Coal Tattoo

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It’s fascinating — but also terribly depressing — to watch the taxpayer-funded publicists in West Virginia government promote the state’s energy industries. Their statements often have such little connection to reality.

Take this morning … there I was, innocently checking over the latest feeds from all of my friends on Twitter, when this came in from the state Department of Commerce:

See the blueprint for why WV continues to be a leader in the nation’s energy production, now and in the future.

Their “tweet” referred readers to a link for a fancy little document they’re calling “West Virginia Energy Blueprint,” that amounts to little more than promotion of a couple of particular state industries — primarily coal, but with a fair amount about natural gas from the Marcellus Shale play.

What you won’t find in there is any real discussion of important issues like the global climate crisis (not even the lack of any real movement on development and deployment of coal-friendly carbon capture and storage technology), the growing science showing environmental and public health damage from mountaintop removal coal mining, the continued toll of coal on the industry’s own workforce, and the inevitable decline of Central Appalachian coal production that’s going to create major economic problems for the region.

At about the same time that Commerce Department tweet came over, I was calling up the latest earnings statement out from Arch Coal’s corporate office out in St. Louis. The company reported $70.1 million in income last quarter and more than $140 million in income in 2011 in full.  CEO Steven Leer said:

Arch delivered solid quarterly financial results despite weakening coal market conditions as the fourth quarter progressed. In particular, our Powder River Basin operations rebounded from flood-related disruptions earlier this year. Also, higher realized prices and solid cost control across our diverse operating platform helped to expand our per-ton operating margins versus a year ago.

Nothing in Arch’s prepared statement about Blair Mountain, by the way, but they did have some things to say about the future of coal, especially here in Appalachia:

Coal markets weakened in the fourth quarter of 2011 as abnormally mild weather and muted economic growth caused U.S. power generation to decline slightly for the full year. Domestic coal consumption declined 5 percent in 2011, resulting from the decrease in power generation as well as fuel switching by power producers given decade-low prices for natural gas and abnormally high hydroelectric availability. As a result, coal stockpiles at U.S. generators rose to an estimated 180 million tons by year end, a seasonal build that is above historical norms.

In 2012, Arch currently estimates that domestic coal consumption for power generation could decline by 50 million tons or more from 2011 levels, as mild weather has reduced power demand and the current oversupply in natural gas markets could induce more coal displacement. Given anticipated declines in domestic coal use as well as U.S. generator stockpile builds, Arch believes that coal production and capital spending levels industry-wide are in the process of significant rationalization, which should set the stage for the next market upswing.

Internal estimates suggest that a significant portion of Central Appalachia’s estimated 125 million tons of thermal production is uneconomic at current index price levels.

Missing from that? Any of the sort of stuff you hear continually from West Virginia political leaders blaming any sort of contraction in the coal industry or coal-fired utilities on President Obama and the efforts of the U.S. Environmental Protection Agency to clean up air pollution and reduce on-the-ground impacts of mountaintop removal.

It’s funny how that goes … we saw the same thing earlier this week in the press.  Take this Gazette report about an appearance in Charleston by new AEP chief executive Nick Akins:

Although the amount of energy produced by coal will decrease in the nation — from 45 percent today to 39 percent by 2020 — a top electric utility company CEO said there is definitely a future for coal.

“Coal is naturally going to come down, natural gas will be the choice, but they’re really marginal,” said Nick Akins, president and chief executive officer of American Electric Power. “Once technology is proven, you’ll start to see coal come back. We still need coal . . . . If someone is trying to eliminate that, it’s just not going to happen.”

The Daily Mail had an even longer story on this, with the predictable editorial, proclaiming:

The supporters of the Obama administration have a clear vision of the nation’s energy future. It involves windmills and solar arrays – but not coal. They don’t like carbon. The administration takes no responsibility for whether the resulting power supply will be adequate, reliable or affordable. Accordingly, it has tasked the U.S. Environmental Protection Agency to kill the coal industry and coal-burning utilities as rapidly as possible through regulation.

