Russia close to using natural gas as weapon in Europe’s gas crunch – Biden energy adviser

By Timothy Gardner

WASHINGTON (Reuters) -U.S. President Joe Biden’s global energy security adviser said on Monday that Russian President Vladimir Putin is getting close to using natural gas as a political tool if Russia is holding back fuel exports to Europe as it suffers an energy crunch.

“I think we are getting close to that line if Russia indeed has the gas to supply and it chooses not to, and it will only do so if Europe accedes to other demands that are completely unrelated,” Amos Hochstein, Biden’s adviser, told reporters, when asked if Putin was using gas as a weapon.

Hochstein said gas prices in Europe have been driven higher not just by events in the region but also by a dry season in China that has reduced energy output from hydropower and increased global competition for natural gas.

Still, while several factors have led to the European gas crisis, Russia is best placed to come to the aid of Europe, he said.

“There is no doubt in my mind, and the (International Energy Agency) has itself validated, that the only supplier that can really make a big difference for European energy security at the moment for this winter is Russia,” Hochstein said. Russia can increase upstream production of gas, and should do it quickly through existing pipelines, he said.

Putin has rejected suggestions that Moscow was squeezing supplies for political motives, saying it will increase flow as much as partners ask.

Putin has blamed record high prices on the EU’s energy policy and said Russia can boost supplies to Europe once its Nord Stream 2 gas pipeline gets approved.

Yuriy Vitrenko, the head of Ukraine’s state energy company Naftogaz, this month said Russia was trying to blackmail Europe into certifying its Nord Stream 2 gas pipeline by keeping fuel supplies low. The pipeline, which Washington opposes because it would circumvent Ukraine, is finished but needs approvals from Germany to start delivering Russian gas under the Baltic Sea to Europe.

Approvals from Germany and the European Commission for Nord Stream 2 will likely take until March, so if Russia says it can quickly boost gas flow through Nord Stream 2, it should be able to do so now through existing pipelines, Hochstein said.

“You can’t have it both ways,” Hochstein said

(Reporting by Timothy Gardner; Editing by Mark Porter)

White House asks U.S. oil-and-gas companies to help lower fuel costs -sources

By Jarrett Renshaw

(Reuters) -The White House has been speaking with U.S. oil and gas producers in recent days about helping to bring down rising fuel costs, according to two sources familiar with the matter.

Energy costs are rising worldwide, in some cases leading to shortages in major economies like China and India. In the United States, the average retail cost of a gallon of gas is at a seven-year high, and winter fuel costs are expected to surge, according to the U.S. Energy Department. Oil-and-gas production remains below the nation’s peak reached in 2019.

“We are closely monitoring the cost of oil and the cost of gas Americans are paying at the pump. And we are using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets,” a White House official said.

Press Secretary Jen Psaki said Wednesday that she is not aware of any contact with oil and gas companies “around this particular issue.”

U.S. crude oil recently hit $80 a barrel for the first time in seven years, as the Organization of the Petroleum Exporting Countries and their allies known as OPEC+ restrict output. The White House has discussed rising prices with top OPEC producer Saudi Arabia in recent weeks.

The average retail price of a gallon of gasoline has risen to $3.29, according to AAA figures. The U.S. Energy Department said on Wednesday that household heating costs are expected to rise dramatically this winter for all fuels, but particularly for heating oil and propane.

U.S. oil production has been slow to rebound from 2020, when output dropped during the coronavirus outbreak. Production hit a record of nearly 13 million barrels per day (bpd) in late 2019, but the U.S. Energy Department said Wednesday that output will only average 11 million bpd in 2021, rising to 11.7 million bpd in 2022.

Natural gas prices are up sharply this year, the result of supply shortages and stronger-than-expected demand in Europe and Asia.

U.S. shale producers, who are responsible for the boom in crude oil output in the last 10 years, have been less willing to drill for more oil after years of weak financial performance, and have instead focused on cutting spending to boost returns for investors.

It can take six months to drill and complete a new well and bring the oil and gas to market. Any call by the White House for an increase in U.S. production is likely to fall on deaf ears, according to one oil executive, who did not want to be identified criticizing the approach. The industry has also been unhappy with some of Biden’s earlier actions, including a temporary drilling halt on federal lands, that they see as an attack on the industry.

