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Want to create good jobs? Don’t count on Coal.

Posted by Ross Macfarlane at Dec 19, 2012 10:20 AM |

In what has become an extremely volatile and declining industry, the evidence shows that coal is a poor foundation for job creation and coal company executives are not to be trusted.

Want to create good jobs? Don’t count on Coal.

Ross Macfarlane, and Nick Abraham

By Ross Macfarlane and Nick Abraham
Climate Solutions

In response to an avalanche of concerns from Northwest communities, coal export proponents have been relying on three primary arguments: jobs, jobs, and jobs.

This focus is understandable. But hiding behind the nice-sounding name of “the Alliance for Northwest Jobs and Exports” are coal companies that have a very poor track record when it comes to creating good jobs and respecting the rights of workers.They’re trying to put lipstick on a pig. In what has become an extremely volatile and declining industry, the evidence shows that coal is a poor foundation for job creation and coal company executives are not to be trusted.

Eric De Place of Sightline recently put together an excellent post showing that coal investments yield some of the worst job returns of any industry. His piece also showed that a huge and rapidly growing percentage of coal jobs are non-union with poor pay, job security and benefits. 

Recent history illustrates coal’s poor history with workers. In October, the United Mine Workers of America filed suit against the two largest US coal companies, Peabody Coal and Arch Coal. The workers claim that the coal giants conspired to deprive workers of pension and health care benefits by spinning off assets from older coalfields into a subsidiary, Patriot Coal, which declared bankruptcy last summer. Peabody and Arch are also driving forces behind the two largest NW coal export proposals, Gateway Pacific and Millenium. The union claims that Patriot was set up in a deliberate effort to avoid their financial obligations. 

This is hardly the first time Peabody and Arch have run into problems with workers’ advocates. Just last May, a federal court ordered Peabody to “halt unfair labor practices” when workers were unjustly fired. From 2000-2009 Peabody was fined over $26 million in safety violations, and had over 8700 “significant violations”. Arch Coal had 3400 violations in the same period, and has been firing non-union workers at a staggering rate.

Or take Ambre Energy, the lead proponent for the Morrow-Pacific and Millenium coal export projects on the Columbia River. Ambre recently laid off nearly half of its workers at the Decker mine in Montana, citing poor market conditions.  

But volatility and declining demand is the new reality for coal, and Asian exports offer no miracle cure. The Seward Alaska coal export facility, the only terminal on the US West Coast currently exporting thermal coal to Asia, recently laid off most of its workersA company spokesperson blamed “uncertainty in Asian Markets.” The same company had significant layoffs twice in the past decade.

Or take a look at Australia, the world’s biggest exporter of coal to Asian markets. Workers there have seen major layoffs and numerous coal projects cancelled. Gregory Boyce, Peabody’s CEO, recently urged leaders in that country to make coal mining and exports “more competitive” by reducing costs for coal companies. His top demands: cut wages and pension benefits for Australian coal miners, along with fees and taxes for coal extraction from public lands. 

We have seen this movie before. If we let King Coal build these export facilities in our communities, how long will it take before we see similar demands here? 

These export facilities are a “Hail Mary” pass from a desperate industry running out of time and running out of options. Profits and share prices for Arch, Peabody, and other coal companies have plummeted. As outdated and expensive coal plants are shutting down for cheaper alternatives like natural gas, efficiency upgrades and renewables, some analysts are calling this coal’s “darkest hour”. Just this week, yet another coal industry player declared bankruptcy. As Phillip Bump at Grist puts it, “Oh, is it Monday? Ah. Well, then, there must have been another coal-reliant company filing for bankruptcy. Let’s see…yup, here it is.” 

So, rather than turning to a nineteenth century commodity to create risky jobs in our communities, let’s invest in industries of the future. We need sustainable prosperity based on our core strengths: innovation and the highest quality of life.

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