McGroarty: Mine regulation the nation can’t afford
Washington’s top regulatory cop is at it again. The Environmental Protection Agency is pushing an obscure regulation that aims to duplicate the responsibilities of other federal agencies and preempt state authority, potentially driving an important industry out of business.
EPA’s target this time is America’s mining industry — the producers of metals and minerals from alumina to zinc, and these days, an increasing array of arcane elements that supply essential raw materials for smart homes, smart phones, smart bombs, MRI machines, EV batteries, wind turbines, solar panels, and much more.
The issue at hand is whether the EPA should duplicate the requirements already placed on mining companies to cover clean-up and reclamation costs. Here’s how it works today: When a mining company wants to extract minerals, it is required to first provide financial assurances that it can cover reclamation, closure, and post-closure costs on a mining site. This is often referred to as “bonding.” It certifies that, from the onset of a new project, a mining company can meet its reclamation obligations. Now EPA, responding to a lawsuit brought by activists, wants to increase the financial burden on mining companies by requiring them to lay out additional capital for the same potential costs they’ve already covered.
Like many regulations, this one sounds reasonable — requiring mineral miners to demonstrate the financial ability to clean up anything that could potentially contaminate land or water from their operations. This ensures that environmental risks are being managed, and are paid for by companies, not taxpayers.
In fact, it’s so reasonable that it’s already being done. Potential risks from mineral mines are currently being managed by two federal agencies, the Bureau of Land Management and the U.S. Forest Service. And it works: Since 1990, not a single mine approved by BLM or the Forest Service has become a taxpayer liability under federal law. Together these two agencies hold several billion dollars in so-called financial assurance bonds that more than cover the cost of reclamation while enforcing comprehensive regulations designed to reduce the risk of hazardous releases. Additional sums of money are also held in long-term trusts established to address groundwater quality and other issues that may arise.
Not satisfied to duplicate what these two federal agencies have accomplished, EPA wants to preempt the authority of state regulators who impose their own bonding requirements on mining operations. Today, no mine can be approved for operation without first meeting federal and state requirements covering mine design, operation, and closure. That’s why many state regulators and the Western Governors’ Association believe EPA’s duplicative rule is entirely unnecessary — a solution in search of a problem.
Behind all this is an EPA bowing to the demands of activists who ignore current environmental and financial assurance laws that protect taxpayers from post-mining costs. To justify a new layer of federal rules, activists point to old legacy mines from a bygone era, abandoned long before the advent of current environmental laws. They ignore the fact that money set aside under EPA’s proposed rule will not fund the cleanup of such legacy sites.
No wonder a growing chorus of critics, including key congressional committee chairmen, are joining state regulators in asking tough questions about EPA’s approach: Why has EPA not consulted financial institutions to properly assess the market’s capacity to cover such financial obligations? Why is EPA deaf to suggestions from small business on how it should minimize economic impacts? And, why do we need a new layer of federal regulation when current law already provides the insurance that the public expects?
The minerals these mines produce, under some of the highest environmental standards in the world, are the building blocks for a competitive 21st Century manufacturing base. America needs them. Yet we are now 100 percent import-dependent for 19 key minerals and metals, and more than 50 percent import-dependent for 24 others.
With our economic and national security increasingly dependent on new uses for dozens of metals and minerals, the last thing we need is a new layer of federal regulation that makes U.S. mining more difficult, and deepens our already dangerous dependency on foreign suppliers.
Mr. McGroarty is president of American Resources Policy Network, an education and public policy research organization in Washington, D.C. He served as a special assistant to the president in the George H.W. Bush White House and was senior director of the White House Writers Group from 1994-2006.