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The original documents are located in Box 45, folder "1975/05/16 - Economic and Energy
Meeting (1)" of the James M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
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copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 45 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
11AM - Economic Energy Meeting
Cabinet Room
Friday, May 16, 1975
THE WHITE HOUSE
DECISION
WASHINGTON
May 15, 1975
11Am
MEMORANDUM FOR
THE PRESIDENT
FROM:
JIM CANNON
SUBJECT:
STRIP MINING BILL
H.R. 25, the Surface Mining Control and Reclamation Act,
passed the Senate on May 5 by voice vote and the House on
May 7 by a vote of 293-115.
This memorandum briefly describes the bill, compares it to
the one you proposed on February 6, identifies the impacts
on coal production and other economic considerations, lists
arguments for and against approval, and presents recommenda-
tions of your advisers as to signing or vetoing the bill.
See Tab A for Jim Lynn's enrolled bill memorandum which will
provide more detail on the bill and agency positions.
The Bill
Briefly, the principal features of the bill:
Establish environmental protection and reclamation
standards for surface mining activities.
Establish immediate Federal regulatory programs in
all States as an interim measure.
Call for State regulatory and enforcement activities,
with permanent Federal regulation and enforcement if
States do not act.
Places an excise tax of 15-35¢ on each ton of coal to
create a trust fund for use in reclaiming public and
privately owned abandoned mined lands, and paying other
facility and service costs in areas affected by energy
development.
Provides funds for State mining and mineral institutes.
Background
The Executive Branch proposed bills in 1971 and 1973 to
establish environmental and reclamation standards for
FORD i LIBRARY CERALD
- 2 -
surface and subsurface mining of coal and other minerals.
The Congress passed a tough bill covering surface coal
mining in December 1974.
On February 6, 1975, you transmitted a new bill which
followed the wording of the vetoed bill except for eight
changes identified in your letter (Tab B) as critical
to overcome the problems that led to your veto and 19
other changes which were designed to reduce the coal
production losses and make the bill more workable.
Context for Current Objections
It is important to note that (a) your February 6 proposal
represented a substantial compromise from earlier Adminis-
tration positions, and (b) some of the objections to the
Enrolled Bill also apply, but with somewhat less force,
to the February 6 bill. For example, the February 6 bill:
would have created a Federal-State regulatory system.
reflected the fact that the Executive Branch had given
up after numerous attempts to obtain less rigorous
restrictions on steep slope mining and post-mining
uses. (Objections coming from Appalachian states are
directed toward these provisions.)
would have involved coal production and job losses,
which are roughly estimated as follows for the first
full year:
Million Tons
Jobs
Vetoed bill
-
48-186*
11-31,000
Your bill
-
33-80
7-18,000
Enrolled bill
-
40-162
9-36,000
*Recent Interior Revision
Enrolled Bill Compared to February 6 Compromise Bill
Tab C summarizes the progress made in the Enrolled Bill on
specific changes requested in your compromise position.
Briefly, the Enrolled Bill makes changes in six of the
eight areas you identified as critical in your February
letter to Congress, including the narrowing of citizen
suits and eliminating special unemployment provisions.
However, the Enrolled Bill also creates three important new
problems, involving State control over Federal coal lands,
restrictions on mining in alluvial valleys and a change in
water rights.
- 3 -
Arguments in Favor of the Enrolled Bill
It is an environmentally sound solution to the problem
of strip mining. Furthermore, it will reclaim the
acres of abandoned lands that now exist and help
reduce water pollution.
A reasonable compromise between the position you took
when you vetoed last year's bill and the position of
the bill's sponsors. This argument is especially
persuasive because you are clearly on record as
supporting an environmentally sound strip mining
bill as long as it does not unnecessarily impact
your energy independence goals.
Your Administration is beginning to develop a negative
environmental record due to your previous pocket-veto
of the strip mine bill, your proposed Clean Air Act
Amendments in connection with your Energy Independence
Act, your decision not to propose a land use bill this
year and your nomination of Governor Hathaway.
For additional arguments in favor, see memorandum from
Russ Train at Tab D.
Arguments Against the Enrolled Bill
This is a badly drafted bill which goes way beyond
its laudable environmental goals and creates an
unnecessary Federal and State regulatory system and
bureaucracy, and because of ambiguities, it will
invite years of litigation thus unnecessarily con-
straining coal production.
The February 6 compromise was a good faith attempt
to get a bill which assumed that Congress would act
on an energy plan that would move us significantly
toward energy independence. There has been no
meaningful action on such a plan.
It will cause unnecessary loss of coal production
and jobs, increase oil imports, dollar outflow, and
electric rates. (Details at Tab E).
- Coal Production Losses. Interior and FEA estimate
losses between 40 to 162 million tons (6 to 24%
of expected 1977 production of 685 million tons).
This does not include losses for reasons which
cannot be quantified, such as court challenges and
surface owner rights. The range cannot be narrowed
because of ambiguities in the bill.
Production losses are particularly important because
(a) correct estimates for 1977 are already running
- 4 -
65 million tons below the 750 million ton forecast
for Project Independence planning, and (b) 48 million
tons of additional coal is needed to convert utilities
from oil and natural gas.
- Oil Imports. Production losses will likely result
in an increase in oil imports of between 139 and
559 million barrels in 1977 involving dollar out-
flows from $1.5 to 6.1 billion.
- Job Losses. Interior and FEA have estimated that
direct and indirect job losses will range between
11,000 and 36,000. These will be partially offset
by lower productivity due to tighter restrictions
and after some years, expanded undergroups mining.
- Consumer Prices. In addition to the impact of using
higher priced oil, price and tax increases include:
excise taxes of about $150 million a year; higher
strip mining production costs of about $175 million
a year and about $90 million for Federal and State
government implementation.
States have already taken effective action, therefore
all that is required at the Federal level is assistance
with reclamation funding. Eleven of the twelve leading
surface mining states -- which account for about 87%
of 1973 surface coal mining in the Nation -- now have
their own surface mining laws. Since 1971, when Federal
legislation began to be considered, 21 states --
including eleven of the twelve leading surface coal
producers -- have enacted or strengthened their surface
mining laws. In addition, a survey conducted by CEQ
indicates that most leading coal producing states have
tightened up their regulations and increased their
regulatory staffs. However, except for Montana, the
programs are not as rigorous as H.R. 25 would require.
Concerns for the environment do not depend solely on
Federal legislation.
Legislative Outlook
Last day for your action on the Enrolled Bill is May 20.
Max Friedersdorf and Jack Marsh believe that you could
possibly sustain a veto in the House. According to Max,
the situation has recently improved and the latest whip
check and GOP leadership analysis shows that there is a
better than even chance of sustaining.
-5-
RECOMMENDATIONS
The following recommend that you sign H.R. 25:
Russ Train
Strongly recommends that you sign;
good compromise - close to your
February 6 proposal; no job losses
or adverse impact on coal production.
Department of
Although the bill has serious defects,
the Interior
in balance, you should sign because
kent Frizece
some legislation is desirable.
Russ Peterson
Department of Commerce (Rog maton)
Department of the Army (Corp) of Engiveen)
Tennessee Valley Authority
Aguilture (Buts)
The following recommend that you veto H.R. 25:
Bob Hartmann
Key veto message to lack of progress
in Congress on energy proposals.
Max Friedersdorf
Our Congressional supporters are in
favor of veto. This is a bad bill and
a veto is consistent with your position
last year.
