Can West Virginia’s New Governor Save Coal Country?
After an election year full of populism and promises of more jobs, the test case is Trump’s landslide state.
Jim Justice—6 feet 7 inches, 375 pounds, rumpled in the extreme—has the friendly, shambling demeanor of a high school basketball coach, which he’s been for decades. He’s also the richest man in West Virginia, with holdings in coal, timber, and tourism. This year he decided to run for governor—his second race for political office after a successful bid 17 years ago for a county school board seat. He ran as a Democrat, but kept his distance from Hillary Clinton and boasted of his friendship with Donald Trump. Justice and Trump have similarities beyond their reputations as iconoclastic billionaires: Both own real estate that’s part of an intricate web of businesses run with assistance from adult children. Both refused to disclose their tax returns. And both vowed they’d somehow revive West Virginia’s slumping coal industry.
At a typically raucous rally in May in Charleston, the state capital, Trump donned a white miner’s helmet and told an audience filled with men who wear such headgear in real life: “Get ready, because you’re going to be working your asses off!” In a radio interview around the same time, Justice said miners would soon be producing “more coal in West Virginia than has ever been mined before.”
Then, in the final days before the November election, Justice did what only an actual coal baron could do: He announced he’d reopen four small mines in economically devastated southern West Virginia and resuscitate 375 jobs. “It makes me feel so good just to see our people get their dinner buckets and get back to work,” he told local reporters on Nov. 4. His outmaneuvered opponent, Republican Bill Cole, the state Senate president, accused Justice of using a ploy “just to gain votes,” as if that weren’t obvious. “Any new coal mining job is good for West Virginia and the families employed,” Cole had to admit, before he accused Justice of cutting corners on safety and stiffing the state on coal taxes. “But Jim Justice has proven he can’t be trusted.”
On Nov. 8, Justice beat Cole 49 percent to 42 percent, even as Trump crushed Clinton in West Virginia 69 to 27. A larger percentage of voters supported Trump here than in any other state.
If Trump is going to “make America great again,” one of his biggest challenges will be West Virginia (population 1.8 million), and his necessary ally will be Justice. The state is starting from rock bottom, or very near it, in a dismaying array of socioeconomic categories. Only 53 percent of its adults are working or looking for work, the lowest rate of labor force participation in the country, according to West Virginia University’s College of Business and Economics. The state’s per capita personal income of $36,758 ranks 49th; only Mississippi’s is lower. Out of all 50 states, West Virginia has the highest rates of diabetes, illegal drug deaths, heart disease, heart attacks, high blood pressure, and smoking. Justice acknowledged these woeful statistics in his election night victory speech: “We don’t have to be 50th,” he said, and then repeated: “We don’t have to be 50th. We’re too blooming good.”
To generate jobs and remedy these ills, Justice has a menu of colorful, if vaguely formulated, ideas. They range from promoting a distinctive state vegetable—he’d like agronomists at West Virginia University to come up with something comparable to Georgia’s Vidalia onion—to creating a “country theme park” modeled on Dolly Parton’s Dollywood in Tennessee. “We should explode with tourism,” he says with characteristic verve.
Justice’s commitment to coal, though, was the main plank in his platform, and it’s the one voters will remember, says Bill Bissett, the head of the Chamber of Commerce in Huntington and a member of Justice’s transition team. “He told a story that appeals to the entire Appalachian region, where coal once drove the economy and still makes people proud.”
Justice, 65, lacks the self-importance of a wealthy man and wants you to know it. “I’m not one who needs to sit on a throne or an ivory tower and look down on people,” he says in a down-home twang. “I’m just Jim, that’s worked hard and believes he’s been really blessed in lots of ways and has a great family and learned a lot of good stuff.” He appeals to many West Virginians “because he’s your pawpaw, with the white hair and the way he talks,” says Crystal Good, a Charleston marketing consultant who, nevertheless, voted for a third-party candidate for governor.
Justice coaches the girls’ varsity basketball team at Greenbrier East High School in Lewisburg—a small town rich in Civil War history—in the southeastern part of the state. He lives here with his wife, Cathy, in a remodeled ranch-style house. When we meet in late November, Justice informs me that his career coaching record stands at 999 wins, 204 losses. That night the Lady Spartans give him his 1,000th victory by clobbering Midland Trail 83–34. To the consternation of some in West Virginia, Justice insists he’s going to continue to coach even while serving as governor.
