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



 
 JOBS AT RISK: WASTE AND MISMANAGEMENT BY THE OBAMA ADMINISTRATION IN 
                 REWRITING THE STREAM BUFFER ZONE RULE

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



                           OVERSIGHT HEARING

                               before the

                       SUBCOMMITTEE ON ENERGY AND

                           MINERAL RESOURCES

                                 of the

                     COMMITTEE ON NATURAL RESOURCES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                        Friday, November 4, 2011

                               __________

                           Serial No. 112-82

                               __________

       Printed for the use of the Committee on Natural Resources



         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov




                  U.S. GOVERNMENT PRINTING OFFICE
71-120                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001




                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Jon Runyan, NJ
Bill Johnson, OH
Mark Amodei, NV

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                       DOUG LAMBORN, CO, Chairman
               RUSH D. HOLT, NJ, Ranking Democrat Member

Louie Gohmert, TX                    Peter A. DeFazio, OR
Paul C. Broun, GA                    Madeleine Z. Bordallo, GU
John Fleming, LA                     Jim Costa, CA
Mike Coffman, CO                     Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Dan Benishek, MI                         CNMI
David Rivera, FL                     Martin Heinrich, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Paul A. Gosar, AZ                    Betty Sutton, OH
Bill Flores, TX                      Niki Tsongas, MA
Jeffrey M. Landry, LA                Vacancy
Bill Johnson, OH                     Edward J. Markey, MA, ex officio
Doc Hastings, WA, ex officio
                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Friday, November 4, 2011.........................     1

Statement of Members:
    Holt, Hon. Rush D., a Representative in Congress from the 
      State of New Jersey........................................     4
        Prepared statement of....................................     6
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................     1
        Prepared statement of....................................     3
    Markey, Hon. Edward J., a Representative in Congress from the 
      State of Massachusetts.....................................     7
        Prepared statement of....................................     8

Statement of Witnesses:
    Pizarchik, Hon. Joseph G., Director, Office of Surface Mining 
      Reclamation and Enforcement, U.S. Department of the 
      Interior...................................................     9
        Prepared statement of....................................    11
        Response to questions submitted for the record...........    12



OVERSIGHT HEARING TITLED ``JOBS AT RISK: WASTE AND MISMANAGEMENT BY THE 
    OBAMA ADMINISTRATION IN REWRITING THE STREAM BUFFER ZONE RULE.''

                              ----------                              


                        Friday, November 4, 2011

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 11:05 a.m., in 
Room 1324, Longworth House Office Building, Hon. Doug Lamborn 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Lamborn, Thompson, Duncan of South 
Carolina, Flores, Johnson, Holt, Markey, and Costa.
    Mr. Lamborn. The Committee will come to order. The Chairman 
notes the presence of a quorum, which under Committee Rule 3(e) 
is two Members.
    The Subcommittee on Energy and Mineral Resources is meeting 
today to hear testimony on an oversight hearing on ``Jobs at 
Risk: Waste and Mismanagement by the Obama Administration in 
Rewriting the Stream Buffer Zone Rule.''
    Under Committee Rule 4(f), opening statements are limited 
to the Chairman and Ranking Member of the Subcommittee. 
However, I ask unanimous consent to include any other Members' 
opening statements in the hearing record if submitted to the 
clerk by close of business today.
    Hearing no objection, so ordered.
    I am about to give my opening statement. Then I expect that 
the Ranking Member will give his opening statement. At that 
point, there will be a minute or two left in the voting, and we 
will have to take a recess to do this next series of votes. 
Then, I think we will have a window where we can come back and 
hear from you, sir, and have questions and wrap up this 
hearing.

    STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Lamborn. Thank you for your flexibility this morning. I 
now recognize myself for 5 minutes.
    On Monday, September 26, of this year the Subcommittee held 
a field oversight hearing titled, ``Jobs at Risk: Community 
Impacts of the Obama Administration's Effort to Rewrite the 
Stream Buffer Zone Rule,'' in Charleston, West Virginia, where 
we heard from State regulators, the coal industry, West 
Virginia now-Governor Tomblin, Senator Manchin, and many others 
directly about the adverse impacts to communities of the 
Administration's proposed rule.
    During today's hearing, we will hear from the Director of 
the Office of Surface Mining as part of the Committee's ongoing 
investigation into the rewrite of the 2008 Stream Buffer Zone 
Rule. In addition, we will also discuss the recent Secretarial 
Order requiring the merger of the Office of Surface Mining with 
the Bureau of Land Management. Parenthetically, let me say that 
this is a proposal I am deeply concerned about because it 
impacts the ability of the Nation to access vast coal reserves. 
Furthermore, there are clear statutory limitations prohibiting 
the OSM from leasing or promoting coal, which is the key 
responsibility of BLM, but more about that at another time.
    Back to the Stream Buffer Zone Rule. Transparency and 
openness are laudable goals for any administration and are said 
to be goals of this Administration. The President has said, 
``My Administration is committed to creating an unprecedented 
level of openness in government. We will work together to 
ensure the public trust and establish a system of transparency, 
public participation, and collaboration.''
    After the testimony we heard in September and at the budget 
hearing in April, I can't say that I would characterize the 
current rulemaking process as an example of transparency and 
openness. The one exception might be from the June 18, 2010, 
Federal Register notice that said, ``We had already decided to 
change the rule following the change of administrations on 
January 20, 2009.''
    Wyoming Governor Freudenthal made this point in a December 
6, 2010, letter to you where he stated, ``The action OSM is 
taking is a comprehensive rewrite of regulations under the 
Surface Mining Control and Reclamation Act, SMCRA, not a stream 
protection rule. The packaging of this major revision to a law 
that has served the country well for over 40 years as a `stream 
protection rule' is misleading. Some of the changes being 
contemplated have broad implications and deserve thoughtful 
evaluation....Yet, we do not believe we have been given 
meaningful opportunities to comment and participate. Sections 
of the EIS with 25, 50, and even 100's of pages are distributed 
to the States with only a few days to read, review, and provide 
comment back to the agency.''
    The Western Governors Association and other cooperating 
agencies raised similar concerns with you in separate letters. 
In addition, they complained bitterly about the quality, 
completeness, and accuracy of the draft portions of the EIS 
that they had reviewed. Testimony at the West Virginia hearing 
from various States shows that they believe the serious 
shortcomings in how their input was solicited rises to the 
level of legally objectionable deficiencies of process.
    This Committee has heard from industry, whose engineering 
analysis of the draft rule that was leaked earlier this year, 
showed that not only would mountaintop mines be affected by the 
new rule but the Nation's underground longwall and room and 
pillar mines as well.
    One company has estimated that this would result in a loss 
of 40 percent of their eastern longwall minable reserves. At 
current market prices, this equates to a $66 billion loss and a 
major hit to the U.S. taxpayer, and that is only one company we 
are talking about.
    More than 130,000 Americans depend on coal production for 
their livelihood. Throughout the United States there are places 
where the only industry in town is the coal mine. While this 
Administration may think it is a preferred alternative to 
displace tens of thousands of workers, destroying coal mining 
will kill these one-industry towns, push tens of thousands of 
American families into poverty, and leave our Nation poorer, 
driving up the price of energy, all reversing the original 
intent of SMCRA.
    SMCRA was designed to promote the development of fuel to 
help meet the energy needs of the American people while 
ensuring the extraction of coal be done in an environmentally 
responsible manner.
    Our abundant natural resources have made the U.S. the 
richest country in the world, helped us win world wars, and 
raise our standard of living far above the rest of the world. 
Promoting increased access to those resources will continue to 
allow us to become less dependent on foreign sources of energy 
and mineral resources, create new private sector jobs, and add 
revenue to government coffers, reducing the national debt and 
thereby increasing our national and economic security.
    Unfortunately, we have an Administration that sees 
thousands of job losses as the preferred alternative and rushes 
a major rulemaking through by limiting public comment because 
their decision has already been made. This is poor policy and 
poor management and, in the end, will only make America poorer.
    I now yield to the Ranking Member for 5 minutes.
    [The prepared statement of Mr. Lamborn follows:]

          Statement of The Honorable Doug Lamborn, Chairman, 
              Subcommittee on Energy and Mineral Resources

    On Monday, September 26, of this year the Subcommittee held a field 
oversight hearing titled ``Jobs at Risk: Community Impacts of the Obama 
Administration's Effort to Rewrite the Stream Buffer Zone Rule'' in 
Charleston, West Virginia where we heard from state regulators, the 
coal industry, West Virginia Governor Tomblin, Senator Manchin and many 
others directly on the adverse impacts to communities of the 
Administration's proposed rule.
    During today's hearing we will hear from the Director of the Office 
of Surface Mining as part of the Committee's ongoing investigation into 
the re-write of the 2008 Stream Buffer Zone Rule. In addition we will 
also discuss the recent Secretarial Order requiring the merger of the 
Office of Surface Mining with the Bureau of Land Management. A proposal 
I am deeply concerned about impacting the ability of the Nation to 
access our vast coal resources. Furthermore there are clear statutory 
limitations prohibiting the OSM from leasing or promoting coal which is 
a key responsibility of BLM.
    It is frequently said that Transparency and openness, are laudable 
goals for any Administration and purportedly they are a goal of this 
Administration.
    The President has said that ``My Administration is committed to 
creating an unprecedented level of openness in Government. We will work 
together to ensure the public trust and establish a system of 
transparency, public participation, and collaboration. Openness will 
strengthen our democracy and promote efficiency and effectiveness in 
Government.''
    After the testimony we heard in September and at the Budget hearing 
in April I can't say that I would characterize the current rulemaking 
process as a stellar example of ``transparency or openness.''
    The one exception might be from the June 18, 2010 Federal Register 
Notice that said: ``we had already decided to change the rule following 
the change of Administrations on January 20, 2009.'' And that's about 
where the ``transparency and openness'' ends.
    Wyoming Governor Freudenthal's made this point in a December 6, 
2010 letter to you where he stated: ``The action OSM is undertaking is 
a comprehensive rewrite of regulations under the Surface Mining Control 
and Reclamation Act (SMCRA) not a stream protection rule. The packaging 
of this major revision to a law that has served the country well for 
over 40 years as a ``stream protection rule'' is misleading. Some of 
the changes being contemplated have broad implications and deserve 
thoughtful evaluation.. . ..Yet, we do not believe we have been given 
meaningful opportunity to comment and participate. Sections of the EIS 
with 25, 50, and even 100's of pages are distributed to the States with 
only a few days to read, review, and provide comment back to the 
agency. States have been forced to withdraw staff from permitting and 
other critical areas in order to have any opportunity to provide 
feedback to OSM within the required timeframe.''
    The Western Governors Association and other cooperating agencies 
raised similar concerns with you in separate letters. In addition, they 
complained bitterly about the quality, completeness and accuracy of the 
draft portions of the EIS that they had reviewed.
    This Committee has heard from industry, whose engineering analysis 
of the draft rule that was leaked earlier this year, showed that not 
only would mountain top mines be affected by the new rule but the 
Nation's underground long wall and room and pillar mines as well.
    One company has estimated that this would result in a loss of 40 
percent of their eastern longwall minable reserves. At current market 
prices this equates to a $66 billion loss and a major hit to the US 
taxpayer. And that's only one company we're talking about.
    More than 130,000 Americans depend on coal production for their 
livelihood. Throughout the United States there are places where the 
only industry in town is the coal mine. While this Administration may 
think it is a ``preferred alternative'' to displace tens of thousands 
of workers, destroying coal mining will kill these one industry towns, 
push tens of thousands of American families into poverty, and leave our 
nation poorer--all reversing the original intent of SMCRA.
    SMCRA was designed to promote the development fuel to help meet the 
energy needs of the American people while ensuring the extraction of 
the coal in an environmentally responsible manner.
    Our abundant natural resources have made the US the richest country 
in the world, helped us win world wars, and raised our standard of 
living far above the rest of the world. Promoting increased access to 
those resources will continue to allow us to become less dependent on 
foreign sources of energy and mineral resources, create new private 
sector jobs and add revenue to government coffers reducing the National 
debt and thereby increasing our National and Economic Security.
    Unfortunately, we have an Administration that sees thousands of job 
losses as the preferred alternative and rushes a major rulemaking by 
limiting public comment because their decision has already been made. 
This is poor policy and poor management and in the end will only make 
America poorer.
                                 ______
                                 

