Coal Tattoo

Alpha update: Massey operations slow to improve

Alpha Natural Resources officials just wrapped up a conference call discussing their first earnings report containing a full quarter of results following the takeover of Massey Energy. Here are a few highlights:

— So far, Alpha hasn’t been able to achieve any major reductions in overall safety violations at former Massey operations, though officials said that the number of more serious “D orders” has dropped since Alpha acquired the properties in June.

“That’s going to take some time,” said Alpha CEO Kevin Crutchfield. “You can’t turn this thing on a dime.”

— While the coal industry continues to complain about EPA’s crackdown on mountaintop removal permits, Alpha officials say they’re in good shape with permits to run through 2012.

“We fell pretty good about what we have permitted so far,” Crutchfield said.  “There’s nothing in 2012 that is contingent upon any sort of regulatory relaxation or need.”

(Those comments are especially interesting, given the ongoing litigation over the Highland Reylas permit that Alpha inherited from Massey)

— The push for more natural gas drilling — by the industry and by the Obama administration — is going to put a ceiling on coal prices, especially in the east, Alpha believes.

“Clearly, the current administration through their regulatory approach is focused on picking winners and losers, and they certainly don’t want coal to win,” Crutchfield said.

— Alpha is continuing to evaluate the former Massey properties, and to make decisions regarding which — if any — it might put on the market because they don’t fit with Alpha’s priorities.

In the wake of a speech yesterday in which U.S. Rep. George Miller questioned the commitment of Alpha Natural Resources to ending Massey Energy’s questionable safety practices, Alpha officials are saying this morning that their integration of Massey operations into Alpha is going well. Alpha CEO Kevin Crutchfield explained it this way:

We have completed ‘Running Right’ training for the entire hourly workforce at all legacy Massey operations, and we have begun a training program directed at supervisory personnel. The benefits are already becoming clear: incident rates at the legacy Massey operations are declining; employee feedback is overwhelmingly positive; and the annualized voluntary turnover rate for legacy Massey declined to single digits in the month of September, down from more than 20 percent earlier in the year. At Alpha, we understand that having an empowered workforce working together within the ‘Running Right’ culture is inextricably linked to our ability to operate safely, maintain strong employee morale, minimize turnover, and thereby deliver operational excellence.

The integration of the legacy Massey operations remains on track, and over time we anticipate continued improvement in safety performance, enhanced productivity and meaningful synergies from fostering a unified ‘Running Right’ culture throughout our organization, all of which will drive value and accrue to the benefit of Alpha’s shareholders.

That’s from the first Alpha quarterly earnings statement to include a full quarter of operations since the takeover of Massey was finalized in June. You can read the full press release here, and Alpha is scheduled to discuss the results during a conference call later this morning.

Among the results:

— Alpha Natural Resources, Inc. (NYSE: ANR), a leading U.S. coal producer, reported third quarter net income of $66.4 million or $0.29 per diluted share compared to net income of $31.9 million or $0.27 per diluted share for the third quarter last year. Income from continuing operations for the third quarter was $66.4 million or $0.29 per diluted share compared to income from continuing operations of $32.4 million or $0.27 per diluted share for the third quarter of 2010. Excluding certain merger-related and other unusual items described in our “Reconciliation of Adjusted Income from Continuing Operations to Income from Continuing Operations,” third quarter 2011 adjusted income from continuing operations was $79.9 million or $0.35 per diluted share.

— Total revenues were $2.3 billion compared to $1.0 billion for Alpha stand-alone in the third quarter of 2010, and coal revenues were $2.0 billion compared to $0.9 billion for Alpha stand-alone in the third quarter last year. Coal revenues were significantly higher than the year-ago period due primarily to the inclusion of the first full quarter of shipments from legacy Massey operations, which contributed $805.4 million of coal revenues for the quarter, combined with a 38 percent increase in average per ton realizations on metallurgical coal compared with Alpha stand-alone in the third quarter of 2010. Freight and handling revenues and other revenues were $213.8 million and $93.0 million, respectively, during the third quarter versus $85.3 million and $19.9 million, respectively, for Alpha stand-alone in the third quarter of 2010.