Frank Zarb
Unacceptable production losses which
will have to be made up, in the near-
term, by increasing oil imports.
Jim Lynn
Veto unless the Congressional Leader-
ship publicly commits itself to support
amendments if the Act works badly.
Jim Cannon
This bill would cut coal production up to
24% yearly, cost up to 36 thousand jobs,
and for the years it would be litigated,
would discourage entrepreneurs from
entering or expanding mining operations.
Phil Buchen
Jack Marsh
Bill Simon
Bill Seidman
Alan Greenspan
Federal Power Commission
GERALD FORD LIBRAS
6
DECISION
Sign H.R. 25 and prepare appropriate message
(see draft attached to enrolled bill memo)
Veto H.R. 25 and prepare appropriate message
(see draft at Tab F)
Set up meeting with me and key advisers
TAB A
EXECUTIVE OFFICE OF THE PRESIDENT
VALUE
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
MAY 15 1975
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 25 - The Surface Mining Control
and Reclamation Act of 1975
Sponsor - Rep. Udall (D) Arizona and 24 others
Last Day for Action
May 20, 1975 - Tuesday
Purpose
Establishes a Federal-State system of regulation of surface
coal mining operations including reclamation, and provides
for the acquisition and reclamation of abandoned mines.
Agency Recommendations
Office of Management and Budget
Disapproval (unless
leadership commits
itself to support
amendments if the
Act works badly)'
Federal Energy Administration
Disapproval (Informally)
Federal Power Commission
Disapproval
Department of the Treasury
Disapproval
Department of the Interior
Approval
Department of Commerce
Approval
Department of Agriculture
Approval
Council on Environmental Quality
Approval
Environmental Protection Agency
Approval
Tennessee Valley Authority
Approval
Department of the Army
Defers to Interior
Department of Justice
Defers to other
agencies
2
Discussion
The Executive Branch submitted to both the 92nd and 93rd
Congresses legislation that would have established reasonable
and effective reclamation and environmental protection
requirements for mining activities. The Administration
worked with the Congress to produce a bill that strikes a
reasonable balance between reclamation and environmental
protection objectives, and the need to increase domestic
coal production. These efforts in the 93rd Congress failed
to produce an acceptable bill.
On December 30, 1974, you pocket-vetoed S. 425, the Surface
Mining Control and Reclamation Act of 1974. The principal
grounds for the veto were that the bill did not strike
a reasonable balance and, therefore, would have had an
unacceptably adverse impact on our coal production. The
potentially large loss of coal production would have unduly
impaired our ability to use the one major source of energy
over which the United States has total control, restricted
our choices on energy policy, and increased our reliance
on foreign oil. In addition, the bill would have produced
excessive Federal expenditures and an inflationary impact
on the economy. It also contained numerous other deficiencies.
(See Tab A for the enrolled bill memorandum and Memorandum
of Disapproval, S. 425.)
On February 6, 1975, you proposed a compromise coal surface
mining bill which followed the basic framework of the vetoed
legislation changed only (a) to overcome eight critical
objections which you identified as the key elements in your
veto, (b) to reduce further the potential for unnecessary
production losses, and (c) to make the legislation more
effective and workable (see Tab B). In transmitting the
bill, you reiterated that your energy program contemplates
the doubling of our Nation's coal production by 1985 and
that this will require the opening of 250 major new coal
mines, the majority of which must be surface mines.
The enrolled bill would establish Federal standards for
the environmental protection and reclamation of surface
coal mining operations. Briefly, the bill:
-- covers all coal surface mining operations and surface
effects of underground coal mining;
3
establishes minimum nationwide environmental and
reclamation standards;
-- establishes immediately a Federal regulatory program
in all States during the interim period (up to 30
months) ;
calls for eventual State regulation and enforcement
with Federal administration when States fail to act;
requires each mining operation to (a) have a mining
permit before mining can proceed and (b) comply strictly
with the provisions of the permit throughout the
mining and reclamation process;
creates a reclamation program for previously mined
lands abandoned without reclamation, and finances
infrastructure costs in areas affected by coal
development. The program would be financed from a
Federal fund whose income would be derived from an
excise tax of 15-35¢ on each ton of coal mined; and
-- creates a new 50-50 matching Federal grant program
for State mining and mineral institutes.
Federal outlays under the bill are estimated at $25 million
in fiscal year 1976 and $51 million in 1977, while receipts,
mainly from the excise tax, are estimated at $80 million
and $150 million in those two years. Federal personnel
requirements are estimated to be 600 in 1976 and 1,000
in 1977.
As the conference committee notes in its report on H.R. 25,
the enrolled bill satisfactorily deals with six of the eight
objections which you identified as critical in your February
letter to the Congress. Nine out of nineteen other important
changes that you had requested have also been made. Tab C
summarizes the changes in H.R. 25 compared to your compromise
bill.
4
Difficult questions of interpretation of certain provisions
of the enrolled bill, however, create three significant
new problems:
-- H.R. 25 would allow the States to establish perform-
ance standards which are more stringent that Federal
standards and provides that such State standards
must apply to all lands in the State, including
Federal lands. Although Senate floor debate indicates
that this provision can be construed to permit States
to ban surface coal mining on Federal lands, House
floor debate indicates that such a result is not
intended. The conference report is silent on this
issue.
-- H.R. 25 could substantially limit western mining
operations in alluvial valley floors. As noted
below, this provision is largely responsible for
the extremely wide range of possible coal produc-
tion losses under the bill, and it could also lockup
major coal reserves in the West.
-- H.R. 25 requires mine operators to replace water
used for agricultural or other activities in cases
where it is adversely affected or interrupted as a
result of mining. Although the conference report uses
the word "compensation", suggesting the possibility
of monetary compensation in lieu of replacement
in kind, this interpretation is doubtful. This
provision could result in effectively banning mining
in parts of the West.
5
COAL PRODUCTION LOSSES
(1st full year of implementation -- millions of tons/year)
Administration
S.425 (Vetoed)
Bill*
H. R. 25*
Small mines
22- 52
15-30
22- 52
Steep slopes,
siltation and
acquifer provisions
15- 68
7-38
7- 44
Alluvial valley floor
provisions
11- 66**
11-12
11- 66
TOTAL LOSS
48-186**
33-80
40-162
Percent of expected
CY 1977 production
(685 million tons)
7% to 27%
5% to 12%
6% to 24%
*
Tab D sets out Interior's assumptions underlying the designated
production loss estimates.
** Interior has recently advised OMB that its December 1974 esti-
mate for alluvial valley floor coal production losses of 11-21
million tons/year under S. 425 was too low. It should have had
an upper range of 66 million tons -- the above table has been
revised to correct this error.
As these coal production loss data clearly indicate, the
alluvial valley loss component is critical to an assessment
of total losses. Interior's high estimate of loss assumes
a total ban on surface mining in western alluvial valleys.
Yet, on this point, the conference report states:
"The House bill contained an outright ban of
surface mining on alluvial valley floors west
of the one hundredth meridian west longitude.
The Senate amendment specified that a permit or
portion thereof should not be approved if the
proposed mining operation would have a substantial
adverse effect on crop lands or hay lands over-
lying alluvial valley floors where such crop lands
or hay lands are significant to ranching and
farming operations.
6
"The. conferees resolved these differences in
virtually the same way as resolved in S.425.
