May 11, 1977 Hearing
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Legislative History May 11, 1977 Hearing |
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1 WEDNESDAY, MAY 11, 1977
1 U.S. SENATE, SUBCOMMITTEE ON PUBLIC LANDS AND RESOURCES, OF THE
COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, D.C.
1 The subcommittee met, pursuant to motice, at 8:30 a.m., in room 3110,
Dirksen Office Building, Hon. Lee Metcalf presiding.
1 Present: Senators Metcalf and Hatch.
1 Also present: Norm Williams, professional staff member.
OPENING STATEMENT OF HON. LEE METCALF, A U.S. SENATOR FROM THE STATE OF
MONTANA
1 Senator METCALF. The subcommittee will be in order.
1 During the course of the reorganization of Congress and the
reorganization of the committees, new Members were assigned by lot and one of
the Members assigned to this committee was the Senator from Utah, Senator Hatch.
Senator Hatch was here during the consideration of the report from ICF on strip
mining activity and energy and economic impacts of it. During the course of our
early consideration of strip mining legislation he questioned some of the
conclusions and the way the report was handled.
1 He wrote a letter to me as chairman of the subcommittee and I responded
by getting some further answers from Mr. Stauffer who is chairman of the board
of directors of ICF, Inc.
1 However, Senator Hatch felt that he would like to interrogate the
authors of the report. So the purpose of this meeting this morning is to let
the authors of the report respond to Senator Hatch's inquiries.
1 I am delighted to have the Senator from Utah back here. When the
committee assignments were finally made, he was not on this committee; but we
will always consider him as an alumnus of this organization. We are glad to
have you here this morning Senator and we are glad to have you, Mr. Stauffer as
a witness.
1 So I am going to turn the meeting over to you, Senator Hatch.
STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE OF UTAH
1 Senator HATCH. Thank you, Senator. I appreciate the courtesy
extended to me by Senator Metcalf who is always very gracious and I think that
he is a very, very fine man.
2 During the early weeks of this 95th Congress, I, as a freshman senator,
as Senator Metcalf indicated, had the occasion to be temporarily assigned to the
Interior Committee. As an interim member of that committee I was afforded the
opportunity to be present at some of the hearings on the strip mining
legislation then under consideration.
2 During those hearings, Secretary of the Interior Andrus and Federal
Energy Administrator O'Leary relied upon a report prepared by ICF, Inc., to
support statements they were making which were favorable to the legislation.
Close scrutiny of the report relied upon by Secretary Andrus and Administrator
O'Leary raised some critical issues as to the accuracy of certain parts of the
report.
2 The document referred to by Andrus and O'Leary was entitled "Draft Final
Report" on the Energy and Economic Impacts of the Surface Mining Control and
Reclamation Act, and was dated February 1, 1977.
2 That report contained figures and information which were substantially
different from the "Draft Final Report" dated January 24, 1977, identical title
and just a week earlier. The apparent discrepancies were not resolved at that
time and the distinguished senior senator from Montana, Senator Metcalf,
indicated that a hearing would be held to get to the bottom of the
inconsistencies in the reports, including the propriety of such changes in
materials presented to the Senate, without full explanation of the tentativeness
of the report.
2 The memorandum prepared by ICF for EPA and CEQ, the contracting
governmental agencies, was sent to both Senator Metcalf and me with a cover
letter attempting to justify the changes made as being based upon the normal
review and interchange involved with any report.
2 Unfortunately, the legislation has been reported out of the committee
without further attempt to resolve the issue of whether or not these documents
were doctored and the official report of the committee upon which our colleagues
must rely is clearly incomplete.
2 I am especially concerned that the changes made in the two reports may
have motivation that is not impartial with respect to certain special interest
groups favoring stronger than necessary strip mining controls.
2 While I appreciate the efforts of Senator Metcalf to pursue this matter
now, it seems a little like closing the barn door after the horses have
high-tailed out. I only hope that we can develop some information this morning
which will bring us closer to the real truth of the ICF reports.
2 And I would like to say this: That Senator Metcalf, in my opinion, has
been an advocate for this bill and I have deep respect for this bill.
Therefore, I have to have deep respect for his advocacy, but I am concerned
about this report and there would appear to be major discrepancies therein and I
am concerned that too often the Federal Government - we have situations arise
where we only get one particular side or one point of view. That may or may not
be the case here and I appreciate you, Mr. Stauffer, taking time to come in and
to testify today.
3 I also requested that others come in, but let's see if your testimony
will resolve the difficulty; if it doesn't, then I will have to request that we
hold hearings to have others come in as well. And, hopefully, this will be
enlightening to all of us and we will resolve any difficulties that presently
exist.
3 I wonder if we could swear Mr. Stauffer in, Mr. Chairman.
3 wonder if we could swear Mr. Stauffer in, Mr. Chairman.
3 Senator METCALF. Sure. Is Mr. Klein going to testify, too? Do you want
them both sworn?
3 Mr. STAUFFER. He is not going to read our initial testimony.
3 Senator HATCH. Why don't we swear both of them.
3 Senator METCALF. Why don't you both stand and raise your right hand?
3 [Whereupon, Mr. Stauffer and Mr. Klein were duly sworn by the
subcommittee.]
3 Mr. STAUFFER. I do.
3 Mr. KLEIN. I do.
3 Senator METCALF. Mr. Stauffer has, I see, a statement here which is
relatively long. Do you want to have him read a statement or would you prefer
to start with a series of inquiries?
3 Senator HATCH. I wonder if it wouldn't be better if we just start into
the inquiry and put your statement - I ask unanimous consent that the statement
be incorporated into the record in this matter so that the - your position can
be fully known here. And the attachments, I take it - there are some
attachments to your statement?
3 Mr. STAUFFER. The attachments are what we have sent up already.
3 Senator HATCH. They are already in the committee report.
3 Mr. STAUFFER. Right.
3 Senator HATCH. If they are not, I ask unanimous consent that they be
included.
3 Senator METCALF. Yes.
3 [The prepared statement of Mr. Stauffer follows:]
STATEMENT BY C. HOFF STAUFFER, JR. CHAIRMAN OF THE BOARD OF DIRECTORS
ICF INCORPORATED
TEXT: 5 Mr. Chairman, thank you for the opportunity to appear here today. My
name is C. Hoff Stauffer, Jr. I am Chairman of the Board of Directors of ICF
Incorporated. With me today is Daniel E. Klein, a Senior Associate at ICF. We
are here to answer questions which have been raised regarding the preparation of
our Draft Final Report entitled "Energy and Economic Impacts of H.R. 13950,"
submitted to the Council on Environmental Quality and Environmental Protection
Agency under Contract No. EQ6AC016. I am the ICF Director in charge of this
study; Mr. Klein is our Project Manager.
5 On February 7th and 8th, during Senate and House hearings on S. 7 and
H.R. 2, questions were raised regarding modifications made to our Draft Final
Report during the review process. Although we have always responded fully to
all questions which have been posed to us, we find that the same questions are
still being raised. We consider this an extremely important matter because we
perceive the tone of these questions as reflecting adversely upon our
professional integrity. Accordingly, we appreciate the opportunity to appear
before you today to dispense completely and finally, we hope, with any doubts
regarding the analytical integrity of our work.
5 Our testimony today is organized into two parts. The first part will
trace ICF's role in the analysis of surface mining reclamation legislation, and
discuss the procedures we followed in preparing our Draft Final Report. The
second part will detail the reasons certain modifications were made during the
review process.
5 PROCEDURES FOLLOWED IN REPORT DEVELOPMENT
5 The Environmental Protection Agency (EPA) and the Council on
Environmental Quality (CEQ) have expressed concern about the environmental
damage that occurs when land is surface mined without adequate reclamation.
Thus, EPA and CEQ have continually supported the need for uniform, national
surface mine legislation. EPA and CEQ are also aware of the potential impact
that surface mine legislation could have on the coal industry and on the
Nation's program to become less dependent on foreign sources of energy. For
these reasons, EPA and CEQ contracted with ICF to develop a methodology to
quantify the economic and energy impacts of surface mine reclamation
legislation.
6 ICF Incorporated is not an advocacy group. We provide economic and
policy analysis for decision-makers in government and industry. In under-taking
our analysis of H.R. 13950, our directive was to conduct a thorough and unbiased
study of the energy and economic impacts which might result were the legislation
to be enacted and implemented. We were not directed to prepare an advocacy
document nor to make recommendations.
6 A key aspect of our approach was the extensive degree of interaction
with other government agencies and private sector organizations. From the very
early stages of our analysis, ICF, CEQ, and EPA sought to incorporate
suggestions and review comments from a broad spectrum of interests. As I am
sure you understand, it is common practice for government agencies to solicit
comments on draft reports prepared by contractors. This review procedure is
common in academia and most professional research efforts as well. We think
this is a good procedure, because it gives those who prepare the reports (like
ourselves) the benefit of experience and expertise that is not available in any
one organization. We welcome such reviews because they generally help to
improve the quality of our products.
6 Preparation of the Draft Final Report
6 This review procedure was followed in the preparation of our Draft Final
Report. As specified in our contract with CEQ, a preliminary final report was
to have been submitted to CEQ and EPA by January 10, 1977. Following a review
by CEQ and EPA, a draft final report for interagency review was to have been
submitted by January 24, 1977. After reviewing the interagency review comments,
ICF was to submit a draft final report for distribution by approximately
February 1, 1977.
6 ICF met this report schedule in full. Our preliminary report was
submitted January 10, our draft final report for interagency review was
submitted January 24, and our Draft Final Report for distribution was submitted
February 1. This schedule had been arranged well in advance. The agencies
participating in the interagency review were well aware that their comments
would be considered for inclusion in our February 1 Draft Final Report.
7 Given that our report schedule was widely known and that we met every
interim deadline, we were surprised and distressed to hear concern expressed
regarding draft reports with different dates. The implication of these
criticisms was that the January 24th report was somehow "recalled" in order to
alter findings which would better achieve unstated political purposes. This is
absolutely not true. The January 24th report was prepared solely for the
purpose of interagency review, in order to solicit comments for consideration in
our February 1 Draft Final Report. It was always intended that the February 1
Draft Final Report would be the document for distribution. It was not, as
suggested, an "afterthought" undertaken to correct what some perceived as not
fully satisfying political goals.
7 Procedures for Making Revisions
7 In each memorandum and report submitted for review, it was ICF's intent
to present fully and accurately our findings based upon the most complete data
available and our best interpretation of those data. Through our own continuing
analysis and thoughtful comments from reviewers, we were able to improve
subsequent drafts. Because of this, it is our view that the February 1 draft
is superior to the January 24 draft. Hence, we would characterize our report as
having been "refined" or "changed for the better" but not as having been
"tampered with" or "laundered."
7 Of the numerous comments received, most were obviously based on
thoughtful and careful review. We considered each comment carefully. When we
judged the comment was sound, we attempted to refine our report appropriately.
When we judged the comment was not sound, we made no changes. In no instance
was any compromise made to the analytical integrity of our report in order to
effect findings which would appear politically desirable. No changes were made
which would distort or conceal substantive points. No omissions of
previously-analyzed issues were made. No changes were made which would impart a
partisan tone (either for or against) to the discussion. It was we (and not our
clients) who determined whether and how we would respond to each specific
comment. All changes were made by ICF, not our clients, and were authorized by
myself as Director.
8 MODIFICATIONS MADE DURING THE REVIEW PROCESS
8 So far, our testimony has dealt with the general procedures ICF followed
in developing our Draft Final Report. We hope that you will agree that
throughout this process, a high degree of attention was given to the
solicitation of outside review, and to the incorporation of these review
comments into our work according to the highest standards of professional
analytical integrity.
8 Let us now focus our attention upon the types of changes that were made.
Two basic types of changes were made - numerical and textual. Out of some 550
pages, numerical changes we recall were limited to portions of two sets of
numbers (excluding typographical errors). As we will soon show, both changes
were made in an effort to improve the analytical quality.In all cases, the data
and assumptions are fully documented. Significantly, the numerical changes did
not alter the substantive conclusions which are drawn from those estimates.
8 As with the numerical changes, the textual changes also do not alter the
substantive conclusions. The textual changes which were made in the Draft Final
Report can be categorized in three basic types:
8 (1) Readability. Several minor changes were made throughout the report
to rephrase sentences and paragraphs in an effort to improve the flow of text
and facilitate understanding of some of the more difficult portions of the
analysis. These involved no changes in substance or tone.
