Appalachian Power: Plants not worth upgrading

June 11, 2015 by Ken Ward Jr.

kanawhariverplant

Gazette photo by Lawrence Pierce of the Kanawha River Plant in Glasgow, W.Va.

There’s been a fair amount of hand-wringing about the planned closure by American Electric Power’s Appalachian Power subsidiary of the Kanawha River, Philip Sporn and Kammer power plants (see especially Daily Mail stories here and here).  Several years after the company’s decisions were announced, all this consternation led staff over at the state Public Service Commission to ask the PSC to investigate the closures.

Lawyers for Appalachian Power responded initially by pointing out that they have actually already provided the commission with a great deal of information on the matter as part of several previous cases.  That wasn’t good enough for the PSC, and commissioners ordered the power company to provide more details.  Appalachian lawyers did that yesterday, providing this 90-page filing.

Among the more interesting parts of Appalachian’s response:

— Almost all of the operating employees of the Disposition Units have been reassigned or have retired or taken severance.

— Compliance with the MATS Rules would require significant construction work. It might be possible for Disposition Units to meet the requirements of the MATS Rule by constructing Selective Catalytic Reduction (“SCR”) and Flue Gas Desulfurization (“FGD) systems … The installation of SCR and FGD systems would require installation of material handling systems, wastewater treatment systems, Absorber vessels, new ductwork, new stack exhausts, and numerous other systems. APCo has not undertaken any design work for SCR or FGD systems for the Disposition Units because the costs were deemed to be prohibitive, in light of the age and condition of the units.

— Because of the time for the construction of such systems, any Disposition Units at which it was decided to construct these systems could not be returned to service for a minimum of approximately five ( 5 ) years from the date such construction projects were begun.

— The Company has not performed any detailed cost estimates because the order of magnitude of the costs was so tremendous that APCo deemed it imprudent, given the age and condition of the Disposition Units, to have its customers bear such costs, particularly over the comparatively short anticipated lives of any of  the conversion or retrofit projects discussed above.

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What’s driving the decline of coal?

June 9, 2015 by Ken Ward Jr.

In this Sept.  26, 2011 file photo, raw coal from a coal mine pours off of a conveyer belt, near Trinidad, Colo.  (Mark Reis/The Gazette via AP, File)

Here’s the latest from the U.S. Department of Energy’s Energy Information Administration (see page 8):

EIA expects a 7% decrease in coal consumption in the electric power sector in 2015, despite a 1% increase in total electric power generation. Lower natural gas prices are the main driver of the decline. Projected low natural gas prices make it more economical to run natural gas-fired generating units at higher utilization rates even in regions of the country (Midwest, South) that typically rely more heavily on coal-fired generation. Increased generation from wind, solar, and biomass is also expected to displace coal-fired generation, as several biomass facilities have been converted from coal-burning facilities. The retirements of coal power plants in response to the implementation of the Mercury and Air Toxics Standards also reduce coal demand in the power sector in 2015. The full effect of the coal plant retirements on capacity will be felt in 2016, but projected rising electricity demand and higher natural gas prices are expected to contribute to higher utilization rates among the remaining coal-fired fleet. Coal consumption in the electric power sector is forecast to increase slightly in 2016.

Blankenship gets OK for dirt-track trip

June 3, 2015 by Ken Ward Jr.

Mine Explosion

It looks like U.S. Magistrate Judge Clarke VanDervort has approved former Massey Energy CEO Don Blankenship’s request to go to Ohio to watch his adult son’s dirt-track race. I’ve posted a copy of the order here.

Among other things, Judge VanDervort noted that U.S. Attorney Booth Goodwin — who has vigorously opposed Blankenship’s request for trips to Las Vegas — did not file an opposition to this particular travel request.

Patriot Coal: The shoes start to drop

June 3, 2015 by Ken Ward Jr.

Patriot Bankruptcy Protest

Here’s the big — but not unexpected — announcement today from again-bankrupt Patriot Coal:

Patriot Coal Corporation  a producer and marketer of coal in the eastern United States, today announced that it has filed with the Bankruptcy Court a letter of intent for a proposed sale of a substantial majority of its operating assets to Blackhawk Mining, LLC (“Blackhawk”), as well as a motion outlining bidding procedures. The contemplated transaction would be consummated pursuant to a chapter 11 plan and is subject to documentation of a definitive asset purchase agreement, bankruptcy court approval of the sale, confirmation of a chapter 11 plan, and other customary conditions. Patriot’s mining operations and customer shipments will continue in the ordinary course during the sale process.

Under the terms of the letter of intent, Blackhawk would issue to Patriot’s secured lenders new debt securities totaling approximately $643 million plus Class B Units providing them an ownership stake in Blackhawk.  In addition, Blackhawk would assume or replace surety bonds supporting reclamation and related liabilities associated with the purchased assets.

