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Thursday, March 23, 2006 03:38 pm

The return of King Coal

Farmers in central Illinois fight a new threat — a method of mining that will change their land forever

art2907
COVER ILLUSTRATION BY MATTHEW SCHULTZ
Montgomery County Board member Ed Helgen says it was a big secret: No one came because no one knew. “There might have been six or eight people there, but they wasn’t there for that,” he recalls of the board meeting in December 2004 when he landed on the losing end of the 18-2 vote. Not so, insists board Chairman Mike Havera. He says that the county did everything by the book — legal notices in the local newspaper, no closed-door meetings. “The manager of the Farm Bureau was there — he never said a word that I know of,” Havera says. One thing is abundantly clear: The County Board that night, quite literally, sold the ground out from under a whole lot of farmers by conveying mineral rights for 120,000 acres to a West Virginia-based coal-mining conglomerate. The farmers are, to put it mildly, really mad. A federal lawsuit has been filed and dismissed. Hundreds of angry landowners have turned out for meetings aimed at quelling fears, which hasn’t happened, and galvanizing opposition, which has, by all appearances, been growing. Bumper stickers and yard signs are out. A political consultant has been hired to publicize a campaign aimed at scuttling mining plans. Last week, the same board that voted to sell mineral rights to the Colt Coal Co. voted 17-4 to put the matter on the November ballot: Shall the company’s planned mine be allowed in Montgomery County? By themselves, county officials don’t have the power to stop the proposed mine, but the Illinois General Assembly does. If county voters say nay, state Rep. Gary Hannig, D-Gillespie, promises to push for a bill applying only to Montgomery County that would prohibit a type of mining that is fast becoming the method of choice throughout a state that sits atop one of the biggest deposits of coal in the nation. “It’s the good old democratic way of deciding things,” Hannig says. “Both sides have a fair chance.” Farmers are facing powerful interests. Besides Colt Coal, which is paying $7.2 million for the mineral rights and promises additional royalties to the county that could add up to another $3 million per year, state government is on the side of mining companies that receive millions of dollars in public subsidies to encourage the sort of mining the farmers oppose. “Money’s driving this,” says Mark Bertolino, whose family has been farming in Montgomery County since the 1830s. “We haven’t had any vigilante rallies or burned anybody’s house, but emotions are running high and so is patience. I hope everything is going to be resolved in some sort of peaceful manner — but I’m worried.”  
Bertolino was thinking more about corn than coal when some workers showed up on his property in the summer of 2004. “They wanted to drill on my land,” he recalls. “That was the first I’d ever heard of this.” Bertolino farms about 3,000 acres, and the workers wanted to gauge just how much coal might be under his corn, soybeans, and wheat. Bertolino started checking deeds and discovered that the rights to the coal beneath his land had been sold long before he was born. As early as 1906, speculators bought the rights to mine beneath hundreds of thousands of acres throughout central Illinois. Save for Montana, there is more coal here than in any other state. There are more BTUs in Illinois coal, experts figure, than in all the petroleum reserves of Kuwait and Saudi Arabia combined. Put another way, we have enough coal to supply electricity to 6 million homes for 500 years. It’s a resource that’s gone largely untapped, especially since Congress strengthened the Clean Air Act in 1990. Because of its high sulfur content, Illinois coal can’t be burned in power plants without using expensive scrubbers that remove sulfur dioxide. Coal production has plummeted from 62 million tons in 1990 to roughly half that amount today, but production has increased slightly during the past two years as utility companies and municipalities either install scrubbers or build new plants that can burn local coal and still meet federal standards. Springfield’s new power plant, scheduled to go online in 2009, will be able to burn high-sulfur coal. Coal companies saw it coming. About five years ago, they began scouting central Illinois, leasing, buying, and acquiring options on coal rights that went into public ownership after previous owners either quit paying taxes on them or negotiated the transfer of rights to counties to avoid paying taxes. In Montgomery County, for example, Chevron and Exxon about 10 years ago paid the county roughly $60,000 to get rid of rights on 120,000 acres that the County Board sold to Colt for $7.2 million in 2004. Besides Colt, IEC (Montgomery) LLC, a corporation that appears to be based in Alabama, acquired mining rights for 85,000 acres in Montgomery County in 2003. Just who owns IEC is a mystery. Scott Helmholz, a Springfield lawyer who represented IEC in a lawsuit filed by Montgomery County landowners, did not return a phone call from Illinois Times. Phillip Gonet, president of the Illinois Coal Association, says he doesn’t know who’s behind IEC, although Helmholz once called him to discuss mining issues. “I said, ‘Who are you representing?’ ” Gonet recalls. “He said, ‘I can’t tell you.’ ” It’s this sort of secrecy that has farmers worried. “For my people, it’s very troubling that promises are being made by entities that exist on paper and that no one has heard of,” says Patrick Shaw, a Springfield lawyer who represents Montgomery County landowners opposed to proposed mines. “From the mine’s perspective, they will have to have somebody on paper who is the operator of the mine and has a paper trail that the state can track. But it’s not comforting for folks who live there who have long-term interests.” Few landowners wanted the coal rights when they went on the block. In Bond County, for instance, John Davis, who owns 10 acres, was one of the few who went down to the courthouse and wrote a check after spotting a sale notice in the local newspaper. He paid less than $100 about four years ago. “They didn’t know it was for sale, most of the people,” says Davis, who now fears that the value of his property will drop if the land around his is mined. The Bond County Board has since leased coal rights on 60,000 acres to Colt, the same company that acquired mining rights in Montgomery and surrounding counties so that it and its affiliated companies now control mining rights on more than a quarter-million acres in Illinois. Colt is a subsidiary of Cline Resource and Development, based in West Virginia. Company owner Chris Cline owns or has interests in at least 16 mines in Appalachia, according to records at the West Virginia secretary of state’s office and the federal Office of Surface Mining. Coal-trade publications and public records portray Cline as a hard-nosed operator who plays for high stakes and keeps insiders guessing about where he’ll go and what he’ll do next. In 1999, he closed down a West Virginia mine on the same day workers voted to unionize, then reopened it without union workers. In 2004, he contributed $30,000 to a group that helped defeat a reelection bid by a West Virginia Supreme Court justice who was considered hostile to coal-mining interests and gave another $19,500 to state legislative and judicial candidates from both parties. Cline’s companies are privately owned, so his finances and future plans are largely a matter of conjecture, and no one from headquarters in West Virginia returned a phone call. But Cline appears to be shifting his focus from Appalachia to Illinois. In 2001, just as interest was picking up in Illinois coal, Cline started doing business with ArcLight Capital, a Boston investment firm with $2.5 billion in capital. According to the coal-trade press, ArcLight has purchased at least five of Cline’s mines in West Virginia, although West Virginia and federal records show that Cline is still president of those mining concerns. Last summer, ArcLight announced the formation of a new company called Magnum Coal, which would take over four of those West Virginia mines. ArcLight and Cline have also been doing business together in Illinois. Last year, Steelhead Development, a Cline-owned company, announced plans to supply coal to a proposed plant near Marion that would convert coal to natural gas. The proposed plant would be built by a company owned by ArcLight, which has also announced plans to build a coal-gasification plant elsewhere in Illinois on a site yet to be selected. Cline-controlled companies are already building a mine in Williamson County and have applied for permits for another in Franklin County. Money and savvy like this make Bertolino and other farmers nervous. They’re not opposed to mining per se, they say; it’s the way coal would be taken out of the ground that has them in an uproar. “It boils down to love of the land or love of the money,” says Randy Singler, chairman of the Montgomery County Farm Bureau’s conservation committee.
Even the most extreme environmentalist has to admit that longwall mining is a technological marvel. Miners assemble huge machines hundreds of feet beneath the earth’s surface. The machines munch up coal seams in swaths more than 1,000 feet wide and three miles long, taking out virtually every nugget of coal and sending it to the surface on conveyor belts. The machines can gobble up 750 acres in a year’s time. Once the coal seam is gone, the ground collapses in the machinery’s wake. In Montgomery County, geologists figure, the surface will sink more than 4 feet as the earth above the excavated coal fills the void. You don’t have to be a scientist to imagine what kind of effect this can have on buildings and roads, not to mention flat-as-a-pancake farmland. Farmers are worried that their fields will turn into wetlands. Folks with wells fear that their water will dry up. Bottom line, they’re afraid that longwall mining will, at best, be an expensive headache and, at worst, make farming impossible. Longwall mining, they say, is essentially a manmade earthquake that will change the topography of the land forever. Montgomery County farmers don’t have to go far to see what can happen. In neighboring Macoupin County, the Monterey Coal Co., a subsidiary of Exxon, has been longwall mining since 1994. Thousands of snow geese rise as single cloud from acreage that’s become a lake. Roads are cracked and closed. Storage sheds are noticeably tilted. There hasn’t been much controversy because Monterey bought the farmland under which its mine has gone, underscoring just how much money the coal is worth. “No Trespassing” signs are posted outside boarded-up farmhouses sitting atop cracked foundations.  “Prior to this, this ground was worth $4,000 to $5,000 [an acre],” says David Pastrovich, chairman of the Montgomery County Soil and Water Conservation District. “Now, I wouldn’t give you $1,500 for it.” Proponents of longwalling say that this can be fixed. With enough ditches and culverts, they say, the land will be drained and become good as new. Dan Barkley, an engineer and land subsidence expert with the Office of Mines and Minerals in the Illinois Department of Natural Resources, notes that longwall mining has been going on in Illinois since the 1970s. “I think it’s important to point out that what the people are looking at in Macoupin County is not the final product,” Barkley says. “That’s temporary, and it will be repaired.” Colt Coal hasn’t yet applied for a state mining permit in Mongomery County. When — and if — it does, the Department of Natural Resources will require the company to either post a bond or obtain liability insurance to