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President of coal association: Best-case scenario for E. Ky. may be ‘maintaining what we have’

A coal train moved by houses on Typo Tunnel Lane in Typo in December 2006. Typo is a former coal camp located off Ky. Highway 15 a few miles north of Hazard. Thousands of coal jobs have been lost in Eastern Kentucky in recent years.
A coal train moved by houses on Typo Tunnel Lane in Typo in December 2006. Typo is a former coal camp located off Ky. Highway 15 a few miles north of Hazard. Thousands of coal jobs have been lost in Eastern Kentucky in recent years. Staff file photo

Many Kentuckians have either directly or indirectly depended on the coal mining industry to make a decent living. Others argue that burning coal is harming our health and that the extraction method known as mountaintop removal has brought major destruction to the natural areas of Eastern Kentucky. Still others point out that coal keeps energy affordable for Kentuckians. And then there’s the matter of climate change.

Podcast: Q&A with Bill Bissett

Tom Martin discussed these issues with Kentucky Coal Association president Bill Bissett.

Q: In 2011, about 19,000 Kentuckians were employed in coal mining and preparation. By this past October, that number was down to about 9,300 with the decline most pronounced in the eastern coalfields. Nationwide production dropped as much as 10 percent in this past year, and companies have been filing for bankruptcy. Some political leaders say the Obama administration and the EPA are conducting a “war on coal” that’s resulting in the steady decline in coalfield jobs. But economists who follow energy say most of the job loss is being driven by basic economics and that government regulation is not a primary factor — that Eastern Kentucky coal costs more to mine and transport than coal mined in the Illinois Basin. So, which is it? Marketplace economics, or government regulation, or both?

A: First, I don’t use the term “war on coal.” I think it doesn’t really give the issue the nuances it needs. I think that’s more of a political bullet point, if you will, that works politically. But, sometimes, I think when we’re talking about this issue, we need to kind of go beyond that. So, I’m always a little cautious of being attributed to the “war on coal” phrase.

But on your question about economics, the question is: Why is Eastern Kentucky coal having these competitive challenges with its price and has a higher price than we see in the Illinois Coal Basin and other coal fields? Some of that does relate directly to environmental regulation under this president. In his first term, the Obama administration was focused on the production of coal. They’ve turned their sights now more towards the usage of coal as the president tries to address the issue of climate change. So, a lot of the reasons why that coal is more expensive and not as competitive as it could be is because of government intervention.

Q: Is transportation another component of that price issue?

A: Absolutely. Topography. We have coal mines in Western Kentucky where the coal literally comes out of the prep plant on to a conveyor and directly into a barge and then on to the utility. In Eastern Kentucky, you have to truck or rail to a barge and then get it to that utility. So, you do have more transportation costs and that’s a condition of geography. So, that’s a challenge. We don’t blame it on the Obama administration, but there is a factor that needs to be recognized concerning the president’s position regarding our product.

Q: It has seemed that the coal industry has been on the defensive since the EPA was created by President Nixon. The argument seems to have been that the economic benefits of coal and coal mining outweigh environmental and health concerns. How would you address that perception?

A: I find your question fascinating because it falls into a binary camp of economics or environment. And we have to get past that somehow. One of the real positives of SOAR (Shaping Our Appalachian Region) is the fact that you can get the Kentucky Coal Association and the Kentuckians for the Commonwealth at the same table, which is a rarity. Usually, if a group has in its charter they want to decarbonize the planet or do away with the use of coal, I really don’t see how we’re going to have much of a conversation. But we need to start having that conversation. It has to be built with good data.

You mentioned the number of job losses. We need to know what the damage is at the downturn of our industry. It has to go beyond just that simple “fork in the road” between environment and economics. Every form of energy production has some type of environmental cost to it. And I think we have to have a real conversation about that before we look at other forms of electricity. Let’s just do it. What’s the cost not only to our pocketbook, but also to the planet?