— Total costs and expenses during the third quarter of 2011 were $2.2 billion compared to $952 million for Alpha stand-alone in the third quarter of 2010. Cost of coal sales in the third quarter was $1.7 billion, which included $770 million from legacy Massey operations. Adjusted cost of coal sales in the East averaged $75.81 per ton compared with $63.04 for Alpha stand-alone in the third quarter last year. The 2011 per ton cost of coal sales in the East has been adjusted to exclude UBB charges of $10.6 million and closed-mine asset retirement obligation charges of $37.1 million primarily related to changes in estimated future costs of water treatment, as well as merger-related expenses of $62.6 million, including a $39.7 million non-cash charge from selling acquired coal inventories written up to fair value in acquisition accounting and $22.9 million related to retention, severance and employee benefit alignment expenses. The higher cost of coal sales per ton in the East compared to the year-ago quarter is primarily the result of the following factors: reduced production and shipments from our Emerald longwall mine due to geological challenges; lower than expected thermal coal production and shipments from Central Appalachia; more metallurgical coal production; higher variable costs due to the increased volumes and higher per ton realizations on metallurgical coal shipments; increased per ton cost of purchased coal; higher diesel fuel costs; and general inflationary pressures.

There it is this morning, right at the top of the front page of the Daily Mail:

Coal industry, state may see decline.

George Hohmann wrote the story:

The coal industry has been a major force in keeping West Virginia out of a recession but the industry’s – and state’s – fortunes may be about to change.

George noted the recent national business media reports:

“‘Collapse’ isn’t a word to be bandied about in mining circles,” The Wall Street Journal observed last week. “But how else to describe the recent precipitous drop in stocks of U.S. coal producers?”

The Journal noted that companies reporting production problems have had their stocks hammered after they disclose bad news.

From a larger perspective, the newspaper noted that the industry has become increasingly focused on producing coking coal. The Journal reported that global financial services firm Morgan Stanley has determined that while coking coal is less than 10 percent of total U.S. coal output, it accounts for about half of the sector’s earnings.

“Japan, China, India and Europe import nearly three quarters of the world’s seaborne coking coal,” The Journal said, referring to coal shipped on ocean barges. “Everything from natural disasters to monetary tightening have cut or could cut steel demand in those regions. Meanwhile, half the world’s exports of coking coal comes from Australia, where output is now recovering after last year’s floods.”

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Should W.Va. increase taxes on coal?

Gazette photo by Chip Ellis

Here’s something you probably won’t hear the major candidates for West Virginia governor talking much about: It seems West Virginia’s coal industry pay significantly less in severance taxes than other mineral-producing states.

That’s what the fine folks over at the West Virginia Center for Budget and Policy had to say in this new blog post:

… It’s not surprise that the top severance tax states all are rich in coal, oil, gas, or all three. Alaska tops the list, with over 66% of state tax revenue coming from severance taxes. West Virginia comes in with over 7% of state tax revenue coming from its severance tax.

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As the nation waits to hear more details of President Obama’s new jobs plan, the National Mining Association sought today to inject its own agenda into the mix — issuing a news release criticizing the Sierra Club’s “Beyond Coal” campaign:

On the eve of the president’s address to the nation on job creation, a new report shows potentially 1.24 million jobs in 36 states have been destroyed by the Sierra Club’s “Beyond Coal” campaign aimed at stopping coal-based power plants. The finding, from an analysis released today by the National Mining Association (NMA), shows that while the Sierra Club boasts of stopping coal plant projects it is also destroying high-wage jobs for American workers in a struggling economy.

