Bonding Program Settlement Reached After 17 Years

(Harrisburg, PA) Jan. 19, 2017 – A settlement 17 years in the making has been reached between a coalition of conservation organizations represented by PennFuture and state and federal coal mine regulators in a case that transformed the way Pennsylvania ensures that all regulated coal mines will be fully and properly reclaimed.

The case involves Pennsylvania’s “bonding program” for coal mines – the regulatory program that requires mine operators to provide financial guarantees for restoring the land at every coal mine regulated under the federal Surface Mining Control and Reclamation Act and treating any polluted post-mining discharges from such mines in perpetuity. 

The victory has come in several stages over the course of the last 17 years. The substantial overhaul of Pennsylvania’s bonding program since 1999 has largely addressed the deficiencies that motivated the 1999 citizen suit. 

When the case began in 1999, Pennsylvania’s bonding program suffered from several major problems. Bond amounts were often far below the costs of land reclamation because the Pennsylvania Department of Environmental Resources (now the Department of Environmental Protection) had not updated its bond calculation guidelines since 1981. Bonds generally did not cover the costs of treating post-mining discharges, and the few financial guarantees that did were designed to provide treatment for at most, 50 years. Further, a statewide fund designed to backstop the bonds posted for certain kinds of operations as part of the state’s “alternative” bonding system (ABS) had been woefully underfunded for nearly a decade, resulting in dozens of untreated, polluting discharges to Pennsylvania waterways. 

“After years of inaction by state and federal mine regulators, our coalition forced them to make significant improvements to Pennsylvania’s bonding program,” said Kurt Weist, Senior Attorney at PennFuture. “Government officials and mine operators deserve credit for their efforts in addressing some challenging problems, but without the impetus of this lawsuit and the perseverance of our coalition, bureaucratic inertia would have resulted in many more unreclaimed mines and untreated discharges.”

Not all of the changes PADEP sought to make, however, were improvements. “We had to fight off some bad ideas along the way,” said Weist. “Most important, our coalition prevented PADEP from essentially declaring the alternative bonding system bankrupt and liquidating it, and instead forced PADEP to adopt measures to fully cover that system’s reclamation liabilities.”

The case was initiated by the filing of a complaint in the U.S. District Court for the Middle District of Pennsylvania on October 13, 1999. PennFuture filed the complaint on behalf of a coalition of five organizations: the Pennsylvania Federation of Sportsmen’s Clubs, the Pennsylvania Chapter of the Sierra Club, Pennsylvania Trout, Mountain Watershed Association, and the Center for Coalfield Justice.

Much has happened in the ensuing 17 years, and in response to the coalition’s persistent efforts, Pennsylvania revamped its bonding program in ways designed to provide the guarantees of complete reclamation demanded by the SMCRA.

With respect to land reclamation, Pennsylvania’s adoption of detailed, task-based bond rate guidelines that are updated annually based on the winning bids for mine reclamation contracts has rectified two basic problems with the previous system: the failure to update the guidelines annually, as required by law, and the inaccuracy of the guidelines, which led to significant underestimation of reclamation costs for certain kinds of operations. 

With respect to mine drainage treatment, today there are hundreds of millions of dollars in financial guarantees in place that did not exist when the lawsuit was filed in 1999, and those guarantees are calculated to cover the costs of treatment in perpetuity.  In addition, Pennsylvania has established a set of state-managed trust accounts and funding mechanisms to provide treatment for more than 100 discharges from more than 70 “ABS Legacy Sites” – mines that had been part of the state’s alternative bonding system.  

In accordance with the case-ending settlement, PADEP already has submitted for federal approval an amendment to the state’s coal mine regulatory program.  One feature of that amendment is a definitive list of the ABS Legacy Sites, coupled with a requirement that PADEP publish public notice of any changes to that list. The amendment also identifies the known “Potential ABS Legacy Sites” – currently permitted mines that would become the responsibility of the state-managed trust accounts if the mine operators fail to post full-cost mine drainage treatment guarantees. 

Perhaps most important, the amendment sets a deadline of December 31, 2018 for PADEP to complete land reclamation at one set of mines formerly bonded under the ABS, and to install or refurbish mine drainage treatment systems at another set. 

PennFuture is leading the transition to a clean energy economy in Pennsylvania and beyond. We are protecting our air, water and land, and empowering citizens to build sustainable communities for future generations. For more information, visit www.pennfuture.org.

Contact: Stephanie Rex                         
Director of Communications