    STATEMENT OF THE HON. RUSH D. HOLT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Holt. Thank you, Mr. Chairman.
    During surface mining operations in the Appalachians, known 
as mountaintop removal, I would remind everyone that mining 
companies remove rock that overlays the coal deposits and some 
of the removed rock cannot be returned to the mined-out area 
and ends up in the valleys. According to the EPA, since 1992 
nearly 2,000 miles of Appalachian streams have been filled with 
debris from mountaintop removal activities. The EPA has found 
that mountaintop removal mining adversely affects aquatic life 
downstream and disrupts the entire ecosystem and has affected 9 
out of 10 streams in the region.
    Yet the previous Administration, the Bush Administration, 
in the final weeks of office issued a rule that loosened 
Reagan-era restrictions of this destructive practice, and the 
Bush Administration regulation was challenged in court. Now, 
the Obama Administration has begun the process of implementing 
a Stream Protection Rule, a revised rule, that we hope would 
better protect streams from mining waste.
    The key point is we must ensure that Appalachian streams 
and waters are protected for the sake of the people in the 
region.
    Now, I look forward to discussing here, and later, the 
reorganization that has been proposed by the Administration to 
consolidate OSM and BLM. But, on the issue at hand, it seems 
that the majority has focused on OSM's relationship with one 
contractor, Polu Kai Services, PKS, that was hired a year and a 
half ago to prepare an Environmental Impact Statement as part 
of revising this rule. It's worth pointing out that the 
Administration and the contractor ended their relationship 
earlier this year, ended it prematurely.
    However, the documents prepared by the contractor are 
drafts and should be regarded as such. I think it is important 
that we look at the credibility of the work done by the 
contractor.
    OSM received draft EIS chapters from the contractor over a 
period of months from late last year to early this year, 
circulated those chapters to States and government agencies for 
feedback, and the feedback was nothing short of devastating I 
thought. The draft EIS documents were regarded as incomplete 
and unreliable.
    In reviewing the contractor's work, the Virginia Department 
of Mines wrote, ``I certainly hope that the EIS is not going to 
be developed based on this inaccurate and incomplete 
information contained in the document.''
    From the Wyoming Department of Environmental Quality, ``The 
analysis is insufficient for a document of this importance.''
    The West Virginia Department of Environmental Protection 
wrote, ``The document displays very little depth of 
understanding of technical issues.''
    The Indiana Division of Reclamation wrote, ``The logic 
[used] is not readily apparent and appears in many cases to be 
based upon erroneous assumptions, incorrect interpretations, 
and a lack of understanding of current programmatic practices 
from one region to another.''
    And it should be apparent to all listeners here that the 
comments were not made by States that are opponents of mining.
    I hope that the majority doesn't want to use these 
incomplete and unreliable draft documents prepared by the 
contractor in an attempt to block the Administration's efforts 
to fix the inadequate and improper midnight regulations of the 
Bush Administration. They need to be fixed. The proposed rule 
hasn't been issued yet by OSM, and I hope that the majority 
will keep that in mind.
    The fundamental issue that we face is that the current rule 
does not adequately protect streams and water quality, does 
not. And if we ignore this, more Appalachian streams will be 
buried, and the health of the region's people--and we are not 
just talking about snails or something in the water. This is 
widespread throughout the ecosystem, and it will affect--it is 
affecting the region's people. OSM should be encouraged to 
investigate the best way to address this problem.
    Today's hearing I think is not quite on topic. I hope we 
can get to this essential issue of how we are going to protect 
the waters of Appalachia.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Holt follows:]

       Statement of The Honorable Rush D. Holt, Ranking Member, 
              Subcommittee on Energy and Mineral Resources

    During surface mining operations in the Appalachian Mountains, also 
known as mountaintop removal mining (MTR), mining companies remove rock 
that overlies the coal deposits. Some of the removed rock cannot be 
returned to the mined-out area, and is often placed in adjacent 
valleys. According to the Environmental Protection Agency, since 1992, 
nearly 2,000 miles of Appalachian streams have been filled with debris 
from mountaintop removal activities.. Mountaintop removal activities 
have deforested an area the size of Delaware. The EPA has found that 
mountaintop removal mining adversely affects aquatic life downstream in 
nine out of every 10 streams in the region.
    Yet the Bush administration, in its final weeks in office, issued a 
rule that loosened Reagan-era restrictions on this destructive 
practice. The Bush Administration regulation was challenged in court 
and now the Obama Administration has begun the process of implementing 
the Stream Protection Rule, a revised rule to better protect streams 
from mining waste.
    We must ensure that Appalachian streams and the water quality for 
people in the region are protected. Unfortunately, the Republican 
Majority appears intent on preventing the Office of Surface Mining from 
making changes to this rule that would protect the public health and 
the environment in the Appalachian region.
    In particular, the Majority has focused on OSM's relationship with 
a contractor, Polu Kai Services, or PKS, that was hired in April 2010 
to prepare an Environmental Impact Statement as part of revising this 
rule. The Administration and this contractor ended their relationship 
in March of this year, roughly one month early. Some have alleged that 
OSM ended its contract with PKS early because of estimates prepared by 
the contractor in unfinished draft EIS documents showing that jobs 
could be lost.
    However, the documents prepared by the contractor were just drafts. 
And I think it's important that we look at the credibility of the work 
done by the contractor.
    OSM received draft EIS chapters from the contractor over a period 
of several months from late 2010 to early 2011, and immediately 
circulated those chapters--without making any changes and without 
attempting to verify data--to states, other government agencies, and 
internal experts for feedback.
    That feedback from states, which has been obtained by the 
Democratic Minority staff, makes one thing crystal clear: The draft EIS 
documents were incomplete and unreliable.
    In reviewing the contractor's work, the Virginia Department of 
Mines wrote ``I certainly hope that the EIS is not going to be 
developed based on this inaccurate and incomplete information contained 
in this document.''
    Comments from Wyoming Department of Environmental Quality stated 
``The analysis is insufficient for a document of this importance.''
    The West Virginia Department of Environmental Protection wrote, 
``the document displays very little depth of understanding of technical 
issues.''
    The Indiana Division of Reclamation wrote ``The logic [used] is not 
readily apparent and appears in many cases to be based upon erroneous 
assumptions, incorrect interpretations, and a lack of understanding of 
current programmatic practices one region to another.''
    These comments were not made by states that are opponents of 
mining.
    However, the Majority is using these incomplete, and unreliable 
draft documents prepared by this contractor in an attempt to block the 
administration's efforts to fix this Bush Administration midnight 
regulation. In fact, a proposed rule hasn't even been issued yet by the 
OSM.
    The fundamental issue we face is that the current rule does not 
adequately protect streams and water quality. If we ignore this, as the 
Majority would have us do, more Appalachian streams will be buried and 
the health of the region's people will be at risk. OSM should be 
encouraged to investigate the best way to address this problem. Today's 
hearing, unfortunately, is a distraction from that effort.
                                 ______
                                 
    Mr. Lamborn. All right. Thank you. We will be in recess. I 
note that there is only one vote in this series is so we should 
be able to just walk over there, vote, and walk right back. So, 
hopefully, in 10 or 12 minutes we can reconvene and then hear 
from Mr. Pizarchik and then have our questions and be done. The 
Committee will be in recess.
    [Recess.]
    Mr. Lamborn. The Subcommittee will come back to order, and 
I can verify that everyone scurried both there and back and 
tried to make this as quick as possible.
    We now have the Ranking Member with us. So, as a courtesy, 
I will recognize him for 5 minutes for an opening statement.

