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Let’s
Get Out of the Noose and Back in the Loop: Goals for American Mining in the Politics of Policy
Denver, Colorado March 7, 2001
Remarks by Jack N. Gerard President
& Chief Executive Officer
National Mining Association
To the 2001 Annual Meeting of the Colorado Mining Association
Thank you, Stuart Sanderson, for your introduction.
And thank you ladies and gentlemen for your welcome.
I’m a long-time Westerner, and there are times when I
feel like I’ve been coming to Denver on business since it
was the mining camp they called Cherry Creek.
But I’ve never felt more like one of the family than today.
The Colorado Mining Association is one of our industry’s
most diverse and effective state associations. It also blends
the hardrock and coal cultures in ways that parallel the National
Mining Association.
Our two organizations have a history of effective cooperation.
The most recent example is the litigation that stopped the application
of a federal regulation that was designed around preconceived
notions and outcomes, a step meant to lay the groundwork for both
demagoguery and additional regulations aimed at the further constriction
or deterrence of mining.
My reference, of course, is to the attempt by Ms. Browner’s
Environmental Protection Agency to improperly require that mining
report itself year-in and year-out as the nation’s foremost
toxic polluter – the rule they called the Toxics Release
Inventory.
The passing of the Clinton era left the Code of Federal
Regulations filled with time bombs akin to Ms. Browner’s
TRI rule in spirit, concept and intent.
Stuffing new booby traps into code was the primary purpose
of the midnight regulatory offensive, especially with:
- The Department of the Interior’s Section 3809 regulations;
- And the EPA’s raising of the ante on regional haze to
increase pressure on coal-based power generation.
The last day’s Federal Register of the Clinton
administration ran to almost 1,000 pages and more than 1.1 million
words.
Compare this with some other documents that deal with the ordering
and regulation of human affairs:
- The Preamble to the U.S. Constitution – in 52 words
it sets out all the purposes of government;
- The Constitution itself – in 4,400 words it sets out
the acts and the functions of government;
- And the Old Testament of the King James Bible with all of
its commandments, laws, admonitions, abominations, proverbs,
prophecies and psalms – 590,000 words.
The last three Registers of the Clinton administration
ran to 3 million words.
There were 28 midnight regulations across the range of agencies
that would affect mining in some way.
In the last year of the Clinton administration, the Register
swelled:
- To 74,250 pages;
- And 89 million words.
For eight years the administration used regulation to implant
in law and policy changes of direction its functionaries knew
Congress would not otherwise approve.
The administration’s directors, secretaries and chief
executive subordinated the law and policy to what the legal dictionaries
call:
- Artful interpretation – giving the law a meaning other
than the one intended;
- Extravagant interpretation – the assumption of power
beyond the grant of authority;
- And predestined interpretation – making the law subservient
to preconceived views or desires.
Coming to grips with the regulatory legacy of the Clinton administration
will be a high order of business.
Meanwhile, the demagoguery at the extremes of the green movement
will continue no matter who is in charge at EPA or Interior –
campaigns of allegation and litigation to incite new demand for
restrictions.
The need for effective cooperation and coordinated activity
to deal with all of this will grow rather than diminish; and that’s
something we all need to keep in mind as we move forward today
and…in the weeks to come.
Stuart suggested that this keynote touch at some point on my
goals as the new president and chief executive officer of the
National Mining Association – on the objectives of our industry
in this new Congress during this new presidential administration
in this time of many transitions.
To me it seems he suggested the best place to start.
To summarize as briefly as possible, this is the objective:
To get out of the noose and back
in the loop.
As with every mission statement, the details and tactics need
fleshing out with background and discussion. I propose that we
move forward in stages:
- First, by comprehending across the extent of the noose;
- Then, by touching in greater detail on the National Mining
Association – on priorities and the ways in which I intend
to operate;
- Then, by blending in thought about the political dynamics
now at work in Washington;
- And, finally, with discussion of renewed cooperation and
coordination between and among the state associations and the
national association.
The best opening perspective may come from Ms. Browner’s
EPA and her TRI rule.
Not long ago the trade press began to comment on a Browner
legacy. They found it to be one of imagination and innovation.
One retrospective quoted Ms. Browner on two points, which I
paraphrase:
- If Congress will not authorize changes, the agency must nevertheless
make those changes;
- And no section of the Clean Air Act was left untouched on
her watch.
