coal

NPR

A coal-mining giant has filed for Chapter 11 bankruptcy protection amid an industrywide slump.

Peabody Energy — which is the biggest coal miner in the U.S. and says it is the largest private-sector coal company in the world — is looking to restructure its heavy debt load and gain relief from its creditors. It hopes to continue operations unimpeded.

The St. Louis-based company said in a statement that the pressure on the coal industry is “unprecedented.” It cited a drop in prices, weaker demand from China, the rise of competition from fracking and “ongoing regulatory challenges” as reasons for the restructuring.

Earlier this year, Arch Coal — the second-largest coal miner in the U.S. — filed for bankruptcy. Bloomberg noted that three other major coal miners went bankrupt the year before that, and many industry watchers had expected Peabody to follow suit.

Bill To End Mine Inspections Passes Kentucky Senate

Mar 18, 2016
Creative Commons

The Kentucky Senate has approved a bill aimed at ending state inspections of coal mines, which would turn those duties entirely over to a federal agency.

Supporters said Thursday the bill would end duplication by state and federal regulators. The bill’s lead sponsor, Sen. Chris Girdler, said the beleaguered coal industry is suffering from “strangulation by regulation.”

Sen. Robin Webb said the state has a legitimate responsibility to inspect mines to ensure safety. In opposing the bill, she said she could not have “the blood” of miners on her hands as a policymaker.

The bill would reassign state inspectors to different duties as mine safety analysts.

It passed the Republican-controlled Senate on a 25-11 vote and now goes to the Democratic-led House.

Flickr/Creative Commons/John Karwoski

A bill under consideration in the Kentucky General Assembly that would end state coal mine safety inspections isn’t being pursued for financial reasons, according to the state Energy and Environment Cabinet.

Senate Bill 297 would change Kentucky law to eliminate the provision that requires state coal mine inspections, in addition to federal inspections. Although the bill’s sponsor — Sen. Chris Girdler — didn’t return requests for comment, WFPL reported Monday that Kentucky Coal Association President Bill Bissett said one of the motivations for the bill was financial in the face of stiff state budget cuts.

But on Tuesday, Energy and Environment Cabinet spokesman John Mura said the bill is, in fact, cost-neutral for the state. It would take current mine inspectors — there are 62 of them — and turn them into “mine safety analysts.”

Erica Peterson

A bill under consideration in Kentucky’s General Assembly would eliminate state mine inspections, a move that a safety advocate said would have adverse effects on mine safety in Kentucky.

Senate Bill 297 was introduced last week by Sen. Chris Girdler, a Republican from Somerset. It would repeal parts of Kentucky law that require state mine inspectors to examine underground coal mines at least six times a year, and other coal mines at least every six months.

The bill’s text reads:

“Whereas the coal industry has been regulated by both the federal Mine Safety and Health Administration (MSHA) and the Energy and Environment Cabinet, Division of Mine Safety during a time of economic downturn in the coal industry, which places an undue burden on the regulated community, an emergency is declared to exist, and this Act takes effect upon its passage and approval by the Governor or upon its otherwise becoming law.”

Both state and federal regulatory agencies inspect Kentucky coal mines, but mine safety attorney Tony Oppegard said the inspections complement, rather than duplicate, each other. And he added that while the federal Mine Safety and Health Administration attaches a monetary penalty for every citation it issues, it’s rare for state inspectors to levy civil fines.

Kentucky Public Radio

Leaders from the state’s coal-producing regions want counties to receive a greater share of coal severance tax revenue.

Funds from the severance tax are split evenly between the state and counties. They have declined in recent years as a result of Kentucky’s flagging coal industry. Webster County Judge-Executive Jim Townsend said his county’s severance tax revenue has declined from $6 million per year in 2011 to $300,000 last year.

“If something isn’t done, our county’s going to go out of business, it’s just that simple,” Townsend said.

Counties often use their shares of the funds for local projects such as parks, senior centers, rescue squads, and industrial parks.

Miners are extracting less coal from the mountains of Kentucky and companies are selling it for cheap, leading to massive declines in severance tax revenue going to county coffers.

Statewide, coal severance revenue dropped from $20.5 million per month in January 2011 to $8.9 million last month.

Erica Peterson

Nearly all of Kentucky’s federal representatives have formally filed a document in support of a lawsuit challenging the Environmental Protection Agency’s carbon dioxide regulations.

