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Patriot Coal Corp. to stop mountaintop removal mining

Nov. 16, 2012 @ 07:10 AM

MORGANTOWN — Bankrupt Patriot Coal Corp. agreed Thursday to become the first U.S. coal operator to phase out and eventually stop all large-scale mountaintop removal mining in central Appalachia under an agreement reached with three environmental groups that sued over pollution from several West Virginia operations.

St. Louis-based Patriot said the proposed agreement allows it to postpone as much as $27 million in expenses into 2014 and beyond, improving its liquidity and the likelihood it can successfully emerge from Chapter 11 protection as a viable business.

The deal comes as Patriot tackles litigation that must be resolved during those proceedings. The terms would be binding on any subsidiaries it sells or spins off.

Presented to U.S. District Judge Robert Chambers in Huntington for consideration, the agreement stemmed from water pollution lawsuits filed by the Sierra Club, Ohio Valley Environmental Coalition and West Virginia Highlands Conservancy.

The continuation or expansion of large-scale surface mining is no longer in Patriot’s best long-term interests, President Ben Hatfield told the judge.

“Patriot Coal recognizes that our mining operations impact the communities in which we operate in significant ways,” he acknowledged, adding that the agreement will reduce the company’s environmental footprint.

In exchange for phasing out mountaintop removal and agreeing to caps on the amount of coal it produces from strip mining, Patriot gets additional time to install selenium treatment systems at several mines.

The agreement caps the amount of coal that Patriot can mine from surface operations at 6.5 million tons in 2014, falling to 5 million tons in 2017. By January 2018, the amount is limited to no more than 3 million tons a year.

Patriot says it will only conduct “small-scale surface mining” at existing and planned underground mines. That lets the company move ahead with plans to open the Huff Creek Surface mine next to a new underground mine.

Cindy Rank of the West Virginia Highlands Conservancy has long argued that if companies had to pay the “real costs” of mountaintop removal, it wouldn’t be economically feasible. Selenium pollution, which studies have found is toxic to aquatic life, is one of those costs.

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