8 (2) Clarity. Several additions were made in the Draft Final Report to
expand upon the assumptions, methodologies, and findings. Most of these
additions were made in response to questions raised during the review process,
and include footnotes, supplementary descriptors, and additional caveats where
necessary. These, too, involved no changes in substance or tone.
8 (3) Tone . Throughout this study we have attempted to present an
impartial and factual analysis. This is in keeping with our instructions to
develop impact estimates and not an advocacy document. We have not expressed
judgments as to the merits of the legislation, and have limited our analysis to
the impacts of H.R. 13950 as reported August 31, 1976. Although we tried to
present our analysis in politically neutral terms, we were made aware of
several instances in which the phrasing could possibly suggest a bias either for
or against the bill. To avoid the appearance of having taken any advocacy
position, alternative wordings were sought which would not suggest a bias but
would still retain the substantive value. We did not make such tonal changes
when the result would have been to weaken or modify an analytical finding.
9 In the remainder of our opening statement, we will describe in greater
detail some of the specific changes made between the interagency review draft of
January 24, 1977, and the February 1 Draft Final Report. Specifically, we will
discuss the refinements to portions of two sets of numerical estimates, and the
reasoning behind some of the textual changes.
9 During preparation of our Draft Final Report, dozens, perhaps even
hundreds, of minor modifications were made throughout the report in response to
continuing analysis at ICF and thoughtful reviewer comments.It is our firm
conviction that none of these changes, including those we will now discuss,
changed any of the summary findings or conclusions. We have selected those
changes we will now discuss only because others have made note of them, not
because they are particularly significant in and of themselves. In particular,
we will discuss those changes noted in the Dissenting Views to the House Report
on H.R. 2.
9 Alluvial Valley Floors
9 Between the interagency review version of January 24 and the February 1
Draft Final Report, the assumptions used to develop estimates of the "worst
case" or "high impact" production impacts that could result from the alluvial
valley floor provisions of H.R. 13950 were modified. Whereas in the interagency
review version the assumption was made that any lease area containing alluvial
valley floors would be impacted, the Draft Final Report took account of the
extremely low probability that all of these sites would be impacted, even under
a very stringent interpretation of H.R. 13950. The effect of this change in
assumptions was to reduce the high production impact estimates to approximately
one-half of those presented in the interagency review draft. The other two sets
of production impact estimates concerning alluvial valley floors - low and
moderate - did not change at all. Likewie, no changes were made in the reserve
base impact estimates.
10 In the interagency review, the estimate of high production impact was
based upon very stringent interpretations of imprecise terms. Lands were not
assumed to be undeveloped range land if there was any potential for hay
production. Even very small changes in water quantity or quality were assumed
to be adverse effects. Finally, it was assumed that the grandfather clause was
applicable only to presently permitted acreage, and that unpermitted parts of
the long-range mining plan would not be grandfathered.
10 Under these interpretations, the impact upon production could be quite
high indeed. In developing a numerical estimate, we made the assumption that
any mine having any alluvial valley floors within the entire lease boundary
could be impacted. Using the aerial analysis data documented in our report,
this assumption projected about 70 percent of the future production in the
Northern Great Plains as being impacted in some way.
10 In response to comments received during the interagency review process,
we re-examined the substantive basis for this estimate. We were concerned
that the extreme assumptions we had used resulted in an unrealistically high
estimate which could be misleading.
10 We reviewed the data from our interviews with 19 western mine
operators.Some were near alluvial valley floors which contained poor quality
water or were clearly not productive. Others were located at a considerable
distance from the alluvial valley floor or had the mining area separated from
the valley floors by ridges. In still others, the actual identification of an
alluvial valley floor was questionable from geologic and hydrologic viewpoints.
Hence, the proximity of a lease to a possible alluvial valley floor clearly does
not mean that in all cases, the mine site could impact that valley floor.
10 Based upon this review of the data which is fully documented (in
Appendix F of our report), we concluded that our original assumption was overly
harsh. The flaw lay in the fact that although any individual mine near an
alluvial valley floor had some probability of being impacted by H.R. 13950, the
joint probability that every mine would be impacted was extremely small. Since
about one-half of the mine sites covered by our interviews could be unaffected
due to the aforementioned reasons, and since one-half appeared a reasonable
estimate given the less-than-adequate data available, we prepared a revised high
impact estimate based upon the assumption that about one-half of the new
production near alluvial valley floors would be impacted.
11 Further, the "worst case" estimates for the alluvial valley floor
provisions of the January 24 draft were retitled as "high impact" estimates in
the February 1 draft. It was argued by some that "worst case" implied that we
opposed such an outcome, whereas others might see such an outcome as desirable.
In keeping with our apolitical approach, this term was changed to a more neutral
"high production impact." This new title was also consistent with our revised
estimates for the high end of the range, which were not of the most extreme case
imaginable but which reflect reasonable probability judgments.
11 It is this particular numerical change which has been singled out for
intensive questioning. Yet as we have just explained, the modification was made
on what we believe is a sound analytical basis. In both the interagency review
draft and the Draft Final Report, all data and assumptions are fully documented
so that the reader can understand the basis of our estimates. We think it is
significant to note that during the more than three months this estimate has
been under intense public scrutiny, we have not yet received any comments
suggesting that our estimate in the February 1 Draft Final Report did not
represent the best possible estimate based upon the best available data.
11 It is also worth noting that the changes made had no bearing on the
conclusion drawn from the table presenting the low, moderate, and high
estimates. The conclusion is (in both drafts) that a wide range of potential
impacts (associated with both data uncertainty and varying interpretations of
the language of the bill) exists, ranging from zero to some very large numbers.
This point did not change at all between the interagency review of January 24
and the Draft Final Report of February 1, 1977.
12 Finally, we believe that this focus on a specific set of numerical
estimates is not productive. Due to the substantial uncertainties associated
with estimating these impacts, we believe that no undue emphasis should be
attached to any specific number or set of numbers. This was noted in the second
paragraph on page one of our report:
12 "In several parts of this analysis, complete and accurate data did not
exist. Further, the methodologies developed were often only approximate in the
accuracy of the results rendered. Accordingly, the findings of this analysis
should be interpreted ; no undue weight should be given to any particular
number."
12 Both draft reports make clear the substantial uncertainties regarding
the estimates associated with the alluvial valley floor provisions. We suggest
that discussions should focus on an interpretation of the range (i.e., that a
broad range of potential impacts exist), and not on any specific numbers.
12 Surface Owner Protection Provisions
12 Between the interagency review version of January 24 and the February 1
Draft Final Report, the assumptions used to develop the reserve base impacts of
the surface owner protection provisions were changed. In the interagency review
draft of January 24, 1977, the reserve base impacts ranged from 0.8 to 8.5
billion tons. In the February 1 Draft Final Report, the range is 0.4 to 4.2
billion tons. The total potential impact upon the reserve base from all
provisions ranges from 8.1 to 24.0 billion tons.
12 The methodology used to develop these estimates is the same in both
drafts - beginning with estimates of the quantity of federal strippable coal
beneath non-federal surface, adjustments are made to account for (1) the percent
of this land owned by a qualified surface owner, (2) the percent of qualified
surface owners who might be unwilling to consent to having the coal reserves
leased, and (3) the nearby reserves which would be excluded. The changes in
impacts relate directly to changes in these adjustment factors, and in total
reduce the impacts by about one-half.
12 Reserve base impact estimates differ between drafts only because of
changes in the subjective estimates of (1) the percent of this land owned by
qualified surface owners, and (2) the percent of qualified surface owners who
might be unwilling to consent to having the coal reserves leased. In both
versions, the estimates of federal strippable coal beneath nonfederal surface
are the same.
13 The factors which changed were and still are subjective estimates,
based upon a paucity of meaningful data. Our subjective estimates were revised
based upon reviewer comments relating to the success that energy companies have
been having in acquiring surface rights in the West. Further, reviewers cited
portions of our own analysis which noted that although the provisions would
limit surface owners from obtaining windfall profits by giving consent, there
were no restrictions against making windfall profits by selling the land. Based
upon these observations, we concluded that our estimates of qualified surface
owners who would refuse either to allow leasing or to sell were probably too
high.
13 Still, there were very few data upon which assumptions can be based.
We considered making no estimates at all, but judged that would not be a
positive contribution toward helping others understand the potential impacts of
the bill. Hence, we decided to estimate a range of potential impacts, making
clear our methodology and assumptions. This gives the reader the opportunity to
test the effects of alternative assumptions on the estimates.
13 We note again that during the more than three months this estimate has
also been under intense public scrutiny, we have not yet received comments
suggesting that our estimate did not represent the best possible estimate based
upon the best available data.
13 Text Changes
13 As was noted earlier, changes in text were made to improve readability,
clarity, or tone. These text changes do not alter the basic substance; hence,
we do not consider such changes as being significant. They do not represent, as
has been suggested, "doctoring," "tampering," or "watering down." Let us now
take several examples of such changes, as cited in the Dissenting Views to the
House Report on H.R. 2.
14 Example No. 1
14 In the interagency review draft of January 24, the last half of the
first summary conclusion relates to possible undesirable effects of H.R. 13950.
It reads:
14 "However, there are numerous provisions in H.R. 13950 not directly
related to costs which could create major difficulties. Such impacts include
(1) substantial production impacts that could result from possible
interpretations of the alluvial valley provisions, (2) delays in permitting due
to inability to comply within established timetables and/or insufficient
administrative funding, (3) extensive litigation resulting from ambiguous and
undefined terms, (4) unintended effects due to mismatches between the apparent
intent and the actual wording, and (4) losses to coal reserve base."
14 In the February 1 Draft Final Report, this was presented as a separate
summary conclusion, and reworded in a more general form. It reads:
14 "However, several provisions in H.R. 13950 are subject to varying
interpretations. In the event that these terms are given very stringent
interpretations, the impacts could be substantially higher."
14 During the interagency review, it was suggested that this first summary
conclusion lacked parallelism in that general findings (i.e., with respect to
cost impacts) were combined with specific points (i.e., with respect to non-cost
impacts and varying interpretations).Further, it was suggested that the original
wording implied that these were the only impacts, where in fact there were
several more.
14 In response to what we considered to be valid criticism, we reworded
this to read as two general conclusions. It is important to note that all of
the specific issues raised are still raised in detail in the Summary, and all
are analyzed in full in the body of the report. In making this change, our
intention was to be clear and to impart a neutral tone. We did not and do not
consider our conclusions to be weakened or watered down.
15 Example No. 2
15 In the summary to the January 24 interagency review draft, one
conclusion relates to varying interpretations of provisions. It reads:
15 "In addition there are several other non-cost provisions in H.R. 13950
in which the wording of the provisions could have effects quite different from
the apparent Congressional intent. In most cases, the intent of the provision
would have little cost or production impact. However, the actual wording could
result in unnecessary restrictions, administrative inflexibility, and/or
additional litigation."
15 In the February 1 Draft Final Report, this text is reworded as:
15 "In addition there are several other non-cost provisions in H.R. 19350
in which the wording of the provisions could result in additional restrictions,
administrative inflexibility, and/or delays. In most cases, the intent of the
provision would have little cost or production impact."
15 In our view, there is very little difference between the two. However,
the fact that the wording has changed has been looked upon with suspicion. In
the House Report on H.R. 2, a sentence-by-sentence comparison was made, and
turned up the fact that what had been three sentences was now rewritten as two.
Accordingly, the parallel to the third sentence was a note saying "Language
deleted in this version."
15 The reason the third sentence was deleted was that it was combined with
the first sentence. The third sentence in the January 24 draft was " . . . the
actual wording could result in unnecessary restrictions, administrative
inflexibility, and/or additional litigation." The first sentence of the February
1 draft contains " . . . the wording of the provisions could result in
additional restrictions, administrative inflexibility, and/or delays." We
believe the two sentences of the February 1 draft say the same thing as the
three sentences of the January 24 draft.
