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Cleanup Questions Remain in Peabody's Deal with Wyo. Regulators

Peabody Energy is working to return its Rawhide Mine back to hills covered with prairie grass. (Pixabay)
Peabody Energy is working to return its Rawhide Mine back to hills covered with prairie grass. (Pixabay)
August 1, 2016

GILLETTE, Wyo. – Peabody Energy workers are busy planting prairie grass above the company's Rawhide Mine.

Peabody officials say it's an effort to reduce future cleanup liabilities, estimated at $1.2 billion.

But after Wyoming regulators agreed to limit Peabody's exposure to almost 15 cents on the dollar last week, not everyone is convinced the company will make good on its responsibilities.

Bob LeResche, chairman of the Powder River Basin Resource Council, says the deal could leave taxpayers on the hook.

"And it also underscores the problem with self-bonding,” he adds. “That is, if a company is allowed to self-bond, they have absolutely no incentive to complete reclamation because the bonds are costing them nothing. It's just a free promise."

Wyoming's deal with Peabody exempts the company from complying with cleanup-bond requirements during bankruptcy proceedings.

The state also agreed to hold off on enforcement actions related to the company's self-bonds.

Wyoming has made similar deals with Arch Coal and Alpha Natural Resources.

Unlike some coal-producing states, Wyoming allows companies to self-bond, a practice that exempts operators from putting up collateral to make sure mines are restored if the company goes under.

LeResche warns now isn't the time to roll the dice with taxpayer money, and says regulators should compel Peabody to replace self-bonding with real insurance before it exits bankruptcy.

"This huge corporation that's taken profits out of the state for the last 40 years might leave thousand of acres of land worthless unless they start complying with the law, which requires that they clean up their own mess," he points out.

Bills to eliminate the option of self-bonding for coal companies have been introduced in both houses of Congress.


Eric Galatas, Public News Service - WY