On Thursday, US coal producer Arch Coal announced that it is laying off 750 of its workers. In a statement released on the company’s web site, Arch president and CEO John W. Eaves cites a pair of reasons for the layoffs.
“Current market pressures and a challenging regulatory environment have pushed coal consumption in the United States to a 20-year low,” said Eaves. “In response, we had previously streamlined capital spending, idled equipment and reduced shift work. We now are taking further steps to enhance our competitive cost position in Appalachia, while increasingly shifting our portfolio in the region toward higher-margin metallurgical coal operations.” Emphasis added. The Arch statement describes the company as “a top five global coal producer and marketer, with 157 million tons of coal sold in 2011. Arch is the most diversified American coal company, with active mining complexes across every major U.S. coal supply basin. Its core business is supplying cleaner-burning, low-sulfur thermal and metallurgical coal to power generators and steel manufacturers on five continents.”
As this blog and others have chronicled, the Obama administration is waging a war on coal production and use via the Environmental Protection Agency. The agency has piled onerous regulations onto the coal industry, which produces about one-fifth of America’s total energy and half of the electric power in the United States. Most recently, EPA Region 1 administrator Curt Spalding admitted that the EPA would like to tell coal producing communities to “go away,” but it cannot and is regulating them out of existence. The Obama campaign left coal entirely out of its energy strategy until the omission gained notice and earned the campaign widespread ridicule. The president himself came into office offering a regulatory policy that would bankrupt coal power plants. His policies have been directly blamed for Arch Coal’s layoffs.
Arch’s layoffs are bad news for an administration already facing a foundering economy and a revolt from Democrats in coal-producing states. Several have already announced plans to skip the Democratic National Convention this summer. The president needs Rust Belt states like Ohio to win re-election, and Democrats in those states may find the need to distance themselves from the president and his coal policies.