Enviro groups threaten to sue West Virginia over coal reclamation bonding program

On Feb. 22, community and environmental groups sent the U.S. Office of Surface Mining notice of their intent to sue the agency if it fails to take action forcing West Virginia to secure funding to cover the full cost of coal mine reclamation.

Reclamation bonding levels have become a particular issue lately as major coal producers seek bankruptcy protection. Alpha Natural Resources and Arch Coal have West Virginia mines and both are currently working through Chapter 11 bankruptcy reorganization. Walter Energy has West Virginia operations it has agreed to sell as part of its bankruptcy case. James River Coal and Patriot Coal, both of which had West Virginia operations, were dissolved in bankruptcy some time ago, with new companies taking on those operations.

Appalachian Mountain Advocates filed the Feb. 22 notice letter on behalf of Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy and the Sierra Club.

The 1977 Surface Mining Control and Reclamation Act (SMCRA) was passed by Congress to ensure that mine owners and operators have reclamation bonding, a form of insurance, in place in case they go bankrupt and can’t pay for reclamation of mine sites. The environmental groups claim that the West Virginia Department of Environmental Protection (DEP) is undermining those guarantees and would instead pass the costs of cleaning up old coal mines on to West Virginia communities.

According to DEP’s own reports, companies holding more than 900 mining permits in West Virginia filed for bankruptcy in 2015, and more companies have filed or are expected to file this year, the club said. Yet the agency refuses to fix the its bonding program to ensure mine operators set aside sufficient funds to cover actual cleanup costs. For example, DEP refuses to take any steps to increase the size of its “Special Reclamation Fund,” which covers the State’s share of any reclamation costs when mine operators go out of business, the club said. The fund contains only $78 million, though bankrupt mine operators hold hundreds of millions of dollars of unfunded and unsecured reclamation liabilities, it added. Because of OSM’s failure to rein in the DEP, the agency continues to “blatantly and illegally” allow some coal operators to self-bond, even when they are in bankruptcy, the club said.

“Rather than protect the communities and environment threatened by the mines operated by bankrupt coal companies, OSM and DEP have decided to bury their heads in the sand,” said Liz Wiles, Chair of the Sierra Club’s West Virginia Chapter. “We need action by OSM to make sure the costs of cleaning up these sites never gets passed on to West Virginia’s citizens.”

“This has gone on too long. We have begged, pleaded and litigated since at least 1990 to make the state comply with the law. The state’s response has been to dance around the issue and make only incremental and inadequate improvements. OSM has known about the ever-expanding liabilities and issued warning letters, but has not followed through with the necessary enforcement measures to make the state fulfill its legal responsibility under the law,” said Cindy Rank of the West Virginia Highlands Conservancy.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.