It’s hard to know where to start when newspaper editorial writers have such little grasp for the facts, and often seem to ignore even what their own reporters know to be true — follow the recent tweets from the Daily Mail’s Ry Rivard, such as this:

Coal industry woes: companies blame a number of factors, many market driven, plus the regs. Pols & operatives emphasize EPA. The industry has been noting quietly for several years the power of market. I remember coal mine closed two years ago … After some prodding, company admitted it had too much coal on hand & bad market. Didn’t stop politicians from blaming in toto the EPA.

Industry executives, state agency flacks and newspaper staffers who throw out straw-men arguments about eliminating all coal production immediately aren’t doing West Virginians any favor. They simply don’t know what they’re talking about at best — or, at worst, they are deliberately misleading people.

The latest projections for the future of coal in this country don’t suggest the industry is going to die, no matter what EPA does about mountaintop removal, mercury emissions or global warming.  They do show major declines over the next quarter century in Appalachia, especially in Central Appalachia, which includes the Southern West Virginia coalfields where most mountaintop removal takes place. I’ve yet to hear a single major political figure in West Virginia address this in an honest way, and suggest that something needs to be done to prepare for it. I can’t figure out which these guys want to talk about less — the coal production trends or the WVU studies that link living near mountaintop removal to increased risks of cancer and birth defects.

Ironically, the press reports about the new AEP chief’s speech were bracketed on both sides by media accounts of far more troubling signs of our future: A few days before Nick Akins visited Charleston, both Alpha Natural Resources and Patriot Coal announced mine closures and layoffs.  Just after his appearance, rival utility FirstEnergy revealed it was closing three of its most ancient, least efficient and most polluting plants in West Virginia.

Gov. Earl Ray Tomblin’s response? Bash EPA. Same goes for Sens. Jay Rockefeller and Joe Manchin and Rep. David McKinley. The Parkersburg paper quoted all of them in a story, but couldn’t be bothered to mention any potential public health benefits that would come from eliminating the air pollution from these plants. And none of the political leaders seemed to know that, as we reported in the Gazette, FirstEnergy still has a significant generation presence in West Virginia — including three large plants where it spent billions to install scrubbers, in projects that improved air pollution and efficiency, while also providing thousands of construction jobs.

Just as the late Sen. Robert C. Byrd warned us it would, change is coming to West Virginia’s coal industry.

Interestingly, as we noted in our story about the FirstEnergy plant closures, the West Virginia Sierra Club had tried to get a discussion going in the Preston County area about the future of the Albright Power Station. They wanted to talk about what would happen if (when?) the plant closed — where would people find jobs, how would local schools be funded, and aren’t there cleaner alternatives for energy production that might help rejuvenate such communities?

Pam Kasey did a more complete story on the Sierra Club’s efforts for The State Journal, and she explained:

Communities in West Virginia and across the nation face losses as the oldest coal-fired power plants near the ends of their useful lives.

Families lose good livelihoods when plants are retired. The diversity and health of local economies are diminished.

But in some communities, residents, supported by environmental groups, have worked with utilities to craft closure plans that take local needs into account.

Last year, for example, workers and local governments in Centralia, Wash., assisted by the Sierra Club, negotiated a 15-year plant closure plan with TransAlta. The plan sets aside $50 million for energy efficiency and clean energy projects — initiatives that will keep electricity bills down and offset the jobs impact of the closure.

A similar settlement agreement on behalf of residents of Gulf states was announced later in the year. Audubon and the Sierra Club agreed to stop fighting AEP’s new coal-fired plant in Arkansas. To offset the new plant’s emissions, the utility will retire its old Welsh 2 coal-fired unit in northeast Texas by 2016 and will provide 400 megawatts of clean generating capacity for the region and $10 million for energy efficiency and land conservation.

My old buddy Jim Kotcon of the Sierra Club told me this week:

We think something like that has to happen in a lot of areas. We see a continued decision to reduce use of coal-fired electricity as the health impacts become more obvious. It’s important to being the path toward transition so we don’t end up with more communities where a company just announces they are closing a plant.

What if all of the energy that goes into distributing “urgent” social media messages and waging call-in campaigns about one mountain (no matter how historic) were instead funneled into working on what the Sierra Club is trying to do in Preston County? Maybe even half of that energy?

More importantly, why did it take the Sierra Club to put together a meeting like the one in Albright? Why aren’t Gov. Tomblin and our congressional delegation doing it?