 

Bob Bennett, President and Chief Executive Officer of Patriot, said:

We feel strongly that the proposed transaction with Blackhawk is in the best interest of Patriot, and its employees and stakeholders.  Blackhawk shares our dedication to operational and environmental excellence, and this transaction creates a viable path forward in this challenging market environment, enabling our mining operations to continue serving customers and preserving jobs in the communities in which they operate. As always, we remain committed to operating safely and serving our customers throughout this sale process.

There’s been previous media coverage hinting that Blackhawk was the likely buyer here, and also some coverage that provided background on the closely-held private company (see here and here).  (Personally, I found it interesting when the U.S. Mine Safety and Health Administration’s lead investigator at the Upper Big Branch Mine Disaster, Norman Page, showed up at a state mine safety board meeting, having left MSHA and announcing his new job was as a safety officer for Blackhawk).

But to understand part of what’s going on here with Patriot, you have to read beyond the press release to the company’s court filing, which explains that properties excluded from the deal with Blackhawk include Patriot’s Federal No. 2 Mine in Fairview, W.Va., as well as “Corridor G, Jupiter, all other Logan County assets” — in other words, Patriot properties with long-standing United Mine Workers contracts or — in some cases — with really big and long-term environmental liabilities (see here and here).

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The wrong way for W.Va. to confront coal’s decline

May 29, 2015 by Ken Ward Jr.

Climate Change EPA Rally

The news this last week certainly hasn’t brought anything that was very comforting to West Virginia families who rely on the coal industry to pay their bills.

Last Friday, we had hundreds of layoffs announced by Murray Energy and Alpha Natural Resources. Then this week, researchers at West Virginia University released the latest forecast of doom and gloom for the state’s future coal production.

But as we explained in our Gazette story — and as we’ve explained in previous stories (here and here) — none of this should come as a surprise to anyone, and defeating the Obama administration’s new carbon emissions rules isn’t going to save our state’s coal industry, especially in the southern counties where much of the easy-to-mine coal is gone.

Last week’s layoffs produced the predictable chest-thumping from local political leaders about how bad EPA is and how hard they are fighting any effort to do anything about the dire threat posed by the climate crisis. Even when coalfield leaders manage to admit that there are other factors behind coal’s decline, they try desperately to downplay those realities.

Take Gov. Earl Ray Tomblin, for example. His press release about the Murray and Alpha layoffs admitted this much:

We recognize market forces play a large role in these decisions …

But the governor and his staff were quick to pivot to their real message:

However, the market is also being forced to react to overreaching regulations from the EPA. For years, we have warned the EPA of the consequences of its irresponsible mandates. We will continue to oppose EPA policies that have devastating impacts on West Virginia miners, their families and our communities.

And, almost as an afterthought, the administration mentions it hopes to do a little bit to help laid off miners:

At the same time, we will continue to reach out to displaced miners and their families to offer support and retraining assistance through Workforce West Virginia programs. We are creating new jobs in West Virginia, and we are committed to ensuring all West Virginians have access to the education and training they need to not only fill these positions but secure a bright future in the Mountain State now and for years to come.

Why isn’t the governor’s message to his state something like this:

While we continue to urge the EPA to modify its carbon emissions rules in ways we believe will make those rules more fair, we know that nothing EPA can do is going to suddenly bring us another coal boom. Those days are over, and all of us must do everything we can to build a brighter economic future for our coalfield communities.

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Friday roundup, May 29, 2015

May 29, 2015 by Ken Ward Jr.

AP10ThingsToSee The Last Breaker

Coal mining crews work near the St. Nicholas Coal Breaker in Mahanoy City, Pa. on Wednesday, April 29, 2015. The old breaker is about 100 miles northwest of Philadelphia in a region that holds nearly all of the nation’s anthracite, a pure grade of coal that spawned the railroads, powered America’s Industrial Revolution and dominated home heating in the East. (AP Photo/Matt Slocum)

This Associated Press story about the last coal breaker coming down in Pennsylvania got me thinking about the long tradition — both proud and not so proud — of the region’s coal industry, especially as the forecasts continue to show coal’s inevitable decline.  And what do you know, Politico has a piece called, “How coal disrupted the world,” by Barbara Freese, author of the great book, “Coal: A Human History“:

Matthew Boulton was the Steve Jobs of 18th– century England — a visionary entrepreneur with a love of technology and flair for drama.  When asked by King George III what he was working on, Boulton announced he was producing “a commodity which is the desire of kings.”  Namely, “power, your majesty.”

