LOUISVILLE, Ky. – A large West Virginia underground coal mine owned by Murray Energy is halting production for nearly two weeks, and the rest of the company’s mines are running on part-time schedules due to reduced demand from electric utilities, the company’s chairman and CEO said Wednesday.
The Marion County mine will be idled until at least March 7, Robert Murray said. The mine employs about 500 workers after laying off 80 people in December.
Demand for electric power is down as manufacturing moves overseas, and utilities are increasingly turning to natural gas and other alternative sources to generate electricity, Murray said.
“So as a result, even though there are contracts with these utilities for them totake the coal, they abrogate their responsibilities, theydon’t take the coal,” Murray said. He said suing over the contracts doesn’t work because “they’re still the customer you have to deal with.” He declined to name the utility companies he has contracts with.
Ohio-based Murray Energy is one of the nation’s largest coal producers, and like many coal operators it is feeling the sting of a slumping market. Other major operators, including Arch Coal and Alpha Natural Resources, have filed bankruptcy in recent months.
Murray said regulatory enforcement from President Barack Obama’s administration is causing less coal to be mined as well as making coal less palatable for power plants, which must adhere to tougher environmental rules.
Electricity generation in the U.S. was down 5 per cent in November from the previous November, and coal consumption was down 24 per cent in the same period, according to the U.S. Energy Information Administration. Natural gas usage was up 21 per cent.
Murray’s operations in West Virginia, Ohio, Illinois, Pennsylvania, Kentucky and Utah are running on reduced schedules, and the company’s workforce has shrunk from 8,400 in May to 5,800 this month, he said. Murray said his mines are running two to four days a week, or “not at all.” The company’s Monongalia County Mine in West Virginia is running again after being idled in December and January, he said.
Murray said he is confident the Marion County mine will reopen, but that it ultimately depends on the utilities’ demand for his coal.
Murray bought the Marion County mine along with four others from Consol Energy in 2013.