Aside from its news release, the NMA made public just two charts (see here and here) from the analysis, but said:

Applying coal plant employment data from the U.S. National Energy Technology Laboratory (NETL) to the Sierra Club’s own claims of halted power plant construction, the analysis shows Sierra Club’s “Beyond Coal” campaign has targeted for destruction 116,872 permanent jobs and an additional 1.12 million construction jobs represented by the power plants they have prevented from being built. Examples include Illinois, where proposed power plants could have supported 126,612 total jobs there and in surrounding states, and Texas, where blocked power plant construction represented 122,065 total jobs and where potential shortages of electric power exists today.

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On the heels of its sale of Marcellus Shale natural gas reserves, CONSOL Energy said today it would also be divesting itself of half of its Utica Shale acreage in Ohio. According to a news release:

CONSOL Energy Inc. (NYSE: CNX) announced today that it has entered into an agreement with Hess Corporation (NYSE: HES) for the joint exploration and development of CONSOL’s nearly 200,000 Utica Shale acres in Ohio for aggregate consideration to CONSOL of approximately $593 million.

J. Brett Harvey, CONSOL’s CEO, said:

We are very pleased to have Hess Corporation as our partner in the Utica Shale. Hess Corporation is a global integrated energy company that shares CONSOL’s dedication to safety and compliance, and they bring strong technical and operational shale expertise to this joint venture. Those skill sets coupled with CONSOL’s deep footprint and history in northern Appalachia result in a powerful combination that will benefit the eastern Ohio economy, strengthen the communities in which we operate, and provide more opportunity for our employees, and our respective companies. Together we will explore and delineate what could be a significant resource in a safe, efficient, and economical manner.

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Alpha Natural Resources CEO Kevin Crutchfield gave a major speech yesterday at the West Virginia Chamber of Commerce’s meeting over at The Greenbrier. The Beckley paper reported:

“It’s not easy times to be in the coal business. I mean, as most of you know, adding to the normal business challenges we face on a global basis, coal is under attack — a direct, frontal assault by opponents who think that we’d be better off without coal,” Crutchfield said. “It’s almost as if they want to kill the goose that laid the golden egg when, in reality, coal is one of the major contributors to what made America and this state the great places that they are today.”

From the media coverage (West Virginia Metro News also had a piece), there was a lot of unsurprising jingoism, talk about how coal is a vital part of our nation’s future:

Crutchfield said without a doubt, coal will be as much a part of the nation’s future as it was of its past.

“Coal will continue to fortify our structures and electrify nations for years to come,” he said.

There are several reasons, Crutchfield said, that coal will continue to dominate energy markets, but most obviously, is its price tag.

“Because it’s reliable, it’s abundant and it tends to cost less,” Crutchfield said. “In many cases, much less.”

There was no mention, as best I could tell, of what happens over the next decade, as coal production from Central Appalachian enters a major, major decline.

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Alpha/Massey seeks to end shareholder suit

It’s been a while since we heard anything about the shareholder derivative suits pending against Massey Energy and the former top executive and board members from Massey.

But today, Kanawha Circuit Judge Charlie King held a hearing, to give lawyers for Alpha Natural Resources and those former Massey management personnel and board members a chance to argue that at least one of those cases should be tossed out of court.

Basically, lawyers for the company and the board members argued that when Alpha and Massey merged back on June 1,  the plaintiffs in this case lost their right to bring the suit.

Lawyer for the plaintiffs (shareholder groups of the former Massey Energy) allege that their case falls within an exception, for situations where a merger was aimed at escaping liability. Plaintiffs have previously offered a variety of evidence (see here, here and here)  they say supports the nation that Massey officials moved toward the Alpha deal to help them avoid any personal liability for the Upper Big Branch Mine Disaster.

One tricky thing here is that some of those claims by the plaintiff were made in a proposed second amendment to their original complaint. Judge King hasn’t yet given approval for that amended complaint to be officially filed. And the previously approved complaint doesn’t contain these specific allegations about the merger because, well, the merger hadn’t happened when it was written and submitted to the court.

