Utah sticks coal executives with $2.3 million fines for mess created by failed plant

The money will never be collected but former executives have agreed to conduct a cleanup.

(Brian Maffly | Tribune file photo) The operators of this shuttered coal-cleaning plant in Wellington have walked away from the 30-acre facility, Utah regulators say, after numerous unabated violations, including the sale of 4,000 tons of coal waste that wound up paving a parking lot. Now the state is sticking four corporate officers each with $2.3 million penalties as leverage to get them to clean up the site.

It started as a $2,310 fine, a seeming slap on the wrist for the illegal sale of coal waste from a Utah coal-processing plant for use as a road base.

That bill has now ballooned a thousandfold and been handed to the former chief executive of Utah’s largest coal producing company, whom Utah regulators are holding personally responsible for the mess that has gone unabated for more than three years.

John Siegel once headed Bowie Resource Partners, which operates Utah’s Sufco, Skyline and Dugout mines, before exiting the company that reorganized two years ago with a new name, Wolverine Fuels. Under Siegel’s watch as Bowie CEO, an “affiliated” company called Bowie Refined Coal sprang up and acquired coal processors all over the country, including one in Wellington in the heart of Utah coal country.

The Wellington plant took substandard coal from Bowie’s mines with the goal of refining it for sale as fuel. But the plant was an economic failure; the operators walked away and ceased functioning as a business in 2018, but not before selling at least 4,000 tons of waste to Attco Trucking Co. for 25 cents a ton, according to records filed with the Utah Board of Oil, Gas and Mining.

The Board recently refused to allow state regulators to use the plant’s $732,000 reclamation bond for cleaning up an off-site impact, so state officials went hunting for the corporate officials responsible for the mess.

On Oct. 23, the Division of Oil, Gas and Mining, or DOGM, sent Siegel and three other former coal executives letters informing each that they owed the state of Utah $2.3 million for “knowingly and willfully” authorizing the illegal disposal of waste in violation of the company’s operating permit and failing to clean it up after repeated orders.

The letters proposed extremely harsh penalties, which could have been much higher under state law, but DOGM wasn’t exactly banking on collecting all that money. Instead the proposed penalties were used as leverage to get the executives to take personal responsibility for environmental harms caused by the company’s actions, according to Dana Dean, DOGM’s top mining regulator.

“Civil penalties are not supposed to be punitive, but to get people to the table,” Dean said. “They [the oil and gas board members] wanted us to get the people who caused the problem to fix the problem, not the surety company.”

In Siegel’s case, the threat worked. The Kentucky-based businessman has agreed to take steps toward cleaning up the coal spread around at the trucking company’s parking lot, Dean said.

In his filings with the oil and gas board, Siegel initially denied “any affiliation” with Bowie Refined Coal, which was established during Siegel’s time at the helm of Bowie Resource Partners for the specific purpose of refining coal from Bowie mines.

“Mr. Siegel did not do any of the deliberate or purposeful acts that the Division cited, and he had no knowledge of the actions taken by others,” his lawyers wrote in his response, which characterized Siegel as “an innocent bystander.”

During its investigation, however, DOGM determined that Siegel, as well as Bowie’s then-chief financial officer James Wolff, were “owners or controllers” of Bowie Refined Coal, according to Dean.

The other men DOGM hit with $2.3 million penalties are Steven Rickmeier, Bowie Refined Coal’s owner of record, and Justin Thompson, that company’s one-time CEO.

“We found evidence that even though Rickmeier was on the books as the owner, there were other documents and information pointing to Siegel and Wolff,” Dean said.

Rickmeier has not responded to DOGM’s letter, while Wolff has joined Siegel in agreeing to help recover the waste coal and properly dispose of it, according to Dean.

Besides running Bowie Resource Partners, Siegel and Wolff were also key players in a controversial coal-loading export terminal proposed on the Oakland, Calif., waterfront with $53 million set aside by Utah lawmakers. State leaders had hoped such an investment would help connect Utah’s coal with Asian customers, but the Oakland project has been sinking in litigation and bankruptcy for the past four years.

Siegel was the terminal’s chief developer, but he lost control of the project, known as the Oakland Bulk and Oversized Terminal, last year in bankruptcy proceedings. His reorganization bid, which relied entirely on financial commitments from four Utah coal counties, cratered after those Utah pledges failed to materialize as promised to the bankruptcy court.

Bowie Refined Coal’s 30-acre Wellington site remains unreclaimed behind a chained fence and gate. Once the state has cleaned it up, Carbon County officials plan to sell the site at auction to recover unpaid property taxes, Dean said.

According to Wolverine’s executives, the coal producer has washed its hands of Bowie Refined Coal, completely restructured the coal-mining company and its leadership, and renamed itself in hopes of fully disassociating itself from the failed coal-processing business.

Despite the coal industry’s mounting troubles that only accelerated during President Donald Trump’s time in office, Wolverine remains a major coal producer with plans to reopen Utah’s old Trail Mountain mine under the name Fossil Rock.