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Share of US coal produced by unionized labor force dwindling

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Essential Energy Insights - November 2021


Share of US coal produced by unionized labor force dwindling

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U.S. Sen. Joe Manchin, D-W.Va., speaks at a United Mine Workers of America rally on Capitol Hill in Washington, D.C. with other coal-state lawmakers. Manchin received the endorsement of the UMWA and recently won re-election.
Source: S&P Global Market Intelligence

Nonunion coal mines produced five times as much coal than unionized operations in the first three quarters of 2018, as the number of coal mines with an organized workforce continues to shrink.

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U.S. coal companies produced about 562.9 million tons of coal in the first three quarters of 2018, but only about 87.6 million tons, or 15.6%, came from mines that reported their workforce was represented by a union, according to an S&P Global Market Intelligence analysis of federal data. In 2008, 17% of coal was mined by unionized workers. The drop comes as some coal producers are pushing back against legacy liabilities committed to their union workforce as the companies go through bankruptcy reorganization.

The analysis combines the latest U.S. Mine Safety and Health Administration production data and the union status recorded by the U.S. Energy Information Administration as of 2016. The number of U.S. coal mines dropped from 1,761 in 2008 to 905 by 2016, according to the data; in the same period, the number of union coal mines fell from 122 to 73, with only 46 of those mines reporting coal production in 2018.

The analysis shows just 14 underground eastern U.S. coal mines were reported having unionized status in 2016, down from 36 mines in 2008. Still, those underground union coal mines produced about 49.0 million tons of coal, or 23.6% of the total coal tonnage produced from underground mines east of the Mississippi River.

The largest union coal mine by production, according to the analysis, is Murray Energy Corp.'s Marshall County mine. The company acquired the mine in the purchase of five unionized longwall coal mining operations in West Virginia in a 2013 deal with Consol Energy Inc. Together, the five mines produced about 26.0 million tons of coal in the first three quarters of 2018, roughly 29.7% of all the coal mined by union operations in the U.S. As chairman of the Bituminous Coal Operators Association Inc., Murray Energy CEO Robert Murray led negotiations with union officials over a labor agreement in place until 2021.

The company had issues with the unionized workforce shortly after it bought the coal mines. Murray Energy is fighting allegations of intimidating workers at the former Consol operations following company meetings about a high number of safety issues being reported to federal regulators after the acquisition.

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"There is a long history of UMWA-represented hourly employees filing false safety complaints with the federal government to intimidate management," Murray Energy said in a recent statement about the case. The company has faced pushback from the union over employee terminations, wage agreements, use of nonunion contractors and other workplace disagreements.

The United Mine Workers of America, which did not respond to a request for comment, tells prospective union members that through collective bargaining agreements or a contract, they can "improve their jobs and their lives." The company points to broader statistics saying union members' wages are on average 27% higher than non-union employees doing the same work.

"With a union contract, workers have a strong voice and more secure and safe work environment," the UMWA says on its website. "This creates a more stable and productive workforce, making the company more prosperous and ... better for everyone."

A unionized mine has more resources for reporting safety issues and resolving miners' concerns, said Tony Oppegard, a Kentucky lawyer and a mine safety advocate. However, coal companies have been successful at convincing employees that unions will take an employee's dues with few benefits in return, he added.

"It's the rare employer that wants a unionized workforce; most employers think that it causes them problems," Oppegard said, and the reduced unionization of U.S. coal production has "had an adverse effect on safety."

Speaking at a conference last year as the coal market was beginning to recover from a long downturn, Alliance Resource Partners LP President and CEO Joseph Craft III touted that along with competitive advantages such as its mine operations being well-capitalized, they are also "union free."

"If some or all of our currently union-free operations were to become unionized, it could adversely affect our productivity and increase the risk of work stoppages at our mining complexes," the company warns investors in its annual report. "Many of the benefits of our union-free workforce are related to higher productivity and are not necessarily reflected in our direct costs."

The UMWA is locked in two battles with financially distressed coal producers that are hoping to shed burdensome commitments to their union workforce and retirees, one with metallurgical coal producer Mission Coal Co. LLC and the other with thermal coal producer Westmoreland Coal Co. Westmoreland called its current system of providing retiree medical benefits unsustainable.

Courts interpreting U.S. bankruptcy laws have shown a willingness to drastically reduce coal companies' obligations to their unionized workforces. In some cases, buyers of a bankrupt company's assets have refused to take on liabilities associated with the union, and bankruptcy courts have allowed them to in order to avoid liquidation of a company's assets.

"We, unfortunately, have gained a lot of experience in bankruptcy over the last six years," UMWA President Cecil Roberts said in an October statement after Mission Coal filed for bankruptcy. "We know what is coming and what it is going to take to fight this battle."