What Price Strip Mining?

The east Kentucky coalfield lies within the southern Appalachian Mountain chain. It is a land of steep hills, narrow valleys, and abundant rainfall. The coal seams which are stripped are found in nearly horizontal, parallel layers which are separated by beds of sandstone, slate, and other geological formations.

The portion of the seam visible on the surface of the hillside is known as the outcrop. To extract the coal, it is first necessary to remove the trees and topsoil, starting at the outcrop and proceeding around the hillside. The earth and vegetation which must be removed is referred to as overburden or spoil. Removal of overburden creates a flat plane just below the coal seam which is called the bench. The bench serves as the work space for the men and equipment that excavate the coal and load into trucks. When the overburden is removed, it is normally piled along the outer edge of the bench and cast down the hillside. The part of the bench which is composed of this overburden is known as the spoil bench or fill bench. The new slope created by the dumping of spoil below the bench is referred to as the outslope.

After the initial cut is made into the hillside, the removal of overburden proceeds in a contour line around the hillside, hence the name for this form of mining, contour strip mining. After the uncovered seam is removed, successive cuts are made deeper and deeper into the hillside until the depth of the overburden above the seam becomes too deep for recovery to be economically feasible. The vertical portion of the mountain which forms the inside border of the pit is called the highwall.

The gravest ecological danger posed by strip mining results from the stacking of overburden to create a fill bench and the dumping of this material down the hillside. The fill bench and its precipitous outslope are both highly unstable and subject to severe erosion. This instability can induce terrible landslides. Throughout the East Kentucky coalfield, these slides have blocked roads and streams and destroyed crops, pastures, and houses.

A second damaging side effect of strip mining is the sedimentation of water supplies which results in damage to plant and aquatic life, blocking and rerouting of streams, pollution of drinking and industrial water sources, and flooding. Sedimentation is caused by the traversing of natural drainways across the striped area. As the water passes through the excavation site, it picks up large amounts of spoil which are then deposited downstream. This problem is exacerbated due to the manner in which overburden is treated by conventional contour-mining methods. During the normal stripping operation, the high-quality overburden near the surface is placed on the bottom of the spoil pile and covered with low-quality and often toxic overburden (that is, pyrites, acid, soluble minerals, and so forth). This toxic material is then exposed to weathering and conversion to soluble acids and minerals which are carried away by the water draining down the mountainside.

Highwalls can also cause pollution problems. An unstable highwall that sloughs off can ruin the natural drainage in a strip-mine area. Material falling off the highwall can dam up channels and thereby prolong the contact between water and toxic material, or even force the water to seep through toxic spoil piles. Sloughing highwalls can also open up new toxic materials to weathering.

The west Kentucky countryside is essentially flat. The openness of the terrain permits strip mining to proceed on a far grander scale than in the mountainous East. Instead of the ordinary-sized bulldozers employed in contour stripping, the area stripping practiced in the West utilizes giant earth-moving equipment capable of handling several thousand cubic yards of material per hour. A trench is made through the overburden to expose the coal and extended to the limits of the deposit. This is known as the first cut. The overburden from the first cut is placed on adjacent unmined land. Then the coal is removed. After the first cut is completed, a series of cuts are made parallel to the first, and the overburden from each one is placed in the cut just previously excavated. The final cut leaves a trench equal in depth to the thickness of the overburden and the coal which have been removed. The final cut may be a mile or more away from the starting point. The overburden from the cuts, if they have not been graded or leveled, form a series of parallel ridges across the disturbed area.

The flatness of the West Kentucky landscape removes landslides from the list of strip mine-induced calamities. But every other sort of environmental problem which is associated with contour strip mining results from area strip mining as well. These problems include erosion, exposure of toxic substances, sedimentation, and diversion of natural drainways. The western soil has a much higher acid content, which greatly increases the water pollution problems caused by soil runoff from strip mine sites. Although contour stripping may cause more severe types of damage, the greater scale of area strip mining implies that more acreage will be adversely affected by strip mining in the West than in the East. Environmental damage will, therefore, be more extensive there, though perhaps less intensive.

