Cortez Masto excludes mining royalties from reconciliation bill

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Senator Catherine Cortez Masto, a Democrat from Nevada in a bitter fight to retain her seat next year, says she has won a big victory that could boost her re-election campaign: the removal of a billion dollars from the huge social and climate spending program that would have disappeared to clean up abandoned hard rock mines.

The reason? Funding is said to come from the very first royalties imposed on hard rock mines – the kind that produces every metal, from gold and silver to iron and copper – and Cortez Masto represents one of the most popular mining jurisdictions in the world.

“It won’t be in there,” Cortez Masto told E&E News.

The first-term senator said she told Senate Democratic leaders and Energy and Natural Resources Senate Speaker Joe Manchin (DW.Va.) that the wording of the draft reconciliation regulations the House imposing hardrock mining royalties was to be removed from reconciliation. and go through “a separate process”.

Cortez Masto also said she received assurances from her party leadership that removing the language was a done deal. And Rep. Susie Lee, a Democrat from Nevada, confirmed to E&E News that it was also her “understanding” that the hardrock royalties “were going to be removed.”

The elimination of all royalties is a step beyond even the compromise proposed by the House Democrats in their bill, which reduced the payments imposed. House’s current version would provide $ 997 million in cleanup money by applying a 4 percent gross royalty on new mines and a 2 percent royalty on existing mines (Energy wire, October 29).

A spokesperson for Senate Majority Leader Chuck Schumer (DN.Y.) declined to comment on the record of this story.

With the climate portion of the reconciliation package still being negotiated, congressional and advocacy sources familiar with the talks expect Cortez Masto to succeed as will his likely Republican opponent, former Nevada Attorney General Adam Laxalt. , began to do so. attack him on the provision by qualifying it as a “mining royalty tax”.

If so, it shows just how powerful and influential frontline Democrats are in shaping the final stages of legislation. And it shows a willingness on the part of Democratic leaders and the Biden administration to accommodate these vulnerable incumbents, even if it means alienating core elements of the party.

“At a minimum, I hope the senators who protect hard rock mining realize that at a minimum they should pay royalties, so that we can clean up the mess they leave,” said the chairman of the Chamber of Natural Resources, Raúl Grijalva (D -Ariz.), who included the wording of the reform in his committee’s reconciliation proposal.

Ultimately, party leaders are eager for victories that will help their members gain the upper hand in their 2022 races. The Senate is currently split 50-50 and House Democrats only hold their majority by a margin of three members.

The bipartisan infrastructure deal also includes $ 3 billion for the cleanup of abandoned mining lands, so some funding could come out even if the royalties are removed. But without the language of reconciliation, taxpayers will be the only ones footing the bill for restoring old mines under the program.

Senator Martin Heinrich (DN.M.), a leading proponent of overhauling national hard rock mining laws and regulations, does not give up on pouring the billion dollars and royalty payments into the project of reconciliation law.

To omit it would be “a huge missed opportunity”.

“I think, until the ink is dry,” said Heinrich, “nothing is entirely certain.”

Follow “in the footsteps of Harry Reid”

Former Sen. Harry Reid (D-Nev.) Spoke to reporters last year. | Ethan Miller / Getty Images

Unlike the production of oil, gas and coal, hard rock mines pay no royalties to the federal government for their activities on public lands.

This has been the case since 1872, when Congress authorized exploration and mining on federal lands after the Gold Rush brought wealth to the western states, including Nevada. Mining is so ingrained in Nevada culture that state royalties on hard rock mines are written into the state constitution.

Wishing to protect its status as a mining hub, the state delegation in Washington has already prevented Congress from setting royalties on hardrock.

Ahead of Cortez Masto’s entry into the debate, supporters of hard rock mining reform were blocked by former Democratic Majority Leader Harry Reid (D-Nev.), Who bragged about in 2009, “While in Congress, I fought and defeated many ill-conceived reform efforts that would have harmed rural Nevada. ”

So it was no surprise to minors in the state when Cortez Masto, first elected in 2016, won in a Senate hearing last month and said she would oppose the advancement of reconciliation language in the House that would impose a gross royalty on hard rock mines.

