Connect with us

Appalachia

Trade Troubles: Escalating Trade Threats Could Hit Ohio Valley Coal, Natural Gas

Published

on

President Donald Trump’s desire to help boost the Ohio Valley’s energy industry and bring back mining jobs could be stymied by the administration’s escalating trade battle with China and other trading partners across the globe.

The Trump administration announced in June $50 billion in tariffs on Chinese goods, which are set to go into effect on Friday. In return, China has committed to its own $50 billion in tariffs on U.S. exports, which may include U.S. energy exports.

Shortly after China’s announcement that it would respond in kind, the White House pledged to impose even more tariffs on an additional $200 billion worth of Chinese goods, escalating fears that the two countries will become locked in a full trade war.

Experts say escalating tensions could dampen the growth of metallurgical or “met” coal exports from Appalachia and have a major impact on planned Chinese investment in the region’s natural gas industry.

A coal barge on the Ohio River in Louisville. Photo Credit Jeff Young/Ohio Valley Resource.

Met Market

Metallurgical coal has been a rare bright spot for the mining industry. Production of thermal coal in Appalachia — the type of coal burned to make electricity — is extremely unlikely to rebound because of low natural gas prices, the rise of renewable energy and lower-cost coal options  produced in the Powder River Basin region of Wyoming and Montana, said John Deskins, director of West Virginia University’s Bureau of Business and Economic Research. Since 2008, annual coal production in West Virginia alone has dropped by nearly half, from almost 158 million short tons in 2008 to 80 million short tons in 2016.

But production of metallurgical coal, or met coal, has remained relatively stable.

“All the losses that we’ve seen in recent years have come from thermal coal production,” Deskins said. “The stable part that we have going forward, the part that we can count on, is the met coal.”

In 2016, metallurgical coal production ticked upward in Appalachia, in part because the global price of met coal increased due to weather-related issues in Australia, China’s biggest supplier of met coal. Higher prices made Appalachian met coal more competitive. As a result, China has been importing more steel coal from West Virginia and other Ohio Valley producers.

“We sent 3.2 million tons to China last year. Before that we sent less than a million tons,” said Taylor Kuykendall, a coal reporter for S&P Global Market Intelligence.

Kuykendall said in the grand scheme of China’s $22 billion demand for coal, what it gets from West Virginia and other Appalachian states isn’t huge. But it is growing, and perhaps more importantly, it could grow more. Importing more U.S. coal is one way Chinese officials could reduce the Chinese-American trade deficit.

Peabody Energy, Inc., via Wikimedia Commons

“Their government can order producers and metallurgical coal consumers to buy more U.S. coal and they can do the same thing with thermal coal and we were starting to see evidence that they were doing that,” he said.

For example, an executive for Pennsylvania-based Consol Energy, said recently that Chinese officials expressed “immediate” interest in a new 1 million ton coal contract. The West Virginia Coal Association in May said China had approached them with interest in an additional 7 to 8 million tons of met coal from West Virginia.

However, as trade tensions have mounted, some Chinese traders have expressed relief they no longer have to seek out more expensive U.S. coal imports as a result of rising tensions, according to reporting by Reuters.

“These kind of back and forth on tariffs maybe haven’t quite ruined that opportunity yet, but it seems like it has at least slowed it down or created enough threat of a concern that people are kind of backing off on some of those deals,” Kuykendall said.

Deskins, at WVU, expressed a more dire concern, especially for West Virginia, which is the country’s largest producer of metallurgical coal. He said it’s not just retaliatory tariffs from China that could hurt the region’s coal production. Europe, Canada and Brazil are big importers of West Virginian coal — countries that have also threatened to impose retaliatory tariffs as trade war talk escalates.

“I think the retaliatory tariffs could really damage West Virginia coal exports,” he said. “To be very frank, I think we need to be really concerned about a trade war that could spring up because I think it could really hurt the West Virginia economy.”

Gas Deal Burned?

