Coal prospects looking up? Maybe not

Shelby DeMars

The Montana Group

Shelby DeMars

The outlook for Montana’s coal industry may not be as bright as an opinion piece in Wednesday’s Billings Gazette suggests. The article sees losses of thousands of jobs and millions of dollars in tax revenues if Obama administration policies remain in place, but predicts all of that could improve under President Donald Trump.

The author of the piece is Shelby DeMars, who is identified in the article as “the spokeswoman for Count on Coal Montana.” DeMars works with Chuck Denowh for The Montana Group, a consulting firm in Helena. Denowh, former executive director of the Republican Party of Montana, also has been identified as a spokesman for Count on Coal Montana.

DeMars did not respond to a phone call or an email message on Wednesday. Count on Coal Montana does maintain an active Twitter account, but its webpage appears not to have been updated since June 2015. Although it claims to be a grassroots organization, no names of any members or employees appeared to be listed at the Twitter account or on the webpage.

The column makes several thinly sourced claims:

* President Obama’s push to kill coal cost hundreds of Montana coal jobs in 2016. Coal mining jobs nationwide have been declining since the 1980s, but Montana still had 1,330 coal mining jobs in 2015, according to the U.S. Energy Information Administration.

The Associated Press reported in December 2015 that Signal Peak Energy had cut 66 jobs at its Bull Mountain Mine near Roundup. Owners blamed the soft market for coal.

Arch Coal Inc. declared bankruptcy to restructure debt this year, stalling a proposed mine near Ashland. Arch Coal also abandoned the Otter Creek coal mine project. Arch announced that the bankruptcy was not in itself expected to cause layoffs.

Where the figure of hundreds of jobs lost came from, or how exactly Obama is to blame, is unclear, even if one includes the 4,450 jobs that Count on Coal attributes indirectly to coal mining.

* The Obama administration has been used “to implement activist policies of extreme environmental groups.” No groups are specified, but the administration has tightened coal regulations in an effort to reduce carbon emissions that, according to overwhelming scientific and international consensus, are leading to climate change.

* Asian demand for coal is skyrocketing. As U.S. coal production has declined, mining companies have looked to growing foreign markets to sell coal. But that may be changing.

Reuters reported last week that demand for coal is falling in China because of concerns about air pollution. Steps to cut pollution, Reuters reported, “have included closing or curtailing output at coal-fired power stations and hundreds of factories. Authorities even ordered Tianjin port to stop handling coal and iron ore, creating a traffic jam of dozens of dry-bulk ships waiting to unload.”

According to Oil & Gas 360, the IEA reports that global coal demand has stalled and consumption decreased for the first time in 2015.

* The federal coal leasing moratorium will cost Montana thousands of jobs. The moratorium, announced in January, did not affect existing leases, so it’s hard to see how it would cut existing jobs. DeMars may have been referring to potential jobs on land that might be leased if the moratorium did not exist.

But the Department of the Interior estimated at the time the moratorium was put in place that 20 years of recoverable reserves were already under lease on federal land. That, in addition to provisions allowing certain exceptions, should prevent declines in coal production over the expected three-year moratorium, DOI said.

Coal supporters claim the moratorium was part of Obama’s war on coal, but the DOI said an overhaul of federal rules was badly needed. An inspector general’s report “found that over 80 percent of the sales for coal leases in the Powder River Basin received only one bid in the past 20 years. No coal lease has had more than two bidders on a sale.”

One of those testifying at a hearing in Billings on the moratorium was former Montana Department of Revenue Director Dan Bucks, who said miscalculations in coal royalties were costing Montana $30 million over five years.

That may help explain what the PR push is all about. Coal companies donated $1.7 million in soft and outside money to political campaigns in 2000. That figure increased to $9.2 million in 2016. Nearly all of the donations went to Republicans or conservative groups, which may now be returning the favor.

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