The Conference Report stipulates that part or
all of the mining operation is to be denied if
it would have a substantial adverse effect on
alluvial valley floors where farming can be
practiced in the form of irrigated or naturally
subirrigated hay meadows or other crop lands
where such alluvial valley floors are signifi-
cant to the practice of farming or ranching
operations. The resolution also stipulated
that this provision covered potential farming
or ranching operations if those operations
were significant and economically feasible.
Undeveloped range lands are excluded in each
instance.
"There has been considerable discussion on
the potential geographical extent of this
provision. For example, estimates have
ranged up to nearly 50 percent, of the land
over the strippable coal in the Powder River
Basin being included under this provision.
The conferees strongly disagree with such
interpretations noting that specific inves-
tigations of representative portions of the
Powder River Basin in the Gillette area,
indicate that only 5 percent or so of the
lands containing strippable coal deposits
appeared to be alluvial valley floors. It
should also be noted that the Department
of the Interior advised the conferees that
97 percent of the agricultural land in the
Powder River Basin is undeveloped range land,
and therefore excluded from the application
of this provision. "
If operating experience produces a loss near the lower end
of the range, the bill's total impact could be well within
the range of the Administration bill. On the other hand,
if the higher end of the range is realized, then an unaccept-
able loss could result. The enrolled bill is replete with
ambiguous or difficult-to-define terms and in using the coal
production loss estimates, it is essential to recognize
the large uncertainties in them.
7
Arguments in Favor of Veto
1. Because coal currently is the only major energy source
over which the United States has total control, we should
not unduly impair our ability to use it. The loss of
significant coal production would be inconsistent with
the Administration's objective of doubling coal production
by 1985 as part of our energy independence goal. The risk
of experiencing large production losses should not be taken.
The United States must import foreign oil to replace domestic
coal that is not produced. At the high end of estimated
production loss, this could mean additional oil imports of
at least 550 million barrels in the first full year of
the bill's implementation. The net oil replacement cost
could be as much as $3.7 billion at the current prices of
foreign oil and domestic coal.
2. The economic consequences of such a production loss
and higher oil imports could be severe:
-- Utility fuel costs could increase as much as 18%.
-- Unemployment could increase by 36,000 in the coal
fields and in industries that could not obtain
replacement fuel sources.
-- Small mine operators could be put out of business.
Additional pressure. would be brought on the dollar in
international markets because of outflows of as much
as $6.1 billion for the higher level of oil imports.
Higher costs of fuel, strip mining, reclamation,
and Federal and State administration could impair
economic recovery.
3. In the future, a significant amount of our national
coal reserves would be locked up because of restrictions
on surface mining in alluvial valleys and national forests.
In the "worst case" situation, this could amount to over
half of total reserves potentially mineable by surface
methods.
8
4. An elaborate Federal-State regulatory system would be
created, requiring substantial numbers of Federal personnel
and containing the possibility of a Federal takeover of
the regulation of strip mining and reclamation in the event
of a State's failure to develop and carry out a program
meeting the bill's standards.
5. A State could exercise control over mining of federally
owned coal on Federal lands. Under one interpretation of
the bill, a State could ban such mining.
6. Federal legislation may be unnecessary, because during
the past four years all major coal producing States have
enacted new laws on strip mining or strengthened existing
laws. In most cases State legislation now appears adequate.
Although in some cases enforcement has been lax, it may be
too early to reach a final judgment because many State
laws were recently enacted. If a veto is sustained, it
appears likely that there will be a period of a year or
more to re-evaluate the situation before new legislation
is considered by the Congress.
7. Because of the ambiguities in H.R. 25 and the extensive
litigation that would result, many coal companies believe
that no Federal legislation would give greater certainty
to their production in the short run than would the bill.
8. In addition to the arguments noted above, the enrolled
bill contains other significant objections, but not identified
as critical in your February letter: (a) surface owners
would have the right to veto mining of federally owned
coal, or could realize a substantial windfall; and (b) the
Abandoned Mine Reclamation Fund would provide grants to
reclaim private lands and finance local public facilities
and related costs incurred because of coal development in
the area; i.e., an impact aid program. (In limiting the
use of the fund to areas directly affected by coal mining
but permitting its use for a wide variety of purposes, this
bill could influence future congressional action on the
use of revenues from leasing on the Outer Continental Shelf.)
9
Arguments in Favor of Approval
1. The enrolled bill is landmark environmental legislation
establishing minimum Federal reclamation standards, eliminating
damaging strip mining practices, and providing for reclama-
tion of abandoned strip mined lands. Although the major
coal producing States have enacted new or strengthened laws,
their quality is uneven and adequate enforcement is at best
doubtful.
2. Estimates of coal production loss that might result
from the bill are highly uncertain and speculative. The
range of possible loss is so wide as to cast substantial
doubt on their public defensibility. The high end of the
range (162 million tons in the first full year of imple-
mentation) is clearly a "worst case" situation which assumes
that all the bill's ambiguities will be resolved in a manner
that maximizes restraints on production. Statements by
the bill's proponents and in the conference report support
a more reasonable interpretation of the bill's potential
restrictions on production than does a "worst case" analysis.
The lower end of the range of estimated loss (40 million
tons) is well within the range of loss estimated for the
Administration's compromise legislative proposal (33-80
million tons).
3. Peak production loss would probably occur in the first
full year of implementation. Once the bill's ambiguities
are overcome by regulation and litigation, the industry will
have environmental groundrules and standards governing. its
operations, thereby providing a certain basis for future
expansion of production to meet market demand.
4. The Congress gave extensive consideration to Administra-
tion proposed changes to the bill vetoed last December.
Six of the Administration's eight critical objections are
satisfactorily dealt with in H.R. 25, and a number of other
recommended improvements were adopted. Although the enrolled
bill still contains deficiencies, it is probably the best
legislation on strip mining obtainable from this Congress.
If unacceptably large coal production losses should result --
and this is highly uncertain -- the Administration could
seek corrective legislation. Senator Jackson has publicly
agreed to work swiftly to resolve such problems if they
arise.
10
5. A veto would be portrayed by the bill's supporters as
an anti-environment move by an Administration unwilling to
accept a serious effort by the Congress to compromise and
to achieve a reasonable trade-off between energy and
environmental objectives.
Other Considerations
Opinion is divided as to whether a veto can be sustained
in the House, but there is no doubt that it would be over-
ridden in the Senate:
-- The Senate passed S. 7 by 84-13 and the conference
report on H.R. 25 by a voice vote.
-- The House passed H.R. 25 by 333-86 and the conference
report by 293-115. The negative votes on the conference
report were 22 short of the 137 necessary to sustain
a veto. If the entire House votes, 146 votes would
be needed.
OMB Recommendation
On the merits (coal production losses, impact on federalism,
legal ambiguities), this bill should be vetoed. The bill falls
short of the kind of legislation we would write, if we were
beginning anew.
However:
-- The proposals submitted to the Congress in February
by the Administration did not insist upon certain
deletions or changes in provisions that contribute
to production losses and deal inappropriately with
the roles of the Federal Government and the States.
-- The major ambiguities in the language and legislative
history of the bill make highly uncertain the real,
quantifiable impact of the bill.
-- The bill's potential impact on production is extremely
difficult to attribute specifically to the failure of
Congress to make recommended changes in the earlier
vetoed bill.
-- There is a very significant possibility that a veto
would be overridden.
11
OMB, therefore, recommends that:
I. You meet with the congressional leadership that
produced the bill, to:
A. Share with them your concerns about the bill.
B. Indicate your willingness to sign the bill if,
and only if, (1) they will agree to support
modification of the law if, as it is imple-
mented, your concerns are realized, and
(2) they are prepared to state their agree-
ment publicly.
