West Virginia: Looking Forward

By T.L. HEADLEY, MBA, MAT, MA
I have read a lot of people talking about the economic problems currently faced by Terry 2West Virginia. It seems the eco-left doesn’t want to own its crime and accept that their fight to kill coal with the help of the Obama Administration has essentially destroyed the economy of an entire region of this country.
They cast about looking for excuses — natural gas, the so-called “resource curse”, pretty much anything they can latch onto to deflect criticism and responsibility.
They call for the passage of additional taxes on coal, oil, gas, timber, etc. Arguing that these industries that remain should be forced to bear even more of a burden, pushing them further out of the market, in order to pay higher taxes (a “future fund”) to support social programs to help the poor — poor that resulted in large part from their own brain-dead policies.
Let’s look at some of their claims….
First, there is no “resource curse.” To claim so is to blame the band-aid for the cut. West Virginia’s limiting factor is its geography. These mountains isolate people into small pockets and severely limit the single most important factor in diversifying an economy – easily developable land. The result is a small population living in small pockets that can’t support a broad-based economy. The poverty that would otherwise exist there is alleviated by the resource — which is not dependent on population or even infrastructure beyond the basics of a road or rail system to get their product to market.
Second, some talk about the need for a “future fund.” We have had one for 40+ years in the coal severance taxes that have been paid — which has amounted to more than $2 BILLION in the past four years alone. Could they have been started earlier? Perhaps, but what has been the result of having them for the past four decades?
They were squandered in large part by using them to fund holes in the budget of the state. Very little (seven percent of collections) was targeted back to coal-producing counties. Most went to large population areas like Charleston and the eastern Panhandle.
Clearly, had the 10s of BILLIONS of dollars collected over the past 40 years been set aside as a revolving loan fund used for economic development, combined with a focused effort to turn former surface mine lands into economic development hubs or even to get counties to develop true economic development plans, we would not be looking at a modern day dust bowl in the coalfields.
Even a portion of that money would have made a tremendous difference. Instead, the money went into the black hole of the state budget and county economic development efforts were invariably headed up by “Boss Hogg’s nephew Hughey Hogg.”
Yes, there is plenty of blame to go around, but let’s not blame the band-aid for the cut.
There is still time to turn this around, but we need to support the industry that can and has provided us with the economic base to work from over the past 70 years. There is 200 years of coal left in the ground in West Virginia. We need to concentrate on fixing the problems that are hurting coal mining, then make much better use of the money coming from that industry over the next few decades.
THAT is the path forward.

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Scraps from the Table: Obama’s Plan an Insult to West Virginia’s Coal Mining Families

By Bill Raney, president
West Virginia Coal Association
Let’s say you are walking on the street and a man comes along, pulls out a gun and steals your

