September 18, 2011

Coal Miners Rely on Tax Breaks for Jobs

Print More

POTEAU — Vince Smedley, 40, doesn’t know a lot about tax credits. But he knows what he would do if he lost his job operating a continuous miner machine 500 feet below ground in Le Flore County.

“I would have to move somewhere, because it’s all I’ve ever done,” said Smedley, who has worked in surface and underground mines since he graduated from Poteau High School.

Smedley is one of about 50 people employed in Oklahoma by Georges Colliers Inc., which operates an underground mine near Stigler that currently provides all of the Oklahoma coal burned in the nearby AES Shady Point power plant.

Of all the firms affected by the fight over Oklahoma’s coal credit, Georges Colliers probably has the most to lose. Ever since the coal credit was temporarily suspended in 2010 to help balance the state budget, Shady Point has been boosting its payments to Georges Colliers to keep the firm afloat until the credit kicks back in next year.

If the Legislature kills the coal credit, Shady Point officials say they probably will stop buying Oklahoma ore altogether and switch to 100 percent Wyoming coal, which is cheaper. If that happens, Georges Colliers probably will shutter its mine.

“Yes, it’s critical for us to have it for our survival, but it’s also a good deal for the state,” Georges Colliers President Craig Jackson said.

Before the Shady Point plant began operating in 1991, the unemployment rate in Le Flore County topped 14 percent. By the late 1990s, it had fallen below 4 percent. It stood at 9.4 percent in July.

“Our employees, on average, are making about $50,000 a year,” Jackson said. “There’s no place else these guys are going to go and make that kind of money without a college degree. And let’s face it, not everybody’s going to go to college.”

Smedley’s job at the P-8 North mine is a case in point. He spends his days operating a 60-ton, 1,000-volt, remote-controlled mining machine that looks like a mechanical alligator with an 11-foot jaw. Steel teeth on a big rotating drum cut 20-foot channels into a 5-foot-high seam of coal.

“I mined 235 feet today,” Smedley said after arriving home and flipping on most of the lights in his house. He does that to compensate for working in the dark nine hours each day.

Over in Haskell County, electrician Gene Culpepper has worked for Farrell-Cooper Mining Co. for 19 years. He keeps the massive dragline machine running and services other equipment at the company’s Liberty No. 7 open-pit mine.

Farrell-Cooper has about 90 employees working in its two Oklahoma mines. Their jobs appear secure, because most of Farrell-Cooper’s production is being sold to China’s burgeoning steel industry at high prices that make it ineligible for the state coal tax credit. Even without the credit, the company is making money.

But there was a time when Farrell-Cooper was highly dependent on the credit. For 17 years, the company provided most of the coal burned in the Shady Point plant. It successfully lobbied to expand the credit to coal mine operators.

Culpepper, who lives in Hontubby near Heavener, said many of Farrell-Cooper’s Oklahoma employees are older men who are counting on keeping their jobs until they reach retirement age.

“You take Smiley, lives up at Morris,” Culpepper said, referring to a dozer operator who got his nickname because “he ain’t smiled in 20 years.”

“He don’t drive 70 miles, one way, every day because he likes to drive. He’s 60 years old, four or five years away from retirement. If that man loses his job, what’s he gonna do?”

Related stories:

The tale of the transferable tax credit

Coal tax credits cost that state $60M in eight years