Judge King did not rule this morning, and gave both sides a couple of weeks to submit proposed orders outlining what they would like the judge to do. So stay tuned …

About the jobs: Is there a war on coal?

The Daily Mail’s Jared Hunt had an interesting story this morning. Headlined, “State jobs data less than positive,” the story explained that despite a drop in unemployment, the number of West Virginians working or looking for work has dropped to its lowest level since 1993.

If you read further down into the story, you get to this part:

But the president of the state Chamber of Commerce says that the state’s dwindling workforce should be a sign to lawmakers that it’s time to get serious about fostering economic growth in the state.

“We simply can’t continue doing all the things we’ve been doing and rest on our laurels,” said Chamber president Steve Roberts. “We’re hard as hell on manufacturing, so we keep losing manufacturing employment. We have a national policy that is very anti-coal, and we’re holding our breath that Marcellus shale may help us in the future, but right now we don’t know for sure.”

He said it’s time that the state Legislature — particularly the House of Delegates — got around to adopting policies to counter the state’s traditionally low rankings in business friendliness.

The Daily Mail pitched this as a story that dug deeper into the numbers than state officials wanted the public to see … But unfortunately, the story didn’t do much digging into Steve Roberts’ remarks.

And doing so wouldn’t have required looking very far … Take Friday’s installment of the West Virginia Center on Budget and Policy’s blog, headlined “The War on Coal“?  In it, Sean O’Leary writes:

If you’ve read a newspaper, visited an airport, or driven on the highway lately, you’ve probably noticed a billboard or advertisement or two blaming the EPA for destroying coal jobs or creating a no job zone through environmental regulations. The supposed effects of the “war on coal” are not limited to Appalachia either, as U.S. representative Mike Simpson of Idaho recently claimed that, ” … the overregulation from EPA is at the heart of our stalled economy.”

But if EPA regulations are creating a “no job zone” in Appalachia and stalling economic growth, then one would expect to find some serious declines in mining employment. But that isn’t the case. In fact, according to the BLS numbers, in the past 12 months, the mining sector has seen the largest increase in employment in West Virginia.

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Alpha reports $56.4 million quarterly loss

This just in from Alpha Natural Resources:

Alpha Natural Resources, Inc. (NYSE: ANR), a leading U.S. coal producer, reported a second quarter loss of $56.4 million or $0.36 per diluted share, including the impact of $254.4 million of pre-tax merger-related expenses, which included a $108.3 million non-cash charge from selling acquired coal inventories written up to fair value in acquisition accounting, arising from the acquisition of Massey Energy Company (Massey) on June 1, 2011, compared to net income of $38.8 million or $0.32 per diluted share last year. The second quarter 2011 loss from continuing operations was $56.4 million or $0.36 per diluted share compared to income from continuing operations of $39.2 million or $0.32 per diluted share in the second quarter of 2010. Excluding merger-related expenses, Upper Big Branch (UBB) charges for costs of the accident investigation and site maintenance, amortization of acquired intangibles, loss on early extinguishment of debt, income tax impacts of the foregoing items and a discrete income tax charge, second quarter 2011 adjusted income from continuing operations was $150.6 million or $0.96 per diluted share.

Check out their entire earnings statement here, and you can listen to their quarterly conference call with industry stock analysts this morning at 10 by  going to this link.

If coal is so good, then why is W.Va. so poor?

A coal truck drives out of downtown Welch, W.Va., Wednesday, Feb. 9, 2011. (AP Photo/Jon C. Hancock)

As we wrap up another week of news from the coalfields of West Virginia, it’s worth looking back to see exactly who is asking the tough questions that need to be asked about this industry and its impacts on our state.

First, it takes a couple of members of Congress from California of all places to press Kevin Crutchfield, CEO of Alpha Natural Resources, about exactly how opposing unions fits into his company’s notion of “Running Right.”

