Press Releases

Today, Representatives Matt Cartwright (PA-08) and Debbie Dingell (MI-12) introduced legislation that will protect American taxpayers by prohibiting the dangerous practice of “self-bonding” in the coal sector.

The Coal Cleanup Taxpayer Protection Act will ensure coal companies restore mine lands across the country to their original state after completing their mining operations. The bill will prohibit “self-bonding,” which allows coal companies to promise to cover these cleanup costs without putting up sureties or collateral. This dangerous practice leaves regulators with little to no recourse if a coal company goes bankrupt, forcing the American people to fund unfinished cleanup efforts. The bill also tightens rules on other types of bonding that have been shown to leave taxpayers paying for cleanup costs.

“We must protect American taxpayers from risky practices like self-bonding, collateral bonding, and pool bonding,” said Congressman Cartwright, a member of the House Appropriations Committee. “We have seen too many coal companies file for bankruptcy and break their promise to clean up mine sites after they’ve made their profits, leaving the American people on the hook for funding these important reclamation efforts. We can’t allow these dangerous practices to continue.”

“If you can pay to build it, you can pay to take it down,” said Congresswoman Dingell. “Non-operating mines can continue to have environmental impacts on our water, air, and lakes. That is why we must do all we can to clean up these sites and not foot the bill to the taxpayers.”

Between 2015 and 2016, the country’s three largest coal companies (Alpha Natural Resources, Arch Coal, and Peabody Energy) filed for bankruptcy, leaving $2.3 billion in outstanding self-bonds. This summer, Revelation Energy and Blackjewel filed for bankruptcy, putting nearly 1,700 miners out of work, leaving the fate of thousands of acres of mines hanging in the balance, and likely costing taxpayers hundreds of millions of dollars in outstanding reclamation costs.

Specifically, the Coal Cleanup Taxpayer Protection Act would:

• Eliminate the practice of self-bonding;
• Require each state to submit an actuarial study proving a proposed bond pool will be financially sound over the next five years, and to perform a subsequent study every five years;
• Require the disclosure of any appraisal or valuation of real property or equipment used for bonding purposes, clarifying that bonding collateral that is not cash, letters of credit, certificates of deposit, or treasury bonds must be re-valued at least every three years.

The bill is supported by many organizations including: Natural Resources Defense Council (NRDC), Earthjustice, Citizens Coal Council, Western Organization of Resource Councils (WORC), Powder River Basin Resource Council, Northern Plains Resource Council, Appalachian Citizens' Law Center (ACLC), Western Colorado Alliance, Foundation for Pennsylvania Watersheds, and Appalachian Voices.

“The whole idea of self-bonding is a loophole and a farce,” said Bob LeResche, Vice Chair of the Powder River Basin Resource Council and board member of the Western Organization of Resource Councils. “Congress can help states prepare for more coal company bankruptcies and the permanent closure of coal mines by ending self-bonding and tightening the rules for collateral bonds. Coal companies should not be allowed to offload mine cleanup costs onto taxpayers and states.”

Background:

• A “self-bond” is a promise by a coal company to pay mine land reclamation costs after finishing its operations, but one that is not backed up by sureties or collateral.
• Self-bonds are financial obligations backed only by the company name and its financial health.
• “Bond pools” involve multiple coal companies paying a fraction of their anticipated reclamation costs into a common pool, which is then used to pay to clean up abandoned mines in the event of bankruptcy. However, most bond pools do not have enough funds to cover reclamation should multiple companies go bankrupt at the same time.
• The role of ensuring that mining companies fulfill their legal obligation to clean up and reclaim the land after they are finished mining falls on the Office of Surface Mining and Reclamation Enforcement (OSMRE). 
• Dozens of self-bonded companies are currently in bankruptcy court because they weren’t as financially secure as believed.  When a self-bonded company goes bankrupt, the American taxpayer is left to pay for the cleanup cost.
• Alternative bonding approaches, such as self-bonds and bond pools, have left regulators with no recourse when a coal company goes bankrupt.

###