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Lawmakers worry about air regulations cutting coal mining jobs

| Friday, June 6, 2014, 9:56 p.m.
Jasmine Goldband | Tribune-Review
Walter Baranowski, 27, of Follansbee, W. Va. bolts the ceiling as part of his training on a piece of equipment at Consol Energy Inc. Bailey Mine Complex in Greene County Friday, June 6, 2014.

Chuck Shaynak worries about the effect new federal air regulations could have on the coal mines in which he's worked for 35 years, though his concerns are a little different from those voiced by lawmakers.

As state legislators and industry leaders pledged to fight proposed rules they argue will put some mines and coal-fired power plants out of business, Shaynak was thinking of the young miners he oversees at Consol Energy Inc.

“It's a personal position for them to think about their families and worry about jobs. And that's a distraction for them, which can be a dangerous thing down here,” Shaynak, a senior vice president for Pennsylvania coal operations at Consol, said on Friday as he helped lead lawmakers on a tour of the company's Bailey mine complex beneath Greene and Washington counties.

“We're well-positioned. But there's still a lot of concern down here, and we're trying to communicate to them our position,” he said.

The Environmental Protection Agency this week announced its first proposed limits on carbon emissions from existing power plants, which the agency predicts will cut coal production by 18 percent. State lawmakers such as Rep. Pam Snyder, D-Waynesburg, worry what will happen in a state where coal supports 63,000 jobs.

“If those mines were to close tomorrow, it would take Greene County to its knees,” she said.

Despite dire predictions for the coal industry, Consol officials say they won't soon cut back at the complex, where the Cecil-based company opened the BMX extension this year and spent $2 billion on improving operations over the past decade.

“I believe these longwalls will be the last operating in the United States. They will outlive us all,” said Jimmy Brock, chief operating officer of Consol's coal division.

Consol improved the mine complex, opened the extension and made its transportation and distribution systems more efficient in anticipation of tougher regulations and a tighter market, said Tommy Johnson, vice president for external relations. The company last year sold several mines and is putting the majority of its capital budget toward growing its natural gas production while maintaining the mines.

Analysts and investors are bullish on the company. Consol's stock closed Friday at $47.45, near its 52-week high, and up 7.4 percent since the EPA announced the proposed emissions rules Monday. Goldman Sachs upgraded its outlook for the company, citing cash flow from coal and the focus on gas exploration. Analyst Sterne Agee said Consol was well-placed to handle the regulations.

“The company didn't sit and wait. It was very proactive,” said state Rep. Ted Harhai, D-Monessen. “I think back 10 years ago, the difference with the improvements here is astronomical. And they're striking a good business balance.”

The improvements include a new facility for loading coal onto rail cars at the complex, which is served by two lines. When some mines said cold weather hurt their ability to move out coal during the cold winter, Consol had record-high production during the first quarter, the company said.

Consol's goal is to supply the most critical power plants — those that are not expected to close under the pressure of tougher air rules — while looking at international markets such as China for export from its Baltimore terminal. The company sends steam coal from Bailey and metallurgical coal from Bailey and a Virginia mine to 19 countries, said spokesman Brian Aiello.

Consol is convinced it will have customers for its coal, even if the market shrinks under EPA rules.

Whatever the EPA ends up imposing won't be decided for several years. But lawmakers said they are organizing opposition.

Sen. Gene Yaw, R-Williamsport, said the Environmental Resources and Energy Committee he chairs will hold a hearing June 27 to discuss economic impacts of the federal proposal. He likened the foundation of electrical generation to a three-legged stool, supported by coal, gas, and “everything else.”

“If you take one away or cut it, everyone will be impacted. It won't be stable. And that's what people are concerned about,” he said.

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