Coal Tattoo

Monday roundup, Dec. 2, 2013

Russia Sochi Torch Relay

In this photo provided by local residents gather to welcome torch bearers with Olympic flame at the Kedrovsky coal mine in Kemerovo region, west Siberia, Russia, Friday, Nov. 29, 2013.  The 65,000-kilometer (39,000 mile) Sochi torch relay, which started on Oct. 7, is the longest in Olympic history. The torch has traveled to the North Pole on a Russian nuclear-powered icebreaker and has even been flown into space. (AP Photo/

As I catch up on the news after taking a few days off, the Wall Street Journal story, “Coal’s Decline Hits Hardest in the Mines of Kentucky” stands out as one that a lot of folks were paying attention to and talking about. Reporters Kris Maher and Tom McGinty write:

Since he was laid off from his mining job in January, William Hensley’s life has been upended.

Days after he lost his position, Mr. Hensley, 50 years old, said he was diagnosed with black lung disease. The bank soon took back his 2012 Chevy Suburban, after he was unable to make the $600 monthly payments. He can no longer afford health insurance and has drawn down all but $5,000 he had in a 401(k) retirement plan to pay for another vehicle and living expenses.

Mr. Hensley, who is raising his 12-year-old granddaughter with his wife, went from making $82,000 a year as an underground foreman to collecting about $15,000 in unemployment benefits this year. But that aid is set to run out in December and mining jobs are scarce.

“This is the worst I’ve ever seen it,” said Mr. Hensley, who has spent 32 years of his life mining coal.

Unprecedented pressures on the U.S. coal industry and nearly two years of mine closures and layoffs are reshaping the heart of the Central Appalachian coalfields in ways that many experts believe could be permanent.

While the coal industry overall is losing market share to abundant natural gas, mines in Central Appalachia have become increasingly uneconomical. Natural gas is cheaper, and so is coal mined in two other big coal basins centered in Wyoming and Illinois.

This is a story we know well by now. But it also has some interesting new stuff, including this:

A Wall Street Journal analysis of Mine Safety and Health Administration data reveals that the picture is bleakest across a swath of 26 counties in Kentucky’s eastern coalfields, where coal has been the lifeblood for more than a century.

The number of coal-mining and related jobs in the region remained fairly steady between 2000 through 2011, fluctuating from one quarter to the next by an average of about 400 jobs, but never dipping below 11,400. Since 2011, the area has seen an unrelenting decline that left eastern Kentucky with just 8,000 mining jobs in the second quarter of this year. State officials say there are now fewer miners working in Kentucky than any other time in records dating to the 1920s—a decline largely driven by the eastern slice of the state.

Good for Kris and Tom for using the much more helpful data, which most local media here — and certainly local political leaders and government agencies in West Virginia — refuse for some reason to recognize as a better source for tracking both the short-term and long-term changes in mining jobs, coal production and other such things.

Unlike some other recent national stories, the Journal piece does a reasonable job of explaining that there are a collection of complex factors at play in the Appalachian coal decline, and of pointing out that many experts don’t see this decline as reversing itself. And it also quotes Alpha Natural Resources CEO Kevin Crutchfield making a pretty valid point about discussions of how to diversify the region’s economy:

Alpha, the nation’s third-largest coal operator by production and the biggest in Central Appalachia, has laid off 594 workers at Kentucky mines and related coal facilities since January 2012. It now operates 10 underground mines in the state, down from 23 underground and six surface mines in 2011. It also shut four facilities that process coal.

“It’s devastating, to say the least,” Mr. Crutchfield said. He said he has had discussions with elected officials about helping to diversify the region’s economy.

We’ve got to start thinking about this longer-term,” he said, but added, “diversifying the economy, while it sounds good, is not going to help these folks immediately.”

And that’s where the story shows a common weakness, when both national and local media are covering this issue. There is little evidence here that the Journal sought to hold local business and political leaders accountable for not following the many warnings over many years about the need to move beyond a coal-only economy. They do point out that Kentucky leaders have in recent months moved to start talking more about diversification, but the story doesn’t put those folks on the spot for waiting so long. At the same time, the story paints coal in a bit of a one-sided way, describing its long-time economic importance to the region without also mentioning black lung, mining deaths, coal-slurry pollution, or coal’s role in climate change. To really explain coal to readers requires a much broader discussion. Perhaps its unfair to expect that out of every newspaper story. Still, there’s always room for a little more context in these kinds of stories.

