Thank you to Dick Russell, for sharing his Chapter 7!
Go to the website of the world’s largest publicly-traded coal company, and the faces of children abound. Some 28 employees from Peabody Energy’s St. Louis headquarters take part in a Junior Achievement day at a local elementary school, bringing a curriculum aimed at encouraging the 300-plus students “to own their economic success by fostering work-readiness, entrepreneurship and financial literacy.” Another 22 company volunteers focus at a different grade school on “an educational delivery method that facilitates partnership between businesses and elementary/middle schools.” The Peabody Energy Leaders in Education program honors the city’s teachers with financial awards up to $5,000. Another group of employees walks a mile to help the Make-A-Wish Foundation raise funds for children with life-threatening medical conditions.
Peabody does business on six continents and over 25 countries, and its alleged interest in kids isn’t confined to its local area. In November 2013, a double-page advertisement appeared in a special edition of the International Energy Agency Journal. It displayed a color photo of a turbaned man riding a bicycle down a dirt road in India, his son on the back of the seat carrying a clipboard. “Our Children Turn to us for a Brighter Energy Future,” the headline read.
“Too many of the world’s children have no modern energy in their lives – no light to read by, no computers for school work, no digital devices to bring their communities into the 21st century,” the ad’s text began. “Advanced coal is changing all of that. Coal has been the world’s fastest growing major fuel of the 21st Century. And coal is expected to pass oil as the world’s largest energy source in coming years.” The ad urged the world’s energy ministers to “emphasize that today’s advanced coal generation is fast-growing, abundant, inexpensive and clean.” Peabody’s campaign “to eliminate global energy poverty” through burning thousands of BTU’s more of its fuel had begun.
Nothing was said about the fact that one-third of all the planet’s carbon emissions come from burning coal – some eleven billion tons of CO2 a year. To hold global warming to even two degrees Centigrade, 80 percent of the world’s coal reserves need to stay in the ground.
Barney Bush, a nationally-renowned Shawnee/Cayuga poet and indigenous activist, sits in the study of his cabin in the woods of southern Illinois, reading aloud from a yet-untitled work that he’s completed over the course of a year:
“A strip mine holocaust operates below
the hill gouging deeply into the
earth eradicating old village sites
Early December and we still have
not had the hard freeze that shuts down
all but the silence….
every thing knows something is
wrong too close to catastrophe
out of balance when hearts turn to
dust and horizons glow portentously
long after the sun has set….”
Bush, just turned seventy, grew up here. Over a country breakfast he’s made of organic ham, eggs, and homemade biscuits, he is saying: “Back when I was about thirteen, the coal mines came in over here and conned our relatives out of the land, by claiming that ‘eminent domain’ was the law. So I got to see the places where I grew up turned under a strip mine shovel – where we rode our horses, the creeks we swam in turned orange and the fields where people planted their corn, and the animals wouldn’t drink the water. I still have brochures from Peabody saying, ‘From these lands came coal,’ model areas where they’d fix up a strip-mined area and make it into a ‘paradise.’ I knew then, ‘this is bullshit.’
“So some of my buds and I started making night raids on their equipment houses – that bookcase in the corner is made out of some of the dynamite boxes we took – and we’d set fire to a lot of things, too. But it didn’t stop anything. I realized that no matter what we did, money and the power of wealth was the number one factor. And I had to learn how to live with that.
“I think I’m a poet because I love my homeland,” Bush adds quietly.
He goes on to speak about the changing weather patterns, the lack of winter and the daffodils blooming this year at the end of January. “But around here, the phrase that comes first before water or air or earth is, ‘Yeah, but we need them jobs.’”
At the breakfast table is Georgia de la Garza, founder of a local environmental group called Shawnee Hills and Hollers. She recalls how the migratory patterns of the birds have shifted and the terrible flooding this winter. “A lot of people still say, ‘climate change, that’s a liberal thing, this is maybe just what the earth does every once in awhile.’ Yeah, like wipe out civilization?”
Not long ago, de la Garza posted on her Facebook page a superimposed image of a man’s face over a little boy’s body, wearing scuba equipment and floating across an impoundment pond. “On Vacation in Rocky Branch – Peabody’s Refuse 2 Dam – Saline County, Harrisburg, Illinois,” it was captioned, and signed: “Love, Gregory Boyce.” “That’s where I think he belongs,” de la Garza says, “in the middle of what his company has created, and still is.” Boyce was the CEO of Peabody Energy.
What sets Peabody Energy and its top executives apart from other fossil fuel magnates is not mere hypocrisy, it’s the insidious ways and means by which they justify their actions. A brief history: Peabody Coal began as a delivery service in 1880s Chicago, and founder Francis Peabody had sunk the first coal mine of its own in southern Illinois by 1895. On the eve of World War One, the company was supplying large customers like electric utilities and grew steadily through mid-century. Kennecott Copper owned them for a while, then Newport Mining, until Lehman Brothers did a leveraged buyout.
