mining operation, assesses alternatives 
and requires the identification of mitigation measures to reduce 
potentially significant environmental impacts. Public review and 
comment is invited at the beginning of the process, to determine the 
scope of the environmental evaluation, and when a draft environmental 
impact statement is completed. The federal agency preparing the EIS is 
obligated to consider and respond to all substantive comments on the 
draft document.
    All of the permits including monitoring and reporting requirements. 
Monitoring may be constant, as in the case of some air and water 
quality permits, or season, as in the case of some water use 
authorizations, which require season monitoring of stream flow, seep or 
springs.
    These different pieces of the regulatory process work together--in 
a way that the National Academy of Sciences report called ``generally 
well coordinated''--to provide a comprehensive regulatory framework for 
hardrock mining on federal lands.
    The regulatory process for mining is constantly evolving. Changes 
in federal water and air laws, regulations and policies translate 
directly into on-the-ground requirements for mining operations. States 
are constantly updating and revising their reclamation and 
environmental programs. At the federal level, substantial changes were 
made to BLM's 3809 regulations in 2000 and 2001. The complicated 
history of the changes in the 3809 regulations--and contemporaneous 
changes in the administration of the mining law--are spelled out in a 
chronology that is attached to this statement as Table 1.
    The most important changes are included in the revised 3809 
regulations which were adopted during Secretary Babbitt's tenure and 
ratified by the Bush Administration. Those regulations implement 
changes which were supported by the National Academy of Sciences report 
on hardrock mining on federal lands, including:

   Expanded bonding requirements.--Regulations now require that 
        all mining and exploration disturbance, no matter how small, be 
        fully bonded before activities can proceed. Regulations, and 
        subsequent BLM guidance, also revise how bonds will be 
        calculated, maintained and released.
   Full NEPA review for small operations.--Earlier regulations 
        included an exception from NEPA for small operations that 
        disturbed less than 5 acres. As the National Academy of 
        Sciences report recommended, that exception has been dropped 
        for all mining activities, but retained for exploration 
        activities. Even exploration activities disturbing less than 5 
        acres, however, must be bonded.
   Strengthened water quality measures.--Regulations 
        incorporated key aspects of two prior BLM policy documents 
        regarding management of cyanide in mining operations and acid 
        rock drainage. Those same provisions required increased 
        frequency of inspections of mining operations that use cyanide 
        or may result in acid rock drainage. BLM has adopted additional 
        guidance documents to implement specific water quality 
        objectives in the regulations.

    The National Academy of Sciences Committee identified seven 
``regulatory gaps'' in the laws and regulations that were reviewed by 
the 1999 report. Five of those seven gaps were filled by changes to the 
3809 regulations and BLM guidance and policies. Two of those ``gaps'' 
require legislative action and include 1) a recommendation that 
``existing environmental laws should be modified to allow and promote 
the cleanup of abandoned mine sites in or adjacent to new mine areas 
without causing mine operators to incur additional environmental 
liabilities,'' and 2) a recommendation that ``BLM and the Forest 
Service should have both (1) regulatory authority to issue 
administrative penalties for violations of their regulatory 
requirements, subject to appropriate due process, and (2) clear 
procedures for referring activities to other federal and state agencies 
for enforcement.''\1\
---------------------------------------------------------------------------
    \1\ Hardrock Mining on Federal Lands, National Research Council, 9 
(1999).
---------------------------------------------------------------------------
                patenting and mining law administration
    The mining law has a long and colorful legal history. Some of the 
complexities in the law and the details of mining claim location and 
maintenance that were drafted in the 19th century seem unnecessary 
today. At the same time, the mining law has unquestionably succeeded in 
its primary purpose to encourage mineral exploration and development. 
Though some disputes still arise, the mining has generally learned to 
live with thee complexities.
    The primary legal issue associated with what we traditionally 
consider to be the ``mining law'' in the early 21st century is whether 
unpatented mining claims offer sufficient security in the land to 
support investments which may be measured in the billions of dollars. 
The patenting provisions of the mining law allowed claimants to acquire 
full title to the land and mineral deposits that were claimed, but 
those provisions have been the lightning rod for substantial criticism 
of the law and Congress has allowed no new patent applications since 
1994. The security issue can be solved in a number of ways. The most 
straightforward method is to allow claimants to secure title to 
unpatented mining claims through the payment of annual claim 
maintenance fees.
                            abandoned mines
    There is a broad range of estimates of the number of abandoned 
mines and physical hazards on the federal lands. There is little 
disagreement that eliminating these sites deserves more attention. In 
the context of mining law legislation, an abandoned mines reclamation 
program should include two components. First, Congress should adopt the 
recommendation from the National Academy of Sciences and enact 
legislation that would allow mining companies--and other parties--to 
reclaim abandoned sites without incurring additional liability under 
environmental laws.
    Second, Congress should support and expand existing programs that 
work, not create a new program. Again, Nevada provides a model for 
designing a program that works.\2\ The Nevada program is funded by a 
modest fee ($1.50) on county mining claim filing fees and a onetime fee 
of $20 per acre of new permitted mining disturbance. The Nevada program 
also applies for grants from BLM's abandoned mines program. The Nevada 
program secured 540 hazards in 2006 with total revenue of nearly 
$350,000. The Nevada program encourages cooperation from mining 
claimants, private property owners, volunteers (including mining 
companies) and other agencies. The bulk of the work includes fencing or 
backfilling mine openings on public land. The Nevada Division of 
Minerals, which administers the Nevada program, is also working with 
the Nevada Department of Wildlife, Nevada Natural Heritage Program, BLM 
and Forest Service to secure mine openings in Clark County, but 
preserve those that may be suitable for bat habitat by constructing 
bat-compatible enclosures, i.e., enclosures that restrict public access 
but allow continued use of the mine opening by bats.
---------------------------------------------------------------------------
    \2\ This information is drawn from the Nevada Abandoned Mine Lands 
Report, 2006, prepared by the Nevada Division of Minerals.
---------------------------------------------------------------------------
    BLM's abandoned mine land program has also evolved. The most recent 
information available on that program states that nearly 500 physical 
hazards were eliminated and more than 1000 acres of water quality in 
riparian areas improved during fiscal years 2004 and 2005.
    Those are my initial comments on the issues raised by the 
Committee. I expect these issues will be addressed in more detail in 
questions to Mr. Leshy and myself, or to members of the second panel. 
With the brief time that remains, I would like to set the context for 
your consideration of these specific issues that relate to mining on 
federal lands in the U.S. These are narrow issues, but occur in a world 
that is much different from the last Congressional consideration of 
these issues in 1995. Specific legislative decisions on these 
particular issues should be informed by a broader world view.
  the context for mining law discussion in 2007: china dominates the 
                       world market for minerals
    The last half of the early 1990s and early years of this century 
were difficult economic times for the mining industry. Copper prices 
hovered at less than $1 per lb. and gold prices were typically below 
$300 per ounce. Depressed prices lead to predictable results--incomes 
dropped, mines closed, a handful of mining companies went bankrupt, and 
there was a significant consolidation in the industry. For example, I 
looked back at the record of hearings held by this Committee in 1993. 
The supplementary material in the record included information on the 
top nine North American gold producers. Seven of the companies--Placer 
Dome, Homestake Mining, Lac Minerals, Echo Bay Mines, Battle Mountain 
Gold, Pegasus Gold and Amax Gold--no longer exist. Only two of the top 
producers, Barrick and Newmont, remain in business. There has been a 
similar trend in the copper industry.
    The market for metals began to rebound in 2002 and 2003, based 
almost exclusively on demand associated with the modernization of China 
and the growing Chinese economy. Chinese demand is today, and is 
expected to continue to be, the biggest single influence on the global 
minerals market. Copper consumption in China has more than tripled 
since 1998 and it is now the biggest consumer of copper in the world. 
The story is the same for most other minerals. China is also the 
world's largest consumer of aluminum, nickel, tin, lead, zinc and iron 
ore. Since 1999, China has consumed two-thirds of the world's growth in 
base-metals output. Since 2002, China has accounted for half the 
world's growth in consumption of steel, copper and aluminum, almost all 
the world's growth of nickel and tin, and much of the growth in lead 
and zinc.\3\ The new demand has driven commodity prices up. Market 
prices for copper, zinc, lead and iron ore have all more than tripled 
since 2002.
---------------------------------------------------------------------------
    \3\ China Business, Sept. 1, 2007.
---------------------------------------------------------------------------
    In the past few years, the Chinese, concerned about future reserves 
and prices for the minerals necessary to continue economic expansion, 
have invested heavily in global mining companies and reserves. In 2005, 
the Chinese mining company entered into an agreement with Chilean 
copper producer Codelco, guaranteeing delivery of refined copper for 15 
years and giving the Chinese an opportunity to invest directly in one 
of the Codelco mines. Chinese companies have sought to diversify their 
supplies with investments in South America, Australia, Africa and even 
the United States. Within the past few weeks, it has been reported that 
China is seeking to invest more than $5 billion in the Democratic 
Republic of the Congo, which could lead to Chinese ownership of 
important reserves of copper, cobalt, iron ore, gold and uranium.
    To date, the growing global demand has not translated into 
increased production in the U.S. According to U.S.G.S. data, mine 
production of copper in the U.S. is essentially flat. Copper production 
from U.S. mines in 2006 was actually lower than production between 1991 
and 2001. Imports of copper have increased. Again, based on U.S.G.S. 
data, about half of the refined copper consumed in the U.S. was 
imported. Through 2006, production of other major metals in the U.S., 
including gold, which is a major export commodity, also remained flat.
    Experts disagree as to what these developments for the global 
mining industry and potential U.S. production. Some predict that prices 
will moderate as global production--especially from Australia and South 
America and within China--increases. That may mean little long-term 
change in U.S. mining. Others see that any lagging demand from China 
will be offset by new demands from India. If prices remain at current 
levels, domestic exploration will continue and eventually some new 
mines will make it to production. Most agree that any prolonged 
downturn in the Chinese economy would dramatically impact metal prices 
and halt growth in the industry.
    Under either view, it is important that decisionmakers in Congress 
understand how much the world has changed in the past fifteen years. 
Decisions about the mining law and the mining industry should not be 
made based on a view of the world that is 15 to 20 years out of date. 
If a healthy domestic mining industry is important and I believe that 
it is then we need to look closely at policy decisions which affect the 
long-term cost and availability of minerals. Gross royalties that 
shrink reserves and prematurely close mines, additional hurdles in the 
permitting process that increase investment risk and delay permit 
decisions, and decisions that further restrict the availability of 
lands for exploration and development will inevitably reduce the 
production of minerals from federal lands. In the future, if we look 
abroad for those resources, they may not be available, at least at 
prices that American consumers are willing to pay.
                               conclusion
    I appreciate the opportunity to make this opening statement and 
look forward to your questions.

                          Attachment.--Table 1
  Chronology of Administrative Changes to the Mining Law, 1994 to 2007



Sept. 1994                                Congress imposes moratorium on
                                           processing of patent
                                           applications (renewed
                                           annually since 1994).

April, 1996                               BLM adopts new acid rock
                                           drainage policy as agency
                                           guidance.

July, 1996                                BLM adopts regulations
                                           addressing use and occupancy
                                           on mining claims.

Feb. 1997                                 BLM promulgates new bonding
                                           regulations subsequently
                                           struck down in 1998 in
                                           Northwest Mining Ass'n v.
                                           Babbitt because BLM failed to
                                           comply with Regulatory
                                           Flexibility Act).

Nov. 7, 1997                              Solicitor Leshy issues
                                           ``Millsite Opinion,'' which
                                           limits the availability of
                                           millsite claims for mining
                                           support facilities.

Nov. 14, 1997                             Department of Interior
                                           Appropriations Act for 1998
                                           requires that BLM consult
                                           with Western Governors before
                                           proposing any changes to the
                                           BLM's 3809 regulations.

Nov. 17, 1997                             BLM Director Pat Shea sends
                                           letter to Chairmen of
                                           Congressional Energy and
                                           Appropriations Committee
                                           certifying that consultation
                                           required by Interior
                                           Appropriations Act has been
                                           completed.

Oct. 1998                                 Department of Interior
                                           Appropriations Act for 1999
                                           requires National Academy of
                                           Sciences to study and report
                                           on adequacy of federal and
                                           state environmental,
                                           reclamation and permitting
                                           laws regarding hardrock
                                           mining on federal lands.

Feb. 1999                                 BLM publishes proposed
                                           revisions to the 3809
                                           regulations.

May, 1999                                 Congress limited application
                                           of the Millsite Opinion in
                                           1999 Supplemental
                                           Appropriations Act.

June, 1999                                Supplemental Appropriations
                                           Act of 1999 requires that BLM
                                           reopen the public comment
                                           period on the proposed 3809
                                           regulations after the
                                           publication of the National
                                           Academy of Sciences report.

Sept. 1999                                National Academy of Sciences
                                           Report, Hardrock Mining on
                                           Federal Lands is released.

Nov. 1999                                 Appropriations Act for FY 2000
                                           requires Secretary of
                                           Interior to promulgate 3809
                                           regulations that are ``not
                                           inconsistent'' with the
                                           recommendations of the
                                           National Academy of Sciences
                                           report.

Sept. 2000                                Requirement of Appropriations
                                           Act for FY2000 is extended in
                                           FY 2001.

Oct. 2000                                 BLM publishes final 3809
                                           regulations.

Dec. 2000                                 State of Nevada and others
                                           file suit challenging certain
                                           provisions of the final 3809
                                           regulations.

Jan. 2001                                 Solicitor Leshy issues
                                           ``Ancillary Use Opinion,''
                                           which restricts the use of
                                           mining claims for mining
                                           support facilities.

Jan. 2001                                 Final 3809 regulations go into
                                           effect.

March, 2001                               BLM suspends certain
                                           provisions of the 3809
                                           regulations and reopens
                                           public comment period on
                                           other provisions.

June, 2001                                BLM retains bonding provisions
                                           of the 3809 regulations.

Oct. 2001                                 BLM issues final rule revising
                                           3809 regulations. Final rule
                                           includes four substantive
                                           changes:


Nov. 2001                                 Mineral Policy Center and
                                           others file suit challenging
                                           the revised 3809 regulations.

Oct. 2003                                 Department of Interior
                                           rescinds the Millsite
                                           Opinion.

Nov. 2003                                 District Court's decision in
                                           Mineral Policy Center v.
                                           Norton, upholds the revised
                                           3809 regulations with the
                                           exception of the application
                                           of FLPMA's ``fair market
                                           value'' requirement for
                                           certain lands, which is
                                           remanded to BLM for further
                                           consideration.

Oct. 2005                                 BLM adopts new rules requiring
                                           cost recovery for processing
                                           of mining plans of
                                           operations.

Dec. 2005                                 Department of Interior
                                           rescinds the Ancillary Use
                                           Opinion and clarifies process
                                           for review of plans of
                                           operations.




    The Chairman. Thank you very much.
    Mr. Leshy, thank you for being here.

 STATEMENT OF JOHN D. LESHY, HARRY D. SUNDERLAND DISTINGUISHED 
PROFESSOR OF LAW, UNIVERSITY OF CALIFORNIA, HASTINGS COLLEGE OF 
                   THE LAW, SAN FRANCISCO, CA

    Mr. Leshy. Thank you very much, Mr. Chairman. I'm delighted 
to be here and delighted that the committee is interested in 
looking again at this issue. It is, as many of you have noted, 
a longstanding, sort of, controversy on the public lands and 
there have been many attempts by this committee and this body 
to, in this Congress to reform the law. All have--some have 
made nicks in it and many have failed and I'm really heartened 
by the interest of the committee, particularly by Senator 
Domenici's remarks.
    I'm delighted to appear here with Jim Butler. Jim and I 
have discussed these issues in a friendly and adversarial way 
over many years. I've always enjoyed debating them with him.
    I emphasize I appear today as a private citizen. I'm not 
representing anybody. I've made it, the Mining Law and it's 
reform, kind of a hobby over the last 35 years, for better or 
worse, mostly worse, I suppose. But I've written about it and 
I've worked on it in government in the non-profit sector and 
academia.
    The shortcomings of the law, I think, have really been 
identified by the remarks that many of you have made so far. 
There are really three--three basic ones as I see it.
    One is the patenting feature, the fact that the law allows 
privatization of very valuable public resources at bargain 
basement rates without any kind of consideration of a larger, 
broader public interest. This patenting feature is really the 
last vestige of the, sort of, 19th century westward movement 
constellation of laws. Congress has interrupted it, in a sense, 
by these annual moratoria on patent applications. But 
obviously, Congress must act each year to continue those 
moratoria or patenting resumes, and we did have an attempt a 
couple of years ago to actually, not only lift the moratoria, 
which passed the House, but to expand the whole patenting idea. 
So, I think there is, frankly, general consensus that the time 
has come to really end that feature of the Mining Law.
    The second shortcoming is the one that Jim addressed in 
some detail and others have mentioned. That is the fact that 
there is no payment, no royalty, no rental, no kind of direct 
financial return to the Treasury from the hard-rock mining on 
the public lands. It really is the glaring exception, as you 
all know. We now generally charge people to camp on the public 
lands and recreate in various ways and timber harvesters and 
energy companies and utility companies and just about, cattle 
ranchers, just everybody else pays something to use and exploit 
the resources of the public lands. Usually something like fair 
market value. The hard-rock mining industry doesn't pay 
anything. It's the big, very large exception. So that's one 
unique thing about it.
    Frankly, if you look to other lands, State private lands 
and lands abroad, the mining industry pays something. I mean, 
the Federal lands of the United States are practically the only 
place on this earth, that this industry operates without making 
a direct payment to the owners of the minerals. So, if they 
operate on private land, they pay a royalty, if they operate on 
State land they pay a royalty, Federal lands they do not. It is 
time to close this, what I think is really a big loophole.
    Let me say a couple of words about Jim's comments, because 
there are various ways to do this. My own view is, the devil is 
very much in the details, in terms of how you design a royalty, 
net versus gross, those are sort of labels, whether it's 10 
percent or 2 percent or some other percentage. It's much more 
important exactly how you craft the royalty.
    For the model here, I would look, frankly, as this 
committee knows, the United States charges a royalty for coal 
extraction, oil and gas extraction, geothermal extraction, 
fossil fuels generally. Those systems aren't perfect, as we all 
know. I saw an Inspector General report the other day that 
talked about some difficulties the Interior Department is 
having, but they do produce genuine, important revenues for the 
taxpayers, a return on their ownership of these minerals. 
They're systems that the industry and the government are quite 
comfortable with, I think overall. They haven't crippled the 
industries.
    So, I think my message here, is that there are ways, 
sensible ways to craft a royalty or other form of payment that 
can produce genuine revenue for things like cleaning up the 
abandoned mines, as well as deficit reduction and the like, 
that can be carried out in an efficient way without crippling 
the industry.
    The third point I want to talk about, and the third, I 
think, general area of--recognized as a shortcoming of the 
Mining Law, though not by everybody, is that there are some 
environmental gaps and loopholes in terms of regulation. It is 
true, I will agree with Senator Craig that the mining industry 
is now subject to a lot of environmental law that it did not 
used to be. The Clean Air Act, generally the Clean Water Act, 
et cetera, do apply to hard-rock mining operations. But, but 
there are differences. There are loopholes, gaps here, 
regulatory gaps that, that result in real problems.
    A couple are in the water area. The Clean Water Act, for 
example, does not generally protect ground water. It's not 
designed to protect ground water. The Clean Water Act is 
generally designed to protect, sort of, industrial waste coming 
out of pipes. Mines don't pose those kind of problems. They 
need, in some respects, some Clean Water Act permits, but the 
sort of overall, general water quality and, to some extent, 
quantity impacts of hard-rock mining are not addressed under 
existing environmental laws.
    Also, the hard-rock industry operating on Federal land, 
again, does not get the same kind of regulatory treatment that 
virtually all other users of the Federal land get. Because no 
other user of the Federal land can claim a right to mine, 
regardless of the level and quantity of environmental impact.
    Some of you know, or I've addressed this in more detail in 
my written statement, but the current Administration takes the 
view--this is their legal position--that the government does 
not have a right to say ``no'' to a proposed hard-rock mining 
operation, no matter how devastating its impacts on the 
environment or on other natural cultural resources. It simply 
can not stop a mining operation, no matter how bad it is, if 
the impacts of that mining operation are considered necessary 
to mining, if they're sort of a necessary byproduct.
    That is a very large loophole. Again, no other industry 
operating on the public lands, faces that kind--has that kind 
of opportunity. In other words, if you're an oil and gas lessee 
or a timber operator or an energy company building a pipeline 
or a transmission line or power plant or whatever, the 
government always has the right to say, ``You know, we sort of 
would like to be able to help you, but your particular 
operation in this place, is so devastating, we can't allow 
it.'' The government can not say that to the hard-rock mining 
companies, under the current legal view.
    Second, and also important, under the current legal view of 
this Administration, the government can not deny hard-rock 
mining companies the right to use as much public land as they 
want and they think they need for waste dumps, tailings piles, 
et cetera, an unlimited right to an unlimited amount of 
acreage. That is, again, the current legal position of the 
Government. These, again, are things that no other industry 
operating on the public lands has, that is this kind of 
``right.''
    Now, I readily admit that there are some, many excellent 
mining operations out there that do a very good job of 
protecting the environment. Many companies behave very 
responsibly. There's just no question about that. The industry 
has come a long way in that respect. But, this is a pretty, 
very big business, in terms of the huge amounts of acreage, of 
tons of material that are moved. That is a huge change in the 
industry from 30 years ago. We now move 100 tons of rock and 
ore to get one ounce of gold. You've seen, I'm sure, the 
committee has seen, the scale of these operations is vast. It's 
a technological engineering marvel, really.
    But it also can pose some very serious environmental 
problems. When mistakes happen or mines are put in the wrong 
place or bad mines are approved, the consequences can be really 
expensive, devastating, long-term, et cetera.
    As has been noted, the abandoned mine problem on Federal 
lands from days, particularly when there was no environmental 
regulation, is a very large one, estimated, I mean, depending 
on who you ask, between $10 and $50 billion ultimately would be 
required to clean these abandoned mines up. They also pose 
safety problems. I was in Arizona a week ago and there was, a 
kid fell into an abandoned shaft and died. That happens from 
time to time. Those things need to be fixed and there needs to 
be a source of money to do that.
    So, I see my time is coming to a close. I'm sure the 
committee has questions. I do, let me just close by saying I 
think the industry needs to live up to, essentially, be brought 
up to the same standards--and it's not that far to bring them--
but to the same standards and the same decisionmaking 
authorities that apply to all other users of the Federal land. 
I think we as a nation are there. I really applaud this 
committee's interest in taking up this issue again, and I stand 
ready to help any way I can.
    Thank you.
    [The prepared statement of Mr. Leshy follows:]

Prepared Statement of John D. Leshy, Harry D. Sunderland Distinguished 
  Professor of Law, University of California, Hastings College of the 
                         Law, San Francisco, CA
    I appreciate your invitation to testify today, and the engagement 
of this Committee on reform of the Mining Law of 1872. There is no more 
important task among the constellation of issues involving our public 
lands, lands which encompass nearly one-third of the Nation's real 
estate and a large portion of its valuable natural resources like 
minerals.
    I appear here today as a private citizen, expressing my own 
personal views, and not representing any group or institution. I have 
worked on Mining Law issues for thirty-five years, in academia, in 
government and in the nonprofit sector. Before I address the specific 
questions in your letter of invitation, I would like to provide some 
larger perspective on the recently rekindled effort to reform the 
Mining Law.
    Calls to reform the Mining Law date back to a few years from its 
passage, and have been made by many U.S. Presidents, from Republicans 
like Theodore Roosevelt and Richard Nixon to Democrats like Jimmy 
Carter and Bill Clinton. Almost forty years ago, as Stewart Udall was 
stepping down after eight years as Secretary of the Interior, he called 
its repeal the biggest unfinished business on the Nation's natural 
resources agenda.
    Signed into law by President Ulysses S. Grant four years before the 
telephone was invented, this antiquated relic is the last statutory 
survivor of a colorful period in the Nation's history that began with 
discovery of gold in the foothills of the Sierra Nevada in 1848. The 
mining ``rushes'' that ensued accelerated the great westward expansion 
of settlement. And they swept many of the Western states to statehood--
California (the golden state), Nevada (the silver state), Montana (the 
treasure state), Idaho (the gem state) and eventually Arizona (the 
copper state). The same era witnessed the enactment of numerous other 
laws filling out the framework for that great movement--laws like the 
railroad land grant acts and the Homestead Act of 1862. A generation 
later, Congress enacted landmark laws like the National Forest Organic 
Act in 1897 and the Reclamation Act of 1902, and a generation after 
that, the National Park Organic Act of 1916 and, in 1920, the Mineral 
Leasing Act and the Federal Power Act.
    All these other laws have long since been repealed, replaced, or 
fundamentally reformed, often more than once. But the Mining Law of 
1872 remains. Today the public lands and resources are managed under 
modern laws like the Federal Land Policy & Management Act of 1976 
(FLPMA), the National Forest Management Act of 1976, the Federal Coal 
Leasing Amendments of 1976, the Surface Management Control and 
Reclamation Act of 1977, the Reclamation Reform Act of 1982, and the 
Federal Oil and Gas Leasing Reform Act of 1987.
    The Mining Law has escaped this tide of reform despite the fact 
that, since 1872, the population of the U.S. has grown more than seven-
fold (from less than forty million to more than 300 million), the 
population of the eleven western states plus Alaska (where the Mining 
Law principally applies) has grown from about one million to nearly 70 
million, and the mining industry, our society and our economy have all 
changed in ways beyond comprehension.
    It is not for lack of trying. It has long been recognized that the 
Mining Law is thoroughly out of step with evolving public resource 
management principles. Indeed, the first Public Land Commission created 
by Congress to assess public land policies recommended in 1880 that it 
be thoroughly rewritten. Many blue-ribbon commissions since have 
likewise called for reform.
    The Law's three most important shortcomings are as follows:

          First, the Mining Law allows valuable public resources to be 
        privatized at bargain-basement rates, without consideration of 
        the broader public interess. Its so-called patenting feature is 
        the last vestige in federal law of nineteenth century public 
        land disposal policy. Much abused for purposes that have 
        nothing to do with mining, the Mining Law has privatized an 
        area of federal land larger than the state of Connecticut, much 
        of it in scattershot inholdings that complicate rational land 
        management throughout the West to this day. Patenting is not 
        necessary to mine; indeed, the Supreme Court recognized as far 
        back as 1884 that the ``patent adds little to the security of 
        the party in continuous possession of a mine he has discovered 
        or bought.'' Many large mines are found at least partly on un-
        patented federal lands.
          Congress has since 1994 enacted appropriation riders to 
        forestall new applications for Mining Law patents. This 
        practice has had no demonstrable negative effects on the 
        hardrock minerals industry. But Congress must act each year, or 
        patenting resumes. The fragility of these annual riders was 
        driven home in the fall of 2005 by the now-infamous Pombo-
        Gibbons legislative proposal that would have not only lifted 
        the moratorium on new patents, but also greatly liberalized the 
        terms of patenting. That ill-conceived proposal--which passed 
        the House but then died under a storm of protest--could have 
        resulted in the scattershot privatization of more millions of 
        acres of federal lands.
          As long as privatization remains a core feature of the Mining 
        Law, the temptation remains for future mischief-makers to try 
        similar stunts. It is time for Congress to repeal, once and for 
        all, the Mining Law policy allowing willy-nilly privatizing of 
        the federal lands.
          Second, the Mining Law fails to produce any direct financial 
        return to the public for the exploitation of publicly owned 
        resources. Mining companies are charged no rental, pay no 
        royalty, and make no other payment that recognizes that the 
        people of the U.S. own the minerals being mined. Their position 
        is unique in two distinct ways. First, practically all other 
        users of the public lands--oil and gas and coal developers, 
        timber harvesters, energy companies that run transmission lines 
        across the federal lands, cattle graziers, and even, these 
        days, hunters, anglers and other recreationists--pay the 
        government something (in most cases, something like market 
        value) for the publicly-owned resources being used or removed. 
        Second, practically everywhere else on this earth that hardrock 
        mining companies operate--on state or private lands in the 
        U.S., and just about everywhere abroad--they pay something to 
        the governments and others who own the minerals.
          It is time for Congress to close this glaring loophole. 
        Whatever justifications might once have been offered for such a 
        giveaway of public property--such as when gold had strategic 
        value and the West was sparsely settled--have long since 
        disappeared. Today 85% of the gold mined is used to make 
        jewelry, and the West has long been the fastest-growing region 
        of the country.
          Third, the Mining Law results in inadequate protection of the 
        environment and other uses of the public lands. All other users 
        of the public lands who can cause significant environmental 
        disruption are subject to a straightforward system of 
        regulation which requires them to minimize the environmental 
        effects of their activities and clean up any mess they create. 
        And all other users are subject to the fail-safe authority of 
        the government to prevent proposed activities that threaten 
        major environmental harm which cannot be prevented or mitigated 
        appropriately.
          The Mining Law itself is utterly silent on environmental 
        regulation. Operations carried out under it no longer entirely 
        escape regulation, thanks to laws like the Clean Water Act. But 
        these other laws do not comprehensively address the myriad of 
        environmental threats posed by hardrock mining, such as 
        groundwater depletion and pollution and disruption of wildlife 
        habitat. Nor do these other laws require the government, in 
        making decisions about whether to approve proposed mines, to 
        weigh the value of mining against other values and uses of the 
        public lands.
          The hardrock mining industry has long used the silence of the 
        Mining Law on such issues to stoutly contest the reach of the 
        government's authority over its activities. And it has long had 
        powerful allies in the government on these matters. Just within 
        the last few years my two immediate successors as Solicitor of 
        the Interior Department issued legal opinions supporting the 
        industry's view that the Mining Law hamstrings government 
        authority. In one, the Solicitor concluded that the government 
        lacks authority to prevent proposed hardrock mineral operations 
        on public lands no matter how huge a threat they might pose to 
        the environment and other resource uses. In another, the 
        Solicitor concluded that the Mining Law gives the mining 
        industry the right to use as much public land as it thinks it 
        needs as a dumping ground for the residue of its vast hardrock 
        operations. This is no small matter, because hardrock mining 
        operations these days can involve hundreds of millions of tons 
        of waste from gigantic open pits several miles across and a 
        mile or more deep. This legal position holds, in other words, 
        that the government is powerless to reject a proposed hardrock 
        mine on federal land that would permanently contaminate 
        aquifers containing immensely valuable future drinking water 
        supplies, and/or obliterate immensely valuable cultural sites, 
        and/or permanently appropriate many thousands of acres of land 
        immensely valuable for other uses. It is no wonder that the 
        federal land management agencies continue to feel cowed when 
        they contemplate exercising regulatory controls over this 
        industry.
          Mining is a dirty business, and must be carefully controlled 
        to prevent environmental disasters. History teaches not only 
        that things can go bad with hardrock mining operations, but 
        when they do, the costs to repair the damage can be enormous. 
        Well over a century of mining under the Mining Law of 1872 has 
        saddled the Nation's taxpayers with a cleanup cost for 
        thousands of abandoned mines that, according to some estimates, 
        approaches fifty billion dollars. It bears emphasizing that, 
        despite the limited controls modern laws like the Clean Water 
        Act bring to bear on hardrock mining, bad mines still fall 
        through the regulatory gaps. To take just one example, Montana 
        and U.S. taxpayers are today paying millions of dollars to 
        clean up the Zortman-Landusky mine in Montana--a mine which was 
        approved with all the modern laws in place that the industry 
        argues are adequate.
          It is long past time to close these regulatory loopholes and 
        eliminate these ambiguities so as to make clear to all in the 
        industry--as well as to federal land managers--that the 
        hardrock mining industry will be held to the same standards, 
        and be subject to the same kinds of regulatory authority, that 
        apply to all other users of the public lands.

