Thursday roundup, July 3, 2014

July 3, 2014 by Ken Ward Jr.

Climate Rules Arkansas

In this   June 2, 2014, file photo, a coal train stops near White Bluff power plant near Redfield, Ark. The Arkansas Department of Environmental Quality and state Public Service Commission called a meeting Wednesday, June 25, 2014, to discuss coming rules being imposed by the U.S. Environmental Protection Agency. (AP Photo/Danny Johnston, File)

Earlier this week, Jim Efstathiou Jr. and Mario Parker at Bloomberg produced an important story headlined Vanishing coal jobs weigh on U.S.-backed pension plans, in which they report:

After mining coal for almost 40 years, Robert Schultz hoped his pension would let him and his wife spend more time at the beach in retirement.

Then Schultz, a fifth-generation coal miner who retired about six years ago, got a letter from the U.S. Labor Department telling him that his pension was in financial trouble and benefits may need to be cut.

“We’re talking about people not getting what they need,” said Schultz, 61, of Boone County, West Virginia.

A surge in overseas demand that has raised coal’s outlook in the short run hasn’t stemmed long-run job losses, which could worsen with proposed U.S. limits on power-plant emissions. Competition from non-union operators has made matters worse, cutting employer contributions to the main pension plan for union miners and drawing a “seriously endangered” rating from pension regulators, raising the prospect of a government rescue.

The United Mine Workers of America plan, along with the fund for the International Brotherhood of Teamsters, dominate the pool of underfunded plans. Should either fail, the Pension Benefit Guaranty Corp., the government-run agency that backs employee pension plans, may be forced to step in, according to Randy Defrehn, executive director of the National Coordinating Committee of Multiemployer Plans, a group that advocates for pension operators.

“At that point you’d have several hundred thousand pensioners whose benefits just go away and I can’t imagine that they won’t be knocking at Congress’s door,” Defrehn said. Congress is already reviewing legislation to help pension plans.

We’ve reported on these issues before here and here, but this Bloomberg piece has some pretty interesting details. For example:

The pension plan for union miners had about $5.8 billion in liabilities in 2012 and was only 71.2 percent funded at the end of 2013, according to Labor Department filings  … “Instead of there being hundreds or thousands of contributing employers, they’re down to a handful now,” Defrehn, a former administrator at the coal miners’ pension, said in an interview. “That means that this plan is not in great shape…It sounds like the last nails are about to be hammered into the coffin.” 

Another Bloomberg piece, by the way, makes the point that EPA doesn’t kill coal jobs, better mining does:

The U.S. has lost more coal jobs since 1978 than it has today, and climate policy isn’t the reason. There wasn’t any. Coal companies are in the business of producing coal, not jobs. Between 1978, when the U.S. Mine Safety and Health Administration started collecting data, and 2013, the U.S. shed more than 132,000 coal jobs, or nearly 52 percent of its workforce, according to MSHA data.

In the same period, U.S. coal production jumped almost 47 percent, to about 984 million short tons last year, 16 percent below its 2008 peak.

Patch Town Days

Alex Neyhart, 8, left, and his twin brother Paul pick through coal while portraying breaker boys during the annual Patch Town Days celebration held at the Eckley Miner’s Village in Eckley, Pa., Saturday, June 21, 2014. (AP Photo/Hazelton Standard-Speaker, Ellen F. O’Connell)

Meanwhile, this piece in The New York Times had some interesting discussion about U.S. efforts to fight climate change, and their relationship to whether China will likewise move to limit carbon dioxide emissions:

Today, the crucial question remains the same: how to meaningfully bring aboard countries like China or India. The debate appears stuck in more or less the same place, with countries arguing over who is responsible for what. How much of the burden should be shouldered by rich countries — which grew rich while spewing carbon into the air in past decades? How much by the fast-growing developing countries — where emissions are growing fastest? Who is to blame for the carbon emitted in making the latest gadget, the developing country that made it or the developed country that bought it?

The latest report from the United Nations Intergovernmental Panel on Climate Change, issued in April, suggested several ways to allot responsibilities. If one starts counting in the 18th century and counts only emissions from industry and energy generation, the United States is responsible for more than a quarter of all greenhouse gases that humanity has put into the air. China, by contrast, is responsible for 10 percent.

But if one starts counting in 1990, when the world first became aware that CO2 was a problem, and includes greenhouse gases emitted from changes in land use, the United States is responsible for only 18 percent, and China’s share rises to 15 percent. Rich and poor countries, unsurprisingly, disagree on the proper measure.

