Category Archives: Media

Tired of Fake News? It Will Get Worse.

Tired of fake news? Too bad, you’d better get used to it. The number of newspaper jobs in the United States continues to plummet with no sign of leveling off. Old media is in free-fall, and new media shows little sign of stepping in to fill the void created by its destruction.

As many problems as I have with media bias (especially at the national level), biased newspapers are better than no newspapers at all. At least you can learn to read between the lines. But if newspapers don’t exist, there’s nothing to read, period. At the recent rate of decline, the industry could be kaput in twenty years.

Then you’ll have to get your state/local news from television, press releases, blogs, and social media — or from publications bankrolled by billionaires.

The Terrifying Power of the Media to Shape Opinion

Only 18% of Americans support the U.S. Senate healthcare bill to replace Obamacare, says one poll. Only 12%, says another, and only 8% says yet another. Given the slow-motion collapse of Obamacare, that’s remarkably low. With numbers that low, even a majority of Republicans must oppose the bill.

Could the public’s negative opinion be shaped by the fact that the media has overwhelmingly portrayed the bill in overwhelmingly negative, even apocalyptic, terms?

A big drawback of the bill is that health care insurance would be more expensive for older Americans. I Googled the phrase, “Senate healthcare bill more expensive for older adults.” Every article cited on the opening page stressed the harm that the bill would do to seniors. Seventy-five percent of Googlers never go past the first page of results. To find countervailing analysis, searchers would have to dive way deeper into the results.

An offsetting benefit is that the bill would make health care insurance cheaper for young adults and free them from the Obamacare mandate of purchasing insurance. So, I Googled the phrase, “Senate healthcare bill cheaper for young adults.” The opening page was a mixed bag. Some results were balanced and some negative. None were positive. Here are the headlines:

9 Things To Know About The Senate Health Care Bill (NPR). The article notes, “The oldest people under 65 can be charged five times more than the youngest, and maybe more depending on state rules.” It says nothing about young adults paying less.

How the Senate’s Health-Care Bill Would Cause Financial Ruin for People with Preexisting Conditions (Atlantic). The headline speaks for itself. The article doesn’t even address the issue of how young people are impacted.

Winners and Losers of the Senate’s Health-Care Bill (CNBC). This article does acknowledge that young adults would benefit: “The Senate plan, like the House bill, would give insurers greater flexibility to charge younger enrollees much lower premiums and to offer skinnier plans in states that opt out of ACA’s essential health benefit requirements.”

The Senate health care bill: What’s in it and what to watch for in the CBO report (Politifact). This article provides a balanced statement: “Today, companies can’t charge older customers more than three times what young adults pay. The Senate bill increases that to five to one. This change reduces premiums for the young and increases them for those in their 50s and early 60s.”

Senate health plan falls short of promise for cheaper care, experts say (New York Times). The Times article presents a uniformly dismal view of the bill, noting no positives of any kind.

Senate Health Bill Includes Deep Cuts to Medicaid (New York Times). This Times article tells how older Americans would be disadvantaged under the bill but ignores the offsetting advantages to younger Americans. “Older people could be disproportionately hurt because they pay more for insurance in general. Both chambers’ bills would allow insurers to charge older people five times as much as younger ones; the limit is now three times.”

The Senate health bill is brutal on older Americans (Slate). The first paragraph in this Slate article is as balanced as it gets: “One of the expressed intentions of Republicans’ efforts to repeal and replace Obamacare is to undo some of the age-related distribution inherent in the system. Today, healthy young people pay more so that older, less-healthy people don’t have to pay quite as much.” Then Slate goes relentlessly negative for the rest of the article.

Comparing the Senate health care bill to Obamacare and the House proposal (CNN). This CNN article does note that the Senate bill will repeal the mandate for adults to obtain health insurance or pay a penalty.

Senate health care bill would lower deficit, increase number of insured, estimate says (FOX). The Fox article addresses pros and cons of the bill, but nowhere does it mention how the bill would lower premiums for young adults.

