We’ve got the story on the Gazette Web site about the closing of the Samples Mine up Cabin Creek, W.Va. In its press release this morning, the company cited high costs and poor market conditions for the closure.
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Is the mining closing or is it going into Temporary Cessation of operations; that is, will be left unreclaimed with the expectation of resuming operations in the near future?
Note: I was with OSMRE (1978-1995) after being an Ohio reclamation specialist (1975-1978).
Bob Mooney:
Take a look at what the company said:
“By ceasing operations at this higher-cost surface mine, Patriot will keep valuable permitted reserves in the ground until the market yields more favorable pricing and margins.”
Sounds like they anticipate resuming operations maybe sometime in the future. But, of course, this has been a problem for regulators in West Virginia and other states … here’s a story I did about it in 2001:
Hundreds of mines not in cleanup plan
Publication: THE CHARLESTON GAZETTE
Published: Sunday, December 16, 2001
Page: P8B
Byline: Ken Ward Jr.
kward@wvgazette.com In September, lawmakers approved Gov. Bob Wise’s plan to fix a multimillion-dollar deficit in the state’s abandoned mine cleanup fund.
Wise and Michael Callaghan, secretary of the state Department of Environmental Protection, say their proposal will provide money to clean up more than 300 abandoned mines across the state.
But the proposal won’t help reclaim several hundred other idled mine sites that are in a state of “pseudo default,” according to a report provided to the federal Office of Surface Mining.
John Morgan, a Kentucky mining engineer and reclamation expert, wrote the report for the West Virginia Highlands Conservancy.
Last month, the Conservancy submitted Morgan’s report to OSM as part of public comments on the Wise plan. Before the state can implement the plan, it must be approved by OSM. “DEP failed to calculate the cost of reclaiming ‘active’ mine sites that have not mined coal for many years and should be considered to be at a much higher risk of forfeiture than those mines where coal extraction (and an income stream) is continuing,” the Conservancy said in a letter to Roger Calhoun, director of the Charleston OSM field office.
Last week, Callaghan said that he had not read Morgan’s report.
Matt Crum, director of the DEP Division of Mining and Reclamation, reviewed the report and said that Morgan is simply wrong.
“I do disagree with what Mr. Morgan is saying,” Crum said Friday afternoon.
“Those permits are not yet forfeited,” Crum said. “Those permits are not in default now. They have reclamation requirements. They have [water] treatment requirements, and we inspect those permits.” Actually, under state regulations, the purpose of inactive status is to allow coal operators to cease mining and reclamation for more than 30 days.
To be approved for such status, coal companies must be in compliance with contemporaneous reclamation rules – but only at the point in time when they seek inactive status. Reclamation, except for some water treatment, stops after that, according to state officials.
John Ailes, a top assistant in the state mining office, said that environmentalists argued a decade ago that inactive status was a way for companies to avoid reclaiming sites without having their permits revoked.
But, Ailes said, the state strengthened its rules on inactive status, and started to more closely monitor such sites.
“There are permits that have been inactive for a number of years that are now very viable operations,” Ailes said.
As part of its mine regulation program, West Virginia has a Special Reclamation Fund. The fund cleans up mines abandoned since the 1977 federal Surface Mining Control and Reclamation Act was passed by Congress. Mines abandoned before 1977 are cleaned up by a separate program funded by a federal coal tax.
Federal law requires coal companies to post reclamation bonds in order to receive mining permits. If the company goes belly-up or otherwise walks away from the operation, the bond is forfeited. The state puts the forfeited bond money into the Special Reclamation Fund, which is used to reclaim the site.
But in West Virginia, state regulators have never required sufficient bonds to cover the full cost of mine reclamation. A small per-ton coal tax has not made up the difference.
The reclamation fund has a multimillion-dollar unfunded liability.
Thousands of acres of abandoned mines remain unreclaimed. Pollution in several hundred polluted streams goes untreated.
Since 1995, the state has been under an OSM order to come up with a plan to “eliminate the deficit in the State’s alternative bonding system.” OSM said that the state’s plan must, “ensure that sufficient funds will be available to complete reclamation, including the treatment of polluted water, at all existing and future bond forfeiture sites.” Last year, the Conservancy filed a federal court lawsuit to try to force action. In August, Chief U.S. District Judge Charles H. Haden II gave OSM more time to work out a solution.
In September, lawmakers meeting in special session approved the DEP’s proposal to increase funding for mine cleanups. Under the proposal, the state would increase a tax on coal production from 3 cents per ton to 14 cents per ton for about three years. After that, the tax would be reduced to 7 cents per ton. The amount of bonds posted by coal companies would not increase.
Callaghan says that the tax would provide enough money to clean up the 300 abandoned mine sites on DEP’s special reclamation list.
Conservancy lawyers don’t agree. But even if Callaghan is correct, his plan doesn’t take into account the potential cost of large numbers of currently idle mine sites being abandoned, according to Morgan, the Conservancy’s expert.
In his report, Morgan said that there are at least 216 permits that have been classified by DEP as “inactive.” “The number of inactive status permits is indicative of the potential for future defaults,” Morgan wrote. “Again, WVDEP did not take into account the effect of these inactive status permits when developing its proposal.” Last week, DEP records showed more than 400 permits that were approved as inactive.
Those permits covered more than 40,000 acres in 31 counties, according to DEP records.
