Daily Quick Read _ August 16, 2019

Coal Is Over and Moscow Mitch Knows It

In coal country, they know that coal is over.  Trump isn’t going to bring it back.  In fact, the Green New Deal would help this region substantially more than all the bluster from Trump.  Coal isn’t coming back and its demise may take the pensions and health care from the miners and their families that carried the load for their whole lives.

Thousands of coal miners are currently at risk of losing their pensions. The Coal Miners’ Pension fund is estimated to become insolvent by 2022 as many of the companies that were paying into the fund have filed for bankruptcy. The Black Lung Disability Trust Fund that was founded to provide benefits to coal miners with black lung disease – a progressive disease that eventually suffocates sufferers – is also severely underfunded.

On 23 July 2019 about 150 coal miners and their widows visited Washington DC to appeal Congress to pass legislation ensuring these benefits are properly funded. Several retired coal miners who made the trip were unhappy with the response from Republicans, especially Senate majority leader Mitch McConnell.

“McConnell came in, never did sit down and said ‘I thank you for being here. I know you’re concerned about your taxes on black lung, I just want you to know we’re going to take care of it,’ and out the door. I said: ‘no he didn’t!’ We drove ten hours to sit with our representatives and talk to them and that’s all we get,” said George Massey, who worked as a coal miner in Benham, Kentucky for 23 years and has served on the town’s council for 19 years.

"They look at us like we’re something under their shoes. They couldn’t care less about coal miners in south-east Kentucky,” Massey added.

The Rich Get Richer - Everyone Else Gets Screwed

When the Blackjewel coal mining company declared bankruptcy in June, the company literally walked away from its obligations in Appalachia and Wyoming. Miners in Wyoming found their final pay checks bouncing and the company’s 401k plan went belly-up. Guess who came out of the Blackjewel collapse money ahead?

Riverstone Holdings LLC, an energy investment firm with $39 billion in capital and offices in financial centers around the globe, may be the bankruptcy winner. Blackjewel owed the firm $34 million when it entered bankruptcy, from a loan made to the mining company in July 2017.

Filings in bankruptcy court document how Riverstone maneuvered to protect its interests, propping Blackjewel up with a $5 million loan to prevent the company’s liquidation, then making deals in the bankruptcy auction to recoup its investments. If those deals hold, Riverstone could ultimately walk away from Blackjewel with $40 million, according to court filings.

While Riverstone came out ahead, most everyone in Wyoming associated with Blackjewel is taking a bath.

Other debtors won’t emerge nearly as unscathed. Blackjewel owes Campbell County $37 million in taxes, owes Wyoming $11 million and owes the federal government $60 million in mineral royalties (half of which would have gone back to Wyoming). Then there are smaller but perhaps more hard-hitting losses to miners and businesses.

Workers in Wyoming lost money the company never put into their retirement accounts and some haven’t been paid for their final days working at the mines. Gillette businesses have had to lay off employees and carry unpaid bills that represent significant chunks of their revenue. 

Good News On the Plastic Front

This is sort of good news. Coke is following Pepsi and other bottled water companies moving from plastic single serve bottles to aluminium.  If fully implemented by the announced companies this move will replace billions of single use plastic bottles with more recycling friendly aluminium.  It's only sort of good news, because it doesn’t answer why people routinely need water in throw away containers in the first place?

Coca-Cola is stepping up its green initiative by giving a makeover to its Dasani brand, which is the best selling bottled water brand in a country where bottled water is the best selling beverage.

The beverage giant will start to sell Dasani water in aluminum cans next month in the Northeast and plans to expand distribution to other parts of the country by 2020, according to Bloomberg. Aluminum bottles will follow the aluminum cans. Worldwide, aluminum is exponentially more likely to be recycled and to be made from recycled material. Additionally, aluminum is far less likely to end up in oceans and rivers.

Coca-Cola's packaging follows a move by its chief rival PepsiCo, which announced it would sell its water brand, Aquafina, in cans at restaurants and arenas. Dasani and Aquafina are the country's top two water brands, in that order, with combined sales of more than $2 billon per year, according to Bloomberg.

The change to Dasani's packaging could help Coca-Cola eliminate 1 billion virgin plastic bottles, made with non-recycled plastic, from its supply chain over the next five years, according to CNN.

Solid Electricity - Aluminium's Carbon Footprint

Another issue with single serve aluminium cans is the environment challenge that aluminium production poses.  Although aluminium is much more likely to be recycled, it is still an environmental mess to get the stuff out of the ground and into cans in the first place.

The pitch that everyone is making is that an aluminum can is better for the environment than a PET bottle because aluminum is so easy to recycle. The problem is that it ain't necessarily so. Ever & Ever says "aluminum is infinitely recyclable" and "cans are made from an average of 70 percent recycled material."

The problem is that other 30 percent. Even if recycling captured 100 percent of aluminum (it doesn't), there wouldn't be enough recycled material to meet demand because the market keeps growing and people keep thinking up new uses for it, like canned water. That means we need a lot of new aluminum.

Making primary aluminum is in almost every way an environmental disaster. First you have to mine the bauxite in Jamaica, Malaysia and China, destroying agricultural lands and forests in the process. Mining of bauxite ore has increased from 200,000 tonnes in 2013 to nearly 20 million tonnes last year, thanks to increased demand, primarily from China.

Aluminum has been called "solid electricity" because it takes so much of it to separate the oxygen from the aluminum in alumina. That's why it often gets shipped off to Canada or Iceland where there is cheap, clean hydro power. But even there, they make it by sticking carbon anodes into pots so that when they jolt it with electricity, the carbon and oxygen combine to make, guess what, carbon dioxide.

So in the end, that 30 percent of new aluminum that goes into the can is just about the dirtiest material you can make, far worse than PET from a carbon and pollution point of view.

What the Pod People Ride

Recycling an aluminium can to become another aluminium can isn’t very dramatic, but recycling the tiny pods used in the Nespresso coffee machine into a bicycle is an interesting twist.  It’s a way to highlight a circular economy, but it still requires a major consumer commitment to recycling discipline.

I’m on a fabulously stylish purple seven-gear bicycle, made by a Swedish startup called Vélosophy. The bike epitomizes minimalist Scandinavian design, with clean lines and sleek wheels. You would never guess that it was made from 300 old aluminum Nespresso pods.

While there’s growing consumer awareness around the world about how plastic is clogging up our landfills and oceans, prompting many brands to use recycled plastic and explain their sourcing to their customers, there hasn’t been as much discussion about the life cycle of aluminum.

Östholm has used recycled aluminum in his bicycles from the time he launched his company three years ago, but he says customers didn’t seem to care much about it. He’s hoping that talking about a bicycle made of coffee capsules that were once on people’s kitchen counters might be intriguing to his audience. “When I’m sourcing recycled aluminum, I don’t know what products the material used to be,” he says. “The difference now is that I know these used to be Nespresso pods, and [I] can share that with my customers.”