Pakistan Daily Life

Following her daily work with her parents at a brick factory, Pakistani Nagina Mohammed, 7, walks back to her home carrying coal over her head, that she collected to be used for heating and cooking, on the outskirts of Islamabad, Pakistan, Thursday, Nov. 21, 2013. (AP Photo/Muhammed Muheisen)

And if you think Appalachian political leaders have really caught on to what’s happening to their region’s coal industry, then you need to take a look at the silly op-ed in today’s Daily Mail by West Virginia state Sen. Mike Green, a Raleigh County Democrat who serves on the Energy, Industry, and Mining Committee. It’s a typical rant about how terrible it is that the government is helping to develop a wind energy industry while, gosh, the coal industry can’t get any government assistance at all:

During a time when the federal government has sequestered the American public, bailed out the big boys and thrown the working class off a fiscal cliff, our government continues to support unnecessary subsidies and projects that West Virginia taxpayers can’t afford.

One particular project, the wind Production Tax Credit, has already cost taxpayers $12 billion dollars this year and it will continue to put our energy industries in jeopardy unless Congress allows it to expire at the end of 2013, as planned.

The wind Production Tax Credit is collecting massive subsidies while coal plants are closing and the government is struggling to stay open and pay its own bills.

The op-ed continues:

Right now, if our West Virginia energy industries tried to subsidize costs on the American taxpayer’s dime before a new up-to-standard coal fired power plant was online the administration and EPA wouldn’t stand for it …

The EPA’s regulatory agenda has made coal’s long-term future in West Virginia uncertain. The approach to diversifying American energy should include all of our domestic resources. It should be fair, affordable, innovative, and competitive. It should create jobs, not take them away. Renewables may play a larger part in producing electricity down the road but until that time comes, the government should stop picking energy winners and losers and end these costly wind subsidies West Virginia taxpayers can’t afford.

The PTC should have ended the first time in 1999.  It should have ended any number of times that it came before Congress over the last fourteen years.  For the sake of West Virginia, it must end in 2013.

This is full of such worn-out arguments that it’s hard to know where to start. But remember that we’ve written before about the massive subsidies that coal and other fossil fuels receive from the government. And let’s not forget about all of the many hidden costs in illnesses and premature deaths from fossil fuel pollution.  Of course, government subsidies for renewable power are at an all-time low for developing forms of energy. And really, what coal wants now is billions more in subsidies aimed at trying to make the industry competitive in a carbon-constrained world.

You really do have to wonder, though, if Sen. Green — given his grave concerns about using government subsidies to “pick winners and losers” in the energy market — will propose next month that West Virginia lawmakers do away with the state’s costly tax credit for thin-seam coal mining

And don’ t think that just because Kentucky officials are hosting a summit about diversifying coalfield communities that they’re all on board with the Obama administration’s plans for dealing with global warming.  As the Lexington Herald-Leader reports:

Weatherizing homes and using more renewable energy could be part of Kentucky’s program to lower carbon-dioxide pollution, but the model the state favors also would preserve a role for coal in electricity production.

That’s an important consideration because Kentucky gets more than 90 percent of its electricity from power plants that burn coal.

The U.S. Environmental Protection Agency is studying limits on carbon-dioxide emissions from existing power plants.

The concern among many Kentucky officials is that the EPA will propose limits that the state’s utilities could not meet at their current coal-fired units, requiring them to make costly changes that could drive up the price of electricity.

Also, the Herald-Leader explained in an editorial, there was this proposal:

Rep. Jim Gooch is known for introducing bills that have no chance of becoming law but that make a “statement.”

Gooch’s statements bear more than passing notice because he is chairman of the House Natural Resources and Environment Committee. That gives him considerable sway over the well-being of Kentuckians, not to mention oversight of the state’s environmental, energy and mine safety programs.

Gooch’s latest statement — made via a bill he prefiled Nov. 19 — has a familiar ring: He is proposing yet another way that average Kentuckians would subsidize the coal industry.

His bill would require retail electric suppliers to maintain a 30-day supply of fuel at generating centers.

The point seems to be to give coal a monopoly by blocking the use of natural gas, which isn’t stored but is transported by pipeline.

The bill is ridiculous on many levels, not least of which is that Kentucky could expect summer brownouts and blackouts without natural gas peaking plants.

The editorial continues:

Clearly, Gooch and the coal caucus are struggling with market realities. They have long assumed that coal would always be the cheapest fuel for making electricity, but that is no longer true, thanks to the proliferation of cheap natural gas.

But the legislature can’t micromanage industries. And a law dictating utilities’ fuel choices would raise electricity rates for all, including businesses that employ more people than the coal industry does … Kentuckians care about the thousands of miners who are out of work. But trying to carry the coal industry on the backs of electricity consumers is no solution.

An op-ed commentary, also published by the Herald-Leader in response to a previous story, takes the broader approach, explaining how Eastern Kentucky has suffered in the name of cheap energy:

During the 1990s, coal was extracted at double its current rate, ranging from 10 million to 11 million metric tons per year from Martin County alone. We conservatively estimate that Martin County produced $3 billion of coal value for the decade of 1990s.