… The United States pledged then that greenhouse gas emissions in 2020 would be 17 percent lower than in 2005, which, compared with the business-as-usual path, amounts to a reduction of one billion tons. Trevor Houser, who heads the energy practice at the Rhodium Group, an economic modeling firm, calculates that this American commitment was crucial in unlocking commitments by other countries worth two billion to five billion tons.

“This is not a bad leverage ratio,” he said. “So we know that U.S. leadership elicits reciprocal action from other countries.”

This may be a useful precedent for future negotiations. After all, countries cannot really commit to cutting carbon emissions in the way that they commit to cut tariff barriers on trade. Forcing legally binding tariffs might discourage countries from shooting for ambitious goals. Public voluntary commitments that are attached to a rigorous and transparent monitoring process could be more effective.

American officials are confident that offering unilateral emissions cuts can persuade the Chinese to offer real commitments that might have a chance to keep global temperatures in check.

But the incentive goes only so far. For China, the existential question remains whether it can simultaneously decarbonize and grow. If it cannot do both things at once, chances are it will choose the second.

Underground Mines Maps

In this June 19, 2014 photo provided by Robert Gibson, shows Robert Gibson, the emergency section supervisor at the DNR’s Department of Mines and Minerals, looking at maps of old coal mines at Southern Illinois University Edwardsville, in Edwardsville, Ill., that are being digitized and  by the state. Mine maps marked the locations of rooms, pillars and shafts _ necessary then and a valuable tool for state officials, homeowners and developers today because of the damage current structures can sustain if an abandoned mine begins to collapse or sag. But the DNR only has about 2,000 maps for the more than 4,000 separate mines that operated in the state, Gibson said. The state is digitizing those in its archives before they deteriorate, but also is searching for as many missing maps as possible. (AP Photo/Courtesy of Robert Gibson,Darlene Barker

Meanwhile, in Colorado’s coal country, Inside Climate News reports:

A federal judge has blocked a coal project in the wilds of Colorado because federal agencies failed to consider the future global-warming damages from burning fossil fuels.

U.S. District Court Judge R. Brooke Johnson’s decision halts exploration proposed by Arch Coal that would have bulldozed six miles of roads on 1,700 untrammeled acres of public land.

When the agencies touted the supposed economic benefits of expanded coal mining in the Sunset Roadless Area, Johnson ruled, they should also have considered any global-warming costs.

The decision was a significant judicial endorsement of a policy tool known as the “social cost of carbon,” which economists and climate scientist use to put a price in today’s dollars on the damages from drought, flood, storm, fire, disease and so forth caused by future global warming due to our emissions from burning fossil fuels.

“It is arbitrary to offer detailed projections of a project’s upside while omitting a feasible projection of the project’s costs,” Johnson decreed.

Meanwhile, in Kentucky:

… Beyond the campaign rhetoric, even here in Kentucky, which ranks No. 1 in the nation in carbon emissions per unit of electricity produced from all sources, others more quietly are saying that doom may not be at hand. In drafting its regulation, the Environmental Protection Agency listened to energy-rich states like Kentucky and offered wide flexibility to meet its requirement, the most aggressive federal effort yet to address climate change. Despite cries of a “war on coal” that echo through mining country in eastern Kentucky, the region is already taking hardheaded steps toward a post-coal economy.

John Lyons, Kentucky’s assistant secretary for climate policy, is cautiously optimistic that the carbon limits will not raise electric prices sharply enough to drive out manufacturers, who set up in the state for rates that are among the lowest in the country.

“I think our electric prices are going to go up, regardless of what’s done with this rule,” he said.

Representative John Yarmuth, a Democrat from Louisville, said Kentucky had already been moving toward a future less reliant on coal because of competition from cheaper, cleaner natural gas.

“If you add all the numbers up, we can probably comply with the terms of the rulewith very little impact, if any, because everybody’s heading in that direction to begin with,” he said. “Anybody who’s actually looked at the subject understands coal is going to play a dramatically reduced role in our nation’s energy portfolio.”

In drafting its regulation, the E.P.A. endorsed a 23-page “white paper” that Kentucky’s energy department sent last year asking that states be given wide flexibility in reducing carbon. Rather than regulate emissions from every smokestack, the E.P.A. is giving states an overall target to meet — in Kentucky’s case, a reduction of 18 percent of carbon pollution by 2030. The target is lower than for many states, taking into account Kentucky’s heavy coal habit, which accounts for 93 percent of its electricity.

