Reference Library – USA – West Virginia
Coal has powered West Virginia s economy for centuries. Generations of West Virginians have come and gone in the Mountain State, and its stalwart blue-collar coal industry continuously attracts the next wave of young people in search of a career in the rolling hills of Appalachia. But the latest generation of West Virginia coal miners and the ones coming up behind them are faced with unprecedented uncertainty: do we have a future? The Environmental Protection Agency s severe regulatory enforcements on coal-fired power plants, combined with the evolution of natural gas as a less carbon intensive fuel generator sometimes referred to as a bridge fuel by environmental policy makers are threatening the viability of the Appalachia s most relied-upon resource.
Keith Burdette Secretary of Commerce West Virginia
Keith Burdette, Secretary of Commerce for West Virginia, has watched the state s economy develop throughout his lifetime. Burdette was elected to the West Virginia State Senate at only 27 years of age and named the President of the State Senate seven years later in 1989. Throughout the next two decades, he held various legislative positions while starting and managing his own consulting firm. Burdette is currently West Virginia s Secretary of Commerce, a role he assumed in 2010 after the election of Governor Earl Ray Tomblin. Secretary Burdette spoke to OAG360 from his office in Charleston, West Virginia, in this exclusive interview.
WEST VIRGINIA S COAL INDUSTRY
OAG360: Would it be fair to say that your state is being attacked, considering the effects that the Clean Power Plan will have on West Virginia s work force and overall economy?
BURDETTE: I don t get into the war on coal. I leave that to the other political leaders in the state. However, there are a multitude of issues that are creating challenges for coal. Federal regulations, no question about it, are placing a burden on the coal industry. The cheap pricing and abundance of natural gas is placing a burden on the coal industry. Remember, seven years ago we were trying to figure how to import natural gas. Now we ve got it coming out of our ears. In West Virginia, there are other dynamics. In the southern coal fields, the difficult topography makes it more expensive to mine. We end up competing against pit mining in the Midwest, which is actually cheaper to do.
West Virginia, Kentucky and Virginia Provided the Fuel that Powered the U.S.A. s Growth
I don t throw the blame at any one issue, but I think the Administration does need to consider that their changes in policy are creating a huge economic challenge in the coal fields, especially in Appalachia. It doesn t matter if you re from eastern Kentucky, Virginia or from southern West Virginia. These are all very topographically challenged areas that have provided coal to this country since before the Industrial Revolution, and has quite literally provided the fuel for this country s growth. Those southern coal fields have largely produced a one-item economy What exactly do you do with 100,000 people? These people have been in the coal business for multiple generations and have earned a great deal of money. Now we re trying to convince coal miners to retrain for other careers, because we re not going to need as many of those workers in the future, regardless of what happens with the EPA plan.
Coal Provided Six-Figure Incomes Straight out of High School, but those Livelihoods are Drifting Away
If you live in southern West Virginia and were willing to go underground and mine for coal, you could have earned six figures straight out of high school if you were willing to work overtime. So now we we re trying to convince them to go back to school, incur some debt, and then make half as much money as they used to. So it s not just an economic challenge, it s a cultural challenge too. Now, I do happen to believe that challenges present an opportunity to create diversity in the coal regions. But it s not going to be easy for many of us. It s going to require a lot of investment to get the infrastructure in place because everything is currently suited for the coal industry. I don t want to sound too needy here, but I think the government kind of owes it to us. And I m not meaning just West Virginia, I mean the whole region. The [government] policy is changing the livelihoods of many, many people. And they need to recognize the fact that their changes are expected to come along pretty quickly, and they need to give hope to those people who are watching their livelihoods drift away from them.
We re Just Training People to Leave
I encourage the Federal Government to look at this situation with compassion and recognize this is not simply a situation of training people. Right now, we re just training people to leave, because currently, the jobs are not in the coal fields. We re doing way more than training people, we re repositioning entire communities.
OAG360: Would you say you feel blindsided by these regulations?
BURDETTE: Well that s a great question, and I m not sure that I have a great answer for you. I don t feel blindsided, but I think the magnitude and the speed of the reaction has been surprising to us.
State s Revenue Drop is Dramatic and Massive
I ll give you an example as far as the state budget is concerned. This fiscal year in West Virginia started on July 1, and it was expected to be a break-even year. Sixty days into the year at the end of August, we were missing our revenue estimates by about $12 million not terrible, certainly manageable. But then by the end of September, we were $60 million down. At the end of October, we were $90 million down. So, the speed by which it has affected the state s revenue caught everybody off guard. I don t think anybody expected it to be that dramatic and massive.
