Tag Archives: true cost of coal

Citizens Working to Improve Coal Communities in Montgomery County

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Coal rights location map showing 120,000 acres that were sold by the Montgomery County board to an affiliate of Cline Group.

For the last several years the focus of Citizens Against Longwall Mining has been to minimize the environmental impacts from Deer Run Mine and maximize the community benefits from coal extraction in Montgomery County.

We have identified two primary approaches that would greatly help the economic and developmental growth in Montgomery County.

  1. A coal severance tax should be established in Illinois.
  2. The royalty rate per ton of coal extracted from Deer Run Mine should be increased.

It is hard to understand why Illinois is one of the few coal mining states that do not have a severance tax. West Virginia has a 6.5% and Wyoming a 10.6% coal severance tax. Some Illinois communities have shown their support for a coal severance tax. The Montgomery County Board passed a pro-severance tax resolution during Roy Hertel’s chairmanship. Benld City Council has also approved a resolution to establish a coal severance tax in Illinois. To date, unfortunately, the State of Illinois is more supportive of profits for the coal operator than promoting the needs of coalfield communities.

One proposed plan for a coal severance tax in Illinois was for one-third of collected revenue to go to coal extraction communities, one-third to the state general revenue fund, and one-third to a permanent legacy fund that would cover costs later after the coal companies are gone. There is abundant evidence to support the need for this proposal. There have been two schools destroyed by subsidence in our area, Benld, several years ago, and Swansea, this September, 2017. A legacy fund would have helped communities with expenses like school replacements and repair of damaged infrastructure.

Past experiences show that communities cannot depend on Illinois government agencies and legislators to go against the interests of the coal-utility complex. People power is the most effective way to address the needs of communities. To unite and inspire citizens to act in their own best interests, they must be made aware of the past and consequences that are occurring now and in the future.

Montgomery County and Hillsboro were horribly short-changed when the coal bargaining terms were set up. The coal rights for 120,000 acres were sold by the Montgomery County Board for only $7.2 million to an affiliate of Cline Group in December 2004. This group turned around a short time later and resold the coal rights to another Cline affiliate for $255 million or about 35 times more than initially sold by the Montgomery County Board!

The 2% royalty rate is also too low for any growth potential in Montgomery County. In fact, the 2% is really about 1.5% to the county after Deer Run Mine’s required payments like Black Lung, Abandoned Mines, transportation costs, etc. are subtracted.

In yet another case with questionable results between citizens of a community and the giant coal industry, the citizens of Hillsboro lost their airport and failed to receive fair compensation for this loss. The airport was not appraised as a certified, functioning airport, resulting in an appraisal far below replacement value. The Hillsboro Airport was sold to Hillsboro Energy LLC for $350,000 on January 9, 2008 with the stipulation that the airport would be replaced within 10 years. There still is no Hillsboro airport or plans in the making to construct one.

Citizens are at risk of losing money in more subtle ways. The permanent placement of two high-hazard coal slurry impoundments, the violations of the Clean Air and Clean Water Acts, subsided farmland, and compromised roadways caused by Deer Run Mine are bound to adversely affect property values in Montgomery County. The community is not sharing in the wealth from coal extraction, and these companies should pay back to communities they have adversely affected. Our schools and communities are not receiving the funding that they need to provide 21st century opportunities.

Harm is caused to coalfield communities in many ways, and some are unexpected, but extremely dangerous. Deer Run Mine is sealed due to an ongoing fire that has been burning since March 2015. Even though Deer Run Mine is inactive, Hillsboro Energy LLC applied to the Illinois Department of Natural Resources, Office of mines and Minerals for a 7,731.8 acre expansion in 2015. IDNR/OMM has not approved or denied the permit application.

The underground fire has not been extinguished after several attempts and should be a major concern to everyone in Montgomery County. There seems to be no accountability for the community’s safety. This ever present danger to the community must be in the forefront of communications with the mine. Citizens need to know where the fire is located since Deer Run Mine is located in the City of Hillsboro. Is the fire migrating and in what direction?