Justice keeps an office at the Greenbrier, a 710-room luxury golf resort he owns in nearby White Sulphur Springs. The closest coal mine (not one of Justice’s) is only a half-hour drive away, but the white-pillared Greenbrier, with its high ceilings and heavy drapery, feels like it’s on a different planet from blue-collar West Virginia. Presidents and tycoons have favored the retreat since the 19th century. It boasts a Cold War-era fallout shelter once designated to protect relocated members of Congress in case of nuclear war. Justice bought the hotel when it was losing $1 million a day in 2009. He brought back 600 laid-off workers and restored it to profitability. “As a kid, I looked at the Greenbrier like it was the Emerald City,” he says. “We couldn’t afford to come here.”
Not that the Justices were poor by the time Jim came along. His grandparents lived in coal camp housing without indoor plumbing, but his father, Jim Sr., went to college on a football scholarship and then managed mines owned by others, eventually forming his own coal company. Jim Jr. attended Marshall University in Huntington, where he captained the golf team and earned a bachelor’s and an MBA. His father had begun to diversify into corn, and in the late 1970s, Justice joined the family business to focus on expanding the farming operation into nearby states. When Jim Sr. died in 1993, Justice took over both the coal and agriculture companies, then branched out into Christmas tree farms, cotton gins, turf grass operations, golf courses, timber, and miscellaneous real estate projects.
In 2009, during a period when the coal market seemed relatively strong, Justice decided to cash in. He sold most of his holdings in metallurgical coal to a Russian company called Mechel for $568 million in cash and stock. (Broadly speaking, there are two types of coal: More abundant thermal coal is lower in carbon content and burned to produce electricity; metallurgical coal has less sulphur and phosphorus and can be transformed at high heat into a plastic, porous substance called coke, which when smelted with iron ore and limestone creates steel.) Almost immediately after his deal with Mechel, the bottom fell out of the met coal market. “It was upside down as it could possibly be,” Justice says, not bothering to disguise his dealmaker’s pleasure. But then Mechel began shutting mines and laying off miners. “Many of those people started their careers working for my dad,” Justice says.
Distressed by the layoffs and sensing the chance for another financial killing, he offered to take the shuttered mines off the Russians’ hands. “I bought [them] back for next to nothing,” he says. To be exact, six years after selling, he paid $5 million, or 1 percent of the earlier price, for the same properties—an indication of just how much coal had weakened in the interim. In a prepared statement about the repurchase that had the ring of someone getting ready to run for public office, Justice said in February 2015: “West Virginia coal miners have done the heavy lifting in our country for generations and generations. We are now prepared to build toward the future and increase jobs in southern West Virginia.”
Three months later, he declared his candidacy for governor, and on the eve of the Nov. 8 election, it was mines repurchased from the Russians that he announced he’d reopen.
“Jim Justice picked the right year to run as a Trumpesque candidate in West Virginia,” says Mike Stuart, a corporate lawyer in Charleston who chaired the Trump campaign in the state and backed Justice’s Republican opponent, Cole. “Like Trump, Justice didn’t show a lot of loyalty to his party, and many people find that refreshing,” he adds. In 2015, preparing for his gubernatorial run, Justice flipped his party registration from Republican to Democrat; he’s contributed to candidates in both parties. “Also like Trump,” Stuart says, “Justice has big dreams and makes them happen.” Since taking over the Greenbrier, Justice has brought an annual PGA golf tournament to the resort and built facilities to make it the summer training camp of the New Orleans Saints, his favorite NFL team. When southeastern West Virginia suffered biblical-scale rain and floods in June, he gave free shelter and food at the Greenbrier to 200 victims left homeless.
But for all his other activities, Justice is primarily associated, for good and ill, with his mines. He’s a medium-size producer by West Virginia standards, selling about 6 million tons of coal a year, most of it metallurgical. He also has coal operations in Virginia, Kentucky, South Carolina, Alabama, and Tennessee. Echoing years of media reports, Cole and other Republicans attacked Justice during the campaign for, in the words of state GOP Chairman Conrad Lucas, “racking up millions in fines and taxes that his [coal] companies have refused to pay.”
Justice is remarkably blasé on the topic. “I have a lot of tentacles, so if you’re looking for something, you’re going to find something. But you just got to remember, at the end of the rainbow, I take care of everything,” he says. “And I keep employing people and doing good stuff.” On Dec. 12 a federal judge in Roanoke, Va., approved a settlement between the U.S. Environmental Protection Agency and Justice’s mining company Southern Coal and its affiliates under which they’ll pay $900,000 in fines and spend about $5 million on upgrades to prevent water pollution. The agreement resolved numerous alleged Clean Water Act violations from 2009 to 2014.
