Evaluation of the Analysis Supporting President Ford's Veto of H.R. 25, the Surface Mining Control and Reclamation Act of 1975

The rationale and methodology used by the Department of the Interior and the Federal Energy Administration to estimate the impact of the proposed Surface Mining Control and Reclamation Act of 1975 were evaluated. The analysis served as the basis for President Ford's veto of H.R. 25 on May 20, 1975. The reasons given for the veto were that: (1) coal production would be unnecessarily reduced by 40 to 162 million tons; (2) up to 36,000 people would lose their jobs; (3) the nation would be more dependent on foreign oil; and (4) consumers would pay higher electric bills.

The estimates of reduced coal production were speculative. Much of the production analysis was not supported by documentation, so the calculations could not be independently assessed or verified. Several methodological flaws existed. Employment gains which would result from the legislation were not considered when estimating unemployment. Agency documents inconsistently estimated the increased oil imports necessary to offset reduced coal production. An inaccurate British thermal unit conversion factor was used in calculating the replacement of coal with oil. The increased cost of electricity to consumers was also estimated using the incorrect conversion factor. Many of the problems identified resulted from insufficient information on coal productivity; this information should be available in the future following implementation of recent federal legislation and GAO recommendations.