  STATEMENT OF THE HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman, very much.
    Mountaintop removal mining is one of the most 
environmentally destructive practices there is. Mountains are 
turned into barren plateaus. Streams in the bottoms of valleys 
are filled with debris. Heavy metals destroy water quality for 
nearby residents and ruin ecosystems.
    Days before leaving office, the Bush Administration issued 
a midnight regulation revising a Reagan-era regulation called 
the Stream Buffer Zone. This midnight rule made it easier for 
mining companies to engage in this destructive practice.
    The Obama Administration is now in the process of revising 
this rule so that we can better protect streams and the people 
who live next to them from the worst effects of mountaintop 
removal mining. And the Republican majority has derided this 
effort to undo a Bush Administration parting gift to the mining 
industry, saying that it will lead to the loss of thousands of 
jobs.
    However, the Republican majority is making this claim based 
on a draft environmental analysis done by an outside 
contractor, Polu Kai Services. Unfortunately, as demonstrated 
by the comments that Mr. Holt cited, there was near universal 
agreement from agency experts and States where coal mining is 
prevalent that the work done by PKS was unreliable. The review 
done by this contractor was characterized by the State experts 
as inaccurate, incomplete, erroneous, incorrect, and 
insufficient. PKS even plagiarized work from other analyses 
that weren't even focused on coal mining and included it in its 
review.
    In fact, PKS did not even have any previous experience 
conducting this sort of review. While the contractor had done 
previous work in construction, environmental remediation, and 
hazardous waste management, this was the first time PKS was 
responsible for preparing an Environmental Impact Statement.
    But the Republican majority has taken the jobs numbers 
contained in this shoddy draft review done by PKS and held them 
up as inviolate. They are essentially taking an analysis little 
better than some figures scribbled on the back of an envelope 
about mountaintop mining and treating them as though they were 
carved in stone tablets brought down from a mountain. In these 
mining activities, we know that tons of debris come down from 
the mountaintop, but these numbers certainly did not.
    Once again, they are trotting out their well-worn arguments 
that protecting public health and the environment will harm our 
economy. The American people know better. They know that we do 
not have to sacrifice our health and our environment in order 
to grow the economy. We can do both. When it comes to rewriting 
the Stream Buffer Zone Rule, it seems that what we really need 
is a buffer zone from the Republican stream of opposition to 
any efforts to limit pollution or end giveaways to special 
interests.
    I look forward to hearing today from the Interior's 
Department Office of Surface Mining on how rewriting this Bush 
Administration regulation can better protect not only the 
environment but also the economy of the Appalachian region.
    In addition, I look forward to hearing more about the 
proposed reorganization into the Interior Department that 
Secretary Salazar announced last week. We need to be sure that 
any efforts to combine the Office of Surface Mining with the 
Bureau of Land Management ensure that we can still effectively 
regulate coal mining, ensure proper reclamation of mine sites, 
and provide taxpayers and States with a proper return on these 
minerals.
    I look forward to the testimony, and Mr. Chairman, I yield 
back.
    [The prepared statement of Mr. Markey follows:]

     Statement of The Honorable Edward J. Markey, Ranking Member, 
                     Committee on Natural Resources

    Mountaintop removal mining is one of the most environmentally 
destructive practices there is. Mountains are turned into barren 
plateaus. Streams in the bottoms of valleys are filled with debris. 
Heavy metals destroy water quality for nearby residents and ruin 
ecosystems.
    Days before leaving office, the Bush Administration issued a 
midnight regulation revising a Reagan-era regulation called the Stream 
Buffer Zone Rule. This midnight rule made it easier for mining 
companies to engage in this destructive practice.
    The Obama Administration is now in the process of revising this 
rule so that we can better protect streams, and the people who live 
next to them, from the worst effects of mountaintop removal mining. And 
the Republican Majority has derided this effort to undo a Bush 
Administration parting gift to the mining industry, saying that it will 
lead to the loss of thousands of jobs.
    However, the Republican Majority is making this claim based on a 
draft environmental analysis done by an outside contractor, Polu Kai 
Services. Unfortunately, as demonstrated by the comments that Mr. Holt 
cited, there was near universal agreement from agency experts in states 
where coal mining is prevalent that the work done by PKS was 
unreliable. The review done by this contractor was characterized by 
these state experts as ``inaccurate,'' ``incomplete,'' ``erroneous,'' 
``incorrect,'' and ``insufficient.'' PKS even plagiarized work from 
other analyses that weren't even focused on coal mining and included it 
in its review.
    In fact, PKS did not even have any previous experience conducting 
this sort of review. While the contractor had done previous work in 
construction, environmental remediation, and hazardous waste 
management, this was the first time PKS was responsible for preparing 
an Environmental Impact Statement.
    But the Republican Majority has taken the jobs numbers contained in 
this shoddy draft review done by PKS and held them up as inviolate. 
They are essentially taking an analysis little better than some figures 
scribbled on the back of an envelope about mountaintop mining and 
treating them as though they were carved in stone tablets brought down 
from a mountain. In these mining activities, we know that tons of 
debris come down from the mountaintop, but these numbers certainly 
didn't.
    Once again they are trotting out their well-worn arguments that 
protecting public health and the environment will harm our economy. The 
American people know better--they know that we do not have to sacrifice 
our health and our environment in order to grow the economy. We can do 
both. When it comes to rewriting the Stream Buffer Zone Rule, it seems 
that what we really need is a buffer zone from the Republican stream of 
opposition to any efforts to limit pollution or end giveaways to 
special interests.
    I look forward to hearing today from the Interior Department Office 
of Surface Mining on how rewriting this Bush Administration regulation 
can better protect not only the environment but also the economy of the 
Appalachian region.
    In addition, I look forward to hearing more about the proposed 
reorganization of the Interior Department that Secretary Salazar 
announced last week. We need to be sure that any efforts to combine the 
Office of Surface Mining with the Bureau of Land Management ensure that 
we can still effectively regulate coal mining, ensure proper 
reclamation of mine sites and provide taxpayers and states with a 
proper return on these minerals.
    I look forward to the testimony and yield back.
                                 ______
                                 
    Mr. Lamborn. All right. Thank you.
    Before I invite the witness forward, I ask unanimous 
consent that the gentleman from West Virginia, Mr. McKinley, 
and the gentleman from Nevada, Mr. Amodei, who is a member of 
the Committee but not on this Subcommittee be allowed to join 
the members of the Subcommittee on the dais if and when they 
arrive and to participate in the hearing. Without objection, so 
ordered.
    I now invite forward The Honorable Joseph Pizarchik, 
Director, Office of Surface Mining Reclamation and Enforcement. 
Your written testimony will appear in full in the hearing 
record. So I ask that you keep your oral statement to 5 minutes 
as outlined in our invitation letter to you. Our microphones 
are not automatic, but I know you know how to work them so I 
won't go through that.
    Director Pizarchik, you may begin.

  STATEMENT OF THE HON. JOSEPH PIZARCHIK, DIRECTOR, OFFICE OF 
SURFACE MINING RECLAMATION AND ENFORCEMENT, U.S. DEPARTMENT OF 
                          THE INTERIOR

    Mr. Pizarchik. Thank you, Mr. Chairman and members of the 
Committee, for the opportunity to testify on behalf of Office 
of Surface Mining Reclamation and Enforcement regarding the 
Bureau's proposed rulemaking to better protect streams from the 
adverse effects of coal mining. OSM looks forward to working 
with you on matters relating to its mission under the Surface 
Mining Control and Reclamation Act.
    OSM derives its regulatory authority and responsibilities 
from SMCRA, an Act that Congress passed more than 34 years ago. 
Congress specified several purposes for OSM in the law. One 
purpose is to assure that American coal mines operate in a 
manner that protects people and the environment and that the 
land is restored to productive use. Another is to assure that 
coal supply essential to the Nation's energy requirements is 
provided, and strike a balance between protection of the 
environment and agricultural productivity and the Nation's need 
for coal. A third purpose is to provide an abandoned mine land 
program to address hazards to people and the environment that 
were created by more than 200 years of unregulated coal mining.
    One thing that SMCRA is not, it is not a law to promote 
development of coal. It is replete with numerous references 
that its purpose is to protect the people and the environment 
from the adverse effects of coal mining.
    We fully appreciate how coal production is important to the 
Nation's economy and energy supply. Coal mining provides good 
paying jobs. Coal also provides about half of this country's 
electricity and will remain an important part of our energy mix 
for the foreseeable future.
    We also recognize the need to not only carry out our 
mandate but to do so using the best available science and 
technology. We are considering revising the 2008 Stream Buffer 
Zone Rule because there are areas that should be improved. 
Scientific advances not fully explored and considered in the 
2008 rule will allow us to better understand coal mining's 
impact on water and aquatic ecosystems. With that information, 
together with our on-the-ground experience gathered over the 
past decades, we are exploring ways to improve mining practices 
to prevent environmental damages before it happens. We also 
know that existing technological advances enable the industry 
to do a better job of reclaiming the land and restoring the 
natural resources for the benefit of the communities that 
remain there long after the coal is gone.
    We are also considering ways to improve key regulatory 
provisions. SMCRA requires that the surface mining and 
reclamation operations be conducted to minimize disturbances to 
fish and wildlife and related environmental values to the 
extent possible using the best technology currently available. 
We are considering refinements that will provide solid 
benchmarks for companies to meet that will be based on the 
latest accepted science. Clear and uniform standards provide 
greater predictability and certainty to the industry and can 
better protect affected communities.
    SMCRA prohibits material damage to hydrologic balance 
outside the permit area. That phrase has never been defined in 
OSM's regulations. We are considering ways to provide a clear 
definition that can be applied uniformly across the country. It 
is important to define the term in order to fully implement the 
law, to protect drinking water, to protect water quality and 
resources for recreation, wildlife, and scenic values. 
Protection of our waterways is a high priority as we continue 
to develop our coal resources.
    OSM has never specified what is required for coal operators 
to return mine sites to approximate original contour. The 
Surface Mine Act requirements that operators reclaim the mined 
areas to closely resemble their original pre-mining shape and 
size. Decades of research and on-the-ground practice have 
demonstrated that careful restoration of post-mining areas will 
limit and, in many cases, eliminate the harmful levels of 
pollution from mines that can impact local communities and 
degrade downstream aquatic resources. Uniform regulations that 
result in carefully reclaimed areas will create opportunities 
for continued productive use of the land and water after coal 
mining ends.
    We also published an Advanced Notice of Proposed Rulemaking 
last November. It described OSM's intent to consider whether 
the SMCRA regulation should be updated to require mine 
operators to collect more complete stream data before, during, 
and after mining. These data would provide a better baseline to 
set the standard for the successful restoration of streams 
after mining is completed. Data collected during mining would 
allow the operator to make adjustments as mining continues so 
that corrective measures can be implemented before material 
damage occurs.
    The Environmental Impact Statement that OSM is developing 
in support of the rule will examine a range of alternatives. In 
addition to analyzing the significant environmental issues 
associated with the proposed Stream Protection Rule and its 
alternatives, the EIS will evaluate the economic impacts of 
each regulatory decision. OSM plans to produce and publish a 
proposed rule and associated draft EIS next year. There will be 
ample opportunity for additional public input on both the rule 
and the draft EIS.
    The National Environmental Policy Act and other laws are 
laws that we will follow as we prepare these documents. They 
provide, as we move forward, that we have received extensive 
input to date. We have received over 50,000 comments from the 
public on the draft EIS, on the scoping documents, and on the 
Advanced Notice of Proposed Rulemaking.
    Thank you for the opportunity to appear here today to 
testify on this development. I look forward to working with you 
as we work together to better protect America's streams from 
the adverse impact of coal mining.
    [The prepared statement of Mr. Pizarchik follows:]

 Statement of Joseph G. Pizarchik, Director, Office of Surface Mining 
      Reclamation and Enforcement, U.S. Department of the Interior