Justice is similarly offhand when responding to questions about how he’ll insulate himself from potential conflicts of interest when he’s running the state government. He calls the notion that he could sell off his businesses and put the money in a blind trust “absolutely frivolous.” For one thing, there aren’t ready buyers for many of his diverse concerns. Instead, he says, his son, Jay, 35, already runs the coal and agricultural businesses and will continue to do so, while his daughter, Jill, a 31-year-old physician, serves as president of the Greenbrier. Justice says he’ll keep an eye on things, but from a distance. “Everything we do, we do as a family,” he explains. “We talk our businesses nonstop at our home all the time.” (In a subsequent e-mail, a spokesman said Justice will “follow the advice of experts to meet West Virginia rules on blind trusts.”) The governor-elect compares himself to the president-elect on the question of potential conflicts. Trump “doesn’t need an inside track to something that’s going to feather his bed or help him financially,” he says. “And Jim Justice doesn’t need anything from our state, nothing whatsoever.”
On Nov. 19, Justice put out a press release announcing he’d received a phone call from Trump during a Lady Spartans basketball practice. Justice said Trump asked him to tell West Virginians: “We are going to get those coal miners back to work.” In our conversation, Justice says he’s known Trump since 2009, when the New Yorker passed on making a bid for the Greenbrier. The two families have socialized; Trump’s son Eric has gone bird hunting in West Virginia with Justice. The incoming governor says he relishes having “a friend in the White House.”
He’s particularly eager for Trump to rein in the EPA, which Justice and many other people in West Virginia blame for waging a “war on coal.” The particulars of this alleged assault include enforcement of tough rules on stream purity and airborne toxins, grudging mine permit decisions, and the imposition of the Clean Power Plan to reduce carbon dioxide emissions from electric utilities. (Tied up in litigation, the CPP hasn’t gone into effect, and Trump has said he plans to kill it.) The EPA’s position is that it’s trying to minimize the unhealthy side effects of mining, such as acid runoff, and of burning coal for electricity, which is the nation’s leading source of the carbon dioxide emissions contributing to global warming. While it’s indisputable that regulation has lessened mining’s malign effects on the environment—creeks near mine sites typically don’t run yellow-orange anymore—Justice perceives pure malice on the EPA’s part: “Just a looking down your nose at coal in general and just trying to kill coal for the sake of killing it.”
If Trump calls off the EPA, Justice says, thermal coal used by power companies will be in heavier demand again. Metallurgical coal, meanwhile, will rally as economies in the U.S., China, and Europe heat up, leading to more steel production. He notes that met coal saw a price spike in 2016, in large part because China reduced output to curb overcapacity. Justice predicts that increased production in West Virginia will raise revenue from taxes—the very sort his foes say he’s failed to pay—“that may stanch the hole in the bucket.” That leaky bucket is the state budget, expected to face a $380 million shortfall during Justice’s first year in office, which begins on Jan. 16 with his inauguration.
In fact, coal production in West Virginia is moving in the opposite direction. It fell to 68 million tons last year from 158 million tons in 2008.
Utility executive Charles Patton burns coal for a living, but he’s less sanguine than Justice about the fuel’s future. “Our past as we know it is our past,” says the former president of Charleston-based Appalachian Power, who recently became an executive vice president at its parent company, American Electric Power. He sympathizes with out-of-work miners. “They want the good old days, but there’s not a path to the good old days,” he says.
Since 2007 coal demand has fallen in almost every state, Patton notes, as the twin technologies of horizontal drilling and hydraulic fracturing have driven a boom in natural gas production. Inexpensive gas and lower prices for wind and solar have led to the displacement of a lot of coal. Nationally, 50 percent of electricity came from burning coal in 2008; that figure has slipped to 31 percent, less than the rising share of natural gas, which has hit 36 percent. At Appalachian Power, which serves 1 million customers in West Virginia, Tennessee, and Virginia, coal provided 74 percent of electricity in 2012; last year, it was down to 61 percent.
The cost to build and operate a new natural gas plant is $57 per megawatt-hour, Patton says; the comparable figure for a coal plant is $95, or 67 percent more, in large part because of the cost of technology to curb air pollution. As a result, no one is building coal plants. And existing coal-fired plants are closing at a rapid clip: more than 240 nationally in the last six years alone, according to the Sierra Club. Burning natural gas releases half the amount of carbon dioxide into the atmosphere as coal; wind and solar power don’t emit carbon at all.
