[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
                   INTERIOR, ENVIRONMENT, AND RELATED 
                    AGENCIES APPROPRIATIONS FOR 2012 
======================================================================= 

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS
                              FIRST SESSION

                                ________

       SUBCOMMITTEE ON INTERIOR, ENVIRONMENT, AND RELATED AGENCIES
                   MICHAEL K. SIMPSON, Idaho, Chairman
 JERRY LEWIS, California                JAMES P. MORAN, Virginia
 KEN CALVERT, California                BETTY McCOLLUM, Minnesota
 STEVEN C. LaTOURETTE, Ohio             MAURICE D. HINCHEY, New York
 TOM COLE, Oklahoma                     JOSE E. SERRANO, New York
 JEFF FLAKE, Arizona
 CYNTHIA M. LUMMIS, Wyoming         

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mr. Dicks, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
              David LesStrang, Darren Benjamin, Jason Gray,
                     Erica Rhoad, and Colin Vickery,
                            Staff Assistants

                                ________

                                 PART 6
                                                                   Page
 Major Management Challenges at the Department of the Interior....    1
 Major Management Challenges at the Environmental Protection 
Agency............................................................  149
 Environmental Protection Agency FY 2012 Budget Oversight Hearing.  247
 Department of the Interior FY 2012 Budget Oversight Hearing......  547
 National Park Service FY 2012 Budget Oversight Hearing...........  707
 Bureau of Land Management FY 2012 Budget Oversight Hearing.......  763
 Office of Surface Mining FY 2012 Budget Oversight Hearing........  855

                                ________

         Printed for the use of the Committee on Appropriations


















                                 PART 6

                                 MMCDOI

                                 MMCEPA

                                  EPA

                                  DOI

                                  NPS

                                  BLM

                                  OSM


















  INTERIOR, ENVIRONMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 2012
                                                                      

                   INTERIOR, ENVIRONMENT, AND RELATED
                    AGENCIES APPROPRIATIONS FOR 2012
=======================================================================

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS
                              FIRST SESSION

                                ________

       SUBCOMMITTEE ON INTERIOR, ENVIRONMENT, AND RELATED AGENCIES
                   MICHAEL K. SIMPSON, Idaho, Chairman
 JERRY LEWIS, California               JAMES P. MORAN, Virginia
 KEN CALVERT, California               BETTY McCOLLUM, Minnesota
 STEVEN C. LaTOURETTE, Ohio            MAURICE D. HINCHEY, New York
 TOM COLE, Oklahoma                    JOSE E. SERRANO, New York
 JEFF FLAKE, Arizona
 CYNTHIA M. LUMMIS, Wyoming         

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mr. Dicks, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
              David LesStrang, Darren Benjamin, Jason Gray,
                     Erica Rhoad, and Colin Vickery,
                            Staff Assistants

                                ________

                                 PART 6
                                                                   Page
 Major Management Challenges at the Department of the Interior....    1
 Major Management Challenges at the Environmental Protection 
Agency............................................................  149
 Environmental Protection Agency FY 2012 Budget Oversight Hearing.  247
 Department of the Interior FY 2012 Budget Oversight Hearing......  547
 National Park Service FY 2012 Budget Oversight Hearing...........  707
 Bureau of Land Management FY 2012 Budget Oversight Hearing.......  763
 Office of Surface Mining FY 2012 Budget Oversight Hearing........  855

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 66-892                     WASHINGTON : 2011
























                        COMMITTEE ON APPROPRIATIONS

                    HAROLD ROGERS, Kentucky, Chairman

 C. W. BILL YOUNG, Florida \1\        NORMAN D. DICKS, Washington
 JERRY LEWIS, California \1\          MARCY KAPTUR, Ohio
 FRANK R. WOLF, Virginia              PETER J. VISCLOSKY, Indiana
 JACK KINGSTON, Georgia               NITA M. LOWEY, New York
 RODNEY P. FRELINGHUYSEN, New Jersey  JOSE E. SERRANO, New York
 TOM LATHAM, Iowa                     ROSA L. DeLAURO, Connecticut
 ROBERT B. ADERHOLT, Alabama          JAMES P. MORAN, Virginia
 JO ANN EMERSON, Missouri             JOHN W. OLVER, Massachusetts
 KAY GRANGER, Texas                   ED PASTOR, Arizona
 MICHAEL K. SIMPSON, Idaho            DAVID E. PRICE, North Carolina
 JOHN ABNEY CULBERSON, Texas          MAURICE D. HINCHEY, New York
 ANDER CRENSHAW, Florida              LUCILLE ROYBAL-ALLARD, California
 DENNY REHBERG, Montana               SAM FARR, California
 JOHN R. CARTER, Texas                JESSE L. JACKSON, Jr., Illinois
 RODNEY ALEXANDER, Louisiana          CHAKA FATTAH, Pennsylvania
 KEN CALVERT, California              STEVEN R. ROTHMAN, New Jersey
 JO BONNER, Alabama                   SANFORD D. BISHOP, Jr., Georgia
 STEVEN C. LaTOURETTE, Ohio           BARBARA LEE, California
 TOM COLE, Oklahoma                   ADAM B. SCHIFF, California
 JEFF FLAKE, Arizona                  MICHAEL M. HONDA, California
 MARIO DIAZ-BALART, Florida           BETTY McCOLLUM, Minnesota
 CHARLES W. DENT, Pennsylvania
 STEVE AUSTRIA, Ohio
 CYNTHIA M. LUMMIS, Wyoming
 TOM GRAVES, Georgia
 KEVIN YODER, Kansas
 STEVE WOMACK, Arkansas
 ALAN NUNNELEE, Mississippi
   
 ----------
 1}}Chairman Emeritus    

               William B. Inglee, Clerk and Staff Director

                                  (ii)





















     DEPARTMENT OF THE INTERIOR, ENVIRONMENT, AND RELATED AGENCIES 
                        APPROPRIATIONS FOR 2012

                              ----------                              

                                            Tuesday, March 1, 2011.

     MAJOR MANAGEMENT CHALLENGES AT THE DEPARTMENT OF THE INTERIOR

                               WITNESSES

ANU MITTAL, DIRECTOR, THE NATURAL RESOURCES AND ENVIRONMENT DIVISION, 
    GAO
FRANK RUSCO, DIRECTOR, THE NATURAL RESOURCES AND ENVIRONMENT DIVISION, 
    GAO
MARY KENDALL, ACTING INSPECTOR GENERAL, DEPARTMENT OF THE INTERIOR
    Mr. Simpson. The committee will come to order.

                  Opening Remarks of Chairman Simpson

    I want to welcome the members of the subcommittee that are 
here as well as our panel of witnesses this morning from the 
Government Accountability Office and the Department of 
Interior's Office of Inspector General. We have about three new 
members of the committee that we will introduce when they come, 
Mrs. Lummis, Mr. Flake and Mr. Serrano, who are new to the 
Interior Subcommittee, and we will introduce them when they 
come and welcome them to the committee.
    Our first witness today is Ms. Anu Mittal, Director of the 
Natural Resources and Environment Division at the GAO. She will 
be joined by Dr. Frank Rusco, also Director of the Natural 
Resources and Environmental Division at the GAO. They will be 
followed by Mrs. Mary Kendall, the Acting Inspector General at 
the Department of Interior. We appreciate each of you appearing 
before the subcommittee this morning.
    This morning's session marks the first of two dozen 
hearings that the Interior Subcommittee will hold between now 
and mid-April. Our primary focus throughout these hearings will 
be on oversight of the programs and budgets under the 
subcommittee's jurisdiction. Oversight is especially important 
this year as we ask agencies to prioritize their funding needs 
to separate the ``must haves'' from the ``nice to haves'' at 
this time of rising deficits and shrinking subcommittee 
allocations.
    Assisting us in this effort will be the highly respected, 
nonpartisan GAO and several independent agency IGs. In hearings 
today, tomorrow and next week, we will examine in detail 
programmatic concerns and management issues within the 
Department of Interior, the Forest Service and the EPA. We have 
asked our witnesses to identify and summarize specific concerns 
about programs and policies within each agency. Together, the 
GAO and the agencies' IGs will testify about the major 
management challenges facing these agencies so our subcommittee 
will be better informed to address these challenges and better 
prepared to write the subcommittee's fiscal year 2012 budget.
    The issues highlighted by this morning's testimony point to 
some of the fundamental weaknesses within the Department of 
Interior deserving of attention by the Appropriations Committee 
and this Congress. The same is true for the testimony we will 
receive tomorrow relating to the EPA and next week relating to 
the Forest Service. Taken together, this testimony will help 
members formulate questions when we hear from EPA Administrator 
Lisa Jackson at this Thursday's budget hearing and from 
Interior Secretary Ken Salazar and the Forest Service Chief Tom 
Tidwell at next week's budget hearings.
    Because of the importance of today's testimony, the 
subcommittee is allocating 15 minutes each for the GAO and the 
IG for opening statements so that they can adequately present 
their concerns for members. We will first hear from the GAO and 
then from the Inspector General followed by members' questions.
    I will turn the time over to Ms. McCollum if you have an 
opening statement.

                    Opening Remarks of Ms. McCollum

    Ms. McCollum. Thank you, Mr. Chair, and good morning.
    It is extremely important for Congress and especially the 
members of this subcommittee to base decisions on facts, and we 
need to gain the insights of the GAO and understand the work of 
you folks here to ensure that the departments are well run, 
efficient, and we are being wise with the public's money and we 
earn the public's trust.
    We all know that Interior is directly responsible for 
carrying over 500 million acres. That is about 20 percent of 
America's lands. We know that this Department generates more 
revenue, largely from oil, gas and coal, than it spends. And it 
also holds a sacred responsibility to fulfill the government's 
trust and obligations to America's first people.
    You cannot balance the federal budget on the back of this 
Department, and I agree, we do need to see that each and every 
federal dollar is wisely spent but we also need to invest 
properly in the management of our priceless resources. The 
fragile nature of our current economic recovery and, quite 
frankly, of our environment, means that the decisions we make 
in this room have a real impact on America, especially in the 
West and the South where climate change is altering landscapes, 
forests and fresh sources of water.
    It would appear, based on today's testimony, that existing 
law and policy does not pay America's taxpayers a fair market 
price for the extensive fossil fuel, hard-rock minerals, 
grazing rights that industry extracts from public lands. It 
indicates to me that we need to invest in this part of America 
and we need to invest wisely to manage the resources, not just 
cut budgets.
    I want to thank the GAO for their views on this and the 
inspectors because we need to have better management of oil and 
gas, both onshore and offshore. If we did not learn anything, 
we should have learned from close scrutiny of the BP Transocean 
oil disaster, that we need to be more mindful, more diligent 
and we need to have more oversight on these issues.
    Mr. Chair, I am glad you are having this hearing today and 
I hope we can learn how to invest in America wisely and 
safeguard the resources we have for future generations.
    Mr. Simpson. Thank you.
    Ms. Mittal, it is your turn.

               Testimony of Anu K. Mittal and Frank Rusco

    Ms. Mittal. Mr. Chairman and members of the subcommittee, 
we are pleased to be here today to participate in your hearing 
on the major management challenges of the Department of the 
Interior. Our testimony today is an update of our March 2009 
testimony before this subcommittee. Specifically, we will 
discuss management challenges in seven key areas. I will cover 
six of the areas that relate to the overall management of 
Interior's programs and then my colleague, Frank Rusco, will 
cover the seventh area related to Interior's oil and gas 
program, which, as you know, GAO just added to its high-risk 
list.
    The first area of management challenges that I would like 
to cover relates to Interior's resource protection functions. 
In fulfilling these functions, Interior has faced a number of 
challenges in the past and we believe will continue to face 
additional ones in the future. Based on our recent work, I 
would like to highlight three specific resource protection 
challenges.
    First is the continuing challenge of protecting lives, 
property and resources from wildland fires. While Interior 
partnering with the Forest Service has taken some actions to 
better respond to the wildland fire problem, a significant 
amount of work remains to be done and many of the 
recommendations that we have made in the past have not yet been 
fully implemented.
    The second resource protection challenge is that of 
protecting federal land and water resources from the effects of 
climate change. While Interior has begun to consider measures 
that would strengthen the resilience of natural resources in 
the face of climate change, we believe that in a fiscally 
constrained environment, the Department will be challenged in 
setting priorities and making resource allocation decisions to 
address these impacts.
    The third resource protection challenge relates to 
protecting and securing federal lands from illegal activities. 
Our recent work has found that although Interior agencies 
consider information on the occurrence and effects of illegal 
activities on federal lands, the agencies do not systematically 
assess the risk posed by such activities when determining their 
needs for resources and making resource allocation decisions.
    The second area of major management challenges relates to 
weaknesses in Interior's management of Indian and insular area 
programs. For several years we have identified a variety of 
issues that Interior faces with these programs. For example, 
Interior's Bureau of Indian Affairs continues to face 
challenges in processing land and trust applications, and 
Interior's Office of Insular Affairs continues to face 
challenges in providing assistance to insular areas. Our recent 
work has again highlighted the longstanding nature of the 
financial program management and economic challenges that the 
insular areas face as well as concerns with Interior's 
oversight of the programs for these areas and the potential 
that this creates for mismanagement.
    The third major management challenge for Interior has been 
in the area of land sales, acquisitions and exchanges. Our 
recent work has identified additional weaknesses in this area. 
Specifically, we have concluded that Interior faces a number of 
challenges in completing future land sales and acquisitions 
under the Federal Land Transaction Facilitation Act, known as 
FLTFA, and we have identified a number of weaknesses in how 
Interior's Bureau of Land Management manages land exchanges. We 
have made recommendations to both Congress and Interior to 
address these concerns. While some steps have been taken to 
better manage the land exchange program, several of our other 
recommendations have not yet been implemented.
    The fourth major management challenge relates to Interior's 
ability to adequately maintain its facilities and 
infrastructure. For fiscal year 2010, the Department estimated 
that its deferred maintenance backlog was between $13.5 billion 
and $19.9 billion. Again, in a fiscally constrained 
environment, we believe that managing such a significant 
deferred maintenance backlog will continue to be a challenge 
for the Department.
    The fifth major management challenge area for Interior is 
the need to enhance its financial assurance and bonding 
programs for mining and oil and gas operations. For example, 
our recent work has shown that while Interior requires oil and 
gas operators to reclaim the land they disturb and post a bond 
to help ensure they do so, not all operators performed the 
required reclamation and the minimum bond amounts have not been 
increased in almost 50 years. We issued a report last Friday 
that recommends that Interior take a number of steps to improve 
its bonding program for oil and gas operators including 
increasing the minimum bond amounts. Similarly, hard-rock 
mining operators are required to provide financial assurances 
before they begin exploration or mining on federal lands. 
However, we have found that the amount of financial assurances 
posted by these operators has been inadequate and does not 
cover the full cost of reclamation.
    Finally, I would like to cover a new major management 
challenge that we have recently identified relating to 
Interior's information security. With an information technology 
budget of nearly $1 billion, Interior relies on its 
computerized systems to carry out both its financial and 
mission-related operators. However, our work has found that 
Interior has been challenged to effectively protect its 
computer systems and networks and has not consistently 
implemented effective controls to prevent, limit and detect 
unauthorized access to its systems. In addition, Interior has 
not managed the configuration of network devices to prevent 
unauthorized access and ensure system integrity. We have made a 
number of recommendations that the Department has agreed and 
plans to implement.
    Mr. Chairman, this concludes my prepared statement. I would 
like to now turn it over to Frank, who will complete our 
testimony by presenting the management challenges with the oil 
and gas program.
    Mr. Simpson. Mr. Rusco.
    Mr. Rusco. Thank you. Mr. Chairman and members of the 
subcommittee, I am pleased to be here today to speak about the 
Department of the Interior's management of oil and gas produced 
on public lands and waters. The Department of the Interior 
manages the leasing of federal lands and waters for oil and gas 
exploration, development and production. These activities 
provide an important domestic source of energy for the United 
States, create jobs in the oil and gas industry and raise 
revenues that are shared between federal, state and tribal 
entities.
    Revenue generated from oil and gas produced from leased 
federal lands and waters is one of the largest non-tax sources 
of federal government revenue, accounting for about $9 billion 
in royalties alone in 2009. The deadly explosion onboard the 
Deepwater Horizon and oil spill in the Gulf of Mexico in April 
2010 emphasized the importance of federal management of 
permitting and inspection processes to ensure operational and 
environmental safety. The National Commission on the BP 
Deepwater Horizon oil spill and offshore drilling reported in 
January 2011 that this disaster was the product of several 
individual missteps and oversights by BP, Halliburton and 
Transocean which government regulators lacked the authority, 
the necessary resources and the technical expertise to prevent.
    In recent years, GAO has undertaken numerous evaluations of 
many aspects of Interior's management of federal oil and gas 
and have found many material weaknesses that have hampered the 
agency's ability to strike the right balance between 
encouraging domestic oil and gas production on one hand and on 
the other maintaining operational and environmental safety and 
providing reasonable assurance that the public is getting the 
revenues to which it is entitled. In particular, three areas of 
concern caused the GAO to place Interior's management of 
federal oil and gas on the high-risk list in 2011.
    First, Interior has been unable to complete production 
inspections, maintain reliable royalty and production data and 
provide reasonable assurance that the public is receiving its 
fair share of oil and gas revenues. For example, in 2010, we 
reported that Interior had not consistently met its statutory 
or agency goals for verifying that oil and gas producers 
accurately report the volumes of oil and gas produced on 
federal leases, either onshore or offshore. Also, in 2009 we 
reported that Interior lacked consistent and reliable data on 
the production and sale of oil and gas from federal lands and 
therefore cannot provide reasonable assurance that it was 
appropriately assessing and collecting royalties. In 2008, we 
reported that Interior collected lower levels of revenues for 
oil and gas production than all but 11 of 104 oil and gas 
resource owners including many countries and some states whose 
revenue collection systems were evaluated in a comprehensive 
industry study.
    Secondly, Interior has had longstanding challenges in 
hiring, training and retaining staff in key skilled positions. 
For example, in 2010 we reported that BLM and MMS experienced 
high turnover rates in key oil and gas inspection and 
engineering positions. In addition to hampering production 
verification efforts, these human capital challenges have 
resulted in delays in issuing leases and caused Interior to be 
unable to meet its statutory and agency goals for performing 
safety and environmental inspections of oil and gas on federal 
leases.
    Finally, in May 2010, the Secretary of the Interior 
announced plans to reorganize the offshore oil and gas 
management and revenue collections function of the Department 
into three bureaus. Under this reorganization, offshore 
leasing, planning and permitting will be done in the newly 
created Bureau of Ocean Energy Management, offshore inspections 
and enforcement by the Bureau of Safety and Environmental 
Enforcement, and revenue collection both onshore and offshore 
by the newly created Office of Natural Resources Revenue. While 
Interior's reorganization may eventually lead to more effective 
and efficient operations, our past work has shown that 
organizational transformations are not simple endeavors and 
they require the concerted and sustained efforts of management 
and staff alike. Interior's reorganization will be made more 
challenging because it being undertaken at a time when the 
agency is working to implement dozens of recommendations made 
by GAO, Interior's Inspector General and other entities.
    In addition, this reorganization will require increased 
levels of resources, and this will be very difficult to achieve 
in this time of tight budgets. Further, Interior's 
reorganization of offshore oil and gas management and revenue 
collection do not address significant challenges we have 
identified with its management of onshore oil and gas 
resources.
    It is essential that Interior gets this organization right 
as well as respond to all the material weaknesses GAO and 
others have identified. The agency must be able to provide 
Congress and the public with reasonable assurance that billions 
of dollars of revenue owed the public are being properly 
assessed and collected and that oversight of oil and gas 
exploration and production on federal lands and waters 
maintains an appropriate balance between efficiency and 
timeliness on one hand and protection of the environment and 
operational safety on the other.
    This ends my oral statement. I will be happy to respond to 
any questions you may have. Thank you.
    [The statement of Anu K. Mittal and Frank Rusco follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Simpson. Ms. Kendall.

                       Testimony of Mary Kendall

    Ms. Kendall. Mr. Chairman and members of the committee, 
thank you for the opportunity to appear this morning. Let me 
summarize the most serious challenges we believe are facing the 
Department of the Interior today.

                   OUTER CONTINENTAL SHELF OVERSIGHT

    Outer Continental Shelf energy oversight. As the offshore 
oil and gas industry has reached farther offshore and deeper 
undersea, the Department's oversight of the industry has become 
more complex and challenging. The Department is making 
significant efforts to address this challenge but it is now 
challenged to comply with the recent judicial mandate to resume 
issuing deepwater drilling permits.

                          REVENUE COLLECTIONS

    Revenue collections. The Department collects billions of 
dollars in royalties annually. Our work, like that of GAO, has 
revealed many weaknesses in the oversight, collection and 
management of royalties. The OIG has listed revenue collections 
as a top management challenge for over 10 years.

                          FINANCIAL MANAGEMENT

    Financial management. The Department manages tens of 
billions of dollars in appropriations, revenues and funds held 
in trust. The Financial and Business Management System was to 
be the answer to DOI managing its funds effectively. 
Unfortunately, implementation of FBMS continues to be a 
significant challenge for the Department. Successful 
implementation of FBMS is extremely important to the Department 
because the system impacts virtually all aspects of DOI 
operations. FBMS is replacing obsolete legacy financial systems 
and will also interface or replace a number of other systems. 
The Department has already spent over $300 million deploying 
FBMS. Although FBMS has been deployed at four bureaus, the most 
difficult deployments are still ahead.

                         INFORMATION TECHNOLOGY

    Information technology. The Department's budget for IT is 
nearly $1 billion annually. Historically, the Department had a 
decentralized IT program which led to serious governance 
problems. The Department is now addressing this challenge by 
bringing all its IT functions under a single Department CIO, 
and we hope to see some significant changes.

                     HEALTH, SAFETY AND MAINTENANCE

    Health, safety and maintenance. Like GAO, we identified 
this as a significant challenge to the Department. The 
department is responsible for serving millions of visitors and 
maintaining and protecting thousands of facilities and millions 
of acres of property. Our work has documented decades of 
deferred maintenance, health and safety issues that place the 
Department's employees and the public at risk.

                       INDIANS AND INSULAR AREAS

    Responsibility to Indians and insular areas. Responsibility 
to American Indians has consistently been a top management 
challenge for the Department. The myriad problems we have 
uncovered for years portrayed programs that are sorely 
understaffed and poorly managed. The Department manages its 
responsibilities to the insular areas through the Office of 
Insular Affairs. Our reviews have consistently pointed to 
problems that might have been mitigated had the Office of 
Insular Affairs provided better oversight or taken a more 
active role in assisting insular area governments.

                          FINANCIAL ASSISTANCE

    Financial assistance awards. The Department awards billions 
of dollars in financial assistance annually yet it does not 
have a consistent method for recording and reporting these 
transactions. The Department simply does not provide the level 
of oversight of financial assistance awards that it should.

                          RESOURCE PROTECTION

    Resource protection and restoration. The Department's 
resource managers face the perennial challenge of balancing 
competing interests for the use and protection of the Nation's 
natural resources.

                         ACQUISITION MANAGEMENT

    Acquisition management. The Department faced and for the 
most part overcame a significant challenge to properly award 
and oversee the expenditure of nearly $3 billion in Recovery 
Act funds as well as other appropriated funds. The acquisition 
workforce is still challenged to effectively monitor all 
awarded funds and to take aggressive action against those who 
fail to manage awarded funds responsibly such as termination of 
contracts or suspension and debarment. The Department has made 
significant progress in building a strong suspension and 
debarment program to protect against recipients with a 
demonstrated lack of responsibility.
    Thank you, Mr. Chairman, for the opportunity to share this 
information with you today. I respectfully request that my 
written statement be entered into the record, and I will be 
happy to answer any questions.
    [The statement of Mary L. Kendall follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                        PAST GAO RECOMMENDATIONS

    Mr. Simpson. Thank you, and all of your full written 
statements will be entered into the record.
    Let me ask first, since everything I am sure that is said 
in this room will pretty much stay in this room--yes, just 
between us--many of the recommendations that you make or the 
problem areas that you point out have been found in reports 
before. As you said, this was an update of your 2009 testimony, 
whether it is wildland fires, which has been an issue for quite 
some time, or the backlog deferred maintenance, those types of 
things, they continue to repeat in report after report after 
report. How do you feel the Department takes your 
recommendations and implements those recommendations when they 
agree or works with you to try to find solutions when they 
might disagree with what your recommendations are? Do you need 
cooperation within the Department?
    Mr. Rusco. Well, I guess I can start by saying some 
positive things about the Department. In recent years, we have 
seen kind of a sea change in how our reports on oil and gas 
have been received and in the ability and willingness of the 
agency to undertake our recommendations, and we have issued 
dozens of them in the last three years alone but we went from a 
period about five years ago where the agency sort of 
automatically disagreed with everything we said and whether or 
not they were going to do anything about it. The communication 
lines were not very good between us. Now I feel like I can call 
people there and ask what is going on with this recommendation 
and I get a good answer, and we are rapidly closing a number of 
recommendations that we have made over the last few years. We 
feel they are making great progress. That said, we have 
concerns that are ongoing, and a lot of those concerns are just 
that they have such a large job to do and they have to manage 
their day-to-day activities and they are undergoing this 
reorganization which is going to take a lot more of their 
resources.
    Ms. Mittal. I would just like to add, we actually have a 
very active recommendation follow-up process and for three or 
four years after we make a recommendation, we continue to 
follow up with the agency because our experience has been that 
an agency will implement recommendations usually within the 
three- or four-year period. After you get beyond three or four 
years, there is less likelihood that they are going to actually 
implement the recommendations. Our overall success rate with 
agencies across government is between 75 and 80 percent of 
recommendations implemented. We do not think Interior is very 
different from our experience with other agencies. However, we 
are sitting here today because there are a lot of 
recommendations that either they have not implemented or they 
have not fully implemented as we recommended.
    Mr. Simpson. Do you find that there is more active 
willingness on the part of the agency to look at some of these 
recommendations and implement them if the committee is looking 
at them also and asking you to come and testify?
    Ms. Mittal. I would say absolutely. The wildland fire issue 
is a perfect example. For 10 years, over a decade, we kept 
insisting that the Interior and the Forest Service needed to 
come up with a cohesive strategy and they would not make a move 
in that direction, and until Congress passed the FLAME Act of 
2009 and required them to actually implement our 
recommendations, they did not start moving in that direction, 
so yes, absolutely.

                          OIL AND GAS REVENUES

    Mr. Simpson. Let me ask one other thing. You all mentioned 
the oil and gas program and the problems that have existed in 
the past, and I find it almost stunning that we cannot 
determine whether we are getting accurate amounts of revenue 
due to the federal government from the amount of oil and gas 
produced on public lands. Just out of curiosity, the bonding 
requirement, you talked about the hard-rock mining and oil and 
gas, are those statutory requirements? In other words, do they 
have to change legislatively or is that something that can be 
adjusted by the Department?
    Ms. Mittal. The bonding requirements can be adjusted by the 
Department. That is why we recommended that they change the 
minimum bond amounts.
    Mr. Simpson. Yes, you said they had not been updated in 
like 50 years or something like that.
    Ms. Mittal. Yes.
    Mr. Simpson. But that can be done without legislative 
approval? Okay. Do you feel that the reorganization of the 
MMS--I keep calling it that because I know what it is--do you 
feel that is going to adequately address these issues that have 
come up with the oil and gas program?
    Mr. Rusco. Well, we hope so but here are some specific 
concerns. The first is that the reorganization does not address 
the onshore management of oil and gas, and we have found many, 
many issues there. Secondly, among the largest issues that this 
program faces are human capital challenges. They have trouble 
keeping people in these positions.
    Mr. Simpson. Do you know why that is?
    Mr. Rusco. One of the key reasons is that they are 
competing with industry for skilled positions, so when the 
industry is in a slump, which has not happened for quite a 
while now but they were able to hire a lot of people in the 
1990s that had the kind of skills they need, petroleum 
engineers and technicians. And then when the oil industry picks 
up and those skills are highly valued, they lose a lot of them 
to industry. So they have trouble. They will hire someone who 
has got a low level of training in the industry. They will 
train them and then they will get hired away by industry. That 
is kind of a systemic problem and it is a hard one to deal 
with, and you could throw a lot of money at it but I do not 
know that we can compete with industry there. And so I think 
that is a problem that may persist.
    There is another issue, though, that they can deal with, 
and that is better coordinating and better using the resources 
that they do have, and we have found that there is almost no 
communication, no systematic communication between, say, the 
BLM and the former MMS in terms of utilizing the expertise they 
have in petroleum engineering and keeping up with industry in 
terms of technology, updating their orders for what kinds of 
technology can and should be used in oil and gas wells, and 
they can make more efficient use of the resources they do have.
    Mr. Simpson. One last question before I turn it over to Ms. 
McCollum. You mentioned climate change as one of the challenges 
facing the Department, and it has been kind of pet peeve of 
mine, not really a pet peeve but an issue of concern, I should 
say, in that we seem to be spending an awful lot of money on 
climate change and I am not sure any of it is coordinated. It 
is like in every agency in the federal government, the new key 
words if you want to get funding for something is climate 
change, and in fact, a lot of the science that was previously 
done by different agencies has been now labeled climate change 
money because it is obviously a concern to more people and 
easier to get funding for it. Have you done any looking at the 
coordination of all the money that is spent government-wide and 
just within the Department on climate change and what the goal 
is, whether it is just a means of--you know, I always used the 
example after 9/11 that everybody came in my office added the 
words ``homeland security'' to everything they requested. Now 
``climate change'' is the key word that is attached to 
everything. And my concern is not that we are spending money on 
climate change, it is just that I do not know that there is any 
coordination in there or what we are trying to find out with 
the money we are spending.
    Ms. Mittal. We actually have an engagement ongoing right 
now. The report is expected at the end of April, early May, and 
the report is focusing on four or five key objectives. The 
first thing is to identify all of the federal funding that is 
currently being used to fund climate change activities. It is 
also going to identify what types of activities that climate 
change funding is being used for. The report will focus on what 
strategic priorities, are being set for climate change at the 
federal level. It will look at whether the funding that is 
being spent is aligned with those strategic priorities and then 
if there are any other options to set strategic priorities for 
climate change across the federal government. So that report 
will hopefully answer a number of the questions that you just 
raised.
    Mr. Simpson. And I have talked with a variety of people 
within the Department of Interior about whether it would be 
smart to take a line item for the bill--because, I mean, we put 
climate change money into the Forest Service, BLM, the 
Smithsonian, the Park Service, USGS, you name it, they all have 
climate change money in there--if it would be smart to have a 
climate change line item that was overseen by someone or a 
group that could then weigh the value of different proposals 
from different agencies as to what they were trying to do and 
essentially award grants, I guess for lack of a better term, to 
different agencies. If the Smithsonian has something that is 
important and the committee felt it was worthwhile to pursue 
that, they could award them a grant, or the USGS or Forest 
Service or anybody else. It just seems to me we have got to do 
a better job of how we coordinate the funding. Otherwise we are 
going to waste an awful lot of money. Thank you.
    Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chair. We are really tracking 
here on the same things so I am just going to do a little bit 
of a follow-up on the two areas that the Chair was referring 
to.
    In the 10 years I have been here, I have listened to a lot 
of frustration about how the agency was not doing what it 
needed to do, but then when I started digging deeper and got on 
the Appropriations, it was like well, you can only take so much 
out of a hide so a lot of it was not having all the tools in 
the toolbox, whether it be reorganization, whether it be 
looking at ways in which they could share information or work 
together within the agency or sometimes it was just lack of 
funds. I am going to do two questions.
    One of them is to follow up a little more. Some of it is 
going to be the will, and I think you mentioned that, and some 
of it is going to be the means, either organizing the means to 
be used more effectively or actually having the dollars needed 
to do it. Could you talk a little more about what needs to 
happen with information systems, computer systems or just 
recovery systems to find out what is going on? I am not an 
engineer. My brother is the engineer at home in Minnesota, not 
me. But what do we need to either track fiduciarily or to track 
information, retention and recruitment of personnel? I think 
maybe you have touched on that but if there anything more you 
want to add.
    I want to ask about climate change but I want to discuss it 
a little more specifically. I agree with the Chair that we need 
to--acknowledge, dollars are tight, dollars are precious and we 
need to get the biggest bang for our buck so maybe we should 
look at a reconstitution of how we account for climate change. 
But I am concerned about some of the debate that we had on the 
Floor and that is why I want to know about the wills and the 
means. There was $58 million in cuts to programs that the 
Interior had going to climate change research, and I am excited 
about seeing this report in April. But I just want to use 
forestry, for example. We are seeing an increase in pests. Part 
of it is just the mobility that the pests have, as we have 
become a denser and denser population with trades and goods. 
Part of it is climate change, and then the concern with not 
having the right amount of funds available to do prescriptive 
burns when appropriate, the contribution it makes to pests, and 
other wildfires getting out of control and the rest.
    Could you maybe talk about forestry, which is important for 
recreation, important for industry, livelihoods and jobs, and 
climate change and any gleans of information you might have 
from the April report on that. And then the will and the means.
    Mr. Rusco. Well, with regard to information systems, some 
of that we will have to answer for the record. Our IT group 
does most of the work that----
    Ms. McCollum. If you could get that to the chairman, that 
would be fine.
    Mr. Rusco. But with respect to oil and gas information 
management, what we found is that across the Bureau of Land 
Management, the former MMS, both in terms of revenue collection 
and in managing permitting and planning of leasing, we found a 
wide assortment of legacy information systems that do not 
communicate well. We found----
    Ms. McCollum. Excuse me. Is legacy a nice way of saying 
old, antiquated and they do not do the job?
    Mr. Rusco. I am not going to disagree with that. We found 
that sometimes when we were going to ask questions about how do 
you provide reasonable assurance you are collecting the right 
amount of royalties and where can we find the data to check 
this, we found that people are using spreadsheets, individual 
spreadsheets to do individual tasks that these things are not 
recorded in a systematic way. Now, they have been working to 
fix this but it still remains that there are information 
systems that do not talk across groups and there are still 
people working on paper and Excel spreadsheets when they should 
be working on integrated systems.
    One more thing is that industry long ago switched to 
essentially real-time monitoring of oil and gas production so 
they have second-by-second data that is recorded on computer 
databases remotely from wells, and they monitor this in order 
to efficiently manage the well so if anything is going wrong, 
they see it and a red flag goes up and they send the technician 
out there and they fix it, and that is great. It is efficient. 
It cuts down on waste and issues like that.
    Mr. Moran. If the gentlelady would yield, do they share 
that information with us?
    Mr. Rusco. There is a pilot program in the natural gas area 
to do so.
    Mr. Moran. The answer is no?
    Mr. Rusco. It is not uniformly done, no, but these data 
systems are essentially available off the shelf. There is even 
a free version that has much more functionality. It talks to 
all of the different systems that are in the industry, could 
collect these data, could set up immediate flags if there are 
problems at the well so that inspectors could more efficiently 
decide where to spend their resources. Instead, they are not 
using the information that industry has. That would be a great 
innovation and it would not cost a lot of money.
    Ms. Mittal. I can add to the data issue for the rest of 
Interior. It is a perpetual problem and it is a systemic 
problem. No matter what program we are looking at, no matter 
what agency we are looking at, lack of data, inaccurate, not 
comprehensive data, not reliable data is a standard problem in 
just about every GAO audit, whether we are looking at the 
Office of Insular Affairs, whether we are looking at BLM, 
whether we are looking at any agency within the Department. 
Poor data is a systemic problem throughout the Department.
    In terms of your question with regard to climate change, in 
2007 we specifically had noted that climate change was not a 
high priority for the bureaus within the Department. However, 
in 2009 the Secretary issued an order that basically said that 
all of the bureaus and offices are to consider the impacts of 
climate change as they develop their strategic plans, as they 
determine how they are going to spend money on R&D programs, 
when they develop their multi-year resource management plans 
and when they determine how they are going to allocate 
resources. We have not actually gone back into the Department 
to see how they implemented that secretarial order so I cannot 
tell you how they are actually going about making that a 
priority but that was something that they were supposed to do 
starting in 2009.

                         INFORMATION TECHNOLOGY

    Ms. Kendall. If I could just add on the IT systems, the 
sharing of information and then on the retention and hiring, 
the Department has undertaken a new initiative to bring all IT 
systems under a single chief information officer. Historically, 
one of the issues that we always found was that allowing the 
bureaus to operate their own systems has been a real problem 
for anyone to really manage the IT systems at the Department. 
This is a huge step. It is being met with a fair amount of 
resistance but the IG office has actually offered itself up to 
be one of the early adopters, which might set an example for 
some of the bureaus who are putting up a great deal of 
resistance.

                          INFORMATION SHARING

    To Congressman Moran's question about information sharing, 
the work that we did following the Deepwater Horizon disaster 
last summer suggested that there are enormous opportunities for 
sharing information that industry already has that would allow 
the new ONRR, the royalty group, to much better monitor what is 
really happening in terms of production. Historically, the 
Department has--I do not know how far back this goes but in 
recent years, I would say, maybe the past 10 years or so, the 
Department has treated the oil and gas industry sort of with 
kid gloves, not wanting to put too much burden, which I find a 
word like ``burden'' to industry that brings in the kind of 
revenue as the oil and gas industry does to be a little ironic, 
but we have found several areas where the Department did not 
want to burden the industry, and I think that there are many 
opportunities to shift the burden back to industry, and it 
would be essentially a no cost to the federal government 
solution. Our work last summer suggested that there really is 
this opportunity to make that shift.

                       RECRUITMENT AND RETENTION

    In terms of recruitment and retention, one of the other 
things that we looked at last summer was this very issue that 
Mr. Rusco identified. We recommended some fairly simple 
solutions that might help. It will not solve it completely but 
one thing that we found was that then-MMS had determined that 
engineers and petroleum specialists were not eligible for 
student loan repayment benefits through the federal government. 
We have asked them to relook at that. I know that the BOEM is 
now doing some active recruiting at some of the universities 
and colleges that focus on petroleum engineering. I think that 
is a great first step.
    The other opportunity, now, both are not budget neutral but 
petroleum engineers often operate in an environment that would 
otherwise warrant hazard pay. It is another thing that the 
former MMS had determined they were not eligible for and we 
suggested that they reconsider that. There would be some 
financial incentives that the government could provide that it 
has not been doing that might balance some of the disparity 
between industry and the government.
    Mr. Simpson. Thank you.
    Mr. Lewis.
    Mr. Lewis. Thank you very much, Mr. Chairman. A very 
intriguing discussion, and as has been suggested, all of us 
seem to be kind of in a different way asking the same 
questions.

                      COMMUNICATIONS COORDINATION

    At one time I had a chance to spend a lot of time with the 
Department of Defense when I chaired their Subcommittee of 
Appropriations, and one of the challenges was the fact that we 
found that the Navy and the Marine Corps had great difficulty 
communicating with one another. It seems they could not get 
their software to interplay and the stovepipes were more than 
stovepipes. We spent lots of money, lots of time and eventually 
began to break that process down. Clearly, the climate change 
challenges in the Joshua Tree National Park and in our national 
forests in California in my district, those overlap a lot and 
there is a great deal of similarity. I have been worried maybe 
we are wasting a lot of money by not having effective 
coordination, etc. Taking us back to Ms. McCollum's point is 
that we do have a need to implement processes whereby these 
communications by individual agencies are shared by other 
agencies. Ms. Kendall, you mentioned a new thought or idea that 
would suggest that we can coordinate this in a single spot. I 
gather the agency might be considering a clearinghouse whereby 
they will have a gathering of information, provide access, 
provide some of the security you mentioned, Ms. Mittal, but is 
that actually going forward? Is it likely to be something that 
the Department will do?
    Ms. Kendall. The Department is challenged to work across 
its bureau lines, but it is something that because we have 
tried to become financially neutral in our recommendations that 
we recommend often that bureaus combine resources and 
communicate better with one another and identify where they are 
overlapping their efforts. I think there is a huge opportunity 
in many realms including climate change but others as well 
where the bureau could streamline, coordinate and focus its 
resources much better.
    Mr. Lewis. Well, much of that which we have discussed so 
far is talking about the fact that there was not enough money 
for X or Y, to implement X or Y program or effort, and my 
colleague next to me said gee, you know when you get an 
apartment house, collecting rent is not a big problem. Only in 
government would we have difficulty figuring out and measuring 
what kind of money flows there actually are. And if you do have 
such a coordinated effort, information gathering, et cetera, 
let's do not kid ourselves. That does not mean that 
automatically the individual agencies are going to be willing 
to share, work with one another and indeed save the taxpayers 
and some of our funding challenges.
    In connection with that, I remember a session with the 
people from the Park Service, the Bureau of Land Management and 
from Forest Service in a discussion of the designation of the 
East Mojave, literally hundreds of thousands of acres, if not 
millions of acres, being put in a preserve. The three heads of 
the agencies in that region in a serious extended discussion 
with me essentially said look, we have got five or six pristine 
areas out in this territory that deserve and need Park Service 
protection. Their conclusion was that with such a vast area 
there is no way we would have the resources or the people to 
provide the management. So what was the answer? Throw all of 
that open desert territory into one big package and then maybe 
we can manage it better, and it does not seem to me that it is 
much better managed.

                     CROSS-DEPARTMENT COORDINATION

    Now, my question is, when we do not have these resources 
and we have a shortage of personnel, should we be looking at 
taking a new territory to be a part of the agency's 
responsibility for management or should we be selling off some 
of these assets in order to provide funding flows that will 
allow the individual agencies to be ahead of time, ahead of our 
curve, to be able to implement processes whereby effective 
public policy goes forward? We do not want to sell off any 
property, that is for sure. I know that.
    Ms. Kendall. I do not know that I have an answer to your 
question, Congressman Lewis. I think it certainly bears 
consideration. But you identify cross departments in this case, 
and I am not familiar with the particular instance you are 
discussing. But in this case, it would be a cross-department 
challenge to get the agencies to coordinate, something that we 
already suffer internally in just the Department of the 
Interior, so the challenge is even bigger.
    Mr. Lewis. Much of the rare earths deposits in the country 
are in the territory I am talking about, in the Mojave Desert, 
and there is a worldwide challenge here in connection with 
preserving these. But over the years my miners have talked 
often about the fact that OSHA and MSHA almost stumble all over 
each in order to get down in the mine first to see what 
somebody is doing wrong. I mean, that is sort of lack of 
effective coordination between agencies that cuts off our 
ability to do a better job. It is pretty fundamental. And Ms. 
Mittal, that is kind of why we wanted you to be here.
    Ms. Mittal. Thank you, sir. I think what we keep finding, 
and you know, whether you sell off lands or not, that is a 
policy decision. That is a decision that only Congress can 
make.
    Mr. Lewis. Really? You mentioned that we gave you the 
authority to raise the bond level over a 50-year period, it has 
not been raised.
    Ms. Mittal. Well, that is true. But I think there are three 
fundamental issues that we see repeatedly when we look at 
Interior's and management programs. One is the lack of 
strategic planning, and you need to know what your strategies 
are, you need to know what your goals are before you can 
achieve what it is that your mission is supposed to be doing. 
The second is, you have got to have the data. As I mentioned 
earlier, they do not have good data. They are not making 
decisions based on good data, whether it is resource allocation 
decisions or it is program activity and management decisions. 
And finally, you have got to have good performance measures. 
One of the things that we see repeatedly when we look at 
Interior's programs is a lack of good performance measures. So 
if you are not accountable for your results, if you are not 
looking at your performance and measuring it against your 
goals, measuring it against the milestones that you have 
established, you can never know exactly what point you should 
take corrective action, when you should change your mode of 
operation and change it to something different. So those are 
the three fundamental problems that we see, and I think it 
feeds right into your comment about coordination and 
cooperation. You need to have some of these three elements in 
place before you can effectively coordinate and cooperate with 
other people because you first have to know what you are doing 
as an agency.
    Mr. Simpson. Mr. Moran.

                          OIL AND GAS REVENUES

    Mr. Moran. Thank you, Mr. Chairman. Good to see you.
    It is obvious to everyone that lives on this planet, the 
United States is desperate to find any way of doing a better 
job of balancing its budget. So let me ask you some questions 
with regard to potential revenue raising.
    In your testimony, you indicate that the Interior 
Department collected lower levels of revenue for oil and gas 
production than all but 11 of 104 oil and gas resource owners 
including many of our states--Texas, Oklahoma, Louisiana, 
etc.--and any number of other countries. Can you give us a 
sense for what kind of revenue loss we are talking about here, 
if the royalty level was consistent with, say, the Gulf states, 
and what other countries charge in terms of royalties for 
taking the natural resources that belong to the taxpayers?
    Mr. Rusco. Giving a precise answer to that is beyond any of 
the work we have done. I can say a few things that give a 
flavor of that. One of the problems with our revenue collection 
system is that it does not respond to changes in industry 
conditions, changes in economic conditions, changes to oil and 
gas prices. So back in the 1990s when oil and gas prices were 
very low, companies were in dire straits and they came to 
Congress and asked for royalty relief, and that was granted. 
And due to the way that that was implemented and some 
subsequent court cases that essentially ruled that royalty 
relief was effectively permanent for the wells that were 
offered that in the deep water, that is going to cost the 
federal government somewhere between $20 billion and $50 
billion, depending on future oil and gas prices and how much is 
produced.
    The system of collecting revenues can reflect changes in 
the environment and sort of make those kinds of adjustments 
unnecessary, and so when profits go way up, you could take a 
greater share of profits or you could take a smaller share. 
That is one of the things we asked Interior to look at. They 
are looking at that at this point and they expect to finish 
sometime in 2011 with that study, doing a comprehensive 
evaluation of what others are charging. And we expect that they 
will have an estimate of what, if anything, they feel that they 
can do to increase revenue.
    Mr. Moran. So the answer is no, you do not have any 
specifics, but the Interior Department is working on it and if 
we look just at the Gulf Coast lost royalty revenue, it would 
be $20 to $50 billion but we do not know. And is the Interior 
Department determining what we could be bringing in if what we 
charged was more consistent with what other countries charge 
and the rate that other states charge?
    Mr. Rusco. That is--my understanding of the study they are 
doing is to look at just that.
    Mr. Moran. They are looking at that? Now, you also say in 
your report that the Bureau of Land Management has not met its 
statutory, its legal obligations for oil and gas verification 
inspections. I gather that it is quite likely as a result of 
both the federal government and the states, because they get 
half the royalties, maybe substantially shortchanging their 
revenue as a result of BLM not meeting its statutory 
verification responsibilities. Is that accurate?
    Mr. Rusco. It is certainly possible. Again, we do not know 
what we do not know, and if they are not making their 
inspections, we do not know what they would find if they were.
    Mr. Moran. The fact that Interior largely relies upon the 
oil and gas industry to give its own estimates of how much is 
being withdrawn and depleted, and you found that those 
estimates are invariably short of what they actually are 
drilling, that if there was better monitoring, it would be 
apparent that there is more being taken and thus more revenue 
would be coming into the federal government. One way to address 
that, I gather, is in your response to Ms. McCollum, that if we 
had more people and the right people, but most importantly the 
kind of information technology and data that the oil and gas 
companies already have on a real-time basis, that would tell us 
what they are generating. So I gather the numbers they are 
giving us are not even consistent with their own data in terms 
of what they are taking out of both offshore and onshore 
reserves. Is that accurate?
    Mr. Rusco. I will say we have not found any systematic 
underreporting. We have found instances of errors and instances 
of missing data and instances of reports that should be there 
that are not, but you are absolutely correct that the industry, 
they collect these data. They can account for up to very small 
amounts of oil and gas that they are producing and they collect 
these data. Then they put this oil and gas into pipelines or 
sell it to a seller who is also measuring it and they have 
disagreements and they are both talking about sets of data and 
they can get together and very quickly resolve those 
disagreements about how much came from each producer and went 
into a pipeline, but when they are both talking about data that 
comes from a meter and is beamed to a computer, they have 
something to talk about. Those things sometimes malfunction and 
you get different answers but the meters----
    Mr. Moran. I understand that, but are you telling us that 
that data is not then given to the owner of the property, the 
resource, the federal government? They are not sharing that 
data in terms of how much they are withdrawing, that we sit 
back and wait for when they want to give us the numbers that 
they choose to give us?
    Mr. Rusco. That is correct. We do not have third-party 
verification or direct verification of production.
    Mr. Moran. And a reasonable assumption would be then that 
it is being somewhat underreported, that there may be more 
revenue collection available to us if we simply were getting 
more accurate and fuller data? Is that a reasonable conclusion?
    Mr. Rusco. I cannot go that far. Again, we have not seen 
systematic underreporting where we have looked but, again, we 
do not know what we do not know.
    Mr. Moran. You also noted that Interior is--that concludes 
this line of questioning--but you underestimated the amount of 
natural gas produced on federal leases that is released 
directly to the atmosphere. So we have got a lost resource 
here, we have got no collection of royalties and we have got 
this intensive greenhouse gas that is polluting the atmosphere. 
Can you give us any sense of how much in the way of loss we are 
talking about in that regard?
    Mr. Rusco. In this case, it could be as much as 2 percent 
of total production on federal lands for the wells that have 
not put in modern low-bleed pneumatic valves and better 
equipment for monitoring vented natural gas, but it could be a 
very significant amount. What we do not know and what Interior 
cannot tell us is what kind of equipment is being used in each 
case, but when we did look at specific instances, we found that 
there is a lot of old equipment out there that bleeds a lot of 
natural gas in the air and those valves can be economically 
replaced with newer, low-bleed valves that would cut sometimes 
very significantly the amount of natural gas, and it could be 
as much as 2 percent.
    Mr. Moran. Could BLM require that kind of newer equipment 
so as to reduce the greenhouse gas which we then have to pay to 
clean up?
    Mr. Rusco. We have recommended that they evaluate the 
equipment that is being used in every instance and identify 
cases where it can be economically exchanged for more modern 
equipment that leaks less.

                      REVENUE SOURCES: ADDITIONAL

    Mr. Moran. Well, these are good, measured responses. I 
appreciate your caution in answering them. I trust the 
Inspector General is ensuring that the Interior management is 
aware of this additional source of revenue and pursuing it?
    Ms. Kendall. We have talked with the Department about a 
number of other sources. Going away from oil and gas for just a 
moment, one of the areas that we have an active evaluation in 
is rights-of-way. There is a huge amount of land out there that 
the Department we are finding basically almost gives away 
rights-of-way. They are utilizing a process by which the 
rights-of-way are--in one instance, and I cannot say this 
across the board but we found one instance where an Indian 
tribe negotiated a right-of-way fee 100 times what BLM is 
charging for the same type of right-of-way. So we are looking 
at some other options in terms of determining what the 
appropriate right-of-way fees ought to be but there is a 
considerable opportunity to raise much greater revenues there.
    Mr. Moran. Well, good for the Indian tribe but not so good 
for the federal government.
    Thank you, Mr. Chairman.
    Mr. Simpson. Thank you. And just to follow up on that, I 
have heard the same thing, that what the BLM charges to put 
wind turbines on BLM ground is significantly lower than what it 
would cost on private land, and consequently the federal 
government is losing a ton of revenue that they could be 
collecting for renewable energy sorts of things.
    Mr. Calvert.
    Mr. Calvert. Maybe we should contract out with Native 
Americans to collect revenue.
    Mr. Simpson. There you go.
    Mr. Calvert. You know, this is going to be kind of a 
bipartisan moment here, I think.
    I come out of the business community. When you mentioned 
$20 to $50 billion worth of revenue left on the table, that 
gets my attention. And if I was going to enter into a private 
lease agreement with a resource company to extract minerals 
from property, I would have a lease that would state that I 
would have access to all records and have a transparent process 
so I would be able to collect revenue that is due. Is it in 
your lease agreement that production records are shared with 
the lessor and any records must be provided to the lessor? Is 
that not required in a lease agreement?
    Mr. Rusco. It is required. These data are collected from 
the operators, which are not always the lease owners, but there 
is an operator that operates a number of wells.
    Mr. Calvert. But in the final analysis, that information is 
required to be provided to the lessor in order for them to come 
up with a proper lease amount. Is that correct?
    Mr. Rusco. That is correct, and the issues we have are not 
that those data are not required to be provided but that when 
we have looked at those data, we have found missing data, 
erroneous data and other problems because it is self-reported 
and it is not checked with a third party.
    Mr. Calvert. This is not rocket science. I mean, if we need 
some rocket scientists, there are a lot being laid off in 
Houston right now, I am sure we could pick up a couple. The 
percentages on these various leases, I guess they change or 
fluctuate from one lease to the next or do they pretty much 
stay the same?
    Mr. Rusco. Onshore, most of it is 12\1/2\.
    Mr. Calvert. At what point in the process is that 
collected? Is it collected at the point of sale? Is that 12\1/
2\ percent based upon market price that day and so fluctuating 
through the lease process so you have to mark the royalty that 
is due per that day? Is that not correct?
    Mr. Rusco. Typically it is done on a month-by-month basis.
    Mr. Calvert. So they have an average, a 30-day average of 
the mineral value or the oil or gas or whatever you are 
extracting, a 30-day running average, and then that royalty 
then is charged. At what point is it due to the federal 
government? What point does the lessor receive its rent?
    Mr. Rusco. It is due, I believe, within 30 days.
    Mr. Calvert. So the government then in effect bills the 
lessee and the lessee comes up with the money within 30 days 
from the point of billing. Is that correct?
    Mr. Rusco. I believe that is correct.
    Mr. Calvert. And they cannot do that?
    Mr. Rusco. Not accurately.
    Mr. Calvert. Have the agencies looked into contracting that 
out for a small fee to a contractor that would have the 
competence to collect rents or collect royalties? It would seem 
to me if you are leaving $20 to $50 billion on the table there 
ought to be a better way. I know there was royalty relief in 
the 1990s when the oil prices went down but that should have 
been credited on the books and then collected later on once 
that resource recovered. The intent was not to forgive that 
amount of royalty. Is that not the case?
    Mr. Rusco. Now I have to be very measured. I am sorry. In 
the end, this went through litigation and the courts determined 
that the legislation required that royalty relief.
    Mr. Calvert. Was that legislation or was that 
administrative relief? That was done in the 1990s. Was that not 
done by administrative relief at that point?
    Mr. Rusco. There was the Deep Water Royalty Relief Act of 
1995 that implemented the royalty relief but then Interior 
implemented the legislation.
    Mr. Calvert. They implemented it incorrectly. At the time 
the Deep Water Royalty Relief Act went into effect in 1995, was 
it not true that the cost, the capital cost of installing the 
drilling equipment in the Gulf was substantial? Congress was 
trying to find a way to create an incentive for people to go 
into the Gulf and to drill in deep water because at that time 
they were not getting the bid prices up for the tracts within 
the Gulf? Is that not correct? And so they created this 
incentive where the capital cost would be booked for whatever 
royalty amount that was until that capital cost was received 
and then the royalty would be received thereafter. The lease 
agreement, as I understand it, was written where they just gave 
them permanent relief. Is that not correct?
    Mr. Rusco. For two of the five years that there was royalty 
relief, for reasons that we do not understand fully, there was 
no price trigger put on that so that when prices went up, they 
would collect.

                         LEASE PRICE THRESHOLDS

    Mr. Calvert. Why did somebody not go back and find out who 
the idiot was that wrote those leases? Again, this is not 
rocket science. I mean, if any one of us at this table had a 
resource that we were going to lease out and we understood the 
basis of that lease agreement, we understood that the capital 
cost was going to be credited and at that point forward a 
royalty was going to be paid, why in God's name was the lease 
written that gave them permanent relief? I mean, I just do not 
understand it.
    Ms. Kendall. We did conduct an investigation into the 
failure to put a trigger into the 1998 and 1999 leases, and we 
could not find, as you put it, the idiot, but we found a real 
bureaucratic bungling is what I think Mr. Deveney defined it 
where one group of MMS thought another group was responsible.
    Mr. Calvert. You know, we are talking about real money 
here.
    Ms. Kendall. Oh, I know.
    Mr. Calvert. When we get into $20, $50 billion here, you 
know, we have been fighting and we are going to continue to 
fight all year to save a similar amount, $50 billion, and we 
left $50 billion out there in the ether. I find this amazing. 
What is even more amazing is it continues to go on, based upon 
your testimony, because of the inability of certain folks to 
collect revenue from royalties that we should be collecting.
    So it is distressing to me, Mr. Chairman. There are a lot 
of out-of-work engineers out there at NASA. Maybe we ought to 
send them on over and maybe they can straighten this out, or we 
could get some good accountants. I will even volunteer. Thank 
you, Mr. Chairman.
    Mr. Simpson. Mr. Hinchey.
    Mr. Hinchey. Thank you very much, Mr. Chairman. I should 
point out that we have had an amendment that would make the 
corrections that we just talked about as being necessary, and I 
hope that it can be dealt with positively. In any case, Mr. 
Chairman, thanks very much, and thank you very much. Thanks for 
what you have said and everything that you are doing.
    I want to follow up with something that Mr. Moran was 
talking about. As we know, for years now the GAO has been 
examining the Department of Interior's royalty collection 
program. We are dealing with a situation here where two weeks 
ago this House passed a Continuing Resolution with draconian 
cuts to some of our country's most vital investments and 
services, cuts that would according to the most economic 
analysis by Mark Zandy of Moody's lead to the loss of nearly 
700,000 jobs. So we paid almost no attention to the 
opportunities that are present in undercollected royalties of 
our existing oil and gas operations on public lands. You 
pointed out in your testimony that the Interior Department 
collected lower levels of revenues for oil and gas production 
and that lower level was connected from 93 out of 104 oil and 
gas resource owners that you examined. You examined 104. 
Ninety-three were producing less. Only 11 were not. You also 
made specific recommendations on what the Department should be 
doing to improve royalty collections ranging from comprehensive 
review to better measurements to accounting for the amount of 
natural gas that is being vented or burned.
    So let me just ask you two little questions. How much 
revenue does GAO estimate we are losing by not implementing the 
suggestions that you have identified to improve and increase 
the royalty collection? And secondly, how much effort and 
resources would be required to make these changes?
    Mr. Rusco. I will try to answer the most satisfying one 
first. The effort, if Interior decides or determines that in 
fact we are collecting less than the fair share of revenues for 
oil and gas production on federal lands----
    Mr. Hinchey. Well, you determined that already.
    Mr. Rusco. Well, we determined that it was lower than a lot 
and we recommended that the agency do a comprehensive review, 
taking into account all the things that they believe are 
important. We are quite confident that they are going to find 
that they collect lower than many states and other countries. 
If they decide that they can collect more revenue, then it is 
not a costly or difficult endeavor to do so, at least going 
forward. When you issue a different lease, you can raise 
royalties, you can change lease terms.
    Mr. Hinchey. So do you know how much revenue GAO is 
estimating that we are losing? I mean, they have communicated 
that to you so you must have some insight into it.
    Mr. Rusco. No, we do not have an estimate of how much their 
study will determine, if any, that they are----
    Mr. Hinchey. They have done the study and they have 
communicated this to you?
    Mr. Rusco. No, we looked at other studies, industry studies 
of revenue collection.
    Mr. Hinchey. How much revenue are you losing? How much 
revenue are we losing?
    Mr. Rusco. Well, we do not know but there are some 
countries that collect a huge proportion more. Now, it is very 
difficult to make comparisons across countries because, you 
know, some countries might collect a lot but they also do not 
have a rule of law or a set of contract law that we have here, 
and it is very difficult to compare. That is why we asked the 
agency to conduct its own review using the expertise of 
industry consultants and determine whether they could do this. 
There is a trade-off between charging more revenue and 
encouraging domestic oil and gas production. Where that trade-
off is, is something for the agency to determine.
    Mr. Hinchey. Well, GAO has said that to you. They have 
given you information. And you have come up with improvements 
to increase the royalty collection, right?
    Mr. Rusco. Interior increased the royalty rates in the deep 
water twice, and they estimated that that would increase 
revenue by about $5 million on----
    Mr. Hinchey. Okay, if you do not have the specific answer 
to these questions, I would very much appreciate if you would 
look into this and communicate this back to us, give us the 
specific answers to those two questions.
    Mr. Rusco. I am sorry, but with respect, without looking at 
Interior's study when it comes out, we would not have that 
information at GAO. I certainly will----
    Mr. Hinchey. Well, GAO has communicated to you. There are 
estimates that they have produced. You have got that 
information. You have looked into this. You have decided that 
there are things that had to be done to change it, to make it 
better. So I would like you to communicate to us the factual 
information that you are looking into that you have got. You 
cannot answer it now but please give it to us.
    Mr. Rusco. I will give you every bit of information we have 
on this.
    Mr. Hinchey. So you know what GAO has done because, you 
know, you are from GAO.
    Mr. Rusco. Yes.
    Mr. Hinchey. You know what GAO has produced. You know the 
recommendations that they have made, and all of that has been 
put forward. So we would just like to understand this a little 
bit more clearly and more specifically, particularly with 
regard to the numbers, the estimates, things of that nature. If 
you can provide that, and I am sure you can, we would very much 
appreciate it.
    Mr. Rusco. Yes, sir, will do.
    Mr. Hinchey. Just one other quick thing that I would like 
to talk about, and that is the danger of the drilling that we 
are experiencing. We have seen a lot of danger with regard to 
the frack drilling for natural gas in a lot of places, places 
from Texas to Pennsylvania, a number of other states across the 
country. You have looked into this, I assume, to some extent. 
You understand it, to some extent, about what is happening and 
what is going on. There was a very interesting article in the 
New York Times on Sunday. I do not know if you had an 
opportunity to see that. But this is another expansion of the 
understanding of the cost of this kind of drilling and what 
damages that drilling can provide, and in this particular case, 
again with regard to the danger to water supplies, which are 
critically important for the future of everyone's life. I would 
appreciate it if you would take an analysis of that, look into 
it and give us your understanding and recommendations as to 
what is going on. We are in the process now of following up on 
that information and providing a couple of pieces of 
legislation that we are offering to this operation here, and so 
I would appreciate anything that you could provide to us that 
would be helpful and useful. Thanks very much.
    Mr. Simpson. Mr. Flake.

                     GRANTS, COOPERATIVE AGREEMENTS

    Mr. Flake. Ms. Kendall, these financial assistance awards, 
$3 to $4 billion a year that are given out, can you give us 
some examples of what they might include?
    Ms. Kendall. The easiest example, it would be the financial 
assistance to Indian tribes and insular areas, but there are 
financial assistance agreements which are basically grants and 
cooperative agreements that go to any number of entities. Some 
are sort of partner entities to the Department. The cooperative 
agreements usually go to the partner entities. I can think of a 
couple that come readily to mind that we actually looked at, 
one being the George Wright Society with National Park Service. 
They have a very close cooperative relationship and a 
cooperative agreement that started out as about, if I remember 
correctly, I think a $35,000 cooperative agreement escalated up 
to over $800,000 without any significant change in purview and 
very little oversight. We are going to be putting together what 
I would call a roll-up report on cooperative agreements. We 
think it is an area that is a very high risk because there is 
so very little oversight.
    Mr. Flake. You are saying there is no consistent method of 
recording these transactions?

                     FINANCIAL ASSISTANCE OVERSIGHT

    Ms. Kendall. It is another example where bureau by bureau 
they will do it differently, sometimes even region by region. 
There is not a consistent Department-wide guidance or 
requirement in terms of how financial assistance is overseen. 
For instance, and I realize I am speaking real generalities in 
terms of the financial assistance that goes to Indian tribes 
and insular areas, but using the insular areas for an example, 
funds are pushed out to the insular area government and the 
Office of Insular Affairs measures its performance on getting 
the money out, not necessarily on how that money is spent and 
whether it is spent wisely and well and it is accounted for. 
Although we have not made this recommendation, one of my 
personal thoughts is that there may need to be a complete 
rethinking of how BIA and Insular Affairs provides money. In 
the insular areas, for example, initially I had discussion with 
staff that perhaps we should do it on a reimbursable basis 
rather than put all the money out and then say tell us what you 
have done with it, which is not working, or to have an 
incremental requirement where a certain amount goes out, they 
report back with some substantiated information in terms of how 
the money was spent.
    Mr. Flake. With regard to insular areas, how much of the 
money that would come under what you term financial assistance 
is mandated under the compact of free association, for example, 
with Palau and the Marshall Islands? How much are we required 
under those compacts to give? Is this money that we can say, 
``we did not like how you spent it, so we are going to cut it 
off''?
    Ms. Kendall. That is an issue that would have to be 
addressed. I do not know the answer to that. I realize that it 
may require some changes in the compact language. The same 
would hold true with Indian tribes, that there may need to be 
some pretty fundamental and sweeping changes in terms of how 
those agreements are reached.
    Mr. Flake. Do you sense that the agency is moving ahead to 
address or remedy this?
    Ms. Kendall. We have really just started to engage in 
discussions with OIA on this.
    Mr. Flake. How can we speed that process along?
    Ms. Kendall. I will let you know.
    Mr. Moran. If the gentleman would yield, I am told that the 
GAO has some additional information on that.
    Mr. Flake. Please.
    Ms. Mittal. Well, we have looked at the Office of Insular 
Affairs grant to insular areas. They make about $70 million 
worth of grants every year, and what we have found is that 
about 40 percent of the grants that they make have at least one 
internal control weakness and that those kinds of internal 
control weaknesses are what lead to fraud, waste, abuse and 
mismanagement, and so we have identified a number of issues 
that we think the Office of Insular Affairs needs to address, 
and one of them is providing much more proactive monitoring and 
oversight of the grants.
    Mr. Flake. What I am asking is: if this is part of the 
compact that we have agreed to then how much leverage do we 
have over how they spend the money?
    Ms. Mittal. The grants that we are talking about are not 
part of----
    Mr. Flake. This is all discretionary? It is not part of the 
compact?
    Ms. Mittal. Right.
    Mr. Flake. All right. That is what I was asking. Thank you.
    Mr. Simpson. Mr. Cole.
    Mr. Cole. Thanks very much. Thanks, Mr. Chairman. A quick 
point and then I want to go to my line of questioning. But just 
on the oil and gas issue, when we are looking at comparable 
returns, which I think we all agree we need to do a lot better 
job than we have been doing around here, just foreign countries 
usually are not a very good way to look at it, simply because 
the costs of raising a barrel of oil in Saudi Arabia versus 
raising one anyplace in the continental United States are 
dramatically different. So one of them in a sense is more 
profitable, and there is more money available to flow back to 
the government. Whatever the private people in adjacent areas 
are getting is usually a pretty good way to look at it because 
they are looking out for their own interest, so I would just 
urge you as you delve deeper into this to look at that.

                      INDIAN FUNDS: MISMANAGEMENT

    I wanted to question you more in another area, not 
surprisingly, Indian Country. Ms. Kendall, I was reading your 
report with a great deal of interest and your testimony and 
there is a sentence that really bears repeating here. 
``Responsibility to American Indians has consistently been a 
top management challenge for the Department of Indian Country 
programs managed by the Department,'' and then you go on and 
list all the ones that are there and you go on, ``Approximately 
25 percent of OIG investigations involve Indian Country 
issues.'' That is a shocking number considering Indian Country 
does not get anywhere near 25 percent of the Interior budget. 
So clearly it is a problem area within a problem area. Could 
you and Ms. Mittal sort of comment broadly on the specific 
areas of mismanagement and concern that you have and whether or 
not--and I do not mean to make this partisan with this 
Administration or any, because I think this has been a problem 
with both parties, multiple Administrations, and I actually 
think there has been considerable progress made but I would 
like for you to give us a little bit more on the range of 
problem areas and the progress, if any, in recent years. And 
then I have got two or three specific areas to ask about.
    Ms. Kendall. The range of problem areas really runs the 
gamut. We have focused in recent years on Indian schools, 
Indian jails. Actually Indian jails have been a perennial issue 
that we have addressed repeatedly. The actual handling of funds 
that go to tribes internally, we have had any number of 
criminal investigations that the tribal members or the tribal 
council are mismanaging or taking money from their own people. 
And I know that 25 percent is shocking but we have said 
internally that we could dedicate all of our resources to 
Indian Country and still not be wondering what to do with 
ourselves.
    Ms. Mittal. Our work obviously is much more focused and has 
not been as wide-ranging as the IG's work. Our recent work has 
focused on the land and trust issues that BIA is dealing with 
and that has become a greater issue now with the Supreme Court 
decision in 2009 and so we----
    Mr. Cole. We will get to that.
    Ms. Mittal. Okay. So it has raised a lot of uncertainty in 
terms of how many of the pending land and trust applications 
are actually going to be affected by the Supreme Court 
decision. We recently looked at the Native American Graves 
Repatriation Act and the extent to which federal agencies have 
complied with the requirements of the Act, and what we 
basically found is after 20 years of enactment, the agencies 
are not in full compliance with the Act, and currently we have 
other work ongoing looking at Indian arts and crafts issues. We 
are also looking at sexual assaults and the ability of IHS to 
provide services to victims of sexual and domestic violence on 
Indian reservations.
    Mr. Cole. This committee on a bipartisan basis has made 
real progress in the last two or three years in trying to 
upgrade some of the funding in Indian Country, which has been 
very low. Have we made comparable progress on the executive 
side of the equation in addressing this problem? Again, I do 
not expect anybody to solve 100 years' worth of problems in 18 
months but how much progress are we making in terms of 
administering the dollars we have in a more efficient manner, 
in a more transparent manner, making sure we are really 
delivering help through the tribes to people that need it?
    Ms. Kendall. Based on the areas that we have been looking 
at, and I am drawing a blank right now on the one financial 
area that we have looked at recently, but I cannot say that we 
are making any considerable progress, that the problems that we 
see are repetitive and really fairly entrenched.
    Mr. Cole. Let me ask this to get to a couple specific 
issues. One, let us just start off with Carcieri, which you 
mentioned, which again this committee tried to address, and I 
think very successfully. Mr. Moran, Mr. Simpson, working 
together, we actually tried to correct the problem and we were 
probably a little unorthodox legislatively in our approach but 
we did it in a bipartisan manner to try and move through the 
House an amendment but basically legislation that would have 
ended this two-tribe distinction, because that is basically 
what we have now. We have got obviously a situation where the 
Department of the Interior is not sure what it can do for 
tribes versus whether they are in the 1934 Indian 
Reorganization Act or not, and we have got 80 years' worth of 
decision involving billions of dollars worth of property that 
we now really do not know what the status is, and the 
Administration, to its credit, has tried to address this. We 
tried to address it here. It got hung up in the Senate. How big 
a problem is this going to be going forward for the Department? 
And if you want to hazard an estimate on litigation if we do 
not get this solved and basically have a uniform standard for 
the Secretary in terms of putting land into trust?
    Ms. Mittal. We believe it could be a significant problem 
because there are at least a thousand pending applications 
right now for land in trust, new applications for land in 
trust. There are already two cases that have been filed, so it 
will be interesting to----
    Mr. Cole. Can I ask you a question on that? On that 
thousand--and I know the answer--how many of them relate to 
gaming? Because that is one of the big objections we have, this 
is all a big game, but how many of these?
    Ms. Mittal. The thousand are non-gaming.
    Mr. Cole. Yes. It is less than 2 percent of all the 
applications, which was the whole argument we heard on the 
Floor that this was a backdoor gaming thing.

