Murray Energy workers attack two West Virginia candidates over severance tax cut

Murray American Energy, a part of Ohio-based coal producer Murray Energy that controls several longwall mines in northern West Virginia, on Feb. 8 released a statement where some of its employees lambasted two Democratic candidates for governor of West Virginia, including Jim Justice, who made his fortune as a coal mine operator.

The other Democratic candidate is R. Booth Goodwin II, who has been a federal prosecutor in the state. “These politicians are attempting to undermine the immediately needed reduction in the State’s exorbitant coal severance tax, which is rapidly eliminating coal mining and other jobs in West Virginia,” said the company, which is controlled by Robert “Bob” Murray.

“Booth Goodwin’s statements against Mr. Murray and the urgent need for a coal tax reduction were offensive and incorrect. Mr. Murray deeply cares about his employees and does everything possible to keep our miners working,” said Marshall County Coal General Superintendent Eric Koontz.” “The tax on West Virginia makes it uncompetitive with that from other states, where there is no such tax. No politician who attacks Mr. Murray and this tax reduction, as did Booth Goodwin, can claim to be a friend of any coal miner in this State or the residents who fill the 6.4 secondary jobs created by each coal mining job.”

The company said that Jim Justice hypocritically attacked Murray’s calls for coal severance tax reform in West Virginia, despite the fact that he is one of the reasons that the $0.56 per ton tax was put on coal to bail out the defunct workers compensation fund in the first place. The company said that Justice “dumped” $18 million of his own workers’ compensation liabilities into the fund and caused the need for it. “He’s a hypocrite who dumped on us to create this cost on coal in the first place,” said Pete Simpson of Monongalia County Coal.

Bob Murray has called for the state’s coal severance tax, which is by far the highest amongst all states, to be very quickly reduced from 5% of the gross sales price of its coal to no more than 2%, with the additional elimination of the $0.56 per ton added on to bail out the state’s workers compensation fund. At 2%, the West Virginia tax will still be nine times greater than competing states, the company said.

“This tax reduction will flow directly through to the electric utility customers, to make our coal-fired power plants more competitive,” said Scott L. Martin, Superintendent of Harrison County Coal. “This reduction makes West Virginia coal more competitive with that from other states—and against natural gas—thus helping to preserve our industry, which has paid nearly $9,000,000,000.00 in taxes to the State.”

“The severance tax relief is one of the few ways available to the legislature to keep coal and other jobs in West Virginia. Regardless of what Messrs. Goodwin and Justice say, the coal industry has been one of the primary foundations of our economy,” said Jason Parker, Assistant Mine Foreman at the Ohio County Mine. “Indeed, even Governor Earl Ray Tomlin, who, to date, has shown no willingness to help our coal jobs through the needed severance tax reduction, admitted in his recent State of the State address, that West Virginia owes a huge ‘I.O.U.’ to its coal industry. As one coal company after another declares bankruptcy, the only hope is that the State acts now to ease the crippling severance tax burden that is killing the State’s once golden goose, before it is too late to save the thousands of West Virginia jobs and livelihoods that depend on it.”

Jim Justice said in a Jan. 27 statement about the severance tax issue: “Let’s be honest, a further cut in the coal severance tax will not reopen one coal mine or put one miner back to work. Even though these cuts would mean more money in my pocket at my coal operations, it’s irresponsible at this time to do anything that will choke off support for fixing our crumbling roads and schools across West Virginia. It’s not the answer to creating jobs. I’ve been in the coal business all my life, and I am completely committed to the future of coal and putting all our miners back to work. At a time when everyone is shutting down coal operations; recently I have reopened two major mining complexes and put over 250 miners back on the job.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.