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Bill Raney

wallet, all your money and credit cards, your watch and your wedding ring. He starts to walk away, but turns around and hands you back a five dollar bill and says he didn’t “want to leave you with nothing.”
Would that change your opinion of the man? Of course not, he’s a thief and it was YOUR money to begin with. The only reason he gave you back any of the money was to placate his own guilt.
The Charleston Gazette suggests that we should be grateful to someone who has, for more than six years, systematically done everything possible to destroy America’s coal industry, our coal miners’ jobs and families as well as the counties and communities that rely on us mining coal, all because he now wants to toss a few dollars back to his victim. This is simply guilt money and the most damaging type of hypocrisy.
While I am happy that the Gazette has finally acknowledged the pain the Obama War on Coal has caused the coalfields communities, their endorsement of Obama’s “plan” is little more than the words of a co-conspirator in the mugging trying to absolve their own guilt.
Now, we should do everything we can to take the money because the people of the coalfields ARE hurting and we want to do whatever we can to help, but it’s important to put and keep this Obama “payoff” into perspective.
According to the Gazette, The White House 2016 budget contains a “Power Plus Plan” that would:
• Provide $200 million per year for five years to clean up abandoned strip mines, which could create multitudes of jobs for laid-off miners;
• Provide $5 million for “brownfields” work cleaning up pollution at coal-fired power plants.
• Provide $20 million to retrain ex-miners and help them find new jobs;
• Provide $25 million to the Appalachian Regional Commission for efforts to create new businesses and upgrade water, sewer and telecommunications infrastructure;
• Provide $6 million more for “place-based regional innovation efforts” to spur jobs in distressed coal communities; and,
• Award $3.9 billion over a decade to shore up pensions and medical care of retired miners.
So how much of this “Obama payoff” can West Virginia realistically be expected to get?
In all likelihood it would be a small fraction of the total package – on the order of a few million dollars if you set aside the $3.9 billion that would be used to provide for miner and retiree pensions. Never mind that every dime of this money came from the coalfields to begin with — paid into the AML Fund by companies as a portion of their sale price of coal. So we are going to get back a small portion of the money we paid all these years?
By my calculation that is $256 million for the first year and $200 million in the subsequent four years in temporary aid for all the coal-producing states! In addition, $3.9 billion will be parsed out over ten years to “shore up” pensions and medical care for retired miners. Now it is important to say we applaud the effort to make sure mine retirees and their surviving spouses are provided for. It’s also important to say those pensions would likely not be in trouble today were it not for the actions of this administration. In fact, we have warned for the past seven years that this was coming, but neither the Obama Administration nor their supporters in the media would listen. I don’t think they ever considered or contemplated the far reaching negative impacts of their orders and behavior because reduced production brings reduced payments to these funds and no one should every be denied their pensions they‘ve worked their whole life to earn!
It is also important to understand that is not all of the remaining $256 million in temporary aid is directed to West Virginia or even Appalachia (as apparently the Gazette would have us believe). This would be spread out across all the “coalfields” of the United States – all 20+ states and I am sure some would also find its way to the “coalfields” of Chicago and Los Angeles since they use electricity!
To put that into clear perspective, the coal industry has historically provided about $3.4 BILLION EACH YEAR in wages in West Virginia alone and $26 BILLION EACH YEAR to the state’s gross state product. Obama has attempted to systematically strip us of that economic base.
The Gazette would have you believe the decline in the coal industry is “attributable to a flood of cheap natural gas, to depletion of good Appalachian coal seams, high company debt and the fall of coal prices,” but this is neither the whole nor accurate story. We could have wrestled with each of these factors in a free market of competition, but when our own government has it’s “foot on our throat”, picking winners and losers through the Obama assault on coal and its use, each of these factors are accentuated through the uncertainty that it has perpetrated.
The coal seams of Appalachia (West Virginia) are not in significant decline. In fact, underground productivity is at near record highs. Our overall productivity, however, has declined due to the reduced use of highly productive surface mining. Falling coal prices are directly attributable to the war on coal and the push to move the electric generation to less use of coal by the forced closure of much of the nation’s coal-fired power generation fleet. This so-called “cheap” natural gas is actually 31% MORE expensive on a per million Btu basis than West Virginia coal and is still below its market breakeven price even at this price level. And company debt is the direct result of these factors making it difficult if not impossible for some of these companies to compete.
Now the Gazette and other media outlets have been at the forefront of aiding this assault on America’s mining families, perhaps not realizing the long-term damage it would do to people. Today, rather than accept the responsibility for the policies that are threatening the futures of so many, the Gazette and others are trying to cast the Obama mugging of Appalachia as a “gift to help us overcome our economic problems.”
If you really want to help West Virginians, and Kentuckians, and southwestern Virginians, and all the others across the coalfields of this country, you wouldn’t just throw us some table scraps, you would get out of the way and help us put our miners back to work.

Del. Rupie Phillips: “Just Say No to EPA”

SAVANNAH, Ga. – Del. Rupert “Rupie” Phillips, D-Logan authored a resolution adopted by web1_phillips_rupert-CMYKthe Southern Legislative Conference (SLC) calling for member states to take action against the Environmental Protection Administration’s Clean Power Plan. The resolution was adopted on July 19 by the energy and environment committee at the four-day annual meeting in Savannah, Georgia.

“Through the Clean Power Plan, the EPA has once again produced another far-reaching, overly burdensome regulation. They’re continually tying the hands coal-producing states and the effects have been absolutely devastating for southern West Virginia.”

