Predictions of Coal’s Demise a Tad Premature

E. Morgan Massey

As a teenager E. Morgan Massey worked a summer job in the West Virginia coalfields as an assistant “field man.” He traveled around with Stuart Andrews (father of the late state Senate Finance Chair Hunter Andrews), keeping tabs on coal mining operations represented by¬†his grandfather’s coal sales company, the Richmond-based A.T. Massey Coal Company. That was during World War II, before Massey enlisted in the U.S. Army Air Corps, graduated from the engineering program at the University of Virginia, and began mining coal, not just selling it. At 91 years, he has seen more ups and downs in the coal industry than a Kings Dominion roller coaster, and he thinks the market may be turning again.

Not only has Massey lived through more booms and busts in the coal industry than just about anyone alive, he has made more money than most. He built A.T. Massey Coal into the fourth largest coal producer in the country before he retired some 25 years ago at 65 and Massey Coal went public as Massey Energy. Vowing not to compete with his old colleagues, he proceeded to pioneer the development of the South American coal industry and become the first American to invest profitably in a Chinese coal enterprise. The key to his success was a philosophy articulated when he ran Massey Coal under a joint partnership of the Fluor Corp. and Royal Dutch Shell. He steered the company’s capital into highly productive mines that would remain profitable even during the inevitable downturns in coal prices. To boost output during the good times, he leased out marginal coal reserves to sub-contractors who would bear the brunt when prices tumbled.

The coal industry has taken a walloping the past decade as tighter federal environmental regulations have penalized coal as an electric power source, the fracking revolution has undercut coal as a boiler fuel, and solar and wind power have begun displacing fossil fuels generally. While a market remains for high-quality Central Appalachian coal in the metallurgical market (in which coal is processed into coke and used to make steel), the steam coal market seems to be shrinking with no let-up in sight. The situation has become so bad that the Charleston Gazette-Mail¬†headline has proclaimed that coal’s decline is “imminent” with or without President Trump’s recently announced regulatory rescue.

When I’m not blogging for Bacon’s Rebellion, I’ve been working with Massey on writing a corporate/family history of the Massey family and the A.T. Massey Coal Company, and I’ve had the benefit of his thinking. Coal has survived the demise of its market as a fuel for railroad locomotives, steam ships, a home-heating fuel, cheap oil, and abundant nuclear power. Coal has always found new markets. Even if no new markets materialize any time soon, the depression in coal prices and production has been so severe that Massey thinks the time may be opportune for some bottom fishing.

Despite his age, Massey still has the entrepreneurial bug. While he’s not interested in opening any new coal mines, he sees a future in the fuel. With the help of 80-year-old Stan Suboleski, a former head of Virginia Tech’s mining engineering program, he’s launching a new venture, the Minerals Refining Corporation. This time around, he’s “mining” coal using a technology developed at Virginia Tech to extract coal fines (and possibly rare earth metals) from the massive piles of preparation-plant refuse found all over Appalachia. One way or another, he’s determined to find a way to extract a profit from the black rock.

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13 responses to “Predictions of Coal’s Demise a Tad Premature

  1. Not familiar with the term “coal fines”… got a definition?

  2. Fine grains of coal that the coal-preparation process fail to capture. They get mixed in with the refuse, constituting (as I recall) as much as 2% of the volume.

  3. Sounds like a great project, Jim.

    Mr. Massey represents the breed that made America, the kind of people who lived and worked in the real worlds, solving real problems and finding and exploiting real opportunities. Like, of course, high tech not so long ago.

    By the way, I recall reading not long ago that coal has made a strong resurgence in Germany of all places, after apparently the Greens ran themselves and their neighbors over a cliff. Ideology is bad for human health. And the Germans seem have a special knack for it, if history be our guide.

    • After Fukushima, Angela Merkel and Germany decided to gradually shut down their nuclear power plants and switch to renewables and coal. I believe coal use in Germany is better than our USA model with much more emphasis on co-gen and recovering waste energy, so I believe efficiency can approach 40-50% versus the 25-30% low efficiency coal-fired plants that USA likes to do.

