Average Costs for Reclamation

As part of this evaluation, estimates were developed of the average costs for reclamation of forfeited primacy mine sites completed by the department’s Bureau of Abandoned Mine Reclamation (BAMR). These estimates were needed to determine the expected costs for reclamation of sites that have not yet been studied by BAMR and to calculate reclamation costs associated with possible future forfeitures. BAMR currently has completed reclamation on a total of 96 forfeited primacy permits. A summary of the categories of surface and underground coal mining activities and the number of sites completed in each category is presented in Table 11.

The approach used to determine average costs was not the same for each of the permit categories. The selected approach for a particular category was dependent on the site information available and the number of sites already reclaimed by BAMR for that category. If a category had a reasonable number of reclamation projects completed by BAMR, the approach was to calculate the average of the costs of all the completed projects. This approach was used for surface coal sites and coal refuse reprocessing sites. BAMR has reclaimed only three forfeited coal preparation plant sites, but land reclamation development estimates and assessments of demolition needs are available for the remaining 10 unreclaimed sites. This information was used to determine site-specific reclamation costs for each of the 10 sites. For this category, future projections were based on an average cost derived from the combination of completed projects and development estimates. BAMR has not completed any reclamation projects in the coal refuse disposal category, thus precluding estimates that are based on actual experience. Anticipated typical costs for this category were based on an identification of unit operations required for reclamation on these refuse disposal sites and the average (typical) costs for these work items. Typical costs were derived from completed projects in other permit categories with comparable reclamation methods and materials.

The following discussions elaborate on each of these approaches and describe cost adjustments made for inflation and other factors used to develop an average or typical unit cost per acre for land reclamation. In this study, the overall approach for estimating costs of forfeited sites not yet evaluated by BAMR, as well as determining estimated costs of future forfeitures, is to apply a unit cost per acre toward the known or projected number of acres requiring reclamation.

BAMR has managed projects for the reclamation of 81 forfeited primacy surface coal sites, starting with the first forfeiture in this category in 1988. Forty-five of these forfeited sites were primacy permits, and 36 of these sites were pre-primacy operations repermitted as primacy permits. Approximately 1,829 total surface coal permit acres were reclaimed, with an average reclamation of 24 acres per forfeited site.

The 81 projects include a few that are not typical land reclamation projects. One of the projects was a low-cost three-acre project completed with the participation of the Pennsylvania Game Commission. Two projects dealt only with water supplies, and another four were high-cost projects that included extraordinary items, such as expensive water treatment, roadside drains and pipelines and even construction of a parking lot area. These projects went well beyond the usual range of land reclamation activities and, consequently, were not included in the analysis. Costs for the remaining 74 land-only reclamation projects that were completed by BAMR ranged from $2,618 to $1,401,168 per site. The contracted unit land reclamation costs ranged from $1,309 to $11,961 per acre, with an overall average of $5,018 per acre.

For this study, an average cost per acre was developed for use in estimating future land reclamation costs. This average cost was based on individual BAMR land reclamation costs over the 1988-1999 period and adjusted for inflation rate changes. Inflation rate changes were obtained from the U.S. Bureau of Labor’s Consumer Price Index. Unit costs per acre were adjusted from the unit costs on the contract award date into equivalent 1998 dollars.

For both primacy and repermitted primacy forfeited surface coal permits, no overall increasing or decreasing trend in the variability of costs over time was evident. Trends were limited to minor cycles of increasing and decreasing costs over short sequences of four or five completed reclamation projects.

The inflation-adjusted unit costs for the land reclamation of 42 primacy surface coal permit sites ranged from $1,768 to $12,481, with an average cost per acre of $5,426. The inflation-adjusted unit costs for the land reclamation of 32 repermitted primacy surface coal permit sites ranged from $1,512 to $14,730, with an average cost per acre of $5,848. The higher cost of reclamation for the older repermitted forfeited sites may reflect the inheritance of pre-existing problems. The department believes that such problems have been eliminated in newer primacy permits through improved permitting practices. For this reason, more weight has been given to the $5,426 average reclamation unit cost when considering newer forfeited primacy permits.

There have been 139 forfeitures of primacy surface coal permits with associated land reclamation that has not been done by other parties. Approximately 58% of these sites have been reclaimed by BAMR. Considering this percentage and that the number of reclaimed surface coal sites is greater than the number of sites remaining to be reclaimed, it is reasonable to use the adjusted average cost per acre of $5,500 to estimate costs of future reclamation efforts.

Nine forfeited primacy coal refuse reprocessing sites have been reclaimed by BAMR from 1990 through 1999. Cost information for reclamation is available on approximately 180 total acres. This total includes an 11-acre site left to be reclaimed by BAMR because of a bankrupt surety. The average reclamation per site was 20 acres. The reclaimed acreage on the sites ranged from nine to 54 acres. The reclamation costs per site ranged from $68,371 to $551,830.

