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Official Says Taxpayers Shouldn't Be "Saddled" With Coal Clean Up Costs

Department of the Interior

The Department of the Interior says taxpayers should not be saddled with the bill when it comes to coal mine cleanup, amid growing concerns over funding for reclamation as the coal industry’s financial health deteriorates.   

The issue revolves around a financial tool called self-bonding. It allows coal companies to mine without putting up money for cleanup costs if they can pass a test of financial strength.

The majority of reclamation costs in Wyoming, Colorado, and North Dakota are covered by self-bonding. But the companies who self-bond are not always financially healthy. Alpha Natural Resources, for example, a coal company that declared bankruptcy earlier this year, has more than $400 million in outstanding bonding obligations. 

Janice Schneider is the Assistant Secretary for Land and Minerals Management. She answered questions about self-bonding at a recent Senate hearing. 

“We’re looking at all possible avenues to make sure that the appropriate financial assurances are in place [and] looking at developing tools to assist the states to do just that,” Schneider said.

Department of the Interior recently formed a team to study the issue of self-bonding in a weak coal market.  

Email: lpaterson@insideenergy.org; leighpaterson@rmpbs.org
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