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.

Coal

Clean Water Act: The EPA has invented a “pollutant”— salinity—in order to stop surface coal mining in Appalachia.  It claims that this “pollutant” harms an order of short-lived insect, the Mayfly, which has not been proposed for listing as an endangered species.  The EPA has set a numeric water quality standard for salinity which effectively bars new surface coal mining permits.

Surface Mining Control and Reclamation Act: Despite the fact that the 1977 SMCRA explicitly authorizes “valley fills” (a necessary byproduct of surface coal mining in the steep terrain of Appalachia), the Department of the Interior is working on a re-interpretation of the so-called “100 feet buffer rule,” a regulation derivative of SMCRA, which would effectively outlaw valley fills, and, as a result, Appalachian surface coal mining.

Oil and gas

Red Tape: The de jure moratorium on deepwater drilling permits in the Western Gulf ended on 22 October 2011, but the de facto moratorium remains.  Two weeks ago, a federal judge in eastern Louisiana (the same one who overturned the first moratorium, and who then found the Department of the Interior in contempt for issuing an identical, second moratorium), ordered the Interior Department to act on 5 pending permits within 30 days.  Interior is also slow-walking shallow water permits.

Breaking the 2008 deal: President Obama has reneged on the deal made with the American people in 2008 when gas prices reached $4 a gallon.  He has re-instituted the moratorium on offshore oil and gas exploration in the eastern Gulf, the Atlantic, the Pacific, and most of the Alaska coast.  The Department of the Interior has cancelled or delayed exploration leases on federal land in the West.   And he is adamantly opposed to opening ANWR.

Wild Lands policy: It is as yet unclear what will be the effect of Interior Secretary Ken Salazar’s recent directive to take an inventory of BLM lands to discern which ones are “wild lands” unsuitable for oil and gas development.

Natural Gas

Safe Drinking Water Act: The 2005 Energy Policy Act exempted hydraulic fracturing (the drilling technological revolution that has vastly expanded North American recoverable gas reserves in the last decade), but environmentalists allege, without any evidence, that the practice harms water aquifers.  The EPA is conducting an investigation into the impact of “fracking” on drinking water.  It is due to be published sometime in 2012.

Clean Water Act: Although the EPA is trying to limit the application of its pending numeric water quality standard for salinity to the Appalachian coal industry, there is no legal basis for such a limitation, and environmentalists already are trying to expand the scope of the new standard to natural gas operations in the Marcellus Shale formations in the Northeast.

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).

Dan Berman reported in Politico on Wednesday that: “The White House rewrote crucial sections of an Interior Department report to suggest an independent group of scientists and engineers supported a six-month ban on offshore oil drilling, the Interior inspector general says in a new report.  In the wee hours of the morning of May 27, a staff member to White House energy adviser Carol Browner sent two edited versions of the department report’s executive summary back to Interior. The language had been changed to insinuate the seven-member panel of outside experts – who reviewed a draft of various safety recommendations – endorsed the moratorium, according to the IG report.”  This is the most outrageous example yet of the Obama Administration’s improper manipulation of science to support its agenda.  I responded in a CEI press release by calling for the firing of President Obama’s Climate Czar, Carol Browner. Senator James M. Inhofe (R-Okla.), ranking Republican on the Environment and Public Works Committee, and two of his colleagues on the committee, John Barrasso (R-Wyo.) and David Vitter (R-La.), have requested that the committee hold a hearing on the Inspector General’s report.