                      INDIAN LANDS: FRACTIONATION

    Can I ask one other question? And you mentioned this in 
your testimony, I believe, Ms. Kendall, but the fractionation 
issue is of course a gigantic issue in Indian Country in just 
dealing with the vision of land over time under allotments. We 
tried through the Cobell decision and the Cobell legislation to 
empower tribes to begin to deal with that themselves. We have 
given them a considerable pot of money that they can go out and 
purchase fractionated land from individuals, recombine it and 
use it. I know the Department has been working on this as well. 
What kind of progress are we making on the fractionation issue 
and do you have any specific administrative things that we 
ought to be doing to push it forward?
    Ms. Kendall. We did issue a report not too long ago about 
land fractionation. What we were trying to do was get in front 
of the effort that will be undertaken by the Department as a 
result of Cobell. The Department has been hampered by some 
requirements, primarily by the Cobell court, where they are 
prohibited from discussing openly what their efforts are but we 
have been working with them. Our report identified a number of 
some fairly practical things in terms of just communicating 
among the various entities that will be involved in resolving 
the land fractionation. There are three or four entities within 
Interior that are going to need to work and coordinate 
together. We made some recommendations about that coordination, 
the level of communication, some elimination of duplication of 
effort.
    Mr. Cole. I would really appreciate it going forward if you 
can keep us regularly informed, particularly on the Cobell 
aspect. This has potential to make progress but it is also an 
enormously daunting challenge administratively for the 
Department. So if there are things we can do or ought to know I 
would hate to miss a great opportunity here to actually deal 
with the fractionation issue in the context of a court 
settlement where everybody has agreed because we 
administratively fumble the ball, and again, I do not think 
that critically of anybody. This is a big challenge to deal 
with but it is a great opportunity as well.
    Ms. Kendall. I absolutely agree, and we have committed to 
work cooperatively with the Department and collaboratively to 
try to help them looking forward as opposed to what we 
oftentimes tend to do, which is sit back and wait until they do 
fumble. So we are actively involved in that right now. Our next 
effort is to look at the Office of Hearings and Appeals process 
for probate land but we have got a lot of maybe half a dozen 
areas that need to be addressed and we are working with the 
Department in that area but we will be glad to keep you 
apprised.
    Mr. Cole. Please do. Thank you.
    Thank you, Mr. Chairman.

                     INDIAN TRUST RESPONSIBILITIES

    Mr. Simpson. Before I call on Mrs. Lummis, let me follow up 
on what Tom was saying. I think this committee in a bipartisan 
way has felt like we have an obligation to meet our trust 
responsibilities to American Indians and that we also have to 
do it in an efficient way and help improve the operations of 
the BIA, and here is one of the things I have heard in talking 
with people at the BIA: if you look at this current Assistant 
Secretary now, he has been there two years and he is probably 
one of the longer-serving ones. Is it a problem that--and as I 
have talked to Mr. Echo Hawk--he is a good friend of mine, we 
have known each other for years from Idaho--this is a huge 
agency that has a lot of responsibility that is very, very 
complicated when you start looking at it. He has told me it is 
two years now and he is really feeling like he is just kind of 
getting his arms around what the problem is, and you have got 
to know what the problem is before you can solve it or propose 
solutions, and if this is one of the longer-serving directors 
of the BIA, is that one of the main problems we have, the same 
thing that you were mentioning with people working on the oil 
and gas industry for the government, that it is hard to get 
people who are going to stay around long enough to solve some 
of these very complicated problems?
    Ms. Kendall. I think that is fair. If I remember correctly, 
we looked at the assistant secretaries for Indian Affairs and 
the average, Mr. Echo Hawk has exceeded the average. The 
average has been 16 months. And I know that the Department 
recently put in place an acting director for the Office of 
Special Trustee but had real difficulty finding someone to take 
that position. So it is a perennial problem and it is a real 
challenge for the Department.
    Mr. Simpson. Thank you.
    Ms. McCollum. Mr. Chair, I am not going to ask a question 
but I think this might be something that I think several of us 
would like to understand and get more into some of these 
issues. I requested and got a breakdown of not only the Bureau 
of Indian Affairs, but money that affects Indian Country and 
other budgets, and for the first time ever in history, they 
actually put together a budget so you can kind of holistically 
see, so tribes can holistically see resources that are 
available to them. I know you are putting together your hearing 
schedule, but I would really encourage you to do this not only 
for the Bureau, a hearing on that, but also have that budget 
document so we can kind of look at it wholly because I will 
tell you, the schools are a mess, and so are the health 
clinics.
    Mr. Simpson. Thank you.
    Mrs. Lummis.
    Mrs. Lummis. To that last point, in Wyoming there are two 
agencies in state government where they are considered so 
important that the appointees transcend the terms of the 
governor: the state engineer, which is water, and the 
Department of Audit, which we want to make sure is nonpartisan. 
And so those run for six years, and that person knows that for 
six years they are appointed regardless of whether it is a 
Democrat or Republican governor, and that may be something that 
the federal government should consider with the BIA, an 
appointment by the President that is confirmed by the Senate 
but then it extends beyond that President's tenure.

                 ONSHORE REVENUE COLLECTION: CHALLENGES

    And I want now to change to the subject of onshore oil and 
gas drilling because that is another area where my state of 
Wyoming has a considerable amount of experience. Going back to 
Mr. Calvert's question that really got lost, I think, in the 
stream of consciousness, he asked if there has been the notion 
of contracting out to a private party. I would suggest that it 
also should be considered to contract out to states because 
states that have a lot of oil and gas and coal production, my 
state, for example, is the number two energy-producing state in 
the United States and unlike Texas, which is number one, has an 
enormous portion of our oil and gas on public lands, both state 
and federal. The state board of land commissioners, state lands 
and investments, really has tremendous oil and gas lease terms 
in terms of benefiting the state and the ability for the state 
to monitor and audit. So I would say, as Mr. Cole said, looking 
to other countries as an example may not be the best apples-to-
apples comparison. Look to states. And I would highly recommend 
my state. I really think my state does a better job with its 
collections, with its severance and tax collections, its 
royalty collections, as well as the lease terms in our state 
oil and gas leases.
    There is a tremendous problem with onshore, and Ms. 
Kendall, I would like to pursue that with you for a minute. 
Does the federal government have the resources, both manpower 
and financial resources to manage the program? There is a 
report that indicates that over 90 percent of the leases in the 
intermountain west were protested. In my state of Wyoming, it 
is 100 percent. A hundred percent of the oil and gas leases are 
protested, and that we know that revenues collected from oil 
and gas declined between 2008 and 2009 to the tune of a quarter 
of a billion dollars. So it is affecting revenues that these 
are protested and that part of the protests come from the fact 
that under the law, the agencies cannot seem to meet the 
deadlines, so these are sort of pro forma protests. They are 
cookie cutter protests that occur over and over because the 
agency misses deadlines. Is it your opinion that the agency is 
underresourced or are they just dragging their feet?
    Ms. Kendall. I would say that they are underresourced. We 
have not done any work in regard to protests in particular but 
I was looking back at our report from last summer on the Outer 
Continental Shelf. The levels of expertise in areas that are 
involved in oil and gas extraction are really immense and there 
are so many considerations that have to be taken into account. 
You mentioned the protests. We have never even--I mean, we are 
aware of it but we have not looked at that particular issue 
specifically. So I guess I would say yes, the bureaus that 
oversee oil and gas production and leases are really 
challenged.
    Mrs. Lummis. Is there any effort at the Department of the 
Interior to aggregate human and financial resources in areas 
where they are a revenue generator for the United States?
    Ms. Kendall. Again, I think we face the chronic challenge 
of bureau coordination. In fact, although I cannot say this 
definitively, I have heard it anecdotally, that even BOEM and 
BLM tend to steal from each other. So the coordination effort, 
I think there may be some areas where they have that 
opportunity. We have not addressed those specifically.
    Mrs. Lummis. Thank you.
    Questions for the GAO folks. Many of these leases that are 
protested are by environmental groups that just file these 
canned briefs and obviously when 100 percent of leases are 
protested, they are protested by the same organizations over 
and over, some of which because a deadline was missed that is a 
statutory deadline and the deadline was missed by the agency. 
Some of these organizations receive compensation under EAJA, 
the Equal Access to Justice Act, out of taxpayer dollars for 
suing the federal government and then the taxpayers are paying 
them to sue the federal government. I support the intent of 
EAJA but I believe EAJA has been hijacked, and we do not know, 
though, there is no substantiation for how much money is being 
spent, how lawyers are being compensated. There are allegations 
and there is a university here in the East that has kind of 
looked at this as a research project.
    Is the GAO the right agency to be the repository for how to 
monitor each award, whether they are made by the courts or by 
the agency itself in a settlement? And how much money in 
taxpayer dollars are agencies paying out? What are the sources 
of the payouts? Are they coming out of the agency budgets or 
are they coming out of the Department of Justice? Any thoughts 
there?
    Ms. Mittal. We have done work at the request of Congress 
looking at appeals and litigation issues at the Forest Service 
so I think the type of questions you are asking is something 
that we could undertake as a review and we could try to get 
those answers for you. We have not done any work to date on 
those issues so we could not answer definitively today.
    Mr. Rusco. With respect to protests for oil and gas leases, 
we have done a recent report on that. We did not address in 
that report this issue. We did find that most of the oil and 
gas leases, their protests come from a wide range of sources 
including, as you mentioned, environmental groups make up a 
large percentage, but also hunting, recreation groups, 
ranchers, state and local governments as well, and we also 
found, as you said, that this has affected the timeliness of 
issuing leases, so once a protest has been resolved and a lease 
is going to be issued, we found that protested leases missed 
their statutory deadline of 30 days' issuance. Ninety percent 
of those were missed, and so it is an issue there. We have 
found sustained, longstanding workforce planning problems at 
BLM and they do not match their workforce planning with where 
they expect the most work to be very well, and that is a 
systemic problem.
    Mrs. Lummis. Thank you. Let me ask you further with regard 
to MMS reorganization, this question also for our GAO folks, 
have either of you looked into the Department's handling of the 
leasing and permitting for coal?
    Ms. Mittal. We have not. The only work we have done 
relating to coal has been mountaintop mining, and that is the 
Office of Surface Mining, but we have not looked in any great 
detail at leases.
    Mrs. Lummis. If I wanted to make a request that something 
be studied as a Member of Congress, how do these studies--what 
is the genesis of these studies? Do Members of Congress get to 
ask you to study certain things?
    Ms. Mittal. Sure. The genesis of most of our studies are 
either mandates, committee requests or individual member 
requests. However, because of our backlog, we generally cannot 
get to member requests. We give highest priority to mandates 
and our second priority is to committee requests. So if a 
committee of jurisdiction was to request us to undertake a 
study, we would definitely be able to do that.
    Mrs. Lummis. Thank you.
    Now I am going to switch to wildland fires, Mr. Chairman. 
Is that all right?
    Mr. Simpson. Yes.
    Mrs. Lummis. Thank you.
    Congress gave the Forest Service tools to manage fuel 
reduction in the Healthy Forest Restoration Act but your report 
indicates that they do not have a strategy to even identify 
options for reducing hazardous vegetation and yet we are 
spending, well, I think in 1999 a billion dollars on this 
subject, now $3 billion in recent years. So how is it that the 
agency does not even have a strategy to identify options about 
how to reduce hazardous fuels?
    Ms. Mittal. The wildland fire issue is a major concern for 
us. It has been a major concern for us going back over a 
decade. There are four specific areas that we feel that the 
agencies have not moved forward in a timely fashion like we 
have recommended. One is to develop a cohesive strategy to deal 
with fuel reduction as well as respond to wild fires. The 
second area is cost containment issues. They still do not have 
cost containment goals and strategies on how to achieve those 
goals. The third area, as you just mentioned, is the fuel 
reduction options. They have not established good processes to 
determine which fuel reduction projects should be undertaken 
and what the costs would be associated with those. And finally, 
we have been concerned about the planning tool that they are 
developing, a budgeting planning tool that they have been 
developing for several years now, which is behind schedule. It 
is over budget and we have no guarantee that it is going to be 
able to deliver the objectives that it was designed for. So we 
have a whole host of issues related to the wildland fire issue, 
both for Interior as well as the Forest Service, and we will be 
talking about that next week some more.
    Mrs. Lummis. Thanks, Mr. Chairman.
    Mr. Simpson. Mr. Moran, do you have anything else?
    Mr. Moran. I do, but I think given the fact that we have 
been here for, what?
    Mr. Simpson. Just an hour and 55 minutes.
    Mr. Moran. Call it two hours. I would be happy to let them 
go. They have done a great job. I do not think they are the 
problem. The problem is DOI, and in fact, it may even be us to 
some extent, you know, we have not provided sufficient 
oversight in the past, but this has been excellent testimony. 
It does seem to me there is some revenue here if we seek it 
out, and all we are doing to generate ways to balance the 
budget, this may be a very appropriate place to look, just 
getting folks to be more conscientious about not only the 
extraction of the people's resources but getting adequate 
compensation. So hopefully we could pursue that in a bipartisan 
manner.
    Mr. Simpson. Mr. Hinchey.
    Mr. Hinchey. Just a brief question.
    Mr. Simpson. Sure.
    Mr. Hinchey. One of the things about natural gas that is 
very interesting, the price of natural gas in 2008 went up so 
high, it brought in a lot of revenue, then in 2009 it 
collapsed. So it is just one of those things.
    But I would like to talk about the Deep Water Royalty 
Relief Act just briefly, just give a little background on it. 
This was back in 1995 when Congress passed the Deep Water 
Royalty Relief Act. It gave the Interior Department the ability 
to provide royalty forgiveness for the energy industry, royalty 
forgiveness. The idea was to spur deep-water exploration at a 
time when oil prices were low, drilling was less profitable. 
The measure was supposed to allow the Interior Department to 
institute price thresholds into the leases so that royalty 
payments would be made when prices were high. However, due to 
something, allegedly a clerical error, whatever it might have 
been, the Interior Department left out price thresholds on 
contracts that were signed back in 1998 and 1999. That allowed 
oil and gas companies to extract resources from public property 
without paying royalties regardless of the price of oil or gas. 
Making matters worse, thanks to an industry-led lawsuit, an 
appeals court has ruled that companies would not have to pay 
royalties for contracts signed, whether they were signed in 
1996, 1997, or interestingly enough, in 2000. So we are looking 
into this and trying to make some corrections about it, trying 
to prohibit the Interior Department from issuing any new leases 
to companies that refuse to recognize that the high price of 
oil no longer justifies royalty.
    So I wonder if you can remind the committee how much 
revenue we have lost, the United States is now losing thanks to 
this lawsuit?
    Mr. Rusco. The amount is several billions already but it 
will be somewhere in----
    Mr. Hinchey. Several billions? What is more precise in 
terms of ``several''? Is it three, seven?
    Mr. Rusco. When we looked at it last, it was just over $1 
billion that had accumulated but since then the lawsuit 
entailed paying back royalties that had been paid, so that has 
gone up and we have not yet looked at this issue since then. 
But we did estimate at that time that depending on the price of 
oil and gas, mostly oil in this case, the loss would be 
somewhere between $20 billion and $50 billion.
    Mr. Hinchey. Twenty and 50 billion?
    Mr. Rusco. Yes.
    Mr. Moran. And we have actually paid money back to the oil 
and gas companies. Are you finished, Maurice? I was just going 
to suggest, Mr. Chairman, before you conclude this meeting, I 
wonder if Mr. Cole might find that Indian tribe that got a 
thousand times reimbursement what BLM is getting for the right-
of-way and maybe we can contact them on a consultant basis or 
something to get a little better break on our right-of-way.
    Mr. Simpson. I think that was something that----
    Mr. Cole. I told Mr. Calvert at the time, look, we have 
learned something negotiating with you guys over the last 500 
years.
    Mr. Simpson. Anyway, that will be the end of this meeting 
then.
    Mr. Cole. Can I make one quick point?
    Mr. Simpson. Sure.
    Mr. Cole. First of all, I owe you an apology, Ms. Kendall. 
I think I called you Shelly and I did not mean to, so I 
apologize.
    Second, it would not be a fair meeting if my friend, Mr. 
Hinchey, and I did not wrangle a little bit over hydraulic 
fracturing. So I just want to make one point as you study this 
going forward. There are states that do this very well that 
have literally managed hydraulic fracturing for over 50 years. 
It is not a new technology. I think there are real problems 
here. I agree with Mr. Hinchey on that. And I think there is a 
lot of misunderstanding as well, and a lot of our problem I 
think stems from a difference in the sophistication and the 
experience at the state level in the regulatory arena, and I 
would suggest just as Ms. Lummis did, a good thing to do might 
be to go back to states that have a lot of experience and do 
this well as opposed to starting a whole new federal regime 
where we have no experience, no background. We already have a 
department that does not manage the things that it is supposed 
to do as well as any of us would like. I would be very careful 
about taking on a whole other area because natural gas 
production is rising in the country. This is a big thing, and 
again, there are real problems in this growth area but there 
are states that do this very well and it would be far better to 
keep this at the state level, in my opinion, help those states 
that have this challenge develop a regulatory regime than try 
to all of a sudden create one at the federal level when we have 
very little background in doing this, but just my observation. 
Thank you, Mr. Chairman.
    Mr. Simpson. Thank you. And I thank both the GAO and the IG 
for coming in and going through your reports today. My idea of 
oversight really is that we are all working together toward a 
common goal, so I appreciate your insights into this and 
working with the Department and with this committee to try to 
improve the operations of government. So thank you for being 
here today.

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                                          Wednesday, March 2, 2011.

   MAJOR MANAGEMENT CHALLENGES AT THE ENVIRONMENTAL PROTECTION AGENCY

                               WITNESSES

DAVID TRIMBLE, GAO ACTING DIRECTOR, NATURAL RESOURCES & ENVIRONMENT
ARTHUR A. ELKINS JR., INSPECTOR GENERAL, ENVIRONMENTAL PROTECTION 
    AGENCY
WADE NAJJUM, ASSISTANT INSPECTOR GENERAL FOR PROGRAM EVALUATION, OFFICE 
    OF INSPECTOR GENERAL

                  Opening Remarks of Chairman Simpson

    Mr. Simpson. Good morning, and welcome to our second 
oversight hearing this week. Today we plan to discuss Major 
Management Challenges at the Environmental Protection Agency. 
The Government Accountability Office and the EPA Inspector 
General have identified a number of barriers to effective 
implementation of EPA's mission and responsibilities through 
past audits, investigations, and evaluations. These barriers 
can be either self-imposed, internal constraints such as work 
force management that the agency may have the ability to 
address, or they may prove to be external challenges outside of 
the control of the agency, including one area that I have long 
had questions about, the lack of a government-wide coordinated 
effort and approach to climate change.
    We welcome the testimony from the GAO and EPA Inspector 
General today and look forward to an honest conversation about 
their findings and the next steps that either the EPA or the 
Congress should take in order to address these shortcomings.
    Mr. Simpson. I am pleased to be joined by our Ranking 
Member, Mr. Moran. Would you like to have your opening 
statement?

                      Opening Remarks of Mr. Moran

    Mr. Moran. Fine, Mr. Chairman. I will just say a couple 
words.
    First of all, when several of the members of the 
subcommittee get up and leave, do not think or do not wonder if 
was it something I said because it is just I know Mr. Cole is 
on and I think Mr. Calvert, we have got Secretary Gates at 
Defense Approps, so we are going to have to leave at quarter to 
ten or so.
    But we very much appreciate this, and speaking for the 
minority in this subcommittee, we particularly appreciate 
Chairman Simpson's focus on the management challenges in these 
agencies. You know, they may draw quite as well, although we 
have got good attendance today, but they are not as sexy, but 
they are at least as important issues, and we are so dependent 
upon the credibility of the Inspector General's Office and the 
General Accountability Office.
    So this is terribly important and what we are going to hear 
about, and I have had an opportunity to go through the 
statements, so I am just going to take a couple of minutes 
because I want to ask some questions, if you do not mind, Mr. 
Chairman, but these challenges that the Environmental 
Protection Agency confronts from water and waste water 
infrastructure, greenhouse gases, climate change, and so on and 
the regulation of chemicals that are used by Americans every 
day, they are enormous challenges, but what comes out from your 
testimony, and this is what the Chairman alluded to, EPA cannot 
fix it on its own. There has got to be an integrated 
collaborative strategy.
    And I have to say past administrators at times have ignored 
and delayed action until the lawsuits and court orders to 
implement legislation, and those court orders still exist 
today, and they are still going to be in place regardless of 
what we do in terms of providing federal resources.
    But there has been too much stove-piping of policies, and 
some of that is the Congress's fault in terms of the separate 
authorizations. Now, we have been focusing through the 
continuing resolution on de-funding some of the EPA 
responsibilities, but the legal responsibility nevertheless 
stays even if the Federal Government does not have the 
resources.
    I am particularly concerned about the Toxic Substance 
Control Act because right here in the Washington area we are 
seeing it in the fish and the Potomac River and other things 
that there seems to be a real need to regulate the disrupting 
effects of these chemicals, but we are not sure how to do that, 
and EPA certainly cannot do it on its own.
    But we also lack this national approach with regard to 
infrastructure needs, and I know the IG's report is 
particularly good on the issue of controlling non-point sources 
of pollution. The storm runoff, for example. But it is 
extraordinarily expensive, and now we are not going to have as 
much in the way of resources through the Clean Water State 
Revolving Fund and the Safe Drinking Water State Revolving 
Fund. So this is very relevant to the policy decisions we are 
making with regard to bringing about the kind of clean water 
that our citizens except and take for granted really.
    So this is a terribly important hearing, and again, I will 
end where I started, Mr. Chairman. I very much thank you for 
holding it. So thank you.
    Mr. Simpson. Thank you, and I also just want to emphasize 
what Jim said. It is tough because we all have different 
committees we have to serve on. I have Admiral Donald up in the 
Energy and Water Subcommittee that I have got to slip out and 
ask questions to, though we will have somebody here, but 
believe me, we do read your testimony and the recommendations 
and problems that you bring up, but we want to hear from you, 
and the subcommittee is allocating 15 minutes each to the GAO 
and the IG witnesses so they can adequately outline their 
concerns to the members, after which we will follow with 
members' questions.
    We will first hear from Mr. David Trimble, Acting Director 
of the National Resources and Environment Group at the GAO. Mr. 
Trimble will be followed by Mr. Arthur Elkins Jr., the EPA 
Inspector General. I thank both of you for being here today. 
Please share your thoughts with us.

                       Testimony of David Trimble

    Mr. Trimble. Thank you, Mr. Chairman and members of the 
committee. I am pleased to be here to discuss GAO's work on key 
management challenges facing the Environmental Protection 
Agency as it implements and enforces laws intending to improve 
the quality of the Nation's air, water, and lands and protect 
public health.
    Our work examines the full range of EPA's programs, and we 
have made numerous recommendations to enhance the agency's 
effectiveness. These recommendations have frequently targeted a 
lack of information necessary to make regulatory decisions, 
challenges with the agency's management across headquarters and 
ten regional offices, and the need for enhanced internal and 
external coordination. My statement touches on five key 
challenges beginning with improving agency-wide management.
    First, EPA has not comprehensively analyzed its workload 
and workforce since the late 1980s to determine the optimal 
numbers and distribution of staff agency wide. We have 
recommended that EPA identify the factors driving its workload 
and develop accurate allocation systems for deploying staff 
with the right skills and capabilities to areas of need.
    In 2005, we reported that any efforts made by the agency to 
develop a more systematic process will be hampered by the lack 
of comprehensive and accurate workload data. In 2010, we 
reported that the agency still had not developed a 
comprehensive workload plan and that the only recent workload 
analysis conducted was limited to the Superfund Program.
    We have also identified challenges with managing its 
enforcement of environmental statutes and regulations and 
problems with incomplete and unreliable enforcement data. In 
sum, EPA could improve its oversight of state enforcement 
agencies and its regional offices and better inform the public 
about state enforcement efforts.
    Additionally, coordination on efforts such as the 
Chesapeake Bay Program and Water Infrastructure Projects in the 
border region with Mexico also needs improvement. In 2009, we 
reported that EPA and six federal agencies obligated $1.4 
billion for drinking water and waste water projects in the 
U.S., Mexico border region from 2000, to 2008. We found that 
with only one exception the agencies had not comprehensively 
assessed the region's needs and lacked coordinated policies and 
processes for selecting and building projects, potentially 
resulting in programmatic and budgetary inefficiencies.
    In 2008, we reported that while the Chesapeake Bay Program 
had developed a strategic framework for the restoration effort, 
it had not developed a coordinated implementation strategy for 
restoring the bay that identified the activities needed to 
reach its goals, resources needed to undertake the activities, 
or the partners who would be responsible for funding and 
carrying out the activities. We currently have work ongoing to 
assess the bay restoration effort at this time, and we are 
evaluating the steps EPA has taken since our report to improve 
the coordination with bay program partners.
    A second set of challenges involves the need to transform 
EPA's process for assessing and controlling toxic chemicals. 
EPA's ability to effectively implement its mission of 
protecting public health and the environment depends on 
credible and timely assessments of the risks posed by toxic 
chemicals. EPA assesses chemicals under its Integrated Risk 
Information System Program, IRIS, and is authorized under the 
Toxic Substances Control Act, TSCA, to obtain information on 
the risks of chemicals and to control those it determines pose 
an unreasonable risk.
    Because EPA had not developed sufficient information under 
these programs to limit public exposure to chemicals that may 
pose health concerns, we added this issue to our high-risk list 
in 2009. Last month GAO updated its high-risk series and 
reaffirmed this as a continuing area of concern.
    Let me illustrate, if I could, the scope of the challenge 
in the IRIS Program. We reported in 2008 that of the 70 IRIS 
assessments in progress at that time 48 had been in progress 
for more than 5 years and 12 of those for more than 9 years, 
and most of these were still in the draft development stage. In 
addition, we reported that EPA indicated that about half of the 
chemical assessments in the database may potentially need to be 
updated.
    Third, EPA faces challenges concerning its management of a 
variety of clean water issues involving non-point sources of 
pollution such as urban and agricultural runoff as well as 
restoring large watersheds such as the Chesapeake Bay.
    Additionally, there is a challenge posed by the cost of 
repairing and upgrading the Nation's deteriorating water 
infrastructure. EPA finances infrastructure investments through 
the Clean Water and Drinking Water State Revolving Funds. These 
funds represent two of the largest items in the EPA's budget, 
$2.1 billion for Clean Water and $1.4 billion for Drinking 
Water in 2010. These funds also received $6 billion in Recovery 
Act funding.
    However, as estimates predict that the cost to meet water 
infrastructure needs over the next 20 years will total from 
$485 billion to $1.2 trillion, additional federal, state, or 
local funds or revenue from rate increases will still be 
required to address future needs.
    Fourth, our work on the cost and pace of cleanup at 
Superfund and other hazardous waste sites has found that 
despite progress in cleaning up these sites, EPA's future 
cleanup costs at non-federal priority-listed sites will likely 
be substantial and are likely to exceed current funding levels. 
Incomplete and inaccurate data hinder estimation of the amount 
of work remaining, as well as future cleanup costs at such 
sites.
    Key obstacles such as the absence of interagency agreements 
have delayed cleanups at some priority sites at Department of 
Defense installations. We have recommended that EPA assess 
comprehensiveness and reliability of the data the agency 
collects on the Superfund Program and make necessary 
improvements.
    Finally, the fifth set of challenges involves the agency's 
role in addressing climate change. While our past work in this 
area has addressed various issues concerning others' 
experiences with cap and trade programs and technical issues 
such as carbon capture and storage, the fundamental challenge 
facing EPA concerns the agency's efforts to decrease greenhouse 
gas emissions under the Clean Air Act.
    These efforts have led to an array of legal challenges and 
uncertainty about prospects for further regulation. In 2009, 
EPA found that emissions from motor vehicles were endangering 
public health and welfare. This endangerment finding is the 
basis for EPA's efforts to limit greenhouse gases under the 
Act. Twenty-six lawsuits challenging this finding have been 
filed and will be heard together by a panel of judges.
    In addition, EPA has issued a rule for greenhouse gas 
emissions from light-duty motor vehicles and additional rules 
for certain stationary sources have also been challenged in 
court.
    Furthermore, five bills that would preclude EPA from 
regulating greenhouse gases have been introduced in this 
Congress. As a result, EPA's efforts to address greenhouse 
gases face substantial obstacles and uncertainty going forward.
    This concludes my prepared statement. I would be pleased to 
respond to any questions you all may have.
    [The statement of David C. Trimble follows:]

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    Mr. Simpson. Mr. Elkins.

           Testimony of Inspector General Arthur Elkins, Jr.

    Mr. Elkins. Okay. Thank you. Good morning, Chairman 
Simpson, Ranking Member Moran, and members of the subcommittee. 
I am Arthur Elkins, Jr., Inspector General of the U.S. 
Environmental Protection Agency. I also serve as the Inspector 
General of the U.S. Chemical Safety and Hazard Investigation 
Board as well. I am pleased to appear before you today for the 
first time to discuss the significant management challenges 
facing EPA that the OIG identified for fiscal year 2010.
    Serving as Inspector General is an honor and a privilege 
for me because of the opportunities presented to make a 
positive difference by protecting taxpayer dollars from fraud, 
waste, and abuse. Also, by making recommendations that assist 
EPA to achieve its stated goals of protecting human health and 
the environment.
    Since becoming Inspector General in June, 2010, I have been 
thoroughly impressed with the expertise, dedication, and 
professionalism of my OIG staff. Their hard work serves as the 
basis of my testimony this morning.
    OIG conducts independent, non-partisan audits, evaluations, 
and investigations. This independence is the source of our 
credibility. While my remarks this morning are on our fiscal 
year 2010 management challenges list issued last May, I should 
note that we are currently updating our challenges list for 
fiscal year 2011, and will have those ready by early this 
summer.
    We identified seven challenges which are detailed in my 
statement for the record. This morning I would like to focus on 
one of these challenges, which is cyber security. The challenge 
of cyber security as we see it is that EPA has a limited 
capability to effectively respond to advanced persistent 
threats, otherwise known as APTs, conducted by outside 
organizations which are designed to establish a beachhead 
within EPA's computer networks to steal or modify information 
without detection. APT-type attacks are an infestation much 
like bedbugs. Once they are in, it is hard to get them out.
    EPA lacks sufficiently-trained personnel and resources to 
adequately address this type of threat. For example, EPA has 
faced APT-type compromises across its network computer systems. 
These compromises have resulted in proven thefts of 
intellectual data. Our investigations have shown illegal 
accesses to multiple key infrastructure components and high-
level personnel to include political appointees.
    Now, why is this important? It is important because these 
compromises places EPA infrastructure and data at risk. For 
example, a risk to CBI, intellectual properties such as 
chemical formulas, and water utilities vulnerabilities--data 
that EPA is entrusted to protect.
    It is also important because it could have an impact on our 
economy and trade, environmental and human safety programs, and 
potentially allow for compromises due to trusted relationships 
between EPA's computer domain and other government computer 
domains such as the USDA, Interior, and Commerce.
    Discussing the challenges of addressing and responding to 
cyber attacks is also a natural segue here to our budget 
request for fiscal year 2012. The President's budget included 
$56 million and 365 FTE, which includes a $10 million transfer 
from the Superfund Trust Fund, about $5 million below our 
original request.
    Now, when Congress amended the Inspector General Act in 
2008, it provided the IGs with additional safeguards to our 
independence. One is the authority to provide comments in the 
President's budget submission if we believe the budget request 
for our operations would substantially inhibit us from 
performing the duties of the Office. I do not take this 
authority lightly. However, I felt an obligation under the law 
to state my concerns about our 2012 budget, so I provided 
comments with the President's budget submission because I 
believe our budget request would inhibit us from doing our 
work.
    Additional funds would strengthen our Office of Cyber 
Investigations and homeland security efforts to help the agency 
address this security issue. We could hire more agents, obtain 
needed specialized training for agents, and purchase necessary 
hardware and software for cyber investigations. Specifically, 
this would allow for the proper future funding of our existing 
11 FTEs, increase investigative and analytical staff from 11 to 
23, and establish an office in the west, thereby expanding our 
presence beyond just DC and RTP where we are currently located, 
closer to any west coast compromises.
    Putting the OIG's budget request in perspective, the total 
OIG budget represents an investment in oversight of less than 
half of 1 percent of the agency's total budget. I see the OIG 
as an insurance policy. During times of reduced resources is 
when there is a greater need for oversight to promote 
efficiency and address the heightened risk of fraud, waste, and 
abuse.
    Finally, in closing, management challenges are meant to 
bring the big issues to the attention of senior EPA management, 
Congress, and the public. I think we and GAO share the same 
goal here. That is to see that EPA improves its performance. 
The agency has made some progress in addressing some of the 
challenges we identified. For example, in the cyber security 
area, members of the agency have told my staff, ``we get'' it 
as it pertains to cyber security, and they are taking steps 
independently and with us through the development of an MOU to 
address the ever-changing landscape of cyber security threats.
    However, a more sustained and robust effort is needed to 
fully resolve not just cyber security but the other challenges 
that we identified as well. We will continue to monitor and 
track EPA's progress and report on any other emerging issues, 
but if the OIG is under-funded, it will impact the depth of our 
reviews in these and other areas.
    Thank you for the opportunity to testify before you today. 
I would be pleased to answer any questions the subcommittee may 
have.
    [The statement of Arthur A. Elkins, Jr. follows:]

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    Mr. Simpson. I know that you have got to go here shortly. 
Is there anything you would like to ask before you go?
    Mr. Moran. I would, Mr. Chairman. Let me just ask about the 
Chesapeake Bay because that is particularly important to me and 
otherwise it might not come up.
    We have a new agreement that requires everyone to be 
involved in terms of achieving the total maximum daily load, 
but that requirement was then wiped out in the continuing 
resolution. Do you see, either of you, as that being sufficient 
to achieve our objectives? Because we are about 30 years behind 
in terms of achieving the objectives that we had set with the 
six states. Is there any comment on that?
    Mr. Trimble. Well, I think as I noted, we have an ongoing 
review. Under a mandate we have a recurring obligation to 
review progress under the Chesapeake Bay Program. We have an 
ongoing review looking at progress since we last looked at the 
issue in 2008.
    Part of that effort is to look at the latest plan taken by 
the EPA and the Administration and then, again, looking at the 
basic issues we have identified before in terms of identifying 
strategic goals and coordination issues. I think our report 
will probably get at a lot of the issues that you are asking.
    Mr. Moran. When will we get that report?
    Mr. Trimble. That will be early summer, I believe.
    Mr. Moran. Early summer of this year?
    Mr. Trimble. Yes.
    Mr. Moran. Okay.
    Mr. Trimble. Yes, sir.
    Mr. Moran. All right. Let me just ask you, we have had some 
serious problems with regard to TSCA, the regulation of the 
chemicals that consumers use every day. Is TSCA sufficient? We 
have been considering reauthorization of TSCA, but again, you 
bring out the fact that there needs to be more collaboration 
than exists right now. Do you see the TSCA legislation as 
sufficient? Can we just renew it, or should there be a 
substantial reconfiguration of it?
    Mr. Trimble. I know that in our prior work we have 
identified substantial problems with TSCA both in terms of its 
implementation and also we have made very specific 
recommendations regarding legislative changes as well. So I 
think both need to be addressed.

                      TOXIC SUBSTANCES CONTROL ACT

    Mr. Elkins. And I would concur with that assessment as 
well. We found similar challenges as well.
    Mr. Moran. So the existing legislation is insufficient to 
achieve the tasks both with combinations of chemicals and the 
existing authority.
    Just one last thing, and then I am going to let it go. The 
water pollution from non-point sources, this is a major 
finding. Do we need more resources? I know we have cut the 
Clean Water State Revolving Fund and the State Drinking Water 
Revolving Fund, but you are telling us that these non-point 
sources, the storm water runoff particularly, we are really not 
making a whole lot of progress in terms of achieving the 
quality of the water that we need.
    Mr. Trimble. We right now have an ongoing review looking at 
the 319 Program for non-point sources. It is clearly an area of 
need. A lot of progress has been made in the past regarding 
point-source pollution, and right now a lot of our focus in the 
current review is looking at coordination efforts and level of 
effort in the 319 Program. So certainly more is needed in that 
area.
    Mr. Elkins. And I do not know exactly whether or not we 
have looked at that exact issue. You know, I would like to 
state for the record here, too, I have been on board now for 
about 8 months, so I am not going to claim to know all the 
small details. That is why I brought some of my qualified staff 
with me.
    So at this point let me turn around.

                             CHESAPEAKE BAY

    Mr. Najjum. Wade Najjum, Assistant Inspector General for 
Program Evaluation. We have done work in the Chesapeake Bay but 
not within the past 2 years. We thought the program office and 
Executive Order did make some big steps, and also the 
coordination with the Department of Agriculture, in particular 
for non-point sources. And that has carried over, I think, into 
other areas of the country where agriculture is looking at it. 
That was part of a joint project we did with the USDA IG.

                            WATER NUTRIENTS

    We also issued a report on nutrients standards for the 
water. EPA accepted and began taking action on it to look at a 
lot of the nutrients that come from the non-point sources. They 
do have authority to deal with that. They just have to exercise 
it, which was one of the things that we recommended they do.
    Mr. Moran. More challenging in terms of trying to get out. 
There are other issues, the important of the greenhouse gas 
registry and so on, but I suspect Ms. McCollum, Mr. Chairman, 
is going to pursue areas like that, so rather than be 
repetitive, I thank you for the opportunity, and thank you very 
much for having this hearing.
    Mr. Simpson. You mentioned that workforce management is a 
challenge. I find that, I guess, kind of surprising because 
that would seem to be one of the primary goals of management is 
to make sure your workforce is aligned with priorities that you 
have established.
    Why is that a problem, and how do we get at it, and could 
workforce management or the lack of workforce management lead 
to differences between the regions and how different rules and 
regulations are applied? I continue to hear this from 
businesses, industries that have plants in different parts of 
the country that say rules applied one way in this region and 
another way in another region and that type of thing.
    Could the lack of workforce management lead to that type of 
implementation?
    Mr. Trimble. You know, I do not know if our work is 
specifically tied to that, but that is certainly one potential 
consequence. I mean, the fundamental issue is identifying your 
workload, lining up your workforce with that workload, and then 
linking it to your strategic objectives, and that is really 
where we have found the agency has fallen down. I believe the 
last workforce plan was in 2006, and I believe that was the 
first one by the agency.
    And so without the ability to line up your resources with 
the workload, a natural consequence is that you have such 
disconnects as you mentioned. I think the other area that leads 
to that kind of disconnect is in the area of enforcement, where 
we have repeatedly made observations or recommendations 
concerning improving the data EPA has to manage enforcement 
undertaken by the states and the regions in their oversight 
capacity. And it is the absence of that data or the absence of 
using that data to analyze why there are differences, I think 
is also a potential cause of the situation you described.
    Mr. Simpson. Speaking of data and data the states have, do 
you know many of the environmental responsibilities are 
delegated to the states, if those states demonstrate that they 
can operate programs and they are at least as stringent as the 
federal standards? The EPA IG is finding that more data 
collection is required to ensure proper oversight of state-
delegated programs is in direct conflict with what we hear from 
the states quite frankly.
    The GAO has also identified the need for more consistent 
enforcement and compliance data, yet some states already 
believe that the EPA's data requirements are too burdensome. We 
even saw a few states rejecting Recovery Act funds because of 
the reporting burden that was too high for those states.
    Have you heard similar complaints as you conducted your 
reviews or since the release of your findings, or have you 
found that states generally agree with the recommendations to 
increase data collection?
    Mr. Trimble. I would have to go back to check on specific 
state responses. I believe a lot of the focus of our 
recommendations concerns consistency of information across the 
regions and the states as much as it is additional information. 
So I am not sure it is necessarily an additional burden we are 
talking about.

                     DATA: COLLECTION AND REPORTING

    Mr. Elkins. Yes, and also on the work that we have done, I 
am not quite sure that I have information on what the states' 
reaction has been to our report because we do the review and 
then release the report to the agency, although we have found 
that data quality issues have been an ongoing challenge.
    Again, I would like to turn to my subject matter experts 
and see if anybody can give me----
    Mr. Simpson. And your name is for the record?
    Mr. Najjum. Wade Najjum, Assistant Inspector General for 
Program Evaluation.
    Mr. Simpson. Okay.
    Mr. Najjum. What we have found is, yes, the states have 
told us when we have talked with them about not liking some of 
the requirements or the inconsistent requirements that EPA has. 
What we found from our point of view is the real issue is there 
is a difference in definition. It's not so much that we have 
not looked to see that the requirements are burdensome 
necessarily. But when we are looking at an enforcement function 
it is to see do they have the information to make the right 
decisions? And what you will have generally is through the 
regions, EPA relies on the state systems to provide them the 
information.
    That information varies from state to state, and the 
definition of what goes into the database varies from state to 
state. So by the time it gets through the regions and their 
interpretation and ten different regions' interpretation of it, 
it is inconsistent.
    I do not think it is one that you would blame any of the 
states for having their own system, but what you do have is 
that lack of a consistent definition so that when the data gets 
brought in and consolidated, you don't have a real 
understanding of what it means.
    Mr. Simpson. How hard can it be to ask for consistent data 
from the states or from the regions?
    Mr. Najjum. Well, it is not hard to ask for it unless you 
are asking the states to change their system to provide 
information to a definition that they did not design their 
systems to do. I think that is the issue. The states have their 
systems which are to serve their own purposes. To the extent it 
can, EPA draws their information from these systems.
    There may not be a standard definition. We recently issued 
a report on emergency drinking water wells. It is not something 
that EPA looks at but based on the situation in Crestwood where 
a town was blending water using contaminated water from an 
emergency well to supplement their water supply. We looked to 
see does EPA know where emergency wells are. Because it is a 
data element that is reported but depending on which state you 
are dealing with depends on how they categorize and report it.
    So when you pull all the information together, it is 
useless. I believe Colorado, for example, maintains emergency 
wells strictly for firefighting. Does not have anything to do 
with whether it is contaminated or not. Some other places in 
Illinois, for example, maintained an emergency well of 
contaminated water for firefighting, just for emergencies, but 
there are two different types of wells there that we are really 
talking about.
    So I think that is the issue, sir.
    Mr. Simpson. Okay.
    Ms. McCollum. Mr. Chair.
    Mr. Simpson. Yes.
    Ms. McCollum. This is baffling to me. I mean, I would think 
that if we define what an emergency well was and there could be 
many different types, potable water, emergencies for 
firefighting, that would be pretty clear. You say states are 
doing their own thing. If we ask somebody to report on 
emergency wells and we say, okay, potable and for forest fires, 
how hard is that?
    Mr. Najjum. It would be hard if you wanted to use your 
authority to tell the states, including the ones that do not 
keep those records necessarily, they have to do it. I think 
that is the issue there on lots of things.
    If we use somebody else's system, unless you are willing to 
tell them how to define all the data elements in it, if you are 
willing to accept their system, then you accept the information 
that is in it.
    Ms. McCollum. Okay.
    Mr. Najjum. And it may be of different definitions and 
quality.
    Ms. McCollum. I am a mom. So if I say drink your milk, it 
means drink your milk. It does not mean drink the water or 
drink something else, or go to the refrigerator and get juice 
to drink. It means drink the milk. So if I ask people to report 
on emergency wells and I have described what emergency wells 
are to them----
    Mr. Najjum. Yes.
    Ms. McCollum [continuing]. They might have systems that 
account for things differently, but is it that they cannot or 
will not? Because you could have a system that lists that 
differently, but you still have it in front of you to pull it 
out.
    Will they not or they cannot?
    Mr. Najjum. I do not think it is a will not or cannot. I 
think there is so much information available.
    Ms. McCollum. I think you are being very polite, sir.
    Mr. Najjum. I try to be.
    Mr. Simpson. Well, it is kind of surprising to me. You 
would think that when the states accept the responsibility to 
enforce the Clean Water Act or are delegated the authority to 
do that, part of that delegation would be this is what we 
expect, not only that you meet standards, but that you have 
reportable data that fits within the system so that we know 
what is going on.

                         DELEGATIONS TO STATES

    Mr. Najjum. As a matter of fact, sir, we issued a report on 
inconsistencies between the EPA State Clean Water Act 
memorandums of agreement that have been put into place. They 
are the basic underlying internal controls to that delegation 
of authority, and depending on when that delegation was made 
and when it has been updated or how it has been updated, some 
of those memorandum of agreements were not complete as far as 
changes, statutory changes to the act or things had changed 
over time.
    And what they covered, since they were individually 
negotiated between the regions and the states, they were not 
consistent, which may go back to your earlier point about 
inconsistencies in enforcement. It is that delegation to the 
states and then how the states actually do the work that is how 
the inconsistencies come about. I think the memorandum of 
agreement has been described as part of a layer cake. It is not 
a sole defining document, but it is part of a layer cake of how 
we do business with the states, and many of them were of our 
date.
    Mr. Simpson. Ms. McCollum.
    Ms. McCollum. Thank you. I have a couple of things I would 
like to ask about, but I really want to take the time while I 
have you here to learn, so I am going to just see how I go from 
here. I would like to talk about Toxic Chemical Reform.
    I come from a state that actually has invested and put 
money into public health and toxic chemicals and is working on 
even listing emerging chemicals of concern.
    The EPA, as we were kind of talking before, something that 
was even easier to describe, what is emergency water, states 
have been working with the EPA in chemical reform. In the GAO 
report, there suggests that there is a barrier to the EPA's 
ability to assess chemical risks because of the lack of 
authority under TSCA to require comprehensive health and safety 
information.
    Then I go to page 8 of your report, and you have in here in 
the first paragraph, I read from it, ``In contrast to the 
approach taken by the European Union which generally places the 
burden on companies to prove the data on the chemicals that 
they produce to address the risks posed by these chemicals to 
human health and the environment.'' So we have just the 
opposite here.
    I would like you to, as you comment, have that in the back 
of your mind as you respond.
    Then you go on to say, ``Nevertheless, although 85 percent 
of the notices lack any health or safety tests, EPA does not 
often use its authority to obtain more information.'' So there 
is someone out there kind of collecting and saying, jeez, 85 
percent of this information we have on whether or not this is 
toxic is really, really inconclusive.
    And then one of the challenges that you kind of addressed 
in your report is to shift more of the burden to chemical 
companies for demonstrating the safety of their product, so I 
am kind of concerned that we are not watching what is going on 
there with these chemicals of emerging concern, let alone we 
still have a lot of chemicals that are currently out there.
    And then you go on to talk about nanotechnology, which is 
even, I do not want to say frightening, because I think 
nanotechnology possesses a lot of good, but we have no idea on 
how to handle it as waste and what is safe.
    Could you maybe talk to me about how you really think your 
ability to guard and protect public health is not being 
addressed because we are not sharing the burden with the 
companies who are for profit, who sell these products and then 
we end up cleaning or we end up as taxpayers cleaning it up or 
dealing with the public health risk. Could you talk about that 
and maybe what is preventing you from being more efficient in 
that?
    Mr. Trimble. Yes. Well, I think our work on EPA's Toxic 
Chemical Programs, I mean, there are two pieces that form the 
base for why it became a high-risk area. One was IRIS, which is 
EPA's program for assessing toxicity, and the program you 
alluded to is under TSCA, which regulates chemicals.
    What our work has found and which is what has led to the 
numerous recommendations in the area for both agency and 
legislation is that there is sort of an overwhelming amount of 
work to be done. When TSCA first kicked in, there were about 
some 60,000 chemicals in use at the time, registered for use. 
Currently there are about some 80,000 registered for use. Not 
all are currently in use, but that is the number in the 
registry.
    The challenge has been to get information on the potential 
health effects of those chemicals. The level of burden or what 
kind of information varies depending on whether it was in use 
or if it is a new chemical. For chemicals that are coming into 
use, companies have to provide a pre-manufacture or pre-use 
notification to EPA, and the 85 percent figure you allude to is 
in reference to new chemicals coming into commerce. Eighty-five 
percent of the notices coming to EPA did not have the health 
effects information associated with that.
    Now, some of that may be because it is known, it is a no-
brainer. But a lot of it is an unknown. It is a question mark, 
and the challenges that we have reported on and previously have 
been that the thresholds, the legislative, the statutory 
criteria EPA must meet in order to demand more information has 
been a very high hurdle and has impeded EPA's ability to get 
the information on the potential health affects of those 
chemicals.
    Ms. McCollum. Do you know if the EPA requires if you were 
able to have the information, what would be the level effect on 
pediatrics versus adult?
    Mr. Trimble. That kind of question goes more into the 
Integrated Risks Information System, which is on the potential 
health effects of a chemical, and that would be the kind of 
thing that would go into that study, and that is the area where 
we have noted problems just because they have been, again, long 
in tooth in terms of getting these things out. They have not 
been keeping up with the pace and then a lot of the assessments 
already into their Integrated Risk Information System are 
already in need of updating.
    So I believe in my opening statement I made the reference 
to the 70 that were in the process and about 40 of those or 48 
of those were already over, I believe, 5 years old and 12 were 
over 9 years old. And the IRIS process is what is the 
foundation for EPA's other regulatory actions, because that 
provides the human health effects information which then 
becomes the basis for regulating it in air and water and for 
Superfund cleanups.
    So that is why that is such a critical program.
    Ms. McCollum. So you have a list of the backlog and how far 
behind we are?
    Mr. Trimble. I believe we touched on that in our report 
from 2008. I do not know if we have current information. In 
2008, I believe we had said there were about 70 ongoing IRIS 
assessments, and at that time I think we had been told that 
about half of the assessments were already in the database, and 
I believe the database had around 500 or so chemicals already 
in potential need of updating.
    Ms. McCollum. There was some legislation that passed 
through our university system, so we are not necessarily 
growing the Federal Government larger to do all this, but have 
emerging centers of excellence with our university systems. Are 
you aware of that, and how do you interface with other people 
who are working on it so we are not, you know, trying to create 
another wheel when there is somebody out there who can do it, 
and we can work with them more effectively and efficiently with 
the taxpayers' dollars?
    Mr. Trimble. Yes. GAO has not looked at EPA's interaction 
with the universities and centers of excellence and whether 
that is part of their current strategy for reforming the 
process. I know they have a lot of initiatives ongoing 
regarding both IRIS and TSCA, but I am not familiar. That is 
not an area we have done work in recently.
    Mr. Simpson. Okay. Mr. Flake.
    Mr. Flake. Thank you, Mr. Chairman. Mr. Trimble, to you 
first. The Environmental Protection Agency has obviously, and 
you mentioned it, caused controversy with some of the actions 
that have been taken, including overreach lawsuits, legislation 
introduced on greenhouse gas regulation, push back on Clean 
Water Act regulations that have been interpreted to include 
virtually every body of water including those created when a 
truck tire makes an indent in the surface of the earth. It just 
seems that there is over-zealousness everywhere.
    What roles does the federal oversight community, including 
the GAO and the Inspector General, play when such overreach is 
occurring? Is it your role or is it the Inspector General's 
role to say, ``hey, is it time to back off a bit here''? Like I 
said, whether it is greenhouse gas regulation or any of the 
other areas, there seems to be a chorus outside of the agency 
saying there is overreach here.
    What role do you play?

                         INSPECTOR GENERAL ACT

    Mr. Elkins. I will address that. Under the IG Act, the IG's 
role is clearly laid out by statute. One of the prohibitions 
for IGs is not to get involved in operational issues of an 
agency, which would include making policy decisions or policy 
judgments. The type of issue that you raised is a policy issue.
    What the IG's role is is that once the agency has 
implemented a policy, then the IG can take a look at what the 
impact of that use of discretion is. That will be our proper 
role. So I would be out of my lane to comment on issues related 
to the agency's exercise of policy beyond the impact issue.
    Mr. Flake. Mr. Trimble, has the GAO been commissioned to 
study this issue by any members?
    Mr. Trimble. No, we have not. The one observation I would 
make is that GAO has a policy of not getting involved in areas 
where there is ongoing litigation, so for example, I think one 
of the areas----
    Mr. Flake. Then how do you get involved in anything?
    Mr. Trimble. Yes. Exactly. One of the areas, for example, 
is I believe there is a lawsuit challenging the TMDL for the 
Chesapeake Bay by I believe the Farm Federation or Farm Bureau. 
That is an area which, while it is related to ongoing work we 
are doing, we are going to shy away from because it puts us at 
risk of getting right in the middle of the litigation, and we 
do not want to sort of have our records subpoenaed and be 
called out. So as a policy matter we will shy away.
    So I think the fact of what happens is because this is such 
a litigious area, we sort of get bumped out of it for other 
reasons.
    Mr. Flake. Then it is up to us, I guess. Right?
    Mr. Elkins, you noted in your testimony that the agency is 
implementing a sustainable water infrastructure policy that 
includes finding ways to expand and incorporate green 
infrastructure options.
    Now, given the limited funding that is available right now 
for new initiatives, have you done any assessment or has 
anybody on what new costs that might incur, what relative 
effectiveness and efficiency of using these new green 
infrastructure options?

                      WATER INFRASTRUCTURE: GREEN

    Mr. Elkins. You know, I hate to do this, but it seems that 
this is turning into the Wade Najjum show here, but he seems to 
be my subject matter expert. He has all the details on this, so 
Wade.
    Mr. Najjum. Wade Najjum. The short answer, sir, would be 
no.
    Mr. Flake. You work just like my staff. So, we will turn to 
the GAO then. Has that been the subject of a study commissioned 
by any member?
    Mr. Trimble. Yes. We have not looked at that directly. It 
came up incidentally in our work looking at the Recovery Act 
money that went to the Revolving Funds, and there was a 20 
percent set-aside for green projects. So we looked at more sort 
of technical implementation issues regarding that.
    We have an ongoing review due out I think at the very end 
of May, beginning of June. That report is sort of an update on 
our monitoring of the Clean Water, Drinking Water Funds, and I 
think we will get a little bit more in detail, but nothing 
specific as to the cost implications, I believe.
    Mr. Flake. So you have not issued any reports that you can 
report on or give a summary of now?
    Mr. Trimble. No, I do not believe, not on the efficiency of 
the costs of those initiatives.
    Mr. Flake. Thank you.
    Mr. Simpson. I think Mrs. Lummis has a problem with her 
voice today and so she came to listen more than anything else 
because the voice is gone. I understand that.
    Let me ask. In the report the GAO released yesterday 
entitled, ``Opportunities to Reduce Potential Duplication in 
Government Programs, Save Tax Dollars and Enhance Revenue,'' 
the GAO identified coordination with other agencies as an issue 
in the U.S.-Mexico border region leading to an ineffective and 
fragmented use of resources. I think you mentioned this in your 
testimony.
    The GAO suggested that Congress establish a taskforce to 
review and coordinate those activities. Any idea how that 
taskforce would work and why Congress should do it rather than 
the Administrative Branch of government? As I understand seven 
agencies are the EPA, the USDA, the Army Corps of Engineers, 
IHS, EDA, the Bureau of Reclamation.
    Mr. Trimble. Yes. I am not that familiar with the details 
as to why that became a matter for Congress other than, of 
course, when you have that many agencies it is not something 
one agency can do unilaterally. So obviously having sort of 
another force to tell them to do it, I think, is the obvious 
answer.
    That was an area, I think as I mentioned in my opening 
statement, you have seven agencies involved in the border 
region of Mexico, providing similar services for clean water, 
drinking water projects. Only one of those agencies has 
actually done a comprehensive sort of needs assessment of the 
region. That was the Indian Health Service at the reservations 
or the Indian lands.
    And so what you had then is both Ag and EPA as the big 
players, sort of working potentially across purposes because 
the actions were not coordinated.
    Moreover, you increase the burden on the local communities 
because a lot of the application requirements for those 
projects, which can involve a lot of engineering drawings, 
which could cost you $30,000 to put a package together, they 
are not identical. So if you are going to apply to both funding 
streams, you have to do it twice, and then sometimes people 
would do it, and then they would choose one funding stream but 
not the other, and then you have had a waste of resources in 
that regard.
    So there is clearly a potential for improvements at the 
local level just to make the program more effective. And 
moreover, the way the program is constructed is that the areas 
perhaps of greatest need may not be communities that have the 
technical or financial wherewithal to go through the 
application process for these federal programs. So you need to 
have a strategic outlook to target those communities because 
the ones who will be silent may be the ones who are most in 
need as well.
    Mr. Simpson. Okay. Mr. Elkins, you mentioned and talked 
some about adequate funding within the EPA for cyber security. 
Tell me about that need more if you would. When I think of 
cyber security, the EPA is not something that I really think 
of. Yesterday when we heard about the Department of the 
Interior and other agencies uniting cyber securities, I always 
think of that with Homeland Security and Defense and some of 
the other agencies.
    Why is it important within EPA, and what would be the 
results if we did not pursue that, make sure they had a secure 
system?

                             CYBER SECURITY

    Mr. Elkins. Sure. That is a fair question. Most people do 
not realize that EPA has information that is of a sensitive 
nature. For instance, treaty information, information on 
climate change that someone might have an interest in to be 
able to use that information against the interest of the United 
States.
    There has been evidence and we have investigated intrusions 
into EPA systems. I cannot get into the specifics of that 
because it is of a classified nature, but it suggests that this 
is a real issue.
    Also, I think, just looking at the recent press releases 
would indicate, generally speaking, this is not just an EPA 
issue. This is a global issue, and it is a Federal Government 
issue. Other agencies than EPA are also being attacked as well.
    The challenges and the threat changes. The players change. 
You know, these are organized operations that are specifically 
set up to infiltrate, to get into the system, to bury 
themselves in there, and then to use the systems against EPA. 
That compromised information then goes out to some of our 
partners. So it is a very insidious type of an operation.
    So it is a major management challenge for the agency. It is 
ongoing. It is complicated to the extent that the current 
authorities, for instance, the IG Act provides that the IG is 
responsible for overseeing the operations and programs of the 
agency. However, on the other hand the agency also has certain 
responsibilities in terms of security and how it protects its 
assets.
    So sometimes there is a disconnect between the agency's 
desire to run its show and the IG's responsibilities to 
oversee. So we run into conflict and where we have that gap is 
where those who have an interest in taking advantage of that 
can play and can get in and cause a lot of harm.
    So to have some sort of consistent approach to dealing with 
cyber security would be helpful, and it may require legislation 
to do that. I am not quite sure. But every day we see more and 
more attacks. It becomes more and more serious, and I am not 
quite sure we totally have a coherent strategy to be able to 
address it.
    Mr. Simpson. Is it more of a focus issue within the 
Department or a resource issue?
    Mr. Elkins. It is a little bit of both. From our 
perspective it is a resource issue because it does take money. 
This is not an issue where I can just take criminal 
investigators from one shop and just detail them over to do 
cyber work. Cyber folks come with a certain skill set and also 
requires investment in certain types of software to be able to 
detect when there has been an intrusion. So from our standpoint 
it is a resource issue.
    I believe the agency, as I said, gets it. They understand 
that this is a challenge, and it is a threat, and we are 
working hopefully as a team, the agency and the IG's office, as 
we move forward to be able to address this.
    Mr. Simpson. Ms. McCollum.
    Ms. McCollum. Thank you. One of the things that sometimes 
we do not think about when we talk about growth and potential 
and expansion and everything else is what is changing in the 
world. Now, we touched on the chemicals a little bit. One of 
the things, nanotechnology, when these legislation and these 
agencies were set up, nanotechnology was not on anybody's radar 
screen, and there you are dealing with it. Cyber security was 
not anything that people were worried about. There we are 
dealing with it.
    Another thing that has kind of come up of concern is 
coordinating climate change activities, and the chair touched 
on this yesterday. One of the things that, when the EPA was 
looking at and people were not talking about fracking and 
people were not talking about, capturing carbon and storing it 
and all that.
    And these are things you have to look at because they 
impact clean water for populations to drink. It is a public 
health issue. It is a conservation issue for future 
generations.
    Has GAO or the Inspector General, have you looked at, and I 
mean, this is not about growing government bigger. These are 
responses to technology. Have you looked at just doing the 
basic mission of the EPA plus these new, whether it is new 
chemicals, new technologies, new production methods, how they 
impact your budget, and when you are talking about building in 
for inflation, are we building in for how we have to respond to 
technology so that you can really do your job efficiently?
    I think we still need to look for ways, and I think climate 
change is one way where we can start molding the interagency 
cooperation better.
    Mr. Trimble. Well, I mean, I think you make some excellent 
points regarding sort of the evolving, fast-changing world and 
the evolving challenges, and I think, you know, to go back to 
the importance of workload and workforce planning, that is sort 
of why you need to do that. That is why that is so important, 
and I think in our prior reports what we had noted was EPA, 
even though they had identified changes in their workload and 
their responsibilities under the Clean Water Act and these 
other duties, that there is not a systematic process by which 
they look at those evolving responsibilities and make sure both 
that their staff are aligned to address that, as well as to 
make sure that their staff's skill sets are aligned to address 
that to meet their changing strategic goals.
    So I think that is sort of the heart and soul of the 
importance of that issue. In general, in sort of an incidental 
way, we come across this repeatedly, so in terms of the 
coordination issue, we have done a report on carbon capture and 
storage, and in that report we noted that to do this is not 
something the EPA can do alone. You are talking about massive 
technology, you are talking about massive transportation 
systems to ship this stuff across the country, plus storage. So 
you are talking, you know, the Department of Transportation, 
Department of Agriculture and Interior. All these guys are 
going to be involved in some effort like that, and we had made 
recommendations along those lines, and I believe the President 
last year or the end of the prior year had started a coalition 
or an executive level group to look at this issue.
    But absolutely most of these big changes, these challenges 
are going to require large amounts of coordination across the 
agencies.

                             NANOTECHNOLOGY

                          ENDOCRINE DISRUPTORS

    Mr. Elkins. And we agree with you. We think these are 
important issues in areas that we should be looking at from an 
IG perspective. As a matter of fact, currently we do have 
ongoing projects right now looking at the nano-material areas 
as well as endocrine disrupters as well.
    So I guess what I can say to you is stay tuned because 
there will be reports coming out within the near future.
    Ms. McCollum. Mr. Chair, I think that makes it a real 
challenge for you and for this committee putting the budget 
together, and we have to do a lot of belt tightening right now. 
I am not saying that we do not, but we have a responsibility 
for not only today's public health issues but being smart for 
the next generation, because if we are not, it is going to be 
even more expensive for them to deal with that.
    If I could, it is quick, and it is short. It is the Great 
Lakes, which I know everybody is just so excited to hear about 
it. The EPA has been given an initiative, and it came together 
primarily working with the governors and the elected officials 
from Canada and then working out things between the two federal 
governments and so there has been a lot put in at the local 
level, not driven necessarily at a national level.
    And you have some initiatives that have come out as a 
result of that, the Great Lakes Initiative. Now, I understand 
that there was money to fund this, and the Canadian government 
is doing its part, too. I was just with an official from Canada 
in my office yesterday, and we were talking about the Great 
Lakes Initiative. They are concerned that the United States and 
so are the states, Minnesota in particular, that we are not 
going to live up to our commitment, and it goes to 
infrastructure needs, testing, innovation and other things.
    So can you tell me how much of that might have been from 
lack of resources because I am hearing different things from 
different people so I am not judging. I am just asking for your 
factual/opinion on this.
    Did we have funds there before you were able to scale up 
with a staff to do that? Was there a hard time attracting the 
right staff with the right tool set? And then the other 
interesting thing that I have heard, believe it or not, is that 
weather has been a problem because there are only certain 
times, as you know, that you can do certain things with bodies 
of water because they get hard at certain points during the 
year.
    So part of it is that funds are obligated but they were not 
being able to be used because we have a little thing called a 
cold climate.
    Mr. Trimble. The GAO's work on Great Lakes, we have not 
done anything in the last couple of years on that. That is an 
area we definitely believe needs attention and some focus. The 
work we have done in the past in that area noted some 
coordination issues as well as some issues concerning questions 
about how they would monitor progress on the plans that they 
had talked about.
    I think the issues and concerns you speak of will probably 
be echoed in the work ongoing in the Chesapeake Bay. So I think 
the issues and the lessons learned from that effort will 
clearly have applicability to the ongoing effort. You have the 
same, you know, budgetary pressures among the states versus the 
Federal Government and then the questions about who is going to 
pick up what piece of the load and whether or not people can 
still meet those commitments given the pressures at the state 
and the federal levels.
    Ms. McCollum. And I am not trying to be funny about it, but 
I know from even serving on a city council, you do road bids, 
you put things out, and then weather just does not cooperate. 
When the GAO looks at timeliness of being able to fulfill 
obligations in reports, I mean, seriously, do you look at the 
impact that there are certain times of the year where we just 
cannot do certain things? And does that factor in? If it 
factors in, then is it a help, or is it never accounted for at 
all, and then we could look like we are not doing our fair 
share when we are just prohibited to do it because of climate?
    Mr. Trimble. I mean, we have not done a recent review of, 
you know, specific milestones and progress, so we are not in a 
position to talk about any potential delays. I can speak from 
experience. I was involved in tracking the Recovery Act money 
for water projects specifically across the country and then 
also mostly I did a lot of detailed work in Ohio. And clearly 
the weather impacts the progress of those projects, and that is 
all accounted for both in the state's planning and the layout 
and distribution of those funds.
    So it is clearly something that is foreseen and accounted 
for both in the planning and then in the evaluation of those 
efforts.
    Ms. McCollum. Thank you, Mr. Chairman. Thank you for your 
indulgence.
    Mr. Simpson. Mr. Flake.
    Mr. Flake. No more questions. Just a comment. How can 
people with so much water still complain so much?
    Ms. McCollum. We are protecting it for you or from you. I 
am not sure which.
    Mr. Flake. No more questions.
    Mr. Simpson. I appreciate that, and I appreciate you both 
being here today. As I said, or as Mr. Moran said, there are a 
number of hearings, unfortunately, that are going on. We 
appreciate the staff for being here also and answering 
questions. I can tell you that we do take your reports very 
seriously. I still would repeat that I am kind of stunned that 
a concern of yours is the workforce development within the EPA 
when you look at the fact that 25 percent of their budget is 
spent on employees and salaries. You would think that that 
would be a high priority of making sure the workforce fits the 
task that you ask them to do and the priorities that you have 
asked them to do.
    And that is certainly questions that will come up during 
the hearing with the EPA, but you have given us a basis of 
questions that will be asked, and we appreciate your work on 
this, and thanks very much for being here.

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                                           Thursday, March 3, 2011.

                    ENVIRONMENTAL PROTECTION AGENCY

                               WITNESSES

LISA P. JACKSON, ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY
BARBARA BENNETT, CHIEF FINANCIAL OFFICER, ENVIRONMENTAL PROTECTION 
    AGENCY

                  Opening Remarks of Chairman Simpson

    Mr. Simpson. The hearing will be come to order. Good 
morning, and welcome to the third meeting and the first budget 
hearing of the 2012 season for this Subcommittee on Interior, 
Environment and Related Agencies. I am pleased to kick off the 
2012 debate with the Environmental Protection Agency, whose 
programs and funding are of great interest to this 
subcommittee. Administrator Jackson, thank you for being here 
this morning and testifying on your 2012 budget proposal. We 
find ourselves at a critical juncture as we begin to focus on 
our work for the fiscal year 2012 while we continue to finish 
the 2011 budget. The overspending has gone on too long, and now 
it is time to tighten our belts. Difficult decisions await this 
subcommittee and the Appropriations Committee in general. The 
House took the necessary first steps to move in a fiscally 
responsible direction on February 19th by passing $100 billion 
in discretionary spending reductions. The package included $4.4 
billion in cuts from agencies funded through this subcommittee, 
of which $3 billion came out of the EPA budget.
    We did so, in large part, by reducing the Clean Water and 
Drinking Water State Revolving Fund by almost $2 billion in 
order to return those programs to the 2008 funding levels. In 
2009, the SRFs received $6 billion in stimulus funding, 
equivalent to five years of appropriations at the 2008 level. I 
think we can all agree that a 5-year infusion of funding in one 
year is a huge influx for any program to absorb. I raise this 
not because I am opposed to the purpose of the SRFs, but as the 
clearest example in this bill of too much, too fast which could 
be the mantra for the EPA whether we are talking about spending 
or regulations.
    The House full-year CR also cut $303 million from the 
geographic programs, including $225 million from the Great 
Lakes Restoration Initiative. This is another program that has 
struggled to place funding on projects within a year, following 
a staggering seven-fold increase in 2010. The CR also cut $68 
million in climate change funding and targeted reductions to 
the EPA's air, water and policy offices, which continue to 
develop what I believe to be job killing regulations.
    We also put a halt to the EPA's clear attempt to legislate 
through regulation on a number of policy issues, including 
greenhouse gases and navigable waterways. It should be up to 
Congress, not the administration, to determine whether and how 
to regulate greenhouse gases, but the litany of overreaching 
regulations does not stop there. Jobs in the cement industry 
are under attack by the Portland Cement Rule. The oil and gas 
industry has been unable to obtain air permits to work in the 
Outer Continental Shelf in Alaska and agriculture is under 
attack as EPA considers whether or not to regulate farm dust.
    The coal industry, which is of great importance to Chairman 
Rogers, is under attack on multiple fronts, whether it is where 
industry can place a mining fill materials, whether coal ash 
may now be labeled as hazardous waste, or whether a company may 
be able to use existing permits to work in Appalachia and keep 
mines open. We put a hold on all of these regulations and the 
House passed the CR in order to relieve the burden on industry 
and to give our authorizers the opportunity to address these 
issues in a more comprehensive fashion this year.
    EPA's 2012 budget request provides $8.973 billion, a 12.9 
percent decrease from the 2010 enacted level. Generally 
speaking, the EPA 2012 budget is balanced on the back of States 
as State grants have been reduced by 22 percent while EPA 
operations and research budgets have received only a 2 to 4 
percent reduction in order to reduce spending by $1.3 billion 
from current levels.
    The 2012 budget cuts $947 million from the Clean Water and 
Drinking Water State Revolving Funds, $125 million from the 
Great Lakes Restoration Initiative, $70 million from the 
Superfund Program, which cleans up the most toxic hazardous 
waste sites and eliminates $179 million for earmarks as every 
administration does. This is not the blueprint for reduced 
Federal spending and debt reduction that the American people 
and Congressional Republicans are demanding. In stark contrast, 
we cut more spending out of the SRFs in the House passed full-
year CR than has been proposed in your entire 2012 budget.
    The demand for 2012 is simple, spend less and regulate 
less. Furthermore, I question the rationale for some of the 
2012 proposals, most notably eliminating the diesel emissions 
reductions grants to retrofit old diesel engines while 
proposing new start programs to regulate greenhouse gases.
    I am not sure it makes sense to eliminate a grant program 
with clear, proven, quantifiable benefits in favor of new 
programs with no demonstrated benefits. I am also not sure that 
it makes sense to eliminate a grant program with broad 
bipartisan support and the support of the States and industry 
in favor of climate change initiatives that you know are most 
likely dead on arrival in the House. As my good friend and 
colleague Mr. Calvert said on the floor during the CR debate, 
the DERA Program is a win-win. So either the President is 
playing politics with his budget or this further illustrates 
that the EPA is simply out of touch. We have a number of issues 
that I know all members are interested in discussing with you 
today.
    So I will save additional remarks for questions following 
your testimony. I am pleased to now yield to our distinguished 
ranking member, Mr. Moran.

