Great divide between miner health advocates and coal industry surfaces in Inflation Reduction Act debate
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Mike Tony
Environment and Energy Reporter
Sen. Joe Manchin, D-W.Va., speaks to reporters about the agreement he reached with Senate Majority Leader Chuck Schumer, D-N.Y., following months of negotiations on health care, energy, climate issues, and tax initiatives, at the Capitol in Washington, Monday, Aug. 1, 2021. Manchin returned to the Senate after a week away to recover from COVID-19.
On one side are coal companies decrying what they view as an existential threat.
On the other side are black lung-afflicted coal miners fighting for their lives.
A clear divide between the coal industry and miner advocates has emerged in the debate over a federal clean energy and tax reform package that would help stabilize the trust fund that pays federal benefits to miners.
Black Lung Association leaders across West Virginia have urged Sen. Joe Manchin, D-W.Va., to support a budget reconciliation package that shores up the Black Lung Disability Trust Fund for the past year.
Now that Manchin did just that last week with the Inflation Reduction Act, the coal industry is pushing back, objecting both to its restoration of the coal production tax supporting the black lung trust fund and its provisions rewarding renewable energy development.
“This legislation is so egregious, it leaves those of us that call Senator Manchin a friend, shocked and disheartened,” a coalition of eight pro-coal associations that includes the West Virginia Coal Association said in a statement released Wednesday.
Manchin prioritized touting what he argued would be benefits for the coal industry stemming from the Inflation Reduction Act on Thursday.
The senator held a news conference with West Virginia reporters in which he highlighted the bill’s investment in carbon capture technology championed by the coal industry.
Hours later, Manchin’s office released a letter to West Virginia Coal Association president Chris Hamilton in which he defended the bill, noting that it would increase a carbon capture tax credit and observing that coal jobs nationwide decreased about 25% over the course of West Virginia Coal Association-backed Donald Trump’s presidency.
“[E]veryone’s tried,” Manchin said of efforts to boost the declining coal industry. “The bottom line is we’re doing something now. We’re putting more value to coal ... we know it has to be used with carbon capture sequestration, the best that we possibly can. So we’re doing everything that we can to make that happen.”
Carbon capture, use and storage is an umbrella term for technology that removes carbon dioxide from the atmosphere and uses it to create products or store it permanently underground.
Such technology, which proponents envision as retrofitting commercial power plants to mitigate coal and gas asset emissions, is unproven at commercial scale.
Manchin and other politicians representing constituencies where coal still plays a major role in the economy and electric generation have embraced carbon capture technologies as a way to keep coal in the energy mix.
Hamilton said Thursday afternoon that he had not received Manchin’s letter.
“[S]o far, we’ve not seen much in there for coal,” Hamilton said. “Conversely, we see a lot of things that will work against the betterment of the state’s coal industry.”
The coal association coalition’s statement bemoaned “turbocharging the lofty incentives that already extend to renewable energy,” alluding to the Inflation Reduction Act’s extension of renewable energy tax credits. The coalition also objected to the bill doubling the current tax on coal production.
But the bill would restore the tax rates on coal only to what they were before 2022.
Excise tax rates of $1.10 per ton of coal mined underground and 55 cents per ton of surface-mined coal were cut by more than half, to 50 and 25 cents, respectively, because Congress failed to extend them at their pre-2022 rates before the end of last year.
The Black Lung Disability Trust Fund funded by the tax pays benefits to miners disabled by the disease, as well as their eligible survivors and dependents, when no responsible coal operator is identified or when the liable operator does not pay.
Miners with black lung fear that there might not be enough money in the financially strained fund to support future black lung claims.
Christopher J. Godfrey, director of the Office of Workers’ Compensation Programs at the U.S. Department of Labor, noted in a blog post earlier this year that the department believes reinstating and extending the coal excise tax to at least its previous rates is “critical” to keep the black lung program from having to borrow from the U.S. Treasury to cover the costs of miner benefits — sticking taxpayers, not the coal industry, with the bill.
Coal company bankruptcies have burdened the trust fund with hundreds of millions of dollars of liability.
“The coal companies view us as a number,” National Black Lung Association president and Beckley resident Gary Hairston alleged during a Thursday press conference to urge support of the Inflation Reduction Act’s permanent excise tax extension. “When they can’t use us no more, they throw us to the side.”
Financial risks to the Black Lung Disability Trust Fund loom especially large in West Virginia. There were 4,423 black lung claims in fiscal year 2021 under Part C of the Black Lung Benefits Act in West Virginia, according to U.S. Department of Labor statistics.
Disbursements in West Virginia totaled $38 million, far more than in any other state and accounting for more than a quarter of all payments made nationwide.
The Black Lung Disability Trust Fund collected $271 million in revenue in fiscal year 2021. Based on that figure and the fees change for 2022, the fund could be seeing revenue decreased by more than $2 million a week.
A 2018 report by the U.S. Government Accountability Office, a nonpartisan audit agency, found that trust fund borrowing might exceed $15 billion by 2050. A 2020 report from the agency found that just three coal mine operator bankruptcies from 2014 to 2016 added $865 million in estimated benefit responsibility to the fund.
Joining Hairston for Thursday’s press conference urging Inflation Reduction Act passage were Fayette County Black Lung Association vice president David Bounds, John Cline, a West Virginia attorney who has represented miners in black lung claims, Dr. Bob Cohen, director of the Black Lung Center of Excellence at the University of Illinois Chicago, Kanawha County Black Lung Association president Jerry Coleman, Nicholas County Black Lung Association president Alvin Hanshaw and National Black Lung Association vice president Vonda Robinson.
“[I]t’s really important that we fund and take care of these programs for our miners well into the future,” Cohen said, noting a sharp rise in black lung cases in recent years driven by increased exposure to toxic silica dust as miners cut into more surrounding rock as coal seams thin.
Sen. Shelley Moore Capito, R-W.Va., and Rep. Alex Mooney, R-W.Va., opponents of the Inflation Reduction Act would hurt the coal industry. Mooney has singled out Manchin for wanting to restore coal production taxes to what they were before 2022.
The United Mine Workers union, which supports the Inflation Reduction Act, criticized Mooney for arguing against restoring support for the black lung trust fund in a press release Tuesday.
“We put them in office. They’re supposed to protect us and they’re letting the coal companies by,” Coleman said.
The budget reconciliation package contains $369 billion in climate and clean energy spending, would encourage more stringent Internal Revenue Service tax enforcement and cap Medicare patients’ out-of-pocket costs at $2,000 a year. It would also implement other spending reforms that the nonpartisan Congressional Budget Office said would result in a net decrease of $102 billion in the deficit through 2031.
Budget reconciliation packages are so named because they allow committees to change spending amounts in a fast-track process requiring only a simple majority to pass Congress.
Manchin had long been a critical holdout vote in a Senate evenly divided between Democrat and Republican caucuses, given Republicans’ united opposition to budget reconciliation proposals.
Senate Majority Leader Chuck Schumer, D-N.Y., said Thursday that the Senate will take up the bill Saturday.
Mike Tony covers energy and the environment. He can be reached at 304-348-1236 or mtony@hdmediallc
.com. Follow @Mike__Tony on Twitter.
