Surprise! WV Mine Reclamation Authority On Edge Of Insolvency Thanks To Neglect, Lack Of Compliance
West Virginia lawmakers and environmental regulators risk letting the state’s mining reclamation program slip into insolvency through gaping holes in statutory and permitting oversight, according to a new state legislative audit report. The audit report presented to a joint panel of state senators and delegates Monday by the Post Audit Division calls on the state Legislature to commission a study to evaluate the state’s coal mining reclamation program.
The report finds that the state Department of Environmental Protection has failed to comply with state and federal law in its reclamation program oversight, resulting in missed opportunities to financially shore up a program that will keep requiring hundreds of millions of dollars to reclaim permit sites per federal regulations. The state mining reclamation program has no known contingency plans if reclamation funds were to become insolvent, the 80-page report cautions. “If the current funding sources for the program were to prove insufficient to meet the demands of reclamation, the resulting additional financial obligations could prove to be detrimental to the state’s budget,” the report warns in bold letters.
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The Department of Environmental Protection admitted in a lawsuit that it filed in March 2020 in Kanawha County Circuit Court against ERP Environmental Fund Inc., a coal mining company, that assuming responsibility for reclaiming and remediating all of ERP’s mining sites could potentially overwhelm the state’s special reclamation fund both financially and administratively.
The department reported that the costs of reclaiming and remediating ERP’s sites totaled more than $230 million. ERP laid off all its employees and management as of March 2020 and ceased operations, leaving its mining sites abandoned and public health and safety threatened, according to the department’s lawsuit to appoint a special receiver to assume ERP’s responsibilities. ERP acquired more than 100 mining permits following Patriot Coal Corp.’s bankruptcy in 2015. The audit report recommends that the Department of Environmental Protection adjust bonding rates so that reclamation costs don’t become a “greater financial liability to the state.” The department noted in a response to the audit’s findings included in the report that only the Legislature has the statutory authority to change bonding rates.
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