Coal Subsidies Come in Many Shapes and Sizes

A few weeks ago, my friend John Christensen and I gave a presentation to the Joint Committee on Economic Development of the WV Legislature about the status of the solar power industry in WV.  During the presentation, a Republican legislator asked me if I believed all of the “subsidies” for solar power were really worth their cost.  I replied that all electrical generating systems are subsidized, and that the real question is what our priorities are.

WV’s political leaders are running from the obvious connections between the coal industry and the chemical contamination of the water sources of 300,000 of their fellow West Virginians.  Those same politicians, along with health care providers and public health bureaucrats, continue to cover up and minimize the rising numbers of acute rashes and digestive tract problems.  Government officials are all rushing to make the media and citizens forget the catastrophe that is continuing to unfold.

All of the claims that WV American’s water is now safe are based on a single study of one of six chemicals that now contaminate the company’s system and people’s homes.  Ken Ward pointed out in this article that the largely made up safety standard, that Gov. Tomblin, WV American Water, the federal CDC and the Kanawha Health Department are all pushing, failed to account for five additional chemicals that are found in the Crude MCHM: 4-(methoxymethyl)cyclohexanemethanol, methyl 4-methylcyclohexanecarboxylate, dimethyl 1,4-cyclohexanedicarboxylate, methanol and 1,4-cyclohexanedimethanol.

But back to the coal subsidies.  Matt Wasson, water expert from Appalachian Voices, had this op-ed piece in yesterday’s Charleston Gazette.  Here is his account of how your federal tax dollars were used to pick winners and losers in Boone and Logan Counties when coal companies needed big federal grants to allow them to destroy the local water sources of two WV communities, so they could get mine permits:

Take, for example, the residents of Prenter in Boone County. A few years ago, elevated levels of lead, nickel, arsenic and other chemicals in the tap water was causing skin rashes and dental decay, and could portend kidney and nerve damage, and cancer. Residents and scientists believed the pollution came from coal slurry — the waste by-product of removing impurities from coal — being dumped into abandoned mine shafts, where it could flow through cracks in the earth into groundwater and ultimately the wells of local residents.

Enter the West Virginia American Water Company, which operates the water treatment plant and distribution network that was shut down Jan. 9. In 2010, Boone County partnered with West Virginia American Water on a multi-million dollar project to run water lines out to Prenter and other communities. The project was mostly paid for by a federal grant, with Boone County and the water company making up the difference. Not a penny was paid by the coal companies that polluted the water in the first place.

A paper trail of Public Service Commission (PSC) filings reveals similar stories happening again and again, as West Virginia American Water gobbled up one municipal utility after another. For example, in 2004, the state gave approval for the water company to develop the Sharples Water Line Extension in Logan County because a coal company’s mining plans were likely to destroy the well water of nearby residents, which had provided a reliable supply of clean water for generations. According to the PSC documents: “Arch Coal’s proposed Mountain Laurel Mine … will potentially de-water the aquifer that is the source for [Logan County’s] Sharples system.”

While the documents sought to justify the expense on the grounds that the extension would “eliminate the use of local groundwater and provide a more than adequate supply of drinking water that will sustain the expected growth in the project area,” nobody seriously expects growth near a massive mining complex in Logan County, where population has been declining for decades. The real motivation for the project is found in the expected economic development benefits section, which reads: “The extension Project will help satisfy mine permitting requirements for Arch Coal’s proposed Mountain Laurel mine.”

Similar evidence of how public money has been used to benefit the coal industry while expanding the customer base of a private water company runs throughout PSC documents. And so it came to be that WVAWC, consolidating its infrastructure as any profit-driven entity would, wound up with a single water intake in the Elk River — a mere mile and a half downstream from a coal-chemical storage facility — to serve 300,000 people in nine counties.

As Wasson’s account makes clear, these large subsidies to the coal industry, in the Sharples case directly to Arch Coal, also served to take the control of an essential publicly owned water resource out of public ownership and into the hands of a privately owned multi-national corporation that drew its water from a single, vulnerable source far away from Prenter and Sharples.

Mr. Wasson rightly uses these examples to illustrate the many connections between the current disaster and the coal industry.  In this post, however, I also see these two examples as clear illustrations of the wide range of subsidies available to the coal industry.  These subsidies are largely hidden from view, because the coal industry is so intertwined with the lives and health of local communities wherever coal is mined and burned.

Coal’s subsidies come in all shapes and sizes, so that the legislator who spoke to me about subsidies at the Joint Committee hearing could simply ignore them as if they weren’t there.  WV politicians, regulators and power companies routinely decry the cost of “subsidies” for renewable power of all kinds in our state, while they routinely dole out subsidies to the coal industry in the form of lax regulation, tax subsidies and complex business deals that we see in Prenter and Sharples.

One thought on “Coal Subsidies Come in Many Shapes and Sizes

  1. Let’s not forget that when there got to be too much outrage over the routine overloading of coal trucks and the frequent accidents, generally fatal, when another vehicle met one of these extremely heavy trucks on a narrow, winding mountain road and the truck couldn’t stop…state officials considered regulating the trucks, that is enforcing the law as they do for non-coal vehicles…but instead “solved” the problem by making it legal for coal trucks, and only coal trucks, to carry 50% more weight than other vehicles. So they’re still overweight but now they’re not illegal. The state highway department estimated the extra damage to the roads and bridges at some shocking figure, but never mind, coal companies could contribute to the cost of repairing them, if they chose to! And that’s one of the subsidies all state residents, even if we don’t live in the coalfields, pay.

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