In 1957, Peabody had moved its headquarters to St. Louis, also a hub for several other coal companies. Joining forces while leading the corporate charge, Peabody became notorious for opposing Congress’ passing of a strong Clean Air Act in 1970, leading Big Coal’s fight against acid rain regulations in the 1980s, and obstructing efforts to strengthen regulations on mercury emissions. Then-Peabody Chairman Ira Engelhardt advised the new Bush administration on energy policy in 2001, and along with Exxon got the president to abandon his campaign pledge to regulate CO2 emissions from power plants and drop out of the international Kyoto Protocol agreement.
On climate change, Fred Palmer was the Peabody point man. After starting out as chief counsel at a Washington law firm, by the Nineties Palmer had become the top lobbyist for the Western Fuels Association, a coalition of coal-burning utilities. As far back as 1991, 65 peer-reviewed studies attributed global warming to human activity; only four blamed something else. But before the 1992 Earth Summit in Rio, Palmer worked closely with the Information Council on the Environment, seed-funded by the biggest utilities and coal consumers in the U.S., to find ways to “reposition global warming as theory (not fact).” Their strategies included “target print and radio for maximum effectiveness” and “use a spokesman from the scientific community.” One message stated: “Whoever told you the earth was warming – Chicken Little?”
In 1998, soon after the Kyoto accord, Palmer formed the Greening Earth Society. Its message, promulgated via full-page ads and a feature-length documentary spotlighting on-the-take scientists, proposed that industrial greenhouse gas emissions would actually bring about flourishing plant life. Neatly-boxed videotapes and literature got delivered to every office on Capitol Hill.
“Every time you turn on your car and burn fossil fuel and put Co2 in the air, you are doing the work of the Lord,” Palmer proclaimed publicly. “It is the ecological system we live in.” Another time, he said: “We have a sustainable energy delivery system in the United States – it’s called coal-fired electricity….We’re 100% coal. More coal. Everywhere. All the time.” And proudly to PBS: “We are at the top of the food chain as far as Co2 emissions are concerned.”
Carrying such credentials, Palmer came to Peabody Energy in 2001 as Senior Vice-President of Government Relations. He would also shortly be a board member of the U.S. Chamber of Commerce, chairman of the National Coal Council’s policy committee, chairman of the Climate Change Task Force for the National Mining Association, and two-term chair of the World Coal Association. Everywhere you looked, there was Fred Palmer.
At his side was Craig Idso, hired in the early 2000s as Peabody’s chief environmental adviser. Idso had previously been running the Center for the Study of Carbon Dioxide and Global Change, which held that rising Co2 “brings growth and prosperity to man and nature alike….the Greening of Planet Earth.”
Palmer and Idso both reported to Gregory H. Boyce. The executive’s profile on the Peabody website contained no personal family information, but research revealed that his son Greg works as a seed process engineer for another St. Louis-based multinational, Monsanto. Boyce Sr.’s early training was in mining engineering (his B.S. degree at the University of Arizona). After the Harvard Business School, he’d started out with Standard Oil of Ohio, then as a top exec with Kennecott Minerals and the multinational mining giant Rio Tinto. With the latter, Boyce was in charge of a global coal and uranium portfolio.
Named Peabody’s Chief Operating Officer in 2003, three years later he was CEO and soon assumed the corporation’s Chairmanship. By then, Boyce also chaired a federal advisory panel that produced a report proposing exemptions to the Clean Air Act that would encourage greater use of coal. (In 2008, apparently hedging his bets, Boyce also became a board member of Marathon Oil.)
He was a round-faced, square-jawed man whose management style appealed to Wall Street, in the middle of a global commodities boom when energy consumption was approaching new highs. This was despite a Newsweek chart in 2009 that found Peabody’s environmental policies and compliance with regulations in last place among 500 big companies. By that year, Boyce had devised a new strategic plan that had little to do with the U.S.: Peabody would pursue long-term operating, trading and joint venture opportunities in Asia and the Pacific Rim.
They were already the only U.S.-based coal company in Australia. The year Boyce assumed the top position at Peabody in 2006, he brokered a $1.5 billion acquisition of its Excel Coal, a large producer of the metallurgical variety. Australia’s low-cost mines kept Peabody profitable, with about 75 percent of the coal being exported to Asia. China remained predominantly coal-powered and, although its proven reserves were vast, so was its energy demand. In 2009, China passed the U.S. as the world’s biggest consumer of energy, becoming the largest coal importer. Its coal consumption had doubled over the previous decade to 3.6 billion tons a year (about half the global supply). This, of course, meant that China’s CO2 emissions also soared, to 8,000 kilotons annually by 2009, more than any other nation on earth.
