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We recognize that some state regulators have adopted a lax reading of SMCRA's self -bonding <br />requirements, apparently under the belief that leniency in reclamation bonding supports the employment <br />and fiscal benefits that coal production provides to their states. We are genuinely sympathetic to these <br />ends, and our organizations are on record supporting policies and programs designed to assist the coal <br />industry, its miners and communities with meaningful resources as all parties adjust to new market <br />realities. But instead of providing economic benefits to states, leniency with reclamation bonding simply <br />adds to the economic risks that states will face as the coal industry slides towards insolvency. Such <br />permissiveness allows coal companies to transfer enormous financial risks away from their investors and <br />bondholders, and onto the states themselves. Furthermore, the reluctance by state agencies to require full <br />and effective reclamation bonds, even as every financial metric of the coal industry and its individual <br />companies deteriorates, only amplifies the need for stepped-up federal oversight. <br />For these reasons, we urge OSMRE in the strongest possible terms to use any and all means <br />within its legal authority to ensure that Peabody replaces its self -bonds with more secure financial <br />assurances as expeditiously as possible. There is no time to waste. Peabody currently retains nearly $1 <br />billion in liquidity that can be used to guarantee mine cleanup. But the company is likely to draw down its <br />liquid assets quickly to service its debt and restructure its operations in anticipation of a bankruptcy filing. <br />We thank you for your consideration, and offer any assistance our organizations may have both to <br />help OSMRE staff understand both the threats that self -bonding poses to the environmental and fiscal <br />health of the nation, and the possible steps that OSMRE can take to alleviate those threats. <br />Sincerely, <br />Clark Williams -Derry <br />Director of Energy Finance <br />Sightline Institute <br />14023 d Avenue, Suite 500 <br />Seattle, WA 98101 <br />CC, sent via USPS and email: <br />Tom Sanzillo <br />Director of Finance <br />Institute for Energy Economics and Financial Analysis <br />3430 Rocky River Drive <br />Cleveland, OH 441 1 1 <br />David Berry, Regional Director <br />Office of Surface Mining Reclamation and Enforcement, Western Region <br />1999 Broadway, Suite 3320 <br />Denver, CO 80202 <br />dherry alosmre.&ov <br />Bob Randall, Interim Executive Director <br />Colorado Department of Natural Resources <br />1313 Sherman Street, Room 718 <br />Denver, CO 80203 <br />Robert. Randa 11 ti.state.co.us <br />Page 3 of 4 <br />