GIVE IT BACK TO THE STATES

BY: PHIL DINSMOOR

Quality Act and created the Wyoming Department of Environmental Quality (DEQ) to regulate the natural resources of the state including the mining of coal and other minerals in the early 1970s. The State anticipated the emergence of large-scale mining and planned to avoid some of the environmental degradation experienced in the eastern states.

Wyoming and other western states.

Coal became a valuable commodity in North America before recorded history when native tribes burned it to bake their pottery. Commercial coal production began in the eastern part of the continent in the mid-1700s and moved into the interior a century later. Commercial coal mining was first recorded in Wyoming and other western states in the 1860s to provide fuel for the railroads.

Regulation of the environmental effects of mining was discussed and voluntarily implemented in Indiana and perhaps other Midwest states in the early part of the 20th century. However, it was after World War I that the legislatures of West Virginia, Indiana and Ohio passed some of the first laws regulating the environmental effects of coal mining. By then, the sins of our mining forefathers were widespread in Appalachia and historical mining areas in the central United States including Ohio, Indiana, Kentucky, and Illinois. Many mine sites were abandoned, pits were left open and properties were left ungraded and barren. These sterile sites contributed then and now, to erosion, water and air pollution. In addition to the environmental degradation, mine sites were dangerous to human health and welfare and of little value to the private owners of these properties.

Widespread mining in the western United States began to appear in the late 1960s in response to increasing electrical demand in the country. The 1973 Arab oil embargo solidified the future of western coal mining when the federal government encouraged United States energy independence after having leased some of the first large tracts of western coal properties to mining firms. Wyoming enacted the Wyoming Environmental

At about the same time, the federal government began discussions of a national law to regulate the effects of coal mining on the environment. It was not until 1977 that the Surface Mining Control and Reclamation Act (SMCRA) became federal law. SMCRA drew heavily from many of the 38 then-existing state regulatory programs. But environmental conditions at mines across this country can be as different as night and day. So too, were the state laws that had been enacted to regulate mining. Therein lies one of the most significant problems with this first nationwide regulatory effort. Applying provisions from state laws in regions of significantly different environmental conditions is like trying to fix an American-made automobile with metric tools.

Differences among the states may be physical or environmental. The surface terrain may range from mountainous to flat-land or river-valley conditions. The near-tropical climate of the nation’s southeast states is far different from the almost-polar conditions found at Alaska’s coal properties. High altitude mines in Colorado have very different obstacles than the lowland mines in the Mississippi and Ohio River valleys. Each of these specific environmental conditions requires different strategies to properly and adequately control the negative effects of mining.

One of the many provisions of SMCRA is the opportunity for states to set up their own programs and apply for “primacy” to regulate coal mining within their borders. This is based on the finding of Section 101 of SMCRA. That section acknowledged that states should be encouraged to take primacy in the regulation of coal mining because of the tremendous natural variability in physical and environmental conditions.

It took Wyoming approximately three years to revise its mining statute and regulations as well as administrative procedures, and prepare the necessary justification to obtain primacy. But after approval of the state program in 1980, the federal agency retained a significant permitting and compliance role in Wyoming. Duplication, not primacy, was the practice for a number of years. Even today, the duplication persists mostly on federal lands which host the majority of mines in

SMCRA specifically reserves to the Secretary of Interior the obligation to approve mining plans on federal lands. (More than 48% of the surface estate and 70% of the mineral estate in Wyoming are owned by the federal government. These are considered federal lands.) Therefore, virtually all coal mines in Wyoming are subject to dual regulation from the federal and state governments. The federal agency has backed off of this dual regulation in some ways in Wyoming. However, they continue to expend staff time and funds to conduct reviews of application documents that duplicate the efforts of the state, instead of relying on the DEQ’s review in order to proffer their non-delegable approval. This unwarranted duplication has and continues to frustrate the industry and the state government, to add significant delays to the regulatory process, and to cost taxpayers unnecessary expense.

The Office of Surface Mining Reclamation and Enforcement, (OSMRE) proposes to have approximately 500 federal employees and an estimated budget of $155 million to implement the nationwide regulatory program for the coming fiscal year. A large portion of this funding is associated with a technical staff whose job is to oversee the 500 pages of regulations including more than 200 pages of permitting and on-the-ground performance standards. Their jobs also involve reviewing state agency regulations to ensure they are no less stringent than the applicable federal regulations. Over the 45-year history of SMCRA, taxpayers have paid nearly $7 billion to fund OSMRE.

This is not a huge expense on an annual basis compared to other federal programs. But how many duplicative programs like this does it take to reach a “significant” expenditure?

A major reason for this expensive duplicative effort is the extensive set of federal regulations. It would seem that the regulations promulgated to implement a federal law that purports to encourage and support state primacy would be minimal, setting broad standards for the state programs to achieve. Moreover, the variability in mining conditions mentioned above, as well as the variable nature of mining methods themselves would suggest that nationwide standards would be general and high level, leaving detail to the individual states. This program should be an example of the practice of federalism.

