Quebec, long an economic basket case kept afloat by Canada’s federal government, has decided to open up its northern interior to resource development.  Quebec Premier Jean Charest announced on Monday an ambitious 25-year “Plan Nord” to build highways, airports, and other infrastructure so that the area can be developed.

According to Montreal’s Gazette, “Investments in energy development, mining, forestry, transportation, and tourism in the 1.2-million-square-kilometre region – twice the size of France – will create 20,000 jobs a year, generating $162 billion in growth and tax revenues of $14 billion.”   Large parts of northern Quebec are heavily forested, and there are major deposits of iron, nickel, gold, platinum, cobalt, zinc, vanadium, and rare earths.

The Obama Administration should follow Quebec’s good example.  The Department of the Interior and the U. S. Forest Service (an agency of the U. S. Department of Agriculture) control nearly 30% of the land in the United States, most of it in the West and Alaska, plus the Outer Continental Shelf.  Federal lands and offshore areas contain colossal reserves of energy and minerals plus the most productive forests in the world.  But the Obama Administration is locking up more and more federal lands and offshore areas in order to prevent oil and gas production, hardrock mining, and timber production.  And they’re trying to block coal mining in Appalachia by inventing new pollutants to be regulated.

Given the federal government’s looming insolvency, only environmental pressure groups could think that this resources lockup is good public policy.  At least the  House of Representatives, led by Rep. Doc Hastings (R-Wash.), Chairman of the Natural Resources Committee, is trying to force the Obama Administration to increase oil and natural gas production in federal offshore areas.  Last week, the House passed the first of three offshore bills and is going to vote on the other two this week.

H. R. 1229, 1230, and 1231, if enacted, would increase U. S. oil production by several million barrels a day and thereby reduce our trade deficit by hundreds of billions of dollars and create hundreds of thousands of high-paying jobs.  Moreover, unlike the clean energy economy and green jobs that President Obama keeps promoting, increasing oil production in the Outer Continental Shelf does not require taxpayer-funded subsidies.  Instead, oil companies pay billions of dollars at competitive auctions for the right to drill in federal waters and then pay royalties on every barrel of oil produced.

The semi-socialist government of Quebec gets it; the House of Representatives gets it; but unfortunately President Obama and his administration do not get it.  They insist on living in a fantasy land where federal spending rather than natural resource production creates economic activity.

On Thursday, the Water Resources and Environment Subcommittee of the House Transportation Committee held a hearing on “Environmental Protection Agency Mining Policies: Assault on Appalachia.” Video and written testimony are available here. For detailed descriptions of the EPA’s outrageous war on Appalachian coal production, click here, here, or here. Suffice it to say, EPA has subverted the Administrative Procedures Act to enact a de facto moratorium on mining. It engineered a new Clean Water Act “pollutant,” saline effluent, which the EPA claims degrades water quality downstream from mines by harming a short lived insect that isn’t an endangered species. The hearing yesterday was part 1; next Wednesday, the subcommittee is scheduled to hear from EPA administrator Lisa Jackson.

It was a bipartisan bashing. The only Democrat to show up was Ranking Member Rep. Nick Rahall (WV), whose opposition to the EPA exceeds that of Republicans, due to the fact that his State is the largest coal producer in Appalachia, and is, therefore, harmed most.

For the “Part 1″ hearing on Thursday, the primary topic was the EPA’s procedural shenanigans. For part two next week, with Administrator Lisa Jackson, I very much hope they address the EPA’s shoddy science on the ecological impact of mountaintop mining.

The star of the show was Rep. John J. Duncan (R-TN). Either he is an incredible speaker, or he has a great stump speech about “environmental extremism.” He said that his district used to produce 12 million tons of coal every year. Now, he said it produces 2 million tons annually. He noted how environmentalists tend to be the upper middle class, while environmentalist policies hurt the poorest the most. It was a great speech.

Kentucky Energy and Environment Secretary Dr. Leonard K. Peters said something very interesting during the hearing. He claimed that EPA Region 4, which serves Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee, was amenable to Kentucky’s concerns about the unreasonableness of the EPA’s Appalachian coal crackdown, but that the federal office would not budge. If true, this is a damning indicator of how the Obama administration is willing to harm Appalachia economically in order to sate its coastal environmentalist base.

I’ve been an outspoken opponent of the EPA’s war on Appalachian coal production. See here, here, here, and here.

In particular, I’ve sought to shine a spotlight on the EPA’s outrageous crackdown on saline effluent from surface coal mines. The EPA argues that this salty discharge is an illegal violation of the Clean Water Act, because it harms an order of short-lived insects known as the mayfly. The science suggests that the total number of insect species doesn’t decrease downstream of surface mines, as hardier insects readily assume the niche vacated by the mayfly. Nonetheless, the EPA alleges that the loss of the mayfly alone is sufficient to violate the Clean Water Act’s narrative (qualitative) water quality standards. The mayfly is not an endangered species.

A year ago, the EPA issued guidance for quantitative salinity water quality standards, effective immediately. According to one mining engineer, they set the bar so low that you couldn’t wash a parking lot without violating the Clean Water Act. Remember, the President had campaigned on a promise to “bankrupt” coal; this was the fruition of that promise. Even EPA Administrator Lisa Jackson conceded that new surface coal mine permits in Appalachia were unlikely under the terms of the April guidance.

