More unsettling reality from the WSJ
* * *
"The traveler comes to the Appalachians in the lovely season. He sees the hills, the streams, the foliage — but not the poor.”
That passage comes from “The Other America,” Michael
Harrington’s 1962 book that opened the eyes of liberal policy makers to
America’s invisible poverty. The classic work helped provide the intellectual
ammunition for President Lyndon Johnson’s “unconditional war on poverty,”
announced in his State of the Union address two years later.
Fast forward to today. The latest touchstone of liberal
policy, the regulation of greenhouse-gas emissions, is causing economic
destruction and pushing poverty higher in the Appalachians. But those backing
the climate-change agenda are doing their best to keep this reality hidden from
the public.
Since 2012, 27 coal-mining companies with core operations
in Central Appalachia, a region roughly centered in southern West Virginia,
have filed for bankruptcy protection. The list includes a number of large-cap,
publicly traded entities, such as Alpha Natural Resources, James River Coal and
Patriot Coal.
Production of coal in southern West Virginia declined by
45% between the first half of 2011 and the first half of 2015, according to
data from the Energy Information Administration.
Since 2009, 332 coal mines in West Virginia have been
closed, and 9,733 jobs — roughly 35% of the industry’s total employment in the
state — have been lost, figures from the West Virginia Coal Association show. This
has devastated the state’s economy.
* I WOULD SUPPORT A COAL MINERS MARCH ON WASHINGTON.
West Virginia has the highest unemployment rate in the
country, 6.9% as of October, compared with 5% nationwide.
* OH, PLEASE! GIVE ME A BREAK! U6 UNEMPLOYMENT FOR WEST
VIRGINIA IS 12.8%!
The local unemployment rates for counties in the southern
part of the state reach nearly 13%.
* GOD KNOWS WHAT THAT WOULD TRANSLATE TO IN TERMS OF U6 -
PERHAPS 30%?
West Virginia also has the lowest labor-participation
rate in the country.
(*PURSED LIPS*)
Of West Virginians over the age of 16, only 53% have a
job or are looking for work, nine percentage points below the U.S. average.
(*SIGH*)
Some of West Virginia’s economic woes are structural. For
instance, the state’s median age, according to the 2010 census, is 41.3 —the third highest in the country. That said,
there is no denying that the collapse of coal mining has increased hardship and
poverty.
* YA THINK...?!?!
Environmentalists claim that coal is being killed by
market forces, including a slump in global commodity prices and increased
competition from cheap natural gas. Such arguments ignore the historical fact
that spot prices for Henry Hub natural gas have stayed within a range of $2-$4
for the past six years, and that they were even lower in the two decades before
2001. Spot prices for Central Appalachian thermal coal now average $40-$45 a
short ton, compared with an average of $30 between 1984 and 2004. The West
Virginia Coal Association estimates that the state still is sitting on
approximately 51 billion short tons of recoverable coal.
Corporate failures in a cyclical commodity industry are
rarely noteworthy. But things are different this time. Even after rounds of
cost-cutting and consolidation, coal-mining companies — including large and
experienced players — continue to go bankrupt. Some are exiting chapter 11
protection only to return after several months. Others are being liquidated for
the scrap value of their mining equipment.
* IF THAT DOESN'T BRING A TEAR TO YOUR EYE... THEN
PLEASE... SHOT YOURSELF IN THE HEAD.
Buyers who would normally aim to turn around troubled
companies are not stepping in to bid at any price.
(*PURSED LIPS*)
The West Virginia coal industry is no longer dealing with
cyclical pressures or the invisible hand of the market; rather, it is facing an
existential regulatory threat.
In its 2009 “endangerment” finding, the Environmental
Protection Agency ruled that greenhouse gases pose a public-health threat.
Since then the EPA has put limits on carbon-dioxide emissions from new and
existing power plants. Add that to tightened restrictions on mercury and other
air pollutants, plus the coercive Renewable Portfolio Standard mandates at the
state level. The result is that electric utilities have opted to shut down
coal-fired power plants rather than invest the capital needed to upgrade them
and extend their useful life.
The Energy Information Administration projects that over
the next five to seven years roughly a third of America’s coal-fired generation
capacity will be "retired."
Utility companies are not switching to natural gas to
save on fuel; coal is still a cheaper feedstock. But these highly regulated
firms see the regulatory writing on the wall.
(*CLOSING MY EYES*)
Instead of focusing on a hypothetical “social cost of
carbon,” the Obama administration should consider the real economic effect of
its regulation on West Virginia. The rest of the country should speak up...
* THE SHEEPLE? SPEAK UP? SURELY YOU JEST!
The loss of coal-fired generation will destabilize the
power grid and increase the price of electricity.
Oil and gas companies should pay attention, too: For the
fossil-fuel industry, Central Appalachia is the canary in the coal mine.
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