Coal country is not without options. But coal’s long legacy of hope, promises and failure has instilled a political inertia that won’t soon be overcome.

The 28-year-old man clearly had opinions on the future of coal, but wouldn’t share them until out of earshot of a group of unemployed miners at a gas station in southern West Virginia.

“Economically, these coal fields are dying,” he said, adding that he personally was done with coal. He’d finished three years of college before going into the mines, and was considering going back to become a teacher.

That conversation took place in 1956. It was recounted by Howard B. Lee in his book, “Bloodletting in Appalachia,” a history of West Virginia’s mine wars. 

Central Appalachia has wrestled with decline ever since. It’s hard to see the end of coal when it’s been dying for 70 years. 

The industry appeared to have a longer life ahead in Wyoming’s Powder River Basin, but the last decade has demonstrated otherwise. Yet despite a steady flow of data and warnings from experts, obscurity still exists, delaying a sense of urgency to prepare for drastic changes.

“Transition in Coal Country” is a collaboration of the Energy News Network and WyoFile, made possible by a grant from the Just Transition Fund. The series, reported by Mason Adams and Dustin Bleizeffer, examines how the declining coal industry presents immediate and long-term changes for coal communities in Wyoming and Appalachia, how those communities are coping with change, and what they might learn from each other in charting a path to a sustainable future beyond coal.

Read the rest of the series:
Part one: What’s next for coal country?
Part two: Coal country faces a healthcare crisis
Part three: Coal communities increasingly rely on federal health programs
Part four: How lax fiscal policy has left states flat-footed as mining declines
Part five: Coal country envisions paths forward in manufacturing, reclamation and renewables

In Wyoming, every bust has been followed by another boom in one fossil fuel or the other. Politicians promised voters that coal would drive wealth in Wyoming for generations to come. Now coal’s demise is met with consternation and confusion. Even as it downsizes, the Powder River Basin will remain the cheapest-to-mine thermal coal region in the U.S. with the potential to pick up new supply contracts as higher-cost thermal coal mines close elsewhere. Wyoming is expected to be the last U.S. thermal coal supplier standing in a permanently shrinking industry. 

“Seems like everybody is going on with their life,” said Mike Wandler, president of Gillette-based L&H Industrial, an international manufacturer that also serves the coal, oil and natural gas industries. “There’s still trucks flying off the lots, people are buying things, there’s not a big fire sale. I guess I would say I’ve seen it a lot worse than this. I’ve seen it where you couldn’t rent a U-Haul because everybody was loading them up and heading out. And that’s not happening right now.”

Both regions stand at a crossroads, faced with the decision to lay the groundwork for a post-coal economy or continue to lean into the fossil fuel-powered economic engine that propelled them for decades. 

As conventional wisdom goes, hope is not a strategy. The coal industry is still contracting in both regions despite the fact that coal’s political allies hold power on local and federal levels. 

In West Virginia, resort and coal baron Gov. Jim Justice and state lawmakers cut the thermal coal severance tax. And still.

“None of the promises that coal was coming back happened,” said Sean O’Leary, a senior policy analyst with the West Virginia Center on Budget and Policy. “There’s no turnaround. This is a structural decline.”

No off-ramps 

Appalachia produced the bulk of the nation’s coal before it began to fall off in the 1970s; it was surpassed by the Powder River Basin around the turn of the millennium. Along the way, central Appalachia faced a series of moments when it seemed it might diverge from its reliance on coal. 

The passage of the Surface Mining Control and Reclamation Act of 1977 marked a potential reset point — when the cost of cleaning up abandoned mines would be covered, and new regulations would ensure the reclamation of surface mines in the future. In retrospect, the law essentially normalized the more environmentally intensive techniques of mountaintop removal mining and handed the responsibility of enforcement to state regulators, who just as often worked to help the industry as watchdog it.

In 2013, U.S. Rep. Hal Rogers, a Republican and longtime friend of coal, endorsed an initiative to develop a new economy in eastern Kentucky just a year after he had blasted then-President Barack Obama’s so-called “war on coal.” Eastern Kentucky’s prospects have only grown bleaker as coal has continued to wane.

The 2019 miners’ blockade of a train carrying $1.4 million in coal for bankrupt operator Blackjewel seemed to mark yet another moment of cultural shift. Some of the miners went back to work for other coal companies, and one operator that received assets in Blackjewel’s bankruptcy has now filed for bankruptcy itself.

