Posts Tagged ‘Kentucky’

A moment of truth for Kentucky’s coal regulators

Thursday, July 30th, 2015 - posted by Tarence Ray
A striking case of corruption related to mine inspections in Kentucky led to the recent criminal conviction of former Democratic state representative Keith Hall. But questions remain about how deep the conspiracy goes.

A striking case of corruption related to mine inspections in Kentucky led to the recent criminal conviction of former Democratic state representative Keith Hall. But questions remain about how deep the conspiracy goes. Photo from LRC (Ky.) Public Information.

In June 2013, mine operator and Kentucky state representative Keith Hall went to the Kentucky Energy and Environment Cabinet with a complaint.

Kelly Shortridge, a mine inspector with the Division of Mine Enforcement and Reclamation in Pikeville, had been soliciting Hall for bribes to ignore violations on Hall’s Pike County surface mines.

Hall told two cabinet officials that he had already paid Shortridge “a small fortune,” and that the mine inspector “liked the Benjamins.” A report was drawn up, forwarded to the cabinet’s investigator general and Secretary Len Peters, and went nowhere.

The FBI began investigating the matter when the Lexington Herald-Leader published Hall’s complaint report through an open records request. In June, Hall was found guilty of bribing Shortridge to ignore Hall’s safety and environmental violations.

During the trial, the bureau submitted evidence that strongly suggests Keith Hall was not the only operator paying Kelly Shortridge. Shortridge himself has admitted to taking bribes from other Pike County operators.

So how deep does the conspiracy go? That’s the question many are asking in the wake of Hall’s trial. The Herald-Leader published a recent editorial that pointed out the familiar territory here:

This is not the first time questions have arisen about the Pikeville office of the Division of Mine Reclamation and Enforcement where Shortridge, an inspector for 24 years, worked.

Other Pikeville-based inspectors allowed a surface mine (not owned by Hall) to operate without a permit for 18 months, until July 2010, when rain dislodged the unreclaimed mountain and flooded out about 80 families. One of the inspectors retired a month later.

Remember, too, that the division went years without penalizing coal companies for filing bogus water pollution reports by copying and pasting the same data, month after month.

This falsified water pollution data was only discovered after a coalition of environmental and citizen groups including Appalachian Voices discovered water monitoring reports that the department had neglected to review for over three years. The fact that the FBI had to find out about Hall’s allegations by reading the newspaper – and not through the cabinet itself – reveals a similar pattern of negligence.

How committed is the cabinet to enforcing Kentucky’s environmental and safety regulations around mining? The answer may lie in the phenomenally small salary that the state was paying Shortridge at the time of his 2014 resignation: $45,160 a year.

This may seem like an insignificant detail, but it speaks volumes about how our regulatory systems function, what they prioritize, and what motivates the individuals who operate within them. Shortridge was using his small salary, in addition to the bribes he was taking from Hall and others, to pay for his wife’s medical bills. It’s impossible to speculate about his personal character, but it does seem clear that he was responding to a specific set of material conditions in a way that most individuals on that kind of salary – and in that kind of position – very likely would.

Without much incentive to enforce existing regulations, and knowing that it pays more to cozy up to the industry than to fight it, we really must ask: how many other Kelly Shortridges are out there? This doesn’t seem like an unreasonable question to ask of a regulatory system that, at best, lacks the political capital and material resources to enforce violations, and, at worst, is overseen by the very mine operators it’s supposed to be regulating. (Before being voted out of office in 2014, Keith Hall was the vice chairman of the House Natural Resources Committee.)

Finally, Keith Hall’s remark that Kelly Shortridge “liked the Benjamins” – an incredibly condescending statement from a man who once appropriated his own county’s coal severance tax to the benefit of one of his companies – is revelatory. It hints that there are boundaries to what is and what isn’t acceptable within relationships between the coal industry and the state: Shortridge was getting ambitious; his greed was somehow different than Hall’s. Keep in mind that this was confessed to two cabinet officials, mob-style, as if Shortridge was breaking a set of established rules. Hall needed Shortridge until he didn’t, and then sold him down the river when he became an annoyance.

