Cooperative Federalism Under the Surface Mining Control and Reclamation Act: Is This Any Way to Run a Government?

Mark Squillace

Editor's Summary: Most environmental statutes reflect a decision by Congress to split implementation responsibility between state and federal governments. The author asks whether this is wise. Focussing on the Surface Mining Control and Reclamation Act (SMCRA) and its implementation, he compares experiences under the Act with direct federal regulations and state — federal "cooperation." The author argues that criticisms of direct federal regulation, while valid in some situations, do not carry sufficient force to justify abandonment of that model. He concludes that cooperative federalism under SMCRA not only fails to meet statutory goals of environmental protection, but is difficult to carry off and wastes state and federal resources through pointless duplication and vexing oversight activity.

Professor Squillace, formerly Director of the Litigation Project at the Environmental Policy Institute, is an Associate Professor of Law at the University of Wyoming. A longer version of this article will appear this spring in the special coal issue of the West Virginia Law Review.

[15 ELR 10039]

One of the hallmarks of the environmental legislation passed by Congress in the 1970s was its increased reliance on a regulatory framework that has come to be known as cooperative federalism. Under the cooperative federalism model, the states are given the opportunity to assume all or part of the responsibility for a regulatory program if they submit to the appropriate federal agency a program that satisfies certain standards set down by Congress or by the agency through implementing regulations. As an incentive to encourage states to accept such responsibility, these statutes typically provide for partial federal funding of the program. States may, of course, refuse to accept responsibility, in which case the federal government assumes regulatory control in that state.

To varying degrees, virtually all of the major regulatory laws in the environmental field employ this scheme. Under the Clean Air Act, ambient air quality standards may be achieved through state implementation plans.¹ The Clean Water Act authorizes point source discharges of dredge and fill materials and other pollutants to be regulated through a state program.² The Resource Conservation and Recovery Act provides for state development of hazardous waste management plans.³ The Safe Drinking Water Act affords the states the opportunity to assume primary enforcement responsibility.⁴

While state participation or control has become commonplace in environmental legislation, the broad delegation mandated by the Surface Mining Control and Reclamation Act of 1977 (SMCRA) is unparallelled.⁵ SMCRA thus offers an excellent tool for the study of the performance of the cooperative federalism model. This article offers some insights into the successes and failures of cooperative federalism under SMCRA and compares that record with the results that might be expected from the most obvious alternative to cooperative federalism — direct federal regulation. It is the opinion of the author that cooperative federalism fails in its most important objective of achieving state and federal cooperation. Furthermore, direct federal regulation offers the more efficient and effective method of achieving regulatory goals, while at the same time affording the states an opportunity to perform a substantial role in assuring the integrity of the regulatory process.

[15 ELR 10040]

History and Framework of the Surface Mining Act

By the early 1970s, Congress had become increasingly aware of the failure on the part of a number of states to impose adequate regulatory standards on surface coal mining operations. Landscapes devastated by coal mining operations, and abandoned without any effort at reclamation, presented a threat to the nation's land resources that Congress simply could not ignore.⁶ A small number in Congress, led by Congressman Ken Hechler of West Virginia and a cadre of citizen organizations from the Appalachian states of West Virginia and Tennessee, supported an outright ban on strip mining.⁷ Surface mining, however, had become an increasingly popular method of coal extraction. By the mid-70s surface mining had overtaken underground mining as the predominant method of coal production.⁸ Moreover, demonstration projects and emerging regulatory standards established by a handful of states had shown that surface mining could be carried out without causing long-term environmental damage.⁹ Such realities explain the prevailing sentiment in Congress, fashioned by the law's chief architect, Congressman Morris Udall of Arizona, in favor of a regulatory program that would insure that future mining operations were conducted in a manner consistent with environmental values.

The original bill from which SMCRA was molded envisioned a primarily federal program for regulating mining activities under the model of the Mine Enforcement Safety Act (now the Mine Safety and Health Act).¹⁰ While many of the ideas from the Mine Safety Act were retained, later versions of the proposed law were redrafted to incorporate the cooperative federalism concept. Bills following this model were passed by wide majorities in both houses of Congress in 1974 and 1975, though both bills were ultimately vetoed by President Ford. The Surface Mining Control and Reclamation Act was again passed by the Congress in 1977, in much the same form as the 1975 bill. On August 3, 1977 President Jimmy Carter fulfilled a campaign promise by signing the bill into law.¹¹

SMCRA established the Office of Surface Mining Reclamation and Enforcement ("OSM" or "Office of Surface Mining") within the Department of the Interior to carry out the requirements of the law. One of OSM's chief responsibilities is the promulgation of regulations to govern the administration of the Act.¹² These regulations establish standards and procedures to which all state and federal programs must adhere. In those states that obtain secretarial approval to administer their own program, OSM assumes an "oversight" role. The purpose of this oversight responsibility is to assure that the state complies with the Act's requirements.¹³ If a state fails to obtain federal approval to administer its own program, or if a state fails to administer its program in accordance with the requirements of the Act, then OSM performs the regulatory responsibilities for that state.¹⁴

The cooperative federalism scheme adopted in SMCRA is comprehensive, encompassing all aspects of permitting, bonding, and enforcement of performance standards for all surface coal mines and underground mines with surface impacts. Section 503 of the Act provides that any state "which wishes to assume exclusive jurisdiction over the regulation of surface coal mining and reclamation operations [within its borders]. . . shall submit to the Secretary . . . . a State program which demonstrates that such State has the capability of carrying out the provisions of this Act . . . ."¹⁵

In addition, states with approved regulatory programs may administer an abandoned mine land program in accordance with Title IV of the Act.¹⁶ Under this program, states are allocated a portion of the monies collected through a fee imposed on each ton of mined coal.¹⁷ States are also authorized to regulate mining on federal lands,¹⁸ although a recent attempt by former Secretary of the Interior James Watt to delegate wholesale authority for the regulation of mining on federal lands to the states was struck down by the federal district court for the District of Columbia.¹⁹

