Coal communities in Appalachia and Wyoming are vital revenue engines for huge portions of the rural U.S., and they face devastation with little time to adjust to new realities.
“Transition in Coal Country” is a collaboration of the Energy News Network and WyoFile, made possible by a grant from the Just Transition Fund. The series, reported by Mason Adams and Dustin Bleizeffer, examines how the declining coal industry presents immediate and long-term changes for coal communities in Wyoming and Appalachia, how those communities are coping with change, and what they might learn from each other in charting a path to a sustainable future beyond coal. This is part one of the series; parts two and three are forthcoming.
Coal country in the United States is in the midst of a historic transition. Whether it’s Welch, West Virginia; or Cumberland, Kentucky; or Gillette, Wyoming, communities that have built their cultures and economies around coal face a future without it. This transition is not one most coal communities would have chosen, and because of the economic shock of the coronavirus pandemic, it’s transpired much sooner than anticipated.
The decline that many coal communities expected to stretch years into the future has instead arrived, seemingly, overnight. Coal’s demise was already baked into market and policy forces driving toward cleaner energy for the past 20 years, according to analysts. But this year the coronavirus pandemic’s economic implications abruptly exposed the industry’s weaknesses to hasten its downfall. Rather than a “glide path” of a decade or more to diversify from the economic base of coal, communities in coal country may see that foundation erode in just a few years.
“Basically the [Wyoming revenue] trend that’s happened here is a vertical-downward; there’s no slope, it’s just straight down,” University of Wyoming energy economist Robert Godby said in April. “It’s like the elevator is not just plunging down the elevator shaft; the cable broke and we’re just going straight down.”
By 2016, coal production in both Wyoming and West Virginia had already dropped by half from 2008. Since then, the decline has only accelerated — driven by competition from cheap natural gas, tougher restrictions on pollution, and the declining cost of solar and wind energy.
Wyoming’s coal mining industry lost 20% of its customer base in the past 10 years and will lose another 23% over the next 10 years as the nation’s fleet of coal-fired power plants continues to shrink, according to a report by the University of Wyoming and Montana-based Headwaters Economics. The same trend applies to coalfields in Appalachia, where only mines that produce metallurgic coal anticipate continuing markets in steelmaking.
Coal-fired power plants and coal mines have served as job and revenue drivers for regions that stretch far beyond a coal town’s borders. Mineral extraction from just a handful of counties accounts for the bulk of Wyoming’s revenue: 52.2% in 2017, down from 67.6% in 2006. Downturns in coal and oil in Wyoming are primary drivers behind an estimated $1.5 billion revenue loss over the next two years — an amount equal to half the state’s non-education side of the biennium budget.
Coal’s decline brings significant climate and public health benefits. But without an effective transition to find new ways to sustain these communities, entire swaths of the rural U.S. face economic devastation.
Gillette has long served as the hub of the Powder River Basin coal complex, which supplies about 40% of the nation’s thermal coal for power generation. Mine workers and local businesses have scrambled to adjust to a coal industry downturn that may only get worse. (photo by Dustin Bleizeffer / WyoFile)
Wyoming and Appalachia
The Powder River Basin and central Appalachia remain the largest producers of coal in the U.S., with Wyoming and West Virginia as the No. 1 and 2 producing states. Together, Wyoming and Appalachia produce two-thirds of the nation’s coal, and they’re the two areas that will be hit hardest by the industry’s decline.
They’re also two very different regions, with significant distinctions when it comes to demographics, socioeconomics and the coal industry itself.
Vast wealth disparities exist between Wyoming and Appalachian coal country. For example, personal income in Campbell County grew by more than 717% from 1970 to 2018 compared to 47% in Boone County, West Virginia, according to federal data compiled by Headwaters Economics. By 2018, per capita income in Campbell County was $53,775 compared to $34,196 in Boone County.
Neither region is monolithic. Eight states make up the Appalachian coal region, each a multitude of cultural, political and economic identities. Wyoming too is made up of distinct cultures and economies, from the blue-collar oil and coal town of Gillette on the eastern high plains to the tony destination resort town of Jackson on the outskirts of Teton and Yellowstone national parks.
Together, Wyoming and Appalachia tell the story of United States coal communities in the midst of certain change with uncertain outcomes. Their successes and failures will help shape the future of rural life in the U.S.
Yet despite the industry’s outsized influence, neither region is destined to be permanently ruined by the loss of coal.
Wyoming, for one, is not destitute. The state has generally managed to retain much more wealth than its coal counterparts in the eastern U.S., mostly because mining is largely concentrated on federal coal holdings that have returned billions of dollars to Wyoming coffers. The state of just 578,000 people has built up more than $28 billion in savings and investments.
