WildEarth Guardians

Wednesday, January 13, 2016
Utah Coal Mine Bonding Found Illegal

Bowie Resources, State's Largest Coal Company, Being Let Off the Hook for Millions in Clean up Guarantees; Comes as Company's Mine Bonds Under Scrutiny in Other Western States
Contact: Jeremy Nichols (303) 437-7663

Denver—In response to a formal complaint from WildEarth Guardians, the U.S. Office of Surface Mining Reclamation and Enforcement has notified the State of Utah that it has illegally allowed the state’s largest mining company to avoid posting bonds to guarantee the clean up of its mines.

“This is another egregious example of states giving breaks to big coal at the expense of our public lands and our climate,” said Jeremy Nichols, WildEarth Guardians’ Climate and Energy Program Director.  “Thankfully, it appears the sweetheart deals are going to come to an end and Bowie Resources is going to pay its fair share.”

Federal law requires that coal companies post a bond to cover the cost of cleaning up their operations in the event that they go out of business.  Bonding is meant to ensure that coal mines are fully cleaned up, even where a company fails, and to ensure that taxpayers are not forced to foot the bill for mine reclamation.

A review of records by WildEarth Guardians found that over the years, the State of Utah has failed to adjust bond amounts to keep pace with increased reclamation costs at the state’s three largest coal mines:  Dugout Canyon, Skyline, and SUFCO, which are owned and operated by Bowie Resources.  Essentially, the amounts haven’t kept pace with inflation.

All told, the company has been allowed to avoid paying more than $6 million for its bonding, although this figure is likely much higher.

Bowie is the largest coal producer in the state, and its three mines, which are located on public lands and primarily produce coal owned by the American public, are now the largest producers in Utah.  The company also recently acquired mines in Colorado and New Mexico, making the company the largest coal mining company in the western United States outside of the Powder River Basin.

The company has faced controversy recently over its plans to export more coal through the Bay Area of California.  In early 2015, the State of Utah Community Improvement Board voted to loan $53 million to four Utah counties to invest in a new export facility.  Bowie’s operations at the company’s SUFCO mine have been cited as a key driver for the investment.

Bonding of mines owned by Bowie Resources has also lately received heightened scrutiny.  The company is seeking government guarantee of bonding at its newly acquired mines, a move that would allow the company to avoid more than $360 million in reclamation liabilities.

“The American public shouldn’t be footing the bill for Bowie’s clean up guarantees, especially as our nation moves away from coal to protect the climate,” said Nichols.  “The handouts to the coal industry have to stop, Bowie either needs to pay up or get out of the coal business.”

On December 18, WildEarth Guardians filed a formal complaint over Utah’s inadequate bonding of Bowie’s mines.

In notices to the State of Utah sent on January 7, the Office of Surface Mining Reclamation and Enforcement in Denver responded that it has reason to believe the state “has not assured sufficient bonding” and “has inaccurately calculated the cost of reclamation.” 

The agency gave the state 10 days to address the bonding deficiencies or face the prospect of federal enforcement.

WildEarth Guardians has posted interactive maps providing more information on Bowie Resources, the company’s operations, and the climate risks posed by the company’s mining and export plans.