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Today, U.S. Congressman Paul A. Gosar, D.D.S. (AZ-04) released the following statement after participating in multiple committee hearings including one in the House Committee on Natural Resources Subcommittee on Energy and Minerals Subcommittee and one in the House Committee on Oversight and Government Reform Subcommittee on the Interior focusing on restrictive new regulations proposed by the Obama Administration that will harm domestic coal production:
“The endless assault by the Obama Administration on domestic coal is unprecedented and puts the livelihoods of hundreds of thousands of Americans at risk. The president’s reckless obsession to enact his partisan environmental agenda clashes with scientific facts as well as the reality of the economic consequences his disastrous proposals are having on the country.
“The Office of Natural Resources Revenue’s (ONRR) proposed rule is a bureaucratic nightmare that will make it impossible to produce coal on federal lands, including tribal land. If implemented, this fundamentally flawed new regulation will kill jobs, result in an unconstitutional tax on coal exports and bankrupt even more American energy companies.
“The Department of the Interior’s new stream buffer zone rule is even more troubling and will negatively affect both surface and underground coal mines. This terrible new regulation is projected to sterilize between 27% and 64% of recoverable reserves. The associated decline in annual coal production will have a direct impact on employment and risks killing between 112,757 and 280,809 mining-related jobs.
“Congress must block the Obama Administration’s overreaching new regulations utilizing the power of the purse in the end of the year funding bill. Arizonans simply can’t afford the president’s far-left agenda and we must put an end to this nonsensical war on coal.”
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Click HERE or the picture above to watch Congressman Gosar’s questions during the oversight hearing held today by the Subcommittee on Energy and Mineral Resources titled “Ensuring Certainty for Royalty Payments on Federal Resource Production.”
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Background
On Tuesday, December 8, the Subcommittee on Energy and Mineral Resources held a hearing entitled “Ensuring Certainty for Royalty Payments on Federal Resource Production.”
More info on this hearing courtesy of the House Committee on Natural Resources:
“This hearing [focused] on the Office of Natural Resources Revenue’s (ONRR) proposed rule concerning the valuation of produced federal onshore oil, natural gas, and coal for royalty purposes, as well as ONRR’s reinterpretation of existing regulations as to when produced natural gas is in marketable condition.
“ONRR’s reinterpretation of the treatment of bundled contracts has confused and complicated the determination of a natural gas producer’s rightful deductions, and promoted uneconomic conditions, which have led to layoffs and potential bankruptcies.
“On January 6, 2015, ONRR proposed a rule that would make sweeping revisions to the methodologies behind royalty valuation. ONRR projects the rule will cost industry $80 million, whereas industry places the cost in the hundreds of millions.
“ONRR’s proposed valuation reform rule ignores the realities and economics of natural resource production and would grant absolute discretion to ONRR auditors.
“ONRR’s net-back provision within the valuation rule for non-arm’s-length coal transactions is an unwarranted expansion of ONRR’s jurisdiction and presents companies with an unworkable means of calculating the value of their products.”
On Tuesday, December 8, the Subcommittee on the Interior and Subcommittee on Health Care, Benefits and Administrative Rules also held a joint hearing entitled, “Examining the Stream Protection Rule.
More info on this hearing courtesy of the National Mining Association:
“The Department of the Interior’s Office of Surface Mining, Reclamation and Enforcement (OSM) recently proposed the largest rewrite of its regulatory program under the Surface Mining Reclamation and Enforcement Act (SMCRA) since it was enacted in 1977. OSM’s revisions to its existing rules under the SMCRA have led to the misnamed ‘Stream Protection Rule’ (SPR) that was proposed on July 27, 2015. This proposal is a rule in search of a problem.
“The proposed SPR is another example of a punitive, unnecessary and counterproductive regulation designed to drive up energy costs for families and businesses. What OSM originally described as a minor regulation has metastasized into what it now calls ‘a comprehensive, nationally applicable rule’ that will add to already 40,000 coal miners who have lost jobs since 2011. OSM’s proposed SPR is not confined to the stream buffer zone rule as it was in an earlier draft version; this proposed rule amends or modifies 475 existing rules while adding even more. Further, after examining OSM’s information on the proposed SPR, ‘[the nonpartisan Congressional Budget Office] CBO expects that if the proposed rule is implemented it will increase operating costs for the coal industry and reduce coal production.”
OSM has stated publicly that the proposed SPR will be a ‘wash’ for job losses since they are attempting to replace high-wage coal jobs with temporary compliance jobs. However, a recent study done by ENVIRON International Corporation on behalf of the National Mining Association show that the impacts of the proposed rule, should it go into effect, will be much greater than OSM has predicted. Their analysis contains the following findings:
Direct mining jobs at risk of loss are predicted to be between 40,038 and 77,520, with both surface and underground mining adversely affected.
Western region could lose between 4,993-10,317 jobs.
Interior region could lose between 4,931-14,638 jobs.
Appalachian region could lose between 30,115-52,566 jobs.
Total number of jobs at risk of loss, including mining and linked sector employment, is between 112,757 and 280,809.
The overall decrease in recovery of demonstrated coal reserves is between 27% and 64%; both surface and underground mines will be significantly impacted.
The annual value of coal lost to production restriction is between $14 billion to $29 billion.
Total annual federal and state tax revenue potentially foregone because of lost production is estimated at $3.1 billion to $6.4 billion.
In the 114th Congress, oversight and legislative hearings have been held in order to call attention to the potentially ruinous impacts the proposed SPR rule will have on the nation’s coal industry. Legislation aimed at stopping this rule is also in play. H.R. 1644, the ‘Supporting Transparent Regulatory and Environmental Actions in Mining’ Act, or the STREAM Act, introduced by Rep. Alex Mooney (R-W.Va.), passed out of the House Natural Resources Committee on September 10 by a bipartisan vote of 23-12.’”
Congressman Gosar is a cosponsor of H.R.1644 and supported passage of the bill at that time.
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