[Senate Hearing 110-426]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-426
 
 HARDROCK MINING: ISSUES RELATING TO ABANDONED MINE LANDS AND URANIUM 
                                 MINING 

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   TO

RECEIVE TESTIMONY ON HARDROCK MINING: ISSUES RELATING TO ABANDONED MINE 
                        LANDS AND URANIUM MINING

                               __________

                             MARCH 12, 2008


                       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

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Bisson, Henri, Deputy Director, Bureau of Land Management, 
  Department of the Interior.....................................    27
Brancard, Bill, Director, Mining and Minerals Division, New 
  Mexico Energy, Minerals and Natural Resources Department, Santa 
  Fe, NM.........................................................    35
Cantwell, Hon. Maria, U.S. Senator From Washington...............    69
Domenici, Hon. Pete V., U.S. Senator From New Mexico.............     2
Ferguson, Tony L., Director of Minerals & Geology Management, 
  National Forest System, Forest Service.........................    31
Geiser, David W., Deputy Director for Legacy Management, 
  Department of Energy...........................................    95
Grumbles, Benjamin H., Assistant Administrator for Water, 
  Environmental Protection Agency................................    90
Miller, Charles L., Director, Office of Federal and State 
  Materials and Environmental Management Programs, Nuclear 
  Regulatory Commission..........................................   100
Nazzaro, Robin M., Director, Natural Resources and Environment, 
  Government Accountability Office...............................     9
Newton, Fletcher T., Executive Vice President, Corporate & 
  Strategic Affairs, Uranium One, Inc., Denver, CO...............   110
Salazar, Hon. Ken, U.S. Senator From Colorado....................    80
Shirley, Joe, Jr., President, The Navajo Nation, Window Rock, AZ.    85
Struhsacker, Debra, Northwest Mining Association, Reno, NV.......    40
Ulibarri, David, State Senator and Cibola County Manager, Grants, 
  NM.............................................................   104
Williams, Pat, Former Montana Congressman and Regional Director, 
  Western Progress, Missoula, MT.................................     5

                               APPENDIXES
                               Appendix I

Responses to additional questions................................   127

                              Appendix II

Additional material submitted for the record.....................   169


 HARDROCK MINING: ISSUES RELATING TO ABANDONED MINE LANDS AND URANIUM 
                                 MINING

                              ----------                              


                       WEDNESDAY, MARCH 12, 2008

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:15 p.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 get started? Thank 
you all for being here.
    Today's hearing is an oversight hearing on two of the 
subjects that relate to reform of the Mining Law of 1872. The 
first subject would be abandoned mine lands and the second, 
more specifically, uranium mining. Both of these are topics 
that are important in our consideration of how to reform the 
1872 Mining Law.
    First, abandoned hardrock mines are clearly a problem 
throughout the West. While estimates vary, I understand the 
General Accountability Office--I gather they now call 
themselves--estimates there are 161,000 abandoned hardrock mine 
sites in the West. These abandoned mines pose public health 
safety risks. They also degrade the environment and pose 
threats to the water resources in many areas.
    As we discuss the size and shape of legislation to reform 
the 1872 law, there appears to be a consensus that we should 
enact a robust hardrock abandoned mine land program. In 1977, 
Congress enacted an abandoned mine land program to address the 
serious problems related to coal mines. We are overdue to enact 
a similar program to deal with abandoned hardrock mines.
    Last Congress, we reauthorized the AML program for coal and 
made other reforms, including dedicated funding for that 
program through mandatory appropriations. I understand that 
approximately $300 million per year is dedicated to the coal 
AML program. My own view is that a hardrock AML program should 
be of a similar scope, and certainly the problem to be 
addressed is of a similar, if not a greater magnitude.
    We will also hear today about uranium mining and the 
programs for regulation of uranium processing and waste 
disposal. Currently uranium is subject to the Mining Law of 
1872. Claims for uranium have boomed in recent years with the 
increase in interest in nuclear power. Under existing law, 
claims for uranium can be located on public domain lands. 
Uranium can be mined with no royalty due to the Federal 
Government. However, I understand there is also a limited 
uranium leasing program administered by the Department of 
Energy under the Atomic Energy Act.
    I hope we can hear today from the witnesses as to why we 
have this dual system for uranium production. I also would like 
to hear what fiscal terms and environmental requirements 
currently apply to uranium mining and what changes, if any, are 
needed.
    Finally, as we fashion a hardrock AML program, I think it 
is important that we understand what authorities currently 
exist for the cleanup of abandoned uranium mines and processing 
facilities.
    I know the Navajo Nation has had longstanding concerns 
about uranium mining. I am pleased that President Shirley is 
here as a witness today. I also want to particularly welcome 
our Senator, Dave Ulibarri, from Grants, as well as the 
Director of the Mining and Minerals Division of the New Mexico 
Minerals and Natural Resources Department, Bill Brancard. I 
thank all of you for being here.
    Let me defer to Senator Domenici for his statement, and 
then I will just introduce all the witnesses and we will 
proceed with the testimony.

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

    Senator Domenici. Mr. Chairman, where is State Senator 
Ulibarri?
    The Chairman. He is right back there. He is on the second 
panel.
    Senator Domenici. Are you a Senator in New Mexico?
    Mr. Ulibarri. Yes, sir.
    Senator Domenici. Thank you for coming.
    Then I saw Shirley. President Shirley is right in the 
second row there.
    The Chairman. Yes. President Shirley is on the second panel 
as well.
    Senator Domenici. Mr. Chairman, thank you for holding this 
hearing. To our witnesses, thank you for being here to share 
your views and your expertise.
    Minerals are incredibly important to the United States: 
integral to the homes we live in, the buildings we work in, and 
the cars we drive. They are critical for everything from 
technological advances and medical breakthroughs, to our 
national security programs.
    In the years ahead, minerals will become even more 
important, particularly with regard to the energy mix. Solar 
cells are built with up to six different minerals. As much as 
75 pounds of copper will be needed for every hybrid vehicle put 
on the road. Even gold, which is often associated with jewelry, 
is increasingly essential to many of the products made by our 
electronics and aerospace industries.
    One of the matters we are here to discuss is uranium 
mining. Clearly, people have plenty of views on the subject, 
but uranium represents one of the best examples of the growing 
importance of a mineral. Uranium fuels our nuclear reactors, 
which already play a pivotal role in reducing our Nation's 
greenhouse gas emissions by producing huge amounts of emission-
free electricity for our homes, and businesses--over 20 percent 
of our Nation's requirement at this point.
    Anyone who is serious about climate change must appreciate 
the benefits of nuclear power. Almost every week, someone who 
has been significant in the green or environmental movement 
recognizes publicly the fact that nuclear is vital to our 
efforts to control climate change and its negative effects. 
Nuclear power is an essential tool for addressing global 
climate change, but we will not realize its potential without a 
stable supply of fuel for our reactors.
    In my view, the opponents of uranium mining are not 
applying facts about a modern industry. They ignore the 
significant advances that have been made in recent decades and 
our scientific understanding of the issues associated with 
nuclear power. Uranium mining is well beyond where it was just 
a few decades ago. As a result of our regulatory approach, it 
has been consistently and thoroughly updated to protect the 
environment and health of our people.
    We have a dozen witnesses here today, Mr. Chairman. That is 
a lot. The first panel, as you have indicated, will affirm the 
need to clean up the past problems and explain changes that 
have been made to prevent the creation of new abandoned mine 
sites. In the context of Mining Law reform, abandoned mine land 
reclamation is our most significant opportunity to improve the 
environment.
    The second panel, by discussing the environmental and human 
health protections that exist for uranium mining, will leave us 
with a higher level of comfort related to these activities. In 
short, much has changed since the cold war. Uranium mining in 
the future will be very different from uranium mining in the 
past.
    Both you and I worked on mining in the past because we had 
some of the residuals from that mining which were left in the 
lives of some Navajo Indian people. That does not mean that 
that has to occur again, and it is our job as responsible 
leaders to get the real facts before the Navajo people and not 
facts that come from the Cold War.
    Opponents of mining also overlook new concerns about the 
price and source of uranium. In the past 5 years, the price of 
uranium has increased from about $10 per pound to about $75, 
and risen as high as $135 a pound. I know it is, in fact, down 
from that level. But that is a rather prominent and significant 
increase in a short amount of time. We depend on foreign 
nations for about 80 percent of our uranium supply, higher even 
than the amount of oil that we import from abroad.
    Mr. Chairman, my office has received a great deal of 
correspondence from industry groups, including the Citizens' 
Alliance for Responsible Energy and the New Mexico Association 
of Commerce and Industry, that support renewed uranium mining. 
Resolutions have been passed by two counties in New Mexico, 
McKinley and Cibola, and one city, Grants, to highlight the 
wide range of benefits that uranium mining would bring. These 
include clean and affordable energy, increased tax revenues, 
and the creation of many local job opportunities.
    One of our witnesses, New Mexico State Senator Ulibarri, is 
from Cibola County. I expect that he will tell us more about 
these benefits. I ask that copies of each of these letters and 
resolutions* that I have just mentioned and the resolution be 
included in the record, Mr. Chairman.
---------------------------------------------------------------------------
    * See Appendix II for letters; resolutions have been retained in 
committee files.
---------------------------------------------------------------------------
    The Chairman. We will, obviously, include any of that in 
the record.
    Senator Domenici. My last two pages that I have not used of 
my statement, if you would make them a part of the record, as 
if read.
    The Chairman. We certainly will do that.
    [The prepared statement of Senator Domenici follows:]

    Prepared Statement of Hon. Pete V. Domenici, U.S. Senator From 
                               New Mexico
    Mr. Chairman, thank you for holding this hearing. To our witnesses, 
thank you for being here to share your views and expertise.
    Minerals are incredibly important to the United States--integral to 
the homes we live in, the buildings we work in, and the cars we drive. 
They are critical for everything from technological advances and 
medical breakthroughs to our national security apparatus.
    In the years ahead, minerals will become even more important, 
particularly with regard to our energy mix. Solar cells are built with 
up to 6 different minerals. As much as 75 pounds of copper will be 
needed for every hybrid vehicle put on the road. Even gold, which is 
often associated with jewelry, is increasingly essential to many of the 
products made by our electronics and aerospace industries.
    One of the matters we are here to discuss--uranium mining--
represents one of the best examples of the growing importance of 
minerals. Uranium fuels our nuclear reactors, which already play a 
pivotal role in reducing our nation's greenhouse gas emissions by 
producing huge amounts of emission-free electricity for our homes and 
businesses--over 20% of our nation's requirements.
    Anyone who is serious about climate change must appreciate the 
benefits of nuclear power. In turn, nuclear power will require us to be 
serious about uranium mining. Nuclear power is an essential tool for 
addressing global climate change. But we will not realize its potential 
without a stable supply of fuel for our reactors.
    In my view, the opponents of uranium mining are misguided. They 
ignore the significant advances that have been made in recent decades. 
Our scientific understanding of the issues associated with nuclear 
power and uranium mining is well beyond where it was a few decades ago. 
As a result, our regulatory approach has been consistently and 
thoroughly updated to protect the environment, human health, and 
safety.
    We have a dozen witnesses here today. The first panel will affirm 
the need to clean up past problems and explain changes that have been 
made to prevent the creation of new abandoned mine sites. In the 
context of mining law reform, abandoned mine land reclamation is our 
most significant opportunity to improve the environment.
    I believe the second panel, by discussing the environmental and 
human health protections that exist for uranium mining, will leave us 
with a higher level of comfort related to these activities. In short, 
much has changed since the Cold War. Uranium mining in the future will 
be very different from uranium mining in the past.
    Opponents of uranium mining also overlook new concerns about the 
price and source of uranium. In the past five years, the price of 
uranium has increased from about $10 per pound to about $75, and risen 
as high as $135 per pound. We depend on foreign nations for some 80 
percent of our uranium supply--higher even than the amount of oil that 
we import from abroad.
    Mr. Chairman, my office has received a great deal of correspondence 
from industry groups--including the Citizens' Alliance for Responsible 
Energy and the New Mexico Association of Commerce and Industry--that 
support renewed uranium mining. Resolutions have been passed by two 
counties in New Mexico, McKinley and Cibola, and one city, Grants, to 
highlight the wide range of benefits that uranium mining brings. These 
include clean and affordable energy, increased state tax revenues, and 
the creation of local job opportunities. One of our witnesses, New 
Mexico State Senator Ulibarri, is from Cibola County. I expect he will 
tell us more about these benefits, and I ask that copies of each of 
these letters and Resolutions be included in the Record of this 
hearing.
    While mining law reform presents an opportunity to focus on the 
future of mining in America, we cannot deny or overlook the problems 
that have arisen from it in the past. When it comes to abandoned mine 
lands, we know we have a considerable amount of work ahead of us. We 
know that work will not be finished overnight, but there is also 
evidence that these efforts are on the right track.
    Mining law reform offers a chance to create an efficient clean-up 
program for abandoned mines. But we will not find success unless we, as 
a Committee, face the realities of what can be passed by the full 
Senate. And we should remember that our ability to clean up abandoned 
mines--to have the funds available for reclamation--is contingent upon 
the existence of a healthy mining industry here at home.
    Mining law reform is important for our nation, but time is running 
out to achieve it in this Congress. This is our third oversight hearing 
this year. I thank you for holding it, Mr. Chairman, but I hope that 
our next hearing will be on a bipartisan piece of legislation capable 
of moving this effort closer to resolution.

    Senator Domenici. I yield at this point.
    The Chairman. Thank you very much.
    Let me just introduce this first panel Robin Nazzaro who is 
the Director of the Natural Resources and Environment part of 
the Government Accountability Office; Henri Bisson, who is 
Deputy Director of the BLM in the Department of the Interior; 
Tony Ferguson, who is the Director of Minerals and Geology in 
the Forest Service. Thank you very much for being here. Bill 
Brancard, who I introduced earlier, is the Director of Mining 
and Minerals in our New Mexico Energy, Minerals and Natural 
Resources Department. Pat Williams, a former Congressman, thank 
you for coming here. We greatly appreciate having you here. He 
is now Director of Western Progress in Missoula, Montana. Debra 
Struhsacker is with Northwest Mining Association in Reno, 
Nevada. Thank you for being here.
    I was told, Pat, that you have a plane you need to get on, 
so why don't you go first. Then we will go back and pick up the 
rest of the witnesses. If you need to leave at any certain 
time, we obviously understand and appreciate you coming. It is 
very nice to see you again.
    Mr. Williams. It is nice to see you again.
    The Chairman. I appreciate your being here.

   STATEMENT OF PAT WILLIAMS, FORMER MONTANA CONGRESSMAN AND 
       REGIONAL DIRECTOR, WESTERN PROGRESS, MISSOULA, MT

    Mr. Williams. Thank you very much, Mr. Chairman, and 
Senator Domenici, Senator Craig, Senator Tester.
    For 18 years, I was a member of the House and of your 
counterpart committee over there, Natural Resources, and during 
the latter half of my nine terms, I engaged in two efforts, to 
pass Mine Law reform legislation through our committee and 
through the full House and on to this honorable body. We had 
our successes over there, but as you know, neither the House 
nor Senate bills ever made it to the President's desk. We are 
hopeful this time, the third time, will be a charm.
    Most of us from the Rocky Mountain West who support reform 
in the Nation's critical mining industry do so primarily for 
two simple but important reasons: economic opportunity and 
landscape restoration, which are in fact the same thing.
    We understand, of course, that there are those who believe 
that support for mining reform is simply an old grudge against 
the industrial sins of the past two centuries. Others, it has 
been said, want to financially gouge an industry which, for the 
moment, has good income. For others still, reform is a matter 
of complying with the gains that technology has brought to 
mining during the past century and a quarter.
    Too much debate about Mine Law reform does focus on the 
past. I know that I need not urge you to focus on tomorrow 
instead. Many of us out West regard with genuine anticipation 
the potential for the restoration and renewal of our region's 
abused land and water, as well as needed stability for our too 
often boom and bust economy. I grew up in the copper mining 
city of Butte, Montana and worked in the mines. I came of age 
seeing both the good and the bad in the mining industry and the 
mining economy. I know, as do so many thousands of other 
westerners, both the high times, as well as the ruins.
    Senators, 7 members of your committee represent 6 of the 
States of the Rocky Mountain West. Within those 6 States, as 
the chairman noted, there are between 100,000 and 200,000 
abandoned mine sites. If one counts adits, both open and 
closed, or dumps, scablands, abandoned equipment, crumbling 
shacks, rusted metal, and far too much acid discharge into 40 
percent of the headwaters of the Rocky Mountains, one comes up 
with a figure of about 367,000 pieces of mining ruin, almost 
200,000 of it just abandoned holes in the ground.
    You remember that old adage, ``There never has been a mine 
without a good view?'' Miners follow the ore and those riches 
were and are in our most beautiful places. Too many of those 
landscapes are spoiled, too many of the streams polluted, still 
polluted, still spoiled a century after mining's western 
heyday.
    But those of us in the West are starting to understand that 
all of that ruin is pay dirt. Those abandoned mine sites offer 
more than just spoilage or danger, though dangerous they are. 
Properly considered, those sites present the West, your West, 
with a brand new economy, jobs, profits, revenues, salaries, 
benefits for your constituents, our citizens out in the 
Rockies.
    As you know, it is not often that in the history of any 
region, a wholly new economy awaits recognition and support. 
But we face just such an opportunity out West. Envision it: a 
new economy in restoring the waterways and the landscapes. Your 
Congressional Budget Office estimates that for each $1 million 
spent on mine cleanup, 14 to 33 new jobs are created. As with 
many first-rate private or public investments, the down payment 
is not inexpensive. In part, that is because restoration is 
labor-intensive. Men and women with shovels and heavy 
equipment, rakes, as well as road building and road removal 
equipment, tree planting, as well as trucks and loaders and low 
boy trailers. The economy will have a place for the laborer, 
but also for the engineer, hydrologist, biologist, and other 
scientists, fine paying jobs all. It sounds a lot like the 
``good old days,'' does it not?
    Important as they are, the hands-on restoration work itself 
and jobs funded through new mining royalties are just the 
beginning. Investment in restoration promises far greater 
economic rewards over the long term. Healing the scars of past 
mining will restore the usefulness and productivity of impaired 
land and waterways. It will turn degraded landscapes into areas 
of new opportunity and help more rural communities plug into 
the quality-of-life-driven economy of today's West.
    We are seeing a dramatic example of this near the city 
where I live now, Missoula, Montana. As we meet here today, 
there are scores of heavy equipment operators hard at work 
removing millions of cubic yards of mining waste from a place 
called Milltown Reservoir, restoring the natural confluence 
between the Clark Fork River and the Big Blackfoot, which is 
the river that runs through it in literature. Their work is far 
from over, but it has already triggered new investment and a 
wave of revitalization in the surrounding communities.
    Senators, we westerners believe there is an imperative 
here, both environmental as well as economic. So let us do it, 
and let us get today's mining companies to both help us while 
they help themselves. Forward-looking companies with wise 
management recognize the opportunity to become partners in the 
new West. Mining is wise. It too will recognize the opportunity 
to become a partner in cleaning up those old scabs and making 
pay dirt out of them.
    Surely the companies themselves will bid on and get 
contracts in the restoration economy, and that will mean profit 
for them, the use of skills of their workers, and income for 
rural communities is sorely needed. Undoubtedly, this same 
mining industry can contribute a relatively small portion of 
the Nation's restoration costs through the application of an 
appropriate royalty fee on the minerals extracted from the 
public's land.
    Mr. Chairman and Senators, there is a genuine opportunity 
here, and this committee can help lead us to it. Old abandoned, 
dangerous property needs restoration and reclamation. So do 
many old and unnecessary timber sale roads and dense stands of 
forest underbrush, as well as overgrown, fire-prone forests. We 
can get on with that restoration and we can start, many of us 
believe, in this committee with Mine Law reform.
    Thanks for having me.
    [The prepared statement of Mr. Williams follows:]

  Prepared Statement of Pat Williams, Former Montana Congressman and 
          Regional Director of Western Progress, Missoula, MO
    Chairman Bingaman, Senator Domenici, Committee members, I am Pat 
Williams from Montana. For 18 years I was a member of the U.S. House 
and your counterpart committee, Natural Resources. During the latter 
half of my nine-term congressional career, I engaged in two efforts to 
pass Mine Law Reform legislation through our committees and the full 
House and on to this honorable body. Both times we were successful. As 
many of you remember, however, neither the House nor the Senate bills 
made it to the President's desk.
    Most of us from the Rocky Mountain West who support reform in the 
nation's critical mining industry do so primarily for two simple but 
important reasons: economic opportunity and landscape restoration. 
Actually, those two reasons are one and the same.
    We understand there are those who believe that support for mining 
reform is simply an old grudge against the industrial sins of the past 
two centuries; others, it has been said, want to financially gouge an 
industry, which, for the moment, is making record profits. For others 
still, reform is a matter of complying with the gains that technology 
has brought to mining during the past 126 years.
    Too much debate about Mine Law Reform focuses on the past. I urge 
you to focus on the future. Many of us out West regard with genuine 
anticipation the potential for the restoration and renewal of our 
region's abused land and water as well as needed stability for our 
often boom-and-bust economy. I grew up in the copper mining city of 
Butte, Montana, and came of age seeing both the good and bad of the 
mining economy. I know, as do so many thousands of other westerners, 
both the high times and the ruins.
    Senators, seven members of your committee represent six of the 
states of the Rocky Mountain West. Within those six states are tens of 
thousands of abandoned mine sites: adits, both open and sealed; ore 
dumps; scablands; abandoned equipment; crumbling shacks, rusted metal; 
and far too much acid discharge and heavy metal pollution threatening 
our streams and ground water.
    Do you remember that old adage, ``There has never been a mine 
without a good view''? Miners follow the ore, and those riches were and 
are in our most beautiful places. Too many of those landscapes are 
spoiled, too many of the streams polluted--still spoiled and polluted a 
century after mining's western heydays.
    But, those of us in the West are starting to understand that it's 
all pay dirt. Those abandoned mine sites offer more than just danger. 
Although dangerous they are; properly considered, those sites present 
the West--our West--with a brand new economy: jobs, profits, revenue, 
salaries and benefits--for your constituents.
    As you know, it isn't often in the history of any region that a 
wholly new economy awaits recognition and support. But we face just 
such an opportunity. Envision it: a new economy in restoring the 
waterways and landscapes. Your Congressional Budget Office estimates 
that for each $1 million spent on a mine cleanup we will create between 
14 and 33 new jobs. As with many first-rate private or public 
investments, the down payment is not inexpensive. In part that's 
because restoration is labor intensive: men and women with shovels and 
heavy equipment: rakes as well as road building and road removal 
equipment, tree planting as well as trucks and loaders and low boy 
trailers. This economy will have a place for the laborer but also the 
engineers, hydrologists, biologist and other scientists--fine paying 
jobs all. It sounds like those ``good old days'' we enjoy reminiscing 
about out our way.
    Important as they are, the hands-on restoration work itself and 
jobs funded through new mining royalties are just the beginning. 
Investment in restoration promises far greater economic rewards over 
the long-term. Healing the scars of past mining will restore the 
usefulness and productivity of impaired land and watersheds. It will 
turn degraded landscapes into areas of new opportunity and help more 
rural communities plug into the quality-of-life-driven new economy of 
today's West. We're seeing a dramatic example of this near Missoula, 
Montana. Right now, scores of heavy equipment operators are hard at 
work removing millions of cubic yards of mining waste from Milltown 
Reservoir, restoring the natural confluence of the Blackfoot and Clark 
Fork rivers. Their work is far from over, but it's already triggered 
new investment and a wave of revitalization in the surrounding 
communities.
    Senators, we westerners believe there is an imperative here, both 
environmental and economic. Let's do it. And let's get today's mining 
companies to help both us and themselves. Forward-looking companies 
with wise management recognize the opportunity to become a partner in 
the new West. Certainly mining can and will recognize this moment.
    Surely the companies will bid on and get contracts in the 
restoration economy and that will mean profit for them, the use of the 
skills of their workers, and income for our rural communities. 
Undoubtedly this same mining industry can contribute a relatively small 
portion of the nation's restoration costs through the application of an 
appropriate royalty fee on the minerals extracted from the public's 
land.
    Mr. Chairman and Senators, there is a genuine opportunity here and 
this committee can lead us to it. Old abandoned, dangerous mining 
property needs restoration and reclamation; so do many old and 
unnecessary timber-sale roads and dense stands of forest underbrush, as 
well as overgrown, fire prone forests.
    Let's get on with it. Starting with Mine Law Reform.
    Thank you for having me.

    The Chairman. Thank you very much for your excellent 
testimony. Before we get to any questions, let me call on each 
of the other witnesses.
    Ms. Nazzaro, why do you not go right ahead and give us your 
testimony?

STATEMENT OF ROBIN M. NAZZARO, DIRECTOR, NATURAL RESOURCES AND 
         ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Nazzaro. Thank you, Mr. Chairman and members of the 
committee. I am pleased to be here today to discuss several 
aspects of the hardrock mining industry.
    Between fiscal years 1998 and 2007, the Bureau of Land 
Management, the Forest Service, the Environmental Protection 
Agency, and the Office of Surface Mining Reclamation and 
Enforcement spent at least $2.6 billion to reclaim abandoned 
hardrock mines. Of the 4 agencies, EPA has spent the most, 
about $2.2 billion primarily on non-Federal lands through its 
Superfund program. The Forest Service and BLM have reclaimed 
abandoned hardrock mine sites on lands they manage, spending 
about $200 million and $50 million, respectively. OSM provided 
grants, totaling about $200 million, to States and Indian 
tribes.
    Over the last 10 years, estimates of the number of 
abandoned hardrock mine sites have varied widely, in part, 
because there is generally no accepted definition for a 
hardrock mine site. Some States define an abandoned mine site 
as a mine opening or features, while others define a site as 
all associated mine openings, features, or structures at a 
particular location. BLM and the Forest Service have also had 
difficulty determining the number of abandoned hardrock mines 
on their lands and have no definitive estimates.
    Using a consistent definition that we provided, 12 western 
States and Alaska provided GAO estimates of abandoned hardrock 
mine sites in their States. From this data, we estimated a 
total of at least 161,000 abandoned hardrock mine sites on 
State, private, and Federal lands with at least 332,000 
features, such as open shafts or unstable or decayed mine 
structures that may pose physical safety hazards. There are 
also at least 33,000 sites that have degraded the environment 
by, for example, contaminating surface water or groundwater.
    As of November----
    Senator Domenici. How many was that?
    Ms. Nazzaro. It is 33,000.
    Senator Domenici. Over what area again?
    Ms. Nazzaro. Again, this was in the 12 western States and 
Alaska.
    As of November 2007, mine operators had provided financial 
assurances valued at approximately $982 million to guarantee 
reclamation costs for 1,463 hardrock operations on BLM lands. 
BLM also estimated that 52 mining operations have inadequate 
financial assurances that amount to about $28 million less than 
needed to fully recover the estimated reclamation costs. 
However, we determined that the financial assurances for these 
52 operations are actually $61 million less than needed to 
fully cover the estimated reclamation costs.
    The $33 million difference occurs because BLM calculated 
its shortfall by comparing the total value of financial 
assurances in place with the total estimated reclamation costs, 
offsetting the shortfalls in some operations with other 
operations. However, financial assurances do not work that way, 
and those that are greater than the amount required for an 
operation cannot be transferred to another operation that has a 
shortfall. BLM officials have taken steps to correct its 
calculations.
    Mr. Chairman, this concludes my prepared statement. I would 
be happy to answer any questions that you or members of the 
committee may have.
    [The prepared statement of Ms. Nazzaro follows:]

 Prepared Statement of Robin M. Nazzaro, Director Natural Resources & 
              Environment Government Accountability Office
                         why gao did this study
    The Mining Act of 1872 helped foster the development of the West by 
giving individuals exclusive rights to mine gold, silver, copper, and 
other hardrock minerals on federal lands. However, miners often 
abandoned mines, leaving behind structures, safety hazards, and 
contaminated land and water. Four federal agencies--the Department of 
the Interior's Bureau of Land Management (BLM) and Office of Surface 
Mining Reclamation and Enforcement (OSM), the Forest Service, and the 
Environmental Protection Agency (EPA)--fund the cleanup of some of 
these sites.
    To curb further growth in the number of abandoned hardrock mines on 
federal lands, in 1981 BLM began requiring mining operators to reclaim 
lands when their operations ceased. In 2001, BLM began requiring all 
operators to provide financial assurances to guarantee funding for 
reclamation costs if the operator did not complete the task as 
required.
    This testimony provides information on the (1) federal funds spent 
to clean up abandoned hardrock mine sites since 1998, (2) number of 
abandoned hardrock mine sites and hazards, and (3) value and coverage 
of financial assurances operators use to guarantee reclamation costs on 
BLM land. To address these issues, GAO, among other steps, asked 12 
western states and Alaska to provide information on the number of 
abandoned mine sites and associated features in their states using a 
consistent definition.
                             what gao found
    Between fiscal years 1998 and 2007, BLM, the Forest Service, EPA, 
and OSM spent at least $2.6 billion (in 2008 constant dollars) to 
reclaim abandoned hardrock mines. BLM and the Forest Service have 
reclaimed abandoned hardrock mine sites on the lands they manage; EPA 
funds the cleanup of these sites, primarily on nonfederal lands through 
its Superfund program; and OSM provides some grants to states and 
Indian tribes to clean up these sites on their lands. Of the four 
agencies, EPA has spent the most--about $2.2 billion (in 2008 constant 
dollars) for mine cleanups. BLM and the Forest Service spent about $259 
million (in 2008 constant dollars), and OSM awarded grants totaling 
about $198 million (in 2008 constant dollars) to support the cleanup of 
abandoned hardrock mines.
    Over the last 10 years, estimates of the number of abandoned 
hardrock mining sites in the 12 western states and Alaska have varied 
widely, in part because there is no generally accepted definition for a 
hardrock mine site. Using a consistent definition that GAO provided, 12 
western states and Alaska provided estimates of abandoned hardrock mine 
sites. On the basis of these data, GAO estimated a total of at least 
161,000 such sites in these states with at least 332,000 features that 
may pose physical safety hazards and at least 33,000 sites that have 
degraded the environment.
    According to BLM's information on financial assurances as reported 
in its November 2007 Bond Review Report, mine operators had provided 
financial assurances valued at approximately $982 million to guarantee 
reclamation costs for 1,463 hardrock operations on BLM land. The report 
also estimates that 52 mining operations have financial assurances that 
amount to about $28 million less than needed to fully cover estimated 
reclamation costs. However, GAO found that the financial assurances for 
these 52 operations are in fact about $61 million less than needed to 
fully cover estimated reclamation costs. The $33 million difference 
between GAO's estimated shortfall and BLM's occurs because BLM 
calculated its shortfall by comparing the total value of financial 
assurances in place with the total estimated reclamation costs. This 
calculation approach has the effect of offsetting the shortfalls in 
some operations with the financial assurances of other operations. 
However, financial assurances that are greater than the amount required 
for an operation cannot be transferred to another operation that has 
inadequate financial assurances. BLM officials agreed that it would be 
valuable for the Bond Review Report to report the dollar value of the 
difference between financial assurances in place and required for those 
operations where financial assurances are inadequate, and BLM has taken 
steps to correct this.
    GAO discussed the information in this testimony with officials from 
the four federal agencies, and they provided GAO with technical 
comments, which were incorporated as appropriate.
    Mr. Chairman and Members of the Committee: I am pleased to be here 
today to discuss several aspects of hardrock mining, including 
abandoned hardrock mining sites and financial assurances. We developed 
this information during the course of our ongoing review, which is 
being conducted at the request of this Committee, Senator Reid, and the 
Chairman of the House Committee on Natural Resources.
    As you know, the General Mining Act of 1872 encouraged the 
development of the West by allowing individuals to stake claims and 
obtain exclusive rights to the gold, silver, copper, and other valuable 
hardrock mineral deposits on land belonging to the United States. Since 
then, thousands of operators have extracted billions of dollars worth 
of hardrock minerals from land managed by the Department of the 
Interior's Bureau of Land Management (BLM) and the U.S. Department of 
Agriculture's Forest Service--the two principal agencies responsible 
for federal lands open for hardrock mining. However, some operators did 
not reclaim thousands of acres of federal land disturbed for 
exploration, mining, and mineral processing when their operations 
ceased. Some of these disturbed lands pose serious environmental and 
physical safety hazards. These hazards include environmental hazards 
such as toxic or acidic water that contaminates soil and groundwater or 
physical safety hazards such as open or concealed shafts, unstable or 
decayed mine structures, or explosives. Cleanup costs for these 
abandoned mines vary by type and size of the operation.\1\ For example, 
the cost of plugging holes is usually minimal, but reclamation costs 
for large mining operations can be in the tens of millions of dollars.
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    \1\ For purposes of this testimony, cleanup refers to the 
mitigation of environmental impacts at mine sites, such as contaminated 
water, and the reclamation of land disturbed by hardrock operations.
---------------------------------------------------------------------------
    Four federal agencies--BLM, the Forest Service, the Environmental 
Protection Agency (EPA), and the Department of the Interior's Office of 
Surface Mining Reclamation and Enforcement (OSM)--fund the cleanup and 
reclamation of some of these abandoned hardrock mine sites. BLM's and 
the Forest Service's Abandoned Mine Lands programs focus on the safety 
of their land by addressing physical and environmental hazards. EPA's 
funding of abandoned hardrock mine sites, under its Superfund Program, 
focuses on the cleanup and long-term health effects of air, ground, or 
water pollution by abandoned hardrock mine sites, and is generally for 
mines on nonfederal lands. Finally, OSM, under amendments to the 
Surface Mining Control and Reclamation Act (SMCRA) of 1977,\2\ can 
provide grants to fund the cleanup and reclamation of certain hardrock 
mining sites after a state certifies that it has cleaned up its 
abandoned coal mine sites and the Secretary of the Interior approves 
the certification or at the request of a state or an Indian tribe.
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    \2\ Pub. L. No. 95-87, as amended by Pub L. No. 101-5-8, Title VI, 
Sec.  6010(2), Nov. 5, 1990.
---------------------------------------------------------------------------
    Federal agencies, states, mining, and environmental organizations, 
and others have attempted to determine the total number of abandoned 
hardrock mines and the safety and environment hazards these mines pose. 
These estimates vary widely, and many of these abandoned hardrock mines 
present safety, health, and environmental hazards.
    To curb further growth in the number of abandoned hardrock mines, 
BLM issued regulations, effective in 1981, that required all mining 
operators to reclaim BLM land disturbed by hardrock mining.\3\ In 2001, 
BLM regulations began requiring all mining operators to provide 
financial assurances before beginning exploration or mining operations 
on BLM land.\4\ These financial assurances must cover all of the 
estimated reclamation costs for a given hardrock operation.\5\ Having 
adequate financial assurances to pay reclamation costs for BLM land 
disturbed by hardrock operations is critical to ensuring that the land 
is reclaimed if the mining operators fail to do so. In June 2005, we 
reported that some current hardrock operations on BLM land do not have 
financial assurances, and some have no or outdated reclamation plans 
and/or cost estimates on which the financial assurances should be 
based.\6\ In that report we--
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    \3\ An operator is a person who conducts operations in connection 
with exploration, mining, and processing hardrock minerals on federal 
lands.
    \4\ 43 C.F.R. Sec. 3809.
    \5\ BLM manages about 258 million acres, most of which are located 
in 12 western states, and Alaska. For simplicity in this testimony, we 
refer to BLM-managed land as BLM land.
    \6\ GAO, Hardrock Mining: BLM Needs to Better Manage Financial 
Assurances to Guarantee Coverage of Reclamation Costs, GAO-05-377 
(Washington, D.C.: June 20, 2005).

   concluded that BLM did not have an effective process and 
        critical management information needed for ensuring that 
        adequate financial assurances are actually in place, as 
        required by federal regulations and BLM guidance; and
   made recommendations to strengthen BLM's management of 
        financial assurances for hardrock operations on its lands.

    In response to those recommendations, BLM modified its computer 
system--LR2000--to generate the Bond Review Fiscal Report (the Bond 
Review Report). BLM uses this report to determine if adequate financial 
assurances are in place for mining operations on its lands. BLM also 
requires its state directors to annually review the Bond Review Report 
to determine if all reclamation cost estimates are adequate, take 
action to address inadequacies, and certify that the financial 
assurances are adequate.
    In contrast to BLM, the Forest Service--the other federal agency 
principally responsible for hardrock mining operations on federal 
land--does not have readily available information on the financial 
assurances in place for hardrock operations on its lands. Although the 
Forest Service's regulations do not require financial assurances for 
all operations, the Forest Service's policy is to require them.
    In this context, my testimony today, as requested, discusses the 
(1) federal funds spent to clean up abandoned hardrock mine sites since 
1998, (2) number of abandoned hardrock mine sites and the number of 
associated hazards, and (3) value and coverage of the financial 
assurances operators use to guarantee reclamation costs on BLM land.
    To address these objectives, we interviewed staff at BLM, the 
Forest Service, EPA, and OSM; examined agency documents and data; and 
reviewed relevant legislation and regulations. In addition, for the 
first objective, we obtained federal expenditure data from these four 
agencies for cleaning up and reclaiming abandoned hardrock mine sites 
from fiscal years 1998 through 2007. We adjusted the expenditure data 
to 2008 constant dollars. For the second objective, we asked 12 western 
states and Alaska--which have significant numbers of abandoned hardrock 
mining operations--to determine the number of these mine sites in their 
states.\7\ We asked the states to use a consistent definition, which we 
provided, in estimating the number of abandoned mine sites and 
associated features that pose a significant hazard to public health and 
safety and the number of sites that cause environmental degradation. We 
defined an abandoned hardrock mine site as all associated facilities, 
structures, improvements, and disturbances at a distinct location 
associated with activities to support a past operation of minerals 
locatable under the general mining laws. We specified that states 
should only include hardrock (also known as locatable), non-coal sites 
in this estimate. From these data, we estimated the number of abandoned 
hardrock mine sites, the number of features that pose physical safety 
hazards, and the number of sites with environmental hazards in the 12 
western states and Alaska. We also summarized selected prior survey 
efforts by federal agencies and organizations to document differences 
in estimates, definitions, and methodologies. For the third objective, 
we reviewed BLM's Bond Review Report to determine the value and 
coverage of financial assurances in place to guarantee coverage of 
reclamation costs. This report provides information on financial 
assurances for 11 western states.\8\ This Bond Review Report is 
generated from BLM's automated information system--LR 2000. Although 
the LR2000 data are of undetermined reliability, our limited assessment 
of these data indicates that they are appropriate as used and presented 
in this testimony, and we do not base any conclusions or 
recommendations on them.
---------------------------------------------------------------------------
    \7\ These states were Arizona, California, Colorado, Idaho, 
Montana, Nevada, New Mexico, Oregon, South Dakota, Utah, Washington, 
and Wyoming.
    \8\ These states were Arizona, California, Colorado, Idaho, 
Montana, New Mexico, Nevada, Oregon, Utah, Washington, and Wyoming.
---------------------------------------------------------------------------
    We conducted this performance audit from November 2007 through 
March 2008, in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. See 
appendix I for more detailed information on our scope and methodology.
    In summary:

   The four federal agencies we examined--BLM, the Forest 
        Service, EPA, and OSM--spent at least $2.6 billion (in 2008 
        constant dollars) between fiscal years 1998 and 2007 to clean 
        up abandoned hardrock mines. BLM and the Forest Service spent a 
        total of about $259 million (in 2008 constant dollars) to fund 
        the cleanup of abandoned sites on the lands they manage. EPA 
        spent the most of the four agencies--about $2.2 billion (in 
        2008 constant dollars) to fund the cleanup of abandoned mine 
        sites, primarily on nonfederal land through its Superfund 
        program, and OSM provided grants to states and Indian tribes 
        totaling about $198 million (in 2008 constant dollars) to 
        support cleanups of abandoned hardrock mines.
   According to several studies we reviewed that were conducted 
        over the last 10 years, estimates of the number of abandoned 
        hardrock mine sites in the 12 western states and Alaska vary 
        widely, in part because there is no generally accepted 
        definition for a hardrock mine site and the studies rely on the 
        different definitions the states used. Furthermore, BLM's and 
        the Forest Service's estimate of 100,000 abandoned hardrock 
        mines on their lands is problematic because they included non-
        hardrock mines and mines that may not be on their lands. Using 
        a consistent definition that we provided, the 12 western states 
        and Alaska estimated the number of hardrock mine sites in their 
        states and from this information we estimated a total of at 
        least 161,000 abandoned hardrock mine sites in these states on 
        state, private, or federal lands. These sites have at least 
        332,000 features that may pose physical safety hazards, such as 
        open shafts or unstable or decayed mine structures. The states 
        also estimated that at least 33,000 sites have degraded the 
        environment by, for example, contaminating surface water and 
        groundwater.
   As of November 2007, mine operators had provided financial 
        assurances valued at approximately $982 million to guarantee 
        reclamation costs for 1,463 hardrock operations on BLM land in 
        11 western states, according to BLM's Bond Review Report. The 
        report also estimates that 52 mining operations have inadequate 
        financial assurances amounting to about $28 million less than 
        needed to fully cover estimated reclamation costs. However, we 
        determined that the financial assurances for the 52 operations 
        are actually about $61 million less than needed to fully cover 
        estimated reclamation costs. The $33 million difference between 
        our estimated shortfall and BLM's occurs because BLM calculated 
        its shortfall by comparing the total value of financial 
        assurances in place with the total estimated reclamation costs. 
        This calculation approach has the effect of offsetting the 
        shortfalls in some operations with the financial assurances of 
        other operations. However, financial assurances that are 
        greater than the amount required for an operation cannot be 
        transferred to another operation that has inadequate financial 
        assurances. BLM officials agreed that it would be valuable for 
        the Bond Review Report to report the dollar value of the 
        difference between financial assurances in place and required 
        for those operations where financial assurances are inadequate, 
        and BLM has taken steps to modify LR2000. We discussed the 
        information in this testimony with officials from the four 
        federal agencies, and they provided us with technical comments, 
        which we incorporated as appropriate.
                               background
    Historically, the mining of hardrock minerals, such as gold, lead, 
copper, silver, and uranium, was an economic incentive for exploring 
and settling the American West. However, when the ore was depleted, 
miners often left behind a legacy of abandoned mines, structures, 
safety hazards, and contaminated land and water. Even in more recent 
times, after cleanup became mandatory, many parties responsible for 
hardrock mining sites have been liquidated through bankruptcy or 
otherwise dissolved.\9\ Under these circumstances, some hardrock mining 
companies have left it to the taxpayer to clean up the mining site. 
BLM, the Forest Service, EPA, and OSM play a role in cleaning up these 
abandoned mining sites and ensuring that currently operating sites are 
reclaimed after operations have ceased.
---------------------------------------------------------------------------
    \9\ GAO, Environmental Liabilities. Hardrock Mining Cleanup 
Obligations, GAO-06-884T (Washington, D.C.: June 14, 2006); GAO-05-377.
---------------------------------------------------------------------------
    BLM and the Forest Service are responsible for managing more than 
450 million acres of public lands in their care, including land 
disturbed and abandoned by past hardrock mining activities. BLM manages 
about 258 million acres in 12 western states, including Alaska. The 
Forest Service manages about 193 million acres across the nation. In 
1997, BLM and the Forest Service each launched a national Abandoned 
Mine Lands Program to remedy the physical and environmental hazards at 
thousands of abandoned hardrock mines on the federal lands they manage. 
According to a September 2007 report by these two agencies, they had 
inventoried thousands of abandoned sites and, at many of them, had 
taken actions to clean up hazardous substances and mitigate safety 
hazards.\10\
---------------------------------------------------------------------------
    \10\ BLM and Forest Service, Abandoned Mine Lands. A Decade of 
Progress Reclaiming Hardrock Mines (September 2007).
---------------------------------------------------------------------------
    BLM and the Forest Service are also responsible for managing and 
overseeing current hardrock operations on their lands, including the 
mining operators' reclamation of the land disturbed by hardrock mining. 
Although reclamation can vary by location, it generally involves such 
activities as regrading and reshaping the disturbed land to conform 
with adjacent land forms and to minimize erosion; removing or 
stabilizing buildings and other structures to reduce safety risks; 
removing mining roads to prevent damage from future traffic; and 
establishing self-sustaining vegetation. One of the agencies' key 
responsibilities is to ensure that adequate financial assurances, based 
on sound reclamation plans and cost estimates, are in place to 
guarantee reclamation costs.\11\ If a mining operator fails to complete 
required reclamation,
---------------------------------------------------------------------------
    \11\ 43 C.F.R. 3809 and 36 C.F.R. Sec. 228, Subpart A.
---------------------------------------------------------------------------
    BLM or the Forest Service can take steps to obtain funds from the 
financial assurance provider to complete the reclamation. BLM requires 
financial assurances for both notice-level hardrock mining operations--
those disturbing 5 acres of land or less--and plan-level hardrock 
mining operations--those disturbing over 5 acres of land and those in 
certain designated areas, such as the national wild and scenic rivers 
system. For hardrock operations on Forest Service lands, agency 
regulations require reclamation of sites after operations cease, but do 
not require financial assurances for the reclamation. However, 
according to a Forest Service official, if the proposed hardrock 
operation is likely to cause a significant disturbance, the Forest 
Service requires financial assurances.
    Both agencies allow several types of financial assurances to 
guarantee estimated reclamation costs for hardrock operations on their 
lands. According to regulations and agency officials, BLM and the 
Forest Service allow cash, letters of credit, certificates of deposit 
or savings accounts, and negotiable U.S. securities and bonds in a 
trust account. BLM also allows surety bonds, state bond pools, trust 
funds, and property.
    Neither agency centrally tracks all the types of financial 
assurances in place for hardrock operations on its lands. BLM's LR2000 
tracks most of the types, and BLM is updating the database to include 
more types of financial assurances, but data are incomplete for the 
types of assurances currently in the system. The Forest Service does 
not have readily available information on the types of financial 
assurances in use, but it is developing a database to collect this and 
other information on hardrock operations by late summer 2008, according 
to Forest Service officials.
    EPA administers the Superfund program, which was established under 
the Comprehensive Environmental Response, Compensation, and Liability 
Act of 1980 to address the threats that contaminated waste sites, 
including those on nonfederal lands, pose to human health and the 
environment.\12\ The act also requires that the parties statutorily 
responsible for pollution bear the cost of cleaning up contaminated 
sites, including abandoned hardrock mining operations. Some 
contaminated hardrock mine sites have been listed on Superfund's 
National Priorities List--a list of seriously contaminated sites. 
Typically, these sites are expensive to clean up and the cleanup can 
take many years. According to EPA's Office of Inspector General in 
2004, 63 hardrock mining sites were on the National Priorities List and 
another 93 sites had the potential to be added to the list.\13\ 
Regarding financial assurances, EPA has statutory authority under the 
Superfund program to require businesses handling hazardous substances 
on nonfederal lands to provide financial assurances,\14\ and according 
to agency officials, is currently exploring options for implementing 
this authority.
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    \12\ 42 USC Sec. Sec.  9601-9675.
    \13\ EPA, Office of Inspector General, Nationwide Identification of 
Hardrock Mining Sites, 2004-P-00005 (Washington, D.C: Mar. 31, 2004).
    \14\ GAO-06-884T.
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    OSM's Abandoned Mine Land Program primarily focuses on cleaning up 
abandoned coal mine sites. However, OSM, under amendments to the 
Surface Mining Control and Reclamation Act (SMCRA) of 1977, can provide 
grants to fund the cleanup and reclamation of certain hardrock mining 
sites either (1) after a state certifies that it has cleaned up its 
abandoned coal mine sites and the Secretary of the Interior approves 
the certification, or (2) at the request of a state or Indian tribe to 
address problems that could endanger life and property, constitute a 
hazard to the public and safety, or degrade the environment, and the 
Secretary of the Interior grants the request. OSM has provided more 
than $3 billion to clean up dangerous abandoned mine sites. Its 
Abandoned Mine Land Program has eliminated safety and environmental 
hazards on 314,108 acres since 1977, including all high-priority coal 
problems and non-coal problems in 27 states and on the lands of three 
Indian tribes.\15\
---------------------------------------------------------------------------
    \15\ U.S. Department of the Interior, Office of Surface Mining 
Reclamation and Enforcement, 2006 Report to the President and Congress 
(Washington, D.C.: Oct. 1, 2006).
---------------------------------------------------------------------------
federal agencies have spent at least $2.6 billion to clean up abandoned 
                     hardrock mine sites since 1998
    Between fiscal years 1998 and 2007, the four federal agencies we 
examined--BLM, the Forest Service, EPA, and OSM--spent at least $2.6 
billion to reclaim abandoned hardrock mines on federal, state, private, 
and Indian lands. EPA has spent the most--$2.2 billion.\16\ Although 
the amount each agency spent annually varied considerably, the median 
amount spent for the public lands by BLM and the Forest Service was 
about $5 million and about $21 million, respectively. EPA spent 
substantially more--a median of about $221 million annually--to clean 
up mines that are generally on nonfederal lands. Finally, OSM provided 
grants with an annual median value of about $18 million to states and 
Indian tribes through its SMCRA program for hardrock mine cleanups. 
Table 1 summarizes information on expenditures and hardrock mine 
cleanup activities at BLM, the Forest Service, EPA, and OSM. See 
appendix II for more detailed information on agency expenditures by 
fiscal year.
---------------------------------------------------------------------------
    \16\ Unless otherwise stated all dollars in this section are in 
2008 constant dollars.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>]

    According to available data, as of September 30, 2007, BLM had 
spent the largest share of its funds in Montana--about $18 million; EPA 
had spent the largest share of its funds in Idaho--about $352 million; 
and Wyoming was the largest recipient of OSM grants for cleaning up 
hardrock mine sites--receiving about $99 million. Wyoming was eligible 
for OSM grants after OSM's acceptance of the state's certification that 
it had completed its cleanup of coal mine sites. The Forest Service was 
unable to provide this information by state. See appendix II for BLM, 
EPA, and OSM total funding by state.
 prior state estimates of the number of abandoned hardrock mine sites 
vary widely, but our data show at least 161,000 sites, with many posing 
                                hazards
    Previous state estimates of the number of abandoned hardrock mine 
sites vary widely in the six studies that we reviewed because, in part, 
there is no generally accepted definition for a hardrock mine site and 
the studies rely on the states' different definitions of hardrock mine 
sites. In addition, we found problems with BLM's and the Forest 
Service's estimate of 100,000 abandoned hardrock mines on their lands 
because the agencies included non-hardrock mines and mines that may not 
be on their lands. Using our consistent definition, 12 western states 
and Alaska estimated a total of at least 161,000 abandoned hardrock 
mine sites in their states on state, private, or federal lands.
 six studies identified a range of estimated abandoned hardrock mining 
                                 sites
    We identified six studies conducted in the past 10 years that 
estimated the number of abandoned hardrock mine sites in the 12 western 
states and Alaska.\17\ The estimates in each of these studies were 
developed by asking states to provide data on the number of abandoned 
hardrock mine sites in their states, generally without regard to 
whether the mine was on federal, state, Indian, or private lands. The 
estimates for a particular state do, in some cases, vary widely from 
study to study. For example, for Nevada, the Western Governors' 
Association/National Mining Association estimated that the state had 
50,000 abandoned hardrock mine sites in 1998, while in 2004 EPA 
estimated that the state had between 200,000 to 500,000 abandoned 
sites. The estimates also reflect the different definitions that states 
used for abandoned hardrock mining sites for a given study. For 
example, we found that, within the same study, some states define an 
abandoned mine site as a mine opening or feature, while others define a 
site as all associated mine openings, features, or structures at a 
distinct location. As a result, an abandoned hardrock operation with 
two mine openings, a pit, and a tailings pile could be listed as one 
site or four sites, depending on the definitions and methodologies 
used. See appendix III for more information on estimates from these 
studies.
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    \17\ The six studies are (1) Western Governors' Association and 
National Mining Association, Cleaning up Abandoned Mines: A Western 
Partnership, 1998; (2) Interstate Mining Compact Commission, State 
NonCoal AML Inventory, 2001; (3) Interstate Mining Compact Commission; 
NonCoal Minerals Survey and Report (expected issuance Spring 2008); (4) 
Mineral Policy Center, Cleaning Up Western Watersheds, 2003; (5) 
Earthworks fact sheets on hardrock mining from Earthworks Web site last 
visited on March 4, 2008 (www.earthworksaction.org/resources.cfm.); and 
(6) EPA, Reference Notebook, September 2004.
---------------------------------------------------------------------------
    In addition, some regional or state estimates included coal and 
other nonhardrock mineral sites because it was (1) not important to 
distinguish between the type of minerals mined or (2) difficult to 
determine what mineral had been mined. In 2004, EPA commented on this 
problem, noting, ``it is important to keep in mind that a universally 
applied definition of an [abandoned mine land] does not exist at 
present . . . therefore, the various agencies and state-developed . . . 
inventories presented may possess inconsistencies and are not intended 
for exact quantitative comparisons.''
 blm and forest service estimates of abandoned hardrock mines include 
      non-hardrock mines and mines that may not be on their lands
    BLM and the Forest Service have also had difficulty determining the 
number of abandoned hardrock mines on their lands and have no 
definitive estimates. In September 2007, the agencies reported that 
there were an estimated 100,000 abandoned hardrock mine sites,\18\ but 
we found problems with this estimate. For example, the Forest Service 
had reported that it had approximately 39,000 abandoned hardrock mine 
sites on its lands. However, we found that this estimate includes a 
substantial number of non-hardrock mines, such as coal mines, and sites 
that are not on Forest Service land. At our request, in November 2007, 
the Forest Service provided a revised estimate of the number of 
abandoned hardrock mine sites on its lands, excluding coal or other 
non-hardrock sites. According to this estimate, the Forest Service may 
have about 29,000 abandoned hardrock mine sites on its lands. That 
said, we still have concerns about the accuracy of the Forest Service's 
recent estimate because it includes a large number of sites on lands 
with ``undetermined'' ownership, and therefore these sites may not all 
be on Forest Service lands.
---------------------------------------------------------------------------
    \18\ BLM and Forest Service, Abandoned Mine Lands: A Decade of 
Progress Reclaiming Hardrock Mines (September 2007).
---------------------------------------------------------------------------
    BLM has also acknowledged that its estimate of abandoned hardrock 
mine sites on its lands may not be accurate because it includes sites 
on lands that are of unknown or mixed ownership (state, private, and 
federal) and a few coal sites. In addition, BLM officials said that the 
agency's field offices used a variety of methods to identify sites in 
the early 1980s, and the extent and quality of these efforts varied 
greatly. For example, they estimated that only about 20 percent of BLM 
land has been surveyed in Arizona. Furthermore, BLM officials said that 
the agency focuses more on identifying sites closer to human habitation 
and recreational areas than on identifying more remote sites, such as 
in the desert. Table 2 shows the Forest Service's and BLM's most recent 
available estimates of abandoned mine sites on their lands.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

using a consistent definition, gao estimated at least 161,000 abandoned 
                                 sites
    To estimate abandoned hardrock mining sites in the 12 western 
states and Alaska, we developed a standard definition for these mine 
sites. In developing this definition, we consulted with mining experts 
at the National Association of Abandoned Mine Land Programs; the 
Interstate Mining Compact Commission; and the Colorado Department of 
Natural Abandoned Sites Resources, Division of Reclamation, Mining and 
Safety, Office of Active and Inactive Mines. We defined an abandoned 
hardrock mine site as a site that includes all associated facilities, 
structures, improvements, and disturbances at a distinct location 
associated with activities to support a past operation, including 
prospecting, exploration, uncovering, drilling, discovery, mine 
development, excavation, extraction, or processing of mineral deposits 
locatable under the general mining laws. We also asked the states to 
estimate the number of features at these sites that pose physical 
safety hazards and the number of sites with environmental degradation. 
See appendix I for the complete definition we used when asking states 
for their estimates.
    Using this definition, states reported to us the number of 
abandoned sites in their states, and we estimated that there are at 
least 161,000 abandoned hardrock mine sites in their states. At these 
sites, on the basis of state data, we estimated that at least 332,000 
features may pose physical safety hazards, such as open shafts or 
unstable or decayed mine structures; and at least 33,000 sites have 
degraded the environment, by, for example, contaminating surface water 
and groundwater or leaving arsenic-contaminated tailings piles. Table 3 
shows our estimate of the number of abandoned hardrock mine sites in 
the 12 western states and Alaska, the number of features that pose 
significant public health and safety hazards, and the number of sites 
with environmental degradation.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    While states used our definition to provide data on the estimated 
number of mine sites and features, these data have two key limitations. 
First, the methods and sources used to identify and confirm abandoned 
sites and hazardous features vary substantially by state. For example, 
some states, such as Colorado and Wyoming, indicated they had done 
extensive and rigorous fieldwork to identify sites and were reasonably 
confident that their estimates were accurate. Other states, however, 
relied less on rigorous fieldwork, and more on unverified, readily 
available records or data sources, such as published or unpublished 
geological reports, mining claim maps, and the Mineral Availability 
System/Mineral Industry Locator System (MAS/MILS),\19\ which states 
indicated were typically incomplete. Several of those states that 
relied primarily on literature used the literature only as a starting 
point, and then estimated the number of features on the basis of 
experience. For example, while one state estimated that there were 
about three times the number of public safety hazards as identified by 
the literature, another state estimated that there were four times as 
many, and a third state estimated that there were up to six times as 
many.
---------------------------------------------------------------------------
    \19\ The MAS/MILS database was established to provide comprehensive 
information for known mining operations, mineral deposits/occurrences, 
and processing plants. The original data were collected on a state-by-
state basis from the mid-1970s to 1982. The nonconfidential portions of 
the MAS/MILS database were compiled by the U.S. Department of the 
Interior, Bureau of Mines, but the accuracy of the database varies by 
location and mineral.
---------------------------------------------------------------------------
    Second, because states have markedly different data systems and 
requirements for recording data on abandoned mines, some states were 
less readily able to provide the data directly from their systems 
without manipulation or estimation. For example, New Mexico estimated 
the number of abandoned mine sites from the data it maintains on 
hazardous features, and Nevada estimated the number of abandoned 
hardrock mine sites from the data it maintains on the number of mining 
districts in the state.
   blm estimates that operators have provided about $982 million in 
   financial assurances--about $61 million less than needed to cover 
                      estimated reclamation costs
    As of November 2007, hardrock mining operators had provided 
financial assurances valued at approximately $982 million to guarantee 
the reclamation costs for 1,463 hardrock mining operations on BLM lands 
in 11 western states, according to BLM's Bond Review Report. The report 
also indicates that 52 of the 1,463 hardrock mining operations had 
inadequate financial assurances--about $28 million less than needed to 
fully cover estimated reclamation costs. We determined, however, that 
the financial assurances for these 52 operations should be more 
accurately reported as about $61 million less than needed to fully 
cover estimated reclamation costs. Table 4 shows total hardrock mining 
operations by state, the number of operations with inadequate financial 
assurances, the financial assurances required, BLM's calculation of the 
shortfall in assurances, and our estimate of the shortfall, as of 
November 2007.

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    The $33 million difference between our estimated shortfall of 
nearly $61 million and BLM's estimated shortfall of nearly $28 million 
occurs because BLM calculated its shortfall by comparing the total 
value of financial assurances in place with the total estimated 
reclamation costs. This calculation approach has the effect of 
offsetting the shortfalls in some operations with the financial 
assurances of other operations. However, the financial assurances that 
are greater than the amount required for an operation cannot be 
transferred to an operation with inadequate financial assurances. In 
contrast, we totaled the difference between the financial assurance in 
place for an operation and the financial assurances needed for that 
operation to determine the actual shortfall for each of the 52 
operations for which BLM had determined that financial assurances were 
inadequate.
    BLM's approach to determining the adequacy of financial assurances 
is not useful because it does not clearly lay out the extent to which 
financial assurances are inadequate. For example, in California, BLM 
reports that, statewide, the financial assurances in place are $1.5 
million greater than required, suggesting reclamation costs are being 
more than fully covered. However, according to our analysis of only 
those California operations with inadequate financial assurances, the 
financial assurances in place are nearly $440,000 less than needed to 
fully cover reclamations costs. BLM officials agreed that it would be 
valuable for the Bond Review Report to report the dollar value of the 
difference between financial assurances in place and required for those 
operations where financial assurances are inadequate and have taken 
steps to modify LR2000.
    BLM officials said that financial assurances may appear inadequate 
in the Bond Review Report when--

   expansions or other changes in the operation have occurred, 
        thus requiring an increase in the amount of the financial 
        assurance;
   BLM's estimate of reclamation costs has increased and there 
        is a delay between when BLM enters the new estimate into LR2000 
        and when the operator provides the additional bond amount; and
   BLM has delayed updating its case records in LR2000.

    Conversely, hardrock mining operators may have financial assurances 
greater than required for a number of reasons; for example, they may 
increase their financial assurances because they anticipate expanding 
their hardrock operations.
    In addition, according to the Bond Review Report, there are about 
2.4 times as many notice-level operations--operations that cause 
surface disturbance on 5 acres or less--as there are plan-level 
operations on BLM land--operations that disturb more than 5 acres 
(1,033 notice-level operations and 430 plan-level operations). However, 
about 99 percent of the value of financial assurances is for plan-level 
operations, while 1 percent of the value is for notice-level 
operations. While financial assurances were inadequate for both notice-
and plan-level operations, a greater percentage of plan-level 
operations had inadequate financial assurances than did notice-level 
operations--6.7 percent and 2.2 percent, respectively. Finally, over 
one-third of the number of all hardrock operations and about 84 percent 
of the value of all financial assurances are for hardrock mining 
operations located in Nevada. See appendix IV for further details on 
the number of plan-and notice-level operations in each state.
    Mr. Chairman, this concludes my prepared statement. I would be 
happy to respond to any questions that you or Members of the Committee 
may have.
             Appendix I: Objectives, Scope, and Methodology
    To determine the (1) federal funds spent to clean up abandoned 
hardrock mine sites since 1998, (2) number of abandoned hardrock mine 
sites and the number of associated hazards, and (3) value and coverage 
of the financial assurances operators use to guarantee reclamation 
costs on the Department of the Interior's Bureau of Land Management 
(BLM) land, we interviewed officials at the BLM, the U.S. Department of 
Agriculture's Forest Service, the Environmental Protection Agency 
(EPA), and the Department of the Interior's Office of Surface Mining 
Reclamation and Enforcement (OSM); examined agency documents and data; 
and reviewed relevant legislation and regulations.
    Specifically, to answer our first objective, we interviewed 
officials involved with the abandoned mine cleanup programs at BLM, the 
Forest Service, EPA, and OSM to request expenditure data, to understand 
how they tracked and monitored expenditures to clean up abandoned 
hardrock mines, and to request and ensure that we would receive the 
data we needed. We reviewed agency documents, budget justification 
reports and reports detailing agencies' cleanup efforts and programs. 
We obtained data on total expenditures for cleaning up and reclaiming 
abandoned hardrock mine sites that were compiled from BLM's Financial 
Accounting and Reporting System, EPA's Superfund eFacts Database, OSM's 
Abandoned Mine Land Inventory System, and Forest Service officials. BLM 
officials told us that in addition to the expenditure data they 
provided, the agency receives funding allocations from other sources, 
such as the Department of the Interior's Central Hazardous Materials 
fund. Since BLM does not track the expenditures from these other 
sources, we were unable to provide this information.
    Because the four agencies' abandoned hardrock mine programs started 
in different years, start years for expenditure data vary. 
Specifically, BLM's data were for fiscal years 1997 through 2007; 
Forest Service's data, for fiscal years 1996 through 2007; EPA's data, 
for fiscal years 1988 through 2007; and OSM's data, for fiscal years 
1993 to 2007. We performed a limited reliability assessment of the 
expenditure data and determined that we would limit our year-by-year 
presentation of expenditure data to the past 10 years (1998 through 
2007) because of (1) variability in the program start year across the 
agencies, (2) inconsistencies across the agencies in their methods for 
tracking and reporting the data, and (3) some data recording errors in 
early years at some agencies. We presented these data in 2008 constant 
dollars.
    Because of limited time in preparing this testimony, we were unable 
to fully assess the reliability of the agencies' expenditure data and 
the data are therefore of undetermined reliability. However, we 
concluded that the data are appropriate as used and presented to meet 
our objectives because we (1) attribute the data to what agencies 
report as their expenditures, (2) present rounded data to minimize the 
perception of precision, and (3) do not base any conclusions or 
recommendations on the data.
    To answer our second objective, we summarized selected prior survey 
efforts by federal agencies and organizations to document differences 
in estimates, definitions, and methodologies.\1\ We also consulted 
experts in mining and abandoned mine land programs at the National 
Association of Abandoned Mine Land Programs; the Interstate Mining 
Compact Commission; and the Colorado State Department of Natural 
Resources, Division of Reclamation, Mining and Safety, Office of Active 
and Inactive Mines to develop a standard definition for estimating the 
number of abandoned hardrock mine sites, features, and sites with 
environmental degradation. Other efforts to assess the magnitude of the 
abandoned mine situation have acknowledged limitations in their efforts 
to develop a nationwide estimate because of inconsistencies in states' 
definitions and methods for estimating abandoned sites. Consequently, 
through iterative consultation with state and other mining experts, the 
definition we ultimately chose was clear and incorporated enough 
flexibility for all major hardrock mining states--the 12 western states 
and Alaska--to reasonably comply with our request, despite differences 
in how the states might define and maintain abandoned mine data.\2\ We 
then provided states with an edit-controlled data collection instrument 
that requested data specifically tailored to our definitions and 
methods. Our definition of abandoned hardrock mine sites--
---------------------------------------------------------------------------
    \1\ These studies were: (1) Western Governors' Association and 
National Mining Association, Cleaning up Abandoned Mines: A Western 
Partnership, 1998; (2) Interstate Mining Compact Commission, State 
NonCoal AML Inventory, 2001; (3) Interstate Mining Compact Commission; 
Noncoal Minerals Survey and Report, 2007; (4) Mineral Policy Center, 
Cleaning Up Western Watersheds, 2003; (5) Earthworks fact sheets on 
hardrock mining from Earthworks Web site last visited on March 4, 2008 
(www.earthworksaction.org/resources.cfm.); and (6) EPA, Reference 
Notebook, September 2004.
    \2\ These states were Alaska, Arizona, California, Colorado, Idaho, 
Montana, Nevada, New Mexico, Oregon, South Dakota, Utah, Washington, 
and Wyoming.

   includes all associated facilities, structures, 
        improvements, and disturbances at a distinct location 
        associated with activities to support a past operation, 
        including prospecting, exploration, uncovering, drilling, 
        discovery, mine development, excavation, extraction, or 
        processing of mineral deposits locatable under the general 
        mining laws;
   can range from an isolated prospect shaft and its associated 
        waste rock pile and adjacent prospect pits, to a complex site 
        with multiple entries, shafts, open pits, mill buildings, waste 
        rock piles, a tailings pond, and associated environmental 
        problems; and
   includes only hardrock (also known as locatable), non-coal 
        sites.

    Features that pose a significant hazard to public health and safety 
include--

   features, such as mine openings, structures, and highwalls; 
        and
   impoundments that pose a threat to public health and safety 
        and require actions to secure, remedy or reclaim.

    Sites with environmental degradation include features that lead to 
environmental degradation, and, consequently, require remediation of 
air, water, or ground pollution.
    Rather than reporting, as requested, the number of features leading 
to environmental degradation, most states reported only the number of 
sites with environmental degradation, if they reported data for this 
request at all. Because most states do not maintain environmental 
degradation data by feature, states could only speculate about this 
figure, or compute it by estimating an average number of features per 
site and multiplying that by the overall number of sites with 
environmental degradation. Because of these limitations with feature-
level data, we report only the number of sites with data on 
environmental degradation in order to ensure more reliable and 
consistent reporting across the states.
    As a secondary confirmation that states provided data consistent 
with the definition, our data collection instrument included a section 
for states to provide a brief description of how the various data 
points were calculated, and whether the data provided were actual or 
estimated values. Based on comments in these fields, and basic logic 
checks on the data, we followed up as needed through telephone 
interviews to clarify and confirm problematic responses. Our 
definitional and editing processes provided us with reasonable 
assurance that the data were as clean and consistent as possible, and 
using these final edited data, we calculated the estimated number of 
abandoned mine sites, the number of features that pose physical safety 
and environmental hazards, and the number of abandoned mine sites with 
environmental degradation in the 12 western states and Alaska.
    To answer our third objective--to determine the value and coverage 
of financial assurances in place to guarantee coverage of reclamation 
costs--we requested the BLM Bond Review Report from BLM's Legacy Rehost 
System 2000 (LR2000) database. Because we had previously reported 
reliability problems with data on financial assurances in LR2000,\3\ we 
conducted a limited reliability assessment of the bond report data. 
This limited assessment included (1) basic logic checks on the data we 
received, (2) interviews with BLM minerals management officials 
knowledgeable of the changes made to LR2000 to address GAO's 2005 
recommendations, and (3) a review of BLM's June 14, 2006, Instruction 
Memorandum 2006-172 for processing and entering Bond Review Report data 
in LR2000. Although the data are of undetermined reliability, our 
limited assessment indicates that management controls were improved for 
the generation of bond review reports from LR2000. We concluded that 
the data are appropriate as used and presented, and we did not base any 
conclusions or recommendations on these data.
---------------------------------------------------------------------------
    \3\ GAO-05-377.
---------------------------------------------------------------------------
  Appendix II: Information on Federal Agency Expenditures to Clean Up 
                        Abandoned Hardrock Mines
    This appendix provides information on federal expenditures used to 
clean up abandoned hardrock mines by fiscal year (table 5) and by state 
(table 6).

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    The Chairman. Thank you very much.
    Mr. Bisson, why do you not go right ahead?

  STATEMENT OF HENRI BISSON, DEPUTY DIRECTOR, BUREAU OF LAND 
             MANAGEMENT, DEPARTMENT OF THE INTERIOR

    Mr. Bisson. Thank you, Mr. Chairman and members of the 
committee, for this opportunity to participate in this 
oversight hearing today. I would like to briefly summarize my 
written remarks, if I could.
    The BLM is committed to carrying out its responsibilities 
under its revised surface management regulations to ensure the 
legacy of historic mining practices is not repeated. Even so, 
we recognize the significant problems associated with abandoned 
mine lands that exist on public lands today. According to our 
inventory data, there are over 49,000 features associated with 
12,035 sites, and while it is important to continue to add 
additional sites to the inventory, we feel the greatest need is 
on-the-ground work for those high priority sites already 
identified.
    Of special concern to all of us are the recent AML-related 
accidents and fatalities. To address these hazards, the BLM has 
participated in the ``Stay Out-Stay Alive'' program since 1999. 
The BLM has also begun a new partnership initiative called 
``Fix a Shaft Today!'', involving recreation, off-highway 
vehicle enthusiasts, the mining industry, the OHV manufacturers 
and retailers, and the State abandoned mine land agencies from 
Arizona, California, New Mexico, and Nevada.
    Between 2000 and 2007, the BLM inventoried 5,500 sites and 
remediated physical safety hazards at more than 3,000 sites. We 
have also restored water quality at hundreds of sites on 
thousands of acres. One of the collaborative cleanup projects 
involved uranium and vanadium abandoned mine lands in 
Cottonwood Wash watershed in southeast Utah. We had a number of 
partners that worked with us to address the elevated levels of 
radiation affecting local water, and in that case, we found a 
reclamation approach that was used to mitigate both the 
physical and environmental hazards in one step. We issued a 
local contract for $800,000 that went to the community to 
actually help clean up the site.
    A renewed interest in uranium exploration and eventual 
production from domestic sources began in fiscal year 2003. New 
uranium mining claim locations have dramatically increased over 
the past few years in Arizona, Colorado, New Mexico, Utah, and 
Wyoming due to the increase in the price of yellowcake. We 
estimate that roughly 40 to 50 percent of the 92,000 mining 
claims that were filed in 2007 were for uranium. The BLM is 
going to be conducting a workshop this summer with the NRC and 
State regulatory agencies to discuss agency roles, and we are 
also implementing new training on regulatory and safety aspects 
of uranium mining as we prepare to respond to this resurgence 
of interest.
    Thank you for the opportunity to testify, and I will be 
happy to answer any questions the committee may have on this 
important issue.
    [The prepared statement of Mr. Bisson follows:]

  Prepared Statement of Henri Bisson, Deputy Director, Bureau of Land 
                 Management, Department of the Interior
    Thank you for the opportunity to participate in this oversight 
hearing on issues relating to abandoned mine lands (AML) and to uranium 
mining.
    I recently had the opportunity to testify before you regarding 
mining operations on public lands, and the Bureau of Land Management's 
(BLM) surface management regulations that have been in force for the 
past seven years. With tighter mitigation measures and increased 
bonding requirements in the regulations, the BLM currently holds over 
$1.1 billion in financial guarantees to cover reclamation costs for 
ongoing mining operations and even has the ability to establish trust 
funds upon mine closure to mitigate longer-term environmental issues 
that may arise. These new stringent controls on mine operations today 
have helped eliminate the burden of future abandoned mine lands. 
However, we recognize the scope of the AML problem on public lands, 
particularly as urban areas encroach on once isolated areas and the 
increasing risk associated with more campers, hikers, hunters and off-
road enthusiasts accessing the public lands. Water quality and supply 
for a number of communities have also diminished, due to the impacts of 
abandoned mines. Our current focus is to continue to make progress in 
addressing reclamation of the highest priority abandoned mine lands. 
The BLM is committed to carrying out its responsibilities under its 
revised surface management regulations to ensure this legacy of past 
practices is not repeated.
                     sizing up abandoned mine lands
    The BLM maintains an inventory of known abandoned mines located on 
the public lands. Most of the sites are abandoned hardrock mines. While 
there has never been a comprehensive field inventory conducted of all 
abandoned mines, the BLM is currently reviewing and updating available 
data. As of February 1, 2008, the BLM's inventory contains 12,035 
sites, of which 10,103 will require further investigation or 
remediation. Much of the data comprises legacy records that are often 
incomplete. According to our inventory data, there are over 49,192 
features (such as open physical hazards and piles of contaminated 
material) associated with 12,035 sites. We would like to emphasize that 
the sites with the highest potential for harm to public health and 
safety have already been identified by the various Federal, State, and 
Tribal partners. While it is important to continue to characterize all 
sites, and add additional sites to the inventory, we feel the greatest 
need is on-the-ground work for those high-priority sites already 
identified.
    Coordination among the various Federal agencies, States and Tribes 
who manage lands with abandoned mines is critical to obtaining a 
complete picture of the Abandoned Mine Lands problem and working toward 
solutions that involve even more partners. While no single database 
currently exists that fully accounts for the scope of the problem, 
there is a tool that is available for public viewing that begins to 
consolidate this information. The Site Mapper tool on the BLM-Forest 
Service Geocommunicator website is an interactive map the public can 
access to graphically display abandoned mine lands and other 
information from databases managed by the BLM, the U.S. Forest Service, 
Mine Safety and Health Administration, Office of Surface Mining, United 
States Geological Survey, Environmental Protection Agency, and the 
State of California. The tool was launched in October, 2007, and while 
there is still work being done to validate the individual databases 
that feed into the system (for example, some sites have been entered 
more than once from multiple sources), the tool is a great start. As we 
continue to improve the accuracy of our data, we are also encouraging 
states and other partners to participate in using this site to 
consolidate information.
    The BLM and its Federal partners are in the process of developing a 
new web portal that will enable the public to obtain a more thorough 
overview and perspective on AML matters and what is being done to 
address them. This web portal will be activated in about four to six 
months.
                               priorities
    BLM works to prioritize mitigation activities on the 12,035 sites. 
For example, some projects are prioritized on a watershed basis, to 
enable the BLM to reclaim public land portions of compromised 
watersheds. Sites located near populous and high use areas also receive 
high priority. Examples include recreation areas, trails and 
campgrounds. In establishing priorities for AML reclamation, the BLM 
and its partners developed and issued an AML strategic plan in March 
2006. Overall, sites are divided into physical safety and water quality 
sites, although there can be overlap. Priority decisions are made site-
by-site, based on physical safety factors, including the likelihood of 
death or injury, high public visitation, accessibility, and proximity 
to populated areas. Water quality is also considered within the context 
of threat to public health, safety, and the environment, whether or not 
the site is located within a State-designated priority watershed, and 
impacts to BLM-administered lands. Effective partnerships and other 
sources of funding also enter into the prioritization process.
    Of special concern to all of us are the recent AML-related 
accidents and fatalities, such as incidents where off-highway vehicle 
enthusiasts and undocumented aliens have fallen into mine shafts. To 
address these hazards, the BLM has participated in the Mine Safety and 
Health Administration's ``Stay Out--Stay Alive'' program since 1999. We 
have developed a ``Stay Out--Stay Alive'' video that is available to 
the public. With MSHA, we are initiating an outreach program that 
educates people about the hazards of abandoned mines. The BLM also has 
begun a new partnership initiative called ``Fix A Shaft Today!'' or 
FAST. Under this initiative, the BLM hopes to involve recreation and 
off-highway vehicle enthusiasts, the mining industry, off-highway 
vehicle manufacturers and retailers, along with the state abandoned 
mine land agencies from Arizona, California, New Mexico and Nevada. The 
FAST initiative builds upon years of successful partnership with the 
Nevada Division of Minerals and the Nevada Mining Association. This 
effort, carried out in large part by volunteers and in-kind services, 
set a national BLM record of 118 abandoned mine closures in 2006.
                            accomplishments
    Last year, the Forest Service and the BLM celebrated 10 years of 
success with the hardrock abandoned mine lands program. Between 2000 
and 2007, the BLM inventoried 5,500 sites and remediated physical 
safety hazards at more than 3,000 sites. The BLM has also restored 
water quality at hundreds of sites on thousands of acres. This 10-year 
milestone was celebrated at a conference in Colorado, where a field 
trip highlighted one of our most successful collaborative projects in 
the Animas River Watershed.
    The Animas River Watershed reaches across 186 square miles of 
Colorado's San Juan Mountains, and is one of two sites selected for 
remediation pilot projects in Fiscal Year 1997. Over time, the impacts 
of contaminants, including aluminum, cadmium, copper, iron, lead, and 
zinc emanating from historic mines and natural sources became 
environmentally and economically visible; acidity levels in the water 
rose to levels impairing many fisheries and leaving some streams devoid 
of fish. Project stakeholders faced the challenge of improving water 
quality not only for the benefit of local residents and aquatic life, 
but also to ensure the well-being of the town's tourist and 
recreational trades. Approximately 50 mining remediation projects were 
successfully completed within the Animas River watershed. Of the 
completed projects, including the 19 priority sites, mining companies 
addressed approximately one-half, Federal land management agencies 
addressed approximately one-quarter, and the Animas River Stakeholders 
Group addressed approximately one-quarter. The community is now reaping 
the benefits of these cleanup efforts, including overall increased 
water quality and the return of two reproducing species of trout in 
downstream areas. This, in turn, is beginning to attract more visitors 
seeking recreation to the area. As the community continues to work 
together to address the remaining sites, a collaborative initiative 
among six Federal agencies is helping to revitalize a two-mile stretch 
of the Animas River corridor through Silverton, recognizing the 
community's value on tourism as it promotes aesthetic and quality-of-
life improvements to the area.
    I am pleased to inform you that next month Secretary Dirk 
Kempthorne will recognize these outstanding accomplishments through a 
Cooperative Conservation Award. This prestigious Secretarial award 
recognizes collaborative achievements among diverse parties including 
Federal, state, local, and Tribal governments; private for-profit and 
non-profit groups; and other non-governmental entities and individuals.
    Aside from the safety hazards and environmental contamination that 
may exist, abandoned mines can also be significant cultural and 
historic resources and habitat for bats and other wildlife. The 
benefits of cleaning up abandoned mine lands make the effort 
worthwhile. Onsite soil and water quality is often returned to pre-
mining conditions. Visitors to public lands are protected from health 
and safety hazards. Nearby communities enjoy cleaner water, a more 
diverse and healthy economy, and a better quality of life. Habitat for 
plants and wildlife is restored, and the aesthetics for both visitors 
and residents who live nearby are improved.
    One of the collaborative clean-up projects involving uranium and 
vanadium abandoned mine lands is Cottonwood Wash Watershed in southeast 
Utah. After decades of vanadium and uranium mining, the waters and 
sediments in the watershed were left with elevated levels of radiation 
from mine drainage and waste dumps. Project partners faced the 
challenge of addressing this contamination, which affected the use of 
local water for drinking, recreation, aquatic life, wildlife, grazing, 
and agriculture. A Technical Committee, comprised of Federal and state 
partners, developed a reclamation approach that mitigated the area's 
physical and environmental hazards in one step: portions of uranium 
mine dumps located in stream channels were removed and used as backfill 
material for hazardous openings and face-up areas. Project construction 
work was spread into seven phases over five years, allowing small and 
local contractors to bid on projects, benefiting the local economy, 
increasing competition, and reducing overall project costs. Ultimately, 
three local companies were selected to conduct the construction work, 
which returned $800,000 to the local economy.
    Working with the Navajo AML Bureau, the BLM has provided assistance 
in reclamation of uranium mines on Navajo lands in two states. In the 
late 1980's, the BLM conducted a two-year inventory of abandoned mines 
on Navajo lands in the mountains of Arizona. The BLM also worked with 
the New Mexico State AML Bureau in the 1980's remediating about a dozen 
uranium sites on BLM land in the checkerboard area east of the 
Reservation.
                  uranium mining on public lands today
    A renewed interest in uranium exploration and eventual production 
from domestic sources began in Fiscal Year 2003, when Canada's formerly 
rich uranium deposits were reaching the end of their reserves and began 
closing down, causing a major increase in demand for new uranium 
sources for power generation worldwide. New uranium mining claim 
locations have dramatically increased over the past few years in the 
states of Arizona, Colorado, New Mexico, Utah, and Wyoming due to the 
increase in the price of ``yellow cake'' (i.e., partially-refined ores 
consisting largely of uranium oxide compounds, primarily 
U3O8). Although the specific minerals are not 
identified at the time of claim location, we estimate that 
approximately 40-50 percent of the 92,000 new mining claims in Fiscal 
Year 2007 were for uranium.
    It has been two decades since the BLM has dealt with this level of 
interest in uranium mining; experts have retired, and new processing 
techniques have also emerged. In order to effectively and safely manage 
the processing of these Notices and Plans of Operations, the BLM will 
be conducting a workshop this summer with the Nuclear Regulatory 
Commission and state regulatory agencies. The purpose of the workshop 
will be to determine the role of each agency in processing applications 
submitted for uranium operations on public lands. The BLM will also be 
implementing new training on both regulatory and safety aspects of 
mining, milling and reclamations methods for uranium.
    In addition to building knowledge and partnerships, the BLM is also 
positioning its workforce to budget the requisite time for processing 
these Plans of Operations. We anticipate that uranium Plans of 
Operation may draw increased public participation in the National 
Environmental Policy Act planning process, and we may have to re-
allocate resources to respond to that interest.
                               conclusion
    Thank you for the opportunity to testify. I will be happy to answer 
any questions you may have on this important issue.

