What Does Trump Mean for Mining?

Written by Gerardo Del Real
Posted January 2, 2017 at 9:03PM

Laura is a highly respected advocate at all levels of government and has established a proven track record in successfully influencing the outcome of political dialogue, in building effective working strategies with key elected officials, in developing and coordinating the industry's response to legislative and regulatory issues, in improving the industry's public image, in effectively building coalitions with other natural resource industry groups and public land users, and in galvanizing the grass roots.

I could go on. That was a mouthful, so I'd rather you hear it from Laura herself. Laura, thank you very much for your time today.

Laura Skaer: Thank you for having me. I appreciate this opportunity.

Gerardo Del Real: Well, there's a lot going on. With the recent election now behind us and a new administration set to come in, I thought it was a really important time to get your insights as to the challenges you’ve faced with the outgoing administration and the opportunities you see to work with the incoming administration. I also wanted to hear from you the issues that you feel are most urgent for this new administration to address.

Now before we go into that, however, I'd love to know a little bit more about your background and how you got involved with AEMA.

Laura Skaer: I grew up in a oil and gas family. My father was an independent oil and gas producer. Like a lot of kids, I guess, growing up in the '50s and '60s, the last thought was going into the family business and working with my father, so I went off to college and law school and practiced law in Kansas City, Missouri, for six years, primarily as a tax attorney. It was long enough to know I didn’t want to spend the rest of my life keeping timesheets and practicing law.

It was 1979 and '80, and they were deregulating the price of oil and natural ... well, oil first ... at the wellhead. The price went from $14 to $41.00 a barrel in nine months, and all of a sudden, the family oil and gas business didn’t look so bad after all. I came out and talked with my father and made the decision to leave the law firm and go into the family oil and gas business.

One of the first things I learned was that you don’t learn the oil and gas business sitting behind a desk, and my father told me to go buy steel toe boots and work overalls and go to the field. Probably the best advice he ever gave me. Best education I've had was the ability to learn the industry from the ground up, learn how things work in the field, and it gave me an appreciation for how different regulatory and legislative policies really impacted the business and what would work and what wouldn’t work.

It was about the time that Congress had passed what they called the Windfall Profits Tax because of this sharp increase in the price of oil. It never made any sense to me. The price had been regulated and controlled by the federal government at the wellhead since the '50s, so when you take the regulation off, of course, the price is going to find where the market is. In a capitalist economy, I never thought a profit would be considered a bad thing.

But they put a tax on it, and because of my tax background, I got involved in trying to understand it, how it was calculated, and got involved in a regional and national oil and gas trade association. I started a lot advocating for the industry, and I actually helped write some tax legislation in the late '80s that gave percentage depletion and intangible drilling cost tax relief to independent oil and gas producers, to the small guys.

That was how I got involved in trade associations. I went from being chairman of a tax committee to being elected to the board of an oil and gas trade association. It was called the Independent Petroleum Association of Mountain States. It's now Western Energy Alliance. I spent about 18 months as the president. Sometimes it's difficult for family businesses to turn over control, and that happened in our case, so we sold the business to a publicly traded company. I consulted with them for a couple of years, and this is 1993 to '95.

Then it was time to go look for something else. A couple of friends and I went to Reno, Nevada, to try to take a privately-held mining company public. We were unsuccessful in doing that, but that time in Reno introduced me to some folks in the mining industry that to this day are some of my best friends. While I was in Reno and we had lost a proxy fight for control of the company, my friend told me about the job opening at the Northwest Mining Association. I read the job description, and I go, "I can do that, and they're going to pay me for what I used to do as a volunteer," so I applied and got hired.

Gerardo Del Real: That is fascinating. You’ve really been involved in all facets from boots to boardroom basically.

Laura Skaer: Yeah, I have. When I got hired, as I told them, I said, "You know, I don’t have a lot of mining background, but I got a lot of natural resource background, and mining is a lot like oil and gas. It's getting resources that the public needs, that America needs, out of the ground." I said, "Mining just makes bigger holes than oil and gas." I had good political skills, and I had some success going to Washington, D.C., but I also knew that if I was going to be a good advocate for our members, I needed to have that on-the-ground boots training in the mining industry.

So the first six months, I went underground three times, went to three open pit mines, and just tried to understand how this industry worked from the beginning to the end. Went on a couple of geologic field trips to understand what exploration geologists are looking for and some of the challenges that they face. That was all necessary to equip me to be an advocate for our members.

