LOUISVILLE KY. As Kentucky’s coal industry has collapsed, companies have committed an increasing number of violations at surface mining sites. State regulators have failed to bring a record amount of them into compliance, internal documents reveal.
Inside Climate News has access to enforcement data from 2013 to February and recently received emails from the Kentucky Energy and Environment Cabinet. This information was provided in response to an open records law request. It paints a picture that shows an industry and its regulators at crisis point.
The documents show a failing agency to enforce regulations that protect the public and environment from some of industry’s most destructive practices. This is in addition to bankruptcies by mining companies and a general industry decline which has seen the shedding off of thousands of state-owned coal mining jobs.
Environmental advocates worry that there could be lax enforcement in other states with coal mining, such as West Virginia and Virginia, because of similar pressures on the industry. This is despite recent increases in coal mining. They also call on federal regulators for help to ensure that bankrupt, inactive or slow-moving mines don’t continue to deteriorate.
This data shows there are a lot of zombie mines out there, said Mary Varson Cromer, an attorney and deputy director of the Appalachian Citizens’ Law Center Inc., in Whitesburg, Kentucky, using a term that refers to mines that have been idled, sometimes for years, without the required reclamation work on their sites.
A state official stated in an email on December 15 that 810 notices of noncompliance with the surface mining regulations had been received. This was a record number. The increase occurred despite the fact that there had been a decrease in active mining permits by 28 percent since 2013. This was a year when there were approximately half as many unresolved violations despite increased mining activity.
Courtney Skaggs is a senior environmental scientist in Kentucky Department for Natural Resources. She warned in a separate Dec. 15 email that the department commissioner Gordon Slone that the situation was out of control. Skaggs, who was previously the acting director of the agency’s Division of Mine Reclamation and Enforcement, warned that this is going to explode in someone’s face.
Skaggs also wrote John Lyons, the Kentucky Energy and Environment Cabinet deputy secretary, that same day. This cabinet oversees state environmental regulations.
Skaggs told me once that you had told me to contact you if there was a problem. I would prefer to talk through this but in the meantime, take a look at these data. There are many variables, including the huge decline in coal production. But what we are doing is not solving the problem. Before we can solve the major problem, something must change.
Skaggs declined to comment on a request by the media, stating that cabinet policy required all communication to be made through John Mura (the cabinet’s spokesman).
Mura stated in a written reply that the enforcement data can easily be explained by an unprecedented amount of bankruptcies in the coal industry, which are beyond the control (of) the cabinet.
He stated that the cabinet will continue to be obligated inspect mines and write violations regardless of whether there are viable permittees. The majority of violations will not be stopped until another mine operator is found for an idle mine or the mine has been reclaimed. The cabinet will seek immediate enforcement if there is an imminent danger.
Enforcement: Less Teeth
Courtney Skaggs noticed a rise in non-compliance notices, which she flagged in December. This trend continued for the next two-and-a-half months. Jim Ward, the current director of states Division of Mine Reclamation and Enforcement was accused of not trying fix the problem when she raised the alarm in the energy cabinets.
According to data provided by energy cabinet in response the open records law request, regulators were still counting 817 unresolved notifications of non-compliance at the end of February.
Cromer stated that such notices could include multiple violations of performance standards mining companies are required to follow. These standards can range from environmental monitoring to stabilizing cliffs left by blasting. According to state data, there were 1,219 violations of all performance criteria as of February 31st.
Cromer, the citizen law center attorney, stated that as coal production has declined, I feel the agency has less and fewer teeth in its enforcement. She explained that the permit block is its primary enforcement mechanism. If there are still violations on existing mining permits, the state will block violators getting new permits.
Cromer stated that violations can be continued by the state. They don’t care if these companies don’t want new permits.
Cromer stated that she is also frustrated by the slow pace at which the states negotiate with insurance companies that hold bonds to cover reclamation costs for bankrupt mining companies.
She said that she sees a cascade if state regulators don’t move faster and more companies file bankruptcy.
Tucker Davis, president, Kentucky Coal Association, didn’t return voice mail and email requests for comment.
Mura said that Cabinet officials share Skaggs frustrations with the long and tedious process of reaching agreements between insurance companies and resolve violations and reclaim mining rights.
He stated that employees should feel empowered to report any concerns that could affect the safety or health of residents or workers.
Mura stated that the officials have full faith in the Division of Mine Reclamation and Enforcement director Wards ability, to address the many problems presented by the multitude of bankruptcies of coal.
Failed Reclamation
Central Appalachia strip mining is a method of extracting forests from the ground. Dynamite is used to blast away the tops of mountains to find coal buried hundreds upon feet below them. To reduce the damage caused by this violent process, which permanently alters the land, companies must follow certain regulations.
The federal Office of Surface Mining Reclamation and Enforcement oversees state regulators, which is a branch of Interior Department.
Companies are required to reclaim mine site sites simultaneously with the development of new areas. Reclamation may include backfilling and grading the mined area, removing unstable high walls and mine refuse, planting grass or trees, as well as managing and treating any water that runs off site. This can be dangerous. The federal Surface Mining Control and Reclamation Act of 1978 requires that mined land be returned back to its original contour.