Although it may never make up for the scale of revenue and salaries lost in coal, Wyoming is only just beginning to tap into a growing outdoor recreation industry. More than half of Wyoming’s landscape is made up of public lands, home to abundant wildlife and opportunities to recreate and isolate in wide open vistas. Business leaders also hope to draw on the state’s robust industrial services sector and skilled labor force to attract more manufacturing and tech jobs.
Similarly, it would be limiting to describe Appalachia as just “coal country.” Of the 13 states included in the Appalachian Regional Commission’s definition of the region, only eight produce coal: West Virginia, Pennsylvania, Kentucky, Alabama, Virginia, Ohio, Mississippi and Tennessee, in order from most coal production in 2018 to least. The central Appalachian coal region has seen significant losses in coal production due to the expense of getting at coal seams, which tend to be deeper and thinner than in the Powder River Basin. Coal’s sharp post-2012 drop-off has deeply affected central Appalachia’s coal communities, which tend to be rural and highly dependent on coal and related industries such as the railroad and equipment manufacturing. A 2018 study of the coal industry for the Appalachian Regional Commission found major decreases in the prime working-age population in mining counties, while the poverty rate has increased.
Hope exists in Appalachia, though, with a burgeoning outdoor recreation industry spurring growth among restaurants and other tourism-related businesses. Some communities have used music, history and traditional crafts to attract visitors as well. Others are investing in broadband in hopes of drawing tech jobs and remote workers, or in retraining miners for the clean energy sector.
Chris Woolery, a staffer at Kentucky’s Mountain Association for Community Economic Development, a nonprofit looking for new ways to create jobs, said there’s no “silver bullet” for replacing coal. Instead, communities should try using a lot of “silver BBs” instead.
A dragline sits behind a row of coal cars at the Black Thunder mine near Wright, Wyoming in this photograph taken in October 2016. (photo by Andrew Graham / WyoFile)
New chaos threatens transition efforts
One of the most challenging aspects of coal’s demise is that coal communities have little to no control in how quickly it unfolds. Coal country’s officials and residents often say they imagined the end of coal remained far off in the future, and that as it wound down, mines would be safely reclaimed and sealed, offering communities time to prepare for the future.
But bankruptcy laws and feeble regulation enforcement to ensure full reclamation of mining’s impacts have erased the illusion of control over an orderly conclusion to coal’s role as the United States’ energy driver.
Waves of bankruptcy have riddled the industry as companies have used reorganization and liquidation to dump mines that produce little coal but carry millions of dollars worth of environmental and employee liabilities. The chaos generated by these bankruptcies effectively hangs miners and their communities out to dry, and potentially leaves taxpayers to foot the bill.
Take Blackjewel, whose bankruptcy attracted national attention when a group of laid-off miners who’d not been paid for their final weeks of work blocked a coal-laden train from leaving a mine near Cumberland, Kentucky. Blackjewel was part of a spate of bankruptcies in recent years by coal companies whose holdings consisted largely of mines they had obtained through previous bankruptcies by larger companies such as Alpha Natural Resources, Arch and Peabody.
Blackjewel’s bankruptcy led to a scramble for its remaining productive mines, particularly Eagle Butte and Belle Ayr mines — Alpha’s former “crown jewels” in the Powder River Basin. Potential bidders simultaneously attempted to avoid getting stuck with the company’s more unproductive mines in central Appalachia, which produce little coal but come with tens of millions of dollars each in reclamation work that remains to be done. Advocacy group Appalachian Voices estimated that more than 60 mining permits could wind up abandoned, leaving the clean-up job to the states.
Meanwhile, the Blackjewel bankruptcy drags on, with creditors ranging from vendors to state and local governments trying to get paid. Blackjewel’s lawyers have accused former CEO Jeff Hoops of looting the coal company through various family businesses.
None of this bodes well for coal or the communities that produce it.
“Blackjewel may be unfortunately the future of the coal industry,” said Clark Derry-Williams, an energy finance analyst at the Institute for Energy Economics and Financial Analysis. “Essentially, you had a company take over assets from other companies’ bankruptcies, mismanage them and turn them into an operational and financial mess as well. That’s what I fear is going to happen to more and more of the coal industry in the U.S.”
That was the state of the coal industry even before COVID-19 arrived. The virus has been slow to reach and spread through coal country, but the economic shutdown in response to the pandemic has triggered a recession and further slowed the industry. Meantime, regional watchdog groups say it’s critical to hold coal companies accountable to employee obligations and mine reclamation in order to soften the economic blow to mining communities.
“We have watched this play out in Appalachia to the detriment of that region’s waters, lands and workers, and we have tried to apply those lessons to our work here in Wyoming,” said Shannon Anderson, attorney for the Wyoming landowner advocacy group Powder River Basin Resource Council. “One thing Appalachia can learn from us is that as the industry declines, it is the very worst time to weaken standards, reduce bonding and reclamation obligations, and otherwise give companies a free pass.”
