West Virginia coal company, Alpha Natural Resources, told 1,1000 workers to prepare for layoffs because 11 mines across the state are “subject to being idled.”
The reason: weak market conditions and Environmental Protection Agency regulations, the company said.
The company notified the 1,100 employees late Thursday that “sustained weak market conditions and government regulations have challenged the entire Central Appalachian mining industry.”
The layoffs would not take place till mid-October, Alpha said.
“EPA regulations are at least partly responsible for more than 360 coal-fired electric generating units in the U.S. closing or switching to natural gas. Nearly one of every five existing coal-fired power plants is closing or converting to other fuel sources, and Central Appalachian coal has been the biggest loser from EPA’s actions,” Alpha Natural Resources said in a statement.
Alpha said the EPA’s new carbon pollution standards for existing power plants are expected to, on their own, “take more coal-fired power generation offline next year than in the previous three years combined” once finalized.
The EPA rules require states to cut carbon dioxide emissions from existing power plants 30 percent by 2030 from 2005 levels.
While Alpha faults the proposed regulations for the downward spiral, it places equal blame on the low prices and competition with natural gas.
The price of coal shipped to overseas power plants is hovering at four-year low due to the excess supply of coal worldwide. The drop in overseas coal demand and low prices contributed to the layoffs, the company said.
With natural gas on the market as an alternate fuel, coal has steadily been replaced by the cheaper fuel. Alpha cited it as a “major contributor” to the erosion in the demand for coal.
Alpha President Paul Vining painted a picture of the industry that indicated it has been downsizing over the past three years, well before the EPA said it planned to require plants cut carbon pollution.
“Altogether we’ve idled about 35 million tons of coal production in just three years, primarily operations with the highest cash costs,” Vining said. “The result has been an improved cost structure, which bolsters our competitiveness in the face of challenging market conditions.”
EPA chief Gina McCarthy has said the new regulations, which the agency aims to finalize by summer of 2015, allow each state to pick and choose a carbon cutting design of their making. If a state wants to invest in its coal plants and make them cleaner, McCarthy said, they will be able to do so.
EPA spokeswoman Liz Purchia said, even with the new rules on carbon pollution from existing power plants, coal will make up a third of the nation’s energy supply.
Puchia added that the EPA’s proposal does not “mandate” states retire any coal plants.
“The truth is that the decline in coal jobs began well before President Obama took office, largely as a result of market forces, including greater energy efficiency and cheap natural gas,” Purchia said. “That’s also because of aging equipment — the average coal plant in the U.S. is 42 years old.”
The new rules were the center of a growing battle this week on Capitol Hill, as the EPA held its public hearings on its proposal across the country.
Companies, environmentalists and the general public will have until Oct. 16, to submit comments on the rules, which are a central piece of President Obama’s climate change legacy.