WV environmental groups sue Biden administration over state reclamation bonding concerns | Energy and Environment
The lawsuit alleges that the Office of Surface Mining Reclamation and Enforcement should have taken action toward stronger requirements for the program after the West Virginia Department of Environmental Protection notified the office of a significant change in the state’s reclamation program.
The department sent the notification after the environmental groups that filed Monday’s lawsuit had sued to compel it to do so, arguing that the department should have informed the office that some permit holders have or will become insolvent.
The groups agreed to have that lawsuit dismissed after West Virginia environmental regulators let the federal surface mining reclamation office know of a substantial change in its special reclamation fund on Dec. 30.
The goal of filing the lawsuit in the U.S. District Court for the Southern District of West Virginia, Sierra Club senior attorney Peter Morgan said Monday, is to get West Virginia to do more to ensure the full costs of reclamation as the coal industry declines, a long-term trend that is poised to strain the state’s special reclamation fund.
“There’s an increasing worry that a lot of this bonding system is a house of cards,” Morgan said. “When it collapses, the financial burden on the state of West Virginia is going to be really substantial.”
In March 2020, the DEP sued in Kanawha County Circuit Court to appoint a special receiver to assume responsibilities of ERP Environmental Fund Inc., a company that acquired more than 100 mining permits following Patriot Coal Corp.’s bankruptcy in 2015.
ERP laid off all its employees and management as of March 20, 2020, and ceased operations. That left its mining sites abandoned and public health and safety threatened, according to the DEP motion.
The DEP reported that the costs of reclaiming and remediating ERP’s sites totaled more than $230 million.
Indemnity National Insurance Co., which issued about $125 million in surety bonds backing ERP’s obligations under its mining permits, agreed to provide $1 million to Doss Special Receiver LLC. This was to fund Doss’ operations for an initial period of 90 days, leaving a $114- to $229-million deficit between reclamation costs and available money, depending on the DEP’s ability to collect ERP’s bonds.
The agency said the state Special Reclamation Fund would assume responsibility for reclaiming and remediating all of ERP’s mining sites, the environmental groups’ complaint says. That could potentially “overwhelm the fund, both financially and administratively,” with many of ERP’s sites “expected to begin to threaten imminent and identifiable harm to the environment and the public health and safety,” according to the complaint.
The Office of Surface Mining Reclamation and Enforcement could not be reached for comment Monday afternoon. DEP acting spokesman Terry Fletcher declined comment, noting that the department is not a party to the lawsuit.
The Surface Coal Mining and Reclamation Act, under which the federal government allows states to regulate their own surface coal mining and reclamation operations, while the Office of Surface Mining Reclamation and Enforcement maintains some oversight to keep state programs in compliance with the federal law, was enacted in 1977.
“It will take strong federal oversight by the Office of Surface Mining to bring WVDEP into compliance with the law, insist that industry bear the full cost of their actions and spare the citizens of West Virginia further harm from unreclaimed and polluting mining operations,” Cindy Rank, of the West Virginia Highlands Conservancy, said in a statement.
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