(The Center Square) – A new report indicates Kentucky as well as other eastern coal states may not have the bond funding needed to cover the costs necessary to prepare thousands of acres of mined land for new uses.
Appalachian Voices, a nonprofit environmental advocacy organization, said it found 633,000 acres across Alabama, Kentucky, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia that need either partial or complete reclamation work. Accomplishing that is expected to cost between $7.5 billion to $9.8 billion, but the states only have $3.8 billion available.
The lands in question are mines established after Congress passed the Surface Mining Control and Reclamation Act in 1977. That law requires companies applying for a mining permit to post a reclamation bond, which would fund reclamation work in the event it was abandoned.
Representatives from Appalachian Voices fear Kentucky faces significant risks of not having enough funding to cover reclamation work.
Most of the state’s nearly 200,000 acres with reclamation needs has had some work done, the report found. However, Kentucky has just $887.6 million in bond money remaining, and the organization estimated the remaining reclamation work could take between $1.9 billion to $2.4 billion.
Mining companies are responsible for the reclamation work, but the report said it was unclear how much of the work those companies will be able to do.
“However, given the decline in the industry, it is clear that some reclamation obligation will fall to the states to address through state bonding programs,” the report stated. “How much reclamation obligation will be abandoned remains to be seen.”
The report says Kentucky faces a greater threat because of the bankruptcy filed by Blackjewel two years ago. The company holds 170 mining permits in the state and is trying to divest of them as part of the bankruptcy proceeding. However, at least 33 will not be sold, which means those bonds would be forfeited to the state.
Rebecca Shelton, director of policy and organizing for the Appalachian Citizens Law Center, said Kentucky officials have estimated a $28 million shortfall to cover the reclamation costs on the 33 permits.
A state fund to cover shortfalls has about $53 million total in funding, according to the report.
“So you can do the quick math and realize that just 33 of these permits would use more than half of that available funding,” Shelton said last week during a press conference for the report.
In addition, the permits that have been targeted for sale must be closed by September. Even if a judge extends the deadline to the end of the year, some fear many more permits will end up being forfeited.
Erin Savage, a senior program manager for Appalachian Voices, said that some of the companies interested in buying Blackjewel permits are having trouble getting sureties for the reclamation bonds as collateral requirements can reach 100 percent. That’s difficult for smaller and newer companies to afford.
Appalachian Voices says mine reclamation isn’t just an environmental issue. It’s an economic issue as well since the reclamation projects would create hundreds or more jobs in areas where unemployment and poverty rates far exceed the national average.
In Kentucky, that could mean more than 11,700 job years. As an example, if it took five years to reclaim all of Kentucky’s mines, that would provide work for more than 2,340 people for that time frame.
“Getting this reclamation started will literally put coal miners back to work, doing the reclamation that they were always supposed to be doing and that many of the workers that I've spoken with over my 10 years here want to do,” Savage said.
A spokesperson for the Kentucky Energy and Environmental Cabinet told The Center Square officials were reviewing the report.