6:00: Morning News

Major layoffs: Coal analyst says industry facing toughest time

EAST LYNN, W.Va. — In what may be remembered as Black Friday for coal in West Virginia, the state’s two largest producers told 1,800 employees they would be laid off in 60 days.

Both Alpha Natural Resources and Murray Energy point toward a weak coal market and federal EPA regulations. Murray also took a swipe at President Obama, saying he has been the author of “the ongoing destruction of the United States coal industry.”

Industry analyst Bob Hodge of IHS Coal said EPA guidelines, tightened under the Obama Administration, have hurt the most.

“Even through the cheap natural gas is playing a huge role, I think if you look at the bottom of where things are right now, you’d find the (EPA) regulations are the driving force behind most of it,” Hodge said. “Then the economy and then cheap natural gas.”

The EPA’s Clean Power plan is up for final approval this summer. Critics have said the requirements make it almost impossible to have coal-fired power plants. Hodge said the role of the regulations can’t be overlooked.

“All of those things are related,” he said. “The cheap natural gas wouldn’t be such a problem if the regulations weren’t forcing utilities to close coal-fired plants and build or convert to gas-fired power.”

Alpha plans to idle its Camp Creek underground mine and preparation plant, near East Lynn in Wayne County, resulting in the furloughing of 439 workers. Alpha Chairman and CEO Kevin Crutchfield said there’s a persistent weakness in demand for coal in both the U.S. and overseas markets.

Camp Creek miner Jason Baker said he and fellow workers in Wayne County learned their fates Friday.

“They handed us a packet and they told us that in 60 days we’d be terminated,” he told WSAZ-TV.

“The Lord promised me, he said he would supply my every need. He has all power. I might not have steak, but I’ll have something.” — Jason Baker, among 439 soon-to-be furloughed employees at the Camp Creek mine

Similar messages were delivered by Murray Energy at its Monongalia, Marion, Harrison, Marshall and Ohio county operations. All of the nearly 600 workers at the mine near Morgantown were given notices about possible layoffs while the other mines will continue operating with reduced staffs.

Hodge said this may be the coal industry’s toughest time.

“It’s reached probably the bottom of the trough. I think that’s where you are,” he said. “You’re going to see the cuts. You’re going to see the drop in production. You’re going to see some companies go out of business and see some areas, unfortunately like Central Appalachia, which is going to go way down as far as the number of tons it produces every year.”

Some coal analysts predict the market will reshape itself as companies recalibrate, giving a coal a chance for a comeback.

Coal miners like Baker may not be able to wait it out. He moved to West Virginia after losing a job in Illinois. On Friday, just hours after receiving his layoff notice, Baker choked back tears and spoke of faith pulling him through.

“The Lord promised me, he said he would supply my every need. He has all power. I might not have steak, but I’ll have something.”





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