Three years ago, a Utah company was under pressure to remove coal waste it was illegally stockpiling at its now-shuttered Wellington plant. But its equally illegal solution, which entailed selling the waste to a company that used it to pave a parking lot, has left taxpayers holding the bag for cleanup costs.

The owners of Bowie Refined Coal have since walked away from its 30-acre facility, which Carbon County will auction to cover unpaid property taxes once it has been cleaned up using the firm’s $732,000 surety bond.

At the heart of the controversy is Bowie’s sale of 2,000 tons of substandard coal for $500 to a nearby trucking company, which used it to pave its lot. That move, along with other missteps before and since, was a “knowing and willful” violation of Bowie’s operating permit and Utah’s coal regulations, according to the Division of Oil, Gas and Mining.

At recent hearings of the Utah Board of Oil, Gas and Mining, DOGM officials cautioned that the board’s refusal to spend Bowie’s forfeited bond to clean up that parking lot is “unlawful, unreasonable and unfair,” putting the state’s coal program at odds with the federal Surface Mining Control and Reclamation Act.

“We have a violation that Utah knows exists,” DOGM’s attorney Haley Sousa told the oil and gas board at its July 22 meeting. Failure to act jeopardizes Utah’s “primacy” over the regulation of coal mining, she said.

The board had previously ordered Bowie to forfeit its bond but declined to allow it to be used to remove coal from the ATTCO Trucking lot. At followup hearings in July and August, DOGM asked the board to reconsider, but the board unanimously turned down the request.

“It might not be a large impact, it might not be killing fish, it might not be going into people’s drinking water, but it’s still an off-site impact under the coal rules and it needs to be cured just like any violation,” Dana Dean, DOGM’s top mining regulator, told the board.

At the recent hearings, board members said the state has no authority to use surety bonds to address off-site impacts. They also expressed concerns that requiring Bowie’s bond underwriter, Ironshore Indemnity, to cover off-site reclamation would set a precedent that undermines the surety market.

Utah’s seven-member oil and gas board is appointed by the governor and is chaired by Chris Hansen, an executive with Utah’s leading coal producer Wolverine Fuels. Most of its members come from extractive industries.

A one-time affiliate of Bowie Resource Partners, which is Wolverine Fuels predecessor, Bowie Refined Coal operated plants all over the country using compressed air to remove impurities to improve low-grade coal into a product worthy of use in power plants. But in recent years, as domestic demand for coal dropped, Bowie stopped functioning as a company.

At the recent Utah hearings, the oil and gas board expressed doubt that Bowie’s coal spread around as road base was causing actual environmental harm. But whether it’s known to cause harm is beside the point, according to Dean.

“If something comes out of a coal mine, it is either sent to a power plant .... to be burned or it’s waste,” she told the board. “There is nothing in between and waste must be properly disposed of in a refuse pile that is designed and engineered under the coal rules.”

Board member Richard Borden, also a mining executive, pushed back.

“Does that mean the rules do not allow beneficial reuse of benign mine waste outside a permit boundary, which can be an environmental benefit if the material is geochemically benign?” Borden posed.

Dean said she happened to be attending a meeting of federal coal regulators last year and, with the Bowie case in mind, ran that very question past the attendees.

“Every person in that room said no,” she said.

Bowie did not inform DOGM it was selling its waste to pave a parking lot; regulators learned of the move from a tipster, according to board filings. Yet the board seemed willing to forgive Bowie because it was not acting “under cover of darkness,” but under a purchase agreement with the trucking firm.

“In my mind that’s worse,” Dean responded. “They were profiting from breaking the rules. Not only were they getting paid to take the material off-site, they also avoided disposing of it themselves in the proper manner the rules require.”

In its order, the board directed DOGM to pursue Bowie through civil channels.

The company has not responded to DOGM’s abatement orders and did not participate in any of the board hearings. The division has issued penalties totaling $154,400 against the firm and its executives Steve Rickmeier and Kyle Edwards but it lacks the authority to actually collect the money.

“Those civil avenues are for the purpose of acting as a deterrent for bad operators and not as a remedy for abating violations,” Sousa said. “If the division ends up needing to to go out and do this reclamation, that’s the taxpayer who’s doing it.”

She suggested the fines, if they are ever collected, could be used to pay the state back, but “in this situation, the operator is in the wind.”