OREANDA-NEWS. The Wyoming Department of Environmental Quality (DEQ) is reviewing the rules of its self-bonding program for coal mine reclamation.

The state DEQ is not examining any provisions in particular, it told Argus. But its review comes when some of the coal industry's biggest producers are in financial distress and their abilities to fund mine reclamation have been called into question.

The self-bonding program allows coal producers to leave a portion of mine remediation obligations uninsured if they meet financial performance standards. States that offer such an option have been scrutinizing their programs this year, including asking the US Department of the Interior's Office of Surface Mining Reclamation and Enforcement for guidance on ensuring such programs are sufficient.

Wyoming, the largest US coal-producing state, has $2bn in mine reclamation costs that are self-bonded, according to Alpha Natural Resources, one of the companies that DEQ deemed earlier this year was no longer qualified for its program.

Alpha declined to comment on Wyoming's planned review. The company, which entered Chapter 11 bankruptcy protection proceedings in August, reached a settlement with the state in September that reinstated the self-bonding status for its two mines in the state in exchange for giving Wyoming a "super-priority" claim if Alpha disbands. The coal producer held $411mn in self-bonding liabilities in Wyoming at the end of last year.

The DEQ will start its review with informal outreach to regulated companies, the public, other interested groups and federal oversight bodies. The process could take anywhere from seven months to two years, depending on how contentious the proposed changes are.

The self-bonding program was last updated in 2012, and in 2006 prior to that.

Criteria for the current program include having all corporate bonds rated as "A" or higher by federally recognized ratings agencies or meeting certain accounting ratios, such as a liabilities-to-net-worth ratio of 2.5:1 or less and a current assets-to-current liabilities ratio of 1.2:1 or more.