    The Chairman. Thank you very much.
    Mr. Ferguson, go right ahead.

 STATEMENT OF TONY L. FERGUSON, DIRECTOR OF MINERALS & GEOLOGY 
       MANAGEMENT, NATIONAL FOREST SYSTEM, FOREST SERVICE

    Mr. Ferguson. Thank you, Mr. Chairman and members of the 
committee. Thanks for this opportunity to testify on the 
hardrock abandoned mine land reclamation program. I am very 
pleased to be here today.
    In 2007, the Forest Service and the Bureau of Land 
Management celebrated 10 years of successfully reclaiming 
Federal lands disturbed by abandoned mines.
    The Forest Service abandoned mine land program operates to 
improve the quality of public lands placed in our care. Various 
estimates exist for the total number of abandoned mines on 
national forest and grasslands. Our data indicates that there 
are between 27,000 and 39,000 abandoned mines of all types on 
national forest system lands. Many of the sites will require 
cleanup of mine waste, contaminated soils and water, or 
mitigation of mine safety hazards.
    Cleanup and safety mitigation projects are prioritized for 
funding by a team of Washington office and regional office 
representatives. All proposed projects are evaluated and 
assigned scores based on potential benefits to human health and 
safety, environmental factors, and socioeconomic factors, 
including partnerships, public interest, and overall cost.
    To remediate a particular site, the Forest Service may work 
with Federal, State, and private partners who are able to apply 
funding from a variety of programs and authorities. An example 
of this kind of collaboration is the abandoned mine cleanup in 
American Fork Canyon, Utah. Heavy metals from the mining waste 
from historic sites prompted the State of Utah to issue a fish 
advisory in the American Fork River. Working with assistance 
from the State of Utah and the U.S. Geological Survey, the 
Forest Service completed a $793,000 cleanup of mine waste on 
national forest lands in 2003. However, the job was not done.
    In 2005, Trout Unlimited, working with Snowbird Ski Resort 
and Tiffany and Company Foundation, spearheaded the cleanup of 
waste rock and tailings with elevated levels of heavy metals on 
private property. The American Fork River now supports rare 
native cutthroat trout in a 10-mile stretch downstream of the 
mines. This cleanup received national recognition by the 
Environmental Protection Agency in 2007.
    Similar collaborative cleanup involving States, Federal, 
and private partners are occurring across the country. The 
Forest Service is committed to encouraging such collaborative 
cleanups and uses partnership potential as one of the criteria 
in its project selection process.
    Finally, preventing future abandoned mine land sites is a 
crucial component of the Forest Service's abandoned mine land 
program. Sustainable mining practices, environmentally 
protective mine closure planning, optimal permitting 
requirements, and financial assurances are all tools that we 
are using to ensure mining companies operate under a 
sustainable business model that follows a mine's life from 
startup to clean closure.
    Mr. Chairman, thank you for the opportunity to talk about 
the hardrock AML program. I would be happy to answer any 
questions.
    [The prepared statement of Mr. Ferguson follows:]

Prepared Statement of Tony L. Ferguson, Director of Minerals & Geology 
           Management, National Forest System, Forest Service
    Mr. Chairman and members of the Committee, thank you for the 
opportunity to testify on the hardrock Abandoned Mine Land (AML) 
reclamation program. I am pleased to be here with you today.
    In 2007, the Forest Service and the Bureau of Land Management (BLM) 
celebrated 10 years of successfully reclaiming federal lands disturbed 
by abandoned mines, including abandoned hardrock mines. Both agencies 
issued a report in September 2007, ``Abandoned Mine Lands: A Decade of 
Progress Reclaiming Hardrock Mines'' that highlights some of the 
accomplishments that have been achieved with the support and help of 
State and Federal Agencies, concerned citizens and organizations. I am 
pleased to be able to provide copies of that report for the members of 
the Committee, and will summarize the key points of the Forest Service 
AML Program in my testimony.
    The BLM and Forest Service hardrock AML programs operate to improve 
the quality of public lands placed in our care through similar 
missions. Elements of these missions include protecting public health 
and safety by mitigating abandoned mine hazards; restoring land and 
water contaminated or disturbed by abandoned mines; and enhancing fish 
and wildlife habitat through reclamation of abandoned mines.
            abandoned mines on national forest system lands
    Various estimates exist for the total number of abandoned mines on 
National Forest System (NFS) lands. All estimates are based in large 
part on abandoned mine data collected by the former USDI Bureau of 
Mines, that is now part of the Mineral Resources Data System (MRDS) 
which is managed by the US Geological Survey. Analyses of that data by 
the Forest Service\1\ in 1995 indicated there are approximately 27,000 
to 39,000 abandoned mines of all types on NFS Lands, of which 18,000 to 
26,000 of the total are abandoned hardrock mines. The data also 
indicated that 9,000 to 13,000 of the abandoned hard rock mines were 
past producers of mineral commodities, and therefore more likely to 
require cleanup of mine waste or contaminated soil and water, or 
mitigation of mine safety hazards such as vertical shafts and 
underground mine workings.
---------------------------------------------------------------------------
    \1\ ``Distribution of Abandoned and Inactive Mines on National 
Forest System Lands'', Forest Service General Technical Report RM-GTR-
260.
---------------------------------------------------------------------------
    In the mid 1990's, the Forest Service directed each of its Regional 
Offices to use existing State and Federal data to compile regional 
abandoned mine databases in order to begin identifying those which 
posed the greatest threat to human health and the environment, and 
scheduling them for assessment and cleanup. The Forest Service is 
currently developing a national AML database which will be used to 
consolidate the regional abandoned mine data, track discovery of new 
AML sites, and provide information on the cleanup status of sites on 
NFS Lands. Once this national database is complete, the Forest Service 
will be able to share data regarding the presence, priority and cleanup 
status of AML sites with states, other federal agencies and the public.
   prioritization of abandoned mine sites for cleanup and mitigation
    Beginning with historic information available on abandoned mines 
from the databases described above, Forest Service Regional Offices 
schedule field assessments of AML sites which appear to pose the 
greatest potential threat to human health and the environment. Based on 
these assessments, abandoned mine cleanup and safety mitigation cleanup 
projects, including the costs and benefits of each, are submitted to 
the Forest Service National Office to be considered for funding in 
outyear budgets.
    Cleanup projects are prioritized for funding by a team of 
Washington Office and Regional Office representatives using the 
Choosing by Advantages (CBA) methodology. In the CBA process all 
proposed projects are evaluated and assigned scores based on potential 
benefits to:

   Human health and safety;
   Environmental factors such as water quality, threatened and 
        endangered species etc;
   Economic and social factors including partnerships, public 
        interest and overall cost.

    The projects are then ranked on the basis of their scores and 
funded as money becomes available through the budget process.
    Safety Mitigation Projects are prioritized by the Regions, and 
submitted to the National Office for funding. Criteria used for 
prioritizing safety mitigation projects are based on the severity of 
the hazard and accessibility to the public including:

   Sites where a death, injury or close call has occurred;
   Sites where complaints or concerns have been expressed by 
        the public or others;
   Sites nearby developed recreation sites or other 
        concentrations of people;
   Sites accessed by, or near forest roads or trails;
   Other sites based on the severity of the hazard and 
        accessibility to the public

    Each region receives a certain percentage of the national budget. 
This percentage is mutually agreed upon by the Regions, and is based on 
the number of abandoned mines in the region and the degree of public 
exposure risk.
                       current sources of funding
    The Forest Service addresses AML reclamation primarily through two 
programs.
    The Environmental Compliance and Protection (ECAP) program provides 
for cleanup of hazardous materials and restoration of natural resources 
damaged by hazardous materials at abandoned mines on NFS lands. ECAP 
cleanups are typically done to comply with CERCLA (Comprehensive 
Environmental Response, Compensation and Liability Act), RCRA (Resource 
Conservation and Recovery Act) and CWA (Clean Water Act) requirements.
    The AML program provides for non-CERCLA related cleanup 
(uncontaminated sediment, erosion), and mitigation of safety hazards at 
abandoned and/or inactive mines on NFS lands. The AML program is also 
responsible for the basic inventory of abandoned mines on NFS Lands.
    In addition, the Forest Service also receives funds from the USDA 
hazardous material management account (HMMA). The USDA has also 
received approximately $300 million in funding or work from potentially 
responsible parties (PRPs) since 1995. The majority of these funds were 
recovered from PRPs on NFS Lands.
    Currently no single source of funding alone can completely reclaim 
all impacted sites to applicable standards. To remediate a particular 
site, the Forest Service may work with Federal, State, and private 
partners who are able to apply funding from a variety of programs and 
authorities, including SMCRA; CERCLA; and the Clean Water Act Grant 
Program.
    An example of this kind of collaboration is the abandoned mine 
cleanup in American Fork Canyon Utah. Heavy metals from the mining 
wastes from historic sites prompted the State of Utah to issue a fish 
advisory in the American Fork River. Working with assistance from State 
of Utah and US Geological Survey, the Forest Service completed a 
$793,000 cleanup of mine waste on National Forest Lands in 2003. 
However addition work remained. In 2005, Trout Unlimited, working with 
Snowbird Ski Resort and Tiffany & Co. Foundation, spearheaded the 
cleanup of 33,000 cubic yards of waste rock and tailings with elevated 
levels of heavy metals on private property. The cleanup by the Forest 
Service, Trout Unlimited, Snowbird, Tiffany's and others, has improved 
water quality to the point that the American Fork River now can support 
rare, native cutthroat trout in a 10-mile stretch downstream of the 
mines. This cleanup received national recognition by the Environmental 
Protection Agency in 2007.
    Similar collaborative cleanups involving states, federal and 
private partners like Trout Unlimited are occurring across the country, 
including the Monday Creek Watershed in Ohio, Eustache Creek in 
Montana, the Animas Watershed in Colorado, Boulder River Watershed in 
Montana, and the Middle Fork of the Boise River in Idaho to name just a 
few. The Forest Service is committed to encouraging such collaborative 
cleanups and uses partnership potential as one of the criteria in its 
project selection process.
                       forest service aml program
    From FY 1998 to FY 2008 the Forest Service has spent approximately 
$200 million of appropriated funds on abandoned mine environmental 
cleanup and safety mitigation. This is a net figure and does not 
include overhead and indirect costs. In addition, the Forest Service 
has competed for approximately $160 million of USDA Hazardous Materials 
Management Account funds, and $300 million of work or funding has been 
provided by potentially responsible parties (PRP).
    Since 1998 the Forest Service has mitigated more than 2,000 safety 
hazards and cleaned up hazardous substances at more than 400 sites. 
Hard rock mine restoration work may involve closing mine adits and 
shafts; containing mine wastes in on-site capped and lined 
repositories; installing water source control and treatment systems; 
removing mine chemicals and trash; removing and stabilizing old mine 
buildings for historic interpretation; and reshaping and revegetating 
sites. These sites may range from one to over one hundred acres in 
size, cost $10,000 to $10 million or more and may, in a few cases, 
require decades to complete.
                         abandoned mine cleanup
    The following is just one of many examples of collaborative 
abandoned mine cleanup efforts that the Forest Service has participated 
in over the last 10 years.
    The town of Red River, New Mexico and Red River Ski Resort are both 
located in the Red River Watershed. This area is visited by thousands 
of visitors and tourists year round, including fishermen, hunters, 
horseback riders, campers, hikers, skiers, bikers, and folks attending 
seasonal events such as running marathons, rafting competitions, & 
school events.
    In 2007 the Forest Service completed the first phase of a nearly $4 
million dollar project to clean up contamination and mitigate safety 
hazards at abandoned mines located in the Placer/Pioneer and Bitter 
Creek portions of the Red River Watershed. The work completed thus far 
includes:

   Removal of 14,000 cubic yards of mine waste contaminated 
        with lead and arsenic from the banks of Placer Creek and 
        Pioneer Creek;
   Restoration of 6 miles of perennial stream;
   Closure of 8 hazardous mine openings.

    This work has eliminated the human health and safety hazards posed 
by the contaminated mine waste and safety hazards and increased the 
supply of clean water to the town of Red River and Red River Ski Area, 
reducing the cost of water treatment. These are expected to be long-
term benefits that will enhance the quality of life, and enjoyment of 
the areas natural resources for both residents and visitors.
    The next phase of the Red River project will remediate 44,000 cubic 
yards of mine waste located in the Bitter Creek portion of the Red 
River Watershed which is adjacent to, and directly northeast of the 
town of Red River. The total cost of this remediation is estimated at 
$2.8 million, and with $1.3 million currently available the Forest 
Service is planning to initiate the project in May of 2008. The project 
will compete through the national project selection process for funding 
needed to complete the next phase.
    In other work completed in 2007, the Cibola National Forest 
finished filling mining shafts and deep cuts over a mile in length in 
the Bonita Canyon Watershed, approximately 20 miles southwest of the 
town of Grants, New Mexico and north of El Malpais National Monument. 
The mine cuts and shafts part of the Zuni Mine, an historic mine and 
mining camp which was very active from 1940 on through the 1960's. 
Because the mine area was well-roaded and visible from a State Highway, 
weekend campers, off-road vehicles and rock hounders are very active in 
the area. Because of the risk to visitors exploring the mine area, the 
Forest Service completed the work of filling in the shafts and cut in 
2007, at a cost of approximately $250,000.
                         looking to the future
    Forest Service efforts to clean up abandoned mine lands have many 
worthwhile outcomes. Visitors to public lands are better protected from 
health and safety hazards, and neighboring communities enjoy cleaner 
water. Onsite soil and water quality is often returned to pre-mining 
conditions resulting in restored habitat for plants and wildlife. 
Significant cultural and historic resources are preserved.
    Continued success of the Forest Service AML program depends on 
ensuring that cleanup costs are borne by potentially responsible 
parties, where possible, and partnering with other State and Federal 
Agencies, public interest groups, the mining industry and other 
interested third parties who do not otherwise have liability for 
abandoned or inactive mine sites. Historically, the threat or potential 
threat of liability under the Comprehensive Environmental Response, 
Compensation and Liability Act (CERCLA) and the Clean Water Act (CWA) 
may have discouraged third party partners or ``Good Samaritans'' from 
assisting in cleaning up abandoned mines. The Forest Service recently 
used its delegated CERCLA authority to provide Good Samaritans 
protection from CERCLA, and will do so in the future, as appropriate. 
However, the threat of liability for water treatment under provisions 
of the CWA continues to be a concern for potential Good Samaritans.
    Finally, preventing future AML sites is also a crucial goal of any 
land management agency's AML program. Responsible mining practices, 
environmentally protective mine closure planning, optimal permitting 
requirements and financial assurances are all tools that land 
management agencies are using to ensure mining companies operate under 
a sustainable business model that follows a mine's life from startup to 
clean closure.
    Mr. Chairman, thank you for the opportunity to talk about the 
hardrock Abandoned Mine Lands program. I would be happy to answer any 
questions.

    The Chairman. Thank you very much.
    Mr. Brancard, go right ahead.

   STATEMENT OF BILL BRANCARD, DIRECTOR, MINING AND MINERALS 
  DIVISION, NEW MEXICO ENERGY, MINERALS AND NATURAL RESOURCES 
                    DEPARTMENT, SANTA FE, NM

    Mr. Brancard. Good afternoon, Mr. Chairman and members of 
the committee. Thank you for the invitation to testify today. I 
am representing today the State of New Mexico and the 
Interstate Mining Compact Commission, an organization of 24 
coal and hardrock mining States.
    Across the West, as we have heard from the testimony 
before, the number of abandoned hardrock mines is estimated at, 
at least 100,000 and perhaps several 100,000. In New Mexico, we 
estimate there are roughly 15,000 abandoned mine hazards that 
need to be addressed.
    Today States and tribes often take the lead in addressing 
hardrock abandoned mine issues. While there is no national 
program for hardrock AML funding, for over a quarter century, 
coal mining States and tribes have received annual AML grants 
under the Surface Mining Control and Reclamation Act, or SMCRA. 
SMCRA allows States to use these AML funds at high-priority 
hardrock sites to address hazards to public safety. Various 
other Federal agencies have provided some funding for hardrock 
AML projects, but most of these grants are project-specific and 
nonrecurring.
    For New Mexico, SMCRA was, until recently, a reliable 
source for funding hardrock AML projects. However, last 
December, the Interior Department issued a new interpretation 
of SMCRA to prohibit most AML grant funds from being used at 
hardrock projects. This is a significant blow to States such as 
New Mexico, Utah, and Colorado which use SMCRA funds to address 
hardrock AML problems.
    Reform of the general Mining Law provides an opportunity to 
establish a consistent and robust funding source for addressing 
hardrock AML problems. I will address a few components of a 
hardrock program that could be established in new legislation.
    First, any program to distribute funds for hardrock mine 
reclamation should provide an opportunity for States and tribes 
to assume primary responsibility for implementing the AML 
program. Today, there are abandoned mine land programs in most 
States. These include the 28 programs established by States and 
tribes under SMCRA. A number of States that are not eligible 
for SMCRA funding also have strong hardrock AML programs.
    In New Mexico, over the past 25 years, using primarily 
SMCRA funds, we have completed numerous AML projects, both coal 
and hardrock, on private, State, and Federal land. About 2,000 
hardrock mine abandoned openings have been closed. New Mexico 
also now has agreements with the U.S. Forest Service and the 
BLM that allow those agencies to coordinate with us and to fund 
projects on their lands. It is simply more efficient at times 
for the Federal land managers to use our agency with our staff 
of experienced engineers, reclamation specialists, and project 
managers to design and implement an AML project.
    Second, the legislation should recognize that most hardrock 
AML problems are on non-Federal lands, even in the West. In 
most States, Federal lands contain well less than half of all 
hardrock AML sites, and when there are abandoned mine problems 
on Federal lands, they often spill over into adjacent non-
Federal lands or inholdings. To be effective, a hardrock AML 
program needs to address impacts on all classes of lands.
    The experience of New Mexico and the Navajo Nation with 
abandoned uranium mines highlights the need for a strong 
hardrock AML program. Our region was a leading producer of 
uranium from the 1950s to the 1980s. Many uranium mines were 
largely unregulated and left a legacy of safety hazards and 
environmental contamination. Some large mines and mills were 
reclaimed under Federal and State laws, and some smaller sites 
have been addressed with SMCRA AML funds.
    However, New Mexico has recently inventoried closed uranium 
mines across the State and determined that over 50 percent of 
them have no record of any reclamation. New Mexico and the 
Navajo Nation are currently investigating these sites to 
determine what reclamation work is necessary and what funding 
sources could be used to conduct these cleanups. The need for 
uranium mine cleanups go well beyond any current funding 
source.
    Mr. Chairman and members of the committee, thank you for 
the opportunity to share our perspective on abandoned mine land 
reform. I will stand for any questions.
    [The prepared statement of Mr. Brancard follows:]

  Prepared Statement of Bill Brancard, Director, Mining and Minerals 
Division, New Mexico Energy, Minerals and Natural Resources Department, 
                              Santa Fe, NM
    Good afternoon, Mr. Chairman and Members of the Committee. Thank 
you for inviting the State of New Mexico and the Interstate Mining 
Compact Commission to testify today. I am Bill Brancard, Director of 
the Mining and Minerals Division of the New Mexico Energy, Minerals and 
Natural Resources Department.
    Today I will speak about the impacts of hardrock abandoned mines 
and the roles we do, and can, play in addressing these threats. I will 
focus on New Mexico's experience with abandoned mine issues and in 
particular highlight the issues surrounding abandoned uranium mines.
    I am also representing the Interstate Mining Compact Commission 
(IMCC), an organization of 24 states located throughout the country 
that together produce some 95% of the Nation's coal, as well as 
important hardrock and other noncoal minerals. Each IMCC member state 
has active mining operations as well as numerous abandoned mine lands 
within its borders and is responsible for regulating those operations 
and addressing mining-related environmental issues, including the 
reclamation of abandoned mines. Over the years, IMCC has worked with 
the states and others to identify the nature and scope of the abandoned 
mine land problem, along with potential remediation options.
    New Mexico has a long and distinguished mining history. Native 
Americans mined coal, turquoise, lead, and copper hundreds of years 
before Europeans arrived in North America. Spanish exploration and 
mining began in the late 1500s and expanded across the state. The 
nineteenth and twentieth centuries witnessed a number of mining booms 
across the State driven by the search for coal, gold, silver, copper 
and uranium among others. Today, New Mexico is home to some of the 
largest active coal and hardrock mining facilities in the United 
States.
    Centuries of mining have also left another legacy: thousands of 
mine openings and other mine hazards that pose serious threats to 
public health and safety. Since 1990, we are aware of at least five 
fatalities at abandoned mines in New Mexico. Numerous other serious 
injuries and costly rescues have occurred at these mines. In addition, 
abandoned mines across New Mexico pose significant threats to property 
and the environment through pollution, subsidence and underground 
fires.
    Nationally, abandoned mine lands continue to have significant 
adverse effects on the environment. Some of the types of environmental 
impacts that occur at AML sites include subsidence, surface and ground 
water contamination, erosion, sedimentation, chemical release, and acid 
mine drainage. Safety hazards associated with abandoned mines account 
for deaths and/or injuries each year. Abandoned and inactive mines, 
resulting from mining activities that occurred over the past 150 years, 
are scattered throughout the United States. The sites are located on 
private, state and public lands.
    Over the years, several studies have been undertaken in an attempt 
to quantify the hardrock AML cleanup effort. In 1991, IMCC and the 
Western Governors' Association completed a multi-volume study of 
inactive and abandoned mines that provided one of the first broad-based 
scoping efforts of the national problem. Neither this study, nor any 
subsequent nationwide study, provides a quality a quality, completely 
reliable, and fully accurate on-the-ground inventory of the hardrock 
AML problem. Both the 1991 study and a recent IMCC compilation of data 
on hardrock AML sites were based on available data and professional 
judgment. The data is seldom comparable between states due to the wide 
variation in inventory criteria, a topic I will address later in my 
testimony. Nevertheless, the data do demonstrate that nationally, there 
are large numbers of significant safety and environmental problems 
associated with inactive and abandoned hardrock mines and that 
remediation costs are very large.
    In New Mexico, we estimate that there are roughly 15,000 abandoned 
mine hazards that need to be addressed. While New Mexico still has 
abandoned coal mines that need addressing, well over 90% of the 15,000 
figure are abandoned hardrock mines. Across the West, the number of 
abandoned hardrock mines has been estimated at several hundred 
thousand. Many of the states report the extent of their respective AML 
problem using a variety of descriptions including mine sites, mine 
openings, mine features or structures, mine dumps, subsidence prone 
areas, miles of unreclaimed highwall, miles of polluted water, and 
acres of unreclaimed or disturbed land. Some of the types of numbers 
that IMCC has seen reported in our Noncoal Report and in response to 
information we have collected for GAO and others include the following: 
Number of abandoned mine sites: Alaska--7,000; Arizona--80,000; 
California--47,000; Colorado--7,300; Montana--6,000; Nevada--16,000; 
Utah--17,000--20,000; Washington--3,800; Wyoming--1,700. Nevada reports 
over 200,000 mine openings; Minnesota reports over 100,000 acres of 
abandoned mine lands.
    What becomes obvious in any attempt to characterize the hardrock 
AML problem is that that it is pervasive and significant. And although 
inventory efforts are helpful in attempting to put numbers on the 
problem, in almost every case, the states are intimately familiar with 
the highest priority problems within their borders and where limited 
reclamation dollars must immediately be spent to protect public health 
and safety or protect the environment from significant harm.
    Estimating the costs of reclaiming hardrock abandoned mines is even 
more difficult than characterizing the number of mines. If you accept 
the estimates of the number of AML sites, you can develop a very rough 
estimate for the costs of safeguarding mine hazards and reclaiming 
small surface disturbances. But the costs of remediating environmental 
problems such as ground water and surface water contamination, acid 
rock drainage or wind blown contaminants are extremely difficult to 
estimate. And many of these problems will not even be detected unless a 
thorough assessment and testing occurs at a site.
    Today, state agencies are working on hardrock abandoned mine 
problems through a variety of limited state and federal funding 
sources. Various federal agencies, including the Environmental 
Protection Agency, Bureau of Land Management, U.S. Forest Service, Army 
Corps of Engineers and others have provided some funding for hardrock 
mine remediation projects. These state/federal partnerships have been 
instrumental in assisting the states with our hardrock AML work and, as 
states take on a larger role for hardrock AML cleanups into the future, 
we will continue to coordinate with our federal partners. However, most 
of these existing federal grants are project specific and do not 
provide consistent funding. For states with coal mining, the most 
consistent source of AML funding has been the Title IV grants under the 
Surface Mining Control and Reclamation Act (SMCRA). Section 409 of 
SMCRA allows states to use these grants at high priority non-coal AML 
sites. The funding is generally limited to safeguarding hazards to 
public safety (e.g., closing mine openings) at hardrock sites.
    A work about the AML program under SMCRA--a state-led program that 
has worked exceptionally well: During the past quarter of a century, 
significant and remarkable work has been accomplished pursuant to this 
program for addressing coal AML problems. The Office of Surface Mining 
Reclamation and Enforcement (OSM) and the states have documented much 
of this work. (See the 2006 Accomplishments Report published by the 
National Association of Abandoned Mine Land Programs and OSM's 
twentieth anniversary report.) OSM's Abandoned Mine Land Inventory 
System (AMLIS) provides a fairly accurate accounting of the work 
undertaken by most of the states and tribes over the life of the AML 
program and also provides an indication of what is left to be done.
    Over the past 30 years, tens of thousands of acres of abandoned 
mine lands have been reclaimed, thousands of mine openings have been 
closed, and safeguards for people, property and the environment have 
been put in place. There are numerous success stories from around the 
country where the states' AML programs have saved lives and 
significantly improved the environment. Suffice it to say that the AML 
Trust Fund, and the work of the states pursuant to the distribution of 
monies from the Fund, have placed an important role in achieving the 
goals and objectives of set forth by Congress when SMCRA was first 
enacted--including protecting public health and safety, enhancing the 
environment, providing employment, and adding to the economies of 
communities impacted by past coal and noncoal mining.
    As states work to address the remaining inventory of abandoned coal 
mine sites, the states are increasingly concerned about the escalating 
costs of addressing these problems as they continue to go unattended 
due to insufficient funding. Unaddressed sites tend to get worse over 
time, thus increasing reclamation costs. Inflation exacerbates these 
costs. The longer the reclamation is postponed, the less reclamation 
will be accomplished. In addition, the states are finding new, higher 
priority problems each year, especially as many of our urban areas grow 
closer to what were formerly rural abandoned mine sites. New sites also 
continually manifest themselves due to time and weather. This 
underscores the need for constant vigilance to protect our citizens. In 
addition, as states certify that their abandoned coal mine problems 
have been corrected under SMCRA, they are authorized to address the 
myriad health and safety problems that attend abandoned noncoal/
hardrock mines, which are subject to all of the above concerns.
    Until recently, the SMCRA AML program was the primary consistent 
source of funding for New Mexico's hardrock AML program. Over the past 
six years, New Mexico's average $1.5 million annual grant was roughly 
split between coal (55%) and hardrock (45%) projects. In December 2006, 
Congress amended the SMCRA AML program to distribute funds to states in 
an amount equal to that previously allocated under SMCRA but never 
appropriated. For New Mexico, this amounts to approximately $20 million 
in additional AML funds distributed over the next 7 years. However, 
while Section 409 was not changed or amended in any way, the Interior 
Department has now interpreted SMCRA to prohibit this enhanced funding 
from being used at noncoal projects. This is a significant blow to 
states such as New Mexico, Utah and Colorado which have previously used 
SMCRA AML funds to address many of our more serious hardrock AML 
problems.
    The reform of the General Mining Law provides an opportunity to 
establish a consistent, and robust, funding source for addressing 
hardrock AML problems. We would like to address a few components of any 
hardrock program established in new legislation. First, any program to 
distribute funds for hardrock mine reclamation should allow for states 
and tribes to receive funding and conduct AML projects. Today, there 
are abandoned mine land programs in most states. These include the 28 
programs established by states and tribes under SMCRA Title IV. A 
number of states that are not eligible for Title IV funding, including 
Nevada, California, Arizona, have robust hardrock AML programs as well. 
All of these states and tribes are experienced with administering 
federal grants and completing AML projects, including projects on 
federal land.
    It is essential that the states be provided an opportunity to 
assume primary responsibility for implementing the AML program given 
the unique differences among the states in terms of geology, climate, 
terrain and other physical and environmental conditions. Each state 
should also be provided the discretion to determine which among the 
many AML sites in its respective inventory of sites deserves the most 
immediate attention. The states can also best decide the appropriate 
remediation required under the circumstances given available funding. 
This state lead approach will assure the most critical AML problems are 
addressed first, since the states are closer to the problems and can 
make a better determination about priorities and actual remediation 
work.
    In New Mexico, we have used SMCRA Title IV funds to address a 
number of significant AML problems, both coal and hardrock, on BLM and 
Forest Service land. In addition, our AML Program has cooperative 
agreements with both the Forest Service and BLM that allow those 
agencies to fund AML projects on their lands when money is available. 
It is simply more efficient for the federal land managers to use our 
agency with its staff of experienced engineers, reclamation specialists 
and project managers to design and conduct an AML project. Given the 
importance of the states being able to access SMCRA Title IV funds for 
noncoal AML work, any new legislation should ensure that this practice 
can continue.
    Second, the legislation should recognize that most hardrock AML 
problems are on non-federal lands, even in the West. In most states, 
federal lands contain less than a quarter of all hardrock AML sites. In 
part, this is due to the patenting of mining claims in the nineteenth 
and early twentieth century that led to mining occurring on private 
land. And when there are abandoned mine problems on federal lands, they 
often spill over into adjacent non-federal lands or in-holdings. To be 
effective, a hardrock AML program needs to be able to spend funds on 
all classes of land.
    A critical component of any reclamation program is prioritization 
of sites and identification of remediation options. Abandoned mine 
lands range from sites that require no remediation because of their 
size or minimal risk impact and sites which require revegetation for 
erosion control, to shafts and adits that present public safety hazards 
and sites with significant toxic leachate contamination of ground and 
surface waters. Regardless of the inventory or listing of sites being 
used, there will be a large portion that require little if any 
reclamation or for which the per unit cost of reclamation is relatively 
small. These sites will also rank low in priority because of the 
reduced threat to public health or the environment. On the other end of 
the spectrum, there will be a small number of sites that require a 
significant amount of funding to remediate and that constitute a 
chronic risk to public health or the environment. Under current law, 
these are the sites that are being or might be remediated under 
Superfund (the Comprehensive Environmental Response, Compensation and 
Liability Act (CERCLA)). The AML priority sites should be those that 
constitute a physical threat to public safety, and sites with 
significant contamination, but that will never score high enough to be 
remediated under CERCLA.
    Another aspect of any hardrock AML program is the process of 
quantifying the problem. A consistent and cost-effective inventory of 
AML problems may be needed. However, lessons need to be learned from 
the inventory of abandoned coal mines undertaken pursuant to the 
Surface Mining Control and Reclamation Act (SMCRA), which is estimated 
to have cost more than $25 million and is still fraught with 
controversy. Based on the SMCRA experience, any hardrock AML inventory 
needs to: have well thought out goals and instructions; maintain 
standardized inventory procedures; keep inventory crews small to 
minimize inconsistencies in reporting methods; minimize the influence 
on the inventory by those with vested interests in the results; require 
any federal agency inventory work to be coordinated with the states; 
utilize state-of-the-art GPS imagery; and be conducted with 
consideration for seasonal vegetation cover. In the end, there should 
also be a cap placed on the amount of money to be invested in any 
inventory effort so as not to divert money and energy from on-the-
ground reclamation work.
    There are many other components to an effective and efficient AML 
program. The states have significant experience in this area, based on 
our work under SMCRA and with AML programs in other non-SMCRA states 
such as Nevada, Arizona and California. Among the other areas that 
should likely be addressed in fashioning a hardrock AML program are: 
reclamation program elements; reclamation standards; priorities for 
cleanup; set-aside accounts for special circumstances such as acid rock 
drainage; emergency situations; and funding distribution mechanisms. We 
would welcome the opportunity to work with the Committee and others to 
address all aspects of a hardrock AML program that is led by the states 
and coordinated with our federal partners.
    I have also been asked to address the problems that New Mexico, and 
other Western states and tribes, face with uranium mine cleanups. Our 
experience here will highlight many of the issues I have previously 
mentioned. New Mexico was one of the leading producers of uranium in 
the world in the period of the 1950s through the early 1980s.
    While this period is later than much of the hardrock production 
which populates the AML sites in many Western states, it predates many 
of the significant state and federal environmental and mine reclamation 
laws. As a result, many of these uranium mines were largely unregulated 
and left a legacy of safety hazards and environmental contamination 
which has a long way to go to be completely abated.
    In the past year, the State of New Mexico has been inventorying 
closed uranium mines to determine how many sites remain to be 
remediated. Similar projects are being conducted by the Navajo Nation 
and the U.S. EPA on tribal land. We created a data base with all 
uranium mines that reported production and correlated that list with 
all records of reclamation work conducted under federal, state or 
tribal laws and reclamation projects conducted by federal, state or 
tribal agencies. These include cleanups under federal laws such as the 
Uranium Mine Tailings Radiation Control Act (UMTRCA) and CERCLA, or 
state laws such as the New Mexico Mining Act or Water Quality Act, or 
cleanups conducted with SMCRA Title IV funds by the Navajo Nation or 
New Mexico AML programs. We found that over 50 % of the uranium mines 
(137 of 259) have no record of any reclamation having occurred or 
currently required by a government agency.
    These sites are generally older uranium sites (1950s and 1960s era) 
and have smaller production than sites where cleanups have been, and 
are being, conducted under other laws. Even so, at minimum, the cleanup 
cost is estimated to be at least $50 million. However, this number does 
not include any costs for environmental cleanups such as water quality 
remediation, residential remediation or waste removal. Additional 
environmental remediation would multiply the minimum estimate. The 
State of New Mexico and the Navajo Nation are currently investigating 
these sites to determine what reclamation work is necessary and what 
funding sources could be used to conduct these cleanups. The State and 
the Navajo Nation are also seeking ways to conduct cooperative projects 
in areas where jurisdiction is unclear.
    Mr. Chairman and members of the Committee, I thank you for this 
opportunity to share New Mexico's and IMCC's perspective on abandoned 
mines and mining law reform. Again, welcome the opportunity to work 
with you in fashioning a meaningful hardrock AML program as part of 
mining law reform.

    The Chairman. Thank you very much.
    Ms. Struhsacker, go right ahead.

 STATEMENT OF DEBRA STRUHSACKER, NORTHWEST MINING ASSOCIATION, 
                            RENO, NV

    Ms. Struhsacker. Thank you, Mr. Chairman and members of the 
committee. My name is Debra Struhsacker and I am an 
environmental permitting and government relations consultant 
from Reno, Nevada.
    I am testifying today on behalf of the Northwest Mining 
Association as a policy expert on abandoned mines and as a 
member of the association's board of trustees. Our testimony is 
going to emphasize the progress that is being made today in 
reclaiming hardrock mines and offer some----
    [WITNESS OFF MIC.]
    Ms. Struhsacker [continuing]. Very important to do so from 
the perspective that the AML reclamation glass is not empty. We 
are making progress in reclaiming AML sites. We have heard 
about some of that progress today. My written remarks have a 
table in there that outlines efforts that the western States 
are making in reclaiming AML sites. We are making good 
progress.
    So the focus of our legislative dialog needs to be how do 
we fill the glass faster. How do we accelerate the pace of AML 
reclamation activities so we reclaim more sites sooner rather 
than later?
    We think the key to expedited cleanups of AML sites is 
twofold. One, we need more money, and two, we need to enact 
Good Samaritan liability protection for those who want to 
engage in voluntary reclamation of AML sites.
    When you look at the data that are available to us, the 
data that the Forest Service and the BLM have presented in that 
2007 report or the case histories that we present in table 2 of 
my written remarks, there is a pattern emerging, and that 
pattern is that private/public sector partnerships are having 
tremendous success, tremendous on-the-ground success, in 
addressing abandoned mine land problems. We also see, when we 
look at those data, that a key to increasing the number of 
partnerships is that Good Samaritan reliability relief that I 
mentioned before.
    I would like to turn your attention, if you would, to that 
chart. There is a copy in my written remarks. It is on page 10, 
if you want to look at it. I know you cannot read the writing 
per se on that, but I will walk you through what it is.
    On your left side of that chart, I have listed decade by 
decade mining districts in the western United States, starting 
at the top at 1840 and ending in the bottom at the year 2000.
    On the right-hand side of the chart, I have listed the 
dates of enactment of environmental laws and regulations in 
this country that pertain to mining.
    Now, the top half of the chart in yellow--it is pretty 
obvious that there are no environmental laws during that early 
decade, several tens of decades of mining. Spanning the period 
from, roughly, 1840 to 1960, there simply were no environmental 
laws applied to mining or anything else.
    On the green part of the chart, you start to see a number 
of environmental laws that have been enacted, all of which have 
a regulatory jurisdiction over mining, starting in 1966 and 
continuing all the way down to the bottom. The most recent one 
there was enacted in 2007.
    So the point is that abandoned mines were created during 
that period of no regulations, in the yellow part of the chart.
    There is one other point to, please, note from that chart. 
When you hear people say there are no environmental laws that 
apply to mining, please remember that chart. Please think of 
that green part of the chart. There are a lot of environmental 
laws that apply to mining.
    So these mines here tell the history of the West. The 
metals that were mined from these sites helped build the 
country, but unfortunately, we are now left with the legacy of 
the problems and safety hazards that they created.
    But I want to tell you that the environmental laws that you 
see in the green part of that chart guarantee that today's 
mines will not be abandoned mines of the future. Those 
environmental laws provide full, comprehensive protection at 
today's mine sites, and they also require comprehensive 
reclamation bonds. So today's mines are not going to be 
tomorrow's AML's.
    Now, sometimes you will hear people point to mines that 
were permitted in that upper part of that green area in the 
1960s, 1970s, and 1980s where there have been environmental 
problems, and those problems are due to the fact that those 
regulations were in their infancy. The regulations that we 
follow today have far more stringent requirements, and most 
importantly, the bonding that we have today is far more 
comprehensive than what was required then.
    We have heard a couple of the testifiers today talk about 
inventories of abandoned mines, and what we have heard is there 
is a large range of estimates of how many abandoned mines there 
are.
    But, Laura, if I could have that next chart, please, and 
that chart is, I think, on page 19 of the written remarks, if 
you want to look at them.
    There are several patterns that emerge from the 
inventories. Even if we may not know the exact numbers, we can 
say with fair confidence that there are three types of 
abandoned mine sites. There is landscape disturbance shown in 
green, safety hazards shown in yellow, and environmental 
problems shown in orange. All of the inventories pretty well 
agree that most of the problems are safety problems. About 20 
percent of the known AML's create safety problems. About 10 
percent create environmental problems.
    The other thing that is on that chart on the left-hand 
column--I am sorry--the middle column are the techniques that 
we have to deal with abandoned mines. The message I want to 
leave about that is that we have techniques, we have the 
engineering tools, we have the environmental restoration tools 
to take care of these sites.
    So as I mentioned earlier, we feel that the best way to 
accelerate the progress of reclamation activities is to provide 
funding and to enact Good Samaritan liability relief for 
voluntary reclamation. We are very supportive of Senator 
Salazar and very appreciative of the involvement he has had 
with that issue, and we supported the bill that you introduced 
last session and hope that we can advance that.
    So in conclusion, I want to thank you very much for the 
opportunity to testify on behalf of the Northwest Mining 
Association. I hope I have helped to frame this issue, put it 
into a historical context, to tell you that AML's are a finite 
problem, that today's mines are not going to become tomorrow's 
AML sites, and to describe some of the excellent progress that 
we are making in reclaiming the abandoned mine problem, and to 
ask you for your help to come up with a funding mechanism, come 
up with a Good Sam program. As an association, we stand ready 
to help you in any way we can.
    Thank you very much for this opportunity to testify.
    [The prepared statement of Ms. Struhsacker follows:]

Prepared Statement of Debra Struhsacker, Northwest Mining Association, 
                                Reno, NV
                              introduction
    My name is Debra Struhsacker. I am an Environmental Permitting and 
Government Relations Consultant from Reno, Nevada. I am testifying 
today on behalf of the Northwest Mining Association (NWMA) as policy 
expert on abandoned mines and as a member of the Association's Board of 
Trustees. NWMA would like to thank you for the opportunity to testify 
today to describe the progress being made in reclaiming abandoned 
hardrock mines and to offer our suggestions for policies that will 
accelerate the pace of this progress.
    NWMA is a 113 year old non-profit mining industry trade association 
headquartered in Spokane, Washington. Our 1,800 members reside in 35 
states and 6 Canadian provinces and are actively involved in 
exploration, mining and reclamation operations on BLM-and USFS-
administered public lands in every western state. Our broad-based 
membership includes many small miners and exploration geologists, as 
well as junior and large mining companies and suppliers of equipment 
and services to the domestic and global mining industry. More than 90 
percent of our members are small businesses or work for small 
businesses. Many of our members have extensive knowledge of the scope 
of the hardrock abandoned mine lands (AML) problem and first-hand 
experience in remediating AML environmental impacts and abating AML 
safety hazards.
    NWMA asked me to testify because I have extensive experience with 
AML policy issues. This experience includes working with the Western 
Governors' Association and the National Mining Association on the 
Abandoned Mine Land Initiative and co-authoring the 1998 National 
Mining Association document ``Reclaiming Inactive and Abandoned Mine 
Lands--What Really is Happening.'' NWMA is submitting that document as 
part of this hearing record. During the course of my career--working 
first as an exploration geologist and now as a mine permitting and 
regulatory expert--I have worked on numerous exploration and mining 
projects on public lands throughout the West and have seen first-hand 
the effects of historic mining and abandoned mines.
    All stakeholders in the dialogue about mining and its impact on the 
environment agree that cleaning up historic Abandoned Mine Lands (AMLs) 
to eliminate safety hazards and to minimize environmental impacts is an 
important public policy goal. The NWMA, along with the rest of the 
hardrock mining industry, has long supported the development of 
policies to encourage AML cleanup. NWMA presented testimony to the 
House Subcommittee on Energy and Mineral Resources in 2006 and 2007; we 
are placing copies of these testimonies in the record for this Senate 
hearing. As we have stressed in previous testimony and as we will 
emphasize today, the key to expediting cleanup of AMLs is to provide 
more funding and to enact Good Samaritan liability relief for voluntary 
AML cleanup efforts.
    120 years of mining precede the enactment of environmental laws
    Table 1 juxtaposes a partial history of mining in the western U.S. 
on the left side of the table against the evolution of the 
environmental laws and regulations that affect mining on the right side 
of the table. (All of the tables are included behind the text.) As you 
can see in the yellow top part of Table 1, mining in the western U.S. 
started almost 170 years ago in about 1840. The enactment of federal 
and state environmental laws, shown in green, did not start until the 
1960s--roughly 120 years later. As is readily apparent from Table 1, 
there were no environmental regulations applicable to hardrock mines 
before the 1960s. It is this unregulated era of mining that created the 
abandoned mines that are the subject of this hearing.
    The pre-regulation mining districts shown in the yellow part of 
Table 1 like the California Mother Lode Gold Rush, the Comstock Lode in 
Nevada, Central City, Colorado, Butte, Montana, the Black Hills of 
South Dakota, Socorro, NM, the Klondike in Alaska tell the story of the 
development of the West. These and countless other mining districts 
helped build America. Although we cherish the history and heritage they 
represent, we are now left to deal with a difficult legacy of the 
safety hazards and environmental problems this history has left behind.
    The wastes produced by mining and ore processing-waste rock, mill 
tailings, and smelter slags--were usually deposited adjacent to the 
operating facilities or directly down--gradient in the nearest valley 
or low spot, much as domestic wastes of the time were sent to the 
nearest moving water body. Gravity was considered the great equalizer--
the best friend of miners and other industrial waste generators of the 
time. Once the commercial ore was exhausted or market prices fell below 
the cost of extraction and processing, operators commonly abandoned 
sites with little, if any, thought to reclamation or reuse of the land.
    While this lack of environmental protection and reclamation 
measures seems unacceptable when viewed through the prism of our 
modern-day commitment to protect the environment, it is important to 
understand that mines of this bygone era were no different than other 
industries of the time. Environmental protection simply was not on 
anyone's radar screen and no one considered the long-term consequences 
of these mining practices.
    These mines provided the metals needed to build this country and to 
help win two world wars. In fact, the federal government operated a 
number of sites that are now some of the more challenging AML sites. 
The focus was on maximizing production and winning the wars--not on 
using mining methods designed to protect the environment. Because the 
American public benefited in the past from mining of these sites, we 
now have a public responsibility to develop policies and funding 
mechanisms to reclaim these sites.
    Please note that the 1872 Mining Law is not shown on Table 1. The 
reason for this is simple--the Mining Law is not an environmental law. 
Rather, the Mining Law governs land tenure. It gives U.S. citizens the 
right to enter upon public lands to explore for hardrock minerals, and 
to use and occupy public lands for mineral development and mining 
purposes.
    Although mining critics are fond of saying that the Mining Law 
needs to be amended because it does not include any environmental 
provisions, this is a red herring. Today, the environmental laws shown 
in Table 1 produce highly regulated and environmentally responsible 
mines that use modern environmental protection technologies to 
safeguard the environment.
    The environmental protection and bonding requirements for modern 
mines guarantee that today's mines will not become tomorrow's AMLs for 
two reasons. First, modern mines are designed, built, operated, and 
closed using state-of-the-art environmental safeguards that minimize 
the potential for environmental problems to develop after mining is 
completed. Second, federal and state regulators have adequate 
reclamation bond monies in the event a mine operator goes bankrupt or 
fails to perform the necessary reclamation. The amount of required 
financial assurance is based on what it would cost BLM, U.S. Forest 
Service, or a state agency to reclaim the site using third-party 
contractors to do the work. By law, the sufficiency of these 
reclamation bonds is reviewed and adjusted on a regular basis to make 
sure they keep pace with inflation and on-the-ground conditions.
    BLM Director Henri Bisson's statement at the January 2008 hearing 
that BLM has roughly $1 billion in reclamation bond monies for hardrock 
mineral projects is compelling evidence of a robust bonding program for 
modern mining operations. Similarly, federal and state agencies in 
Nevada recently announced that they jointly hold $1.031 billion in 
reclamation bonds to guarantee reclamation of Nevada mines. Nevada's 
reclamation bond coffers have grown rapidly since 1990 when Nevada 
State law NRS 519A became effective and required all mining operations 
and exploration projects that disturb more than five acres to provide a 
reclamation bond. Nationwide, this combination of reclamation bonds and 
environmental laws and regulations ensures that the AML problem is a 
finite and historical problem and not one that will grow in the future.
    modern bankrupt mines should not be confused with historic amls
    There is no question that the reclamation bonds at some mines 
permitted and developed in the 1970s and 1980s were insufficient to 
reclaim these sites, resulting in a public liability. However, if 
permit applications for these mines were submitted today and evaluated 
and bonded under current federal and state environmental and bonding 
requirements, we are confident that a different outcome would result 
because today's requirements are much different than they were 20 to 30 
years ago.
    As Table 1 shows, mining regulatory programs were in their infancy 
in the 1970s and 1980s. The Forest Services' 36 C.F.R. Subpart 228A 
hardrock mining regulations became effective in 1974. BLM's surface 
management regulations governing hardrock mining (43 C.F.R. Subpart 
3809) went into effect in 1981. In 2001, BLM updated the 3809 
regulations (see Table 1) and added detailed requirements at 43 C.F.R. 
3809.420(11) governing mine waste testing and management and new 
bonding requirements at 43 C.F.R.3809.500. Among other things, the 
updated 3809 rules require detailed waste characterization studies to 
identify materials that have the potential to generate acid or to leach 
metals, and specific mine waste management mandates that require 
operators to `` . . . handle, place, or treat potentially acid-forming, 
toxic, or other deleterious materials in a manner that minimizes the 
likelihood of acid formation and toxic and other deleterious leachate 
generation.'' Had these requirements been in place many of the water 
quality problems that have developed at some 1970s- and 1980s-vintage 
mines would not have occurred because BLM and the Forest Service would 
have required dramatically different mine waste testing and management 
programs than were the norm 20 or 30 years ago.
    Secondly, as discussed above, there has been a significant 
expansion in bonding requirements compared to the early years of state 
and federal mining regulatory programs. Examples of some of the new 
bonding requirements include the following:

   Bonds are now based on detailed reclamation cost 
        calculations that use third-party contractor costs based on 
        Davis-Bacon wage rates;
   Bonds now include up to a 40 percent surcharge for agency 
        costs to manage the reclamation effort;
   Bonds for some mines now include long-term financial 
        assurance if site-specific conditions suggest that long-term 
        maintenance or monitoring may be needed;
   Bonds now include costs to manage the process fluid 
        inventory (i.e., fluids in ponds and tailings impoundments) 
        that must be dealt with before a site can be closed and 
        reclaimed; and
   Bond amounts are reviewed on a regular basis and adjusted as 
        necessary to reflect inflation and site conditions.

    Additionally, the experience gained in reclaiming bankrupt sites 
has led to some recent refinements in how bonds are calculated and the 
scope of reclamation bonds. The U.S. Forest Service updated its bonding 
requirements in 2004. The BLM revised its bonding requirements in 2001. 
In Nevada, the Nevada Division of Environmental Protection worked with 
BLM, the Forest Service, and the Nevada mining industry to update 
Nevada's bonding requirements in response to lessons learned using bond 
monies to reclaim several bankrupt sites. Other states, such as 
Colorado and Montana have done likewise. NWMA recently developed a 
white paper that documents the evolution and refinement of Nevada's 
bonding requirements that we are submitting as part of the record for 
this hearing. This white paper demonstrates that existing federal and 
state laws and regulations already give regulators the necessary tools 
to protect the environment, to ensure proper reclamation, and to deal 
effectively with problems, gaps, or unforeseen situations should they 
develop in the future.
 how do we accelerate the progress of current aml reclamation efforts?
    Although the scope of the AML problem is large, state and federal 
agencies--in cooperation with communities, mining companies, and other 
private-sector interests--are making steady progress in reclaiming 
AMLs. Thus, as we consider the best ways to tackle the AML problem, it 
is important to start from the perspective that the glass is not empty. 
Progress is being made. The focus of the AML legislative dialogue 
should be to create policies that accelerate the pace of AML 
reclamation so that more sites can be reclaimed sooner rather than 
later.
    Last year, BLM and the Forest Service released a report entitled 
Abandoned Mined Lands--A Decade of Progress that showcases a number of 
successful AML reclamation efforts. In the time available to prepare 
this testimony, NWMA compiled the preliminary list of state-led AML 
reclamation projects shown in Table 2 to augment the information 
presented in the BLM/Forest Service report. Although far from a 
complete inventory, this snapshot suggests several interesting trends.
    It is readily apparent from our research that some western states 
have undertaken a number of successful AML reclamation efforts. States 
with active mining typically have the largest and most productive AML 
reclamation programs. The correlation is simple--states like Nevada use 
mining fees to fund some of the AML reclamation program. Conversely, 
states with little or no mining have very poorly funded programs and in 
some cases no program at all. South Dakota is an interesting example. 
Back in the 1990s, South Dakota had a very progressive and effective 
AML advisory program. However, now that there is virtually no hardrock 
mining in the state, this program no longer exists despite the fact 
that the State has identified at least 900 AML sites that need to be 
reclaimed.
    The Nevada Division of Minerals' AML program is representative of 
an effective, well-funded state AML program. This program receives 
funding from a $1.50 fee on county mining claim filings and a one-time 
fee of $20 per acre of new permitted mining disturbance. The program is 
supplemented by small grants from BLM's abandoned mines program and the 
US Army Corps of Engineers (USACE) Restoration of Abandoned Mine Sites 
(RAMS) program\1\. In 2006, Nevada's AML program secured 540 hazards 
with approximately $350,000 in funding. The bulk of the work includes 
fencing or closing mine openings on federal public land. Since the 
inception of the program in 1987, the Nevada Division of Minerals has 
secured over 9,000 dangerous abandoned mine openings.
---------------------------------------------------------------------------
    \1\ The RAMS program was created in the 1999 WRDA and has 
partnering agreements in place with several federal and state agencies, 
tribes and non-profits, including the BLM, USFS, NPS, EPA, Navajo 
Nation, Nevada Division of Minerals, Montana DEQ, Colorado Division of 
Minerals & Geology and the South Yuba River Citizens League. Through 
this process 64 planning, database, technical studies and design 
projects have been initiated with 23 different partners in 11 western 
states. This program was the primary source of additional funding 
needed to reclaim a number of the Nevada bankrupt mines with inadequate 
bonds in the early part of this decade.
---------------------------------------------------------------------------
    Table 2 also demonstrates that collaborative partnerships involving 
state and federal agencies, communities, mining companies, other 
private-sector interests, and conservation groups have a proven track 
record of achieving spectacular on-the-ground success in remediating 
environmental problems and abating safety hazards at AML sites 
throughout the West. This suggests that future AML policies should 
recognize that private-public sector partnerships which capitalize upon 
the talent, financial resources, and expertise in both sectors will 
result in the most cost effective AML program.
  what do aml inventories tell us about the scope of the aml problem?
    As discussed in the BLM/Forest Service report, there are a number 
of AML inventories, each with different estimates of the number of AML 
sites. Some of the divergence is due to different methodologies in how 
sites are catalogued. Some AML inventory efforts have considered a 
``site'' to be any single opening, mining or exploration disturbance or 
mining related feature. Other state AML programs and the mining 
industry define ``site'' to include multiple features that can be 
addressed with coordinated and consolidated reclamation and remediation 
measures. Consequently, there is no complete count, but we know for 
certain that there are many AML sites that require our attention.
    While the desire to have a complete inventory of hardrock AML sites 
in the western US was perhaps an appropriate focus ten or fifteen years 
ago, we believe that enough is now known about the scope of the 
problem. The current AML cleanup progress clearly demonstrates that a 
complete inventory is not necessary because on-the-ground AML cleanup 
can occur concurrently with ongoing AML inventory efforts. Therefore, a 
complete AML inventory is not a first or even a critical step. The 
inventory can be built at the same time that AML cleanup efforts are 
underway.
    We have a good idea where most of the high-priority environmental 
sites are (although we may not understand the complexities of each 
site.) But in some settings, there probably are unmapped safety hazards 
that are obscured by vegetation or are in remote locations.
    Although the AML inventory numbers vary, there is good consensus 
about the broad characteristics of the AML problem. As shown in Table 
3, most AML sites create unsightly landscapes and public safety 
hazards, with roughly 10 percent causing environmental problems. Some 
sites may have a combination of landscape disturbance, safety hazards, 
and environmental problems
    Table 3 also lists some typical challenges at AML landscape, 
safety, and environmental sites. The problems shown at safety hazard 
sites pose the most imminent threat to people. According to the BLM/
Forest Service report, approximately 25 people per year die in 
accidents involving unsecured historic mine shafts, tunnels, buildings, 
etc. AML environmental problems typically arise from the interaction of 
streams and precipitation with old mine wastes. The resulting water 
quality impairment is especially harmful to fish and other aquatic 
species. Dust due to wind erosion of tailings piles can also create 
significant problems at some sites--especially sites in arid 
environments.
    AML policy discussions often focus on the worst and most complex 
environmental problems at AML sites, which are a subset of the total 
AML problem. This mischaracterization of the global AML problem has 
probably contributed to the lack of progress in developing federal 
policies and programs to solve the AML problem. Although remediating 
AMLs with environmental problems is important, in many settings, safety 
hazards deserve our immediate attention. Therefore, we should focus 
first-priority AML funds on eliminating safety hazards at abandoned 
mine sites located near population centers and frequently used 
recreation areas.
    As shown in Table 3, there are a number of AML safety hazard 
abatement and cleanup and restoration techniques using modern 
engineering designs and environmental protection methods that can 
reduce and even eliminate safety hazards and environmental problems at 
AML sites. These techniques have a proven track record of successfully 
reclaiming many AML sites.
    Although many of the response measures shown in Table 3 are 
expensive--especially those used to remediate environmental problems--
they are technically straightforward, well understood, and are 
generally quite effective in improving environmental conditions at AML 
sites. It is important to understand, however, that each AML site is 
different. The response measures shown in Table 3 must be custom-
tailored to fit the site-specific conditions of a particular site. A 
cookie-cutter, one-size-fits all approach will not achieve optimal 
results and may even fail to address the problem. At many of the AML 
reclamation examples shown in Table 2, federal and state agencies, 
working in concert with community and private-sector partners, have 
successfully customized and fine-tuned these techniques to achieve 
optimal reclamation results at specific AML sites.
          federal funding is needed to accelerate aml cleanups
    NWMA and other industry interests have long supported creating a 
federal hardrock AML fund using revenue generated from a net royalty on 
new claims to support, augment and expand existing AML programs. In 
order to build the fund more rapidly, the fund should solicit donations 
from persons, corporations, associations, and foundations. Congress may 
also wish to infuse the fund with some initial seed money in 
recognition that America benefited greatly from the metals produced 
from historic mines which justifies contributing some taxpayer monies 
to the fund.
    NWMA recommends that the states that generate royalty revenues 
should be the first in line to receive at least a portion of the 
federal AML funds. We also believe that states should to take the lead 
in administering the AML program. As our research shows, many states 
already have effective AML programs. We see no need to re-invent the 
wheel by creating a new federal AML bureaucracy. This would be an 
inefficient use of the monies collected and would reduce the amount of 
money available for on-the-ground remediation and reclamation. Because 
each hardrock AML site has unique geology, geography, terrain and 
climate; a uniform, one-size-fits-all program will not achieve optimal 
results. The state AML programs are in the best position to prioritize 
where federal AML funds should be spent within the state and to perform 
hardrock AML hazard abatement, remediation and reclamation, in 
cooperation with federal land management agencies, industry, 
communities, conservation groups, and NGOs.
    We also caution against creating a fund distribution formula or 
method that invites competition between states for AML funds. This 
occurred during the initial years of the SMCRA AML program and led to 
inaccurate, inconsistent, and even aggrandized AML inventories with 
inflated reclamation costs according to a 1988 GAO study.
   good samaritan legislation is critical to facilitating voluntary 
                            aml reclamation
    Although more funding is a key component of solving the AML 
problem, funding alone is not the best way to accelerate the pace of 
AML reclamation activities. Enacting Good Samaritan liability relief is 
also essential. Concerns about liability exposure stemming from the 
Clean Water Act (CWA), CERCLA, and other laws are significantly 
chilling Good Samaritan AML clean ups.
    Under these laws, a mining company, state or federal agency, NGOs, 
individuals or other entities that begin to voluntarily remediate an 
abandoned mine site could potentially incur ``cradle-to-grave'' 
liability under the CWA, CERCLA, and other environmental laws, even 
though they did not cause or contribute to the AML environmental 
problem. Furthermore, the CWA may require entities that undertake 
voluntary AML projects to prevent discharges to surface waters from the 
AML in perpetuity, unless those discharges meet strict effluent 
limitations and comply with stringent water quality standards, which 
may not be possible; and in any event, may be so expensive that no 
state, company, individual, or other entity would undertake a voluntary 
cleanup.
    Virtually everyone who has looked at the AML issue in the west has 
recognized and documented the legal impediments to voluntary cleanup of 
AMLs. Policymakers and independent researchers including the National 
Research Council, the Western Governors' Association, and the Center 
for the American West have urged Congress to eliminate these 
impediments. For example, the National Academy of Science 1999 report 
to Congress entitled ``Hardrock Mining on Federal Lands'' makes the 
following specific Good Samaritan recommendation:

          Existing environmental laws and regulations 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 . . .
          To promote voluntary cleanup programs at abandoned sites, 
        Congress needs to approve changes to the Clean Water Act and 
        the CERCLA legislation to minimize company liabilities.'' (NRC 
        report, pages 104 and 106.)

    The state agencies listed in Table 2 emphasized the importance of 
Good Samaritan liability relief in enabling them to expand the scope of 
their AML reclamation programs. In the absence of such relief, most of 
the state agencies said they are avoiding sites with mine drainage due 
to concerns about CWA liability exposure.
    Several Good Samaritan bills have been introduced in the past, but 
only the bill that Senators Salazar and Allard introduced in 2006 (S. 
1848), passed out of committee. We strongly support the Salazar/Allard 
approach to Good Samaritan legislation which would accomplish many of 
the key Good Samaritan objectives shown in Table 4.
    The combined effect of a federal AML reclamation fund and Good 
Samaritan liability relief is the best way to accelerate the pace of 
AML reclamation. It is also the best way to get the most bang for the 
buck because financial and in-kind contributions from the private 
sector, communities, foundations, and other sources will reduce the 
amount of funding that needs to come from royalty payments. Finally, 
Good Samaritan liability relief will facilitate public--private sector 
partnerships which we know to be the best solution to the AML problem. 
As Congress deliberates changing the Mining Law to include an AML 
funding mechanism, we urge you to address the equally important issue 
of providing Good Samaritan liability relief for voluntary AML 
cleanups.
                               conclusion
    The NWMA very much appreciates this opportunity to testify today to 
put AMLs into the proper historical perspective, to explain why AMLs 
are a finite problem and how today's environmental regulations and 
bonding requirements prevent the creation of new AMLs, to describe some 
of the excellent progress that is being made in reclaiming AMLs, and to 
present our recommendations for moving forward. We believe the AML 
problem is manageable and solvable because we know where AML sites are 
located, we understand the problems they are creating, and we have the 
engineering, environmental protection, and reclamation techniques 
needed to solve these problems. But our AML tool kit is missing two 
essential tools--adequate funding and Good Samaritan liability relief 
for voluntary AML cleanup projects.
    So we conclude by asking for your help. Please add a federal AML 
fund and Good Samaritan liability relief to the AML tool kit. These two 
policies offer the best opportunity to accelerate the progress that is 
being made in abating AML safety hazards and remediating AML 
environmental problems. The NWMA stands ready to work with you and to 
help in any way we can to achieve what we all agree is an important 
goal--expediting AML reclamation.
    I thank you for this opportunity to testify on this important issue 
and will be happy to answer any questions.

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                   glossary of terms used in table 2
    Abandoned--A site with no private owner of record typically on land 
managed (and often owned) by a federal, state, or local government 
agency. These sites also have been referred to as ``orphaned''.
    Adit--Horizontal opening from the surface to an underground mine. 
Also known as a tunnel.
    AML Improvement Project--A collective and inclusive term meaning 
any combination of abatement, reclamation, or remediation measures that 
address one or more safety or environmental problems at an AML site.
    Backfilling--Process of placing fill material (including mine 
waste) into a mine opening.
    Bulkhead (Bulkhead seals)--Plugs in horizontal mine openings (adits 
or internal tunnels) used to obstruct entrance and to curtail or divert 
water flows. May be made of various materials and may have man-gates or 
doors included.
    Covered Repository/Repository--Site, usually lined, in which mine 
waste is consolidated. Usually covered with topsoil or a combination of 
impermeable covers and topsoil. Domestic waste sites are examples of 
covered repositories.
    Diversion Ditches--Constructed ditches placed around mine waste and 
repositories to divert clean water around the sites.
    Erosion BMPs--``Best Management Practices'' using various 
techniques to minimize and control wind and water erosion of soils and 
waste at reclaimed mine and mill sites.
    Grade--Construction process that reduces high-angle slopes and 
produces engineered angles to reclaimed sites prior to topsoil 
placement and revegetation.
    Grates--Covers over mine openings to prevent human access but allow 
air-flow and ingress and egress of various wildlife species such as 
bats and owls. May be called ``bat grates'' or ``owl grates'', and may 
be made of various materials.
    Inactive--A site on patented/private land that, in contrast to an 
abandoned site, has an owner or owners of record. However, inactive 
mine owners are not typically the entity involved in the past mining 
activities that created the safety hazards or environmental problems. 
Moreover, some owners of inactive mines do not have the financial 
resources necessary to correct the safety and environmental problems.
    In Situ--The process of regrading, covering, capping, or other 
measures to stabilize previously mined materials in place.
    Neutralize--The process of adding amendments such as lime, 
limestone, or other alkaline agent to reduce acidity in acid-generating 
mine wastes.
    Open Stope--A portion of an underground ore area that is mined out, 
or removed, to the surface producing an opening at the surface that is 
neither a shaft nor an adit. Open stopes are particularly dangerous.
    Panels--Pre-constructed or constructed on-site, panels are slabs 
used to cover shafts or open stopes. They may be constructed of 
concrete, wood, polyurethane foam, or other materials.
    Portal--The surface mouth of a tunnel or an adit allowing 
horizontal access to an underground mine.
    PUF--``Polyurethane Foam''. An inexpensive, expanding foam material 
widely utilized to close shafts and adits. Once the PUF plug hardens or 
``sets'', it usually is covered with backfill and/or topsoil material.
    Reclamation--The process of returning a site to a beneficial post-
mining land use.
    Remediation--The process of improving environmental conditions and 
reducing environmental risks. The terms ``remediation'' and ``cleanup'' 
are used synonymously.
    Removal Actions--The process of removing and relocating previously 
mined materials to a mine waste disposal facility.
    Revegetation--The process of seeding a reclaimed area. This 
definition includes the application of fertilizers and mulches as each 
site may, or may not, require.
    Riparian Restoration--The process of returning the banks of a 
water-body (streams, rivers, ponds, lakes) to its previous undisturbed 
configurations.
    Settling Ponds--Engineered and constructed small ponds used in some 
reclamation projects to hold waters for treatment or until suspended 
sediments drop out, allowing clean water to exit the ponds.
    Steel Netting--Constructed steel cable nets used to close larger 
diameter shafts and open stopes while allowing ingress and egress of 
wildlife species.
    Site--A specific ``project''. A project can be a district, area, 
property, or ownership block and can have multiple ``features'' such as 
adits, shafts, tailings facilities, and smelters, singly or 
collectively. However, a project also can entail, for example, closure 
of a single feature. The important point is that a ``one-size-fits-
all'' definition for an AML site is not appropriate.
    Shaft--Vertical entrance to an underground mine or ventilation or 
safety access to an underground mine.
    Stream Diversion--Engineered process of re-routing a stream, creek, 
or flowing water body away from or around contact with mining wastes.
    Stream Restoration--The process of returning a stream, creek, or 
flowing water body to its pre-disturbance configurations.
    Wetland Restoration--The process of re-establishing a wetland where 
it once existed or returning a wetland system to its pre-disturbance 
configurations.

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         Table 4.--Key Components of Good Samaritan Legislation
   Provide both Clean Water Act and CERCLA liability 
        protection.
   Create Good Samaritan permits that provide unambiguous and 
        complete legal liability protection against specified federal, 
        state, and local environmental laws for AML cleanup activities 
        that are performed according to the work plan authorized in the 
        permit.
   Stimulate greater private-sector involvement in direct 
        cleanup efforts and in making financial and in-kind 
        contributions towards agency-led cleanup projects.
   Allow Good Samaritans to maximize the amount of money spent 
        on the ground by streamlining the permitting process and 
        eliminating the requirement to conduct a Potentially 
        Responsible Party (PRP) search at sites that will be reclaimed 
        using private funding. It should not matter whether there might 
        be a PRP. The goal should be environmental improvement, not 
        finding someone to blame.
   Allow entities--including mining companies--that have no 
        previous connection to a site and that did not create 
        environmental problems at an AML to qualify as Good Samaritans.
   Eliminate liability exposure associated with performing the 
        site work necessary to determine the scope of the AML 
        environmental problems and to develop appropriate remediation 
        plans.
   Make federal land management agencies and State AML Programs 
        the lead agency(s) in reviewing and approving Good Samaritan 
        permit applications, with assistance from State environmental 
        permitting authorities for those states where EPA has delegated 
        Clean Water Act authority.
   Encourage meaningful public input and collaboration in the 
        permitting process and discourage the misuse of the public 
        involvement process as a vehicle for delaying project cleanups.
   The environmental requirements for a Good Samaritan project 
        should be wrapped into a single permit. The permit should be 
        approved only if the project is technically sound and promises 
        overall improvement to the environment and/or securing of 
        safety hazards.
   Allow incremental cleanups using technically sound 
        remediation measures that will result in an improvement to the 
        environment--even if they will not result in the complete 
        cleanup of all contaminants at an abandoned mine land site or 
        the attainment of all otherwise applicable environmental 
        standards, such as stringent water quality standards.
   Give the permitting authority(ies) discretion to make site-
        specific adjustments to environmental requirements and 
        standards under state and federal environmental laws that could 
        otherwise thwart Good Samaritan remedial actions.
   Recognize that reprocessing is a viable site environmental 
        remediation technique that removes metal contaminants from 
        historic mine wastes and produces a more chemically stable and 
        benign waste product that can then be stored in a properly 
        engineered facility.
                                Addendum
                 i. introduction and executive summary
    The Northwest Mining Association (NWMA) is submitting this addendum 
to supplement the testimony we provided at the March 12, 2008 Senate 
Energy and Natural Resources Committee hearing on Abandoned Mine Lands 
and Uranium. The focus of this addendum is to provide the Committee 
with a brief discussion of some concerns we have about the report 
entitled ``HARDROCK MINING Information on Abandoned Mines and Value and 
Coverage of Financial Assurances on BLM Land'' that Ms. Robin Nazzaro, 
the witness from the U.S. General Accountability Office (GAO), 
presented at the hearing.
    Our review of the GAO report revealed two issues of concern:

   First, the report contains inaccurate and therefore 
        misleading statements about the expenditures federal agencies 
        (EPA, BLM, and OSM) have made during the period 1998--2007 to 
        reclaim abandoned mines because roughly 30 percent of the $2.6 
        billion expenditure discussed in the report is for sites that 
        either are not abandoned mines and/or are not on public lands 
        open to operation of the U.S. Mining Law.
   Secondly, GAO's report raises concerns about the adequacy of 
        the financial assurances BLM is holding to reclaim hardrock 
        mineral projects but presents no useful information about the 
        nature of the under-bonded projects that BLM, the Committee, 
        and the public can use to evaluate whether there is a gap that 
        needs to be filled in BLM's bonding policies.

