Updated from 2:50 p.m. EDT with a Romney campaign response and additional information throughout
NEW YORK (TheStreet) -- Mitt Romney has blamed Barack Obama's policies for coal miner Alpha Natural Resources' (ANR) plans to cut 1,200 jobs, which the company attributed to evolving demands of a changing global coal market.
The Romney campaign blasted out an email Tuesday that blamed Obama's policies for eliminating coal jobs in Virginia, West Virginia and Pennsylvania, and linked to an article from The Associated Press that reported on a statement from Alpha Natural Resources.
"Today's news that the President's policies are killing another 1,200 jobs in states like Virginia, West Virginia and Pennsylvania is just the latest evidence President Obama hasn't delivered for middle-class families," Ryan Williams, a Romney spokesman, said in a statement.The coal miner said it would make operational adjustments between now and early 2012 to reduce about 1,200 positions from its current work force of 13,100 employees. Effective immediately, the company said it would eliminate 400 positions, with some employees moving elsewhere in the organization. Romney's campaign consistently has blamed Obama for the coal industry's woes, as miners and railroads have seen shareholder value shrink, largely due to cheap natural gas prices. As demand for thermal coal -- the coal used as an input for electricity generation -- in the United States has fallen, Alpha Natural Resources has said it believed it had opportunities to advance its footprint overseas. Part of that will be with thermal coal, but the company said it forecast a 100-million ton increase of seaborne metallurgical coal by the end of the decade. Democratic allies of the president in coal mining states haven't been his biggest cheerleaders because coal cuts are at an early stage and their own political lives are at stake to try and protect those jobs and the industry that has been a staple for more than a century. Alpha said that it would be reducing annualized coal production and shipments about about 16 million tons, 40% of which would be on the thermal coal side as a result of a smaller domestic demand. When asked why the Romney campaign had blamed Obama for Alpha's layoffs, spokeswoman Andrea Saul responded in an email: "You've seen this?" followed by a link to an AP story on the USA Today's Web site that quoted company CEO Kevin Crutchfield saying they faced "a regulatory environment that's aggressively aimed at constraining the use of coal." In an interview with Reuters, Crutchfield expanded his comments to include cheap natural gas prices as part of a "doubled edged sword" the company faces. An Environmental Protection Agency rule that goes into effect in 2016, the utility MACT, would not favor coal as an input for power plant electricity generation without significant upgrades to coal plant technology, but current market conditions suggest that energy companies may not prefer coal over natural gas for reasons distinct from the EPA rule. "As shale-derived natural gas has become cheaper in the past few years, many U.S. power companies are opting to use it, rather than thermal coal, to generate electricity. U.S. demand for electricity has slipped so far in 2012, and coal and natural gas now have nearly equal shares of the power-generation market. Coal has had the larger market share," Reuters reported. Beyond thermal coal, Alpha said it would reduce production of metallurgical coal. Met coal reductions largely have come as a result of a steep and recent drop in spot market prices due to decreased demand in China and India, rather than any tie to U.S. energy policy. "ANR's cuts extend a global trend that has been building in recent weeks, including BHP Billiton (BHP), Xstrata, Rio Tinto (RIO) and Vale (VALE) in Australia, and CONSOL (CNX), Patriot Coal, and Cline Mining in the U.S," J. Christopher Haberlin, an analyst at Davenport & Company, wrote in a research note. Haberlin added that the met coal production cuts announced by Alpha Natural seemed "relatively modest", and that it would not be surprising if more cuts came. "We had figured more met would be idled given a sharp downturn in pricing, slowing global steel production, and easing supply...More met cuts are needed industry wide to reverse the downtrend in met pricing in our view," Haberlin wrote. Analysts and businesses directly and indirectly tied to the coal industry have been predicting rocky times ahead. "I suspect if natural gas prices are close to what they [currently] are for one, two years more, you're going to start to see some [coal] bankruptcies," Mike Tian, an equity analyst who covers coal for Morningstar, said in an interview in May. Patriot Coal declared bankruptcy in July. -- Written by Joe Deaux in New York. >Contact by Email.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV