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Future of coal

‘Death Spiral’: How a Carbon Tax Could End Some Coal Towns…Or Fund a New Future



This Thursday, Nov. 29, 2018, photo shows Williamson, W.Va., seen across the border from Kentucky. Photo: Tyler Evert/AP Photo

This article was originally published by the Ohio Valley ReSource.

Declining coal tax revenues place coal-reliant counties in Appalachia at risk of fiscal collapse, according to new research from the centrist Brookings Institution and Columbia University. Policies designed to prevent further climate change would accelerate that decline, the report found, but could also provide a new stream of revenue to help communities rebound from coal’s demise. 

The report, published by Brookings and the Center on Global Energy Policy at Columbia, quantified how much of a coal-producing county’s budget came from coal, via severance taxes, property taxes, and contracts such as royalties and lease bonuses. Then authors analyzed what it might mean for those county governments if the U.S. instituted a modest price on carbon emissions. The report found that under such a policy, counties that are reliant on coal would be at risk of defaulting on bonds, failing to provide basic services such as waste removal or infrastructure maintenance, and even bankruptcy. 

Adele Morris, senior fellow and policy director at the Brookings Institution and one of the report’s co-authors, said the loss of tax revenue from coal producers would have far-reaching consequences.

“You have the workers who are dislocated, you have the loss of property tax and sales tax revenue, people are closing schools and limiting other government services, and then what happens is, people move away,” she said. “And then you get this sort of death spiral.” 

Kudzu grows near a coal preparation plant in eastern Kentucky. Photo: Jeff Young, Ohio Valley ReSource

The report notes that many coal communities are already experiencing some of these effects without a climate policy in place. Coal employment declined by 50 percent in Appalachia between 2011 and 2016, and according to recent data from the Appalachian Regional Commission, 190 of 420 Appalachian counties are considered distressed or at risk, in no small part due to the downturn in the coal industry. 

Morris acknowledged that voters in coal regions would likely always view climate change policies as a threat to their livelihoods. “But a lot of people recognize … that coal is not doing so well right now, even without a climate policy,” Morris said.

She said the report’s findings serve as a call to county and state officials to prioritize economic diversification. “Whether you think climate change is a problem or not, if there’s a significant chance that we’re going to do something about it, then you’ve got to be prepared.” 

Morris and her co-authors lay out a scenario in which policy aimed at mitigating climate change could also provide substantial funding for coal-dependent communities to soften the blow and diversify their economies.  

Quantifying the Decline

Brookings Institution and Columbia economists used data from the U.S. Energy Information Administration to model the implications on the coal industry of common climate change proposals, such as a tax on carbon emissions. Under a tax of $25 per metric ton, which is similar to a policy proposed by presidential candidate Senator Bernie Sanders (I-VT) several years ago, coal production is expected to drop by 77 percent by 2030. 

To understand what such a sharp downturn would mean for coal-reliant communities, Morris and her team assessed outcomes in counties that dealt with similar losses from the textile and manufacturing industries. Aliquippa, Pennsylvania, for example, lost over one-third of its steel jobs in a single year, 1984. Within three years, the town amassed $400,000 in debt. The local utility threatened to shut off the city’s streetlights over delinquent bills. The state government had to step in to bail out Aliquippa, but the city is still considered “distressed” decades later. 

A similar fate may await places like Boone County, West Virginia, which has already faced steep consequences from the coal downturn and would be even further compromised by a carbon tax. 

In 2015, coal-related property taxes generated approximately $21 million for Boone County’s schools and county government. In addition, Boone County received over $2.4 million from severance and reallocation taxes. In the same year, 21 percent of Boone County’s labor force was tied to coal, meaning the continued gradual decline under the status quo and a sharper decline under a carbon tax scenario would also seriously hamstring Boone County families’ financial health. 

Coal production declined by 70 percent from 2012 to 2017 in the county, translating to a 38 percent decline in revenue flowing to the county government in the same period. 

Credit: Alexandra Kanik, Ohio Valley ReSource

According to the report, revenue declines led to “painful spending cuts.” Boone County in 2015 closed three of its 10 public schools and cut back on its solid waste program. 

