By John McFerrin

The West Virginia Highlands Conservancy has joined with the Sierra Club in another step in the long march toward making sure that mines which are forsaken are cleaned up, including assuring that there is money to pay for that cleanup.

Boring stuff you need to know for this story to make sense

Strip mining is regulated by what bureaucrats call a system of “cooperative federalism.” Under the federal Surface Mining Control and Reclamation Act, which passed in 1977, states could either enact their own program, which is just as effective as the federal act or sit back and allow the federal Office of Surface Mining to step in and regulate mining in their state. West Virginia chose to enact its own program. The Office of Surface Mining would have to approve the program by determining that it was as effective as the federal statute.

The program had to include some system—whether performance bonding or something else—that ensures that old mines are cleaned up. West Virginia’s system is described in the adjoining story; see the background information below.

When a state has its own program, the federal Office of Surface Mining has an obligation to conduct what it called “oversight.” This means that it reviews state programs, including West Virginia’s, to ensure that the state’s program is as effective as the federal law and that the state is enforcing its law.

This “cooperative federalism” is the reason that the federal Office of Surface Mining is routinely involved in controversies over how West Virginia is regulating strip mining. When West Virginia is not adequately regulating strip mining—because its law is inadequate or it is not enforcing its law—citizens enlist the aid of the Office of Surface Mining. Through letters, comments, lawsuits, or threats of lawsuits, citizens try to enlist the Office of Surface Mining’s help in seeing that West Virginia does an adequate job of regulating strip mining.  

That is what is going on here. The West Virginia Highlands Conservancy and the Sierra Club don’t think West Virginia is up to snuff in assuring that the money is available to clean up mines that are deserted. They are trying to get the Office of Surface Mining to do something about it.

What’s going on now

The current difficulty began in March 2020, when it became clear that a company called ERP Environmental was in trouble. It had over a hundred mines, but it was laying off workers and not doing its reclamation. Were the system working correctly, West Virginia would simply forfeit its bond and hire someone to do the reclamation. If there was not enough bond money, West Virginia could dip into the Special Reclamation Fund.

The system was not working. Bonds are posted by insurance companies; forfeiting that many bonds all at once would likely swamp the insurance companies that put up this type of bond. Even if West Virginia forfeited the bonds, the bond money would not be sufficient. The rest would have to come from the Special Reclamation Fund. The difficulty was that taking the money for a reclamation project this large would swamp the Special Reclamation Fund.

West Virginia responded by arranging for ERP to be placed in receivership.

This is where the West Virginia Highlands Conservancy and Sierra Club came in. Specifically, they noted that receiverships were not what the Office of Surface Mining approved as West Virginia’s method of assuring that mines were reclaimed. More broadly, they recognized that this is such a mess that West Virginia could not, or would not, solve it on its own. It needed the attention and encouragement from the Office of Surface Mining.

There was litigation over whether the Office of Surface Mining had to get involved. That was resolved, and now the Office of Surface Mining is involved. In the meantime, the West Virginia Legislature passed a statute requiring the Department of Environment Protection to establish a database showing current and future reclamation obligations.  

What is on the table right now is the Office of Surface Mining’s decision on whether or not to approve West Virginia’s program to ensure that old mines are reclaimed. The groups say no. They say that while the database is a nice first step, unless the database is made public, it won’t be effective. The groups also want West Virginia to make a written determination whether the Special Reclamation Fund is financially sound.  

What you really need to know

West Virginia’s system for assuring that coal mines are reclaimed is a mess and always has been. The performance bonds are not big enough; the Special Reclamation Fund is insolvent. When the coal industry was thriving, West Virginia could paper over the problem. If few mines ever failed, it didn’t matter that the bonds were inadequate.

Now that the industry is declining, papering no longer works. A database, even a public one, will not fix the underlying problem. Neither will an actuarial study.  

They will, however, document the scope of the problem and provide the state and groups with information they need for further advocacy and to work on solutions.

Thanks to the West Virginia Highlands Conservancy and the Sierra Club (and a big thanks to their lawyers), the rock is a little bit farther up the hill than it was a month ago. It is still a long way to the top.

Background

Note before you read: The accompanying story is only the latest chapter in a controversy that has been going on for decades. For at least 36 years (depending upon how one counts), the West Virginia Highlands Conservancy has been saying that the system West Virginia uses to assure that coal mines are reclaimed is inadequate. The Highlands Voice has had several stories describing the system. If you already know how that system works, skip this story.

The 1977 federal Surface Mining Control and Reclamation Act (SMCRA) included provisions that required companies to post a bond sufficient to complete reclamation if the company couldn’t or wouldn’t meet reclamation obligations. 

West Virginia met this requirement through an ‘alternative bonding system.’ Under this system, companies would post a flat per-acre fee designed to be relatively low. The bonds were always designed to be inadequate to do the reclamation. At least in theory, these inadequate bonds would be sufficient because West Virginia had its Special Reclamation Fund. All coal companies would pay into this fund based on the tons of coal they produced. If a company went under or disappeared, the Department of Environmental Protection could forfeit the inadequate bond and then take whatever it needed from the Special Reclamation Fund to pay the rest of the cost of reclamation.

For example, consider a company that had posted a $5,000 per acre bond, disappeared, and left unfinished reclamation work that would take $8,000 per acre. The Department of Environmental Protection would forfeit the $5,000 per acre bond and then take the additional $3,000 per acre from the Special Reclamation Fund.

This system only worked in theory. In actual practice, the rate at which companies pay into the Special Reclamation Fund has always been too low to fund all the reclamation at bond forfeiture sites.  

The Department of Environmental Protection has made it possible for the Special Reclamation Fund to limp along using various techniques. Sometimes it would do inadequate or incomplete reclamation. Occasionally it would stretch out the Fund’s obligations by pretending that a mine was only temporarily idle instead of deserted and ready for reclamation, paid for by the Fund. Mostly they kept their fingers crossed that they wouldn’t have to make several large payments from the Fund at the same time.

The spectre that has always hung over the Special Reclamation Fund is the possibility that a big operation will fail and the Fund will have to reclaim several large mines. So long as the mines the Department of Environmental Protection was reclaiming were small, it could juggle its obligations, delay some reclamation, etc., and keep the Fund going. If big mines started to go belly up, no amount of juggling could cover the Fund’s insolvency.

Photo: The Hobet Mine in Lincoln and Boone counties, West Virginia. Originally owned by Patriot Coal and now owned by ERP. (Appalachian Voices)