OSM plan delays mine bond fix by 10 months
In September 2000, federal regulators gave West Virginia officials one last chance to fix the state's strip mine bonding program.
The U.S. Office of Surface Mining warned the state Department of Environmental Protection to come up with a solution during the 2001 legislative session.
"Because of the seriousness of this issue, please be advised that we will be carefully monitoring your progress in achieving such resolution," Al Klein, the OSM regional director, told the state at the time.
Under the 1977 Surface Mining Control and Reclamation Act, states are allowed to regulate their own mining industries. OSM is supposed to make sure that they do a good job.
In West Virginia, the state has never forced coal operators to post bonds of enough money to actually reclaim their mine sites if the companies abandon them. The state Legislature has also refused to increase a 3-cents-per-ton coal tax to help reduce the fund's financial problems.
OSM has repeatedly told the state to fix the bonding system to provide enough money. The state hasn't done so, and OSM has done little about it.
In a September 2000 letter, Klein gave the state a deadline of 30 days after the end of the legislation session.
The 2001 legislative session came and went. It ended April 14.
During the session, lawmakers shot down a Wise administration proposal to lift a $5,000-per-acre cap on strip mine bonds. Coal industry officials opposed the legislation.
On April 18, DEP Secretary Michael Callaghan asked OSM for more time.
Two weeks ago, acting OSM Director Glenda Owens responded to Callaghan's request.
In a letter, Owens said that, "Because of the lengthy history of these problems and lack of success of earlier resolution efforts, we cannot grant your request for an extension." However, a closer look at Owens' action shows that OSM gave Callaghan and the state exactly what they wanted, and maybe even more.
In his April 18 request for more time, Callaghan said that DEP would put together proposed changes in state law and regulations by sometime in July 2001.
In her June 30 letter to Callaghan, Owens gave the state until July 27 to submit these proposals to the Joint Legislative Rulemaking Review Committee.
When he asked for more time, Callaghan did not say when the proposals would be acted on by the Legislature and by Gov. Bob Wise.
But Callaghan floated the idea that Wise would call lawmakers into a special session later this year to address the bonding issue.
During a federal court hearing May 16, Callaghan testified about the possibility of a special session.
"I'm working closely with the governor's office, who is working with [House] Speaker [Bob] Kiss and [Senate] President [Earl Ray] Tomblin in discussing the possibility of calling a special session within the next month or two months to address this very serious issue," Callaghan testified.
Now, that idea is apparently off the table.
In a June 8 weekly report to the White House, OSM officials said that, "the governor is supporting WVDEP's attempts to correct the program but, because of industry objections, there is no support by the Legislature for a special session to deal with this problem at this time." In response, OSM gave the state until 45 days after the end of the 2002 regular legislative session to enact changes in the bonding program. Next year, the 60-day legislative session will end in mid-March.
So, the OSM plan gives the state at least another 10 months to do something about its bond problem.
Lawyers for the West Virginia Highlands Conservancy want Chief U.S. District Judge Charles H. Haden II to make OSM and the state move faster.
A lawsuit to force an OSM takeover of the state's bonding program is pending before Haden in U.S. District Court in Charleston.
The bond program has a multimillion-dollar deficit. But no one really knows how much money the state needs to fix the program.
In January 1981, OSM gave "conditional approval" to the state's plan to regulate strip mine bonds.
Among other things, federal regulators said their approval was "conditioned upon the submission of an independent study demonstrating that the fund will contain, on a continuous basis, enough money to meet the demands placed upon it." In recent filings with Haden, Conservancy lawyers allege that such a study was never conducted.
"Instead, in 1982, West Virginia submitted a 'preliminary study,'" Conservancy lawyers told Haden in court filings.
State officials themselves conceded that, "Much of the data needed to make a conclusive study did not exist. ... A final actuarial study of the fund was not made." Still, OSM said that the state's preliminary study was good enough.
In 1983, they lifted the condition on their approval of the state's bonding program.
Three years later, a 1986 review by the General Accounting Office criticized OSM for doing so. "OSM has not done an analysis or applied criteria to assure that the permanent program alternative bonding systems will be adequate," the GAO said.
"Consequently, the systems are continuing to operate without clear evidence that their methods to replenish the supplemental funds are adequate to assure reclamation of all permanent program bond forfeiture lands."