Compounding the crisis has been its suddenness. Few analysts predicted it, but then few foresaw the return of the “four horsemen:” the prolonged collapse in natural gas prices, China’s economic crack up, an unusually warm winter adding to inventories and, not least, the Obama administration’s relentless determination to salvage a presidential legacy at the expense of our industry.
Small wonder the result has sent chills throughout the economy as mines close, wells are stopped, exploration comes to a halt, capital projects are put on hold and, of course, thousands lose their livelihoods. According to U.S. Department of Labor data, mining lost more jobs last year than in any year since 1986 — some 129,000, including contract employees, with coal losing by far the lion’s share.
But here’s a twist that offers some consolation. The pain has been so far-reaching it has even touched those unlikeliest of victims: Obama’s regulatory agencies. Yes, the very agencies that have contributed to this dismal state of affairs by driving the industry out of the market with punitive rules and guidance. These same agencies are now facing a dilemma. Fewer mines mean a smaller industry to regulate and fewer opportunities to demonstrate a reason to spend taxpayer dollars on needless bureaucracy.
Spare a tear for these agencies. This has become a major crisis at the Mine Safety and Health Administration (MSHA) and the Office of Surface Mining (OSM). They’ve had to somehow argue with a straight face for bigger budgets even as they oversee a smaller industry. How can they do this?
With nerve and gall, that’s how. OSM asked for more regulators to implement the Stream Protection Rule that would neutralize 400 billion tons of recoverable coal, more than half of the coal in the country. Officials actually said the need for more staff would offset the loss of mine jobs. That’s a relief. MSHA, too, wanted more money, for mine inspectors — to inspect fewer mines. This is why Bernie Sanders calls for higher taxes, to ensure that the last man standing in the way of a coal mine is not a bankruptcy lawyer but a regulator.
Unfortunately for these agencies, House appropriators weren’t moved. Not after the National Mining Association (NMA) pointed out the absurdity of asking for a bigger budget and more regulatory attorneys to throw more mine operators out of business and more of their employees out of work.
To be fair, MSHA and OSM were only doing their master’s bidding. Vetoing perfectly good mine permits, saddling operators with a humongous, knee-buckling regulatory load and proposing guidance calculated to keep coal in the ground — this is the White House’s game plan. Regulators were merely following orders.
Expect more of the same this year. In his farewell State of the Union speech, the president — beset by a slowing economy, collapsing manufacturing industry, his foreign policy in disarray — assured nervous Americans he would accelerate the move away from affordable energy to costlier energy. No more “subsidies” for federal coal lease sales; more “investment” for renewables.
His White House career is certainly proof that elections have consequences.
Luke Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.