It was a grandiose promise, but he delivered. Boulton’s business partner was James Watt, whose new steam engine would soon drive the Industrial Revolution. It was a breakthrough that gave humanity a way to efficiently convert the concentrated energy of coal into useful mechanical power. And even before its impact was felt, Boulton had perceived that this new engine would be more than a technology – that there is a link between coal and kings, between the physical power a society taps into and the political power it ultimately supports.

The Last Breaker

This undated photo provided by Reading Anthracite on April 29, 2015 shows the St. Nicholas Coal Breaker in Mahanoy City, Pa. In the early 20th century, St. Nicholas opened as the crown jewel of a relatively safer, more modern anthracite industry. The breaker and its twin at Locus Summit operated around the clock to meet the nation’s dwindling but still substantial need for anthracite. (Reading Anthracite via AP)

Coal-fired industrialization would go on to create kings of its own, in industry and in politics. Today, the economic outlook for coal is bleak, in part because of the urgent need to rein in its destabilizing effect on the climate. More than two centuries after Boulton’s promise, coal may finally be exiting the economic stage, making room for a new generation of energy technologies.  

What will be the social and political implications of coal’s fall?  Two of coal’s intrinsic features, its concentrated form and its highly polluting nature, were especially significant in shaping the power dynamics of the coal era.  We are starting to replace coal with technologies that are just the opposite — intrinsically dispersed, and environmentally much cleaner.  If we keep moving in this direction, the consequences will be particularly profound. Coal’s retreat promises to reshape the world again, and as we start to consider what that will mean, we can find clues in the history of coal’s rise. 

The piece continues, with some sharp analysis of the current situation we find ourselves in:

The coal industry blames its current woes  on what it calls President Obama’s “war on coal,” but coal’s problems run much deeper.  Climate change isn’t going away, and as carbon dioxide concentrations and global temperatures keep rising, so too will the pressure to move away from coal, which emits much more carbon per unit of energy than other fuels. Even with our reduced dependence on coal, the nation’s coal plants still emit more carbon than all its cars, trucks and buses combined.  

It’s possible that a Republican in the White House could reverse some of the regulation that is making coal less competitive, but in the long run coal is unlikely to see anything more than a long, managed decline in its national importance.  

So what will be the social and political implications of coal’s decline?  Obviously, it will mean less influence for the coal industry and job losses in mining regions, continuing a decades-long trend in some places as the industry has mechanized. The economic hardship that coal communities face is real.  It can be reduced through planning, diversifying local economies and retraining workers, but there are no easy solutions.  Coal is not the major employer it once was; in Kentucky, for example, less than  1 percent of the state’s workforce is employed by the mines, but that is small consolation to those facing job losses.        

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Judge: Alpha must pay Blankenship’s lawyers

May 28, 2015 by Ken Ward Jr.

Massey CEO Retires

Here’s the news, just posted by Bloomberg:

Massey Energy Co. must pay the legal expenses of former chief Donald Blankenship for his defense to federal charges stemming from the worst U.S. coal disaster in 40 years, a Delaware Chancery Court judge ruled.

Judge Andre Bouchard on Thursday granted Blankenship’s request to recover unpaid legal expenses, citing the terms of the company’s charter and its merger agreement with Alpha Natural Resources Inc.

And here’s the court ruling:

 
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Jim Justice sued … again

May 28, 2015 by Ken Ward Jr.

Jim Justice

In this July 2, 2010 file photo released by The Greenbrier Resort, The Greenbrier Resort owner and chairman Jim Justice attends the gala opening of The Greenbrier Casino Club, in White Sulphur Springs, W.Va.  (AP Photo/Evan Agostini for The Greenbrier Resort, File)

Last evening, The Associated Press picked up on a new lawsuit filed against billionaire coal operator/businessman/gubernatorial candidate Jim Justice:

A lawsuit says two of billionaire Jim Justice’s affiliated companies owe $2 million from a 2013 coal deal.

In Tuesday’s complaint in Beckley federal court, Pennsylvania resident Thomas K. Lampert sued Tams Management, Inc. in Beckley and Southern Coal Corporation, a Delaware company doing business in Roanoke, Virginia.

The lawsuit says the companies didn’t pay $2 million from a March 2013 agreement for equity and membership interests in Newgate Development of Beckley, LLC.

It says Lampert’s trust never received the agreed-upon $4 per ton for the first 500,000 tons of coal mined and sold.

The AP report was short, and didn’t contain these interesting details from the suit:

One such specified act or omission is any failure to comply with the “Purchaser Permit Approval Obligation,” whereby Tams was required to pursue and secure
approval, within ninety (90) days, of the transfer of all applicable permits for the Three Marie Mine located in the Slab Fork District of Raleigh County, West Virginia.

Tams further agreed that “time shall be of the essence” with respect to the Purchaser Permit Approval Obligation, and that any failure to meet the Purchaser Permit Approval Obligation “shall be a material event of default.”