This was all music to Peabody’s ears. Boyce proclaimed “a global super-cycle for coal” that could last between two and four decades. Palmer opined that the world had entered the first stages “of global hyper growth in energy demand,” and that China with its massive coal reserves was poised to be the “new Middle East.” The company enlisted outside promotional help from Dr. Frank Clemente, Director of Penn State University’s Environmental Policy Center, who wrote an article for American Coal Magazine based on his research “findings” about the key role coal played in China’s economic transformation. Coal would be “essential to meet the scale of Africa’s desperate need for electricity,” as well as a path out of “energy poverty” in Southeast Asia. However, Clemente bemoaned that “climate change is strengthening its unrelenting grip on discourse and making energy poverty an afterthought.”
Energy poverty….Cheap coal subsidized by export credits and publicly funded infrastructure in Asian countries where millions lacked electricity….Ideas whose time had apparently come. In September 2010, Greg Boyce announced the “Peabody Plan to Eliminate Energy Poverty and Inequality” in a keynote address given at the 21st World Energy Congress in Montreal. “The greatest crisis we confront in the 21st century is not a future environmental crisis predicted by computer models [climate change],” the Peabody CEO said, “but a human crisis today that is fully within our power to solve. For too long, too many have been focused on the wrong end game.” Some 3.6 billion people couldn’t readily access electricity, including 1.2 billion children. Thus coal was “the only sustainable fuel with the scale to meet the primary energy needs of the world’s rising populations.” Boyce would later go on to cite President Johnson’s war on poverty in the 1960s and the UN’s Millennium Goals that “called for a rapid halving of extreme global poverty by 2015.”
The World Coal Association, then headed up by Fred Palmer, put the message out internationally. Access to low-cost electricity could increase through employing advanced “clean coal” technology to combat energy poverty – not just in China, but all across Asia. Burson-Marsteller – a Washington PR firm with a checkered history of clients including the tobacco industry (seeking to discredit the notion that secondhand smoke is carcinogenic), Union Carbide after the Bhopal disaster, and Blackwater after the accusations of killing Iraqi civilians – was enlisted to put together a marketing campaign. As Kert Davies, director of the Climate Investigations Center, put it: “Burson-Marsteller has spent decades working for some of the world’s worst perpetrators of human rights and environmental abuses. So Burson-Marsteller are well suited to help Peabody push dirty coal to the world’s poorest people, at a time when everyone from the World Bank to the U.N. are warning us climate change will hit the poor first, and hardest.”
At home, Peabody opposed any regulation that would make its utility clients invest in technological upgrades. But in 2011, Palmer described China in testimony before Congress as possessing “the world’s most advanced coal fleet and unprecedented investment in clean coal technologies.” Peabody became the only non-Chinese participant in GreenGen, a power plant and carbon research center in Tianjin. Soon the company entered into partnership with the Shenhua Group, China’s biggest state coal company and largest in the world, which made Peabody’s thermal coal the country’s priority supplier. This was followed by an agreement with China’s fourth largest state-owned mining operation for development of a coal mine in Xingjiang that held forty percent of the nation’s reserves.
A founding member of the U.S. Energy Cooperation Program between America and China, Peabody also involved itself in helping convert coal to synthetic fuel in remote areas. The largest fossil fuel development project on the planet – as many as forty such plants – would supposedly bring about cleaner air in China’s heavily-polluted big cities. However, energy experts at Duke and Stanford responded that this would also result in rapacious water use in regions already suffering from drought – and emit between 36 and 82 percent more greenhouse gases that burning pure coal to produce electricity. If all forty syn-fuel plants were built, according to Inside Climate News, we would see 110 billion additional tons of Co2 released over the next four decades.
Meantime, in India – where coal imports were growing more rapidly than anywhere else on the planet – Peabody entered into a joint venture with Coal India (which accounted for some 80 percent of that country’s production.) Peabody’s presence expanded in Indonesia, itself the world’s leading supplier of seaborne thermal coal, with prime focus on China and India. Much of Indonesia’s mining operation occurred in the tropical rainforest, crucial to maintaining the earth’s carbon balance.
Peabody opened marketing and trading offices in New Delhi and Singapore. In 2014, 35 million of the 250 million tons of coal sold by Peabody emanated from its low-cost Australian mines in Queensland and New South Wales. It didn’t hurt that, with a push from Peabody, Australia had repealed its carbon tax and emissions trading plans. Boyce praised the country’s government for demonstrating “a lesson in leadership for the modern world.” Foreign coal mines, only two percent of Peabody’s business in 2003, had come to comprise forty percent.
2014 was also the year Peabody unveiled its Advanced Energy for Life campaign. Boyce set the stage by writing in the company’s corporate social responsibility report: “Peabody believes energy poverty is a human tragedy and a global environmental crisis.” He received back-up from a key player: Bill Gates, founder of Microsoft. The Gates Foundation possessed, at the time, $1.6 million in Peabody holdings. In June 2014, Bill Gates posted two videos about energy poverty on his blog, writing: “Many developing countries are turning to coal and other low-cost fossil fuels to generate the electricity they need for powering homes, industry, and agriculture. Some people in rich countries are telling them to cut back on fossil fuels. I understand the concern. But even as we push to get serious about confronting climate change, we should not try to solve the problem on the backs of the poor.”
