Bloomberg News

Romney Mining for Votes in Coal Country

October 24, 2012

Cliff Forrest, founder and president of Rosebud Mining Co., says his coal-producing peers “lambasted” him in 2008 for voting for Barack Obama.

Initially attracted to Obama’s intelligence and pledge to work across the aisle, Forrest has returned to the fold among his coal-mining brethren. The 56-year-old has donated thousands of dollars to Republicans, including presidential nominee Mitt Romney.

Forrest has also handed out 2,500 “Stop the War on Coal, Fire Obama” yard signs to anyone who came to his Kittanning, Pennsylvania, office and asked for one.

“It will be a battle for survival” if Obama wins re- election, said Forrest, who started Rosebud in 1979. Now maps showing his mines in Pennsylvania and Ohio fill a wall in his office near the Allegheny River about 40 miles (64 kilometers) northeast of Pittsburgh.

Forrest and other coal executives have stepped up their political activism and donations to Romney and the Republicans because of what they consider overly restrictive clean air and water and greenhouse-gas regulations imposed by the Obama administration.

“We could be generating and expanding and creating a lot of jobs,” Forrest said. Some analysts and power industry executives see cheap natural gas, not regulation, as coal’s main threat.

‘War’ Signs

Anxiety about coal’s future is evident in eastern Ohio in places like St. Clairsville, before the hills of Appalachia give way to the flat, Midwestern farmland to the west.

“War on coal” signs dot neighborhood yards, and political ads debating who is a bigger supporter of the industry are heard frequently on AM radio stations.

Obama did better in the five largest coal-producing counties in Ohio than Republican Senator John McCain in the 2008 contest, though not by much: 65,908 votes to 65,499.

The president should have a “tougher time in Ohio coal country in 2012 because the industry has spent a lot of time and money promoting a ‘War on Coal,’” said David Cohen, a political science professor at the University of Akron, in an e- mail. “It plays into the narrative that the president believes in big government.”

Coal Jobs

The number of coal jobs in the U.S. is half of what it was 30 years ago. Some of those that remain, however, are clustered in rural enclaves in Ohio, Pennsylvania and Virginia that both candidates see as key to winning the White House, a fact that has made coal a prominent issue in this election.

While coal country has shrunk over the decades, in a “razor-thin” election, the coal vote could be one factor that helps determine the outcome in states like Ohio, Cohen said.

Neither Romney nor Obama seems willing to concede the coal vote, waging a battle on the ground and in the airwaves over who would be a better friend to the workers in the industry.

“I’m going to make sure we can continue to burn clean coal,” the former Massachusetts governor said in the first debate.

“Coal jobs are up. Coal production is up,” Obama told Romney in the second debate.

U.S. coal-mining employment increased to 86,200 workers in 2011 from about 81,200 workers in 2008. Employment has since declined to about 82,200 workers, according to government statistics. Production, which rose in 2010 and 2011, hasn’t reached the levels before the economic crisis that reduced demand for electricity. Producing natural gas from hydraulic fracturing created 150,000 direct jobs in 2010, Chevron Corp. (CVX:US) said in a report this year.

Political Donations

Carol Raulston, a spokeswoman for the National Mining Association in Washington, said the “full weight” of air and water regulations is just starting to be felt.

Coal executives and miners have contributed a record $10.3 million to mostly Republican candidates so far, according to the Center for Responsive Politics in Washington, which tracks campaign spending. In 2008, the industry, through its workers and executives, contributed about $3.5 million, according to the center.

Much of the rise in political spending is driven by big- dollar contributions to so-called super PACs supporting Romney’s candidacy. For example, Joseph Craft III, president and chief executive officer of Alliance Resource Partners LP (ARLP:US), a Tulsa, Oklahoma-based coal producer, has contributed at least $4.35 million to political action committees.