    Mister Chairman and Members of the Committee, thank you for the 
invitation to testify on behalf of the Office of Surface Mining 
Reclamation and Enforcement (OSM) regarding the bureau's proposed 
rulemaking to better protect streams from the adverse effects of coal 
mining. OSM looks forward to working with you on matters relating to 
its mission under the Surface Mining Control and Reclamation Act 
(SMCRA).
    OSM derives its regulatory authority and responsibilities from 
SMCRA, an act that Congress passed more than 34 years ago. Congress 
specified several purposes for SMCRA. One purpose is to assure that 
American coal mines operate in a manner that protects people and the 
environment, and that the land is restored to beneficial use following 
mining. Another purpose is to assure that the coal supply essential to 
the Nation's energy requirements is provided, and strike a balance 
between protection of the environment and agricultural productivity and 
the Nation's need for coal. And a third purpose is to provide an 
Abandoned Mine Land program to address hazards to people and the 
environment that were created by more than two hundred years of 
unregulated coal mining that occurred before SMCRA's enactment.
    We fully appreciate how important coal production is to the 
Nation's economy and energy supply. Coal mining provides well-paying 
jobs. Coal also produces about half of the Nation's electricity and 
will remain an important part of our energy mix for decades to come.
    We also recognize the need to not only carry out our mandate, but 
to do so using the best available science and technology. We are 
considering revising the 2008 Stream Buffer Zone Rule because there are 
areas that should be improved. Scientific advances not fully explored 
and considered in the 2008 rule will allow us to better understand coal 
mining's impact on water and aquatic ecosystems. With that information, 
together with our on-the-ground experience, we are exploring ways to 
improve mining practices to prevent environmental damage before it 
occurs. We also know that existing technological advances enable 
industry to do a better job of reclaiming the land and restoring 
natural resources for the benefit of the communities that will remain 
long after the coal is gone. These goals are fully consistent with 
SMCRA's mandate and OSM's mission.
    As we proceed with development of the Stream Protection Rule, we 
are considering ways to improve key regulatory provisions. SMCRA 
requires that surface coal mining and reclamation operations be 
conducted to minimize disturbances to fish, wildlife, and related 
environmental values ``to the extent possible using the best technology 
currently available.'' We are considering revisions that will provide 
solid benchmarks for companies to meet, and that will be based on the 
latest accepted scientific methods. Clear and uniform standards provide 
greater predictability and certainty to the mining industry, and can 
better protect affected communities.
    As OSM described in its Advance Notice of Proposed Rulemaking 
(ANPR) on the Stream Protection Rule, SMCRA prohibits ``material damage 
to the hydrologic balance outside the permit area.'' This phrase has 
never been defined in OSM's regulations. We are considering ways to 
provide a clear definition that can be applied uniformly across the 
country. It is important to define the term in order to fully implement 
the law to protect water resources beyond the area covered in the 
mining permit; to protect drinking water; and to protect water quality 
and resources for recreation, wildlife, and scenic values. Protection 
of our waterways is a high priority as we continue to develop our 
important coal resources.
    As the ANPR also noted, OSM has never clearly specified what is 
required for coal operators to return mine sites to their approximate 
original contour. SMCRA requires that mine operators reclaim mined 
areas to closely resemble their original pre-mining shape and size. 
Decades of research and on-the-ground practice have demonstrated that 
careful restoration of post-mining areas will limit, and, in many 
cases, eliminate, harmful levels of pollution from mines that often 
impact local communities and degrade downstream aquatic resources. 
Uniform regulations that result in carefully reclaimed areas will 
create opportunities for continued productive use of the land and water 
after coal mining ends.
    The ANPR also described OSM's intent to consider whether SMCRA 
regulations should be updated to require mine operators to take more 
extensive or more specific measurements of water quality and biology in 
streams before, during, and after mining. These data would better 
provide a baseline to set the standard for successful restoration of 
streams after mining is completed. Data collected during mining would 
allow the operator to make adjustments as mining continues, so that 
corrective measures can be implemented before long-term damage occurs.
    As OSM proceeds with development of its proposed Stream Protection 
Rule, it will consider the extensive public and agency comments it has 
received. It will also consider the benefits, as well as the costs, of 
the agency's regulatory alternatives.
    The Environmental Impact Statement (EIS) that OSM is developing in 
support of the rule will examine a range of alternatives. In addition 
to analyzing the significant environmental issues associated with the 
proposed Stream Protection Rule and its alternatives, the EIS will 
evaluate the economic impacts of each alternative, and will provide OSM 
with critical information needed to inform its regulatory decision-
making and the public. OSM plans to publish a Proposed Rule and 
associated Draft EIS next year. OSM will take the time necessary to 
make informed regulatory decisions supported by the Draft EIS analysis, 
with ample opportunity for additional public input on both the rule and 
its Draft EIS.
    Consistent with the National Environmental Policy Act (NEPA), the 
Administrative Procedure Act, and other applicable laws, we will ask 
interested stakeholders--whether from Congress, industry, environmental 
organizations, or members of the public--to read and comment on the 
Proposed Rule and Draft EIS once those documents have been published. 
We have received extensive input from the public, states, and other 
Federal agencies on issues that we ought to consider in drafting a 
proposed rule, including more than 32,000 comments in 2009 on the ANPR, 
and more than 20,000 after we held public scoping meetings last year. 
We look forward to receiving additional public review and comment on 
the proposed rule and Draft EIS once they are published.
    Thank you for the opportunity to appear before the Committee today 
to testify on the development of OSM's Stream Protection Rule. Our 
efforts will result in regulatory improvements that will more fully 
carry out the bureau's mission, make use of the best available science 
and technology, better protect streams nationwide, and provide greater 
clarity and certainty to the mining industry and the affected 
communities. I look forward to working with you to ensure that we 
protect the Nation's land and water while meeting its energy needs.
                                 ______
                                 

Response to questions submitted for the record by the Office of Surface 
  Mining Reclamation and Enforcement, U.S. Department of the Interior

Questions for the Record from Representative Johnson of Ohio
1.  In a settlement agreement dated March 19, 2010 the Administration 
        settled two lawsuits, one with a group of plaintiffs known as 
        ``The Coal River Plaintiffs'' and another with the National 
        Parks Conservation Association, regarding the 2008 Stream 
        Buffer Zone Rule. In the agreement, the Administration agreed 
        to pay the Plaintiffs in both suits the cost of litigation up 
        until March 19, 2010 under the Endangered Species Act, the 
        Surface Mining Control and Reclamation Act and the Equal Access 
        to Justice Act. How much were the Plaintiffs in both suits paid 
        as a result of this settlement agreement?
    Response: On March 19, 2010, the United States and the National 
Parks Conservation Association (NPCA) entered into an agreement to 
settle a complaint filed by NPCA under the case captioned NPCA v. 
Kempthorne, et al., Case No. 1:09-cv-00115 (D.D.C.), which sought 
judicial review of the Office of Surface Mining Reclamation and 
Enforcement's (OSM's) 2008 Stream Buffer Zone Rule. Under a subsequent 
settlement agreement regarding costs of litigation, the United States 
paid $48,142.40 as full settlement of all potential claims by NPCA for 
its costs of litigation.
    On March 19, 2010, the United States and Plaintiffs Coal River 
Mountain Watch, Kentucky Waterways Alliance, Ohio Valley Environmental 
Coalition, Save Our Cumberland Mountains, Sierra Club, Southern 
Appalachian Mountain Stewards, Waterkeeper Alliance, and West Virginia 
Highlands Conservancy (collectively ``Coal River Plaintiffs''), entered 
into an agreement to settle a complaint filed by the Coal River 
Plaintiffs under the case captioned Coal River Mountain Watch, et al. 
v. Kempthorne, et al., Case No. 1:08-cv-02212 (D.D.C.), which sought 
judicial review of OSM's 2008 Stream Buffer Zone Rule. Under a 
subsequent settlement agreement regarding costs of litigation, the 
Department of the Interior paid $12,840 as full settlement of all 
potential claims by the Coal River Plaintiffs for their costs of 
litigation.
2.  With whom and when did you, political appointees at the Department 
        of the Interior, or OSM staff have contact with employees of 
        the Council on Environmental Quality or any other employee in 
        the Executive Office of the President on the Stream Buffer 
        Zone? Furthermore, please provide any emails or phone logs you, 
        political appointees at the Department of the Interior, or OSM 
        senior staff have with any Executive Office of the President 
        employee on the re-write of the 2008 Stream Buffer Zone rule.
    Response: In accordance with Executive Order 12866, the National 
Environmental Policy Act (NEPA) and other applicable Federal law, 
agencies coordinate with the Office of Management and Budget (OMB) and 
the Council on Environmental Quality (CEQ) with respect to new 
regulations and the analysis of such regulations under NEPA. Early 
coordination with these agencies promotes consistent application of 
applicable law, maximizes communication among agencies with similar 
policies or activities, and promotes a more effective regulatory 
program. OSM and the Department work with OMB and CEQ as appropriate on 
regulatory matters, including ongoing development of OSM's Stream 
Protection Rule. As the Department has stated previously to the 
Committee in both written and staff level communications, requests for 
information related to an ongoing rulemaking process implicate 
important and substantial Executive Branch confidentiality interests.
Question for the Record from Representative Flores
1.  Were any of the OSM Employees involved in selecting Polu Kai 
        Services, LLC also involved in selecting the 2nd contractor? 
        Please provide to the Committee the names and roles of the OSM 
        team in both selection processes.
    Response: On June 1, 2010, OSM awarded a contract to Polu Kai 
Services, LLC. In awarding this contract, OSM followed the competition 
requirements under section 8(a) of the Small Business Act, 15 U.S.C. 
637(a), and appropriate provisions of the Federal Acquisition 
Regulations (FAR). OSM also followed applicable procedures for 
obtaining approval for the procurement action, and in rating and 
selecting the contractor. The Source Selection Evaluation Board (SSEB) 
for this selection consisted of OSM career staff, including subject 
matter experts and contracting personnel.
    On June 17, 2011, OSM awarded a contract to Industrial Economics, 
Inc. In awarding this contract, OSM followed the applicable FAR 
procedures, which allow the agency to limit competition to eligible 
Federal Supply Schedule (FSS) contractors, in accordance with all 
applicable Department of the Interior and FAR requirements. The SSEB 
for this selection consisted of OSM career staff, including subject 
matter experts and contracting personnel.
    Some, but not all of the staff who were members of the SSEB that 
rated the Polu Kai Services, LLC, contract, were also members of the 
SSEB that rated the contract for Industrial Economics, Inc.
                                 ______
                                 