In Wyoming, Blackjewel’s sudden bankruptcy resulted in a months-long pause in the operation of Eagle Butte and Belle Ayr mines, which threw miners’ lives into chaos, but ultimately resulted in no permanent closure of major mining operations in Wyoming.

That lack of a clear rupture in Wyoming coal might contribute to the ongoing political inertia to plan for coal’s structural decline.

University of Wyoming economist Jason Shogren said that with every challenge to coal, Wyoming chose to increase its wager on the industry’s future.

“We knew this was coming 25-30 years ago,” Shogren said. “We knew that there was going to be a push on reducing fossil fuels for climate change with the Kyoto Protocol back in 1997, and people in the state just decided to run with it. They decided to play defense, and now that day is here.”

Wyoming Gov. Mark Gordon’s policy director, Renny MacKay, told WyoFile in a 2019 interview that the state is focused on the need for economic diversification, and it is prepared to help communities struggling with the downturn in coal. However, MacKay said, the governor makes an important distinction when it comes to discussions about communities facing the challenge of an energy transition. “We don’t really call it transition,” MacKay said, “because the communities aren’t looking to transition in Wyoming.”

Wyoming isn’t participating in policymaking that embraces a purposeful shift away from coal, MacKay said. It’s fighting against those forces.

In the Interior West, Wyoming is the only state with no renewable portfolio standard or goals for reducing carbon emissions other than Idaho, which already gets most of its electricity from hydropower. In January, Wyoming joined Montana in jointly petitioning the U.S. Supreme Court to overturn Washington state’s regulatory roadblock to a proposed coal port expansion on the Columbia River — key to shipping more Powder River Basin coal to Asian markets. Gordon said he’ll continue pitching Wyoming coal to potential Asian buyers, supported by $1 million in Wyoming taxpayer dollars. 

Gordon signed into law a mandate forcing utilities to seek a third-party buyer for coal units in the state that they want to retire ahead of schedule. The state launched an investigation to challenge Rocky Mountain Power’s economic and market analysis used to justify its plans to speed up the retirement of coal-fired power plants.

Perhaps the biggest factor when it comes to efforts to transition, for both Wyoming and Appalachia, is whether voters will continue to endorse efforts to save coal or help coal-dependent communities move beyond it.

Transition tools

Wyoming has several resources at hand to help itself in the decline of coal. More immediate mitigating tools include decommissioning and jobs programs among utilities that plan to retire coal-fired power units in the state, as well as coal mine reclamation — a potential $2 billion endeavor in the Powder River Basin. Wyoming also has more than $20 billion in savings and investments — some of which could be used to more directly help coal communities. 

“If we’re thinking about hard times and any kind of insurance package to help smooth out the income stream over half a century, a lot of attention should be paid to the sovereign wealth fund,” Shogren said. “If people in Wyoming were more aware of what they actually have in [state savings and investments], we might be more aggressive in how we choose to invest those resources.” 

A recent analysis suggests the state can give itself more leeway in how it invests its sovereign wealth. “Everyone agrees that the downturn in the minerals industry is bad news for Wyoming,” author Ben Gose wrote in a series published by WyoFile. “But Wyoming’s weak investment returns also represent a significant — and rarely discussed — reason the state is going to have to cut spending or raise taxes.”

States actively seeking coal transition strategies, such as Colorado, are looking toward securitization. It’s a refinancing tool that can help reduce the ratepayer impact of retiring coal units early. Portions of savings from securitization go toward renewable energy and community development projects, which can in turn attract additional funds from the federal government.

Grassroots nonprofit groups such as the Powder River Basin Resource Council (which hosted a series of four webinars this summer focusing on communities in transition), Appalachian Voices and others have generated a font of ideas for assisting communities in transition from coal.

In late June, a range of local, tribal and labor leaders from coal communities across America endorsed the National Economic Transition (NET) Platform, developed through a process led by the Just Transition Fund. (The Just Transition Fund also provided a grant to fund this series.) The platform outlines principles and processes, but largely leaves specific details to be developed by local communities.

Coalfield communities “literally fueled the growth of the nation,” said Peter Hille, president of the community economic development nonprofit Mountain Association in eastern Kentucky. “There is a debt to be paid. Justice demands we bring new investment to these places: to build a new economy, to revitalize communities and to educate people of all ages to be ready.”

Congress continues to consider its role in sustaining coal country, too. In July, U.S. Sen. Tammy Duckworth of Illinois introduced “the Marshall Plan for Coal Country Act” to establish a plan to stabilize local economies after a mine closure, fund environmental restoration and provide healthcare and higher education for coal workers.