Now that they’re both paying for breaking the rules, will Governor Steve Beshear’s administration adequately investigate further possible corruption? It unfortunately doesn’t look likely.

As the Herald-Leader editorial notes, “This should be a moment of truth, but history tells us not to expect an aggressive self-examination of the state agency’s love affair with the coal industry.”

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Interior Department Issues Draft Stream Protection Rule

Thursday, July 16th, 2015 - posted by brian

Contact: Cat McCue, Communications Director, 434-293-6373, cat@appvoices.org

Today, the U.S. Department of the Interior issued a long-awaited draft of the Stream Protection Rule, which the agency has been working on since 2010. The purpose of the rule is to prevent or minimize the impacts of surface coal mining on surface water and groundwater. The agency’s Draft Environmental Impact Statement to accompany the draft rule includes several alternative options, some of which include sections that are stronger than the agency’s preferred alternative.

The following is a statement from Thom Kay, Appalachian Voices’ Legislative Associate.

“The people of Central Appalachia have waited a long time for robust federal action to protect their streams and communities from the damages of surface coal mining. At first glance, the draft appears to improve some drastically outdated provisions of an ineffective rule. But it’s not worth cheering for the rule as long as it allows companies to continue dumping their mining waste in our streams.

“Despite the regional coal industry’s decline, existing surface mines have been expanding closer and closer to homes, continuing to put the health of local communities at risk.

“We will continue working with citizens to ensure the agency’s final rule presents the strongest possible protections.

“When finalized, this rule will largely define President Obama’s legacy on the ongoing tragedy of mountaintop removal coal mining.”

>> Read our blog post from yesterday: How much progress are we making on ending mountaintop removal?
>> Read a brief overview of the Stream Protection Rule.
>> OSM’s press release about the rule with further links.

How much progress are we making on ending mountaintop removal?

Wednesday, July 15th, 2015 - posted by Erin
Last week, the U.S. Energy Information Administration pointed to a steep decline in coal produced by mountaintop removal mining. But much more work is needed to truly end destructive mining practices in Central Appalachia.

Last week, the U.S. Energy Information Administration pointed to a steep decline in coal produced by mountaintop removal mining. But much more work is needed to truly end destructive mining practices in Central Appalachia.

Last week, the U.S. Energy Information Administration reported that surface coal production nationwide decreased about 21 percent between 2008 and 2014, while production from surface mines that include mountaintop removal mining in three central Appalachian states had decreased 62 percent.

At first, this seems like a huge win in the fight against mountaintop removal mining, a practice that is devastating to community health and the environment, and yields few jobs compared to traditional mining practices. While it is a step in the right direction, declining production is not a sufficient measure of the ongoing human and environmental impacts of mountaintop removal.

Closer examination of the data calls into question the adequacy of the legal definition of “mountaintop removal” and, more importantly, demonstrates that much more work is needed to truly end destructive mining practices in Central Appalachia.

First, let’s look at the numbers reported by the EIA. The post, published on the agency’s Today In Energy blog, opens by saying, “Coal production from mines with mountaintop removal (MTR) permits has declined since 2008, more than the downward trend in total U.S. coal production.” While this is true, comparing the decline in mountaintop removal production to the decline in nationwide surface production (62 and 21 percent, respectively) gives the false impression that mountaintop removal, in particular, is on its way out. However, when you compare the decline in mountaintop removal production to the decline in surface mine production only for Central Appalachia, the picture looks much different: surface mine production in Central Appalachia has declined by 55 percent from 2008 to 2014.

With this new information, it becomes apparent that mountaintop removal production has not declined much more than surface mining on the whole in Central Appalachia. Given the similarity, we can attribute the decline in mountaintop removal largely to the same market forces that are leading to a decline in all coal mining in Central Appalachia.

The EIA report also relies on the Surface Mine Control and Reclamation Act’s (SMCRA) narrow definition of what constitutes mountaintop removal mining — essentially, a surface mine “running through the upper fraction of a mountain, ridge, or hill” that is exempt from returning the land to “approximate original contour” because the new land use is intended to be of equal or better economic or public value. The problem with this definition of mountaintop removal is that many Central Appalachian surface mines that cross ridgelines and employ many of the same problematic practices — large-scale blasting, mining through streams, and valley filling — are not, under SMCRA’s narrow definition, considered mountaintop removal mines.

