Consol Energy

"Consolidation Coal Company" redirects here. For the unrelated company that formerly operated under the same name in Iowa, see Consolidation Coal Company (Iowa).

Consol Energy

Consol Energy logo
Type	Public
Traded as	NYSE: CNX
Industry	Coal mining, Natural Gas Production
Founded	1864 (1864)
Headquarters	Cecil Township, Pennsylvania, United States
Key people	J. Brett Harvey Chairman & CEO William J. Lyons CFO & Executive VP Nicholas J. DeIuliis President Robert F. Pusateri Executive VP Robert P. King Executive VP P. Jerome Richey, Secretary & Executive VP[1]
Products	Coal Natural gas Timber Electric power
Services	Transportation
Revenue	US$5.236 billion (2010) [2]
Employees	8,827[2]
Subsidiaries	Fairmont Supply
Website	consolenergy.com

Consol Energy (former name: The Consolidation Coal Company) is an energy company headquartered in the Pittsburgh, Pennsylvania, USA, suburb of Cecil Township, in the Southpointe complex. It is one of the US's largest coal mining companies, along with Peabody Energy and Arch Coal. The company has some 4.5 billion tons of proved reserves, mainly in northern and central Appalachia and the Illinois Basin, and produces about 65 million tons of coal annually.^[3] The company has natural gas reserves totaling 1.9 trillion cubic feet (54 billion cubic metres).^[3]

History

The Consolidation Coal Company was established in 1864 and headquartered in Cumberland, Maryland, for the first 85 years (1864-1945) where the company became the largest bituminous coal company in the eastern United States.

The company's origin began in the early 19th century when a 14-foot (4.3 m) thick seam of bituminous coal referred to historically as "The Big Vein" was discovered in the Georges Creek Valley of Western Maryland. This coal region became famous during the industrial age for its clean-burning low sulfur content that made it ideal for powering ocean steamers, river boats, locomotives, and steam mills, and machines shops. However, coal production did not become important until the Baltimore and Ohio Railroad reached Cumberland in 1842. In 1850, the opening of the Chesapeake and Ohio Canal from Cumberland to Washington, D.C. provided another route for coal shipments. Over 21 million short tons of coal were transported on the canal before it closed in 1923. By 1850, almost 30 coal companies were mining the Georges Creek Valley, producing over 60 million tons of coal between 1854 to 1891. The Consolidated Coal Company was formed as a consolidation of the many coal mine and railroad companies of Western Maryland founded during the rush years. The Cumberland and Pennsylvania Railroad was owned by the Consolidation Coal Company.

Western Maryland's coal production rose about 1 million short tons in 1865, exceeded 4 million short tons by the turn of the century, and reached an all time high of about 6 million short tons in 1907. A small amount of the coal production in the early 1900s was premium smithing coal (as in blacksmith) that was specially processed and delivered in boxcars to customers throughout the United States and Canada.

Sharp declines in coal demand after 1920, reflecting downturns in the economy, recurrent labor problems and the extensive replacement of coal by petroleum, led to further consolidations and mergers in the coal industry. In 1945, Consolidated Coal Company merged with the Pittsburgh Coal Company, and the corporate headquarters was moved from Cumberland to Pittsburgh. In 1966 the Continental Oil Company (Conoco) purchased the assets of Consolidation Coal Company, and in 1981 DuPont purchased Conoco. The Consolidation Coal Company continued to exist as a subsidiary of Dupont until 1998 when the subsidiary was purchased from Dupont by Rheinbraun U.S.A. GmbH. As of 1999 the company has renamed itself to Consol Energy, reflecting the diversification of the business into other forms of energy.