    Given the inaccurate and therefore misleading characterization of 
AML cleanup expenditures and the lack of adequate information about 
BLM's apparent bonding shortfall, the Committee may wish to ask the GAO 
to revise its report. The following is a more detailed discussion of 
our concerns.
  ii. the gao report mischaracterizes federal aml cleanup expenditures
    According to the GAO report, the Environmental Protection Agency 
(EPA), the U.S. Bureau of Land Management (BLM), the Forest Service, 
and the Office of Surface Mining Reclamation and Enforcement (OSM) 
spent $2.6 billion during fiscal years 1997 through 2007 cleaning up 
abandoned mines. Table 6 on page 23 of the GAO report, ``BLM, EPA, and 
OSM Expenditures to Cleanup Abandoned Hardrock Mines, by State, Fiscal 
Years 1988 to 2007,'' lists the expenditures made in each state and the 
percentage of the total $2.4 billion spent in each state.\1\
---------------------------------------------------------------------------
    \1\ The text of the GAO report states that the expenditure analysis 
covers fiscal years 1997 through 2007. The 1988 date listed in the 
title of Table 6 appears to be an error. The $2.6 billion of 
expenditure discussed in the GAO report includes Forest Service 
expenditures for AML cleanup on National Forest System lands. Table 6 
of the GAO report does not include the National Forest System lands 
expenditures and thus totals $2.4 billion rather than $2.6 billion.
---------------------------------------------------------------------------
    In the context of the policy question of how to amend the U.S. 
Mining Law to develop an AML reclamation fund to reclaim abandoned 
hardrock (i.e., Mining Law) mines, this expenditure figure is 
misleading for two reasons:

          1) It includes a number of sites in mid-western, southern, 
        and eastern states that do not have public lands that are open 
        to location under the Mining Law; and
          2) For the most part, the expenditures in the non-Mining Law 
        states appear to be EPA expenditures at Superfund sites that 
        are smelters and refineries that processed minerals produced by 
        mining activities that occurred elsewhere, and/or are for 
        mining activities on lands that are not governed by the Mining 
        Law.

    Table 1 shown on page 3 of this addendum modifies GAO's Table 6 to 
highlight the expenditures in states that do not have public lands open 
to location under the Mining Law or germane to the AML reclamation 
funding and policy questions that were the topic of the March 12th 
hearing.
    As shown in Table 1, nearly 35 percent of the funds shown in GAO's 
Table 6 are for sites that do not belong in an analysis of the scope of 
the AML problem on lands governed by the Mining Law. Therefore, the GAO 
report is inaccurate and misleading. It obscures the actual federal 
expenditures to reclaim AMLs in western states with public lands that 
are open to mineral entry under the U.S. Mining Law and thus adds 
confusion rather than clarification. In order to make a more accurate 
and meaningful contribution to the Committee's database and analysis of 
the hardrock AML problem in the context of the Mining Law legislative 
debate, the Committee may wish to ask GAO to revise its report to focus 
solely on the AML issue in states with public lands open to the 
operation of the U.S. Mining Law.

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 ii. gao's analysis of the adequacy of blm's reclamation bond holdings 
               lacks sufficient information to be useful
    GAO's report describes an apparent shortfall in BLM's hardrock 
reclamation bond holdings for 52 projects nationwide based on an 
examination of BLM's LR 2000 database. As shown in Table 9 on page 28 
of the GAO Report, Nevada had the greatest number (28) of inadequately 
bonded projects; Utah had five; California, Colorado, Oregon, and 
Wyoming each had four; Arizona had two; and Idaho had one.
    It is unfortunate that the GAO Report does not provide more detail 
on the nature of the under-bonded sites because this detail is 
necessary to determine the reason(s) for these inadequate bonds. 
Without more detailed information, there is no way to make a useful 
analysis of why the bonds are inadequate--and more importantly--to 
determine what needs to be done to address this shortfall.
    Perhaps the lack of analysis in the GAO report reflects GAO's 
concerns that the data examined and described in its report may not be 
reliable:

          This Bond Review Report is generated from BLM's automated 
        information system--LR 2000. Although the LR 2000 data are of 
        undetermined reliability, our limited assessment of these data 
        indicates that they are appropriate as used and presented in 
        this testimony, and we do not base any conclusions or 
        recommendations on them. (GAO) Report, page 4)

    NWMA urges the Committee to use similar caution in assessing the 
importance of GAO's analysis and meaning (if any) of GAO's findings 
regarding the adequacy of BLM's bonding program. There simply is not 
enough verifiable or detailed information in the GAO report on which to 
base any conclusions on the adequacy of BLM's bonding program or to 
make any recommendations regarding the bonding program.
    Because the number of under-bonded sites identified in the LR 2000 
database is fairly limited (only 52 sites nationwide) the Committee may 
wish to ask GAO and BLM to provide additional information about these 
sites. The LR 2000 database includes sites that are inactive but have 
case files that have not yet been closed. It is quite possible that 
site-specific information could reveal that some of the sites 
identified as having inadequate bonds based on the LR 2000 database are 
old projects that are no longer active and were bonded years ago when 
BLM's bonding requirements were considerably less comprehensive and 
stringent. At other sites there may be specific reasons that should be 
evaluated in the context of whether they represent discrete gaps in the 
current bonding program that need to be filled.
    NWMA recently prepared a white paper describing the evolution of 
federal and state reclamation bonding requirements for hardrock 
exploration and mining projects (see Exhibit A). Based on the findings 
in this white paper, NWMA is confident that if an analysis of the 52 
under-bonded projects in the GAO report reveals gaps in BLM's current 
bonding requirements, the agency already has sufficient authorities to 
correct any identified shortcomings.
    The white paper describes how the Nevada mining industry and state 
and federal regulators recently worked together to update and refine 
bonding requirements. The resulting modifications to the Nevada bonding 
program reflect a collaborative effort to develop comprehensive and 
conservative bonds that consider all likely contingencies based on 
agency costs to implement, manage, and complete reclamation of sites 
requiring governmental intervention. These changes were made using 
existing authorities which give state and federal regulators the 
necessary tools to protect the environment, to ensure proper 
reclamation, and to deal effectively with problems, gaps, or unforeseen 
situations should they develop in the future.
    GAO should revise its analysis of the scope and adequacy of 
reclamation bonds in Nevada using current and agency-verified data. In 
a recent news release (see Exhibit B), the Nevada Division of 
Environmental Protection, the Nevada Division of Minerals, the BLM, and 
the U.S. Forest Service announced that they cumulatively hold $1.031 
billion in reclamation bonds for hardrock mineral exploration and 
mining projects in Nevada. This news release states that these agencies 
will use this bond reserve to reclaim sites in the event an operator 
goes bankrupt of fails to properly reclaim a site.
    Although there may be a few active projects in Nevada or in other 
states at which the reclamation bonds need to be increased, current 
bonding regulations already give state and federal regulators the 
necessary authority to require operators to provide additional 
financial assurance. At a minimum, the 43 CFR 3809 regulations give BLM 
the authority to require operators to update or modify Plans of 
Operation to reflect on-the-ground developments. These Plan updates and 
modifications typically include increases in the amount of required 
financial assurances. The State of Nevada's NAC 519A bonding 
regulations require that bonds be reviewed and updated at least every 
three years and sooner if the project is modified.
    The bonding shortfall described in the GAO report needs to be 
reevaluated in light of current information and existing regulatory 
authorities. If a site-specific analysis of the under-bonded projects 
reveals that some of the projects in question are still active, BLM 
should be encouraged to demand additional financial assurance as 
authorized and mandated in the 43 CFR 3809 regulations.
   Exhibit A--The Evolution of Federal and Nevada State Reclamation 
   Bonding Requirements for Hardrock Exploration and Mining Projects
   a case history documenting how federal and state regulators used 
   existing regulatory authorities to respond to shortcomings in the 
                      reclamation bonding program
                   introduction and executive summary
    This Northwest Mining Association (NWMA) white paper documents the 
evolution of the federal and the Nevada state bonding requirements for 
hardrock exploration and mining projects. Although this white paper 
focuses primarily on Nevada--the state with the most exploration and 
mining activity on federal land and the hub of the U.S. gold mining 
industry--other western states have similar regulatory programs and 
reclamation bonding requirements for hardrock mineral activities.
    Key findings in this white paper include:

   The Nevada mining industry and state and federal regulators 
        recently worked together to update and refine bonding 
        requirements.

    --The resulting modifications to the Nevada bonding program reflect 
            a collaborative effort to develop comprehensive and 
            conservative bonds that consider all likely contingencies 
            based on agency costs to implement, manage, and complete 
            reclamation of sites requiring governmental intervention.

   Existing federal and Nevada state laws and regulations 
        governing hardrock exploration and mining clearly provided the 
        necessary authority and flexibility for regulators to make 
        changes in response to the problems encountered during agency 
        reclamation of several bankruptcy sites.

    --Federal and Nevada regulators--with the mining industry's full 
            participation and concurrence--have significantly improved 
            and expanded reclamation bonding requirements in the last 
            few years based on the lessons learned at the bankruptcy 
            sites.

   Existing federal and Nevada state laws and regulations 
        include comprehensive environmental protection and reclamation 
        bonding requirements for hardrock mines.

    --These laws and regulations already give regulators the necessary 
            tools to protect the environment, to ensure proper 
            reclamation, and to deal effectively with problems, gaps, 
            or unforeseen situations should they develop in the future.

   The recent changes that federal and Nevada regulators made 
        to the bonding program clearly demonstrate that the current 
        federal and state regulations work well.
   The sweeping changes to the nation's environmental and 
        regulatory programs governing hardrock mining that are included 
        in the House Mining Law bill (H.R. 2262) are not needed.

    --The environmental provisions in H.R. 2262 are solutions in search 
            of a problem which seek to fix a system that is working 
            well and does not need ``fixing.''
 historical overview of federal and nevada reclamation bonding programs
The U.S. Forest Service Has Required Reclamation Bonds Since 1974
    The U.S. Forest Service (USFS) has had bonding requirements for 
mineral projects on National Forest System lands dating back to 1974. 
The USFS's bonding program is included in Section 13 of the USFS's 
surface management regulations at 36 C.F.R. Part 228 Subpart A (``the 
228A regulations''.) In contrast to the original version of the Bureau 
of Land Management's (BLM's) regulations, which did not require bonds 
for small projects, the USFS regulations have always given District 
Rangers the discretionary authority to require a reclamation bond for 
any mineral activity that requires a Plan of Operations. Therefore, 
since 1974 when the 228A regulations went into effect, the USFS has 
almost always required a bond for all exploration road building, 
trenching, and drilling projects and for all major mineral projects on 
National Forest System lands. Like the BLM bonding program described 
below, when calculating bonds for operations on National Forest System 
lands, the agency assumes it will perform the reclamation work using 
government contracting procedures.
BLM Has Required Bonds Since 1981
    Since 1981, companies conducting exploration or mining activities 
affecting more than five acres of BLM-administered public lands have 
had to secure BLM's approval of a Plan of Operations that includes a 
Reclamation Plan and a reclamation cost estimate, and have also had to 
provide BLM with a reclamation bond. This bonding requirement is part 
of BLM's Surface Management Rules for Hardrock Minerals at 43 C.F.R. 
Subpart 3809 (``the 3809 regulations.'') The amount of the required 
bond reflects the assumption that BLM--not the company--will perform 
the reclamation using third-party contractors in accordance with 
government contracting procedures. This means the reclamation cost 
estimate is calculated using Davis-Bacon wage rates and includes 
government administration fees and other charges related to BLM's 
management of the reclamation effort.
    The original 1981 version of the 3809 regulations did not include a 
bonding requirement for Notice-level projects that disturbed fewer than 
five acres of public land. As discussed below, in 2001 BLM expanded its 
bonding program to include Notice-level projects. During the early 
years (1981 to 1990) of the 3809 regulations and BLM's bonding program, 
reclamation cost estimates were typically based on a uniform 
reclamation cost per acre factor that was simply multiplied by the 
amount of surface disturbance at a site. Although this approach 
simplified the preparation and review of bond cost estimates, it also 
increased the risk of inaccurate cost estimates. In the early 1990s, 
reclamation plans became considerably more detailed and were designed 
based on site specific conditions. This produced more detailed and 
realistic reclamation cost estimates.
Nevada's State Bonding Regulations Started in 1990
    Nevada's regulations for ``Reclamation of Land Subject to Mining 
Operations or Exploration Projects'' (NAC 519A) became effective in 
October 1990. The Nevada mining industry supported the development of 
these regulations and the authorizing statute (NRS 519A). The Nevada 
regulations include stringent requirements for reclamation plans and 
reclamation bond cost estimates for projects on public, state, and 
private lands. Therefore, with the advent of the NAC 519A regulations, 
all Nevada mines and exploration projects affecting more than five 
acres--regardless of land status--require a reclamation bond. The 
Nevada Division of Environmental Protection/Bureau of Mining Regulation 
and Reclamation (NDEP) manages the Nevada reclamation bonding program 
cooperatively with BLM and the USFS under the terms of an interagency 
Memorandum of Understanding.
BLM Expanded the 3809 Bonding Program in 2001
    By the late 1990s, all Plans of Operations had an accompanying 
detailed reclamation plan and cost estimate upon which the reclamation 
bond was based. But exploration projects that disturbed fewer than five 
acres were still operating under a Notice without a reclamation bond on 
BLM-administered lands.
    In 1999, the National Research Council (NRC) published a study 
entitled ``Hardrock Mining on Federal Lands.'' One of the 
recommendations from the NRC study was that BLM should require a bond 
for all surface disturbing activities, including Notice-level 
exploration projects affecting fewer than five acres. The mining 
industry supported this finding and encouraged BLM to modify the 3809 
regulations to expand the bonding requirements to include Notice-level 
exploration projects. In 2001, BLM implemented a new bonding 
requirement for Notice-level projects.
USFS Updates its Bonding Guidance in 2004
    By the 21st century, the USFS, BLM and state agencies had acquired 
significant experience in reclaiming and closing abandoned and bankrupt 
mine sites. In order to document this knowledge and experience, and to 
ensure that reclamation bonds are adequate to fund reclamation and 
closure, the USFS issued a document entitled ``Training Guide for 
Reclamation Bond Estimation and Administration'' in April 2004. This 
Guide is designed to be used in estimating new bonds and updating 
existing bonds for projects on National Forest System lands.
  agency reclamation of several bankrupt cites revealed the need for 
                     expanded bonding requirements
    By the late 1990s, the industry had closed a number of modern mine 
sites using the techniques commonly included in BLM and Nevada State 
reclamation plans of that era. However, NDEP and the federal land 
management agencies (i.e., BLM and the USFS) had closed and reclaimed 
only a few sites using funds from reclamation bonds.
    In the late 1990s--early 2000s timeframe, historically low metal 
prices forced a few companies to declare bankruptcy. These bankruptcies 
tested the scope and efficacy of the federal and state reclamation 
bonding programs--programs that were supposed to provide regulators 
with sufficient financial resources to reclaim abandoned or bankrupt 
mines. However, as NDEP and the federal agencies used the reclamation 
bonds to close and reclaim the bankrupt sites, program-wide 
deficiencies and inefficiencies became readily apparent. This led to 
the realization that the bonds for nearly all of the bankrupt sites 
were inadequate for NDEP, BLM, and the USFS to implement and complete 
the approved reclamation plans.
    The Nevada mining industry, NDEP, and federal regulators readily 
agreed that this situation was unacceptable and that changes in the 
bonding requirements were needed. Working cooperatively over the next 
few years, the industry and state and federal regulators identified the 
specific deficiencies and found solutions to address each one to ensure 
that adequate funding would be immediately available to state and 
federal agencies should any other bankruptcies occur.
    This cooperative effort between the mining industry and regulatory 
agencies in Nevada has resulted in a program that is embraced as being 
fair, defensible, and accurate. All parties recognize this program may 
result in somewhat conservative cost estimates. However, the shared 
commitment to capitalize upon the lessons learned from responding to 
unexpected situations at the bankrupt sites and to modify the bonding 
program to eliminate the shortfalls that were due to these unexpected 
situations makes a conservative approach essential. The resulting 
bonding program provides comprehensive cost estimates that consider all 
likely contingencies.
    Similar industry-agency collaboration recently occurred in Montana 
where the Montana Mining Association and the Montana Department of 
Environmental Quality worked together to update Montana's bonding 
requirements. This cooperative effort resulted in a bill, HB 460, which 
Montana Governor Brian Schweitzer recently signed into law to amend the 
Montana Metal Mine Reclamation statue to provide for temporary bonding 
in unanticipated circumstances.
the cooperative industry--agency review revamped the bonding program to 
                  address all identified shortcomings
    The following are the major issues identified during the review and 
revamping of the mine closure and reclamation bonding requirements. The 
identified shortcomings were rectified as described below:

    Identified Shortcoming.--Some types of costs which would be 
incurred should a regulatory agency assume responsibility for closing a 
mine site had not been adequately anticipated or included in the 
previous cost estimates. Because the agencies' and industry's 
experience with mine closure at that time was based on planned and 
orderly closure performed by the mine owner, some costs associated with 
government management and the timing of mine closure had not been 
anticipated. For example, some sites required immediate management of 
process solutions to ensure that the environment was protected, but the 
process of obtaining the money from the bonds often took several 
months, during which time bond funds to manage the site were not 
available. Other emergency funding programs were used to cover this 
deficiency at that time.

          Implemented Solution.--The Nevada mining industry set up and 
        funded a program to ensure that funds would be immediately 
        available for site management at any site declaring bankruptcy. 
        Now all bonds calculated in the state of Nevada must include 
        the cost for managing the site including all process fluids, 
        for a period of six months under typical care and maintenance 
        conditions.

    Identified Shortcoming.--The hourly equipment rates used in the 
bond cost estimates did not reflect the agencies' costs to contract the 
work to third parties. The equipment rates used in the bonds were based 
on a number of sources and varied widely from site to site.

          Implemented Solution.--A small working group comprised of 
        Nevada mining industry professionals and regulators 
        investigated a number of options to provide realistic hourly 
        equipment rates and ultimately decided that the local equipment 
        suppliers' monthly, single-shift rental rates were most 
        appropriate--even though it is highly unlikely that a 
        contractor would only work their equipment for 40 hours per 
        week on this type of job.

    Identified Shortcoming.--Some of the bonds assumed that the 
equipment at the site would be the same types of equipment used for 
reclamation. Because some of the equipment used at mine sites is larger 
than the equipment a reclamation contractor would typically have 
available, this assumption was inappropriate and produced inaccurate 
reclamation cost estimates.

          Implemented Solution.--Another small working group comprised 
        of Nevada mining industry representatives and regulators 
        reviewed the types and sizes of equipment readily available 
        from contractors and suppliers in Nevada and limited the 
        equipment choices for reclamation bond costs to that equipment.

    Identified Shortcoming.--The productivity (quantity of work 
performed per hour) used for different equipment varied considerably in 
some of the bond cost estimates. Because the productivity of 
reclamation equipment has a direct impact on the time required to 
perform the reclamation activities, it also affects the cost estimate.

          Implemented Solution.--Nevada mining industry experts and the 
        regulatory agencies determined that equipment productivities 
        should be calculated based on accepted, published sources such 
        as equipment manufacturers' handbooks, engineering manuals, and 
        published construction cost databases to provide defensibility 
        and consistency. In addition, typical correction factors were 
        defined to ensure that the productivities represented an 
        average range of conditions. This is believed to represent a 
        conservative approach because the contractors typically used in 
        the western U.S. for reclamation work have highly experienced 
        staff.

    Identified Shortcoming.--The costs for and timing of process fluid 
stabilization and management were inconsistently calculated. The time 
required to stabilize a site for long-term passive management is 
directly related to the time needed to reduce the inventory of any 
remaining process fluids and ensure that the reclamation plan will 
limit the amount of water that must be managed in a passive management 
system. Estimating a short-and long-term water balance for a site 
requires a combination of science, engineering and experience. The 
industry has spent considerable effort globally in recent years to 
better understand this process for sites in closure. Most importantly, 
it is recognized that although common approaches can be applied, each 
site is different and requires detailed analysis to define the 
parameters that will affect closure costs.

          Implemented Solution.--Standard approaches and tools that use 
        site specific data have been defined by federal land management 
        agencies and state regulatory agencies along with minimum 
        design criteria and site data required to properly estimate the 
        time and effort required to manage any solutions remaining on-
        site at closure.

    Identified Shortcoming.--The estimate of both long-term site 
management and monitoring were not always adequate. The requirements 
and period required for long-term site management and monitoring are 
highly site-specific. However, the same approach used to bring 
consistency to the calculation of process fluid stabilization can be 
used to determine what, if any, long-term management and monitoring is 
required.

          Implemented Solution.--Site-specific studies and design 
        requirements will determine the need and requirements for long-
        term site management and monitoring. Often, it is uncertainty 
        that will dictate if or how much funding must be in place for 
        long-term site management. In these cases, trust fund-type 
        approaches are often used to ensure that there will be funding 
        for both expected and unknown future site requirements. 
        Monitoring requirements are typically based on the need to 
        demonstrate stability at the site based on trends in empirical 
        data. This will vary by site, but most regulatory agencies have 
        guidelines for minimum requirements. Nevada's Water Pollution 
        Control regulations allow NDEP to require a 30-year monitoring 
        period, or longer if needed.

    Identified Shortcoming.--Some miscellaneous costs were not 
adequately captured in some cost estimates. The cost for removal of 
small infrastructure (e.g. power lines, substations, pipelines, etc.) 
were not included or underestimated. Other miscellaneous costs such as 
fence removal or installation, hazardous waste removal, construction or 
removal of erosion and sediment controls were inconsistently addressed.

          Implemented Solution.--Nevada mining industry personnel and 
        the regulatory agencies cooperatively developed a checklist of 
        miscellaneous costs that must be considered for each site.

    Identified Shortcoming.--The cost to mobilize and demobilize (mob/
demob) equipment from the sites was often excluded or inadequately 
estimated. The cost to move equipment to and from a site being 
reclaimed will be added by a contractor to the overall cost of 
reclamation. Although this cost primarily included the direct costs to 
transport equipment and materials to the site, some contractors also 
include other costs in this line item.

          Implemented Solution.--The specific items that should be 
        included in the mob/demob cost were defined by a small working 
        group and local transport companies were contacted to determine 
        the cost incurred to transport the necessary equipment to and 
        from the site by a third-party transporter. Other common costs 
        such as the establishment and use of office trailers, portable 
        power and sanitary facilities were added to Nevada reclamation 
        bonding guidelines as separate line items.

    Identified Shortcoming.--Out of date costs were used in some bond 
cost estimates. Although Nevada's regulations require that bond costs 
be updated every three years, the hourly rates often change annually 
based on economic conditions. Although most annual variations are 
generally small, cost estimates should be based on current rates.

          Implemented Solution.--NDEP and federal regulatory agencies 
        update equipment, labor and material rates each year and post 
        the current rates on a public web site for use in reclamation 
        bond cost estimates.
  Exhibit B--Nevada Department of Natural Resources and Conservation 
                  Division of Environmental Protection
                             [NEWS RELEASE]
March 13, 2008

             mine reclamation bonding surpasses $1 billion
    CARSON CITY--Reclamation bonding that guarantees the 
environmentally friendly reclamation of Nevada mines should they be 
abandoned has surpassed the $1 billion mark, state and federal 
officials announced today.
    A state law, enacted in 1990, mandates that all mining operations 
and exploration projects greater than five acres in size obtain a 
reclamation permit and post a financial guarantee to ensure that 
reclamation activities are completed in the event the operator is 
unable or unwilling to complete them.
    ``The fact that this bonding pool is strong and growing should 
reassure all Nevadans that closure and reclamation of abandoned mines 
will continue in an orderly manner, and the state's environment will be 
protected,'' said Dave Gaskin, chief of the Nevada Division of 
Environmental Protection's (NDEP) Bureau of Mining Regulation and 
Reclamation.
    He said the amount of bonding is one of the largest in the United 
States, and reflects the mining industry's commitment to 
environmentally responsible reclamation of mine sites in Nevada.
    Currently, the financial guarantees can be filed with NDEP, as well 
as the State Division of Minerals, the U.S. Forest Service and the U.S. 
Bureau of Land Management (BLM). Collectively, the agencies now hold 
$1.031 billion in reserve to finance reclamation activities. That total 
includes: $613 million in letters of credit, $226 million in surety 
bonds, $180 million in corporate guarantees, $7.3 million in cash, $2.1 
million in bonds administered by the Division of Minerals, and $2 
million in certificates of deposit.
    Administered jointly by the state and federal agencies, the bonding 
pool has grown substantially in recent years due to expansion of the 
state's mining industry and implementation of more precise cost-
estimating guidelines.
    In 2006, NDEP posted on its webpage the Nevada Standard Reclamation 
Cost Estimator, an EXCEL workbook that contains standardized cost data 
such as current Davis-Bacon labor rates, applicable fuel costs, 
equipment rental rates, mobilization and demobilization costs, and 
other data that the mines use to calculate the cost of their 
reclamation efforts. The standardized cost data and the associated cost 
calculation spreadsheet were developed in a collaborative effort 
between the BLM, the Nevada Mining Association and NDEP.

    The Chairman. Thank you very much.
    We have a lot of good testimony here and a lot of 
questions, and I am sure all members have. Let me just start 
with a few and then call on Senator Domenici for questions.
    Mr. Bisson, let me ask you from the perspective of the BLM, 
do you see a reason that uranium which, of course, is an energy 
mineral, should be leasable as are other energy minerals, as 
opposed to locatable? I guess that is one of the key issues 
that has been raised here with regard to the rewrite of this 
mining act.
    Mr. Bisson. Senator, I actually have not considered that 
question. We are complying with the law. At one time, it was 
leasable and then it became locatable. So what we are trying to 
do is administer that program.
    If you could ask me the question in writing, I think the 
administration would consider a position on it, but I cannot 
respond to it today. I really have not thought about a response 
to it.
    The Chairman. OK.
    Could you explain--or any of the witnesses, any of you 
explain--this distinction between the uranium mining that is 
done under the Mining Act and the uranium mining that is done 
in this separate program that the Department of Energy has 
operated where they do lease property? Are you familiar with 
that?
    Mr. Bisson. I have read about it.
    I can tell you that the activity that happens on, as an 
example, public lands administered by BLM is primarily 
exploration, looking for the mineral, and mining. The 
processing that occurs actually happens elsewhere. They do not 
process that ore on Federal lands.
    In the other program that DOE administers, I think that 
they may do both on those sites or near those sites.
    There is an annual royalty on those leases that I am aware 
of and a production royalty as well, as the mineral is actually 
mined and processed.
    The Chairman. Did you look into this, Ms. Nazzaro? Are you 
familiar with the two different ways in which we deal with 
this?
    Ms. Nazzaro. I am familiar with some of what DOE does, and 
Mr. Bisson is correct in that there is a processing also 
involved there. It is not just the exploration and extraction 
of the minerals, and I believe GAO is doing some work right now 
for this committee.
    The Chairman. Mr. Brancard, let me ask you. One of the 
issues you raised, of course, is this new interpretation of 
SMCRA, this Surface Mining Act. I think maybe you are aware 
that we are introducing a bill this week with Senator Domenici 
and Senator Salazar, Senator Allard, and maybe several others 
of us here to try to reverse the interpretation that the 
administration has put on this; that prohibits the use of these 
funds for hardrock sites. I assume that that would be helpful 
to the State of New Mexico and other western States, to get 
that revenue flowing again for hardrock mining reclamation. Am 
I right about that?
    Mr. Brancard. Yes, Mr. Chairman. This involves about $20 
million over the next 7 years to the State of New Mexico which, 
under the Interior Department's interpretation, we can only use 
at coal AML sites. If the change in the law goes through, we 
will be able to use them at either coal or non-coal and, 
therefore, at these hardrock sites that we are discussing 
today.
    The Chairman. Am I correct in thinking that the biggest 
problem we have, as far as reclamation goes, mine site 
reclamation in New Mexico relates to hardrock mining. Is that 
right?
    Mr. Brancard. Yes, Mr. Chairman. The 15,000 mine openings 
number that I gave you includes both hardrock and coal but is 
probably about 95 to 99 percent hardrock.
    The Chairman. Let me ask Mr. Ferguson. The Forest Service, 
in your dealing with these issues, do you have any additional 
or any different standards that you apply in the case of 
uranium mining operations that are located on Forest Service 
lands as distinct from other types of hardrock mining that may 
occur on Forest Service land?
    Mr. Ferguson. No, Mr. Chairman. We handle those pretty much 
in the same process.
    I will just add that there are situations when a mineral 
like uranium or other locatable mineral can become a leasable 
mineral if it is on acquired lands. So we do have situations on 
some of our national grasslands and on some of our other areas 
where we have acquired those lands, and that mineral, because 
of the status change in the statute, can become a leasable 
mineral where previously under public domain lands it would be 
a locatable or a mining claim approach.
    The Chairman. That is because while it is in private 
holding, there will have been a lease term arranged with the 
previous owner. Is that what you are saying?
    Mr. Ferguson. I think it is not as much about the private 
arrangement, but it is the status of the land when it came into 
our management responsibility. If it was public domain land, 
then the 1872 Mining Law is the law that affects those 
minerals. If we acquired that land and the mineral estate 
through a Weeks Act or some other legislation that gave us the 
authority to acquire that land, then that mineral commodity 
changes to a leasable.
    We have that, for instance, in Missouri. We have lead 
mining. In lots of other parts of the country, that lead would 
be a locatable mineral under the Mining Law, whereas we lease 
lead on the Mark Twain National Forest with the BLM. We do that 
jointly with the BLM.
    The Chairman. Let me defer to Senator Domenici for his 
questions.
    Senator Domenici. Thank you, Mr. Chairman. I was just 
chatting with the staff about something that I had heard and I 
wanted to clarify it for the record. I think maybe the next 
panel would help, too.
    One of you mentioned that under an existing administrative 
action, certain lands are leased for mining of uranium and the 
government is paid for the mining on a royalty basis. Who 
mentioned that?
    Mr. Bisson. I mentioned that, Senator. Just from documents 
that I have read recently, the Department of Energy has 
specific areas. They have a number of existing leases that are 
out there right now where the lease contract has an annual 
royalty requirement, and then they have a production royalty 
for any yellowcake that is produced on those sites. That is 
very different from what happens on public lands.
    Senator Domenici. But that is public.
    Mr. Bisson. Yes, sir, you are correct. From lands 
administered by BLM.
    Senator Domenici. Nobody has looked up where they get that 
authority. You just have seen documents showing it.
    Mr. Bisson. Yes, sir.
    Senator Domenici. I do not want to waste our time on it, 
but I would just like to make sure----
    Mr. Bisson. I will get a copy of the documents. I have them 
with me, but I would have to go through the book to find it. 
But we will get them to you, sir.
    Senator Domenici. Whatever you have, if you do not mind 
giving us those, we would like to have them.
    The Chairman. I would just point out I think we do have a 
witness on the second panel from the Department of Energy, and 
this is done by them. So I think he will be able to testify 
about this in some detail.
    Senator Domenici. The reason I ask is because if any mining 
is going on and they are charging royalties, one of the 
questions that keeps going around here is that we do not know 
what we ought to set as a reasonable royalty. There may be 
something helpful in that. It might be too low, it might be too 
high, but it might be all right, if it is working. So we could 
learn something from it.
    Let me just move to Bill from New Mexico. I am not at all 
pleased with Interior's opinion that the SMCRA amendments 
passed in 2006 alter State authority to prioritize abandoned 
mine funding. I believe that they are wrong because that 
section of the statute was left unchanged. Senator Bingaman and 
I, along with other members, will seek to fix the problem, but 
can you clarify exactly how harmful that opinion is to 
important the reclamation work that you stand to do?
    Mr. Brancard. Yes, Senator Domenici. There is a unique 
opportunity that States have under the amendments in SMCRA in 
2006 where money that was previously allocated to the States 
under SMCRA, but never appropriated by Congress, is now coming 
to the States over a 7-year period. So we are getting this 
chunk of $20 million that we can do a lot of work with over the 
next 7 years, but now under this Interior appropriation, that 
work can only occur on abandoned coal mines. So the long list 
of abandoned hardrock mines--we will not be able to touch any 
of them with this new money.
    Senator Domenici. So you were all ready. You knew what you 
were going to do, and now that has been aborted.
    Mr. Brancard. Yes, sir, Senator.
    Senator Domenici. How many abandoned mines might you have 
been able to fix if we kept that bunched together and you got 
your portion of the $20 million?
    Mr. Brancard. It would be several hundred, probably over a 
thousand.
    Senator Domenici. Thank you.
    Mr. Ferguson, we hear about mining claims near our national 
parks which had been dealt with in legislation a number of 
times in the past. In 1984, for example, we passed the Arizona 
Wilderness Act. Did this bill put areas around the Grand Canyon 
off limits to location and entry under the Mining Law that were 
previously open to mining? Can you list some of the possible 
options that Congress and the agencies have for removing areas 
from public mining activities?
    Mr. Ferguson. Yes, Senator. My information regarding the 
Arizona Wilderness bill of 1984, I think as you mentioned--
there is an area of about 50 or 60 miles south of the Grand 
Canyon. I think it was called the Kendrick Mountain area that 
was a wilderness area. That is the closest wilderness area that 
I am familiar with to the Grand Canyon. As I understand it, it 
is pretty much silent on any language in terms of withdrawing 
it from mineral activity.
    In terms of, I think, your second question, what are some 
of the other ways that could be done, the most common we see is 
legislative, a withdrawal coming from Congress.
    Senator Domenici. I have some more but I will submit them 
in writing.
    The Chairman. All right.
    Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman. I think my 
colleague from Montana was----
    Senator Tester. Go ahead.
    Senator Cantwell. Thank you. I thank my colleague's 
indulgence.
    Mr. Chairman, I know we did not have an opening statement, 
but if I could submit a longer statement for the record. I know 
on our second panel, which I do not know that I will be here 
for, the Navajo Nation President is giving testimony, and I 
certainly feel like his testimony and that of the Spokane tribe 
who has been impacted by the Midnight Uranium Mine in Spokane, 
which is on the reservation and now a Superfund site, had many 
health problems. I am sure there are going to be many 
similarities of thoughts and views there. So I will miss his 
testimony, but if I could put a longer statement into the 
record on that, I would appreciate it.
    The Chairman. We will include your full statement.
    [The prepared statement of Senator Cantwell follows:]

Prepared Statement of Hon. Maria Cantwell, U.S. Senator From Washington
    Mr. Chairman, thank you for holding hearings to examine the best 
way to update the antiquated 1872 Mining Law. I'd also like to thank 
President Shirley of the Navajo Nation for being here today to share 
with us the story of the devastating health and environmental effects 
that uranium mining has had on the Navajo Nation. This is a sad but 
important story to tell, and a story that is familiar to the Spokane 
Tribe in Washington state. It also underscores the need to enact strong 
environmental protections to prevent these types of environmental and 
health hazards from mining in the future.
    As the Spokane Tribe is painfully aware, the abandoned ``Midnite'' 
uranium mine on the Spokane Tribal Reservation is now a Superfund site 
and has also created serious environmental and health problems. Like 
the Navajo Nation, many former Spokane tribal mine workers have 
developed cancer or have died. Although mining operations ceased at the 
Midnight Mine in 1981, the full scale of the health impacts associated 
with such activities are not yet known.
    Tribal representatives tell of family and friends who worked at the 
mines and mills being diagnosed with cancer at a seemingly 
disproportionate rate. This is borne out by the shocking statistic that 
the median age of Tribal members living on the Spokane Tribe 
Reservation is 26 while the median age of their neighbors in Stevens 
County 37. Moreover, a significant lack of resources and access to 
health care for tribal members has likely exacerbated the problem.
    I know that the Navajo Nation has been working with the Department 
of Justice since the early 1990s under a federal program to secure 
compensation for sick uranium miners. This program was started to help 
sick workers who conducted uranium mining and processing activities 
prior to 1972 which were critical to the production of atomic weapons 
during the Cold War.
    Unfortunately, the Spokane Tribe is still working to secure 
assistance under this program for its members. Members of the Spokane 
Tribe need immediate assistance on their potential eligibility for 
compensation for their illnesses. I look forward to working with the 
Spokane Tribe and the Department of Justice on helping the tribe under 
this program, but I also believe we must examine how to prevent these 
types of environmental and health hazards from mining in the future.
    The 135 year old Mining Law remains a relic of Western expansion. 
The legacy of this law can be seen throughout the West. More than 
500,000 abandoned mines litter our public lands--including an estimated 
3,800 abandoned mines in Washington. The price tag to clean up these 
abandoned mines is estimated at $50 billion, and nearly 40 percent of 
western headwaters are contaminated by runoff from these abandoned 
mines.
    Many mining operations continue to leave a legacy of perpetual 
water pollution and the 1872 Mining Law contains no environmental or 
reclamation standards to deal with this issue. Vital waterways are 
polluted by these abandoned mines, and some of these sites now pose 
serious threats to the health and safety of communities downstream. 
While modern mines are required to post financial assurances for 
cleanup, existing mining laws do not specify how, or how much, a mine 
should be cleaned up. As the Senate undertakes comprehensive mining 
reform, these devastating loopholes must be closed.
    The 1872 Mining Law also allows foreign and domestic mining 
companies to take minerals from federal lands without paying royalties, 
allows public land to be purchased at less than $5 an acre, and has no 
environmental provisions for the protection of water supplies, 
wildlife, and landscapes. Last November, the U.S. House of 
Representatives passed legislation that would reform the Mining Law and 
provide for a program for the reclamation of abandoned hardrock mines. 
This year, the Senate Energy and Natural Resources Committee is working 
on its own version.
    Senator Wyden and I recently circulated a Dear Colleague letter 
where we outlined major areas of concern with this mining law which 
include

   putting hardrock mining on par with other public land uses;
   protecting national parks, monuments, and special places;
   giving local communities a voice;
   establishing environmental performance and reclamation 
        standards;
   ensuring the protection of the water resources;
   and accelerating abandoned mine land clean-up

    Addressing these issues will lead to much-needed environmental and 
taxpayer protections.
    Some argue that pollution from mines results almost entirely from 
historic operations and that ``modern'' mines that are governed by 
newer environmental laws are responsible, problem-free operations.
    It is true that historic mining polluted and continues to pollute 
rivers, streams and aquifers and that, until 1976, there were no 
federal regulations written specifically to govern hardrock mining 
operations. However, many mines that began operations in the past three 
decades have spilled cyanide, killed aquatic life, caused pollution 
that will require treatment in perpetuity, and burdened the taxpayers 
with huge liabilities.
    Some examples include the Grouse Creek Mine in Idaho in 1994, where 
a tailings impoundment began to leak cyanide. Other examples include 
the Beal Mountain and Kendall mines in Montana, the Formosa mine in 
Oregon, and the Jerritt Canyon mine in Nevada. There are many more. 
These examples of modern mines that fail clean water standards 
demonstrate that current environmental authorities that apply to 
hardrock mining are not sufficient to protect the health and welfare of 
our citizens, environment, and economy.
    The time has come to end the preferential treatment that hardrock 
mining receives under the 1872 Mining Law and to craft mining reform 
legislation that responsibly balances mineral development while 
protecting iconic places and western waters. I look forward to working 
with this Committee to pass legislation that manages our nation's 
natural resources in an environmentally and fiscally responsible 
manner.

    Senator Cantwell. Thank you.
    Mr. Ferguson, the 1872 Mining Law talks about mining as the 
highest and best use on public land. I know that Federal land 
managers have argued that the law forces them to approve mining 
projects proposed on public lands regardless of competing 
resource values. That is, I know there was an EIS for a 
proposed gold mine in Idaho where the Forest Service emphasized 
that it ``did not have the authority to select a no 
alternative'' under the 1872 act.
    So under law, how is it possible for managers to better 
balance the mineral activities with other public land uses, 
given that challenge and how you are interpreting the law?
    Mr. Ferguson. Thank you, Senator.
    I think the best way that I would answer that is in a large 
mine proposal like that, most of the time--I would say all the 
time an environmental impact statement is required. That is a 
very public process, and I think the statement about the rights 
in the 1872 Mining Law--there are rights that are there to be 
developed. But there is a great desire to mitigate impacts, and 
we are bound to try to follow all the other statutes and all 
the other laws, the Clean Water, Endangered Species Act. So we 
involve the public through that environmental impact statement 
process under the National Environmental Policy Act. That is 
the best way that I see us trying to balance those.
    Senator Cantwell. But what about no action?
    Mr. Ferguson. I am not sure that I have a really great 
answer for you right now on the no action other----
    Senator Cantwell. Do you not think we should change that? I 
mean, since we are looking at updating the law, do you not 
think we should change that?
    Mr. Ferguson. It would be an option to be considered, I 
think. The issue, I think, with the no action is the fact that 
there are rights under the 1872 Mining Law and I think that 
would be a perfect time to look at it.
    Senator Cantwell. Thank you.
    I want to pronounce your name right.
    Ms. Struhsacker. It is Struhsacker.
    Senator Cantwell. Struhsacker. Thank you very much.
    Do you oppose extending to local and tribal governments the 
right to petition for withdrawal of certain lands for important 
clean drinking water, recreation, and endangered species 
habitat? What I am trying to get at is that I think that there 
have been arguments that current environmental laws and 
authorities are sufficient to enable that kind of input.
    Ms. Struhsacker. Thank you, Senator Cantwell.
    We fully support the role that local communities do and 
should play in evaluating proposed mining projects, and we can 
point to many, many projects where there has been a very good 
collaboration between local communities, mining companies, 
regulatory agencies to find the best possible project for that 
community and for that area.
    The reason we have a difficulty with the proposal that I 
think you are referring to, which is in H.R. 2262, the House 
Mining Law bill, that gives local communities essentially a 
veto power over a project on the basis of where that project is 
located, is that when you are considering mining policy, one of 
the concepts that you have to keep foremost in your mind is 
that we do not get to choose where our mineral deposits are 
located. The forces of geology and mother nature locate those 
deposits, and if we are lucky enough to discover a deposit 
after an expenditure of many tens of millions of dollars, we 
cannot simply move that project, that deposit to somewhere else 
because some people are concerned about that area.
    Now, it has been our experience that if people will work 
together, we can find the win-win to develop a mine and to be 
responsive to people's concerns about the environment. There is 
a really excellent example, Senator Cantwell, in your State in 
Okanogan County with the Buckhorn Mountain Mine that was 
originally proposed as an open pit mine that I know you have a 
lot of familiarity with. There was a lot of local opposition to 
it. The mining company went back to the drawing board, 
sharpened its pen, came up with a completely new mine plan for 
a small underground mine, for which there is tremendous local 
support.
    So we think that it is very problematic to give people a 
veto power on the basis of just where the project is located, 
that a far better solution is to work together, address 
concerns, and find a way to solve them.
    Senator Cantwell. I would say that you almost have a de 
facto veto on clean water then because part of this issue is 
about clean water, and when you look at the runoff from some of 
these facilities that still exists and the damage that they 
have in the communities and who is cleaning up--I mean, I do 
not know if you are saying that you would do an independent, 
guaranteed reclamation bond to fully cover the cost of 
maintenance and treatment and things of that nature. You can 
answer that if you want. I know my time is running out.
    But the issue here is if the Federal Government cannot 
chose ``no action,'' and tribes and communities cannot protest 
based on the impact on clean water, and then the mines are not 
obligated for the cleanup and the impact of that on a future 
perspective, we just have a horrible cycle here. We already 
know the damage that has been done. This is about stopping the 
damage from being done in the future.
    Ms. Struhsacker. Mr. Chairman, may I answer that question?
    The Chairman. Yes. Why don't you answer that one, and then 
we will go on to Senator Craig.
    Ms. Struhsacker. OK.
    Senator Cantwell, the Clean Water Act has full and complete 
jurisdiction over modern mines. When you read that law, there 
is simply no exemption for mining. There is no ``olly olly oxen 
free'' in the Clean Water Act for today's mines. We have to be 
able to prove that if we need an NPDES Clean Water Act 
discharge permit, that we will meet all of the effluent 
limitations, all of the regulatory requirements, just like any 
other industry. So when you look at the mines that were in that 
yellow part of the chart, the pre-Clean Water Act mines, yes, 
we agree there are many water quality problems associated with 
the old, pre-regulation, pre-Clean Water Act operations. But 
today's mines must fully comply with the Clean Water Act, and 
if they cannot demonstrate that they will comply, they do not 
get a permit to operate. That is where the regulatory agencies 
have the full authority already to say no.
    Senator Cantwell. I am not going to belabor this, Mr. 
Chairman. I will submit this for the record, and I am sure this 
will not be the last time we have a conversation. But I have a 
list here of all of these mining organizations who have 
declared bankruptcy and are not around to help in that cleanup. 
So I thank the chair.
    The Chairman. Thank you very much.
    Senator Craig.
    Senator Craig. Thank you, Mr. Chairman.
    Panelists, thank you very much.
    Let me try to understand where we are as it relates to 
crafting new law to provide a revenue source for abandoned mine 
lands because I think all of us on this panel are concerned 
that we address abandoned mine lands if in fact we decide to 
rewrite the 1872 Mining Law.
    Mrs. Nazzaro, in your testimony in your highlights, you 
refer to $982 million to guarantee reclamation costs of 1,463 
hardrock operations on BLM. Where did that money come from?
    Ms. Nazzaro. These are financial assurances that the 
operators have to agree to, and there are various types of 
financial assurances that they can provide. It could be cash, 
letters of credit, certificates of deposit, negotiable 
securities, and bonds. BLM also allows surety bonds, trust 
funds. There is a variety of mechanisms that they can provide. 
However, what we have found in the past is that those financial 
assurances are not always adequate to cover the estimated 
reclamation costs should the operator walk away from the 
operation.
    Senator Craig. So this $982 million of assurances to 
guarantee reclamation costs is not for abandoned mine lands. It 
is for existing operations at the time of termination of 
operation.
    Ms. Nazzaro. Correct. It is for existing operations on BLM 
lands right now. These are the financial assurances that are in 
place. Then we looked at to what extent they were adequate. BLM 
says in some cases they are not adequate. We have also found 
other reasons they are not adequate, one just mentioned by 
Senator Cantwell, that some of these companies ultimately go 
bankrupt. Also, the financial assurances are not always up-to-
date. They may not have been adjusted, say, for inflation or 
other purposes, sometimes they are not current.
    Senator Craig. Whether I was mishearing you or in the broad 
sense there was a misunderstanding between what you were saying 
and what is reality--Mr. Ferguson and Mr. Bisson, when you talk 
about current abandoned mine land activity, not reclamation of 
existing or terminated operations, but those mines that were 
walked away from a century or a half a century ago that are out 
there on the public domain, you speak of reclamation today. 
Where does that money come from for those reclamation purposes?
    Mr. Ferguson. For the Forest Service, they come from a 
variety of sources. I mentioned in my comments that we have 
Federal sources through the appropriation process.
    Senator Craig. So in other words, from the general fund of 
the U.S. Government.
    Mr. Ferguson. Yes, sir, and we also get some from the 
Department of Agriculture. There is an aspect of funding, again 
coming through the general treasury. Then we also have partners 
that come along with us and partner up, collaborate.
    Senator Craig. Private.
    Mr. Ferguson. Private, yes.
    Senator Craig. Mr. Bisson.
    Mr. Bisson. For the BLM, we have a similar approach. We 
have some appropriated dollars. We have a central HAZMAT fund 
that the Department has that we utilize at times. We use 
partnership dollars as well.
    But, Senator, just for the record, we have more than $1 
billion currently in bonds in place. We do have the ability to 
require a trust fund. Before a mining company leaves a site 
now, we can actually require them to put a trust fund in place 
to correct any problems that may show up 20 years or 50 years 
down the road.
    Senator Craig. No. I appreciate that. That was going to be 
my next question because the walk-aways of yesterday, if you do 
your permitting appropriately, do not exist today under current 
law. Is that not correct?
    Mr. Bisson. Yes, sir.
    Senator Craig. There has been an interchange of terms here 
that I think we need to clarify as it relates to abandoned mine 
lands on public lands versus private lands because most of the 
mines that were abandoned were on permitted property that 
became fee simple private property. Now, whether they are 
abandoned by all amount or whether that permit still exists--
how are you defining abandoned mine lands on public lands? 
Those that are entirely of the public domain today?
    Mr. Ferguson. For the Forest Service, they are features or 
sites that are on national forest or grasslands.
    Senator Craig. Of which you can find no ownership.
    Mr. Ferguson. That is correct.
    Senator Craig. In that instance where you reference 
private, you are talking about truly abandoned mine lands on 
existing fee simple private property.
    Mr. Ferguson. That is correct. My example that I used where 
I talked about some of those partnerships with the private, the 
challenge with working on abandoned mine lands is those 
features sometimes cover both, as you are sort of alluding to. 
So to do an effective job of reclamation, you have to look at 
the entire project.
    Senator Craig. Yes.
    Mr. Ferguson. Especially when it comes to water, you need 
to look at the source of the contamination, and it could be a 
larger area than what is just on the private or what is on the 
public.
    Senator Craig. Mr. Bisson, any further comment?
    Mr. Bisson. It is no different on BLM-administered lands. I 
think what you are looking at are historical patenting 
remnants. Frequently we have to look at the whole watershed or 
drainage, not just at individual sites, as we come up with 
solutions.
    Senator Craig. Lastly, those that you are currently engaged 
in today, I assume, have the most egregious impact on the 
environment, mine seepage, drainage, heavy metals into the 
waters, those kinds of things, or where human risk is apparent.
    Mr. Bisson. That is correct. We actually have a strategy in 
place and we are going down the list of the highest priorities 
across the West. We estimate right now that it would take 
roughly $130 million to clean up the sites, mostly physical 
hazards on BLM-administered lands.
    Senator Craig. $130 million.
    Mr. Bisson. Based on what we know about the sites.
    Senator Craig. Does the Forest Service have a similar 
guesstimate?
    Mr. Ferguson. We do not have a similar estimate on that, 
but we do have a process very similar to what Mr. Bisson was 
referring to. We use a process called Choosing by Advantages, 
and I referenced that we have a team of Washington office and 
regional people who look at a number of factors, and then we 
have a list that we have prioritized. So we have it on the 
shelf. As soon as we get our appropriations, we are able to 
start issuing contracts and working on those projects.
    Senator Craig. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman. I want to thank 
all the panel members for----
    The Chairman. Senator Domenici wanted to make some----
    Senator Domenici. I wonder if you might take this 
suggestion. Rather than continue with questions along the last 
line, it would seem to me that it would be incumbent upon our 
joint staff to get from the bureau and the Forest Service as 
much background as they can about the current program that they 
have just described and where they get the money and what 
projects they have, how many they have that they are trying to 
maintain, and whether they have had some breakdowns, and 
whether their bonds have been sufficient or insufficient. I 
think that would help us.
    The Chairman. I think that would be useful to understand 
better what the needs are of the two agencies and what progress 
you are making in meeting those needs.
    Senator Domenici. Thank you, Mr. Chairman.
    Mr. Ferguson. We can provide that.
    Mr. Bisson. We would be happy to do that.
    The Chairman. Thank you very much. Good suggestion.
    Senator Tester.
    Senator Tester. Thank you, Mr. Chairman. I want to thank 
the members of the panel for their testimony today.
    We will start with you, Mr. Ferguson. Could you give me any 
idea what the Forest Service budget for abandoned mine cleanup 
is for 2009?
    Mr. Ferguson. For 2009, we are looking at about $14 
million.
    Senator Tester. $14 million. Are there administrative fees 
that are also taken out of that?
    Mr. Ferguson. There are some overhead administrative fees.
    Senator Tester. Any idea what percentage that might be?
    Mr. Ferguson. I do not have that readily available. I can 
get it.
    Senator Tester. If I heard you correctly on Senator Craig's 
testimony, you do not know how much your total liability is out 
there for cleanup of abandoned mines?
    Mr. Ferguson. We have some estimates from back in the late 
1990s.
    Senator Tester. Could you give me that estimate?
    Mr. Ferguson. I want to say it was somewhere in the $2.2 
billion range, something like that, but we need to get those up 
to today's dollars.
    Senator Tester. It would be much more than that. But if we 
assumed it still was $2.2 billion and $14 million--I do not 
have a calculator up here, but I will be dead and gone and so 
will my kids by the time they get cleaned up.
    Do you make a plea to anybody to bump those figures up at 
all, Number one?
    Number two, do you have something like the BLM has which is 
a trust fund that you can set up for mine operators?
    Mr. Ferguson. We do provide our program and we illustrate 
the need that we have in terms of the number that we have out 
there on Forest Service and grasslands. We do have the same 
types of abilities in terms of trust funds when it comes to 
financial assurances that the BLM has when it comes to new 
operations.
    Senator Tester. Can you give me any idea of how many times 
a trust fund has been set up in the last--I do not care--5 
years, 10 years?
    Mr. Ferguson. With the Forest Service?
    Senator Tester. Yes.
    Mr. Ferguson. I can find out and let you know.
    Senator Tester. That would be great.
    BLM, same question. How many times has a trust fund been 
set up?
    Mr. Bisson. I do not know that answer, but we will provide 
it for you.
    Senator Tester. If you could find it, that would be great.
    Just a couple questions--and I am sorry--Ms. Struhsacker. 
Right?
    Ms. Struhsacker. Perfect.
    Senator Tester. Close enough? All right. Good enough. We 
will just call you Ms. from now.
    Ms. Struhsacker. Call me Debbie. My friends do.
    Senator Tester. I agree with you totally. You brought up 
two points in your testimony about needing more money and the 
need to enact my comrade's Good Samaritan Liability Act.
    Where do we get the money?
    Ms. Struhsacker. The industry has long supported funding an 
AML program with net royalty on future mining claims, 
production off of future mining claims. That would be one way.
    I think the private/public sector partnerships that we are 
seeing emerge as a very successful pattern for finding 
resources, finding ways to get around the liability problems is 
another way to fund these.
    Senator Tester. In my real life, I am a farmer. OK? So net 
income and gross income I get. Can you tell me why you do not 
want to use gross income?
    Ms. Struhsacker. Because it is not fair. It does not put us 
on the same taxation schedule as others. You see, when we mine 
a mine, when we mine ore, we get a rock out of the ground, and 
that rock has no value until we put a lot of steps into 
processing it to take out the metals. The net royalty reflects 
the cost to take the rock and turn it into a product that we 
can market.
    Senator Tester. My concern is that there is opportunity on 
net to game it a little bit, if you know what I mean. So if you 
can work with me on that to make sure that we can limit some of 
that, that would be a great opportunity to really come to a 
conclusion.
    You had said during your testimony that pre-1966 was all 
the problems because we did not have environmental regulation. 
You know this. I am sure you know this. There is a little mine 
not far from my farm called Zortman-Landusky that to this 
point, has about a $22.5 million shortfall in bonding which 
means taxpayers are going to have to make that difference up, 
and that does not include the perpetual water treatment that is 
going to have to go on for 1,000 years, give or take a few. I 
mean, what is your response to that?
    There is Beal Mountain Mine. That is another one. I mean, 
there are a lot of mines out there that were either under-
bonded or the company went broke, as Senator Cantwell said. How 
do we solve that? Because I am going to assume in your 
business, like all businesses, there are good actors and bad 
actors. So how do we fix it so taxpayers are not hung with the 
reclamation costs even on new mines? Because I think it happens 
today, and when we have the kind of cleanup dollars that are 
allocated to the Forest Service, we have got a big problem that 
is not going to go away until we address it.
    Ms. Struhsacker. Senator Tester, the mining industry shares 
your concerns that we do not want those stories to be repeated 
in the future, and we believe that the regulations and bonding 
requirements that are in place today will prevent those types 
of situations from occurring in the future because they are so 
different than what happened at Zortman-Landusky. Let me just 
quickly go through some of those differences, if I may.
    Zortman-Landusky was permitted in the late 1970s before 
even the BLM regulations went into effect. They went into 
effect in 1981. The BLM regulations today are very different 
than they were in 1981. They were updated in 2001. The new 
regulations require an extensive program of site-specific 
characterization. So we would understand from the get-go 
today--if Zortman-Landusky were to go through the permitting 
process today, they would be required to do extensive testing 
so that we would all understand, regulators and the mining 
company, what is the potential for those rocks to generate 
acid, which is one of the main problems there at Zortman-
Landusky. That would be known before the mine was ever 
permitted or built. The mine would have been built in a totally 
different way, and the bond would have been completely 
different because it was not calculated the way it would be 
done today.
    Senator Tester. OK. I am going to wrap it up here real 
quick, Mr. Chairman, with your indulgence.
    But my concern is that the same lack of vision that 
happened when that mine was bonded we may not be looking for 
when we go into the future. So we will need your help on that 
since you are on the ground.
    Ms. Struhsacker. There is a good case history in Nevada 
where regulators realized fairly recently in a bankrupt mine 
situation they did not have quite all the tools they needed. 
They were able to change the regulations to get those tools.
    Senator Tester. Last question. You said that the mining 
association would support a net proceeds tax on mining. For 
existing mines?
    Ms. Struhsacker. For new claims.
    Senator Tester. What about existing mines?
    Ms. Struhsacker. We think if you put a royalty on existing 
mines, that there are some serious takings implications. So we 
think, to be fair, this needs to be prospective so that it does 
not subject the Federal Government to takings liability 
exposure.
    Senator Tester. Just very quickly to follow up on it. If I 
had land and there was a mine put on it or if you had land and 
there was a mine put on it, would you not want royalties?
    Ms. Struhsacker. There is absolutely no question that the 
industry is at the table. We recognize the public wants to be 
fairly compensated for production from the land. We are just 
saying that given the laws that we have in this country, the 
Constitution, that the best way to do that to limit any 
possible takings claims is to do it on new mining. If we enact 
a mining law that encourages mining, that develops a stable 
environment for miners to invest and discover ore bodies, there 
will be a robust stream of revenue from royalties in the 
future. That should be our mutual goal.
    Senator Tester. Would you be willing to work with this 
committee on existing mines under net proceeds, or is that off 
the table?
    Ms. Struhsacker. We are certainly willing to work with the 
committee. I am not the association's royalty expert, but we 
would be very happy to have that expert----
    Senator Tester. You are on the record.
    Ms. Struhsacker. Not as the royalty expert, Senator.
    Senator Tester. All right. Thank you very much.
    The Chairman. Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Since your friends call you Debbie, Debbie----
    Ms. Struhsacker. Thank you.
    Senator Barrasso. You talked about modern bankrupt mines 
and then the historic abandoned mines. I was just going to ask 
the members of the panel because you talked about bonding for 
cleanup and all those things there. Does everyone agree that 
what we are really talking about here, since there are enough 
rules and bonding available for current bankruptcies, that we 
are really talking about these historic abandoned mines? Do 
people on the panel all agree with that kind of across the 
board?
    Ms. Nazzaro. No. GAO would not agree with that probably. As 
far as the financial assurances that are in place, BLM does 
require that they have these financial assurances in place 
before they begin any operations. The Forest Service does not 
have any regulations. They tell us that typically they do 
require them if there is a significant disturbance, but they do 
not have a requirement to have a financial assurance. While EPA 
has authority under the 1980 CERCLA, they do not apply 
financial assurances.
    Senator Barrasso. Mr. Bisson?
    Mr. Bisson. Senator, for the Bureau-administered lands, we 
require 100 percent bonding for the full reclamation cost. 
There is at times some variation because we assess those bonds 
periodically. Our State directors are required to certify each 
year that there was sufficient bonding for total reclamation. 
But sometimes when we increase the bond, it is appealed, and so 
there may be a period of time when we go through the appeal 
process before the bond's full amount is put in place.
    But I would agree with what you said about this issue 
primarily being older mines.
    Senator Barrasso. Mr. Ferguson.
    Mr. Ferguson. I just wanted to make one comment about that. 
Our current regulations are being reworked as we speak, and our 
policy, even though we do not have specific language about full 
reclamation bonding, has been full bonding requirements for 
activities. We are updating our regulations to make those 
consistent with what BLM has that was also a result of an NRC 
study that was done back in the late 1990s.
    Senator Barrasso. Mr. Brancard, I assume you are agreeing 
with this. I think you shook your head yes.
    Can we talk about the role that the States should play 
versus the Federal Government? We have a lot of historic 
abilities in Wyoming in doing this with coal mines and with 
cleanup. Can you talk about the role of the Federal Government 
versus States and relying on some of the expertise the States 
have?
    Mr. Brancard. Senator Barrasso, because we are funded under 
Title IV of SMCRA, as is Montana, Wyoming, Colorado, the Navajo 
Nation, Hopi Nation, we have a staff dedicated to mine programs 
with a series of experts in various areas so we can take the 
projects from the initial phase of reconnaissance, assessment 
under NEPA, the National Historic Preservation Act. We have 
folks who are engineers who design the closures, and then we 
put the projects out to bid, and we have local contractors who 
do the work. So we have a program that can take the project 
from beginning to end. So that is why we think the States are 
in a very good position to handle, also taking over the 
hardrock programs when they are willing to do that.
    Senator Barrasso. Is there a way to get the funds to the 
States quicker, to let you do the job faster and more 
effectively?
    Mr. Brancard. I mean, the grant program under SMCRA works 
pretty well. We have a series of 3-year grants at any one point 
in time. That allows us enough time under each grant to finish 
any projects, more than enough time. So that process has worked 
pretty well. We are pretty happy with the grant process. I know 
the State of Wyoming has a different perspective on grants 
versus direct payments, but we are pretty happy with the grant 
program.
    Senator Barrasso. We just like the money. We want the money 
immediately.
    Ms. Nazzaro, if I could ask you a question or two. We 
talked about the estimates of how many mines were out there. In 
some States like Wyoming, there is an exact count and we are 
fairly comfortable with those numbers. For other places, I read 
things like 16,000, 47,000, maybe 50,000. I mean, before we 
really kind of go too far down the road, should we not have a 
better inventory of some of these?
    Ms. Nazzaro. Definitely. We did see some wide variations. 
One of the significant problems we determined was this lack of 
a uniform definition. However, for example, in New Mexico, they 
still base the number of sites on the number of features and 
basically they were assuming that there were 15 to 20 features 
per site. So they kind of backed into their number. We did ask 
them to explain how they came up with the number, and we did 
see a lot of variance. So you are correct, and the inventory 
would be a great starting place.
    Senator Barrasso. Mr. Chairman, I think I am out of time. 
Thank you.
    The Chairman. Thank you very much.
    Senator Salazar.
    Senator Salazar. Thank you very much, Senator Bingaman, for 
holding this hearing.
    I have a fuller statement for the record that I will just 
submit for the record.
    [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 two critical issues: the legacy of 
abandoned mine lands and uranium mining. I look forward to hearing from 
our witnesses today about the issues they believe Congress should 
consider as we grapple with hardrock mining reform.
    We have had several hearings on hardrock mining in this Congress, 
and members of this committee have heard me speak before to 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. I am grateful that today's hearing will shine a direct 
spotlight on the need to enable more cleanups of abandoned mine lands, 
including Good Sam cleanups.
    The Western United States is home to many abandoned mines and 
mining residues; my state of Colorado has over 23,000 abandoned mine 
sites. At these sites there are typically significant physical hazards 
to humans and wildlife. Many of these sites continue to pollute the 
water, land, and air. According to the Colorado Division of Reclamation 
Mining, and Safety over 1,300 miles of stream in Colorado are affected 
by heavy metal contamination. Erosion and sedimentation, acid rock 
drainage, heavy metals leaching into streams, sulfide waste piles, 
contaminated soils, and improperly disposed mining processing chemicals 
are some of the numerous legacies of 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. 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 unabated.
    Today, relative to the scope of the problem, there is a paucity of 
federal revenue devoted to cleaning up abandoned hardrock mines. In 
truly exceptional circumstances, abandoned mines have been reclaimed 
under EPA's Superfund program; in its history 88 hardrock mines have 
been listed on the National Priority List. A limited funding stream is 
available for cleanups of hardrock mines through the Coal Abandoned 
Mine Land Program. According to the Office of Surface Mining 
Reclamation and Enforcement (OSM), over the history of this thrity-or-
so year old program only 1,279 hardrock sites have been reclaimed. I am 
pleased to be an original cosponsor of a bill with Chairman Bingaman to 
undo a recent ruling by the Bush Administration that forbids the use of 
these funds for hardrock mine cleanups.
    I believe that, going forward, Good Samaritan cleanups have to be a 
part of our national mine reclamation ``toolbox.'' Providing a 
framework that encourages Good Samaritan cleanups is essential to 
expanding reclamation activities. More rivers and streams will return 
to habitable condition with Good Sam legislation in place than without 
it. 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 second topic of today's hearing is uranium mining, another 
issue that is critically important in my home state of Colorado. As we 
all know, today there is a ``gold-rush'' mentality when it comes to 
uranium claims. From a lowpoint of $7 per pound in 2000, the market 
price of uranium ballooned nearly 2000 percent between 2000 and 2007. 
This rapid price increase and the possibility of expanded use of 
nuclear power has led to an enormous increase in the number of uranium 
mining claims. Perhaps the highest profile example of this surge in 
claims are the hundreds of new claims within a few miles of the rim of 
the Grand Canyon. Colorado is also seeing a rush of new claims in 
several areas of the state.
    The price volatility of this commodity alone is disconcerting, but 
of course uranium mining has a troubled environmental and public health 
legacy. Traditional open-pit uranium mining has long been associated 
with adverse health impacts for miners and tailings piles that plague 
nearby communities. In northern Colorado, there is a proposal to 
perform in situ leaching uranium mining. The citizens who live near the 
proposed site have expressed their grave concerns to me about the 
potential negative economic and environmental impacts that this project 
may have on their communities. The proposed project would be located 
within 30 miles of a population of approximately 300,000 people. Many 
are worried that the in situ leaching process employed at the mines 
will result in contamination of their groundwater.
    Today I would like the witnesses on our second panel to address the 
fundamental question of the cumulative global experience with in situ 
leach uranium mining. In my correspondence with EPA on the subject thus 
far, I have not been assured that we understand the risks, especially 
to our groundwater, and that we have the regulatory processes and 
requirements in place to assess the impacts of ``excursions'' of 
uranium solution in these operations. I am seeking clarification from 
each of the regulatory agencies involved in licensing in situ leach 
mining operations that they share a coherent vision of the risks and 
issues of public concern.

    Senator Salazar. I may not be around for the second panel, 
so I will make a little longer opening narrative here.
    First, my interest in terms of dealing with this issue is 
that it does seem that we need to update the 1872 Mining Law. 
It has been around for a very, very long time and it is 
probably one of those laws that should have been updated a long 
time ago. I think the time has come, and we may have the 
coalition here in the United States Senate to get that done 
this year.
    Secondly, I am very interested in having, as part of that 
reform, Good Samaritan legislation included in that reform. We 
attempted to get that legislation through last year. We were 
not successful in doing that, but it is my hope that as we move 
forward with any reform effort, that Good Samaritan legislation 
will be a part of that.
    Third, I am concerned about uranium mining in my State of 
Colorado, as well as across the West, and making sure that as 
we move forward with uranium mining on our public lands that we 
are doing it in a way that is going to safeguard our 
communities and our environment.
    First of all, with respect to the abandoned mine lands 
problem, in Colorado we have 23,000 abandoned mines according 
to our Division of Minerals and Geology. We have 1,300 miles of 
stream, according to them also, that has been affected by heavy 
metal contamination and a whole host of other related facts, 
demonstrating the problem with respect to abandoned mines.
    My question to Mr. Bisson, Mr. Ferguson, and Mr. Brancard, 
and Ms. Struhsacker is if we were to move forward with Good 
Samaritan legislation, could we, in your opinion, start 
nibbling away at this huge problem that we have in the West 
with respect to what has been estimated to be half a million 
abandoned mines? If so, how important do you think this is as 
an issue for us as we look at mining reform?
    Mr. Bisson.
    Mr. Bisson. Senator, I think that one of the keys to 
getting many sites cleaned up is public/private partnership. To 
the extent that private parties are not coming to the table to 
help work with us on cleanup because of that issue, I think 
solving that issue would greatly help getting a lot of these 
sites cleaned up faster.
    Senator Salazar. Mr. Ferguson.
    Mr. Ferguson. I would just echo that. The information we 
are receiving from partners, as well as industry, is that they 
would be more than happy to help out in some of these areas, 
but this is a hurdle that they see right now.
    Senator Salazar. Mr. Brancard.
    Mr. Brancard. Senator Salazar, New Mexico supports the 
long-term efforts of the Western Governors Association. This 
has been a priority for the WGA for many years to try to get 
Good Samaritan legislation through. We see a lot of benefits 
for State government and for the private partners who want to 
work on these projects.
    Senator Salazar. Ms. Struhsacker.
    Ms. Struhsacker. I would echo these comments. I mean, 
Senator Salazar, you have in Colorado one of the examples of a 
terrific partnership there at the Animas River Stakeholders 
Group where some very challenging environmental issues have 
been addressed through a collaboration of public/private sector 
efforts. But think about what they could have achieved if they 
did not have to focus as much of the attention as they did in 
figuring out how to get around those liability issues, if that 
money and that energy and that capital could have been put 
directly into the ground as opposed to overcoming that legal 
and institutional hurdle.
    Senator Salazar. Let me ask a couple of you this question. 
Some have said that maybe what we ought to do is to limit the 
access to the immunity provisions of Good Samaritan only to 
nonprofit organizations. From your point of view, would that 
cause a diminishment in the possibility of the effort here with 
respect to private companies being able to enter into these 
collaborations to clean up these abandoned mine sites?
    Ms. Struhsacker. Oh, absolutely. There are lots of examples 
of private companies being involved, and sometimes it is mining 
companies but sometimes it is other companies. There is a 
wonderful example in the State of Utah where there was a 
coalition involving State and Federal regulators, Trout 
Unlimited, and Tiffany and Company. Tiffany and Company has 
been involved in this Mining Law debate for a number of years, 
and unlike many groups, they have actually put their money 
where their mouth is and they contributed financial resources 
to the cleanup of an abandoned mine.
    Senator Salazar. Mr. Brancard, if you can speak on behalf 
of the Interstate Compact Association that you represent, would 
it be a good thing to allow private companies also to have 
immunity under Good Samaritan legislation if we can provide the 
right safeguards in the law?
    Mr. Brancard. Senator Salazar, I think the concerns of the 
States have been not necessarily about private parties in 
general, but just to make sure that parties who are potentially 
responsible under law are given immunity here. So if there is a 
company, an innocent purchaser, et cetera, who comes in and 
wants to participate in the program, we see that as reasonable.
    Senator Salazar. Let me just say, if I may, Mr. Chairman, 
that I think that we cannot move forward with good Mining Law 
reform unless we address the legacy issue that we have to 
address, and it seems to me the Good Samaritan legislation is a 
good way of moving forward and I hope we get it done.
    Mr. Chairman, because I am going to have to leave for an 
amendment that I am doing on the floor, I want to just make a 
quick comment, if I may, concerning uranium.
    We were part of the 2005 Energy Policy Act out of this 
committee, and in my view, it helped open up the door to much 
of the uranium exploration that is taking place across the 
country on our public lands. In my State of Colorado, the 
number of active claims has risen 432 percent--432 percent--
just in the last 5 years. We now have about 23,500 claims in 
the State of Colorado for uranium. That is a reflection I think 
of what has happened with respect to the price of uranium where 
in 2000 it was $7 per pound, and it reached a high last summer 
of $136 per pound. So we have a huge issue in terms of dealing 
with the pressure that is being put on the State and on our 
public lands with respect to uranium mining.
    One of the key concerns that I have has got to do with in-
situ mining on uranium properties. There are projects in my own 
State which are being proposed where the mining method is an 
in-situ mining method, and at least according to what we have 
heard from the EPA, we have not received any assurance that we 
can, in fact, protect the groundwater, aquifers, and the other 
environmental concerns that we have.
    So not for this panel, I will say for the panel that comes 
afterwards, as well for this committee, it is an issue that I 
have some keen interest in because some of the projects that 
are proposed in Colorado are very close to some very major 
communities in my State, and many people in my State are 
raising concerns about whether or not this new methodology of 
mining is going to be a safe method.
    The Chairman. All right. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman, and thank you 
to the members of the panel.
    The GAO testimony indicates that in my home State of 
Alaska, we have relatively few abandoned hardrock sites and 
even fewer that pose a significant hazard to public safety and 
significant risk of environmental degradation. We are glad for 
that.
    But what we see in the State is opponents of mineral 
development, in general, are pointing to the legacy of 
abandoned mine sites in the other States and they use this to 
support the argument that local communities, and particularly 
our native communities in rural Alaska, that they oppose 
mineral development in general. I find this a very troubling 
situation for us as a State.
    Here in the Congress we passed the Alaska Native Claims 
Settlement Act back in 1971, and part of the purpose of this 
act was to put valuable natural resources in the hands of 
Alaska Native corporations in the hopes that they would develop 
these lands and create employment opportunities in very remote 
areas of the State that would really not have economic 
opportunity otherwise and economic opportunity in parts of the 
State where unemployment is incredible.
    So we are now facing this in the State as we try to advance 
mining opportunities and we are seeing resistance. It is not 
from things that we have done or failed to do in our own State 
but examples that have happened outside the State of Alaska.
    So I guess I am asking a very general question in the sense 
of is it fair. I mean, is it fair that you have opponents of 
mineral development that will use these types of examples, the 
things that have happened historically in the Lower 48 to 
prejudice communities against mineral development in a State 
like Alaska.
    I know, Ms. Struhsacker, and you certainly, Mr. Bisson, 
both of you have experience in Alaska. Can we just stand up and 
say, well, we do not have the abandoned mines problem in the 
State like you do in the Lower 48, so ignore that? Do not look 
at that man behind the curtain.
    Mr. Bisson.
    Mr. Bisson. Senator, as you know, I recently moved from 
Alaska, and I watch what is happening up there with the huge 
mines that are being proposed. There is a lot of debate on all 
sides of those issues.
    I can only say that if you want to compare what may happen 
on those big mines, you really have to look at what is going on 
with the current-day mines under the current regulations. We 
simply do not believe we are seeing or going to see the same 
problems that happened in the past.
    I do not know what to suggest to you in terms of defending 
it because I think there is a lot of money being thrown on that 
issue by people who simply oppose mining in those locations. I 
do not know what you can say or what you can do to offset it.
    Senator Murkowski. Ms. Struhsacker, any suggestions, 
observations?
    Ms. Struhsacker. Senator Murkowski, those who are pointing 
to old, unregulated mines and saying that is what is going to 
happen in the future if you allow mining in Alaska are clinging 
to an anachronism. If we could simply ask them to take a look 
at what it is that we do today, look at all of those 
regulations that I showed on that chart that apply to mining--
they have absolutely every right to demand and expect that 
mining be done right. I think what we say to them is those 
regulations and those bonding requirements demand that too, and 
they guarantee that mining will be done right.
    There will be a number of safeguards at today's modern 
mines. You will have monitoring that will provide ongoing 
verification if the mine is performing the way it said it was 
going to. If it is not, both the Forest Service and the BLM and 
State regulators already have the authority to require miners 
to submit larger bonds or to do something different.
    So I guess I would say to them that they should become more 
informed about the new regulations that apply to mining, come 
see what is happening in my State of Nevada. I think if you 
could get some of the mine opponents in Alaska to come see the 
on-the-ground environmental protections that are going into 
mining in Nevada, I think they would come away with a different 
impression.
    Senator Murkowski. I appreciate that, and we may take you 
up on the offer to do a field trip there.
    It is frustrating and it is not frustrating just within the 
mining industry. Mr. Bisson certainly knows that we have been 
trying to educate people outside the State of Alaska that the 
technology and the rules of the game, as they relate to oil and 
gas extraction, have certainly changed in a 30-year period. 
Yet, people still cling to the way it used to be, and whether 
it is the technology or whether it is the environmental laws 
and regulations that we have put in place to make sure that we 
do not have the mistakes of the past, sometimes it is difficult 
to bring people into this decade insofar as what we have 
learned.
    Mr. Bisson.
    Mr. Bisson. Senator, in your State, if you want to take 
people and show them an example of how a mining company does it 
right, take them to the Fort Knox Mine up near Fairbanks and 
look at the restoration that that company did on the watershed 
below from past practices. It is amazing what they have done in 
terms of cleaning up past issues, and that is all on State 
land.
    Senator Murkowski. We do have some great examples.
    I appreciate your comments and your testimony this 
afternoon.
    Thank you, Mr. Chair.
    The Chairman. Thank you and let me thank everyone on this 
panel. I think this has been very good testimony.
    We have a second panel, and I will just call them forward 
and I will introduce them as they come forward. On our second 
panel is the Honorable Joe Shirley, who is President of the 
Navajo Nation in Window Rock, Arizona. We also have Benjamin 
Grumbles who is the Assistant Administrator for Water in the 
EPA. We have David Geiser, who is the Deputy Director of the 
Office of Legacy Management in the Department of Energy. We 
have Charles Miller, who is the Director of the Office of 
Federal and State Materials and Environmental Management 
Programs in the Nuclear Regulatory Commission. We have Senator 
David Ulibarri, who is Cibola County Manager in Grants, New 
Mexico, and Fletcher Newton, who is with the National Mining 
Association out of Denver. We appreciate all of you being here.
    Let me ask that each of you please summarize your 
statement, if you would, make the main points that you think we 
need to be aware of. As I am sure you are aware, this has 
turned into something of a long hearing, and I am afraid some 
of our members have had to leave. But we are anxious to get 
your full testimony. We will include it in the record, and we 
would appreciate it if you could hit the high points for us. 
Why don't we start with President Shirley over here on the 
left? Thank you for being here.

