News February 23, 2016

DEQ Responds To OSM Ten-day Notice

by Jackson Hole. Media

DEQ

The Wyoming Department of Environmental Quality (DEQ) responded to the Office of Surface Mining and Reclamation and Enforcement’s (OSMRE) ten-day notice related to the reclamation bonding for the mining operations of Arch Coal, Inc., and its subsidiary, Arch Western Resources, LLC.

Click here to view DEQ’s response letter

In the January 21, 2016, ten-day notice, OSMRE stated that it:

believes it is most appropriate to forward the Citizen’s Complaint to your office via the Ten Day Notices (TDN) process in order to provide the opportunity for you to more fully respond to the allegation that the 2015 analysis done by your office no longer reflects the current self-bond eligibility of the company and that the self-bonding requirements of the approved State Program are violated because the guarantor’s assets are being used by the parent company as collateral for secured corporate debt.

 

DEQ has asked that OSMRE conclude that DEQ has taken appropriate action regarding the issues raised in the TDN. DEQ has followed all rules and regulations in regard to reviewing and making determinations about the self-bonds guaranteed by Arch Western Resources, LLC. Also, DEQ properly declined to take enforcement action in response to the Citizen’s Complaint. OSMRE has recognized DEQ’s record of compliance with its self-bonding program. In its August of 2015 Annual Evaluation Report for the Regulatory Program Administrated by DEQ’s Land Quality Division, OSMRE stated:

“The Land Quality Division continues to administer a rigorous and effective Title V reclamation program for the largest coal producing region in the country. The Land Quality Division’s permitting, compliance and inspection and enforcement programs are meeting all requirements expected of it by the [OSMRE].”

This report also specifically addressed DEQ’s self-bonding program. “During the Evaluation Year, the OSMRE conducted and informed review of [the Land Quality Division’s] implementation of their self-bonding program, to determine compliance [with] the requirements set forth in the Wyoming Coal Rules and Regulations, at Chapter 11. The OSMRE found that the [Land Quality Division] implements their self-bonding program in full compliance with their self-bonding rules.”

 

DEQ has also taken appropriate action in response to the bankruptcy filing by Arch Coal, Inc., and its subsidiaries.

  • DEQ has chosen to exercise its authority under Wyo. Stat. Ann. § 35-11-701 to negotiate a settlement that will ultimately eliminate any potential violation of DEQ’s self-bonding rules by Arch Coal, Inc., or its subsidiaries. That statute provides that if “the director or the administrators have cause to believe that any persons are violating any provision of this act or any rule, regulation, standard, permit, license, or variance issued pursuant hereto, … the director through the appropriate administrator, shall cause a prompt investigation to be made.”
  • This authorization to enter into settlements is similar to West Virginia’s settlement authority, which the court presiding over the bankruptcy proceedings for Alpha Natural Resources, Inc. found to be a lawful source of authority for West Virginia to enter into a substantially similar settlement agreement in that case.
  • DEQ, as the entity with exclusive jurisdiction over the matter, exercised its considered discretion to enter a settlement that protects the public, the environment, and sets a firm timetable for Arch’s transition away from self-bonds.

DEQ’s actions have ensured that the public has not incurred one dollar in reclamation liability for Arch’s operations in Wyoming. At the same time, not one miner has been put out of work as a result of DEQ’s actions. Reclamation continues at all seven sites on schedule and there has been no harm to the environment, public health, or public safety.

 

 

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