15 The reason we revised this paragraph was to avoid reference to the
"apparent Congressional intent." Reviewers noted that it was presumptuous of ICF
to proclaim what the Congressional intent actually was. Further, it was pointed
out that since H.R. 13950 did not pass in either house of Congress, the bill
itself was not a reflection of Congressional intent. Accordingly, we sought a
rewording which would convey the point that the literal wording could have
unintended effects, while avoiding the phrase "Congressional intent." Elsewhere
in the Summary and in Chapter V, we made frequent use of the phrase "apparent
intent (as reflected in the statutory language and Committee Report)."
16 Example No. 3
16 In the January 24 interagency review draft, the summary of the alluvial
valley floor analysis included a sentence to suggest the wide range of impacts
associated with different interpretations. It reads:
16 "Imprecise wording in H.R. 13950 could lead to uncertain
interpretation; which could significantly limit western surface coal mining."
16 This was reworded in the February Draft Final Report to read:
16 "Some words and phrases in H.R. 13950 are subject to varying
interpretations. In the event that these terms were given a very stringent
interpretation, the impacts of H.R. 13950 could range substantially higher."
16 We consider the thrust of these two sentences to be the same, except
that the second sentence is phrased in a more general form. The reason for this
change was to avoid use of the word "limit." As used here, "limit" implies
actual production curtailments. However, the analysis of the alluvial valley
floor provisions tried to estimate "production impacts," which were explicitly
defined to include delays and mining plan revisions as alternative impacts to
production losses.
16 Thus, our original summary statement that mining could be limited by
these provisions was one which was not strictly supportable by our analysis.
Accordingly, we sought an alternative wording which would convey our concern
relating to the uncertain impact of imprecise wordings, while still being
supportable by our analysis.
16 Example No. 4
16 In the summary of the alluvial valley floor impacts, the January 24
interagency review draft elaborates on particular terms which could be
interpreted in different ways. It reads:
16 "Imprecise and undefined terms create a high degree of uncertainty in
predicting impacts, and could likely result in extensive litigation. A
distinction can be made between flexibility and ambiguity. Flexibility refers to
the ability of the regulators to make case-by-case decisions based upon clearly
defined criteria. Ambiguity, on the other hand, refers to poorly defined
criteria, which could result in judicial interpretation and regulatory
inflexibility. Such imprecise terms include "existing coal mine," "valley
floor," "undeveloped range land," "adversely effect," "not significant," and
"substantial loss."
17 In the February 1 Draft Final Report, this paragraph was rewritten as:
17 "Certain phrases on Section 510(b)(5) are subject to different
interpretations. For example, it is not clear whether the term "undeveloped
range lands" includes lands which have the potential for hay production. Nor is
it clear what kind of changes in water quality and quantity could constitute
"adverse effects" within the meaning of Section 510(b)(5)(B). Other phrases may
also be interpreted differently. Some of these uncertainties may be resolved
when administrative regulations defining these terms are promulgated under the
statute. Others will be clarified as regulatory authorities proceed to
administer the Act on a permit by permit basis. Finally, the possibility exists
that judicial interpretations of these terms may in some cases be sought."
17 The effort was clearly to provide greater specificity as to what we
meant by "imprecise and undefined terms." In the original wording, some
reviewers did not understand why we thought some terms were imprecise.
Accordingly, we elaborated by giving examples.The full analysis of the alluvial
valley floor provisions provides even more detail regarding the imprecision of
particular terms.
17 Example No. 5
17 In the January 24 interagency review draft, the discussion of other
non-cost issues includes the point that the citizen participation provisions
could potentially be abused. It reads:
17 "The provisions for declaring lands as unsuitable for mining appear to
offer citizens an easier means of forcing hearing than is provided by the
standard permit hearing process.Further, the regulatory authority has little
flexibility in deciding whether hearing are actually warranted."
18 This was shortened in the February 1 Draft Final Report to read:
18 "The provisions for declaring lands as unsuitable for mining could
possibly offer citizens an easier means of forcing hearings than is provided by
the standard permit hearing process."
18 The decision to omit the second sentence was basically an editorial
judgment. Since the first sentence clearly states that citizens have the means
to force hearings, implying little or no regulatory flexibility, the second
sentence is in large part redundant.Further, we note that this point is
explained in detail in the main body of the report.
18 Example No. 6
18 In the January 24 interagency review draft, the discussion of other
non-cost issues includes a point on required effluent guidelines. It reads:
18 "The technology which might be required to control sedimentation is
phrased different from EPA's effluent guidelines. While it was interpreted in
this report to require EPA's 1983 standard of 'best available technology
economically achievable' in 1978, it could be interpreted differently and could
result in costly and time consuming litigation."
18 In the February 1 Draft Final Report, this point was reworded to read:
18 "The technology which might be required to control sedimentation is
phrased differently from EPA's effluent guidelines. It was interpreted in this
report to accelerate EPA's 1983 standard of 'best available technology
economically achievable' into 1978."
18 This point was revised for two primary reasons. First, it is beyond
our role and competence to predict specific legal challenges. Second, we felt
that it was more important to emphasize our interpretation that the 1983
effluent guidelines would be accelerated. During the review process, we became
aware that the possibility of this acceleration was not widely understood,
despite its potentially large economic impacts. Accordingly, we chose to
emphasize our interpretation, rather than qualify it with alternative
possibilities.
19 Summary of Changes
19 We have just discussed the changes which have been referenced as major
changes.We think it is apparent that all text changes were based upon
considerations of readability, clarity, and tone. It is also apparent that all
numerical changes are based upon what we believe are sound analytical judgments
and are always fully documented.
19 Hence, we strongly disagree that the changes we have made in any way
weaken or change our findings, or slant the facts to achieve partisan aims.
Further, we see all of these changes as being minor, and in no case affect the
basic substance of our analysis.
19 Mr. Chairman, this concludes our prepared remarks. Again, we
appreciate this opportunity to present the facts of the situation before the
Subcommittee. We would be happy to answer any further questions you may have.
20 A Memorandum from C. Hoff Stauffer, Jr. (ICF) and Daniel E. Klein (ICF)
to Barry R. Flamm (CEQ) and James Speyer (EPA), dated February 10, 1977.
20 B Letter from Senator Orrin G. Hatch to Mr. William Stitt (ICF), dated
February 7, 1977.
20 C Letter from C. Hoff Stauffer, Jr. (ICF) to Senator Orrin G. Hatch,
dated February 11, 1977.
20 D Letter from Senator Lee Metcalf to Daniel E. Klein (ICF), dated
February 9, 1977.
20 E Letter from C. Hoff Stauffer, Jr. (ICF) to Senator Lee Metcalf, dated
February 18, 1977.
20 F Letter from Senator Lee Metcalf to C. Hoff Stauffer, Jr. (ICF), dated
February 24, 1977.
21 ICF INCORPORATED 1990 M Street, Northwest Suite 400, Washington D.C.
20036 (202) 785-3440
21 February 10, 1977
21 MEMORANDUM
21 TO: Barry R. Flamm (CEQ)
21 James Speyer (EPA)
21 FROM: C. Hoff Stauffer, Jr.
21 Daniel E. Klein
21 SUBJECT: "Energy and Economic Impacts of H.R. 13950"
21 It has come to our attention that questions have been raised regarding
modifications to our report between the Draft Final Report released on February
1, 1977, and the interagency review version of January 24, 1977. Some of the
differences have been noted during both the Senate hearings on S.7 (February 7,
1977) and the House hearings on H.R. 2 (February 8, 1977).On these occasions an
inference was made that such changes could have been due to political
considerations rather than analytical judgments. In this memorandum we would
like to fully resolve any confusion which may had arisen.
21 We wish to strongly emphasize that in no instance in our Draft Final
Report (or in any preliminary drafts and/or memoranda) was any compromise made
to the analytical integrity in order to effect findings which would appear
politically desirable. The Draft Final Report of February 1 represents our very
best analytical judgments at that point in time, just as any earlier drafts
and/or memoranda represented our best judgments at earlier points in time.
Hence, changes over time represent what we consider to be improvements in
methodology, data, and/or assumptions, and in no way represent analytical
compromises made for political convenience.
21 Throughout our study we have fully documented the data and assumptions
underlying the impact estimates. Thus, any changes in impact estimates can be
related directly to changes in underlying assumptions, where such changes are
based upon what we consider to be analytically sound judgments and are fully
documented. Any textual changes relate directly to efforts to (a) improve
clarity, (b) improve readability, or (c) impart a more neutral tone to the
document, since our study does not represent an advocacy document but rather an
analysis.
21 The following sections will expand upon these points and detail the
changes in particular impact estimates which have been noted in previous
discussions. The first section will be a general discussion of ICF's approach
in developing a Draft Final Report. This is followed by a detailed explanation
of changes found between the interagency review version of January 24, 1977 and
the Draft Final Report released on February 1, 1977.
22 GENERAL COMMENTS
22 Since ICF began its analysis of H.R. 13950, our approach has been one
which has stressed cooperation with numerous and diverse interest groups, both
in and out of government. This analysis has proven to be quite complex; since
our own resources are limited, we have welcomed valid inputs from all who were
willing to contribute. The primary vehicle for the solicitation of advice has
been the use of draft reports and memoranda. These reflected our best judgments
and knowledge at the time. By virtue of the extensive cooperation and
thoughtful comments we received from others, we were often able to make what we
considered analytical improvements in subsequent drafts. In those instances
where we felt that the review comments did not contribute to the substance
and/or appeared to be political at the expense of the analytical integrity, such
comments were rejected.
22 In keeping with this approach, we prepared preliminary copies dated
January 24, 1977 for the purpose of interagency review. This was done for the
purpose of allowing several agencies (CEQ, EPA, FEA, BOM, DOI, OMB, TVA) to
review and comment prior to the release of our Draft Final Report of February 1,
1977. It was never intended that the interagency review version of January 24
be the version submitted as our Draft Final Report under the terms of our
contract. In fact, we at ICF were making several minor changes concurrent with
the interagency review. Due to the high level of cooperation from these
agencies, we were able to make what we consider to be analytically sound
modifications and editorial improvements. Any suggestions which would have
compromised the analytical integrity to achieve politically desirable findings
were rejected, as were any other suggestions we judged to be unsound.
22 Accordingly, the Draft Final Report which we submitted on February 1,
1977 represents our best analytical judgments at this time. Still, we must note
that it is a draft report, and is subject to further modification as additional
reviewer comments are received.As stated in the Preface to the report,
22 "This draft is being distributed for purposes of review and comment.
Further work is being conducted. Refinements are underway. Constructive
comments are welcomed."
22 CHANGES IN TEXT
22 Some questions have arisen regarding textual changes which have
occurred between versions leading up to the Draft Final Report of February 1,
1977. The concern was that these changes were made in an effort to distort or
canceal substantive points developed in earlier versions.These concerns are
unfounded.
22 Before describing the changes, it is useful to note types of changes
which were not made. No changes were made which would distort or conceal
substantive points. No omissions of previously-analyzed issues were made. No
changes were made which would impart a partisan tone (either for or against) to
the discussion. 23 The text changes which have been made in the Draft Final
Report can be categorized in three basic types:
22 (1) Readability. Several minor changes were made throughout the report
to rephrase sentences and paragraphs in an effort to improve readability and
facilitate understanding of some of the more difficult points.
22 (2) Clarity. Several additions were made in the Draft Final Report to
expand upon the assumptions, methodologies, and findings. Most of these
additions were made in response to questions raised during the review process,
and include footnotes, supplementary descriptors, and additional caveats where
necessary.
22 (3) Tone. Throughout this study we have attempted to present an
impartial and factual analysis. This is in keeping with our instructions to
develop impact estimates and not an advocacy document. We have refrained from
expressing judgments as to the merits of the legislation or to what preferred
legislation might read, and have limited our analysis to the impacts of H.R.
13950 as reported August 31, 1976. Although we have tried to present our
analysis in neutral terms, we have been made aware of several instances in which
the phrasing could possibly suggest a bias either for or against the bill. To
avoid the appearance of having taken any advocacy position, alternative wordings
were sought which would not suggest a bias while still retaining the substantive
value. We did not make such tonal changes when the result would have been a
diminuation of the analytical finding.
22 Examples of such text changes which are particularly noteworthy are the
first two major conclusions in the Executive Summary of the Draft Final Report.
