U.S., coal firms haven't set aside enough to reclaim mines

CHN graphic; click on the image to enlarge it.

According to national data compiled and published for the first time yesterday, the coal industry may not have enough money set aside to clean up and reclaim abandoned mines, Mark Olalde reports for Climate Home News. "Mining companies and state governments hold just $9.2 billion nationwide to ensure mining land is reclaimed if operators go bust," Olalde reports. "Experts told CHN that amount falls far short of what is needed to rehabilitate more than two million acres of mining permits the system is supposed to cover. The data covers all 23 states that produce 99 percent of U.S. coal and about 5,000 mining permits. It was gathered from responses to dozens of records requests submitted to the state environmental and mining agencies in charge of each state’s program."

The shortage is most troublesome in Appalachia, where coal production has dropped 50 percent in the past decade. Indiana also looks dicey. It and some Appalachian states (Kentucky, Maryland, Virginia and West Virginia) only require companies to have a fraction of the cost of reclaiming their mines on hand because of a practice called "bond pooling," to which all the mining companies contribute to spread their risk. That might be enough to cover reclamation costs if only a few mines close without being reclaimed, but many have shuttered in recent years. If enough companies declare bankruptcy without adequate reclamation funds, taxpayers might have to foot the bill or risk dealing with the environmental and health hazards triggered by the untreated mines.

"In 2015-16, companies accounting for nearly half of the coal production in the U.S. went into some form of bankruptcy," Olalde reports. "They have since emerged from that nadir, but the massive, sudden collapse highlights the problem of sharing risk among companies that all produce the same atrophying commodity." Scott Simonton, coordinator of the environmental science program at Marshall University in Huntington, W.Va., told Olalde: "It just seems to be a very fragile system. That’s the problem. It’s a system that’s designed for small failures."