The practice of self-bonding for coal mines is under review as looming coal bankruptcies threaten to leave taxpayers covering billions of dollars in clean-up costs.
The federal Office of Surface Mining Reclamation and Enforcement (OSMRE) wants the public to weigh in on existing rules governing self-bonding. Bonds are required under federal law to ensure that mining companies can clean up after themselves and return the land to its pre-mining condition. The law allows for a number of bonding options including corporate surety bonds, collateral bonds (e.g., cash), and self-bonds. Self-bonding is essentially a giant IOU that coal companies can give to states as a guarantee of repayment.
Although historically, self-bonding was only an option for companies in good financial health, current market conditions have left the industry in financial distress with a number of big players declaring bankruptcy in the last couple of years. And here’s where the logic of self-bonding falls apart: because the practice of self-bonding, unlike the other kinds of bonds, doesn’t require separate surety or collateral, taxpayers are on the hook for covering billions in mining reclamation costs when companies aren’t able to pay up.
Due to these (and other) concerns, WildEarth Guardians filed a rulemaking petition in March asking for OSMRE to amend the existing rules to ensure that companies who self-bond are good for their money. As part of their consideration of the petition, OSMRE wants to know what you think. Comments must be submitted by June 20, 2016, by any of the following the directions on this site.