II. You veto the bill if the congressional leaders
refuse this approach.
In accord with our recommendation, we have prepared, for your
consideration, both a draft veto message and a draft signing
statement. The signing statement notes your intent to seek
corrective legislation from the Congress should significant
coal production losses develop as a result of the bill.
James T. Lynn
Director
Enclosures
STATEMENT BY THE PRESIDENT
I am today signing H.R. 25, the Surface Mining Control
and Reclamation Act of 1975.
On December 30, 1974, I issued a Memorandum of Disapproval
which explained the reasons for my veto of S. 425, the Surface
Mining Control and Reclamation Act of 1974. Briefly stated,
I vetoed S. 425 on the grounds that it did not strike an
appropriate balance between the need to increase coal production
in the United States and reclamation and environmental protection.
It would have had an unacceptably adverse effect on domestic
coal production, which would have unduly impaired our ability
to use the one abundant energy source over which we have total
control, restricted our future choices on national energy policy,
and increased our reliance on foreign oil. I also pointed out
that S. 425 provided for excessive Federal expenditures and
would have had an inflationary impact and that the bill contained
numerous other deficiencies.
My Memorandum of Disapproval of S. 425 noted that:
"
I am truly disappointed and sympathetic with
those in Congress who have labored so hard to
come up with a good bill. We must continue to
strive diligently to ensure that laws and regula-
tions are in effect which establish environmental
protection and reclamation requirements appropriately
balanced against the Nation's need for increased
coal production. This will continue to be my
Administration's goal in the new year.
On February 6, 1975, in accordance with those considerations,
I proposed a coal surface mining bill which followed the basic
framework of the vetoed legislation changed only (a) to over-
come the critical objections which lead to the veto, (b) to
reduce further the potential for unnecessary production impact, and
2
(c) to make the legislation more effective and workable. In
transmitting the bill, I reiterated that my energy program
contemplates the doubling of our Nation's coal production by
1985. I further noted that this will require the opening of
250 major new coal mines, the majority of which must be
surface mines.
Following submission of my bill, the Administration
continued to work in every possible way with the Congress in
an effort to produce surface coal mining legislation which
strikes the necessary balance between environmental protec-
tion and increased coal production.
I appreciate the effort that Congress made in its attempt
to produce an acceptable bill. Nevertheless, I regret that
more of the changes I thought so important have not been made.
I continue to have serious reservations about the potential
adverse impact H.R. 25 may have on domestic coal production.
Notwithstanding these concerns, and recognizing the large
uncertainties about the bill's consequences, I am now willing
to submit the Surface Mining Control and Reclamation Act to
the acid test of experience. In doing so, I truly hope that
the Act can serve as a reasonable basis for accomplishing the
necessary increases in coal production as well as realizing the
Nation's environmental protection and reclamation objectives.
I must emphasize that my approval of this legislation is based
on the assumption that its adverse effects on coal production
will not be excessive. The congressional proponents of this
legislation have steadfastly maintained that the production
losses will be minimal. I hope they are correct. If, however,
coal production is unduly restricted by the operation of this Act,
I will act immediately to seek corrective legislation from the
Congress to remedy the problem.
TO THE HOUSE OF REPRESENTATIVES
I am returning herewith, without my approval, H.R. 25,
the Surface Mining Control and Reclamation Act of 1975.
On December 30, 1974, I issued a Memorandum of
Disapproval which explained the reasons for my veto of
S. 425, the Surface Mining Control and Reclamation Act of
1974. Briefly stated, I vetoed S. 425 on the grounds that
it did not strike an appropriate balance between the need
to increase coal production in the United States and
reclamation and environmental protection. It would have
had an unacceptably adverse effect on domestic coal production,
which would have unduly impaired our ability to use the one
abundant energy source over which we have total control,
restricted our future choices on national energy policy, and
increased our reliance on foreign oil. I also pointed out
that S. 425 provided for excessive Federal expenditures and
would have had an inflationary impact and that the bill
contained numerous other deficiencies.
My Memorandum of Disapproval of S. 425 noted that:
"The Executive Branch submitted to both the 92nd
and 93rd Congresses legislation that would have
established reasonable and effective reclamation and
environmental protection requirements for mining
activities. Throughout this period, the Adminis-
tration made every effort in working with the
Congress to produce a bill that would strike the
delicate balance between our desire for reclamation
and environmental protection and our need to
increase coal production in the United States.
*
*
"
I am truly disappointed and sympathetic with those
in Congress who have labored so hard to come up with a
good bill. We must continue to strive diligently to
ensure that laws and regulations are in effect which
establish environmental protection and reclamation
requirements appropriately balanced against the
Nation's need for increased coal production. This
will continue to be my Administration's goal in the
new year.
- 2 -
On February 6, 1975, in accordance with those con-
siderations, I proposed a coal surface mining bill which
followed the basic framework of the vetoed legislation changed
only (a) to overcome the critical objections which lead to the
veto, (b) to reduce further the potential for unnecessary pro-
duction impact, and (c) to make the legislation more effective
and workable. In transmitting the bill, I reiterated that my
energy program contemplates the doubling of our Nation's coal
production by 1985. I further noted that this will require
the opening of 250 major new coal mines, the majority of which
must be surface mines.
Following submission of my bill, the Administration
continued to work in every possible way with the Congress in
an effort to produce surface coal mining legislation which
strikes the necessary balance between environmental protection
and increased coal production.
With genuine regret, I must report that our efforts to
produce a balanced bill have failed.
H.R. 25, as enrolled, is similar to S. 425 (93rd Congress)
in that it would establish Federal standards for the environ-
mental protection and reclamation of surface coal mining
operations, including the reclamation of orphaned lands. Under
a complex procedural framework, the bill would encourage the
States to develop and enforce a program for the regulation of
surface coal mining with substitution of a federally
administered program if the States do not act.
In its present form, H.R. 25 would have an unacceptable
impact on our domestic coal production. By 1977-1978, the first
year after the Act would take full effect, the Federal Energy
Administration and the Department of the Interior have estimated
that coal production losses could range from a minimum of
40 million tons to a maximum of 162 million tons (between 6% and
24% of expected production for that period). In addition,
ambiguities in the bill could lead to protracted regulatory dis-
putes and litigation, causing additional production losses.
- 3 -
As I stated in December and continue to believe today, our
Nation cannot accept coal losses of that magnitude for a number
of reasons:
- Coal is the one abundant energy source over which
the United States has total control. We must not
arbitrarily place a self-imposed embargo on an
energy resource that can be the major contributing
factor in our program for energy independence.
- The United States must import expensive foreign oil
to replace domestic coal that is not produced to
meet our needs. Substantial losses of domestic coal
production cannot be tolerated without serious
economic consequences. This bill could make it
necessary to import at least an additional 550
million barrels of oil per year at a cost of more
than $6 billion to our balance of payments.
- Unemployment would increase in both the coal fields
and in those industries unable to obtain alternative
fuels--total job losses could exceed 35,000.
In addition, H.R. 25 contains a number of other serious
deficiencies:
- Over 70 million tons of our national coal reserves
could be locked up--this is over half of our total
coal reserves potentially mineable by surface methods.
- Higher costs for fuel, for mining production and
reclamation and for Federal and State administration
could impair economic recovery.
