WASHINGTON Dec 9 U.S. taxpayers could be left
with multibillion-dollar liabilities if large coal companies are
pushed to bankruptcy, the Interior Department Secretary said on
At issue is a practice known as self-bonding, allowed under
a decades-old mining program, in which some of the country's
biggest coal companies forego insurance on a portion of future
mine cleanup costs.
Officials estimate that roughly $3.6 billion in self-bond
liabilities could fall to taxpayers and "it is a big issue,"
Secretary of the Interior Sally Jewell told Congress.
"With the increased financial fragility of many coal mining
companies, if they are self-bonded that does potentially leave
the states and the taxpayers at risk," Jewell told the Natural
Resources Committee of the U.S. House of Representatives.
On Tuesday, another Interior Department official said the
Obama administration was alarmed about self-bonding but offered
no concrete plans to protect taxpayers.
The coal industry has been battered by President Barack
Obama's pollution controls on power plants and an abundance of
natural gas in recent years leading some investors to predict
some top companies could fail.
Coal operator Alpha Natural Resources Inc left
behind more than $670 million in self-bond liabilities when it
filed for bankruptcy in August and officials have not determined
how best to protect taxpayers from that hit.
Leading coal companies have warned investors that
eliminating the self-bond subsidy would drive up their costs for
mine cleanup protection.
Arch Coal Inc, Peabody Energy Corp and Cloud
Peak Energy Inc are among the nation's largest coal
companies that make use of the self-bond program.
Representative Debbie Dingell pressed Jewell on the issue
Wednesday and warned that taxpayers are positioned to prop up
the coal industry as they did banks during the global financial
"As with most things that are labeled too-big-to-fail, many
of these companies are now failing," said the Michigan Democrat,
who called self-bonding a "textbook case of taxpayer exposure to
polluter cleanup costs."
(Reporting by Patrick Rucker; Editing by Alan Crosby)