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Elliott Negin Headshot

Coal Baron Digs a Deeper Hole

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Robert E. "Bob" Murray, the pugnacious owner of Ohio-based coal giant Murray Energy Corp., keeps his lawyers busy. Besides appealing safety fines, over the past few years his company has sued two news organizations -- the Charleston Gazette and Huffington Post -- for defamation and the Labor Department's Mine Safety and Health Administration for levying "unfounded and baseless violation citations."

More recently, the company turned it up a notch, announcing it will sic its lawyers on the Environmental Protection Agency. Why? The company -- the largest producer of underground coal in the country -- alleges that the agency has illegally ignored the impact of Clean Air Act enforcement on jobs in the coal industry.

"Over the past five years, EPA has waged what can fairly be described as a war on coal, repeatedly and consistently encouraging sources to switch from coal to other fuels, to shut down coal-fired sources, and to avoid constructing new coal-fired sources, all through EPA's administration and enforcement of the Clean Air Act," the company's law firm, Squire Sanders, stated in a January 21 "notice of intent" letter, which plaintiffs are required to file in advance of suing a federal agency. "You have a nondiscretionary duty under [Clean Air Act section 321 (a)] to continuously evaluate the employment effects of these actions but have failed to do so."

Murray has been lambasting the Obama administration for years on this point. His most recent tirade came at a state-sponsored West Virginia energy conference in Charleston on December 17. The Charleston Gazette videotaped it.

"There is no question that the United States coal industry is being destroyed by the actions of President Barack H. Obama and his radical followers and his supporters," he told the crowd. Murray did acknowledge that coal's decline is at least partly due to cheap natural gas, but he insisted that the president is making good on a campaign promise to crush the industry, putting miners out of work and depriving Americans of low-cost electricity.

"Mr. Obama's actions [are] a human issue to me...," he continued. "I know the names of those Americans whose jobs and family livelihoods are being destroyed as he appeases his radical environmentalist, unionist, liberal elitist, Hollywood character, and other constituencies that got him elected."

Coal's War on Us

Rhetoric aside, does Murray Energy have a legitimate beef with the EPA?

The short answer is no.

"The threatened lawsuit lacks any merit because the Clean Air Act here does not give private parties the right to challenge health safeguards after the fact or compel the sought-after action by the EPA," explained John Walke, a senior attorney at the Natural Resources Defense Council who has worked on air pollution issues for more than 20 years. "The law never has been read to support the strained interpretation underlying Murray Energy's fanciful letter. Any court should dismiss this type of lawsuit quickly."

Not only does the Murray Energy suit rest on shaky legal ground, the company's underlying complaint -- that the EPA is the root cause of the coal industry's woes -- also is weak. Yes, tighter pollution standards will impose additional costs on the industry, but its biggest problems are low natural gas prices -- which Murray concedes -- anemic demand, and the rising cost of mining.

What about Murray's complaint about "destroyed" jobs? In fact, employment in the coal industry nationwide has held fairly steady over the last several years, according to Labor Department data. In 2012, it employed 137,650 people. That's a 4 percent drop from 2011, when it was at its highest point since 1996, but still more than in the previous five years.

I also take issue with Murray's characterization of coal-fired electricity as "low-cost." When you consider its hidden costs, which don't show up in monthly electric bills, it doesn't come cheap. A 2011 Harvard Medical School study in the Annals of the New York Academy of Sciences, for example, calculated coal's "life cycle" cost in the United States -- including its impact on miners, public health, the environment and the climate -- at $175 billion to $523 billion a year, with a best estimate of $345 billion annually.

Indeed, coal-fired power plants pose a double-barreled threat: They're the biggest source of U.S. carbon emissions -- accounting for roughly 33 percent -- and the biggest industrial source of "traditional" toxic pollutants, including mercury, sulfur dioxide and nitrogen oxide. Both heat-trapping carbon gases and toxic emissions -- either indirectly or directly -- have been linked to a whole host of diseases, as well as premature death. The American Lung Association estimates that particulate pollution from coal plants alone kills some 13,000 Americans a year.

No doubt, it will take money to clean up traditional air pollutants from coal and other sources. A 2011 EPA study calculated that the public and private sector cost to comply with the 1990 Clean Air Act amendment requirements would be about $65 billion annually by 2020. But the economic value of compliance -- healthier citizens, a cleaner environment, and a stronger economy -- will be worth nearly $2 trillion in the year 2020, the study found, vastly exceeding the regulation's price tag.

Doubling Down on Coal

Besides public health and the environment, let's not forget the threat coal poses to miners. The good news is mining fatalities and injuries across the industry have dropped significantly over the last few decades. The bad news is it's still a dirty, dangerous job.

The main health and safety dangers, according to the Mine Safety and Health Administration (MSHA), include mercury, noise, radon, and coal and rock dust, which cause black lung. According to a 2012 investigation by the Center for Public Integrity and NPR, fatalities and injuries may be down, but the incidence of black lung has soared during the last decade, especially in central Appalachia, after years of decline. Why? Weak regulations enable mining companies to cheat on their reporting, and MSHA's lax enforcement lets them get away with it.

Then there are the safety violations that MSHA does enforce.

During his mid-December speech, Murray assured the crowd that his company emphasizes fire protection and emergency preparedness at its operations, and the health and safety of his miners "is foremost." Perhaps, but from 2000 through 2009, MSHA cited Murray Energy for more than 7,700 "significant" violations and slapped the company with $18 million in fines. The biggest fine -- at $1.8 million, the largest mining fine in U.S. history at the time -- stemmed from an August 2007 mine collapse in Utah that killed six miners and three rescue workers. Only three other mine operators -- Massey Energy, Consol Energy and Peabody Energy -- were assessed more in fines than Murray Energy over that decade.

Given the accidents, disease and premature deaths, is coal mining worth it? Not according to a 2009 Appalachian coal mining study in the journal Public Health Reports. It found that while mining generated about $8 billion for Appalachia's economy between 1979 and 2005, the estimated cost of shortened life spans associated with coal operations in the region ranged from $18 billion to $84 billion. Its conclusion: "The human cost of the Appalachian coal mining economy outweighs its economic benefits."

In any case, the economic benefits of coal mining, at least in Appalachia, are fading. Production in the region, as Murray lamented in his December 17 speech, has declined dramatically in recent years. That's due to a number of reasons besides competition from cheap natural gas, including shrinking reserves -- which make coal more difficult and expensive to mine -- and the fact that utilities also are switching to renewable, carbon-free energy sources, such as wind and solar, which have become more cost-competitive. Coal generated nearly 50 percent of U.S. electricity in 2006; in 2012, its share was down to 37 percent.

Seeing the writing on the wall, in early December Consol Energy unloaded five large underground mines in northern West Virginia for $3.5 billion to focus on increasing its natural gas production, which it hopes to boost 30 percent by 2015. The mines, which amounted to about half of Consol's annual coal production, were among the company's most expensive to operate.

The buyer? Bob Murray. That's why he was a featured speaker at the West Virginia governor's energy summit in mid-December. With that purchase, Murray Energy more than doubled its workforce to 7,100 at underground mines in five states.

Smart move? I can't help but think of that old saying by the late, great American humorist Will Rogers: "When you find yourself in a hole, stop digging."

Elliott Negin is the director of news and commentary at the Union of Concerned Scientists.