The report’s authors say that rather than promoting alternative economic investment, the West Virginia government has passed legislation to promote new investment from coal by further reducing taxes on some kinds of mining, despite a dark outlook for the industry under any scenario. 

The report’s authors write that “while some politicians in coal-reliant areas may claim to have a path to bringing coal back, such bluster is irresponsible given the robust negative projections for the industry.” 

Morris urged lawmakers to recognize the likelihood of coal’s continued decline. “You can’t just be weaving stories about how coal is coming back,” she said. “It’s doing a disservice to the people you represent, and wishful thinking, the time for that is over.” 

Bond Risks 

Governments use bonds to finance infrastructure improvements and other projects, and nationwide, state and local issuers have about a million outstanding securities, with $3.8 trillion in outstanding debt. 

Morris said economists have begun to worry that climate-related threats could destabilize the municipal bond industry, which has historically been a safe investment category. But bond issuers do not adequately understand or document the risks associated with climate change or climate change policy to investors. 

“These bonds will be maturing in a time frame where we very well might have some kind of price on carbon or some kind of other greenhouse gas regulation, and you have to recognize that there’s this policy scenario that could be quite detrimental to the risks associated with these bonds,” she said.

Although Boone County itself has no bonds, towns within Boone County do. 

Climate Connection

Policy proposals currently in place or under consideration that aim to support economic development projects in Appalachian coal country include the POWER grants from the ARC and pending legislation known as the RECLAIM Act, which would dedicate more federal funds to mine cleanup and economic development. But Morris said such proposals were “small potatoes” compared to the scale of the challenges communities face. 

Morris said that although a carbon tax could spell the end of many coal-reliant communities, it could also point them in the direction of a new future. A $25 per ton carbon tax would likely raise a trillion dollars in revenue over 10 years, she said, “And that kind of revenue allows for a very generous support for coal-reliant areas. That could bring in tens of billions of dollars per year … to buffer the impact on governments.”

Future of coal

‘Bloody Harlan’ Revisited: Blackjewel Miners Draw on Labor History While Facing Uncertain Future



A quiet moment for miners and their supporters. Photo: Curren Sheldon

This article was originally published by Ohio Valley ReSource.

Curtis Cress sat in the gravel beside a railroad track in Harlan County, Kentucky. Tall and thin with a long, black beard, Cress is every bit a coal miner, or, he was until a month ago.

“It’s part of my heritage, you know? My dad and papaws had always done it,” he said. “And I’m proud of that heritage.”

Cress had been at these railroad tracks for days, with little sleep. Not far down the rails sat a row of hopper cars filled with coal from his former employer, Blackjewel Coal.

In the last month, Cress and his fellow miners have gone from moving coal out of the ground to stopping coal in its tracks. Blackjewel’s chaotic bankruptcy filing on July 1 left about a thousand miners like Cress with bounced checks and unpaid bills, and largely in the dark about their future.

An aerial shot of the encampment that has grown up around the protest site. Photo: Curren Sheldon

Days turned into weeks, and miners had no way to know if they still had jobs, health insurance or access to their retirement savings.

On July 29, five miners saw an opportunity. A train full of coal was leaving a Harlan County loading facility. The five men clambered onto the railroad tracks to block the train. More than a week later, they hadn’t left.

“If they can move this train, they can give us our money!” miner Shane Smith said.

That rag-tag group quickly grew to a full-fledged protest camp, complete with solar showers, a chore list, and a rotating schedule of miners to hold the place down. Community members brought food. Politicians stopped by to make speeches. Kids played cornhole on the tracks.

“We’re suffering, our kids are suffering, water’s getting cut off,” Austin Watts said. “As long as I gotta stay here, I’ll stay.”

Protesting Blackjewel miners in Harlan Co., KY. Photo: Curren Sheldon

Arnold Shepherd, a miner from Leslie County, Kentucky, was among those who said the protest recalled an earlier period in Harlan County history.

“This thing here, it puts you in mind of ‘Bloody’ Harlan, back years ago,” Shepherd said.

