Coal layoffs in Wyoming have potential to make lasting impact on rural communities
April 15, 2016
Peabody Energy and Arch Coal, the two largest coal mines in America, announced 15 percent of their workforces would be cut March 31. With 500 coal miners in Wyoming without work, many are calling the day "Black Thursday."
"The coal industry is facing a perfect storm of factors that has led to these layoffs," said Anne Alexander, University of Wyoming economist and associate vice president for Undergraduate Education. "Natural gas has been cheap for a few years, which has incentivized a lot of utility companies to switch from coal to natural gas. That, along with the implementation of the Clean Power Plan, has been a major regulatory headwind for coal that has had a big impact on the industry."
In a statement about the layoffs, Kemal Williamson, Peabody president for the Americas said, "While our asset position and contracting strategies give us relative strength, we are taking these actions to match production with customer demand. We regret the impact of these actions on our employees, their families and the surrounding communities in the Campbell and Converse County areas."
Logan Bonacorsi, Arch's president of western operations, made a similar public statement.
“With 500 people losing their income and struggling to pay their mortgages and buy groceries, I anticipate a lot of families leaving Wyoming to look for work. In a state this size, that will have a pretty significant impact.”
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"We regret the need for this difficult step and the impacts it will have on our employees, their families and the local community," he said in the statement. "We have made every effort to preserve as many positions as possible, and this decision was made only after a number of other cost-cutting measures were exhausted. We deeply value the hard work, professionalism and significant contributions of the employees who have been affected by this reduction in force. We want to thank the employees for their years of faithful and dedicated service to Black Thunder."
The U.S. Energy Information Administration reported U.S. coal production is down 30 percent to 157 million tons from last year. EIA also estimated a single Wyoming miner can mine 29 tons of coal per hour, compared to a West Virginia miner who can mine an average of 2.4 tons of coal per hour.
Despite the efficiency of coal miners in the area and the availability of low-sulfur coal in Wyoming, University of Wyoming economists had predicted a crash in the industry as a result of the Clean Power Plan. According to a UW study prediction, the coal industry could decrease anywhere from 31.9 to 63.1 percent by 2030. In Wyoming, where coal generated more than $5.9 billion in 2011, an industry bust may hurt more than the coal miners and their families who are now scrambling to find jobs and replace the lost income.
"Coal is great for tax revenue and labor, and if the state doesn't handle things well, it could send the economy in a downward spiral," Alexander said. "With 500 people losing their income and struggling to pay their mortgages and buy groceries, I anticipate a lot of families leaving Wyoming to look for work. In a state this size, that will have a pretty significant impact. It won't just affect coal miners, but also factories, railroads, and even local communities and small businesses."
Jeff Wendland is an engineer working on the railroad in Crawford, Nebraska. He, too, has seen the effect of the pinch in the coal industry.
"We were going gangbusters up until six months ago," said Wendland, who has worked on the line for 12 years. "The EPA laws are basically killing this industry. We have no government support on anything anymore, and if the tightened restrictions continue, I think the coal industry will eventually be a thing of the past."
Wendland said with the new environmental restrictions, area power plants have been shut down, so the railroads aren't hauling as much coal as they used to.
"The power plants are being throttled by EPA regulations, and they can't burn the coal anymore," he said. "We have trains being parked and more employees on the rail are being furloughed or have left to look for more secure jobs elsewhere. Right now, we have two empty trains parked on the main track that we aren't sure where to put."
The railroad dates back more than 100 years, and many rural communities depend on the jobs the industry creates to attract families and support area schools and businesses.
"These layoffs are going to impact more than the coal and railroads," Wendland said. "It's going to hit schools hard. The coal industry pumps millions of dollars into the school systems, especially in Wyoming. With 500 layoffs, that's 500 fewer incomes in the area to support small town shops, car dealerships and restaurants. Families are moving away, and it's been tough to see the stress that workers are dealing with thinking they might be the next in line to be laid off."
In an effort to assist families dealing with the stresses of being laid off, Wyoming Gov. Matt Mead has directed the Wyoming Department of Workforce Services, the Wyoming Department of Insurance, the Wyoming Community College Commission and the Wyoming Business Council to open temporary community resource centers in Casper, Gillette and Douglas for those affected by energy related layoffs. The temporary resource centers were open on April 1, 2 and 4 and provided help and information on unemployment insurance, job opportunities, job training, health insurance and counseling services. For folks still seeking assistance, they can contact the DWS workforce centers in Casper, Douglas and Gillette.
"It's going to take a lot of collaborative leadership to recover the loss of state revenue from these industry cutbacks," Alexander said. "I think people need to sit down together and start figuring out a way to help get folks back on their feet. If we only focus on the negative, we won't be able to fix anything. Ultimately, I think the state has a very strong entrepreneurial spirit, and we have a very supportive environment to help folks who want to stay here be able to do so."
"It's a tough time for people right now," Wendland said. "I'm hopeful that with the next election that things will change for the industry, but even if it does, it will still take time for change to be implemented and for things to bounce back. We have to remain optimistic though that things will turn around." ❖