Alpha agrees to stream repair funding – and to put some coal out of bounds to mining

The Sierra Club said July 1 that coal mine operator Alpha Natural Resources has filed in federal bankruptcy court a settlement with the Ohio Valley Environmental Coalition, the West Virginia Highlands Conservancy and the Sierra Club that directs significant funds to stream restoration and reforestation projects in West Virginia.

Under the deal, Alpha must pay an anticipated total of $7.5 million to fund land and stream restoration projects over and above the mine reclamation already required by law at mine sites in West Virginia. Out of that, $1.3 million will be paid up front when the bankruptcy plan is confirmed, with the remaining $6.2 million due over the next two years. Alpha also must provide more than $1 million of in-kind services by donating equipment time and employee time to carry out the restoration projects. These projects will be implemented by Appalachian Headwaters, a West Virginia non-profit created for this purpose. Alpha will also give up 53 million tons of coal in Westmoreland and Fayette counties, Pa., to a non-profit for the purpose of preventing that coal from ever being mined or burned.

In exchange, the groups have agreed to provide Alpha with a three-year extension to the deadlines in an existing settlement resolving an earlier Clean Water Act citizen enforcement suit against two of Alpha’s mines. The groups have also agreed to not oppose Alpha’s reorganization plan in the bankruptcy court.

“The scars that Alpha has left on Appalachia are deep and there is much more work to be done, but this is a start in reversing some of the damage Alpha and other mine operators have done to this region,”said Liz Wiles, Chair of the Sierra Club’s West Virginia Chapter. “It is essential that all levels of government and the private sector invest in the workers and the communities who have powered our country for over a century, so that they can enjoy new economic opportunities that provide long term stability. Meanwhile, we will continue to advocate for a bright future for communities affected by coal mining — starting by putting the funds from this settlement towards reclaiming and restoring Appalachian lands, waters and local economies.”

Alpha, one of the nation’s top coal producers, has been in Chapter 11 protection since August 2015 at the U.S. Bankruptcy Court for the Eastern District of Virginia. It has been working lately on a reorganization plan that would see its main mines, including the Belle Ayr/Eagle Butte mines in Wyoming and the Pennsylvania longwall operations, sold to certain creditors that operate under a newly-formed company called Contura Energy Inc. Other assets, mainly in Central Appalachia, would be retained under a reorganized version of Alpha.

Contura Energy was a signatory to the deal with the environmental groups filed June 30 at the bankruptcy court. Alpha said in that filing that it plans to seek approval of the settlement at the same time as confirmation of its reorganization plan.

The reserves to be put out of bounds to mining are under Alpha’s Rostraver Energy Co. unit, which owns certain coal reserves located in the Freeport seam (sometimes referred to as the Upper Freeport seam) and limited Pittsburgh #8 seam coal (mostly mined) located in Westmoreland and Fayette counties, Pa., and approximately 2,400 acres of surface property overlying the Rostraver Reserve in Westmoreland County.

Said the settlement: “The Reorganized Debtors shall cause Rostraver to donate the Rostraver Reserve to a non-profit to be designated by the Groups for the purpose of restricting any future mining of the coal seams associated with the Rostraver Reserve. The Groups shall designate the recipient of the Rostraver Reserve within one year following the Effective Date, and the Reorganized Debtors shall consummate the donation of the Rostraver Reserve to the Groups’ designee within 60 days of such designation. In the event that the Groups do not designate a non-profit to receive the Rostraver Reserve within one year following the Effective Date, the Reorganized Debtors and the Groups shall meet and confer to determine a mutually agreeable disposition of the Rostraver Reserve. Within 45 days of the Effective Date, the Reorganized Debtors will begin the process of marketing the Rostraver Land and shall proceed as expeditiously as practicable with the sale of the Rostraver Land. The Reorganized Debtors shall donate the proceeds from the sale of the Rostraver Land up to $2 million to Appalachian Headwaters, which amount shall be in addition to the amounts provided for pursuant to Section 3 hereof. Any proceeds of the sale of the Rostraver Land in excess of $2 million shall be retained by the Reorganized Debtors.”

Also as part of this deal, Alpha’s Paynter Branch Mining Inc. will give up mining permit number S-4001-06, which covers an approximately 507-acre surface mine in West Virginia where mining has not commenced. “Upon the Effective Date, Paynter Branch shall surrender the Paynter Branch Permit in accordance with applicable law,” said the settlement.

West Virginia Department of Environmental Protection records show that this permit was issued in 2007 for the 507-acre Paynter Branch South mine, located near Cyclone in Wyoming County. This was to be a contour/steep slope operation working various seams, including the Hernshaw, Dingess and Chilton formations.

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.