Mergers and acquisitions are often an effective means for companies to lower costs. Meanwhile, their customers (electric utilities) are faced with long-term decisions as far as providing affordable power.

The news that Murray Energy was acquiring a controlling interest in Foresight Energy caught many by surprise. What the two companies have in common is longwall mines and relatively low production costs, which were attained by making sizable capital investments in large bituminous operations. Murray Energy, which produced about 63 million tons in 2014, is privately owned, and Foresight Energy (23 million tons in 2014) is publicly held. More news about the deal was breaking as of press time as Murray Energy was reworking the financial details (see News, p. 5). A combination would place Murray Energy in the No. 4 position among U.S. coal producers behind Peabody Energy, Arch Coal and Cloud Peak Energy. On a Btu basis, the field is now much closer and many of the mines involved in this transaction are located relatively close to scrubbed coal-fired power plants.

Reality hit home in coal country this month when American Electric Power sent Worker Adjustment Retraining Notifications (WARN) to employees at six of its coal-fired power plants in four states. Casualties from President Obama’s War on Coal, the closures were first announced four years ago and they will take effect at the end of May. The list of plants includes Philip Sporn, Kammer and Kanawha Valley in West Virginia; Muskingum River in Ohio; Tanners Creek in Indiana; and Glen Lyn in Virginia. While the layoffs will be troubling to many families, the news on the power side of the business is not all bad. Many utilities are making investments to continue burning coal (see “Utilities Shelling Out Millions,” p. 18).

From the Let Them Eat Cake side of Central Park, the coal industry watched in disbelief as former New York City Mayor Michael Bloomberg donated another $30 million to the Sierra Club (see Dateline Washington). It’s no secret that the Sierra Club and other environmental activists are crafting policy for the Obama Administration and the Environmental Protection Agency (EPA).

During mid-April, Congress and the courts will evaluate the EPA’s policies. The House Committee on Energy and Commerce Subcommittee on Energy and Power will hear testimony on Chairman Ed Whitfield’s (R-Ky.) proposed Ratepayer Protection Act, which will enable governors to protect states from the EPA’s costly carbon dioxide regulations.

The U.S. Court of Appeals in Washington will hear arguments in a case brought by Murray Energy and 15 states challenging the agency’s authority on the same policy. Nearly 28,000 coal miners have lost their jobs since EPA issued its power plant rules in December 2011. Hopefully Congress and the court will set the EPA straight.

Steve Fiscor, Coal Age Editor-in-Chief