    Since the last time Congress seriously considered comprehensive 
Mining Law reform, more than a dozen years ago, much has changed. 
Today, Mining Law reform is both more imperative and, in my judgment, 
more achievable. Here's why.
    First, the industry structure, operations and economic impact have 
evolved considerably. Thanks to new techniques for processing gold and 
other hardrock minerals from more and more widely disseminated, fine-
particle deposits, the hardrock industry produces more and more 
minerals by moving vastly greater amounts of earth and rock than ever 
before. The United States now produces much more gold than it ever did 
before, and is the third leading producer in the world.
    The industry is also much more heavily concentrated, with many 
fewer companies and many fewer mines than ever before. More than four-
fifths of U.S. gold production now comes from a single state-Nevada. 
The four largest mines, all in Nevada, account for well over half the 
total domestic production. The thirty biggest mines (more than half in 
Nevada, including twelve of the fifteen largest) yield 99% of total 
production. Barrick Gold, a Canadian company, is the biggest, 
accounting for about 40% of domestic U.S. (and 8% of world) gold 
production. Production of copper and other precious metals are 
similarly concentrated.
    Moreover, the hardrock industry now operates with such ruthless 
efficiency that it employs far fewer people than it used to. Its 
workers may be relatively well-paid, but they are far fewer in number 
and much more geographically concentrated than they ever were.
    In the meantime, the economies of the western states have evolved 
rapidly away from their historic roots dependent on resource 
extraction. Today the regional economy where the Mining Law applies--
the western states in the lower 48 plus Alaska--has changed 
dramatically. While mining used to be a dominant industry in many 
western locales (as state nicknames remind us), today its overall 
economic impact is small, even minuscule. The west is now the most 
urban and fastest growing region in the country. Its dynamic growth and 
economic health are fundamentally linked to the quality of life 
provided by the open spaces and recreational amenities of the public 
lands.
    Demographic and economic change has changed public sentiment at the 
ground level. Westerners are increasingly unsympathetic to the idea 
that the hardrock mining industry deserves these special exemptions 
from the laws and policies that apply to everyone else. It is not 
surprising, then, that when the mining industry seeks to exploit its 
favored position under the Mining Law, more and more local people-
ranchers, hunters, anglers, retirees, land developers, tourist industry 
officials, municipal water providers and other local government 
officials-are asking why this nineteenth century policy still exists.
    Their concerns are growing because soaring mineral prices, 
particularly for gold, copper and uranium, have led to a new rush of 
claim-staking under the Mining Law in areas with high values for other 
uses. Mining claims on federal lands recorded with the BLM have nearly 
doubled in just the last four years; there are now close to 400,000 
individual mining claims scattered across federal lands.
    People in the west are also more familiar than most with the 
consequences of failing to control the industry. They live with the 
thousands of abandoned mines scattered throughout the region, and are 
familiar with the sorry legacy of safety hazards, polluted streams and 
disrupted landscapes that will require billions of dollars to repair. 
And they don't appreciate the fact that, under the current regime, the 
dollars to pay for this cleanup will come more from taxpayers than from 
the industry that created the mess.
    Another noteworthy change in recent years is that, for the first 
time, the hardrock mining industry is facing some pressure to reform 
from the demand side-the jewelry industry that consumes much of its 
product. With leadership from Tiffany and other major jewelers, this 
movement has helped persuade some major mining companies, concerned 
about their reputations as well as their impacts, to work to improve 
their practices and make other accommodations to modern social and 
environmental values. In short, the industry is no longer so monolithic 
and so reflexively hostile to change.
    Reforming the archaic Mining Law will not--as some industry 
representatives ritually maintain--put an end to the domestic hardrock 
mining industry. Every year Canada's Fraser Institute surveys mining 
industry executives and uses the results to rank the most favorable 
jurisdictions in the world for hardrock mining, considering a variety 
of factors, including political stability. The American West is always 
at or near the top of the rankings. Furthermore, skyrocketing mineral 
prices means the industry is thriving as never before, and any increase 
in production cost that might result from reform will be modest and can 
readily be absorbed. The basic objective of reform is to put in place 
practices and policies that oil and gas operators, coal miners, 
electrical utilities, ski areas, and other intensive users of the 
federal lands have operated under quite successfully for decades. I 
have no doubt that the innovative, progressive companies in this 
industry-those who have flourished around the world by being so-will 
adapt readily to such reforms, just like other public land users have 
successfully adapted to similar requirements imposed on them over the 
last many decades.
    Now let me address in some detail the questions you posed in your 
September 12 letter of invitation.
    Question: Whether there should be a royalty or alternatives to it, 
including how to structure it:

    I would underscore two goals in designing a system by which the 
hardrock mining industry pays something to the public for the use of 
the public's lands and minerals: First, that it produce real revenue 
for the Treasury, to reduce the deficit and/or to repair some of the 
costs and damage left by past hardrock mining activities. Second, that 
it be efficient to administer, to minimize opportunities for clever 
accountants and lawyers to ``game'' the system. Generally speaking, the 
rule of thumb for a royalty is that the more exemptions, deductions and 
offsets allowed, the more the system can be ``gamed,'' and the less 
likelihood significant revenue will be raised. As an extreme example, I 
would direct your attention to the ``sham'' royalty included in what 
came to be known as the ``sham reform'' proposal that was included in 
the gigantic budget econciliation bill vetoed by then-President Clinton 
in early 1996. My recollection is that the Congressional Research 
Service estimated that it was so riddled with deductions and loopholes 
that it would have raised a paltry $1 million per year from the entire 
multi-billion dollar industry.
    For guidance on both royalty levels and structure, the Committee 
would be well-served to look at the oil and gas and coal provision of 
the Mineral Leasing Act. The context is closely analogous to hardrock 
mining-in each case the objective is to secure a fair share of revenue 
from highly capitalized investments to produce minerals from publicly-
owned lands, that are not without risk and are globally competitive. 
While the Leasing Act royalty systems are not free from opportunities 
for mischief, there is no doubt they raise significant revenue for the 
Treasury in a relatively efficient manner.
    Any royalty or similar payment the Congress might embrace--whether 
8% as in H.R. 2262, the reform bill introduced into the House, or a 
higher percentage comparable to what the oil and gas industry pays-will 
be small compared to risk factors the industry has long faced, like 
fluctuations in commodity prices, and in exchange and interest rates. 
Sizeable return to the government from fossil fuel extraction from 
federal lands has not hurt the competitiveness of that industry.
    Question: Are there alternatives to a royalty?
    A conventional royalty would presumably apply only to mineral ore 
extracted from federal lands. It would not, in other words, include any 
kind of charge for the use of federal lands to support the extraction 
of minerals from formerly federal lands. Many, perhaps even most, of 
the very large hardrock mining operations in the West (which, as I 
noted earlier, are responsible for the vast majority of the total 
domestic production) are on lands in a mixture of ownerships-private, 
state and federal. Often the federal lands, particularly those where 
the ore body is found, may be mere slivers or odd-shaped parcels 
intermixed with others. Sometimes all or most of the actual ore body is 
on non-federal land (often, because it has already been patented under 
the generous terms of the Mining Law). See, e.g., Mineral Resources: 
Value of Hardrock Minerals Extracted From and Remaining on Federal 
Lands (GAO/RCED-92-192, August 1992).
    Even where the U.S. no longer owns any part of the ore body, the 
federal lands usually play a key role in bringing the ore body into 
production-by providing lands for mineral processing, for dumping waste 
rock and mine tailings, and so forth. The United States should, in my 
judgment, receive a financial return for the use of its land in these 
circumstances that reflects its contribution, both past and present, to 
the overall operation.
    Suppose, for example, that the ore body of a large mine is 75% in 
private ownership, having been previously patented under the Mining 
Law, and 25% federal land. That mining operation may permanently use 
thousands of acres of federal land as waste rock dumps and tailings 
piles for the mining operation. It seems to me that a royalty or 
payment to the Treasury which is limited to the 25% of the ore body 
still in federal ownership is inadequate return to the public for this 
use of the public's resources. If access to this federal land were 
granted under Title V of FLPMA-which would be the case if this were a 
power plant, a factory, the user would pay fair market value for the 
land. Mine operators who use thousands of acres of federal land as a 
dumping ground ought to pay something more than a nominal fee to hold 
claims; indeed, their payment ought to reflect some measure of the 
value these federal lands contribute to the entire mining operation. 
This might be done through a much more substantial rental, holding fee 
or other payment, or a severance tax. I appreciate there may be 
jurisdictional complications should this Committee try to craft 
something along those lines, but it seems to me well worth thinking 
about.
    Question: How should revenues from a royalty or other levy be 
distributed?
    I will discuss this below, in connection with abandoned mines.
    Question: What kind of transition rules should there be for 
royalties or other levies?
    As a matter of law, there are in fact very few limits on Congress's 
ability to apply reforms, including a royalty or other fees, or tougher 
environmental regulations, to existing mining claims.
    This is a much misunderstood area. Many believe, mistakenly, that 
all mining claims located on federal lands are constitutionally-
protected ``private property interests'' which limit the ability of 
Congress to reach them. That is not the case. It has long been clear-
reaffirmed in many decisions of the U.S. Supreme Court--that a mining 
claim located on the federal lands carries with it a constitutionally 
protected property right only if it contains a ``discovery'' of a 
``valuable mineral deposit.'' Mining claims which lack such a 
``discovery'' are mere licenses to occupy the federal lands. The legal 
status of locators of such claims is no different from that of a hunter 
or angler or other recreational user of federal lands. ``[I]t is clear 
that in order to create valid rights . . . against the United States 
[under the Mining Law] a discovery of mineral is essential.'' Union Oil 
v. Smith, 249 U.S. 337, 346 (1919); see also Cole v. Ralph, 252 U.S. 
286, 296 (1920).
    The locator of a claim without a discovery does have the right to 
exclude other miners from the claim, so long as the original locator is 
actively exploring for a mineral. This is the ``pedis possessio'' 
(foothold) doctrine recognized by the Supreme Court almost ninety years 
ago. Union Oil v. Smith, supra. But the locator has no rights against 
the United States until a discovery is made. This means the United 
States can change its policy or rules, and even effectively extinguish 
such claims, at any time before a discovery is made, without any 
obligation to pay compensation.
    In practice, almost all mining claims are located in advance of 
discovery. They are located to provide a foothold on public lands in 
order to explore for valuable mineral deposits. Mining claims are 
typically located, in other words, in speculation that a mineral might 
possibly exist and be profitably mined from the claimed land. But hopes 
and speculations, the Supreme Court has long made clear, are not 
tantamount to a ``discovery.'' See, e.g., United States v. Coleman, 390 
U.S. 599 (1968); Sullivan v. Iron Silver Mining Co., 143 U.S. 431 
(1892). Thus most mining claims do not carry with them constitutionally 
protected property rights, and Congress retains practically unfettered 
authority to change the rules regarding them.
    With regard to mining claims that do include a ``discovery,'' the 
analysis is a little different. These contain property rights which can 
give the claimant some argument for compensation in some circumstances 
if the government acts to ``take'' these rights. Whether the argument 
will succeed usually depends on a case-by-case, fact-intensive 
analysis. See, e.g., Tahoe-Sierra Preservation Council, Inc. v. Tahoe 
Regional Planning Agency, 535 U.S. 302 (2002); Penn Central 
Transportation Co. v. New York City, 438 U.S. 104, 123-28 (1978).
    But certain things are clear from Supreme Court decisions in this 
area. For example, the government retains broad authority to impose new 
regulations over mining claims that contain a discovery and a property 
right. The U.S. Supreme Court addressed this exact question in 1985, 
and its guidance is worth quoting at some length:

          Even with respect to vested property rights, a legislature 
        generally has the power to impose new regulatory constraints on 
        the way in which those rights are used, or to condition their 
        continued retention on performance of certain affirmative 
        duties. As long as the constraint or duty imposed is a 
        reasonable restriction designed to further legitimate 
        legislative objectives, the legislature acts within its powers 
        in imposing such new constraints or duties. * * *
          This power to qualify existing property rights is 
        particularly broad with respect to the ``character'' of the 
        property rights at issue here. Although owners of unpatented 
        mining claims hold fully recognized possessory interests in 
        their claims, we have recognized that these interests are a 
        ``unique form of property.'' * * * The United States, as owner 
        of the underlying fee title to the public domain, maintains 
        broad powers over the terms and conditions upon which the 
        public lands can be used, leased, and acquired. See, e.g., 
        Kleppe v. New Mexico, 426 U.S. 529, 539 (1976). * * *
          Claimants thus take their mineral interests with the 
        knowledge that the Government retains substantial regulatory 
        power over those interests. * * * In addition, the property 
        right here is the right to a flow of income from production of 
        the claim. Similar vested economic rights are held subject to 
        the Government's substantial power to regulate for the public 
        good the conditions under which business is carried out and to 
        redistribute the benefits and burdens of economic life.

    United States v. Locke, 471 U.S. 84, 104-05 (1985) (emphasis 
added). As this last-quoted sentence from Court's opinion makes clear, 
the government retains the right to require a payment (whether labeled 
a tax, royalty, fee, or something else) from a holder of a mining claim 
on federal lands, even one with a discovery and a property right, as 
part of its continuing redistribution of the benefits and burdens of 
economic life. In general, the Supreme Court has never given credence 
to arguments that federal taxes and fees constitute takings of private 
property. See, e.g., Cole v. LaGrange, 113 U.S. 1, 8 (1885) (``the 
taking of property by taxation requires no other compensation than the 
taxpayer receives in being protected by the government to the support 
of which he contributes''); County of Mobile v. Kimball, 102 U.S. 691, 
703 (1880) (``neither is taxation for a public purpose, however great, 
the taking of private property for public use, in the sense of the 
Constitution'').
    It is well-established that the ``discovery'' creating a property 
right against the government is dependent upon the marketability of the 
mineral. This means the right may vanish-and with it the property right 
against the government-as a result of changed conditions. As the 
Supreme Court has held, a ``locator who does not carry his claim to 
patent  . . . does take the risk that his claim will no longer support 
issuance of a patent.'' Best v. Humboldt Placer Mining Co., 371 U.S. 
334, 336 (1963).
    In this connection, the Interior Department and the federal courts 
have long held that, in determining whether a discovery exists, the 
cost of complying with environmental laws and regulations must be taken 
into account. The courts have recognized that new environmental 
restrictions may affect claim validity, and reduce or eliminate the 
government's obligation to compensate claimants. See, e.g., Clouser v. 
Espy, 42 F.3d 1522 (9th Cir. 1994) (``virtually all forms of 
[government] regulation of mining claims-for instance, limiting the 
permissible methods of mining and prospecting in order to reduce 
incidental environmental damage-will result in increased operating 
costs, and thereby will affect claim validity. However, the  . . . case 
law makes clear that such matters may be regulated by the 
government''); Reeves v.United States, 54 Fed. Cl. 652 (2002) 
(compensation denied to a claim locator who was prevented from 
developing claims he located in a wilderness study area on federal 
land).
    For all these reasons, I believe it is well settled that the 
government has nearly unfettered authority to apply newly enacted laws 
and regulations, including a royalty, to mining claims that are not 
accompanied by a discovery; that is to say, most of the several hundred 
thousand claims currently of record. It also has very considerable 
power to apply to new laws and regulations to mining claims that 
include a discovery, without creating any obligation to compensate the 
claimants.
    Because of the strength of the case for congressional authority, I 
was dismayed by the rather casual assertion of the Administration's 
witness, at the House hearing on Mining Law reform on July 25, that a 
royalty on existing claims would raise constitutional ``takings'' 
questions. Given the analysis I set out here, I recommend the Committee 
give no weight to such assertions unless the person making it supplies 
the Committee with a legal memorandum backing up its assertion by 
refuting the analysis offered here.
    While there is very little legal limit on the ability of Congress 
to impose a royalty or other levy or to tighten environmental 
regulation of existing claims, obviously Congress can take equitable 
considerations into account, such as capital investments that have 
already been made in existing mines. But I would strongly discourage 
applying royalties or other levies or new environmental regulations 
only to claims located after enactment of reform legislation. Most 
areas of federal land that have significant likely mineral potential 
are already blanketed with claims. Most of these claims lack a 
discovery and a concomitant property right. Most have seen little 
investment and are being held speculatively. Most mines likely to open 
in the next few decades will probably be on already located claims. 
Thus exempting existing claims from new requirements (permanently, or 
for a period of years) would be a huge loophole and not provide genuine 
reform.
    As I indicated earlier, any levy that emerges from Congress will be 
a small factor in the overall profit and risk picture for these 
enterprises. Furthermore, there are various ways to craft a royalty or 
other levy that adjusts its impact to overall profitability. Payments 
to the government might be on a sliding scale depending upon overall 
commodity prices; e.g., if the price of gold doubles or is halved, the 
royalty or other payment is adjusted accordingly.
    Question: Whether to eliminate patenting entirely or only partially 
and whether to provide some other mechanism for security of tenure.
    At one time, I thought that further patenting under the Mining Law 
was never justified. But after further reflection I believe that 
privatization of the federal lands involved in large hardrock mining 
operations can be justified under certain carefully defined conditions. 
As I have already noted, many, perhaps most, major hardrock mining 
operations in the West are on lands in a mixture of ownerships--
private, state and federal, with the federal parcels often mere slivers 
or odd-shaped parcels intermixed with others.
    Giving mining companies title to federal lands involved in these 
operations would consolidate and simplify ownership and reduce 
regulatory and other complexities. After operations cease, the lands 
involved often serve very little public value for other uses. Moreover, 
continuing federal ownership can cloud the responsibility for 
protecting public health, safety, and the environment from pollution 
endemic to these sites.
    On the other hand, I can think of at least two federal interests 
that are implicated in any proposal to privatize these federal lands.
    First, taxpayers deserve a fair return on valuable publicly-owned 
resources. There is no reason why the U.S. could not protect this 
fiscal interest while still privatizing these lands; e.g., Congress 
could make privatization contingent upon the mining operation making a 
payment (lump sum or periodic) to the Treasury to capture an 
appropriate share of future income streams made possible by the use of 
these federal lands in these mining operations.
    Mining companies have sometimes showed a willingness to entertain 
such arrangements and pay real money to simplify and secure their land 
positions. In the last Congress and again in this one, for example, 
legislation has been introduced to approve a complex series of land 
exchanges in Arizona between the United States and the Resolution 
Copper Company (a joint venture between BHP Billiton and Rio Tinto). 
According to news reports, Resolution is seeking to tap a large deep 
underground copper deposit. While it already owns or controls 
considerable land in the area, it wants title to some federal land 
(which may or may not include part of the ore body) to facilitate the 
operation. To gain title (through a proposed congressionally-approved 
exchange), Resolution is apparently willing to pay the United States 
substantially more than it would be required to pay to gain title under 
the Mining Law (assuming Congress failed to renew the annual moratorium 
on patenting, and assuming Resolution qualified for patents). That is, 
Resolution has acquired title to and is offering to trade to the United 
States considerable land of high conservation and recreational value. 
Not having examined the details of this proposal, I am not prepared to 
comment on whether the arrangement represents a fair return to the 
federal taxpayer. But it is an example of a major mining entity being 
willing to pay genuine value for privatizing federal land in order to 
facilitate a major mining operation.
    Second, the U.S. should ensure that privatization does not unduly 
threaten the environment in general, and nearby federal lands in 
particular. So long as the U.S, retains title to some of the lands 
affected, some environmental regulations and procedures that attach 
only to federal decisions (such as are made with respect to federal 
lands) would continue to apply--such as NEPA, Endangered Species Act 
7, National Historic Preservation Act, Native American consultation 
and protection laws, and parts of the Clean Water Act. Here too, 
however, I believe it should be possible to fashion ways to protect the 
federal interest protected by these federal laws. For example, 
privatization might be conditioned on working out an agreement or 
compact between state and federal regulators that establishes a 
regulatory framework to do this.
    For these reasons, I think privatizing federal lands involved in 
major hardrock mining operations need not be ruled out. I hasten to 
point out, however, that patenting has a long and sorry history of 
abuse. Most of the 3.2 million acres patented under the Mining Law 
since 1872 have in fact never been used, or used very little, for 
mining. Instead, they have been used for residential or other kinds of 
development, as private recreational retreats, spas, golf courses, and 
many other things. Given that record, any legislation that retains some 
opportunity to privatize lands in connection with hardrock mining must 
be very carefully drawn.
    In short, I think privatization is an option worth considering, so 
long as it (a) is narrowly tailored to apply only to active or approved 
bona fide major mining operations; (b) retains for the U.S. the 
discretion to decide whether, under all the circumstances, the public 
interest is better served by deeding the land to the mining company 
rather retaining it in public ownership; (c) provides appropriate 
compensation to the United States for the fair value of the federal 
lands and minerals involved in the land being privatized; and (d) 
accommodates federal interests in protecting federal lands and 
resources not being privatized through some arrangement worked out in 
advance with state regulators.
    While the hardrock mining industry is naturally concerned about 
security of tenure, no other industry operating on federal lands has a 
guarantee of perpetual tenure. All are subject to periodic 
reexamination and reevaluation, and environmental and other operating 
standards are readjusted from time to time. This is, indeed, a fact of 
life in all natural resource enterprises operating around the globe. 
Market and other forces are usually far more important to the tenure of 
these enterprises than the decisions of government land managers.
    Question: How can the administration and efficiency of the Law be 
improved?
    The Mining Law contains many provisions which plague the industry. 
This is not surprising, considering that the Law was mostly designed 
for ``pick-and-shovel'' mineral activities common in the mid-nineteenth 
century. Today's vastly changed industry bears no resemblance to the 
kinds of activities for which the Law was designed. As a result, the 
Mining Law contains inadequate protection for legitimate explorers 
against claim-jumping by rival miners, and has some limits on claim 
size that seem arbitrary and anachronistic. I devoted considerable 
attention in my 1987 book on the Mining Law to many of these features.
    I believe reform legislation could well address these matters. The 
most important reasons to reform the Mining Law remain, however, to end 
the opportunity for wholesale patenting, to capture some revenue for 
the public owners of the minerals and land involved, and to hold the 
hardrock mining industry to the same kinds of environmental standards 
and regard for other uses of the federal lands that are routinely 
applied to all other users of the federal lands.
    If reform legislation contains adequate measures on these three 
points, I believe Congress should, at the same time, consider and 
incorporate any reasonable suggestions the hardrock mining industry has 
to make the Law more simple and efficient from its perspective. The 
Congress should, however, take care to ensure such improvements do not 
undermine or defeat the thrust of the legislation on the three most 
important points.
    Question: Whether environmental standards, regulations, monitoring 
and enforcement need modifying, such as whether a federal land 
management agency can deny approval of a permit to a mining operation 
which meets environmental standards because of other land resource 
values and uses (environmental and other).
    As I indicated earlier, I believe that clarifying and upgrading 
environmental standards is a principal reason to reform the Mining Law. 
I do not believe existing standards and practices are adequate to 
protect multiple uses of the public lands and a healthy environment.
    Looking first at the Bureau of Land Management's current ``Part 
3809'' regulations governing surface management of hard rock mining on 
BLM-managed lands, early on the George W. Bush Administration weakened 
these regulations significantly, removing a number of key provisions 
that had been added by the Clinton Administration. Compare 65 Fed. Reg. 
69,998 (2000) with 66 Fed. Reg. 54,837 (2001). One of the most 
important was to eliminate the federal government's authority to 
disapprove proposed hardrock mines on federal lands that threatened 
devastating, uncontrollable harm on other important natural and 
cultural resources.
    The Bush Administration acted on the basis of a Solicitor's Opinion 
issued by my successor, which overruled an opinion I had issued in 
1999. These legal opinions differed on how to interpret a key phrase in 
the Federal Land Policy and Management Act of 1976 (FLPMA), where 
Congress expressly amended the Mining Law to require the Interior 
Secretary to protect the public lands from ``unnecessary or undue 
degradation'' (emphasis added). 43 U.S.C.  1732(b).
    My legal opinion was that ``or'' means ``or,'' so that BLM has a 
responsibility to regulate hardrock mining on the public lands to 
protect against ``undue'' degradation, even if that degradation is 
regarded as ``necessary'' to mining. My successor's legal opinion was 
that ``or'' really ought to be construed as meaning ``and.'' Thus, in 
his view, BLM has no authority to prevent hardrock mining that causes 
``undue'' degradation if such degradation is ``necessary'' to mining.
    Environmental groups asked a federal court to settle this dispute. 
After full briefing, the court ruled that my reading of FLPMA was 
correct, and the Department has the responsibility to say no to 
proposed hardrock mines that cause ``undue'' degradation even if it is 
``necessary'' to mining. Somewhat bizarrely, however, the court decided 
not to set aside the Bush Administration's removal of the right to 
prohibit devastatingly bad mines from the Part 3809 regulations. 
Conceding the question was ``indeed extremely close,'' the court was 
persuaded by the Department of Justice's argument that--even conceding 
that the Bush Administration's Solicitor was wrong on the law--those 
regulations need not articulate that authority in so many words, 
because they could be interpreted as allowing the Department to 
prohibit such mines, and environmental groups could challenge 
Interior's decisions in particular cases in the future. Mineral Policy 
Center v. Norton, 292 F. Supp. 2d 30, 46 n. 18 (D.D.C. 2003). Neither 
side appealed this ruling.
    Turning to national forest land, the counterpart U.S. Forest 
Service regulations (36 C.F.R. Part 228) are even weaker. This is not 
surprising, for the Forest Service was long reluctant to do any 
regulation of hardrock mining on national forests. Congress gave it 
express authority to regulate mining to prevent destruction of the 
national forests way back in 1897 (see 16 U.S.C. Sec. Sec.  478, 551), 
but it did not exercise this authority for more than three-quarters of 
a century. The regulations it finally adopted in 1974 were relatively 
tepid and have changed little since, despite vast ensuing changes in 
hardrock mining technology and practices.
    Among other things, they require mining operations only to be 
``conducted so as, where feasible, to minimize environmental impacts on 
National Forest resources,'' 36 C.F.R.  228.8 (emphasis added), and 
they require operators to take only those measures to ``maintain and 
protect fisheries and wildlife habitat which may be affected by the 
operations'' that are ``practicable''; id., at 228.8(e) (emphasis 
added). In other words, the Forest Service, like the Interior 
Department, currently takes the position that the government cannot 
prevent a proposed hardrock mine on lands it manages even if it 
threatens dire environmental harm. The courts have refused to overturn 
this position. Okanogan Highlands Alliance v. Williams, 236 F.3d 468 
(9th Cir. 2000).
    In my judgment, this is too important a matter to be left in this 
current state. I believe the law should clearly state that the 
government has the responsibility to prevent proposed hardrock mining 
operations if it finds severe, un-mitigatable adverse impacts would be 
visited on other important public resources and values. The public 
interest requires no less. Every other user of the public lands--oil or 
coal company, forest products company, electric utility, rancher, 
hunter, angler, or hiker--is held to that common-sense standard. 
Hardrock mining, which has the potential to cause more serious 
disruption than any of these others, deserves no special exemption.
    Finally, the question posed suggests that a distinction may be 
drawn between ``environmental standards'' and standards to protect 
``other land resource values.'' I do not believe this distinction is 
easy to draw, nor do I think it is useful to draw in this context. 
Environmental standards are imposed for the purpose of, among other 
things, protecting other resource values; e.g., an important reason the 
government controls air and water pollution is to protect wildlife 
habitat. Moreover, the ``other . . . resource values'' that the 
government is responsible for protecting in this context are on public 
lands. Every decision made to allow a particular use of public lands 
ought to consider the impact of that use on other uses and values. The 
government routinely does that when it decides whether to issue coal or 
oil and gas leases, sell timber, issue permits for livestock grazing, 
site power plants or other energy generating facilities, or allow 
hunting or off-road vehicle use or even hiking. I do not believe there 
is any persuasive reason to give proposals to open hardrock mines an 
exemption.
    Question: Whether additional categories of public land should be 
withdrawn from hardrock mining.
    I know that the industry has expressed particular concern about the 
idea of withdrawing national forest lands subject to the roadless rule 
from new mining claim location. Many do not realize that under the 
Clinton Administration's so-called ``roadless rule'' (whose future is 
still in doubt, being mired in litigation) national forest roadless 
areas remain open to new mining claim location and to the possibility 
of hardrock mineral development. Even new roads might be built in such 
areas to serve proposed hardrock mines. The extent to which the Forest 
Service can and would limit or control such road-building is left murky 
in the rule and in its preamble.
    I would argue that this matter should not be left uncertain. I 
understand that substantial numbers of new claims have recently been 
filed in such roadless areas, suggesting the very real possibility of 
future conflict. Yet there is much room to doubt whether, in reality, 
any proposed new mines will ever be opened in these areas. They are by 
definition remote, with difficult access and, wholly apart from legal 
restrictions, have high development costs. Also, nearly all of these 
lands have been open to mineral development for well over a century, 
yet no significant development has taken place (else they would no 
longer be roadless). My recommendation would be to close them to new 
claim location, subject to whatever valid existing rights exist.
    I also recommend that uranium be withdrawn from the Mining Law. The 
other energy resources--coal, oil and gas, tar sands, oil shale, and 
geothermal resources--are all governed by leasing systems, most of them 
dating back to 1920. These industries have not been hampered, and the 
public's fiscal and environmental interests are better protected. 
Uranium is the only energy mineral treated differently, and it only to 
some extent. Some federal uranium is already subject to leasing rather 
than to the Mining Law-a result of some post-World War II withdrawals 
of some federal land on the Colorado Plateau (which vested the Atomic 
Energy Commission with jurisdiction over this leasing, now exercised by 
the Department of Energy).
    There is no justification for continuing to subsidize the domestic 
uranium industry (and with it the civilian nuclear power industry) by 
allowing publicly-owned uranium to be mined without a royalty or other 
payment to the Treasury. As with hardrock mining, past uranium mining 
and milling has left a big cleanup bill for the taxpayer. The 
government is currently spending many millions of dollars, for example, 
to move a large mill tailings pile away from the banks of the Colorado 
River adjacent to Moab, Utah, and has spent much public money in 
cleaning up uranium mines and mills in the past. And there is more to 
do. Consumers of uranium should pay these bills, not taxpayers. 
Finally, there is no strategic argument for subsidizing domestic 
uranium production when friendly countries like Canada and Australia 
have abundant uranium resources. For all these reasons, I believe the 
idea of simply putting uranium under the Mineral Leasing Act ought to 
be given very serious consideration. It would be a welcome part (but 
only a part) of Mining Law reform.
    I also urge the committee to consider crafting a special process 
for state and local governments to petition the federal government to 
withdraw tracts of federal land from the Mining Law where they can show 
special reasons for local concern. Many communities in the West derive 
water supplies from watersheds that could be severely impacted by 
hardrock mines. Many derive important economic and other benefits from 
federal lands nearby that could be threatened by hardrock mines; e.g., 
gateway communities to federal land areas with high recreational use, 
big game habitat and the like. While some of these lands may already be 
withdrawn, some may not. It seems to me appropriate to give state and 
local governments a special process to petition the government to 
withdraw lands from new mining claims, to give such petitions 
presumptive validity, and to require the federal government to act on 
them promptly.
    Question: Whether coverage of existing environmental laws is 
sufficient and if not what gaps must be addressed.
    In my judgment, existing BLM and Forest Service regulations do not 
adequately address hardrock mining's potential for adverse impacts on 
surface and groundwater supplies, which can be considerable. The Ninth 
Circuit recently ruled, for example, that existing federal law did not 
require BLM to protect water supplies in approving hardrock mining 
plans. Great Basin Mine Watch v. Hankins, 456 F.3d 955 (9th Cir. 2006).
    Neither the BLM nor the Forest Service do a very good job 
regulating small-scale mining operations--so-called ``notice only'' 
mines and wildcat explorations. Compliance with laws like NEPA, the 
Clean Water Act or the Endangered Species Act is often wanting, and 
these operations sometimes mishandle toxic chemicals and use 
earthmoving equipment carelessly, devastating fish and wildlife 
habitat. Yet many times other users of federal lands and the public do 
not even get notice in advance of these operations.
    Finally, there is the matter of ``bonding,'' where the government 
requires operators to provide financial assurance for cleanup so that 
the taxpayer does not foot the bill if the operator defaults or goes 
bankrupt. To its credit, the George W. Bush Administration did not 
relax the Clinton Administration's tightening of bonding standards in 
the Part 3809 regulations. The Forest Service regulations are not as 
good, leaving it with much more discretion on bonding.
    Several governmental reports have documented that bonds are still 
sometimes set at inadequate levels, putting the taxpayers at risk. See, 
e.g., Hardrock Mining: BLM Needs to Better Manage Financial Assurances 
to Guarantee Coverage of Reclamation Costs (GAO # 05-377, June 2005) 
(reporting on a 2004 survey showing 48 mining operations on public 
lands had closed without cleanup since BLM began requiring financial 
assurances; in more than half the cases, the financial assurance was 
inadequate, to the tune of at least $56 million, to cover the cleanup 
costs); see also Environmental Liabilities: Hardrock Mining Cleanup 
Obligations (GAO #06-884T, June 14, 2006) (recommending hardrock mining 
be given a high priority in developing financial assurance 
requirements, because of the serious risk to taxpayers; some mine 
owners have defaulted on multiple occasions, leaving taxpayers to bear 
cleanup costs); Environmental Liabilities: EPA Should Do More to Ensure 
that Liable Parties Meet Their Cleanup Obligations (GAO #05-658, August 
17, 2005); US EPA, Office of Inspector General, Nationwide 
Identification of Hardrock Mining Sites (Report No. 2004-P-00005, March 
31, 2004).
    While federal officials generally try to require financial 
assurances in the amount sufficient to repair and reclaim what they 
forecast will be the adverse effects of the proposed mine, their 
forecasts often prove to be unduly optimistic. Recent studies show they 
often underestimate the amount of environmental degradation from 
proposed hardrock mines, particularly from disruption and pollution of 
water supplies. See Ann Maest and Jim Kuipers, Comparison of Predicted 
and Actual Water Quality at Hardrock Mines: The Reliability of 
Predictions in Environmental Impact Statements (2006); and Predicting 
Water Quality at Hardrock Mines: Methods and Models, Uncertainties, and 
State-of-the-Art (2006). The cost to repair or control that kind of 
damage can be high, and the bond amount-which is often calculated 
simply on the basis of moving dirt, replacing soil and reestablishing a 
vegetative cover--can be woefully insufficient to cover it.
    Question: What is the extent of the problem of abandoned mines, and 
what funding mechanisms and priorities should be put in place to deal 
with it.
    I have already noted that the problem is huge; while exact 
estimates vary, there is no doubt that there are many thousands of 
abandoned mines on the federal lands which pose continuing safety and 
pollution problems, and that the cost of cleaning up these problems 
runs into the tens of billions of dollars. An informative report on 
this subject is Patricia Nelson Limerick, et al., Cleaning Up Abandoned 
Hardrock Mines in the West: Prospecting for a Better Future (U. of 
Colo. Center of the American West, 2005), available at http://
www.centerwest.org/publications/pdf/mines.pdf.
    In considering this problem in the overall context of Mining Law 
reform, I would urge that the first principle be one borrowed from the 
Hippocratic Oath--do no harm. Reforming the Mining Law should cement in 
place environmental standards and controls sufficient to prevent the 
already huge problem of abandoned mines from getting worse.
    Second, in my judgment, it is entirely appropriate that a 
significant part of the revenues raised by any royalty or other levy be 
set aside for helping repair the vast legacy of past hardrock mining 
operations on federal land in the west. Often the owners and operators 
can no longer be found to bear the costs.
    Third, in terms of standards for cleanup, it seems obvious that 
serious safety problems need to be put at top priority, with serious 
pollution and other environmental problems second. But I would caution 
against mandating any comprehensive inventory of the scope of the 
problem before on-the-ground work can begin. Many states and some 
federal agencies have been evaluating the particulars of this problem 
for many years. Fourth, federal money should be limited to cleaning up 
federal lands, or sites that are in mixed federal and state/private 
ownerships. There is plenty to do for the foreseeable future on federal 
lands. Other laws, federal, state and local, may provide remedies to 
clean up abandoned sites on non-federal lands. In generally, I think 
the approach to this problem contained in the reform bill introduced in 
the House, H.R. 2262, is a sound one.
                               conclusion
    I commend your leadership for taking up this important issue. You 
have the best opportunity in a generation to achieve a landmark legacy 
in public land policymaking. I stand ready to help any way I can to 
move this forward, and I would be happy to answer any questions you may 
have.