  4. Mr. Massey is a fine gentleman who helped me with my book on the coal industry and his former company. As for getting rare earth materials from coal, the University of Kentucky is researching using coal ash for just this purpose. Maybe tell your former sponsors, Jim.

  5. re: Germany – the problem with renewables in Germany is that – you need natural gas to complement the renewables and the natural gas comes from Russia… coal is not compatible with renewables.. it’s an either/or proposition.

    Coal is NOT that fuel because coal is baseload – it cannot ramp up and down quick enough to complement renewables as gas can; the renewables won’t work – because the coal plants have to run 24/7 . Nukes have the same problem… they can’t come online quickly

    California is having a similar problem – renewables have to have a complementary fuel that can ramp up and down quickly – neither coal nor nukes can do that.

    I’d be the first in line to support coal if we can find a way to burn it and reduce the emissions substantially including the mercury. People do not realize just how dirty coal really is… and the harm it causes to people’s health – not to mention the damage inflicted when it is extracted these days by stripping off mountain tops to strip mine the seams.. Only the people who live near the strip mines or near the plants that burn coal – know how bad a fuel it is. Folks who live insulated lives in urban areas – far from the coal plants – just don’t realize the issues.

    But coals problems beyond emissions is an economic thing – coal is no longer competitive with gas or renewables..to generate electricity – even mined dirty and burned dirty. You don’t need an EPA or a CPP to stop coal – simple economics does it in those countries that have gas. Countries that don’t have gas – or cheap gas are still stuck with coal.

    If we make a breakthrough – perhaps with ultra high temps combustion – that completely burns the impurities also – it will be an earth-shaking discovery as coal is still the predominate fuel for electricity in most other countries. I’d be all for it – but I’m NOT in favor of “bringing coal back” – as is.

  6. Except that there is an upsurge in the use of coal in Germany, and carbons are increasing, not decreasing in Germany, ’cause the Germans went overboard on renewables, now are scrambling

    And, by the way, the Chinese are apparently pulling out all the stops on nuke energy. Expect China to rule the world soon on that technology, its sale, deployment, production, and operation, worldwide, particularly developing nations, giving them big foothold and footprint there, worldwide.

    Facts are damn stubborn things. Surprise, surprise. Facts keep turning around and biting us in the ass.

  7. re: ” Except that there is an upsurge in the use of coal in Germany, …”

    yup – because you cannot run your grid on renewables alone – and gas is not available or too expensive… so they have to use coal – and coal is not compatible with renewables – it’s a 24/7 or nothing proposition.

    China is pulling out the stops on all forms – Nukes, Coal, Hydro and renewables – so they can electrify more and more of China – and they are agnostic on the fuel source.

    And China also does not care about pollution – most of their cities look like cities of 100 years ago when it comes to air quality and they don’t care about nukes that are not safe… either.. something that matters to most other countries who would no soon buy China’s nukes than the man in the moon.

    Yes , facts ARE stubborn things – but you gotta be willing to look at all of them.

    start here: https://en.wikipedia.org/wiki/Nuclear_power_in_China#Nuclear_waste

    However, just like with Coal – I’m 100% in favor of Nukes – if we can build safe ones that will not melt – and we have a viable plan for how to deal with the waste. I think Nukes that are safe enough to site near the urban areas they serve would be a win-win. Right now -the urban areas seem to want electricity but they want all the plants that make it – far away.

    • Larry, you’re singing to the choir master, not educating him. And you need to dig far deeper on your China nuke explanation. It goes far deeper.

    • Larry,

      Why would you be 100% in favor of nukes when they will increase energy prices by so much? The Virginia AG said North Anna 3 would increase utility bills by 25% (if they could bring the project in on budget and on schedule – not likely these days).

      Even extending our existing units another 20 years will be far more expensive than other options.

      Help me understand the basis of your support, especially since you recognize that their inflexible nature is an increasingly bad fit in our modern energy system.

  8. been reading:

    ” Chinese nuclear versus renewables: who is winning?”

    https://www.chinadialogue.net/article/show/single/en/6215-Chinese-nuclear-versus-renewables-who-is-winning-

    but a very relevant issue is that renewables are not compatible with coal nor nukes… as coal/nukes generally have to run 24/7 and cannot dynamically modulate to accommodate renewables…

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