These paragraphs do not add any new material to the section, but seek to
highlight the major conclusions which follow. In the interagency review version
of January 24, these two paragraphs were combined. While the first part
(relating to impacts which were not great) remained the same, the second part
(relating to non-cost impacts and varying interpretations) was made less
specific in the Draft Final Report. During the interagency review, it was
suggested that this paragraph was combining general findings with specific
points, and that insufficient detail had yet been presented which would make
these specific points meaningful. Further, it was suggested that the original
wording implied that these were the only impacts, where in fact there were
several more.In response to what we considered to be valid criticism, we
reworded this to read as two general conclusions. We note that all of the
specific issues raised are still raised in detail in the Summary, and all are
analyzed in full in the body of the report.
24 ALLUVIAL VALLEY FLOORS - HIGH PRODUCTION IMPACT SCENARIO
24 Between the interagency review version of January 24 and the February 1
Draft Final Report, the assumptions used to develop the high production impact
scenario for alluvial valley floors were modified. Whereas in the interagency
review version the assumption was made that any lease area containing alluvial
valley floors would be impacted, the Draft Final Report took account of the fact
that not all of these sites would be impacted under a reasonable high impact
scenario. The effect of this change in assumptions was to reduce the high
production impact estimates to approximately one-half of those estimated in the
interagency review version.
24 The assumptions used in developing these estimates are fully documented
in the analysis, and are summarized in the Executive Summary. The scenario
specification used in the interagency review version of January 24 is as follows
(underlining added):
24 "A worst-case production impact is based upon very stringent
interpretations of imprecise terms. Lands are not assumed to be undeveloped
range land if there is any potential for hay production. Very small changes in
water quantity or quality are assumed to be adverse effects.Finally, it is
assumed that the grandfather clause is applicable only to presently permitted
acreage; unpermitted parts of the long-range mining plan are not included. In
states such as Montana, all mines become potentially impacted, since only one
year's acreage is permitted at a time.
24 Under these interpretations, the impact upon production can be quite
high. To estimate the magnitude of this impact, the percent of lease tracts
containing alluvial valley floors (Table 2) is used as an estimate of the
percentage of new mines which could be impacted. In Arizona, New Mexico, and
Washington, it is assumed that new mines will not affect alluvial valley floors,
since they are not characteristic of these areas. Thus, the percent of new
surface mine production which could be impacted is assumed to be as follows:
Percent Impacted
Colorado 71
Montana 65
North Dakota 91
Wyoming 81
25 Further, it is assumed that existing Montana production could be
impacted in the same proportion, since only one year's acreage is permitted at a
time. Using these assumptions in conjunction with the surface production
forecast developed in Chapter III, the worst-case impacts are developed as
follows:
*6*Worst Case
Impact
(Million
Tons)
Year Colorado Montana North Dakota Wyoming Total
1977 0.7 21.4 3.3 9.8 35.2
1978 1.3 22.3 4.5 22.8 50.9
1979 2.4 24.0 5.0 39.3 70.7
1980 3.7 27.1 6.3 57.9 95.0
1981 4.7 29.6 6.8 65.5 106.6
1982 6.1 32.6 7.3 91.7 137.7
1983 7.4 35.9 7.7 101.0 152.0
1984 9.0 39.5 8.2 128.3 185.0
1985 10.6 43.4 8.6 148.4 211.0
25 Although it is unlikely that this production will all be shut down, the
potential for extensive litigation is quite high, which could in turn lead to
substnatial short-term production delays."
25 Source: Interagency Review version of January 24, 1977, pages F-34, 35.
25 In the Draft Final Report of February 1, 1977, we chose (properly, we
think) to modify these assumptions to account for the fact that lease areas are
often much larger than the mine site itself, and in many cases the mining plan
would be far removed from and/or would have negligible impact upon the alluvial
valley floor located elsewhere within the lease tract. The scenario
specifications are likewise fully documented in the analysis, and are summarized
in the Executive Summary. These specifications are as follows (underlining
added):
25 "A high production impact is based upon very stringent interpretations
of the provisions. Lands are not assumed to be undeveloped range land if there
is any potential for hay production. Very small changes in water quantity or
quality are assumed to be adverse effects. Finally, it is assumed that the
grandfather clause is applicable only to presently permitted acreage;
unpermitted parts of the long-range mining plan are not included. In states
such as Montana, all mines become potentially impacted, since only one year's
acreage is permitted at a time.
25 Under these interpretations, the impact upon production can be quite
high. To estimate the magnitude of this impact, the percent of lease tracts
containing alluvial valley floors (Table 2) is used as an initial basis of the
percentage of new mines which could be impacted. At this starting point, this
percentage is used as a surrogate measure to indicate those mines which need to
be concerned with potential alluvial valley floor impacts. However, even under a
reasonable high impact scenario, many of these sites will not likely have
permitting problems with respect to alluvial valley floor provisions. Some will
be near alluvial valley floors which contain poor quality water or are clearly
not productive. Others will be located at a considerable distance from the
alluvial valley floor or have the mining area separated from the valley floors
by ridges. Under the high impact scenario, it is assumed that one-half of the
mine sites having alluvial valley floors within the lease boundaries will have
no permitting problems, and that the remaining one-half could be subjected to
impacts (delays, mining plan revisions, production cutbacks, etc.). In Arizona,
New Mexico, and Washington, it is assumed that new mines will not affect
alluvial valley floors, since they are not characteristics of these areas.
Thus, the percent of new surface mine production which could be impacted is
assumed to be as follows:
26
Percent Near Alluvial Percent Assumed Affected
Valley Floors By H.R. 13950
Colorado 71 35
Montana 65 32
North Dakota 91 45
Wyoming 81 40
26 Further, it is assumed that existing Montan production could be
impacted in the same proportion, since only one year's acreage is permitted at a
time. Using these assumptions in conjunction with the surface production
forecast developed in Chapter III, the worst-case impacts are developed as
follows:
*6*High
Production
Impact
(Million
Tons)
Year Colorado Montana North Dakota Wyoming Total
1977 0.4 10.6 1.6 4.8 17.4
1978 0.6 11.0 2.2 11.3 25.1
1979 1.2 11.8 2.5 19.4 34.9
1980 1.8 13.4 3.1 28.6 46.9
1981 2.3 14.6 3.4 32.4 52.7
1982 3.0 16.1 3.6 45.3 68.0
1983 3.7 17.7 3.8 49.9 75.1
1984 4.4 19.4 4.0 63.4 91.2
1985 5.2 21.3 4.3 73.0 103.8
26 Although it is unlikely that this production will all be shut down, the
potential for delays are quite high, which could in turn lead to significant
shortterm production losses."
26 Source: Draft Final Report, February 1, 1977, pages 36-37.
26 Several points are worthy of note:
26 The production impacts estimated for the low and moderate production
impact scenarios remained the same in the interagency review version and the
Draft Final Report of February 1. Further, the reserve base impacts remained
the same under all scenarios. Importantly, it is the moderate impact scenario
that reflects (1) what we believe would happen if the bill was interpreted
consistent with the apparent intent (as reflected in the statutory language or
Committee Report), and (2) our best judgments based upon existing data.
i7 In estimating production impacts due to the alluvial valley floor
provisions, the term "production impact" should not be equated with the term
"production losses." As clearly noted in the summary tables:
i7 "Production impacts, as used here, do not necessarily mean production
losses; delays and/or mining plan revisions are alternative impacts."
i7 The term "worst-case production impact" was changed to "high production
impact" in the Draft Final Report of February 1, 1977. This change was made for
two reasons. First, it was claimed by some that "worst-case" implied that we
opposed such an outcome, whereas others might see such an outcome as desirable.
In keeping with an apolitical approach, this term was changed to a more neutral
"high production impact." Second, a worst-case estimate calls for the most
extreme case imaginable; in this case, the joint probability of every mine
having alluvial valley floors within the lease area being impacted. The joint
probability of such an event is extremely small. A high impact estimate, on the
other hand, need not include the most extreme case imaginable, but can be
tempered with judgment concerning the low probability that every mine having
alluvial valley floors within the lease area might be impacted.This judgment is
clearly stated in our report.
i7 The change in assumptions made in the Draft Final Report was based upon
our professional judgment that our original assumptions were overly strict.
Through discussions generated during the interagency review process, coupled
with a re-examination of the interviews with the western mine operators (fully
documented in Appendix F), we concluded that alternative assumptions were
necessary in order to ensure that the analysis presented our best analytical
judgments at that point in time.
i7 The February 1, 1977 report is still a draft report. All assumptions
have been documented. Reviewer comments are still welcome. Should new evidence
be presented which convinces us that further modifications are warranted,
further modifications will be made and the assumptions clearly documented.
i7 Due to the substantial uncertainties associated with estimating these
impacts, we believe (as clearly stated in our report) that no undue emphasis
should be attached to any specific number or set of numbers. In the case of the
alluvial valley floor provisions, the point being made was that there is a wide
range of potential impacts (associated with both data uncertainty and varying
interpretations of the language of the bill) ranging from zero to some very
large numbers. We note that this point did not change at all between the
interagency review version of January 24 and the Draft Final Report of February
1, 1977.
28 SURFACE OWNER PROVISIONS - RESERVE BASE IMPACTS
28 Between the interagency review version of January 24 and the February 1
Draft Final Report, the assumptions used to develop the reserve base impacts of
the surface owner protection provisions were changed. The methodology used to
develop these estimates is the same in both versions - beginning with estimates
of the quantity of federal strippable coal beneath non-federal surface,
adjustments are made to account for (1) the percent of this land owned by a
qualified surface owner, (2) the percent of qualified surface owners who might
be unwilling to consent to having the coal reserves leased, and (3) the nearby
reserves which would be excluded. The changes in impacts relate directly to
changes in these adjustment factors, and in total reduce the impacts by about
one-half.
28 The description of the methodology is identical in both the interagency
review version of January 24 and the Draft Final Report of February 1, and reads
(underlining added):
28 "We know of no data, on either a raw or aggregate basis, which would
indicate the proportion of non-federal lands which are owner-occupied. Even
county courthouse records which would indicate surface ownership would not
indicate the residency or income information needed to resolve Section 714's
criteria. Further, it is also a matter of conjecture as to how those private
surface owners who do fall under the provisions of Section 714 would respond.
28 Accordingly, the amount of reserves which may actually be excluded
under Section 714 is likely to be significantly less than the federal coal
beneath non-federal surface. Since there is no data which would indicate the
protion owned by qualified surface owners or their willingness to allow leasing,
only a subjective estimate of excluded reserves can be made. In this analysis,
three estimates are made, covering a range of qualified ownership percentages
and willingness to allow leasing."
29 In the interagency review version of January 24, the reserve base
impacts were developed as follows (page V-10):
Scenario
Low Impact Moderate Impact High Impact
Federal coal
beneath non-federal
surface (million
tons) 9,126 12,120 13,071
x Qualified surface
owner (%) 33 50 67
x percent unwilling
to allow leasing 25 50 75
+ Nearby reserves
effectively
excluded (%) 10 20 30
= Reserves impacted
(million tons,
rounded) 800 3,600 8,500
In the Draft Final Report of February 1, 1977, the reserve base impacts were
developed as follows (page V-11):
Federal coal
beneath non-federal
surface (million
tons) 9,126 12,120 13,071
x Qualified surface
owner (%) 25 35 50
x Percent unwilling
to allow leasing 15 30 50
+ Nearby reserves
effectively
excluded (%) 10 20 30
= Reserves impacted
(million tons,
rounded) 400 1,500 4,200
30 The following points are worthy of note:
30 In both versions the estimates of federal strippable coal beneath
non-federal surface are the same.Reserve base impact estimates differ only
because of changes in the subjective estimates of (1) the percent of this land
owned by qualified surface owners, and (2) the percent of qualified surface
owners who might be unwilling to consent to having the coal reserves leased.
30 The factors which changed were and still are subjective estimates,
based upon a paucity of meaningful data. Our subjective estimates were revised
based upon reviewer comments relating to the success that energy companies have
been having in acquiring surface rights in the West. These comments led us to
believe that our earlier estimates had been too high.
30 The February 1, 1977 report is still a draft report. All assumptions
have been documented. Reviewer comments are still welcome. Should new evidence
be presented which convinces us that further modifications are warranted,
further modifications will be made and the assumptions clearly documented.