The Senate health-care bill’s subsidy cuts hurt low-income, older Americans (Washington Post). While the headline is negative, the article itself is more balanced, acknowledging that young people would benefit from allowing insurers to base rates on age. “Both [the House and Senate] bills include changes that would mean older people pay more and younger people pay less.”

Summary: The results on a search inquiring about a negative aspect of the bill brings up uniformly negative and critical articles. The results on a search inquiring about a positive aspect of the bill brings up a mix of negative and balanced articles — but no positive articles. Continue reading

Why We Should Worry about a Shrinking Times-Dispatch

The Times-Dispatch building in downtown Richmond.

The Times-Dispatch building in downtown Richmond. Photo credit: Richmond Times-Dispatch

The Richmond Times-Dispatch has announced the consolidation of its print news pages and the layoff of another 33 employers, including 13 in the newsroom. The downsizing, which was part of a broader NH Media Group restructuring, came in response to the continuing shift of readers and advertisers to digital media.

“While more readers than ever turn to our digital products, our digital revenue is not growing fast enough yet to offset print revenue losses from both advertising and circulation,” wrote Terry J. Kroeger, CEO of BH Media. Customers are being hurt by the growth in online retailing, he said.

In “resetting” the legacy side of the enterprise, the Times-Dispatch is growing its online audience and developing new revenue segments such as premium magazines, e-commerce, paid events, sponsored content, and archive products and services, said Publisher Thomas Silvestri.

Bacon’s bottom line: The newspaper industry continues its slow-motion death spiral. I pray that I’m wrong, but I don’t see anything that can reverse it. Even if the Times-Dispatch grows its online readership, the transition from paper to print entails a shift from a print advertising revenue model to an online revenue model. Because the T-D enjoys a near-monopoly status in the Richmond regional print market — the tabloid Style Weekly and Richmond magazine provide the only serious competition for print dollars — print ads are highly profitable. But in the online arena, the T-D is competing against national players from Google and Yahoo! to Facebook and Craig’s List. An online reader generates significantly fewer advertising dollars than a print reader does.

Adding insult to injury, online aggregators of news content capture much of the economic value from the T-D‘s news content. We can decry the fact that Google, Facebook and other platforms are parasites on the T-D‘s content creation, but the world isn’t fair. Lamentations do not change reality.

Meanwhile, as the T-D shrinks its newsroom staff, it loses the capacity to create content. Less content for the newspaper = less content for the T-D‘s Richmond.com website. Less website content = fewer page views, and fewer page views = less online revenue. It’s a vicious cycle.

Every newspaper faces comparable challenges. But in the Virginia news eco-system, the Times-Dispatch plays a special role. As the newspaper of record in the state capital, it devotes disproportionate resources to covering the activities of state government. The Washington Post, Virginian-Pilot, Daily Press and Roanoke Times might parachute in every so often for stories that directly impact their readers, but T-D reporters are the ones who provide the routine reporting on meetings and hearings day in, day out. As the newspaper retrenches its coverage of government, accountability will diminish and politicians will run free.

How to Waste Millions: Run Political Ads on Television

Political ads on TV not worth the moneyAs I was standing in line for an hour-and-a-half at the Tuckahoe Elementary School voting station yesterday, I had the good fortune to strike up a conversation with the gentlemen next in line: John Adams, the recently retired chairman of the Martin Agency. Naturally, the conversation turned to the presidential election.

Adams opined that the vast majority of the money spent on television advertising this election season was wasted. There is little substantive that can be said in 30-second slots, and voters have learned to tune them out, he said. Candidates continue to invest in TV ads because political consultants make tons of money placing them.

His observations yesterday were prescient. Hillary Clinton outspent Donald Trump on political ads, mostly negative, by a massive margin, and to the astonishment of the television pundits she lost. Trump, by contrast, focused on generating “earned media” (news) through his tweets.

Adams is not a big fan of Twitter and other social media, which is thinks is superficial. He prefers “long-form” formats that allow the thoughtful discussion of policy issues, although he admits that thought pieces may not be to everyone’s taste.