When the Hillsboro Zoning Board of Appeals amended the land use plan to allow underground coal mining, the stated reason for the zoning change was “…to promote economic growth of the community, conserve property values, and protect the health, safety, and welfare of the citizens of the City of Hillsboro, Illinois…” Instead, much the opposite has resulted, our community continues to struggle financially and area citizen’s health and safety are at greater risk. For improvement and growth in Montgomery County, residents must unite and work toward a community benefit plan that holds coal operators responsible to the region in a way that enhances the quality of life for all.

Fracking Added to Coal Mining in Illinois Will Compound Environmental Impacts

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High pressure/volume fracking is a growing concern in Illinois. The Public Act 098-0022 (SB-1715) signed into law by Governor Quinn on June 17, 2013 is touted to have safeguards more stringent than other states.  If, however, regulations are loosely interpreted, applied and enforced much like the coal mining laws are handled by IDNR/OMM and the IEPA, the health of residents and quality of the environment will suffer.  Lax enforcement policies may well negate any purported safeguards, and Illinois coal is one such example. Residents in Illinois coal mining communities have few safeguards with regulatory agencies that allow coal mining to operate without adequate monitoring and testing to establish whether mining is compliant with the Clean Air Act and the Clean Water Act. This leaves citizens with no adjudicatory evidence.  Deer Run Mine in Hillsboro, Illinois is a mine that has a life time air permit that does not mandate any air monitoring or testing on or off the mine site.  IEPA has not enforced the use of stacker tubes as listed in Deer Run Mine’s permit  even with residents’ complaining of coal dust in their homes and hospital. Surface waters are threatened by discharges from the mine that empties into Central Park Creek which flows through Hillsboro, Illinois with harmful chemicals that are not monitored.  IDNR/OMM facilitates the coal operator to produce cheap coal, but disregards the health risks to citizens, the contamination of air and water, the threat of permanent impoundments, and lower production from subsided farmland. An insightful article by Philip Gregg titled, “How Safe Is Hydraulic Fracturing?” was published in the August 14-20, 2014 issue of Illinois Times.  The author discussed why there is controversy and lack of validation over the safety of fracking.   Gregg wrote that in most oil and gas producing states, “lobbyists and others have neutralized the regulatory processes.”  In Illinois this has already happened with regard to coal.  A citizen’s right to petition his/her concerns in an administrative review of a coal mining permit is stifled in an adversarial process that has existed for years.  The manner in which IDNR handles mining laws denies citizens their rights to protect their community as established in federal mining laws.  The firewall established through administrative law is problematic due to the resulting absolute and unchecked power, especially of an agency captured by the very industry it regulates. The legality of administrative law has been questioned in a recent book by Attorney Philip Hamburger.  His book titled “Is Administrative Law Unlawful?” reveals the historical and legal background of administrative law that he considers to be unconstitutional, unlawful, and illegitimate.  He thought a more appropriate term for administrative law would be extralegal power.  Any citizen in Illinois that has tried to participate in an administrative review of a coal mining permit would concur and recognize the injustice that is absolute and insurmountable. As a concerned citizen, I have listened to different IDNR/OMM representatives defend their coal position with some rather alarming statements such as the following.  Water quality, health issues, and air quality are not their purview.  Lower property values due to coal contamination in your home are consider a tax benefit!!!  High hazard coal slurry impoundments no longer exist after covering with soil, thereby meeting the “removal mandate” of SMCRA, the federal mining law.  Underground coal slurry injection is better than an above ground impoundment and will not contaminate groundwater as happened in West Virginia. Such misinformation is double talk for a failure to provide a healthful environment as required by the Illinois Constitution. Neither underground coal slurry injection nor high hazard dam impoundments are environmentally safe, but the profit margin of the coal operator determines how coal slurry is created and handled. The 60-80 foot high rise dam impoundments with toxic viscous slurry remain as a threat forever in a community. The safest approach is to process coal using minimal water and mining chemicals.  A dry method or coal press could be used to process the coal that would minimize pollution by producing less or no slurry, but would lower coal profits.  Presently, West Virginia has a moratorium on coal slurry injection and a decline in permits approved for impoundments.   Illinois should recognize the damage in West Virginia from coal slurry injection and permanent impoundments and protect Illinois communities. Best management practices, as listed in coal mining permits, really means the lowest possible expense for the coal operator.  Will best mangement practices for fracking also be motivated by profits?  This attitude translates to producing excessive and unnecessary permanent damage to communities.  There are no severance or extractive fees for coal; yet, Illinois taxpayers are taxed to support future clean up for this “legalized pollution” and for subsidies to coal. The proposed fracking regulations in Illinois does have an extractive tax, but will it be sufficient to compensate for permanent damage to water and land? If Illinois fracking operations receive the same preferential treatment by the regulatory agencies as bestowed on coal, communities will continue to endure unnecessary taxes to cover the hidden costs of coal and now together with fracking will experience diminished health and quality of life. Citizens must stand up for their quality of life and sustainability of their communities.  The coal and fracking industries with the assistance of IDNR and IEPA will continue to damage our health and environment if we let them.  Remember, it is up to us to safeguard our environment. May your concerns be heard and echo through city, county, and state offices.

