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W.Va. coal industry rejects Democrats, even when it's one of their own

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W.Va. coal industry rejects Democrats, even when it's one of their own

A distressed West Virginia coal industry is lined up behinda Republican car salesman candidate even though it has the option to put one ofits own executives in the governor's office.

The West Virginia Coal Association is backing state Sen.Bill Cole and eschewing Democrat candidateJim Justice, a billionaire coal executive. The endorsement is of the state industrymoving away from theDemocrat party.

Murray Energy CEO Robert Murray addresses the Tug Valley Mining Institute in Chapmanville, W.Va.

Photo: Sarah Smith

"I personally think Jim Justice is probably a prettygood guy," said Chris Hamilton, senior vice president of the West VirginiaCoal Association. "The main reason I'm against him is because he's aDemocrat."

Justice is not listed as a member of the West Virginia CoalAssociation on the organization's website.

West Virginia was led by a Democratic legislature fordecades. Since victories in 2014, Republicans have run the show as Democrats inthe state have struggled to distance unpopular national positions.

"I've been a lifelong Democrat up until just a fewyears ago and I changed to independent," Hamilton said at the Tug ValleyMining Institute where he and Cole were speaking. "I submit to you thatthe state of West Virginia Democratic Party is a mirror image of the nationalDemocrat party today."

Hamilton touted legislative accomplishments under Republicanrule, including aims to turn West Virginia into a right-to-work state, tortreform and revised mine and safety laws.

"We have accomplished more as a business community, asthe state's coal industry, during the four years that Bill Cole has been in thestate senate than we have in the 30 plus years we worked the capitol,"Hamilton said. " … I don't know if it's too late, too little. I can't tellyou if we're past the point of no return. But if there's any kind of a silverlining in this industry right now, it's the leadership we have in Charleston,W.Va., with Sen. Bill Cole running the state Senate."

State Del. Rupie Phillips, D-Logan, was the only campaigningDemocrat in the state to receive any positive acknowledgment from the industryat the Sept. 15 event. Phillips, with the license plate "COALDEL" hasbeen an avid supporter of the industry and publicly called President BarackObama a "terrorist"over his actions affecting the coal industry.

Cole, the owner of an automotive sales company, has pledgedto fight against a federal government that has "done everything" to "destroy"the state's coal industry.

"I'm going to continue to work to be supportive ofmoving the industry ahead in every way I can," Cole told S&P GlobalMarket Intelligence.

Since a sector-wide peak in coal employment at the end of2011, West Virginia has lost about 53% of its coal mining . Production has fallen from 34.1million tons in the final quarter of 2011 to just 19.6 million tons in secondquarter of 2016.

Cole has indicated he would push to remove or reduce a coalseverance tax and when it comes to the state's compliance plan for the CleanPower Plan, "may not approve one period." He told the coal industryaudience that Democrats in the state "took advantage" of coal and thestate "got caught riding a one-trick pony."

"We have to get off the backs of coal," Cole said.He also suggested taxpayer money could go toward building "clean coal"power plants in West Virginia.

"That's not a pipe dream," Cole told the crowd. "That'sreal."

Republican gubernatorial candidate Bill Cole addresses the Tug Valley Mining Institute in Chapmanville, W.Va.

Photo: Sarah Smith

The federal government has had $8 billion on the table foradvanced fossil fuel projects since 2006, but the industry has not takenadvantage. An S&P Global Market Intelligence found the few projects thatattempted to qualify for the funds backed off when natural gas prices sank torecord lows and shifted the economics of coal projects.

In an interview after his speech, Cole said a "reasonablereduction" in coal's severance tax would likely put miners back to work.He indicated the timeline for such a reduction could be after other tax reformor perhaps at a time when the state's budget is not so precarious.

"I really think there's a genuine return on thatinvestment," Cole said. "Sometimes, it's a little harder to prove, soit's a little bit of a leap of faith perhaps. But, I think when our surroundingstates are at zero and 10 cents a ton, respectively, it makes sense to keep ourWest Virginia coal companies and coal competitive."

Severance tax collections are already down significantlybecause production has been shrinking and prices remain depressed. A West VirginiaUniversity Bureau of Business and Economic Research in early 2015 suggested verylimited benefits in net employment and production from dropping the severancetax.

However, MurrayEnergy Corp. CEO Robert Murray has insisted there would beextensive benefits to dropping the tax. Murray estimates about 1,261 coalindustry jobs would be saved by shedding a 3% severance tax collection andadditional 56 cents per ton tax on coal.

Murray, who Cole called a "true hero" with a "heartof gold" that "epitomizes the American dream," sat beside ofCole at the meeting and touted his support of the candidate. Murray said threewords have killed coal — "natural gas and Democrats." He told thecrowd that while many of them may be lifelong Democrats, "the Democratparty left you."

Murray, who lives in Ohio but has operations in WestVirginia, insisted the industry needs Cole running the state. He was heavilycritical of Justice who Murray chastised at the meeting for not supporting acoal tax severance reduction as well as for multiple reports of issues Justicehas faced in the courts over unpaid fines and bills.

"He ought to pay his bills because he's giving the restof us in coal a bad reputation," Murray said to an applause from others inthe industry. A representative of Justice's campaign declined to commentregarding the coal industry's support and Murray's criticisms.

Murray also used his speaking opportunity to further hissupport of Donald Trump for president.The coal CEO said he has spent "considerable private time" with thepresidential candidate and said he was a "" that would "surroundhimself with the very best people in the country to get advice."

"He will use people running the country, who knowsomething, to helphim run the government," Murray said. "I'm one of his energy guys.What do you think I'm going to tell him? I already have. He knows it."