Despite its drawbacks, TV ads can reach a large audience quickly. One suggestion from the man who presided over the Martin Agency’s creation of the Geico gecko and cave man ads: Television can be used to present positive messages that are difficult to peddle to a cynical press corps. But there is less utility in running attack ads. Reporters love nothing better than a cat fight, so it’s usually easy to inject negative spin about an opponent in the media. Whatever the ultimate solution, he says, the millions of ad dollars squandered in 2016 could have been spent to better effect.

— JAB

The Disintegration of Newspapers Accelerates

Woodward and Bernstein. The glory days of newspaper journalism are long gone.

Woodward and Bernstein. The glory days of newspaper journalism are long gone.

by James A. Bacon

The disintegration of the newspaper industry is accelerating. Even as the global advertising market is expected to grow 4% this year, spending on newspaper print ads is expected to decline 8.7% in 2016, according to estimates from GroupM, an ad-buying firm, as reported by the Wall Street Journal. That would be the biggest drop since the last recession. Leading newspaper brands like the New York Times and Wall Street Journal are getting clobbered just as hard as the smaller papers.

That decline appears to be matched by a decline in local newspaper advertising spending. I made a quick count of advertising pages in the T-D today. After excluding the non revenue-producing in-house ads and public service ads, the 38-page newspaper edition contained roughly six pages of display and classified advertising, plus a six-page advertorial insert. In the heyday of the newspaper industry, advertising comprised up to 50% of the newspaper lineage.

Newspapers are migrating as rapidly as they can to online advertising, and they are making gains. But they have much more competition in cyberspace, and the revenue yield per eyeball is lower than it is for print. Thus, while a full-page ad in a national paper might run $100 per 1,000 readers, the WSJ reports, prime-time TV ads run about $37. I haven’t checked online advertising recently, but as I recall the cost of banner ads runs around $1 or $2.

Readers of print ads are literally dying off, and so is the print-based business model that supports newsroom staffs that, though shrinking, are still substantial. What everyone needs to contemplate — and that includes Google, Facebook, and all the other technology-driven platforms that have extracted most of the economic value from online readership — is what happens when newspapers begin folding one by one. Who will report the news?

Look at all the online news aggregators — they feed off content created by others. They spend zero, zip, nada on creating content themselves. What happens when their reputable news content dries up? What will they have to aggregate? What will people have to comment upon? These entities will be exposed for the parasites they are.

I frequently chastise local newspapers for voids or failings in their coverage. But that coverage, as imperfect as it is, is vastly preferable to the information sources that would be available if there were no newsrooms. While in-depth investigating reporting is nearly dead in Virginia, reporters still cover important public hearings and other events. Without newspaper reporters, we would have almost no idea of what is happening. (I’m sorry, I don’t take TV news seriously. Local TV covers only the most controversial topics, and their format requires them to boil down complex stories to one- and two-minute snippets that skim the surface.)

Yes, newspapers’ framing of issues is biased (subtly on the part of local media, blatantly on the part of national media) by the values and worldviews of the journalists, who skew center-left. But the journalistic ethic tempers biases by fostering an ideal of objectivity that requires reporters (a) to check facts, and (b) to take note of differing points of view.

As local newsrooms shrink, there will be fewer journalists to cover a society that grows ever more complex. Reporters will know less and less about the topics they are writing about, and their coverage inevitably will become more and more shallow. At some point their value-add will be negligible. Then our main sources of information will be press releases, think tank studies, official presentations at public hearings, commentary, and bloggers unconstrained by journalistic ethics of any kind.

If you thought the state of public discourse in America couldn’t get any worse, think again.

J. Stewart Bryan III, R.I.P.

J. Stewart Bryan III. Photo credit: Richmond Times-Dispatch

J. Stewart Bryan III. Photo credit: Richmond Times-Dispatch

by James A. Bacon

J. Stewart Bryan III, long-time chairman of Media General Inc., died Saturday at age 77 from complications stemming from a fall at his home. Born and bred as a newspaper man, he presided in recent years over the transformation of Richmond-based Media General from a newspaper-dominated conglomerate into a pure-play corporation owning 71 local television stations across the country.