It’s not just the coal industry that could suffer. An $84 billion planned regional investment from China’s largest energy company has slowed, at least temporarily, due to Trump’s tough talk on Chinese trade.

Last year, China’s largest partially state-owned energy company, China Energy, signed a nearly $84 billion MOU with the state of West Virginia to build a series of facilities that would process natural gas liquids and its byproducts.

Natural gas liquids are full of things like ethane, propane and butane, chemicals that are the backbone for the petrochemical industry. State officials in Ohio, Pennsylvania and West Virginia hope an investment in a storage and trading hub, as well as pipeline infrastructure, will lure big players in the petrochemical industry to the Ohio Valley and help the region become the next “petrochemical hub,” or plastics production mega-center of the U.S.

“There’s so much of these natural gas liquids being produced in the Appalachian Basin that there is a tremendous oversupply,” said Brian Anderson, head of WVU’s Energy Institute.

It’s already starting to happen. Royal Dutch Shell is building a $6 billion cracker plant in Beaver County, Pennsylvania. PTT Global Chemical is in the permitting process for an ethane cracker in Belmont County, Ohio. Cracker plants “crack” or separate and convert natural gas liquids into ethylene, a feed stock for plastics.

China Energy’s multi-billion investment would be similar.

“China Energy has a tremendous interest in investment in the petrochemical sector in Appalachia,” Anderson said. “Their interest is fitting in within that supply chain.”

Stood Up

For the last few months, Anderson has been out with China Energy representatives dozens of times, scouting for locations to begin building projects. Last month, officials were supposed to stand with him at the Northeast U.S. Petrochemical Construction Conference in Pittsburgh to announce the first set of projects.

Instead, he stood alone. The reason: Trump’s tough trade talk with China.

“It’s a government-owned company in China, a state-owned enterprise that is part of that political structure and with the bilateral tensions between the U.S. and China, for the executive level officials from China Energy it was not an appropriate time for them to come for an official visit,” Anderson said.

He added he is confident the deal is still on, but don’t expect to hear any big announcements until tensions between Trump and China have cooled.

Trump’s tariffs are affecting the region’s natural gas industry in another way. A 25 percent tariff on imported steel and aluminum is in some cases driving up the costs of the materials used to make natural gas pipelines and other infrastructure. That, in turn, drives down the return on investment in natural gas infrastructure.

“The actual economics of the project can be affected through the enacting of certain tariffs, and a steel tariff does in fact change the economics of constructing $83 billion worth of facilities,” Anderson said, referencing China Energy’s investment. “So, those economics are factored into the decision making when it comes to the final investment decision, and that’s one that is a pretty straightforward calculation.”

This article was originally published by Ohio Valley Resource.

Continue Reading

Appalachia

Groups Say Smart Reclamation Of Mine Lands Could Be “Appalachia’s New Deal”

Published

on

Stream restoration work in progress on an old mining site in West Virginia. Photo: Courtesy CVI

From solar farms in Virginia to a green energy subdivision in Kentucky, a new report by a group of regional advocacy organizations highlights 20 ready-made projects across the Ohio Valley that could give abandoned mining operations that were never cleaned up a second life, and create new economic opportunity across the region.

In the report, released Tuesday, the Reclaiming Appalachia Coalition, which advocates for high-impact mine reclamation projects throughout Central Appalachia, says innovative mine reclamation “could be Appalachia’s New Deal.”

“This report marks an important step as Appalachia citizens continue to re-imagine and work toward a future of sustainable and healthy local economies, where young people can find meaningful work and stay to raise their own families,” Adam Wells, regional director of community and economic development with Appalachian Voices, said in a statement.

Courtesy Ohio Valley Mushroom Farm
Acid Mine Drainage (AMD) at an Ohio wetland.

Virginia-based Appalachian Voices is one of the members of the coalition. Other organizations include Appalachian Citizens’ Law Center in Kentucky, Coalfield Development Corporation in West Virginia, Rural Action in Ohio, and Downstream Strategies in West Virginia.

