Published: February 22, 2022 |

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A novel expansion of Wyoming’s mine reclamation bonding program sailed through the House Minerals, Business and Economic Development Committee — the bill’s sponsor — on Wednesday and its first reading in the House on Thursday.

Reclamation bonding is meant to hold companies responsible for restoring mined land after operations cease. In theory, it ensures that the state has funds to complete cleanup if a company fails to do so.

Many of the state’s coal producers have historically relied on self-bonding, but after a series of high-profile bankruptcies several years ago undermined that arrangement, the state turned primarily to surety bonds financed through insurers.

Surety bonds, however, haven’t been ideal either. Though more secure than self-bonding, they don’t necessarily guarantee full cleanup funding. And many insurance companies, seeing coal as a risky investment, charge high premiums and require collateral for surety bonds.

“Sureties are getting more and more expensive for operators to pay for. We have significant concerns with the direction that banks and insurance companies are going with regards to servicing fossil fuel companies,” said Travis Deti, executive director of the Wyoming Mining Association.

House Bill 45 aims to ease the burden on the coal industry. It would allow companies mining coal, bentonite, trona, and uranium to skip the third party and put part or all of their bonding money into individual assigned trusts managed by the state treasurer’s office.

The bill passed unanimously Wednesday in the Minerals Committee and received a resounding chorus of ayes on the House floor the following day.

“This bill, quite frankly, it’s one I wish this body had passed 20 years ago, because it would be bearing considerable fruit now,” Rep. Cyrus Western, R-Sheridan County, said in the House ahead of Thursday’s vote.

Under the bill, companies opting into the voluntary program would be required to pay at least 5 percent of their total bonding obligations in cash to the state each year, until their assigned trust was fully funded.

“When you look at the surety rates, and they include both premium and collateral assignment, the 5 percent is less than what you would see as the total obligation the company is currently paying,” Kyle Wendtland, land quality administrator for the Department of Environmental Quality, told the Minerals Committee.

Any bonding obligations not held by the state would still need to be covered by another type of bond.

According to Shannon Anderson, staff attorney for the Powder River Basin Resource Council, cash is the state’s most reliable source of reclamation bonding.

“The challenge you have with a cash bond, particularly for a surface coal mine, is when you have a $100 million bond, coal companies just don’t have $100 million to throw into the fund for reclamation,” said Anderson.

That’s why self-bonding and surety bonding have won out. And that’s why mining companies, conservation groups and the state all hope House Bill 45 can provide a cheaper, safer solution. Several coal states have adopted their own bonding alternatives, but House Bill 45 is unique.

The bill, Anderson said, is “essentially bankruptcy-proof.” Wyoming wouldn’t be dealing with coal companies’ assets, like it would with self-bonds, nor would it have to work with insurance companies. Coal reclamation money would be in cash and largely within the state’s control.

“It’s a good bill. And it’s a good concept. Our goal is to get the program stood up. Once we get it stood up, once we get the rules and regs developed, we’ll just go from there,” Deti said.

There’s a reason, Western told the House, the bill has attracted such broad support.

“It maximizes the mining companies’ money and the money they’re paying for these bonds. It’s a benefit for the environment because the reclamation happens on schedule. And it’s a win for the state because it generates revenue on behalf of the trusts,” Western said.

The rare agreement across interest groups wasn’t lost on Rep. Mike Greear, R-Big Horn and Washakie Counties, chair of the House Minerals Committee and one of the legislators behind the bill.

“Industry wants this, likes it. Regulators like it. Our folks that are looking out for the environment, those groups like it. Wow. It can happen,” Greear said.

Source: Casper Star Tribune

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