Coal Firms Lose Bid To Recover Money Used To Restore Old Mines

Date : 06/17/2011 @ 2:08PM
Source : Dow Jones News

Coal Firms Lose Bid To Recover Money Used To Restore Old Mines

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Coal companies appear to have lost a lengthy legal battle to try to recover millions of dollars paid to the federal government to clean up abandoned mines.

Earlier this week, the U.S. Supreme Court declined to hear an appeal from Consol Energy Inc. (CNX) and about 70 other coal companies trying to reclaim fees paid to the government under the Abandoned Mine Lands Reclamation Fund. This is a fund that finances the cleanup of mines that were in operation before Congress passed federal mining laws in 1977.

The Supreme Court's move marks a big win for state and federal governments, which would have been forced to scrap hundreds of restoration projects if the coal companies had won their challenge, Office of Surface Mining Director Joe Pizarchik said in a statement to Dow Jones Newswires.

By declining to review Consol Energy's appeal, the Supreme Court has also most likely doomed nearly a dozen other lawsuits filed by coal companies seeking similar refunds.

"Based on past court proceedings, [Interior Department] officials anticipate one of two possibilities: either the cases will be voluntarily dropped by the plaintiffs or they will be addressed on a motion for summary judgment," Pizarchik said, referring to court filings that ask a judge to end a lawsuit.

A spokeswoman for Consol Energy was unavailable to comment. Attorneys for the company declined to comment.

Among the other companies involved in the suit were subsidiaries of Patriot Coal Corp. (PCX) and Alpha Natural Resources Inc. (ANR).

Consol Energy filed its lawsuit in 2001. It argued that the federal government acted illegally when it charged fees on coal being exported--as opposed to just coal sold in the U.S. They said the government was violating the constitutional ban on export taxes and sought compensation for fees already paid on exported coal.

A lower court disagreed, saying the government could apply the fee to every ton of coal taken from the ground, regardless of where it was being shipped or sold. The Supreme Court's decision to deny a review of the case means the lower court's ruling stands.

The federal government currently charges a fee worth 31.5 cents for every ton of coal taken from a surface mine and 13.5 cents for every ton taken from an underground mine, according to the Office of Surface Mining. Beginning in 2013, the fee falls by a few cents.

In 2010, the U.S. government collected $254 million in fees and then distributed the money to Pennsylvania, Kentucky and several other coal-producing states. The money is used to repair open mine shafts, reduce harm from mine gases and clean up streams polluted by acid mine drainage, among other measures, the office says.

"Going forward, states and tribes can rest assured that [abandoned mine lands] money will be available to reclaim those mine sites," Pizarchik said.

-By Tennille Tracy, Dow Jones Newswires; 202-862-6619;

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