Projects highlighted in the report run the gamut and include proposals to use acid mine drainage in Perry County, Ohio, to create paint and a proposal by a West Virginia wholesaler to build a livestock processing facility in Kanawha County.

The region has struggled to clean up thousands of abandoned coal sites since the Abandoned Mine Land (AML) fund was created in 1976. State and local governments have sometimes struggled with how to find new uses for old mine sites, and some high-profile projects have fizzled.

In the report, the authors argue, well-planned reclamation projects can spur economic development and offer best practices for how they should be proposed. Those include selecting appropriate locations near infrastructure and ensuring redevelopment projects are environmentally sustainable and financially viable over the long term.

Stream restoration work in progress on an old mining site in West Virginia. Photo: Courtesy CVI

In recent years, Congress has boosted resources available for that effort. Beginning in 2017, more than $100 million was appropriated for the Abandoned Mine Land Pilot Program. Many of the projects highlighted in the report have applied for funding through the AML Pilot Program.

But another federal effort has not been passed by Congress despite bipartisan support. The “Revitalizing the Economy of Coal Communities by Leveraging Local Activities and Investing More,” or RECLAIM Act would accelerate reclamation of abandoned mine lands by dispersing $1 billion of Abandoned Mine Land funds over a 5-year period with an eye toward economic development.

Combined, the report’s authors say, the 20 projects would require about $38 million of investment but would generate more than $83 million in economic output as well about 540 jobs to the region.

This article was originally published by Ohio Valley ReSource

Continue Reading

Appalachia

Sports and Storytelling: ‘More a Unifier than a Divider’

Published

on

A rusted field goal post and practice equipment sits on the practice field outside Municipal Stadium in Portsmouth, Ohio. Photo: Jack Shuler

When we launched our religion vertical, we said, “because religion is community” in Appalachia.  When we talked about a sports vertical, we said, “because sports is religion” here. It is a topic that transcends the playing field —  and brings many of Appalachia’s stories into focus – from the political to the economic to the cultural. Former ESPN sports editor Keith Reed and Pittsburgh native promises a complicated look at the region through this prism.

— 100 Days in Appalachia

 

Many people are going to see that 100 Days is launching a sports vertical and question it, thinking we’re now bringing them scores and draft updates, but that’s not exactly the goal. What is your vision for our work in this field?

I’m fascinated by sports as a cultural connective tissue. The games themselves are competitive entertainment, but how we consume sports gives us a great opportunity to examine where and how we live. There are so many examples, but the sports economy is a great one. You can tell a community’s priorities based on how it spends its money. Well, in the U.S., we spend billions of dollars every year on sporting events and related items and infrastructure. Professional team owners are mostly plutocrat billionaires. Big time college athletes are indentured labor to millionair coaches while generating billions of dollars for institutions under the guise of amateurism. This says a lot about where American priorities are, even though I’d guess “sports” isn’t the first thing that comes to people’s minds when you say, “Appalachia.”

We’re designing this vertical with that kind of context in mind. Everyone has instantaneous access to scores, stats, trade rumors and fantasy updates in their pockets. What they don’t have  that we can provide, is a way to pull back the curtain to see where sports is a barometer on where communities stand with regard to race, wealth, public policy and cultural understandings and divides. That’s where we come in.

 

Much like religion or food, sports is such an integral part of communities not just in Appalachia, but around the world. What is it about your life experience that makes it such an important topic to you?

Almost every kid has a sport they grew up playing, or watching or at least a team their parents loved. I grew up in Pittsburgh loving the Steelers, Pirates and Penguins. I played basketball. I still start or end most days with a boxing workout or exercising with a group organized by a friend who’s a former NFL player. I even coach a team in a women’s kickball league. My sons both grew up playing sports: football, track, wrestling, rugby.