 STATEMENT OF JOE SHIRLEY, JR., PRESIDENT, THE NAVAJO NATION, 
                        WINDOW ROCK, AZ

    Mr. Shirley. Thank you, Senator Bingaman, Chairman, Senator 
Domenici, and members of the committee.
    The Chairman. Let me interrupt just to say that Senator 
Domenici was called off to another meeting, and he apologized 
for not being able to remain for the full hearing.
    So please go ahead.
    Mr. Shirley. I understand I have at least 300 seconds. I 
will try to do that, Mr. Chairman.
    As you begin to make changes to the laws that govern 
mineral extraction, you will hear from many interests that will 
encourage you to expand uranium mining throughout the country, 
particularly in the Southwest. I am here to ask you to respect 
the Navajo Nation's tragic experience with uranium mining and 
allow the Navajo people and Navajo Indian Country to remain 
free of renewed contamination.
    The Navajo people do not want renewed uranium mining on or 
near the Navajo Nation. I ask you to respect the National 
Resources Protection Act, a Navajo law that places a moratorium 
on uranium mining on Navajo land and within Navajo Indian 
Country. Uranium mining that takes place on land just off the 
Navajo land boundary will not and cannot hold its contaminants 
within a narrow area. The contamination will travel. It does 
not stay in one place. It moves as it has for decades and will 
continue to defile the land, water, and the people.
    The Navajo Nation also needs the Federal Government to 
clean up the contamination left behind from past uranium mining 
by companies that have long disappeared. Decades after mining 
has ceased on the Navajo Nation, my people continue to get sick 
and die from the contamination left behind.
    Over a half century ago, the United States Government, 
faced by the threats of the cold war, began a massive effort to 
mine and process uranium ore for use in the country's nuclear 
weapons programs. Much of that uranium was mined on or near 
Navajo lands and much of it extracted and processed with Navajo 
hands. Now more than 50 years alter, the legacy of uranium 
mining has devastated both the people and the land. The 
workers, their families, and their neighbors suffer increased 
incidences of cancers and other medical disorders caused by 
their exposure to uranium. Fathers and sons who went to work in 
the mines and the processing facilities brought the remnants of 
uranium into their homes at the end of each day, infecting 
their families. The mines, so many of which have been 
abandoned, have left open scars in the ground leaking 
radioactive waste. The companies that processed the uranium ore 
dumped their waste in open and, in some cases, unauthorized 
pits infecting both the soil and the water. The tragedy of 
uranium's legacy extends not only to those who worked in the 
mines, but to those who worked and lived near the mines that 
have also experienced devastating illnesses. An even greater 
tragedy is that decades later, the families who live in those 
same areas continue to experience health problems today. The 
remnants of uranium activity continue to pollute our land, our 
water, and our lives.
    Many companies have approached the Navajo Nation to mine 
our uranium deposits and have promised us newer and cleaner 
methods of mining that do not harm the land, the water, or the 
people. Recently some companies have promoted the use of a 
process called in-situ leach mining that mines uranium ore by 
injecting a solution in the earth that pulls the ore from the 
surrounding rock. These companies claim the process is 
harmless. The science on this process is, at best, inclusive 
and, at worst, points to increased background radiation than 
existed before the mining operation.
    I have a hard time believing the claims of those who wish 
to profit from uranium mining that their new process is so much 
safer when history and science establish a different record. 
The Navajo people have been consistently lied to over the last 
60-plus years by companies and Government officials concerning 
the effects of various mining activities. Unfortunately, the 
true cost of these activities is only understood later when the 
companies have stolen away with their profits, leaving the 
Navajo people to bear the health burdens.
    Why should we believe these companies now when they failed 
to clean up the toxic mess they left behind the first time? Why 
should we believe these companies now when, years after the 
last pound of uranium was removed from Navajo land, my people 
still get sick and die from the contamination?
    We are asked to believe blindly what the companies tell us, 
that the process is clean and nonintrusive. The very nature of 
this clean and nonintrusive process involves the injection of 
fluid that cannot be controlled and will most assuredly 
contaminate anywhere it flows, including into our groundwater. 
The absolutes of clean and nonintrusive do not equate in my 
mind to uncontrolled and unproven. Why should we believe any of 
these companies when they threaten our water and try to pit the 
Navajo people against one another?
    In response to these attempts to renew uranium mining, the 
Navajo Nation Council passed and I signed into law the Natural 
Resources Protection Act. This act places a ban on all uranium 
mining, both within the Navajo Nation boundary and within what 
we call Navajo Indian Country. This means that the Navajo 
Nation asserts its right and jurisdiction as a sovereign 
government, as recognized by the Federal law and more recently 
by courts and the EPA, to place a ban on the mining of uranium 
on both the Navajo Nation and surrounding lands.
    The Navajo Nation Code and the United States Code define 
the extension of Navajo jurisdiction to include Navajo lands, 
trust lands, allotted lands, and dependent Indian communities. 
Under this definition, the areas currently under mining permit 
review fall within the Navajo jurisdiction. Alternatively, 
regardless of whether or not Navajo jurisdiction under the 
Natural Resources Protection Act is found to be controlling, 
the Navajo Nation Environmental Protection Agency maintains 
jurisdiction under the grant of primacy by the U.S. EPA to 
control groundwater injection. The Navajo Nation will use any 
and all measures at its disposal as a sovereign nation to 
ensure that our law is carried out.
    As time has gone on and the land has been eroded by wind 
and rain, we continue to discover new contaminationsites where 
uranium was mined and processed. We have also discovered both 
illegal dump sites and legal dump sites that were properly 
closed that have been eroded and are now open to the elements 
spreading their contaminants with every gust of wind. It is 
unconscionable to me that the Federal Government would consider 
allowing uranium mining to be restarted anywhere near the 
Navajo Nation when we are still suffering from previous mining 
activities.
    As an example, my people and their livestock still drink 
from contaminated wells. There are only two options for 
rectifying this type of problem, finding a new source of water 
or removing the contaminants from the existing sources. A new 
source would require large-scale water development projects 
such as the proposed Navajo Gallup Water Supply Project. While 
such projects are expensive, they pale in comparison to the 
cost of removing the contaminants from drinking water sources. 
Cleaning the contaminated water sources will cost many billions 
of dollars. This is just a fraction of the ongoing costs 
associated with uranium contamination.
    In summary, the Navajo Nation asks you to respect our 
wishes to live free of uranium mining. If the Government and 
corporations insist on uranium mining, we insist it not be on 
the Navajo Indian Country. We have lived through that once and 
continue to live with its effects today. The Navajo people have 
earned the right, through illness and death, to choose not to 
live through it again. I pray that the committee will learn 
from the experiences of the Navajo people and protect their own 
constituents and land from generations of contamination.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Shirley follows:]

 Prepared Statement of Joe Shirley, Jr., President, The Navajo Nation, 
                            Window Rock, AZ
    Good afternoon Chairman Bingaman, ranking member Domenici, and 
members of the Committee. Thank you for inviting me to testify before 
you today. As you begin to make changes to the laws that govern mineral 
extraction, you will hear from many interests that will encourage you 
to expand uranium mining throughout the country; particularly in the 
southwest. I am here to ask you to respect the Navajo Nation's tragic 
experience with uranium mining, and allow the Navajo People and Navajo 
Indian Country to remain free of renewed contamination.
    The Navajo People do not want renewed uranium mining on or near the 
Navajo Nation. I ask you to respect the Din Natural Resources 
Protection Act (DNRPA) that places a moratorium on Navajo Land and 
within Navajo Indian Country. Uranium mining that takes place on land 
just off the reservation boundary will not and cannot hold its 
contaminants within a narrow area. The contamination will travel; it 
does not stay in one place. It moves as it has for decades spreading 
contamination as it moves. The federal government should clean up these 
existing contaminated sites before it promotes renewed uranium mining. 
Decades after mining has ceased on the Navajo Nation, my people 
continue to get sick and die from the contamination left behind.
    Over a half century ago, the United States government faced by the 
threats of the Cold War began a massive effort to mine and process 
uranium ore for use in the country's nuclear weapons programs. Much of 
that uranium was mined on, or near, Navajo lands, and much of it 
extracted and processed with Navajo hands. Now more than 50 later, the 
legacy of uranium mining has devastated both the people and the land. 
The workers, their families, and their neighbors suffer increased 
incidences of cancers and other medical disorders caused by their 
exposure to uranium. Fathers and sons who went to work in the mines and 
the processing facilities brought the remnants of uranium in to their 
homes at the end of the each day infecting their families. The mines, 
so many of which have been abandoned, have left open scars in the 
ground leaking radioactive waste. The companies that processed the 
uranium ore dumped their waste in open, and in some cases unauthorized, 
pits infecting both the soil and the water. The tragedy of uranium's 
legacy extends not only to those who worked in the mines, but to those 
who worked and lived near the mines that have also experienced 
devastating illnesses. An even greater tragedy is that decades later, 
the families who live in those same areas continue to experience health 
problems today. The remnants of uranium activity continue to pollute 
our land, our water, and our lives. It would be unforgivable to allow 
this cycle to continue for another generation.
    Many companies have approached the Navajo Nation over the years 
with promises of vast riches if we were to allow them to mine our 
uranium deposits. They have promised us newer and cleaner methods of 
mining that do not harm the land, the water, or the People. Recently 
some companies have promoted the use of a process called in situ leach 
mining that mines uranium ore by injecting a solution in the earth that 
pulls the ore from the surrounding rock. These companies claim the 
process is harmless. The science on this process is at best 
inconclusive, and at worst points to increased background radiation 
than existed before the mining operation. I have a hard time believing 
the claims of those who wish to profit from uranium mining that their 
``new'' process is so much safer when history and science establish a 
different record. The Navajo People have been consistently lied to over 
the last 50 plus years by companies and government officials concerning 
the effects of various mining activities. Unfortunately, the true cost 
of these activities is only understood later when the companies have 
stolen away with their profits leaving the Navajo People to bear the 
health burdens. Why should we believe these companies now when this 
industry failed to clean up the toxic mess they left behind the first 
time? Why should we believe these companies now, when years after the 
last pound of uranium was removed from Navajo Land, my people still get 
sick and die from contamination?
    I would like to take a moment to discuss the community of 
Crownpoint, New Mexico. For years a company has attempted to mine 
uranium using the in situ process here. The majority of the population 
of Crownpoint has consistently opposed any attempted mining. In 
response to the wishes of the community, the company has used Navajos 
who hold title to their land to bypass the objections of the community. 
By luring these Navajos with promises of riches they have managed to 
divide the community against itself, and are now pressing hard to begin 
mining operations. Are these the business practices that the Navajo 
People will have to look forward to in the Great 21st Century Uranium 
Rush? Are we to be cast aside again so others may profit?
    The area where this mining would take place is located next to a 
school and is only several hundred feet from the sole drinking water 
source for more than 3000 Navajos. While we have been promised that in 
situ leach mining is a harmless process, one need only watch a stream 
flow to understand that a liquid will follow its own path. No one here 
can guarantee me that once this toxic solution is in the ground that it 
won't move of its own accord and contaminate our drinking water. I will 
not risk the health and safety of my people on the promises of those 
who advance as a fact something for which there is little evidence. I 
will not allow my Navajo People to be the guinea pigs of those seeking 
only profit. I will not sit idly by and watch as another generation of 
Navajos face a litany of cancers and other illnesses.
    We are asked to believe blindly what the companies tell us, that 
the process is clean and nonintrusive. The very nature of this clean 
and nonintrusive process involves the injection of fluid that cannot be 
controlled, and will most assuredly contaminate anywhere it flows 
including into our ground water. The absolutes of clean and 
nonintrusive do not equate in my mind to uncontrolled and unproven. Why 
should we believe any of these companies when they threaten our water 
and try to pit the Navajo People against one another? I will not allow 
dividing and conquering the Navajo People to remain a profitable 
strategy.
    In response to these attempts to renew uranium mining, the Navajo 
Nation Council passed, and I signed into law, the DNRPA. This Act 
places a ban on all uranium mining both within the Navajo Nation 
boundary, and within ``Navajo Indian Country.'' This means that the 
Navajo Nation asserts its rights and jurisdiction as a sovereign 
government as recognized by federal law, and more recently by the 
courts and the EPA to place a ban on the mining of uranium on both the 
Navajo Nation and surrounding lands. The Navajo Nation Code and the US 
Code define the extension of Navajo jurisdiction to include reservation 
lands, trust lands, allotted lands, and dependent Indian communities. 
Under this definition the areas currently under mining permit review 
fall within Navajo jurisdiction. Alternatively, regardless of whether 
or not Navajo jurisdiction under the DNRP is found to be controlling, 
the Navajo Nation Environmental Protection Agency maintains 
jurisdiction under the grant of primacy by the US EPA to control ground 
water injection. The Navajo Nation will use any and all measures at its 
disposal as a sovereign power to ensure that our law is carried out.
    As time has gone on and the land has been eroded by wind and rain, 
we continue to discover new contamination sites where uranium was mined 
and processed. We have also discovered both illegal dump sites, and 
legal dump sites that were properly closed, that have been eroded and 
are now open to the elements spreading their contaminants with every 
gust of wind. It is unconscionable to me that the federal government 
would consider allowing uranium mining to be restarted anywhere near 
the Navajo Nation when we are still suffering from previous mining 
activities. As an example, my people and their livestock still drink 
from contaminated wells. There are only two options for rectifying this 
type of problem, finding a new source of water, or removing the 
contaminants from the existing sources. A new source would require 
large scale water development projects such as the proposed Navajo 
Gallup Water Supply Project. While such projects are expensive they 
pale in comparison to the cost of removing the contaminants from 
drinking water sources. Cleaning the contaminated water sources would 
cost many billions of dollars. This is just a fraction of the ongoing 
costs associated with uranium contamination.
    If the committee insists on promoting renewed uranium mining 
outside of Navajo Indian Country, then the federal government should at 
minimum take this opportunity to use the profits from such mining 
activity to clean up historic mining and processing sites. This is in 
no way an endorsement of uranium mining, but an argument that any 
future revenues from uranium mining should at a very minimum go to 
alleviating the sins of historic uranium activities.
    In sum, the Navajo Nation asks you to respect our wishes to live 
free of uranium mining. If the government and corporations insist on 
uranium mining we insist it not be on Navajo Indian Country; do it 
elsewhere. We have lived through that once, and continue to live with 
its effects today. The Navajo People have earned the right through 
illness and death to choose to not live through it again. I pray that 
the committee will learn from the experiences of the Navajo People and 
protect their own constituents and land from generations of 
contamination.

    The Chairman. Thank you very much for your testimony.
    Mr. Grumbles, why do you not go right ahead?

STATEMENT OF BENJAMIN H. GRUMBLES, ASSISTANT ADMINISTRATOR FOR 
             WATER, ENVIRONMENTAL PROTECTION AGENCY

    Mr. Grumbles. Thank you, Mr. Chairman, Senator Craig. I am 
Benjamin Grumbles, Assistant Administrator for Water at the 
U.S. EPA. Thank you for your stamina for this hearing.
    The Chairman. Thank you for yours.
    Mr. Grumbles. I was listening intently to the discussions 
of the first panel and there was a lot of discussion about 
existing Federal regulatory environmental tools, the role of 
EPA, and the development of new tools through Good Samaritan 
legislation. So in the brief moments I have to summarize the 
testimony, Mr. Chairman, I would like to say that EPA is 
committed to using all appropriate regulatory tools, Safe 
Drinking Water Act, Clean Water Act, CERCLA, as well as 
innovative applications of those programs and new tools, 
including the Good Samaritan initiative and the legislation 
that has been proposed. I also want to say that we are 
coordinating closely with the Nuclear Regulatory Commission on 
uranium mining issues.
    I heard excellent discussion about the scope of the 
problem, the number of mining sites, abandoned mine sites, and 
the risks they pose to environmental health and safety. Mr. 
Chairman, the reality is that there is some good news, and the 
good news is that there are some innovative tools, tools such 
as the ones that EPA and other Federal agencies have been 
working on with western Governors to encourage Good Samaritans 
to step in. Unfortunately, that is needed because of the result 
of legal and bureaucratic obstacles under current laws, 
particularly the Clean Water Act.
    Mr. Chairman, we have found that through the use of 
administrative procedures such as the tools that the 
Administrator, Steven Johnson, issued last year for CERCLA, 
Superfund, Good Samaritan initiatives, we think that sends a 
very strong signal so that those who are afraid to step 
forward, those who are truly Good Samaritans but are afraid of 
possible Superfund/CERCLA liability--they will receive comfort 
letters or covenants not to sue, cleanup covenants. We think 
that is going to help tremendously in the effort to use new 
tools.
    Our view is that we should not let the perfect be the enemy 
of the good or the perfect being the enemy of the Good 
Samaritan. So we support targeted bipartisan clean water 
legislation.
    The other two items I wanted to mention, Mr. Chairman, are 
in-situ recovery of uranium. I certainly know there is growing 
interest in developing uranium mining sites in several States. 
The United States EPA is aware of potential concerns from this 
process. We share authority with the Nuclear Regulatory 
Commission and with States in overseeing practices at these 
facilities, and we commit to continue to work together to 
ensure that there are safeguards for groundwater, there are 
safeguards for water and for the rest of the environment as 
projects move forward and use our authorities under the Uranium 
Mill Tailings Radiation Control Act as well.
    The other item, Mr. Chairman, is just to point out that EPA 
is working very closely with the Navajo Nation and other 
Federal agencies. We developed a draft action plan March 3rd to 
respond to the many concerns and to develop an approach to help 
remediate and respond to the problems that have occurred over 
the years on Navajo land.
    I look forward to answering your questions.
    [The prepared statement of Mr. Grumbles follows:]

Prepared Statement of Benjamin H. Grumbles, Assistant Administrator for 
                 Water, Environmental Protection Agency
    Mr. Chairman and Members of the Committee, I am Benjamin H. 
Grumbles, Assistant Administrator for Water at the United States 
Environmental Protection Agency (EPA). Thank you for the opportunity to 
discuss EPA's efforts to protect and restore water resources which may 
be affected by mining activities. EPA is committed to using all 
appropriate regulatory tools and collaborative partnerships to prevent 
or reduce pollution at mining sites and restore impaired watersheds. 
We're using our current authorities under the Comprehensive 
Environmental Response, Compensation, and Liability Act (CERCLA), Clean 
Water Act (CWA) and Safe Drinking Water Act (SDWA) to reduce risks and 
developing new tools and approaches, including our Good Samaritan 
Initiative, to clean up abandoned hardrock mines. We are also working 
closely with NRC on uranium mining issues.
                       the abandoned mine problem
    Inactive or abandoned mine sites can pose serious public safety and 
environmental hazards. The good news is that there are significant 
resources available through voluntary efforts to remediate these sites 
and improve environmental health and safety. Unfortunately, as a result 
of legal obstacles, we have been unable to take full advantage of 
opportunities to promote cooperative conservation through partnerships 
that will restore and enhance abandoned mine sites throughout the 
United States.
    According to estimates, there are over half a million abandoned 
mines nationwide, most of which are former hardrock mines located in 
the western states, which are among the largest sources of pollution 
degrading water quality in the United States. Acid mine drainage from 
these abandoned mines has polluted thousands of miles of streams and 
rivers, as well as ground water, posing serious risks to human health, 
wildlife, and the environment. This problem can affect local economies 
by threatening drinking and agricultural water supplies, increasing 
water treatment costs, and limiting fishing and recreational 
opportunities.
    The Center of the American West at the University of Colorado, 
Boulder developed and published a report entitled, ``Cleaning Up 
Abandoned Hardrock Mines in the West--Prospecting for a Better 
Future,'' for which EPA provided financial assistance. However, the 
report does not represent formal EPA policy. The report details the 
history of the nation's mining industry, the environmental legacy that 
remains, and describes challenges and management options--at the 
Federal, State and local level--in reducing the effects of inactive and 
abandoned mines.
    Mine drainage and runoff problems can be extremely complex and 
solutions are often highly site specific. In many cases, the parties 
responsible for the pollution and cleanup of these mines no longer 
exist. However, over the years, an increasing number of Good 
Samaritans, who are not responsible for the pollution, have expressed 
interest in cleaning up abandoned mines. Through their efforts, we can 
help restore watersheds and improve water quality.
                               liability
    The threat of liability, whether under the Clean Water Act or the 
Comprehensive Environmental Response, Compensation, and Liability Act 
(CERCLA), can be a real impediment to voluntary remediation. A private 
party cleaning up a release of hazardous substances might become liable 
as either an operator of the site, or as an arranger for disposal of 
the hazardous substances. Under the Clean Water Act, a party may be 
obligated to obtain a discharge permit which requires compliance with 
water quality standards in streams that are already in violation of 
these standards. The potential assignment of liability occurs even 
though the party performing the cleanup did not create the conditions 
causing or contributing to the degradation. Removing this liability 
threat will encourage more Good Samaritans to restore watersheds 
impacted by acid mine drainage.
    The Clean Water Act requires permit holders to comply with their 
permits so discharges do not violate water quality standards. While 
this concept has been extremely effective for protecting and restoring 
our Nation's waters, it inhibits the type of work Good Samaritans would 
undertake. Partial cleanups by Good Samaritans will result in 
meaningful environmental improvements and will accelerate achieving 
water quality standards. Yet, in many cases, the impacted water bodies 
may never fully meet water quality standards, regardless of how much 
cleanup or remediation is done.
    By holding Good Samaritans accountable to the same cleanup 
standards as polluters or requiring strict compliance with the highest 
water quality standards, we have created a strong disincentive to 
voluntary cleanups. Unfortunately, this has resulted in the perfect 
being the enemy of the good. Another concern for potential Good 
Samaritans is their potential liability for any remaining discharges at 
the abandoned mine site. Under current law, it may not be possible for 
a Good Samaritan to go onto a site, do a cleanup to improve the quality 
of a discharge, and maintain the site after completing what they said 
they were going to do without long term liability. A statutory change 
to the Clean Water Act is appropriate to provide this protection and to 
be realistic and fair to a volunteer agreeing to improve water quality. 
By removing this threat of liability, we will encourage more voluntary 
and collaborative efforts to restore watersheds impacted by acid mine 
drainage.
    Let me emphasize, however, that our support for Good Samaritan 
cleanups is not about lowering environmental standards or letting 
polluters off the hook. Good Samaritans should be held to a realistic 
standard that results in environmental improvements and to be held 
accountable while they have a permit. And those responsible for the 
pollution, if still in existence, will remain accountable, consistent 
with the Agency's ``polluter pays'' policy.
                          good samaritan tools
    In June 2007, EPA Administrator Steve Johnson released 
administrative tools that provide strong protections for Good 
Samaritans under CERCLA. The Agency developed a model Good Samaritan 
Agreement and comfort/status letter that can be used to provide greater 
legal certainty to a volunteer while also providing adequate assurances 
to the Agency that a cleanup will be performed properly. We are also 
working closely with our Federal land management agencies and State 
partners to encourage, where appropriate, greater use of voluntary 
cleanup programs for abandoned mine remediation. In addition, we 
developed guidance that will help Good Samaritans understand our 
approach to these cleanups. Our administrative tools do much under 
CERCLA to remove roadblocks, but we can only go so far 
administratively.
                          legislative efforts
    In addition to the administrative tools, the Administration and EPA 
proposed the Good Samaritan Clean Watershed Act in the last Congress to 
comprehensively reduce the Good Samaritan liability issues. That 
legislation, as you probably know, would modify both CERCLA and the 
Clean Water Act. With the release of our administrative tools, and our 
desire to accelerate the pace of environmental improvement, EPA 
continues to work with a broad range of stakeholders including the 
Western Governors' Association, and others, to develop a targeted 
bipartisan legislative proposal for the Clean Water Act, which remains 
the main obstacle to Good Samaritan cleanups. In fact, there are many 
cleanups in the State of Colorado that remain on hold and unfinished, 
not because of CERCLA liability concerns, but because of Clean Water 
Act liability concerns.
    We applaud the bipartisan legislative efforts in both houses of 
Congress to correct the issue, and we look forward to working with the 
appropriate Congressional committees on legislation. In the interim, 
and until such time as Good Samaritan legislation is enacted, EPA will 
continue to encourage and facilitate cleanup of abandon mines through 
use of its administrative tools and authorities.
                       good samaritan activities
    The first project under the Agency's Good Samaritan Initiative is 
the abandoned mine in Utah's American Fork Canyon. EPA worked with 
Trout Unlimited (TU) and a private landowner who had not caused the 
pollution at the site to help restore a watershed that has been 
impacted for well over a century, restoring the water quality and the 
habitat of a rare cutthroat trout species. Restoration of the American 
Fork is part of an ambitious multi-year effort by Trout Unlimited to 
draw attention to the problem of abandoned mines in the western United 
States while also identifying solutions. EPA has learned from the 
experience of the Trout Unlimited project, and is putting those lessons 
to good use. This restoration effort exemplifies how the President's 
vision of cooperative conservation, which emphasizes collaboration over 
confrontation, can accelerate environmental protection.
    Mine scarred lands are a particular concern of the EPA Brownfields 
Program and they were explicitly highlighted in the Brownfields Law 
passed in 2002. The Brownfields Program has coordinated a multi-agency 
collaborative initiative to help communities clean up and reuse mine-
scarred lands. The federal partners are implementing six community 
pilots in Virginia, Pennsylvania, West Virginia, Colorado, and Nevada. 
The pilot communities received targeted federal technical and financial 
support initially to help develop action plans and then to create local 
assistance packages leading to revitalization.
    We hope the Good Samaritan initiative will be a springboard for 
future successes, such as those achieved through the Brownfields 
program. But unlike the situation with Brownfields, Good Samaritans at 
abandoned mine sites are not looking to purchase the property or 
receive monetary awards for their efforts--they simply want to engage 
in voluntary stewardship activities that benefit the environment.
    The bottom line is that this type of innovative partnership 
agreement--coupled with other assistance--can help dramatically in 
revitalizing thousands of water bodies harmed by acid mine runoff.
    A comprehensive solution to the problem associated with abandoned 
mine remediation is long overdue. EPA is actively working with Congress 
and our partners at the State and local levels to create a long term 
solution to encourage and expedite Good Samaritan cleanups. EPA will 
continue to provide leadership through the Good Samaritan Initiative 
and to work with other Federal land management agencies, States and 
Congress to pass legislation for the Clean Water Act that promotes and 
encourages environmental restoration of abandon mine sites across the 
country.
                      in-situ recovery of uranium
    There is growing interest in developing uranium mining sites in 
several states due to significant increases in the price of uranium. 
Uranium is mined through conventional open pit and underground mining 
practices. However, most of the uranium extracted in the U.S. is now 
produced by in-situ leaching, or ISL. ISL uses injection wells to 
introduce alkaline fluids into underground formations to dissolve 
uranium into solution. Production wells subsequently bring the uranium-
bearing fluids to the surface, where they are processed into 
``yellowcake'' for use by the nuclear industry.
    EPA shares authority with the Nuclear Regulatory Commission (NRC) 
and with the States in overseeing practices at ISL facilities. NRC 
regulates all ISL facility operations, including the injection of 
fluids, using environmental, radiation, and ground water protection 
standards developed by EPA in accordance with the Uranium Mill Tailings 
Radiation Control Act (UMTRCA). Operators of injection wells used at 
ISL facilities also must apply for and receive a Class III well permit 
under the authority of the Safe Drinking Water Act's Underground 
Injection Control (UIC) program requirements. Permits for Class III 
solution mining wells are issued by the state UIC agency or EPA, in 
those states that have not taken primary enforcement responsibility for 
the UIC program. State UIC programs may have requirements that are more 
stringent than EPA requirements.
    At the end of 2007 there were five ISL facilities licensed and 
operating in the U.S.--in Wyoming, Nebraska and Texas. One facility in 
Wyoming is licensed and permitted, but not operating. The NRC has 
licensed another one in New Mexico, but it is not operating because of 
pending Federal court litigation regarding Safe Drinking Water Act 
permits for the facility. The NRC has received four new license 
applications and expects several additional applications in the next 
two years. Additional license applications have been received, or are 
likely to be received in the NRC Agreement States of Texas and 
Colorado. Any new facilities will be licensed by NRC or its Agreement 
States, and must apply for and receive permits from their state UIC 
program or EPA.
    We are working closely with the NRC as they develop revisions to 
their existing ground water regulations to ensure that they incorporate 
EPA regulatory requirements developed under UMTRCA and are consistent 
with EPA regulations for Class III injection wells. EPA or the state 
UIC program will maintain responsibility for permitting ISL injection 
wells. Permits consider the siting of wells, construction standards, 
operational practices, monitoring and reporting, closure, financial 
responsibility, and cleanup. The NRC regulations and related guidance 
require operators to take action to prevent off-site excursions of 
uranium production fluids into ground water aquifers during operations, 
and to restore ground water after operations are completed.
    EPA understands that some communities are very concerned about the 
potential development of new uranium ISL mining operations. States that 
may need to regulate these new mining sites are also very engaged in 
this issue, as evidenced by the national panel of presentations and 
discussions of in-situ extraction of uranium at the recent Ground Water 
Protection Council meeting in New Orleans. We will continue to work 
with our federal partners and state co-regulators to ensure that ISL 
practices do not endanger underground sources of drinking water.
                                 cercla
    The Superfund program was established under the Comprehensive 
Environmental Response, Compensation, and Liability Act (CERCLA or 
Superfund), which Congress passed in December 1980 to respond to 
concerns over Love Canal and other toxic waste sites. The Superfund 
program protects human health and the environment by performing or 
requiring cleanup of hazardous waste sites and short-term actions to 
mitigate immediate threats to human health. Some of the Nation's most 
contaminated sites are listed on EPA's Superfund National Priorities 
List (NPL). A small percentage of the 1,569 sites listed on the NPL are 
related to mining. Through FY 2007, there were 84 sites on the NPL that 
had been associated with mining or mine-related activities. The vast 
majority of abandoned mining sites in the U.S. will not be addressed 
through the Superfund program but through other federal, state, local, 
or private sector mechanisms.
                  uranium mine legacy on navajo nation
    Additionally, EPA has provided assistance to the Navajo Nation to 
address uranium abandoned mine land contamination, principally through 
the Agency's Region 9 Office. Working together with the Nuclear 
Regulatory Commission, Department of Energy, Indian Health Service, and 
Bureau of Indian Affairs, EPA has committed to provide continued 
support to the Navajo Nation to address the legacy of uranium mine 
wastes and uranium contaminated buildings and water sources. This 
support is embodied in a draft five-year plan from the five federal 
agencies that reviews public health and environmental impacts of 
uranium contamination in the Navajo Nation. We will continue to work 
closely with the Navajo Nation and other federal, state and local 
partners to manage the environmental effects of abandoned uranium mines 
on Navajo Nation.
                               conclusion
    Thank you, Mr. Chairman for giving me the opportunity to testify 
today. EPA understands the importance of mining to our nation's economy 
and global competitiveness, and is committed to using available 
regulatory tools and partnerships to protect and restore the 
environment. We look forward to working with you and your colleagues on 
mining-related environmental issues and making this the year that Good 
Samaritan legislation is enacted into law.

    The Chairman. Thank you very much.
    Mr. Geiser.

   STATEMENT OF DAVID W. GEISER, DEPUTY DIRECTOR FOR LEGACY 
                MANAGEMENT, DEPARTMENT OF ENERGY

    Mr. Geiser. Good afternoon, Mr. Chairman. My written 
testimony addresses the two items your staff had requested 
which is our management of the former inactive uranium milling 
sites and our current uranium leasing program. In the interest 
of time, I will just focus on the uranium leasing program, as 
that seems to be the primary interest today.
    The Office of Legacy Management administers the Department 
of Energy's Uranium Leasing Program. The original program began 
in the late 1940s when the U.S. Atomic Energy Commission was 
authorized to withdraw lands from public use to ensure an 
adequate reserve of uranium and vanadium ores for the Nation's 
defense program. The Atomic Energy Act of 1954, as amended, 
further authorized the AEC to lease the lands under its 
administrative control to the domestic uranium industry for the 
exploration, development, and extraction of uranium and 
associated minerals and to collect royalties on the production 
of those minerals.
    Today we manage the Uranium Leasing Program under the 
authority of the Atomic Energy Act of 1954 and in accordance 
with 10 C.F.R. 760.
    We currently manage 32 lease tracts, roughly 25,000 acres. 
All those tracts are located within the Uravan Mineral Belt in 
southwestern Colorado.
    We completed a programmatic environmental assessment in 
June 2007, and a finding of no significant impact was issued in 
July 2007 for DOE's preferred alternative, which was the 
expanded leasing program.
    In March 2008, DOE will extend the 13 active leases for an 
additional 10-year period.
    Additionally, last Friday on March 7, we offered the 
inactive lease tracts to the domestic uranium industry through 
a Web-based competitive bid solicitation.
    Today, according to industry reports, the nuclear power 
industry throughout the world consumes approximately 180 
million pounds of uranium annually. It is important to note 
that the ore reserves associated with the Department of 
Energy's program are currently estimated to be 13 million 
pounds of uranium. This is less than 2 percent of the United 
States known reserves of roughly 900 million pounds.
    While DOE is the managing Federal agency for the Uranium 
Leasing Program, we work closely with the Bureau of Land 
Management, who is responsible for all the other resource uses 
and non-DOE lease-related activities, and with the State of 
Colorado, the Division of Reclamation Mining and Safety.
    DOE does collect royalties from the Uranium Leasing 
Program. There is a site-specific annual royalty and then there 
are also production royalties that are based on the amount of 
ore actually extracted.
    This is a discussion of bonds. The Department of Energy 
also has a requirement for a bond associated with mining 
reclamation activities, and we establish that required bond on 
a site-by-site basis.
    In closing, DOE's Uranium Leasing Program covers 32 lease 
tracts in southwestern Colorado. It accounts for less than 2 
percent of the country's known uranium reserves, and we manage 
that program closely in cooperation with the Bureau of Land 
Management and the State of Colorado.
    Thank you.
    [The prepared statement of Mr. Geiser follows:]

   Prepared Statement of David W. Geiser, Deputy Director for Legacy 
                    Management, Department of Energy
    Good morning Mr. Chairman, and distinguished Members of the 
Committee. My name is David Geiser, and I am the Deputy Director of the 
Office of Legacy Management (LM) at the Department of Energy (DOE). The 
Office of Legacy Management is responsible for ensuring that DOE's 
post-closure responsibilities are met by providing long-term 
surveillance and maintenance, records management, workforce 
restructuring and benefits continuity, property management, and land 
use planning. By managing post-closure responsibilities, LM has better 
positioned the Department to continue focusing DOE programs and 
personnel on achieving the diverse missions of the Department.
                  legacy management mission and vision
    LM's mission is to manage the Department's post-closure 
responsibilities and ensure the future protection of human health and 
the environment. Our mission ensures Departmental legacy 
responsibilities are managed in a manner that best serves Department 
workers, communities, and the environment. This vision includes several 
elements:

   Human health and the environment are protected at closed 
        sites, through effective environmental surveillance and 
        maintenance. This often involves cooperative partnerships with 
        stakeholders and State, Tribal, and local governments.
   Key records and critical information are preserved, 
        protected and made publicly accessible.
   Effective oversight and management is provided for health 
        and pension benefits of the Department's former contract 
        workforce, who have been instrumental to the success of our 
        missions; and
   Federal land and other assets are returned to the most 
        beneficial use consistent with the Department's mission 
        requirements.

    In response to the Committee's request, I am here today to discuss 
two topics: (1) the Department's responsibility for managing former 
inactive uranium milling sites; and, (2) our uranium leasing program.
             long-term management of uranium milling sites
    Under the Uranium Mill Tailings Radiation Control Act of 1978, as 
amended (referred to as the ``the Act'' or ``UMTRCA''), Public Law 95-
604, DOE was responsible for cleaning up inactive uranium milling sites 
that were abandoned at the time the legislation was enacted, in 
cooperation with the state in which the tailings were located, and 
subject to the oversight of the U.S. Nuclear Regulatory Commission 
(NRC). Sites that were operating in 1978, or thereafter, are cleaned up 
by the operator under NRC or State oversight.
    LM's primary responsibility is to manage the Department's roughly 
90 closure sites and the liabilities associated with retired contractor 
workers from those sites. The 90 closure sites include approximately 30 
former inactive or active uranium milling sites that have been 
remediated under either Title I or Title II of the UMTRCA. At the 
former uranium milling sites, tailings or waste were produced by the 
extraction or concentration of uranium or thorium ore. LM provides 
long-term surveillance and maintenance for sites that are transferred 
to the Federal Government for custodial care. For the UMTRCA sites, 
this includes both surveillance and maintenance of the disposal cells 
and maintenance of contaminated groundwater treatment activities 
initiated under the clean-up phase.
  the uranium mill tailings radiation control act of 1978 authorized 
doe's cleanup of the former inactive uranium milling sites and certain 
                     nearby contaminated properties
    Title I of UMTRCA originally required the cleanup of 22 inactive 
uranium milling sites and nearby contaminated properties in the 
vicinity of the milling sites that contained residual radioactive 
materials from the milling sites. UMTRCA was amended a number of times: 
to extend UMTRCA's expiration date; to add the Edgemont, South Dakota 
vicinity properties (but not the milling site); and most recently, to 
add the Moab, Utah milling site, including any contaminated vicinity 
properties.
    Under the Act, DOE's authority for surface (tailings) cleanup at 
the original 22 milling sites and vicinity properties (including the 
Edgemont, South Dakota vicinity properties) expired in 1998. DOE's 
authority for groundwater remediation does not have an expiration date.
    DOE remediated the inactive uranium milling sites and vicinity 
properties in accordance with standards promulgated by the U.S. 
Environmental Protection Agency (EPA) in 40 C.F.R. Part 192. The 
regulations provided standards for the cleanup of soil outside 
structures (radium-226 concentration in soils) and the cleanup of 
structural interiors (gamma radiation and radon-222). In addition, the 
regulations established the design standard for the longevity of 
disposal cells. The regulations also covered the cleanup of 
contaminated groundwater.
    By 1998, DOE had remediated 22 inactive milling sites and a total 
of 5,335 vicinity properties, including construction of 18 disposal 
cells. DOE's costs for the cleanup of all 22 milling sites and the 
vicinity properties totaled $1.476 billion.
                 uranium leasing program--introduction
    LM currently administers the Department's Uranium Leasing (UL) 
Program. The original program began in the late 1940s when the U.S. 
Atomic Energy Commission (AEC), a predecessor agency of DOE, was 
authorized to withdraw lands from public use to ensure an adequate 
reserve of uranium and vanadium ores for the nation's defense program. 
Approximately 720 square miles (460,000 acres) of public lands, 
primarily in the States of Colorado, New Mexico, Utah, and Wyoming, 
were withdrawn from mineral entry by the Bureau of Land Management 
(BLM) for use by the AEC. Subsequent to the withdrawal, the AEC, along 
with the U.S. Geological Survey, began a massive drilling exploration 
program to: (1) locate deposits of uranium ores; and (2) identify other 
areas containing favorable geologic formations. On the basis of that 
exploration program, the AEC retained approximately 27,000 acres of 
public lands in withdrawn status, and the remaining lands reverted to 
the public domain.
    The Atomic Energy Act of 1954, as amended, further authorized the 
AEC to lease the lands under its administrative control to the domestic 
uranium industry for the exploration, development, and extraction of 
uranium and associated minerals, and to collect royalties on the 
production of those minerals. That authorization, included in AEC 
Circular 8, Revised, was subsequently codified as, Uranium Leasing 
Program, in title 10 Code of Federal Regulations Part 760 (10 CFR Part 
760).
    Today, according to industry reports, the nuclear power industry 
throughout the world consumes approximately 180 million pounds of 
uranium annually. Against that demand, world production of uranium is 
only 80 to 100 million pounds of uranium annually. The balance of the 
demand has historically been met through the depletion of various 
industry stockpiles; however, over the last decade, these stockpiles 
have dwindled, and can no longer sustain the continued demand. The 
realization of this fact has led to today's renaissance of the uranium 
mining industry.
    It is important to note that the ore reserves associated with the 
Department's UL Program are currently estimated to be 13.5 million 
pounds of uranium. This is less than two percent of the United States' 
known reserves, purported to be nearly 900 million pounds of uranium, 
which in turn is approximately 8.6 percent of the known world reserves 
(10.5 billion pounds of uranium).
                    uranium leasing program history
    The Atomic Energy Acts of 1946 and 1954 authorized the original AEC 
leasing program, which began in 1948 and ended in 1962, when existing 
purchase contracts met national defense needs. This program yielded 
more than 1.2 million pounds of uranium and 6.8 million pounds of 
vanadium and generated $5.9 million in royalties to the Federal 
Government.
    In the early 1970s, the emphasis for the UL Program switched from 
national defense to preserving the domestic uranium industry and 
infrastructure in support of commercial nuclear power. The current 
leasing program was initiated in 1974 with two 10-year lease periods 
that yielded approximately 6.5 million pounds of uranium and 33.4 
million pounds of vanadium. This production generated $53 million in 
royalties to the Federal Government. Most lease tract production 
activities occurred prior to 1984; however, some production operations 
resumed briefly in 1989 and 1990.
    In 1994, all leases expired. DOE prepared a Programmatic 
Environmental Assessment (PEA) of the UL Program to determine what 
action DOE should take. This PEA was completed in 1995 and culminated 
in the issuance of a Finding of No Significant Impact (FONSI) for the 
proposed action, which called for continued leasing of DOE-managed 
lands for exploration and production of uranium and vanadium ores. 
Subsequent to the FONSI, DOE offered its previous leaseholders a sole 
right of refusal for an additional 10-year lease of their respective 
lease tracts. Fifteen leaseholders accepted DOE's offer and executed 
new lease agreements. At that time, all other leaseholders reclaimed 
their respective lease operations and relinquished their rights back to 
DOE. Subsequent to 1995, two additional lease tracts have been fully 
reclaimed and relinquished back to DOE.
    Between 1994 and 2007, production only occurred during a three-year 
period, 2003 through 2005. These operations on four lease tracts 
produced over 65 thousand tons of ore, resulting in production royalty 
payments of approximately $5 million to the Federal Government.
                    today's uranium leasing program
    LM currently manages 32 lease tracts (25,000 acres), all located 
within the Uravan Mineral Belt in southwestern Colorado. Thirteen of 
these lease tracts are actively held under lease, and the remaining 19 
lease tracts are currently inactive.
    A second PEA was completed in June 2007, and a FONSI was issued in 
July 2007 for DOE's preferred (Expanded Program) alternative. This 
alternative included continuing the leasing program for an additional 
period of time, extending the 13 existing leases for that same period, 
and expanding the program to include the competitive offering of DOE's 
inactive lease tracts to the domestic uranium industry. As defined in 
the PEA, the existing lease tracts contain approximately 300 acres of 
surface disturbance from the current leaseholders' operations. In 
addition, up to 410 acres of new surface disturbance is anticipated 
over the next 10 years from the expansion of program activities.
    In March 2008, DOE will extend the 13 active leases for an 
additional 10-year period. Additionally, on March 7, DOE offered the 
inactive lease tracts to the domestic uranium industry through a web-
based competitive bid solicitation. Over 100 interested parties have 
requested that they be notified of the pending solicitation. Following 
the 60-day solicitation period and the subsequent review and evaluation 
of all bid submittals, new 10-year leases will be executed with the 
successful bidders.
              coordination with federal and state agencies
    LM is the managing federal agency for the UL Program and is 
responsible for administering the program, including compliance with 
the National Environmental Policy Act and other environmental and 
regulatory requirements. The Bureau of Land Management (BLM), as the 
federal surface-management agency, is responsible for managing all 
other resource uses and non-DOE lease-related activities (oil and gas 
development, grazing, recreation, etc.) that occur on these public 
lands. Additionally, DOE coordinates with BLM to review all 
leaseholder-proposed plans to minimize potential impacts to the various 
resources.
    The Colorado Division of Reclamation, Mining, and Safety (CDRMS) is 
the lead state agency involved with the UL Program and DOE's 
leaseholder-proposed activities. CDRMS requires and issues permits for 
all mineral exploration, mining, and reclamation activities conducted 
within the State of Colorado. DOE coordinates with CDRMS to review all 
leaseholder-proposed plans and monitor all subsequent leaseholder 
activities to ensure compliance with applicable statutes, rules, and 
regulations. CDRMS regulations include provisions for applicable 
reviews by all local agencies, the general public, and other interested 
stakeholders.
                  calculation and payment of royalties
    As mentioned, DOE collects royalties from the UL Program. Each 
leaseholder is required to pay a lease-specific annual royalty to DOE 
to maintain rights to the lease. In addition to the annual royalty, 
each leaseholder is required to pay a production royalty to DOE on all 
ores produced from the lease tract. The production royalties are 
established as a bid-percentage of the fair market value of the ore, 
which in turn is calculated from the quarterly weighted average price 
of uranium (derived from the long-term and spot market prices for 
uranium) and the quarterly average price of vanadium. The bid-
percentage is established by each potential leaseholder as the 
percentage amount they are willing to pay to obtain the lease, 
recognizing that the successful bidder is generally the qualified 
bidder offering the highest royalty bid percentage. During the 1974 
lease solicitation, the successful bids ranged from approximately four 
percent to over 36 percent. The range of the bids is, in part, 
dependent on the estimated value of the ore (quantity and quality), 
size of the lease tract, and proximity to milling sites.
    As the UL Program goes forward, DOE will receive an aggregate 
amount of $500,000 annually from its leaseholders in the form of 
minimum annual royalty payments. This amount serves to offset the cost 
for DOE to administer the program. DOE will also receive production 
royalties from its leaseholders for all ores produced from the lease 
tracts; the 2007 PEA estimated that these future production royalties 
could total $10 million annually, once lease operations reach previous 
production levels (estimated at 150,000 tons of ore at prices 
comparable to those seen in the first quarter of 2007--$80 per pound of 
uranium and $6.60 per pound of vanadium).
                     mining reclamation activities
    Each leaseholder is required to reclaim its operations in 
accordance with all applicable statutes, rules, and regulations and to 
the satisfaction of the DOE Realty Officer. This typically includes: 
(1) permanent closure of all mine portals, ventilation shafts, and 
other openings; (2) demolition and removal of all site structures and 
utilities; (3) identification of bulk radiological materials and burial 
of those materials below grade; (4) recontouring of the site, including 
mine-waste-rock materials to closely resemble and blend in with the 
existing topography; (5) redistribution of stockpiled surface soil 
materials back over the mine-site area; and (6) reseeding all disturbed 
areas with an approved, native seed mix.
    In the event a leaseholder defaults on its responsibilities, DOE's 
lease agreements require each leaseholder to post a reclamation-
performance bond (payable to DOE) in an amount adequate to cover the 
final reclamation of all leaseholder operations. DOE, through 
experience gained from the successful reclamation of the Department's 
own legacy abandoned uranium mine sites (initiated in 1994 and 
completed in 2001), establishes the required bond amounts on a site-
bysite basis and includes such factors as the type of operation being 
proposed and the location, acreage, and topography of the area to be 
disturbed. These bond amounts are calculated such that DOE could 
subcontract all final mine-site reclamation activities at no cost to 
the Government. Additionally, the bond amounts are reviewed 
periodically and revised as the leaseholder's operations change.
    CDRMS also requires that a reclamation-performance bond be posted 
for all mineral exploration and mining activities conducted within the 
State of Colorado. CDRMS routinely reviews the bond amounts established 
by DOE, and if it determines that DOE's bond is sufficient to cover all 
necessary reclamation costs for the leaseholders' operations, then 
CDRMS can (and often will) establish its bonding amount at a minimal 
level. DOE and CDRMS coordinate the oversight of reclamation activities 
to ensure that both agencies are satisfied once final reclamation is 
complete.
                               conclusion
    In closing, LM's primary responsibility is to manage the 
Department's roughly 90 closure sites and the liabilities associated 
with retired contractor workers from those sites. The 90 closure sites 
include approximately 30 former inactive and active uranium milling 
sites that have been remediated under either Title I or Title II of 
UMTRCA. In addition to this primary mission, the Office of Legacy 
Management administers the Department's UL program. The UL program 
currently covers 32 lease tracts in southwestern Colorado and accounts 
for less than 2 percent of the country's known uranium reserves. We 
manage that leasing program in accordance with 10 CFR Part 760, and in 
cooperation with the U.S. Bureau of Land Management and the State of 
Colorado.
    Mr. Chairman and distinguished Members of the Committee, this 
concludes my statement.

    The Chairman. Thank you very much.
    Dr. Miller.

STATEMENT OF CHARLES L. MILLER, DIRECTOR, OFFICE OF FEDERAL AND 
STATE MATERIALS AND ENVIRONMENTAL MANAGEMENT PROGRAMS, NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Miller. Thank you, Mr. Chairman. I am honored to appear 
before you today to discuss the U.S. Nuclear Regulatory 
Commission's regulatory role for uranium recovery facilities. I 
have submitted my written testimony for the record. With my 
allotted time this afternoon, I will summarize some of the key 
points.
    The NRC does not have the statutory authority to regulate 
traditional uranium mining. Therefore, the NRC does not 
regulate the digging or removal of uranium ore from the earth. 
Likewise, the NRC is not responsible for abandoned uranium mine 
sites.
    The NRC does regulate uranium recovery facilities under its 
Atomic Energy Act authority. The NRC's role is that of safety 
and environmental oversight of uranium recovery facilities and 
has no role in pre-application, uranium exploration, claims, 
royalties, or patents.
    There are two primary uranium recovery facilities, 
conventional mills and in-situ leach facilities, referred to as 
ISL's or sometimes ISR's.
    A conventional mill processes uranium ore which is crushed 
and sent through an extraction operation to concentrate the 
uranium and produce yellowcake.
    In the ISL uranium extraction process, wells are drilled 
into the rock formations containing the uranium ore. Water 
mixed with oxygen and sodium bicarbonate is injected into the 
uranium ore body so that it dissolves and can be extracted. The 
recovered uranium-bearing solution is pumped to a central 
processing plant which separates out the uranium and 
concentrates it.
    At the end of the uranium recovery process, after a 
licensee has reclaimed the site and remediated any groundwater 
contamination to NRC standards, the license is terminated.
    Waste from conventional milling is primarily mill tailings, 
a sandy ore residue. NRC regulates the safe storage and 
disposal of these tailings which are transferred to the 
Department of Energy for perpetual care.
    The ISL process does not produce mill tailings. Waste from 
this process includes items such as filters and piping and is 
relatively of small volume. This waste is shipped offsite to a 
licensed disposal facility.
    Many portions of the conventional and ISL uranium recovery 
sites are on or partially on Federal lands administered by BLM. 
The NRC is responsible for oversight of all uranium recovery 
facilities, both conventional and ISL, on Federal land in the 
same manner as I previously described. The BLM is often the 
cooperating agency in development of the environmental impact 
statements or complex environmental assessments for new 
applications involving Federal land. NRC applicants and 
licensees must separately obtain any permits required by other 
Federal agencies prior to construction and operation.
    The NRC has recently received three new applications for 
ISL facilities in Wyoming. Over the next few years, we are 
expecting 24 more applications for new uranium recovery 
facilities, restarts, and expansions of existing facilities and 
maybe some others.
    Existing facilities and potential new sites are in Wyoming, 
New Mexico, Arizona, Nebraska, South Dakota, and the NRC 
Agreement States of Texas, Colorado, and Utah. The NRC plans to 
work closely with all stakeholders, including Native American 
tribes, to ensure that any concerns associated with licensing 
of proposed uranium recovery facilities are appropriately 
addressed. The formal license application review process 
includes comprehensive safety and environmental reviews. If NRC 
issues a license, our continued oversight of these facilities 
is implemented through the licensing reviews and inspections.
    Mr. Chairman and members of the committee, which obviously 
are absent at this point, I hope my testimony provides you an 
understanding of NRC's role with regard to these sites. I would 
be pleased to respond to your questions. Thank you.
    [The prepared statement of Mr. Miller follows:]

 Prepared Statement of Charles L. Miller, Director, Office of Federal 
  and State Materials and Environmental Management Programs, Nuclear 
                         Regulatory Commission
                              introduction
    Mr. Chairman and Members of the Committee, I am honored to appear 
before you today to discuss the U.S. Nuclear Regulatory Commission's 
(NRC) regulatory role for uranium recovery facilities. I hope that my 
testimony and clarification of NRC's jurisdiction will be helpful to 
you in your work on mining legislation.
                            uranium recovery
    The NRC does not have the statutory authority to regulate 
traditional mining. Therefore, the NRC does not regulate the digging or 
removal of uranium ore from the earth. Likewise, the NRC is not 
responsible for abandoned uranium mine sites. These operations are the 
responsibility of other Federal and State regulators.
    The NRC does regulate the processing of uranium ore. Under its 
Atomic Energy Act authority, the NRC regulates uranium recovery 
facilities, which use chemical and/or mechanical processes to convert 
raw uranium into a compound commonly referred to as ``yellowcake.'' 
Yellowcake is then shipped to a uranium conversion facility for further 
processing as it moves along the uranium fuel cycle process.
    There are two primary uranium recovery processes over which NRC has 
jurisdiction: conventional mills and in situ leach (ISL). A 
conventional mill processes uranium ore which has been removed from the 
earth by either open pit or underground mining. The ore is then crushed 
and sent through a mill, where extraction processes concentrate the 
uranium. Waste from this process is primarily mill tailings, a sandy 
ore residue that poses a potential hazard to public health and safety 
due to its radium and chemical content. Conventional milling produces a 
substantial amount of mill tailings. NRC regulates the recovery process 
and the safe storage and disposal of these tailings.
    In the ISL uranium extraction process, wells are drilled into rock 
formations containing uranium ore. Water, usually fortified with oxygen 
and sodium bicarbonate, is injected down the wells to mobilize the 
uranium in the rock so that it dissolves in the groundwater. The 
location of the uranium-bearing solution is controlled by pumping more 
water out of the formation than is pumped into it. Containment and 
water quality are assessed through a network of monitor wells. The 
uranium-bearing solution is pumped to a central processing plant, which 
uses ion exchange to separate the uranium and concentrate it. Although 
these ISL facilities are sometimes referred to as ``mines'', the entire 
uranium extraction process, below and above ground, is considered to be 
processing and is therefore subject to NRC jurisdiction under the 
Atomic Energy Act. Waste from this process is specific in nature (e.g., 
filters, piping), relatively small in volume, and can be disposed in a 
tailings pile at a conventional mill site or at a licensed disposal 
facility. Tailings are not generated at ISL facilities. However, ISL 
facilities may have settling ponds where sediment containing uranium 
can accumulate and which must be remediated as part of decommissioning.
    An additional extraction process is heap leaching. Heap leaching is 
used most often when the content in the ore is too low for the ore to 
be economically processed in a uranium mill.
                        nrc's role under umtrca
    With the enactment of the Uranium Mill Tailings Radiation Control 
Act of 1978 (UMTRCA), mill tailings became subject to NRC regulation. 
UMTRCA was established by Congress to provide for the disposal, long-
term stabilization and control of uranium mill tailings in a safe and 
environmentally sound manner. UMTRCA established two programs to 
protect the public and environment from the potential hazards of 
uranium mill tailings and other milling waste. Title I of UMTRCA 
generally addresses mill tailings sites that were abandoned by 1978. 
Title II focuses on uranium recovery facilities and mill tailing sites 
that possessed an active license in 1978 or were licensed after 1978 by 
NRC or an Agreement State.\1\
---------------------------------------------------------------------------
    \1\ Section 274 of the Atomic Energy Act of 1954, as amended, 
provides for State assumption of NRC's regulatory authority to license 
and regulate byproduct materials (radioisotopes); source materials 
(uranium and thorium); and certain quantities of special nuclear 
materials. NRC periodically reviews these programs for adequacy and 
compatibility with NRC regulations. There are currently 34 agreement 
states.
---------------------------------------------------------------------------
Title I--Reclamation Work at Inactive Uranium Tailings Sites
    Title I of UMTRCA covers 22 inactive uranium mill tailings sites. 
Title I established a U.S. Department of Energy (DOE) program to 
remediate uranium mill sites that were abandoned prior to the enactment 
of UMTRCA in 1978. Congress directed the U.S. Environmental Protection 
Agency (EPA) to promulgate the standards for remediation. These 
standards primarily address stabilization of the tailings pile and the 
cleanup of on and offsite contamination, including contaminated 
groundwater. Under Title I, the DOE is responsible for remediation of 
these abandoned sites. The NRC is required to evaluate the DOE's design 
and implementation of its remedial action, and, after remediation and 
NRC evaluation, concur that the sites meet the standards set by the EPA 
(40 CFR Part 192). DOE conducted its remediation activities in two 
distinct stages: surface remediation and groundwater restoration. 
Surface restoration activities at all but two Title 1 sites have been 
completed. DOE continues to perform groundwater restoration activities 
at sites with groundwater concerns.
    Title I also requires DOE to remediate vicinity properties. 
Vicinity properties are land in the surrounding area of a mill site 
that DOE determined were contaminated with residual radioactive 
materials from the mill site. Here again, NRC's role is limited to 
evaluation and concurrence on DOE's remediation design and 
implementation. However because of the large number of vicinity 
properties, DOE prepared a document (``Vicinity Properties Management 
and Implementation Manual'' or VPMIM) containing generic procedures for 
identifying and remediating vicinity properties. NRC concurred on the 
VPMIM and only separately evaluates and potentially concurs in vicinity 
property remediations that do not conform to this generic document.
10 CFR Sec. 40.27--General License for DOE Established by Regulation
    To implement Title I, the NRC promulgated regulations (10 CFR 
Sec. 40.27) to establish, in the regulation itself, a general license 
authorizing DOE's custody and long-term care of residual radioactive 
material disposal sites with conditions imposed by the regulation--
These conditions include requirements for the monitoring, maintenance, 
and emergency measures necessary to protect public health and safety 
and other actions necessary to comply with the standards promulgated by 
the EPA (40 CFR Part 192). Although the DOE is not an NRC licensee 
during site cleanup, NRC must evaluate and potentially concur with 
DOE's proposed remedial action. The NRC general license authorizing the 
custody and long-term care of a specific site becomes effective after 
NRC concurs with DOE that its site-specific remedial action has been 
completed and when the Commission accepts DOE's Long-Term Surveillance 
Plan (LTSP) for the site that meets NRC requirements as specified in 
our regulations. After these actions, the DOE is the perpetual 
custodian of a site under NRC's General License established in this 
regulation.
    An LTSP must include an executed waiver under which any person--
including an Indian Tribe--holding any interest in the Title I disposal 
site, releases the United States from any liability or claim arising 
from the DOE's remedial action. A two-step process with respect to NRC 
concurrence was used at sites where groundwater contamination exists. 
At such sites, the NRC concurred on surface remediation; however, NRC 
concurrence in groundwater remediation was addressed separately and, in 
some cases, has not yet occurred. Once the NRC accepted the LTSP for 
surface remediation, each site was then included in the general license 
in 10 CFR Sec. 40.27. Ongoing groundwater monitoring is addressed in 
the LISP to assess performance of the tailings disposal units. When the 
NRC concurs that groundwater restoration has been completed, the LISP 
may be modified as necessary to reflect completion.
    Once an LTSP has been approved, the DOE has the primary 
responsibility to ensure public health and safety at the site. However, 
the NRC continues to have an oversight role. The NRC receives annual 
updates on the results of the DOE's Title I inspection program and 
under 10 CFR Sec. 40.27, the NRC maintains permanent right-of-entry to 
Title I Sites. NRC staff periodically accompany the DOE during Title I 
site inspections. If, for any reason, (e.g., DOE report, NRC 
inspection, allegation), the NRC determines the site is not safe, it 
can require DOE to correct the condition.
Title Il--Licensed Uranium Recovery Facilities and Mill Tailings Sites
    Title II of UMTRCA established the framework for NRC and Agreement 
States to regulate mill tailings and other wastes at uranium and 
thorium mills licensed by the NRC at the time of UMTRCA's passage in 
1978 or after. The statute created a second category of byproduct 
material, referred to as 11e.(2) byproduct material, defined as the 
tailings or wastes produced under any license by the extraction or 
concentration of uranium or thorium from any ore processed primarily 
for its source material content. Under Title II of UMTRCA, NRC 
regulates this byproduct material during mill operation and requires 
that the site be properly closed prior to terminating the license. The 
NRC standards for site closure, contained in Appendix A of 10 CFR Part 
40, conform to standards promulgated by EPA (40 CFR Part 192) and are 
similar to EPA standards for the remediation of Title I sites. After 
license termination, the site is governed by another general license, 
established in NRC regulations (10 CFR Sec. 40.28) which imposes 
conditions for custody and long-term care of uranium or thorium 
byproduct materials disposal sites. A State can become the perpetual 
custodian. However if a State chooses not to do so, DOE must assume 
custody. To date, no State has become a perpetual custodian.
               regulatory improvements implemented by nrc
    With the promulgation of Appendix A and the associated development 
of more than a dozen Regulatory Guides related to uranium recovery site 
location, design, operation, inspection, and licensing, the NRC has a 
well-established regulatory framework for ensuring that uranium 
recovery facilities are appropriately licensed, operated, 
decommissioned and monitored to protect public health and safety. 
Improvements to the program include below grade disposal of mill 
tailings, liners for tailings impoundments and groundwater monitoring 
to prevent groundwater contamination, siting and design features of 
tailings impoundments which minimize disturbance by natural forces, 
design features of impoundments to minimize release of radon, 
inspection and oversight of both active and inactive mill sites, 
stringent financial surety requirements to ensure adequate funds are 
available for decommissioning, comprehensive reclamation and 
decommissioning requirements to ensure adequate cleanup of formerly 
operating mills, and long-term monitoring and oversight of 
decommissioned facilities.
                     new uranium recovery licensing
    Consistent with the intent of UMTRCA, the NRC believes that the 
Agency's comprehensive regulatory framework is sufficient to ensure the 
continued safe operation of active facilities and those in 
decommissioning, as well as any new facilities that operate in the 
future. New applicants are required to address in their application the 
handling and cleanup of solid and liquid wastes generated as a result 
of proposed operations. Prior to the commencement of operations, 
applicants must also provide financial surety arrangements to carry out 
the decontamination and decommissioning of the mill and site and for 
the reclamation of any tailings or waste disposal areas.
    To date, the NRC has received three new applications for ISL 
facilities in Wyoming. The Agency is anticipating fifteen more 
applications for new uranium recovery facilities, as well as a number 
of restarts and expansions of existing facilities in the next few years 
due to a resurgence in the industry. Existing facilities and new 
potential sites are located in the States of Wyoming, New Mexico, 
Nebraska, South Dakota, and Arizona, and in the Agreement States of 
Texas, Colorado, and Utah. The NRC plans to work closely with the 
stakeholders, including Indian Tribes, to ensure that any concerns 
associated with licensing of future proposed uranium recovery 
facilities are appropriately addressed. The formal license application 
review process should be completed within a period of 24 months, 
depending on resources. This process includes the NRC conducting a 
comprehensive safety and environmental review on any new application 
for a uranium recovery site. Uranium recovery facility license 
application review schedules are generally driven by the environmental 
review, which involves the preparation of an environmental impact 
statement (EIS), as specified in 10 CFR Part 51.20(b)(8), or a complex 
Environmental Assessment (EA) for in-situ recovery facilities that may 
expand upon a Generic EIS that NRC staff is currently developing. If an 
application is accepted for full review, a notice of opportunity for an 
adjudicatory hearing would be published in the Federal Register. 
Adjudicatory proceedings may begin at any point in the license review 
process and are subject to decisions of the Atomic Safety and Licensing 
Board. Hearings may also occur concurrently or after the technical and 
environmental review. If the NRC issues a license for a new uranium 
recovery facility, NRC's continued oversight of these facilitates is 
implemented through licensing reviews and inspections.
              uranium recovery facilities on federal lands
    Many of the uranium recovery facilities are partly on Federal lands 
administered by the Bureau of Land Management (BLM). The NRC is 
responsible for oversight of uranium recovery facilities, both 
conventional mills and ISL, on Federal land in the same manner as 
described above for facilities located on private land. The NRC's focus 
is on the safety and potential environmental impacts of these 
facilities. The NRC staff works with the BLM in its review of new 
license applications and the BLM is often a cooperating agency in the 
development of an EIS or complex EA in complying with NEPA 
requirements. However, the NRC is not involved in any pre-application 
exploration, mining claim, and mining royalty issues. Applicants work 
outside of the NRC licensing process to obtain any other permits from 
the BLM or other agencies such as the National Park Service or Forest 
Service for mineral exploration. In addition to the NRC license, an 
applicant must also comply with other Federal and local permitting 
requirements prior to construction and operation of a uranium recovery 
facility. Analysis of potential environmental impacts from exploration 
and mining claim issues are outside the scope of the regulatory 
authority held by the NRC and NRC Agreement States.
                               conclusion
    Mr. Chairman and Members of the Committee, I hope my testimony 
provides you with an understanding of NRC's regulatory role with regard 
to uranium recovery. I would be pleased to respond to your questions.

    The Chairman. Thank you very much.
    Senator Ulibarri, thank you for being here.

 STATEMENT OF DAVID ULIBARRI, STATE SENATOR AND CIBOLA COUNTY 
                      MANAGER, GRANTS, NM

    Mr. Ulibarri. Thank you, Senator Bingaman.
    I am very pleased to have the opportunity to speak with you 
today on the reemerging uranium industry in New Mexico. I am 
here representing the Cibola County Commission where I serve as 
County Manager also the State Senator for New Mexico, Senate 
District 30, which is 43,000 in population, which includes 
portions of Valencia, Socorro, and Cibola County.
    Responsible utilization and reclamation of private, State, 
and Federal lands affected by the exploration and mining and 
extraction of minerals is a worthy goal vital to the Nation. 
New Mexico and the counties and districts of the Cibola County 
and McKinley County Commission and the city of Grants passed 
resolutions supporting renewed uranium production in the Grants 
Mineral Belt. This support is premised on the understanding 
that current standards and regulations are in place which 
ensure these operations will be conducted to protect the 
workers, the public, and the environment. We believe that 
Federal and State requirements will allow responsible, safe 
operations and reclamation of new uranium mines in New Mexico.
    We are supportive of the uranium industry for two main 
reasons. First, those operations will bring substantial capital 
investments, economic benefit, and safe jobs to our area. 
Projected uranium production will conservatively create about 
2,000 to 3,000 direct jobs and certainly that many more 
indirect jobs. We are already experiencing positive economic 
impact from recent exploration permits and development of work.
    We strongly believe that this is a sound Government policy 
to produce domestic uranium that will be required to fuel our 
Nation's growing nuclear reactors' requirement. Over-reliance 
on foreign oil has got this country in terrible straits. 
Production of domestic uranium to power domestic reactors will 
promote energy security and independence. Nuclear power, clean, 
inexpensive energy, is necessary to improve our air quality in 
this country.
    But in order to produce the reliable base energy 
requirement to power our economy, nuclear power must play the 
leading role. We have substantial uranium resources in the 
United States. These resources include those located in the 
Grants Mineral Belt. They must be extracted to provide domestic 
fuel for our reactors.
    The vast majority of our constituents support the 
resumption of safe uranium mining in the Grants area. I have 
delivered about 800 letters of support to your office.
    My constituents, including the leaders of Acoma and Laguna 
Pueblo, have serious concern about the uranium industry. They, 
along with the Navajo leaders, urge that no new mining commence 
until legacy issues from the past are addressed. Certainly the 
legacies matter should be reviewed and discussed.
    First, the mining companies did not create these legacy 
matters. Second, most importantly, the standard regulations and 
technology used today in uranium mining and millings have been 
significantly improved to ensure these problems will not re-
occur. Both the industry and the regulators have learned from 
the past experience how to extract uranium without experiencing 
the problems of the past. Congress, and particularly this 
committee, has recognized the Government's role in abetting 
legacy issues and should play a role in educating workers with 
the stakeholders to advance the uranium industry.
    With respect to the impact of the proposed revision to the 
Mining Act of 1872 on uranium mining, I have attached an 
exhibit to my written testimony, a resolution by the Cibola 
County Commission that urges Congress to avoid amending the 
existing laws in such manner to make the mining of public lands 
less competitive. This is particularly important for uranium 
mining as the cost of mining includes taxes and royalties and 
determines the economic grade of minerals that can be 
extracted. The higher the cost, the more low-grade minerals 
must be left in the ground. The 8 percent gross royalty 
included in H.R. 2262 is too high to prevent undue waste and 
otherwise economic ore.
    H.R. 2262 also would allow limitations to the time to 
explore and develop mineral properties. The exploration and 
development permit lead time for a uranium mine is very long. 
Individuals and companies that have located mining claims on 
Federal lands will be required to commit substantial time, 
skill, investment to develop the uranium deposits located on 
these lands. They must be allowed to have the time properly to 
develop these properties and interests.
    I also believe that the existing Federal and State laws are 
significant and provide sufficient standards and regulations of 
responsible mining and reclamation of uranium properties. I am 
especially confident the uranium operators will undertake the 
public and private land in New Mexico and will reclaim the 
self-sustaining ecosystem because of the State Mining Act and 
its regulators. The New Mexico Mining Act application process 
contains not only operation requirements but also closure plans 
and bonding requirements to assure the closure plans are 
complete.
    Thank you very much for the opportunity for me to present 
these views of my commission and my constituents. I am looking 
forward to working with you and to establish responsible 
uranium mining in the Grants Mineral Belt. Thank you.
    [The prepared statement of Mr. Ulibarri follows:]

 Prepared Statement of David Ulibarri, State Senator and Cibola County 
                          Manager, Grants, NM
    Chairman Bingaman, Senator Domenici, and Members of the Committee. 
My name is David Ulibarri. I am the County Manager of Cibola County, 
New Mexico and I am also the State Senator representing District 30 of 
New Mexico. My district includes portions of Cibola, Socorro and 
Valencia Counties. I am pleased to testify today on behalf of the 
Cibola County Commission and the constituents I represent in my Senate 
district.
                    uranium and the 1872 mining act
    The Cibola County Commission passed Resolution 07-21, Support of 
the Federal Mining Law of 1872 on July 23, 2007.\1\ Cibola County, as 
is true of much of New Mexico, is comprised of a great deal of federal 
land. The City of Grants sits in the shadow of Mt. Taylor, much of 
which consists of the Cibola National Forest.
---------------------------------------------------------------------------
    \1\ See Resolution 07-21 attached as Exhibit 1. *Note: Resolutions 
have been retained in committee files.
---------------------------------------------------------------------------
    The Cibola County resolution urges Congress not to amend the 
existing federal Mining Law in a manner to make mining on public lands 
less competitive. Substantial federal royalties, like the 8% gross 
royalty suggested in HR 2262, would have the affect of greatly 
diminishing our nation's uranium resource base. Millions of pounds of 
lower grade uranium, economic at today's market prices, would be 
rendered uneconomic and unmineable with the imposition of the proposed 
8% gross royalty. If a federal royalty on hard rock minerals is 
necessary, it should be at a level mindful of existing royalties, taxes 
and costs that already encumber these operations. Given the lengthy 
lead time for exploration, development and permitting a uranium mine, 
miners on public lands must also have security of tenure not allowed in 
HR 2262. The Cibola County Commission firmly believes that tenure of 
ownership is vital for these operations. We believe that existing state 
and federal environmental laws and standards are sufficient to protect 
the public and environment. We would urge this Committee to come up 
with reasonable changes to the Mining Act that will allow the United 
States to remain competitive in the field of mineral production. We 
believe that the nation should not continue its reliance on unreliable 
foreign sources of energy and other strategic minerals, particularly 
when we have tremendous domestic resources, such as the 600 million 
pounds of known uranium resources in the Grants Mineral Belt.
    Cibola County is the location of bountiful natural uranium 
resources. The Cibola County Commission and the Grants City Commission 
have passed resolutions supporting the reemerging uranium production 
industry. Neighboring McKinley County Commissioners have likewise 
passed a pro-uranium mining resolution\2\. The gist of these 
resolutions is that so long as future uranium production can be carried 
out in such a manner as to protect the workers, the public and the 
environment, we welcome this industry's return to our community. Grants 
once termed itself the Uranium Capital of the World. We would be proud 
to reclaim this title.
---------------------------------------------------------------------------
    \2\ See Cibola County, McKinley County and City of Grants, New 
Mexico Resolutions attached as Exhibit 2.
---------------------------------------------------------------------------
    The New Mexico Legislature enacted the New Mexico Mining Act in 
1993.\3\ The purpose of this Act is to promote responsible utilization 
and reclamation of lands affected by the exploration, mining and 
extraction of minerals vital to the welfare of New Mexico. The Act's 
purpose section establishes the high standards to which the Cibola 
County Commission and I expect new uranium operations to adhere. The 
Act defined ``existing mining operations'' as those extraction 
operations that produced minerals beginning in the 1970's. This 
definition requires reclamation of the mining operations that were 
conducted after the conclusion of the Atomic Energy Commission's 
uranium procurement program for national defense purposes which ended 
in 1969.
---------------------------------------------------------------------------
    \3\ See New Mexico Mining Act, NMSA 1978, Sec. Sec.  69-36-1 to 69-
36-20.
---------------------------------------------------------------------------
    New conventional uranium mines in New Mexico are subject to the New 
Mexico Mining Act which was enacted in 1993. These operations will be 
subject to a stringent application process that requires at a minimum a 
one year baseline data characterization of the site. The application 
will also include a site closure plan and financial assurance deemed 
adequate by the state to assure that reclamation after mining will be 
completed.
    A new mining operation is required to meet without perpetual care 
all applicable environmental requirements imposed by the New Mexico 
Mining Act and regulations.\4\ The State Mining Act and its regulations 
provide that mine sites be reclaimed to a self-sustaining ecosystem and 
provides for hearings to assure public participation. The New Mexico 
Mining Act also applies to operations on public lands. The New Mexico 
Water Quality Control Commission has recently adopted groundwater table 
standards for uranium that are the same as the federal drinking water 
standard. Groundwater from underground mines will have to meet existing 
groundwater standards or background standards for new mines to 
operate.\5\ Given the strength of the New Mexico Mining Act and Water 
Quality Standards, the Cibola County Commission and I are comfortable 
that we can support new uranium operations with the knowledge that such 
operations will be carried out safely and with environmental impacts 
responsibly addressed. New Mexico policymakers have established 
sufficient environmental controls, and the new operators should be 
allowed to mine if they can demonstrate their ability to meet these 
requirements.
---------------------------------------------------------------------------
    \4\ NMSA 1978, Sec.  69-13-12.
    \5\ NMAC 20.6.2.3103.
---------------------------------------------------------------------------
    The same is true for federal lands. Sufficient environmental rules 
exist to assure that responsible utilization and reclamation of lands 
affected by the much needed production of minerals will take place. In 
addition to state regulation, any mine that will be located on federal 
land, and therefore subject to the Mining Act of 1872 must submit a 
Plan of Operations to the federal land management agency responsible 
for the federal land. The agency is then responsible to ensure the 
approval of this plan is in compliance with the National Environment 
Policy Act before granting approval. As such, an extensive 
Environmental Impact Assessment must be prepared by the agency, a 
process that provides significant opportunity for public input. Despite 
representations that the industry is largely unregulated, nothing could 
be further from the truth. There are existing environmental 
regulations, both federal and state, that make certain that the 
industry will operate in an environmentally protective manner.
    The economic impact of the renewed uranium industry in New Mexico 
will be substantial. In a review of the industry in 1982, University of 
New Mexico experts provided a vivid snapshot of the industry's impact 
on the Cibola and McKinley County economic base. In 1979 the following 
numbers were computed by this study:
  
Uranium Employment                                                 7,750
Uranium Payroll                                             $165,034,109
Direct Uranium Income and Gross Receipts Taxes                $7,426,500
Indirect Employment                                                9,703
Indirect Payroll                                            $206,622,891
Indirect Income and Gross Receipts Taxes                      $9,298,100
Total Employment                                                  17,453
Total Payroll                                               $371,657,000
Total Taxes (Income and Gross Receipts Taxes)               $16,724,0006
Total Severance, Resource Excise and                         $16,356,567
 Conservation Taxes
    Current plans call for at least 10,000 tons per day milling 
capacity which would conservatively result in over 14 million pounds of 
annual uranium production in New Mexico. This production will 
conservatively require between 2,000-3,000 direct employees.
    Interposing these numbers at today's dollars establish a 
significant economic benefit from this industry. We are already 
experiencing positive economic impacts from the uranium industry's 
reawakening. Drilling companies, new office space, truck dealers and 
retail establishments have profited from recent exploration and 
development activities in the area. The mining companies are receiving 
inquiries from former residents asking when the mines will start 
production. While many of the former miners are too old to go back to 
mining, they indicate they would like to move back with adult children 
that would like the opportunity to become well-paid miners. As 
suggested by the County and City resolutions attached, the capital 
investment and employment that will be created in Cibola and McKinley 
Counties will provide considerable economic growth which these counties 
desperately need.
    In addition to the positive economic impact renewed uranium 
production will bring to the Grants Mineral Belt, we also believe the 
growth of nuclear power is essential to provide the clean, cheap 
electricity that makes our country grow. As this Committee is very 
aware, nuclear powered energy must become a primary generator of 
baseload electricity to relieve pressure on other energy sources and 
improve atmospheric conditions.
    As a State Senator, I represent members of the Acoma and Laguna 
Pueblos, whose leadership have questioned the benefits of the renewal 
of uranium production. They point toward the so-called legacy issues 
from earlier uranium mining, much of which was carried out under the 
direction of the federal government for national defense purposes. 
While I respect their concerns, because of new federal and state 
standards and better appreciation for the impacts of uranium 
production, I would submit that new mining will not result in creating 
the impacts of the past. As noted, we have a strict Mining Act in place 
for conventional mining. The Nuclear Regulatory Commission has 
established much more stringent standards for in situ recovery and 
conventional milling of uranium ore. Federal exposure standards have 
been greatly strengthened as understanding of radon effects has been 
increased. Uranium mill tailings disposal now have modern regulations 
that require zero discharge to prevent harm to the groundwater. 
Conventional mining and milling safety practices, equipment and 
protective clothing are all greatly enhanced as a result of over a half 
century of research and practice.
    Comparing today's uranium mining and milling practices to those of 
the past is truly comparing apples to oranges. I would urge this 
Committee to help in educating the public to allay concerns that the 
uranium industry would create negative impacts to their health and 
safety. I would also urge the Acoma and Laguna leadership and their 
Navajo counterparts to become part of the discussion on how we can 
achieve the benefits of this industry in a safe and environmentally 
protective manner. We can all truly have a win-win situation in what is 
now a very economically disadvantaged region of New Mexico.
                            abandoned mines
    I would also like to take the opportunity to address the issue of 
abandoned uranium mines in my written testimony. The legacy issue of 
abandoned mines is important in New Mexico. Some leaders feel that no 
new mines should be allowed until all of the abandoned sites have been 
reclaimed. As noted earlier, I don't agree with this position, because 
the new operators were not responsible for old sites. Further, new 
standards and regulations are in place to address closure and 
reclamation of new sites. However, the new operators in New Mexico have 
expressed a willingness to assist in addressing abandoned mines with a 
reasonable surtax on new production.
    Last year I brought the new miners and the New Mexico Mining and 
Minerals Division (``MMD'') together to begin a study of the true 
impacts of abandoned mines. The MMD identified approximately 400 
uranium mine sites of which 259 were producing mines in New Mexico. Of 
these, approximately 114 mines had undergone some kind of completed 
reclamation. Reclamation status at the remaining 145 mines is unknown 
and in need of further study. MMD chose 23 of the latter sites located 
on state and federal lands for further review by a contractor to 
characterize these sites. The MMD created the scope of work for the 
contractor and the New Mexico uranium industry is paying for the MMD's 
study. This study should be completed in the next few months and will 
begin to give a true indication of the scope and priorities of the 
abandoned uranium mine issue in our state.
    Along with State Representative Lundstrom from the Gallup area, I 
also introduced legislation in the recent New Mexico legislative 
session to place a surtax on new uranium production to assist in paying 
for abandoned mine reclamation in the state. This measure passed the 
legislature but was vetoed by Governor Richardson. Because the nature 
and extent of abandoned uranium mines in New Mexico is not fully 
understood, the legislation may have been premature. However, I believe 
those opposing the measure did so because they felt this would somehow 
give a positive stamp of approval to the new uranium industry. I don't 
believe this is the case, given the rigorous New Mexico and federal 
permit application processes new operations must achieve. While 
contribution of monies to assist in abandoned mine reclamation would be 
welcomed, the new uranium producers must still characterize their sites 
and comply with all application requirements, including closure plans 
and bonding.
    I would submit that the vast majority of abandoned mines and 
workings in the uranium field will be found to be those mined before 
the 1970's to meet the federal government's charge to produce weapons 
material. Thus, I believe the federal government should also assist in 
the reclamation of these sites. While the new uranium industry is 
willing to contribute, putting all the cost of reclamation on their 
shoulders is unfair and would make mining in New Mexico non-8 
competitive with neighboring states that don't have this issue. I 
believe this Committee is currently looking at coal mine reclamation 
funds that could be used for non-coal abandoned mine reclamation. State 
officials have advised me that the Department of Interior is holding 
about $20 million of these funds that could be used to address New 
Mexico's legacy issue. I would urge this Committee to work to free 
these funds for non-coal abandoned mines in New Mexico. As is generally 
the case, I believe that interested parties should work together to 
determine the scope of the abandoned mines issue and come up with 
reasonable funding measures to solve this problem.
                               conclusion
    Cibola County and the vast majority of my constituents believe that 
a renewed uranium production industry can bring tremendous employment 
and economic growth to our area. Even with the limited exploration and 
development activities already in place, we are seeing new employment 
and contribution to our tax base. We also believe that this industry 
can provide the fuel badly needed by the domestic nuclear power 
industry to grow and meet our nation's electric energy needs in an 
economic and clean energy manner required to combat global warming.
    Congress should demand that uranium be produced in this country for 
energy security and independence. We cannot allow dependence on foreign 
uranium like dependence on foreign oil, particularly when we have 
substantial uranium resources and the ability to provide a significant 
percentage of domestic nuclear utilities' needs with uranium production 
in the United States. A forward thinking energy policy in the United 
States should recreate the extensive uranium production capacity our 
country once enjoyed. The use of public lands to assist in making 
America less dependent on foreign uranium should be encouraged, not 
hamstrung, by ill-conceived changes to the Mining Act.
    The members of the Cibola County Commission and I echo the 
sentiment of the vast majority of our constituents. As long as new 
uranium production operations can be accomplished in a manner to 
protect the safety and welfare of the workers, public and environment, 
such operations should be encouraged. We believe standards, regulations 
and technologies are in place to allow responsible utilization and 
reclamation of lands in the Grants Uranium Belt. We hope that this 
committee will understand the benefits uranium mining can bring to our 
community and our country when modifying the 1872 Mining Act. Any 
modifications must be reasonable allow the domestic mining industry to 
maintain a competitive edge. It is important that responsible uranium 
operations begin producing this valuable mineral so essential to our 
nation's energy security and independence and to combat global 
warming.Thank you, Mr. Chairman, for inviting me to testify.

