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Congressman Matt Cartwright

Representing the 17th District of Pennsylvania

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Cartwright Applauds GAO Recommendation to End Coal Companies’ Self-Insuring for Environmental Cleanup

Apr 5, 2018
Press Release

Washington, DC – U.S. Representative Matt Cartwright offered his support for the U.S. Government Accountability Office’s (GAO) recommendation, announced today, that the Surface Mining Control and Reclamation Act (SMCRA) be amended to prohibit coal companies from the practice of self-bonding for coal mine reclamation – or, in other words, self-insuring for environmental cleanup.  Department of the Interior's Office of Surface Mining Reclamation and Enforcement (OSMRE) currently holds $1.2 billion in self-bonds for mine reclamation.

“For too long, some coal companies, including ones that become insolvent, have used only their own financial assets as an assurance for environmental cleanup needed as a result of their operations,” said Congressman Cartwright, a member of the House Appropriations Committee.  “Changing current law to prohibit self-bonding would ensure that coal companies are always required to provide adequate funds to complete mine reclamation.”

Under the current system, when coal mining companies go out of business or become insolvent, self-bond assets acting as collateral are invariably depleted as well.  At that point, taxpayers must foot the bill for cleanup necessary to protect public health and safety – and the local environment – even though the mine-lands are private sector assets.  The GAO report released today found that “the financial risk to government and the amount of oversight needed for self-bonds are relatively high compared to other forms of financial assurances,” and that no other energy or mineral extraction sector, other than coal, allows for the practice of self-bonding.

Earlier this year, Representative Cartwright introduced the Coal Cleanup Taxpayer Protection Act, which amends SMCRA to prohibit the practice of coal company self-bonding.

“Passage of my bill would fix this problem of taxpayers ending up on the hook for expensive messes they did not make,” said Cartwright.  “I urge my colleagues in the House to take the advice the GAO and support it.”

The GAO’s report can be found here:  https://www.gao.gov/products/GAO-18-305