The poor, Gates failed to mention, will be the ones to suffer by far the most from increasing extremes of weather. Nor did Gates bring up satellite photos showing the “Asian Brown Cloud” making its way across the Pacific to the U.S. from coal plants with few pollution controls. Thanks in large part to Peabody, more than 1,800 new coal plants hit the drawing board in China, India, Vietnam, and Indonesia. “As the Western world cracked down on emissions, it targeted emerging economies,” as Climate Change News put it. The truth is, according to a report by the Australia Institute, solar and wind energy were projected to be cheaper than coal in both China and India within the next decade.
A story in The Guardian revealed how Peabody did its rebranding. In early March 2015, the company posted a three-minute-long video promoting Advanced Energy for Life. It featured a beautiful young lady speaking against a backdrop of traditional Chinese music. She’d had to study by candlelight until a coal-fired power plant came to her impoverished village, she said. “Coal….is a major force in eliminating fuel poverty in China, but more importantly it’s a critical driving force for the phenomenal economic growth China has experienced,” she continued. “Eliminating energy poverty will obviously lead to…changing the person’s perspective to life.”
The young lady’s name was Linda Jing. In 2006, she’d been the “face of diversity” for her previous employer, General Motors. Now she worked as an executive at Monsanto, although this wasn’t mentioned in the video. Jing told the Guardian that she’d not been paid by Peabody. But in May 2015, the company would announce a deal in the Datong mining area where her two older brothers were employed, and where Jing’s father worked before being appointed to a senior role by then-Premier Deng Xiaoping.
As it happens, Greg Boyce had joined Monsanto’s board in 2013, where he participates on two committees: Sustainability & Corporate Responsibility and Science & Technology. Located about twenty minutes away from Peabody’s downtown St. Louis headquarters, Monsanto is notorious for its efforts to control the global GMO-seed and herbicide market. But its business strategy also includes ways to capitalize on the coming impacts of climate change.
Back in the late Nineties, when Monsanto launched a new water business starting with India and Mexico, executive Robert Farley was quoted: “What you are seeing is not just a consolidation of seed companies [Monsanto had recently acquired Cargill’s for $1.4 billion and DeKalb’s for $2.3 billion], it’s really a consolidation of the entire food chain. Since water is as central to food production as seed is, and without water life is not possible, Monsanto is now trying to establish its control over water.” They saw depletion of water resources as a business opportunity. “When we look at the world through the lens of sustainability, we are in a position to see current and foresee impending-resource market trends and imbalances that create market needs,” Farley said. Monsanto estimated providing safe water as a several billion dollar market.
When the worst drought in half-a-century eliminated half of the U.S. corn crop in 2012, Monsanto looked to reap another boon. That year federal regulators approved Droughtgard, the company’s new hybrid corn variety with the first genetically-modified trait designed to withstand a long dry spell in specific locales like Kansas, Texas, and South Dakota. Droughtgard went into the final stages of field testing, with 250-some growers in the Western plains planting about 10,000 acres of the seed. A report by the Union of Concerned Scientists revealed that “despite many years of research and millions of dollars in development costs, DroughtGard doesn’t outperform the non-engineered alternatives.”
The same year Boyce took a seat on the board, Monsanto snapped up a San Francisco company, Climate Corporation, which looks at weather data and sells farmers “Total Weather Insurance,” enabling them to lock in profits despite drought or heavy rainfall. “As we all know, the weather is becoming more extreme,” said Greg Smith, Climate Corp’s CEO. “We found that we had kindred spirits with the folks at Monsanto; the data science that we have developed can be applied to improve seed production immensely.” Those kindred spirits paid $1.1 billion for the favor. A few months prior to the deal, the U.S. Department of Agriculture’s Risk Management Agency had authorized Climate Corporation to administer all federal crop insurance policies for 2014 – a potential $20 billion market-of-the-future, Monsanto anticipates.
All the while, wearing his other hat at Peabody, Boyce and his partners worked to undermine all efforts to slow carbon output. “Peabody is perhaps the staunchest opponent of stringent regulations to cap greenhouse gas emissions,” as USA Today said in 2008. Fred Palmer oversaw spending almost $30 million on federal lobbying efforts in this regard between 2006 and 2010. CEO Boyce weighed in, saying: “Peabody would support the ‘right kind’ of climate legislation that allowed carbon-reduction technologies like carbon capture and sequestration (CCS) to develop before imposing strict emissions caps.” Boyce viewed the findings of the Intergovernmental Panel on Climate Change as “tainted by flaws,” with “multiple instances of errors, manipulated data, and gaps in information [that] make the IPCC’s conclusions unreliable.” (CCS project in Mississippi is being reviewed as a scam that robbed ratepayers).
