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Alliance Resource Partners

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This article is part of the Coal Issues portal on SourceWatch, a project of CoalSwarm and the Center for Media and Democracy. See here for help on adding material to CoalSwarm.

Alliance Resource Partners, L.P. (ARLP) operates five mining companies in western Kentucky, along with mines in Illinois, Indiana, West Virginia and Maryland. The company describes itself as "the fifth-largest coal producer in the eastern United States."[1]

On its website ARLP states its "customer base includes major utilities and industrial users ... More than 80 percent of ARLP's sales tonnage is dedicated to electric utilities that have long-term contractual relationships with the company."[1]

ALRP has approximately 4,200 employees at ten mining complexes in the Illinois basin and Appalachian regions, and reported total revenues of $2.3 billion and net income of $497 million in 2014.[2]

Alliance and Coal

Mining Operations

The company has coal mining operations in five states -- Illinois, Indiana, Kentucky, Maryland and West Virginia - as well as a rail-to-barge loading terminal located in Indiana.[3]

Click on the locations shown on the map for mine details:

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Proposed Mines

In September 2011 it was announced that privately held White Oak Resources LLC will develop and operate the Mine No. 1 project - White Oak Mine - in Hamilton County, Ill. Alliance will support the mine with $140 million to acquire and fund development of 200 million tons in coal reserves, up to $110 million for surface rights, and another $150 million to $275 million for a preferred equity investment.

Construction of Mine No. 1 was already under way. Once in operation, White Oak estimates the longwall mine could produce up to 6.5 million tons annually. [4]

Alliance also committed up to $110 million to buy coal-handling facilities, and it will give White Oak up to $100 million in backstop financing for mining equipment. Alliance said the deal will add to earnings and distributable cash flow once production begins, around 2014.[5]

Dotiki Mine Roof Collapse

On April 28, 2010, a roof collapsed at the company's Dotiki Mine in Hopkins County, Kentucky, killing two miners. KY Gov. Steve Beshear said rescue crews had to pull back after reaching the site of the collapse when the roof became unstable. United Mine Workers officials say two other miners escaped. The missing miners were operating what's known as a continuous miner, a machine that digs coal for transport to the surface.[6]

Records show inspectors from the Kentucky Office of Mine Safety and Licensing have issued 31 orders to close sections of the mine or to shut down equipment because of safety violations since January 2009. Those records also show an additional 44 citations for safety violations that didn't result in closure orders.[6]

According to the Herald-Leader, the Dotiki operator was "cited 216 times so far in 2010, according to MSHA's Web site. In 2009, the company was cited 649 times, more than the 458 citations issued last year against the West Virginia mine that blew up April 5 killing 29. On April 13, MSHA cited the operator for not notifying it quickly of an accident and for not preserving an accident site." And:

"Joe Craft, the president of Dotiki owner Alliance, organized a group of donors last year to pay for a new $7 million 'Wildcat Coal Lodge' to house the University of Kentucky men's basketball players on campus. Alliance also was tied to a controversy last year over the firing of the state's director of the state Division of Mine Permits. Ron Mills said he refused to issue about a half-dozen mine permits requested over the past year, chiefly by the politically connected Alliance Resource Partners, because they did not comply with federal and state mining law. Mills' denials were overruled."[7]

The mine was at least partially idled in 2004 when a supply tractor caught fire and spread flames to the coal, timbers, and other equipment. 70 miners were trapped underground but were safely evacuated, and the mine returned to full production in about a month. In 1995, a worker died outside the mine when the bulldozer he was operating fell into a cavity in a coal stock pile. He was buried in coal and suffocated.[6]

Opposition and Lawsuits

Community Passes Anti-Mining Ordinance

On April 9, 2008, Alliance Resource Partners LP and units of Allegheny Energy Inc. filed a lawsuit against Donegal Township in Washington County, Pa., saying a new township ordinance endangered both its Tunnel Ridge Mine and Penn Ridge Mine longwall mining projects. The companies said that the township, in violation of the commerce clause of the U.S. Constitution, passed an ordinance in December 2007 that seeks to ban mining in the township: "The Anti-Mining Ordinance has a substantial impact on interstate commerce because it has the effect of curbing the supply of coal, which is an important natural resource, at a time when demand for coal is growing substantially," said the plaintiffs. The lawsuit also said the ordinance violates the contracts and equal protection clauses, due process rights and the First Amendment of the U.S. Constitution, and is an illegal taking without adequate compensation against the companies.[8]

The anti-mining ordinance is called "An Ordinance to Protect the Health, Safety, and General Welfare of the Citizens and Natural Environment of Donegal Township By Banning Corporations from Engaging in Mining Within the Township; By Banning Corporate Ownership of Land and Mineral Estates Used for Mining Within the Township; By Banning Persons From Using Corporations to Engage in Mining; By Banning the Exercise of Certain Powers By Mining Corporations; By Recognizing the Rights of Ecosystems and Natural Communities; and By Providing for Enforcement of Those Rights." The lawsuit also disputes a companion anti-corporation ordinance enacted by the township. Alliance had obtained the reserves for the mines from Allegheny Energy and Allegheny Energy's Allegheny Pittsburgh Coal Co. unit in early 2000.[8]

Lawsuit over Polluted Water

In May 2011, local TV station WKYT reported flaming drinking water well at the home of Calvin and Denise Howard in eastern Kentucky's Pike County, who reported that the water burned their skin when they bathed. They also said that Excel Mining, operator of nearby coal mine MC Mining owned by Alliance, had offered to install a water filtration system only if the residents signed a liability waiver. The Howards refused, and in August 2011, filed a lawsuit (pdf) over the contamination.

