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Q&A: Bill Raney

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The State Journal had an opportunity this week to talk with Bill Raney, president of the West Virginia Coal Association, following the close of the regular session of the 2014 West Virginia Legislature. Raney, a Bluefield native, has been president of the Coal Association since 1992. 

1. The State Journal: What is your reaction to the just-completed regular session of the 2014 West Virginia Legislature?

Bill Raney: "There were a couple of good things. They did House Bill 4346, which was legislative encouragement, endorsement and support for the administration's hopeful aggressive pursuit of filing a plan for the upcoming rules on existing power plants that is anticipated in June from (the U.S. Environmental Protection Agency).

"They passed a resolution as well that encouraged EPA to be flexible and allow the states to do what's really intended under the Clean Air Act. That's to allow the states to tailor a program that fits the specific needs of the state. They haven't indicated that they're willing to do that, certainly not with the proposed rules they did with the new plants that came out in early January. The comment period was supposed to be up (March 10), but they extended it for 60 days.

"They set some parameters that were just literally unachievable with the current technology for new coal-fired plants. The hope is that in June when you see these instructive rules, if you will, from EPA, that they'll be much more flexible and allow the states to do, within their fleet, what they can best do to preserve the assets that they have.

"That was good news.

"The above ground storage tank bill (SB 373) passed, eventually. That worked out. Everybody got together and tried to figure out what the best approach for above ground storage tanks was. Hopefully to avert anything that occurred in the Freedom (Industries) situation. While everybody tried to blame us, it wasn't us. It just happened that it was something we use in our industry. 

"We have a lot of above ground storage tanks that are inspected more than any other above ground tanks, on our mining operations. We had 25,000 inspections last year on our operations. Part of that is taking a look at these tanks, so we're probably the industry that has tanks looked at more than any other. But nevertheless, everyone else got incorporated (in the bill) — the manufacturers, the oil and gas, the oil jobbers … everybody is in this and now we have a whole program that, over the next couple of years, will get it articulated and put it together.

"There were also some typical rule packages, modernizing, bringing rules up to date.

"The state is doing a good job of addressing the needs of industry, particularly our industry, the only one that I can speak to. We run into the problem with EPA; they won't ultimately approve permits. They won't approve the (U.S. Army) Corps of Engineers permits that they have approved and reviewed and looked at. They string this out into realms of uncertainty that are just paralyzing. Not only that they're impacting the extracting part, but now they're affecting the using part of the industry, with these rules that they put out in January. 

"It doesn't seem like (EPA) cares much about Appalachia, or the people here and what we do. We have the best coal miners in the world and the best coal in the world. We need to use that to secure America's energy future."

 

2. TSJ: The timing of the discovery of the chemical leak (Jan. 9), the day after the State of the State Address at the beginning of the 2014 session, certainly changed priorities at the State Capitol didn't it?

BR: "It really did. It really took control of the session. All of the people were in Charleston, within the perimeter of where the water problem was. They were living it as they were actually hearing it in the Legislature. It took priority and it took all session. There were many hearings, many briefings, many questions and answers — lots of discussion. If there was a theme that came out of this session, it was probably that."

 

3. TSJ: Despite dealing with EPA at the federal level, is it still important for you to keep pushing at the state level?

BR: "It is important, because the states know better what they need here. They know what to do to protect the environment, their water and otherwise. That needs to be emphasized and finally crystallized in the minds of those at the federal level, as opposed to them wanting to do it from a one center of control over the entire nation. It's like an energy policy. You can't have an energy policy for this country without recognizing the regional differences. We're coal mining and coal users in Appalachia. We know how to do it, and we do it very well. But you go out west, and you've got wind in the plains, you've got solar in the desert, so it needs to be regionalized. They all seem to want to do something from D.C. in a one-size-fits-all, but that just doesn't work when you have 50 states that have some pretty significant differences." 

4. TSJ: The Future Fund bill was much talked about before the session, and you told The State Journal then that it was something that "should have been done a long time ago," and that you'd be in favor of it, but you warned that "the coal industry can't stand another increase in taxes to be competitive." 