Timeline

Table of Cumberland Coal Trade Production 1865

• In the early 19th century, a 14-foot (4.3 m) thick seam of bituminous coal referred to historically as "The Big Vein" is discovered in the Georges Creek Valley in Western Maryland. This coal region would become famous for its clean-burning low sulfur content that made it ideal for powering ocean steamers, river boats, locomotives, and steam mills, and machines shops. By 1850, almost 30 coal companies would be mining the Georges Creek Valley, producing over 60 million tons of coal between 1854 to 1891.
• 1860 Consolidation Coal Company is formed with the merger of several smaller coal mining firms in the Georges Creek Valley.
• 1864 Consolidation Coal Company is formally incorporated in Cumberland, Maryland.
• 1878 Offices moved from New York to Baltimore.
• 1921 Moved offices back to New York.
• 1925 Consolidation Coal Company becomes largest bituminous coal producer in the United States, a distinction it retains today.
• 1934 Seventieth Anniversary
• 1945 Consolidation Coal merges with Pittsburgh Coal Company.
• 1958 Renamed Consolidation Coal Company.
• 1964 One hundred year anniversary.
• 1966 Continental Oil Company (Conoco) acquires Consolidation Coal Company.
• 1981 Conoco, along with subsidiary Consolidation Coal Company, is acquired by DuPont.
• 1991 RWE A.G, through its direct and indirect wholly owned subsidiaries Rheinbraun A.G. and Rheinbraun U.S.A. GmbH, purchases 50%t of Consolidation Coal. CONSOL Energy Inc. is formed as a subsidiary of DuPont Energy Company and Rheinbraun affiliates.
• 1998 CONSOL Energy purchases shares of its common stock from DuPont Energy. After this transaction, Rheinbraun A.G. and Rheinbraun U.S. GmbH together own about 94 percent and DuPont Energy 6 percent of outstanding shares of common stock.
• 1999 CONSOL Energy stock begins trading on NYSE under the symbol "CNX," with the public offering of 20.6 million shares of its total 80.3 million shares.
• 2000 CONSOL Energy purchases extensive coalbed methane reserves and facilities in southwestern Virginia from MCN Energy Group Inc.
• 2001 CNX Ventures announces agreement on joint venture with Allegheny Energy to construct 88-megawatt, coalbed-methane-fueled electricity generating facility in southwestern Virginia, which begins operating in 2002. Acquires coalbed methane gas production and gathering pipeline facilities in southwest Virginia from Conoco.
• 2002 Through subsidiary CNX Marine Terminal Inc., begins operation as a break bulk and general cargo and warehouse provider at facilities in Baltimore.
• 2003 Completes sale of Canadian coal assets and port facilities to Fording Inc.

Operations

Boat operated by Consol Energy passing downtown Pittsburgh, PA.

Through its subsidiary, CNX Coal, the corporation manages coal mining operations, with bituminous coal mining complexes in six states. CNX Gas extracts methane gas for home use in the Appalachian and Illinois basins, and it is one of the nation's largest natural gas suppliers. CNX Land manages over 430,000 acres (170,000 ha) of forest land in the US and Canada, using the land both for timber production and energy use. CNX Ventures manages several East Coast power stations, while CNX Services provides transportation for raw materials.

Consol Energy also operates 22 boats and over 620 barges for transporting coal.^[4]

Financial results

Consol Energy has annual revenues of $102.2 billion. Customers include electric utilities and steel mills; Allegheny Energy is its largest customer.^{[5][not in citation given]}

Consol Energy entered the S&P 500 on June 28, 2006, replacing Knight-Ridder.^[6]

Controversies

From 2005-2010, Consol Energy donated more than $45,000^[7] to now acting governor, Tom Corbett, which some believe was a payoff in exchange for no severance tax and the repeal of environmental policies created to protect the environment from natural gas drilling^[8].

