Tennessee could wind up subsidizing coal mining, environmental group claims

By: - March 30, 2021 3:25 pm
Surface coal mine. (Photo: Environmental Protection Agency)

Surface coal mine. (Photo: Environmental Protection Agency)

Innocuous legislation enabling the state to take over regulation of the coal mining industry would cost Tennessee more money and could create environmental problems, according to the Sierra Club.

House Bill 90 carried by Rep. Dennis Powers, R-Jacksboro, and Senate Bill 742, co-sponsored by Sen. Ken Yager, R-Kingston, is designed to clean up legislation passed in 2018 to put coal mining regulations under state authority, shifting oversight from the federal Office of Surface Mining, Reclamation and Enforcement.

The House Agriculture and Natural Resources Subcommittee passed the legislation Tuesday morning without discussion. The matter is to be taken up Wednesday in the Senate Energy, Agriculture and Natural Resources Committee

Powers told lawmakers Tennessee is the only state of 23 with surface mining that doesn’t have its own regulatory program, but he acknowledged a review of Tennessee’s plan by the federal government makes it clear that changes must be made before it takes over for the feds.

The federal government must be able to determine that the state’s program is “at least as stringent as federal law” and that the state can administer and operate it, said Powers, who passed the initial legislation in 2018.

House Majority Leader William Lamberth, who is sponsoring the bill for Gov. Bill Lee’s Administration, told Tennessee Lookout the state is simply working out the details for taking over regulation from the federal government. He was not concerned about the possibility the legislation could cost Tennessee at least $870,000 to create a regulatory division.

Tennessee House Majority Leader Rep. William Lamberth (Photo: John Partipilo)
Tennessee House Majority Leader Rep. William Lamberth (Photo: John Partipilo)

“It’s not about a cost issue on that, it’s a matter of who’s licensing and regulating those facilities, and that can be done better at the state level than the federal level,” said Lamberth, R-Portland.

Tennessee has gotten about $2.3 million in federal grants to set up the regulatory structure.

The Tennessee Chapter of the Sierra Club, however, contends the state has done such a poor job of preparing to regulate coal it should leave the program up to the federal government and avoid the expense of hiring people to run the program. In addition, it says Tennessee could be forced to pay the costs of a coal mine shutdown when companies go bankrupt in an industry that is barely alive.

“This is, frankly, irresponsible for people to be voting to set up a program that is, A, going to cost us money and, B, lead us to having greater liabilities in regard to cleanup of mines that are now going to be bankrupt,” said Scott Banbury, conservation program coordinator for the Tennessee Chapter of the Sierra Club.

Banbury argues that Tennessee’s coal-mining industry is nearly non-existent, yet the state would spend at least $870,000 annually to hire 24 people to run the program. Barely a ton of coal was mined in the state in the last year, and only about one permit a year is expected to be filed, according to Banbury. 

The cost of cleanup on surface mines is supposed to be backed by bonds companies take out when they get a mining permit. In addition, the program is supposed to be self-sufficient.

Fees on permits and mining acreage as well as severance taxes on the amount of coal produced are part of the current legislation but Banbury says few revenues are generated from them.

Other problems will start to crop up, Banbury says, when bonds transfer from the federal department to the state regulation and surety companies decline to bond coal mining companies.

“They’re going bankrupt all over the place. It’s ridiculous we would be taking over a program like this after the industry is gone,” Banbury says.

Not only would the state be left to pay the cost for cleanup, the new process will remove the need for coal mining companies to go through federal regulations such as the Endangered Species Act and cut down opportunities for public comment on proposed coal-mining projects, according to the Sierra Club.

A report by the Reclaiming Appalachia Coalition shows the cost of reclaiming 490,000 acres in West Virginia, Kentucky, Ohio, Virginia and Tennessee could total $6 billion, exceeding the $2.5 billion those states have in bonds, according to a Charleston Gazette-Mail article.


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Sam Stockard
Sam Stockard

Sam Stockard is a veteran Tennessee reporter and editor, having written for the Daily News Journal in Murfreesboro, where he served as lead editor when the paper won an award for being the state's best Sunday newspaper two years in a row. He has led the Capitol Hill bureau for The Daily Memphian. His awards include Best Single Editorial from the Tennessee Press Association.