The agency said it has multiple goals for the rulemaking, which would be the first significant update to the outlines in three decades, such as a modification to self-bonding eligibility standards, including for parent and other corporate guarantors. Prior criteria that looked at past performance will now include more forward looking factors, it noted.
Additionally, the OSMRE is seeking to provide an independent third-party review of self-bonded entities’ annual financial reports and certification of the current and future financial health of self-bonded entities.
Other goals include the establishment of a percentage for all self-bonds to be supported by collateral not subject to any other lien or used as collateral for any other liability; providing diversification for financial assurance/reclamation bonds for each mine to prevent a single entity from providing a mine’s entire bond; giving regulatory authorities better tools to obtain replacement bonds; and minimizing associated risks with corporate sureties tied to a cash-flow basis.
“OSMRE will also explore the possibility of new financial assurance instruments to provide the coal industry with more financial assurance options to enhance flexibility, and the creation of incentives for mine operators to complete timely reclamation and apply for final bond release, including a financial assurance release schedule,” agency officials said.
While states currently conduct their own self-bonding programs, changes to the industry — including a string of bankruptcies in the operator space — has “exposed the limitations” of the outlines as they stand now, according to OSMRE Director Joe Pizarchik.
“The U.S. coal market is dramatically different from when our self-bonding regulations were last updated 30 years ago,” Pizarchik said. “This is a turbulent time of energy transformation in our country, of declining use of coal and increased use of cheaper natural gas and renewable energy…[and] we have a responsibility to protect the public’s interest by keeping up with these changes.”
The agency, with the posting of its plans in the Federal Register, is now going about collecting input on what changes are needed to the self-bonding structure. The OSMRE currently has direct oversight of surface coal mining and reclamation activities in 12 states; another 24 states have primary authority for surface coal mining regulation, as they have developed and obtained approval of their respective regulatory programs. Nineteen of the primacy states allow self-bonding, while five do not.
A YouTube announcement of the agency’s plans filmed by Pizarchik can be viewed here.