The most important economic advantage that strip mining enjoys vis-à-vis deep pining results from its much lower ratio of fixed to variable costs. A strip miner can adjust his level of production to the vagaries of coal demand. To deep mine, one must dig a long, expensive tunnel that cannot be used for any other purpose. A deep miner will, therefore, continue to produce even if he must do so at a loss, so long as his revenues exceed his variable costs. A strip miner need operate only so long as he can make a profit. His equipment can be used for other forms of heavy construction (for example, road building, site excavation, and so forth) and, hence, can be leased or sold if the coal market deteriorates.

A related advantage derives from the short lead time required to open a strip mine. Since a new strip mine can be opened quickly, a strip miner can respond to a sudden upturn in the market by increasing his production. It takes at least a year to make a deep mine operational. Thus, a deep miner cannot take advantage of short-term market trends.
Strip mining is economically more efficient than deep mining in two other ways as well. First, it requires far fewer man-hours to produce a ton of stripmined than a ton of deep-mined coal. Second, the resource recovery rate is higher. In order to prevent cave-ins, it is necessary to leave a certain percentage of deep-mined coal behind in the form of pillars to support the roof of the tunnel. Using surface-mining methods, it is possible to recover a higher percentage of a given coal deposit.

In addition, strip mining is immeasurably safer and healthier than deep mining. It does not require that men spend their working lives below ground, in tunnels that are always susceptible to cave-ins, breathing air that will eventually destroy their lungs. Instead, they suffer no greater risk of accident than the average heavy-equipment operator (one must add, of course, that this risk is far from negligible).

Typically, four separate parties comprise the economic system whereby East Kentucky strip-mined coal is extracted and sold: the surface owner whose land is being stripped; the land company which has purchased the mineral rights from the surface owner himself or his forebears; the coal operator who has contracted to sell that coal and who has obtained the right to do so from the land company; and the purchaser, most often an electric utility, of the strip-mined coal. Historically, the workings of this system have deprived both the surface operator and the coal operator himself of the power to ensure that the stripping will be done in the least destructive manner possible, and have created no incentive for those who do have such power, that is, the land companies and the utilities, to exercise it.

Unwittingly, the ancestors of many East Kentucky property owners signed away their right to control the disposition of their own land. Around the turn of the century, East Kentucky was invaded by representatives of land companies who scoured the hills convincing landowners, many of whom were illiterate, to sell the rights to whatever minerals might be found on their property in exchange for sums ranging from ten cents to a dollar per acre. The document which the surface owner signed was called a broad form deed. Since the only form of mining then extant was deep mining, the landowners labored under the delusion that they had retained control of the surface of their land. Even the literate ones neglected to notice a clause buried near the end of the broad form deed which read: "Parties of the first part also hereby grant . . . the free right of ingress, egress, and regress in, on, to, over, upon, under, and through said land" (italics mine). This language gave the buyer of the broadform deed the right to enter and excavate the surface above the mineral he had purchased in whatever manner he desired.

This clause did not become salient until decades later after large-scale strip mining was introduced into East Kentucky. When, in the early 1960s, citizens of Knott, Perry, Letcher, and other East Kentucky coal counties discovered that bulldozers had appeared on their property without their permission, and when they witnessed the bulldozers tearing up orchards, gardens, and even family cemeteries to reach the veins of subsurface coal, they realized that their forefathers had deeded away far more than anyone had suspected at the time.

The broad form deed is only rarely invoked in so callous a fashion. Normally, the coal operator will offer to pay the landowner a modest royalty in return for the latter's acquiescence in allowing his property to be stripped. However, the mere fact that the operator has the legal right to strip the land without engaging in this type of magnanimity leaves the surface owner with little choice but to accept whatever terms the operator cares to proffer.

