On June 20, 2012, the U.S. Senate failed to pass by a vote of 53-46 Sen. James Inhofe’s (R-Okla.) resolution (S.J. Res. 37) to overturn the Environmental Protection Agency’s (EPA) Utility MACT rule, according to the U.S. National Mining Association (NMA). The proposed EPA rules will lead to the closure of a substantial number of coal-based power plants. “Today’s regrettable vote locks in higher electricity rates for consumers and businesses for the foreseeable future,” NMA President and CEO Hal Quinn said in a statement following the vote. “It’s unfortunate that a number of senators from states whose economies rely on affordable, coal-based electricity could not see their way to supporting their communities and the nation’s economic growth at a time when the need is greatest.”
Following the Senate vote, Arch Coal announced plans to idle several operations and reduce production at other mining complexes in Appalachia due to “the unprecedented downturn in demand for coal-based electricity,” reducing its workforce by 750.
Arch’s subsidiaries will close three higher-cost thermal mining complexes and associated preparation plants, temporarily idle Hazard’s Flint Ridge complex and curtail production at other operations in Kentucky, Virginia and West Virginia. The mine locations affected by the announced closings are the East Kentucky, Eastern and Knott County complexes.
“Current market pressures and a challenging regulatory environment have pushed coal consumption in the United States to a 20-year low,” said John W. Eaves, president and CEO, Arch Coal.
CONSOL Energy said it would idle its Fola surface mine and extend summer vacation for some of its longwall miners in West Virginia. To date in 2012, the 318 miners at the Fola complex have produced a little more than 1 million tons of coal. Similarly, the company attributed the actions to a combination of market conditions and increasing pressure from the EPA, which has resulted in both increased costs of surface mining and significant uncertainty for the company’s power generation customers.
“The domestic market for coal remains soft due to weak economic growth,” said Nicholas J. DeIuliis, president, CONSOL Energy. “A warm winter resulted in the growth of our utility customers’ stockpiles and their inability to accept committed coal shipments. Additionally, the escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry.”
The company also announced it will extend the annual miners’ vacation period at its Blacksville No. 2 and Robinson Run longwall mines in Northern West Virginia. The company estimates that this action will result in 300,000 tons of deferred production.
The Blacksville No. 2 mine vacation period will be extended for two weeks. CONSOL Energy will conduct two belt rehabilitation projects during that time. The Robinson Run extension will be one week and during that time the company will be working to maintain the mine in ready state.