Rep. Cartwright Introduces Legislation to Prevent Coal Companies from Pushing Their Cleanup Responsibilities to Taxpayers
Washington, DC – Today, U.S. Representative Matt Cartwright introduced the bicameral Coal Cleanup Taxpayer Protection Act, H.R. 5500, legislation that would prohibit the practice of self-bonding nationwide.
U.S. Senator Maria Cantwell (D-Wash.), Ranking Member of the Senate Energy and Natural Resources Committee, has introduced companion legislation in the Senate.
“The practice of self-bonding must end. Many states currently ban the practice of self-bonding; the rest of the country must follow suit,” Rep. Cartwright said. “Coal companies which once seemed financially secure and made frequent use of self-bonding are now declaring bankruptcy. This leaves the taxpayers on the hook for clean-up costs totaling billions of dollars.”
Just yesterday, Arch Coal Inc. announced a plan to emerge from bankruptcy after a majority of senior creditors signed off on the deal. The company had about $485.5 million in environmental reclamation costs that it had promised to pay through self-bonding. However, Arch granted the state of Wyoming a $75 million claim against the company's cleanup obligations.
The Office of Surface Mining and Reclamation Enforcement (OSMRE) is tasked with ensuring that mining companies fulfill their legal obligation to clean up and reclaim the land after they are through mining. The Surface Mining Control and Reclamation Act allows OSMRE and states with programs approved by OSMRE to let financially healthy companies back up their reclamation obligations with a promise instead of sureties or collateral. These financial promises are called “self-bonds.”
At a recent hearing before the Senate Committee on Energy and Natural Resources, Secretary of the Interior Sally Jewell said that “there’s a very significant problem and risk to the taxpayer with the high-profile bankruptcies that have taken place recently with coal companies.”
Earlier this week Cartwright, along with U.S. Representatives Debbie Dingell (MI-12) and Raúl M. Grijalva (AZ-03) – ranking members of the House Natural Resources Oversight and Investigations Subcommittee and the full committee, respectively – led eight colleagues in sending a letter to Interior Secretary Sally Jewell urging immediate action to prevent major coal companies from further offloading billions of dollars of self-bonded reclamation obligations onto taxpayers.
Additionally, the bill would require the conversion of current self-bonds to surety or collateral bonds, and improve the bonding program by shoring up surety capitalization and collateral requirements.
"We enthusiastically applaud Congressman Cartwright's leadership in crafting this House bill to end the flagrantly irresponsible practice of self-bonding, which essentially uses working families and honest taxpayers as financial backstops for risky business decisions by coal executives. In the wake of numerous bankruptcies, this bill will help hold coal companies accountable for cleaning up the lands that they have destroyed. Coal companies should not be allowed to walk away from the messes they create because of a deeply flawed system that can leave taxpayers holding the bag," said Michael Brune, Executive Director, Sierra Club.
“Since our founding, our organization has advocated for strong reclamation standards and bond requirements at coal mines. Unfortunately, Wyoming mines are some of the largest users of self-bonds, which have become nothing more than unfulfilled promises with company bankruptcies. With over $2 billion in outstanding reclamation liability in Wyoming, this is important legislation to close the self-bonding loophole and minimize financial risks to taxpayers,” said Bob LeResche, Clearmont, Wyo., Powder River Basin Resource Council Chair and Western Organization of Resource Councils Board Member
Original Cosponsors (25): Beyer, Blumenauer, Capps, Cardenas, Clark, Connolly, Dingell, Edwards, Ellison, Farr, Fattah, Grijalva, Honda, Huffman, Bernice Johnson, Langevin, Lawrence, Barbara Lee, Lieu, Lowenthal, McCollum, McDermott, McGovern, Holmes Norton, Napolitano, Pocan, Polis, Slaughter, Tonko, Tsongas, Van Hollen, Watson Coleman
Supporting Organizations: Western Organization of Resource Councils (WORC), Powder River Basin Resource Council, National Wildlife Federation, Natural Resources Defense Council (NRDC), Environmental Law & Policy Center, Clean Water Alliance, 350 Colorado, Sierra Club, Earthjustice, League of Conservation Voters, Clean Energy Action, Greenpeace USA, New Mexico Environmental Law Center, Northern Plains Resource Council, Progressive Leadership Alliance of Nevada, The Lands Council, WildEarth Guardians, The Wilderness Society, Sightline Institute