In order to assure that the states administer their programs in accordance with the requirements of the Act, [15 ELR 10041] the Secretary retains an oversight responsibility. The Act makes clear that, among other things, the Secretary retains the responsibility to conduct inspections and take enforcement action directly against a coal company where the state fails after notice to take appropriate action on its own.²⁰ Further, where there is a complete breakdown in a state's administration of all or part of its approved program, the Secretary must hold a public hearing and, if necessary, assume responsibility over all or part of that program.²¹

As an incentive to encourage states to accept responsibility for the administration of their programs, the Act provides for annual grants not to exceed 80% of the total costs for administering the program in the first year, 60% of the total costs incurred in the second year, and 50% of the costs incurred in each succeeding year.²² In addition, states with approved programs are permitted to recoup 50% of the Abandoned Mined Land Fund monies that are contributed by operators in their states.²³ In all, twenty-five states, including every state with significant coal reserves, submitted programs to the Secretary that ultimately were approved.²⁴ Federal programs were adopted in a handful of states with limited coal reserves, including several states with no current mining activities.²⁵

Regulatory Choices

The New Federalism of the Reagan Administration has brought an increased public awareness of states' rights and a perceived need to limit the influence of the federal government in state and local decisionmaking. Long before the New Federalism, however, Congress had been sensitive to the charge that federal bureaucracies unduly interfere with state and local prerogatives and are inefficient and ineffective distributors of the public weal. Nonetheless, when faced with the failure of the states to address fundamental problems, which Congress has so often faced in the environmental area, some degree of federal intrusion is inevitable. Indeed, federal action may be the only feasible way to assure regulation of costly environmental problems, since the states may find it economically difficult to impose restraints that their neighboring competitor states are unwilling to impose. Section 101(g) of SMCRA recognizes this fundamental conflict, expressing Congress' finding that "[national] surface mining and reclamation standards are essential in order to insure that competition in interstate commerce among sellers of coal produced in different states will not be used to undermine the ability of the several states to improve and maintain adequate standards within their borders. . . ."²⁶

While Congress plainly has authority under the commerce clause to regulate the environmental effects of mining activities,²⁷ it seems unlikely that Congress could compel the states to address the environmental problems that it identifies. Such a requirement would most likely run afoul of constraints imposed by the tenth amendment to the Constitution, as interpreted by the Supreme Court.²⁸ Congress is thus left with two options: it may choose to regulate the problem directly, or it may provide inducements to the states to accept regulatory responsibility subject to federal standards, as it does when employing the cooperative federalism scheme. In recent years, when addressing environmental matters, Congress has most often chosen the latter course of action. SMCRA was no exception to this pattern. In some circumstances, particularly where the local problem to be addressed is unique, the cooperative federalism approach may make a good deal of sense.²⁹ In the surface mining area, however, cooperative federalism serves only to complicate the implementation and enforcement of what are largely uniform standards that all coal operators must meet. The remainder of this article explores the basis for this conclusion, and offers support from the experience gained by OSM over the past several years.

The Problems With Cooperative Federalism Under SMCRA

Viewed from the perspective of Congress' desire that the states take the lead in the regulation of mining activities, the cooperative federalism program under SMCRA has been a smashing success. Every state with significant coal reserves, and some with rather insignificant coal reserves, have taken on the regulatory responsibility for mining in their states.³⁰ Serious questions remain, however, as to whether the cooperative federalism model has hindered the accomplishment of the more fundamental goal of strict regulation of mining activities.

[15 ELR 10042]

An initial problem was that all of the coal mining states east of the Mississippi River, with the exception of West Virginia, encountered substantial delays in establishing permanent regulatory programs. Congress had mandated that any state that wanted to assume responsibility for regulating mining must submit a program to the Secretary no later than February 3, 1979. The Secretary was required to make a decision on all such programs by August 3, 1979. If a state failed to obtain approval during the first round, the state was permitted a second chance before any federal program was imposed on the state. Under the statute, however, final decisions on all programs were to be made no later than December 3, 1979.³¹

For a variety of reasons, these statutory deadlines were not met. First, the Secretary was unable to promulgate final regulatory standards for the state programs until March 3, 1979. Because of this failure the states were given a short reprieve by the federal district court for the District of Columbia.³² Subsequently, many states took advantage of a provision in the Act that prohibited imposition of a federal program in a state if the state was precluded from submitting such a program by a court of competent jurisdiction. Industry, working in cooperation with the states, happily brought cases in friendly state courts in eight of the major coal producing states of the eastern United States, and obtained such injunctions.³³ As a result of this and other delays in final decisions by the Secretary, many state programs were not approved until late 1982, nearly three years after the statutory deadline.

While one can hardly ignore the harm caused by the substantial delays that were encountered in implementing the permanent regulatory program under SMCRA, those delays finally have been overcome. Unfortunately, problems with the implementation of the Act have continued.

Following approval of the various state programs, the Secretary is required by regulation to conduct annual reviews of the state programs to evaluate state compliance with the statutory standards.³⁴ The Secretary experienced considerable delay in preparing these reports, and when the initial reports were finally prepared, they lacked much critical information. Congressional pressure has led to improved reports that afford a better view of the performance of the various states in implementing their programs. These reports identify substantial problems in virtually all states.³⁵ Obviously, many problems can be expected to be worked out over time. Other problems, however, will almost certainly remain, owing in part at least to the undeniable strain that has developed between the state and federal regulatory agencies. Much of this strain can only be attributed to cooperative federalism.

