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.
Yep, I was thinking about stoves. Many people out here I know use them.
I'll second the government regulations killing the industry. But these people have to realize that their houses were built when strip mining was king. You basically can't cut down a tree to mine coal anymore. And I'll also second the "they voted Dem" so it's their own fault. They want their cake and to eat it too. It rarely works out that way. Schuylkill county is is about 50% retired folks. These are the same people who worked their entire lives in AMERICAN owned manufacturing businesses, and now go to the Wal-mart in St. Clair and pass up anything made in America to pay $.10 less for something made in China. You reap what you sow.
If you want to understand the thinking of folks in the Anthrocite coal region of PA, do a google search and read what the citizens of Tamaqua to Summit Hill think about the LCNs plan to deal with the pit. Makes for some good reading.
Tom (Carbon County PA)
Not sure of any statistics on this (number of homes using coal as primary heating source). Up until the middle of the 20th century, coal was THE energy source for most homes here. Anthracite burns so hot, you would oftentimes have to open your windows in the winter, because of the heat generated by the furnace! However, since the industry died off, many switched to oil, gas, or electricity. There has been a recent comeback of coal, first as a backup, and now, some are actually converting over to coal stoves that heat the whole house. They are pretty much automated (at least the feed is, as well as blower motors to disperse the heat), although you still have to empty the ashes.
Altough you are talking about "strip pits", my father in law had worked for several months on a project near Scranton, where they would pour MILLIONS of lbs of cement down an old mine shaft to fill it in. It was essentially a bottomless pit. Talk about a money pit...
All of that is very interesting, but it still doesn't explain why the mine owners are selling the coal to their existing customers at cut-rates, and forcing other potential customers to go elsewhere and pay prices several times higher. Any reasonable businessman would solve all of his problems by increasing the price of his coal to a level where the market clears. He would generate more revenue, he'd be able to pay more for workers comp, he'd have more money to deal with the regulations, he'd be able to pay his workers more, and he'd make a higher profit on top of it. Sitting around and moaning about all the government imposed regulations seems like wasted effort when you can simply increase your prices to cover it.
And they complain about weak coal pricing, but they've got a shortage. It makes no sense.
Actually, it is east of Rt 209 North of Tamaqua. I don't think it is visable from 209. There are lots o pits in the area, as you head south on 209 between Lansford and Coaldale off to the right is a big one.
check out this link if you havent already, the DEP site which has maps of the location http://www.dep.state.pa.us/dep/deputate/minres/districts/homepage/pottsville/springdale%20pit/springdale%20home.htm
Tom
The number of closed mines would have that effect too. Duhhh.
I see one hell of a barbeque. When I was a kid growing up in Queens in the 1950's our house and lots of our neighbors heated with coal. We had a room in the basement which was the coal bin. The coal truck used to deliver - it didn't fit in the driveway, the driver would fill a large wooden barrel and roll it down the driveway and pour in into a shute placed in the window of the room that was a coal bin. If you ran short between deliveries, there was a little man who ran a stand on the corner where you could get a bucket of bituminous or anthracite for about a quarter. I believe that the anthracite cost more.
If you dug more than a few feet anyplace in our yard you'd hit coal ash. The house was built on what was probably landfill - it was barely above sea level, if at all. (Storm sewers were pumped.)
I don't miss those days at all.
Yes, but it does not explain why their prices are low. You'd think it'd increase prices, particularly with a shortage.
A friend of mine uses coal and has had no problems getting it delivered from his supplier in Palmerton. I was in a stove store in Tamaqua last December and they were telling me that they would not ship coal to any new customers.
I really don't understand the problem either.
Tom
PS, I use a wood stove to supplement Oil heat. I also live 10 miles from the coal mines.
Is the price regulated? If so, then I could understand it. If not, you'd think that the price would rise to clear the market.
I am sure there are some who would say that the suppliers are conspiring to "create" the shortage. But even that doesn't make sense unless they are going to raise their prices. Conspirators don't benefit from shortages as such. They only benefit from a shortage if it results in higher prices.
The only other explanation I've got is that the suppliers simply don't know what they are doing. Maybe they are afraid to raise their prices because they fear the government will come down on them. So they just keep them low, and let the shortage develop. But that kind of behavior only happens if there is a thin market. Apparently, there are only a few mines left, so I suppose that's a possibility.
The suppliers are controlling the shortage.
But what do they get out of it, if they aren't raising their prices to their existing customers, and they aren't taking on new customers?
By suppliers, do you mean the distributors or the mine operators themselves or both?
Maintenace of their distributorships, most likely.
I live close to there also and i do want that coal :)
I don't follow that. I speculate that what's really going on here is something that's a problem in a lot of other semi-competitive industries. It's not so much that these guys are trying to shaft the consumer. It's more that they are in an industry with only a few suppliers, and so, they can get away with incompetence and bad business practices, and won't be driven out of business by tougher competitors.
It's not good business to keep prices artificially low. It makes no sense that they'd want to keep them artificially low, but they apparently don't see much advantage to increasing them to eliminate the over-supply. Maybe they are afraid that they will be made targets by politicians if they do that. Maybe they are just too whimpy to take the heat from irate customers.
- 1903 ad for the Delaware, Lackawanna & Western Railroad
As I said before, I don't know whats going on. With all respect due the Old Prof., His explanation doesn't do it for me.
I will say this, what remains of the once mighty LC&N (Lehigh Coal and Navigation Co.) teeters on the brink of Chapter 7. This company has been in bankrupty court before. The President of LCN says that he would like to hire more miners and open up a few mines but can't until he gets started with the filling of the Springdale Pit.
Ture or not I can't say but the company is behind on it's school tax payments and risks loosing property because of this default. Is this a game by LCN or is the company really in trouble? I think it is in trouble but hey--- I'm only human.
My feeling is, figure out a way to reclame the old mines now, and start digging out new ones. I do not understand the thinking of the locals. The open pits (as an example) along Rt 209 in the Summit Hill area are big time eyesores. I would never live there and I don't understand why the residents are putting up so much road blocks to having them filled in.
The area is not exactly a economic hot spot. Set the price so that the coal companies can make some money and hire some miners.
You say, "Set the price..." But there is no reason why they can't charge whatever price they want, is there? Why they charge low prices, while some consumers are paying high prices or can't buy the stuff at all at any price, I can't fathom.
The only way that this behavior makes sense to me is if the price is regulated. But apparently it is not since some people are paying outrageous prices due to the shortage. Or maybe there is some law that you can't cut off an existing customer...
Precisely what are they doing wrong, though? It can't just be the inspections. That would drive up the price, but it would not created a shortage. For some reason, the price is not adjusting. Is there price regulations, or something?
My attitude is, the coal is there, get it out, fix the land after mining it, provide jobs and make money. If you look at the condition of some of the patch towns in Anthrocite county, you will wonder anyone would want to live there and you will wander why all of the residents are not crying in mass for the coal companies to start digging.
Here you don't have to dig at all. The bare spots in my flower garden, on a dry day, look like an ash dump. Sickly, dull gray color. I'm from Jersey and I find it hard to understand how anything can grow in this stuff---it is the color of a bad road in Jersey.
Not far from here is Centralia, where an underground mine has been burning since the 1960's. Very creepy place to drive through. Deserted. A sorrier place (outside of Starnesville in Atlas Shrugged) doesn't exist.
Coal. Wish I could give it to you, rottweiller, but I feel a little spooked about mixing internet and real life. Did it once and it turned out badly.
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