Another miner killed on the job

June 29, 2015 by Ken Ward Jr.

Mine Explosion

The Associated Press has the bad weekend news from Pennsylvania:

Authorities say a coal miner was killed  over the weekend in an accident at a mine in southwestern Pennsylvania.

The Greene County coroner’s office says 55-year-old John Kelly of Albright, West Virginia died shortly after 1:30 a.m. Sunday in the emergency room at Southwest Regional Medical Center.

Authorities said Kelly had been injured while working at a mine in Mount Morris.

The coroner’s office said preliminary information indicates that he was injured by “some type of air shaft/mine door coming down upon him.”

The cause and manner of death are pending a final autopsy.

West Virginia Public Broadcasting had additional details:

At approximately 12:15 AM on June 28, 2015, John William “Bill” Kelly, 55 years old, of Albright, West Virginia a long-term employee of Mepco, LLC, was fatally injured. According to a release from Mepco, Kelly died in an accident at the Company’s 4 West Mine located near Mount Morris, Pennsylvania.

This is the 8th coal-mining death in the U.S. this year.

 

A different kind of coalfield discussion

June 25, 2015 by Ken Ward Jr.

FILE - In this Jan. 20, 2015 file photo, Sen. Shelley Moore Capito, R-W.Va., accompanied by Senate Majority Leader Mitch McConnell of Ky., speaks during a news conference on Capitol Hill in Washington. Senate Republicans discussed a proposal Wednesday to temporarily help millions of people who could lose federal health care subsidies should the Supreme Court annul the aid, which has been a pillar of President Barack Obama’s health care law.  (AP Photo/J. Scott Applewhite, File)

Earlier this week in Washington, they had another one of these congressional hearings that beltway insiders thrive on about coal and climate and economics.

West Virginia’s own Republican Sen. Shelley Moore Capito was there, chairing the meeting of a Senate Environment and Public Works Committee meeting called, “The Impacts of EPA’s proposed Carbon Regulations on Electricity Costs for American Businesses, Rural Communities and Families.” Sen. Capito opened the hearing by saying:

I am not exaggerating when I say almost every day back home in West Virginia, there are new stories detailing plants closed, jobs lost, and price increases … It is important to note that all electricity has to come from somewhere. In many states, odds are that it is being imported from a state that relies on coal.  But no one is talking about that. 

While Sen. Capito was leading this hearing, a relatively small, but dedicated bunch of officials from various government agencies were meeting back home in West Virginia. Here’s the lead of the story I wrote about that meeting:

A team of Obama administration officials visited West Virginia this week to promote new programs and proposals to help struggling mining communities and hear about ongoing efforts by a variety of local groups to diversify coalfield economies.

Representatives from the White House and a half-dozen agencies met with economic development officials from state agencies and with a long list of local and regional non-profit organizations for a briefing on President Obama’s proposal to provide hundreds of millions of dollars in coalfield aid as part of his 2016 budget recommendation to Congress.

About 75 people who attended the meeting at Hawks Nest State Park also heard about additional money available through an ongoing companion initiative to provide federal help for local economic development planning and project implementation in communities around the country hit by layoffs as part of the coal industry’s downturn.

Now, a lot of this meeting focused on the ins-and-outs of the Obama programs, and the details of grant application rules and, frankly, a lot of stuff that, while not very sexy, plays a huge rule in how non-profit groups and others can go about creating bottom-up change in our society.  And, a lot of it also highlighted the growing efforts that go on — often without headlines, at least here in Charleston — of local citizens and leaders to try to build stronger communities in our coalfields. The first lesson I learned at this meeting is how much those of us who live in the state Capitol need to do more to understand and encourage such efforts.

But the first thing I saw when I got back to Charleston and started browsing the news was the headline from Inside Climate News: Aid Package for Coal Country Goes Ignored by Congress. They reported:

A massive $3 billion package to help struggling coal communities transition to a new economy is sitting unappropriated in the Republican-led Congress. And lawmakers are saying little—at least publicly—about if and how they ever plan to support it.

Read the rest of this entry »

New York Times: ‘The People v. the Coal Baron’

June 22, 2015 by Ken Ward Jr.

blankenshiphearingleaving

Over the weekend, The New York Times published an interesting West Virginia Day offering:  A lengthy story about former Massey Energy CEO Don Blankenship. The story dug deep into the archives of various Blankenship controversies, and understandably made much about the big trial that’s coming up in October.

The story was what folks in the business call “a good read,” and obviously a lot of folks with a keen interest in all things Blankenship and in the pending criminal case (myself included) were posting the link and commenting on it through various social media outlets.

But gosh, the story got the number of counts and the potential sentence that Blankenship faces wrong, with the Times apparently being unaware of the superseding indictment that consolidated the charges into three felony counts and trimmed one year off what what was originally a 31-year maximum sentence.

Frankly, I was a little surprised that the Times did this particular piece, given that many of the same themes — especially how unusual it is in these parts for a coal CEO to be held accountable through a criminal trial — were covered in a previous piece the Times did shortly after the original indictment back in November 2014.

Read the rest of this entry »

Happy West Virginia Day!

June 20, 2015 by Ken Ward Jr.

Even the Pope can’t break coal’s grip on W.Va.

June 19, 2015 by Ken Ward Jr.