“By pursuing policies that restrict supply and make it harder to produce oil and natural gas here in America, Americans will have to pay more for their energy,” said Anne Bradbury, chief executive officer at the American Exploration and Production Council, which lobbies for independent oil-and-gas producers.

President Joe Biden’s administration has been conducting internal discussions about rising fuel costs, one of the two sources added.

The White House has been trying to tackle supply bottlenecks that have boosted the price of various goods, from meat to semiconductors. Officials said Wednesday that the administration has been working with major ports in Los Angeles and Long Beach, along with shipping giants UPS and FedEx, to alleviate congestion slowing deliveries.

(Reporting by Jarrett Renshaw, Ron Bousso and David French; Editing by Howard Goller and Andrea Ricci)

U.S. public power/natgas groups urge Biden to cap prices in last week’s freeze

(Reuters) – Trade groups representing U.S. public power and natural gas companies urged President Joe Biden to declare a gas emergency for last week’s extreme weather and authorize the secretary of energy to cap the price of gas.

In a Feb. 19 letter to Biden, the American Public Power Association (APPA) and the American Public Gas Association (APGA) said the recent cold weather in the Midwest and Texas boosted demand for electricity at the same time power generation was constrained due to freezing gas wells and pipelines.

Officials at APPA, APGA and the U.S Department of Energy were not immediately available for comment on whether the administration could or would retroactively change gas prices.

That forced utilities and other energy suppliers to pay billions of dollars to buy gas and power for their customers. In addition to heating homes and businesses, gas also powers much of the power generation in Texas and other states affected by the freeze.

Gas prices, which usually trade around $3 per million British thermal units (mmBtu), rocketed to over $300 per mmBtu at some hubs, while power prices, which usually trade around $25 per megawatt hour in Texas, soared to over $10,000 at times.

One public-owned power plant spent $78 million for four days of gas supply, the groups said, noting the fuel for that plant cost only $18 million for all of 2020.

“If no relief is provided, these staggering costs will ultimately have to be borne by utility customers,” the groups said.

(Reporting by Scott DiSavino in New York and Timothy Gardner in Washington; Editing by Steve Orlofsky and Jonathan Oatis)

Oil extends losses as Texas prepares to ramp up output after freeze

By Devika Krishna Kumar

NEW YORK (Reuters) – Oil prices fell for a second day on Friday, retreating further from recent highs as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages.

Brent crude futures were down 66 cents, or 1%, at $63.27 a barrel by 12:27 p.m. (1727 GMT). U.S. West Texas Intermediate (WTI) crude fell 99 cents, or 1.6%, to $59.53.

For the week, Brent was on track for a 1.3% gain while WTI was largely flat.

This week, both benchmarks had climbed to the highest in more than a year.

“Price pullback thus far appears corrective and is slight within the context of this month’s major upside price acceleration,” said Jim Ritterbusch, president of Ritterbusch and Associates.

Unusually cold weather in Texas and the Plains states curtailed up to 4 million barrels per day (bpd) of crude production and 21 billion cubic feet of natural gas, analysts estimated.

Texas refiners halted about a fifth of the nation’s oil processing amid power outages and severe cold.

Companies were expected to prepare for production restarts on Friday as electric power and water services slowly resume, sources said.

“While much of the selling relates to a gradual resumption of power in the Gulf coast region ahead of a significant temperature warmup, the magnitude of this week’s loss of supply may require further discounting given much uncertainty regarding the extent and possible duration of lost output,” Ritterbusch said.

Oil prices fell despite a surprise drop in U.S. crude stockpiles last week, before the big freeze hit. Inventories fell 7.3 million barrels to 461.8 million barrels, their lowest since March, the Energy Information Administration reported on Thursday.

“Vaccines and the impressive rollouts we’ve seen have delivered strong gains, as have the efforts of OPEC+ – Saudi Arabia, in particular – and the big freeze in Texas, which gave oil prices one final kick this week,” Craig Erlam, senior market analyst at OANDA said.

“With so many bullish factors now priced in, it seems we’re seeing some of these positions being unwound.”

The United States on Thursday said it was ready to talk to Iran about returning to a 2015 agreement that aimed to prevent Tehran from acquiring nuclear weapons. Still, analysts did not expect near-term reversal of sanctions on Iran that were imposed by the previous U.S. administration.

