Obama and abandoned coal mines

February 26, 2009 by Ken Ward Jr.

 obamawyoming.jpg

President Barack Obama seems to be picking a fight with Wyoming, the nation’s top coal-producing state. But at the same time, the president might be proposing a change in the federal Abandoned Mine Lands program that would end some long-standing abuses.

We don’t have a lot of detail yet on Obama’s first budget proposal for the 2010 financial year. The administration is still very new, and they’re in the process of developing all of their detailed proposals.

But they did release today short fact sheets on their spending plans for all major government agencies.

Buried in the one for the Department of Interior is one little sentence that says Obama’s plans include:

Terminating payments to coal-producing states that no longer need funds to clean up abandoned coal mines.

I wasn’t completely sure what they were up to , until I read a slightly longer explanation in the bigger budget book issued today:

 Eliminating Mine Clean-Up Payments to States that Have Completed Clean-up. Abandoned Mine Lands (AML) payments from the Office of Surface Mining are made to states with abandoned coal mines requiring clean up. These AML payments were originally intended to be used only for clean-up efforts. In 2006, a provision was added that provided payments, available for unrestricted use, for States that have completed clean-up of all of their abandoned coal mines. This proposal would eliminate these unrestricted payments to States that have completed clean-up, saving close to $200 million in 2014.

To anyone who follows the AML program, the reaction is WOW!

“This is going to be huge,” said Greg Conrad, who follows the AML program for the Interstate Mining Compact Commission, which represents mining states.  “It’s going to be controversial. How the heck did this ever find its way in there? It just completely eludes me.”

But, Obama singled out this proposal when he announced his budget proposal:

Interior Secretary Salazar will save nearly $200 million by stopping wasteful payments to clean up abandoned coal mines that just happen to have already been cleaned up.

What Obama is doing may be aimed at fixing a huge problem that the Gazette pointed out in a series five years ago about the AML program, Abandoned Promises. As I wrote at the time:

 … Lawmakers and regulators have allowed more than $1.3 billion of AML money to be diverted to other projects.

— States have poured $282 million into reclamation of low-priority problems — coal mine sites that harm the environment, but do not threaten public health and safety.

— Huge amounts of AML taxes paid by coal companies have been diverted to reclamation of non-coal mines in Western states. Through the end of June, $281 million – about $1 out of every $10 spend on AML cleanups — had been earmarked for such projects.

— Congress allowed states to funnel money to infrastructure construction that has little, if anything, to do with cleaning up old coal mines. Wyoming — the nation’s largest coal producer — has spent more than $90 million in mine reclamation money to build roads, water systems and a new geology building for the University of Wyoming.

— Since 1996, about $665 million of interest on the AML fund has paid for health-care benefits of thousands of retired miners. Congress ordered these transfers to avoid the financial collapse of the United Mine Workers Combined Benefit Fund, and to acquire money for the bailout from the coal industry.

This all gets a little complicated, and I explained Wyoming’s situation in more detail in this story from the Gazette’s 2004 series.  In short:

  … Wyoming has spent more than $90 million in mine reclamation money on public works projects that have little — if anything — to do with coal mining. Wyoming has diverted AML money to build highways, schools and hospitals.

How could they do this? Well, there were a bunch of loopholes in the AML portion of the 1977 federal strip mining law. Congress intended that once states cleaned up all of their abandoned coal mines, they would become “certified” and no longer get AML money. But the law’s loopholes allowed the funding to continue to flow, and let certified states spend it pretty much however they wanted.

rahall_photo.jpgSome lawmakers from Eastern coalfield states — primarily Rep. Nick J. Rahall, a West Virginia Democrat who loves the AML program — tried for a number of years reform this situation. But senators and representatives from Wyoming just wouldn’t got along. In Wyoming’s defense, their situation is a bit unique. Coal mining is relatively new there — it doesn’t go back a century or more like it does in West Virginia and Pennsylvania — so the state’s inventory of mines abandoned prior to 1977 isn’t very large. But as the nation’s current top coal producing state by far, Wyoming pays far more in per-ton AML taxes than any other state, especially since most all of its production comes from strip mines, which pay a higher fee.

In 2006, with the AML tax about to expire, Eastern and Western lawmakers reached a compromise, and extended the program for another 14 years. Part of the deal was that certified states would no longer receive the standard state share of 50 percent of the AML fees collected from their coal operators, for AML fees paid in future years.  Several other reforms were made, such as elimination of broad language allowing AML money to go to any project that served a state’s “general welfare.”

But, certified states would continue to receive annual AML money, in the form of the “unappropriated state-share balances.”  That’s money that states paid into the AML fund over the years, but which administrations from both parties kept bottled up in Washington to make the federal debt look smaller. (For more on that problem, see this story).

Along with Wyoming, there are three other states — Louisiana,  Montana, and Texas — that are certified. Also listed as certified are three tribes, the Crow, Hopi and Navajo. But by far the biggest player here is Wyoming, which accounts for something like $500 million of the total unappropriated AML money, or about half of the total fund.

So now, Obama wants to stop Wyoming from spending money intended for cleaning up abandoned coal mines on other projects.

Wyoming lawmakers will fight this one to the death. This year alone, the state got about $100 million in AML money. Wyoming’s annual share alone makes up most of the $142 million Obama says his plan would save next year.

And it’s not clear whether Obama’s proposal — as solid as it may be, in terms of spending AML money where it was meant to go — has any kind of constituency. Historically, environmental groups have paid little attention to the AML program. Neither has the coal industry. The folks who follow it are mostly the guys who run cleanup programs at state agencies, the people who administer AML for the federal Office of Surface Minining, and Jim Zoia, the longtime top aide to Rahall.