Did we see the cost from the battle with coal? Yes. Did we understand that the policies in Washington, DC, were going to make coal sales more challenging? Yes we did. But, that doesn t make it any easier to turn the ship around. If you prefer to take a glass half-full approach, I think everybody understands that there s going to have to be some pretty dramatic changes. All of these families are like anybody else mouths to feed, mortgages to pay, car payments to make.
Just Relocate and Find other Jobs
Consider this equation also: some people say, Well, you just need to relocate and find other jobs. But it s very hard to relocate when you have basically your entire life s savings tied up in your house and you can t sell it because everybody is leaving town. Who would buy it now? So there are a lot of challenging problems that won t be solved with what I call the bumper sticker mentality . It will require some very fundamental shifts in the coal fields. We have to give these families some hope.
WEST VIRGINIA S NATURAL GAS INDUSTRY
OAG360: Broadly speaking, can you talk about some of the trends and differences you have noticed in West Virginia as the Marcellus and Utica shales have emerged in oil and gas drilling and production?
BURDETTE: Well you ve probably noticed that energy states are struggling right now from what has become a perfect storm. The abundance of both coal and gas has driven commodity prices into the basement. Coal is struggling. Oil is, quite frankly, at almost record lows. Of late, the state s been struggling to keep up with the changing dynamic. We have some severance taxes in West Virginia and those have seen some pretty dramatic changes.
That s the bad side, but the trend lines overall have been good. I think last year we had about 13,000 West Virginians work at wages exceeding $1 billion, and wages from oil and gas jobs have increased by about a half billion dollars in just the last seven years. A lot of the change is being driven by infrastructure building. There have been a lot of gains in pipeline construction and support activities for natural gas. In the fourth quarter of 2014, employment was at 13,834, but in the first quarter of 2015, employment was down fairly significantly to about 11,666. However, the first quarter of every year is usually the lowest employment period due to seasonality.
Much Needed Natural Gas Infrastructure
But the glut and the low prices, while they haven t exactly put the industry in hibernation, have certainly slowed down drilling. I think the larger companies are still spending significantly on their infrastructure to support the wells that they ve drilled. All things considered, we ve still drilled faster than we can build out [pipelines and other infrastructure]. That s why we ve seen the larger companies shift to investing in long-term infrastructure, and we believe that s a solid strategy.
Pipeline infrastructure as a whole began to decrease after 2012, the year it peaked. That trend may reverse itself again there is a logjam of large pipe projects including several still in play that require FERC approval. One is a $3 billion project that goes from Wetzel County to a site in Virginia, and there are several projects of that magnitude that are on the drawing board to try to get our product to market. If we can get some others approved in the course of the next twelve months I think you ll see those numbers start to increase again. There s a pretty clear shift in industrial usage away from other fuels and into natural gas. We re seeing a lot of companies, especially big users, make the conversion, including quite a few from coal to natural gas. Given the price structure and other considerations, it s not particularly surprising. But overall, we re still bullish and optimistic on the price of natural gas we see it as a growth industry for us. We ve only permitted about 10% of the fields in West Virginia, so there s still a lot of opportunity.
The number one challenge moving forward, however, is simply getting the gas to the marketplace.
OAG360: Was the infrastructure buildout a focus of the Tri-State Shale Summit that concluded in October? Or is that mainly a general collaboration between Ohio, Pennsylvania and West Virginia?
BURDETTE: Actually, the states have never jointly collaborated on infrastructure projects. In any sense, we d have to take baby steps on that subject. The majority of the Tri-State Conference was really about identifying future trends and how to respond to them, but it was also about coordinating things that we know how to coordinate. We won t ever stop competing for the next big project that comes along there s no sense in acting like that won t occur, although I think all three states realize that development (like the ethane crackers, for example) have a big regional impact. We re still looking to compete for those individually, but it s clear that the region needs to develop collaborative efforts as far as attracting and building the work force.
Governor Tomblin (WV), Lieutenant Governor Taylor (OH) and Governor Wolf (PA) signed that agreement. Although it was admittedly a modest first step, it was, in fact, a first step. I think clearly developing an infrastructure that supports the region is going to be very, very important for all of us.
Ethane Storage Needed in West Virginia to Allow the State to Compete with the Gulf Coast
We talked about the needs of West Virginia to develop a storage structure, especially for ethane since it s such a big byproduct of the natural gas. We can compete with the Gulf Coast much more effectively if we have a storage strategy that creates consistency in supply and price, along with a reliable network that can supply gas to the region. These are longer range goals, but nevertheless, you have to start developing a strategy now.
