As coal stalls, Wyoming considers new environmental clean-up rules

Enlarge / GILLETTE, Wyo.: A truck loaded with coal is viewed from the Eagle Butte Coal Mine Overlook which is operated by Alpha Coal. The area is a large producer of coal. Gillette uses the moniker of “The Energy Capital of the Nation”. (Photo by (credit: Matt McClain/The Washington Post via Getty Images)

On Wednesday, Wyoming’s Land Quality Advisory Board voted to limit so-called “self-bonding” in the state, a practice that allows coal and other mining companies to avoid putting up any collateral to reclaim land when the company is done with the mine. The new proposed rules will go through a public comment period and then need to be signed by the governor of the state to take effect, according to the Casper Star-Tribune.

The board’s passage of the proposed rules is somewhat surprising in a coal-heavy state, because it could potentially raise the cost of coal mining in Wyoming for some companies. However, there is political support for more stringent environmental rules after a number of coal companies filed for bankruptcy in recent years. Although no companies ended up abandoning mine cleanup to the state, the specter of hundreds of millions of dollars of cleanup in the event of another coal downturn has left regulators eager to limit how much damage the state could be on the hook for. The five-person advisory board voted 4-1 in favor of limiting self-bonding. The board member who voted against limits to self-bonding works for Peabody Energy, a major coal producer in the state.

The limits wouldn’t do away with self-bonding in Wyoming. Instead, to qualify for self-bonding, a coal company would have to have a strong credit-rating and would be expected to run the mine for at least five more years. The Star-Tribune notes that credit ratings for coal firms also factor in the health of the market, so the state of Wyoming wouldn’t have to independently evaluate the larger economic risks to a mine going under.