The reality on the ground is that the rugged terrain of Central Appalachia makes it difficult to conduct any large-scale surface mine without mining across a ridgeline. Take for example the recently permitted Jim Justice-owned surface mine in McDowell County, W.Va. The Big Creek Surface Mine certainly cross multiple ridgelines and will construct a valley fill within half a mile of a Head Start preschool, yet this mine is not considered a mountaintop removal mine by either the federal government or the state of West Virginia. Furthermore, the valley fill does not require a 404 permit under the Clean Water Act, as it is not being constructed in public waters of the United States.

These facts mean there is little the local community, largely unsupportive of the mine, can do to stop it. Additionally, reclamation of the site requires that the company return the land to its “approximate original contour.” That phrase has never been clearly defined, however, so the land will be returned to a much lower elevation, lacking the fully functioning forest and ecosystems present before mining.

Another issue is that measuring mountaintop removal only by production and permit designation does not lead to a full accounting of the destruction done to the land as a whole.

Back in April, Appalachian Voices undertook a mapping analysis to look at how surface mines are impacting local communities. We had noticed that, even though mining is declining in the region, we are still regularly contacted by impacted residents. So we set out to determine if surface mining was moving closer to communities, and through our Communities at Risk project, we confirmed that mines are in fact encroaching even more on local residents.

A view of the Communities at Risk mapping tool. Click to explore the map on iLoveMountains.org.

A view of the Communities at Risk mapping tool. Click to explore the map on iLoveMountains.org.

To complete this analysis, we identified surface mines across the region using satellite imagery and other data to differentiate between mining and non-mining areas. We excluded areas less than 25,000 square meters. This left us with a map layer of large surface mines, including mountaintop removal mines (whether designated as such by any government agencies, or not), across the region.

This data set is useful not only for our Communities at Risk tool, but also for other analysis on the trends in surface mining in Central Appalachia over time. Using this map, we determined the current amount of land disturbance due to mining — basically any area that is barren due to active mining, recently idled or abandoned mines, or mines not yet reclaimed — has declined from 148,000 acres in 2008 to 89,000 acres in 2014.

Unfortunately, we can’t directly compare yearly production numbers to the number of acres disturbed to yield that production. Land within a surface mine is constantly being shifted, blown up, backfilled, and regraded. Basically, not all barren areas are actively producing coal at any given time. Many areas stay barren for years, while other areas of the mine are producing coal (despite legal requirements for contemporaneous reclamation).

The comparison we can make is that the amount of currently barren land is not falling as fast as production numbers. The extent of surface mined area (whether active, idled, or just unreclaimed) has declined about 40 percent, while production from Central Appalachian surface mines has declined 55 percent.

Essentially, we have more unreclaimed land in 2014, per ton of coal produced in 2014, than in previous years. This is likely due to a number of factors:

  • As thinner, deeper seams are mined, more land must be disturbed per ton of production;
  • Recently, mines have been idled, or even bond-forfeited due to market pressures; and
  • Reclamation is a slow and expensive process.

Mathew Louis-Rosenburg, a West Virginia resident, sums up the problem of only considering the EIA numbers without on-the-ground context:

“On the ground, we measure [mountaintop removal] in acres lost, in water contaminated, communities harmed. The steep decline in surface mine productivity means that a lot more land is being disturbed to get that smaller tonnage and idled mines still contaminate water at a similar rate to active ones. The battle here is far from over and stories like this just lead more and more resources and support to leave the region because people from elsewhere think that we have won already.”

It is beyond time for the Obama administration to take action to end destructive surface mining across Central Appalachia. We are hopeful that a strong Stream Protection Rule will go a long way toward protecting the streams and the people of the region. The Appalachian Community Health Emergency Act (H.R. 912) could also go a long way in protecting communities from health impacts confirmed by mounting scientific evidence.