Gerardo Del Real: That’s a perfect segue into my next question, Laura. The AEMA represents hundreds of mining companies throughout the U.S., and it serves as the voice of the junior mining industry, which is why I wanted to have you on today. You work with government to keep a very important sector of the economy going in a way that’s fair to the mining industry but doesn’t compromise environmental worker protections. Now can you share with me just generally the toughest challenges you’ve had in working with the outgoing administration, and specifically, some of the issues that are still being worked out as we speak, because I know it's been a busy month for you.

Laura Skaer: Gerardo, this has been the most challenging administration that I have worked with, more challenging than the Department of Interior under the Clinton Administration back in the '90s, especially about the second half of his eight-year term. Early on in this administration, we got our hands on a memo that was supposed to be confidential, but obviously somebody within the Department of Interior, who was not in agreement with the direction the Obama Administration wanted to go, leaked it.

Congress got ahold of it and it became public. It was called Treasured Landscapes, and it was about how they could eliminate productive activity from the public lands and keep the public lands in the hands of ... you know, for conservation and wildlife and hunting and fishing. Oil and gas, mining, off-road vehicle recreation, grazing, those were all described in this memo as degradation of public lands.

Then we saw one policy after another that was designed to make it more difficult to access mineral deposits, make permitting more difficult, put more lands off limits, withdraw lands, change some of the policies within the Department of Interior that elevated preservation and conservation above other uses of the public lands, contrary to the directive from Congress, which was to manage the public lands for multiple uses. There's like 12 different uses they list, and one of them is to provide the energy and minerals and fiber and food that America needs. We saw that at the very beginning. It was a constant challenge.

The first two years when the administration, when the Democrats had filibuster-proof control of the U.S. Senate and a large majority in the House after the 2008 election, I guess from our standpoint it was fortunate that they spent all their focus and all their political capital on what we call Obamacare, the Affordable Care Act. They really didn’t get around to addressing some of their desires with respect to the public lands.

Then the 2010 election gave control of the House of Representatives to the Republicans, and that really provided some oversight and kind of a wall that prevented legislative changes to any of the laws that govern mining or public access, but it didn’t stop the executive orders and the unilateral administrative rule-making. So they’ve been pursuing that right up until the end, and we're seeing now that as the clock's ticking down, they're firing out one after another.

Gerardo Del Real: Yeah. Yeah, and I know there's been some recent decisions that I read here in the last couple of weeks that have been rather challenging. Can you talk about those at all?

Laura Skaer: Yeah. One of them that we've worked on since 2009 is a financial assurance issue under what's known as CERCLA. It's the United States Superfund Law.

Gerardo Del Real: Right.

Laura Skaer: There was a provision in there that required the president ... and he delegated the authority to EPA ... to take a look at industries to see if there are industries that needed evidence of financial responsibility to ensure that the taxpayer wouldn’t have to fund cleanup of hazardous waste. It came on the heels of some of the environmental problems in the '60s and '70s. Love Canal in Cleveland, Ohio, caught on fire and things of that nature. EPA was supposed to do this back in the '80s, and they had like a three-year timeframe to do it in, and they never did it until a sue-and-settle lawsuit in 2009. They started working on this and they picked hard rock mining as the first industry.

In that interval between the 1980s and 2010 to 2016, a lot changed. States enacted mine regulatory programs and financial assurance requirements. The federal government through the Bureau of Land Management and the United States Forest Service did the same thing, and so today, between the BLM and the Forest Service and the states, there's over $4 billion of financial assurance to protect the taxpayer, to ensure that mine sites get closed properly and that any environmental issues are addressed and they don’t become superfund sites.

Within that background, EPA moved forward with this proposal to require additional – duplicative – financial assurance. This has been a major effort of our association for the last six, seven years. We've pushed back really hard and we ran out the clock on them, but not quite. They proposed a rule on December 1, and it hasn’t been published in the Federal Register yet, but it's quite a problem. It would cause companies to put up duplicative financial assurance, calculated by a formula that’s kind of a one-size-fits-all.

Gerardo Del Real: Right.

Laura Skaer: Your readers are going to understand that every mine site is different, different geology, different climate, different geography. Mines in Alaska have different environmental issues than mines in Arizona and Nevada, and a one-size-fits-all formula just doesn’t work. What we've seen with a pre-publication draft of this rule is that some of the financial assurance under this rule could be as much as 24 times what companies are currently paying.