But this is clearly not the case, and the coal industry may share in the blame. Between 1965 and 1980, environmental regulation at the federal and state levels gained considerable momentum. Because of their past sins in the eastern and midwestern states, the coal industry was an easily-justified target for regulatory burdens. This was true despite increased emphasis that was being placed on energy independence. In hindsight, perhaps the development of the federal regulatory program also reflected the fact that few resource-based industries had ever been regulated with a nationwide program. The public and the growing environmental consciousness were going to ensure the federal government got this right.

The ideal solution to this duplicative and poorly focused regulatory environment is to reduce the scope of the federal law and regulations. The program, in its simplest form, should involve regulation by the state agency or the federal agency, but not both. When the federal agency has a non-delegable obligation, they should rely on any state reviews, data-gathering, or actions to support their decisions. When the state is deficient in their implementation of primacy in the program, then the federal agency should take action to correct the situation or take over regulation in that state. By eliminating all redundant actions, the federal expenditure can be reduced to the necessary oversight and those narrowly defined non-delegable actions.

It is unlikely, now, that reducing the federal effort would spur significant changes in the state programs. After 40 years most states have developed processes and procedures that work despite the duplication. We might expect to see some tailoring to revise or remove unnecessary and ill-fitting federal requirements. We might also expect to see changes to some of the administrative requirements that came from federal involvement.

Reducing the scope and involvement of the federal program in Wyoming is unlikely to occur. The effort could be expected to garner vocal opposition from environmental organizations. In addition to claims of gutting environmental legislation, the supporters of federal involvement are likely to suggest that those states like Wyoming that are highly dependent upon the resource-based extractive industry cannot maintain the proper or necessary impartiality that is necessary for a regulator. This was one of the primary justifications for passage of SMCRA and establishing the federal agency over 40 years ago.

The history of the Wyoming regulatory program shows there is little validity to this claim. Relationships between the state regulator and the regulated community in Wyoming have been, at times contentious, such as when self-bonding rules were significantly tightened in recent years. For most of the past 45 years however, the relationship between the state and the industry has been guardedly amicable and productive for two major reasons.

First, in a state favoring limited government such as Wyoming, the establishment of a state regulatory agency such as the DEQ to regulate mining was initially seen as infringement on private rights in the late 1960s and early 1970s. Enter the federal government and its burgeoning regulatory oversight program a decade later, and OSMRE became the intruder and the violator of private rights. DEQ was viewed in a more positive light.

Secondly, large-scale coal mining in the west was a new activity in the 1960s and 1970s. At least some of the mining companies were demonstrating that they could avoid making the mistakes of the past, operating in a more responsible manner in the western states including Wyoming. Coal production exploded in Wyoming, reaching more than 400 million tons per year after 2010. During this same time, the development of world-class mining techniques and equipment put Wyoming on the mining forefront. Huge mining equipment was developed, tested and proven in Wyoming. Blasting techniques were refined until blasting became a primary method of moving earthen materials, not just breaking up the material for large mining equipment to move. Equally as important, world-class environmental protection and mine reclamation techniques and practices were being developed, tested and proven. Today, coal mines in Wyoming can boast that they have been on the leading edge of many of the most highly successful reclamation practices. And for this to happen, it was necessary for the regulatory agency to be in lockstep with that effort, perhaps even leading the way at times.

The Wyoming DEQ was open to advances in reclamation techniques, equipment and many environmental protection methods that helped establish successful environmental protection and mine reclamation practices. Examples range from the first highly successful methods for large-scale establishment of sagebrush and other shrubs vital to wildlife habitat reclamation, to advances in finding suitable substitutes for the often-absent topsoil resource that is vital to establishment of vegetation. Some of the world’s most effective strategies for controlling fugitive dust from crushing and coal handling facilities were developed in Wyoming with full cooperation of the Wyoming DEQ. And as mentioned, the success of mined land reclamation in Wyoming in creating a viable and highly productive land use after mining cannot be rivaled anywhere in the world.

I conclude that reducing the size of the federal bureaucracy should be pursued. It has taken 45 years, but the western states, especially Wyoming, have made the case that state primacy can work and that a less adversarial relationship, if properly monitored, can be more productive and successful than the heavy-handed, inefficient over-regulation introduced by the federal government. Minimal federal oversight and involvement is needed. Instead of the states simply becoming clones of a federal bureaucracy, a state with an economy that is so highly dependent on resource extraction can function reliably and responsibly with so much at stake.

B u i l d i n g

C a r b o n Va l l e y

- l i s t e d R a m a c o

R Re s o u r c e s . I n W y o m i n g w e ’ v e o p e n e d t h e i CA M , t h e w o r l d ’s f i r s t c o a l - t o - p r o d u c t s r e s e a r c h c e n t e r, w h e r e g r o u n d b r e a k i n g w o r k i s b e i n g c o n d u c t e d b y t o p m i n d s i n c a r b o n a n d m a t e r i a l s c i e n c e .

C a l i f o r n i a b u i l t S i l i c o n V a l l e y.

W W y o m i n g d e s e r v e s i t s o w n C a r b o n

V a l l e y

Le a r n m o r e a t w w w. r a m a c o c a r b o n . c o m