The problem lies in the nature of the beast. The initial stage of the cooperative federalism process is the development of individual state programs. At the outset of this process the states will almost certainly lack the technical and legal expertise to comprehend or appreciate the extent of their responsibilities. When informed of those responsibilities by the federal government, the states are likely to resist what they will perceive as a radical departure from their current program. Inevitably then, this first encounter will result in a negative experience for both the federal and state parties, and an inauspicious beginning for cooperative federalism.³⁶

Once the initial confrontations are resolved and a state program is approved, the state assumes primary regulatory responsibility. Not surprisingly, the states would prefer to be left alone after they assume primacy. They believe that they are performing their responsibility more than adequately (and certainly by past standards, there has been a vast improvement), and they resent any federal intrusion. By law, however, OSM must exercise oversight authority. Inevitably it will find something about the state's performance to which it might object. Yet the federal agency is sensitive to criticism received from the states and reluctant to intervene in any but the most serious cases. The supposed "cooperation" envisioned by the Congress is thus reduced to undisguised tension that can lead only to one of two results: confrontation between the state and federal governments, or backsliding from the congressional mandate.

A case illustrative of the problem involves the State of Colorado. The Colorado Division of Mined Land Reclamation takes the position that state inspectors should have discretion not to cite a coal operator for an observed violation of the law.³⁷ Colorado believes that many factors need to be considered before citing an operator, and that often compliance with the Act's standards can best be achieved by avoiding a confrontation with the operator that inevitably results from the issuance of a citation. The federal law, however, establishes a policy of mandatory enforcement. When an inspector observes a violation he or she must cite the operator. Discretion may be exercised only when considering whether or not to assess a civil penalty.³⁸

To Colorado's credit, it has been forthright with OSM regarding its policy. Various citizen groups have criticized [15 ELR 10043] OSM for failing to enforce the federal standard in Colorado.³⁹ OSM, it seems wishes that the state were less frank about its policy so that it could simply ignore it. Colorado refuses to cooperate, however, and OSM finds itself forced into the position it so much wants to avoid; it must either take action against the state or ignore the specific mandate of the law. To date, OSM has chosen the latter course, but it is perhaps only a matter of time before citizens force OSM into the confrontation.

An even more serious problem arises once OSM reaches the next, previously unthinkable, step in the confrontation process: assuming authority over a state program because of the state's failure to comply with federal standards. Consider, for example, this all too possible scenario.

The State of Kentucky, which has thousands of mines within its borders, fails to meet its schedule for approving permits for all operations in the state.⁴⁰ What options are available to the federal government? OSM can talk with the state and seek assurances that the state will improve its performance. Beyond this step, the federal options, though theoretically powerful, are as a practical matter very limited. The statute requires OSM to respond by conducting a public hearing to evaluate the state's compliance with the terms of its program.⁴¹ If OSM finds that the state is not meeting its obligations, its only option is to assume responsibility for the delinquent parts of the program. But, as Kentucky is well aware, the federal agency is ill-equipped to assume permitting responsibility for the approximately 7,000 mines in Kentucky. Moreover, should the federal government decide to assume responsibility, it will encounter significant delays, and possibly some resistance, in obtaining additional funding from Congress to carry out this responsibility.⁴² Once it finally obtains the necessary money and sets out to handle permitting in Kentucky, it will likely face a new plan from Kentucky to upgrade its system and retake responsibility for permitting. The Secretary is required to duly consider and, if it meets the requirements of the law, approve such a plan.⁴³ In the event that the plan is approved, the Secretary's newly hired Kentucky work foce will have to be laid off, having accomplished nothing but the expenditure of thousands of federal dollars.

OSM's past experience in assuming responsibility over state programs supports the rather alarming scenario hypothesized above. In October of 1984, OSM was forced to assume control over the Tennessee surface mining program following a complete breakdown of the state system.⁴⁴ After some prodding from local citizen groups, including the filing of a notice of intent to sue the state and federal agencies,⁴⁵ the Secretary held a public hearing in Tennessee, in accordance with the requirements of section 521(b) of the Act.⁴⁶ The State made a lengthy presentation explaining how it would improve its program. The Secretary nonetheless decided that he would have to assume at least partial responsibility for the administration of the Tennessee program.⁴⁷ The State, apparently spent by the whole process, decided to relinquish its regulatory efforts and turn the entire responsibility over to the Secretary.⁴⁸ Tennessee has announced, however, that it hopes to be back with a new program in 1986.⁴⁹

Not surprisingly, the Secretary lacked the resources to assume such responsibility and has had to approach Congress for a supplemental appropriation. To cover its regulatory responsibilities in Tennessee in the interim OSM has had to substitute staff from other offices, thus severely undermining its entire oversight program.

OSM has encountered a similar problem in Oklahoma. Oklahoma received final approval to administer a permanent regulatory program on January 19, 1981.⁵⁰ Shortly thereafter, on February 12, 1981, the Oklahoma legislature voted to repeal the regulations that form the very core of the program. After much cajoling on the part of OSM, but no formal action, Oklahoma finally relented and reinstated its rules. More than a year had elapsed during which time neither the state nor federal agencies made any effort to enforce the federal regulatory requirements.⁵¹ Lack of enforcement in Oklahoma became so pronounced that a coal company in the state filed a citizen complaint against a competitor because of its blatant disregard of the law. The complaining coal company was concerned that the state's failure to enforce the program was making a mockery of its own good faith efforts to comply with the law, and placing it at a serious competitive disadvantage. When a federal inspector finally visited the site in dispute to determine the validity of the complaint, he identified 141 violations of the Oklahoma program!⁵² OSM has now assumed primary [15 ELR 10044] responsibility for implementing the Oklahoma program, although the state has been allowed to retain a certain degree of authority.⁵³ This has resulted in a further strain on OSM's resources. There are strong indications that Oklahoma will seek to regain full responsibility in the coming months.⁵⁴

The uncertainties of the federal oversight program have caused administrative nightmares for OSM. It has had to assume that its role would be limited to overseeing generally successful state programs. Any other posture would entail large inefficiencies in terms of the cost of maintaining a larger federal work force and in terms of the dollars lost in assisting the states in establishing their programs.⁵⁵ Ideally, from an environmental perspective, the agency would establish an expert back-up force to deal with problems in individual states, but it is virtually impossible to predict with any degree of certainty how long problems will last or how serious they will be. As described above, OSM has already encountered substantial administrative and financial problems in assuming responsibility for the Tennessee and Oklahoma programs. Yet mining in these states is almost negligible when compared with mining in states like Kentucky, Pennsylvania, and West Virginia. For example, should OSM have to assume responsibility for the Kentucky surface mining program and the 7,000 mining operations in Kentucky, it probably would have to increase its entire staff by 300-400 persons.⁵⁶ At any time, however, the state might seek to resume its authority, thus prompting massive federal lay-offs and/or reassignments.⁵⁷ The resources expended on training these employees will be lost in the shifting of personnel.Moreover, such drastic fluctuations in staff cannot reasonably be accounted for within the constraints of the federal budget.

