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E&E Exchange

Welcome to the Energy & Environment (E&E) Exchange, a blog dedicated to science and engineering topics that are (generally) related to energy and the environment. This blog is meant to encourage discussion about the challenges and possibilities surrounding sustainability through science and technology. The blog's owner, cheme_wordsmithy, is a former technical writer and engineering editor at IEEE GlobalSpec, the company that powers CR4.

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A New Hole In Coal Land Reclamation

Posted April 07, 2016 7:00 AM by cheme_wordsmithy

One of the most important fields in the universe of environmental regulation is corrective action. The EPA's Corrective Action program is a part of the Resource Conservation and Recovery Act (RCRA) regulations that deals with investigating and cleanup of hazardous waste releases to the environmental. It was put in place to ensure that facilities responsible for handling hazardous waste are also held responsible for cleaning any messes they make.

There are similar programs for other sectors, including those specific to the coal industry. Many associate mining with being underground, but the predominant form of coal mining is actually from the surface, and ore is reached through excavation and/or the use of explosives. Thus, millions of acres of land across the world have been or are currently being utilized as surface mines. Corrective action measures in place in the industry are there to ensure that coal companies reclaim (clean up) the land as part of the mining life cycle.

The reason this is significant is because of the recent downturn of the coal industry. The abundance of natural gas, the push for renewable sources, and an increase in emissions regulations have all negatively impacted coal power plants . As a result, many coal companies have shown signs of financial distress, and some have declared bankruptcy. While some clean energy advocates may consider this change as a victory for the environment, their is a big hole (pun-intended) in this thinking when looking at the land that remains to be reclaimed.

Typically, corrective action regulations necessitate that coal companies provide or set aside the monies needed to fund reclamation prior to mining the land, typically through a bond or trust account. One of the mechanisms, however, is a "financial test" which is basically an evaluation of the company's assets done by the regulator, and by passing the test the company has proven it has the financial stability to fund the cleanup. This is often termed "self-bonding". Unfortunately, the economic downturn of the coal industry caught regulators by surprise; a number of companies who had recently passed a financial test soon after were approaching or filing for Chapter 11 bankruptcy. This raises the issue of whether these companies, which include Arch Coal and Alpha Natural Resources, will have ever have the funds for reclamation when their mines close down.

Bankruptcy of course does not mean these businesses are gone for good. Chapter 11 is a tool that allows struggling entities the chance to reorganize and pay back some of its debts over time. But the question remains whether coal has enough of a future to allow these companies to survive. If not, it will be interesting to see what debts are left to the state to repay in the form of unreclaimed surface mines.


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