West Virginia’s elected officials don’t seem to be interested in finding out what Crutchfield is doing to reform the Massey Energy safety practices that brought us the Upper Big Branch Mine Disaster. Contrast the grilling of Crutchfield by Reps. George Miller and Lynn Woolsey to the attitude of Rep. Nick Rahall, who this week touted “the new ownership in Southern West Virginia” as the answer to any coal-related problems. Of course, my good friend Congressman Rahall, despite spending more than 30 years in Washington, hasn’t been able to figure out what agency should look into the recent scientific study that found his constituents who live near mountaintop removal mines face a greater risk of birth defects.

Then, we had a Boston native, billionaire business information mogul (and mayor New York City) coughing up $50 million of his personal wealth to help the Sierra Club fight construction of new coal-fired power plants, encourage the closure of polluting older plants and halt new mountaintop removal mining permits.

That move by Michael Bloomberg really touched a nerve with the powers that be in West Virginia’s coal industry and among some of its political allies.

The United Mine Workers issued a statement blasting Bloomberg. So did the National Mining Association. I couldn’t imagine that Sen. Joe Manchin was going to let it slide, and he didn’t disappoint, issuing a press release saying:

Coal not only built this country, but it built the skyscrapers of New York City, and without coal, the lights of that city would be dark and its economy would be devastated.

My buddy Matt Ballard at the Charleston Area Alliance (a local business booster group) must have gotten the memo on this, because I noticed him tweeting about it:

1/2 Really would have liked 2 have seen #Bloomberg donate $ to build CO2 technology to help make coal cleaner & advance the industry.

2/2 tech advances environmental science to help reduce #CO2. But instead he chose to not think about our domestic security. #Bloomberg

That was a general theme from the UMWA, the NMA and Sen. Manchin … that Mayor Bloomberg should have used his money to support development of  “clean coal” technology such as carbon capture and storage, or CCS.

OK, now let’s be clear again on something: American Electric Power dropped its work on one of the largest CCS test projects in history over in Mason County at its Mountaineer Plant. Why? Because federal and state officials have failed to make such technology necessary, by not passing any sort of binding limits on greenhouse gas emissions from power plants.

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West Virginia’s boom-and-bust energy economy

Just in time to aid in the discussion of whether the Obama administration’s new guidance to limit mountaintop removal is a “job destroyer” — as the National Mining Association claims — the fine folks at the West Virginia Center for Budget & Policy have issued a report called “Booms and Busts: The Impact of West Virginia’s Energy Economy.

The report concludes:

In the past, West Virginia counties with a concentration in mining saw their economic performance dramatically decline after an energy development boom. Today, their economies are weaker than the rest of the state, and they are ill-positioned to compete and grow. It is uncertain whether today’s energy boom, led by natural gas extraction, will bring the prosperity to West Virginia that it promises. While the potential revenues from this boom seem to be an attractive source of economic growth for communities, history shows that natural resource booms inevitably lead to busts.

Among other things, the report points out:

During the energy development boom in the 1970s, West Virginia counties that focused heavily on mining enjoyed an economic surge. However, when the boom went bust in the 1980s, these mining counties were hit hard. They did worse than the state average on a range of factors, such as earnings and personal income growth, population growth, and employment. Today, these counties have higher poverty rates, lower median incomes, and worse health outcomes than the state average. Despite the rebounds in the energy sector in the 2000s, mining counties continue to struggle in comparison with the rest of West Virginia.

And:

… A boom in energy development, be it in coal mining or natural gas extraction, does not guarantee long-term economic growth and prosperity. Although communities can rely on energy development for economic growth in the short-term, the boom is unsustainable. If trends hold, the boom ultimately leads to a bust, followed by decades of underperformance.

Check it out here.

Rep. Nick J. Rahall, D-W.Va., was just assuring me yesterday that the “new ownership” in Southern West Virginia was going to change things about the way the coal industry operates.

Perhaps Rep. Rahall should talk to his colleague, Rep. George Miller — the ranking Democrat on the House committee that oversees mine safety and other labor issues — about this, because Rep. Miller doesn’t seem too convinced.