Bloody Harlan. The name comes from the nearly century-long and sometimes violent struggle between coal companies and workers seeking to unionize.

“Harlan is one of the locations used to undercut wage stability for the rest of the country,” Northern Illinois Univ. labor historian Rosemary Feurer said. Harlan miners started to organize in the 1920s, a struggle that culminated in a long and violent strike in 1931. Miners picketed again in the early 1970s, also sparking violence.

“What the miners were saying is, we can’t be basically just extraction engines and robots and tools left to die of black lung,” Feurer said.

Today, the protest is peaceful. The union is largely gone from Kentucky mines. And the entire coal industry is a fraction of what it was decades ago. Blackjewel’s bankruptcy, though more chaotic than most, is just one of many recent shocks to a declining coal industry. Dozens of companies went under in the past decade, and despite a coal-friendly president rolling back regulations, more have followed. In 2019 alone, BlackHawk Group LLC, Cambrian Coal LLC and Cloud Peak Energy Inc. all went bankrupt.

With lower union representation and an expectation of more bankruptcies to come, miners’ advocates and industry watchers worry that coal miners and mining communities will suffer the brunt of the industry’s decline. The Blackjewel miners who took to the tracks are following in a long history of worker protest in Harlan County. They are also stepping into an uncertain future for themselves and their community.

Scene Of Labor Struggles 

“You have to look at ‘Bloody Harlan’ in a long history of a bloody coal industry,” said labor historian Feurer, who has written about the region and legendary labor organizer Mother Jones.

Feurer said the coal industry pushes the full cost of coal onto workers’ health, workers’ wages and on the environment. The United Mine Workers of America, Feurer said, arose from workers’ demands for better treatment.

Women of the Brookside women’s support group talk with tow truck operator at a roadblock in 1974. Photo: Robert Gumpert, from the Appalshop Archive

“It’s not only bloody for the labor violence, but for the death toll,” she said, from mining accidents and black lung disease. “It’s more than most wars.”

The UMWA negotiated its first successful wage increase in 1898 and went on to fight for eight-hour workdays and standard measurement for coal. The union helped miners weather the mining industry’s boom and bust cycles, and many of the union’s hard-won health and safety standards are still in place today.

Mine operators viciously opposed miners’ efforts to unionize, particularly in Harlan County. In the bloody 1930s coal wars, miners known to be union members were fired and evicted from company-owned homes. Soon enough, most miners had gone on strike out of solidarity.

Conflict broke out again in the 1970s in what was known as the Brookside strike. Two miners were shot, and one died in a strike that lasted over a year and resulted in a new contract.

Victory photo after the miners of the Highsplint mine voted to join the UMWA in 1974. Photo: Robert Gumpert, from the Appalshop Archive

Labor Losses

But union membership is in decline across the country, and the miners’ union has declined faster than most. Between 1997 and 2017, overall mine employment in the Ohio Valley dropped by 50 percent. Union participation has declined much faster. Between 1997 and 2017, Ohio Valley miner participation in unions has dropped by 76 percent.

“The reason that unions have really been imperiled in the southern parts of the country is because they’ve been told the only way the South can rise again is by being a non-union, anti-union reserve for companies that were moving from the unionized areas of the north,” Feurer said.

Credit: Alexandra Kanik, Ohio Valley ReSource

Feurer said that even though the Blackjewel miners are acting without a union, their protest follows the tradition of labor action in the area.

“Putting their bodies on the lines is what I see is historically connected,” she said. “People who risk themselves, that is what has resonance to a long body of history.”

The Blackjewel miners still feel a strong sense of solidarity with their fellow workers. “If you work in the coalfield, you spend more time underneath that mountain than you do with your own family,” said miner Shane Smith. “These men are like a brother to me.”

Some UMWA retirees and other union workers have joined the Blackjewel miners on the tracks in a show of solidarity.

UMWA spokesperson Phil Smith said he thinks Appalachian coal miners lost their sense for the power of unions in the coal slump in the 1970s. Mine employment was low for nearly a full generation of workers entering the labor force, Smith said, effectively breaking the chain of stories passed from father to son, stories of how unions improved working conditions and fought for better wages.