Q: For some time economy and environment have been quite polarized. Am I hearing that you’re sensing movement toward common ground?

A: One of the things that I know Tom Fitzgerald, who I think many of us would consider the leading environmental lawyer for Kentucky, would agree upon is: the worst thing is poverty. The worst thing is hopelessness. The worst thing is when people just don’t know what they’re going to do tomorrow to feed their family. That’s not just a question of economics. It’s not going to be solved with a big bag of money out of Washington. It’s going to require brain power. It’s going to require people who disagree working together. We’re trying to do that.

To be blunt, the companies I work for are in the business of mining coal and selling it. Kentucky Coal Association is an advocate for the production and use of Kentucky Coal. That’s our mission. But if we can make Appalachia, if we make Kentucky a better place as well, that’s good work and important work. So, there are no easy answers with this. People like to pay low electric bills and have the electricity on. They want that to happen. The second that fluctuates, people get a lot more engaged in energy issues. If the president has his way, we’re going to be paying more for electricity in this commonwealth. That’s not just going to affect our households. It is going to affect every facet of our lives. I don’t think that’s something a lot of people in this state want to have happen.

Q: Major U.S. scientific agencies, NASA and the National Oceanic and Atmospheric Administration, agree that climate change is occurring. We’ve heard similar statements from many independent scientific organizations: broad agreement that climate change is happening, and that it is primarily caused by excess greenhouse gases from human activities — chief among them, the burning of fossil fuels such as coal. Does the coal industry acknowledge or dispute this science?

A: I think the question becomes who is going to pick up the check for this issue. If you’re going to try to address a global issue with one country, it’s not going to work. It’s going to fail miserably. And that’s one of the frustrations we have with what the president is suggesting. I think if you distill down the Paris Accord, it’s an agreement to continue talking. There’s not much teeth to it. It has its critics. But we know that India and numerous countries are building coal-fired power plants very quickly. Prime Minister Modi is an ardent environmentalist, but he’s going to electrify India. And he wants Indians to power India. That’s going to require him to use a lot of coal and build a lot of coal-fired power plants. So, to me, technology has got to be a big part of this equation. We need coal as a resource to create electricity. A technological solution to this is going to do much better than just saying, ‘okay, we’re going to move away from this natural resource, keep it in the ground,’ or, ‘we’re going to ship it to other countries where they’re going to use it.’ That doesn’t make any sense to me.

I want Kentuckians to get the benefit of coal and the low cost of electricity, not other economies and other countries. So, to your question, climate change is an issue that a lot of world leaders are concerned about. But when you ask Kentuckians, ‘will you be willing to pay more for electricity to address this global problem,’ I’d say the vast majority would say no. It’s going to affect states differently, you know. Kentucky is going to be hit harder than most. That’s where the disagreement with the president can’t find any common ground. We believe coal should be used in Kentucky because it’s good for Kentucky. Find a solution through technology. You don’t just solve Kentucky’s problems. You solve the world’s problems.

Q: We’ve become more energy efficient as a country. Has that had an impact?

A: Conservation and sustainability efforts are good business practices. I can assure you the people I work for don’t want to use more of a resource than they need to to accomplish what they need to do because that obviously hurts that bottom line. The people I work for tend to live in Kentucky now. That argument that we’re out of state coal barons or something like that is really falling flat now. A lot of the folks that I work for live here in Lexington. We want to leave a good legacy. We want to leave a good footprint. And we want to be judged on what we’re doing today, not some mistake that was made in the 1970s or previously.

Q: Federal data recently compiled by the State Energy and Environment cabinet indicates that the percentage of Eastern Kentucky coal that fires Kentucky power plants has fallen from 32 percent in 1983 to 4 percent in 2015. Yet, Kentucky is burning more coal than it did in 1983 and almost all of it is coming from other states. What’s happening there?

