Photo by David Kameras, UMWA
When the word came down from St. Louis earlier this week that a federal bankruptcy judge had approved Patriot Coal’s plan to dump its union contract and its retiree health-care plan, the reaction from the United Mine Workers was about what you would expect.
Members of the United Mine Workers of America take part in a protest outside the of headquarters of Peabody Energy, one of the companies the union accuses of orchestrating business deals that bankrupted Patriot Coal, Wednesday, Feb. 13, 2013, in St. Louis. (AP Photo/Jeff Roberson)
But as I read and re-read Judge Surratt-States’ decision in the Patriot case, I couldn’t help but notice key parts of it that point to broader issues facing coalfield communities in Southern West Virginia and the rest of Appalachia. The judge describes well the challenges Patriot Coal faces, even if it emerges from bankruptcy. She notes, for example, that optimistic projections for coal’s fight with natural gas for market share probably aren’t very realistic:
During the five-day hearing on the 1113/1114 Motion, much ado was made about the correlation between natural gas prices and coal prices. The record demonstrates that while spot prices for natural gas have increased, the long-term futures prices for natural gas have declined, which tends to show that natural gas will continue to be an economical alternative to coal over the coming years.
And while the judge doesn’t really get into one of the other major hurdles facing Central Appalachian coal — that of basic geology (see here and here) — a careful reading of the decision leads to inescapable conclusions about the long-term viability of an Appalachian coal industry that is forced to take the full costs of the coal’s life-cycle impacts on workers and the environment into account.
Take, for example, what the judge had to say about Patriot’s environmental liabilities, and the company’s decision last year that it would abandon mountaintop removal to focus on large-scale underground mining (which uses more workers and is, by the way, more likely to be unionized):
Debtors have incurred hundreds of millions of dollars in costs to comply with new laws and regulations, and will continue to incur significant compliance costs in the future. This is particularly exemplified by the heightened, albeit long-overdue, water quality requirements which consequently involve increased environmental compliance before mining permits are issued. Like other coal mine operators, Debtors must now install costly water-treatment facilities at certain of their mining complexes which will likely cost hundreds of millions of dollars over the next several years to comply with these and other environmental obligations. Mining permits have also been conditioned on Debtors’ ability to maintain certain conductivity levels which reflect levels of salt, sulfides and other chemical constituents present in water. While these means justify the ends, it is worth noting that these means will nonetheless affect Debtors’ financial situation.
And, as the judge makes clear, it’s not just about making sure environmental costs aren’t externalized. It’s about protecting workers as well:
Other long overdue regulatory obligations that will negatively affect Debtors’ bottom-line include the required use of self-contained self-rescuers. In the event of an emergency, these rescuers will provide underground miners with breathable air. Debtors are also required to install refuge shelters in underground coal mines which are intended to enable underground miners to reequip, communicate, and/or wait for help. Debtors must also increase the use of “rock dust” (or the like) in underground mines which can help to prevent coal dust explosions. Debtors’ compliance with all of the above, while reasonably predictable over the course of the past few years, have affected Debtors’ viability.
There’s simply no question that coal miners have had to wage a century-long fight to make their jobs safer, and even today they face the threat of coal-dust explosions, terrible fires, one-by-one deaths from roof falls and the like, and the still often-hidden scourge of black lung disease. But coalfield citizens have also fought for decades to reduce the impacts of strip-mining upon the land and people, a campaign that continues today as the science continues to point to serious health impacts from mountaintop removal. And of course, the biggest problem of all is coal’s contributions to climate change, a crisis that coalfield leaders simply refuse to acknowledge.
In many ways, the story of coal in West Virginia is a history of trying to hold the industry accountable. Sure, generations of West Virginians have earned their livings, put food on the table, and sent their kids to college with paychecks earned toiling away in the mines. And many communities around the state rely on the industry to support vital local services, like schools and roads. But West Virginians have also spent decades trying to make coal pay its fair share, to see that the wealth buried in our mountains is shared in some small way with our communities. These efforts continue today, by those who are pushing for a “Future Fund” to help transform and diversify our economy and those who want to hold large land-holding companies responsible for the messes mining on their property leaves behind.
Citizen groups who are working on coal issues and coal miners who are fighting for fairness at Patriot Coal have more in common that they realize. After all, what is the UMWA’s campaign to protect its pensions, health-care benefits and decent working conditions if not an effort to force Patriot to share the wealth with its workers, to make coal pay its fair share to its workers and retirees?
Likewise, the folks running Patriot Coal have more in common with these groups than they realize or would ever want to admit. Patriot and the UMWA, for example, share an interest in trying to trace the pension and health-care liability back to Peabody Energy, to force that coal giant to live up to its promises and shoulder its own liabilities. And Patriot CEO Ben Hatfield, in one of the more remarkable scenes I’ve witnessed in more than two decades covering coal, acknowledged the negative impacts of large-scale surface mining on communities like the one where he grew up:
Patriot Coal has concluded that the continuation or expansion of surface mining, particularly large scale surface mining of the type common in central Appalachia, is not in its long term interests … Patriot Coal recognizes that our mining operations impact the communities in which we operate in significant ways, and we are committed to maximizing the benefits of this agreement for our stakeholders, including our employees and neighbors. We believe the proposed settlement will result in a reduction of our environmental footprint.
