Bankruptcy Court Judge Benjamin Kahn is holding a hearing Wednesday in Charleston on the West Virginia-based company’s liquidation plan that calls for the abandonment of nearly 200 mining permits in Kentucky, West Virginia, Virginia, and Tennessee.
Most of the mine sites are in eastern Kentucky and cover nearly 8,000 acres (3,237 hectares) of strip-mined mountains, according to Inside Climate News.
The big problem that has arisen is Blackjewel’s claim in today’s court hearing that it lacks the money needed for cleanup of the 200 sites. Both Kentucky and the companies that issued bonds guaranteeing clean-up and reclamation of the dynamite-blasted landscape have already warned in court proceedings that there might not be enough money to do all the required work.
Back on February 24, Judge Kahn – in an emergency court hearing – issued an order that Blackjewel cleanup the Bell County mine site in Kentucky, but rejected the commonwealth’s argument it presented an imminent danger to nearby residents and the environment, according to the Courier-Journal.
Earlier this year, Kentucky Energy and Environment Cabinet inspectors found that the Bell mine had coal mining ponds that were overfull, contained high levels of iron and manganese, and could breach at any time. State inspectors and attorneys had argued that a breach of the ponds would threaten drinking water, and damage a downstream state highway, railroad, and the environment
Scott Kane, a lawyer for Blackjewel, said the company was working to mitigate the problem. The grading and seeding work on the hill above the ponds, which the state said was necessary to keep the problem from reoccurring, would be costly, he said.
Massive fallout from Blackjewel bankruptcy
In July 2019, Milton, West Virginia-based Revelation Energy LLC, and its affiliate Blackjewel LLC filed for Chapter 11 bankruptcy in the Southern District of West Virginia.
Blackjewel’s parent company, the nation’s sixth-largest U.S. coal producer left 1,700 jobless in Wyoming, Virginia, West Virginia, and Kentucky. With the coal company’s bankruptcy, it left owing $60 million to the U.S. Department of the Interior and $6 million to the Kentucky State Treasurer., besides millions owed to private companies.
Looking at the bigger picture, environmentalists, taking into account the continuing demise of the coal industry, can already see the makings of an ecological disaster as more coal companies take bankruptcy in the future.
Coal mining companies are required to post bonds to cover the costs of reclamation should they go bankrupt. Additionally, as they leave one site to move on to another, they are supposed to reclaim the idled site. But like orphan oil wells across the U.S. and in Canada, there seems to be little incentive to do the environmentally responsible thing.
“There just is not the capital left in the coal industry to satisfy all the remaining outstanding reclamation obligations,” said Peter Morgan, a Sierra Club attorney who closely follows coal-industry bankruptcy cases nationally. “These companies have been allowed to kick the can down the road time and time again, and now they are running out of road.”