JurisdictionUnited States
Review and Analysis of the New BLM Surface Management (3809) Regulations


R. Timothy McCrum
Edward M. Green
Crowell & Moring LLP
Washington, DC 20004

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A. The State of the Domestic Hardrock Mining Industry 1

Percentage Allocation of North American Precious Metals Producers' Development Expenditures, 1996-99 (Dobra 2000)

Percentage Allocation of North American Precious Metals Producer Development Expenditures, 1996-99

• A picture can be worth a thousand words.

• The low price of gold, which is set in world markets, cannot explain the downward U.S. mineral development investment trends relative to other countries.

• The domestic mining industry believes that U.S. regulatory impediments are the dominate cause for the investment trends identified in Dr. John Dobra's analyses. See, e.g., Comments to U.S. Interior Department of Dr. John Dobra, University of Nevada, dated February 22, 2000.

• The Bureau of Land Management ("BLM") has promulgated broad and burdensome new revisions of the 43 C.F.R. Subpart 3809 rules at a time

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when investment incentives for mineral exploration and development are depressed.

B. The New BLM 3809 Regulations.

• Published in the Federal Register on November 21, 2000 (65 Fed. Reg. 69,998).

• Effective on January 20, 2001

• 135 pages of three-columned fine print in the Federal Register

C. Other Key Documents.

1. Final Small Business and Regulatory Flexibility Analysis (October 21, 2000).

2. Final Benefit — Cost Analysis/Unfunded Mandates Reform Analysis (October 21, 2000).

3. Final Environmental Impact Statement (FEIS) (October 2000) (two volumes).

• BLM's own FEIS, and related economic analyses, concluded that, as a result of the revised regulations, the value of mine production originating from public lands is estimated to decrease by 10% to 30%, or by $169 million to $484 million. FEIS, V.I, p. 288.
• The FEIS further predicts that such decreased production will, in turn, cause the loss of:
• 2,100 to 6,050 jobs
• $305 million to $877 million in total industry output, and
• $138 million to $396 million in total personal income. FEIS, V.I, p. 288.
• Nevada's share of the loss in mine production would be 70% of the total loss, or about $351 million. FEIS, V.I, p. 288.
• The FEIS asserts that the impacts in Nevada are based only on the portion of production coming from public lands. To the extent that the affected portion from public lands may affect a larger portion of production coming from non-BLM lands, the impacts to Nevada are understated.
• The impact on small communities will be, according to BLM, significant. The loss of well-paid jobs would result in outmigration, which would lower real estate values, the volume of local business

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activity, school enrollments, organizational membership, and community leadership, with associated adverse impacts on local tax bases. FEIS, V.I, p. 264.

• In 1998, metal mining contributed $324 million in personal income to Elko and Eureka Counties, about 29% of the area's total personal income. FEIS, V.I, p. 281.

4. National Research Council Report — Hardrock Mining on Federal Lands (1999), and Congressional Appropriations Restrictions.

a. In promulgating the regulations, Interior was subject to the direction of Congress in § 156 of the Fiscal Year 2001 Interior Appropriations Act, 114 Stat. 922, 962-63 (Oct. 11, 2000) to adopt only regulations that are "not inconsistent with" the National Research Council's 1999 report on Hardrock Mining on Federal Lands in the U.S.
• The National Research Council's report found that the existing federal-state regulatory framework governing mining on public lands was "generally effective" and that state and federal programs were generally well coordinated. The report concluded: " Improvements in the implementation of existing regulations present the greatest opportunity for improving environmental protection and the efficiency of the regulatory process." It recommended that BLM limit its revision of the regulations to filling the few regulatory gaps.
• The National Research Council did not recommend that BLM include a "mine veto" provision in its regulations. Nor did it recommend that BLM adopt comprehensive new performance standards regulating environmental media like ground water and surface water.
b. The New "Mine Veto" Authority (New § 3809.5). The new performance standards and mine veto provision would expand BLM's authority beyond what is granted under Section 302(c) of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. § 1732(c), which allows only regulations that are necessary to prevent "unnecessary or undue degradation." Traditionally, Interior has not interpreted FLPMA to allow BLM to exercise a "mine veto" authority. See, e.g., Attachment C hereto, Memorandum from Interior Secretary Babbitt to Mr. Bruce N. Reed, Asst. for President for Domestic Policy, dated May 27, 1997 (identifying 1872 Mining Law and 43 C.F.R. § 3809 rules as "serious implediments which cannot be alleviated administratively..." in connection with Clinton Executive Order No. 13007 on Indian Sacred Sites."). Such a novel interpretation first surfaced in an Interior Solicitor's Opinion, approved by Secretary Babbitt, released January 14, 2000, entitled "Regulation of Hardrock

