Norfolk Southern train seen backing up the Gilbert branch in Wharncliffe, WV to serve the Alpha Natural Resources Premium highwall mine in July 2008. JB Lockard photoBristol, VA-based Alpha Natural Resources [NYSE- ANR] announced on Tuesday that they would be shuttering at least eight mines and laying off approximately 1200 employees- nearly 10% of the company's workforce.
Alpha CEO Kevin Critchfield cited a lack of coal-fired power plants being built in the country and increased regulatory burdens from the EPA on both mining companies and utilities that use coal as contributing to the announced layoffs.
During a 2008 video interview with the San Francisco Chronicle, then-candidate Barack Obama promised to bankrupt anybody who built a coal-fired power plant in the United States. He also promised that energy prices would 'neccesarily skyrocket' under a cap and trade system that he was in favor of.
In June 2009, the Waxman-Markey Cap And Trade act passed the Democrat-controlled House of Representatives, but never made it to the Senate as both the House and Senate focused on getting 0bamacare passed. However, the White House was able to impose a number of restrictions on utilities and coal-fired power plants by way of regulatory fiat through using the Environmental Protection Agency as its enforcement arm.
The impending Alpha closures will affect at least eight mines in three different states- Virginia, Pennsylvania and West Virginia. Work at those facilities will continue until current contracts are fulfilled.
Spokesman Ted Pile says the affected West Virginia operations are the Alloy deep mine near Powellton, the Alloy surface mine near Boomer, the Premium highwall mine near Gilbert and the White Flame Surface Mine near Wharncliffe.With the EPA regulations in place and no new coal-fired power plants being built, many companies have shifted from mining thermal coal typically burned at power plants to produce electricity to metallurgic coal which is in demand for steelmaking overseas.
The Virginia mines are Guest Mountain deep mines No. 8 and No. 9 near Norton, and Twin Star Surface Mine near Hurley.
In Pennsylvania, Alpha will close its Dora deep mine in Jefferson County.
In June of 2011, Alpha had acquired competitor Massey Energy in a deal worth $7.1 billion. Some of the facilities being closed down include former Massey properties.
Alpha isn't the only coal mining company that has been struggling in the current economic and regulatory environment. In July of this year, Patriot Coal had filed for bankruptcy protection thanks in part to a weaker economy, cancelled contracts as well as the same hostile regulatory environment. Out west, environmentalists have rallied and attempted to obstruct coal trains and export terminals from even passing through their cities- even filing nuisance lawsuits against railroads over diesel exhaust and coal dust.