    Mr. Lamborn. All right. Thank you. We will now begin 
questioning. Members are limited to 5 minutes for their 
questions but we may have additional rounds. I now recognize 
myself for 5 minutes for questions.
    Based on the evidence in the record, it appears that OSM 
has predetermined the outcome for this rulemaking. For 
instance, before initiating any scoping hearings under NEPA, 
you wrote the entire 400-page rule. In addition, your own 
Federal Register notice on June 18, 2010, said that, ``we had 
already decided to change the rule following the change of 
administrations on January 20, 2009.''
    Is OSM giving fair consideration to a range of reasonable 
alternatives to this regulation, including the no action 
alternative?
    Mr. Pizarchik. Yes, we are giving fair consideration to all 
the alternatives, including the no action alternative. In fact, 
in order to comply with NEPA, it is important for us to have 
developed some alternatives and a potential proposal for 
consideration so that information can be assessed in order that 
we can make an informed decision as to what should be in the 
proposed rulemaking, and that is what we are undertaking.
    Mr. Lamborn. In the scoping documents and the Federal 
Register notice announcing the preparation of the EIS, you 
point to the court settlement agreement reached with 
environmentalists and the Interagency Memorandum of 
Understanding as reasons for the stream protection rulemaking. 
Nowhere do you discuss the specific on-the-ground environmental 
problems you are trying to address. Nor have we found any 
indication in OSM's State program oversight reports any 
suggestion of environmental concerns necessitating this rule 
change.
    So what is the basis for proceeding with such a 
comprehensive rewrite of the agency's regulations?
    Mr. Pizarchik. There are a number of bases, Mr. Chairman. 
If you look at what is actually happening in the field and look 
at the experiences that we have, there were things that were 
not considered when the 2008 rule was put together. For 
instance, a few years ago just up in Dunkard Creek on the 
Pennsylvania-West Virginia border, there was a huge fish kill 
which was due to high levels of total dissolved solids that was 
discharged from an underground mine with their treated water. 
That has never been taken into consideration. The emerging 
science out there shows that selenium that is released from 
some mines in the area can have a bioaccumulation and poison 
the aquatic community. This could have a poisoning effect on 
the people who eat the fish in those streams. Those are the 
types of things that we need to take care of.
    Also, in regard to the 2008 rule, there are provisions in 
it that are inconsistent with the statute. For example, it 
provides for the codification in our regulations of the process 
that is referred to as valley fills. That is where the excess 
spoil that is blown from the top of the mountain is shoved over 
the side of the mountain and it wind dumps or end dumps, 
allowing the rocks to cascade into the valley below to fill the 
streams on the premise that the more durable rocks will roll 
farther than the dirt and the undurable rocks, to form the 
underdrain, the process that the industry calls shoot and 
shove.
    Well, the statute says that that material is to be 
transported down and placed in a controlled fashion. There are 
evidences of failures where those types of uncontrolled dumping 
of the material over the side of the mountain has resulted in 
devastation downstream. We also have emerging science that 
shows that high levels of total dissolved solids is having an 
adverse effect.--
    Mr. Lamborn. OK. I see how after the fact you have come up 
with things, but how can the States and how can the public 
provide meaningful comment on the proposed rule without knowing 
the specific environmental problems that the proposed change is 
attempting to address when they are nowhere addressed in all of 
the scoping documents and the Federal Register notice?
    Mr. Pizarchik. The public will get the opportunity to 
review that and to provide comment on those reasons when the 
proposed rule is provided and published next year. It 
specifically provides for that information. We will have it in 
the preamble to the rulemaking. It will be discussed in the 
draft Environmental Impact Statement, and in accordance with 
the Federal requirements, the legal requirements, the public 
will have an opportunity to review and comment on those issues.
    Mr. Lamborn. OK. I may have a few more questions later. At 
this point, I will recognize the Ranking Member for 5 minutes.
    Mr. Holt. Thanks, Mr. Chairman. I would like to follow on 
the Chairman's line of questioning for a moment.
    So it has been several years since the adoption of the 2008 
rule. The Chairman seemed to be asking--and I think we would 
all like to know--what is it about the rule that you would list 
that isn't working? I think it is probably a pretty long list, 
but when you talk about the preamble and the scoping, is that 
where you will lay out all the reasons that there is a need for 
a new rule or have you already somewhere laid that out?
    Mr. Pizarchik. The appropriate place under the current 
practices and the requirement is that we will lay out those 
reasons in the preamble of the proposed rule. They will also be 
laid out in detail in the draft Environmental Impact Statement 
that we will publish next year for public comment. There are a 
number of things in the 2008 rule that need to be fixed. There 
are also things elsewhere in our regulations that have not 
resulted in the full implementation of the law as Congress 
envisioned 34 years ago----
    Mr. Holt. Would you care to take 1 minute and just list 
some of the categories where the rule is failing or, well, 
needs replacement or reform?
    Mr. Pizarchik. Yes. The one I mentioned earlier was about 
the valley fills or end dumps or shoot and shove. We need to 
take care of that. There are other things that we have learned, 
for instance, on reforestation. We know that we get less 
pollution off a reclaimed mine site if it has been properly 
reforested. The statute has always required the sites be re-
vegetated with native vegetation. We have between 750,000 to 1 
million acres in Appalachia alone that have not been 
reforested. We have provisions where the law has always 
required the prevention of material damage, yet we have never 
defined material damage. If you don't define material damage, 
how do you know what it is?
    Mr. Holt. That is material damage to areas outside the 
immediate area?
    Mr. Pizarchik. Yes, right, and the law has always required 
the collection of baseline data. We have never collected or 
required the collection of baseline data on the aquatic 
community living in the stream. Seems pretty simple to a small, 
old farm boy like me, that if you know what is in the stream 
beforehand and they are living in the stream after mining, that 
you were successful in your mining and reclamation.
    There are also geomorphic land reclamation techniques that 
not only can restore the land to its productive use, but can 
restore its form and function and do so in a way that will 
actually save operators money. Those things need to be updated.
    I could go on but I see I am running a little out of time 
here.
    Mr. Holt. Thank you. Those are some significant categories, 
and I thank you for that.
    Let me turn in the short time remaining to get a comment or 
two about the proposed reorganization. Perhaps you will be 
restrained in what you can say since it is a preliminary 
suggestion or well--combining OSM and BLM raises in my mind 
some questions. BLM, for example, has no experience in 
regulating mine cleanup activities on private lands. BLM hasn't 
been working with State agencies in the way that OSM has.
    How would the proposed consolidation ensure that mines on 
State and private lands continue to be cleaned up effectively? 
Would this--it concerns me a little bit that we might lose some 
experience, expertise, as well as authority in those cleanups.
    Mr. Pizarchik. Thank you. We are in the very early stages 
of this process. It was just announced last week. We are 
beginning the consultation with the employees, with the other 
stakeholders to provide input on that. There are some 
efficiencies that could be gained. OSM has experience in 
reclaiming the abandoned mine lands, both hard rock and coal, 
and out in the West where we have worked with the western 
operators, and that expertise, if it is integrated between OSM 
and BLM, could have the benefit of actually improving more 
reclamation in the West.
    Mr. Holt. All right. For the moment I think that is it. 
Thank you, Mr. Chairman.
    Mr. Lamborn. All right. Thank you. I now recognize the 
gentleman from Pennsylvania.
    Mr. Thompson. Thank you, Chairman. Thank you, Director, for 
being here and thanks for your previous service in Pennsylvania 
as well.
    I know one of the accomplishments that you did was you 
helped to coauthor the Pennsylvania Environmental Good 
Samaritan Act. I worked with a lot of partners, went out and 
saw some of those projects where different groups are able to 
get involved, and so I appreciate that.
    Two questions. OSM has admitted spending over $4.4 million 
on the Environmental Impact Study for this rule, plus an 
additional $925,000 to alter the economic analysis which 
predicted thousands of job losses. By contrast, in 2005, 
several agencies managed to produce a 5,000-page programmatic 
EIS, including 30 Federally funded studies on all aspects of 
surface mining, for about the same amount.
    My question is, couldn't the agency avoid the need for this 
merger or reorganization, or whatever word is proper to 
describe it, by frankly managing its existing resources more 
efficiently?
    Mr. Pizarchik. I would like to be able to be in a position 
to have done that, but the fact is, over the last decade, our 
staffing levels have dropped by about 16, 17 percent due to 
insufficient support. If you go back about 20 years, our agency 
has been reduced in staff by almost 50 percent. We are doing 
more with less. We have been doing that for decades, and in 
order to keep providing the technical support and training to 
the States that we are statutorily obligated to do, to do the 
oversight, and to do our rulemakings, we simply did not have 
the resources in-house to do all of that work internally, so we 
had to turn to the private sector for assistance.
    Mr. Thompson. That kind of actually does kind of touch with 
my second question, which really has to do with primacy between 
the States and the Federal Government, and obviously in terms 
of taking primacy away from the States, and really 
clarification I was looking from you. In 2007 when you worked 
for the State of Pennsylvania you signed a letter to OSM 
objecting to the scope of the Stream Buffer Zone Rule saying, 
and this is your quote, ``OSM's proposed major overhaul of its 
regulations which, if adopted, would force States to make major 
changes to their primacy program regulations and statutes to 
fix a problem that does not exist in those States without 
mountaintop mining.''
    So I guess the question is, why are you now advocating a 
comprehensive nationwide rulemaking which in your own words is 
much broader than the 2008 rule that contradicts your earlier 
position? What has changed?
    Mr. Pizarchik. I don't agree that it contradicts my earlier 
position. What has changed is that what we are looking at is 
updating and modernizing our regulations to take advantage of 
the science that we now know and that has developed, to take 
advantage of the experience we have to more fully implement the 
law. And it is just as important to protect streams in 
Appalachia as it is in the West or the Midwest.
    And SMCRA provides for and requires us to have a uniform 
law to provide a level playing field for mine operators in all 
States in order not to give a competitive advantage to one area 
or one region of the country over the other. So we are looking 
and carrying out our responsibilities to try to maintain that 
level playing field across the country and to modernize our 
regulations to more fully implement the law.
    Mr. Thompson. Thank you, Mr. Director. Thank you, Mr. 
Chairman. I yield back.
    Mr. Lamborn. OK. I now recognize the gentleman from Texas.
    Mr. Flores. Thank you, Mr. Chairman. I am going to start by 
one comment related to the merger of BLM and OSM. First of all, 