- State control over mining of Federally owned coal on
Federal lands could result in severe restrictions, or
perhaps even a ban, on production from those lands.
- 4 -
- The Federal role during the interim program could
(a) lead to unwarranted Federal preemption, dis-
placement, or duplication of State regulatory
activities, and (b) discourage States from
assuming an active, permanent regulatory role in
the future.
- H.R. 25 would give surface owners the right to "veto"
the mining of federally owned coal or possibly
enable them to realize a substantial windfall.
In sum, I think it is clear that H.R. 25 would place our
Nation's most abundant energy resource in serious jeopardy--this
must not happen. The bill is contrary to the combined interest
of consumers, industry, coal miners, and the taxpayer.
Accordingly, I am withholding my approval from H.R. 25.
In doing so, I am once again sincerely disappointed that we
have been unable to agree upon an acceptable bill. Considerable
effort on the part of both the Executive and Legislative branches
has been put forth in this effort. In light of our inability to
achieve an acceptable bill, I am today directing the Energy
Resources Council to initiate an overall study of the coal surface
mining reclamation issue. This study will reexamine all aspects
of this complex issue, including the adequacy of present State law.
The Council's report and recommendations will be submitted to me
within six months. I will then recommend an appropriate course of
action. Over this period, I hope that the Congress will also
reflect further on the many difficult issues presented by this
legislation. I hope that in this way we will be able to reach
a mutually satisfactory approach that assures that the Nation's
environmental protection and reclamation requirements are
appropriately balanced against our need for increased coal
production.
THE WHITE HOUSE
May , 1975
TAB B
THE WHITE HOUSE
WASHINGTON
February 6, 1975
Dear Mr. Speaker:
Our Nation is faced with the need to find the right
balance among a number of very desirable national
objectives. We must find the right balance because
we simply cannot achieve all desirable objectives
at once.
In the case of legislation governing surface coal
mining activities, we must strike a balance between
our desire for environmental protection and our need
to increase domestic coal production. This consid-
eration has taken on added significance over the past
few months. It has become clear that our abundant
domestic reserves of coal must become a growing part
of our Nation's drive for energy independence,
Last December, I concluded that it would not be in the
Nation's best interests for me to approve the surface
coal mining bill which passed the 93rd Congress as
S. 425. That bill would have:
Caused excessive coal production losses,
including losses that are not necessary
to achieve reasonable environmental pro-
tection and reclamation requirements.
The Federal Energy Administration esti-
mated that the bill, during its first
full year of operation would reduce coal
production between 48 and 141 million
tons, or approximately 6 to 18 percent
of the expected production. Additional
losses could result which cannot be
quantified because of ambiguities in the
bill. Losses of coal production are par-
ticularly important because each lost ton
of coal can mean importing four additional
barrels of foreign oil.
2
Caused inflationary impacts because of
increased coal costs and Federal expen-
ditures for activities which, however
desirable, are not necessary at this
time.
Failed to correct other deficiencies that
had been pointed out in executive branch
communications concerning the bill.
The energy program that I outlined in my State of the
Union Message contemplates the doubling of our Nation's
coal production by 1985. Within the next ten years,
my program envisions opening 250 major new coal mines,
the majority of which must be surface mines, and the
construction of approximately 150 new coal fired elec-
tric generating plants. I believe that we can achieve
these goals and still meet reasonable environmental
protection standards.
I have again reviewed S. 425 as it passed the 93rd
Congress (which has been reintroduced in the 94th
Congress as S. 7 and H.R. 25) to identify those pro-
visions of the bill where changes are critical to
overcome the objections which led to my disapproval
last December. I have also identified a number of
provisions of the bill where changes are needed to
reduce further the potential for unnecessary produc-
tion impact and to make the legislation more workable
and effective. These few but important changes will
go a long way toward achieving precise and balanced
legislation. The changes are summarized in the first
enclosure to this letter and are incorporated in the
enclosed draft bill.
With the exception of the changes described in the first
enclosure, the bill follows S. 425.
3
I believe that surface mining legislation must be
reconsidered in the context of our current national
needs. I urge the Congress to consider the enclosed
bill carefully and pass it promptly.
Sincerely,
R. 'Ind
The Honorable
The Speaker
U.S. House of Representatives
Washington, D.C. 20515
SUMMARY OF PRINCIPAL CHANGES FROM S. 425 (S. 7 and H.R. 25)
INCORPORATED IN THE ADMINISTRATION'S
SURFACE MINING BILL
The Administration bill follows the basic framework of S. 425
in establishing Federal standards for the environmental pro-
tection and reclamation of surface coal mining operations.
Briefly, the Administration bill, like S. 425:
- covers all coal surface mining operations and
surface effects of underground coal mining;
- establishes minimum nationwide reclamation
standards;
- places primary regulatory responsibility with
the States with Federal backup in cases where
the States fail to act;
- creates a reclamation program for previously
mined lands abandoned without reclamation;
- establishes reclamation standards on Federal
lands.
Changes from S. 425 which have been incorporated in the
Administration bill are summarized below.
Critical changes.
1.
Citizen suits. S. 425 would allow citizen suits against
any person for a "violation of the provisions of this
Act." This could undermine the integrity of the bill's
permit mechanism and could lead to mine-by-mine litiga-
tion of virtually every ambiguous aspect of the bill
even if an operation is in full compliance with existing
regulations, standards and permits. This is unnecessary
and could lead to production delays or curtailments.
Citizen suits are retained in the Administration bill,
but are modified (consistent with other environmental
legislation) to provide for suits against (1) the regu-
latory agency to enforce the act, and (2) mine operators
where violations of regulations or permits are alleged.
2
2.
Stream siltation. S. 425 would prohibit increased
stream siltation -- a requirement which would be
extremely difficult or impossible to meet and thus
could preclude mining activities. In the Administration's
bill, this prohibition is modified to require the maxi-
mum practicable limitation on siltation.
3.
Hydrologic disturbances. S. 425 would establish absolute
requirements to preserve the hydrologic integrity of
alluvial valley floors -- and prevent offsite hydrologic
disturbances. Both requirements would be impossible to
meet, are unnecessary for reasonable environmental pro-
tection and could preclude most mining activities. In
the Administration's bill, this provision is modified
to require that any such disturbances be prevented to
the maximum extent practicable so that there will be a
balance between environmental protection and the need
for coal production.
4.
Ambiguous terms. In the case of S. 425, there is great
potential for court interpretations of ambiguous pro-
visions which could lead to unnecessary or unanticipated
adverse production impact. The Administration's bill
provides explicit authority for the Secretary to define
ambiguous terms so as to clarify the regulatory process
and minimize delays due to litigation.
5.
Abandoned land reclamation fund. S. 425 would establish
a tax of 35¢ per ton for underground mined coal and 25¢
per ton for surface mined coal to create a fund for re-
claiming previously mined lands that have been abandoned
without being reclaimed, and for other purposes. This
tax is unnecessarily high to finance needed reclamation.
The Administration bill would set the tax at 10¢ per ton
for all coal, providing over $1 billion over ten years
which should be ample to reclaim that abandoned coal
mined land in need of reclamation.
Under S. 425 funds accrued from the tax on coal could be
used by the Federal government (1) for financing construc-
tion of roads, utilities, and public buildings on reclaimed
mined lands, and (2) for distribution to States to finance
roads, utilities and public buildings in any area where
coal mining activity is expanding. This provision need-
lessly duplicates other Federal, State and local programs,
and establishes eligibility for Federal grant funding in
a situation where facilities are normally financed by
local or State borrowing. The need for such funding,
including the new grant program, has not been established.
