On Oct. 26, Interior Secretary Ken Salazar issued an order to shift operations from the independent, regulatory OSM to a new office in the larger and more administratively oriented BLM. The process leading to consolidation, to take effect on Dec. 1, "will be undertaken with the coordination and input of employees, members of Congress, and interested parties," an Interior statement said.
The Office of Surface Mining has 525 employees, and BLM has 10,000.
At a Nov. 17 hearing of the Senate Energy and Natural Resources Committee, the reaction among lawmakers and industry witnesses was almost uniformly negative. "This appears to go beyond streamlining," said Chairman Jeff Bingaman, D-N.M., He cited concerns from affected Native American tribes about a lack of consultation and reminded Interior officials of some history.
The 1977 Surface Mining Act "explicitly establishes an Office of Surface Mining Reclamation and Enforcement within the department," Bingaman said. The act "prohibits the transfer of coal development functions to OSM. Given this provision, I find it difficult to believe that Congress intended OSM to be an office within the BLM. Indeed, the provision that prohibits the commingling of coal development and OSM's functions argues against this result."
Sen. Lisa Murkowski, R-Alaska, said, "from the outside, it looks like the merger decision was made before much thought was given to whether those agencies could be merged, whether they should be merged and how such a merger would be accomplished."
She also said the proposed combining of leasing and regulatory agencies "appears to contradict the administration's rationale for splitting up the former Minerals Management Service," where apparent conflicts of interests between safety inspection functions and leasing were thought to have contributed to the 2010 oil spill in the Gulf of Mexico.
The secretary's order cites as its authority a 1950 reorganization plan .
"The consolidation proposed under the secretarial order is intended to build on the strengths and expertise of both bureaus, to capture the benefit of synergies from integrating BLM and OSM reclamation efforts, to strengthen OSM's oversight of surface coal mining and reclamation operations, to ensure efficiencies in revenue collection and enforcement responsibilities, and provide strong and independent safety and environmental oversight of these activities," said Deputy Interior Secretary David Hayes.
Hayes said the department expected the move to strengthen OSM by aligning programs and eliminating duplication.
"The enforcement and regulatory functions of the OSM would remain separate from BLM's leasing activities," he added. "The focus of the consolidation is on those OSM and BLM functions that are complementary, including environmental restoration activities and administrative support functions."
But witnesses from state mining and land reclamation consortia complained of being blindsided by the order. Bradley C. "Butch" Lambert, deputy director of the Virginia Department of Mines, Minerals and Energy who represents 24 states in the Interstate Mining Compact Commission, told the hearing that "states have enjoyed and benefited from a fairly good working relationship with OSM regional and field offices and we are hopeful this can be maintained.
"In some respects, it has taken the better part of 30 years to achieve the working relationship we currently have," he said. "BLM is not likely to possess this level of experience or expertise."
DarAnne Dunning, speaking for seven states in the Western Organization of Resource Councils, testified that "OSM is fundamentally a regulatory agency, while BLM's role in part is to manage federal coal reserves, which includes leasing activities that bring revenue to the federal government.
"Both are necessary functions," she said, "but separating them into two distinct agencies is important for avoiding conflicts of interest, such as those that have arisen in leasing high-risk offshore oil reserves. We need to ensure that OSM's regulatory functions, which include ensuring realistic mining and reclamation plans that do not compromise the welfare of citizens or the protection of the environment, are not compromised by similar conflicts of interest."
Katie Sweeney, general counsel of the National Mining Association, said her industry was "surprised and shocked" at the suddenness of the order and the lack of dollar estimates for savings. Noting current high unemployment, she also expressed concern about job losses due to bureaucratic delays.
"Merging OSM and BLM has the potential to create uncertainty and even further delays in mine permitting as staff become accustomed to their new roles and responsibilities," she said. "When multiple agencies are involved, the permitting process, far from being more streamlined, more often than not leads to greater delays."
Sen. Joe Manchin, D-W.Va., asked Hayes to take the order back to Salazar for possible cancellation.