Last Friday, the EPA was scheduled to issue final guidance documents for quantitative salinity water quality standards. However, Friday came and went, and nothing happened. On Saturday, EPA sent out notice that it will need more time to finalize the guidance documents. It also said that, “The Office of Management and Budget will conduct an interagency review process before final guidance is issued later this Spring.”

The OMB’s participation is interesting. It could be routine; OMB, and, by extension, the White House, has the final say on regulations. Yet, if it were routine, I don’t know why EPA would mention it.

To be sure, I don’t think that OMB’s involvement was precipitated by Obama’s concerns of overreach against coal. Rather, I guess that OMB’s conspicuous participation is meant to guard against allegations of procedural overreach. This Administration has been catching a lot of flak for using guidance docs in lieu of formal rule makings (from an administrative standpoint, the former is less cumbersome than the latter). Maybe the OMB involvement is meant to bolster the record, and thereby fend off allegations of Administrative Procedure Act violations.

Minnesota

In 2007, then-Minnesota Governor Tim Pawlenty (R) championed and ultimately signed the Next Generation Act, which effectively imposed a moratorium on coal-fired power plants in the State. Evidently, the legislature is having second thoughts about a future without coal, because last week both the House and the Senate moved legislation that would overturn the coal ban. By a 15 to 6 vote, the House Environment, Energy and Natural Resources Policy and Finance committee passed H.F. 72, “A bill for an act relating to energy; removing ban on increased carbon dioxide emissions by utilities.” The Senate Committee on Energy, Utilities, and Telecommunications passed a companion bill, by a 9 to 3 vote.

West Virginia

Last Tuesday, the U.S. Army Corps of Engineers issued a section 404 Clean Water Act permit to a Massey Coal subsidiary for the Reylas Surface Mine in Logan County, West Virginia. The permit was originally issued in 2007, but it became ensnared in the Obama Administration’s war on Appalachian coal (click here or here for more information on that subject). In 2009, the Environmental Protection Agency recommended against granting the permit, so there is a good chance that the EPA will veto this permit. In January, the EPA exercised this authority for the first time in the history of the Clean Water Act in order to veto the Spruce No. 1 mine, which is also in Logan County. Notably, the EPA objects to these mines because they allegedly harm an insect that isn’t an endangered species. But before the EPA could act, environmentalist lawyers won an injunction in a West Virginia federal court.

Last week Tim Huber of the Associated Press broke news on yet another front being opened in Obama’s war on Appalachian surface coal mining (I blogged about the other front yesterday).

The AP story pertained to a controversial rule derivative of the 1977 Surface Mining Control and Reclamation Act (SMCRA), known as the “100 feet buffer rule. As its name would suggest, it basically prohibits mining waste from being deposited within 100 feet of intermittent or perennial streams. According to the AP article, the Obama Administration’s preferred interpretation of this rule would cost 7,000 mining jobs, almost exclusively in Appalachia. And that’s the Department of the Interior’s own estimate, which is likely a lowball.

Background: The 100 feet buffer rule was largely ignored until the 1990s, when environmentalists initiated lawsuits alleging that valley fills constitute mine waste, and are therefore in violation of the buffer rule.

[Valley fills are a necessary byproduct of surface mining in the steep terrain of Appalachia. When you dig up coal, the loosened dirt and rock, known as overburden, have more volume than when they were compacted. Much of this overburden is used to reconstruct the approximate original contour of the mined terrain. However, there is almost always "extra" overburden, and this excess dirt and rock is placed in the valley at the base of the mine. This is known as a valley fill]

The problem with the environmentalists’ reasoning is that SMCRA clearly “contemplates that valley fills will be used in the disposal process,” to quote the Fourth Circuit Court of Appeals. So it doesn’t make sense that the law would both authorize and prohibit the same practice. President George W. Bush put the issue to rest in his second term. His Department of the Interior undertook a formal rule-making to exclude valley fills from the 100 feet buffer rule.

President Barack Obama, however, had campaigned on a promise to “bankrupt” the coal industry, and shortly after assuming office, he had the Department of the Interior try to reverse the Bush rule change, and thereby subject the Appalachian coal industry to an army of environmental lawyers. But a federal court slapped down this effort, because the Interior Department had tried to impose the rule change without a formal rulemaking. Thus rebuffed, the administration promised to revisit the issue within two years, and instead used a different tack to inhibit Appalachian coal production.

Which brings us to the AP story. Evidently, the Obama administration has been working on a new version of the 100 feet buffer rule, and their preferred choice is a doozy. According to the AP,

The office, a branch of the Interior Department, estimated that the protections would trim coal production to the point that an estimated 7,000 of the nation’s 80,600 coal mining jobs would be lost. Production would decrease or stay flat in 22 states, but climb 15 percent in North Dakota, Wyoming and Montana.

As Appalachia is the only region where valley fills are used frequently in coal mining, it stands to lose the most. Then again, that’s the point. This would be the second major business-crushing regulation tailor made for Appalachian coal country (to learn more about the first, click here and here).