When I joined Media General in 1986 as part of the start-up team for Virginia Business magazine, the company was highly profitable. Newspapers were fat with display advertising, and Sunday editions were so loaded with classified ads they could double as doorstops. The company owned local television stations as well as the Fairfax County and City of Fredericksburg cable television operations, a New Jersey newsprint recycling company and a slew of smaller enterprises. But senior management at the time was widely regarded as aging, decrepit and lethargic, and the company barely fended off an effort by New York money manager Mario Gabelli to put its slate of nominees on the board of directors.

Taking over as CEO in 1990 Bryan brought new executive talent into the organization and as well as a philosophy of tempered change. A true Richmond blue blood, he epitomized what was best and worst about the city’s aristocracy. He was always the gentleman, unfailingly polite and considerate to those around him. He was unflappable in temperament and loyal to those who had been loyal to him (and to his father, former CEO D. Tennant Bryan). From what I could observe, he was highly ethical in his business and personal conduct. While I felt plenty of pressure from above as publisher of Virginia Business magazine (a tiny cog in the larger machine) to raise profitability, I was never encouraged to take ethical short-cuts of any kind.

The flip side of Bryan’s gentility was excessive caution in steering the company into the future.  Media General was slow and halting in responding to the Internet challenge — although, in retrospect, it’s not clear that any other newspaper has performed much better. At a measured pace, Bryan did some smart things. He sold the cable properties to Cox Communications at a huge premium. He sold the cyclical, capital-intensive newsprint recycling business. He sloughed off smaller non-media properties. And by the early 2000s, he had presided over the refocusing of Media General into a media company with newspapers, television and Internet. The vision, as best exemplified in the company’s Tampa operation, was to fuse the unique strengths of television, newspaper and the Internet into an integrated media platform.

To this day, I think it was a pretty good vision. If the world had moved at a slower pace (and if federal regulations hadn’t made it nearly impossible to own television and newspapers in the same media market), it might have worked. But no one anticipated the speed with which the Internet would disrupt the newspaper industry. Within a few short years, classified advertising — jobs, cars, real estate, personals — moved online, gutting newspaper revenues. The volume of display ads shrunk, too, and newspapers lost pricing power as readers of the print content and the display ads embedded in them migrated to Internet content and banner ads. While newspapers could boast of more readers than ever by combining print and online numbers, advertising yielded far less revenue per reader. As sales tanked, newspapers survived by cutting costs, including newsrooms, which diminished the value of their content in the eyes of readers. It was a vicious cycle that no one, not even the Jeff Bezos-owned Washington Post, has figured out how to reverse.

I saw most of this coming and in my last couple of years at Virginia Business, I desperately tried to transplant our still-strong business-to-business brand onto the Internet by means of hybrid print-Internet products and even some unique Internet-platform products. I felt confounded by an unwillingness of Media General to fund any initiatives — we had to boot-strap everything — and my inability to circumvent the incompetent leadership of the company’s Internet team. In my final gambit, I presented a proposal asking Media General to invest in an enterprise I called “Datamancer,” which would have leveraged the Virginia Business brand to create a cluster of business-intelligence products capable of generating a subscription-driven revenue stream. There was zero interest in the idea — perhaps less than zero interest. The response was more like, ew, get this proposal off my desk! I departed Media General soon thereafter, in 2002.

I cannot say my idea would have succeeded, but that’s almost irrelevant. The larger point was the lack of interest in even exploring it. My penchant for blurting out awkward truths in management meetings probably did not help me. But Media General’s corporate culture was antithetical to outside-the-box thinking. The company pursued a strategy within its field of competency of acquiring other media properties, consolidating operations, sharing costs and cutting overhead. Needless to say, Media General did not succeed in cost-cutting its way to growth.

Indeed, the company nearly met an early demise when it borrowed heavily to purchase a chain of television stations, roughly doubling its television portfolio. Bryan was no longer CEO then, but he allowed the transaction to move forward. When the 2008 recession hit soon thereafter, Media General was way over-extended financially. Amidst speculation that the company might default on its bonds, shares of its stock fell as low as $1 per share. The company survived by restructuring its debt in a last-minute deal and by unloading its newspapers. Since then, the company has rebounded smartly, with the promise of an extra boost from a federal ruling that will allow television stations to auction some of their broadcast spectrum.