    The Chairman. Thank you very much for your excellent 
testimony.
    Mr. Newton, go right ahead.

  STATEMENT OF FLETCHER T. NEWTON, EXECUTIVE VICE PRESIDENT, 
  CORPORATE & STRATEGIC AFFAIRS, URANIUM ONE, INC., DENVER, CO

    Mr. Newton. Thank you, Mr. Chairman. My name is Fletcher 
Newton. I am the Executive Vice President for Strategic Affairs 
and Corporate Development at Uranium One. Uranium One is a 
publicly traded company. More than 90 percent of our 
shareholders are American investors.
    We currently have properties and claims throughout the 
western United States, in Colorado, Wyoming, Texas, and Nevada, 
Utah, New Mexico. We currently have production coming on line 
in the United States at the end of this year in Texas, and we 
will have production coming on line in Wyoming at the end of 
2010. Both of those operations are in-situ leach/in-situ 
recovery solution mining operations. Both operate under the 
auspices of the NRC, the EPA, as well as State authorities, and 
both of those are completely and fully bonded. Those are cash 
bonds, real money in the bank that is there regardless of what 
happens to our company.
    In addition to those operations, we have existing mines now 
in Kazakhstan where we produce a significant amount of uranium.
    We are here today, obviously, to talk about abandoned mines 
in the context of uranium. Obviously, you cannot talk about 
uranium if you do not talk about nuclear power, and you 
certainly cannot talk about nuclear power if you do not talk 
about uranium.
    The United States has the world's largest fleet of 
reactors. As I am sure you know, Mr. Chairman, it is 104. They 
produce 20 percent of our country's electricity. Those reactors 
operate at the highest average capacity factor of any country 
in the world, over 90 percent. They produce more electricity 
now than they ever have before, and as a result of that, they 
also consume more uranium than they ever have before. We 
consume now 56 million pounds of uranium every year in the 
United States. Last year in the United States, we produced 4.5 
million pounds. That difference, more than 51 million pounds, 
is imported from places like Kazakhstan, Russia, Canada, 
Uzbekistan, Ukraine, Niger, countries that produce uranium 
around the world.
    Certainly this is something today that is of great concern 
to us because we look at the United States as a country that 
has historically produced tremendous amounts of uranium. It was 
not that long ago, in fact, that the United States was the 
world's leading producer of uranium. In 1983, we produced over 
40 million pounds. You have heard testimony today about the 
significant reserves of uranium in the United States. By 
conservative estimates, there are over 900 million pounds of 
commercially minable deposits of uranium in the United States. 
Much of that uranium is in your home State, Mr. Chairman, in 
New Mexico, which up until just a couple of years ago had been 
the leading producer of uranium. That position was taken over 
just a couple of years ago by the State of Wyoming.
    This is one of the reasons why the uranium industry is so 
interested in reasonable reform to the Mining Law of 1872. We 
recognize that there is tremendous concern over the legacy 
issues associated with uranium mining, but we also recognize 
that we need to look forward and find a way to encourage 
uranium mining while, at the same time, providing reasonable 
reforms that address the issues of the past.
    It is not an exaggeration to say that the uranium mining 
industry is probably one of the most heavily regulated 
industries in the country. We are under the auspices, as I said 
earlier, of the EPA, of the NRC, of the BLM, of the Forest 
Service, a host of State agencies. There is a long list of 
Federal laws that cover uranium mining that includes the Safe 
Drinking Water Act, UMTRCA, the Clean Air Act, the Clean Water 
Act, the Resource Conservation and Recovery Act. it is a long, 
long list. It is not an exaggeration to say, Mr. Chairman, that 
to permit a new uranium mine in the United States can easily 
take more than a decade.
    So this is the situation with which we are dealing and this 
is why we are concerned about possible reforms to the Mining 
Law of 1872. We are concerned that if we act in a hasty manner 
without due consideration for the realities of uranium mining, 
we run the risk of aggravating our balance of payment 
situation. We run the risk of putting ourselves at the risk of 
extreme disruptions in the price, and we run the risk of 
putting our future uranium supply in the hands of foreign 
governments where we certainly have no control over what 
happens in those countries.
    We all understand that nuclear energy is a very important 
part of the energy mix going forward. Concerns over global 
warming have certainly heightened that.
    We in the uranium business recognize that there is a 
significant legacy with which to deal. We would like to help 
address that, but we also want to make sure that we do not 
close the door to encourage new uranium mining in the future. 
All I can say, Mr. Chairman, is that we certainly support 
reasonable reform to the Mining Law of 1872, but we want to 
make sure that we do so with due regard for the realities of 
uranium mining, taking into consideration the interests of the 
communities where we operate and the legacy issues with which 
we have to deal.
    I would be happy to answer any questions.
    [The prepared statement of Mr. Newton follows:]

  prepared statement of fletcher t. newton, executive vice president, 
      corporate & strategic affairs, uranium one, inc., denver, co
    Good morning, Mr. Chairman and members of the Committee.My name is 
Fletcher Newton, and I am the Executive Vice President of Corporate and 
Strategic Affairs for Uranium One, Inc. Uranium One is a publicly 
traded company 90% of whose shareholders are American investors. We are 
developing new uranium mines in the United States, Australia, and South 
Africa and own interests in existing mines in Kazakhstan. Our U.S. 
production will be primarily in Texas and Wyoming and exclusively use 
solution mining to recover uranium. We expect to see our first 
production from Texas at the end of this year, with production from 
Wyoming coming on line in 2010. 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 production payment 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 production payment; 
        and
   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.
       uranium mining is appropriately governed by the mining law
    Extraction of uranium on federal lands is conducted similarly to 
extraction for other hardrock minerals governed by the Mining Law. As 
with other types of hardrock mining there are several methods for 
extraction of uranium, such as underground uranium mining, open pit 
mining and in situ recovery. The type of mining undertaken depends on a 
number of factors including the nature of the deposit and grade of ore. 
Underground uranium mining is in principle no different than any other 
hard rock mining and other ores are often mined in association (e.g., 
copper, gold, silver). In open pit mining, overburden is removed by 
drilling and blasting to expose the ore body which is mined by blasting 
and excavation via loaders and dump trucks. In situ recovery is 
performed by pumping liquids down through injection wells placed on one 
side of the deposit of uranium, through the deposit, and up through 
recovery wells on the opposing side of the deposit.
 current environmental scheme governing uranium mining on federal lands
    The potential impacts from uranium mining on federal lands are 
substantially similar to those from other hardrock mining and the 
existing regulatory scheme adequately protects federal lands from all 
types of hardrock mining. Mining on public lands, including uranium 
mining, is a pervasively regulated enterprise with a vast range of 
federal, state, and local environmental laws and regulations governing 
mineral exploration, development, operation, closure and reclamation. 
Under current law, companies that engage in hardrock mining and related 
activities on the public lands are subject to a comprehensive framework 
of federal and State environmental, ecological, and reclamation laws 
and regulations to ensure that operations are fully protective of 
public health and safety, the environment, and wildlife including:

   Specific mining environmental standards administered by the 
        Bureau of Land Management (BLM) and the Forest Service, the 
        federal surface land management agencies, and supplemented by 
        state laws;
   All major applicable federal environmental laws such as the 
        National Environmental Policy Act (NEPA), the Clean Air Act 
        (CAA), the Clean Water Act (CWA), the Solid Waste Disposal Act 
        (SWDA), the Resource Conservation and Recovery Act (RCRA), 
        Superfund, the Safe Drinking Water Act (SDWA), the Toxic 
        Substances Control Act (TSCA) and many others;
   Wildlife protection statutes administered by the Department 
        of the Interior and/or States such as the Endangered Species 
        Act.
   Comprehensive Western State laws and regulations dealing 
        with the protection of groundwater quality and quantity, both 
        for operations and closure, the management and disposal of 
        solid waste, and the reclamation of mining sites, which 
        typically focus on the establishment of post-mining habitat for 
        wildlife.

    As seen by the number of approvals and permits the typical mining 
operation on federal lands must obtain before commencing construction, 
mining is heavily and thoroughly regulated. Depending on a project's 
complexity, the environmental assessment and permitting process can 
take upwards of a decade to complete. Typical environmental permits and 
approvals include:

   A plan of operations from the BLM or Forest Service, 
        requiring a reclamation plan, closure plan, and cultural 
        resources plan. The plan of operations is scrutinized under 
        NEPA, usually requiring the preparation of an environmental 
        impact statement (EIS), which evaluates potential environmental 
        impacts of the mining operation, assesses alternatives and 
        requires the identification of mitigation measures to reduce 
        potentially significant environmental impacts.
   Air quality permits from EPA or state agencies with 
        delegated programs under the CAA.
   Water quality permits from EPA or state agencies with 
        delegated programs under the CWA. 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, both during operations and 
        closure to protect the reasonably foreseeable beneficial uses 
        of groundwater resources.
   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.

    These laws and regulations that govern mining on federal lands are 
``cradle to grave,'' covering virtually every aspect of mining from 
exploration through mine reclamation and closure. The National Academy 
of Sciences (NAS) reviewed the existing federal and state regulatory 
framework for hardrock mining and concluded that the existing laws were 
``generally effective'' in ensuring environmental protection. Hardrock 
Mining on Federal Lands, National Academy of Sciences, National Academy 
Press, 1999, p. 89.
    Since the NAS study was published, the federal land management 
agencies have acted to make this effective regulatory program even 
stronger. For example, BLM and the Forest Service have significantly 
strengthened their financial guarantee requirements. BLM's regulations 
now require financial guarantees for all mining and exploration 
disturbances, no matter how small, before activities can proceed. Both 
agencies require the financial guarantee to cover the full cost to 
reclaim the operation, as if the agencies were to contract with a third 
party to conduct reclamation. In addition, the agencies can now require 
the establishment of a trust fund or other funding mechanism to ensure 
the continuation of long-term treatment to achieve water quality 
standards and for other long-term, post-mining reclamation and 
maintenance requirements. State-specific regulations require the 
establishment of financial assurance using a variety of specified 
forms.
    Furthermore, the agencies require periodic review of reclamation 
funding. BLM has implemented a tracking system under which BLM state 
directors are required to certify each fiscal year that the reclamation 
cost estimates for proposed and operating mines have been reviewed and 
are sufficient to cover the cost of reclamation. Similarly, the Forest 
Service requires annual review of financial assurances. The 
improvements in financial assurance requirements, combined with 
sustained environmental compliance, will ensure that the public will 
not ultimately become responsible for reclamation of mine sites on 
federal lands.
    The existing comprehensive framework of federal and state 
environmental and cultural resources laws already regulates all aspects 
of mining from exploration through mine reclamation and closure. 
Additional federal regulation is unnecessary, duplicative and 
unreasonable.
         existing authorities adequately protect special places
    Access to federal lands for mineral exploration and development is 
critical to maintain a strong domestic mining industry. 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 and will continue to provide a large 
share of the future metals and hardrock minerals produced in this 
country.
    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 domestic mineral and economic development.
    In addition, the federal land management agencies have land use 
planning processes to identify natural or cultural resources or 
environmental and social sensitivities that require special 
consideration. These planning processes are used to identify areas that 
need to be withdrawn as well as any terms, conditions, or other special 
considerations needed to protect other resource values while conducting 
activities under the operation of the mining laws. Other mechanisms 
available to federal land management agencies for protecting valuable 
resources and sensitive areas include use of advisory guidelines to 
identify categories of resources or lands that deserve special 
consideration and the adoption of sitespecific mitigation measures in a 
plan of operations to protect cultural values, riparian habitat, 
springs, seeps, and ephemeral streams that are not otherwise protected 
by specific laws.
                         right to deny approval
    With the existing tools available to protect special resources and 
environmentally sensitive areas, there is no need to provide additional 
federal authority to address where mining claims should be denied on 
federal lands due to environmental or other concerns. In particular, it 
is not necessary to give the Secretary of Interior the right to stop a 
mining project when all environmental and other legal requirements are 
met. Such authority is simply not needed to protect against unnecessary 
or undue degradation as the federal land management agencies have other 
statutory and regulatory means of preventing irreparable harm to 
significant scientific, cultural, or environmental resource values. The 
Department of the Interior exercises case-by-case discretion to protect 
the environment from any unnecessary or undue degradation through the 
process of approving or rejecting individual mining plans of 
operations.
    Not only is such federal authority unnecessary to protect the 
environment or special resources, providing such authority creates 
significant uncertainty regarding ultimate mining project approval. 
Mining projects will not be able to attract investments if there is no 
certainty that the project can obtain approval even when the operator 
complies with all relevant laws and regulations. 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 and have serious consequences for our economic 
and national security. If the investments critical for bringing a mine 
to fruition tend to migrate toward projects planned in other countries, 
the United States will become even more reliant on foreign sources of 
minerals.
            growing reliance on foreign sources of minerals
    Despite reserves of 78 important mined minerals, 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 country's strategic and critical metals 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. This increased import dependency is not in our national 
interest particularly for commodities critical to pending strategic 
programs such as reducing greenhouse gas emissions or undertaking 
energy efficiency efforts. 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.
    Uranium is an excellent example of a mineral that the US relies on 
foreign sources. The United States currently consumes about 56 million 
pounds of uranium each year, yet we only produce 4 and a half million 
pounds. We have the worlds largest fleet of reactors (now 104), which 
operate at the world's highest average capacity factor and produce 20% 
of our country's electricity. In fact, America's nuclear reactors now 
produce more electricity than ever before. And we have one of the 
world's largest resource bases of uranium of any country in the world.
    Despite the size of our nuclear fleet, however, we produce less 
than 10% of our own uranium and import over 90% of what we need to 
operate our reactors. The price for uranium has recently climbed to an 
historic high, and yet new U.S. production is still lagging, at least 
in part because of uncertainty over the regulatory environment for new 
production here.
                         processing of uranium
    Uranium processing, as opposed to uranium mining, is not conducted 
under the auspices of the Mining Law. Instead, a comprehensive federal 
program for processing has evolved through the Atomic Energy Act of 
1946 (1946 AEA), the Atomic Energy Act of 1954 (1954 AEA) and the 
Uranium Mill Tailings Radiation Control Act of 1978 and its amendments 
(UMTRCA). After World War II, in recognition of the significant 
military importance of uranium, and in recognition of the strategic 
value of having a secure supply of uranium, Congress passed the 1946 
AEA.\1\ This act created the Atomic Energy Commission (AEC), the 
forerunner of Nuclear Regulatory Commission (NRC), and it provided the 
AEC with substantial powers with respect to uranium.
---------------------------------------------------------------------------
    \1\ Atomic Energy Act of 1946, Pub. L. No. 79-585, 60 Stat. 755 
(1946).
---------------------------------------------------------------------------
    At its inception, the AEC recognized that the United States atomic 
weapons program was almost completely dependent on uranium ores 
originating in the Belgian Congo. The AEC set out to correct this 
strategic weakness by developing a domestic uranium producing industry. 
To accomplish this task, the AEC went to work implementing a policy 
that would encourage private companies and individuals to explore for 
uranium and develop any reserves located in the United States. In these 
efforts, the AEC was fully aware that its most significant obstacle was 
the high cost associated with the domestic extraction and production of 
yellowcake.\2\ Added to the uncertainties of mineral exploration, these 
costs were a substantial barrier to domestic mining--particularly in 
light of the fact that there existed no private market for either 
uranium ore or processed uranium. Therefore, to provide an incentive to 
potential prospectors, the AEC developed a program that guaranteed 
prices for ore production, provided bonuses for the initial production 
from new mines, and reimbursed producers for transportation costs.\3\
---------------------------------------------------------------------------
    \2\ As an example, at that time, the cost of Belgian Congo 
yellowcake delivered in the United States was $3.40 per lb., while 
yellowcake from the Colorado Plateau would cost at least $20 per lb. to 
produce. Gray supra note 1 at 42.
    \3\ Gray supra note 1 at 42-43.
---------------------------------------------------------------------------
    It was not enough, however, just to locate uranium reserves and 
extract the ore: as the AEC recognized, it would also be important to 
encourage the development of a domestic uranium milling industry. 
Accordingly, the AEC set out to encourage the private development of 
milling facilities, by creating an incentive system in the form of 
agreements by the AEC to purchase processed uranium on terms that 
allowed private companies to recover the cost of constructing and 
operating a mill during the life of the contract.\4\ Under this 
program, uranium mills were privately constructed and operated pursuant 
to contracts negotiated with the AEC, under which the AEC committed to 
purchases of uranium concentrate that would effectively return to the 
mill operator the costs of mill construction and operation plus a 
reasonable return on investment.
---------------------------------------------------------------------------
    \4\ Final Generic Environmental Impact Statement on Uranium 
Milling, NUREG-0706 vol. I at 2-1 (September 1980).
---------------------------------------------------------------------------
    Concerns regarding the potential health and environmental hazards 
of mill tailings awakened in the late 1960s, however, as information 
came to light regarding the dispersal of uranium mill tailings in the 
area of Grand Junction, Colorado. Congress reacted to this information 
by taking a second look at the scope of AEC's legal authority to 
regulate uranium mill tailings.
    In the early and mid-1970s the AEC (and later NRC)\5\ relied upon 
the combined authorities contained in the AEA and NEPA to impose 
restrictions on the management and disposition of uranium mill tailings 
through the issuance of ``Regulatory Guides'' and ``Branch Positions.'' 
NRC and Congress soon recognized the inadequacies of the authority 
claimed by the Commission to regulate mill tailings through NEPA and 
the AEA; and in response, UMTRCA was passed to grant the Commission 
explicit authority to directly regulate uranium mill tailings and 
related wastes.
---------------------------------------------------------------------------
    \5\ In 1974, the AEC was terminated and divided into a promotional 
and a regulatory agency. The Energy Research and Development 
Administration, the precursor to the current Department of Energy (DOE) 
was the promotional agency. The new regulatory agency created was the 
NRC.
---------------------------------------------------------------------------
    UMTRCA created a two-part regulatory system to deal, 
comprehensively, with uranium milling operations and, in particular, 
with the tailings and other wastes generated from those operations. In 
Title I of UMTRCA, Congress established a program to identify and 
remediate so-called ``inactive'' sites; that is, sites at which uranium 
milling operations had occurred in the past or that contained the 
tailings or other wastes produced during such milling operations and 
that were not covered by an existing license. In Title II of the Act, 
Congress created a program for the regulation of tailings and wastes 
generated at ``active'' milling sites; that is, sites with active 
licenses under the AEA. To implement the provisions of the Act, 
Congress established a tripartite jurisdictional scheme involving EPA, 
NRC and the Department of Energy (DOE), each of which have a defined 
role in the comprehensive national program to regulate uranium mill 
tailings and related wastes.
    Under the program set out in Title I of UMTRCA, DOE is authorized 
to enter into ``cooperative agreements'' with states containing 
inactive sites, for the purpose of remediating those sites. Remedial 
actions undertaken by DOE under Title I are required to have the 
Commission's concurrence and to conform with standards developed by EPA 
for the protection of public health, safety and the environment from 
the potential radiological and non-radiological hazards associated with 
tailings and other uranium milling wastes.\6\ Following remediation of 
these inactive sites, title to the tailings and wastes from the sites, 
and to the land used for their disposal, is to be transferred to DOE 
with concurrence of the Commission, and the sites are to be maintained 
by DOE in perpetuity, pursuant to licenses issued by the Commission.\7\ 
In addition, the Commission is authorized under Title I to require that 
DOE, as the custodian of remediated inactive sites, undertake such 
monitoring, maintenance and emergency measures as the Commission may 
deem necessary to protect public health and safety. The Commission can 
also require DOE to take other actions that the Commission deems 
necessary to comply with EPA's generally applicable standards for 
protection against potential radiological and nonradiological hazards 
associated with uranium mill tailings and related wastes.\8\
---------------------------------------------------------------------------
    \6\ 42 U.S.C. Sec. 7918 (1994).
    \7\ 42 U.S.C. Sec. 7914 (1994).
    \8\ In many respects, the role assigned to DOE under Title I of 
UMTRCA is akin to that of a super ``potentially responsible party'' or 
``PRP'' under the Comprehensive Environmental Response, Compensation 
and Liability Act (CERCLA), 42 U.S.C. Sec. Sec.  9601, et seq., since 
DOE is responsible for remediating Title I sites and maintaining them 
in perpetuity, and the agency is responsible for most of the costs 
associated with those efforts. Indeed, because of the unique role per-
formed by DOE at Title I sites, Congress deemed it appropriate to 
specifically exclude those sites from the reach of CERCLA. 42 U.S.C. 
Sec.  9601(22).
---------------------------------------------------------------------------
    The complement to the Title I program is found in Title II of 
UMTRCA. In Title II Congress granted the Commission expansive 
authority, along with EPA, to regulate directly all aspects of the 
management and disposition of uranium mill tailings and related wastes 
generated at active sites.\9\ The centerpiece of this grant of direct 
authority was the creation of a new category of AEA-regulated 
materials. Specifically, by modifying the existing definition of 
``byproduct'' material under the AEA, Congress created ``11e.(2) 
byproduct material,'' which was defined to mean:
---------------------------------------------------------------------------
    \9\ Under section 274 of the AEA states can enter into agreements 
with NRC under which the states assume the authority of the Commission 
with respect to the regulation of uranium mill tailings and related 
wastes. Accordingly, reference in this White Paper regarding the 
authority of the Commission with respect to uranium mill tailings are 
intended to encompass Agreement states as well.

          the tailings or wastes produced by the extraction or 
        concentration of uranium or thorium from any ore processed 
        primarily for its source material content.\10\
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    \10\ AEA section 11e.(2)142 U.S.C. Sec.  2014e(2). Previously, 
``byproduct material'' had been defined to mean ``any radioactive 
material (except special nuclear material) yielded or made radioactive 
by exposure to radiation incident to the process of producing or 
utilizing special nuclear material.'' This definition has been retained 
in AEA section 11e.(1).

    This class of material was (and is) unique among the materials 
regulated under the AEA because it was defined not solely in terms of 
its radiologic characteristics, but instead was defined broadly enough 
to encompass ``all wastes''--both radioactive and non-radioactive--
resulting from uranium ore processing.\11\
---------------------------------------------------------------------------
    \11\ See 57 Fed. Reg. 20,525, 20,526 (1992) (``The definition of 
byproduct material in section 11e.(2) of the AEA includes all the 
wastes from the milling process, not just the radioactive components . 
. .  The designation of 11e.(2) material contrasts significantly with 
the situation for source material and other radioactive materials 
controlled under the authority of the AEA.'').
---------------------------------------------------------------------------
    In addition, the legislative history of the Act makes plain 
Congress' intent that this unique material be regulated under a single, 
coordinated regulatory regime. As Senator Domenici explained in floor 
debates on a Senate bill that was substantially similar to the bill 
eventually enacted as UMTRCA:

          A basic principle of the amendment is the creation of a 
        unified regime for mill tailings so that the various distinct 
        materials which make up a single mill tailings pile need not be 
        subject to fragmented [sic], duplicative and potentially 
        conflicting regulatory activities by different government 
        agencies.\12\
---------------------------------------------------------------------------
    \12\ 124 Cong. Rec. 29,776 (Sept. 18, 1978).
---------------------------------------------------------------------------
    UMTRCA assigned to EPA the authority to promulgate standards of 
general applicability--for both the Title I and Title II programs 
addressing both the radiological and non-radiological hazards of 
uranium mill tailings and related wastes. For the non-radiological 
hazards, these generally applicable standards are to provide protection 
equivalent to that provided by EPA's RCRA standards. At the same time, 
however, such tailings and wastes, because they are 11e.(2) byproduct 
material, are specifically exempted from regulation by EPA under RCRA, 
and permitting authority over 11e.(2) material is deliberately withheld 
from EPA. Instead, UMTRCA calls upon the Commission to implement and 
enforce through licensing the generally-applicable standards developed 
by EPA.\13\ Furthermore, Congress directed NRC to independently develop 
specific requirements and criteria applicable to licensees that (1) the 
Commission deems appropriate to protect against both the potential 
radiological and non-radiological hazards associated with 11e.(2) 
material; and (ii) that are compatible with EPA's generally-applicable 
RCRAbased standards.\14\
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    \13\ 42 U.S.C. Sec.  2022(d).
    \14\ This basic division of authority between EPA and the 
Commission for the entire nuclear fuel cycle, under which EPA 
promulgates standards of general applicability and NRC imposes specific 
requirements consistent with those EPA standards, generally is 
consistent with the division of authority established under 
Reorganization Plan No. 3 of 1970, 5 U.S.C. App. at 1551. Under that 
Plan the functions of the AEC were transferred to EPA, but only to the 
extent that such functions of the Commission consist of establishing 
generally applicable standards for the protection of the general 
environment from radioactive material.''
---------------------------------------------------------------------------
    Thus, by adding a new category to the existing AEA definition of 
``byproduct material'' Congress, in UMTRCA, created a whole new class 
of regulated materials and expanded EPA's and NRC's jurisdiction under 
the AEA into entirely new areas of regulation (namely, the direct 
regulation of non-radiological materials associated with uranium 
milling). Based on this definitional change and on the provisions of 
Sections 84 and 275 of the AEA (which were also added by UMTRCA), 
Congress incorporated protection against potential non-radiological 
hazards (consistent with that provided by EPA's RCRA standards) into 
the program for regulating uranium mill tailings and other 11e.(2) 
materials, without giving EPA any direct permitting authority over 
Title I sites or Title II licensees.
     the creation of a regulatory program for uranium mill tailings
    After UMTRCA's enactment, the Commission developed the regulatory 
program needed to implement its new statutory authority. NRC first 
issued a Draft Generic Environmental Impact Statement (DGEIS) examining 
the environmental ramifications of uranium milling activities and 
possible regulatory standards pertaining to those activities. NRC then 
published proposed regulations governing uranium milling and mill 
tailings.\15\ NRC's regulations adopted extremely conservative 
standards for the management and disposal of uranium mill tailings.
---------------------------------------------------------------------------
    \15\ 44 Fed. Reg. 50,015 (1979).
---------------------------------------------------------------------------
    In the decade of the 1980s, the various pieces that were required 
to construct a comprehensive system for regulating UR activities were 
put into place, and a mature regulatory program for uranium milling 
operations began to take shape. At the same time, however, the uranium 
recovery industry began to experience a fundamental shift away from 
conventional mining and milling.
    In 1983, three years after NRC issued its final GEIS and 
promulgated initial regulations on uranium milling, EPA promulgated its 
first set of ``generally applicable standards.''\16\ These standards 
applied only to ``inactive'' sites (i.e., sites regulated under Title I 
of UMTRCA that were no longer operated under an active license). 
Although these types of sites were not addressed in NRC's initial 
regulations, EPA's inactive site regulations opened a window on some 
important differences between NRC and EPA, particularly with respect to 
the establishment of standards for the control of radon emissions from 
tailings. Thus, for example, in its final inactive sites regulations, 
EPA concluded that a radon emission standard of 20 pCi/m2/s 
was adequately protective of human health and safety, as compared to 
the 2 pCi/m2/s standard adopted by NRC. In addition, EPA's 
regulations did not include any specific standards for radon barriers 
(since, arguably, EPA did not have any authority to impose that sort of 
design requirement on tailings facilities) although, in its rulemaking 
materials, EPA indicated that its 20 pCi/m2/s radon standard 
was premised on the use of thick barriers. By contrast, NRC's 
regulations required the use of an earthen barrier at least 10 feet 
thick.
---------------------------------------------------------------------------
    \16\ 48 Fed. Reg. 590 (January 5, 1983).
---------------------------------------------------------------------------
    EPA's inactive site regulations also established what has come to 
be known as the ``5/15'' clean-up standard for radium-226 in soil. 
Under this standard, radium concentrations in soil are to be reduced to 
levels of no more than 5 pCi/g in the first 15 cm soil horizon and no 
more than 15 pCi/g in succeeding 15 cm soil layers. In addition, EPA 
required that disposal systems be designed to provide ``reasonable 
assurance'' of achieving the Agency's disposal standard for 1,000 
years, but no less that 200 years without reliance on ``active'' 
maintenance. Finally, EPA did not, in its inactive sites regulations, 
establish any generally applicable criteria for groundwater 
contamination because, in the Agency's view at the time, the risks from 
groundwater contamination were not sufficiently significant to require 
the development of such standards. Consequently, instead of 
establishing groundwater standards of general applicability in its 
inactive sites regulations, EPA concluded that groundwater issues would 
have to be addressed by DOE on a site-by-site basis, taking into 
account various site-specific factors.\17\
---------------------------------------------------------------------------
    \17\ Id. at 599-600.
---------------------------------------------------------------------------
    Later in 1983, EPA promulgated final regulations for active sites 
(i.e., sites addressed under Title II of UMTRCA that were operated 
under active licenses).\18\ As with the inactive site standards, EPA's 
active site regulations require that radon emanation from tailings 
disposal sites be limited to 20 pCi/me/s.\19\ The 
regulations also require that the controls used for tailings disposal 
provide ``reasonable assurance'' of achieving this standard for 1,000 
years, but not less than 200 years.\20\ In addition, like the inactive 
sites regulations, EPA's active sites provisions also incorporate the 
5/15 standard for radium in soil.\21\
---------------------------------------------------------------------------
    \18\ 48 Fed. Reg. 45,926 (1983).
    \19\ Id. at 45947.
    \20\ Id.
    \21\ Id.
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    Despite these similarities, EPA's active sites regulations deviated 
from the inactive sites requirements in at least one significant way: 
by establishing generally applicable groundwater standards that were 
intended to provide a level of protection equivalent to that provided 
by EPA's regulations under RCRA.\22\ The groundwater standards in EPA's 
active site regulations, which were directed primarily at potential 
non-radiological contaminants, were divided into a primary standard and 
a secondary standard. The primary standard is a design standard, 
requiring the installation of a bottom liner under all new tailings 
impoundments and under new extensions of existing impoundments. The 
secondary standard is a performance standard, requiring that 
groundwater at the edge of a tailings pile meet background levels or, 
for certain parameters, the higher of background levels or drinking 
water standards. In addition, the new active sites regulations allowed 
for the establishment of alternate concentration limits (ACLs), on a 
site-specific basis, at the point of compliance (POC) (i.e., the area 
necessary for disposal), provided that groundwater constituent 
concentrations protection of public health, safety, and the environment 
were attained at the point of exposure (POE).
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    \22\ Although the inactive sites regulations promulgated by EPA in 
1983 did not include generally-applicable standards for groundwater 
protection (because, as indicated previously, the Agency believed at 
the time that the risks from groundwater contamination were not 
sufficiently significant to require the development of such standards), 
EPA was subsequently required by the courts to adopt groundwater 
standards for inactive sites that were comparable to those promulgated 
for active sites. See 60 Fed. Reg. 2854 (1995).
---------------------------------------------------------------------------
    Congress addressed additional concerns about the NRC regulation in 
1983 by amending the AEA to modify certain sections that had been added 
previously by UMTRCA.\23\ In particular, section 274 of the Act was 
amended to provide Agreement states with explicit authority to adopt 
``alternatives (including, where appropriate, site-specific 
alternatives) to the requirements adopted and enforced by the 
Commission'' provided that they achieve a level of protection 
``equivalent to, to the extent practicable, or more stringent than'' 
the level of protection afforded by NRC's standards.\24\ Similarly, 
section 84 of the Act was also amended to allow NRC to approve 
licensee-proposed alternatives to the requirements adopted by the 
Commission if the licensee-proposed alternatives provide a level of 
protection that is ``equivalent to, to the extent practicable, or more 
stringent than'' the level of protection afforded by the NRC 
standards.\25\
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    \23\ Pub. L. No. 97-415, 96 Stat. 2067 (1983).
    \24\ Id. codified at 42 U.S.C. Sec.  2021(o).
    \25\ 52 Fed. Reg. 43,553 (1987).
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    In addition, the 1983 amendments to the AEA clarified NRC's 
responsibilities under AEA section 84(a) by specifically requiring that 
the Commission consider environmental and economic costs and balance 
those costs against potential risks when developing standards and 
requirements for the management of 11e.(2) material.\26\ By the end of 
1983, EPA had issued standards of general applicability for active 
uranium mill tailings sites (as well as for inactive sites), and 
Congress had amended the AEA to provide more flexibility for Agreement 
states and NRC licensees to achieve the levels of protection required 
under EPA and NRC regulations without necessarily being bound to the 
specific requirements set forth in those regulations. In addition, 
Congress specifically directed NRC and EPA to balance costs against 
risks when developing regulations and standards governing the 
management of uranium mill tailings and related wastes.
---------------------------------------------------------------------------
    \26\ Pub. L. No. 97-415 Sec.  22 (1983).
---------------------------------------------------------------------------
    Under the administrative scheme set out in the statute, NRC's mill 
tailings regulations were required to conform to EPA's generally 
applicable standards. However, since NRC had promulgated its mill 
tailings regulations three years prior to EPA's issuance of generally 
applicable standards (instead of waiting for EPA action before 
promulgating its regulations), at the time EPA's generally-applicable 
standards were promulgated they were in conflict with the Commission's 
regulations. Consequently, NRC was forced to revise its 1980 
regulations so that they would conform to EPA's later-issued generally 
applicable standards.
     Although NRC was able to conform its mill tailings regulations to 
EPA's radon and surface stabilization standards fairly quickly, it took 
a significantly longer period of time for the Commission to conform its 
regulations to EPA's groundwater standards. Indeed, although NRC. 
published an advance notice of proposed rulemaking in November of 1984, 
it was not until three years later, at the end of 1987, that NRC's 
final groundwater regulations were promulgated.\27\ Those regulations, 
like the EPA groundwater protection regulations described above, 
included a design standard and a performance standard. Also like the 
EPA standard, NRC's performance standard required the licensee to 
achieve background concentrations, drinking water standards, or an ACL. 
At around the same time that NRC promulgated its final groundwater 
standards, the Commission began to require that licensees implement 
groundwater corrective action programs aimed at ensuring compliance 
with those standards.
---------------------------------------------------------------------------
    \27\ 52 Fed. Reg. 43,553 (1987).
---------------------------------------------------------------------------
    NRC's failure to promulgate final groundwater regulations prior to 
1987 created difficulties for some mill operators. By the mid-1980s, 
unfavorable world market conditions for uranium were beginning to take 
their toll on conventional uranium milling operations in the United 
States, causing a general decline in the industry. As a consequence, a 
number of uranium mills that had been on ``standby'' status in the 
United States began to seriously address the closure process. However, 
final closure was, as a practical matter, impossible until NRC's 
groundwater regulations were in place. And the closure efforts of some 
facilities were further delayed by the time required to develop and 
issue guidance on obtaining ACLs (which, for most facilities, would be 
essential to satisfying NRC's groundwater standards). NRC did not issue 
``final'' guidance on ACLs until December of 1992 (although the 
regulated community would have to wait until 1996 for further revised 
ACL guidance that incorporated risk-based limits).
    Another component of NRC's regulatory program to address closure of 
uranium mill and tailings facilities was put into place in August of 
1990, when NRC issued its ``Final Staff Technical Position'' on the 
design of erosion protection covers for uranium mill tailings disposal 
sites. This technical guidance document, intended to assist licensees 
in designing erosion protection covers satisfying the surface 
stabilization criteria in NRC's mill tailings regulations, required 
most licensees to reconsider either proposed or approved surface 
reclamation plans. Also in 1990, NRC promulgated regulations 
establishing a general license to DOE for the longterm care, 
maintenance and monitoring of uranium mill tailings sites following 
license termination and closure. Under these regulations, DOE is 
required to submit for NRC approval a Long-Term Surveillance Plan 
(LTSP) for the site over which it is to assume custody. The LTSP must 
include a detailed description of DOE's long term monitoring program 
and it must identify criteria for instituting maintenance or emergency 
measures.\28\
---------------------------------------------------------------------------
    \28\ 55 Fed. Reg. 45,591 (1990) codified at 10 C.F.R. Sec.  40.28.
---------------------------------------------------------------------------
    Further, in 1994, NRC participated in a settlement negotiation 
between the American Mining Congress (now NMA), EPA, and environmental 
groups as part of the recision of 40 C.F.R. Part 61, Subpart T. As a 
result of this negotiation, NRC revised its mill tailings regulations 
to require licensees to achieve enforceable ``milestones'' leading to 
accelerated placement of radon barriers at non-operational (i.e., no 
longer actively milling or on standby) Title II mill tailings disposal 
sites.\29\ These milestones were included in the settlement agreement 
to satisfy EPA's and the environmental groups' concerns that the 
potential threat from radon emissions be addressed by the prompt 
placement of radon barriers over disposal areas.\30\
---------------------------------------------------------------------------
    \29\ 59 Fed. Reg. 28,220 (1994).
    \30\ EPA was clearly concerned with prompt placement of radon 
barriers over tailings piles, the Agency thus indicated that the 
primary purpose of the settlement was to
      to ensure that owners of uranium mill tailings disposal sites . . 
.  bring those piles into compliance with the 20 pCi/m2s 
flux standard as expeditiously as practicable considering technological 
feasibility . . .  with the goal that all current disposal sites be 
closed and in compliance with the radon emission standard by the end of 
1997, or within seven years of the date on which existing operations 
and standby sites enter disposal status.
      59 Fed. Reg. 36,280, 36,282 (1994).

    Finally, in January of 1998, NRC and DOE generated a protocol for 
the transfer and licensing of mill tailings disposal sites to DOE for 
long term surveillance and maintenance following site closure and 
license termination. This ``Working Protocol for Long-Term Licensing of 
Commercial Uranium Mills'' sets forth a number of principles that NRC 
and DOE will follow in affecting the transfer of these sites. For 
example, the Protocol specifies that NRC will require current licensees 
to demonstrate that all applicable NRC requirements have been met 
before the Commission will terminate current licenses. In addition, the 
Protocol provides that NRC ``will not terminate any site-specific 
license until the site licensee has demonstrated that all issues with 
state regulatory authorities have been resolved.''
    Two decades after Congress first provided the Commission with 
direct authority to regulate uranium mill tailings, there is now in 
place a comprehensive and mature regulatory program governing UR 
facilities and uranium mill tailings. Unlike the regulatory program for 
mill tailings that NRC first put into place in 1980, which focused 
primarily on radon, the regulatory regime that has developed over the 
past two decades now covers all aspects of UR facility management, with 
a particular focus on groundwater issues at both conventional and ISL 
facilities. At the same time, the fundamental nature of the UR industry 
has changed dramatically since Congress first enacted UMTRCA. Contrary 
to NRC staff expectations in 1980, dozens of new conventional mills 
have not come on line since the development of the final GEIS. Further, 
most conventional mills are no longer engaged in active milling 
operations or on standby but instead are inactive and working toward 
final site closure and license termination. Similarly, ISL operations 
no longer account for only a small fraction of domestic UR, as was the 
case in 1980. Instead, ISL operations are now the most vital segment of 
the UR production industry and will continue to generate wastes (albeit 
small quantities of waste, when compared to the tailings generated by 
convent ional mining and milling) for years into the future.
             the in situ recovery (isr) process for uranium
    The nature of the ISR uranium recovery process and the geologic and 
hydrologic conditions under which uranium deposits amenable to this 
process are found both are critical factors in understanding the low-
risk nature of ISR uranium recovery. Even though ISR uranium recovery 
technology is not new, the process itself is frequently misunderstood 
or mischaracterized.
    ISR uranium recovery leaves the underground ore body in place and 
continuously recirculates native groundwater from the aquifer in which 
the ore body resides (fortified with oxygen and carbon dioxide, which 
is not a ``toxic chemical cocktail'') through the ore body. ISR uranium 
recovery was first tried on an experimental basis in the early 1960s 
with the first commercial facility commencing operations in 1974. 
Uranium deposits amenable to ISR uranium recovery occur in permeable 
sand or sandstones that are confined above and below by impermeable 
strata. These formations may either be flat or ``roll-front'' in cross-
section, C-shaped deposits within a permeable sedimentary layer. These 
uranium-bearing formations were formed by the lateral movement of 
groundwater bearing minute amounts of oxidized uranium in solution 
through the aquifer with precipitation of the uranium occurring when 
the oxygen content decreases along extensive oxidation-reduction 
interfaces. Uranium roll front deposition currently is ongoing on a 
regional basis every day. Regional roll fronts require broad areas of 
upgradient oxidation to keep uranium mobile until the oxidized water 
moves downgradient far enough to encounter a zone of abundant 
reductant. It is at this regional redox interface where the oxygenated 
water is reduced and uranium is deposited in what is known as a 
redistributed ore body that ISR uranium recovery operations are 
conducted.
    Uranium mineralization leaves a distinct radiochemical footprint in 
rock and water. The basis for geophysical logging is the presence of 
radioactive materials which allow the discovery and delineation of ore. 
Where the uranium ore zone is saturated by groundwater, the footprint 
extends itself into water. Given natural erosion processes, uranium and 
uranium progeny accumulated in the rock will manifest themselves in 
surrounding media. For a uranium ore body to be amenable to ISR uranium 
recovery using the typical recovery chemistry noted above, the ore zone 
must be saturated with relatively fresh water and the rock must have 
enough transmissivity for water to flow from injection to extraction 
wells. In other words, for ISR uranium recovery to work, the ore must 
be situated in an aquifer. There are no ISR uranium recovery operations 
in ore bodies that are not in aquifers.
    Techniques for ISR uranium recovery have evolved to the point where 
it is a controlled, safe, and, indeed, an occupationally and 
environmentally benign method of uranium recovery that does not result 
in any significant, potential adverse impacts to workers, the surface 
(lands) or the subsurface (groundwater), including underground sources 
of drinking water (USDWs). After an ore body that is amenable to ISR 
uranium recovery is identified, the licensee develops wellfield designs 
that progressively remove uranium from the identified ore body. 
Wellfield design is based on grids with alternating extraction and 
injection wells and a ring of monitoring wells above and below and 
outside of but surrounding the entire recovery area to detect any 
potential excursions of solubilized uranium and other minerals from the 
uranium recovery production zone.
    As noted above, during active operations, native groundwater from 
the recovery zone in the aquifer is pumped to the surface for 
fortification with oxygen and carbon dioxide. This fortified water 
(i.e., lixiviant), which is similar to soda water, is then returned to 
the recovery zone through a series of injection wells in varying 
patterns in the wellfields. Water withdrawn from extraction wells in 
these patterns exceeds the water injected into the patterns creating a 
``cone of depression'' that assures a net inflow of water into the 
recovery zone of the aquifer so that adjacent, non-exempt USDWs will 
not be impacted by excursions of recovery solutions. It also brings 
fresh water into the recovery zone to inhibit the build-up of 
contaminants, such as sodium chloride, that could reduce the efficiency 
of the operation.
    Since water from the ore body, already containing naturally 
occurring uranium and its progeny, is continuously refortified with 
oxygen and re-circulated through the sandstone to enhance uranium 
values removed in the ion-exchange (IX) columns, injection is 
``locked'' to extraction (i.e., without extracting at least as much 
water as is injected, the surface plant will run dry and re-circulation 
will stop). Injection cannot proceed without an equal or greater amount 
of extraction; therefore, overinjection across the area cannot take 
place. Wellfield balance is critical to optimum uranium recovery 
operations and post-operation recovery efforts. Wellfield balance 
involves monitoring, to the extent necessary, and adjusting pumping 
pressure in every well and across every wellfield on a daily basis or 
even hour-to-hour basis. To help keep the continuously operating system 
in balance, the extra water that is extracted is removed from the 
circuit as a process ``bleed.'' The process ``bleed,'' which contains 
elevated levels of radium, can be, and in the past frequently was, 
treated in settlement ponds or by filtration to remove the radium using 
a bariumradium sulphate precipitation method. Otherwise, the process 
``bleed'' water is then discharged to holding ponds or tanks and from 
there it must be disposed of using land application, deep well 
injection, solar evaporation or some combination of these methods.
    During active uranium recovery operations and groundwater 
restoration activities, ISR operators are required to install a 
comprehensive system of monitoring wells around, above, and below the 
aquifer zone where uranium recovery will occur to assure that, if 
excursions occur, they can be identified readily and addressed 
immediately. The design, installation, and operation of monitoring 
wells are performed in a progressive, iterative manner to assure that 
they remain viable and, thus, provide the ISR operator with adequate, 
up-to-date information to identify any excursions. The wells are cased 
to ensure that recovery solutions only flow through and from the ore 
zone and do not migrate to adjacent, overlying or underlying, non-
exempt USDWs. Prior to use, all monitoring wells are pump-tested to 
verify that they are operational and technically sufficient for active 
operations. Pump tests also are used to verify continuing confinement 
provided by less permeable overlying and underlying strata (i.e., 
aquitards), which forced the regional groundwater flow through the more 
porous sands which contain the redistributed uranium ore body amenable 
to the ISR process. Indeed, without the confining strata, these 
redistributed uranium ore bodies probably would not exist. The 
confining strata assist ISR operators' control of recovery solutions by 
limiting their movement to radial or lateral flow paths.
    After uranium recovery ceases, the groundwater in the recovery zone 
is restored consistent with baseline or other water quality standards 
that are approved by NRC prior to the commencement of active production 
operations. Upon completion of groundwater restoration, wells are 
sealed or capped below the soil surface using approved plugging 
methods. Surface process facilities are decontaminated, if necessary, 
and removed, and any necessary reclamation and re-vegetation of surface 
soils is completed. As a result, after site closure is completed and 
approved, there is no visual evidence of an ISR uranium recovery site, 
and the decommissioned site will be available for unrestricted (i.e., 
any future) use.
    In over three decades of ISR operations, there have been no 
significant, adverse impacts to adjacent, non-exempt USDWs outside the 
recovery zone and into the related area of review (AOR) from ISR 
uranium recovery operations in the United States. Wellfield balancing, 
including the process ``bleed,'' monitoring, and pump tests at ISR 
uranium recovery sites have been highly successful in assuring that 
recovery solutions are contained within the ore (recovery) zone. Before 
monitoring ceases, restoration is completed to minimize or eliminate 
the potential risk of postoperation excursions that could result in the 
migration of contaminants from the exempted recovery zone portion of 
the aquifer to adjacent, non-exempt portions of the aquifer. 
Restoration assists in restoring the pre-operational reductant 
conditions in the recovery zone(s) which the introduction of 
solubilizing ``soda-water-like'' recovery solutions reversed during 
active recovery operations.
    The inescapable reality of massive regional redox capacity over the 
long-term combined with the presence of adequate safeguards under NRC's 
AEA and EPA's UIC program make it highly unlikely that excursions to 
adjacent, non-exempt USDWs will occur after operations cease. Indeed, 
NRC has imposed groundwater restoration requirements on all ISR 
operators to minimize, if not eliminate, the potential for excursions 
to adjacent, non-exempt USDWs after such restoration is complete.
    Pursuant to relevant NRC license conditions, ISR operators are 
required to engage in active groundwater restoration for each portion 
of the defined ore body where wellfields have been installed and where 
uranium recovery has occurred. Indeed, in NUREG-1508, NRC specifically 
states: ``Following uranium recovery in each mine [recovery] unit, HRI 
would be required by NRC license to restore groundwater quality . . . 
.Detailed restoration, reclamation, and decommissioning plans, related 
cost estimates, and an appropriate surety would be required by the NRC 
before HRI [or any other licensee] could begin uranium recovery 
operations.''
    The process of determining a licensable approach to restoration 
begins well before the issuance of an NRC license when an applicant/
licensee proposes a technical plan for groundwater restoration, 
including an estimate of the number of ``pore volumes'' necessary to 
complete restoration, which is adequately protective of public health 
and safety. ``Pore volume'' is an industry and NRC term which is used 
to describe the quantity of free water in the pores of a given volume 
of rock. ``Pore volume'' provides a unit of reference that an ISR 
operator can use to describe the amount of circulation that is needed 
to deplete an ore body or to describe the amount of water that must be 
circulated through a quantity of depleted ore to achieve restoration. 
Using this pore volume estimate, licensees can calculate adequate 
financial assurance cost estimates based on the amount of water that 
likely will need to be used to complete adequate restoration.
    However, the number of pore volumes required for groundwater 
restoration, like many aspects of the ISR process, is calculated based 
on the best available data and analyses when an applicant submits a 
license application. After a licensee ceases active operations in a 
given wellfield, active groundwater restoration commences. During the 
restoration process, a licensee may determine that additional or fewer 
``pore volumes'' are required to restore water quality consistent with 
baseline. If this is the case, pursuant to 10 CFR Part 40, Appendix A, 
Criterion 9, the licensee is required to notify NRC Staff of the 
proposed change in estimated ``pore volumes'' in order to re-calculate 
its financial assurance cost estimate based on the increase or decrease 
in ``pore volumes.''2 Simply put, groundwater restoration requirements, 
as reflected in mandatory financial assurance commitments, provide 
additional evidence that ISR operations are iterative and ``phased'' in 
nature and that adequate NRC safeguards exist to ensure that site water 
quality is restored in a manner that minimizes, if not eliminates, the 
potential for excursions to adjacent, non-exempt USDWs after 
restoration is approved by NRC.
    NRC's restoration approach was further refined by the Commission in 
the HRI administrative litigation by requiring that an ISR operator 
submit a groundwater restoration action plan (RAP)3 providing NRC Staff 
with line-item cost estimates for site reclamation, including 
restoration and disposition of resulting wastes prior to the issuance 
of an NRC uranium recovery license. While the actual financial 
assurance mechanism is not required to be available until the licensee 
is prepared to commence active uranium recovery operations, the RAP 
detailing its proposed line-item cost estimates (including costs for 
groundwater restoration) must be approved by NRC Staff prior to the 
issuance of an NRC uranium recovery license. As a result, no ISR 
license applicant may receive a license to conduct active ISR 
operations without NRC's Staff's express approval of its proposed RAP.
    In addition, EPA's UIC program provides a final regulatory 
safeguard which ensures that, in the highly unlikely event that a post-
restoration excursion to an adjacent, non-exempt aquifer occurs, post-
restoration water quality will be maintained. 40 CFR Sec.  146.7 
provides the EPA Administrator with the authority to require that an 
ISR operator re-commence active groundwater restoration/remediation if 
a postrestoration excursion occurs. However, while this regulatory 
safeguard exists, to the best of NMA's knowledge, neither EPA nor a 
State with UIC ``primacy'' has ever exercised this authority with any 
ISR operator nor has the need ever been presented. Thus, in summary, 
adequate safeguards exist during active ISR operations, during 
groundwater restoration, and after restoration to ensure that adjacent, 
non-exempt USDWs will not experience any significant, adverse impacts 
as a result of ISR operations.
       statutory and regulatory programs for isr uranium recovery
    A robust regulatory program for ISR uranium recovery is in place to 
assure adequate protection of public health and safety and the 
environment.
    Pursuant to the AEA, as amended by UMTRCA, NRC is the federal 
agency empowered with the responsibility for regulating ISR uranium 
recovery operations at the point processing of uranium begins. NRC 
maintains active regulatory oversight over the conduct of ISR 
operations by using license conditions and 10 CFR Part 40, Appendix A 
Criteria, as relevant and appropriate, 10 CFR Parts 20 & 51, and 
related guidance. Appendix A Criteria are broad, performance-oriented 
Criteria that govern uranium recovery activities and waste disposal. At 
a time when emerging environmental regulations were frequently 
considered to be extremely prescriptive, Appendix A can be classified 
as somewhat ``ahead of its time'' because NRC sought to develop 
performance-oriented Criteria rather than prescriptive regulations so 
that uranium recovery licensees could address site-specific 
circumstances effectively.\31\ In total, Appendix A contains thirteen 
criteria designed to allow licensees to properly locate, operate, and 
decontaminate and decommission their sites.
---------------------------------------------------------------------------
    \31\ For example, NRC Staff developed these Appendix A Criteria 
``mindful of the fact that the problem of mill tailings management is 
highly site-specific. The precise details of a program can be worked 
out only when the unique conditions of a site are known.'' Indeed, the 
word ``requirements'' in the Introduction to ``Appendix A'' was 
replaced with the word ``criteria'', NUREG 0706, Volume II A-81, 82.
---------------------------------------------------------------------------
    However, given that Appendix A Criteria were designed primarily for 
application to conventional mills and not ISR facilities, NRC has 
determined that Appendix A Criteria will be applied to ISR projects 
``as relevant and appropriate.'' As a result, NRC has applied these 
Criteria to ISR licensees through the use of specific license 
conditions.
    To assure safe and effective underground injection throughout the 
United States, the United States Congress also enacted the SDWA which, 
in part, authorized establishment of the Underground Injection Control 
(UIC) program so that injection wells would not endanger current and 
future underground sources of drinking water (USDWs). The SDWA 
empowered EPA with the primary authority to regulate underground 
injection to protect current and future sources of drinking water. EPA 
also was authorized to provide States with the opportunity to assume 
primary authority over UIC programs in accordance with final 
regulations promulgated by EPA in 1980, which set minimum standards for 
State programs to meet to be delegated primary enforcement 
responsibility (primacy) for such programs.\32\
---------------------------------------------------------------------------
    \32\ See 42 U.S.C. Sec.  300h(1).
---------------------------------------------------------------------------
    Underground injection is broadly defined as the process of placing 
fluids underground in porous formations of rocks through wells or other 
similar conveyance systems. Before NRC-licensed ISR uranium recovery 
operations can commence at any project site, an ISR licensee must have 
obtained two UIC authorizations: (1) an aquifer exemption for the 
aquifer or portion of the aquifer wherein ISR uranium recovery 
operations will occur and (2) a Class III UIC permit.\33\
---------------------------------------------------------------------------
    \33\ See e.g., United States Nuclear Regulatory Commission, Hydro 
Resources, Inc., SUA-1508, License Condition 9.14. ISR operators also 
may require a Class I UIC permit for deep-well disposal of liquid 
11e.(2) byproduct material during active operations and groundwater 
restoration.
---------------------------------------------------------------------------
    EPA's UIC program was created to protect current or future USDWs. A 
USDW is defined as an aquifer, or portion thereof, which serves as a 
source of drinking water for human consumption, or contains a 
sufficient quantity of water to supply a public water system, and 
contains fewer than 10,000 mg/liter of total dissolved solids (TDS). 
The broad definition of a USDW was mandated by Congress in Section 
1421(d)(2)\34\ of the SDWA to ensure that future USDWs will be 
protected, even where those aquifers currently are not being utilized 
as a drinking water source or could not be so used without some form of 
water treatment.
---------------------------------------------------------------------------
    \34\ See 42 U.S.C. Sec.  300h(b)(1).
---------------------------------------------------------------------------
    Within this regulatory framework, however, some aquifers or 
portions of aquifers, which can satisfy the broad regulatory definition 
of a USDW, may not reasonably be expected to serve as a current or 
future source of drinking water. As a result, the UIC program 
regulations allow EPA to exempt portions of an aquifer from delineation 
as a USDW and allow for injection into such aquifers or portions 
thereof. EPA regulations at 40 CFR Sec.  146.4 state:

                  An aquifer or a portion thereof which meets the 
                criteria for an `underground source of drinking water' 
                in Sec.  146.3 may be determined under 40 CFR Sec.  
                144.7 [sic] to be an ``exempted aquifer'' if it meets 
                the following criteria:

          a. It does not currently serve as a source of drinking water; 
        and
          b. It cannot now and will not in the future serve as a source 
        of drinking water; or
          c. The total dissolved solids content of the ground water are 
        more than 3,000 and less than 10,000 mg/L and it is not 
        reasonably expected to supply a public water system.''\35\
---------------------------------------------------------------------------
    \35\ See 40 CFR Sec.  146.4 (emphasis added).

    According to EPA, aquifers meeting one or more of these criteria 
are generally associated with in situ mineral and enhanced oil 
recovery. If an operator or licensee/permittee wishes to inject into a 
USDW for the purpose of recovering minerals (e.g., uranium), a 
demonstration must be made that the proposed aquifer meets at least one 
of the exemption criteria.\36\ Aquifer exemptions are a mandatory 
prerequisite for any ISR project.
---------------------------------------------------------------------------
    \36\ In other words, a proposed ISR uranium recovery operation can 
only be conducted in an aquifer or portion thereof that cannot now or 
in the future serve as a source of drinking water due to the presence 
of significantly elevated concentrations of naturally occurring 
radionuclides and/or other hazardous constituents. Thus, it is 
incorrect and misleading for members of the public or organizations to 
assert that the conduct of ISR uranium recovery operations results in a 
degradation of ``pristine'' or otherwise potable sources of water.
---------------------------------------------------------------------------
    Therefore, logically, EPA does not prescribe specific groundwater 
restoration standards for exempted aquifers, because such exempted 
aquifers will never be used as drinking water sources at any point 
before, during or after ISR operations are complete. However, as 
described in 40 CFR Sec.  146.7, EPA can require corrective action/
remediation of any contamination of adjacent, non-exempt aquifers in 
accordance with the purpose of the SDWA and the UIC program to protect 
USDWs.\37\
---------------------------------------------------------------------------
    \37\ See 40 CFR Sec.  146.7.
---------------------------------------------------------------------------
    UIC regulations also establish specific performance criteria for 
classes of wells to assure that drinking water sources, actual and 
potential, are not rendered unfit for such use by underground injection 
of the fluids common to that particular category of wells. To obtain a 
permit for a new Class I deep-well injection to dispose of 11e.(2) 
byproduct material and other wastes or Class III uranium recovery 
wells, the owner/operator or licensee must file an application with the 
UIC Director for the relevant jurisdiction containing specific 
information listed in 40 CFR Part 146 or in applicable State 
requirements. Once a UIC permit application has been reviewed, the 
applicant will be notified of the items needed to complete the 
application, if any. After a complete application is received, an 
initial decision to grant or deny the permit is issued. UIC regulations 
also provide opportunities for public participation and comment.
    A UIC permit for each site also is a mandatory prerequisite for the 
operation of an ISR project. For individual ISR uranium recovery 
projects, a UIC permit is required for Class III wells for uranium 
recovery and, if the licensee/permitee seeks to use Class I deep 
injection wells for disposal of liquid wastes. As stated above, such 
permits necessarily assume the existence of an aquifer exemption for 
that portion of the aquifer to be used for underground injection--water 
that cannot now or in the future be used as a USDW.
   potential impacts of isr uranium recovery are adequately addressed
    One of the issues most frequently raised by interested stakeholders 
is the potential impacts to public health and safety from ISR uranium 
recovery. The extremely low-risk nature of ISR operations can be seen 
in the potential radiation dose impacts on workers and the public from 
ISR uranium recovery and natural background radiation in the areas 
where ISR projects likely will take place.
    As a general matter, ionizing radiation is ubiquitous throughout 
the United States and, according to the National Council on Radiation 
Protection and Measurement (NCRP), the average background radiation 
dose to a member of the public in the United States is approximately 
300 mrem/year. Dose from naturally occurring sources, which is the 
largest potential source of public radiation dose within the ambit of 
NRC's definition of ``background radiation,'' is highly variable (i.e., 
it can vary by as much as a factor of ten across the country). Dose 
from ``background radiation'' results from cosmic radiation sources 
such as cosmic rays from the sun and supernova explosions and from 
anthropogenic (human) activities, such as global fallout and surface 
nuclear weapons testing, internal dose from ingested or inhaled 
radionuclides, terrestrial gamma doses, and the largest percentage of 
dose, which is from radon and its decay products. Indeed, the largest 
everyday anthropogenic activity causing releases of radon into the 
atmosphere is farming. As a result, it can be said with confidence that 
members of the public are exposed to radiation dose all of the time and 
that, depending on a person's geographic location, it can vary greatly.
    Given these parameters, a proper understanding of the potential 
sources of radiation dose from uranium recovery operations and the 
corresponding potential risk is necessary. Initially, it is well-
accepted that the planet contains a multitude of naturally occurring 
radiation sources that ``bathe'' every living thing on this planet in 
radiation. These sources are augmented further by the creation of 
anthropogenic sources of radiation outside the control of a licensee, 
such as global fallout and Chernobyl, which prompted NRC to alter its 
definition of ``background radiation'' to include such sources.\38\ 
Thus, it is likely that locations containing elevated levels of 
naturally occurring radionuclides, such as recoverable uranium, will 
exhibit elevated levels of naturally occurring radiation. Indeed, NRC 
has indicated that, in the United States, background radiation total 
effective dose equivalents (TEDE) range from 100 mrem/year-1,000 mrem/
year with higher levels in the higher altitudes in the mineralized 
areas of the western part of the country.
---------------------------------------------------------------------------
    \38\ See 10 CFR Sec.  20.1003.
---------------------------------------------------------------------------
    Added to this, a variety of data and analyses are available that 
provide evidence that potential radiation dose risks associated with 
both conventional and ISR uranium recovery are well below regulatory 
limits. While current data and analyses from United States-based 
conventional uranium mining operations are not available, many such 
data and analyses are available from Canadian-based operations. These 
data show the average total dose (TEDE) dose for underground miners for 
the period 1997 to 2005 is about 3.3 mSv, equivalent to 330 mrem, which 
is approximately equal to the average dose received from natural 
background radiation in the United States and is approximately, 1/17th 
of the annual worker dose limit in the United States of 5,000 mrem/
year. Mill workers in Canada received an average dose of 186 mrem, and 
surface mining personnel received an average dose of 47 mrem. In 1975, 
7 of 17 uranium mills in the US reported an average whole body dose to 
mill workers of 380 mrem/year. [NRC GEIS 1980] This value although 
somewhat higher than the current value reported for Canadian mills, is 
well within regulatory limits and, again, is comparable to the dose 
received from natural background. Thus, the dose to workers at uranium 
mining/milling facilities and members of the public living nearby are 
well-within the lower level of the range of average natural background 
exposures and far below NRC's annual exposure limit for workers or 
members of the public.
    With respect to ISR operations, the potential impacts from 
radiation dose are, by orders of magnitude, lower than those posed by 
conventional mining/milling. Many of the dose pathways relevant to 
conventional mining/milling, such as ore removal, hauling, ore storage, 
mill tailings, and wind-blown particulate are not present, and 
therefore do not pose any risk, at ISR facilities, since no ore or 
waste rock is brought to the surface and there are no tailings 
associated with ISR activities. Thus, it is anticipated that the 
potential doses to actual members of the public who live near ISR 
facilities will be significantly lower, on the order of 1 mrem/year 
which equates to NCRP's negligible individual risk level (NIRL).\39\ 
Thus, it is highly unlikely that an ISR worker, much less a member of 
the public, will receive a dose in excess of 10 CFR Sec.  20.1301 
regulatory limits.
---------------------------------------------------------------------------
    \39\ NCRP's NIRL is ``a level of average annual excess risk of 
fatal health effects attributable to irradiation, below which further 
effort to reduce radiation exposure to the individual is unwarranted.''
---------------------------------------------------------------------------
                               conclusion
    The U.S. mining industry has fully embraced the responsibility to 
conduct its operations in an environmentally and fiscally sound manner. 
The industry hopes and expects that Mining Law legislation will 
recognize and honor both its commitments to continuous improvement in 
our environmental performance and the industry's contribution to our 
national well-being.
    NMA appreciates the opportunity to provide this testimony.

