Wednesday, August 19, 2015

Climate activist plans to turn bankrupt Patriot Coal mines in Appalachia into tree projects

Tom Clarke
"Tom Clarke, a Virginia hospital executive and climate activist, is crafting a first-of-its-kind deal in which investors concerned about climate change take over mines along with hundreds of millions of dollars in liabilities," Mark Drajem reports for Bloomberg. Clarke, who has been grabbing bankrupt Patriot Coal mines in Appalachia for the low price of $0, "plans to sell the coal bundled with carbon credits accrued from planting trees, something he thinks will appeal to utilities trying to meet new power-plant regulations."

This isn't Clarke's first foray into the coal industry. After being outwardly critical of Southern Coal, he eventually worked as an unpaid consultant for owner Jim Justice to help the company fix problems that led to more than 300 violations.

Clarke’s group, the Virginia Conservation Legacy Fund, "plans to acquire 153 mining permits and equipment from Patriot," Drajem writes. "Instead of paying Patriot for the assets, it’s pledging to operate one mine, assume $176 million in liabilities to clean-up the company’s old mining operations and commit $109 million for pension and Black Lung obligations. Ownership of the new entity will be divvied up among the nonprofit conservation fund, miners, retirees, management and unsecured creditors. The new company plans to sell 4 million tons of coal a year from the Federal Mine in West Virginia. In addition, workers from two other Patriot mines would be put to work on reclamation projects."

"The new twist is that the deal is predicated on the idea that coal states will turn to this combination of coal with massive tree planting as a way to offset emissions and comply with new rules from the Environmental Protection Agency," Drajem writes. "The conservation fund joined with GreenTrees, which replants trees to generate carbon credits. The new company plans to join the coal from the mine with reforestation credits and so effectively sell a lower-carbon alternative to coal."

"However, it’s not clear that kind of program would qualify under the EPA rules, a risk Clarke acknowledged," Drajem writes. "Clarke said he’s talking with coal-dependent states about including this option in their plans to the federal agency, and one is committed to doing so."

Environmentalists and coal miners are not sure what to think of the plan, Drajem writes. Bruce Nilles, the head of the Sierra Club’s Beyond Coal campaign, told Drajem, “We are still reviewing the details of this proposal and so are not ready to conclude good or bad.” Phil Smith, a spokesman for the United Mine Workers of America, told Drajem, “The good news is that the potential exists for jobs to remain here. But we don’t know enough yet about the organization itself.” (Read more)

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