I can’t imagine that Bryan, who had long before relinquished his role as CEO, had the same attachment  to Media General in his final days that he did back when served as publisher of the Richmond Times-Dispatch. But it must have been some consolation to him that the fortunes of the company had rebounded to $16 a share.

Media General is in the midst of a bidding war right now, and there is a chance that it could be purchased by Des Moines-based Meredith Broadcasting Group at a modest premium. With Bryan gone, there is little to tie the corporate headquarters to Richmond. If Meredith takes over and consolidates operations in Iowa, Richmonders may have yet another reason to mourn Bryan’s passing.

There is a larger lesson here for those who obsess about the inequality of wealth and the rise of a permanent aristocracy. Once upon a time, Stewart Bryan ranked among Virginia’s wealthiest citizens. With money, lineage and social standing, he was a central figure in Richmond’s old elite. Disrupted by the Internet, the source of that wealth has shriveled. The old blue bloods hold no sway in Richmond any longer. Bryan’s passing marks the fading of a way of life. As long as America’s economy remains free, vibrant and dynamic, new generations of wealth will always supplant the old.

Who Will Report the News? Looks like BH Media… For a While

Image source: Wason Center for Public Policy

Image source: Wason Center for Public Policy

by James A. Bacon

BH Media, a  71-paper newspaper chain, has expanded its reach in Virginia by purchasing the Fredericksburg Free Lance-Star. The acquisition expands the number of print-internet media properties in Virginia from 32 to 33.

The company, owned by Warren Buffet’s Berkshire Hathaway, established a presence in Virginia when it acquired Media General’s newspaper portfolio, including the flagship Richmond Times-Dispatch as well as newspapers in Charlottesville, Lynchburg, Danville, Bristol and a slew of smaller communities. Since then, among more notable acquisitions, the company has picked up the Roanoke Times, the Martinsville Bulletin and now the Free Lance-Star.

The acquisitions are a sign of weakness, not strength, in the newspaper business. By the economic logic of the pre-Internet world, The Free Lance-Star should be prospering — it owns the market in the fastest-growing metropolitan region of Virginia. But digital media have eviscerated newspaper revenues everywhere. The family-owned company filed for bankruptcy in 2014 and was purchased by the New York investment firm that re-sold it last week to BH Media.

Newspapers serve a shrinking audience — mostly an older demographic that never made the switch from print to digital. And its advertising base has been hollowed out the Internet. Classified ads, once the most profitable revenue source of every newspaper, has moved overwhelmingly to an online format.

Consolidation slows the seemingly inevitable demise of newspapers by spreading overhead costs such as finance, administration, human resources and IT over more enterprises. Consolidation also allows newspapers to make more efficient use of expensive, high-capacity printing presses, which represent the industry’s largest capital expense. Newspapers also can pool editorial resources.

What should most concern the public is what the slow strangulation of Virginia’s newspaper industry means to the quality and scope of news coverage in the Old Dominion. Society is more complex than it has ever been. The intertwining of government and business is more pronounced. We have greater need than ever of a vibrant Fourth Estate capable of explaining news to the public, monitoring the political class and keeping the big boys honest. In the print industry’s heyday, newspapers fielded teams of reporters to conduct in-depth investigation and producing lengthy exposes. Only a handful of people read the lengthy treatises that resulted (I wrote a few myself), but the visibility was searing. Newspapers changed society.

Journalism in a Facebook-Twitter world. Who will do journalism’s heavy lifting as newspapers’ economic base continues to erode? According to a recent Wason Center for Public Policy survey, Virginia’s Millennials rely upon Facebook as their number one news source. Facebook doesn’t create any content — readers do, and for the most part, they simply point to content elsewhere on the Internet created by others. While Facebook arguably provides a useful service of allowing readers to aggregate content for their network of friends, from a content-creation perspective, it is a parasite. A very efficient, blood-sucking parasite. Facebook may well capture more economic value from a reader clicking through to newspaper content than the newspaper itself does — and without the considerable cost of collecting, vetting and editing the news.