“This breakthrough increases the probability that we may see Iran returning to the oil market soon, although there is much to be discussed and a new deal will not be a carbon-copy of the 2015 nuclear deal,” said StoneX analyst Kevin Solomon.

(Additional reporting by Ahmad Ghaddar in London and Roslan Khasawneh in Singapore and Sonali Paul in Melbourne; Editing by Marguerita Choy and David Gregorio)

Texas oil refineries shut as winter storm hits U.S. energy sector

By Arpan Varghese

(Reuters) – Freezing temperatures across Texas during the extended holiday weekend forced energy companies to shut oil refineries in the largest U.S. crude-producing state and restricted natural gas pipeline operations.

The rare deep freeze prompted the state’s electric grid operator to impose rotating blackouts, leaving nearly 3 million customers without power.

President Joe Biden declared an emergency on Monday, unlocking federal assistance to Texas.

Texas produces roughly 4.6 million barrels of oil a day and is home to some of the nation’s largest refineries, spread throughout the Gulf Coast. In Midland, heart of the U.S. Permian shale region, temperatures were in the single digits Fahrenheit.

Motiva Enterprises said it was shutting down its Port Arthur, Texas, complex, which includes its 607,000 barrel-per-day refinery – the largest in the United States.

Exxon also began shutting its 369,024 bpd Beaumont refinery and its 560,500 bpd Baytown refinery and adjoining chemical plant in Texas, sources familiar with plant operations said.

Its Baton Rouge facility in Louisiana experienced operational issues.

Citgo Petroleum Corp said some units at its 167,500 bpd Corpus Christi, Texas, refinery were being shut.

Sources familiar with plant operations said earlier that the crude distillation unit, a reformer and a hydrotreater were shut by cold weather at the refinery, with all other units also being powered down.

The cold snap also forced Lyondell Basell’s 263,776 bpd Houston refinery to operate at minimum production and shut most units at Marathon’s 585,000 bpd Galveston Bay plant.

“We are also getting reports of power outages across the Permian, which are expected to continue over the weekend if the current weather system persists. This may result in intermittent production shut-ins, with a moderate impact on Permian oil production expected in February,” Rystad Energy’s head of oil markets, Bjornar Tonhaugen, said in a note.

Energy distribution was stalled across large parts of the United States.

Kinder Morgan’s Natural Gas Pipeline Co. reported capacity constraints at various locations on its pipeline system, while Enable Gas Transmission said it was taking measures to ensure adequate supply for customers.

Oil pipeline operator Enbridge Inc. said on Monday a 585,000 bpd crude oil pipeline that runs from its terminal near Pontiac, Illinois, outside of Chicago, to the largest U.S. oil storage hub in Cushing, Oklahoma, was halted because of power outages.

“Crews are working with electric utility providers to restore power to Line 59,” as the pipeline is called, said Enbridge spokesman Michael Barnes. “The power failure is due to the winter storm the U.S. is experiencing.”

Colonial Pipeline Co, the largest oil products pipeline in the United States, said there were no significant impacts to operations at the moment due to the weather.

The icy weather conditions also prompted Port Houston public terminals to cease vessel operations from Sunday evening through Monday.

(Reporting by Arpan Varghese and Eileen Soreng in Bengaluru; Additional reporting by Gary McWilliams and Erwin Seba in Houston; Editing by Andrea Ricci, Dan Grebler and Sonya Hepinstall)

Trump replaces Republican head of energy regulatory panel who supports carbon markets

WASHINGTON (Reuters) – President Donald Trump demoted Neil Chatterjee, the Republican head of an energy regulation panel, after he promoted the use of carbon markets by U.S. states to curb climate change.

Trump replaced Chatterjee, who had been chairman of the Federal Energy Regulatory Commission, or FERC, with fellow Republican James Danly, who had been a commissioner, Chatterjee said on Twitter late Thursday.

If Joe Biden becomes president it is likely he would quickly name a Democratic FERC chair.

Last month Chatterjee had promoted putting a price on carbon emissions, an idea backed by many former Republican politicians and leading companies as a way to lower emissions of pollutants scientists say are warming the planet.

The White House did not immediately respond to a request for comment.

Carbon pricing has struggled to gain support in the U.S. Congress and in the administration of Trump, who doubts climate science and wants to cut costs on coal, oil and natural gas.