    The Chairman. Thank you all very much for your testimony. I 
think it has been very useful.
    I think it is late. I may have some questions that I would 
submit in written form and there may be other Senators who have 
questions they would like to submit. We will be in touch with 
you shortly if that is the case.
    But I appreciate your being here. I think this is all very 
useful. It helps us to understand the issues.
    I would just say in response to Mr. Newton's testimony that 
I do not think that there is a great risk that we are going to 
act in a hasty manner. It has been 136 years since we have done 
anything.
    [Laughter.]
    The Chairman. So I think that the odds are against us 
acting too hastily.
    But I do hope we can move ahead. I think there is a 
consensus that some rewrite of the Mining Law is possible in 
this Congress, and we will continue to work on these issues and 
see if that is possible. There are many Senators here of good 
will who are anxious to come to some agreement on some 
reasonable changes that we could enact, and I hope we are able 
to proceed in that way.
    But thank you all very much, and why don't we conclude the 
hearing with that.
    [Whereupon, at 4:22 p.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Tony L. Ferguson to Questions From Senator Bingaman
    Question 1a. How reliable are your estimates of the number of 
abandoned hardrock mine sites are on Forest Service lands?
    Answer. Estimates for the total number of abandoned mines on 
National Forest System (NFS) Lands are based on data collected by the 
former US Bureau of Mines (BOM). These data are now part of the Mineral 
Resource Database System (MRDS) which is managed by the US Geological 
Survey. These numbers were based on information in published reports 
and maps, federal and state agencies, and to some extent from private 
and public sources. Because these data have not been field verified, 
our estimates of the total number of abandoned mines should be treated 
as a general estimate only.
    Question 1b. How many of these sites present a threat to human 
health and safety?
    Answer. A 1995 Forest Service analysis report of the abandoned mine 
data compiled by the BOM indicated that there were 9,000 to 13,000 
abandoned hardrock mines on NFS Lands that had a record of past mineral 
production. We believe that these numbers are a reasonable estimate for 
the range of abandoned mine sites which may pose a threat to human 
health and safety from physical mine features (adits, shafts etc) and/
or the presence of hazardous materials.
    Question 1c. How many present environmental problems?
    Answer. In 1996, based on the preliminary inventory and screening 
of BOM data described above, Forest Service Regions estimated that 
4,000 to 6,000 sites would required environmental cleanup as result of 
water quality problems from hazmat or other non-hazardous (sediment) 
materials.
    Question 2a. GAO has indicated that the Forest Service's median 
expenditures on hardrock AML reclamation was $21 million per year from 
1998 through 2007. How much would it take per year to address this 
problem in a meaningful way?
    Answer. The Forest Service believes that significant progress has 
been made in mitigating the environmental damage and safety hazards at 
abandoned mines with historic levels of funding, and collaboration with 
state, federal and private partners. For example, in the 1998 to 2008 
period the Forest Service also received approximately $90 million in 
funding from the USDA Hazardous Materials Management Account (HMMA) and 
recovered approximately $300 million dollars from potentially 
responsible parties. Maintaining such funding is expected to be 
difficult given the importance of competing needs, but we believe that 
continued funding at historic levels would be meaningful.
    Question 2b. How much funding would it take to reclaim all 
abandoned hardrock mines on Forest Service lands in 10 years?
    Answer. The Forest Service does not have sufficient data on the 
number of abandoned mines requiring mitigation and cleanup and the 
costs involved to provide an accurate estimate of the funding required 
to reclaim all abandoned hardrock mines in 10 years.
    However, if prior estimates by the Forest Service (see below) of 
the total cost of abandoned mine cleanup are assumed to be accurate 
(5.55 billion in 2007 dollars) and considering the approximate $600 
million dollars of Forest Service, USDA and potentially responsible 
party contributions that have been spent over the last 10 years, it 
would require an expenditure of nearly $490 million dollars a year to 
address the remaining $4.9 billion dollars of work remaining ($5.55 
billion minus $600 million)
    Question 2c. What is the estimated cost of reclaiming all abandoned 
hardrock mines on Forest Service lands?
    Answer. In 1994 the FS estimated that will cost approximately $2.1 
billion to clean up hazardous substances and $2.3 billion dollars to 
mitigate safety hazards at abandoned mines on FS Lands. Using a simple 
inflation multiplier based on the consumer price index the 1994 
estimate would be approximately $5.55 billion dollars in 2007 dollars. 
It should be stressed that these are very rough approximations at best 
since the actual number of abandoned mines and the extent of cleanup 
that will be required at each mine is not known.
    Question 3. Do you think that a Westwide hardrock AML program 
patterned after the coal AML program is a good idea?
    Answer. The FS believes that while the reclamation fund provided 
under the Surface Mining Control and Reclamation Act (SMCRA) could 
serve as a starting point, there are some unique characteristics that 
would need to be addressed in a program for abandoned hard rock mines 
in the West, patterned after the coal AML program.
    For example, in contrast to abandoned coal mines, many abandoned 
mines in the West are found on federal lands managed by the Forest 
Service, Bureau of Land Management, National Park Service and others. 
In Nevada nearly 85% of the land is in federal ownership. Overall 
nearly half of all land in the 12 western states (including Alaska) is 
in federal ownership.
    Federal land managers (FLM) have legal responsibilities and 
authorities under various federal statutes to manage and coordinate the 
activities and uses which occur on lands under their jurisdiction. 
Funding to allow FLM to discharge their legal responsibilities on these 
lands, and to plan and coordinate cleanup and safety mitigation with 
other activities, would be needed as part of a hardrock AML program.
    Other differences due to the nature of the laws governing disposal 
of hardrock minerals on public domain lands would have to be addressed 
in planning and executing cleanups, as well as maintaining and 
protecting the cleanup work them in the long-term.
    Question 4. Do you think an AML fee like that imposed on coal would 
make sense for a hardrock AML program?
    Answer. We concur with the remarks made by Deborah Gibbs Tschudy, 
Deputy Association Director, Minerals Revenue Management for the 
Minerals Management Service who testified regarding this issue before 
this Committee on January 24, 2008.
    Question 5a. The GAO testimony indicates that the Forest Service 
regulations do not require the posting of financial assurances but as a 
matter of policy, financial assurances are often required. In what 
circumstances are financial assurances required?
    Answer. Financial assurances to perform reclamation work are 
required in every case where there is likely to be a significant 
disturbance of surface resources. Forest Service Manual at 6564.1 
contains the policy for obtain performance bonds to cover the estimated 
reclamation costs for prospecting, mining, and other mineral operations 
on National Forest System lands. In estimating such bonds, FSM 2817.24a 
further provides that estimators should follow the guidance found in 
the Forest Service's Training Guide for Reclamation and Administration, 
adopted in April 2004 for plans of operations authorized and 
administered under Title 36, Code of Federal Regulations, part 228, 
subpart A (36 CFR part 228, subpart A).
    Question 5b. Do you have information on the amount of financial 
assurances posted on Forest Service lands?
    Answer. Yes. The total amount of financial assurances held for 
exploration and hardrock mining operations is approximately 
$100,750,000.
    Question 5c. Does the Forest Service have written guidance on when 
financial assurances are required? If so, please provide.
    Answer. Forest Service Manual at 6564.1 contains the policy for 
obtain performance bonds to cover the estimated reclamation costs for 
prospecting, mining, and other mineral operations on National Forest 
System lands. In estimating such bonds, FSM 2817.24a further provides 
that estimators should follow the guidance found in the Forest 
Service's Training Guide for Reclamation and Administration, adopted in 
April 2004 for plans of operations authorized and administered under 
Title 36, Code of Federal Regulations, part 228, subpart A (36 CFR part 
228, subpart A).
    Question 6a. How do the Forest Service and EPA coordinate on 
Superfund sites that involve abandoned hardrock mines on Forest Service 
lands?
    Answer. The answer depends upon the situation. If the abandoned 
hardrock mine is on EPA's Superfund National Priority List (NPL), then 
EPA serves as the lead agency for the investigation and cleanup of the 
mine site pursuant to Executive Order 12580. The Forest Service role at 
NPL mine sites is usually determined through a written agreement 
between the agencies. If the mine site is located entirely on NFS land 
and is not an NPL site, then USDA Forest Service will serve as the lead 
agency and will exercise its delegated CERCLA authorities to 
investigate and, if necessary, clean up the mine site, pursuant to the 
same Executive Order. If the site is a mixed-ownership site, located 
partially on NFS land and partially on state or private land, then the 
Forest Service and EPA coordinate pursuant to the ``Statement of 
Principles for Collaborative Decision Making at Mixed Ownership 
Sites.'' The Statement of Principles were agreed upon by USDA, the U.S. 
Department of the Interior, and EPA to increase efficiency and 
effectiveness of CERCLA response actions at mixed-ownership sites, 
including mixed-ownership abandoned hardrock mines.
    Question 6b. Does EPA use Superfund monies on these sites, or does 
the money come from the Forest Service's budget?
    Answer. Both EPA and USDA seek first to have Potentially 
Responsible Parties (PRPs), if any, pay for the cleanup of abandoned 
hardrock mine sites. If no PRP exists, then the Forest Service seeks 
funding from the USDA Hazardous Materials Management Appropriation or 
internal Forest Service funds to accomplish CERCLA response actions at 
these sites. USDA does not have access to the Superfund and EPA does 
not spend Superfund monies for CERCLA response actions on National 
Forest System land.
    Question 7. Does the Forest Service impose any additional or 
different standards on uranium mining operations located on Forest 
Service lands than for other types of hardrock minerals?
    Answer. No. All hard rock mining reclamation plans are developed to 
comply with the environmental protection requirements described at 36 
CFR 228.8(g). However, each reclamation plan is based on site-specific 
conditions such as the specific minerals present and the presence of 
other affected resources.
    Question 8. What is the Forest Service's current policy regarding 
approvals required prior to the transfer, assignment or sale of a 
mining claim or millsite or plan of operations?
    Answer. The Forest Service has no authority to approve transfers, 
assignments of mining claims or millsites. The Bureau of Land 
Management is charged with these types of administrative actions. A 
mining claim with an approved plan of operation can be sold; however, 
the approved plan of operation does not automatically transfer to the 
new owner(s). The new operator must agree to the terms and conditions 
of the previously approved plan of operation and provide an appropriate 
financial assurance for the reclamation plan before they can begin to 
operate.
    Responses of Tony L. Ferguson to Questions From Senator Domenici
    Question 1. We had Mike Dombeck before this Committee in January, 
and in his answers to questions we asked at that hearing, he stated 
that the mechanism for land withdrawals is ``far too cumbersome to work 
well.'' In Montana, Rocky Mountain Front withdrawals began in 1999--can 
you tell us how long they took to complete? Did they include withdrawal 
from location and entry under the 1872 Mining Law?
    Answer. The Rocky Mountain Front Mineral withdrawal was initiated 
with the publication of the Notice of Proposed Withdrawal in the 
Federal Register on February 3, 1999. The land identified for 
withdrawal was segregated for two years to allow the Forest Service to 
complete the necessary documentation for a withdrawal. The Forest 
Service prepared an EIS to evaluate and disclose the effects of the 
withdrawal. The Notice of Availability for the Final Environmental 
Impact Statement was published in the Federal Register on December 15, 
2000 and the Record of Decision was signed by the Secretary of 
Agriculture on December 20, 2000. Public Land Order No. 7480 was 
published in the Federal Register on January 22, 2001, by the BLM. This 
Public Land Order formally withdrew the Rocky Mountain Front from the 
staking of claims under the 1872 Mining Law, as amended.
    Question 2. Is the reclamation of uranium mines unique in any 
respect?
    Answer. Each mine reclamation plan is unique and is based on site-
specific conditions such as the specific minerals present and the 
presence of other affected resources. Uranium is usually mined with 
conventional underground or surface mining techniques and reclaimed 
with conventional reclamation methods. Some mine waste piles may be 
capped with soil and an impermeable clay layer to prevent radon gas 
releases. This same technique is used to prevent water infiltration and 
toxic metal migration at other mines. All hard rock mining reclamation 
plans are developed to comply with the environmental protection 
requirements described at 36 CFR 228.8, regardless of the potential 
toxic materials involved.
                                 ______
                                 
     Responses of Bill Brancard to Questions From Senator Bingaman
    Question 1a. Turning now to the Mining Law Reform legislation, 
there seems to be consensus that a new hardrock AML program should be 
enacted. Does it make sense to pattern this after the Surface Mining 
Act coal AML program?
    Answer. The Surface Mining Control and Reclamation Act (SMCRA) 
provides a useful model of a single federal agency that administers the 
funding of state and tribal AML programs that have eligible AML 
programs. This provides for oversight, consistency and effective 
spending of funds.
    Question 1b. Should we allow states and tribes to have primacy to 
administer the program?
    Answer. States and tribes should be allowed an opportunity to 
obtain primacy to administer the program within their jurisdictions. 
First, there are a number of existing state and tribal AML programs 
that have the expertise and experience to efficiently administer the 
hard rock program. Second, states and tribes know where the AML 
problems are located and can prioritize the projects. Finally, the 
experience of states and tribes will allow for the most effective and 
appropriate remedies to be chosen for the variety of hard rock AML 
problems.
    Question 1c. What role do you believe historic mining should play 
in the allocation of AML funds among states? What role should current 
mining play?
    Answer. Funds should be allocated to address the AML problems. 
Because a significant number of hard rock AML problems are located in 
mining districts that played out decades (or centuries) ago, historic 
mining rather than current mining may be a better measure for 
allocation.
    Question 2. How do you think the scope of the hardrock AML problem 
compares to the coal AML problem?
    Answer. The absence of precise inventory data makes this question 
difficult, but I believe that, on a national scale, the hard rock AML 
problem is at least as large as the coal AML problem. Certainly in the 
Western U.S., the quantity and cost of the hard rock AML problems dwarf 
those of the coal AML problems. In New Mexico, we estimate that well 
over 90% of our 15,000 abandoned mine hazards are abandoned hard rock 
mines.
    Question 3. How does the State of New Mexico fund its AML work?
    Answer. New Mexico's AML program is funded by an annual grant from 
the Department of the Interior under SMCRA Title IV. That amount has 
been around $1.5 million a year. As a result of legislation passed by 
Congress in 2006, the grant will increase this year to approximately $4 
million. However, because of the Department of the Interior's 
interpretation of the new law, at least 75% of that grant can only be 
spent on coal AML projects. Previously, New Mexico had the flexibility 
to apply the grant to the state's highest priority needs, coal or non-
coal.
    Question 4. Your testimony states that most hardrock AML problems 
are on non-federal land. I take it that you think any AML program 
should allow funds to be expended on federal, state, tribal and private 
lands, correct?
    Answer. Yes. Not only are most hard rock AML problems are on non-
federal land, but many of the federal AML areas also overlap onto 
adjacent non-federal lands. Currently, New Mexico conducts AML projects 
on federal, state and private, but not tribal, lands.
    Question 5. Does the reclamation of abandoned uranium mine sites 
involve any unique concerns or additional action or expense compared to 
the reclamation of other hardrock mine sites?
    Answer. Yes. Unreclaimed areas of abandoned uranium mines, 
including mine waste piles, structures, equipment, trash, etc., often 
emit radiological contaminants and can create public health risks and 
contribute to contamination of ground and surface water. Reclamation of 
uranium mines generally involves the removal or burial of significant 
amounts of material, often at considerable cost. At other, older hard 
rock mine sites, many of these waste piles do not pose a threat to 
health, safety or the environment and can be left untouched and, in 
fact, are often retained for their historic value.
    In New Mexico, a large percentage of abandoned uranium mines are 
located in areas with checker boarded land ownership and split estates 
which create additional concerns of jurisdiction over, and access to, 
these sites.
    Question 6a. What funding source would be appropriate for a 
hardrock AML program? Does the State of New Mexico charge a royalty on 
hardrock minerals produced from state lands? At what rate? Are any of 
these revenues used for reclamation?
    Answer. The New Mexico Commissioner of Public Lands sets a royalty 
on hard rock minerals produced from state trust lands at the time a 
mineral lease is offered for auction. The royalty is a minimum of 2% of 
gross returns less the actual and reasonable transportation and 
smelting or reduction costs up to fifty percent of the gross returns. 
For ``special minerals'' (uranium, precious and semi-precious stones, 
rare earth minerals, etc.), the royalty is 5% of gross returns less 
deductions. See Part 19.2.2 NMAC. The royalties are deposited in the 
Land Grant Permanent Fund which is distributed to beneficiaries named 
in the New Mexico Constitution and Enabling Act.
    Question 6b. Is there a state severance tax? Please describe?
    Answer. New Mexico charges a severance tax and a ``resource excise 
tax'' on the extraction of hard rock minerals. The amounts vary by 
commodity. Both are based on gross returns, but the severance tax has 
significant adjustments to gross value. For instance, a copper producer 
pays a \1/2\% severance tax on 66 2/3 % of gross value with a further 
50% reduction for expenses. See NMSA 1978, Sections 7-26-1 et seq. A 
copper producer also pays a resource excise tax of \3/4\% of gross 
value with deductions only for any state or federal royalties. See NMSA 
1978, Sections 7-25-1 et seq.
    Question 6c. Are fees charged for the use of state lands by 
hardrock mining operations?
    Answer. The holder of a mineral lease for state trust lands will 
pay an annual rental (based on a per acre charge) and will pay any 
bonus that was offered to win the mineral lease at auction.
    Question 6d. Is there any kind of reclamation fee charged for 
mining?
    Answer. No. Hard rock mining operations are required to post 
financial assurance to cover the cost of reclaiming their disturbances 
but no fee for other reclamation is charged.
    Question 7. Do you think a federal nationwide AML fee charged on 
all hardrock production similar to the AML fee charged for coal makes 
sense?
    Answer. From my perspective, an AML fee on all hard rock production 
has several advantages. It should be a more robust and consistent 
funding source than relying solely on royalties. It is also more 
equitable, both within the industry and in comparison to coal AML 
funding. It is also consistent with the need to use hard rock AML 
funding for projects on both federal and non-federal land.
                                 ______
                                 
   Responses of Debra Struhsacker to Questions From Senator Domenici
    Question 1. You argue that Good Samaritan liability relief is one 
element that is missing from the AML ``tool kit.'' Certainly, 
supporting private acts in the public good is a laudable goal, but I am 
curious about the nature of these organizations. Can you give some 
examples of organizations that would undertake the cleanup of an AML 
site for public benefit? Tony Ferguson gave several examples of public/
private partnerships. How significant a role do you think that type of 
arrangement can play in AML clean-up?
    Answer. In the short time available to prepare our testimony and 
respond to these follow-up questions, NWMA was able to identify the 
public-private partnerships listed in Table 2 and described below. We 
are confident that additional research would likely reveal other 
examples of public-private partnerships involving a diverse group of 
stakeholders that have come together to achieve the mutually beneficial 
objective of improving public safety and the environment by reclaiming 
AMLs.
    Case histories of recent and past AML cleanup efforts clearly 
reveal a wide range of entities have undertaken AML reclamation 
projects for public benefit. These entities include hardrock mining and 
exploration companies, private companies outside of the mining sector, 
conservation groups, foundations, and nearby communities. As discussed 
below, at some sites, diverse stakeholder groups have formed coalitions 
that have engaged in AML reclamation activities to benefit the public.
    Based on the data collected to date, NWMA believes that public-
private partnerships could play an important role addressing the AML 
problem. As seen from the examples described below and shown in Table 2 
of our testimony, these partnerships harness the financial and creative 
resources of a group of diverse public-and private-sector stakeholders. 
Many of these partnerships have a proven track record of success in 
finding ways to overcome the serious liability barriers to voluntary 
cleanups. The dogged determination evident in the several examples of 
public-private partnerships described herein suggests to NWMA that 
enactment of Good Samaritan liability relief, coupled with measures to 
encourage future public-private partnerships, will certainly help 
accelerate the pace of progress in reclaiming AMLs.
    As the Committee contemplates policies to address the AML issue, we 
are reminded of that memorable moment in the movie Field of Dreams when 
Kevin Costner says ``Build it and they will come.'' NWMA believes this 
is an appropriate motto and mindset for future AML programs. Judging 
from the public-private AML reclamation partnership efforts identified 
to date, NWMA is confident that policies to encourage future public-
private partnerships will pay dividends by leveraging private-sector 
dollars and accelerating the pace of AML reclamation progress.
   private-and public-sector entities and partnerships involved with 
                            aml reclamation
    Mining companies have played the largest private-sector role in 
reclaiming abandoned and inactive mines. Some of the mining company-
funded projects have focused on improving old mine sites near or 
adjacent to the companies' active mining operations. These proximal 
cleanup efforts have capitalized upon the synergy of having a nearby 
active mining operation with trained reclamation specialists, heavy 
equipment operators, and available earth-moving equipment.
    Forty-nine (51 percent) of the 83 AML reclamation case histories in 
the 1998 National Mining Association study entitled ``Reclaiming 
Inactive and Abandoned Mine Lands--What is Really Happening'' (which is 
included as an attachment to our written testimony) involved mining 
company-funded reclamation projects. It should be noted that when this 
report was written ten years ago, avoiding Clean Water Act liability 
was already a widespread concern--just as it is today for would be Good 
Samaritans. Most of the reclamation projects described in the 1998 
report occurred at sites at which there was minimal CWA liability 
exposure. The 1998 report describes concerns about potential exposure 
to CERCLA and CWA liability at AML sites with drainage from underground 
workings as the major impediment to voluntary (i.e., Good Samaritan) 
AML cleanups at these types of sites.
    It should be emphasized that mining companies are not the only 
private-sector entity with an interest in reclaiming AMLs. Some of the 
AML reclamation projects listed in Table 2 of NWMA's testimony involve 
public-private partnerships at which some of the private-sector 
participants were not mining companies. The examples presented below 
describe several other public-private partnerships involving companies 
outside of the mining sector.
    For example, the Virginia Canyon AML reclamation project in 
Colorado, has involved the Clear Creek Watershed Association. Working 
under a Memorandum of Understanding, this broad-based private-public 
partnership is comprised of the towns of Black Hawk, Idaho Springs, 
Golden, Central City, Empire, Georgetown, and Silver Plume; the Central 
Clear Creek Sanitation District; the Black Hawk/Central City Sanitation 
District; and the St. Mary's Glacier Water and Sanitation District; 
Clear Creek County; Gilpin County; and Jefferson County; Clear Creek 
Skiing Corporation; Climax Molybdenum Company; Molson Coors Brewing 
Company; and Schwayder Camp.
    The AML reclamation effort at the Doctor Mine in Clear Creek 
County, Colorado demonstrates how a public-private partnership found a 
way to address the private-sector participant's CWA liability concerns. 
The Clear Creek Watershed Association used funds from the Clear Creek 
Watershed Foundation to evaluate numerous historic mine and mill sites 
both within and outside of the Clear Creek CERCLA boundaries. One such 
site located outside the boundaries was the Doctor Mine. This mine is 
located on USFS-administered lands in an area of high recreational use 
adjacent to Climax Molybdenum Company's Henderson Operations 
(Henderson), a large, underground molybdenum mine. The Doctor Mine--
which Henderson never owned or operated--was discharging mine drainage 
into the headwaters of upper Clear Creek.
    The Clear Creek Watershed Foundation contacted the USFS and 
Henderson regarding closure of the site. The mining company was 
interested in reclaiming this site as a ``good neighbor'' participant. 
However, due to the lack of a Good Samaritan provision in the CWA for 
voluntary AML reclamation projects, Henderson was hesitant to become 
directly involved, fearing that reclaiming this site would expose the 
company to CWA liability.
    The Clear Creek Watershed Foundation played a pivotal role in 
solving this liability concern by acting as a funding clearinghouse, 
funneling funds from Henderson to the USFS. Working together as 
partners, Henderson and the USFS agreed to split the reclamation costs. 
The partnership in conjunction with attorneys from EPA Region 8 and 
attorneys from the USFS and Henderson negotiated a ``comfort 
agreement'' that eliminated Henderson's liability concerns. It should 
be noted that EPA did not provide a formal ``Comfort Letter'' as 
allowed under CERCLA 107(d). The USFS designed and contracted the 
project, and work was completed in late 2006. Although significantly 
complicated by the lack of Good Samaritan liability relief provisions, 
the work was successfully completed in an efficient and effective 
manner that minimized taxpayer costs through the cost-sharing 
arrangement with Henderson.
    Trout Unlimited is an example of a conservation group with an 
exceptional track record of facilitating successful AML reclamation 
efforts at projects with liability concerns. The AML reclamation effort 
at the Pacific Mine in the American Fork Canyon between Salt Lake City 
and Provo, Utah is a very interesting example of a public-private 
partnership that found a creative way to fund the reclamation effort 
and to solve the liability exposure issue. As described in the 2007 US 
BLM/USFS report entitled ``A Decade of Progress Reclaiming Abandoned 
Mines''\1\, the parties involved with this site included Trout 
Unlimited, Snowbird Ski and Summer Resort (which is a nearby 
landowner), Tiffany & Co., EPA, USFS, and the State of Utah. Tiffany & 
Co. provided significant funding through a grant to Trout Unlimited to 
perform the cleanup work at this site. Through negotiations with EPA, 
Trout Unlimited obtained an Administrative Order of Consent that 
limited long-term liability and provided the legal authorization for 
cleanup work on private land. Both EPA and the State of Utah have 
recognized the successful reclamation effort at this site.
---------------------------------------------------------------------------
    \1\ The Committee is urged to look at the many other examples of 
the public-private partnership efforts to reclaim AML sites that are 
desribed in this BLM/USFS report.
---------------------------------------------------------------------------
    The willingness of Tiffany & Co. to provide funding for this 
reclamation effort is especially notable. Unlike many of the 
participants in the ongoing debate about amending the Mining Law and 
the problems associated with AMLs, Tiffany & Company has found a 
constructive way to participate in reclaiming an AML site. It is hoped 
that other groups will follow Tiffany & Co.'s leadership and step up to 
the plate by contributing funds to help reclaim AML sites.
    Trout Unlimited's involvement with the Pennsylvania mine and mill 
in Summit County, CO is another example of how this conservation group 
is taking a key leadership role in finding innovative ways to address 
the CWA liability impediment to voluntary AML cleanups. The 
Pennsylvania mine and mill is a large historic gold and silver 
operation that has been the focus of planned closure and clean-up 
activities by the State of Colorado and various Summit County interest 
groups for nearly 20 years. Drainage from this USFS-owned mine site has 
polluted Peru Creek for decades. The Colorado Division of Minerals and 
Geology (now Division of Reclamation, Mining, and Safety) and the 
Colorado Water Quality Control Division initiated a series of 
remediation projects at the mine mouth in the early 1990s, spending 
more than $170,000 to construct water treatment facilities. These 
initial efforts failed. When the courts ruled in 1993 that mine 
discharges were a point-source under the CWA requiring an NPDES permit, 
the state determined to take no further action at the site that might 
make them liable. The upper Peru Creek area was added to the EPA's 
Brownfield sites list in the early 2000s, but remediation of the 
Pennsylvania AML site still was not undertaken due to liability issues, 
much to the frustration of Summit County.
    Trout Unlimited has worked with Summit County and various 
stakeholders in an attempt to correct the situation and clean up the 
site. These attempts were thwarted when the Salazar-Allard Good 
Samaritan bill, which Trout Unlimited strongly supported, failed to 
pass in 2006. The ongoing lack of Good Samaritan provisions for 
voluntary AML reclamation efforts has led Trout Unlimited to search for 
creative ways to overcome the liability impediment. Trout Unlimited and 
other stakeholders are creating the nonprofit Snake River Water 
Foundation that may be involved with the clean up project and might 
assume long-term operations and maintenance at the site. The liability 
avoidance strategy at this site is based on the concept that this 
Foundation would have such limited assets that they would not be an 
attractive target for a CWA liability lawsuit. The Foundation has 
helped persuade the Colorado Department of Public Health and 
Environment and EPA to fund a treatment design and characterization 
study under a recently approved AOC.
    The Santa Fe New Mexico Chapter of Trout Unlimited is partnering 
with the NGO, Amigos Bravos, to close and clean up five AML sites on 
private land in New Mexico during 2008 and 2009. The USFS has agreed to 
provide cost and design estimates, and the Trout Unlimited--Amigos 
Bravos partnership will raise the funds for completion. Attorneys with 
EPA Region 6 also are working with the partnership to provide a degree 
of ``comfort'' relative to liability reduction.
    Another interesting example of a public-private sector partnership 
in New Mexico is the Cerrillos Park Coalition. This Coalition which has 
reclaimed the Cerrillos Mine Project in Santa Fe County (see Table 2 of 
NWMA's testimony) was formed to manage and maintain the Cerrillos Hills 
Historic Park. The park had AML sites that needed to be closed to 
eliminate public safety hazards. This coalition is a 501(c)(3) 
corporation that includes the following members and benefactors: BLM, 
National Park Service, several private native plant nurseries, several 
Santa Fe area banks, Eastman Kodak, Los Alamos National Lab, the local 
Sierra Club chapter, and several private individuals representing small 
businesses.
     Responses of Debra Struhsacker to Questions From Senator Wyden
    Question 1. Ms. Struhsacker in your testimony you stated that 
existing environmental regulations are adequate to protect human health 
and the environment. However, there are still cases where existing 
hardrock mining activities and abandoned mines continue to negatively 
impact human health and the environment. For instance, in my own state 
of Oregon, the Formosa Mine in Douglas County is a copper and zinc mine 
that operated in the early 1900s, then reopened in 1989 and operated 
until 1993. Acid mine drainage and metal contamination has eliminated 
about 18-stream miles of prime habitat for the threatened Oregon Coast 
coho salmon and steelhead. It seems to me that EPA, the BLM and other 
responsible regulatory agencies are failing to enforce existing mining 
and environmental regulations.
    Can you please explain why you think existing environmental 
regulations are adequate when addressing the negative public health and 
environmental impacts resulting from hardrock mining activities?
    Answer. The answer to this question is identical to the discussion 
on pages 3 and 4 of NWMA's written testimony entitled ``Modern Bankrupt 
Mines Should Not be Confused with Historic AMLs'' and my response to a 
similar question from Senator Tester during the hearing regarding the 
Zortman-Landusky mines in Montana. The Formosa Mine is another example 
of a mine like Zortman-Landusky, which was permitted during the earlier 
years of the state and federal regulatory and bonding requirements for 
hardrock mines. The environmental analysis and bonding requirements in 
those earlier years bear little resemblance to current requirements.
    Today, federal land management agencies require much more detailed 
environmental and engineering studies compared to what was standard 
practice 20 years ago. Consequently, BLM, the Forest Service, mine 
operators, and the public know a great deal more about the potential 
environmental impacts associated with a proposed mine. Additionally, 
the bonding requirements for mines today are much more comprehensive 
and stringent than 1980s- and 1990s-vintage bonds.
    In order to respond with some level of specificity to this question 
about the Formosa Mine, NWMA contacted the Oregon Department of Geology 
and Mineral Industries (DOGAMI) to learn more about the Formosa Mine. 
According to DOGAMI, the Formosa Mine site covers about 76 acres on 
Silver Butte in Douglas County near Riddle, Oregon. It was first 
operated as a copper-zinc mine from 1910-1937 after which it was 
abandoned and became the source of contaminated waters that discharged 
into Middle Creek and the South Fork of Riddle Creek (the headwaters of 
the Umpqua River). Mine drainage adversely affects some 13 to 18 miles.
    In 1984, a Canadian mining entrepreneur consolidated the patented 
and unpatented claims and some fee lands and initiated exploration 
activities. Access to the main portal was on BLM land, but no permit 
was required at this stage. Based on favorable exploration results, 
Formosa Exploration, Inc. (FEI) decided in 1989 to mine and mill 
copper, zinc, and thorium ores at a rate of around 400 ton per day.
    FEI secured the necessary permits from DOGAMI to build and operate 
the mine and mill. The company obtained a state approved reclamation 
and closure plan, and provided a $500,000 bond to the State. Although 
access to the main portal was across BLM land, BLM did not require any 
federal permits. The reclamation plan filed with and approved by DOGAMI 
included removal of waste from the creek, encapsulation of waste 
materials on-site, backfilling of openings with mine waste, and adit 
bulkheads. DOGAMI strongly believed this plan would work. FEI was very 
willing to accommodate DOGAMI's desires to address pre-existing 
environmental problems at this old mine site.
    In late 1992, state inspectors discovered that FEI was not 
following its mine plan, was producing more than permitted, and had 
dumped waste materials into the creek. DOGAMI issued a Cease and Desist 
order, closed the operation, and required the company to increase the 
reclamation bond to $1 million. Reclamation began in 1994. When it was 
evident that the closure plan was not working, FEI liquidated, leaving 
the state and BLM with the closure and remediation.
    A great deal has changed since this scenario unfolded. Back when 
the Formosa Mine secured its operating permit from the State of Oregon 
and provided the reclamation bond, DOGAMI's regulations capped 
reclamation bonding requirements at $10,000 per acre. Today reclamation 
bonds for operations that do not use cyanide are capped at $100,000 per 
acre and DOGAMI is in the process of trying to remove this cap and 
change the regulations to require bonding for actual calculated costs. 
Oregon has additional bonding requirements for operations that use 
cyanide in their processing circuits.
    The problems that occurred at the Formosa Mine were due to 
shortcomings in the State's regulatory and bonding requirements in the 
late 1980s when the permit applications for this project were 
submitted, evaluated, and approved. The State of Oregon has eliminated 
these shortcomings and is in the process of increasing its bonding 
authority for projects that do not use cyanide.
    Because the mining activities at the Formosa Mine did not take 
place on public lands, it is not appropriate to extrapolate the facts 
at this site to mining projects on federal lands. However, NWMA's 
testimony describes examples of similarly under-bonded sites on public 
lands that were permitted in the 1980s and 1990s at which taxpayer 
dollars are being used to reclaim the sites and remediate environmental 
problems.
    As discussed in NWMA's testimony, federal regulations and bonding 
requirements have changed substantially since these mines were 
permitted. Table 1 presents a partial list of the environmental 
analysis and bonding requirements applicable today to proposed mining 
operations on public lands. These current requirements subject mining 
proposals to a much more rigorous analysis and much higher financial 
assurance requirements than the State of Oregon required back in the 
late 1980s when the Formosa Mine was permitted or in the late 1970s--
early 1980s when the State of Montana and BLM initially permitted the 
Zortman Landusky Mine.
    In evaluating the question of whether a situation like the Formosa 
Mine or Zortman-Landusky could happen again, it is important to realize 
that the substantial changes made to the reclamation bonding 
requirements were designed specifically to eliminate the problems and 
shortfalls that occurred at mines where the operator either went 
bankrupt or abandoned the site. Thus, bonds today include a surcharge 
of roughly 40 percent to provide sufficient resources for state and/or 
federal agencies to implement the reclamation plan and hire third-party 
contractors to perform the reclamation work. Additionally, federal 
regulators now have the authority to require trust funds or other 
funding for long-term water quality monitoring and site management to 
ensure that there will be funding for both expected and unknown future 
site requirements.
    As a result of these much stricter requirements, NWMA is confident 
that a different outcome would result at the Formosa Mine if this mine 
proposal were being evaluated and permitted today. Similarly, had these 
requirements been in place many of the water quality problems that have 
developed at some 1970s-and 1980s-vintage mines would not have occurred 
because BLM and the Forest Service would have required dramatically 
different mine waste testing and management programs than were the norm 
20 or 30 years ago.
    Given the substantial differences between today's environmental 
analysis and bonding requirements compared to those in the 1980s and 
1990s, NWMA strongly believes that the current regulatory and bonding 
framework for hardrock mining on public lands does a good job of 
protecting public health and safety. Furthermore, we wish to emphasize 
that problems resulting from mines permitted and developed in the 
1980s--1990s timeframe--which is early in the development of the 
regulatory and bonding requirements for mining--should not be viewed as 
models of what will happen at mines today or in the future. Many of the 
problems at these older sites developed due to shortcomings in the 
regulatory and bonding programs. As discussed above, state and federal 
regulators have corrected these shortcomings.
                                Table 1
   partial list of the current environmental analysis and financial 
 assurance requirements for proposed mining operations on public lands
           environmental analysis and protection requirements
   Detailed waste characterization tests are now required to 
        assess the potential for acid generation and metals leaching 
        from the materials to be mined.

    --Mined materials with the potential to generate acid or leach 
            metals must be managed in ways to eliminate or reduce 
            potential acid generation and metals leaching.
    --Mine waste storage facilities (i.e., waste rock and tailings 
            storage areas) must be designed to manage seepage from acid 
            generating or metals leaching mine wastes to prevent 
            environmental degradation.

   Detailed hydrogeological and predictive modeling studies are 
        now required to assess the potential for impacts to ground 
        water and surface water resources.

    --Adequate baseline studies are required to identify pre-project 
            surface water and groundwater quality conditions against 
            which project impacts can be measured.
    --Detailed monitoring and reporting requirements must be designed 
            to verify the mine is performing in compliance with all 
            project permits.
    --Operators must update the project plan to reflect on-the-ground 
            conditions and/or to make any substantial changes from the 
            original project.

   Operators must provide additional mitigation, financial 
        assurance, or both in the event that project plan is modified.
   The regulations now specify a minimum frequency of site 
        inspections and provide additional enforcement mechanisms.
                    financial assurance requirements
   Bonds are now based on detailed reclamation cost 
        calculations that use third-party contractor costs based on 
        Davis-Bacon wage rates;
   Bonds now include up to a 40 percent surcharge for agency 
        costs to manage the reclamation effort;
   Bonds for some mines now include long-term financial 
        assurance if site-specific conditions suggest that long-term 
        maintenance or monitoring may be needed;
   Bonds now include costs to manage the process fluid 
        inventory (i.e., fluids in ponds and tailings impoundments) 
        that must be dealt with before a site can be closed and 
        reclaimed; and
   Bond amounts are reviewed on a regular basis and adjusted as 
        necessary to reflect inflation and site conditions.

    Question 2. Royalties on existing and new hardrock mining 
activities as well as the percentage and type (e.g., net smelter, net 
or gross production) of royalty were discussed in the hearing. A 
royalty will produce real revenue for the Treasury, to repair some of 
the costs and damage left by past hardrock mining activities and/or to 
reduce the deficit. Under the 1872 Mining Law, billions of dollars in 
hardrock minerals have been mined on more than 350 million acres of 
public lands. This industry owns gold, silver, and other precious 
metals and minerals beneath an estimated 191,391 acres of U.S. public 
land in Oregon that's about the size of Crater Lake National Park. 
These resources are worth millions of dollars a year and have been 
acquired for very little money and there is no reimbursement or 
royalties paid to the federal government for gold, silver and other 
precious metals taken from public. It is time for the mining industry 
to start paying their fair-share for the use of our public lands.
    Can you please explain why you support a royalty on only new mines 
and not those that are already existing?
    Answer. NWMA has supported a net royalty on production from post-
enactment claims (i.e., claims located and developed after a new Mining 
Law bill with a royalty is enacted) for many years. There are two 
reasons why the royalty must be prospective and not retroactive: First, 
a retroactive royalty like the royalty proposed in H.R. 2262 would 
impose new and substantial costs on existing mines that would likely 
render many currently operating mines uneconomic, forcing them to close 
prematurely. Secondly, imposing a royalty on existing operations would 
expose the federal government to substantial takings claims. These two 
problems with a retroactive royalty are discussed below. We conclude by 
explaining why H.R. 2262 is counterproductive to the goal of creating a 
royalty-funded AML reclamation fund and why this fund does not need to 
be built instantaneously.
Premature Mine Closures
    Most hardrock mining operations have historically operated with low 
margins. Currently, operating costs are at an all-time high due largely 
to soaring fuel and energy costs. Thus, even though mineral commodity 
prices are high, the operating margin for most hardrock mines remains 
small. Adding another substantial cost--like a four percent gross 
royalty--will make many currently operating mines unprofitable. Unlike 
coal and vertically integrated oil and gas producers, hardrock mineral 
producers cannot pass increased costs on to mineral consumers, whether 
the new costs are associated with rising fuel and energy costs or a new 
royalty. Those mines rendered unprofitable due to the imposition of a 
federal royalty will have to close prematurely.
    Premature mine closures are not in the public's best interest for 
several reasons: First, closing a mine before the orebody is depleted 
leaves minerals in the ground and wastes valuable mineral resources. 
Because the demand for minerals will likely remain the same (and 
probably will increase), other sources of these minerals--including 
foreign sources--will have to supply the needed minerals. Increasing 
the Nation's reliance on foreign minerals is not good public policy. It 
will weaken our economy and threaten our national security.
    Secondly, premature mine closures may result in unnecessary 
environmental impacts if new mines have to be developed to supply the 
minerals that could otherwise have been produced at mines that could 
operate at a profit prior to imposition of a retroactive royalty. 
Another environmental impact associated with obtaining minerals from 
foreign sources is that more hydrocarbon-based fuels will have to be 
consumed to ship the foreign minerals to the U.S. These foreign-mined 
minerals will have a significantly larger carbon footprint than 
minerals produced from U.S. mines. They may also be produced from mines 
with lower environmental and health and safety standards compared to 
U.S. mining operations.
    Finally, high-paying jobs are lost when a mine closes prematurely 
due to imposition of a cost that renders the mine unprofitable. This is 
likely to happen if a royalty is imposed on many currently operating 
low-margin mines. The resulting loss of mining jobs and the closing of 
businesses that supply goods and services to the mines will have far-
reaching ramifications in mining states and communities where mining-
driven economic engines will slowly grind to a halt as mining jobs and 
dollars disappear. The imposition of a retroactive royalty will cause 
dramatic socioeconomic hardships in rural mining communities--but the 
adverse effects will not be confined to rural mining areas. Mining 
states will soon feel the impact of the job and revenue losses as local 
communities are no longer self sufficient and must look to state 
coffers for financial support.
Takings Exposure
    Imposing a royalty on existing mines will expose the federal 
government to takings lawsuits. Last November the Bush Administration 
issued a Statement of Administration Policy (see Exhibit A) that 
clearly opposes the retroactive royalty scheme proposed in H.R. 2262 
because it is unconstitutional and will create compensable takings 
claims:

          While the Administration supports the establishment of a 
        production payment system, the Administration has serious 
        concerns about the royalty structure provided in Title I of the 
        bill. The royalty structure in H.R. 2262 will likely generate 
        Takings Clause challenges because it fails to take into 
        consideration property rights relating to properly maintained 
        claims established prior to enactment of the bill. For any 
        claimant who has a vested property interest prior to 
        production, application of a royalty on production could result 
        in a claim for a compensable taking under the Constitution.'' 
        (November 1, 2007 Statement of Administration Policy.)

    NWMA appreciates and agrees with the Administration's position and 
believes that an amended Mining Law should minimize future takings 
claim which would potentially be very costly for U.S. taxpayers
    Last year, NWMA sought a legal opinion from the Washington, DC 
office of Beveridge & Diamond to analyze whether the retroactive 
royalty scheme in H.R. 2262 to apply a new royalty on existing valid 
mining claims constitutes an unlawful taking of the mining claimants' 
property interests in violation of the Fifth Amendment to the 
Constitution, or raises any other constitutional infirmity. This 
opinion, henceforth referred to as the ``Takings Opinion'' which is 
attached as Exhibit B, clearly concludes that several legal claims 
would be available to any plaintiff desiring to challenge a retroactive 
royalty, like the scheme proposed in H.R. 2262:

          Congress cannot, on a whim, constitutionally create and 
        appropriate to itself a royalty interest in valid mining claims 
        that it freely granted away under the mining laws specifically 
        without reserving such a right. Since H.R. 2262 would 
        accomplish precisely this objective, it will likely not 
        withstand a court challenge to its constitutionality.'' 
        (Takings Opinion, page 20.)

    The Takings Opinion presents a detailed analysis of the property 
rights appurtenant to unpatented mining claims with a discovery of a 
valuable mineral resource (i.e., valid claims). The Takings Opinion 
also discusses takings case law and demonstrates how government-
sponsored actions that disrupt investment-backed expectations expose 
that government to takings claims. In the case of existing mines, 
imposition of a retroactive royalty would clearly upset the mine plan 
and other business and economic parameters that the operator used to 
determine the mine could be developed and operated profitably.
    Key findings discussed in the Takings Opinion are summarized below:

   Congress unquestionably has the right to condition future 
        grants of property interests on the public lands for mining 
        claims located after a new law is enacted, if it decides that 
        such a royalty obligation is warranted.

    --However, H.R. 2262 also imposes this new royalty obligation on 
            production from existing mining claims that are valid on 
            the date of enactment, including in particular producing 
            mining claims with approved operations permits--this is a 
            legislative/regulatory taking.

   A valid mining claim under the Mining Law of 1872 creates 
        property rights for the claim holder. Best v. Humboldt Placer 
        Mining Co., 371 U.S. 334, 336 (1963).

    --The courts have recognized that valid unpatented mining claims 
            are exclusive possessory interests in federal land for 
            mining purposes which entitle claim holders to extract and 
            sell minerals ``without paying any royalty to the United 
            States as owner.'' Union Oil Co. v. Smith, 249 U.S. 337, 
            348-349 (1919).
    --As recently as 1996, the Federal Circuit reached the same 
            conclusion, stating further that ``[e]ven though title to 
            the fee estate remains in the United States, these 
            unpatented mining claims are themselves property protected 
            by the Fifth Amendment against uncompensated takings.'' 
            Kunkes v. United States, 78 F.3d 1549, 1551 (Fed. Cir. 
            1996).

   Under existing law, the claimant of a valid unpatented 
        mining claim has a protected property right in the full value 
        of the minerals it extracts from its mining claim.

    --A royalty interest, which is commonly defined as a right to a 
            fractional share of the minerals produced from the land, 
            also is a property interest. Shell Oil Co. v. Babbitt, 920 
            F. Supp. 559, 564-65 (D. Del. 1996).

   The requirement in H.R. 2262 to pay the U. S. a 4% or 8% 
        royalty on the gross value of the minerals produced from 
        existing valid unpatented mining claims is clearly a direct 
        legislative/regulatory taking of that property interest from 
        the mining claimant without compensation in violation of the 
        Fifth Amendment. Lucas v. S.C. Coastal Council, 505 U.S. 1003 
        (1992); Penn Central Transp. Co. v. New York City, 438 U.S. 104 
        (1978).

    --The royalty burden proposed in H.R. 2262 also may render some 
            existing valid mining claims uneconomic or cause operations 
            to terminate prematurely because of the additional cost 
            burden.

   The retroactive imposition of the H.R. 2262 royalty 
        obligation on valid mining claims that exist on the date of 
        enactment would deprive mining claimants of their due process 
        rights under the Fifth Amendment. Landgraf v. Usi Film Prods., 
        511 U.S. 244 (1944).

    The arbitrary imposition of significantly different royalty rates 
on existing valid mining claims depending upon whether operations on a 
claim are permitted and producing commercial quantities on the date of 
enactment is a denial of Equal Protection for those mining claimants 
required to pay a higher royalty than their competitors.

    --As a general rule, Congress may not treat similarly situated 
            persons differently. Romer v. Evans, 517 U.S. 620, 631 
            (1996).
The AML Reclamation Fund Does Not Need to Be Built Instantaneously
    As discussed in NWMA's testimony, the AML reclamation glass is not 
empty. Good progress is being made in reclaiming AMLs despite the lack 
of a royalty-funded AML reclamation program. To be sure, more progress 
could be made more quickly with additional funding, but AML reclamation 
progress will continue to be made during the several years following 
enactment of a prospective royalty as new mines are developed and begin 
to generate royalties to help fund AML reclamation. Although it will 
take several years before new mines will start to generate royalties, 
in the interim, the current pace of AML reclamation progress described 
in NWMA's testimony and in statements from other witnesses at the 
hearing is likely to continue.
    A fundamental point that must be clearly understood is that 
Congress cannot enact a Mining Law bill like H.R. 2262 which contains 
many onerous provisions, uncertainties, and disincentives and at the 
same time expect that new mines will be developed and will generate 
royalties to fund AML reclamation. H.R. 2262 and a royalty-funded AML 
reclamation program are mutually exclusive.
    An amended Mining Law that fosters a stable business climate and 
encourages responsible mineral exploration and development is essential 
to creating a royalty-funded AML reclamation program. This is the only 
way in which an amended Mining Law will generate significant royalties 
in the future.
    The best way to accelerate the pace of AML reclamation progress 
during the interim between enactment of an amended Mining Law and 
bringing new royalty-paying mines on line, would be to also enact Good 
Samaritan liability relief for entities that undertake voluntary AML 
cleanup efforts. As explained in NWMA's written and verbal testimony, 
providing Good Samaritan liability relief is critical to accelerating 
the pace of AML reclamation progress. Therefore, enactment of a Mining 
Law bill that includes Good Samaritan liability relief will likely 
jumpstart a number of AML cleanup efforts that can be ongoing while 
royalty revenues are building the AML reclamation fund.
    It will also take the state and federal AML programs a couple of 
years to ramp up in order to be able to plan for and efficiently use 
increased AML reclamation funds. Additional staff will need to be hired 
and more AML contractors will need to be identified and retained.
    Thus, the AML fund does not have to be funded instantaneously in 
order to continue to make AML cleanup progress. It can be funded 
incrementally through royalty contributions from new mines. While the 
fund is growing, existing AML cleanup programs will continue to achieve 
substantial progress.
    Given the public policy benefits of minimizing future takings 
lawsuits and the fact that AML reclamation progress will continue 
without having an instantly available federal reclamation fund, NWMA 
supports a prospective net royalty on new mines and opposes any royalty 
scheme that would jeopardize the economic viability of existing mines 
or expose the federal government to takings lawsuit
Potential Oregon Mine Land Data Discrepancy
    Finally, NWMA wishes to point out that Senator Wyden's office may 
have some inaccurate information about the number and acreage of mining 
claims in Oregon. Specifically, we are confused about the following 
statement in Senator Wyden's second question'' ``This industry owns 
gold, silver, and other precious metals and minerals beneath an 
estimated 191,391 acres of U.S. public land in Oregon that's about the 
size of Crater Lake National Park.''
    Because there is relatively little hardrock mining activity in 
Oregon, this acreage strikes us as possibly being too large. To help 
address our confusion, we obtained the information shown in Table 2 
(see the following page) about the number of active mining claims and 
acreage of patented lands in Oregon from the Environmental Working 
Group's (EWG's) website (www.ewg.org).
    To add to our confusion, NWMA is unaware that anyone has discovered 
``gold, silver, and other precious metals and minerals beneath an 
estimated 191,391 acres of U.S. public land in Oregon.'' If this were 
the case, it is highly likely that there would be hardrock mining in 
Oregon. As shown in Table 2, Oregon has no producing hardrock mines.
    Finally, the statement ``billions of dollars in hardrock minerals 
have been mined on more than 350 million acres of public lands,'' is 
also confusing. According to the Minerals Information Institute, only 
approximately 6 million acres of land in the U.S., both public and 
private lands, (not 350 million acres)have been used for mining.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      
      Exhibit A--Statement of Administration Policy, November 2007
         h.r. 2262--hardrock mining and reclamation act of 2007
                 (rep. rahall (d) wv and 62 cosponsors)
    The Administration supports the environmentally responsible 
development of hardrock minerals on public lands and would like to work 
with Congress to update the Mining Law, including the authorization of 
production payments and administrative penalties. The Administration 
also believes that any legislative solution must be accomplished in a 
way that provides a reasonable level of certainty to the industry while 
pursuing goals to protect our environment. The Administration believes 
that royalty provisions should be prospective, should avoid 
constitutional concerns, and should be set at a level that does not 
threaten the continued, reliable domestic mineral production on which 
this Nation relies.
    The Administration strongly opposes H.R. 2262 because the bill 
imposes a royalty on claims where property rights already have been 
vested, could reduce the continued domestic production of hardrock 
minerals, restates and expands some environmental standards and 
permitting requirements that are unnecessary and redundant, and 
establishes new public participation standards rather than utilizing 
existing and well-established processes to engage the public. If H.R. 
2262 were presented to the President in its current form, his senior 
advisors would recommend he veto the bill.
    While the Administration supports the establishment of a production 
payment system, the Administration has serious concerns about the 
royalty structure provided in Title I of the bill. The royalty 
structure in H.R. 2262 will likely generate Takings Clause challenges 
because it fails to take into consideration property rights relating to 
properly maintained claims established prior to enactment of the bill. 
For any claimant who has a vested property interest prior to 
production, application of a royalty on production could result in a 
claim for a compensable taking under the Constitution.
    In addition, Title I eliminates the issuance of patents for 
applications filed after September 30, 1994. Eliminating patenting 
authority has the potential to expand Federal liability by requiring 
that the Federal government retain ownership of all lands mined under 
the bill.
    Title III restates and expands existing environmental standards and 
permitting requirements. The Administration finds some of these 
provisions unnecessary and redundant. For example, the non-impairment 
standard in Section 309 greatly expands the scope of existing 
environmental requirements and could result in an increase in 
litigation. Hardrock mining operators on public lands already are 
required to comply with a number of state and Federal statutes 
including the Clean Water Act, Clean Air Act, Endangered Species Act, 
Federal Land Policy and Management Act (FLPMA), National Environmental 
Policy Act (NEPA), and National Historic Preservation Act. The 
Administration believes that existing statutes and related regulations 
provide sufficient authority to regulate mining operations.
    Through NEPA, FLPMA, and other land management statutes, Congress 
also established a role for members of the public and structured a 
process by which the public could provide input about proposed 
governmental actions. This structured process has served the government 
and the public well. Section 504 in Title V of H.R. 2262, by contrast, 
would give an individual the ability to unduly block Federal actions 
outside these well established public participation processes.
    Finally, Section 506 should be revised to give the Department of 
the Interior and Department of Justice sufficient authority and 
flexibility to properly enforce the law.
    The Administration looks forward to working with the Congress to 
address these and other concerns as the legislative process moves 
forward.
 Exhibit B--Beveridge & Diamond October 2007 Legal Opinion on Takings 
                                to NWMA
Whether H.R. 2262's Imposition of a Royalty on Mineral Production From 
      Existing Valid Unpatented Mining Claims Is Unconstitutional
                               memorandum
I. Introduction and Summary
    On October 23, 2007, the Committee on Natural Resources of the 
House of Representatives reported H.R. 2262, entitled the ``Hardrock 
Mining and Reclamation Act of 2007.''\2\ If enacted, this legislation 
would significantly modify many of the provisions and principles of the 
Mining Law of 1872, 30 U.S.C. Sec. 21 et seq., under which citizens may 
enter upon the public lands to locate mining claims and produce 
minerals such as gold, silver, copper, and gypsum. For over 135 years, 
this law has not required the owner of a valid unpatented mining claim 
to pay any royalty to the United States for the right to possess and 
use the land for mining purposes or to extract and sell minerals 
therefrom. H.R. 2262 would change that long-established standard by 
imposing a royalty on production from mining claims.
---------------------------------------------------------------------------
    \2\ Our references to H.R. 2262 (which currently has no legal 
effect) are meant to be to whatever version of this bill eventually may 
be enacted following consideration by Congress.
---------------------------------------------------------------------------
    For mining claims located after the new law's enactment, Congress 
unquestionably has the right to condition future grants of property 
interests on the public lands if it decides that such a royalty 
obligation is warranted. However, H.R. 2262 also would impose this new 
royalty obligation on production from existing mining claims that are 
valid on the date of enactment, including in particular those mining 
claims with approved operations permits that currently are in 
production.
    You have asked for our analysis whether H.R. 2262's retroactive 
application of a new royalty burden on existing valid mining claims 
constitutes an unlawful taking of the mining claimants' property 
interests in violation of the Fifth Amendment to the Constitution, or 
raises any other constitutional infirmity. We have reviewed cases 
construing the rights of a mining claimant under the Mining Law 
(including some that date back to the late 1800s, and that are still 
good law!). For the reasons explained herein, we believe courts with 
jurisdiction over these issues will conclude that H.R. 2262's new 
royalty obligation on existing mining claims for which validity can be 
established on the date of enactment constitutes a taking of those 
mining claimants' property rights in violation of the Fifth Amendment. 
We also think that the retroactive imposition of a royalty on existing 
valid mining claims is a denial of due process. Further, we believe 
that the disparate royalty rates imposed on existing valid mining 
claims, depending on whether there is a currently permitted mining 
operation on the claim, constitutes a denial of the constitutional 
right to Equal Protection.
    A valid mining claim under the Mining Law of 1872 creates property 
rights for the claim holder. Best v. Humboldt Placer Mining Co., 371 
U.S. 334, 336 (1963). The courts have recognized that valid unpatented 
mining claims are exclusive possessory interests in federal land for 
mining purposes which entitle claim holders to extract and sell 
minerals without paying any royalties to the Government. Union Oil Co. 
v. Smith, 249 U.S. 337, 348-349 (1919) (``If he locates, marks, and 
records his claim in accordance with [the Mining Law] and the pertinent 
local laws and regulations, he has . . . an exclusive right of 
possession to the extent of his claim as located, with the right to 
extract the minerals, even to exhaustion, without paying any royalty to 
the United States as owner, and without ever applying for a patent or 
seeking to obtain title to the fee . . . '') (emphasis added). The 
Federal Circuit has reached the same conclusion, and stated further 
that ``[e]ven though title to the fee estate remains in the United 
States, these unpatented mining claims are themselves property 
protected by the Fifth Amendment against uncompensated takings.'' 
Kunkes v. United States, 78 F.3d 1549, 1551 (Fed. Cir. 1996).
    Therefore, under existing law, the claimant of a valid unpatented 
mining claim has a protected property right in the full value of the 
minerals it extracts from its mining claim. A royalty interest, which 
is commonly defined as a right to a fractional share of the minerals 
produced from the land, also is a property interest. Shell Oil Co. v. 
Babbitt, 920 F. Supp. 559, 564-65 (D. Del. 1996). Thus, by requiring a 
claimant to pay the United States a royalty of between 4% and 8% of the 
gross value of the minerals produced from an existing valid unpatented 
mining claim, H.R. 2262 plainly and directly effects a legislative/
regulatory taking of that property interest from the mining claimant 
without compensation in violation of the Fifth Amendment. Lucas v. S.C. 
Coastal Council, 505 U.S. 1003 (1992); Penn Central Transp. Co. v. New 
York City, 438 U.S. 104 (1978). Further, because the imposition of the 
royalty obligation is on mining claims that already are in existence on 
the date H.R. 2262 is enacted, the effect of the new law would be 
retroactive, depriving the mining claimants of their due process rights 
under the Fifth Amendment. Landgraf v. Usi Film Prods., 511 U.S. 244 
(1944). Finally, because H.R. 2262 arbitrarily imposes significantly 
different royalty rates on the class of existing valid mining claims 
depending upon whether operations on a claim are permitted and 
producing commercial quantities on the date of enactment, it amounts to 
a denial of Equal Protection for those mining claimants required to pay 
a higher royalty than their competitors. As a general rule, Congress 
may not treat similarly situated persons differently. Romer v. Evans, 
517 U.S. 620, 631 (1996).
    Because of your urgent need for this Memorandum, our legal analysis 
of the constitutional issues at this time is necessarily abbreviated. 
We also provide only enough background on the operation of the Mining 
Law of 1872, and the property interests created thereunder, to 
sufficiently put the current issues into proper perspective.
II. Background
            A. The Mining Law of 1872
    The Mining Law of 1872 is unlike other more recent federal mineral 
disposition statutes, such as the Mineral Leasing Act of 1920, 30 
U.S.C. Sec.  181 et seq., where Congress authorizes issuance of leases 
to the highest bidder and conditions the lease at the time of issuance 
with the obligation to pay a royalty to the United States based on the 
value of the minerals produced under that lease. Instead, to encourage 
mineral development, the Mining Law is uniquely self-executing in that 
a citizen may enter upon much of the public lands and explore for 
minerals. 30 U.S.C. Sec. 22. Very briefly, if a person finds a mineral 
deposit on public lands open to location, the person may ``locate'' a 
mining claim by following prescribed procedures. If the locator then 
``discovers'' a ``valuable'' mineral deposit,\3\ then the mining 
claimant has a valid mining claim which it can maintain by paying an 
annual maintenance fee and complying with other procedural 
requirements. Under the Mining Law the claimant also could obtain a 
patent (fee simple title) to its valid mining claim by meeting 
additional procedural requirements and paying a per acre fee, in which 
case any remaining United States ownership interest in the property 
within the mining claim would end. 30 U.S.C. Sec. 29. However, it is 
unnecessary for a claimant to apply for a patent in order to preserve 
its rights to a claim; it may continue to extract locatable minerals 
until the claim is exhausted without ever having obtained full legal 
title from the United States. Union Oil Co., 249 U.S. at 348-349. Since 
1994, Congress has enacted moratoria on the Department of the 
Interior's acceptance of new patent applications, and Section 101 of 
H.R. 2262 would permanently end that practice under the Mining Law.
---------------------------------------------------------------------------
    \3\ In Castle v. Womble, 19 L.D. 455, 457 (1894), the Department of 
the Interior declared that a mining claimant meets the discovery 
requirements of the Mining Law when that person finds minerals and the 
mineral evidence would justify a person of ordinary prudence in 
expending additional labor and means and would give the claimant a 
reasonable prospect of success in developing a valuable mine. The 
Department's language in Castle, commonly referred to as the prudent 
person test, was quoted with approval by the Supreme Court in Chrisman 
v. Miller, 197 U.S. 313, 322-23 (1905), and has since been accepted as 
the standard for determining whether there has been a discovery of a 
valuable mineral deposit. This test has been refined to require the 
claimant to show that as a present fact, considering historical price 
and cost factors and assuming they will continue, there is a reasonable 
probability that the mineral can be extracted and marketed at a profit. 
U.S. v. Coleman, 390 U.S. 599, 602-03 (1968).
---------------------------------------------------------------------------
    While the legal issues surrounding the concepts of location, 
discovery and patenting are complex and would require extensive 
analysis, those issues are not relevant here. For purposes of this 
Memorandum, we will only consider the legal impacts of H.R. 2262's 
imposition of a royalty on existing unpatented mining claims that are 
valid as of the date of enactment, which include many mining claims 
subject to an existing plan of operations, because such claims are the 
property of the claimant in the ``fullest'' sense of that term. Wilbur 
v. United States, 280 U.S. 306, 316 (1930). However, many existing 
valid mining claims are not currently subject to production.\4\
---------------------------------------------------------------------------
    \4\ This Memorandum's focus on mining claims for which validity can 
be established on the date of enactment is not meant to suggest that 
the same legal/constitutional infirmities analyzed herein do not also 
apply to mining claims whose validity cannot be established as of that 
date. If necessary, we will provide that analysis at a later date. We 
note, however, that if there is a difference in enforceability of the 
royalty obligations of H.R. 2262 based on the date a mining claim's 
validity can be established, it raises serious concerns about the 
potential need for validity determinations for thousands of mining 
claims to determine their status for royalty payment purposes. The 
limited scope of this analysis also is not intended to suggest that 
there are no other legal or constitutional issues associated with H.R. 
2262's various provisions regarding patenting and other matters.
---------------------------------------------------------------------------
            B. H.R. 2262
     H.R. 2262, if enacted, would change many of the principles, 
practices, and provisions of law related to the Mining Law of 1872. 
Many of the new provisions would simply codify existing requirements. 
However, several of the new provisions are very controversial because 
of the burdens they would impose on mining claimants.
    One major impetus for Congress to adopt changes to the Mining Law 
is to impose a royalty on production of locatable minerals from mining 
claims. Virtually all other minerals produced from public lands, 
including oil, gas, coal, geothermal resources, and mineral materials, 
are subject to the requirement that the producer/lessee pay the federal 
government a royalty based on the value of the production. See 30 
U.S.C. Sec. Sec. 207, 226; 43 U.S.C. Sec. 1337; 30 U.S.C. Sec.  1001 et 
seq. However, since 1872, locatable minerals are not subject to a 
royalty.
    Under Section 102(a)(1) of H.R. 2262, production of all locatable 
minerals from any mining claim ``shall be subject to a royalty of 8 
percent of the gross income from mining.'' However, under Section 
102(a)(2), the royalty is only 4 percent for any federal land that--

          (A) is subject to an operations permit on the date of the 
        enactment of this Act; and
          (B) produces valuable locatable minerals in commercial 
        quantities on the date of enactment of this Act.

    This Memorandum does not address issues regarding the merits of the 
royalty provisions in H.R. 2262 as compared to other potential royalty 
options. Also, the standards established in paragraph (B), such as the 
concept of ``commercial quantities,'' raise many questions that we are 
not addressing at this time. We will proceed with our analysis on the 
basis that H.R. 2262 imposes a significant new royalty obligation on 
existing mining claimants and that it provides a lower royalty rate for 
production from certain permitted, ongoing mining operations.
    The royalty requirement imposed by Section 102 applies to all 
mining claims following enactment. Therefore, it applies to new mining 
claims located after the date of enactment of H.R. 2262, as well as 
mining claims that were located and valid, including those with ongoing 
operations, as of the date of enactment. Because well over a billion 
dollars in minerals are produced annually from existing unpatented 
mining claims in Nevada alone, the revenues that H.R. 2262 potentially 
could exact are significant.\5\
---------------------------------------------------------------------------
    \5\ See Nevada Division of Minerals, Nevada Gold and Silver 
Production: Impact to Revenue from the Nevada Net Proceeds of Mineral 
Tax from a Federal Royalty on Gold/Silver Produced from Public Lands, 
Oct. 25, 2007 (documenting 2006 gross proceeds of gold and silver 
production on Nevada federal public lands in excess of $1.37 billion).
---------------------------------------------------------------------------
III. Significant Legal Issues Presented by H.R. 2262
    The unprecedented imposition of royalty obligations upon owners of 
existing mining claims under Section 102 of H.R. 2262 runs afoul of the 
United States Constitution. While Congress undisputedly may assess such 
obligations prospectively against newly located mining claims, H.R. 
2262's inclusion of existing claims, both with and without active 
production, presents at least three constitutional infirmities. First, 
Section 102 constitutes a Fifth Amendment taking without payment of 
just compensation by allocating to the government a cost-free share of 
production and extinguishing the claimant's unencumbered, exclusive 
property right to possess and enjoy its mining claims. Second, 
retroactive application of the royalty to existing mining claims 
imposes unique and unfair burdens that may violate due process. 
Finally, the different royalty rates applicable to claim owners based 
on the mere existence of mining operations and production violates 
Equal Protection of the laws.
            A. Owners of Existing Valid Mining Claims Possess and Enjoy 
                    Valuable, Exclusive, and Royalty-Free Property 
                    Rights Therein
    The General Mining Law of 1872, the ``cornerstone of federal 
legislation dealing with mineral lands,'' opened up public lands for 
private prospecting of valuable mineral deposits. 30 U.S.C. Sec.  
22;\6\ United States v. Coleman, 390 U.S. 599, 601 n.1 (1968); Union 
Oil Co. v. Smith, 249 U.S. 337, 346-47 (1919) (mining law ``extends an 
express invitation''). Upon entry, by taking the proper steps required 
by federal and state law to ``locate'' and actively pursue their claim, 
persons gain exclusive rights against third parties, other than the 
United States. 30 U.S.C. Sec.  28; Union Oil, 249 U.S. at 346-47 
(explaining pedis possessio interest). The ``discovery'' of valuable 
mineral upon a properly located claim rewards the locator with ``the 
exclusive right of possession and enjoyment,'' even against the United 
States, of the on-site minerals and surface rights necessary to extract 
such minerals. 30 U.S.C. Sec. Sec. 26, 28; Union Oil, 249 U.S. at 348-
49; Gwillim v. Donnellan, 115 U.S. 45, 49 (1885). Discovery may exist 
without an operating mine as long as the discovered deposits warrant 
further effort by a ``prudent-man'' to develop a valuable mine and are 
projected to be profitable. Coleman, 390 U.S. at 602-03.
---------------------------------------------------------------------------
    \6\ The statute provides, in pertinent part: ``All valuable mineral 
deposits in lands belonging to the United States, both surveyed and 
unsurveyed, are hereby declared to be free and open to exploration and 
purchase . . . '' Id.
---------------------------------------------------------------------------
    Over the more than 135 years of the Mining Law, courts have 
unanimously held that a mining claim validly supported by discovery is 
``property in the fullest sense of that term.'' Wilbur v. United 
States, 280 U.S. 306, 316 (1930). The law effectively ``severs the 
right of possession and enjoyment from the title,'' granting the former 
to the claim owner. O'Connell v. Pinnacle Gold Mines, 131 F. 106, 110 
(U.S. Court of Appeals 1904); Forbes v. Gracey, 94 U.S. 762, 765-66 
(1877). Such rights may be transferred, sold, devised, mortgaged, or 
subjected to state taxes, either in whole or in part. Union Oil, 249 
U.S. at 349; Wilbur, 280 U.S. at 316-17. They extend into perpetuity as 
long as there remains a valuable mineral deposit and annual work is 
performed to maintain the claim. 30 U.S.C. Sec. Sec.  28, 28(f); Union 
Oil, 249 U.S. at 349-50; Freese v. United States, 639 F.2d 754, 755 
(Ct. Cl. 1981).\7\
---------------------------------------------------------------------------
    \7\ Section 103 of H.R. 2262 seeks to make permanent (and increase) 
the 1992 statutory substitution of a cash payment to BLM in lieu of the 
$100 annual on-site assessment work originally prescribed by the 
statute. See Kunkes v. United States, 78 F.3d 1549, 1550 (1996).
---------------------------------------------------------------------------
    In light of H.R. 2262, two aspects of the property rights inherent 
in mining claims bear particular mention. First, courts have 
specifically recognized that the United States extends these property 
rights to valid locators royalty-free. As the Supreme Court has stated:

          [A locator, upon discovery, has] an exclusive right of 
        possession to the extent of his claim as located, with the 
        right to extract the minerals, even to exhaustion, without 
        paying any royalty to the United States as owner, and without 
        ever applying for a patent or seeking to obtain title to the 
        fee; subject, however, to the performance of the annual labor 
        specified . . . 

    Union Oil, 249 U.S. at 348-49 (emphasis added). Other cases have 
reaffirmed this same basic determination that the United States does 
not retain any royalty interest in validly located mining claims or the 
minerals extracted and sold therefrom.\8\ Second, it is well-settled 
that a locator's rights qualify as property protected by the Takings 
Clause of the Fifth Amendment, and hence cannot be taken by the 
government without payment of just compensation.\9\
---------------------------------------------------------------------------
    \8\ See, e.g., Forbes, 94 U.S. at 766 (minerals ``free from any 
lien, claim, or title of the United States''); Cole v. Ralph, 252 U.S. 
286, 294 (1920) (no ``rent or royalty''); United States v. Locke, 471 
U.S. 84, 86 (1985); Kunkes, 78 F.3d at 1551; Skaw v. United States, 740 
F.2d 932, 940 (Fed. Cir. 1984); Independence Min. Co. v. Babbitt, 885 
F. Supp. 1356, 1357 (D. Nev. 1995) (citation omitted); O'Connell, 131 
F. at 109 (no ``rendering any account to the government'').
    \9\ See United States v. Kosanke Sand Corp., 12 IBLA 282, 289, 296 
(1973) (citations omitted); Best v. Humboldt Placer Mining Co., 371 
U.S. 334, 337-38 (1963); Locke, 471 U.S. at 107; Kunkes, 78 F.3d at 
1551; Skaw, 740 F.2d at 936; United States v. Bagwell, 961 F.2d 1450, 
1456 (9th Cir. 1992); United States v. Barrows, 404 F. 2d 749, 752 (9th 
Cir. 1968).
---------------------------------------------------------------------------
    Finally, it should be noted that the United States' retention of 
the formal title to the land, hollow as to any mineral possession 
rights, does not diminish the rights of a valid claim owner. On one 
hand, ``[i]f not content to rest upon'' his existing rights, the 
locator has the further option of obtaining fee title from the United 
States via a ``patent.'' 30 U.S.C. Sec. Sec.  22, 29; Union Oil, 249 
U.S. at 349.\10\ On the other hand, if the owner is willing and able to 
annually maintain his claim, the additional step of obtaining a patent 
is unnecessary, since the owner's ``possessory right, for all practical 
purposes of ownership, is as good as though secured by patent.'' 
Wilbur, 280 U.S. at 317. Indeed, the patent ``does nothing to enlarge 
or diminish the claimant's right to its locatable mineral resources.'' 
Kosanke, 12 IBLA at 290-91.\11\ In the end, the United States only 
retains a reversionary interest in its granted away valuable rights, 
triggered by the owner's ``abandonment'' of his claim. Union Oil, 249 
U.S. at 349.
---------------------------------------------------------------------------
    \10\ Section 101 of H.R. 2262 also seeks to make permanent the 1994 
statutory moratorium on patent applications (filed after September 30, 
1994). See R.T. Vanderbilt Co. v. Babbitt, 113 F.3d 1061, 1064 (9th 
Cir. 1997). However, as discussed in the text, deprivation of the right 
to seek patents does nothing to diminish the significant property 
interests held in a valid mining claim which H.R. 2262's royalty 
provisions impermissibly offend.
    \11\ Several other points highlight the United States' lack of 
retained rights following location of a valid mining claim: the owner 
of a valid claim has an ``absolute right to a patent,'' 30 U.S.C. Sec.  
29, Kosanke, 12 IBLA at 289-90 (citations omitted); development of a 
mining claim and the grant of a patent is not a federal action subject 
to NEPA, id. at 298, S.D. v. Andrus, 614 F.2d 1190, 1193-95 (8th Cir. 
1980); and the United States is not an ``owner'' of mining claim land 
for purposes of CERCLA liability, United States v. Friedland, 152 F. 
Supp. 2d 1234, 1246 (D. Colo. 2001), U.S. v. Newmont, 2007 U.S. Dist. 
LEXIS 61308 at *27-29, 52-54 (E.D. Wash. Aug. 21, 2007).
---------------------------------------------------------------------------
            B. H.R. 2262's Creation of a Royalty on Existing Mining 
                    Claims Constitutes an Impermissible and Unlawful 
                    Taking of Property Rights
    As discussed above, H.R. 2262 creates out of thin air a royalty 
interest accruing to the United States and assesses this new financial 
obligation upon existing mining claims where over 100 years of case law 
has confirmed that no such obligation existed before. In effect, this 
significant new burden pulls back the royalty property interest 
conveyed to claim owners pursuant to the 1872 General Mining Law, 
wherein the United States reserved no such interest. That is, what was 
previously freely granted to and vested in claim owners is now being 
taken back by H.R. 2262. This qualifies as an unconstitutional 
legislative taking without just compensation.
    The Fifth Amendment provides, in pertinent part, ``nor shall 
private property be taken for public use, without just compensation.'' 
U.S. Const. amend. V. To succeed on a takings claim a plaintiff must 
establish (a) the existence of a protected property interest, and (b) 
that a compensable taking of that interest has occurred. Maritrans, 
Inc. v. United States, 342 F.3d 1344, 1351 (Fed. Cir. 2003). As 
explained above, there is no doubt that the rights in a properly 
maintained, valid mining claim are protected property in the fullest 
sense, on par with a taking of the land itself. Even if labeled as 
personal rather than real property, a taking could still occur. Adams 
v. United States, 391 F.3d 1212, 1224 (Fed. Cir. 2004); Maritrans, 342 
F.3d at 1352-53.
    To then determine whether a taking occurred, courts generally 
engage in one of three types of takings analyses; here, a regulatory 
(or legislative) taking likely occurred given H.R. 2262's restrictions 
on property use. See Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 548 
(2005).\12\ This analysis essentially looks to whether government 
regulation goes ``too far'' and constitutes a taking. See Pa. Coal v. 
Mahon, 260 U.S. 393, 415 (1922). Courts analyzing regulatory takings 
have utilized a two-tiered approach known as the Lucas/Penn Central 
test. Under Lucas v. S.C. Coastal Council, a government regulation that 
completely eliminates the economic use and value of property is a per 
se taking. 505 U.S. 1003 (1992). If there is less than a total taking, 
courts instead employ the multifactor balancing approach in Penn 
Central Transp. Co. v. New York City, 438 U.S. 104 (1978). As applied 
to different types of claim owners, H.R. 2262 fails either or both 
prongs of the regulatory takings scrutiny.
---------------------------------------------------------------------------
    \12\ Neither physical takings, which challenge a physical invasion 
of property by the government, nor exaction takings, which challenge 
conditions on development approvals taking the form of physical 
dedications or monetary impact fees, likely apply here. See id. The 
legislative taking effected through H.R. 2262 is a form of regulatory 
taking for takings analysis purposes.
---------------------------------------------------------------------------
    At the outset, it is worth defining the nature of the royalty 
imposed by H.R. 2262. The offensiveness of H.R. 2262 is not only the 
sum of money that it exacts from valid mining claims, but also the 
bill's take-back of a specific property right, namely the royalty 
interest. A ``royalty,'' typically reserved for lease contexts such as 
oil and gas, is a property interest that may be (but is not always) 
reserved by the government when it conveys a right to prospect for and 
produce natural resources on public lands. Shell Oil Co. v. Babbitt, 
920 F. Supp. 559, 564-65 (D. Del. 1996). As the owner of federal lands 
open to prospecting under the General Mining Law, the government 
undoubtedly could prospectively impose royalties or other conditions on 
newly located claims on federal lands. However, as to valid existing 
claims, the United States has already ceded to valid claim owners any 
royalty interest in the mining claim or locatable minerals. These 
owners now have settled expectations regarding the scope of their 
property interests vis-a-vis the United States, and have made 
investments on their lands accordingly. That Congress now believes it 
was unwise policy to grant away its royalty interest does not enable 
Congress to take it back, without just compensation. Cf. Adams v. U.S., 
391 F.3d at 1218 (looking to whether government action at issue took a 
``stick'' in the bundle of property rights); accord Mobil Oil 
Exploration & Producing SE, Inc. v. United States, 530 U.S. 604, 624 
(2000) (finding lease contract with government limited later imposition 
of different statutory requirements that would upset lessees' bargain 
and investment).
    Analyzing H.R. 2262's assessed royalties first under Lucas, H.R. 
2262 would arguably constitute a total, per se taking of the royalty 
interest already conveyed to valid mining claimants upon discovery. As 
outlined above, as part of the General Mining Law's scheme to promote 
mineral prospecting and development, location of a valid claim has the 
effect of the United States severing from the land and transferring to 
the claim owner a royalty-free property right to possess and enjoy the 
mineral production from his claim. Union Oil, 249 U.S. at 349. Having 
done so, the government cannot merely change its mind at a later date. 
Yet this is exactly H.R. 2262's function, as it would take away in its 
entirety, without compensation, the royalty interest in the production 
of minerals that the United States granted to, and is now vested in, 
mining claim owners. This meets the test for a per se taking. See also 
Maritrans, 342 F.3d at 1352-53.
    Even if H.R. 2262 failed to effect a total taking, it could still 
be construed as an unlawful taking under the Penn Central balancing 
test. Under this test the government action must be examined as to (1) 
economic impact on the property owner; (2) degree of interference with 
the owner's reasonable investment-backed expectations, and (3) its 
character. 438 U.S. at 124. First, there is no prescribed amount of 
economic impact that necessarily constitutes or bars a taking. Id. 
(dispensing with any ``set formula''); Cienega Gardens v. U.S., 331 
F.3d 1319, 1345 (Fed. Cir. 2003) (eschewing any ``automatic numerical 
barrier''). Yet courts have suggested that the impact must be severe. 
See, e.g., Tahoe-Sierra Pres. Council v. Tahoe Reg'l Planning Agency, 
535 U.S. 302, 322 n. 17 (2002). H.R. 2262's severity cannot be doubted 
given that, as pointed out by congressmen and stakeholders, it would 
burden claim owners with hundreds of millions of dollars in royalties 
and other novel obligations, as well as potentially curb minerals 
production.\13\
---------------------------------------------------------------------------
    \13\ See House panel approves hard rock bill with gross royalty, 
Public Lands News, Oct. 26, 2007, at 3 (Statement of Rep. Don Young); 
Legislative Hearing on H.R. 2262--Royalties and Abandoned Mine 
Reclamation: Hearing Before the H. Subcomm. on Energy and Mineral 
Resources, 110th Cong.(2007) (statement of James F. Cress); see also 
supra n.4.
---------------------------------------------------------------------------
    Second, reasonable investment-backed expectations clearly exist 
here. The General Mining Law has been in effect for over one hundred 
and thirty-five years. Aside from minor changes in annual maintenance 
obligations and permit requirements to actually operate mines 
(distinguished below), the regime has operated fairly consistently, and 
always without financial obligation to the government. Reasonable 
expectations of persons who have properly located and maintained claims 
throughout that time period should be judged by looking to the legal 
regime in effect at the time that the location was made. See Appolo 
Fuels v. United States, 381 F.3d 1338, 1349-50. This is not a case 
where rights were acquired following the passage of a law and thus a 
person could be charged with knowledge of it. See Cane Tenn., Inc. v. 
United States, 63 Fed. Cl. 715, 727-31 (2005) (citations omitted). 
Rather, H.R. 2262's unanticipated royalty provisions abruptly and 
substantially upset the current reasonable investment-backed 
understanding and expectations of property rights in existing, royalty-
free mining claims.
    As to the third ``character'' factor, courts often examine the 
asserted public benefit of the government action against the burden on 
the property owner. The burden on existing mining claim owners has 
already been shown to be severe. Meanwhile, though the royalty funds 
are earmarked for abandoned mine reclamation and community impact 
assistance (see Title IV of H.R. 2262), this salutary purpose does not 
fit within the interests that courts have found worthy to avoid a 
taking, such as measures to address war, emergencies, or national 
security. See, e.g., United States v. Central Eureka Mining Co., 357 
U.S. 155, 168 (1958) (finding temporary wartime shutdown of gold mines 
not a taking, since war ``demands the strict regulation of nearly all 
resources''). On balance, these reasons suggest that a court would 
likely find a legislative taking here under Penn Central.
    Alternately, a regulatory taking may be found under the Lucas/Penn 
Central approach if the imposition of a royalty renders production 
unprofitable and forces the forfeiture of a mining claim. That is, both 
for small miners and those who mine lower grade deposits, H.R. 2262's 
significant royalty, on gross income no less, could completely change a 
miner's profit calculus and force a decision to temporarily or even 
permanently cease production earlier than would have occurred had there 
been no royalty obligation. In turn, this could precipitate abandonment 
and perhaps even loss of the mining claim for lack of a profitable 
mining interest. Such an ``ouster'' could constitute a total, per se 
taking of property rights under Lucas. See Lingle, 544 U.S. at 537. 
Actual or threatened forfeiture of a claim obviously also bears on the 
Penn Central factors, such as disturbing reasonable investment-backed 
expectations. The likelihood that H.R. 2262 could effect such a 
regulatory taking is only increased given that, unlike for the claim 
maintenance fee in Section 103, there exists no corresponding small 
miner exemption with respect to royalty obligations.\14\
---------------------------------------------------------------------------
    \14\ We leave to a future analysis a more in-depth discussion of 
whether and how the royalty rate may interact with the preliminary 
economic determination of whether a person has located a profitable 
claim supporting discovery.
---------------------------------------------------------------------------
    Tellingly, H.R. 2262 itself recognizes takings concerns and the 
importance of ``valid existing rights,'' but only selectively. As with 
royalties, Congress is free to prospectively decide that certain of its 
public lands and resources should be withdrawn from mineral entry under 
the Mining Law. See Lockhart v. Johnson, 181 U.S. 516, 520-21 (1901); 
U.S. v. Almgren, 17 IBLA 295, 299 (1974). However, Congress has 
typically avoided takings issues by exempting existing property 
interests, such as when it enacted the Mineral Leasing Act of 1920, 30 
U.S.C. Sec.  193 (subjecting oil and gas resources to a separate 
leasing regime ``except as to valid claims existent on February 20, 
1920, and thereafter maintained in compliance with the laws under which 
initiated . . . '').\15\ Similarly, Section 201(b) of H.R. 2262 
withdraws certain mining lands but only ``subject to valid existing 
rights.'' However, it omits such necessary language in Section 102's 
royalty provisions (as well as in the definition of ``valid existing 
rights'' in Section 2(b)(1)). Congress thus ignores the fact that the 
royalty imposition presents the same potential takings infirmities for 
valid existing rights as withdrawal of lands. See also, Freese, 639 
F.2d at 757-58.
---------------------------------------------------------------------------
    \15\ See also Skaw, 740 F.2d at 934 (discussing Wild and Scenic 
Rivers Act); Kosanke, 12 IBLA at 294 n.9, 310 (discussing withdrawal 
under Recreation and Public Purposes Act).
---------------------------------------------------------------------------
    As a final point, H.R. 2262 is starkly different from situations 
where minor burdens or regulatory changes impacting mining operations 
on existing valid claims were upheld. Specifically, in United States v. 
Locke, the Supreme Court held that FLPMA's imposed annual recording 
system for mining claims was not a Fifth Amendment taking of claimants' 
lost mining claims where they missed the filing deadline. 471 U.S. at 
104-08. Locke primarily reasoned that the loss of the claims was the 
sole fault of the claimants, and that only the ``most minimal'' burdens 
were imposed, i.e., ``fil[ing] a paper once a year'' with BLM. Id. 
Similarly, in Kunkes v. United States, relying on Locke, the conversion 
of the $100 annual assessment work requirement into a cash fee payable 
to BLM (proposed to be codified in Section 103 of H.R. 2262) was found 
not to be a taking. 78 F.3d 1549, 1556 (Fed. Cir. 1996). The new fee 
``differed only in nature, not in value, from the prior assessment work 
requirements'' and was minimal compared to the value of the mineral 
claims themselves. Id. at 1555. In contrast, the royalty provisions in 
H.R. 2262 are substantial, unprecedented, and imposed through no fault 
of owners of mining claims. Most significantly, as noted above, both 
Locke and Kunkes would certainly not sanction H.R. 2262 given that both 
courts recognized that mining claims are exclusive royalty-free 
property rights! Locke, at 471 U.S. at 86; Kunkes, 78 F.3d at 1551.
            C. H.R. 2262 Retroactively Imposes Unfair Burdens That 
                    Offend Due Process
    H.R. 2262, by encompassing existing valid mining claims, 
retroactively imposes royalty obligations on those owners' property 
rights that currently exist without royalty. While royalties are 
technically imposed going forward, H.R. 2262 reaches back in time and 
impacts the mining claims themselves, disturbing the right to their 
royalty-free possession and enjoyment conveyed by the United States 
when the claims became valid upon discovery of a valuable mineral 
deposit.
    The law is clear that ``retroactivity is not favored'' and may 
violate due process. Landgraf v. Usi Film Prods., 511 U.S. 244, 264 
(1994). Because it disturbs ``legitimate expectations and settled 
transactions,'' courts will find that ``retroactive legislation 
violates the Fifth Amendment unless it is justified as a rational 
measure.'' Seariver Mar. Fin. Holdings v. Mineta, 309 F.3d 662, 678 
(9th Cir. 2002) (citing Usery v. Turner Elkhorn Mining, 428 U.S. 1, 17 
(1976)). While Congress may allocate economic rights and burdens 
generally, ``[i]t does not follow, however, that what Congress can 
legislate prospectively it can legislate retrospectively. The 
retrospective aspects of legislation, as well as the prospective 
aspects, must meet the test of due process, and the justifications for 
the latter may not suffice for the former.'' Id.
    In analyzing retroactive statutes, courts consider ``(1) whether 
Congress clearly expressed its intent that the statute apply 
retroactively, and if so, (2) whether the statute is justified by a 
rational legislative purpose.'' Seariver, 309 F.3d at 678 (citations 
omitted). As explained above, the first question here is clearly 
answered in the affirmative. While the second question is a deferential 
inquiry, courts may more closely scrutinize retroactive legislation, 
especially where obligations are imposed ``automatically on a 
legislatively defined class of persons. See Pension Ben. Guar. Corp. v. 
R.A. Gray & Co., 467 U.S. 717, 730 (1984); United States v. Monsanto, 
858 F.2d 160, 175 (4th Cir. 1988). As described in the takings context 
above, contrary to the ``minimal'' burden of filing a paper in Locke, 
471 U.S. at 106, H.R. 2262 imposes an enormous burden on the class of 
existing claim owners, with no other seeming motivation except to 
extinguish their previously granted royalty-free property interest. 
Moreover, Congress does not have the power to ``arbitrarily 
dispossess'' claimants of their property rights; this violates due 
process of law. See Cameron v. United States, 252 U.S. 450, 460 (1920); 
Kosanke, 12 IBLA at 296; Oil Shale Corp. v. Morton, 370 F. Supp. 108, 
124 (D. Colo. 1973) (mining claim cannot be dissolved ``at whim''). 
Therefore, a court likely would find that H.R. 2262 violates due 
process.
            D. Assessment of Arbitrarily and Significantly Different 
                    Royalty Rates Against Similarly Situated Mining 
                    Claim Owners May Violate Equal Protection
    Even if an imposition of royalties on existing mining claims was 
permissible, which as amply demonstrated above it is not, H.R. 2262 
also fails constitutional scrutiny under the Equal Protection Clause. 
Congress may not treat similarly situated persons differently, unless 
``it bears a rational relation to some legitimate end.'' Romer v. 
Evans, 517 U.S. 620, 631 (1996); Village of Willowbrook v. Olech, 528 
U.S. 562, 564 (2000).\16\ Courts always examine the connection between 
Congress' classification and its purported goals. Romer, 517 U.S. at 
632-33; Department of Agriculture v. Moreno, 413 U.S. 528, 534. Courts 
have specifically held that Congress may not impose unique burdens upon 
some persons while others practicing the same business or calling are 
exempt. See, e.g., Mayflower Farms v. Ten Eyck, 297 U.S. 266, 273-74 
(1936); Metro Life Ins. Co. v. Ward, 470 U.S. 869, 875 (1985).
---------------------------------------------------------------------------
    \16\ While the guaranty of equal protection is set forth in the 
Fourteenth Amendment, for federal legislation it operates through the 
due process guaranty of the Fifth Amendment. As a result, the analysis 
is the same under retroactivity and equal protection in determining 
whether the law at issue is rationally related to a legitimate 
governmental interest. See Valot v. SE Local Sch. Dist. Bd. of Educ., 
107 F.3d 1220 (6th Cir. 1997).
---------------------------------------------------------------------------
    Section 102(a)(2) reduces the royalty on gross income from mineral 
production from the generally applicable 8% rate to a 4% rate for ``any 
Federal land'' subject to an operations permit and currently producing 
locatable minerals in commercial quantities as of the date of H.R. 
2262's enactment. As an initial matter, this seeming attempt to avoid 
or mitigate H.R. 2262's takings and due process infirmities is 
unsuccessful, given that existing mining claims are still deprived of 
their property interests through the retroactive creation and 
imposition of a new royalty, even at the reduced rate. Nonetheless, the 
Section's focus on existing production engenders an additional Equal 
Protection problem by arbitrarily imposing disparate rates among the 
class of similarly situated existing valid claim owners.
    Not all existing valid mining claims are currently in production, 
nor need they be. As explained above, the prudent person/marketability 
test for a valid discovery of a valuable mineral deposit, as well as 
the required annual effort to maintain the claim, do not require actual 
production, but rather only continued efforts to work toward 
production. Coleman, 390 U.S. at 602-03. Moreover, actual and 
continuous occupation of a valid mining claim is unnecessary to 
preserve it and all of the rights inherent therein. Union Oil, 249 U.S. 
at 349. Accordingly, different mining claims across the country, with 
equal royalty-free property rights against the United States, are in 
different stages of minerals development or production.
    Yet, H.R. 2262 ignores this reality and imposes different burdens 
among the holders of identical property rights in their mining claims. 
Namely, H.R. 2262 doubles the royalties due from claims without current 
operations on the date of the legislation's enactment, relative to 
those with operations. The result is a significant competitive 
disadvantage whereby 4% more royalties on future mineral production 
must be paid from the former claims. H.R. 2262 also imposes the same 4% 
royalty penalty upon those claim holders that to date, for whatever 
reason and perhaps through no fault of their own, could not obtain an 
operations permit. Finally, H.R. 2262 provides no basis for the 
distinction between existing and planned mining production on valid 
mining claims nor a legitimate government objective to which it could 
be rationally related. Nor could it reasonably do so, as holders of 
identical rights are generally entitled to the same uses of those 
rights. H.R. 2262 creates the essence of an Equal Protection violation.
IV. Conclusion
    This initial analysis of H.R. 2262 demonstrates that several legal 
claims are available to any plaintiff desiring to challenge the law if 
enacted as currently written (or with substantially similar language). 
Congress cannot, on a whim, constitutionally create and appropriate to 
itself a royalty interest in valid mining claims that it freely granted 
away under the mining laws specifically without reserving such a right. 
Since H.R. 2262 would accomplish precisely this objective, it will 
likely not withstand a court challenge to its constitutionality.
                                 ______
                                 
