Murray CEO predicts doom for coal, says own company will survive

Robert Murray, CEO of Ohio-based Murray Energy, kicked off a gathering of coal interests Monday presenting a gloomy picture of an industry in irreversible decline, a political administration out to get him, and a patient on an operating table waiting for electricity that’s bound to be cut off due to impending coal plant retirements.

“Grandma is going to get cold in the dark,” he said.

The leader of the largest private mine operator in the U.S., Mr. Murray contradicted many more subdued speakers who followed his rousing keynote at the annual Platts Coal Marketing Days at the Wyndham Grand Pittsburgh hotel, Downtown. The conference gathers coal and transportation companies and industry analysts.

When Bruce Hartshorn, senior vice president with Alpha Coal Sales, a division of Virginia-based Alpha Natural Resources, said his company is “reacting to difficult times, shrinking and repositioning our assets,” he stepped on Mr. Murray’s theory that any public company talking about cutting costs and closing mines to adjust to market conditions is headed for bankruptcy.

“You’ve got to be the low-cost producer, and everything else is public relations garbage by public companies that are worried about their stock prices,” Mr. Murray said during his presentation.

And when James Fielding, senior director and analytical manager of commodities with ratings agency Standard & Poor’s, predicted coal prices have likely hit bottom and are bound for a modest increase, Mr. Murray had already offered a different view.

“Contrary to some of the recent coal company statements, there’s absolutely nothing on the horizon that makes me think positively about coal demand and prices through 2015 and perhaps beyond,” Mr. Murray said. “If anything, there’s going to be a continued decline in the next few years.”

Mr. Fielding suggested that while recent carbon regulations proposed by the Environmental Protection Agency will challenge the industry, they won’t be its “death knell.”

On that point, Mr. Murray’s opinion seemed a little conflicted. While he said his company would survive this wave of regulatory action, as it has others, he did warn that this time could be different.

“We have the absolute destruction of the U.S. coal industry,” Mr. Murray said. “It’s not coming back. If you think it’s coming back … you’re smoking dope.”

Mr. Murray has been a colorful and frequent critic of the Obama administration’s policies. His company has at least four lawsuits pending against the EPA, charging it with illegally promulgating rules that will devastate the coal industry in the U.S.

“The Obama EPA has now come out with 25 million words of regulations, or 25,000 pages. That is 38 times the length of our Holy Bible,” Mr. Murray marveled. “It’s a power grab of America’s power grid.”

In his efforts to counteract the administration’s plans, the coal executive is a major political fundraiser and holds monthly meetings with members of Congress to sway policy.

Mr. Murray likened the White House to the Gestapo and the SS during Nazi Germany, and said it has pushed back against his efforts to stop environmental regulations to such an extent that he has felt compelled to hire former CIA operatives to provide security.

“They’re trying to silence me, but I won’t be silenced,” he said. “They use the power of the government to silence me, but that won’t happen.”

Mr. Murray may have been the most evocative of the speakers, but his sense that the coal industry is suffering was ubiquitous among conference attendees. A sluggish economic recovery and declines in demand for power — coupled with competition from natural gas and new environmental regulations — have tempered, if not devastated, demand for coal.

Coal companies understand that there is too much supply in the market for current conditions, but each is hoping someone else will cut production to correct that, Mr. Fielding said.

“We don’t have any investment-grade coal miners that we rate,” he said. Most have been downgraded in the past several years, some more than once.

Anya Litvak: or 412-263-1455.

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