“As the COVID-19 pandemic accelerates King Coal’s decline, Virginia could be on the hook for millions in cleanup costs if an anticipated wave of bankruptcies destabilizes its bond pool system for managing the risks of company failures.
One of six states, all in or near the Appalachian basin, that allow coal companies to post partial assurances that they will cover the costs of reclamation if they cease operations, Virginia has known there are vulnerabilities in its system for almost a decade.
“The program has sufficient resources to withstand the forfeiture of one or two smaller permits,” wrote actuaries in a 2012 report commissioned by Virginia’s Department of Mines, Minerals and Energy. “The more significant risk to the Fund is from the exposure to companies with multiple permits and possibly from larger parent companies should they forfeit multiple permits simultaneously.”
Eight years later, the situation has taken on an added urgency with the continued shrinkage of the coal industry.”