Unfortunately, the likelihood of success on either of these actions decreases every time misleading evidence suggests this problem has gone away. You can help prevent this by telling the Obama administration to end mountaintop removal and by keeping this conversation going among a national audience. We owe that to the people of Central Appalachia.

EIA: Mountaintop removal coal production down

Tuesday, July 7th, 2015 - posted by brian
A combination of market and regulatory forces has contributed to a steep decline in coal produced by mountaintop removal mining. Graphic from eia.gov

A combination of market and regulatory forces has contributed to a steep decline in coal produced by mountaintop removal mining. Graphic from eia.gov

The U.S. Energy Information Agency (EIA) published a blog post this week showing that coal produced by mountaintop removal mining in Central Appalachia decreased by 62 percent between 2008 and 2014.

According to the agency, a combination of factors including abundant and cheap natural gas, growing use of renewables, flat electricity demand, and environmental regulations has contributed to the sharp decline.

It’s important to note that what the EIA defines as mountaintop removal is not the same as what folks in Appalachia call mountaintop removal.

Because the EIA doesn’t count a lot of large strip mines in the region, the total numbers here likely underestimate the number of mines threatening human health and the environment. For the same reason, production declines for mountaintop removal specifically may not be as steeps as the EIA states.

What is clear, though, is that both production and the total number of mountaintop removal mines is way down in West Virginia, Kentucky and Virginia.

Our work is paying off, but we still have a long way to go. Mountaintop removal is still putting communities at risk. In fact, in many places, active mining operations are getting closer to communities.

Demand for Central Appalachian coal will continue to decline, making further progress inevitable. But we won’t end mountaintop removal by relying on the market alone. The Obama administration must take further action to protect Appalachia by issuing a strong Stream Protection Rule, which is due out this month.

The following is a statement from Appalachian Voices Legislative Associate Thom Kay:

It is incredibly important not to look at these numbers and conclude the problem is just going away. Production numbers don’t convey the extent of human health impacts. Mine location, blasting extent, and impacts to the environment are much more important indicators of damage done to communities.

Fewer mines is good news. But don’t expect us to celebrate. The EIA reports that last year there were over 30 mountaintop removal mines operating in Central Appalachia, producing more than 20 million tons of coal. Those numbers should be zero.

Allowing mountaintop removal mining to continue as residents demand new investments and support for economic alternatives will only burden communities searching for a better path forward.

Let the President know we need a strong rule that helps move Appalachia forward.

Appalachian legislators give POWER+ the cold shoulder

Friday, June 26th, 2015 - posted by Adam
Tell your Senators to support a positive future for Appalachian communities.

TAKE ACTION: Tell your Senators to support a positive future for Appalachian communities.

Virginia’s coal-bearing counties would directly benefit from the adoption of the POWER+ plan, a proposal in the Obama administration’s 2016 budget that would direct more than a billion dollars to Central Appalachia.

But the U.S. House budget cuts Virginia entirely out of the forward-thinking Abandoned Mined Lands funding reforms that were spelled out in the POWER+ Plan. That component of the plan would send $30 million directly to the Virginia coalfields for economic development and put laid-off miners back to work cleaning up the messes left by coal companies.

Last week, the U.S. Senate appropriations committee passed a budget bill the leaves out any mention of POWER+.

Please contact your senators now to make sure they support a budget that includes a path forward for Appalachian communities.

For more background, we recommend this piece by Naveena Sadasivam for InsideClimate News, which details the curious quiet around POWER+ and how the plan has been pulled into the partisan bickering that’s embroiled the U.S. Environmental Protection Agency’s Clean Power Plan and the 2016 budget process as a whole.

Under the federal Abandoned Mine Lands program, sites that pose a threat to safety are prioritized over sites that offer a potential economic benefit if cleaned up. While this program has reduced potential hazards in the coal-mining regions of Appalachia and the U.S., it has done little to positively impact local economies.

The POWER+ Plan, however, calls for funds to be used for projects that not only improve the environment and reduce hazards, but also create an economic benefit for local economies.

There’s still time for both House and Senate to include the meaningful funding proposals outlined in POWER+. But in order for that to happen we need to make sure that Virginia’s U.S. Senators, Tim Kaine and Mark Warner, hear the clear message from you to make sure Appalachia gets this much needed funding!

