NOTE 12

ACCRUED CLOSURE COSTS AND ARO

Accrued closure costs represent our estimated environmental liability to clean up our fixed-based regulated facilities as required by our permits, in the event of closure. Changes to reported closure liabilities (current and long-term) for the years ended December 31, 2019 and 2018, were as follows:

The Company recorded an additional $330,000 of closure costs and current closure liabilities in 2019 due to finalization of closure requirements for the Company’s M&EC facility. In 2019, the Company completed the closure and decommissioning activities of its M&EC facility in accordance with M&EC’s license and permit requirements. The Company had recorded an additional $3,323,000 in closure costs and current closure liabilities in 2018 due to changes in estimated future closure costs for the M&EC subsidiary.

The spending of approximately $1,359,000 in 2019 was primarily for the closure of the Company’s M&EC facility. In 2018, the Company had total spending of approximately $5,293,000, of which $4,991,000 was for activities related to the closure of the M&EC facility with the remaining for the PFNWR facility in connection with the closure of certain processing equipment/enclosure.

At December 31, 2019 and 2018, M&EC’s closure liabilities totaled approximately $84,000 and $1,142,000, respectively, with the entire amount classified as current.

The reported closure asset or ARO, is reported as a component of “Net Property and equipment” in the Consolidated Balance Sheets at December 31, 2019 and 2018 with the following activity for the years ended December 31, 2019 and 2018: