Justice Says Coal Operations Buyback Includes Liabilities

Billionaire Jim Justice says his buyback of coal mining operations in West Virginia includes some big liabilities.

Justice completed the $5 million acquisition of Bluestone Inc. from Russian mining and metals company Mechel OAO last month. He had sold Bluestone’s mining operations to Mechel in 2009 for $436 million in cash and more than $83 million in preferred shares.

Justice tells The Charleston Gazette that he assumed responsibility for the company’s reclamation costs. He says there’s also a pension liability, worth tens of millions of dollars, and taxes Mechel owed to counties where the mines operated.

West Virginia Environmental Protection Secretary Randy Huffman says the mining operations’ reclamation costs could be up to $60 million.

W.Va. Proposes Fees in Tank Law to Prevent Chemical Spills

State environmental regulators say the highest-risk aboveground storage tanks could face a $375 annual fee in a law to protect water supplies.

Department of Environmental Protection Secretary Randy Huffman made the comments to a state Senate budget panel Monday. The fees aren’t finalized.

Out of more than 48,000 tanks registered under the law, Huffman said almost 3,800 near a water supply and 3,700 others considered high-risk could face the $375 annual per-tank fee.

Huffman said about 37,000 tanks that aren’t as risky could have to pay a $61 annual fee.

He said about 3,700 tanks containing substances like water and food products wouldn’t have to pay fees.

The law requiring inspections and registrations responds to a chemical spill that spurred a tap-water ban for 300,000 people last January.

New EPA Rules Still Unclear to W.Va. Officials

The U.S. Environmental Protection Agency proposed new carbon-emission rules Monday that aim to cut carbon dioxide releases from coal fired power plants. The overall national target is a reduction of 30 percent by 2030 compared to 2005 levels.

State officials say they’re still working to understand what the 600-plus page document really means for West Virginia, but for now, many are claiming the bad outweighs the good and are pledging to do everything they can to stop it.

What state officials do understand about these draft regulations so far is that they are different than anything the EPA has proposed in the past.

In September, the agency released a proposal to reduce carbon emissions from newly constructed power plants. Monday’s proposal, however, doesn’t focus on the individual facility. Instead, it sets carbon dioxide standards for the state as a whole.

“What EPA is saying is that by 2030, overall West Virginia’s total CO2 emission rate, which is pounds of CO2 per kilowatt hour that we generate, has to be 1620 or less,” said West Virginia Department of Environmental Protection Secretary Randy Huffman.

He explained to meet the EPA’s new standard, West Virginia would have to reduce its CO2 emissions by 15 percent compared to 2012 measurements, the latest available.

Huffman said there are some efficiencies to be found within coal fired power plants themselves, but not enough to meet the reduction standard.

“Knowing how much energy we produce by coal, knowing what the coal CO2 numbers are now,” he said, “it’s going to require a significant reduction in the combustion of coal and a replacement of that by some other energy source.”

An option is to switch from coal to natural gas, an industry that happens to be rapidly growing in the Northern Panhandle and North Central portions of the state, but Huffman said just switching to natural gas won’t do enough. West Virginia will have to go even further to reduce their emissions under the new rule.

Other options set out in the EPA’s plan include things like energy efficiency, investing in renewable energy and making power plant upgrades, but it can also include offering discounts to consumers in exchange for shifting their energy consumption to off-peak hours.
 

“We appreciate that the EPA is giving our state some flexibility to design an implementation plan,” Gov. Earl Ray Tomblin said during a press conference Monday, “but based on the briefings we’ve had, these proposals appear to realize some of our worst fears.”

“The bottom line is the only way to comply with these rules is to use less West Virginia coal.”

Tomblin said his administration will do everything they can to block the rules, but will continue working with EPA Administrator Gina McCarthy to mitigate the impacts he said communities in West Virginia will feel as a result.

Attorney General Patrick Morrisey said his office is looking at the legalities of the rules, calling it an overreach of federal power.

WV DEP Seeking Public Comments on Storage Tank Regulation Rules

The West Virginia Department of Environmental Protection wants public input on what should be included in the rules to regulate aboveground storage tanks, according to an agency release.
 
The release says as a requirement of the newly passed Senate Bill 373, also known as “The Water Resources Protection Act,” and to others simply as “The Tank Bill,” the agency must draft rules for a new Aboveground Storage Tank Regulatory Program in time for lawmakers to consider them during the 2015 legislative session.

The DEP says it will file its proposals as an emergency rule this fall.
 
The release states normally, public comment is taken after rules have been drafted. However, because this program is new to the DEP, Cabinet Secretary Randy Huffman decided to approach the rule-making process for the tank program a little differently.
 
“We would appreciate input from industry groups, experts, any member of the public with an idea about what needs to be addressed in the rules,” Huffman said in a written statement. “We will consider that input as we draft the regulations.”

Ideas can be submitted to the agency via email or written mail by May 15.

The proposals are coming about due to a January chemical spill into the Elk River, that left 300,000 West Virginians without safe drinking water for several days.

More information on how to submit public comment can be found here.

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