Category Archives: Economy

Fracking Our Pristine Mountain Forests

GW forestBy Peter Galuszka

Is nothing sacred? Of all groups, the U.S. Forest Service should protect the lands it controls, but today it introduced a plan that would allow limited hydraulic fracturing for natural gas in the 1.1 million-acre George Washington National Forest which straddles Virginia and West Virginia.

Virginia Gov. Terry McAuliffe had opposed lifting the ban, although he supports other proposed gas projects in the state, such as the 550-mile Atlantic Coast Pipeline that would stretch from the fracked gaslands of Northern West Virginia over the mountains and southeastward to Southside and Hampton Roads and North Carolina.

Forest lands help supply drinking water to 4 million people including those in Richmond and Washington. Some of the forest land has so-called “Karst” topography made up of rock formation that can be dissolved. In those conditions, any leakage of methane, or the toxic, powerful chemicals used in fracking would be more, rather than less, likely to poison drinking water.

The only good news out of the new USFS plan is that before some 995,000 acres could be available for drilling and that amount will now be limited to 177,000 acres.

But what can’t they let it all be? If you head west where the heart of the Marcellus Shale formation has become one of the mega-meccas of fracked gas, you hear of impacts of all types from drilling. These have included fire, explosions, diesel generators roaring 24/7, drinking water effects, bright floodlights and so on. In fact, I am embarking on a drip in about an hour that will end up in frack-land and will report when I get back.

To be sure, natural gas drilling has been going on for decades in the Appalachian Plateau of the western slopes of the Appalachians. Few pipelines crossed eastward over mountains and it was rare to find many drilling rigs in those areas.

But the fracking craze continues unabated and is now a $10 billion industry in the Marcellus Shale formation. One potential new target could be a different formation that starts from Fredericksburg and slips under the Potomac northeast into Maryland. A Texas firm with a letter drop address has been talking about leasing rights for fracking. One assumes that if the leases are in place, they’ll be quickly flipped to an actual drilling company, but you won’t know who. Virginia is only in the very early stages of setting up state rules for fracking.

Environmentalists say natural gas can be an even worse carbon polluter than coal should methane be released. Some others believe that the biggest damage comes not from the actual fracking process with millions of gallons of water and chemicals but from faulty wells.

One can make an argument that gas is good because it has completely reorganized the global pecking order in terms of energy. It means the U.S. need not be beholden to machinations of the Middle East, Central Asia and the likes of Vladimir Putin.

What bothers me is the rush to frack. I remember back in the 1960s in West Virginia when mile after mile of mountain side had been ripped apart by surface miners. It was a cheap way to get at coal. Mystery companies were supposed to reclaim the mine site but rarely did because they’d bankrupt one alphabet soup firm merely to create a new one.

The fracking craze, if not properly regulated, could yield even worse environmental disasters.

Former Massey Coal Chief Indicted

DonBlankenshipBy Peter Galuszka

The indictment today in Charleston, W.Va. of coal baron Donald L. Blankenship, the former head of the notorious Massey Energy Company, for violating federal mine safety and securities laws, has been long awaited, especially by the families of the 29 miners who died on April 5, 2010 in a huge explosion at Massey’s Upper Big Branch mine in Montcoal, W.Va.

It was the worst coal mine disaster in this country in 40 years. It topped off a wild run by Blankenship, who thought he had political potential and spoke for the Appalachian coalfields while dodging safety violations and blowing away mountains in horrific surface mining practices.

He was a poster man for the view, popular among this country’s business elite, that cost cutting and productivity are sacrosanct, human lives are cheap and environmental concerns such as climate change are mere diversions from the country’s true goals. At one point he literally wrapped himself up in the American flag to push his ideas.

A federal grand jury today turned those arguments on their heads. The four charges accuse Blankenship of conspiracy in blunting the numerous federal safety violations that lead to the catastrophic disaster at the Upper Big Branch mine.

For several years leading up to that fateful day, Blankenship allegedly connived to ignore concerns that the mine had broken equipment and excessively high levels of highly inflammable coal dust. He also is accused of keeping federal mine inspectors from doing their jobs.

The grand jury also claims that Blankenship violated federal securities laws by giving investors misleading information about Massey stock.

Blankenship was a huge celebrity in the Appalachian coalfields. Tying himself to a reactionary ideal of doing what he thought was best for America, he spent a million dollars at what was an anti-Labor Day celebration in West Virginia in 2009. He wore a costume formed from an American flag and hired testosterone-infused country music stars Hank Williams Jr. and Ted Nugent to entertain his crowd.

