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


	Year Ended December 31,
	2016		2015
	(in thousands)

Beginning balance	$	123,685	$	93,140
Accretion expense		3,769		3,192
Payments		(379)		(519)
Assumption of existing liability		—		31,372
Allocation of liability associated with acquisitions, mine development and change in assumptions		(1,374)		(3,500)
Ending balance	$	125,701	$	123,685

For the year ended December 31, 2016, the allocation of liability associated with acquisition, mine development and change in assumptions was a net decrease of $1.4 million. This decrease was attributable to 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 projected mine life estimates, offset in part by increased expansion and disturbances of refuse sites primarily at the Warrior and Gibson County Coal mines.

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.

The impact of discounting the ARLP Partnership's estimated cash flows resulted in reducing the accrual for asset retirement obligations by $110.7 million and $104.8 million at December 31, 2016 and 2015, respectively. Estimated payments of asset retirement obligations as of December 31, 2016 are as follows:


Year Ended
December 31,	(in thousands)

2017	$	435
2018		385
2019		158
2020		147
2021		80
Thereafter		235,237
Aggregate undiscounted asset retirement obligations		236,442
Effect of discounting		(110,741)
Total asset retirement obligations		125,701
Less: current portion		(435)
Asset retirement obligations	$	125,266

Federal and state laws require bonds to secure the obligations to reclaim lands used for mining and are typically renewable on a yearly basis. As of December 31, 2016 and 2015, the ARLP Partnership had approximately $171.8 million and $153.5 million, respectively, in surety bonds outstanding to secure the performance of its reclamation obligations.

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for asset retirement obligations.