In a proposed policy statement on Oct. 15 Chatterjee said that carbon pricing by U.S. states is an “important market-based tool that has wide support from across sectors.” He also held a conference exploring how a carbon tax would world in power markets.

Josh Price, an analyst at Height Capital Markets, said in a note to clients that the proposed blessing for state-led carbon pricing schemes was a “direct threat to coal.”

Chatterjee’s term was due to end on June 30, and he said he would serve out the rest of that as a commissioner. He once worked on pro-fossil-fuel policies as an aide to Senate Majority Leader Mitch McConnell of coal-producing Kentucky.

FERC, an independent panel of the Energy Department, regulates the transmission of electricity and natural gas across states and reviews large energy projects.

Chatterjee told the Washington Examiner that his demotion was “perhaps” because he has supported carbon markets and that if the demotion was retribution, he was proud of his independence.

Danly said in a statement that Chatterjee had left his mark on FERC by brokering an agreement on terminals for natural gas exports and taking other actions to help “secure our American energy independence.”

(Reporting by Timothy Gardner in Washington; Editing by Matthew Lewis and Cynthia Osterman)

Mountain Valley says natural gas pipeline timing depends on litigation, U.S. approvals

(Reuters) – Equitrans Midstream Corp said on Monday it will evaluate the cost and timing of the completion of the Mountain Valley natural gas pipeline based on ongoing litigation and upcoming federal approvals.

The U.S. Federal Energy Regulatory Commission (FERC) gave Mountain Valley permission late Friday to resume some construction on its $5.4 billion-$5.7 billion pipeline, which runs from Virginia to West Virginia.

“As the litigation process progresses and as we receive additional information from FERC regarding potentially releasing the remainder of the route for construction, (Mountain Valley) will continue to evaluate its current construction plans, budget, and schedule,” Equitrans said.

Mountain Valley is one of several U.S. oil and gas pipelines delayed by regulatory and legal fights with environmental and local groups that found problems with federal permits issued by the Trump administration.

FERC suspended work on Mountain Valley a year ago due to litigation over the project’s Biological Opinion from the U.S. Fish and Wildlife Service (FWS), which allows construction in areas inhabited by endangered and threatened species.

The FWS issued a new Biological Opinion in early September. Environmental and other groups continue to challenge the latest FWS approval and other federal permits in court.

Analysts at Height Capital Markets said they expect the project to enter service in mid 2021 but noted timing could slip to the third quarter of 2021 if legal challenges prevent some stream crossings.

“We acknowledge the legal challenge that is currently before Fourth Circuit Court of Appeals and have agreed to temporarily delay stream and waterbody activities out of respect for that process,” Equitrans said.

Equitrans has said it expects the pipeline, which is about 92% complete, to enter service in early 2021.

In February 2018, when Equitrans started construction, it estimated Mountain Valley would cost about $3.5 billion and be completed by the end of 2018.

(Reporting by Scott DiSavino; Editing by Alexander Smith and Steve Orlofsky)

Manure, trash and wastewater: U.S. utilities get dirty in climate fight

Manure, trash and wastewater: U.S. utilities get dirty in climate fight
By Nichola Groom

PIXLEY, Calif. (Reuters) – Joey Airoso has always been proud of his cows, whose milk goes into the butter sold by national dairy company Land O’Lakes. Now he has something new to brag about: the vast amounts of gas produced by his 2,900-head herd is powering truck fleets, homes and factories across the state of California.

“It’s pretty incredible if you think about it,” Airoso said during a recent tour of his 1,500-acre farm, as a stream of watered-down manure flowed from cow sheds into a nearby pit. There the slurry releases methane that is captured and eventually piped into fueling stations and buildings.

Airoso is tapping into a growing market among U.S. utilities for so-called renewable natural gas, or biomethane, that is being driven by the fight against climate change.

For farmers, it is a way to get ahead of a wave of greenhouse gas regulation and make a bit of cash at the same time. And for utilities that buy or transport the gas, it is a way to respond to the increasing demands of customers and lawmakers to cut their reliance on fossil fuels.

“It is not something very many people are aware of yet, but it makes sense once it’s explained,” said Emily O’Connell, director of energy markets policy at the American Gas Association, the trade group for gas utilities.

