Cattle graze on land that's been reclaimed after mining at Peabody Energy's Caballo mine in northeast Wyoming. (Dustin Bleizeffer/WyoFile)

Federal officials believe the world’s largest coal miner Peabody Energy may not meet its obligation to provide financial assurance of complete mine cleanup in three states, including Wyoming.

The Office of Surface Mining Reclamation and Enforcement on Wednesday sent “10 day notice” letters to mine reclamation management agencies in Wyoming, New Mexico and Colorado. Those state agencies must explain how they will address “possible violations” of reclamation bonding requirements by Peabody, a company that analysts say is on the verge of bankruptcy.

At question is whether Peabody qualifies to “self-bond” for the cost of mine reclamation. Self-bonding allows a surface mine operator to guarantee the cost of reclamation — eventually repairing the environmental disruption done by mining operations — with its own assets instead of providing the necessary funds upfront.

Peabody is the third major coal operator in Wyoming to come under federal scrutiny for its self-bonding status in recent months. OSMRE sent similar 10 day notice letters to the Wyoming Department of Environmental Quality regarding self-bonding by Arch Coal and Alpha Natural Resources. Wyoming DEQ submitted its response regarding Alpha on Friday claiming the operator is in compliance, while also admitting to “systemic problems” with the self-bonding program.

“It’s time to acknowledge this is a national issue, and Interior needs to step up and be more active on this and play more of an oversight role,” WildEarth Guardians climate and energy program director Jeremy Nichols said.  

WildEarth Guardians filed a citizen’s complaint to OSMRE on Feb. 8 regarding Peabody Energy’s qualification for self-bonding, asserting “Peabody claims that these states have continued to determine that the company qualifies for self-bonding, even though it clearly does not.”

Peabody’s mine reclamation bond obligation in Wyoming is $790 million. A total $1.1 billion is needed to comply in all three states. Arch Coal’s mine reclamation bond obligation in Wyoming is $485 million, and Alpha’s is $411 million. Arch and Alpha are already reorganizing under bankruptcy.

“At the heart of the issue here is reclamation,” said Nichols, “and we hope it impresses upon Peabody they get busy on reclamation.”

“This is serious,” Nichols continued. “They [OSMRE] understand there is a problem here and things are not looking better for Peabody. It’s an opportunity to set things straight before they file bankruptcy.”

Read the citizen’s complaint filed by WildEarth Guardians:

 


Ready the OSMRE’s 10 day notice letter to Wyoming DEQ regarding Peabody Energy:


Dustin Bleizeffer covers energy and climate at WyoFile. He has worked as a coal miner, an oilfield mechanic, and for more than 25 years as a statewide reporter and editor primarily covering the energy...

Join the Conversation

2 Comments

WyoFile's goal is to provide readers with information and ideas that foster constructive conversations about the issues and opportunities our communities face. One small piece of how we do that is by offering a space below each story for readers to share perspectives, experiences and insights. For this to work, we need your help.

What we're looking for: 

  • Your real name — first and last. 
  • Direct responses to the article. Tell us how your experience relates to the story.
  • The truth. Share factual information that adds context to the reporting.
  • Thoughtful answers to questions raised by the reporting or other commenters.
  • Tips that could advance our reporting on the topic.
  • No more than three comments per story, including replies. 

What we block from our comments section, when we see it:

  • Pseudonyms. WyoFile stands behind everything we publish, and we expect commenters to do the same by using their real name.
  • Comments that are not directly relevant to the article. 
  • Demonstrably false claims, what-about-isms, references to debunked lines of rhetoric, professional political talking points or links to sites trafficking in misinformation.
  • Personal attacks, profanity, discriminatory language or threats.
  • Arguments with other commenters.

Other important things to know: 

  • Appearing in WyoFile’s comments section is a privilege, not a right or entitlement. 
  • We’re a small team and our first priority is reporting. Depending on what’s going on, comments may be moderated 24 to 48 hours from when they’re submitted — or even later. If you comment in the evening or on the weekend, please be patient. We’ll get to it when we’re back in the office.
  • We’re not interested in managing squeaky wheels, and even if we wanted to, we don't have time to address every single commenter’s grievance. 
  • Try as we might, we will make mistakes. We’ll fail to catch aliases, mistakenly allow folks to exceed the comment limit and occasionally miss false statements. If that’s going to upset you, it’s probably best to just stick with our journalism and avoid the comments section.
  • We don’t mediate disputes between commenters. If you have concerns about another commenter, please don’t bring them to us.

The bottom line:

If you repeatedly push the boundaries, make unreasonable demands, get caught lying or generally cause trouble, we will stop approving your comments — maybe forever. Such moderation decisions are not negotiable or subject to explanation. If civil and constructive conversation is not your goal, then our comments section is not for you. 

Your email address will not be published. Required fields are marked *

  1. Who are the dopes who made “self-bonding” legal?

    Reminds me of Colorado in the 1960s-70s when the wood products industry was allow to “harvest” by clear-cutting, go bankrupt and never clean up the site.

    It’s the same old game played by these natural resources industries: extract the resources and leave the taxpayers to clean up their messes.

    Reply

  2. This long-winded Ten Day Notice from the Office of Surface Mining is surreal. OSM cannot cause the Wyoming DEQ to extract new collateral from Peabody or improve Peabody’s debt-to-asset ratio or credit ratings. The coal companies are losing market and declining in value, due largely to uncertainties in the electric power business caused by Wild Earth Guardians and their allies. Peabody is no exception.

    So, should DEQ order Peabody to stop mining coal? Is that what Wild Earth Guardians and OSM want, to shut down the mines? Without ongoing operating revenues, Peabody will have no money; who then is going to reclaim the mined land? Peabody would be forced into Chapter 11 bankruptcy and would have every incentive to try to escape its reclamation obligations as unsecured obligations. Wyoming DEQ is trying to work with these companies in or out of bankruptcy court to keep the reclamation process going.

    Peabody cannot go out and find insurance companies to sell reclamation bonds. That ship has sailed. The time to require secondary collateral to secure companies’ self-bonding is gone.

    Meanwhile, as I have written before, the legislature better save the AML money for reclamation of abandoned mine lands.

    Reply