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New WVU forecast outlines continued decline of coal

May 27, 2015 by Ken Ward Jr.

COAL TRAIN

A C.S.X. train loaded with coal winds its way into the mountains in this Nov. 21, 2004 file photo taken near the New River at Cotton Hill in Fayette County, W.Va.  (AP Photo/Jeff Gentner)

The latest coal production forecast is out from West Virginia University’s Bureau for Business and Economic Research, and the news isn’t good:

West Virginia’s coal industry has seen production decline significantly over the past several years. After climbing to nearly 158 million short tons in 2008, the state’s coal mine output has tumbled in each successive year to an annual total of approximately 115 million short tons in 20141─or a cumulative decline of 27 percent. The overall rate of decline was much smaller during 2014, as mines in the state produced roughly 0.8 percent fewer tons of coal in comparison to 2013. Unfortunately, however, this slower rate of decline is expected to be temporary and preliminary data already indicate mine output fell 4 percent on a year-over-year basis during the first quarter of 2015 to an annualized rate of 110 million short tons.

While coal production within West Virginia has declined rapidly over the past several years, the downward trend in statewide production has been much more significant when compared to most of the nation’s other major coal-producing regions. Aggregate non-West Virginia coal production in the US was estimated to have increased 1.7 percent during calendar year 2014, leaving it at about 87 percent of production levels achieved during 2008. As a result, this has caused West Virginia’s market share of total U.S. coal tonnage to fall appreciably over the past several years, retreating from 13.5 percent in 2008 to 11.5 percent in 2014.

 Why is this happening?

The fall-off in the state’s coal production has been driven by a combination of weak export demand, declining domestic use of coal in electricity generation, changes in emissions compliance standards for utilities and increasingly challenging geologic conditions in Southern West Virginia.

The short-term forecast:

The baseline forecast calls for state coal production to decline to approximately 104 million short tons in calendar year 2015 before contracting further to 98 million short tons in 2016. Numerous factors are expected to weigh on West Virginia coal production over the next two years, with declines likely in both the state’s northern and southern coalfields. After replenishing their coal stockpiles following an extremely cold first quarter of 2014, inventories of coal at electric utilities grew appreciably over the latter half of the year and have stayed at relatively high levels through the first several months of 2015 due to increased use of natural gas. Utilities are expected to draw down from existing stockpiles slowly in 2015, which will weigh heavily on thermal coal production. Domestic industrial use and export demand for coal are also expected to remain weak during the next two years.

And the long-term forecast:

Coal production in West Virginia is expected to rebound moderately between 2017 and 2020, rising to an annual average of nearly 105 million tons in 2020. Retirements of coal-fired generation will taper off and, while no measurable amount of capacity additions to the coal-fired fleet are likely, an expected increase in natural gas prices should allow coal to regain some share of electricity generation. For the remainder of the outlook period, statewide coal production is expected to fall, contracting to less than 96 million short tons in 2035. This will be driven entirely by losses in production in the state’s southern coalfields. Northern West Virginia production will likely experience a solid rebound through 2020 that will then remain relatively stable level over the remaining portion of the forecast.

What being “inside the war on coal’ means for W.Va.

May 27, 2015 by Ken Ward Jr.

Coals War

I have to admit that the first thing I thought of when I saw the social media postings about the Politico piece, “Inside the war on coal,” was: Why did a reporter as good as Michael Grunwald fall into the trap of calling something a “war” that simply isn’t a war. But perhaps I just need to accept the fact that the industry PR people who thought up the phrase earned their money and, despite my  best efforts on this blog (see War is war: Why not call coal debate something else?),  nobody else is going to start calling what’s happening to coal something else.

As I read on through this piece, though, there is much that folks in places like the coalfields of West Virginia should read. Mike nails a lot of this, as he very often does:

Coal still helps keep our lights on, generating nearly 40 percent of U.S. power. But it generated more than 50 percent just over a decade ago, and the big question now is how rapidly its decline will continue. Almost every watt of new generating capacity is coming from natural gas, wind or solar … Utilities no longer even bother to propose new coal plants to replace the old ones they retire. Coal industry stocks are tanking, and analysts are predicting a new wave of coal bankruptcies.

This is a big deal, because coal is America’s top source of greenhouse gases, and coal retirements are the main reason U.S. carbon emissions have declined 10 percent in a decade.

But, a significant strength of this piece is that it doesn’t, as much journalism on these topics does today, pretend that far-off global concerns about climate change are the only downside to coal:

Coal is also America’s top source of mercury, sulfur dioxide and other toxic air pollutants, so fewer coal plants also means less asthma and lung disease—not to mention fewer coal-ash spills and coal-mining disasters.