The irony was that it was a holiday to celebrate labor unions while Blankenship and his firm were notorious for union-busting. He also had a habit of taking the chief justice of the West Virginia supreme court on vacation on the French Riviera.

Another irony is that Blankenship, like much of the U.S. coal industry, promotes the propaganda that there is a “War on Coal” and that coal is essential to “keeping our lights on.” Never mind that the free market and the flow of natural gas from hydraulic fracturing drilling from the very same area, not the U.S. Environmental Protection Agency, are what is really hurting the Appalachian steam coal market.

The coal mined at Upper Big Branch, however, had nothing to do with power generation. It was metallurgical coal that was exported to make steel in markets such as China. At the time of Upper Big Branch, China’s steel market was hot and met coal prices were going through the roof.

The indictment reads that the group of mines associated with Upper Big Branch “generated revenues of approximately $331 million, which represented 14 percent of Massey’s approximately $2.3 billion in in revenue.” Obviously, it was in Blankenship’s interest to keep the steel-making coal flowing.

In that process, according to the indictments, Blankenship oversaw efforts to cut corners, dodge safety issues and keep miners on edge. They are rich in detail about poor ventilation; flawed water sprays to keep explosive coal dust down and warning when federal coal inspectors were on the prowl.

After he was forced to resign from Massey Energy with an over-sized golden parachute, Blankenship kept quiet for a couple for of years. Recently he came back on the scene with a self-made documentary just on the eve of the fourth anniversary of the Upper Big Branch disaster. The movie was so tasteless that even Joe Manchin, a U.S. Senator from West Virginia who was quoted in the film, disassociated himself from it. Families of the dead mines were appalled.

The long-in-coming indictments illustrate the problems of coal as an energy and steel source and just how its issues have been ignored in the Appalachians for about 150 years. In the past, huge mine disasters, such as the 1968 blast at Farmington W.Va. that killed 78, sparked real safety reform.

Not so after Upper Big Branch. Pro-coal Republicans in Congress have blocked bills to toughen rules. This is a reason why the federal indictments are so important. They show that leading a culture of safety laxity will no longer be tolerated.

It may be curious that Blankenship’s indictments come just after President Barack Obama has just agreed to a turning point treaty with heavy polluter China to cut carbon emissions. But they should give some closure to long-festering problems in a part of the United States where industrial death and destruction are considered business as usual.

Kudos: U.S.-China Climate Pact

Shanghai: Soot City

Shanghai: Soot City

By Peter Galuszka

President Barack Obama’s trailblazing pact with Chinese leader Xi Jinping to limit greenhouse gas emissions through 2025 is welcome news and could do much to reduce carbon dioxide emissions since the two countries are responsible for about 40 percent of the globe’s total.

China is an economic powerhouse so energy hungry it builds a new coal-fired generating plant about every eight to 10 days. Its leaders have pledged to cap  carbon emissions by 2030 or earlier.

Obama announced a plan to cut U.S. emissions by 26 to 28 percent below 2005 levels by 2025. This is a bigger cut than the 17 percent reduction by 2020 that he had announced earlier.

The agreement, reached in Beijing, is most welcome for the obvious reason that it would make a huge contribution to reducing greenhouse gases. It also undercuts the arguments by the fossil fuel industry, some utilities and their drum beaters that any steps the U.S. takes in cutting carbon pollution are pointless since China (or other Asian countries) will keep polluting anyway.

The arguments are crucial since Virginia’s Big Energy industry and the staff of the State Corporation Commission are attacking plans by the EPA to greatly reduce carbon.

Consider this gem of wisdom from another correspondent on this blog: “Virginia could revert to stone-age levels of zero greenhouse gas emissions tomorrow, and the savings would offset the increase in CO2 from coal-fired power plants built in India and China in a year! (OK, maybe not a year, but over a very short period of time.)”

Sadly, this kind of mentality is regressive and, with the new Washington-Beijing pact, is becoming increasingly irrelevant.

One thing many American commentators don’t seem to realize is that China isn’t necessarily a primitive business juggernaut stomping on any rational plan to check pollution. Beijing and Shanghai have some of the highest rates of air pollution in the world and its leadership, especially engineers and policy makers capable of understanding how technology can help them, knows they just can’t continue as before.

Three years ago, I visited both cities to research a book on the coal industry (newly out in an updated paperback, by the way, see below). I also went to Ulanbatour, the capital of coal-driven Mongolia where the air was so bad, I felt delirious within hours after arrival and by the next morning I showed signs of pulmonary illness.

The promise for changing things seems to money and the system.

In the U.S., we have a regulatory oversight apparatus over energy generation. This is reasonable because it prevents electric utilities from using their monopoly power to stick customers with high rates. But the system is flawed because: (1) it too often favors big utilities over average consumers and; (2) it is rigged to prevent new, experimental and possibly transformative technologies that very well could allow the use of dirty and dangerous but still cheap coal.

In the latter case, the thinking seems to be to go for ephemeral cost benefits (like using natural gas) without having any long-term strategy that actually might save lots more money through better health and more efficient, less-polluting energy.

In several cases, regulators nixed pilot plants that burn coal but use special new ways of doing so that capture a lot of carbon either in a chemical process involving ammonia or by stripping off the carbon emission from the pollution stream and sequestering them safely away. The plants cost big money. They are much cheaper to do as greenfield sites but regulators are more inclined to prevent them in favor with the soup d’jour of power that happens to be cheapest at the moment, in our current case, natural gas. Continue reading

How Not to Spend Public College Money

vsu multi-use

Virginia State’s multi-use center

By Peter Galuszka

As Virginia’s students and their families struggle paying their tuition and related expenses, the state’s 15 public universities continue to charge excessively for mandatory fees for athletics and massive bricks and mortars projects.

These are the conclusions by the Joint Legislative Audit and Review Commission (JLARC) which has issued a series of studies on college spending to the General Assembly. Dubious fees and a $7 billion collegiate construction boom are some of the reasons why the average tuition for in-state students has risen 122 percent over a decade.

One doesn’t have to look far to see the shiny new buildings. At Virginia Commonwealth University in Richmond, former President Eugene Trani spent decades expanding his school’s two campuses. In the process, he transformed downtown for the better but one must ask why the huge expansion seemed to get more attention and resources than raising the school’s academic status. . Late this summer, VCU ordered a $21 million budget cut to help the state with its $881 million revenue shortfall.

In Charlottesville, students at the University of Virginia can enjoy the recently completed $100 million South Lawn project that was a decade in the making and added a patch of new buildings. It is now adding a children’s medicine building at his health care complex.

For one of the stranger examples of dysfunctional spending, consider Virginia State University near Petersburg. The small, historically Black school is well into building an $84 million multi-use center that would serve students as well as offer a venue for community events, much like VCU’s Siegel Center which hosts graduation ceremonies for many area high schools.

As the center is being built, school officials plan to use it to help transform the surrounding areas of the small town of Ettrick. They are using the model of VCU about 25 miles up Interstate 95 as a blueprint for linking school expansion with local community development.

Yet VSU faces such serious financial problems that its president Keith Miller, stepped down unexpectedly on Halloween. Thanks to shortfalls in financial aid and other problems, the school ended up with a sudden $19 million shortfall. Attendance at the school is down 1,000 from last year and 550 short from what the administration had expected.

Students complain that they found out about cuts in their state and federal aid only at the very last minute and many had to drop out. VSU has been through a series of financial problems that have forced it to switch to a fast food-only menu at one of its dining halls. Laboratory equipment is scarce, students say.

They wonder why the school is busy erecting a huge new multi-use center when they have many more obvious and pressing problems at hand. A school spokesman says that funding for the new center is handled by a foundation and is not directly linked to the school’s financial system. VSU is expected to name an interim president later this week after more than 900 students signed petitions asking for a wholesale revamp of the school’s top management.

JLARC found other areas of concern, such as forcing students to pay mandatory fees for sometimes oversized athletic programs that tend to operate in their own worlds that have little relevance for most students. Not every student cares about all of the sports or has time to support every team. Plus, JLARC says that the state should reconsider its methods of handing out financial aid to make sure that low and middle income students are the ones who actually get it.

One hears a lot about overpaid professors and administrators. But the JLARC studies suggest their salaries may be less of a problem than using colleges as cash cows for construction projects and to prop up ambitious sports programs that may have very little to do with the schools they represent.

