Macoupin residents worry bankruptcy loophole allows Shay No. 1 mine way out of environmental liability

Macoupin residents worry bankruptcy loophole allows Shay No.

From left, are Nick M. San Diego, Division Supervisor at the Illinois Department of Natural Resources, Jeffrey S. Steiner, Northern District Supervisor, Amy Wolff Oakes, legal counsel for the Land Reclamation Division of IDNR, Jim Schafer, permit coordinator and Vickie Kujawa, Land Reclamation Specialist, deliberate over questions from the general public at Wednesday’s meeting regarding the Shay No. 1 mine permits.


Enquirer Democrat Reporter

A panel representing Macoupin Energy LLC was present for a Wednesday, Nov. 5 meeting open to the public, ready to hear and respond to questions and concerns raised by Macoupin County residents regarding the renewal of several mining licenses for the Shay No. 1 Mine in Gillespie.

John Fisher from the office of legal counsel with the Illinois Department of Natural Resources was the hearing officer.

Ron Young spoke first, a resident who stated that he lives one-and-a-half miles southwest of the mine.

“I hear the coal mine fans every night when I go to sleep,” Young said. “I smell the coal mine dust. I live on the land that is undermined by the coal mine, in view of the reclamation projects. I recognize that that they have the right to do that. I also recognize that they have recently filed for bankruptcy protection from a court in St. Louis and I am concerned that they may be following a standard for corporate policy in the United States of filing for bankruptcy in order to avoid environmental liability. I am concerned if our state government has adequate bonding requirements for the activities that go on in the mine now.

“I am concerned about their ability and desire to be longstanding partners in the environment in Macoupin County.”

Young also pointed to the recent filing of Chapter 11 bankruptcy by Murray Energy. Its founder, Robert Murray, owns a significant number of assets from other bankrupt coal companies. Nick M. San Diego, Division Supervisor for the Land Reclamation Division of the Illinois Department of Natural Resources, stated that Macoupin Energy’s bonding permits are adequate and up-to-date, and they are aware of the recent filing from Murray Energy and are seeking representation for our interests in that bankruptcy, which he said was filed in the southern district of Ohio and not in St. Louis.

Mary Ellen DeClue of Litchfield raised similar concerns, citing an April 2019 article from the Stanford Law Review titled “Bankruptcy as Bailout: Coal Company Insolvency and the Erosion of Federal Law,” which examines the outcomes of bankruptcies with respect to liabilities of coal companies which are established by Congress and the Surface Mining Reclamation and Enforcement Act of 1977.

“Between 2012 and 2017, four of the largest coal companies succeeded in shedding almost $5.2 billion in environmental liabilities through bankruptcy reorganization agreements,” said DeClue. “Please do not renew these permits. By renewing them, there will be more contamination of ground and surface waters, more coal ash deposited in Refuse Disposal Areas 5 and 6, more coal slurry produced and probably injected underground, more health risk and more economic risk for the area and the state.

“Presently, coal production exceeds the market demand for coal. Coal will continue to decline due to lower costs of other energy sources and the climate crisis. This decline has been going on for years with numerous companies declaring bankruptcies. These bankruptcies have helped the coal owners, but not the coal communities or workers.

“Coal companies can’t seem to afford to operate without violations,” DeClue said.

DeClue also raised questions about where the coal slurry is being stored. San Diego said that there is approval for underground slurry disposal, but none has been injected underground. Any slurry, he said, is being stored in refuse disposal facilities.

Joyce Blumenshine, a member of the Illinois Sierra Club, stated that, while she understands the need for efficiency, she is concerned about “batched” renewal applications.

“This was a department initiative,” San Diego said. “You have to issue a new permit number for every new permit. The regulations dictate in terms of what’s required for a significant revision or a new permit application that it goes through the public participation process.

“Every permit has a renewal every five years, and any subsequent renewal would also be for five years. In this case, the Shay mine is considered one inspectable unit, but within each unit you can have multiple permit numbers, as you have here. Then say another part of the mining operation expands two years from now, which gives you two different permit issue and permit renewal dates.

“So when you have multiple permits per unit on different schedules, you’re looking at bits and pieces of the operation instead of one comprehensive look at the whole operation. From our perspective, it’s not just administrative efficiency, it also allows us to take a comprehensive look instead of pieces of it here and there.”

“This is undoubtedly saving the mines money from multiple postings and applications forms,” Blumenshine said. “The General Assembly’s Illinois Administrative code under section 1773.13, it says in a public notice there should be a map or description clearly showing the precise location of the proposed permit area and shadow area, if applicable. The shadow area for permit 56 is in revision number 11. There was no mention in the newspaper ad about the shadow area at all, which is thousands of acres.

“Seeing an ad that regards a permit area of some 1,000 acres, to me, is really not fair. I urge the department to require the mine to coply with the statutory guidance in your laws to full and accurate posting in your permit notices.”

San Diego said they would take a look into this.

Public comments received from the meeting will be considered in rendering a decision regarding the pending application. Written notification of the IDNR’s decision will be mailed to each person who files comments or objections to the permit application.