In making that announcement, Patriot Coal was facing facts, confronting the changing — and shrinking — coal industry that is likely to exist in Southern West Virginia and Eastern Kentucky in the coming years. As Downstream Strategies recently reported, it may not be all bad news. Even as production shrinks, declining productivity may allow some communities here to see more jobs. But many others will undoubtedly see layoffs of the sort that have become common over the last two years. And as Downstream Strategies also said, their latest findings only emphasize again the urgent need for the region’s leaders to focus on diversification, on preparing our education, infrastructure and economic development systems for a transition that, regardless of what happens with coal jobs, with make it a better place for everyone:
… With the future uncertainty of markets for CAPP coal and visible shifts in demand toward coal from other basins and fuels such as natural gas (and to a smaller extent, renewable energy), the possibility of increasing coal jobs with decreasing coal production should not prevent policymakers from laying the foundation for new economic opportunities in the communities most vulnerable to declines in coal production.
The future is going to put even more pressures on all of coal’s stakeholders, on workers, environmental protection, workplace safety, and even state and local governments trying to balance their budgets. It’s even more important going forward for folks to find ways to work together, rather than be split apart by false campaigns about the “war on coal.”
Unfortunately, even as the Patriot Coal ruling was making all of this even more clear, we’ve seen multiple examples again this week of West Virginia leaders who simply refuse to admit — let alone embrace — the future.
First, there was Mike Albert, a longtime utility company lawyer who is now chairman of the West Virginia Public Service Commission. Faced with a broad coalition of consumer advocates, senior citizens and clean-energy advocates who oppose the transfer of FirstEnergy’s coal-fired Harrison Power Station to subsidiary Monongahela Power, Chairman Albert talked like he was still representing the utility company, criticizing average citizens who took the trouble to get involved in their government (see here and here).
The Commissioners, particularly the chairman, are in the role of judges here, and should take that role seriously. Mr. Albert, as Ward points out, has a history of working for power companies as an attorney, in particular Allegheny Energy, the predecessor of FirstEnergy in WV. One would think that a lawyer with this fact in his background would exercise some self control. Apparently not.
Mr. Albert would do well to look at the common sense approach taken by the Northwest Power and Conservation Council which manages the electrical system in the Pacific Northwest. The NPCC has been placing investment in energy efficiency at the top of its consideration of electricity capacity for the last 30 years … it appears that Mr. Albert should stop cracking wise about WV citizens and start trying to catch up to the common sense policies that have been in place in other states for the past thirty years.
Or, take yesterday’s climate change forum up in Fairmont (detailed here by the AP’s Vicki Smith), an event designed to leave the impression that scientists are still split on whether the world is warming or, even if it is, if human activity like burning coal is to blame. GOP Rep. David McKinley, who arranged the forum, got to pretend that bringing together actual scientists and industry-backed climate change deniers would somehow produce some common ground. Instead, we were treated to ridiculous comments like this one from former Senate aide Marc Morano:
We must have the courage to do nothing when it comes to regulating CO2 emissions.
West Virginia absolutely needs to be talking about global warming. But events that only further the notion — promoted constantly by the coal industry and its political supporters — that the science isn’t clear on the issue don’t get us anywhere.
Finally, we had the scene last night on MSNBC’s show “All In,” which featured an interview with Sen. Joe Manchin, D-W.Va., about the Patriot Coal ruling. Sen. Manchin criticized the judge’s decision, and promised to explore options for reforming the bankruptcy laws to provide workers more protections. But then host Chris Hayes hit the senator with a great question:
Let me ask you this, senator, quickly and this is a hard question. Your state has been dependent on coal for a long time, and coal is having a really rough time in the marketplace right now. It’s getting pounded by natural gas. is the state of West Virginia prepared for a future after coal?
How did Sen. Manchin respond? Here’s what he said:
Let me just say this, Chris. First of all, not West Virginia, this country has depended on the coal produced by the coal miners of West Virginia for a long time. the coal miners of West Virginia, people should say a prayer every night for a coal miner in West Virginia. They gave them the energy, the country, the freedom that helped win the war. Coal has been the staple that we’ve had. It’s domestic, it’s here in our own country. We’ve been working our tails off for many, many, many years. and the thing about it is we can do it and we have the technology to use it even cleaner. EIA, which is a division of the department of energy, says that coal is going to be 35 percent of the energy mix through 2040. We need to have more of our technology and more research done in sequestering and super-critical heating and things we can do and use our coal resources much cleaner. We need to be independent of foreign oil and coal is part of it, but right now it’s being because of market conditions, Chris, I understand that, we’ve always been able to go through the highs and lows of the markets.
Is it me, or did Sen. Manchin not really answer the question? Chris Hayes didn’t seem to think so. As he closed the segment, he told the senator:
But right now, I think, it’s facing possibly a decline and could be transformative for the people of your state.