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Coal Report for March 27, 2015

former Kentucky Representative Keith Hall, who is set to face bribery charges in April regarding coal operations he owned in Eastern Kentucky // photo form LRC Public Information

Hard times continue for central Appalachian coal. According to a report from Platts Financial, industry analysts say that 72% of the coal currently being mined in central Appalachia is unprofitable in today’s coal market. In part, we are being affected here by larger forces affecting coal all over the country, including competition from cheap natural gas and a global slump in the coal price. But what’s hurting our region so much is the fact that the so-called easy to reach coal has already been mined, and the seams that are left are more and more expensive to mine, and less and less productive. The report doesn’t say that local production is going to crater overnight because mines aren’t profitable, because many mines stay open that don’t turn a profit, whether it’s to fulfill a contract or because the owner wants to sell. But the report does warn that things don’t seem likely to get better for local coal.

In southwest Virginia, the numbers bear out the difficulties facing Appalachian coal. According to the Bristol Herald-Courier, southwest Virginia is producing just half of the coal it did ten years ago. Back in 2004, southwest Virginia produced 30.2 million tons of coal. But in 2014, that number was down to just 15.3 million. The amount of miners has shrunk as well, but not by as much as you might think—in 2004, it took more than 4,500 employees to mine those 30 million tons. Last year, it took around 3,600 employees to mine half that amount, which means that productivity per Continue reading Coal Report for March 27, 2015

Coal Report for March 20, 2015

mudslide-lynch

Main St. in downtown Lynch, Ky. following a mudslide where water & debris burst from an old coal mine // photo submitted by a facebook user to the Tri-City News at https://www.facebook.com/tcnky/photos/pb.367489756656269.-2207520000.1427144320./827846020620638/?type=1&theater

March has already been a tragic month in Appalachian coal mines.  3 people have been killed at local mines so far this month, including two people in two consecutive days at mines run by Alpha Natural Resources.  The first accident happened on March 8th, when a section of mine roof and rib collapsed underground at the Marshall County Mine in Marshall County, West Virginia.  One miner was killed in the fall and two more were injured.  The mine was recently purchased by Murray Energy, and was known as the McElroy mine until it was sold.  According to SNL Energy, this mine has a recent history of unsafe conditions.  It was given some 315 citations and orders for significant and substantial violations in a recent 12-month period.

There was also a fatal accident close to home.  Miner David Brummitte of Wise County, Va. was killed on Monday, March 15th at Alpha’s Deep Mine #41 in Dickenson County.  According to MSHA’s preliminary report, Brummitte was a section foreman at the mine, and was killed by a rock fall while performing an inspection.  He became the first miner killed in Continue reading Coal Report for March 20, 2015

Coal Report for February 27, 2015

buffalo-creek

a portion of the aftermath of the Buffalo Creek Flood, which happened 43 years ago this week in Logan County, W.Va.

Another American coal miner has been killed on the job, this time in Pennsylvania.  The Pittsburgh Tribune-Review reports that miner Todd Trimble was killed at the Rosebud Mining Company’s Heilwood Mine in Indiana County.  According to MSHA, he was re-positioning roof mesh and was caught between the roof of the mine and the top of the drill canopy when a piece of the roof collapsed onto him.  He became the second coal miner in the US to die on the job this year.  Both fatalities have happened in Pennsylvania.

In other coal news, for the first time since the early 1900’s, there are no union coal miners left working in Kentucky.  WFPL Radio reports that the last union miners in the state lost their jobs on New Year’s Eve when Patriot Coal idled the Highland Mine in Western Kentucky.  In some ways, the decline of the UMWA parallels the decline of labor all over the country since the Reagan Administration—in 1983, 20% of all workers in the US belonged to a labor union, but in 2014, Continue reading Coal Report for February 27, 2015

Coal Report for February 20, 2015

West Va. billionaire & coal operator Jim Justice // photo from Forbes via http://www.forbes.com/profile/jim-justice-ii/

West Va. billionaire & coal operator Jim Justice // photo from Forbes via http://www.forbes.com/profile/jim-justice-ii/

