Coal Tattoo

Friday roundup, May 24, 2013

Coal bound for South Korea via a West Coast port passes through a loading terminal at Cloud Peak Energy’s Spring Creek mine near Decker, Mont., on April 4, 2013.   (AP Photo/Matthew Brown)

Over at the State Journal, Pam Kasey this week provided an up-close look at the progress Arch Coal Inc. is making ramping up operations at its new Leer Mining Complex outside Grafton, W.Va.:

It takes years to ramp up a major coal mining operation.

Granted, Arch Coal’s Leer Mining Complex outside Grafton underwent a change of ownership after it was permitted to International Coal Group in 2008. That had to slow things down.

Still, it’s a huge job.

The long bridge to the complex from U.S. Route 50 over Three Fork Creek of the Tygart Valley River was built in 2008, according to Scott Boylen, Leer president and general manager. The road out to the mine wasn’t built until 2010.

Arch acquired the mine in 2011 and made the first cut of coal in November 2011. Back then, the only access was a 325-foot shaft and a crane with a bucket that hauled men and supplies down and coal up — just three tons at a time.

A proper elevator didn’t go in until February 2012, Boylen said. Employment then was around 30.

A major constraint was haul-out capacity. A temporary vertical belt put in place in June 2012, after the 1,400-foot slope from the bottom of the mine up and out through the side of the hill to the preparation plant was constructed, took that from three tons per bucket to 800 tons per hour. The permanent belts that started up in November 2012 took it to the design capacity of 7,600 tons per hour.

Employment at the site is 362 now, with 75 miners underground at any one time and three shifts a day, seven days a week.

Yet, a year and a half after the first coal came out of the ground, continuous miners are still developing the first panel for the faster longwall operation to come and the prep plant is operating at about one-quarter capacity, Boylen said.

And none of the mine’s coal is yet under contract.

And, Pam took a look at the community impacts in a sidebar headlined Grafton: Town with a mine, but not yet a mining town:

The devastation of a community when a coal mine closes is an all-too-familiar story in West Virginia.

What happens in the opposite situation — when a community gets a first big mine?

Grafton, seat of Taylor County, is a rare case in point.

She writes:

The housing market is brisk. An influx of some mine employees has followed earlier waves of workers from the construction phase of the mine, gas industry workers and, earlier still, workers on the Trans-Allegheny Interstate Transmission Line that Allegheny Energy built through the area in 2010. 

“We don’t have any rentals (available) and it’s like a madhouse in here all the time,” said a woman who spoke for New Ray Realty in Grafton but did not want to give her name …

… Arch and its contractors have brought new business to some shops and restaurants.

“I’ve done booklets for them, I’ve done forms, I’ve done tags, stuff I wouldn’t have done if they weren’t in town,” said Sally Pickens, owner of Main Street Printers. “The employees do faxes and copies, so my foot traffic has improved from the mine.”

… Perhaps the most enthusiastic among the proprietors in Grafton is John Snyder, owner of Frey’s Auto Supply. Snyder was approached early on by Arch contractors who did infrastructure development at the mine, and he’s had a good experience.

“We’re just a mom and pop place,” Snyder said of the shop he bought in 1989. 

“We just try to out-service, find places where we can do something that the other guys either choose not to do or don’t know how to do.”

But still:

Maybe it’s because, as a large company doing business globally, Arch can source its needs from anywhere.

“They haven’t bought much here,” said John McDaniel, owner of Taylor County Supply hardware store. 

“I deal in U.S.A. (-made steel) pipe. I guess it’s too high compared with Chinese pipe. I sold them a little bit but they’ve never bought anything since.”

Frey’s has done some work on Leer mine vehicles, “but a lot of their stuff other than vehicle repair is purchased regionally,” Snyder said, adding that he thinks that could change over time. 

Maybe it’s because such a large company can bring workers in from elsewhere. 

Leer has brought two-thirds of its employees from other Arch mines that have been idled or mined out — keeping miners from elsewhere employed, but reducing the positive local impact. 

The Fredericksburg, Va., Free-Lance Star had this piece by its business editor:

To see how mercurial a coal-fired economy can be, look at Wise County in Virginia’s southwest corner.

There were about 10 percent more people living there in 1920 than live there today, and the population has gone up and down like a roller coaster over the years. Instead of steady growth, the county and others in Virginia’s share of the Central Appalachian coal belt rise and fall with the vagaries of the coal market.

Three forces are now conspiring to make this yet another lean season for towns dependent on the mines.

Natural gas is cheap and plentiful. The boom in the Northeast and elsewhere, abetted by better (or at least more efficient) fracking methods has driven down prices.

It’s cheaper to mine coal out west, especially in Wyoming, where two huge surface mines produce more of the nation’s coal than all the mines in the Kentucky-West Virginia-Virginia-Tennessee region combined.

And, of course, Obama hates coal.