According to the lawsuit, in January 2011 the Howards began hearing explosions beneath their home, and their well water turned gray and took on an offensive odor. In May 2011, the well exploded into flames, destroying the well house, and has burned continuously ever since. The Kentucky Department of Mining Reclamation has investigated the burning well and confirmed that it "is creating an environmental and public safety hazard." The company began providing bottled water to the Howards, but other impacted families said they did not get any assistance. The Howards have been advised to evacuate their trailer home but say they can't afford to do so. The lawsuit seeks compensation for their replacement housing and their water.

Residents also report mysterious health problems they feared could be connected to the poisoned water, including a teenage girl's hair falling out and a boy vomiting blood, and are hoping to connect their water pipes to a clean municipal water source - but price is a concern. Pike County officials have said it could cost as much as $150,000 to connect them to their existing water lines, and would take at least three months.

Excel Mining parent company Alliance was involved in a 2009 controversy over the firing of the director of Kentucky's Division of Mine Permits. Ron Mills' termination came after he refused to issue about a half-dozen mine permits -- most requested by Alliance -- because they failed to comply with federal and state laws. Mills' denials were ultimately overruled by higher state officials.[9]

Lawsuit Alleging Discrimination

In a 2011 lawsuit, federal Equal Employment Opportunity Commission (EEOC) accused Alliance Resource Partners' River View Coal of discriminating against black applicants while hiring miners for a new mine from 2008-2010, suing on behalf of Shawn King and a "class of black applicants." At issue is how River View conducted hiring at a mine in Waverly, a non-union mine about 25 minutes west of Henderson, Ky., between Aug. 1, 2008 and 2010. The mine started operations in 2009. The underground mine employs 437 people. EEOC was hesitant to say how many people were covered by the lawsuit, saying that figure was still being determined, but that 13 people filed complaints with the agency after being rejected for jobs between 2008 to 2010, when River View began interviewing for miners. The company didn't give any of the applicants a specific reason for being turned down, and several were not interviewed for open positions.

River View produced 5.9 million tons of high-sulfur coal in 2010, with 128.5 million tons listed in reserve at the end of that same year.[10]

Political Involvement

Coal Execs Invite Presidential Hopeful Jeb Bush to Closed-Door Weekend Retreat (2015)

Alliance and other coal companies invited former Florida Governor and likely presidential candidate Jeb Bush to be the keynote speaker at the 2015 Coal and Investment Leadership Forum, an invitation-only retreat that brings together coal industry executives, Republican donors, and other "stakeholders," according to an invitation obtained by the Center for Media and Democracy and reported on by The Guardian. Bush "evidently signalled his willingness to meet with industry leaders as early as February when the hosts of the coal forum – all owners and executives of coalmining companies – emailed out the first save-the-date notices," The Guardian reported.[11]

“It is a great opportunity to meet with stakeholders in the state,” Kristy Campbell, a spokeswoman for Bush, said. “He will be talking about a variety of topics.”[11]

Bush had not yet officially declared his candidacy and was not disclosing fundraising information. "I think the major question is what promises is Jeb Bush making to the coal chief executives in that room. We assume Bush is there to raise money for his campaign [...] it is pretty clear why Jeb Bush was invited there. If Jeb Bush is elected they want him to protect their industry" Nick Surgey, research director of CMD, told The Guardian.[11]

Others named in the 2015 invitation included Tennessee Valley Authority president Bill Johns, Christopher C. Horner of the Competitive Enterprise Institute and Energy & Environment Legal Institute, and "the owners and chief executives of coalmining and energy companies" including Alpha Natural Resources, Consol Energy, Drummond Company, Arch Coal, and United Coal Company.[11]

According to The Guardian,

The invitations to the three-day forum promise access to influential figures – including a potential future occupant of the White House – in a relaxed setting, with time for cocktails, golf lessons, and fishing. The $7,500 fee does not include lodging.
"Once again, significant time will also be available for golf, fly fishing, one-on-one meetings and small VIP discussion groups, which is the hallmark of this conference," the invitation reads.[11]

The forum was likely to touch on rules limiting carbon pollution from power plants that were announced by the EPA in 2014. Jim McGlothlin, CEO of United Coal Company, "said the executives were eager to hear what Bush said about energy – but the hour-long encounter would not be restricted to the EPA rules. 'It would be our hope that he would touch upon his general energy policies,' McGlothlin said in an email." McGlothlin also noted that the forum planned to invite additional presidential candidates in 2016.[11]

Alliance Coal Employees Among Biggest Campaign Donors in Kentucky (2011)

It was reported in July 2011 that Alliance Coal employees were among the biggest campaign donors in Kentucky's state primary election. Ten employees of Alliance, along with their spouses, donated a total of $60 thousand to three candidates. The candidates were Democrat Allison Lundergan Grimes for Secretary of State, Republican Todd P'Pool for Attorney General, and Republican David Williams for Governor.