Here in Denver, Judge Nottingham’s TRI ruling went to
the point of imagination. He wrote that:
- EPA’s interpretation "…stretches the term
(produce) so far beyond its commonly understood meaning as to
be unreasonable…impermissible….";
- And EPA’s interpretation "…of the term manufacture
runs contrary to the plain language of the…act."
Ms. Browner’s watch also led to innovation in proposing
rules for power generation under the Clean Air Act – regulation
that tended:
- To concentrate new generation in natural gas;
- To force out of service significant coal-based capacity;
- To raise the cost of power from the coal-based capacity that
remained in service;
- To deter generators from new coal-based capacity for fear
of escalating regulatory caprice;
- And to enact through the back door a climate policy that
the Clinton administration never had the courage to send to Congress
for fear of rejection.
In doing this, she overrode the advice of the agency’s
scientific experts. They were early to caution that much she wanted
to do was not necessary to protect the public health or well being.
Last week the Supreme Court ruled on the bulk of these proposals,
and the ruling was widely reported as vindication for Ms. Browner.
However, the case is far from over. The regulations in question
were sent back to a lower appellate court for further consideration.
NMA is a party to the litigation and will remain so until the
matter is resolved.
The midnight regulation on regional haze applies to the same
class of power plants that were the targets of the regulations
in the litigation that we just discussed – a farewell bite
of the apple, if you will.
Called BART because it demands installation of the "best
available retrofit technology," this regulation highlights
a strategy of steady encroachment.
In this strategy, a provision of the law meant to protect national
parks becomes a tool for enacting a preconceived desire, simply
another point of pressure. Protection of a park is far, far less
important than the opening afforded by the presence of a park.
This extravagant inversion of intent shows up throughout the
former administration’s regulatory legacy. It switches the
emphasis from protection to attack in lieu of legislation.
BART was eligible for review and has been pulled back.
Toward the end of the Clinton administration, much was broadcast
and published about legacies.
The press accorded a generous environmental legacy to the former
president for his monument designations and the roadless initiative.
Former Secretary Babbitt staked his own claim.
The Babbitt legacy was formally asserted in a recent official
publication of the Department of the Interior – $24,000 worth
of legacy over 60 pages in full color. It was a special edition
of the newspaper People, Land & Water.
Perhaps some of you saw it. It ought to be a collector’s
item. It ought to be Exhibit A in some court.
For a context, the newspaper offered a long interview with
the former secretary that included comments on his personal regulatory
policy, the gist of which was this:
The legacy edition of People, Land & Water
also made special note:
- Of the former secretary’s refusal to act on 600 pending
patents for permissible mines – stone-walling by executive
prerogative they called it;
- Of former Solicitor Leshy’s millsites opinion whereby
decades of practice, policy and law were artfully reinterpreted
– another application of the squeeze out and deter principle;
- Of the former secretary’s role in tipping the former
President on how to combine executive orders with national monuments
for fun and popularity;
- And of his role in fomenting the roadless initiative in the
furtherance of a Clinton legacy.
Mr. Babbitt’s finale was the new 3809 regulations:
- That were issued against the advice of the National Academy
of Sciences;
- That were issued in defiance of instructions from Congress;
- And that became effective on the last day of the Clinton
administration.
Their worst feature is creation of a secretarial veto. They
give secretaries the kind of power the Constitution gives presidents
only for extraordinary use.
Even after all requirements of the law are met, under the new
regulations a secretary could say on subjective grounds: I don’t
like it, you can’t do it. It is the kind of power once routinely
claimed by divine-right kings and commissars.
The secretarial veto was previously unknown in the statutory
law, has never been considered by Congress, and was quietly inserted
into the regulations after the time for public comment had passed.
We’ve challenged the validity of these regulations in
the U.S. District Court for the District of Columbia. The intention
is to litigate until the matter is resolved by ruling or settled
administratively.
Before we put all of this in perspective, there is one more
legacy that requires both mention and a different kind of comment
– the legacy of the National Mining Association.
General Richard Lawson presided at the union of the coal and
hardrock branches of the mining family in their federal activity.
The union was mandatory.
In a time of trouble and challenge, General Lawson:
- Blended two diverse groups and cultures, each peopled by
chief executives with very few indifferent opinions;
- And then he kept them together;
There’ll be no effort on my part to reinvent the National
Mining Association.
My intent is to build on the tradition and extend the achievement:
- To seize opportunities where they exist;
- To make opportunities where they are scarce;
- To adjust and synchronize the association’s activities
with the other strong resources of the industry – resources
such as the Colorado Mining Association;
- And to participate to the maximum in all that is evolving
– in politics, in policy and in public opinion.