Readers may recall that back in late May, Miller and Rep. Lynn Woolsey, D-Calif., wrote to Alpha Natural Resources CEO Kevin Crutchfield, to question whether Alpha was going to rid itself of Massey’s safety culture once it acquired the rival company.

Crutchfield apparently responded with this letter, which assured Miller and Woolsey that Alpha’s “Running Right” program or philosophy or whatever exactly it is was the path to improving those Massey operations, to assuring not only the safety of miners, but protection of the environment. Crutchfield wrote:

While Running Right had its origins in safety, it is now the platform for how Alpha conducts all of its business activities, including environmental stewardship and continuous improvement, and generally how Alpha expects employees to treat each other and the communities where our affiliates operate. That is why Running Right training is provided to all employees throughout the company and not just employees involved in operations. Only in this way can Alpha create the culture that will lead to true improvement in all aspects of its business.

And now, Miller and Woolsey have responded, with a long list of questions for Crutchfield — primarily about whether Alpha has looked into the new findings of the U.S. Mine Safety and Health Administration’s investigation of the Upper Big Branch Mine Disaster.

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Alpha’s union mines agree to UMW deal

This just in from the United Mine Workers of America:

The United Mine Workers of America (UMWA) announced today that subsidiaries of Alpha Natural Resources have signed the 2011 National Bituminous Coal Wage Agreement (NBCWA), covering two large coal mines controlled by Alpha in Pennsylvania.

“Alpha agreed to substantially the same contract for these mines that we negotiated with the Bituminous Coal Operators Association (BCOA) in June,” UMWA International President Cecil E. Roberts said. Roberts said that there are a few local issues that are different in the Alpha agreement, but that the pay, health care and pension benefits language is the same as in the BCOA agreement.

“The miners at those mines have already overwhelming ratified this agreement, so there will not be another vote and the contract will take effect immediately,” Roberts said. “That means miners’ pay will be increased by $1 per hour immediately. That means their health care will be preserved with no cuts or added costs. That means that health care and pensions for current and future retirees is secured.”

The agreement covers nearly 1,400 working miners at the Cumberland and Emerald mines in Greene County, Pa., and will be retroactive to July 1. Additionally, the company agreed that if it reopened the company’s idled Wabash mine in Illinois before the end of 2013, the UMWA would remain the collective bargaining representative for the miners there and this agreement would be in effect.

Arch completes ICG deal, announces team

Arch Coal Inc. announced this morning that it has completed its acquisition of International Coal Group, and Arch CEO Steve Leer said:

We are pleased with the swift and successful completion of the ICG transaction, which will add tremendous value for Arch’s stakeholders in the coming years. This acquisition extends Arch’s reach into every major U.S. coal supply basin, enhances our low-cost and leadership position in core operating regions and creates a world-class global thermal and metallurgical coal franchise poised for growth.

The company’s news release added:

With expected pro forma metallurgical sales of 11 million tons in 2011, Arch becomes the second largest U.S. metallurgical coal producer and a top 10 global supplier to steelmakers. By capitalizing on expansion opportunities, Arch expects to boost its metallurgical coal output to nearly 15 million tons by 2015 to serve under-supplied, growing global metallurgical markets.

The acquisition also adds nearly 13 million tons of low-cost Appalachian thermal production to Arch’s vast domestic thermal coal portfolio, solidifying the company’s No. 2 position among U.S.-based coal miners and creating the U.S. coal industry’s most diversified producer. Additionally, the company expects to leverage its dedicated throughput capacity, logistics capabilities and strategic relationships to expand export shipments via the East Coast, West Coast and Gulf of Mexico to further penetrate and participate in the global growth markets.

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I just got off the phone with Davitt McAteer, who led the independent team investigating the Upper Big Branch Mine Disaster, producing a landmark report released last month.