And, he notes something that I’ve written about many times before — that President Obama has not always been nearly as tough on coal as industry mouthpieces would have us all believe. There are also just tons of really interesting details about the Sierra Club’s “Beyond Coal” efforts to shut down power plants around the country. For example:

At a dry hearing in a drab courtroom in Oklahoma City, a methodical Beyond Coal attorney named Kristin Henry, whose bio identifies her as “one of the few environmentalists who would never be caught wearing Birkenstocks,” was pinning down an Oklahoma Gas & Electric executive with a barrage of wouldn’t-you-agrees, isn’t-it-trues, and would-it-be-fair-to-say’s. The power company was out of compliance with a federal air-quality rule called “regional haze,” so it was offering to convert one of its two coal plants into a natural gas plant. Henry knew she couldn’t stop that. But OG&E also wanted to install massive new scrubbers on the other plant so it could keep burning coal for decades to come. Henry was determined to stop that.

 In the 90 minutes Henry spent cross-examining OG&E’s Joseph Rowlett in early March, she didn’t ask a single question about climate or public health. She focused exclusively on OG&E’s request for the largest rate increase in state history, a 15 percent hike to finance the utility’s $700 million compliance plan. Through her deadpan, leading questions, she portrayed OG&E as a company desperate to get its customers to foot the bill to prop up an inefficient plant, pursuing retrofits it would never consider if its own shareholders had to swallow the costs, operating in a dream world where regional haze was coal’s only challenge. At one point, she got Rowlett to admit his calculations assumed there would be no additional coal regulations for the next thirty years, even though the EPA intends to finalize at least four new coal regulations this year alone.

 “Isn’t it true you’re assuming zero over the next 30 years?” Henry asked.

 Rowlett paused a few seconds. “That’s right,” he replied.

  Read the rest of this entry »

Blankenship seeks trip to Ohio dirt track race

May 27, 2015 by Ken Ward Jr.

Mine Explosion

Former Massey Energy CEO Don Blankenship wants to take another trip — but this one isn’t to Las Vegas.

In a new motion filed late yesterday in federal court in Beckley, Blankenship’s lawyers explain:

Donald L. Blankenship, through counsel, hereby moves the Court for an order permitting him to travel to Sidney, Ohio, from Friday, June 5, 2015 through Saturday, June 6, 2015, to watch his son, a professional dirt track racer, compete in the 41st Annual Dirt Late Model Dream at the nearby Eldora Speedway.

Readers will recall that last week, Blankenship’s bid for another trip “home” to Las Vegas was rejected.  The former Massey CEO is currently free on $5 million bond, pending trial on mine safety and securities crime charges. He also continues to try to delay that trial, currently scheduled for mid-July.

Some readers may also remember that Blankenship’s son, John, is — as described in the new court filing — “an accomplished professional dirt track racer.”  John Blankenship “drives the No. 23 ‘Coal’ car,” the motion notes. Don Blankenship is president of Number 23 Inc., a Kentucky corporation that apparently supports his son’s racing career.

 

Report: Murray planning 1,800 layoffs

May 22, 2015 by Ken Ward Jr.

Robert Murray

Here’s the report out today from the Wall Street Journal:

Coal miner Murray Energy Corp. is set to announce layoffs of around 1,800 workers at nine locations on Friday, according to a person familiar with the matter, dealing another blow to the coal-mining industry in Appalachia.

The planned layoffs, which represent about 21% of Murray’s workforce, will come largely at mines in West Virginia and Ohio, a region already reeling from the impact of abundant natural gas and a global coal glut.

The story continues:

Robert Murray, the 75-year-old founder and chief executive of the company, made the decision Wednesday after a 12-hour meeting with operations managers, according to the person familiar with the matter.

The company decided to make much bigger cuts than it had previously been considering because of growing concerns about the slumping market for thermal coal, the person said.

The company plans to send formal notice on Friday to workers at the Monongalia County Coal Co. in West Virginia, the mine that will see the largest layoffs. The mine had been idled earlier this spring, putting several hundred miners out of work.

Asked to confirm the Journal’s report, a Murray Energy spokesman said the company would have a statement this afternoon …

UPDATED: Word of these layoffs came first in reports from the Pittsburgh Business Times and the Tribune-Review, both of which had stories yesterday, based on comments Bob Murray made at an industry conference.

Why W.Va.’s coalfields can’t have nice things

May 15, 2015 by Ken Ward Jr.

14_0395_02That’s a map that appeared this week as part of a U.S. Centers for Disease Control study that looked at the “most distinctive causes of death” in each state across the country.  The Washington Post had a write-up on this here, which is where I first saw the map and the study.

The concept is to pinpoint the cause of death for each state that, as the Post explained is the cause of death that stands out most relative to its national average.

