January 21, 2016

Feds Alert DEQ To Potential Reclamation Bonding Violations

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The federal government sent two notices to the Wyoming Department of Environmental Quality today, wanting regulators take a closer look at hundreds of millions of dollars in clean-up costs held by two bankrupt coal companies.

It is called a Ten-Day Notice. The Office of Surface Mining Reclamation and Enforcement (OSMRE) sends these out if it believes there is a violation of coal mining regulations.

Both notices address something called self-bonding. It is a provision that basically gives coal companies a pass on putting aside money for future clean-up if they can prove financial strength.

OSMRE cites potential violations by two bankrupt, self-bonded coal companies: Arch Coal and Alpha Natural Resources.

Alpha filed for bankruptcy in August. The company has not replaced its self-bonds with some other form of financial assurance or collateral though it continues to mine coal. OSMRE writes that because of this, it has “reason to believe a violation of the Wyoming Approved State program may exist.”

The second notice addresses a similar situation with Arch Coal. It names a Citizen Complaint filed by the Powder River Basin Resource Council in December which alleged Arch was violating the law by mining without sufficient reclamation bonding in place. In the Ten-Day Notice, OSMRE asks DEQ to “more fully respond” to the allegation by considering more recent financial information from Arch.

In response to the notices, DEQ spokesman Keith Guille wrote in an email, “We just received both of these letters and will need time to review…It is important to note that this is the first instance, that we can remember, where we have received these types of notice letters.”

 A Ten-Day Notice can be a precursor to more serious enforcement action. For now, DEQ has ten days to correct the potential violation or give a good reason why it can’t.