Davitt had an opportunity to review the new report that former Massey board chairman Bobby Inman (right)  is promoting, repeating the same theories that the explosion was a natural disaster that former Massey CEO Don Blankenship championed.

And Davitt raises an interesting question: If this report was prepared by experts hired by Massey, and Alpha has purchased Massey, isn’t this report Alpha’s property now?

Given that — and given Alpha CEO Kevin Crutchfield’s statements about how Alpha wants to have a good relationship with regulators and work toward all of its mines “Running Right”, does Alpha endorse this report? Davitt told me:

Is this an Alpha report? The report appears to be a product of Massey Energy and Massey Energy was purchased by Alpha.

Has Alpha endorsed the report? And if they don’t endorse the report, then the president of the company needs to come out and say they don’t endorse the report, and distance his company from it.

I’ve asked Alpha spokesman Ted Pile for a comment on the report, but he hasn’t responded.

We were hoping this week that Alpha Natural Resources CEO Kevin Crutchfield would give us an interview, or at least answer a few questions during the big sign unveiling held to celebrate Alpha’s acquisition of Massey Energy.

Crutchfield did quite a few interviews, but just couldn’t find the time for West Virginia’s largest newspaper … and if you watch this video, you can see how he handled efforts by my buddy Gary Harki to ask him some questions at that sign unveiling:

 

But I thought I would pass on the questions we wanted to ask Kevin:

1. A number of stakeholders — the independent investigator appointed by the governor, the United Mine Workers union, several members of Congress — have questioned why Alpha would continue the employment of a number of top Massey Energy officials who played major roles in the culture of unsafe work practices that led to the Upper Big Branch Mine Disaster. Could you explain why you want those sorts of individuals in positions of authority at Alpha’s mines?

2. As a follow-up question, two Alpha workers — one company miner and one contractor — have in recent months pleaded guilty to federal charges that they faked foreman’s certificates and lied to government investigators. How do these sorts of actions fit into the idea of “Running Right” under Alpha’s safety program and culture?

3. Have you personally read the report by independent investigator Davitt McAteer that describes the culture of Massey Energy as “deviant”. If not, why not? If so, do you believe it’s accurate and how confident are you that you can change that culture?

4. We know that 17 top Massey management officials took the 5th and refused to answer questions in the investigation of the UBB Disaster. Will your company adopt a policy that refuses employment to management officials who refuse to cooperate with MSHA investigations of fatal mining accidents?

5. Two of your largest eastern mines, the former Foundation Coal operations in Pennsylvania, are unionized. Do you believe your company has a good relationship with the UMWA, and would you welcome unionization of your currently “union-free” operations?

6. A large body of scientific studies indicates that mountaintop removal mining in Central Appalachia is causing serious damage to the environment and is linked to health problems for local residents. What steps do you believe should be taken to reduce these harmful impacts both to the mountains, forests and streams and to the communities where your company operates?

7. Do you accept the scientific consensus that man-made emissions of greenhouse gases, including from coal-fired power plants, is causing global warming and, if so, what action do you and your company support to deal with this problem?

8. Studies by government agencies and outside analysts project that Central Appalachian coal production will be cut by half by the end of this decade. What is your company doing to help the communities where it operates prepare for this major economic change, and do you believe local political leaders need to do more to prepare for the potential job losses this trend will bring?

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As acting Gov. Earl Ray Tomblin joined Alpha Natural Resources to celebrate yesterday’s approval of Alpha’s buyout of Massey Energy, new court documents were being unsealed that continue to detail the failings of Massey’s board of directors to ensure the safety of its workers.

We had a first cut at a story about some of these documents, but as I’ve continued to read what’s been made available so far, one theme that jumps out is that Massey’s board did not appear to take seriously a court settlement that required it to take a larger role in the coal giant’s safety practices.

Allegations about the board’s inaction are outlined in this motion for a preliminary injunction filed by a group of Massey shareholders who are seeking to hold Massey’s board and executives responsible for perhaps $1 billion in losses from the April 5, 2010, mine disaster.