OAG360: A local newspaper named The Exponent Telegram published a piece suggesting severance taxes be raised on natural gas liquids in order to keep more revenue from West Virginia s natural gas production in the state. Has the state administration touched base on that yet?
BURDETTE: I believe you re referring to a study conducted by a state group that encouraged us to create a tax credit that would offset raising tax prices on ethane. We don t have an immediate plan to do that, and that s because we don t have a network of users yet. So we re kind of cutting off our nose to spite our face, but Governor Tomblin has been very aggressive in telling our producers that we expect them to give attention to every opportunity that comes along in our region and to create value-added manufacturing that comes along with the production of the Marcellus region.
While that certainly seems to be a no brainer, the truth of the matter is that sometimes those companies have trouble putting together supply contracts for a lot of different reasons. It can be complicated to develop those contracts for five, seven or even 20 years out.
But, we ve made it very clear to our suppliers that we expect them to give it special attention. I would say they have done so, for the most part. I don t think we have to beat them over the head, but we re certainly not above beating them over the head if we can t get a cooperative contract for the region. I don t think that s going to be a short-term need, but it is very much on our mind. That s an opportunity that needs to be available in our region, first and foremost.
OAG360: What s a typical storage season like for West Virginia, considering you re such a big storage provider to the northeast and injection rates are above five-year highs?
BURDETTE: I m not sure this will be a big injection season, quite honestly because we re still producing more than we can sell. Our annual delivery capacity this year is about 260 to 262 Bcf. The only state in the region that surpasses that is Pennsylvania. So we can meet our winter demands without storing gas from other states. We used to have that need, but we don t any more. In fact, most of the gas that we sell to the northeast is still difficult to get there because of the lack of infrastructure. So, we haven t asked for any kind of report on the injection season, but I believe the builds should be very modest.
OAG360: You touched earlier on regional jobs and employment. What have the local universities done to take advantage of those opportunities?
BURDETTE: For specifics, I d had to defer you to President Gordon Gee s office. But in general, West Virginia University and President Gee understand this opportunity. Mr. Gee was previously the President of Ohio State University and he knows what s at stake. I believe he has been aggressively engaging companies and others in a discussion about the what ifs, and are developing several programs.
Gee Wants to Capitalize on the Shale Opportunity
On a related note, President Gee was actually at the Tri-State Shale Summit the whole time. It was funny, college presidents usually come in, give a speech and then run out the door, but President Gee sat in the back of the room for almost the entire day and he wasn t even on a discussion panel. He just came to learn and listen he certainly understands how significant this opportunity is, and how we have to be careful not to squander it.
OAG360: Have you and Governor Tomblin taken a stance on the Clean Power Plan?
BURDETTE: Governor Tomblin announced at the Shale Summit that we will submit a plan. It makes no sense to have the federal government impose something on us. But there is an official release on the Governor s site that says we will conduct a feasibility study and move forward from there.
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In the 1950s, my grandparents had a natural gas pipeline constructed through their 179-acre family farm in North Carolina. My father, who was a professional engineer negotiated a natural gas farm tap with Piedmont Natural Gas. The farm tap increased the possible future uses of my grandparents farm thus increased its potential value. My father said PNG was good to work with. PNG is becoming a division of Duke Energy which is partnering with Dominion Power to construct the Atlantic Coast Pipeline project. The Atlantic Coast Pipeline is currently under review to be constructed right here for our region. It will transport and distribute natural gas throughout Virginia and North Carolina and will bring affordable energy to families and businesses here, and give much need income to the people of West Virginia.
The Atlantic Coast Pipeline will also enhance our energy security and save our hard earned money through lower energy bills. Keeping more money to ourselves will improve our quality of life today and in the future. Our children and grandchildren will be helped by giving them a lower cost of living. Those who oppose Atlantic Coast Pipeline often seem to forget that Dominion employees lives in our community too. An unsafe pipeline for your neighborhood and community is an unsafe pipeline in their communities also. The water you drink is the same water Dominion employees drink. They want this pipeline built safely with as little impact to the environment as is possible just like it was for my grandparents 60-plus years ago. And all those years ago, the technology didn t exist to monitor and guard the soil, air and water that we have today. There is no greater lover of nature than myself. I would never support the Atlantic Coast Pipeline if I did not truly believe it will ultimately help people by strengthening local economies, increase access and affordability of natural gas, upgrade our energy infrastructure and lower carbon emissions. The Atlantic Coast Pipeline is good.
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Update: Friday, November 20, 2015 at 5:01 p.m.