Please contact your senators now to make sure they support a budget that includes a path forward for Appalachian communities.

Appalachian Regional Commission receives citizen input

Thursday, June 18th, 2015 - posted by interns

By Michael Shrader

The geographic area covered by the Appalachian Regional Commission.

The geographic area covered by the Appalachian Regional Commission.

On June 4, the Appalachian Regional Commission (ARC) held one of its five 2016-2020 Strategic Plan Listening Sessions in Morehead, Ky., to gather ideas from Appalachian citizens that will inform the commission’s plan for improving economic opportunities in communities across the region.

The Morehead Conference Center was full of forward-thinking minds from Kentucky and surrounding states who explained opportunities and barriers they see in their own communities. Many common themes emerged related to tourism, and adventure tourism in particular. Some attendants cited the need to cultivate and support family farms to create a local and sustainable Appalachian food system. Others spotlighted the opportunity for renewable energy generation in their communities.

The Obama administration’s POWER+ plan was mentioned several times as an opportunity that must be capitalized on. POWER+ invests in Appalachian workers and jobs through unique programs, many of which bear semblance to those discussed in Morehead. Appalachian Voices’ economic diversification campaign is currently building support for this proposal in Southwest Virginia.

Some attendees had a difficult time differentiating between opportunities and barriers to progress in their communities. Where some saw a vast, employable and idle workforce, others saw a lack of educational opportunities and substance abuse posing serious barriers to workforce development. Concrete barriers to development include a lack of local infrastructure such as highways, water systems and, especially, broadband Internet connectivity.

The massive amount of land owned by absentee corporations and extractive industries presents a unique challenge to regional development throughout most of central Appalachia and was mentioned several times throughout the session. Many residents cited less concrete barriers to progress such as a lack of hope and progressive leadership, and the enduring negative stereotypes associated with the region. Finally, there were many who stressed the need for the restoration of the landscape after mining and the resources to create jobs to do so.

Attendees outlined what they saw as ARC’s role in taking advantage of the opportunities and breaking down the barriers for development in their communities. The resounding consensus was a need to access capital and workforce development resources. In addition, attendees felt that ARC needed to work harder to make sure that groups in Appalachia could gain easier access to resources outside of ARC. Some felt that we needed to find ways to craft new language to talk about our problems and solutions. Others cited the need to address to vast health and wellness issues in the region.

Ultimately, many agreed that ARC, as a federal-state partnership, needs to broker change in Washington, D.C., on behalf of Appalachia. One attendee remarked that ARC must facilitate the conversation to look beyond Appalachia to other struggling regions across the nation to solve systemic problems and implement a new ‘true cost’ economic model.

The listening session brought a wide range of individuals and regional stakeholders together to share their unique perspectives. But some still felt that a representative range of people had not been able to participate. In fact, with the all-day session held on a Wednesday, many in attendance argued that it was impossible for the majority of working people to provide input, and stressed need for better stakeholder involvement and opportunities for public involvement.

Healing the Red River’s Tributaries

Monday, June 15th, 2015 - posted by Laura Marion
The Red River’s Wild & Scenic designation offers special protections to places like Creation Falls. Photo by Karen Roussel

The Red River’s Wild & Scenic designation offers special protections to places like Creation Falls. Photo by Karen Roussel

By Dac Collins

The Red River in eastern Kentucky forms one of the most spectacular gorges in the country. Its sandstone arches, cliffs and unique rock formations lure climbers and fascinate geologists, and many of its rock shelters and caves are classified as significant archeological sites. A dam proposal in the late 1960s would have swallowed up the gorge, but Kentuckians, with help from the Sierra Club and writer-activist Wendell Berry, grappled with the U.S. Army Corps of Engineers until the Red was granted federal protection in 1993 under the Wild and Scenic Rivers Act.

