Republicans accuse Obama mining regulator of misleading House panel

E&E News
By Manuel Quiñones
January 9, 2014

House Natural Resources Committee Republicans this morning accused Office of Surface Mining Director Joseph Pizarchik of misleading the panel during previous testimony about potential job losses connected to the forthcoming stream protection rule to protect waterways from coal extraction.

At issue during this morning's hearing was an Interior Department Office of Inspector General investigation into the rulemaking, specifically whether the agency pressured workers to change job loss numbers after a 2011 leak and whether it then fired contractors for resisting.

The long-awaited OIG report said OSM directed former contractors to use one set of criteria to estimate job losses, but then "newer OSM employees" asked contractors to change the variables after the potential loss of 7,000 jobs became public.

Assistant Inspector General Robert Knox said during testimony this morning that OSM may have changed the ground rules midgame, but it didn't do so because of politics.

"Clearly, however, the direction given to the contractor was not consistent, and, in fact, there was even disagreement within OSM about which rule to apply in the base-line analysis," he said.

However, panel Republicans said the OIG investigation directly contradicts Pizarchik's previous statements before the panel, in which he discredited the job loss numbers.

They played a video of the OSM director saying "those numbers were fabricated based on placeholder numbers and have no basis in fact." He later repeated, "They have no basis in fact."

Energy and Mineral Resources Subcommittee Chairman Doug Lamborn (R-Colo.) asked Knox, "Shouldn't his actions be the basis of future investigations?"

Knox responded that "there were reasons" for Pizarchik to believe that the job loss numbers were simply placeholder numbers. "We don't have a clear case of a member of our department deliberately misleading Congress," he said.

Lamborn and many other coal boosters on the panel, who think the rulemaking will hurt the industry, were not convinced. Lamborn said OSM fired former contractors as a direct result of the job loss numbers.

"This is a case of killing the messenger because he carries bad news," he said. Rep. Scott Tipton (R-Colo.) at another point accused OSM of wanting to "cook the books."

Knox said OSM didn't fire the contractor. Instead, the agency allowed its agreement to expire because of ongoing concerns with the contractor's work and not necessarily the job loss numbers.

"We believe our investigation is thorough and complete," said Knox. He added at another point in the hearing, "There was no evidence uncovered in our investigation of political interference."

Panel 'chasing its own tail'?

The OIG report said OSM first directed former contractors to use a 1983 rule as a base line to estimate job loss numbers of the current rulemaking. Then it changed its mind to require the former contractors to use the 2008 so-called stream buffer zone rule.

The 2008 rule, promulgated under President George W. Bush, is only in effect in a limited number of jurisdictions that don't have their own strip-mining regulatory programs and where OSM is in full control.

GOP lawmakers unearthed comments from an OSM counsel who responded to concerns from former contractors by saying, "It's not the real world, this is rulemaking."

The Obama administration and environmental advocates have been wanting to scrap and replace the 2008 rule, calling it weaker than the 1983 version promulgated under Republican President Ronald Reagan.

But interestingly, the OIG report said OSM workers knew job loss numbers would be lower when comparing the draft rule to the 2008 Bush rule rather than the 1983 Reagan rule.

Just yesterday, a group of senators called on the Interior Department to press OSM into using its original position for estimating job losses and using the 1983 rule as a base line (E&E Daily, Jan. 9).

Democrats during today's hearing called the focus on such details by coal boosters a waste of taxpayer dollars, especially since the steam protection rule is an "unknown rule, unpublished and unseen," as described by ranking member Peter DeFazio (D-Ore.).

"I don't even know what the there there is or what we're trying to get to," he said. Similarly, Rep. Raúl Grijalva (D-Ariz.) accused the GOP-led committee of "chasing its own tail."

DeFazio and his colleagues urged the panel to instead investigate the impacts of mountaintop-removal coal mining. "That there are health impacts. That there are environmental impacts," said DeFazio. "I'd really like to hold a hearing on that issue."

Both Democrats and Republicans agreed on one thing, however: that OSM could have better managed the contracting and the stream protection rulemaking.

Knox described OSM as hiring contractors and wanting them to develop the rule on an expedited timeline, plus changing the parameters along the way. "I can go on and on," he said when describing problems with the process.

But while many Democrats want OSM to quickly propose a strong rule, Republicans and many coal industry supporters from both parties want the agency to scrap the rulemaking, which critics say has already cost $9 million. Rep. Cynthia Lummis (R-Wyo.) boasted that the Bush-era rule only cost $5 million.

Republicans are now also taking issue with OSM's new contractors working on the rulemaking, especially because of heavily redacted sections of the OIG report suggesting new problems, including agency-contractor disagreements.

Panel Chairman Doc Hastings (R-Wash.) asked, "What are the problems with the new contractor?" He added, "I know that you couldn't tell me what the problems are. It was probably more of a rhetorical question."

And then taking aim at embattled Interior acting Inspector General Mary Kendall, Hastings said, "I have a real problem with the acting IG, because I think she's the one who made that decision. I don't think this is going to go away."

The House Natural Resources Committee has been investigating this issue for years, even issuing subpoenas for documents and recordings. And the OIG report has clearly not satisfied panel leaders.

Hastings said, "It's pretty hard to come to the conclusion that when there is smoke, there's not some fire."