Robert Murray is pumped — as though coal-fired steam might be coursing through his veins. Striding purposefully, he ascends a lectern in a conference room at Pittsburgh’s Wyndham Grand Downtown hotel toting a cardboard box with hundreds of copies of his keynote speech to give out later lest anyone miss a word.
It turns out to be a corporate version of a hellfire-and-damnation sermon for the 250 U.S. coal executives assembled at the Platts Coal Marketing Days conference. Satan and his minions aren’t in the room, but Murray knows their names.
“Environmental alarmists” and “liberal elitists,” he says, his voice rising as he whips off his glasses. And worse than them all, “the insane, regal administration of King Obama” and Obama’s Environmental Protection Agency.
Murray, 74, pauses for effect and then lowers his voice. “We have the absolute destruction of the United States coal industry. It isn’t coming back. It’s permanent. Virtually all of it is permanent. And if you think it’s coming back, you don’t understand the business. Or you’re smoking dope.”
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This is vintage Murray, America’s pro-coal provocateur-in-chief, a coal miner’s son and a former miner himself, a man whose anti-regulation record is so unwavering that he once dismissed acid rain as a hoax, never mind climate change.
His warnings are all the more interesting when framed against what Murray, chief executive officer and owner of Murray Energy Corp., is actually doing. For all the doom and gloom, he is gorging on coal mines — Murray Energy last fall spent $3.5 billion to acquire five of Consol Energy’s West Virginia operations.
Ramping up production
It was the biggest deal in the beleaguered coal sector in two-and-a-half years, catapulting his St. Clairsville, Ohio-based company into the country’s fifth-largest coal producer and making Murray Energy America’s largest privately held coal producer. Ever since, Murray’s been on a tear, ramping up production at his newly acquired mines as he ratchets up his rhetoric in defense of his beleaguered industry and against Obama’s “War on Coal.”
Yet if war is hell, Murray seems to smell something else in the air besides brimstone: money. Make no mistake about it, Bob Murray has a plan.
Statistics indicate it’s been a terrible decade for coal. Coal now generates 37 percent of the country’s electricity -— down from over 50 percent in 2007.
Still, 37 percent represents at least a $30 billion a year industry and, even as that pie shrinks, huge profits will accrue to those who stay the course. Even globally, coal’s lot is always more complicated than the dire prophesies of both its detractors and advocates.
So in the U.S., as rival coal producers get battered by stiffer emissions regulations, production cutbacks, and debt drives many into bankruptcy, Murray sees nothing but opportunity. He’ll be feasting on the losers. In a recent interview, Murray said he’s already on the hunt for his next acquisition.
“He was preparing for the regulatory regime before anyone really knew what was coming,” said Ted O’Brien, the New York-based chief executive of Doyle Trading Consultants. “He’s going to be one of the last-standing U.S. producers, no doubt.”
Growing up in small towns on the western banks of the Ohio River, Murray was 9 when his father was paralyzed from the neck down in a mining accident. When his mom later contracted breast cancer, he started mowing lawns to support the family. He’d strap a coal miner’s lamp to see where he was going in the night.
Murray went into the mines himself at 17 on his way to being named valedictorian of Bethesda High School. And though the nearby towns offered to send him to medical school if he’d come back and replace the local doctor, he chose instead to study mine engineering at Ohio State on a $6,500 scholarship from North American Coal Corp.
He worked for North American Coal for 31 years, climbing the ranks fast enough to oversee 7,000 employees by the time he was 30. He’d go on to mine lignite in Texas and Wyoming, work a coal-gasification project in North Dakota, and help build the Powhatan No. 6 mine in eastern Ohio, a couple dozen miles from his childhood home.
He worked himself up to CEO and in his telling, he was fired in October 1987 after he refused to get behind the company’s plan to reincorporate in Delaware and shed obligations to some 1,800 retirees whom Murray had spent years working alongside.
In spring 1988, Murray took a $66 million loan, mortgaged his home and bought the Powhatan No. 6 mine himself.
Even then, Murray lashed out at what he saw as meddling from politicians and regulators. He opposed measures seeking to limit what he still dismisses as “so-called acid rain.” In an interview back then, he blasted proposals to toughen U.S. emission standards as “criminal fraud” being perpetrated by a “terrible government and a terrible president.”
He was referring to George H.W. Bush.
These days, the power plants he’s targeting are the ones too important to be taken off the grid and too expensive to convert to natural gas. “That same strategy will carry me into the future,” he said.
Still, Murray has a lot more riding on his gamble this time around. He has a staff of 7,400 people, including his three adult sons who are in management. He has 12 active, underground mines, a fleet of boats and barges, and factories to make his own equipment.
This year he expects to mine 64 million tons of coal, worth about $3.6 billion. That’s up from revenue of $1.3 billion in 2012, according to Moody’s Investors Service.
Murray’s safety record has drawn censure from federal regulators and environmental groups. In 2013, the company ranked 22 of 25 among the largest U.S. coal producers for incident rates, according to the Mine Safety and Health Administration.
On Aug. 6, 2007, six of Murray’s miners, working 1,800 feet deep in the Crandall Canyon mine in Utah, were killed when pillars supporting the mountain above them buckled. Ten days later, three rescue workers who tunneled in to retrieve them died during a second collapse.
Murray, forced into the spotlight, shouted down reporters on TV and insisting the collapse hadn’t been the result of flawed mining designs but of an earthquake. “That mountain is alive,” he said in an emotional interview on CNN.
Some of Murray’s coal-mining brethren think his combative strategy isn’t helping the industry, even if they might admire his fire. The “War on Coal” counterattack isn’t winning the industry much sympathy outside of the mines among average Americans, says Greg Boyce, CEO and chairman of Peabody Energy, America’s largest coal producer.
Still, “Bob Murray is an extremely passionate individual,” Boyce said. “He loves the industry. He loves his employees. Everybody has a different style.”