The Alternative: Direct Federal Regulation

Currently, OSM exercises primary regulatory responsibility over mining activities in eleven states. Of these, only Tennessee and Oklahoma have significant mining activities so as to afford a useful comparison between cooperative federalism and direct federal regulation, and OSM has only recently assumed responsibility for mining in these two states. These programs essentially track the federal rules, incorporating most of their requirements by reference.⁵⁸ The resulting uniformity offers a distinct advantage in that federal agency personnel, already familiar with the federal rules, can operate more efficiently and effectively.⁵⁹ Moreover, because there are no significant differences between the state and federal standards, it is very unlikely that the agency will face litigation over the separate federal programs as it has so frequently faced over the state programs. Indeed, to date, no federal program has been challenged. More uniform rules might also be expected to better implement the congressional policy of insuring that "competition in interstate commerce among sellers of coal in different states will not be used to undermine the ability to the several states to improve and maintain adequate standards on coal mining operations within their borders."⁶⁰

Although it may be difficult to draw firm conclusions from OSM's limited experience in implementing permanent regulatory programs for the states, some sense of its ability to administer a national regulatory program can be gleaned from its experience during the so-called interim regulatory program.

During the deliberations on the Act, Congress realized that considerable time would elapse before the permanent regulatory program it had chartered could be implemented. To fill the gap between the time the law was passed and the time the permanent programs became effective in the states, Congress provided for an interim program.⁶¹ The interim program was limited to the enforcement of various performance standards and did not include any of the detailed permitting or bonding requirements included in the permanent program. Further, inspection frequency was set at twice per year rather than monthly, as required by the permanent program. The interim program was, however, a truly national program, implemented and enforced by the federal government.⁶²

To be sure, there was considerable tension between OSM and the states during the interim program period. Much of this tension, however, can be attributed to the sudden imposition of new regulatory standards that in many instances went far beyond the existing requirements of the states. Over time one would expect this tension to lessen as the states learn to accept the change, and as the federal government fine tunes its policies and procedures. The same cannot be said for the tension that exists under the cooperative federalism model. There the constant second guessing of state decisions will inevitably lead to either confrontation and hostility or acquiescence and ineffective oversight.

On the other side, various environmental organizations complained that OSM was not meeting its biennial [15 ELR 10045] inspection mandate.⁶³ On the whole, however, OSM's performance during the interim program was perhaps its greatest success. Thousands of enforcement actions were taken by OSM and hundreds of thousands of dollars in penalties were assessed and collected. Though many of these actions were challenged, few resulted in a reversal of the agency's action. A review of the surface mining cases published in Interior Decisions for the years 1979-1981, the principal period of the interim program, supports the conclusion that, on the whole, OSM was neither overzealous nor underzealous in enforcing the law.⁶⁴

OSM's performance during the interim program suggests, rather convincingly, that the agency can operate effectively on the national level. Moreover, there are several clear advantages to direct federal regulation of mining activities that lend further strength to the argument that a national regulatory program could succeed. Only one agency and one level of government would be involved directly in the regulatory process, thus limiting bureaucratic inefficiencies. There would be little duplication of effort between state and federal agencies. Finally, technical resources could be used more efficiently. This last assertion is perhaps best explained by example.

Among the many detailed requirements contained in the federal act and regulation is a requirement that a coal operator seeking a permit determine the "probable hydrologic consequences of the mining and reclamation operations both on and off the mine site . . . . so that an assessment can be made by the regulatory authority of the probable cumulative impacts of all anticipated mining in the area upon the hydrology . . . ."⁶⁵

Impacts on the hydrologic system are among the most serious from coal mining operations. Mining operations often interrupt aquifers and other hydrologic systems and can drastically alter the quantity and quality of water supplies. Water discharges from a mining operation also pose significant environmental problems. Thus one of the most important and difficult tasks facing the regulatory agency is ascertaining the hydrologic impact from a proposed mining operation. Often the task is complicated by other existing or proposed mining operations in the area and, frequently, the impacts will run across state lines.

Currently, hydrologic problems are addressed simplistically if at all. SMCRA's requirements that the operator determine the "probable hydrologic consequences" of mining and that the agency determine the "cumulative impacts" are honored most often in the breach.⁶⁶ Practical realities of the cooperative federalism scheme make that result seemingly inevitable.

While hydrologic problems probably present the most thorny technical problem for the regulatory agencies, a similar argument can be made with respect to soil resources, revegetation success, the special problem of prime farmland reconstruction, and a host of other technical matters. Some of these problems are indeed limited to certain regions of the country. But there is sufficient flexibility in the regulatory system to accommodate and respond to these differences, while at the same time assuring uniformity in those areas of the country where the same kinds of conditions exist.⁶⁷

All affected parties would benefit if a data base containing information from the various existing and proposed mine sites throughout the country were collected and analyzed through a single entity. The cost of hiring the experts needed to analyze this information cannot readily be borne by each state. A system of direct federal regulation, however, would allow for the establishment of a national data base on a wide range of technical matters. Qualified personnel would be more affordable because much duplication of effort would be eliminated. Ultimately, the success or failure of a direct federal regulatory system may depend on how well it is managed. But unlike the cooperative federalism scheme, direct federal regulation offers at least the prospect for sophisticated technical resource review.

