Coal Tattoo

Friday roundup, Oct. 5, 2012

In this Tuesday Sept. 25, 2012 photo, firemen carry a stretch with a body of a dead miner at a coal mine in Baiyin city, in northwestern China’s Gansu province. A steel cable broke as it was pulling two carriages at the coal mine on Tuesday, killing 20 workers in the country’s latest mining accident. (AP Photo)

More bad news from the coalfields of China:

HARBIN, Sept. 23 (Xinhua) — Three separate coal mine accidents over the weekend left 22 miners trapped in northeast and east China, according to local government sources.

Eleven people were trapped after a fire broke out Saturday morning in a coal mine in northeast China’s Heilongjiang Province.

The accident that occurred at the Longshan coal mine in Youyi County of Shuangyashan City was previously reported to have happened on Sunday as a result of the mine owner’s attempt to cover up, the rescue headquarters said.

In other international news, the Christian Science Monitor had this interesting commentary:

A funny thing is happening on the way to the clean energy future.  While the US government wages a regulatory war on coal fired generation, in Europe, the land of the oh so politically correct the drive for greenhouse gas emissions reduction is meeting a new competitor—reality!

The EU emissions trading scheme had fallen on hard times as the number of permits issued was large and demand in a falling economy was weak so prices fell.  Some reforms were made and the freebie credits were reined in but the economy was still weak.  While progress was still made in emissions reduction it was not the transformation some had hoped to achieve.

In the U.S. market, Reuters reported:

The recent rise in U.S. natural gas prices and decline in coal prices is set to put a dent in demand for natural gas as some utilities resume using more coal to generate electricity.

A mild winter that left a huge amount of gas in inventory and record-high natural gas production pushed prices to 10-year lows in April, luring power companies away from coal.

But the spread between NYMEX Central Appalachian coal and Henry Hub natural gas futures on Thursday reached its widest in more than a year as gas prices rebounded from lows plumbed earlier this year, making gas less of a bargain.

And this post on Fuel Fix explained that things are more complicated than they seem:

The glut of natural gas unleashed by hydraulic fracturing – and the resulting low prices – make it seem like a no-brainer: Ditch coal-fired electric plants, with all their baggage about air pollution and water consumption, and switch to natural gas.

Trends over the past year suggest that’s starting to happen nationally, as natural gas has overtaken coal for generating electricity.

Use of coal to generate electricity was down almost 18 percent for the first seven months of 2012, compared with the same period in 2011, according to the U.S. Energy Information Administration. Natural gas use was up by 30 percent.

In Texas, the proportion of electricity generated with coal dropped 8 percentage points so far in 2012. But with a new Central Texas coal plant scheduled to begin operations next spring, coal-generated electricity is likely to remain a substantial part of the state’s grid for years to come.

Low natural gas prices alone aren’t enough to prompt power companies to shift multimillion dollar investments.

“Nobody’s going to tear down a half-billion-dollar coal plant to put in a new natural gas plant just because natural gas is slightly cheaper,” said Edward Hirs, an energy economist at the University of Houston.


Members of the Lummi Nation protest the proposed coal export terminal at Cherry Point by burning a large check stamped “Non-Negotiable” on the Gulf Road beach west of Ferndale, Wash., Friday afternoon, Sept. 21, 2012,  The tribe says they want to protect the natural and cultural heritage of the site. (AP Photo/The Bellingham Herald, Philip A. Dwyer)

Grist, meanwhile, had an interesting post called Who killed one of Virginia’s dirtiest power plants? It explained:

For two generations, the electricity generated [at the GenOn power plant in Alexandria, Va.] helped power the post-World War II economic boom across the land. It provided a good living for thousands of employees and good profits for shareholders.

An unmistakable landmark, the plant’s five short smokestacks identified the Alexandria riverfront as much as the George Washington Masonic Memorial does from a hill near the King Street Metro station.

Those stacks also pushed untold tons of air pollution into the skies over the District, Maryland and Virginia, marking the plant as the largest single source of air pollution in the Washington region.

