According to federal regulators, the Wyoming Department of Environmental Quality did not take appropriate action against Alpha Natural Resources when it was in violation of coal mining regulations. 

The issue, outlined in a letter sent by the federal Office of Surface Mining Reclamation and Enforcement (OSMRE) to DEQ, was that the bankrupt company was mining coal without enough reclamation bonding in place to cover its hundreds of millions dollars in reclamation liabilities.  

During bankruptcy proceedings, Alpha and DEQ reached an agreement that would have prioritized a claim for a fraction of the company's total project clean-up costs.  In its letter, OSMRE outlined why the agreement, among others, was not adequate under Wyoming's regulations. 

"WYDEQ has given Alpha a 'free pass' from regulatory compliance by allowing the continuance of mining activities for a lengthy period without adequate bond...," OSMRE wrote, calling DEQ's interpretation of its rules "inconsistent" and "irrational."

Alpha's reclamation bonding issue was resolved last week in a settlement between the company and a handful of federal agencies. A bankruptcy court judge approved the company's reorganization plan soon after.

Governor Matt Mead wrote in a statement, quote, "If Wyoming followed the lead of OSMRE it would result in shutting down coal mines and putting coal miners out of work thus shifting the reclamation liability to taxpayers. The State of Wyoming will appeal this determination and is prepared to pursue legal action if OSMRE takes further action that impinges on Wyoming’s regulatory authority. " 

Alpha may appeal OSMRE's written determination. 

DEQ initially declined to comment but issued a strongly-worded letter on Friday, July 15th, accusing the federal government of "political theater." The letter goes on to assert that the federal government doesn't have the authority to question DEQ's decision-making.