News
April 27, 2008
Energy crisis spreading, coal executive says

Growing energy costs will force changes in the ways we live and do business in the United States.

A lifelong leader in the coal and transportation industries, Charles T. "Charlie" Jones believes Americans might have to give up their free-traveling lifestyle, where some people drive 50 miles each way to work every day and never think twice about making other daily excursions.

"Some people are spending $200 a week to go to work. Can they stand that over the long haul? No. People will have to move closer to their jobs.

"You cannot spend that much on transportation if you also have to pay for food, clothing and a roof over your head," Jones said.

Trains are more efficient, but they cannot counter rising transportation costs everywhere.

Population density makes trains an economical mode of transportation in urban areas like New York, Boston and Philadelphia, Jones said. But they are not cost-efficient in most rural areas like West Virginia.

Many businesses also face huge cost increases.

Amherst Industries, one of his family's companies based in Port Amherst just east of Charleston, operates 35 tugboats along the Kanawha and Ohio rivers.

When a company tugboat pushes coal barges down the Kanawha to electric power plants, it consumes about 4,000 gallons of diesel fuel for every 105 miles it travels. Today, that costs more than $16,000.

Amherst Industries also transports limestone, chemicals, sand, gravel and other products on its barges.

Rising fuel prices are beginning to hurt other businesses as well.

Jones, a member of the Central West Virginia Regional Airport Authority's board of directors, said Yeager Airport in Charleston will begin losing flight passengers because rising fuel costs are increasing ticket prices.

That could also hurt rental car companies at the airport and local businesses, Jones said.

Jones, who will celebrate his 90th birthday June 4, believes the United States, and all other nations, must explore every possible option to handle rising costs and the exploding demand for fuel.

"We will have to use more natural gas. Today, we already import a lot from Canada. And Houston just built two new ports to handle LNG [liquefied natural gas] tankers."

Growing trade deficits, created by growing imports, continue to soften the American dollar. "A great fear is that oil producing countries might go to the euro."

Gas tax reduction

Jones vehemently opposes cutting gasoline taxes, as some have recently proposed.

"Personally, I am opposed to reducing any tax on fuels. It would be a miniscule reduction. Our roads and bridges are already in bad shape."

Today, the federal gas tax is 18.4 cents per gallon for gas that now costs $3.65 a gallon, or more. The West Virginia state tax is 32.2 cents per gallon.

Gas tax reductions would also cut jobs for construction and maintenance workers who build and repair highways.

"Look at our bridges. We have not painted them in 30 or 40 years. I don't think you can lower our expenditures on infrastructure," Jones said.

During the fiscal year that begins on July 1, gasoline taxes will generate about $380 million for the West Virginia state budget. All other related fees - including property taxes on vehicles and registration fees - will bring in less than $260 million.

Jones believes coal has "great potential" to continue providing for our future energy needs.

The U.S. is also shipping more and more coal to Europe, because of the "soft dollar," from ports like Newport News and Portsmouth on the Virginia coast.

"Spot [market coal] prices are so high and the Europeans will pay it."

Jones does not believe the federal government should dip into its own petroleum reserves.

"This concerns Air Force leaders. We don't have enough indigenous fuel for them to conduct and sustain an air war. Should we develop reserves we have that are untapped? There is a strong argument for that," Jones said.

Jones sees a dramatic difference between the days of World War II and current fuel shortages.

"In World War II, we supplied all the iron ore, coal and oil that the allies needed. But the Air Force was not using a lot of fuel back then."

The increasing production of biofuels is creating other problems, by raising the prices of corn and soy beans, said Jones, whose family has raised corn and beans on 175 acres along the Kanawha River for many years.

Rising corn prices, which doubled in the past two years, have already forced Monsanto to close its ethanol plant in Minnesota.

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