In this kind of bonding, bond amounts, "shall be sufficient to assure the completion of the reclamation plan if the work [has] to be performed by the regulatory authority in the event of forfeiture," federal mining law states.
Under the second type, coal company bonds do not have to cover the full reclamation costs. Companies can post much smaller bonds. But state regulators must maintain enough money in a bond fund to reclaim any sites that companies abandon.
In West Virginia, the DEP uses the second type of bonding plan. This is known as an "alternative bonding" system.
Bonds are capped at $5,000 per acre. This amount often doesn't cover the entire cost to reclaim an abandoned mine site. So all coal companies pay a small tax that is supposed to provide enough additional money to reclaim sites where the bond wasn't sufficient.
This system has never been adequate. The $5,000-per-acre cap on bonds kept bonds from being sufficient to cover reclamation of abandoned sites. The state's 3-cents-per-ton tax on coal didn't generate enough money, either.
Because of the inadequate funding, at least 15,000 acres of abandoned mines across the state remain unreclaimed. At more than 200 mine sites, a toxic stew of untreated mine runoff poisons streams.
In 1991 and again in 1995, OSM ordered the state to fix the problem.
"Instead, the state [DEP] continued to approve surface mining permits although the state's program ... demonstrably was inadequate for the state to reclaim the land and treat water should the bonds be forfeited," Haden wrote. "The state did nothing and OSM did nothing." Haden said that, under federal law, if the state fails to remedy a deficiency in its regulation of coal mining, OSM must act.
"The statutory timeline for both the state and the [OSM] to act are short: 60 days," the judge wrote.
OSM, the judge ruled, must either substitute federal enforcement for all or part of the state's program, or recommend that the Secretary of Interior revoke the state's ability to regulate its own mining industry.
Haden noted that OSM did neither of these until June 29 of this year, the date that agency lawyers had to file a response to the Conservancy's lawsuit.
"Thus, almost 10 years had passed before the impetus of this litigation finally led the Director to initiate the necessary corrective process," the judge said.
On June 29, OSM gave the state until 45 days after the close of the 2002 legislative session to fix its bonding system. If the state didn't act by then, acting OSM Director Glenda Owens said that her agency would take over the bonding program.
In early August, DEP Secretary Michael Callaghan announced that he had negotiated a deal with the coal industry on a fix.
Under the deal, which Callaghan worked out privately with coal lobbyists, the state would increase its special reclamation tax from 3 cents per ton to 14 cents per ton for the next three years. After that, the tax would drop to 7 cents per ton.
In his ruling, Haden did not mention the DEP-industry deal.
The judge noted the OSM deadline of 45 days after the 2002 legislative session for the state to approve some kind of reform.
"The Court intends to ensure the deadlines ... are honored," Haden wrote. "Additionally, while the Court does not intend to substitute its limited wisdom for that of the agency, any potential solution to the problems identified with the State alternative reclamation bonding system will be measured against the failures documented in the record so the Court may assure itself appropriate relief is available when legislative and administrative processes are exhausted or found futile." Haden ruled that Conservancy lawyers can continue to collect evidence for their suit. He also required the parties to report every six weeks to him "concerning progress toward meeting OSM's deadlines." The judge also said that DEP's proposed fix for the bonding program must be provided to the Court when it is filed with OSM.