We’ve said it before: Coal companies would much rather go bankrupt and forfeit their reclamation bonds — a kind of security deposit — to the state than clean up their own abandoned mines, because the bonds are a fraction of the actual reclamation costs.
Which is why it’s no surprise to hear West Virginia’s mine land reclamation fund is ill-equipped to cover all the work that needs done. However, we didn’t expect to hear the fund is one coal company bankruptcy away from going bankrupt itself, which would leave taxpayers with the bill. Nor did we expect to hear that lawmakers have known about the reclamation fund’s problems for the past 40 years and chose to do nothing.
In conjunction with ProPublica, Mountain State Spotlight did a deep dive into the fund and its problems, which it reported in “West Virginians could get stuck cleaning up the coal industry’s messes”: “State and federal officials have been warned repeatedly over the past 40 years that this reckoning was coming but have failed to prepare for it. Again and again, the review found, auditors questioned whether West Virginia’s reclamation program would have adequate funding.”
One part of the problem, as outlined in the article, is that the Surface Mining Control and Reclamation Act of 1977 offered a choice: Instead of posting bonds that would cover the full cost of reclamation, coal companies could post smaller bonds and pay the state a production tax for a shared reclamation fund. Not hard to imagine which one West Virginia chose.
Of course, that didn’t work out. As Mountain State Spotlight wrote: “But neither state lawmakers nor regulators required coal companies to have enough reclamation bonds as insurance should they go belly up. Nor did legislators raise the tax on coal production enough to make up the difference. Federal officials in both Republican and Democratic administrations who were supposed to oversee the state program cautioned there were problems but didn’t step in.”
The report highlights Lexington Coal Co. as a company on the financial brink that could drain the whole reclamation fund if it goes down. (If that name rings a bell, it’s because Lexington Coal owns the mine that blew out and ruined several drinking water wells around Newburg a couple years ago.)
Here’s why that’s a problem: In 2021, “The reclamation bonds carried by coal companies would cover less than 10% of cleanup costs … And the state had enough money on hand for less than 40% of the sites that would need to be cleaned up over the next 20 years.” That is, if one company’s bankruptcy doesn’t wipe out the whole fund.
How have West Virginia lawmakers responded?
In 2021, legislative auditors laid out exactly how to bolster the reclamation fund: increase the bond amounts or force companies to begin cleanups more quickly after a mine stops producing coal. (The longer it takes to clean up an abandoned mine, the more money it costs, and coal companies will drag out the process for years, trying to avoid doing it at all.)
Instead of doing what auditors suggested, Senate President Craig Blair introduced a concurrent resolution that called on the Biden administration to provide the state with an $8 billion — that’s “billion” with a “b” — bailout. It was adopted by both chambers. Funny how it’s not a waste of taxpayer dollars if it’s bailing out your campaign donors.
Everything about this is equally disturbing as it is disgusting, from the coal companies who happily pillage our natural resources and destroy West Virginia’s natural beauty for their own profits, to the decades of negligent politicians and regulators who let them get away with it, fully knowing that someday it would be average West Virginians who bore the cost.