Del. Phillips added, “It’s time to draw a line in the sand. The EPA is pushing us around like they are a bunch of punks. I just want the states to stand together and say ‘no.’”

The adopted resolution states, “The Southern Legislative Conference of The Council of State Governments finds that EPA’s Clean Power Plan interferes with the sovereign powers of the states to regulate electricity within their borders and to ensure a reliable and affordable supply of electricity for their citizens. Therefore, The Southern Legislative Conference of The Council of State Governments urges State Attorneys General to take all legal actions after EPA issues its final Plan to prevent unlawful obligations from being imposed on states, electricity providers, businesses and citizens, up to and including, at each state’s discretion, refusing to submit Clean Power Plan implementation plans to EPA.”

Del. John B. McCuskey, R-Kanawha also attended the conference and supported the measure saying, “As we pass this resolution through the SLC, I am proud to stand with Delegate Rupie Phillips to push back against harmful federal overreach which unfairly targets the hard working men and women of our state’s coal economy. The people of our state don’t want anything extra, they just want a chance to compete, and it is our hope to ensure that these proud people are given the opportunity to continue to power America. The EPA needs to realize that the jobs lost due to their policies are not just statistics, these are real people, and their suffering is real.”

Several other delegates who attended the conference also supported the measure including Del. Gary Howell, R-Mineral; Del. Woody Ireland, R-Ritchie; Del. Joe Statler, R-Monongalia and Del. Mark Zatezalo, R-Brooke.

The Southern Legislative Conference is the largest of four regional legislative groups that operate under the Council of State Governments. It comprises the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia

War on Coal Pain Continues: Region to feel brunt of CSX layoffs

10700756_926235410737765_5408157025333664825_oFROM THE HERALD-DISPATCH
Jul. 17, 2015 @ 07:02 AM
BRANDON ROBERTS
HUNTINGTON – Citing continued weakness in its coal markets, CSX announced a 1 percent reduction in its workforce for the third quarter of 2015 with a majority of the 600 employees being cut from its Huntington division.

“CSX aims to match workforce needs with general business demand, and therefore CSX is furloughing some contract employees,” said Kaitlyn Barrett, from CSX’s corporate communications office. “Most of the furloughed employees operate trains, either as locomotive engineers or conductors.” CSX’s Huntington Division spans Virginia, West Virginia, North Carolina, South Carolina, Tennessee, Kentucky and Ohio.

“Furloughed employees are assigned priority status for job openings elsewhere at CSX in areas where traffic volumes are higher,” Barrett said.

The Associated Press has reported the furloughs will be through a combination of layoffs and attrition.
Coal volume is expected to drop 15 percent as export demand remains weak and U.S. utilities have large coal stockpiles on hand, according to the Associated Press. Drilling for natural gas and crude oil has slowed because of the current low prices.

CSX Chairman and CEO Michael Ward told the Associated Press he thinks the railroad did a good job improving what it could control as it dealt with challenging energy markets.

“We had good efficiency, we had good pricing and good service improvements during the quarter, so we were happy with the path,” Ward said.

CSX operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.

Follow reporter Brandon Roberts on Twitter @brobertsHD.

WEEKLY COAL PRODUCTION AND PRICE REPORT 5/25/15

Coal Commodity Region/Fuel Avg. BTU SO2 Price  Price/mmBTU
Central Appalachia 12,500 1.2  $52.85  $2.11
Northern Appalachia 13,000 3  $58.90  $2.27
Illinois Basin 11,800 5  $40.45  $1.71
Powder River Basin   8,800 0.8  $11.55  $0.66
Uinta Basin 11,700 0.8  $39.30  $1.68
Natural Gas (Henry Hub)     n/a 0.01     n/a  $2.72

By T.L. HEADLEY, MBA, MAT, MA

CHARLESTON — Coal production in the U.S. continued to fall this past week. Production for the week ending May 15 was fully 14.2% below last year’s levels, according to the latest report from the Energy Information Agency (EIA) and the National Mining Association.

Production in the United States is down by 2.66 million tons for the week ending May 15 compared to the same time last year. Production for the week stood at 16.28 million tons compared to 18.69 million tons for the same week in 2014. Cumulative production for the year-to-date is also down sharply as of May 15 coming in at 347.78 million tons compared to 371.47 million tons last year – a decline of 23.69 million tons or 6.4%.  Production for the previous 52 weeks also trended lower – finishing at 973.53 million tons compared to 986.40 million tons for the same period ending in 2014 (-1.3%).