The Wild and Scenic designation applies to the stretch of river that passes through the gorge, but it does not protect the entire Red River watershed from human impacts. That is why members of the Kentucky Waterways Alliance, an environmental nonprofit, collaborated with the state’s Division of Water and the U.S. Forest Service to create the Red River Gorge Restoration and Watershed Plan, which addresses potential threats to the water quality of four creeks that flow into the iconic river. These threats include high levels of sediment resulting from road construction, and contaminated runoff from residential areas.

Because portions of these tributaries are located on private property, the watershed plan recommends “best management practices” that property owners can implement in order to reduce the amount of polluted runoff. Maintaining a riparian buffer of streamside vegetation, which prevents bank erosion, is just one solution that private landowners can choose to implement.

Tessa Eedlen, watershed program director at the Kentucky Waterways Alliance, says, “We’re also going to be focusing on septic systems, [including] repair, pump outs and, if necessary, replacement.” According to Eedlen, this is a major issue along Swift Camp Creek, where many homeowners are using old or defective pipes that leak sewage into the stream.

The nonprofit organization has secured an implementation grant from the Kentucky Division of Water, which Eedlen hopes to use to create financial incentive programs for homeowners. The grant money will fund other stream restoration projects as well, such as the removal of two culverts on Indian Creek that are currently impeding the passage of fish.

The Kentucky Waterways Alliance will be hosting creek cleanups and streamside tree plantings this fall. Visit their website to get involved: kwalliance.org/red-river-watershed

Newfound Native American Burial Ground Protected

Monday, June 15th, 2015 - posted by Laura Marion

By Julia Lindsay

A largely undisturbed burial mound recently discovered in Greenup County, Ky., could provide a window into early Native American culture. The 20 feet high by 80 feet long mass dates back to the Fort Ancient or Woodland periods, which occurred approximately 500 to 2,500 years ago.

The Archaeological Conservancy plans to conduct research on the mound in an effort to expand understanding of Native American culture. Promising to utilize non-invasive research methods, the regional associate director told The Lane Report “We do recognize this is a sacred, spiritual space.”

Deanna Turner, who works at Ohio’s famed Serpent Mound, says roughly 10,000 similar mounds existed in the early 20th century tucked away in river valleys, but many were built over, and the threat of development still looms over many sites. A federal law, enacted in 1990, requires the return of Native American cultural items and remains to their respective tribes, but many of these sites face destruction because the law does not apply to private land.

A Burning Problem

Wednesday, June 10th, 2015 - posted by Laura Marion
Park University students post signs at Cranks Creek Lake in Kentucky, warning about the hazards of burning tires. Photo by Dave Cooper

Park University students post signs at Cranks Creek Lake in Kentucky, warning about the hazards of burning tires. Photo by Dave Cooper

Illegal trash fires spark health concerns

By Dave Cooper

When students from Park University in Kansas City, Mo. came to Harlan County, Ky. on an alternative fall break, they wanted to learn more about health problems in the region and find ways to help Appalachians live happier, healthier lives.

On a trip to fill water bottles with some pure mountain spring water, they photographed a trailer with a huge pile of smoldering truck tires in the front yard. Later they noticed the remnants of tires in the campfire rings around Cranks Creek Lake, a popular camping and fishing spot.

Returning to Harlan, the students began researching the issue of illegal burning. They learned that burning tires and plastics can release toxic chemicals including dioxin into the air, contaminating the soil and water and contributing to childhood asthma attacks.

The students quickly created an informational flier about the health dangers of burning tires, posting them on community bulletin boards. Later, they returned to Cranks Creek Lake and posted large signs alerting campers to the dangers of burning tires.

Many homes in rural Kentucky have a burn pile or burn barrel in the back yard, and tires are just one part of the problem. Decades ago, trash was mostly paper products, but today it is primarily plastics.

While weatherizing a home in the Closplint area of Harlan County, the students saw a backyard burn pile that contained a half-burned roll of carpeting, a television and a plastic kiddie car, plus many bags of trash and soda bottles. In the hollows, the black smoke from a smoldering backyard trash fire can linger over the community, contaminating the air for days.

In Kentucky, it is illegal to burn plastics, construction debris, plywood, treated wood, painted wood, animal bedding and tires, and to do so can result in fines of up to $25,000. Yet during their week in Harlan County, Park students counted dozens of backyard fires releasing thick, toxic smoke.