A key problem with the direct federal regulation model lies in the danger inherent in centralization of the bureaucracy in Washington, with little sensitivity to local needs and conditions. Congress was particularly concerned about this problem and established as one of the fundamental purposes of the law that "because of the diversity in terrain, climate, biologic, chemical and other physical conditions in areas subject to mining operations, the primary governmental responsibility for developing, authorizing, issuing, and enforcing regulations for surface mining and reclamation operations subject to this Act should rest with the States."⁶⁸

Conceding, however, that surface mining problems are often localized, it does not necessarily follow that regulatory responsibility is better left to the states. Indeed, particular physical conditions do not respect state boundaries, and conditions can vary widely within any given [15 ELR 10046] state.⁶⁹ Experience gained in Kentucky is often directly transferable to problems in Virginia, West Virginia, Pennsylvania, and Tennessee. Likewise, the coal mining in the prime farmland areas of Illinois, Iowa, Ohio, and Indiana exhibit common characteristics. The current regulatory system fails to allow for any efficient transfer of knowledge among states with common problems and requires each state to develop high levels of expertise on a wide range of technical issues. Neither the states nor the federal government can afford to hire sufficient experts and the end result is lower quality decisions. To the extent that problems are regional in nature, the federal agency can and should tailor the rules to reflect that reality. Wholesale delegation of the regulatory responsibility to the state is neither a necessary nor desirable means for resolving such problems. Properly managed regional offices might develop expertise in dealing with local problems, and indeed, the limited OSM field personnel have worked toward this goal.

Certainly there are other reasons for looking askance at direct federal regulation. In his article on the problems of federalism in national environmental policy, Professor Stewart describes three such reasons: (1) diseconomies of scale; (2) impairment of self-determination; and (3) national ideals as "pyramids of sacrifice".⁷⁰ The first of these is obvious. The size of the bureaucracy may simply be too unwieldy to operate efficiently. While some degree of inefficiency might be expected from the larger federal bureaucracy, it seems unlikely that the diseconomics would even approach those under the current dual regulatory system.⁷¹

Related to the problem of diseconomics of scale is the argument that large government may, in the interest of uniformity, impose burdens on activities in certain areas that are not justified. As was noted above, however, problems that arise in the mining area are not so localized that they cannot be accounted for under a national regulatory scheme.⁷²

The impairment of self-determination or the ability of the state and local governments to determine for themselves the extent to which they are willing and able to cope with environmental degradation are real and ongoing concerns under our federalist system of government. Self-determination, however, must give way where Congress confronts a problem of national concern, or, as with strip mining, where competition among the states to attract industry creates powerful economic incentives for each of the states to lower their regulatory standards below that needed to protect the public health and welfare. This latter problem is best understood by example.

Suppose that Kentucky, in its desire to increase job opportunities for its citizens, announces to the coal industry that they will no longer have to prepare complex hydrologic assessments prior to mining. Kentucky believes that such assessments are important to the protection of the state's water resources but believes that the harm caused will be outweighed by the benefits created from increased employment opportunities. West Virginia, which competes with Kentucky for coal development, decides to follow Kentucky's lead with respect to hydrologic assessments and add the further incentive that operators will no longer have to restore the approximate original contour of the land. As with Kentucky's decision to eliminate a requirement for hydrologic assessments, West Virginia prefers to have the contour of its lands restored. Nonetheless, it sacrifices this preference for what it perceives to be a higher good. Unfortunately, neither state will attain its objective if its competitor states follow suit. On the contrary, competing states are more likely to respond, as did West Virginia, with their own versions of one-upmanship. Only by accepting national standards can the states avoid this destructive game.⁷³

The last and most troublesome problem raised by Professor Stewart is also the most nebulous. Stewart compares the local impact of national environmental policies with the social impacts of third world development described by Peter Berger in his book, Pyramids of Sacrifice.⁷⁴ Berger notes that development in the third world often imposes untold sacrifices on the supposed beneficiaries of the development — the general populace. So too, national environmental policies can impose undue hardships on local communities. Is it right, Berger would ask, that the federal government should impose such strict regulatory requirements on mining operations that mines are forced to shut down and leave people without work? Should the state be permitted to sacrifice its land and water resources for what it perceives to be a greater public good? These are important philosophical and political questions. Ultimately, however, it is for the Congress to balance the competing interests and establish the minimum standards that all operators must meet for the greater, long term good of our society. Congress has done that under SMCRA. Perhaps the minimum standards are too strict or too lenient, or too inflexible to allow for adequate innovation. Perhaps the discretion granted the Office of Surface Mining to "flesh out" the statutory standards is too great. But adjustments can be made by the Congress as it gains knowledge about the impacts of the implementation of the law. Adjustments ought not be made at the state level where competition [15 ELR 10047] with other states for coal development will push the states away from environmental protection.

One might well question whether a large federal agency as would be necessary to regulate mining throughout the country can operate effectively, particularly given the politicization that has characterized OSM's brief history. This, however, is a management problem that can be addressed, in large part, by simply depoliticizing the office, and insisting on sound, professional managers with experience in mining issues. This is not a valid criticism of direct federl regulation, per se.

Direct federal regulation will not likely resolve the tension between the state and federal government, but it would at least depersonalize it by removing the federal responsibility for second-guessing state actions. Given the fundamental flaws of the cooperative federalism system, the apparent advantages of direct regulation make it at least worthy of the try.

Rational Choices For State Decision Makers

Having considered the relative merits of the two principal choices for federal regulation of strip mining, a final question haunts the program established under SMCRA. Why would a state choose to accept responsibility for the regulation of mining, with all of the limitations imposed by SMCRA, including the provision for state matching funds, when it may opt for a no-cost program administered by the federal government? The answer apparently lies in the debate over states' rights, and the sense of many state agencies that they alone understand their industry well enough to provide proper regulation.⁷⁵ No doubt the states also have a sense of responsibility for controlling environmental problems within the state borders.

