As attacks on EPA cool, Interior Department gets the heat

The spotlight of criticism that recently shone on the Environmental Protection Agency is slowly being turned to focus on James G. Watt, President Reagan's controversial secretary of the Interior.

Environmentalists have intensified their public complaints about Mr. Watt's actions. Congressional committees are scrutinizing the Interior Department's mineral policies.

On Wednesday, the General Accounting Office released a report charging that Watt last year sold coal leases in the Powder River Basin of Wyoming and Montana for $100 million less than they were worth - though GAO added that the underpayment wasn't entirely Watt's fault.

This latest round of attention for Secretary Watt began in earnest after the exit of former EPA administrator Anne Burford. Last month, a consortium of nine environmental groups held a joint press conference to renew demands for Watt's ouster. At the time, William Turnage, director of the Wilderness Society, confidently predicted that Watt would be gone in six months.

Since then Congress has produced several reports highly critical of some of Interior's mineral-development policies. One charges that enforcement of strip-mining regulations was far from adequate. A second, on the same subject as Wednesday's GAO study, concluded that Powder River coal leases had been sold for

''You're already seeing a shift in emphasis (of criticism of environmental policy) to Interior,'' says Norman Dean, a program director at the National Wildlife Federation.

The new GAO report will likely hurry that shift.

Last year, the Interior Department sold rights to about 1.6 billion tons of coal on government land in the Powder River Basin for $67.2 million. It was the largest federal coal lease sale in United States history.

Such sales are made through competitive bidding, and, by law, the government can't accept any bid that is less than fair market value. The Interior Department had estimated that the coal was worth about $71 million. But the GAO study says that the coal's value was closer to $170 million.

''In summary, Powder River coal sold at roughly $100 million less'' than it should have, concludes the report.

GAO also says that the shortfall was partly attributable to the ''leasing dilemma'' Interior faces, rather than any overt actions on the part of Watt.

Interior must sell ''every lease by competitive bidding,'' even when it knows that much of the coal is situated in areas where one company dominates mining activities, the study points out. The one company thus submits a relatively low bid.

The underpayment was thus caused ''by both Watt and the design'' of the leasing system, says a congressional aide.

GAO suggests Congress give Interior authority to negotiate some leases. Until the issue is settled, there should be a moratorium on new coal-reserve sales, GAO says, urging Interior to cancel some already sold Powder River leases.

Interior officials don't agree with the GAO's findings. ''Bids accepted by Interior did represent an accurate reflection of fair market value at time of sale,'' says assistant Interior secretary Garrey Carruthers. ''We have put in place a coal policy to benefit consumers, produce jobs, and enhance American security'' by allowing large amounts of coal on the market.

But a House subcommittee has already voted to ban all federal coal leasing through the end of fiscal 1983. Two lawsuits challenging the legality of the Powder River sale have been filed by environmental groups.

''Ideologically, Watt was so committed to the sale that, regardless of deficiencies in the system, he was going to press forward,'' says Rep. Edward J. Markey (D) of Massachusetts, who requested the GAO study.

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