Virginia Metros Rank High in Economic Freedom

EFIby James A. Bacon

The political class is all excited (or agitated, as the case may be) by the Republican takeover of Congress in Washington, D.C., but life continues as usual here in the boondocks. The pocketbook issues that propelled the Republicans to power nationally dominate politics at the state and local level as well. Everyone is asking the same questions: How do we get our lethargic economies moving again? How do we create more jobs? How do we raise incomes?

Normally, to ask the question in a political context is to provide a political answer. To stimulate job creation, government should do X, Y or Z. However, while government is indispensable for providing core services such as education and transportation, one can argue that too much government can crowd out the private-sector activity that engenders growth.

Last year Dean B. Stansel, with Florida Gulf Coast University, put that idea to the test. He created an Economic Freedom Index (EFI) for U.S. metropolitan areas that ranked metro regions by ten measures of government taxation, employment and transfer payments as well as factors such as the minimum wage and union density. The results on a one to ten scale ranged from Naples, Florida (8.52), to El Centro, California (3.32). The results for Virginia Metropolitan Statistical Areas can be seen in the chart above.

If you put much stock in this index, the news is very good for Virginia metros — every metro ranked in the top third nationally in economic freedom, and most ranked in the top quartile. Remarkably, the People’s Republic of Charlottesville scored the No. 10 spot nationally!

Stansel argues that his measures of economic freedom do correlate with jobs and income. The connection with jobs is strongest with correlation coefficient of 0.416, which means that the EFI explains almost 42% of the variation in unemployment between metros. There is a meaningful, though weaker, correlation between economic freedom and incomes: a coefficient of 0.164, explaining 16% of the variation.

(Stansel freely concedes that his EFI is a work in progress. By my reckoning, the index ignores at least one critical aspect of economic freedom: Governments vary widely in the degree to which they regulate land use. The effects of land use upon the cost of government, the quality of life and the environment can be profound. Admittedly, finding uniform statistics that measure the intensity of land use controls and regulations may be a problem.)

On average freer metropolitan areas appear to fare better economically than less-free regions. But the EFI leaves a lot unexplained. The flip side of the coin is that other factors explain 58% of the variation in unemployment and 84% of the variation in income. The regional industry mix is probably the most important factor of all; regional economic fortunes ebb and flow with economic tides over which local government and civic leaders have no control. But the quality and availability of education, I would conjecture, is a factor, as is the adequacy of transportation infrastructure and other government-provided amenities.

I would argue that the optimal regional policy mix would entail (1) government that focused on a few core functions and excelled at providing them, (2) a strong educational system, (3) an adequately funded (but not overfunded) transportation system, and (4) an array of public amenities from recreational parks to bike lanes that help attract and retain young, educated workers.

But others might disagree. Gee, it would be nice if someone compiled a national database that would allow us to run regression analyses on variables that might influence the creation of prosperous, livable and sustainable regions. Maybe that person will share his or her data with Bacon’s Rebellion one day!

Takeaways From the GOP’s Big Win

gillespie warnerBy Peter Galuszka

The night of Tuesday, Nov. 4 was an ugly one for the Democrats and a big win for Republicans. Here are my takeaways from it:

  • U.S. Sen.Mark Warner clings to a tiny lead that seems to grow slightly, still making it uncertain if opponent Ed Gillespie will ask for a recount. The surprisingly tight race is an embarrassment for Warner. It likely takes him out of consideration to be Hillary Clinton’s running mate in 2016 although Democrats Tim Kaine and Jim Webb are still possibilities.
  • Ed Gillespie ran a smart campaign and came off as a solid candidate. Of course, we are comparing him against Kenneth Cuccinelli and that’s a very low bar but Gillespie’s projection of being relaxed and confident helped him. Gillespie did very well despite being dissed by the national Republican money machine. Look for him in the gubernatorial race of 2017.
  • Barack Obama takes his lumps — again. The country’s on the mend and things are going fairly well (despite what you may watch on Fox), but Obama is incapable of cashing in on that. His cool, detached style is a big minus and makes him seem careless and incompetent, especially when crisis like ebola come up that are not of his making.
  • The Republican wins on Capitol Hill are more significant than the Tea Party inspired once during the 2010 midterms.But the earlier races brought in a kind of mindless negativity and gridlock by both parties that truly hurt the country. Will that happen again? Or will older, wise heads prevail?
  • Increase in coverage my Obamacare The New York Times

    Increase in coverage by Obamacare
    The New York Times

    You might get some bipartisan action on taxes and the budget, but deadlock remains for Affordable Care and immigration. The fact is that Obamacare is too far along to change much and people actually like it, despite what you hear in the right-wing echo chamber. This chart from the New York Times shows that the ACA has boosted health coverage in some of the poorest parts of the country, such as the Appalachian coal country, the African-American belts of the Deep South; and poor parts of the Southwest like New Mexico and parts of Arizona. This alone is a big success.

