Troubled Times for Coal Industry amid Stricter Regulations and Decreased Demand

August 20, 2014

In the heart of Appalachia, where the coal industry wields enormous power over government and public opinion, lifelong resident and 2009 Goldman Prize winner Maria Gunnoe fights against environmentally-devastating mountaintop removal mining and valley fill operations. Her advocacy has led to the closure of mines in the region and stricter regulations for the industry.

As a result of those stricter regulations, an increase in coal imports and the rise of cheap natural gas, the coal industry is in a slump – and mining giants like Alpha Natural Resources, formerly Massey Energy are feeling the effects of the depressed market.

At the end of June 2014, Alpha reported a $512 million loss in its second quarter. One month later the company warned of the possibility of large layoffs for several West Virginia mining operations, and just last week they announced the closing of a longwall mine in southwestern Pennsylvania.

Alpha said its actions “are being triggered by persistent weakness in U.S. and overseas coal demand and depressed price levels, along with government regulations that are causing electric utilities to close coal-fired power plants and forgo new construction.”

In June 2014, the Environmental Protection Agency unveiled its proposal to cut carbon pollution from power plants by 30% from 2005 levels by 2030. The proposed regulation is the centerpiece of President Obama’s Climate Action Plan, which focuses on cutting carbon emissions from new and existing coal fired power plants, the source of nearly 40% of the country’s greenhouse gas emissions.

“Nearly one of every five existing coal-fired power plants is closing or converting to other fuel sources.” Central Appalachian coal “has been the biggest loser” from the EPA’s actions, Alpha said.

All of this comes after a March 2014 settlement, which ordered Alpha Natural Resources to pay a record $27.5 million fine and spend $200 million to reduce illegal toxic discharges into hundreds of waterways across five Appalachian states.

“We still appreciate coal mining jobs and the investments here in West Virginia, but they’ve got to be responsible,” said Governor Earl Ray Tomblin, who said his share of the fine — $8.9 million — will be spent on stricter enforcement of the laws at the state level.