Jurors in the trial of former Massey Energy CEO Don Blankenship were unable to reach a verdict Friday. Deliberations will continue Monday at 9 a.m. If the trial continues beyond Tuesday afternoon, Judge Irene Berger said jurors will not meet Wednesday, Thursday or Friday to allow for a break for the Thanksgiving holiday.
Jurors have been deliberating a verdict for an estimated 16 hours thus far.
Deliberations began Tuesday around 4 p.m. following closing statements from both sides and a final rebuttal from Assistant U.S. Attorney Steve Ruby.
Update: Friday, November 20, 2015 at 3:14 p.m.
Don Blankenship’s lead defense attorney Bill Taylor again moved for a mistrial on Friday afternoon. Taylor said the long distance travel required of jurors (six jurors have 2-hour round trips, one juror has a 3-hour round trip) and the upcoming holiday increases the likelihood of potential coercion.
Taylor also argued that the upcoming Thanksgiving holiday will force the jury to come up with a verdict more quickly rather than work their way to a decision. Judge Irene Berger denied the request for a mistrial. She said she will be advising jurors this evening on their schedule over the holidays. Judge Berger indicated she would give allow jurors to take Wednesday through Friday off from deliberations.
The reason for a Friday morning closed door meeting between prosecutors, defense attorneys for Don Blankenship and Judge Irene Berger has also been revealed in open court. Friday afternoon, Judge Irene Berger said a freelance news reporter, had approached two members of the jury Friday morning. Those jurors reported that interaction to Judge Berger.
Attorneys for Blankenship and the prosecution then convened with Judge Berger Friday morning in a closed door meeting that lasted about 30 minutes. Berger said she conducted the closed door meeting with the entire jury and both the prosecution and defense to learn the extent of the conversation between the reporter and the two jurors. The reporter has been asked to leave the courthouse.
Also, at 2:45 p.m. Friday, jurors sent a note to Judge Irene Berger asking for clarification of words related to counts two and three in the federal indictment of Don Blankenship. Those words are “condone” and “strive.”
Those words are contained in the following sentences from the indictment:
- “We do not condone any violation of MSHA standards.”
- “We strive to be in compliance at all times.”
Judge Berger said that since the terms have no legal definition and are not defined in statute, she will give no further instructions. Jurors continue to deliberate a verdict.
Update: Friday, November 20, 2015 at 1:29 p.m.
In a motion filed with the court Friday, the Associated Press has requested the court release the names and addresses of jurors in the trial of Don Blankenship. Written by attorney Sean McGinley of Charleston, the motion argues there is a constitutional right for media and the public to access this information. It concludes:
The right of public access as held in Baltimore Sun, supra, clearly applies here, as the jury was chosen over a month ago, and there is no constitutionally valid to withhold the names and addresses of the trial jurors. The Associated Press therefore requests and moves the Court to direct the Clerk to release the names and addresses of the trial jurors immediately.
Jurors are slated to continue deliberations at 1:50 p.m.
Update: Friday, November 20, 2015 at 12:40 p.m.
Jurors in the trial of Don Blankenship are taking a break for lunch. They will return to the federal courthouse in Charleston at 1:50 p.m.
Update: Friday, November 20, 2015 at 11:41 a.m.
Deliberations continue in the trial of former Massey Energy CEO Don Blankenship as prosecutors and defense attorneys have finished a closed door meeting with Judge Irene Berger. Speaking to West Virginia Public Broadcasting’s Ashton Marra, U.S. Attorney Booth Goodwin said the closed door meeting between prosecutors, Blankenship defense attorneys and Judge Irene Berger is “a matter she will place on the record when we get back together.”
Goodwin did not say when the parties would meet again. As for the reason the meeting was closed off to members of the media, Upper Big Branch vicitims’ families and others, Goodwin said it was “to keep the integrity of the proceedings together as we move forward.”
Marra also reports that many family members were upset at being kept out of the closed meeting.
Also Friday morning, Judge Berger denied Blankenship’s defense attorneys’ emergency motion for jury instruction. That motion was filed Thursday morning following news that jurors sent a note to Berger telling her they could not agree on a verdict.
Update: Friday, November 20, 2015 at 11:08 a.m.
Attorneys for the prosecution and defense team for former Massey CEO Don Blankenship are now in a closed door meeting with Judge Irene Berger. Media, vicitms’ families and others not being allowed in. A courtroom security guard did not give a reason to West Virginia Public Broadcasting reporters at the courthouse.
The Charleston Gazette-Mail reports a U.S. Marshal refused a request to deliver a note of protest to the judge about the closed meeting. There is still no word on whether the jury has reached a verdict.
Jurors returned to the federal courthouse in Charleston at 9 a.m. Friday for more deliberations on a verdict.