    The Chairman. Thank you very much.
    Thank you both. Let me just start with a couple of 
questions. Mr. Butler, let me ask on this issue of patenting. I 
think Mr. Leshy's testimony was that he thinks there's a 
consensus that patenting no longer makes sense, that we ought 
to have some other system for making public land available, 
rather than just giving fee simple to those who stake claims to 
mine. What's your view on that? Do you think that a reform of 
the Mining Law should include the elimination of a patenting 
process?
    Mr. Butler. I'm not sure I'd agree that patenting no longer 
makes sense, but I think the judgment has been that it's not 
longer politically viable. That transferring those lands into 
private hands is at odds with the general public policy of 
holding on to public lands. So that other means need to be 
found to give operators a security in the piece of land where 
they put their property--apart from a patent--but something 
that--unpatented mining claims, because of the vagaries of the 
law, can sort of come and go in terms of their property rights. 
So you need some certainty of the title before you make that 
investment.
    I've got a picture* of the Gold Strike mine, that I was 
going to use, and I'll be very quick so as not to take your 
time. These are processing facilities at the Gold Strike 
property. This is the roaster, this is the autoclave, those 
were two properties built by Barrack, because the particular 
kind of ore at this property requires a different kind of 
processing. They were developed and patented in the sense of 
intellectual property and then built at a cost of, between the 
two of them, about $1 billion. People don't make those kinds of 
investments if they don't have some belief that the land that 
they're sitting on is going to remain under their control.
---------------------------------------------------------------------------
    * Photo has been retained in committee files.
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    The Chairman.What's the right way to accomplish that? 
Through a leasing arrangement, like we do with oil and gas, or 
what?
    Mr. Butler. I think, actually I think there are some 
simpler ways to do it, if you're not going to patent it. You 
can simply make the title to those lands that are included 
within a plan of operations, secured by the payment of claim 
location fees. It's not a complicated problem, but I, and I 
think you can get around it. Again, there may be some details 
where you want to deal with closure issues and post-mining land 
uses, but I think you can secure the title in those through the 
existing claims system.
    The Chairman. Let me ask also about this suggestion or 
point that Mr. Leshy made about current law that allows 
unlimited right to use an unlimited amount of public land for 
the various attendant activities that go with mining. Once you 
establish a mining operation, as I understand it, if you want 
to have a tailings site, if you need other processing sites 
that might----
    Mr. Butler. You can that this is the table, this is the, 
these are, this is the tailings, that in background, that's one 
of the waste rock dumps.
    The Chairman. Right. So, should a reform of the Mining Law 
contain some types of limitations on the extent of the mining 
companies' ability to use public land for these purposes?
    Mr. Butler. There is a limitation in existing law that says 
you can only use those lands that are necessary for ancillary 
facilities. While John, I think, disagrees with that, I don't 
think there are circumstances where people have spread out 
waste rock dumps over, you know, thousands of extra acres that 
they didn't need. You know, there are design factors and I 
think the regulations can impose, you know, sort of reasonable 
design requirements. I think the limitation is in the law and 
should remain, that you can use what is necessary to support 
the mining operation.
    The Chairman. All right.
    Mr. Leshy, I think in your testimony, you suggest that 
uranium should be withdrawn from the Mining Law and made 
subject to leasing. Could you elaborate on that suggestion a 
little bit?
    Mr. Leshy. Yes. You know, if you look at all the other 
energy minerals--fossil fuels, coal, geothermal, et cetera, 
they're all leasable. Uranium is the only energy mineral that's 
not leasable. It also a kind of embedded, like, geologically 
similar to other, the fossil fuels in many respects. So, 
there's frankly no real good reason why the one mineral that 
has, you know, strategic significance for energy, et cetera, 
should be subject to the Mining Law. It sort of stands out 
there as an exception, nobody was thinking about it, obviously, 
when the Mining Law was adopted.
    It is also, because it is under the Mining Law, there's no 
royalty, there's no rental, et cetera, it produces no return to 
the Treasury. It seems to me, for all those reasons, that it 
ought to be treated more like coal and oil and gas than like 
gold and silver and zinc and copper.
    The Chairman. Senator Domenici.
    Senator Domenici. Mr. Leshy, if your country is short on 
mineral development and that's a matter of fact and 
established--I'm not saying that is the case, but if it is and 
if it was--why would it be so important that we have a 
remuneration to the Federal Government, rather than a set of 
laws that would get the minerals developed and the properties 
maintained? When the minerals are no longer there, that the 
property would be returned. What's wrong with that as a model?
    Mr. Leshy. In terms of general policy toward public lands, 
the Congress and the Government as a whole, for a very long 
time, has basically adopted the view that these are public 
resources and if they're exploited, the public owners of these 
resources ought to get some sort of remuneration.
    Senator Domenici. Sure.
    Mr. Leshy. That is, you know, of course, in a way that goes 
back to, I suppose, the monarchies and the idea that the, the 
whole idea of the royalty is that the king reserves, you know, 
a portion of the mineral wealth of the country.
    So--but we apply that general principle way beyond 
minerals. So like I said, almost everything else, timber, 
forage, camping opportunities, et cetera. So, the idea that if 
you exploit the public's resources, you should pay the public 
Treasury something for that is a long-standing idea that's 
firmly embedded in policy and the----
    Senator Domenici. The word exploit is an interesting word 
because that's what you keep using. You know, I don't want to 
spend much time on this because we'll all be, obviously, dead-
set moving toward royalties of some type. So long as we don't 
kill the cook, you know, we ought to have royalties.
    The most important thing is that something good occur for 
the United States of America and that if, in fact, we're going 
to develop minerals that we really need, and if you put too 
much of a royalty on, you're not going to develop them, then it 
doesn't do any good to talk about the fact that everybody else 
does it. It doesn't do any good to say that it's exploitation 
when, who knows if it's exploitation. You put it down on paper 
and add up pluses and minuses, it might not be. It might be the 
cheaper the royalty, the more America gets. That's a 
possibility, right?
    Mr. Leshy. Yes. I did not mean, by using the word exploit, 
any negative connotation. Extract, substitute extract for 
exploit. What I meant was when you use the public's resources.
    Senator Domenici. OK. That's fine.
    Mr. Butler, I'm interested in your interpretation of 
unnecessary or undue degradation, a standard contained in the 
Interior Department's regulations.
    Mr. Butler. I think that goes to the issue that John raised 
in his testimony about BLM's right to say no to what he called 
a bad mine. I think he's wrong on that because--and it's partly 
a question of timing and partly a question of characterization.
    The, under the Federal Land Policy and Management Act, the 
Secretary has authority, the Interior Department has authority 
to say no to mining anytime, anywhere, any location. They can 
withdraw those lands from the operation, the mineral laws and 
claims can not be staked there. That's an authority that is 
frequently used. In the BLM land use planning process, that--
the agencies are supposed to look at lands that should be 
withdrawn, and they frequently do.
    I did a quick scan of land use plans that are pending in 
Utah, there's one in Moab. They proposed to withdraw another 
80,000 acres. One in Vernal, they proposed to withdraw another 
40,000 acres. They can place restrictions on particular areas 
by designating them as areas of critical environmental concern.
    So I think that the Government has adequate authority to 
say no to mining, but they have to say it at the land use 
planning stage. They can't say no to a mine that otherwise 
meets all applicable environmental standards. That is, you get 
your water quality permit, your reclamation, your air permit, 
you post your bond, you comply with the Endangered Species Act, 
you comply with the National Historic Preservation Act. You 
can't go down, you can't go through that whole process, which 
was described on that flow chart, and the BLM land use manager 
say, ``Well, now I've decided, even though you've spent 5 years 
in the permitting process, you've invested $50 million in 
developing this, and we've completed an EIS, and you meet every 
applicable standard. I've decided you're a bad mine and I don't 
want to permit you,'' or, ``I've decided that the land that 
you're on is more valuable for recreation or some other use.'' 
That, I agree, is a correct interpretation of the law. The 
Government can say no, but they can't say no at the end, if you 
meet all the applicable standards.
    Senator Domenici. Something goes around in my brain, that 
last time we took a crack at this, it was because some kind of 
a scandal was allegedly brewing, and that had to do with how 
the mining company ends up getting to use the property at some 
point in time for things that have nothing to do with mining. 
Is that still a problem or did we solve that issue?
    Senator Craig. Patent----
    Mr. Leshy. I think it's, that particular issue is largely 
solved, because the--well, it's solved in the sense that 
there's no more patent applications. So if you want to use the 
land for hotels or whatever, you can't get a patent. If 
patenting resumed, it could be a problem again because, the 
fact is, about 3.2 million acres have been patented under this 
law since 1872 and GAO has looked at this from time to time and 
determined that the vast, vast majority of that acreage has 
never been mined. I mean, there is a very long history of 
Mining Law being used for patenting for purposes that have 
nothing to do with mining.
    That problem has generally reduced over the years with a 
little more Government oversight scrutiny and all of that. But 
it is--it is still a potential problem because in order to get 
a patent, you don't have to be mining. That's--that's a clear 
principle of the law and so that opens the door to this kind of 
event.
    Senator Domenici. If we're reforming the Mining Law, we can 
look at that issue, though, right? Come out with a Mining Law 
that doesn't permit that, right? We could do that.
    Mr. Leshy. Yes, you can address that issue. Yes. You could 
end that problem.
    Senator Domenici. It seems to me, rather than leave it as 
one of these sores out there that gives everybody an 
opportunity to take a whack at it, you know, you probably don't 
need it.
    People used to try to talk me into the fact that they 
needed hotel property. I never did believe it. I don't remember 
who I sat by that tried to convince me, but I think he might be 
present here, but I'm not sure. Would one of the Senators ever 
do that?
    Senator Craig. Never.
    Senator Domenici. Never. OK.
    Mr. Butler, in his written testimony, Mr. Leshy is rather 
dismissive of the takings issues associated with applying 
royalties to mining operations retroactively. As a matter of 
legal merit--but also in terms of a policy decision before this 
committee--can you state your thoughts on this matter?
    Mr. Butler. Sure, that goes to the question of when the 
royalty will apply, the transition rules or the grandfather 
rules. Mr. Leshy's testimony discusses some of the legal issues 
and concludes that it's Constitutionally permissible to apply a 
royalty to existing claims, particularly those that don't have 
a discovery. I don't disagree with that. I think you have that 
authority. Whether or not it's a good thing to exercise that 
authority, I think that's the question.
    I also think that there will be a narrower range of cases, 
those operations that do have discovery and are affected 
directly by the royalty, where there may be some takings issues 
raised. I think those are more case by case, rather than a 
restriction on Congressional authority.
    But on the policy side, I think, Senator, it goes back to 
the remarks that you made a few minutes ago about how the 
royalty will affect decisionmaking and affect operations of 
existing mines. I--if you consider, apart from the model I 
talked about the investment decision--if you've got an 
operating mine, you're trying to keep, you know, enough cash 
coming in to pay your costs. So you may, in the rough times 
when prices are low, you may keep that mine open even if you're 
not achieving that rate of return, because you hope that you 
can cover your costs and prices will go up. If you impose a 
royalty on those operations, there does come a time--you know, 
that is an additional cost, again if it's not based on 
profitability--an additional cost that you have to bear. That 
could force some mines, again in those hard times, and in 
those, when the operations are close to the margins, that could 
force additional mines to close.
    So I think you have to be very careful about where you 
apply the royalty. I think the best policy is to not apply it 
to those companies that have made investment decisions based on 
the current structure.
    Senator Domenici. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Senator Craig.
    Senator Craig. Mr. Chairman, thank you very much.
    All that is being discussed this morning, I find 
refurbishing memories. I'm flipping through my mental Rolodex 
at this moment, Mr. Chairman, thinking about some of these 
things. Let me highlight a couple of them that I think are 
tremendously valuable.
    Patenting gave certainty. If we're not going to use 
patenting any more--and I don't disagree with Mr. Leshy, times 
have changed--then we must provide certainty. How do you do it? 
You might do it with a lease. Do we want to allow public land 
to become private land? It appears we don't want as much of 
that anymore. But we have to provide certainty, stability for 
these kinds of very huge investments to be made.
    If we don't do that, and if at the end of the day, 832 days 
later, that BLM land manager out there says, ``Nope.'' Then 
$60, $80, $100 million and 837 days in the State of Nevada--
investors will not come. They can not make that kind of 
investment without certainty.
    I understand what Mr. Leshy is saying. There is one of our 
biggest problems. That's where the frustration hits the road. 
Yes, it takes land, surface land. We all think of getting down 
in the ground or digging a pit. It also takes surface to 
operate these large new mines of significant value. That 
surface is impacted. I don't dispute that.
    I've passed the day when I think you ought to get private 
property, reversion. We're going to let them use the land under 
certain restrictions for the purpose of bringing out the 
resource, and when the resource is depleted, we can revert. But 
in that time we must provide certainty. I'm not sure yet how to 
do it.
    Now, devil's in the detail. What is the debate we've just 
finished on oil leasing? Somebody's decided that when we 
designed oil leasing to push out into the deep waters of the 
Gulf, we would reserve the right, but we would grant the right 
of certain royalty relief. Why? To challenge the producer to 
get out there in that deep water. We did, and it worked.
    But now we're trying to backtrack, saying, ``Oh, gee whiz. 
There's a lot of money being made here. That was not our 
intent.'' Devil's in the detail, and that's what you just said, 
John. Whatever we do with any of this, we had better be very, 
very clear. We ought to put it in a business model that works, 
that the industry says, ``Yes, we can do those things.''
    Now, I will tell you, and I've lived the history of silver 
for a couple of decades. If we had a gross royalty applied and 
not a net, my guess is, that when silver was two and a half and 
three dollars a few years ago, the mining operations that were 
struggling would not be here today.
    But they are here today and they're very profitable today 
at a $10 and $11 silver. I don't know where it is at the 
moment. I haven't checked to see what the price of silver is. 
But the point is also survivability. If you're going to get a 
group of investors, Mr. Chairman, that are going to make this 
huge up front investment, then they know that there will be 
good times and bad times, based on international mineral 
markets. The good times never stay in this industry. Only the 
wise investor, who can plan for the future, can and does stay.
    That is the history of mining. I don't see it being any 
different when you subject yourself to a commodities market in 
a world environment. Survivability, stability, certainty, all 
of those are key factors. There's absolutely no reason to plug 
any environmental loophole that's out there. I'm glad that Mr. 
Leshy recognizes that we've come a long way, and we are. If 
there are differences, we ought to try to get to them.
    I know the mining industry well. The mining industry of 
today are a group of men and women that are environmentally 
very sensitive. They want to do the right things, but they also 
see the opportunity.
    So, I've listened closely to all of you and I thank you 
very much for your testimony. I don't see the task as 
impossible, but I do see it as, if we don't do it right, then 
we will chill investment. It will go away and the industry will 
begin to shrivel. That is something that we should not do. 
Senator Domenici knows, as you know, Mr. Chairman, uranium, the 
ability to produce energy. In the decades ahead, may be 
extremely valuable for this country. We ought not shove it 
offshore.
    Thank you.
    Silver's at $13 today. Thank you. That's profitable, that 
is very profitable.
    The Chairman. I should have bought some of that.
    Senator Craig. Yes, you should have. But when it was $3, 
you would not have.
    The Chairman. Yes.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Mr. Butler, in your testimony you eloquently noted that if 
government takes too much of the potential profit, investors 
are going to put their dollars elsewhere. Looking at this, I 
also look to see when does someone decide to withdraw or close 
something, as well. So this is just in a new investment.
    Mr. Butler. That's a new investment.
    Senator Barrasso. But for additionally, if you move enough 
of this down here, at some point you may find that it's not 
worthwhile continuing.
    Mr. Butler. That's right. It's a different----
    Senator Barrasso. Certainly in Wyoming where we have a 
situation where, if something were, that were operating were to 
close because of a change, you know, we would lose severance 
taxes, State and local property taxes, all of the other 
benefits that come to the State, as well as to the employees 
who are working there. You know, so if something is imposed, 
what are your recommendations of how you would construct one 
that results in the least chance of any kind of serious 
disruption?
    Mr. Butler. I think that the royalty based on 
profitability, and that is one that allows deduction of some of 
the costs, primarily solves that problem. Because a decision to 
maintain an operating mine is a different calculus. You're 
primarily concerned about covering day to day costs. In fact, 
some mines will operate for a year or two or more at net 
losses, if they think that there's, you know, light at the end 
of the tunnel.
    What happens with the gross royalty, is it just pushes that 
down. Because as long as you're producing, you have to keep 
paying that royalty. It's like any other cost. So that 
encourages, in the bad times, it encourages mines to close. If 
that's based on profitability, in those times when you're not 
making very much money, you're not paying very much royalty. If 
you're actually not making any money, you're not making, you're 
not paying any royalty. That is, I mean, that's an issue in 
terms of the revenue stream. But in terms of maintaining those 
operating mines, that's the way to do it.
    Senator Barrasso. Then, Mr. Leshy, along the same line. I 
think I heard you say something along the lines that a royalty 
should be developed without crippling the industry. You know, 
I'm not convinced that that should be the standard that we use 
in crafting a royalty. I mean, it's almost, I read your 
testimony, it almost sounds like you're saying, ``Well, we 
should because we can,'' as opposed to really making the 
overall decision. You mentioned this as a hobby, but in Wyoming 
this is lifeblood. So I'd be interested in your comments on 
that, please?
    Mr. Leshy. You know I don't disagree with a lot of things 
that Jim said, in terms of the industry's investment, sort of, 
psychology here. The idea of a royalty is only one of the 
various ways to get, what I think, is a fair return to the 
taxpayer for the extraction of the public's minerals.
    For example, the very large tailings and waste dump acreage 
that is involved in these modern operations--the industry is 
basically paying nothing for those, other than a small holding 
fee on the claims. I mean, there's no rental value. There is no 
value captured to the public for the, really the permanent use 
of those lands. Because those tailings piles aren't going to go 
away when the mine ceases. They're going to be there forever.
    So, that is another way to, I think, capture a fair return 
to the Treasury that--I just keep coming back to this, but I 
think it's an important point--that that kind of fair return to 
the taxpayer is captured in virtually every other use of the 
Federal lands. I can not think of a reason why hard-rock mines 
should be treated differently under that principle.
    So I think the overall objective here is just parity. It is 
to say this industry operating on Federal lands should be 
treated the same way as all the other industries and users of 
the Federal lands.
    Senator Barrasso. You believe you can do that without--I 
think your words--without crippling the industry?
    Mr. Leshy. I think there are ways to do that, yes. You 
know, the coal industry, the oil and gas industry pay 
substantial royalties, far higher in percentage than we've ever 
talked about in Mining Law reform, and they're an extremely 
prosperous industries.
    Senator Barrasso. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We have another panel and so, unless any Senator has a 
burning question, I'll thank this panel very much for your 
testimony. We appreciate it and we will continue to call on you 
for ideas as we move ahead in this process and ask the second 
panel to come forward.
    The second panel is made up of Dusty Horwitt, who is with 
the Environmental Working Group here in Washington, D.C., and 
Timothy Snider, who's with Freeport McMoRan Copper & Gold, 
representing the National Mining Association.
    All right. Why don't you start, Mr. Horwitt, and then Mr. 
Butler.
    Mr. Horwitt. Senator, thank you. I think we're having a 
small technical problem.
    The Chairman. OK. Should we go with Mr. Snider first while 
you're resolving the technical problem there?
    Mr. Horwitt. That would be fine with me.
    The Chairman. OK. Why don't you go ahead, Mr. Snider?

STATEMENT OF TIM SNIDER, PRESIDENT AND CHIEF OPERATING OFFICER, 
   FREEPORT MCMORAN COPPER & GOLD, REPRESENTING THE NATIONAL 
                MINING ASSOCIATION, PHOENIX, AZ

    Mr. Snider. Great. Thank you, Mr. Chairman. Thank you 
members of the committee.
    My name is Tim Snider, I'm the President and Chief 
Operating Officer of Freeport McMoRan Copper & Gold. I held a 
similar position with Phelps Dodge Corporation before Freeport 
acquired us in March of this year.
    We, our company, has operated in New Mexico and Arizona 
since the 1880s. Personally I'm a third generation copper 
miner. I started my career in 1970 and in fact, I worked about 
a third of my career in New Mexico for our operations. I'm 
testifying today on behalf of the National Mining Association 
and we appreciate the opportunity to testify before the 
committee.
    The National Mining Association, of course, is an 
association of producers and supporting businesses of the 
mining industry. They produce the majority of the coal, metals, 
industrial and agricultural minerals in the United States. Our 
association and its members employ about 170,000 high-wage 
jobs.
    Of course, it shouldn't come to any surprise that from 
somebody like me, that we believe mining is very important to 
this country. Public lands in the west are a vital source of 
minerals and metals that are, it's a key element to driving our 
economy and our national security, by the way.
    What may not be as widely known, is that the National 
Mining Association and its member companies support reform of 
the Mining Law. We are committed to the development of a fair, 
predictable, and efficient National Minerals Policy through 
amendments to the Mining Law of 1872. A lot of my comments have 
already been covered, so I won't take you, I won't plow, replow 
the same ground. But I do want to make a few points.
    The Mining Association supports--what we seek is a Mining 
Law that includes, really five specific aspects. First, we 
agree that it should secure a fair return to the Government 
through a royalty on production of metals and minerals from new 
mining claims on Federal lands. Of course, there's been a lot 
of discussion around the form of that royalty, but--and a 
discussion around whether this is a gross royalty or a net 
profits royalty. But I just want to kind of put that in human 
terms a little bit.
    This industry is realizing very high metal prices at the 
moment and all of our companies are making good profit. Just 5 
years ago the, exactly the opposite was true. We were 
struggling for our very existence. My company and various 
others in our Association were working very hard to maintain 
the integrity of our operations from an environmental 
standpoint and other standpoints, and we did a very good job of 
it. But most importantly, we maintained employment during that 
period. Because we knew that better times were coming.
    If we are to apply a gross royalty, I would argue that we 
would be adding fixed costs to all of those operations, that 
make them less viable during those down times, and we would be 
less able to maintain that employment and the other benefits to 
communities that we generated during that time. That's why we 
support a net profits royalty, one in which everybody gains in 
the up times and we're able to remain viable in the downtimes.
    Second, we think that the law should establish an abandoned 
mine lands cleanup fund, financed through this, with the 
revenues from this royalty. This was mentioned a little bit 
earlier. Such a fund would allow for reclamation and closure of 
historic mines, which were left during a time, before the 
advent of modern environmental practices. We believe this is 
something that can and should be done. This provision should 
seek to coordinate with other existing programs and should 
include a Good Samaritan liability protection provision that 
could promote voluntary cleanups.
    The third aspect, the law should provide for certainty of 
title and tenure to support confident investment in mining 
ventures. Of course, this has been discussed by the other 
witnesses pretty thoroughly, the patenting issue and so forth. 
But it's very critical when we, in the industry, seek to make 
investments for something that could be a 30-year investment, 
in which we start investing and 10 years later we might start 
getting cash-flows. It's very important for us to have that 
security of title in one fashion or another.
    Patenting has worked and it worked during its time. It may 
be time for something else, but we have to make sure that 
investors feel certain about the investments that they're 
making, to the extent possible.
    The uncertainty that we have today, I think is reflected in 
the fact that only about 8 percent of the worldwide mineral 
exploration budgets are targeted for the United States. I think 
it's a clear indication of the uncertainty that the industry 
feels about investing in the United States.
    The fourth aspect of the law that we believe that is 
important, is that we recognize and not duplicate or supplant 
existing Federal and State environmental laws, which regulate 
all aspects of the mining, of the industry, from exploration 
through mine reclamation, and ultimately to closure. There's a 
comprehensive framework of regulations that we deal with, 
including the Clean Water Act, Safe Drinking Water Act, the 
Clean Air Act, NEPA, Toxic Substances Control Act, RECRA, 
Endangered Species Act, and I could go on.
    We believe this suite of laws and regulations is sufficient 
and appropriate to protect the environment. In fact, in 1999, a 
report issued by the National Academy of Sciences on hard-rock 
mining, agrees with that assessment. They conclude that the 
best way to improve environmental protection in our industry is 
to effectively implement those existing regulations.
    The fifth and final aspect that we believe is important for 
the Mining Law involves access to public lands. We, of course 
this has also been talked about and I won't replow that ground 
too much, but we believe that there are adequate methods of 
removing lands from mining use today. We don't believe that the 
Mining Law needs to provide more.
    Currently about half of public lands are not available for 
mining. Some of the mechanisms in which lands can be removed 
are wilderness designation, national parks, wildlife refuges, 
recreation areas, wild and scenic rivers, and other means. We 
do agree that there are places where mining just shouldn't be 
done, but we think that the existing mechanisms provide that.
    In conclusion, the United States needs a robust mining 
industry to help meet the needs of American consumers. 
Unfortunately, we believe that America is allowing our mineral 
industries to diminish as other countries' industries are 
flourishing. Increased dependency on imports of vital metals 
and minerals is not in our national interest and causes many 
negative consequences, not the least of which is vulnerability 
to supply disruptions due to political or military instability.
    The U.S. mining industry has fully embraced the 
responsibility to conduct its operations in an environmentally 
and fiscally sound manner. We hope and expect that the Mining 
Law legislation will recognize and honor this commitment and 
the industry's contribution to our national well being. We look 
forward to working with the committee to bring this to 
conclusion.
    Thank you and we appreciate the opportunity to provide 
testimony.
    [The prepared statement of Mr. Snider follows:]

    Prepared Statement of Tim Snider, President and Chief Operating 
  Officer, Freeport McMoran Copper & Gold, Representing the National 
                    Mining Association, Phoenix, AZ
    Good morning, Mr. Chairman and members of the Committee. My name is 
Tim Snider, and I am President and Chief Operating Officer of Freeport 
McMoran Copper & Gold. In March, Freeport acquired Phelps Dodge 
Corporation, which has operated copper mines in New Mexico and Arizona 
since the 1880s. I am a third generation copper miner and started my 
career at Phelps Dodge in 1970. I am testifying today on behalf of the 
National Mining Association (NMA). NMA appreciates the opportunity to 
testify before the Committee on this issue of great importance to the 
domestic mining industry. NMA members support reform of the Mining Law 
and look forward to working with the Committee to try to resolve this 
issue during this Congress.
    NMA is the principal representative of the producers of most of 
America's coal, metals, industrial and agricultural minerals; the 
manufacturers of mining and mineral processing machinery, equipment and 
supplies; and the engineering and consulting firms, financial 
institutions and other firms that serve our nation's mining industry. 
Our association and our members, which employ or support 170,000 high-
wage jobs, have a significant interest in the exploration for, and 
development of, minerals on federal lands. The public lands in the 
Western states are an important source of minerals, metal production 
and reserves for the nation's security and well-being. Mining on 
federal lands provides for high-wage employment, vitality of 
communities, and for the future of this critical industry.
    NMA is committed to the development of a fair, predictable and 
efficient national minerals policy through amendments to the Mining Law 
of 1872. Because the vitality of the modern American economy is firmly 
rooted in the ready availability of metals and minerals that are 
essential to our way of life and our national security, our efforts in 
the end should result in a mining law that:

   Secures a fair return to the government in the form of a net 
        income royalty for minerals produced from new mining claims on 
        federal lands;
   Establishes an abandoned mine lands clean-up fund financed 
        with revenue generated from a net income royalty;
   Provides the certainty needed for private investment in 
        mining activities on federal lands by ensuring security of 
        title and tenure from the time of claim location through mine 
        reclamation and closure;
   Recognizes the existing comprehensive framework of federal 
        and state environmental laws regulating all aspects of mining 
        from exploration through mine reclamation and closure; and
   Recognizes existing authorities for closing or declaring 
        unsuitable for mining those federal lands with unique 
        characteristics or of special interest.

    The cornerstone of NMA's policy objectives is a predictable legal 
and regulatory framework to provide the long-term certainty and 
stability needed to protect existing investments and to attract new 
capital necessary to maintain a healthy and sustainable domestic mining 
industry. The importance of the domestic mining industry to our 
economy, our way of life and our national security cannot be ignored. 
Indeed, it is irresponsible for us to ignore the vast mineral resources 
we have within our nation's boundaries when our domestic needs are so 
great.
    The United States has an abundance of natural resources including 
78 metals and minerals that are the foundation of our modern industrial 
economy. Only the combined countries of the former Soviet Union and 
Australia rank higher than the United States in the global distribution 
of 15 metals with critical uses.
                              fair return
    A progressive and responsible approach to modernizing the Mining 
Law can achieve a fair return to the public and fund the restoration of 
abandoned mine lands, while encouraging the private investment required 
to develop and carry out environmentally and socially responsible 
mining operations.
    The imposition of a royalty has the potential to have significant 
economic consequences on existing and future mining operations, but the 
impact will vary depending upon the type of royalty imposed. 
Determining the type of royalty, the rate and its application to 
existing claims are critical. As noted in the World Bank royalty study, 
mining is ``particularly sensitive to [royalty] effects because of its 
cost structure and vulnerability to substantial market-driven demand 
and price swings.'' Otto, James. Mining Royalties: A Global Study of 
Their Impact on Investors, Government, and Civil Society. Washington, 
DC: World Bank, 2006, p. xiv.
    A net income royalty produced from new mining claims on federal 
lands would provide the public with a fair return and with funds for 
restoring abandoned mine lands. This type of royalty most appropriately 
balances the need to both provide a fair return to the public and to 
foster a strong domestic minerals industry. Gross royalties, or certain 
royalties based on a net smelter return, on the other hand, may result 
in significant losses to state and federal treasuries, mine closures, 
job losses and discouragement of new mines. The World Bank study 
appropriately cautions against gross royalty approaches as compared to 
approaches based on ability-to-pay or profit-based approaches: 
``Nations should carefully weigh the immediate fiscal rewards to be 
gained from  . . . high levels of royalty, against the longterm 
benefits to be gained from a sustainable mining industry that will 
contribute to long-term development, infrastructure, and economic 
diversification.'' Id. at 3. This type of royalty also encourages 
operators to leave lower grade (less profitable) ore in the ground, 
resulting in wasted public resources.
                          abandoned mine lands
    Using revenue generated from a net royalty on new claims to fund 
the cleanup or rehabilitation of abandoned mine lands (AML) is an 
essential aspect of amending the Mining Law. AML sites, which were 
mined and left in an unreclaimed state before the advent of modern 
environmental laws and reclamations practices should be addressed by: 
using funds generated through a royalty to assist in clean-ups; 
coordinating existing federal and state AML funds and programs; and 
Good Samaritan liability protection to promote voluntary clean-ups. The 
funds should be used for the actual cleanup and rehabilitation of 
abandoned mines and not to cover administrative overhead costs.
                      certainty/security of tenure
    Ensuring long-term security of tenure (or title) is an essential 
component of a modern mining law necessary to encourage the private 
sector to invest in mineral activity on federal lands. In the past, 
such security was provided by the patenting process, which allowed mine 
claimants to obtain ownership of the lands being mined or used for 
mining purposes. While the current congressional moratorium on 
patenting has not brought mining on public lands to a halt, it 
highlights the need for additional security of tenure in the mineral 
and the surface while claims are being held in advance of, as well as 
during, development and operations. Inclusion of language in the Mining 
Law is needed to clarify the rights to use and occupy federal lands for 
mineral prospecting, exploration, development, mining, milling, and 
processing of minerals, reclamation of the claimed lands, and uses 
reasonably incident thereto.
    Furthermore, security of tenure is critical in obtaining the 
financing necessary for mining projects. Investors need to know that a 
mining project in the United States can obtain approval and proceed 
unimpeded as long as the operator complies with all relevant laws and 
regulations. Mining projects--from exploration to extraction to 
reclamation and closure--are time- and capital-intensive undertakings, 
requiring years of development before investors realize positive cash 
flows. Uncertainty in the legal regime applicable to mining projects 
can chill the climate for capital investments in domestic mining 
projects. Potential investors must know their expectations will not be 
turned upside down by fundamental alteration of laws, regulations or 
policies. As the World Bank recently found, to attract such 
investments, governments need to adopt the fundamental principle of 
``no surprises,'' such as changes in laws, regulations or policies. Id. 
at 73.
    Because mining operations by their very nature require long-term 
and substantial commitments of capital, the stability of the statutory 
and regulatory framework plays a crucial role in decisions to invest in 
a mining project. As a result, the investments critical for bringing a 
mine to fruition tend to migrate toward projects planned in countries 
that offer predictable regulatory climates that correspond to the long-
term nature of mining operations.
    Despite reserves of 78 important mined minerals, however, the 
United States currently attracts only eight percent of worldwide 
exploration dollars. As a result, our nation is becoming more dependent 
upon foreign sources to meet our metal and minerals requirements, even 
for minerals with adequate domestic resources. The 2007 U.S. Geological 
Survey Minerals Commodity Summaries reported that America now depends 
on imports from other countries for 100 percent of 17 mineral 
commodities and for more than 50 percent of 45 mineral commodities. 
2007, U, 2007, p. 7. This increased import dependency is not in our 
national interest. Increased import dependency causes a multitude of 
negative consequences, including aggravation of the U.S. balance of 
payments, unpredictable price fluctuations, and vulnerability to 
possible supply disruptions due to political or military instability.
    Our over-reliance on foreign supplies is exacerbated by competition 
from the surging economies of countries such as China and India. As 
these countries continue to evolve and emerge into the global economy, 
their consumption rates for mineral resources are ever-increasing; they 
are growing their economies by employing the same mineral resources 
that we used to build and maintain our economy. As a result, there 
exists a much more competitive market for global mineral resources. 
Even now, some mineral resources that we need in our daily lives are no 
longer as readily available to the United States.
                        environmental standards
    Under current law, a mineral exploration or mining operation on 
federal lands is subject to a comprehensive framework of federal and 
state environmental laws and regulations including: the Clean Water 
Act; the Safe Drinking Water Act; the Clean Air Act; the National 
Environmental Policy Act; Toxic Substances Control Act; the Resource 
Conservation and Recovery Act; the Endangered Species Act; and the 
Bureau of Land Management (BLM) and Forest Service surface management 
regulations for mining. These laws and regulations are ``cradle to 
grave,'' covering virtually every aspect of mining from exploration 
through mine reclamation and closure. According to the 1999 report on 
issued by the National Academy of Sciences (NAS) panel of experts 
convened by Congress, this existing framework for mining is ``generally 
effective'' in protecting the environment. Hardrock Mining on Federal 
Lands, National Academy of Sciences, National Academy Press, 1999, p. 
89.
    That 1999 NAS report also found that ``improvements in the 
implementation of existing regulations present the greatest opportunity 
for improving environmental protection . . . '' Id. at 90. Notably, the 
Department of the Interior's 2000 and 2001 regulations governing mining 
and reclamation on BLM lands (``the 3809 regulations'') significantly 
strengthened the standards for mining on federal lands, including new 
provisions on guaranteeing reclamation through financial assurances.
    Importantly, the NAS panel of experts cautioned against applying 
inflexible, technically prescriptive environmental standards stating 
that ``simple `onesize-fits-all' solutions are impractical because 
mining confronts too great an assortment of site-specific technical, 
environmental, and social conditions.'' Id. Furthermore, recognition of 
the existing comprehensive framework of federal and state environmental 
and cultural laws that already regulate all aspects of mining from 
exploration through mine reclamation and closure avoids unnecessary and 
expensive duplication. Additional standards or enforcement mechanisms 
are not needed to protect the environment.
                          importance of access
    Access to federal lands for mineral exploration and development is 
critical to maintain a strong domestic mining industry. As stated in 
the 2006 BLM Minerals Policy Statement: (1) except for Congressional 
withdrawals, public lands shall remain open and available for mineral 
exploration and development unless withdrawal or other administrative 
actions are clearly justified in the national interest and (2) with few 
exceptions, mineral exploration and development can occur concurrently 
or sequentially with other resource uses.
    Federal lands account for as much as 86 percent of the land area in 
certain Western states. These same states, rich in minerals, account 
for 75 percent of our nation's metals production. As the 1999 NAS 
report to Congress noted, the ``remaining federal lands in the western 
states, including Alaska, continue to provide a large share of the 
metals and hardrock minerals produced in this country.'' Id. at 17.
    Efforts to amend the Mining Law must recognize existing authorities 
to close certain ``special places'' to mining activity. Congress has 
closed lands to mining for wilderness, national parks, wildlife 
refuges, recreation areas, and wild and scenic rivers. Congress also 
has granted additional authority to the Executive Branch to close 
federal lands to mining. The Antiquities Act authorizes the president 
to create national monuments to protect landmarks and objects of 
historic and scientific interest. Finally, Congress authorized the 
Secretary of the Interior to close federal lands to mining pursuant to 
the land withdrawal authority of the Federal Land Policy and Management 
Act. As a result of these laws and practices, new mining operations are 
either restricted or banned on more than half of all federally owned 
public lands. These existing laws and authorities are adequate to 
protect special areas. New closures of public land, based on vague and 
subjective criteria without congressional oversight, would arbitrarily 
impair mineral and economic development.
                               conclusion
    The United States needs a robust minerals production industry to 
help meet the needs of American consumers. Unfortunately, America is 
ceding to others the responsibility for meeting our minerals needs. 
Increased import dependency created by lack of U.S. mineral development 
is not in our national interest and causes a multitude of negative 
consequences, including aggravation of the U.S. balance of payments, 
unpredictable price fluctuations and vulnerability to possible supply 
disruptions due to political or military instability. The U.S. mining 
industry has fully embraced the responsibility to conduct its 
operations in an environmentally and fiscally sound manner. It hopes 
and expects that Mining Law legislation will recognize and honor both 
this commitment and the industry's contribution to our national well-
being.
    NMA appreciates the opportunity to provide this testimony.

    The Chairman. Thank you very much.
    Mr. Horwitt, why don't you go right ahead?

STATEMENT OF DUSTY HORWITT, PUBLIC LANDS ANALYST, ENVIRONMENTAL 
                         WORKING GROUP

    Mr. Horwitt. Thank you, Mr. Chairman, distinguished members 
of the committee. My name is Dusty Horwitt and I'm a Public 
Lands Analyst in Environmental Working Group. We're a non-
profit and advocacy organization based here in Washington and 
in Oakland, California. Thank you for this opportunity and I 
thank Mr. Snider for agreeing to go first.
    For the last several years, Environmental Working Group has 
analyzed mining claims on Federal land using a computerized 
data base from the Bureau of Land Management.
    Mr. Chairman, what we have found is a frenzy of claims 
staking that is increasing every day and threatens a crisis for 
many of America's most treasured national parks, including the 
Grand Canyon, where there has been an explosion of uranium 
mining claims.
    This modern day land rush is driven by the sky-high price 
of uranium, gold, and other metals, which is caused by demand 
from China, the United States, and other players around the 
globe. It's facilitated by a law, as we know, written in 1872 
when Ulysses S. Grant was President.
    More than 4 years of analysis has led us to one inescapable 
conclusion. Under the current wide-open Mining Law, where 
mining interests, unlike oil and gas companies, can stake 
claims with no government oversight or approval, vast portions 
of the American West are at the mercy of global demand for 
minerals.
    This is simply unacceptable. Without changes to the law, 
the global demand for minerals could easily result in 
situations where companies begin prospecting and developing 
mining claims right next to incomparable wonders like the Grand 
Canyon, other national parks, or even local water supplies.
    Since 2003, mining claims on public land, in 12 Western 
States, have increased by more than 80 percent. You can see it 
on the chart displayed here. Active claims are now at their 
highest level since an annual claim maintenance fee took effect 
in the mid-1990s. Claims have increased in each Western State.
    Here's an image of New Mexico, where active claims as of 
July 2007, marked in blue, have increased 50 percent in the 
last three and a half years. Each claim on the map represents 
dozens or even hundreds of claims on the ground.
    Here's an image of Colorado, where claims have increased by 
239 percent since 2003. That's the largest increase of any 
State. Again, these claims on the map represent thousands of 
claims on the ground, as we'll see in just a moment.
    This dramatic surge in claims could be extremely 
problematic, because once a claim is staked, the Federal 
Government interprets Mining Law as providing virtually no way 
to stop hard-rock mining, short of buying out mining claims or 
other extraordinary measures, even when mining is right next 
treasured national parks, such as the Grand Canyon.
    Here's a satellite image of the Grand Canyon. You can see 
the claims in blue clustered on both the north and south rims. 
We found that as of July, mining companies hold 815 claims 
within 5 miles of Grand Canyon National Park, 805 of those were 
staked since January 2003. Most of these claims are for 
uranium. Those identified as uranium claims have the yellow and 
black symbol. A Canadian company, Catera Resources, has already 
proposed to drill exploratory holes for uranium just north of 
the Canyon. The operation would include a helicopter pad to 
carry supplies in and out.
    Next, let's look at a map of the Canyon Country in Southern 
Colorado and Utah. Many of these claims are also for uranium. 
Arches National Park in Utah has 869 mining claims within 5 
miles of its boundary, 864 of those staked since 2003. Canyon 
Lands National Park has 233 claims within 5 miles, all of them 
staked since January 2003. Some of the claims on the Colorado 
side are, are the lands that are treasured for their scenic and 
recreational value.
    Without proper protections for our public lands, these 
claims can be very costly. In 1996, the Government paid $65 
million to buy out patented mining claims just 3 miles from 
Yellowstone National Park, that would have been the site of a 
major gold mine. The mine would have been located at the 
headwaters of three streams that flow into the park.
    You'll note the town of Moab, Utah on the map here. The 
Department of Energy has begun a project to clean up 16 million 
tons of radioactive uranium mine waste near the Colorado River. 
The waste is a threat to drinking water for millions 
downstream. Cleanup estimates range from $412 million to $697 
million and the project may not be complete until 2028.
    Mining pollution--our leading source of toxic pollution--is 
often not contained at the site of the mine. In Summitville, 
Colorado, in 1992, a spill of cyanide and heavy metal-laden 
water killed some 20 miles of the Alamosa River. The area is 
now a Superfund Site. A similar disaster occurred in the 1990s 
at Oregon's Formosa mine. Just this month, that site was also 
made a Superfund Site.
    Mining provides important raw materials for our economy, 
but we also need a Mining Law, that in the face of global 
demand for minerals, protects our most important places and 
allows land managers to balance mining with other interests, 
such as drinking water, just as they can with oil and gas 
development. With our most treasured places at risk, the time 
for reform is now.
    I thank the committee for this opportunity and look forward 
to your questions.
    [The prepared statement of Mr. Horwitt follows:]

      Prepared Statement of Dusty Horwitt, Public Lands Analyst, 
                      Environmental Working Group
                                summary
    Mr. Chairman, distinguished Members of the Committee: My name is 
Dusty Horwitt, and I am a Public Lands Analyst at Environmental Working 
Group (EWG), a nonprofit research and advocacy organization based in 
Washington, DC, and Oakland, California. I thank the members of the 
Committee for this opportunity to testify.
    For the last several years, the Environmental Working Group has 
analyzed mining claims on federal land, using computerized data 
provided by the Bureau of Land Management.
    Mr. Chairman, what we have found is a frenzy of claim staking that 
is escalating each day and threatens a crisis for many of America's 
most treasured wild places and national parks, including the Grand 
Canyon, where there has been an explosion of uranium mining claims. 
This modern-day land rush is driven by the sky-high price of uranium, 
gold and other metals caused by demand from China, the United States 
and players around the globe.
    Since 2003, claims on all public land in 12 Western states have 
increased by 80 percent. This dramatic surge in claims could be 
extremely problematic because once a claim is staked, the federal 
government interprets mining law as providing virtually no way to stop 
hard rock mining at that site, short of buying out mining claims or 
other congressional intervention, even when mining is in plain view of 
national parks such as the Grand Canyon.
    As you well know, a valid mining claim gives the claim holder the 
opportunity to mine on federal land and can be staked without 
government approval or oversight wherever land is open to mining. This 
Wild West approach stands in stark contrast to the approval required 
through the oil and gas leasing program where the public has an 
opportunity to participate in decisions that affect public lands. As 
anyone knows who has been in the West in the past five years, this 
approval process has not in any way stymied oil and gas exploration.
    More than four years of analysis of mining claims has led us to one 
inescapable conclusion: Under the current, wide open mining law, vast 
portions of the American West are at the mercy of global demand for 
minerals. This is simply unacceptable. Without changes to the law, 
global demand for minerals could easily result in situations where 
companies begin prospecting and developing mining claims right next to 
incomparable wonders like the Grand Canyon, other national parks and 
wilderness areas, or even local water supplies.
    Globalization has finally caught up with the 1872 Mining Act and 
rendered it totally and definitively obsolete. The West is not as big 
as it used to be. With growing demand for metals we do not need a 
Mining Law designed to encourage mining; we need a mining law that both 
permits mining, but also protects, without wavering, our most important 
natural places and resources.
    active mining claims increased more than 80% since january 2003
    Our research shows that in 12 Western states, the number of active 
mining claims has increased from 207,540 in January 2003 to 376,493 in 
July 2007, a rise of more than 80 percent. Over an eight-month period, 
from last September to this May, the BLM recorded more than 50,000 new 
mining claims. Claims as of July 2007 covered an estimated 9.3 million 
acres.
    We have seen this increase in every Western state, with claims for 
all metals increasing by 50 percent or more in Arizona, Colorado, New 
Mexico, Nevada, South Dakota, Utah and Wyoming.