The state has great flexibility in devising a plan to reach the goal. It can include switching plants from coal to natural gas, developing renewable energy like solar, and encouraging the use of efficient home appliances and insulation to reduce demand. And none of it will happen immediately: Any shutdowns are years away, as the E.P.A.’s proposal faces a political and legal onslaught.

Columnist Al Cross commented:

Twenty years from now, Democrat Alison Lundergan Grimes and Republican Sen. Mitch McConnell will probably look silly and shortsighted. Kentucky’s major candidates for the U.S. Senate are competing to see which one can bury themselves more deeply in coal, a fuel that helped make America a world power but is now changing the world’s climate and harming human health.

The political rhetoric, tactics and strategy of the Senate race obscure the long-term challenge: What is Kentucky to do about its eastern coalfield, a poor region that has already lost many of its best-paying jobs and is becoming a greater burden to the rest of the commonwealth?

Some national observers say the war on coal should end like the war on tobacco, with the losers being compensated by the taxpayers. Obama suggested as much in his agenda-setting climate speech at Georgetown University almost a year ago: “We’re going to need to give special care to people and communities that are unsettled by this transition.”

But doing that for coal communities will be more complex and expensive than it was for tobacco farmers. When Congress repealed tobacco production limits and price supports in 2004, farmers were paid for their quotas, and most who wanted to keep farming had viable options. Many were lucky that the next decade was the best ever for the cattle market, and that Kentucky used money from the national settlement with cigarette makers to diversify its agriculture.

Transition for the Eastern Kentucky Coalfield has long been needed, but has become more urgent in the last five years with the advent of cheap natural gas and Obama’s air- and water-pollution policies. The region’s transition will require a lot more money than tobacco’s, and a combination of public and private investment to create a more diversified and vibrant economy.

Democratic Gov. Steve Beshear and Republican 5th District Rep. Hal Rogers are trying to figure that out, with their Shaping Our Appalachian Region effort. As SOAR solicits the views of citizens in public meetings this summer, it should hear from McConnell and Grimes — not about how much they despise Obama’s plan, but about adapting to the future. Kentucky has been on the wrong side of history too often. Let’s not do it again.

Meanwhile, also in Kentucky:

In a decision with potentially far-reaching impact, a federal judge has ruled the state improperly issued a surface-mining permit to a coal company that did not get permission to mine from some owners.

The issue in the case was whether coal companies have to get permission for surface mining from all landowners when individuals share ownership with companies and the surface and mineral rights had been severed, which is not unusual in Eastern Kentucky.

State and federal regulators had long taken the position that any surface owner — even one with a 1 percent interest — could give permission for a coal company to mine.

That position is incorrect, however, U.S. District Judge Amul R. Thapar said in a decision issued Friday.

The federal surface mining law says a coal company has to get consent to mine from all surface owners, Thapar ruled.

“The consent of ‘a’ surface owner does not suffice,” Thapar wrote.

Lexington attorney Joe F. Childers, who represented five people challenging the permit, said the ruling has national implications.

It was the first time a federal judge has addressed the issue, he said.

“This is an order that upsets 32 years of erroneous interpretation of the federal surface mining act” by state and federal regulators, said Childers, who handled the case with Mary Varson Cromer of the Appalachian Citizens’ Law Center in Whitesburg. “It’s a very significant opinion.”

Read more here:

Finally, the Daily Yonder had this to say about a recent New York Times Magazine piece by Annie Lowery called “What’s the Matter with Eastern Kentucky“:

Lowery complains of the “trillions of dollars spent to improve the state of the poor in the United States and promote development.” But when we spend that money in cities, apparently, it’s an investment. More than a few public dollars have flowed into Detroit in the last generation to relieve poverty and rebuild infrastructure. But there’s still plenty of poor people there.

Lowery’s facts about Eastern Kentucky aren’t wrong. For a lot of people, it’s a tough place to live. Millions of rural Appalachians have done just what she suggests – packed up and moved. Many went to Detroit, as a matter of fact. And we’re willing to bet the people now leaving that city include plenty of Appalachian descendants.

But I find her conclusion smug. She has cleverly figured out where to move the human pieces on the map. It is as if East Kentuckians were not living, breathing beings capable of acting in their own behalf.

I’d love a good discussion about poverty  – both rural and urban. And one about public policy and how to move forward together as a nation.

But remember, while we’re having this discussion, rural folks are standing right here. You know we can hear you, right?


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