Boyce went on to say: “Our view is that the globe’s climate has been changing since the globe was formed. Levels of Co2 have risen in the atmosphere, and we have been a strong advocate for technology advances to reduce CO2 in the atmosphere, particularly from the use of coal.” As late as 2014, Peabody had contracted Craig Idso to produce a study titled “The Positive Externalities of Carbon Dioxide.” A Peabody letter published by DeSmog Blog in 2015 still found the company calling CO2 a “benign gas that is responsible for all life.”
Boyce took up American “family values” in another speech in 2015: “High electricity costs put pressure on families, forcing what are too frequently becoming painful sacrifices. No parent should ever have to make the terrible choice of putting food on the table, buying medicine or paying for power, yet these are very real issues for tens of millions of Americans.”
Late in 2014, Peabody hired a seemingly strange bedfellow, Laurence Tribe, to make its legal case against the EPA’s Clean Power Plan that would force utilities nationwide to cut their emissions. Tribe once taught constitutional law to President Obama, who had served as his principal research assistant while attending Harvard Law School. Tribe had also represented Al Gore before the Supreme Court in the disputed 2000 presidential election. More recently, Tribe had described lawsuits against fossil fuel companies by villagers in Alaska and coastal inhabitants of Louisiana (where sea level rise is already having powerful impacts) as “a profoundly dangerous perversion of the judicial process.” The courts concurred.
Now, as he appeared on Peabody’s behalf before the House Energy and Power Subcommittee, Tribe lambasted the EPA for allegedly usurping state, congressional and federal court prerogatives. “You know, I’ve cared about the environment ever since I was a kid,” Tribe said. “And you know, I taught the first environmental course in this country, and I’ve won major victories for environmental causes. But I’m committed to doing it within the law. Burning the Constitution should not become part of our national energy policy.” The Obama EPA’s plan, Tribe later said, was a “breathtaking exercise of power.”
Kentucky Senator Mitch McConnell, the Majority Leader and a staunch climate denier who’d been pushing states to refuse to provide the EPA plans for cutting back on their power plant carbon emissions, praised the “iconic” Harvard scholar’s conclusions. David DiMartino, an adviser to the Climate Action Campaign fighting on behalf of the EPA rule, countered that Tribe’s testimony was “phony” and added: “I guess we shouldn’t be surprised – a wad of coal industry money burning a hole in your pocket can make you do strange things.” For further info on $435,000 Peabody paid Harvard Law ProfesLaurence Tribe: (https://blogs.wsj.com/bankruptcy/2016/06/20/peabody-is-paying-laurence-tribe-to-fight-climate-plan/)
Greg Boyce’s own deep pockets at Peabody Energy included total compensation of $57.8 million between 2006 and 2013. The CEO told the Financial Times that, given a Republican Congress and industry lawsuits delaying things in the courts, the EPA rule was “never going to happen in the near-term.” In fact, Peabody was simultaneously reaping vast rewards from the federal government’s largesse. Mining companies have been given access to publicly-owned coal at subsidized rates for decades. Peabody became the largest single company holding Federal coal leases out West in 1980-81, some 82,000 acres or eight percent of the total land under lease. It’s noteworthy that, by the mid-eighties, Exxon Corporation’s 1.6 billion tons of Federal coal in five leases in Wyoming’s Powder River Basin made it the largest Federal reserve holder. Along with Exxon, seven other oil companies – Atlantic Richfield, Texaco, Chevron, Kerr-McGee, Sun, Shell, and Mobil – by then had ended up owning most of the leases to Powder River. This was at a time when Exxon’s own scientists were saying that coal would have to stop being used.
The oil majors dumped their coal holdings after federal support waned, and today, the Peabody-owned North Antelope mine in the Powder River Basin is the largest coal operation in the country. According to a report issued by Greenpeace in 2014 (“Leasing Coal, Fueling Climate Change”), “the Interior Department has leased 2.2 billion tons of federal coal to the mining industry since the beginning of the Obama administration.” Peabody depended on the government’s program for 68 percent of the 189,500,000 tons of coal it mined in the U.S. in 2014. This was not without a terrible cost, in terms of the carbon pollution caused when that coal is burned. In a new Greenpeace report (“Corporate Welfare for Coal,” March 2016), calculations showed that Peabody’s federal coal production alone of 129,313,236 tons in 2014 “resulted in 214,530,808 metric tons of carbon dioxide, or the equivalent of the annual emissions from over 45 million passenger vehicles.” Add in the totals from Arch Coal and Cloud Peak Energy, the other prime recipients of the current leasing program, and the annual emissions equal that of 109 million passenger vehicles.
