January 5, 2016

CO ‘Moves Away’ From Self-Bonding

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Colorado regulators say the state is changing its approach to ensuring coal mines get cleaned up.

The change involves self-bonding, a program that gives coal companies a pass on putting aside money for future mine clean-up, if they can pass a test of financial strength.

Even though many coal companies are struggling in a steep market downturn and some have even declared bankruptcy, many of them are still self-bonded. The problem? It’s no longer clear whether those companies will actually be able to pay for future coal mine reclamation.

In an email to me, Todd Hartman, Communications Director at the Colorado Department of Natural Resources wrote, “We are moving away from self-bonding because we think it is less secure than other forms of financial assurances such as corporate sureties or cash bonds.”

Hartman would not elaborate on what it means to “move away from self-bonding.”

In, Colorado, over $100 million dollars in future clean-up costs are tied up in self-bonds. That’s around 58% of its total reclamation liability. Nationally, there are billions of dollars in self-bonded coal mine clean-up costs. Regulators in Wyoming, which has more self-bonding than any other state, have said they are reviewing the program.