Tuesday, October 23, 2012

Company Held Up As Evidence Of ‘War On Coal’ Quietly Plans To Resume Mining Operations

When Consol Energy, a leading U.S. coal and gas company operating in Appalachia, announced it would be closing its flagship mine in Virgina, Republicans were quick to blame their favorite scapegoat: the Environmental Protection Agency.

Shortly after Consol said it was furloughing 620 workers at its Buchanan Mine, Virgina Republican Representative Morgan Griffith blamed “the administration’s ongoing war on coal,” for the company’s troubles. Days later, state Republican officials did the same, saying “the Environmental Protection Agency has followed through” with regulations that shut down the mine.

But the mine is coming back online as expected, bringing workers with it. And the critics are silent.

According to a press release from last week, “Consol Energy expects to produce 13.4 – 13.8 million tons during the quarter, including 0.6 million at the Buchanan Mine, which is expected to re-start on the week of November 5.” (Hat tip to Kate Sheppard of Mother Jones for flagging).

At no point did the company blame EPA regulations in its announcement. Rather, Consol pointed to weak demand for metallurgical coal, which is used for iron and steel production, not power production.

Consol idled two other mines earlier this year for 1-2 weeks due to weakening demand for thermal coal used in power plants. But this has mostly to do with natural gas eating into the competitiveness of coal — a trend Republicans have held up as a miracle of the free market. At no point did Consul blame EPA regulations for those brief closures either.

According to the Analysis Group, an economic consulting firm, most of the coal plants that are set for retirement would retire without any new air pollution rules from the EPA. That’s because our coal fleet is pretty old — the median age of U.S. facilities is 46 years. It’s also because a lot of coal plants are switching to natural gas.

The Brattle Group, another consulting firm, also recently issued an analysis of coal plant closures, concluding that there are “somewhat more retirements are likely (about 25 GW) than we foresaw in late 2010. However, that change is primarily due to changing market conditions, not environmental rule revisions, which have trended towards more lenient requirements and schedules.”

Read: new EPA regulations have had very little impact on any changes taking place within the coal industry.

The Associated Press recently reported on the market forces behind the shift:

But what’s happening now is more than a seasonal slump or even a response to new regulations.

It’s a fundamental shift, and it’s likely permanent, as even coal executives say. When St. Louis-based Patriot Coal filed for bankruptcy in July, it didn’t mention a war. It said the industry is going through “a major correction,” a convergence of “new realities in the market.”

Environmental standards are growing tougher as Americans outside coal country demand clean air and water. Old, inefficient, coal-fired power plants are going offline or converting to natural gas, cutting into a traditional customer base. And that gas poses fierce, sustainable competition, thanks to advanced drilling technologies that make vast reserves more accessible than ever.

Even if the reviled regulations fell away, many experts say, coal’s peak has passed.

The AP story also points out another fact that “War on Coal” messengers are silent on: Virginia and West Virginia have supported more coal jobs in June of this year than at the same time in 2010 and 2008, according to the Bureau of Labor Statistics.

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