By Associated Press - Tuesday, February 16, 2016

CASPER, Wyo. (AP) - Wyoming regulators are questioning the federal government’s authority to intervene in issues stemming from bonding for two coal mining companies that have filed for bankruptcy.

In a response to the U.S. Office of Surface Mining Reclamation and Enforcement, state regulators defended their oversight of Alpha Natural Resources’ and Arch Coal’s bonding, The Casper Star-Tribune reported ( ). Each company operates large open-pit mines in northeast Wyoming’s Powder River Basin.

Both companies have filed for Chapter 11 bankruptcy protection - Bristol, Virginia-based Alpha Natural Resources last summer followed by St. Louis-based Arch Coal last month.

“OSMRE has no basis for second guessing DEQ’s judgment,” wrote Kyle Wendtland, who oversees mining regulation at the Wyoming Department of Environmental Quality, in a letter to federal regulators.

An OSMRE spokesman did not respond to a request for comment.

State officials were asked to provide more information about its approval of both companies’ bonding arrangements with the state.

Bonding helps ensure cleanup of industrial sites. Environmental groups say the coal companies might prove unable to pay for cleanup should the mines close. Wyoming is one of a handful of states that allows coal mining companies to self-bond, or provide regular financial reassurances to regulators that they are able to cover the cost of filling in and reclaiming any mines that might close.

Last year, Wyoming officials reached an agreement that would make the state a priority creditor to receive $61 million out of $411 million in required bonding for Alpha’s mines. A bankruptcy judge has approved the deal, but it has faced scrutiny by the Powder River Basin Resource Council, a landowner environmental group based in Sheridan.

In their response to federal criticism, state officials said the agreement did not release Alpha from its reclamation obligations, but instead that it requires the company to emerge from bankruptcy to fully cover its bonding obligations.

“These events highlight certain systemic problems with self-bonding, but had to be addressed individually and in a timely manner,” Wendtland wrote. “DEQ, as the entity with exclusive jurisdiction over the matter, exercised its considerable discretion to enter a settlement that protects the public, the environment and sets a firm timetable for Alpha’s transition away from self-bonds.”

Federal officials have said the deal may violate the law because it doesn’t cover the mine’s estimated cleanup. Wyoming has only reclaimed $61 million of the estimated $411 million in cleanup work.

An Alpha spokesman declined to comment Monday.


Information from: Casper (Wyo.) Star-Tribune,

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