1 comments
The Virginia Department of Mines, Minerals and Energy is accepting public comments for the review of Coal Surface Mining regulations (4 VAC 25-130). These regulations are absolutely essential for the protection of public health and safety and for the welfare of Virginia's coalfields region, and they should be amended to increase citizen engagement, strengthen environmental protections, and ensure that financially unstable mining companies do not walk away from reclamation obligations.
Section 817.131 should be amended to end the indefinite granting of extensions for permits in Temporary Cessation. Temporary Cessation should be limited to one six-month grace period, after which the company must resume operations or begin reclamation. Continually renewing financially unstable permits in Temporary Cessation makes it more likely that such permits will slip into various conditions of regulatory non-compliance and eventually go into bond forfeiture.
At least 4 major coal companies have declared bankruptcy in the past few years, and this trend is projected to continue. To ensure that financially unstable mining companies don’t leave the state saddled with millions of dollars of reclamation liabilities, it is imperative that Virginia shore up and strengthen coal mine bonding mechanisms. The persistent problems associated with companies owned by West Virginia Governor Jim Justice underscores and exemplifies the necessity of these regulations reforms.
Section 801.12 The Virginia pool bond is inadequate and should be amended to eliminate the $20 million cap on the pool bond fund. A 2011 study concluded that the pool bond fund is insufficient (by many tens of millions of dollars) to handle bankruptcies within the coal industry. Eliminating the pool bond cap would allow for timely adjustments to maintain solvency of the fund in the face of market volatility and mining company bankruptcies. In 2017, the Coal Surface Mine Reclamation Advisory Board identified Jim Justice as the greatest single threat to the pool bond fund.
Section 801.13 The state legislature eliminated the practice of self bonding in 2014, but some companies - including several owned by Jim Justice - still hold self-bonded permits in Virginia. Regulations should be updated to reflect state legislation, and mining companies should be compelled to replace self-bonds with full-cost bonds. As of April 2017, there were still 15,000 acres of surface mine permits under self-bonds in Virginia, totaling more than $24 million in reclamation liabilities. This is a particular problem because the legislature’s changes have eliminated all regulations governing the operation of self-bonds, leaving these mines in a regulatory vacuum. Should Jim Justice’s associated companies go bankrupt, this alone would zero out the pool bond fund.
Section 800.20 should be amended to require that surety companies provide an annual report of their financial health to the DMME, and surety bonds should be assessed based on full cost of actual reclamation needs, not calculated by a convoluted formula. Surety companies are subject to the same market volatility as mining companies. Should a large enough company fail—or multiple smaller companies fail—during an economic downturn, surety companies themselves could go bankrupt. An annual report to the DMME could help the state to assess the financial health of surety companies.
Section 800.50 should be amended so that once a compliance schedule is issued in order to avoid bond forfeiture, it cannot be modified. If there is need for further modification, bond forfeiture proceedings should commence. The DMME has entered into five compliance agreements with Jim Justice mines; this has delayed and minimized enforcement of numerous Notices of Violation and Cessation Orders since 2014. This situation is unacceptable and does not provide an incentive to avoid new violations. Violations on one particular Jim Justice mine dating from the original compliance agreement in 2014 still have not been mitigated. Should any new violations occur on Jim Justice mines, this should immediately trigger bond forfeiture proceedings. Should the cost of reclamation jeopardize the bond pool, the DMME should ask the attorney general to file suit pursing Jim Justice’s personal assets under 4VAC25-130-800.50. (d)(1)
Section 4VAC25-130-842.12 should be amended to better accommodate citizen participation when accompanying inspectors of mine sites following a complaint. Specifically, the code should clarify that a preponderance of evidence is not necessary to justify a citizen complaint or the right of a citizen to gather evidence during an inspection of a mine site following a complaint. This would bring Virginia’s regulations into conformity with federal statutes.
The coal economy has declined dramatically in southwest Virginia. Many mines are still permitted, but more and more of these permits are in a state of suspended animation, neither producing coal nor undergoing reclamation. Current environmental protections and performance standards should remain in place or be strengthened, and the aforementioned modifications to bonding and Temporary Cessation practices should be implemented. Failing to apply these changes to Virginia’s coal surface mining regulatory framework could result in hundreds of millions of dollars of reclamation liability (for hundreds of thousands of acres) falling to the state if and when bad actors like Jim Justice cut and run.