The coal operator himself was caught in such a severe profit squeeze that he had no choice but to remove the coal in the quickest and cheapest manner possible, regardless of the damage that such carelessness would cause. This problem was especially severe in the early and middle 1960s when the industry was just emerging from the severe drop in coal demand of the 1950s. The industry was badly undercapitalized. The wide fluctuations in demand which had historically characterized the coal market made lenders extremely reluctant to extend credit to coal operators. This wariness could only be overcome if the coal men could present the lenders with proof of stable, long-term demand in the form of contracts signed by utilities or other coal purchasers which committed them to buy large amounts of coal for many years at a fixed price. Since the coal operators were desperate to obtain such long-term contracts, the utilities had a great deal of leverage in determining the specific provisions of those agreements. They found themselves in the fortuitous position of being able to meet their fuel needs at very low prices. In order to fulfill their contractual obligations, the coal operators found it necessary to keep their production costs to a bare minimum. Since, in their eyes, reclamation was a "frill," it was the most logical area in which to realize cost savings.

Having promised to sell vast amounts of coal which they did not yet possess, the coal operators placed themselves under tremendous pressure to obtain deeds to adequate coal reserves. For the most part, deposits of sufficient size and quality could only be obtained by leasing broadform deeds, en masse, from the land companies who had collected them a half-century earlier. These companies, which were few in number, faced no particular time pressure themselves. They therefore had a huge bargaining edge over the coal operators who were forced to bid against one another to obtain the desperately needed reserves. As a result, the land companies were able to obtain high per ton royalties for their coal. The combination of prices and high royalty payments left the coal operator in an extremely precarious financial position which could only be remedied by keeping the costs associated with the actual extraction of coal to a bare minimum. The extremely thin profit margin under which he operated accounted for the vociferousness with which the operators opposed any form of government regulation which might serve to increase their costs of production.

Since the land companies did not own the surface, they had no reason to insist that reclamation work be done properly. On the contrary, the operators paid royalties to them on a per ton basis. Their only concern was that the operator extract every last ounce of coal, including those deposits which were located beneath land that could not be properly reclaimed.

For the most part, the coal operators were themselves residents of the East Kentucky coalfield. They had to personally suffer the wrath of those surface owners whose property had been destroyed. Thus, they had strong motives for keeping environmental damage to a minimum. This was not the case for either the land companies or the major purchasers of coal. The land companies were controlled by people who either lived outside the region or beyond the borders of the state itself. These companies had no cause to fear the ill will of property owners. The majority of East Kentucky coal is sold out of state. While electric utilities might feel a need to maintain good public relations in their home states, they did not have to concern themselves with cultivating the affection of Kentuckians. Therefore, neither the land companies nor the coal buyers had any incentive to aid in the task of restoring strip-mined land.

Although the West Kentucky coal operators did not have to contend with land companies, they still found themselves subject to severe financial pressure as a result of the long-term contracts which they had entered into with out-of-state buyers, most notably the Tennessee Valley Authority. Peabody Coal Company, the nation's largest coal producer, dominates the West Kentucky coalfield. It is also the major supplier of coal to TVA. As of 1970, it was estimated that 80 percent of Peabody's output was tied up by long-term contracts. These contracts pledged it to deliver coal for as little as three dollars a ton and, thereby, prevented it from reaping the benefit of the tremendous rise in coal prices which has taken place during the 1970s. Despite its status as a coal giant, Peabody has not been a profitable corporation. Like its diminutive counterparts in East Kentucky, the corporation has had strong motives to cut costs in every conceivable manner. Hence, it is not surprising that the director of the Kentucky Division of Reclamation throughout most of the 1960s labeled Peabody as the least responsible of all coal operators during that period.

Poor reclamation work can no longer be blamed on the set of conditions described above. The capital position of coal companies has improved significantly. Over the past few years, demand for coal has risen dramatically, and the government has indicated its intention to invest heavily in this, the nation's most abundant fossil fuel resource. As the long-term contracts which the operators signed in the early sixties near expiration, it is the electric utilities, not the coal producers, who are desperate to agree to a renewal. Coal operators now require large inducements, in the form of higher prices and more liberal cost escalator clauses, to agree to tie up their output. The liquidity of several of the largest coal firms operating in Kentucky has also been greatly augmented as a result of their merger with cash-rich oil and copper companies. It is too early to tell what effect this improved economic climate will have upon the environmental performance of strip miners. However, if their record does not improve, they can no longer excuse themselves by pleading poverty.