How The American Coal Industry Found Itself In An Economic No Man’s Land

CREDIT: AP Photo/Steven Senne

American coal country is in a contradictory position. Increases in productivity cut the industry’s employment by tens of thousands over the last few decades, the natural gas boom that’s eaten away at coal’s share of the power sector may be about to bust, but it’s not clear coal can expand to take advantage of the opening.

So at a Congressional hearing last week — looking into the impact on coal-dependent communities of new regulations for power plants — the anger was palpable, if also confused.

Earlier this year, the Environmental Protection Agency (EPA) announced limits on carbon dioxide emissions from new power plants. Limits for already operating power plants will be released in 2014. Given the strictness of the rules, and the fact that coal is by far the power sector’s most carbon-intensive fossil fuel, critics have called the regulations an effective ban on new coal plants.

Many of the witnesses and Congress members at Tuesday’s hearing were ready to lay responsibility for the coal industry’s woes at the feet of the EPA’s new rules — sometimes openly agreeing that President Obama is waging a “war on coal.” Albey Brock — a judge from Bell County, Kentucky — estimated in his testimony that job losses in Eastern Kentucky’s coal mining industry over the last two years sucked $1 billion out of the regional economy. That in turn means lost revenue for state and local programs that help the quarter of the region’s population that lives in poverty.

The problem is neither Brock nor anyone else made any effort to tease out how much of the job loss can be attributed either to past EPA regulations, or to anticipation of the incoming carbon emission rules. Coal jobs in Western Kentucky are on the upswing, as are coal jobs nationally. In 1990, when the acid rain program in the Clean Air Act imposed new regulations on the coal industry, an EPA study found the program could only be blamed for 5 percent of the job losses. Most of coal’s massive employment collapse since 1980 could be chalked up to technological advancement and increased productivity, which naturally allow an industry to achieve the same amount for less labor.

Cheap natural gas from the fracking boom has also flooded into the power market over the last few years, rendering the construction of new coal plants economically unattractive — new EPA regulations or no. As John Fetterman, the mayor of Braddock, Pennsylvania pointed out — quoting a story in the New York Times — when Pittsburgh-based Consol sold off five coal mines, it was also planning to increase its natural gas production by 30 percent over the next 3 years.

Now, it’s not clear the natural gas boom can continue, according to several scientific presentations at the Geological Society of America meeting in Denver this past Monday. Because of how technologically intensive hydraulic fracturing is, the energy return on investment — how much energy the process produces versus how much it requires — may not be economically sustainable.

But it’s also not clear that, if the boom recedes, coal production can move back into the breach. Despite an Energy Information Administration determination that 200 years of coal reserves exist in the United States, a report by Clean Energy Action (CEA) suggests less than 20 percent of that is economically viable. And the problem doesn’t arise from natural gas or EPA regulations, but from blunt geology. “Most of the coal in the U.S. is buried too deeply to be accessed easily,” according to Dr. Zane Selvans, a geologist and assistant director of research at CEA. “We are rapidly approaching the end of accessible US coal deposits that can be mined profitably.” In fact, the top 16 coal states may have already hit peak production in 2008.

Coal also has other disadvantages. Dan Weiss of the Center for American Progress pointed out at the hearing that coal-fired power results in 397 percent more nitrogen oxides and 260,000 percent more sulfur dioxides — contributors to smog and acid rain — than natural gas power. It produces 39,000 percent more particulate matter pollution. Studies have found that 94 percent of coal pollution’s economic damage comes in the form of health effects, and 13,000 premature deaths annually have been attributed to soot from coal power. In fact, the health benefits of regulations on these sorts of pollutants are so enormous they regularly dwarf the compliance costs imposed on businesses.

Finally, coal generates 78 percent more carbon dioxide, and the blunt fact is the United States’ greenhouse gas emissions will need to start dropping like a rock by the end of the decade if the worst effects of climate change are to be avoided.

The human impact of job losses in throughout Kentucky, Pennsylvania, and other coal states are certainly real. “What new jobs?” responded Raymond Ventrone, the Manager for the International Brotherhood of Boilermakers Local Lodge 154, when he was asked about moving those workers out of coal power and into other industries. “These guys have been boilermakers all their lives.”

But according to Ventrone’s own testimony, the skills involved in boilermaking are actually quite wide-reaching. Writing recently in The Hill, Carl Shoupe, a coal worker from Kentucky, made the same point about miners: “We like to say that if you give a coal miner a coat hanger and some electrical tape, he can fix anything.”

Weiss laid out how a 2010 report from the Pennsylvania Department of Labor and Industry found the state’s energy efficiency sector was providing 65,000 jobs, renewable energy was providing 41,000 jobs, and environmental clean-up was providing 11,600 jobs, among many other clean-energy-related sectors. That’s in comparison to 8,665 Pennsylvanians employed by coal in 2011. Weiss also pointed to the 1990 Clean Air Act as a model: from 1992 to 1996, the program invested $83 million in job training and in readjustment aid to 6,366 workers who lost their livelihood when their employer moved to comply with the legislation.

In a way, Fetterman — the small town blue collar mayor — could stand as a representative of the impasse faced by his community and others like it. As the parents of two children under five, and a third on the way, Fetterman said he and his wife “are grateful the last functioning steel mill in the entire region is in our community. Grateful for the jobs it provides. Grateful for the tax revenue it provides. Grateful for the sense of pride it instills.”

“However,” he continued, “as parents, we are also grateful for the appropriate environmental controls, safeguards and protections the EPA and other governmental regulations provide.”

“My family and I are the living embodiment of healthy coexistence of regulation and industry.”