Whatever happened to reforming the AML program?

April 18, 2012 by Ken Ward Jr.

We’ve written many times about the Obama administration’s plan to reform the federal Abandoned Mine Lands program so that some states — primarily Wyoming — stop getting tons of coal-tax dollars to spend on things other then cleaning up old, abandoned coal mines (see here and here, just for example). Some folks may remember part of our 2004 series on the AML program that focused on misuse of these funds by Wyoming (subscription required):

In the fall of 1999, University of Wyoming students and faculty moved into a new, $20 million geology building.

Located on the university’s Laramie campus, the 65,500-square-foot facility included new computer equipment, state-of-the-art laboratories and a student lounge.

Wyoming officials paid for most of the building with $17.9 million in federal Abandoned Mine Land money – coal taxes meant to fund reclamation of old coal mines. Federal regulators gave Wyoming the general go-ahead for public facility spending 10 years before. This was the state’s first such project.

Since then, 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, according to federal Office of Surface Mining data and state records.

In Campbell County, Wyoming spent $12 million on an addition at Gillette High School. In Sheridan County, $7.8 million bought a new hospital. The town of Medicine Bow got $560,000 for a new water treatment plant.

Until last month – prompted by questions from The Charleston Gazette – the OSM did not have a complete accounting of how the money was spent.

“The state of Wyoming, quite frankly, was spending the money any way it wanted to,” said Guy Padgett, director of the OSM’s field office in Casper, Wyo.

Now, nearly a decade later, we have this story from a non-profit news organization, WyoFile, reporting:

Since 1977, the state of Wyoming has received (or been promised) $1,051,898,067.60 from the AML fund according to Office of Surface Mining, which operates under the auspices of the Department of the Interior.

While disbursements did go towards the original purpose of the fund – Wyoming has reclaimed more than 1,051 coal and non-coal mine sites – hundreds of millions also got funneled into building water systems in Gillette, clean-air research, a hospital addition in Sheridan, maintaining state highways, and the Wyoming Wildlife and Natural Resource Trust.

The largest single recipient has been the University of Wyoming, which has received more than $200 million in AML-related funding for research in clean coal technology, engineering and over-all energy research. This includes a 2007 $50 million appropriation for building the Michael B. Enzi STEM (science, technology, engineering and mathematics) facility.

A 2011 report from the Office of Surface Mining (OSM) on Wyoming’s AML activity put it plainly. “Wyoming has spent much of its AML funds on non-coal mining related problems.”

According to OSM documents, Wyoming has, thus far, spent only roughly 10 percent of its AML-related distributions, $151.6 million, reclaiming coal mine hazards.

The story does a pretty good job running through some of the background of the issue:  The huge need for funding to clean up abandoned coal mines, mostly in the eastern U.S., and the deal to get the AML program included in the Surface Mining Control and Reclamation Act of 1977, and then goes into the problem that arose when states like Wyoming (with little historic coal production prior to that time) cleaned up all of their sites:

Wyoming had its own unique problem, however.

The state’s star as a coal-producing colossus was on the rise. The year the AML fund came into being, 1977, Wyoming producers mined 44.4 million tons of coal; in 2008, they mined 467 million tons. Thus, each year producers began paying an increasingly higher percentage of per-ton AML contributions, especially since most of Wyoming’s production comes from strip mines, which pay a higher fee.

The problem got more complicated in 1984, when Wyoming voluntarily certified it had taken care of all of its serious abandoned mine issues. This would include remediating a smoldering underground fire at the Acme coal mine outside Sheridan and addressing subsidence (streets and houses collapsing into old coal mines) in Rock Springs.

The story also walks us through the efforts to get some sort of extension of the AML program and the compromises that involved:

What it said, in essence, is that all certified states would get back all the money their coal producers had put into the fund prior to 2006. The payout began in 2008 as “historic payments” and would end in seven years. For Wyoming, this equaled $580 million in $82.7 million annual increments.

In addition, Wyoming would get another $59.5 million annually, earmarked specifically for mineral reclamation projects until 2021.

One of the terms of the deal was that the distributions would not come from the AML fund, but the U.S. Treasury. Moreover, certified states were no longer guaranteed a return of all their state’s share for payments made after 2006.

And it discusses the ongoing efforts for further changes in the program, although from a perspective that is clearly all about protecting the pork money coming back to Wyoming from the AML tax.

It’s great to see these issues getting more attention.  If some of the conservative, anti-government, reduce-spending crowd really wanted to talk about dealing with how tax dollars are spent, the AML issue involves a heck of a lot more money than some minor scandal about the GSA and some conferences someplace. But the way Wyoming spends money intended for cleaning up abandoned coal mines doesn’t seem to get any attention nationally — and I’ve certainly not heard our old buddy Hoppy Kercheval preaching about it.

Even the Obama administration doesn’t really talk much about its proposals in this area, and even if OSMRE Director Joe Pizarchik were the sort of dynamic guy who would be out there pushing the idea, it seems unlikely that the Republicans in the House would let him get a word in edgewise about it.

5 Responses to “Whatever happened to reforming the AML program?”

  1. Cindy Rank says:

    With Congressional approval (pre-Obama administration) of this kind of use of AML funds one has to wonder what’s next if this part of OSMRE’s responsibilities under SMCRA are transferred to BLM as currently seems to be the preference of Salazaar, Hayes, Pitzarchek, et al. in proposals currently under consideration by the administration ….

  2. FactsFirst says:

    The root of the problem appears to go well beyond the question of how much money Wyoming has received and what Wyoming spent it on. If you look at OSM’s own data from its recent buget justification document http://www.doi.gov/budget/2013/data/greenbook/FY2013_OSM_Greenbook.pdf, the coal industry has paid $10 billion in AML fees to date. Congress has appropriated over $7.5 billion as of 2012. (p. 111). OSM’s compilation AML Accomplishments through Sept. 2011 for Priority 1, 2 and 3 AML sites inidcates that the cost of that reclamaion was about $2.2 billion. So the question is where did the remaining $5.3 billion go over the past 34 years? It doesn’t appear that the idea of having priorities has any meaning. The gap is so large it would not be surprising that if one reviewed any state’s(east, midwest or west) use of the grants you would see a large gap between total expenditures and actual reclamation of Priority 1-3 AML sites, not to mention the amount of $$ used for the federal oversight and overhead. The unappropriated balance according to OSM’s document shows almost a $2.5 billion surplus and the industry is still paying in over a quarter billion dollars a year (p 111). This does not appear to be a partisan or ideolgical “problem” but equal opportunity neglect in oversight of the adminstration of a trust fund. Both parties have been in the majority of either House in Congressas well as occupying the executive branch since this pattern first appeared it seems.

  3. Miner 2049'er says:

    The story also ends with:

    “When it comes to AML funds, Wyoming doesn’t have half its money back. Not even close. As of 2011, Wyoming coal mines have contributed $3 billion to the AML fund since 1977. The state has gotten just roughly one-third of what it put in.”

    So, are we complaining that we [Eastern States] are not getting more of Wyoming’s AML monies? Or are we just criticizing the nature of the state or public expenditures funded by the little bit they’ve gotten back to date?

  4. Ken Ward Jr. says:

    Miner 2049’er,

    I can’t speak for what anybody else is complaining about … but the point of my stories in 2004 was to educate the public about the fact that much AML money is being spent on things that have nothing to do with cleaning up abandoned coal mines – while many abandoned mine sites that present public dangers are on waiting lists,with no funding yet.


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