  • Immigration. Look for Obama to use executive authority to come up with an immigration plan. It is an emotional, hot button issue that reveals lots of ugly attitudes. But something needs to be done fast. The GOP has no plan, except for George W. Bush who actually pushed a workable solution that was compassionate. That got soaked by the Tea Party, but then Republican Mitt Romney came up with a health care plan for Massachusetts that looks remarkable like Obamacare and was a precursor. If the GOP can get back to those helpful ideals, there may be hope.
  • Warner lots big swaths of voters who had been with him, like Loudoun County and parts of rural Virginia. This is alarming for the Dems and shows they need to project their messages a lot better. Warner’s poor performance in debates didn’t help either.

It is a big win for the GOP, but somehow I don’t feel as bitter as I was in 2010.

At Last, a Chance to Address Fundamental Issues

Image source: Congressional Budget Office

Image source: Congressional Budget Office

by James A. Bacon

With yesterday’s elections, the Republican Party has taken control of the United States Senate and padded its lead in the House of Representatives, assuring a markedly different political dynamic in the two years ahead. The big question on everybody’s minds is, “Can Republicans govern?” Or will we see two more years dominated by Ted Cruz trying to shut down government?

My sense is that Republicans are very serious about governing, certainly more serious than was outgoing Senate Majority Leader Harry Reid, the one-man algae bloom who rendered the Senate a dead zone for new legislation over the past four years. Republicans are likely to pass a passel of new laws. The question then will be, “Is President Barack Obama serious about governing?” Will he  work with Congress or will he veto everything that comes across his desk?

While the last four years have been a big battle over nothing, rest assured that the next two years will grapple with issues of fundamental importance. As the United States hurtles toward Boomergeddon, Republicans will tackle budgetary issues that Obama has been studiously avoiding since he disavowed the recommendations of his own Bowles-Simpson budget-balancing commission. The issues will be debated in a way they haven’t been for far too long.

This year, the budget situation looks relatively benign. Economic growth is puttering along and the Congressional Budget Office (CBO) projects that the deficit will shrink to its smallest size since 2007, equivalent to about three percent of the economy. That’s roughly equal to the rate of economic growth, so the national debt, while growing, is not growing as a percentage of the economy. But the CBO does not expect this balmy scenario to last. Says the CBO:

The pressures stemming from an aging population, rising health care costs, and an expansion of federal subsidies for health insurance would cause spending for some of the largest federal programs to increase relative to GDP. Moreover, CBO expects interest rates to rebound in coming years from their current unusually low levels, raising the government’s interest payments. That additional spending would contribute to larger budget deficits—equaling close to 4 percent of GDP—toward the end of the 10-year period spanned by the baseline, CBO anticipates. Altogether, deficits during that 2015–2024 period would total about $7.6 trillion.

That sounds bad but not Boomergeddonish. But there’s a big caveat. At some point, says the CBO, government spending crowds out economic growth in the private sector.

The large amount of federal borrowing would draw money away from private investment in productive capital in the long term, because the portion of people’s savings used to buy government securities would not be available to finance private investment. The result would be a smaller stock of capital and lower output and income than would otherwise be the case, all else being equal.

Translation: Under the current policy framework, as government spending crowds out the private sector, economic growth will slow. Slower economic growth reduces tax revenues, which increases budget deficits. I’m not certain, but I don’t believe that the CBO cranks that lower economic growth into its long-term budget forecast, which, by its own admission, is highly conjectural and based upon long-term assumptions that likely will not prove to be accurate.

Under a more pessimistic set of assumptions, the federal debt, instead of rising to 111% of Gross Domestic Product by 2039, would reach 180%.

When discussing climate change, Democrats invoke the “precautionary principle.” While we cannot know with certainty that global temperatures will increase by 4° Fahrenheit by the end of the century, as some climate models forecast, the consequences would be so disastrous that we must act to forestall the possibility. I would invoke a fiscal precautionary principle. While we cannot know with certainty that the national debt will approach 180% of GDP within twenty-five years, the consequences will be so potentially disastrous that we must act to forestall the possibility.