So sports have been a major part of my personal life and I know how influential that can be. In your formative years, you might meet someone you never would have encountered but for the basketball court or football field. Whatever differences you have, you put away because you need your teammate to help make you better and help you win. Coaches can be enormous positive or negative influences. For elite athletes, sports can be life-changing or life-saving. I’ve seen sports across all those transformative aspects, and I believe most people, regardless of background, will be able to relate to those stories.

 

100 Days in Appalachia’s goal is to take back the narrative people on the outside looking in have created for our region and show the true diversity of this place. How will this vertical expand upon or support that mission?

Sports stories are almost perfect for creating a geographic and cultural sense-of-place. In two well-written paragraphs, I could contrast the atmospheres at a UVa basketball game and a Tennessee Titans game and you’d gain an appreciation for how different a college town in the hills of Virginia is from urbanized Nashville. The populations, infrastructure and community priorities and needs in those two places are very distinct, and that will show up in their sports fans.

One of my favorite stories I’ve ever edited was for ESPN the Magazine, for the very first “One Day-One Game” issue. We sent a bunch of writers and photographers to Houston to cover a Steelers-Texans game, and there was a piece about tailgating and how Steelers fans were exporting this white, working-class ethos and culture common to formerly immigrant communities with them. All those people moved in the 70s and 80s after the steel mills in Pittsburgh closed, and now there’s a diaspora of Pittsburghers living in other cities and following the team from stadium to stadium. A lot of what you see in some of the characters in that story, which I believe we did in 2011 or 2012, showed up at the polls and in the rhetoric around the presidential election in 2016. That tailgating story, about an old-school, blue-collar Pittsburgh guy who talked funny and drank a lot of beer, was a canary in the coal mine.

 

Rivalries in sports and the divides they create can be almost even more intense than the divisions created by our current political climate. How can storytelling and journalism in this area bring people together?

I think sports fandom, especially rivalries, are more a unifier than divider. Think about that kid who meets somebody from across town on the basketball court. As adults, they may move to different parts of the country, have different levels of education and income, but they keep up with each other over social media and they find common ground in their rooting allegiances. There’s no easier way to get people who’ve grown apart or who have very little else in common than sports trash talk.

I’m a Red Sox fan who lived in Boston and wrote about the team, who dated a Yankees fan.  I’m a Pittsburgh native who’s lived in every other AFC North city, plus Boston. I have friends from Baltimore, Boston, Cincy and Cleveland — all these cities that are supposed to be “rivals” because of sports. Yet, sports is the thing that brings us together. So I think our storytelling can be an entry point for lowering some of the polarized rhetoric from other parts of our lives and engaging one another as fans, and then as people.

 

What is the potential impact you hope to see?

I don’t have any agenda besides finding and telling good stories. I’ve never done a geocentric, hyper-regional sort of journalism project like this before, so I’m happy to explore what that looks like. I’d like to give opportunity to some talented, young and hungry writers with a passion for telling interesting stories and seeing where those stories lead. That could mean something investigative centered around college athletics or it could be something more fun and interesting. At this point, I just want the storytelling to be good and well-received.

Continue Reading

Appalachia

‘If We Can’t Mine Coal, What Are We Going To Do?’

Published

on

In this excerpt from the book After Coal, documentary filmmaker Tom Hansell describes how his media work in the coalfields of Central Appalachia led to a different understanding about what might come next for coal communities.

“EPA = Expanding Poverty in America.”  

See also: BEYOND COAL: Appalachia and Wales. Jim Branscome reviews Tom Hansell’s book “After Coal”

This statement is written in three-foot-high letters on a banner stretched over a bandstand in a public park in Pikeville, Kentucky. It is June 2012 and I am just starting production of the After Coal documentary. The crowd around me is dressed in the reflective stripes of mining uniforms or in T-shirts reading Friends of Coal and Walker Heavy Machinery. I am documenting a coal industry-sponsored pep rally before a public hearing on new water-quality regulations proposed for mountaintop-removal coal mines.  

