Wake up, Wyoming! Coal country needs help, and help has not been forthcoming from industry or from our politicians.
A much bigger illness than COVID-19 faces our coal industry, but no vaccine can stop it. And no one seems to be seriously seeking a cure. Companies are struggling, production’s sharp decline has steepened, rail traffic is down, layoffs and furloughs abound. These symptoms began way before 2020. Believe what you will about climate change or a “war on coal,” the simple fact is coal is no longer cost competitive with renewable energy or natural gas. Coal will keep losing market share, more coal power plants will close, and those that are left will burn less coal.
Ask Peabody and Arch, the last giant coal companies still in the Powder River Basin. They pled lack of price competitiveness to argue at the Federal Trade Commission for a joint venture to operate their mines. They lost, and now Arch have announced their plans to shut down their Coal Creek Mine and scale back Black Thunder Mine, which a few short years ago produced roughly 10% of the nation’s coal. Now, they are planning to leave the Powder River Basin entirely. Lighthouse Resources’ bankruptcy caused the first complete and permanent closure of a major Powder River Basin coal mine (Decker) earlier this year.
Over 80% of Powder River Basin mines have been through bankruptcy proceedings in recent years. Mines still operating have new owners and reduced production. These new owners are all less well capitalized than were their bankrupt predecessors in better days.
Newcomer operators Eagle Specialty Materials/Prairie Eagle Mining and Navajo Transitional Energy Company, are both privately held companies with headquarters outside the state. Their employees and communities have little information about company finances, but do know these smaller outfits have less access to capital and provide scant assurances of the long-term future of mines, jobs and communities. Miners, local suppliers, and municipal governments are all understandably worried, having been burned so recently before. Many have seen neighbors lose health care benefits and even retirement savings, and wonder if they’re next.
Recent bankruptcies have also meant big losses of local and state taxes, as well as tens of millions of dollars in unpaid federal coal royalties, half of which would have come back to Wyoming. Campbell County was one of the wealthiest counties in our state, and a major contributor to statewide education funding. Their tax base has collapsed, and local governments are facing significant budget challenges.
And let’s not forget the yet-to-be-reclaimed lands and water that could be a foundation for future economic activity. Tens of thousands of acres of land still need to be restored to pre-mining condition and productive surface use — hopefully before the remaining companies walk away themselves. The Department of Environmental Quality need to require honest mine closure plans, ensuring the mines state realistic end of life dates and reclamation plans that will restore the land before the company leaves or goes bankrupt. The state should pressure companies to include worker transition planning, retraining, and retirement benefits.
Analyst Dan Cohn, in a Sightline Institute report “Planning for Coal Mine Closure in the Powder River Basin,” recently stated, “Every coal miner, and everyone in a coal community, deserves credible information about the outlook for the industry and for the major employers in the area. And they also deserve serious plans and resources to support people building a life after coal. The transition is coming faster than most people think.”
Wyoming’s legislature refuses to even discuss revising our tax structure. They repeatedly reject Medicaid expansion even as they see miners dispossessed of their employer health care plans and sometimes their pensions. The governor quixotically pursues lawsuits against other states to force them to buy coal-fired electricity or build coal export facilities. He cuts supplemental unemployment benefits. Together they concoct statutes to force Wyoming citizens to subsidize coal plants and pie-in-the-sky carbon capture processes by paying higher electricity rates.
Given all this, as I sit here today, I can’t help but think we need better leadership to represent the interests of the people of coal country. We need state and local government and business leaders who will put miners and communities first and recognize today’s reality. The energy transition is happening before our very eyes. It’s high time to find solutions to rebuild the revenue that coal used to bring, the jobs coal used to provide, and the communities that built today’s Wyoming.
Bob LeResche is a former Commissioner of Natural Resources of Alaska, energy executive and investment banker. He and his wife Carol own a ranch and heirloom vegetable farm near Clearmont, Wyoming. He is a board member of the Powder River Basin Resource Council and the Western Organization of Resource Councils.