At least, that’s what you might hear from any number of sources perhaps inclined to blame everything from ingrown toenails to bad weather on the president.

It’s true that this administration has enforced tougher regulations, both on the mining operations, in an effect to keep entire mountain tops from being scraped off, and coal-fired power plants, because coal dust isn’t that healthy to breathe.

The mines in Appalachia are closer to more people than those out West, making the impact of things like slurry spills, polluted drinking water and landslides abetted by denuded hills more severe.

The new, tougher standards have been part of the problem for the coal industry, no doubt. From here, though, they’re running a distant third to natural gas and western coal …

… One thing’s pretty clear, though: If Appalachian coal faces a dim future, the key culprit is not some anti-mining movement in Washington.

On the other hand, the Kentucky Coal Association’s Bill Bissett had this to say in an op-ed published by the Lexington Herald-Leader:

The simple fact is that hundreds of applications for new mining projects are pending before the environmental regulatory agencies that would employ thousands of people and contribute millions of tax dollars to state and local governments. The pendency of these applications belies the “coal is dead” narrative so vigorously promoted by your newspaper and other anti-coal pundits like the mayor of New York City, Michael Bloomberg.

Unfortunately, these proposed new mining projects are unlikely to materialize unless legislation such as that proposed by McConnell is enacted. A bitter fact of life is that the Environmental Protection Agency is following a policy designed to impede the Kentucky coal mining industry.

Since the EPA issued its infamous Appalachian coal mine permit guidance on April 1, 2010 (since invalidated by the federal courts), there has been only one individual Clean Water Act permit for a new or expanded surface mining project in Eastern Kentucky that has not been vetoed by EPA.

In contrast, more than 40 such projects have been approved by the Kentucky Energy and Environmental Cabinet and later vetoed by EPA.

Although appeals of the EPA vetoes were filed in December 2010, EPA has taken no final action on the permits two and a half years later.

Am I the only one who found Bill’s use of certain terminology — “vetoed” and “individual Clean Water Act permit” — a little confusing here? What Bill is really writing about are specific objections that EPA issued regarding a long list of Clean Water Act Section 402 pollution discharge permits for Kentucky mining operations. What he’s not talking about are actual vetoes of Section 404 “dredge-and-fill” permits like the one EPA vetoed for the Spruce Mine in Logan County, W.Va. I spoke with Bill the other day, and he was absolutely confident that no one would be confused by this — he said his word choice was simply aimed at trying to simplify a complex government permit process for average readers.

Anyway … here’s an interesting piece from the Dickinson Press in North Dakota:

Federal lawyers concede that thousands of dollars of campaign donations from coal-mining interests to members of the North Dakota Public Service Commission “risk creating an appearance of impropriety.”

But lawyers for the U.S. Interior Department, charged with overseeing regulation of coal mines, argue in court filings that the contributions violated no laws and a lawsuit has not proven any harm.

Two environmental groups, the Dacotah Chapter of the Sierra Club and the Dakota Resource Council, filed a lawsuit last year in U.S. District Court in Bismarck asking a judge to compel federal regulators to ban the coal-mining contributions as illegal “gifts and gratuities.”

The dispute, which dates back to 2008, arose when opponents of a proposed coal mine near South Heart in Stark County in southwest North Dakota claimed campaign contributions to two members of the Public Service Commission were a conflict of interest.

And here’s an important story from Reuters:

Human Rights Watch accused Mozambique’s government and foreign mining companies on Thursday of “serious shortcomings” in resettling communities to make way for coal mines, leaving thousands without proper homes, food or sources of income.

In a report on the social impact of a mining boom in the war-scarred southern African country, the New York-based group noted the plight of more than 2,000 families displaced to make way for multi-billion dollar coal mines run by Vale.

Families in the northwest province of Tete had faced “significant and sustained disruptions in accessing food, water and work” since being moved between 2009 and 2011, the report said.

Vale, based in Rio De Janeiro, and Rio Tinto, based in London, have invested nearly $10 billion in mines in Tete, home to an estimated 23 billion tons of coal, some of the world’s biggest untapped reserves.

Meanwhile, the Rocky Mountain Institute had a two-part blog post (see here and here) about it’s possible to move toward a future with mostly renewable power. They conclude:

High renewables scenarios are no longer about if we can, but rather about if we will. “It’s not that problems [posed by skeptics] aren’t real or challenging,” says RMI’s James Newcomb, “but more about using the tools we already have in hand—advanced grid technologies, new business models, and competitive market designs—to craft workable solutions.”

It is time to put away the skepticism, role up our sleeves, and wrestle with the real but very solvable challenges we face in getting to the high renewables future that’s rapidly becoming today’s reality.

Finally, while you’re enjoying time with family and friends during this three-day weekend, take time out to read some of ProPublica’s suggested reading about how we treat the veterans who have served our country.