Deer Run Hearing Underscores Citizens’ Frustrations

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The proposed toxic coal waste impoundment will be nearly twice the size of the existing one pictured here.

The proposed toxic coal waste impoundment will be nearly twice the size of the existing one pictured here.

The Hillsboro Energy, LLC Deer Run Mine located within the city limits of the City of Hillsboro in Montgomery County has been a source of frustration for area residents since its inception nine years ago. The June 4th, Illinois EPA permit hearing regarding pollution discharges from a new, giant coal waste disposal area at the mine was no exception.

Read more . . . .

 

The Price of Justice: A True Story of Greed and Corruption — a book review

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516zJY5SKMLBook Review ~ THE PRICE OF JUSTICE by Laurence Leamer

For the reader on your Christmas gift list, “The Price of Justice” is a heart wrenching true story of the pervasive effect of coal mining on West Virginia’s citizens. This book has special relevance for citizens that live with coal mining and recognize its influence on their community, government, and judicial system.

The personal struggle of two lawyers to bring justice to the victims of a powerful coal baron in West Virginia will captivate and inspire the hope that all of us have for the oppressed and powerless.

Dave Fawcett, a 3rd generation Pittsburgh attorney, and Bruce Stanley, raised in West Virginia, now a Pittsburgh attorney, took on the challenge of rectifying the injustice that Hugh Caperton and his Harmon Mining Company were subjected to by Don Blankenship, Chairman and CEO of Massey Energy.

Caperton took on a tremendous debt to acquire Harmon Mining and he cared deeply about making it successful for his family and employees. The loss of his mining company was devastating to him, but there was some comfort in the verdict of two juries that Blankenship was liable for fraudulent misrepresentation, concealment, and interference with contractual agreements.

Blankenship controlled the largest coal company in Appalachia, 4th in the nation with revenues of 2 billion in 2008. This book describes his powerful influence that was extensive throughout the state.  He flexed his control with the help of friends in the court system. Blankenship was determined to destroy the United Mine Workers Union and with the help of a circuit court judge, Elliot Maynard, they together stopped a lengthy strike and diminished UMW’s influence with the miners. In 1996, Maynard was elected to a 12 year term in the West Virginia Supreme Court of Appeals which placed a friend of Blankenship in even higher places.

Although Fawcett and Stanley were awarded 50 million dollars in damages for Caperton, Massey appealed the ruling to the West Virginia Supreme Court of Appeals.  The reader will marvel at the timing of the appeal to reverse the jury decision that was filed after an election in which Blankenship spent 3 million dollars to remove an incumbent and to elect Brent Benjamin. The court now had a more pro-business leaning, especially with Blankenship’s old friend, Justice Maynard and indeed the 50 million dollar verdict against Massey was reversed. Caperton had filed a request for Benjamin to recuse himself due to Blankenship’s financial support of his election, but Benjamin refused to disqualify himself.

Fawcett and Stanley thought the only way to get justice for Caperton was to be heard by the U. S. Supreme Court, but the chances for that were very slim. Certain events, however, occurred that changed the interest in Caperton and made it a federal issue.

