How Coal Companies Sidestep Mine Clean Up Obligations

LewisBraham

Worth reading: https://bloomberg.com/features/2022-west-virginia-coal-mining-alpha/?leadSource=uverify%20wall

All these old coal mines present a looming and potentially expensive disaster for coal country—and for taxpayers who could be on the hook. Meanwhile, Alpha’s share price has gone up more than 700% since it exited bankruptcy in 2016. The executives who guided the company through bankruptcy, a corporate split, a re-merger and a name change have been handsomely rewarded. Kevin Crutchfield, CEO from 2009 to 2019, earned at least $72 million in those years. President Andy Eidson, set to take over as CEO, has made at least $16 million since he joined Alpha a decade ago.

Environmental advocates say big coal companies transfer their mines and reclamation obligations to save money, despite the cheery confidence they express in the ability of new owners to clean up their messes. Indeed, Alpha and Lexington both trumpeted their commitment to reclamation when the deal was announced.

“It’s a fig leaf,” says Erin Savage, a scientist at Appalachian Voices in Boone, North Carolina. “It comes down to the math.” Alpha and other large coal companies must know that reclamation would cost them more than they pay to the company that takes the mines off their hands, Savage says. “Otherwise, why would they do it? They’d just do the reclamation themselves.”

AndyJ

It's a huge, expensive mess. My state's crappy asset creation for what's left of a massive coal generating campus (down to two operating units from four, still one of the dirtiest operations in the nation), which is also the plant operator, has filed for bankruptcy; the out of state owners want out, like yesterday; the eventual cleanup will cost the better part of a billion dollars; the in-state utility is asking for a 25% permanent increase in electric rates with plenty more to come; and that utility stopped publishing its costs per unit by generating sources after people noticed that the coal portion costs more than twice as much as a wind farm that came on line in 2005 ... and those figures don't include cleanup.

To top it off, the state legislature is all-in for the dinosaur utility, every session bringing a new attempt to dun taxpayers and ratepayers for the utility's malfeasance, and kill off rooftop solar, the only real option for individual ratepayers to avoid any of the massive coal costs.

yogibearbull

Abandoned oil/gas fields that may now be leaking are also a huge problem.

sfnative

From littering on the street to walking away from toxic dumps there are a whole lot of people who expect someone else to come along and clean up their mess.

Old_Joe

Seems like an inbred characteristic of the human race.

yogibearbull

In medical, healthcare and safety areas, this dumping of liability of on somebody else isn't allowed.

So, there should be general tracing/tracking/claw-back of other liabilities.

Related. Remember, one problem with subprime mortgages was that their bundlers/securitizers (spellcheck complains) pocked the profits but didn't retain any liability. That was a bad business model. After the GFC, securitization-originators (spellcheck happy now) were required to retain some % and also that any defective securities can be returned back within a short timeframe. Those alone fixed many problems. Something similar can be for general asset sales.

Old_Joe

"spellcheck complains"... well, tell it to mind it's own business: "Ignore" or "add to dictionary". My spellcheck now has lots of words that it didn't like. Who's the boss here, anyway?

Mark

I believe that the boss is your wife. At least in your case she is.

Old_Joe

Yeah, well... that's different.

Crash

makes my blood boil to read all of this. But it's no surprise. And how many talking heads are now touting "clean" nuclear lately, with prices up, and the energy crunch in Europe? Let them talk to my nuclear-waste engineer friend at the Savannah River Project. Shit. what a bunch of junk. "Clean" nuclear. LAUGH.
...If it weren't so serious.