That’s it, in summary. It provided cheap power and polluted like hell; now it’s dead. The end.

Who does GenOn blame for the closure? Not Obama, unless “Obama” is a brand name of natural gas.

What’s finally doing dirty coal plants in? Economics. The war on coal: Waged and won by the free market.

From the western coalfields, WyoFile had this report:

Congress established the Abandoned Mine Reclamation Trust Fund (AML) to pay clean-up costs for abandoned coal mines nationwide, not to build agricultural facilities at Sheridan College and new classrooms at the University of Wyoming, which is what has happened. It takes a few drinks, but adherents of even modest fiscal responsibility will admit that AML funding has strayed far from its intended purpose.

Wyoming’s delegation has won some impressive battles in getting AML money back to their state, but their odds of winning the war grow increasingly slim.

For example, the FY2013 Continuing Resolution passed on September 13th includes a permanent reduction to Wyoming’s share of the AML trust fund. The fund is fed by a tax on coal, and much of those taxes come from Wyoming coal, but Wyoming is now getting less and less of that money back for local projects.

The reality is that over the years, Wyoming has received tens of billions of non-mineral related money from taxpayers who don’t live in the Cowboy state. In the trade-off department, Wyoming has gotten an awfully good deal.

The old era is fading. What were once Wyoming plums are now low-hanging fruit for a cash-strapped Congress to pluck for other purposes.

But the federal budget crunch is not the only reason for the change: as Congress has succumbed to partisan polarization, the Wyoming delegation has lost the capacity to work across the aisle. It is worth remembering that it was always bi-partisan work in Washington that got Wyoming those plums in the first place.

If the partisan divide only widens, Wyoming’s delegation may now find it harder and harder to bring home a bountiful harvest from Washington.

… These raids on the AML trust represent a particularly potent irony for Wyoming. Since its territorial times, Wyoming has seen the federal government as a cash cow to milk at every opportunity. Now the tables are turned. Washington sees Wyoming with its mineral wealth as a source of revenue and we, quite naturally, don’t like that one bit.

What infuriates Wyoming is that if we don’t get our share back it means, in essence, that a coal company in Campbell County is paying the cost for turning a creek in southwest Pennsylvania from orange to something resembling clear. Economists call this rent-seeking: taxing someone, preferably an out-of-state entity, for the cost of local and state-wide services. Never mind that a number of the coal companies operating in Campbell County  have in fact operated in places like Pennsylvania too.

Wyoming is an expert on rent-seeking. For decades we’ve gotten mineral companies to pay for services that, in most states, fall upon the backs of citizen taxpayers. Since corporations tend to pass costs on to customers, who do you think pays for the billions Wyoming collects in mineral severance taxes? Downstream energy users in Missouri and Iowa, that’s who.

These raids on AML also hit another key spot in Wyoming central nervous system. They unmask how what a shaky job Wyoming has done in diversifying its tax base. Yes, Wyoming has done a better job recently attracting companies unrelated to coal, oil, gas, but without mineral money, our revenue stream goes into freefall. Thus, we have to protect that money at all costs. How long are we going to spend defending and manipulating a source of revenue as opposed to discovering new ones?

Over at The State Journal, Taylor Kuykendall had a piece looking in more detail at the Patriot Coal bankruptcy, and the Gazette ran this op-ed by my buddy Lou Martin about the issue:

As I have protested mountaintop removal, demanding that West Virginia enforce its regulations, I have faced many miners whose jobs will be affected. I have heard what they and their families think of me. I have seen the pain, fear and sometimes hatred on their faces. But I doubt that the CEOs and the CFOs of Patriot Coal and Peabody Energy will ever have to stand under the hot sun face to face with the workers and retirees after having cut the “liabilities” that were their pensions.

The real struggle is not between the tree huggers and the miners. It is between the people and the outside corporations that will exploit the land and the people and leave nothing behind, not even pensions. That is one of the reasons I believe in working for a sustainable economy for West Virginia now.