Citing pandemic, coal lobby seeks lower tax for black-lung care

Cash flow is tight, say industry representatives, making the black-lung tax onerous; miner advocates call request 'outrageous'

Coal miners attended a June ceremony where Environmental Protection Agency Administrator Scott Wheeler signed the Affordable Clean Energy final rule at EPA headquarters. (Win McNamee/Getty Images)
Coal miners attended a June ceremony where Environmental Protection Agency Administrator Scott Wheeler signed the Affordable Clean Energy final rule at EPA headquarters. (Win McNamee/Getty Images)
Posted April 28, 2020 at 3:22pm

As the economic threat of the coronavirus pandemic emerged, a mining trade group wrote to Congress with a familiar request: reduce the tax rate coal companies pay to take care of black-lung disease victims and their widows.

That letter delivered in March was part of the mining industry’s efforts to cut its expenses, partly by tying its troubles to the pandemic. 

Mandatory lobbying disclosures for January to March show the National Mining Association spent $313,000 to have discussions with Congress and the administration on a number of issues, including the black-lung excise tax and coronavirus economic relief legislation as it argued the pandemic was hurting the coal industry. 

That spending was up from the $255,000 the group spent the last three months of 2019, although slightly below the $330,000 in the first quarter last year. 

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Because the group lobbied on several issues, and did not comment on its lobbying activity, it’s difficult to know exactly how much was directly spent on the black-lung issue.

The excise tax funds the Black Lung Disability Trust Fund, a financially beleaguered program established in 1977 to help pay for the health and living expenses of sick coal workers whose employers have gone bankrupt, and their beneficiaries.

Prolonged inhalation of coal dust can cause black-lung disease or pneumoconiosis, which leads to respiratory illness, disability and premature death, according to the Centers for Disease Control and Prevention.

Cash flow

Connor Bernstein, a spokesperson for the National Mining Association, said the group doesn’t typically comment on its lobbying activity. But, he said, the economic challenges from the coronavirus crisis are affecting all industries, including mining, and that the industry is especially concerned about “cash flow” and the availability of credit.

Bernstein said the black-lung trust fund has been troubled from inception and won't be solved by the tax. He added that coal companies already pay in other ways to support benefits for black-lung sufferers. 

“Our hope is that the government is willing to work with us to find ways to ease the economic burden on the industry during this time to ensure mining companies can weather this storm and keep miners employed,” Bernstein explained in an emailed response.

In 2018, the industry successfully lobbied to get Congress to allow the black-lung tax rate to drop. The rate fell in January 2019 to 50 cents per ton of underground-mined coal from $1.10 per ton the year before. The 55-cents-per-ton tax on surface coal also dropped to 25 cents per ton. 

Under pressure from advocates and some lawmakers supporting coal miners, Congress at the end of last year reinstated the higher rate until December 2020. The mining group wants Congress to immediately revert to the lower rate.

On April 14, the White House added National Mining Association President and CEO Rich Nolan to a group of energy industry executives picked to help the administration work toward “unparalleled American prosperity” after the coronavirus pandemic. That appointment places the association in position to sway policy in the industry’s favor, even as the administration has already rolled back several regulations coal companies blamed for their troubles.

The association’s lobbyists include Ryan Jackson, the former chief of staff to EPA administrators Andrew Wheeler and Scott Pruitt. 

Companies

Individually, coal companies such as Arch Coal, Peabody, Consol Energy and Murray Energy also cited the black-lung excise tax in their lobbying disclosures. Even though Murray Energy filed for Chapter 11 bankruptcy protection in October,  it spent $100,000 in the first quarter of this year, up from the $80,000 in the final three months of 2019, although slightly below the $110,000 in the 2019 first quarter.

Coal’s problems predate the coronavirus pandemic, a reality the mining association acknowledges, but blames on Obama administration environmental policies. Coal has been on a steady decline for years as utilities prefer cleaner-burning natural gas and renewables. Coal now contributes just about 23.5 percent of the U.S. electricity generation, according to the Energy Information Administration, which predicts the fossil fuel will be surpassed by renewable sources such as wind and solar by 2021.

“The coal industry is taking advantage of the country’s current circumstances to advocate for policies that are completely unrelated to the current crisis,” House Natural Resources Chairman Raúl M. Grijalva, D-Ariz., and Rep. Matt Cartwright, D-Pa., wrote in a letter to congressional leaders last month. 

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The lawmakers instead urged congressional leaders to direct federal help toward “the workers, families, and communities that are being hardest hit by this crisis.”

According to Whitesburg, Kentucky-based Appalachian Citizens’ Law Center, which advocates for coal workers and their families, the incidences and severity of black-lung diseases have increased even as the coal industry has declined. 

The group spent less than $5,000 on lobbying during the first three months of this year, and in Q4 2019 and down from the $20,000 it spent in 2019’s first quarter. 

A study by the Harvard T.H. Chan School of Public Health found a link between long-term exposure to pollution and a higher death rate from COVID-19.

“It is outrageous that coal companies are trying to use this new health and economic crisis as an excuse to stop paying this tax, especially when miners with black-lung disease have compromised lungs and are thus among the most vulnerable to COVID-19," Rebecca Shelton, a spokesperson for Appalachian Citizens’ Law Center, said.

Legislation

Several lawmakers have introduced legislation to extend the higher rate of the black-lung tax. A bill by Rep. Robert C. Scott, D-Va., aims to “ensure the solvency of the Black Lung Disability Trust Fund” by extending the excise tax on coal to December 2029. A bill by Senate Energy and Natural Resources ranking member Joe Manchin III, D-W.Va., would extend the tax until December 2030. Neither bill has been voted on.

Last week, the National Black Lung Association and several local black-lung groups wrote to Congress asking it to maintain the current rate of the tax and prioritize extending the rate at its current level for the next decade.

“We sacrificed our lungs and our health to feed our families and power America,” the groups wrote. “The COVID-19 pandemic is a new hazard that threatens our health and the health of working miners.”