                      Opening Remarks of Mr. Moran

    Mr. Moran. Well, thank you very much, Mr. Chairman. I 
really appreciate your commitment to the important programs 
that are contained in this bill. And I certainly want to 
welcome Administrator Jackson and Ms. Bennett, the chief 
financial officer for EPA. You represent the best of our civil 
service. And I don't take that lightly. I mean it, and it is a 
high compliment. The Environmental Protection Agency has worked 
so hard on behalf of all of the American citizens to protect 
the nation's environment and public health. And for that, you 
certainly deserve the praise of all and the appreciation of all 
Americans. EPA's budget request, though, is $9 billion, $1.3 
billion or 13 percent below fiscal year 2010.
    And below the current continuing resolution level. That is 
too low. While I understand that the budget request aims to 
reflect the fiscal constraint, all agencies must operate on, I 
am troubled that most of EPA's reduction comes at the expense 
of the Clean Water and Safe Drinking Water State Revolving 
Funds, as the Chairman has referenced. These funds were 
collectively reduced by $947 million, or 27 percent. But they 
are prudent investments that help maintain the infrastructure 
that makes clean and healthy water available to all Americans, 
which we have all taken for granted.
    I guess when most governors have claimed that the Federal 
stimulus money was wasteful spending, then they won't object to 
a reduction in these important grant programs. What do you 
think? Although I am not sure that is going to be the case, I 
suspect most of the governors are hoping that we will take all 
the heat and yet provide all that money for them. But if we 
don't, I don't see how they come up with it. When I had the 
privilege of chairing this subcommittee last year, I suspect at 
the behest of local and State governments, members from both 
sides of the aisle--and I know the Chairman is aware of this, 
they requested more than 1,200 projects, just in fiscal year 
2010, for water and wastewater infrastructure. That source of 
funding has now dried up. It is gone.
    So you make the cuts to the State revolving funds a much 
larger issue for State and local governments. With a reduction 
in the Federal commitment, I don't know who tackles these 
problems. Certainly individuals can't do it unless they want to 
start digging wells in their backyard, and we go back to 
outhouses or something. Because the State and local governments 
don't have the money themselves. But this is our national 
plumbing system. And like our home plumbing, it doesn't get 
noticed until it backs up and makes a mess.
    Cutting billions from Clean Water and Safe Water Drinking 
programs is ignoring a problem that will require much more 
expensive investments and upgrades to our water sources down 
the line. While the Appropriations Committee has the authority 
and the duty to exercise Congress' constitutional role in 
providing funds to the executive branch, the appropriation 
bills have become ground zero for contentious policy debates.
    I ask the distinguished gentleman from Kentucky if he 
remembered that quaint phrase, ``this is out of order because 
it is legislating an appropriations bill.'' I didn't get a full 
response, but I know he is fully aware of this issue. The full 
year continuing resolution we call H.R. 1 included 22 
amendments that were hostile to EPA's and other government 
agencies' current work on climate change, wetlands, air toxics, 
renewable fuel standards and mountain-top mining. And most of 
them were adopted on the House floor. Beyond this, several 
riders were included in the base bill, one would stop EPA from 
updating rules or guidance pertaining to the definition of U.S. 
waters that will perpetuate delays in permits and land use 
decisions.
    We are hearing from a number of people in the private 
sector saying, look, this is not helpful, we need to have 
clarity, we need to know what is appropriate or not. A lot of 
the builders are saying we can't move forward until we have 
clarification and permits that allow us to do our work. The EPA 
needs to be allowed to carry out the laws and the Congress and 
the courts have authorized them to carry out. The Bush 
administration's EPA administrator, as well as you, Ms. 
Jackson, determined that greenhouse gas emissions do, in fact, 
endanger the health of our citizens.
    Ms. Jackson, you have done your job, and you actually 
issued an endangerment finding, and thus you are now required 
as we know to regulate these harmful emissions. The law 
requires you to. If Congress no longer wants certain pollutants 
cleaned up to improve America's health, then Congress should 
change the underlying law, not simply stop funding EPA. 
Otherwise, EPA is violating the law by not enforcing it.
    And actually, if you want to cut costs in this country, 
then you should allow the Clean Air Act to do its job. A report 
released Tuesday by EPA estimates that the benefits of reducing 
fine particles and ground level ozone pollution under the 1990 
Clean Air Act amendment will reach $2 trillion in 2020, while 
saving 230,000 people from early death in that year alone.
    230,000 people in one year will live longer because of the 
Clean Air Act. It is still my hope that this committee will 
refrain from controversial policy riders and leave these issues 
to the authorizing committees where they belong so that we can 
return to the bipartisanship that has defined the 
Appropriations Committee in previous years.
    I am glad we have been joined by Mr. Dicks. I know he feels 
strongly about this as I do. On this side of the aisle, we are 
going to continue to try to pursue that tradition because it is 
time we started enacting our appropriation bills. We understand 
that the more we work together, the better chance these bills 
have in moving forward in the Senate and getting them signed 
into law by the President. So Administrator Jackson, we all 
look forward to receiving your testimony and again thank you 
for your leadership. Thank you, Mr. Chairman.
    Mr. Simpson. Thank you. We are also joined today by our 
chairman of our full Appropriations Committee, Chairman Rogers, 
and I thank him for taking the time to contribute to this 
important conversation. Mr. Rogers, do you have an opening 
statement?

                     Opening Remarks of Mr. Rogers

    Mr. Rogers. Thank you, Mr. Chairman. And congratulations, 
by the way, on your elevation to this great post. We know you 
will do a great job. This is truly a historic time. I don't 
need to remind us that the Nation has found itself at a 
crossroads. The 112th Congress has been solely focused on 
reining in out of control spending, getting our economy back on 
track and putting Americans back to work. It is all about jobs. 
I reiterate, getting our economy back on track to create jobs 
and provide opportunity. With unemployment still hovering 
around 10 percent under this administration, this is 
unquestionably our top priority as a country and our chief 
responsibility as legislators, policymakers and yes, 
administrators.
    Chairman Simpson alluded to some of our concerns about your 
$9 billion budget submission. The EPA's third largest in 
history. While we are borrowing 42 cents on every dollar we 
spend, we are borrowing 42 cents on every dollar of the 9 
billion that you are asking for. That staggering figure is, in 
and of itself, disconcerting. But I have to tell you for the 
record that I am not confident that the budget you are 
defending today, or frankly your Agency's actions in the last 2 
years align with our important goals of creating jobs and 
opportunity.
    In fact, I believe you have been a great hindrance. The EPA 
is headed in the wrong direction with an aggressive and 
overzealous regulatory agenda that far exceeds the authority of 
this Congress that you have been given. And I think we have a 
responsibility to rein you in. The Committee on Oversight and 
Government Reform recently released a report identifying over 
60 regulatory actions recently taken by EPA that could have 
negative impacts on job creation, 60 different ones. I have to 
wonder whether you are taking heed of the President's January 
21st executive order to account for the cumulative costs of 
regulations because EPA is running absolutely roughshod over 
our country's small businesses. The very engines that propel 
our economy forward and provide most of the jobs.
    And you have hit every sector of the economy, agriculture, 
manufacturing, construction, transportation and the lifeblood 
of my region of the country, Appalachian coal miners, 
wrongheaded greenhouse gas regulations, so-called guidance on 
surface mining, the retroactive veto of a coal permit that has 
undergone more than a decade of environmental review, reopening 
a longstanding definition of ``fill material'' that could have 
devastating impacts on the mining sector nationwide.
    All represent constitutionally dubious legislation by 
regulation. I think you have exceeded your authority by far. A 
number of these matters are being adjudicated by the courts 
even as we speak. We have corresponded, you and I, on a number 
of these topics. So you are aware that my people feel like EPA 
has taken dead aim at an industry that sustains 20,000 high 
paying jobs in my State of Kentucky and supplies the fuel to 
power 50 percent of our Nation at a low cost. Our Speaker, in 
recent weeks, has reiterated the need for adult conversations 
about the fiscal challenges that confront the country and I 
hope that is what we can accomplish here today, an adult 
conversation. Thank you, chairman.
    Mr. Simpson. Thank you, Chairman. The Ranking Member of the 
full committee, the former Chairman of this subcommittee, 
Congressman Dicks, is also here today. I know these issues 
remain of great interest to him. Mr. Dicks, do you have an 
opening statement?
    Mr. Dicks. Yes, I do. Thank you, Mr. Chairman. And 
congratulations on you becoming chairman. And being from the 
Northwest, I know we will work hard together to get some 
positive things done. I want to welcome Administrator Jackson 
and Barbara Bennett, EPA's chief financial officer. In fiscal 
year 2010, this committee provided you with the largest budget 
in EPA history. Your current budget request of 8.9 billion is a 
reduction of 13 percent and reflects the fiscal restraints we 
find ourselves in today. I am glad to see that Administrator 
Jackson submitted a reasonable budget request that will allow 
essential environmental cleanup and monitoring.
    That is in stark contrast to the long-term continuing 
resolution approved by the House 2 weeks ago, H.R. 1. That bill 
cut EPA by nearly 30 percent and includes 22 environmental 
riders to defund EPA and other government agencies' activities 
ranging from limiting greenhouse gases to reducing water 
pollution and those were done without any hearings. They were 
just put into this bill and they are all legislative language 
that have a negative impact.
    I am also pleased that the request includes language 
started by this committee that allows the use of the Drinking 
Water and Clean Water State Revolving Funds for loan 
forgiveness and other affordability tools, green 
infrastructure, water or energy efficiency improvements or 
other environmentally innovative activities. I do, however, 
have concerns about this budget request but not as much as I do 
with H.R. 1. My biggest concern is that we are shifting the 
problems of today for bigger problems tomorrow. We talk about 
saddling our children with debt. That concerns me greatly. But 
by cutting these important environmental infrastructure 
programs like the drinking water and wastewater revolving 
funds, we are saddling future generations with deferred 
maintenance costs and a crumbling infrastructure that will cost 
more to fix than if we did it now.
    Christine Todd Whitman, the former Republican governor of 
New Jersey, when she was administrator of EPA said we have a 
$688 billion backlog on wastewater and drinking water treatment 
facilities. And a group of scientists looked at all of the 
things that happened in civilization and what had made the 
greatest difference in health to the world and it was 
wastewater treatment facilities and clean water. I was on the 
staff up here when Richard Nixon was President of the United 
States and we passed a Clean Water Act, the Clean Air Act, the 
National Environmental Policy Act. And all of those things were 
passed in a bipartisan manner and signed by a Republican 
President. And the country is better today because of 
environmental protection than it was 40 years ago.
    Remember when we had these rivers on fire? Think of how 
terrible those things were. And now we have turned this thing 
around. And I think what you are doing on climate change is 
absolutely essential. Some people are just turning their head 
away from scientific reality and just saying it isn't going to 
happen. They are saying they care about their grandchildren's 
future. If we don't deal with climate change, if we don't deal 
with ocean acidification, the world is going to be a disastrous 
place in 50 to 100 years. And to say this doesn't exist is just 
preposterous. The best scientists in the world have said this 
phenomenon is going on. Our committee held hearings. We asked 
the Park Service and the Fish and Wildlife Service and the 
USGS, can you tell us on the ground, can you see manifestations 
of global warming already and they said, ``yes''. The fire 
seasons are longer, the oceans are rising.
    We are having more drought, more bug infestation because of 
this. We are watching what is happening in the Arctic. I don't 
know how people don't understand the importance of these issues 
and addressing these issues. And I am not--I am going to fight 
every step of the way against efforts to weaken and take back 
the environmental improvements we have made starting with 
Richard Nixon and the Congress back in the 1960s and the 1970s 
when people worked on a bipartisan basis and cared about the 
environment.
    These riders have got to go. And we are going to fight them 
to the end. Don't be intimidated. You are doing your job and 
you have to do it under the law. And the Supreme Court said you 
had to do certain things. And don't be intimidated. Do your 
job. Thank you, Mr. Chairman.
    Mr. Simpson. Thank you. I appreciate that. And again, thank 
you for being here this morning, Administrator Jackson. And we 
look forward to your proposed 2012 budget. And after those warm 
welcoming remarks from all of us, the floor is yours.

                   Testimony of Administrator Jackson

    Ms. Jackson. Thank you, Mr. Chairman. And good morning to 
you, Ranking Member Moran and members of the subcommittee. 
Thank you for inviting me to testify about President Obama's 
fiscal year 2012 budget request for the Environmental 
Protection Agency. Congress enacted the Clean Air Act, the 
Clean Water Act and America's other bedrock environmental 
protection laws on a broadly bipartisan basis. It did so to 
protect American children and adults from pollution that 
otherwise would make their lives shorter, less healthy and less 
prosperous. It did so to make the air and drinking water in 
America's communities clean enough to attract new employers. It 
did so to enable America's local governments to revitalize 
abandoned and polluted industrial sites. It did so to safeguard 
the pastime of America's 40 million anglers. It did so to 
protect the farms whose irrigation makes up a third of 
America's surface fresh water withdrawals. And it did so to 
preserve the livelihoods of fishermen and America's great 
waters, such as the Chesapeake Bay and the Gulf of Mexico.
    Mr. Dicks. Don't forget Puget Sound.
    Ms. Jackson. And Puget Sound. And the Great Lakes. Congress 
gave EPA the responsibility of implementing and enforcing those 
laws, and each year Congress appropriates the money that makes 
EPA's implementation and enforcement work possible. As head of 
the EPA, I am accountable for ensuring that we squeeze every 
drop of public health protection out of every dollar we are 
given. So I support the tough cuts in the President's proposed 
budget, but I am equally accountable for pointing out when cuts 
become detrimental to public health. Without adequate funding, 
EPA would be unable to implement or enforce the laws that 
protect America's health, livelihoods and pastimes.
    Big polluters would flout legal restrictions on dumping 
contaminants into the air, into rivers and onto the ground. 
Toxic plumes already underground would reach drinking water 
supplies because ongoing work to contain them would stop. There 
would be no EPA grant money to fix or replace broken water 
treatment systems and the standards that EPA has set to 
establish for harmful air pollutants from smokestacks and from 
tailpipes would remain missing from a population of sources 
that is not static, but growing.
    So if Congress slashed EPA's funding, concentrations of 
harmful pollution would increase from current levels in the 
places Americans live, work, go to school, fish, hike and hunt. 
The result would be more asthma attacks, more missed school and 
workdays, more heart attacks, more cancer cases, more premature 
deaths and more polluted waters.
    Needless to say, then, I fervently request and deeply 
appreciate continued bipartisan support in Congress for funding 
the essential work that keeps American children and adults safe 
from uncontrolled amounts of harmful pollution being dumped 
into the water they drink and the air they breathe. President 
Obama believes that our Federal Government must spend less 
money. Decreasing Federal spending is no longer just a prudent 
choice, it is now an unavoidable necessity. Accordingly, the 
President has proposed to cut EPA's annual budget nearly 13 
percent from its current level. That cut goes beyond 
eliminating redundancies. We have made difficult, even painful 
choices. We have done so, however, in a careful way that 
preserves EPA's ability to carry out its core responsibilities 
to protect the health and well-being of America's children, 
adults and communities.
    You have been reviewing the budget request for more than 2 
weeks now, so I will not march through all of its details. 
Rather, than I would like to provide just a few examples of the 
difficult choices we have made while preserving fundamental 
safeguards. This request provides $2.5 billion, a decrease of 
947 million for the Clean Water and Drinking Water State 
Revolving Funds. Future year budgets for the SRF will adjust, 
taking into account repayments to the funds. EPA, the States 
and community water systems will build on past successes while 
working towards the fiscal year 2012 goal of ensuring that over 
90 percent of the population served by community water systems 
receives drinking water that meets all applicable health 
standards.
    This budget requests an additional $6.4 million to conduct 
integrated pilot projects in several communities, including 
disadvantaged ones to evaluate and reduce risks from toxic air 
pollution through regulatory enforcement and voluntary efforts. 
An additional $3.7 million will improve our monitoring of toxic 
air pollution and our dissemination of that data to State, 
local and tribal governments and to the public. The budget 
contains $350 million for programs and projects strategically 
chosen to target the most significant environmental problems in 
the Great Lakes ecosystem. That represents a cut of $125 
million from fiscal year 2010, which was the first year of the 
initiative. We will implement the most important projects for 
the Great Lakes restoration and achieve visible results. With 
this budget, $16 million investment in enhancing chemical 
safety initiatives, we will take action to reduce chemical 
risks, increase the pace of chemical hazard assessments and 
provide the public with greater access to information on toxic 
chemicals. We will use the funds to implement chemical risk 
reduction steps that address impacts on children's health and 
on disadvantaged, low-income and indigenous populations. Thank 
you, Mr. Chairman. I look forward to the subcommittee's 
questions.
    [The information follows:]

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                           H.R. 1 AMENDMENTS

    Mr. Simpson. Thank you. I appreciate again your being here 
today. Because of the interest in this, we are going to try and 
enforce, to the extent possible, the 5-minute rule. We have a 
timer up here and we will keep time with that so that we can 
have several rounds of questions if that is possible. First let 
me just make a general comment and question. During the debate 
on H.R. 1 that has been mentioned up here by just about 
everybody, we talked about authorizing on an appropriation 
bill. Most of these amendments were limiting the funding to be 
used for certain things, which is appropriate within an 
appropriation bill. I also noticed after all of the criticisms 
about some of the underlying riders, if you will, that were 
greenhouse gas provisions and that dealing with navigable 
water, I don't remember any amendments being offered by anyone 
to remove those from the bill.
    If they were such a concern to the Ranking Member of both 
the full committee and this subcommittee that maybe there would 
have been an amendment to remove those. But I didn't see any of 
those and I wonder why that was. And I think you and I have 
discussed many times the concern I have about what I hear when 
I go home, not just from businesses that are trying to operate 
and trying to do the right thing, they don't want to pollute 
the air and water, but from cities, counties, State government 
and others about the concerns about the direction that the EPA 
has gone.
    And I have always wondered if it was just in my region, or 
it was across the country. And I have got to tell you, in all 
honesty, I was surprised by the number of amendments that were 
offered that addressed the EPA concerns from people all over--
representatives from all over this country, and I am wondering 
after that debate and the 22 amendments, if any other agency 
had that many amendments directed at them or their actions, if 
you will. I am wondering what message you took from that.
    Ms. Jackson. Sir, there have been a number of discussions, 
some of them on the Hill, some of them outside in the 
countryside. I spend a lot of my time meeting with people and 
dealing with people around the country. And I think 
overwhelmingly there are also some other truisms that haven't 
come out yet and that is that the American people believe that 
EPA plays a very valuable role in safeguarding the health of 
their families and their communities.
    Mr. Simpson. I don't think anybody disagrees with that.
    Ms. Jackson. And that the American people believe that the 
Clean Air Act, the Clean Water Act, other things like the Safe 
Drinking Water Act, our environmental laws are there to protect 
them from polluters who otherwise would not have any controls 
on them. And last but not least, that the American people 
believe that there are lots of laws on the books that aren't 
enforced. And when they look at something like the Deep Water 
Horizon spill or other environmental catastrophes, they say we 
are not sure we need new laws, we need people to enforce the 
laws that are on the books and protect our air and water 
quality.
    So while I have great respect for the deliberations of this 
body, of course, and I am happy to sit down and meet with any 
of the members individually or together. I think we must also 
bring back to bear as we look at what is the appropriate role 
of an independent agency.

                            NAVIGABLE WATERS

    Mr. Simpson. When you look at, as an example, navigable 
waters, the attempt there was to prevent the EPA from expanding 
the definition of what waters are regulated by EPA under the 
Clean Water Act to all waters of the United States. It is not 
as if those waters are not regulated at all. They are, in fact, 
regulated by the States. And now the EPA, by removing 
navigable, or attempting to remove navigable, expands what EPA 
controls instead of the States. And that is the problem and 
that is what concerns me and many other people.
    Ms. Jackson. Mr. Chairman, that is not the intent. Almost 
all of the States, about 46, I believe, implement the Clean 
Water Act under delegations from EPA. So EPA has a couple of 
roles there. The first is to ensure some uniformity so that the 
playing field is level for businesses and for citizens across 
the country. And the second is to look at issues that are 
regional. So when we look at the confusion and we see genuine 
confusion right now about what is covered jurisdictionally 
under the Clean Water Act and what is not. That confusion stems 
in part from two Supreme Court cases that are a bit murky in 
terms of when you put them together what they mean.
    One of the things the EPA can and should do is offer 
clarity within the law. We are not looking to change the law, 
and we are not looking to change the Supreme Court's ruling; we 
respect them both. But we can certainly, I think, use our 
expertise to offer clarity to protect headwaters. If you don't 
protect headwaters, then the waters downstream will most 
certainly be polluted.

                             EPA WORKFORCE

    Mr. Simpson. I would suggest that the States do a good job 
of that in most areas. And I don't want you out controlling and 
regulating drainage and irrigation ditches in Idaho, frankly. 
The State of Idaho can do that. Let me ask another question. We 
heard from the Inspector General yesterday, that one of the 
problems with the EPA's workforce alignment--and this has been 
kind of an ongoing problem that the workforce hasn't been 
aligned with the roles and missions and goals of the EPA. This 
is a management issue. Where are you on that and what is your 
take on that recommendation or that concern by the GAO?
    Ms. Jackson. Well, I certainly appreciate the management 
challenge of constantly working to improve our workforce 
allocation and planning. I disagree with some aspects. Frankly, 
I believe that the most effective workforce planning has to be 
local. We have moved around in the last budgets, the ones that 
I have been involved in, our agency talent to address concerns. 
When we look at cuts to programs, what we are reflecting is a 
need to move talent around. I think that we have to manage our 
people efficiently. And I disagree with the IG that we aren't 
doing that right now. And I also think we have to work closely 
and realize that some of our tools, the 1982 position 
management system, I don't believe we should be going back to 
try to make a new one.
    I think we should look at the programs we have right now 
and do as we have done, which is constantly strengthening our 
capabilities and working within a strategic planning process, 
that we have given real time and attention to make sure our 
resources match up with our priorities.
    Mr. Simpson. But the GAO disagrees with you.
    Ms. Jackson. I think they do in part and I don't want to--I 
don't want to say that I don't agree with them, that it is 
important to manage people effectively. I certainly believe we 
have done that consistent with OPM guidelines, but we probably 
have some differences in terms of management of the Agency. And 
I believe that the local management of resources, whether here 
or in the programs or adjustments that we make as part of our 
strategic planning has done a lot of that work.

                  STATE REVOLVING LOAN FUND REDUCTION

    Mr. Simpson. Another question. During the debate on the CR, 
we were criticized as undermining and destroying the State 
revolving loan fund because we took it back to the 2008 level, 
about a $2 billion reduction in the Clean Drinking Water Fund 
and the State Revolving Loan Fund. Your proposal decreases it 
by about $1 billion. Are you destroying the revolving loan 
fund?
    Ms. Jackson. Half as much as you.
    Mr. Simpson. So you are destroying it? Is that right? You 
are destroying it?
    Ms. Jackson. Destroying, I don't know what that word means. 
We will be doing half as many cuts as is proposed in CR 1. And 
that was a tough decision. It is made based on the fact that 
when we are being asked to cut back, we do know that there is 
still some money that will hit the streets from the Recovery 
Act. It has almost all been obligated, but it hasn't all been 
spent.
    Mr. Simpson. How much has been obligated but unspent? It 
was supposed to be spent two years ago, at least shovel ready 
projects.
    Ms. Jackson. It is within the States. These are contracting 
issues. I think it is all under contract. But the obligation, I 
think, is close to 100 percent. The actual spending, I think, 
might be around 60 percent.
    Mr. Dicks. Mr. Chairman.
    Ms. Jackson. 75 percent.
    Mr. Simpson. Why did you decide $947 million in reductions 
of the State Revolving Loan Fund? Where did that number come 
from?
    Ms. Jackson. The number was designed to reflect a 
significant cut, but to try to keep us above the last Bush 
budget which we felt was so low that we increased it in both 
the Recovery Act as well as in our fiscal year 2010 proposal. 
So we are at $2.5 billion for the two combined funds. That is 
still higher than we saw before the President's administration.

                           UNOBLIGATED FUNDS

    Mr. Simpson. In the Recovery Act, you got essentially six 
years worth of 2008 funding levels for the State revolving loan 
fund. As most of it is obligated, some of it, I think about a 
billion and a half or something like that, is unspent yet but 
it is obligated. There is still about $1.47 billion in 
unobligated funds from last year that are unobligated for the 
State Revolving Loan Fund in last year's appropriation. And is 
the reduction due to the fact that we have all of the 
unobligated funds sitting out there? That is what we looked at 
frankly when we were looking at H.R. 1 and trying to reduce the 
overall budget. We were trying to find savings. Because believe 
it or not, I know there is a lot of people in government that 
don't believe this, a lot of people here in Congress that don't 
believe this, but the fact that we have a $1.6 trillion deficit 
is an issue and we have to reduce spending. And is that how you 
decided to come up with the $1 billion, is that you had all of 
these unobligated funds from last year?
    Ms. Jackson. I certainly think that is something worth 
considering, Mr. Chairman. I don't disagree with you that we 
can look at the money that is on the street. It is very much a 
pipeline, though. So having run a State agency, having seen how 
funds work--these are revolving funds. The money goes out in 
loans to local governments, to municipalities, to small 
systems. And if it is not forgiven, and in some cases it is, 
then it comes back in.
    So our goal over time will be to fund about 5 percent of 
the need annually through a combination of direct 
appropriations and paybacks. But this is a tough year and we 
recognize that in a tough year, we may not be able to fund the 
5 percent we would like to. So it is a cut. It was simply 
intended not to be as drastic a cut as has been discussed in 
the House.
    Mr. Dicks. Mr. Chairman, just briefly.
    Mr. Simpson. Sure.
    Mr. Dicks. On this revolving fund, some of the newer 
members may not realize, this money goes back to the States and 
these funds are loaned out and then they are paid back to the 
revolving fund. So from time to time, if you increase the 
revolving fund funding, they can make more loans and they get 
money coming back.
    So you can make a reasonable cut here. There is no question 
about that because we added a lot of money in the stimulus bill 
for these revolving funds.
    The other thing that the committee agreed to and you as 
ranking member helped on this, was that some of the money can 
be forgiven for the low-income communities. What I worry about 
is now that we have taken away earmarks for STAG grants, a lot 
of these poor communities are going to have a hard time doing 
the projects without some grant money. So I hope we can figure 
out a way and maybe the Department has already done this, of 
putting a pot of money together that will be competed for 
across the country by low-income communities to do projects 
that will help them deal with their problems. If not, they 
simply will not do the projects.
    That is the reality of it and the environment will suffer 
from it. But I just wanted to give that little history.
    Mr. Simpson. I will have some more questions in the second 
round. Mr. Moran.

                      RULE: COST-BENEFIT ANALYSIS

    Mr. Moran. Thanks very much, Mr. Chairman. Administrator 
Jackson, you have testified that from 1990 through 2020, the 
benefits of implementing the Clean Air Act are projected to 
exceed the costs by a factor of 30 to 1. We also have EPA's 
current report that the Clean Air Act will save $2 trillion by 
2020. The growing talking point that we heard on the House 
floor and so on from the other side is that the EPA's 
regulations are destroying the economy when we, in fact, have 
seen quite the contrary. Back during the Clinton 
administration, Carol Browner made very serious strides in 
cleaning the environment by issuing rules on the ozone, air 
toxics from the chemical industry, refineries industries, et 
cetera. And yet with all of that environmental protection, 
regulation, the economy grew at an unprecedented rate during 
the Clinton administration. Twenty-three million new jobs, 3 
successive years of surpluses.
    So the point is we achieved substantial surpluses while 
very actively enforcing the Clean Air and Clean Water Acts. 
Now, Administrator Jackson, could you walk us through your 
Agency's cost-benefit analysis? Because it does seem to me that 
it is at the heart of whether this is a prudent investment or 
not.
    Ms. Jackson. Certainly, sir. Of course we have to do these 
analyses every time we do a rule. The Clean Air Act, a report 
that you cited, talks about $2 trillion in benefits by 2020. In 
2010 alone, 160,000 cases of premature mortality avoided, 
130,000 heart attacks avoided, 13 million lost workdays 
avoided. Certainly an economic impact. 2.4 million asthma 
attacks.
    So essentially, there are two ways the environmental 
regulations help the economy, not hurt it. The first is it is 
preventive medicine. It is as though we took all of those 
health care costs, however they are borne through our economy, 
and zeroed them out and said now spend all that money that you 
would have spent dealing with your asthmatic child or your own 
heart disease issues and put it into the economy, spend that 
money somewhere.
    And the other way is, I think it is now generally accepted 
that the air pollution control sector of our market is a world 
leader. It is net positive in our U.S. trade balance. It 
generates $11 billion surplus in our trade balance. We export 
air pollution control commitment to countries like China who 
need it because we have invested and have the resources, 
innovation and expertise in this country and have stepped up to 
deal with air pollution as a challenge.
    Mr. Moran. Thank you. I have got this information. Boy, we 
have wonderful staff. I don't know what we would do without 
them, Mr. Chairman. They are so good. But it turns out that the 
Bush administration did an analysis; they thought the results 
were going to be that the regulations were more costly than the 
benefit, but in fact, the health benefits alone were 
substantially greater than the cost of a ratio from 16 to 1. 
From 1997 to 2007, the Bush White House estimated that EPA 
regulations promulgated during those years cost between $32 and 
$35 billion, but the health benefits alone were between $83 
billion and $592 billion. So interesting.

                             CHESAPEAKE BAY

    Let me ask one other particular question here on the 
Chesapeake Bay, if I could. You mentioned the Chesapeake and 
the Puget Sound, of course, and the Great Lakes. I will mention 
the Puget Sound again when Mr. Dicks is paying attention. But 
you got a request for $67 million. It is an increase of $17 
million. We have got six States and the District of Columbia 
working on this because we lost so many jobs in crabbing, 
fishing, tourism and so on. So you are aware, I am sure, my 
colleague from Virginia, Mr. Goodlatte sponsored an amendment 
that passed the House to stop Federal funding for the cleanup 
of the Bay. His reasoning was that the total maximum daily 
loads take control away from the States. He claimed the States 
were making progress, even though it has taken more than 2 
decades to get to this point, and, of course, the Bay isn't 
clean. What prompted EPA's issuance of the total maximum daily 
load standard? And if the Goodlatte amendment was included in 
the final appropriations bill, how much of that $67 million in 
EPA funds would localities lose out on in terms of their 
efforts to clean the Bay?
    Ms. Jackson. TMDL, the total maximum daily load, the 
pollution diets in the Bay, was a result of lawsuits which were 
basically joined by the Chesapeake Bay Foundation and others 
who said that our progress was woefully inadequate on meeting 
the goals that had been set by EPA for improvements in the Bay. 
We have seen some slight improvements, but I don't think--I 
would not characterize it that we have turned the corner on the 
issues we have. And the TMDL is meant to assign to each State a 
load. It is your diet, here is how much pollution you can put 
into the Bay and still see the Bay improve. That is our job. It 
is a regional approach.
    Then it relies back on the States through what are called 
watershed implementation plans, WIPS, to meet those numbers. So 
we are not, every day, working inside the States. The States 
are. I want to salute the States that have really taken a 
leadership role and stepped up to come up with these watershed 
implementation plans. The $67 million is a $17 million plus-up, 
about 60 percent, almost two-thirds of it, goes back to the 
States in support of those watershed implementation plans.
    We are also working very closely with USDA, because as you 
might expect, agriculture is a significant player, not the only 
player here. So States have really done an amazing amount of 
technical work, and I would hate to see us lose time on the 
Chesapeake Bay.
    Mr. Moran. Thank you. Mr. Chairman, I have got a number of 
questions on greenhouse gases, but I suspect we want to try to 
get everybody in the first round. We are going to have other 
rounds so I will yield back. Thank you.
    Mr. Simpson. Thank you, Mr. Chairman.

                APPALACHIAN SURFACE COAL MINING PERMITS

    Mr. Rogers. Thank you, Mr. Chairman. In June 2009, EPA 
signed a memorandum of understanding with the Corps of 
Engineers and the Interior Department to ``reduce the harmful 
environmental effects of Appalachian surface coal mining.'' And 
in conjunction, EPA then later released what was called 
guidance, which puts in place unachievable thresholds for water 
quality measurements, which everyone but you believes are 
arbitrary and based on unsound science. Preempted, well-
established State water quality programs target only coal 
mining, specifically Appalachian coal mining when the Clean 
Water Act applies to industries such as road construction, 
development, farming, construction and the like.
    A Senate committee told us that these so-called guidances 
are ``having a deleterious effect on rural jobs, energy 
production and small businesses in Appalachia.''
    One hundred and ninety permits were expected to produce 2 
billion tons of coal, support over 80,000 jobs and 81 
businesses, and yet the 190 applications have been practically 
all denied. Only six permits issued since 2009. One company in 
my district still doesn't have a permit after wading through 3 
Army Corps colonels, at least 6 EPA reviewers. They have 
invested an additional $1.5 million to deal with the EPA 
regulatory hurdles, and the longer the permitting process 
takes, the higher these costs become. On average, coal 
companies can expect to pay 2 to $3 more per ton to mine coal 
with a 5-year permit process. And guess who pays the cost of 
that? It is the people that use electricity.
    According to your Web site, there are 79 permits that are 
being flagged. The Senate committee says there are 190. 
Whatever. You have only issued six in over 2 years. In your 
budget request, you are asking for more reviewers, I think four 
or five people. Thanks a lot. How much faster will these people 
be able to process these permits through their regular order?
    Ms. Jackson. I cannot commit to a time frame, sir. We are 
working very diligently on those permit requests.
    Mr. Rogers. Who is working on them?
    Ms. Jackson. Primarily staff in our regional offices, but 
also staff in our Washington office.
    Mr. Rogers. Can you explain why there have only been six 
permits issued out of 190 applications in over 2 years?
    Ms. Jackson. The enhanced coordination process covered 
approximately 79 permits. We are down to, I think, two to three 
dozen permits, many have been withdrawn, a few have been 
issued, and many have gone back and are working diligently 
through the State and through EPA, as mentioned in your State, 
Mr. Chairman, to try to find ways to reduce the environmental 
impacts.
    This is about clean water and impacts on water. And, sir, I 
have to say that this is not unscientific at all. It is the 
result of peer reviewed studies that have gone through both 
EPA's scientific advisory board and independent scientists who 
agree that without intervention, there would be irreversible 
harm to waterways in the region.

                          PERMITTING GUIDANCE

    Mr. Rogers. But since the issuance of the so-called 
guidance in June of 2009, you have only issued six permits. 
That is a drastic change, is it not?
    Ms. Jackson. We are not waving permits through. We are 
reviewing them with the States and the Corps of Engineers and 
with the applicants to try to decrease their impact on water 
pollution.
    Mr. Rogers. The question is, it is quite a change.
    Ms. Jackson. Sir, I absolutely agree with you that the 
enhanced coordination has changed the landscape in that part--
--
    Mr. Rogers. And it was a substantive change from prior 
regulations, right?
    Ms. Jackson. It is guidance that has been out for comment, 
and will be finalized quite shortly, I think.
    Mr. Rogers. But the guidance does represent a big change 
from prior regulations, correct?
    Ms. Jackson. Yes, it reflects the latest science that shows 
that the way that permits were being issued was not protective 
of water quality.

                      CLEAN WATER ACT: PERMIT VETO

    Mr. Rogers. And that is why a lot of people are saying that 
when you issued those guidances, you violated the law on how 
you come up with regulations because there were no hearings, 
there was no advance notice, no one had a chance to weigh in on 
this substantive change in your prior regulations and that is 
why you are being sued by the State of Kentucky, the National 
Mining Association, several other States and coal operators on 
the grounds that the guidance constitutes a violation of the 
Administrative Procedures Act, APA, which requires that any 
major changes to existing regulations must go through a formal 
rulemaking process, to include public comment and peer review 
science.
    And in January, the U.S. district court for D.C. ruled in a 
challenge to you on this APA. Violation would ultimately 
succeed on merit. So what do you say about the charges that you 
violated the Administrative Procedures Act?
    Ms. Jackson. Mr. Chairman, I don't agree with them. I 
wouldn't want to violate it. It is guidance. It is subject to 
public comment. In fact, we have just concluded a lengthy 
public comment period and our responsibilities have not changed 
under the Clean Water Act. It is simply a matter of ensuring 
that as these permits are issued, we are not trading future 
water quality for issuance of permits hastily today.
    Mr. Rogers. Now, the coal mining industry that provides 
over half of the power--the electricity around the country, is 
being shaken to its boots because of a ruling that you issued 
in Logan County, West Virginia, where you repealed 
retroactively a mining permit and shut down a mine even though 
they had been granted a permit previously by the Corps of 
Engineers in 2007 after a 13-year, 1,600 page environmental 
review by State and Federal agency, including EPA, you said it 
is okay, you got the permit. Three, four years later, you come 
back in and say we are going to revoke your permit. Now, every 
construction company that is building highways, every coal 
mining company and everybody that does the business that has to 
be done is unsure of themselves. They are--and it is having a 
very destabilizing impact on this industry. Where do you 
think--where do you claim to have the authority to 
retroactively go back and undo a permit that has already been 
issued for several years?
    Ms. Jackson. Mr. Chairman, respectfully, I think it is 
inaccurate to say there is a retroactive undoing. EPA has the 
authority under the Clean Water Act to veto a permit issued by 
the U.S. Army Corps of Engineers if we believe it is not 
protective of water. That is what the Clean Water Act says on 
its face. The reason the Spruce permit has been hanging around 
since 2007, is that it was in litigation. When it was issued by 
the U.S. Army Corps of Engineers, not with the concurrence of 
EPA, and in fact, without taking into account significant 
comments by EPA, it was litigated.
    And in the course of that litigation, EPA was asked to 
determine whether or not--EPA had to determine--we were not 
asked to, we had to determine whether or not we would stand 
behind a permit that we did not agree with and instead we chose 
to use our veto authority under the Clean Water Act.
    Mr. Rogers. But the permit issued by the Corps in 2007 had 
approval of EPA.
    Ms. Jackson. No, sir. No, sir. The EPA commented on several 
versions of the permit discussions. And I know the permit 
applicant has said over and over again that we approved, but we 
did not. Our comments were taken, many of them were not 
addressed, and the final permit issued by the Corps, in our 
opinion, was not protective of public health and not protective 
of the water quality, not consistent with the language of the 
Clean Water Act and I do admit that that is being litigated.
    Mr. Rogers. I guess you noticed that during the debate on 
the CR a couple of weeks ago, 240 Members, bipartisan, voted to 
strip EPA of your authority to retroactively veto existing 
permits. I don't guess you noticed that.
    Ms. Jackson. Sir, of course I did. I certainly noticed the 
vote.
    Mr. Rogers. Well, I am sure there are others who want to 
ask questions.
    Mr. Simpson. Thank you, Mr. Chairman. Ranking Member Dicks.

                              PUGET SOUND

    Mr. Dicks. Administrator, again, welcome.
    One of the things I just wanted to bring up was, I think we 
are making some real progress in the State of Washington on the 
Puget Sound Geographic Program. I appreciate the fact that 
there is money in the President's budget for this program. I 
wish it were at the higher level that Congress had approved, 
and I just want you to know that we have developed in 
Washington State an action agenda, a scientifically credible 
plan for restoration. And it really depends now on being able 
to get State and Federal funding to make this thing work. I 
know that the administration has a tremendous interest in the 
Chesapeake Bay, but you know, the difference in funding between 
the Chesapeake Bay--not the Chesapeake Bay, but the Great 
Lakes. And I wish--I wish they had a similar positive view of 
the Chesapeake Bay and Puget Sound.
    We feel like we are the orphans here. And these are two 
extremely important bodies of water. It has been obvious that 
the administration can't spend all the money that has been 
given to the Great Lakes. I mean, it is just not going out the 
door. I just hope, one, that you will insist that both the 
Great Lakes and the Chesapeake develop an action agenda too. 
They need a scientifically credible plan. EPA now is in charge 
of the recovery in the Chesapeake Bay, and I hope that we will 
take that seriously, and a lot of the run-off issues that have 
been neglected by the States should be addressed. And I know 
you are trying to do that.
    Mr. LaTourette. Will the distinguished ranking member yield 
for a minute?
    Mr. Dicks. Yes, I yield.
    Mr. LaTourette. You are not suggesting to take money away 
from the Great Lakes for Puget Sound, are you?
    Mr. Dicks. Oh, no. That would be wrong.
    Mr. LaTourette. That would be horribly wrong. All right, 
well, thank you. I appreciate that.
    Mr. Dicks. I would just like to see the budget give a 
little more help to Puget Sound. And I would also like to see 
the Great Lakes have an action agenda, a plan. I don't think 
they have a plan yet----
    Mr. LaTourette. We have all kinds of plans.
    Mr. Dicks. Wait a minute--that is scientifically credible 
and verified by independent sources. That is what I think you 
need to do. And that is what we did in the State of Washington.
    Mr. LaTourette. I would just say to the distinguished 
former chairman and now ranking member that when the Puget 
Sound has 20 percent of the world's fresh water, perhaps you 
could make the case and take some money away from us but not 
now.
    Mr. Dicks. But when we have the most endangered species in 
the country in Puget Sound, it also is a priority. All I am 
saying is, let's try to be fair. And the administration's 
budget again I don't think was fair to budget Puget Sound. Now 
Tom Eaton is out there doing a good job. He is working hard. 
But we have been the forgotten party here. It has always been 
the Great Lakes, the Chesapeake Bay, and the Everglades. And 
Puget Sound has been, I think, not as important to the 
administration as it should be. I mean, this is a very 
important body of water. So anyway, I have used my time up. But 
again, we want to work with you on this, but we hope to get 
that budget request up in the future. I think it is totally 
justified. And I think we have done what we need to do out 
there with our action agenda, and the Puget Sound partnership 
is moving forward. So I yield back.
    Mr. Simpson. Mr. Lewis.
    Mr. Lewis. Thank you, Mr. Chairman. I can assure you, Mr. 
Chairman, that with the passion of my colleague, the ranking 
member, Puget Sound will certainly not be forgotten.
    Mr. Dicks. Thank you.

                              AIR QUALITY

    Mr. Lewis. In the meantime, Madam Administrator, Ken 
Calvert and I, the gentleman sitting to my left, represent the 
Inland Empire in southern California. Years ago when I first 
became involved in public affairs, for something over 250 days 
a year, you could not see the mountains that surround this 
valley for almost 360 degrees. It is a beautiful valley. And 
over many a year, many of us have been involved in air quality 
questions because of that.
    Today you can see those mountains almost every day of the 
year. But indeed, I will never forget taking a trip. I spent a 
whole month one weekend in Detroit, to talk to the Big Three 
about air quality questions and what the American automobile 
industry was not doing in terms of improving the impact of auto 
emissions on air quality questions. It was not until foreign 
manufacturers produced cars with better gasoline mileage that 
there began to be a change, and that has contributed 
significantly to the cleaning of our air.
    But also I will never forget that during those years, there 
were voices heard, including my own, that we should be very 
cautious as we go forward with developing regulations and 
policies in the arena of air quality because often times we 
just plain don't know what we are talking about. It is easy to 
point to the big smokestack and say that if we can solve that 
problem, we will solve 95 percent of the problems and so forget 
about the rest of it.
    And you, Madam Administrator, and I know that that 
automobile continues to be the problem. And I would be very 
interested in what EPA is thinking about and what your experts 
are thinking about relative to having a direct impact upon how 
people deal with their own transportation needs. Automobiles, 
et cetera. Please don't talk to me about high-speed rail. That 
is hardly a solution to some of these problems. In the 
meantime, the Air Quality Resource Center, which was then 
located at the University of California at Riverside, helped us 
a lot in trying to deal with some of these problems. I once 
converted a very beautiful and wonderful convertible that I had 
to propane. The car never ran again, by the way. But that was 
by way of legislation that was moving that would suggest that 
we ought to take all automobiles that have a stationary source, 
major pools of cars, and convert them experimentally to propane 
to see what effect it might have.
    The Research Center came to me as that bill was moving and 
said, Jerry, we ought to be kind of cautious about this because 
our research is beginning to show us some things that we didn't 
anticipate, that it would appear that propane, when it goes 
through the combustion process, creates a thing called 
propylene and the emission in that form may be even worse than 
the standard automobile emission that we are concerned about.
    We talk a lot about scientists and research and independent 
peer review, et cetera. But oft times in these arenas, we don't 
know what we are talking about. If we are going to promote 
regulations that dramatically impact people's lives and spend a 
lot of money in doing it, we should know what we are talking 
about.
    Just by way of asking you to comment on that general area, 
let me mention also that back in those days, a community known 
as Chino was in my district. They had the largest cowherds in 
the country. Cows in numbers of 1,000 per farm, et cetera. And 
I note that within your air quality arena, you talk about 
animal gases. I must say, it astonishes me. And I would really 
like to see the background of those experts who talked about 
animal gases for indeed the people of Chino who would wonder 
whether we know what we are talking about. So thank you, Madam 
Administrator, for being here. I would be very interested in 
your thoughts and where you would be taking us by way of 
research and otherwise relative to air quality.
    Ms. Jackson. Thank you, Mr. Lewis.
    Just a few things. I will begin by hailing your State as 
being one of the engines that has driven us towards cleaner 
vehicles in this country. EPA's history with vehicles includes 
things like taking the lead out of gasoline, which I think 
single-handedly made a tremendous difference in children's 
health. But also enabled the catalytic converter which is an 
American invention that is now on cars all over the world that 
has made our cars run cleaner.
    Mr. Lewis. California Legislature, as a matter of fact, led 
the way.
    Ms. Jackson. California has a history of leading the 
country with respect to vehicles, sir. And of course, there is 
a large market. The Clean Air Act actually recognizes 
California's leadership by giving your State a special role.
    I simply would say this, we have probably a million more 
cars on the road than we had in 1970, just in absolute numbers. 
And the emissions from all those cars is much lower than the 
emissions from 1970. That means we are driving more cars, but 
they are much, much cleaner and more fuel efficient. That was 
the genesis of the fuel efficiency greenhouse gas deal, the car 
deal that was worked out last year. And so as cars become 
cleaner, Americans, of course, as the population grows--I have 
two young sons, both who want to be drivers sooner than I would 
like--we need to continue to sort of push that envelope so that 
we make our cars cleaner.
    You asked about research. I am a scientist by training. I 
just recently visited our Ann Arbor laboratory which, sadly, is 
not in the State of California, but is an impressive place. I 
would invite you to see it. But if you ever have a chance to 
see it, you are struck by what an engine of economic 
development that it is. Many of the car companies locate the 
parts of their research lab that deals with emissions near us 
as they do in parts of California because they know that they 
are going to have to design cars that continually ramp down on 
efficiencies.
    The last thing I will say is that with respect to animal 
emissions, I assume you mean greenhouse gas, methane emissions. 
EPA has no plans to regulate such. The number of agricultural 
sources that are even being required to report their greenhouse 
gas emissions is zero. So I know that has been discussed and is 
a source of worry. And I find myself often giving some amount 
of reassurance to people, to ranchers about that matter.

                      AIR QUALITY: MOBILE SOURCES

    Mr. Lewis. Well, Mr. Chairman, I would just kind of add, 
the bottom line there for the administrator, I really want to 
hear from you how you think this committee can help you 
accomplish EPA's mission relative to air quality without overly 
impacting our already very fragile economy. There is little 
doubt that we could take a small piece of the money that some 
people are touting for high-speed rail and at the other end of 
that line, use that money--small piece of money--and buy more 
buses than we would know what to do with to replace that high-
speed rail, move a lot more people and help clean the air in 
that fashion, assuming we could get those engines to operate 
considerably more efficiently. Please tell us how we can help.
    Ms. Jackson. I will be happy to work with you in any way I 
can, Mr. Lewis. I think obviously my colleague, Secretary Ray 
LaHood, your former colleague, I think very, very highly of. 
And I think his work--and EPA is working closely with DOT as he 
looks at the transportation acts of the future, we are happy to 
share with you the information we are sharing with him. I think 
that communities are differently situated when it comes to 
transportation choices. And our interest is simply to ensure 
that we are not going to sacrifice air quality. And my belief 
is, with technological innovations, including mass transit, we 
don't have to do that.
    Mr. Lewis. I haven't thought about asking Ray LaHood to 
talk with you about this. Excuse me, Mr. Chairman, for this. 
But, indeed, those buses at the other end hopefully have 
cleaner driven engines as it were. You could perhaps put 
together a major study to help us change the pattern of what 
people are willing to do in terms of transporting themselves. 
We can buy those buses but we can't get folks to ride in them 
in southern California. It is an incredible challenge, and we 
are a long, long ways away from turning that corner. Thanks, 
Mr. Chairman.
    Mr. Simpson. Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chairman. But representing the 
Great Lake State of Lake Superior, the gentlemen from Lake Erie 
were here first before me. I respect seniority and I respect 
their ability to make my life miserable if I went first.
    Mr. Simpson. Representative Hinchey.

                          HYDRAULIC FRACTURING

    Mr. Hinchey. Thank you very much. I appreciate it. First of 
all, it is a great pleasure, Administrator Jackson, to be here 
with you and to be involved in this situation with you. I want 
to commend you for the courageous way in which you have led the 
EPA and the kinds of things that you have been able to do 
quickly already in the context of the kinds of circumstances 
that you inherited and had to deal with. Your mission is to 
protect human health and the environment, and that is exactly 
what you have been working to do. So I deeply applaud you for 
it. I think your work on the Clean Air Act particularly is 
saving lives, keeping people healthier and, as a result, 
providing enormous benefits across the country, in communities 
across the country and in our economy.
    So, as you know very clearly, we need a strong EPA to 
safeguard our children, safeguard the community, safeguard our 
future. There was a recent series of articles in The New York 
Times which are absolutely fascinating and which are producing 
a significant amount of new information that is presented in 
ways that are more understandable than they have been in the 
past, for many people. And in fact, stories like little or no 
testing for radioactive levels, and the radioactivity of those 
levels can be very important.
    So I just want to ask you a few questions along these 
lines. Along the many issues raised in The Times series was 
that hydraulic fracturing wastewater contains radioactivity at 
levels much higher than previously known. And it is being sent 
to wastewater treatment plants that cannot safely remove the 
radioactive materials. These plants are then dumping this 
contaminated water into rivers and streams and those rivers and 
streams supply drinking water. And as a result of that, there 
is a threat to the health of millions of people. Such material 
such as barium, strontium, radioactive elements, little or no 
testing is going on.
    So I am wondering if there is anything that can be done to 
deal with this. Given these reports, will the EPA, for example, 
order the immediate testing of water from these facilities that 
accept fracking wastes as well as testing at drinking water 
intake systems downstream from these treatment plants?
    Ms. Jackson. Thank you, Mr. Hinchey. I think that EPA is 
very interested in ensuring we get data on radioactivity and 
flow-back water. And the only hesitance I have to say--and 
absolutely yes, we will order the testing--is that I would like 
to have an opportunity to speak to the States involved--
specifically Pennsylvania--who has done some amount of work. I 
actually intend to go tomorrow to our office in Philadelphia to 
have those discussions. But I do believe additional information 
is due the public as a result of that series.
    Mr. Hinchey. Well, I appreciate your saying that. And I 
think that is absolutely true. A lot of these States are doing 
things that are not really strong enough. And Pennsylvania I 
think is one of them. There is an awful lot of drilling going 
on in Pennsylvania and the rapid increase of that drilling is 
going on over the course of the next few years. It is going to 
cause a whole host of problems, particularly if there is no 
oversight as to what is going on. And if you live close to 
Pennsylvania--like, for example, in New York--and you find that 
Pennsylvania is dumping a lot of these radioactive materials 
and other toxic materials into rivers that are on the border of 
your State, then you have got to be concerned about it too.
    Just leaving these situations open to individual States is 
not going to do it. So that is part of it, and I am glad that 
you are very interested in this.

                   EPA STUDY OF HYDRAULIC FRACTURING

    Let me just ask you something else. The narrowing of the 
national fracking study and the squelching of other researches. 
Again, in The Times, they also raise serious concerns about the 
process behind EPA's study on hydraulic fracturing. In general, 
what I believe is that EPA has put forth to the study advisory 
panels that are positive. I commend the Agency for not falling 
into the industry's trap of narrowly defining the drilling 
process, and we are seeing that all over this country in State 
after State where these things are going on. And they are doing 
this--the industry's trap of narrowly defining the drilling 
process because you were able to overcome that because you were 
under some real pressure to do so. However, it is what has been 
left out of the study scope that I would like to discuss, what 
is outside of that study scope.
    According to The Times initial versions of the study scope 
recommended research on a number of dangers, dangers of toxic 
fumes. The risks of contaminated run-off from landfills where 
drilling waste is disposed. Whether rivers can sufficiently 
dilute hazardous gaswell wastewater that is discharged from 
treatment plants and more, a whole host of other things.
    However, the scoping document sent to the advisory board 
late last month included none of these topics, interestingly 
enough. So Agency officials expressed concern about the 
public's reaction if it was discovered that the study scope was 
being narrow and staff were discouraged from putting anything 
in writing about the national study unless vetted by managers. 
So it could not be in the Freedom of Information Act, for 
example.
    One regional administrator apparently instructed his 
subordinates to not spell out their grandest visions about what 
the study should examine, less the public see all of these 
concerns. These are the kinds of things that we know are very, 
very dangerous. And we know there are a lot of activities that 
are going on to try to keep adverse circumstances too quiet.
    Now EPA did have recommendation from Congress on what it 
should study, specifically drinking water. But if the Agency's 
scientists felt there were additional areas to examine because 
of concerns over human health, such as with air emissions, then 
the public and Congress should have been made aware of those. 
Contrary to assertions from the industry, the report language 
was a congressional recommendation, not an order. And EPA had 
the authority to ignore or expand on it. Instead, what we see 
here are deliberate attempts to shield from the public 
additional concerns expressed by EPA's scientists. There is a 
lot of positive things going on by the scientists, particularly 
in EPA under your leadership and under your direction.
    So there are clearly other risks worth examining that have 
come to light since this report language was first drafted in 
June of 2009.
    Shouldn't the public and Congress be made aware of all of 
the concerns EPA's scientists had about the risks that fracking 
poses to public health? Why would EPA managers believe this 
information should be withheld? Why is that? Why would EPA not 
allow these additional topics to be submitted to the advisory 
board? Furthermore, at a January meeting in Washington, 
regional directors were informed that the national study would 
be the only forum for research on hydrofracking.
    While I understand the Agency might want to ensure there is 
no redundancy, there is absolutely no justification to stop 
research outside the scope of this study. So one other issue, 
should the national study be the only forum for research on 
fracking, even if regional offices and other scientists and 
researching risks outside the scope of the study in response of 
public health concerns just keep rising and getting more 
serious?
    Mr. Simpson. Why don't we give the Administrator a chance 
to answer that.
    Mr. Hinchey. Thank you.
    Ms. Jackson. There are several questions. Thank you, Mr. 
Chairman. And thank you, Mr. Hinchey.
    On the issue of the public and Congress having access to 
what we know, absolutely, I have committed the Agency to 
transparency in information. And I would like to point out that 
the issues seem to stem from some concerns that are really 
located in Philadelphia. We have 10 regions. We have 10 
different offices of EPA across the country. The one that 
handles New York is in New York City. I think they have 
submitted strong and principled comments to the State on its 
draft EIS and we await the State's actions on the EIS. Many of 
the States are very involved in this issue. It is affecting 
them now while we do this big study, which is going to take 
about 2 years.
    Texas, we have actually taken enforcement actions there, 
and we are in something of a dispute with the State because our 
belief is that we needed to take those actions to assure 
protectiveness. So I want to first just start by saying we 
believe natural gas is important. It is a homegrown source of 
energy, but it must be sustainably and responsibly produced. 
And future generations shouldn't somehow bear the burden of a 
rush to produce it. We think it can happen, both can happen. 
You asked about withholding information. I just want to clarify 
one thing. The article--the series is very important. But we 
are looking at radionuclides as part of the study.
    So somehow the reporter reports today that that was left 
out of the study. That is not true. But I am sure it is just an 
inaccuracy, something he read. But the study is with our 
science advisory board. We have used a transparent consensus-
based process to scope this study. We expect the science 
advisory board to have a meeting on the study parameters on 
Monday. All of that has been open. We have vetted the people 
who sit on the board to make sure they don't have undue 
conflicts of interest so that we don't have folks later worry 
that the study was somehow skewed. With all those safeguards 
that we have put in place, I am certainly not going to be 
closed-minded to say we don't need to look to make sure we are 
doing everything right.
    So that is why I am going to go tomorrow to Pennsylvania to 
Philadelphia to our office to try to understand what the state 
of play is there. Your last question was about the national 
study. The budget this year calls for $6 million for that 
national study. And I thank Congress for last year or the year 
before--I can't remember--for authorizing it and for your 
leadership in ensuring that we have the study money.
    The only thing I will say is, we have to spend money 
wisely. So I will not say that the national study should be the 
only study, sir. But after a process that open, that 
transparent, that rigorous to try to outline a study, I would 
want my science adviser, my head of research and development, 
to understand what additional work is happening so that we are 
not somehow being redundant. We don't want to stifle science, 
but we want to make sure if we are doing work that we are not 
doing the same work over here.
    I think that is only fair. It is a wise use of money. But 
otherwise, I think we should certainly not be tying the hands 
of our scientists and trying to understand this. While at the 
same time recognizing maybe the article didn't do the greatest 
job of portraying that many States who are used to drilling 
have done significant work in regulating the fracking and 
drilling and natural gas recovery process. States like your own 
have sort of taken a time-out so they can make sure to get it 
right.
    Mr. Hinchey. I deeply appreciate that. If I could respond 
to that briefly.
    Mr. Simpson. Very briefly.
    Mr. Hinchey. I deeply appreciate that, and I know that you 
are doing a lot of things that are very, very important and 
need to be done. But also there is a lot of damage that is 
taking place right now and that damage is going to increase 
dramatically, rapidly over the course of the next couple of 
years. And if nothing is being done to try to just control and 
oversee what is happening, then there is going to be a lot of 
damage to a lot of people.
    So all of that is critically important. There are a number 
of things that can be done by this Congress, and one of the 
things that could be done and should be done by this Congress 
is to go back and correct a piece of legislation that took out 
an important Federal Act which was put into place back in 1974 
to regulate this frack drilling, and to ensure that whatever 
frack drilling is being done, it is being done honestly and not 
being done in ways that are corrupted and corrupted quietly so 
that nobody knows about the corruption, nobody knows about the 
danger, nobody knows about what is going on, including what is 
being injected into the context of this drilling.
    Mr. Simpson. I thank the gentleman for his comments.
    Mr. Calvert.

                   NATIONAL ENVIRONMENTAL POLICY ACT

    Mr. Calvert. I thank the chairman. I wanted to follow up on 
Mr. Lewis's comments regarding nonstationary sources. And I 
think Jerry certainly has credibility on the issue. He wrote 
the Clean Air Act in the State of California, which is probably 
the most stringent set of clean air regulations in the United 
States. Because we understand that nonstationary sources are 
the problem--automobiles, trucks, trains--and cause a 
significant part of pollution, especially particulate 
pollution. One of the programs that has been very successful at 
EPA has been the DERA program, the Diesel Emissions Reduction 
Act.
    And Senator Feinstein, Senator Boxer, myself and others 
have been very supportive of that program because it is 
removing old diesel engines from the inventory and replacing 
them with clean diesel, which has a significant positive effect 
on reducing particulate pollution. We know that is a program 
that works and there are a lot of things that we do in 
government that don't work.
    So a lot of us were concerned when you zeroed out the DERA 
program. I just want to bring that to your attention.
    In my home State of California, as you have mentioned, we 
have our own environmental laws. And I would say in almost 
every case, we meet or exceed Federal standards. We have a 
process in California called CEQA, the California Environmental 
Quality Act, which exceeds the NEPA requirements almost in 
every requirement in the State of California. One agency after 
the other--because obviously we have a significant job problem 
in California, our unemployment rate is at 12.5 percent.
    In my district, one out of every four people are either out 
of work or underemployed. And the NEPA requirements are causing 
significant delays in permitting processes and in getting 
projects underway. Have you ever given any thought to States 
such as mine? Where permit applications that are submitted from 
States such as California, which exceed NEPA requirements, can 
NEPA be waived in States such as California? I can't think of a 
State that has more stringent environmental laws than the State 
of California, but don't you think that is a way that we can 
work toward getting these projects underway quicker?
    Ms. Jackson. Sir, I haven't focused on the NEPA process, 
you know, that is run out of the Council on Environmental 
Quality from the White House. So it is not really entirely 
within our jurisdiction. We comment as part of the NEPA 
process, but it is not mine to manage.
    Mr. Calvert. Well, wouldn't EPA certainly have some input 
into this and supporting a new process in which NEPA can 
potentially be waived?
    Ms. Jackson. Well, I am happy to take a look at and/or 
discuss it along with the chair of the council. I will say this 
for our environmental permits, like our Clean Air Act permits 
in the State of California almost across the board is delegated 
the permit authority for those issues. So there is no 
duplicity. We don't issue the permit, and then in California, 
they issue one permit.
    Mr. Calvert. Any comments on the DERA program?
    Ms. Jackson. Yes, sir. I do not disagree with you in terms 
of both the popularity and the effectiveness of the program. I 
think it is around 13 or 14 to one, health benefits to dollars 
spent. It is a tough, tough budget, full of tough choices. And 
the only consideration I would offer for you, sir, is that 
there was DERA money included in the Recovery Act, and that 
money is about 60 percent spent I believe. So the thought was 
in a year of tough budget choices that we could let that money 
hit the street, if you will, and retrofit more engines.
    So that was the basis for the very difficult decision to 
not add money to the program this year.
    Mr. Calvert. Thank you, Mr. Chairman.
    Mr. Simpson. Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chairman. Thank you, 
Administrator Jackson, for coming to testify here today. I want 
you to know on behalf of my constituents and the citizens of 
Minnesota, your hard work in ensuring the EPA's protection of 
public health and the environment is much appreciated. In fact, 
I got Valentines to pass on to you. We support your mission to 
enforce our Nation's laws to make the air we breathe cleaner 
and the water we drink safer. We know that we do face tough 
fiscal times and difficult choices must be made. But the one 
thing that can never be sacrificed is the health of our 
children, our seniors and our most vulnerable populations, 
which you addressed in your testimony. There has been a lot of 
talk about jobs and what can happen and what can't happen. This 
morning I was looking at Politico and there was a story that 
talks about what happened when we as a Nation were working on 
controlling and removing ozone-depleting CFCs. Some of the 
quotes in the story were from the air conditioning and 
refrigeration institute, who warned that we will see shutdowns 
of refrigerator equipment in supermarkets. It went on to say, 
we will see shutdowns of chiller machines which cool our large 
office buildings, our hotels and our hospitals. According to 
the EPA--and this will be the last quote I do from the 
article--the phaseout happened 5 years faster than predicted 
and cost 30 percent less than expected.
    I was working for a company that is called Sears Roebuck in 
major appliances, and it was doom and gloom about what was 
going to happen. People got it when they came in to buy their 
refrigerators to replace them. People understood that what they 
were doing was making the air better for their children. I 
never heard a consumer complaint about what was moving forward. 
And in fact, it caused a lot of great improved technology. 
Thank you for the work that you do. I think lots of times, we 
focus on what our problems are and trying to understand 
regulations and why we are moving forward and we don't 
celebrate our successes.

                               EPA BUDGET

    I do want to talk about something. I am concerned when you 
are talking about balancing your budget. I think the chairman 
has been very thoughtful on how we work to coordinate climate 
change. You were mentioning that too about using the best 
science and not duplicating it. But yesterday, we heard from 
the GAO and Inspector General about the increasing new demands 
on the EPA. They listed in their reports things that you didn't 
even have to deal with a few years ago. Nanotechnology, 
cybersecurity, contaminants of emerging concerns in our water.
    So one of my two questions is, is the EPA's budget 
significant to address these issues as well as working on past 
issues and the mandate that you have in front of us? Because I 
think you can roll these together, I will do my second question 
too.

                            CHEMICAL SAFETY

    We also heard from the GAO and the Inspector General the 
difficulties that the EPA has in regulating toxic chemicals. 
That is due to the fact that for-profit chemical companies are 
not required to fully disclose health and safety data 
information. This puts the burden on the EPA and the taxpayers 
to prove the safety of the chemicals that are being sold for 
profit. This is in contrast to the European Union's approach. I 
am heartened to see you have made toxic chemical safety one of 
your priorities. But I am concerned about how you are going to 
do that with a decreasing budget and fulfilling all the other 
things that we have heard about today and backlogs and the 
evolving water counts and the concern that the gentleman from 
Kentucky had with ongoing litigation.
    My question is, how are you going to be able to carry out 
your enhancing chemical safety initiative that has been given 
to the EPA, not the chemical companies, to determine the safety 
of these chemicals?
    Ms. Jackson. Well, thank you. The reason I smiled when you 
said Sears Roebuck is my dad worked there in hardware for many 
years, so it brought back a very nice memory.
    Ms. McCollum. I was in division 1, 2, and 3, you can tell 
him.
    Ms. Jackson. So your question was about the new challenges 
that we face at EPA, and that has been our management challenge 
in trying to put together this budget. We understood the 
President's strong call, and actually I very much agree with 
that we just have to find efficiencies and do what Americans 
are doing, which is trying to find ways to get our job done on 
lower budgets. That is fair, and I think we should be, at EPA, 
embracing that and be a part of it.
    I just want to note, for example, on toxics which I do and 
we have identified as a real area of focus and concern. We have 
also called for modernizing our Nation's toxic chemicals, laws. 
I am still hopeful that we will get around to that soon, that 
Congress will continue its work there. But we have increased 
our funding for toxics in this proposed budget. It is a plus-up 
of $16 million to deal with some of the issues you mentioned 
including--and we are really proud of using the existing law to 
challenge confidentiality claims where we can. We are going to 
add some people simply to do the legal work of challenging 
these companies to open up the window shades, if you will, and 
let scientists see what is in some of these products. That 
takes legal resources though because there are challenges under 
the law. So we have made cuts but we have tried to preserve and 
actually, in some areas, increase those places where we believe 
with the challenges we see before us we really need to increase 
our resources.

                          ENDOCRINE DISRUPTER

    Ms. McCollum. Mr. Chairman, I was in a cab today and the 
cab driver didn't know what I do for a living. But he asked me 
where I was from and I said I was from Minnesota. And he asked 
me if I fish. I said do you fish in the Potomac? We were at a 
red light so he turned around and he gave me the slightest 
smile and he said, Do you think I am crazy? We have no idea 
whether they are boy fish, girl fish, what kind of fish they 
are. And the cab driver used the term endocrine disrupter.
    Mr. Moran. It is getting through. It is getting through.
    Mr. Simpson. His message is getting through.
    Ms. McCollum. We have our work to do to protect future 
generations. Thank you.
    Mr. Simpson. Mr. Cole.

                         COAL-FIRED POWER PLANT

    Mr. Cole. Thank you very much, Mr. Chairman. I have a 
couple of specific questions, and one in particular that my 
colleague asked--and I have a more general one--but he asked me 
to put to you, Mr. Young from Alaska, so I am going to read the 
question. He asked, "Were due processes and basic notions of 
fairness considered when you rescinded a properly issued permit 
on the Desert Rock power plant? If built, it has been said that 
this plant would be the cleanest coal plant in the United 
States. If this doesn't meet clean air standards, would any 
coal plant be able to do so going forward? So I wanted to tell 
you ahead of time, I don't know this issue particularly well, 
but he asked to be given the opportunity for you to address it.
    Ms. Jackson. It is in New Mexico, does that sound right to 
you?
    Mr. Cole. Again, I wish I could tell you more. It just said 
the Desert Rock power plant.
    Ms. Jackson. I believe he is talking about a title 5 
petition for a coal-fired power plant in the four corners 
region of New Mexico.
    Mr. Cole. He was particularly worried because this has a 
Native American angle to it as well. There was a tribe that was 
going to benefit tremendously financially had this gone ahead.
    Ms. Jackson. Yes. We had significant petitions and concerns 
raised by the State of New Mexico in downwind areas that were 
very concerned that this plant would contribute to regional 
haze, visibility issues over the Grand Canyon as well as some 
significant additional pollution issues. I can get more 
information.
    Mr. Cole. Please do. I would appreciate that very much.

                     ASSISTING SMALL WATER SYSTEMS

    I have got one other specific question. And that is on 
drinking water issues. What is the EPA doing right now to 
assist small water systems and meeting compliance on the Safe 
Drinking Water Act?
    Ms. Jackson. Our work there continues. I have had many 
discussions with the chairman about that very issue. We have 
two roles. The first is to put out health-based standards but 
the other, the Safe Drinking Water Act, acknowledges that there 
are affordability issues. So we are looking at both. We have 
encountered some amount of resistance understandably from 
communities who say, because I choose to live in a rural area 
or small town doesn't mean I choose to have water that doesn't 
meet Federal standards. That is a tough, tough spot to be in. 
So we tend to err on the side of trying to bring resources to 
communities to meet the standards, although we are increasingly 
looking at providing guidance on affordability as well. I don't 
think we have finalized that.