Millennials do watch national and local TV, but broadcast TV stations are hardly known for their in-depth reporting. Local newspapers rank near the bottom of media they consume. I can foresee a time, 20 or 30 years hence, when Virginia will become destitute of local-regional news beyond the coverage of events and the re-writing of press releases because the economics of the news industry will support nothing else.

We then can contemplate the irony of living in an era of incredibly advanced technology in greater ignorance of what is happening around us than any time since the 19th, or maybe the 18th, century.

The Decline of Fact-Based News

newsroom_employment

I’ve been a relentless critic of the mainstream media, which I believe is infected with a liberal bias and has done great damage to this country with its one-sided narratives. But at least the media’s ideological biases are tempered by a journalistic ethos that stresses the need for objectivity, checking “the other side” of the story, and ascertaining the facts. The media may be guilty of cherry picking the evidence, but rarely do reporters make stuff up from whole cloth.

The media’s ability to live up to its journalistic credo is increasingly in jeopardy. According to Elaine C. Kamarck and Ashley Gabriele with the Brookings Institution, total newsroom employment has declined from 43,000 nationally in 1978 (when I was embarking upon my journalistic career) to 32,900 by 2015 — a decline of 26% — even as society was becoming more complex. There still is serious journalism going on, but much of it resides behind paywalls accessible only to elite audiences that can afford the hefty subscriptions.

Meanwhile, the general public relies less upon traditional gumshoe-journalism outlets for their “news” and more upon digital content increasingly imbued with entertainment, such as Jon Stewart’s “The Daily Show” or Rush Limbaugh’s talk radio show. Even those programs, as biased as they are, are at least tethered to reality by a reliance upon video and news clips generated by the mainstream media for source material.

What is especially concerning is the proliferation of unmediated content on email and social media. I can’t count the number of right-wing rants about Obama’s faked birth certificate or some other paranoid obsession that some gullible correspondent has forwarded to me. Distorted information and outrageous lies propagate on the left wing of the ideological spectrum as well.

Social media has accelerated the metabolism of rumor-mongering to a speed faster even than email, often with profoundly negative consequences. A recent comment by Spike Lee, who is promoting a new movie about the epidemic of gun violence in Chicago, struck a chord. Gangsters respond to unfiltered, unmediated Instagram, Twitter and Facebook posts “not by typing something on their phones but by bang, bang, bang,” Lee told CNN’s Anderson Cooper.

With email and social media, people create insular networks of like-minded people who rarely question one another’s biases and assumptions. There are no fact-checking intermediaries in social media. The nature of social, cultural, economic and political reality is so complex that anyone can put a plausible-sounding but profoundly wrong spin on just about any issue. Everyone believes what they want to believe, and society schisms into mutually uncomprehending factions.

I don’t see how it ends well.

— JAB

Alpha Natural Resources: Running Wrong

Alpha miners in Southwest Virginia (Photo by Scott Elmquist)

Alpha miners in Southwest Virginia
(Photo by Scott Elmquist)

 By Peter Galuszka

Four years ago, coal titan Alpha Natural Resources, one of Virginia’s biggest political donors, was riding high.

It was spending $7.1 billion to buy Massey Energy, a renegade coal firm based in Richmond that had compiled an extraordinary record for safety and environmental violations and fines. Its management practices culminated in a huge mine blast on April 5, 2010 that killed 29 miners in West Virginia, according to three investigations.

Bristol-based Alpha, founded in 2002, had coveted Massey’s rich troves of metallurgical and steam coal as the industry was undergoing a boom phase. It would get about 1,400 Massey workers to add to its workforce of 6,600 but would have to retrain them in safety procedures through Alpha’s “Running Right” program.

Now, four years later, Alpha is in a fight for its life. Its stock – trading at a paltry 55 cents per share — has been delisted by the New York Stock Exchange. After months of layoffs, the firm is preparing for a bankruptcy filing. It is negotiating with its loan holders and senior bondholders to help restructure its debt.