cover damages if the land isn’t restored, state officials say. If a house, barn, or other structure is damaged, the company must repair, replace, or pay fair value to the owner. The company must also compensate farmers for the value of any crops lost while mining is under way, they say. In any event, the state and legal experts say, mining can’t proceed unless the mining company has subsidence rights for a given piece of property. Who owns the subsidence rights depends on what was included in mineral rights sold as long as a century ago. Typically, deeds for coal that include subsidence rights say that the owner of the coal has the power to remove coal “without liability for damages to the surface.” Farmers contend that “damages to the surface” has an entirely different meaning in today’s world of longwalling than it did in the early part of the 20th century, when cave-ins were unintentional. They say that they could live with an occasional sinkhole, but not a wholesale collapsing of the earth, no matter how much Colt Coal is willing to pay or what assurances state officials might offer. “I don’t want compensation — I want my land like the Lord created it,” Pastrovich says. Colt has subsidence rights to about 40 percent of the 120,000 acres for which it possesses coal rights. Nonetheless, James Morris, vice president of the mining company, says that mining can proceed. “We believe there’s adequate areas of land [to mine], number one,” he says. “Secondly, we believe we can offer a deal that’s attractive to surface owners. With people who are very familiar with longwall mining, it’s not a difficult sales job. Longwalling accounts for a little over 10 percent of the coal produced in the United States. That’s right at 100 million tons a year.” But longwall mining has come under fire in Pennsylvania and West Virginia, where, environmentalists say, mines have disrupted stream flows, dried up ponds, polluted aquifers, and permanently damaged historic buildings. New longwall mines are rarely permitted in West Virginia, where Cline raised industry eyebrows in 2000 when he applied for, and eventually got, a permit for a new longwall operation. Pennsylvania environmental officials have also slowed down permitting. The coal industry dismisses such concerns in Illinois, saying that the topography and geology are entirely different. “There has not been ruined property or ruined farmland because of longwall mining in Illinois,” says Gonet, the head of the Illinois Coal Association. “Comparing Illinois to Pennsylvania is like apples to oranges.” In Illinois, the state is actively encouraging longwalling and other forms of mining. The state last year passed laws aimed at making it easier for companies to sell gas extracted from coal. The state in 2005 also made new coal-gasification plants eligible for state tax incentives and passed a law encouraging the use of waste from coal combustion to be recycled into road-paving material. The state has pledged at least $800 million in financing for new coal-fired energy plants. Beyond that, the state regularly hands out millions of dollars in subsidies to coal mines. Last year, Gov. Rod Blagojevich gave about $15 million in grants to the mining industry, including nearly $1 million to the Monterey Coal Company in Macoupin County to upgrade longwalling equipment. Jobs justify the subsidies, according to the government and the coal industry. “We’d have a couple hundred people employed here,” Morris says. The company wants to start digging as soon as 2008, he says. Colt also hopes to find a partner to build a gasification plant, a project that could cost $1 billion or more. With jobs and that kind of money at stake, even opponents of longwall mining aren’t sure that the County Board would make a different decision if it could vote again on selling coal rights. “There are folks who are very much for this coal mine coming in,” says George Blankenship, one of two County Board members who voted against selling the coal rights. “There would be a lot more talk and discussion about it, but there’s a lot more other folks than there are farmers.” Scott Schluckebier, whose family farms 1,500 acres, says that a split has developed between farmers and townsfolk in the county. “The town people are thinking we’re against the mines,” he says. “People think we’re anti-jobs. We’re not. We just want to be treated fairly. A mine would be great for the economy in Montgomery County — but if you dig a trench that big, you’re forever changing the landscape of the earth.”
Time and again, farmers say that they wouldn’t object to room-and-pillar mining, a more traditional form of extraction that takes out slightly more than half of the coal and leaves the rest behind to support the earth. That’s not realistic because of economics and geology, Gonet says. “With room-and-pillar, you leave behind 50 to 55 percent of the coal — if you have a nonrenewable resource, it makes sense to take more of it,” Gonet says. Monterey Coal officials did not return a call from Illinois Times, but Gonet says that the company switched to longwall mining in the mid-1990s because it was too difficult to stabilize the roofs in more traditional mining operations. Although he speaks for the coal industry, Gonet says he expects that Colt will largely be on its own in the longwall referendum campaign in Montgomery County. After all, he notes, coal companies are in competition with each other, and the resource in Montgomery County belongs to Colt. Sounding like a man who’s discovered that a lump of coal in a stocking isn’t all bad, Gonet says that an election isn’t so bad. “After some reflection, I think it’s a good thing,” he says. “This is a referendum on jobs. We’ll see how the total population of Montgomery County feels about longwall mining. I think there’s a silent majority out there that we really haven’t heard from.”
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