The “War on Coal” – Myth of Cowardly Leaders

Robert Murray is a cowardly leader.  As CEO of Ohio-based Murray Energy, he laid off 150 workers last week following the presidential election, claiming the layoffs were the result of President Obama’s “War on Coal.”

This war on coal is a complete myth, the perpetuation of which disserves us all.

No doubt, coal mining underpins myriad local economies in coal country.   Shame on politicians and leaders in these regions for not seeing, and responding appropriately to, the looming paradigm shift away from coal.  They buried their collective heads in the sand and allowed their local economies to remain completely dependent upon coal instead of diversifying and posturing their cities and towns for success in the coming post-coal era.

Yes, Americans want cleaner air and less pollution.  Despite improved technology, coal extraction and energy recovery still impart relatively high negative impact on our environment.  The environmental regulation of the coal mining and coal-fired power generation industries have been in place for a long time—well before President Obama took office in January 2009.  In fact, the Obama administration actively delayed implementation of many Bush-era coal-related regulations in order to minimize their economic impact during the recession.

Despite the "conventional wisdom," more people are employed in the coal industry in 2012 than in 2007, before President Obama took office.  In May 2007, the coal industry employed about 78,000 Americans.  While the industry shed several thousand jobs during the worst part of the recession, by October, the coal industry had recovered and then some, employing about 80,000 Americans.

Competition from natural gas is the single biggest reason the coal industry faces declining prospects in coming years.  It’s pure economics.  Generating electric power using natural gas is significantly less expensive than generating electric power using coal.  The cost comparison between coal and natural gas takes into account the cost of extraction, treatment, transportation, handling, core and ancillary power generation operations, plant construction, maintenance of infrastructure, storage, remediation, regulation, and residual waste disposition.  As power companies recapitalize old coal-fired power plants that have reached the end of their service lives, they are overwhelmingly opting to build new natural gas fired power plants.  This trend will continue and is not readily reversible.  As new natural gas generation plants continue to replace old coal-fired plants, domestic demand for steam coal is going to continue to decline.  

Coal fueled the Industrial Revolution.  America was built on coal.  Coal is still very important today.  But, make no mistake, the need for coal is waning.  This is progress, the natural arc of technology and history.  Corporate and political leaders who don’t have the vision and ability to look beyond coal, to lead us into the future that is surely coming our way, are failing us in a big way.  We need to fire them.  We need bold visionary leaders who will embrace and capitalize on change, not leaders like Robert Murray who either pretend change isn’t happening or make excuses for their failure to adapt.