When the word came down from St. Louis last week that a federal bankruptcy judge had approved Patriot Coal’s plan to dump its union contract and its retiree health-care plan, the reaction from the United Mine Workers was about what you would expect.
United Mine Workers of America President Cecil Roberts said in a prepared statement that the ruling was “wrong, unfair and fails to fully recognize the coming wave of human suffering that will be experienced by thousands of people throughout the coalfields.” Roberts continued: “As often happens under American bankruptcy law, the short-term interests of the company are valued more than the dedication and sacrifice of the workers, who actually produce the profits that make a company successful.”
The comments from Patriot CEO Ben Hatfield were equally predictable.
“This ruling represents a major step forward for Patriot, allowing our company to achieve savings that are critical to our reorganization and the preservation of more than 4,000 jobs,” Hatfield said. “The savings contemplated by this ruling, together with other cost reductions implemented across our company, will put Patriot on course to becoming a viable business.”
And while we’ve still heard next to nothing from most political leaders — and certainly not from the Friends of Coal crowd – about this issue, there were strong reactions from some elected officials. West Virginia Sen. Jay Rockefeller, D-W.Va., said, for example, “Miners who have given their lives to this industry are now facing terrifying uncertainties over their health care, pensions, and pocketbooks. I am deeply disappointed by this outcome and what it means for our miners directly impacted by this decision and all workers who have experienced the unfairness of our bankruptcy system.”
If you take the time to read closely the 102-page decision by Judge Kathy Surratt-States, it’s not too hard to see what the UMWA and its supporters — and anybody who thinks working people should be treated fairly — are upset. Start with just the fact that it takes a dozen pages in the ruling just to try to run through the long and complicated history of the UMWA’s effort to secure, through a maze of various plans, contracts and legislation, the “cradle-tograve” benefits mine workers so rightly prize.
Or look near the beginning the decision, where the judge describes the letters the court has received by retirees and widows who are scared to death about what this case might mean for their lives.
“Many discuss the horrendous conditions of the coal mines when those individuals first began to work, and how hard it was to achieve the promises made pursuant to both the previous and the current CBAs (collective bargaining agreements),” the judge writes. “Some discuss how physically, mentally and emotionally grueling being a coal miner was, many of whom worked as coal miners for over 30 years – a sacrifice made with due consideration of the promised health care from cradle to grave. The Court has received numerous medication lists, lists of various coal mining-related diagnoses and personal accounts of the years of hard work, and, all the reasons why these sacrifices were worth it for the promise of health care for life and an earned pension.”
Continued the judge: “Some letters discuss various injuries sustained while working in coal mines, limbs of self and relatives lost, and the lives lost of relatives and friends. None of these letters, or their comments have been lost on this Court.”
It’s true that the UMWA has great health-care benefits, both for workers and retirees. And it’s popular, even among many folk who consider themselves progressive, to say things like, “I don’t have benefits that good, why can’t they suck it up and accept less.” But isn’t the real question why the rest of us don’t have health-care as good as the UMWA’s? Or, why most of us are stuck without decent pensions, instead forced to rely on a 401-K system that, as Frontline, the PBS show, recently explained, really isn’t working?
It’s great that some political leaders like West Virginia Rep. Nick J. Rahall are pushing the CARE Act (Coalfield Accountability and Retired Employee Act), legislation aimed at preserving benefits for retired coal miners. But the Patriot ruling should make it clear again that — in the words of a leading case on the matter — “bankruptcy law is draconian to labor unions” and changes are needed to make the system more fair to workers. In effect, as the judge explains, all of the decades of fighting by the UMWA to improve the working conditions and living conditions of its members — to rise above the day of the company store, really — became irrelevant the day Patriot filed for bankruptcy.
“The argument here is therefore that the gravity of the concessions sought by the unionized miners is in effect just a ‘catch-up’ to the cutbacks that the remainder of Debtors’ employees have endured for the past few years,” she writes. “But of course, the unionized workforce escaped those pay freezes, vacation limitations, unrestricted work-hours and the like in exchange for lower pay, promised pensions, health care coverage and retiree benefits. The question is not is this fair to the unionized miners; is this equitable to the unionized miners. Rather, the question presented is whether these overall changes are fair and equitable to all interested parties which necessarily includes an evaluation of the treatment of the unionized Under federal law, employees have the choice of whether or not to be unionized. Bankruptcy law is also federal law and Section 1113 takes no prisoners. So it was written by Congress.
“Years of toil, perseverance and determination of miners past yielded the employment terms and conditions of miners today, but this does not matter where, as here, savings everywhere else have already been explored within reason and exhausted.”
In effect, the bankruptcy law and the judge are endorsing a race to the bottom for workers in the coalfields.