Coal trains pass under the conveyor belt for the Dry Fork Station power plant. (photo by Andrew Graham / WyoFile)
Transferable lessons, and paths forward
Although much of Appalachia shares a common history around coal, it’s a region where the industry exists in multiple stages simultaneously. Some Appalachian communities ceased mining in the 1950s and remember their coal heritage only in historical markers, while others are only just beginning to accept that coal will never be the economic driver it once was.
In that sense, Appalachia has been struggling with the transition from coal for more than 70 years. Its communities have already been forced to experiment with how to survive beyond a coal-dominated economy.
Those experiments range wildly: They include the outdoor adventure economy that’s taken root in Fayetteville, West Virginia, and tech research in Pittsburgh’s Innovation District. Dozens of small towns market their roots music heritage and folk art. In eastern Kentucky, U.S. Rep. Hal Rogers talks up “Silicon Holler,” while across the state line in Virginia, a newly launched public-private economic development project is targeting “future of work”-style jobs in energy innovation, advanced manufacturing and other fields.
These initiatives have met mixed success. One lesson to emerge is there’s no one-size-fits-all answer for coal communities. While the opportunities for transition hinge on a similar set of truths — a community’s ability to evolve depends upon good schools, healthcare services and amenities such as elder care and cultural resources — much depends on what a community actually wants, and whether it has the leadership to help build that vision.
Responding to the inevitable losses in coal jobs and revenue, Colorado established a “Just Transition” collaboration and a fund to help coal communities reorient toward more sustainable economies. A similar strategy was launched in New Mexico to divest from coal-fired power while providing financial aid to communities to prepare for the transition away from coal.
But there’s still no comparable effort underway in Wyoming, where the political response to coal’s calamity, so far, is to fight against the forces driving it. Last year, the Wyoming Legislature passed a bill requiring utilities planning to retire coal-fired units ahead of schedule to first offer them for sale to a third party. This year, the Legislature passed a bill requiring utilities in the state to install financially risky carbon capture systems to coal-fired units.
For Gillette and Campbell County in Wyoming, the most agreeable first steps to diversify lie in a long ambition to build an industry of coal-to-products research and manufacturing. Although it will never replace the scale of jobs and revenue that might be lost in mining, many locals still hold out hope that it will help slow the retirement rate of coal-fired plants among thermal coal’s customer base in the U.S., while creating new markets for exporting coal technology and coal-derived products.
State and local economic development officials envision their own version of Silicon Valley in northeast Wyoming, which they’ve coined “Carbon Valley.”
“Campbell County is an energy community,” said Phil Christopherson, CEO of Energy Capital Economic Development. “We want to continue to develop that, and include and expand renewables.”
In 2019, the Wyoming Legislature granted $5 million of a $10 million request from Gov. Mark Gordon for a pilot project using advanced technologies to capture at least 75% of carbon emissions from a coal-fired power plant of 5 megawatts or more built in Wyoming.
Others say the state should deliberately shift away from spending money on coal, and instead invest more in efforts to provide assistance to coal workers and their communities.
“We will be better off when our state leaders stop wasting time and money trying to prop up this failing industry and start using the limited resources that we have to plan for and support a controlled transition,” said Sierra Club Wyoming Chapter director Connie Wilbert.
Wilbert said she believes that frustration and resentment still guide state policy regarding the decline of coal — a massive economic and cultural force in Wyoming for many decades. But the state risks even more by not taking steps today toward a post-coal future.
“The Sierra Club, absolutely, we have played a powerful role in helping push this change along and helping reveal all of the hidden costs” of coal, Wilbert said. “At the same time, we also absolutely believe that we need to do everything in our power to find ways to help the people who are most impacted by this change find another way forward — actually help bring everyone, all of us, along together so we don’t have such extreme winners and losers.”
In eastern Kentucky, Carl Shoupe worked in the mines until he was injured, and then became an organizer and activist. In July 2019, on the second day of the Blackjewel train blockade, Shoupe stood in solidarity with the protesting miners. Even as Harlan County residents increasingly accepted the growing reality that coal is dying, Shoupe said the community itself will bear the burden of moving forward.
“As long as the coal companies were producing and making money and donating to these politicians to help elect them, everything was fine,” Shoupe said. “But now, see, there’s no money going to the politicians in the state — no revenues to amount to anything as far as coal severance tax. For the state, it’s a no-brainer they could give a pop what goes on here. And I honestly believe they’ll leave us here with the bag to hold.”
Without intervention, coal’s decline could leave Wyoming looking more like Appalachia, with lower per-capita income and higher poverty rates. And continuing depopulation could drop Appalachia from its current population density of between 40 and 60 people per square mile to something closer to Wyoming’s — 6 people per square mile.
Yet, there’s also room for optimism. The people of both regions are renowned for their independence, tenacity and ability to endure tough circumstances. Coal’s end does not also mean the end of the communities it once dominated.
The future of coal country remains unwritten. That story will be determined by those who live there now.
Original source: Energy News Network