Alpha is the victim of a severe downturn in the coal industry as cheap natural gas from hydraulic fracturing drilling has flooded the market and become a favorite of electric utilities. Alpha had banked on Masset’s huge reserves of met coal to sustain it, but global economic strife, especially in China, has dramatically cut demand for steel. Some claim there is a “War on Coal” in the form of tough new regulations, although others claim the real reason is that coal can’t face competition from other fuel sources.

Alpha’s big fall has big implications for Virginia in several arenas:

(1) Alpha is one of the largest political donors in the state, favoring Republicans. In recent years, it has spent $2,256,617 on GOP politicians and PACS, notably on such influential politicians and Jerry Kilgore and Tommy Norment, according to the Virginia Public Access Project. It also has spent $626,558 on Democrats.

In 2014-2015, it was the ninth largest donor in the state. Dominion was ahead among corporations, but Alpha beat out such top drawer bankrollers as Altria, Comcast and Verizon. The question now is whether a bankruptcy trustee will allow Alpha to continue its funding efforts.

(2) How will Alpha handle its pension and other benefits for its workers? If it goes bankrupt, it will be in the same company as Patriot Coal which is in bankruptcy for the second time in the past several years. Patriot was spun off by Peabody, the nation’s largest coal producer, which wanted to get out of the troubled Central Appalachian market to concentrate on more profitable coalfields in Wyoming’s Powder River Basin and the Midwest.

Critics say that Patriot was a shell firm set up by Peabody so it could skip out of paying health, pension and other benefits to the retired workers it used to employ. The United Mine Workers of America has criticized a Patriot plan to pay its top five executives $6.4 million as it reorganizes its finances.

(3) Coal firms that have large surface mines, as Alpha does, may not be able to meet the financial requirements to clean up the pits as required by law. Alpha has used mountaintop removal practices in the Appalachians in which hundreds of feet of mountains are ripped apart by explosives and huge drag lines to get at coal. They also have mines in Wyoming that also involve removing millions of tons of overburden.

Like many coal firms, Alpha has used “self-bonding” practices to guarantee mine reclamation. In this, the companies use their finances as insurance that they will clean up. If not, they must post cash. Wyoming has given Alpha until Aug. 24 to prove it has $411 million for reclamation.

(4) The health problems of coalfield residents continue unabated. According to a Newsweek report, Kentucky has more cancer rates than any other state. Tobacco smoking as a lot to do with it, but so does exposure to carcinogenic compounds that are released into the environment by mountaintop removal. This also affects people living in Virginia and West Virginia. In 2014, Alpha was fined $27.5 million by federal regulators for illegal discharges of toxic materials into hundreds of streams. It also must pay $200 million to clean up the streams.

The trials of coal companies mean bad news for Virginia and its sister states whose residents living near shut-down mines will still be at risk from them. As more go bust or bankrupt, the bill for their destructive practices will have to borne by someone else.

After digging out the Appalachians for about 150 years, the coal firms have never left coalfield residents well off. Despite its coal riches, Kentucky ranks 45th in the country for wealth. King Coal could have helped alleviate that earlier, but is in a much more difficult position to do much now. Everyday folks with be the ones paying for their legacy.

Renewable Energy: A Tale of Two Virginias

Apologies to Mr. Dickens

Apologies to Mr. Dickens

By Peter Galuszka

Call it a tale of two Virginias – at least when it comes to renewable energy.

One is the state’s traditional political and business elite, including Dominion Resources and large manufacturers, the State Corporation Commission and others.

They insist that the state must stick with big, base-loaded electricity generating plants like nuclear and natural gas – not so much solar and wind –to ensure that prices for business are kept low. Without this, recruiting firms may be difficult.

The other is a collection of huge, Web-based firms that state recruiters would give an eyetooth to snag. They include Amazon, Google, Facebook and others that tend to have roots on the West Coast where thinking about energy is a bit different.

Besides the Internet, what they have in common is that they all vow to use 100 per cent of their electricity from renewable sources. What’s more, to achieve this goal, all are investing millions in their own renewable power plants. They are bypassing traditional utilities like Dominion which have been sluggish in moving to wind and solar.