“This is not a union versus nonunion evaluation; it is an evaluation of what is necessary for Debtors to emerge from bankruptcy as a viable company and whether or not the path chosen to implement what is necessary is fair and equitable,” Judge Surratt-States writes.” Given the grave disparity between union and non-union pay and benefits pre-bankruptcy, the limitations placed on non-union labor that have been in place for years, and acceptance of the reality of the savings needed, the Court concludes that the UMWA represented employees are not tasked to disproportionately shoulder the burden of Debtors’ bankruptcy.”
But as I read and re-read Judge Surratt-States’ decision in the Patriot case, I couldn’t help but notice key parts of it that point to broader issues facing coalfield communities in of Appalachia. The judge describes well the challenges Patriot Coal faces, even if it emerges from bankruptcy. She notes, for example, that optimistic projections for coal’s fight with natural gas for market share probably aren’t very realistic.
“During the five-day hearing … much ado was made about the correlation between natural gas prices and coal prices,” the judge wrote. “The record demonstrates that while spot prices for natural gas have increased, the long-term futures prices for natural gas have declined, which tends to show that natural gas will continue to be an economical alternative to coal over the coming years.”
And while the judge doesn’t really get into one of the other major hurdles facing Central Appalachian coal — that of basic geology — a careful reading of the decision leads to inescapable conclusions about the long-term viability of an Appalachian coal industry that is forced to take the full costs of the coal’s life-cycle impacts on workers and the environment into account.
Take, for example, what the judge had to say about Patriot’s environmental liabilities, and the company’s decision last year that it would abandon mountaintop removal to focus on large-scale underground mining (which uses more workers and is, by the way, more likely to be unionized).
“Debtors have incurred hundreds of millions of dollars in costs to comply with new laws and regulations, and will continue to incur significant compliance costs in the future. This is particularly exemplified by the heightened, albeit long overdue, water quality requirements which consequently involve increased environmental compliance before mining permits are issued,” Judge Surratt-States writes. “Like other coal mine operators, Debtors must now install costly watertreatment facilities at certain of their mining complexes which will likely cost hundreds of millions of dollars over the next several years to comply with these and other environmental obligations. Mining permits have also been conditioned on Debtors’ ability to maintain certain conductivity levels which reflect levels of salt, sulfides and other chemical constituents present in water. While these means justify the ends, it is worth noting that these means will nonetheless affect Debtors’ financial situation.
And, as the judge makes clear, it’s not just about making sure environmental costs aren’t externalized. It’s about protecting workers as well.
“Other long overdue regulatory obligations that will negatively affect Debtors’ bottom-line include the required use of self-contained self-rescuers,” she writes. “In the event of an emergency, these rescuers will provide underground miners with breathable air. Debtors are also required to install refuge shelters in underground coal mines which are intended to enable underground miners to reequip, communicate, and/or wait for help. Debtors must also increase the use of “rock dust” (or the like) in underground mines which can help to prevent coal dust explosions. Debtors’ compliance with all of the above, while reasonably predictable over the course of the past few years, have affected Debtors’ viability.”
There’s simply no question that coal miners have had to wage a century-long fight to make their jobs safer, and even today they face the threat of coal-dust explosions, terrible fires, one-by-one deaths from roof falls and the like, and the still often-hidden scourge of black lung disease. But coalfield citizens have also fought for decades to reduce the impacts of strip-mining upon the land and people, a campaign that continues today as the science continues to point to serious health impacts from mountaintop removal. And of course, the biggest problem of all is coal’s contributions to climate change, a crisis that coalfield leaders simply refuse to acknowledge.
In many ways, the story of coal in West Virginia is a history of trying to hold the industry accountable. Sure, generations of West Virginians have earned their livings, put food on the table, and sent their kids to college with paychecks earned toiling away in the mines. And many communities around the state rely on the industry to support vital local services, like schools and roads. But West Virginians have also spent decades trying to make coal pay its fair share, to see that the wealth buried in our mountains is shared in some small way with our communities. These efforts continue today, by those who are pushing for a “Future Fund” to help transform and diversify our economy and those who want to hold large land-holding companies responsible for the messes mining on their property leaves behind.
Citizen groups who are working on coal issues and coal miners who are fighting for fairness at Patriot Coal have more in common that they realize. After all, what is the UMWA’s campaign to protect its pensions, health-care benefits and decent working conditions if not an effort to force Patriot to share the wealth with its workers, to make coal pay its fair share to its workers and retirees?
Likewise, the folks running Patriot Coal have more in common with these groups than they realize or would ever want to admit. Patriot and the UMWA, for example, share an interest in trying to trace the pension and health-care liability back to Peabody Energy, to force that coal giant to live up to its promises and shoulder its own liabilities. And Patriot CEO Ben Hatfield, in one of the more remarkable scenes I’ve witnessed in more than two decades covering coal, acknowledged the negative impacts of large-scale surface mining on communities like the one where he grew up.
