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Mutual Respect Instills Loyalty

This edition of Coal Age has a real treat for readers who can appreciate a good story about a “family-run” coal operation. It contains profiles on the Usibelli coal mine and Southern Coal Corp. Even though they are separated by great distances, they share a lot in common. Both are privately-held by families that genuinely care about their workers and the surrounding communities. They operate in rather remote parts of the country. The people that work for them want to work for them—a sign of a high level of loyalty and respect.

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West Virginia Braces for a Major Hit

As this edition of Coal Age goes to press, the events unfolding in Appalachia do not bode well for the coal business. The U.S. Environmental Protection Agency (EPA) is talking out both sides of its mouth holding up mine permits, trumping U.S. Army Corps of Engineers decisions, while saying that it is not against coal mining. Mining associations and labor groups find themselves powerless to protect shovel-ready jobs. Politicians in West Virginia have all but abandoned the coal miners. Environmental activists and coal supporters clashed at public hearings held throughout the region. Saying outward hostility toward the Obama administration is growing in coal country would be a major understatement. With tension mounting, we dispatched Lee Buchsbaum to cover the Appalachian permitting debacle. What he found was coal operators and engineers at the end their ropes, unafraid to express an opinion (See Appalachian permits article on p. 32).

While writing about the coal rally last month, I pondered whether anyone outside West Virginia heard what was being said. Apparently Washington was listening and surface miners in Appalachia have become the whipping boy for the EPA. Throughout all of this, the coal miners heard nothing but silence from Governor Manchin (D-WV), and Senators Byrd (D-WV) and Rockefeller (D-WV). Only Congressman Nick Rahall (D-WV) had the intestinal fortitude to question EPA administrator Lisa Jackson.

During a hearing of the House Committee on Transportation and Infrastructure, on which Rahall serves as the Vice Chairman, Rahall asked Jackson whether she believed that clarity and certainty is the goal in the EPA’s reviews of coal mining permits. She confirmed that it was something the EPA owes the mining community. Following up, Rahall mentioned that some believe that the EPA wants to end all coal mining. Jackson said, “Unequivocally, neither EPA nor I personally have any desire to end coal mining, have any hidden agenda, any agenda whatsoever, that has to do with coal mining as an industry.”

The same day, the EPA sent a letter to the U.S. Army Corps of Engineers questioning the permit issued for Arch Coal’s Spruce Fork No. 1 mine. When fully developed, the Spruce Fork mine would be the largest mountaintop mine in West Virginia. The EPA has never before used its authority to review a previously permitted project since Congress enacted the Clean Water Act in 1972. To believe that the EPA will stop here would be very naïve. This is not just a mountaintop mining issue and the rest of the industry needs to prepare. It’s only a matter of time before the agency begins to question surface disturbances for underground mines, prep plants and refuse impoundments. The consequences of these actions will be enormous.

The die may have already been cast for future mountaintop mining operations. Eventually the lawyers from the mining companies will right this regulatory wrong. Meanwhile, small- and medium-size coal operators, with six to 12 months of permitted reserves remaining will go broke. Larger mining companies will view future mountaintop mining operations as too risky. West Virginia could lose as much as 50 million tons per year in production during the next few years. As many as 5,000 jobs are at risk. With a 7:1 extended impact, more than 35,000 people or more will be affected. Life is tough in southern West Virginia and eastern Kentucky, and it’s not going to get any easier under the Obama administration.

Steve Fiscor, Coal Age Editor-In-Chief
[email protected]

Coalfield Rallies Inspire Thousands

According to press reports, a crowd of more than 75,000 gathered in Holden, W.Va., to celebrate Labor Day and show their support for American workers. The rally, hosted by Friends of America and sponsored by roughly 100 businesses and organizations, was emceed by rocker Ted Nugent and featured live performances by country music stars Hank Williams Jr. and John Rich. The focus of rally, according to Friends of America, was the threat overreaching government, environmental extremists, and corrupt corporate interests pose to American labor.

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Incremental Advances in Technology Help Coal Miners Hold Costs Down

As it does every month, this edition of Coal Age offers a little something for everyone. In this month’s cover story, Lee Buchsbaum frames North Dakota lignite miners in a very pretty picture. Next time, we will send him there in January and see how the story compares. Joking aside, the surface mines in that region are some of the most productive mines in the country and the power plants they feed are some of the cleanest. They have a long-term captive relationship that insulates them to a certain degree from the market swings created by the economic downturn.

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U.S. Coal Operators Face Trying Times

A coal miner’s disposition has a huge impact on how they view the world. If they are working at a surface mine in central Appalachia (CAPP) these days, they probably feel like an endangered species. Likewise, if they were working with a company that rallied on high spot prices with large uncommitted coal positions last year, they might be discouraged by the current soft market conditions. Those working for coal companies with mine permits, long-term supply agreements, and good reserves, are probably feeling fairly secure, albeit guarded optimism.

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