The Administration bill does not provide authority for
funding facilities.
3
6.
Impoundments. S. 425 could prohibit or unduly restrict
the use of most new or existing impoundments, even though
constructed to adequate safety standards. In the
Administration's bill, the provisions on location of im-
poundments have been modified to permit their use where
safety standards are met.
7.
National forests. S. 425 would prohibit mining in the
national forests - a prohibition which is inconsistent
with multiple use principles and which could unnecessarily
lock up 7 billion tons of coal reserves (approximately 30%
of the uncommitted Federal surface-minable coal in the
contiguous States). In the Administration bill, this
provision is modified to permit the Agriculture Secretary
to waive the restriction in specific areas when multiple
resource analysis indicates that such mining would be in
the public interest.
8.
Special unemployment provisions. The unemployment provision
of S. 425 (1) would cause unfair discrimination among
classes of unemployed persons, (2) would be difficult to
administer, and (3) would set unacceptable precedents in-
cluding unlimited benefit terms, and weak labor force
attachment requirements. This provision of S. 425 is
inconsistent with P.L. 93-567 and P.L. 93-572 which were
signed into law on December 31, 1974, and which signifi-
cantly broaden and lengthen general unemployment assistance.
The Administration's bill does not include a special
unemployment provision.
Other Important Changes. In addition to the critical changes
from S. 425, listed above, there are a number of provisions
which should be modified to reduce adverse production impact,
establish a more workable reclamation and enforcement program,
eliminate uncertainties, avoid unnecessary Federal expenditures
and Federal displacement of State enforcement activity, and
solve selected other problems.
1.
Antidegradation. S. 425 contains a provision which, if
literally interpreted by the courts, could lead to a non-
degradation standard (similar to that experienced with
the Clean Air Act) far beyond the environmental and
reclamation requirements of the bill. This could lead
to production delays and disruption. Changes are in-
cluded in the Administration bill to overcome this
problem.
4
2.
Reclamation fund. S. 425 would authorize the use of
funds to assist private landowners in reclaiming their
lands mined in past years. Such a program would result
in windfall gains to the private landowners who would
maintain title to their lands while having them reclaimed
at Federal expense. The Administration bill deletes
this provision.
3.
Interim program timing. Under S. 425, mining operations
could be forced to close down simply because the regula-
tory authority had not completed action on a mining permit,
through no fault of the operator. The Administration bill
modifies the timing requirements of the interim program to
minimize unnecessary delays and production losses.
4.
Federal preemption. The Federal interim program role
provided in S. 425 could (1) lead to unnecessary Federal
preemption, displacement or duplication of State regula-
tory activities, and (2) discourage States from assuming
an active permanent regulatory role, thus leaving such
functions to the Federal government. During the past
few years, nearly all major coal mining States have
improved their surface mining laws, regulations and
enforcement activities. In the Administration bill,
this requirement is revised to limit the Federal enforce-
ment role during the interim program to situations where
a violation creates an imminent danger to public health
and safety or significant environmental harm.
5.
Surface owner consent. The requirement in S. 425 for
surface owner's consent would substantially modify
existing law by transferring to the surface owner coal
rights that presently reside with the Federal government.
S. 425 would give the surface owner the right to "veto"
the mining of Federally owned coal or possibly enable
him to realize a substantial windfall. In addition,
S. 425 leaves unclear the rights of prospectors under
existing law. The Administration is opposed to any
provision which could (1) result in a lock up of coal
reserves through surface owner veto or (2) lead to
windfalls. In the Administration's bill surface owner
and prospector rights would continue as provided in
existing law.
6.
Federal lands. S. 425 would set an undesirable precedent
by providing for State control over mining of Federally
owned coal on Federal lands. In the Administration's bill,
Federal regulations governing such activities would not be
preempted by State regulations.
5
7.
Research centers. S. 425 would provide additional funding
authorization for mining research centers through a formula
grant program for existing schools of mining. This pro-
vision establishes an unnecessary new spending program,
duplicates existing authorities for conduct of research,
and could fragment existing research efforts already
supported by the Federal government. The provision is
deleted in the Administration bill.
8.
Prohibition on mining in alluvial valley floors. S. 425
would extend the prohibition on surface mining involving
alluvial valley floors to areas that have the potential
for farming OI ranching. This is an unnecessary prohibi-
tion which could close some existing mines and which would
lock up significant coal reserves. In the Administration's
bill reclamation of such areas would be required, making
the prohibition unnecessary.
9.
Potential moratorium on issuing mining permits. S. 425
provides for (1) a ban on the mining of lands under study
for designation as unsuitable for coal mining, and (2) an
automatic ban whenever such a study is requested by anyone.
The Administration's bill modifies these provisions to
insure expeditious consideration of proposals for designating
lands unsuitable for surface coal mining and to insure that
the requirement for review of Federal lands will not trigger
such a ban.
10.
Hydrologic data. Under S. 425, an applicant would have
to provide hydrologic data even where the data are already
available -- a potentially serious and unnecessary workload
for small miners. The Administration's bill authorizes the
regulatory authority to waive the requirement, in whole or
in part, when the data are already available.
11.
Variances. S. 425 would not give the regulatory authority
adequate flexibility to grant variances from the lengthy
and detailed performance specifications. The Administration's
bill would allow limited variances - with strict environ-
mental safeguards -- to achieve specific post-mining land
uses and to accommodate equipment shortages during the
interim program.
12.
Permit fee. The requirement in S. 425 for payment of the
mining fee before operations begin could impose a large
"front end" cost which could unnecessarily prevent some
mine openings or force some operators out of business. In
the Administration's bill, the regulatory authority would
have the authority to extend the fee over several years.
6
13. Preferential contracting. S. 425 would require that special
preference be given in reclamation contracts to operators
who lose their jobs because of the bill. Such hiring should
be based solely on an operators reclamation capability. The
provision does not appear in the Administration's bill.
14. Any Class of buyer. S. 425 would require that lessees
of Federal coal not refuse to sell coal to any class of
buyer. This could interfere unnecessarily with both
planned and existing coal mining operations, particularly
in integrated facilities. This provision is not included
in the Administration's bill.
15. Contract authority. S. 425 would provide contract
authority rather than authorizing appropriations for
Federal costs in administering the legislation. This
is unnecessary and inconsistent with the thrust of the
Congressional Budget Reform and Impoundment Control Act.
In the Administration's bill, such costs would be
financed through appropriations.
16. Indian lands. S. 425 could be construed to require the
Secretary of the Interior to regulate coal mining on
non-Federal Indian lands. In the Administration bill,
the definition of Indian lands is modified to eliminate
this possibility.
17. Interest charge. S. 425 would not provide a reasonable
level of interest charged on unpaid penalties. The
Administration's bill provides for an interest charge
based on Treasury rates SO as to assure a sufficient
incentive for prompt payment of penalties.
18. Prohibition on mining within 500 feet of an active mine.
This prohibition in S. 425 would unnecessarily restrict
recovery of substantial coal resources even when mining
of the areas would be the best possible use of the areas
involved. Under the Administration's bill, mining would
be allowed in such areas as long as it can be done safely.
19. Haul roads. Requirements of S. 425 could preclude some
mine operators from moving their coal to market by
preventing the connection of haul roads to public roads.
The Administration's bill would modify this provision.