Renewable natural gas can come from manure, landfills or wastewater and is interchangeable with gas drilled out of the ground. It cuts greenhouse gas emissions by ensuring significant volumes of methane that would have been produced anyway never reach the atmosphere. Methane is a far more potent greenhouse gas than carbon dioxide when it escapes into the air unburned.

Nationwide, more than a dozen utilities have started developing renewable natural gas production through partnerships with farmers, wastewater treatment plants and landfill operators, while nine have proposed price premiums for customers who choose it as a fuel, according to the American Gas Association industry group. Renewable natural gas is currently between four and seven times more expensive to produce than fossil gas, a gap that its proponents hope will narrow as the fuel becomes more widely used.

BUSES, STOVES

California’s SoCalGas, the nation’s largest natural gas distribution utility, is one of the industry’s top proponents of the alternative fuel. It has committed to making renewable natural gas 20 percent of its supply by 2030, said Sharon Tomkins, vice president of strategy and engagement.

She said California has enough biomethane potential “to make a significant dent in reducing the overall emissions from both the agricultural sector as well as reducing the carbon intensity of our gas stream.”

Across the country, Vermont Gas hopes to one day supply only renewable natural gas, leveraging the state’s preponderance of dairy farms. The utility’s renewable natural gas supply currently stands at less than 1 percent of overall volumes, according to spokeswoman Beth Parent. But the company is helping large energy buyers in the state, like cleaning products maker Seventh Generation, Middlebury College and Vermont Coffee Company transition to using biomethane.

CenterPoint Energy, Southwest Gas, DTE Energy and NW Natural are among the other gas utilities seeking to integrate more renewable natural gas into their systems. Last year Dominion Energy partnered with meat producer Smithfield Foods on a $250 million venture to capture methane emissions from hog farms.

“It’s good for their business,” said Marcus Gillette, spokesman for the Coalition for Renewable Natural Gas, an industry lobbying group. “Many are on missions to decrease emissions from their side of the energy sector as much as possible.”

Until now, nearly all the market for biomethane has come from bus fleets and other vehicles that are able to use state and federal subsidies to make the fuel competitive with fossil gas. Production of the fuel doubled between 2015 and 2018 to 304 million ethanol gallons equivalent thanks to the incentives, according to a report from consulting firm Bates White.

Today about three quarters of renewable natural gas production is still used for transportation, though Gillette said that is shifting as more utilities seek to provide it for heating, cooking and industrial uses.

Some states are more aggressive in bolstering the renewable natural gas industry than others.

Oregon, for example, passed a bill in August that sets a goal of making renewable natural gas account for 30% of what is carried in the state’s gas pipeline network by 2050.

California, meanwhile, has mandated a 40 percent reduction in methane emissions by 2030, something that will spell specific regulatory curbs on agriculture in the coming years. Methane accounts for about 9 percent of the state’s greenhouse gas emissions, half of which comes from livestock.

For Airoso, that made tapping into the growing biomethane market an easy decision. “We’ve got a $10 mln investment here, so I had to figure out how I protect my investment,” he said.

(Reporting by Nichola Groom; editing by Richard Valdmanis and Chizu Nomiyama)

U.S. natgas use hits record during freeze; utilities urge conservation

FILE PHOTO - A natural gas flare on an oil well pad burns as the sun sets outside Watford City, North Dakota January 21, 2016. REUTERS/Andrew Cullen

By Scott DiSavino

(Reuters) – Several utilities urged customers to cut back on power and gas use on Thursday during the brutal freeze blanketing the eastern half of the country after U.S. homes and businesses used record amounts of natural gas for heating on Wednesday.

Harsh winds brought record-low temperatures across much of the Midwest, causing at least a dozen deaths and forcing residents who pride themselves on their winter hardiness to huddle indoors.

As consumers cranked up heaters to escape the bitter cold, gas demand in the Lower 48 U.S. states jumped to a preliminary record high of 145.1 billion cubic feet per day on Wednesday, according to financial data provider Refinitiv.

That topped the current all-time high of 144.6 bcfd set on Jan. 1, 2018. One billion cubic feet is enough gas to supply about five million U.S. homes for a day.

In Michigan, automakers agreed to interrupt production schedules through Friday after local utility Consumers Energy made an emergency appeal to curtail gas use so it could manage supplies following a fire at a gas compressor station on Wednesday.

