Monday, January 27, 2020

Ky. may have to pay millions to fix environmental violations after bankrupt coal companies posted inadequate bonds

Coal company Blackjewel made nationwide headlines last year when laid-off miners in Harlan County, Kentucky, blocked a coal train from leaving for months because the bankrupt company had not paid them for their last weeks of work. New court documents show that the company and affiliate Revelation Energy may have hurt Kentucky in other ways too.

The two companies "have failed to make progress on scores of environmental obligations and might leave Kentucky taxpayers on the hook for tens of millions of dollars in reclamation costs, state officials contended during a bankruptcy hearing this week," Will Wright reports for the Lexington Herald-Leader. "Filings in federal bankruptcy court show that Blackjewel’s violations alone account for 30 percent of all outstanding non-compliance notices sent by the Kentucky Department of Natural Resources as of Dec. 31. The state warned the court that the company has made little or no progress in addressing those violations."

Adding to the problem, it appears that the companies posted far too little in bonds to cover reclamation costs. "Kentucky has had longstanding problems with coal companies posting inadequate bonds to cover reclamation," Wright reports. The KDNR reviewed 20 percent of the permits held by Blackjewel and Revelation, and wrote in a Jan. 13 court filing that reclamation costs would exceed the bond amounts for those permits by about $38 million.

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