- The Washington Times - Monday, December 30, 2013

The Obama administration tried to edit a report on new coal regulations to lower analysts’ estimates of serious job losses, an official investigation has found, backing up reports that the Interior Department pressured a private contractor to change information in order to make the data more acceptable.

The Associated Press and Fox News reported in 2011 that a company claimed the Office of Surface Mining Reclamation and Enforcement asked it to change variables in a calculation that showed new environmental regulations would lead to large job losses.

Several Interior Department officials were called to testify before Congress after the initial reports were released. Now the agency’s inspector general’s office has completed its investigation confirming that department personnel asked for a change.

“After the contractors determined that there would be high costs to the industry and significant job losses, newer OSM employees involved in the project asked the contractors to change a variable in the calculations,” said the report, which was released this month.

Inspector general investigators, however, stopped short of saying the agency was directly pressuring the contractor or was attempting to fudge the numbers.

The White House Office of Management and Budget, which helps oversee economic reports, said the job loss calculations were acceptable both ways — the method the contractor originally used and the way surface mining officials requested.

The controversy centers on the stream protection rule, part of federal efforts to strengthen environmental protection surrounding coal mining. Operations often clear the tops of mountains to access the coal underneath. The excess dirt and rock, known as “spoil,” often are dumped in nearby valleys that can pollute streams, rivers and other waterways.

The Interior Department explored the idea of no-dumping buffers of 100 feet around all bodies of water, though environmental analysts debated the merits of such a move. It was then that OSM hired Polu Kai Services to look at the economic impact such a regulation would have.

The company and its subcontractors initially estimated that 7,000 jobs could be lost and coal production would be affected negatively by the rules. OSM asked for another calculation with different variables, and Polu Kai Services refused. The company’s contract with the government was terminated shortly after the story was leaked to the press, causing watchdogs to cry foul.

The inspector general was not able to confirm that the termination was direct retaliation for sticking with the report’s conclusions. OSM personnel were dissatisfied with the contractor’s performance before the incident, the watchdog said.

In addition, the inspector general said it could not determine whether the job loss estimate was accurate, and there has been much debate on whether the 7,000 figure was a first guess or a valid assessment.

OSM officials maintained that Polu Kai was working on drafts of the job estimates and that the agency was asking for revisions and corrections that would portray the data more accurately.

But news that the office had asked for changes that would result in a lower estimate of job losses led to a series of congressional hearings, which included testimony by OSM Director Joseph Pizarchik before the House Committee on Natural Resources.

Sen. John Barrasso, Wyoming Republican; Sen. Joe Manchin III, West Virginia Democrat; and Sen. Rand Paul, Kentucky Republican, released a statement at the time saying the Interior Department “cannot discard the economic analysis because it does not like the results.”

• Phillip Swarts can be reached at pswarts@washingtontimes.com.

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