Using the government’s own mid-range social cost of carbon figures, the federal coal mined by those three companies in 2014 will cause $18.8 billion in damages when burned.
On paper at least, it was not all roses for the coal giants. In 2011, Peabody had gone into major debt while buying another Australian company, MacArthur Coal Ltd., for $5.2 billion, in hopes it would offer a quick-and-easy supply route to China. The company’s greatest challenge, Boyce admitted, was finding export routes from the federal leasing bonanza at the Powder River Basin to the Pacific Northwest. Peabody announced a deal in 2011 to eventually ship millions of tons of coal from a Gateway Pacific coal export terminal proposed near Bellingham, Washington. But this never materialized. In May 2016, the U.S. Army Corps of Engineers rejected the permit application in favor of the Lummi Nation’s assertion of treaty-protected fishing rights.
So Peabody, along with other coal companies faced with increasing competition from natural gas and the likelihood of much stronger emission controls, was looking at what it called an “unprecedented industry downturn.” Since 2011, the overall market value of the U.S. coal sector has nose-dived from over $70 billion to barely $6 billion. In recent years, over 250 coal mines closed. Fifty American coal producers, representing one-quarter of the nation’s production, went belly-up. More than sixty percent of the aging coal-fired plants in the U.S. will either have to shut down or be replaced, but no new ones are currently being contemplated. During the second half of 2014, Chinese coal imports also tumbled by more than 20 percent. And thousands of former workers engaged in protests outside Peabody’s St. Louis headquarters, cheated out of their health care and retirement benefits after the company spun off its Appalachian mines to Patriot Coal, which then declared bankruptcy and laid them off.
As Peabody reported more than $2 billion in net losses since 2011, while its stock value plunged 93 percent and investors lost over $16 billion, Greg Boyce took a widely-publicized pay cut of ten percent. That meant his base salary would be reduced by $123,000 – less than a percentage point of the nearly $11 million he was paid in 2014. The next year, though the company’s losses continued to mount, Peabody nonetheless managed to generate $5.6 billion in revenue.
Boyce, turning sixty, decided it was time to step down as Peabody’s CEO/Chairman, although he would remain on the boards of Monsanto, Marathon Oil, and Newmont Mining Corporation, as well as the U.S.-China Business Council. Also departing was Fred Palmer, who after working his way up to be Boyce’s Special Advisor, jumped ship to the Phoenix-based PR firm Total Spectrum. There, Palmer’s M.O. would remain much the same, but on behalf of interests in his native Arizona: “advancing policies at the state and federal level to preserve America’s coal electric generating fleet, protect coal production from all U.S. coal fields, and create policy parity for 21st century coal technology.”
Boyce’s successor, the Australian-born Glenn Kellow who had joined Peabody after 28 years with a multinational minerals firm, himself had earned almost $4 million in 2014 as President and Chief Operating Officer. While overseeing all the global operations, Kellow also ran the company arm established to enhance emphasis on Asia. In that capacity, Kellow reported directly to Boyce.
Kellow took over the reins just as several other St. Louis-based coal companies – and then Peabody itself – declared Chapter 11 bankruptcy. While they all “restructured” their debts, the remaining mines would continue to function (although Peabody laid off 325 people – 15 percent of the workforce – at America’s largest, the North Antelope Rochelle, in Wyoming). Nor would this affect Peabody’s vast holdings overseas, where hundreds of coal plants were still on its global blueprints. Peabody cited, as its reasoning behind the bankruptcy, “a dramatic drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges.”
Arch Coal, second only to Peabody among American coal producers, had initiated the St. Louis blues in January 2016, citing environmental concerns, the natural gas glut, and shrinking export markets as reasons behind its bankruptcy. Arch wanted to erase $4.5 billion in debt form its balance sheet, ceding control to some big lenders in a debt-for-equity swap. But Arch remained a $2.6 billion company and, shortly before its bankruptcy filing, gave its top executives more than $8 million in bonuses, with Chairman/CEO John Eaves leading the pack at $2.78 million.
Already, when Alpha Natural Resources (the fourth-largest U.S. coal company) declared bankruptcy in the summer of 2015, telling facts had come to light in the filing about the company’s funding of climate change deniers. The chief recipient was Washington attorney Chris Horner, a Fox News regular who claimed the earth was cooling and is a Senior Fellow at the Competitive Enterprise Institute. Horner had, in 2009, instigated what he called “Climategate” – falsely accusing scientists at the University of East Anglia of “falsifying results, collaborating to subvert and violate the laws” in a series of emails. Six official investigations cleared the scientists of any wrongdoing, but Horner continued to flood climate researchers at major American universities with records requests, seeking to distract their efforts. Arch and Peabody also contributed to underwriting Horner’s work.