I don't think there is any statutory authority. Second, it 
appears like the Department of the Interior is a little bit 
schizophrenic because on the offshore drilling side they have 
broken apart two agencies that were formerly combined. The 
regulatory function and the leasing function are split, and now 
with respect to coal mining, they want to merge those two 
functions. I wish they could figure out which direction they 
want to go.
    My other question is, you talked about emerging science as 
justification for the new rule or modified rule. Can you 
identify for me the science that would support the rule change 
for coal mines that are located outside of Appalachia, in 
particular Wyoming, Montana, Colorado, and Utah.
    Mr. Pizarchik. For example, in New Mexico, which is out in 
that area, it is not one of the ones you listed, they have been 
utilizing geomorphic land reclamation principles, reclaiming 
the land to look like and function like it did prior to mining. 
As a result of that, they were able to cut down on the amount 
of pollution that was going into the streams. It was also 
successfully used in Texas. It is not being successfully used 
everywhere. So what we are trying to do is to modernize the 
regs, using that experience and the science that we have 
learned in those particular areas where our State partners have 
learned that and demonstrated these things can be successful in 
better protecting streams and apply that across the country as 
is required to do with a level playing field.
    Mr. Flores. I would like to yield the balance of my time to 
Mr. Johnson.
    Mr. Johnson. Well, thank you. I appreciate my colleague 
yielding. You know, I was kind of dumbfounded by--first of all, 
Mr. Director, you might find it interesting, I am an old farm 
boy myself. Only I am a two-wheel wagon mule farmer. So you 
know, nobody is more concerned that we protect what God has 
given us than I am, but I am very concerned that we do it in a 
responsible way that incentivizes America's exceptionalism, not 
putting strangleholds.
    One of your comments when asked--``When will the American 
people see and get an opportunity to see the analysis?''--your 
response was, ``Well, they will get a chance to see it when we 
publish next year.'' That is awfully reminiscent. I mean, did 
the Administration and you guys hire somebody to develop that 
tag line? I mean, that is a rhetorical question, but that 
sounds awfully reminiscent of another major piece of 
legislation that has been destructive to America's economy and 
future generations when our former Speaker said, hey, let's 
pass this bill so we can see what is in it. That seems the way 
that your Administration, your Department wants to work. You 
want to do these things in the blind, keep America in the dark, 
and expect nobody to notice until it is too late. But I am glad 
to say that we are not going to wait and it is not going to be 
too late.
    So let me get into my questions. As you might be aware, as 
the Chairman mentioned, we had a field hearing in West Virginia 
earlier, and I had the opportunity to question three State 
regulators about what their experiences have been with OSM in 
this rulemaking process as compared to the rulemaking process 
that resulted in 2008. The State regulators have all expressed 
that they had the same experiences this time around and that it 
was not pretty.
    I must say that I am highly disappointed with OSM and the 
way that they have treated the States in this rulemaking 
process. Specifically, Director Clarke of the West Virginia 
Division of Mining and Reclamation, said that, and I am quoting 
him, he thinks OSM seems to want to complete this rulemaking 
process at a world record pace, which is unrealistic 
considering the other one took 5 years to complete.
    Director Pizarchik, what is your response to his claim--
Director Clarke's claim that OSM has set an unrealistic time 
frame to complete this rulemaking process?
    Mr. Pizarchik. The process that we are using, that we 
engaged on, has had more public involvement, more public input 
than was used on the 2008 rule. We have already received more 
public comments than were received on that entire rulemaking. 
We haven't even gotten to the proposed stage yet.
    As far as moving forward with this, yes, we were trying to 
get this rule done in a timely fashion, and the States, 
notwithstanding their protestations to the contrary, had 
provided almost 200 pages of comments, hundreds and hundreds of 
comments, many of which were cited earlier.
    Mr. Johnson. Mr. Chairman, my time has expired here. I will 
come back to these questions on another round, but you know, 
talking about hundreds of pages, the prior rulemaking process 
had tens of thousands of pages of analysis and comments. So I 
will comment on it in a minute. Mr. Chairman, I yield back.
    Mr. Lamborn. Thank you. The gentleman from South Carolina.
    Mr. Duncan. Thank you, Mr. Chairman. Just real quickly, we 
have had numerous hearings where folks from the Department of 
the Interior have been here and we have seen this constant 
merger and changes within the Department which seems to me they 
are consolidating power. That is just how I am going to leave 
it. I am concerned about the specific efficiencies that they 
are trying to attempt and this merger is trying to attempt. I 
am also concerned about employees losing their jobs through 
this merger. I am not going to ask any specific questions.
    I am going to allow the gentleman from Ohio to continue his 
line of talk, and I yield the balance of my time to him.
    Mr. Johnson. I thank the gentleman for yielding.
    Going back to the line of questioning that we had before I 
finished, the Ranking Member said that the 2008 rulemaking was 
a midnight rewrite, a rollback, if you will, which in fact it 
was a 5-year process. You are claiming now hundreds of pages of 
public testimony when the prior rulemaking process had 
thousands and thousands of pages of public comment. Clearly, if 
they think that the 2008 rulemaking process was a midnight 
rule, then my gosh this must be somewhere between coffee and 
breakfast rulemaking that you guys are doing because it is 
proceeding at breakneck speed.
    Specifically, I would like to know from you, how was the 
2008 rule a rollback? First of all, do you think it is a 
rollback, and--do you think it is?
    Mr. Pizarchik. We are engaged in our third year as far as 
this rulemaking----
    Mr. Johnson. Is the 2008 rule a rollback?
    Mr. Pizarchik. There are folks who have the belief that if 
you look at the----
    Mr. Johnson. What do you believe? I am asking you. Is the 
2008 rule a rollback?
    Mr. Pizarchik. The 1983 rule was replaced which provided a 
100-foot buffer to stream----
    Mr. Johnson. Is the 2008 rule a rollback, Mr. Pizarchik? 
Yes or no? Let me ask it another way. Maybe you can answer it 
this way. What can an operator do under the 2008 rule that you 
disagree with that he couldn't do under the Reagan-era rule?
    Mr. Pizarchik. He can bury streams with excess spoil 
pursuant to the law or pursuant to the regulation. That was not 
allowed under the----
    Mr. Johnson. But you testified earlier that there are laws 
in place already that restrict those kinds of things. So aren't 
you talking about maybe an operator rather than a regulatory 
action?
    Mr. Pizarchik. No. What I am talking about is appropriate 
and proper implementation of the statute.
    Mr. Johnson. OK. All right. You know, let me ask you a 
question about what led into this rewrite. This rewrite stemmed 
from a lawsuit, right?
    Mr. Pizarchik. Not entirely, no.
    Mr. Johnson. OK.
    Mr. Pizarchik. It stemmed from, if I may----
    Mr. Johnson. Why did not OSM and the Department fight the 
lawsuit and try to uphold the 2008 law that was in place?
    Mr. Pizarchik. There were two lawsuits on that. The 
Department had admitted errors in the rulemaking. We had a 
choice of trying to defend a rule that we admitted that there 
were errors in that rulemaking process, and we thought it was 
in the best interests of the American public to go forward with 
revising the regulation to modernize it. We have sought input 
from the public and an Advanced Notice of Proposed Rulemaking 
in 2009----
    Mr. Johnson. Let me ask you this, did the environmentalist 
group that brought the lawsuit have their legal fees repaid 
after the settlement?
    Mr. Pizarchik. I have no idea, Mr. Congressman.
    Mr. Johnson. Do you know how much the settlement on that 
lawsuit cost the American taxpayers?
    Mr. Pizarchik. I do not.
    Mr. Johnson. OK. Well, if you don't know, you know, I 
suggest that you should know. Do you think you can find out?
    Mr. Pizarchik. I believe that we could find out, and we can 
provide that----
    [The response to Mr. Johnson can be found on page 12.]
    Mr. Johnson. I would like you to find out if the 
environmentalist group that brought that suit had their legal 
fees repaid by the American taxpayer, and if so, how much.
    Is it safe to say that OSM and the Department were not 
upset to be sued by the environmentalists because it gave OSM 
more credibility to legally reopen the 2008 rulemaking process?
    Mr. Pizarchik. I don't know that I could----
    Mr. Johnson. Did that lawsuit bother you that you were 
sued?
    Mr. Pizarchik. That lawsuit was well on its way before I 
even got here on the job, and part of my job was figuring out 
how the best to proceed with that, and in my judgment it was 
best to proceed to put that lawsuit on hold and spend our 
resources on improving the regulations to modernize the science 
and the experience we have.
    Mr. Johnson. Mr. Chairman, I yield back and hopefully we 
have additional rounds.
    Mr. Lamborn. OK. Thank you. We will have a second round 
right now, and I will go ahead and recognize myself for 5 
minutes.
    Mr. Pizarchik, if OSM is giving fair consideration to all 
alternatives, and we talked earlier about there is a 400-page 
rule already written by OSM, has each alternative received 
equal treatment where they have received a 400-page writing for 
each of the alternatives?
    Mr. Pizarchik. We are still in the process of developing 
the proposed rule. We do not yet have a proposed rule. All of 
the alternatives are getting a fair evaluation, both on the 
environmental impacts and the costs and benefits of that. That 
information in accordance with NEPA I will be using to helping 
inform me to make an informed decision as to what should be in 
the proposed rulemaking.
    Another point, a number of the changes that we are looking 
at is a matter of carrying out some of the Executive orders 
where we are looking to modernize our regulations to improve 
clarity to remove redundant provisions or outdated provisions. 
So there is a significant portion of what we anticipate being 
in the proposed rulemaking that will better improve the quality 
of those regulations.
    Mr. Lamborn. Well, the part I am concerned about is the 
part that will kill jobs and stop coal mining. So when you look 
at the EIS, will it look at the impacts to manufacturing and 
service industry and the electrical generation industry if we 
have to switch to an alternative and/or higher cost fuel when 
the production of coal is curtailed through the Stream Buffer 
Zone Rule?
    Mr. Pizarchik. First off, I am not an expert on the 
economics. That is why we have hired outside experts to do the 
analysis. I am not familiar with the intimate details of what 
the analysis is going through. I am confident that our 
contractor will look at what all of the requirements are under 
the Federal law in order to come up with a NEPA-compliant cost-
benefit analysis and draft Environmental Impact Statement for 
us. So, all of that information will be--whatever is 
appropriate under the law will be considered and evaluated for 
the various options, and this is not a job-killing rulemaking. 
The numbers which you refer to were numbers that the contractor 
put together. Those numbers were fabricated based on 
placeholder numbers and have no basis in fact.
    Mr. Lamborn. So has there been a second contractor who has 
come up with different numbers or you just don't believe what 
the first contractor came up with without any real evidence?
    Mr. Pizarchik. The numbers that the first contractor came 
up with were based on no evidence. They have no basis in fact. 
The current contractor that we have hired to complete the 
economic benefits and costs of the rulemaking is still in the 
