Who Makes Coal Policy in Illinois? Chapter II
This article, like the others in this series, is the kind of in-depth exploration of government processes that Illinois Issues was founded to deliver. The founders over-estimated the readership for such journalism, but if the magazine was never widely read it was not because it was not worth reading.
This is the fifth part of five. For other articles in the series, see "Illinois coal" on the Energy page.
Politicians like to speak of government as a partnership. In the case of Illinois coal, that partnership is usually thought to consist of three powerful members. One is state government itself. Another is the organizations outside the statehouse with interests in coal: the industry, unions, and consumer and environmental groups. The third is the federal government. But though there is general agreement on who makes coal policy, it is misleading to describe them as partners. A partnership implies a common goal, and in the last ten years especially the interests which have a say on Illinois coal disagree as often as they agree.
The Illinois Coal Association (formerly the Illinois Coal Operators Association) represents the Illinois industry, or most of it. It is the lobbyist and public relations voice for those companies which dig an estimated 95 percent of Illinois' yearly coal output. (The remaining companies, all of them small, belong to the Coal Producers Association of Illinois.) When the Illinois Coal Association (ICA) speaks, its opinion has the weight of a billion-dollar industry behind it.
The ICA is run by Joseph Spivey and Taylor Pensoneau, its president and vice president, respectively. Neither have backgrounds in coal; they come from administration, lobbying, and journalism. Their principal task is to promote Illinois coal. In the present legislative context, that means opposing a coal severance tax, complaining about the effects of clean air rules on their product's marketability, and urging what the ICA sometimes calls a "rational"(as unrestrictive as legally allowable) implementation of the 1977 federal surface mining act.
The association argues its cases through the usual means. Both Spivey and Pensoneau are registered lobbyists, and the ICA publishes a steady stream of statements, studies, and reports as part of what one of the ICA's lobbyists unabashedly referred to as "propaganda" in 1938. When needed, the ICA can command an audience with the governor, as it did in February, when a nine-man delegation met privately with James R. Thompson and his staff to present its case against severance taxes and environmental regulations.
Strong coal lobby
Measured solely by its legislative scorecard, the ICA must be considered one of the more influential of the major coal interest groups. The coal severance tax is buried for the moment (a defeat for which the United Mine Workers must also be given some credit). The ICA did not get what it may have wanted in the state's program to implement the federal surface mining act (the measure, H.B. 2548, was passed by the General Assembly and signed into law by Gov. Thompson as P. A. 81-1015 in September). But the ICA did manage to forestall the federal Office of Surface Mining from enforcing the Federal Surface Mining Control and Reclamation Act (SMCRA) in the absence of an acceptable state program for doing so. Another ICA success came on a bill in the General Assembly which would force coal companies to pay a minimum 5 percent royalty on coal leases. The bill, H.B. 2231, which the ICA opposes, is stalled in a Senate subcommittee.
This record is respectable, certainly, but it reveals the changes the industry has undergone since the 1930s and 1940s. Back then the industry was a nearly unswervable force in the statehouse.
When the ICA wins, it does so partly because it has a sympathetic man in the governor's mansion and partly because of widespread nervousness over the industry's recent economic decline and the layoffs that portends. There is no sizable coal bloc per se, so the ICA works, as do most lobbying groups, with shifting sets of alliances. Depending on the issue, these may include such unlikely allies as the United Mine Workers, as happened this session with the severance tax.
Outside the statehouse, the ICA makes its presence felt through the Illinois Department of Mines and Minerals (IDMM). It may or may not be true, as some students of state government have alleged, that IDMM has been "captured" by the coal owners; both IDMM and ICA deny it, with the ICA insisting that the department "pulls no punches" when it comes to permits, safety enforcement and the like. But the association has, like the miners' unions, hammered out a close working relationship with the department. It is protective of that relationship. When it was proposed recently that land reclamation authority be transferred to the Department of Conservation, the ICA fought the move, arguing that IDMM alone had the necessary expertise, that coal regulation was too important to relegate to a subcabinet level, and that "meaningful regulation" requires close rapport between the regulators and the regulated.
