WildEarth Guardians

Thursday, April 21, 2016
New Mexico, Wyoming Face Suit for Letting Bankrupt Peabody Coal off the Hook

Guardians Puts States on Notice: Coal Giant Must Pay up or Shut Down
Contact: Jeremy Nichols (303) 437-7663 jnichols@wildearthguardians.org

Denver—The states of New Mexico and Wyoming were put on notice today that if they don’t stop giving Peabody coal illegal breaks over its mine clean ups, WildEarth Guardians intends to file suit to compel them to stop.

“No more breaks to big coal,” said Jeremy Nichols, WildEarth Guardians’ Climate and Energy Program Director.  “With industry in a tailspin and companies going bankrupt, now is the time to hold Peabody accountable to cleaning up its mess and to helping our nation transition from coal.”

At issue is nearly a billion dollars of coal mine clean up liability in New Mexico and Wyoming that currently is on the shoulders of taxpayers. 

For years now, Peabody has been allowed by the states to “self-bond,” or to guarantee the cost of reclamation based on its own finances instead of posting an actual bond. Last week, Peabody filed for bankruptcy, meaning the company no longer has the financial means to guarantee reclamation of its mines with its own money.

This means taxpayers are now on the hook for cleaning up Peabody’s mines if the company goes out of business.  Given the overall decline of the coal industry, such an outcome is more likely than ever.  Ultimately, taxpayers could be forced to shoulder $909 million to cover reclamation.

“It’s bad enough we’re shouldering the cost of the coal industry’s climate pollution, now we’re facing the cost of basic reclamation,” said Nichols.  “It’s time for Peabody to accept the reality that the American public is no longer content to prop up their failing coal business.  It really is time for Peabody to pay up or shut down.”

Under state and federal laws, a company can’t mine coal if it can’t post an adequate clean up bond.  In letters today, WildEarth Guardians put regulators in New Mexico and Wyoming on notice that they must ensure Peabody either posts adequate bonds or ceases coal extraction.  If the states fail to act, they face legal action.

Already, other states have stepped up to ensure Peabody posts adequate bonds for its mines.  Only days before the company’s bankruptcy, Colorado approved the replacement of Peabody’s self-bonds with corporate sureties, guaranteeing nearly $30 million in clean up.

Peabody is the largest coal producer in New Mexico and Wyoming, as well as the largest in the United States.  In the U.S., Peabody every year produces more than 180 million tons of coal. When burned, this coal produces more than 330 million metric tons of carbon dioxide annually, more than 5% of all U.S. greenhouse gas emissions.

Before its bankruptcy, WildEarth Guardians and other groups called on Peabody CEO, Glenn Kellow, to acknowledge the bleak future for coal and to bring about an orderly and effective end to Peabody’s coal business.  In a letter to Kellow, the groups called on Peabody to help communities and workers transition from coal, rather than deny the company’s demise.

“This is about holding Peabody and other companies accountable to helping our nation transition from coal,” said Nichols.  “Guaranteeing reclamation, providing resources for communities and workers, and coming clean with the American public that there is no future for coal are critical steps that need to be taken by industry to ensure we become more sustainable and prosperous.”