Without arguing these points, it is apparent that the continuing federal presence maintained by the federal oversight responsibility can only serve to frustrate the states in accomplishing their own goals. States might thus do well to consider the advantages of accepting a federal regulatory program. The states need not leave the field entirely to OSM. They might, for example, establish their own limited oversight of the administration of the federal program. If properly conceived, such an oversight agency might perform a useful role while avoiding the massive diseconomies of the federal oversight program. Alternatively, an ad hoc group of interested persons might be established to review regularly the federal government's actions. Regular meetings might be convened with OSM officials to assure that state concerns were not ignored. Perhaps the state would not have real "control" over its program; but it does not now have "real" control under the cooperative federalism system. Moreover, the political and practical pressures that the state would be able to bring to bear against the federal government should be sufficient to hold OSM in check. Best of all for the states, when problems arise with the administration of the program, as they surely will, it is the federal government and not the states that will bear the brunt of public criticism.

Conclusion

The cooperative federalism model as operated under SMCRA promotes an inefficient and ineffective regulatory scheme that has resulted in increased tensions between the state and federal governments and less effective enforcement of the law. Nonetheless, there is room within the model for the states to participate in a federally administered program while still assuring sound regulation of environmental problems. The states would thus be relieved of the burden of regulation, but could retain, if they so desired, their own limited oversight. The states would do well to consider this option, before acquiescing in the thankless role established for them under SMCRA.

1. 42 U.S.C. § 7410, ELR STAT. 42210.

2. 33 U.S.C. §§ 1342(b), 1344(g)(5), ELR STAT. 42141, 42142.

3. 42 U.S.C. § 6926, ELR STAT. 41910.

4. 42 U.S.C. § 300g-2, ELR STAT. 41104. Cf. Toxic Substances Control Act, 15 U.S.C. § 2627, ELR STAT. 41351; Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136v, ELR STAT. 42319; Noise Control Act, 42 U.S.C. § 4903, ELR STAT. 41502.Each of these statutes establishes a federal regulatory program.

5. See 30 U.S.C. § 1253, ELR STAT. 42410. SMCRA is codified at 30 U.S.C. §§ 1201-1328, ELR STAT. 42401.

6. The evidence before the Congress showed that nearly two-thirds of the land strip mined in 1974 was not subject to any reclamation standards. H.R. REP. No. 218, 95th Cong., 1st Sess. 76 (1977).

7. Dunlap, The Legislative History of the Surface Mining Control and Reclamation Act of 1975, 21 ROCKY MTN. MIN. L. INST. 11 (1975).

8. H.R. REP. No. 218, 95th Cong., 1st Sess. 72 (1977).

9. Id. at 98-100, 102.

10. 30 U.S.C. §§ 801-960.

11. For a more comprehensive review of the legislative history of SMCRA, see Dunlap, supra note 7, at 21.

12. 30 U.S.C. §§ 1211(c)(2), 1251(b), ELR STAT. 42403, 42410.

13. See, e.g., 30 U.S.C. §§ 1267, 1271(a)(1), ELR STAT. 42419, 42421.

14. 30 U.S.C. § 1254, ELR STAT. 42411.

15. 30 U.S.C. § 1253(a), ELR STAT. 42410. Specifically, the Act requires the states to demonstrate that they have met seven conditions: (1) promulgation of a state law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of the Act; (2) promulgation of a state law which provides sanctions for violations of state laws, regulations, or conditions of permits concerning surface coal mining and reclamation operations, which meet the minimum requirements of the Act; (3) establishment of a state regulatory authority with sufficient administrative and technical personnel and sufficient funding to enable the state to regulate surface coal mining and reclamation operations in accordance with the requirements of this Act; (4) promulgation of a state law which provides for the effective implementation, maintenance, and enforcement of a permit system, meeting the requirements of the Act for the regulation of surface coal mining and reclamation operations for coal on lands within the state; (5) establishment of a process for designating lands unsuitable for surface coal mining, though the designation of federal lands unsuitable for mining is to be performed exclusively by the Secretary after consultation with the state; (6) establishment, for the purposes of avoiding duplication, of a process for coordinating the review and issuance of permits for surface coal mining and reclamation operations with any other federal or state permit process applicable to the proposed operations; and (7) promulgation of rules and regulations consistent with regulations issued by the Secretary pursuant to the Act. Pursuant to this authority the Secretary has required that state programs contain provisions that are in accordance with the technical permitting and performance standards set forth in the law, and consistent with the detailed federal rules that were promulgated to implement and flesh out these requirements. The Secretary's authority to promulgate substantive rules that flesh out the specific requirements of the law was sustained by the Court of Appeals for the District of Columbia Circuit. In re Permanent Surface Mining Regulation Litigation, 653 F.2d 514, 11 ELR 20941 (D.C. Cir. 1981).

16. 30 U.S.C. § 1235, ELR STAT. 42407.

17. 30 U.S.C. § 1232(g), ELR STAT. 42406.

18. 30 U.S.C. § 1273(c), ELR STAT. 42423.

19. In re Permanent Surface Mining Regulation Litigation II, 14 ELR 20617 (D.D.C. July 6, 1984).

20. 30 U.S.C. §§ 1267(a), 1271(a)(1), ELR STAT. 42419, 42421.

21. 30 U.S.C. § 1271(b), ELR STAT. 42422.

22. 30 U.S.C. § 1295(a), ELR STAT. 42427.

23. 30 U.S.C. § 1232(g)(2), ELR STAT. 42406.

24. Alaska, Alabama, Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia, Wyoming. See 30 C.F.R. §§ 901-50. As discussed below, see infra text accompanying notes 45-55, OSM has assumed responsibility for all or part of the Oklahoma and Tennessee programs.

25. See e.g. Massachusetts Federal Program, 30 C.F.R. pt. 921; North Carolina Federal Program, 30 C.F.R. pt. 933; Rhode Island Federal Program, 30 C.F.R. pt. 939.