Peabody’s bankruptcy court filings revealed its payouts to at least two dozen other groups putting out false information on climate change – “the broadest list I have seen of one company funding so many nodes in the denial machine,” says Kert Davies of the Climate Investigation Center. These included the American Legislative Exchange Council, the corporate lobbyists who’ve sought to make homeowners pay financial penalties for installing solar panels; Harvard scientist Willie Soon, and P.R. flack Richard Berman’s various front groups.
Peabody’s declared debt of $6.3 billion is currently being restructured in the St. Louis courts, where the company is seeking not only to reduce the debt level but improve cash flow and “position the company for long-term success, while continuing to operate under the protection of the court process.” In short, to gain relief from its obligations to shareholders, creditors, employees, retirees, and the general public.
“There is a deeper story here – who is profiting off this bankruptcy and who is really bearing the brunt of the burden,” says Caitlin Lee, of the nonprofit group, Missourians Organizing for Reform and Empowerment. Lee’s introduction to Peabody came as a recent undergraduate at Washington University of St. Louis, when hundreds of students occupied the administration building to protest the school’s ties to the company.
In particular, the protest focused on Greg Boyce, named in 2009 to the university’s Board of Trustees. Shortly before his appointment, Peabody had teamed with Arch Coal and the St. Louis utility Ameren to donate $5 million toward funding a Consortium for Clean Coal Utilization at the school. This would coincide with tax breaks provided to Peabody by the city, on $61 million worth of purchases and improvements to its downtown headquarters – $2 million of which was taken out of the budget for public schools.
“As climate change escalates and as it becomes a major issue for young people in my generation,” said Caroline Burney of Washington University Students Against Peabody at the time of the 2014 action, “we’ve realized that we can’t really wait and that we need to escalate our tactics and show the administration that students really care about this issue.”
Seven university students were arrested while trying to speak to the school’s Board of Trustees about its ties to Boyce. Then, in 2015, while a few students handed out flyers outside the annual meeting where Boyce was up for another term, “they brought in riot gear and were ready with barricades” to prevent another occupation, according to Caitlin Lee. Peabody happens to be a major donor to the St. Louis Police Foundation, established in 2007 to provide “a safety net to fund critical needs.”
Boyce is still on the university’s Board of Trustees. The Consortium, where Peabody remains listed as a lead sponsor, has a website touting its goal “to foster the utilization of coal as a safe and affordable source of energy, and as a chemical feedstock, with minimal impact on the environment.”
So what of the Peabody bankruptcy? The deeper story, as Lee describes it, revolves around how the company reconstitutes itself. The bankruptcy judge, Barry Schermer, is a prominent professor at Washington University. A number of the school’s graduates or current teachers are representing various parties involved. Profiteers including “vulture hedge fund” operator Paul Singer are involved, too. And Peabody’s creditors include Citbank and Franklin Resources, who will be determining the company’s liabilities.
How much of the bill will the taxpayers end up footing? Will Peabody be able to shift the cost of their cleaning up and restoring land that has been strip-mined? Their reclamation cost has been estimated at $1.4 billion. But consider that in North Dakota and Wyoming, where 450 square miles of land were shattered by coal mining, only ten percent has been reclaimed.
Coal companies are, in principle, required to post bonds to pay for this. But in Missouri and other conservative Republican states, as Carl Pope – former Executive Director of the Sierra Club – has written, “those with creatively puffed up balance sheets were allowed by states to ‘self bond’ and guarantee their own obligations.” These sites aren’t just ugly – they are perpetual polluters, slowly but surely sending acidic and other toxic wastes into nearby streams and into groundwater.
Additionally, Pope writes, “coal companies hold in trust the funds that pay their workers’ pensions and health care. But over the past few years companies like Peabody Coal divided themselves into bits and pieces. Certain bits kept the parts of the coal business Peabody thought were money makers. Other bits (with sexy names like Patriot Coal) got assigned mines that were no longer profitable, along with bundled liabilities like retiree pensions and health care. When Patriot Coal, predictably, filed for bankruptcy it stuck the taxpayers and the workers with the obligations.”
Greg Boyce must be laughing all the way to the bank.
Some 320 miles south of Chicago, just east of the southern Illinois town of Harrisburg, is an area known as Rocky Branch. It’s close to where Francis Peabody drilled his first mine in 1895, and for many years had been a thriving rural community. Today a Peabody mine permitted in 2014 threatens to wipe out more than a thousand acres of farm and forest land on the edge of the Shawnee National Forest. Its blasting operations come as close as 300 feet to the homes of residents who’ve refused to sell their property to Peabody.
Georgia de la Garza, founder of the Shawnee Hills and Hollers grassroots group, stop the car and points to the nearby blackened hill. “This is what bankruptcy does for Peabody,” she says. “The coal here is very close to the surface. This is actually light production right now, but when it comes back up, the blasting is so loud and with lights that shine 24/7. A lot of people around here wear earplugs. It’s terrorism I feel, nothing short of.”
