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For the fifth time this year, a major coal company — this time Murray Energy — declared bankruptcy, despite all the President’s efforts to buoy the dying industry. The company will get to continue to operate even as it restructures its $2.7 billion in operating debt. But The Washington Post reported that according to its bankruptcy court filings, Murray Energy may seek relief from its $8 billion in pension debt and future payments into a federal fund for miners’ pensions and that relief for Murray would result in the depletion of the retirement fund for all 90,000 miners (most of whom are retired) across the country by 2020. And there is no mention of how the company will pay for environmental reclamation after these mines shut down for good.
Why This Matters: The Congress could appropriate money to fully fund the pension fund, thereby subsidizing coal mining, but in a way that helps workers rather than executives and stockholders — so far they have refused. As The Post’s Dino Grandoni of “Energy 202” explains, “the idea of the federal government bailing out the union miners has divided Senate Republicans. Other budget-minded senators from coal-mining states, such as Mike Enzi (R-Wyo.), have objected to using federal appropriations to bail out a private pension plan.” The bottom line is that the coal industry’s success in getting Trump to lift environmental rules did not result in enough savings to make these coal companies solvent. So everyone (other than coal company executives) loses — the workers, the people who are stuck living near the denuded mess after these mines shut down, and taxpayers who will ultimately pay for both.
Bankruptcy A Common Way Out
Murray went bankrupt because when it should have been cutting costs — everyone could see the handwriting on the wall for coal — in 2015-16, the company went on a “spending spree” buying mines in West Virginia and Illinois and wracking up billions in debts. And other coal companies have gone the bankruptcy route in recent years, thereby shedding their liability to the retirement fund for all miners. So now the fund is paying out in retirement benefits significantly more than companies are putting in — for every active worker, the plan supports roughly 28 retirees.
Texas regulators have “increasingly allowed companies to do the bare minimum when cleaning up their mining sites, approving a growing number of requests to apply the least stringent restoration standards for their shuttered mines — regardless of whether companies can justify the lower standard.”
“Receiving permission from the state to apply that lower standard, which is for land intended for industrial or commercial use, can save companies millions of dollars and years of reclamation and monitoring responsibilities — and allow them to avoid testing soil for the harmful pollution common at mine sites.”
“The result of these practices is that there are potentially thousands of acres across Texas contaminated with toxic chemicals, which can leach into the groundwater and soil and endanger people’s health.”
To Go Deeper: Read the entire “Captured by Coal” series by clicking here. It is worth your time.
President Trump trumpeted his trade deal with China, but so far it has been a bust, according to The Wall Street Journal — the Chinese have not purchased nearly the amount of energy (in terms of total dollars) as they promised — only $2B in oil and gas purchases against a commitment of $25B for this year.
A federal judge in Washington, DC ruled yesterday that the Dakota Access Pipeline must shut down and empty all its oil until the government completes an environmental review of the pipeline’s impacts, giving the Standing Rock Sioux Tribe, whose reservation lies downstream, a huge victory. Similarly, late in the day, the Supreme Court refused to overturn the order of a district judge that shut down construction of parts of the Keystone XL pipeline so it is also blocked for now.
Why It Matters: The Dakota and Keystone XL news is greatly tempered by the fact that numerous other pipeline projects can go ahead despite their inadequate permit unless they are individually challenged in court and blocked.
Yesterday, Dominion Energy and its partner, Duke Energy, announced they were ending a 600-mile natural gas project that would have cost at least $8 billion to complete. As the Richmond Times-Dispatch wrote, Dominion and Duke canceled the construction of the Atlantic Coast Pipeline in the face of mounting regulatory uncertainty caused by a federal court […]
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