So, you have a strange dichotomy. Older business groups are saying that the proposed federal Clean Power Plan should be throttled because it would rely on expensive renewables that would drive away new business. Meanwhile, the most successful and younger Web-based firms obviously aren’t buying that argument.

I have a story about this in this week’s Style Weekly.

In Virginia, the trend is evidenced by Amazon Web Services, which sells time on its cloud-computing network to other firms. It is joining a Spanish company, Iberdola Renewables LLC, in building a 208-megawatt wind farm on 22,000 acres in northeastern North Carolina, just as few miles from the Virginia border. Three weeks earlier, on June 18, Amazon announced it plans a 170-megawatt solar farm in Accomack County on the Eastern Shore.

Dominion, which has renewable projects in California, Utah and Indiana and the beginnings of some small ones in Virginia, says it is not part of the projects. It could possibly get electricity indirectly from them. Amazon’s power will be sold on regional power grids to business and utilities.

When they complete such sales, the Net-focused firms will get renewable energy certificates that can be used to show that they have put as much renewable energy into the electricity grid as they have used, says Glen Besa, director of the Virginia chapter of the Sierra Club.

This will be especially important in Northern Virginia where there are masses of computer server farms used by Amazon and others. These centers used 500 megawatts of power in 2012 and demand is expected to double by 2017. Also, for years, the region has hosted such a large Internet infrastructure that at least half, perhaps 70 percent, of the Net’s traffic goes through there.

Part of the back story of this remarkable and utility-free push for renewables is that environmental groups are shaming modern, forward-looking firms like Amazon to do it.

Amazon Web Services was the target of criticism last year when Greenpeace surveyed how firms were embracing renewable energy. The report stated that the firm “provides the infrastructure for much of the Internet” but “remains among the dirtiest and least transparent companies” that is “far behind its major competitors.”

Dominion also got bashed in the report. Greenpeace says, “Unfortunately, Dominion’s generation mix is composed of almost entirely dirty energy sources.” Coal, nuclear and natural gas make up the vast majority of its power sources.

Its efforts to move to renewable sources have been modest at best. In regulatory filings, Dominion officials have complained that renewable energy, especially wind, is costly and unreliable although they include it in their long-term planning.

Dominion has plans for 20-megawatt solar farm near Remington in Fauquier County and is working on a wind farm on 2,600 acres the utility owns in southwestern Virginia. It has renewable projects out-of-state in California, Utah and Indiana. The output is a fraction of what Amazon plans in the region.

In a pilot offshore wind project, Dominion had planned on building two wind turbines capable of producing 12 megawatts of power in the waters of Virginia Beach. It later shut down the project, saying new studies revealed it would cost too much. It says it might continue with a scaled down project if it got extra funding, such as federal subsidies.

The utility says it must build more natural gas plants and perhaps build a third nuclear unit at its North Anna power plant to make sure that affordable electricity is always available for its customers.

As Amazon announced its new renewal projects, Greenpeace has changed its attitude about the company. Now it praises Amazon for its initiatives in Virginia and North Carolina. “I would like to think we have pushed Amazon in the right direction,” says David Pomerantz, a Greenpeace spokesman and analyst. He adds that Amazon has some work to do in making its energy policies “more transparent.”

One unresolved issue is that two neighboring states, North Carolina and Maryland, have “renewable portfolio standards” that require that set percentages of power produced there come from renewables. West Virginia had such a standard but has dropped it. In Virginia, the standard is voluntary, meaning that Dominion is under no legal obligation to move to solar or wind. It also gives the SCC, the power rate regulator, authority to nix new power proposals because they might cost consumers too much, providing Dominion with a handy excuse to move slowly on renewables.

Another matter, says Pomerantz, is whether Virginia’s legislators will enact “renewable energy friendly policies” or watch hundreds of millions of dollars in renewable project investments go to other states, such as North Carolina.

So, you have a separate reality. Traditionalists are saying that expensive renewables are driving away new business, while the most attractive new businesses are so unimpressed with traditionalist thinking that they are making big investments to promote renewable energy independently.

It isn’t the first like this has happened.