The EPA finalized the Clean Power Plan last summer. It sets carbon reduction goals for each state, and is part of President Obama’s overall goal of addressing climate change. Almost immediately, a coalition of states — including Kentucky — and industry groups sued to overturn the rule.

The lawsuit is set to be heard in June by the D.C. Court of Appeals. Earlier this month, the Supreme Court issued a stay, blocking the regulations from going into effect until all legal challenges are settled.

The amicus brief filed today by more than 200 U.S. senators and representatives supports the challenges against the EPA’s rule. All of Kentucky’s Republican senators and congressmen — which is all of the state’s federal delegation except for Democratic Rep. John Yarmuth of Louisville — signed on to the brief.

Erica Peterson

U.S. Rep. Hal Rogers on Wednesday announced a bipartisan initiative to send $1 billion to coalfield communities.

The RECLAIM Act (which stands for Revitalizing the Economy of Coal Communities by Leveraging Local Activities and Investing More), is co-sponsored by Rogers and a bipartisan group of coalfields congressmen. The bill would send a billion dollars from the federal Abandoned Mine Reclamation Fund to help spur economic development in communities hurting from the downturn in the coal industry.

Rogers, a Republican from Somerset, represents much of Eastern Kentucky in the House.

“In Kentucky alone, we’ve lost more than 11,000 coal mining jobs since 2009. Instead of allowing those funds to go unused, now is the time to help our coal producing states reinvest in the coalfields with projects that can create new jobs and reinvigorate our economy,” Rogers said in a statement.

“Many coal communities in Appalachia simply do not have the resources to reclaim the abandoned mine sites within their borders. This bill allows these communities to be proactive in restoring these sites and utilize them to put our people back to work.”

Erica Peterson

Kentucky’s latest quarterly coal data continues a trend of bad news for the state’s coal industry.

The report released Monday by the Energy and Environment Cabinet shows in the fourth quarter of 2015, the state’s coal production dropped by more than 20 percent from 2014 levels. This puts Kentucky coal production at the lowest its been since 1954. Eastern Kentucky took the largest hit, losing a quarter of its capacity between 2014 and 2015.

With the decreased coal production came layoffs. More than 3,200 coal miners were laid off last year, with 1,000 losing their jobs in the fourth quarter of 2015 alone. As of December 31, 2015, there were only about 8,400 working coal miners in Kentucky.

And it seems unlikely that the industry has bottomed out. The report noted that most of Kentucky’s coal — 85 percent — goes to generate electricity at power plants in the Southeast. Three percent of that went to coal plants that retired in 2015. Another 13 percent went to plants that have announced their plans to retire units before 2019.

US Geological Survey, Public Domain, Wikimedia Commons

After a federal Court of Appeals rejected an industry-led challenge last month, a new federal rule to reduce coal miners’ exposure to dangerous dust goes into effect Monday.

In 2009, the Mine Safety and Health Administration began a campaign to end black lung disease, which is caused by breathing in large amounts of coal dust. The disease was in decline for decades but has experienced a recent resurgence.

“This disease is far from over,” MSHA Secretary Joe Main said. “Miners have suffered, families have suffered from this disease, and the time has come to fix this problem. And implementation of this rule will help us get there.”

Part of MSHA’s campaign includes federal rules to keep better track of the coal dust to which miners are exposed. Companies now have to take more dust samples, as well as sample for an entire shift. Over the next few months, coal miners working in the jobs with the most dust will have to wear small continuous personal dust monitors.

Erica Peterson

Two bills before the Kentucky House would change the way the state taxes coal that’s left in the ground.

The “unmined minerals tax” applies to minerals such as coal, gas, oil and limestone that aren’t currently being extracted.

The owner of the mineral rights pays taxes to the state every year. And that adds up to a substantial amount: In 2014, Kentucky collected more than $39 million from this tax. Most of that — $34 million — went to the individual counties where the minerals are. The remainder went to the state.

But with the decline of the coal industry, less coal is being mined in Eastern Kentucky. And when it’s not economical to mine the coal, mineral rights owners are still stuck paying taxes on coal they may never extract.

That’s why two Eastern Kentucky legislators — Democratic state Reps. Fitz Steele and John Short — have introduced separate bills to change that tax.