Another, more regional plan titled “Reimagine Appalachia,” developed by Policy Matters Ohio, West Virginia Center on Budget and Policy, Keystone Research Center and Kentucky Center for Economic Policy, proposes public investments to expand opportunity, investing in climate-friendly infrastructure and businesses, and promoting workers rights to rebuild the middle class.

None of these packages come cheap. The geographic scope and sheer depth of the crisis facing coal communities requires a heavy investment that only the federal government is capable of making. Congress has previously intervened for coal miners and their families. In December 2019, lawmakers shifted money from an abandoned mine land fund to prop up the United Mine Workers of America’s 1974 retirement plan, which had been squeezed over decades and thrown into uncertainty by the recent bankruptcy of Murray Energy.

Securing support for an expensive, large-scale transition in coal country will be challenging, especially amid the coronavirus pandemic. On one hand, lawmakers — especially conservative Republicans who represent coal communities on Capitol Hill — may be wary of voting for such a large expenditure after spending trillions on economic stimulus bills. On the other, the transformative effect of the pandemic during a presidential election year may provide a rare opportunity to build political consensus behind a transition package.

“I feel like there’s a lot of energy behind systems change right now,” said Mary Cromer, deputy director of the Appalachian Citizens Law Center. “There are a lot more discussions about just transition now than there were before. Some of that is because just transition is part and parcel to the rethinking of the way we’ve ordered our society that’s going on right now. I am hopeful about that.”

Survival is anything but certain for coal country is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Communities contemplate how to survive a post-extraction economy.

NEW RIVER GORGE — The blue rubber rafts shriek as they slide down steep metal rails, each guided by a crew that will soon be floating down a 9-mile stretch of river, replete with Class III, IV and V rapids and the ghosts of now-shuttered coal mines and processing plants.

Raft after raft descends the skids from a parking lot for commercial outfitters before arriving at the put-in, where guides instruct their crews of clients. The churn of activity is a little lower than what it might typically be on a hot day in late July, but it’s still surprisingly busy for a Monday morning in the midst of the novel coronavirus pandemic. 

The steady flow of boats into West Virginia’s New River also exemplifies the progress that the outdoor adventure industry has made toward diversifying the regional economy around the river. 

“Transition in Coal Country” is a collaboration of the Energy News Network and WyoFile, made possible by a grant from the Just Transition Fund. The series, reported by Mason Adams and Dustin Bleizeffer, examines how the declining coal industry presents immediate and long-term changes for coal communities in Wyoming and Appalachia, how those communities are coping with change, and what they might learn from each other in charting a path to a sustainable future beyond coal.

Read the rest of the series:
Part one: What’s next for coal country?
Part two: Coal country faces a healthcare crisis
Part three: Coal communities increasingly rely on federal health programs
Part four: How lax fiscal policy has left states flat-footed as mining declines
Part five: Coal country envisions paths forward in manufacturing, reclamation and renewables

Signs of the industry’s past in the New River Gorge can still be seen at Kay Moor, where remnants of a coal tipple, coking furnaces and an iron frame reading “Your family wants you to work safely” can still be seen in the forest above the river. 

Fayette County produced 3.2 million tons of coal in 2019, about 3% of West Virginia’s total, but today the county is known less for coal than its plunge into outdoor adventure, beginning with the rafting industry that emerged in the ‘60s and ‘70s as coal was winding down. Outfitters and adventurists were attracted by access to the gorge and surpluses of cheap housing and storefronts in the wake of coal’s post-World War II decline. 

The New River Gorge became a magnet for rafters, climbers, hikers and mountain bikers, to the point that West Virginia historian John Alexander Williams included it as an example of a possible economic path forward in his comprehensive 2002 history of Appalachia, citing “the growth of whitewater rafting and other recreational activities that have changed the New River Gorge from a transportation barrier into a tourist attraction.”

Tourism creates seasonal jobs and economic activity, not just among outfitters and guide services but in restaurant, lodging and other service businesses. 

But “that in and of itself isn’t enough to create resilience in the community,” said Kelly Jo Drey, a part-time raft guide and former Fayette County employee who worked on turning recreation into economic development. “The thing that outdoor recreation provides for the community that’s more far-reaching in its impact is the ability of those amenities to bring people here and keep people here for other reasons.”

As the COVID-19 pandemic pushes more people to work remotely, communities like Fayetteville hope to attract new residents who can do their jobs while living in a beautiful region in close proximity to recreation opportunities. In doing so, the town is competing against numerous other coal communities trying to emulate its relative success by using outdoor recreation as one strategy to diversify their economies. 

