should be reevaluated in terms of whether it is a deterrent. The compact believe that permit blocking is a more effective tool to insure and to gain compliance than civil penalties. (d) OSMRE needs flexibility within the framework of SMCRA to allow states to regulate certain activities under other environmental programs already in affect within that State. This would allow the problems to be addressed in an environmentally sound matter without a major upheaval of the state program. (e) Congress needs to address the bonding problem. One area that is needed is for Congress to authorize incremental bonding. Incremental bonding can prove beneficial to the States in implementing the program and can provide industry relief in today's tight bond markets. The incremental bonding can be designed to ensure adequate bond coverage. An incremental bonding program can be developed to address the concerns of the environmental community be establishing a permit blocking mechanism which would require the permittee to be in compliance before the next incremental bond is approved. When viewed in this manner, incremental bonding can become a major tool to insure compliance with the implementation of SMCRA. (f) The AML program needs to be continued beyond 1992 at least until the AML moneys are expended. (g) OSMRE effort to address the reclamation of the orphan AML sites that resulted after August 3, 1977, and were not subject to permanent program bonding requirements through the use of Federal civil penalties is laudable. OSMRE needs to further study and address this issue. (h) A comprehensive review of the remining program is needed. Legislative initiative to require support from Federal Energy Regulatory Commission, Department of Energy, U.S. Environmental Protection Agency and other agencies to encourage remining. For example, if FERC were to classify all coal wastes as a waste fuel, then bitiuminous coal waste to energy plants may prove cost effective and result in reclamation of coal waste disposal areas.

We believe that the changes described above would not provide instability but would result in a more stable program leading to a more effective program.

To state SMCRA has failed, OSMRE has failed, and the States have failed implies that we all have failed including Congress. The compact believes that SMCRA has been successful and there are successes. Yes, there are some problems, but they are being addressed. Given the opportunity for stability without another major overall of the regulations, organization of OSMRE, and redirection of policy and guidance, and by encouraging and applauding the states rather than chastising them will provide a more stable climate resulting in the goals of SMCRA being achieved.

The compact and its member States are willing to work with OSMRE and Congress to bring about appropriate changes.

If the committee has any questions, I am willing to answer.
Thank you.

Mr. RAHALL. Thank you very much for your testimony. It has been quite thorough and your recommendations have been noted. I would ask a question that I also addressed to the previous panel concerning the area of remining. Have you had any experience under the recently passed amendments on remining yet or are regulations still being put in place?

Mr. MERRITT. Let me go to Pennsylvania, first. Pennsylvania initiated a remining program relative to the water quality program similar to what was appropriated and ultimately signed into law recently in the Clean Water Act. We have been working with EPA to help us put our program on line. In fact, we even contracted with EPA to help us. They have been using some data we have plus we have been collecting data from other states to see how to address the implementation of that legislation. We have been working with other states to provide them good information and a lot of comments and concerns.

Mr. RAHALL. So the legislation has not been physically implemented on the ground, has it?

Mr. MERRITT. That piece of the act has not been implemented on the ground, but we have issued permits to sites in Pennsylvania with the criteria set forth in the act. We have done the analysis, looked at abatement plans, and believe there will be improvement based on analysis. We have done statistical analysis to define the baseline and issued permits. The sites we have issued so far at this point appear to be very successful. We hope to be able to present that sometime in the end of September or early October on the success of the concept.

Mr. RAHALL. Good. We would like to remain in consultation with you and hope you will remain in contact with us on that subject. Mr. MERRITT. Thank you.

Mr. RAHALL. Our next panel is composed of The National Coal Association and The American Mining Congress. The panel is composed of Ben E. Lusk representing the Drummond Company. I understand Mr. Lusk and Mr. Jim Compton from West Virginia were the only two coal representatives in the Rose Garden when this was signed 10 years ago. Others on the panel are John C. Grisham, president, Buckeye Industrial Mining Company. David G. Todd, vice president, government and regulatory affairs, Ashland Coal, Inc., August Keller, director of government and public affairs, North American Coal Co., representing the National Coal Association and American Mining Congress.