Another twist is that Obama’s Interior Secretary, Kenneth Salazar, is from Colorado. Officially, Colorado isn’t listed as certified. But a lot of AML watchers think it should be. And under the 2006 amendments, OSM has authority to certify states, whether the states want to be certified or not.

And finally, for the record, Republican John McCain beat Obama in Wyoming, with 65 percent of the vote to 33 percent for Obama.

3 Responses to “Obama and abandoned coal mines”

  1. Mike Capps says:

    I have been following the AMR program in Utah for many years now. It seems to follow quite closely to that of Wyoming.

    In Utah, these coal funds, designed for abandoned coal mine reclamation, have been diverted to hard rock mine reclamation, which have no impact on the environment, nor public safety concern. The original intent of AMRP funding has been so stretched and skewed, that it is being spent on about anything the state can get away with spending it on.

    In these ‘trying economic times’, why are we wasting hundreds of millions of dollars per state to reclaim lands which are not a threat in any way? In my opinion, these funds could be better spent elsewhere, eg. public schools, transportation, etc.

    Abandoned coal mines (also known as Soft Rock Mines) are dangerous to any who enter, can cause environmental damages, and should be plugged. However, Hard Rock mines (Gold, Silver, Zinc, etc) do not share these same concerns, due to the stability of the surrounding rock.

    It is my opinion that once abandoned coal mines have been reclaimed, these taxes to the coal companies should be cut off, and the federal funds diverted to projects that matter, in the long run, putting money back in the pockets of the people.

  2. James says:

    Mike – You must not have been following too closely or are not well versed in hard rock mining techniques or legacies. As you state – “Hard rock mines do not share these same concerns.” Have you ever been to an old hard-rock mining site? Have you ever collected samples of the waste materials, surrounding surface water or groundwater and had them analyzed? Abandoned hard rock mining sites degrade our environment and cause human health and safety concerns. Some contain open shafts, open adits, waste rock and tailings piles (elevated in heavy metals such as arsenic and lead), stream and fisheries degradation, cyanide impacts to groundwater and surface water, acid mine drainage, etc. The impacts to the surrounding environ are very similar to soft rock mining sites with the exception of mine fires. I speak as I am from Montana and would like the president and his staff to consider this cut in funding on a state by state basis. Here is why-

    The Abandoned Mine Land (AML) fund originated in 1977 by signing of the Surface Mining and Control Act (SMCRA). It was and still is a tax on every ton of coal that is removed from the earth by industry. The fund was established to protect the country’s natural resources from industry’s irresponsible acts. How many times has industry acted irresponsibly in the past? Just take a walk around the historic coal mining areas in Pennsylvania, West Virginia and other Appalachian states. The rivers are flowing red from acid mine drainage, fisheries are devastated, town’s drinking water supplies contain elevated levels of heavy metals and entire towns have been lost because of subsidence issues or coal fires have even swallowed towns (Centralia, Pennsylvania). Since the coal companies came in, removed the resources and walked away with huge profits and then vanished or filed for bankruptcy; who is fitting the bill for trying to deal with these historic mining atrocities? The AML fund is!

    According to SMCRA’s 1986 amendment, states or entities that had dealt with all of their coal related pollution and safety concerns became certified to use the funds for other types of reclamation and restoration activities. The states of Montana, Wyoming, Texas and Louisiana are certified, as well as, the Crow, Navajo and Hopi Nations.

    This following diatribe is not about Wyoming and their use (or misuse depending on your viewpoint) of the AML funds. The state of Montana will be penalized for being proactive by the elimination of this funding source. The state of Montana cleaned up their abandoned coal legacy sites in 1990 utilizing AML funds and became certified to use the funds on other reclamation projects. Since 1990, the State of Montana has addressed the reclamation and restoration of 31 hard-rock (gold, silver, etc) mining legacy sites that had significantly degraded the environment and had impacted human health and safety. Montana has an additional 138 similar sites that are ranked as high priority and are contributing to the degradation of the environment and pose health and safety concerns. Since becoming certified, Montana has used its allotted portion of the AML fund only towards reclaiming abandoned hard-rock mine sites as well as continuing to address reoccurring coal mining related issues (underground fires, subsidence, etc.). The AML funds returned to the State of Montana were and continue to be utilized towards the benefication and reclamation of past abandoned mine lands.

    The State of Montana can be proud of its responsibility and utilization of the AML funding source. Montana’s abandoned mine program has a proven track record of successfully cleaning up the environment, while putting people to work. The AML program is a major component of Montana’s restoration economy. As of 2006 Montana has contributed in excess of $320 million to the federal government for its AML “trust” fund. Additionally, Montana coal fees will continue to feed the fund through 2022 even if Montana does not receive any of the money back. Abandoned mine lands in Montana are currently polluting streams and creating hazards. Montana’s landscape has been scarred and damaged by mining and there’s a dire need to reclaim these lands. We must not lose this critical funding for abandoned mine reclamation in Montana.

    Additionally, how closely have you followed your uranium mining history? Utah is besieged with uranium exploration and extraction concerns. Utah is not a certified state, so it will continue to reap the benefits of the AML fund and utilize such funding at its own discretion.

  3. Joshua McKenzie says:

    I have a plan to reclaim coal mine shafts for a renewable energy plan(free power 4 all citizens+jobs 4 all)

Leave a Reply