Not surprisingly for the representative of a powerful and often unpopular industry, the ICA has critics. In August for instance, the Illinois South Project accused the association of fostering a "climate of protective benevolence" toward the industry by its systematic exaggeration of both the potential layoffs and increased operation costs resulting from federal air and land reclamation regulations. The United Mine Workers, for its part, privately chides the ICA for being only a half-hearted advocate of Illinois coal; the union notes that the ICA, unlike the UMW, has not taken a hard public stand against the use of western coal or nuclear power. That is only one of the complaints directed at the industry by the United Mine Workers.
Although there is another miners' union in Illinois, the Progressive Mine Workers of America, it is the 16,000-member UMW that counts. Policy matters for the UMW are articulated by Gerald Hawkins, a coal miner who holds his position as legislative representative in Springfield by an election of the union membership.
The UMW is a potent political force in the coal fields of southern Illinois, but these coal field legislators do not by themselves constitute a decisive voting bloc in the General Assembly. In order to garner broader support for the union's objectives, Hawkins has sought to develop moderate positions on coal issues. He wants to attract backers from outside southern Illinois.
For example, the UMW has insisted for some time that Illinois coal can be mined and marketed in environmentally sound ways, chiefly through the installation of sulfur dioxide scrubbers. By advocating the use of scrubbers, the union has put itself at odds with much of the utility and coal industries. It also puts the UMW at odds with the governor, who did not earn friends among miners when he equated coal use and dirty air in his July speech to the National Urban League.
The UMW's support is considered crucial on major coal legislation. An example: The UMW endorses the theory of a coal severance tax. In 1977, it backed S.B. 30, a tax bill that was vetoed by Gov. Thompson. The union withdrew its support of a severance tax in 1978 because of worries about the effect of the tax on coal's marketability during a period of declining sales. Union spokesmen/say privately that the shift was a kiss of death; this year, S.B. 290, the bill embodying the tax proposal, did not survive to reach the governor's desk.
As a major labor union, the UMW commands attention among many Democrats, including Democratic governors. Republican governors, on the other hand, sometimes need more persuading to accept the union's viewpoint. So, in March, the union sent some 2,000 miners to Springfield to protest layoffs due to Thompson's failure to ban imports of western coal to Commonwealth Edison's Powerton plant. Union sponsors say this demonstration did much to sensitize Thompson to the coal issue.
The demonstration was also used to focus attention on another source of UMW unhappiness. Currently, it is possible for a utility to import cleaner burning western coal to meet clean air standards and to pass on the cost of hauling that coal into Illinois directly to its customers via fuel adjustment charges. The UMW would like to see that provision of the law changed by the General Assembly.
The ultimate coal policy is not made by either the ICA or the UMW, but by the utilities in and out of Illinois. If they choose not to burn Illinois coal in their boilers (and they have chosen not to in recent years), miners will be without jobs, coal companies will have no coal to sell, and governments will have nothing to regulate or, what is more important, to tax.
Unlike the coal owners and the mine workers, the Illinois utility industry does not speak through a single trade association. Parts of the industry are represented collectively in Springfield, such as the members of the Association of Illinois Electric Cooperatives. But others lobby individually, such as Chicago's Commonwealth Edison, the state's largest utility. Well-financed, well-researched, and well-represented, utilities lobbyists play a crucial though quiet role in policy matters.
It is sometimes said that Illinois' utilities, as an industry, are a splintered force in spite of their leverage as the coal industry's best customer because they seldom achieve a consensus on matters of common concern. In April, for example, Commonwealth Edison representatives testified in Springfield against a bill that would have required all Illinois utilities to burn only Illinois coal beginning in 1982; ComEd said it would cost too much to equip their plants with the scrubbers that would be needed to burn Illinois coal cleanly. In September, by contrast, the Central Illinois Public Service Company published ads in small town newspapers that showed a man (presumably a CIPS customer) asking, "Why would a utility expect me to pay for cleaning up the environment?" CIPS, which unlike ComEd is committed to the use of scrubbers, answered the question in its ad by pointing out that the scrubbers their customers pay for "allow us to burn 4 1/2 million tons of Illinois coal a year . . . [which is] good for Illinois."
If coal is messy to burn, it is almost as messy to legislate. A variety of individuals and organizations besides the governor, legislature and the major agencies have a role in the process.
A less quiet presence in the making of coal policy is that of the Illinois South Project, Inc. (ISP), headquartered in Herrin. Organized in 1974 by a handful of young activists, ISP was founded (in its words) to "work with people in southern Illinois on coal and energy development issues." More specifically, ISP is pledged to help the people of the state's coal districts to "exert control over their land and resources."