  Responses of Benjamin H. Grumbles to Questions From Senator Bingaman
    Question 1. I am interested in how any AML program that we would 
enact should interface with the Superfund program. If a mine site is on 
the National Priority List, should funds under the hardrock AML program 
be used for remediation? Do you care to comment on that?
    Answer. As currently drafted, HR 2262 indicates royalty payments 
would be distributed by the Secretary of the Department of the Interior 
[sections 411(a) and (b)]. In addition, according to section 412, funds 
from the ``Hardrock Reclamation Account'' (Subtitle B of HR 2262) could 
only be used at Abandoned Mine Lands (AML) on Federal lands, Indian 
lands, or water resources that traverse, or are contiguous to Federal 
lands or Indian lands and affected by past mineral activities.
    As you are aware, many AMLs in the western part of the US are 
``mixed ownership'' sites where the AML is composed of both public and 
private lands. If the AMLs present significant public health or 
environmental concern and EPA's Superfund program cannot identify a 
PRP, we use appropriated funds from the Superfund Trust Fund to address 
contamination at AMLs located on private lands . As discussed in the 
response to Question 2 below, EPA may use its Superfund removal 
authorities on public lands, but must seek reimbursement to the Trust 
Fund of its costs from the federal agency that owns the land . Allowing 
funds from the ``Hardrock Reclamation Account'' to be used for the 
cleanup of ``orphan'' NPL sites, regardless of whether they are on 
public or private lands, would allow the Superfund program to focus its 
resources on other sites that pose a significant risk to human health 
and the environment.
    Question 2. Are Superfund monies available for use on mine sites 
located on federal lands? Do the land management agencies expend funds 
for cleanup of the sites on the lands that they administer?
    Answer. Under section 111(e)(3) of CERCLA, Superfund monies are 
generally not available for remedial actions ``with respect to 
federally owned facilities,'' Therefore, to the extent mine sites on 
federal lands are ``federally-owned facilities,'' EPA cannot use the 
Superfund for remedial actions to address releases of hazardous 
substances from those facilities. Further, under CERCLA section 120 and 
Executive Order (E.O.) 12580, the responsibility for non-emergency 
cleanup of these sites falls to the given federal land management 
agency. EPA does provide technical assistance to these cleanups where 
requested.
    To address emergency situations, EPA has discretion under E .O. 
12580, Sec. 9(i), to use Superfund money to pay for removal actions at 
sites under the jurisdiction, custody, or control of another federal 
executive agency. E.O, 12580 requires that these funds be reimbursed to 
the Superfund Trust Fund by the agency with jurisdiction, custody, or 
control.
    Finally, yes, the land management agencies expend their 
appropriated funding for the cleanup of sites on the lands they 
administer .
    Question 3. What water quality issues are posed by a uranium in-
situ leach recovery facility? What regulations apply?
    Answer. Possible water quality impacts from uranium in-situ leach 
(ISL) mining operations are primarily to ground water at the facility, 
although contamination of soil, surface water and air also may occur. 
Ground water contamination from uranium ISL mining can occur in three 
ways: (1) through unavoidable contamination of the exempted portion of 
the aquifer in which the uranium deposit is localized, (2) through 
unintentional contamination due to contaminants moving outside of the 
exempted aquifer area, and (3) as a result of facility structural 
failure and surface spills.
    Examples of ground water excursions and contamination at ISL sites 
with references to various other studies, compiled by the United States 
Geological Survey and others organizations, are included in Appendix 
III of the report ``Technologically Enhanced Naturally Occurring 
Radioactive Materials from Uranium Mining, Volume 2: Investigation of 
Potential Health, Geographic, and Environmental Impacts of Abandoned 
Uranium Mines'', which is available through the EPA website at: http://
www.epa.gov/radiation/docs/tenorm/volume-ii/402-r-05-007.pdf.
    Regarding applicable water quality regulations, uranium ISL 
operators are required to comply with radiation, environmental and 
ground water protection standards developed by EPA, in accordance with 
Uranium Mill Tailings Radiation Control Act (UMTRCA). These standards 
are set out in 40 CFR Part 192. The Nuclear Regulatory Commission (NRC) 
and its Agreement States enforce these radiation, environmental 
protection, ground water protection and restoration regulations (NRC 
Regulations at 10 CFR Part 40). The licensing agency also must enforce 
all other applicable environmental laws, and the operator must comply 
with orders from the licensing agency for any required site cleanup.
    EPA has authority to oversee remediation should the NRC or the 
Agreement State fail to achieve appropriate remediation or 
environmental law compliance under the Clean Water Act, Safe Drinking 
Water Act, Clean Air Act, Resource Conservation and Recovery Act 
(RCRA), or Comprehensive Environmental Response, Compensation, and 
Liability Act (CERCLA).
    EPA has authority under the Safe Drinking Water Act to regulate the 
injection of the fluids at these sites. Consequently, prior to any ISL 
mining at these sites, a mine owner/operator must receive a license 
from the NRC or NRC Agreement State as well as receive an Underground 
Injection Control Program (UIC) Class III permit provided by either EPA 
or a State with UIC primary enforcement authority. The relevant UIC 
requirements for Class III wells are found in 40 CFR Part 144 and 146.
    Under regulations promulgated pursuant to the Clean Water Act at 40 
CFR 440 Subpart C, new source discharge of process wastewater to 
navigable waters is generally not allowed from mills using acid leach, 
alkaline leach, or combined acid and alkaline leach process for the 
extraction of uranium or from mines and mills using ISL methods. The 
only exception occurs if annual precipitation falling on the treatment 
facility and the drainage area, contributing surface runoff to the 
treatment facility, exceeds the annual evaporation. In such cases, the 
volume of water exceeding annual evaporation may be discharged subject 
to numerical limitations for uranium, radium, and other listed 
pollutants.
    Question 4. What steps does EPA plan to take under the draft five-
year plan to address the concerns regarding past uranium mining on 
Navajo Nation lands?
    Answer. EPA and its federal agency partners have developed a 
program of assistance to mitigate the health and environmental impacts 
of uranium contamination in the Navajo Nation. As part of this plan, 
EPA has agreed to lead and support a series of specific actions that 
are outlined in detail in the plan that was submitted to the House 
Government Reform and Investigations Committee on March 3, 2008, titled 
``Health and Environmental Impacts of Uranium Contamination in the 
Navajo Nation : Five-Year Plan''. The plan may be accessed on the 
internet at: http://yosemite.epa.gov/r9/sfund/r9sfdocw.nsf/
63d4ce17a198b2e3882573c5007fae76/
bf9a1608e7578ba388257405000499f8!OpenDocument

    The plan includes EPA participation in the following activities:

    EPA Led Activities:

   Assess and Remediate Contaminated Structures
   Assess Potentially Contaminated Water Sources and Assist 
        Affected Residents
   Assess and Require Cleanup of Abandoned Uranium Mines
   Clean up the Highest-Priority Mine Site: Northeast Church 
        Rock

    Activities Involving EPA:

   Characterize the Highway 160 Site
   Assess the Tuba City Dump

    Question 5a. In 2004, the EPA Inspector General identified 63 
hardrock mining sites on the Superfund National Priority List, and 
another 93 sites that could be added-with potential cleanup costs 
ranging between $7 billion and $24 billion. The IG estimated EPA's 
maximum costs for these cleanups as approximately $15 billion. Your 
testimony today suggests there were, through FY 2007, 84 hardrock 
miningrelated sites on the NPL, indicating the list is getting longer. 
Are all of the hardrock mining sites on this National Priority List now 
confined to nonfederal land?
    Answer. Through 2007, most AML sites on the NPL are primarily 
located on private land, though there are some mixed ownership sites. 
EPA estimates that about 25% of the AML NPL sites are located on mixed 
ownership (private and public) lands, with larger portions being on the 
private lands.
    Question 5b. Is it possible to assess the number of these 
nonfederal sites on the NPL list that have resulted from operations on 
previously-federal lands, patented before Congress established the 
existing moratorium?
    Answer. EPA does not have the information needed to directly assess 
the number of non-federal sites on the NPL that resulted from 
operations on previously-federal lands, patented before Congress 
established the existing moratorium. This assessment may be possible 
but would require substantial involvement and leadership by the 
involved federal land management agencies.
    Question 6a. Previous GAO reports have suggested EPA consider the 
hardrock mining industry ``a high priority'' in developing financial 
assurance regulations mandated under the Superfund law-since the mining 
industry ``presents taxpayers with an especially serious risk of having 
to pay cleanup costs for thousands of abandoned, inactive, and 
operating mines in the U.S.'' What is the current status of EPA's 
efforts to develop such regulations?
    Answer. EPA is currently analyzing whether financial assurance 
requirements under CERCLA section 108(b) may be needed for certain 
classes of facilities in light of modern waste management regulations 
and practices. No final decisions have been made yet regarding the 
timing and scope of any action that we may take under CERCLA section 
108(b).
    Question 6b. We have heard testimony before this Committee noting 
that modern mining operations may occur on a combination of private, 
state and federal lands. In your view, would the EPA's authority to 
require financial assurances under current Superfund laws extend to 
operations that span categories of land ownership?
    Answer. CERCLA section 108(b) authorizes the promulgation of 
requirements for classes of facilities to establish and maintain 
evidence of financial responsibility consistent with the degree and 
duration of risk associated with the production, transportation, 
treatment, storage, or disposal of hazardous substances and does not 
differentiate between public or private land ownership.
    EPA has not made a decision on what classes or sectors, if any, may 
be included under regulations pursuant to CERCLA section 108(b). In 
making that determination, EPA would take into account existing 
financial assurance under other federal laws.
    EPA does have some options in dealing with existing Superfund 
sites. Under the principal of ``Enforcement First,'' EPA negotiates 
settlements with Potentially Responsible Parties (PRPs) where the 
parties enter into a consent decree to cleanup hazardous substances at 
Superfund sites. EPA's model consent decree includes a financial 
assurance provision where the private PRP ensures they have adequate 
financial resources to conduct the cleanup . These agreements are 
developed on a case by case basis.
    Question 7. Under a ``Good Samaritan'' provision, waivers need to 
be granted under what environmental laws in order for the provision to 
be effective? Why?
    Answer. Under EPA's Good Samaritan Initiative, the CERCLA 
administrative tools issued in June 2007 do not involve the waiver of 
environmental laws. The administrative tools are based on CERCLA and 
its regulations. In order to get the protections afforded by the 
administrative tools, Good Samaritans must describe how the proposed 
cleanup project will be consistent with the National Contingency Plan 
(NCP). The Administration is working with key stakeholders, such as the 
Western Governors' Association, individual Governors, and watershed 
organizations, to enact targeted bipartisan legislation to remove 
remaining clean water liability roadblocks and obstacles deterring 
volunteer Good Samaritans from cleaning abandoned hardrock mines.
    Question 7a. Please describe the administrative steps taken by EPA 
to facilitate Good Samaritan work at abandoned mine sites.
    Answer. The Good Samaritan administrative CERCLA tools were 
published on June 6, 2007 and are posted on EPA's website at http://
www.epa.gov/ow/goodsamaritan/. The tools include a model comfort 
letter, a model settlement agreement (an administrative order on 
consent or ``AOC''), and other information to assist potential Good 
Samaritans.
    Question 8. Does the reclamation of abandoned uranium mine sites 
involve any unique concerns or additional action or expense compared to 
the reclamation of other hardrock mine sites?
    Answer. First, it is important to point out that ``reclamation'' 
generally means restoration of mined land to original contour, use, or 
condition. However, in the event of a release of hazardous constituents 
to the environment, EPA would be involved in the ``remediation'' of the 
hazardous constituents found in all media of concern, including soils, 
sediments, and ground and surface water.
    Because of the dangers of radiation, both reclamation and 
remediation at abandoned uranium mine sites generally may present 
unique concerns and require additional action and expense relative to 
hardrock mine sites. The presence of radionuclides in the waste found 
at abandoned uranium mine sites, in general, requires specialized 
laboratory analyses and field instrumentation. Health and safety 
precautions as well as risk assessments need to take into consideration 
that radionuclides may also pose risks from gamma radiation, even when 
there is no physical contact with the contaminants. In addition, 
radioactive decontamination of equipment used in site cleanup or the 
disposal of radioactive materials can also present some unique issues 
and additional cost. We have also found a particular secondary concern 
exists where abandoned uranium mine wastes have been used to construct 
buildings. Such buildings can pose significant radiation health hazards 
to the residents, and may require a separate cleanup action at remote 
distances from the mine itself. Finally, the generation of dangerous 
radon gas from ore and waste rock also poses unique challenges and 
expenses.
   Response of Benjamin H. Grumbles to Question From Senator Domenici
    Question 1. It is my understanding that the geologic layers in 
which I-S-L is undertaken need to be exempted before operations 
commence. What does that mean exactly--is the water in those areas 
potable prior to the siting of an I-S-L operations facility?
    Answer. It is correct that under the Safe Drinking Water Act 
neither EPA nor a State with primary enforcement authority or 
``primacy'' for the Underground Injection Control Program (UIC) will 
permit in-situ leach mining for uranium at a site unless an aquifer, or 
portion of an aquifer, which is an underground source of drinking water 
(USDW), is exempted . A USDW is defined at 40 CFR 144.3 as ``an aquifer 
or its portion : (1) which supplies any public water system or which 
contains a sufficient quantity of ground water to supply a public water 
system; and (2) currently supplies drinking water for human consumption 
or contains fewer than 10,000 mg/1 total dissolved solids and which is 
not an exempted aquifer.''
    While an exempted area within the aquifer may be potable prior to 
mining, in many situations, the naturally occurring ground water 
associated with uranium deposits, while technically a USDW prior to 
exemption, is not potable due to dissolved uranium species and 
degradation products. Nevertheless, an aquifer or portion of an aquifer 
may be exempted if it meets at least the federal minimum requirements 
set in 40 CFR 146.4.
    The regulations allow an exemption if the aquifer does not 
currently serve as a source of drinking water; and it cannot now, and 
will not in the future, serve as a source of drinking water because it 
is: (1) mineral, hydrocarbon or geothermal energy producing, or can be 
demonstrated by a permit applicant as part of a permit application for 
a U IC Class II (oil and gas field) or III (solution mining) operation 
to contain minerals or hydrocarbons that, considering their quantity 
and location, are expected to be commercially producible; or (2) 
situated at a depth or location which makes recovery of water for 
drinking water purposes economically or technologically impractical; or 
(3) so contaminated that it would be economically or technologically 
impractical to render that water fit for human consumption; or (4) 
located over a UIC Class III well mining area subject to subsidence or 
catastrophic collapse. An aquifer can also be exempted if it has a 
total dissolved solids content of the ground water that is more than 
3,000 and less than 10,000 mgll and it is not reasonably expected to 
supply a public water system.
    Exempting an aquifer or a portion of an aquifer means that 
protection of that aquifer, or portion, is excluded from protection 
that ensures nonendangerment of an USDW. Essentially, the exempted 
aquifer or portion thereof is therefore not a USDW in perpetuity. 
However, federal or state UIC regulations (e.g., construction, 
monitoring, reporting, mechanical integrity tests) still apply to the 
injection wells and the injection processes themselves to ensure 
protection from endangerment of contiguous USDWs.
   Response of Benjamin H. Grumbles to a Question From Senator Wyden
    Question 1. Ms. Struhsacker from the Northwest Mining Association 
stated in her testimony that existing environmental regulations are 
adequate to protect human health and the environment.
    Mr. Bisson and Mr. Grumbles, as representative of BLM and EPA, 
respectively, do you agree with Ms. Struhsacker's assessment? Or is the 
problem that existing regulations such as the Surfacing Mining Rule and 
the Clean Water Act are not adequate to manage hard rock mining 
activities and any subsequent environmental damage? Or is the problem 
this Administration's lack of enforcement of environmental laws?
    Answer. EPA agrees that there are a wide range of current 
regulations that govern mining operations, including those promulgated 
under the Surface Mining Control and Reclamation Act and the Clean 
Water Act. In addition, it is important to note that states also 
regulate the environmental impact of mining under a variety of state 
laws and programs. Finally, the National Research Council generated a 
report entitled ``Hardrock Mining on Federal Lands'' in 1999, at the 
request of Congress, in order to assess the adequacy of the regulatory 
framework for hardrock mining on federal lands . The report identified 
what the Council saw as inadequacies in the regulatory framework at 
that time. This report can be found at: http://books.nap.edu/htm/
hardrock_fed_lands/index.html
    EPA supports the appropriate use of state and federal enforcement 
to assure that those regulations are being complied with . For example, 
EPA's Office of Enforcement and Compliance Assurance (OECA) has a 
national enforcement priority for FY 08--FY 10 on mineral processing 
and mining operations. This initiative is described at: http://
www.epa.gov/Compliance/resources/publications/data/planning/priorities/
fy2008priorityrcra.pdf.
    Finally, regarding the question of whether there is a problem with 
the lack of enforcement of environmental laws, it is important to 
recognize that recent pollution control and cleanup commitments 
achieved through EPA's enforcement program is evidence of EPA's strong 
commitment to the enforcement of environmental laws. For example, in FY 
07 alone, the program obtained commitments from industry, governments 
and other regulated entities to reduce pollution by nearly 900 million 
pounds. Through EPA's Superfund enforcement actions in FY 07, parties 
held responsible for pollution will invest $688 million to clean up 
sites and will reimburse $252 million to the Superfund, the highest 
total since 2001.
  Responses of Benjamin H. Grumbles to Questions From Senator Salazar
    Question 1. With regards to in situ leach extraction uranium 
mining, what are the criteria that the EPA uses to define the baseline 
level of water quality of the aquifer before mining operations begin?
    Answer. As noted in a previous answer, the Nuclear Regulatory 
Commission (NRC) licenses uranium mills and ISL facilities under the 
authority of the Atomic Energy Act. NRC regulates all site operations 
including the injection of fluids using environmental and ground water 
protection standards developed by EPA in accordance with the Uranium 
Mill Tailings Radiation Control Act (UMTRCA).
    In accordance with UMTRCA, in setting out standards in 40 CFR Part 
192, which must be utilized by the NRC or its Agreement States in their 
own regulations and licenses for uranium extraction facilities, EPA 
utilized the regulatory requirements developed [(under what is now the 
Resource Conservation and Recovery Act (RCRA)] for hazardous waste 
facilities. The requirements are that the license permit establishes 
the baseline ground water concentration limits for hazardous 
constituents during processing operations and prior to closure. The 
concentration limits, in accordance with RCRA regulatory requirements, 
are either the existing background levels, or the EPA drinking water 
Maximum Contaminant Levels (MCLs) set under the Safe Drinking Water Act 
(plus a standard for molybdenum), whichever are higher. The EPA 
regulations also require the establishment of a point of compliance, 
ground water monitoring, and corrective actions.
    The NRC's extensive application requirements for establishing 
existing ground water conditions in order to obtain a uranium source 
materials license are listed in 10 CFR Part 40, and its associated 
Appendix A, as well as NRC's guidance documents for approving ISL 
license applications. We are working closely with the NRC as they 
develop revisions, specifically for ISL facilities, to their existing 
ground water regulations to ensure that they incorporate EPA regulatory 
requirements developed under UMTRCA and are consistent with EPA 
regulations for UIC Class III injection wells.
    Question 2. To what condition does the EPA require the aquifer be 
remediated and how is this condition verified?
    Answer. EPA's regulations implementing UMTRCA in 40 CFR Part 192, 
require hazardous ground water contaminants to be restored to 
background or MCLs (plus a separate standard for molybdenum), whichever 
is higher. This standard is applied to the underground extraction area, 
regardless of whether or not it is or has been determined to be an 
exempted aquifer under the SDWA. If achieving these standards are 
deemed impossible or impractical after demonstrated restoration efforts 
by the ISL facility license operator, that operator can apply to the 
NRC, or Agreement State, for use of ``Alternate Concentration Limit 
(ACL)'' determinations for a contaminant.
    The NRC or Agreement State can approve the application if they can 
determine that the ACL is as low as reasonably achievable, after 
considering practicable corrective actions, and that it will not pose a 
substantial present or potential hazard to human health or the 
environment, as long as the alternate concentration limit is not 
exceeded. Acceptance of an ACL can only be agreed to after a rigorous 
19 criteria review by NRC or the Agreement State (under RCRA 
regulations for hazardous waste facilities) is applied.
    Under UMTRCA, the NRC (and its Agreement States), not EPA, is 
responsible for oversight and verification of the license restoration 
effort. Verification of the restoration by the ISL facility operator is 
based on the requirements in EPA regulations that a rigorous detection 
monitoring and reporting program must be established in accordance with 
40 CFR 264.97 and 264 .98 which were established under RCRA. The NRC 
has adopted these standards and requirements in its current 10 CFR Part 
40 regulations . The facility operator must determine whether there is 
statistically significant evidence of contamination for any chemical 
parameter or hazardous constituent using the frequency of monitoring 
specified in the permit (license). Should contamination be found, NRC 
or an Agreement State requires detailed action for further restoration 
and compliance.
    Question 3. Is the remediation condition codified in statute?
    Under UMTRCA, the Atomic Energy Act (AEA), Section 83 (Ownership 
And Custody of Certain Byproduct Material and Disposable Sites) was 
amended to state that the Nuclear Regulatory Commission is responsible 
`` . . . for any activity which results in the production of any 
byproduct material . . . shall contain terms and conditions as the 
Commission determines to be necessary to assure that, prior to 
termination of such license-(I) the licensee will comply with 
decontamination, decommissioning, and reclamation standards prescribed 
by the Commission for sites (A) at which ores were processed primarily 
for their source material content and (B) at which such byproduct 
materials deposited . . . ''
    Under UMTRCA, the AEA, Section 84 (Authorities of Commission 
Respecting Certain Byproduct Material) was also amended to state that 
``[t]he Commission shall insure that the management of any byproduct 
material . . . , is carried out in such manner as-(1) the Commission 
deems appropriate to protect the public health and safety and the 
environment from radiological and nonradiological hazards associated 
with the processing and with the possession and transfer of such 
material, (2) conforms with applicable general standards promulgated by 
the Administrator of the Environmental Protection Agency under section 
275, and (3) conforms to general requirements established by the 
Commission, with the concurrence of the Administrator, which are, to 
the maximum extent practicable, at least comparable to requirements 
applicable to the possession, transfer, and disposal of similar 
hazardous material regulated by the Administrator under the Solid Waste 
Disposal Act, as amended.''
    UMTRCA further amended the AEA by inserting a new section 275 
``Health And Environmental Standards For Uranium Mill Tailings.'' That 
section required EPA to develop, for these facilities, the 
environmental protection standards which are now embodied in 40 CFR 
Part 192, and incorporate to the maximum extent possible, the 
requirements developed by the Agency under the Solid Waste Disposal Act 
(now RCRA). These standards include the requirements for site and 
ground water remediation.
                                 ______
                                 
    Responses of David W. Geiser to Questions From Senator Bingaman
    Question 1. I am interested in how any new hardrock AML program 
should interface with the uranium mill tailings program under the 
Uranium Mill Tailings Radiation Control Act (UMTRCA). Are any of the 
sites covered under the UMTRCA program in proximity to abandoned 
uranium mines that could be eligible for reclamation under a new 
hardrock AML program? If so, should funds under a new hardrock AML 
program be used for remediation of the uranium mine site or the uranium 
processing site? Are UMTRCA funds currently applied to abandoned 
uranium mines when they are in proximity to sites with uranium mill 
tailings. How would the agencies coordinate their efforts?
    Answer. There are a number of UMTRCA sites in proximity to 
abandoned uranium mines. Some of these sites include the Monument 
Valley, Arizona site (Title I); the Northeast Church Rock, New Mexico 
site (Title II), and the Shirley Basin South and the Pathfinder sites 
(Title II) in Wyoming. The Title II sites identified above are under 
remediation by the current landowner and may be transferred to the 
Department of Energy, Office of Legacy Management for long-term 
surveillance and maintenance after reclamation is complete.
    Other Federal agencies have ongoing AML programs, and we defer to 
them on the authorization or expansion of these existing programs. As 
such, DOE does not currently have a position on whether or how 
reclamation of either the mines sites or processing sites should be 
included under Abandoned Mine Lands (AML) programs. However, we assume 
that the intent of any new AML legislation is to address priority 
abandoned sites, and funds should not be authorized to cover the 
cleanup of sites where another party may still be responsible for 
funding the cleanup. We note that cleanup of existing uranium milling 
sites are currently covered under the Uranium Mill Tailings Radiation 
Control Act (UMTRCA) under Title II.
    UMTRCA funds are not authorized for use in the cleanup of abandoned 
uranium mine sites. DOE used funds provided under the authority of the 
Atomic Energy Act of 1954, as amended, for the reclamation of legacy 
(prior to 1974) mines on the lease tracts that are covered under the 
Department's Uranium Leasing Program. Since 1974 all Uranium Leasing 
has included a requirement for the lease holder to reclaim any 
disturbance and to post a performance reclamation bond so DOE could 
perform the work if the lessee is unable to reclaim the mine.
    DOE's authority for the surface cleanup of mill related wastes 
under Title I of UMTRCA expired in 1998. Groundwater cleanup under 
Title I of UMTRCA continues indefinitely. The cleanup of mill related 
wastes under Title II by private licensees is ongoing, but does not 
involve DOE action until after cleanup is completed. There is no 
regulating authority for DOE to affect a mine site cleanup other than 
mines associated with the Department's Uranium Leasing Program. Any 
future coordination effort involving DOE and other Federal agencies 
would be determined by the authorities and actions planned by those 
agencies.
    Question 2. Does the reclamation of abandoned uranium mine sites 
involve any unique concerns or additional action or expense compared to 
the reclamation of other hardrock mine sites?
    Answer. DOE has very limited knowledge of the reclamation of non-
uranium hard rock mines; DOE expertise is limited to the uranium mines 
covered under the Department's uranium leasing program. DOE has 
reclaimed all of its legacy uranium mines on the withdrawn public land. 
DOE requirements for reclamation of the current uranium mines include: 
returning all stockpiled ore and waste piles to the mine; closure of 
the mine openings; and, compliance with all environmental laws and 
regulations for the individual lease tract including revegetation with 
native plants. The requirements are provided in the attached sample 
lease.
    Question 3a. I am interested in the DOE-administered leasing 
program for uranium. Is there any reason that uranium shouldn't be 
leaseable as are other energy minerals, as opposed to locatable under 
the Mining Law of 1872?
    Answer. DOE is authorized to utilize withdrawn public lands and 
conduct the uranium leasing program under Section 67 of the Atomic 
Energy Act (10 CFR Part 760). This legislation sets forth the 
parameters for the DOE uranium leasing program. DOE has very limited 
knowledge of the 1872 Mining Law and is not able to comment on whether 
or not certain minerals should be declared leaseable or locatable.
    Question 3b. What royalty rates are paid on the uranium produced 
from federal lands under this program?
    Answer. The DOE lessees pay a base royalty that is determined based 
on the size of the lease tract and the estimated quantity of the 
uranium ore reserves. In addition, the lessees pay a production royalty 
on the dry ore tonnage extracted for uranium and vanadium and this 
royalty payment is further determined using a weighted average of the 
spot market and long-term contract prices for uranium and the quarterly 
average for vanadium. Historic lease rates have ranged between 4 and 
37%. DOE has 19 lease tracts being solicited for mining at this time. 
We expect the bids to be similar to the historical range.
    Question 3c. What rentals are required?
    Answer. No rental is included in the DOE Uranium Leasing Program. 
DOE leases include charges for base and production royalties.
    Question 3d. Please describe the type and level of financial 
assurances required.
    Answer. DOE evaluates the scope and cost of all reclamation needed 
to close a mine and reclaim the surface disturbance. The lessee is 
required to post a performance reclamation bond so DOE could perform 
the work if the lessee is unable to reclaim the mine. Part of the due 
diligence of the initial bid evaluation is that DOE requests a 
statement of financial surity, showing the ability of the bidder to 
perform under the provisions of the lease contract.
    Question 3e. How many years is the lease term?
    Answer. The lease term is for ten years.
    Question 3f. Please provide a copy of a standard uranium lease for 
the record
    Answer. The lease template is attached for your use. Specific 
environmental stipulations from the Programmatic Environmental 
Assessment are added to the individual lease tracts where they apply.
     Response of David W. Geiser to Question From Senator Domenici
    Question 1. Your testimony discusses a massive exploration program 
that was undertaken to identify mineral deposits on 460,000 acres of 
land that were withdrawn for Atomic Energy Commission lease sales. Only 
27,000 of the 460,000 acres were ultimately retained for this program.
    As hardrock exploration has traditionally been an activity 
undertaken by private companies, I would like to know how much, in 2008 
dollars, that federally-run exploration program cost.
    Can you describe how important those federally-run exploration 
activities were to the Department's ability to carry out an effective 
leasing program?
    Answer. This extensive exploration program was a joint effort using 
appropriated dollars in the 1940s and 1950s to identify those areas on 
public lands that had potential for domestic uranium production. After 
evaluation, only 27,000 acres were retained for the actual uranium 
leasing program, and all other lands were relinquished back to the 
public domain. This was done at the time the original Public Land 
Orders were withdrawn by the Bureau of Land Management for the 27,000 
acres, which occurred in the March 25, 1948, to December 12, 1951, time 
frame.
    We do not have accurate information related to the costs associated 
with the exploration program. Most of the activities were performed by 
U. S. Geological Survey, and this activity occurred in the 1940s and 
1950s.
    The information from that original exploration program was used in 
the past, and is used today, to estimate the quantity of ore reserves 
in the lease tracts. This information is used in determining the base 
royalty for the individual lease tracts, and also aids the bidders and 
the program in the end as the bidders offer a higher royalty percentage 
on those tracts with higher estimated ore reserves.
                                 ______
                                 
     Responses of David Ulibarri to Questions From Senator Domenici
    Question 1. As a State Senator for New Mexico, you are clearly 
aware of the potential economic benefits of uranium mining for your 
constituents. For example, you have told this committee that uranium 
mining accounted for 44 percent of the income and gross receipts taxes 
in Cibola and McKinley Counties during 1979. How does the impact of 
current plans for New Mexico uranium production compare to the impact 
in 1979?
    Answer. The impact of current plans for New Mexico uranium 
production will compare very favorably to the positive economic 
benefits the Grants Mineral Belt experienced through the 1970s. Current 
plans call for at least 10,000 tons per day milling capacity which 
would conservatively result in over 14 million pounds of annual uranium 
production in New Mexico. This amount of production will require 
between 2000-3000 direct employees. These employees will include mine 
engineers, geologists, lab technicians, welders, heavy equipment 
operators and other trained high-paying jobs. As was the case in 1979, 
indirect employment should exceed the direct employment created by the 
uranium industry.
    I reasonably expect that the gross receipts taxes and total 
severance, resource, excise, and conservation taxes created from this 
industry will provide substantial revenues to McKinley, Cibola, and 
Sandoval Counties and the State of New Mexico. This is especially 
important for the state, as oil and gas revenues are beginning to 
decline. The total infrastructure investment in building mines and 
mills will certainly exceed $1 Billion. The direct employee payroll 
should easily exceed $250 million on an annual basis. These types of 
economic benefits will provide our area an economic resurgence that can 
promote the health, education and welfare of our citizens.
    At the request of New Mexico State officials, the New Mexico 
operators have commissioned a study from the Arrowhead Center at New 
Mexico State University on the economic impacts that planned uranium 
production will have in our area. This study should be available in 
mid-April and I will see that a copy is sent to you.
    Question 2. Your AML bill was vetoed by Governor Richardson. Are 
you aware of any similar legislation being considered by other states 
in the Four Corners or greater Rocky Mountain region?
    Answer. The AML bill that I proposed was in direct response to the 
New Mexico uranium operators' willingness to step up to address the 
legacy issue of' abandoned uranium mines and sites. I am not aware of 
any similar legislation being considered by other states in the Four 
Corners or greater Rocky Mountain region. However, I understand 
Colorado has a state program to reclaim former uranium sites on the 
Colorado Plateau and Wyoming has used federal money to accomplish 
abandoned uranium mine reclamation.
    I believe the federal government has a definite responsibility to 
assist in the reclamation of the legacy sites. These mines and small 
operator operations were developed in response to the Atomic Energy 
Commission's efforts to obtain uranium for America's defense program. 
These mines and operations were operated before the regulation, closure 
and bonding requirements of modern mining were practiced. While future 
uranium operators are not responsible for the past abandoned mines, in 
New Mexico they have expressed agreement to assist in funding the 
reclamation of these sites. I believe a combination of federal and 
state funding (assisted by future producers) is necessary to 
successfully address this issue.
    Question 3. Do you plan to reintroduce your legislation in the 
future, perhaps after the completion of the New Mexico Mining and 
Minerals Division study?
    Answer. I will work with the Governor's Office to determine whether 
the timing is right to reintroduce my legislation next year. I am 
hopeful that once Governor Richardson understands the willingness of 
New Mexico's current uranium operators to assist in reclaiming the 
impacts of past uranium mining--impacts which these modern day 
companies did not create--the Governor will get behind this bill. The 
New Mexico Milling and Minerals Division study will produce valuable 
information on the scope of the abandoned uranium mines issue and I am 
pleased to have been the catalyst for this study.
    While the New Mexico Legislature overwhelmingly approved my 
legislation with bipartisan support, those opposing the resumption of 
uranium milling advanced a campaign that the surtax on future 
production was not large enough. I do not agree with this assertion 
because, (1) it was never my intention that future production be solely 
responsible for all abandoned mine cleanup; and, (2) I believed that 
the proposed surtax and use of one-half of the resource excise tax 
would produce a significant amount of money to address the abandoned 
mine issue in the state. For example, the Navajo Nation reclaimed 917 
out of 1,036 abandoned mines on the reservation for approximately $23 
Million.\1\ My legislation would produce approximately $8 Million 
annually based upon production of 10 million pounds of uranium per 
year. The funds derived from my proposed legislation can make 
substantial headway towards reclaiming the abandoned uranium sites in 
New Mexico.
---------------------------------------------------------------------------
    \1\ See Office of Surface Mining Reclamation and Enforcement Annual 
Evaluation Report, Navajo Nation Abandoned Mined Lands Reclamation 
Program, June 2005.
---------------------------------------------------------------------------
    As I listened to the abandoned mines panel at the Senate hearing, 
it became obvious to me that finding, a fair way to pay for abandoned 
mine reclamation is a very challenging issue. It is unfair to unduly 
burden today's mining companies with a punitive abandoned mine 
reclamation funding scheme. On the other hand, it seems clear to me 
that mining today can and should play a role in addressing the 
abandoned mines issue. I would like to commend Senators Bingaman and 
Domenici for their introduction of S. 2779 to assist in obtaining 
federal abandoned mines payments that should be available to the state. 
This combination of federal money and a modest surtax on future uranium 
production could provide sufficient funding to solve the abandoned 
uranium mine problem in New Mexico. I look forward to working with you 
to achieve this solution.
                                 ______
                                 
   Responses of Charles L. Miller to Questions From Senator Bingaman
    Question 1. Please describe the process by which the Commission 
coordinates with BLM (or other federal land management agencies) in 
licensing uranium recovery and processing facilities on federal lands.
    Answer. The Nuclear Regulatory Commission (NRC) staff recognizes 
the importance of early consultation and coordination with the 
applicable Federal agencies so that each agency can meet its regulatory 
responsibilities while minimizing, to the extent possible, any 
duplication of effort. When considering license applications for 
uranium recovery and processing facilities on Federal land, the NRC 
primarily uses our environmental review process to coordinate with 
other applicable Federal agencies. This environmental review process is 
carried out in accordance with NRC's regulations under 10 CFR Part 51 
that implement the requirements of the National Environmental Policy 
Act (NEPA), as amended. As part of its NEPA reviews for site-specific 
licensing actions, the NRC conducts the consultation required under the 
National Historic Preservation Act, the Endangered Species Act, and 
other applicable acts. NRC engages the Bureau of Land Management (BLM) 
and/or other relevant Federal agencies in this process when the 
proposed facility involves Federal land.
    Specific examples of NRC's coordination with other Federal agencies 
on uranium recovery applications include: (1) the 1997 Environmental 
Impact Statement (EIS) for the Crownpoint, New Mexico, in situ leach 
(ISL) project; and (2) a 2003 Programmatic Agreement (PA) for the Gas 
Hills ISL project site. The Bureau of Land Management (BLM) and the 
Bureau of Indian Affairs were Cooperating Agencies [Cooperating 
Agencies are those with jurisdiction by law or having special expertise 
(40 CFR 1501.6).] with the NRC in the preparation of the Crownpoint EIS 
with respect to any environmental issue which should be addressed. For 
the Gas Hills project, the NRC and the BLM developed the PA to address 
the management of cultural resources at the project in accordance with 
the Section 106 of the National Historic Preservation Act. The NRC 
staff has initiated early discussions with BLM staff regarding the 
coordination that will be necessary for future uranium recovery sites.
                             isl operations
    Question 2. Please describe in-situ leaching (ISL) operations. How 
many acres of land do these operations cover? What facilities are 
typically part of these operations?
    Answer. ISLs extract uranium by drilling wells into and around an 
ore body. Some of the wells are used to inject a liquid solution that 
dissolves the uranium (barren), while other wells extract the solution 
containing uranium (pregnant). Additionally, monitoring wells are 
placed to detect any underground excursions of solution away from the 
production zone.
    The barren solution consists of native groundwater that is usually 
fortified with oxygen and sodium bicarbonate. This solution dissolves 
uranium from the ore. Dissolved uranium remains in solution while it is 
extracted and conveyed to the processing plant. After uranium is 
removed from the pregnant solution, the barren solution is refortified 
and re-injected into the subsurface, except for a small portion called 
the bleed.
    The bleed is approximately one to three percent of the groundwater 
that is diverted and is usually disposed of in a deep injection well or 
evaporation pond. The bleed serves to ensure that the extraction flow 
is greater than the injection flow. This induces a net flow of 
groundwater towards the ore body and helps preclude solution from 
migrating away.
    Once pregnant solution is extracted from the ore body, it is 
conveyed to a processing plant. Processing includes stripping the 
uranium from the solution using ion exchange columns that concentrate 
the uranium on resin beads, stripping the uranium from the resin, 
precipitating the uranium, and drying it to form yellowcake, the final 
step in the process. At some sites, only a portion of the processing 
chain may be performed. For example, some ISL operations may only 
concentrate the uranium on resin beads, then transport the loaded ion 
exchange columns to a central processing plant for final processing 
into yellowcake.
                              size of isls
    The major factor governing the size of the facility is the size and 
extent of the ore body. Overall business and financial strategies of 
the ISL owner could also contribute to facility size. The NRC-licensed 
areas vary in size from 5,000 acres to over 50,000 acres.
                               facilities
    Typical equipment found in an ISL processing plant includes: ion 
exchange columns with resin, precipitation tanks, precipitate 
thickeners, vacuum dryers, and various chemical storage tanks. Typical 
chemicals stored at ISLs include oxygen, carbon dioxide, hydrogen 
peroxide, sodium chloride (salt), sodium hydroxide, hydrochloric acid, 
and sodium bicarbonate. Other areas in the plant include offices, a 
laboratory, and a control room.
    Outside the processing plant, the major facilities are the well 
houses that are used to control flows in individual wells, evaporation 
ponds, and maintenance buildings. Some ISLs may also construct 
ancillary treatment units outside the main plant to treat water as part 
of the well field restoration process.
    Question 3. How many in-situ leach (ISL) operations has your agency 
permitted on federal lands? How many applications do you expect on 
federal lands? Please provide a list for the record.
    Answer. Of the four ISLs currently licensed by NRC, three are, at 
least partially, on Federal lands. They are:

   Hydro Resources, Inc. in McKinley County, New Mexico
   Cogema Mining, Inc. in Johnson and Campbell Counties, 
        Wyoming
   Power Resources, Inc. (PRI) in Wyoming

    The PRI license includes the following ISL facilities and 
satellites, all of which are, at least partially, on Federal lands:

   Smith Ranch-Highland in Converse County, Wyoming
   Ruth in Johnson County, Wyoming
   North Butte in Campbell County, Wyoming
   Gas Hills in Fremont and Natrona Counties, Wyoming
   Reynolds Ranch in Converse County, Wyoming

    To date, NRC has received three applications for new ISLs, all of 
which are, at least partially, on Federal lands:

   UR-Energy Corp's Lost Creek site in Sweetwater County, 
        Wyoming
   Uranerz Energy Corp's Nichols Ranch and Hank sites in 
        Johnson and Campbell Counties, Wyoming
   Energy Metals Corp's Moore Ranch site in Campbell County, 
        Wyoming

    NRC staff is currently aware of six potential applications for ISLs 
that are, at least partially, on Federal lands:

   UR-Energy Corp's Lost Soldier site in Sweetwater County, 
        Wyoming
   Energy Metals Corp's JAB and Antelope sites in Sweetwater 
        County, Wyoming
   Wildhorse Energy's Sweetwater site in Sweetwater County, 
        Wyoming
   Wildhorse Energy's West Alkali Creek site in Fremont County, 
        Wyoming
   Strathmore Minerals' Sky site in Fremont County, Wyoming
   Uranerz Energy Corp's Collins Draw site in Johnson and 
        Campbell Counties, Wyoming

    Additionally, Strathmore Minerals has informed the NRC of its 
intent to submit an application for a conventional mill or heap leach 
facility at its Gas Hills site in Fremont County, Wyoming, that is 
partially on Federal land. Heap leaching is a method of extracting 
uranium from ore using a leaching solution. Ore, reduced to gravel 
size, is placed in a pile on an impervious material (e.g., plastic, 
clay, asphalt) with perforated pipes under the pile. Acidic solution 
(generally sulfuric acid) is then either sprayed or dripped over the 
ore, dissolving the uranium, which is collected in the perforated 
pipes. The uranium in solution is, subsequently, transferred to an ion-
exchange system that strips the uranium from the solution.
    Currently, the only Agreement State with licensed ISL sites is 
Texas. The Texas licensees are all located on private lands. The 
potential applicants for in-situ facilities in Texas would also be 
located on private lands. The only other potential in-situ application 
in an Agreement State would be in Colorado, mainly located on private 
land with some fringe areas located on State land.
    Question 3a. Will these facilities be located on uranium mining 
claims and millsites?
    Answer. The NRC cannot say whether or not ISL facilities will 
always be located on mining claims because the NRC does not have 
authority to grant mining claims. However, the NRC views any ISL 
facility processing uranium ore primarily for its source material 
content as a uranium mill; therefore, such facilities will always be on 
mill sites. Occasionally an ISL facility could be developed near or 
associated with a conventional milling facility. However, this has only 
occurred once in the recent past (Highland uranium in-situ and mill in 
Wyoming). As indicated in Response 4 below, uranium milling typically 
occurs in close proximity to uranium mining.
    Question 4. What factors go into the siting of these facilities 
generally? What are the NRC's considerations in determining whether to 
approve the siting of a proposed in-situ leaching facility or 
processing facility?
    Answer. The siting of an ISL is dependent on the location of the 
ore body to be processed. The well fields must follow the ore body in 
order to extract uranium. The central processing plant is usually 
located nearby. The primary siting consideration in NRC's licensing 
review is whether the extraction zone can be isolated from aquifers 
above, below, and adjacent to it. Surface characteristics are also 
considered in both the safety review (e.g., to ensure that facilities 
are adequately protected from natural phenomena and that effluent 
releases will be protective of the public) and the environmental review 
(e.g., to ensure that endangered species are not adversely impacted or 
that historical artifacts are not disturbed).
    Conventional mills are sited near mining areas to reduce the costs 
of hauling the ore. NRC considers surface characteristics similar to 
those discussed above for ISLs. In addition, NRC must be assured that 
tailings impoundments can be safely built on the proposed site. This 
involves detailed reviews of site hydrology (both surface and 
groundwater), geology, seismology, and meteorology.
    Question 4a. Has the NRC ever denied a license for an ISL facility? 
For a conventional processing facility?
    Answer. No. The NRC has not received a conventional mill 
application within the last 20 years. During this same period of time, 
NRC has not denied a license for an ISL. However, a number of license 
applications for ISL have needed to be significantly modified during 
the licensing process to be acceptable.
    Question 5. I am interested in how any new hardrock AML program 
should interface with the uranium mill tailings program under the 
Uranium Mill Tailings Radiation Control Act (UMTRCA), Are any of the 
sites covered under the UMTRCA program in proximity to abandoned 
uranium mines that could be eligible for reclamation under a new 
hardrock AML program? If so, should funds under a new hardrock AML 
program be used for remediation of the uranium mine site or the uranium 
processing site? Are UMTRCA funds currently applied to abandoned 
uranium mines when they are in proximity to sites with uranium mill 
tailings? How would the agencies coordinate their efforts?
    Answer. NRC does not regulate hardrock uranium mines. However, the 
following information may be helpful to understand the NRC's role:

    The UMTRCA Title I program to remediate abandoned uranium mills is 
being implemented by the Department of Energy (DOE). Surface 
reclamation has been completed at all Title I sites except for the 
former Atlas Corporation mill near Moab, Utah, that was added to the 
program in 2001. NRC is currently reviewing DOE's proposed remedial 
action plan for that site. Additionally, DOE is implementing 
groundwater cleanup activities at most of the Title I sites.
    Under the UMTRCA Title II program, NRC or Agreement State licensees 
are responsible for remediating the sites after termination of uranium 
milling operations. Several of those sites may be near abandoned 
uranium mines.
    Responsibility for the remediation of the American Nuclear 
Corporation (ANC) Gas Hills site in Fremont County, Wyoming, was 
assumed by the State after ANC declared that it was unable to do so and 
forfeited its surety bond to the State. The State has used the funds to 
remediate a portion of the site but the funds remaining may not be 
sufficient to complete the remediation. There are several abandoned 
uranium mines adjacent to this mill site.
    NRC will continue its role in coordination with other Federal 
agencies under UMTRCA for the affected sites.
    Question 6. What concerns must be addressed regarding water quality 
impacts prior to the issuance of a license for an ISL or conventional 
processing facility? What regulations are currently in place that 
address this? Please provide citations.
    Answer. An applicant for a license to construct and operate an ISL 
must address water quality impacts associated with actual operations 
and the restoration of water quality after uranium recovery. Regarding 
operational water quality, impacts could occur due to migration of 
contaminated groundwater away from the recovery zone or leaks in wells 
and pipes.
    As indicated in Response 2 above, applicants address the potential 
for groundwater migration with excursion monitoring networks. 
Applicants propose monitoring well networks near the ore zone and in 
aquifers above and below the ore zone. Wells in these networks are 
sampled to detect excursions in the earliest stages. Applicants must 
also describe methods that will be used to correct the situation if an 
excursion is detected.
    NRC performs an independent review and analysis of each applicant's 
proposed ISL to ensure that the regulations (identified at the end of 
this response) are met. The NRC review and analysis are documented in a 
Safety Evaluation Report (SER).
    The potential for system leaks and failures are addressed through 
various means, such as periodic mechanical integrity tests of wells, 
production line sensors, and sampling shallow monitoring wells. Sensors 
in production lines alert operators to the potential for leaks, and 
sampling shallow monitoring wells serve to detect major surface or 
shallow subsurface leaks.
    ISL operators must restore groundwater in a well field after the 
ore body is depleted. The NRC restoration regulations conform to the 
standards developed by the Environmental Protection Agency (EPA) as 
required by UMTRCA of 1978. An applicant for an ISL license, therefore, 
must present the restoration methods it plans to employ, estimates of 
the duration of restoration, and the quantity of water required for 
restoration.
    Additionally, in order to construct and operate an ISL, a permit 
must first be obtained from EPA or an EPA-authorized State, under the 
underground injection control program.
    At conventional mills, the primary water quality concern is the 
potential for contaminated water to seep from the tailings impoundment 
to the uppermost aquifer. Additionally, other areas of the mill have 
the potential to contaminate groundwater. An applicant for a license to 
construct and operate a conventional mill must address the potential 
for contamination of groundwater through the design of the mill and 
tailings impoundment, operating procedures, and monitoring programs. 
For example, tailings impoundments must be designed with liners to 
prevent contamination from seeping into the groundwater and may include 
leachate collection and leak detection systems. An applicant must also 
propose detection monitoring well networks designed to determine if 
seepage from the tailings impoundments or other mill operations has 
gotten into the groundwater. Additionally, applicants must describe the 
covers that will be placed over tailings impoundments to control 
infiltration of precipitation after closure to prevent contaminants 
seeping into the groundwater in the future, and the equipment and 
systems to prevent and detect spills and releases before groundwater 
pollution occurs. Similar to the case for an ISL, NRC performs an 
independent review and analysis of a proposed conventional mill and 
documents it in an SER.
    Requirements for protecting groundwater at conventional mills and 
ISLs are found in 10 CFR Part 40, Appendix A. The following list 
presents specific regulations for the protection of groundwater:

          Criterion 5--Groundwater Protection Standards
          Criteria 5A(1) and (2)--Impoundment Liner Requirements
          Criteria 5A(4) and (5)--Impoundment Operation Requirements
          Criterion 5B(1)--Requirement to Prevent Groundwater 
        Contamination
          Criterion 5B(2)--Designation of Hazardous Constituents
          Criterion 5B(5)--Groundwater Protection Standards
          Criterion 5D--Corrective Action Program Requirements
          Criterion 5E--Need to Consider Leak Detection, Mill 
        Processes, Tailings
                  Dewatering
          Criterion 5F--Requirement to Alleviate Seepage at 
        Contaminated Sites
          Criterion 7--Preoperational Baseline Monitoring Requirements
          Criterion 7A--Detection Monitoring Requirements

    Question 7. What type and level of financial assurances does the 
NRC require for in-situ leaching operations? For traditional uranium 
milling facilities?
    Answer. For both ISLs and conventional mills, NRC requires 
financial surety. This requirement appears in Criterion 9 of 10 CFR 
Part 40, Appendix A. The amount of the surety must be sufficient to 
allow an independent contractor to remediate the facility and site to 
NRC standards in the event that the licensee is unable to do so. 
Acceptable financial surety arrangements include surety bonds, cash 
deposits, certificates of deposit, deposits of government securities, 
and irrevocable letters or lines of credit.
    For conventional mills, the main components of the cost estimate 
for the surety are decontamination and/or decommissioning of buildings 
and soils, reclamation of the tailings impoundments, and cleanup of 
groundwater. For ISLs, the primary component of the surety cost 
estimate is restoration of groundwater quality in the mining zone.
    Additionally, criterion 10 of 10 CFR Part 40, Appendix A, requires 
that prior to license termination, the licensee pay a charge to cover 
the costs of long-term surveillance by the government long-term 
custodian. Criterion 9 requires that this charge be included in the 
financial surety.
    Response of Charles L. Miller to Question From Senator Domenici
    Question 7. If a uranium mining claim is located on federal lands 
and the plan of operations includes a proposal to build a mill site on 
the property that does not meet NRC standards, can your agency 
intervene and say ``no'' to the construction of such a facility?
    Answer. Under the circumstances you describe, there is no need for 
NRC to seek intervention. If a commercial entity seeks to build a 
uranium mill in the United States on Federal, State, or private land, 
it must obtain approval from either an appropriate Agreement State or 
the NRC before any site work is authorized. In order to build a mill in 
the United States, a license from NRC or an Agreement State is needed. 
The NRC requirements for issuance of a license applicable to uranium 
milling include those set forth in 10 CFR 40.32. These requirements 
authorize NRC to deny any request for a uranium mill license if the 
applicant begins constructing its facility before the NRC makes a 
licensing determination. Agreement States must regulate uranium mills 
in accordance with State standards that conform to NRC standards. Both 
NRC and Agreement States would license the construction of a uranium 
mill by evaluating the license application against these standards as 
well as additional site specific standards in the form of license 
conditions.
                                 ______
                                 
    Responses of Robin M. Nazzaro to Questions From Senator Bingaman
    Question 1. Your testimony lists the estimated number of sites with 
environmental degradation. How did you define ``environmental 
degradation?''
    Answer. We defined sites with environmental degradation as those 
with features (such as shafts, open pits, waste rock piles, or tailings 
ponds) leading to air, water, or ground pollution. We developed this 
definition by working with officials with the National Association of 
Abandoned Mine Land Programs, the Interstate Mining Compact Commission, 
and the Colorado State Department of Natural Resources.
    Question 2. What percentage of abandoned hardrock mine sites are on 
federal lands?
    Answer. Because of limitations in the available data, we are unable 
to determine the percentage of abandoned hardrock mines that are on 
federal lands. The Bureau of Land Management (BLM) and the Forest 
Service estimates of the number of abandoned hardrock mines on the 
lands they manage include some non-hardrock mines, such as coal, and 
some mines that may not be on federal lands. Similarly, the states' 
estimates often cover all of the mines within their borders regardless 
of land ownership, and as such, include mines on federal, state, and 
private lands. Consequently, because of these limitations, including 
the overlap in these existing estimates, determining the percentage of 
abandoned hardrock mines on federal lands is problematic.
    Question 2a. Are clean-up efforts on federal lands adequately 
funded?
    Answer. We have not evaluated the extent to which the clean-up of 
abandoned hardrock mines on federal lands are adequately funded.
    Question 3. The AML program for coal currently receives 
approximately $300 million per year in fee collections. Most of these 
funds are expended for coal AML work. Do you have a sense of the 
magnitude of the hardrock AML problem relative to the coal AML problem?
    Answer. We have not compared the magnitude of the hardrock 
abandoned mine problem with the magnitude of the coal abandoned mine 
problem. Such a comparison would be difficult because reliable data are 
not readily available on the number and characteristics of abandoned 
hardrock mines. In contrast, through the Office of Surface Mining 
Reclamation and Enforcement's Surface Mining Control and Reclamation 
Act (SMCRA) program, states have systematically inventoried and 
characterized their abandoned coal mines.
    Question 3a. What is an appropriate level of funding for the 
hardrock AML program?
    Answer. We have not conducted the work necessary to answer this 
question.
    Question 4. Your testimony indicates that current financial 
assurances for hardrock mines on BLM lands are sometimes inadequate--
and that operators on BLM lands currently have about $61 million less 
in financial assurances than needed to cover estimated reclamation 
costs.
    How do you explain this?
    Answer. BLM officials told us that financial assurances can be 
listed as inadequate in their Bond Review Report for a variety of 
reasons, such as administrative delays in updating case records in 
BLM's LR2000 database. For example, a delay may occur when BLM 
increases its estimate of reclamation costs and there is a delay 
between when BLM enters the new estimate into LR2000 and when the 
operator provides the additional amount. We did not obtain and analyze 
data to determine the reason why BLM's current financial assurances are 
sometimes inadequate.
    In addition, as we reported in 2005, some existing hardrock 
operations on BLM land do not have financial assurances, and some have 
no or outdated reclamation plans and/or cost estimates, on which 
financial assurances should be based.\1\ Furthermore, financial 
assurances may be inadequate because the mining operator has failed to 
provide the required amount of financial assurances or the bonding 
company has declared bankruptcy. In our 2005 report, since BLM began 
requiring financial assurance, it had identified 48 operations on BLM 
land that had ceased operations and not been reclaimed by operators.
---------------------------------------------------------------------------
    \1\ GAO, Hardrock Mining: BLM Needs to Better Manage Financial 
Assurances to Guarantee Coverage of Reclamation Costs, GAO-05-377 
(Washington, D.C.: June 20, 2005.)
---------------------------------------------------------------------------
    Question 5. In reviewing the adequacy of financial assurances in 
place for mining operations on BLM and Forest Service lands, did you 
also review the accuracy of the agencies' reclamation cost estimates?
    Answer. No, we did not attempt to independently review the accuracy 
of the agencies' reclamation cost estimates as part of this review.
    Question 5a. Does the BLM or the Forest Service make any 
independent judgment regarding the level of financial assurances 
necessary or do they defer to the industry on the estimated costs of 
reclamation.
    Answer. Although the operators themselves generally make the 
initial estimate of the reclamation costs, BLM and the Forest Service 
review the operator's estimate and can require a greater amount before 
approving the plan of operation. In addition, as part of the National 
Environmental Policy Act (NEPA) process, EPA reviews the operator's 
estimate and offers an opinion on whether it will be sufficient to 
reclaim the site. EPA officials have told us that there have been 
instances where they found the amount of financial assurances BLM 
required would be insufficient to fully reclaim the site and that BLM 
did not increase the amount of financial assurances in response to 
EPA's concerns.
    Question 6. You also indicate that the Forest Service regulations 
do not require the posting of financial assurances but that as a matter 
of policy, financial assurances are often required. In what 
circumstances are financial assurances required?
    Answer. According to a Forest Service official, operators on Forest 
Service land must provide financial assurances whenever the Forest 
Service determines that the mining operation will cause a significant 
disturbance of surface resources.
    Question 6a. Does the Forest Service have written guidance that 
spells out this policy?
    Answer. According to Forest Service officials, although these 
requirements are not part of the Forest Service's regulations, they are 
spelled out in the Forest Service Manual (FSM 6561.4)
    Question 6b. Do you have information on the amount of financial 
assurances posted in Forest Service lands?
    Answer. No, the Forest Service was unable to readily provide us 
with this information because it does not currently track or record the 
information in a central location. Forest Service officials told us 
that they are currently working on developing a database, similar in 
purpose to BLM's LR2000 system, that will centrally track and record 
information on mining operations on lands managed by the Forest 
Service, such as the type and amount of mineral production, the type of 
financial assurance in place and the amount required, and location and 
land ownership. They expect to complete this system in summer 2008.
    Question 7. Of all the federal agencies, your testimony suggests 
EPA has by far spent the most money on abandoned mine cleanup over the 
past 10 years ($2.2 billion of $2.6 billion expended)--and that these 
funds are ``generally'' spent on nonfederal lands.
    Are there circumstances in which EPA has expended funds for 
abandoned mine cleanup on federal lands? If so, what were these 
circumstances?
    Answer. We do not know the full extent of these circumstances, 
except to note that EPA officials have told us that some cleanup 
efforts are very large and complex and may involve funding and work 
from multiple federal agencies and nonfederal groups and cover sites 
that stretch across both federal and nonfederal land. Generally EPA 
funds cleanup on nonfederal land and delegates authority to other 
federal agencies to take responsibility for cleanups on federal lands. 
However, these officials told us that in some circumstances involving 
these large and complex cleanup efforts, it is likely that some EPA 
funds have cleaned up contamination on federal land.
    In our 2005 report, as of July 2004, BLM reported that funds to 
reclaim the Zortman and Landusky mining operation came from other 
sources, including EPA.\2\ EPA provided $340, 000 in grant funds, 
primarily to prepare a supplemental environmental impact statement. The 
Zortman and Landusky gold mine is located in north-central Montana on 
about 1,200 acres, half of which are on BLM land. BLM provided 
$5,594,500, mostly from its Abandoned Mine Land Program, to help pay 
for reclamation of this mining operation after Pegasus Gold, the parent 
company, went bankrupt and did not complete the reclamation as 
required. In this case, BLM reported that the amount of financial 
assurances in place for this operation ($57.8 million) was 
significantly less than the cost estimate prepared after the operation 
ceased ($85.2 million).
---------------------------------------------------------------------------
    \2\ See GAO-05-377.
---------------------------------------------------------------------------
    Responses of Robin M. Nazzaro to Questions From Senator Domenici
    Question 1. Your testimony discusses a $61 million shortfall in 
financial assurances for mining operations on BLM lands. Do the BLM and 
the Forest Service have the authority to adjust financial assurances--
up or down--based on new information that becomes available over the 
life of the mine?
    Answer. Yes, both BLM and the Forest Service periodically review 
ongoing mining operations to determine if the estimate should be 
updated to reflect any necessary changes in the cost of reclaiming the 
mine and can require the operator to adjust the amount of financial 
assurances accordingly.
    Question 2. Your testimony provides details on AML spending for 
four agencies--the Forest Service, BLM, EPA, and OSM. Did you look at 
how much the Army Corps of Engineers has spent on AML?
    Answer. As part of our most current work, we did not review Army 
Corps ofEngineers' expenditures to clean up abandoned hardrock mines. 
However, in 2005, we reported that the U.S. Army Corps of Engineers 
(the Corps) provided about $0.8 million to clean up two mining 
operations on BLM land in Nevada, where operations had ceased and not 
been reclaimed by operators since BLM began requiring financial 
assurances.\3\ The Corps provided these funds under its Restoration of 
Abandoned Mines Sites (RAMS) program, according to BLM.
---------------------------------------------------------------------------
    \3\ See GAO-05-377.
---------------------------------------------------------------------------
     Responses of Robin M. Nazzaro to Questions From Senator Wyden
    Question 1. Ms. Nazzaro, in 2005 the Government Accountability 
Office (GAO) conducted a survey of BLM state offices regarding 
financial assurances to guarantee reclamation costs for existing 
hardrock operations on BLM land. Surety bonds, letters of credit, and 
corporate guarantees accounted for most of the assurances' value. Your 
Office's analysis found that these financial assurances may not fully 
cover all future reclamation costs for these existing hardrock 
operations if operators do not complete required reclamation 
activities. GAO recommended that BLM strengthen its management of 
financial assurances by requiring its state office directors to develop 
an action plan to ensure mine operators have adequate financial 
assurances.
    While BLM has taken steps to address some of GAO's recommendations 
regarding state directors developing action plans for financial 
assurances; has the BLM fully and adequately addressed GAO's expert 
analysis regarding strengthening the management of financial 
assurances?
    Answer. While BLM has taken steps to implement our recommendations 
by creating the Bond Review Report and having state directors' certify 
the adequacy of their financial assurances, their November 2007 Bond 
Review Report shows 52 mining operations with inadequate financial 
assurances. Where the financial assurances are determined to be 
inadequate, the state directors must report what actions they are 
taking to address the situation. As part of our most current work, we 
did not obtain and analyze data to determine why 52 operations on BLM 
land have financial assurances that are inadequate. Therefore, we do 
not know if BLM's actions in response to our recommendations ensure 
that every hardrock mining operation on BLM land has a financial 
assurance that sufficiently covers the full reclamation if the operator 
does not complete the reclamation, as required. To determine this, we 
would have to conduct a more in-depth analysis.
    In our testimony, we state that BLM's use of its Bond Review Report 
to determine the adequacy of financial assurances is not useful because 
it does not clearly lay out the extent to which financial assurances 
are inadequate. For example, in California, BLM reports that, 
statewide, the financial assurances in place are $1.5 million greater 
than required, suggesting reclamation costs are being more than fully 
covered. However, according to our analysis of only those California 
operations with inadequate financial assurances, the financial 
assurances in place are nearly $440, 000 less than needed to fully 
cover reclamations costs. BLM officials agreed that it would be 
valuable for the Bond Review Report to report the dollar value of the 
difference between financial assurances in place and required for those 
operations where financial assurances are inadequate and have taken 
steps to modify LR2000.
    Question 2. Furthermore, the Forest Service claims to require 
financial assurances for mining activities on the public lands that 
they manage. Again, in your expert opinion, is the Forest Service doing 
enough to guarantee reclamation costs for existing hardrock mining 
operations on Forest Service lands? If no, what are your 
recommendations?
    Answer. Because the Forest Service does not have readily available 
data on its financial assurances, we were not able to determine the 
degree to which these assurances adequately cover estimated reclamation 
costs. To determine the extent of the Forest Service efforts to 
guarantee reclamation of costs for existing hardrock mining operations 
on its lands, we would have to conduct an in-depth review, similar to 
the review we conducted in 2005 of financial assurances in place for 
hardrock mining operations on BLM land.\4\
---------------------------------------------------------------------------
    \4\ See GAO-05-377.
---------------------------------------------------------------------------
                                 ______
                                 

    [Responses to the following questions were not received at 
the time the hearing went to press:]
            Questions for Henri Bisson From Senator Bingaman
    Question 1. To what extent does the BLM review or independently 
verify the reclamation cost estimates provided by operating permit 
applicants?
    Question 2a. How reliable are your estimates of the number of 
abandoned hardrock mine sites are on BLM lands?
    Question 2b. How many of these sites present a threat to human 
health and safety?
    Question 2c. How many present environmental problems?
    Question 3a. GAO has indicated that BLM's median expenditures on 
hardrock AML reclamation was $5.1 million per year from 1998 through 
2007.
    Question 3b. How much would it take per year to really this problem 
in a meaningful way?
    Question 3c. How much funding would it take to address this problem 
in 10 years?
    Question 3d. What is the total estimated cost of addressing all 
abandoned hardrock sites on BLM lands?
    Question 4a. How many of the AML sites are on lands of mixed 
ownership--a combination of federal, Indian, state or private?
    Question 4b. Should this affect the design of a program to address 
hardrock abandoned mine lands?
    Question 5a. How do BLM and EPA collaborate on Superfund sites that 
involve abandoned hardrock mines on BLM lands?
    Question 5b. Does EPA use Superfund monies on these sites, or does 
the money come from BLM's budget?
    Question 6. Does BLM impose any additional or different standards 
on uranium mining operations located on BLM lands than those applied to 
other types of hardrock minerals?
    Question 7. Does the reclamation of abandoned uranium mine sites 
involve any unique concerns or additional action or expense compared to 
the reclamation of other hardrock mine sites?
    Question 8a. Are uranium mining interests entitled to millsites on 
federal lands under the Mining Law of 1872? Can uranium processing 
facilities be located on such claims? Can in-situ leaching operations 
be undertaken on mining claims and millsite claims located under the 
Mining Law of 1872?
    Question 8b. What discretion does a federal land manager have to 
prohibit the siting of these facilities where mining claims and 
millsites exist?
    Question 9. How many uranium mining claims have been located in the 
past three years?
    Question 10. Is there any reason that uranium shouldn't be 
leaseable as are other energy minerals, as opposed to locatable? Should 
we make uranium leaseable prospectively?
    Question 11a. In previous reports on the Superfund program, GAO has 
identified instances in which some mine owners have repeatedly 
defaulted on environmental liabilities associated with their mines. The 
GAO advocated that EPA take a ``risk-based'' approach in securing 
financial assurances, particularly with respect to mine owners who have 
filed ``serial bankruptcies''.
    Question 11b. Does BLM use a ``risk-based'' approach in securing 
financial assurances adequate to cover reclamation costs?
    Question 12. Does BLM have the authority to deny a plan of 
operations, if the Bureau finds that an applicant (or a subsidiary 
thereof) has failed to provide adequate financial assurances or failed 
to meet reclamation standards elsewhere on federal lands?
    Question 13. Do current financial guarantee requirements permit the 
BLM to hold on to the assurances posted by an operator, in the event 
the operator or a corporate subsidiary thereof is delinquent in meeting 
its clean-up obligations elsewhere on federal lands?
    Question 14. What is the BLM's current policyregarding approvals 
required prior to the transfer, assignment or sale of a mining claim or 
millsite or plan of operations?
            Questions to Henri Bisson From Senator Domenici
    Question 1. Ms. Nazzaro testified that 52 mines, out of the 1,463 
on BLM lands, have insufficient financial assurances. The GAO valued 
this shortfall at $61 million. Does the BLM have sufficient authority 
to adjust the bonding of these operations, up or down?
    Question 2. Is the reclamation of uranium mines unique in any 
respect?
              Questions to Henri Bisson From Senator Wyden
    Question 1. Mr. Bisson, you were a witness at the energy and 
Natural Resources Committee's January 24, 2008 oversight hearing on 
reforming the Mining Law of 1872. Ms. Deborah Tschudy of the Mineral 
Management Service in the Department of Interior; stated in her 
testimony that the Administration would prefer a hardrock mining 
royalty program that resembles the program established under the Energy 
Policy Act of 2005; royalties from hardrock mining activities might be 
used to clean-up abandoned mine lands.
    Given the serious problems identified by the Department of Interior 
Inspector General with the royalty-in-kind program for oil and gas, do 
you agree with Ms. Tschudy? Why should the same approach used by this 
troubled program be used for hardrock minerals? In particular, why 
should the BLM be given authority to reduce royalties on hardrock 
minerals given the problems that have arisen with the royalty relief 
provisions for oil and gas?
    Furthermore, at a time when recreational uses of public lands are 
increasing and the general public is being asked to pay fees to access 
these lands; isn't it unfair that mining companies can take millions of 
dollars of valuable minerals from lands owned by the American people 
without having to pay royalties?
    Question 2. Ms. Struhsacker from the Northwest Mining Association 
stated in her testimony that existing environmental regulations are 
adequate to protect human health and the environment.
    Mr. Bisson and Mr. Grumbles, as representative of BLM and EPA, 
respectively, do you agree with Ms. Struhsacker's assessment? Or is the 
problem that existing regulations such as the Surfacing Mining Rule and 
the Clean Water Act are not adequate to manage hard rock mining 
activities and any subsequent environmental damage? Or is the problem 
this Administration's lack of enforcement of environmental laws?
                                 ______
                                 