Click to enlarge the list with the map, and you’ll see that for West Virginia, the most distinctive cause of death is “Pneumoconioses and chemical effects.”  That’s right, the cause of death that stands out in West Virginia relative to its national average is black lung  — the terrible disease that we know how to eliminate, but don’t because doing so might cost the coal industry too much money.

But gosh, if you follow what our elected officials are doing in Washington, or read what the leaders of our state’s media establishment are opining about, you would barley know that the coal industry hurts anybody in any way.  What West Virginia really needs, these folks keep telling us, is not better regulation of coal and creation of a broad new range of diverse industries and economies, but more coal. Lots more coal. And, they tell us, if we can just stop President Obama and his EPA, we’ll have more coal.

Take Hoppy Kercheval’s commentary today for West Virginia Metronews. In a nutshell, Hoppy argues that the absolute last thing West Virginia needs is any federal money or other assistance to find ways to diversify the state’s southern coalfields. Hoppy is apparently totally against the Obama administration’s efforts in the federal budget and with administration agency programs to give those coal communities help that they desperately need:

Washington’s answer is to throw some hush money at the problem.  This year, the POWER initiative will award grants using $28 to $38 million to pay for “planning and preparation” for the post-coal era.  The administration promises more money in future years, but that’s uncertain.

Obama supporters and a few desperate souls will appreciate Washington’s benevolence, cheering the federal government’s attempts to foster the long-desired “economic diversity” the state needs.  And it’s possible that the POWER creators actually believe central planning and yet another underutilized job retraining program will help.

Even if Washington’s efforts are in good faith, they pale when compared with the damage done by the administration’s policies. It’s as though the White House stabbed the coal industry in the heart with the right hand, while the left hand offers a tissue to help clean up the mess.

As we discussed yesterday, what Hoppy and his buddies among the state’s career campaign consultants really want is to be able to run Republican candidates in 2016 in another anti-Obama campaign:

What POWER will do is give the national Democratic Party some cover, a useful political diversion.  Federal Democratic candidates campaigning in coal country in 2016 can try to temper the impact of the EPA’s decisions by pointing to ways Washington is helping to, according to the White House, “build a better future.”

If politicians really wanted to help they would reign in the EPA and/or spend money on badly needed infrastructure. But that’s not going to happen, at least not with this administration or with the current direction of the national Democratic Party.

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Coalfield Justice: W.Va. needs more than love

May 14, 2015 by Ken Ward Jr.

Jim Justice

West Virginia billionaire businessman Jim Justice announces that he is running for governor of West Virginia as a Democrat in 2016 in White Sulphur Springs , W.Va., Monday, May 11, 2015. (AP Photo/Chris Tilley)

There’s a lot of commentary floating around about Monday’s big announcement that billionaire businessman Jim Justice is running for the Democratic nomination for governor of the great state of West Virginia. Some of it is fairly silly stuff.

The Daily Mail for some reason thinks that having someone who can spend as much money as he wants enter the race is a good way to encourage other candidates to run in next year’s election.  The Gazette wants readers to believe that Justice’s candidacy is proof that West Virginia’s Democratic party — which just lost both houses of the Legislature and another congressional seat — is “vital” and “dynamic.” Over at West Virginia MetroNews, Hoppy Kercheval is just glad that the Justice campaign will add to a “compelling game” that will provide plenty to talk about on the radio.

As best I could tell, the only media outlet that didn’t bury the lead was National Public Radio, which used the headline: Mine Owner, Delinquent On Safety Fines, Announces Run For West Virginia Governor for its blog post about the Justice announcement. NPR’s Howard Berkes explained:

NPR and Mine Safety and Health News reported in November that Justice had failed to pay close to $2 million in government mine safety penalties. The mines involved had an injury rate in the previous five years that was double the average rate for coal mines, according to the NPR/MSHN analysis.

Sure, other and more local media outlets included mention of this. But Howard was the only one who made it the thrust of his coverage of the Justice announcement. Part of that is simply because tying it in to NPR’s remarkable series about unpaid safety fines (including a feature on Justice that was headlined Billionaire Spent Millions In Charity, But Avoided Mine Fines) was the hook for Howard covering the story in the first place. But perhaps this is also a case of an outsider seeing things more clearly and being willing to be a bit more honest than the rest of us.

It’s tempting to write off Justice’s unpaid safety fines — along with pending environmental fines and other allegedly unpaid bills (see here, here and here) — as just a function of the current downward spiral in the Appalachian coal industry, as  Gazette editorial opined last year (“It’s a shame that an albatross hangs around [Justice’s] neck, a part of the plight of Appalachian mining.”)

