Wyoming coal companies have a new focus on discipline after the sector moves further away from the economic bust that swept away 1,000 jobs in the Powder River Basin.
Three major coal companies went into bankruptcy in the last two years. They were plagued by bad bets on the Asian coal market, an overstock of coal that drove down demand and natural gas prices that fell low enough to compete with traditionally cheap coal.
But though the industry has found its feet again at the midway point of 2017, it’s also contracted. Some jobs have come back — about 330 this year — but a culture of operating tightly means employment numbers won’t likely creep much higher, some say.
“We are starting to see production come back up, but we are not seeing those jobs show up yet with that,” said Jim Robinson, principal economist with the state’s Economic Analysis Division. “[Companies] are hesitant to add workers. They are concerned about uncertainty for coal. They’ve had to cut; they are trying to be more efficient with what they produce.”
Wyoming mines lost nearly 1,000 workers between 2015 and 2016, according to the Wyoming Department of Workforce Services annual coal report.
Those numbers have improved modestly, drawing back some of the miners who lost their jobs to the season of layoffs, said Travis Deti, executive director of the Wyoming Mining Association.
“We brought back about a third of those jobs that we lost,” he said. “And there are still some companies out there looking to hire right now.”
But Deti does not expect employment numbers to continue to rise.
Companies are stronger post-bankruptcy. They shed debt and reorganized. The glut of coal that precipitated the downturn has been drawn down. But there is a trade off in terms of jobs. The size of the labor force now is likely to stay as is, he said.
“It’s a pretty good snapshot of where we are going to be going forward,” Deti said. “The industry has tightened its belt, it’s downsized. They are doing a lot more with less; they’re becoming more efficient and watching their pennies.”
It’s unclear how many of the coal mining jobs that have returned are part time or temporary positions, he said.
The employment side of the industry is still leveling out, he said.
“This stuff doesn’t happen overnight. Maybe when we get into the [end of the year] you are going to have more certainty on some of those jobs,” Deti said.
There are reasons to be cautiously optimistic in the Powder River basin coal in the near term.
Though production last year was down nearly 100 million tons from 2014, annual coal production in the Powder River Basin could rise to around 400 million tons by 2030 if natural gas prices don’t fall and restrictions on carbon dioxide emissions, like the Obama-era Clean Power Plan are not implemented, according to the Energy Information Administration. Still the forecasts are complicated by uncertainties, from potential regulations and the lack of new coal-fired power plants, to an increase in renewable power generation from wind and solar. The long term outlook for coal shows declines.
Given the lessons learned in the recent bust, if Wyoming coal production does rise in the next few years, the potential uptick may not translate to significant job growth.
“There are some hopeful projections on the horizon. If it starts looking like that’s going to be the reality … you’ll probably see a little ramp up in employment,” said Deti, of the mining association. “But I really think right about now, give or take 100 jobs … are where you are going to be.”
The story is similar across Wyoming’s key fossil fuel industries. The sectors have changed over the last two years, said Robinson, of the economic analysis division. Oil and gas firms are dealing with lower prices and coal with lower demand.
“Going forward, we really don’t know what is going to happen. We know that these companies are trying to be really efficient,” Robinson said. “How does a coal company remain viable now with this new environment?”
The companies’ answer appears to be discipline, and that includes in the payroll department.
“In order to compete in this environment now, you have to be lean and you have to be efficient,” said Deti. “I think that is the state of the Wyoming industry today.”