ERP Environmental Fund Story Archives - West Virginia Public Broadcasting

Court Says Lawsuit Against W.Va. DEP Over Mine Reclamation Fund Can Proceed

A federal court has ruled that a lawsuit brought by environmental groups over West Virginia’s coal mine reclamation fund can continue.

In an order issued Friday, U.S. District Judge Robert Chambers dismissed a request by the West Virginia Department of Environmental Protection to toss the July lawsuit filed by environmental groups.

The three organizations — the Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy and Sierra Club — argued the state agency violated federal mining laws when it failed to alert federal mine regulators it was putting more than 100 mining permits controlled by one company — ERP Environmental Fund— into a special receivership in order to avoid forfeiting the permits to the state.

The groups noted that the move, as well as recent bankruptcies of Murray Energy and Blackjewel Mining L.L.C., jeopardized already inadequate funds the state relies on to clean up coal mining operations when companies walk away. Under the Surface Mining Control and Reclamation Act, state regulators are required to inform the Office of Surface Mining, Reclamation and Enforcement, or OSMRE, when there are significant changes to the state’s coal mine cleanup program, including financial changes.

According to documents filed by the DEP earlier this year, the state’s Special Reclamation Fund would be “overwhelmed” if ERP’s permits were forfeited. The agency said the company has an estimated $115 million in bonds, but it would cost at least $230 million to remediate all of the company’s operations. The difference would fall to the reclamation fund.

According to a Jan. 9, 2020 report to the West Virginia Legislature, as of Sept. 30, 2019, the Special Reclamation Fund had just over $58 million in cash and investments. It is funded by a 12.9 cent tax per ton of coal mined in West Virginia.

State regulators asked the court to dismiss the suit for a myriad of reasons, all of which the court denied. In a statement, the Sierra Club said it expects the case to eventually go to trial.

Environmental Groups Sue DEP Over W.Va. Coal Reclamation Fund

A new lawsuit brought by environmental groups raises the alarm over the solvency of a fund that can be used to clean up coal mining operations when mining companies walk away.

Three groups — the Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy and Sierra Club — filed the citizen’s suit Thursday against the West Virginia Department of Environmental Protection and its secretary, Austin Caperton.

The complaint alleges the agency violated federal mining laws by failing to alert federal mine regulators that recent actions jeopardize the state’s Special Reclamation Fund.

Those actions include the bankruptcies of Murray Energy and Blackjewel Mining L.L.C., the possible bankruptcy of Southeastern Land, LLC and an emergency motion filed by the DEP in March seeking to place more than 100 permits controlled by coal operator ERP Environmental Fund into a special receivership so they wouldn’t be forfeited

“The WVDEP has failed to properly manage its reclamation program, which has led to a dire situation, one in which there is not enough money to clean up mines abandoned by their insolvent operators,” said Karan Ireland, senior campaign representative with the West Virginia Sierra Club.

The solvency of the state’s Special Reclamation Fund and bonding program have long drawn criticism over whether they would be sufficient to cover all of the reclamation work needed across the state.

The lawsuit draws largely from the court actions the DEP took in March against ERP. In an emergency motion the agency wrote that transferring the company’s more than 100 permits to the state’s Special Reclamation Fund “would overwhelm the fund both financially and administratively, with the result that the actual reclamation and remediation of the ERP mining sites could be delayed.”

A spokesperson for the DEP said the agency “cannot discuss pending litigation and cannot comment at this time.”

Environmental Groups To Sue State Over W.Va. Coal Fund

Environmental groups announced Monday that they plan to sue the West Virginia Department of Environmental Protection over what they say is the agency’s failure to adhere to federal reporting requirements for a coal mine reclamation fund.

The West Virginia Highlands Conservancy, Ohio Valley Environmental Coalition and the Sierra Club filed a notice of a pending lawsuit. The groups said in a news release that the DEP failed to notify the U.S. Office of Surface Mining Reclamation and Enforcement if significant funding or budget changes were to affect the enforcement and administration of the special reclamation fund.

Money from the reclamation fund is used to complete mine reclamation when the amount of bonds that are forfeited by companies are less than the actual cost of reclamation. Most of the funding for the special reclamation fund comes from a tax of 27.9 cents on each ton of clean coal mined in the state.

The groups allege the state now considers the fund to be dramatically underfunded and unable to cover the costs of coal mine reclamation.

DEP acting spokesman Terry Fletcher said the agency was viewing the notice and he declined further comment Monday.

The DEP in March sued a company that acquired more than 100 mining permits from Patriot Coal Corp.’s 2015 bankruptcy. Most of the permits are in West Virginia and others are in Kentucky, Illinois and Tennessee.

The DEP said the company, ERP Environmental Fund Inc., laid off all of its employees, ceased operations and abandoned its mining sites. The DEP is seeking to have a special receiver appointed to assume control of the company’s assets to assure compliance with environmental laws.

The environmental groups’ notice said the DEP indicated in its lawsuit that the special reclamation fund would be overwhelmed if it were to take responsibility for ERP’s permits. The notice claims the state now considers the reclamation fund to be dramatically underfunded and unable to cover the costs of coal mine reclamation.