                       Mining claims have increased in every one of twelve Western states.
----------------------------------------------------------------------------------------------------------------
                                                       Claims active as    Claims active as
                        State                          of  January 2003      of  July 2007     Percent  Increase
----------------------------------------------------------------------------------------------------------------
Arizona                                                          22,711              40,670                 79%
California                                                       18,981              22,494                 19%
Colorado                                                          5,430              18,391                239%
Idaho                                                            10,598              13,013                 23%
Montana                                                          10,554              12,779                 21%
New Mexico                                                        7,550              11,348                 50%
Nevada                                                          100,972             179,773                 78%
Oregon                                                            5,088               6,087                 20%
South Dakota                                                      1,030               2,340                127%
Utah                                                              8,723              28,968                232%
Washington                                                        2,193               2,492                 14%
Wyoming                                                          13,710              38,138                178%

12 state total                                                  207,540             376,493                81%
----------------------------------------------------------------------------------------------------------------
* Source: Environmental Working Group analysis of Bureau of Land Management's LR2000 Database, July 2007
  download.

    Attached to the end of this statement are maps of several Western 
states that show the locations of active claims.*
---------------------------------------------------------------------------
    * All maps and photos have been retained in committee files.
---------------------------------------------------------------------------
    Many of the new claims are for uranium. The BLM reports that the 
estimated number of uranium claims staked in Colorado, New Mexico, Utah 
and Wyoming combined increased approximately 750 percent from less than 
4,300 in fiscal year 2004 to more than 32,000 in fiscal year 2006.
    http://resourcescommittee.house.gov/images/Documents/20070726/
testimony_horwitt.pdf. Information source and contact: House 
Subcommittee on Energy and Mineral Resources, Legislative Hearing on 
H.R.2262, Thursday, July 26, 2007, at 10:00 am, Testimony of Mr. Dusty 
Horwitt, Public Lands Program Analyst, Environmental Working Group, 
1436 U St. N.W., Suite 100, Washington, DC 20009, (202) 667-6982.
    Many of the claims for all metals are being staked by foreign 
mining companies and speculators who could mine the land or sell to 
multinational corporations. Mining companies often extract minerals 
using techniques involving toxic chemicals, giant earthmoving 
equipment, sprawling road networks and vast quantities of water where 
water is a precious, scarce resource.
    This land rush is sweeping the West despite the remnants of an 
earlier generation of uranium mines that have left a legacy of death 
and disease, despite the fact that mining as a whole is our leading 
source of toxic pollution and despite the fact that mining claims give 
companies a right to mine that effectively supercedes efforts to 
protect the environment and preserve our American heritage.
    In the face of a landslide of global economic forces that threaten 
many of our most valued natural places and the health of people all 
across the American West, the 1872 Mining Law offers the legal 
equivalent of a pick and a shovel.
    The following photo images* were produced by EWG by linking federal 
data on mining claims with Google Earth satellite photos of national 
parks. They show the clear threats to some of our most treasured 
national parks and depict areas that bear the legacy of past uranium 
mining pollution.
    This satellite image of Grand Canyon National Park shows mining 
claims featured in blue and uranium claims identified with the yellow 
and black radiation symbol, clustered on both the north and south rims. 
We found that as of July, mining interests held 815 claims within five 
miles of the Park, 805 of them staked since January 2003. Many of these 
claims are for uranium.
    A Canadian company, Quaterra Resources, has already proposed to 
drill exploratory holes for uranium on claims just north of the Canyon. 
The operation would include a helicopter pad to carry supplies in and 
out. The idea of uranium mining near America's greatest national 
treasure is troubling and the thought of helicopter flights of 
radioactive material in an area already crisscrossed by dozens of 
tourist flyovers a day is even more disconcerting.
    Many of these claims are also for uranium. Arches National Park in 
Utah has 869 claims within five miles of its boundary, 864 of them 
staked since January 2003. Nearby, Canyonlands National Park has 233 
claims within five miles, all staked since January 2003. Many of the 
claims on the Colorado side are near lands treasured for their scenic 
and recreational values.
    A third national park threatened by mining claims is California's 
Death Valley. Here, mining interests have staked 1,693 claims within 
five miles, 503 since January 2003.
    Without proper safeguards for our public lands, protecting national 
parks from these claims can be very costly. In 1996, the federal 
government paid $65 million to buy out patented claims just three miles 
from Yellowstone National Park that would have been the site of a major 
gold mine. The mine would have been located at the headwaters of three 
streams that flow into the park.

    National Parks and Monuments with mining claims within five miles
                                include:
------------------------------------------------------------------------
                                              Active      Claims Staked
             Park or Monument                 Claims     Since Jan. 2003
------------------------------------------------------------------------
Death Valley National Park, CA and NV            1,693              503
Arches National Park, UT                           869              864
Grand Canyon National Park, AZ                     815              805
Joshua Tree National Park, CA                      409              117
Canyonlands National Park, UT                      233              233
Mt. Saint Helens National Volcanic                 204              105
 Monument, WA
Capitol Reef National Park, UT                     161              151
Great Basin National Park, NV                      154               18
Yosemite National Park, CA                          83               50
Zion National Park, UT                              66               54
Yellowstone National Park, ID, MT, WY               21                1
------------------------------------------------------------------------

                      the legacy of uranium mining
    Near the top left of the Utah/Colorado map on page six is the town 
of Moab, Utah. The Department of Energy has begun a project to clean up 
16 million tons of radioactive uranium mine waste near Moab that have 
contaminated land near the Colorado River. The waste is a threat that 
could pollute drinking water for millions. Cleanup estimates range 
between $412 million and $697 million and, according to the Department 
of Energy, the project could last until 2028.
    You'll also note the town of Monticello, Utah at the far south of 
the map. Colorado's Grand Junction Daily Sentinel recently reported 
that residents of Monticello claim unusually high rates of cancer they 
believe were caused by a now-closed uranium mill.
    The Los Angeles Times reported in a landmark series last year how 
uranium mining has left a legacy of cancer and a degenerative disease 
known as Navajo Neuropathy on the Navajo reservation that includes 
Arizona, Colorado, Utah and New Mexico.
    Uranium mining companies have said that a process called ``in situ 
leaching'' will reduce environmental harm, but the practice raises 
significant concerns about contamination of groundwater according to 
the U.S. Geological Survey (USGS) and Nuclear Regulatory Commission 
(NRC). In this type of mining, chemicals are injected underground to 
leach uranium out of subterranean deposits. While the USGS and NRC 
state that in situ leaching ``in general'' is less harmful than 
traditional uranium mining and milling, ``the use of leaching fluids to 
mine uranium contaminates the groundwater aquifer in and around the 
region from which the uranium is extracted.'' The agencies add that 
``groundwater restoration represents a substantial portion of the cost 
of decommissioning at a uranium leach mining facility.''
        mining is the nation's leading source of toxic pollution
    But uranium mining is hardly the only cause for concern. According 
to the U.S. Environmental Protection Agency's Toxics Release Inventory 
(TRI), metal mining as a whole is the leading source of toxic pollution 
in the United States-a distinction the industry has held for eight 
consecutive years (1998-2005), ever since mining was added to the TRI 
list.
    The EPA has also reported that more than 40 percent of Western 
watersheds have mining contamination in their headwaters. The total 
cost of cleaning up metal mining sites throughout the West is an 
estimated $32 billion or more.
                          unearthing pollution
    The extraordinary pollution generated by metal mining is caused 
largely by digging and the sheer size of contemporary mining 
operations. Modern mining practices are a far cry from the use of mules 
and pick axes that were common during the late 1800s when the Mining 
Law was written. In part, the techniques have changed because 
concentrated deposits of gold and other metals are largely gone. Mining 
companies now excavate ``mineralized deposits,'' or ore that contains 
microscopic amounts of precious metal.
    To extract the amount of ore they desire, modern mining operations 
typically have to remove enormous quantities of rock and dirt with 
heavy, earthmoving equipment. The holes they dig can exceed one mile in 
diameter and 1,000 feet in depth.
    Mining companies commonly use cyanide or other chemicals to extract 
the metal. In this process, companies place the huge quantities of rock 
and earth on a plastic-lined heap leach pad and then spray or drip 
cyanide over the pile. As the cyanide trickles through the heap, it 
binds to the precious metal. The mining company then collects the metal 
from the cyanide solution in liquid-filled pits at the base of the rock 
pile.
    Cyanide and other chemicals can poison water, land and wildlife 
near mines, but most mining pollution results from digging. When mining 
companies dig for metals, they expose sulfur-laden rock to air and 
water, resulting in the formation of sulfuric acid. The acid often 
drains away from the mine site into ground or surface water where it 
makes the water so acidic that fish and other organisms cannot survive. 
This phenomenon is known as acid mine drainage. At California's 
abandoned Iron Mountain mine, for instance, scientists discovered the 
world's most acidic water with a pH of -3.6, 10,000 times more acidic 
than battery acid.
    The acid itself is not the only problem. When the acid comes in 
contact with rock, it dissolves toxic metals including arsenic, 
cadmium, lead and mercury, and carries those metals into water sources. 
Acid mine drainage from the Iron Mountain Mine, for example, has 
periodically released harmful levels of heavy metals into the 
Sacramento River and has virtually eliminated aquatic life in several 
nearby creeks. Roughly 70,000 people use surface water within three 
miles of Iron Mountain Mine as their source of drinking water. Acid 
mine drainage laden with heavy metals is a problem throughout the West 
from past and present mines.
    Once it begins, such pollution is very difficult to stop. Roman 
metal mines are still draining acid in Europe. Closer to home, the EPA 
wrote that Newmont's Phoenix proposal in Nevada ``will likely create a 
perpetual and significant acid mine drainage problem requiring 
mitigation for hundreds of years.'' Furthermore, reclaiming acid 
draining mines after mining ceases is a huge financial liability. The 
state of New Mexico estimates that one copper mine, the Chino Mine, 
will cost more than a quarter billion dollars to clean up.
                        long-distance pollution
    Mining pollution often spreads far beyond the site of the mine. For 
example, in Summitville, Colorado in 1992 a spill of cyanide and heavy 
metal-laden water killed some 20 miles of the Alamosa River. The area 
is now a Superfund Site. Taxpayers have already spent $190 million to 
clean up the area and will likely be tapped for millions more in the 
future.
    Earlier this month, the EPA added Oregon's Formosa mine to the 
Superfund list. The historic mine was reopened in the 1990s, mined for 
two years by a Canadian company and then abandoned with catastrophic 
results. The mine's acid drainage has killed 18 miles of a creek where 
salmon once spawned and cleanup is expected to exceed $10 million, the 
Associated Press reported.
    Another example of extended mining impacts is the plume of 
contaminated groundwater beneath the Bingham Canyon mine. The EPA 
reports that the plume extends for 72 square miles. The mine is part of 
the Kennecott South site about 25 miles southwest of Salt Lake City 
that has been proposed for Superfund status. The mining watchdog group, 
Earthworks, estimated that the Bingham Canyon mine will leave taxpayers 
with the largest liability of any mine in the United States: more than 
$1.3 billion.
    A fourth example comes from Arizona in 2006, where dust from a 400-
foot-high tailings pile at Phelps Dodge's Sierrita Mine spread over a 
two- to four-and-a-half-mile radius, coating homes and lawns in nearby 
Green Valley with white powder. The company said it sampled the 
tailings several years earlier and found no cause for concern but the 
state cited the company for failing to prevent the dust from blowing 
onto homes.
    Residents of Crested Butte, Colorado, Boise, Idaho and other towns, 
are currently facing significant mine proposals that could threaten 
local water supplies and other resources.
                             antiquated law
    The threat we face today, however, is more serious than in years 
past. The specter of mining operations is looming over the Grand Canyon 
and many other treasured national parks, and the 1872 Mining Law 
provides inadequate tools to control it. Indeed, the 1872 Mining Law 
does the opposite: it directly facilitates the problem by granting 
mining rights with no government approval, providing weak standards for 
protecting water, and creating a potential bonanza with no royalty 
payments if the claim pans out. Under current law, demand for raw 
materials around the globe can place our public lands at risk and leave 
Westerners and federal land managers at the mercy of multinational 
mining companies.
    Mining companies have argued against changing the law because 
mining is so important to our national security. Yet the oil and gas 
industry is also vital to our national security and has operated on 
federal land under a significantly different set of rules. Oil and gas 
operators must win government approval before gaining control of 
federal land, pay royalties on the energy they extract and are subject 
to rules that allow energy development to be balanced with other 
interests. Under this system, oil and gas companies have enjoyed record 
profits and record numbers of approvals for drilling permits in the 
past several years. Indeed, government oversight has often been far too 
lax. But the main point is that the oil and gas industry has thrived 
under a much more progressive legal framework.
    Mining has operated under an antiquated law for long enough. When 
mining threatens to scar if not destroy places like the Grand Canyon, 
it is time to draw the line. We no longer need to give special 
treatment to the mining industry, particularly when other extractive 
industries operate profitably on our public lands without such favored 
treatment and particularly when our national parks and monuments are at 
risk.
               recommendations to improve the mining law
    We recommend several changes to the mining law:

   Protect Western lands.--Mining companies should be allowed 
        to operate on federal lands, but some places should be off-
        limits. These places include lands bordering National Parks, 
        Forest Service Roadless Areas, and sacred sites.
   Tougher standards for mine permits and cleanup.--Mining 
        companies should be required to prevent perpetual water 
        contamination and put up enough money before operations begin 
        to cover the full costs of cleanup should the company go 
        bankrupt or abandon the site.
   Treat Mining Like Oil and Gas.--Land managers should have 
        the ability to balance mining with other interests such as 
        water quality, the same ability they have with oil and gas and 
        other extractive industries.
   Royalty payments.--Currently, mining companies pay no 
        royalty unlike every other extractive industry operating on 
        federal land. A fair return to taxpayers is essential for 
        cleaning up abandoned mines and providing assistance for 
        communities affected by the boom and bust mining economy.
   Abandoned mine cleanup fund.--Cleaning up abandoned mines is 
        estimated to cost $32 billion or more. Congress should create a 
        fund to accomplish this important task.
   An end to mining's tax break.--In addition to being able to 
        mine royalty-free, mining companies can claim a tax break on up 
        to 22 percent of the income that they make off hardrock 
        minerals mined on federal public lands. Congress should close 
        this loophole.
   No more land giveaways.--For years, mining interests have 
        been able to buy claimed land from the federal government for 
        $2.50 or $5.00 an acre. Since 1994, Congress has placed a 
        moratorium on these giveaways that must be renewed annually. 
        Congress should enact a permanent ban.

    Mining provides materials essential to our economy, but it must be 
conducted in a way that strikes a balance with other values. We look 
forward to working with the Committee to ensure that mining on our 
public lands is conducted in a responsible manner.
    Thank you for this opportunity to testify.

    The Chairman. Thank you very much.
    Let me start and just ask Mr. Snider, I think I heard you 
say that about half of the public land is currently not 
available for mining.
    Mr. Snider. Yes, that's what I said.
    The Chairman. We have a staff background memo here that 
says, according to the 1999 NRC--that's the National Research 
Council--report, ``The BLM is responsible for 260 million acres 
of land in the Western States, including Alaska, of which 
roughly 90 percent are open to hard-rock mining. The Forest 
Service manages 163 million acres in the Western States, of 
which roughly 80 percent are open to hard-rock mining.'' Do you 
disagree with those?
    Mr. Snider. I haven't looked at those specific reports. 
What I would ask you, if I could research that and get back to 
you on that.
    The Chairman. Yes, I wish you would because obviously 
there's a big difference. If the Government has already chosen 
to put half of the public land off limits to mining, that's 
very different than this information.
    Senator Craig. Mr. Chairman.
    The Chairman. Yes.
    Senator Craig. Does that include all National Parks? Very 
possibly that reference is a factor of all public lands. You've 
spoken only to Forest Service and BLM and not all of the other 
domain out there. Those are the dominant ones.
    The Chairman. Yes, well maybe----
    Senator Craig. No, I would--I would like to see that figure 
confirmed also, but my guess is you've not mentioned parks, and 
parks is not in there.
    The Chairman. Yes. No, that's a good point.
    Mr. Snider. OK.
    The Chairman. If you could clarify that----
    Mr. Snider. We'll certainly do that.
    The Chairman. That would be useful.
    Let me ask Mr. Horwitt, it seems to me, based on our 
previous panel's discussion, Mr. Butler's points, the 
Government is free to take action to put areas off-limits to 
mining claims under current law, as I understand it. Do you 
know if there's any effort by environmental groups or others, 
to urge the Government to put some of these areas off-limits, 
to deal with the proliferation of mining claims that you've 
described?
    Mr. Horwitt. Yes, there is. In fact, in the bill on the 
House side, that bill would include several areas off-limits, 
including Forest Service roadless areas and sacred sites. We 
look forward to working further to identify areas, such as land 
just outside the Grand Canyon, that ought to be put off-limits 
to mining.
    The Chairman. But you're referring there to areas that are 
suggested Congress put off-limits. I'm asking administratively, 
is it your understanding that the various land management 
agencies have--I took it from Mr. Butler's testimony--ample 
authority in the law today for the land management agencies to 
put areas off limits to mining? Do you know if there's a big 
push to cause them to exercise that authority?
    Mr. Horwitt. We, my understanding is that they can do that, 
also. You know, our push in recent weeks and months has been to 
include areas off-limits in Congressional legislation.
    The Chairman. OK.
    Let me stop. I know we're going to run into a vote problem 
here soon.
    Senator Domenici, go right ahead.
    Senator Domenici. Thank you very much.
    Mr. Horwitt, I'm not certain that the number of claims 
staked is the most accurate measure of on-the-ground mining 
activities. You know what history has revealed in that regard--
lots of stakes, but not so much mining. Can you tell us how 
many plans of operation have been submitted for the claims that 
are displayed on the maps that you showed us, in my State and 
other States? I don't know of any claims, any plans for 
operation.
    Mr. Horwitt. I'd be happy to get that number for you. I 
agree generally that there are many claims that are staked that 
are not developed. I think the risk is that you have a 
situation like we had outside Yellowstone National Park where a 
claim could be developed.
    Senator Domenici. I'm not disagreeing, I'm merely saying 
that it's good for us, for those of us who are contemplating 
fixing the law to understand that claims don't end up as being 
property transferred, nor does it end up being operational 
headquarters for mines. What about from an historic 
perspective? How often do mining claims become full-scale 
operations? That's what I was trying to get to. You don't have 
the answer, but you can dig it up.
    Mr. Horwitt. Yes, we can get you some data on that.
    Senator Domenici. I think that would be interesting for us 
to know. We also do know, without any further research, that 
the interest in uranium activity is directly related to the 
price. This is because the price of uranium has gone up 
dramatically and that has pricked the investment interest of 
thousands of people. I know because they're writing letters to 
my office from all over, talking about how do you do this, how 
do you make claims? Because remember some people did get rich--
a lot didn't--in the first drive through New Mexico.
    Let's see. I want to move to two more quick ones. Thank you 
for letting me have a moment, Mr. Chairman.
    Mr. Snider, I've discussed, in some detail, the 
similarities between domestic energy security and trends in the 
mineral industry. I worry that the concerns we have had about 
foreign ownership of and investment in domestic energy 
resources mirrors the American mining industry. Can you 
quantify any foreign participation in domestic mining for us 
and provide some insight as to what the implications of that 
might be, if any?
    Mr. Snider. I can't--I can't quantify that. I can tell you 
that there is--there is some foreign investment in the U.S. 
mining industry, but I do not believe it's----
    Senator Domenici. Big.
    Mr. Snider [continuing]. It's substantial.
    Senator Domenici. All right.
    Mr. Snider. But I can quantify that for you.
    The Chairman. Will you do that?
    Mr. Snider. Yes, I will.
    Senator Domenici. Thank you. That's for the committee, not 
just for me.
    Mr. Snider. Yes, of course.
    Senator Domenici. In considering changes in mining law, 
cleanup and abandoned mines must be a top priority. That's 
already been stated. An obvious approach to this situation 
would involve spending royalties and other revenues on cleanup 
efforts. What else can the industry do to expedite abandoned 
mine cleanup? Either of you? Both?
    Mr. Snider. Of course, the Good Samaritan provision that I 
spoke of earlier.
    Senator Domenici. Yes.
    Mr. Snider. Today, if my company--or any company--was to go 
to some abandoned mine that we had nothing to do with 
originally and try to clean it up, we're immediately tagged 
with all of the liabilities and the chain of title that goes 
along with it. That's what keeps us from going out and doing a 
lot of that stuff.
    Senator Domenici. Right.
    Mr. Snider. A Good Samaritan provision would release us 
from that type of liability and make it much more attractive 
for companies to go out and do some of that voluntary, 
additional reclamation.
    Senator Domenici. I'm as interested in the fact that it 
wouldn't necessarily be voluntary. They'd get stuck with the 
Good Samaritan rule if they happen to go on and do a cleanup 
that's not for free. They get stuck with the fellow servant and 
go on and have to pay for everything. So we've got to look at 
that.
    Mr. Snider. Yes.
    Senator Domenici. Unless we want to leave these mines 
sitting out there and wait until it gets so profitable that 
maybe somebody will pick a couple of them and clean them up.
    I yield and thank the Chairman for giving me so much time.
    The Chairman. Senator Craig.
    Senator Craig. Mr. Chairman, thank you very much. I'll be 
brief.
    Let me focus on what Mr. Horwitt has brought us because it 
is really very fascinating and it is prelude to a reality that 
we are moving toward. It is very, very important. Now, the 
primary source of our fuel for these new reactors, that Pete 
received a license application for the other day, is in part 
coming out of the down-blends from highly enriched weapons from 
Russia, that we're now taking in and redoing. That will last 
through 2013.
    When that's over with, if you think uranium prices are high 
today, and we've not yet effectively facilitated sources and 
we've got new reactors coming online, then we have a very real 
problem, a very pricey problem, and one of being, again, 
dependent upon, Mr. Chairman, places like Kazakhstan and other 
places that are much less stable than might Moab, Utah be.
    Now, having said that and that's not a criticism of your 
observations. Not only do we need to be concerned about those 
properties and how they get developed, if they can be 
developed, for a 2013 and beyond resource, or once again, we'll 
be 60 or 70 or 80 percent dependent upon foreign nations for a 
critical energy source. Because we want to bring online a lot 
of new clean nuclear reactors.
    But a Good Samaritan Law property crafted, under the new 
technologies of today, what Mr. Snider has talked about is not 
just going in and being a Good Samaritan, but maybe doing so in 
a way that is profitable, because of new technologies today. I 
don't know and I doubt that you would know, Mr. Horwitt, so I 
won't ask, unless you can add that those large tailings piles 
in Moab that are going to cost $413 million to clean up. Under 
today's technologies, might be reprocessable, to pull out 
uranium that would be needed beyond 2013, if the Good Samaritan 
Law would allow it.
    You know, the Government does things sometimes pretty well, 
but there are a lot of things they don't do well and they ought 
to let the private sector do it and they ought to incentivize 
the private sector to do it. Because they will do it for less 
money, because they want to make it profitable, but they will 
do it within the limits.
    I see a tremendous opportunity. Old tailings, old 
techniques, new techniques, new technology, that we can take 
that Good Samaritan Law and do cleanup that is ``profitable'', 
not a negative impact on the general fund. It might, under a 
new royalty system, actually bring money into the general fund.
    To me, that is a phenomenal environmental win-win concept. 
If all interests come to the table to understand that if we 
approach it from that manner, we have great opportunity.
    That's my general reaction to the observation, but there's 
some real factors moving in the market out there, and the one I 
just gave about 2013 and beyond is a very real one and a very 
important one for a future nuclear electrical generation 
industry in this country.
    Thank you all very much.
    The Chairman. Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman. I know the time 
is short.
    Mr. Horwitt, I agree with Senator Domenici that, with that 
question about how many claims and how many things actually 
develop into economically feasible mines. I think it would be 
less than 1 percent, so I'd be interested in that response as 
well, that if you can get that back to the other members of the 
committee.
    You talked about the large global demands. I'm wondering if 
there are things that we do better in the United States 
environmentally than are happening other places. Are there 
things that we should try to do here because the global demand 
is going to continue to be there and I think the use of so many 
of these resources are going to be important and go forward.
    I'm an orthopedic surgeon. Some of the different things 
that we use--chromium, cobalt, molybdenum, in the implants--
they're going to be continued to be needed in a greater and 
greater number. So I'd be interested in that.
    Then, finally, we talked a little bit about the AML money, 
the abandoned mine lands. You know, I look at that and do we 
really believe that Federal royalties are going to be used for 
cleanup. You know, in Wyoming I know that money's been 
collected by 30 years, for the last 30 years, but the money 
hasn't come back yet to the State. So, you may want to both 
comment on that.
    Thank you, Mr. Chairman. That's the--that will be my last 
question.
    Mr. Horwitt. I would comment on, you know, as far as a 
small number of mines, or of claims turning into mines. That's 
likely true. It's also true and a recent study by a mining 
engineer and a geochemist, that a large percentage of mines 
that do get developed, end up exceeding water quality. So we do 
need to make sure that if a mine is developed that it's 
developed properly.
    I would also say one thing that we could do better and that 
would help with abandoned mine cleanup, is on the front end, 
making sure that our bonding requirements for mining operations 
are adequate. Because we've seen, even in recent years, in the 
1990s, again and again that the Bromine in South Dakota, 
Zortman-Landusky Mine in Montana, the Summitville in Colorado, 
that operators have created significant cleanup disasters, and 
there's very little money that the companies have put up to 
cover those costs. Taxpayers end up paying tens or even 
hundreds of millions of dollars.
    Mr. Snider. Just a quick comment on the abandoned mine land 
fund. I think you're right about the coal situation. We need to 
craft the fund so that, make sure that the funds go back to the 
States and therefore, is used for abandoned mine cleanup.
    Senator Domenici. That was his question. Excuse me, Mr. 
Chairman. Didn't you want to raise, weren't you raising the 
question, what's happened to that fund? Why isn't it used? I 
don't know. Maybe I didn't hear you.
    Senator Barrasso. You're correct, Senator Domenici. We're 
continuing in a struggle to make sure that the money goes back 
to the States that should go back with the Abandoned Mine Land 
Fund. When people talk about Federal royalties and then some of 
that being used for cleanup--if we look at the AML money, I 
don't think that it's turned out the way that I think it was 
initially designed, and would hope that if we are talking about 
royalties, that those lines be made more clear.
    Mr. Snider. Absolutely.
    Senator Barrasso. Thank you.
    The Chairman. All right. Thank you very much.
    Thank both witnesses. I think it's been a useful hearing. 
It's not the last hearing we're likely to have on this subject. 
So, we will be in touch with you and thank you again for your 
testimony.
    [Whereupon, at 11:08 a.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

       Responses of John Leshy to Questions From Senator Bingaman
    Question 1. In your view, can legislation legally impose new 
environmental requirements on existing claims that are not yet being 
mined?
    Question 2. Can legislation legally impose new environmental 
requirements on existing claims that are being mined on the date of 
enactment?
    Question 3. What transition rules should apply to any new 
environmental requirements?
    Question 4. In your view, can legislation legally impose a royalty 
on existing claims that are not yet being mined?
    Question 5. Can legislation legally impose a royalty on existing 
claims that are being mined on the date of enactment?
    Question 6. What transition rules should apply to any new royalty?
    Answer. Questions 1-2 and 4-5 raise legal questions about the power 
of the government to impose new environmental and financial 
requirements on existing mining claims and existing mining operations. 
Questions 3 and 6 raise more general questions of policy.
    I will begin by setting out the general analytical and legal 
framework for analyzing these questions.
    First, the Supreme Court has many times held that the power of 
Congress over public property like federal land and minerals is 
extremely broad. See, e.g., Kleppe v. New Mexico, 426 U.S. 529 (1976). 
``Without limitations'' and ``entrusted primarily to the judgment of 
Congress'' are phrases the Court has frequently used in this context. 
See, e.g., United States v. Gratiot, 14 Pet. 526, 537-38 (1840); Light 
v. United States, 220 U.S. 523, 527 (1911).
    Second, Congress's broad power may be somewhat constrained to the 
extent property rights have vested in federal lands or minerals. It has 
long been clear, however, as reaffirmed several times by the U.S. 
Supreme Court, that a mining claim located on the federal lands carries 
with it a constitutionally protected property right only where the 
claimant can show a ``discovery'' of a ``valuable mineral deposit.'' 
``[I]t is clear that in order to create valid rights . . . against the 
United States [under the Mining Law] a discovery of mineral is 
essential.'' Union Oil v. Smith, 249 U.S. 337, 346 (1919); see also 
Cole v. Ralph, 252 U.S. 286, 296 (1920). Mining claims without a 
discovery are mere licenses to occupy the federal lands. Their legal 
status is no different from that of a hunter or angler or other casual 
user of federal lands. The locator of a claim on which a discovery is 
lacking has the right to exclude other miners from the claim, so long 
as the original locator is actively exploring for a mineral, Union Oil 
v. Smith, supra, but until a discovery is made the locator has no 
rights against the United States.
    This means the United States is not constrained by law from 
changing its policy or rules, from levying a royalty or other financial 
charge against any minerals produced from such claims, nor even from 
effectively extinguishing such claims altogether, at any time before a 
discovery is made.
    In practice, almost all mining claims are located in advance of 
discovery, to provide a foothold on public lands in order to explore 
for valuable mineral deposits. Such mining claims are located in the 
hope and speculation that a mineral might possibly exist and be 
profitably mined from the claimed land, but the courts have long made 
clear that such hopes and speculations do not satisfy the ``discovery'' 
requirement. See, e.g., United States v. Coleman, 390 U.S. 599 (1968); 
Sullivan v. Iron Silver Mining Co., 143 U.S. 431 (1892).
    The vast majority of the several hundred thousand mining claims 
currently located and maintained on federal lands are not currently 
producing minerals. Many have not even been significantly explored. One 
can safely assume that very few if any claims not now in production 
could presently show a discovery within the applicable legal 
requirements.
    This means that Congress retains practically unfettered authority 
to change the rules regarding them--both the environmental rules (see 
question 1, above) and the financial terms or royalty under which 
mineral production might take place in the future (e.g., the royalty 
asked about in question 4, above).
    Existing claims that are currently being mined-the subject of 
questions 2 and 5 above-require a little different analysis. Such 
claims presumably have a ``discovery'' of a ``valuable mineral 
deposit,'' and thus have a property right. If the government imposes 
new regulation that effectively shuts down such operations, the 
claimant may-and I emphasize may - have a legal argument for 
compensation. Whether the argument succeeds depends on a case-by-case, 
fact-intensive analysis. See, e.g., Tahoe-Sierra Preservation Council, 
Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002).
    Regarding question 2, it is very clear that the government retains 
substantial ongoing regulatory authority over such claims. In 1985, the 
U.S. Supreme Court said this about the power of Congress to legislate 
new requirements for existing mining claims from which minerals were 
currently being produced, and its guidance is worth quoting at some 
length:

          Even with respect to vested property rights, a legislature 
        generally has the power to impose new regulatory constraints on 
        the way in which those rights are used, or to condition their 
        continued retention on performance of certain affirmative 
        duties. As long as the constraint or duty imposed is a 
        reasonable restriction designed to further legitimate 
        legislative objectives, the legislature acts within its powers 
        in imposing such new constraints or duties. * * *
          This power to qualify existing property rights is 
        particularly broad with respect to the ``character'' of the 
        property rights at issue here. Although owners of unpatented 
        mining claims hold fully recognized possessory interests in 
        their claims, we have recognized that these interests are a 
        ``unique form of property.'' * * * The United States, as owner 
        of the underlying fee title to the public domain, maintains 
        broad powers over the terms and conditions upon which the 
        public lands can be used, leased, and acquired. See, e.g., 
        Kleppe v. New Mexico, 426 U.S. 529, 539 (1976). * * *
          Claimants thus take their mineral interests with the 
        knowledge that the Government retains substantial regulatory 
        power over those interests. * * * In addition, the property 
        right here is the right to a flow of income from production of 
        the claim. Similar vested economic rights are held subject to 
        the Government's substantial power to regulate for the public 
        good the conditions under which business is carried out and to 
        redistribute the benefits and burdens of economic life.

