‘Dire State’: With coal failing, economy must diversify
Politicians make a show of believing in the free market, when it suits their needs. It is a useful tool in jabbing at companies that have taken full advantage of bankruptcy law, or industries that have received bailouts or heavy subsidies … until that same free market turns on them.
This week, we learned Murray Energy Corp. — owned by Robert Murray, who donated at least $1 million to support President Donald Trump, as Trump was leaning heavily on promises made to coal country during his campaign — has filed for Chapter 11 bankruptcy reorganization.
As U.S. Rep. David McKinley, R-W.Va., put it Tuesday, the coal industry is in a “dire state.”
United Mine Workers of America President Cecil Roberts put it well when he blamed the bankruptcy on a decline in steam coal demand because of growth in natural gas and renewables for electricity, and a slowdown in coal exports. The free market has not been kind to coal. And politicians — even those supported by the money and fundraising capabilities of the likes of Gov. Jim Justice and Murray — are not having much success in fighting it.
Appalachia is not alone in the struggle. Mines and miners in Wyoming are in even worse shape. For that matter, Murray Energy alone employs more than 7,000 miners across the country … and it is the eighth coal company to file for bankruptcy just this year.
Of course, bankruptcy does not necessarily mean failure, just yet. But West Virginia’s congressional delegation was right to recognize it could mean taxpayers will go from being on the hook in covering the reduced revenue from severance taxes after companies such as Murray’s received discounts, to being on the hook for miners’ pensions AND and even greater loss in severance tax revenue. Either way, coal company executives have become comfortable knowing they will receives tax cuts, backstops and other financial support from the very same politicians who decry subsidies to other industries.
U.S. Sen. Joe Manchin, D-W.Va., is right to want to make them a little less comfortable with efforts such as the Stop Looting American Pensions Act. Still, we cannot leave miners and their families in the lurch. Efforts to keep the UMWA 1974 Pension Fund from becoming insolvent should be pursued as well.
Meanwhile, West Virginia lawmakers MUST give up clinging to the idea our economy revolves around coal. For months (years, now, really), experts such as John Deskins, director of West Virginia University’s Bureau of Business and Economic Research, have been warning our state’s economy must diversify.
“The way you really have to achieve industrial diversification in a healthy way is through supporting small businesses by encouraging them to try different things, go different directions and innovate,” he said.
Support diversification and growth, and stop thinking of coal as something that must be shored up at all costs. Of course it is still an important part of our economy. Of course we need to take care of our miners and their families. One of the best ways we can do that is to make sure our state has an economy that is diversified and healthy enough to give them a chance.