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Tobash, Knowles, Goodman propose plan to boost jobs, reclamation in Pennsylvania anthracite industry

Published September 01. 2011 05:00PM

As the region continues to struggle with unemployment, Rep. Mike Tobash (R-Schuylkill/Berks), with the support of Reps. Jerry Knowles (R-Schuylkill/Berks) and Neal Goodman (D-Schuylkill), today unveiled legislation that could lead to increased employment, reclamation and coal production throughout the anthracite region.

"Worldwide demand for anthracite is at its highest level in years. We need to take advantage of this opportunity by ensuring our coal operators have the ability to expand their operations to meet that demand," Tobash said. "Increasing coal production will boost the local economy and open the door to providing more stable, good-paying jobs to our citizens, and that's exactly what we need right now in Pennsylvania."

"Schuylkill County needs jobs and Pennsylvania needs jobs. Government doesn't create jobs; private industry does - as long as government doesn't put too many roadblocks in the way," said Knowles. "This bill goes a long way toward helping to stabilize the industry and ensuring that anthracite mining can grow and thrive in the future."

"This legislation will not only benefit the economy but the environment as well," Goodman said. "Virtually all the anthracite mining done today is remining of sites that were previously abandoned, so the more mining we do, the more sites we can clean up and reclaim at no cost to taxpayers."

The legislation unveiled today, House Bill 1813, aims to address the state's bonding regulations. The current regulation are inhibiting operators' access to capital that could otherwise be invested in growing and expanding their operations, and in some cases have led to employee layoffs because bonding could not be obtained. The bonding is required by the Commonwealth ensure sufficient funds are available to reclaim a mining site in the event the operator defaults. However, the high cost of the bonding is actually inhibiting the volume of reclamation activity and driving up the cost to taxpayers.

It is estimated that it costs taxpayers as much as $10,000 per acre to reclaim a mine site. However, when a site is reclaimed by industry as part of a remining process, it costs the taxpayers nothing, according to Dan Blaschak, vice president of Blaschak Coal Corp. and chairman of the Pennsylvania Anthracite Council.

"With there still being a $15 billion mine reclamation legacy in the state of Pennsylvania, it is absolutely necessary that state government and the private mining industry join hands together in working through the reclamation process, providing the most possible benefits to the environment while providing the least cost to the taxpayer," Blaschak said. "The more bonding assistance that can be developed, the greater number of miners can be employed, performing the maximum amount of remining and reclamation in the process. House Bill 1813 is a win-win for government, the employment of people, industry and most importantly the environment."

Through the late 1990s, the Pennsylvania Department of Environmental Protection (DEP) operated an alternate bonding system that required all coal operators to pay into a pool of funds then used to reclaim any mines abandoned by operators. In 2000, the department transition to a full-cost conventional bonding system in response to a lawsuit brought against the federal Office of Surface Mining, Recognizing the increased cost of conventional bonding, DEP established a $7 million Conversion Assistance Fund it then used to write $70 million in bonds for coal operators across Pennsylvania.

Because the volume of defaults has been far less than anticipated, the fund now contains more than $12.7 million. Under current law, the money cannot be used to write new bonds. House Bill 1813 would change that, opening the door for mine operators throughout the coal regions of Pennsylvania to employ more people and remine and reclaim fore mine lands.

"By using the money already successfully earned in the base program over the past 10 years, state government along with industry will now be able to expand on what had been a successful remining incentive program," Blaschak said.

Tobash agreed. "This is exactly what we should be doing as a Commonwealth to help get our economy back on track. Here is an industry with an outstanding potential to boost employment, help the environment and provide a domestic source of clean energy ... and government is holding it back! We need to get out of the way and let private industry be the leader it can and should be."

"Current estimates show there is still four billion to six billion tons of reserve in the anthracite region, and the demand for the product is there. Yet some operators are actually having to lay off employees because of the lack of available and affordable bonding," Knowles said.

"Clearly we need to change the way we do things here in Pennsylvania, and Representative Tobash's bill is an important step in the right direction," Goodman said.

Pennsylvania's anthracite industry once employed 177,000 people and helped to fuel the industrial revolution and support the nation through two world wars. Today, the industry employs about 1,000 people but still contributes more than $200 million to the regional and state economies.

The lawmakers noted that unemployment rates in the five-county anthracite region - Carbon, Lackawanna, Luzerne, Northumberland and Schuylkill counties - all exceed the statewide average. According to the Bureau of Labor Statistics' June report, Pennsylvania's average unemployment rate was 8 percent. By comparison, Carbon's was 10.1 percent; Lackawanna, 9.3 percent; Luzerne, 9.2 percent; Northumberland, 8.6 percent; and Schuylkill, 9.3 percent.

In addition to the bonding issue, House Bill 1813 addresses a long-term problem in the bituminous coal region in western Pennsylvania that will continue to impact mine operators across the state. A federal court ruled that DEP had an obligation to treat more than 100 abandoned mine discharges in western Pennsylvania, but the forfeited bonds were not sufficient to construct and maintain treatment facilities at all 100-plus sites. A trust fund was established to treat these "legacy" discharges, which is funded in part by an adjustable per-acre reclamation fee paid by all operators. A failure to identify additional funding for treating these discharges will lead to increased fees in the very near future.

House Bill 1813 has been referred to the Environmental Resources and Energy Committee for consideration.

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