30 We are uneasy about these estimates because there are very few data
upon which assumptions can be based. We considered making no estimates at all,
but judged this would not be a positive contribution toward helping others
understand the potential impacts of the bill. Hence, we decided to estimate a
range of potential impacts, making clear our methodology and assumptions. This
gives the reader the opportunity to test the effects of alternative assumptions
on the estimates.
31 @% United States Senate @%COMMITTEE ON @%INTERIOR AND INSULAR AFFAIRS
@%WASHINGTON, D.C. 20510 @%February 7, 1977 @%Mr. William Stitt @%President
@%ICF, Inc. @%1990 M Street, N.W. @%Suite 400 @%Washington, D.C. 20036 @%Dear
Mr. Stitt:
31 It has come to my attention that your draft final report entitled
Energy and Economic Impacts of H.R. 13950 submitted to the Council on
Environmental Quality and Environmental Protection Agency under Contract No.
EQ6AC016 on February 1, 1977 may have been tampered with. On January 24, 1977
your draft report stated in the summary of conclusions certain specific impacts
would occur if H.R. 13950 became law. Those assessments were changed in the
February 1, 1977 report.
31 Would you explain the following:
31 1. Why the production figures and other assessments made in the
January 24th report were changed in the February report.
31 2.Who specifically made these changes.
31 3.What data did those who made the changes rely upon to justify the
changes.
31 4.Is it your normal practice to submit your recommendations to a
federal agency and then change your recommendations based upon input from the
contract agency.
31 5. Which impact figures does ICF stand on - the January report or the
February report - and please explain.
32 @%ICF INCORPORATED 1990 M Street, Northwest, Suite 400, Washington,
D.C. 20036(202) 785-3440 @%February 11, 1977 @%Senator Orrin G. Hatch @%6313
Dirksen Senate Office Building @%Washington, D.C. 20510 @%Dear Senator Hatch:
32 My partner Mr. William Stitt gave me your letter concerning our draft
reports (of January 24, 1977 and February 1, 1977) entitled Energy and Economic
Impacts of H.R. 13950 submitted to the Council on Environmental Quality and the
Environmental Protection Agency under Contract No. EQ6AC016. He did so because
I am the ICF director in charge of this study. My title is Chairman of the
Board of Directors.
32 General Comments
32 As I am sure you understand, it is common practice for government
agencies to solicit comments on draft reports prepared by contractors. This
procedure is common in academia and most professional research efforts as well.
We think this is a good procedure because it gives those that prepare the
reports (like ourselves) the benefit of a great deal of experience and expertise
that is not available in any one organization.
32 This is the practice that was followed in this case. The purpose of
the January 24 draft was to solicit comments from our clients and other
knowledgeable professionals. We had the benefit of a great deal of comment,
most of which was obviously based on a thoughtful and careful review of our
draft report.We welcome such reviews because they help us to improve our
reports.
32 We considered each comment carefully. When we judged the comment was
sound, we attempted to refine our report appropriately. When we judged the
comment was not sound, we made no changes. I want to emphasize that we (and not
our clients) determined whether and how we responded to every specific comment.
32 Given that this was the procedure that was followed and that this
procedure is common, we were surprised and distressed that "tampering" was
mentioned. This we consider an extremely important matter because had it
occurred, it would reflect adversely on our professional integrity.
Accordingly, we appreciate the opportunity to respond to the points raised in
your letter.
33 It is our view that the February 1 draft is superior to the January 24
draft because we were able to refine the earlier draft in response to numerous
thoughtful comments. Hence, we would characterize our report as having been
"refined" or "changed for the better" but not as having been "tampered with."
Further, please note that the February document is also a draft, and the
analysis is still proceeding.
33 Point #1
33 You asked us to explain: "Why the production figures and other
assessments made in the January 24th report were changed in the February
report."
33 Our report contains a great deal of "production figures and other
assessments." Most of these were not changed at all between the Janauary 24 and
February 1 drafts.
33 Some were changed in response to the comments we received, where we
judged the comments were sound. Such changes are described in a memo we
prepared for our clients (which is attached to this letter).
33 Point #2
33 You asked us: "Who specifically made these changes?"
33 ICF made all the changes. All were authorized by myself as director of
the study.
33 In some cases, reviewers took the trouble to suggest specific language
changes. When we agreed with the thrust of the comment, we considered including
the specific language. In most cases, we re-edited the suggestions. The final
versions of the draft report were edited exclusively by ICF and represent our
best effort and judgments as of the date of the report.
33 Point #3
33 You asked us: "what data did those who made the changes rely upon to
justify the changes?"
33 We relied upon what we believed to be the best data available and our
best judgments. In some cases and particularly for the estimates of the effects
of the provisions relating to alluvial valleys and surface owner consent, the
best data available are not very good.
33 We made this point clearly in both draft reports. Further, the
specific data and assumptions are thoroughly documented in both draft reports.
The attached memo describes which of our assumptions changed and why.
34 Point #4
34 You asked us: "Is it your normal practice to submit your
recommendations to a federal agency and then change your recommendations based
upon input from the contract agency?"
34 Neither draft report contained recommendations. The purpose of the
reports was to present the findings of an analysis assessing the potential
impacts of H.R. 13950. As analysts, we leave the value judgments that would be
associated with any recommendation to elected and appointed government
officials.
34 It is normal practice to have our draft reports reviewed by
knowledgeable professionals. We try to conduct our analyses and report our
findings in such a way that there is no need to change our analytic findings.
However, when we judge reviewers have a good point, we respond in an effort to
produce the best possible report.
34 Please note (as described in the attached memo) that none of our
summary conclusions changed between the two drafts. There were numerous text
changes (in an effort to increase readability, clarity, and objectivity) and a
few specific numerical estimates changed. However, none of the major points
changed.
34 Point #5
34 You asked us: "Which impact figures does ICF stand on - the January
report or the February Report - and please explain?"
34 We believe that the figures presented in the February report are more
sound than the figures presented in the January report.
34 However, I want to emphasize that the February report is also a draft
and that further work is being done. Most of this further work is focused on
extending the analysis (e.g., testing the effects of alternative assumptions,
analyzing potential financing problems for small mines), rather than on refining
the analysis. Yet, we would carefully evaluate and further responsible comments
we receive.
34 Again, I appreciate the opportunity to respond to your questions. I
would be pleased to answer any further questions you might have.
35 @%United States Senate @%COMMITTEE ON @%INTERIOR AND INSULAR AFFAIRS
@%WASHINGTON, D.C. 20510 @%9 February 1977 @%Mr. Don Klein @%ICF, Inc. @%1990 M
Street, N.W. @%Suite 400 @%Washington, D.C. 20036 @%Dear Mr. Klein:
35 On 7 February, 1977, during a hearing held by the Subcommittee on
Minerals, Materials and Fuels on S. 7, the Surface Mining Control and
Reclamation Act of 1977, Senator Hatch raised certain questions about a report
entitled "Energy and Economic Impacts of H.R. 13950", which was submitted by
ICF, Inc., to the Council on Environmental Quality and the Environmental
Protection Agency under Contract No. EQ6AC016.
35 Senator Hatch referred to differences in the coal production loss
estimates calculated from the alluvial valley floor provisions of H.R. 13950,
between the initial ICF draft report dated 24 January and the final draft report
dated 1 February, 1977.
35 We would appreciate it if you would explain what the differences are
and why ICF changed the estimates in the initial draft. Did any employee of the
Federal Government direct ICF to change the estimates? Your response will be
inserted into the hearing record.
36 @%ICF INCORPORATED 1990 M Street, Northwest, Suite 400, Washington,
D.C. 20036(202) 785-3440 @%February 18, 1977 @%Senator Lee Metcalf @%Chairman,
Subcommittee on Minerals, Materials and Fuels @%Committee on Energy and Natural
Resources @%1121 Dirksen Senate Office Building @%Washington, D.C. 20510 @%Dear
Senator Metcalf:
36 Mr. Daniel E. Klein, Project Manager of our surface mining reclamation
study, has given me your letter concerning our draft report (of January 24, 1977
and February 1, 1977) entitled Energy and Economic Impacts of H.R. 13950
submitted to the Council on Environmental Quality and the Environmental
Protection Agency under Contract No. EQ6AC016. He did so because I am the ICF
Director in charge of this study.
36 General Comments
36 As I am sure you understand, it is common practice for government
agencies to solicit comments on draft reports prepared by contractors. This
review procedure is common in academia and most professional research efforts as
well. We think this is a good procedure because it gives those who prepare the
reports (like ourselves) the benefit of experience and expertise that is not
available in any one organization. We welcome such reviews because they
generally help to improve the quality of our products.
36 This practice was followed for our analysis of the impacts of H.R.
13950. The purpose of the January 24 draft was to solicit comments from our
clients and other knowledgeable professionals. Of the numerous comments
received, most were obviously based on thoughtful and careful review.We
considered each comment carefully. When we judged the comment was sound, we
attempted to refine our report appropriately. When we judged the comment was
not sound, we made no changes. In no instance was any compromise made to the
analytical integrity of our report in order to effect findings which would
appear politically desirable. No changes were made which would distort or
conceal substantive points. No omissions of previously-analyzed issues were
made. No changes were made which would impart a partisan tone (either for or
against) to the discussion. It was we (and not our clients) who determined
whether and how we would respond to each specific comment.
37 Given that this was the procedure that was followed and that this
procedure is common practice, we were surprised and distressed that questions
concerning differences between our January 24 and February 1 drafts were raised
during the Subcommittee hearing on February 7th. This we consider an extremely
important matter because we understand the tone of these questions reflected
adversely on our professional integrity. Accordingly, we appreciate this
opportunity to respond to the points raised in your letter.
37 It is our view that the February 1 draft is superior to the January 24
draft because we were able to refine the earlier draft in response to numerous
thoughtful comments. Hence, we would characterize our report as having been
"refined" or "changed for the better" but not as having been "tampered with" or
"laundered."
37 Further, please note that none of the summary findings and/or
conclusions changed between the two drafts. The changes were limited to
refining a portion of two sets of numerical estimates (in each report we
suggested that specific numbers should not be given undue emphasis) and to
making numerous editorial changes.
37 On February 10, 1977, we prepared a memorandum for our clients (CEQ and
EPA) which details the modifications we made between the interagency review
version of January 24, 1977 and the Draft Final Report released February 1,
1977. A copy of this memorandum is attached. Further, please note that the
February document is also a draft, and the analysis is still proceeding.
37 Below, we respond to specific points raised in your letter.
37 Alluvial Valley Floor Provisions
37 You asked us to explain the difference between the two draft reports in
the coal production loss estimates associated with the alluvial valley floor
provisions of H.R. 13950.
37 The alluvial valley floor production impacts estimated under the low
and moderate production impact scenarios were not changed. Further, the reserve
base impacts were not changed. The changes were confined to the "worst case" or
"high impact" production estimate.
37 The "worst case" estimates for the alluvial valley floor provisions of
the January 24 draft were retitled as "high impact" estimates in the February 1
draft. This change was made for two reasons. First, it was argued by some that
"worst case" implied that we opposed such an outcome; whereas others might see
such an outcome as desirable. In keeping with an apolitical approach, this term
was changed to a more neutral "high production impact."
37 Second, it was argued by some that our worst case estimate was the most
extreme case imaginable - that every mine having alluvial valley floors within
the lease area would be impacted. These reviewers were concerned that we were
biasing our findings by using such an extreme case. We responded to this
argument because it is clear that the joint probability of every such mine being
impacted is extremely low. A "high impact" estimate need not include the most
extreme case imaginable, but can reflect reasonable probability judgments.
38 In the interagency review draft of January 24, the "worst case"
production impact was estimated by assuming that all new production capacity
from mines having any alluvial valley floor area within the lease tract would be
impacted (delayed, revised, or curtailed). This assumption had the effect of
impacting about 70 percent of new western production and existing Montana
production. Based upon comments generated during the interagency review and a
re-examination of our interviews with western coal producers (fully documented
in Appendix F), we decided to modify this assumption for the high production
impact estimates in the February 1 Draft Final Report.
38 Some of the comments from interagency reviewers and the producers noted
that many of the new mine sites would not likely encounter permitting problems
because the mine a) would be far removed from the valley floor (e.g., where a
ridge might separate the mine from the area where the lease tract overlapped an
alluvial valley), b) would have negligible impact, and/or c) would affect an
alluvial valley floor which was of poor water quality or otherwise unproductive.