Republicans will be animated by the fiscal precautionary principle in the next two years. If past is precedent, the Obama administration will be driven by the desire to protect government spending at all costs. Americans will engage in the most serious debate over the size and scope of government spending, unclouded by distracting side issues, that we have seen in a generation.

Steve Nash’s Important Book

Nash bookBy Peter Galuszka

Stephen Nash, a former journalist who teaches at the University of Richmond, has written an important new book about how climate change could affect Virginia. His detailed reporting is impressive and I think he shatters the arguments of global warming deniers.

Here is a book review I did for Style Weekly:

“Imagine it’s a fall day in 2114. You get ready for a jog down by the James River.

It’s pleasant by the towering palm trees, but you must keep an eye out for alligators and the venomous cottonmouth moccasins as big around as your thigh. It’s best to exercise early because the rest of the day will be typically steamy and windless.

This is what Richmond very well could be like within 100 years if carbon-dioxide emissions stay at the same levels as today. Virginia’s climate could warm up to something like that in northern Florida, according to Stephen Nash, a part-time journalism professor at the University of Richmond in his new book, “Virginia Climate Fever: How Global Warming Will Transform Our Cities, Shorelines and Forests” (University of Virginia Press).”

To read more, click here.

In Energy Studies, No Renewables, Please

Karmis of VT's Center for Coal Research

Karmis of VT’s Center for Coal Research

By Peter Galuszka

For years, Virginia Tech has operated the Center for Coal Research which is dedicated to studying bituminous product, enhance its marketability and make mining it safer and less environmentally destructive.

The center receives funding and has sponsors and an advisory board made up of big utilities like Dominion, coal-hauling railroads like Norfolk Southern, a few state officials and coal company executives from Alpha Natural Resources, Arch Coal and Patriot Coal. No environmental advocates are advisers nor are proponents of renewable energy.

So, it was with considerable interest that I was introduced to a new “watchdog” group named the Checks and Balances Project, based in Northern Virginia and  funded by advocating clean energy and sustainability such as the New Venture fund and Renew American Prosperity Inc.

In several intriguing blog posts, Scott Peterson, a former media spokesman for the New York Stock Exchange and now executive director of Checks and Balances, asks why Michael Karmis, an internationally-known VT coal expert, was asked to write the cost-benefit analysis for the State Energy Plan released last month that will guide the General Assembly in passing laws relating to energy.

Peterson notes that Karmis’s report was a foundation document used by the State Corporation Commission staff when it gave a big thumbs down to the U.S. EPA’s proposed rules to cut carbon dioxide. The SCC claimed that the rules would shutter much coal-fired generation (much of which was going to be shut down anyway) and that renewables like solar and wind are too expensive, unreliable and scarce to replace the lost generation capacity.

I blogged about this repeatedly in recent weeks and I asked why Virginia has such a puny share of renewable energy compared to its neighboring states. I got responses from the SCC and also from Dominion as well as the Virginia Chapter of the Sierra Club and posted them.

Peterson’s points are spot on. Why would the state and the SCC go to such an overwhelmingly pro-coal group for what seems like a self-serving and self-dealing cost-benefit analysis? Do Virginians not deserve input from other players pushing forms of energy? Why did they not consult economic forecasting groups specializing in energy but chose instead Chmura Economics & Analytics of Richmond, which has no special energy expertise and has been criticized (by me) for tending to say what state officials want.

It is really a shame that the administration of Gov. Terry McAuliffe is following the same stacked-decks that former Gov. Robert F. McDonnell used to use. During his time in office, I outlined several instances where McDonnell chose “advisors” mostly from the coal and nuclear and natural gas industries to “study” energy needs or whether uranium mining near Chatham would be safe.

Also take a look at who the sponsors of the Virginia Tech coal center are:

  • Alpha Natural Resources of Bristol bought the extremely troubled and controversial Massey Energy whose renegade CEO, Don Blankenship, was so loose with safety and so strong on production demands that 29 miners lost their lives in a massive blast at the Upper Big Branch mine in West Virginia on April 5, 2010, according to three probes of the incident. I wrote a book about it.
  • Arch Coal is one of the most controversial users of ecologically devastating mountaintop removal surface mining in southwest Virginia, Kentucky and West Virginia,.
  • Evan Energy Investments is a Richmond-based firm started by E. Morgan Massey, whose family started A.T. Massey coal which later became Massey Energy. E. Morgan Massey had no corporate duties at Massey Energy during the 2010 blast but during the 1980s, he beat the United Mine Workers by instituting his “Massey Doctrine” of tough negotiating.
  • Patriot Coal is a spin-off of Peabody Coal, the largest coal firm in the U.S. Peabody had assets in the Central Appalachians but found that its western U.S., Illinois Basin and foreign operations were more profitable so it created Patriot. The spin off has been bankrupt at least once and has been criticized for trying to cut benefits for retired miners who had worked for Peabody.