26. 30 U.S.C. § 1201(g), ELR STAT. 42402. Professor Richard Stewart describes this phenomenon as the "commons" problem, analogizing to the polemic posed in Garret Hardin's classic essay The Tragedy of the Commons, 162 SCIENCE 1243 (1968). Stewart, Pyramids of Sacrifice?, Problems of Federalism in Mandatory State Implementation of National Environmental Policy, 86 YALE L.J. 1196, 1211-1216 (1977). As stated by Professor Stewart at 1215-16: "A state that encourages economic development at the expense of environmental quality may inflict economic loss (in the form of industrial migration or decreased economic growth) on other states that prefer a higher level of environmental quality."

27. Hodel v. Virginia Surface Mining and Reclamation Association, 452 U.S. 264, 283, 11 ELR 20569 (1981).

28. National League of Cities v. Usery, 426 U.S. 833 (1976). See also District of Columbia v. Train, 521 F.2d 971, 993-94, 6 ELR 20007, 20016-17 (D.C. Cir. 1975) vacated and remanded for consideration of mootness, 431 U.S. 99 (1977).

29. For example, under the Clean Air Act, states adopt "state implementation plans" to establish a plan for meeting national ambient air quality standards. The strategy chosen to meet these standards may vary widely from state to state, depending on the quality of the ambient air in the state and the number and size of the emitting sources. Thus, such a problem can be readily distinguished from the regulation of surface mining operations where the concern is not with any ambient air or water quality standards, but rather with controlling emissions from a particular site in accordance with relatively uniform standards.

30. See supra note 24.

31. 30 U.S.C. § 1253(c), ELR STAT. 42411.

32. In re Permanent Surface Mining Regulation Litigation, 13 ERC 1447 (1979).

33. The state court injunctions are referenced in the decisions approving the various programs. See, e.g., 47 Fed. Reg. 32071 (1982) (Indiana), 47 Fed. Reg. 23858 (1982) (Illinois); 46 Fed. Reg. 61088-89 (1981) (Virginia). Injunctions were also obtained in Alabama, Kentucky, Pennsylvania, Ohio and Tennessee.

34. 30 C.F.R. § 733.12(a)(1).

35. For example, the annual report for Virginia, published in September, 1984, identifies nine "significant" problems with the state's administration of its program. A number of these problems had been identified in previous reports but have yet to be corrected. Among the problems identified by OSM are: (1) a 45% rate of "inappropriate" responses to notices from OSM of probable violations at particular mine sites; (2) unlawful acceptance of coal haulroads as "public roads" such that the regulatory standards are not applied to these roads; and (3) numerous deficiencies in the permit review process. 1984 OSM ANN. REP., Virginia Permanent Program. Other problems of similar significance have been identified in every annual preport issued by OSM. As with Virginia, many problems in other states are of continuing nature, and OSM has had little success in convincing the states to alter their practices, especially when the states disagree with federal requirements.

36. In a telephone interview on December 18, 1984, Suellen T. Keiner, former Assistant Solicitor for Governmental Relations, Division of Surface Mining, Department of the Interior confirmed the observation that the states were simply not prepared, either technically or psychologically, for the radical changes brought on by the federal Act. The result, not surprisingly, was that early negotiations between the states and OSM were extremely difficult, and often unfriendly. Ms. Keiner was involved actively in the initial contacts with the states regarding their program responsibilities.

37. See 1984 OSM ANN. EVALUATION REP., Colorado Permanent Program, at 38.

38. 30 U.S.C. §§ 1268(a)(1), 1271(a)(2), (3), ELR STAT. 42420, 42422.

39. E.g., letter from James Lyon, of the Environmental Policy Institute to Lyle Reed, Acting Director, OSM (April 19, 1984).

40. Indeed, one of the most significant problems with the Kentucky program is the state's failure to approve permits for ongoing mining operations in a timely manner.

41. 30 U.S.C. § 1271(b), ELR STAT. 42422.

42. Kentucky alone employs 379 people to administer its surface mining program. This is more than one-third of OSM's total workforce of 954 people. Furthermore, the cost of administering the Kentucky program in fiscal year 1984 was well over $18 million dollars. (OSM awarded Kentucky a $9,286,238.00 grant in FY 84, which is supposed to represent 50% of the total cost of the program.) See letter from Carl C. Close, Office of Surface Mining to Mark Squillace (November 16, 1984) (hereinafter cited as Close Letter.) It seems highly unlikely that OSM could easily adjust to assuming the burdens of a major program such as that of the State of Kentucky.

43. 30 U.S.C. § 1254(e), ELR STAT. 42411.

44. The annual report prepared by OSM on the Tennessee program showed massive breakdowns in all areas of the state's responsibilities. 1983 OSM ANN. REP., Tennessee Permanent Program.

45. A Notice of Intent to Sue the Secretary of the Interior and other federal and state officials for their failure to assure proper implementation of the Tennessee program was filed by the Legal Environmental Assistance Foundation and the Sierra Club on October 24, 1983.

46. 30 U.S.C. § 1271(b), ELR STAT. 42422.

47. 49 Fed. Reg. 15496 (1984).

48. On May 16, 1984, the Tennessee Legislature repealed its strip mine law effective October 1, 1984. See 49 Fed. Reg. 15496 (1984).

49. [Current Developments] ENV'T REP. (BNA) (Aug. 24, 1984).

50. 46 Fed. Reg. 4910 (1981).

51. OSM held an informal conference with the state on October 14, 1981, more than 8 months after it became aware of the problem. Subsequently, on November 19, 1981, a public hearing was held. Oklahoma promulgated emergency rules on December 14, 1984, which were approved by OSM on April 2, 1984. For a more complete history of these proceedings, see 49 Fed. Reg. 14674 (1984).

52. A citizen complaint was filed by the Cherokee Coal Company with the Federal Office of Surface Mining against a mine operated by the Turner Brothers on December 27, 1983. Following a federal inspection of the mine, OSM notified the state that it had identified 141 violations of the Oklahoma program.

