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Coal associations 'taking haircuts' to survive alongside producers

Coal associations are feeling the pinch from fewer membersand smaller budgets as the industry continues to navigate a prolonged downturn.

"It's more important today perhaps than it's ever beento get our voice out there and explain what we do," Christian Palich, thepresident of the Ohio Coal Association told S&P Global Market Intelligence.However, he said the associations are "taking haircuts much like ourcompanies do just to survive."

According to Gary Broadbent,spokesperson for Murray EnergyCorp., "thereis no doubt that state and national coal associations have been forced todownsize their workforces."

Echoing a familiar industry sentiment, Broadbent blamed "the disastrouspolicies of the Obama administration and Democrats in general" for thedownturn, adding that the dozens of coal companies that have filed forbankruptcy protection "drastically reduces the number of membercompanies available to support these associations' efforts."

Michael Carey, vice president ofgovernment affairs with Murray, said at the S&P Global Platts 39th Annual CoalMarketing Days Conference in Pittsburgh on Sept. 21 that the coal associationsare doing the best job they can but have fewer dollars with which to operate.

"We just don't have thefunds to do the things we want," Palich added while speaking at the sameconference.

Many of these associations, both on the state and national level,base their membership fees on a percentage of tons produced, with leanerproduction resulting in leaner budgets.

Bill Bissett, outgoing president of the Kentucky CoalAssociation, told S&P Global Market Intelligence that the associations arevery much a reflection of the coal industry.

"If things are expanding, if there's a lot of growth,the association will grow with it," he said. "If there's contraction,I think the association has to contract with it too."

Bissett is oneof a handful of association executives who have announced plans toleave in the past few weeks.

The Wyoming Mining Association a new executive director at theend of September to replace Jonathan Downing, while Stuart Sanderson his position as presidentof the Colorado Mining Association on Oct. 1.

Laura Sheehan, spokesperson for the American Coalition forClean Coal Electricity, will stepdown by Dec. 31, leaving alongside President and CEO Mike Duncan.

While announcing his exit in September, Duncan said a newadministration required new leadership from industry associations such asACCCE.

The limited reach of industry associations has also beenfelt on the political level, with associations funds available for politicalcontributions and lobbying efforts on the federal level during a pivotalelection year

Finding a way through

Not all associations have felt the crunch, however. PhilGonet, president of the Illinois Coal Association, said that even though hisassociation lost dues from ArchCoal Inc. after the company filed for bankruptcy protection, theICA has benefited with the addition of Foresight Energy LP, which became a member after Murrayacquired a significant interest in the company.

Unlike many other state associations, the ICA also sets itsbudget before determining how fees will be divided between members. He said theICA has had challenges, but its advocacy work has not suffered as a result.  

Luke Popovich, spokesperson for the National MiningAssociation, challenged the notion that associations are struggling, notingthat the recent MINExpo International the NMA held in Las Vegas was "anenormous financial success."

"Our coffers are full,relieving dues pressure on members," Popovich said, adding thatenvironmentalists "will have to deal with us for the foreseeablefuture."

Despite the downturn, companies such as Murray would "continue to work closely withthe remaining staff of various state and national coal associations in order toprotect the jobs and family livelihoods of our coal miners, and low-costelectricity for all Americans,"Broadbent said.

"Theneed for these trade organizations is higher than ever, as the Obama administrationand Democrats in Congress continue to promulgate destructive anti-coalregulations, in the 11th hour, in hopes of completely eviscerating what remainsof the United States coal industry," he said.

S&P Global Platts andS&P Global Market Intelligence are owned by S&P Global Inc.