Health of coal-mine cleanup fund raising concerns
COLUMBUS — The health of the state’s reclamation fund used to clean up abandoned coal-mining sites in Ohio has been called into question as the coal industry struggles, mining less coal and funneling fewer dollars into the fund.
As of Jan. 11, the fund balance was more than $22 million. At a state-reclamation forfeiture fund advisory board meeting Thursday in Pickerington, officials estimated that the fund balance will be about $20 million by the end of the year, as cleanup continues at a mining site forfeited by Valley Mining in Stark County.
“I think there’s a concern. I’m aware of where the fund is at and where the fund should be,” Lanny Erdos, chief of Ohio’s Division of Mineral Resources Management, told The Dispatch after the meeting. “We’re doing all we can to get to that point.”
A new actuarial report that will examine the fund’s health is due out later this year. Preliminary figures crunched by Pinnacle Actuarial Resources Inc. will be discussed at the board’s next meeting March 13.
A 2017 actuarial report estimated that Ohio’s fund needed $25.1 million to cover long-term exposure to bond-forfeiture liability and an additional $25.7 million to cover a shock-loss scenario in which an average-size coal-company permit holder would walk away from a mining site without performing reclamation.
Since the last report two years ago, former Gov. John Kasich’s administration raided the reclamation fund of $5 million in 2017 to help balance the state budget. That money was never returned even though the state has $2.7 billion sitting in a rainy-day fund. After the Kasich administration’s transfer, the fund never really recovered.
“The new administration is aware of it,” said Michael Sliva, who chairs the board. “They seem receptive to discussions.”
Sliva previously told The Dispatch that the board learned Kasich’s office transferred the money after it had occurred.
“We’ve expressed our disagreement with the move,” he told The Dispatch.
The Dispatch reached out to staff members in Gov. Mike DeWine’s office about the issue in the days leading up to him taking office. DeWine’s staff “respectfully declined” an interview and did not comment Thursday.
A spokesman previously said the governor has “repeatedly noted that the safety of all Ohioans, including those affected by abandoned mines, will be a priority for all cabinet agencies.”
In Ohio, coal companies pay $2,500 for each acre they will mine. That serves as collateral in case a company abandons or forfeits the mining site. The state would then use those dollars to clean the mining site.
On top of that, companies pay a severance tax of 14 cents per ton of coal that goes into the reclamation fund, where it is collected with other companies’ tax payments to rehab mining sites. The reclamation fund is a second option for funding environmental cleanup if a company’s bond amount is inadequate in covering the cost.
Federal law requires that bonding to cover for reclamation costs or other financial assurances be provided in full for mining sites before permits are issued.
State officials continue to monitor federal bankruptcy proceedings for Westmoreland Coal, which holds nearly a third of the state’s mining permits.
The company, based in Englewood, Colorado, has been trying to find a buyer for its Ohio mining sites. Westmoreland’s liability estimate is nearly $150 million, according to records. The company has paid the state $16 million in bonds for individual mining permits. If the company failed to meet its financial obligations for each site, that could leave taxpayers on the hook for the difference.
“They’re continuing to do the reclamation,” Erdos told The Dispatch. “They’re meeting their reclamation obligations today, but obviously there are always concerns.”