process of preparing that. I don't have that information. That 
information will be used to help inform----
    Mr. Lamborn. Well, I certainly look forward to hearing 
that. I think common sense would tell me, an old farm boy also 
from Kansas, that if you stop the production of coal mining 
because the rules for extracting it are more stringent, you are 
going to have less coal, and therefore you will have less coal 
mining. Therefore, you will have fewer jobs mining coal. So I 
don't know what the number is. I just know there is going to be 
a number. I hope it is an accurate number.
    And on that point, will the EIS take into account the loss 
of jobs? I asked about the higher cost of coal. Will it take 
into account the loss of jobs?
    Mr. Pizarchik. Again, I believe that the NEPA requirements 
will be fulfilled by this contractor taking into consideration 
all of the environmental benefits and costs of not only the 
preferred alternative but the other alternatives, including the 
no action alternative. So we expect to have all of that 
information to be used for helping to make my decision on that, 
and then once I make the decision, we get out what is in the 
proposed rule, you all, the public, the industry, the citizens, 
the environmentalists will all have their opportunity to look 
at that information and provide their input on it. The State 
regulators will have that input. It is the way the process is 
supposed to work.
    Mr. Lamborn. OK. And to be real specific, on the economic 
analysis will we also see what will be lost to States and the 
Federal Government, the loss of severance taxes, for instance, 
directly costing governments revenue, and will we see the 
indirect costs? When you have fewer jobs, that is fewer people 
paying taxes.
    Mr. Pizarchik. Again, Mr. Chairman, I am not familiar with 
all of the intimate details of what is required to be in the 
environmental analysis required by the National Environmental 
Policy Act, but you have to remember that the Surface Mining 
Act never contemplated that every ton of coal could be mined 
regardless of the environmental impact. It is a balancing act 
between helping meet our country's energy needs and protecting 
the people and the environment from adverse effects of mining.
    Coal is not in short supply. We are exporting coal in this 
country out of the ports in the South, the ports in the East. 
There are even proposals to build a new port in the West to 
export coal. We have the coal production to meet our needs and 
saying that rulemaking and the regulations is going to cost 
jobs, that isn't any more true today than it was 40 years ago 
when the Surface Mining Act was passed and the regulations were 
passed.
    What we have is better protection of the environment, 
better protection of the people, balanced with meeting our 
country's energy needs, and we will continue to do that. That 
was part of what my job is, to make sure we have that balance.
    Mr. Lamborn. OK. Well, I hope that that is what happens. I 
now recognize the Ranking Member for 5 minutes.
    Mr. Holt. Thanks. Director Pizarchik, following along these 
lines, after PKS Services completed its draft analysis, it was 
forwarded for review. Isn't it true that Mr. Bradley Lambert, 
Deputy Director of Virginia Department of Mines, submitted 
comments that contain--stating that the information contained 
in the documents prepared by PKS was, ``inaccurate and 
incomplete''?
    Mr. Pizarchik. Yes.
    Mr. Holt. Isn't it true that Kathy Ogle, a hydrologist at 
the Wyoming Department of Environmental Quality, wrote of the 
PKS work, ``the analysis is insufficient for a document of this 
importance''?
    Mr. Pizarchik. Yes.
    Mr. Holt. Isn't it true that Thomas Clarke of the West 
Virginia Department of Environmental Protection submitted 
comments stating that PKS document displays very little depth 
of understanding of technical issues; that Mr. Bruce Stevens, 
Director of the Indiana Division of Reclamation, on the PKS 
analysis wrote that ``the logic used is not readily apparent 
and appears in many cases to be based upon erroneous 
assumptions, incorrect interpretations, and a lack of 
understanding of current programmatic practices''; and David 
Lane, a civil engineer within the OSM office, wrote ``the 
writers seem to have little knowledge of Appalachian mining 
practices and overall surface mining practices and this should 
be rewritten by professional engineers, geologists, and 
regulatory experts with a working knowledge of the subject 
matter''?
    Mr. Pizarchik. I believe those are all true.
    Mr. Holt. Would you agree then that with the near universal 
assessment, not only by OSM experts but also by experts of the 
State agencies where coal mining is widespread and strongly 
supported, that the work done by this contractor, PKS, was 
incomplete and inaccurate and that there are lots of reasons to 
take their draft work with a grain of salt or a grain of sand 
or a grain of coal or perhaps many grains?
    Mr. Pizarchik. Yes, I would agree with that.
    Mr. Holt. And so should we place any more credence in their 
job impact numbers than we do in their interpretations, 
assumptions, and conclusions about mining practices and other 
things that have been declared to be without basis?
    Mr. Pizarchik. No.
    Mr. Holt. So I do want to make that point. Of course, we 
are interested in jobs, but you know, let's have a debate based 
on the facts, and I hope that we will have contractors working 
on documents based on the facts.
    Back to this proposed reorganization. I understand and you 
were clear that the details of the consolidation of OSM and the 
Bureau of Land Management are not firm and there is much that 
you can't yet discuss. But can you assure this Committee that 
the reorganization will not harm the regulation of mining 
activities on public, State, and private lands and harm the 
public interest in that?
    Mr. Pizarchik. Perhaps the best way I can do that is to 
read something that Secretary Salazar said to the OSM and BLM 
employees when he made his announcement last week. He says, 
``The second thing that I want to make sure is understood here 
is that OSM is a separate and independent entity. It is by law. 
It is so under SMCRA and as so it will remain. With a Director 
who is a Presidentially appointed, Senate confirmed person, I 
recognize the independence of OSM under the statute and the 
function that it carries on. So I don't want anybody to walk 
away from here thinking that what we are doing is somehow 
minimizing the future of OSM. We are not doing that. It will 
remain an independent agency.''
    And there are also experts within OSM that it is believed 
that our expertise in dealing with reclamation can actually 
help and improve the reclamation.
    Mr. Holt. Well, that is the kind of assurance that I am 
looking for from you, that this will not harm and, if possible, 
will improve our ability to properly clean up mines, to reclaim 
lands, Federal, State, and private, and that revenue collection 
will not be harmed in any way.
    Mr. Pizarchik. And from the standpoint of--well, what we 
are trying to prove, as a small agency, it is difficult for us 
to compete, and the Secretary's belief is that we will be able 
to compete better in these difficult budgetary times in order 
to have the resources to prevent further erosion of OSM's core 
function.
    Mr. Holt. Well, I will take that as a reassurance, and I 
thank the witness. I thank you, Mr. Director.
    Mr. Lamborn. OK. I now recognize the gentleman from Texas.
    Mr. Flores. Thank you, Mr. Chairman. Funny, listening about 
all these farm boys. I am a former ranch hand from Texas so I 
guess I am related but slightly dissimilar.
    One of the messages I would like for you to take back with 
you is that the Department of the Interior has no statutory 
authority to merge these functions, and so it sounds like you 
are going to try to keep them separate, and I hope that is 
actually the case.
    Ranking Member Markey and Ranking Member Holt have had 
quite a dialogue with you talking about PKS and saying that 
they lack the experience for conducting this analysis. I think 
that is essentially what you have agreed with. Is that the 
case?
    Mr. Pizarchik. Based on our experience with the work that 
they produced, yes.
    Mr. Flores. OK. That raises the next question. Why were 
they hired in the first place?
    Mr. Pizarchik. We used a competitive hiring process. They 
represented themselves as NEPA experts. With the 
representations, it appeared to be the case. They indicated 
they also had qualified subcontractors who had done work both 
in the environmental community and in the mining community. At 
that time, the team that evaluated them had determined they met 
the requirements for their demonstration, that they appeared to 
be a contractor who was qualified to perform this work.
    Mr. Flores. An OSM team made the evaluation, is that 
correct, and did the due diligence?
    Mr. Pizarchik. That is my understanding, yes.
    Mr. Flores. OK. Didn't do a very good job, I guess, did 
they?
    Mr. Pizarchik. 20/20 hindsight, I would have--we all 
expected better results.
    Mr. Flores. OK. And then what I understand, who do you 
think made the mistakes in the PKS work? Is it PKS or the 
subcontractors?
    Mr. Pizarchik. I guess from the standpoint of looking back, 
I am not in a position to go into the intimate details of the 
other things. The fact is that when we had our concerns we 
shared them with PKS with a notice of cure, giving them the 
opportunity to cure the problems with the products that they 
were supposed to deliver. They provided their response and they 
indicated that they acknowledged what they provided was 
incomplete on that, and from the standpoint of looking at the 
aspects of it, I think there was probably some things where 
that complicated things, and we reached the end that we all 
concluded, that PKS and the Department concluded that it was in 
the best interest of both parties to end the contracting 
relationship. We ended it 2 months early from when it was set 
to expire. We had an option to renew that we elected not to 
renew, and so from all the things considered, we just thought 
it was in the best interest of everybody to go forward.
    Mr. Flores. From what I understand, the OSM picked the 
subcontractors that PKS was supposed to use; is that correct?
    Mr. Pizarchik. Not to my knowledge.
    Mr. Flores. OK. The team that hired PKS, did you use the 
same team to hire the replacement contractor?
    Mr. Pizarchik. I don't recall the exact composition.
    Mr. Flores. Would you get that back to us, please? That 
would be pretty interesting because if I can't trust your 
judgment on the first contractor, even though OSM appointed the 
subcontractors to get this result, how are we to trust, if 
particularly the same team is used, how are we to trust the 
judgment going forward? That is troubling to me.
    [The response to Mr. Flores can be found on page 13.]
    Mr. Flores. One last question. You know, the first 
analysis, I mean you said it was flawed. It did point out job 
losses that were pretty extensive. In your rulemaking, what 
level of job losses is acceptable?
    Mr. Pizarchik. Under the National Environmental Policy Act, 
we are required to look at the cost and the benefits of it, and 
it is a balancing of those parts. So this is a rulemaking that 
we need to look at all of those factors and take that all into 
consideration. I don't know that there is a magic number one 
way or the other. We believe that there are going to be 
significant environmental benefits out of this rulemaking, and 
our job is to strike that appropriate balance and that is what 
we intend to do, once we get the information that allows us to 
make the informed decision.
    Mr. Flores. I think most economists would say if coal 
prices rise substantially as a result then you have higher 
energy prices; high energy prices result in lower economic 
activity; lower economic activity results in fewer Americans 
employed. Are you going to look at this analysis on a macro 
basis like that, like the real world does?
    Mr. Pizarchik. Again, the analysis that is being prepared 
by the contractor is what is required under the National 
Environmental Policy Act. I am not prepared today to tell you 
that I am an expert on this and that I know all the ins and 
outs of those details. I do not.
    Mr. Flores. Well, I hope it is a different team that picked 