Under state mining rules, DEP can only approve inactive status for mining permits if the agency concludes that, “the cessation is necessary because of temporary market conditions.” Morgan wrote that, “The recent coal price for Central Appalachian coal is the highest ($48 per ton) since 1973, so it is highly unlikely that coal prices will improve. Therefore, if these permits are not active under the current market conditions, it is unlikely that they will ever be reactivated.
“Accordingly, WVDEP should immediately revoke the inactive status and require that the sites be reclaimed,” Morgan wrote. “The risk for bond forfeitures is increased as requiring the immediate reclamation of these sites would compel the mining company to expend funds and therefore increase the potential for bond forfeiture of the company.” Crum said he had no plans to take such action. He said DEP has no way to know if inactive mines could someday become economically viable.
“We’re not going to speculate on the market,” Crum said. “We don’t know what the market will do. It’s much too speculative.” To contact staff writer Ken Ward Jr., use e-mail or call 348-1702.
So, this site could just sit and have nothing done to reclaim it? Mercy, this is just not right. If not the mining companies, who should pay the cost of clean up and repair, the land companies themselves should have to bear the cost. Perhaps they wouldn’t be so eager to lease out their land to coal companies if the landowners themselves were held responsible for what the coal industry does.
What’s happened in the 8 years since that informative study and article?
How many of those 300 abandoned mines across the state have been cleaned up? Is the state’s abandoned mine cleanup fund any closer to fully funded? And, what’s happened with the more than 400 permits that were approved as inactive back in 2001? (How many restarts, how many still sitting idle, how many moved to reclamation, how many completely abandoned?) What’s the number look like now?
The DEP requires at least some minimum amount of reclamation work to be ongoing, even if the mine temporarily ceases production. This is to ensure that proper water drainage continues, if nothing else. I am also reasonably certain that some amount of seeding and grading work will also be performed during this “shutdown” period.
The site is idled for future development. When coal prices rise back up it will come back again. It’s not going to sit abandoned forever. If it did or they just decided to abandon it, there’s bonds on the property the coal company has to pay to get the permits that isn’t released until it is reclaimed and the state can repair it with that money.
Ken, thanks — I well know the issues regarding temporary cessation and/or mining slowdowns.
It is legitimate for mining businesses to go into an inactive status. Many quarries, especially sand and gravel ones, are inactive for years.
No doubt, unforetunately, quite a few coal mining operations will be drastically reducing production and/or becoming inactive — especially so in the coalfields of the eastern states. (The Illinois coal basin, which includes western Kentucky, has seen a recent increase in demand for its coal; coal sales of western states continue to increase too.)
In the 1980s and 1990s, there were many bond forfeitures on mining operations that were left unreclaimed by coal companies. Some of those sites still remain unreclaimed and/or partially reclaimed.
Just for giggles, here’s what the West Virginia DEP’s rules say on this particular issue:
(http://www.wvdep.org/Docs/17525_38CSR2-2009%20on%20Internet%2007-08-09.pdf):
Among other things, the operator must show the DEP that:
The site is in full
compliance with all standards of the program
and permit, including but not limited to
contemporaneous reclamation, no outstanding
violations or penalties exist.
Ken.
Clem asks a bunch of good questions … I’ll answer a few of them … First, the situation with the Special Reclamation Fund is somewhat better than it was, but there are still big problems.
Check out this post from a while back:
http://blogs.wvgazette.com/coaltattoo/2009/02/17/wvdep-wants-3-12-years-to-give-itself-a-permit/
And follow the links to these previous articles:
http://wvgazette.com/News/Mining+the+Mountains/200703070003
http://wvgazette.com/News/Mining+the+Mountains/200806250268
http://wvgazette.com/News/Mining+the+Mountains/200807010653
Whether or not WVDEP is fully accounting for mines that are inactive that are really bond forfeiture sites is an issue that continues to generate debate, and it’s a matter that is terribly important for the state’s environment and fiscal condition, given the amount of money involved in long-term water liabilities.
Ken.
As I noted before, 1,117 bond forfeiture orders were issued by WVDEP from 1980 through 2008. (That compares to KY 2,924 in KY and 1,020 in PA for the same time period.)
http://groups.google.com/group/bob-mooney/web/walk-away-reclamation
Those 1,117 bond forfeiture orders were issued on 250-300 mining companies (from my rough count).
http://tinyurl.com/WV-bond-forfeitures-1980-2008
Many of these sites probably were reclaimed by surety companies and/or through the forfeited bonds. Quite a few are likely not yet reclaimed.
In addition, there are sites pending issuance of bond forfeiture orders and others that are heading that direction.
It would be good to have an accurate accounting on the status of all the sites in West Virginia — and elsewhere.
OSMRE is suppose to have been assuring that was being done.
Note: I was with OSMRE (1978-1995) after being an Ohio reclamation specialist (1975-1978).
I would like to know how many MTM sites sit un-reclamed. My guess is not many. They are too easily reclamed. The surface mines that lie un reclamed are contor mine sites with miles of exposed highwall. These are the sites that are very expensive to restore.
Scott 14, Sounds like you have given yourself an assignment. It’s been nearly two decades since I had inspected in WV (1991), but I’m sure those Mountain Top Removal coal mining operations continue a long-long time. Definitely, backfilling highwalls is more costly than filling valleys.