Market trends coupled with increased government environmental scrutiny have sent thousands of coal industry workers to the unemployment office. And for years, coal field communities around the country have accused the Obama administration of turning a blind eye to their plight.
The fiscal 2016 budget request unveiled yesterday appears to be a response to those concerns. Although continuing to push its environmental agenda, the administration is proposing a number of programs and spending initiatives to help workers affected by it.
Lawmakers have been clamoring for more action to help displaced coal workers. But that doesn’t mean the president’s POWER+ Plan — which stands for Partnerships for Opportunity and Workforce and Economic Revitalization — will be an easy sell.
One of the most significant proposals comes from the Interior Department’s Office of Surface Mining, Reclamation and Enforcement. The agency wants to spend $1 billion over five years from the abandoned mine lands fund to speed up cleanups and, at the same time, boost coal field employment.
Every year, OSMRE doles out grants to states and tribes from the industry-fed AML fund. "We propose to put this money to work now," Director Joseph Pizarchik said during a conference call yesterday afternoon.
Coal field advocates have for years eyed the fund as a money pot with significant economic development potential.
"Right now, we don’t have authority under the law to move up the money and disperse it to folks," Pizarchik said. "We are all going to need to work together, to work with Congress, to come up with the changes in the law."
The agency, as in years prior, is also proposing to return the AML fee on coal companies to pre-2006 levels. It’s an idea that is likely to get resistance from the GOP-controlled Congress but be celebrated by supporters of dealing with the multibillion-dollar reclamation backlog.
"This OSMRE 2016 budget is the most responsive budget in decades to the concerns and real needs of coal impacted communities," said Louise Dunlap, who represents coal field advocates in Washington, D.C. The agency would get about $128 million for regulation and technology, an increase of about $5 million from current levels.
"By reflecting the letter and spirit of the Surface Mining Control and Reclamation Act, it also creates an opportunity to revitalize coal field communities," Dunlap said. "This budget deserves bipartisan support."
Saving UMWA benefits
Pro-coal politicians from both sides of the aisle have been more supportive of helping shore up the United Mine Workers of America benefits system, which gets interest payments from the AML fund.
The president’s fiscal 2016 budget request would rework the formula for calculating payments for UMWA’s system and would transfer funds from the Pension Benefit Guaranty Corp.
Many beneficiaries live in the areas hardest hit by coal’s woes. So preventing the plan’s insolvency, supporters say, would also prevent further coal field economic pain.
"We are on the cusp of ensuring that the promise our government made in the White House to America’s coal miners 68 years ago is kept," said Cecil Roberts, UMWA’s president, recalling the deal that got the federal government involved in miner benefits. "Let’s get this done."
Greg Conrad, executive director of the Interstate Mining Compact Commission, warned that at least some of the proposed changes could reignite old debates about how to best allocate AML funds.
"It’s going to be an uphill battle," Conrad said about the $1 billion proposal. "I’m not going to say it’s unlikely, but it’s an uphill battle."
The need to shore up miner benefits helped propel the "very complex issue" ahead of the 2006 SMCRA amendments. "That could well be the thing that drives some kind of legislative effort" this time around, too, said Conrad, who wants lawmakers to begin thinking about extending the AML fee beyond 2021.
The National Mining Association is keen to remind lawmakers that its member companies are the ones that pay into the AML fund. The trade group hasn’t officially come out against reauthorizing the program but has taken a dim view on boosting the fee.
Spokesman Luke Popovich accused OSMRE of spending too much money for too little. "And now they want to raise the tax, even as they still have $2.5 billion in the fund that is unappropriated," he said. "They need to focus on the priorities rather than wasting the money and asking for more."
CCS tax credits, grants
The president’s POWER+ Plan would also create new tax credits for carbon capture and sequestration worth $2 billion. It would provide $50 per metric ton of CO2 permanently stored and $10 per metric ton of CO2 that is stored and reused for enhanced oil recovery.
Aside from ongoing funding for Department of Energy research, new tax incentives are meant to encourage the technology’s commercial deployment, one of the coal industry’s top priorities, particularly when a recent Obama administration proposal would require CCS for all new coal power plants.
The White House is also proposing to set aside $55 million for worker aid, retraining and economic diversification. That includes $20 million in Department of Labor funds specifically earmarked for affected coal mine or power plant workers.
The budget includes $25 million for the Appalachian Regional Commission, a federal-state development partnership, to help communities with economic transition.
The budget would boost the Department of Commerce’s Economic Development Administration’s budget by more than $8 million. It also includes Department of Agriculture rural development aid and $5 million in U.S. EPA brownfields grants for communities affected by plant closures.
"While I am pleased that his Administration has suddenly taken an interest in these communities, one year of action cannot be substituted for years of inaction in which we saw mine after mine shuttered and more than 8,000 hard-working men and women lose their jobs in eastern Kentucky," said House Appropriations Chairman Hal Rogers (R-Ky.).
Rogers’ district has been among the hardest hit by the coal downturn. "As the Appropriations Committee sorts through the President’s budget proposal for 2016," he said, "we will certainly bear in mind the dire needs of these hard-hit communities while ensuring that every taxpayer dollar is responsibly spent to jump start the economy and create new job opportunities — in Appalachia and elsewhere."
Leaders of other committees, like the Natural Resources and Workforce panels, will no doubt want their say on the proposals. Some lawmakers, like Rep. David McKinley (R-W.Va.), have also floated their own miner aid bills. Last year’s spending bill included $10 million for laid-off miners.
Attacking the president’s environmental agenda, McKinley said, "That’s why we’ve focused on working on their behalf, whether it’s pushing back on anti-coal regulations, protecting pensions and benefits, or providing training for displaced miners."
He added, "It is refreshing to see the President hear the concerns of coal miners and coal communities and adopt proposals to aid those left behind by his destructive policies."
The administration has been touting its aid efforts for several months, long before this week’s budget release, including interagency coordination by the White House Domestic Policy Council. ARC grants have, for example, already been helping fund Shaping Our Appalachian Region, an economic diversification initiative in Kentucky.
Bill Price, national organizer for the Sierra Club, which wants to phase out coal power production and mining, said coal families "deserve our gratitude and respect." He pointed to market conditions plus public clamoring for clean energy as behind coal’s problems.
"The federal government can do for Appalachia today what it did for the Pacific Northwest during the contraction of the timber industry by providing these important funds and more," Price said. "All members of Congress, including Appalachia’s representatives, should support this important section of the budget request today."