A: Really, in some ways it’s a question for my friends in utilities, but here’s what they’d tell you. They need to use the lowest cost fuel source to create electricity, that way they keep your rates as low as possible, and that’s a good thing. I can tell you among the coal miners I talk to there’s a sense of pride about powering Kentucky and more than 90 percent of our electricity in Kentucky comes from coal. But if the companies have found a market that’s in North Carolina, or South Carolina, or Georgia, or elsewhere that allows that coal miner to remain employed, that mine to still function and create electricity elsewhere — mostly in the southeastern United States is where our coal goes and those are manufacturing states — that’s a good thing. I mean, that keeps our coal industry thriving. So, markets have changed. Sometimes it can be an issue of chemical makeup of the coal, the type of boilers that are used. There’s a specificity to our product; people don’t always realize you can’t just use any type of coal to create steam and generate electricity. It’s a pretty specific process. And that’s one of the things that had benefited Western Kentucky coal: the advent of scrubbers. Again, technology is a solution. You know, we used to not mine much coal in Western Kentucky. With scrubbers being placed on power plants, that market has opened and now it’s actually a competing coalfield to our eastern one.

Q: What is the industry doing for laid off miners whose numbers are growing?

A: It’s been a real challenge as mines have either idled or closed in Eastern Kentucky. Really our best partner with this process has been the HOME Program of the Eastern Kentucky Concentrated Employment Program. It’s been amazingly effective. Manufacturers and even other coal fields are looking for workers who can pass a drug test, who are smart, who work hard and are willing to travel for employment. A lot of our out-of-work coal miners fit that description perfectly. Another thing is working with SOAR to create opportunities in Appalachia. I think we should be doing that whether we’re in good times or bad. SOAR is a way to create the hope, the optimism that Appalachia needs. But we need to realize too that right now the best case scenario for Eastern Kentucky coal is probably maintaining what we have. So, with that in mind, there may have to be a need for relocation, which is very difficult on families. There are 3 and 4 generations. I understand that. But the opportunities unfortunately may lie elsewhere, which is very, very difficult for people.

Q: I’m from Eastern Kentucky. I grew up in Morehead, in the Disciples of Christ Church. We were taught that the earth is God’s creation and to always respect that. I may speak for many like me who struggle to reconcile that teaching with actions such as mountaintop removal and the filling of streams and valleys. How do you work this out in your mind?

A: It’s a great question, Tom. I’m not a member of the Disciples of Christ. I am a Catholic. So, I have a leader of my faith, you know, Pope Francis, who has come out very aggressively on climate change and in some cases, I think environmentalism. It can be troubling if your politics and your faith wind up out of balance. My wife and I talk a lot about this. We’re both Catholic and it can be a challenge. But think about where we’re sitting right now in Lexington at this studio; what was it a hundred years ago? It wasn’t a studio. It was something else then. I think that is the nature of humans that, you know, we’re going to live somewhere.

What kind of world do we want to live in? We want the modern amenities. How do we have them? If we want windmills, we’re gonna have to do a whole bunch of mining to build them. If we want solar panels, you’re going to need a lot of blue gem coal out of Kentucky to build silicon for your solar panels. It’s never easy. And it’s funny. It really goes down to what an engineer told me when I got this job: every form of energy production has some type of environmental and economic cost to it. What cost are we willing to pay? I think of our mutual friend Wendell Berry. He uses a typewriter. He doesn’t use electricity. I don’t think he has air conditioning because he chooses to live that way. I like my laptop. I couldn’t live without it. I probably could live without it, but in my head I can’t. I don’t want to live in that world. But we have to get a black rock out of the ground to create a lot of that, I believe. And if we don’t, we better find another way that’s as reliable or affordable. And I don’t think we have it right now.

Tom Martin’s Q&A appears every two weeks in the Herald-Leader’s Business Monday section. This is an edited version of the interview. To listen to the interview, find the podcast on Kentucky.com. The interview also will air on WEKU-88.9 FM on Mondays at 7:35 a.m. during Morning Edition and at 5:45 p.m. during All Things Considered.

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