In September 2009, several thousand fish were killed in Dunkard Creek, Monongalia County, West Virginia. After an investigation, the Environmental Protection Agency found that mining discharges from Consol Energy's Blacksville No. 2 mine created the conditions for a golden algae bloom, killing the fish.^[9]

At the company's annual shareholder meeting on May 4, 2010, CONSOL Energy CEO, J. Brett Harvey, announced that CONSOL Energy is planning to develop mine water resources, stating, "I'd love to be in the position where I am selling water to all our competitors." With CNX and CXG's planned drilling expansion in Marcellus Shale, the use, treatment and disposal of water used in the drilling process is generating more controversy.^[10]

Pennsylvania DEP and Environmentalists are charging that extremely salty well wastewater pollution in creeks and soil are the outcome of Marcellus Shale drilling and that, without state and federal regulation, the Dunkard Creek fish kill will be considered minor in comparison to the widespread environmental destruction on the horizon.^[11]

On March 19, 2009, William Bruno, a retired 30-year veteran of CONSOL energy,^[12] released his book,^[13] "The King Rat and His Court; Lessons in Corporate Greed.". Although the book does not specifically name a company or people, controversy has arisen due to the fact that Mr. Bruno credits his 30 years of experience working in corporate offices and boardrooms in his author bio.

Political involvement

Consol Energy provided the National Rifle Association access to its Blacksville No. 2 coal mine in West Virginia to film a television advertisement with an anti-Barack Obama message.^[14] The National Rifle Association intended to ask miners the question "How do you feel about having your Second Amendment rights taken away if Obama becomes president." Word spread among pro-Obama miners who contacted their union, the United Mine Workers of America, resulting in 440 miners taking the day off in a contract-sanctioned protest, and halted production at CONSOL's Blacksville No. 2 coal mine.^[15]

Stephen G. Young, a vice president at CONSOL, gave $2,000 to Sen. Robert Byrd.^[16]

Lobbying

CONSOL Energy is second only to Peabody Energy in the amount of contributions to lobbying in 2010.^[17] In the first quarter of 2010, Consol has spent $1.02 million dollars influencing the U.S. House of Representatives and Congress,^[18] on issues relating to the coal mining industry. In 2009, total spending for lobbying by Consol exceeded $3 million,^[19] and in 2008 CONSOL Energy contributed more $4.0 million to lobbying.^[20] Prior to 2008, Consol Energy's spending for lobbying activity was $0 – $90,000 annually.^[21]

Significant portions of lobbying funds from CONSOL Energy have been directed against the "Employee Free Choice Act,^[22]" which some labor groups use to claim CONSOL is "Anti-Union." ^[23]

Naming rights

Consol Energy has put its name to two sports facilities in its Pittsburgh-area home:

• CONSOL Energy Park, home of the Washington Wild Things minor league baseball team near Washington, Pennsylvania near Pittsburgh.
• CONSOL Energy Center, home of the Pittsburgh Penguins in the city of Pittsburgh.^[24][25]

It is estimated that CONSOL Energy won the bid for naming rights at a cost between $2.0 - $4.0 million per year, for 21 years.^[26]

See also

• Cumberland and Pennsylvania Railroad
• CONSOL Energy Mine Map Preservation Project

References

• Brugger, Maryland: A New Guide to the Old Line State, Johns Hopkins University 1999, ISBN 0801859808
• Albert L. Feldstein, "Feldstein's Historic Coal Mining and Railroads of Allegany County, Maryland", Publisher Albert L. Feldstein, 2000, ISBN 0-9701605-0-X (This book consists of 135 historic Allegany County coal mining and railroad related photographs. These are primarily from the early 1900s. Accompanying each depiction is an historical narrative with facts, figures, dates and other information. Included within this number are 23 biographies of individuals associated with the history of coal mining in the region.)