Fiat Chrysler Automobiles NV said on Thursday it canceled two additional shifts at its Warren Truck and Sterling Heights Assembly plants and General Motors Co said it was suspending operations at a total of 13 Michigan plants and its Warren Tech Center.

Ford Motor Co said it had also taken steps to reduce energy use at its four Michigan plants supplied by CMS.

Consumers, a unit of Michigan energy company CMS Energy Corp, said that the Ray compressor station in Macomb County was partially back in service but urged all of its 1.8 million Michigan customers to continue their conservation efforts through Friday.

Elsewhere in Michigan, DTE Energy Inc asked its 2.2 million power customers to reduce electric use voluntarily to help safeguard the reliability of the regional grid.

PJM, the electric grid operator for all or parts of 13 states from New Jersey to Illinois, said there were no reliability issues and noted that power demand had already peaked on Thursday below 140,000 megawatts.

That is well below the PJM region’s all-time winter peak of 143,338 MW set on Feb. 20, 2015. One megawatt can power about 1,000 homes.

While the brutal cold boosts gas use for heating, it can also reduce production by freezing pipes in gathering systems in producing regions, called freeze-offs.

Gas production in the Lower 48 states was projected to fall to a four-month low of 84.9 bcfd on Thursday due primarily to freeze-offs in the Marcellus and Utica, the nation’s biggest shale gas-producing region in Pennsylvania, Ohio and West Virginia, according to Refinitiv.

(Reporting by Scott DiSavino; Editing by David Gregorio and Dan Grebler)

Awaiting Trump’s coal comeback, miners reject career retraining

Loaded coal cars sit on the rail road tracks leading to the Emerald Coal mine facility in Waynesburg, Pennsylvania, U.S., October 11, 2017.

By Valerie Volcovici

WAYNESBURG, Pa. (Reuters) – When Mike Sylvester entered a career training center earlier this year in southwestern Pennsylvania, he found more than one hundred federally funded courses covering everything from computer programming to nursing.

He settled instead on something familiar: a coal mining course.

“I think there is a coal comeback,” said the 33-year-old son of a miner.

Despite broad consensus about coal’s bleak future, a years-long effort to diversify the economy of this hard-hit region away from mining is stumbling, with Obama-era jobs retraining classes undersubscribed and future programs at risk under President Donald Trump’s proposed 2018 budget.

Trump has promised to revive coal by rolling back environmental regulations and moved to repeal Obama-era curbs on carbon emissions from power plants.

“I have a lot of faith in President Trump,” Sylvester said.

But hundreds of coal-fired plants have closed in recent years, and cheap natural gas continues to erode domestic demand. The Appalachian region has lost about 33,500 mining jobs since 2011, according to the Appalachian Regional Commission.

Although there have been small gains in coal output and hiring this year, driven by foreign demand, production levels remain near lows hit in 1978.

A White House official did not respond to requests for comment on coal policy and retraining for coal workers.

What many experts call false hopes for a coal resurgence have mired economic development efforts here in a catch-22: Coal miners are resisting retraining without ready jobs from new industries, but new companies are unlikely to move here without a trained workforce. The stalled diversification push leaves some of the nation’s poorest areas with no clear path to prosperity.

Federal retraining programs have fared better, with some approaching full participation, in the parts of Appalachia where mining has been crushed in a way that leaves little hope for a comeback, according to county officials and recruiters. They include West Virginia and Kentucky, where coal resources have been depleted.

But in southern Pennsylvania, where the industry still has ample reserves and is showing flickers of life, federal jobs retraining programs see sign-up rates below 20 percent, the officials and recruiters said. In southern Virginia’s coal country, participation rates run about 50 percent, they said.

“Part of our problem is we still have coal,” said Robbie Matesic, executive director of Greene County’s economic development department.

Out-of-work miners cite many reasons beyond faith in Trump policy for their reluctance to train for new industries, according to Reuters interviews with more than a dozen former and prospective coal workers, career counselors and local economic development officials. They say mining pays well; other industries are unfamiliar; and there’s no income during training and no guarantee of a job afterward.

In Pennsylvania, Corsa Coal opened a mine in Somerset in June which will create about 70 jobs – one of the first mines to open here in years. And Consol Energy recently expanded its Bailey mine complex in Greene County.