Such conclusions ignore the long line of Gazette reporter Dr. Paul Nyden’s stories about Justice’s Bluestone Coal being the coal producers who owed substantial sums to the state’s old workers’ compensation fund (see here, here and here). This kind of thinking also looks beyond the very real results of mine-safety violations, which we’ve written about before here and here.

Perhaps the Justice gubernatorial campaign should be viewed, at least in part, through the context of the big coal news that happened the day after his announcement: the second Chapter 11 bankruptcy filing of Patriot Coal. Interestingly, just a few days before Patriot’s bankruptcy filing,  the top story in Sunday’s Gazette-Mail was about the federal Office of Surface Mining Reclamation and Enforcement warning state officials that “the precarious financial situation that many of the state’s coal companies find themselves in today” could spell huge trouble for the Department of Environmental Protection’s abandoned mine cleanup program.

While OSM didn’t name Patriot, one of the biggest concerns raised by the agency’s Charleston field office director, Roger Calhoun, was related to the potentially huge costs of selenium treatment at Patriot’s mountaintop removal sites across Southern West Virginia. Of course, it was mostly citizen groups and their lawyers — not OSM or other federal (let alone state) regulatory agencies that really pushed Patriot and other coal companies to begin dealing with their selenium problems.  As Patriot’s chief operating restructuring officer Ray Dombrowski said in a bankruptcy court filing this week:

Several citizen lawsuits brought by non-governmental organizations have also stressed the Debtors’ financial condition. The Debtors have incurred significant costs to comply with these laws and regulations.

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Patriot Coal files Chapter 11 — again

May 12, 2015 by Ken Ward Jr.

patriotlogoHere’s the new filing this morning in U.S. Bankruptcy Court in Richmond, Va., from Patriot Coal Corporation.

This comes only a few weeks after Patriot announced a major management shakeup (see here and here), and as the company was working with financial advisers to come up with a restructuring plan.

And, obviously, it wasn’t so incredibly long ago that Patriot emerged from a previous Chapter 11 bankruptcy process. In a press release just issued, Patriot said that the company “intends to complete its review of strategic alternatives and present a value-maximizing restructuring plan to the Court as quickly as possible.”

The release continued:

Patriot expects its customer shipments and mining operations to continue in the ordinary course during the restructuring process. The Company has received a commitment for $100 million in “debtor in possession” (“DIP”) financing led by a consortium of the Company’s secured debt holders to support its continued operations. Upon approval by the Court, the DIP financing, combined with cash generated from ongoing operations will provide sufficient liquidity to support the business during the restructuring process.

Bob Bennett, President and Chief Executive Officer of Patriot, said:

In light of the challenging market conditions, and after a comprehensive review of our alternatives, the Board and management team have determined that this process represents the best path forward for Patriot and its stakeholders.  Patriot is dedicated to operational and environmental excellence and, as always, we remain committed to operating safely and serving our customers throughout this restructuring process. We greatly appreciate the continued support of our customers and our suppliers and the ongoing hard work of our employees.

 

OSMRE worried about coal’s legacy liabilities

May 8, 2015 by Ken Ward Jr.

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It’s been a while since we checked in on the status of West Virginia’s Special Reclamation Fund, the pot of money that’s supposed to ensure mines abandoned by operators since passage of the 1977 federal strip mine law are properly reclaimed. Given the ongoing downward spiral of the nation’s coal industry, there have been several recent media accounts about potential problems, given huge reclamation liabilities of several major coal producers (see here, here and here).

So, on Thursday morning, I decided to drop by the regular meeting of the state Department of Environmental Protection’s Special Reclamation Fund Advisory Council, a panel formed to keep an eye on the SRF and make sure it’s adequately funded. (By the way, I posted a copy of the fund’s most recent annual report here, for anyone who is interested)

The first thing on the agenda was a presentation from DEP officials that, in some ways, boils down to the agency’s continued unhappiness with having to live with court rulings that require pollution discharge permits for the SRF’s water treatment sites that have point-source discharges (see here and here for background on that).  DEP officials believe that these permits and their associated pollution limits aren’t really doing much to improve watershed-wide water quality, especially in areas affected by acid mine drainage.  Agency officials believe other approaches might do more good, and use money more wisely.

Maybe they’re right about that. But there’s the little issue of the Clean Water Act, and its mandate that no pollution discharges be allowed without permits. Nobody from DEP who attended Thursday’s meeting could really explain exactly how they could avoid the point source permits and still comply with the law.

Anyway, I think the big story at the SRF Advisory Council meeting was really discussion of this new letter to DEP Secretary Randy Huffman from Roger Calhoun, director of the Charleston field office of the federal Office of Surface Mining Reclamation and Enforcement:

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Blankenship wants another trip to Vegas

May 6, 2015 by Ken Ward Jr.