In order to establish an average cost per acre to be applied to future reclamation estimates, the individual BAMR costs over the 1990-1999 period were adjusted for inflation rate changes. Inflation rate changes over time were obtained from the U.S. Bureau of Labor’s Consumer Price Index. Unit costs per acre were adjusted from the unit costs on the contract award date into equivalent 1998 dollars.

The inflation-adjusted unit costs per acre for each of the nine completed BAMR reclamation contracts were then averaged. The adjusted costs per acre in 1998 dollars ranged from $6,589 to $17,907, with an average cost of $11,022 per acre. There was no apparent trend in the variability of costs over time.

There have been 38 forfeitures of primacy coal refuse reprocessing permits, including nine that have been reclaimed by other parties. Approximately 31% of these sites have been reclaimed by BAMR. Considering the percentage of reclaimed coal refuse reprocessing sites to the number of sites remaining, it is reasonable to apply the adjusted average cost per acre of $11,000 in estimating costs of future reclamation efforts.

There have been 13 forfeitures of primacy coal preparation plant permits. From 1990 through 1999, BAMR has reclaimed three coal preparation plant sites. The total reclamation area associated with these three projects was 50 acres, with reclamation acreage per site ranging from five to 27 acres. The reclamation costs ranged from $128,552 to $414,323 per site. After adjusting these costs for inflation using the U.S. Bureau of Labor’s Consumer Price Index, the average cost of the three completed projects was $20,904 per acre in 1998 dollars.

Although total costs are available for the three coal preparation plant sites reclaimed by BAMR, a breakdown of costs for land reclamation and structure demolition or removal was not recorded. Consequently, it was concluded that an historical average cost would not provide a reliable cost estimate to apply toward the remaining 10 sites requiring reclamation by BAMR, nor would it provide a good estimate for the analysis of costs related to future forfeitures. As a result, more emphasis was placed on using the known conditions at each of the 10 unreclaimed sites. For six sites, current information was available on the specific requirements for land reclamation, related costs and the remaining structures requiring removal. Having developed detailed cost estimates for each site in this group, the average of land reclamation costs and the average amount of structures requiring removal were determined and applied to the development of average costs for the remaining four unreclaimed sites where there is less current information known. The details of each of these analyses are discussed below.

Of the 10 sites still needing reclamation, BAMR has determined development estimate costs for two of the sites and provided detailed information on the current status of four other plant sites, along with preliminary cost estimates for land reclamation only. The preliminary unit costs per acre for land reclamation ranged from $9,172 to $16,234 per acre. No preliminary estimate of the cost of removing abandoned structures was considered by BAMR.

To obtain an estimate of the additional costs associated with the removal or demolition of abandoned plant facility structures, the original detailed bond calculation sheets were obtained for each site. The bonded amount for structures was then compared to current conditions at the forfeited site, and adjustments were made to the original bond estimate, depending on the structures remaining today.

Detailed information is not readily available for four forfeited sites where bonds have not yet been collected. For these sites, cost estimates were based on average land reclamation costs and average adjustments to the original structure bond calculations were used. The average unit cost for land reclamation at the six sites with detailed information was approximately $13,000 per acre. This average was applied to the acres indicated as requiring reclamation on the four sites with less detailed information.

The average abandoned status of structures remaining on forfeited coal preparation sites is approximately 30% removed, 70% still remaining. These averages were applied to the original bond calculations for the structures permitted on the four sites lacking current information.

BAMR has not reclaimed any forfeited coal refuse disposal sites. However, a development estimate has been prepared for one site. It is estimated that the cost to reclaim the 113-acre site is $3,500,000 – an average of approximately $31,000 per acre. In discussions with BAMR, an estimate of $20,000 per acre has been suggested for an average cost per acre for reclamation of coal refuse disposal sites. This average would only apply to sites not requiring special treatment for chemically or physically unstable refuse material, more than minimal regrading of slopes or more than minimal soil and clay lining coverage. If a site requires any of these more costly design considerations, an average unit cost per acre of $30,000 is more reasonable.

The estimated minimal cost of $20,000 per acre is partly based on a recent analysis of soil cover and clay lining costs that BAMR received as bids for other reclamation sites during the past two years. The average cost of the three lowest bids for 12-inch soil cover for five different recent contracts was $11,653 per acre. The average cost of the three lowest bids for a six-inch impervious soil lining (clayey material) for three recent contracts was $7,018 per acre. Combined together, these average bids approach $20,000 per acre.

There are currently nine forfeited primacy coal refuse disposal sites requiring reclamation by the alternative bonding system. Some of these will require only minimal reclamation efforts; some are known to have special design and handling problems.