Some examples:

— Under the settlement (and subsequent June 2008) court order approving it), Massey’s board was required to hire a “Vice President for Safety Practices,” who would report to a Safety, Environmental Public Policy Committee. The company did hire Elizabeth Chamberlin (right) away from CONSOL Energy and make here a top vice president for safety. But rather than reporting to the special committee, Massey had her reporting directly to then-CEO Don Blankenship.

— That special committee’s chairman, board member James Crawford, only asked for information about the safety compliance reporting system — meant to help the board take a more direct role in managing safety issues at Massey — within the company after the Upper Big Branch Mine blew up.

— At a special board meeting about a month after the mine disaster, board members learned that Blankenship had set up a system, contrary to the court order, through which safety reporting was handled by vice president for operations Chris Adkins and general counsel Shane Harvey, reporting directly to Blankenship. This system wasn’t changed until sometime between August 2010 and November 2010 — months after 29 miners died at Upper Big Branch.

— With regard to mounting safety problems at specific Massey mines, the board took no action at its Tiller Mine, which was suffering from an injury rate more than twice the national average — and 40 percent worse than even Upper Big Branch — and that had received hundreds of citations for violations that could pose an imminent threat to workers.  Board members also took no action in response to the 573 MSHA citations and more than $1.6 million in fines issued to Massey’s Ruby Mine in 2009 alone. And, the board did nothing to resolve safety problems at the Freedom Mine, which prompted MSHA’s first-ever effort to get a federal court injunction to shut down an unsafe mine.

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Gazette photo by Lawrence Pierce

We’ve got a complete report online about yesterday’s completion of the merger of Alpha Natural Resources and Massey Energy, leading off with a piece I worked on with my buddy Gary Harki:

Hours after Massey Energy and Alpha Natural Resources shareholders approved the $8.5 billion deal for Alpha to acquire Massey, Alpha CEO Kevin Crutchfield said his company was committed to “running right.”

“We’ll be doing great things for safety, the environment and the communities where we operate,” Crutchfield said in a prepared statement at Massey’s regional headquarters in Boone County.

Crutchfield, Senate president and Acting Gov. Earl Ray Tomblin, and a slew of state and local officials attended the unveiling of an Alpha sign outside the building on Wednesday. The name of the road leading up to the building was changed from Morgan Massey Drive — for the longtime Massey president — to Running Right Way, in honor of Alpha’s safety program.

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The Charleston Gazette and NPR are continuing their legal effort to make public records concerning the expected merger of Alpha Natural Resources and Massey Energy.

Late yesterday afternoon, lawyers for the Gazette and NPR filed this motion with Kanawha Circuit Judge Charles King, in anticipation of a hearing at 1:30 p.m. today regarding the status of documents in the Alpha-Massey case pending in his courtroom. NPR and the Gazette had a minor victory at the state Supreme Court, when justices unsealed the petition and response brief filed there regarding this same case.

The new Gazette-NPR brief says:

It is unsurprising the parties to this case ‘endorse’ the secrecy orders; they likely would prefer to avoid any public scrutiny. Yet this court is not obligated to pander to parties’ desires to hide from public scrutiny. Massey Energy and its related entities form one of the largest employers in this state. As such, Massey’s conduct, the sale or potential sale of the company, the required public disclosure of relevant information concerning the value of the company to shareholders so they can make informed decisions, and the actions of the parties in this case is of great interest and concern both to the citizens of West Virginia, and nationally as well.

In addition, there is greater cause for public scrutiny of the filings in this matter in light of the April 5, 2010, explosion at Massey’s Upper Big Branch Mine. The suspicious circumstances surrounding that tragedy has resulted in numerous lawsuits, including the recently-filed suit alleging that the sale of massey to Alpha will harm the ability of victims and their families to recover damages. The filings in this case likely will shed new light on Massey’s acts and or omissions in relation to this tragedy.