the contractor than picked the last one. Thank you.
    Mr. Lamborn. OK. As we begin to wrap up, I recognize the 
gentleman from Ohio.
    Mr. Johnson. Thank you, Mr. Chairman. I want to get back to 
the contractor, the contractor that was fired. Did any official 
at OSM or the Interior or any part of the Administration ask 
that contractor to change the assumptions for the economic 
analysis which would then lower the jobs impacts of their 
analysis?
    Mr. Pizarchik. Well, first of all, the contractor was not 
fired. As regarding any official, anybody in the management 
level, I don't believe that occurred.
    Mr. Johnson. Remember your last testimony when you 
testified, it was a mutual agreement between your Department 
and the contractor that the contractor had not produced 
results, correct?
    Mr. Pizarchik. What I testified, and I believe, is that the 
contractor and us agreed that it was in the mutual interest of 
both parties----
    Mr. Johnson. Because they did not produce the results that 
you were looking for.
    Mr. Pizarchik. Because, yes, the contract requires them to 
provide a NEPA-compliant document----
    Mr. Johnson. OK. In your earlier testimony today, you 
claimed that there was no basis in fact for their conclusions. 
Then you turn around and say that you are not an expert. So who 
made the determination that there was no basis for that 
contractor's determinations?
    Mr. Pizarchik. Congressman, I think everyone would agree 
that if you use placeholder numbers that have no basis in fact 
or anything and you plug that into a formula to come up with 
job numbers that those job numbers----
    Mr. Johnson. Did you make that determination as a nonexpert 
or did you get an outside independent agency to look at that 
contractor's results? You are not the expert; you said so, 
right?
    Mr. Pizarchik. I said I am not an expert on the NEPA 
requirements----
    Mr. Johnson. OK. It is amazing to me that we sit and listen 
to my colleague from Massachusetts talk about how dismal of a 
performance this contractor did, and yet he wasn't fired. Was 
he paid?
    Mr. Pizarchik. He was paid for the--as I mentioned 
earlier--he was on a time and material basis----
    Mr. Johnson. How much was the contractor paid?
    Mr. Pizarchik. The contractor was paid $3.7 million.
    Mr. Johnson. $3.7 million, my goodness. Wow. Wow. Have you 
heard many of the President's speeches these days as he is out 
campaigning across the country? You talked about this 
rulemaking is going to give or this rulemaking change is going 
to give us environmental benefits. Have you heard the President 
talking about his campaign? Does he have an environmental 
benefits bill before the Senate and the House or is he focused 
on creating jobs according to him?
    Mr. Pizarchik. I have not been listening to----
    Mr. Johnson. The focus is on creating jobs, right?
    Mr. Pizarchik. Yes, and----
    Mr. Johnson. OK. Let me ask you this. Is it safe to say, 
Mr. Director, that if you further restrict coal mining activity 
with an irresponsible rewrite of a rule that is already in 
place and you further restrict coal mining activity, that is 
going to cost America jobs, right, and reduce coal production?
    Mr. Pizarchik. That is not safe to say.
    Mr. Johnson. It is not? How can you come to that 
conclusion?
    Mr. Pizarchik. Because if you look at the history of the 
rulemaking, we have to strike that balance. If you have to take 
more sampling of the streams to get the baseline data, you are 
going to need more people to do that. It takes more people to 
haul that excess spoil from the top of the mountain to place it 
in the valley below----
    Mr. Johnson. It takes more people to enforce your rule than 
it does to mine coal, for crying out loud.
    Mr. Pizarchik. That is not true.
    Mr. Johnson. You know, I don't think you guys have the memo 
about what your President, our President, said in his State of 
the Union. He said let's create jobs, let's have regulatory 
reform. Instead of regulatory reform, what we get from the 
Department of the Interior and the Department of Office Surface 
Mining and Reclamation is further overreach.
    Mr. Pizarchik. We don't even have----
    Mr. Johnson. Let me ask you a question, the last time you 
testified before this Committee, I asked you if you had any 
contact with the Executive Office of the President on this 
issue. Do you recall that line of question?
    Mr. Pizarchik. Vaguely, yes.
    Mr. Johnson. At first you replied no but then after the 
questioning portion of the hearing was over, a member of your 
staff pointed out to you that the Council on Environmental 
Quality is a part of the Executive Office of the President, 
right?
    Mr. Pizarchik. That is correct.
    Mr. Johnson. OK. And that, therefore, you have had contact 
with the Executive Office of the President. Briefly with whom 
and approximately when did you have contact with the staff or 
the Counsel on Environmental Quality or other Executive Office 
of the President about this particular issue?
    Mr. Pizarchik. Well, first, I am not knowledgeable with who 
all is in the Office of the White House as you said----
    Mr. Johnson. There is expertise lacking all across the 
board in your Department, isn't there?
    Mr. Pizarchik. Can you name everyone?
    Mr. Johnson. I am asking you the question. When did you 
talk to the President's staff?
    Mr. Pizarchik. The folks who I have talked to are on the 
list of documents we provided where we shared copies of some of 
the documents with them, and I provided briefing to a couple of 
staff members on I think OMB or NCEQ.
    Mr. Lamborn. If the gentleman could suspend for a moment, 
it has come to my attention that earlier I neglected to give 
the gentleman from Ohio his own 5 minutes because others had 
yielded to him and I assumed that that was his time. So to even 
everything out, you have an additional 5 minutes, and you can 
use all or part of it and then we will be finished.
    Mr. Johnson. Thank you. I appreciate it. I am sure the 
Director appreciates it as well. Let's continue.
    So you have provided this Committee with a record of your 
communications with the Executive Office of the President?
    Mr. Pizarchik. We have provided a response to a request 
that we have received from this Committee and from Chairman 
Hastings on that, and I don't recall exactly what is all in 
that, but we have provided answers to those questions. There 
are still some more documents that are being reviewed through 
the process that will be provided as soon as we can complete 
the review.
    Mr. Johnson. OK. I want to get into the merger a little 
bit. I asked some questions yesterday of your potential future 
boss Mr. Abbey, and I was not impressed with the answers that I 
received. Perhaps maybe you have a different slant on this 
since the two of you may have had a chance to talk. Maybe you 
can shed some light on it. How is this merger allowed to take 
place when SMCRA, the law, clearly prohibits the merger of the 
two agencies?
    Mr. Pizarchik. I believe the provision in SMCRA you are 
referencing is the one prohibiting OSM from having impact or 
any connection with an agency that develops coal; is that 
correct?
    Mr. Johnson. That is correct.
    Mr. Pizarchik. All right. We are in early stages of 
evaluating this, and as the Secretary indicated----
    Mr. Johnson. Is it a proposed merger or is it a decision 
that has already been made?
    Mr. Pizarchik. The Secretary announced his Secretarial 
Order last week. The Secretarial Order provides for 
consultation over this month, and it provides for it to take 
effect on December 1, and then we are to prepare.
    Mr. Johnson. So it is not a proposed merger. The Secretary 
has announced that it is a merger, correct?
    Mr. Pizarchik. The Secretary's order is quite clear on it, 
and that we are going to be engaging in consultation with the 
employees----
    Mr. Johnson. On how to implement the merger?
    Mr. Pizarchik.--with Members of Congress and all that 
information will be used to help develop a plan and a schedule.
    Mr. Johnson. A plan and schedule on how to implement?
    Mr. Pizarchik. We have to--I guess we have to get that 
input----
    Mr. Johnson. When do----
    Mr. Pizarchik.--how this consolidation is to----
    Mr. Johnson. When does the Secretary plan to come before 
Congress, perhaps this Committee, and talk about the law that 
is in place that would prohibit that merger?
    Mr. Pizarchik. I can't answer that but the statutory 
provisions under which this is looked at, we are going to be 
working with our solicitors and looking very carefully at what 
would be allowed under the law and what would not be allowed 
under the law. We intend to do this within the full bounds of 
the law without seeking legislative amendment.
    Mr. Johnson. Mr. Director, I have to tell you that this 
whole process is very concerning to me. We have job numbers 
today. In the last 4 months we created less jobs in the month 
of October than we did over the previous 4 months, any of the 4 
months, unemployment still at 9 percent, and yet your 
Department, this Administration continues down this road of 
job-killing regulatory policies. It is mind boggling to me that 
you can't, number one, admit that and, number two, stop that.
    Ohio gets 87 percent of its energy from coal, and I can 
tell you that should this Stream Buffer Zone Rule go through--
and I am going to continue to fight with all I have to make 
sure that it doesn't happen--it is going to hurt a lot of 
people in eastern and southeastern Ohio. And so I dare say, as 
long as you are in your job, you and I are going to be spending 
a lot of time over the next little while.
    So, with that, I would like to yield some time to my 
colleague from Texas.
    Mr. Flores. Well, Mr. Director, thank you for appearing 
today. Since the Secretary's order said that he was going to be 
seeking congressional input, I want to go ahead and give you my 
input and let you know I think that you need to report back to 
him that at least this Congressperson thinks that he has no 
statutory authority to merge these agencies.
    Thank you.
    Mr. Holt. Would the gentleman yield to me for a couple of 
seconds?
    Mr. Flores. It is Mr. Johnson's time, I believe.
    Mr. Johnson. You have one second. Mr. Chairman, it is up to 
you.
    Mr. Holt. May I unanimous consent for 15 seconds?
    Mr. Lamborn. Please be brief.
    Mr. Holt. Thank you.
    I just wanted to reassure Mr. Johnson that there is nothing 
nefarious or conspiratorial or clandestine about conversations 
with Council on Environmental Quality. An agency should go to 
the Council on Environmental Quality. That is the organization 
that coordinates administrative actions with respect to the----
    Mr. Johnson. Would the gentleman yield?
    Absolutely. What I am trying to determine here is if they 
went, and when they went, and if they've let the President of 
the United States, who is out campaigning the country, talking 
about creating jobs, if they've let him know what they are 
about to do to the coal industry and jobs across eastern and 
southeastern Ohio.
    Mr. Lamborn. OK. We are going to wrap up now. This has been 
an invigorating discussion. I appreciate the Director being 
here, taking all the questions and supplying his testimony.
    Members of the Committee may have additional questions for 
the record. I would ask that you respond to these in writing.
    But finally, I need to say, on February 8, Chairman 
Hastings and I sent the OSM Director, Mr. Pizarchik, a letter 
requesting documents surrounding the dismissal of Polu Kai. It 
is now 10 months later and while some documents have been 
produced, the Committee is still waiting on documents that we 
requested then.
    This Committee has a constitutional duty to conduct private 
oversight of the Executive branch, and we are unable to perform 
that duty if the Administration does not comply with our 
request.
    Republicans have committed to running an open and honest 
House of Representatives, and we expect the same out of an 
Administration that President Obama has referred to in the same 
manner.
    That being said, Director Pizarchik, I hope that we can get 
an assurance from you today that the balance of the documents 
that we requested will be promptly delivered to the Committee.
    If there is no further business, without objection, the 
Committee stands adjourned.
    [Whereupon, at 12:36 p.m., the Subcommittee was adjourned.]

                                 