                               REGULATION

    Mr. Cole. Let me ask you a more general question. And I 
don't mean this to be adversarial. I really don't. I want to 
give you an opportunity to state a broader case. As was 
mentioned earlier in some of the questions, we had an awful lot 
of amendments on H.R. 1 aimed obviously at the EPA. And I can 
just say to you, when I go home, I get more questions about 
your Agency and concerns than I do any other agency in the 
Federal Government. And they sort of run the gamut. If it is 
farmers in the southwestern part of my district, they are 
worried you want to regulate dust in the area. Well, you can't 
farm in southwest Oklahoma without having dust in the air. If 
it is oil and gas people--and again my friend Mr. Hinchey and I 
sometimes disagree on hydraulic fracturing--as a matter of 
fact, we always disagree on hydraulic fracturing, to be fair.
    But again, I recognize the legitimacy of the issue that he 
raises, particularly in areas that haven't had oil and gas 
activity on the scale we are seeing for decades. In Oklahoma we 
have. Hydraulic fracturing is not a new technology to us. We 
think we regulate it very well. We have been using it since the 
late 1940s. We think they probably ought to talk at the State 
level to other regulators who do this.
    But I have got a whole industry that worries they are on 
the verge of having a Federal regime they have never had to 
deal with imposed upon them when it is a practice they have 
been doing safely for a long time. And I have got communities 
that come to me continually and say they keep raising the 
standards on water. And we get unfunded mandates.
    So while you pointed out in your testimony the environment 
is bipartisan--it was Nixon that created the EPA, Roosevelt the 
National Park Service, and air and water is better today than 
it was 20 years ago and I think everybody appreciates that--but 
somehow this administration, whether deliberately or not, 
stumbled into a situation where it is becoming very ideological 
and very partisan. Is that because you think the science or the 
technology has changed so much? Again, we clearly have a clash 
here in an area that we don't need a clash. So are you more 
aggressive? Are you going further? I would just ask you to 
reflect a little bit about why all this political controversy 
is happening around the Agency.
    Ms. Jackson. I wish I had the benefit of history so I could 
look back and reflect on these times. But I will say this, it 
is fair to say that there is a backlog of--especially under the 
Clean Air Act, but not only under the Clean Air Act--standard 
setting that has been overdue for a while, either because the 
previous administration--and, again, not to be adversarial--set 
the standard and the courts overturned it. That is the case for 
mercury and other toxics in air. Or transport of pollution from 
sort of the western half of the country because of course the 
air blows from west to east.
    Mr. Cole. In Oklahoma it is north to south.
    Ms. Jackson. I should have said in general. There are 
always exceptions. So there is a backlog of updating the 
standards under the Clean Air Act. None of the standards are 
without cost. It is my job, as administrator, to do and make 
sure that the analyses show they are done in a way that is 
transparent that protect, first and foremost, public health but 
don't surprise business but give them a clear set of rules to 
operate by.
    We have been in sort of a stasis for quite some time. The 
other issue, quite frankly, and many of them--and I make this 
offer with some trepidation. But many of them I think have to 
do with our ability to communicate what is really going on 
inside the walls of EPA to people who shouldn't spend most of 
their time worrying about that.
    So especially with the agricultural community, we have 
endeavored to redouble our efforts with USDA to communicate 
better. For example, on coarse particulate matter which most 
people would call dust in parts of rural America, there has 
been no regulatory change proposed. There has been a study. The 
study, interestingly enough, says it gives equal weight to 
retaining the current standards as it does to changing them. 
And there has been absolutely no regulatory decision made. We 
have committed to listening sessions. We just had a bunch in 
Iowa and Missouri about that very matter. So I think we need to 
find ways to get out and speak to people where they are and 
explain to them because I absolutely agree with you. Americans 
don't want dirtier air. Certainly farmers rely on clean water 
for their livelihood. We just need to be able to ensure that we 
are doing everything we can to communicate with USDA but also 
in the States.
    Mr. Cole. Well, I am going to have a series of questions 
later on. I know my time is about up. I would just ask you to 
recommit or think through that in the Agency. Because I can 
assure you that the political backlash is real. It has real 
consequences. So I don't know if we are going too far or too 
fast. I have opinions on all these things individually where I 
may well differ with the EPA. But I can just tell you, 
attitudinally and atmospherically in a political sense, there 
is a reason why all this is happening. So sometimes you can be 
too zealous or too quick or not--I don't mean you personally. I 
am just talking about in general. Agencies or people in 
government can get ideas, move a lot further and faster than 
the public wants them to go. And I think we are in one of those 
situations right now where the EPA is concerned and we are 
going to continue to have clashes in Congress unless we can 
find some more cooperative way to move forward. And we have 
done that in the past and hopefully can do that going forward. 
Thank you, Mr. Chairman.
    Mr. Simpson. Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman. It is an honor to be 
a member of this subcommittee.
    Mr. Simpson. It is an honor to have you here.
    Mr. Serrano. It only took me 21 years.
    Before I begin to ask my questions, let me just say that in 
those 21 years, I always realize that every day you learn more 
or you hear things a little differently. For instance, 
listening to the gentleman, since he goes back and he hears 
from farmers and he hears from people who are drilling for oil 
or whatever, gas and so on. I don't have in the south Bronx any 
oil wells, and I don't have any farmers. We enjoy the results 
of the hard work they do.
    But on the other hand, in looking for a balance in how we 
deal with the EPA and all that, I have the highest asthma rates 
in the Nation. So I know that people want, yes, whatever 
balance we need to strike but not to go back into the days when 
the air in New York was totally, totally, totally polluted. I 
also have a river. And for most people, they say, you have a 
river in the middle of the Bronx? Yes, the Bronx River. It is a 
great name for it. And most of you live in communities where 
rivers and ponds and waterways are just a way of life that you 
even take for granted.
    Well, that the whole community worked on cleaning up that 
river and that river became a very special place is so 
important and EPA played a major role in making sure that fish 
came back to the river and animal life in the neighboring area 
that didn't exist before.
    So again, some may say, well, that is a little 
melodramatic. But in the middle of a city with a lot of cement, 
that is extremely important. So as we look forward to the 
balance of not hurting industry, we also have to make sure that 
we don't move back on the advances we have made. And that is 
just my comment.
    Thank you so much for your work and for your service. I 
know the next couple of years will be rough ones, but we all 
stand here ready to assist you in any way we can.

                       POLYCHLORINATED BIPHENYLS

    As you know, I have been actively involved in working with 
the EPA on finding ways to address the public health impacts of 
PCBs in both window calking and light ballasts in our schools. 
This past week, New York City announced that it is moving 
forward with a 10-year plan to remove and replace all PCB-
contaminated light ballasts throughout the New York City school 
system. So I have three questions. Based on the current science 
and the EPA guidance that was issued in December 2010 on PCB-
contaminated light ballasts, do you think that in order to 
protect our schoolchildren that the city needs to resolve this 
problem sooner than the announced 10-year time period? 
Secondly, as you know, separately from the light fixture 
problem, there is also an immediate and real concern about the 
PCBs contained in window caulking in our schools.
    Could you please take a moment to update me on your efforts 
to have New York City also address this issue as well? When the 
safety of our children is at risk we cannot afford any further 
delays. And lastly, is this something that is in the inner city 
in New York more than other places? Or is this an issue 
affecting the Nation as a whole?
    Ms. Jackson. Well, thank you. I will start, Mr. Serrano, 
with your last question because I had just written down that 
this is not a New York City-only issue. It has to do with 
basically the generation of the buildings. So to very quickly 
summarize, PCBs, polychlorinated biphenyls are cancer causing. 
They are found in ballast, in fluorescent lights, old 
fluorescent lights. They can be found in caulk. They were a 
component of caulk until they were phased out beginning in the 
1970s, I believe.
    So I do think that we were gratified to see the city's 
announcement that they are going to move forward to address the 
ballast issue. The reason that came to be was that the city had 
signed up to do an investigation of PCB in caulk because PCB 
was showing up in the air, and they came to understand, I 
think, through very quick sampling that the bigger problem 
might well be these PCBs in the ballast. The ballast get old. 
They start to leak and PCBs can be a concern.
    So I think our next move is to meet with the city and 
encourage them to--10 years is certainly I think part of their 
budgetary impetus and they are looking at, to their credit, an 
energy efficiency and sort of an updating revamp that would be 
beneficial to the schools in terms of their operating costs. So 
they may well be able to do this work, replace the lights and 
the ballast and it may well be able to pay for itself or nearly 
pay for itself over time. We are going to encourage them to 
focus on the places where we think there is contamination 
leaking so that we don't have some child, God forbid, or 
teacher who ends up being on the 10-year side of that.
    We would like to at least give some assurance that they are 
triaging this situation. But I do think that has been a 
tremendous step forward. The city in general has been dealing 
with this issue. Other areas around the country--and we now 
have guidance up on our Internet site. It is not a regulation. 
It is not a requirement to help school districts who are 
dealing with either caulk or PCB.
    Mr. Serrano. Well, you answered the last question which I 
was going to ask you which is, has the city been cooperative? 
And you do feel that they have. Well, maybe you don't feel that 
they have.
    So let me ask you a question, has the city been cooperative 
in moving ahead on this? And again, 10 years may be a budget 
piece, but can we wait 10 years? Should this be dealt with at a 
much quicker pace?
    Ms. Jackson. I think when you are talking about a health 
issue, especially one that is a children's health issue, young 
bodies still developing, we don't have a lot of data on how 
pollution or toxics affect them more or less than adults. 
Urgency is always called for. I have not been dealing with the 
city in day-to-day negotiations. I will suffice as to say that 
where they are now is a good thing. They have stepped up after 
some period of time to say, we now know and understand that we 
need to be aggressive here. And I don't think we should 
discount that. Our goal now is to ensure that they improve even 
their 10-year plan, which is a wonderful improvement and a step 
forward to try to make it as effective as we can always with 
children in mind, always with children and doing it within 
their budget. I mean, the city schools have their own set of 
challenges, and the mayor and officials are quick to point that 
out. So we are trying to help them deal with this issue in a 
way that is protective but also mindful.
    Mr. Serrano. Thank you so much. Thank you, Mr. Chairman.
    Mr. Simpson. Mr. Flake.

          SPILL PREVENTION CONTROL AND COUNTERMEASURE PROGRAM

    Mr. Flake. Thank you, Mr. Chairman. Thank you Ms. Jackson. 
The theme seems to be, at least from this side of the aisle, 
that there seems to be overreach by the EPA. I don't know how 
it can be classified otherwise, and we saw this in response on 
the CR. And, just to give you an example, a couple of weeks ago 
the Wall Street Journal talked about a new rule promulgated 
just 6 weeks ago by the EPA finalizing a rule that subjects 
dairy producers to the spill prevention control and 
countermeasure program. This was created in 1970 to deal with 
oil spills near shorelines and navigable waterways. This is 
done, as the EPA put it, because of the percentage of animal 
fat that is a nonpetroleum oil in milk. Now my understanding 
is, this rule requires mitigation measures be put in that 
include dairies training first responders in cleanup protocol 
and building containment facilities, berms, and dikes, if 
possible. I can tell you, I grew up milking a cow and I would 
have loved to have told my dad, ``sorry, there is no berm here 
around the barn. I am not going to do it.''
    How with a straight face can anyone in the EPA say that, 
given all of the problems and the need to maintain the progress 
that we have made in a budget environment like this, we need 
promulgate new rules like this? We understand it is not going 
to cost the EPA much, but it costs the dairy industry and 
farmers a lot. Those who produce cheese and other milk products 
are required to be in this as well. I mean, what is next? Sippy 
cups in the House cafeteria? What are we going to do? But, 
please, explain how that is not overreach. Many seem to deflect 
any criticism of anything the EPA is doing, saying there is no 
overreach and they are not going too far. Is this not 
overreach?
    Ms. Jackson. Sir, it is not accurate. I can just read to 
you from the letter to the editor that we wrote that I think 
the Wall Street Journal has yet to find time or space to 
publish. EPA has already proposed to exclude--exclude--milk 
storage tanks from this spill prevention program. This 
commonsense decision was announced months before the Wall 
Street Journal chose to write their inaccurate article. 
Moreover, EPA stayed enforcement. Compliance requirements were 
changed pending the final agency action.
    It is widely known that EPA will take action on this this 
spring, and I can give you a personal update. EPA has already 
sent the draft final exclusions to the White House. So we are 
on schedule to do that, which we had announced months ago. I 
have no idea why the Wall Street Journal chose to inaccurately 
report. We have tried to fix the record, but I don't believe 
they published it.
    Mr. Flake. Well, it sounds like this rule has been 
promulgated and now you are just looking to make exemptions to 
it. Would that not be accurate?
    Ms. Jackson. No, that is not entirely accurate, sir. 
Because when we promulgated the rule, at the same time we made 
clear that we were announcing and proposing an exemption. So it 
does take a bit of time for the regulatory process to ensure 
the exemption is through. And so to ensure no producer was 
subject to a rule that we did not intend for them to be subject 
to, we have also announced that we won't enforce it. So there 
has been no period of time where anyone has been subject to 
worry about whether milk and spilled milk was going to be 
regulated. We have announced that we don't believe that is an 
area where regulation is necessary.
    Mr. Flake. It would be accurate to say that the EPA has 
spent a considerable amount of time promulgating this rule in 
the first place.
    Ms. Jackson. The rule is for oil. The rule is for inland 
oil facilities that need containment to ensure our waterways 
are protected, but we wanted to ensure there was an exemption 
for milk and the fats in milk.
    Mr. Flake. There has been no effort to include or to 
subject dairy producers to the spill prevention control and 
countermeasure program then? No effort then?
    Ms. Jackson. No, sir. There has been an effort to exempt 
them, but there are rules under SPCC, if we can just use the 
shorthand, to deal with preventing spills of large amounts of 
oil into inland waterways. That is part of our requirements. 
But because this unintended consequence came up, EPA announced 
an exemption so there would be no confusion.
    Mr. Flake. But it is still inaccurate to say that this was 
not being considered by the EPA and time was not spent on it 
because there was a rule finalized to subject dairy producers 
to this that is now being considered or exempted or held back, 
correct?
    Ms. Jackson. At the same time as the rule was finalized for 
oil containment and storage facilities, large ones, I think 
over a million gallons, sir, but I can double-check that, EPA 
proposed to ensure that milk was exempted. So there has been 
time and effort, in my mind, my opinion, spent on just the 
opposite of overreach, which is underreach. We made it clear 
through our rules that we were not going to or intending to 
have milk, milk as a substance, regulated, regardless of 
whether it is over a million gallons.
    So you ask why I cannot entirely buy into this idea of 
overreach. Many of the things that EPA is accused of are, in my 
mind, attempts to misinform people of what is actually 
happening. What is happening on the ground is that we are not 
intending nor do I believe will ever regulate milk. As soon as 
the rule becomes final, that will be quite clear.

                          AMBIENT AIR QUALITY

    Mr. Flake. Let me move to Arizona here. Arizona counties 
and municipalities are very worried about a review of ambient 
air quality that could result in the lowering of the coarse 
particulate standard. You talked about this being considered 
before. I understand the Clean Air Scientific Advisory 
Committee has recommended that the standard be lowered or 
raised or bettered, I guess you would say. Is that correct? Is 
that why the EPA is moving ahead with consideration of changing 
the standard?
    Ms. Jackson. The actual language in the Scientific Advisory 
Board document says that it is equally--I don't have the exact 
quote. I will try to find it for you. It is equally like 
possible to retain the current standard. There is a standard 
now or to lower it. So, as far as I know, they have not made a 
determination or a recommendation to lower the standard to EPA.
    Mr. Flake. We know that they have made a recommendation. 
And is it safe to say that EPA tries to or often follows 
recommendations of the Scientific Advisory Committee?
    Ms. Jackson. We are required by law to consult with the 
Case Act. There has only been one case when EPA did not follow 
the recommendations of Case Act. That was the ozone standard 
promulgated at the end of the Bush administration which we are 
now reconsidering.
    Mr. Flake. This clean air advisory----

                        SCIENCE ADVISORY COUNCIL

    Ms. Jackson. Scientific Advisory Council----
    Mr. Flake. They recommended that EPA establish a new coarse 
particulate standard for rural dust, but my understanding is 
that EPA has rejected their recommendation in the past; is that 
correct?
    Ms. Jackson. My understanding, sir--and I will get the 
backup--is that their recommendation says that they support 
either retaining or revising. So they did not take a position. 
But I will make sure and get you the exact language.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Flake. The concern would be that the EPA is following 
one recommendation and not following the other recommendation. 
The one recommendation would impose considerable costs. And 
when the other recommendation made might spare the cities and 
municipalities that cost, the new standard or separate standard 
for rural dust was to be adopted. So my concern would be that 
the EPA would be picking and choosing which recommendations to 
follow and only following those that impose significant costs.
    And then the problem is, and we have been through this 
again and again, every time the EPA comes in to say they are 
going to change the standard there has already been lawsuits. 
There has already been action forcing cities and counties to 
take action to reach a new standard. And while they are in the 
middle of trying to comply with this, here comes EPA again 
saying you might have a new standard.
    And it would behoove all of us to sit back and say, all 
right, can we have a 10-year standard and here are the 
benchmarks. Here is what we have got to reach. This would be 
instead of putting the cities and counties through the wringer 
every couple of years that they find very difficult to comply 
with.
    That is my concern. I will wait for the next round of 
questions. Thank you, Mr. Chairman.
    Mr. Simpson. Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman. I don't have much of 
a voice today, so thanks for your tolerance.
    I would like to start, Ms. Jackson, by associating myself 
with the remarks of Mr. Cole. I have never heard the vitriol 
during town hall meetings that I hear towards the EPA from 
everyone from coal miners to ranchers to people who do believe 
climates are changing but believe that the EPA's heavy hand 
towards regulating greenhouse gases will put us out of business 
and just send those jobs into countries that do not have 
environmental regulations that match ours, thereby causing 
greater pollution elsewhere in the world that will eventually 
get to us as well.
    Most of us have more confidence in our own country's 
ability to manage environmental issues with the latest 
technologies than is capable around the world. So I think that 
we should concentrate on trying to keep jobs and technology in 
the United States. We can actually be the leader in those areas 
and export those technologies elsewhere in the world.
    So please do take careful heed of Mr. Cole's remarks. I 
believe they were right on target.
    I do have some questions for you, some of which I will 
submit in writing.

                           REGULATORY ACTIONS

    Mrs. Lummis. How many regulatory actions is your agency 
currently undertaking under the Clean Air Act or the Clean 
Water Act?
    Ms. Jackson. I don't have the exact number in front of me. 
We classify regulations according to their economic 
significance I believe over the course of a year. Are you 
asking about maybe this year?
    Mrs. Lummis. Yes, ma'am.
    Ms. Jackson. I think we have two or three economically 
significant requirements, maybe four under the Clean Air Act 
that are in our regulatory calendar.

          PRESIDENT OBAMA'S JANUARY 18, 2011, EXECUTIVE ORDER

    Mrs. Lummis. Are you complying with President Obama's 
January 18th executive order that requires agencies to take 
into account--and this is among other things--the costs of 
cumulative regulation?
    Ms. Jackson. Yes, ma'am.
    Mrs. Lummis. And do you have some data you can share on 
that?
    Ms. Jackson. We have been asked to do a retroactive look-
back of regulations to determine impacts, and we have begun 
that scoping process, but I don't have anything to share at 
this time.
    Mrs. Lummis. And when will you?
    Ms. Jackson. I cannot give you a date today, but we will 
get you a date.
    Mrs. Lummis. When you get us the date, can you also give us 
information?
    Ms. Jackson. When we have it. We will get you a date when 
we will have information that we are able to share, absolutely.
    Mrs. Lummis. Thank you.

                    CRITERIA FOR REGULATORY CHANGES

    What criteria do you use to determine when a regulatory 
change must follow the open rulemaking process or where 
guidance will suffice? I can tell you we hear a lot of concerns 
that guidance has broadened the scope of the Clean Water Act in 
ways that skirt the rulemaking process.
    Ms. Jackson. We follow the Administrative Procedure Act in 
determining what should be a regulation; and, of course, once 
we have a regulation, we have made a determination about a 
regulation, it goes through full public comment, usually a very 
long and detailed process. And we are pretty proud of the fact 
that we think we have a very transparent rulemaking process. 
The guidance issues are for those issues which generally EPA 
needs to offer guidance and clarification, doesn't rise to the 
level of a rule.
    And, increasingly, EPA's guidance is subject to public 
comment as well. For example, you heard perhaps earlier the 
discussion about the mountaintop removal mining guidance and 
surface mining guidance.
    Mrs. Lummis. Thank you.

                           HYDRAULIC FRACKING

    I want to follow up on the conversation on hydraulic 
fracking, something that occurs commonly in my State, and there 
has never been a connection proven in spite of frequent 
revisiting of the hydraulic fracking issue between the 
diminution in water quality and modern hydraulic fracking 
techniques.
    I would also point out to those that are concerned about 
it, especially those that are concerned about the New York 
Times article, that the former director of the Pennsylvania 
Department of Environmental Quality and the former governor, 
Governor Rendell, submitted a rebuttal to the New York Times 
that the New York Times wouldn't print because it was too long. 
But it addressed many of the concerns that were raised in the 
article.
    And, of course, the article also was not a peer-reviewed, 
scientific expression of hydraulic fracking. So I would refer 
those who are concerned about it to former Governor Rendell and 
the former director in the State.
    And following up on that, using that as a segue, can you 
tell me what does the EPA do that States are incapable of doing 
through their own departments of environmental quality?

                          EPA AND STATES ROLES

    Ms. Jackson. Well, ma'am, as you know, water moves between 
States, and air moves between States and countries. And so I 
think EPA's most important role over its history, EPA often 
helped States to set up their program. Now we have moved more 
into a role where we oversee programs to ensure that the Clean 
Water Act is implemented the same way, for example, across the 
country.
    Where I think EPA has made some tremendous progress and 
where we have work to do is on regional issues, on places--for 
example, the transport of pollution from the Midwest to the 
East or water quality issues that are regional in nature that 
require the cooperation of several States. I think a national 
environmental body--as well as research. EPA has a very fulsome 
environmental research budget. Most States can't afford that. I 
used to run a State program, and we just didn't have the money 
to put in research we would like.
    We still set international standards for risk assessment. 
And our work still--I am always amazed wherever I go 
internationally, almost every slide, if it is an environmental 
issue, is attributed to many of the scientists and researchers 
at EPA, car standards. I could go on and on and on.
    But the States are extremely important in the day-to-day 
implementation of our environmental laws. They write permits. 
They enforce the law. But the EPA's role is one of oversight as 
well as scientific knowledge and working on regional issues.

                              EPA RESEARCH

    Mrs. Lummis. Do you believe that research is your highest 
priority expenditure at EPA?
    Ms. Jackson. Our mission is protection of public health and 
the environment. So I wouldn't call it our highest priority, 
but I would say increasingly environmental issues are so 
complex that you need very, very good science. So we spend a 
lot of money and a significant portion of our budget on science 
issues, whether in applied research or in grants to do 
research.

                             EPA PRIORITIES

    Mrs. Lummis. In making decisions about prioritizing your 
funding, do you look at what States can do versus what they 
cannot do or what you believe they are incapable of doing and 
prioritize for the EPA to do those things that you believe the 
States are incapable of doing as well as EPA is capable of 
doing it?
    Ms. Jackson. We have seven priorities that I established at 
EPA. One of them is working in partnership with our States and 
tribes. Because many of our managers, including myself, came 
from State government and know very well that there is a 
synergistic relationship.
    There are also times, quite frankly, when we don't agree 
and the laws carve out a role for EPA and implementation of the 
environmental laws that we must also uphold. We are ultimately 
accountable for implementation of those laws.

                    AIR QUALITY AROUND GRAND CANYON

    Mrs. Lummis. There are State and tribal groups that form 
commissions such as the Grand Canyon Air Visibility, the 
Transport Commission. That is not the exact name of it. But it 
was the western governors, the tribes near the Grand Canyon and 
others who worked diligently together to address air quality 
issues in the airshed around the Grand Canyon. I know there are 
similar intrastate and intratribal interagency efforts around 
the country. Do you look to those as a primary driver or do you 
look more to the Federal Government as the primary driver?
    Ms. Jackson. No, of course. And, in fact, those groups, if 
they are the ones I am thinking about, are authorized under the 
Clean Air Act. The Clean Air Act realized that haze is a 
regional problem, visibility is a regional problem, and so 
there are several regional haze groups that protect Class 1 
visibility areas around the country, and they are authorized 
under law, and we work very closely with them.

                               EPA BUDGET

    Mrs. Lummis. Since President Obama became President, it 
looks to me as if, in terms of percentage increase, the EPA has 
received the highest percentage increase in its budget. Do you 
agree?
    Ms. Jackson. Certainly we received the highest increase of 
any EPA budget under President Obama in fiscal year 2010, yes.
    Mrs. Lummis. So as I understand, it was about 39 percent 
total for the previous administration's budget and so your 
current proposed 13 percent cut really amounts to a 24 percent 
increase over previous EPA budgets. Do you agree with my math?
    Ms. Jackson. Top line, yes. It is essentially so, yes.
    Mrs. Lummis. So you are still dealing with about a quarter 
increase over previous administration's budget?
    Ms. Jackson. With the very vast majority of that money 
going out to States, either for the Great Lakes or for water 
and wastewater infrastructure grants. What the President 
thought was very important was investing in water and 
wastewater infrastructure but in a tough year we have had to 
basically give some of that back, reluctantly, but we are part 
of the team and we think we have to make those tough choices.
    Mrs. Lummis. And among those were the State revolving 
funds, the safe drinking water?
    Ms. Jackson. That is what I referred to.
    Mrs. Lummis. Excuse me. You are being very generous, Mr. 
Chairman, with my 5 minutes. So I will yield back. I do want to 
pursue that if there is another round. Thank you.
    Mr. Simpson. The gentleman from Ohio.
    Mr. LaTourette. Thank you, Mr. Chairman.
    It is nice to see you, Madam Administrator, again; and I 
want to thank you for the courtesy that you have extended to me 
personally and to my constituents.
    And, also, on the issue of the Great Lakes, I want to 
commend the President and you for the emphasis placed on the 
Great Lakes.
    I am sorry that the distinguished ranking member of the 
full committee isn't here anymore, but I think he was engaging 
in a little bit of revisionist history. It is actually this 
administration that is the very first administration that has 
put real money behind the Great Lakes cleanup initiatives. We 
sort of limped along at $50 million here and $50 million there, 
and the President's original vision of $475 million would have 
actually let us move forward in a lot of important areas. And 
if the gentleman from Washington is short on species, we would 
be happy to send him the Round Goby, the sea lamprey, the zebra 
mussel, or the Asian carp. Perhaps he could repopulate some of 
his areas.
    Mr. Moran. Is the Asian carp edible? That is a heck of a 
big fish. What can you do with it?
    Mr. LaTourette. I would say to the distinguished ranking 
member of the subcommittee that I will bring him one and maybe 
we will check it out.
    Mr. Moran. I bet it is a tough one to fillet. It is about 6 
feet long.
    Mr. LaTourette. Some of them go 100 pounds. So I hope it is 
good eating.

                MISLEADING PESTICIDE PRODUCT BRAND NAMES

    With those things, there are a couple of things that are of 
concern to me; and I would like to get through in the 5 
minutes, if I could. And one is something that Ms. Kaptur and I 
sent you a letter on. It was a draft PR Notice 2010 Act and you 
were kind--actually, you didn't send the letter back to me. It 
was Mr. Owen, the Assistant Administrator.
    The U.S. EPA draft PR Notice 2010 Act has to do with false 
or misleading pesticide product brand names. And here is my 
concern. There are two companies in Ohio. One is Scotts, which 
is pretty well-known, and the other one I didn't know about 
until this sort of dustup started, and that is Anderson's Golf 
Pro. And the proposed PR Notice, which isn't going to go 
through rulemaking, it is going to be guidance, as you were 
discussing with others, wants to take a look at trademark 
names.
    Now, I have a lot of problem with that from a legal 
standpoint. A trademark name is a trademark name. But on the 
draft guidance that comments are being solicited on, names that 
apparently the agency is going to have problems with are 
eradicator, germ shield, professional grade, pro, safe, safer, 
safest, and green.
    Now, when I was growing up, green was a color. And if 
somebody has gone through the process of having its fertilizer 
trademarked, I have no problem with the EPA looking at what is 
in the bag to make sure it is safe for human health and 
everything else. But, obviously, a lot of time and money----
    Some of these trademark names have been around since the 
1960s, and there is just a--Scotts Lawn Pro, I have trouble on 
a couple of levels. One, I don't find anything deceptive in 
having a trademark name called Lawn Pro; and, two, I do have 
trouble with the EPA proposing without the rulemaking process 
to move forward with a guidance that would say that the word 
``pro'' was inappropriate.
    In the case of the Anderson's company, the reason Ms. 
Kaptur signed the letter--it is in her district--they make a 
product called Anderson's Golf Pro; and apparently in 
correspondence with the agency they have been advised--because 
it can be used on your front lawn and not just a golf course--
that they have trouble. They find the word ``golf'' as 
deceptive. So they are going to be able to call it Anderson's, 
I guess, because they can't call it Anderson's Golf and they 
can't call it Anderson's Pro.
    The problem moving forward is that--I said to the people at 
Scotts who are down in Marysville, Ohio, I think Mr. Tiberi's 
district, I said you are really only scratching the surface 
when you talk about things like pro and green and everything 
else. Because the one Scotts product that I use is Miracle-Gro. 
And how the heck are they going to be able to establish that a 
miracle has occurred when they put their stuff--they are going 
to have all of these little old ladies take their tomato plants 
over to Rome to present them to the College of Cardinals to 
determine whether a miracle has occurred.
    So that is the trouble I have got with this thing; and I 
would hope that at the very least, because we are dealing with 
trademarks and the fact that they have been in place for a long 
time--I could argue it is an unconstitutional taking of 
property without due process of law. But I would hope that 
perhaps because I find you to be a reasonable person, that 
maybe you could pull back the people that want to take the word 
green and pro and everything else out of the trademark. And if 
you want to proceed in this direction, that you put it through 
the rulemaking process and not through this guidance process.
    And your letter--again, the letter from the Assistant 
Administrator at the end of January--indicates that that is not 
the position of the agency. But that is my request, if you 
would take a look at this. And if you want to really get into 
what lawn care products are called, that it go through the 
rulemaking process and not just solicits comments from people 
but also lets the Congress also weigh in and make some 
observations. So that would be request number one.

                     FLY ASH OR COAL AS REGULATION

    Request number two has to do with fly ash. And you know 
that there was an amendment during the CR. One of our new 
members, Mr. McKinley, offered the amendment to deny funding to 
the EPA relative to declaring coal ash to be a hazardous 
material. I think that amendment passed.
    Regardless of that amendment--and I am not a big fan of 
amendments limiting funding. But the history of fly ash or coal 
ash, to my understanding, is that there was a series of 
studies, the Bevill studies, that the agency actually presented 
a recommendation to Congress that coal ash should not be 
regulated as a hazardous material. And now, without 
consultation with the Congress, it appears that the EPA is 
about to do a 180 degree turn.
    And so, one, I have the same problem. Why would Congress 
direct the EPA to make a study and a recommendation only to 
have the EPA go in the other direction? And then, two, just the 
folks that are engaged in waste tell me when you increase the 
amount of fly ash that needs to be treated as a hazardous 
material, it is going to be about 40 to 50 million tons a year, 
which is going to exhaust our landfill space in just about a 
couple of years.
    So your comment on Miracle-Gro and your comment on fly ash 
would be greatly appreciated.
    Ms. Jackson. I believe in miracles.
    Mr. LaTourette. I do, too.
    Ms. Jackson. So I will take a look at the issue you raise 
seriously, sir. I am sorry for the joke.
    And on the second issue of coal ash, let me just say a 
couple of things in terms of where we are. EPA continues to 
support the beneficial use of that material. We proposed a 
rule. The rule did not take a--it proposed two different 
approaches and took comment on it. The approaches were to 
regulate it under Subtitle C, which are the hazardous 
provisions of the law, of RCRA, or Subtitle D, which is the 
solid waste provisions. Either way, increased regulation, which 
I believe is warranted because there is certainly real and 
potential public health and environmental issues.
    All this was in the aftermath of the failure of the big 
impoundment in Kingston, Tennessee. We received over 450,000 
comments on the proposal, and that is going to take quite a bit 
of time to work through. So we remain committed to rulemaking 
on this matter; and we are going to analyze that information 
and make a final decision based on comments, science, and the 
law. But we will almost certainly not do that this calendar 
year. I think it is going to take quite a bit of time.
    Mr. LaTourette. I had understood that you had come up with 
actually three different proposals to have comment on--C, D, 
and D prime--and that there were actually three different ones.
    The only concern that I have, if you look at the Tennessee 
incident, which was obviously serious, it seems to me that it 
is a matter of engineering and studying and dams and things of 
that nature. But to just reclassify fly ash as a hazardous 
material I think is a big step. And just like in the case of 
the fertilizer, I hope that if you, as the leader of the 
agency, reach a conclusion that that is the direction you are 
going to go in, that you would at least consult with the United 
States Congress before moving in that direction.
    Thank you.
    Mr. Simpson. Mr. Moran.
    Mr. Moran. Thank you, Mr. Chairman.
    Mr. LaTourette, I hope that that is not your Alexandria 
lawn where you are using all of that fertilizer stuff.
    Mr. LaTourette. Nothing but natural green products go onto 
my property in Virginia. But thank you for asking.
    Mr. Moran. I hope that is the case. We have got some people 
using all that stuff, and it is getting into our water supply 
and then we have to spend all this taxpayer's money trying to 
clean it.
    Mr. LaTourette. I think that is probably how you got the 
doghead fish in your----
    Mr. Moran. I suspect so. But we have been trying to find 
our neighbors who are accountable for that, and maybe we found 
the problem.
    Anyway, that is not really what I want to focus on here, 
but thanks for raising it. We will send the lawn police out 
after you, Steve.

                            GREENHOUSE GASES

    First of all, greenhouse gases. We have heard so much from 
so many people on how aggressive you have been on greenhouse 
gases. We have got this old coal-fired power plant in 
Alexandria that is redundant, and we still can't get it closed 
down. So some of us would like a little more aggressive action. 
But I know how differential you want to be to the industry, and 
you want to make sure that everything is done right.
    But there is another point of view from the one that has 
been expressed, particularly on the floor of the House when we 
were considering the CR. During consideration of the CR, Mr. 
Poe from Texas, who was the author of the amendment to stop 
EPA's regulation of greenhouse gases, said, and I quote, this 
amendment will rein in EPA and prohibit them from implementing 
the so-called cap and trade philosophy on States such as Texas. 
Other Members said that the EPA was trying to implement cap and 
trade. So I want to ask you, do the greenhouse gas regulations 
that EPA finalized in December actually institute cap and 
trade, and do you intend to implement cap and trade at EPA in 
the future without congressional action?
    Ms. Jackson. That is no and no. EPA has taken no steps to 
establish a cap and trade program, and we do not need to do so. 
I joined the President in calling for legislation in the 
absence of that. We do not----
    Mr. Moran. So, without congressional action, you are not 
going to be acting on that. So thank you, Ms. Jackson.
    We heard also from Mr. Barton, who had been the ranking 
member on the Commerce Committee, that carbon dioxide is not a 
pollutant under the definition of the Clean Air Act, so EPA has 
no authority to regulate that. Is that true?
    Ms. Jackson. No, sir, that is untrue.
    Mr. Moran. So all the members are clear, what have you 
asked of industry in the greenhouse gas regulations and have 
you seen evidence of refineries and power plants actually going 
out of business as a result of your actions?
    Ms. Jackson. No, sir. Actually, we have seen some permit 
activity that would be encouraging, I think. We have had about 
100 PSD applications that are now in process. PSD are Clean Air 
Act permit applications that are needed before either 
undertaking a new facility or a significant modification that 
would raise the amount of greenhouse gases quite significantly. 
Twenty-six of those 100 have already done their analysis for 
greenhouse gas emissions, and that is before the permit riders. 
Two have already received their greenhouse gas permits. I 
believe one is in Louisiana; one is in California.

                            CLEAN WATER ACT

    Mr. Moran. Now, on clean waters. This dump truck of a bill, 
known as H.R. 1----
    Mr. Simpson. Dump truck?
    Mr. Moran. A dump truck, because we dumped everything--or 
you guys dumped everything you could imagine into it and 
weighing it down so we are having trouble getting it passed, of 
course.
    But it contains language that prohibits EPA from updating 
its rules and guidance pertaining to the definition of waters 
under the Clean Water Act. So, without question, there are two 
Supreme Court decisions, one in 2001 and another in 2006, that 
have created some confusion and uncertainty over the scope of 
the Clean Water Act. But the prohibition in H.R. 1 is anti-real 
estate and anti-business, given the past position of industry 
groups that they do support a rulemaking process that would 
provide all sides with clarification, with an ample opportunity 
to participate in that regulatory process.
    So I ask you, Madam Administrator, how would the 
prohibition that was dumped onto H.R. 1 impact the permit 
process in EPA's future actions on limiting water pollution?
    Ms. Jackson. I believe it would prevent EPA and the Corps 
from offering clarification to permit writers who work for 
either EPA, the Corps, and authorize States under the Clean 
Water Act. That level of confusion is having a real-world 
impact in implementation of permitting and enforcement and in 
my belief will have an impact on water quality if not 
addressed. So if we are prohibited from making any 
clarification possible, it will have an impact on our ability 
to move as we try to develop and invest money as we try to 
create jobs.
    Mr. Moran. Well, that is what I was concerned about. We are 
trying to grow this economy, and real estate developers who 
have plans that have been worked out with the locality, a 
number of smart-growth ideas in metropolitan areas, we are 
being told that they can't move until they can get 
clarification on the Clean Water Act. And they are asking you 
to do it, and now you are stopped because of H.R. 1.

                   LIMITING GREENHOUSE GAS EMISSIONS

    One last question with regard to H.R. 1. This is Section 
1746. It would fund the government through the remainder of the 
fiscal year, but it would stop EPA from limiting greenhouse gas 
emissions. But what is less clear is the impact of section 1746 
on renewable fuel standards. So I want to ask you, is the 
language included--and I shall use that expression once more--
in that dump truck of a bill known as H.R. 1, I mentioned on 
the floor that it had more poison pills than Rasputin's 
medicine cabinet. That is the kind of thing we would have 
expected out of Representative LaTourette.
    But here we are burdened with all of this stuff, and we 
have got this language in H.R. 1 that stops EPA's renewable 
fuel standards for the remainder of the fiscal year. How do you 
deal with that, with the impact of the consequences of Section 
1746 in H.R. 1, Madam Administrator?
    Ms. Jackson. Yes, I think we agree that the greenhouse gas 
prohibitions and the riders thereto have an impact on our 
ability to implement the renewable fuel standards because they 
are, after all, greenhouse gas based or based on a lifecycle 
analysis with respect to greenhouse gas compared to 
conventional gasoline. So I think that is one of the 
consequences as well.

                          FUNDING RESTRICTIONS

    Mr. Moran. Well, just one final comment to address--we have 
talked a lot about the Great Lakes restoration. And I happen to 
agree. We ought to be investing money because it has an 
immediate economic benefit and a deleterious one if we don't 
make that investment.
    But I think Mr. Dicks is right with regard to Puget Sound, 
and that affects the quality of water all the way downriver and 
Chesapeake Bay. And on Chesapeake Bay we have had support on 
both sides of the aisle, but now we have this language that 
says you can't use any Federal funds, even though we have had 
the Agriculture Department, we have had EPA, we have had any 
number of agencies working in a collaborative manner, 
particularly with the States and localities, to clean up the 
Chesapeake Bay.
    We have got miles of dead zones from all the fertilizer, as 
Mr. LaTourette referenced, that is killing the vegetation at 
the bottom of the water; and now we have got this legislation 
that says you can't use any Federal funds to implement the 
total maximum daily load, which is precisely the tool that we 
are using to try to clean up the Bay.
    If you have any further comment, that is fine. Otherwise, I 
will let you go. I appreciate the opportunity, though, to make 
these points, Mr. Chairman. And I trust that you would agree, 
we ought to get back to a regular interior appropriations bill 
so we can deal with these very difficult regulatory and 
legislative issues in an appropriate document and not in that 
dump truck of a bill known as H.R. 1.
    Mr. Simpson. I appreciate the gentleman's comments, but 
funding limitation amendments are appropriate in an 
appropriation bill because we are the Appropriations Committee 
and hence the definition, funding limitation amendment, which 
is what was offered.
    And I would also say that I think you are incorrect. 
Section 1746, that was stationary sources of greenhouse gas. It 
had nothing to do with fuel standards. So it would have left 
those completely untouched.
    Whenever we put something in, everybody throws out this, 
oh, the world is going to fall; we won't be able to do 
anything. Originally, when it was proposed, the Energy Star 
standard wouldn't be able to do Energy Star anymore. That is a 
program that existed before there was ever any mention of 
greenhouse gases. There was nothing that would have affected 
Energy Star. But yet all of those comments are made.
    And, of course, people that don't like it throw out the 
worst-case scenario. I am surprised that the world just didn't 
fall apart the day after that passed. But, unfortunately, or 
fortunately, I guess, it didn't.
    Maybe some of those things that were said aren't true. And 
it seems like the agency--I am smart enough to understand the 
agency on almost anything it does overstates a benefit and 
understates the cost. And I am also smart enough to understand 
that businesses that maybe don't like it overstate the cost and 
understate the benefit. And the truth is somewhere in the 
middle. And the problem is having an honest discussion about 
this stuff because of all the bull that is thrown out, and that 
is the reality.
    Mr. Hinchey.
    Mr. Moran. Mr. Chairman, I would agree with you that you 
are a very smart guy.
    Mr. Simpson. I didn't say that.
    Mr. Moran. You suggested that. And I agree that you are a 
smart guy, but I think you would also agree that we shouldn't 
be deciding these issues with 10 minutes of debate. For 
example, the Chesapeake Bay, it didn't mention EPA. It just 
said all Federal funds. And that is the problem with 
legislating in that manner at 2:00 in the morning.
    Mr. Simpson. Just to clarify that. You will notice that on 
the greenhouse gas regulation or limitation that was put in 
there, we only did it through the CR, through the 7-month CR, 
because we didn't want the EPA and business to spend a ton of 
money implementing a rule that was being taken up by the 
authorizing committee.
    The one thing I don't want to do is I don't want to have 
this committee substitute its judgement for the authorizing 
committee. But working with them, they said, through the term 
of this CR, that is fine; let us work. They are currently 
holding hearings.
    I don't know what Congress will ultimately decide. I may 
agree or disagree with whatever Congress decides. But let us 
let the authorizing committees do their work, because sometimes 
there are things that have to be done on an appropriations 
bill.
    I will also tell you that there are an awful lot of 
statutes out there that are unauthorized. They have expired. 
And what do we do? We extend the authorizations through the 
appropriations bill. If you want to just stop doing that, we 
will close down the Indian health clinics across the world. We 
will do a lot of other things that are unnecessary.
    Mr. Moran. So who is exaggerating now? I don't want to be 
argumentative with you, Mr. Chairman, because you are a good 
guy, and you want to do the right thing. But I do think we have 
got a real problem with all of those riders that were put on to 
that continuing resolution. But thank you.
    Mr. Simpson. And, as I said, they were so devastating that 
no efforts were made by your side to remove them.
    Mr. Hinchey.
    Mr. Hinchey. Chairman, thanks very much.

                         NEW YORK TIMES ARTICLE

    I just have one brief question, and it is about the most 
recent article in the Times. I think it is coming out today or 
tomorrow. According to the report, what they say is that some 
EPA lawyers believe that Federal pollution laws are being 
violated in Pennsylvania. And I know that you are going up 
there tomorrow, and you will get some deep insight into this 
whole situation, and I deeply appreciate your spending the time 
up there.
    So they believe that the pollution laws are being violated 
in Pennsylvania; and, specifically, drilling waste is being 
discharged into rivers and streams with minimal treatment. 
According to one EPA lawyer that was cited in this most recent 
story in the Times, and this is a quote: ``Treatment plants are 
not allowed under Federal law to process mystery liquids, 
regardless of what the State tells them. Mystery liquids is 
exactly what this drilling waste is, since its ingredient 
toxins aren't known.''
    That was an interesting statement by him. Nevertheless, the 
agency has not intervened in Pennsylvania mostly because of 
resistance, as we understand it, resistance from upper-level 
staff within the EPA Region 3 office. And, of course, they 
oversee the operations of the State.
    This may be something that you might be interested in 
checking out in going up there. So I think that it would be 
interesting--maybe you know something about this already. A 
disagreement in Region 3, something about what is going on 
there, what about this disagreement, how this disagreement is 
taking place, what the contexts of it are. Maybe you will just 
find out about this and look into this tomorrow.
    And enforcement officers there believe the law is being 
violated. You have some enforcement officers there who believe 
that this law is being violated. So I wonder if you can give us 
some insight into why no action has been taken, despite calls 
to do so from enforcement personnel.
    Ms. Jackson. Well, I will be in a better position after 
speaking directly to my staff tomorrow.
    What I want to also assure them from the highest level of 
the agency are those things I have said publicly, which is we 
are going to do a study. We are going to base our work on 
study. If at any time we find a situation that we believe 
violates the law, we need to be clear, and we need to either 
work with the State as the primary enforcer to take an action 
or to address it.
    I will say one other thing. When it comes to the water that 
comes back up and potentially goes into a treatment plant or 
surface water, that is regulated. That is absolutely regulated 
under the Clean Water Act. That is wastewater when it comes 
back up.
    Now, there are some places that reuse it. They call that 
recycling, and that may be an opportunity. But there are still 
wastewaters that are produced even in a recycling operation.
    So one of the things that I think is important is that as 
an agency we ensure that--for example, the New York office has 
made clear to New York State that EPA can at any time set 
additional standards for what we call pretreatment, for waste 
that may go to a treatment plant. So I need to speak to the 
professionals out in the Philly office and ensure that they 
hear from the top of this organization that there is no look-
the-other-way standdown. We need to do our jobs, and we need to 
do that with respect for the fact that, when a State is doing 
the work, we are not there to simply poke them but to ensure 
that we are providing information.
    So I am happy to report back, but I cannot give you much 
more than that, Mr. Hinchey.
    Mr. Hinchey. Well, Administrator Jackson, I just want to 
thank you very much. Thank you for everything that you are 
doing and thanks for everything that you have done here today. 
And I appreciate you going up to Pennsylvania tomorrow. Thanks.
    Mr. Simpson. Thank you.
    Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman. I apologize for the 
voice.
    First, I want to tell you that I had a good experience with 
the EPA out of the Denver office a number of years ago with 
regard to our requests that they work with my State's DEQ on a 
compliance issue that was right next to my land, which is right 
next to an oil refinery; and I am not sure that we ever would 
have got it solved without the EPA. So I want you to know I am 
not a person who is anti-EPA. I saw it work in our instance, 
and a cleanup occurred that I really don't believe ever would 
have happened but for the EPA.
    So please don't view me as a detractor, but I do have some 
questions about the efforts to prioritize funding that I 
believe may be detracting from efforts that really work on the 
ground. I am concerned with the boots-on-the-ground dollars 
that EPA uses that really do help businesses comply and 
communities comply with EPA regulations.

                     EPA RURAL WATER SYSTEMS BUDGET

    This first question is about rural water systems. Does your 
fiscal year 2012 budget set aside money to assist small rural 
water systems to remain in compliance?
    Ms. Jackson. Within the funding for the revolving funds is 
money for rural systems; and, of course, that is added to the 
money from USDA, who spends an awful lot of rural development 
money as well.
    Mrs. Lummis. In 2007, over 200 representatives and senators 
asked the EPA to fund technical assistance and training grants 
to small water systems; and I believe that the EPA chose, under 
your leadership, to go a different route. So I am going to 
write to you and work with you to encourage you to revisit what 
seems to be working well in my State of Wyoming with regard to 
training grants for small water systems, because these small 
communities just don't have the expertise.
    You were in Pennsylvania, correct?
    Ms. Jackson. I was in New Jersey.
    Mrs. Lummis. There may be some communities in New Jersey 
that even are small enough--you know what I am talking about. 
They really do struggle to comply, and they want very much to 
provide clean water to their water users, but that technical 
assistance just really does seem to go a long way. So we will 
visit further about that.

                 MAXIMUM ACHIEVABLE CONTROL TECHNOLOGY

    Another question I have is about MACT. Has EPA conducted or 
asked for an impact analysis of the proposed utility MACT rule 
on electric reliability jobs, consumer and business electrical 
prices?
    Ms. Jackson. Thank you.
    Yes. The MACT--the toxic rules for utilities is what you 
are asking for on that. And the air toxics rule is not out, but 
it will include a benefits analysis. It will include in its 
proposal a jobs analysis as well. But that is not yet out for 
public comment.
    Mrs. Lummis. And do you know when that is coming?
    Ms. Jackson. It is required by a court order for, I 
believe, March 16th.
    Mrs. Lummis. And you anticipate being able to meet that 
deadline?
    Ms. Jackson. Yes, yes.
    Mrs. Lummis. Did your agency consult with the SBA on the 
proposed rule?
    Ms. Jackson. Yes, we did a brief consultation, as required 
by law.
    Mrs. Lummis. And did they comment and could you provide 
those comments or should I follow up with you?
    Ms. Jackson. We will provide them. Absolutely.
    Mrs. Lummis. That would be great. I would be most 
interested.
    I have some other questions, Mr. Chairman, but my voice 
just isn't cooperating. So I will submit them in writing.
    And I do want to thank you very much, Ms. Jackson and Ms. 
Bennett, for being here today.
    Ms. Jackson. Gladly.
    And if you wouldn't mind, I do want to compliment--I 
visited your State 2 years ago, or last year; and your drinking 
water program is wonderful. Water is obviously quite a 
commodity there. So thank you. And feel better.
    Mrs. Lummis. Thank you very much.
    I served on the Board of Land Commissioners and the State 
Loan and Investment Board which administered the SRF, the State 
Revolving Fund for safe drinking water and the Clean Water Act. 
Mr. Chairman, I can tell you those programs in my State are 
hugely helpful at making safe drinking water available around 
the State of Wyoming. So it is a great program.
    Thank you very much.
    Mr. Simpson. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman.
    And, Madam Administrator, I am all that stands between you 
and freedom, so I will attempt to be--oh, and----
    Ms. Jackson. Do we need another miracle?
    Mr. LaTourette. You are in deep trouble.
    Mr. Simpson. Who knows? Mr. Moran is staying----
    Mr. LaTourette. I am glad that the distinguished ranking 
member is still here, because I don't think I can let him call 
H.R. 1 a dump truck several times without making an 
observation.
    H.R. 1 I don't think was a dump truck. The dump truck was a 
majority party that didn't produce a budget, didn't produce any 
appropriation bills of significance except on the defense side, 
and abandoned regular order. So I think what you saw in H.R. 1 
was pent-up frustration.
    Someone mentioned to me that we had more recorded votes 
during the consideration of H.R. 1 than we had in the entire 
year of 2010, the last year that Mrs. Pelosi was the Speaker of 
the House. And the reason for that, quite frankly, was that we 
didn't have any open rules.
    And I don't want to embarrass Mrs. Lummis, but she actually 
at a meeting I was at said, what is this open rule thing? What 
is an amendment? How long do I get to talk? And I think it is a 
sin that somebody who had been here for 2 years didn't know 
what an open rule was, but nobody did know what an open rule 
was.
    So I agree that a lot of stuff got piled onto H.R. 1, but 
it was 4 years of frustration on both sides of the aisle in not 
having decent ideas brought to the forefront. So if there was a 
dump truck, the dump truck was the decision by the previous 
majority to not finish its business and basically dump this 
thing on our lap with an expiration date of March the 4th, 
which was no accident.
    I always say that the former chair of this committee, Mr. 
Obey, is a very, very bright man. He knew exactly what he was 
doing. And that was the dump truck.

                  REGIONAL ENFORCEMENT AND REGULATION

    The question that I have for you, however--and I think it 
comes from Mr. Hinchey's observation when he talks about 
District 3. I have District 5 out of Chicago. And so the EPA 
structure has the headquarters and then 10 regional offices and 
then guidance from the Department of Justice.
    And while I think we all appreciate flexibility and 
regional nuances, one of the things you see--it is a lot like 
the different appellate districts in the United States District 
Court system, where you get all of these conflicting 
interpretations. And while regionalism is great, I think that 
some uniformity across the country when it comes to enforcement 
and regulation would be welcomed. You shouldn't have one set of 
rules for Mr. Hinchey in Pennsylvania and another set of rules 
for Ohio and Illinois, at least on the implementation.
    So I am just interested to see whether you think there is a 
variance between regions in terms of how different is a wetland 
in Ohio different from a wetland being interpreted by the 
regional office than in Wyoming and what are you doing to sort 
of strive that the agency speaks with one voice.
    Ms. Jackson. Thank you. Certainly our goal is consistency 
and enforcement and a level playing field across the country. 
And our challenges in meeting that goal are that oftentimes the 
vast majority, if not all, of the enforcement action is taken 
or undertaken by the States. And so EPA plays a sort of dual 
role, and we try to do them both well. First work in 
partnership on training or capacity building or technical 
assistance or interpretation of the law and also in oversight 
for a State that might, for whatever reason, not be so inclined 
to implement the Clean Water Act or Clean Air Act.
    Those are tough discussions. And the regional office, the 
district offices are on the front lines of trying to maintain 
those relationships over many, many elections. So those 
relationships are long standing. I worked for almost 12, 13 
years in our office in New York City, and so I have a very 
strong belief and respect for the hard work of the on-the-
ground work with the States. And usually those relationships 
are very good ones. So I think we play both those roles. I 
think we do have challenges.
    Our head of enforcement work, Cynthia Giles, who worked in 
the region, now works in the office. What we try to do is give 
national enforcement priorities because we could enforce--we 
have so many laws, and so many are important. We try to go 
where the public health threats are the greatest. And we hope 
to succeed, but we certainly are constantly trying to improve.
    There is actually money in the budget for an initiative 
that Cynthia Giles came up with which is based on transparency 
of information. Because what we find is that communities and 
States love to know what is being emitted into their air or 
their water; and if you can get people information on what is 
in their drinking water, they will do a lot of our work for us, 
because no one wants contaminated water. And so that regaining 
ground, she calls it, initiative is really based, first and 
foremost, on using electronic information, reporting data, and 
getting that out to the public.
    Mr. LaTourette. I appreciate that, and I would appreciate 
your further efforts in that.
    Some of the disconnect--when Mr. Cole talks about people 
getting upset, and Mrs. Lummis talks about the same thing, one 
of the things that the people in my part of the world and even 
further west, you have the east coast where they have paved all 
their wetlands and they have eaten all their endangered species 
and are now trying to impose a set of standards on--and it gets 
people upset. So we are just looking for evenhandedness, and I 
trust you to do that.
    Ms. Jackson. Thank you.
    Mr. Simpson. Thank you, Administrator Jackson.
    I am going to bring this to a close. You have been gracious 
to spend three hours with us this morning and address many 
concerns that, as you can tell, Members of Congress have that 
we hear these from our constituents and actually a couple of 
budget issues, also.
    I have a whole list of questions that go from everything 
that I will be submitting for the record. Again, some of them 
actually deal with the budget, and others are other issues that 
the EPA deals with.
    One of the things I do want to sit down with you--not right 
now, but at sometime either I will come down to your offices or 
you up to mine. But I would like to sit down and talk about how 
you come up with a cost-benefit analysis on the regulation, 
what goes into it, who makes those determinations, those type 
of things.
    And I use this example. We have talked many times about the 
arsenic rule and what it does to small communities trying to 
comply with this. Sometimes when they are trying to reduce 
their arsenic levels from 12 or 14 parts per billion down to 10 
parts per billion, there is an incredible cost to getting those 
last few parts per billion down. Do you take into 
consideration--and these are the questions we will discuss, but 
do you take into consideration the fact that a city council 
sitting here of a town of 500 or 600 or 700 people has to 
decide that their volunteer fire department is going to use 
buckets instead of using fire equipment because they can't 
afford it anymore because they are putting all their resources 
there. And that affects human life, also. They can no longer 
have their police officer because they have to comply with 
these standards. That affects human life, also. Do those types 
of things come into the consideration, the decisions that they 
have to make because of the imposition some of these rules have 
on them?
    The same would be true of businesses. They have to make 
tradeoffs and decisions as they try to comply with some of the 
rules and regulations that are coming down.
    Again, I do want to thank you for being here. I want to 
associate myself with the words that Mr. Cole had, that the 
concerns being expressed are real.
    And you are right. If you go out and ask the American 
people, do you want clean water? Do you want clean air? 
Everybody does. Every Republican in Congress, every Democrat in 
Congress wants clean air and clean water.
    We sometimes have differences of opinion about the impacts 
of some of the regulations and how we get there and the costs 
of some of those regulations. So it is not a matter of whether 
they are in favor of clean water and we are not or we are in 
favor of clean air and they are not. It is trying to achieve a 
common goal.
    And one of the things I have heard--and maybe the best 
description of all of the concern out there that I have heard--
and I have mentioned it to you before. Whenever I go to a 
meeting, I don't care whether it is with local city councilmen, 
whether it is with the chambers of commerce, whoever it is, 
once the word EPA comes up, that is the rest of the discussion. 
That is the concern that is being expressed out there.
    And when I talk about funding and reducing funding that we 
had to do in H.R. 1 and what we will have to do in the 2012 
budget to get our budget back in balance, some will raise their 
hand and say, defund the EPA. And it is the only applause line 
during this whole thing. That is the kind of concern that the 
American people have. They don't feel like the EPA is working 
in concert with them to try to clean up the air and water. They 
feel like the EPA is imposing on them, and sometimes for 
limited benefit. And if we don't change that attitude around, I 
fear that the EPA is going to have more difficulty trying to do 
its job.
    But one person described it to me as if you look at some 
regulatory agencies like they use the NRC, Nuclear Regulatory 
Commission, they set a standard, and then business will come in 
to them and say, okay, this is the standard we can meet. They 
don't impose how you are going to meet the standard. They set 
the standard and let businesses develop the plans; and they 
will sit down and discuss, yes, this will do it; no, this won't 
do it.
    They say the EPA is different. They set a standard, and 
then they tell you exactly what you have to do to meet that 
standard, and it prevents innovation and development of new 
technologies and new ideas of how to meet certain standards out 
in the real world. And that is a difference in attitude.
    So I want to work with you to try to hopefully solve some 
of the problems and hopefully address some of the concerns that 
I think a vast majority of American people have about the way 
that the EPA is moving and addressing some of the concerns that 
we have.
    So I appreciate it. Thank you very much for being here 
today. I know it has been a long time. Three hours sitting 
there is not always easy. Thank you.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                            Tuesday, March 8, 2011.

             DEPARTMENT OF THE INTERIOR 2012 BUDGET REQUEST

                               WITNESSES

HON. SALAZAR, SECRETARY, DEPARTMENT OF THE INTERIOR
DAVID HAYES, DEPUTY SECRETARY, DEPARTMENT OF THE INTERIOR
PAMELA HAZE, DEPUTY ASSISTANT SECRETARY--BUDGET, FINANCE, PERFORMANCE 
    AND ACQUISITION

                  Opening Remarks of Chairman Simpson

    Mr. Simpson. The committee will come to order. Mr. 
Secretary, I would like to welcome you along with David Hayes 
and our good friend, Pam Haze, to today's subcommittee hearing 
addressing the fiscal year 2012 budget priorities for the 
Department of Interior. Let me begin by wishing you a belated 
happy birthday. I understand last week was your birthday. Happy 
birthday from all of us.
    My colleagues and I hope to cover a lot of ground with you 
today on energy production, grazing, land acquisition, climate 
change, and other issues. From our recent conversations I know 
that you are continuing to set an ambitious agenda for the 
Department on many fronts, and while I do not necessarily agree 
with every decision you have made, I appreciate the fact that 
we have had a productive conversation about these issues. It is 
in that spirit that we look forward to today's hearing.
    I would like to begin by making several points on a few 
specific issues before we receive your testimony. First, it is 
no secret the western members of both parties, including 
myself, have some very strong objections to your Wild Lands 
Secretarial Order granting BLM the authority to identify and 
manage lands in the west as wilderness. We have talked about 
this, and I believe, frankly, it is a troubling precedent. I 
believe that only Congress has the authority to make new forms 
of land designations, and I can guarantee you that any bill 
emerging from this subcommittee this year will probably include 
a funding prohibition relating to Wild Lands policy. If not on 
the underlying bill that comes from the committee, then it will 
be offered on the floor certainly by some western member and 
will probably be adopted.
    Secondly, the second largest increase in the Department's 
budget request falls within the Land and Water Conservation 
Fund, which is fully funded at $900 million. My biggest concern 
is that the budget request proposes historic increases for land 
acquisition while also proposing dramatic reductions in other 
areas like maintenance of existing facilities, construction 
which is reduced by 46 percent Department wide, and wild land 
fire. The DOI budget eliminates rural fire assistance and cuts 
hazardous fuels funding by $49 million.
    A reasonable person could conclude the Department is 
increasing land acquisition too quickly and at the expense of 
other very important deserving priorities.
    The last issue I will mention is the most important, and 
that is energy. Oil prices have risen by more than 10 percent 
this year, and with the unrest in the Middle East and north 
Africa, we are already seeing $4 a gallon gas in some areas of 
the United States. According to a March 3 Raspis poll, 58 
percent of the public is now convinced that they will be paying 
$5 for a gallon of gas by July. The survey also found that 76 
percent believe the United States does not do enough to develop 
its own gas and oil resources.
    The moratorium put in place following the Deepwater Horizon 
accident was lifted last fall, but the Administration has 
issued just one Deep Water permit in the Gulf since that time, 
and that permit was issued just last week. A federal judge has 
called this de facto Deep Water drilling moratorium 
unreasonable, unacceptable, and unjustified.
    The public will have no patience and Congress will have no 
patience for more delays and more excuses as oil prices begin 
to rise, especially when we have untapped resources here in the 
United States not being utilized. We need to pursue a domestic 
energy production on the grand scale of the Manhattan Project 
or putting a man on a moon so that we can put people to work, 
boost the domestic energy production, and lessen our dependence 
on foreign oil.
    In closing, Mr. Secretary, no hearing with you would be 
complete without expressing our thanks to your fine 
professional staff. The truth is that the committee could not 
do its work without the assistance of Pam Haze and the folks in 
your budget shop and other professionals who work every day to 
help find solutions to some very difficult challenges, and we 
welcome you here this morning.
    Mr. Simpson. And with that I am happy to yield to the 
gentleman from Virginia, Mr. Moran, for an opening remark.

                  Opening Remarks of Congressman Moran

    Mr. Moran. Thank you very much, Chairman Simpson. Secretary 
Salazar, it is nice to see you, and thank you for your 
leadership and that of Mr. Hayes, our Deputy Secretary, and of 
course, Pamela Haze, our Deputy Assistant Secretary, for all 
things, fiscal management as well as the budget.
    The Interior Department, as we all know, is directly 
responsible for managing 20 percent of America's land as well 
as all of its Indian trust responsibilities. It is a terribly 
important mission, generates millions of jobs, produces energy 
for our economy and to maintain our standard of living and is 
entrusted with protecting our natural heritage for future 
generations.
    As we all saw far too plainly after the BP Transocean 
Deepwater Horizon oil disaster, the way we manage these 
resources is terribly important and can have huge consequences 
if not done correctly.
    Last year I had a habit of quoting a great conservationist 
at the beginning of each hearing. I have one for us, and it is 
from one of my very favorable, most favorite Republican, 
actually he and Abraham Lincoln are two of my favorite 
presidents whether they be Republican or Democrat, this is 
Teddy Roosevelt's quote. So let me quote this quote, and listen 
closely, Mr. Lewis, if you would not mind. I think this is 
terrific. ``The greatest good for the greatest number includes 
the number within the womb of time compared to those which now 
alive form but an insignificant fraction. Our duty to the 
whole, including unborn generations, bids us to restrain an 
unprincipled present-day minority from wasting the heritage of 
these unborn generations. The movement for the conservation of 
wildlife and the larger movement for the conservation of all of 
our natural resources is essentially democratic in spirit, in 
purpose, and in method.''
    So for anyone that wants to read further, they can get it 
out of Roosevelt's publication called, ``A Book Lover's 
Holidays in the Open.''
    Following a marathon of public listening sessions, the 
Secretary has moved forward with a responsive plan to increase 
funding for Land and Water Conservation Fund. I know you 
received an enormous amount of public support for the Land and 
Water Conservation Fund, and so you have raised it to a $900 
million authorized level.
    But moving in the opposite direction the new House Majority 
reduces the same account in the fiscal 2011 budget to less than 
$57 million, just virtually wiping it out. My heart, of course, 
and I know in this respect I speak for the ranking member of 
the full Appropriations Committee, who I hope we will hear from 
also, but it is with the Secretary's budget. That is the 
responsible budget. But, of course, the increase comes at the 
expense of other ongoing Interior Department programs.
    While we need to see that each and every federal dollar is 
wisely spent, we also do not want to abandon the opportunity to 
invest in the proper management of our priceless natural 
resources and ensure that essential habitat, scenic vistas, 
outdoor recreational opportunities that are now at risk of 
disappearing are not lost to future generations. The fragile 
nature of our current economic recovery and quite frankly, the 
fragile nature of much of our environment, means that the 
decisions we make in this room will have a profound long-term 
impact on the United States of America, especially in the west 
and the south, where changing climate is altering landscapes, 
forests, and fresh sources of water.
    Last week we heard from the GAO and the Interior 
Department's Inspector General, and it was a very informative 
hearing, and I thank the chairman for holding it. One thing 
that we learned is that existing law and policy does not allow 
the American taxpayers to recoup a fair market price on the 
extensive fossil fuel and hard rock minerals that industry 
extracts from the publicly-owned lands in this country. The 
royalty rate is too low, which is clearly shown by the GAO 
testimony. States get a higher royalty rate when they manage 
similar natural resources on state-owned lands, not to mention 
what the private sector will charge.
    We also need to determine if the fees imposed on the oil 
and gas industry to drill in public waters and on public lands 
reflect the current value of that oil and gas.
    Now, one other thing in terms of the Wild Lands Policy, 
because this, I know, we are going to get into more discussion, 
I suspect you have the votes, Mr. Chairman, but the Wild Lands 
Policy is not something new. I am not sure why this change of 
Secretary Norton's, which was a recent policy change in the 
Bush Administration, why it is such a big deal for the Forest 
Service planning has considered wild values of land since the 
1920s. So it is consistent with overall Federal policy.
    But we will have further discussion on that. I am glad we 
are having this hearing today, of course, and hearing from the 
Secretary, and I hope we can continue our commitment to 
America's great natural resources, and I thank you, Mr. 
Chairman.
    Mr. Simpson. Thank you. Mr. Dicks.

                  Opening Remarks of Congressman Dicks

    Mr. Dicks. Thank you, Mr. Chairman. I appreciate you 
holding this hearing, and I want to welcome Secretary Salazar, 
Deputy Secretary Hayes, and Deputy Assistant Secretary Pam 
Haze, who we worked with for many years and appreciate greatly.
    I want to join those welcoming you to testify before the 
Interior and Environmental Appropriations Subcommittee, to hear 
your views on the ongoing effort to finalize the budget for 
fiscal year 2011, and to hear about the Obama Administration's 
budget proposal for fiscal year 2012. I want to echo the 
sentiments of Mr. Moran in highlighting the difference between 
the Obama Administration's budget proposal for fiscal year 
2012, and the bill the House passed last month to fund the 
government the remainder of this fiscal year.
    I do not think that this is hyperbole to label H.R. 1 as 
one of the most short-sighted bills with regard to the 
environment that has ever been considered in the Congress. H.R. 
1 cut more than $860 million from the 2010 spending levels for 
the Department of Interior. In order to reach this level of 
cuts H.R. 1 eliminated the Fish and Wildlife Service State and 
Tribal Wildlife Grant Program, as well as the North American 
Wetlands Conservation Program.
    In addition, this legislation would cut climate-change-
related activities in the Department of Interior by nearly 30 
percent. If one of the definitions of conservatism is to 
preserve resources for future generations, then unfortunately 
this bill does not do that.
    And, again, I want to point out that cutting spending in 
the Department of Interior and across the federal budget is the 
wrong economic policy. I am joined by a large preponderance of 
economists in the belief that the Republican plan to cut and 
grow does not work in the real world.
    In contrast, the Obama Administration's fiscal year 2012 
budget request would provide modest growth to the Department of 
Interior, which is a much more responsible position. Before I 
list some of the budget highlights contained, I need to remind 
everyone that during the previous Bush Administration, spending 
for Interior programs were cut more than 16 percent in real 
terms.
    Highlights of the fiscal year 2012 budget request include 
full funding of the Land and Water Conservation Fund, an actual 
increase in the State and Tribal Wildlife Grant Program, and a 
small increase for the North American Wetlands Conservation 
Program, which, again, was eliminated in H.R. 1. The 
Administration's fiscal year 2012 budget request also increases 
the USGS National Climate Change and Wildlife Science Centers 
by $10 million to $25 million.
    I also look forward to hearing about the Administration's 
proposal for its Great Outdoor Initiative and what the Interior 
Department is going to guarantee that energy extraction from 
public lands and off shore areas is done in a way that is 
environmentally sound and is a good deal to the taxpayer.
    And I agree with Mr. Moran. I think that we are not getting 
adequate royalties, and we should do something about that in 
this time of concern about the deficit. The royalties would 
help us reduce the deficit, and it would be a positive factor.
    Thank you, Mr. Chairman.
    Mr. Simpson. Thank you. Mr. Secretary, looking forward to 
your testimony. The floor is yours.
    Secretary Salazar. Thank you very much, Chairman Simpson. 
May I ask Your Honor how long I have for my opening statement?
    Mr. Lewis. An hour and a half.
    Secretary Salazar. An hour and a half?
    Mr. Simpson. We will generally give the Secretary 15 
minutes or so.
    Secretary Salazar. Okay. Thank you.
    Mr. Simpson. We are not going to call you on time.
    Secretary Salazar. Okay. That is good. I just wanted to 
make sure that I was doing what the chairman or the ranking 
member would want me to do.

                 Opening Statement of Secretary Salazar

    Let me, first of all, say to you, Mr. Chairman, thank you 
for your leadership of this committee and Congressman Moran and 
the Ranking Member, thank you for your leadership as well. In 
the same spirit, Chairman Simpson, you and then Chairman Dicks 
and I had meetings about the future of Interior and the budget, 
I think this committee has long recognized the importance of 
how we husband the natural resources of America and American 
citizens. The bipartisan spirit which the two of you templated 
last year is hopefully something that can continue this year as 
we deal with some very difficult times across the country on 
many of the issues you addressed ranging from energy to what we 
do with respect with the conservation agenda for the country. 
Thank you for your service from all parts of the country and 
for all you do. I look forward to engaging in this 
communication this afternoon, as well as in additional 
communications moving forward in the months and perhaps years 
ahead.
    Let me also thank your staff because without the staff on 
both the majority and the minority sides we would not be able 
to have the kind of oversight and the continuity of the 
programs that we have had. I think on both sides we have seen 
great work on behalf of the staff working with Pam Haze, who 
has worked for multiple administrations, Democrats and 
Republicans. To my Deputy Secretary, David Hayes, I appreciate 
how hard he has worked at being a real problem solver for the 
American people on so many fronts over the last 4 years.
    We have tough problems ahead of us no doubt, both budgetary 
and policy issues that we need to address, but at the end of 
the day I do believe and have confidence that in working 
together we can resolve these issues in the best interest of 
the American people.
    As Secretary of the Interior let me assure you as I have 
now begun my third year of service on behalf of the American 
people, I value the opportunity and it is a privilege to serve 
all of you and to serve the American people. My job, I think 
you have heard before, is one that I define very simply. It is 
to be the custodian of America's natural resources and 
America's natural heritage.
    I work on it every day. I am proud of the fact that in each 
of America's 50 states and out into the oceans there are great 
responsibilities that I have on behalf of the American people. 
From the north slope of Alaska and down to the Everglades to 
the great national parks of Idaho and Virginia, to 553 wildlife 
refuges. We do a lot on behalf of the American people. We 
certainly could not do it without the help of this committee, 
and we need to continue to move forward on that agenda.

                              2012 BUDGET

    Let me say, at the bottom line as I look at this budget and 
other issues we will discuss here, it is a budget about the 
creation of jobs. It is a budget about the creation of jobs 
relative to a robust energy future for the United States of 
America, both onshore as well as offshore. It is about the 
creation of jobs as we look forward to the renewable energy 
future of America which affects many of your states. I would 
say, in fact, all of your states. It is about a robust 
conservation agenda because of the number of jobs associated 
with hunting and fishing and biking and the many aspects that 
really make tourism, both an economic generator as well as a 
conservation legacy we want to pass onto our children.
    Our budget for 2012 as presented to this committee and to 
the Congress by the President is essentially a freeze budget. 
It is a freeze budget. Inherent in this freeze budget we have 
done what the President instructed us to do, to go over the 
budget of the Department of Interior line by line and see where 
it is that we could make cuts and how we could find 
efficiencies which is something that this committee I am sure 
has wanted us and instructed us to do and that is to find 
savings where we can find savings.

                              BUDGET CUTS

    The cuts presented in this budget are a total of $1.1 
billion. That is a significant amount of money given the size 
of this budget, and these are not just the kinds of cuts that 
are ordinary. These are significant cuts. When you look at what 
we did on the administrative side of the budget, which is a 
good place to always look for greater efficiencies, you have a 
$42 million cut in travel by the Department of the Interior. 
Even in these days of great need for information technology, we 
have been able to find savings in information technology that 
will save the taxpayers $36 million. We have reformed and are 
reforming the procurement practices of the Department of the 
Interior so when these procurement reforms are put into place, 
there will be an additional $53 million in savings for a total 
of $179 million.
    You can go through the cuts, and we can tell you we have 
tried to make some tough choices but also have made some 
reviews of the Department of Interior so we can be a more 
effective government on behalf of the American people.

