NMA Documents Administration’s Failure to Curb Regulatory Abuse

Washington, D.C. – Despite the many executive orders and directives requiring federal agencies to curb their voracious appetite for regulations that are redundant, inefficient or outdated, a lack of incentives to repeal them has predictably resulted in costly inaction. That is the conclusion of the National Mining Association’s (NMA) review of regulations imposed on mining and other businesses by the Obama administration since 2009.

“While businesses must continue to abide by such regulations or face the risk of incurring government sanctions, there is no reciprocity with federal agencies that are free to either ignore or adhere superficially to these executive orders,” said NMA President and CEO Hal Quinn.

“Frankly, the executive orders on improving the regulatory process embody sound principles for balanced regulatory policy producing better outcomes. Unfortunately, they are not binding on the agencies,” Quinn said. He recommended “codifying these principles or best practices into law to bring much needed accountability into our nation’s vast regulatory system.”

In a presentation today to the Congressional Task Force on Regulatory Reform, Quinn examined a half-dozen regulations that are a small but potent portion of rules whose total burden on the economy exceeded $2 trillion, or 12 percent of GDP, in 2012. Each rule cited by Quinn meets one or more of the criteria for repeal or reform identified in executive orders.

A prime example of a massive regulation whose costs greatly exceed any benefits is the Environmental Protection Agency’s (EPA) Utility MATS rule. The 2011 rule “is a poster child for unbalanced regulations that dismiss the real costs and inflate the benefits,” said Quinn. Even by EPA’s own calculation, Quinn noted the rule saddles consumers with annual costs of almost $10 billion yet brings them at most only $4-$6 million in highly questionable benefits.

When indifference to regulatory costs combines with pre-determined outcomes, the harmful impacts can be truly devastating. In the case of MATS, Quinn noted that EPA estimated the rule would force into retirement only 4,400 megawatts of power generation when the actual loss, acknowledged by the Energy Information Administration, was as much as 60,000 megawatts of generating capacity. Almost 41,000 coal mine jobs alone have been lost in the past five years, thanks in part to rules like this, said Quinn.

For duplicative and conflicting regulations, Quinn cited proposed financial responsibility requirements for metals and minerals mining and the inefficient permit approval process that hamstrings production. EPA is proposing additional surety requirements even though these already exist and additional requirements are left to agency discretion, not mandated, under the Superfund Law. Permitting delays on mineral mines can take up to a decade, placing the U.S. near the bottom of the world’s mining regions in this category and significantly hindering our industry’s ability to compete against them.

If the White House is genuinely interested in avoiding costly rules that lack any purpose, Quinn invited its attention to the Stream Protection Rule. The Department of the Interior prefers to create rather than reduce uncertainty by proposing a massive rule without either legal basis or environmental purpose, as confirmed by its own documentation of environmental performance at coal mines. An analysis of the rule nevertheless shows it jeopardizes between 55,000 and 79,000 jobs throughout the United States.

“Obviously if well done, regulations can protect the public, the environment and the marketplace,” said Quinn. “But if done poorly, as has been too often the case here, they must be avoided or repealed before adding more harm to the economy and to American workers.”