The Clean Power Plan was once the storm on the horizon for Wyoming’s coal industry, threatening job loss, production decline and a catastrophic revenue drain both in coal communities and the state as a whole.
On Tuesday, the Environmental Protection Agency under President Donald Trump, proposed the plan’s replacement, the Affordable Clean Energy rule — a significant change in direction that removes broad mandates to cut emissions in favor of encouraging state-engineered emission reductions plans and plant-level efficiencies to extend the life of coal buyers in the power sector.
But the coal industry has moved on from the day when the Environmental Protection Agency’s plans sparked fear. The market has taken its own toll on coal, and has replaced the Clean Power Plan as the elephant in the room during discussions on the survival of Wyoming’s coal industry.
“What determines more the coal jobs are the market conditions,” said Gillette Mayor Louise Carter-King. “It’s market more than the regulations at this point.”
Experts note that the Affordable Clean Energy rule contains little in the way of good news for coal production or jobs. The move away from broad emissions reductions under the Clean Power Plan, to power plant-level efficiencies, will barely move the needle on current carbon dioxide emissions, tons of coal extracted or new power plant investment, according to the EPA’s own analysis. At best, it may offer a little time, at worst, Wyoming coal is in the same position today as it was last week.
Emissions would drop under the plan, but not by significant amounts: between .7 percent to 1.5 percent through 2030.
Notably, the country’s carbon dioxide emissions from the electricity sector have been falling in the years since the Clean Power Plan was in development.
The market did what the dreaded CPP proposed to do – reduce emissions by curbing the burning of coal. Wyoming’s 5,687 full-time miners produced about 315 million tons of coal in 2017, compared to 438 million tons in 2011 – the year Wyoming’s coal employment was at an 87-year high of 7,000.
When fracking unleashed natural gas development in plays across the U.S. it depressed the price of gas to such a point that utilities, including Wyoming’s largest utility, Rocky Mountain Power, focused investment on new natural gas fired power plants instead of coal. Wind and solar have also seen increased investment.
Meanwhile, coal plants closed. Most were older plants nearing retirement age or weren’t worth the cost of upgrades required under a separate Environmental Protection Agency rule on mercury and air toxins.
Natural gas, though responsible for methane emissions that are also a greenhouse gas, produces a fraction of the carbon dioxide that coal does when burned for electricity. So the transition to natural gas power has performed the work for the Clean Power Plan, and quickly.
An analysis attached to the Environmental Protection Agency’s Tuesday proposal laid bare the effect of coal’s decline, as well as the anticipated job impacts that remain today.
“If potentially dislocated workers are vulnerable, for example as those in Appalachia likely are, besides experiencing persistent job loss as already mentioned, earnings can be permanently lowered,” the EPA notes in its analysis, going on to explain the ripple effect of job degradation on the region. “Communitywide effects can include effects on the local tax base, the provision and quality of local public goods, and changes in demand for local goods and services.”
The analysis describes what happened to the Gillette area two years ago, when widespread layoffs in the coal industry – and a coinciding decline in the oil and gas industry – rocked the community. Those layoffs, and falling production, were closely tied to coal’s competition with cheap natural gas.
Carter-King, the Gillette mayor, said the coal industry in her region has stabilized since the downturn, and economic stability has been assisted by improvements in the oil fields.
And though challenges remain, hot summer weather has improved short-term production in the mines. Layoff news has been replaced with forced overtime and temporary hires.
The market is what Gillette is watching now, and that’s a relief compared to the uncertainty of years’ past.
“I think we are in a much better place as far as regulations go at this point than we were when they started telling us what the CPP would mean to us,” she said.
Still, the CPP’s replacement doesn’t alleviate the market realities.
The numbers for coal production in the Western region — most of which is Wyoming — are improved under the proposed Clean Power Plan replacement, but not by much.
Under the CPP, the estimate is 300 million short tons per year in 2025. Under the proposed replacement, with efficiencies at the power plant level, production could be about 325 million short tons by that time — comparable to no Clean Power Plan at all. Improvements are even less encouraging for Appalachia and the interior regions of the country, where the difference in tonnage is negligible between the Clean Power Plan and the replacement.
