ReclamationLiabilityundertheSurface
MiningControl&ReclamationAct(SMCRA)
SMCRA’sStructure
! Aclassic,“cooperativefederalism”program
! Statesmayassumeprimaryregulatoryauthorityover
virtuallyallaspectsofminingandreclamationsubjectto—
! Minimumfederalstandards,and
! Federaloversight,includingindependentfederalenforcement
authority.SMCRA,§521(a)(1)
! StatesmaydefertothefederalOfficeofSurfaceMining
Reclamation&Enforcement(OSMRE),whichthen
establishesaprogramforthatstate.(E.g.,Tennessee)
PermittingRequirements
forReclamation
! Aspartofeverypermitapplication,operatorsmust
submitareclamationplanthatessentiallyassuresthat
minedlandisrestoredtoitspre-miningcapability.
SMCRA,§508.
! Requiresoperators,forexample,to:
1.  Eliminateallhighwalls
2.  Restoreagriculturalproductivityoftheland
3.  Restorepre-mininghydrologicconditions
BondingRequirementsfor
Reclamation
! Performancebondsarerequiredforallmining
operationsinanamountsufficienttoallowtheregulatory
agencytocompletetheworkunderthereclamationplan.
SMCRA,§509
! Liabilityextendsfor5-10yearsafterself-sustaining
vegetationhastakenholdonthereclaimedland
! “Self-bonding”allowedforcompaniesonlywherethey
meetdetailedfinancialcriteria
BondingandBankruptcy
! Bankruptciesarewreakinghavoconthebonding
programwithsomeofthebiggestcompaniescutting
dealsostensiblytolimittheirreclamationliabilitytoa
fractionofreclamationcosts.ConsiderWyoming:
! AlphaResourcespromised$67Mfor$411Min
liabilities
! Archpromised$75Mon$486Minliabilities
! Peabodypromised$127Mfor$790Minliabilities
AssetManipulationtoJustify
Self-Bonding?
! “WhileitmaybetruethatPeabodyEnergyCo.andArch
Coal,Inc.donotmeettherequirementsforself-bonding,
theyarenottheguarantorsoftheirminesbonds.Thereare
[whollyowned]subsidiarycompaniesthatdomeetthe
requirementsforselfbonds….Thispracticeisinfull
compliancewithStateandFederallaws.”
! OSMRESelf-BondingFactSheet(Feb.9,2015)
! Lessthanayearlater,Archanditssubsidiaryfiledfor
bankruptcy;Peabodyfollowedshortlythereafter
PerformanceStandardsfor
Reclamation
! Reclamationmustproceed“ascontemporaneouslyas
practicable”withmining.SMCRA,§515(b)(16)
! Theoriginalfederalrules(CarterAdmin.)imposed“time
anddistance”requirementsforreclamationtiming
! Reaganerarulessimplyadoptedstatutorylanguage
! Contemporaneousreclamationhasprovedimpossibleto
enforce,especiallyforminesthatself-bond
! Minesthatself-bondhavenothingtogainbydelayingthe
“release”oftheirself-bonds
EnforcingtheStandards
! WhenanoperatorviolatesSMCRA,theregulatoryagency
mustissueanoticeofviolation(NOV)andrequirefull
compliancewithin90daysorless.SMCRA,§521(a)(3)
! Failuretoabatetheviolationwithin90daysrequires
cessationofallmining
! Ifthestateagencyfailstoenforce,OSMREissupposedto
stepinandissueanNOV
! Failuretopostormaintainanadequatebondisaplain
violationofthelawandthusrequiresissuanceofanNOV
EnforcementatMinesStill
RemovingCoal
! Stateagreementstoguaranteelessthanthefullcostof
reclamationviolateSMCRA
! Forminesstillremovingcoal,themineshouldbe
requiredeithertopostafullbondorclose
! Ifafullbondisnotfinanciallypossible,the
governmentcoulddemandacceleratedreclamation
asaconditionforallowingminingtocontinue
! Canabankruptcycourtreallyoverridethespecific
environmentalrequirementsofSMCRA?
EnforcementatMinesAbandonedby
BankruptCompanies
! Post-1977abandonedminesremainsubjecttoSMCRAuntilall
reclamationworkiscompleted
! Thegovernmentmaylackleveragetoforcereclamationat
abandonedminesownedbybankruptcompanies,theymust
stillenforce
! Statesmustdenypermitstoanyapplicantwhoownsor
controlsanoperationviolatingSMCRA.SMCRA,§510(c)
! OSMREmaintainsan“applicant/violatorsystem”database
designedtoidentifyinterlockingrelationships
RecentOSMREInitiatives
! OnAugust16,2016OSMREannouncedthatitwillinitiatea
rulemakingonself-bondinginresponsetoapetitionfrom
WildEarthGuardians
! OnAugust5,2016,OSMREissuedapolicyadvisoryonself-bonding
urging—
1.  Vigilanceinmonitoringcompaniesthatself-bondandreplacementwithsuretyorcollateralbondswhereappropriate
2.  Nonewself-bondsuntilatleast2021
3.  Betterdocumentationoffinancialcriteriafornewself-bonding
claims
EnforcementActions
! Severalgroupshavefiled“citizencomplaints”withOSMRE
andseveralstatesdemandingenforcementofSMCRA’s
bondingrequirements
! OSMREhasissued10-daynotices(TDNs)toseveralstates,
someasearlyaslatelastyear,allegingbondingviolations
! Somestateshaveresponded,largelyclaimingnoobligation
toenforceinlightofbankruptcyproceedings
! OSMREcouldnowtakeitsownaction,butithasthusfar
refusedtoact