Wyoming Advisory Board Advances Good Self-bonding Rules

As demand for coal continues to fall, new rules reduce the threat that Wyoming taxpayers will be stuck with cleanup costs when coal mines go bankrupt.

On September 19, the Wyoming Dept. of Environmental Quality’s (DEQ) Land Quality Advisory Board advanced a crucial rulemaking proposal that would restrict self-bonding in the state after having rejected a similar proposal earlier in the year.

The rulemaking package seeks to lock in the status quo following the bankruptcies of Peabody Energy, Arch Coal, and Alpha Natural Resources, i.e., in which those three companies and Cloud Peak Energy replaced $2.5 billion of self-bonds with more financially secure surety bonds. Several companies remain self-bonded. This is a big benefit to the state, as the liquidation of a bankrupt coal company insured only through self-bonds would leave the state and taxpayers on the hook for to clean up that company’s mine sites.

The only vote among the five-person board against advancing the proposal was an employee of Peabody Energy, who was largely responsible for the outcome at the board’s March meeting. At that meeting, the board voted 5-0 to send the proposal back to DEQ staff with instructions to incorporate elements proposed by the Wyoming Mining Association, which would have greatly watered down the rule’s stringency. His continued opposition to the proposal likely stems from Peabody’s stated posture towards self-bonding post-bankruptcy, when its executives repeatedly defended their right to return to self-bonding in the future.

Instead of caving under corporate pressure, the DEQ staff adjusted only a few provisions that did not substantially weaken the proposal’s limits on self-bonding, and mounted an assertive defense of the rules before the advisory board.

Throughout the process, Powder River collected a second round of grassroots comments in favor of DEQ’s proposal. Instead of caving under corporate pressure, the DEQ staff adjusted only a few provisions that did not substantially weaken the proposal’s limits on self-bonding, and mounted an assertive defense of the rules before the advisory board. The board voted 4-1 in favor of advancing the rules.

The rules are not yet finalized, as they must go through an additional public comment period and review by the Wyoming Environmental Quality Council, the Governor, and review by the Joint Minerals Committee of the Wyoming State Legislature. The fact that this stronger rules package passed at all is a significant development, as Wyoming has historically accepted the highest self-bonding rate of any coal mining state.

Presumably, the state regulators are not keen to repeat their experience of the Peabody, Arch and Alpha bankruptcies. That situation nearly left the state high and dry, with financial coverage of only a fraction of the estimated cleanup costs.

WORC continues to support Powder River as they shepherd rules that restrict self-bonding across the finish line. Final rules may be released as soon as the first quarter of 2019.

 


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