                                 ENERGY

    I would like to speak briefly about energy because that is 
an issue which all of you are interested in and concerned 
about, and I am sure will be focused on in some of your 
questions. First, with respect to conventional energy, we have 
had a robust program on energy because we believe it is 
necessary for us to be able to power the economy of the United 
States. All of you have lived through the very difficult times 
in the last year where we have had the most difficult economic 
times that this country has seen probably since the Great 
Depression. We are coming back, and we recognize the importance 
of making sure that we are powering our economy, and that does 
include the importance of energy, both conventional as well as 
renewable.
    The oil and gas side of our program has, I think, been 
clear. To have a robust oil and gas program for the United 
States, both in America's oceans as well as on America's lands. 
With respect to America's oceans and the production that we 
have in the Gulf of Mexico, which is about 30 percent of the 
oil that is produced domestically and about 11 percent of our 
natural gas, it is important we have the support of this 
committee and of the Congress if you want us to move forward 
with a robust energy program in the Gulf of Mexico. The Gulf is 
a huge and important resource for us, but you lived with me 
through the Deepwater Horizon nightmare, which was a national 
crisis that affected each and every one of you. I am sure that 
you agree that we ought to move forward in having a safe 
program that is safe to workers as well as protective of the 
environment. The funding request that we have here for the 
Bureau of Ocean Energy Management, Regulation and Enforcement 
will allow us to move forward in that regard.
    In addition, we will continue to move forward with a robust 
onshore program, leasing public lands through the Bureau of 
Land Management and the U.S. Forest Service. I can get into the 
specifics of the numbers of oil and gas permits and acreage 
that we have leased out.
    One statistic that sticks out in my mind because I think it 
paints a picture of what is happening on the public land in the 
west. In 2010 alone we have issued over 5,000 permits for 
drilling on the public lands onshore. In 2011, the year that we 
are in, our hope is that we exceed 7,000 permits onshore. Those 
are statistics that I think illustrate the fact that the 
President's program has included a robust oil and gas component 
to the energy portfolio of America.
    With respect to renewable energy, it has been a priority of 
mine since I became Secretary of Interior. It is a high 
priority of the President of the United States, and a high 
priority of the members of this committee as well. I am proud 
to report that in 2010, we were able to permit about 3,700 
megawatts of renewable energy power, much of it solar energy in 
the southwest, particularly in the areas of Arizona, 
California, and Nevada, where there is a huge amount of 
interest and opportunity, as well as wind energy in places like 
Wyoming and all across the country as well as in the Atlantic 
offshore.
    Our 2012 budget will continue to build on that renewable 
energy effort with the goal of having 10,000 megawatts of 
renewable energy power that has been authorized on the public 
lands of America and America's oceans by the end of 2012.

                              CONSERVATION

    I would like to briefly move from energy to saying a word 
or two about conservation. I think, the conservation agenda for 
this country is the greatest precedent this country has 
recognized, and is a very important agenda for future 
generations. As Abraham Lincoln during the middle of the Civil 
War, which was the most difficult crisis that this Nation has 
ever gone through as a Nation whose future hung in the balance, 
set aside the lands of Yosemite because he thought those lands 
should be forever preserved for the American people.
    It was at the beginning of the last century when Teddy 
Roosevelt became the wilderness warrior on behalf of the 
American people when he saw the wasteland that was occurring as 
America continued to develop a sense of protecting the great 
lands for hunters and fishermen and others who enjoyed the 
Great Outdoors of America, and the same with Franklin Roosevelt 
during the Great Depression. During those very difficult times 
they became the great conservation leaders of America.
    The investments that you see here with respect to 
conservation are continuing with that tradition, and let me say 
that at the end of the day this is about jobs. When you look at 
outdoor recreation, the outdoor recreation foundation itself 
has studied the number of jobs that come from outdoor 
recreation. It is about six and a half million jobs created 
just from outdoor recreation every year. That does not account 
for all the other jobs that come with heritage tourism in each 
one of your states.
    When we look at the jobs that are created through 
conservation investments and the investments that are made in 
this budget, it is part of making sure that we stand up the 
economy, again, because these are jobs that cannot be exported 
elsewhere.

                                 WATER

    Finally, I want to make a comment with respect to water. 
For many of your states, Congressman Calvert and others, I know 
how carefully you watch the water issues of our country. We 
have moved forward with a WaterSMART Program with Reclamation 
where the investments that Congress has authorized are already 
paying significant savings. In 2010, 37 WaterSMART projects 
will enable us to save about 490,000 acre feet of water because 
of the efficiencies that are being put into place. We need to 
continue those kinds of investments in the water infrastructure 
and water programs of America.
    In conclusion, Mr. Chairman and Ranking Member Moran and 
all the members of the committee, we look forward to working 
with you on this budget as we address the very difficult issues 
both budgetary and policy, that the United States of America 
faces today.
    [The statement of Ken Salazar follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Simpson. Thank you, Mr. Secretary. I appreciate you 
being here again today.

                               OIL SPILLS

    First let me say thank you to the employees at DOI for the 
work they did during the Deepwater Horizon disaster that 
occurred. Most people do not understand how much time you and 
DOI employees spent down there trying to deal with that mess, 
and there are always fingers to point, saying we could have 
done this or should have done that or whatever, but it is a 
difficult time reacting to a natural disaster like that. And I 
know I kept in close in contact with many of the agencies and 
stuff that were working down there, but I do want to thank you 
and the employees publicly for the work they did during that 
difficult time.

                         BOEMRE REORGANIZATION

    Having said that, you have proposed a reorganization and 
are reorganizing MMS to what is it now, BOEMRE. When we spoke 
with the IG when we had a hearing with the IG and the GAO, they 
said a couple of things. One was that we are uncertain about 
royalties that the Federal government is receiving, whether it 
is the correct amounts, because we do not have a way of making 
sure that what is being reported is the actual amounts. Not 
that anybody out there or any company is trying to falsify 
records, but sometimes it is just inaccurate. We have no way of 
checking that to make sure that we are getting the right amount 
of revenue.
    And secondly, that this organization is having a difficult 
time keeping the people onboard so that we have professional 
people onboard, experienced people, to oversee the oil and gas 
industry, particularly in the Gulf, you know, offshore.
    Could you go through the reorganization, what you plan to 
accomplish with this reorganization, how you think it might 
improve our oil and gas leases, and so forth?
    Secretary Salazar. I would be delighted to do so, Chairman 
Simpson. First, let me just say thank you for the comment on 
the Deepwater Horizon. It did occupy a significant amount of 
time of more than a thousand employees of the Department of 
Interior. We did it for the right reasons. We have over 40 
national wildlife refuges and national parks in the Gulf, and 
it was important to protect the people and the environment of 
the Gulf. It was also important for us to make sure the 
production in the Gulf of Mexico continued, and as you know 
from the statistics I think have been shared with you, 2010 
continued to be a time where we continued to produce a 
significant amount of oil and gas from the Gulf of Mexico. Even 
in the midst of crisis we were able to continue that effort and 
continue to do the kinds of changes that will assure us that we 
have safe development of our oil and gas in the Nation's oceans 
in the future.
    With respect to your question on revenue and on the 
reorganization, let me take the revenue side first. We have 
been reforming the revenue side of what the Department of 
Interior does over the last several years and have as part of 
the reorganization created an Office of Natural Resources 
Revenue. As a Department with such an important mission, which 
is to collect more money for the United States of America and 
its taxpayers than any other agency other than the Department 
of the Treasury, the Department's mission, which we take very 
seriously, had difficult problems when I became Secretary of 
Interior.
    The elimination of the Royalty-in-Kind program as well as 
the implementation of the recommendations from the GAO and 
others have been those efforts that have helped us move forward 
to achieve the goal here, and that is to get a fair return to 
the American taxpayer. I will have David Hayes, my Deputy 
Secretary, comment on that in just a minute because we are 
conducting a study on returns, and I want him to comment on 
that if he will for a second.
    On the reorganization we are proposing to all of you, the 
essence of what we did there was to take a look at how other 
countries had organized themselves with respect to ensuring 
they had safe ocean energy exploration drilling, and production 
and looked at the models of Norway and the UK and other places 
as well as our own issues here internally in the United States. 
The result is we have de-conflicted the missions that existed 
with MMS for the last 30 years, ever since it was set up by 
Secretary Watt back in the beginning of the 1980s.
    The missions we saw were first a mission of revenue 
collection on behalf of the American taxpayers, and that part 
of the agency was completely split off, and those are the 
revenue collectors. They have nothing to do with the permitting 
or with the environmental reviews. They simply are the money 
collectors. That mission is de-conflicted from the other 
missions of the Bureau of Ocean Energy Management, Regulation 
and Enforcement.
    The second de-conflicting part of this effort has been to 
develop a program within the Bureau of Ocean Energy Management, 
Regulation and Enforcement that actually does the management of 
the leasing programs, and will go into the Bureau of Ocean 
Energy Management.
    The other part of the mission will be to make sure we have 
the safety and environmental enforcement. These are essentially 
the cops on the beat to make sure there is compliance with 
regulations and with the requirements of federal law.
    We are in the midst of the implementation of that 
reorganization, and part of it has been completed. We hope to 
be able to complete the rest of it in this fiscal year.
    I would like Deputy Secretary Hayes to respond as well.

                               ROYALTIES

    Mr. Hayes. Thank you. I will be very quick. On the 
royalties side, we are finishing a very substantial study to 
make sure our royalty rates onshore are competitive and fit 
with what private parties are getting as well. We are proposing 
a rule in the near future to consider raising the onshore 
royalty rates from the 12 percent that goes back to 1920, 
substantially lower than the offshore. That is in the offing, 
and we will have a public process in the near future on that.

                           EMPLOYEE RETENTION

    The final point speaks to Chairman Simpson's point that it 
is hard to keep folks on board because of the salary issues, 
these are serious issues. We were supporting the legislation 
proposed last year that would provide more flexibility in our 
hiring, and of course, there is a budgetary aspect of this. 
Because of the thin funding traditionally of MMS, we have not 
been able to be as aggressive as we would like to with hiring. 
Director Bromwich is very much involved in recruiting good 
folks, but we will need your help in order to get those folks 
onboard and keep them.

                               PERMITTING

    Mr. Simpson. Mr. Secretary, could you tell me what is the 
outlook for issuing permits in the future, the deep water 
permits and others in the Gulf? There has been criticism that 
there has only been one permit issued since the moratorium. 
That was last week, I guess. What is the outlook in the near-
term future?
    Secretary Salazar. I think the outlook is good. In the 
shallow water part of the Gulf of Mexico we have issued 37 
permits for those rigs so they can move forward to drilling. In 
the deep water we moved forward with the first one last week 
and expect there will be others that will be forthcoming, and 
they will be the templates for how we issue oil and gas 
drilling permits in the deep water.
    I think, Chairman Simpson, for you and the members of this 
committee, the last thing you would want us to do is to issue a 
permit that essentially creates another Macondo Well situation. 
In order for us to make sure that that does not happen, we 
needed to look at what the oil spill containment capabilities 
were within the oil and gas industry and the Gulf.
    Deputy Secretary Hayes, Director Bromwich, and I on Friday 
a week ago, were in Houston where we spent a whole day with the 
Marine Well Containment Corporation, as well as with the Helix 
Containment Program, where they gave us a preview of what it is 
they have manufactured to deal with another Macondo Well oil 
spill, and those mechanisms are just coming onboard now. I 
applaud the industry for having moved forward with it, and 
based on those programs we expect to be able to issue 
additional permits in the deep water.
    I will say this, we still have significant additional work 
to do. Industry has significant additional work to do so we can 
ensure the American people we do everything we humanly can do 
to prevent another Macondo Well Deepwater Horizon national 
crisis again.
    Mr. Simpson. Thank you. Mr. Moran.

                           HOUSE RESOLUTION 1

    Mr. Moran. Mr. Secretary, by now you have had a chance to 
look over the full-year continuing resolution, referred to as 
H.R. 1, passed the House. It includes a dump truck load of 
anti-environmental riders. Never before have so many bad 
provisions been discussed in so little time. Literally in the 
early hours of the morning when sane people were sleeping, I 
trust you have a sufficient life that you were asleep, Mr. 
Secretary, instead of watching us debate these things, but 
besides the objectionable environmental riders, H.R. 1 does 
real harm to essential Interior Department programs.
    So can you please tell us about some of the cuts that this 
bill contains? For example, which are worse, the elimination of 
the Land and Water Conservation Fund or the elimination of 
State Wildlife Grants or many of the other reckless cuts?
    Would you identify some of the cuts that are of greatest 
concern in H.R. 1 today, Mr. Secretary?
    Secretary Salazar. Thank you, Ranking Member Moran. Let me 
just say, I think it is going in the wrong direction while the 
principle of trying to get Deficit Reduction is something which 
I think has bipartisan support. I think the cuts included in 
H.R. 1 as they affect the Department of Interior will be a part 
of what keeps our economy from moving forward.
    Let me be specific. When you think about the hunting 
heritage of America, the 87 million Americans who hunt and fish 
and the money they spend in hunting and fishing, and the fact 
that the conservation programs we have in this country have 
been built on the backs of hunters and anglers of America for 
over 100 years to date. The $48 million cut that is proposed in 
the North American Wetlands Conservation Fund will essentially 
keep us from protecting 400,000 acres of wetlands.
    To the duck hunters and to others who view the importance 
of these conservation lands as recreation but also to everybody 
who should view them as an important economic contributor to 
the Nation, I think that is one great example of a cut which is 
misplaced.
    Mr. Moran. Absolutely. The anti-environmental riders beyond 
the program cuts that you mentioned, we tried to restore that, 
we lost overwhelmingly, of course, but we tried to take money 
from the Diesel Emission Program, which the Administration does 
not seem to support next year, but we failed in that. But it 
seems that many of our dirtiest industries have stepped forward 
to undo decades of bipartisan pro-environmental progress.
    Which parts of H.R. 1 do you think are the greatest 
problems for the Interior Department and our Nation's 
environmental and public health? Is there anything that stands 
out in that regard in terms of the environmental riders?

                               WILD LANDS

    Secretary Salazar. Let me take the opportunity, Chairman 
Moran, maybe to answer a question which I know the chairman and 
others have asked, and it has to do with respect to wild lands 
and the concerns I have heard from some members of Congress.
    The fact of the matter is how we take care of our public 
lands is a very important responsibility which we at the 
Department of Interior have and which this Congress has. The 
Wild Lands Order which I issued in December is simply an effort 
to, one, honor what the law requires of us. The courts have 
said we have to do this in the BLM, and we have not been doing 
it. To create an inventory of these wild lands, and in addition 
to that, to make sure that we are doing it with the kind of 
public outreach that is required in the process of putting 
together these plans around the country, so there will be 
significant outreach to the governors and to affected 
communities before anything is put into place.
    It does not at all infringe on the authority of the 
Congress. We recognize and I submit to all of you here it is 
only the Congress that can designate wilderness areas, and 
indeed, even in this Congress I have already seen legislation 
introduced by both Republicans and Democrats to designate 
certain areas as wilderness.
    Our approach on the Wild Lands policy has been to try to 
get it from the bottom up. What it is communities want us to do 
with these places that are special and should, in fact, be 
protected. I think there is good bipartisan support for that 
concept. You know, I believe the Wild Lands Order amendment in 
the CR gets in the way of executing that policy and the law.
    Mr. Moran. Mr. Chairman, I just have one other question for 
this round, if you do not mind.

                        AMERICA'S GREAT OUTDOORS

    With regard to America's Great Outdoors, you have talked 
about a substantial funding increase for the national parks, 
stateside park and recreation grants. You have got a pretty 
significant increase to a total of $200 million and 60 percent 
of it is going to be competitive.
    Some of my good friends on the other side have said that we 
should not be buying anymore land when we cannot afford to take 
care of what we have. That is the response we are going to get.
    But we are not really talking about buying new national 
parks and wildlife refuges, are we? Does not the Land 
Acquisition Program purchase in-holdings which can increase 
management efficiency and protect sensitive areas of high 
interest to the public? Would you just address that bit within 
the context of the Great Outdoors Program, Mr. Secretary?
    Secretary Salazar. We will, Congressman Moran, move forward 
with land acquisition that I think is best exemplified by what 
the ranching community did in the Flint Hills of Kansas where 
I, along with former Senator Brownback and the Kansas 
Cattlemen's Association and Livestock Growers and the Farm 
Bureau inaugurated a national conservation area of 1.1 million 
acres by having the ranchers themselves preserve these ranches 
in working order so they can pass it onto their fifth and sixth 
generations and preserve the last of the remaining tall grass 
prairie habitat in the United States of America.
    It is a good thing for conservation and for hunters and for 
anglers. It is also a good thing for the ranchers who care so 
much about the preservation of their heritage. That is the 
approach at the heart of these investments from America's Great 
Outdoors.

                              IN-HOLDINGS

    With respect to in-holdings, there are crown jewels in our 
National Wildlife Refuge System, as well as the National Park 
System, which we need to make sure we are protecting. Part of 
what is in this budget is the preservation of the Grand Teton 
National Park in dealing with the in-holdings within Grand 
Teton. I do not think that Americans would want to see those 
in-holdings essentially become the trophy homes of people, 
because I think it is inherent in our concept of our national 
park systems that those national parks belong to the people of 
America for their enjoyment.
    Mr. Moran. Very good. Thanks very much, Mr. Secretary. 
Thank you, Mr. Chairman.
    Mr. Simpson. Mr. Rogers.

                      STREAM PROTECTION ZONE RULE

    Mr. Rogers. Mr. Secretary, thank you for being here. Let me 
talk to you a bit about the Stream Protection Zone Rule at OSM. 
In December, '08, OSM issued a clarification of the stream 
buffer zone rule after a 5-year process that included 40,000 
public comments, two proposed rules, and 5,000 pages of 
environmental analysis from five different agencies.
    That final rule in '08 provides coal operators with greater 
leeway with the 100-foot buffer provision if compliance is 
deemed impossible, but it requires mining companies to minimize 
the amount of debris they dump outside the mined area and to 
minimize the footprint of the disposal area.
    That clarified and codified surface mounting practices that 
had been in effect over 30 years. Now, despite finalizing that 
rule in just '08, after all of that work, OSM is proposing to 
amend the rule already, which by its own admission is much 
broader in scope than the 2008 stream buffer zone rule. This 
proposed rule would result in significant changes to 15 major 
elements of its coal-mining regulatory program, representing 
the largest rewrite of surface mounting regulations in the past 
30 years.
    And according to the Department's own Environmental Impact 
Statement, which was inadvertently leaked, this proposed 
regulation could eliminate more than 29,000 coalmining and 
related jobs and wipe out a significant amount of coal 
production, more than 20 percent of surface mining in the east 
and up to 50 percent of underground mining nationwide.
    What is your justification for such a significant rewrite 
of existing regulations when your own economic analysis 
indicates it will eliminate thousands of high-wage American 
jobs and jeopardize our domestic energy security?
    Secretary Salazar. Thank you, Chairman Rogers. Let me first 
say the rule that had been in place until 2008 had been in 
place since President Reagan was President, and the Department 
of Interior had put together a rule from OSM that essentially 
governed these kinds of activities.
    In our view the rule which was published in the last days 
of the Bush Administration essentially repealed what had been a 
good practice that had been in place since the days of Ronald 
Reagan being President of the United States. We have engaged a 
public process to do a rewrite of a stream protection rule. I 
will ask the Deputy Secretary to comment on where we are on 
that process, if I may.
    Mr. Hayes. Thank you, Mr. Congressman. As you know, the 
final rule that came out the end of the prior Administration 
was challenged in court. There was a substantial legal 
challenge. We were not sure we could defend the rule based on 
the challenge. We thought the prudent thing to do would be to 
address the issues raised in the challenge through a public 
process, and we have started a new rulemaking. We have yet to 
come out with a proposed rule.
    With regard to the Environmental Impact Statement you 
referenced, that was not a Department product. We had a 
contractor on board who did a draft, an early draft of an 
economic analysis that we disagreed with. It was leaked. It is 
not our work. We are looking at completely revamping it. We 
have no intention of going forward with a rule that will not be 
appropriate. We are looking forward to coming out with a 
reasonable rule with sound economics, and we will look forward 
to working with you as we proceed through the public process.
    Mr. Rogers. Well, there are thousands of jobs on the line, 
not to mention the supply of the Nation's coal energy, which I 
remind you produces 52 percent of America's electricity. So 
this is no insignificant thing we are talking about, and I am 
puzzled that you would take this effort after we had spent so 
much money and time and effort on addressing this issue in just 
'08. This is not a political thing. This is important to the 
Nation's wellbeing, and so I am puzzled.
    Now, will this new regulation if it is enacted comply with 
the President's executive order to account for the accumulated 
costs of regulations?
    Secretary Salazar. It will comply with that order.
    Mr. Rogers. And what will be the estimated cost of putting 
an impact statement in place?
    Secretary Salazar. Deputy Secretary Hayes, do you have that 
number?
    Mr. Hayes. No, sir. We are doing the economic analysis now. 
We thought that the economic analysis done by this contractor 
was inadequate. As soon as we have that information, we will 
share it with you, Congressman.
    Mr. Rogers. Who was the company that you are referring to?
    Mr. Hayes. I do not recall the name of the company offhand. 
I would be happy to provide it to you. We were actually so 
unhappy with their work that we issued a demand that they 
provide us with a new version of the work, and if it is not 
adequate, our plan is to terminate them as a contractor.
    Mr. Rogers. Well, was that done before or after the '08 
rule was put in place?
    Mr. Hayes. That is part of the current rulemaking. We want 
to make sure we have sound economics. The numbers that you 
provided are not numbers that we agree with. We do not want to 
have that kind of impact. We do not think the proposal would, 
in fact, have that kind of impact.
    Mr. Rogers. So the company you are referring to did their 
work after the '08 rule was in place?
    Mr. Hayes. Yes. It is part of the current rulemaking 
because the prior rulemaking, as I mentioned, was challenged in 
court, and we did not feel it could be defended.
    Mr. Rogers. And was this company involved in the '08 rule?
    Mr. Hayes. I do not believe so.
    Mr. Rogers. So after the '08 rule was put in place after 5 
years of work, you then hired a company to look at it.
    Mr. Hayes. No.
    Mr. Rogers. What did you do?
    Mr. Hayes. We hired a company to help us do the economic 
evaluation associated with the new rulemaking we were 
proceeding with.
    Mr. Rogers. And you did not like what they came back and 
told you.
    Mr. Hayes. No. The work product they provided that was 
leaked was not adequate from our point of view. It was not a 
good work product.
    Mr. Rogers. So you were not satisfied.
    Mr. Hayes. That is correct.
    Mr. Rogers. You did not like what they told you.
    Mr. Hayes. We did not believe it was a good work product, 
and we challenged them. It is a normal back and forth in terms 
of a contract, Congressman. We challenged them to improve it. 
We are not going to go public with an economic analysis that is 
not sound.
    Mr. Rogers. So is this company still engaged?
    Mr. Hayes. As of a few days ago I believe so. Yes.
    Mr. Rogers. You should know one way or the other.
    Mr. Hayes. Well, we are watching it very carefully, but we 
were unhappy with their work product.
    Mr. Rogers. Well, are they still involved?
    Mr. Hayes. As far as I know they are. We just asked them to 
provide us with a better work product, and I have not seen the 
evaluation yet.
    Mr. Rogers. You told them what you wanted to hear.
    Mr. Hayes. No. To the contrary. We want a good work 
product.
    Secretary Salazar. If I may, Chairman Rogers, I think that 
the important thing to note are first the policy and where we 
are. There are two important policies that I think members of 
this committee can agree on.
    One is that we need to protect the environment as coal 
mining continues, which means the protection of streams. 
Secondly, we need to continue to support the coal industry with 
rules that are reasonable.
    We will try to draft a rule that is reasonable, which is 
now still in process. There is no final rule that has been put 
on the table. The President's energy package, which is 
something we try to implement, has coal as being a part of that 
energy package. We recognize the amount of coal that powers our 
economy today. It is not our desire here to put the coal 
industry out of business.
    We want to come up with a rule that achieves the policy 
objective here of protecting the streams. The rule which had 
been in place since President Reagan was President until 2008 
is part of what we are considering along with other options as 
we go forward with this rulemaking process.

               REPROGRAMMING FROM STATE REGULATORY GRANTS

    Mr. Rogers. Well, is any of the monies that is being spent 
on this procedure, is any of that money reprogrammed from state 
regulatory grants?
    Secretary Salazar. You know, I am not sure of that answer, 
Chairman Rogers. We can get back to you on where exactly the 
money has come from. We will get back to you on that. We do not 
know the answer.
    Mr. Rogers. Well, if it is reprogrammed from state 
regulatory grants, would you also supply us your authority with 
which to do that? Is that agreeable?
    Secretary Salazar. Chairman Rogers, we will get back to you 
on that. I do not know where the funding stream has come from 
for the contract that you were speaking about with Deputy 
Secretary Hayes. I will get that information to you.
    Mr. Rogers. Would you also furnish to the committee the 
report of that company with which you disagree?
    Secretary Salazar. Yes.
    Mr. Rogers. Now, has OSM worked with states to rectify 
their concerns over this procedure?
    Secretary Salazar. The answer to that is Joe Pizarchik, the 
Director of the Office of Surface Mining, has had multiple 
meetings with state officials, including officials in Kentucky, 
and he continues to work on the rule, and as the Deputy 
Secretary said, the rule is still in process. There is no final 
rule.
    Mr. Rogers. And finally what kind of time table do you see 
on that proposed rule?
    Secretary Salazar. David.
    Mr. Hayes. We are several months away yet, Congressman. We 
are looking for a draft rule perhaps in the summer to fall, so 
we are proceeding. There is a court-supervised schedule, 
because this was instigated through litigation. We are working 
with the court to make sure that we have adequate time so this 
rulemaking will be solid.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Simpson. Thank you. Mr. Dicks.

                                 COBELL

    Mr. Dicks. I was very pleased that we were able to get a 
deal on the Cobell case. Could you tell us where we are on 
that? What has happened?
    Secretary Salazar. First of all, thank you for your 
leadership and the leadership of Congressman Cole and so many 
people on this committee who helped get that through. David 
Hayes, who led the negotiations on it, has been overseeing what 
is happening with Cobell implementation. I would like him to 
comment on that.
    Mr. Hayes. Thank you, Mr. Secretary, and Congressman Dicks. 
We are in the phase of the case where the court has notified 
all of the class members as to whether they want to opt into 
the class or not. The court will have a fairness hearing likely 
mid-year at which time we hope that the court will approve the 
final settlement.
    Once approved, again, hopefully mid-year, we will move out 
with the implementation. There are two streams of 
implementation, of course. There are the payments out to the 
class members. That will be administered by essentially a bank 
that has been engaged by the plaintiffs under court supervision 
and then there is the Land Consolidation Program, which is a 
$1.9 billion program that we will administer to help buy back 
fractionated interest of Indian lands.
    We are not able to begin the public implementation of the 
effort until after the final settlement, which we hope will 
occur in mid-year. We are gearing up internally so as soon as 
the court approves the settlement, we will be able to go out to 
Indian Country, begin our government-to-government 
consultations, and move out with the Land Consolidation Program 
without delay.
    Mr. Dicks. Is there any indication that the court who was a 
big advocate----
    Mr. Hayes. Right.
    Mr. Dicks. Is there any indication that there would be any 
problem in the court?
    Mr. Hayes. We do not believe so, Congressman. We are 
expecting the class action to be approved and the full 
settlement to be approved.
    Mr. Cole. Would the gentleman yield for a related question?
    Mr. Dicks. Yes.
    Mr. Cole. Thank you. There is some discussion in the House 
about legislation to cap attorney fees. As I understand it, the 
court really would ultimately make the determination on 
attorneys' fees. We set an upper limit, but we gave the court 
some latitude.
    I would like your opinion as to whether it would be wise 
for us to get back into this at the attorney fee level. I have 
serious questions that this is a very good idea.
    Mr. Hayes. Well, I agree with you, Congressman. The 
attorneys' fees issue was part of the settlement. We did have 
an agreement with the plaintiffs to cap those fees. The 
plaintiffs' attorneys have nonetheless asked the court for some 
approval to go beyond that cap. That is a live issue right now 
that is being briefed in front of Judge Hogan, and the Judge 
will apply ruling law. We expect the decision will come down 
relatively soon.
    I think it is in the hands of the court where it should be 
with the background of the back and forth that I think is well 
understood.
    Mr. Cole. I thank the gentleman.

                DELISTING OF THE NORTHERN ROCKIES WOLVES

    Mr. Dicks. Before I forget it I want to say how much we 
miss Tom Strickland and appreciate his good work, and he did a 
very good job and was very, you know, very responsive and so in 
his memory I am going to ask this next question about the 
delisting of the Northern Rockies wolves. This is an issue that 
affects Idaho, Washington, Montana, Wyoming, and Minnesota, 
too. Of course.
    But this particular decision, can you give us an update on 
kind of, you know, where you are on this, and what you think 
the best outcome is? Now, I understand this is very sensitive 
in Idaho, very sensitive in Montana and in Wyoming, but Idaho 
and Wyoming have moved further ahead in terms of their plans to 
protect the wolves. Wyoming still is resisting. Give us an 
update on this.
    Secretary Salazar. Thank you very much, Chairman Dicks, and 
let me just say that I appreciate the work and the leadership 
of Chairman Simpson and the committee in coming up with 
language that would help us get beyond the issue, so let me 
talk just a little bit about wolves.
    First on Tom Strickland. Tom is a soldier, came and did his 
job for 2 years as he had committed, did an extraordinary job, 
and we have a great team at Interior that will continue to 
carry on the great work we do on behalf of the country. We miss 
him, but he has finished his mission and I think he is getting 
ready for his second mission.
    On the wolf issue, it has been our view that the Northern 
Rocky Mountain wolf population has been recovered, and one of 
the requirements in order to de-list a species is we have 
recovery plans approved by the Fish and Wildlife Service that 
would comply with the law.
    In the case of Idaho and Montana, they have those kinds of 
plans in place. We attempted to issue a rule allowing for the 
de-listing of the wolf in those two states and allow the hunt 
to move forward as a management mechanism for the wolf 
populations in those states.
    We believed then, as we continue to believe today, the 
Wyoming recovery program needs some revision in order for it to 
come into compliance. The new governor of Wyoming, Governor 
Mead, has been working with the Fish and Wildlife Service, and 
we are cautiously optimistic we will also be able to develop a 
program that is legally sufficient within the State of Wyoming. 
At that point we will be able to say the Endangered Species Act 
essentially has achieved a victory here, and the wolf in the 
Rocky Mountain range has been prevented from going into 
extinction. The states have a management program in place that 
will ensure that the wolf will not become extinct, and that is 
what we have been working on.
    I think through a combination of the legislative efforts 
going on here, and we will continue to see whether or not there 
are other administrative approaches we could take. We are 
hopeful that we will be able to get to a resolution on the 
issue.
    Mrs. Lummis. Will the gentleman yield briefly?
    Mr. Dicks. Yes, I yield.
    Mrs. Lummis. The U.S. Fish and Wildlife Service did approve 
Wyoming's wolf management plan based on its sound science, it 
was subsequently a court, based not on that science but other 
matters not included in the legal criteria, that ruled the 
Wyoming plan was inadequate. Now that has been overturned by a 
federal district court in Wyoming.
    Thanks, Mr. Chairman.
    Secretary Salazar. If I may just to complete the colloquy 
here, whenever you get involved in any of these issues, you are 
bound to get yourself in litigation. I do not know how many 
times the Department of Interior has been sued over these 
issues, and you have conflicting opinions relative to the legal 
adequacy of the wolf recovery plan, including the one in 
Wyoming.
    But we are practical people, as I said. Both Tom Strickland 
and David Hayes, I see them as problem fixers, and that is what 
we have been trying to do. We have agreement we have a 
recovered wolf population in the Rocky Mountain region. We just 
need to figure out a way of threading the needle to get to the 
result that will withstand those kinds of challenges within the 
court system, and that is what we are trying to do.
    Mr. Simpson. Mr. Lewis.

                 OPENING COMMENTS BY CONGRESSMAN LEWIS

    Mr. Lewis. Thank you, Mr. Chairman. Welcome, Mr. Secretary. 
It is a pleasure to be here with you.
    I have had the privilege of working with David Hayes for a 
lot of years, a very competent professional, but I have not had 
the privilege of working with the other Haze in our audience, 
but her reputation goes before her as a very talented and 
competent and serious public official. We do appreciate your 
work very much.
    Mr. Secretary, last week as has been indicated, the 
subcommittee met to talk with both GAO and the Office of 
Inspector General to discuss many of the matters and the 
challenges faced by the Interior Department. My line of 
questioning today will very much flow around those 
circumstances.

                              STOVE PIPING

    In our hearing last week I specifically described a 
parallel challenge that Norm Dicks and I faced together over a 
number of years in a Defense Subcommittee, where for many, 
many, many a year we struggled to get the, believe it or not, 
the Navy and the Marine Corps to be able to communicate with 
each other. Just could not seem to get their software to match 
each other, and it is a process that is maybe an extreme 
illustration of the propensity for bureaucracies to build these 
smokestacks or walls between each other in order to protect 
their own bailiwick.
    And, indeed, I believe some of those challenges faced by 
your Department that came to our attention last week involved 
questions like resources protection, financial management, and 
IT infrastructure, the problems that one has there could be 
greatly aided or improved or overcome by way of adopting one of 
the systems around that allow people to communicate with each 
other.
    David Hayes has had some exposure to a guy in my territory 
who develops GIS systems, probably has the most significant 
development of such systems anywhere in the world. He is a 
fellow who has been immensely successful across the government 
in terms of agencies using these systems, including the 
Department of Interior.
    But within your subcommittee-agencies they use these 
systems, many of them overlap, parallel, and otherwise and yet 
a fellow who is not worried about profits it would seem since 
he and his wife are going to leave all stuff to the environment 
eventually, he literally would urge you to develop an internal 
mechanism to coordinate between so that these sub-agencies of 
Interior are talking to each other.
    And I do not know whether you have examined that kind of 
prospect, but it is very clear that between your agencies 
talking to each other is going to be kind of basic making some 
of the progress that I think we should be making.
    I would be interested in your comment regarding that.
    Secretary Salazar. Congressman Lewis, I fully agree with 
you. I think you are right in terms of the analogy you made to 
the Department of Defense initiatives that you and Congressman 
Dicks have worked on in the past relative to Interior. Where 
you have had historically each one of the agencies upgrading in 
a silo, and one of the things that we have tried to do over the 
last 2 years is to try to break down those silos, and as you 
well know it is a very difficult thing to do.
    If you take, for example, one of the issues that was raised 
in the GAO report, information technology. When I became 
Secretary of Interior, frankly, it was impossible to use e-mail 
because of the fact that we had the overhang of the Cobell case 
and the protections that had been put into place. The 
technology at the Department of Interior was a very old 
technology, notwithstanding the fact that as I recall there was 
a billion dollars plus that was being invested in technology 
across different bureaus, but there was no coordination among 
the different silos.
    The Deputy Secretary working closely with the Assistant 
Secretary for Policy, Management and Budget has taken on the 
information technology reform effort so the Department could 
operate more as a department and communicate across bureaus. In 
fact, what we have done is we have also said as we get better 
on information technology, we also have to find ways of doing 
it more efficiently.
    One of the significant reductions in dollars is to 
information technology, knowing that we are trying to cut down 
the silos of the Department and believe we can do a much better 
job than has been done in the past.

                                 WATER

    Mr. Lewis. Thank you, Mr. Secretary. When I first got to 
know Deputy Secretary Hayes, he was wallowing around in the 
waters of Colorado, and as you know in the southland and the 
west we particularly are concerned about water issues and 
problems.
    I cannot say that Secretary Hayes has done all that I might 
want to see him do or accomplish relative to our problems along 
the delta, but I will leave that to others to discuss perhaps 
today, because I want to raise a parallel challenge that is a 
very, very real challenge.
    One of the great successes we have had over the years in my 
judgment in the arena of flood control and water conservation 
has to do with the Santa Ana River Project, controlling the 
flooding impact along the Santa Ana River that impacts many, 
many a community and eventually it affects them, to the ocean. 
The very peak of that project is an operation known as the 
Seven Oaks Dam. Seven Oaks Dam initially was a major flood 
control effort that would be the beginning point of controlling 
flooding and damage and otherwise along the river line.
    We altered that Seven Oaks Dam project to the tune of 
several hundreds of millions of dollars to also have the 
project, Seven Oaks Dam, be one of conservation, providing 
significant conservation, and indeed, as a result of our recent 
flooding out there, there is almost a Lake Gregory behind the 
Seven Oaks Dam, kind of sitting there with much silt our people 
would suggest.

                            SANTA ANA SUCKER

    It is my concern that as we have dealt with the problems 
along the delta, that the Santa Ana sucker could have similar 
impacts in the Santa Ana River basin. A species about to be 
declared in a fashion that could have huge economic impacts 
within all of southern California. We were talking about a 
study earlier that we were very concerned about making sure was 
carefully evaluated because it might be full of some holes. 
Some were suggesting even that it might not tell you what you 
want to hear.
    Well, the Santa Ana sucker study that was done to say the 
least is far from a professional piece of work. I hope you 
would look at that study with the same kind of careful analysis 
as you suggest we are doing with the other. The sucker along 
the Santa Ana River could literally have dramatic impact upon 
development, opportunity for living, the entire environment 
along the Santa Ana.
    And, indeed, it is not our business in the Interior or in 
the Federal Government at a regional level or local level to 
use, if you will, to use endangered species or potentially 
endangered species, as essentially a regional planning 
mechanism. And it is the concern of some that we are about to 
do that with that Santa Ana sucker, and thereby cut off not 
just the flood control flows or the impact of flood controls 
along the Santa Ana but cut off dramatically the potential for 
conservation, providing huge new water supply for a very 
important basin that could be very directly linked in the 
future to whether we have rationing or do not have rationing in 
southern California.
    I do not think this President or this Secretary or 
otherwise want to be anywhere closely tied to the eventuality 
of water rationing in the southland. Indeed, it could destroy 
federal policy directions in a manner that perhaps would 
undermine even your wildest dreams relative to the Interior.
    So with that I would be interested in comments about the 
Santa Ana sucker or otherwise.
    Secretary Salazar. I will ask David to comment if he knows 
anything at all on the Santa Ana River issues. I frankly spend 
a lot of time working on these water issues in California, as 
many of you on this committee know, including Congressman 
Calvert. Much of that has been spent up in the San Francisco 
Bay Delta and the Sacramento and San Joaquin Rivers where we 
have done a lot in the last 2 years under the leadership of 
Deputy Secretary David Hayes and Mike Connor from the Bureau of 
Reclamation. I think without knowing anything at all frankly 
about the Santa Ana Sucker because this is the first time that 
someone has raised it with me, Congressman.
    What I would say is it is important for us to be proactive 
and to get ahead of these issues so we avoid the kind of train 
wrecks we have seen in the San Francisco Bay Delta. We worked 
very closely with Governor Schwarzenegger and with the water 
users to try to move forward with a comprehensive plan on the 
San Francisco Bay Delta. We are doing that now with Governor 
Brown and his people and are hopeful we will be able to do 
something there that hopefully will deal with the issues for 
the long term.
    Getting ahead of these issues is important, and let me have 
David comment because he works on these issues and he may know 
something more on the Santa Ana Sucker than I do.
    Mr. Hayes. First I want to thank you for all your 
compliments sent my way. It is very energizing, and I really 
enjoyed working with you on the 4.4 plan and dealing with the 
issues on the Colorado and have continued to enjoy working with 
you on the ongoing issues.
    I am not familiar with the Santa Ana sucker issue, but you 
can be sure after this hearing we will be making some calls as 
soon as we get back.
    Mr. Lewis. I appreciate that. Mr. Chairman, if we could 
kind of fill our record with some of those issues. It could 
become one of the major items over time here. Thank you.
    Mr. Simpson. Ms. McCollum. Congresswoman McCollum.

                   BUREAU OF INDIAN EDUCATION SCHOOLS

    Ms. McCollum. Thank you, Mr. Chairman. Mr. Secretary, this 
Administration has taken great strides in rebuilding the 
trusted relationship with the 565 federally-recognized Tribal 
Nations, and the Administration with the Democratic caucus 
working together, we finally passed the Indian Healthcare 
Improvement Act, which will not be tied to reauthorization time 
and time again. Bipartisan, we passed the Tribal Law and Order 
Act, and I want to thank you for making tribal issues a 
priority and for your commitment to tribal sovereignty.
    Now, since being elected to Congress, and even prior to 
Congress, I have worked with the Tribal Nations in Minnesota 
and have been aware of some of the pent-up needs that many 
Tribal Nations have. I could talk about healthcare facilities, 
but today I am going to focus on schools.
    I want to talk to you specifically about the Bureau of 
Indian Education School Construction. This is an issue where we 
still have a long way to go, and I am interested in learning 
more about the backlog and what we can do as a committee 
bipartisan to help you put an end to this, what I am going to 
describe is a tragic situation.
    I have visited schools across this country, but I am going 
to talk about two, one in Leech Lake, Minnesota, and one at the 
Pueblo Laguna, New Mexico. It should have been condemned. In 
fact, it is my understanding at one point, Pueblo Laguna, New 
Mexico, was condemned, but a coat of paint miraculously took it 
off the list.
    These schools still tend to serve Native American children. 
Now, the Buy-O-Nay-Ge-Shig High School in Leech Lake is ranked 
as number 42 in the IBE's 50 worst schools list. Nearly 300 
students go to the school. They have serious structural, 
mechanical, and electrical deficiencies, leaky roofs, poor 
lighting, sewer backups, mold, overcrowding. Well, I could go 
on and on. But bottom line is that they do pose an immediate 
life, health, and safety risk to students and faculty.
    Now, I want to work with this Administration to become more 
focused on the success of Native American children. High school 
students' graduation rate for Native students hovers at 50 
percent. We know that if we invest in educational needs, that 
we will ensure that we can increase that from 50, I believe 
working together, to 100. We do that by giving students a safe 
and appropriate place to learn, and these students know that 
their future is valued, and it is a priority not only for their 
parents, but for our country.
    My question to you, Secretary Salazar, is how do we work 
together, because I know there is bipartisan support in this 
area, how do we work together with the Administration to fix 
this? Where can we help you discover more urgency to address 
this? These schools either need to be renovated or replaced, 
and I would like to hear how a priority list for school 
construction is being determined, how it will be updated, and 
how much funding it will take to fix up the necessary backlog.
    I want to point out the Laguna, which had suffered an 
earthquake that I was at, they have seismographic units taped 
to the wall where the cracks are. I was in one part of the 
building, which is totally condemned, and another part of the 
building is being used.
    Now, I am not an engineer, but commonsense would tell you 
that that is not a good environment for children. I know this 
is something you want to work on. I am asking you to tell all 
of us how we can work together to address this huge backlog of 
unmet needs for our Nation's school children of the first 
Americans.
    Secretary Salazar. Thank you very much, Congresswoman 
McCollum, for your leadership on these issues. I think 
sometimes in our history as a country, in fact, very often in 
our history as a country we have left Native American issues to 
a very low priority. The consequence is we have a huge backlog 
of issues that we have been addressing in the Native American 
world.
    Let me say first from the President's point of view and my 
point of view this is an issue of urgent priority, and we have 
done a number of things over the last several years to 
demonstrate our commitment to the Native American communities 
of our country. They include some of the things that you 
reviewed, but in addition I will say for a long time before I 
became Secretary of Interior we did not have even the official 
positions filled within the Assistant Secretary of Indian 
Affairs and the related bureaus.
    I am proud to say at this time we have a Director of the 
Bureau of Indian Education in place who is serving with the 
great leadership of Assistant Secretary Larry Echo Hawk. The 
rest of the entire team are able to now, for the first time, 
address many of the issues which are important for us to 
address, and they include economic development issues, energy 
issues on reservations, implementing the Cobell litigation, and 
the trust reform issues we are working on.
    With respect to education, we have put in a significant 
investment into the renovation of many of the schools. We 
recognize there are more than 40,000 Native Americans who 
attend these BIE schools all around the country, but even as we 
have made those investments with the help of the Congress over 
the last 2 years, we recognize that there is still a long way 
to go.
    What we are doing is engaging in a consultation process 
with the Tribes to come up with a list of priority needs. 
Knowing there is a significant backlog and significant amount 
of money it would take to provide the kinds of upgrades to be 
the kinds of schools where any American should be happy to send 
their children to school. Unfortunately, that is not the case 
with Indian Country right now.
    Ms. McCollum. Mr. Secretary, are you in a position, because 
I know you have been working very, very hard on this issue, but 
are you in a position to give the chairman of the committee, 
the ranking member of the committee, not only a list of schools 
but, tentatively, how much it would cost to just get up to 
standards? Some of these schools are going to have to be 
replaced so that when we are looking at the budget, Mr. 
Chairman, we are making cuts, we know whether or not we are 
adding to the backlog. We will not be able to solve the entire 
problem, but at least start moving in the right direction.
    Thank you, Secretary Salazar. Thank you for your work all 
of you.
    Secretary Salazar. We would be delighted to provide you 
with that list.
    Mr. Simpson. Mr. Calvert.

                               ROYALTIES

    Mr. Calvert. Thank you, Mr. Chairman. Mr. Secretary, thank 
you for coming today. I have just a quick comment before I get 
to questions. We have had these issues about oil and gas 
royalties. We had some testimony as you heard about recently, 
but it seems to me it is not so much the royalty fee, it is the 
collection that is the problem.
    In the private sector, you are going to make sure you 
collect every nickel and every dime in royalty. You are going 
to understand exactly what that lease states, the transparency 
of that lease, and get that information.
    So as a comment I wonder if you might look into a pilot 
program to use private collection contractors to collect those 
royalties and compare that success rate with your government 
collections along with your associated costs and see who does 
better. And if, in fact, private collections are a better way 
to go, and if you need legislative authority to do that, I do 
not know if you do or you do not, you know, let the chairman 
know. I am sure we can work that out, but it would seem to me 
based upon that testimony we had you had up to $50 billion left 
on the table. That is serious money. So we should not let that 
happen.

                               GAS PRICES

    So just as part of a comment. As you know, the price of 
gasoline today in southern California is $3.88 a gallon. In 
some areas it exceeds $4 a gallon. This is a short-term problem 
and a long-term problem. In California we have over 12 percent 
unemployment. I am hoping that we are getting through this 
recession, but something like this, if it goes for any period 
of time, will tank any recovery that may be going on.
    I am hopeful you have a short-term plan to modify these 
gasoline prices. Supply is the long-term issue. Scarcity is the 
problem. And a long-term plan to make sure that not every 
Gaddafi in the world comes along and brings this country to our 
knees, which it seems to be right now.
    So do you have a short-term plan and a long-term strategy 
to lower these energy costs? Especially in the short term. I 
think most folks back home want to hear what we are going to do 
to try to get these gasoline prices down.
    Secretary Salazar. Congressman Calvert, let me just say 
this is an issue of high priority which we are watching. I 
think with respect to the latter part of your comment I think 
this is an opportunity where we might be able to work in a 
bipartisan fashion to put together a long-term framework for 
the energy independence of the United States. We should not be 
in the position where Gaddafi and Libya essentially are able to 
create these kinds of disruptions.
    I am hopeful that this is one area where we can be able to 
find some common ground where we have a robust energy portfolio 
that takes advantage of some of the energy opportunities we 
have here in this country, including oil and natural gas and 
the renewable energy portfolios we have spoken about.
    I hope we have that kind of an opportunity for 
collaboration. What we have done as I said at the beginning of 
the hearing is we have, in my view, what has been a robust oil 
and gas program. The critics sometimes say we do not, but I 
think when you look at the statistics and the numbers over the 
last several years, we have a program and a direction from the 
President that goes through the Secretary of Interior that says 
we look at oil and gas as a very important part of our economy. 
We have taken significant steps to make sure we are doing it in 
the right places and with the right kind of safety measures in 
place. That is where we need to work with the Congress and with 
this committee to make sure the funding we requested, to make 
sure activities in the Gulf of Mexico and elsewhere are able to 
continue are ones that can continue.
    Mr. Calvert. Thank you, and you might take a look at that 
royalty problem.

                                 WATER

    Getting back to water, California has a population of over 
40 million people. We have got a lot of demands on our water. 
As you know, water has been a big issue and continues to be a 
big issue even though we have had considerable rainfall and 
snow pack this year. No state has experienced a greater 
unemployment rate, and within any state has seen worse economic 
activity than the Central Valley in the State of California. 
Some areas are experiencing up to 50 percent unemployment.
    There is a lot of hope out there in the Central Valley. I 
guess, Secretary Hayes, you are going to make a decision here 
to increase those allocations again. Is there any word on what 
you are going to do as far as increasing water supply in the 
Central Valley? Or is that an answer for the Secretary.
    Secretary Salazar. I am going to have David comment on it 
because he has spent a huge amount of his time as Deputy 
Secretary attempting to resolve the issues both for the short 
term and the long term. I will say we have an action 
orientation to this, Congressman Calvert, and even the 
forecasts that we have made, unlike the last 20 years, knowing 
it is so important for farmers to be able to know what their 
water supply looks like in the months of January and February 
we are providing much more timely projections so farmers can 
then make their plans as they go to the bank and decide what 
they are going to plant or not.
    We have made a number of those changes as well as major 
investments in infrastructure. In terms of this year's 
allocations I am going to have the Deputy Secretary speak to 
those.
    Mr. Hayes. Yes, and per the Secretary's comment we are now 
doing our projections and our allocations on an every-2-week 
basis instead of every month. The last projection had most 
water users at 100 percent. South of the Delta was at 50 
percent, I believe.
    There are some constraints such as the San Luis Reservoir 
was full. It could not take more water. We are approaching the 
period now where there are some restrictions on some pumping 
because of the endangered species, although I am happy to 
report, as you know, that a couple of weeks ago all the 
parties, the water users, the conservation organizations, the 
state and federal regulators, reached an agreement to modify 
the current operational approach and to settle the litigation 
for this year to free up some additional water for delivery 
south of the delta.
    Of course, we are pleased, we are all fortunate with Mother 
Nature helping out so much in California this year. We will 
continue to monitor it, Congressman, and work with you and your 
office. There are structural problems as you well know in 
getting water south of the delta, and the good news here is all 
the parties are working very hard toward a long-term solution 
through the Bay-Delta Conservation Planning Effort, and 
Governor Brown and his new team are really engaged. We are 
excited to be working with them. We are working very closely 
with all the water users and the conservation interests, and 
that holds the hope of actually solving this problem long term, 
which we are all so anxious to do.

                MULTI-SPECIES HABITAT CONSERVATION PLANS

    Mr. Calvert. Well, I appreciate that. Do I have 1 minute 
left, Mr. Chairman? Just another comment on the Multi-Species 
Habitat Conservation Plans. As you know, there are a few of 
them around the country, the largest is in my area of Southern 
California. And there is a comment that we do not see a lot of 
people in the Department of Interior that are trained on multi-
species habitat conservation. They tend to look at these plans 
species by species, and they need to be a little more proactive 
in that. I do not know if there is a training program for these 
employees to deal with that or field managers that are 
experienced with Multi-Species Habitat Conservation Plans, but, 
a lot of time and effort went into creating them.
    This was Secretary Babbitt's thing, to do, and we have put 
a lot of time and effort to put them together in southern 
California, and we need to get some more positive interaction 
with the Department of Interior. That is just a comment, so I 
would hope you can take a look at that constructively.
    Thank you, Mr. Chairman.
    Mr. Simpson. Before we go on with Mr. Hinchey I am going to 
take a 5-minute break and give people a chance to stand up, and 
then we will come back and hear about fracturing.
    [Recess.]
    Mr. Simpson. We will be back in order. Mr. Hinchey.
    Mr. Hinchey. Thank you very much, Mr. Chairman. This may 
not work. Oh yeah, it is working, all right. Secretary Salazar 
and Secretary Hayes, thank you very much and it is a pleasure 
to be with you. And it is a great pleasure to listen to you. I 
deeply appreciate everything that you are doing and I commend 
you for the way in which you have operated this department.
    Over the last year we have seen very dramatic and very 
important reforms that will strengthen, preserve, and protect 
the country's amazing array of natural resources as well as 
improve out economy. The reorganization of that en masse as we 
know and the Wild Lands Policy so much more welcome 
developments. For all of these things we must thank you very 
much and hopefully you will be able to continue to do the kinds 
of positive things that you have been doing over the last year 
or so.

                          HYDRAULIC FRACTURING

    I wanted to ask a question about the hydraulic fracturing 
operation which is getting a lot of interesting attention now. 
The natural gas drilling has gotten a lot of attention; for 
example, in the New York Times over the last week or so some 
very interesting stories that they have produced. And I have 
been in touch with your department about this topic on a number 
of occasions over the past few years.
    Specifically I believe that the Department should require 
the drilling companies publicly disclose what chemicals, what 
materials they are injecting into the ground during this 
hydraulic fracturing process while still on public lands. I 
think it is just common sense, something that really should be 
done. Some states like Wyoming, very exemplary have strong 
public disclosure requirements, but a lot of other states do 
not. When it comes to public lands, the department has the 
authority to require disclosure.
    In late November the Department announced that it was 
developing a policy to address disclosure of hydraulic 
fracturing chemicals for these leases on public lands. I wonder 
if you could speak to us and talk a little bit about the status 
of the initiative and what we can expect to see some form of a 
proposal in the context of this issue.
    Secretary Salazar. Thank you very much, Congressman 
Hinchey, for raising this issue or putting it on the radar 
screen of this committee and this Congress. First, I think the 
future of natural gas is a very positive one. I think this is 
one area where perhaps as the Congress looks at the future of 
energy programs for the country this is an area where there may 
be some bipartisan support to craft energy legislation that 
does get us energy independence given the abundance of natural 
gas we have in the country at a very fractionated cost of what 
we are having to pay for a barrel of oil today.
    If we could figure out a way to use more of the natural gas 
we domestically produce, I think it is one of those great 
opportunities to help us power the economy of the United States 
as well as address the imperatives of energy independence. I am 
very hopeful we can have a robust natural gas feature and as 
the President has often said, natural gas is one of those key 
components of the energy portfolio needed for America.
    I will also say from my point of view I think one of the 
areas that can inhibit a robust natural gas program in the 
country is if we see the kind of backlash that we are seeing in 
places like New York and other states where citizens and 
certain groups have become very concerned about the injection 
of pollutants into the underground where they don't know what 
is being injected into the underground. I think in this 
committee, where the members of this committee are so familiar 
with the importance of preventing pollution because it is a lot 
less costly to prevent it than have to address it after it 
occurs.
    It seems to me this is an area we need to explore together. 
At the end of the day, disclosure is something that is 
important and something that not only states like Wyoming, but 
very responsible companies in the oil and gas industry have 
been advocates of disclosure of what is being injected into the 
underground. We will move forward with a policy that addresses 
hydraulic fracturing, but we are doing it in a way where we are 
reaching out to companies who have been participating in forums 
that we have held on disclosure. We hope in the next several 
months to be able to have a policy we can move forward with. I 
am hopeful the industry will be able to be supportive of the 
policy for disclosure because I think it is the Achilles heel 
that could essentially kill the future of natural gas as a 
significant part of our energy portfolio for the future.
    Mr. Hinchey. I thank you very much for what you are saying 
and I agree with you completely. The energy situation that we 
are experiencing now is something that is very challenging; the 
price of oil going up so dramatically and if we could utilize 
this very significant organization of energy in our country as 
natural gas elements we could be a lot stronger on this whole 
issue. But we have to do it in a way that is not going to 
provide us with serious problems that are going to then occur 
as a result of the drilling. So I deeply appreciate your 
insight into this and the work that you are doing because this 
is something that really needs to be done.
    A lot of damage is being done in a lot of places across the 
country. And a lot of the damage that is being done is only a 
minimal exposure of the damage now. Over time it is going to be 
a lot more serious in this reckless way in which materials are 
being injected without any honest organization and revealment 
of what these materials are. So thanks, thanks very much. I 
appreciate this and this is something that we are going to have 
to continue to work on very closely and effectively.

                               WILD LANDS

    Let me ask you a question about Wild Lands Policy, if I 
may. Last week the House Natural Resources Committee held a 
hearing on the Department's recently announced Wild Lands 
Policy which incidentally was the subject of a rider in H.R. 1. 
There has been a lot of discussions about how this policy was 
developed and whether the Interior Department has the authority 
under the Federal Land Policy Management Act to take some steps 
to preserve lands with wilderness characteristics.
    The Wild Lands Policy was developed to deal with the Norton 
Levitt Settlement which prohibited BLM from carrying out one of 
its core missions: identifying and administratively protecting 
public lands with wilderness characteristics. This legacy 
policy of the Bush Administration exposed some of our Nation's 
most sensitive wild places to development activities that would 
have undoubtedly destroyed their special character. It needed 
to be reformed. So I wonder if you might be able to tell us, 
for example, can you compare for us the process that led to the 
Wild Lands Policy and how the Department intends to implement 
its going forward--how it is going to do that? With the process 
that the Department undertook in 2003 when it developed and 
implemented the Norton Levitt Policy and its Utah Resource 
Management Plans and also in addition does not the definition 
of multiple use set out at the Federal Land Policy and 
Management Act specifically contemplate that BLM will not 
uniformly permit all uses on all places on public lands, 
meaning that in some areas oil and gas development will be 
prioritized when in other places wilderness will be 
prioritized?
    Secretary Salazar. Thank you, Congressman Hinchey. You know 
it is an important question. Obviously it has drawn a lot of 
sparks from many different places, especially BLM states in the 
west. Let me say the following: first, we believe that 
conservation for the 243 million acres or so that BLM manages 
is one of the multiple purposes for which we should manage 
those lands. When the Congress passed the Federal Land Policy 
Management Act, it clearly stated that BLM would manage its 
lands for multiple purposes. From our point of view, that 
includes conservation and the management of lands with 
wilderness characteristics.
    We believe and I believe, the issuance of a Secretarial 
Order was something I was required to do by the law as set 
forth in FLPMA and has had been set forth by circuit courts of 
appeal that had actually ruled on the question. Second, it is 
the right thing to do in terms of managing our public estate 
for multiple purposes, including more wilderness 
characteristics. I would make a few key points with regard to 
the policy, how we intend to go forward. First, it will be part 
of a BLM land use process and nothing will be done to designate 
these lands with wilderness characteristics without going 
through the process of receiving input from the states and 
affected local communities.
    Secondly, the Secretarial Order, if you read the language 
specifically in the order, recognizes the need for the 
protection of existing rights. Lastly, to the last point you 
made, it is a multiple use governance set out in the 
Secretarial Order so it may be that you do have oil and gas 
moving forward in areas that are sensitive, if that is seen as 
what is required in terms of the multiple use management of the 
BLM. I would hope as we continue to have conversations with the 
members of Congress and others we can find that the commonsense 
conclusion here is the conservation purposes of the BLM lands 
is one of the important purposes for which we should be 
managing these lands.

                         OIL AND GAS ROYALTIES

    Mr. Hinchey. Yes, absolutely, I agree. I thank you very 
much for what you are talking about. I think it is very 
important. One more brief question on oil and gas royalties. At 
a hearing this subcommittee held just last week, it was a 
consensus that we need to make sure the taxpayers are getting 
the best return possible when it comes to our oil and gas 
leasing program. Given that this House is considering drastic 
cuts to vitally important domestic investments along with 
record high oil prices and profits, I think these oil and gas 
companies can afford high royalties without it impacting the 
price at the pump.
    The 2012 budget assumes that Interior will administratively 
implement oil and gas royalty rate reforms including 
adjustments to the standard onshore royalty rate. So I wonder 
what kind of benefits to the taxpayer will these reforms 
provide? Do we know that yet and when can we expect to see this 
policy be enacted?
    Secretary Salazar. Congressman Hinchey, our driving 
principle from day one has been to get a fair return to the 
American taxpayers. We have studies under way both with respect 
to the offshore as well as with respect to the onshore. Shortly 
before the Bush Administration left office, the offshore 
royalty rates were lifted to above 18 percent. On the onshore, 
the 12.5 percent royalty rate has been in place since the 
Mineral Leasing Act was passed in 1920. What we are looking at 
is to make a determination of what the appropriate royalty rate 
would be and the BLM and Interior have been working on a study 
so we can place the royalty rate at a position where we can 
ensure that the American taxpayer, the American citizen is 
getting a fair return on the property they own.
    It is always interesting to me to take a look at the places 
like Texas and others which have a much higher royalty rate 
than we do for any of our federal public lands concerning oil 
and gas. How we exactly will come out with the reform is 
something we have under way as part of our study. It may be if 
you are drilling an oil and gas well into areas where you 
already know there is all the geophysical information that you 
know you are going to hit the riches of the oil and gas, it may 
be there you need to have a different kind of royalty rate than 
where you are just doing wells. But that is something we are 
looking at--how we move forward with a royalty structure which 
at the end of the day will ensure a fair return to the American 
taxpayer.
    Mr. Hinchey. Mr. Secretary, I thank you very, very much and 
I deeply appreciate everything that you have said to the 
questions asked of you. Thank you.
    Mr. Simpson. Mr. Cole.

                          HYDRAULIC FRACTURING

    Mr. Cole. Thank you very much, Mr. Chairman. Mr. Secretary, 
thank you very much for being here. I did not mean to get into 
hydraulic fracturing, but we would have no hearing complete 
without it. I just want to make this point because I actually 
have a series of other things just for the record. As you know 
this is not a new technology. It has been used for over 50 
years and we have many states that regulate this very well. 
Certainly Oklahoma does, Wyoming does as you mentioned in your 
remarks. I would be very careful about a national regulatory 
system when this is already done pretty well at the state 
level. So I agree with your remarks that this extraordinary 
natural gas find that we have has an enormous potential for the 
country and frankly great potential for bipartisan cooperation 
because it does work across the board for many constituency 
concerns. But I also worry that you can overregulate it and we 
have a lot of fear mongering going on, particularly in places 
that are not used to oil and gas protection. And frankly it may 
well be a problem in a sense that they do not have strong state 
regulatory traditions and expertise built up over decades. So I 
would just ask you look at this at the state level solution if 
you can. Let me----
    Mr. Moran. Would the gentleman yield to the Department?
    Mr. Cole. I would certainly yield.
    Mr. Moran. Thank you, Mr. Cole. There may be another factor 
and again that whereas Wyoming, Oklahoma, and so on have 
regulated it well, they have a different geology as I 
understand it than some of the areas in Pennsylvania and New 
York that are now getting into hydraulic fracturing. That may 
be one other factor that you know the geologic strata that they 
are fracturing is different in these--the Atlantic states than 
it is in Oklahoma and Wyoming. I am just throwing that out as 
one consideration.
    Mr. Cole. I am not sure that is actually the case. I think 
it has more to do with the timing of the oil and gas industry 
and when it was introduced. Pennsylvania is actually an old oil 
and gas state. And we have a lot of people that moved to 
Oklahoma 100 years ago from Pennsylvania to develop oil wells. 
But the technology has changed dramatically. But anyway, I 
would be happy to have that discussion with you because I do 
think it is an area we can find some common ground on.

                            LAND INTO TRUST

    I want to take you to another area, if I may. I have got 
three or four things that I want to talk to you about that are 
very different, one of which is that I really appreciate what 
you and the Administration have done in Indian Country. We 
talked about the Cobell Settlement. Frankly, this committee has 
done a lot on a bipartisan basis to raise funding levels where 
they needed to be, working with the Administration in the Law 
and Order Bill. But I know one of the things that you are most 
concerned about and I would like for you to address for this 
committee because again this committee tried to help you last 
year and I think did. We just were not able--one thing we can 
all agree on here is we all beat up on senators for a change. 
But the Carcieri issue I know has got to create enormous 
strains and burdens for you in Interior as to whether or not 
you can put land into trust and for whom. Could you tell us a 
little bit about what the consequences will be if we cannot get 
a clean fix for the Carcieri Supreme Court decision through 
Congress?
    Secretary Salazar. Thank you very much, Congressman Cole, 
and thank you for your leadership on so many Native American 
issues over so many years and particularly your great work on 
Cobell along with Congressman Moran and many others who were 
involved on that particular issue. On the Carcieri fix, we need 
to have it in order to avoid the uncertainty that currently 
prevails with respect to Tribes that were recognized in the 
post-1934 timeframe. The consequence of not having it is it 
throws into question a whole set of initiatives as we try to 
make sure Indian Country has an opportunity to build the 
detention centers and schools and mental health facilities and 
anything else where rural property is involved.
    It is creating a tremendous amount of uncertainty with 
respect to a subset of the 564 Tribes that we recognize here in 
the United States. The Carcieri fix will be very helpful for us 
to move forward.
    Mr. Cole. And just for the record, it is my understanding 
that most of the cases of Land and Trust, Carcieri or not, that 
you are dealing with have nothing to do with gaming. Is that 
your insight? The overwhelming majority really are economic 
development, housing, senior citizens, those type of things?
    Secretary Salazar. You are absolutely correct. Gaming is 
the issue that creates a tremendous amount of controversy, but 
the vast majority of all the applications have nothing at all 
to do with gaming.

                              2012 FUNDING

    Mr. Cole. Okay. Let me take you to another place. I know 
there is considerable disagreement over H.R. 1, but as I am 
sure you are probably aware right now you are operating of 
course under the 2010 budget because we did not get a budget 
done last year. The BIA funding and the Indian Healthcare 
funding under H.R. 1 is actually higher than what you are 
operating under today thanks to Mr. Simpson. He actually 
plussed it up. And so those are two areas you would actually 
get more money in as opposed to less. I would ask you under 
your own budget are those gains preserved in 2012?
    Secretary Salazar. I will have the Director of the budget, 
Deputy Assistant Secretary Haze answer that question.
    Ms. Haze. Representative Cole, if we were to remain at the 
2010 level that is a higher level than was proposed in the 2011 
President's budget for a number of programs.
    Mr. Cole. So in other words the current H.R. if it were to 
become law would actually be higher than the President's 
budget?
    Ms. Haze. Correct. Correct in construction and--
    Mr. Cole. From an Indian standpoint the Republican budget 
is higher. I just want to make that point--it is usually lost 
in debates somehow. Let me ask you something very parochial and 
this is more an attitudinal question than one I would expect to 
be answered definitively.

                              WATER RIGHTS

    Oklahoma has probably the last undefined water rights west 
of the Mississippi and this is an area that is now becoming not 
necessarily contentious, but there are states around us that 
have legitimate water claims on the Red River. We have Texans 
that are interested in buying water from Oklahoma. Within our 
state most of the excess water is located in southeastern, 
south central Oklahoma. We have urban areas that are trying to 
buy up rights--Oklahoma City and what have you for their future 
growth. And we have obviously local people that are concerned 
that they will lose the quality of their environment through 
all of this.
    What I wanted to ask you, is there also an Indian component 
here as there always is in Oklahoma. The Chickasaws and the 
Choctaws have historic claims to these water rights as well. 
And it is my understanding that in any kind of negotiated 
settlement and that is where we would hope to be at some point, 
the Department of Interior, Department of Justice would have a 
trust responsibility to make sure that whatever the final 
settlement was, you know, the appropriate involvement, 
recognition of Indian rights would be part of that. Is that a 
fair statement? Will you be drawn in just by your trust 
responsibilities to be at least an overseer of any settlement 
that was ultimately reached?
    Secretary Salazar. The answer to that, Congressman Cole, is 
yes. Since Deputy Secretary David Hayes is leading all of our 
Indian water rights negotiations I think it would be 
appropriate for him to remark on your question. I will say this 
at the outset I think you are so right in terms of focusing in 
on these water issues because I think as Chairman well knows in 
the west we always say that whiskey is for drinking and water 
is for fighting.
    These are the kinds of cases which in many of the states 
which have gone on for 20, 30, 40, 50 years without any kind of 
resolution. They end up creating a cloud of uncertainty on 
water rights in a state and frankly provide a significant 
amount of money to lawyers and engineers for decades at a time. 
Frankly, if a semblance can be put together that is a tough way 
to follow Idaho and Montana and Colorado, and I think there is 
in Arizona. I think it is applicable as well to Oklahoma.
    Let me have David comment just a little bit on the capacity 
and our process. Thank you.
    Mr. Hayes. Yes, Congressman, we do feel that this is an 
important area of our trust responsibility to help tribes with 
their reserve water rights and typically we are involved. There 
are some capacity issues. We have negotiating teams, but we 
have budget constraints. At any one time we may have some 
constraints in our ability to work with tribes. Particularly 
when those issues are maturing we make every effort to put a 
team in the field to work with the tribal attorneys and with 
the state interests and ultimately with Congress to put a 
settlement together.
    Mr. Cole. I think we are reaching that point in Oklahoma 
that these issues are now very mature and I think the new 
governor wants to work on--there are a lot of different parties 
there. This does not have to be a contentious thing. Nobody has 
drawn their guns at one another yet, but I would--along the 
lines which was mentioned earlier when Mr. Lewis made his 
comment, ask that on this settlement--on Oklahoma that you 
start looking down the road because I have no doubt at some 
point in the next few years there will be some sort of effort 
for a grand settlement. And again if the tribes are not 
involved in it in some sort of equitable way I am sure you will 
start hearing from them at Interior and in Justice asking for 
your help. So this may be a case where your early involvement 
could be really valuable in preventing 30, 40, or 50 year 
lawsuit and frankly letting us use the resource in a 
responsible manner that numerous parties can participate in.
    Secretary Salazar. Happy to help.
    Mr. Cole. Thank you. I yield back, Mr. Chairman.
    Mr. Simpson. Mr. Flake.

                            SOUTHWEST BORDER

    Mr. Flake. Thank you, Mr. Chairman. Mr. Secretary, let me 
turn to Arizona and the border region in particular. As you 
know, in the 2,000 mile border with Mexico, there are about 820 
miles or 43 percent that are tribal, federal, or some form of 
public ownership. The Department of Interior manages most of 
that through the National Park Service or the Bureau of Land 
Management or Fish and Wildlife Services or other agencies.
    In particular, the Tucson sector, which is central Arizona 
and eastern Arizona on the border, has a high concentration of 
this kind of diverse federal/private/state lands and it makes 
it difficult there. For example, the Tucson sector has to deal 
with two national wildlife refuges, two national parks, a 
national forest, and the Tohono O'odham Indian nation as well.
    GAO did a study late last year and noted that the majority 
of the 26 stations responsible for patrolling federal lands 
along the southwest border indicated that they have experienced 
delays and restrictions in patrolling and monitoring due to the 
public lands issues. And specifically they noted it has 
routinely taken several months for the Border Patrol to obtain 
permission from land managers to move mobile surveillance 
systems because of the need to perform the complete 
environmental historical assessments. Sometimes the Border 
Patrol notices that by the time they get permission it has been 
several months and the need has changed and the traffic has 
shifted. Are you aware of these kinds of delays? If so, what 
are we doing to mitigate the problem?
    Secretary Salazar. Congressman Flake, thank you for your 
question and let me say that the Department of the Interior 
recognizes the role that we play on the southern border where 
41 percent of those lands are managed by Interior, either as 
wildlife refuges, national parks, BLM lands, or tribal lands. I 
personally have taken three trips as Secretary of the Interior 
to different parts of the border including, one to the Tucson 
sector which you discussed. We have a good working relationship 
with Homeland Security and the Border Patrol. We addressed the 
issues on border crossings and I believe the best thing that 
happened in the last several years is the relationship we now 
have is a very coordinated response. We have I think at least 
100 law enforcement officers working very closely with the 
Border Patrol of Homeland Security to make sure we are doing 
the right things to secure the border.
    Mr. Flake. So taking several months in some cases to get 
permission for the mobile surveillance unit to change no longer 
occurs?
    Secretary Salazar. You know because I was at Tucson sector 
and I actually spoke with the officials both from Interior as 
well as from the other agencies involved. I can tell you as 
issues have arisen we have made sure we are addressing them as 
quickly and as effectively as we can. I think problems that 
were there historically are not problems, at least that was 
reported to me by the different federal agencies I met with 
when I was in Tucson sector.
    Mr. Flake. Specifically in the Oregon Pipe National 
Monument GAO reported that ``when border patrol requested 
additional access, the monument's land manager determined that 
additional border patrol access would not necessarily improve 
protection of natural resources.'' Obviously that is something 
that has to be taken into account. But how do land managers 
factor into decision making the effect on border security? How 
are those decisions made and who is consulted? Is that a 
decision made locally? Does it go up the chain? Of course you 
would say, ``yeah, it might have an effect on the environment 
if you put a mobile unit here but that is not our only 
consideration.'' I would just like to have some sense of how 
those decisions are made.
    Secretary Salazar. The decisions made are intended to 
achieve the objective of securing the border. The task forces 
we have put together under the MOU which we have with Homeland 
Security are intended to do that. As issues arise we have a 
person who is in charge of coordination on these border 
security issues. To the extent, Congressman Flake, that you 
have specific examples, of issues of concern I would be happy 
to address those. When I was at the Tucson sector what I did 
was I pulled together all of the federal agencies who were 
involved on the border security issue. When I was informed by 
the lead from each one of the agencies within those Tucson 
sectors that the issues between the different agencies which 
caused historic problems, which I think were addressed in the 
GAO report, that we have addressed those issues effectively. If 
we have not I want to know.
    Mr. Flake. So you have an individual there that we can 
contact to address that issue?
    Secretary Salazar. We do in the Tucson sector as well as we 
have a person who is overall in charge of border security 
within the Department of Interior.
    Mr. Flake. I met with several of the ranchers when I was 
there and they have a lot of issues. They have issues with the 
border patrol sometimes not being actually on the border, but 
rather inland a little too far. They did note that they work 
well with the Fish and Wildlife Service on the preserves and I 
appreciate that.