A spokesman for Alliance says it's up to employees whether to be politically active, and he didn't find the contributions unusual.[12]

Personnel

CEO and Ties to the Koch Brothers

Joseph Craft is president, CEO, and chairman of Alliance Resource Partners. His family is reportedly worth $1.9 billion.[13] Craft was "among the top 25 donors of the 2012 elections, giving $4.4m to Republican political action committees," The Guardian reported.[11]

In June 2011, Craft attended a closed strategy session of the billionaire Koch brothers' donor network, where Charles Koch said: "We have Saddam Hussein, this is the mother of all wars" in what appeared to be a reference to President Obama and the 2012 elections. Charles Koch then suggested that those in attendance could donate millions or billions of dollars toward the war.[13]

Koch Wiki

The Koch brothers -- David and Charles -- are the right-wing billionaire co-owners of Koch Industries. As two of the richest people in the world, they are key funders of the right-wing infrastructure, including the American Legislative Exchange Council (ALEC) and the State Policy Network (SPN). In SourceWatch, key articles on the Kochs include: Koch Brothers, Koch Industries, Americans for Prosperity, American Encore, and Freedom Partners.

Executive Leadership

As of May 2015:[14][2]

  • Joseph W. Craft III, President, Chief Executive Officer and Director. Total compensation 2014: $744,656
  • Brian L. Cantrell, Senior Vice President and Chief Financial Officer. Total compensation 2014: $1,389,589
  • R. Eberley Davis, Senior Vice President, General Counsel and Secretary. Total compensation 2014: $1,664,939
  • Robert G. Sachse, Executive Vice President. Total compensation 2014: $1,849,369
  • Charles R. Wesley, Executive Vice President and Director
  • Thomas M. Wynne, Senior Vice President and Chief Operating Officer. Total compensation 2014: $1,872,521
  • Michael J. Hall, Director, Chairman of the Audit Committee and member of Compensation Committee
  • John P. Neafsey, Director, Chairman of the Board of Directors, Chairman of the Conflicts Committee and member of the Compensation Committee
  • John H. Robinson, Director, Chairman of the Compensation Committee and member of the Audit and Conflicts Committees
  • Wilson M. Torrence, Director, member of Audit, Compensation and Conflict Committees

Contact Details

ARLP Headquarters
Alliance Resource Partners, L.P.
1717 South Boulder Ave., Suite 400
Tulsa, OK 74119
(918) 295-7600
Website: http://www.arlp.com

Articles and Resources

Related SourceWatch articles

References

  1. 1.0 1.1 Alliance Resource Partners, "About ARLP", Alliance Resource Partners website, accessed June 2009.
  2. 2.0 2.1 Alliance Resource Partners, "2014 Form 10-K," SEC filing, FY 2014.
  3. Alliance Resource Partners, "Operations", Alliance Resource Partners website, accessed June 2009.
  4. "Alliance to spend $525M on coal mining" Tulsa World, Sep. 23, 2011.
  5. "Alliance to invest up to $525M in coal project" AP, Sep. 22, 2011.
  6. 6.0 6.1 6.2 "http://www.google.com/hostednews/ap/article/ALeqM5ig5LJgqRLxQqyXPWGKvfaFjqL_swD9FCS7O00" Google, April 29, 2010.
  7. "1 missing, 1 dead in Kentucky mine with link to UK donor" Lexington Herald-Leader, April 29, 2010.
  8. 8.0 8.1 Berry Cassell, "Alliance, Allegheny sue Pennsylvania township over anti-coal ordinance" SNL, June 5, 2008.
  9. Sue Sturgis, "Flaming drinking-water well in Kentucky illuminates Big Coal's abuses" Institute for Southern Studies, August 19, 2011.
  10. Brett Barrouquere, "EEOC: Mining company wouldn't hire black miners" Bloomberg, Sep. 27, 2011.
  11. 11.0 11.1 11.2 11.3 11.4 11.5 11.6 Suzanne Goldenberg, "Jeb Bush cozies up to coal industry barons at closed-door meeting," The Guardian, May 29, 2015.
  12. "Alliance Coal Employees Among Biggest Campaign Donors" WBKO.com, July 11, 2011.
  13. 13.0 13.1 "Exclusive Audio: Inside the Koch Brothers' Secret Seminar" Mother Jones, Sep. 6, 2011.
  14. Alliance Resource Partners, "Our Leadership Team," organizational website, accessed May 2015.

External links