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Coal: An uncertain time nationally

February 26, 2013
By JENNIFER COMPSTON-STROUGH - For The Times Leader , Times Leader

ST. CLAIRSVILLE - The future of the coal industry in America is a primary concern in the Upper Ohio Valley, and local industry leaders acknowledge they need to adapt to changing regulations and new competition.

The two largest coal producers in the local region are Murray Energy Corp., with its area operations mainly in East Ohio, and Consol Energy Inc., with two large mines in the Northern Panhandle of West Virginia. Both companies foresee that the demand for coal to produce domestic energy will decline in coming years, but it is unclear what the demand will be worldwide.

Lynn Seay, spokeswoman for Consol, said her company believes the national attention coal is getting will be good for the industry as a whole.

Article Photos

Photo/Jennifer Compston-Strough
Plenty of miners come and go from the Powhatan No. 6 Mine’s new McMahon Portal, owned by Murray Energy Corp., each day.

"It was encouraging to see that the (November) election elevated the national discussion around energy and the critical role it plays in our economic health and future prosperity," she said. "We're hopeful that our elected leaders can come together to construct sound policies that embrace responsible domestic energy production."

Murray Energy spokesman Gary Broadbent, however, doubts that federal lawmakers and regulators will develop policies that will benefit his company or coal in general.

"Over the past four years, Barack Obama and his radical appointees have absolutely done everything that they could to destroy the coal industry in America," Broadbent said. "Unfortunately, we anticipate that this destruction will continue.

"The Obama administration's failed policies have led to the closure of 204 coal-fired power plants. National coal production has plummeted from the historic 1.2 billion tons per year to only 825 million tons in 2012, a decline of over 31 percent," he continued. "Incremental electricity auction prices for 2015 and 2016 have increased 800 percent over current prices. Again, we anticipate that these additional regulations and destruction of the coal industry, and these coal jobs, will continue."

Seay agreed that federal policies and regulations are creating challenges for the coal industry, but she believes worldwide demand for the fossil fuel will continue to rise regardless of how America's energy sector is diversified.

"There is a collision on the horizon - the upward demand trend for energy conflicts squarely with government policies that inhibit energy exploration and production," she said. "Coal and natural gas will make up two-thirds of the nation's power supply for decades to come, while coal is predicted to become the dominant fuel source around the world by 2017.

"Consol Energy, a diversified energy producer, is uniquely positioned to help meet rising energy demand both in the U.S. and the developing world in the years ahead," she added.

And Broadbent said it is not only coal producers that will feel negative impacts of what he believes is a federal overreach. He noted utility companies, such as American Electric Power, also are attempting to adjust to new and expanded rules on emissions.

"The cumulative effect of these rules makes it impossible for the coal producers and utilities to adequately adapt," he said. "These rules are unjustified, have no rational basis and are clearly intended to destroy the coal industry. We cannot adapt. That is why 204 power plants are being closed, as are thousands of coal mines and the jobs that they support."

The end result will be even higher prices for electricity.

AEP last month cited Ohio's deregulated electricity market and an increasing shift toward natural gas-fired power plants for its decision to eliminate an unspecified number of jobs in the Upper Ohio Valley.

"AEP is a regulated electric utility, with the vast majority of our operations and earnings tied to rate-regulated electric utilities," said Nicholas K. Akins, AEP president and chief executive officer. "But Ohio's move to enhance electric market deregulation will shift much of AEP's Ohio generation into a separate competitive business."

AEP also is seeking permission from the Public Utilities Commission of Ohio to charge customers in the state $61.8 million for repairs associated with massive failures that took place during a June 29 storm.

AEP plans to close some coal-fired power plants, such as the Kammer Plant south of Moundsville, set to close next year. According to AEP, the company now operates natural gas-fired plants in Waterford, Ohio; Dresden, Ohio; and Lawrenceburg, Ind. It now generates roughly 16 percent of its power from natural gas.

Murray also has announced plans to close its Red Bird West mine near Brilliant. According to Broadbent, reclamation work is now taking place at that site.

"Murray Energy Corp. has been forced to lay off employees because of Obama's war on coal. Unfortunately, we have not seen the end to the job losses," Broadbent said. "It is clear that, without acceptable coal markets, there can be no coal mines and, further, no coal jobs. We have not yet seen the cumulative negative effect on the Ohio Valley, its jobs, and our quality of life."



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