Will Strip Mine Act Live Up to its Promise?

As we mark 40 years with the federal coal strip mine act, there has never been a more crucial moment for its promise—that every acre of land mined for coal will be reclaimed—to be fulfilled.

On August 3, 1977, the Surface Mining Control and Reclamation Act (SMCRA) went into effect. The strip mine act governs coal mining and reclamation operations nationwide. SMCRA protects the water, land, and air for mine neighbors and the public in coal communities. It was won by a coalition of coal mine neighbors from across the country—including ranchers, farmers, and water users from Wyoming, Montana, and North Dakota. Many of these grassroots leaders were members of organizations that eventually formed WORC.

“I was one of a number of westerners who joined people from Appalachia lobbying for years to pass SMCRA,” recounts Ellen Pfister of Shepherd, Mont., a board member of Northern Plains Resource Council. “We wanted to prevent in the West the kind of damage that was occurring in the East. The old spoils at Colstrip were a sign of what could happen if we failed. We wanted our rangeland reclaimed and functioning. SMCRA has not been perfectly enforced, but the land is so much better off than it would have been without it. We saw this law as essential to protecting our way of life, livelihoods, and the productive future of the state of Montana.”

“The coal industry is in continuing decline as its markets slowly shrink,” said Bob LeResche of Clearmont, Wyo., Chair of the Powder River Basin Resource Council. “We must have full reclamation at every mine as the industry contracts. This will extend jobs in the industry and restore mined land and water resources for use after strip-mining is gone.”

Strip mine act requires mine reclamation

SMCRA requires robust reclamation (think: clean-up) of mined lands, and that reclamation occur as mining continues. Under SMCRA, mine operators must successfully regrade and revegetate mined land and replace damaged surface water and groundwater resources, all under the supervision of state regulators. The strip mine act provided for reclamation bonds—mine operators must put up funds that are available to the state to reclaim the land if the operator abandons their mine without cleaning up. Central to the entire process is the opportunity for public comments and involvement, from the early stage of mine permitting all the way through the release of reclamation bonds if reclamation is successfully completed.

How far along is reclamation?

WORC’s 2015 report, Undermined Promise II, found that coal companies have fallen far behind in reclaiming mines, and, with the coal industry on shaky financial ground, the public faces increasing liability for massive reclamation costs of more than $3.5 billion and damage to landscapes, wildlife and crucial water supplies.

Federal data reveal that, since 1977, 609 square miles of land have been strip-mined throughout the West. However, only 97 square miles (16%) have been fully reclaimed and released from reclamation bond, and only 348 square miles (57%) have been revegetated.

This leaves a lot of reclamation work yet to be done, and time is ticking. Coal production peaked in 2008 in the Powder River Basin and across the country. Coal’s role as a baseload fuel for electricity is being eroded by market forces choosing cheaper natural gas and renewable energy, including wind and solar. Coal company executives made the bad business decision to take on a lot of debt at the top of the coal market around 2008 and 2009, and the coal industry is still emerging from a wave of financial collapse and layoffs. The country’s three largest companies, Peabody Energy, Arch Coal, and Alpha Natural Resources, filed for bankruptcy in 2015 and 2016. Together, these three companies mined 40% of the country’s coal in 2015, much of it from beneath Wyoming’s grasslands.

Dwindling market

Although some powerful business people have declared that “coal is dead” (Jim Barry, Global Head of Blackrock Infrastructure Investment Group, to the Australian Financial Review) or that “coal doesn’t even make that much sense anymore as a feedstock” (Gary Cohn, National Economic Council Director, to reporters ahead of the G7 summit last May), many industry experts expect coal use will unwind over many years. That means there’s time for reclamation to catch up with mining. At the same time, dwindling revenue from coal mining limits the cash companies have on hand to complete reclamation, or even to continue mining operations.

Weak markets are already claiming smaller coal mines. Recently, a company that operated a small underground mine in Utah forfeited its bond to state regulators, which will now take over cleanup of the facility. The bond? A condominium in Salt Lake City. The arrangement is technically allowed under the state’s collateral bonding program, but it illuminates the risks of insufficient bonding: the condo sold for less than the estimated cost of reclamation. Although state officials claim the proceeds will cover reclamation costs, the overriding need for reliable and secure reclamation bonds is clear.

Replacing self-bonds

Fortunately, the last twelve months have seen significant wins that bolster bonding in the state that produces the most coal each year, Wyoming. In Wyoming, 282 square miles of land have been mined since 1977. Of that, only 29 square miles (10%) have been fully reclaimed, and 141 square miles (50%) have been revegetated. Under pressure from Powder River Basin Resource Council, WORC, and federal regulators, $2.4 billion of self-bonds were replaced in Wyoming during the bankruptcy proceedings of Alpha, Arch, and Peabody.

Self-bonds don’t turn over any collateral to state regulators, and therefore do not provide any financial incentive to complete reclamation. Because of self-bond replacement, 141 square miles of Wyoming mines that have not yet been revegetated stand a chance to see full reclamation, even in the catastrophic event of bond forfeiture.

Reliable, collateralized reclamation bonds mean reclamation jobs. In a forfeiture without adequate bond money, there won’t be enough in funds to hire workers to finish backfilling mine pits, regrading spoils, replacing topsoil, reseeding grasses and replanting shrubs, or monitoring the work to ensure success. An agricultural economy existed before the Western coal boom, and organized people will determine whether the reclamation and bonding provisions of the strip mine act will keep the law’s promise: that every acre mined for coal will be reclaimed, allowing an agricultural economy to flourish after mining.

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