COAL REPORT May 6, 2008

Alpha Natural Resources is sweetening the pot for its workers, according to the Coalfield Progress. The company announced that employees will receive company stock, improved insurance, and other benefits that will be the equivalent of a $3 per hour raise. Alpha President Kevin Crutchfield said, “This is a chance for us to express our thanks to the coal miners across the company.” Alpha is looking to keep its qualified workers in an environment where the demand for miners is likely to far exceed the supply. Crutchfield said, “In the ‘80s and ‘90s we basically skipped a generation of miners. A lot of folks left the industry.” The average coal miner today is 50 years old, and as these folks retire the industry will need 50,000 miners nationally over the next decade. Crutchfield said that when Alpha looked at the challenges facing the company, having enough qualified workers was at the top of the list.
During the recent debates over the proposed coal plant at Virginia City, supporters of the plant have often said it is necessary to build the plant in order to keep mining jobs in southwest Virginia. Alpha’s moves to keep its workers happy, and similar stories coming from Massey Energy, seem to indicate that there will be no shortage of mining jobs in the years ahead.

When John McCain came to Inez in April, the United Mine Workers came too. As the Republican Presidential candidate spoke at a town forum, UMW members picketed outside, according to the Big Sandy News. William Chapman, a Martin County miner and UMW field representative, said the UMW supports anybody but McCain for President. “He refused to raise the minimum wage. He’s not for safer coal and he’s with Bush on privatizing Social Security and supporting free trade.” McCain said that this would not be his last visit to Inez. If elected, he said he would return and hold another town meeting.

The Mine Safety and Health Administration has issued final rules on mine seals, reports the Mountain Eagle. The seals, which block off abandoned sections of a deep mine, must be able to withstand a force of 50 pounds per square inch, or psi. Moreover, if the sealed-off area is not monitored for methane gas, the seals must be able to stand 120 psi. The old standard was 20 psi. In both the Sago and Kentucky Darby disasters of 2006, gas explosions blew out seals, leading to widespread calls to require the seals be built stronger. MSHA estimates the new rules will apply to 372 of the nation’s 670 deep mines.

There’s an upside and a downside to everything, it seems. Coal is selling like, well, like hotcakes right now. Central Appalachian coal has gone in two years from $40 a ton to almost $90. With China and India importing coal, with oil sky-high, the demand for coal will likely continue very strong. The downside? Electricity rates are going up along with the price of coal, according to an article in the Coalfield Progress. Coal generates half of America’s electricity. Responding to the high cost of coal, utilities across the nation are raising prices now and planning for even bigger raises in the future. One industry analyst recently predicted that by 2015 electricity rates will be almost 70 percent higher than at present. Some of the factors that boost the price of coal may change soon. Australia and South America will build new shipping facilities so they can get their coal out faster. Other factors are more likely permanent. Coal mine safety is expensive, but required by law. Carbon control is expensive, but likely to be required by law. And some analysts think that, worldwide, there are problems with the supply of coal—as some people think there is in oil. Put it all together and electricity is likely to get, and stay, more expensive.