For reasons such as these, our moderate impact estimates are about 15 percent of
planned production from mines having alluvial valley floors in the lease tract.
Importantly, it is the moderate impact scenario that reflects (1) what we
believe would happen if the bill were interpreted in a manner we believe is
consistent with the apparent intent (as reflected in the statutory language or
Committee Report), and (2) our best judgments based upon existing data.
38 Accordingly, it was reasonably clear that a high impact estimate should
be greater than the moderate impact estimates but less than one hundred percent
of production from all mines having alluvial valley floors within the lease
tract.However, we had essentially no data to indicate where within these bounds
the high estimate should fall. For the February 1 report, we assumed that
one-half of such production would be impacted. The effect of this revised
assumption was to reduce the high production impact scenario by one-half. In
all cases, the data (and lack thereof) and assumptions are fully documented in
the report.
38 Due to the substantial uncertainties associated with estimating these
impacts, we believe that no undue emphasis should be attached to any specific
number or set of numbers. This was noted in the second paragraph on page one of
our report:
38 "In several parts of this analysis, complete and accurate data did not
exist. Further, the methodologies developed were often only approximate in the
accuracy of the results rendered. Accordingly, the findings of this analysis
should be interpreted; no undue weight should be given to any particular
number."
39 In the case of the alluvial valley floor provisions, the point being
made was that there is a wide range of potential impacts (associated with both
data uncertainty and varying interpretations of the language of the bill)
ranging from zero to some very large numbers. This point did not change at all
between the interagency review of January 24 and the Draft Final Report of
February 1, 1977.
39 Report Preparation Responsibilities
39 You asked: "Did any employee of the federal government direct ICF to
change the estimates?"
39 No. All changes were made by ICF, and all were authorized by myself as
Director of the study. Indeed, even if we had received such direction, our
professional ethics would have precluded us from following such direction, if it
would have meant our reporting an analytic finding that did not represent our
best judgment.
39 In some cases, reviewers took the trouble to suggest specific language
changes. When we agreed with the thrust of the comment, we considered including
the specific language. In most cases, we edited the suggestions prior to
inclusion in the report. In those instances where we judged that the review
comments did not contribute to the substance and/or appeared to be political at
the expense of the analytical integrity, such comments were rejected. The final
version of the draft report was edited exclusively by ICF and represents our
best effort and judgments as of the date of the report.
39 Numerous changes were made between the January 24 interagency review
version and the February 1 Draft Final Report, in response to what we considered
to be valid reviewer comments as well as continuing analysis by ICF. As
detailed in the attached memorandum, there were essentially three types of
changes made:
39 (1) text changes, in order to improve readability and clarity, and to
impart a more neutral tone to the analysis,
39 (2) the alluvial valley floor high production impact scenario, where
all data and assumptions are fully documented, and
39 (3) the reserve base impacts of the surface owner protection
provisions, where all data and assumptions are fully documented.
39 It is important to note that throughout our study we have fully
documented the data and assumptions underlying the impact estimates. Thus, any
changes in impact estimates can be related directly to changes in underlying
assumptions, where such changes are based upon what we consider to be
analytically sound judgments.
40 The Draft Final Report which we submitted on February 1, 1977
represents our best analytical judgments at this time. Still, we must note that
it is a draft report , and is subject to further modification as additional
reviewer comments are received. Should new evidence be presented which
convinces us that further modifications are warranted, further modifications
will be made and the assumptions clearly documented. As stated in the Preface
to the report,
40 "This draft is being distributed for purposes of review and
comment.Further work is being conducted. Refinements are underway.
Constructive comments are welcomed."
40 Again, I appreciate the opportunity to respond to your questions. I
would be pleased to answer any further questions you might have.
40 Sincerely yours,
40 C. Hoff Stauffer, Jr.
40 Chairman of the Board of Directors
40 CHS, Jr.: cdw
40 Attachment
41 @%United States Senate @%COMMITTEE ON @%INTERIOR AND INSULAR AFFAIRS
@%WASHINGTON, D.C. 20510 @%24 February 1977 @%Mr. C. Hoff Stauffer, Jr.
@%Chairman of the Board of Directors @%ICF, Incorporated @%1990 M Street, N.W.
@%Suite 400 @%Washington, D.C. 20036 @%Dear Mr. Stauffer:
41 Thank you very much for your 18 February letter concerning your draft
report entitled, Energy and Economic Impacts of H.R. 13950.
41 Your response completely clarifies the matter as far as I am concerned.
It will be made a part of the official hearing record.
41 Thanks again for your cooperation.
41 Very truly yours,
41 Lee Metcalf
41 Chairman, Subcommittee on
41 Minerals, Materials and Fuels
42 Senator METCALF. I want to say, Senator Hatch, that even though we
went ahead with the hearings and the markup of the bill - as you know, before
the bill was reported - an attempt was made to give you the hearing which I
promised and this matter will be made a part of the record. We will put it in
the Congressional Record so that it will be part of the whole material on the
bill, if you desire to do so.
42 Senator HATCH. I appreciate that. And to clarify that matter, I was
called at the last minute, right before the recess, as I recall, and really
couldn't make that meeting. So I kind of felt like - that wasn't your fault.
You have done everything you can to give me a hearing in this matter, and I
think that that is only fair because, as you know, I am not sure what side I
should be on in this particular thing, but I do want to make sure that these
discrepancies are explained so that the people at least feel that they have had
an adequate review of this matter.
42 Let me just start in, Mr. Stauffer, your letter to me indicates that
the purpose of the January 24 draft was to solicit comments from your clients
and other knowledgeable professionals. How were you able to obtain such
astute comments in just 3 to 4 days that would provide more information than had
just been brought out in more than 4 months of review that supposedly went into
the January 24 version?
42 Mr. STAUFFER. Why, our contract had been set up such that we would
deliver a report for interagency review on January 24 and had been set up far in
advance and the other - not only had we been notified, but the other agencies as
well.
42 Similarly, it was understood by all, including us, that we would turn
that around in a week and produce a draft final report for distribution on
February 1. So we knew that we were going to do that. The other agencies knew
we were going to do that.
42 We distributed the report as in the time frame and in the schedule on
the 24th. The other agencies were given - I forget - I think it was 3 days,
possibly it was 2 days to read it.
42 We had a large meeting over at the new Executive Office Building where
they all came with us and provided their comments orally. They subsequently
provided additional oral comments, and I believe some written comments.
42 Senator HATCH. Who was at that meeting?
42 Mr. STAUFFER. This may not be exhaustive, but our clients, CEQ and EPA
were there, OMB representatives were there, TVA was there, the Bureau of Mines
was there, and I think another office in Interior.
42 It is not clear to me exactly how Interior was there.
42 Senator HATCH. Who represented the CEQ?
42 Mr. STAUFFER. CEQ? Barry Flamm was there. Janie Markley was there.
Jim Jameson was there. There may have been others.
42 Senator HATCH. Anybody from the President's staff there?
42 Mr. STAUFFER.No. 1, I am not sure what you mean by the President's
staff -
42 Senator HATCH. Anybody from the Executive Office of the President.
42 Mr. STAUFFER. CEQ and OMB are in the Executive Office.From the White
House Staff - I don't think I know those people.
42 Senator HATCH. Anybody from the White House, were they there?
43 Mr. STAUFFER. One, I don't think that I know those people; and two, I
don't think so.
43 Senator HATCH. What about Kathy Fletcher and her part in the report?
43 Mr. STAUFFER. I have never met or seen the girl.
43 Senator HATCH. Did she have any input into this particular report?
43 Mr. STAUFFER. I did not talk to her. Did you talk to her?
43 Mr. KLEIN. No.
43 Mr. STAUFFER. Neither of us talked to her. It is my understanding
that she did talk with our clients.
43 Senator HATCH. It is your understanding that she did talk to your
clients, and that is CEQ and EPA?
43 Mr. STAUFFER. Right.
43 Senator HATCH. So she did have some input through them?
43 Mr. STAUFFER. Right.
43 Senator HATCH. Who were your main contacts with CEQ?
43 Mr. STAUFFER. Barry Flamm was the technical project officer and Janie
Markley was the person that we had the most contact with.
43 Senator HATCH. But you had it with Janie Markley and Barry Flamm?
43 Mr. STAUFFER. Right.
43 Senator HATCH. EPA, who were your chief contacts?
43 Mr. STAUFFER. Jim Speyer, primarily, and Jim Ferry, who has since
left.
43 Senator HATCH. Now, I notice, though, that you filed an interim report
on September 9, 1976 prior to the January 24, 1977 report and it was quite a
substantial report and it asked comments at that time of the various agencies;
is that correct?
43 Mr. STAUFFER. What?
43 Senator HATCH. Interim report, wasn't that distributed to the various
clients you have had with the Federal Government?
43 Mr. STAUFFER. What is the title of that, sir?
43 Senator HATCH. The title is "Interim Report Analysis of Surface Mining
Reclamation."
43 Mr. STAUFFER. We believe that was distributed to a couple of agencies.
The most discussion that we had on that was from the Economic Analysis Office of
EPA.
43 Senator HATCH. So the first time that you submitted anything for
general discussion was the January 24, 1977 report?
43 Mr. STAUFFER. Before, well -
43 Senator HATCH. For comments.
43 Mr. STAUFFER. I don't want to be misleading, sir. Starting from the
end, the February 1 report was meant for general distribution to whomever wanted
it. That meant it was going -
43 Senator HATCH. Let's go back and let's do it chronologically. The
September 9 report, which is called the interim report and is entitled "Analysis
of Surface Mining Reclamation Provisions."
43 Mr. STAUFFER. I think it is a methodology document. I don't think
that there is any analysis in there.
43 Senator HATCH. It says here it was submitted to Council of
Environmental Quality, contract No. EQ6AC016.
43 Mr. STAUFFER. I have no doubt that it was.
44 Senator HATCH. Was this the first document that you prepared for the
clients in this matter?
44 Mr. STAUFFER. No, I don't think so.
44 Senator METCALF.Will the Senator yield?
44 Senator HATCH. Yes.
44 Senator METCALF. Are you familiar with the report about which he is
inquring?
44 Mr. STAUFFER. Well, we think so.
44 Senator METCALF. Would you like to take a look at it?
44 Senator HATCH. I would be happy to give it to you. It has got your
ICF, Inc. bingind on it.
44 Mr. STAUFFER. I know that it is mine.
44 Senator HATCH. You know that it is your report.
44 Mr. STAUFFER.I will bring it right back to you.
44 Senator HATCH. You can keep it there with you for the time being.
44 And you feel free to comment anytime that you feel like it.
44 Mr. KLEIN. If I may elaborate on this report -
44 Senator HATCH. Could I have your name, again?
44 Mr. KLEIN. My name is Daniel E. Klein and I am a Senior Associate at
ICF, Inc.
44 Early in the contract phases, there were a series of memorandums and
short reports which were necessary to develop the framework by which we pursued
our analysis of H.R. 13950. The report which you have just given us, the
Interim Report, is a full description of the methodology by which we chose to
analyze this particular piece of legislation.
44 Senator HATCH. Does it give any of your analytical conclusions or any
other information in that report?
44 Mr. KLEIN. No. There are no analytical conclusions I know of. It
shows much of the data that we have used.
44 Senator HATCH. Prior to January 24, 1977, did you give out any other
reports upon which you requested comments from your clients and other agencies
of the Federal Government, or anybody else for that matter?
44 Mr. STAUFFER. There was one large report from which we requested
comments from our clients.
44 Senator HATCH. What date was that, approximately? Do you know?
44 Mr. STAUFFER. That was approximately January 10 and then there were
numerous memorandums and so forth between September 9 and January 10 because we
were continually updating the clients on what our analysis was showing.
44 Senator HATCH. But the first draft of the report - the final report
was really the January 24, 1977 draft; is that correct?
44 Mr. STAUFFER. I want to be clear about that. No. I wouldn't say that
that is true. That report was prepared for distribution to the other agencies -
for interagency review. We prepared a January 10 draft for our clients.
44 Senator HATCH. Which was for comments also?
44 Mr. STAUFFER. Which was for comments by our clients.
44 Senator HATCH. Would that have been the first draft that was prepared
for comments?
44 Mr. STAUFFER. That would have been the first full draft of the entire
report.