Gentlemen, while you get set up the subcommittee will recess for 5 minutes.

AFTER RECESS

Mr. RAHALL. If the panel will take their seats, we are ready to

resume.

The panel may proceed. Welcome gentlemen. Mr. Lusk. [Prepared statements of Ben E. Lusk, John C. Grisham, David G. Todd, and August Keller may be found in the appendix.]

PANEL CONSISTING OF BEN E. LUSK, WASHINGTON REPRESENTATIVE, DRUMMOND CO.; JOHN C. GRISHAM, PRESIDENT, BUCKEYE INDUSTRIAL MINING CO.; DAVID G. TODD, VICE PRESIDENT, GOVERNMENT AND REGULATORY AFFAIRS, ASHLAND COAL, INC.; AND AUGUST KELLER, DIRECTOR OF GOVERNMENT AND PUBLIC AFFAIRS, NORTH AMERICAN COAL CO., REPRESENTING THE NATIONAL COAL ASSOCIATION AND AMERICAN MINING CONGRESS

Mr. LUSK. Good afternoon, Mr. Chairman. My name is Ben Lusk. I am here to represent the Drummond Coal Company of Alabama and the American Mining Congress.

It is difficult to believe that over 10 years have passed since you and I stood in the Rose Garden and watched Jimmy Carter sign the Surface Mining Control and Reclamation Act of 1977. The President's action that day ended over 7 years of debate and controversy and resulted in one of the most comprehensive and technically complex statues ever written by Congress. And while few of us who were involved in that struggle were totally satisfied with the final bill, I think we all believed that we had reached enough of a common ground to attain our main objective, which was the continuation of responsible surface coal mining and effective reclamation of mined land.

But with all that said, it is equally difficult to believe that after all these years the program is as controversial today as it was in 1977. And the thing that is most disturbing to me, Mr. Chairman, as I expect it is to you, is that there are people trying to convince the Congress and the American people that the program is a failure. I submit, Mr. Chairman, that nothing is further from the truth.

Certainly, there are problems with the statute, the regulatory program and its implementation. We could hardly have expected this complicated program to come off without problems. But I suggest that the problem areas that have attracted so much attention in the press are red herrings. I contend these problems are nothing more than isolated deficiencies, rather than major program failures. And I think it's critically important that we keep this in mind when evaluating the effectiveness of the law.

There are problems in the area of Federal oversight as it relates to State primacy. Continuing disputes between State and Federal agencies have created a duel regulatory scheme that puts producers in the middle of bureaucratic squabbles. These disputes result in debilitating uncertainty for producers and higher cost for consumers. If these Government agency conflicts aren't resolved, State primacy will never succeed.

We have now learned that wildcat and illegal mining operations are a greater problem than envisioned 10 years ago. These companies represent a small minority of the overall coal production, but their actions have seriously impacted the credibility of the agencies involved, the coal industry and the statute itself. There is no support for wildcat operators in the ranks of legitimate coal producers. We have offered, as recently as 2 weeks ago before your committee, Mr. Chairman, a solution which involves a multiagency effort to combat this emerging problem. We urge aggressive action to

pursue and prosecute illegal operators and push them out of busi

ness.

In addition, 10 years of experience has now proven that there are many other requirements that are either ineffective or unnecessarily costly. It is time that they be reviewed and revised in order to effect a more workable program. But again, Mr. Chairman, none of these problems could be construed as being fatal to the overall success of the program.

If the program has failed anywhere it is in the area of political and public perception. We have failed to effectively communicate the substantial success of the program. It is a failure for which we have paid a high price, because the critics of the program have succeeded in painting a very different picture. Opponents of coal mining would have you believe that OSM has conspired to totally avoid implementing the law; that state regulators are incompetent or corrupt; and that most coal producers are either 2-acre abusers or wildcat miners. In short, they would have you believe that little or no reclamation is being done and that the program is an utter failure.