    United States v. Locke, 471 U.S. 84, 104-05 (1985).
    The last-quoted sentence also answers question 5, above, which asks 
whether the United States has the authority to impose new financial 
requirements on existing claims that are producing minerals. The 
government retains the right to require a payment (whether labeled a 
tax, royalty, fee, or something else) from a holder of an actively 
mined claim on federal lands, as part of its power to act in the 
general welfare to ``redistribute the benefits and burdens of economic 
life.'' In general, the Supreme Court has never given credence to 
arguments that federal taxes and fees constitute takings of private 
property. See, e.g., Cole v. LaGrange, 113 U.S. 1, 8 (1885) (``the 
taking of property by taxation requires no other compensation than the 
taxpayer receives in being protected by the government to the support 
of which he contributes''); County of Mobile v. Kimball, 102 U.S. 691, 
703 (1880) (``neither is taxation for a public purpose, however great, 
the taking of private property for public use, in the sense of the 
Constitution'').
    Claims that are producing minerals today are not guaranteed a 
future income stream. The minerals must remain marketable, considering 
the myriad of factors affecting commodity prices, the cost of 
production, and so forth. Because ``marketability'' is a standard test 
for discovery, see United States v. Coleman, supra, the mining claimant 
has only a somewhat fragile property right, one which may disappear 
because of circumstances beyond the miner's control. As the Supreme 
Court has held, a ``locator who does not carry his claim to patent . . 
. does take the risk that his claim will no longer [have a discovery 
good against the government].'' Best v. Humboldt Placer Mining Co., 371 
U.S. 334, 336 (1963).
    In this connection, the Interior Department and the federal courts 
have long held that, in determining whether a discovery exists, the 
cost of complying with environmental laws and regulations must be taken 
into account. The courts have recognized that adding environmental 
restrictions may in fact affect claim validity. See, e.g., Clouser v. 
Espy, 42 F.3d 1522 (9th Cir. 1994) (``virtually all forms of 
[government] regulation of mining claims-for instance, limiting the 
permissible methods of mining and prospecting in order to reduce 
incidental environmental damage-will result in increased operating 
costs, and thereby will affect claim validity. However, the  . . .  
case law makes clear that such matters may be regulated by the 
government''); Reeves v.United States, 54 Fed. Cl. 652 (2002) (person 
who located mining claims in a wilderness study area had no compensable 
property right to have a mining plan approved).
    To summarize my answer to questions 1-2 and 4-5, then, there are 
very few limits on Congress's power to apply reforms to existing mining 
claims. It is well settled that the government has nearly unfettered 
authority to apply newly enacted laws to mining claims that are not 
accompanied by a discovery; that is to say, most of the several hundred 
thousand claims currently of record. It also has very considerable 
power to apply new regulations to mining claims that have a discovery 
without creating any obligation to compensate the claimants.
    The Statement of [George W. Bush] Administration Policy issued on 
the House-passed reform bill on November 1, 2007, expresses ``serious 
concerns'' about its royalty provision ``because it fails to take into 
consideration property rights relating to properly maintained mining 
claims established prior to enactment of the bill.'' The quoted 
statement is ambiguous. If the Administration is suggesting that 
``properly maintained mining claims'' without a discovery have property 
rights, it is flat wrong for reasons set out above.
    Perhaps it is referring only to existing ``properly maintained'' 
claims that have a discovery. But even if it is, it seems to be saying 
that it opposes applying a royalty to this much smaller category of 
claims because doing so could result in a ``claim for a compensable 
taking under the Constitution.'' Of course, virtually any government 
action can result in a ``claim'' of a compensable taking. That is not 
the same thing as saying that the ``claim'' would be honored by the 
courts. Indeed, Congress would have very little to do if it acted only 
in ways that did not give anyone some sort of ``claim'' for 
compensation.
    For these reasons, I believe the Committee should give no weight to 
the Administration's assertion unless it-and I would include here the 
Department of Justice as well as the Solicitor's Office of the Interior 
Department-supplies the Committee with a legal memorandum explaining in 
detail exactly what its position is on this matter, and responding to 
the analysis I have offered here.
    Now let me turn to questions 3 and 6, which raise issues not about 
Congress's power, but about matters of equitable policy in reforming 
the Mining Law. This is mainly a matter of balancing the interest to be 
protected by the new law (primarily the public's interest in a healthy 
environment and the interests of the public owners of these minerals in 
receiving a fair return for their ownership interest) with the interest 
of the mining industry (primarily in protecting sunk investments).
    I would strongly discourage exempting all existing claims from the 
application of royalties or other levies or from new environmental 
regulations. Many areas of federal land with mineral potential are 
already blanketed with claims but, as I indicated earlier, most of 
these claims lack a discovery and a concomitant property right. Equally 
important, most have seen little investment and are being held 
speculatively. Most mines likely to open in the next few decades will 
probably be on already-located claims. Thus exempting existing claims 
from new requirements (permanently, or for a period of years) is not 
legally required, would open a huge loophole, and thwart genuine 
reform.
    Regarding environmental requirements (question 3), I suggest that 
existing exploration operations need be given only a minimal time-
perhaps a year or two-to bring themselves into compliance with new 
rules. At the exploration stage the amount of investment is relatively 
small compared to the actual mining enterprise. While more time should 
be provided to existing producing mines, generally a few years should 
be sufficient.
    It is worth keeping in mind that, while large mines can involve 
very substantial investments, the costs of environmental compliance are 
only a small part of the industry's overall profitability picture, and 
tend to fade into insignificance compared to factors like retail 
commodity prices, foreign exchange rates, the cost of energy and 
equipment, and so forth.
    Regarding a royalty or other financial payment to the government 
(question 6), the investment interest in existing mines could be taken 
into account in at least two different ones. One is to impose a lower 
payment on existing mines than new ones (as HR 2262 does). The other is 
to transition into a royalty payment gradually or after a period of 
years. There are various other ways to craft a royalty or other levy 
that adjusts its impact on overall profitability. Payments to the 
government might be on a sliding scale depending upon overall commodity 
prices; e.g., if the price of gold doubles or is halved, the royalty or 
other payment could be adjusted accordingly.
    Any royalty or similar payment the Congress might embrace-such as 
8% for new mines, and 4% for existing mines, as provided in the House-
passed reform bill, H.R. 2262, or a higher percentage comparable to 
what the coal or oil and gas industry pay on federal leases-will be 
small compared to risk factors the industry has long faced every day, 
like fluctuations in commodity prices, and in exchange and interest 
rates. Sizeable return to the government from fossil fuel extraction 
from federal lands has not hurt the competitiveness of that industry. 
This is not to trivialize the investments or the equitable concerns of 
existing miners, but to suggest how easy it is to overstate the 
significance of the costs of reform on the overall profitability of the 
industry.
    Practically all the major mineral producing countries of the world 
have increased royalties or other financial payments and tightened 
environmental requirements on mines in the last couple of decades, and 
yet overall the industry has never been in better financial health.
       Responses of John Leshy to Questions From Senator Cantwell
    Mr. Leshy, I am very concerned about the environmental impacts of 
hardrock mineral mining on our nation's public lands. Hardrock mining, 
the extraction of metals such as gold, silver and copper, can cause 
significant impacts on the environment, potentially affecting ground 
and surface waters, aquatic life, vegetation, soils, air, wildlife, and 
human health. Metals contamination resulting from hardrock mining can 
continue for hundreds or thousands of years following the cessation of 
mining operations. In the United States, more than 500,000 inactive and 
abandoned mines are estimated to exist in 32 states. Thousands of 
abandoned mines in Washington are located in sensitive mountain 
watersheds.
    Recently in my state, the Bureau of Land Management (BLM) released 
a draft Environmental Assessment for issuing a hardrock minerals lease 
near Mount St. Helens. I am concerned that the BLM's draft 
Environmental Assessment did not adequately address potential 
environmental impacts. Although the Environmental Assessment identifies 
unstable soils in the potential lease area and notes concerns about 
sediments washing into the streams that feed into the Green River, the 
BLM nonetheless issued a finding of no significant impact. The Green 
River is home to listed species of salmon and steelhead, and mine 
development activity could significantly harm and potentially eliminate 
these fish populations. Also, acid rock drainage from the mine's 
leaching process could contaminate the municipal water supply for 
nearby communities including Kelso, Castle Rock, and Longview.
    Question 1. On April 18, I sent a letter to Acting Bureau of Land 
Management (BLM) Director Jim Hughes regarding the BLM's recent 
announcement of a hardrock minerals lease near Mount St. Helens. Mr. 
Hughes stated in his response to my letter that ``implementation of the 
preferred alternative would not result in authorization of on-the-
ground activities or disturbances, thus, at this point in time, there 
are no impacts to analyze for this action.'' I understand that the BLM 
has a statutory responsibility under National Environmental Policy Act 
to analyze and document the direct, indirect and cumulative impacts of 
past, present and reasonably foreseeable future actions resulting from 
federally authorized fluid minerals activities. The issuance of a 
hardrock minerals lease is a necessary precursor to authorizing mining 
activity that pose serious environmental consequences.
    a. In the fluid federal minerals mining program, federal 
            commitments to mining companies seem concrete, in practice 
            at least, at the point of lease issuance. What is your 
            understanding of the point in the leasing application 
            process that it is appropriate for the BLM to consider the 
            environmental impacts of a proposed mining operation on 
            federal public lands?
    b. Do you agree with the position that ``there are no impacts to 
            analyze'' when undertaking an Environmental Assessment 
            considering the issuance of a hardrock minerals lease?
    c. Do you believe an Environmental Assessment that considers the 
            issuance of a hardrock minerals lease should accurately 
            evaluate all potential environmental impacts that could 
            result from a mining lease?
    Question 2. In response to my April 18 letter, Mr. Hughes stated 
that ``The U.S. Forest Service consent letter indicated that issuance 
of a lease is compatible with both the purposes of the acquisition, and 
the Forest Plan.'' It is my understanding that the BLM can only issue a 
lease for acquired land if it is compatible with the purposes for which 
the government obtained the land. The land in question was purchased by 
the government from the Trust for Public Land under the authority of 
the Weeks Act using Land and Water Conservation Funds, which are 
appropriated by Congress for conservation and recreation purposes. Land 
acquisition under the Weeks Act is for limited purposes. Specifically, 
only lands ``necessary to the regulation of the flow of navigable 
streams or for the production of timber'' are to be recommended for 
purchase. Such acquisition is authorized only if it ``will promote or 
protect the navigation of streams on whose watersheds they lie.'' 
Furthermore, the Gifford Pinchot National Forest Supervisor sent a 
letter to the Congressional Delegation in February 1986 stating that 
the federal government's acquisition of this property ``will aid in the 
preservation of the integrity of the Green River prior to its entering 
the National Volcanic Monument, and will also aid in the preservation 
of the scenic beauty of this area which is to become an important 
Monument portal.''
    Question 3. Mr. Leshy, can you imagine a scenario where leasing 
this land acquired through the Weeks Act to a mining company is 
compatible with ``promoting or protecting the navigation of streams on 
whose watersheds they lie,'' the ``preservation of the integrity of the 
Green River,'' or ``aid[s] in the preservation of the scenic beauty 
of'' such an area?
    Answers. Because this proposal involves acquired land, the Mining 
Law of 1872 is not involved. Although I am not familiar with the 
details of this situation, NEPA generally requires BLM to assess the 
environmental impacts of proposed mining operations made possible by a 
decision to lease at the time that decision is made. The Act requires 
federal agencies to take a ``hard look'' at the environmental 
consequences of their actions before they occur, thereby ensuring 
``that the agency, in reaching its decision, will have available, and 
will carefully consider, detailed information concerning significant 
environmental impact.'' Robertson v. Methow Valley Citizens Council, 
490 U.S. 332, 349 (1989) As a statute intended to affect federal agency 
decisionmaking, the courts have held that the ``appropriate time for 
preparing an EIS is prior to a decision, when the decision maker 
retains a maximum range of options,'' which is before ``irreversible 
and irretrievable commitments of resources'' are made. Sierra Club v. 
Peterson, 717 F.2d 1409, 1414 (D.C. Cir. 1983).
    Regarding the question of whether there are impacts to analyze at 
the lease issuance stage, and what the BLM should consider at that 
stage, NEPA requires consideration of all reasonably foreseeable 
impacts that may develop as a result of lease issuance. The government 
might credibly argue that there are no impacts to analyze at the lease 
issuance stage only if the lease itself contained a stipulation that 
the lessee had no right to occupy the leased land surface without 
further approval from the government-sometimes called a ``no-surface-
occupancy'' or NSO stipulation. Courts have held that the government 
may postpone NEPA compliance past the lease issuance stage on leases 
with an NSO stipulation. If the lease does not contain an NSO 
stipulation, the possibility of full-scale mining needs to be 
considered at the lease issuance stage, because it is a reasonably 
foreseeable consequence of issuing a mineral lease without reserving 
the authority to deny surface occupancy of the leased premises. See 
Conner v. Burford, 848 F.2d 1441, 1448-51 (9th Cir. 1988); Peterson, 
717 F.2d at 1414. The fact that there is some uncertainty about the 
future, and thus te NEPA analysis requires some speculation, is not a 
sufficient excuse for not doing it: ``Reasonable forecasting and 
speculation is thus implicit in NEPA, and we must reject any attempt by 
agencies to shirk their responsibilities under NEPA by labeling any and 
all discussion of future environmental effects as ``crystal ball 
inquiry.'' City of Davis v. Coleman, 521 F.2d 661, 676 (9th Cir. 1975).
    Regarding your question in Paragraph 3, because the land here was 
acquired under the authority of the Weeks Act for limited purposes 
relating to watershed protection and streamflow, any mineral 
development on such lands (though not prohibited entirely, see 16 
U.S.C.  520) is allowable by the Interior Secretary only if the 
Secretary of Agriculture advises that it will not interfere with the 
primary purposes for which the land was acquired. Also, the fact that 
this land was, as you point out, acquired with Land and Water 
Conservation Fund (``LWCF'') moneys brings into play the specific 
requirement of the Land and Water Conservation Fund Act of 1965 that 
lands purchased by the Forest Service with LWCF funds shall be 
``primarily of value for outdoor recreation purposes.'' 16 U.S.C.  
460l-9(a)(1).
    Leasing these lands for mining purposes could well be inconsistent 
with the terms under which these lands were acquired. Cf. Kerr-McGee 
Corp. v. Hodel, 630 F.Supp. 621 (D.D.C. 1986) vacated as moot, 840 F.2d 
68 (D.C.Cir. 1988) (``it appears that mineral development is 
incompatible with the primary purposes'' for which the forest lands 
were acquired under the Weeks Act).
       Responses of John Leshy to Questions From Senator Salazar
    Question 1. The issue of payment for the right to mine minerals 
from federal lands seems to be one of the areas where there are 
differences of opinion when mining law reform is discussed. Some 
advocate a royalty-based approach that would collect a fee based on the 
production of minerals from federal lands. Others have suggested a 
profit-based approach where payments would be tied to the income a 
company makes. It seems to me that one of the goals of collecting a 
payment is to fund the cleanup of abandoned mine sites. Can you share 
your views on how a payment for the right to mine might be structured 
that would guarantee adequate funding, while also ensuring a 
sustainable mining industry?
    Question 2. It seems that our country must address the past legacy 
of abandoned mines that continue to pollute the lands in the West. We 
know today that there are companies that are willing to step forward as 
``Good Samaritans'' to help address the problems from past mining, but 
they may be hesitant to step forward because of concerns about the 
possibility of becoming fully responsible for cleaning up a problem 
they did not cause. Can you describe what changes you believe are 
necessary to make to existing laws to encourage Good Samaritans to help 
in addressing abandoned mine sites?
    Answer 1. I agree completely that a very important goal of 
collecting a payment for hardrock mineral extraction on federal land is 
to fund the cleanup of abandoned mines. As many have noted, the problem 
is huge; while estimates vary, there is no doubt many thousands of 
abandoned mines on the federal lands pose continuing safety and 
pollution problems, and the cost of cleaning them up runs into the tens 
of billions of dollars. An informative report on this subject is by 
Prof. Patricia Nelson Limerick, et al., Cleaning Up Abandoned Hardrock 
Mines in the West: Prospecting for a Better Future (U. of Colo. Center 
of the American West, 2005), available at http://www.centerwest.org/
publications/pdf/mines.pdf.
    In considering this problem in the overall context of Mining Law 
reform, I would urge that the first principle be one borrowed from the 
Hippocratic Oath-do no harm. Reforming the Mining Law should cement in 
place environmental standards and controls sufficient to prevent the 
already huge problem of abandoned mines from getting worse. A key part 
of this is to make it difficult for companies to walk away and leave 
polluting messes with the cleanup bill going to the Nation's taxpayers.
    Second, in my judgment, it is entirely appropriate to set aside a 
significant part of the revenues raised by any royalty or other levy to 
address this sad legacy, for often the owners and operators can no 
longer be found to bear the costs. It is appropriate for the industry 
responsible for creating the problem (and its consumers) bear 
considerable responsibility for cleaning it up.
    Third, in terms of standards for cleanup, it seems obvious that 
serious safety problems need to be put at top priority, with serious 
pollution and other environmental problems second. But I would caution 
against mandating any comprehensive inventory of the scope of the 
problem before on-the-ground work can begin. Many states and some 
federal agencies have been evaluating the particulars of this problem 
for many years. Fourth, federal money should be limited to cleaning up 
federal lands, or sites that are in mixed federal and state/private 
ownerships. There is plenty to do for the foreseeable future on federal 
lands. Other laws, federal, state and local, may provide remedies to 
clean up abandoned sites on non-federal lands. In generally, I think 
the approach to this problem contained in the reform bill introduced in 
the House, H.R. 2262, is a sound one.
    It seems to me there are two basic goals in designing a system by 
which the hardrock mining industry pays something to the public for the 
use of the public's lands and minerals: First, that it produce real 
revenue for the Treasury, to reduce the deficit and/or to repair some 
of the costs and damage left by past hardrock mining activities. 
Second, that it be efficient to administer, to minimize opportunities 
for clever accountants and lawyers to ``game'' the system. Generally 
speaking, the rule of thumb for a royalty is that the more exemptions, 
deductions and offsets allowed, the more the system can be ``gamed,'' 
and the less likelihood significant revenue will be raised. As an 
extreme example, I would direct your attention to the ``sham'' royalty 
included in what came to be known as the ``sham reform'' proposal that 
was included in the gigantic budget reconciliation bill vetoed by then-
President Clinton in early 1996. My recollection is that the 
Congressional Research Service estimated that it was so riddled with 
deductions and loopholes that it would have raised a paltry $1 million 
per year from the entire multi-billion dollar industry.
    For guidance on both royalty levels and structure, the Committee 
would be well-served to look at the oil and gas and coal provision of 
the Mineral Leasing Act. The context is closely analogous to hardrock 
mining-in each case the objective is to secure a fair share of revenue 
from highly capitalized, risky, globally competitive production of 
minerals from publicly-owned lands. While the Leasing Act royalty 
systems are not free from opportunities for mischief, there is no doubt 
they raise significant revenue for the Treasury in a relatively 
efficient manner.
    Regarding how such a payment might be structured, I would point out 
that most proposals for reforming the Mining Law in this area levy a 
royalty on mineral production, but apply it only to mineral ore 
extracted from federal lands. It does not apply any kind of rental 
(other than the claim holding fee already in law) or royalty to the use 
of federal lands to support minerals that have already been patented. 
Yet it is very common for there to be a jumbled mixture of private, 
state and federal ownership of large hardrock mines. Sometimes all or 
most of the actual ore body is on non-federal land (often, because it 
has already been patented under the generous terms of the Mining Law).
    Even where the U.S. no longer owns any part of the ore body, the 
federal lands play a key role in bringing the ore body into production-
by providing lands for mineral processing, for dumping waste rock and 
mine tailings, and so forth. The United States should, in my judgment, 
receive a return for the use of its land in these circumstances that 
reflects its contribution, both past and present, to the overall 
operation.
    Suppose, for example, that the ore body of a large producing mine 
was 75% in private ownership, having been previously patented under the 
Mining Law, and 25% federal land. And suppose that thousands of acres 
of federal land are being used as waste rock dumps and tailings piles 
for the mining operation. It seems to me that a royalty or payment to 
the Treasury which is limited to the 25% of the ore body still in 
federal ownership is inadequate return to the public for this use of 
the public's resources. Mine operators who use thousands of acres of 
federal land as a dumping ground ought to pay something more than a 
nominal fee. Their payment ought to reflect some measure of the value 
these federal lands contribute to the entire mining operation. I would 
be happy to work with the committee to try fashion something that would 
do that.
    Answer 2. I agree Congress ought to consider legislation that 
clarifies the responsibilities and liability exposure of those who 
propose do restoration and environmental remediation work on abandoned 
mines. The general idea is simply stated: Laws and regulations ought to 
encourage such cleanup activity without the participants facing 
potential liability or responsibility for cleaning up problems they did 
not create, so long as the participants make things measurably better 
on the ground. But of course the devil is in the details. Such 
provisions need to be carefully designed to avoid creating legal 
loopholes in the existing fabric of environmental laws or other 
opportunities for mischief- particularly when new mining (or 
``remining'') is proposed--because the end result could be to weaken 
necessary protections in existing law, and ultimately do more harm than 
good. I have not followed this topic closely and so I have no specific 
suggestions to make as to how to do this.
    This general subject is related to reform of the Mining Law of 1872 
because that Law's historic inadequacies and silence on environmental 
protection led directly to the large abandoned mined land problem. But 
it is fundamentally different in the sense that Good Samaritan 
proposals involve tinkering with the coverage and standards of modern 
environmental laws like the Clean Water Act. In short, while it is a 
problem well worth addressing by the Congress, I do not believe it has 
to be addressed as part of Mining Law reform. The Mining Law reform 
proposal that just passed the House (HR 2262) would deal with the 
problem of abandoned mines more directly and comprehensively, by 
levying a royalty on hardrock mineral production and dedicating a 
substantial portion of the resulting revenues to cleaning up abandoned 
mine sites on federal land.
                                 ______
                                 
     Responses of Dusty Horwitt to Questions From Senator Domenici
    Question 1. Can you tell us how many plans of operation have been 
submitted for the claims that are displayed on the maps that you showed 
us? (The maps included a state map of New Mexico, a state map of 
Colorado, a map of mining claims near Grand Canyon National Park and a 
map of claims in southern Utah and Colorado including claims near 
Arches National Park and Canyonlands National Park. The claims and 
mines on the maps were taken from the Bureau of Land Management's 
LR2000 Database, July 2007 download.)
    Answer. There are 14 plans of operation within the state of New 
Mexico and 31 plans of operation within the State of Colorado. There 
are 23 plans of operation on the map showing Grand Canyon National Park 
and 22 on the map showing southern Utah and Colorado that includes 
Arches National Park and Canyonlands National Park. Some of these plans 
may be difficult to see without zooming in because they are 
intermingled with claims or other features.
    (Please not that BLM's LR2000 database contains records of all 
claims on federal land but includes only those plans located on BLM 
land. Plans on Forest Service land are not included in the database and 
are not shown on the maps. Therefore, the maps likely under represent 
the total number of plans in the areas shown. The Forest Service keeps 
records of plans in locan ranger district offices. Because these 
records are not in a central database, records for plans on Forest 
Service land are more difficult to access.)
    It takes mining on only a small percentage of claims to create 
pollution impacts that can last a lifetime . . . or longer. Some of 
today's contamination from California's Iron Mountain Mine-a federal 
Superfund Site-dates to mining activity in the 1800s. Pollution from 
Montana's Zortman-Landusky mine that dates to the 1990s may require 
perpetual water treatment.
    Because of the catastrophic impacts that mining can have-it is our 
leading source of toxic pollution-land managers must have the ability 
to balance mining with other resources such as water quality just as 
they can for other extractive industries including oil and natural gas. 
Under current law, once a valid claim is staked, the federal government 
interprets mining law as providing virtually no way to stop hard rock 
mining at that site, short of buying out valid claims or other 
extraordinary intervention, even when mining is in plain view of 
national parks such as Grand Canyon or Death Valley.
    ``We are very concerned,'' Death Valley National Park Supt. James 
T. Reynolds told the Los Angeles Times on October 16 about the surge in 
claims near the Park. ``I hope the public understands the destruction 
that will occur. Development will have far-reaching impacts that our 
grandchildren will have to address.''
    ``Unfortunately, we don't have the authority to stop'' any of the 
claims, Reynolds said.
    He added that the biggest threat to the Park is the depletion of 
groundwater, which is affected by mining, farming and nearby 
residential development. ``If too much water is pumped from the 
aquifer, then the seeps in the springs in Death Valley will no longer 
flow,'' he said. ``Plants will die, animals will die and they would 
even have to truck in water to the valley's private resort.''
    Reynolds told the Times that he is in negotiations with two borite 
mining companies to convince them to donate their land to the park. 
Reynolds has strongly opposed the reopening of the Briggs mine, an 
open-pit cyanide operation in the Panamint Range on the park's western 
border.
    Canyon Resources, the company that owns the Briggs Mine, says on 
its website that ``re-starting the Briggs Mine in light of today's gold 
market is Canyon's top priority.'' Canyon Resources has a history of 
pollution in Montana. Its Kendall Mine was permitted in 1989 and has 
exceeded water quality standards according to the EPA. Canyon Resources 
led an unsuccessful attempt in 2004 to overturn a Montana state law, 
passed by voters in 1998, that bans open-pit cyanide heap leach gold 
mining. Previously, the company sued the state of Montana for 
``taking'' its potential profits due to passage of the law.
    Without changes to the mining law, land managers may face the same 
situation they did in 1996 when the federal government paid $65 million 
to buy out patented claims just three miles from Yellowstone National 
Park that would have been the site of a major gold mine. The mine would 
have been located at the headwaters of three streams that flow into the 
park.
    Question 2. How often do mining claims become full-scale 
operations? We cannot calculate the number of claims that are included 
in each plan of operation or mine, but the percentage of total claims 
that become full-scale operations is likely small. Yet it takes mining 
activity on only a small percentage of claims to create devastating 
pollution problems.
    Answer. Please refer to my response to Question #1.
      Responses of Dusty Horwitt to Questions From Senator Salazar
    Question 3. The issue of payment for the right to mine minerals 
from federal lands seems to be one of the areas where there are 
differences of opinion when mining law reform is discussed. Some 
advocate a royalty-based approach that would collect a fee based on the 
production of minerals from federal lands. Others have suggested a 
profit-based approach where payments would be tied to the income a 
company makes. It seems to me that one of the goals of collecting a 
payment is to fund the cleanup of abandoned mine sites. Can you share 
your views on how a payment for the right to mine might be structured 
that would guarantee adequate funding, while also ensuring a 
sustainable mining industry?
    Answer. Because hardrock mining interests pay no royalty on the 
minerals they extract from federal land-in contrast to every other 
extractive industry-taxpayers have been deprived of a fair return on 
our resources and an important source of funds to help clean up 
abandoned mines. Mines have contaminated more than 40 percent of 
Western watersheds' headwaters according to the EPA and cleanup costs 
for all abandoned mines are estimated at $32 billion or more. Abandoned 
mines can also be an immediate hazard. In September, a 13-year-old girl 
died and her 10-year-old sister was seriously injured when they were 
riding an ATV and fell into an abandoned, unmarked mineshaft in 
Arizona-the type of accident that is all too common throughout the 
West. A fair royalty is critical to addressing these significant 
problems.
    We believe that a royalty should be based on the gross proceeds 
that mining interests receive from selling their products. A variation 
on this type of royalty is known as ``net smelter return'' in which a 
royalty is paid on the amount of money a refinery or smelter pays the 
mine operator for the mine operator's product. The money paid to the 
mine operator is typically based on the current price of the mineral 
with deductions for costs associated with additional processing. The 
net smelter return, like the gross proceeds royalty, does not include 
deductions for operating costs.
    We do not support the other type of royalty often discussed: a net 
profits or net proceeds royalty. In this model, the royalty is a 
percentage of the mine's gross income minus the expenses required to 
generate the income. The problem with this model is that companies can 
make the profits disappear simply through innovative accounting 
mechanisms, such as increasing expenses, leaving taxpayers with little 
money for abandoned mine cleanup. The Las Vegas Sun reported recently 
on a study by the mining watchdog group, Earthworks, which found that 
multinational mining companies had thus erased their royalties under 
Nevada's net proceeds model.
    ``The state's largest gold mines, operated by global giants Barrick 
and Newmont,'' the Sun reported, ``have deducted about $500 million 
three times--at Barrick's Goldstrike in 2001 and 2002, and at Newmont's 
Carlin mines in 2005--wiping out their tax bill.''
    Between 2000 and 2005, Nevada's mining industry paid royalties to 
the state that amounted to just one percent of sales: $158 million on 
sales of $16.4 billion. Gold is the major metal mined in Nevada and, 
during this time period, its price rose 160 percent.
    A fair royalty for hardrock mines would be eight percent or greater 
based on what coal mining companies pay to extract federal coal and 
based on the fact that the hardrock mining industry has negotiated 
similar rates in its private agreements. Underground coal operators on 
federal land pay an eight percent royalty on the gross value of the 
coal. Surface coal operators pay a 12.5 percent royalty on gross value. 
LKA International, a Washington State-based natural resources company, 
leases its Golden Wonder Mine in Colorado to Au Mining, Inc. in 
exchange for a 10 percent net smelter royalty. Canadian mining company, 
High River Gold, will pay a 15 percent gross royalty at its Taparko-
Boroum mine in Burkina-Faso. And Newmont, the world's second-largest 
gold producer, pays what amounts to an 18 percent gross royalty on its 
Gold Quarry property in Nevada.
    In addition, as Earthworks has noted, existing mines can afford an 
eight percent royalty or greater because metals prices have risen so 
much. Gold prices were roughly $270 per ounce in 2001 when most 
existing U.S. mines were either operating or in the planning process. 
Gold is currently worth almost $790 an ounce. The prices of other 
metals have also skyrocketed; uranium rose from less than $15 a pound 
in 2003 to more than $125 a pound earlier this year. With all other 
extractive industries paying a royalty, billions of dollars of cleanup 
needs and surging metals prices, there is no reason why the industry 
cannot pay at least an eight percent royalty on both existing and new 
mines.
    Question 4. It seems that our country must address the past legacy 
of abandoned mines that continue to pollute the lands in the West. We 
know today that there are companies that are willing to step forward as 
``Good Samaritans'' to help address the problems from past mining, but 
they may be hesitant to step forward because of concerns about the 
possibility of becoming fully responsible for cleaning up a problem 
they did not cause. Can you describe what changes you believe are 
necessary to make to existing laws to encourage Good Samaritans to help 
in addressing abandoned mine sites?
    The general principle of our pollution laws-a principle that we 
endorse-is that the polluter pays for cleanup. Governments should 
enforce this principle. When others step in to attempt to clean up 
abandoned mines, including companies and state and local governments, 
they should be required to meet all applicable federal, state and local 
cleanup standards.
    Although some view legal liability as an impediment to Good 
Samaritans who might otherwise undertake mine cleanups, legal liability 
drives cleanups more effectively than any Good Samaritan legislation 
could. As Velma Smith of National Environmental Trust told the House 
Committee on Resources last year, the Yerington mine in Nevada is being 
cleaned up-though serious problems remain-because the potential for 
Superfund liability provides significant motivation for potentially 
responsible parties.
    There are other examples of mines being cleaned up within our 
current legal framework. In Alaska, the federal and state government 
have collaborated to restore an area near the Birch Creek National Wild 
River Corridor that had been used for placer gold mining from 1984 to 
1990. In Idaho, the federal government, with help from a local Boy 
Scout troop, completed a cleanup at the Martin Mine that helped to stop 
a threat to water quality in Little Cottonwood Creek.
    We must bear in mind that mining cleanups can be complex and 
unpredictable, as Smith noted; some attempts to mitigate mine pollution 
have met with mixed results. In 1997, for example, a mining company in 
Arizona attempted to cover a tailings impoundment with waste rock but 
the impoundment failed, sending debris into nearby Pinto Creek. Such 
cleanup activities ought to be conducted with full environmental 
standards.
    The real issue is money: governments lack the funds needed to clean 
up abandoned mines that will cost $32 billion or more to remediate. We 
support a royalty and other funding mechanisms to pay for this 
important cleanup.
                                 ______
                                 
       Responses of Tim Snider to Questions From Senator Salazar
    Question 1. The issue of payment for the right to mine minerals 
from federal lands seems to be one of the areas where there are 
differences of opinion when mining law reform is discussed. Some 
advocate a royalty-based approach that would collect a fee based on the 
production of minerals from federal lands. Others have suggested a 
profit-based approach where payments would be tied to the income a 
company makes. It seems to me that one of the goals of collecting a 
payment is to fund the cleanup of abandoned mine sites. Can you share 
your views on how a payment for the right to mine might be structured 
that would guarantee adequate funding, while also ensuring a 
sustainable mining industry?
    Answer. The National Mining Association shares your dual objective 
of fashioning a royalty that raises funds for much-needed cleanup of 
abandoned mined lands, while at the same time making sure it is 
structured in a way that ensures a sustainable mining industry in this 
country. The industry has long supported a ``net proceeds'' royalty or 
production payment patterned on the Nevada net proceeds of mines tax 
which allows for deduction of the enormous ore beneficiation and 
processing costs and provides a fair return to the government in good 
times and bad times. When profit margins are higher due to volatile 
high prices, the royalty revenues would increase.
    The industry opposes a gross royalty, such as the one contained in 
H.R.2262 because it would eliminate the vast majority of the industry's 
profit from longterm mining investments, detrimentally impact 
investments in new mines and would cause significant job losses, 
substantial revenue losses to state and federal treasuries, and mine 
closures. We attach testimony given by James F. Cress,* a mining lawyer 
with the firm Holme Roberts & Owen before the House Natural Resources 
Committee, which does an excellent job of presenting the problems with 
gross royalties.
---------------------------------------------------------------------------
    * See Appendix II.
---------------------------------------------------------------------------
    Question 2. It seems that our country must address the past legacy 
of abandoned mines that continue to pollute the lands in the West. We 
know today that there are companies that are willing to step forward as 
``Good Samaritans'' to help address the problems from past mining, but 
they may be hesitant to step forward because of concerns about the 
possibility of becoming fully responsible for cleaning up a problem 
they did not cause. Can you describe what changes you believe are 
necessary to make to existing laws to encourage Good Samaritans to help 
in addressing abandoned mine sites?
    Answer. You are correct that the mining industry has long been 
interested in promoting thevoluntary cleanup of abandoned mines. 
Although it may seem counterintuitive, existing federal and state 
environmental laws are the major obstacles that stand in the way of 
voluntary cleanups. A ``Good Samaritan'' that begins to remediate or 
even investigate a site could be potentially liable under the 
Comprehensive Environmental, Response, Compensation and Liability Act 
(CERCLA) and the Resource Conservation and Recovery Act (RCRA) for 
cleanup of the entire site to strict remediation standards, even though 
it did not create the contamination at issue. In addition, a Good 
Samaritan could be liable under the Clean Water Act (CWA) to prevent 
future discharges from an abandoned site to surface waters. These are 
liabilities and regulatory responsibilities that Good Samaritans are 
unlikely to voluntarily accept, particularly with respect to abandoned 
sites with significant environmental problems.
    Legislation should ensure that mining companies that did not create 
the environmental problems associated with a particular abandoned mine 
qualify as ``Good Samaritans''. Companies have the resources, 
expertise, experience and technology to efficiently and appropriately 
assess problem sites. We are prepared to help.
    Therefore, legislation should provide EPA with the discretion, on a 
case-by-case basis, to revise the regulatory and/or liability 
provisions of federal and state environmental law that might otherwise 
apply to the Good Samaritan. In order for the mining industry to 
participate in Good Samaritan efforts, there needs to be assurance that 
the mining company will not be subject to suits after the fact for 
having done exactly what was permitted by the EPA.
    The industry also supports the opportunity to ``remine'' while 
performing a Good Samaritan cleanup. Abandoned mining sites are located 
in highly mineralized areas. Processing and reuse of historic mining 
material may often be the most efficient and least costly means of 
cleaning up a site. Allowing a company, particularly a company with 
operations near the abandoned site, to process such materials and 
wastes with adequate liability protection would provide a financial 
incentive for mining companies to remediate such sites. In addition, 
part of the net profits from the remining could be split with EPA to 
fund remediation at other abandoned sites.
        Response of Tim Snider to Question From Senator Bingaman
    Question 3. In your testimony you state ``As a result of these laws 
and practices, new mining operations are either restricted or banned on 
more than half of all federally owned public lands.'' What is the basis 
for this statement?
    Answer. Bureau of Land Management 2000 Study, ``Public Lands, On-
Shore Federal and Indian Minerals in Lands of the U.S.: 
Responsibilities of the Bureau of Land Management.'' p 12.*
---------------------------------------------------------------------------
    * Documents referred to in Mr. Snider's responses have been 
retained in committee files.
---------------------------------------------------------------------------
       Responses of Tim Snider to Questions From Senator Domenici
    Question 4. How much mining activity on public lands is undertaken 
by foreign basedcompanies?
    Answer. According to the environmental organization, Environmental 
Working Group (EWG), only 20 percent of the claims on federal lands in 
the U.S. are under control of foreign controlled corporations. See EWG 
Report, ``Who Owns the West'' at http://www.ewg.org/mining/report/
index.php?stab=US&chapter=3.
                                 ______
                                 
    [Responses to the following questions were not received at 
the time the hearing went to press:]