Footnotes

1. ^ "CONSOL Energy Governance". CONSOL Energy. 2011. http://phx.corporate-ir.net/phoenix.zhtml?c=66439&p=irol-govbio. Retrieved 10/28/2011. 
2. ^ ^{a b} "About Us - Consol Energy". Consol Energy. 2010. http://www.consolenergy.com/AboutUs/Stats.aspx. Retrieved August 30, 2011. 
3. ^ ^{a b} http://www.hoovers.com/consol-energy/--ID__40101--/free-co-profile.xhtml
4. ^ http://www.consolenergy.com/AboutUs/Stats.aspx
5. ^ . http://online.wsj.com/article/BT-CO-20100429-710658.html?mod=WSJ_earnings_MIDDLETopHeadlines. ^{[dead link]}
6. ^ "S&P 500 Hot Stocks: CONSOL Energy Joins the SPX". Schaeffer's Investment Research. June 28, 2006. http://www.schaeffersresearch.com/commentary/observations.aspx?click=home&ID=16327. Retrieved July 8, 2010. 
7. ^ http://www.marcellusmoney.org/candidate/corbett-tom?order=title_1&sort=asc
8. ^ Hopey, Don (February 24, 2011). "Corbett repeals policy on gas drilling in parks". Pittsburgh Post-Gazette. http://www.post-gazette.com/pg/11055/1127614-455.stm. 
9. ^ http://www.wvpubcast.org/newsarticle.aspx?id=14504
10. ^ http://www.pittsburghlive.com/x/pittsburghtrib/business/s_679530.html
11. ^ Hopey, Don (May 4, 2010). "Red flags raised over gas wells". Pittsburgh Post-Gazette. http://www.post-gazette.com/pg/10124/1055350-113.stm. 
12. ^ http://phx.corporate-ir.net/phoenix.zhtml?c=66439&p=irol-newsArticle&ID=534175&highlight=%20
13. ^ http://www.thekingrat.com/bio.html
14. ^ Huber, Tim (2008-09-22). "UMW plans stoppage over NRA filming". USA Today. http://www.usatoday.com/news/politics/2008-09-22-589613148_x.htm?loc=interstitialskipcse. Retrieved 2010-04-30. 
15. ^ Greenhouse, Steven (2008-10-02). "Mine Workers Protest Anti-Obama Ad". The New York Times. http://thecaucus.blogs.nytimes.com/2008/10/02/mine-workers-protest-anti-obama-ad/?scp=1&sq=Obama%20campaign&st=cse. Retrieved 2010-04-30. 
16. ^ http://www.ohvec.org/newsletters/woc_2005_12/article_17.html
17. ^ http://www.opensecrets.org/industries/indus.php?ind=E1210
18. ^ http://soprweb.senate.gov/index.cfm?event=getFilingDetails&filingID=E5F56F17-7DA1-4873-8CAA-741502A3CF8B
19. ^ http://www.opensecrets.org/lobby/firmsum.php?lname=CONSOL+Energy&year=2009
20. ^ http://www.opensecrets.org/lobby/induscode.php?year=2008&lname=E1210&id=
21. ^ http://www.opensecrets.org/lobby/firmsum.php?year=2007&lname=CONSOL+Energy&id=
22. ^ http://soprweb.senate.gov/index.cfm?event=getFilingDetails&filingID=3F643A36-D0F6-49EE-B9BD-9F8AB7F2EF20
23. ^ http://www.aflcio.org/joinaunion/voiceatwork/efca/efca_profile_heco.cfm
24. ^ Price, Karen (16 December 2008). "Pens assign naming rights to arena". Pittsburgh Tribune-Review. http://www.pittsburghlive.com/x/pittsburghtrib/sports/penguins/s_603095.html?source=rss&feed=12. Retrieved 16 December 2008. 
25. ^ "CONSOL Energy Acquires Naming Rights to New Pittsburgh Arena". PittsburghPenguins.com. 2008-12-15. http://penguins.nhl.com/team/app/?service=page&page=NewsPage&articleid=398194. Retrieved 2008-12-15. 
26. ^ Simonich, Milan (December 16, 2008). "Consol wins naming rights for arena". Pittsburgh Post-Gazette. http://www.post-gazette.com/pg/08351/935400-61.stm.