What are your thoughts on the bill, now that it passed both sides and now heads to the governor? 

BR: "That's still pretty much it. Conceptually, it's a good idea. They passed the bill. I've not seen the final version of it. But it incorporates all severance taxes. I don't think it raises the taxes; it establishes a number of thresholds that need to be met to put money into this account. As long as it doesn't raise the tax burden and as long as it preserves the counties' share of severance taxes from the coal industry, then I don't imagine people will have much trouble with it. But you have to wait for the final language to find out what it says. It was just changed on Saturday night, (March 8) right at the very end.

5. TSJ: Before the session, Senate President Jeff Kessler said that he would like a portion of the Future Fund to be designated to go to historically coal-producing counties that need it. What are your feelings about that?

BR: "I hope it is. I expect there will be rules for how it is to be implemented, enforced and collected. We'll just have to wait and see. The abandoned land mine fund does a great deal with that. That was the intent and design of that back in 1977. Even before that, the special reclamation fund here in West Virginia was where the industry puts in a per-ton contribution that takes care of places that were not adequately reclaimed and restored. The intent was to get it back to the areas that had provided energy to the country over the years. Now you have a different standard. they need to be brought up to that standard. The concept is good. There's nothing wrong with it, as long as it doesn't cost us any money, because I'm telling you, we can't afford it. We're at a competitive disadvantage in this state right now, compared to the coals from Illinois and Wyoming and other places. It costs more to get us developed to the point of mining coal because we're dealing with seams that have literally been chewed on for 150 years … ."   

6. TSJ: Because of an inability to get new permits?

BR: "We've been mining coal, so the logical thing is you mine the thicker seams and the bigger seams that are easier to get to; they're closer to the roads, the rivers and the rails. All of that has been occurring for 150 years. So now we've got thinner seams that are further away from the transportation points. It takes more accessibility capital to get to the seams. That all equates to the fact that it makes our mines a little more expensive. Plus all of the enforcement programs. The federal safety agency has just been very, very difficult to deal with in terms of not approving plans that are consistent to the capability of new modern equipment. We have underground mining equipment that can cut 40 feet, remote controlled. They simply won't routinely or will they dependably issue permits for that to happen. They restrict you to 18 feet. When that happens, we do the most dangerous thing we do underground — that's move equipment. We have to do it twice as much because the agency that's responsible for safety will not approve the deep cut permit. The equipment is designed to do it. The man stands back with a remote control and the machine is 40 feet in front of him. It's just amazing. It affects productivity, which again affects the cost. We have to do everything we can to bring that back into line to keep us competitive. We still have the best coal in the world and the best coal miners. 

"It's so, so difficult to get permits. The uncertainty absolutely chokes off everybody. 

"Take the Spruce permit in Logan. It went through eight years of review, everybody approved it, it was good, they got ready to buy equipment and hire people — and the EPA comes in and takes the permit away. Now they're in the Supreme Court, questioning whether or not that's a legal action of the agency. It's nuts. That's like taking your driver's license if you're a cab driver — without any violation." 

7. TSJ: What's the future of coal?

BR: "You just have to keep plugging. Keep pushing and hope people realize how important low-cost electrical energy is. We enjoy that in West Virginia. It's not anywhere near what they pay in New York, where they use a multitude of fuels to make electricity. The costs are going up because of the federal government controls that they're forcing these plants to make. People simply can't afford a 20 to 30 percent rate increase in their electric bill over the next three or four years. That's literally what they're doing. They're forcing technology that doesn't exist. Second, if they come with the existing plants, it's so terrifically expensive that people won't be able to afford it. 

"I think the grid is in jeopardy. You look at the plants that are going to close in West Virginia from AEP and FirstEnergy, the AEP plants this winter, with all of the difficult weather we had, those plants were operating at 89 percent. And they kept the grid stable.  Next year, two years from now they won't be there and there is nothing in the works to replace them."