Welcome

Modern Coal Mines’ Cleanup Has Big Unbudgeted Costs, Group Says

July 8, 2021, 10:01 AM

The price tag for cleaning up modern coal mines in Appalachia is between $7.5 billion and $9.8 billion—vastly more than the $3.8 billion known to be set aside for the job in bonds, an environmental group estimates in a new report.

The findings are alarming because the federal government has no reliable estimate of the cleanup cost for mines built after 1977, when President Jimmy Carter signed a law that funded the reclamation of old and inactive legacy mines, according to Erin Savage, a senior program manager at Appalachian Voices and the report’s author.

Moreover, the dollar amount—which only covers seven states—also approaches the $10.6 billion cleanup cost of the nation’s entire inventory of pre-1977 mines, some of which go back more than 100 years.

The question of how to pay for modern mine cleanup is especially tricky because some 70 coal companies have declared bankruptcy since 2012, leaving open the question of where the money will come from.

“I am not aware of an easy solution,” said Joe Pizarchik, who led the Office of Surface Mining Reclamation and Enforcement under President Barack Obama.

Because so many of the impacts in Appalachia fall on White communities, the report also spotlights the need for environmental justice leaders—and, by extension, the Biden administration—to stretch their definition of the concept beyond racial boundaries, said Catherine Flowers, director of the Center of Rural Enterprise and Environmental Justice.

“For those people who think that White people are not impacted by these issues, they just have to go to Appalachia and see that we are all at risk, and we should all be concerned,” she said. “There are poor White people, too.”

Water, Methane Leaks

When coal mines aren’t cleaned up, they can contaminate ground and surface water with acids. Underground mines also can leak planet-warming methane.

One example comes from eastern Kentucky, where dozens of mine sites operated by Blackjewel LLC—which filed for Chapter 11 bankruptcy in 2019—have been turned over to the state. Those mines are in poor shape and pose landslide and erosion risks, according to Peter Morgan, an attorney with the Sierra Club’s Environmental Law Program.

When coal companies seek to mine in an area, Savage said, states grant them permits with the understanding the companies will perform the necessary reclamation, and that they’ll provide bonds to cover costs of work they didn’t complete themselves.

“That is the standard that they should still be held to,” she said.

If a company has filed for bankruptcy, and its bond isn’t enough to pay for cleanup, an outside party can try to force the state to fulfill its legal duties in court, Pizarchik said.

The National Mining Association is focused on addressing mines older mines covered by the 1977 Surface Mining Control and Reclamation Act, said Ashley Burke, a spokeswoman for the trade group. It’s also “committed to supporting the remediation of abandoned mines and has already contributed billions to those efforts over the years,” she said.

Supporting Remediation

The Biden administration has been paying attention to the issue.

A newly-formed White House working group on coal community revitalization has called for “financing and grant funding programs to remediate abandoned mine lands.” But its April 23 report offered few details on how to deal with the lack of funding to clean up modern mines.

The White House’s budget request doesn’t contain specific line items for post-1977 mine cleanup. But it proposes $640 million in fiscal 2022 for older abandoned mines and gas well remediation together. That amount would escalate as high as $3.2 billion in fiscal 2026.

Biden’s fiscal 2022 budget request calls for a small 1.3% increase for the Office of Surface Mining Reclamation and Enforcement. The agency received $117.8 million in the latest budget.

The Interior Department “is committed to upholding the law and ensuring reclamation of post-mining operations, and investing in communities that continue to live with legacy pollution,” agency spokeswoman Melissa Schwartz said.

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com

To read more articles log in. To learn more about a subscription click here.