But employment in the coal industry, always arduous and often dangerous, began to decline decades before the shale gas boom. The reason was mechanization. Men with picks and shovels were replaced by machines. Nationally, the number of miners has plummeted from 250,000 in 1980 to 50,000 today. In West Virginia, which has the second-largest coal industry in the nation after Wyoming’s, only 12,000 people are working as miners, down from 56,000 in 1980. Many coal properties in the state are “mined out,” meaning that remaining seams are thinner and harder to get at and therefore more expensive to excavate. Appalachian miners have also lost market share to competitors in “Wyoming and Montana, where the coal is cleaner-burning and cheaper than in the East,” says Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin.
West Virginia’s economy has faced not only the contraction of the coal industry but also, beginning as far back as the 1970s, the atrophying of other industries, especially steel and industrial chemicals, both hit hard in the early stages of global competition. Extraction of coal and other natural resources accounts for 13 percent of West Virginia's $74 billion in gross domestic product. For a couple of decades, those losses were softened by the virtuoso pork-barrel skills of Democratic Senator Robert Byrd, whose name decorates many of the hospitals, highways, and government facilities he got built with federal dollars. But after serving for a half-century, Byrd died in 2010, and the West Virginia earmarking bonanza came to an end. Government remains the state’s biggest employer, accounting for 20 percent of the workforce; coal mining has shriveled to about 2 percent.
A ride through Wyoming County down into McDowell County, the poorest in the state, provides a depressing tour of abandoned underground mines, scarred landscapes where surface mining took place, and empty storefronts in barely functioning towns. Near some mine sites, left-behind equipment—bulldozers, dump trucks, and pieces of continuous mining machines (a sort of robot that chomps into veins of coal and spits chunks onto a conveyor belt)—sits exposed and rusting. That’s not the case, however, at NuFac Mining in Wyoming County, where I meet some of the supervisors starting to rehire laid-off workers for Justice’s reopening mines. Filling the jobs is easy, they say. There’s barely any other decent employment in this part of the state.
Robert Angles, 55, was out of work himself last summer and beginning to think he’d have to start his own business, though he wasn’t sure what sort of business it would be. Then he got the call from Justice’s operation. “We’re very blessed that Mr. Justice created these jobs,” he says. “It pays more than sitting at home.”
Angles is maintenance foreman for a group of four small mines where employees will earn as much as $24 an hour. On Tuesday, Nov. 8, he split his ticket, voting for the Republican Trump and the Democrat Justice. “Coal miners woke up that Wednesday morning with a sense of jubilation,” he says. He doesn’t necessarily believe Trump’s promises about defanging the EPA: “He’s just talking a lot of the time, saying whatever he thinks people want to hear.” Still, Angles hopes Trump is in earnest; like his colleagues, the foreman views almost any regulatory dictate from Washington as a job killer.
In contrast to his skepticism about Trump, Angles takes his employer at his word, saying Justice is a straight shooter: “If he sees a market for met coal, then I think we can have some hope.”
“We don’t have big companies here,” says Rick Helmandollar, 44, the superintendent of a Justice-owned coal processing plant also about to reopen. “Our roads are narrow,” he adds, “and we don’t have the infrastructure big companies are looking for. Coal is the backbone, and there’s nothing to replace it at this time.”
The area outside the low-slung entrance to the Pay Car mine in McDowell County remains cluttered with dismembered vehicles unused since the Russians shut the place four years ago. Randel Richmond, 64, a third-generation miner, will run Pay Car and expects to hire as many as 70 people. Others will get indirect employment—driving and repairing coal transport trucks, for example. “Restarting a mine is an expensive process upfront: pumping, cleaning, rock-dusting, ventilation, making sure the whole thing is secure,” Richmond says. “This isn’t easy coal. The seams are low, and we have to go deeper to get them. But that’s the coal business in West Virginia, and that’s what we do.”
Back at the Greenbrier, in a comfortable office decorated with photos of himself bird hunting, Justice allows that keeping his coal business running these last few years has been “financially the most difficult thing I’ve had to do.” He considered getting out. “It would have been easier, if you’re Jim Justice, to take the easy way out and declare bankruptcy, stiff the vendors, stiff the employees.” He stuck with coal—except when he sold to the Russians, of course—and he insists the future looks bright. “We really do have some hope and a pathway now,” the governor-elect says. “I’m really, really excited.”