By 2017 there were no union miners left working in Harlan County, and only a handful in all of Kentucky.

Phil Smith worries that a weak union puts miners at risk of losing protections that previous generations of miners fought for.

“The minute that a government who is intent on doing away with many of these worker protections feels like they can without there being any political blowback from doing it, they’re going to do it,” he said.

Policies like so-called “Right to Work” laws, which have been passed in 28 states, including Kentucky and West Virginia, threaten the economic viability of unions. Still, Smith finds hope in teachers’ strikes around the country, and efforts to unionize other workplaces.

“I think we’re seeing a resurgence in people making sure they have a voice at work.”

Chris Lewis was one of the first five Blackjewel miners who blocked that train on July 29. The bankruptcy has been a struggle, he said, but he and his wife have it better than do workers with young children.

Lewis has complicated views on unions. “I was raised union, and I believe in the union. But I also believe in a man’s right to feed his family, you know what I’m saying?”

He resents miners who call strikebreakers “scabs.” Still, Lewis thinks he and his coworkers wouldn’t be in this predicament if they had been in a union.

After his experience with Blackjewel, Lewis isn’t ready to give up on the industry. But he is giving up on Kentucky. Lewis leaves Kentucky later this month for a job in a coal mine in Alabama. In that new job, he’ll be a part of a union.

“The End Game”

The uncertainty many Blackjewel miners feel about their future is true for the coal industry as a whole. Declining demand and competition from cheap natural gas from fracking has led to the closure of eight coal-fired power plants in the Ohio Valley since 2010, with more planned to shut down in the future.

“No matter what policies are developed and put forward in D.C.,” said the UMWA’s Phil Smith, “the fact of the matter is, coal-fired power plants are closing.”

Additionally, renewable energy makes up an increasing share of the nation’s energy portfolio. For the first time this year, renewable energy exceeded coal in percentage of energy generated in the United States.

In 1997, there were about 18,000 coal jobs in Kentucky. In 2017, there were about 6,200. According to the Appalachian Regional Commission, coal production has fallen most sharply in Central Appalachia compared to other coal-producing regions.

Kentucky Coal Association spokesperson Tyler White said his group is committed to fighting for the longevity of the industry.

“The coal industry is still struggling with a lot of over-burdensome regulations that were put in place under the previous administration,” he said. Most energy analysts contest that view and point instead to the market forces driving coal’s decline.

Similarly, the UMWA’s Smith said that he’s not ready to give up on coal. He fears significant regulation to prevent further climate change could put the coal industry out of business, and he views the union’s role as advocating for policies that would promote clean, safe coal mining and keep miners employed for generations.

Blackjewel’s bankruptcy has been messier than most. But Clark Williams-Derry, the director of energy finance for Sightline Institute, a research organization based in Seattle, says we should expect more chaotic bankruptcies like it.

“We’re sort of in the early stages of the end game, I would say, of the coal economy,” he said.

Williams-Derry worries that in the chaos of Blackjewel’s bankruptcy, some mine lands may end up without money to pay for reclamation, and he thinks future bankruptcies may have the same result as fewer companies want to take on risky mines. The costs of worker pensions, land reclamation and other debts may well be passed on to taxpayers, or left unpaid altogether.

“We’re in uncharted territory,” he said. “We don’t really know what happens when the industry is shrinking so rapidly that we see mines just simply abandoned.”

Blackjewel miners and supporters enter the federal courthouse in Charleston, WV. Photo: Brittany Patterson, Ohio Valley ReSource

Down The Line

marathon bankruptcy hearing in federal court brought mixed news for the Blackjewel miners. The auction of Blackjewel properties attracted enough buyers to generate money to go toward some of the wages owed, and lawyers representing the miners were able to win some concessions from other Blackjewel creditors.

Still, when attorney Ned Pillersdorf addressed the protesting miners on the tracks, he was clearly managing expectations.

“You know I’ve told you that bankruptcy is kind of like a funeral home,” he said. “Nobody leaves happy.”