Dozens of communities in the Appalachian coal economy have been plotting a course beyond coal for decades, relying on local culture, outdoor recreation, tech jobs and a skilled labor force to expand their economies. 

In Wyoming, where coal’s downturn has been more recent and abrupt, initial responses to expand and diversify have played to “readily acceptable” jobs and businesses that match the state’s culture and labor force, including coal technology research and recruiting gun manufacturers. 

In a move driven by state-level policies, gun manufacturer Weatherby moved from California to the mining town of Sheridan, a community at the foothills of the Bighorn Mountains expanding its reputation as a gateway to Yellowstone and the West. Other firearms manufacturers have also found a warm reception in Wyoming: Magpul and Stag Arms both relocated operations to Cheyenne — citing a like-minded gun culture and policies.

Tourism and outdoor recreation play a prominent role in Wyoming’s economy— No. 2 to mineral extraction in terms of revenue to the state while dwarfing minerals in terms of jobs. More than half of the state is public lands, including six national parks, eight national forests and 13 state parks. Its population density is six people per square mile, second-lowest behind Alaska. The COVID-19 pandemic has made these factors a draw to Wyoming beyond tourism and outdoor recreation, according to economic development officials.

“I really do believe the work that people do remotely [during the pandemic] will accelerate plans for people to do more remote work,” said Wyoming Business Council Executive Director Josh Dorrell, adding that the council is actively working to recruit more tech and information-based businesses to work remotely in the state. 

But the Powder River Basin’s wind-swept grasslands are a long way from Yellowstone and the Tetons, both figuratively and literally. And despite these efforts, there’s no interchangeable roadmap to the essential challenge of rebuilding rural economies once dominated by coal. 

The damage done by decades of reliance on the coal industry — unreclaimed mineland, depressed local revenues, depopulation and environmental degradation — makes it difficult to attract new economic development in Appalachian regions, especially to places that aren’t located along major transportation corridors. Yet for many, moving isn’t a viable option.

“People care about their place,” said Tom Hansell, a documentary filmmaker, author and artist who teaches at Appalachian State University and made the film and book “After Coal.”  “In some cases, people don’t have a lot of options to move — their educational background or financial freedom didn’t allow them to move and find employment. But there’s also an intense connection to place and culture that’s tied into identity. That’s what kept people in those places and provided a foundation — not a financial but a community foundation — to survive.”

Playing to one’s strengths

Keith Kinsinger spied through the observation glass of a whirring Deckel Maho DMU 200 FD — a five-axis automated machining “robot” and one of the most sophisticated pieces of equipment at L&H Industrial’s expansive welding, machining and manufacturing campus in Gillette. He was using the Deckel Maho to cut metal teeth on a large industrial gear.

“I’ve had my eye on this machine ever since I started here,” Kinsinger, 21, said. “If you can dream it, this machine can do it.”

Kinsinger worked a stint in the oilfields after high school but worried about job security. A friend recommended machining courses. 

“I thought that was a good career choice and I started going to college,” he said. He enrolled at Gillette Community College, then finished up at Northern Wyoming Community College in nearby Sheridan. L&H regularly recruits students from local trades programs to find talent like Kinsinger.

The Gillette native said he feels secure in his job, even considering the energy downturn. 

“We’re still keeping a steady 40 hours a week,” Kinsinger said. “I think it’s a good career. Hasn’t let me down yet.” 

The declining Powder River Basin coal industry — once a lifeline for L&H — no longer threatens the company’s viability or ability to keep growing in the heart of Wyoming coal country.

“Even if there wasn’t anything to do here in Wyoming, I believe that the 200 [L&H employees] that are here would stay here working and getting paid the same, and everything would just be shipped to somewhere else in the world,” L&H Industrial president Mike Wandler said.

If the key to diversifying against the cyclical boom-and-bust nature of an extraction economy — or even the loss of a major economic driver — is to play to one’s strengths, then L&H is a prime example in Wyoming.

Seven years ago, coal mining clients made up 30% of L&H’s revenue. Now it’s 10%. Yet the company’s financial position is stronger than ever, mostly because 60% of its customers are outside Wyoming and across the world. L&H started out in 1964 as a small, family-owned welding shop serving the oil and gas industry in northeast Wyoming. It expanded to serve the region’s coal mines as a way to sustain itself during oil and gas downturns. But even that level of diversification doesn’t ensure sustained success, Wandler said. 