Despite huge losses in the coal industry in our region in recent years, things could get even worse in 2015, according to The Mountain Eagle.  The Eagle summarizes a report from Energy & Environment News where one analyst said this year could be the “worst year in years.”  Two coal companies with local operations have taken huge losses: just in the last quarter of last year, Alpha Natural Resources lost $122 million, and Arch Coal lost $371 million.  And those companies will likely continue to cut back in 2015.  Alpha idled several West Virginia mines last year, causing massive layoffs, and more layoffs are likely to come.  Arch said its central Appalachian output could fall this year to a low that is “unprecedented.”  Coal use across the country is projected to drop by 50 million tons this year, and with coal prices depressed all over the world, especially in the metallurgical coal market, exports haven’t been able to pick up the slack the way many in the industry had hoped.

Speaking of metallurgical coal, billionaire coal operator Jim Justice has bought back–for just pennies on the dollar–a West Virginia coal company that he sold just a few years ago.  According to the Charleston Gazette, the company is Bluestone Coal, which isn’t operating at the moment but owns metallurgical coal mines, reserves, and complexes in McDowell & Continue reading Coal Report for February 20, 2015

Coal Report for February 13, 2015

future-gen

a rendering of the FutureGen carbon-capture coal-fired power plant that had been under construction in Meredrosia, Ill. // photo via wikipedia at http://upload.wikimedia.org/wikipedia/commons/5/55/Futuregen_DOE_Concept_art.jpg

Because the market for central Appalachian coal has continued to weaken, the sale price of TECO Coal has been reduced by $30 million, The Mountain Eagle reports.  TECO Coal is the parent company of Perry County Coal, Premier Coal, and Pike-Letcher Coal Partners, all of which operate locally.   The operations are ultimately owned by TECO Energy, which operates utilities in Florida and New Mexico.  But TECO has been trying to get out of the coal business, and agreed last year to sell TECO Coal to the Martin County-based Booth Energy.  TECO had asked for $170 million, but because the market for local has continued to slide, TECO agreed to cut its asking price down to $140 million instead.  And Booth Energy will actually only have to pay $80 million of that cost up front, with the other $60 million only being paid if certain production levels are reached.  So it could end up that TECO Coal ultimately gets sold for less than half of the original asking price.

The Charleston Gazette reports that Former Massey Energy CEO Don Blankenship has filed a lawsuit against Alpha Natural Resources, because Alpha announced that it won’t be paying any of Blankenship’s current or upcoming legal fees. Blankenship will stand trial on April 20 for four counts relating to the Upper Big Branch Disaster of 2010.  Blankenship is suing Alpha because he claims that when Alpha bought Massey in 2011, they agreed to cover future legal costs that Continue reading Coal Report for February 13, 2015

Coal Report for February 4, 2015

In his newly-proposed federal budget, President Obama has allocated $1 billion to help Appalachian communities who have been hard-hit by the downturn in the coal industry. The Lexington Herald-Leader reports that the money would come from the federal Abandoned Mine Lands, or AML fund, and it would go toward a variety of coal mine reclamation projects. The $1 billion would be disbursed over a period of five years, and would not require any tax increases. The idea, roughly, seems to be to clean up some of the many issues from old mine sites that have long affected the health & economy of Appalachian coalfield communities, and give local people employment in the process. The AML fund, where the money would come from, is a federal pot of money funded by a tax on every ton of coal that’s mined. It has had billions in it for years, but critics have said that too little of that money ever actually gets spent. So this plan is intended to free up some of that money for reclamation work in communities that need it–and employment–the most.

The Herald also reports (see link above) that President Obama also allocated even more money for Appalachia in his proposed budget, including tens of millions for job training programs for laid off miners and entrepreneurship assistance programs, and nearly $100 million more for infrastructure projects in the region.  He also propposed $2 billion in tax credits for the development of new carbon capture & storage technology that could reduce the pollution from burning coal at power plants. And the budget would also help keep afloat the healthcare & pension funds of some 100,000 retired coal miners and their families. This proposed budget faces a difficult road in Congress, however. Despite the potential assistance for Appalachian kentucky, Senator Mitch McConnell and Rep. Hal Rogers both expressed disapproval for the Continue reading Coal Report for February 4, 2015