May 1, 2019 - At a private meeting, coal company leaders lobbied the state of Ohio to base its cost estimates for cleaning up mining sites only on what’s actually mined in the first year of a permit.
Before the gathering last week, the state calculated permits for adjacent areas as being mined — even though they might not be for several years — when determining what it would cost to clean up the site, Lanny E. Erdos, chief of the Ohio Department of Natural Resources’ Division of Mineral Resources Management, said in an email to The Dispatch.
That will no longer be the case. The new estimate “will do a better job of allowing the operator to specify with more detail what will actually (be) affected within the first year,” he said.
After that, ODNR inspectors will be responsible for updating the figure and inspecting the sites during routine inspections. Inspections occur once a month for active sites and four times a year at minimum for inactive sites, Erdos said.
“ODNR will need to develop specific guidelines to properly address this, but as of now, my expectations are that the (estimate) is assessed during every inspection,” he said.
The new revisions will be factored into an actuarial report expected by June about the state’s reclamation fund for cleaning up abandoned mines. The state’s coal-reclamation fund, which has more than $21 million, is collectively funded by coal companies. For each ton of coal mined, companies pay a severance tax of 14 cents. If a company goes out of business and abandons its mines, the fund would pay for cleanup.
Companies also pay $2,500 per acre at each permitted mining site that is used for cleanup before money from the state reclamation fund kicks in. It is the state estimate on affected acreage that is the subject of debate because it includes land not yet mined.
Representatives from four coal companies — Murray Energy Corporation in St. Clairsville, Belmont County; CCU Coal and Construction in Coshocton; B&N Coal Company in Dexter City, Noble County; and Rosebud Mining Company of Kittanning, Pa. — attended the meeting Thursday, Erdos said. Coal companies have until May 8 to submit any proposed changes to the state if they feel estimates should be adjusted based on the new standards set last week.
“We want it to be right,” said Roger Osborne, a retired B&N Coal vice president who is on the state’s reclamation fund advisory board.
“I know a couple different companies discussed their estimates,” Osborne said of last week’s meeting, which he attended. The state estimates “were high on a couple of permits. ... They came to agreement (that) they were.”
His former company had at least one permit that will receive a decrease in its estimated liability.
Osborne said there was a new permit for a mining site that has not been mined yet but state officials “were considering it all affected. That’s just not right.”
There was discussion at last month’s advisory board meeting for the coal reclamation fund to no longer factor in contingencies, such as potential catastrophic events, when calculating estimates for cleanup.
However, the contingencies will remain factored into estimates for now.
When asked why officials chose to keep the contingencies, Erdos said: “Truthfully, (a) lack of a solid consensus relative to how or if it should be done.”
This year, Ohio companies mined 2.33 million tons of coal through April 20 — a 17.1% decrease compared with the same period last year, according to a U.S. Energy Information Administration report.
With declining coal production, there’s less money going into the state fund. As the industry struggles, it’s possible companies will abandon mines without reclaiming the sites.
If one of the largest permit holders walked away, the fund would not be able to cover the cleanup, an actuarial recently told the advisory board.
The board is looking at reinsurance to potentially offset any future forfeitures.
Gov. Mike DeWine has proposed adding $5 million back to the fund, which was removed in 2017 by former Gov. John Kasich to balance the budget.
The next coal-reclamation advisory board meeting is scheduled for May 23.