Wyoming's Powder River Basin
By Joshua Mantell
This is the agency’s first noteworthy attempt at rectifying the outdated and out of touch policy of self-bonding. It is another crucial step towards bringing the federal coal program into the 21st century and properly valuing our shared lands.
OSMRE, an agency within the Department of the Interior, put out its first-ever Policy Advisory urging state governments to reassess how coal companies pay for reclaiming federal land impacted by coal mining. A common practice, known as “self-bonding” has come under scrutiny recently because of the spate of bankruptcies that are plaguing the nation’s coal industry.
Before beginning a new mining operation, companies are supposed to post a financial bond as collateral to ensure that funding is available for the necessary environmental cleanup. Many companies have been allowed to put up their own corporate value as collateral in a process called “self-bonding.” However, companies historically haven’t followed through on their promises, leaving taxpayers on the hook. A 2015 study found that out of 450 square miles of mined land in North Dakota, Montana, and Wyoming, only 46 square miles had been fully reclaimed, restoring land that has been impacted to a previous undisturbed state, leaving hundreds of square miles of impacted land that is not returned to prior standards.
The federal government realized that over 44 percent of coal produced in the United States since 2012 came from a company in financial turmoil, specifically a company that has recently filed for bankruptcy. To protect taxpayers and ensure that mined land is cleaned up new guidance was needed.
OSMRE put forward three important guidelines for state agencies to follow:
- Authorities that have current bonds on the books need to go back and ensure that companies who have promised to reclaim lands have proper financial health to follow through on their promises.
- No new self-bonds can be accepted for any permit to mine until coal production and the coal market stabilizes, which is not likely until at least 2021.
- If a company has restructured under bankruptcy and created a new company, that new company cannot be eligible to self-bond for at least 5 years.
These are significant protections for the American people, who would be on the hook to clean up the damaged land that the coal industry has left behind, whether they know it or not. Ensuring that individual coal companies have the financial health to truly follow through on their promises is crucial for a modern and fair federal coal program.
By following through on the Policy Advisory, and continuing the process of comprehensively reviewing and reforming the public lands coal program, the federal government can show that it recognizes the importance of shared lands to all of us. Most importantly, the government can show its dedication to moving towards a more sustainable and cleaner future.