Daily Independent (Ashland, KY)

Editorials

August 9, 2013

A new threat

Environmental groups file suit to block export of coal

ASHLAND — With coal mining declining in the United States, coal companies in Appalachia have looked to foreign markets as a way to offset the decline in domestic demand for coal.

But environmental activists who have successfully hampered domestic coal production are suing the federal government over the exports of Appalachian coal, saying it approved a $90 million loan guarantee to one company without considering the implications for air and water pollution. The first-of-its-kind lawsuit filed in U.S. District Court in San Francisco says communities near mines, ports and railways that connect them are all affected.

The lawsuit says the U.S. Export-Import Bank failed to review the environmental impacts as required under the National Environmental Policy Act when it provided a $90 million loan guarantee last year to Xcoal Energy & Resources. Xcoal is shipping from ports in Baltimore and Norfolk, Va., to Japan, South Korea, China and Italy.

Just a year ago — on Aug. 15, 2012, to be precise — Gov. Steve Beshear announced a cooperative arrangement between coal companies and India could lead to the re-employment of some laid-off miners suffering from the downturn in the domestic coal market.

On the day India observes its independence as a sovereign country, Beshear announced New Jersey-based FJS Energy has signed a 25-year, $7 billion contract with India’s Abhijeet Group to purchase coal from Kentucky and West Virginia through Kentucky-based affiliates FJSE Marshall and FJSE River Coal.

“We think we’re going to be able to re-employ some people in eastern Kentucky,” said Jim Booth of Booth Energy based in Inez. “Three years ago my company was mining 8 million tons and today we’re mining 6 million tons. So we’re very excited about this.”

Dr. M.P. Narayanan, FJS Energy board chairman and former chairman of Coal India, said even though India is the world’s third-largest coal producer, it must still import coal for its exploding population and energy needs from Indonesia, South Africa and Australia.

“Not only we are going to get coal from you,” Narayanan told Beshear at a Capitol news conference last August, “we are getting clean coal.” He didn’t explain why Kentucky’s coal is cleaner. Kentucky coal companies are expected to export about 9 million tons a year to India through the agreement.

Beshear said state government had no role in negotiating the cooperative agreement, but hailed the deal as a “great example of a new market for Kentucky resources.”

State Rep. Keith Hall, D-Phelps, was credited by Booth and Beshear for “relentlessly” working to bring the Kentucky coal producers and FJS together during the past year. Hall, from Kentucky’s largest coal-producing county of Pike, said the coal market “has died a slow death in America and we had to go international.”

While the suit filed in San Francisco does not specifically mention the deal with India, if successful it threatens to put a damper on coal exports and that will cost jobs in the coalfields of Kentucky. We do not profess to have the expertise to judge the merits of the lawsuit, but we do know if the environmental groups get what they want, it will be another huge blow to coal mining in the mountains, and that alone makes the lawsuit worth watching.

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