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Mine cleanup fund could be empty by 2012, report says

A fund meant to clean up abandoned coal mines could face a financial crisis within five years, according to a state Department of Environmental Protection report.

As early as 2012, the DEP’s special reclamation fund could be out of money to clean up abandoned mine lands and treat water polluted by mining, the report said.

An outside task force recommended an increase in coal taxes and creation of a nearly $300 million trust fund to help fix the problem.

Task force members concluded that the state needs to find more money for long-term treatment of streams already polluted with acid mine drainage — and especially for strip mine sites state officials expect to be abandoned in the future.

The Special Reclamation Fund Advisory Council completed the report in late December, and DEP provided it to lawmakers on Jan. 22.

With the 60-day legislative session almost over, there has been little talk about the reclamation fund’s problems, and Environmental Protection Secretary Stephanie Timmermeyer has not pressed the issue.

“We’re in the early stages of planning how to address the recommendations,” said Ken Ellison, director of the DEP’s Division of Land Restoration.

The special reclamation fund cleans up coal mines that were abandoned after passage of the 1977 federal strip mine law. A separate federal program handles sites abandoned before that.

In West Virginia, the special reclamation fund has never had enough money. Over the years, thousands of acres of abandoned mines sat unreclaimed. Hundreds of polluted streams went untreated.

The fund was historically short on money because coal operators had not posted reclamation bonds sufficient to pay for mine cleanups at sites that went belly-up. The state’s special reclamation tax and civil penalties paid by coal operators were never enough to make up the difference.

One study by the federal Office of Surface Mining Reclamation and Enforcement estimated that West Virginia needs more than $2.6 billion over the next 50 years to clean up polluted water at abandoned mine sites.

Then-Gov. Bob Wise and lawmakers took action after the West Virginia Highlands Conservancy filed suit in federal court to try to force a federal takeover of the state’s special reclamation program. Former U.S. District Judge Charles H. Haden II declined to force that takeover.

As part of a Wise administration plan to solve the problem, lawmakers temporarily increased the reclamation tax from 3 cents per ton of coal to 14 cents per ton. After 39 months — in April 2005 — the tax was to be reduced to 7 cents per ton.

Last year, Timmermeyer persuaded lawmakers to continue the tax at 14 cents per ton through October 2006. The tax is now back at 7 cents per ton.

The additional tax allowed DEP officials to make a dent in the backlog of land reclamation at abandoned mine sites.

In its most recent annual report, DEP said that the agency last year completed reclamation at 73 permits, and began work on 48 others.

The same law that increased the state’s special reclamation tax also created the advisory council to monitor the program. The panel includes representatives of the coal industry, the United Mine Workers, West Virginia and Marshall universities and the state treasurer’s office.

Every year, the council must provide lawmakers with a report on the special reclamation program’s finances.

The most recent report notes that an actuarial study projected the fund “declining to a negative balance in 2012.”

That study did not consider sites that might be abandoned in the future, or possible increases in coal production that would provide additional tax revenue. A further study taking those possibilities into account pushed back the negative balance estimate to 2017.

A study by Marshall University recommended that the state create a “self-sustaining trust fund” to pay for water treatment at abandoned mine sites.

The Marshall study projected that the state needed a fund of $124 million for sites already abandoned and $196 million for sites that will be abandoned in the future.

The task force recommended asking lawmakers to create such a trust, and to fund it with additional taxes on the coal industry.

Only West Virginia Coal Association President Bill Raney, the industry’s representative on the task force, objected.

To contact staff writer Ken Ward Jr., use e-mail or call 348-1702.


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