Gerardo Del Real: Wow.

Laura Skaer: It bears no relationship to reality. That is one of the issues that came out at the end. They're getting ready to release a draft environmental impact statement (EIS) on a 10 million-acre withdrawal across Idaho, Nevada, Montana, Wyoming, a little bit in Utah, ostensibly to protect habitat for the sage-grouse, which is not a listed species under the Endangered Species Act, but it's really to put more lands off limits to mineral development. That draft EIS is expected out at the end of this year.

We have a law that, at the change of an administration, it gives the incoming administration kind of a 60-day look-back from Inauguration Day, and it's based on legislative days that Congress is in session, so the new administration has the ability to suspend those rules and re-propose them and to make some changes in them. Obviously, both of those are going to be high on our to-do list for the incoming administration. I know the coal mining folks just got hit with a Stream Protection Rule that addresses them that just came out.

There's a planning rule for BLM-administered lands that just came out that attempts to eliminate the power of the states with respect to land, public land that’s in their states. That’s going to be one that we're going to address. A couple of ways of doing it, one I mentioned, the suspend and re-propose. Another is what we call the Congressional Review Act, which allows Congress to disapprove of any regulations issued in the last 90 days. It only requires a majority in the United States Senate, but it has to be signed by the president. The only time it's ever been used was when the beginning of the George W. Bush Administration when they disapproved of an ergonomics rule at the workplace.

Those are some of the tools that are available to us.

Gerardo Del Real: Now you mentioned the incoming administration and the transition. What is the strategy to engage the right people in Donald Trump's Administration to make sure that the issues that are important to the AEMA are a priority? Because there's obviously several very important decisions that were just handed down here in the past few months that obviously are a top priority, as you just laid out. How do you engage the right people in the administration? What's the approach there?

Laura Skaer: Right after the election results were in, we began compiling internally with our board and our staff a list of issues that we'd like the Trump Administration to address. We have some for the Department of Interior, some for the Forest Service, some for EPA. Some are legislative in nature, and it's been kind of a stream of consciousness list as we've been adding to it. Then we went to prioritize that list and to give some priorities. Then we separated them by what can be done with pretty much a signature and what needs public comment and notice and more of a process and what might require legislation.

Obviously, the CERCLA 108(b) financial assurance rule is at the top of the list. We put together a two-page briefing paper, and we have spoken directly to the head of the EPA transition team and provided this two-page background and action request to them. Our supporters in Congress have been engaged on that, and we have also engaged the Western Governors' Association and about five or six individual governors that are prepared to take action.

One of the things that we've done with the governors and members of Congress is for them to join us in requesting an extension of the comment period once it's published in the Federal Register so that there is sufficient time in which to get the appointees in place and make sure the information that we've provided to the transition team makes it to the hands of the appointees and the people that take over.

The way the transition works is that it's going to take some time for the secretaries and the appointments that require Senate confirmation approval. That’s just going to take some time. They have this landing team, which are people that the Trump Administration will bring into the agencies to manage the agencies and kind of herd the cats, so to speak, make sure that the career people understand there's a new sheriff in town and that this administration has different goals and views of things than the past administration. They will be in town, so we've made sure that these two-page briefing papers have made it to the key people on the transition team. Then, obviously, once more of these landing party people are identified, we will be in direct contact with them as well.

Gerardo Del Real: Fantastic. An issue that resonates with me is the horribly broken U.S. permitting process for exploration and mining. One example from recent years has been the inability to move forward important critical minerals legislation. Do you see an opportunity there to address the process, to maybe change that in a way that’s efficient but responsible?

Laura Skaer: Yes, I do. We were very close at the end of this last session of Congress to getting some permitting reform passed by Congress. It was part of the energy bill that was being conferenced between the Senate and the House, but at the end there turned out to be some unrelated issues in the bill that kept the Senate and the House from agreeing, and the effort to produce an energy bill that had critical minerals permitting reforms in it failed.

We expect to see both the Senate and the House versions of those bills introduced very soon after Congress convenes on January 3. We expect that the House will pass what they’ve labeled the National Strategic and Critical Minerals Production Act for the last three Congresses that would put a 30-month sideboard on the time it takes to approve a mining plan of operation, to permit a mine. If Canada can do it in two to three years, to the same environmental and engineering standards that we have in the United States, there's no reason why the United States can't get mines permitted in the same amount of time. And we're hopeful that we'll be able to get that.

