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West Virginia and the future of coal

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Brooks McCabe Brooks McCabe
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Brooks McCabe is managing member and broker of West Virginia Commercial LLC. He has been involved in commercial and investment real estate for more than 30 years, and he also is general partner of McCabe Land Co. LP. He has served in the West Virginia Senate since 1998, and is a special project consultant to The State Journal.

Everyone is worried about the future of coal in West Virginia and wondering if coal’s prime time is a thing of the past. The future is hard to predict, but one thing is certain: Coal will continue to play a significant role in the energy economy for many years to come, albeit, a different role than in the past. How it plays out in West Virginia is dependent upon how the industry — and we as a state — adjust to the changing times.

Most people forget President Richard Nixon wanted the United States to be energy independent by 1980 and coal was a big part of that equation. President Jimmy Carter declared “the moral equivalent of war” on the energy crisis and called for more use of coal. Now we have a turn of events and the war is with coal.

Except for a half-dozen coal states, both Republicans and Democrats are calling for major changes in our country’s energy policies. How quickly times change. Going from the savior to the devil has been hard for the coal industry to internalize. Environmental concerns have become front and center. The price of natural gas has provided a cost-effective alternative. Coal has become a bad word and many believe it should be avoided at all costs. The externalities associated with coal are beginning to catch up with the industry. To some, the future looks bleak.

We tend to forget the dire circumstances confronting coal in the early 1920s when coal faced what many believed was its sure demise. The over-capacity created by the buildup for World War I, the electrification of the nation with the corresponding move away from coal as a residential heating source, the technological advancements of the diesel engines replacing coal fired boilers in locomotives and naval vessels — plus the added strain of deteriorating labor relations — all seemed like a perfect storm and brought coal to its knees. The Great Depression was expected to be the death blow, but somehow coal survived.

In this time of adversity, it might prove to be the defining time for the coal industry to remake itself. For West Virginia, this is an opportunity to step forward and demonstrate leadership in a multifaceted energy economy and to not be afraid, but to be proactive. A case in point is the National Energy Technology Laboratory (NETL) in Morgantown — only one of 17 U.S. Department of Energy Laboratories doing fossil energy research.

West Virginia needs to up the ante and develop programs of such a stature that can compete with Penn State and MIT. West Virginia University, West Virginia High Tech Consortium Foundation, the Charleston Regional Technology Park and MATRIC all have much to bring to the table. To create a nationally recognized research effort in fossil energy requires funding and there currently is none. Severance taxes are a logical source of funding, but that would require industry support.

The coal industry needs to become more proactive in adjusting to a new world view that clearly understands global energy policies must move toward renewables and fuels with smaller carbon footprints. Although the use of coal is expanding internationally and will continue for some time, the outlook for domestic-based coal companies is more problematic. This is especially so in West Virginia where thermal coal will continue to be depressed and most projected growth will be in the met coal markets. That being said, the industry must find sustainable markets for using coal.

Forty percent of the nation’s electricity still comes from coal. The polar vortex of this past winter clearly showed the weaknesses of relying on natural gas and renewables in times of challenging climatic conditions. It also showed the danger signals ahead when a too-aggressive shutdown of older power plants is forced upon the utilities by federal regulators. The energy grid is much more fragile than the public and federal regulators may assume. Coal can provide the bridge to a cleaner environment, but realistic time frames must be addressed.

Researchers at MIT’s Energy Initiative believe clean coal technologies need continual development to create a more robust electricity generating system. The coal industry needs to embrace this need for research and help find ways where they can participate in the cost of such research. The federal government needs to realize the current energy plan is creating severe hardship on those families and communities in the coalfields. It should be part of the national energy plan to help affected families and communities adjust to the new world view being thrust upon them. They are suffering through no fault of their own. The coal communities fueled the nation in time of war, were a mainstay in the policy initiatives of Presidents Nixon and Carter, and now after doing what they have been asked do for generations, should not be forgotten. The economy does not turn on a dime, and neither should energy policy.

Coal has a place at the table and will for decades to come. It needs to have several parallel paths of action. Making the Environmental Protection Agency’s regulations more reasonable should be only one focus. Finding new avenues for cleaner coal is another. Finding new uses for coal is yet another. Research and technology will help smooth the path going forward. The state needs to be at the table in more ways than as a cheerleader and litigator. It must assume real responsibility in finding ways to put West Virginia on the map as a research powerhouse. This needs to include both WVU and Marshall University as well as the technology parks and research corporations residing in the state. Lastly, the federal government, if it is to be truly successful in guiding our county to a sustainable energy policy must lighten up a bit, listen more carefully to the experts in the coal and utility industries and not forget the coal communities who for generations helped make our country what it is today.

Yes, West Virginia has a future in coal, but it will certainly be different than anything we have yet to experience. For it to be a bright future, we all have a role to play.