The number of rail car loadings was also down sharply, finishing the week down 15.3% from the same period last year. Rail car loadings are also down sharply year-to-date – off 6.1% from the same period in 2014.

Electric output was down slightly – by 0.62% for the week ending May 15 – and also down slightly (-0.3%) year-to-date. Steel output continued its decline, down 8.3% for the week, finished at 1.71 million tons produced, with a capacity utilization factor of 72.1%, and it continues its slide year-to-date — down 7.2% to 33.21 million tons produced compared to 35.79 million tons for the same period last year. As noted in previous reports, production is a strong indicator of the status of the broader economy and the continued declines we are seeing point to declines in durable goods orders and a softening of the national economy in the near- to mid-term.

In terms of regional coal production, all three major basins reporting essentially unchanged production from the previous week.

The Appalachian Basin held steady for the week – at 4.39 million tons. Interior Basin production was also unchanged for the week –finishing at 3.02 million tons. Western production was down slightly this week, to 8.61 million tons from 8.62 million tons last week. All three basins continue to report significant declines in production year-to-date, with Appalachia down 7.8%, the Interior Basin off 5.8% and the Western Basin down 5.8%.

Looking at the previous 52 weeks, Appalachian and Western Basin production continued to be down for the period ending May 15,  declining 3.3% and 0.9% respectively. Meanwhile production in the Interior Basin was up 0.4% for the period — increasing slightly to 184.21 million tons from 183.52 million tons for the same period in 2014. Appalachian production fell for the period to 259.44 million tons from 268.27 million tons. Meanwhile, Western production is down to 529.88 million tons from 534.61 million tons in 2014.

According to the West Virginia Office of Miners’ Health, Safety and Training, coal production in the state for 2015 (reported through May 14, 2015) stands at 33.31 million tons year-to-date, with 27.01 million tons produced underground and 6.29 million tons produced through surface operations. The number of mines reporting production remained steady at 125. The number of mines reporting production is subject to change as additional reports are submitted. The number of active miners working ticked down, coming in at 15,512 compared to 15,624 last week. Underground operations had 12,604 direct mining employees while surface operations finished up at 2,908 employees. Again, we expect those numbers to change with additional reports.

Coal production in Kentucky for the week ending May 15 dropped to 1.23 million tons compared to 1.51 for the same week in 2014, with the state seeing significant declines in both its eastern and western fields.

Meanwhile, coal production in Kentucky is off by 5.5% for the previous 52 weeks, with both western Kentucky and eastern Kentucky operations reporting declines of 5.5% year-over-year.

Wyoming coal production was also significantly down for the week compared to 2014, coming in at 6.22 million tons, off from 7.18 million tons – or a decline of 13.4%. For the previous 52 weeks, Wyoming production is down 1.5%. Illinois production also finished sharply lower for the week, coming in at 982,000 tons compared to 1.03 million tons for the same period in 2014. Indiana production is down as well, coming in at 617,000 tons compared to 734,000 tons for the week in 2014. Pennsylvania production for the week is also down sharply, to 1.09 million tons versus 1.20 million tons for the same week in 2014, but remains up 7.6% for the previous 52 weeks. Ohio production is off as well — dropping to 353,000 tons compared to 479,000 tons in 2014. Virginia production was also off this week – to 232,000 tons compared to 300,000 tons for the same week in 2014. Virginia production for the previous 52 weeks is off by 12.2 percent.

Coal prices on the spot market remained mostly steady this week. Central Appalachian coal held at $52.85 per ton or $2.11 per mmBtu. Northern Appalachian dipped $2.00 per ton to $59.90 from $60.90 per ton or $2.27 per mmBtu. Illinois Basin coal prices were firm at $40.45 per ton or $1.73 per mmBtu, while Powder River Basin coal remained steady at $11.55 per ton or $0.66 per mmBtu, and Uinta Basin coal prices were unchanged at $39.30 per ton or $1.70 per mmBtu.