45 Senator HATCH. After that time you had a lot of interagency exchange?
45 Mr. STAUFFER. I beg your pardon?
45 Senator HATCH. After that time you had a lot of interagency exchange
between the agency and your consulting firm?
45 Mr. STAUFFER. That is right.
45 Senator HATCH. Then from the earliest one for general comments from
the interagency groups, that would have been January 10?
45 Mr. STAUFFER. No.
45 Senator HATCH. That would have been January 24?
45 Mr. STAUFFER. Yes.
45 Senator HATCH. At any time, did you request any comments or any
information from the industry itself?
45 Mr. STAUFFER. Yes.
45 Senator HATCH. And did you receive any responses from industry?
45 Mr. STAUFFER. The one that is clearly documented in our report is we
contacted by telephone 19 producers in the West concerning the impact of
alluvial valley provisions.
45 Senator HATCH. How many producers are there? Do you have any idea?
45 Mr. STAUFFER. I expect that there are more than 19.
45 Senator HATCH. That is what I thought.Would there be considerably more
or just a few more?
45 Mr. STAUFFER.What do you think Mr. Klein?
45 Mr. KLEIN. Let me elaborate on that. The companies that we contacted,
the 19 companies, are companies who are in the process of developing new
capacity in the West. The existing mines in the West, as we interpret the
provisions of H.R. 13950 would be grandfathered from the application of that
provision.
45 From the Bureau of Mines, there was a list of approximately 70 to 100
planned projects in the West. The EPA's Denver Regional Office did aerial
flyovers of virtually all of those sites and mapped out the alluvial valley
floors in each of the lease areas. We analyzed their findings and we correlated
that with data on production and our own knowledge of which mines were in what
stages of planning.
45 From that we developed a list of 19 mines which we could see as being
potentially impacted just on the basis of some very broad data.We contacted each
and every one of those to gather more specific data for developing our findings
that are documented in our report.
45 Senator HATCH. Did you contact the other mines across the country?
Because this bill applies to all strip mining throughout the country, as I
understand it.
45 Mr. KLEIN. We relied on data collected by a mining engineering
consulting firm in Harrisburg, Pa., that was collected for EPA under a separate
contract. And that contract collected specific data, financial and operating
and geologic data from 24 mines or 25 mines, I think, in the Applachian States,
and we used that in our report as well.
45 Mr. STAUFFER. Although "rely" is a little heavy. We used that data,
but I don't want to mislead you into having you believe that it was a very
important part of our data base. It was a part, but not a large part.
46 Senator HATCH. I see. So that actually the first real dissemination
for comments was January 10th and the next dissemination for comments was
January 24th, 1977.
46 Mr. STAUFFER. January 24th was the first - and concerning our findings
- was the first large dissemination for comment to other than our clients.
Throughout the fall we were meeting and sending memorandums to our clients.
46 Senator HATCH. Right. And January 24th was the first you had an
interagency comment review request?
46 Mr. STAUFFER. Yes.
46 Mr. KLEIN. Senator Hatch, may I read from our contract? n1
46 n1 The section of ICF's contract concerning "Work Sequence and Reports"
appears on p. 65.
46 Senator HATCH. I am not too concerned about that. I will accept your
statement naturally. But the clients asked you to, from January 24, take 1 week
to present your final draft which was your February 1 draft, your final draft
report.
46 Mr. STAUFFER. Yes.
46 Senator HATCH. Which clients were those? EPA and CEQ?
46 Mr. STAUFFER.Right.
46 Senator HATCH.And which people particularly said you had to do your
interagency comment review in really what appears to me to be about 3 days?
46 Mr. STAUFFER. That is right. We were working very hard. It was Barry
Flamm as the technical project officer at CEQ and he was working closely with
Jim Speyer at EPA.
46 Senator HATCH. Let me ask you this. Didn't you fellas say to Mr.
Flamm that 3 days - really, the time from January 24, when we delivered our
first - the final draft report to CEQ and EPA and all the other agencies that
you felt were involved or would be interested in some kind of review of the
matter, didn't you say to Mr. Flamm that 1 week just isn't enough to get agency
review and get the comments back and to make the final conclusions that we need
to make?
46 Mr. STAUFFER. I am not sure that we said that. I am sure, as I always
say in these circumstances, if that is what you want to do, I will try to do it.
46 Senator HATCH.Didn't that seem a little odd to you, that they wouldn't
give you a little bit more time to be a little bit more professional and a
little bit more accurate in your final report?
46 Mr. STAUFFER. It is not a final report.
46 Senator HATCH. Well, your final draft report.
46 Mr. STAUFFER. It was a final draft report for distribution.
46 Senator HATCH. You are saying that your final report isn't in even
though we reported this bill out?
46 Mr. STAUFFER. The final report has not been submitted.
46 Senator HATCH. Do you think that your final report will vary
distinctly or drastically from the final draft report of February 1, 1977?
46 Mr. STAUFFER. As of this time I have no reason to believe that it will
vary dramatically or in any way except editorially.
47 Senator HATCH. Now, you are aware, are you not - well, let me ask you
this: Do you believe that the Department of the Interior Secretary Andrus and
the Federal Administrator, Mr. O'Leary - do you believe that they both were
aware of the January 24, 1977 report?
47 Mr. STAUFFER. Well, Dan says their agencies were - I really have no
idea.
47 Senator HATCH. You don't know whether they personally were aware, but
certainly their agencies were.
47 Mr. KLEIN. The FEA and the Department of the Interior were part of the
interagency review group.
47 Senator HATCH.So they received this copy of the January report?
47 Mr. KLEIN. They received copies of the January 24 report from both
agencies and submitted comments to us for inclusion in our February 1 draft
final report.
47 Senator HATCH. I presume that you presume that the agency heads knew
about those reports?
47 Mr. KLEIN. I have no way of knowing.
47 Senator HATCH. You are aware of the fact - are you aware of what
happened in these hearings, that when I brought out President Ford's veto
message and listed four of the dramatic impacts on this legislation - when he
vetoed the bill back in 1975, then O'Leary held up your February 1, 1977 - the
final draft report - and said there aren't really any significant impacts, in
essence. That this report shows that.
47 Are you aware that he did that?
47 Mr. STAUFFER. Speaking for myself, I was not aware of that.
47 Senator HATCH. Are you aware that Mr. O'Leary and Mr. Andrus both
appeared absolutely shocked when I finally raised the January 24 report, just
1 week earlier, that was called the final report, and pointed out what were
apparently - at least to me apparently - very distinct differences and I think
interesting differences between the two reports.
47 Mr. STAUFFER. I knew you had pointed out differences. I did not know
or do not know whether they were shocked or whatever.
47 Senator HATCH. Let me assure you they were shocked. n2
47 n2 The point is expounded in a May 31, 1977 letter from ICF which
appears on p. 66.
47 Senator METCALF. Haven't you been provided with a transcript of the
hearing of that day when Senator Hatch got the report?
47 Senator HATCH. You should have been.
47 Mr. KLEIN. Nothing was provided to us regarding the hearing other than
letters from each of you.
47 Senator HATCH. Do you know what these hearings were about?
47 Mr. STAUFFER. We do.
47 Senator METCALF. Just a moment.
47 Mr. STAUFFER. This may be indicative of the way that we work. We
really try not to be too involved in the political process. We are analysts
serving our clients on analytical matters.
47 Senator METCALF. I am told by the staff, Senator, that they were not
sent a transcript. That is my fault. I shuld have - in accordance -
47 Senator HATCH. I don't think that that is your fault. I think maybe
that is staff's fault. I am not sure. You have got too many things to worry
about.
48 Senator METCALF. You should have been provided with it. And, of
course, our letters are self-explanatory and I am sure that they raised the
questions that the Senator is raising.
48 Senator HATCH. The thing that bothers me is that O'Leary held your -
the final draft report, February 1, up as real reason and really a final report
justifying this Federal strip mining bill. And that was his justification of
it. And he held it up right there as really a final report and said this is the
reason. He said don't worry about - in essence, don't worry about President
Ford's veto message. It was a veto message and expectedly would be harsh and
then raise this report to show that we should worry about it. n3
48 n3 These points are expounded in a May 31, 1977 letter from ICF which
appears on p. 66.
48 Now, I raised the January 24 report and pointed out the discrepancies
and they were shocked and they didn't know what to say and then I accused
somebody of doctoring these reports because of the discrepancy and I think -
well, let's go into those in a few minutes - but I think that you might realize
that I was pretty sincere in saying that.
48 Mr. STAUFFER. I am sure that you were.
48 Senator HATCH. Let's go a little bit further here. This study took
place over what duration of time?
48 Mr. STAUFFER. I think it started June 1976.
48 Senator HATCH. So really a 9-month period almost?
48 Mr. STAUFFER. That is right.Although the - over the summer the
engineering firm Dan mentioned was really doing most of the work and we were
waiting for them to finish. Our effort started in earnest about September.
48 Senator HATCH. OK. So really 6 to 9 months. Over that period of time
the figures in the final draft report dated January 24, 1977, did not really
change. They were basically the same during that complete period of time?
48 Mr. STAUFFER.No. Most of the figures in the January 24 draft - in
terms of the findings, if not the data - weren't even developed until December
or January.
48 Senator HATCH. But, in any event, you gradually developed those
figures up to the point where you had figures that you thought were accurate -
at least accurate enough to disseminate to every Federal agency involved
concerning the January 24, 1977, report?
48 Mr. STAUFFER. I would classify them as not being misleading. As we
continually say in this report, neither the data nor the methodology we were
able to develop lend themselves to precision.
48 Senator HATCH. I think you would admit that that was the January 24
report, you thought that those were the best available data figures.
48 Mr. STAUFFER. That we could develop, which is not to say we wanted to
overplay and say that that is absolutely right.
48 Senator HATCH. These are estimate figures and we are not trying to say
that they are absolute figures, but they were the best that you could develop up
to January 24, 1977; is that not correct?
48 Mr. STAUFFER. That is right.
49 Senator HATCH. All right. And in that particular time you had
developed those figures based upon interagency review with CEQ and EPA; right?
49 Mr. STAUFFER. Right.
49 Senator HATCH. And your main contracts there were Barry Flamm and Mr.
Speyer and you are aware that Kathy Fletcher had some input through CEQ and/or
EPA? Is that right?
49 Mr. STAUFFER. Yes. Although the only time that I was aware of
Fletcher having input was in January.I don't think that she had inputs prior to
that.
49 Senator HATCH. But you are saying right before the final. Was this
after the report of January 24, 1977, that she had her input or was it before
January 24, 1977?
49 Mr. STAUFFER. I apologize. I don't really know.
49 Senator HATCH. But it could have been after the January 24 report and
between and during that 1 week time between January 24, 1977 report and the
February 1, 1977, report?
49 Mr. STAUFFER. It could have been. It could have been before, too.
49 Senator HATCH. And you were aware that her input was put into Barry
Flamm and/or Speyer?
49 Mr. STAUFFER. It was put into those agencies. I don't know whom she
talked to personally.
49 Senator HATCH. Who told you that she had some input into this matter?
49 Mr. STAUFFER. We can't be specific.It could have been Jim Speyer. It
could have been Barry Flamm. It could have been Janie Markley.
49 You know, it is not something that concerns us very much.
49 Senator HATCH. Actually Ms. Fletcher wasn't part until after the
President was sworn in -
49 Mr. STAUFFER. Once again, you are asking me about a person I haven't
met and I don't know of well.I believe that her former position was with a law
firm in town or something.
49 Senator HATCH. So you were aware that she became a Presidential
assistant as of, actually, January 20, 1977? So that it is very unlikely that
she had her input before January 24, 1977.
49 Mr. STAUFFER. Possibly.
49 Senator HATCH. Do you know anything about her credentials? Is she a
student in this area? Does she understand the quality of environmental
considerations in this area?
49 Mr. STAUFFER. I know very, very little about her credentials.
49 Senator HATCH. How would you categorize CEQ and the people you work
with there? As very, very proenvironment or very, very probusiness in this
area?
49 Mr. STAUFFER. I would not like to use either category. The way that
they deal with us is on an objective analytical basis and their view, in my
understanding, as was ours, was this was an area where some good in-depth
comprehensive analysis could contribute to the public debate and those were the
kinds of discussions we had.
