Monday, March 22, 2021

Bankruptcy judge lets coal firm walk away from reclamation costs for abandoned surface mines; could signal a trend

"The Blackjewel coal mining company can walk away from cleaning up and reclaiming coal mines covered by more than 30 permits in Kentucky under a liquidation agreement that was reached Friday in federal bankruptcy court in Charleston, West Virginia, attorneys participating in the case said," James Bruggers reports for Inside Climate News. Blackjewel made national news when Kentucky miners blocked a coal train in 2019 after the firm abruptly declared bankruptcy and their paychecks bounced. 

The ruling means rural counties with shuttered Blackjewel surface mines could have to pay for those costs or expose nearby residents to safety and environmental hazards. "In court testimony, residents and state regulators described mines with unstable slopes presenting landslide risks, and clogged pipes putting retention ponds containing polluted water at risk of overflowing," Bruggers reports.

Coal companies must post bonds to guarantee reclamation, and are supposed to reclaim abandoned mines as they go, but Blackjewel and affiliate Revelation Energy posted inadequate bonds, according to court documents. That's a longstanding problem in Kentucky.

Peter Morgan, a senior attorney for the Sierra Club, which is participating in the case, said he worries the Blackjewel ruling may foretell similar cases. "Unfortunately, this is likely the start of a trend where bankrupt coal companies dump their coal mine cleanup obligations onto communities and taxpayers who simply don’t have the money to pick up the tab," Morgan told Bruggers. "This should be a wake-up call to state regulators across the country to immediately hold coal mining companies accountable and to put miners to work cleaning up coal mines before all the burden falls on taxpayers and underfunded surety bonds."

It's unclear what will happen to the 170 or so other Blackjewel permits in Kentucky, Tennessee and West Virginia. They "will be placed into legal limbo for six months while Blackjewel attempts to sell them to other coal mining companies. Any permits that are unable to be transferred can then also be abandoned by the company, once the nation’s sixth-largest coal producer," Bruggers reports. "The judge required coal mining companies that might purchase the permits to take reclamation responsibility should they eventually go bankrupt, she said. But their financial condition in a weakened coal industry makes that also uncertain."

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