It became obvious that L&H’s innovations to save money for coal mines in Wyoming could be exported to mines across the world, Wandler said. The next step was to build on its expertise in advanced manufacturing.

“In Gillette, Wyoming, you can create a heavy industrial business that sells mostly out of Wyoming and out of the country, and that’s where you get your diversity,” Wandler said. “They don’t need to completely reinvent themselves, but you have to be selling into the world economy and you have to be figuring out how you can be relevant in the world.”

Wandler sees untapped potential for manufacturing in Wyoming. He served on the Wyoming Business Council board of directors, and also played key roles in former Gov. Matt Mead’s ENDOW and ENGAGE efforts to drive economic diversification in Wyoming. Many coal, oil and gas service companies can branch into manufacturing, including aerospace and defense contracts, Wandler said.

Local leaders in Sheridan County, which also serves the Powder River Basin coal industry, redoubled efforts to diversify after the coal-bed methane gas industry went bust in 2010. Since then, Sheridan County has expanded jobs in tech and manufacturing, including Kennon Products, which manufactures sun shields and other products for government and private aviation. Other local service companies have expanded beyond oil, natural gas and coal to tailor to wind energy customers; wind developers are poised to invest some $10 billion in Wyoming.

Adventures in reinventing mineland

In parts of Appalachia, coal has been joined, though not replaced, by a burgeoning industry that seeks funding for schemes to repurpose land on and around former mines into new economic endeavors. These ideas range wildly, but often involve outdoor recreation, heritage tourism, agriculture or renewable energy.

Often, these proposals seek nonprofit grants or federal funding from the more than $300 million that Congress has appropriated for the Abandoned Mine Lands Fund that was established through the Surface Mining Control and Reclamation Action of 1977. The nonprofit advocacy group Appalachian Voices produced reports in 2016 and 2018 in collaboration with a number of other organizations that promoted redevelopment of dozens of sites throughout central Appalachia, including several that eventually won Abandoned Mine Lands funding. 

The federal funding has also been used to support the development of federal and state prisons, which have become major employers in several coal communities. Not all of those prison projects have found success. 

Other projects aiming to reinvent former mineland have fallen as well. 

In 2016, a plan to farm lavender at a reclaimed strip mine in Boone County, West Virginia, won grants from the Benedum Foundation and the Appalachian Regional Commission, then abruptly collapsed when the grants ran out. Similarly, the nonprofit Mined Mines promised to train and place people in coding jobs, but failed to follow through on its promises, leading to accusations of fraud.

What’s working

Appalachia has seen successes, often small and built over time. Fayetteville, West Virginia, has the advantage of its location near the New River Gorge National River, a unit of the National Park Service, while other communities market attractions in national forests and state parks. Both Kentucky and Virginia have built networks of off-road trails modeled after West Virginia’s Hatfield-McCoy Trails, which wind more than 700 miles across 14 counties in the state’s southern coalfields.

Many communities are building hospitality industries around outdoor adventure in hopes of attracting not just visitors, but talented workers and companies that want to hire them. Making that happen requires infrastructure — and not just basics like good water and reliable electricity, but broadband internet, healthcare access and higher education to train an ever-evolving workforce. In places struggling to maintain basic government services, that’s a tall order.

Even the effort to find solutions has proven beneficial.

“One of the things that really gives me hope is that people are more willing than ever to come together right now — despite what their politics are, despite what they believe in — and think about how they rebuild a thriving community that considers all of the people who live there, all of the people who may visit there, and all of the aspects that are unique to that particular place,” said Ivy Brashear, Appalachian transition director for the Mountain Association. “Previous to the past decade or so, we hadn’t seen that in a way that’s been able to catch fire and spread across the region. It’s really powerful.”

Those conversations have created a new energy among groups like the Letcher County Culture Hub and What’s Next EKY?!, which seek to empower locals to advance their own ideas. Combined with the ability to connect on social media, people are finding mutual support that is slowly changing the internal narrative about coal country.

“What we’re seeing with these groups is that young people are understanding they can live the kind of life they want to live while staying in place,” Brashear said. “A lot of young people are staying in the region and investing in their own communities.” 

Can coal technology and renewable energy help fill in the gaps?

Wyoming taxpayers have invested tens of millions of dollars over the past 15 years to help advance technologies to reduce coal’s greenhouse gas emissions — a significant driver of climate change.

The potential for advancements in capturing carbon from coal is frequently mischaracterized and misunderstood as a panacea for Wyoming’s coal industry. It is not. If the goal is to save or extend the life of the Powder River Basin coal mining industry, the window of opportunity is quickly slamming shut.