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The latest in the Don Blankenship criminal case is this new filing today, in which the former Massey CEO — free on $5 million bond pending trial — asks the court for approval for another trip to Las Vegas. The new filing says:

Mr. Blankenship respectfully requests permission to travel home to Nevada during the Memorial Day holiday, from May 23, 2015 through May 30, 2015, to attend to personal matters, including to visit a dentist and to meet with attorneys located there.

Blankenship’s proposals for travel have caused controversy in the case before, and now defense lawyers are pointing out:

Mr. Blankenship has not been home since Thanksgiving.

New map project highlights mountaintop removal

April 28, 2015 by Ken Ward Jr.

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There’s a new mapping project out today from Appalachian Voices, SkyTruth and Google:

A new interactive map released today shows that mountaintop removal coal mining has been expanding closer to communities in Central Appalachia in recent years, posing increasing threats to human health and the environment even as coal production in the region has declined dramatically. The mapping tool, developed by the nonprofit organization Appalachian Voices, is the first-ever, time-lapse view of the proximity of mountaintop removal mines to communities. 

The organization identified 50 Appalachian communities that are most at risk from destructive mining based on the proximity of mining to those communities and the rate at which mining activity has been increasing.  Krypton, Ky., Bishop, W.Va., and Roaring Fork, Va. are the top three communities at risk, while the top three counties with the highest number of communities at risk are Pike County, Ky. (seven), Wise County, Va. (six), and Boone County, W.Va. (five). 

Read more about it here.

Sad news: W.Va. loses a great citizen journalist

April 27, 2015 by Ken Ward Jr.

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I was terribly sorry to read confirmation of the horrible news that was circulating Friday and over the weekend:

Bill Howley, founder and editor of  The Power Line, died in a single-vehicle motor vehicle collision on the afternoon of Thursday, April 23, 2015, while driving to a WV SUN meeting. He was 62 years old.

He died surrounded by the verdant spring hills of central West Virginia, working hard for the future of his state. He took immense pride and joy in his work with fellow West Virginia energy activists.

Bill was probably the best citizen journalist in West Virginia. His blog, The Power Line: The View from Calhoun County,  was essential reading for anyone who wanted to know what was going on in energy issues in West Virginia — especially for those of us who are presumably paid to write about such things. Bill frequently broke news on his blog, and more importantly, he provided key context, background and analysis of what was going on with issues like power line proposals, clean-energy markets, and the dumping of coal-fired power plants onto West Virginia consumers.

Bill’s blog provided invaluable watchdog reporting about West Virginia energy companies, and put the constant harping against clean energy from West Virginia elected officials into some perspective, with posts like this one — I believe his last published work — about the fight against the future in Hawaii.

Over the years, Bill was pretty tough on those of us who make our living covering the news in West Virginia (see here, here, here and here). He was often right about the weakness of media coverage of these issues, though he and I used to have friendly arguments — well, I considered them friendly, and I hope he did — about why that coverage wasn’t better. And once you got to know Bill, and he saw you were willing to put in the time to understand complicated stuff, he would spend countless hours trying to unpack complex stuff.

What I’ll remember most was that Bill seemed to really love what he was doing. The tone of the progressive movement in West Virginia can be pretty rough these days. There’s a lot of anger and hostility, aimed even at folks who are generally on the same side of trying to move our state forward. Personally, I never got that from Bill. He was always fun to talk to and spend time with, no matter how complicated or even depressing the topic of the day happened to be.

This is most painful for Bill’s family and close friends. I can imagine how they feel. Sunday was the anniversary of the car accident that killed my father. So my heart goes out to Bill’s loved ones. I hope they find some peace in knowing how many people Bill touched with his work.

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GOP leader pleased with UBB prosecutions

April 23, 2015 by Ken Ward Jr.

Mine Explosion Congress

There was a fascinating little line in the opening statement given today by House Education and the Workforce subcommittee Chairman Tim Walberg, R-Michigan, at a hearing where lawmakers received an update on the administration’s mine safety efforts:

Upper Big Branch is a terrible reminder that bad actors will look for ways to cut corners and jeopardize the well-being of their workers, despite a moral and legal obligation to make safety the number one priority. I am pleased that those who had a hand in the Upper Big Branch tragedy are being held responsible. It is taking some time, but justice is being served.

These comments come, of course, as U.S. Attorney Booth Goodwin here in West Virginia prepares for trial on the criminal charges he and Assistant U.S. Attorney Steve Ruby have pursued against former Massey Energy CEO Don Blankenship.

And, the comments — coming from a Republican subcommittee chair in Congress — are particularly interesting, given how Blankenship’s defense team has tried to portray his prosecution as nothing more than an effort by Democrats to shut down a conservative critic.