            Questions for Pat Williams From Senator Domenici
    Question 1. At our hearing in January, a witness declared that the 
existing mechanism to withdraw lands is ``far too cumbersome to work 
well'' and ``virtually useless'' as a result. But through that same 
mechanism, that same witness was able to withdraw nearly 430,000 acres 
in the Rocky Mountain Front while in charge of the Forest Service. That 
process began in 1999, just two years after you left the House of 
Representatives.
    Based upon your past experiences with mining law reform--as a 
legislator and as a Montanan--would you describe the mechanism for 
withdrawal as ineffective?
    Question 2. Your written testimony discusses in great detail the 
jobs that can be created to clean up abandoned mines. You quote CBO, 
which has stated that 14 to 33 jobs are created for every $1 million 
spent on mine cleanup. Where do you believe the money to pay for that 
clean-up and those jobs should come from?
                                 ______
                                 
         Questions for Joe Shirley, Jr., From Senator Bingaman
    Question 1a. Thank you for your testimony about the legacy of 
uranium mining on the lands of the Navajo Nation. What assistance are 
you currently getting from the Federal Government with respect to 
addressing the problems created by uranium mining?
    Question 1b. How can that be improved?
    Question 1c. How can the federal response be better coordinated?
    Question 2. The Navajo Nation currently receives some funding under 
the Surface Mining Act AML program. Are you able to use these funds for 
uranium site remediation?
    Question 3. What is the estimated cost of remediation on Navajo 
lands?
    Question 4. How many abandoned uranium mines are there on Navajo 
lands?
         Questions for Joe Shirley, Jr., From Senator Domenici
    Question 1. According to the Navajo Nation's Division of Natural 
Resources website, 913 of the 1,032 total abandoned uranium mines on 
Navajo lands have been reclaimed. Is this correct, that 88% of the 
abandoned uranium mines on Navajo lands have been reclaimed?
    Question 2. In your testimony you described the ongoing health 
problems in the Navajo Nation that you see as a legacy of uranium 
mining. The New Mexico Tumor Registry, however, suggests that cancer 
mortality for American Indians is lower than that of non-American 
Indian populations in San Juan and McKinley County. Can you provide 
this committee with citations that quantify the health problems that 
you referred to in your testimony?
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

    Statements of Laura Skaer, Executive Director, Northwest Mining 
                        Association, Spokane, WA
    Opportunities for Good Samaritan Cleanup of Hardrock Abandoned 
                               Mine Lands
                             july 13, 2006
                              introduction
    My name is Laura Skaer. I am the Executive Director of the 
Northwest Mining Association, a 112 year old non-profit mining industry 
trade association. Our offices are located in Spokane, Washington. NWMA 
has more than 1,300 members residing in 31 states and 6 Canadian 
provinces. Our members are actively involved in exploration, mining and 
reclamation operations on BLM and USFS administered land in every 
western state, in addition to private land. Our membership represents 
every facet of the mining industry, including geology, exploration, 
mining, reclamation, engineering, equipment manufacturing, technical 
services, and sales of equipment and supplies. Our broad-based 
membership includes many small miners and exploration geologists, as 
well as junior and large mining companies. More than 90% of our members 
are small businesses or work for small businesses. Our members have 
extensive first-hand experience with reclaiming active and inactive 
mine sites and remediating a variety of environmental conditions and 
safety issues at these sites.
    Our members also have extensive knowledge of Abandoned Mine Lands 
(AMLs) in the U.S. Two of our members, Debra W. Struhsacker and Jeff W. 
Todd, researched and authored a study published in 1998 by the National 
Mining Association entitled ``Reclaiming Inactive and Abandoned Mine 
Lands--What Really is Happening.'' (A copy of this study is being 
included in the record). This study documents that the mining industry 
has spent tens of millions of dollars to cleanup numerous AMLs 
throughout the west. As evidenced by this report, the mining industry 
is ready, willing and able to play a significant role in cleaning up 
abandoned and inactive mines. We are here today to ask Congress to do 
its part and enact Good Samaritan legislation that will remove the 
legal liability hurdles and provide incentives for a variety of persons 
and entities to remediate and reclaim AMLs throughout the West.
    Unfortunately, the number one impediment to voluntarily Good 
Samaritan cleanup of abandoned mine lands is the potential liability 
imposed by existing federal and state environmental laws, in particular 
the Clean Water Act (CWA), the Comprehensive Environmental Response, 
Compensation and Liability Act (CERCLA) (commonly known as Superfund), 
the Resource Conservation & Recovery Act (RCRA), and the Federal Toxic 
Substances Act. Under these laws and others, a mining company, 
individuals, or other entities that begin to voluntarily remediate an 
abandoned mine site could potentially incur ``cradle-to-grave'' 
liability under the CWA, CERCLA, and other environmental laws, even 
though it did not cause or contribute to the environmental condition at 
the abandoned mine land site.
    Furthermore, they could be required under the CWA to prevent 
discharges to surface waters from the AML in perpetuity, unless those 
discharges meet strict effluent limitations and do not result in 
exceedences of stringent water quality standards, something that may 
not be possible; and in any event, may be so expensive that no company, 
individual, or other entity would undertake a voluntary cleanup.
    Virtually everyone who has looked at the AML issue in the west has 
recognized and documented the legal impediments to voluntary cleanup of 
AMLs and have urged that those impediments be eliminated. These groups 
include the Western Governors Association, the National Academy of 
Sciences, and the Center for the American West.
    The time has come for Congress to pass effective Good Samaritan 
legislation that will create a framework, with incentives and liability 
protection for numerous entities, including mining companies, local, 
state and federal agencies, NGO's, and tribes to voluntarily remediate 
of environmental problems caused by others at abandoned hardrock mine 
sites in the U.S.
            elements of effective good samaritan legislation
    To be effective, Good Samaritan legislation must embody the 
following key provisions:

          1. Mining companies that did not create environmental 
        problems at an AML must qualify as Good Samaritans.--No one 
        knows more about reclaiming and remediating mine sites than the 
        mining industry. The mining industry has the desire, the 
        resources, expertise, experience, and technology to effectively 
        and efficiently assess the environmental and safety issues 
        present at an AML and to properly remediate, reclaim and secure 
        those sites. This often can be done in conjunction with 
        reclamation activities at nearby active mines which the company 
        operates, resulting in an efficient use of resources to improve 
        the environment and enhance public safety.
            For example, Teck Cominco American Incorporated purchased 
        the Pend Oreille Mine in Pend Oreille County, Washington in 
        1996 and brought it back into production in 2004. It is located 
        in a setting where a substantial amount of historical mining 
        took place before there were environmental laws and regulations 
        and modern mining practices. There are many abandoned mine 
        sites in the area of the Pend Oreille Mine. In working with the 
        local community, Teck Cominco determined that many of the old 
        mine openings presented a potential hazard to public safety. 
        Those that did not involve environmental issues were 
        voluntarily closed through the installation of bulkheads in 
        several of the openings.
            Teck Cominco has been approached by state and federal 
        agencies to see if it could process some of the historic waste 
        rock piles, ore piles and concentrate accumulations in the 
        area. In each and every case, the company chose not to 
        undertake this cleanup effort due to the strict nature of its 
        Clean Water Act authorization that prohibits any tailings other 
        than those generated from the Pend Oreille Mine to be placed in 
        the lined and approved tailings disposal facility. Furthermore, 
        the company is reluctant to undertake cleanup efforts at any of 
        these old sites for fear of being deemed an operator and 
        incurring cradle-to-grave liability for the site under a 
        variety of federal and state environmental laws.
            All mines run out of ore and towards the end of production 
        may look for additional sources of mineralized material to 
        process. Having the ability to augment or extend the productive 
        life of the mine benefits the mining company, the community and 
        the nation. It also benefits the environment through metal 
        source reduction as more metal will ultimately be recovered 
        from the AML sites and the resulting tailings are placed in a 
        regulated, engineered and permitted containment structure. This 
        promotes conservation of the resource and sustainable 
        development with a net improvement in the environment.
            This is but one of many, many examples of sites throughout 
        North America where existing mines are located adjacent to 
        abandoned historical mines. Another example from the Northwest 
        is Meridian Gold Company's Beartrack Mine near Salmon, Idaho. 
        Deposits from historic mining were included on the mine 
        property. As a result, Napias Creek no longer supported salmon 
        habitat. Meridian used the equipment and personnel that were 
        on-site at Beartrack to remove the tailings and waste rock 
        piles from Napias Creek and fully remediate the site and 
        restore the streambed to salmon habitat. The company won 
        several environmental awards for their work. The mine was able 
        to process tailings and waste rock materials from historic 
        mining located on the mine property (emphasis added), at the 
        Beartrack Mine, increase the ultimate recovery of metals from 
        the mine and improve the environment. A scenario where everyone 
        wins.
            I have emphasized located on the mine property to highlight 
        the important distinction between the Pend Oreille mine example 
        and the Beartrack example. The Napias Creek tailings and waste 
        rock piles were located on the mine property and covered by 
        Beartrack's operating permits. The lack of effective Good 
        Samaritan legislation has prevented, to date, the same win-win-
        win result at Pend Oreille.
            In Nevada, the mining industry initially expressed 
        interest, as Good Samaritans, in remediating and reclaiming 
        several AMLs. The AML sites included Easy Junior, Elder Creek, 
        Golden Butte, Ward, Mt. Hamilton, Griffon, Aurora Partnership, 
        Kinsley, Norse-Windfall, Arimetco and Gold Bar.
            In each case, the potential cradle-to-grave liability 
        exposure under federal environmental laws prevented the mining 
        industry from using its experience, expertise, technology, 
        equipment and capital to remediate and reclaim the AML sites.
            Four of the sites (Easy Junior, Golden Butte, Elder Creek 
        and Ward) have been and/or are being remediated under the Army 
        Corps of Engineers Restoration of Abandoned Mine Sites (RAMS) 
        program. Sadly, as good as the RAMS program is, it is not 
        adequately funded to perform complete reclamation to current 
        mining industry standards. If there was effective Good 
        Samaritan legislation in place, then these sites would have 
        been closed by the mining industry, and the final result would 
        have been more than the minimum needed to ensure basic 
        environmental protection.
            Some of the other sites have been closed and reclaimed in 
        part using a combination of bond money and federal agency 
        funding. Again, the lack of Good Samaritan legislation 
        prevented industry from participating in the remediation, 
        reclamation and closure of these sites.
          2. A potential Good Samaritan must be able to gather the 
        needed site characterization data to develop a technically 
        sound remediation proposal without having to conduct a 
        Potentially Responsible Party (PRP) search or go through a 
        long, complicated and involved permitting process. A Good 
        Samaritan must be able to conduct a site survey without the 
        potential for becoming liable for the site solely by virtue of 
        gathering data.
          3. Individual Good Samaritan projects should be subject to 
        review and authorization by the federal government or by an 
        individual state's abandoned mine land program (and/or the 
        environmental permitting authority for those states where EPA 
        has delegated Clean Water Act authority). In addition to 
        providing for review and authorization by EPA, the bill should 
        authorize the Army Corps of Engineers' RAMS program to issue 
        Good Samaritan permits. The chairman will recall that he 
        authored the legislation that created the RAMS program in 1999 
        as part of that year's Water Resources Development Act (WRDA). 
        Although the RAMS program has not been adequately funded, its 
        stakeholder approach to remediating and restoring abandoned 
        mine sites is a model that is well-suited for Good Samaritan 
        cleanups.
            Unfortunately, the RAMS program will sunset at the end of 
        the next fiscal year if it is not reauthorized. The only reason 
        the RAMS program has not been reauthorized is Congress has not 
        passed a WRDA in six years. We urge the Chairman to communicate 
        his support for RAMS to both the House and Senate authorizing 
        committees for WRDA, or find a way to insert reauthorizing 
        language in a bill that will move this year.
          4. The Good Samaritan permitting process should include 
        meaningful public input. The permit process also must be 
        simple, straight-forward and understandable. The environmental 
        requirements for a Good Samaritan project should be wrapped 
        into a single permit. The permit should be approved only if the 
        project is technically sound and promises overall improvement 
        to the environment and/or securing of safety hazards.
          5. The Good Samaritan must have full legal protection under 
        the permit. That is, a Good Samaritan permit-holder must be 
        able to obtain a specific, concrete list of the federal, state 
        and local environmental laws that would be deemed satisfied by 
        completion of the work authorized under the permit. One of the 
        Good Samaritan bills introduced in the Senate, S. 1848, 
        contains a list of federal environmental laws that is a good 
        starting point.
          6. Good Samaritan projects should be allowed as long as they 
        result in an improvement to the environment, even if they will 
        not result in the complete cleanup of all contaminants at an 
        abandoned mine land site or the attainment of all otherwise 
        applicable environmental standards, such as stringent water 
        quality standards. To quote an oft-repeated phrase, ``don't let 
        pursuit of the perfect be the enemy of the good.'' An 85 
        percent improvement in water quality downstream from an AML 
        site is a far better result than no cleanup due to a Good 
        Samaritan's concerns that their cleanup activities may not be 
        able to achieve water quality standards that would be 
        applicable at a modern mine.
          7. The permitting authority must be given discretion under 
        any Good Samaritan legislation to make site-specific 
        adjustments to environmental requirements, standards and 
        liabilities arising under state and federal environmental laws 
        that could otherwise be applicable and prevent Good Samaritans 
        from undertaking remedial actions. This is not a new concept. 
        The Applicable or Relevant and Appropriate (ARAR) approach 
        under CERCLA might be a reasonable starting point.
            The permitting authority also should have the discretion to 
        waive the PRP search requirement. A Good Samaritan that is 
        willing to spend private monies to remediate and reclaim an AML 
        site should not have to spend time and resources conducting and 
        certifying a PRP search. It should not matter whether there 
        might be a PRP. The goal should be environmental improvement, 
        not finding someone to blame.
          8. Any Good Samaritan legislation, to be effective and result 
        in actual, on-the-ground cleanup, must allow the reprocessing, 
        remining, and reuse of ores, minerals, waste rock piles and 
        other materials existing at an AML, even if this results in the 
        mining company or other Good Samaritan recovering metals from 
        such materials and making some cost recovery and perhaps a 
        little profit on its Good Samaritan operations. Given the 
        volatility and cyclical nature of metal prices, it is just as 
        likely that the costs of any Good Samaritan project would 
        exceed the revenue generated by removal and reprocessing. In 
        any event, these activities should be allowed as part of a Good 
        Samaritan project only if the overall result would be an 
        improvement in environmental conditions at the site.
            In many cases, processing tailings, waste rock piles and 
        other historic mining materials at AML sites may be the most 
        efficient and least costly means of cleaning up a site. The 
        waste from any reprocessing or remining activities would then 
        be disposed in compliance with current environmental standards 
        and practices. The net result would be an efficient use of 
        resources to increase the ultimate recovery of metals the U.S. 
        needs for strategic and economic purposes while improving the 
        environment.
            AMLs are generally located in highly mineralized areas. Not 
        only are these highly mineralized areas the location of 
        historic mining, they are likely to be the location for future 
        mines as prices and technology allow. A Good Samarian project 
        could lead to the discovery of a new mine, which would require 
        the full NEPA and mine permitting process, and would be allowed 
        only if the proposed new mine complied with all current 
        standards of environmental protection. The mining industry has 
        no desire to use Good Samaritan legislation to avoid the mine 
        permitting process or the application of current environmental 
        laws and regulations that apply to today's modern mines. The 
        Good Samaritan permitting authority, through permit conditions, 
        can easily prevent the misuse of a Good Samaritan permit.
            The Mining and Minerals Policy Act of 1970 (30 U.S.C. Sec.  
        21(a)), specifically establishes the Congressional intent ``to 
        foster and encourage private enterprise in the development of 
        economically sound and stable domestic mining, minerals, metal, 
        and mineral reclamation industries.'' Including remining and 
        reprocessing authority in Good Samaritan legislation is 
        consistent with and promotes this Congressional intent.
            We must ask ourselves what are the goals of Good Samaritan 
        legislation? If a goal is to improve water quality, the 
        environment and public safety by remediating and reclaiming 
        Abandoned Mine Sites, which by definition have no current owner 
        or financially responsible party, then Good Samaritan 
        legislation must encourage and incentivize Good Samaritan 
        cleanups. One way to do this is to allow the Good Samaritan to 
        reprocess and remine.
          9. Good Samaritan legislation should allow Good Samaritan 
        actions at AMLs to qualify as off-site mitigation under the CWA 
        for mining companies permitting new mines or expansion of 
        existing mines. This would provide an additional incentive for 
        a mining company to undertake a Good Samaritan cleanup while 
        meeting the permitting requirements at new or expanded mines.
                      superfund is not the answer
    Some Members of Congress and anti-mining groups argue that instead 
of focusing on Good Samaritan legislation, Congress should fund the 
Superfund program and EPA, under the Superfund program, should address 
all Abandoned Mine Lands. In our opinion, this is a wrong-headed 
approach to remediating and reclaiming historic abandoned mine lands.
    Superfund does not have a very good track record at mine sites. 
Superfund was not designed to address natural processes that result in 
contaminated watersheds at AMLs. The historic mining communities of 
Aspen and Leadville in Colorado, Butte, Montana, Triumph, Idaho and the 
Bunker Hill site in northern Idaho's Silver Valley all have experienced 
first hand the failures of Superfund and the costly results of 
misguided policies and millions of dollars wasted on legal delays and 
repetitive studies. Of the billions of dollars spent of Superfund 
efforts, only 12% of those moneys have actually gone into cleaning up 
the environment while the balance went to legal and consulting fees.
    In each of the Superfund sites cited above, the cleanup costs have 
exceeded reasonable estimates by a magnitude of three to five times. 
Bunker Hill is a prime example of the waste that occurs when an EPA-led 
Superfund effort is undertaken at mine sites. This can be demonstrated 
by comparing Bunker Hill with another example from the Silver Valley in 
northern Idaho.
    Just outside the Bunker Hill Superfund site are many historic 
mining sites on Nine Mile and Canyon Creeks. Two mining companies 
working together with the State of Idaho were able to cleanup and 
remove historic mine wastes, tailings and waste rock piles from Nine 
Mile and Canyon Creeks, and restore fish habitat on the two creeks at 
cleanup costs one-fourth to one-fifth the cleanup costs incurred by EPA 
under Superfund on a per-cubic-yard of material removed basis.
    I have visited these sites on at least three occasions and can 
personally testify to the outstanding remediation and reclamation on 
Canyon and Nine Mile Creeks, and that there has been substantial 
improvement in water quality as a result of these efforts. And, the 
work is done, unlike the work at Superfund sites which seems to never 
end.
    There may be some sites for which Superfund is the appropriate 
remedy, but let's not limit the tools we have in the toolbox. 
Thoughtful and effective Good Samaritan legislation that encourages and 
incentivizes Good Samaritans is an important tool to add to the 
Abandoned Mine Land remediation and reclamation toolbox.
                    current good samaritan proposals
    Our members are familiar with all Good Samaritan legislation that 
has been drafted and introduced over the past ten years. While we 
applaud any and all efforts to advance the Good Samaritan concept, our 
analysis of most Good Samaritan legislation introduced is that it is 
not intended for use by the mining industry. This is especially true of 
the Administration's bill. This not only disappoints our members, it 
would be a huge opportunity lost for the nation and for the environment 
if mining companies were not allowed to utilize Good Samaritan 
legislation.
    With respect to the two bills that have been introduced in the 
Senate, the Administration's bill introduced by Chairman Inhofe, and S. 
1848 introduced by Senators Salazar and Allard from Colorado, we 
believe S. 1848 is clearly the better bill and is a good starting 
point. We also believe that S. 1848 can and should be improved to 
ensure that it results in on-the-ground Good Samaritan projects at AML 
sites. S. 1848 already incorporates many of the nine (9) concepts 
listed above, and could be improved by: 1) providing a mechanism for 
conducting site investigations without incurring environmental 
liability and without having to go through the full permitting process; 
2) the PRP search should be significantly streamlined and eliminated 
when only private monies are funding the cleanup; and 3) any 
restrictions on the ability of a mining company or other Good Samaritan 
to remine, remove and reprocess ores and other waste materials from a 
mine site should be eliminated.
    The Administration's bill, as currently drafted, is pretty much a 
non-starter for our members. The major problems our members have with 
this bill are: 1) the liability relief provision is too restrictive; 2) 
the PRP search requirements are too cumbersome and costly; 3) the 
permitting process is too complex and rigid; 4) a full PRP search and 
certification is required for privately funded cleanups; 5) the 
definition of a Good Samaritan is too limiting--merely appearing in the 
chain of title should not disqualify someone; and 6) there are too many 
restrictions on remining and reprocessing. Significant on-the-ground 
Good Samaritan activities at AMLs are not going to take place under the 
Administration's bill without significant changes.
                               conclusion
    Industry wants to see abandoned mines cleaned up. After all, they 
are our dirty pictures, our Achilles Heel. Mining opponents use 
pictures of historic, unreclaimed abandoned mines to foment public 
opposition to new mine proposals. Industry wants to see AMLs remediated 
and reclaimed as much as anyone, but we need your help. The mining 
industry has the desire, the experience, the technology, the expertise 
and the capital to remediate and reclaim AMLs. In fact, the mining 
industry has more experience and expertise than all other potential 
Good Samaritans put together. Effective Good Samaritan legislation 
makes sense and can be a win-win-win-win for the environment, for the 
Good Samaritan, for the community, and for society. We applaud the 
Chairman for holding this hearing and look forward to working with him 
to produce Good Samaritan legislation that will actually result in on-
the-ground Good Samaritan cleanups at Abandoned Mine sites.
    I will be happy to answer any questions.
               Royalities and Abandoned Mine Reclamation
                            october 2, 2007
                   introduction and executive summary
    My name is Laura Skaer. I am the Executive Director of the 
Northwest Mining Association, a 113 year old non-profit mining industry 
trade association. Our offices are located in Spokane, Washington. NWMA 
has more than 1,650 members residing in 35 states and 6 Canadian 
provinces. Our members are actively involved in exploration, mining and 
reclamation operations on BLM and USFS administered land in every 
western state, in addition to private land. Our membership represents 
every facet of the mining industry, including geology, exploration, 
mining, reclamation, engineering, equipment manufacturing, technical 
services, and sales of equipment and supplies. Our broad-based 
membership includes many small miners and exploration geologists, as 
well as junior and large mining companies. More than 90% of our members 
are small businesses or work for small businesses. Our members have 
extensive first-hand experience with reclaiming active and inactive 
mine sites and remediating a variety of safety issues and environmental 
conditions at these sites.
    Our members also have extensive knowledge of the scope of, and 
potential dangers posed by, hardrock abandoned mine lands (AMLs), as 
well as experience and expertise in dealing with those dangers. As I 
discuss below, AMLs in need of significant remediation are limited in 
number and not expected to increase. They comprise mines that were 
developed and abandoned before the advent of modern environmental laws 
in the 1970s and 1980s, and regulations that were updated as recently 
as 2001, including current comprehensive regulatory programs at both 
the federal and state levels that require mining companies to provide 
financial assurance to ensure that, at the end of exploration and/or 
mining operations, sufficient funds will be available to reclaim the 
sites if the operator becomes bankrupt or otherwise is unable to 
reclaim the sites.
    Moreover, the Western Governors Association (WGA), the Bureau of 
Land Management (BLM), the US forest Service (USFS) and the non-
partisan Center of the American West are all agreed that the vast 
majority of AMLs pose no dangers or, at most, safety rather than 
significant environmental hazards.
    That being said, the mining industry supports the creation of a new 
federal AML fund, to be financed from royalties owing under any mining 
law legislation enacted by the Congress, to augment the monies 
available to State AML funds to address safety and, where needed, 
environmental hazards at AML sites. The industry also continues to 
strongly support the enactment of comprehensive Good Samaritan 
legislation that would allow mining companies with no previous 
involvement at an AML site to voluntary remediate and reclaim that 
site, in whole or in part, without the threat of potentially enormous 
liability under CERCLA, the Clean Water Act, and other federal and 
state environmental laws.
    The mining industry has long been front and center in trying to 
deal responsibly with AMLs. Some of these efforts are documented in a 
study researched and authored by two of our members, Debra W. 
Struhsacker and Jeff W. Todd, and published in 1998 by the National 
Mining Association entitled ``Reclaiming Inactive and Abandoned Mine 
Lands--What Really is Happening.'' (A copy of this study is being 
included in the record and is hereinafter cited as the ``NMA Study''). 
This study presents compelling evidence that given the right 
opportunity, the mining industry can play a significant role in 
eliminating the safety hazards and improving the environment at 
abandoned and inactive mines.
                   abandoned mine lands are historic
    It is important to understand that when we talk about hardrock 
abandoned mine lands we are talking about a problem that was created in 
the past due to mining practices used at sites that were mined prior to 
the enactment of modern environmental laws and regulations. Table 1 
lists the dates of development of many of the major mining districts in 
the country compared to the dates of enactment of many of the federal 
and state environmental laws and regulations that govern hardrock 
mining activities. As is clearly seen from this table, mining in the 
U.S. dates back to the 1820s, with significant historic mine 
development throughout the remainder of the 19th century and into the 
early part of the 20th century. Many of the AML sites that need 
attention were created in this timeframe.
    It also is important to note during World Wars I and II, the 
federal government took over operations at many mines to produce the 
metals and minerals necessary for the war efforts. The focus was on 
maximizing production and winning the war--not on using mining methods 
that were designed to protect the environment. The metals mined from 
these sites greatly benefited U.S. society by contributing to the 
country's victories in both wars. What we are left with today, however, 
are the environmental impacts created by these unregulated mining 
activities. Some of these war-efforts mines are now abandoned. Because 
the American public benefited in the past from mining of these sites, 
we now have a public responsibility to develop policies and funding 
mechanisms to reclaim these sites.
    Modern mining started in the mid-1960s at about the same time that 
the country was developing an environmental awareness and when Congress 
was starting to enact environmental laws. Thus, as is readily apparent 
from Table 1, the U.S. environmental statutory and regulatory framework 
is a recent development compared to the history of mining in the U.S. 
Moreover, it is important to recognize that many of the laws and 
regulations governing hardrock mining are quite new--some are less than 
20 years old. For example, Nevada's state reclamation law went into 
effect in 1990, only 17 years ago. BLM's regulations for hardrock 
mining, the 43 C.F.R. Subpart 3809 program, went into effect in 1981 
and were substantially updated just six years ago in 2001.
    The body of federal and state environmental laws and regulations 
shown in Table 1 has had a significant and positive impact on the way 
mining is now conducted in the U.S, resulting in a substantial 
reduction in environmental impacts and dramatic improvements in 
reclamation. As a result of these laws and regulations, the domestic 
hardrock mining industry of today is highly regulated and 
environmentally and socially responsible. Also, because these 
regulations require exploration and mining companies to provide 
financial assurance to guarantee reclamation at the end of the project, 
mines today will not become future AML sites. In the event a company 
goes bankrupt or defaults on its reclamation obligations, state and 
federal regulatory agencies will have bond monies that will be 
available to reclaim the site. Thus, the AML problem is a finite and 
historical problem and not one that will grow in the future.
    As shown in Table 1, the US Forest Service adopted the 36 C.F.R. 
Part 228A surface management regulations governing hardrock mining 
operations on National Forest Lands in 1974. Six years later, in 1980, 
BLM enacted the 43 C.F.R. Subpart 3809 surface management regulations, 
which were substantially expanded and updated in 2000 and 2001. Both 
BLM's 3809 regulations and the U.S. Forest Services' 228A regulations 
require that all exploration and mining activities above casual use 
provide federal land managers with adequate financial assurance to 
ensure reclamation after completing the exploration or mining project. 
Because the underlying purpose of the financial assurance requirement 
is to ensure reclamation of the site in the event an operator goes 
bankrupt or fails to reclaim a site for some other reason, the amount 
of required financial assurance is based on what it would cost BLM or 
the U.S. Forest Service to reclaim the site using third-party 
contractors to do the work.
    In addition to mandating reclamation and establishing financial 
assurance requirements, these comprehensive federal regulations also 
require compliance with all applicable state and federal environmental 
laws and regulations to protect the environment and to meet all 
applicable air quality, water quality and other environmental 
standards.
    Additionally, all western public land states have enacted 
comprehensive regulatory programs that govern hardrock mining 
operations in their respective state. Like the federal financial 
assurance requirements, these state regulatory programs require the 
posting of adequate financial assurance or reclamation bonds in an 
amount equal to the cost that would be incurred by the government if it 
had to contract with a third party to remediate and reclaim the site. 
In many states, federal and state regulators with jurisdiction over 
mining work together to jointly manage the reclamation bonding 
programs. For example, in Nevada, the BLM, the U.S. Forest Service and 
the Nevada Division of Environmental Protection/Bureau of Mining 
Regulation and Reclamation have entered into a Memorandum of 
Understanding (MOU) that establishes procedures for coordinating the 
federal and state regulatory programs for mining. This MOU specifies 
that the federal and state agencies will work together to review 
reclamation cost estimates and to agree upon the required bond amount.

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    In 1999, the National Academy of Sciences National Research 
Council, in response to a request from Congress to assess the adequacy 
of the regulatory framework for hardrock mining on federal lands, found 
that `` [t]he overall structure of the federal and state laws and 
regulations that provide mining-related environmental protection is 
complicated, but generally effective.'' Thus, these state and federal 
comprehensive regulatory programs together with financial assurance 
requirements work together to ensure that modern mining is 
environmentally responsible and that today's mines will be reclaimed.
        the vast majority of aml sited do not pose significant 
                         environmental problems
    It is important to understand that the vast majority of all 
hardrock AML sites are not problematic. The 1998 WGA report mentioned 
above estimated that more than 80% of AML sites create neither 
environmental nor immediate safety hazards. Where problems do exist, 
safety hazards are the primary problem although some AML sites have 
both environmental and safety issues.
    The Center of the American West released a study in 2005 entitled 
``Cleanup of Abandoned Hardrock Mines in the West.'' The Center, which 
is affiliated with the University of Colorado, states at page 31 of its 
report that ``only a small fraction of the 500,000 abandoned mines 
[identified by the Mineral Policy Center] are causing significant 
problems for water quality.''
    The 2007 USFS/BLM report cited above estimates that as many as 10% 
of the AML sites on USFS-or BLM-managed land may include environmental 
hazards and that the balance, or approximately 90%, are landscape 
disturbances or safety hazards. The finding that landscape disturbance 
and safety hazards comprise the bulk of the AML problem is consistent 
with other reports.
    Although much of the public debate about the AML problems typically 
focuses on environmental issues, it is really safety hazards that 
deserve our immediate attention. Nearly every year, the country 
experiences one or more tragic accident or fatality at an AML site 
where somebody has fallen into or become trapped in an unreclaimed 
historic mine opening. AML safety hazards pose a far greater risk to 
the public than AML environmental problems. Therefore, we should focus 
first-priority AML funds on eliminating safety hazards at abandoned 
mine sites located near population centers and frequently used 
recreation areas. The 1998 NMA Study includes a comprehensive 
discussion of the types of safety hazards and environmental problems 
that exist at AML sites. Table 2 summarizes this discussion and lists 
the safety hazards and environmental problems that may occur at AML 
sites and the techniques used to address these hazards and problems. As 
stated above, landscape disturbances and safety hazards are the 
dominant problem at most AML sites. However, some sites may have a 
combination of landscape disturbance, safety hazards, and environmental 
problems.

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    Although many of the above listed measures are expensive--
especially those used to remediate environmental problems--they are 
technically straightforward, well understood, and are generally quite 
effective in improving environmental conditions at AML sites. The NMA 
Study identified a number of AML sites with safety hazards and/or 
environmental problems that were substantially reduced through the use 
of one or more of the measures listed in Table 2. It is important to 
understand, however, that each AML site is different. The measures 
shown in Table 2 to address landscape disturbance, safety hazards, and 
environmental problems at an AML site must be custom-tailored to fit 
the site-specific conditions of a particular site. A cookie-cutter, 
one-size-fits all approach will not achieve optimal results and may 
even fail to address the problem.
    AML policy discussions have had a tendency to focus on the worst 
and most complex AML sites. This mischaracterization of the global AML 
problem has probably contributed to the lack of progress in developing 
federal policies and programs to solve the AML problem. The legislative 
dialogue about enacting Good Samaritan legislation has perhaps been 
made more difficult by focusing on sites with very serious or complex 
environmental and liability issues such as sites with acid drainage 
from underground mine openings which typically require extensive and 
costly remediation efforts. Although this type of site is serious and 
deserving of our immediate attention, it is not representative of the 
safety and environmental concerns at most AML sites. NWMA urges the 
Congress to take a closer look at the universe of AML sites in 
developing a Hardrock AML program and in addressing Good Samaritan 
legislation. Focusing solely on the most challenging AML sites is 
likely to produce programs with unwarranted complexity and costs.
                     how many aml sites are there?
    Historic abandoned hardrock mines have long been an issue of 
concern to industry, government and the public. Nearly everyone--
especially the mining industry--agrees that eliminating AML sites is an 
important public policy objective. Past estimates of the scope of the 
historic AML problem range considerably, with various state and federal 
agencies and NGOs, estimating the number of unreclaimed hardrock mining 
sites. Part of the reason for the apparent disparity in these estimates 
is that these inventories have defined the term ``site'' in an 
inconsistent manner. Some AML inventory efforts have considered a 
``site'' to be any single opening, mining or exploration disturbance or 
mining related feature. Other state AML programs and the mining 
industry define ``site'' to include multiple features that can be 
addressed with coordinated and consolidated reclamation and remediation 
measures. Continued debate over a universal definition of AML ``site'' 
and development of a comprehensive hardrock AML inventory diverts 
attention and resources from the real issues that need to be addressed. 
Moreover, the progress being made in reclaiming AML sites demonstrates 
that it is not necessary to count every site prior to designing 
effective programs to address the problem.
    In 1998, the Western Governors Association compiled an inventory of 
hardrock AML sites. This effort confirmed the results of earlier 
efforts--because each hardrock AML site varies in geology, geography, 
climate, terrain, hydrology, and types of AML features, and because 
there are different definitions of what constitutes an AML site, it is 
very difficult, if not impossible to produce a complete inventory of 
hardrock AML sites.
    The most recent estimate of the number of AML sites is the just 
released U.S. Forest Service/ BLM report entitled Abandoned Mine Lands: 
A Decade of Progress Reclaiming Hardrock Mines. This report estimates 
that there are approximately 47,000 abandoned mine sites on more than 
450 million acres of federal land managed by those two agencies.
    While the desire to have a complete inventory of hardrock AML sites 
in the western US was perhaps an appropriate focus ten or fifteen years 
ago, we believe that enough is now known about the scope of the 
problem. This knowledge coupled with the fact that on-the-ground 
progress is being made towards solving the problem suggests to us that 
inventory efforts have reached a point of diminishing returns--it is 
time to stop counting sites and to focus all of our energy upon 
reclaiming them. Further efforts to develop a comprehensive inventory 
will not add much value or contribute anything new to solving the AML 
problem. The focus should thus be on-the-ground remediation and 
reclamation of known hardrock AML sites. We therefore urge this 
Subcommittee to eliminate or modify the provision in H.R. 2262 Section 
403(c) that requires the Secretary to develop another AML inventory.
                     current hardrock aml programs
    Every western public land state, the BLM, the Forest Service, and 
the Army Corps of Engineers have abandoned mine land programs that 
address abating safety hazards, remediating environmental problems, and 
reclaiming disturbed landscapes associated with abandoned hardrock 
mining sites. The 1998 NMA Study cited above found that

           . . . state AML programs and industry-sponsored efforts have 
        abated, reclaimed and remediated a number of high priority AML 
        sites throughout the west. Private funding, equipment and labor 
        for mining companies have been responsible for reclaiming and 
        remediating many AML sites. Mining companies have spent tens of 
        millions of dollars of voluntary on-the-ground cleanups and 
        abatements of AML sites. (NMA Study at ES-2)

    The Nevada Division of Minerals Abandoned Mine Lands program is 
representative of an effective state AML program. Nevada's AML program 
receives funding from a $1.50 fee on county mining claim filings and a 
one-time fee of $20 per acre of new permitted mining disturbance. The 
program is supplemented by small grants from BLM's abandoned mines 
program. In 2006, Nevada's AML program secured 540 hazards with 
approximately $350,000 in funding. The bulk of the work includes 
fencing or closing mine openings on federal public land. Since the 
inception of the program in 1987, the Nevada Division of Minerals has 
secured over 9,000 dangerous abandoned mine openings.
    The Nevada Division of Minerals also serves as lead coordinator of 
the Nevada Abandoned Mine Land Environmental Task Force. The task force 
was formed in 1999 and is comprised of 13 state and federal agencies. 
The task force has overseen reclamation activities at 21 abandoned 
mines sites. The Army Corps of Engineers Restoration of Abandoned Mine 
Sites (RAMS) program has provided $4 million since 2000 to support 
development of closure plans and small, innovative, on-the-ground 
demonstration projects related to AML remediation and reclamation.
    In addition to these efforts, a partnership, known as the Nevada 
Mine Backfill Program, between the BLM, the Division, the Nevada Mining 
Association and member companies, and others has resulted in the 
backfilling of 265 hazardous mine openings in Clark, Esmeralda, Nye and 
Washoe counties since 1999. This program received the Northwest Mining 
Association's Environmental Excellence Award in 2000 for protecting 
public health, safety and the environment through government/industry 
cooperation.
    As demonstrated by the Nevada AML programs, much progress has been 
made by existing state AML programs, the BLM, USFS, RAMS and the 
industry. Mr. Tony Ferguson, Director of Minerals and Geology 
Management, USFS will be testifying to the excellent progress the BLM 
and USFS have made over the past decade in remediating and reclaiming 
abandoned mine sites.
         industry supports creating a federal hardrock aml fund
    The mining industry supports creating a federal hardrock AML fund 
using revenue generated from a net royalty on new claims to support, 
augment and expand the existing AML programs that have proven to work. 
The fund also should allow for donations by persons, corporations, 
associations and foundations, and other monies that are appropriated by 
the Congress of the United States. These funds should be distributed to 
the states with hardrock AMLs to be administered by the respective 
state AML program. States that generate royalty revenues should be the 
first in line to receive federal AML funds.
    While federal oversight might be appropriate, we do not support the 
establishment of a new, separate federal hardrock AML program or 
delegating the responsibility for hardrock AML remediation and 
reclamation to the Office of Surface Mining. This would be an 
inefficient use of the monies collected and would prevent the maximum 
amount of money going into on-the-ground remediation and reclamation. 
Hardrock AML sites are unique in their geology, geography, terrain and 
climate and a uniform, one-size-fits-all program will not work. The 
state AML programs are in the best position to prioritize where federal 
AML funds should be spent within the state and to carry out hardrock 
AML hazard abatement, remediation and reclamation, in cooperation with 
the industry and other groups, including NGOs. The NMA Study describes 
a streamlined interagency regulatory approach that was in place at the 
time in South Dakota that proved to be particularly effective in 
facilitating AML cleanup activities by minimizing protracted regulatory 
reviews and permit requirements and emphasizing on-the-ground measures.
                the need for good samaritan legislation
    Although, as discussed above, some progress has been made by 
industry and existing State and federal AML programs in reducing safety 
hazards and remediating and reclaiming hardrock AMLs, the number one 
impediment to voluntarily cleanup of hardrock abandoned mine lands is 
the potential liability imposed by existing federal and state 
environmental laws, in particular the Clean Water Act (CWA), the 
Comprehensive Environmental Response, Compensation and Liability Act 
(CERCLA) (commonly known as Superfund), the Resource Conservation & 
Recovery Act (RCRA), and the Toxic Substances Act. Under these laws, a 
mining company, state or federal agency, NGOs, individuals or other 
entities that begin to voluntarily remediate an abandoned mine site 
could potentially incur ``cradle-to-grave'' liability under the CWA, 
CERCLA, and other environmental laws, even though they did not cause or 
contribute to the environmental condition at the abandoned mine land 
site.
    Furthermore, they could be required under the CWA to prevent 
discharges to surface waters from the AML in perpetuity, unless those 
discharges meet strict effluent limitations and do not result in 
exceedences of stringent water quality standards, something that may 
not be possible; and in any event, may be so expensive that no company, 
individual, or other entity would undertake a voluntary cleanup.
    Virtually everyone who has looked at the AML issue in the west has 
recognized and documented the legal impediments to voluntary cleanup of 
AMLs and have urged that those impediments be eliminated. These groups 
include the Western Governors Association, the National Academy of 
Sciences, and the Center for the American West.
    The time has come for Congress to adopt the recommendation from the 
National Academy of Sciences National Research Council's 1999 report to 
Congress and enact effective Good Samaritan legislation that will 
create a framework, with incentives and liability protection for 
numerous entities, including mining companies, local, state and federal 
agencies, NGOs, and tribes to voluntarily remediate of environmental 
problems caused by others at abandoned hardrock mine sites in the U.S. 
Several Good Samaritan bills have been introduced in the past, but only 
S. 1848, introduced last year by Senators Salazar and Allard, passed 
out of committee. We strongly supported, and continue to support the 
Salazar/Allard approach to Good Samaritan legislation.
    No one knows more about reclaiming and remediating mine sites than 
the mining industry. The mining industry has the desire, the resources, 
expertise, experience, and technology to effectively and efficiently 
assess the environmental and safety issues present at an AML and to 
properly remediate, reclaim and secure those sites. This often can be 
done in conjunction with reclamation activities at nearby active mines 
which the company operates, resulting in an efficient use of resources 
to improve the environment and enhance public safety.
    In some cases, processing tailings, waste rock piles and other 
historic mining materials at AML sites may be the most efficient and 
least costly means of cleaning up a site. The waste from any 
reprocessing or remining activities would then be disposed of in a 
modern engineered facility that complies with current environmental 
standards and practices. Remining/reprocessing is thus an environmental 
remedy in the form of resource recovery and source reduction, both of 
which are EPA-favored responses for environmental cleanups and waste 
management. The net result would be an efficient use of resources to 
increase the ultimate recovery of metals the U.S. needs for strategic 
and economic purposes while improving the environment.
    Given the desirability of achieving the resource recovery and 
source reduction that can result from reprocessing and remining, Good 
Samaritan legislation should allow the reprocessing, remining, and 
reuse of ores, minerals, waste rock piles and other materials existing 
at an AML, even if this results in the mining company or other Good 
Samaritan recovering metals from such materials and making some cost 
recovery and perhaps a little profit on its Good Samaritan operations. 
Given the volatility and cyclical nature of metal prices, it is just as 
likely that the costs of any Good Samaritan project would exceed the 
revenue generated by removal and reprocessing. In any event, these 
activities should be allowed as part of a Good Samaritan project only 
if the overall result would be an improvement in environmental 
conditions at the site.
    The Mining and Minerals Policy Act of 1970 (30 U.S.C. Sec.  21(a)), 
specifically establishes the Congressional intent ``to foster and 
encourage private enterprise in the development of economically sound 
and stable domestic mining, minerals, metal, and mineral reclamation 
industries.'' Including remining and reprocessing authority in Good 
Samaritan legislation is consistent with and promotes this 
Congressional intent.
                      superfund is not the answer
    Some Members of Congress and NGOs argue that instead of enacting 
Good Samaritan legislation, Congress should fund the Superfund program 
and EPA, under the Superfund program, should address all hardrock 
abandoned mine lands. In our opinion, this is an inappropriate, 
inefficient, and costly approach to remediating and reclaiming historic 
abandoned mine lands. Moreover, the Superfund program is clearly not 
designed to address the most pressing and prevalent AML problem--
abatement of safety hazards.
    Superfund does not have a very good track record at mine sites. 
Superfund was not designed to address natural processes that result in 
contaminated watersheds at AMLs. The historic mining communities of 
Aspen and Leadville in Colorado, Butte, Montana, Triumph, Idaho and the 
Bunker Hill site in northern Idaho's Silver Valley all have experienced 
first hand the failures of Superfund and the costly results of 
misguided policies and millions of dollars wasted on legal delays and 
repetitive studies. Of the billions of dollars spent of Superfund 
efforts, only 12% of those moneys have actually gone into cleaning up 
the environment while the balance went to legal and consulting fees.
    In each of the Superfund sites noted above, cleanup has cost three 
to five times more than reasonable estimates of what it should have 
cost. Bunker Hill is a prime example of the waste that occurs when an 
EPA-led Superfund effort is undertaken at mine sites. This can be 
demonstrated by comparing Bunker Hill with another example from the 
Silver Valley in northern Idaho.
    There are many historic mining sites on Nine Mile and Canyon Creeks 
just outside the Bunker Hill Superfund site. Two mining companies 
working together with the State of Idaho were able to cleanup and 
remove historic mine wastes, tailings and waste rock piles from Nine 
Mile and Canyon Creeks, and restore fish habitat on the two creeks. 
This work was accomplished at cleanup costs that were one-fourth to 
one-fifth of the cleanup costs on a per-cubic-yard of material removed 
basis compared to EPA's Superfund costs.
    I have visited these sites on three occasions and can personally 
testify to the outstanding remediation and reclamation on Canyon and 
Nine Mile Creeks, and the substantial improvement in water quality as a 
result of these efforts. And, the work has been completed, unlike the 
work at Superfund sites which seems to never end.
    Finally, at the risk of stating the obvious, the Superfund legal 
procedures to identify Potentially Responsible Parties (PRPs), to 
assign joint and several liability, and to recover costs are premised 
on the concept that the site in question has owners who can be 
identified and compelled to pay for the cleanup. None of these 
provisions are appropriate for AML sites, which by definition, no 
longer have an identifiable owner. Thus, the Superfund Program is not 
an ideal or even applicable template for most AML sites.
    There may be some sites for which Superfund is the appropriate 
remedy, but let's not limit the tools we have in the toolbox. 
Thoughtful and effective Good Samaritan legislation that encourages and 
incentivizes Good Samaritans is an important tool to add to the 
Abandoned Mine Land remediation and reclamation toolbox.
                               conclusion
    Industry wants to see abandoned mines cleaned up. After all, they 
are our dirty pictures, and an albatross hanging around our neck. 
Mining opponents use pictures of historic, unreclaimed abandoned mines 
to foment public opposition to new mine proposals. But it is time for 
this recrimination and finger pointing to stop and to start working 
together to solve this problem.
    Industry wants to see AMLs remediated and reclaimed as much as 
anyone, but we need your help. The mining industry has the desire, the 
experience, the technology, the expertise and the capital to remediate 
and reclaim AMLs. In fact, the mining industry has more experience and 
expertise than all other potential Good Samaritans put together. A 
federal hardrock AML fund using revenue generated from royalties on new 
claims combined with effective Good Samaritan legislation to encourage 
private-sector reclamation efforts offers the best opportunity to 
expedite safety hazard abatement, remediation and reclamation of 
hardrock AML sites, and create a win-win-win-win for the environment, 
for the Good Samaritan, for the community, and for society.
    We applaud the Chairman for holding this hearing and look forward 
to working with him to produce constructive amendments to the Mining 
Law that will provide the certainty, financial and regulatory framework 
necessary to maintain a prosperous domestic mining industry that will 
be able to generate revenues from a royalty on new claims to provide an 
additional funding source to augment existing state, federal and 
industry AML remediation and reclamation efforts. Good Samaritan 
legislation is essential if we truly want to address the historic AML 
problem.
    I thank you for this opportunity to testify on this important issue 
and will be happy to answer any questions.
                                 ______
                                 
                        New Mexico Oil and Gas Association,
                                                     March 7, 2008.
Hon. Pete V. Domenici,
328 Hart Senate Office Building, 2nd and C Streets, NE, Washington, DC.
    Dear Senator Domenici: I am writing to ask for your support in 
renewing uranium mining in the state of New Mexico. Since 1972, safety 
regulations and education have made uranium mining no more dangerous 
than any other kind of extraction industry.
    The uranium industry has undergone a dramatic transformation since 
the last mining cycle ended in the 1980s. These improvements will allow 
the industry to meet its safety and environmental responsibilities. 
This should alleviate many of the fears and misconceptions that have 
plagued the return of uranium mining in western New Mexico.
    Today, there are state and federal agencies that regulate and 
ensure uranium mining is safe for the communities and the environment. 
These agencies such as the EPA, and Mine Safety and Health 
Administration, as well as the New Mexico Environment Department and 
the Energy, Mineral and Natural Resources Department were not in 
existence during the 1950s. Mining companies are now closely regulated 
and watched by these agencies, guaranteeing that their operations are 
safe for the workers and the environment.
    New Mexico has a unique opportunity with the return of the uranium 
industry, in Lea County construction is underway for a uranium 
enrichment plant, and another facility is being proposed for Eddy 
County. Also in Southeast New Mexico is the WIPP facility which has an 
excellent safety record in both the storage and transportation of 
nuclear waste. It would be unfortunate if those facilities are unable 
to process uranium that is recovered from the Grants Mineral Belt.
            Sincerely,
                                             Bob Gallagher.
                                 ______
                                 
     Statement of Hon. Maria Cantwell, U.S. Senator From Washington
                 modern mining need a modern mining law
    Unlike other extractive industries, there is no environmental law 
written specifically to govern hardrock mining. Instead, a patchwork of 
federal and state laws and regulations attempts to fill in the holes.
    As modern mining problems have demonstrated, the current legal and 
regulatory system fails to protect western water resources.
                       modern mining bankruptcies
    The underbonding of current operations is a serious problem, 
because modern mines regularly go bankrupt. In the past twenty years, 
at least 16 modern mines have gone bankrupt.

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                modern mining gone awry--5 case studies
Idaho: Grouse Creek Mine
    The Grouse Creek mine, located adjacent to the largest wilderness 
complex in the lower 48 states, was heralded as a ``state-of-the-art'' 
mine when it began operations in 1994. Just three years later, the mine 
shut its doors--producing no profits and leaving behind a legacy of 
long-term water pollution. The Grouse Creek mine was permitted as a 
``zero discharge facility.'' Yet, soon after mining began, the tailings 
impoundment began to leak cyanide. As a result of on-going violations, 
the Forest Service posted signs which warned, ``Caution, do not drink 
this water.'' In 2003, the Forest Service declared the mine site an 
``imminent and substantial endangerment.'' Cleanup activities are on-
going.
Oregon: Formosa Mine
    In 1991, during a period of high metal prices, Canadian start-up 
Formosa Exploration Inc. launched a copper zinc mine on 76 acres of 
federal (BLM) and private land near the town of Riddle in southwest 
Oregon. The mine folded 2 1/2 years later in 1994 as prices slumped. 
According to the State of Oregon, the mine has contaminated 18 miles of 
the Oregon's Umpqua watershed (Middle Creek and South Fork of Middle 
Creek and Cow Creek)--eliminating prime habitat for the threatened 
Oregon coast Coho salmon and steelhead. So severe is the pollution that 
even insect life is gone in the upper reaches of the creeks, along with 
any chance of supporting fisheries.
Montana: Beal Mountain Mine
    The Beal Mountain Mine, located on the Beaverhead Deerlodge 
National Forest, operated from 1989-998. When the mine was permitted, 
the Environmental Analysis concluded that the operation of the mine 
would have no impacts to water quality, because ``there will be no 
discharge of mine or process water to surface waters.'' The agencies 
were wrong. Although the mine ceased operating years ago, it has 
continued to pollute neighboring streams with cyanide, selenium and 
copper at levels that harm aquatic life. Scientists have also 
determined that trout in water downstream of the mine are contaminated 
with harmful amounts of selenium caused by mining activities. Warren 
McCullough, who is responsible for enforcing state mine permit laws for 
Montana DEQ, told the Montana Standard in July 2003 that the aftermath 
of the closed Beal Mountain Mine is ``not going to be something that 
we're ever going to be able to walk away from.'' The State has 
determined that contaminated runoff from the mine will have to be 
treated in perpetuity.
Montana: Kendall Mine
    The Kendall Mine, an open pit, cyanide-leach mine located northwest 
of Lewistown, Montana, was permitted in 1989. The mine caused extensive 
water quality and quantity problems including numerous cyanide spills. 
In addition, precipitation flowing through the waste rock piles caused 
extensive contamination of groundwater and surface water. In 1998, the 
State of Montana ordered Canyon Resources, the owner of the mine, to 
pay $300,000 for polluting downstream waters with cyanide, selenium, 
arsenic and thallium. Canyon Resources claimed it did not have the 
financial resources to pay the fine. In 2002, Canyon finally paid the 
State a reduced penalty of $132,000--with only $13,000 in cash and the 
balance in mineral rights transferred from the company to the state. In 
October, 2001, six families who live downstream of the mine filed suit 
against the company for damages to their water supplies and private 
property. State officials have determined that long-term water 
treatment will be required at the mine.
Nevada: Jerritt Canyon
    Queenstake's Jerritt Canyon Mine in northern Nevada, which was 
permitted in 1980, has been releasing massive unreported amounts of 
mercury into the air. Emissions data, obtained from the Nevada 
Department of Environmental Protection (NDEP) and made public in June 
of 2007, indicates that the mine may have released as much as 6,000-
8,000 pounds of mercury air pollution in 2005 and 2006, yet it reported 
only 300-400 pounds to state and federal agencies for those years. Gold 
mines are the fifth largest source of mercury air emissions in the U.S, 
producing 25% of all the mercury air emissions west of Texas. Yet there 
are no federal regulations requiring gold mines to control their 
mercury emissions. Mercury is considered the most dangerous heavy metal 
because it is toxic to humans and moves freely through the environment.
                                 ______
                                 
                      Association of Commerce and Industry,
                                   Albuquerque, NM, March 10, 2008.
Hon. Pete V. Domenici,
U.S. Senate, 328 Hart Senate Office Building, Washington, DC.
    Dear Senator Domenici: Today I am contacting you to ask for your 
assistance in helping to jump start the New Mexican economy as well as 
meeting our nation's energy needs. I am speaking about renewed uranium 
mining in New Mexico and the positive impact it could have on our 
state's economy.
    Now, more than ever, we need our congressional leaders to help 
remove the road blocks that stand in the way of uranium mining in our 
state. Bans on mining by the Navajos, increased indifference at the 
Nuclear Regulatory Commission and administrative and bureaucratic 
snafus have made it more difficult for this important activity to take 
place. As our nation continues to depend on energy sources from 
unstable parts of the world, we need to actively pursue opportunities 
here in our own backyard.
    In closing, we ask that you do everything in your power to bring 
uranium mining back to New Mexico. It will surely make our state 
stronger economically and our nation more energy independent.
    Thank you for your attention to this matter.
            Sincerely,
                                   Dr. Beverlee J. McClure,
                                                   President & CEO.
                                 ______
                                 
   University of New Mexico Health Sciences Center,
                                       College of Pharmacy,
                                    Albuquerque, NM, March 7, 2008.
Hon. Pete V. Domenici,
U.S. Senate, 328 Hart Senate Senate Office Building, Washington, DC.
    Dear Senator Domenici: I am writing today to express my support for 
renewed uranium mining in New Mexico and request your assistance in 
educating the public on the issue of uranium mining as well as 
supporting legislation that will remove impediments to renewed mining 
in the state.
    Previously, New Mexico served as a top U.S. uranium production area 
and today the state stands to gain several billions of dollars in 
royalities and tax revenues, in addition to an estimated 3,000+ direct 
jobs, from renewed uranium mining.
    Uranium mining could also support institutes for research and 
medicine such as the New Mexico Center for Isotopes in Medicine which 
brings in a highly skilled workforce, new products and services and 
business activities.
    Moreover, the uranium mining industry understands that its future 
rests on extraction operations that are safe, clean and responsible to 
the workers, the public and the environment.
    With your support, New Mexico has the potential to position itself 
as a leading force in solving our nation's energy problems by further 
meeting our energy demands. I appreciate your leadership on this issue 
in the Senate and look forward to working with you in the future.
            Sincerely,
                                        Dr. John A. Pieper,
                                                Dean and Professor.
                                 ______
                                 
                 Citizens' Alliance for Responsible Energy,
                                   Albuquerque, NM, March 11, 2008.
Hon. Pete V. Domenici,
U.S. Senate, 328 Hart Senate Office Building, Washington, DC.
    Dear Senator Domenici: There is a much needed buzz here in New 
Mexico that centers around Cibola and McKinley counties. People are 
excited about the return of uranium mining to the region and the jobs 
that will be created. As the executive director of Citizens' Alliance 
for Responsible Energy, I also support the return of the uranium 
industry as uranium is an important component in the renaissance of 
clean nuclear energy.
    The uranium industry has undergone a dramatic transformation since 
the last mining cycle ended in the 1980's. These improvements will 
allow the industry to meet its safety and environmental 
responsibilities. This should alleviate many of the fears and 
misconceptions that have plagued the return of uranium mining in 
western New Mexico.
    Today, there are state and federal agencies that regulate and 
ensure uranium mining is safe for the communities and the environment. 
These agencies such as the EPA, and Mine Safety and Health 
Administration, as well as the New Mexico Environment Department and 
the Energy, Mineral and Natural Resources Department were not in 
existence during the 1950's. Mining companies are now closely regulated 
and watched by these agencies, guaranteeing that their operations are 
safe for the workers and the environment.
    Since 1972, safety regulations and education have made uranium 
mining no more dangerous than any other kind of extraction industry. 
The opposition to mining stems from a lack of information, and when 
provided with current facts I am confident that these groups will come 
to welcome the uranium industry back to the area. I urge you to endorse 
the revival of uranium mining in New Mexico.
            Thanks for CARE-ing!
                                               Marita Noon,
                                                Executive Director.
                                 ______
                                 
 Statement of Jon J. Indall, Uranium Producers of America, Santa Fe, NM
    The Uranium Producers of America (``UPA'') is a group of domestic 
uranium mining companies who work together to promote the viability of 
the domestic uranium industry. UPA companies have operations in New 
Mexico, Texas, Wyoming, Nebraska, Colorado, Utah, Arizona and South 
Dakota. We would like to take this opportunity to submit this letter 
for the record on the March 12, 2008 Senate Committee on Energy and 
Natural Resources hearing on Abandoned Mines and Uranium Mining. 
Certain comments made at the hearing contain what we believe to be 
inaccurate information, and we would like to provide the following 
clarifications and corrections for the record.
    With respect to the testimony provided about abandoned hardrock 
mines, we have attached the Office of Surface Mining Reclamation and 
Enforcement Annual Evaluation Report for the year 2005, prepared by the 
Navajo Nation Abandoned Mine Lands Reclamation Program. This report 
indicates that the Navajo Abandoned Mine Lands Reclamation Program has 
reclaimed 913 of 1,032 uranium mines located on the Reservation, at a 
cost of $23 million dollars. The facts set forth in this report are 
inconsistent with statements that have been made to the Committee on 
the extent of the sites remaining to be reclaimed on the Navajo 
Reservation and the costs thereof.
    An additional area of misinformation concerns the alleged cancer 
incidence rates that are claimed to have been caused by historical 
uranium mining. The following statistics from the University of New 
Mexico Cancer Research Center (``CRS''), the recognized authority for 
cancer research in New Mexico, confirms that the cancer incident rates 
for McKinley and San Juan Counties, which are largely encompassed by 
the Navajo Reservation, are far lower than the average rate among 
American Indians in other New Mexico counties where there is no known 
uranium occurrence or history of uranium mining. The following data was 
obtained from CRS:\1\
---------------------------------------------------------------------------
    \1\ Age Adjusted Invasive Cancer Incidence Rates by County in New 
Mexico, All Sites, American Indian 2000-2004, Total American Indian 
Population 200-2004, Age Adjusted to the 2000 U.S. Standard Million 
Population UNM Cancer Research Center website cancer rates info./nm/
nmmort.html.

          Cancer mortality rates for American Indians (AI's) from 2000-
        2004 were higher for Taos County (159-198/100,000) than 
        McKinley (135-148/100,000). There are no uranium mines in Taos 
        County. The cancer mortality rates for non-Hispanic whites 
        (185-196/100,000) in McKinley County were also higher than that 
        of American Indians.
          Cancer incidence rates in Taos and Santa Fe County are 369-
        393/100,000; McKinley is 267-293/100,000 and Cibola is 53-211/
        100,000. Again, counties with uranium mining are less than 
        those without uranium mining.

    In 2006, the Indian Health Service reported:

          The American Indian and Alaska Native People have long 
        experienced lower health status when compared with other 
        Americans. Lower life expectancy and the disproportionate 
        disease burden exist perhaps because of inadequate education, 
        disproportionate poverty, discrimination in the delivery of 
        health services and cultural differences. These are broad 
        quality of life issues rooted in economic adversity and poor 
        social conditions.\2\
---------------------------------------------------------------------------
    \2\ Indian Health Disparities Report, January 2006.

    These statistics belie the charges that uranium mining led to 
serious cancer outbreaks in McKinley and Cibola Counties.
    An additional area of misinformation centers around the Church Rock 
mill tailings spill that occurred in 1979. While this was a serious 
event, the results of the spill were not as harmful as some suggest. 
The Church Rock incident was reported upon in the Journal of the Health 
Physics in Volume 47, Number 1, July 1984, in an article entitled ``The 
Assessment of Human Exposure to Radionuclides from a Uranium Mill 
Tailings Release and Mine Dewatering Effluent.'' This report was 
authored by two staff members of the U.S. Center for Disease Control, 
two staff members of the New Mexico Health and Environment Department, 
and a staff member of the U.S. Environment Protection Agency. Two 
powerful conclusions were reached in this report:

          A review of state and federal regulations that pertain to the 
        ingestion doses calculated from the Church Rock data indicated 
        that no exposure limits were exceeded by the spill, or through 
        chronic exposure to mine dewatering effluent.
          In light of the currently known cancer incidence and 
        mortality risks associated with levels of radionuclides 
        measured at Church Rock and Gallup, we conclude that the 
        exposed populations are too small for investigators to detect 
        increases in cancer mortality with acceptable levels of 
        statistical power. In fact, it may be misleading to establish a 
        (cancer) registry with the foreknowledge of low probability of 
        detecting mortality increases.

    These are examples of readily available factual data that are often 
overlooked in the debate over uranium mining. It is important that the 
discussions over new uranium mining should not dwell on the past, but 
instead should be directed to the new standards, procedures and 
technologies that will govern today's industry.
   Attachment.--Office of Surface Mining Reclamation and Enforcement 
                        Annual Evaluation Report
                              introduction
    This annual evaluation report is produced by the Office of Surface 
Mining (OSM) in fulfillment of its Statutory responsibility [under the 
Surface Mining Control and Reclamation Act of 1977, (SMCRA)] to 
annually assess the accomplishments of the Navajo Abandoned Mine Land 
Reclamation Program (NAMLRP). The NAMLRP is under the Executive Branch 
of the Navajo Nation Division of Natural Resources. The annual report 
consists of OSM's oversight findings based on field inspections and 
meetings with the Navajo Abandoned Mine Land Program during the 12-
month evaluation period beginning July 1, 2004 and ending June 30, 
2005.
    The Office of Surface Mining Reclamation and Enforcement (OSM) is 
responsible for approving State and Tribal AML Reclamation Programs to 
carry out the goals of Title IV of SMCRA. The primary goal of Abandoned 
Mined Land (AML) Programs approved under the SMCRA, is to mitigate the 
effects of past coal mining by reclaiming abandoned coal mines and coal 
processing facilities. Emphasis is placed on first correcting the most 
serious problems endangering public health, safety, general welfare, 
and property. SMCRA provides for reclamation of both coal and non-coal 
mines abandoned prior to May 1977; however, coal mines generally have 
funding priority. Once a State or Tribal Program has certified that all 
of its priority one coal hazards have been reclaimed, SMCRA authorizes 
the use of State or Tribal AML funds for Public Facility or 
Infrastructure Projects (PFPs), as a way of off-setting past and 
present mining related impacts to affected communities.
    On behalf of the Secretary of Interior, OSM administers the 
Abandoned Mine Lands (AML) Reclamation Fund by awarding grants to 
States and Indian Nations, to cover the costs associated with both 
program administration and project construction. The OSM Western 
Region's (OSMWR), Albuquerque Field Office (AFO) provides assistance to 
the NAMLRP and also evaluates NEPA compliance, inspects reclamation 
sites and PFP construction sites and summarizes the NAMLRP's 12-month 
accomplishments in an annual evaluation report (AER).
                      part i. general information
Program History
    On May 16, 1988, OSM approved the Navajo Abandoned Mine Land 
Reclamation Program and associated Navajo AML Code/Plan. This approval 
provided authority for the Navajo Nation to use AML funds to reclaim 
abandoned mines on the Navajo Nation. NAMLRP did not apply for an 
Emergency Program, so OSM retained the authority for reclamation of 
``emergency'' AML projects.
    On May 4, 1994, the Secretary of Interior concurred with the 
NAMLRP's certification that all known eligible priority-1 and priority-
2 abandoned coal mines were reclaimed. Since receiving certification in 
May 1994, the NAMLRP used its AML funds almost exclusively for 
reclamation of eligible abandoned non-coal (uranium and some copper) 
mines. The Northern Navajo AML Reclamation Project was the final non-
coal reclamation project in the NAMLRP's AMLIS inventory. It was 
successfully completed in May 2004. For the most part, this project 
completed their AML inventory of non-coal sites, however, a few small 
abandoned coal mine sites; and gob piles have since been identified 
that were added to the inventory for reclamation. In addition, Navajo 
AML also continually monitors and addresses any maintenance needs that 
arise on past reclamation work. NAMLRP contracts carry a 2-year 
warranty; however, any older reclamation maintenance needs must be 
completed under new contracts. Navajo AML has also secured funding, for 
a couple of small coal outcrop fires in 2004 and 2005.
    In 2001, the NAMLRP amended its Navajo AML Reclamation Plan/Code to 
provide the authority to use AML funds for the construction of public 
facilities as a means of mitigating or offsetting current and past 
mining related impacts to impacted communities. In 2002, the NAMLRP 
funded its first Public Facility Projects (PFP). In 2005, AML 
construction funds were used for construction of PFPs, reclamation of 
newly identified coal sites and for maintenance of previously reclaimed 
coal and non-coal sites.
    Maintenance projects entail the repair of previously reclaimed 
sites that have visibly eroded or where erosion appears eminent. PFPs 
primarily repair, expand or add new infrastructure (water, sewer, 
electric power, roads) or public buildings (schools, offices, senior 
centers, recreation centers, other public buildings).
    The NAMLRP operates under an annual budget of approximately $2.28 
Million. This figure represents the 10-year average distribution for 
the period beginning October 1, 1995 through September 30, 2004 and it 
translates to approximately 66.76% of its annual state share 
collections which averaged $3.42 M during this same period. The 33.24% 
of the Navajo AML fee collections that have not been distributed to the 
Navajo Nation; is called the Navajo Nation Tribal Share Balance. There 
was over $30M in the undistributed Navajo Nation Tribal Share Balance, 
as of September 30, 2004.
    During EY-2005, NAMLRP had 10 PFPs in construction. Seven (7) of 
these PFPs (Moenave--Power Line Extension, Huerfano--Multi-Purpose 
Building, Dilkon--Sewage Lagoon, Ft. Defiance--Powerline Extension, 
Chinle Valley School--Group Home Renovation, Standing Rock--Chapter 
House, and Twin Lakes--Infrastructure for a Senior Citizens Center & 
Infrastructure) were completed during EY-2005. The other three (San 
Juan--Multi-Purpose Building, Coalmine Canyon Waterline Extension and 
the Nenahnezad--Navajo Preparatory School Renovation) were in 
construction but not completed as of the end of EY-2005.
    In addition, during EY-2004 and the early part of EY-2005, NAMLRP 
completed the restoration of a historic building in Window Rock, 
Arizona that is now the current office location for the NAMLRP-Window 
Rock Office. The office was re-equipped and re-designed with open space 
and the computer network, etc. was installed during this same 
timeframe. This project was done with Navajo Nation Set-Aside funds. 
(See photos in the appendix to this report.)
    In addition, during EY-2005 NAMLRP had one reclamation maintenance 
project in construction and a second (Chaco Plains) was in project 
development. A coal outcrop fire (Burnham #1) was fully addressed and 
extinguished. Another coal outcrop fire project (Burnham #2) was in 
project development and it will be addressed in EY-2006.
    This is the fourth consecutive year that the NAMLRP used AML hinds 
to construct Public Facility Projects (PFPs). Almost all PFPs funded by 
the NAMLRP were jointly funded projects. Jointly funded projects are 
often referred to as leveraged projects, meaning that funding for the 
project consists not only of Navajo AML, funds but may also consist of 
funds from individual Navajo Nation Chapters, Tribal funds, State 
funds, or funds from other Federal agencies. In accordance with the 
NAMLRP's approved AML Plan, the amount of leverage funding is one of 
the items considered when selecting PFPs for funding. The concept of 
leveraged funding is intended to increase the overall benefit obtained 
from the limited amount of AML funds available to the Navajo Nation.
    PFP submissions that were funded so far can be grouped into four 
main categories:

          1) Facilities projects such as Chapter Houses, Community 
        Centers, Multi-Purpose Buildings, Senior Citizen Centers and 
        Head Start facilities;
          2) Building renovation & improvement projects such as 
        upgrades of plumbing and electrical systems.
          3) Infrastructure projects such as water wells, water lines, 
        sewer lines and electrical power lines, sanitation facilities, 
        and road improvements;
          4) Commercial/business development projects such as an Arts 
        and Crafts Center.
Program Staffing
    The NAMLRP has three office locations to serve the Navajo Nation. 
The main office is in Window Rock, Arizona, where the NAMLRP Department 
Manager and administration personnel are located as well as a couple of 
field personnel. Two field offices, the Shiprock, New Mexico office, 
and the Tuba City, Arizona Office are primarily responsible for AML, 
and PFP field activities. The NAMLRP currently has a staff of 26 full-
time equivalent (FTE's) positions, two less than last year. Both the 
reclamation work and the public facility / infrastructure projects are 
being accomplished with this staffing. Approximately seven of the 28 
occupied positions currently share time with the Navajo Nation's 
Uranium Mill Tailings Remedial Action Program (UMTRA), which is also 
under the direction of Ms. Madeline Roanhorse, Department Manager.
Grants and Financial Information
    According to data published on OSM's Web Page, the State (Tribal) 
share distribution for FY-2005 was $2,156,869. The ``undistributed'' 
Tribal Share Balance for the Navajo Nation as of September 30, 2004 was 
over $30 M ($30,863,762). The Tribal Share Balance data for the end of 
the evaluation period (June 30, 2005) is not yet published and 
available. To date the Program has collected $92,845,835 in Tribal 
Share fees and has spent a total of $61,982,073 of those Tribal Share 
fees, the vast majority of which has gone toward coal and uranium 
reclamation.
    The following AML grants were either active or closed out during 
the evaluation period:
----------------------------------------------------------------------------------------------------------------
                        Grant Number                             End of Grant Period             Amount
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
GR107810                                                                     12/31/03               $4,270,653.
----------------------------------------------------------------------------------------------------------------
GR207810                                                                     12/31/04               $8,249,799.
----------------------------------------------------------------------------------------------------------------
GR307810                                                                     12/31/05               $3,202,765.
----------------------------------------------------------------------------------------------------------------
GR407810                                                                     12/31/06               $4,044,524.
----------------------------------------------------------------------------------------------------------------
GR507810*                                                                    12/31/07                $3,112,749
----------------------------------------------------------------------------------------------------------------
* This is the FY-2005 grant award.

    NAMLRP Department Manager (Director) also has responsibility for 
the Navajo UMTRA Program which operates in unison with the U.S. 
Department of Energy.
    As mentioned before, the NAMLRP has office locations in Window 
Rock, Arizona, Tuba City, Arizona and Shiprock, New Mexico. All three 
offices work on both reclamation projects and public facility projects, 
including NEPA compliance. The three AML offices support each other and 
coordinate well on projects. Enthusiasm has been demonstrated in both 
ridding the Navajo Nation of mine related physical and environmental 
hazards and in developing and completing infrastructure and public 
facility projects for impacted Chapters. All three offices provide 
support and assistance to OSM in gathering information for oversight 
purposes and in leading and coordinating oversight inspection tours in 
the field for both PFPs and AML reclamation. This cooperation 
facilitates OSM's oversight of the Program and the preparation of 
annual reports.
    NAMLRP staff continues to exhibit high dedication to the Program's 
objectives and morale appears to be high. NAMLRP routinely invites OSM 
to important events and meetings, both managers and staff are always 
professional and cordial. Action items and recommendations are always 
well received by the NAMLRP and are always carried out. The grants 
concern discussed above is beyond the control of NAMLRP, however, 
NAMLRP has fully cooperated with OSMAFO to get that concern resolved 
with their Finance Department.
    Chapters and Tribal entities appear to hold the NAMLRP in high 
regard. The NAMLRP is known within the Navajo community for being 
responsive to community needs and concerns and for following through on 
its goals and objectives. Communities have also openly expressed their 
appreciation for the technical assistance that the NAMLRP has provided. 
That technical assistance has enabled Chapters to finalize project 
proposals by fulfilling grant requirements, facilitating the 
negotiation of other sources of leveraged funds and by assisting with 
the completion of project descriptions and justifications.
    In 2004, the Shiprock and Tuba City offices were reorganized 
(streamlined) to facilitate joint cooperation on AML reclamation work 
and a mixture of PFPs. Also, staff and management have actively pursued 
various training opportunities. Many employees now have extensive 
experience with NEPA and the understanding of federal requirements for 
funding PFPs has greatly improved.
    NAMLRP has been able to efficiently use its administration and 
construction grant funds. The NAMLRP is considered by OSM to be very 
cost effective. The amount of construction activities completed 
annually easily justify the Program's staffing level, in fact, the 
multi-faceted Program accomplishes a lot with a staff of only 26 FTE's, 
given the number of contracts active at one time, the distances between 
projects, the vastness of the Navajo Nation, the number of impacted 
Chapters, and the difficult terrain. What has been most important to 
OSM is that AML reclamation and PFP's have been consistently brought on 
line every year, contracts are let out, and construction is completed 
on schedule. As a result, the AMLIS inventory of non-coal reclamation 
was essentially completed in 2004, aside for annual maintenance 
projects and a few newly identified mine hazards that are addressed 
each year.
    There is a tremendous need for new infrastructure and facilities 
such as schools, day care, health care, senior citizen centers, office 
space, etc., on the Navajo Nation. The PFP's completed by the NAMLRP 
have already improved living conditions for Chapter communities 
impacted by past and present mining activities.
    As previously mentioned, so far project submissions can be grouped 
into four main categories:

          1) Facility projects such as Chapter Houses, Community 
        Centers, Senior Citizen Centers, Health Facilities, Multi-
        Purpose Buildings and Head Start or School facilities;
          2) Building renovation & improvement projects such as 
        upgrades of plumbing and electrical systems.
          3) Infrastructure projects such as water lines, sewer lines, 
        electrical lines, sanitation facilities, sewer/waste disposal 
        sites and road improvements;
          4) Commercial/business development projects such as an Arts 
        and Crafts Mall.

    The NAMLRP worked with its oversight committee, the Navajo Nation 
Resources Committee of the Navajo Nation Council, to develop selection 
procedures and criteria that in effect prioritize the selection and 
funding of PFP proposals on the Navajo Nation. However, within the 
scope of these eligibility requirements, each Chapter is allowed to 
identify its needs and develop its project proposals.
    NAMLRP has developed several training presentations for development 
of PFPs such as planning, communication, writing grant proposals, 
environmental compliance, construction management, contract management, 
project management, and construction monitoring. The NAMLRP staff 
assigned to PFPs, routinely translate / interpret complex technical 
information for the public in English and/or Navajo as necessary. In 
addition, they provide assistance to the Chapters as necessary 
throughout the process.
Active Public Facility Projects
    In 2002, the NAMLRP received their first PFP proposals in response 
to a Request for Proposals (RFP). In all, a total of 110 proposals were 
submitted to NAMLRP. A live member ``Project Review Committee'' was 
established, from respective Navajo Nation departments, to review and 
rank each of the proposals, in accordance with the project proposal 
procedures developed by the NAMLRP. Twenty (20) of the 110 project 
proposals were selected for funding. Nineteen of the 20 were funded 
using regular AML funds and one project was funded with AML set-aside 
funds. Some of the twenty project proposals were construction ready and 
others required assistance from NAMLRP in getting the Environmental 
Assessment or Categorical Exclusion ready for submission to OSM.
    By the end of EY-2002 (September 30, 2002), NAMLRP had submitted 15 
of the twenty PFP packages to OSM, each requesting that OSM issue a 
Findings of No Significant Impact (FONSI) and an Authorization to 
Proceed (ATP). OSM was able to issue a FONSI and an ATP for 14 of the 
15 project submissions. One of the packages required additional NEPA 
documentation and was returned to NAMLRP (it was resubmitted during EY-
2003). Thus, six of the original 20 projects remained to be approved.

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