Thursday, April 21, 2016
Ind. Gov't. - "Can coal companies afford to clean up coal country?"
An April 2, 2016 story in the Washington Post, reported by Steven Mufson and Joby Warrick, began:
A worsening financial crisis for the nation’s biggest coal companies is sparking concerns that U.S. taxpayers could be stuck with hundreds of millions, if not billions, of dollars in cleanup costs across a landscape of shuttered mines stretching from Appalachia to the northern Plains.Subsequently, Peabody also declared bankruptcy, and on April 13th the same WAPO reporters had a story headed "How coal titan Peabody, the world’s largest, fell into bankruptcy." A quote from the second half of the story:
Worries about huge liabilities associated with hundreds of polluted mine sites have mounted as Peabody Energy, the world’s largest publicly traded coal company, was forced to appeal to creditors for an extra 30 days to pay its debts. Two of the four other biggest U.S. coal companies have declared bankruptcy in the past six months. * * *
The biggest coal companies typically pay third parties to ensure that mine sites are cleaned up in the event of financial hardship. But in recent years, many coal companies have relied on a cheaper technique called “self-bonding,” pledging only their own names and financial wherewithal to guarantee their cleanup obligations.
With mounting losses and debt loads, the companies do not have enough money to pay for all their obligations, and self-bonding is “not worth [the] paper [it’s] written on,” Steve Jakubowski, a bankruptcy lawyer with the firm Robbins, Salomon & Patt, said in an email. In a bankruptcy, where Alpha Natural Resources is now, a judge can decide which creditors are paid and how much — and state and federal governments could be left holding the bag for reclamation costs.
Peabody is the latest in a string of coal-company bankruptcies that have also engulfed other industry leaders, including Alpha Natural Resources and Arch Coal. The upheaval has raised concerns that the industry will not be able to afford to pay for cleanup costs related to its many mines across the country.See also this March 2 ILB post quoting a story from the Washington Indiana Times Herald headed "'King Coal' losing crown: Coal industry in Daviess County dwindling."
“Bankruptcy restructuring could provide coal companies with a way of escaping obligations to restore land,” reported The Washington Post’s Steven Mufson and Joby Warrick earlier this month. The issue has even drawn attention in the U.S. Senate. “American taxpayers should not be left on the hook to clean up coal mines when coal companies go bankrupt. The pollution they create is their responsibility to clean up, and we should have laws on the books that force them to do that,” said Senator Maria Cantwell (D-Wa.), ranking member of the U.S. Senate Energy and Natural Resources Committee, in a statement to the Post.
However, Peabody said Wednesday that the bankruptcy filing “does not change Peabody’s approach toward best practices in mining and its focus on sustainability to create high-quality land restoration for generations that follow.”