Blair goes to bat for precaution against millions of dollars in mine reclamation liability

Senate President Craig Blair believes so strongly in a bill establishing an insurance program to cover mine reclamation that he spoke from the floor to exhort his colleagues.

“It’s deserving of the Senate Bill 1 title on it,” said Blair, R-Berkeley.

Senators voted 32-0 with two absences today to pass the bill, which now goes to the House of Delegates for consideration.

The bill would establish a mining mutual insurance company. Later legislative actions could pump $50 million in seed money to establish the program.

“It’ll be a loan, and I expect it to be paid back,” Blair said.

The insurer would be a bulwark against the possibility that the financial troubles of coal companies could render them unable to meet their obligations to reclaim the land they have mined.

Right now, the state’s Special Reclamation Fund is set up to cover any shortfall, but the worry is that could become overwhelmed by obligations.

“If we wouldn’t do this, then it’s just a roulette wheel. We have no idea what’s going to happen,” Blair told senators today.

“This provides a voluntary ability for our mining industry to be able to purchase these reclamation bonds to continue providing the vital baseload supply that coal does.”

The bill establishing the insurance mutual specifies that it would not be considered a department or agency of the state — but instead would be a company governed by five directors. The chairman, though, would be appointed by the governor, and the remaining members would also be named by state officials.

Funding for mine reclamation in West Virginia has become such a question that environmental groups including the Sierra Club filed a federal lawsuit last summer aimed at pressuring the federal government to intervene.

Also last summer, lawmakers heard the summary of a 52-page report laying out the likelihood of mine reclamation as a budget bomb.

In short, West Virginia is subject to federal requirements to have enough money available to complete reclamation for any areas where permit holders default.

West Virginia allows mining companies to post bonds of $1,000 to $5,000 an acre, amounts that the Department of Environmental Protection estimates would cover only about 10 percent of reclamation costs. West Virginia fills the gap with Special Reclamation Funds, which are are funded primarily by a 27.9 cent tax levied on every short ton of coal produced.

Increased reclamation costs combined with economic strain on the coal industry has highlighted the possibility of a financial crisis.

“This is the most important bill. If we were sitting here looking at a $4 billion deficit, a $2 billion deficit, it would set us back from the course we’re trying to set ourselves on,” Blair told senators.





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