By Christopher Coats

Coal industry lobbying expenditures continued to slide in the second quarter, despite the industry facing significant new and evolving challenges on the federal level.

An SNL Energy analysis of coal sector lobbying disclosures shows that spending by companies and industry organizations slipped to approximately $3.1 million in the second quarter, down from $3.3 million in the first quarter and roughly a million dollars lower than the year-ago period.

Lobbying expenditures include but are not limited to travel expenses, office rent, salaries for in-house lobbyists, legal fees, association dues and funds paid to any outside service for lobbying services.

The spending decline comes as the U.S. coal industry struggles to clear numerous hurdles on the federal level, including both newly proposed measures and regulations that are already being implemented.

The newest challenge is a rewritten version of a stream protection rule from the U.S. Office of Surface Mining Reclamation and Enforcement, which requires companies to test and monitor the condition of streams before, during and after mining operations, and also requires companies to restore streams and mined-over areas to the uses they were capable of supporting prior to mining.

Additionally, the industry is fighting for federal financial funding for carbon-capture projects and is lobbying hard against the U.S. EPA's Clean Power Plan, scheduled for release as early as next month. The plan, which has provided a target for administration critics and the coal industry as a whole, is intended to place limitations on carbon emissions from coal-fired power plants, resulting in facility closures, job losses and lower domestic coal demand.

Despite the industry's many roadblocks, most companies and organizations tightened their budgets in the second quarter. The two largest declines in spending were seen at Peabody Energy Corp., which reduced its lobbying expenses by roughly $130,000 from the previous quarter, and the National Mining Association, which cut approximately $50,000 from its lobbying budget.

The NMA is an industry trade group representing most U.S. coal producers, including Alpha Natural Resources Inc., Arch Coal Inc., CONSOL Energy Inc., Cloud Peak Energy Inc., Foresight Energy LP, Hallador Energy Co., Murray Energy Corp. and Walter Energy Inc.

The association reported total lobbying expenses of $1.1 million in the second quarter, or roughly half as much as the $2.0 million it spent in the second quarter of 2014.

After filing for bankruptcy protection for the second time since 2012, Patriot Coal Corp. lowered its lobbying expenditures to $60,000 in the second quarter, down $25,000 from the previous quarter and $40,000 from the same period of 2014.

Some exceptions

Although most industry actors drew back on spending, there were some exceptions, most notably by CONSOL, which spent $340,000 during the period compared to $295,000 in the first quarter. The rise in spending marks the company's highest quarterly amount in the last 12 months.

However, CONSOL spokesman Brian Aiello told SNL Energy that the company expects 2015 spending to be lower than previous years overall, with the second-quarter increase attributed to the timing of when invoices from various trade groups were received and processed internally.

Westmoreland Coal Co. and the industry's largest labor union — the United Mine Workers of America — also reported modest increases in spending, with the latter increasing from $155,542 to $165,351 in the most recent period.

Although industrywide lobbying expenditures continued to decline in the second quarter, this does not necessarily reflect an overall reduction in industry spending aimed at policy makers. Coal companies, employees and industry organizations are able to contribute directly to candidates or political action committees during election and nonelection years.

An early analysis of these contributions show some increases in candidate and PAC contributions during the second quarter of 2015, though a final review will not be possible until reporting deadlines at the end of July.

While these direct contributions have traditionally increased during election years, there is no guarantee that lobbying spending will also climb in the run-up to the 2016 federal elections.

Daniel Auble, a senior researcher for the Center for Responsive Politics, previously downplayed the role of election year activity for changes in lobbying spending, telling SNL Energy: "In the lobbying world [as opposed to campaign contributions] spending is not generally or heavily affected by the elections. There are exceptions, but it's much more issue-driven. We are more likely to see spikes from a particular industry during fights over relevant appropriations bills or other policy debates that apply to them."