Talking to people in Harlan, Park students learned that tires are considered an easy way to light a fire: they burn all night long, providing light and heat for campers and night fishermen. One old timer claimed that burning tires kept the mosquitos away. But many Kentuckians that they talked with seemed completely unaware of the health dangers.

The Kentucky Division of Air Quality has provided posters and pamphlets for future volunteers to distribute. The posters show a resident cooking hotdogs and marshmallows over a campfire that contains plastic bags and soda bottles, with a tagline that reads, “If you burn trash in your campfire, you could be eating poison. Burning trash emits toxic gases and heavy metals like lead and mercury.”

For more information, contact the Kentucky Division of Air Quality at 1-888-BURN-LAW or visit air.ky.gov/Pages/OpenBurning.aspx

Another challenge facing coal: Cleaning up

Tuesday, June 9th, 2015 - posted by brian
As even some of the largest U.S. coal producers run the risk of caving under their debts, officials that oversee the federal surface mine bonding program are voicing urgent concerns about post-mine reclamation liabilities to state officials.

As even some of the largest U.S. coal producers run the risk of caving under their debts, officials that oversee the federal surface mine bonding program are voicing urgent concerns about companies’ ability to pay for post-mine reclamation.

After bankruptcies, legal fees, fines, plummeting share prices and years without a profit in sight, another aspect of the financial perils U.S. coal companies face is coming into full view.

Recently, regulators worried about the ability of coal companies to pay for post-mine reclamation have begun scrutinizing a practice known as “self-bonding,” which allows a company to insure the cost of restoring the land after mining without putting up collateral, provided it meets certain financial criteria.

Reuters reported last week that Peabody Energy, the world’s largest private-sector coal company, is under the microscope and may be violating federal bonding regulations under the 1977 Surface Mine Control and Reclamation Act.

Peabody, which reported a $787 million loss in 2014, had roughly $1.38 billion in clean-up liabilities insured by self-bonding at the end of March, according to the report. In fact, as its finances deteriorate, analysts say Peabody is warping the language of the law and pointing to the relative strength of its subsidiaries’ balance sheets to continue meeting self-bonding requirements.

Peabody is not alone. Arch Coal, which Reuters found has also failed the financial test to meet self-bonding requirements, is restructuring its multibillion-dollar debt. The company ended 2014 with $418 million in cleanup liabilities and hasn’t turned a profit since 2011.

On May 29, Alpha Natural Resources received word from the Wyoming Department of Environmental Quality that it is no longer eligible to self-bond in the state. The company now has less than 90 days to put up $411 million in anticipated mine cleanup costs. The nation’s second-largest producer by sales, Alpha told investors earlier this year that it had $640.5 million in reclamation liabilities at its mines in Appalachia and Wyoming’s Powder River Basin.

Watching as even some of the largest U.S. coal producers run the risk of caving under their debts, officials that oversee the federal bonding program are voicing urgent concerns to state officials.

In April, the U.S. Office of Surface Mining Reclamation and Enforcement sent a letter to West Virginia Department of Environmental Protection urging that the state conduct a fuller analysis of future risks — not just rely on historic data — to calculate reclamation costs.

“Given the precarious financial situation” of companies operating in West Virginia, the letter states, regulators should closely examine the risk of failure for sites with markedly more expensive liabilities such as pollution treatment facilities.

From where we’re standing, it’s tough to see how the situation could improve. Taken together, the country’s four largest coal companies — Peabody, Alpha, Arch Coal and Cloud Peak Energy — have about $2.7 billion in anticipated reclamation costs covered by self bonding. Bloomberg News reported in March that nearly three quarters of Central Appalachian coal is mined at a loss.

As the problem grows, regulators and advocates for reform face their own predicament. Stricter self-bonding standards and enforcement push cash-strapped companies closer to bankruptcy. But inaction could leave taxpayers to pick up the bill if companies with unreclaimed mines eventually crumble.

Learn how mountaintop removal puts Appalachian communities at risk. Read the latest issue of
The Appalachian Voice.