Posted on 02/28/2005 4:57:01 AM PST by Born Conservative
POTTSVILLE (AP) — How’s this for irony: Pennsylvania sits atop 7 billion tons of anthracite coal, but consumers who use it for home heating have been having a tough time getting it this winter. Coal yards in Schuylkill County, the nation’s No. 1 producer of anthracite, say they are rationing coal to existing customers and telling new ones to look elsewhere.
"I’ve been burning coal for 20 years, and this is the first year I’ve had any trouble getting it," said George Watts, 68, of Dillsburg, who uses coal in his home and business.
The culprit is lack of production. Most coal for home heating comes from underground mines, and the number of working anthracite mines is steadily dwindling.
Miners say it’s getting harder to earn a living because of the increased cost of worker’s compensation insurance, along with stagnant coal prices. But most of their ire is directed at the federal mine inspectors who they say are hassling them out of existence. It is a long-running battle that’s resulted in the closure of scores of mines.
The shortage potentially affects thousands of homeowners who still heat with anthracite, a hard coal that is mined only in eastern Pennsylvania. Some worry that if the shortage persists, they’ll have to convert to a more expensive kind of heat, like oil or gas.
Candice Craig has more basic concerns.
Craig’s coal hopper was nearly empty a few weeks ago, and with the Northeast in a deep freeze, she worried about keeping her 2-year-old daughter warm. The yard where Craig usually buys her coal said it had none to sell her. Other retailers also turned her down.
Craig finally found a retailer willing to sell her a tiny size of anthracite called undersized rice, which is used up more quickly than the larger size she typically gets. She burned through nearly $200 worth of coal in two weeks, straining the household budget.
"You wonder how they can have a shortage," Craig said. "We are the coal capital of Pennsylvania and there is no coal here."
Evidence of a shortage is, so far, anecdotal; the Pennsylvania Department of Environmental Protection has not yet released 2004 production statistics, let alone figures for January and February. But wholesalers, retailers, miners and consumers alike say there’s not enough.
"There are still some folks who are heating their homes with coal and they are having a hard time purchasing the product," said Paul Hummel, chief of the state Bureau of Deep Mine Safety.
In Schuylkill County, about 70 miles northwest of Philadelphia and the epicenter of the anthracite industry, coal processors say they are churning out far less than normal. Some have shuttered completely on days when there was not enough coal to start the plant. Delivery trucks line up six or eight at a time and wait hours for their loads.
Coal taken from strip mines is readily available, but the recovery rate, or percentage of usable coal extracted from each ton of raw material, is a lot lower than it is for coal taken from deep mines. That’s because there is a lot more dirt and rock mixed in. And that means less coal processed during an eight-hour shift.
The problem is largely confined to Pennsylvania, home to nine of the 10 counties with the highest percentage of households using coal for heating, according to census data. In Schuylkill County, more than 13 percent, or nearly 8,000 households, still heat with coal.
DiRenzo Coal Co., a 72-year-old family-run processing plant that sells directly to the public, has been giving priority to customers who rely on coal as their sole source of heat. But general manager Mike DiRenzo said it’s tough to tell whether people are being truthful.
"It is a juggling act that no one wants to deal with. It shouldn’t be like this in Pennsylvania, especially right in the middle of the coal field," said DiRenzo, whose company is processing 75 percent less coal than normal.
At Pine Creek Coal Company, the phones rings constantly with homeowners saying they are running out. "I’m not taking any new customers at this point. I can barely supply the customers I have," said Robert J. Klinger, whose grandfather started the business.
With demand this healthy, why not simply boost production?
Although economic conditions play a big role, miners are quick to blame the U.S. Mine Safety and Health Administration, whose inspectors have been citing anthracite mines with increased frequency.
Miners say the federal law dealing with mine safety is geared toward bituminous coal, a softer coal that is mined in over half the country and fuels most of the nation’s coal-fired power plants. Because of the differences between bituminous mining and anthracite mining, Pennsylvania has two separate mine safety laws, one for each type.
MSHA began stepping up enforcement of the federal law after a new management team from the bituminous coal fields was installed in the agency’s Wilkes-Barre office. Federal violations shot up 60 percent from 2000 to 2003 before dipping slightly in 2004, and many underground mine operators left the business. Violations issued by state inspectors went down each of those years before ticking up in 2004.
"Our own government is stabbing us in the back and putting us out of business, and we’re not big enough for people to care," said Larry Graver, 42, a fifth-generation coal miner who left the mines to work at a processing plant.
Cindy Rothermel, who operates an underground mine with her husband, Randy, compared the lines at coal processing plants to those at gas stations during the 1970s energy crisis. She said she gets six to 10 calls a day from homeowners seeking to buy coal directly from them.
"Folks are getting frozen pipes," she said. "It all boils down to MSHA closing the mines."