NMA’s directors have set our two top priorities for this
new Congress and this new administration.
One is national energy policy with emphasis on the best use
of America’s recoverable coal reserve of 275-billion tons
that also is:
- 95 percent of our fossil fuel reserve;
- Or the equivalent of 495 trillion kilowatt-hours of electric
power waiting to be put to use by an electricity-dependent economy.
For perspective, we generated 1.9 trillion kilowatt-hours with
coal last year, and it was 51 percent of America’s power.
The priority on energy was set by national developments.
The other top priority is mining law, a heading that includes:
- The 3809 regulations;
- The millsites opinions;
- The stone-walled patents;
- And the General Mining Law of 1872.
We have new task forces that are sorting through the questions
behind these priorities to determine what to do and how to do
it. Both are in the early stages of their work.
There’s a lot we don’t know about the future but
there are some things we do know:
- We know we can’t be successful if we’re perceived
to seek special privilege – not in the review of regulations,
not in the passage of legislation;
- But we can ask for the restoration of balance, for certainly
balance is needed;
- We can’t expect wholesale repudiation of all that has
been done;
- But we can stand firm for the restoration of a fairness and
a certainty in policy in which business judgment can place reliance.
There’s reason to believe that when this administration
completes its formation and staffing, the review of regulations
and the recommendations for policy will produce a different emphasis.
Energy is winning the highest place on the national agenda.
There is mounting concern that the failures of power and policy
in California are a dress rehearsal for the next national melodrama.
Realizations are taking hold in the new Congress and the new
administration:
- That the weaknesses behind California’s troubles have
been injected into the national system by the sum of the Clinton-era
legacies;
- That absent modification, the nation may soon be justified
in talking about a Clinton brownout legacy;
- That power supply may soon be inadequate – too much
demand, too little capacity;
- That the reliability of supply may soon be at risk –
limited capacity to generate or to transmit;
- That fuel preferences embedded by regulation may cause unwanted
and untoward increases in the prices of electric power and natural
gas;
- That legacies have locked away enormous amounts of energy;
- And that the sum of concerns adds up to a problem which demands
early and serious attention.
How serious is shown by a recent development of which many
here may not have heard at all; for it may not have been news
here. It made almost no national news. Yet it was significant.
Two weeks ago yesterday President Bush visited Charleston,
West Virginia, and went out of his way to go on the record with
this statement:
"Coal is …abundant…in America….
"It is important to remind people…we
can safely mine coal…we can cleanly
burn it…
"…we need a national energy policy
of which coal needs to be an integral part…"
President Bush last month set up a federal Energy Task Force
that is chaired by Vice President Cheney and on which sit members
of the administration that include the secretaries of the Interior,
of Agriculture and of Energy, plus the administrator of EPA.
The task of their force is to sort through every thing in their
jurisdictions that pertains to energy and to recommend ways to
increase the supply – to deliver energy that is dependable,
affordable and environmentally sound. A policy is expected in
early May.
I met with the director Andrew Lundquist last week. He anticipates
that the policy – whatever it is – will be fuel neutral.
It will endeavor to deal with any existing preferences and to
install no new ones.
On Monday of last week majority leadership of the U.S. Senate
introduced the omnibus energy bill that will be the vehicle for
the administration’s energy policy.
Present at the presentation for the press and speaking for
the bill were the following:
- Senator Frank Murkowski, of Alaska, chairman of the Committee
on Energy and Natural Resources;
- Majority Leader Trent Lott, of Mississippi;
- Senator Peter Domenici, of New Mexico, chairman of the Budget
Committee;
- Senator Chuck Hagel, of Nebraska, chairman of the Foreign
Affairs Subcommittee on International Economic Policy, an originator
of the Byrd-Hagel Resolution on climate that intimidated the
Clinton administration.
- And, finally, Senator Larry Craig, of Idaho, chairman of
the Subcommittee on Forests and Public Lands of the Committee
on Energy and Natural Resources, a stalwart in matters related
to energy and mining.
The presentation included a similar show of heavyweight support
from a wide coalition of trade associations representing business,
industry and agriculture, to name a few. The room was packed.
All of the energy-producing industries have contributed a section
to the bill, and we also are joined in a coalition to support
its passage.
If you read about it or heard about it on the network news,
chances are that all you know is:
- That big oil is scheming once more to violate the sanctity
of the Arctic National Wildlife Refuge;
- That the green movement has issued a call to arms to save
the caribou;
- But that the bill is more about saving the endangered SUV.