We believe we have a new president that will sign that legislation, but there's a couple of administrative things we believe can be done. One, on the Forest Service side for the junior mining sector and the exploration companies, one of the most valuable provisions of mining regulations on BLM-managed land is what we call the Notice of Intent provision. If you're disturbing less than five acres for exploration only, you don’t have to go through a National Environmental Policy Act review, so it doesn’t require an EA or an EIS. It's not considered a major federal action. You file a notice, you describe what you're going to do, and you post your bond, and assuming that you're not causing unnecessary or undue degradation of the public lands, there's no approval process. Once you get your bond filed, you can go drill.

Gerardo Del Real: Right.

Laura Skaer: The Forest Service doesn’t have that provision, and the same project, if it was on Forest Service land instead of BLM land, could take two to three years to get a simple exploration project approved. One of the things we're going to push is for the Forest Service to adopt the five-acre notice rule for exploration like the BLM has, which would definitely help our membership.

The other thing we're going to investigate is whether the Secretary of Interior might, through a secretarial order, put some time sidebars on when they expect environmental impact statements, how long that should take and how long an environmental assessment should take. An important thing that we've learned is that when federal employees that work in these agencies come up for salary review and promotion and raises, their performance on mineral projects is not part of the grading system.

Gerardo Del Real: Huh.

Laura Skaer: We are going to work to get that corrected. What we found ... One of the reasons why it's taking so long is, especially in the Forest Service, is the district rangers ... I mean it's human nature; you're going to focus on those projects that have the best chance of contributing to a positive review-

Gerardo Del Real: Absolutely.

Laura Skaer: ... and a promotion.

Gerardo Del Real: Right.

Laura Skaer: If you’ve got these projects like mining projects or exploration projects that aren't part of your grade, well, they're naturally going to fall to the bottom of the pile. That’s one thing we can do that won't require Congress.

Gerardo Del Real: Fantastic. I'm looking forward to updates on all of those fronts and hopefully, we're able to have you back as some of that develops.

Now I'm a huge proponent that we need more women in mining, and frankly, more young people and people from all backgrounds, but I digress. Now I know that in December of 2013, you were named one of 100 Global Inspirational Women in Mining by Women in Mining U.K. Now you also have a commercial pilot's license. You're a registered lobbyist. You're a self-described rock concert junkie and love rock and roll from the '50s through today, showing that, yes, you can have your cake and you can eat it, too.

What would you say, Laura, to women or anyone, for that matter, that’s considering a career in mining?

Laura Skaer: Do it. It is a great career. I've been so blessed. God has just blessed me so much with this position and with the people that I've met in the industry. What you realize is that the people I have met in mining are of the highest character. They care about each other. They support each other. Yeah, they compete, but it's not in a negative way. They celebrate each other when there's a success. They like to share that. They're really high-integrity people.

Like I said, the reason I'm willing to go to Washington, D.C., and fall on my sword over these issues is because I believe in our members and I know that they care about the land, they care about the environment. They want to do it right. It's a great career. You will make friends for life if you come into this industry. Its high-paying. Right now, there's going to be a lot of retirements over the next 10 years, so there's a huge opportunity for young people to come into this industry and take a leadership role and to have an opportunity to really make something for themselves and to have the satisfaction of creating new wealth and providing the resources that society requires and doing it in a right way. I think it's not only an industry that pays well, Gerardo, there's a lot of self-satisfaction from working in this industry.

Gerardo Del Real: That’s excellent. Laura, I want to thank you very much for your time. Is there anything you'd like to add?

Laura Skaer: Just that there are just great opportunities for women, too, from geologist to mining engineering to working in the lab to driving haul trucks, operating heavy machinery. There's really not a job in this industry that a woman can't do. It's an industry in which women are really on an equal footing with men, and I know that’s not always the case out there.

Gerardo Del Real: I think you're the perfect example for that and the perfect advocate for it, Laura. Thank you so much again for your time. I can't wait to have you back on soon. There's obviously going to be a lot of developments here in the coming months, and hopefully, we're able to steal some more of your time here in the next month or two.

Laura Skaer: I would be happy to stay in touch with you, and I appreciate you having me on.

Gerardo Del Real: Thank you. 

To your wealth,

gerardo-sig

Gerardo Del Real
Editor, Junior Mining Monthly and Junior Mining Trader.

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.

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