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Environmental Risks Remain As Blackjewel Bankruptcy Nears Its End

By: Sydney Boles | Ohio Valley ReSource
Posted on: Thursday, October 15, 2020

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Environmental advocates worry a coal company liquidation plan will leave dozens of coal permits in eastern Kentucky unreclaimed, according to filings in the bankruptcy proceedings of Blackjewel L.L.C.

The bankruptcy case has dragged on since last July, when the once-mighty coal company’s Chapter 11 filing left hundreds of Appalachian coal miners suddenly without work, and without weeks of pay. Now the company has until the end of 2020 to exit bankruptcy, and to do that, it needs the court to approve the very liquidation plan that has environmentalists concerned.

Mine land that is not reclaimed or is improperly reclaimed can leave behind highwalls of cut rock, stripped land subject to erosion and runoff, and potential water pollution. Blackjewel accrued hundreds of environmental violations in the months following its bankruptcy.

Filed September 25, the plan, if approved, would dissolve Blackjewel and would place the responsibility for reclaiming any unsold permits onto a newly formed Reclamation Trust.

Funding for the trust would come from surety bonds. The Appalachian Citizens Law Center, which is one of the entities expressing concern about the plan, estimates those surety bonds to be worth about $40 million.

It is not clear how many permits would fall into this category. The Kentucky Energy and Environment Cabinet recently revised its count from 43 to 38. There are likely more permits in a similar condition in Virginia and West Virginia, other states where Blackjewel operated.

Mary Cromer, an attorney with ACLC, believes that the many mining entities involved with the permits means even more of them are likely left with no responsible party.

The plan would also “extinguish” the unsold permits themselves, but does not require the Reclamation Trust to apply for new permits. That could mean the federal government would have less power to force the Trust to complete reclamation projects. It would also mean citizens would have less recourse to sue if unreclaimed mine land caused damage off-site.

Other environmental groups concerned with the plan are Kentuckians for the Commonwealth, Citizens Coal Council, Appalachian Voices, the Sierra Club, and the Powder River Basin Resource Council.

Blackjewel has not yet responded to the groups’ filing.

A plan confirmation hearing is scheduled for later this year, where Blackjewel’s creditors, as well as interested parties such as the Appalachian Citizens Law Center, can present objections before the court. ACLC has not confirmed whether it will present formal objections at that time.