Mine environmental risk grows with bankruptcies in big coal
(AP) — As more coal companies file for bankruptcy, it's increasingly likely that taxpayers will be stuck with the very high costs of preventing abandoned mines from becoming environmental disasters.
Because of self-bonding, billions of dollars in legally required reclamation funding exist only as IOUs, without dedicated assets or bonds backed by third-party investors.
The company's plan would leave a reorganized Alpha without a reliable profit stream to address reclamation in West Virginia, the state's attorneys told the judge in April.
An Alpha spokesman didn't return a request for comment, while spokespeople for Arch and Peabody emphasized their companies' commitment to reclamation that occurs as part of day-to-day coal mining operations.
Many American utilities will need coal to generate power for decades to come, but low prices for natural gas and increasingly cheaper renewable energy have driven down coal's share of the nation's electricity portfolio from half to about a third in the past decade.
Coal's prospects are so grim that major lenders including JPMorgan Chase, Bank of America, Citigroup, Morgan Stanley and Wells Fargo no longer plan to finance new coal mines or coal-fired power plants.
The 1977 Surface Mining and Reclamation Act enabled companies to open strip mines on the condition that assets be set aside to contain any pollution and return the mines to something resembling the pre-existing landscape.