Coal Fights Obama with NASCAR, YouTube Campaigns
From NASCAR and YouTube to campaign donations and Washington lobbyists, coal supporters are embracing an all-of-the-above strategy to defend the industry against what they consider regulatory overreach in Washington.
While President Barack Obama has said he supports energy development of all kinds, he didn’t mention coal during his State of the Union address or during a four-state, two-day tour promoting his policies, an omission the industry took as a slight. Worse still in the eyes of coal backers are a series of regulations related to air pollution and mountaintop mining.
“We’re fighting for coal,” said Lisa Camooso Miller, a spokeswoman for the American Coalition of Clean Coal Electricity, a trade group that has announced a $40 million campaign in defense of coal.
Underlying the debate is unease in the industry that coal is losing its place as the fuel of choice for U.S. electric generation. Once responsible for more than half of electricity generation, coal’s share was down to just over 40 percent in 2011 as natural gas use increased.
The association’s members are “exceptionally disappointed in the policies of this administration with respect to coal,” Luke Popovich, a spokesman for the group, said in an interview.
Much of the industry’s focus has been in Washington and a so-far unsuccessful effort to push legislation to block regulations proposed by the Environmental Protection Agency.
The focus now will probably shift to the the presidential campaign where energy has already been a major theme for candidates.
Industry executives and employees have already spent more on political donations than they did in 2008, the last presidential election year, according to the Center for Responsive Politics, a Washington-based group that tracks lobbying and campaign spending.
The American Coalition for Clean Coal Electricity, whose members include Peabody Energy Corp. (BTU) in St. Louis and Southern Co. (SO) in Atlanta, is trying to reach voters with its campaign to promote coal and warn about the economic impact of the EPA’s rules.
Last month it announced it would sponsor Dale Earnhardt Jr.’s JR Motorsports team. An 18-wheel, mobile classroom will also be featured at NASCAR events to showcase the benefits of the fossil fuel, said Miller, the group’s spokeswoman, in an interview.
Meanwhile, the American Energy Alliance, which spent $3.6 million on a campaign targeting Obama on gasoline prices, produced a 4 1/2 minute long YouTube video describing the economic risks to Craig, Colorado, presented by state and federal policies that would limit coal use.
Coal’s complaints play into the Republican narrative that Obama administration regulations are hurting the economy.
“There is some risk, and it tends to be localized and concentrated,” he said in an e-mail, referring to the EPA regulations.
Mitt Romney, the likely Republican presidential nominee, has stressed his support of coal, including during a May 3 speech in Portsmouth, Virginia, when he accused Obama of making it “harder to mine for coal.”
Some of the EPA’s rules, such as the first-ever limits on mercury emissions, may have broad support among voters, said Meredith Bandy, an analyst with BMO Capital Markets in Denver, in an interview. Mercury exposure can impair childhood development.
“It’s fairly well-established that mercury is not healthy,” she said.
Coal is also a leading source of carbon dioxide, a greenhouse gas tied to climate change.
The EPA says its regulations, some of which come in response to court orders, will save lives by cutting air pollution and create jobs by requiring utilities to retrofit coal plants.
Obama has said he supports an all-of-the-above approach to energy development that creates jobs and protects the environment.
“Since taking office the president has made clear that we need to leverage a range of domestic resources to meet our energy needs, including oil and natural gas, nuclear power, renewable energy sources like wind and solar, as well as clean coal,” said Clark Stevens, a spokesman for the White House, in an e-mail.
Coal political action committees and industry executives and employees have spent more than $5 million on political donations, about 87 percent to Republicans, according to the Center for Responsive Politics.
Executives and workers at Alliance Resource Partners (ARLP) in Tulsa, Oklahoma, have given almost $1.4 million, including a $500,000 check Chief Executive Officer Joseph Craft wrote to Restore our Future, a pro-Romney political action committee.
Employees and executives at Alpha Natural Resources Inc. in Bristol, Virginia, have given more than $751,000. Workers at Murray Energy Corp. in Pepper Pike, Ohio, have donated more than $631,000.
Executives at the companies didn’t return calls seeking comment.
In Washington, coal lobbyists have tried without success to stop or delay what they consider to be anti-coal regulations.
The latest effort is a congressional resolution that would block the EPA’s rule limiting emissions of mercury and toxic gases. Senator James Inhofe, an Oklahoma Republican and the sponsor of the resolution, believes the regulation will “kill coal,” said Matt Dempsey, his spokesman, in an interview.
Inhofe may seek a vote later this month or in June, he said. Obama would likely veto the resolution, if it passed the Democratic-controlled Senate and House led by Republicans.
Domestic coal consumption during the fourth quarter of 2011 fell by 18.8 percent from the previous three months, to 227.1 million short tons, according to the Energy Information Administration, which tracks and analyzes energy data for the U.S. The total was the lowest level since the second quarter of 1995.
More than 90 percent of U.S. coal production is used to generate electricity.
While exports have risen, coal companies have been battered in the stock market. Alpha Natural Resources (ANR) stock price has fallen to under $15 a share, from about $53 a year ago. Peabody’s shares have dropped to under $30 from more than $60 last year.
Bandy, the BMO analyst, said that while greenhouse gas, clear-air and other regulations can have a negative impact on coal, market forces are the bigger threat.
“Low natural gas is so much more negative that I’m not sure it matters that much,” Bandy said, referring to the upcoming election.
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