Many families have left. Others chose to profit from leasing mineral rights to the corporation. Still others, knowing full well the impact of airborne coal dust and polluted waterways at Peabody’s now-abandoned Cottage Grove strip mine a mile away – which left only a cemetery behind – decided to fight. In March 2014, residents of Rocky Branch staged a three-hour-long road blockade. That summer, one of them – a decorated Vietnam War veteran, Glenn Kellen – got arrested as he tried to move his protest sign closer to the public road.
The trucks kept coming. Delivering a speech at the time in Australia, Greg Boyce said: “Coal always wins.”
De la Garza turns around and heads across old Highway 13 – bequeathed to Peabody by the state for a nominal fee – to where Muddy Road runs behind Southeastern Illinois College. The company has donated a building to the college where several coal companies train engineers. As a coal truck passes slowly by, De la Garza stopped again by a sign: Coal Refuse Disposal Area #2. It’s a 160-acre impoundment structure with an orange residue trickling along the surface of a waterway.
“They spray an adhesive constantly, but you can see it erodes and cracks,” de la Garza says. “The Henry aquifer sits on the far end of this. It feeds over 25,000 people their drinking water. We’re in a flood zone so a lot of the water that’s contaminated with heavy metal escapes. On the other side the impoundment is surrounded by agricultural fields. There are so many sites like this in southern Illinois, it just boggles my mind.”
She drives by the abandoned mines known as Cottage Grove and the Wildcat Hills Underground Mine, both owned by Peabody, then down the road to a large ongoing operation owned by Robert Murray. Headquartered in Ohio, Murray Energy is the biggest privately-owned coal outfit in the U.S., according to its website “producing approximately 65 million tons of high quality bituminous coal each year, and employing over 7,500 people in six states.”
Murray laid off 1,800 workers, just over 20 percent of its company, in 2015 –a problem that the owner explains like this: “Americans must understand that the closure of 411 coal-fired power plants, over 100,000 megawatts, by our current [Obama] administration jeopardizes the reliability of our electric power grid and the low cost of electricity. The destruction of our industry will hurt poor families the worst and make the manufacturing of American products less competitive in the world marketplace. Low cost electricity, a staple of our lives, is threatened.”
Murray has for years fought federal efforts to exert any semblance of control over his industry – from acid rain and mercury emissions to mountaintop removal and greenhouse gases. “The earth has actually cooled over the last fifteen years,” he claims to believe. In December 2015, at a meeting of climate change deniers in Texas, Murray praised U.S. Representative Lamar Smith for investigating prominent climate scientists and environmental officials, including issuing a subpoena for the head of the National Oceanographic and Atmospheric Administration. The Union of Concerned Scientists and American Meteorology Association need to be scrutinized by Congress as well, Murray said, because those “crony capitalists [are] making a fortune off you the taxpayers.” Murray went on to organize a fundraiser for Ted Cruz, after the presidential candidate held a hearing challenging climate research that he called “Data or Dogma?” But when Cruz’s campaign fizzled out, Murray held an invitation-only fundraiser for Donald Trump in West Virginia coal country. According to de la Garza, “Our coal is easy to get to, so Murray is pulling a lot of employees from West Virginia to here.”
The highway where Peabody, Murray and Alliance run their coal trucks is known locally as “death road.” The coal “goes down to the Ohio River, where they fill the barges up and then join the Mississippi. Our biggest contractors to burn Illinois coal are China and Indonesia. The coal barons ship it overseas and we’re left with people losing their homes and an extraordinarily high rate of cancer.”
She was born and raised here, Cherokee on both sides of the family, her ancestors having settled in southern Illinois during the infamous “Trail of Tears” migration. Her grandfather had been a teenage coal miner who eventually died from black lung disease. Her father built the local malls and ran a bait shop and oversaw the Pro Bass fishing tournaments. “We were hardly ever at home, always down in the forests,” de la Garza remembers. “We used to ice fish, but you can’t do that anymore with climate change. Might be able to sled one day a winter where we used to go for months.”
In April 2016, St. Louis and southern Illinois community organizers – including Caitlin Lee and Georgia de la Garza – brought in a group of Native Americans from the Navajo Black Mesa reservation in Arizona, where Peabody has two strip mines. They joined together in a rush-hour street blockade outside the company’s downtown headquarters. They called for a “Just Transition Fund” for communities harmed by Peabody’s operations, as part of the bankruptcy settlement.
On her Facebook page, de la Garza posted a video featuring a teenager from Black Mesa. He read aloud a prose-poem that he’d written, addressed directly to Peabody’s CEO. It concluded:
“Dear Mr. Boyce – Greg – someone tells me you are a nice guy. I believe that, that you are just one person and you don’t represent all the gross injustices of American institutions. I don’t believe you’re evil. I believe you’re a coward.
“How easy it must be for you to forget the past, to ignore the present, to shut out the world you are making – and let it burn.”