Washington Sen. Maria Cantwell is pressing for answers about coal mines self-bonding for reclamation, which turns to dust in bankruptcy.

Share story

WHEN coal-mining operations go bust, companies can duck environmental-reclamation obligations, and the taxpayers get the shaft. Or actually the open pit or strip mine.

U.S. Sen. Maria Cantwell, D-Wash., is asking Interior Secretary Sally Jewell to protect taxpayers from a long-standing scam in federal legislation that lets coal companies avoid their duty to clean up the lucrative mess they have made.

Coal companies are technically bound by the 1977 Surface Mining Control and Reclamation Act to clean up, but the commitment might have nothing more behind it than bonds issued by the companies — self-bonds. The pledges and assurances can turn into dust.

If companies go bankrupt, as has happened with the recent downturn in the global coal market, the bonds are virtually worthless. The huge tab to clean up the coal-mining sites falls on state and federal taxpayers.

The senator does not use the word “scam.” But we can.

Cantwell is concerned about several elements of the process. For example, the law has natural-resource regulators working outside their skill sets. They do the initial financial analysis on self-bonding proposals, assessing the coal company’s financial health.

Cantwell’s recent letter to Jewell points out neither the U.S. Interior Department nor any state is required to accept self-bonds, but it happens.

In Wyoming, coal giant Arch Coal received clearance to issue self-bonds from the state in September 2015, and filed for Chapter 11 bankruptcy protection four months later.

Bankruptcy proceedings are no assurance of accountability. A bankruptcy court in Virginia allowed a coal company to juggle debts and reclamation obligations, but pay 15 executives $12 million in bonuses.

Cantwell has other concerns about coal pricing and royalty payments, but her questions come down to a point that ought to resonate with taxpayers looking at billions in reclamation liabilities:

Would the administration support a prohibition on any new self-bonds for coal-mining reclamation going forward?

End this scam available to the coal industry.