For all its youth and lack of resources, ISP makes itself heard in Springfield on such issues as severance taxes and the social and economic effects of coal conversion and strip mining. It does this by organizing constituencies at the local level who in turn lobby on their own behalf on issues ranging from strip mining to utility rates (by law, ISP cannot lobby itself). ISP also does its own research and publications on such neglected topics as coal company ownership of farmland and on assessment practices. These efforts enable ISP to serve as a sort of intellectual counterweight to the industry's positions.
ISP is active in several coal-related community projects as either sponsor, member, or founding catalyst. One of these is the State Citizens Coalition, a group of about 40 people—mostly from southern and central Illinois—who organized in the fall of 1977 to monitor the state's implementation of the federal surface mining act. Its purpose, according to one of its founders, is to work "in an advocate role to press for rule-making and interpretive decisions that will be attuned to . . . special needs and conditions in Southern Illinois."
Opinion is divided on how important a role ISP plays in making coal policy. Some observers rank it with the ICA and UMW among the major non-government members; others—chiefly those in government—give it less importance. On the issue of strip mining, at least, ISP has been acknowledged as a full partner in the policy-making process; ISP was one of the groups which the ICA invited to meetings at which a final compromise was shaped for H.B. 2548, which is the permanent regulatory program for Illinois under the federal surface mining act. A package of four amendments advanced by the ISP (including one which deleted the industry-backed clause that state regulations be more stringent than the federal act required) was accepted into the final version that was signed by the governor in September as Public Act 81-1015.
Also at the table is the Illinois Environmental Council (IEC). Like the ISP, the IEC lacks the resources of its traditional lobbying foes such as the ICA. But the IEC is presumed to speak for a large, if unformed, statewide constituency. IEC's voice has been the loudest on the sulfur dioxide issue. The group takes much of the credit for the governor's veto two years ago of S.B. 281, which would have relaxed state SO2 limits to the maximum allowed under federal law. IEC had argued that the bill would increase air pollution without expanding the market for Illinois coal.
Some of the non-industry players are inside state government. The Illinois departments of agriculture (IDOA), conservation (IDOC), and transportation (IDOT) have a say on coal too, as part of the routine interagency review of mining permit applications and reviews of proposed reclamation plans. The purpose of the review is to insure that mining results in no permanent ill effects on wildlife habitat or water impoundments (as determined by IDOC), the contour and drainage of farmland (IDOA), and floodplains and bridges (IDOT). The Illinois Environmental Protection Agency also has a part in the review process; it is responsible for evaluating the possible effects of mining on groundwater supplies. If a reviewing agency has objections to a mining permit request, the IDMM considers them before granting a permit; an objection may result in changes in reclamation plans.
The Illinois Commerce Commission shapes the market for Illinois coal by setting the electric rates charged by the utilities which burn coal. The IllCC is also studying new rate structures which, if adopted, would reduce or redistribute electrical demand—which, in turn, would reduce the demand for coal. The Illinois Geological Survey, for instance, has been responsible since 1905 for mapping coal reserves and reporting mineral economics and coal geology. (The survey has published some 300 reports on coal.)
In addition to industry and union groups and special interest groups such as the IEC and ISP, local governments occasionally make their presence felt on coal issues; examples include Robert Masterson, a Knox County zoning administrator, and Terry Dolan, the mayor of the Vermilion County village of Catlin. Both men are respected proponents of more vigorous strip mine reclamation law. And the Illinois Farm Bureau, the state's largest farm organization, has entered the list on behalf of H.B. 2231, the bill that would guarantee a minimum 5 percent royalty to coal leasers—which means farmers in this state where most coal lies beneath farmland.
If one views Springfield as a stage, and the bureaucrats and lobbyists and politicians as actors, then it is possible to see their roles in a screenplay written by the federal government. Though attention is usually focused on Springfield, it is the federal government which is the most dominant force in the state's coal policy.
Until 1969, Illinois coal officials visited Washington, D.C., to see the sights, not to lobby the federal government on behalf of coal. Coal policy had always been left to the states as a matter of principle and politics. But state mining laws were often too lax when they existed at all, and this failure by the states to regulate the industry led Congress to undertake a series of increasingly ambitious steps that has made the federal government a formidable presence in coal policy-making—either directly through regulation or indirectly through federal energy policies.
