By Peter Galuszka
Beware the power of Big Coal, especially in a swing state such as Virginia during election year.
The state that ranks 12th in production in the nation, the Old Dominion has been the source of much coal company campaign contributions, most of it going to Republicans like George Allen, who is running against Democrat Tim Kaine for a U.S. Senate seat.
A good bit of that money has some from Bristol-based Alpha Natural Resources, which bought out Richmond-based Massey Energy, another big Republican political contributor that was forced into a sale in 2011, one year after its lax safety standards contributed to the worst coal mine disaster in 40 years. Jeff Schapiro of the Richmond Times Dispatch notes that Alpha favored Republican candidates over the past four years by giving $1 million to Republican candidates vs. $300,000 for Democrats.
Nationally, the GOP has been very active trying to paint Big Coal as an unappreciated and over-regulated underdog in swing states such as Ohio. The state with the 10th-highest coal production, Ohio has been swinging in the balance during this presidential election. There, miners working for Murray Energy were allegedly told by their boss to turn up for a rally for Mitt Romney in August.
In Virginia, Alpha Natural Resources has been playing the victim’s role as well. On Sept. 18, the $8 billion firm announced that due to a restructuring and bad market conditions, it was laying off 1,200 of its 14,000 workers and closing mines. The announcement reverberated through the political world as more evidence that Barack Obama was trying to kill the coal industry with excessive regulation.
There’s one problem with that. Alpha’s CEO Kevin Crutchfield told me in an interview nearly a year ago that Alpha would be undertaking an assessment of what properties it acquired in the Massey buyout. The takeover brought with it 6,700 Massey employees and some of the richest coal reserves in the world.
Of special interest are reserves of metallurgical coal, almost all of which is exported to make coke for the global steel industry, which is not at all impacted by U.S. air pollution rules. Alpha would be deciding what metallurgical, as well as steam coal for electricity generation reserves, to keep, Crutchfield told me in an interview for a book, “Thunder on the Mountain, Death at Massey and the Dirty Secrets Behind Big Coal,” (St. Martin’s Press) that I was writing. He added that Alpha, like all coal operators, was facing “headwinds” from the unexpected flood of cheap natural gas produced by fracking. That would obviously be a factor in Alpha’s assessment, Crutchfield said.
So, it is indeed curious that after all this time, Alpha chose to announce its layoffs just a month and a half before 2012 elections. To be sure, Alpha said that the layoffs were part of a restructuring to make a better play in world metallurgical coal markets. But its executives certainly knew what the political ramifications would be.
Democrats are unlikely to go too far in dissing coal, either. As the Washington Post notes, Kaine praised Richmond-based Dominion’s new hybrid generating station near St. Paul in southwest Virginia that burns coal and other energy sources, but he claims Allen doesn’t go far enough in considering non-fossil fuels.
Despite the drubbing coal is taking from natural gas, it is still a major political force. It’s an economic force as well. As Gregory Boyce, CEO of Peabody Energy, told the National Mining Association on Monday, “The outlook for coal in particular remains strong” despite what “you intuitively hear when you read the newspapers on listen to the news.”
You heard it here first.
