Coal, aggregate industries facing hurdles

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While employment and wage statistics might show Maryland?s coal and aggregate industries are growing, significant hurdles stand in the way of both mining sectors? future expansion.

The state?s coal mining industry, focused in Western Maryland, is shrinking in terms of employment and production, said Adrienne Ottaviani, executive director of the Maryland Coal Association. The industry is working to promote the use of "clean coal" technology and change the opinion that all coal mining and burning has adverse environmental effects.

"In today?s political climate, coal is a four-letter word," Ottaviani said. "Environmental regulation is the biggest obstacle."

Aggregate mining ? stone, sand and gravel, and clays used for construction ? is focused largely between Baltimore and Washington D.C. While large-scale, multimillion-dollar roadway constructions like the Interstate 95 Express Toll Lanes project north of Baltimore and the Intercounty Connector in Montgomery and Prince George?s counties are helping push aggregate demand, the construction industry is waiting for increased federal funding to take on more midrange, $5 million to $10 million projects, said Brian Holmes,

acting president of the Maryland Aggregate Association and executive director of the Maryland Highway Contractors Association.

"The volume of work in Maryland is down right now," Holmes said. "The highway construction industry usually counteracts an economic downturn to help stimulate an upturn. We?re having the general economic downturn, but we?re not getting the influx of new funds.

"For contractors, they?re kind of between a rock and a hard place," Holmes said.

STATISTICS TELL ONE STORY

Maryland?s mining industry employed about 1,800 people who collectively earned more than $89.5 million in 2006, according to the most recent data available from the Maryland Department of Labor, Licensing and Regulation. From 2004 to 2006, Maryland?s coal production decreased each year to about 5.03 million tons, according to the Energy Information Administration.

Maryland?s mineral production has increased in recent years, as cement, clays, sand and gravel, and gross stone production value increased from 2003 to 2005, according to the U.S. Department of the Interior. About $274 million worth of crushed stone was produced, $210 million worth of cement was produced and $89.5 million worth of stone and gravel was produced in Maryland in 2005. In 2006, Maryland ranked 33rd out of the 50 states in total raw mineral production value.

Just last week, the Bureau of Economic Analysis said earnings growth for mining employees in Maryland was a little more than 5 percent in the first quarter of the year ? stronger growth than any of the other 23 employment industries tracked by the BEA. Earnings growth in mining was 5.4 percent nationally, also leading all industries.

The income rise might be connected to overall, across-the-board cost increases connected to the coal and aggregate industries, Holmes

said. The mining industry, while small in total number of employees, does produce higher-paying jobs, according to the BEA.

CHALLENGES TELL ANOTHER

Maryland?s coal industry is already at a disadvantage because Maryland coal is softer than coal mined in Pennsylvania and West Virginia and doesn?t burn as quickly, Ottaviani said. While coal from Pennsylvania and West Virginia sells for about $100 per ton, Maryland?s coal sells for about $30 per ton.

Even Foundation Coal Holdings, which has its corporate headquarters in Linthicum Heights, doesn?t mine in Maryland. Most of its mining is done in Pennsylvania, West Virginia and Wyoming, while Maryland offers a central headquarters location, said Rick Nida, spokesman for Foundation Coal.

Ottaviani, though, speaks highly of the AES Warrior Run energy plant in Allegany County, which was the first in Maryland to use "clean coal" technology to protect air quality from carbon dioxide and methane and make use of Western Maryland coal.

"Maryland is a small coal state, but we?re doing it right," Ottaviani said, who added that promoting the clean coal technology to legislative officials is "an ongoing process."

"We have to prepare for our energy needs," Ottaviani said.

Similarly, the Baltimore region needs to prepare for its transportation needs, Holmes said, meaning new highways and increased aggregate production. The projects, though, need funding. 

"There is certainlymuch more demand for transportation improvements than there is available,"

Holmes said.

"Aggregate is used in just about every part of America?s infrastructure," Holmes said. "The infrastructure, if you take it for granted, it?ll come back and bite you ? we need revenue to do this work."

acannarsa@baltimoreexaminer.com

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Andrew Cannarsa

Examiner Staff Writer
The Washington Examiner