INTERIOR:

Internal reviews mixed over proposed reorganization of mining agency -- documents

An Interior Department plan for moving the Office of Surface Mining's fee-collection duties to the Office of Natural Resources Revenue got mixed reviews from internal assessment teams, according to documents obtained by Greenwire.

At issue are fees paid by coal companies to OSM for the abandoned mine land (AML) reclamation program.

Last March, Interior Secretary Ken Salazar proposed moving responsibility for some of those fee activities from the Office of Surface Mining to the Office of Natural Resources Revenue, which collects cash from mineral leasing.

But documents show that a joint OSM-ONRR review team recommended against transferring any fee collection because of the cost of the transfer, increased red tape and OSM specialized function.

"After careful consideration of the available alternatives, the team recommends no transfer of AML Fee Function," the reviewers wrote. "There is currently very little, if any, duplication of audit effort for coal responsibilities between OSM and ONRR."

Reviewers added, "The costs to administer the program will increase if the AML fee functions are partially transferred. There are no identified efficiencies resulting from this transfer and the effort to implement the transfer will be an enormous undertaking."

Interior's Office of the Solicitor took a more nuanced view of the proposal. "[W]e believe there is sufficient flexibility to allow the collection of fees to be carried out [by] ONRR, albeit under the direction of OSM," the office wrote.

The proposed merger of OSM fee collections into ONRR has been controversial, with members of Congress and other critics questioning whether the plan conforms to the Surface Mining Control and Reclamation Act, the 1977 law that spawned OSM and the abandoned mine program.

The Interior solicitor said the department can transfer some OSM duties into ONRR as long as they involve little or no employee discretion.

"Accordingly," the solicitor wrote, "as long as the administration of the AML program remains with OSM, we believe the collection of AML reclamation fees may be administratively transferred to ONRR under the provisions of SMCRA and the Economy Act."

An Interior report on the merger last February and a subsequent secretarial order appear to consider the views of the solicitor and the internal review team. But despite indications of review team opposition to moving some of OSM's fee duties to ONRR, at least initially, the department appears poised to move in that direction.

"In order to take full advantage of the efficiencies associated with the scale-up of these functions within ONRR, this report recommends that OSM's ministerial fee collection, distribution, and audit functions be transferred to ONRR," the department's report said.

OSM collects and administers about $258 million of AML-related fees, the report says. Interior describes fee collection as time-consuming for the agency and a potential drain on its ability to attend to other duties.

The report added, "OSM must maintain responsibility for AML fund management and verification that funds distributed through the AML program are expended properly under SMCRA."

Process ongoing

With about 500 employees, OSM is the top federal coal-mining regulator, responsible for overseeing states' strip-mining standards.

Despite promises of keeping OSM as a separate entity within Interior, rather than folding it into the Bureau of Land Management as Salazar once proposed, critics still question the reorganization efforts as a bureaucratic shuffle meant to "dismantle" OSM. They want more evidence of its benefits and are looking to press their case as new leadership takes the reins at Interior.

Stakeholder meetings, and documents and recordings obtained through the Freedom of Information Act, also show both cautious support and deep skepticism among Interior employees, state regulators and other advocates (Greenwire, May 22, 2012).

Documents show Interior hired a conflict management professional at $250 per hour, adding up to an expense of several thousand dollars, to help facilitate meetings with employees and address concerns.

Interior said early estimates indicated that the department "may eventually save $5 million a year from a consolidation," according to a document listing questions about the merger that could be raised by the media and the public. Deputy Interior Secretary David Hayes made similar comments at a Senate hearing in November 2011.

In response to a question, documents show former BLM Director Bob Abbey said, "I really don't know where the $5 million figure came from. I do know that in some briefings with the ... [White House] Office of Management and Budget that there has been some speculation that there will be some savings."

Some of Interior's previously announced plans have called for OSM to share more of its administrative functions like vehicle-fleet management, information technology and equal-opportunity employment compliance. The process is ongoing.

"The directors of the Office of Surface Mining Reclamation and Enforcement, Bureau of Land Management, and Office of Natural Resources Revenue and senior staff from the department continue to work on defining the next steps focusing on reducing duplication, finding efficiencies and strengthening OSM's capacity to oversee surface coal mining operations," Interior spokeswoman Jessica Kershaw said.