Fracking Growth

Underlying the political debate is unease within the coal industry that it is losing its place as the mainstay in electric power generation to natural gas. Hydraulic fracturing, or fracking, has driven down prices for natural gas to its lowest level in 10 years.

Low natural gas prices have had a greater impact on coal use than regulation, William Spence, chief executive officer of Allentown, Pennsylvania-based PPL Corp. (PPL:US), told reporters on Oct. 19.

In 2008, about 48 percent of the U.S. electricity came from coal. In August, that total had slipped to 38 percent, according to the Energy Information Administration. Exports have compensated for some of the loss. The EIA reported yesterday that sales to overseas markets this year are expected to exceed the record set in 1981.

The rise in natural gas production from shale rock formations could also blunt the impact of the “war on coal,” because the production is coming in some of the same areas in Ohio and Pennsylvania where coal is declining.

Economic Upswing

“The economy is on the upswing because of natural gas drilling,” said Jennifer Woollard, executive director of the St. Clairsville’s Chamber of Commerce in the heart of Ohio’s coal country.

Even so, the regulations on the coal industry are a “big topic of discussion,” she said. She said her brother works in the industry.

In St. Clairsville, barber Kent Jenewein, 45, said he was voting against Obama in part because of his policies on coal.

“Without coal, there will be nothing here,” he said. Jenewein said his cousin was recently laid off from a coal mine.

Down the street at Anthony’s Gold & Diamonds jewelry store, Libby Zambito, 69, said she’s sticking with Obama.

“I think he’s jumped in and tried to help people,” she said.

The administration’s environmental policies have already cost Obama some support among his former allies. After backing Obama in 2008, the United Mine Workers of America union based in Triangle, Virginia, declined to endorse any candidate for president this year.

Power Companies

Utility workers are also uneasy about some of the regulations, Jim Hunter, utility department director for the International Brotherhood of Electrical Workers, said in an interview. About 80 percent of Ohio’s electric power comes from coal and each plant employs about 10 times as many workers as a gas generator of similar size, Hunter said.

So far, announced retirements of coal plants haven’t led to big layoffs, and union members aren’t necessarily blaming Obama for plants being taken out of service. Hunter also said some of the regulations are required by the Clean Air Act, which has had bipartisan support.

“In many cases, our folks understand that these plants were going to close eventually,” Hunter said in an interview. Hunter said he doubted that union members would base their vote on the environmental regulations the administration has proposed.

Mercury, Toxics

Among the regulations critics point to is one that forces power plants to limit mercury and air toxic emissions. While the administration was under a court order to act, the coal industry says the regulations are stricter than public-health concerns warrant.

The Environmental Protection Agency has also proposed carbon dioxide curbs for new power plants that the industry says coal-fired generators can’t comply with using technologies available today.

Coal is a major contributor of carbon-dioxide emissions, thought by most scientists to be a leading cause of global climate change, and of sulfur dioxide and nitrogen oxides, which cause smog and acid rain and can lead to health problems.

Mercury meanwhile can lead to developmental problems in children.

U.S. utilities plan to retire about 27 gigawatts of coal power from this year through 2016, or about 8.5 percent of the total capacity, according to the Energy Information Administration, which tracks and analyzes energy data.

Cheap Gas

It listed modest demand growth, cheap natural gas costs, the advancing age of the coal plants and environmental regulations as reasons for the decline.

Ryan Williams, a spokesman for the Romney campaign, said regulations issued by the Obama administration are stifling the coal industry.

Clark Stevens, a White House spokesman, said the administration has made “historic investments in clean coal technologies.”

“The president has made clear that coal has an important role to play in our energy economy today and it will in the future,” Stevens said in an e-mail.

Six years ago, before gas prices dropped, Forrest of Rosebud Mining said he planned to expand in eastern Ohio, where his company now employs about 150 workers.

While natural gas prices delayed those plans, he said environmental regulations will stall growth indefinitely.

“What the war on coal is, is a war on the future of coal,” Forrest said.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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