Democratic News

Apr 05 2018

Cantwell-Requested GAO Report Recommends Ending The Risky Practice Of Self-Bonding

GAO finds taxpayers remain at financial risk from coal mines with unsecured financial assurances

Washington, D.C. – Today, the Government Accountability Office (GAO) released a report regarding the management of financial assurances for coal mine reclamation. The report requested by Ranking Member of the Senate Energy and Natural Resources Committee U.S. Senator Maria Cantwell (D-Wash.), Ranking Member of the House Natural Resources Committee Raúl M. Grijalva (D-Ariz.), Rep. Lowenthal (D-Calif.), Senator Durbin (D-Ill.), Rep. Cartwright (D-Pa.), and Rep. Dingell (D-Mich.) recommends that Congress consider amending the Surface Mining Control and Reclamation Act (SMCRA) to prohibit self-bonding.

“I welcome GAO’s recommendation to pass responsible legislation making coal companies clean up pollution. Secretary Zinke should also reverse course and crack down on this irresponsible coal mining practice,” said Senator Cantwell.

“It’s absurd that coal companies are allowed to profit off our land and then leave American taxpayers with the bill to pay for the clean-up costs,” said Rep. Grijalva. “It’s time we put an end to the cycle of allowing dirty industries to put communities air and water at risk with no repercussions.”

“I applaud this important work by GAO which reinforces what we have known for years:  the practice of self-bonding by coal companies is outdated and presents a significant financial risk to the American people.  No other energy or mineral extraction sector allows for the practice of self-bonding, so neither should coal,” said Congressman Cartwright.  “Changing the law to prohibit self-bonding would guarantee that coal companies have adequate funds to complete mine reclamation.  The Coal Cleanup Taxpayer Protection Act, which I introduced in the House, does exactly that.  Hardworking communities and taxpayers shouldn’t be footing the bill to clean up expensive messes they did not make.”

The Surface Mining Control and Reclamation Act (SMCRA) requires coal companies to ensure that they can cover the cost of reclamation: rehabilitating land after coal mining operations on it have stopped. The law allows the Interior Department and state agencies to accept reclamation performance bonds from coal mining companies without separate surety, known as “self-bonds.” But the law does not require the acceptance of these bonds and some states do not allow their use.

In a previous report requested by Senator Cantwell, GAO confirmed that coal mining alone gets a sweet deal: authorization to demonstrate financial assurance through self-bonds. Specifically, GAO found that “surface coal mining is the only activity we reviewed for which federal requirements allow real property—collateral in the form of real estate—or self-bonding. Self-bonding used to be allowed for hardrock mining, but BLM [the Bureau of Land Management] adopted regulations in 2001 prohibiting the practice for new operations, in part because of concerns that self-bonds were less secure than other forms of financial assurances.”

In March of 2017, Senator Cantwell re-introduced the Coal Cleanup Taxpayer Protection Act. The bill would protect taxpayers from liabilities caused by coal companies’ risky financial practices.

The full report can be read here.

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