Caperton et al. v. A. T. Massey Coal Co., Inc. was brought before the U. S. Supreme Court to address the issue of potential bias of Benjamin that denied due process to Caperton by reversing Massey’s 50 million dollar judgment by the West Virginia Supreme Court. The vote of the U. S. Supreme Court was 5-4 with Justice Kennedy providing the swing vote that concluded Benjamin should have recused himself.  After the victory for Caperton, the case was presented again to the West Virginia Supreme Court.  Here, incredibly, the damages against Massey were dismissed again in a 4-1 vote.  Massey and the coal baron prevailed and continued to dominate West Virginia politics.

The author relates how Blankenship insisted that coal be mined at any cost which created many hazards for the miners and several tragedies resulted.  Two miners, Don Bragg and Ellery Hatfield, died in a fire at the Aracoma Mine owned by Massey.  The safety issues that were thought to cause the fire were never addressed, and maximal production of coal at any cost continued. In longwall mining, there is continual formation of dust that must be covered or removed to prevent fires that could upon contact with methane gas explode.  This is what happened on April 5, 2010 at the Upper Big Branch Mine in Montcoal, West Virginia. Twenty-nine miners were killed; since 1995, Upper Big Branch had been cited over 3000 times for safety violations with 2 given the day of the explosion.

Read how eight months later, Blankenship left Massey with a 10.9 million salary plus benefits and a 39 million retirement package.  He left hundreds of residents with contaminated drinking water that resulted from his initiation of coal slurry injections into mine voids.  The devastation in West Virginia of lost lives, lost mountains, and loss of community will endure; that is Don Blankenship’s legacy.

The story of politics, money, and greed is developed artfully and placed in context of a hard working community that is only trying to survive. Hugh Caperton kept going with the knowledge that by fighting Blankenship, he was doing the right thing for West Virginia. He showed true courage, conviction, and tenacity, but never received justice.

  • Hardcover: 448 pages
  • Publisher: Times Books; 1St Edition edition (May 7, 2013)
  • Language: English
  • ISBN-10: 0805094717
  • ISBN-13: 978-0805094718
  • Product Dimensions: 1.4 x 6.4 x 9.3 inches

The time has come for a coal severance tax in Illinois

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A recent study points out how the state of Illinois is spending more to promote the coal industry than the corporations are paying in taxes to the state. It points up the real need for a coal severance tax on these companies that are selling Illinois coal out of state for huge profits.

Also, citizens are in effect subsidizing these corporations, as much of the damage left behind by these operations is repaired with our tax money also.

“Downstream Strategies” came out in June 2013 on “The Impact of Coal on the Illinois State Budget, FY2011.” Rory McIlmoil (MA, project manager), Meghan Betcher (MS, environmental science) and Amanda Kass (MS, Center for Tax and Budget Accountability, Chicago) did the study.

Our legislators need to review the true needs and priorities of Illinois, especially with our current budget problems. We cannot afford to supplement industries with grants when they are not providing the numbers of jobs originally promised, while being allowed to ship coal out of state and even out of the country without paying their fair share of taxes to the state of Illinois. Other states charge severance taxes. Why doesn’t Illinois?

Then there are the problems of permanent damage to farms and roads, as well as air pollution and water contamination. A severance tax could provide funds for repairing the damage left behind. These corporations also could be required in their original operating permits to set up funds for this purpose.

The above referenced study showed that out of 17 companies operating coal mines in Illinois in 2010, only three were required to pay corporate income tax. The remaining 14 companies, classified as LLCs, do not pay tax. Only 34 percent of Illinois coal produced in 2010 was produced by companies with corporate income tax liability. The study showed that taxes on coal came to $1,400,860. Meanwhile, the state’s total expenses in promoting the industry also came to $1,400,860.

The authors recommended the following actions: one, a state severance tax on coal; two, a permanent trust fund to help remediate environmental damages due to mining; and three, a detailed analysis of the full costs and benefits of grant programs supporting coal-related projects, with a plan for more oversight.