That’s because the future of Powder River Basin coal is tied to the U.S. coal-fired power plant fleet, and that fleet is quickly being retired, experts agree.

“We recognize that the clock is ticking,” said Jason Begger, executive director of the Wyoming Infrastructure Authority, which oversees the Wyoming Integrated Test Center — a coal technology incubator launched in 2014 to “scale up” coal technologies for commercial deployment. “If we don’t make some pretty giant leaps in scaling up and commercializing these technologies over the next five to 10 years, I think the [U.S. thermal coal] market is sort of going to pass us by.”

Not all coal technology and research accomplishes the same goal. Begger said some of the Integrated Test Center’s research is aimed at post-combustion strategies that might be applied at some U.S. coal-fired power plants — the most urgent need for Wyoming’s coal mining industry. Other research, however, aims at pre-combustion strategies for yet-to-be-built coal plants — most likely outside the U.S. — or for smaller boutique markets for coal-derived products such as building materials.

The latter has become a major focal point for the University of Wyoming School of Energy Resources, which now has an annual budget of about $10 million.

Wyoming may benefit from the eventual commercial deployment of coal-conversion technologies for building materials at home, or even pre-combustion applications overseas, Begger said. But time is quickly running out for a post-combustion technology fix to help preserve today’s U.S. power market for Wyoming coal.

“At some point there will be a tipping point where [U.S.] utilities feel like reinvesting in their coal fleet probably isn’t a direction they’re going to head, and that’s just kind of the cold hard truth,” Begger said.

Central Appalachia also is looking for ways to prolong the fossil fuel industry. Virginia lawmakers approved legislation to kickstart energy research in the coalfields for ideas such as emissions control strategies and using mine pools to cool data centers. 

Appalachia’s elected officials also are bullish on a plan to build out a new petrochemical industry in the Ohio Valley of western Pennsylvania, West Virginia, Ohio and Kentucky. The idea is to extend the shale gas boom of the early 2000s through the manufacture of natural gas byproducts such as ethane, which is used to make plastics and chemicals. A federal report released in June trumpeted potential for growth “at a scale not seen since the Industrial Revolution” through “energy resource production, next generation manufacturing, and petrochemical industry development and expansion.”

Yet that window may be closing as well. The same month the report was released, energy analysts warned that natural gas fracking firms face an impending wave of bankruptcy reminiscent of that which has devastated coal in recent years. For Appalachians, it’s an all-too-familiar pattern.

Wind energy could potentially play a significant role in Wyoming’s transition away from coal. Since 2014, wind energy developers have proposed investing nearly $10 billion in the state, which ranks among the top 10 in the nation for onshore wind energy potential.

For context, cities across America clamored at the opportunity to host Amazon’s second headquarters, a $5 billion windfall. Power Company of Wyoming’s 3,000-megawatt Chokecherry and Sierra Madre Wind Energy Project in south-central Wyoming is a $5 billion project. PacifiCorp, which operates as Rocky Mountain Power in Wyoming, plans to spend nearly $4 billion in Wyoming on wind, transmission and battery storage in the state.

“There is no other sector now, anywhere, that is thinking about a $4 billion investment in Wyoming,” University of Wyoming energy economist Rob Godby said. “This is actually a great chance to diversify the economy and move to a fuel-secure outcome where we could be producing electricity for another several decades.”

Wind, however, is a complicated topic in Wyoming. Despite the fact that ongoing wind energy buildout and upgrade projects in Carbon County alone have boosted local sales and use taxes there 215% during the past year, many lawmakers see any gains for wind as a net loss for Wyoming coal. The Wyoming Legislature continually reexamines how the state will tax the industry, including measures that some wind developers say threaten Wyoming’s potential for wind development.

“We need certainty and stability in tax policy,” said Kara Choquette, communications director for Power Company of Wyoming. “Our project has been under development for 12 years in Wyoming, and only four of those years did wind tax policy not change, or there wasn’t the threat of a change.”

Coal country envisions paths forward in manufacturing, reclamation and renewables is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

What happens when a $28.6 billion industry spirals into permanent decline? 

Rose Evenson’s mining roots run deep.

Her grandfather and uncles worked at the Homestake gold mine in Lead, South Dakota. As Homestake wound down, a lot of its miners went to work at Powder River Basin coal mines just across the border in Wyoming.

In the 2000s, Evenson and her brother followed and took jobs at Black Thunder mine — about a 1.5-hour commute from her South Dakota home in the Black Hills. 

