Energy industry stresses importance of coal
State Rep. Pam Snyder responds to testimony at a Public Hearing on Energy on Monday Sept. 16 at the Jefferson Volunteer Fire Company. (Photo by Amanda Steen, Herald-Standard)
Representatives respond to testimony at a Public Hearing on Energy on Monday, Sept. 16 at the Jefferson Volunteer Fire Company. (Photo by Amanda Steen, Herald-Standard)
JEFFERSON — Energy industry officials on Monday told a state House policy committee that coal is vital to the southwestern Pennsylvania economy.
Representatives from coal and natural gas industries, small businesses and utility and mine workers unions testified about the importance of the energy industry in Greene County before the House Democratic Policy Committee at a hearing in the Jefferson Volunteer Fire Co.
The hearing was held near the home of committee member Rep. Pam Snyder, D-Jefferson, who said the hearing was scheduled before FirstEnergy Corp.’s July announcement that it plans to close the Hatfield’s Ferry Power Station in Greene County and the Mitchell Power Station in Washington County by Oct. 9.
State Sen. Timothy Solobay, D-Canonsburg, a member of the Senate Consumer Protection and Professional Licensure Committee, which held a hearing on the plant closings on Friday, took part in the hearing.
George Ellis, president of the Pennsylvania Coal-Alliance, a trade organization representing coal mines and business that support the industry, said Pennsylvania is the fourth leading coal producing state in the country and most of the 68 million tons produced annually comes from 40 underground and 291 surface mines in southwestern Pennsylvania.
Greene County mines produce 35 million tons of coal, or 65 percent of the state’s total production, a year, Ellis said.
The state’s coal industry directly and indirectly employs 41,500 people and has an annual payroll of more than $2.2 billion, Ellis said.
An average coal miner’s salary is $75,000 a year, which is much more than the average private sector salary of $45,000. Wage taxes generate more than $700 million for federal, state and local governments, he said.
Six major mines in the county — Bailey, Enlow Fork, Cumberland, Emerald, 4 West and Blacksville 2 — employ about half of the state’s total mining workforce and have payrolls totaling more than $300 million a year, Ellis said.
The average county miner’s salary is $88,633, which is more than twice the $42,880 average salary for all other occupations in the county, he said, adding that a quarter of all jobs in the county are in the mining industry.
Citing information from the state Department of Environmental Protection, Ellis said power plants reduced sulfur dioxide emissions by 58 percent and nitrogen oxide emissions by 41 percent from 200 to 2010.
He said 42 percent of the power produced in the state is produced by coal burning power plants and there is 27 billion tons, or 300 years worth, of coal left in the state.
Low electricity prices and low natural gas prices are impacting demand for coal and coal burning power plants are facing expensive upgrades to meet federal anti-pollution regulations, Ellis said.
James L. Laurita Jr., president of Mepco LLC, which operates three mines in the county, said his mines are among Hatfield’s coal suppliers. Declines in manufacturing and reduced demand for electricity and government subsidies for building renewable power generation sources are driving prices for coal and gas down while government pollution regulations are pushing costs up, Laurita said.
The existing excess of generation capacity provides no incentive for investing in power plants, he said.
Renewable energy is not “base load” energy, which is available anytime, Laurita said. Energy from renewable sources is only available when there is enough wind to drive turbines and when there is enough sun to create solar energy, he said, adding that only 2 to 4 percent of all power in the country comes from renewable sources.Facilities producing renewable don’t create as many jobs as coal and gas fueled power plants, he said. Unconventional oil and gas development has created 2.1 million jobs in the country and added $1,200 in disposable income to the average household last year, said Andrew Place, EQT Corp’s corporate director of energy and environmental policy.
Industry jobs will grow to nearly 3.9 million and disposable household income will grow to $3,500 by 2025, Place said, citing figures from an industry consulting firm. The industry added $284 billion to gross domestic product last year and that figure will increase to $533 billion in 2025, he said.
Low gas prices will result in a 2.8 percent increase in industrial production by 2015 and a 3.9 percent increase by 2025, Place said. Jason Foster, president of C&J Welding and Construction of Greene County said he started his company, which serves the mining industry, with one pick-up truck and a handful of friends 15 years ago and he now has 130 employees.
“The security of those 130 employees and their families is directly tied to coal and its future,” Foster said.
“The loss of any portion of this industry will have devastating consequences.”
He said fall out of the loss of the coal industry would be comparable to the demise of the domestic steel industry in the 1980s. Greene County Commissioner Blair Zimmerman, a retired coal miner, said 40 percent of the county’s budget comes from taxes paid by coal producers and 4,139 county residents work in the mining, oil or gas industries.
Gas producers have paid $157 million in royalties to mineral rights owners in the county, Zimmerman said. Hatfield paid $500,000 in property taxes and purchased coal from four mines in the county, he said.
“Hatfield has been a savior to Cumberland Mine,” Zimmerman said. Ed Yankovich of the United Mine Workers of America and Robert Whalen and Tom Hall Jr. of the Utility Workers Union of America said the state should revert to regulating the power generation industry.Prior to deregulation in 1998, generation companies were required to maintain their plants and permitted to make a reasonable profit, Whalen said.