The law also requires that coal mining companies must have bonds to cover reclamation costs in the event of a company going bankrupt. Kentucky also has a shared-risk bond pool that is funded by fees collected from the industry. This pool covers reclamation costs for mining companies that fail to meet their bonds.
According to state officials, Kentucky has more than half of all unresolved violations involving mines operated by bankrupt companies, including Ember Energy and Blackjewel.
Thirteen months ago, a federal bankruptcy court set the stage for Blackjewel to abandon cleaning up and reclaiming more Kentucky coal mines. Hundreds more are at risk of being abandoned.
Mura said that negotiations with Indemnity Insurance Co. for a number Blackjewel and Revelation permits started in April 2020 and are continuing. Mura also stated that negotiations with Lexon Insurance Co. for an Ember permit began March 2021. Mura stated that no final agreements have been reached.
At least one Kentucky landowner, who leased property to a miner that went bankrupt, is growing impatient.
Nearly two miles of unstable rock-faced cliffs were left on Tracy Neeces’ property in eastern Kentucky’s Floyd County by Revelation, the bankrupt Blackjewel business. Neece estimates that they are as high at 250 feet. According to records, the state had issued citations to the company between 2016-2019, the year that the company declared bankruptcy. They were cited for failing to maintain proper drainage to reduce sediment runoff and properly manage the waste rock (called mine spoils) that had been blasted from hillsides.
Neece shared his story to Inside Climate News and The Louisville Courier Journal last year. Cromer represented Neece.
They have not done anything yet, Neece stated. He also said that he had recently complained to state officials regarding drainage problems. However, he was told that it would be very bad for the state for an insurance company to fix the problem.
Neece recalled that they said that they wouldn’t do anything if the situation was life-threatening. He was frustrated and said, “I guess a boulder had to come down and strike a house before they would do anything.”
Surging Reclamation Liability
Peter Morgan, an attorney at the Sierra Club, is closely following coal bankruptcies across the country and sees two possible explanations for Kentucky’s poor enforcement.
Morgan said that companies that are still operational or are inactive but not bankrupt could be in financial difficulty and not meeting their regulatory requirements. He also said that state officials might be concerned about the possibility of pushing the companies into insolvency if they get too aggressive.
Morgan stated that state regulators act as if they don’t have enough money to cover reclamation costs for companies that are already bankrupt.
Morgan stated that if the money was available, the cabinet would be able to hire contractors and complete bond forfeiture. “The only reason I can see that the cabinet hasn’t gone this route is because the cabinet knows that the sureties don’t have the money to pay out the full bond amounts, and the bond pool doesn’t have the funds to make up the difference.
Mura responded in writing that the cabinet had an obligation to provide bondholders with the opportunity for them to demonstrate their ability to complete the reclamation plans within a reasonable amount of time.
The money is tight, however.
According to a July 2021 report, Kentucky’s reclamation liability is $1.9 billion to $2.4 trillion, while companies bonds are about $888 million. ReportAppalachian Voices is an environmental group. Similar shortfalls are also found in other coal states.
According to bankruptcy court records, the state figured that it would cost $10 million to reclaim more than 300 acres on the Neeces property. The state required only $1.7 million in reclamation bonds.
A July 2021 actuarial report on states bond pool funds found it would be viable for at least three more years. It also found that there is a primary risk in the current bonding program that the financial resources generated are not sufficient to cover future losses. This means that the lands could remain inactive for many years while they await reclamation.
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The U.S. Energy Information Agency ForecastsThe national coal production increased 7 percent this and 2 percent next years, due in part to increasing exports and refilling power station inventories that were depleted by the pandemic. Kentucky saw an increase of 12.6 percent in coal production during the fourth quarter 2021, compared to 2020. This is after a sharp decline over the past decade.
Kentucky still has about20 percentAccording to the agency, this is the third-highest ranking coal mine in the country, after West Virginia and Pennsylvania.
However, with the Biden Administration working towards a goal of eliminating carbon emission from electricity generation by 2035 and more than 40 nations pledging to phase-out coal to meet climate targets, the fuels’ long-term future is uncertain.
Morgan stated that the Biden government must enforce surface mining regulations and reclamation laws more than ever. It will be harder than ever because the White House has yet formally appointed someone to head the federal Office of Surface Mining Reclamation and Enforcement.
The White House press team did not respond on a question about the vacancy. OSMRE did no respond to questions regarding Kentucky’s enforcement record.
Morgan said that the coal mining sector is facing an unprecedented crisis. It is disappointing and troubling to see a leadership vacuum at federal regulator. All state agencies must respond. Also, a coordinated federal response is required.
James Bruggers
Reporter, Southeast, National Environment Reporting Network
James Bruggers covers the U.S. Southeast, part of Inside Climate News’ National Environment Reporting Network. He previously covered energy and the environment for Louisville’s Courier Journal, where he worked as a correspondent for USA Today and was a member of the USA Today Network environment team. Before moving to Kentucky, Bruggers had worked as a journalist throughout Montana, Alaska, Washington, and California. Bruggers’ work has won numerous recognitions, including best beat reporting, Society of Environmental Journalists, and the National Press Foundation’s Thomas Stokes Award for energy reporting. He was president for two years and served on the SEJ board of directors for thirteen years. He lives with Christine Bruggers in Louisville.