                      SOUTHWEST BORDER MITIGATION

    Let me just talk for a second about mitigation efforts. In 
a letter to the Department of Homeland Security, Representative 
Bishop noted that between 2007 and 2009, Homeland Security 
provided about $10 million for mitigation projects. There is 
also an agreement that an additional $50 million in mitigation 
funds be transferred, if they have not already. Obviously the 
mitigation efforts Homeland Security undertakes are due to 
impacts to the environment in wilderness areas. But, if you 
take Oregon Pipe National Monument for example, everyone has 
noted the prevalence of trash and other things that come with 
illegal immigration. How is that factored in? Is not having 
greater control or monitoring, and not just allowing hot 
pursuits but allowing more effective monitoring, a benefit? 
Does that impact some of the mitigation, or lessen the need for 
some of the mitigation costs, because it is actually a help to 
the wilderness areas? If we stop illegal immigration through 
these areas, a lot of the problems that we see that are very 
detrimental to the environment there are helped out. And yet, 
it seems that the Department of Homeland Security is paying 
mitigation costs for simply doing the job that we need to do.
    Secretary Salazar. Let me say first, I think when anybody 
litters on our public lands whether they are here illegally or 
whether they are here legally, it is wrong. Frankly there is 
too much littering that happens in our public lands all across 
the country. The question on Oregon Pipe specifically--I have 
flown over it. I have visited it and I recognize the whole 
issue of border security has a consequence on the national park 
itself and on the ecological values associated with the 
national park. The mitigation monies were agreed upon as 
provisions of the law and the funding by the Congress to build 
a fence between Mexico and the United States. It was intended 
to mitigate against the ecological consequences of the fences 
being built. Frankly in many of those areas the kind of fencing 
that has gone in has been sensitive to some of the ecological 
concerns that we had. Notwithstanding, there are still these 
issues we are working through to make sure there is appropriate 
mitigation for areas where the environment is being impacted. 
We are working very closely with Homeland Security to make sure 
those measures are appropriate.
    Mr. Flake. All right, just in closing I just want to say 
that the nature of border crossings have changed substantially 
over the year. It used to be the exception to the rule that 
crossers would have ties to smuggling rings or drug cartels. 
Now, it is almost the exception that they are not. And the 
detrimental impacts on the environment, and more particularly 
in Arizona on the taxpayers with respect to healthcare, 
education, and criminal justice costs, are substantial. If we 
could have a better working relationship between the land 
managers on our federal lands near the border and our federal 
agents who are charged with protecting them, it would help us 
all. And so I look forward to working with you on that.
    Secretary Salazar. Appreciate that very much. Let me just 
say in closing, I spoke in my opening comments about importance 
of conservation. The national parks and refuges and BLM lands 
are part of the economic engine of America. As we look at the 
difficult economic times we are facing as a country, looking at 
places like Oregon Pipe and so many of the other natural 
resources, assets you have in Arizona I believe need to be 
looked at in that perspective as well. For me when I am in the 
border country as I was in Oregon Pipe, I recognize that there 
are parts of it which have been closed because of issues 
relating to criminality on narco-trafficking. It is an issue of 
great concern to me. I think there are ways in which we can 
continue to work together, Congressman Flake. I know that you 
have a particular interest in the area and I look forward to 
working with you to see how we can move forward. Secretary 
Napolitano spends a great amount of her time working on these 
issues and I think this is another place where there is a 
possibility we can put together a bipartisan way forward as we 
deal with these border security issues.
    Mr. Simpson. Mrs. Lummis.

             COSTS OF ENDANGERED SPECIES ACT IMPLEMENTATION

    Mrs. Lummis. Thank you, Mr. Chairman. Mr. Secretary, my 
first couple questions are about the implementation of the 
Endangered Species Act and its costs. What is your most recent 
report on how many Endangered Species Act listed species have 
recovered and been delisted and at what cost to the taxpayers?
    Secretary Salazar. Let me ask whether the Deputy Secretary 
or would the Budget Director have an answer to the question. If 
we do not we can try to get something back to you that will be 
the response. I will say this, Congresswoman, as you look at 
the issue of endangered species you know just over the last 
several years in our delisting of the whooping crane and other 
iconic species I think it is important to recognize that there 
have been major successes with respect to the implementation of 
the Endangered Species Act. For our children and our 
grandchildren, I think it is important that they will be able 
to know a bald eagle or a golden eagle or a whooping crane 
still walks this planet. We do have significant successes in 
terms of the implementation of the Endangered Species Act.
    Now it does not mean it is perfect. It does not mean it 
cannot be improved. I think Congressmen Calvert earlier was 
mentioning how we should be perhaps looking at multispecies 
conservation in a better way. A lot of what we are trying to do 
with the landscape conservation cooperatives is trying to look 
at how we can manage a habitat in a better way that is more 
effective. If there are ways in which we can improve it then we 
will be doing it.
    Mrs. Lummis. Now I share your interest in conserving 
species and in species diversity in America. I am just curious 
about which ones really have been successfully recovered and 
delisted.
    Secretary Salazar. You know what we could do is I can get 
you a list, Congresswoman Lummis, on that exact question on 
which species happen to be covered and which ones have been 
delisted. We can get it to you.
    Mrs. Lummis. And are you able to assign costs to those 
programs?
    Secretary Salazar. We will get you information. I do not 
know how precise it will be but we will get you some 
information on cost.

                         ROCKY MOUNTAIN WOLVES

    Mrs. Lummis. Okay. Thanks very much. You may be aware that 
with regard to wolves in the Rocky Mountains, the original goal 
was 30 breeding pairs and 300 wolves and that was going to be 
the initial recovery goal. Right now the official count is more 
than 1,600 wolves and 113 breeding pairs and the real number is 
probably higher. That is just the latest official count. At the 
same time we have seen one herd of elk and another of moose 
just decimated. It is the moose in the Gros Ventre in Wyoming 
and the Lolo elk herd in Montana that have been the most 
decimated by wolf recovery.
    And so my question is about the cost of balancing the 
recovery of wolves with other species that are sacrificed in 
the process. At what point is the Department obligated to step 
in and prevent the complete destruction of the Gros Ventre 
moose herd which is declined by 90 percent in terms of 
survivability of the young moose calves and the same with the 
Lolo elk herd. It has been a 90 percent mortality of the calves 
in the elk herd at Lolo. When do you step in?
    Secretary Salazar. Well, I think the events of the last 
several years have indicated where we are very clearly. We 
believe the wolf population in the Northern Rocky Mountains has 
been recovered. I think the numbers tell us that. I think the 
numbers in Wyoming as well tell us that. The law requires us to 
make sure we have recovery programs in place. Idaho certainly 
has done that as has Montana. Wyoming, we believe, needs to 
improve on its recovery program and we are engaged in very 
constructive conversations right now with Governor Mead. 
Hopefully we will be able to move forward with a program that 
one, keeps the wolf from going extinct and is on the program 
where we can take it off of the endangered species list. And 
two, allows management of the population that will include the 
hunts which have been authorized in places like Idaho and 
Montana.
    Mrs. Lummis. Well, you know I appreciate our different 
perspectives on this. I can tell you that this issue is the 
biggest source of frustration for not only people in Wyoming 
but for hunters who want to, and who have spent a lot of money 
to restore a very robust elk and moose population that is now 
being decimated by a predator who was introduced under the 
nonessential experimental population section of the ESA.

                               WILD LANDS

    Be that as it may, I will move on now and talk about wild 
lands which is also creating some interesting conversations in 
my State of Wyoming. I know you issued your wild lands 
initiative in December and last week issued further guidance on 
the wild lands program and the guidance indicates that the BLM 
field offices must inventory all its lands for wilderness 
characteristics, then during the RMP process the lands have to 
be protected so as not to foreclose on the option of 
designating them as wild lands in the final plan. The catch I 
see is that the authority to designate WSA's ended in 1993. So 
my first question is what do you believe is the authority that 
you possess to prioritize wild lands above other designations?
    Secretary Salazar. Since the Deputy Secretary was involved 
in helping me draft the Secretarial Order, he can look at the 
law as well as I have. I will have him answer the question 
because I think I had answered it as well.
    Mr. Hayes. Congresswoman, the authority is Section 201 and 
202 of the Federal Land Policy Management Act. This is not 
Section 603 Wilderness Study Area Designation, that did expire. 
The general provisions in FLPMA per the Secretary's previous 
comments give the BLM the authority, really the responsibility 
to determine which of the multiple uses make the most sense for 
a given area of public lands and at a certain time that can be 
managing for wilderness characteristics. That is not for all 
time. That is why the RMP process is so important, the planning 
process.
    This is a public process, there is essentially a two step 
process. One, identify the lands with wilderness 
characteristics. Then have a public process and decide during 
this period of the management plan--are we going to have 
leasing for oil and gas in those areas? What uses are we going 
to have or should we during the period of the RMP process keep 
those wilderness characteristics and keep them in conservation 
from hunting, angling, and other sorts of uses. Those decisions 
can be revisited with the next RMP. This is not a permanent 
designation. It is not a permanent protection. That is for 
Congress to do. Only Congress can make a permanent wilderness 
area designation. This is just common sense looking out and 
deciding what to do.
    The circumstance where we saw this need really, 
Congresswoman Lummis, was the situation in Utah where there is 
a huge amount of land that has wilderness characteristics that 
was recently inventoried in connection with the last RMP. There 
is no guidance provided to our BLM folks, industry folks, 
recreation folks as to how to manage that landscape, no 
guidance whatsoever. Decisions should be made as part of the 
RMP so folks will know whether those lands are going to 
continue to be managed with wilderness characteristics and 
identified as wild lands or perhaps some of them not because 
they are close to oil and gas and there are some resources 
there that should be developed. The idea is to have clear 
guidance.
    In the absence of guidance in Utah virtually 50 percent of 
every oil and gas lease is now protested because a lot of those 
are in these areas with wilderness characteristics. There is no 
guidance so they are protested. We want more clarity from all 
parties involved. We think the RMP process and public process 
is the right way to go to provide that clarity.

                        OIL AND GAS DEVELOPMENT

    Mrs. Lummis. Thank you, Mr. Secretary and Mr. Deputy 
Secretary. I would also like to talk a little bit about some 
energy development issues. On May 10 of 2010, Interior issued a 
directive that state offices must reform their leasing 
procedures for oil and gas development. You have delayed 
approval of leases for an additional year to 14 months due to 
the additional process that is going to be required in my 
state, which of course delays the production and the jobs and 
the revenue. At the same time your budget request in the fiscal 
year 2012 touts your approval of 12 renewable projects on 
public land that when operable are worth 4,000 megawatts of 
energy. There are budget increases proposed for funding solar 
and wind but decreases for conventional fuels. Of course you 
know in my state in the Green River Formation in Wyoming, Utah, 
and Colorado as well there is enough oil shale to supply the 
entire U.S. with energy for somewhere in between 100 and 400 
years. And so I am curious about these 12 renewable projects on 
public land that are still not on line and how many taxpayer 
dollars were spent to approve those while we are not approving 
traditional sources that are sustainable over the next century 
and multiple centuries?
    Secretary Salazar. Thank you, Congresswoman Lummis. If I 
may, bottom line is we continue to approve permits for oil and 
gas drilling on public lands and I think the record will speak 
for itself. In 2010, we approved about 5,000 permits and in 
2011 we expect we will approve 7,000 permits. If you will 
permit me, Mr. Chairman, maybe for purposes of the record I 
ought to review some of the energy information. I think it is 
important to you and to this committee to understand it. First, 
we have had a decrease in oil imports over the last several 
years. We are down from importing 60 percent of foreign oil to 
50 percent in 2010. That is an important thing to happen.
    Mrs. Lummis. Mr. Secretary, is that because we are 
producing more energy in the United States?
    Secretary Salazar. We are as a matter of fact. In the last 
2 years the oil production from the Federal U.S. Outer 
Continental Shelf has increased by more than a third from 446 
million barrels to 600 million barrels in 2010. On the lands 
you are concerned about, onshore public lands, the production 
increased by five percent over the last year. The total U.S. 
natural gas production in 2010 in the United States was a five 
percent increase over 2008 and is at its highest level for more 
than 30 years. I could continue to review more statistics, but 
the point I want to emphasize here is we have had a program 
that has said oil and gas is essential to the energy economy of 
the United States of America and we have been implementing the 
program.
    The reform issues you raised are in part trying to address 
the uncertainty created with all the protests and all the 
litigation occurring when we came into office. By having a 
roadmap knowing where it is appropriate to develop oil and gas 
and where it is not will help us in the development of our oil 
and gas resources in the right places, and that is what those 
reforms are.

                                URANIUM

    Mrs. Lummis. I would like to switch, Mr. Secretary, to a 
question about uranium deposits in Arizona. You issued a draft 
EIS that has one alternative for a full withdrawal of an area 
carved out of the Arizona wilderness that would disallow 
extraction of high quality uranium that is near but not in 
Grand Canyon National Park. And producers of uranium in Wyoming 
tell me that that would be a real blow to domestic uranium 
production even if Wyoming's resources came online. Because as 
you know, we import 90 percent of the uranium that we consume 
here in the United States in our own nuclear facilities. And so 
my question is does the draft EIS indicate a threat exists of 
irreparable environmental harm from the time of exploration to 
mining that has gone on that is significant enough to justify a 
withdrawal or even a partial withdrawal?
    Secretary Salazar. Let me say in the EIS there are, I 
believe, four alternatives from no action to the withdrawal of 
I think 1.1 billion acres to numbers in between. I think it is 
important to say the Grand Canyon and its water resources and 
the importance of maintaining the quality of those water 
resources are important to the seven states sharing the water 
of the Colorado River and important to the economy of all of 
those states.
    In addition, we also recognize that nuclear energy is part 
of our energy future. It is a part of the President's energy 
program and there are resources available within the United 
States. We will move forward with the process in the Grand 
Canyon to reach a decision, that is a best decision to protect 
national interests and will not prejudge the outcome of the EIS 
process which is underway at this point in time. I will suffice 
it to say it is an important enough issue that I have been 
involved in the issue for the last several years and will 
continue to be involved until we make the final decision.
    Mrs. Lummis. Mr. Secretary, do you know whether the draft 
EIS indicated that the threat exists of irreparable 
environmental harm? Did it say that in the draft EIS anywhere?
    Secretary Salazar. In the draft EIS I will say this, the 
decisions I made on the temporary withdrawal were in fact based 
on the possibility of irreparable harm. When you look at the 
water issues and the other interests which we are protecting at 
the Grand Canyon National Park and that environment, my view is 
this is a serious issue that merited the kind of consideration 
it was getting through the EIS processes involved.

                         ROCKY MOUNTAIN WOLVES

    Mrs. Lummis. Thank you, Mr. Chairman, and I would like to 
just make a personal plea to the Secretary that in working with 
Governor Mead on the issue of wolves that you give it the most 
sincere effort you can muster. When I go home the wolf issue 
dominates discussions over things that should be higher 
priorities in Wyoming, and more important issues to our country 
in my opinion. It is because of the loss of hunting 
opportunities and the number of third and fourth generation 
outfitters that are going out of business in these areas--
families that are looking for work elsewhere because their 
family outfitting business has gone under.
    In Wyoming those businesses go under because hunters cannot 
get elk permits. These little businesses are in the areas of 
Cody, Dubois, Jackson, Star Valley, those are all the areas 
where the wolves are reducing the number of animals that can be 
hunted, so of course, the Game and Fish issues fewer permits.
    So I will tell you there are cultural and jobs involved in 
the management of these issues. I would appreciate your most 
sincere and earnest intention in working with Governor Mead to 
try to develop a solution. And thank you for your testimony 
today.
    Secretary Salazar. Thank you very much, Congresswoman.

                            LITIGATION COSTS

    Mr. Simpson. Thank you, Secretary Salazar for being here 
today. I would suggest before we close this hearing that as you 
know there are differences of opinion obviously on the Wild 
Land designation of this country--I think it is going to 
increase losses because I think every decision you make on Wild 
Lands, whether you are going to allow for oil and gas drilling 
or wind turbines or recreation or whatever, you will be sued 
over it. That is a concern to me and I would like at some point 
in time to get into a broader discussion how much of your 
budget is actually spent to try to defend your decisions in 
court. How much money have you spent in court rather on 
managing the lands? Between the Interior and the Forest 
Service, I think it is huge amounts of money. And yet on the 
other hand you do not want to take away people's rights to have 
a say in how we manage our public lands. How do we do that? How 
do we find some compromise where we can maintain people's 
rights to have a say in management of the lands but not spend 
so darn much money in court and instead spend it on the 
management of our public lands.
    So I will be happy to work with you on the Wild Lands 
issue. I know that there--I am tempted to ask since Mr. Moran, 
my good friend, came back, how many proposals or acres in 
Upstate New York or Alexandria is BLM looking at to designate 
as wild lands, but I am not going to ask that. There are many 
other questions that we have but most of them will be for the 
bureau heads, whether it is the wild horse program and the 
amount of money which we are spending on trying to maintain 
that herd and what we are doing there. I think the request this 
year is something like $78 million or something like that. 
Whether it is the Idaho bull trout--I will ask Fish and 
Wildlife Service about that, its impact on them. But I do 
appreciate you being here today and taking the time and 
answering the questions of the committee.
    Mr. Moran. Mr. Chairman would you yield for a moment since 
this came up----
    Mr. Simpson. Not if you are going to respond to what.
    Mr. Moran. No, I am not now, that is----
    Mr. Simpson. I know.
    Mr. Moran. Since this has come up so much, the legal cost, 
maybe you could supply us with a figure on the percentage of 
the budget that is attributable to legal defense in the court 
system? I know Mrs. Lummis has raised that on many more than 
one occasion, so let's just find out what it actually is 
costing in terms of the rest of the program. Whether it is--
really is debilitating our ability to implement other programs.
    Mr. Simpson. If I could, it is not--and I do not know how 
you come up with this--It is not just the amount of money you 
are spending in court. It is the amount of money you are also 
spending trying to make a decision bulletproof so that it is 
not taken to court. I have asked a former chief of the Forest 
Service, I said how much money when you make a decision to do, 
say, a timber cut, how much of the money is spent actually 
making what is you consider a good, sound, scientific decision 
and how much trying to make it bulletproof in court because you 
know you are going to end up in court? And he said depending on 
the decision, probably somewhere between 25 and 50 percent is 
making what we believe to be a good, sound, scientific 
decision, between 50 and 75 percent trying to make it 
bulletproof. How much money are we spending that we should be 
spending on managing our public lands that end up in court in 
trying to prevent it from going to court that ultimately you 
are not going to preempt it? So it is a difficult issue. And if 
somebody has the answer to it I would be a happy camper and 
retire happy.
    Mr. Cole. The answer is loser pays, Mr. Chairman.
    Mr. Moran. It would be good to get a sense of you know if 
you have any idea of what that is costing us and you know what 
the risk such as C-Y-A policy. You know if a risk adverse 
approach it would be good to know how much that is factoring in 
the decision making. Fifty percent seems a little high, but you 
know what I think both sides are going to go up in 
understanding.
    Secretary Salazar. If I may, Mr. Chairman, Congressman 
Moran, we will get some information to you that will be 
responsive to your question. I have a personal view on this and 
I do think so much of the money that ends up being spent on 
litigation could be avoided if we were smart relative to what 
we do with respect to our planning for conservation. When you 
look at, for example, the Landscape Conservation Cooperatives, 
I think Congressman Calvert raised the question about how we 
manage more multispecies when we are appealing with issues in 
southern California.
    So much of it has to do with how we manage the habitat that 
will serve multiple species. Part of what we have right now in 
place is such a high level of fragmentation, we are not able to 
do that. Because of the silos some of you have addressed we are 
not able to do that very effectively across the public lands 
and with the private land owners as well on the willing, 
voluntary participation approach. As we move forward with the 
Landscape Conservation Cooperatives, that is an effort to try 
to manage these issues across a whole landscape as opposed to 
coming in and dealing with one species at a time and one issue 
at a time.

                    LAND AND WATER CONSERVATION FUND

    I would submit to you that I know one of the major 
questions this committee has raised questions about today is 
the Land and Water Conservation Fund of $900 million in the 
President's budget. I think when we look at the United States 
today in 2010 and have a population of 307 million people, but 
we know that by the year 2040 our population is going to 
increase by more than 100 million, where are we going to 
shoehorn in those 100 million people in a way that allows us to 
make sure we still continue our conservation ethic? We hope to 
move a couple million of them into Wyoming, Congresswoman 
Lummis. Maybe a few into Oklahoma, but there is an urgency in 
my view to be proactive in terms of how we do conservation 
planning over the future. A way of doing it in a way like I 
illustrated with the Foothills National Conservation Area in 
Kansas where we can take care of these lands protect private 
property rights, protect the ranchers and farmers and at the 
same time make sure we are doing right by the way of protecting 
critical habitats.
    Mr. Simpson. Well, I have you know--I agree with you. One 
of the reasons we have been working on some wilderness 
legislation in Idaho and other things is that I honestly think 
these lands that become wilderness designations are going to 
become more important in the future rather than less as we get 
more and more people. We are going to look for places we are 
not going to get away from people, you know. How can you go--
how can you find solitude in this world? And I think those 
states that have those are going to be increasingly sought 
after. And that is why we have tried to resolve some of those 
issues and help.
    Mrs. Lummis. Mr. Chairman, I would add that the 
acquisition, because of that very point, the acquisition of 
property by the federal government I do not believe is always 
the best answer. I think frequently the best answer is the 
acquisition of conservation easements on working landscapes. 
You get three times the bang for your buck if you have a 
conservation easement versus acquiring fee title to the 
property. In addition, the steward of the land comes with the 
land. So you do not have the same management issues of having 
either an absentee land owner or a semi-absentee land owner. 
There are so many advantages to conservation easements as a 
tool that we should be using more of rather than acquisition of 
these simple acts would. Thanks, Mr. Chairman.
    Mr. Moran. Well, I can understand the tax incentives and so 
on, too, but the only thing I was going to raise with regard to 
what the Secretary was saying, Mr. Chairman, is if we are going 
to expand our populations as has been done into the southwest 
Nevada, Arizona, Colorado, Wyoming, and Wyoming is not really 
in the southwest, but in particularly in those southwest areas, 
the quantity and quality of our water supply is just so 
essential and a lot of this land acquisition is so we can 
maintain the water sources that--a lot of what Interior is 
doing is trying to maintain those water sources. And if you can 
go back into why we established the National Forest and the 
National Parks a lot of them was to try to--you know we had 
deluded these forests and we had to acquire the land to clean 
it up so we could get the water flowing smoothly and not allow 
it to become filled with sediment and contaminants.
    So anyway, I know there are probably are some areas where 
we can find agreement and I certainly appreciate your testimony 
and your leadership, Mr. Secretary. I know the Chairman does as 
well. Thank you, Mr. Chairman.
    Mr. Simpson. Thank you. Again, thank you, Secretary 
Salazar. It has been a pleasure to work with you over the past 
years. I look forward to working with you to solve some of 
these problems.
    Secretary Salazar. It is my honor. Thank you, sir.

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                                          Wednesday, March 9, 2011.

              NATIONAL PARK SERVICE FY 2012 BUDGET REQUEST

                               WITNESSES

JONATHAN JARVIS, DIRECTOR, NATIONAL PARK SERVICE
MARGARET ``PEGGY'' O'DELL, DEPUTY DIRECTOR OF OPERATIONS, NATIONAL PARK 
    SERVICE
BRUCE SHEAFFER, COMPTROLLER, NATIONAL PARK SERVICE

                  Opening Remarks of Chairman Simpson

    Mr. Simpson. The committee will come to order.
    Director Jarvis, I want to thank you and your colleagues 
for being with us today to discuss the work of the Park Service 
and your priorities for the coming year. I am going to keep my 
comments brief so that we can hear from you and provide members 
the opportunity to ask questions before we attend this 
morning's joint session with the prime minister of Australia.
    I want to make two observations. First, your budget request 
for next year makes some decisions that I find a little bit 
puzzling. On the one hand, the budget request for the Park 
Service land acquisition represents a $234 million increase 
over the enacted 2010 level. That is an unprecedented increase 
in just 2 years. On the other hand, the budget request cuts 
construction funding by $77 million. It seems to me that we 
ought to be addressing long-term maintenance and repair needs 
within our parks before acquiring additional acquisitions that 
will only add to the historic funding backlog.
    Secondly, I want to commend you and Bruce Sheaffer for the 
progress you have made over the last couple of years to address 
the issue of high unobligated balances within the Rec Fee 
program. We included report language in the fiscal year 2010 
bill raising concerns over these high balances and directing 
the Park Service to take corrective action. When we first 
raised this issue, the carryover balance was approaching $300 
million. Your written testimony suggests that this balance is 
now below $90 million.
    One of our subcommittee's primary goals is oversight, and 
your work in the Rec Fee program demonstrates that we can work 
together to meet our common oversight goals. I look forward to 
focusing on these and other issues this morning.

                  Opening Remarks of Congressman Moran

    Mr. Simpson. But first let me yield to Mr. Moran for any 
opening remarks he might have.
    Mr. Moran. Thank you, Mr. Chairman.
    I have some great quotes here but I am not going to take 
the time. Do you want me to?
    Mr. Simpson. If it will make you feel better.
    Mr. Moran. Seriously? Okay. All right. If you want me, Mr. 
Chairman. He is the boss. As one of the prime movers of the 
national park movement, Chairman Simpson's old friend John Muir 
wrote: ``Everybody needs beauty as well as bread, places to 
play in and pray in, where nature may heal and give strength to 
body and soul.'' He also wrote: ``Society speaks and all men 
listen''--he meant to say all men and women listen--``mountains 
speak and wise people listen.'' So as the caretaker of so many 
wonderful places, some of the Nation's preeminent mountains, 
you have to speak and represent the interests of the mountains, 
and you also have to lead 25,000 employees, provide quality 
services for over 280 million visitors every year and provide 
all kinds of technical assistance and conservation education.
    The fact is with the exception of the Great Outdoors 
initiative, which I do support, this is a very tight budget, 
but given the importance of the parks to our Nation, I trust 
that there will be bipartisan support for most, if not all, of 
your budget requests because we need to continue to care for 
these priceless resources and make them safe for our visitors 
and make sure they last for our children and their children to 
enjoy.
    So we look forward to the hearing, and we will get on with 
it. I am sure we will be able to finish up by 11:00. Thanks, 
Mr. Chairman.

                   Opening Remarks of Director Jarvis

    Mr. Simpson. Thanks, Jim. As Tommy Smothers once said, I 
talk to the trees but they never listen to me. I do not know if 
any of you are old enough to remember that.
    Thank you. We look forward to hearing from you, Director.
    Mr. Jarvis. Mr. Chairman and the members, thank you for 
this opportunity to appear before you and present our fiscal 
2012 President's budget request for the National Park Service. 
If I may, I would like to submit the written testimony for the 
record and just summarize here.
    We really appreciate this Committee's support for the work 
that we do as stewards of our Nation's most cherished natural 
and cultural resources. We look forward to continuing to work 
with you as the National Park Service prepares for its second 
century of stewardship beginning in 2016, this year being our 
95th.
    As any resource manager can tell you, wise stewardship 
sometimes involves making very difficult choices. The National 
Park Service's fiscal 2012 budget request reflects a careful 
and serious response to the need to reduce federal spending by 
supporting our highest priorities while proposing significant 
reductions to a number of worthy programs.
    In addition to the program reductions, the budget request 
includes substantial management savings and efficiencies. The 
National Park Service is making significant progress in 
reducing unobligated balances, as you mentioned, Mr. Chairman. 
The aim of these efforts is a more targeted and focused use of 
our existing funds limited to those strategic areas we have 
determined to be the highest priorities of the National Park 
Service. By focusing available resources on the areas of 
greatest need, the NPS can maintain its existing 
responsibilities while supporting some new initiatives.
    The fiscal 2012 budget proposes total discretionary 
spending of $2.9 billion. That is a net increase of $137.8 
million above the FY 2010 appropriation. The budget request 
includes an increase of $39.5 million for park operations that 
will serve more than 100 park units. This amount is intended to 
address operations in new parks, support other new 
responsibilities, improve mission-critical operations, engage 
youth in employment and educational opportunities, and protect 
historical assets at parks commemorating the Civil War 
sesquicentennial.
    Our operations budget is key to helping us continue to 
protect the critical natural and cultural resources we are 
entrusted with and to serve visitors who this past year 
numbered 285 million.
    We are supporting the America's Great Outdoors initiative, 
which includes fully funding the Land and Water Conservation 
Fund programs at $900 million. The Park Service's budget 
component of that includes $160 million to acquire around 
98,000 acres of land within the authorized boundaries of units 
of the national park system. These proposed acquisitions were 
determined through a coordinated process within the Department 
of Interior among our bureaus as well as with the U.S. Forest 
Service in the Department of Agriculture. The criteria we used 
emphasize opportunities to jointly conserve important 
landscapes, especially river and riparian areas, wildlife 
habitat, urban areas that provide needed recreational and 
threshold experiences and those containing important cultural 
and historical assets. We also looked at the ability to 
leverage those funds with partners and with other agencies.
    Also included in the budget is $200 million for the State 
side of Land and Water Conservation Fund which would enable 
communities to enhance outdoor recreational opportunities. A 
portion of these funds would be allocated through a competitive 
component targeted at community parks, green spaces, landscape 
level conservation and recreational waterways. This is a new 
approach we are taking. These grants would address public 
concern about the lack of open space and outdoor recreation 
areas in certain urban and other areas. This was frequently 
conveyed to us in the listening sessions we held around the 
country for the America's Great Outdoors Initiative. In 
conjunction with the State conservation grants, the request 
includes a $1.1 million increase for the NPS Rivers and Trails 
Conservation Assistance program to assist communities with 
technical assistance.
    The fiscal 2012 budget maintains funding of $9.9 million 
for the Secretary's Cooperative Landscape Conservation 
initiative. This will bring together networks of resource 
professionals and promotes science-based understanding of the 
effects of climate change. This will produce practical 
applications that have broad benefits for resource managers 
seeking cost-effective approaches to conservation in the face 
of these economic times.
    In order to fulfill these stewardship responsibilities and 
these critical increases, they are offset by some cost savings 
and some program reductions. The proposed budget requests no 
funding for Save America's Treasures and Preserve America 
grants programs or the Park Partnership Project Grants program.
    The request also eliminates funding for Statutory Aid and 
proposes significant reductions in Construction and the 
National Heritage Areas program. It also includes budget 
efficiencies and savings totaling $46.2 million.
    I would like to speak to you, and we can discuss in the 
questions about the efforts we are taking to restrain spending, 
but I also would like to remind everyone of the economic value 
of parks. The national parks are drivers of economic growth, 
particularly in gateway and rural communities. They stimulate 
spending and job creation. Taxpayer investments in the national 
parks result in far more than the obvious recreational and 
educational dividends. In 2009, park visitors spent $11.9 
billion and supported 247,000 private sector jobs. So it is not 
just a matter of stewardship but it is also a great economic 
investment.
    In closing, I would just like to say how much we appreciate 
the support of this committee and of all the members here. It 
has been a great relationship and I am sure it will be in the 
future.
    That concludes my remarks, and I will be pleased to take 
any questions.
    [The statement of Jonathan Jarvis follows:]

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                      DEFERRED MAINTENANCE BACKLOG

    Mr. Simpson. Thank you. Let us start off with the backlog 
maintenance. What is the level of backlog maintenance that we 
currently have, and what would it take in each year to address 
it to get that amount coming down substantially?
    Mr. Jarvis. Well, the current level of maintenance 
backlog--and let me just say right up front that the Park 
Service over the last 10 years, particularly in the last 
Administration, put a lot of emphasis to really understand this 
number, and I think we have a better handle on the actual 
number with a fair amount of real quantitative analysis than we 
have ever had in the past. The number is about $10.8 billion in 
terms of our total maintenance backlog. The National Park 
Service has an extraordinary number of assets--buildings, 
roads, wastewater treatment facilities across the country--and 
it tends to be an old infrastructure, much of it built 30, 40 
years ago. So the maintenance backlog number is quite high.
    Within that subset, though, there are high-priority assets 
and then there are medium-priority assets. What we have been 
doing over the last few years is really beginning to shift our 
focus to the resources that we do have, on our high-priority 
assets, those that rank very high in the asset priority index 
system, those considered mission-critical assets. And then 
there are some assets that are still lumped within that $10.8 
billion that are more low priority and in some cases we need to 
focus on actually getting rid of those assets and getting them 
off the books as well.
    Mr. Simpson. Assets like what? Do you have some examples?
    Mr. Jarvis. Yes. In some cases it may be an acquisition of 
a property that has a house on it and the house was acquired as 
a part of the acquisition process and although it is not needed 
for public use, it is still sitting on our books. It was 
assessed and added to our inventory. Those kind of places need 
to be removed. That is one of the priorities that I have set 
for our regional directors: to look at those and get them off 
the books and use whatever discretionary funding they have to 
get those down and then to focus our funding that we do have.
    I will say, though, I am concerned that the construction 
budget in this budget will not really help us keep up with 
that. There will be a growth in the maintenance backlog as a 
result of this level of funding in terms of the deferred 
maintenance.

                 LAND ACQUISITION AND STATE ASSISTANCE

    Mr. Simpson. Is it wise to do additional land acquisition, 
to put the emphasis on additional land acquisition and decrease 
that emphasis on our backlog maintenance?
    Mr. Jarvis. Well, it is a tradeoff. There is no question 
about that. The Administration put a priority on full funding 
of the Land and Water Conservation Fund for this year at $900 
million and I believe the Park Service got an appropriate 
allocation of that request both for State side and Federal 
side, but in these tough economic times, of course, it is a 
tradeoff. Keep in mind, these are inside of the boundaries.
    Mr. Simpson. All of the proposals are inside the boundaries 
of----
    Mr. Jarvis. They are all inholdings, and in all cases there 
is a willing seller. In all cases, frankly, they create some 
efficiency of management in terms of consolidation of assets. 
So it might appear in many cases this is adding cost to us but 
in most cases it is actually creating a certain level of 
efficiency for park management. The other thing that we did is 
look at if we are acquiring lands that have structures on them 
that are non-historic that we will work to have those removed 
as a part of the acquisition process so we are not adding to 
the backlog by gaining non-critical assets in the process.
    Mr. Simpson. Is one of those acquisitions going to solve 
the problem in Grand Teton?
    Mr. Jarvis. It is. It is going to solve a significant 
potential threat to the Grand Tetons through the acquisition 
that we recently negotiated with the State of Wyoming to 
acquire a highly developable set of properties right in the 
center of the Jackson Hole Valley.

                          PROGRAM ELIMINATION

    Mr. Simpson. Part of the funding that you ended was the 
Park Partnership program, Save America's Treasures. What was 
the reasoning behind that?
    Mr. Jarvis. Well, I will say up front both of those are 
good programs, and these were hard decisions we had to make in 
order to reach the bottom line. I think Save America's 
Treasures had a positive effect on historic and cultural 
resources around this country and been quite popular within the 
historic preservation community as well. The Park Partnership 
program was originally the Centennial effort that Secretary 
Kempthorne and others built, and it was a great program for 
leveraging. It was a program set up to draw matching funds from 
non-Federal sources. But ultimately, in order to achieve this 
particular budget, we gave priority to preserve the operational 
budget of the National Park Service, which is the bread and 
butter, the park operations, the protection of resources, the 
providing of public services on the front line of our 394 
units. It was certainly my priority to keep that functioning. 
That is where we provide great services to the American public 
and to communities. Then with the full funding of the LWCF we 
had to take the hits in other places, and those are the ones 
that were chosen.
    Mr. Simpson. In this limited budget year and probably for 
several years to come, we are going to have to prioritize as we 
appropriate money in this budget. Is park operations the 
highest priority that you have?
    Mr. Jarvis. Mr. Chairman, yes, sir. From my perspective, I 
believe park operations provides the primary benefit to the 
American public and to these resources so that is our priority.

                          DEFERRED MAINTENANCE

    Mr. Simpson. One other question back on backlog maintenance 
that I forgot to ask, what would it take in terms of an 
appropriation to start reducing that amount of backlog 
maintenance?
    Mr. Jarvis. We have been doing quite a bit of analysis on 
this. As a matter of fact, our leadership in the Park Service 
sat down recently to go through this in excruciating detail. We 
would need to be allocating about $677 million a year 
(currently allocating $590 million a year) to maintain the 
current level.
    Mr. Simpson. Mr. Moran.
    Mr. Moran. Thanks, Mr. Chairman.

                 LAND ACQUISITION AND STATE ASSISTANCE

    Mr. Jarvis, the land and water conservation program does 
have the one increase that is significant that you mentioned. 
Would you get a bit into how the competitive part of the State 
side land and water conservation program would work? What kind 
of criteria might you follow and what types of projects do you 
think the States are most interested in pursuing?
    Mr. Jarvis. Thank you, Congressman. That is a great 
question, because it is new. As you know, the State side of 
Land and Water Conservation Fund for many years has been 
relatively small and almost inconsequential but by increasing 
it, what we wanted to do and what we heard from the public in 
the 51 listening sessions around the country related to 
America's Great Outdoors, was an interest in urban parks. There 
was an interest in blueways or waterways, and connectivity to 
rivers. Secretary Salazar has said many times for most of our 
history we turned our backs to the rivers and we are now 
turning our faces to the rivers and looking at them as a strong 
community asset, but in many cases there is no access. Also, 
there is interest in creating open space and recreational 
opportunities for young people, and looking for where we can 
connect communities and link up schools, state parks, city 
parks and those kinds of things. Those were the broad criteria 
that came out of the America's Great Outdoors listening 
sessions.
    To get down to the next level of specific criteria, we are 
going to be engaging in a discussion with the states. We think 
that is an absolutely essential component. Next week, as a 
matter of fact, the National Recreation and Park Association, 
the National Association of State Park Directors and the 
National Association of State Outdoor Recreation Liaison 
Officers, who are the ones that really work on the state side, 
will all be in discussions with us about those criteria 
specifically because we think that this is a partnership with 
states and cities about how this should be allocated. Plus, 
there is a step or two in the way. The state side of the Land 
and Water Conservation Fund allocation is based on each state's 
State Comprehensive Outdoor Recreation Plan, or SCORP, and so 
we are going to be working with the states over this coming 
year to amend their SCORP so that every state in the country 
will be competitive for this new process. Forty percent of the 
money will still be equally distributed to the States. Sixty 
percent of the $195 million will be for competitive grants; 
and, $5 million will be for administration.
    Mr. Moran. Great. I think personally that is a terrific 
idea, the states participating partners in what you develop, 
and we get some real innovative approaches that can then be 
replicated in other comparable areas, so it is terrific.

                        MANAGEMENT EFFICIENCIES

    Ms. O'Dell may want to address this. You have got a $39.5 
million increase in the base park operations for more than 100 
park sites but on the other hand, the budget has decreases for 
management efficiencies and there is no clarification of what 
specifically that is all about. So maybe you could better 
explain how the park base increase is going to be used and to 
what extent, though, that is offset by these other across-the-
board cuts.
    Mr. Jarvis. I will take that. The total in terms of 
management efficiencies was $46 million, which is roughly a 2 
percent reduction across our many programs, though in theory it 
is focused strategically on some areas. There are areas that we 
have already begun to apply some efficiencies: travel, for one. 
The Park Service has a travel ceiling that we have imposed 
administratively, much to the chagrin of many of our field 
folks, while looking to use technology, such as video 
conferencing and teleconferencing, to reduce our overall costs 
in travel. We have also consolidated some of our operations, 
particularly in the administrative fields, such as human 
resources and contracting, focusing them into servicing offices 
and consolidating those kinds of things. There is also a 
reduction in there in terms of supplies and materials. In some 
cases, that makes sense but, frankly, there is lack of a plan 
about how that is actually going to work.
    The challenge with the National Park Service is that we are 
geographically distributed across the country. We have parks 
from the Virgin Islands to America Samoa, and it is difficult 
for them to share the same pile of gravel. But at the same 
time, we are attempting to mine as many efficiencies in the 
organization as possible.
    Mr. Moran. We have got this kind of stuff throughout the 
budget, these management efficiencies. So this is not a new 
concept. How successful have you been in the past roughly in 
achieving it, you know, whether it is waste, fraud and abuse, 
management efficiencies or whatever, across-the-board cuts? 
When I was a budget officer, we used to round things out that 
way, if we could not quite balance the budget.
    Mr. Jarvis. Well, ultimately it comes down to in many cases 
as an across-the-board reduction, and so each park winds up 
with a 1 or 2 percent reduction in their overall operating 
costs. So you get on one hand 100 or so parks get a base 
increase, $39 million distributed and then everybody takes a 1 
or 2 percent reduction. Park superintendents are smart people 
and they figure out where they can find that efficiency. One of 
the things we have been doing around the service is, there are 
assets that can be shared between parks, there are positions 
that can be shared, there is equipment that can be shared when 
parks are in relative proximity. In Idaho, I know parks such as 
Craters of the Moon and Nez Perce and others share individuals 
such as safety officers and others. So instead of every park 
having one of everything, there can be those kinds of 
efficiencies that can be mined.

                             NATIONAL MALL

    Mr. Moran. Okay. Mr. Chairman, I have one other area of 
inquiry that I wanted to get into. Do you want to do a second 
round or do you want me to raise it now? Okay. Thank you, Mr. 
Chairman.
    National Mall--I think it is a problem frankly. It needs to 
be cleaned up. It needs to look a little better and a lot of it 
is just because so many people use it. It is going to look 
frayed eventually. So I would like to know what is in this 
budget for the National Mall and the extent to which you think 
the nonprofit sector could be raising additional revenue to do 
some of the restoration that is needed, and I have a couple of 
follow-up suggestions on that.
    Mr. Jarvis. I am going to ask Deputy Director Peggy O'Dell 
to take that question as she served not only as the 
Superintendent of the Mall but also as the Regional Director 
for the National Capital Region.
    Ms. O'Dell. Thank you for that question, Mr. Moran. I know 
you have been a great supporter of the Mall for years, so I 
appreciate that.
    I will start with the second half of your question. The 
Trust for the National Mall has grown in the last 3 years to be 
a very viable nonprofit for us. They have completed a 
feasibility study that says they will be an effective 
fundraiser at a very high level at about the $350 million level 
over about 7 years. They are working hand in glove with the 
park staff to determine the best way to apply those private 
dollars that supplement the appropriation that we have for the 
National Mall going forward. The increases that we requested 
for the National Mall include a base increase for the operation 
of the new Martin Luther King Memorial that will be opening 
this August, which is a critical facility to staff, and we are 
requesting to continue to invest in the turf improvements for 
the grass on the Mall. We are making sure that our management 
practices will support keeping that turf in good condition.
    Mr. Moran. Mr. Chair, I want to direct this to the chairman 
as well. There are going to be innumerable demands for more 
museums and memorial sites on the National Mall, and all of 
them have their political support base, and if you have a 
memorial for one ethnicity or cause, every other group is going 
to want something similar.
    Now, to accommodate them all without violating the intent 
of the Commemorative Works Act, which is authorized in the 
legislation, it would seem that we need to do what Congress did 
a century ago with regard to the Lincoln Memorial, and that is 
to expand or enlarge the mall on available nearby federal land. 
None of the current federal plans address this mall expansion 
or the larger future needs of the mall across jurisdiction, 
whether it be the Smithsonian, the Park Service, the National 
Gallery, Architect of the Capitol, Department of Agriculture 
and so on, so they all have jurisdiction over some federal 
land. But these are ad hoc expansion plans we are dealing with 
now. You know, they float around there, groups come to see us. 
We do not want to say no. And they want everything on the mall. 
We need more of a unifying concept, it would seem, but most of 
the land is under Interior's jurisdiction designated by 
Congress for future memorials.
    Now, there is a private group of scholars, designers, 
academics that want a larger, more visionary planning effort to 
go forward. I think you are familiar with it. What do you think 
about that, a larger concept of the mall so we do not throw 
everything into this already crowded space trying to 
accommodate everybody's interests? Have you given some thought 
to that?
    Ms. O'Dell. We have, Mr. Moran, and I would say that we 
largely have that already with the way that Congress has 
structured the Commemorative Works Act that protects what we 
know today as the Mall proper by having it designated as the 
reserve and then the land bordering that is Area One, and it 
takes a lot of Congressional support to get any future 
monuments or memorials in that area. In addition to that, we 
have a citywide plan that has been developed in concert with 
the District that designates memorial sites throughout the 
city, which in effect does what that group was calling for: to 
enlarge the space of the National Mall.
    Mr. Moran. Well, they need to call it the Mall. For 
example, West Potomac Park, we have land there. I want to 
register this concern because it seems to me, Mr. Chairman, 
that our generation particularly thinks every iconic figure 
needs their own memorial and no generation is going to be as 
important as our generation, and we really ought to be doing a 
better job of preserving space for future generations. So I 
just wanted to throw that out there. Thank you.
    Mr. Simpson. Part of the problem with the Mall is that we 
love it to death. It is overused. There has been some 
contention about the Folk Life Festival that the Smithsonian 
puts on regarding the use and so forth and where the displays 
are located. Have you worked with them? Are we resolving the 
issue for the coming year?
    Mr. Jarvis. I will take a shot at that. Actually, let me 
just suggest that, frankly, for maybe the first time, we have 
very strong support in the Administration to really protect the 
Mall and invest in it. I think Solar Decathlon is a perfect 
example of where we were able to find a solution. Actually, 
Peggy was the lead on that. They are still holding the event, 
but in West Potomac Park not here on the main part of the Mall. 
It satisfies their desire to be in downtown Washington but not 
right in the center, and that was a fight. Frankly, there was a 
lot of interest and a lot of pressure on both sides. Secretary 
Salazar stood up for us and said no, we are not going to allow 
these large impactful events to occur on the Mall. That has 
been our position for a long time. We have been working very 
closely with the Smithsonian to still have the Festival of 
American Folk Life on the Mall but reduce its impact. And then 
part of the design of the Mall, the record of decision that we 
signed last year really begins to look at the Mall and to 
create these spaces that are hardened and protected and have 
the infrastructure that can manage these things and not have 
negative long-term impacts. I think we are on a good path with 
the Mall.
    Mr. Simpson. Well, I will tell you that most people who 
come to Washington from Idaho who have never been here before 
see pictures of the Mall and they see the aerial photographs 
and everything is green and beautiful, and the biggest 
complaint they have when I talk to them is how disappointed 
they were in how rundown the Mall is--not that we do not 
maintain it but that it is just rundown from overuse--and I 
think you will find great support among this subcommittee and 
Congress in general for bringing the mall up to the standards 
that I think we all expect it to be.
    Mr. Jarvis. Yes, the ARRA funding is a really great first 
investment, about $34 million. We are working on the reflecting 
pool right now and then we are taking the Mall piece by piece.
    I mean, it was never designed, like you would a sports 
field. The Mall has a thin layer of organic soil and clay and 
grass----
    Mr. Simpson. We went out a couple years ago and tried to 
dig into it.
    Mr. Jarvis. Yes, it is hard as a rock.
    Mr. Simpson. I am still trying to fix my leg.
    Mr. Serrano. You know, you are making me feel very guilty. 
I just ran a couple miles there this morning. Maybe I should 
stop running on it.
    Mr. Simpson. That is the problem. There are too many people 
running on it.
    Mr. Jarvis. You are compacting the soil out there, 
Congressman.

                    SAVE AMERICA'S TREASURES GRANTS

    Mr. Simpson. Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chair. I have three things I 
want to touch on. First is more just a comment.
    Save America's Treasures, I was very disappointed in the 
President's decision to do that, and I understand that there is 
a limited amount of funds and we have to make tough choices, 
but it was a collaboration. It was a collaboration many times 
that connected the Park Service with urban core and small rural 
areas to save another story. The national parks tell one story 
but there is another story of the different cultures that came 
together to weave the fabric of our society. So I am struggling 
in this tough time. We are all making sacrifices on what to 
save and what to protect but America's Treasures is something 
that also has another ripple effect to it too. In some of the 
inner cities where they are saving some of these historic 
buildings, they are saving them in older parts, the urban 
areas. The building gets saved. It looks attractive to the 
neighborhood. It has an impact on the economy that sometimes we 
did not even foresee and then it also is providing 
opportunities for tradespeople to keep crafts and artisanship 
going which we are close to losing them in this country. So 
there are many parts of Save America's Treasures, and I just 
wanted to be on the record and I think I am going to try to 
figure out what I can do to be helpful.

                            LAND ACQUISITION

    The point also about backlog of maintenance and being 
careful about acquisition, Voyageurs National Park was a very 
contentious park when it was founded starting with Barb West. 
She did a fabulous job when she was the superintendent there. 
Our current superintendent is not here right now. He is 
fabulous. But we have a chance, and it is number 10 on 
holdings, to I think resolve, put to rest and give some ghosts 
of Voyageurs National Park a chance to move on to the other 
side. So I really hope as you go through that that we are 
mindful of creating that balance and once-in-a-lifetime 
opportunities.
    So those are more comments to the chair on where my head is 
at on some of this budget process as it deals with the Park 
Service and Save America's Treasures.

                    ST. CROIX NATIONAL SCENIC RIVER

    All politics is local and so I am going to focus for a 
second on the Minnesota border with the St. Croix River. And by 
the way, just for people who are not familiar, Stillwater is an 
old river town and has an old lift bridge. You call it two 
lanes. It is basically one. Trucks do not belong on there. They 
get stuck on there. There is no weigh station, no one kicks 
them off. The bridge needs to be replaced. I am for replacing 
it. The Park Service has never objected to the bridge being 
replaced but just wants it done in a good way.
    So here I go, Mr. Director. In 1996, the Park Service 
evaluated a proposal for a four-lane freeway-style bridge over 
the lower St. Croix. This is in a historic river town. Ten 
miles down the river, there is, by bridge standards, a pretty 
good bridge called I-94 which the States of Minnesota and 
Wisconsin are looking at adding more lanes to. So having said 
that, they need a bridge. The Park Service looked at this in 
1996 and concluded that the bridge would irreparably harm their 
river of scenic and recreational values. So then in 2005, when 
considering another proposal for a freeway-style bridge in 
approximately the same location, the Park Service issued a 
draft. It was a draft evaluation which found that the bridge 
would not adversely affect the river. It was a draft. It was 
still in a working stage. Then in October 2010, after a federal 
court struck down the 2005 evaluation, the Park Service 
conducted a more thorough evaluation and proposed that in fact 
the bridge's scenic and recreational impacts would be impaired, 
so it concluded that this massive $700 million bridge could not 
be built under the Wild and Scenic Rivers Act. I would like you 
to talk about the history of how the Park Service comes to 
these conclusions.
    But more importantly, I am concerned about a piece of 
legislation that has been put forward and has been put forward 
by my colleague Congresswoman Bachmann, and it seeks to reverse 
the decision of the Park Service last October on the proposed 
bridge. Now, she claims that her bill is not an exemption for 
the bridge under the Wild and Scenic Rivers Act but I am going 
to read from the legislation. ``Construction of a four-lane 
highway bridge over the lower St. Croix River in accordance 
with section 7 evaluated by the National Park Service October 
2005 is hereby deemed to be consistent with the Wild and Scenic 
Rivers Act.'' Now, it seems to me that this is Congress telling 
the Park Service that it needs to create an exemption, and I am 
quoting from the legislation, ``hereby deemed to be 
consistent.'' Can Congress deem things to be consistent and 
then say it is not an exemption? I want to be really clear. A 
bridge does need to be built there. Stillwater does need 
relief, and there is a way we can do one with scope and scale 
and save the taxpayers a lot of money and be prudent and 
efficient with what we are doing on the 94 corridor, which also 
crosses this river. So can you tell me, this has got to be 
happening in other spots than just Minnesota, but I am really 
familiar with Minnesota here. Is this Congress telling the Park 
Service what it should do?
    Mr. Jarvis. Well, these are all great questions and I know 
this issue quite well, and----
    Ms. McCollum. That is why I said Voyageurs is done. We are 
moving on. I have been through Voyageurs and the boundary 
waters. I know you guys tackled the problem.
    Mr. Jarvis. Yes, we are not afraid of tough issues. And by 
the way, there is a request for land acquisition in Voyageurs 
in 2012 for $1.5 million, so we are on track to do some good 
acquisition there.
    In terms of the Stillwater bridge, that particular area of 
the Wild and Scenic River, is an undeveloped section of the 
shoreline and the Park Service has its responsibilities there 
under the Wild and Scenic Rivers Act. In the first proposal for 
that bridge in the 1990s, the professional staff of the 
organization determined that it would have a significant impact 
on the outstanding, remarkable values of the Wild and Scenic 
River for which it was set aside by Congress.
    In 2005, a draft resolution, draft opinion, was built on 
some work around mitigation. There were a variety of design 
proposals, but a lot of it was offsite kinds of mitigation 
about what would be done. When challenged by the court, and 
that ruling was determined to be arbitrary and capricious, as I 
came on as Director and this issue was boiling up, we did a 
thorough review of the past opinions and the past analyses as 
well as the court's ruling and determined that from a legal 
standpoint, you really cannot mitigate a direct adverse impact 
on the river with offsite mitigation. That is just not legal 
according to the Wild and Scenic Rivers Act. And so this was an 
important precedential issue for the National Park Service and 
our management of Wild and Scenic Rivers. We really had no 
choice because frankly, Congress had never given us that kind 
of authority to say you can mitigate this kind of impact on a 
Wild and Scenic River.
    So that is where we are. We have a very strong legal 
opinion on this. So then, if there is to be a bridge built, it 
will require some sort of legislative action on the part of 
Congress. I cannot speak in any detail as to Congresswoman 
Bachmann's bill because we have not evaluated it, nor developed 
an official position at this point.
    Ms. McCollum. It is eight lines. It probably will not take 
too long. I just want to stress again to the Park Service that 
Stillwater deserves to have the bridge replaced, but there is a 
way to do it, and I know, Mr. Chair, that this is not the 
Transportation Committee, but this decision could be impactful 
to rivers all across this country and other rulings of the Park 
Service, so I do not think it is one that this committee or the 
Policy Committee can take lightly.
    Mr. Chair, just also for the record, a four-lane, $700 
million bridge which does not have a weigh station at the end 
of it, how are we going to pay for it?
    Mr. Simpson. I do not know, but I did notice that Congress 
did waive pretty much all the environmental laws and everything 
else to build the Woodrow Wilson Bridge. We just said that we 
complied.
    Mr. Serrano.

                             NATIONAL MALL

    Mr. Serrano. Thank you, Mr. Chairman. I am sorry my ranking 
member left because I usually do not disagree with him in 
public, and I was going to do that very diplomatically. It is 
not that our generation wants to honor everybody, it is that 
our generation has been very much involved in dealing with past 
injustices where a lot of people were not honored that should 
have been honored and so basically my generation just reminds 
people that there were women in our history that played a great 
role, that there were Native Americans, that there were African 
Americans, that there were Hispanics, that there were 
territories, and that is what that was about. It gets crowded 
but it is a national symbol.

                              TERRITORIES

    Speaking about territories, yesterday I left our hearing 
before I could show a little dismay at the fact that Secretary 
Salazar makes a very common mistake, which I noticed you did 
not make, and I congratulate you for it, that is, that they 
always refer to the 50 states. Well, there are 50 states and 
there are territories, and you well know that the parks 
department plays a major role, a major role, perhaps more than 
a lot of other agencies because what you do with the 
rainforests in Puerto Rico and what you do with all the other 
parks is very noticeable and very much seen by tourists and 
very much a part of what stands out when you speak about the 
territories. So I congratulate you on that.

                    SAVE AMERICA'S TREASURES GRANTS

    On a personal note, you know, every so often I talk in 
subcommittee and in committee about the fact that the Bronx has 
a river, and a lot of people say ``what?'' and I say, yes, we 
have a river. We also have Poe Cottage, where Edgar Allan Poe 
did a lot of writing at the end of his life, and it stands 
there because the Save America's Treasures has been involved in 
maintaining it and helping us, and because of what we did when 
we partnered our office with you folks. It inspired the city 
and the state to chip in and now they are opening up a visitors 
center and it is totally revived. The kids in the neighborhood 
had no clue that this person that they spoke about all the time 
wrote those eerie things right on the Grand Concourse. 
Ironically, and this is just a personal side note, he moved 
there because his wife was ill and he wanted her to breathe 
fresh air.
    Ms. McCollum. And he moved to New York.
    Mr. Serrano. Well, because at that point at Poe Cottage, 
you could see Long Island.
    Mr. Simpson. That was a long time ago.
    Mr. Serrano. In the 1800s, you know, and now at the expense 
of getting in trouble with my fellow New Yorkers, you would 
maybe move your wife out of New York to some other district.
    But I know these are tough times, and you face a larger 
challenge, a stronger challenge than anybody else, I think, 
because when we begin to maybe come around to negotiate on 
these dramatic budget cuts, we probably will be able to make 
good arguments about some things that we all believe should not 
be cut as drastically as initially proposed. Unfortunately, 
parks may not fall in that category, and it is not just at the 
federal level, it is at the local level too.
    My son, like us, lost his majority so he is no longer 
chairman of the parks committee in the New York State Senate, 
but he is the ranking member of the parks committee, and it is 
a constant battle to get the governor and the legislature to 
understand that the parks are important to New York, the state 
parks, the city parks, the federal parks, the national parks.

                          GOVERNMENT SHUTDOWN

    We will do the best we can to make sure that we give you 
the resources so that at least in these very difficult times 
you can survive and keep these treasures going for us.
    I am reminded, unfortunately, of something that happened 
during the last government shutdown. If you recall, Mr. 
Chairman, it would not be a shutdown like if we have one this 
time where we haven't passed a bill. We had actually passed 
some bills, appropriations bills, so some agencies were open, 
others were not, and the number one complaint was that there 
were parks that were not open and people came to Washington to 
see the mall, to see the monuments, you know, things they take 
for granted. They would come to our offices and say it is 
closed. I would say yes, we know, and we are trying to get it 
reopened. So this is a very serious situation.
    But let me ask you a question, and I am sure it has been 
asked before. How much of a cut can you take and still maintain 
our parks and our facilities to the point where we will not 
destroy them? And I do not expect you to give us numbers 
perhaps but just, we all have to be ready to cut. I mean, we 
took a cut in our staff allocations. We are going to have to 
cut in many other areas in how we operate Congress. But at what 
point does it become a problem? And I am not asking you to do 
what all agencies do except one. All agencies come and say we 
want more money. Incidentally, there is only one agency in the 
history of Congress that actually said they needed less money, 
and that was before my subcommittee and that was the Securities 
and Exchange Commission, because they did not want to oversee 
anybody so they just did not want money, and we know about that 
story. At what point does it become a big problem?

                  NATIONAL PARKS IN NEW YORK CITY AREA

    Mr. Jarvis. Well, thank you, Congressman, for those 
questions and let me just say about New York, New York has an 
extraordinary array of national park units in and around New 
York City and it is an area of strong emphasis for us. There 
are 11 parks there. We own 23,000 acres within the city of New 
York, most of it at Jamaica Bay and Floyd Bennett Field, the 
Statue of Liberty and other places. We also have partnerships 
such as with Edgar Allan Poe Cottage and Lower East Side 
Tenement House and others where we work together with the city. 
So we are bringing those together to raise their prominence in 
the communities as well as all of our other programs where we 
assist with community conservation and historic preservation. 
This is a strong emphasis of mine and the Secretary's as well. 
We have a meeting coming up with the mayor to talk about these 
things.

                            PARK OPERATIONS

    In terms of cuts to the Park Service and where they begin 
to have an impact, the majority of our budget is operational. 
That is the operational figure, ONPS. It is $2.3 billion out of 
$2.9 billion. So any significant reduction has a direct effect 
on park operations. Now, small parks, you know, the small units 
that might have 10 to 15 employees and a historic home or a 
visitor center have limited abilities to absorb any type of 
significant cut and stay fully operational, to keep open seven 
days a week and meet the expectations of the American public. 
You really wind up reducing services. You begin to close during 
low-visitation seasons or midweek, etc. when you reduce the 
operational budget. Some of the larger parks have perhaps a 
little more discretion to shift things around, but you are 
moving money from one operation, such as maintenance or repair/
rehab, to keep the doors open.
    You know, one of the great things about the National Park 
Service is, we are very proud to provide these places to the 
public. It hurts our pride to not be able to open to the 
American public and to protect these places, these 
extraordinary resources that have been given to us one at a 
time by either the President or the U.S. Congress, and so we 
will do just about anything to try to keep them operational--
volunteers, docents, friends' groups, cooperating associations 
and others. But as the budget is reduced, absolutely it will 
have some effects on those kinds of operations, because that is 
the bulk of our budget.

                            TROPICAL FORESTS

    Mr. Serrano. On the issue of the territories, we have a 
rainforest in Puerto Rico, right? Where else do we have a 
rainforest that is a national----
    Mr. Jarvis. Well, the U.S. Virgin Islands, which is a 
territory as well. I was just there. And then in the Pacific I 
also have responsibilities in the territories of Guam, Saipan, 
America Samoa, and then we have freely associated states in 
Palau and Micronesia where we assist with conservation work. We 
have tropical forests in Puerto Rico as well as the Virgin 
Islands.
    Mr. Serrano. Did you say one in Hawaii?
    Mr. Jarvis. Yes, absolutely in Hawaii.

                              TERRITORIES

    Mr. Serrano. Okay. One last point. You know, a couple of 
years ago, Mr. Chairman, in a bipartisan fashion we inserted at 
my request language which allowed the territories to be 
included in the 50 states quarters program. When that program 
ended, we added D.C. and Puerto Rico and the Virgin Islands and 
it just ended. Because we did that, it was a no-brainer that 
the next set of quarters which are coming out which are the 
national park set of quarters will include the territories. It 
is too bad that that wasn't a medal in a way that could be sold 
on behalf of the parks department because it is going to be a 
huge success having collectors, and the beauty of this is, 
people buy them just like the stamps.
    So I just hope that as these cuts come down that you become 
more innovative in servicing our parks and that you continue to 
be aware of the parks that are in the territories that are very 
much a part of who we are as a country, and I thank you for 
your service.
    Mr. Jarvis. Thank you. The territories are eligible for the 
state side of land and water conservation funds so they will be 
a part of that program.
    Mr. Serrano. All right. Thank you.

                     FORD'S THEATRE-PETERSON HOUSE

    Mr. Simpson. I will ask you about becoming more innovative 
in just a minute but let me ask you first, I have always been 
and still am a big supporter of historic preservation. Peterson 
House, where are we with that? And I have also had a Member of 
Congress come to me, and we were voting on the Floor, and now I 
can't remember who it was, but we talked about, I think it was 
the Surratt Boardinghouse, Mary Surratt, where part of the plan 
to assassinate Lincoln was----
    Ms. McCollum. The Peterson House.
    Mr. Simpson. The Peterson House is where Lincoln died. 
Surratt Boardinghouse is where the plan was kind of hatched. We 
talked about the potential of buying that and adding that to 
the Park Service. Have you heard anything about that? Okay. 
What about the Peterson House? Where are we on that?
    Ms. O'Dell. The construction for Peterson House is moving 
forward as planned. We are working cooperatively with Ford's 
Theater Society on construction. They are building it with the 
eventual push through of the wall so that we can have a 
connection between the two facilities. It is moving ahead as 
planned, sir.
    Mr. Jarvis. And Bruce indicated that it would be complete 
by June of this year.

                              PARTNERSHIPS

    Mr. Simpson. By June of this year? Good.
    About being more innovative. When the national parks 
started, they were sponsored by industries or companies. 
Yellowstone was the Union Pacific's national park, not 
literally but all of their advertisements were to take visitors 
to Yellowstone National Park. Have we thought of a way to try 
to involve the private sector more in sponsoring our national 
parks and supporting our national parks? Is there a way to do 
that where they could actually be the primary sorts of sponsors 
and they could use it in their advertising? You know, they 
would be licensed to do that sort of thing? Have we thought 
outside the box in this period of reduced funding? I think we 
have to look at new things to do things.
    Mr. Jarvis. Mr. Chairman, absolutely, and I appreciate that 
question very much because I think we are becoming a much more 
entrepreneurial organization than we ever were even in the 
early days when, as you indicated, there were great sponsors. I 
think the Burns film talked a lot about that, and you know, 
Steven Mather, the first director, was very much of a 
businessman and very entrepreneurial. He had to build it from 
scratch. And I think in these economic times, we have to be 
that way.
    We have done some extraordinarily innovative projects with 
the private sector in the last 10 years. One that comes to mind 
is the Argonaut Hotel in San Francisco, which is a long-term 
lease of a historic building to Kimpton Hotels, a boutique 
hotel that took a historic structure of ours, turned it into a 
hotel and via the funding that they create through their 
program, they help fund our visitor center, which is on the 
first floor right off the lobby. You know, that would not have 
been thought of years ago, but we are now experimenting with 
those kinds of historic leases and partnerships. The National 
Park Foundation, which is our legislatively created partner, I 
think is really on a good path right now to develop these kinds 
of partnerships with the private sector.
    It is always a balance that the private business would like 
to rename the Washington Monument in their honor or something 
and we just say, well, you can't do that. But you can do this 
instead. I think there are always negotiations for what the 
private sector would like to achieve. We have some great 
corporate sponsors out there that we are currently in 
discussions with.
    I was actively involved with the redevelopment of the 
visitor center at the USS Arizona at Pearl Harbor, and we had 
significant contributions from the private sector and it 
resulted in a great way to recognize them in such a manner that 
their contributions were not confused with those that 
contributed their lives in the attack on Pearl Harbor. Keeping 
that kind of appropriate recognition and balance is a core 
responsibility of the National Park Service, but I think that 
the brand of the NPS is a very, very powerful brand, and we 
want to both protect it, but also find partners with common 
values.
    Mr. Simpson. I thank you.
    Any other questions, Mr. Serrano?
    Mr. Serrano. Just a quick comment, and I am glad you 
mentioned it the way you did. I was going to ask you what 
possibilities there were of corporate America getting involved, 
but it has to be done so carefully, because in New York for a 
while, the New York Mets stadium, it was going to be the 
Robinson-Clemente Stadium, after Jackie Robinson and Roberto 
Clemente, who were pioneers for their respective communities, 
and it ended up being Citi Field. That is fine. The Yankees for 
all of their bad reputation as big corporate giants refused to 
advertise other than Yankee Stadium.
    So yes, we have this need but we have to be so careful. I 
would hate to see the Goya Foods of Puerto Rico Rainforest or 
the----
    Mr. Jarvis. You won't see that.
    Mr. Serrano. I just got in deep trouble with Goya Foods. 
They make great food, by the way.
    Mr. Simpson. Well, you are absolutely right. It is a 
balance. I do not want to see Union Pacific Yellowstone 
National Park, but is there a way that you could use a 
corporate sponsor that could use what you are trying to 
protect, the National Park Service symbol, as ``We are sponsors 
of Yellowstone'' in their advertising? It is a careful line you 
have to walk.
    Mr. Jarvis. It is a careful line, right.
    Ms. McCollum. I worked in the private sector long ago, and 
Sears did that with Weather Beater paint when they were 
restoring some of the early founders' homes, and it was not 
that Sears owned the home, it was the proud supplier, the proud 
sponsor. So there are models out there.

                           ENERGY EFFICIENCY

    Energy efficiency--I know that there are some great things 
that have happened down in the Grand Canyon, I have never been 
to the Grand Canyon. I have heard that there are some great 
energy efficiency and solar things that are going on which not 
only reduce your energy costs but also gives a chance to kind 
of talk about America's ingenuity to international visitors and 
to today's children. Just a quick comment. Are you in this 
budget able to continue with those innovations?
    Mr. Jarvis. Yes, absolutely. We just developed what we call 
our Green Parks Plan, which is all about sustainability: the 
use of alternative energy and biofuels, reduced lighting and 
night sky, electric vehicles, and a wide range and use of 
solar. We just succeeded within this last week of accomplishing 
net metering agreements with major energy producers in southern 
California which will allow us to have relatively large solar 
arrays inside parks. You know, you are not going to put a big 
solar array in Yosemite Valley without having a visual impact, 
but there are places that you can, and right now Joshua Tree 
National Park is producing over 65 percent of its power with 
solar. We have Death Valley that has one of the largest solar 
arrays as well. So absolutely, and there are efficiencies.
    Recently, talking about working with corporations, Musco 
Lighting, they predominantly light stadiums, their president is 
a good friend of the National Park Service and he has been 
helping us relamp parks. Big Bend National Park, they came in 
with his team. We relit the entire developed area, reduced 
annual electric costs by $60,000 and completely preserved the 
night sky. At the same time we still safe lighting, so by going 
from a 60-watt incandescent to a quarter-watt LED bulb we still 
achieved the same objectives. We are doing a lot of that around 
the country.
    Mr. Simpson. Anything else?
    Mr. Serrano. No, that is it.
    Mr. Simpson. Well, listen, countries that have monarchies 
have the crown jewels, like England or other countries. You 
truly are the overseers of America's crown jewels, so we 
appreciate the work you do and look forward to working with 
you. We will try to do our part to make sure that you can do 
your job.
    Mr. Jarvis. Thank you very much.
    Mr. Simpson. Thank you.

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                                          Thursday, March 10, 2011.