Update: Thursday, November 19, 2015 at 5:00 p.m.
Jurors in the trial of former Massey CEO Don Blankenship have yet to reach a verdict. Upon being released just before 5 p.m., Judge Irene Berger ordered jurors to return to the federal courthouse in Charleston at 9 a.m. Friday. Thursday marked second full day of deliberations, as jurors were discharged by Judge Berger for the deliberation process Tuesday around 4 p.m.
Update: Thursday, November 19, 2015 at 1:22 p.m.
Defense attorneys for Don Blankenship have filed an emergency motion for jury instruction following a note from the jury to Judge Irene Berger asking how long they should deliberate and that they could not agree on a verdict.
Blankenship’s defense is asking Berger to provide the following instruction to the jury immediately upon its return from lunch:
I wish to follow up on my instruction before lunch to continue your deliberations. As I instructed you previously:
[I]t is your duty as jurors to discuss this case with one another in the jury room. You should try to reach agreement if you can do so without violence to individual judgment, because a verdict whether guilty or not guilty must be unanimous. Each of you must make your own conscientious decision, but only after you have considered all of the evidence, discussed it fully with your fellow jurors, and listened to the views of your fellow jurors.
Do not be afraid to change your opinions if the discussions persuade you that you should. But do not come to a decision simply because other jurors think it is right or simply to reach a verdict. Jurors were scheduled to return from a lunch break at 1:20 p.m. Thursday.
Update: Thursday, November 19, 2015 at 11:56 a.m.
Deliberations will continue Thursday afternoon in the trial of former Massey Energy CEO Don Blankenship. Jurors will return to the federal courthouse at 1:20 this afternoon.
At 11:30 a.m. Thursday, jurors sent a note to Judge Irene Berger asking how long they should deliberate and letting her know they could not agree on a verdict.
The defense moved for a mistrial, but Judge Berger directed the jury to continue deliberations.
“Given the length of this trial, the number of witnesses you’ve heard and the amount of time you’ve been deliberating, I’m going to order you to continue deliberating,” Berger told the jury.
Update: Thursday, November 19, 2015 at 9:42 a.m.
Jurors have returned to the federal courthouse in Charleston to continue deliberating a verdict in the trial of Don Blankenship. Wednesday marked the first full day of deliberations after closing arguments wrapped up around that afternoon. Judge Irene Berger discharged the jury for deliberations around 4 p.m. Tuesday.
Update: Wednesday, November 18, 2015 at 4:52 p.m.
Jurors have yet to reach a verdict in the trial of former Massey CEO Don Blankenship. They’ll return to the federal courthouse in Charleston at 9 a.m. Thursday for a third day of deliberations. Deliberations began around 4 p.m. Tuesday after prosecutors and defense attorneys presented closing arguments. Excluding a 20 minutes break in the morning and just over an hour for lunch, Wednesday brought the first full day of the 12-member jury mulling over the evidence and testimony.
The Charleston Gazette-Mail’s Ken Ward reports that jurors asked to relisten to tapes admitted into evidence by the prosecution.
Update: Wednesday, November 18, 2015 at 12:50 p.m.
Jurors are scheduled to return at 1:10 p.m. to continue deliberations. The jury broke for lunch around noon Tuesday.
Original Post: Wednesday, November 18, 2015 at 11:16 a.m.
Jurors have begun deliberations in the trial of former Massey Energy CEO Don Blankenship. Deliberations began around 4 p.m. Tuesday, following a final closing rebuttal from Assistant U.S. Attorney Steven Ruby. On Wednesday, the jury returned for deliberations and began around 9 a.m.
Blankenship is charged with conspiracy to violated federal mine safety standards and lying to investors and securities officials about the safety record of his company. The charges stem from an investigation into the April 2010 explosion at Massey’s Upper Big Branch mine, where 29 miners lost their lives.
If convicted, the 65-year-old Blankenship faces up to 30 years in prison.
- ^ @wvpublicnews (twitter.com)
- ^ motion filed with the court (mediad.publicbroadcasting.net)
- ^ Judge Berger denied (mediad.publicbroadcasting.net)
- ^ motion was filed Thursday morning (mediad.publicbroadcasting.net)
- ^ The Charleston Gazette-Mail reports (blogs.wvgazettemail.com)
- ^ filed an emergency motion (mediad.publicbroadcasting.net)
- ^ reports from the courthouse (www.wvgazettemail.com)
- ^ #Blankenship (twitter.com)
- ^ November 18, 2015 (twitter.com)
- ^ Follow this link to read the transcript of closing arguments and jury instructions in the trial (www.documentcloud.org)