July 5, 2018 Read More →

Meet the mining tycoon who texts with Scott Pruitt

E&E News:

The closures of J.M. Stuart and Killen underline the inexorable issue facing the Trump administration: how to prevent the retirement of coal plants at a time when America is awash with natural gas. It also offers an explanation for the frenzied lobbying in Washington, D.C., where the coal industry has continued to press for a federal lifeline as plant after coal plant shuts down.

Craft is at the center of that effort. But a casual observer might not know his name. Unlike Bob Murray, the cantankerous CEO of Murray Energy Corp., Craft rarely appears in the headlines. The Alliance CEO seldom speaks to the media and keeps a low public profile. Even those within the coal industry said he remains something of an enigma

Craft’s understated public persona belies his wider influence. He donated $1 million to President Trump’s inaugural ceremonies and $775,000 to his 2016 presidential campaign, according to the Center for Responsive Politics. When Trump signed an executive order rolling back a series of Obama-era environmental policies in March 2017, Craft was there to witness it. Documents obtained in a Freedom of Information Act request show Craft was in touch with Pruitt, the EPA administrator, via text message.

Alliance did not respond to requests for comment for this story. But in a January conference call with financial analysts to discuss Alliance’s quarterly results, Craft was asked about his priorities for the Trump administration. Coal plant closures were clearly on his mind.

Alliance has tried to offset the loss of domestic coal plants by sending more coal abroad. In a recent presentation to investors, the company reported that exports would account for more than 22 percent of its sales in 2018, up from 4.5 percent two years ago. The company’s mining output increased slightly in 2017, and Alliance is now taking steps to reopen a shuttered mine to better serve the international market.

Still, exports are a risky bet for America’s coal producers, a fact underlined by the growing threat of a trade war between the U.S. and the world’s other major economies. Analysts said it’s unclear how long companies will be able to rely on foreign sales in the absence of a stable domestic market.

“It’s something that is keeping them afloat or a bonus, but I wouldn’t characterize it as a foundation of their business,” said Chiza Vitta, a coal analyst at S&P Global.

Indeed, Alliance’s revenues have declined along with America’s coal fleet, falling from $2.3 billion in 2014 to just shy of $1.8 billion last year, according to filings with the Securities and Exchange Commission. Profits fell from $544 million in 2014 to $304 million last year.

Critics of DOE’s efforts to sustain the coal industry say it’s based in political favor-giving, not economics. They point to FERC’s unanimous rejection of the initial DOE proposal; the commission said the grid does not face an immediate emergency.

“Trump made a promise with no evidence to bring back the coal industry, and it’s not happening, and it’s not going to happen,” said David Schlissel, director of resource planning at the Institute for Energy Economics and Financial Analysis, a think tank that favors a transition to clean energy. “We don’t know what they’re going to do or how long it’s going to be for. But what we do know is it’s really not needed. It will be a bailout.”

Meet the Mining Tycoon Who Texts With Scott Pruitt

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