                BUREAU OF LAND MANAGEMENT FY 2012 BUDGET

                               WITNESSES

ROBERT ABBEY, DIRECTOR, BUREAU OF LAND MANAGEMENT
KAREN MOURITSEN, BUDGET OFFICER, BUREAU OF LAND MANAGEMENT

                  Opening Remarks of Chairman Simpson

    Mr. Simpson. The committee will come to order.
    Mr. Abbey, I would like to welcome you to today's 
subcommittee hearing addressing the fiscal year 2012 budget 
priorities for the Bureau of Land Management. My colleagues and 
I hope to cover a lot of ground with you today on the new Wild 
Lands policy, grazing, wild horses and burros, energy and other 
issues. While I do not necessarily agree with all of BLM's 
priorities in this budget, I appreciate the fact that we can 
have a productive conversation about these issues.
    I would like to begin by making several points on a few 
specific issues before we receive your testimony. First, as we 
have discussed, Western members including myself are very 
concerned with the new Wild Lands policy. I believe this is a 
troubling precedent, and as I told Secretary Salazar earlier 
this week, any bill that comes out of this subcommittee this 
year will most likely include language to defund the Wild Lands 
policy, whether it is included in the base bill or an amendment 
that is offered in the House.
    Secondly, it seems that this budget chooses the full 
funding of land acquisition and America's Great Outdoors at the 
expense of other important programs like the operating account, 
Management of Lands and Resources, which actually supports 
private sector jobs in grazing, forestry, mining, and oil and 
gas development. As you know, I support the Land and Water 
Conservation Fund but it does not make sense to me that we 
would fully fund land acquisition by diverting money from land 
management accounts. With our current budget crisis, I find it 
puzzling that the BLM requests $50 million for land acquisition 
and $1 billion for America's Great Outdoors when it has 
difficulty managing the lands it already holds and has 
significant problems with many of its current programs.
    I am deeply concerned about this proposal, that this 
proposal will exacerbate an already out-of-control problem 
facing the BLM, and that is the increasing costs of litigation. 
When you shift resources from land management to acquisitions 
you are unable to provide the land managers in your field 
offices with the resources they need to make environmentally 
sound decisions, leaving the door wide open to environmental 
groups looking for an opportunity to sue. I have said this 
before and it bears repeating, that there are certain things in 
life that are unavoidable. One is death, one is taxes and the 
other is the fact that the BLM will be sued on any decision 
that it makes.
    It does not take an expert accountant to figure out that a 
large amount of your budget is spent fighting lawsuits in court 
or attempting to bulletproof your decisions against an 
inevitable lawsuit. These dollars represent a tremendous amount 
of taxpayer funding that is being shifted away from on-the-
ground management and spent instead in courtrooms. This is a 
bad deal for the public lands, a bad deal for your agency and a 
bad deal for the taxpayers. Even more troubling is the net 
result, that our public lands are increasingly managed by 
judges while your professional staff and their judgments are 
being undermined. I know you recognize this problem as do your 
employees, who are on the front lines of this battle every day 
in Idaho and other Western states, yet I am very concerned that 
this budget fails to adequately put resources on the ground to 
address this situation.
    On that note, I am also very concerned that the BLM in 
Idaho will not be able to hire the seasonal workers needed for 
grazing and recreation management. Many of the ranchers in my 
district have been told they will not be able to turn out their 
livestock until late June. This has a significant impact on the 
bottom line of the ranching operations and could mean the 
difference between finishing the year in the red or in the 
black. These basic important responsibilities of BLM need to be 
met before it considers other program increases. Mr. Abbey, I 
hope to work with you on this issue to solve this problem.
    The hardrock mining proposal in the budget is also 
problematic although I believe revising the General Mining Law 
of 1872 is long overdue. This should be carefully reviewed by 
the authorizing committees similar to the oil and gas 
legislative proposals. The budget would basically raise taxes 
on hardrock mining and use the proceeds to fund land 
acquisition.
    I also want to briefly mention the potential merging of the 
BLM forestry and range staff in an effort to improve 
efficiencies. This seems like a solution in search of a 
problem. Forestry and range programs have different authorizing 
statutes and different staff and expertise. Both programs are 
very important to the day-to-day operations of the BLM. I hope 
that you will reconsider merging these two programs.
    In closing, I look forward to working with you on many of 
these issues and thank you and your staff for the hard work and 
assistance that we have had in putting together this budget.
    Mr. Simpson. With that, I am happy to yield to the 
gentleman from Virginia, Mr. Moran, for any opening statement 
he might have.

                  Opening Remarks of Congressman Moran

    Mr. Moran. Good morning, and thank you, Chairman Simpson.
    Mr. Simpson. Good morning.
    Mr. Moran. Welcome, Mr. Abbey.
    Mr. Abbey. Nice to see you.
    Mr. Moran. BLM is the largest manager of federal lands. 
Even though most of these lands are in the West, all Americans 
should appreciate the special places and habitats that are such 
an important part of our Nation's great heritage of public 
lands, the National Landscape Conservation System (NLCS), 
especially. It includes 27 million of the most special acres 
under BLM jurisdiction.
    I do have concern for the wild horses and burros which 
primarily live on BLM-managed lands in the arid West. I am 
encouraged by new announcements which we can talk about today. 
The wild horse program I do think needs to change.
    BLM also manages vitally important watersheds and habitat 
as well as fossil energy resources that are important for our 
citizens but also for our economy. At our GAO hearing last 
week, we had real concerns about BLM's ability to balance its 
energy development mission and its environmental stewardship 
mission. We do not want to develop the publicly owned fossil 
energy at the expense of our native lands and species. We need 
to ensure long-term sustainability. Too much of the fossil 
energy development has permanently and adversely impacted vast 
areas of public lands. I am encouraged by the direction in this 
BLM budget request. It is about time that the Congress 
instituted reasonable fees to help cover the cost of oversight 
of extraction industries. As the GAO and the IG pointed out, 
there is a great need for better oversight and for enhanced 
financial management of the many billions of dollars worth of 
fossil energy taken out of the public estate.
    I am also concerned that in our understandable haste to 
increase reliance on wind, solar and geothermal energy, we 
might be choosing in some cases expedient courses that we could 
later regret. We do owe it to future generations to get it 
right.
    I look forward to a constructive hearing, Mr. Chairman, and 
thank you for holding it.
    Mr. Simpson. Mr. Abbey, we look forward to your testimony. 
The floor is yours.

                         Testimony of Mr. Abbey

    Mr. Abbey. Well, thank you, Chairman Simpson and members of 
the committee, and with me this morning is Karen Mouritsen, our 
budget officer from the Bureau of Land Management, and we both 
appreciate the opportunity to appear before you to talk about 
the President's fiscal year 2012 budget request for the Bureau 
of Land Management.
    As many of you know from the Western United States, the BLM 
manages more than 245 million acres of public lands, and 
approximately 700 million acres of subsurface mineral estate 
nationwide. We believe the funding requested is a sound 
investment for America. Management of public land resources and 
protection of public land values results in extraordinary 
economic benefits to local communities and to this Nation. The 
BLM's management of public lands contributes more than $100 
billion annually to the national economy and supports more than 
500,000 American jobs. Revenues generated from public lands 
make the BLM one of the top revenue-generating federal agencies 
positively affecting the U.S. Treasury and directly benefiting 
the U.S. taxpayer. For example, if our budget request was fully 
funded, for every dollar that the United States Congress 
invests in the Bureau of Land Management, we anticipate 
bringing back $5 in fiscal year 2012.
    The BLM's fiscal year budget request is $1.1 billion, a 
decrease of $12 million from the 2010 enacted level. The 
proposed budget for the BLM makes strategic investments in 
support of important Administration and Secretarial initiatives 
including America's Great Outdoors, the New Energy Frontier, 
Cooperative Landscape Conservation, and Youth in America's 
Great Outdoors. Investment in these programs today will reap 
benefits for years to come.
    To enhance the conservation of BLM-managed lands and 
reconnect Americans to the outdoors, the budget calls for a 
$29.9 million increase in support of the America's Great 
Outdoors initiative. This includes $15 million for the BLM's 
27-million-acre National Landscape Conservation System, which 
includes special areas such as wild and scenic rivers, 
wilderness, national monuments and national conservation areas. 
The budget also includes $8.6 million to support programs and 
partnerships that engage youth in the outdoors.
    The New Energy Frontier initiative recognizes the value of 
the environmentally sound, scientifically grounded development 
of both renewable and conventional energy resources on public 
land. President Obama and Secretary Salazar have stressed the 
critical importance of renewable energy to the future of the 
United States. Developing renewable energy creates jobs and 
promotes innovation in the United States while reducing the 
country's reliance on fossil fuels. To encourage development on 
public lands, the BLM proposes a $3 million increase for 
renewable energy environmental studies.
    In the conventional energy arena, the BLM expects its 
onshore mineral leasing activities to contribute $4.3 billion 
to the Treasury in fiscal year 2012. We will focus on 
implementing our oil and gas program reforms that have placed a 
continued emphasis on oil and gas inspections, environmental 
enforcement and production verification. The budget proposes an 
increase of $13 million for processing oil and gas applications 
for permits to drill. Also, the budget proposes to shift a 
share of the cost of oil and gas inspection activities from 
discretionary appropriations to industry fees for a savings of 
$38 million. A fee for non-producing leases and an increase in 
the onshore oil and gas royalty rates are also included in our 
budget proposal.
    Another BLM priority in our fiscal year 2012 budget request 
is the Secretary's Cooperative Landscape Conservation 
initiative, which calls for bringing better science to the 
management of BLM-managed lands and includes a $2.5 million 
increase. Also, putting the BLM's wild horse and burro program 
on a sustainable track while ensuring humane treatment is a top 
priority, and I look forward to discussing that particular 
program with you. The BLM budget proposes $75 million for this 
program in fiscal year 2012 and places much greater emphasis on 
fertility control. Finally, the BLM's budget for fiscal year 
2012 assumes legislative proposals to reform hardrock mining on 
both public and private lands.
    Our budget request provides funding for the agency's 
highest-priority initiatives, maximizes public benefits and 
reflects difficult choices for reductions.
    Mr. Chairman, as always, we appreciate the opportunity to 
appear before your committee to talk about the public lands and 
the programs that we manage on behalf of the American public.
    [The statement of Robert Abbey follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Simpson. Thank you. Because other members have some 
committees, I am going to pass right now and allow Mr. Flake to 
take my time.

                       SHIFTING INSPECTION COSTS

    Mr. Flake. Thank you, and thank you for the testimony.
    I have a question with regard to shifting some of the 
energy and mineral inspection costs. You say you have a 
reduction in budget by 1 percent but you have an increase in 
spending on select programs by $93.3 million, and that is 
achieved by shifting $42.4 million in inspection costs to the 
industry. Can you just explain a little more about where those 
shifts are and how they are picking up the slack there?
    Mr. Abbey. Thank you for the question, Congressman Flake. 
We had to make some difficult decisions relative to how we 
could reduce costs. One of the decisions that we did make as 
part of our budget request was to shift the inspection and 
enforcement expenditures to the industry that we were 
inspecting. In the case of the oil and gas industry, that 
reflects almost $38 million of inspection and enforcement (I&E) 
costs from the appropriations to the industry. We also are 
seeking I&E fees from the coal industry for the inspection and 
enforcement that we do on coal mines.

                            RENEWABLE ENERGY

    Mr. Flake. With solar power, Arizona is moving ahead with 
siting a lot of facilities on some BLM-managed land or seeking 
to. I am not a fan of some of the subsidies provided here, but 
we do not want unnecessary delays with regard to BLM. You say 
that you have a streamlined procedure now. Can you tell a 
little more about that? There are some complaints that the 
process is too long and putting it on BLM-managed land is far 
more troublesome than elsewhere.
    Mr. Abbey. Well, again, last year we used the term ``fast 
track'', and as a result of that, I think there was a 
misunderstanding of exactly what ``fast track'' meant. That is 
not to shortcut the analysis process. You know, we were 
fortunate to move forward last year to approve the first 
commercial-scale solar project on public lands ever. At the end 
of calendar year 2010, we had approved nine commercial scale 
solar projects that will be built on public lands. As we go 
forward, we are selecting the applications that are before us. 
We have over 100 applications for solar projects on public 
lands. We have screened those applications to determine which 
ones we believe would have the least impact on sensitive 
resources that we manage on these public lands so that we could 
move forward more expeditiously to review and analyze the 
project proposals to make a determination of which of those 
projects should be approved to be built on these lands.
    Mr. Flake. Thank you, and the name is Flake.
    Mr. Abbey. I am sorry, Congressman.
    Mr. Flake. No, I realize nobody wants to call you a flake 
unless they are really sure that is the case.
    Mr. Simpson. But you give us so much flack.
    Mr. Moran. I was going to say, if you give the witnesses a 
little less flack, maybe they would not confuse the 
pronunciation.
    Mr. Flake. Thank you, Mr. Chairman.
    Mr. Simpson. Mr. Moran.
    Mr. Moran. Thank you, Mr. Chairman.

                            IMPACT OF H.R. 1

    Besides the oil, gas and grazing responsibility, you have 
tremendous visitation and recreational activities that are a 
mainstay of local economies, particularly in rural areas, 
especially in the West. Given the substantial operational 
funding cuts that are in H.R. 1, the ongoing Continuing 
Resolution, can you give us a sense of how this might affect 
the hundreds of gateway communities all over the country that 
depend on tourism, hunting, fishing on public lands? Is there 
going to be any impact on rural jobs and in local 
jurisdictions' ability to collect the revenue that they have 
become used to?
    Mr. Abbey. Well, that is an excellent question, Congressman 
Moran, and the impact as I determined from my review of the 
proposal would reflect primarily in construction projects and 
land acquisition projects. It would also reduce substantially 
the monies that we had anticipated for climate change projects 
including some of the ecoregional assessments that are underway 
today. Without that funding, we would have to shortcut that 
analysis and not do any more work relative to those ecoregional 
assessments which we believe provide us some valuable data that 
would allow us to move forward and do the appropriate analysis 
for some of the renewable projects and even conventional energy 
projects that are before us. So those would be where the 
primary impacts would occur.
    But you did raise the fact of the amount of recreational 
use that is taking place on these public lands, and we had 59 
million visitors to public lands last year. That is fairly 
significant to those local communities that are adjacent to 
these public lands where people are visiting. We provide 
tremendous opportunities, not only for such activities as 
hiking and horseback riding and bird watching but also for 
hunting and fishing, which are very important to the 
constituencies in the West and to those who live throughout the 
United States who go out West to do that activity.

                    WILD HORSE AND BURRO MANAGEMENT

    Mr. Moran. Thank you. Mr. Abbey, we have already mentioned 
how difficult the wild horse issue is, and I appreciate your 
effort to make changes. I know that BLM has announced a new 
approach, but with more than 40,000 horses in long-term holding 
facilities at a cost of $37 million a year and growing, we 
cannot afford to wait much longer to make some fundamental 
changes, it would seem. The Federal Government's management of 
wild horses and burros should be based upon sound science, 
transparency and I would hope the input of all stakeholders. 
Can you briefly elaborate on what specific steps the BLM will 
be undertaking to achieve increased transparency and openness 
in this program?
    Mr. Abbey. I would be happy to. You know, first and 
foremost, I believe the status quo is unacceptable as it 
relates to our wild horse and burro management. If we are to 
have any chance of reducing the expenditures related to this 
particular program, we are going to have to learn to do a 
better job of managing horses on the range versus rounding them 
up on an annual basis, gathering them and then shipping them to 
holding facilities for the rest of their lives. That is a great 
deal of the expense. It is a high percentage of our total cost 
of managing wild horses, going as far as holding and feeding 
horses for up to 30 years in some cases.
    So the changes that we are pursuing in concert with the 
public and many of the stakeholders that have provided input to 
our program is that we are moving toward a program to achieve 
greater fertility control of wild horses that are remaining on 
the public lands. To that end, our proposed action would 
increase the fertility control of mares on the public lands 
from approximately 800 this year to 2,000 next year. We believe 
fertility control is the primary tool that we should be using 
to control populations. In the meantime, we do have challenges 
that we face in that particular program. It is one of the more 
controversial programs that we manage in the Bureau of Land 
Management, and that is saying a lot given the controversial 
nature of our programs. There is a lot of passion, there is a 
lot of emotion attached to those wild horses, and rightly so. 
They are icons of our Nation's heritage.
    So again, we have contracted with the National Academy of 
Sciences. They are conducting a two-year study to report back 
to us in 2013 with their findings to help us better understand 
how we could better use science to help manage wild horses and 
burros on the range, how we can better control populations on 
the range so that in the future we have less need to actually 
remove horses from the range and to hold them in these long-
term holding facilities.
    Mr. Moran. With regard to transparency, can the public 
observe roundups where they are done by BLM or contractors from 
a reasonable range?
    Mr. Abbey. Well, we certainly hope so. We certainly make 
that opportunity available to the people who wish to come and 
observe our gathers. We have had some criticism in some of our 
gathers relative to the locations of those public viewing 
areas. We have taken that criticism to heart. We are continuing 
to work with our contractors as well as our own personnel to 
make sure that we provide ample opportunity and appropriate 
opportunities for the public who wish to observe, to have a 
platform where they can actually observe all the actions that 
are taking place.
    We do need to take into account, as we always do, the 
safety, not only to the visitors who are out there observing 
the gather themselves but also safety to our contractors and 
our own employees.
    Mr. Moran. When I was chairing the subcommittee last year, 
we included in the bill additional contracting authority to 
give the BLM the opportunity if you chose to enter into 10-year 
agreements with those nonprofits and others to care for wild 
horses. Do you think it would be useful to the BLM to have 
additional options for the care of horses that have had to be 
removed from the range?
    Mr. Abbey. Congressman Moran, we would welcome that 
opportunity. You know, we will be soliciting proposals within 
the next two weeks from individuals who have an interest in 
working with us on proposing options for holding wild horses on 
private lands and also potentially in partnership to hold 
horses on private lands and working with us to hold horses on 
public lands, again, as part of our new strategy of trying to 
devote our financial resources to managing horses on the range 
rather than expending all the monies that we are spending today 
on gathering and removing and then holding horses.

  OIL AND GAS ROYALTY RATE REFORM AND DISCLOSURE OF FRACKING CHEMICALS

    Mr. Moran. Mr. Chairman, I have one further question on 
royalties if I could. This current budget assumes that Interior 
will administratively implement oil and gas royalty rate 
reforms including adjustments to the standard onshore royalty 
rate. At our hearing last week, and I noticed she has joined us 
now so I thought I would bring this up, our distinguished new 
member from Wyoming pointed out that the state receives a 
higher royalty on its lands than the BLM charges and that the 
state requires disclosure of fracking chemical composition, 
even though the BLM does not. Is there any reason the BLM----
    Mrs. Lummis. Excuse me. Even in my state----
    Mr. Moran. I will yield to the gentlelady.
    Mrs. Lummis. And I apologize for interrupting.
    Mr. Moran. No, it is fine.
    Mrs. Lummis. Drilling on BLM lands in Wyoming, they have to 
report to the Wyoming Oil and Gas Conservation Commission just 
like on private lands, so whether it is state, private or BLM 
lands, if a well is drilled in Wyoming and they are going to 
frack it, they have to disclose the contents of the fracking 
fluids to the Wyoming Oil and Gas Conservation Commission.
    Mr. Moran. No, I understand that, and that is consistent 
with what I think I was saying.
    Mrs. Lummis. Excuse me. I yield back. I apologize.
    Mr. Moran. No, that is fine. I am glad you clarified 
because that is exactly the point I wanted to make.
    But I want to ask Mr. Abbey, is there any reason why the 
BLM cannot raise its royalty rates to at least, for example, 
match those of the state? Would there not be a considerable 
benefit to the American taxpayer and to the states since they 
get half of those royalties?
    Mr. Abbey. We firmly believe that the American public 
deserves a fair return to the national Treasury from any 
resource that is developed from public assets. To that end, we 
are currently analyzing the rates that we have assessed over a 
number of years. I mean, the 12\1/2\ percent has been in place 
for several decades. So we are reviewing that analysis. We have 
not only looked at what states are charging as far as royalty 
rates but we have also looked at what other countries are 
charging, in many cases the same companies, for operating in 
their countries. We are pursuing or will be pursuing a 
regulatory change based upon our analysis to reflect a fair 
return to the American public and that will likely include an 
increase in royalty rates that we would assign to development 
of oil and gas resources on public lands.
    Mr. Moran. Very good. Thank you, Mr. Abbey, and thank you, 
Mr. Chairman.

                    WILD HORSE AND BURRO MANAGEMENT

    Mr. Simpson. Thank you.
    I will be interested in watching the wild horse and burro 
program, $75 million proposal, and you said you want to put 
this on a sustainable path. How much do you think you are going 
to be spending on this at an annual rate once you have it on a 
sustainable path?
    Mr. Abbey. Well, over time the monies would come down, but 
initially the $75 million is going to be needed for at least 
the next three or four years and primarily because in order to 
apply fertility control, Mr. Chairman, we still have to gather 
horses. We still have to hold horses in order to apply the 
vaccinations before releasing them back to the range. So again, 
while we would save some funding from our holding costs, that 
savings would initially go back to rounding up horses and 
applying the vaccination.
    Mr. Simpson. As you know, there are private entities that 
have approached the BLM regarding taking upwards of 10,000 
horses onto land that they have leased in Nevada and other 
places, and as I talk to them they say they have met with 
resistance from BLM. I am not saying they are right or anything 
else. Are you looking seriously at these types of proposals 
that are being offered?
    Mr. Abbey. We are, and again, I think those proposals have 
merit. Again, it provides us greater flexibility than what we 
have applied in the past relative to our actions. We have been 
working very closely with one individual, Ms. Madeline Pickens, 
on a proposal that she has introduced to us that would use 
certain lands in the State of Nevada to hold horses. We do not 
believe that the lands that she has identified could hold 
10,000 but nonetheless that is something we will work through.
    But there are some issues that we do need to work on with 
Ms. Pickens and other individuals who have also approached us 
with similar ideas and similar concepts. We have not received a 
detailed, specified plan from Ms. Pickens. We have asked for 
one so that we could do the appropriate analysis to make a 
determination based upon what that analysis reflects. You know, 
I admire Ms. Pickens' passion. I admire her willingness to want 
to work with the Bureau of Land Management to help us find 
solutions to keeping additional horses on these public lands or 
on private lands. We are committed to continuing that dialogue 
and with anyone else who has similar ideas and willingness to 
work with us to try to find solutions to these challenges.

                        GRAZING-JARBIDGE PERMITS

    Mr. Simpson. I have an issue of particular concern to 
Idaho. As you may know, on February 28, 17 grazing permits 
managed by the Jarbidge field office were closed indefinitely 
as a result of a court order by Judge Winmill. In a 2005 
settlement with Western watersheds, BLM had agreed to complete 
a resource management plan and conduct a more robust EIS on the 
allotments by 2011, allowing the permits to be reissued under 
an interim grazing management plan. The sunset date of the 
interim plan coincided with BLM's own deadlines for completing 
this work' yet the deadlines have passed and there is no plan 
in place. As a result, ranchers on those grazing allotments 
have to move thousands of cattle off the range. I am very 
concerned that the delay in completing the resource management 
plan is impairing the stability of activity and transactions 
that implicate public lands. It is now projected that there 
will be at least a three-year delay in completing the RMP, 
which is directly impacting management. I recognize that there 
are a number of excuses for the delay and that most of them 
come down to the lack of resources. What are you doing to 
ensure that field offices like Jarbidge have the resources they 
need to effectively manage the land in a complex and litigious 
environment?
    Mr. Abbey. Well, Mr. Chairman, that is the first time I 
have heard about a three-year delay. I do know that our offices 
in Idaho have been working diligently to complete that resource 
management plan for that particular field office. We have 
completed a draft resource management plan. We have received 
quite a few comments regarding that proposed plan. There are a 
lot of complex issues that have been addressed as part of that 
draft resource management plan including such proposals like 
major wind farms in that part of the state, but we are moving 
forward diligently and expeditiously to complete that resource 
management plan, so again, I have not heard about a three-year 
delay, so if you have that information, I need to probably 
follow up with a phone call.
    Mr. Simpson. Do you have an idea of when it will be 
completed?
    Mr. Abbey. Well, our hope was to get it completed this 
fiscal year.

                         GRAZING-PERMIT BACKLOG

    Mr. Simpson. Grazing in general--as you know, we have a 
backlog of grazing permits and BLM has been trying to address 
that. We put $1 million into the budget two years ago to 
address that backlog of grazing permits, and it seems like 
those in Idaho are the most backlogged. Could you tell how much 
of that $1 million actually went onto the ground to address the 
backlog and the problems that the backlog is causing and how 
you plan to address the backlog of grazing permits? As I said 
in my opening statement, you are going to get sued no matter 
what you do, but ultimately we have got to get these grazing 
permits done.
    Mr. Abbey. You are absolutely right, and permit renewals is 
a high priority for us in our grazing management program. Idaho 
received from the $700,000 increase in the 2010 Appropriations 
Act approximately $105,000 based upon a chart that I have here. 
You know, we not only received an increase due to your being a 
primary proponent for that increase of $700,000 but we also 
redirected $300,000 from our base budget toward permit 
renewals.
    The backlog continues to increase, Mr. Chairman, and we are 
continuing to devote as many resources as possible because, as 
I mentioned earlier, this is a priority for us. We are making 
some progress but we are continuing to be dependent upon the 
general provisions language that you have been successful in 
including in our appropriations bills for the last several 
years so that we can move forward, and where there are no 
changes in the terms and conditions of the permits that will 
allow us to continue to issue those permits without going 
through an elaborate and time-consuming environmental 
assessment or even an EIS.
    Mr. Simpson. I mean, the backlog continues to grow. How do 
we address that and try to get it down to--I mean, because the 
reality is, there are people who want to get all cows off 
public lands and they are going to sue no matter what happens. 
How do we address that in a reasonable way? Instead of just 
putting money into it, is there something that needs to be done 
fundamentally in how we do grazing permits?
    Mr. Abbey. Well, again, I do think there are some aspects 
of our grazing program that we can streamline including 
transfers of grazing permits from one individual to another 
individual instead of having to go through an elaborate 
analysis to approve such transfers. I do think that there could 
be an administrative remedy but we may need some help from 
Congress to pursue that.
    At the same time, grazing is no different from any of the 
other programs that we manage. We have to apply our best 
efforts up front prior to moving forward and making 
authorizations so that we can defend those actions that we know 
are going to be scrutinized and likely litigated, and our hope 
is that, you know, over time that we will continue to have 
greater successes in the courts in being able to defend our 
actions.
    Mr. Simpson. Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chair.

                            OFF-ROAD RACING

    I am going to shift around here and talk about something 
that is pretty different. Director Abbey, on August 14, 2010, 
as you are aware, an accident in off-road racing permitted on 
BLM at the Johnson Valley vehicle open area resulted in eight 
spectator deaths and 12 injuries. This is a senseless and I 
believe a totally needless tragedy. The report on the incident 
issued last November by BLM makes it obvious that BLM is 
incapable of monitoring events such as the California 200 
event, during which the casualties occurred. The BLM report 
states that in the California Desert District, there are 51 law 
enforcement officers responsible for 11 million acres but only 
38 law enforcement officer positions were filled. On the night 
of the race that resulted in the eight fatalities, the incident 
report states, and I am quoting from your incident report, 
``The BLM had one law enforcement officer and no special 
recreation permit compliance staff or any other personnel on 
duty on the Johnson Valley open area. The law enforcement 
officer was on established patrol in this sector covering 
roughly 500,000 acres.'' And I am going to read from page 3 of 
your report: ``Of the CDD LEOs, 10 are assigned to the Barstow 
Field Office, where the California 200 event was held. On 
August 14, 2010, seven of those positions were filled. However, 
one LEO was on medical leave, one was at basic law enforcement 
training, one was on vacation, one was temporarily detailed to 
another BLM office. Of the three available officers, two were 
originally assigned to work the permitted race but one called 
in sick.'' One officer.
    So in other words, BLM turns over thousands or tens of 
thousands of acres of public land, taxpayer-owned land, to a 
private company--in this case called Mojave Desert Racing--
willing to pay a completely insufficient permit price of $95. 
Not only does this organization make a profit to operate off-
road vehicles, but they do it at night and they do it with 
2,000 spectators in attendance without any official oversight 
from BLM on the monitoring, and that is pretty unbelievable.
    Now, I have seen the news videos and I am sure you have and 
other members of the committee have. It shows hundreds of 
spectators standing a few feet away, literally the width of 
this table, from vehicles traveling on a dirt road at 50 to 70 
miles per hour. Seeing that video, I could almost say certainly 
that there was no effort whatsoever to put in public safety, 
and in fact, BLM, executive's summary of the Johnson Valley 
incident states, and I quote from that, ``Public safety is 
always the BLM's highest priority.'' The facts of this incident 
would indicate that to be a false statement. Tragically, the 
facts appear to indicate gross negligence on the part of MDR in 
either the inability or disregard on the part of the Bureau of 
Land Management to ensure public safety.
    So my questions for you are based on what I have been 
reading in the report that has come out. This is a tragedy, and 
it highlighted the BLM's permitting process and lack of 
staffing, and by that, you secede your obligation to protect 
public safety at these events. In light of the fact that the 
BLM obviously does not have the resources, the personnel or the 
permitting process to ensure public safety when racing 
companies seek to use taxpayer-owned land, one of my questions 
is, how can the BLM guarantee that it will be responsible for 
ensuring public safety on federal lands and doing event 
oversight rather than ceding that to event organizers? Why is 
there not a permitting process in place where event organizers 
are sufficiently financially responsible to ensure an 
acceptable level of BLM law enforcement staffing presence to 
monitor permit compliance and public safety? Should that not be 
a financial obligation of the event organizers in seeking 
permits? You addressed some of that in your report, which I 
will refer to here as I close.
    In regard to taxpayer exposure, I would like your office to 
provide me and the committee with an event-by-event breakdown 
of 2010 of how much race organizers paid the BLM in the 
permitted event and what was the benefit to taxpayers of 
allowing companies to use public lands for their events? And I 
hope it is more than just $95.
    So with that, this is from your office. It is the special 
recreation permit. It goes on to say, and I quote again from 
this, ``Proper administration of the SRP requires numerous 
steps and the full engagement of the BLM staff and managers. 
The authorized officer may issue an SRP''--which is a type of 
permit they had--``only after it has been determined that the 
BLM has the capacity to properly administer the permit. If the 
field office cannot fulfill or complete all the necessary 
steps, then no SRP shall be issued,'' and then you go on to 
talk about cost recovery. Can you let us know what steps you 
are taking? Because if you do not have the staff to manage 
this, then we should not be doing it.
    Mr. Abbey. Well, it definitely was a tragedy that occurred 
and it happened on my watch and I take that seriously.
    Ms. McCollum. I know you do, sir.
    Mr. Abbey. And there is nothing wrong with our permitting 
system. There is a capacity issue, and the statement that you 
just read, the paragraph you just read relative to our new 
expectations of our own employees, if we do not have the 
capacity, if we do not have the resources to properly manage 
those events, then those events should not be permitted. That 
is the way that we are conducting business today. It has not 
always been the case. There has been some fear on the part of 
our employees that if they said no to a promoter at one of 
these events that they would be chastised for saying no. But we 
have an obligation to the safety not only of the event 
competitors but also to the spectators who are out there on the 
land observing these events.
    Now, that having been said, nationwide, we average about 
one law enforcement personnel per 1 million acres that we 
manage. We are putting our law enforcement personnel in really 
an awesome, I guess, task or assign them awesome tasks of 
monitoring and patrolling these public lands, and the only way 
that we can be successful is in partnerships with local 
sheriffs departments and with other federal agencies and state 
agencies out there, and we have done a good job of developing 
those partnerships.
    But as it relates to the competitive event that you made 
reference to in Johnson Valley, there were errors made on the 
part of the Bureau of Land Management. We acknowledge those 
errors in our own investigation, in our report and in our 
determination of what the facts are. We have taken actions to 
correct those deficiencies and our hope is that that type of 
event will never occur again through any activity that we 
permit through our recreation program. That is also another 
reason why we have requested some additional funding through 
our recreation program in the 2012 budget request. It is to try 
to help us provide some additional oversight through the hiring 
of additional law enforcement personnel to monitor these type 
of activities but generally speaking just monitoring all 
activities that are occurring on public lands because with one 
law enforcement officer per 1 million acres, we cannot do a 
very good job.
    Ms. McCollum. Thank you, and I think that what we have 
asked the law enforcement to do is very dangerous. They are out 
there alone, single patrol, and I notice that you said that you 
have asked for increased revenue. Part of that increased 
revenue, the balance side of it, what I saw here on the fee 
permit, could you address that a little more.
    I do not want to put you on the spot but I am going to put 
you on the spot. I hear clearly what you are saying about not 
wanting to say no, not wanting to say no because of what the 
chairman was just talking about with the leasing and the 
reputation that, you are environmentally driven and everything 
like that, and environmental issues come up in these kinds of 
races too. But that is not what I am talking about, and if you 
do not have the capacity to make sure that sufficient oversight 
is taking place and there is compliance taking place, then I 
think that you can hold your head up high and come to this 
committee and say this is why we said no, it is public safety, 
and we are not going to fall under political pressure in this 
arena from other groups because that is not what this is about. 
I would be very supportive of you saying no and I think the 
Committee would as well talk a little more about what you are 
going to do, because taxpayers should not be footing the bill 
for for-profit companies on this.
    Mr. Abbey. Well, the----
    Ms. McCollum. Do you need legislation or any help from us 
in order for you to capture those dollars to let these events 
go forward? I am not trying to stop them. They just need to be 
done properly.
    Mr. Abbey. No, I fully understand that, and we do not need 
additional legislative authority to conduct business the way it 
should be conducted. These type of events come under our cost 
recovery process. That means the proponent is supposed to be 
covering the full cost of the Bureau of Land Management 
employees on the ground providing the oversight and management 
of those events. It happens throughout our recreation program. 
The OHV communities have been very good about paying the 
majority of those recovery costs. In this particular case, I 
cannot give you any excuses for why that proponent was not 
assessed the full recovery of what it cost the Bureau of Land 
Management to staff that event appropriately. I am not saying 
even if we had the staff out there on that day, the two, three 
or four employees that should have been there that the event 
would not have happened, but I think it would certainly have 
lessened the risk if we had had the appropriate people there on 
site and doing the necessary patrols to ensure that the 
spectators were not getting within 15 feet of the actual route 
that the race competitors were using.
    So we have gone back, we have looked in great detail at our 
permitting process. We have found there is nothing wrong with 
the permitting system. It is just that we need to implement 
what we say we are going to do.
    Ms. McCollum. Thank you. Mr. Abbey, I stand ready to help 
you but I am also going to hold you accountable.
    Mr. Abbey. You should.
    Ms. McCollum. So if there is help that you need, please ask 
for it.
    Mr. Chair, I am going to go to my fourth niece's wedding. 
My brother was blessed with four daughters. And there will be a 
police officer there at the wedding. They are paying for it, 
not the city.
    Mr. Abbey. Thank you.
    Mr. Simpson. Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman, and thanks for being 
here today, Mr. Abbey. I am of the opinion that the Federal 
Government owns more land than we can afford to manage or that 
we can manage, and so the fact that you are spread very thin 
and your staff is spread very thin is understandable and I 
appreciate the job you are trying to do with the resources you 
have been given, the vast amount that you are trying to juggle 
and all the many demands on that land.

                   APPLICATIONS FOR PERMITS TO DRILL

    I have several questions. I am going to start with APDs. 
Why is that you anticipate a $13 million shortfall in APD 
application fees?
    Mr. Abbey. It was based upon a projection that we will have 
less numbers of applications being filed in our offices and 
therefore we would not be collecting the fees necessary in 
order to continue to keep all the individuals that have been 
part of the oil and gas program fully funded through that fee.
    Mrs. Lummis. And is that because they are moving out of 
frustration to drill on private lands because everything gets 
appealed? I know, and I think I have told you, in Wyoming in 
2009 100 percent of lease applications on public lands were 
contested by environmental groups, 100 percent, every single 
one. You know, after a while people just throw up their hands 
and go to private land.
    Mr. Abbey. Well, again, I cannot speak for what rationale 
the industry may be using to move their resources around. I do 
know that there is still a great deal of demand for developing 
oil and gas on public lands that are managed by the Bureau of 
Land Management. We anticipate upwards of around 5,000-plus 
APDs being filed with the BLM offices this fiscal year. Given 
the price of oil, we anticipate a slight increase actually 
above what we included in our budget request in fiscal year 
2012. We have leased 41.2 million acres of public lands for oil 
and gas. We have about 12.2 million acres under production 
today. Last year we approved almost 5,000 applications for 
permits to drill. We had about 1,500 wells actually spudded on 
public lands. So the industry, again, it is reflective of the 
market. Given today's market, we are starting to see increasing 
actions and interest on the part of the industry and we are 
trying our best to address that demand.
    Mrs. Lummis. Do you know what dollar per barrel oil sparks 
that tipping point between when people are less interested and 
when they are more interested? Is it 100? Is it 80? Any clue?
    Mr. Abbey. I certainly do not know. I do know that when it 
gets to be $100 a barrel, it gets people's interest whether it 
is the industry or the American public paying high gasoline 
prices.

                      FEE ON NON-PRODUCING LEASES

    Mrs. Lummis. That leads into my next question, which is 
about the fees that I understand you are going to be charging 
or propose to charge for non-active leases as an incentive to 
surrender the lease so someone else can pick it up or so it can 
just go dormant. Does your proposal exempt producers from 
paying those fees on leases they cannot develop because of 
either bureaucratic delays or environmental lawsuits?
    Mr. Abbey. Congresswoman, it would certainly have to 
address that. You know, we cannot hold anyone accountable or 
responsible for an action that they have no control over. So we 
have not crafted our final rules relative to how that fee would 
be applied but no doubt that would have to be taken into 
account. If an industry has a lease, and for some reason is not 
able to move forward expeditiously and develop that lease for 
reasons beyond their control, then that would certainly be 
something that we would take into account as part of how we 
would assess any new $4-per-acre fee.
    Mrs. Lummis. And will that fee apply to renewable projects 
as well? I know wind developers tend to aggregate land and sit 
on it for a long time too.
    Mr. Abbey. We are not proposing any kind of per-acre fee 
for diligence but we do have as part of our rights-of-way 
stipulations in the records of decisions that we are issuing to 
approve solar and wind a diligence factor that within a certain 
timeframe they have to make progress in developing their 
projects.
    Mrs. Lummis. And you chose to make the distinction between 
renewables and non-renewables because?
    Mr. Abbey. Because of the different authorities that we are 
using to authorize those uses. For example, we use our rights-
of-way authority to authorize wind and solar projects on public 
lands. Therefore, we incorporate a diligence stipulation or a 
diligence factor into those approvals that are issued under 
rights-of-ways. For oil and gas, it is a leasing function. We 
have not incorporated that language as part of the lease so now 
we are proposing to implement a $4-per-acre diligence fee for 
any lease that is not being developed.
    Mrs. Lummis. Okay. That helps. Thank you.

                      EQUAL ACCESS TO JUSTICE ACT

    Next question is about EAJA, one of my favorite subjects. 
Have you begun keeping records on payments distributed under 
the Equal Access to Justice Act?
    Mr. Abbey. No, ma'am, we have not. We are not tracking the 
EAJA payments from the Bureau of Land Management.
    Mrs. Lummis. And why is that?
    Mr. Abbey. Well, it is difficult first and foremost to 
track. Those fees are paid by our local offices, and we have 
constantly gone out to other land-management agencies to see 
what accounting system they have in place that would account 
for such fees. And Karen, correct me if I am wrong, but I am 
not sure that we found any of the other land-management 
agencies with such a tracking system that we could adopt.
    Mrs. Lummis. And are those paid out of your budget?
    Mr. Abbey. They are paid out of our budget.
    Mrs. Lummis. So it is taxpayer money that is going to pay 
these environmental groups that sue you. And is it typically 
for something--what is a typical environmental lawsuit against 
you? Does it have to do more with grazing or is it more oil and 
gas, or is there a pattern?
    Mr. Abbey. There is a pattern, and the pattern is that most 
of the lawsuits really focus on the NEPA analysis, and the 
trend is that a plaintiff will file a lawsuit alleging several 
deficiencies as part of that lawsuit, and unfortunately, all 
they have to do is find one that a court will sustain in order 
to win their case and then seek payments for their attorneys.
    Mrs. Lummis. Do you pay on settlement agreements as well as 
attorney's fees?
    Mr. Abbey. Attorney fees are routinely negotiated as part 
of the settlement agreements, and if they are part of the 
settlement agreements, they are paid.
    Mrs. Lummis. Okay. And why would you pay if it was a 
settlement agreement?
    Mr. Abbey. Again, during settlement agreements we assess 
the risk to the American taxpayer of what the cost would be if 
that lawsuit continued down the path of going through the 
courts and what the likely cost would be should we lose that 
lawsuit, and the reason and purposes for settlement agreements 
is to right a wrong, if there is a wrong that needs to be 
righted. It is also to move forward with the proposed action 
that people can agree to in a more timely manner than wait two, 
three or four years for a court to make a determination.
    Mrs. Lummis. Thank you. I am going to move to uranium, Mr. 
Chairman. Are we okay?
    Mr. Simpson. I was just wondering if you would yield for 
just a second. I find it incredible that these fees come out of 
your budget and that it is too difficult to track them. This 
does not seem like rocket science. We can put a man on the moon 
but we cannot find out how much we are paying out in these 
fees? How can you budget for anything if you have no clue what 
you are paying out in these fees? It would seem that we could 
write our field offices and say hey, how much are we paying out 
in fees? This seems rather simple to me. Whether other agencies 
have a tracking program or not, I guarantee I can come down and 
put one together for you in short order, and there will be 
language within this appropriation bill as there was in last 
year's bill that never became law which directed the DOI to 
track these EAJA fees so that we would at least have some idea 
of what we are paying out in fees.
    Mr. Abbey. Well, again, we did not incorporate into our 
budget request litigation costs.
    Mr. Simpson. But it is incorporated because it comes out of 
your budget.
    Mr. Abbey. We pay it.
    Mr. Simpson. You pay it.
    Mr. Abbey. Yes.
    Mr. Simpson. But you have no idea how much of it is being 
paid in attorney's fees rather than being spent on the ground 
in management?
    Mr. Abbey. Not right now.
    Mr. Simpson. I find that just rather stunning.
    Mrs. Lummis. Thank you, Mr. Chairman.

                           URANIUM PRODUCTION

    It used to be prior to 2008 the BLM participated in the 
NEPA process with the Nuclear Regulatory Commission on a 
routine basis. You signed on as a cooperating agency so you had 
that status, and there was one NEPA process. Now I understand 
that arrangement has changed so now licensees are going through 
two NEPA processes, and of course, the expense is enormous and 
it takes a very long time. My question is, why is the BLM 
duplicating the EIS process with respect to uranium production?
    Mr. Abbey. Congresswoman, I am not sure of the reason. It 
does not make sense if that is the case. Let me follow up with 
a response back to you and let us look at the current process 
to see why we cannot consolidate that analysis and save 
everybody some time.
    Mrs. Lummis. Thank you very much. A couple things on wild 
horses.

                    WILD HORSE AND BURRO MANAGEMENT

    Mr. Abbey. I am open to all thoughts.
    Mrs. Lummis. I was approached by some folks, veterinarians 
that had developed fertility control for stallions, and I know 
you are concentrating on fertility control for mares.
    Are you willing to try perhaps as a pilot project some 
fertility control for equine stallions?
    Mr. Abbey. The challenge that we have with fertility 
control on stallions is that you have to be sure that you 
gather every stallion versus mares. You do not necessarily have 
to gather all the mares in order to apply fertility control 
that would actually make a difference. But with stallions, if 
you miss one or you miss half a dozen, they can raise havoc.
    Mrs. Lummis. Mr. Chairman, among the culture of wild horses 
is the tendency for the alpha stallion to run younger stallions 
off and to protect his harem of the mares.
    Mr. Abbey. Now, having said that, again, we are open to any 
suggestions or ideas or recommendations from any source, 
especially the source that you cited, as far as incorporating 
such actions into our strategy.
    Mrs. Lummis. Thanks, Mr. Chairman.
    I have one more question on wild horses. Does BLM intend to 
honor the consent decree with the State of Wyoming regarding 
wild horse AMLs?
    Mr. Abbey. To the best of our ability.
    Mrs. Lummis. I note that you intend to reduce the amount of 
horses gathered and removed from the rangeland from 10,000 to 
7,600, and I would alert you that we have a serious overgrazing 
problem in certain parts of our state that is directly 
attributable to wild horses, and the romance that the American 
people have with these magnificent animals is helping to 
destroy the range and leaving those animals in some cases 
shameful condition because they are starving. They do not have 
enough to eat in certain areas. So I know the American people 
have this love affair and the romance, and they are beautiful. 
I am not denying it. The Pryor Mountain unit is genetically 
unique and it is a tremendously regarded prized resource in the 
State of Wyoming. They are tremendous animals. But elevating 
them above all other species in the way that we regard them is 
in fact deleterious to the rangeland resource.

                                SODA ASH

    And now I am switching to soda ash. May I, Mr. Chairman, 
just ask a question on soda ash?
    Mr. Simpson. Very quickly.
    Mrs. Lummis. Thank you.
    What is the status of BLM's report to Congress on the 
current royalty rate for soda ash?
    Mr. Abbey. We have drafted a report that is undergoing 
review right now. We fully anticipate to be able to meet that 
October deadline that we have to provide that report to Members 
of Congress.
    Mrs. Lummis. Thank you, Mr. Chairman.
    Obviously you are a big deal in my state. You are 
tremendously important, and I could go on and on but I will 
submit some other questions in writing and look forward to 
working with you, and thank for you for indulging my questions, 
Mr. Chairman.
    Mr. Abbey. The agency is a big deal. I am not sure I am a 
big deal.
    Mrs. Lummis. Okay.
    Mr. Simpson. Mr. Hinchey.
    Mr. Hinchey. Thank you, Mr. Chairman. Thanks very much.
    And Director Abbey, thank you very much. Thanks very much 
for the complicated job that you have and the way that you are 
dealing with it in what seems to be very effective ways. It is 
certainly challenging, no question about it. We know that you 
have done a couple of--there have been a number of positive 
things that have been happening, particularly over the course 
of the last couple of years, for example, the Wild Lands policy 
which was announced just a few months ago, oil and gas reforms 
the department initiated last year. Those two things are very, 
very important and a lot of other things that you have been 
dealing with, they are also very significant.

                        OIL AND GAS DEVELOPMENT

    The call for drilling on more public lands is also 
something that we are deeply interested in and we want to make 
sure as much as possible, and I am sure that you do too, that 
it takes place when it does in the most effective, safe and 
secure way. I understood that oil companies currently held 80 
million acres under lease but you said now 40 million.
    Mr. Abbey. On public lands that are administered by the 
Bureau of Land Management, there are 41.2 million acres that 
the BLM has leased. That is not to say that BOEMRE has not 
leased other offshore acres.
    Mr. Hinchey. Other offshore acres, which is probably up to 
double that, maybe in the area of 80 million. That is 
interesting. And oil producing on 20 million of those acres, 
right?
    Mr. Abbey. Well, on public lands managed by BLM it is 12.2 
million.
    Mr. Hinchey. Twelve point two million? Okay. Good. So the 
Bureau of Land Management last year, as we understand it, 
issued 4,090 permits to drill but operations began on only 
about 1,480 of those permits. Is that accurate?
    Mr. Abbey. That is true.

                      FEE ON NON-PRODUCING LEASES

    Mr. Hinchey. Okay. So you have got a deep interest in 
drilling on this public land and some of it is beginning to 
take place. Your budget proposes a $4-per-acre fee on non-
producing oil and gas leases to incentivize current 
leaseholders to utilize existing permits. Is that going to take 
legislation here? Is this Congress going to have to do it 
before you can actively get engaged in it?
    Mr. Abbey. Yes, you would through authorizing legislation.
    Mr. Hinchey. So you are currently working on that, and I 
think this is something that we should be working on also. 
Thank you very much. I think that is a very important thing. I 
understand the $4-per-acre fee that you proposed would require 
that legislation. This is something that we have to do.
    Mr. Abbey. That is true.

                          HYDRAULIC FRACTURING

    Mr. Hinchey. So the hydraulic fracturing situation is also 
something that we are deeply concerned about. The topic of 
natural gas drilling has gotten an awful lot of attention 
recently in a variety of ways. One of the most significant ways 
that it has gotten a lot of attention publicly is in the New 
York Times. The New York Times ran a series of articles, I 
think four articles, which were very interesting and in great 
detail on this issue, and it is very appropriate and helpful 
that that kind of thing is getting out there so more and more 
people can understand this situation. EPA is investigating, as 
I understand it, a groundwater contamination incident related 
to fracking in Pinedale, Wyoming, and we know that Wyoming is 
doing a lot of very positive things on this. So this fracking 
in Pinedale, Wyoming, where high levels of benzene, which of 
course is a known carcinogen, have been found in 88 separate 
samples in areas where natural gas operations are more 
concentrated. Federal air quality standards are being violated. 
We know that, and that is something that has to be overcome.
    A House Energy and Commerce investigation recently revealed 
that drilling service companies had been using diesel fuel in 
fracking fluid despite the fact that a 2003 pledge not to do so 
had been put forward. That was a few years ago. Nevertheless, 
it is being done.
    So I know that you are aware, and I saw the nod 
particularly. I know that you are aware of all the difficult 
situations that you have to contend with. I was wondering if in 
the context of this information and given this information 
basically, do you recognize that there are legitimate concerns 
about the risks that accessing this resource, specifically 
hydraulic fracturing, poses to public health and the 
environment?
    Mr. Abbey. Well, Congressman, again, I appreciate your 
leadership on this particular issue because it is a concern to 
this Nation as we look to natural gas more and more as part of 
a major component of our Nation's energy portfolio. As I 
mentioned earlier this week to another committee, you know, 
hydraulic fracturing is a technology that has been used for a 
number of years. Most of the wells that are being drilled on 
public lands today use a component of hydraulic fracturing 
technology as part of their development. That does not mean 
that we should not be cautious about that use. In fact, we need 
to again continue to be vigilant in all the approvals that we 
grant to the companies for drilling on public lands to make 
sure that the public health and safety is being protected. And 
in our efforts to date we have not seen evidence from any 
operations on public lands that have led us to believe that 
there is a human health issue at this point. Our efforts also 
have been targeted to ensure the integrity of the well casings 
to make sure that there is little chance of any leakage from 
any of the fluids that are being used as part of that hydraulic 
fracturing technology of leaking into the water table.
    As we look across the Nation, though, with some of the new 
formations that are being drilled, we have to be very, very 
cautious because in many of these formations, they are right 
next to community water sources, and as part of that we need to 
ensure that every stipulation that is attached is a meaningful 
stipulation, there is appropriate monitoring and that we 
continue to work across all administrative boundaries, for 
example, with the studies that are being performed by the 
Environmental Protection Agency. If their studies indicate to 
us that there is something that we need to be doing differently 
or taking into account as part of our permitting authorization 
process, then we would welcome that information.
    Mr. Hinchey. Well, thanks very much. I deeply appreciate 
that, and I know that this is a very challenging situation and 
something that has to be dealt with. We need more energy. The 
energy situation in this country, basically on this planet, is 
getting more complicated and deeply more expensive, so a lot of 
these things have to be done in the best possible way. I mean, 
the problem that you have now overseeing this is something that 
did not exist. There was good legislation passed in 1974 but 
that was repealed in 2005. That complicated the whole set of 
circumstances that you have to engage in. So we appreciate the 
way in which you are doing that.
    Mr. Abbey. Well, Congressman, if I could, the finding that 
companies are using diesel is certainly problematic to us.
    Mr. Hinchey. Absolutely. That is absolutely a problem, and 
that is something that has to be examined and made sure that it 
does not happen.
    Earlier this year, Secretary Salazar stated that fracturing 
was--and this is a quote of his--``the Achilles heel that could 
essentially kill natural gas.'' That was his quote. He was 
referring to the public's concern about this process, 
especially the fact that many companies do not disclose what 
chemicals they are using and what we are just talking about. 
The Secretary indicated that the department was working on 
regulations that would require disclosure and we should see 
something with regard to this sometime in the next few months. 
I know as you work on this, I would recommend that we all look 
at what Wyoming's new disclosure requirements are as a model. 
In that state, they require pre-drilling and post-drilling 
disclosure along with specifics about the chemicals and their 
volumes. So our member here, I want to express my appreciation 
to your state for what they are doing in a leadership way on 
this particular important issue.
    So let me ask you this. Will BLM look at Wyoming as a model 
for the rules your agency develops on disclosure of hydraulic 
fracturing fluid chemicals?
    Mr. Abbey. Congressman, we have looked very closely at the 
Wyoming system for possibly adopting it on public lands. We 
have also looked at other processes that other states have 
adopted, Arkansas being another example of recently passed 
legislation, and then there are other states too that have 
either passed legislation or entertaining legislation on this 
particular subject matter.
    We are also scheduled to go out and host several public 
forums over the course of the next month or two to get input 
from the public relative to what concerns they may have, some 
ideas and recommendations that they would pass along to us 
relative to if we adopt new regulations requiring disclosure of 
fracking chemicals that we take all that into account so that 
we can have the best regulations as possible. In the meantime, 
the Secretary certainly has been very open and public in his 
encouragement to the industry to voluntarily disclose the 
chemicals that are used as part of their fracturing.
    Mr. Hinchey. I thank you very much. Thank you very much for 
everything you are doing and for everything that you have said 
here today.
    Mr. Abbey. Thank you.
    Mrs. Lummis. Will the gentleman yield? May I add something?
    Mr. Hinchey. Please.
    Mrs. Lummis. I do not know if you have in your permits to 
drill or leases a provision that would require the companies to 
do baseline tests on the water before they drill but I think 
that is also advisable, because if they drill, test the water 
and require that that data be submitted to you, you have got 
that in the record, and then if there is subsequent question, 
you have already got the baseline.
    Mr. Abbey. That is a great idea. Thank you for sharing.
    Mrs. Lummis. Thank you.

                           WILD LANDS POLICY

    Mr. Simpson. Well, let me ask about another subject that I 
am sure you have attended several hearings on, Secretarial 
Order 3310, Wild Lands.
    Mr. Abbey. I was hoping to get through one without having 
to address that.
    Mr. Simpson. As you know, there was language in H.R. 1 
which would have prevented use of funding to institute the Wild 
Lands policy. And you are talking to one of the Republicans who 
is probably most friendly to preserving wildlands and 
wilderness and other things. As you know, I have worked on 
several pieces of wilderness legislation over the years that I 
have been here. I actually think those lands are going to 
become more valuable as time goes on and the population grows 
and people are going to seek solitude in places that we have 
preserved for future generations that they can decide what they 
want to do with it.
    Let me tell you the concern I have with the Wild Lands 
policy and where I think you should have gone. The reason we 
did this is because the authority expired for the BLM to do 
wilderness study areas in their management plans, right?
    Mr. Abbey. Under 603 of FLPMA.
    Mr. Simpson. And it expired, and an agreement between 
Secretary Norton and the State of Utah said you would not do 
any wilderness study areas on BLM land. Why did you just not go 
for reauthorization of that section of FLPMA?
    Mr. Abbey. Well, again, as you know, Mr. Chairman, the 
Federal Land Policy and Management Act is a very complex and 
complicated piece of legislation, and I think it is one of the 
most fantastic pieces of legislation that was passed by 
Congress, but it also provides us a great deal of flexibility 
and I think we need that as far as managing 245 million acres 
of land for multiple uses. Under 603 of FLPMA, it provided a 
certain deadline for the Bureau of Land Management to conduct a 
national inventory of public lands to identify those lands with 
wilderness characteristics and to designate those lands as part 
of that inventory as wilderness study areas, and then within a 
certain time frame make recommendations to Congress on which of 
those wilderness study areas we believe as the managing agency 
are deserving of wilderness designation and which of those 
wilderness study areas should be released for other uses.
    The reason why we did not pursue reauthorization is because 
there are other authorities within the Federal Land Policy 
Management Act including section 201, which directs the Bureau 
of Land Management to conduct routine inventories of all public 
lands including for purposes of identifying lands with 
wilderness characteristics. Section 202 and also sections 102, 
103 and 302--I am getting to be an expert on this now--of the 
Federal Land Policy and Management Act also directs the Bureau 
of Land Management as part of our land-use planning process to 
use that inventory information that we routinely conduct as 
part of our land-use planning. So we did not see a need to have 
to go back and ask for reauthorization. We felt like we already 
had all the authorities necessary as part of the Federal Land 
Policy and Management Act to move forward and using a very 
public process if through an inventory effort, because it is a 
two-phase approach under the Secretarial Order, we would 
conduct inventories of public lands to determine which of those 
public lands we have found to possess mandatory wilderness 
characteristics, and that includes size, naturalness and 
outstanding opportunities for solitude and primitive 
recreation. Those are the three characteristics in the 
Wilderness Act of 1964. So when we find lands with wilderness 
characteristics, then the Secretarial Order directs the Bureau 
of Land Management to take that information and through a land-
use planning process, which is a very public process, as many 
of you know, to make a determination on whether or not the 
decision that is reached in that land-use planning process 
would be to protect those wilderness characteristics but 
limiting certain uses or make a determination to allow uses 
that could impact those wilderness characteristics. But if we 
decide through that land-use planning process to protect those 
wilderness characteristics that we would do so through a Wild 
Land designation. So that is a long way to address your 
question but we just felt like we had sufficient flexibility 
and authorities under FLPMA to go forward with the approach 
that we are taking.
    Mr. Simpson. And that I think points out one of the 
problems. I think you have just infinitely increased the number 
of lawsuits that you are going to have because once you go 
through and you decide that something has wilderness 
characteristics and you decide that we are going to allow for, 
even though it has wilderness characteristics, outdoor 
recreation, we are going to allow for oil and gas leasing or we 
are going to allow for wind turbines or whatever on that land, 
I will guarantee you there is a lawsuit. And once you have 
allowed that, you have taken away the wilderness 
characteristics so why have a Wild Land once you have allowed 
oil and gas leasing on there?
    The other thing you have done, and this is what concerns me 
more than anything, is that you have made it infinitely more 
difficult to resolve wilderness debates that currently exist, 
and I will use a case I have been working on. Most wilderness 
debates come down to a compromise. You decide what area is 
going to be wilderness, what area you are going to release for 
multiple use, what you are going to release for wilderness 
study area. Once that compromise is made, you know, people come 
to the table for different reasons. Some of them because of the 
area you have released. Some of them come because of the area 
you have designated as wilderness. Some of them come because of 
the other things you have done in the area as you try to reach 
this compromise, bringing groups with different visions 
together, and that is very, very difficult to do, as you well 
know. All of a sudden you pass a law or you pass a wilderness 
bill that releases 130,000 acres of wilderness study area for 
multiple use and now the BLM can go in and say well, that 
obviously has wilderness characteristics because it was a 
wilderness study area and we will designate it as a Wild Land. 
Guess what? I have just lost that group of people that came to 
the table because of the release of the 130,000 acres.
    So I think you are going to make it more and more difficult 
to actually resolve some of the things I think Congress should 
be doing, and that is deciding what areas should be wilderness, 
what areas should be released. And those are some of the 
concerns I have that I do not think they have fully understood 
when they--I take the Secretary at his word. They were doing 
this with I think the best of intentions. But I think the 
outcome is going to be far different than what they intend, and 
consequently I think Congress is going to be very concerned 
about it as you well know they are because we have already held 
hearings in the Resources Committee and other committees and we 
have heard from many Westerners about the concerns on this, 
because, frankly, I do not see many Wild Lands being designated 
by the BLM east of the Mississippi. Most of them are going to 
be west.
    Mr. Abbey. That is true. And I was just teasing about not 
wanting to address this issue because I appreciate the 
opportunity to address it, because you have valid concerns as 
do others that have raised similar concerns. Let me do my best 
to address some of those concerns.
    First and foremost, litigation was already being filed 
against the Bureau of Land Management prior to the Secretarial 
Order based upon us not fulfilling the obligations and 
responsibilities of the Federal Land Policy and Management Act. 
In fact, we have several court rulings that have directed the 
Bureau of Land Management to go back to do inventories and then 
to take that information into account in making those 
decisions.
    Mr. Simpson. How many agencies or how many of your bureaus 
out there have completed their land management plans or nearing 
completion and now have to go back and do them again?
    Mr. Abbey. Well, we are not asking anyone to go back and do 
them again because what we are asking them to do is go back to 
their land-use plans that are in place today and to determine 
whether or not they are in full compliance with the Secretarial 
Order. That work is going on right now----
    Mr. Simpson. But none of them will be, will they?
    Mr. Abbey. Well, I think we will see several of----
    Mr. Simpson. Because they did not look at Wild Land 
characteristics when they did it originally. How could they be 
in compliance with the new Secretarial Order?
    Mr. Abbey. In many of the new resource management plans 
that have been done, especially in the 9th Circuit because of 
previous court rulings that directed us to do the inventories, 
some of those inventories have been completed and that 
information was used in developing their land-use plans. So I 
think, Mr. Chairman, that you will see most of our more recent 
land-use plans being consistent with the Secretarial Order. 
That is not to say that all will be consistent, and based upon 
the review that is being conducted now by the field offices, 
they will report back to us by June or July or shortly 
thereafter what their findings are relative to if there are any 
inconsistencies within their land-use plans and the Secretarial 
Order.
    Let me also say something about your concerns about the 
Congressional process and the authority. Only Congress can 
designate an area as wilderness. We respect that. We understand 
that and that is the way it ought to be and that is the way it 
will continue to be. We also respect that as you go through a 
very, very difficult time of collaborating with many, many 
different stakeholders and coming up with proposed legislation 
and ultimately debate that legislation through the 
Congressional process and make a determination of which lands 
should be designated and which lands that were considered and 
discussed through the collaborative process should not be 
designated and released for other purposes, the Bureau of Land 
Management will defer to the language in that legislation on 
how to treat those lands in the future.
    I met with a group of stakeholders from Washington County 
in Utah just earlier this week, and they had similar concerns. 
They had passed the Washington County lands bill just two years 
ago, a very complicated process. Everybody came to the table. 
They reached a compromise. They designated certain areas as 
wilderness. They released the others. The concern is, will the 
Bureau of Land Management then go back and say these areas, 
just as you have, possess wilderness characteristics and 
therefore they are going to be designated as Wild Lands. The 
truth of the matter is, likely not because as we go forward, we 
will defer----
    Mr. Simpson. Likely not?
    Mr. Abbey. Likely not, we will defer back to the 
Congressional actions that have taken place, recent 
Congressional actions.
    Mr. Simpson. So would you support language in the 
wilderness bill that we are working on that said the land, the 
132,000 acres released for multiple use, can never be 
considered for wilderness designation or Wild Lands 
designation?
    Mr. Abbey. I am not sure we would go that far, and I say 
that because----
    Mr. Simpson. Hence the problem.
    Mr. Abbey. And I say that because circumstances can change 
over time, and an example of that is that we had wilderness 
legislation passed in Arizona back in 1986 or so. Well, that is 
30 years ago. Over time some of those areas that were dropped 
from wilderness consideration are still in a natural state. 
There is public support for protecting those wilderness 
characteristics and therefore if we go back and through a land-
use planning process and determine that those lands that have 
been previously considered by Congress 30 years ago and not 
designated as wilderness are deserving of Wild Land protection, 
then we would consider making a decision to protect those 
wilderness characteristics through a Wild Land designation. But 
that is legislation that took place 30 years ago.
    Mr. Simpson. But the problem is, I am talking about getting 
people to collaborate and come together.
    Mr. Abbey. I know.
    Mr. Simpson. And you know that there is a mistrust of the 
Federal government and that while the BLM today says well, we 
would not go back and essentially override Congress or consider 
those for Wild Lands if Congress had released them, we do not 
trust the next BLM director or the next Administration four 
years from now because we do not know who is going to get 
elected, and that changes dramatically over time, and what they 
want is some certainty, and when these people come to the 
table, what they want is some finality. That is why we are 
trying to decide what is wilderness and what is going to be 
released, to create some finality, and all we have done is 
created more uncertainty in that well, okay, we have released 
it for now, and that is----
    Mr. Abbey. No, I understand the difficult situation we all 
face, but getting back to your other question, we would be 
happy to sit down with you and your staff on any wilderness 
legislation that you are entertaining and try to resolve your 
concerns through release language.
    Mr. Simpson. I appreciate it. Any other questions?
    Mr. Hinchey. Well, we have the next hearing at 11:00.
    Mr. Simpson. Let's take a five-minute break.
    Mr. Abbey, thank you. I know that you have a difficult job 
because, as I said in my opening statement, no matter what 
decision you make, you are going to get sued. That is just the 
reality. We would like to find a way that we could reduce 
lawsuits by both sides--I do not want to just blame 
environmental groups by both sides--and actually put that money 
into managing the public lands, and I know you, as I said, have 
a difficult job and do your best and we appreciate what you do 
and I appreciate what you do in Idaho and the other states that 
are public lands states and I look forward to working with you 
on this.
    Mr. Abbey. Thank you.
    Mr. Moran. Mr. Abbey, I was going to say this privately, 
but I should say it publicly. You do an excellent job on behalf 
of not only BLM but the Department of Interior. Thank you.
    Mr. Abbey. Thank you.
    Mr. Simpson. And we will come back in five minutes.

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                                          Thursday, March 10, 2011.

   OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT 2012 BUDGET 
                                REQUEST

                               WITNESSES

JOSEPH PIZARCHIK, DIRECTOR, OFFICE OF SURFACE MINING
GLENDA H. OWENS, DEPUTY DIRECTOR, OFFICE OF SURFACE MINING
RUTH E. STOKES, BUDGET OFFICER, OFFICE OF SURFACE MINING

                   Opening Statement Chairman Simpson

    Mr. Simpson. Good morning, and welcome, Director 
Pizarchik--say it for me.
    Mr. Pizarchik. Pizarchik.
    Mr. Simpson. See I could--that just does not flow.
    Mr. Pizarchik. Just say Joe P.
    Mr. Simpson. Joe P, okay. Thank you for being here today to 
discuss the 2012 Budget Request for the Office of Surface 
Mining. In conjunction with the states, the Office of Surface 
Mining oversees and regulates existing coal mining practices 
and seeks to reclaim abandoned mine lands which are the legacy 
of 150 years of coal mining. These are two different but 
complementary roles for the OSM and the states.
    For the fiscal year of 2012, the Office of Surface Mining 
is proposing a tighter discretionary budget of $145.9 million, 
a $17 million reduction below the 2010 enacted level. It was 
one year ago to the day that we were discussing your 2011 
request. I see that a few 2011 proposals have carried forward 
into 2012, such as the reductions to state regulatory grants 
while encouraging state fee increases. And I see that you have 
offered some new proposals including increased federal 
oversight inspections and reductions to the abandoned mine 
reclamation program.
    The budget also proposes new approaches to the mandatory 
spending that compromises the bulk of your budget. While those 
proposals may not fall into the jurisdiction of this committee 
and rather to the authorizers, we are certainly interested in 
the impacts as they would have substantive changes on how 
programs are managed.
    We will explore many of these areas further during our 
questions. I would like to yield now to our ranking member from 
Virginia, Mr. Moran.

                  Opening Statement Congressman Moran

    Mr. Moran. Thank you very much, Mr. Chairman. And, Mr. 
Pizarchik, thank you very much for your leadership. You have 
tremendous experience in coal mining, and I know that Ms. Owens 
and Ms. Stokes are also very well qualified. So we have good 
leadership at the top of the Office of Surface Mining. We 
appreciate that.
    The hearing today gives us a chance to look at a particular 
couple of very important policy issues. The stream buffer rule 
and the proposal to enhance the abandoned mine land program by 
focusing on the areas that have the greatest need.
    Some of our colleagues keep speaking of overage, and I do 
think it is an appropriate term to use when explaining how 
members of Congress have found it necessary to stop 
environmental regulations even before they are issued. A year 
ago, OSM published in the Federal Register a notice of intent 
to conduct an EIS for the stream protection rule, which will 
replace the 2008 stream buffer zone rule that was done in the 
waning hours of the Bush administration.
    Even though there is still no final rule, that, of course, 
has not stopped members from blocking OSM from completing its 
environmental review. This past month, during the floor debate 
on H.R. 1, the House unfortunately voted to block OSM from 
developing, carrying out, implementing, or otherwise enforcing 
proposed regulations by the Office of Surface Mining 
Reclamation and Enforcement.
    Mr. Chairman, I believe that some of the rhetoric from the 
coal industry has been deliberately misleading. So I am looking 
forward to the expert testimony of the Director of the OSM 
because he has such solid experience in surface coal mining.
    I am also anxious to hear about the Administration's future 
proposal to alter the way that the abandoned mine land fund is 
used. I do think that AML needs to focus their substantial fee 
revenue on the places that have the greatest health and safety 
needs. There are thousands of sites, especially in Kentucky, 
West Virginia, and Pennsylvania and in Virginia, which show the 
scars of historic coal mining. They are substantial. They need 
to be addressed. Seems to me we should fix these areas rather 
than returning coal mining fees to states that no longer have 
abandoned mines.
    The purpose of the fee was to clean up abandoned coal 
mines, but instead, and I am sorry that Mrs. Lummis is not here 
because I wanted to address this comment to her directly. But a 
state like Wyoming is getting over $1 billion a year from the 
Interior Department for royalties and not using the coal fees 
portion of the revenues that they get for the purpose for which 
those coal fees were intended.
    Now, finally I do look forward to hearing about how OSM 
thinks the states will be able to take up more of the cost of 
running the coal mine regulatory programs. The states may have 
a different opinion about that funding issue, of course. But 
these are important issues. I am glad we have an opportunity to 
discuss them, and we appreciate the hearing, Mr. Chairman.

