Big Coal keeps whining
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The day after Barack Obama won re-election, the CEO of Murray Energy Corp., Robert E. Murray, gathered his staff and began to read a prayer. He asked God to forgive America for its choice of president, and he prayed for "guidance in this drastic time with the drastic decisions that will be made to have any hope of our survival as an American business enterprise." He closed with a heartfelt "Amen."
Then he fired 156 people.
Mr. Murray explained that the layoffs were inevitable in light of Mr. Obama's re-election. And he's not the only coal baron to cite the president as the cause of the industry's supposed death knell.
CONSOL Energy Inc. President Nicholas Deluliis blamed Mr. Obama for 145 planned layoffs, while Alpha Natural Resources CEO Kevin Crutchfield cited the Obama-created "regulatory environment" as the basis for 1,200 job cuts this fall. Other coal executives poured millions into (ultimately ineffective) anti-Obama super-PACs. The Mitt Romney campaign also tried to stoke anger against the administration to win over voters in coal country, especially in Ohio, echoing the coal CEOs' invectives against Mr. Obama and his environmental regulation.
There's a slight flaw, however, in this blame game: It's almost entirely made-up.
President Obama has indeed increased regulation over the coal industry to limit output of carbon and mercury, mandating that older plants update their emission controls. But his efforts have been fairly mild and the regulations -- which have the benefit of protecting Americans from mercury poisoning -- aren't cripplingly costly to coal companies.
So why is coal stuck in a spiral of decline?
In part, it's due to a decades-long boom in natural gas, which is not only easier and cheaper to produce than coal but also significantly less reliant on government subsidies. (The federal government leases land to coal companies at artificially low prices.)
Yet the vagaries of supply and demand don't tell the full story of coal's downfall. It's not just the market. It's the reckless mismanagement of coal-industry CEOs, many of whom are more interested in skirting regulations and scoring political points than in maintaining jobs, modernizing their technology or keeping their mines safe.
Consider Mr. Murray. In 2010, one of his mines leaked coal slurry into Captina Creek in southeastern Ohio, home of the endangered hellbender salamander. This wasn't the first time a mine under Mr. Murray's purview had committed such an infraction, or the second. It was the seventh. The multimillion-dollar fines that resulted from these offenses can't exactly be laid at the feet of the president.
Mr. Murray also has tried to shirk blame for the 2007 Crandall Canyon mine catastrophe in Utah, where nine people died after the collapse of a Murray-run mine. Crandall Canyon had been cited for 64 safety violations before the tragedy, but Mr. Murray ignored them all, ultimately insisting that the collapse was caused by an earthquake. It wasn't, and the company was fined $1.85 million.
Mr. Murray's misdeeds don't end with lost lives or environmental destruction. He donated millions upon millions of dollars to Republican candidates over the last few election cycles, gathering the money through outrageous means. Mr. Murray created a company PAC and encouraged his employees to contribute to it. More than encouraged, actually: Employees were told that they were expected to donate by automatic payroll deduction, and some were told directly to give money to specific candidates. Mr. Murray also expected certain employees to attend $2,500-per-person Rick Perry fundraisers. Mr. Murray has denied any misdeeds.
These kinds of eye-popping donations to conservative causes are common in today's coal industry.
Joseph Craft, CEO of Alliance Resource Partners LP, gave $4.35 million to several conservative super-PACs during the 2012 election. Richard Gilliam, founder of Cumberland Resources Corp., a private coal producer, gave more than $1 million to pro-Romney, anti-Obama super-PACs. Oxbow Corp., a Bill Koch-run company with investments in natural resources, including coal, gave more than $1 million to super-PACs supporting Massachusetts Sen. Scott Brown and Mitt Romney this year.
All of this money could have been invested in mine safety, improved emission controls or workers. Instead, it was wasted. None of the candidates supported by these coal barons won, though that won't stop them from trying again.
The coal industry has a long history of obfuscating facts, financing friendly public officials, undermining public debate and evading oversight. Coal companies have spent millions lobbying against regulations, trying to discredit the link between coal and global warming and even discouraging energy conservation.
Coal might be in decline, but it's not because of a few modest regulations enacted by the Obama administration. It's because decades of unmitigated power have left the industry hostile to change, quick to squander money and vulnerable to the very principle touted by Mr. Murray in his perverse doomsday prayer: the demands of the market.
First Published November 18, 2012 12:00 am