Kopper Glo, a Knoxville, Tennessee-based mining company that purchased some of Blackjewel’s Kentucky properties, has committed to pay $450,000 to cover miners’ wages. That is expected to cover about 35 percent of the total amount owed to Blackjewel workers. Kopper Glo has also said it hopes to rehire many of Blackjewel’s workers, though it has made no legal commitment to do so. Blackjewel miners worry Kopper Glo will pay less than Blackjewel did.

“I was a roof bolter, I made $25 an hour,” said Shane Smith. “A belt man, they make $22. A different company comes in, what’s to say everybody won’t make $20?”

Kopper Glo said it could not answer specific questions, but said in a press release that the company “has a plan to re-start certain operations and is confident this plan will bring jobs back to many of the former Blackjewel employees. Kopper Glo is also committed to funding to the portion of the back wages due to the employees.”

Near the scene of the miners’ protest in Harlan Co., KY. Photo: Curren Sheldon

In days spent occupying the train tracks, the Blackjewel miners have plenty of time to consider what their future holds. Do they return to work and hope their new employer doesn’t meet the same fate as the last? Do they try to retrain in a new industry? Or do they look for another job, knowing they may never make as much money as they did in the mines?

“This ain’t a game, we ain’t a bunch of kids,” said miner Caleb Blevins. “We’re grown men with families. Around here in the Appalachian mountains, this is all we got, the coal mines. We’re too far in to try to go to college for 12 years. Our kids need us now, not in 10 years.”

Miner Tim Madden also just wants to get back to business as usual. “I think if they’d roll up here and issue us all a check, I’d be out of here, end of story.”

But Curtis Cress said he’s done with the industry. “You never know from one day to the next if you’re going to have a job,” Cress said. “They’ll get you used to making a whole lot of money and then take it away.”

A father of four, Cress is at risk of losing his home. He says he feels hopeless about what comes next, both for him and for central Appalachia. He thinks his best bet is to find work in manufacturing. He hopes his kids leave the region when they’re old enough.

The miners occupying the Harlan County train tracks say they’ll stand down when they see Kopper Glo’s money in their bank accounts. With mining starting up again in some of Blackjewel’s former mines, some men will likely be headed back underground.

But for many miners, and for the coal industry as a whole, it’s hard to know what’s coming down the tracks.

Benny Becker, Brittany Patterson and Jeff Young contributed to this story.

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Future of coal

Protesting Kentucky Miners Could Get Some Overdue Pay From Bankruptcy Sale



Laid off miner Jeffrey Willig knows that taking part in the protest might hurt his future employment opportunities, but wants to be an strong example for his six children and fight for other miners who can’t protest themselves. "I was just like enough's enough,” he said. "I'm not going to stand by and watch those guys and their families be affected the same way I am. They've gone through this time and time again. That's when I felt like I needed to step up.” Photo: Curren Sheldon

This article was originally published by the Ohio Valley ReSource.

More than a thousand coal miners left unpaid by the abrupt bankruptcy of Blackjewel mining could soon be getting some – but not all – of the money they are owed.

Dozens of miners have staged a week-long protest on railroad tracks in Kentucky’s Harlan County, blocking delivery of a load of coal from a Blackjewel mine and demanding their pay. 

A federal court overseeing the Blackjewel bankruptcy Tuesday concluded the sales of the mining company’s properties and equipment, and buyers have put money toward paying some of the roughly $11.8 million in pay and benefits due to miners in Kentucky, Virginia, and West Virginia, most of whom have been without pay for a month.

“That won’t pay off all of the wages that are due,” labor attorney Sam Petsonk said, “but it’ll be a good downpayment.”

Petsonk, an attorney with West Virginia’s Mountain State Justice, is representing miners from Blackjewel’s eastern division. He said miners

“So additional wages and penalties damages that are owed to the workers will have to come through further litigation,” he said.

Presiding Judge Frank Volk approved the sale of the mines in West Virginia, Kentucky, and Virginia. A proposal by Contura Energy for Blackjewel’s two Wyoming surface mines remains unresolved pending federal government approval.

Under an agreement by Kopper Glo Mining LLC to purchase Blackjewel’s Lone Mountain and Black Mountain mines in Kentucky, the company committed to set aside $450,000 to pay former employees owed wages. In addition, the company said it would provide up to $550,000 in additional money to the Kentucky miners from the royalties of the operations at Lone and Black Mountain mining complexes.

