A new investigation has found that the world's largest private-sector coal company does not have adequate funds or insurance to clean up its own mining operations, increasing the risk that taxpayers will have to pay billions of dollars to clean up toxic coal mine sites across the country.
Reuters reported last week that St. Louis-based Peabody Energy is "under scrutiny" from the federal government over concerns that the company is violating federal bonding regulations that are intended to guarantee that if a mining company goes bankrupt, it has sufficient insurance to pay to clean up its own mines. Instead of paying a third party for cleanup insurance, Peabody Energy has sought to comply with federal and state rules by promising regulators that it has sufficient financial resources on hand to pay for any cleanup costs — a practice known as self-bonding.
A review of securities filings by Reuters, however, found that at the end of 2014, Peabody's assets were insufficient to meet federal and state self-bonding requirements. According to Reuters, "slumping coal prices and declining demand have put [coal] industry balance sheets under stress," raising serious questions about whether Peabody and its competitors can continue to insure their own operations. In 2014, Peabody posted more than $700 million in losses.
"One of the key elements of (federal mining law) is to hold mine operators responsible and avoid taxpayers being saddled with the bill," Greg Conrad, director of the Interstate Mining Compact Commission, an independent agency representing state coal programs, told Reuters in April.
http://thinkprogress.org/climate/2015/06/08/3667061/coal-cleanup-insurance/