             Questions for Jim Butler From Senator Bingaman
    Question 1. In your view, can legislation legally impose new 
environmental requirements on existing claims that are not yet being 
mined?
    Question 2. Can legislation legally impose new environmental 
requirements on existing claims that are being mined on the date of 
enactment?
    Question 3. What transition rules should apply to any new 
environmental requirements?
    Question 4. In your view, can legislation legally impose a royalty 
on existing claims that are not yet being mined?
    Question 5. Can legislation legally impose a royalty on existing 
claims that are being mined on the date of enactment?
    Question 6. What transition rules should apply to any new royalty?
             Questions for Jim Butler From Senator Salazar
    Question 1. The issue of payment for the right to mine minerals 
from federal lands seems to be one of the areas where there are 
differences of opinion when mining law reform is discussed. Some 
advocate a royalty-based approach that would collect a fee based on the 
production of minerals from federal lands. Others have suggested a 
profit-based approach where payments would be tied to the income a 
company makes. It seems to me that one of the goals of collecting a 
payment is to fund the cleanup of abandoned mine sites. Can you share 
your views on how a payment for the right to mine might be structured 
that would guarantee adequate funding, while also ensuring a 
sustainable mining industry?
    Question 2. It seems that our country must address the past legacy 
of abandoned mines that continue to pollute the lands in the West. We 
know today that there are companies that are willing to step forward as 
``Good Samaritans'' to help address the problems from past mining, but 
they may be hesitant to step forward because of concerns about the 
possibility of becoming fully responsible for cleaning up a problem 
they did not cause. Can you describe what changes you believe are 
necessary to make to existing laws to encourage Good Samaritans to help 
in addressing abandoned mine sites?
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

 Statement of James F. Cress, Attorney, Holme Roberts & Owen, on H.R. 
                                  2262
    Mr. Chairman and members of the Subcommittee, my name is Jim Cress, 
and I am testifying today as a mining lawyer in private practice on the 
subject of mining royalties. I am a partner at Holme Roberts & Owen, a 
109-year old law firm that represented miners in Colorado in the late 
1800s and today represents mining companies around the globe. I have 
specialized for nearly 20 years in U.S. and international mining law, 
as well as oil and gas and coal law. I have represented mining 
companies and landowners in negotiating royalties for gold, silver, 
copper, coal, uranium, oil and gas and other minerals, and have advised 
clients on royalty compliance for private, federal and state royalties 
and severance taxes. In my international practice, I have negotiated 
royalty and tax sharing agreements with governments from Asia to the 
Americas. I have taught in the Graduate Studies program in Natural 
Resources and Environmental law at the University of Denver Sturm 
College of Law, am a contributing author to the Rocky Mountain Mineral 
Law Foundation's American Law of Mining treatise, and am the former 
Chair of the Mineral Law Section of the Colorado Bar Association. Thank 
you for the opportunity to appear and speak on the important issue of 
hardrock mining royalties.
the h.r. 2262 royalty is a gross royalty, not a ``net smelter return,'' 
 and is not an appropriate measure of fair value for mining on federal 
                                 lands
    This hearing focuses on the royalty provisions of H.R. 2262. 
Section 102(a)(1) of H.R. 2262 provides for a royalty of 8 percent of 
the ``net smelter return'' from production from federal mining claims. 
The term ``net smelter return'' is defined in Section 102(i) as ``gross 
income'' as defined in Section 613(c)(1) of the Internal Revenue Code 
of 1986. This provision is used to define the depletion allowance under 
the tax code, and was not intended to capture a fair return for 
minerals mined from federal lands.
    Let's call a spade a spade: the H.R 2262 royalty is a gross 
royalty, not a net royalty. The use of the term ``net smelter return'' 
in the bill is actually misleading, because this royalty is not a ``net 
smelter return'' royalty as customarily used in the mining industry.
    A customary ``net smelter return'' royalty in the mining industry 
permits the deduction of the costs of smelting (and sometimes costs of 
leaching and other non-smelting processing methods), refining, 
transportation from the mine to smelter, transportation from refinery 
to market, as well as deduction of taxes paid to the government and 
royalties paid to landowners. The deduction of post-mining costs such 
as smelting and refining is, in fact, the hallmark of this type of 
royalty (thus the name ``net smelter return'').
    The term ``gross income from mining'' under Section 613(c)(1) of 
the Internal Revenue Code is designed to capture the gross value of the 
mineral after the mining processes end and non-mining processing begin, 
contrary to the industry definition of ``net smelter return.'' The 
intent of this provision of the tax code is to prevent mining companies 
from claiming a depletion allowance on the value added by the non-
mining operations such as smelting and refining operations. Thus, the 
customary deductions for smelting, refining and other costs under an 
industry ``net smelter return'' royalty are actually prohibited under 
Section 613(c)(1). The result is essentially a gross royalty. A gross 
royalty is a blunt axe approach to royalty valuation that ignores the 
comparative value of the federal land base and the value added by 
subsequent beneficiation and processing of mineral products, and makes 
little sense in the context of hardrock mineral economics.
a gross royalty is not a fair measure of the value of hardrock minerals 
                            in federal lands
    Any royalty payment to the United States for hardrock minerals 
should be based on the value of the United States' ownership interest 
in the land. That interest is limited to the minerals in the ground, 
and it cannot justifiably be extended to require a royalty to be paid 
on values added to the minerals after mining, by the mining company 
processing, refining and selling the mineral products. The United 
States makes available land, and any minerals in the land for 
development, but the United States contributes nothing to the costs and 
effort of producing and processing the minerals.
    Gross royalties are inconsistent with the principle of sustainable 
development. A gross royalty reduces the volume of an ore deposit that 
can be recovered. Each deposit of metallic minerals will have varying 
grades of mineral, generally requiring extensive concentration and 
refining to be marketable. The portion of the deposit with grades too 
low to be recovered economically is either removed as waste or left 
undisturbed in the ground. Adding costs such as royalties raises the 
``cutoff point'' between recoverable ore and waste, shortening the life 
of a mine by causing what otherwise would be valuable minerals below 
the cutoff point to be lost. These lost reserves generally can never be 
recovered, because once the mine is reclaimed, it is uneconomic to 
recover them.
    If mining costs can't be deducted, a mining company would have to 
pay the royalty regardless of how high those costs may be for difficult 
mining situations or for low grade ores. This would require a mining 
company to continue paying a royalty even when it is operating at a 
loss, and that royalty could even cause the loss. No mine can be 
operated long at a loss. The result would be that some mines would shut 
down prematurely, creating loss of jobs, federal state and local taxes 
not paid, and suppliers of goods and services suffer. The result is 
lost economic vitality affecting both those directly involved in the 
mining activity and the governmental entities, including the United 
States, that are sustained by those activities.
hardrock minerals are different, and should be treated differently than 
                          coal and oil and gas
    Why should hardrock minerals not be subject to the 8 percent or 
greater royalty imposed on oil & gas and coal? The dramatically 
different characteristics of the minerals themselves and the ways in 
which they are explored for and developed justifies different 
treatment.
    Oil and gas are fluid and usually collect in sedimentary basins. 
Exploration for oil and gas usually consists of seismic studies to 
detect the type of structures where oil and gas are found. These 
studies are conducted at relatively low cost and usually without the 
need to acquire more than an easement over the property to be explored. 
When a promising prospect is identified leases are acquired, a well is 
drilled and core samples, drill stem tests and logs are taken to 
determine whether the well is successful. The costs of drilling can 
sometimes be quite high, but a single well can also drain a large area 
because of the fluid characteristics of oil and gas. Development of a 
field is usually accomplished through the initial exploratory well and 
one or more development wells that are drilled in locations reasonably 
expected, as a result of the information gathered from seismic studies 
and the initial wells, to draw from the same reservoir. Once a prospect 
has proved successful, identification of the size and shape of the 
reservoir can be conducted with relatively low risk and expense.
    After extraction, oil must be processed and refined before it is 
ultimately consumed as vehicle fuel or other product. The royalty on 
oil produced under federal leases is not based upon the value of these 
refined products, however; it is measured by the value of the crude oil 
at the lease or wellhead, prior to such processing and refining. Unlike 
many other minerals, there is a market for oil in its crude, unrefined 
state and therefore a ready value for royalty purposes before the value 
added by refining and processing. Most oil is sold at the wellhead into 
this crude oil market and that wellhead sales price establishes the 
value of the oil for federal royalty purposes. Thus, it is somewhat 
misleading to call the federal royalty on oil a ``gross'' royalty. 
Because the royalty is typically based on the value of the crude oil 
prior to processing and refining, the royalty is, in essence, ``net'' 
of those costs.
    Similarly, federal royalty on gas is also based upon the value of 
the gas at the lease. After gas is extracted, often the only thing 
required for consumption by the ultimate end-user is transportation 
(the cost of which, if paid by the producer, is deducted before 
royalties are calculated). Sometimes further processing is required to 
remove sulfur and separate gasoline, butane and other constituents from 
the gas. The royalty, however, remains payable on the value of the gas 
at the lease or wellhead and the processing costs incurred by the 
producer downstream of the lease are deducted under the federal rules 
before calculating royalty, to arrive at essentially a ``net'' value at 
the lease.
    Coal is a solid mineral of generally uniform quality and 
composition. In the West, where most federal deposits exist, coal beds 
often consist of vast deposits of great thickness, in Wyoming averaging 
80 feet and up to 200 feet. Little exploration for coal is required, 
and it is relatively easy to determine the quality of the coal and the 
thickness of a seam prior to mining. The western coal miner thus knows 
much about the characteristics of the mineral he has to sell prior to 
actual mining. At the same time, coal mining is an extremely labor and 
capital-intensive enterprise. Because of the need to construct 
facilities, obtain equipment, employ workers, and comply with 
substantial permitting requirements, it can take years to design, 
permit and construct a mine. For these reasons, coal from federal lands 
in the West has often been sold under fixed, longterm contracts entered 
into prior to construction of a mine. Based on the certainty of a 
market provided by these contracts, the coal miner can lease sufficient 
reserves to mine over the life of these long-term contracts and make 
the considerable capital investments required to construct the mine. 
Additionally, many long term coal contracts and state utility laws 
allow for the pass through of the royalty burden to the consumer, while 
no such pass-through is available for many hardrock minerals, which are 
sold and priced in global markets.
    While the 12.5% royalty imposed on coal in 1976 was a considerable 
increase over the coal royalties typical at the time, the royalty did 
not take effect for many federal coal leases until they were 
readjusted, which occurred over a period of 20 years. In the meantime, 
the demand for low-sulfur western coal boomed due to the increasingly 
stringent requirements of the Clean Air Act, and transportation costs 
out of the Powder River Basin decreased, which permitted the large 
surface coal mines developed in Wyoming during this period to bear the 
increased royalty burden, which in any event was generally passed on to 
utilities (and consumers) under long term coal contracts. The higher-
cost coal production in Colorado and North Dakota did not fare as well 
as Wyoming. Colorado's production initially plummeted, and North 
Dakota's fared little better, and only because North Dakota mines are 
associated with mine mouth power plants and because the state made 
efforts to prop up the industry by lowering taxes and discouraging 
import of coal from Wyoming. The higher BTU or heating value and low 
sulfur content of Colorado coal has allowed the market to rebound since 
that time, and to bear the 8% royalty applicable to Colorado's 
underground coal deposits (although some Colorado mines have operated 
under royalty reductions during economic downturns).
    In addition, the federal coal royalty regulations permit the 
deduction of the most material costs, including coal washing where 
required, and transportation. Thus, the federal coal royalty is not a 
gross royalty in the strictest sense.
    Oil and gas and coal are not the only leasable minerals on federal 
lands. Sodium, potash, and phosphate are also leasable minerals. These 
minerals are commonly occurring, low margin industrial and fertilizer 
minerals the economics of which cannot support a 12.5% or even an 8% 
royalty. The statutorily established base rate for phosphate is 5% and 
for sodium and potassium is 2%. That is because the nature of these 
commodities and the economics around their extracting and marketing 
differ from oil and gas and coal. In practice, these mines have 
operated under government-sanctioned reduced royalties during periods 
when economic conditions and foreign competition threatened to close 
the mines.
    These examples demonstrate clearly why prevailing royalties differ 
from mineral to mineral. Specific analyses can be made for many other 
types of minerals. It is clear, however, that application of a gross 
royalty at a rate of 8% to hardrock minerals simply because that is 
what is done with coal and oil and gas would be dangerously naive.
    Hardrock minerals are, by comparison, scarce and hard to find. 
Unlike oil and gas and coal, the size and geometry of a hard rock ore 
deposit, the quality of the ore, the mineral composition, the value of 
the mineral products, the metallurgical processes required, the mining 
methods, the commodity prices and the capital costs all vary for each 
operation. Commercial ore bodies may be found under as little as a few 
acres of land. Exploration is conducted through exploratory drilling 
which gives initial clues regarding the deposit, followed by many 
expensive development drill holes to define a deposit for development. 
Once a prospect is identified, development commences at considerable 
cost, with the capital and labor intensiveness of large coal mines, but 
without the geologic or metallurgical certainty of coal mines nor the 
economic certainty and incentive of long-term coal sales contracts, 
which are not customary for most hard rock minerals. The prices of hard 
rock minerals have historically been subject to great fluctuation. 
Because hardrock deposits were often concentrated by ancient subsurface 
magma flows which have been altered by subsequent faulting, the 
concentration of metals varies considerably over relatively small 
distances, unlike the relatively constant quality of western coal 
deposits. As a result, portions of a hardrock deposit may be economic 
while other portions may contain near- or sub-economic ore that is 
extremely sensitive to the addition of royalty and other burdens. The 
combination of price volatility and the variations in the concentration 
and the chemical and geological characteristics of the minerals within 
an ore body can turn a profitable mine into valueless rock with a 
sudden downturn in the market.
    Hard rock minerals, therefore, require considerably different 
approaches to exploration and extraction than do oil and gas and coal. 
Oil and gas and coal are relatively plentiful, and occur over 
relatively large areas where found. Hardrock minerals are scarce and 
occur in small concentrations, and must be discovered by expending 
considerable money pursuing elusive prospecting clues. The period 
between exploration and extraction for hard minerals is much more 
lengthy than with oil and gas or coal, and since hard minerals prices 
are not stable, the risk of the project becoming uneconomic before 
production begins is substantial. These factors are some of the reasons 
that hard rock mining transactions and agreements are considerably 
different from each other and from those dealing with oil and gas and 
coal. These factors also weigh in favor of a royalty reduction 
provision in the bill, so that site-specific determinations can be made 
to reduce costs and achieve the maximum economic recovery from federal 
mineral deposits.
    While individual royalties for specific commodities would 
theoretically be the best approach, such a system might be too 
difficult to administer. The most reasonable approach given the large 
number of commodities to be covered would be a uniform net royalty that 
permits deduction of mining and processing costs. The Nevada net 
proceeds tax provides a model that has been tested in practice, and you 
should consider a similar approach for federal lands.
 if mining companies use net smelter returns in private negotiations, 
   why shouldn't the government follow that approach if it imposes a 
                                royalty?
    A negotiated royalty between private parties is not analogous to 
the federal government's imposition of a royalty on millions of acres 
of unexplored federal lands. Private royalties are negotiated on a case 
by case basis for each property. Usually, the royalty negotiated 
depends on what information is known about the property at the time of 
the negotiation. The less that is known, the lower the royalty.
    An 8% gross royalty for lands not proven to contain a mineral 
deposit is virtually unheard of. I am aware of only one royalty of this 
magnitude in 20 years of practice. In that case, there was a known ore 
body containing millions of ounces of gold on the property when the 
royalty was negotiated and the owner conveyed the mineral rights to the 
surrounding area (measuring roughly 25 miles by 15 miles), free from 
any royalty. Clearly, this is not the typical case on unexplored 
federal land.
    Any particular private royalty is not the proper benchmark for 
setting the federal royalty for tens of millions of acres of federal 
lands. The purpose of the federal royalty is to encourage exploration 
and discovery on lands which are not yet proven to contain mineral 
deposits.
    In privately-negotiated royalties, there are almost as many royalty 
rates and calculations as there are minerals. Each is dependent upon 
the nature of the product that is produced and sold, customs and 
practices in the industry, the strength of the market for the 
particular mineral, the mining cost/processing cost ratio, and many 
other factors. Use of a net royalty for the federal royalty avoids the 
need for extensive, mineral-specific legislation. All mines measure net 
revenues, or profits, and bear determinable operating costs. Therefore, 
a reasonable percentage net proceeds royalty can be applied and achieve 
a reasonable return for the use of federal lands, without 
disproportionate impacts on any particular mineral industry.
    In my experience, other countries are paying considerable attention 
to the appropriate royalty and tax burden to encourage mineral 
exploration and development. The United States has relatively low grade 
deposits of many hardrock minerals, relatively high labor costs, and 
stringent environmental and operating requirements. These must also be 
balanced in determining whether a royalty is necessary on federal 
lands. The United States should not impose a royalty without careful 
consideration of the economic and competitive impacts.
  british columbia's failed experiment with a ``net smelter returns'' 
                                royalty 
                             is instructive
    In 1974, British Columbia enacted the Mineral Royalties Act, which 
imposed royalties on mines located on Crown Lands and the Mineral Land 
Tax Act and subjected owners of private mineral rights to royalties 
equivalent to those applied to Crown Lands. The government imposed a 
net smelter royalty of at 2.5% in 1974, and 5% thereafter.
    The results were devastating for British Columbia mineral 
development. During the period the royalty was in effect, no new mines 
were developed, several marginal mines ceased operations, and non-fuel 
mineral output fell, despite increased prices. As a result, revenue 
collected from royalties on metal mines declined from $28.4 million in 
1974 to $15 million in 1975. During the two year period the royalties 
were in effect, nearly 6,000 mining-related jobs were lost. In 1972, 
$38 million Canadian was spent on exploration expenditures. In 1975, 
exploration expenditures fell to $15.3 million Canadian (a 60% decline) 
while exploration expenditures in the Pacific Northwest--outside 
British Columbia --increased. New mine exploration and development 
spending (excluding coal) decreased from an annual average of $131 
million in the years 1970-1973 to an estimated $20 million in 1975 (an 
85% decline). In 1972, 78,901 new claims were staked. In 1975 the 
number of new claims staked fell to 11,791 (an 85% decline).
    The royalty was repealed in 1976. After the royalty was repealed, 
BC Mine Minister Tom Waterland said that ``[t]he Government's decision 
to introduce royalties in 1974 was the result of inadequate 
understanding of the realities of mineral resource development and the 
economic characteristic of that development..''
    I thank the Subcommittee for the opportunity to address this 
important public lands issue, and I am happy to answer any questions 
you may have.
                                 ______
                                 
 Statement of Nancy Freeman, Executive Director, Groundwater Awareness 
                     League, Inc., Green Valley, AZ
                      Urgency of mining law reform
 legacy of uranium mining impacts on native american lands compels the 
                       immediate need for reform
                              introduction
    One of the most compelling reasons to enact significant mining law 
reform NOW is the rush to mine uranium on public land, including Native 
American land and their historical sacred sites. Nuclear power is now 
being touted as a relatively cheap, reliable and emissions-free 
solution to the world's insatiable demand for energy. Even some leading 
environmentalists have endorsed nuclear power as an antidote to global 
warming. More than 50 nuclear plants are planned or under construction 
in a dozen countries, according to the experts. The truth is nuclear 
power uses fossil fuel energy at every step: mining, milling, 
enriching, and conversion to solid--then carting the waste to a 
disposal facility. Further the problems with the radioactive waste 
still have not been solved.
    The price of uranium is going up so the speculators who hope to 
make a quick fortune on its rise are coming out of the millworks-
especially those from across our northern border. Our Canadian 
neighbors are in a frenzy to stake claims on free public land, 
accompanied by its free water, offered by their unsuspecting and 
uninformed taxpayers south of their border. The situation is so blatant 
on Native American lands in U. S. that on April 10, 2007, the United 
Nations Committee on the Elimination of Racial Discrimination (CERD) 
told Canada that it must rein in Canadian corporations operating on 
Native American land in the United States. [See Attachment One: UN Body 
Holds Canada Responsible for Corporations' Actions Abroad]
    According to the meticulous records of the Environmental Working 
Group, Our research shows that in 12 Western states, the total number 
of active mining claims has increased from 207,540 in January 2003 to 
376,493 in July 2007, a rise of more than 80 percent. Over an eight-
month period, from last September to this May, the BLM recorded more 
than 50,000 new mining claims. Current claims cover an estimated 9.3 
million acres. Many of the new claims are for uranium. The BLM reports 
that the estimated number of uranium claims staked in Colorado, New 
Mexico, Utah and Wyoming combined increased from less than 4,300 in 
fiscal year 2004 to more than 32,000 in fiscal year 2006.
                       i. what are the problems?
    I-1. Unreclaimed mine sites.--Currently, there are uranium mining 
sites on Native American lands that have not been properly cleaned up 
and reclaimed from the uranium boom of the 1950's to 1985.
    I-2. Health concerns.--Environmental Protection Agency has released 
extensive testing on the carcinogenic nature of radioactive materials.
    I-3. Technologically enhanced radioactive material.--The pervasive 
nature of uranium mining entering the air, water and soil of the 
environment as ``technologically enhanced'' radioactive material must 
be taken into consideration, particularly for health concerns.
    I-4. Disposal of Toxic Waste.--Disposal regulations did not prevent 
the radioactive contamination of water and soil in Concord, MA or in 
Paducah, KY. Can we expect the people of Nevada and Utah to continue to 
storing the chemical and radioactive waste of the rest of the states?
    I-5. Cultural impacts.--There are irreversible cultural impacts 
from living in a toxic zone. First, the relationship to the land and 
the wild food source are destroyed. Further, the reservation lands are 
flooded with hundreds of people with no knowledge of or respect for 
Native American culture.
    I-6. Taxpayer burden.--The Environmental Protection Agency 
estimates that billions of dollars are needed to protect Western 
drinking water supplies from mine waste. They estimate that cleaning up 
the half a million abandoned mines across the country may cost $35 
billion or more (EPA 2000) Under the Superfund Amendments and 
Reauthorization Act of 1986 (SARA), USEPA is required to select 
remedial actions involving treatment that ``permanently and 
significantly reduces the volume, toxicity, or mobility of the 
hazardous substances, pollutants, and contaminants'' [Comprehensive 
Environmental Response, Compensation, and Liability Act (CERCLA), 
Section 121(b)].
                      ii. what are some solutions?
    II-1. Permitting limitations.--Corporations and their subsidiaries 
that have not completed clean-up and reclamation mandated by 
Environmental Protection Agency (EPA) or Department of Environmental 
Quality (DEQ) of any State should not be allowed to file for mining 
claims and/or mining permits or permitted for new operations. A 
thorough list should be compiled by EPA and State DEQ's.
    II-2. Health assessments.--Priority should be given to health 
concerns of communities who live in areas with uranium.
    II-3. Waste disposal assessments.--Overall consideration of the 
ramifications of radioactive waste disposal on human and animal 
survival, including the necessities of clean water to drink, pure air 
to breath and uncontaminated soil to grow food crops, should be given 
priority consideration.
    II-4. Sovereign Authority.--Native Americans should be given total 
rights and authority over minerals in their lands.
    II-5. Create funds and bonds.--To insure proper reclamation of all 
mining sites.
                            iii. conclusions
    Uranium is extremely toxic. The fact is that land, water and people 
are still suffering the effects of mining of uranium from the boom of 
the 1950's through the 1980's. When it comes to uranium mining, public 
land has a unique connotation: Most of the uranium is on wasteland, and 
those wastelands were the land forced on Native Americans, which are 
managed by the Department of Interior. This unique situation must be 
given special consideration in mining law reform to guard against a 
repeat of the past devastation on Native American lands.
    Further, companies who have not complied with reclamation mandates 
on public and Native American lands should not be allowed to file 
permits for new operations on public or Native American lands.
    A common misconception is the view that electricity generation is 
the whole energy supply. Electricity comprised about 16% of the total 
world energy consumption in 2005. Less than 16% of the world 
electricity is generated by nuclear power stations, so the total share 
of nuclear power is about 2.5% of the world energy generation, slightly 
less than that of hydropower. Even if the world electricity generation 
would be all nuclear, it would provide only 16% of the world energy 
demand. Report on the misconceptions of nuclear power. Nuclear 
Information and Resource Service: ``Confronting a False Myth of Nuclear 
Power: Nuclear Power Expansion is Not a Remedy for Climate Change.''
    ten reasons why we don't need to build more nuclear power plants
    1. Nuclear reactors are pre-deployed weapons of mass destruction 
and pose an unacceptable risk. We need to eliminate, not proliferate 
them. An attack could render a city like Manhattan a sacrifice zone and 
kill hundreds of thousands within weeks.
    2. There is a misconception that nuclear power produces no carbon 
dioxide (CO2), when in reality the twenty steps of the fuel 
and plant cycle require immense amounts of fossil fuel support. 
However, the misconception is that we would need 300 in the U.S. and 
1,500 worldwide just to make a dent in greenhouse gas (ghg) emissions. 
One reactor takes about ten years to build. So, even if nukes were a 
good global warming solution, the time to construct a significant 
number of reactors would put off the solution for many years.
    3. Devoting scarce resources to shore up nuclear takes away from 
the real climate change solutions-conservation, energy efficiency and 
renewables like wind and solar.
    4. Building enough reactors to offset climate change is cost 
prohibitive. Reactors cost $4 billion or more each a decade ago and the 
price hasn't gone down.
    5. Nuclear reactor proliferation means more waste with no place to 
put it. A new Yucca Mountain-style dump every four years would be 
needed if 1,500 new reactors were built.
    6. Nuclear power is not emissions-free. From uranium mining, 
milling and enrichment to construction and waste storage, nuclear uses 
fossil fuels. Studies show that there will be a net energy loss-that is 
more fossil fuel support than electrical output, once our limited 
amount of high grade ore is depleted. Just like oil, uranium supplies 
are dwindling.
    7. Even nuclear industry executives aren't convinced. One described 
nuclear expansion as ``comatose'' and an option that would give his 
chief financial officer and Standard and Poors ``a heart attack.''
    8. More reactors send the wrong message abroad. The peaceful atom 
is a myth already exposed by the weapons programs of Indian, Pakistan, 
Israel, North Korea and Iran.
    9. Reactors at the beginning and the end of their lifespan are at 
their most dangerous, prone to breakdown and accident. Most of the 103 
operating now are nearing the end of their cycles. Adding new ones 
doubles the risk of accident.
    10. Electricity is not the biggest problem. It's fossil fuel-
powered vehicles. Adding nuclear won't address this or reduce these 
major ghg emitters. Electricity consists of only 1/6 of our total 
energy consumption. 83% of our energy consumption is in other areas 
like auto use, industrial manufacturing, mining, etc.
    Information Source: Arizona Nuclear Energy Watch (ANEW), Steve 
Brittle, 6205 South 12th Street, Phoenix, AZ 85042, 602-268-6110.
    The Nuclear Information and Resource Service has created a report: 
``Confronting a False Myth of Nuclear Power: Nuclear Power Expansion is 
Not a Remedy for Climate Change.'' [See Attachment Two: Confronting a 
false myth of nuclear power]
                       i. what are the problems?
    On September 9-11, 2003 Environmental Protection Agency sponsored a 
two-day workshop on Mining Impacted Native American Lands in Reno, 
Nevada. The workshop goals were to educate individuals involved with 
mining issues affecting reservation and other Native American lands in 
the U.S., to identify current approaches to these issues, and to 
provide a comprehensive annotation of those issues, which include 
mining and mine waste impacts, support mechanisms, cleanup processes, 
and other key areas of mining and reclamation.
    The Workshop Committee members were U.S. Environmental Protection 
Agency; Office of Research and Development, National Risk Management 
Research Laboratory, Office of Solid Waste and Emergency Response and 
Regional Offices; Montana Tech & MSE-Technology Applications, Inc.; 
University of Nevada, Reno; Great Basin Mine Watch; Laguna Acoma 
Coalition for a Safe Environment (LACSE); Pyramid Lake Paiute Tribe; 
Gros Ventre and Assiniboine Tribes, Fort Belknap Indian Community; 
Cheyenne River Sioux Tribe; National Tribal Environmental Council; 
Mineral Policy Center; Natives Impacted by Mining (NIBM).

http://www.epa.gov/ttbnrmrl/miningimpact.htm. Information source and 
contact: Norma Lewis, U.S. EPA, NRMRL, 26 West Martin L. King Dr., 
Cincinnati, OH 45268, (513) 569-7665, [email protected]

    Following is an except from the presentation of Manuel Pino, 
Chairman for The Laguna Acoma Coalition for a Safe Environment at The 
Sixth Session Of The United Nations Permanent Forum on Indigenous 
Issues, May 2007 under Agenda Item 3, Under the Special Theme: Lands, 
Resources and Territories, under the mandated issue of Environment, 
with the following signatories: The Seventh Generation Fund for Indian 
Development, Eastern Navajo Dine Against Uranium Mining (ENDAUM) Dineh 
Bidziil Coalition, Haaku Water Office of Acoma Pueblo, Black Mesa Water 
Coalition, Indigenous Environmental Network (IEN), International Indian 
Treaty Council (IITC), Western Shoshone Defense Project, Nuclear Free 
Future Award, Sierra Club's Environmental Justice Office in Flagstaff, 
and Southwest Research and Information Center.
      declaration of the indigenous world uranium summit (excerpt)
          We, the Peoples gathered at the Indigenous World Uranium 
        Summit, at this critical time of intensifying nuclear threats 
        to Mother Earth and all life, demand a worldwide ban on uranium 
        mining, processing, enrichment, fuel use and weapons testing 
        and deployment, and nuclear waste dumping on Indigenous lands. 
        Past, present and future generations of Indigenous Peoples have 
        been disproportionately affected by the international nuclear 
        weapons and power industry. The nuclear fuel chain poisons our 
        people, land, air, and waters and threatens our very existence 
        and our future generations. Nuclear power is not a solution to 
        global warming. Uranium mining, nuclear energy development and 
        international agreements (e.g., the recent U.S.-India nuclear 
        cooperation treaty) that foster the nuclear fuel chain violate 
        our basic human rights and fundamental natural laws of Mother 
        Earth, endangering our traditional cultures and spiritual well 
        being. We reaffirm the Declaration of the World Uranium Hearing 
        in Salzburg, Austria in 1992, that ``uranium and other 
        radioactive materials must remain in their natural location.'' 
        Further, we stand in solidarity with the Navajo Nation for 
        enacting the Dine Resources Protection Act of 2005, which bans 
        uranium mining and processing and is based on the fundamental 
        laws of the Dine [Navajo]. And we dedicate ourselves to a 
        nuclear free future. Indigenous Peoples are connected 
        spiritually and culturally to our Mother the Earth  . . . 

For entire presentation, see http://docip.org/Permanent%20Forum/pf07/
PF07manuel080.pdf. Information source and contact: Manuel Pino, 9000 E. 
Chaparral Rd., Scottsdale, Arizona 85256-2626, United States, Phone: 
480-423-6221.
 i-1. lack of clean-up and reclamation of uranium sites from the 1950s 
                       through 1980s uranium boom
I.1.1) Navajo Nation Lands
    The largest single source of uranium ore in the United States was/
is the Colorado Plateau located in the ``Four Corners'' area: Colorado, 
Utah, New Mexico and Arizona. The U.S. Federal Government, the sole 
legal purchaser of uranium ore, paid discovery bonuses and guaranteed 
purchase prices to anyone who found and delivered uranium ore. The Feds 
twisted the arms of the tribes, principally Dino, with the promise of 
good jobs and even royalties (the Dino are still waiting for those 
checks) and by assuring them that it was the ``patriotic'' thing to do. 
The economic incentives resulted in a frenzy of exploration and mining 
activity throughout the Colorado Plateau from 1947 through 1959.
    More than 1,000 old uranium mines and four abandoned processing 
mills are scattered across the Navajo Nation, which spans parts of 
Arizona, New Mexico and Utah. From 1944 to 1986, 3.9 million tons of 
uranium ore were extracted by private companies from the region. The 
tribe retained a former federal prosecutor Thursday to coordinate an 
effort to finish the cleanup and eventually to help Navajos made ill by 
exposure.
    The biggest expulsion of radioactive material in the United States 
occurred July 16, 1979, at 5 a.m. on the Navajo lands. Moore than 1,100 
tons of uranium mining tailings gushed through a packed-mud dam near 
Church Rock, N.M. With the tailings, 100 million gallons of radioactive 
water gushed through the dam before the crack was repaired. By 8 a.m., 
radioactivity was monitored in Gallup, N.M., nearly 50 miles away. The 
contaminated river, the Rio Puerco, showed 7,000 times the allowable 
standard of radioactivity for drinking water below the broken dam 
shortly after the breach was repaired, according to the Nuclear 
Regulatory Commission.
    In April, 2005, Navajo Nation President Joe Shirley, Jr. signed a 
tribal law banning uranium mining and milling while dozens of community 
members and dignitaries looked on. The act finds that based on those 
fundamental laws, ``certain substances in the Earth that are harmful to 
the people should not be disturbed, and that the people now know that 
uranium is one such substance, and therefore, that its extraction 
should be avoided as traditional practice and prohibited by Navajo 
law.''
    President Shirley commented, ``As long as there are no answers to 
cancer, we shouldn't have uranium mining on the Navajo Nation. I 
believe the-powers-that-be committed genocide on Navajo land by 
allowing uranium mining. I don't want to subject any more of my people 
to exposure to uranium and the cancers that it causes. I believe we 
reinforced our sovereignty today.''

See extensive EPA files and photos regarding sites: http://
yosemite.epa.gov/r9/sfund/r9sfdocw.nsf/
22cc9f7bbf238b0a88257329007884d4/26fbc51aac6a659888257007005e9416!OpenDo
cument.

Abandoned Uranium Mines On The Navajo Nation: http://yosemite.epa.gov/
r9/sfund/r9sfdocw.nsf/c3b003b7d86365a4882573290078b569/
4114c8585baae97c8825728b007ae50d!OpenDocument.

Information source and contact: EPA Site Manager, Andrew Bain, 75 
Hawthorne, San Francisco, CA 94105, 415-972-3167, [email protected]
I.1.2) Laguna Pueblo
    The Jackpile is now undergoing a $48 million reclamation program-
paid for by ARCO and conducted by the Laguna tribe-aimed at restoring 
the landscape to resemble the way it appeared before the exploitation 
began. The reclamation estimate for complete restoration back to its 
original landscape, including filling all the pits and leveling all the 
piles was $400 million--but no one was willing to foot that bill.
    Many at an environmental conference held in Laguna, New Mexico said 
the current reclamation effort was only partially completed and a lot 
of the uranium from the mine waste already had leached into the soil 
and water.
    ``Two tributaries near the mine and the Rio San Jose have already 
tested positive for radiation contamination,'' according to Manual Pino 
with the Laguna-Acoma Coalition for a Safe Environment. ``It's one of 
the best kept secrets of the United States.''
    Purley, who lived less than 1,000 meters from Jackpile said she was 
not happy with progress of the reclamation project. ``Every time the 
rain falls there is still this strange smell by the mine.''

See Department of Energy, Energy Citations Database: Environmental-
Social Aspects of Energy Technologieshttp://www.osti.gov/
energycitations/product.biblio.jsp?osti--id=5882296.

Information source and contact: U.S. Department of Energy, Office of 
Scientific and Technical Information, P.O. Box 62, Oak Ridge,TN 37831, 
865-576-1188, [email protected]
I.1.3) Lakota-Sioux lands in the Black Hills of South DakotaRiley Pass 
        Abandoned Uranium Mines
    This mining area has the highest grade uranium ore in this country 
and even becomes more concentrated once burned on site using diesel 
fuel, then it was converted to 80% to 90% uranium oxide per pound. In 
its natural state, content is on the order of 3% to 10% per pound. 
Although these mines are highly toxic, the U.S. Forest Service has been 
deferring to the 1872 mining law and concedes that the mining companies 
are not obligated to remediate their strip mine. Therefore, the U.S. 
Forest Service requested the U.S. EPA to place the Riley Pass Abandoned 
Uranium Mine under Superfund for remediation. The Custer National 
Forest, Sioux Ranger District with the assistance of EPA and the State 
of South Dakota, has developed a final cleanup plan for the Riley Pass 
Abandoned Uranium Mine in the North Cave Hills.
    The U.S. EPA gave $22 million to the U.S. Forest Service to 
remediate the abandoned uranium mine nearly two years ago. At this 
time, after some thirty years the work is scheduled to begin summer of 
2007.

See Final Engineering Evaluation and Cost Analysis (EE/CA), Riley Pass 
Abandoned Uranium Mine Availablehttp://www.fs.fed.us/r1/custer/
projects/Planning/nepa/Riley--Pass/index.shtml.

