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How one state unties regulatory knots for business

For many US industries, a network of government regulations seems to allow individuals to tie major energy projects in knots. So, along with the search for new energy supplies, the hunt is on for new ways to slice through regulatory knots.

Standard Oil Company of Ohio (Sohio) executive F. Harlan Flint blames the regulatory path's "one man, one veto" system for forcing Sohio to abandon its PACTEX project two years ago -- a proposed pipeline to carry Alaskan crude oil from California to Texas. Despite backing from Congress, the President, and a majority of the residents of Long Beach, Calif., the $1 billion project was scrapped when it become bogged down in litigation brought by opponents to the pipeline. Up to that point it had been proceeding on schedule.

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Currently, Amax Inc., a natural resources and mineral development company, is on schedule in establishing a mining operation in Colorado five years after discovering a rich molybdenum deposit. If future steps in this $600 million mining project stick as closely to schedule, production will begin in 1987.

The key to the pace of Amax's proposed Mount Emmons mine near Crested Butte could be Colorado's Joint Review Process (JRP).

Colorado Department of Natural Resources officials stress that the two-year-old JRP is a voluntary system to coordinate the procedures involved in launching a major project. As the JRP's own manual states, "The JRP is not a new regulatory program and does not establish new bureaucracy."

Chris Duerksen, a Washington-based Conservation Foundation official watching the Amax project closely, describes the JRP as "an industrial escort service, a broker." He feels that a similar service might have helped Sohio's PACTEX pipeline succeed.

PACTEX suffered, observers say, not because of regulations, but because various government agencies often conflicted with each other and made contradictory demands on Sohio. The JRP avoids such conflicts by laying out detailed roles for each of 36 cooperating parties, including 10 federal and 20 state agencies. Arthur Biddle, Amax project manager for the proposed mine, supplied the signature that commits Amax to keeping the general public as well as federal, state, and local officials fully informed about its plans.

The result, says Biddle, is that "better-informed government officials will make the necessary decisions better and make them sooner" -- all keyed to a week-by-week decision schedule accepted by all parties. The public benefits, he says, because "in this process we identify issues before people get polarized."

The Colorado official in charge of the JRP, Gary Fisher, reports that Amax's success has prompted other firms to ask for JRP help with their projects, including oil shale, methanol, and uranium operations.

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Says Mr. Fisher, "Most agree with the logic of the JRP of tackling the issues and public concerns at the very beginning to avoid costly delays later."

He stresses that by cooperating at an early stage, companies must make public a great deal of information that normally would remain trade secrets. Fisher explains that the process "doesn't mean guaranteed positive outcomes on the permitting procedures." But he feels the system is working and notes that 30 states have asked about JRP, with Utah and six other states now considering similar systems.

County administrator Dorothy Johnson says she believes the JRP provides an effective "sounding board" for public concerns. She stresses that Gunnison County needs to make sure that a large new mine does not disrupt the area's life style centering around its state college, ranching, and its recreation industry. But she argues that the public is able to make better decisions about future growth because the JRP is supplying a wealth of information in the consultants' reports paid for by Amax.

The Joint Review Process, however, has not drowned out all criticism. Chuck Malick, president of the High Country Citizens' Alliance in Crested Butte, argues that by doubling the county's population over five years, the mine would bring "crime, high taxes, and unemployment." He and various environmentalists also worry that Amax will forget its good-behavior promises once it secures the necessary air quality, water quality, and mining permits.

Yet even Mr. Malik concludes that Colorado's Joint Review Process "gives the public a good place to have their say and have access t o information."

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