The attached listing shows the sections of S. 425 (or S. 7 and
H. R. 25) which are affected by the above changes.
TAB C
SUMMARY RESULTS - ENROLLED BILL
A. Action on changes from vetoed bill identified as "critical to
overcome objections".
Subject & Proposed Change
Enrolled Bill
1. Citizen Suits
Narrow the scope
Adopted
2. Stream Siltation
Remove prohibition against
increased siltation
Partially adopted
(Cost problem remains)
3. Hydrologic Balance
Remove prohibition against
disturbances
Partially adopted
(Cost problem remains)
4. Ambiguous Terms
Specific authority for
Not adopted but other
changes make this much
Secretary to define
less important
5. Abandoned Mine Reclamation Fund
Reduce 35¢-25¢ to 10¢
Fee reduced on some coal
Limit use of fund to reclamation
Broadened, more objectional
6. Impoundments (Dams)
Modify virtual prohibition
on impoundments
Changed enough to be
acceptable
7. National Forests
Allow mining in certain
circumstances
Rejected
8. Special Unemployment Provisions
Delete as unnecessary and
precedent setting
Adopted
B. Two new problems created in this year's bill
1. Senate floor debate indicates that the language of the bill
can be constructed to permit states to ban surface coal
mining on Federal lands. The House took the opposite view
in floor debate. Not dealt with in the Conference report.
Believed to be a major problem.
2. The Conference adopted a provision prohibiting location of
a mining operation in an alluvial valley floor which may
prevent expected production and lock up major coal reserves
in the West.
- 2 -
3. Requirements to compensate for interrupted water supplies
off-site may make it difficult or impossible for mining
operators to obtain bonds at reasonable costs.
C. Action on changes from vetoed bill identified as "needed to
reduce further the potential for unnecessary production impact
and to make the legislation more workable and effective".
Subject & Proposed Change
Enrolled Bill
1. Antidegradation
Delete requirements
Adopted
2. Abandoned Mine Reclamation Fund
Require 50/50 cost sharing
Rejected
Eliminate grants for privately
Uses broadened;
owned lands
more objectionable
3. Interim Program Timing
Reduce potential for
mining delays
Rejected
Allow operations under interim
permit if regulatory agency
acts slowly
Partially adopted
4. Federal Preemption
Encourage states to take up
Rejected (aggravated
regulatory role
by report language)
5. Surface Owner Consent
Rely on existing law
Rejected
6. State Control over Federal lands
(Now a serious problem - discussed
in B.1, above)
7. Funding for Research Centers
Delete as unnecessary
Rejected
8. Alluvial Valley Floors
(Now a serious problem - discussed
in B.2, above)
9. Designation of areas as
unsuitable for mining
Expedite review and avoid
Partially adopted,
frivilous petitions
but still a problem
- 3 -
Subject & Proposed Change
Enrolled Bill
10. Hydrologic Data
Authorize waiver in some cases
Rejected, but some
where unnecessarily burdensome
changes made in report
11. Variances
Broaden variances for certain
post-mining uses and equipment
shortages
Rejected
12. Permit Fee
Permit paying over time rather
than pre-mining
Adopted
13. Contracting for reclamation
Delete requirement that contracts
go to those put out of work by bill
Adopted
14. Coal Sales by Federal Lessee
Delete requirement that lessee must
not deny sale of coal to any class
of purchaser
Requirement softened
15. Appropriations Authority
Use regular appropriations authority
rather than contract authority
Rejected
16. Indian Lands
Clarify to assure no Federal control
over non-Federal Indian land
Adopted
17. Interest Charge on Civil Penalties
Adopt sliding scale to minimize
incentive for delaying payments
Adopted
18. Mining within 500 feet of active mines
Permit where it can be done safely
Rejected
19. Haul Roads
Clarify restriction on connections
with public roads
Adopted
TAB D
UNITED STATES. AGENCY
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
PROTECTION
WASHINGTON, D.C. 20460
MAY 9 1975
OFFICE OF THE
ADMINISTRATOR
Dear Mr. President:
Ten years ago, in March of 1965, Congress recognized the
mounting adverse environmental and social impacts of strip mining
when it enacted the Appalachian Regional Development Act. A
national study resulted which concluded that the adverse impacts
are serious and growing and recommended to the Congress a
national regulatory program to control all surface mining.
During years of debate the Congress has never seriously ques-
tioned the need for strip mining legislation. However, the require-
ments have been, as you are very much aware, the subject of
heated debate. Throughout this period these requirements have
been thoroughly analyzed and in almost every instance workable
solutions have been found. We have worked hard for further im-
provements to the bill that you vetoed last December. These
efforts have been successful in improving most of the critical issues
and many other less significant ones. The bill before you, in my
opinion, now represents an effective balance between the Nation's
need to develop our vast coal energy resources while assuring the
necessary protection to our environment and maintaining a strong
economy.
While it is difficult for me to question the estimated impacts
that this bill would have on coal production and employment, I must
point out that there has been considerable challenge and debate
both within the Administration and by the Congress and the public
on the accuracy of the estimates. More important, however, is the
clear fact that in the State of Pennsylvania, which has reclamation
requirements similar to the proposed bill, production continues to
increase along with the number of mines and employment. I am
also encouraged by yesterday's announcement by the Tennessee
Valley Authority, the largest single purchaser of coal in the United
States, that they support the legislation and will recommend that
you sign the bill.
The environmental problems associated with the mining of coal
continue to grow at an unacceptable pace. More than two million
acres of land and 11, 000 miles of streams have already been de-
spoiled by, exploitative strip mining. The impending surface mining
of 1, 700 acres and more every week to meet the present demand
for coal is greatly compounding the problem. This pace will
rapidly intensify with the Nation's increasing dependence on coal as
the dominant source of energy. The need for Federal legislation
at this time is great.
Mr. President, I would not argue that the bill before you is
perfect. But I strongly believe that there comes a time when one
must resolve an issue and move on to other concerns. The bill
before you goes a long way towards meeting the objection you artic-
ulated in December. Its merits far outweigh its deficiencies. I
strongly recommend that you sign it into law.
Respectfully,
Russell E. Train
Administrator
The President
The White House
Washington, D.C. 20500
2
TAB E
IMPACT OF THE ENROLLED BILL ON COAL PRODUCTION,
RESERVES, OIL IMPORTS, DOLLAR OUTFLOW,
JOBS AND HIGHER COSTS
Enrolled
Bill
1. Loss of coal production during first full
year of application -- based on expectation
of 330 million tons of strip production and
685 million tons of total production if there
were no bill. Estimates do not cover poten-
tial losses for provisions that cannot be
quantified, e.g., delays due to litigation,
restrictive interpretation of ambiguous
provisions, surface owner consent, state
control over Federal lands.
In millions of tons:
Small Mines
22-52
Restrictions on steep slopes,
siltation, aquifers
7-44
Alluvial valley floor restrictions
11-66
Total - 1st full year of application
40-162
(% of production-estimated at
685 million tons.)
6-24%
(Notes: A. Administration bill would also have impacted
coal production -- in the range of 33-80 million tons.)
By way of contrast, the vetoed bill involved a potential
production loss of 48-186 million tons and the 'Adminis-
tration's bill could reduce expected production by 33-80
million tons. B. If oil prices stay up and the market
works, coal price increases should help stimulate pro-
duction which, after a few years, would offset losses.
This assumes that new coal production areas can be opened up.
