TOP OF 2013 — Murray Buys Consol Mines
EDITOR’S NOTE: The past 12 months have been interesting – and at times, trying – for local residents, as natural gas drilling, politics, court cases and numerous other issues dominated the daily headlines. Through Sunday, The Intelligencer and Wheeling News-Register present the Ohio Valley’s top 10 stories of 2013, as voted on by the newspapers’ editors.
ST. CLAIRSVILLE – When 2013 began, thousands of Consol Energy coal miners and retirees likely never thought the company would sell five West Virginia mines to Murray Energy Corp. for $3.5 billion.
As the year comes to a close, Murray officials are preparing to change the logo on the Shoemaker mine coal silo along W.Va. 2 in Benwood to rename it the “Ohio County Coal Co.’s Ohio County Mine,” in a reflection that Murray is now the owner. The St. Clairsville-based mining company will also rename the McElroy mine the “Marshall County Coal Co.’s Marshall County Mine.”
In October, Consol officials announced they would sell the McElroy and Shoemaker mines in Marshall County, the Robinson Run and Loveridge mines in Marion County and the Blacksville No. 2 Mine that straddles the Monongalia County-Greene County, Pa., line to Murray Energy, which already operates the Century Mine near Beallsville and the Powhatan No. 6 mine near Alledonia. The deal became official early this month.
“For comparison purposes, Murray will go from 30 million tons per year to almost 60 million tons per year,” said Christopher Bise, chairman of the Robert E. Murray Department of Mining Engineering at West Virginia University.
Robert E. Murray, founder and CEO of Murray Energy, spent much of 2012 and 2013 vowing that President Obama and Congressional Democrats are waging a “War on Coal.”
“We are observing, with every passing day, that the destructive regulatory actions of President Barack Obama, his appointed cabinet bureaucrats, and his supporters in the Congress are accelerating, not declining. Nothing has been done to even slow them down, let alone stop them,” Murray told those at the Bluefield Coal Show in September.
Certainly, new Environmental Protection Agency regulations designed to curb carbon emissions are prompting the closure of several coal-fired power plants throughout Appalachia. This, Murray believes, will erode much of his domestic customer base in the coming years.
However, Thomas Morrison, associate vice president of Wheeling-based financial firm Hazlett, Burt & Watson, said spiking energy demands in Asian cities such as Beijing and New Delhi should keep the coal market viable.
Future for Murray
By completing the deal this month, Murray and its subsidiaries now employ about 7,100 people in 13 active coal mines across the nation. Murray will join Peabody Energy, Arch Coal, Alpha Natural Resources and Cloud Peak Energy as one of the top five coal producers in the nation, according to the U.S. Energy Information Administration. Adding the five West Virginia Consol mines should allow Murray production to reach nearly 60 million tons of coal per year.
“Indeed, the mines need to become more productive, in terms of tons produced per employee hour worked, to ensure their continued operation and the continuity of the thousands of jobs they provide,” Robert Murray said. “We will work together with all of Murray American Energy Inc.’s new employees to make this happen.”
In addition to changing the names of Shoemaker and McElroy, the Loveridge mine will now be the “Marion County Coal Co.’s Marion County Mine;” the Robinson Run mine will be “The Harrison County Coal Co.’s Harrison County Mine;” and the Blacksville mine will be renamed the “Monongalia County Coal Co.’s Monongalia County Mine.”
Phil Smith, spokesman for the United Mine Workers of America, has said the union has no comment on the deal. All five of these former Consol mines feature UMWA representation. Prior to this acquisition, only the Murray workers at Powhatan No. 6 had union representation.
“The focus at Murray Energy is on operating very safe coal mines, with a particular emphasis on fire protection and emergency preparedness. The health and safety of all of our employees is foremost,” Murray officials stated in announcing the deal.
Future for Consol
Even prior to selling these five Mountain State mines, Consol has been shifting its growth focus from coal to natural gas to comply with environmental regulation trends over the past two years. The Pittsburgh-based company plans to use the proceeds gained from the sale to fund its Marcellus and Utica shale well drilling program.
Under the CNX Gas Corp. subsidiary, Consol has active drilling operations in Marshall and Wetzel counties, while Consol works with Hess Corp. to drill wells in eastern Ohio. Consol also plans to start drilling 47 Marcellus Shale wells on the Pittsburgh International Airport property by July, according to the agreement with the Allegheny County Airport Authority.
“The completion of this complex transaction this year enables us to enter 2014 with our focus of achieving our gas growth production targets of 210225 billion cubic feet equivalent for 2014,” said Consol Chairman and CEO J. Brett Harvey.