Said Hatfield: “Patriot Coal has concluded that the continuation or expansion of surface mining, particularly large scale surface mining of the type common in central Appalachia, is not in its long term interests … Patriot Coal recognizes that our mining operations impact the communities in which we operate in significant ways, and we are committed to maximizing the benefits of this agreement for our stakeholders, including our employees and neighbors. We believe the proposed settlement will result in a reduction of our environmental footprint.”
In making that announcement, Patriot Coal was facing facts, confronting the changing — and shrinking — coal industry that is likely to exist in southern West Virginia and eastern Kentucky in the coming years. As Downstream Strategies recently reported, it may not be all bad news. Even as production shrinks, declining productivity may allow some communities here to see more jobs. But many others will undoubtedly see layoffs of the sort that have become common over the last two years. And as Downstream Strategies also said, their latest findings only emphasize again the urgent need for the region’s leaders to focus on diversification, on preparing our education, infrastructure and economic development systems for a transition that, regardless of what happens with coal jobs, with make it a better place for everyone:
… With the future uncertainty of markets for Central Appalachian coal and visible shifts in demand toward coal from other basins and fuels such as natural gas (and to a smaller extent, renewable energy), the possibility of increasing coal jobs with decreasing coal production should not prevent policymakers from laying the foundation for new economic opportunities in the communities most vulnerable to declines in coal production.
The future is going to put even more pressures on all of coal’s stakeholders, on workers, environmental protection, workplace safety, and even state and local governments trying to balance their budgets. It’s even more important going forward for folks to find ways to work together, rather than be split apart by false campaigns about the “war on coal.”
Unfortunately, even as the Patriot Coal ruling was making all of this even more clear, we saw multiple examples again last week of West Virginia leaders who simply refuse to admit — let alone embrace — the future.
Take last week’s climate change forum in Fairmont, W.Va., an event designed to leave the impression that scientists are still split on whether the world is warming or, even if it is, if human activity like burning coal is to blame. GOP Rep. David McKinley, who arranged the forum, got to pretend that bringing together actual scientists and industry-backed climate change deniers would somehow produce some common ground. Instead, we were treated to ridiculous comments like this one from former Senate aide Marc Morano: “We must have the courage to do nothing when it comes to regulating CO2 emissions.”
West Virginia absolutely needs to be talking about global warming. But events that only further the notion — promoted constantly by the coal industry and its political supporters — that the science isn’t clear on the issue don’t get us anywhere.
Finally, we had the scene on May 30 on MSNBC’s show “All In,” which featured an interview with Sen. Joe Manchin, D-W.Va., about the Patriot Coal ruling. Sen. Manchin criticized the judge’s decision, and promised to explore options for reforming the bankruptcy laws to provide workers more protections. But then host Chris Hayes hit the senator with a great question.
“Let me ask you this, senator, quickly and this is a hard question,” said Hayes. “Your state has been dependent on coal for a long time, and coal is having a really rough time in the marketplace right now. It’s getting pounded by natural gas. is the state of West Virginia prepared for a future after coal?”
How did Sen. Manchin respond? Here’s what he said: “Let me just say this, Chris. First of all, not West Virginia, this country has depended on the coal produced by the coal miners of West Virginia for a long time. The coal miners of West Virginia, people should say a prayer every night for a coal miner in West Virginia. They gave them the energy, the country, the freedom that helped win the war. Coal has been the staple that we’ve had. It’s domestic, it’s here in our own country. We’ve been working our tails off for many, many, many years. And the thing about it is we can do it and we have the technology to use it even cleaner. EIA (Energy Information Agency), which is a division of the department of energy, says that coal is going to be 35 percent of the energy mix through 2040. We need to have more of our technology and more research done in sequestering and supercritical heating and things we can do and use our coal resources much cleaner. We need to be independent of foreign oil and coal is part of it, but right now it’s being because of market conditions, Chris, I understand that, we’ve always been able to go through the highs and lows of the markets.”
Is it me, or did Sen. Manchin not really answer the question? Chris Hayes didn’t seem to think so. As he closed the segment, he told the senator: “But right now, I think, it’s facing possibly a decline and could be transformative for the people of your state.”
Ken Ward Jr. is a reporter for The Charleston Gazette in Charleston, W.Va., specialing in the Central Appalachian coal industry. This analysis appeared on his highly-regarded blog, “Coal Tattoo,” after a federal judge ruled late last week against UMWA retirees in their battle with Peabody Coal affiliate Patriot Coal Company.