Re: Testimony of Chris R. Hamilton, SVP, West Virginia Coal Association and Chairman, West Virginia Business & Industry Council as Presented to the Subcommittee on Energy and Mineral Resources of the Congressional Natural Resources Committee Oversight Hearing on October 10, 2013.
Good afternoon! I’m Chris Hamilton, Senior Vice-President of the West Virginia Coal Association and Chairman of the West Virginia Business & Industry Council. I appreciate the opportunity to participate in your meeting and discuss the actions or inactions of this Administration on West Virginia’s economy.
West Virginia just celebrated its 150th birthday and we've been mining for all of those 150 years. We are without question one of the state's leading industries, if not the leading industry. We have always provided good paying jobs, infused millions of dollars into local and state wide economies and have provided the region, state, country and world with low-cost, reliable power on a 24/7 basis. That's what we do.
As a state, we manufacture and export energy and power throughout the eastern part of our country and throughout the world. It enables millions of Americans to enjoy the freedom and the world’s greatest quality of life.
West Virginia is the second leading coal producing state, the country’s leading underground coal producing state and the US leader in coal exports, accounting for 50% of the US total. We have consistently averaged between 150 – 160 million tons of annual coal production over the past several decades – until this Administration took office.
We ship coal to practically every state east of the Mississippi river and some 38-39 foreign destinations.
Coal mining is a $30 billion industry in West Virginia with coal and electric utilities accounting for over 60% of all business taxes. Over the years, we've enjoyed a great workforce, great access and coal quality, close proximity to ports, and generally, a good infrastructure. We have the best miners and coal quality found anywhere in the world.
Our industry was rolling along just fine, expertly navigating the typical cyclic nature of our business with economic fluctuations and mild weather patterns affecting demand and market conditions. In January 2009, all that changed when we began to experience an all-out assault on our industry from the Obama Administration and our federal government.
Literally, the day after President Obama took office, mining companies in West Virginia began to receive objection letter after objection letter from the U.S. Environmental Protection Agency, raising objections to new permits and even already-active operations that were previously approved and cleared by EPA, the US Army Corps of Engineers and WV Department of Environmental Protection.
Then came the Administration’s Council on Environmental Quality and its multi-agency mine permit review process known as the “enhanced coordinated permit review process” and the imposition of new permit demands. This effectively slowing the mine permit process to a crawl, which soon afterward became known as the Administration’s “permitorium”-- the highjacking of state primacy of water quality standards.
The Administration’s “War on Coal” has been waged with a barrage of ill-conceived administrative actions, litigation and regulatory actions such as EPA’s Spruce mine retroactive veto, the Office of Surface Mining and Reclamation’s totally unnecessary efforts to rewrite of the stream buffer zone rule, the Mine Safety and Health Administration’s ill-conceived and scientifically baseless regulatory changes and EPA’s regulatory “train wreck.” The “War on Coal” is not rhetoric. It is real, and it is killing us.
Today, 57 months into the Obama Administration, the war on coal has taken its toll and things are very bleak. Currently, West Virginia has 101 fewer mines operating today than this time in 2008 – that means approximately one-third of our coal mines operating in 2008 are now closed. All mining operations are impacted, and every mine has been slowed or has cut back.
In West Virginia alone, there are over 3,500 miners laid off or furloughed and another 12,000-15,000 mining-dependent jobs have been lost. Across the Appalachian region, the damage is even worse, with approximately 10,000 direct mining jobs lost and another 40,000 indirect jobs lost. At an average salary of$75,000 per person, the net effect is the removal of $719 million from West Virginia’s economy and a $2.05 billion loss from our region. These are real dollars that have been lost, impacting every family and business in our area.
The hardship on individuals and West Virginia families is hard to imagine from Capitol Hill. High stress, not being able to make ends meet, basic life needs not being met -- these are all too commonplace now, leaving a large number of West Virginians without hope and vulnerable to the perils of today as hopes of gainful employment vanish and the possibility of life without a paycheck and health care benefits preconditions all else. As mining jobs have been stripped away, we have seen a significant rise in drug and alcohol abuse, theft and other forms of crime and social decay.
Small communities throughout our state have been threatened as county and municipal budgets and resulting government services dwindle.
Since 2008, West Virginia has lost 25% of production as coal prices and productivity continues to fall. West Virginia has lost millions of dollars in severance tax collections which funds education, county budgets and important programs for seniors and the less fortunate.
To make matters worse nearly 300 coal-fired power units nationwide have closed or will be retired this year. Other plants have switched to natural gas. A total of eighteen (18) coal-fired units in West Virginia have announced their plans to close.
It is estimated that each unit accounts for approximately 100 full-time positions, thus the total number of jobs impacted in West Virginia by these closures is approximately 1,800 additional jobs.
By utilizing every resource available to him, every federal agency, President Obama has done everything in his power to obstruct West Virginia coal production and prevent our industry from maintaining its viability in domestic and world markets. To date, all the negative administrative and policy acts have underscored his to kill coal mining in a “death by 1000 cuts”. The President’s plan on climate change, evidenced most recently by EPA’s New Source Performance Standards is a knock-out punch for our industry. Without question, the president is picking winners and losers in energy production, and he wants coal to lose. What he fails to realize, however, is if coal loses, America loses. No other single energy source can replace coal and the energy security it provides to the United States, not to mention the critical role it plays in our steel industry.
Our only savior at the moment appears to be the export market. As domestic usage continues to trend downward, international demand grows exponentially. With West Virginia currently accounting for a large share of US exports, we stand to gain and become a world marketer of coal.
Fortunately for us, world coal usage is on the rise as developing countries expand their economies and infrastructure. Exports have doubled over the past five (5) years and coal is quickly becoming the world's fuel of choice for power generation. In fact, coal is scheduled to surpass oil over the next two to three years.
Other nations see coal the way America used to view this resource, as an abundant, low-cost and reliable fuel. America became a manufacturing superpower thanks to coal, and it can’t be a coincidence that our global domination waned when we stopped fostering coal industry development.
Although the current export market appears strong today, predictions of our continued presence and strength vary. As with domestic energy, we face strong competition for seaborne coal from foreign producers who do not have the same level of protections for the environment or for human rights.
Actions of this president have even placed global opportunities at risk by calling on the World Bank and international financial institutions to stop funding the construction of coal-fired power plants. In addition, the construction of new port facilities which could handle greater coal volumes are endangered by the EPA.
In closing, I simply observe that the president speaks a lot about economic justice and hope and promise. I would ask the President, where is the justice for West Virginia and Appalachia? Where is the hope and justice for our coal mining families?
There are few other career options available for many of our miners, and by his actions, this president is effectively condemning them to lives of poverty and despair. Again, I ask where is the justice? Why are our families less important to you than others? Why don’t we matter to you, Mr. President? Please, let us work and power America.
The West Virginia Coal Association is a trade association based in Chareston, West Virginia. It represents approximately 98 percent of the state’s coal production. Founded in 1914, the West Virginia Coal Association is the largest state coal association in the nation.
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