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Coal execs worry over regulations
Massey Energy Chairman and CEO Don Blankenship, left, attends the Huntington Regional Chamber of Commerce's fourth annual Energy & Natural Resource Symposium at the Pullman Plaza Hotel.
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HUNTINGTON -- Less government regulation.
That's what the coal industry will need if it's going to satisfy the United States' appetite for energy, particularly if the country wants to decrease its dependence on foreign energy sources, a group of energy executives and experts said Thursday at the Huntington Regional Chamber of Commerce's 4th Annual Energy and Natural Resource Symposium.
Trouble is, regulations are ever increasing, they said, making it more difficult to produce energy for fellow Americans and more profitable for domestic coal companies to ship coal to growing economies in China and other countries overseas.
"We need to change some government policies instead of trying to remedy the symptoms of those policies," said Don Blankenship, chairman and CEO of Massey Energy, who was the keynote speaker at the event.
"Government is the biggest risk we have to our way of life," he said. "It promotes gambling but makes it increasingly difficult to produce coal."
Blankenship said he had no trouble with responsible environmental regulations, but that environmental groups pushing for more regulation need to remember that their environment involves more than trees and endangered species of bats. Also important to Americans is that they have good homes with electricity, good schools for their children and good jobs, he said. Those aspects of their environment could crumble with the economy, if energy companies don't have the leeway they need to supply energy in a cost-effective way, provide jobs and ultimately contribute to the prosperity of the nation.
Blankenship became chairman and CEO of Massey Coal in 1992, and in 2000, the company became publicly traded as Massey Energy. Today, it is the fourth-largest coal producer in the country with mining complexes in West Virginia, Kentucky and Virginia.
The coal executive said he was born in Stopover, Ky., and raised by his mother at a gasoline station in the 1950s. He showed footage of himself as a boy, when the gas station sign showed the cost of a gallon of gas was 33 cents.
Blankenship went to Marshall, where he performed better in math and business classes than anything else, he said. He started working in the mines in the 1970s. In the 1990s, he became what most people would call rich, he said.
Massey has almost 7,000 employees with an average wage of $40 an hour. But increasingly these days, government is demoralizing businesses and those who run them with its laws, he said.
Today, he said, 96 percent of carbon emissions growth is outside the United States. That's because other countries have fewer regulations and are therefore developing at a rapid pace, while American companies are stopped by red tape.
"Why do we want to drive coal use out of this nation to have someone else take our jobs?" he said. "These things we're doing are causing great damage, and much of it is being done in the name of environmentalism."
Other officials who spoke at the event agreed.
William Kovacs, vice president for the Environment, Technology and Regulatory Affairs Division of the U.S. Chamber of Commerce, said that governmental business regulations number 102,000 and are increasing by 4,000 a year. With the election coming up, it's a transitional period, and it will be interesting to see what happens in Congress and the White House, and how that will affect businesses and their ability to build new energy facilities in the country, he said.
Some challenges already faced by American coal companies include meeting demand while there's a lack of skilled laborers and a squeeze on capital, said Todd Adkins, portfolio manager at American Electric Power.
Meanwhile, energy companies have lost some big lawsuits of late, said Richard Bolen, a partner with Huddleston Bolen LLP. Presidential candidates have talked about a need for the redistribution of wealth in this country, but Bolen says it's already begun. Massey, for example, paid a total of $250 million after two recent lawsuits, he said.
"We are seeing an alarming degree in the transfer of wealth from the energy industry to plaintiffs around the country," Bolen said. In West Virginia especially, energy businesses are targeted because that's where the money is, he said.
Nick Carter, president and chief operating officer of Natural Resource Partners, based in Huntington, joked that he's holding out for another presidential candidate to show up who reflects his hopes for coal. Both current candidates talk about clean coal initiatives, but Carter doesn't want to see changes implemented before coal sequestration technology is ready, which would give environmental groups a chance to jump in and ban permits for coal companies. And he pointed out that while wind technology is the fastest growing sector of energy production, it's still less than 1 percent of the grid.
At speaking engagements, he said he's been asked what his biggest concerns are for the coal industry. He replies that he doesn't know how the United States will produce all the coal needed to supply the grid, as well as meeting other demands such as coal gasification and liquefaction. Demand is so high now that it takes months for orders of coal production equipment to come in, he said. His other big concern, he said, is that Congress does something to address global warming that is "so disastrous it ruins the economy, and everything else goes down with it."
The conference had record-breaking attendance, with almost 200 people, said Mark Bugher, president of the Huntington Chamber. He thinks Blankenship's visit probably had something to do with that, not to mention there are many businesses in the region that support the coal industry.
"It's a rare opportunity for the Huntington business community to hear from a nationally known businessman," Bugher said. "He's known for his straight-forward talk."
Whether you agree with him or not, you know where he's coming from, said Marshall University President Stephen Kopp, who introduced Blankenship at Thursday's event. "I find that very refreshing," Kopp said.
The event was sponsored by Natural Resource Partners, Engines Inc., Community Trust Bank, Guyan International, Marshall University and West Virginia American Water.