Part of the problem is that rhetoric, statistics, reports and headlines have become the measure of success or failure of SMCRA, rather than a reasoned technical evaluation of results on the ground. The result, as I stated before, is that isolated program deficiencies, such as 2-acre abuse or fee collections are blown totally out of proportion and they become the focus of the debate. It is these isolated problems that have overshadowed the many major successes attained in the program as a whole.

Does Public Law 95-87 work? If you are a legitimate coal operator doing your utmost to comply with the myriad of State and Federal requirements, the answer is a clear and resounding yes. The standards are demanding, inflexible, often counterproductive and always costly. But fundamentally SMCRA is sound. The performance standards are attainable and the vast majority of operators, both large and small, are achieving compliance. Anyone visiting a modern surface mine today will see the substantial investment, the technology utilized and the success being achieved. It is hard not to be impressed.

We at Drummond Coal are very proud to have received an award for reclamation last year, and quite frankly, the competition is tough.

As I said before, this does not mean the law is perfect or that changes should not be made. Industry has quite a few productive changes that we believe would further strengthen the program. But the point is, that in spite of the allegations made by our critics, SMCRA is working in terms of reclamation success and environmental protection. The proof is in the pudding. On the ground. where it counts, the act is achieving its goals.

Mr. Chairman, when you consider the long and difficult history, the complex nature of the issue and the polarization that existed 10 years ago and then to see how far we've come, I believe the program is a story of success. And anyone who is not willing to recognize that success is doing a disservice not only to the statute, but to all of us who have worked so hard to try to make the program work.

With that Mr. Chairman, I am accompanied today by several individuals who will discuss some specific areas of concern regarding the program and then we will be happy to entertain any questions. Thank you.

Mr. GRISHAM. Mr. Chairman, my name is John Grisham, I am the president of Buckeye Industrial Mining Company and its affiliates located in Lisbon, Ohio. I am appearing today on behalf of the National Coal Association and the American Mining Congress. We appreciate the opportunity to present our observations and experience under the Surface Mining Act over the last 10 years.

It is particularly appropriate to take a look at where we stand today in view of the purposes of Public Law 95-87. There has been significant progress toward meeting the act's goals, and substantial accomplishments by the coal industry. It is our message today, that the act is both working and not working.

The coal industry has responded admirably to America's need for a stable and economical energy supply and its concern for the quality of the environment. My company invests 23 percent of the cost of coal in reclamation activities.

However, our investment in reclamation does not arise solely because of the surface mining law. Like most coal companies, my company's dedication to good reclamation comes from our commitment to our community, neighbors and property owners. Without a good reputation and working relationship with our community, we could not continue in business since no one would lease their land to us. In that regard, I would like to present for the record this latest publication of the State of Ohio's Mining and Reclamation Association.

The dynamics of sound reclamation neither start nor end with the law. In fact, a number of the law's requirements, at least as applied presently, impede our primary objective to return the land to a more useful state in accord with the prerogatives of the land

owner.

For example, we recently mined a parcel, which had been part of a large apple orchard, for a commercial apple producer. It is the desire of the landowner that the land be restored to an orchard immediately after resoiling. We are encountering extreme resistance to this because, for this area, the law specifically states that prime farm land must spend at least 5 years being test cropped with corn. This delays, by the same period, commencement of restoration of the orchard and the income from established trees to which the owner is entitled.

Implementation of the law on the ground, at times, defies common sense. Some of the past problems such a civil penalty collections and the 2-acre exemption, while isolated, have distracted the agency from the issues which concern most of the industry. Over the past several years, we have seen the dialogue among the regulated community, states and OSM transform into a monologue from a Federal bureaucracy increasingly unreceptive to common sense approaches. This rigidity most often manifests itself in the constant disputes between OSM and the States over acceptable mining and reclamation practices, usually with the operator caught in the middle. It also appears in the unfocused attempts to fashion broad based policies to remedy isolated problems. The victim be