49 Senator HATCH. Did Flamm, Speyer or whoever else there was involved in
this matter - and you have indicated those three specifically with your two
clients - did they help you to rewrite the report between January 24, 1977, and
February 1 in any way?
50 Mr. STAUFFER. They provided additional comments to us.
50 Senator HATCH. Did they suggest word changes?
50 Mr. STAUFFER. Yes; I think that they did. They suggested actual
words.
50 Senator HATCH. Did you accept some of the word changes suggested by
them?
50 Mr. STAUFFER. Sure we accepted some of them.
50 Senator HATCH. I don't mean to keep cutting you off. I do this to
speed things up.
50 Mr. STAUFFER. Let me make one point.When we did accept it, it was me
sitting there saying, yes, I am willing to say that. Now, if they happened to
have scribbled on a piece of paper words I was willing to say, I wasn't going to
rewrite the sentence just to say we wrote it.
50 Senator HATCH. They were your contacts in this case?
50 Mr. STAUFFER. That is right.
50 Senator HATCH. How much were you paid for this report approximately?
50 Mr. STAUFFER. Up to that date?
50 Senator HATCH. Or up to today?
50 Mr. STAUFFER. Well, the total contract amount is $1 10,000. I think
up to that date we had been paid close to nothing simply because I hadn't sent
an invoice. Up to now I think that we have been paid about 90. I am not sure.
50 Senator HATCH. About $90,000.
50 Well, you will notice that one of the reasons, one of the things I
raised which I was very upset about was that in 1 week after all of this 6 to 9
months work and all of this collection of data and arriving at figures, they
should have been pretty accurate at that particular point, as of January 24,
1977 - in 1 week you changed with regard - well, let's take the January 24, 1977
report where it says, for example, while a moderate interpretation of the
alluvial valley floor provisions could affect four mines with an additional
production in 1978 of 12 million tons, our worst case interpretation could
impact up to 51 million tons of western production by 1978 and 211 million tons
by 1985. And yet, just 1 week later, as a result of probably only 3 days of
analytical discussion, you changed the 51 million tons and reduced it down to
25 million tons and changed the 211 million tons for 1985 and reduced it down to
104 million tons by 1985.
50 Now, what I would like to know is what figures came up in those three
days to justify those kind of changes.They seem like wholesale changes to me.
50 Mr. STAUFFER. Fine. Good. I am glad I can respond to that. Before I
respond specifically to the alluvial valley floor numbers, let me point out that
I believe in the whole report, the 550 pages - and some reporter weighed it at
10 pounds or something like that - that only two sets of numbers changed.
50 I think that that is important that there weren't wholesale changes.
There were two sets of numbers that changed.
51 Senator HATCH. You have to admit these were the most critical numbers
in this issue.
51 Mr. STAUFFER. In my opinion, I can't agree with that.
51 Senator HATCH. There isn't any other number in the report -
51 Mr. STAUFFER. I believe that you are saying that from a political
point of view.
51 Senator HATCH. No, I am not.
51 Mr. STAUFFER. In your opinion, I believe.
51 Senator HATCH. No. The most critical thing about this is the alluvial
valley floor provision. It is one of the most critical parts about this bill
and it is one of the most controversial.
51 Mr. STAUFFER. I think that it is now, although when we were doing the
report in the prior discussions and the veto focused very importantly on the
mine closings that were resulting in Appalachia.
51 Senator HATCH. Let me see if I can narrow this down to what is of
concern to me.
51 Who made the suggestions, either in staff or out of staff or both,
regardless of who they are, that you reduce those figures better than in half?
51 Mr. STAUFFER. I don't think that anybody made a suggestion that we
specifically reduce the figures in half.
51 Senator HATCH.Well, then how did you arrive at that?
51 Mr. STAUFFER. Let me be as clear as possible. Let me read the portion
of the prepared testimony.
51 Senator HATCH.What page are you on?
51 Mr. STAUFFER. It starts in the middle of page 5.
51 Between the interagency review version of January 24 and the February 1
draft final report, the assumptions used to develop estimates of the "worst
case" or "high impact" production impacts that could result from the alluvial
valley floor provisions of the bill were modified. Whereas in the interagency
review version the assumption was made that any lease area containing alluvial
valley floors would be impacted, the draft final report took account of the
extremely low probability that all of these sites would be impacted, even under
a very stringent interpretation of the bill.
51 The effect of this change in assumptions was to reduce the high
production impact estimates to approximately one-half of those presented in the
interagency review draft. The other two sets of production impact estimates
concerning alluvial valley floors, low and moderate, did not change at all.
Likewise, no changes were made in the reserve base impact estimates.
51 In the interagency review, the estimate of high production impact was
based upon very stringent interpretations of imprecise terms. Lands were not
assumed to be undeveloped range land if there was any potential for hay
production.
51 Even very small changes in water quantity or quality were assumed to be
adverse effects. Finally, it was assumed that the grandfather clause was
applicable only to presently permitted acreage, and that unpermitted parts of
the long-range mining plan would not be grandfathered.
52 Under these interpretations, the impact upon production could have been
quite high indeed. In developing a numerical estimate, we made the assumption
that any mine having any alluvial valley floors within the entire lease boundary
could be impacted. Using the aerial analysis data documented in our report,
this assumption projected about 70 percent of the future production in the
Northern Great Plains as being impacted in some way.
52 In response to comments received during the interagency review process,
we reexamined the substantive basis for this estimate. We were concerned that
the extreme assumptions we had used resulted in an unrealistically high estimate
which could be misleading.
52 We reviewed the data from our interviews with 19 western mine
operators. Some were near alluvial valley floors which contained poor quality
water or were clearly not productive. Others were located at a considerable
distance from the alluvial valley floor or had the mining area separated from
the valley floors by ridges.
52 And in still others, the actual identification of an alluvial valley
floor was questionable from geologic and hydrologic viewpoints. Hence, the
proximity of a lease to a possible alluvial valley floor clearly does not mean
that, in all cases, the mine site could impact that valley floor.
52 Based upon this review of the data which is fully documented in
appendix F of our report, we concluded that our original assumption was overly
harsh.The flaw lay in the fact that although any individual mine near an
alluvial valley floor had some probability of being impacted by H.R. 13950, the
joint probability that every mine would be impacted was extremely small.
52 Since about one-half of the mine sites covered by our interviews could
be unaffected due to the aforementioned reasons, and since one-half appeared a
reasonable estimate given the less-than-adequate data available, we prepared a
revised high impact estimate based upon the assumption that about one-half of
the new production near alluvial valley floors would be impacted.
52 Further, the "worst case" estimates for the alluvial valley floor
provisions of the January 24 draft were retitled as "high impact" estimates in
the February 1 draft.
52 It was argued by some that "worst case" implied that we opposed such an
outcome, whereas others might see such an outcome as desirable. In keeping with
our political approach, this term was changed to a more neutral "high production
impact." This new title was also consistent with our revised estimates for the
high end of the range, which were not of the most extreme case imaginable but
which reflect reasonable porbability judgments.
52 It is this particular numerical change which has been singled out for
intensive questioning. Yet as we have just explained, the modification was made
on what we believe was a sound analytical basis. In both the interagency review
draft and the draft final report, all data and assumptions are fully documented
so that the reader can understand the basis of our estimates.
52 We think it is significant to note that during the more than 3 months
this estimate has been under intense public scrutiny, we have not yet received
any comments suggesting that our estimate in the February 1 draft final report
did not represent the best possible estimate based upon the best available data.
53 It is also worth noting that the changes made had no bearing on the
conclusion drawn from the table presenting the low, moderate, and high
estimates. The conclusion is, in both drafts, that a wide range of potential
impacts, associated with both data uncertainty and varying interpretations of
the language of the bill, exists, ranging from zero to some very large numbers.
53 This point did not change at all between the interagency review of
January 24 and the draft final report of February 1, 1977.
53 Finally, we believe that this focus on a specific set of numerical
estimates is not productive. Due to the substantial uncertainties associated
with estimating these impacts, we believe that no undue emphasis should be
attached to any specific number or set of numbers. This was noted in the second
paragraph on page 1 of our report, and I quote:
53 In several parts of this analysis, complete and accurate data did not
exist. Further, the methodologies developed were often only approximate in the
accuracy of the results rendered. Accordingly, the findings of this analysis
should be interpreted; no undue weight should be given to any particular number.
53 Both draft reports make clear the substantial uncertainties regarding
the estimates associated with the alluvial valley floor provisions. We suggest
that discussions should focus on an interpretation of the range; that is, that a
broad range of potential impacts exist - and not on any specific numbers.
53 Thank you.
53 Senator HATCH. Thank you. Let's go back to my original question. Did
anybody - I want the names of the people who made this decision and who insisted
in making this decision or who suggested this decision and anybody working for
CEQ or EPA in those really about 3 days between January 24 and February 1 that
the numbers were reduced by one-half.
53 Mr. STAUFFER. I made the decision.
53 Senator HATCH. Did Barry Flamm come in and point this out to you or
suggest that the high impact approach was too tight?
53 Mr. STAUFFER.Barry Flamm made some astute comments in my opinion. He
pointed out data we had presented on January 24 report that shows that assuming
all mines on any lease touching alluvial valley floors was an extremely harsh
assumption.
53 Senator HATCH. Didn't he point that out since January 10, 1977, or
over the last 6 to 9 months while you were working on all these interagency
memoranda which were going back and forth between your clients and yourself?
53 Mr. STAUFFER. To my knowledge, he did not. No; he did not.
53 Senator HATCH. You don't think that he did? So, finally, with your -
the final draft report in that 3-day period he points out that these figures are
too high; is that correct?
53 Mr. STAUFFER. He pointed out that the assumption we used to estimate
the high end of the range on a table of three such figures was probably a little
harsh.
53 Senator HATCH. The fact of the matter is the assumption isn't overly
harsh and it could be considerably more impact than 211 million tons by 1985.
And that is true with regard to these mines.
53 Mr. KLEIN. This is an annual production rate that we are referring to.
54 Senator HATCH. Right.
54 Mr. KLEIN. The mines that we talked about that went into the moderate
impact estimates, we list what we think will be the production by year.
54 Senator HATCH. Le me tell you what bothers me, fellows. Here you are
the experts. You fellows are professionals and, as far as I understand it, you
have excellent reputations. I even have some respect for your organization.
And, all of a sudden after 6 months of work - 9 months of work, in 1 week, 3
days you meet with the agency boys and you reduce these figures by 50 percent.
54 Now, I don't have to be a U.S. Senator to stop and think that maybe
there was some agency pressure on you to reduce those figures, even though now
you are calling Mr. Flamm pretty astute in doing that. And that is after Ms.
Kathy Fletcher, who didn't even have a job with the Federal Government, comes in
after January 20 and meets with Barry Flamm or meets with somebody in these two
clients' offices. And you admit that.
54 Mr. STAUFFER. The main focus of our efforts throughout the period was
on chapters 1 through 4. These are in the chapters that end up in chapter 4
estimating the mine closings that would result from the increased cost
associated with the bill. That was the main focus of the study all along.That
is where we at ICF spent the most time. And that is what our clients were most
concerned about.
54 Senator HATCH. I hate to say this to you, but, you know, you did read
the veto report of President Ford -
54 Mr. STAUFFER. I personally did not read it. n4 54 n4 See
"Supplementary Exposition by ICF Inc.," which appears on p. 69.
54 Senator HATCH. You are aware that he listed a number of impacts among
which were impact of coal production, impact on the cost of energy, impact on
unemployment, impact on litigation. All of which you agreed to in the January
24, 1977 report.
54 Mr. STAUFFER. No. I am aware that he listed those things. I don't
think that we agreed.
54 Senator HATCH. You didn't agree with his particular conclusions from a
numerical standpoint, but you agreed that those were impacts that the strip
mining bill will have.
54 Mr. STAUFFER. Yes, of course. It will have an impact on mine closing,
but it is a matter of degree. And it will have an impact on coal prices, and it
is a matter of degree. And it will have an impact on electricity prices as a
matter of degree. I really don't think that I read the veto message. I did
read some of the staff reports behind it and although I can't quote you, I know
the impact.
54 Senator HATCH. You see what bothers me is President Ford decided on
the veto message. Andrus and O'Leary looked through the message and they said
it is a harsh message because he vetoed it. Your first report of January 24,
1977 comes out and it pretty well backs up the basic conclusions that, at least,
fr