53. See 49 Fed. Reg. 14674 (1984) (codified at 30 C.F.R. pt. 936).

54. The failures of the Tennessee and Oklahoma programs have been costly in economic as well as environmental terms. Since 1978, the federal government has expended nearly 10 million dollars to assist these two states in the administration and enforcement of their programs. See Close Letter: $6,769,402.00 granted to Tennessee and $2,722,515 granted to Oklahoma between 1978 and 1984). An additional half a million dollars was expended to assist these two states in developing their programs. Id.

55. A total of $9,675,162.00 has been expended thus far to assist the states in the development of state programs. See Close Letter, supra note 42. See also 30 U.S.C. § 1295(a), ELR STAT. 42427.

56. As described at note 42 supra, Kentucky currently employs approximately 379 persons to administer its program, and has an annual budget of more than $18 million dollars. Thus, OSM would most likely have to increase its staff by nearly 40% just to assume regulatory responsibility in one state — Kentucky.

57. One can argue that the diseconomies identified are less serious than they might appear at first blush because of the potential for transfer of employees from the state to federal level, or federal to state. Unfortunately, this process appears to work in only one direction. Federal employees are paid a substantially higher wage than their state counterparts. Once they attain a federal position, the employees are likely to seek to remain in the federal system either through a transfer to another agency or to another position within OSM.

58. See, e.g., 30 C.F.R. pt. 937 (Oregon Federal Program).

59. See supra text accompanying notes 25 and 68.

60. 30 U.S.C. § 1201(g), ELR STAT. 42402.

61. 30 U.S.C. § 1252, ELR STAT. 42410.

62. During this interim period, states were expected to exercise concurrent authority as provided for under existing state laws. States could receive federal funding if they agreed to enforce the federal interim standards. 30 U.S.C. § 1252(e)(4), ELR STAT. 42410.

63. See Settlement Agreement in Council of Southern Mountains v. Andrus, No. 79-1521 (D.D.C.), cited in Donald St. Clair, 90 Interior Dec. 496, 501 (1983).

64. Though citizens had the right to file complaints and to challenge federal enforcement decisions, and in fact filed hundreds of complaints with OSM, very few citizen appeals were even filed. Regarding cases filed by industry, the vast majority of appeals (well over 80%) were ultimately decided in OSM's favor. See Volumes 86, 87, and 88, Interior Decisions (1978-1980).

65. 30 U.S.C. § 1257(b)(11), ELR STAT. 42412.

66. See, e.g., 1984 OSM ANN. EVALUATION REP., Virginia Permanent Program, at 28.

67. Proponents of state control argue that national standards frequently fail to account for the distinct differences between mining operations in various regions of the country. An oft cited example is the federal regulatory requirement for sedimentation ponds which, it is argued, may be appropriate in the steep-sloped and heavy rainfall areas of the eastern coal fields but unnecessary in the arid West. See Lyons, Federalism and Resource Development: A New Role for the States? 12 ENVTL. L. 931 (1982). Without debating the merits of this particular argument, it is sufficient to note that though many problems are regional, none are unique to any particular state. Experience gained in Kentucky is often directly transferable to problems in Virginia, West Virginia, Pennsylvania, and Tennessee. Likewise, coal mining in the prime farmland areas of Illinois, Iowa, Ohio, and Indiana exhibits common characteristics. The current regulatory system fails to allow for any efficient transfer of knowledge among states with common problems and requires each state to develop high levels of expertise on a wide range of technical issues. Neither the states nor the federal government can afford to hire sufficient experts and the end result is lower quality decisions.

To the extent that problems are regional in nature, the federal agency can and should tailor the rules to reflect that reality. Wholesale delegation of the regulatory responsibility to the state is neither a necessary nor desirable means for resolving such problems.

68. 30 U.S.C. § 1201(f), ELR STAT. 42402.

69. For example, mining operations in Western Kentucky occur on relatively flat land. Much of this land is prime agricultural land. By contrast, mining in Eastern Kentucky generally occurs on steep sloped lands with poor soils.

70. Stewart, Pyramids of Sacrifice? Problems of Federalism in Mandating State Implementation of National Environmental Policy, 86 YALE L.J. 1196, 1219-22 (1977).

71. The federal government currently expends nearly $40 million per year just to assist the states in funding their programs. ($38,139 million in FY 84). This amount represents approximately 50% of the expenditures for state program administration, the other 50% coming directly from the states. In addition, however, OSM employs nearly 1,000 persons, most of whom are engaged primarily in the review of state performance. See Close Letter, supra note 42. Much of this duplication could be eliminated through direct federal regulation.

Even assuming that diseconomies due to the scale of the larger federal regulatory program will be substantial, it is inconceivable that they would approach the cost of the duplication of effort now ongoing. Moreover, as has been described above, the duplication under the cooperative federalism scheme does not serve the goal of better regulation; on the contrary it undermines sound regulatory policy. See supra text accompanying notes 37-53.

72. See supra note 67.

73. Professor Stewart analogizes this phenomena to the "Tragedy of the Commons" as described by Garret Hardin in his classic essay of that title. 162 SCIENCE 1243 (1968).

74. Stewart, supra note 70, at 1221-22.

75. No doubt there is considerable pressure on the state from local industry as well, which has come to expect more lax enforcement from the states than it is likely to receive from the federal government. Moreover, the states are likely concerned that they will lose their 50% share of the Abandoned Mined Land Fund money to which they are entitled only if they have an approved regulatory program. The state may, however, obtain money directly from the Secretary to address abandoned mined lands problems, and one suspects that with the proper amount of political pressure sufficient funding for all necessary abandoned lands proejects would be forthcoming. See 30 U.S.C. § 1232(g)(3), ELR STAT. 42406. Moreover, the Act sets forth priorities for use of the fund money, and if the Secretary refuses to allocate funds to states that have problems of a higher priority than other states in which funds are being expended, the Secretary's refusal might be subject to a legal challenge. See 30 U.S.C. § 1233, ELR STAT. 42406.