Monday, August 7, 2017

Miners or Owners

One of the things that was prominent in the recent campaign was certain promised to bring back coal mining jobs.

Now one thing that has developed in coal mining is the typical eastern deep mines versus the more western strip mining.  The difference is fairly significant since the first requires a large number of miners to work underground harvesting the coal while the strip mining use much more machinery to strip the coal and load it into other machines.

The first one obviously creates more jobs, the second one is cheaper, less jobs but better for owners.

Now the coal in the West is often on Government owned land and there has been an ongoing issue with mining it concerning Government royalties and environmental impact as well a impact on Native Americans, some who want royalties and some who want the lands preserved.

Strip mining is not an environmentally friendly practice, it basically denudes large areas and may introduce chemical into the ground water.

Finally there is only so much demand for coal and it is shrinking.  So you aren't going to produce an unlimited amount of it, only as much as you can sell.  If you get it out of the West, you shut down a mine in the East.  Of course cheaper coal is good for the export market since after all, coal isn't dependent very much on where it comes from although there are varying grades and types.

The prior administration was doing environmental studies and also trying to enforce a law from the 1920s concerning Government royalties.  The NY Times has an excellent article on this which I recommend.

Opening up the Government lands is good for mine owners but not as good for coal miners.

You need less of them and they are not the ones in the traditional coal mining states like West Virginia, they are machine operators in the West.

Now of course the policies of the new administration are supposedly pro coal, but really they are pro mine owner more than anything.  Certain people will make more money but it won't result in more jobs based on the shift, most likely less jobs as mines in the East get more non-competitive in a shrinking market.

Further because many of the countries still using coal are in the Paris Agreement and planning to reduce its use, the time to profit is now, rape the land, sell the coal and I guess smoke a cigar.

Its all business.

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