Over the past 30 years, coal companies have been playing fast and loose with our land, water, and pocketbooks by using a loophole in our federal laws that allows them to issue non-binding IOUs, instead of purchasing reliable insurance, to clean up dangerous coal mines if they go out of business. This reckless practice is known as self bonding.
Since there is nothing backing up these IOUs except the companies’ own impermanent balance sheets and the legal equivalent of a pinky swear, when self bonded coal companies go out of business, working families and honest taxpayers are left to foot the bill for cleaning up (also known as reclaiming) dangerous coal mines, while coal companies get off scot-free.
This horribly irresponsible practice has been so prevalent that, over the years, coal companies have racked up billions of dollars worth of mining liabilities without providing any assurance that the money will be there to finish the job of reclaiming their mining sites.
Fortunately, the federal Department of Interior is reviewing self bonding and considering making changes to the process. That’s why this week, on the last week of the Office of Surface Mining, Reclamation, and Enforcement’s (OSMRE) comment period on self bonding, we are standing up and demanding the federal government put a stop to it.
On Wednesday, more than 37,000 Sierra Club members and supporters submitted comments to OSMRE, calling on them to end the practice of self-bonding. Sierra Club volunteers also dropped off a check for $3.86 billion at OSMRE’s headquarters, reminding administrators of the enormous amount in self-bonded coal liabilities still outstanding across the US.
While this was going on, Sierra Club and our partners also made an aggressive media push that included holding a teleconference outlining the significant risks to letting this practice continue, and also placing ads saying as much in a popular Washington, D.C. newspaper frequented by policy experts. This week, we wanted to make clear that it’s not OK to just walk away from land you’ve destroyed, polluted, and then profited from, while leaving your neighbors to foot the bill for billions of dollars worth of mining liabilities.
The need to end self bonding is especially urgent given the ongoing wave of coal company bankruptcies -- which has claimed some of the world’s biggest coal companies like Peabody Energy, Arch Coal, and Alpha Natural Resources -- and the real danger these coal companies’ finances pose to taxpayers. After all, $2.4 billion of the $3.86 billion in outstanding coal mining liabilities across the country is held by bankrupt coal companies.
Unfortunately, it doesn’t stop with the costs of reclaiming coal mines. On top of the billions of dollars Americans must pay for these unreclaimed mines, the sites themselves can also be highly polluting and dangerous, and leaving them unreclaimed poses serious health risks to surrounding communities. They also pose an economic threat, because leaving them bare, open, and unreclaimed makes it very hard for communities to attract and support other forms of economic development and opportunity, which is urgently needed in coal country, including here in my home state of West Virginia.
We’re calling on OSMRE to immediately issue a new guidance that no new self-bonds should be issued to any coal company and make clear that bankrupt mine operators must not self-bond as they emerge from bankruptcy.
We’re committed to making sure local families are protected from irresponsible coal executives who are threatening to leave behind dangerous, polluting mine sites that will plague communities for generations to come.
Self-bonding is about simple fairness, after all: if you destroy the land, you clean it up -- especially if you’ve made big profits in the process. You don’t walk away and leave it to your neighbor. It’s time for self bonding to stop, once and for all.