The speaker onstage is speaking proudly of his family’s heritage in the coal industry. He concludes his passionate statement with a question: “If we can’t mine coal, what are we going to do in eastern Kentucky?” 

Good question. As a filmmaker who has spent my career living and working in the coalfields of eastern Kentucky and documenting coal-mining issues, this is an important and difficult question to answer. My earlier documentaries Coal Bucket Outlaw (2002) and The Electricity Fairy (2010) were intended to start a civil conversation between workers in the coal industry and other community members about a shared vision for good jobs, clean air, clean water, and a safe working environment. However, the conversations almost always broke down as soon as someone pointed out the obvious: the coal industry had long been the only model of economic development in the central Appalachian region. More examples of what life after coal might look like were desperately needed to move the conversation forward.  

As I struggled with the haunting question “If we can’t mine coal, what are we going to do?” the image of Welsh mining villages rising from the ashes left by the coal industry captured my imagination. I thought that if I could just learn a few details about how Welsh communities made the transition, then I could identify specific solutions to help coal communities in Appalachia. However, I quickly learned that the secret to life after coal was not that simple. …  

The author (holding the boom mic). (Photo provided.)

On my own quest for solutions, in 1990, I began my career at Appalshop, a rural, multidisciplinary arts center located in Whitesburg, Kentucky—the heart of the central Appalachian coalfields. From my young and naively privileged perspective, moving to eastern Kentucky was an act of opposition to the materialistic consumer-driven world. I had a goal of living self-sufficiently, fulfilling my needs with what I could make or grow, and buying as little as possible. And, as an aspiring environmental activist, the clear moral lines around the issues in the Kentucky coalfields, especially strip mining, were appealing. The battle call of union songs such as “Which Side Are You On” charged up my little post-punk heart.  

However, my experience at Appalshop quickly taught me that the struggles of coal communities were not as simple or straightforward as I had imagined. Working as part of this artistic collective, I produced radio and video documentaries and taught community media workshops. As a young artist and activist, I quickly absorbed Appalshop’s mantra of providing a platform for mountain people to speak in their own words about issues that affect their lives. I attended hundreds of community meetings: school board, the fiscal court, mine permit hearings, and union meetings. I also documented dozens of direct actions where citizens blocked roads to stop mining, took over government offices to protest the lack of enforcement, and set up picket lines to enforce union contracts.  

Retired Welsh miner and labor leader Terry Thomas (left) meets retired Kentucky miner Carl Shoupe (right). (Screenshot from the documentary, After Coal)

My experiences working on the front lines of the environmental justice movement in Appalachia gradually developed my understanding of the complexities of how culture, place, and politics had shaped the situations I was documenting. I witnessed firsthand the incredible power of community to support people as they faced threats against their homes and families. As a result, I expanded my ideas about self-sufficiency from an individualistic vision of each person taking care of their own needs to a larger vision of individuals living in symbiosis with their neighbors and the natural environment—community self-sufficiency. 

Participating in cultural exchanges at Appalshop also provided me with valuable lessons. Meeting artists from the mountains of western China and rural Indonesia opened my eyes to some of the universal challenges faced by regional cultures in an increasingly globalized economy. I hoped that an international exchange with another coal-mining region such as south Wales could identify resources and strategies that would help Appalachian coalfield communities create a future beyond coal.  

The process of creating the After Coal documentary took more than five years. During that time, I learned to stop looking for concrete solutions and start supporting an ongoing conversation about how to create healthy communities in former coal-mining regions. International efforts to address climate change make this challenge especially intense for coal-producing regions. As our economy shifts from fossil fuels, how can we ensure that places where fossil fuels were extracted do not continue to bear an unfair share of the costs of extraction?  

I believe there are as many solutions for life after coal as there are residents of mining communities. I hope these stories from south Wales and central Appalachia will inspire people to discover solutions that work in their home communities. 

This article was originally published by Daily Yonder.

Continue Reading

Trending

100 Days

FREE
VIEW