Regulators Fear $1 Billion Coal Cleanup Bill - The New York Times

Regulators are wrangling with bankrupt coal companies to set aside enough money to clean up Appalachia’s polluted rivers and mountains so that taxpayers are not stuck with the $1 billion bill.

The regulators worry that coal companies will use the bankruptcy courts to pay off their debts to banks and hedge funds, while leaving behind some of their environmental cleanup obligations.

The industry asserts that its cleanup plans — which include turning defunct mines back into countryside — are comprehensive and well funded.  But some officials say those plans could prove unrealistic and falter as demand for coal remains weak.

The latest battle is over Alpha Natural Resources, once a high-flying coal company that borrowed hundreds of millions when the coal market was booming but imploded in the face of competition from cheaper natural gas and tougher environmental regulations.

West Virginia faces perhaps the greatest fallout from the flood of coal bankruptcies that have hit the courts in the last year because many of its mines are scheduled to close and will require extensive cleanup.  The state took the unusual approach of hiring a seasoned bankruptcy lawyer from New York who grew up in West Virginia to represent its Department of Environmental Protection in the Alpha case.

“The goal is to make sure the coal companies clean up the mess when they leave,” said the lawyer, Kevin W. Barrett of Bailey & Glasser, who was named a special assistant attorney general for West Virginia and is taking the lead on the Alpha case.

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