“I thought I’d be a coal miner until I retired, but things changed,” said Evenson, 55. “It got stressful because you were always wondering, ‘Is this the month? How long do I have here?’ Every year it kept getting slower and slower, and I kept thinking, ‘God, I got to do something else.’”

This spring, after 13 years at Black Thunder, Evenson took a buyout package. Many of her colleagues did the same and moved to places like Utah, Indiana and Missouri. Evenson worked part time this summer for the local parks department in South Dakota while training for her commercial driver’s license.

“[Black Thunder] was a great place to work,” Evenson said. But job prospects elsewhere in the region are bleak. “There ain’t nowhere in this whole area — South Dakota, Montana or Colorado — [where] if you ain’t working for a coal mine you ain’t making much money. But I don’t see coal mines booming anytime soon.”

“Transition in Coal Country” is a collaboration of the Energy News Network and WyoFile, made possible by a grant from the Just Transition Fund. The series, reported by Mason Adams and Dustin Bleizeffer, examines how the declining coal industry presents immediate and long-term changes for coal communities in Wyoming and Appalachia, how those communities are coping with change, and what they might learn from each other in charting a path to a sustainable future beyond coal.

Read the rest of the series:
Part one: What’s next for coal country?
Part two: Coal country faces a healthcare crisis
Part three: Coal communities increasingly rely on federal health programs
Part four: How lax fiscal policy has left states flat-footed as mining declines
Part five: Coal country envisions paths forward in manufacturing, reclamation and renewables

Evenson’s assessment of the industry’s future stands in contrast to legislative action in coal states, where for decades a dogmatic belief in coal’s longevity has guided fiscal policy that has in some cases actually made it harder for coal-region economies to diversify.

And while thousands of mining jobs are being lost around the country, coal’s collapse carries ramifications that reach far beyond coal towns themselves, affecting downstream industries with larger geographic footprints. Railroads, for example, are slashing jobs along coal routes in response to declining shipments between coal mines and the power plants they serve. Manufacturers of equipment used in the coal industry have taken a hit as well.

So what happens to communities in coal-producing regions when a $28.6 billion industry spirals into permanent decline? 

High-salary workers like Evenson either retire earlier than planned or search for another, most likely lower-wage, job. Some move away and many become more reliant on social health services.

Businesses lose customers and healthcare providers see fewer patients with adequate insurance. Charitable giving among businesses to support local nonprofit social services dries up just as the need for such services skyrockets. Locally and regionally, revenues to support government services plummet, triggering budget cuts — often to the very programs most needed to maintain a quality of life and transition to more sustainable economies.

Wyoming also disproportionately relies on tax revenue from mineral extractive industries to fund education. Since 2016, the state has made cuts and dipped into savings to help staunch a growing K-12 education budget shortfall, now about $515 million over the next two years. The situation only looks to intensify.

Part of Wyoming’s emergency budget-cutting in the energy downturn and COVID-19 pandemic — so far $250 million with more cuts to come — includes an undetermined number of layoffs among teachers and state workers, according to Gov. Mark Gordon. Those job losses will hit local economies everywhere. The revenue picture in Wyoming is so bad right now that if all of the state’s roughly 7,500 state employees were laid off today, the savings still would not cover the estimated $1.5 billion biennium budget deficit.

“We spend every capital gain we get. We are living from hand to mouth as a state,” Gordon said in his opening remarks during a recent public forum on the state’s tax and revenue picture.

In many ways, 2020 is the reckoning that Wyoming and other coal communities never thought possible. Analysts predict closures among coal mines once considered “crown jewels,” and the state’s revenue is in freefall.

“When I started, we honestly believed coal was a 200-year asset,” said Sen. Cale Case, a Republican from Lander and an economist and 25-year veteran of the Wyoming Legislature. “Nobody has planned very well for what happens post-coal.” 

A tax structure becomes a liability  

Over the past 50 years, Wyoming has built a tax-and-revenue structure that not only narrowly relies on extractive industries to fund basic government services, but actually works against any economic diversification beyond extractive industries. 

Wyoming’s structural tax-and-revenue conundrum can be summed up in this dataset: The average household of three with an income of $60,000 and a home valued at $200,000 in Casper paid $3,070 in state taxes in 2017 but received $27,500 in public services, according to state data compiled by the Wyoming Taxpayers Association. That is the result of the state’s reliance on mineral extraction to pay the bulk of government services — about 70% of the state budget in 2000 and 52.2% of the state budget in 2017.