But Consol also announced in January that it plans to sell its coal holdings to focus on natural gas. And it has commissioned a recruitment agency, GMS Mines and Repair, to find contract laborers for its coal expansion who will be paid about $13 an hour – half the hourly wage of a starting unionized coal worker. The program Sylvester signed up for was set up by GMS.

The new hiring in Pennsylvania is related mainly to an uptick in foreign demand for metallurgical coal, used in producing steel, rather than domestic demand for thermal coal from power plants, the industry’s main business. Some market analysts describe the foreign demand as a temporary blip driven by production problems in the coal hub of Australia.

Officials for U.S. coal companies operating in the region, including Consol and Corsa, declined requests for comment.

“The coal industry has stabilized, but it’s not going to come back,” said Blair Zimmerman, a 40-year veteran of the mines who is now the commissioner for Greene County, one of Pennsylvania’s oldest coal regions. “We need to look at the future.”

Career center representative Alison Hall works on the computer looking to place out of work coal miners at the Mining Technology and Training Center just outside of Waynesburg, Pennsylvania.

Career center representative Alison Hall works on the computer looking to place out of work coal miners at the Mining Technology and Training Center just outside of Waynesburg, Pennsylvania. REUTERS/Aaron Josefczyk

EMPTY SEATS

The Pennsylvania Department of Labor has received about $2 million since 2015 from the federal POWER program, an initiative of former President Barack Obama to help retrain workers in coal-dependent areas. But the state is having trouble putting even that modest amount of money to good use.

In Greene and Washington counties, 120 people have signed up for jobs retraining outside the mines, far short of the target of 700, said Ami Gatts, director of the Washington-Greene County Job Training Agency. In Westmoreland and Fayette counties, participation in federal job retraining programs has been about 15 percent of capacity, officials said.

“I can’t even get them to show up for free food I set up in the office,” said Dave Serock, an ex-miner who recruits in Fayette County for Southwest Training Services.

Programs administered by the Appalachian Regional Commission, a federal and state partnership to strengthen the region’s economy, have had similar struggles. One $1.4 million ARC project to teach laid-off miners in Greene County and in West Virginia computer coding has signed up only 20 people for 95 slots. Not a single worker has enrolled in another program launched this summer to prepare ex-miners to work in the natural gas sector, officials said.

Greene County Commissioner Zimmerman said he’d like to see a big company like Amazon or Toyota come to southwestern Pennsylvania to build a distribution or manufacturing plant that could employ thousands.

But he knows first the region needs a ready workforce.

Amazon spokeswoman Ashley Robinson said the company the company typically works with local organizations to evaluate whether locations have an appropriate workforce and has no current plans for distribution operations in Western Pennsylvania. Toyota spokesman Edward Lewis said the company considers local workforce training an “important consideration” when deciding where to locate facilities.

Students sit in a training class at the Pennsylvania Career Link office located in Waynesburg.

Students sit in a training class at the Pennsylvania Career Link office located in Waynesburg. REUTERS/Aaron Josefczyk

SIGNS OF LIFE

For Sean Moodie and his brother Steve spent the last two years working in the natural gas industry, but see coal as a good bet in the current political climate.

“I am optimistic that you can make a good career out of coal for the next 50 years,” said Sean Moodie.

Coal jobs are preferable to those in natural gas, they said, because the mines are close to home, while pipeline work requires travel. Like Sylvester, the Moodie brothers are taking mining courses offered by Consol’s recruiter, GMS.

Bob Levo, who runs a GMS training program, offered a measure of realism: The point of the training is to provide low-cost and potentially short-term labor to a struggling industry, he said.

“That’s a major part of the reason that coal mines have been able to survive,” he said. “They rely on us to provide labor at lower cost.”

Clemmy Allen, 63, a veteran miner and head of the United Mineworkers of America’s Career Centers, said miners are taking a big risk in holding out for a coal recovery.

He’s placing his hopes for the region’s future on retraining. UMWA’s 64-acre campus in Prosperity, Pennsylvania – which once trained coal miners – will use nearly $3 million in federal and state grants to retrofit classrooms to teach cybersecurity, truck driving and mechanical engineering.

“Unlike when I worked in the mines,” he said, “if you get laid off now, you are pretty much laid off.”

 

Follow Trump’s impact on energy, environment, healthcare, immigration and the economy at The Trump Effect – https://www.reuters.com/trump-effect

 

 

(Editing by Richard Valdmanis and Brian Thevenot)