For example, the 1969 federal Coal Mine Health and Safety Act mandated changes in the way coal is mined underground. Partly as a result of these changes, productivity in Illinois's deep mines has slipped dramatically ever since. The act has had the intended effect of making mining a safer way to make a living, but it has also made Illinois coal a more expensive product to buy.
The 1969 mine safety act was followed in 1970 by the Clean Air Act (amended in 1977) and in 1977 by the Surface Mining Control and Reclamation Act. Each of these has had or is expected to have equally significant effects on the Illinois coal industry.
The mine safety, air pollution control and land reclamation laws were all new concepts in Illinois when the federal legislation became law. The complaints against these federal laws focus, in Illinois, on the unfair hardships to the Illinois industry because of the state's peculiar geography and geology. The result has been to put Illinois at an unacceptable competitive disadvantage. It is worth noting that when the ICA requested a meeting in February with Gov. Thompson to air industry complaints, two of the three issues on the agenda were directly or indirectly the result of federal lawmaking: the state's land reclamation program and SO2 regulations. Industry representatives reminded the governor of the rise in imported low-sulfur coal to Illinois that followed implementation of the Clean Air Act. They also complained that though it may be possible to restore western grazing land after mining to 100 percent of its pre-mining productivity as required by the SMCRA, doing so with Illinois's rich farm soils will be either impossible or prohibitively expensive.
Illinois's access to policymakers in Washington, then, is increasingly important. On most national matters the ICA and the UMW, for example, are content to let their cases be argued by their national organizations, the National Coal Association and the UMW International, respectively. And sometimes, the Illinois coal industry and miners groups go to Washington to argue on Illinois's behalf. Both the ICA and the Illinois UMW lobbied hard against a proposed lower SO2 emission standard for new power plants. If passed, the measure would have made it illegal to burn much of Illinois's high-sulfur coal, even with scrubbers. Both groups also claim partial credit for the U.S. Environmental Protection Agency's decision not to lower the present 1.8-pound per million Btu SO2 ceiling.
More often, however, unhappiness with federal coal policies takes the form of public griping or (in the view of some anti-coal activists) delays in the implementation by the state of federal rules. The Illinois congressional delegation, for its part, is thought to be more sensitive to farm issues than to coal issues and thus is not an active force in Washington on behalf of the state's coal interests—though some individual members such as Rep. Paul Simon (D., Carbondale) do speak out on coal issues.
The federal government uses carrots as well as sticks. For example, there is that biggest carrot of all, President Carter's proposed $88 billion synthetic fuels program. If enacted, the synfuels project could bring a boom to Illinois coal; a single coal liquefaction plant on the scale envisioned by Carter would boost coal demand in the state by fully one-half over current levels.
However, what the federal government promises and what it delivers are two different things. Examples abound. For instance, in 1977, the Illinois General Assembly authorized $70 million under the Coal Development Bond Act to underwrite such coal development projects as pilot plants for coal conversion. One of the aims of the program was to entice similar funds from federal sources; since then three separate projects have been turned down by Washington, and not a dollar of the $70 million has yet been spent. Similarly, utilities and factories were encouraged by Washington to switch from coal to oil in the early 1970's because oil was cleaner, but when oil became scarce, they were encouraged to return to coal. Now, the recent glut of natural gas that appeared after deregulation has led Washington to urge those same firms to burn gas (all this while Carter has called for a doubling of the nation's coal output by 1985).
On March 26, five days after the Illinois miners had gathered at the Statehouse steps, Gov. Thompson sent a long letter to President Carter. He asked: "Why is it that in the face of a national energy crisis, with an announced national commitment to coal, we find production declining?" The governor supplied his own answer: "The cause appears to be an inability on the part of the federal government to resolve conflicting energy, economic, and environmental policies."
It would be neither helpful nor especially accurate to blame all the problems of the Illinois coal industry on the federal government. It may be that Washington will find it no easier to resolve conflicting energy, economic and environmental policies than Illinois has done. It costs a great deal—in capital and higher electric bills—to use coal cleanly. The environmental costs of not using it cleanly are steep too, as is the cost in lost jobs for not using it at all. Given this quandary, the question facing Illinois policymakers is whether such conflicting policies can ever be resolved at all. ●