Natural gas prices on the Henry Hub finished the week up 13 cents to $2.88 per million Btu. Natural gas producers again reported a significant increase in their stored reserves – up 111 billion cubic feet compared to the previous week, for a total of 1.9 trillion cubic feet in storage. This week’s working natural gas rotary rig count dropped to 885, from 888 last week and 1,860 a year ago. This number includes rigs working in both oil and gas plays.

About the Author: T.L. Headley is an award-winning, veteran public relations professional and former business journalist. He has more than 23 years of experience in mass communications, including service as managing editor of several newspapers, senior writer for a business journal, director of public relations for two major state agencies as well as managing the public relations and communications for the largest state coal mining trade association in the nation, and as an independent public relations consultant.

EPA v. American Mining Jobs: The Obama Administration’s Regulatory Assault on the Economy

FOR IMMEDIATE RELEASE: Oct. 9, 2013                   

 

FOR MORE INFORMATION, CONTACT:

Chris R. Hamilton, SVP, West Virginia Coal Association

Ph. 304.342.4153 or email at chamilton@wvcoal.com

 

Re: Testimony of Chris R. Hamilton, SVP, West Virginia Coal Association and Chairman, West Virginia Business & Industry Council as Presented to the Subcommittee on Energy and Mineral Resources of the Congressional Natural Resources Committee Oversight Hearing on October 10, 2013.


EPA v. American Mining Jobs:

The Obama Administration’s Regulatory Assault on the Economy

Good afternoon!  I’m Chris Hamilton, Senior Vice-President of the West Virginia Coal Association and Chairman of the West Virginia Business & Industry Council.  I appreciate the opportunity to participate in your meeting and discuss the actions or inactions of this Administration on West Virginia’s economy.

West Virginia just celebrated its 150th birthday and we’ve been mining for all of those 150 years.  We are without question one of the state’s leading industries, if not the leading industry.  We have always provided good paying jobs, infused millions of dollars into local and state wide economies and have provided the region, state, country and world with low-cost, reliable power on a 24/7 basis. That’s what we do.

As a state, we manufacture and export energy and power throughout the eastern part of our country and throughout the world. It enables millions of Americans to enjoy the freedom and the world’s greatest quality of life.

West Virginia is the second leading coal producing state, the country’s leading underground coal producing state and the US leader in coal exports, accounting for 50% of the US total.  We have consistently averaged between 150 – 160 million tons of annual coal production over the past several decades – until this Administration took office.

We ship coal to practically every state east of the Mississippi river and some 38-39 foreign destinations.

Coal mining is a $30 billion industry in West Virginia with coal and electric utilities accounting for over 60% of all business taxes. Over the years, we’ve enjoyed a great workforce, great access and coal quality, close proximity to ports, and generally, a good infrastructure. We have the best miners and coal quality found anywhere in the world.

Our industry was rolling along just fine, expertly navigating the typical cyclic nature of our business with economic fluctuations and mild weather patterns affecting demand and market conditions.  In January 2009, all that changed when we began to experience an all-out assault on our industry from the Obama Administration and our federal government.

Literally, the day after President Obama took office, mining companies in West Virginia began to receive objection letter after objection letter from the U.S. Environmental Protection Agency, raising objections to new permits and even already-active operations that were previously approved and cleared by EPA, the US Army Corps of Engineers and WV Department of Environmental Protection.

Then came the Administration’s Council on Environmental Quality and its multiagency mine permit review process known as the “enhanced coordinated permit review process” and the imposition of new permit demands. This effectively slowing the mine permit process to a crawl, which soon afterward became known as the Administration’s  “permitorium”– the hijacking of state primacy of water quality standards.

The Administration’s “War on Coal” has been waged with a barrage of ill-conceived administrative actions, litigation and regulatory actions such as EPA’s Spruce mine retroactive veto, the Office of Surface Mining and Reclamation’s totally unnecessary efforts to rewrite of the stream buffer zone rule, the Mine Safety and Health Administration’s ill-conceived and scientifically baseless regulatory changes and EPA’s regulatory “train wreck.” The “War on Coal” is not rhetoric. It is real, and it is killing us.