2. Increased oil imports and dollar outflow - assuming 80%
of lost coal production was replaced by oil and 20% from
underground mining.
million barrels per year (4.3 barrels
per ton of coal)
139-559
dollar value ($11 per barrel) - billions
1.5-6.1
- 2 -
Enrolled
Bill
3. Job losses* - assuming 36 tons per day per
miner and 225 work days per year; and .8
non-mining jobs per miner:
direct job losses -
to
20,000
indirect job losses -
to
16,000
to
Total
36,000
*Note: Some of these losses may be offset by job increases
due to (a) lower productivity per man in strip mining, or
(b) possible increases in underground mining which probably
will occur to offset part of the strip mining production
loss. Employment gains for underground mining will be
some years off due to time required to expand such mining.
4. Consumer prices - In addition to higher cost
foreign oil -- would include (in millions).
Assumes 60 million tons strip mining loss.
Fee for reclamation fund
$145 to
$155
Higher strip mining production and
reclamation costs (estimated at
$162 to
60-80¢ per ton)
$216
Costs of Federal and State program
administration (not including unem-
ployment compensation)
$90
5. Lock up of coal reserves. * The U.S. demonstrated reserve
base which are potentially mineable by surface methods
is 137 billion tons. Estimate reserve losses are
(billion tons)
Alluvial valley floor provisions (includes
losses from national forest provisions of
6.3 billion and surface owners provisions
of 0-14.2 billion)
22.0-66.0
National forest (outside alluvial valleys)
.9-.9
Other provisions (e.g., steep slopes)
0-6.5
Total - billion tons
22.9-73.4
*Note: Remaining strippable reserves would be many times
expected annual production.
J TAB
DRAFT VETO STATEMENT
Today I have returned to Congress, without my approval,
the proposed Surface Mining Control and Reclamation Act
of 1975, H.R. 25.
I cannot sign this bill into law because it would
unnecessarily make it more difficult for this Nation
to achieve its goal of energy independence by 1985. Also,
while meeting valid environmental objectives which I
continue to fully endorse, the bill would impose an
unacceptable burden on our Nation's economy by needlessly
increasing consumers' electricity bills and adding to
unemployment.
I have supported responsible legislation to control surface
mining and reclaim damaged land. I understood that this
would result in making coal production more difficult and
would add to the cost of the coal we did produce. The bill
I submitted to Congress on February 6, 1975, struck a proper
balance between our energy and economic goals on the one
hand and our important environmental objectives on the
other. Unfortunately, H.R. 25 does not strike such a balance.
2
Congress has not acted on my proposed comprehensive energy
plan and thus I have nothing against which to judge the
negative energy impact of this bill. Without Congressional
action on my energy proposals I do not know how much
additional leeway the Nation might have in balancing our
energy and environmental objectives. We need immediate
Congressional action on my energy conservation and
accelerated production proposals. H.R. 25 only makes
the goal of energy independence more elusive and this
will ultimately increase the sacrifices required of all
Americans.
Certainly, I cannot now accept more burdensome obstacles
in the path of our energy objectives than I was willing
to accept at the beginning of the year. The absence of
Congressional action on a comprehensive energy program
requires that I be more prudent and careful than ever.
Although I still believe that the Nation can have
environmental safeguards for strip mining comparable
to the proposal I submitted in February, it is clear
that we cannot accept stricter penalties on production
of this critical energy resource.
It is with a deep sense of regret that I find it necessary
to reject this legislation. My Administration has worked
hard with the Congress to try to develop an acceptable
bill. Unfortunately, the Congress did not accept the
compromise measure I proposed even though it satisfied all
3
the key environmental objectives of the bill passed by
the Congress last session. A fair and objective evaluation
of the record will show that my Administration went more
than half way towards the objectives of those who sponsored
H.R. 25.
The following are my key objections to this bill.
First, with respect to coal production, H.R. 25 will result
in a substantial loss in coal production above and beyond
the loss that I felt was acceptable under the legislation
I proposed. The Department of Interior and the Federal
Energy Administration advise me that H.R. 25 would result
in lost production of 40 to 162 million tons a year.
The bill that I urged the Congress to pass in February
would have also had production losses. I am told by the
experts that my proposal would have ranged in production
losses between 33 up to 80 million tons a year. That's
as far as I could go at a time when I could assume that
Congress would speedily enact my energy program. But
because of the delay on my energy program, I know now
that it will be more difficult to achieve our energy
objectives and therefore I cannot accept additional coal
production losses.
4
These production loss numbers are only based upon those
provisions for which an estimate can be developed. I
understand that H.R. 25, in fact, will probably result
in losses on the high end of this range. Furthermore,
this analysis does not include the potential impact of
many ambiguous provisions of the bill for which estimates
cannot be developed. This estimate is, therefore, conserva-
tive.
Second, the reduction in coal production will mean that the
Nation will have to import more foreign oil. This will mean
our dependency will be increased and we will lose more U.S.
dollars and thus jobs. To demonstrate how serious this
problem can be, if every 50 million tons of lost coal is
replaced by foreign oil, we will increase our imports by
215 million barrels of oil a year at a cost of $2.3 billion.
The lack of Congressional action on my comprehensive energy
program is reason enough for alarm at our growing energy
dependency. I believe it would be irresponsible to further
increase this dependency by signing into law H.R. 25.
Third, H.R. 25 will result in an increase in unemployment
and costs to American consumers. Job losses because of
coal production cut backs cannot be offset in increased
reclamation and other activities financed under this bill.
The simple fact is that there would be a major increase in
unemployment because of H.R. 25 and this could not come at
a worse time. Furthermore, the bill would increase
- 5 -
consumer costs particularly for electricity. In addition
to the higher costs of using foreign oil instead of
domestic coal, there would be added costs because of
the taxes imposed on coal and the higher coal production
costs imposed by H.R. 25.
I favor action to protect the environment and reclaim land
disturbed by surface mining of coal and to prevent abuses that
have accompanied such surface mining in the past. We can
achieve those goals without imposing unreasonable restraints
on our ability to achieve energy independence, without
imposing unnecessary costs, without creating unnecessary
unemployment and without locking up our domestic energy
resources.
The need to veto this bill is especially disappointing because
of the extensive effort that has been made to obtain a bill
that would achieve a balance among our various objectives
that is in the Nation's best interests. Bills were proposed
by the Executive Branch in 1971 and 1973. I proposed a new
compromise bill in February of this year. Hundreds of hours
have been spent in working with the Congress in an attempt to
obtain a balanced bill.
The action that I have had to take on this bill does not
resolve the issue of surface mining controls to my satisfaction
nor to the satisfaction of the Nation. We must return to this
- 6 -
issue and find the right answers -- the best possible balance
among our various national objectives that are involved,
including environmental protection, energy, employment,
consumer prices and reduced dependence on foreign oil.
Since the Executive Branch and the Congress began work on
this issue in 1971, there have been fundamental changes in
the circumstances that must be taken into account, including
new mining and reclamation practices, improved state laws,
regulations and enforcement activities, and new objectives
that must be balanced. In order that we may all have a better
basis for addressing this issue, I have today directed the
Chairman of the Energy Resources Council to organize a thorough
review of today's circumstances that bear upon the need for
surface mining legislation and to report back to me with his
findings and recommendations by September 30, 1975. That study
will involve the participation of the Environmental Protection
Agency, the Council on Environmental Quality, Departments of
the Interior, Commerce and Agriculture, the Federal Energy
Administration and other agencies concerned.