For this reason, I should touch on the coal section; and there
is a strong coal section.
The coal section also has been introduced as a free-standing
bill – the National Electricity and Environmental Technology
Act, called the NEET bill for short. The number is S. 60 and it
already has 19 co-sponsors.
NEET fosters commercial introduction of the new clean-coal
technologies by providing:
- For upgrades of existing capacity that raises output;
- For repowering at existing sites to expand output;
- And for the construction of greenfield capacity.
NEET’s incentives include:
- A period of safe-harbor exemption from future innovative
regulation in the style of Ms. Browner – this an assurance
to investors;
- An investment tax credit – this an inducement;
- And a production tax credit of about three mills – a
credit that is 80 percent below the credit given wind power.
In addition, the technologies fostered by NEET can generally
deliver power:
- With sulfur dioxide emissions of only one-sixth to one-quarter
of the most stringent limit in federal regulation;
- And with nitrogen emissions of one-fifth to one-half the
most stringent limit.
NEET is meant to change the emphasis of policy – to prove
that incentives can achieve more and achieve it quicker than all
the extravagant command-and-control schemes of all the Babbitts
and Browners put together and then rolled into one.
NEET is mean to draw the interest of power producers and investors
to new technology that can resolve many concerns and conflicts.
Once the technologies prove their commercial promise, no further
inducements will be required. Performance and the demand for power
will be inducement enough.
With the NEET bill, the National Mining Association also is
beginning to reach for its full potential.
NEET was introduced by Senator Robert Byrd, of West Virginia,
a leading coal state. In early bipartisan co-sponsorship is Senator
Mitch McConnell, of Kentucky, another leading coal state.
Thanks to NMA members, some newer co-sponsors are from hardrock
states and they include the likes of:
- Harry Reid, of Nevada, the second ranking Democrat in the
Senate;
- And Jeff Bingaman, of New Mexico, the ranking Democrat on
the Energy and Natural Resources Committee.
Here’s where mining’s located on the landscape of
federal politics:
- From the coal-producing states of the East, many members
of the House and the Senate sit at junctions of responsibility
and influence over general policy;
- From the hardrock and coal states of the West, many members
sit at junctions of responsibility and influence;
- And, in the array of diverse states influenced by the presence
of our manufacturers and suppliers, the same is true.
There is strength in the West and In the East; and the manufacturers
bind the regions together by spanning many industrial and urban
centers.
We have the strength and standing to win the attention of most
of Congress at critical places and times. But to make this happen:
- We must identify and emphasize the concerns and goals that
we have in common;
- We must co-ordinate and harmonize our strengths and capabilities
across the range of concerns;
- We must introduce our friends in office to one another and
to our common concerns so as to maximize their effectiveness
and mining’s effectiveness;
- We must make new friends – friends in elective office,
in appointive office, and among the public at large;
- And we must never slack in our resolve to make it happen.
In a few days the National Mining Association will cover Capitol
Hill with three-member teams of CEO’s – one coal, one
hardrock, one manufacturer. They’ll cover mining’s political
landscape – East, West and middle.
The members from hardrock states will be introduced to coal’s
concerns with hardrock sponsorship, the coal-state members to
hardrock concerns with coal sponsorship, and both to the manufacturer’s
members under manufacturer sponsorship.
Winning support for a national energy will be the highest priority.
A national energy policy will benefit all.
Your Senators Campbell and Allard already are in sponsorship,
but we’ll be looking for support in the House sometime soon.
Perhaps, when that time comes, the Colorado Mining Association
and the National Mining Association can join in explaining the
merits of NEET to the Colorado delegation.
Whether state or federal, the pace and scope of politics today
is such that no segment of the industry has the luxury of going
it alone or of even trying to stand aside from the struggle. Our
industries are consolidating, our numbers shrinking.
It is as true now as when Ben Franklin said it more than 200
years ago: Either we hang together or we’ll be hanged separately.
Toward that end I will soon propose a summit of associations
– state and national, coal and hardrock – for a convenient
date early this summer. The point would be to develop new ways
to help one another, to reinforce one another, to coordinate our
efforts and to multiply the influence of our force. We’ve
done well but we have to do better.
We have a new administration and a new Congress.
We have time and favorable conditions for the restoration of
fairness, balance and certainty. We have strength and presence.
In sum: We have an opportunity to get mining out of the noose
and back in the loop.
Let’s not let it pass.
Let’s resolve to do whatever it takes to get the job done.
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