Obama Tightens Screw on America's Coal Supply

Marita Noon
Posted: Nov 06, 2011 12:01 AM

Weeks after the infamous BP oil spill in late-April 2010, the Minerals Management Service (MMS), the agency that managed leasing and regulation, was split up into three parts.

Addressing the reorganization, Interior Secretary Ken Salazar, said: “We will be able to strengthen oversight of the companies that develop our nation’s energy resources.” He addressed a perceived conflict of interest between departments due to the leasing and regulatory functions being in one agency—one brings in revenue and one regulates (and perhaps punishes) the businesses generating the income.

His mid-May 2010 actions bring his new Secretarial Order to reorganize a different agency into question.

On October 26, 2011, Secretary Salazar signed Secretarial Order 3315 that will consolidate the Office of Surface Mining Reclamation and Enforcement (OSM) within the Bureau of Land Management (BLM).

The Order states that “fee collections” and “regulation, inspection and enforcement, and state program oversight” will now be integrated—the very tasks split out within the MMS reorganization.

Because this new order seems in direct contradiction to the 2010 SO 3299, it raises suspicion as to the true purpose of the agency reorganization—especially since the impacted industry is the administration’s favorite villain—coal.

SO 3315 was announced to the surprise of most in the industry. Charlie Boddy, a mining and government relations consultant with more than 40 years in the industry and former VP of government relations with Usibelli Coal Mine Inc., said when he first heard the announcement, he thought it was a joke. “It is,” he said, “without a doubt, the most bizarre proposal to come out of the Obama Administration.”

The fact that there was no consultation with the stakeholders, states, or Congress raises additional concerns. If there was a desire to work with the industry, the general belief is that they would have been involved. The order’s surprise element can’t mean good things for coal mining.

On November 4, as a part of a hearing on an investigation into a re-write of the 2008 Stream Buffer Zone Rule, Representative Doug Lamborn (R-CO) stated: “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’s ability 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 the BLM.”

Doc Hastings (R-WA), Chairman of the House Natural Resources Committee, issued the following statement: “I have serious concerns about this Secretarial Order to suddenly and dramatically alter the management of coal mining and the multiple-use of Western BLM lands. The Obama Administration has not made secret its desire to put an end to America’s coal-mining industry, and this appears to be one more step in that direction.”

Because of the “bombshell” nature of the announcement, the administration’s attitude toward the coal industry, the totally different missions of the OSM and the BLM, and the fact that they operate under different specific provisions and acts of Congress, the proposed merger can only be considered suspect.

In an internal memo to the DOI team, Secretary Salazar states: “This integration reflects our ongoing commitment to good government” and claims that it is about “Doing more in a limited budget environment.”

The OSM is a little agency by comparison to the BLM. OSM's 2011 budget appropriation is about $160 million compared to more than $1.1 billion for BLM. OSM has about 500 employees, compared to 10,000 at BLM. “In the scheme of government fat, OSM is one of the tiniest little targets you can take aim at,” said Kathy Karpan, a former OSM director. “It's a little, tiny entity that would be lost at BLM.”

Industry sources fear that OSM will be lost inside the BLM and view the move as a way to make coal mining more difficult; to delay permitting. Normally a coal mine can be permitted through OSM in less than a year. Permitting of a hard rock mine through the BLM can take 7-10 years.

The OSM deals with mines on private or Indian lands—mostly in the east. They cooperate with the states. They do regulation.

The BLM deals with federal lands—mostly in the west. They have little experience with private lands or state agencies. The generate revenues.

Like last year’s SO 3310 that circumvented Congress’ unique ability to designate Wilderness Areas by creating a new “Wild Lands” designation, SO 3315 brings authority into question. Insiders believe that a reorganization of this magnitude requires congressional action.

Some industry groups are taking a wait-and-see approach: “It may be a good idea, but no one really knows.” Coal mining companies are still evaluating, but initial reactions are not supportive.

History tells us that we do not need to “wait and see.” The longer there is silence, the harder it will be to reverse the order, which is scheduled to become effective December 1, 2011—following consultation with applicable congressional committees and will remain in effect until “amended, superseded, or revoked, whichever occurs first.”

While this may seem like a little issue in light of all the big problems we are facing in America, it is one more in a string of power grabs designed to take away authority from the states and move it to the federal government—meaning more centralized power. Don’t let them slip it in until “revoked.” Call Congress and stop SO 3315 before it starts.

Ultimately, less coal mining means job cuts, higher electricity prices, and a diminished America.