Information source and contact: Custer National Forest, Nancy Curriden, 
Forest Supervisor, 1310 Main Street, Billings, MT 59105, (406)657-6200, 
email: [email protected]
            Standing Rock Site
    Current water samples by the Standing Rock Sioux Tribe (SRST) 
indicate that during this drought period that radionuclide levels in 
the Grand River have averaged 5 picocuries/liter to 7 picocuries/liter. 
We assume that the radionuclides precipitate in water and become mobile 
during rainstorms and snowmelt, we feel that the SRST water samples are 
insufficient to conclude that the Grand River is ``safe.'' We also 
assume that during extreme rainfalls and snowfalls that the levels 
increase exponentially. The SRST water samples also are nearly 
identical to the water samples taken by the State of South Dakota last 
year and, like the SRST, the State has not considered high 
precipitation events as a factor in their reasoning that the Grand 
River is ``safe.''
    Information source and contact: Charmaine White Face, Defenders of 
the Black Hills, PO Box 2003, Rapid City, SD 57709, 605-399-1868.
    Attachment Three: Uranium Mining and Nuclear Pollution in the Upper 
Midwesthttp://www.defendblackhills.org/joomla/index.php?option=com--
content&task=view&id=98&Itemid=27
I.1.4) Washington State Spokane Reservation
    The only uranium mining in Washington State was on the Spokane 
Indian Reservation: the Sherwood Uranium Mine and the Midnite Uranium 
Mine, owned by a subsidiary of Newmont Mining Company, Dawn Mining 
Company, which until 1981 operated the Midnite Mine on the Spokane 
Indian Reservation. The open-pit uranium mine, now a Superfund site, is 
the source of radiation and heavy metal contamination of Blue Creek, 
which flows into the Spokane River arm of Lake Roosevelt. For 
information on current situation.
    Midnite Mine, located on the Spokane Indian Reservation eight miles 
from the Tribal complex in Wellpinit, is an inactive open-pit uranium 
mine closed in 1981, leaving behind 2.4 million tons of stockpiled ore 
(containing 2 million pounds of uranium oxide) and 33 million tons of 
waste rock. Two of the six excavated pits are open and partially filled 
with water. Exposed rock from the ore piles generate acid rock 
drainage. Radionuclides and heavy metals have contaminated groundwater, 
seeps and surface water, including Blue Creek.
    Radionuclides of concern at the Midnite mine and in downstream 
watersheds include Uranium-238 decay series isotopes such as Uranium-
238, Radium-226, Thorium-230 and Radon-222. Heavy metal contaminants of 
concern include: Aluminum, Arsenic, Barium, Beryllium, Cadmium, 
Chromium, Cobalt, Copper, Lead, Manganese, Molybdenum, Nickel, 
Selenium, Silver, Thallium, Uranium, Vanadium, and Zinc. The waste rock 
piles and the ore remaining in the open pits at the Midnite mine have 
significant sulfide content leading to acid generating conditions that 
release heavy metals and other pollutants into surface and ground 
water.
    The Midnite Mine operated from 1955-1981 under the ownership of a 
subsidiary of Newmont Mining Corporation: Dawn Mining Company. Today 
the mine looks like an open wound in the heart of the Spokane Indian 
Reservation. Dawn abandoned the pits and 33 million tons of waste rock 
they created without conducting reclamation work to either rehabilitate 
the site or prevent release of pollutants. As a result, radionuclides, 
heavy metals and other pollutants have spread several miles beyond the 
mine site, leaving a toxic trail in downstream creeks and valleys and 
in downwind plants and hillsides in the central part of the Spokane 
Indian Reservation. It is now designated as a federal Superfund site 
requiring a $280 million cleanup. The design phase of the clean-up has 
been completed; however, the work has not started because EPA has not 
been able to get Newmont Corporation to fund the work. This means that 
the clean-up costs would fall to the taxpayers to do so.
    Recently, the site made news when a helicopter, fighting a forest 
fire, took two bucket loads from the unfenced pond about 40 miles 
northwest of Spokane on the Reservation. The tailings pond, about a 
half-mile from the fire, holds waste from uranium ore processing by a 
former Dawn Mining mill at the site. The manager of the mining company 
asserted, ``You wouldn't anticipate an aerial breach of security,'' he 
said. He didn't bother to mention that you wouldn't expect a toxic lake 
of radioactive material to sit out in the open for 30 years either. How 
many birds and creatures have made the same mistake the fireman did.
    This site is a perfect example of a mining company-Newmont Mining 
Corporation--that should not be allowed another mining permit until 
this site has been cleaned and reclaimed.

See EPA Files regarding site:

http://yosemite.epa.gov/r10/CLEANUP.NSF/
738cdf3a6d72acce88256feb0074f9f4/25f296f579940d8b88256744000327a5/
$FILE/ROD-Midnite06.pdf
    2) www.epa.gov/EPA-IMPACT/2006/September/Day-06/i14686.htm

Information source and contact: United States Environmental Protection 
Agency, Ariel Rios Building, 1200 Pennsylvania Avenue, N.W., MC 2843, 
Washington, DC 20460, (202) 564-2592.
I.1.5) Tohono O'dham Nation, Arizona
    The Cyprus Tohono Mine, on Tohono O'dham land, is operated by 
Phelps Dodge/Freeport-McMoran. In 2005, EPA issued an administrative 
order requiring the company to clean up tailings containing toxic salt 
and uranium on a 450-acre area of its 10,505-acre mine site. This site 
leached uranium into the groundwater and fouled a tribal community's 
drinking water well. The public water well was relocated to an area 
untouched by the contamination. Two of the evaporation ponds and the 
mill tailings impoundment are considered to have contributed to 
groundwater contamination of an aquifer that was previously the sole 
source of drinking water for the North Komelik community.Removal of the 
salts and tailings is now underway. These wastes are being piled on a 
plastic pad, which will then be capped so that no water can get in to 
move the toxic radioactive materials.
    Area residents have also reported that in certain wind conditions 
dust from the mine blows up into North Komelik, creating potential 
inhalation of particulate contamination. Contaminated soil will be 
excavated, placed on a liner, and covered with a soil cap. The work 
will cost an estimated $18 million will be completed by the mining 
company.

EPA Files regarding site: http://yosemite.epa.gov/opa/admpress.nsf/
c0a363bb3b2bde7e852572a000652ed4/
d6d8874eece84349852572090072536c!OpenDocument

Information source and contact: U.S. EPA Region 9, John Hillenbrand, 75 
Hawthorne Street, San Francisco, CA, 94105, [email protected], 
415/972-3494.
I.1.6) Hopi Land, Yuba City, AZ
    Based upon information provided by life-long residents, the Hopi 
Water Resources Program, Environmental Protection Office (Hopi EPO), 
and Navajo Nation Environmental Protection Agency (NN EPA) are 
investigating whether the Tuba City Open Dump site may contain 
radioactive and hazardous waste. This mixed waste (radioactive and 
hazardous waste) was allegedly dumped during the operation of the 
former Rare Metals Corporation of America, a uranium mill tailings 
facility located approximately six miles northeast of Tuba City. The 
Rare Metals facility processed uranium ore into high-grade uranium from 
as early as 1962 to 1968 to support U.S. military efforts.

For entire report, see: http://www.epa.gov/region09/waste/solid/
tubacity.html.

Information source and contact: Pui Man Wong, U.S. EPA Community 
Involvement Coordinator, 75 Hawthorne St. (SFD-3), San Francisco, CA 
94105, (415) 972-3242 or Toll Free (800) 231-3075, [email protected] 
and Gayl Shingoitewa-Honanie, Hopi EPO (Primary Hopi Contact), P.O. Box 
123, Kykotsmovi, AZ 86039, (928) 734-3631, [email protected]
                          i-2. health concerns
I.2.1) EPA Regulations
    The physical problems, such as lung cancer and various respiratory 
problems were caused by working in the mines. However, the general 
populace in the vicinity of the mines also were affected by dust blown 
from the mines and tailings. Some of the symptoms took years to 
appear--and the chromosomal damage done was even slower to show up. 
There's no doubt that the U.S. Government and its agencies have done a 
poor job in helping the affected communities recover from economic, 
health and environmental contamination. The financial compensation from 
the Department of Energy that has been doled out after long 
investigations and copious paperwork manifested long after most of the 
miners were dead.

Information of health effects from radionuclides from EPASource: 
Environmental Protection Agency, Stephen Johnson, Administrator, Office 
of the Administrator, Ariel Rios Building, Room 3000, 1200 Pennsylvania 
Ave NW, Washington, DC 20468, 202-564-4700.
          Radionuclides (including Radon, Radium and Uranium)
     hazard summary-created in april 1992; revised in january 2000
    Uranium, radium, and radon are naturally occurring radionuclides 
found in the environment. No information is available on the acute 
(short-term) non-cancer effects of the radionuclides in humans. Animal 
studies have reported inflammatory reactions in the nasal passages and 
kidney damage from acute inhalation exposure to uranium. Chronic (long-
term) inhalation exposure to uranium and radon in humans has been 
linked to respiratory effects, such as chronic lung disease, while 
radium exposure has resulted in acute leucopenia, anemia, necrosis of 
the jaw, and other effects. Cancer is the major effect of concern from 
the radionuclides. Radium, via oral exposure, is known to cause bone, 
head, and nasal passage tumors in humans, and radon, via inhalation 
exposure, causes lung cancer in humans. Uranium may cause lung cancer 
and tumors of the lymphatic and hematopoietic tissues. EPA has not 
classified uranium, radon or radium for carcinogenicity.
    Please Note: The main sources of information for this fact sheet 
are EPA's--

          1) Integrated Risk Information System (IRIS)www.epa.gov/iris/
        subst/0259.htm, which contains information on oral chronic 
        toxicity;
          2) the RfD (inhalation reference concentration): www.epa.gov/
        ttn/uatw/hlthef/hapglossaryrev.html#rfdfor uranium; and
          3) Agency for Toxic Substances and Disease Registry's 
        (ATSDR's) Public Health Service, US. Toxicological Profiles for 
        Uranium, Radium, and Radonwww.atsdr.cdc.gov/toxprofiles/
        tp150.htmlwww.atsdr.cdc.gov/toxprofiles/tp144.html
                       Health Hazard Information
   Acute Effects
    --No information is available on the acute effects of uranium, 
            radium, or radon in humans. (2-4)
    --Animal studies have reported inflammatory reactions in the nasal 
            passages and kidney damage from acute inhalation exposure 
            to uranium. (2)
    --Acute animal tests in rats, mice, and guinea pigs, have shown 
            uranium to have low to moderate toxicity from inhalation 
            exposure and high toxicity from oral exposure. (2)
   Chronic Effects (Non-cancer)
    --Several studies have found no increased deaths in uranium workers 
            due to kidney disease, however, one study of uranium mill 
            workers chronically exposed to uranium showed kidney 
            dysfunction. (2)
    --Animal studies have reported effects on the kidney from chronic 
            inhalation and oral exposure to uranium. (2)
    --EPA has not established a Reference Concentration (RfC) for 
            uranium (soluble salts or natural). (5,6)
    --ATSDR has established a chronic inhalation minimal risk level 
            (MRL) of 0.0003 milligrams per cubic meter (mg/
            m3) for uranium (soluble salts) based on renal 
            tubule lesions in dogs. The MRL is an estimate of the daily 
            human exposure to a hazardous substance that is likely to 
            be without appreciable risk of adverse non-cancer health 
            effects over a specified duration of exposure. Exposure to 
            a level above the MRL does not mean that adverse health 
            effects will occur. The MRL is intended to serve as a 
            screening tool. (2)
    --The Reference Dose (RfD) for uranium (soluble salts) is 0.003 
            milligrams per kilogram body weight per day (mg/kg/d) based 
            on body weight loss and moderate nephrotoxicity in rabbits. 
            The RfD is an estimate (with uncertainty spanning perhaps 
            an order of magnitude) of a daily oral exposure to the 
            human population (including sensitive subgroups) that is 
            likely to be without appreciable risk of deleterious non-
            cancer effects during a lifetime. It is not a direct 
            estimator of risk but rather a reference point to gauge the 
            potential effects. At exposures increasingly greater than 
            the RfD, the potential for adverse health effects 
            increases. Lifetime exposure above the RfD does not imply 
            that an adverse health effect would necessarily occur. (6)
    --EPA has medium confidence in the study on which the RfD was based 
            since it was well designed, but used a small number of 
            experimental animals; medium confidence in the database 
            because there are adequate studies on the effects of 
            uranium in various species; and, consequently, medium 
            confidence in the RfD. (6)
    --Chronic exposure to radium in humans, by inhalation, has resulted 
            in acute leucopenia, while oral exposure has resulted in 
            anemia, necrosis of the jaw, abscess of the brain, and 
            terminal bronchopneumonia. (3)
    --Chronic exposure to radon in humans and animals via inhalation 
            has resulted in respiratory effects (chronic lung disease, 
            pneumonia, fibrosis of the lung, decreased lung function), 
            while animal studies have also reported effects on the 
            blood and a decrease in body weights. (4)
    --EPA has not established an RfC or an RfD for radium or radon. 
            (7,8)
   Reproductive/Developmental Effects
    --Limited evidence from epidemiological studies suggests that 
            uranium or radon exposure may result in a decreased ratio 
            of live male to female births in humans.  However, it is 
            not certain if the effect is from uranium or radon exposure 
            because the workers were also exposed to other compounds 
            (2,4)
    --Animal studies have reported reduced number of offspring, reduced 
            fetal body weight and length, and an increase in skeletal 
            malformations from oral exposure to uranium in animals. (2)
    --No information is available on the developmental or reproductive 
            effects of radium in humans or animals. (3)
   Cancer Risk
    --Radium and radon are potent human carcinogens.  Radium, via oral 
            exposure, is known to cause lung, bone, head (mastoid air 
            cells), and nasal passage tumors. Radon, via inhalation 
            exposure, causes lung cancer. (3,4)
    --Smokers exposed to radon are at greater risk for lung cancer 
            (approximately 10 to 20 times) than are nonsmokers 
            similarly exposed. (1)
    --Studies in uranium miners have shown an increase in lung cancer 
            and tumors of the lymphatic and hematopoietic tissues from 
            inhalation exposure. However, it is not known whether the 
            cancer risk is from uranium itself, or from radon or other 
            confounding factors. (2)
    --EPA has not classified radium, radon or uranium for 
            carcinogenicity. (2-4)

    For full report: See www.epa.gov/ttn/uatw/hlthef/radionuc.html
I.2.2) Health Problems in Native American populations exposed to 
        uranium mining and its radioactive contamination
    For more than forty years, the people of South Dakota, Washington, 
Arizona and New Mexico have been subjected to radioactive polluted dust 
and water runoff from hundreds of abandoned open pit uranium mines, 
processing sites and waste dumps. The following is from a General 
Accounting Office report on the amounts paid out to through the 
radiation exposure program. There is a preponderance of Native 
Americans being compensated because less safety precautions were used 
on mines on their lands. There is anecdotal information about this 
reality. It should be studied further.

   GAO GIVES UPDATE ON RADIATION EXPOSURE COMPENSATION  PROGRAM STATUS
        Uranium worker data from April 1992 through June 30, 2007
------------------------------------------------------------------------
                                 Claims    Claims   Claims      Total
           Category             approved   denied   pending    payments
------------------------------------------------------------------------
Uranium Miner                  4,560      2,661    208       $455
                                                              million
------------------------------------------------------------------------
Uranium Miller                 1,000      239      33        $100
                                                              million
------------------------------------------------------------------------
Uranium Ore  Transporter       217        70        7        $22 million

------------------------------------------------------------------------
TOTAL                          5,777      2,970    248       $577
                                                              million
------------------------------------------------------------------------

    Download GAO Report: Radiation Exposure Compensation Act: Program 
Statushttp://www.gao.gov/cgi-bin/getrpt?GAO-07-1037R.
I.2.2.1) Navajo Land, Arizona
    The Indian Health Service data shows that cancer death rate on the 
reservation from the early 1970s to the late 1990s. Researchers admit 
that exposure to mining byproducts in the soil, air and water almost 
certainly contributed to the increase in Navajo cancer mortality.
    However, the government has never conducted a comprehensive study 
of the health effects of uranium mining on the reservation. But 
individual scientists working on their own have documented that cancer 
rates are higher near old mines and mills. Not only uranium, but other 
toxic by-products of mining common in the Southwest, such as arsenic 
and heavy metals, have been found in one out of five drinking-water 
sources sampled.
    See Navajo Uranium Radiation Victims: http://sonic.net/kerry/
uranium.html.
    U.S. Army Corp of Engineers Report: See Two-year uranium mine 
project benefits Navajo Nation.
    www.spl.usace.army.mil/cms/
index.php?option=com_content&task=view&id=317&Itemid=2.
I.2.2.2) Acoma and Laguna Pueblos, New Mexico: Testimony given my 
        Manuel Pino, Acoma Pueblo, New Mexico to the Swedish Parliament 
        in 2006
    Acoma Pueblo's neighbor to the east is Laguna Pueblo, and about 15 
miles from where their borders meet is the Jackpile mine, North 
America's largest open pit uranium mine from 1952 until 1982.
    ``Living in close proximity to that mine, we disproportionately 
suffered from the environmental impacts, such as water contamination, 
air quality impacts, and environmental degradation to the soil and to 
domestic and wild animals,'' Pino said.
    ``The contaminants from the Jackpile mine spread throughout the 
landscape. It came on the wind to our grazing areas, through the jet 
stream and the wind and air patterns, which affected our air quality. 
Then the monsoons would fill the arroyos and carry the contaminants to 
major tributaries that seeped into the underground water table.''
    Documented cancer clusters among the Navajo, Acoma and Laguna 
tribes eventually led to the Uranium Workers Act of 2000, designed to 
compensate miners for exposure to radioactive contaminants. It is 
actually an amendment to 1990's Radiation Exposure Compensation Act, 
which held standards of exposure to such heights that former workers 
and their families were not eligible for compensation. Pino has worked 
for years helping Native miners file claims under the UWA.

For full report, see: www.scottsdalecc.edu/news/manuel--pino--
consults--swedish--parliament07.html.

Information source and contact: Manuel Pino, 9000 E. Chaparral Rd., 
Scottsdale, Arizona 85256-2626, United States, Phone: 480-423-6221.
I.2.2.3) Acoma Pueblo, New Mexico
    In addition to impact of Jackpile mine on the east side of the 
Pueblo, on the west side, there is an impact of ``down-winder'' 
syndrome from the inhalation of radioactive particulate from mining 
waste. High desert winds of up to 70 mph bring dust from the tailings 
ponds of the Home stake mine, which inundate the Pueblo regularly. 
Although there is not an actual mine site on their land, the Acoma 
people have lost a generation of their people to cancer. A new 
diagnosis of cancer or a death by cancer occurs on a weekly basis even 
today. The Homestake and Mt. Taylor mines are upstream from a perennial 
creek that flows through the Pueblo, creating a potential threat to the 
water supply of the Pueblo.

Information source and contact: Laura Watchempino, Water Quality 
Specialist, P.O. Box 309, Acoma, NM 87304, 505-552-6604.
I.2.2.4) Spokane Reservation, Washington
    ``People do not know to stay out of the site because of health 
dangers,'' Deb Abrahamson of SHAWL Society said, telling of a tribal 
hunter who recently shot a llama near the site.
    ``Although uranium mining made the United States what it is today, 
there was no analysis of the impact on our people,'' said Deb, whose 
father, grandparents and uncles worked on the site.
    ``Our people never had a full say in establishing the mine because 
of internal marginalization,'' she explained. ``After the Homestead Act 
opened reservation land to homesteaders, many people were adopted into 
the tribe. That helped disempower and disenfranchise our people.
    ``Few old-timers remain. The median age of the 2,300 people is now 
26,'' she said. In addition, the tribe did not have the money or 
education to battle it. Our grandparents, parents, uncles and aunts 
never knew about the danger.
    ``They worked in the mine and brought back yellow cake. My father, 
who worked double shifts, was not told he was bringing that radioactive 
material home,'' Deb said. ``The tribal health educator and teachers 
either lacked information or were in denial.
    ``We did not link deaths to the mine. Our primary care provider, 
Indian Health Services, was a government arm, so why would it gather 
data for baseline health survey on radiation?''

Information source and contact: Deb Abrahamson, SHAWL Society, P.O. Box 
61, Wellpinit, Washington 99040, United States, Phone: 509-747-3115, 
[email protected]
          i-3: technologically enhanced radioactive materials
    The pervasive nature of uranium mining entering the air, water and 
soil of the environment as ``technologically enhanced'' material must 
be taken into consideration, particularly for health concerns.
EPA Report: Technologically Enhanced Naturally Occurring Radioactive 
        Materials in the Southwestern Copper Belt of Arizona
Information source and contact: U.S. Environmental Protection Agency, 
Office of Radiation and Indoor Air, Radiation Protection Division, 401 
M St., SW Washington, D.C. 20460, October 1999.

                           executive summary
    The U.S. Environmental Protection Agency has been working over the 
past several years to better understand the nature and extent of TENORM 
that may become concentrated at copper mining sites. This document 
presents the information that EPA has compiled on this issue to date. 
The literature on the subject indicates the presence of uranium and 
thorium in minerals associated with porphyry copper deposits in 
Arizona. Copper extraction and beneficiation operations may concentrate 
these radioactive materials. Samples taken by the ADEQ from several 
copper mines indicate that TENORM has been found to occur above 
background levels in surface water and in some mining process and waste 
streams. The data also show evidence of TENORM in surface water, 
groundwater and soils. The data suggest that dump leaching operations 
and solvent extraction-electro-winning procedures, as well as the 
practice of recycling raffinate at copper mines, extract and 
concentrate soluble radioactive materials. The results show increases 
of up to two orders of magnitude over background levels for samples of 
all radio-chemicals tested except Rn-222. Radiological data in this 
report represent a sampling of mine wastes at specific facilities and 
do not necessarily represent other copper operations. Based on the data 
presented herein, there is an increased likelihood that copper leach 
operations and their associated solvent extraction--electrowinning 
circuits in Arizona concentrate TENORM.
                                findings
    In 1992, ADEQ shared with EPA data on TENORM emanating from copper 
mines. EPA has continued to work with ADEQ to assemble the available 
data. As part of its groundwater and surface water protection programs, 
ADEQ requires mining companies to submit APPAs containing facility-
specific radiochemical characterizations. As a result, ADEQ and EPA 
have accumulated in excess of 3200 analyses of radionuclides at 15 
mining sites in the copper industry. This report reviews the current 
information on the occurrence and distribution of TENORM at mines in 
Arizona and contains tables of all the available data as of 1997.
    Tables 1 through 5 summarize the data according to media, 
including: groundwater, surface water, soil-sediment, process 
solutions, and process wastes. Instances when the average levels of 
radioactivity exceed the federal maximum contaminant levels (MCLs) or 
Arizona guidelines are shown in bold. The groundwater media included 
about 2220 analyses from about 176 wells at nine mines. The surface 
water media included about 197 analyses from nine mine audits, eight 
washes, and six creeks at seven mine sites. As many as 25 soil samples 
were taken from four mines to support 110 analyses.
    Levels in excess of the federal MCLs and state guidelines were 
found in groundwater and surface water samples, as well as soil and 
sediment samples at abandoned and active copper mines. TENORM 
exceedences were also found in groundwater at active and inactive 
copper mines. Uranium byproducts were recovered from heap leach dumps 
and in-situ operations that feed SX-EW and ion exchange circuits at 
several copper mines. Radioactivity was discovered in copper mineral 
processing waste streams. Elevated levels of radioactivity were also 
found to occur in the process solutions and process wastes. . . . .
    Data presented within this report represent a sampling of copper 
mines and facilities, and may not necessarily represent all copper 
operations in the state. The impacts of copper mining are noteworthy 
because of unique conditions, such as the presence of trace uranium 
minerals and the mining and extraction methods that unintentionally 
extract radioactive materials and enhance its environmental mobility. 
Tables 1-5 present data on the mining sites where TENORM has been 
documented by ADEQ. These sites are: Cyprus Bagdad (CB), Cyprus Twin 
Buttes (TB), Cyprus Sierrita (CS), Phelps Dodge Copper Queen (CQ), 
Pinto Valley (PV), Mineral Park (MP), Phelps Dodge Morenci (MM), Phelps 
Dodge New Cornelia (NC), American Legion (AL), De la Fontaine (DF), 
Hillside (HS), Three R s (TR), Magma Florence (MF), Santa Cruz (SC), 
and Magma San Manual (SM). Groundwater, surface water, process solution 
and process waste data in Tables 1-5 are expressed in pCi/L, while soil 
and sediment data are expressed in pCi/g.

                         Table 1: Groundwater Statistical Data (except Morenci) (pCi/L)

        Radiochemical                     Mine Sites                Number     Min.    Max.    Avg.    Std. Dev.

Gross Alpha                    CB,TB,CS,CQ,PV,MP,NC              129          0       1500    60.3    150.8
Gross Beta                     CB,TB,CS,CQ,PV,MP,NC              116          0       500     44.4    72.6
U-238                          CB,CQ,NC                          63           0.06    38.6    5.9     7.6
U-234                          CB,CQ,NC                          63           1.3     60.4    12.8    14.8
U-235                          CB,CQ,NC                          56           0       2.9     0.4     0.5
Total Ra                       PV                                16           0.8     122     10.8    30.5
 Ra-226                        CB,TB,CS,CQ,PV,NC                 117          0       130     3.0     13.4
Ra-228                         CB,TB,CS,CQ,PV,NC                 111          0       122     4.1     12.7
Total-U                        IB,CB,CS,CQ,PV,NC                 119          0       209     12.0    24.9
Rn-222                         CB,CQ,PV                          23           16      3980    216     1309
Total                          7 MINES                           813

* Note: Levels of radioactivity in excess of federal MCLs or Arizona guidelines are shown in bold


                                 Table 2: Surface Water Statistical Data (pCi/L)

        Radiochemical                     Mine Sites                Number     Min.    Max.    Avg.    Std. Dev.

Gross Alpha                    MP,MM,CB,TR,AL,DF,HS,NC           54           0       1240    83.5    188.4
Gross Beta                     CB,MP,MM,TR,NC                    32           0       128      27.1   34
U-238                          CB,TR,AL,HS,NC                    19           0.1     678     83.8    168.2
U-234                          CB,TR,AL,HS,NC                    19           0.2     577     80      141.8
U-235                          CB,TR,NC                          9            0.04    2.9     1.1     0.9
Ra-226                         CB,MP,NC                          29           0       71.8    6.4     13.8
Ra-228                         MP,CB,TR,AL,DF,HS,NC              18           0       55.5    5.6     13.1
Total-U                        MP,CB,TR,NC                       12           0.01    32.9    6.6     10.9
Rn-222                         MP                                3            39      120     68.3    44.9
Total                          8 MINES                           195

* Note: Levels of radioactivity in excess of federal MCLs or Arizona guidelines are shown in bold


                               Table 3: Sediment and Soil Statistical Data (pCi/g)

        Radiochemical.                    Mine Sites                Number     Min.    Max.    Avg.    Std. Dev

Gross Alpha                    AL,DF,HS,MM                       25           0.5     395     63.1    90.0
Gross Beta                     AL,DF,HS,MM                       25           22      248     69.4    52.3
U-238                          AL,DF,HS                          20           0.7     63.3    7.9     14.2
U-234                          AL,DF,HS                          20           0.9     60.8    10.0    16.6
Ra-226                         AL,DF,HS                          20           0.7     82.6    10.4    19.7
Totals                         4 Mines                           110

* Note: Levels of radioactivity in excess of federal MCLs or Arizona guidelines are shown in bold


                               Table 4: Process Solutions Statistical Data (pCi/L)

        Radiochemical                     Mine Sites               Number     Min.    Max.     Avg.    Std. Dev.

Gross Alpha                    MP,MM,MF,SC                       43          1.3     8649    1841     1850
Gross Beta                     MP,MM,MF                          41           3.0     3683   975.6    881.7
U-238                          MF                                2           248     1611    929.5    963.8
U-234                          MF                                2           254     1745    999.5    1054.3
U-235                          MF                                2           11.6    598     304.8    414.7
Ra-226                         MF,SC                             4           19.5    193     86.3     79.1
Ra-228                         MF,SC                             4           2.0     19      7.8      8.0
Total-U                        MF,CS,TB                          6           0.8     4362    1895.9   1532.9
Rn-222                         MF,SC                             4           243     3760    1805.7   1593.5


For entire report, see: http://www.epa.gov/radiation/docs/tenorm/402-r-
05-007-rev0607.pdf.
                      i.4. disposal of toxic waste
Uranium Mill Tailings Radiation Control Act
    The Uranium Mill Tailings Radiation Control Act (UMTRCA) of 1978 
allows the U.S. Department of Energy (DOE) to regulate cleanup 
activities at inactive uranium tailings disposal sites. The statute 
provided for the Uranium Mill Tailings Remedial Action Project, which 
identified 24 inactive uranium sites (two of which have been delisted) 
at which the DOE monitored the contamination, ground water, and 
maintenance. These sites also will be part of the Long-Term 
Surveillance and Maintenance Program, which provides for surveillance, 
ground water monitoring, and maintenance of sites cleaned up under the 
UMTRCA Program. In addition, DOE cleaned up properties in the vicinity 
of the sites contaminated with residual radioactive materials. DOE's 
Office of Environmental Management now calls it ``DOE's oldest and most 
successful environmental restoration project.''
    UMTRCA amended the Atomic Energy Act by directing EPA to set 
generally applicable health and environmental standards to govern the 
stabilization, restoration, disposal, and control of effluents and 
emissions at both active and inactive uranium and thorium mill tailings 
sites. The standards limit air emissions and address soil and ground 
water contamination at both operating and closed facilities (42 USC 
2022 et seq.).
    Title I of the Act covers inactive uranium mill tailing sites, 
depository sites, and vicinity properties. Under this Act, EPA must set 
standards that provide protection as consistent with the requirements 
of RCRA as possible. The standards must include ground water protection 
limits. Title II of the Act covers operating uranium processing sites 
licensed by the NRC. EPA was directed to promulgate disposal standards 
in compliance with Subtitle C of the Solid Waste Disposal Act, as 
amended, to be implemented by NRC or the Agreement States. The 1993 
Amendments to UMTRCA further directed EPA to promulgate general 
environmental standards for the processing, possession, transfer, and 
disposal of uranium mill tailings. The NRC was required to implement 
these standards at Title II sites.
    In 1983, EPA developed standards to protect the public and the 
environment from potential radiological and non-radiological hazards at 
abandoned processing sites. These standards include exposure limits for 
surface contamination and concentration limits for ground water 
contamination. DOE is responsible for bringing surface and ground water 
contaminant levels at the 22 sites (two sites were delisted) into 
compliance with EPA standards. DOE is accomplishing this through the 
UMTRCA Surface and Ground Water Projects.

          1) U.S. Environmental Protection Agency Abandoned Mine Lands 
        Team Reference Manual: www.epa.gov/aml/tech/amlref.pdf
          2) Radioactive Waste Disposal: An Environmental 
        Perspectivewww.epa.gov/radiation/docs/radwaste/402-k-94-001-
        umt.htm
          3) Field Demonstration of Permeable Reactive Barriers To 
        Remove Dissolved Uranium From Groundwater, Fry Canyon, 
        Utahwww.epa.gov/radiation/docs/cleanup/402-c-00-001.pdf

Information source and contact for above three reports: United States 
Environmental Protection Agency, Ariel Rios Building, 1200 Pennsylvania 
Avenue, N.W., MC 2843, Washington, DC 20460, (202) 564-2592.
                         ii-5. cultural impacts
    Public attention is now being given to the cultural impacts on the 
indigenous peoples, not only in U.S., but throughout the world. Many 
Native American tribes still depend on natural resources for food. 
Throughout the world, indigenous peoples in particular have seen their 
centuries-old traditions razed by the introduction of industrial-scale 
business. From Alaska to Nevada, mining projects have left native 
tribes plagued by contaminated waterways and forests, health problems, 
upsurges in violence from the influx of outsiders, neglect of local 
traditions, and community infighting between those who want jobs at any 
price to the environment and those who want to preserve a way of life 
that has persevered for several thousand years.
 united nations adopts declaration on rights of indigenous peoples, 13 
                             september 2007
    The General Assembly today adopted a landmark declaration outlining 
the rights of the world's estimated 370 million indigenous people and 
outlawing discrimination against them--a move that followed more than 
two decades of debate.
    The United Nations Declaration on the Rights of Indigenous Peoples 
has been approved after 143 Member States voted in favor, 11 abstained 
and four--Australia, Canada, New Zealand and the United States--voted 
against the text.
    A non-binding text, the Declaration sets out the individual and 
collective rights of indigenous peoples, as well as their rights to 
culture, identity, language, employment, health, education and other 
issues.
    The Declaration emphasizes the rights of indigenous peoples to 
maintain and strengthen their own institutions, cultures and traditions 
and to pursue their development in keeping with their own needs and 
aspirations. It also prohibits discrimination against indigenous 
peoples and promotes their full and effective participation in all 
matters that concern them, and their right to remain distinct and to 
pursue their own visions of economic and social development.

For complete information, see: http://daccessdds.un.org/doc/UNDOC/LTD/
N07/498/30/PDF/N0749830.pdf?OpenElement.