Even after the October 2000 coal impoundment disaster, which released millions of gallons of coal slurry into the county’s waterways, coal production remained steady at 11 million metric tons in 2000.

In this context, the $1 million fine that the state imposed on the responsible corporation, Martin County Coal (Massey Energy), was less than pocket change. But even this small corporate fine was ultimately claimed by the state’s General Fund, rather than being returned to Martin County for environmental compensation.

Likewise, the tax on severed coal is mostly siphoned into the state’s General Fund and what returns to the county is not adequate to meet the pressing needs of Eastern Kentucky or to fund its economic development future beyond coal … 

… The point is that very little of the energy value extracted from Martin County returns home. That must change. Once the coal is gone, the county and the region are left with degraded landscapes, lost biodiversity, destroyed streams, tainted drinking water, increased flood risk due to strip mining and mountaintop removal, a host of health problems, and, thus, a shattered foundation from which to build their futures.

Thus far, the livelihood, safety and health of Martin County have been sacrificed for cheap energy for the rest of the nation. Even state government was unwilling to fund state-mandated emergency preparedness plans for coal waste impoundments in the event of another impoundment breakthrough. That was so despite the fact that Martin County citizens and others spent years lobbying the state legislature to impose such protections … 

The oft-repeated story of Appalachia as a dependent region with a dependent people ignores the fact that the rest of the state and nation is overly dependent on this region to meet its cheap energy demands. Far more wealth has been pumped out of the region than has been transferred back via government transfer payments.

We need to work toward a better future for Eastern Kentucky, one that does not rely solely on coal. Some respect for the region that has subsidized the nation’s industrial development and comfortable lifestyles would assist in this effort. So would a larger portion of the money that has been subsidizing the state and nation all these decades.

But, equally important, we must think and work outside the boxes in which we have been trapped for so long. We cannot keep trotting out tired stereotypes about dependency and indolence, for one thing. And we can’t keep expecting the same “leaders” who have benefited from this system to change it.

In other news while I was out —

— The Inter-Mountain had an interesting story about taxes from a new coal mine in the area:

The Randolph County Commission likely will lose about $53,000 from its 2013 budget because of a tax exoneration involving the Carter Roag Coal Company.

The firm’s coal mine, which straddles the Randolph-Upshur county line, misreported information on their 2012 tax filings, Randolph County Assessor Phyllis Yokum said.

“They never realized they had to do a return for Randolph County and a return for Upshur County,” Yokum said. “Upshur County was concerned because they were not getting any money from the coal mine, as I would be if I were in the same boat.”

— The St. Louis Post-Dispatch reported on the delay of new pollution controls for Illinois coal mines:

Ameren Corp.’s plan to shed its aging Illinois coal fleet advanced Thursday when regulators said the buyer, Dynegy Inc., could defer the installation of multimillion-dollar pollution controls for five years.

The Illinois Pollution Control Board approved the environmental variance by a 3-1 vote. In a 107-page order, the board said requiring Dynegy to comply with emissions limits that were agreed to years earlier by Ameren would “impose an arbitrary and unreasonable hardship.”

The board also relied on an opinion from the Illinois Environmental Protection Agency, which determined that the variance would yield a net reduction in emissions and have “no significant negative impact on the environment or health.”

The closely watched case provides a lifeline for Ameren’s coal-fired power plants. Ameren had said that approval of the variance was a condition for completing the transaction with Dynegy, at least as structured.

 — SNL Financial reported on some new coal bankruptcies:

Six coal mining companies of eastern Kentucky coal operator Benjamin Bennett and his family filed for Chapter 7 bankruptcy protection, according to U.S. Bankruptcy Court for the Eastern District of Kentucky court documents filed Nov. 22.

Manalapan Mining Co. Inc., Left Fork Mining Co. Inc., Cloverfork Mining & Excavating Inc., Cumberland River Energies LLC, B & S Trucking Corp. and Bennett Resources LLC all filed to liquidate in bankruptcy court. Manalapan, Left Fork and Cloverfork are listed in U.S. Mine Safety and Health Administration data as operators of Kentucky mines controlled by Bennett.

— Finally, the group Climate Ground Zero is reporting that activist Mike Roselle remains in jail here in West Virginia after a Thanksgiving Day protest in which he left a jar of dust from a mountaintop removal operation on the porch of the Governor’s Mansion. The website of the Regional Jail Authority shows Roselle is being held at the South Central Regional Jail on $20,000 bail after being charged with trespassing and disorderly conduct. Roselle apparently wanted Gov. Earl Ray Tomblin to have the dust tested, citing concerns raised by numerous peer-reviewed studies that show residents near mountaintop removal operations face increased risk of serious illness and premature death.