17.ASSET RETIREMENT OBLIGATIONS

The majority of the ARLP Partnership’s operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan. The ARLP Partnership accounts for its asset retirement obligations by recognizing the fair value of the liability in the period in which it is incurred. The ARLP Partnership has estimated the costs and timing of future asset retirement obligations escalated for inflation, then discounted and recorded at the present value of those estimates. Federal and state laws require bonds to secure the ARLP Partnership’s obligations to reclaim lands used for mining and are typically renewable on a yearly basis. As of December 31, 2015 and 2014, the ARLP Partnership had approximately $153.5 million and $142.3 million, respectively, in surety bonds outstanding to secure the performance of its reclamation obligations.

The impact of discounting the ARLP Partnership’s estimated cash flows resulted in reducing the accrual for asset retirement obligations by $104.8 million and $88.8 million at December 31, 2015 and 2014, respectively. Estimated payments of asset retirement obligations as of December 31, 2015 are as follows:

Year Ending December 31,	(in thousands)

2016	$	1,251
2017	1,073
2018	4,582
2019	4,832
2020	5,093
Thereafter	211,654

Aggregate undiscounted asset retirement obligations	228,485
Effect of discounting	(104,800)

Total asset retirement obligations	123,685
Less: current portion	(1,251)

Asset retirement obligations	$	122,434

The following table presents the activity affecting the asset retirement and mine closing liability:

	Year ended December 31,
	2015		2014
	(in thousands)

Beginning balance	$	93,140	$	82,898
Accretion expense	3,192		2,730
Payments	(519)		(1,134)
Assumption of existing liability	31,372		6,042
Disposition	—		(5,246)
Allocation of liability associated with acquisitions, mine development and change in assumptions	(3,500)		7,850


Ending balance	$	123,685	$	93,140

For the year ended December 31, 2015, the increase in the total liability was primarily attributable to the acquisition of additional property with certain existing reclamation liabilities (See Note 3 — Acquisitions). The allocation of liability associated with mine development and change in assumptions was a net decrease of $3.5 million. This decrease was primarily attributable to decreased estimates of reclamation requirements at property of the ARLP Partnership’s subsidiary, Rough Creek Mining, LLC, offset by increased refuse site reclamation acreage and material required at Pattiki, along with updated estimates at all other operations, offset in part by the net impact of overall general changes in inflation and discount rates, current estimates of the costs and scope of remaining reclamation work, reclamation work completed and fluctuations in other projected mine life estimates.

For the year ended December 31, 2014, the allocation of liability associated with acquisition, mine development and change in assumptions was a net increase of $7.9 million. This increase was attributable to increased size of refuse sites primarily at the Onton, Gibson South, Tunnel Ridge, Dotiki and River View operations, offset in part by the net impact of overall general changes in inflation and discount rates, current estimates of the costs and scope of remaining reclamation work, reclamation work completed and fluctuations in other projected mine life estimates. The increase in the total liability was also attributed to the acquisition of additional property with certain existing reclamation liabilities (Note 3 — Acquisitions), offset in part by the sale of property associated with the Pontiki mine.