It’s a rare thing when environmentalists and coal lobbyists agree on something.

But both groups are concerned that a $5 million raid on Ohio’s coal-mining reclamation fund by Gov. John Kasich’s administration in 2017, coupled with the coal industry’s continued downturn, could leave the state’s taxpayers picking up the tab for millions of dollars in cleanups of abandoned mining sites.

"They’re already on the hook. It’s just a question of how much they’re going to be on the hook for," said Bob Mooney, a former inspector for the Ohio Department of Natural Resources who later worked for the federal Office of Surface Mining, where he was a deputy director of a field office in Ohio in the 1990s. "I have no doubt that Ohio’s bonding program will not be able to reclaim the bond forfeitures that will be coming."

The Kasich administration doesn’t share that concern.

The administration took $5 million from the reclamation fund to balance the 2017 budget in response to a significant shortfall in tax revenue, Ohio Office of Budget and Management Director Timothy Keen acknowledged in an interview with The Dispatch. It was one of 16 funds tapped for a total of more than $114 million that year.

"Every year, I make transfers from a series of funds that have what I consider to be excess balances that are not necessary for the programs that they help fund," Keen said.

The other funds raided include the oil and gas well fund for $35 million, lung-cancer research for more than $1 million, and the securities fund for $10 million.

The $5 million taken from the reclamation fund has not been returned. That’s also the case for the 15 other funds, even though the state’s rainy-day fund has $2.7 billion.

"Should they put it back? Of course they should," said Michael D. Cope, president of the Ohio Coal Association, who said he wrote several letters to the Kasich administration and never received a response about the fund. "They shouldn’t have taken it in the first place."

Keen said there is no plan to return the funds. "Why? Why would we put it back?" he said.

The money grab prompted the federal Office of Surface Mining Reclamation and Enforcement to contact the state.

"The removal of funds for uses other than its intended purpose as established by Ohio legislation causes serious doubt that Ohio can meet its obligations under (federal law) to ensure that it will have available sufficient money to complete the reclamation plan for any areas which may be in default at any time," Ben Owens, chief of the Surface Mining office’s Pittsburgh field division, which oversees Ohio, wrote in a letter in August 2017.

In Ohio, coal companies pay $2,500 for each acre they will mine. That serves as collateral in case a company abandons or forfeits the mining site; the state would use those dollars to clean up the site.

On top of that, companies pay a severance tax of 14 cents per ton of coal that goes into the reclamation fund, where it is pooled with other companies’ tax payments to rehab sites. The reclamation fund is a second option for funding environmental cleanup if a company’s bond amount is inadequate.

Companies also have the option to pay the estimated cost of reclamation up front. Only 12 of the 162 permits on file this month used that option, records reviewed by The Dispatch show.

In 1977, Congress passed the Surface Mining Control and Reclamation Act, which set national standards regulated through the Interior Department’s Office of Surface Mining Reclamation and Enforcement. The federal law allows states to regulate their coal-mining reclamation programs, with the Interior secretary signing off on them. Ohio’s program was approved in 1982. In 2005, Ohio was notified that its program did not meet the federal standards, and the program has not returned to full compliance, according to documents.

Chris Holmes, a spokesman for the federal Office of Surface Mining, told The Dispatch that warnings are sometimes issued to states that could ultimately result in the federal government assuming partial or total control of a state program to bring it into compliance with the law.

"In such cases, the state is given the opportunity to correct the deficiency," Holmes said in an email. "We informed Ohio that we are considering such an action." Holmes did not specify a timeline.

The Office of Surface Mining has been running Tennessee’s mining program since the 1980s, said Peter Morgan, an attorney for the Sierra Club. But such a move is rare. The OSM sometimes exercises its power when states want to amend rules and need the federal office to sign off on the changes.

"The problem is, if a state is happy with the status quo and can’t be compelled to change its program, then the Office of Surface Mining has limited actual power," Morgan said. The federal officials do have some power, he said, but "they just don’t usually have the political will to use it."

Keen said, "I consider it highly unlikely that the federal government is going to take over the operation of this program."

Ohio’s fund was deemed inadequate to cover catastrophic events involving larger mining-permit holders, according to an actuarial report released in June 2017, when the balance was $25.9 million, before cash was removed by the Kasich administration.

"If the largest permit holder fails, the fund would need over 150 years of non-forfeitures in order to cover the loss," according to the report.

At the time, the actuarial report estimated that Ohio’s fund needed $25.1 million to cover long-term exposure to bond-forfeiture liability and an additional $25.7 million to cover a shock-loss scenario in which an average-size coal-company permit holder walked away from a mining site without performing reclamation.

After the Kasich administration’s transfer, the fund dropped to $21.5 million, according to records. As of October, it was at $22.2 million, records show.

Another actuarial report is due out in 2019.

State officials said Ohio taxpayers have never had to foot the bill for reclamation costs since the fund was created in 1977.

Morgan cited ongoing bankruptcy proceedings for Westmoreland Coal, which holds 49 mining permits in Ohio, as an example of why the state’s taxpayers should be concerned.

On Friday, the company based in Englewood, Colorado, filed court documents stating it was having a hard time finding a buyer for its Ohio mines, Morgan said. The actuarial report said Westmoreland has $150 million in reclamation liability in the state.

"I would be shocked if they (Westmoreland) put enough money in to fully satisfy all of those obligations," Morgan said. "I expect that the reclamation forfeiture fund is going to be tapped, and there’s a good chance it will be in excess of the $22 million that’s currently in the fund."

Ohio is not the only state to weigh how to deal with coal companies that have fallen on hard times as less coal is mined. The U.S. Energy Information Administration estimates that the country this year used the least coal since 1979. The year also has seen the second-most shutdowns of coal-fired power plants on record, a result of environmental concerns and low prices for natural gas, a competing fuel.

In the past decade, state records show, only one company has forfeited mining sites, resulting in the use of reclamation funds. In 2014, Valley Mining forfeited six sites totaling nearly 2,600 acres. More than $660,000 from the state reclamation fund has been used in the ongoing cleanup.

The U.S. Government Accountability Office recommended in April that the federal law be amended to eliminate self-bonding, in which coal companies promise to cover the costs based on their finances.

Ohio is one of six states with the alternative bonding system in which companies pay into a pool to reclaim mining sites that have been forfeited or abandoned. The system is based on the premise that the coal industry is healthy. Cope said he’s optimistic that demand for coal will rebound in the next few years.

"The real danger and the problem is that the system is completely unprepared to deal with the very situation that we’re seeing right now, which is a sector-wide decline in the coal industry that threatens the viability of every mine operator," Morgan said.

The GAO report noted concerns that the bonds are riskier than before because of industry bankruptcies and lower coal demand.

The Interior Department, in its response to the report, "neither agreed nor disagreed" with the GAO’s recommendation to change the law.

It would be best for taxpayers if states required mining companies to secure third-party surety bonds, Morgan said. The bond companies would be responsible for fulfilling the obligation if mining companies fold.

"So only Congress can compel them, but an act of Congress isn’t required for states to do that. Ohio could do that tomorrow if it wanted to," Morgan said.

When asked whether the funding system for Ohio’s coal-mine reclamation effort should be overhauled so that taxpayers aren’t at risk of picking up the tab, Keen said that is a matter for the state’s Department of Natural Resources to address.

"It just proves my point that the $5 million transfer is absolutely irrelevant and that there’s a bigger set of issues and questions at play here," Keen said. "People should not be distracted by this $5 million transfer."

If Ohio were to go to a third-party surety-bond system and coal companies continue to fold, it’s possible the bond companies could refuse to issue such bonds to mining companies, or the bonds would become prohibitively expensive, Morgan said.

"If that really is the situation, the free market is saying coal mining is not a viable industry," he said. "That’s information everybody should pay attention to."