Information source and contact: The Secretariat of the UN Permanent 
Forum on Indigenous Issues, Secretariat of the Permanent Forum on 
Indigenous Issues, United Nations, 2 UN Plaza, Room DC2-1772, New York, 
NY, 10017, Tel: 1 917 367 5100.
    Attachment Four: On the Cultural Impacts of Mining
                                 ______
                                 
     Attachment 1.--Article From Cultural Survival, April 10, 2007
    un body holds canada responsiblefor corporations' actions abroad
by Mark Cherrington, Managing Editor

http://www.corpwatch.org/article.php?id=14458
    In a groundbreaking decision, the United Nations Committee on the 
Elimination of Racial Discrimination (CERD) has told Canada that it 
must rein in Canadian corporations operating on Indian land in the 
United States.
    The finding, issued in early March, was in response to a petition 
filed by the Western Shoshone Defense Project about the actions of 
Canadian resource-extraction companies operating on the tribe's land in 
the western United States. Among other things, the Convention on the 
Elimination of Racial Discrimination, which has been ratified by both 
Canada and the United States, requires states to ``guarantee the right 
of everyone  . . . in the enjoyment of . . .  economic, social, and 
cultural rights ... and the right to public health.'' The Shoshone 
petition claimed that these are the areas in which the Canadian 
companies are affecting them.
    The petition especially targets Barrick Gold Corporation, the 
largest gold mining company in the world. Gold mining uses large 
amounts of toxic mercury and creates cyanide-laced leaching ponds, both 
of which threaten Shoshones' right to health. The blasting used to open 
mining sites destroys sacred areas, which violates the tribe's cultural 
rights to culture, and mining roads disrupt wildlife, undermining their 
traditional ways of finding food. Gold mining also requires vast 
amounts of water, which dries up springs and other water sources that 
the Shoshone need for health. The Betze mine alone uses 70,000 gallons 
per minute, and it is hardly alone. Western Shoshone lands are the 
third-largest gold producing region in the world, and there are six 
other Canadian gold companies besides Barrick operating there, with 
more applications for leases already under consideration.
    The Shoshone have targeted Canada in part because the United States 
has failed to take any action to protect Shoshone lands. On the 
contrary, the U.S. government has declared most of Shoshone territory 
to be federal public land open to resource extraction and other 
commercial activities. The treaty protecting the original Western 
Shoshone territory--some 60 million acres from southern Idaho to 
California's Mojave Desert--is still valid, but the government has 
gotten around the treaty by invoking a principle it calls ``gradual 
encroachment.'' This legal tautology has been discredited by the Inter-
American Commission on Human Rights, but the United States has ignored 
those findings.
    In fact, the government has been seeking ways of making their lands 
even more available to encroachment. Until now, extraction industries 
have been operating under a federal lease arrangement, but in 2004 
Republican congressman Richard Pombo introduced an amendment to a 
budget bill that would allow foreign companies to buy this ``public'' 
Shoshone land for $1,000 an acre. (The bill was passed by the House of 
Representatives but defeated in the Senate.) And a second bill, 
introduced by Republican congressman James Gibbons (now governor of 
Nevada), would have offered more than 60,000 acres of Shoshone land for 
sale to the Canadian company Placer Dome, now owned by Barrick Gold.
    The racial discrimination treaty is a binding agreement for Canada, 
which, like all state parties, has to submit to biannual review by the 
CERD Committee, the treaty's enforcement body. CERD reviews the 
country's report (and any accompanying unofficial ``shadow reports'' 
like the Western Shoshones') and issues observations and 
recommendations like the one regarding Canada, which read in part: 
``The committee encourages the state party to take appropriate 
legislative or administrative measures to prevent acts of transnational 
corporations registered in Canada which have a negative impact on the 
enjoyment of rights of indigenous peoples in territories outside 
Canada. In particular, the committee recommends to the state party that 
it explore ways to hold transnational corporations registered in Canada 
accountable.''
    Will Canada act on that recommendation? One hopeful sign in that 
regard is a report published on March 29 by Canada's National 
Roundtables on Corporate Social Responsibility and Canadian Extractive 
Industries in Developing Countries. Among many recommendations in this 
comprehensive government report, are several that stress the need to 
protect the rights of indigenous peoples in the areas where Canadian 
companies operate.
 Attachment 2.--Article From Nuclear Information and Resource Service, 
                              May 3, 2006
 confronting a false myth of nuclear power: nuclear power expansion is 
                    not a remedy for climate change
http://www.nirs.org/climate/background/climatetalk_mary_un_050306.htm

    May 3, 2006 New York--Nuclear power is being widely promoted as a 
``solution'' to global climate change. Unfortunately nuclear power is 
not a solution and it is further counterproductive to any real remedy 
for human impacts on climate.\3\ Those selling the expansion of nuclear 
power are on a par with any salesman of counterfeit medicine; one must 
closely examine the motives of anyone associated with nuclear schemes 
of any kind.\4\
---------------------------------------------------------------------------
    \3\ Amory Lovins, More Profit With Less Carbon, Scientific 
American: September 2005.
    \4\ See for instance, Dr. Helen Caldicott, Nuclear Madness, 
(updated edition) W.W. Norton 1994.
---------------------------------------------------------------------------
    In the service of this disinformation campaign U.S. Vice President 
Cheney has publicly stated \5\ a falsehood: he asserted that nuclear 
power is carbon-free. Nuclear power is not free from carbon emissions. 
A number of recent studies have found that when mining, processing, and 
extensive transportation of uranium in order to make nuclear fuel is 
considered, the release of carbon dioxide (CO2) as the 
result of making electricity from uranium is comparable to burning 
natural gas to make electric power.\6\ Additional energy required for 
decommissioning and disposition of the wastes generated increases this 
CO2 output substantially.\7\
---------------------------------------------------------------------------
    \5\  Cheney was speaking on C-Span in 2004 when he made the 
statement that there is already an alternative fuel developed that ``is 
carbon-free''--incorrectly referring to nuclear power.
    \6\ Felix Christian Matthes, Nuclear Energy and Climate Change, 
2005. Issue Paper # 6, Heinrich Boll Foundation & World Information 
Service on Energy, at: http://www.nirs.org/ch20/publications/
nrandclimate.htm
    \7\ Andrew Sims, Mirage and Oasis--Energy Choices in an Age of 
Global 
Warming, 2005. Posted at: http://www.neweconomics.org/gen/uploads/
sewyo355prhbgunpscr51d2w29062005080838.pdf
---------------------------------------------------------------------------
    Nuclear power is not only dependent upon fossil fuels for the 
production of uranium fuel, decommissioning, and the disposition of 
wastes generated: it is also dependent upon a grid that is powered by 
other sources of energy, typically coal. This is due to the simple fact 
that nuclear reactors cannot ``black start''\8\ --in other words, they 
depend on electric power from the external power grid to be able to 
come on-line. Transition away from the combustion of fossil fuels 
cannot be accomplished solely by the expansion of nuclear power since 
it depends on the grid being powered up before reactors can come on-
line.\9\
---------------------------------------------------------------------------
    \8\ See Wikipedia on line at: http://en.wikipedia.org/wiki/Black--
start
    \9\ See also Lovin's footnote #44 in Amory Lovins: Nuclear Power 
Economics and Climate Protection Potential 2005, Rocky Mountain 
Institute, E-05-08, posted at: http://www.rmi.org/images/other/Energy/
E05-08--NukePwrEcon.pdf.
---------------------------------------------------------------------------
    A second false facet of the promotion of nuclear power as a 
``solution'' hinges on the claim that nuclear energy is clean.\10\ The 
implication: if you cannot see it, there is no pollution. In truth 
nuclear power can only operate because it enjoys some of the most 
lenient public ``protection'' standards in the world.\11\ The 
destructive activity of radioactivity is to disrupt the structures of 
living cells, especially DNA.\12\ The international regulatory regime 
for exposure to radiation results in an unfortunate level of human 
sacrifice. Considering only the exposure of ``standard'' adult males in 
the US civilian population to ``permissible'' levels of radiation, one 
official estimate of risk finds that of every 57 men exposed, one will 
suffer fatal cancer.\13\ Obviously this same level of radiation 
exposure will produce more cancers in children and others who are more 
vulnerable\14\ US worker standards have recently been revealed to 
produce cancer in 1 in 4 workers.\15\ Recent revelations of massive 
tritium releases from US reactors, contaminating groundwater in 
residential neighborhoods, exposes the lie that nuclear power is 
``clean.''\16\
---------------------------------------------------------------------------
    \10\ Nuclear Energy Institute advertising campaign.
    \11\ Mary Olson, the Myth of the Millirem, 2004. See http://
www.nirs.org/factsheets/mythmiliremfctsht.htm
    \12\ Cindy Folkers, Radiation Basics, 1999. See http://
www.nirs.org/radiation/radiationbasics.pdf
    \13\ US Nuclear Regulatory Commission, published in the Federal 
Register: Below Regulatory Concern Policy Statement 1990 establishes 
that the US radiation standard of 100 millirems a year would result (at 
government assessed levels of risk) in 1 in 286 people exposed 
suffering fatal cancer. US regulations promulgated in the Code of 
Federal Regulations, Chapter 10, Part 20 allow the public to be exposed 
to up to 500 millirems a year from combined sources of air, water and 
sewage, raising the cumulative level of risk, as assessed by that 
agency (which assumes a linear dose-response relationship) to 1 in 57.
    \14\ Cindy Folkers and Mary Olson, Radiation and Children: The 
Ignored Victims, 2004. See http://www.nirs.org/radiation/
radiationandchildren.pdf
    \15\ National Academy of Sciences, Biological Effects of Ionizing 
Radiation VII, 2005. Also, Cindy Folkers, US Panel Recognizes No Safe 
Dose of Radiation, 2005. See: http://www.nirs.org/radiation/radtech/
nosafedose072005.pdf
    \16\ See: http://www.nirs.org/radiation/tritium/tritiumhome.htm.
---------------------------------------------------------------------------
    The vast majority of radioactivity in nuclear waste worldwide is 
from the production of electricity. Even in the United States, where 
for decades a robust nuclear weapons program operated, more than 95% of 
the total radioactivity is in waste from commercial nuclear power.\17\ 
Reactor waste contains materials with half-lives measured in tens of 
thousands, and some in millions of years. More than 12,000 human 
generations--are required to reduce the hazard of these materials to 
acceptable levels. The most concentrated waste is irradiated fuel from 
electric power reactors, and the residual wastes from attempts to 
``recycle'' or reprocess the fuel.\18\ Other wastes include the entire 
massive reactor structure itself when the facility is shut down.\19\
---------------------------------------------------------------------------
    \17\ US Department of Energy, Integrated Spent Fuel Database, 1994.
    \18\ See High-Level Nuclear Waste Fact Sheet, 1997, http://
www.nirs.org/factsheets/hlwfcst.htm
    \19\ See Low-Level Radioactive Waste Fact Sheet, 1992, http://
www.nirs.org/factsheets/llwfct.htm
---------------------------------------------------------------------------
    In addition to radiological pollution, nuclear power also 
contributes massive thermal pollution to both our air and water. \20\ 
It has been estimated that every nuclear reactor daily releases thermal 
energy-heat--that is in excess of the heat released by the detonation 
of a 15 kiloton nuclear bomb blast.\21\ In addition to horrendous 
direct impact of this heat on aquatic ecosystems, nuclear power 
contributes significantly to the thermal energy inside Earth's 
atmosphere, making it contraindicated at this time of rapid global 
warming.
---------------------------------------------------------------------------
    \20\ Paul Gunter and Linda Gunter, et al, License to Kill, 2000. 
See: www.nirs.org/reactorwatch/licensedtokill/LiscencedtoKill.pdf
    \21\ See news report posted at: http://www.closeindianpoint.org/
articles/tjn--071103.htm
---------------------------------------------------------------------------
    A fundamental element in finding that nuclear power is a false 
solution to climate change is that the economics of nuclear power are 
not sound--in open markets nuclear cannot compete.\22\ Since splitting 
atoms is not a cost-effective source of electric power, it is even less 
cost-effective in preventing greenhouse gas emissions. Life cycle costs 
for nuclear power generation (in the USA) have been estimated at 12 
cents a kilowatt hour, whereas life cycle costs for wind power in the 
same analysis is estimated at 4 cents a kilowatt hour.\23\ Others find 
that expanding nuclear generating capacity is about twice as expensive 
as expanding generating capacity through investment in wind power.\24\ 
Since the same money will buy 2-3 times more electric power when used 
to purchase wind generated electric power, it is clear that prevention 
of greenhouse emissions will also be 2-3 times greater when buying wind 
generated electricity.
---------------------------------------------------------------------------
    \22\ Amory Lovins, Mighty Mice, Nuclear Engineering International, 
December, 2005. http://www.rmi.org/images/other/Energy/E05-15--
MightyMice.pdf There are many other citations given by Lovins in his 
recent review article on economics of nuclear power, see note #51.
    \23\ Nuclear Economics, Safe Energy Communication Council, 1992. 
This figure does not reflect full costs of long term waste disposition, 
or any health impacts.
    \24\ Lovins, More Profit with Less Carbon, see note #3.
---------------------------------------------------------------------------
    Wind energy is the fastest growing form of electric power 
generation in the world.\25\ This technology leads the portfolio of 
renewable energy options, and solar power is also making enormous 
strides with significant annual drops in cost of photovoltaic 
hardware.\26\
---------------------------------------------------------------------------
    \25\ Jim Moltivalli, Catching the Wind, E Magazine, January 2005. 
http://www.emagazine.com/view/?2176
    \26\ See http://www.eande.tv/transcripts/?date=092805
---------------------------------------------------------------------------
    In the USA, the ongoing waste of electric power makes investment in 
energy efficiency\27\ protocols and hardware an even more cost-
effective way to reduce carbon emissions. Amory Lovins\28\ finds that a 
combination of assertive efficiency programs combined with 
decentralized industrial cogeneration of electric power from waste heat 
results in 7 times more reduction of CO2emissions than a 
comparable investment in expanding nuclear power. A comprehensive 
strategy for the USA--a real remedy for reducing greenhouse gases--is 
contained in the ``Sustainable Energy Blueprint: A Plausible Strategy 
for Achieving a No-Nuclear, Low-Carbon, Highly Efficient and 
Sustainable Energy Future.''\29\
---------------------------------------------------------------------------
    \27\ Efficiency and conservation are not the same. Conservation is 
the suspension of use--efficiency is wise use. The opportunity to 
develop using energy efficient hardware, protocols and strategies is 
the opportunity to avoid emissions through wise use and relative 
reduction in overall demand.
    \28\ See note #3
    \29\ Sustainable Energy Blueprint: A Plausible Strategy for 
Achieving a No-Nuclear, Low-Carbon, Highly Efficient and Sustainable 
Energy Future. See: http://healthandenergy.com/sustainable--energy--
blueprint.htm
---------------------------------------------------------------------------
    The finding that nuclear energy is not profitable, that it is not 
compatible with public health, and that it releases massive heat 
directly contradicting climate goals, calls into question the basis 
upon which individuals, governments and corporations are seeking to 
invest public funds in nuclear expansion. Inquiring minds will ask if 
there is an additional agenda underlying this gambit to ``revive'' 
nuclear power. Before offering some conjecture about such motives, 
there remain several points about why nuclear power is not qualified to 
remedy our climate fever.
    An extensive 2003 study by the Massachusetts Institute of 
Technology\30\ investigated the future of nuclear power, including its 
potential to combat climate change. MIT's nuclear boosters project that 
expanding nuclear generating capacity worldwide to 1000 billion watts 
would be required to address the climate problem to any meaningful 
degree. This would roughly mean adding one new reactor every two weeks 
until 2050. In the USA, some of the last reactors to be built (Vogtle 1 
& 2) cost more than $4 billion each! The industry has recently asserted 
that it will be possible to build reactors for $ 2 billion\31\--1/2 the 
previous actual figure; this however, is speculative. Even taking the 
$2 billion industry ``guestimate,'' it would require trillions of 
dollars to implement this supposed ``fix.'' It is plain that a similar 
investment in efficiency in the USA and other energy-hog nations, and 
investment in wind energy worldwide would be a far more cost-effective 
use of capital. One can only imagine the results if a fraction of the 
residual funds were invested in technology development in solar, 
appropriate hydro, appropriate biomass and other sustainable power 
innovations!
---------------------------------------------------------------------------
    \30\ J. Deutsch and E. Moniz (co-chairs), The Future of Nuclear 
Power, MIT, 2003.
    \31\  Seattle Times, April 28, 2006, Nuclear Power's New 
Generation. http://seattletimes.nwsource.com/html/nationworld/
2002958091--nuclear28.html
---------------------------------------------------------------------------
    The economic factors outlined above do not consider the 
considerable risk associated with operating facilities that are 
effectively pre-deployed nuclear weapons.\32\ In the USA the 
prospective costs associated with such risks are effectively relegated 
to future victims.\33\
---------------------------------------------------------------------------
    \32\ On September 18, 2001 Mohamed El Beredei was quoted in the 
world press admitting that if a jumbo jet hit a nuclear reactor it 
would result in a Chernobyl level release of radioactivity and that in 
fact, no reactor in the world could withstand such a hit. Unfortunately 
it does not take an airplane to cause a major reactor accident as has 
been portrayed in a number of dramatic presentations including China 
Syndrome; Meltdown; 24 (2005) and West Wing. See also Frank von Hippel, 
Revisiting Nuclear Power Plant Safety, Science 291:201, 2003.
    \33\ The USA relies upon a publicly administered insurance program 
for nuclear power (the Price-Anderson Act) that provides a system 
whereby all reactor operators pay in the event of any one unit having a 
major accident--and a liability cap, beyond which the industry does not 
have to pay. It is of interest that while an act of terror would be 
covered by the program, acts of war are not. The Bush War on Terror has 
neutralized all liability for the industry.
---------------------------------------------------------------------------
    The financial analyses, as unfavorable as they are already, assume 
that splitting uranium is a bona-fide source of energy. There is the 
assumption that one does, in fact, achieve the production of new energy 
over and above the investment of energy required to create, fuel, and 
run the reactor. An in-depth analysis by Jan Willem Storm van Leeuwen 
and Philip Smith\34\ challenges this assumption. These authors find 
that operating a nuclear power reactor does not always result in new 
power production. When all of the energy used to produce uranium fuel, 
build the reactor and decommission it (not including long term waste 
disposition) are considered, some of the scenarios show that no new 
energy is achieved--in some cases no matter how long the reactor is 
run! Outcome of the calculations is directly tied to the quality of the 
uranium ore used. Clearly it does not make sense to spend trillions of 
dollars on a technology that does not reliably produce the desired 
product--energy. Given the steep curve on technology costs associated 
with implementing hydrogen as a transportation fuel, using uranium as 
the base for producing hydrogen production may simply amplify this 
black-hole effect.
---------------------------------------------------------------------------
    \34\ Jan Willem Storm van Leeuwen and Philip Smith, Nuclear Power: 
the Energy Balance, 2002 (revised and posted in 2005 with updates at: 
http://www.stormsmith.nl/ )
---------------------------------------------------------------------------
    Storm and Smith show that uranium, similar to oil, is subject to a 
``peak'' in the availability of high-grade uranium ores, and that these 
premium ores are already being exhausted. ``Peak uranium'' is a driver 
in the push to ``close the fuel cycle'' and move to plutonium as the 
fuel in atomic reactors. Plutonium may be used either in combination 
with uranium--as MOX (mixed oxide) fuel,\35\ or alone in high-
temperature breeder reactors, both of which are vulnerable to diversion 
of plutonium for nuclear weapons proliferation. \36\
---------------------------------------------------------------------------
    \35\ See Basic Info on MOX Fuel: http://www.nirs.org/factsheets/
basicmoxinfo.htm
    \36\ Frank von Hippel, No Hurry to Recycle, May 2006 Mechanical 
Engineering.
---------------------------------------------------------------------------
    2005 marked a deeply disturbing turn in US nuclear policy toward a 
plutonium economy.\37\ The Energy Policy Act of 2005\38\ awarded 
billions of dollars in direct tax subsidy, tax credits, guaranteed 
loans\39\ and other inducements to spawn a new generation of 
(partially) publicly funded commercially owned nuclear power reactors 
in the US. Nonetheless a major Wall Street credit analyst, Standard and 
Poors\40\ responded to the legislation stating that nuclear power is 
still ``a risky business practice'' and suggested that it would require 
``progress'' in traditional problem areas, such as long-term nuclear 
waste disposition for Wall Street to jump into new reactor investments. 
High-level nuclear waste is currently stored on corporate reactor 
sites.
---------------------------------------------------------------------------
    \37\ Margaret Meade and Rene Dubos, The Plutonium Economy: A 
Statement of Concern, 1974 for the US Council of Churches, resulted in 
a 1976 resolution calling for a moratorium on plutonium fuel use.
    \38\ Energy Policy Act of 2005--Conference Report--http://
energy.senate.gov/public/--files/ConferenceReport0.pdf
    \39\ Mary Olson, Nuclear Power: The Next Degeneration, 2005.
    \40\ See: http://www.mineweb.net/sections/energy/783025.htm
---------------------------------------------------------------------------
    For the past two decades the nuclear waste program in the US has 
been based on the goal of deep geologic burial. Reprocessing was tried 
(and abandoned) 40 years ago-- to disastrous environmental and economic 
consequences in West Valley, New York.\41\ The industry found 
reprocessing to be unprofitable, and US Presidents Ford and Carter 
banned it thanks to the demonstration by India that this technology 
results in the separation of nuclear weapons-usable plutonium-239 from 
the waste.\42\
---------------------------------------------------------------------------
    \41\ Kevin Kamps, Radioactive Wreck, The Nuclear Monitor, 2006. 
See: http://www.nirs.org/mononline/nm643.pdf
    \42\ Plutonium does not occur on Earth except in trace residues, 
where it is produced in tonnage quantities inside all nuclear reactors 
that use uranium fuel. In the USA irradiated reactor fuel contains 
about 1% plutonium.
---------------------------------------------------------------------------
    In November 2005 Congress reversed US policy on reprocessing --in 
part driven by the technical failure of the Yucca Mountain repository 
program,\43\ and perhaps in part by a desire on the part of the French 
nuclear interests (AREVA, Cogema, Framatome) to access the US tax base. 
The French have been leaders in nuclear fuel reprocessing and yet their 
plutonium MOX fuel business has run dry--lacking international 
customers.\44\ In any case, this reversal of decades of US commitment 
to a ``once through'' fuel program is deeply disturbing. Aside from 
global security issues, plutonium generates even more heat for our 
planet to absorb,\45\ has even worse emissions, and in the event of ``a 
Chernobyl'' would be twice as deadly.\46\
---------------------------------------------------------------------------
    \43\ See note 41.
    \44\ Cogema is a partner in the US MOX fuel program, ostensibly for 
the ``disposition'' of weapons grade plutonium in partnership with 
Russia. AREVA is a full partner in the new Bush/Cheney Global Nuclear 
Energy Partnership.
    \45\ See: MOX at a Nuclear Power Reactor Near You, http://
www.nirs.org/factsheets/moxandreactor.htm
    \46\ Dr. Edwin Lyman--Public Health Consequences of Substituting 
Mixed-Oxide Fuel For Uranium Fuel in Light Water Reactors, 1999. 
Nuclear Control Institute--http://www.nci.org/k-m/moxsum.htm
---------------------------------------------------------------------------
    Finally, as a crowning point-- nuclear power is not qualified to 
operate in extreme weather. As cited above, nuclear reactors--all of 
them--depend on energy from the grid to operate. Since the core of a 
reactor continues to generate heat for years, even ``off-line,'' it is 
vital that emergency cooling equipment be operable around the clock. As 
is sensible, every reactor site is equipped with back-up power, most 
often in the form of diesel generators. Unfortunately these generators, 
in part because of intermittent use, are not terribly reliable.\47\ 
When both the grid and the back-up power fail, the site is said to be 
in ``station blackout.'' According to the US Nuclear Regulatory 
Commission, station blackout contributes a full one-half of the total 
risk of a major reactor accident at US nuclear power stations.\48\
---------------------------------------------------------------------------
    \47\ Summary of findings given in: http://www.nirs.org/
reactorwatch/mox/nirsmcguirecatawbacontentions.htm
    \48\ U.S. Nuclear Regulatory Commission, ``Severe Accident Risks: 
An Assessment for Five U.S. Nuclear Power Plants,'' NUREG-1150, 1990.
---------------------------------------------------------------------------
    Recent years have seen an escalation in all kinds of extreme 
weather: intense heat, drought, blizzards, tornados, and perhaps most 
compelling--hurricanes and cyclones. All of these conditions may 
contribute to electric grid failures. The loss of grid power will not 
necessarily trigger a nuclear crisis, but there is an elevated risk. 
Overall blackout risk increases as the number of outages increases. 
Nuclear energy is an enormous liability in these turbulent times.
    Nuclear power is also incapable of operating in hot water, as 
evidenced by the heat waves of 2004. A number of nuclear reactors in 
France were not operable.\49\ The reactors were at low power not 
because of nuclear safety issues--but rather because of the basic 
design of a nuclear reactor. Essentially an expensive, dangerous ``tea 
pot,'' a nuclear power reactor harvests the heat from splitting atoms 
to make steam, to turn a turbine. The closed loop system relies on the 
heat differential between the temperature of the steam, and the 
temperature of a condenser, to turn the steam back into liquid to 
repeat the process. When the water used to cool the condenser gets too 
warm this differential is lost. The steam no longer condenses back to 
liquid. When river and lake water gets too hot, electric power cannot 
be generated.\50\ As temperatures rise, nuclear power will be less and 
less qualified as a means to even try to generate electric power.
---------------------------------------------------------------------------
    \49\ French reactors off line 2004
    \50\ David Lochbaum, Union of Concerned Scientists
---------------------------------------------------------------------------
    Now some conjecture about why anyone would campaign for the 
``revival'' of an unprofitable, unreliable, dangerous, even fraudulent 
technology like nuclear ``power.'' In a nutshell: to retain centralized 
control of the supply of energy, as well as control over the timing of 
the availability of any ``alternative.''
    Fossil fuels--and uranium--are traditionally centralized energy 
production models. Efficiency is the ultimate in ``decentralization'' 
since the factors that will optimize efficiency are unique to each 
operation. Wind, solar and other renewable resources can be 
centralized, however the inherent value of distributed generation has 
become clear in helping to increase overall efficiency of power usage 
and minimization of power loss throughout the distribution system. 
Distributed generation is also recognized as means to increase grid 
stability.\51\ Given the urgency of the climate challenge we face, it 
is vital to note that energy efficiency, wind, appropriate hydro, 
biomass and solar are all viable, and available at industrial scale 
NOW.\52\ However for those holding the reins on fossil fuels--
particularly oil--there is a distinct (and highly profitable) advantage 
to forestalling the implementation of any alternative until the full 
impact of the oil ``peak'' and resulting energy shortages are 
experienced.\53\ While oil is primarily tied to transport, it is 
important to note that the Bush administration projects the use of 
nuclear power reactors to make hydrogen for use in vehicles.\54\ Since 
wind makes more electricity per dollar invested, it is also cost-
effective at generating hydrogen than nuclear. Electric cars charged on 
the grid would vastly increase the demand for electric power--far 
exceeding traditional electric energy guzzlers like hot water heaters.
---------------------------------------------------------------------------
    \51\ See article by Amory Lovins cited in note # 9
    \52\  Renewables are Ready-- a guide to teaching about renewable 
energy, published by Union of Concerned Scientists.
    \53\ It should be noted that not all subscribe to the necessity or 
value of experiencing peak oil--see Amory B. Lovins: Winning the Oil 
Endgame, 2004. Cosponsored by the US Pentagon.
    \54\ Cindy Folkers: Hydrogen Production By Nuclear Power, 2003. See 
www.nirs.org/
---------------------------------------------------------------------------
    Those who promote nuclear expansion are simultaneously promoting a 
deeper agenda to dominate civil society with a model of central 
control. Given the security issues associated with nuclear power, (even 
more so with the use of plutonium fuel) this control may exceed 
compatibility with democracy. Yet one more reason to oppose this false 
solution.\55\
---------------------------------------------------------------------------
    \55\ See also, NIRS/WISE, Nuclear Power: No Solution to Climate 
Change, published in the Nuclear Monitor, February, 2005 posted at: 
http://www.nirs.org/mononline/nukesclimatechangereport.pdf
---------------------------------------------------------------------------
                       Attachment 3.--Fact Sheet
       uranium mining and nuclear pollution in the upper midwest
    1. Uranium mining in South Dakota, Wyoming, Montana, and North 
Dakota began in the middle of the 1960s. World War II, which ended with 
the nuclear bomb, introduced the use of nuclear energy for the 
production of electricity and caused the price of uranium to rise. As 
the economy of the Midwestern states depends primarily on agriculture, 
when uranium was discovered in the region, many get-rich-quick schemes 
were adopted. Not only were large mining companies chopping off the 
tops of bluffs and buttes, but small individual ranchers were also 
digging in their pastures for the radioactive metal. Mining occurred on 
both public and private land, although the Great Sioux Nation still 
maintains a claim to the area through the Fort Laramie Treaties of 1851 
and 1868.
    2. In northwestern South Dakota, for example, the Cave Hills area 
is managed by the US Forest Service. The area currently contains 89 
abandoned open-pit uranium mines. Studies show that one mine alone has 
1400 mR/hr of exposed radiation, a level of radiation that is 120,000 
times higher than normal background of 100 mR/yr. There are no warning 
signs posted for the general public anywhere near this site! It is 
estimated that more than 1,000 open-pit uranium mines and prospects can 
be found in the four state region from a map developed by the US Forest 
Service.
    3. The following agencies are aware of these abandoned uranium 
mines and prospects: US Forest Service, US Environmental Protection 
Agency, US Bureau of Land Management, SD Department of Environment and 
Natural Resources, the Bureau of Indian Affairs and the US Indian 
Health Service. Only after public concern about these mines was raised 
did the USFS and the EPA pay for a study of one mine this year, 2006. 
No studies have been completed on the health effects to humans or the 
environment.
    4. The water runoff from the Cave Hills abandoned uranium mines 
empties into the Grand River which flows through the Standing Rock 
Indian Reservation. Three villages are located on the Grand River and 
their residents have used the water for drinking and other domestic 
purposes for generations. One village still uses the water for drinking 
and domestic purposes. The water runoff from the Slim Buttes abandoned 
uranium mines empty into the Morreau River which flows through the 
Cheyenne River Indian Reservation. Four villages are located on the 
Morreau River; however, no data is currently available about their use 
of the Morreau River water. Both of these rivers empty into the 
Missouri River which empties into the Mississippi River.
    5. In 1972, President Richard Nixon signed a secret Executive Order 
declaring this four State region to be a ``National Sacrifice Area for 
the mining and production of uranium and nuclear energy.''
    6. In southwestern South Dakota, the southern Black Hills also 
contain many abandoned uranium mines. Nuclear radiation near Edgemont, 
SD, has already polluted the underground water of the Pine Ridge Indian 
Reservation according to a study completed in 1980 by Women of All Red 
Nations. The US Air Force also used small nuclear power plants in their 
remote radar stations and intercontinental ballistic missile silos 
which also number in the hundreds in this four State region.
    7. In Wyoming, hundreds of abandoned open-pit uranium mines and 
prospects can be found in or near the coal in the Powder River Basin. 
Yet plans are being made to ship more of that coal to power plants in 
the Eastern part of the United States. Radioactive dust and particles 
will be released into the air at the power plants. Federal tax dollars 
totaling more than $2.3 billion dollars as a loan are planned to be 
given to a private business, the Dakota, Minnesota and Eastern 
Railroad, to increase the amount of coal hauled to the power plants.
    8. More than 7,000 exploratory wells have been drilled in South 
Dakota and Wyoming surrounding the Black Hills which contain many 
sacred places and burial sites. In this process many of these sacred 
sites have been destroyed. The wells are 500-800 feet in depth and have 
already introduced uranium into the underground aquifers. Now, new 
mining companies are trying to avoid South Dakota's slow legislative 
process to monitor ``In Situ Leach Mining'' by seeking permits before 
the regulations are complete.
    Attachment 4.--Article From Mother Jones Magazine, June 7, 2006
By April Dembosky
                   on the cultural impacts of mining
    NEWS: At Alaska's proposed Pebble Mine site, the focus is on 
environmental and economic outcomes. But what about the Native culture 
and community?
http://www.motherjones.com/news/featurex/2006/06/mining.html

    Jobs, jobs, jobs. When mining projects attract criticism from 
environmental activists, their most reliable defense has always been 
the thousands of jobs the company will provide to an otherwise 
economically depressed community. In the battle over the proposed 
Pebble gold/copper mine in the Lake Iliamna region of Southwest Alaska, 
the debate is no different. Northern Dynasty, the Canadian company 
developing the site, is boasting 2,000 jobs during the initial 
construction phase and 1,000 permanent jobs for at least 30 years after 
that. The promise of an economic boom is very appealing to the locals, 
who have watched their traditional fishing economy suffer from falling 
salmon prices and rising fuel costs. But numerous locals and advocacy 
groups have complained that the potential environmental damage far 
outweighs any promises of prosperity: toxic mining chemicals, they say, 
might seep into sensitive salmon spawning streams; transport roads will 
cut through pristine Alaskan wilderness; noise of heavy machinery and 
vehicles will disrupt caribou and moose migration.
    But it's not just the land and animals that are under threat.
    For the Native Alaskan tribes that depend on these natural 
resources for food, their very livelihood is at stake. Throughout the 
world, indigenous peoples in particular have seen their centuries-old 
traditions razed by the introduction of industrial-scale business. From 
Peru to Ghana to Nevada, mining projects have left native tribes 
plagued by contaminated waterways and forests, health problems, 
upsurges in violence, destruction of local traditions, and community 
infighting.
    There is little reason for southwest Alaskans to think things will 
be any different for them. Herman Nelson, a tribal leader in Koliganek, 
downstream from the proposed Pebble site, echoes the concerns of 
surrounding tribes. ``Jobs don't impress me very much. The mine is 
going to deplete the resources,'' he says. ``It's going to change the 
feel of the community, the way we live.''
    The Pebble Mine is ``a textbook example,'' says Alaskans for 
Responsible Mining advocate Scott Brennan, who has worked closely with 
Native tribes battling mines throughout the U.S. ``When this scale of 
development comes in, first you lose wild food sources. Next you begin 
to lose your relationship with the land. Then your home territory is 
flooded with thousands of people from somewhere else. The end result is 
erosion and degradation of native culture.''
    More than half the world's mines are built on indigenous lands. 
Some problems are particular to the geography of the land and the 
particular traditions of the tribes, but there are several broad trends 
that unite them.
    ``At first, people only see dollar signs,'' says Dean Stiffarm, 
environmental liaison for the Fort Belknap tribe in Montana. But 
promises of jobs, cheaper electricity, and reduced property taxes 
proved empty for the Montana Fort Belknap tribe. Despite guarantees of 
job priority, tribal members were routinely passed over for highly 
technical jobs. Then when the mining company declared bankruptcy after 
20 years of operation, the natives were left to pay for the upgraded 
electricity system and the environmental clean-up.
    Negative health impacts are a more subtle outcome. At the Laguna 
reservation in New Mexico, 60 miles west of Albuquerque, naturally 
growing plants that were a common part of the native diet and medicinal 
tradition were destroyed by construction and radioactive dust pollution 
from a nearby uranium mine. Supermarkets and a Western medical clinic 
took their place. People weren't used to manufactured medicines, which 
made some sick and often didn't work. Store-bought high-cholesterol 
foods led to rapid increases in heart disease and diabetes. Air and 
water pollutants dramatically increased rates of childhood asthma and 
kidney infections.
    Around Iliamna Lake, locals believe the wild fish and game, rich in 
omega 3 oils, keeps them healthy and youthful. If there is an accident 
that harms wildlife habitats--chemicals leaching into groundwater, acid 
runoff--or, so health aide workers believe, if people get accustomed to 
the convenience of store-bought foods, high cholesterol and diabetes 
rates will go up. Cecilia Suskuk, an aide at the Iguigig clinic says 
that already among local people ``there's more high cholesterol, 
because they're incorporating more processed meats into their diet.'' 
In several communities, the fear alone that resources have been 
contaminated stops locals from consuming local water supplies, plants, 
or animal stocks. Instead, they rely on less healthy packaged foods and 
their kids lose interest in traditional hunting and cooking.
    There are other social impacts, like those observed in Wayne 
Garcia's native community in New Mexico. When the Anaconda Company 
built the Jackpile uranium mine next to the Laguna reservation, there 
came a flood of alcohol and methamphetamine with the thousands of new 
workers. Garcia, who is the Chairman of the Yerington Paiute Tribe, has 
visited the communities around Alaska's Pebble site to share his 
experiences. He believes rates of drug abuse and alcoholism among 
Natives at Laguna went up over the 30 years the mine was in operation, 
which in turn led to increases in domestic violence, child abuse, and 
child neglect. ``It was the ripple effect,'' Garcia says.
    Manuel Pino, a member of the Acoma Nation, neighboring Laguna, 
believes the drinking problems and other changes were due to the shifts 
in lifestyle. ``We went from being agriculturalists and livestock 
raisers to wage earners,'' he testified at the World Uranium Hearings 
in 1992. ``People prioritized their eight-hour-a-day-job over 
participating in the ceremonies. Our Elders cry today that the 
generation below us cannot speak our language.''
    Bonnie Gestring, an advocate in the Northwest office of the 
environmental group Earthworks, points out that the rise in violence 
puts added strain on small rural public health care and law enforcement 
systems. ``It takes a while for services to come up to speed with 
increased demand,'' she says. Theoretically, Iliamna Lake residents 
could prepare in advance for the changes. But with so much attention 
focused on potential environmental hazards and job creation, health 
needs are low on the priority list. Northern Dynasty won't complete its 
cultural impact study until well after the project is fully developed, 
several more years down the road. For now, and when the mining project 
ends after 30 to 50 years, it is the communities themselves that are 
left to cover the expanded services and public health costs on their 
own.
    No amount of preparation can account for what Wayne Garcia called 
the worst effect of mining in his community: fighting within the tribe. 
``We were always taught that family is unity and we have to depend on 
each other for support.'' But when money and material possessions took 
over as symbols of status and power, an ethic of competition began to 
dominate. ``These outside influences come in and you've got jealousy 
and greed that erode the family value. Soon you see family against 
family.''
    Northern Dynasty's COO Bruce Jenkins insists such problems will be 
mitigated by company policies. To keep the number of outsiders limited, 
for example, hiring preference will go first to local Alaskans, so 
long, he adds, as they are ``interested, willing, and able.''
    But who exactly are all these local workers who will fill the 1,000 
to 2,000 jobs? In the entire Lake and Peninsula Borough, which includes 
14 towns spread across 24,000 square miles, the population is just over 
1,600. More than 43 percent of the population is under 18 or over 65 
years of age; three quarters are Alaskan Native. Even if all those 
eligible for a job at the mine take one, the communities around Iliamna 
Lake can expect a mass influx of outsiders--enough to more than double 
the current population--and all the problems they bring.
    Jenkins swears these things won't happen at Pebble. Workers who are 
flown in from outside the area or state will be housed in dorms 
secluded from pathways frequented by locals, he vows. There will be 
zero contact with natives. Alcohol and drugs will be strictly 
prohibited, as will fishing and hunting.
    ``This is still America,'' counters Brian Kraft, coordinator for 
the Bristol Bay Alliance, a coalition opposing development of the 
Pebble Mine. Employees work in shifts, two weeks on and then two weeks 
off. When they're off the clock, Kraft argues, ``they can do whatever 
they want''--and that includes taking recreational substances or 
fishing and hunting the stocks that locals depend on for food. With a 
new road, lake harbor, and port, and cheaper air fares expected to make 
travel in and out of the region easier for employees-- and tourists--
the company's rules and promises can go unbroken for only so long.
    Still, the allure of a steady income is attractive to many locals. 
``I love my people, but I got to tell you something, it is a struggle 
to live,'' says Myrtle Anelon of Iliamna. ``You cannot pay your 
electric bill, you cannot pay your fuel bill unless you have money.'' 
She is hesitant to dismiss the Pebble proposal so early in the 
development stages. ``If we don't give them a chance, we won't have 
nothing.''
    Greg Anelon of Newhalen, the administrator of the Iliamna Lake 
regional clinic, testified at a Borough hearing that the area villages 
desperately needed a new ambulance, fire trucks, and EMS system. A tax 
on the Pebble mine could be ``a tool to finance [these] needs.'' To 
date, six tribal councils out of more than a dozen have voted in favor 
of the mine; several others are waiting for updated mine development 
plans before casting judgment for or against.
    Dean Stiffarm cautions against such optimism. ``In the beginning, 
we didn't see the whole picture, what the mine was going to do to our 
environment, our way of life.'' Now, when he meets with tribal 
representatives from Alaska who are grappling with how to reconcile 
their traditions with a bleak economic outlook, he says, ``I try to get 
them to look at the long term impact.''
    April Dembosky, a former Mother Jones editorial fellow, is a 
freelance writer in San Francisco.