For them, she was following Reid’s mold. “It has supported the industry,” Tire Gray, president of the Nevada Mining Association, told E&E News. “I think she has followed in Harry Reid’s footsteps very well in this area.”

Lawmakers in Democratic states had already capitulated once to the mining industry before midterm in order to avoid the question of the new royalties being sought by progressive state lawmakers during voting initiatives. Faced with opposition from the state’s largest mining companies, state Democrats have instead opted for a smaller royalty increase in legislation passed this year.

Mining is “part of the Nevada psyche in a way,” said John Hadder, director of Great Basin Resource Watch, an environmental group based in Reno, Nevada. “It’s in there, integrated. They made it part of the mystique of the state.

An “academic” problem?

Copper mine.
A view of the Bingham Canyon Copper Mine in Utah. | Rick Bowmer / Associated Press

The Democratic leaders’ concession to Cortez Masto’s demands on hard rock mining may be controversial and divide progressive activists and lawmakers, but how the decision will translate politically is unclear.

While it is “certainly true that some environmental issues find more resonance with the public and can be used to advance this progressive environmental agenda”, there are some political issues “where there is perhaps an academic conscience of the importance of solving a political problem, but not a real champion, ”said Brett Hartl, director of government affairs for the Center for Biological Diversity. “Hardrock mining falls into this category. “

Hartl said that one could compare this debate with that on banning new offshore oil drilling off the coasts of the Atlantic and the Pacific, and in the eastern Gulf of Mexico. These bans are currently included in the reconciliation bill and are likely to remain, as they have a unifying appeal among Democrats and resonate with the public.

“People are aware of the visceral damage caused by offshore drilling and oil spills in a much more real way,” said Hartl, referring to the recent massive spill near Huntington Beach, Calif. “People love the beach… no one likes to see a seal or a bird killed by oil, and it resonates because it’s something that is easy to show the environmental horror that comes with it.

Hardrock mining, on the other hand, produces “terrible giant holes in the ground and can cause devastating pollution, but the pollution is often quite localized, and it is a bit ‘out of sight and out of mind. ” for most people “.

Nicole Gentile, senior director of public lands at the Center for American Progress, said bringing more money home to clean up abandoned mining lands should actually be a salient political issue in congressional districts with a legacy of pollution from pollution. the mines. The royalties would have provided more money for the cleanups and should be “a political victory”.

“I can’t imagine a lawmaker coming home and saying he got money to clean up a Superfund site wouldn’t be applauded. This should be something to celebrate for these communities because they really got screwed, ”Gentile told E&E News.

Cortez Masto’s “motivations”

Hadder has warned that Cortez Masto obstructing hardrock royalties in the reconciliation doesn’t mean the problem will go away for her.

“She is going to have to respond to the motives of her position, whether she is supporting communities affected by mining or supporting the mining industry,” he said.

This also does not work for Laxalt. In a statement yesterday, he noted that Cortez Masto still wanted to establish some sort of new royalty for the industry as a stand-alone bill, which he would fight.

“Throughout this process, Senator Masto has proven that Nevada miners cannot be trusted to hold the line against the royalties. It has made it clear that it plans to examine them through separate legislation. Delaying royalties is not opposed to royalties, ”he said in a statement. “I will stand up for mining jobs, rural Nevada, and Washington’s reckless tax and spending policies.”

Cortez Masto’s aspirations to deal with the royalty issue as a stand-alone bill do not impress his colleagues. They see his offer to work independently of the reconciliation process as a failure given the current composition of the Senate and the reality of Republican obstructions.

Reconciliation, suggested Heinrich, represents the only real chance this Congress has to address the issue.

Of the alternative suggested approach, Heinrich said, “I don’t know where you’re going to find 10 Republicans to hold the industry accountable.”

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