Pope Francis waves as he arrives for his weekly general audience, in St. Peter's Square at the Vatican,  Wednesday, June 17, 2015. (AP Photo/Andrew Medichini)

Pope Francis waves as he arrives for his weekly general audience, in St. Peter’s Square at the Vatican, Wednesday, June 17, 2015. (AP Photo/Andrew Medichini)

It’s obviously no secret that most West Virginia leaders would just rather not talk about global warming  and the coal industry’s role in the climate crisis. But you would have thought that maybe … just maybe, hearing more than a few words from the Pope on these matters would make the usual suspects be quiet and listen. Doesn’t look like it.

Take the statement issued by West Virginia Coal Association President Bill Raney:

… There are many reasons for these improvements, but none, perhaps as vivid, as the electrification of parts of our world, which came most successfully with the continued and improved use of fossil fuels.  I am concerned the Pope does not acknowledge that with his challenge to all of us to improve the way we use the indigenous resources our Lord has blessed us with in this world …

I wish Pope Francis would have traveled to Logan, Mingo or any of our other West Virginia counties where miners have been put out of work because of the uncertainty created by polices that mandate impossible requirements that reach beyond today’s technology.  The suffering of that unemployment is vivid, stark and extremely concerning. 

It’s times like this that you have to wonder if West Virginians really understand the world, or the context of their complaints about the downturn of the coal industry and its economic implications. In his new “On Care for Our Common Home,” Pope Francis actually has a lot to say about poverty. But he’s not talking about whether folks can make the payments on their big pickup truck. And what he has to say is important for anyone who really wants to understand the context of this global problem and the path to finding real solutions. For example:

A true “ecological debt” exists, particularly between the global north and south, connected to commercial imbalances with effects on the environment, and the disproportionate use of natural resources by certain countries over long periods of time. The export of raw materials to satisfy markets in the industrialized north has caused harm locally, as for example in mercury pollution in gold mining or sulphur dioxide pollution in copper mining. There is a pressing need to calculate the use of environmental space throughout the world for depositing gas residues which have been accumulating for two centuries and have created a situation which currently affects all the countries of the world. The warming caused by huge consumption on the part of some rich countries has repercussions on the poorest areas of the world, especially Africa, where a rise in temperature, together with drought, has proved devastating for farming. There is also the damage caused by the export of solid waste and toxic liquids to developing countries, and by the pollution produced by companies which operate in less developed countries in ways they could never do at home, in the countries in which they raise their capital: “We note that often the businesses which operate this way are multinationals. They do here what they would never do in developed countries or the so-called first world. Generally, after ceasing their activity and withdrawing, they leave behind great human and environmental liabilities such as unemployment, abandoned towns, the depletion of natural reserves, deforestation, the impoverishment of agriculture and local stock breeding, open pits, riven hills, polluted rivers and a handful of social works which are no longer sustainable”

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How W.Va. can meet EPA’s carbon rules

June 15, 2015 by Ken Ward Jr.

mpplant1_i0910241450161
Here’s an idea … instead of spending all of their time just complaining about U.S. Environmental Protection Agency rules, a couple of groups in West Virginia have put their heads together to come up with recommendations for how the state could comply with EPA’s proposed Clean Power Plan. You can read the new report — just out this morning — from the West Virginia College of Law’s Center for Energy and Sustainable Development and Downstream Strategies here.

In short:

Achieving compliance with the Clean Power Plan presents a number of challenges for West Virginia. The state’s heavy reliance on coal-fired electricity generation and the importance of the coal industry in the state economy mean that West Virginia will bear a disproportionate impact from the proposed rule as less coal is burned at power plants within the state, and as other states that have historically imported West Virginia coal reduce their consumption. Burning less West Virginia coal at power plants—both within West Virginia and around the country—means fewer coal mining jobs and reduced severance tax revenue for the state and municipalities. While these challenges appear stark in the face of carbon pollution mandates, they have persisted in West Virginia for decades and in recent years have grown increasingly more pressing as market forces converged with increasingly stringent environmental regulations. West Virginia is uniquely positioned to adapt to these changes and meet the many challenges facing the Mountain State. While West Virginia power plants must reduce coal consumption to comply with the Clean Power Plan, the state’s utilities can at the same time make new investments in other energy resources developed in West Virginia.

Policymakers in West Virginia can mitigate the negative impacts of the Clean Power Plan and take advantage of the opportunities it presents by utilizing the full flexibility provided by the rule to shape a strategy for West Virginia that reflects its unique circumstances and leverages its strengths. West Virginia is fortunate in that it has tremendous energy resources in addition to coal, and these other resources—including natural gas, renewable energy (wind, solar, hydropower), and energy efficiency—are relatively untapped. Implementing the legislative and regulatory policy recommendations in this report would create a climate that promotes new investment in renewable and distributed generation technologies, energy efficiency, and natural gas–fired generation. By spurring innovation and diversifying the state’s electric power sector, Clean Power Plan compliance would reduce carbon pollution and provide West Virginians with energy savings and new economic opportunities.

We’ll have more on this later, and there’s also a piece on it out this morning from West Virginia Public Broadcasting.

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.

Read the rest of this entry »

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).

Read the rest of this entry »

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.

Read the rest of this entry »

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:

 

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.

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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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