Senate Democrats on Thursday introduced a bill to increase the requirements for coal mining companies to demonstrate they can pay for mine cleanups.
The bill, from Sen. Maria Cantwell (D-Wash.) and three colleagues, would crack down on what’s called “self-bonding,” in which coal companies can certify to regulators that they can handle their own mine cleanup costs without the need for additional financial assurance like a surety bond.
{mosads}The issue of self-bonding has taken on a new tone over the last two years as multiple major coal companies — including Alpha Natural Resources Inc. and Peabody Energy Corp. — have declared bankruptcy, calling into question their ability to pay for mine cleanups.
The federal government could be left with the bill if a company can’t pay for cleanup.
“We need to make sure the taxpayer isn’t on the hook for cleanup work by bankrupt coal companies anymore,” Cantwell, top Democrat on the Senate Energy and Natural Resources Committee, said in a statement.
“Self-bonding clearly isn’t working, and we need to stop this dicey practice from continuing,” she said.
Cantwell’s bill would set strict new financial requirements on bonding liability, and require that alternative financing mechanisms be no more risky to the government than traditional bonding.
“Right now, mining companies can avoid paying the full cost of cleaning up the public health and environmental hazards they create by filing for bankruptcy,” Sen. Sheldon Whitehouse (D-R.I.) said in the statement.
“This legislation would ensure coal companies have assets available to pay for cleaning up their messes so taxpayers aren’t stuck with the bill.”
The industry has fought back against attempts to restrict self-bonding, since other bonding mechanisms are likely to be more expensive for the company. Mining interests say concerns about self-bonding are overblown.
Rep. Matt Cartwright (D-Pa.) is introducing similar legislation in the House.