John Correll, deputy assistant secretary of MSHA, said in a statement that regulatory enforcement has helped drive down fatalities throughout the industry.
Still, MSHA sent a top official to meet with U.S. Rep Tim Holden and miners earlier this month. Holden, D-Pa., said he received assurances that MSHA would be more "consumer-friendly."
"I’ve heard those promises before," Holden said, "and they haven’t happened."
Anthracite coal burns very hot and almost smokeless. A VERY good and environmentally friendly alternative fuel. The USA should be developing it...
If they've got a shortage, why don't they just raise the price and pay these miners a fair wage? Why ration? Looks like socialism has come to PA.
Pretty hard to believe. I live close to there. My basement is full of coal (switched to gas). I've been trying to get rid of the stuff for three years. Can't give it away. Nobody wants it.
I am right south of Skuykill county. Lots of people still burn coal out here.
Wood is still an option for many. Most coal stoves also burn wood. Wonder if these people need to get a new stove or start chopping.
There's gold in them thar bins!
You know - if there is such a shortage, and the price for that coal follows the normal supply/demand cycle, it might just be cheaper for consumers (in the long run) to convert to other heating methods (wood pellet, natural gas, propane, etc.).
I find it difficult to believe that the price isn't supportive of the industry - especially in a shortage-type market.
I suspect they won't develope it because of the reluctance of big energy business to deal with it....
That's a good sign of government intervention:
You have an over-supply of something -- but can't find any to buy. The market does an excellent job of handling such situations (if you let it).
Would normally agree, but it appears that for some reason, they aren't letting the price adjust with the market. Otherwise, they would not be talking about rationing.
I could understand it if the price were regulated. Then they'd have no choice. I don't understand the logic of fixing your price at a low level though, if you don't have to--particularly when you are having difficulty paying your miners the market wage.
The problem, I think, is that the regulators have regulated the industry to death. There are very few operating mines left, and that means they don't have any competition to worry about. They can pretty much do what they want, and they choose to do this non-competitive type of behavior.
Read the article again and then a couple of good books on Economics and Regulation and the effects re Supply and Demand. You could then answer your own ?.
Huh? Where did "fair wage" come from? The article blames stricter inspections as the problem, and questions whether the rules being enforced really apply. So why give the employees a raise to fix the problem? [You're a NEA negotiator, arent't you :) ] Just guessing, but the price hike to address the "problem" would be more than the market would bear, hence companies choose not to produce and lose more money.
Companies, not government, rations coal by favoring their existing customer base. That's capitalism, not socialism. They favor the customer who has shown a propensity to come back. They are thinking of the long haul and not churning an immediate windfall.
That some companies give preference to those heating their homes is also a good business practice - don't force them to convert and therefore lose a customer permanently and don't let a situation develop where the gubermint steps in and imposes their idea of fair.
LOL! I bet if I hung an ad on the local supermarket bulletin board, "Free Gold" I'd get some attention. "Free Coal" never got me any.
Federal mine inspectors are closing mines in Pennsylvania which sits atop the fuel people use to heat their homes. They are going to be forced to convert to other forms of energy that is imported. Pennsylvania voted dem. That is, they voted for more government. Is there something wrong here?
My dad still uses coal and doesn't have any problem getting it in Ashland, PA. There's plenty of it still being mined in that area. Dillsburg is south of Harrisburg which is a bit south of where most of it is mined, maybe that is what is causing the problem. In any event I'll tell dad to set the thermostat lower so the stoker doesn't run as much, maybe that will leave enough for everyone else (and he won't have to fill the hopper as often or shovel as many ashes).
"Miners say it’s getting harder to earn a living because of the increased cost of worker’s compensation insurance"
I don't care whether you call it a "fair wage" or a "market wage." You've got to pay the workers a market wage, or you can't stay in business. It's pretty well known that mining is not a well paid job--the pay does not justify the hazards for most.
The article talks about "stagnant coal prices," yet they are rationing because they've fixed the price too low for their existing customers. It makes no sense from a business standpoint. Inspectors don't fix the price of coal. You'd think that if the inspectors were causing an increase in their costs, then that would be but one more reason they'd want to increase their price to what the market would bear.
I believe the word miners in that sentence means mine operators and not the diggers. The earn a living means make a profit.
Wood is an alternative fuel if you burn your coal in a stove, but I grew up in a coal-heated house in PA, and I don't think filling the coal bin which fed the furnace with an electrically drive screw-feed with wood chips would have been an option.
Do these people live in houses that have only a coal burning heat system with no back-up such as an oil/gas/electric furnace or electric baseboard system?
I'm suprised if they don't because I know of no lender's who would finance a house without a heating system that could operate independent of the owner's daily maintenance.
Possibly, but I suspect that the thing not mentioned by this article is that many of these mines are now owned by the workers.
The problem, I think, is that these guys need a little more training in economics and business.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.