As coal companies go bankrupt there is growing concern and uncertainty over who will pay to clean up those mines. But Texas has been there before. In 2014, the state’s largest coal company filed for bankruptcy with over $1 billion in outstanding cleanup costs. Now, more than two years later, this case is held up an example of what works.
According to federal regulators, the Wyoming Department of Environmental Quality did not take appropriate action against Alpha Natural Resources when it was allowed to continue to mine without putting up adequate reclamation bonds.
A judge in Richmond, VA approved coal giant Alpha Natural Resources’ plan to get out of bankruptcy Thursday. The approval went through, in part, because Alpha agreed to put up real financial assurances to cover future reclamation costs, which totaled hundreds of millions of dollars.
As Alpha Natural Resources looks to emerge from bankruptcy, the government is opposing the company’s plan to transfer its federal coal leases to a new company. The Department of Justice argues Alpha’s current reorganization plan doesn’t adequately address the company’s cleanup obligations.
Arch canceled its quarterly earnings call, citing talks with creditors. But in its filings with the Securities and Exchange Commission, Arch says regardless of whether it is able to reach an agreement with those creditors, it may need to file for Chapter 11, which would allow the company to restructure.
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