The company agreed to pay $6,350,000 cash for the properties as well as royalties for six years totaling more than $9 million. Kopper Glo also agreed to assume responsibility for some bonding liabilities.

Employees at West Virginia’s Pax mine are likely to get their full back wages. Buyer Contura Energy, based in Tennessee, said it will create a $5 million fund to pay the employees what they’re owed.

Rhino Energy LLC paid $850,000 cash and agreed to pay $208,000 in royalties over one year for some of Blackjewel’s Virginia mines.

Requests for comment to both Kopper Glo and Rhino Energy were not immediately answered.

It’s not clear if any of the new owners are obligated or plan to rehire Blackjewel employees.

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Future of coal

Few Answers For Unpaid Miners After Day One of Blackjewel Sales Hearing



Miner Bobby Cole and his wife Melissa Cole listened intently as a miner advocate briefed the crowd of protestors last week on where things stood with Blackjewel LLC’s bankruptcy proceedings. Bobby Cole estimates the company owes him close to $8,000 in wages and benefits. Photo: Curren Sheldon

This article was originally published by the Ohio Valley ReSource.

Blackjewel coal miners will have to wait at least another day to learn if the sale of the bankrupt coal company’s mines and equipment will deliver their overdue paychecks.

The U.S. Bankruptcy Court for the Southern District of West Virginia recessed Monday after an all-day hearing that yielded few results. The court is scheduled to resume the hearing Tuesday at 9 a.m.

Presiding Judge Frank Volk approved six bids, however the three main sale proposals for Blackjewel mines in Kentucky, Virginia, West Virginia and Wyoming remain in limbo.

The approved bids included the sale of two idled metallurgical coal mines in Virginia and a coal load-out and preparation plant in Harlan County, Kentucky, among others.

More than four dozen miners and their supporters traveled from a Kentucky railroad blockade to the West Virginia courtroom. The miners stood quietly in the courtroom in lime green t-shirts that read “Harlan County Strong” and “Pay Miners First and Lawyers Last.” Others at the protest site in Cumberland, Kentucky, listened via conference call to the bankruptcy hearing.

Blackjewel miners and supporters enter the federal courthouse in Charleston, WV. Photo: Brittany Patterson/OVR

“I commend members of the mining profession who joined us this morning and now,” Judge Volk told the court after it returned for the afternoon. “You can make a very powerful statement without saying anything at all.”

Blackjewel owes about $11.8 million dollars in wages and benefits to more than 1,000 Appalachian coal miners who have gone more than a month without pay.

“We wanted some clarity, try to find out if there was a chance of us getting the money that we earned and possibly go back to work,” said former Blackjewel coal preparation plant foreman Derrick Saylor.

Objections Galore

Monday’s sales hearing shared the often chaotic and tense tenor that has characterized much of Blackjewel’s bankruptcy proceedings.

The judge declined to rule on a motion filed Monday morning from the U.S. Department of Labor that sought to keep Blackjewel coal in Harlan County until miners had been paid. The agency argued that transporting coal mined by employees who have not yet been paid for that work violates the Fair Labor Standards Act.

Sam Petsonk, an attorney with the law frm Mountain State Justice, briefs miners attending the Blackjewel bankruptcy hearing. Photo: Brittany Patterson/OVR

Stephen Lerner, an attorney with Squire Patton Boggs representing Blackjewel, argued the majority of the coal had already been purchased by another party, Blackjewel Marketing and Sales Holdings LLC, and therefore the issue was moot.

Three coal equipment companies also voiced objections to the way Blackjewel is proposing to sell bulldozers and other coal mining equipment.

An attorney for Caterpillar told the court it is owed more than $26 million for equipment located in Appalachia. He expressed concern there may not be enough to pay that debt after sales are completed.

Similarly, several surety bond representatives told the court all cash earned through the sales should be set aside and not spent until a full accounting of Blackjewel’s debts, including millions in environmental reclamation obligations, is made available by the company.

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