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Mining," which involved the proposed Glamis Imperial Mine in the California Desert Conservation Area.

c. NRC Recommendations. Alternative 5 in the FEIS described what BLM believed to be the filling of the limited regulatory gaps identified in the NRC Report. In rejecting that FEIS Alternative 5 ("NRC Recommendations"), BLM considered and rejected "chang[ing] the existing regulations only where specifically recommended by the NRC Report." See FEIS, V.I at 60. BLM's own FEIS predictions illustrate the sharp contrast in adverse effect on jobs and rural economies between the new 3809 regulations and the NRC recommended gap-filling of the existing "generally effective" rules:
New 3809 Regulations NRC Recommended Alternative
Production losses 10% to 30% ($169 million to $484 million) Up to 10% ($12 million to $100 million)
Job losses 2,100 to 6,050 150 to 1,260
Total Industry Output losses $305 million to $877 million $21.5 million to $182 million
Total Personal Income losses $138 million to $396 million $9.7 million to $82 million
Employee Compensation losses $76 million to $218 million $5.4 million to $45.2 million
Value-added losses $157 million to $453 million $11.1 million to $93.7 million

Compare FEIS, V.I at 288 with id. at 295.

d. Fundamental NRC Recommendations Were to First to Improve Implementation of Existing Regulations. Instead of a wholesale rulemaking revision like the new 3809 regulations, the NRC Report primarily recommended improved implementation of existing regulations, supplemented by limited, discrete regulatory gap filling. NRC Report at 5-6. BLM's new 3809 regulations effectively rejected this overarching recommendation, instead rescinding all of the existing 3809 rules and replacing them with an expansive regime which will cause many thousands of job losses and severe economic harm. As for the NRC recommendation of improved implementation, BLM plans to study it later.

BLM is only now "developing a strategic plan to evaluate the implementation of NRC's nonregulatory recommendations." See FEIS, V. II at 523 (emphasis added). BLM made this admission in specific response to one of the many comments which stated: The NRC "named improved implementation as the single greatest opportunity for improving environmental protection. BLM should implement the many NRC nonregulatory recommendations for improving implementation

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of the program." FEIS V. II at 523. Although the BLM stated in the FEIS that it "assume[s] full implementation" and "adequate agency funding and staffing..." for each FEIS alternative (FEIS, V. I at 125), BLM never evaluated the environmental benefits which would have resulted from improved implementation of the many nonregulatory recommendations made by NRC in conjunction with the existing regulations. The NRC Report was published more than a year before the new 3809 regulations were published in final form, providing ample time to have analyzed improved implementation of the existing regulations as a regulatory option, let alone develop a "strategic plan" for such analysis.

E. The Western States: Since 1997, the Western Governors' Association and many individual States have opposed BLM's proposed new 3809 regulations.

• In its most recent policy resolution on the subject, the WGA found that State environmental and reclamation regulators believe that the current BLM 3809 regulations, coupled with state regulations are working well. WGA Policy Resolution 00-13.

• The WGA, therefore, concluded that much of the proposed rule is unnecessary, unwarranted, or unwise. WGA Policy Resolution 00-13.


A. Mining Industry Challenges.

National Mining Ass'n v. Babbitt et al., D.D.C. No. 1:00CVO2998 (HHK); Complaint filed Dec. 15, 2000. Attachment A to this outline, describes the background of the 3809 rule, opposition of Western States, and the U.S. Congress' restrictions. NMA alleges that the new 3809 regulations violate, inter alia, the FY2001 Interior Appropriations Act, FLPMA, the General Mining Laws, 30 U.S.C. § 22 et seq., the Regulatory Flexibility Act, 5 U.S.C. § 601 et seq., the National Environmental Policy Act, 42 U.S.C. § 4321 et seq., and the Administrative Procedure Act, 5 U.S.C. § 551 et seq.

Newmont Mining Corp. v. Babbitt, D.D.C. No. 1:01CV00023 (HHK); Complaint filed Jan. 5, 2001.

• Both cases assigned to the Honorable Henry H. Kennedy...

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