(Associated Press, July 17) – A federal finding that two Wyoming coal mines aren’t adequately bonded is political in nature as well as erroneous and unreasonable, a state environmental regulator said Friday in asking the federal Office of Surface Mining Reclamation and Enforcement to reconsider.
At issue is how to pay for cleaning up two Wyoming coal mines owned by Alpha Natural Resources should they close. Alpha Natural Resources filed for bankruptcy last year and is on track to emerge from that process within weeks.
During the bankruptcy, Wyoming and Alpha Natural Resources have agreed to make the state a top-priority creditor, if necessary, for $61 million of the company’s $411 million in environmental bonding obligations in the state.
The OSMRE found Monday that’s not enough to ensure the company’s Belle Ayr and Eagle Butte mines could be fully reclaimed. To date, it’s been somewhat of a moot issue for at least all practical purposes: The mines have remained open and don’t threaten to close.
Responding to OSMRE Deputy Director Glenda Owens, Kyle Wendtland with the Wyoming Department of Environmental Quality credited the state’s agreement with Alpha Natural Resources for keeping the mines open.
“There has been no harm to the environment, public health, or public safety, and the people of Wyoming were not left holding the bag,” wrote Wendtland, administrator of the department’s Land Quality Division.
Environmental bonding sets aside money for cleanup costs in advance so mines don’t become environmental wastelands after they close.
The problem arises from how Wyoming and other states for decades have allowed companies to avoid posting environmental bonds. Instead, coal companies have been able to use their financial strength to back up promises to clean up their mines, a practice called self-bonding.
Self-bonding has come under scrutiny now that several major coal companies including Alpha Natural Resources, Arch Coal and Peabody Energy are in Chapter 11 reorganization. OSMRE officials declined to comment on the Wyoming letter, saying they needed to review it.
The OSMRE finding raises the stakes in the bankruptcy of Bristol, Virginia-based Alpha Natural Resources, depending on whether a bankruptcy exit agreement holds. The company, its creditors and state and federal regulators have agreed to an arrangement that would transfer the Wyoming mines and other core assets to a new company, Contura Energy.
The Wyoming mines would be fully bonded and no longer covered by self-bonding.