The difficulty for coal, more today than when the CPP was introduced, is that power plants continue to be a problem — they are the buyers of Wyoming coal. Though some hope that the tide of plant closures could slow, the reduced market today has already pushed the industry against the wall. Wyoming lost about 1,000 full-time miners.
Continued closures of plants that burn Wyoming coal would strain the industry’s short-held stability further.
The EPA’s projection of associated health risks under the Affordable Clean Energy rule is also dismal: up to 1,400 premature deaths annually related to fine particulate matter in the air, compared to up to 1,600 if the Clean Power Plan was scrapped without a replacement.
New leadership for Wyoming coal
While the Affordable Clean Energy rule was being bandied about by experts and analysts Tuesday, the population of the nation’s largest coal producing state was distracted by choosing its replacement for governor.
Wyoming’s focus since the introduction of the Clean Power plan — aside from fighting the plan in court — has been to look at other uses for coal and to invest in carbon capture — which does not reduce the carbon dioxide emission from coal-burning plants, but harnesses the gas for other products. Both of these aims were fueled by the governorship of Matt Mead.
Mead noted his historic aversion to the Clean Power Plan in a statement Tuesday, but stopped short of endorsing the replacement.
“The (original) rule is flawed in many ways and I am glad that it is being worked on,” he said. “I look forward to a thoughtful approach to improvement.”
The governor is finishing his final term. By mid-winter, Wyoming will have a new governor who is likely to continue Mead’s legacy.
Both Republican pick Mark Gordon and Democratic nominee Mary Throne have campaigned as supporters of the coal industry, with promises to continue investing in carbon capture. Gordon in particular has focused on the long-term challenge of moving Wyoming coal to other markets, such as Asia.
Those aims, which include the largest coal research bay in the country — built under Mead — and a host of smaller businesses with aims to expand carbon research, have buoyed the outlook of some in the coal region surrounding Gillette, despite continued market pressure.
“We are still producing coal for energy, but there is this other research side that is exciting for other uses of coal,” said Carter-King, the Gillette mayor. “Long term, it is what we need. What other uses can we have from this abundant supply that we have?”
The coal industry also weighed in on the new Clean Power Plan. For producers, the replacement plan shouldn’t just drop its predecessor’s mandates, it should encourage some path forward for the struggling industry.
“As the process moves forward, the replacement rule must be legally sound and recognize the role that coal plays in providing reliable and affordable electricity,” said Travis Deti, executive director of the Wyoming Mining Association. “It must also recognize and promote investments in technology and environmental upgrades of power plants.”
Coal firms like Peabody Energy and Gillette-based Cloud Peak Energy also offered their take on what happens next.
Peabody noted its interest in one aspect of the new proposal, which makes room for “technology investments including the reasonable upgrade of power plants.”
Cloud Peak’s spokesman Rick Curtsinger had both praise for scrapping the Clean Power Plan and requests for additional support for coal. It’s a stance that echoes CEO Colin Marshall’s letter last year to the Trump administration for policies that would withstand potential political upheavals in the years to come.
“Now, Congress should follow this administration’s lead and develop cohesive energy legislation that gives long-term certainty to utilities to make the 20- and 30-year investments necessary for lasting affordable and reliable electricity,” Curtsinger said in a statement Tuesday.
For some time, the Clean Power Plan has been an uncertainty for Wyoming. It was being fought vociferously in the courts and lambasted by Wyoming’s coal producers. Now, the game has changed for coal.
The replacement unveiled Tuesday offers a new direction, but no solution to coal’s ills, according to the Environmental Protection Agency’s numbers. But, Wyoming isn’t necessarily looking for a savior in this regulation, but a savior from the previous one.
“Anything that is relaxing some of the rules of the original CPP is good news for us,” said Carter-King. “Anything that they give back, to have the state determine what the regulations could be, is always good.”