Tennessee Valley Authority

On Thursday, Kentucky Gov. Matt Bevin announced his administration would seek an extension to comply with upcoming federal carbon dioxide regulations from power plans.

On the face of it, this isn’t surprising. Without an extension, the deadline to decide how Kentucky will reduce emissions is fast-approaching. It makes sense that the state would seek as much time as possible.

But piecing together the statement released by Bevin’s office and a brief interview I did with the Energy and Environment Cabinet raises more questions. While state regulators plan to ask the Environmental Protection Agency for two more years to consider their options, they seem opposed to every option that actually involves reducing the state’s carbon dioxide emissions.

The Clean Power Plan is calling for steep cuts in emissions from power plants. To do this, states have two options: Create a state plan or follow the federal plan.

There’s a third option Kentucky regulators are hoping for, which is that the judicial system overturns the regulation, and the EPA is forced to go back to the drawing board and spend years reformulating the regulations.

Flickr/Creative Commons/John Karwoski

Citing concerns over pricing and pollution, the Obama administration unveiled a moratorium on new coal leases on federal lands Friday. The change won’t affect existing leases — which generated nearly $1.3 billion for the government last year.

NPR’s Jeff Brady reports:

“The moratorium will remain in place while the Department of the Interior reviews whether fees charged to mining companies provides a fair return and considers coal’s effect on the environment. Leases already awarded are not affected.”

Secretary of the Interior Sally Jewell announced the change in a conference call Friday morning. Before that call, an administration official confirmed details of the plan to Jeff.

During what her agency is calling a “pause” in issuing leases, Jewell said Friday, “we’ll make accommodations in the event of emergency circumstances to ensure this pause will have no material impact on the nation’s ability to meet its power generation needs.”

In addition to analyzing the return American taxpayers are earning on the use of natural resources, the Interior Department says it’ll also review coal’s public health impacts.

Last year, Jewell called for a new discussion of the coal program, focusing on the fairness of prices charged for coal leases and other concerns at five public meetings.

Joe Moore stood near a sign reading: "Authorized Personnel Only."

"I used to be authorized," he said.

Moore is a coal miner. The sign was at the entrance to the mine that had laid him off the previous day. The Alliance Coal facility had closed — a symptom of the coal industry's rapid decline.

Years of litigation against an Eastern Kentucky coal company for thousands of Clean Water Act violations were resolved late Monday. Environmental groups hailed the $6 million settlement agreement with Frasure Creek Mining and the Kentucky Energy and Environment Cabinet as “historic.”

The Frasure Creek story is a long and complicated one. In 2010, environmental groups found inconsistencies in the water quality reports the company is required to submit to the state. They found missing reports and identical water quality measurements reported from one quarter to another, even though it’s virtually impossible for the numbers to remain the same.

The groups, including Kentuckians for the Commonwealth, Appalachian Voices, the Waterkeeper Alliance and others, announced their intention to sue the company for the violations. But before they could, the state cabinet stepped in and initiated a lawsuit. In total, there were four lawsuits filed against Frasure Creek over the past five years for similar violations.

An attempt to reach a settlement in one of the cases last year was rejected by Franklin County Circuit Judge Phillip Shepherd. In his order, Shepherd said the proposed penalty of $310,000 was insufficient.

TVA

Another of Kentucky’s coal-fired power units will be shut down in the next few years, further reducing the state’s carbon dioxide emissions.

Owensboro Municipal Utilities announced last week that it plans to shut down Unit 1 of the Elmer Smith Power Plant sometime between 2019 and 2021.

The Elmer Smith plant has two coal-fired units; Unit 2, the larger of the two, will continue to operate for the foreseeable future.

The plant is the latest of the state’s coal-fired power plants to be shut down. As the state’s coal fleet ages — more than half of the coal plants operating in 2011 were built before 1970 — utilities are being forced to decide whether it will save money to update the plants or shut them down. In many cases, the decision is influenced by stricter environmental regulations and the low cost of other fuels, like natural gas.

Elmer Smith Unit 1 produced more than a million tons of carbon dioxide in 2014. Kentucky is facing steep carbon dioxide emissions cuts under the federal Clean Power Plan, and the unit’s retirement will get Kentucky’s projected emissions a little bit closer to compliance with the federal standard.

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