                    Testimony of Director Pizarchik

    Mr. Simpson. Thank you. Joe P., it is you.
    Mr. Pizarchik. Thank you, Chairman Simpson and members of 
the subcommittee. I appreciate you inviting me here today to 
testify on behalf of the fiscal year 2012 Budget Request for 
the Office of Surface Mining Reclamation and Enforcement.
    In 1977, Congress enacted the Surface Mining Control and 
Reclamation Act and also created the Office of Surface Mining 
for two basic purposes. First, was to assure that the Nation's 
coal mines were operated in a manner that protected the 
citizens and the environment during mining and that the land 
was restored to a productive use after mining. And second, to 
implement an abandoned mine lands program to address the 
hazards of environmental degradation that remain from the pre-
Surface Mining Act days.
    Then, as today, coal remains a large source and important 
fuel for our country and provides today about half of our 
Nation's electricity. When Congress enacted the Surface Mining 
Act, it recognized the need to strike a balance between the 
protection of the society, and protection of the environment, 
while also helping to ensure we had enough coal to meet 
America's energy needs. OSM was charged with striking that 
balance.
    The 2012 budget is a focused budget. It is a budget that 
reflects some tough choices that we have had to make in these 
difficult economic times. The 2012 budget request for OSM 
totals $145.9 million in discretionary funding, which is a 
decrease of $16.9 million from the 2010 enacted and so far the 
2011 continuing resolution level funding. For OSM, it supports 
the equivalent of 528 full-time employees nationwide.
    Some of the discretionary budget highlights include the 
increased funding and staffing of about $3.9 million for 25 
FTEs to continue to fulfill this Administration's emphasis and 
commitment to significantly reduce the adverse impacts of coal 
mining in Appalachia and across the country. But those are not 
25 new employees. 18 of those are employees, or positions, that 
we will transfer from our AML emergency program, and the 
federal emergency program.
    The budget proposal also provides for, as I mentioned, the 
elimination of funding to state and federal emergency projects. 
That is a reduction of $3.5 million, of which $2.3 million is 
associated with the related federal reclamation staff of about 
18 FTEs transferring from the emergency program into the Title 
V Program. So there would be a net increase of actually seven 
people in the oversight portion under the Title V Program.
    The reason for reduction and the elimination of the federal 
emergency program is due to the significant increases in the 
mandatory funding provided to the states over the recent years. 
In 2011, there was $395.6 million made available to the states 
for dealing with abandoned mine issues.
    The Administration's proposal for OSM also provides for a 
reduction in the regulatory grants of $11 million to the 
states, and we have been encouraging the states to recover 
those costs from the regulated community.
    The proposal also provides for elimination of funding of 
federal high priority projects. It is about $1 million, and it 
proposes to cover future funding under the mandatory funding 
provisions. There is also a proposal for eliminating funding of 
technical studies and funds that we have been using to preserve 
maps for old, abandoned underground mines. Again, these are 
part of our tough decisions looking to where we could make some 
cuts to maintain our core principles but still help address the 
deficit issue that this country is facing.
    Also, there is a reduction of outcrop fire projects of 
$160,000, and we are not just proposing cuts to the states and 
others. We are also proposing cuts to OSM. We are proposing to 
reduce our budget and our expenditures for administrative costs 
by $573,000, and that would come through reductions in travel, 
information technology and strategic sourcing, that is 
acquisition of goods and services nationwide.
    We are also proposing to eliminate a half million dollars 
that has been provided in the past for auditing resources 
associated with the coal export litigation. We no longer need 
it. Our fixed costs are fully funded as well.
    Regarding the reference you made, Mr. Chairman, to some of 
the legislative changes, the budget proposal of the 
Administration is to overhaul the abandoned mine land program 
to reduce some of the unnecessary spending and to ensure that 
the most dangerous abandoned mine land issues are addressed.
    Revisions fall into a number of major categories. The 
first, which is a repeat from previous proposals, is to 
eliminate funding to the certified states and tribes--those are 
the states and tribes that have certified that they have 
completed all the reclamation of their abandoned coal mines. 
And that would be a reduction of about $184.2 million for 
fiscal year 2012. The four states involved are Wyoming, 
Louisiana, Montana, and Texas. The three Tribes are the Navajo 
Nation, Hopi, and Crow. That substantive change in the statute 
was projected to save the treasury $1.2 billion over 10 years.
    One of the other changes proposed is the allocation of the 
grants for AML reclamation. The existing process, where it is 
distributed based on a production formula, will change to a 
competitive process with an advisory council. And, in addition 
to those changes, there would be funds made available to 
address emergency projects in all states, to administer the 
state AML programs in all states and tribes, and to support the 
advisory council.
    As a final change, the administration is proposing the 
creation of a similar program for abandoned hard rock mines. It 
would involve a new reclamation fee on the current hard rock 
production. That fee would be developed and established by the 
Bureau of Land Management, I believe, who testified earlier 
today. And BLM would be the agency with an advisory council to 
distribute those funds on a competitive basis to address the 
most dangerous sites first, the most dangerous environmental 
and safety hazards on abandoned hard rock sites.
    Because of our experience over the past decades in 
collecting the AML reclamation fee for coal mining, OSM would 
provide that service to the BLM for the hard rock mining. This 
would avoid any duplication of efforts and achieve efficiencies 
using OSM's expertise to collect those funds from the hard rock 
mining companies.
    The budget also proposes to continue with the payments to 
the United Mine Workers of America health benefit funds, 
estimated to be about $225.3 million in fiscal year 2012.
    Thank you all for the opportunity to be here today to 
testify, and I do want to remind everybody that due to my past 
employment in Pennsylvania, there are some matters which I had 
participated in from which I have recused myself to avoid any 
appearance of impropriety or any conflict of interest. If any 
question of that nature comes up today, my deputy, Glenda 
Owens, will handle those questions. Thank you, and I am 
available for questions.
    [The statement of Joseph Pizarchik follows:]

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                       COAL MINING PERMIT PROCESS

    Mr. Simpson. So you are just going to shovel all the tough 
questions off to her? Is that right? I am just kidding. First, 
many of my colleagues from coal-producing states including the 
chairman of the full Appropriations Committee believe that the 
coal industry is paying a heavy price because of the demanding 
and often drawn-out permitting reviews now imposed by the EPA, 
the Corp of Engineers, and the Office of Surface Mining.
    The enhanced coordination procedures agreed to in a 2009 
memorandum of understanding were supposed to expedite the 
review of 79 mining permits that had been stuck in the queue. 
With only six permits granted since the 2009 MOU and 39 permits 
withdrawn, withdrawn likely because the companies did not want 
or could not afford to jump through the additional EPA 
requirements for a permit, we see that the enhanced 
coordination procedures have only been a front really to delay 
or discourage additional mining in Appalachia.
    How would you characterize the permitting process that now 
governs coal mining in our country and more specifically in 
Appalachia?
    Mr. Pizarchik. Generally speaking, the permitting process 
in this country as a whole is handled mostly by the state 
regulatory authorities in states that have primary 
responsibility for the regulation of coal mining, and OSM is 
not involved and does not make those permitting decisions. We 
do provide technical assistance to the states on a requested 
basis. On federal lands, typically permitting decisions are 
handled, again, by the state where the federal land is 
associated. On tribal lands, we do handle the permitting for 
the Hopi Tribe, Navajo Nation and Crow Tribe as appropriate. 
Over the years, we have been working with the Indian Tribes, in 
order to develop regulatory programs to achieve primacy. We are 
very supportive of that.

                    PERMIT COORDINATION IN TENNESSEE

    In Appalachia, we recognize that there have been some 
issues, and OSM has been working with the Environmental 
Protection Agency and with the Army Corps of Engineers in 
Tennessee, where OSM is the primary regulatory authority. And 
in December, those efforts that we spent the last year working 
on culminated in the signing of a memorandum of understanding 
with those three agencies as well as with the Tennessee 
Department of Environment Compliance, TDEC, who handles the 
water aspects of permitting in Tennessee. OSM handles the coal 
mining permit.
    That process was developed to improve how we do permit 
coordination within the federal family and with the state 
regulatory authorities. We also have identified a number of 
standard operating procedures. We recognized that there were 
opportunities to improve the timeliness and the efficiency of 
the permitting. If you need to do water monitoring for your 
surface coal mining permit, water monitoring for your 404 
permit that you get from the Corps, or water monitoring for the 
NPDES permit that you would get from the state water authority, 
then it made a lot of sense for agencies to get together to 
agree on where those monitoring points were located. This 
provides for a unified system of review that everyone could 
agree on, which would reduce the costs for the applicant as 
well as provide for more consistency and more timeliness.
    Under those operating procedures, we made efforts to get 
everybody educated on what is required under the different 
statutory and regulatory permitting requirements for the 
various regulatory authorities, for them to cooperate.
    We have not stopped there. We are exploring the use of the 
Tennessee model with some of the other states in Appalachia. 
OSM is not a permitting authority in those states but is 
working with the state regulatory authorities who do the 
permitting and also with the Corps and EPA to try to get 
similar improvements made to the process.
    This is something that is not necessarily just a problem in 
Appalachia. There have been some experiences where the multi-
permitting of the mine site does not run as smoothly as we 
think it could, so we are continuing to work to try to make 
some improvements on those areas.
    We wanted to do it first where we are the permitting 
authority so that we could set the example of what could be 
accomplished. We are not telling the states that this is the 
way they have to do it. We are just laying it out as an example 
of what worked in Tennessee. We recognize that the state laws, 
and some of the processes, vary across the country. We are 
trying to facilitate with state regulatory authorities, the EPA 
and the Corps, a process where they can look at what we 
accomplished in Tennessee and maybe use that as a template, or 
a model, to make improvements to their permitting process and 
coordination.
    We have some more work to do. There is progress being made. 
We know there is interest, I believe, in West Virginia, 
Alabama, Kentucky.

                    2010 MEMORANDUM OF UNDERSTANDING

    Mr. Simpson. When was this MOU signed?
    Mr. Pizarchik. December of 2010.
    Mr. Simpson. Of 2010?
    Mr. Pizarchik. Yes.
    Mr. Simpson. So this is a different MOU than the one signed 
between the Army Corps and Office of Surface Mining and the EPA 
in 2009?
    Mr. Pizarchik. Yes.
    Mr. Simpson. It was meant to coordinate things?
    Mr. Pizarchik. The 2009 MOU was a much broader overview. 
The 2010 MOU is much different. It is actually on the ground. 
The one that was signed in 2009 was signed by the leadership of 
the various agencies. The one that we executed in 2010, in 
December, is actually implemented at the field level, where the 
staff are making the permitting decisions, and doing the 
reviews; those are the people who are involved and committed to 
this new process.
    In order to be effective on implementing improvements and 
permit coordination, it is our view that you cannot mandate it 
from on high. You have to have the buy-in of the people who are 
actually making the permitting decision in the field. That 
includes the state, and the field folks for the Army Corps, and 
EPA, et cetera. And that is how we approached it in Tennessee.
    Mr. Simpson. It seems to make sense, and I hope it is 
successful. We will be watching it closely. The more we can 
coordinate the requirements of all of the different agencies, 
state and federal, so that companies know what they have to do, 
it seems to make a lot of sense in streamlining, I guess, is 
the best word, the permitting process.
    But we will be watching that to make sure because the 2009 
agreement, when you look at, was kind of the general intent, 
but when you have--what was it--what did I say--six permits 
granted out of the 79 permits that were originally meant to--
this was meant to address, that did not seem to do the trick 
very well. But I understand what you are doing.

                CUMULATIVE HYDROLOGIC IMPACT ASSESSMENT

    Mr. Pizarchik. If I may, there is one other aspect on which 
the Federal agencies are still working. Under the Surface 
Mining Act, before a permit is issued, the statute requires the 
regulatory authority to make a determination of the cumulative, 
hydrologic impact assessment of the proposed mining, and any 
likely future mining, on the streams in the particular area.
    There is a similar type of cumulative impact assessment 
that is required by the Clean Water Act to be performed by the 
Army Corps of Engineers when they issue fill permits. The 
agencies are working together to see if we can develop some 
processes to improve how the assessment is completed because 
the Surface Mining Act looks at a different area than does the 
Clean Water Act. There is some overlap, but there are some 
distinct differences between the two. And so the agencies are 
working to see if we can develop some tools that will help 
streamline that process and provide more clarity, more 
consistency, and more predictability for all the parties 
involved because it is something that has not been done in the 
past.

                  MATERIAL DAMAGE OUTSIDE PERMIT AREA

    And related to the cumulative hydrologic impact assessment 
that is required under the Surface Mining Act, the law 
specifically provides for the coal mines to be designed in a 
manner that they do not cause material damage outside of the 
permit area. That term has never been defined in the 33 years 
of this agency. That is one of the things that we intend to fix 
to provide some clarity and understanding and consistency to 
the regulated community, to the regulators, and to the 
environmentalists and citizens. So everybody knows what the 
standard is to judge a surface coal mining operation.

                        2008 STREAM BUFFER RULE

    Mr. Simpson. Under the 2009 memorandum, OSM committed to 
take another look at the 2008 Stream Buffer Rule. That rule 
required that fill be placed at least 100 feet from streams if 
the disposal of such fill would negatively impact water quality 
or quantity. This was finalized. It took five years to complete 
and promulgated after considering 400,000 comments. What 
concerns did OSM and not the courts have with the rule it had 
just published leading to an administrative stay and 
reconsideration of the rule?
    Mr. Pizarchik. Thank you, Chairman Simpson. There are a 
number of reasons why we are looking at making improvements to 
our regulations. One, there was an error that was made in the 
2008 process, and the courts advised the Department of the 
Interior and OSM that instead of vacating it, that we would 
need to go through a new rule-making process. So that is what 
we are doing.
    Plus, the existing 2008 rule focused mainly on the valley 
fills and mountaintop mining in the area, and there are a lot 
of other things that it did not address in the effort to do a 
better job of minimizing the adverse impacts on streams and 
protecting streams.
    So we sought public input, and received over 32,000 
comments and suggestions on how we could do a better job of 
protecting streams and improving our regulations. We took that 
information and we are looking at it. One of the things we 
realized is that we know a lot more scientifically about the 
adverse effects of mining today than we knew 30 years ago. A 
lot of that new information was not utilized in preparing the 
2008 rule.
    We also know that there are new technologies available that 
can help the operators, the state regulators, and OSM all do a 
better job. So we believe that it is appropriate to also update 
our rules to provide more clarity, more specificity to 
everybody involved, and to take advantage of all the things 
that we have learned over these past 30 years, or so, to do a 
better job of protecting streams.

      STREAM PROTECTION RULE: ENVIRONMENTAL IMPACT STATEMENT (EIS)

    Mr. Simpson. In Tuesday's hearing with Secretary Salazar, 
we had many questions about the genesis for the revisions to 
the stream buffer rule and the associated environmental impact 
statement. Last July, OSM requested and received the authority 
to reprogram $7 million from state regulatory grants in order 
to fund the EIS. What is the estimated cost of the EIS, and how 
much has OSM spent or paid to the contractor for work on the 
EIS, and how much remains?
    Mr. Pizarchik. Well, first off, out of the $7 million, that 
was not all from the Title V or regulatory grants. Some of it 
came out of OSM's other funds that we had available. On the 
contract amount, we used a competitive process, and we awarded 
a contract that was a little bit under $5 million to the 
contractor. $3.5 million of that has been spent as of March 7, 
2011. That goes up through the January 2011 billing, and that 
leaves about $2 million remaining for additional work, staff 
travel, and contract work.

                              EIS CONTRACT

    Mr. Simpson. At Tuesday's hearing, Deputy Secretary David 
Hayes indicated that the OSM was unhappy with the work the 
contractor had conducted to date on the EIS and found the 
contractor's work to be inadequate. He also indicated that the 
department was looking at completely revamping that work. If 
OSM is unhappy with the work, does OSM anticipate the need to 
request additional funds to complete the EIS? And will this 
push back the anticipated delivery scheduled for the EIS?
    Mr. Pizarchik. It was correct that we were unhappy with the 
quality of the work. We had hired the contractor to prepare an 
environmental impact statement as required by the National 
Environmental Policy Act (NEPA) and the regulations 
implementing that Act. It was not just OSM that had concerns 
with the quality of the work. We had been sharing drafts of the 
work product with cooperating agencies. Many of the states have 
been involved in this effort. They too shared concerns with the 
quality of work as to whether it met the legal requirements of 
NEPA.
    We issued a correction letter to the contractor in advance 
of the work product that was due on February 23, 2011. That 
work product has been received. We are taking our time to very 
thoroughly, closely and thoughtfully review those documents to 
make a determination as to whether they satisfy the contract 
requirements. Once we have that review completed, we will use 
that information to determine how we are going to proceed from 
that particular point.
    If the product is contract compliant, we will be able to 
proceed. If it is not contract compliant, then we will have to 
evaluate and determine how we proceed. That would add some 
additional time to the timeframe necessary to complete the rule 
making.
    Mr. Simpson. After Tuesday's hearing with the Secretary and 
Deputy Secretary Hayes, it was--I do not want to say said, but 
implied and then an article came out in the paper that they may 
be looking at cancelling the contract with this company that 
was doing the EIS. Are you currently considering cancelling the 
contract with that company?
    Mr. Pizarchik. We had some very strong concerns about the 
quality of the work. We have very high expectations that the 
work would meet the quality required by the contract and the 
National Environmental Policy Act. We are assessing the work 
product that we received after we notified the contractor of 
all of our concerns, and all options are definitely on the 
table. If we have a quality product, or if we do not have a 
quality product, we will consider what is the best way to 
proceed forward for the government and the public.

                    STREAM PROTECTION RULE SCHEDULE

    Mr. Simpson. Since the EIS will inform the stream buffer 
rule, the OSM needs the EIS before promulgating a rule. What is 
OSM's timeline for promulgating the final rule? And will this 
happen in 2012? And will the potential firing of this 
contractor and having to rehire another one, if that were to 
happen, would that delay this rule?
    Mr. Pizarchik. Where we are right now is that we still have 
to complete our assessment of the preliminary EIS and make a 
determination. And if we are unable to proceed with the current 
contractor due to contract compliance issues, that could extend 
the time period on the rule. We do need the information in the 
EIS--you are correct--in order to be able to continue with the 
development and complete the preparation of our proposed rule. 
We cannot proceed with the proposed rule or draft the EIS 
without having a quality preliminary draft EIS.
    Mr. Simpson. Will you need additional resources to do that?
    Mr. Pizarchik. At this point in time, it is too early to 
make a determination on additional resources.
    Mr. Simpson. Thank you. Mr. Moran.

                      STREAM PROTECTION RULE: NEED

    Mr. Moran. Thanks, Mr. Chairman. As you are so well aware, 
one of the blessings of our natural world is the way that we 
get fresh, clean water. The skies open up. The water comes 
down, flows down mountains into mountain valleys, and the 
mountain streams flow into the river and so on, and thus we 
continue to provide adequate, fresh, healthy water and the 
process continues to regenerate itself.
    The problem is when mining firms come in and top off 
mountains and level the land by filling the stream valleys, it 
not only reduces the quantity of water that is available for 
individuals and industry, but perhaps even more importantly, it 
adversely affects the quality of that water largely because of 
the toxins that are often occluded in these mountains where 
coal is ultimately contained. And that is the reason for the 
stream buffer rule because the mountain top mining became so 
pervasive, particularly in the Appalachia, that we were seeing 
a very substantial threat to the public health as well as a 
reduction of the water supply that was available.
    But I wanted to clarify some things. This rule, this stream 
buffer rule that was negated during the debate on H.R. 1. I 
think there were four different amendments on mountaintop 
mining. They were all successful, and so basically you cannot 
even go forward with the introductory process of putting 
together this rule. But this initial rule did not come out 
during the Reagan administration and it is basically product of 
the Bush administration, 2008, is it not?
    Mr. Pizarchik. The existing rule, the 2008 rule that came 
out under the previous administration, replaced a rule that had 
been enacted or adopted by the Reagan administration. That is 
correct. That was back in 1983.

                STREAM PROTECTION RULE: IMPACT OF H.R. 1

    Mr. Moran. Yeah, so neither administration had at least the 
reputation for being environmental extremists. That would be a 
fair statement. Tell us how you are going to deal with what 
H.R. 1 does if it were to be passed.
    Mr. Pizarchik. If H.R. 1 were to be enacted and passed, we 
obviously would have to comply with the law. We would follow 
the law and we would not be able, as I understand it, to expend 
any funds on the development or implementation of the stream 
protection rule making. So at that point, all efforts would 
stop. All the efforts to eliminate the pollution problems that 
you mentioned, as far as polluting the streams and causing 
pollution, would still continue. Those efforts would be 
impeded. There would not be opportunities to take advantage of 
the modern technologies that we know to do a better job of 
making sure the amount of excess spoil is minimized and the 
spoil is put back where it should have been.
    The extra efforts and refinements that we have in the 
process of developing and trying to do more source management 
to prevent the pollutants from being released from mining and 
going into the streams would still continue. That raises the 
specter that the companies who are generating those discharges 
and those contaminants, whether they are going to at some point 
in the future, have to begin treating those discharges. One 
recently occurred in a court case in West Virginia where 
selenium levels were being discharged and the court ordered the 
mining company to build a selenium treatment plant, a very, 
very expensive process.
    We will, in essence, be limited from taking proactive 
measures and refinements under our regulations to prevent 
discharges from happening. In some instances, for those 
operators who do not take proactive steps on their own and 
generate polluting discharges, those operators could be held 
liable. This could jeopardize their economic future as well, if 
discharges happen and they are not able to mine enough coal, to 
provide funds to pay for all those treatment costs in 
perpetuity.
    We could experience what happened in the context of acid 
mine drainage a decade or so ago. A lot of these companies went 
out of business and the cost of treating those perpetual 
discharges fell to the public and the government. So we would 
have to look at what we have in existing rules and see what 
tools are available. But I think our ability to do an effective 
job of striking a balance between protecting the public and 
society from the adverse effects of mining, while also making 
sure we have a viable coal industry to meet our country's 
energy needs, would be hindered.
    Mr. Moran. Well, I want to fully understand this. The law 
remains in place, the Clean Water Act, and so on. You want to 
issue a regulation that would govern where the mountaintops can 
be placed and how to keep the water clean. This is kind of 
preemptive, I guess, of what otherwise would be policy that 
would be determined in the judicial system, that people 
ultimately would sue and the courts would make these decisions, 
some of them nationally oriented, but many of them ad hoc.
    And the companies would pay to correct the problems if they 
that could. Many of them would find ways to go out of business, 
and then the public pays for the cleanup after the fact. So we 
are talking about an effort that was successful this month to 
take this proactive initiative out of the process and leave it 
to the courts to determine how to restore the quality of our 
water, drinking water. It is interesting, I think a bit ironic.

         STREAM PROTECTION RULE: IMPACT ON JOBS AND PRODUCTION

    Now, one of the arguments that was made, I recall, as we 
were in this debate, was that there were about 7,000 jobs that 
were going to be lost as a result of the stream buffer rule. 
But in looking at the ledger, even though that is what the coal 
mining companies say, it seems as though the production is not 
necessarily going down, and that it is possible that production 
can go up while jobs go down because of improved technology and 
so on, the mechanization of some of the processes.
    Is it possible that the coal companies are using the loss 
of jobs to achieve their efforts to eliminate regulation, to 
deregulate the process, but much of the loss of jobs is really 
due to the more modern processes of extraction?
    Mr. Pizarchik. Your question really touches on the point of 
advances in production. If you look at the trends in the number 
of jobs in the coal mining industry over the last decade or two 
decades, the number of people employed in mining coal has 
significantly dropped. It has been, in large part, due to 
mechanization, and improved efficiencies. There have been some 
other factors involved.
    For instance, out West in Wyoming, in the Powder River 
Basin the coal is much, much thicker. They do not have some of 
the hydrologic issues that we face in the eastern part of the 
country. And so it is a combination of improved mechanization 
and geologic advantages.
    And the numbers that you referenced on job loss, those 
numbers cannot be relied on. Some of the concerns that we had 
with the quality of the work product had to do with a wide 
variety of issues and the quality of the work produced by the 
contractor. Those numbers are not the Department of the 
Interior's numbers. Those numbers are not the Office of Surface 
Mining's numbers. In fact, we know now that those numbers were 
derived using some placeholders. So they have no value. And we 
have been working with the contractor, expressing our concerns 
to them, in order to get a quality product across the board 
that meets all of the requirements of NEPA and the regulations, 
and complies with the contract.
    Mr. Moran. Even though the numbers have been used in debate 
as though they had been verifiable and they are not. You 
mentioned Wyoming for example, and that is--I will use that as 
a segue because I understand that North Dakota, Wyoming, 
Montana, at least those three states' production is going to 
climb by as much as 15 percent because of what you are talking 
about, the type of coal and where it is gathered.
    Mr. Pizarchik. Actually I would not rely on those numbers 
either.
    Mr. Moran. Okay.
    Mr. Pizarchik. That was the first working draft from the 
contractor. You know, there was a lot of work that needed to be 
done at those times. As part of our effort to be more open and 
transparent, we were sharing those working drafts with 
cooperating agencies, many states, to get the benefit of their 
expertise and insight. And it was very unfortunate that those 
drafts, first draft documents, were weak and leaked. I do not 
believe that you can rely on any of those numbers.

         ABANDONED MINE LAND RECLAMATION: LEGISLATIVE PROPOSAL

    Mr. Moran. This is very helpful. Now, but I mentioned in 
the testimony that--and what I want to go back to is the 
difference is where coal mining is taking place and 
particularly in regard to the fee that is now collected to 
reclaim abandoned mines. The whole purpose of the fee was to 
restore these abandoned mines. It was unsafe. It was unhealthy. 
It left real scars on our environment, and much of that is 
along Appalachia. It is Virginia, Kentucky, West Virginia, et 
cetera.
    That is where the money was supposed to be spent, but since 
much of the fee is now being collected gathered in states that 
do not have or have very few abandoned mines, the money is now 
going to western states such as those I just mentioned. And 
they just dump it into their general fund basically because 
they do not have the need for it. But the need for it is in 
these areas where we have conducted mining operations for over 
100 years, and we have a situation that needs to be addressed. 
So you have a proposal within this budget to redirect those 
funds to achieve the intent of the abandoned mine land program, 
I gather. Could you elaborate a bit on that, Mr. Pizarchik?
    Mr. Pizarchik. Yes, Congressman Moran. You touched on a 
very important point. When the Surface Mining Act was 
originally put together, the formula on how the abandoned mine 
land fees that were collected on coal production were going to 
be distributed was based, in part, on where the production was 
occurring. And at that particular time, most of the production 
was occurring in the East, in a number of the states that you 
mentioned.
    Over the decades, as the easier-to-get coal was exhausted 
and no longer available, production started to drop somewhat in 
some of those eastern areas, not in all the states. But in 
addition to that, the resources that were available out in the 
Powder River Basin and places in the West became available. And 
to give an example, you have coal seams in the West that are 60 
or 70 feet thick. Nothing of that magnitude here in the East, 
and so the production shifted out West, which led to an 
increase in fee collection and distribution. The unintended 
consequence, I think, is a lot of money going to the areas 
which had certified they completed the reclamation of all their 
abandoned coal mine lands.
    And so the Administration's proposal is to refocus the 
funds to the abandoned coal problems and the original purpose 
of reclaiming them to deal with the highest priority, the most 
dangerous sites in the East and the West, wherever they are. It 
is just based on the history of the country and the history of 
mining. Most of those sites remain in a number of the eastern 
states that you had identified.

                         AML EMERGENCY FUNDING

    Mr. Moran. Thank you. You did cut that program by $8 
million though for emergency grants and projects. I just wanted 
to--and then I will conclude my question, but I did want to 
wrap up this aspect of it. Why do you think you justified in 
reducing the money for emergency grants?
    Mr. Pizarchik. Two aspects on that. First, we are proposing 
to reduce it as far as the discretionary appropriations. But 
the reason for that is due to the increase in a mandatory 
dispersements to the states.
    For example, as recently as 2007, the states received 
$145.3 million of abandoned mine land fees. In 2011, there has 
been $395.6 million available for distribution. So the view is 
that the increase, in mandatory distributions is more than 
enough to cover the AML emergencies in the particular states. 
And so some of the states we have been working with over the 
years have taken on that responsibility. In 2010, the states 
with AML programs, where OSM had been conducting the emergency 
program, were notified that they needed to take on the 
responsibility for addressing emergency projects themselves 
with their AML mandatory funds.
    That process, that transition process, has been pretty much 
completed. OSM provides technical assistance to the states as 
it always has. And under the Administration's proposal, out of 
the mandatory distributions that would be available in 2012, 
$313.8 million, some of those funds would be available to use 
for the emergencies wherever they occur. And whether it is in a 
certified state, an uncertified state, a state that does not 
have an AML program, the money would be available to take care 
of these projects. And the belief is that there are sufficient 
funds to take care of those emergencies out of the mandatory 
appropriation from the AML fund without having to use general 
treasury funds.
    Mr. Moran. Good answer. I just wanted to get that on the 
record. Thank you. And the policy certainly makes sense. You 
would think you would be able to save money in that area. Thank 
you.
    Mr. Pizarchik. Thank you.
    Mr. Moran. Thank you, Mr. Chairman.
    Mr. Simpson. Mr. Hinchey.

          EXPANSION AND ENHANCEMENT OF OVERSIGHT IN APPALACHIA

    Mr. Hinchey. Thank you very much, Mr. Chairman. And thank 
you very much for the work that you are doing. We know how 
important it is, and thank you for what you are talking about 
here today. I just wanted to ask you a simple question and 
follow up with what was just said by Mr. Moran.
    I understand that there is a budget request which contains 
an increase of $3.9 million for expansion and enhancement of 
federal oversight stream protections, and mostly in this 
particular case, it is going to be focused on the Appalachian 
system. So I wonder if you can--first of all, I think that that 
may be not nearly what is needed. But nevertheless, I 
appreciate that you are trying to get some additional funding 
to focus attention on this particular issue, but probably there 
is a lot more that could be done and a lot more money could be 
used for that operation.
    I wonder if you could tell us a little bit more about what 
the situation is in Appalachia, what are the kind of things 
that are you going to have to deal with there in overseeing 
this. We know how serious it is to some extent at least, and to 
whatever extent you are going to be focused on other areas 
outside of Appalachia that deal with this issue as well.
    Mr. Pizarchik. Thank you, Congressman Hinchey. When I took 
this job and started in November of 2009, we were in the 
process in the Office of Surface Mining of launching 
improvements to our oversight and conducting additional 
oversight in Appalachia to address, and try to prevent and 
minimize, the adverse impacts of coal mining. But we were 
looking at oversight nationwide. One of the underlying 
principles that Congress put in the Surface Mining Act is that 
we were to develop a nationwide program. So we have been trying 
to do oversight nationwide and maintain that as far as to make 
sure we have the appropriate amount of oversight inspections 
across the country.
    We recently developed and published final internal 
guidelines that sets forth the criteria to decide where we 
would do our oversight inspections and the percentages of 
oversight inspections, et cetera. And we had also increased our 
inspections by about 40 percent in that first year. In order to 
be able to increase since, we did not have any additional staff 
or resources, we refocused some of our efforts where we 
provided technical support and training to the states.
    Many of the states, like OSM, have a workforce that is 
reaching retirement age, and they are going to need to have new 
people come on board. The newer staff obviously need to have 
some type of training, and OSM provides the programmatic 
training to states, staff in cooperation with the states. So we 
need additional staff to continue to provide the necessary 
training and technical support to the states. Without it we 
would have a problem where we can end up with maybe more 
violations, more complaints, and more environmental problems 
without properly trained staff.
    The process of refocusing staff was not sustainable, so we 
are looking to increase our oversight folks so we can maintain 
the level of oversight that we conducted last year, as well as 
continue to provide the technical support and training to the 
states.
    Some of the things that we found during oversight is that 
there was an increase in the number of 10-day notices. Now, a 
10-day notice does not necessarily mean that there is a 
violation. It means that we have--if it came through a citizen 
complaint--that it appears to be the potential for a violation. 
Under the law, we provide a 10-day notice to the state 
regulatory authority, and they have 10 days to investigate and 
respond back to us--to give us all the facts, to let us know, 
since they have the primary responsibility, is there merit to 
the potential violation or not. And if there is a problem out 
there, then they have to address it.
    Some of the other things, areas where we know of an issue, 
is in one of the states in Appalachia. As part of our oversight 
improvements, we looked at the adequacy of the bonds. We found 
that about 80 percent of the bonds and mine sites that were 
forfeited did not have enough money to complete the reclamation 
as was contained in the operator's reclamation plan.
    So we are working with that state and developing a plan in 
order to make the improvements to the bonding program to meet 
the statutory requirements. Therefore, if there is a bond 
forfeiture, that the state has enough money to reclaim the land 
and put it back the way it was prior to mining.

                    OSM OVERSIGHT OF STATE PROGRAMS

    Mr. Hinchey. Well, the situation there in Appalachia is 
something that really has to be dealt with effectively, right? 
There are a lot of problems there.
    Mr. Pizarchik. Well, yes, there are problems. There are 
places for improvement. Most operators want to do the right 
thing and do a good job. Same way with most state regulatory 
authorities. Having formerly worked for a state regulatory 
authority, I know sometimes there are circumstances and 
environments that may not enable the regulatory authority to be 
able to do as effective a job as they want to do. And that is 
part of where OSM is responsible. We are required to do the 
oversight to make sure that the states who voluntarily took on 
the obligation to implement the law, that they do so and do so 
effectively. And sometimes there are parts where they will be 
doing an excellent job. Maybe economic circumstances change or 
there are other factors, and maybe there is a little slippage. 
And you have to make some improvements in specific areas.
    And so that is the role that OSM has had to play, and it 
varies a little bit depending on the circumstances. There has 
been a lot of improvement that has been made in Appalachia and 
a number of states. With the technology we have today and the 
science that we have today, we know there is still room for 
improvement and more things that we can do a better job at.

                        YOUTH ENGAGEMENT AT OSM

    Mr. Hinchey. Well, thanks very much. One of the interesting 
things that you are doing, a number of interesting things, is 
youth engagement and the enhancement of youth in the operation 
that you are engaged in. Could you just tell us a little bit 
about that, what you are doing, what the objectives are there, 
and what are you expecting to see happening in this context?
    Mr. Pizarchik. Sure, that is a very good point. A number of 
years ago, the Office of Surface Mining Reclamation Enforcement 
engaged in a partnership agreement with the Americorps and 
Volunteers in Service to America. We partnered with those folks 
to get youth involved who would make commitments and go into 
the communities that have been adversely affected by historic 
coal mining and work with citizens to help them understand the 
law, and some of the opportunities available for cleaning up 
their areas. This helps them deal with the abandoned mine 
issues or abandoned mine drainage and other things that have 
adverse social and economic impacts that the historic coal 
mining has left on their communities.
    Under that program, we provide part of the money. Our 
partners provide the other part of the money, and we had a 
couple hundred young adults working. They typically do about a 
year's internship. What we hope to accomplish in that 
particular area is getting more of the youth in America 
involved in dealing with some of the problems we have, both 
environmental and social problems, with the historic coal 
mining that has occurred. And with the expectation of helping 
to improve the environmental and the social conditions in those 
areas, as well as hopefully getting those people to consider a 
career in either government service or other environmental 
areas.
    In this past year, we had a former VISTA student that 
applied for and was hired as a Federal government employee. We 
also have added internships where we bring college students in 
during the summer to help in some areas where we do not have 
enough work to hire a full-time employee permanently. We also 
have students help with some of the mine mapping, and some of 
the IT work. Some of the youth are terrifically skilled in the 
information technology, the high tech area, and that has been 
very helpful.
    And part of what we were trying to do again is to bring 
more young people into the government. We are also coordinating 
these resources with the states who were having some fiscal 
difficulties, and where we could provide some services for the 
work that they needed to have completed.
    Mr. Hinchey. Thank you very much. I appreciate that. Thank 
you, Mr. Chairman.
    Mr. Simpson. Ms. McCollum.

                        MINING WITHIN 100 YARDS

    Ms. McCollum. Thank you, Mr. Chairman. I had more of a 
comment than I have a question. I was curious, having served on 
both an agriculture and a DNR committee that dealt with 
setbacks and everything, and we have mining and we have big ag 
and everything else, kind of like what--I did not want to just 
go from own memory, and looked at the guides that we have for 
shore mine management standards, and basically what I am 
seeing, whether it is the EPA or ag or whether it is the DNR 
on--whether it is mining, recreational, or development, it is 
about 100-yard setback minimum wherever I look through statute. 
And I know at one point in our state's history, there was none, 
and then it was 25, and then it was 100. And 100 is the 
minimum. In some areas where it is more fragile, it is higher. 
And that is about the length of this hall right here. That is 
all we are talking about, about the length of this hall out 
here for not piling things any closer to that where there is 
possible flood, water runoff, anything that is going to get 
into the water.
    So I wish you luck. I think it is common sense. I wanted to 
make sure that the federal government was not out there doing 
something really radical, really extreme, but it appears, and I 
did a quick look at some other states while I was sitting here, 
and it seems like any time that there is kind of water 
involved, it is going to be common sense, kind of prudent, that 
you create at least a hallway length of buffer between where 
you are piling things up, where you are digging, where you are 
building, and the water.
    So you are just kind of--are you looking at--is the 
contractor kind of looking at what is best practices, or 
supposed to be looking at was best practices?
    Mr. Pizarchik. There are a lot of things that the 
contractor was hired to look at--what the potential 
environmental impact would have been, and the overall 
environmental impact assessment. In November of 2009, we laid 
out some potential concepts in areas of how we thought maybe 
the regs should be improved and sought public input on that. As 
well, we asked the public for other suggestions.
    We took that information, and we prepared a number of 
alternatives. Under the National Environmental Policy Act, we 
have to look at what is our preferred alternative and some 
other reasonable alternatives and to have the contractor 
analyze those. Part of that is looking at other data and 
resources, information, and to figure out what else is 
available, what works, what does the science say, what does not 
work, et cetera. That information will be used to put together 
the environmental impact assessment to help me have the 
information to decide what OSM needs to put in the proposed 
rule that is being developed.
    Some of the things that we have that are a bit different 
that what you cited is that under the Surface Mining Act, it 
does not prohibit mining on streams. It anticipates that there 
will be some adverse impact on streams in the permit area. The 
practice for the past decades has been, in most states, to 
allow streams to be mined through, and then for reclamation to 
occur. The Surface Mining Act provides for mines to be designed 
to prevent material damage outside of the permit. When it comes 
to excess spoil in various steep slopes, what happens if you 
are in a very steep area, a mountainous area, when you break up 
all that rock, you cannot compact it and put it back as tightly 
as Mother Nature did. So you have more volume to deal with.
    So the law specifically allows for placement of excess 
spoil in certain areas. What we are trying to do with this rule 
that we are developing is to do a better job in striking the 
balance in protecting the environment, to minimize the adverse 
impacts on the streams, as well as to make sure we have enough 
coal to meet our country's energy needs.
    And one of the concepts we have that we are looking at 
leaves it up to the mine operator, let the company decide 
whether it wants to mine through that stream. But if it does 
so, the company would restore the stream's form and function. 
So that if you had a perennial stream with fish there before 
mining, complete the mining, then put a perennial stream with 
fish there after mining. That is something to look at, and it 
is a business decision. And if they think that they cannot do 
that and they choose to stay out of the stream, that is their 
prerogative.
    Some of the other ideas we are looking at developing is 
that if you are going to stay away from the stream, stay at 
least 100 feet away, that is what was in the '83 rule. Keep the 
buffer forest. We know that the forest does a better job of 
controlling the storm water runoff and pollution. If you are 
going to mine through a stream and restore it, then put a 
larger buffer in place because it is going to take a little 
while for those trees to get mature.
    So we are looking to try to craft an enhancement to provide 
more clarity, more certainty to the industry so it can do a 
better job of protecting streams. The approach is to let mining 
companies make a conscious business decision. Is it really 
worth risking this kind of environmental degradation or this 
kind of risk to my company for creating pollution?
    We are looking at trying to do a better job of handling the 
toxic materials so that you can keep the pollutants from 
leaving the site. We do not have the luxury of just drawing a 
line and saying you have to stay X feet away from every stream. 
The statute does not give us the authority to do that. We are 
working within the constraints. We have to do a better job to 
try to provide for that protection of the streams in what means 
we have available.

                              EIS CONTRACT

    Ms. McCollum. Thank you. I have a question on the 
contractor. We have somebody who sounds like they did not do 
the job that they were asked to do. So are we paying this 
person? Are we having to pay this person to redo the work? I 
was--Mr. Chair, I was on ledge branch when I found out we were 
paying for change orders for stuff that people should not have 
done in the first place because they were missing a piece, and 
they went ahead and knew that they had to redo the sprinklers, 
put the ceiling in, and then took the ceiling out to put the 
piece that they knew was missing in the sprinkler. So I mean 
and we paid for the change orders in most cases.
    What is going on with this person that could be a woman too 
so I will not say gentleman in billable hours and everything 
for us?
    Mr. Pizarchik. The contract that we have through the 
competitive selection process is a small business under the SBA 
guidelines. They have a number of subcontractors that work for 
them, and they have been producing a work product. We have a 
timeframe. As I indicated earlier, we had some concerns, as 
others did, with the quality of the work. So we provided them 
comments back and an opportunity to correct the problems.
    With the cure letter that we had sent out and with the work 
product that was coming in on the 23rd, there were some other 
things that were scheduled to occur after that time period. For 
instance, under the National Environmental Policy Act, when you 
have the draft Environmental Impact Statement, that needs to be 
published for public comment. And you need to have hearings. We 
have asked the contractor to do no further work on scheduling 
those hearings because we wanted to make sure we actually had a 
draft document available that we could publish.
    Ms. McCollum. Well, I understand that, but the contractor 
is going to have to go back and redo the work. Is that--and 
causing great inconvenience and, you know, a PR problem for 
you. Is this individual having--is this individual, you know, 
reclaiming, you know, hours or asking for more money, or is 
this person expected to do the job right the second time with 
the amount of money they were given the first time?
    Mr. Pizarchik. When we provided the cure letter to them 
that outlined our concerns in the areas where we thought that 
the quality of the work did not meet the contract requirements, 
we did that with the expectation that they would provide us a 
contract compliant work product with the same funds that they 
had already received without additional funds.
    Right now, we are still in the process of reviewing that 
work product, and I do not know what the future holds yet 
because we have not completed that review. When that review is 
completed, I will be sitting down with my staff to hear what 
they have found. And based on that information, we will decide 
what makes the most sense and the best way to proceed.
    Ms. McCollum. So if you suspend a contract, let us say--I 
am not saying you are going to, but if you were to suspend the 
contract, does the contractor get paid in full because you have 
to go back, you have to reissue? This has been a PR disaster 
for you with everything that I am hearing floating around in 
Congress. I mean is this individual held responsible in any 
way, shape, or form?
    Mr. Pizarchik. The contract we have is for a lump sum for 
the total product, and there was a time period for it to go on 
through, and I believe we were scheduled to, under the plan, 
have the final environmental impact statement in December 2011. 
I cannot remember the exact date on that, but we have a 
progress schedule where, as they were progressing, we were 
making scheduled payments.
    And as I understand it from talking to our contract 
lawyers, if the situation leads to where there is a termination 
of the relationship, that the additional payments would not be 
due to the contractor. It can get pretty complicated. You can 
get into litigation. From our view, we hired a contractor to 
provide us with an environmental impact statement that complied 
with the contract, the National Environmental Policy Act, the 
regulations. And that is what we expect to get for the money 
that we paid.
    Ms. McCollum. Thank you.
    Mr. Pizarchik. You are welcome.
    Mr. Simpson. It has been my experience that we have a 
tendency to agree with that science that supports our 
preconceived ideas and disagree as bad science as science which 
conflicts with our preexisting beliefs. The same is true of 
studies. There have been a number of people who have said that 
the reason this contractor is not complying or is said is not 
complying or has produced a bad work product is because you did 
not like the results of what they were doing. Not saying that 
is true or not, but there is that argument out there also.
    I would be interested at some point in time in a probably 
more private setting to sit down and talk about what exactly it 
was in the work compliance that OSM and DOI disagreed with in 
what they were doing because there is that argument out there 
that it is just, you know, you did not like the results, so it 
was a bad work product. Not saying that is true at all. Not 
even suggesting it, but a couple of questions I need to ask.

                        STATE REGULATORY GRANTS

    In 2010, the budget fully reflected the 50 percent federal 
match for the state regulatory programs for the first time. The 
administration is again proposing to fall short of the 50 
percent commitment in 2012 and shift a greater share of the 
cost of the regulation onto industry via the state fees. The 
administration indicates that OSM would work with the states to 
raise their permitting fees to cover a greater share of their 
costs.
    We noted at last year's hearing that additional fee 
increases was not likely to be a politically viable option for 
some states. How many states have enacted fee increases since 
the proposal was announced last year? And have you conducted a 
full analysis of the administrative rulemaking complexities 
inherent in such an undertaking?
    And along those same lines, to what degree would states 
need to increase their fees in order to recoup the loss of the 
$11 million in grants that the 2012 budget proposes to cut from 
the 2010 level? And could you provide for the record a table of 
existing fees, fee levels by states, and the percentage of 
increase that each state would need to enact in order to recoup 
the loss of the federal grants to the states?
    Mr. Pizarchik. Thank you, Chairman Simpson. There are a lot 
of questions in there. I may have to circle back to you on some 
of those that I do not answer. It is my recollection that there 
was one or two states that have enacted some type of a fee 
increase that we processed since last year on this. Most of 
them have not, and as far as getting together with the states, 
we have been working with the Interstate Mining Compact 
Commission to gather data to get a better idea of what is the 
status, what type of fees are being charged or collected in 
each state.
    It is my understanding that there is a great deal of 
variety out there and variation. And we do not have a handle on 
that yet. We did receive some input from the states on the 
development of the questionnaire, and we have the hopes that we 
will be able to get that out to the states and that they will 
respond to that to help provide the information that we would 
need in that particular area.
    In regards to how much money the states get and the fees 
and how much they are collecting, our understanding, based on 
some prior information that we had gathered, that of the 24 
states that receive grants, 20 states collect some type of 
permit fees. The percentage of the fee that they recover varies 
widely. Some of them as much as 50 percent of the cost of the 
program. Some of them as low as around 1 percent, and we also 
know that in some states, the regulatory authority cannot 
adjust a fee, that it must go through the state legislature.
    And we know that those things can take time, and there can 
be a lot of other factors involved, particularly in these 
difficult budget times. In working with the states after our 
hearing last year on this, we sat down with the states and 
talked to them. And a lot of them expressed concerns about 
whether they would be able to get those type of fee increases 
and asked OSM to do it. And so we--part of our charge at OSM is 
to provide assistance to the states--are willing to explore and 
work with the States and if necessary, to promulgate a 
regulation or request legislation to collect the fee on their 
behalf.
    We cannot do the job without them, and we need to work 
together. And if they have some type of impediment, maybe we 
can work together to address that. So we are exploring those 
possibilities as to how to get there.
    Regarding how much money will be needed, whether that $11 
million needs to be entirely made up. Some of that will depend 
on the states themselves, what type of income they have. If 
they do not need the amount of money that they have indicated 
in their preliminary grant requests, the $11 million may not 
actually be $11 million that they need. It might be something 
less than that. If we have carryover funds--we do not know that 
until we get to the end of the year--we have the two-year 
appropriation for those. And we will use the carryover funds 
from the previous Title V year grant to make it available to 
the states to help address those issues as well.
    So we have some tools available to us. We do not know 
exactly how that will all end. Another aspect of it is under 
our existing regulations, it provides that should we not have 
enough money to give every state 50 percent of their cost of 
their program, that the amount of money that we do have would 
be prorated among the states. So that each of them would 
equally share a corresponding reduction and not any one state 
would suffer the burden of carrying a larger reduction in fees 
than the other ones.
    Did I miss any?
    Mr. Simpson. No, that pretty much covers it. There was one 
other question that I wanted to ask, and I am fairly certain I 
know where it is but maybe not. Mrs. Lummis, did you have some?
    Mrs. Lummis. Thank you, Mr. Chairman. I will stall for a 
minute while you look.
    Mr. Simpson. Okay, thank you.

                               AML FUNDS

    Mrs. Lummis. Actually I do not have a question. I do have 
an observation. It is about AML. I understand that subject has 
come up in my absence while I was at other hearings. Under 
SMCRA, the state of Wyoming and any other state that has coal 
production, is entitled to its share under the law of that 
money. And that money belongs to my state. It does not belong 
to the federal government, and so that is--it is just clear. It 
is in the law.
    Now there are some laws that people do not like. Apparently 
the president does not like the Defense of Marriage Act law, 
and he is not going to enforce it. But that does not mean it is 
not the law. That is that way with AML, you know. So now I 
would strongly encourage you to also visit with Congressman 
Rahall of West Virginia because my predecessors, between 
Wyoming and West Virginia delegations, negotiated an 
arrangement which allowed the interest income off those monies 
to be used to resolve the problem of the United Mine Workers 
Combined Benefits Fund and to ensure that those orphaned miners 
whose mines went out of business and could no longer pay, to 
make sure they had benefits to which they were entitled. It 
provided that source of funds.
    And as a successor to that agreement that was made by my 
successor with Congressman Rahall and others from West 
Virginia, I am going to honor that agreement, and to his great 
credit, so is Congressman Rahall. So I encourage you to look at 
the history here and as discussions about AML occur, I think 
there is a history that is worth revisiting. Thanks, Mr. 
Chairman.
    Mr. Pizarchik. If I may. Thank you, Congresswoman Lummis. 
As far as the president and this office following the law, we 
have done that. We will continue to do so. We made a proposal 
last year, as I am sure you are aware, to reduce or eliminate 
funding to your state or any other state who certified they 
completed reclamation. That was not enacted by Congress, and 
earlier this year, for the 2011 budget, the mandatory 
distribution funds were made available. We are implementing the 
law.
    I understand there is a history there. There is also 
history that we discussed earlier when you were not here that 
the original purpose was to try to get the worst of the 
abandoned mine lands cleaned up, and the original formula was 
based upon where coal production was occurring at that time. 
Things have changed which lead to some of the statutory 
changes. The most recent were the 2006 amendments. I appreciate 
your view that it was your money. Just like you, I was not here 
for those discussions. And for whatever reason, all that money 
was not appropriated at that time, and that led to the 2006 
amendments and the compromises that were struck at that point 
in time.
    We are in some very difficult budget times right now, and, 
you know, the money that would be going to Wyoming is coming 
out of the general treasury fund. And, you know, that is one of 
the reasons why we are looking at proposing it is to reduce the 
amount of the deficit we have, recognizing that there was a lot 
of history behind the issue.
    But again, we are trying to deal with the situation that we 
have today, and we do know that it requires statutory changes. 
We are working on putting that information together for 
consideration later this year.
    Mrs. Lummis. Thanks, Mr. Chairman. Thank you for that 
discussion, and did I stall long enough?
    Mr. Simpson. Yes, I found it.
    Mrs. Lummis. Thank you.

                          FEDERAL PERMIT FEES

    Mr. Simpson. Thank you. Last question. The budget proposes 
to permanently allow OSM to retain and use up to $40,000 in 
coal mine permit applications and renewal fees which are 
currently collected and deposited in the general fund. These 
offsetting collections would reduce the appropriated amount by 
the amounts collected as collections roll in. How much was 
collected in 2009 and 2010?
    Mr. Pizarchik. I do not have those numbers at my fingertip. 
My budget officer tells me that they have been averaging about 
$40,000 a year.
    Mr. Simpson. Total?
    Mr. Pizarchik. Yes, and to give you an idea of cost 
recovery, it is about a couple of percent of our actual cost, 
and earlier we had mentioned that we were encouraging the 
states to recover more of the costs. We are looking at the same 
for ourselves. We started this past year by putting the 
infrastructure together, the coding together, information to be 
able to track our actual costs. Our intention is to do the same 
thing for the Federal programs that we are asking the states to 
do, to recover more of those costs for the services that are 
provided to the industry.
    Mr. Simpson. Thank you for being here today and 
participating in this hearing. We look forward to working with 
you as we put together your 2012 budget.
    Mr. Pizarchik. You are welcome, and you had mentioned about 
wanting to get together. I am available to get together to meet 
individually with any member who would like more information. I 
would be happy to do so.
    Mr. Simpson. We will do that.
    Mr. Pizarchik. Thank you very much.

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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Abbey, Robert....................................................   763
Bennett, Barbara.................................................   247
Elkins, A. A., Jr................................................   149
Hayes, David.....................................................   547
Haze, Pamela.....................................................   547
Jackson, L. P....................................................   247
Jarvis, Jonathan.................................................   707
Kendall, Mary....................................................     1
Mittal, Anu......................................................     1
Mouritsen, Karen.................................................   763
Najjum, Wade.....................................................   149
O'Dell, Margaret ``Peggy''.......................................   707
Owens, G. H......................................................   855
Pizarchik, Joseph................................................   855
Rusco, Frank.....................................................     1
Salazar, Hon. Ken................................................   547
Sheaffer, Bruce..................................................   707
Stokes, R. E.....................................................   855
Trimble, David...................................................   149


                               I N D E X

                              ----------                              --
--------

       Subcommittee on Interior, Environment and Related Agencies
                     2012 Volume 6--Hearing Indices
     Major Management Challenges at the Department of the Interior
                            March 1, 9:30 AM

                                                                   Page
Acquisition Management...........................................    46
BIA Alaska Reservation Roads Program.............................   119
BIA Detention Facilities.........................................   118
Biography: Anu K. Mittal.........................................    44
Biography: Frank Rusco...........................................    44
Biography: Mary Kendall..........................................    54
Communications Coordination......................................    61
Cross-Department Coordination....................................    62
Environmental Stewardship vs. Oil and Gas Development............    94
Financial Assistance.............................................46, 70
Financial Management.............................................    45
Fort Peck Tribal Credit Program..................................   119
Grants, Cooperative Agreements...................................    70
Health, Safety, and Maintenance..................................    45
Human Capital Deficiencies in Oil and Gas Management............90, 128
Indian Funds: Mismanagement......................................    72
Indian Lands: Fractionation......................................    73
Indian Trust Responsibilities....................................    74
Indians and Insular Areas........................................    46
Information Sharing..............................................    60
Information Technology...........................................45, 60
Interior's Oil and Gas Management on the Feb. 2011 Government 
  Wide High Risk List...........................................87, 125
Lease Price Thresholds...........................................    67
Non-Responsiveness...............................................   120
Oil and Gas Revenues.............................................56, 63
Onshore Revenue Collection: Challenges...........................    75
Opening Remarks: Chairman Simpson................................     1
Opening Remarks: Ms. McCollum....................................     2
Outer Continental Shelf Oversight................................    45
Past GAO Recommendations.........................................    55
Questions for DOI IG from Chairman Simpson.......................   114
Questions for DOI IG from Mr. Cole...............................   142
Questions for DOI IG from Mr. Flake..............................   143
Questions for DOI IG from Mr. Moran..............................   125
Questions for GAO from Chairman Simpson..........................    81
Questions for GAO from Mr. Cole..................................   106
Questions for GAO from Mr. Flake.................................   110
Questions for GAO from Mr. Moran.................................    87
Questions for the Record: DOI IG.................................   114
Questions for the Record: GAO....................................    81
Recruitment and Retention........................................    60
Reducing Interior's Deferred Maintenance Backlog................99, 133
Reorganization of Former MMS and Similar Needs at BLM...........92, 130
Resource Protection.........................................46, 99, 134
Revenue Collections..........................................45, 75, 95
Revenue Sources: Additional......................................    65
Seldovia Ferry...................................................   120
Strengthening Accountability of Indian and Insular Area Program103, 135
Summit Lake Paiute Tribe Fisheries (SLPT)........................   120
Testimony of Acting DOI Inspector General Mary Kendall...........    45
Testimony of GAO Directors Anu K. Mittal & Frank Rusco...........     3
Togiak Roads, LLC................................................   119

   Major Management Challenges at the Environmental Protection Agency
                            March 2, 9:30 AM

Biography: Arthur Elkins, Jr.....................................   201
Biography: David Trimble.........................................   189
Chesapeake Bay...................................................   203
Cyber Security.................................................211, 242
Data: Collection and Reporting.................................204, 236
Delegations to States............................................   206
Endocrine Disruptors.............................................   213
Inspector General Act............................................   209
Nanotechnology...................................................   213
National Environmental Policy....................................   234
Opening Remarks: Chairman Simpson................................   149
Opening Remarks: Mr. Moran.......................................   149
Questions for DOI IG from Chairman Simpson.......................   234
Questions for DOI IG from Mr. Moran..............................   245
Questions for GAO from Chairman Simpson..........................   216
Questions for GAO from Mr. Moran.................................   227
Questions for the Record: DOI IG.................................   234
Questions for the Record: GAO....................................   216
Superfund........................................................   238
Superfund: Special Accounts......................................   240
Testimony of EPA Inspector General Arthur Elkins, Jr.............   190
Testimony of GAO Acting Director David Trimble...................   151
Toxic Substances Control Act...................................202, 241
Water Infrastructure.............................................   235
Water Infrastructure: Clean Water and Drinking Water.............   245
Water Infrastructure: Green......................................   209
Water Nutrients..................................................   203

     Environmental Protection Agency FY12 Budget Oversight Hearing
                            March 3, 9:30 AM

Air Permits in Alaska's Outer Continental Shelf..................   454
Air Quality.....................................273, 275, 289, 295, 436
Appalachian Surface Coal Mining Permits..........................   269
Arsenic/Phosphorus...............................................   326
Assistance to States and Locals..................................   429
Assisting Small Water Systems....................................   284
Bed Bugs.........................................................   416
Biography: Barbara Bennett.......................................   263
Biography: Lisa Jackson..........................................   262
BioMass..........................................................   428
Boiler MACT Rule.................................................   458
Carbon Capture and Storage.......................................   358
Chemical Safety................................................260, 282
Chesapeake Bay............................................268, 338, 422
Clean up of DOD Superfund Sites..................................   424
Clean Water Act...........................................300, 271, 435
Clean Water and Drinking Water Infrastructure....................   425
Coal Combustion Ash..............................................   349
Coal-Fired Power Plant...........................................   283
Comprehensive Environmental Response, Compensation, and Liability 
  Act (CERCLA)...................................................   459
Construction Effluent Limitation.................................   536
Criteria for Regulatory Changes..................................   293
Delay of Mandatory Reporting to the Greenhouse Gas Registry......   324
Desert Rock Energy Facility......................................   450
Diesel Emissions Reduction Program........................280, 325, 438
Draft Pesticide Registration Notice 2010-X.......................   442
Economic Impact of Regulations...................................   426
E-Manifest User Fees.............................................   364
Endocrine Disruptor..............................................   283
Energy Star: Verifications and User Fees.........................   365
Enforcement: Common Sense......................................330, 433
Environmental Permitting.........................................   440
EPA and States Roles.............................................   294
EPA Budget.....................................................282, 295
EPA IRIS Assessment of Halogenated Platinum Compounds............   367
EPA IRIS Assessment of Inorganic Arsenic.........................   374
EPA Personnel and FTE............................................   409
EPA Priorities...................................................   294
EPA Research.....................................................   294
EPA Rural Water Systems Budget...................................   304
EPA Workforce....................................................   265
Ethanol/E15......................................................   528
Ethanol/Renewable Fuels Standard.................................   353
Fill Rule........................................................   348
Fly Ash or Coal Ash Regulation...................................   297
FSMP.............................................................   415
Funding Restrictions.............................................   301
General Budget: Operating Plan...................................   415
Great Lakes...............................................336, 338, 538
Green Infrastructure.............................................   394
Greenhouse Gases..........................................299, 309, 422
H.R. 1 Amendments................................................   264
High Unobligated Balances........................................   311
High Unspent Balances: Recovery Act..............................   312
Homeland Security................................................   406
Hydraulic Fracturing.............276, 277, 293, 355, 430, 452, 461, 469
Information Technology...........................................   390
Lead Paint in Commercial Buildings...............................   530
Limiting Greenhouse Gas Emissions................................   300
Maintaining a Strong Science Foundation..........................   261
Maximum Achievable Control Technology............................   304
Milk Regulation..................................................   335
Misleading Pesticide Product Brand Names.........................   296
Mississippi River Basin........................................350, 431
Mobile Source Fees Program.......................................   363
Multi-Media Tribal Implementation Grants Complement Gap Grants...   430
National Environmental Policy Act................................   280
Natural Gas......................................................   468
Navigable Waters...............................................265, 314
New York Times Article...........................................   302
NSR Rule for Indian Country......................................   449
Oil Spill........................................................   333
Opening Remarks: Chairman Simpson................................   247
Opening Remarks: Mr. Moran.......................................   249
Opening Remarks: Mr. Rogers......................................   250
Ozone Standard...................................................   379
Permitting Guidance..............................................   270
Pesticide NPDES Permits..........................................   318
Pesticide Registration and Reregistration........................   391
PM Research Centers..............................................   385
Polychlorinated Biphenyls........................................   286
Portland Cement and Boiler MACT Regulations......................   328
President Obama's January 18, 2011, Executive Order..............   293
Puget Sound......................................................   272
Questions for the Record.........................................   309
Questions from Chairman Simpson..................................   309
Questions from Mr. Calvert.......................................   436
Questions from Mr. Cole..........................................   447
Questions from Mr. Hinchey.......................................   461
Questions from Mr. LaTourette....................................   442
Questions from Mr. Moran.........................................   422
Questions from Mr. Rogers........................................   435
Questions from Mr. Flake.........................................   528
Questions from Ms. Kaptur........................................   538
Questions from Ms. Lummis........................................   454
Regulation.................................284, 292, 306, 367, 447, 454
Reports to Congress on Lead and Stormwater.......................   532
Rescission.....................................................406, 431
Rule: Cost Benefit Analysis......................................   267
Science Advisory Council.........................................   290
Spill--Seneca Nation of Indians..................................   453
Spill Prevention and Counter Measure Program.....................   288
Spray Drift......................................................   321
Spruce Mine Permit...............................................   348
STAR Grants......................................................   387
State Air Grants.................................................   399
State Revolving Funds (SRFs)..............................313, 316, 266
Stormwater.....................................................319, 529
Superfund............................................359, 361, 392, 430
Supporting Healthy Communities...................................   260
Testimony of Administrator Jackson...............................   253
Tightening Air Quality Standards for Ozone.......................   534
Title 42.........................................................   382
Toxic Substances Control Act.....................................   432
Tribal Grants....................................................   402
Unobligated Funds................................................   266
Urban Rivers Initiative..........................................   351
US-Mexico Border Grants..........................................   405
Wastewater Discharge Permit PA--0026825..........................   461
Wastewater Utilities.............................................   443
Water Infrastructure.............................................   322
Waters Pollution.................................................   423
Wetlands.........................................................   534

        Department of the Interior FY12 Budget Oversight Hearing
                            March 8, 1:00 PM

2012 Budget......................................................   552
2012 Funding.....................................................   600
Alaska Oil Drilling..............................................   617
American Recovery and Reinvestment Act (ARRA)....................   670
America's Great Outdoors.......................................580, 650
Biography of Deputy Secretary David Hayes........................   574
Biography of Pamela K. Haze......................................   575
Biography of Secretary Ken Salazar...............................   572
BLM Draft Solar PEIS.............................................   681
BOEMRE Reorganization............................................   576
Budget Cuts......................................................   552
Bureau of Indian Education Schools...............................   590
California Water Issues..........................................   688
Climate Change...................................................   652
Climate Change Coordination......................................   618
Cobell...........................................................   584
Conservation...................................................554, 629
Continuing Resolutions and Management Difficulties...............   642
Costs of Endangered Species Act Implementation...................   604
Delisting of the Northern Rockies Wolves.........................   585
EAJA.............................................................   621
Employee Retention...............................................   578
Energy...........................................................   553
Energy Management On-Shore.......................................   647
Everglades Restoration...........................................   627
FCC Towers & Potential GPS Interference..........................   693
Gas Prices.......................................................   592
Generating Other Revenue Collections and Enhancing Financial 
  Assurances and Bonds...........................................   664
Goals for Domestic Energy Production.............................   613
Grazing Permits..................................................   622
House Resolution 1.............................................578, 640
Hydraulic Fracturing...........................................595, 598
Idaho Bull Trout Decision........................................   623
Indian Country, Cobell and Needs at BIA..........................   655
In-Holdings......................................................   580
Land Acquisition/PILT............................................   630
Land and Water Conservation Fund.................................   611
Land Into Trust..................................................   599
Legislative Proposals on Abandoned Mine Land Reclamation, 
  Hardrock
  Mining, and Non-Producing Oil and Gas Leases...................   662
Litigation Costs.................................................   609
LWCF--California Desert..........................................   678
LWCF/Federal Land Acquisition....................................   619
Mitigation Costs.................................................   703
Multi-Species Habitat Conservation Plans.......................594, 690
National Mall Needs and Options..................................   659
Non-Producing Fee Proposal.......................................   616
Ocean Energy and BP Spill and Future Funding Needs...............   643
Oil and Gas Development..........................................   607
Oil and Gas Royalties............................................   597
Oil and Gas Royalty Collection...................................   614
Oil Spills.......................................................   576
Opening Comments by Congressman Lewis............................   587
Opening Remarks of Chairman Simpson..............................   547
Opening Remarks of Congressman Dicks.............................   550
Opening Remarks of Congressman Moran.............................   548
Opening Remarks of Secretary Salazar.............................   551
Permitting.......................................................   578
Questions for the Record from Chairman Simpson...................   613
Questions for the Record from Congressman Calvert................   683
Questions for the Record from Congressman Cole...................   698
Questions for the Record from Congressman Flake..................   703
Questions for the Record from Congressman LaTourette.............   697
Questions for the Record from Congressman Lewis..................   676
Questions for the Record from Ranking Member Moran...............   640
Raising Fees on Onshore and Offshore Oil and Gas Producers.......   615
Reducing Interior's Deferred Maintenance Backlog.................   669
Renewable Energy and Strengthening Resource Protection...........   666
Renewable Energy Projects........................................   680
Reprogramming from State Regulatory Grants.......................   583
Riverside County Habitat Conservation............................   696
Rocky Mountain Wolves..........................................605, 609
Royalties......................................................577, 592
Santa Ana Sucker.................................................   588
Southwest Border.................................................   601
Southwest Border Mitigation......................................   603
Stove Piping.....................................................   587
Stream Protection Zone Rule......................................   581
Strengthening Accountability of Insular Area Programs............   660
Uranium........................................................608, 704
Water.................................................... 554, 588, 593
Water Rights.....................................................   600
Wild Horse and Burros............................................   624
Wild Horses......................................................   654
Wild Lands...........................................579, 596, 606, 617
Wildfire and Cohesive Strategy...................................   669
Wildland Fire Center.............................................   639
Wildland Fire Cohesive Strategy..................................   626

          National Park Service FY12 Budget Oversight Hearing
                            March 9, 9:30 AM

Administrative Cost Savings and Management Savings...............   759
American Recovery and Reinvestment Act...........................   749
America's Great Outdoors.......................................742, 744
Biography of C. Bruce Sheaffer...................................   721
Biography of Jonathan B. Jarvis..................................   719
Biography of Margaret O'Dell.....................................   720
Chesapeake Bay Ecosystem Stewardship.............................   749
Civil War 150th Anniversary......................................   754
Climate Change...................................................   751
Continuing Resolutions and Management Difficulties...............   741
Cultural Resources...............................................   756
Deferred Maintenance.............................................   723
Deferred Maintenance Backlog.....................................   722
Energy Efficiency................................................   736
Everglades Restoration...........................................   737
Ford's Theatre-Peterson House....................................   734
Government Shutdown..............................................   732
Grand Teton National Park Concessioners..........................   761
Gulf of Mexico and BP Transocean Deepwater Horizon Disaster......   758
House Resolution 1...............................................   740
Land Acquisition.................................................   728
Land Acquisition and State Assistance..........................722, 724
Management Efficiencies..........................................   724
National Mall..................................................725, 731
National Mall Needs and Options..................................   746
National Parks in New York City Area.............................   732
NPS Centennial...................................................   737
Opening Remarks of Chairman Simpson..............................   707
Opening Remarks of Congressman Moran.............................   707
Opening Remarks of Director Jarvis...............................   708
Park Operations................................................733, 745
Park Police and Security.........................................   757
Partnerships.....................................................   734
Program Elimination..............................................   723
Questions for the Record from Chairman Simpson...................   737
Questions for the Record from Congressman Calvert................   760
Questions for the Record from Congresswoman Lummis...............   761
Questions for the Record from Ranking Member Moran...............   740
Reducing Deferred Maintenance Backlog............................   750
Save America's Treasures Grants...........................728, 731, 747
St. Croix National Scenic River..................................   729
Territories....................................................731, 733
Tropical Forests.................................................   733
Yosemite Staffing................................................   760
Youth in the Great Outdoors Initiative...........................   755

        Bureau of Land Management FY12 Budget Oversight Hearing
                           March 10, 9:30 AM

America's Great Outdoors.........................................   849
Applications for Permits to Drill................................   788
Biography of Director Robert Abbey...............................   777
Biography of Karen Mouritsen.....................................   778
BLM Staffing.....................................................   808
Continuing Resolutions and Management Difficulties...............   822
Equal Access to Justice Act......................................   790
Fee on Non-Producing Leases....................................789, 793
Grazing--Jarbridge Permits.......................................   783
Grazing--Permit Backlog..........................................   784
Grazing Permits..................................................   801
Hardrock Mining Administrative Notices Under NEPA................   819
House Resolution 1...............................................   821
Hydraulic Fracturing.............................................   793
Impact of H.R. 1.................................................   780
Land Acquisition...............................................809, 852
Merging Forestry and Range Programs..............................   809
National Landscape Conservation System (NLCS)..................814, 844
National Landscape Conservation System Spending..................   852
New BLM Wild Lands Policy (Secretarial Order #3310)..............   846
Northwest Forest Plan--Survey and Manage.........................   811
Office of Wildland Fire..........................................   804
Off-Road Racing..................................................   785
Oil & Gas........................................................   816
Oil and Gas Development..........................................   793
Oil and Gas Inspection Fees and Legislative Proposals............   842
Oil and Gas Royalty Rate Reform and Disclosure of Fracking 
  Chemicals......................................................   782
Oil, Gas and Coal Management.....................................   825
Opening Remarks of Chairman Simpson..............................   763
Opening Remarks of Congressman Moran.............................   764
Questions for the Record from Chairman Simpson...................   801
Questions for the Record from Congressman Flake..................   852
Questions for the Record from Ranking Member Moran...............   821
Rapid Ecoregional Assessments (REA)..............................   811
Renewable Energy...............................................779, 847
Renewable Energy Development on Public Lands.....................   815
Shifting Inspection Costs........................................   779
Soda Ash.........................................................   792
Testimony of Mr. Abbey...........................................   765
Timber Sales.....................................................   810
Travel Management Plans..........................................   810
Uranium Production...............................................   791
Wild Horse and Burro Management...........................780, 782, 791
Wild Horse and Burro Program.....................................   805
Wild Horses, Changing Management Emphasis........................   823
Wild Lands Policy..............................................796, 808

         Office of Surface Mining FY12 Budget Oversight Hearing
                           March 10, 11:00 AM

2008 Stream Buffer Rule..........................................   871
2010 Memorandum of Understanding.................................   870
Abandoned Mine Land Reclamation Fund.............................   903
Abandoned Mine Land Reclamation: Legislative Proposal............   876
AML Emergency Funding............................................   877
AML Emergency Program..........................................891, 911
AML Funds........................................................   886
Authority to Retain and Use Permit Fee Collections...............   891
Biography of Glenda H. Owens.....................................   867
Biography of Joseph Pizarchik....................................   866
Biography of Ruth E. Stokes......................................   868
Coal Mining Permit Process.......................................   869
Cumulative Hydrologic Impact Assessment..........................   871
EIS Contract...................................................872, 882
Expansion and Enhancement of Oversight in Appalachia.............   878
Federal Permit Fees..............................................   887
Future Legislative Proposal to Focus Reclamation.................   898
House Resolution 1...............................................   895
Legislative Proposal--Competitive Grant Approach.................   913
Legislative Proposal: Competitive Selection Process for Abandoned 
  Mine Land Reclamation Funds....................................   893
Legislative Proposal: Elimination of Payments to Certified States   892
Material Damage Outside Permit Area..............................   871
Mining Within 100 Yards..........................................   881
Opening Statement of Chairman Simpson............................   855
Opening Statement of Congressman Moran...........................   855
OSM Oversight of State Programs..................................   879
Permit Coordination in Tennessee.................................   869
Permit Fee.......................................................   904
Questions for the Record from Chairman Simpson...................   888
Questions for the Record from Committee Chairman Rogers..........   911
Questions for the Record from Congressman Flake..................   913
Questions for the Record from Congressman Moran..................   895
Regulation and Technology Program Increase for Environmental 
  Improvements...................................................   903
Regulatory Grants................................................   888
SMCRA............................................................   906
State Regulatory Grants..........................................   884
State Regulatory Program Reduction...............................   900
Stream Protection Rule Schedule..................................   873
Stream Protection Rule: Environmental Impact Statement...........   872
Stream Protection Rule: Impact of H.R. 1.........................   874
Stream Protection Rule: Impact on Jobs and Production............   875
Stream Protection Rule: Need.....................................   874
Ten Day Notice of SMCRA Permits..................................   912
Testimony of Director Pizarchik..................................   856
Youth Engagement at OSM..........................................   880

                                  
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