Patriot Coal Says It Is Getting Out of Mountain Top Removal

As part of a deal with citizen groups, Patriot Coal
is going to retire this dragline mining machine
 that is currently used at its Hobet complex
 along the Boone-Lincoln County line.

Patriot Coal, the second largest producer of surface-mined coal in West Virginia, has just agreed to end its mountaintop removal mining. Enormous environmental costs foisted on Patriot Coal forced them to file for Chapter 11 bankruptcy in July 2012.  They admitted that the costs of treating its contaminated mine water would exceed $400 million. Along with its commitment to end large scale surface mining in the region, Patriot’s CEO acknowledged its human and environmental costs, telling the judge overseeing the agreement that “Patriot Coal recognizes that our mining operations impact the communities in which we operate in significant ways.”

Patriot Coal has agreed to phase out mountaintop removal and other forms of strip mining, in a move Patriot officials say is in the best interests of their company, its employees and the communities where it operates. In a deal with citizen groups and environmentalists, Patriot said it would never seek new permits for large-scale surface mining operations, according to details of the settlement that were made public in federal court Thursday afternoon.

St. Louis-based Patriot can continue some existing and smaller mining projects, but must also implement a cap on surface production and eventually stop all strip mining when existing coal leases expire.

The deal does not require Patriot to immediately close any mines or lay off any workers. The company must cut corporate-wide surface production starting in 2014, and gradually reduce it to no more than 3 million tons annually -- less than half of 2011 surface output -- by 2018.

Patriot, the second largest producer of surface-mined coal in West Virginia, becomes the first U.S. coal operator to announce plans to abandon mountaintop removal, a controversial practice linked to serious environmental damage and coalfield public health problems.

The settlement still faces a review by the U.S. Justice Department, and needs approval from Chambers and from the judge overseeing Patriot's bankruptcy case.

Mountain Top Removal

Patriot had already agreed to a deal to clean up dozens of illegal selenium discharges at three major mining complexes in Southern West Virginia. But since filing for bankruptcy reorganization in July, Patriot has been at odds with citizen groups over the company's efforts to delay its compliance deadlines.

The settlement gives Patriot the additional time, bumping back compliance deadlines from May 2013 until August 2014. Hatfield said the move allows the company to defer up to $27 million of compliance costs from 2012 and 2013 to 2014 and beyond, improving Patriot's liquidity as it tries to complete bankruptcy reorganization.

Details of the broader deal on mountaintop removal were spelled out in a 15-page "global settlement" document made public Thursday:

Patriot will never submit new applications for Clean Water Act "dredge-and-fill" permits for new "large-scale surface mining." That term is defined as any surface mining that requires an individual permit review by the federal Army Corps of Engineers. It does not include permits for underground mine face-ups, coal-hauling roads, preparation plants and other such facilities.

The company agrees to a five-year plan to reduce its surface mining tonnage from last year's 7.7 million tons to a permanent cap of 3 million tons annually in 2018. If Patriot buys other companies that conduct surface mining, those new subsidiaries are subject to the tonnage cap. If Patriot sells any of its surface mining operations, the expected future tonnage from those mines is subtracted from the cap.

In West Virginia, Patriot will retire its two draglines, giant boom excavators used at its largest mountaintop removal sites. A dragline used at its Paint Creek complex will be retired within 60 days, while one at its Hobet complex along the Boone-Lincoln border will be retired by Dec. 31, 2015. Patriot can sell the machines, but only if the buyer agrees never to use them again in Kentucky, Tennessee, Virginia or West Virginia.

Patriot can continue with "small-scale surface mining," but only at existing mining complexes where both underground and surface mining was already underway or planned. Small-scale surface mining is also limited to coal already owned or leased by Patriot, and is defined as not being associated with the construction of valley fills requiring an individual permit under Section 404 of the Clean Water Act.

Patriot agrees to withdraw existing permit applications for two large surface mines, Colony Bay and Hill Fork, both in Boone County. The company can continue to pursue a permit for its Huff Creek Surface Mine in Logan County, and environmental groups agreed not to file a legal challenge unless the U.S. Environmental Protection Agency raises water quality concerns about the proposal.

While the agreement eventually reduces Patriot's strip-mining production to zero, it phases that reduction in starting with a cap of 6.5 million tons in 2014. Patriot's surface mining production would be limited to 6 million tons annually in 2015 and 2016, and 5 million tons in 2017 before a cap of 3 million tons becomes effective in 2018.

In mountaintop removal, coal operators use explosives to blast apart mountains to uncover valuable, low-sulfur coal reserves. Leftover rock and dirt is shoved into valleys, burying streams. (Charleston Gazette, 11/16/2012)