Today, 57 months into the Obama Administration, the war on coal has taken its toll and things are very bleak.  Currently, West Virginia has 101 fewer mines operating today than this time in 2008 – that means approximately one-third of our coal mines operating in 2008 are now closed.  All mining operations are impacted, and every mine has been slowed or has cut back.

In West Virginia alone, there are over 3,500 miners laid off or furloughed and another 12,000-15,000 mining-dependent jobs have been lost.  Across the Appalachian region, the damage is even worse, with approximately 10,000 direct mining jobs lost and another 40,000 indirect jobs lost.  At an average salary of$75,000 per person, the net effect is the removal of $719 million from West Virginia’s economy and a $2.05 billion loss from our region.  These are real dollars that have been lost, impacting every family and business in our area.

The hardship on individuals and West Virginia families is hard to imagine from Capitol Hill.  High stress, not being able to make ends meet, basic life needs not being met — these are all too commonplace now, leaving a large number of West Virginians without hope and vulnerable to the perils of today as hopes of gainful employment vanish and the possibility of life without a paycheck and health care benefits preconditions all else. As mining jobs have been stripped away, we have seen a significant rise in drug and alcohol abuse, theft and other forms of crime and social decay.

Small communities throughout our state have been threatened as county and municipal budgets and resulting government services dwindle.

Since 2008, West Virginia has lost 25% of production as coal prices and productivity continues to fall.  West Virginia has lost millions of dollars in severance tax collections which funds education, county budgets and important programs for seniors and the less fortunate.

To make matters worse nearly 300 coal-fired power units nationwide have closed or will be retired this year. Other plants have switched to natural gas. A total of eighteen (18) coal-fired units in West Virginia have announced their plans to close.

It is estimated that each unit accounts for approximately 100 full-time positions, thus the total number of jobs impacted in West Virginia by these closures is approximately 1,800 additional jobs.

By utilizing every resource available to him, every federal agency, President Obama has done everything in his power to obstruct West Virginia coal production and prevent our industry from maintaining its viability in domestic and world markets.  To date, all the negative administrative and policy acts have underscored his to kill coal mining in a “death by 1000 cuts”.  The President’s plan on climate change, evidenced most recently by EPA’s New Source Performance Standards is a knock-out punch for our industry. Without question, the president is picking winners and losers in energy production, and he wants coal to lose. What he fails to realize, however, is if coal loses, America loses. No other single energy source can replace coal and the energy security it provides to the United States, not to mention the critical role it plays in our steel industry.

Our only savior at the moment appears to be the export market.  As domestic usage continues to trend downward, international demand grows exponentially.  With West Virginia currently accounting for a large share of US exports, we stand to gain and become a world marketer of coal.

Fortunately for us, world coal usage is on the rise as developing countries expand their economies and infrastructure.  Exports have doubled over the past five (5) years and coal is quickly becoming the world’s fuel of choice for power generation. In fact, coal is scheduled to surpass oil over the next two to three years.

Other nations see coal the way America used to view this resource, as an abundant, low-cost and reliable fuel. America became a manufacturing superpower thanks to coal, and it can’t be a coincidence that our global domination waned when we stopped fostering coal industry development.

Although the current export market appears strong today, predictions of our continued presence and strength vary.  As with domestic energy, we face strong competition for seaborne coal from foreign producers who do not have the same level of protections for the environment or for human rights.

Actions of this president have even placed global opportunities at risk by calling on the World Bank and international financial institutions to stop funding the construction of coal-fired power plants. In addition, the construction of new port facilities which could handle greater coal volumes are endangered by the EPA.

In closing, I simply observe that the president speaks a lot about economic justice and hope and promise. I would ask the President, where is the justice for West Virginia and Appalachia?  Where is the hope and justice for our coal mining families?

There are few other career options available for many of our miners, and by his actions, this president is effectively condemning them to lives of poverty and despair.  Again, I ask where is the justice? Why are our families less important to you than others? Why don’t we matter to you, Mr. President? Please, let us work and power America.

The West Virginia Coal Association is a trade association based in Chareston, West Virginia. It represents approximately 98 percent of the state’s coal production. Founded in 1914, the West Virginia Coal Association is the largest state coal association in the nation.

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