The department shall either:

(1) determine the amount of the bond to be forfeited on the basis of the estimated cost to the department or its contractor to complete the reclamation plan and other regulatory requirements in accordance with the Act, the rules adopted pursuant thereto, and the requirements of the permit; or

(2) forfeit the entire amount of the bond for which liability is outstanding and deposit the proceeds thereof in an interest-bearing escrow account for use in the payment of all costs and administrative expenses associated with the conduct of reclamation, restoration or abatement activities by the department.