To be sure, several state and federal organizations are also sponsors and I’m told that the center does do worthwhile working on setting up computer-based networks of sensors that would automatically shut down a deep mine’s operations if it found bad levels of explosive coal dust or methane. It also has done work to find carbon capture technologies that could allow coal to be burned cleanly.

The larger point is that the state is structured in ways that do not provide a place at the table for people not associated with big, traditional, base-loaded energy such as coal and nuclear power stations. Many accounts show that solar and wind are becoming much more technically and cost effective. Although the U.S. Department of Energy does not expect wind or solar to be more than about 20 percent of the total energy mix any time soon, its growth is picking up speed.

If more houses and businesses adopt solar panels as they get cheaper and better, they will reduce their need for Big Energy. As that happens, the large utilities, coal firms and railroads may get stuck with trillions of dollars’ worth of “stranded” and unused assets. Guess will end up paying for a lot of them? The ratepayers, of course, with the SCC’s blessing.

Why Private Space Firms Need Oversight

By Peter Galuszka

Virgin galacticDoes bad news come in twos or threes?

First, on Oct. 28, an Orbital Sciences Antares rocket bound to supply the International Space Station exploded seconds into its take off at Wallops Island on the Virginia Eastern Shore.

Three days later, the Virgin Galactic SpaceShipTwo designed for space tourism broke in two during a test flight over the Mojave Desert in California. One pilot was killed and the second was seriously injured when he parachuted to safety.

Both incidents involve private companies pushing ahead to commercialize space which used to be the province of the federal government, NASA and the military. The Orbital incident brought the usual cries that the government should continue its hands off policies about regulating the private space industry. The Virgin Galactic accident changes that equation.

For some background, here’s space.com:

“Thus far, the private space industry has resisted oversight from federal regulators, but that could change in the wake of the accident.

“I suspect there will be pressure for tighter regulations,” (John)  Logsdon (of George Washington University) said.

“In 2012, Congress passed a bill that extended the “learning period” for the commercial spaceflight industry. The measure was championed by Congressman Kevin McCarthy, a Republican from California, whose district covers the Mojave spaceport.

“The provision essentially prohibited the U.S. Federal Aviation Administration’s Office of Commercial Space Transportation, dubbed AST, from issuing regulations designed only for the protection of passengers until October 2015. The idea behind this hands-off approach was to allow the spaceflight industry to gain real-world data from their first licensed commercial launches; the FAA would, in turn, use this information to eventually craft regulations.

“In the wake of the accident, Virgin Galactic and the National Transportation Safety Board — the federal agency leading the investigation — have warned against speculation until the ongoing investigation is complete. But critics have made strong claims about risks the company took.

“Tom Bower, a biographer of Branson, told BBC Radio 4 that the accident was “predictable and inevitable.” Joel Glenn Brenner, a former Washington Post reporter who has been following Virgin Galactic’s progress, made similar charges shortly after the accident in an appearance on CNN, adding: “I don’t see them at least being able to carry anybody into space in the next 10 years.

“Andrea Gini, of the Netherlands-based International Association for the Advancement of Space Safety, criticized Virgin Galactic for a lack of transparency about its safety procedures.

“We don’t know how Scaled Composites approached this particular test,” Gini told Space.com in an email. “Virgin Galactic has always refused to participate to the public discussion inside the space safety community, and has never sought the support of independent reviewers.”

“Gini said there are elements of Virgin Galactic’s flight design that experts consider hazardous. The decision to fly passengers and even crew without pressurized space suits, for example, could expose them to risk of decompression, he said.

“Space is, and will always be, a risky industry,” Gini said. “But it is not a new one. I believe that commercial operators should approach it with transparency and humility, or their business, and not just their vehicles, will be doomed to failure.””

That’s sobering. In the Wallops Island case, investigators are loo9king at where decades-old, modified, Russian-made rocket engines that the Russians deemed too dangerous to use were a cause.

There are questions that need answering.