So even if Wyoming is successful in growing its non-mining industries, those new businesses and employees will be more of a drain on the budget than a contributor to it without reforms to the state’s tax and revenue structure. 

“This is just a difficult question because they’re not going to replace coal [revenue],” Wyoming Taxpayers Association Executive Director Ashley Harpstreith said. “Until we change our tax structure, there’s no way to replace that revenue.”

This isn’t the first time a commodity downturn has forced Wyoming leaders to consider reforming the state’s tax-and-revenue model. For example, the Tax Reform 2000 report was spawned by a prolonged downturn in energy in the 1990s. But the report’s key recommendations, which included imposing corporate and income taxes and closing a series of exemptions, were quickly shelved when the next boom came along: coal-bed methane gas in the early 2000s. 

For decades, lawmakers have sidelined discussions about recalibrating lodging and gasoline taxes, as well as considering a corporate or personal income tax. Today, however, there’s renewed interest in reexamining Wyoming’s Tax Reform 2000 report as a starting point for potential reform. The Wyoming Taxpayers’ Association hosted an online forum, “A Twenty Year Review of Wyoming Tax Reform 2000,” in July that featured several experts and elected officials. 

But whether Wyoming officials — and the voters who elect them — have the appetite to impose new taxes on themselves remains a big question.

Sen. Eli Bebout, a Republican from Riverton, said he believes, even in light of the COVID-19 economic crisis, Wyoming has more of a spending problem than a revenue problem, alluding to a longstanding strategy among lawmakers to “cut-and-cope” during energy downturns. 

Former Sen. John Hines, a Republican from Gillette who led the Tax Reform 2000 effort, said he sees little evidence that Wyoming is prepared to take on tax reform. “I’ve been asked a lot in the last 20 years, ‘When is Wyoming going to do something different?’ I say, ‘When all of our savings is gone.’”

Coal losses hit basic services

The ways in which communities receive revenue from the coal industry vary by state. Kentucky, Virginia, West Virginia and Wyoming have different approaches for collecting, sharing and distributing coal-related taxes to localities. However, all four use a state severance tax. Local governments in all four rely on property taxes as a primary revenue source. All of these revenues are declining.

Take Kentucky: The state coal severance tax historically has gone to local government through two funds, focused respectively on economic development and economic assistance.

“The theory was those resources were supposed to be used to create infrastructure so that when coal’s depleted, those areas can continue to thrive,” said Pam Thomas, senior fellow at the Kentucky Center for Economic Policy. “The reality is, those were used for everyday expenses, and things like sports stadiums, senior citizen centers and planting flowers in medians. They did do some industrial parks, but didn’t have the roads and broadband and other infrastructure needed to support those parks. A lot of the time, those parks were created and sat empty.”

Revenue sources including personal property and gas taxes have declined, too.

“We had a big structural deficit at the state level in Kentucky before COVID happened,” Thomas said. “The rainy day fund at the state level is almost zero. The capacity of the state in general to weather the storm we’re in now is diminished. The state doesn’t have many resources to help local governments. Absent federal aid, there really isn’t a lot of help.”

Coal severance collections have plummeted. In Letcher County, Kentucky, for example, tax receipts fell 89% from 2009 to 2019, and the county’s workforce fell by 25%. That decline squeezed the county’s budget, which shrunk by 40% between 2012 and 2018. The county tried to increase revenue by taking more state prisoners into its local jail, with the result that the jail has become one of the most overcrowded in Kentucky, a problem that has become even more consequential during the pandemic.

Elsewhere in Kentucky, local governments have enacted partial government shutdowns or cut into basic services such as waste management and law enforcement. Many places have failed to maintain and build infrastructure that’s necessary for an economic transition from coal, resulting in failing water systems, flooding and other crises.

“All of the water in the coalfield areas is impaired by mining,” said Mary Cromer, deputy director of the Appalachian Citizens Law Center. “It’s so pervasive, it’s hard to say exactly how it affects growth or development or the chance for anything else around here. It puts a strain on water treatment systems.”

Water isn’t the only problem. As broadband internet has become even more important for working during the pandemic, Kentucky lags the rest of the country in high-speed internet access, in part because a $1.5 billion initiative to wire the state is running behind schedule and over budget.

Infrastructure challenges make economic development more difficult in a region where rugged terrain and relative inaccessibility pose inherent obstacles. 

Mine reclamation: an opportunity and potential risk

Appalachian communities are struggling not just with the effects of coal’s decline on revenues, but also on the land. A 2016 Duke University study showed that extensive mountaintop mining, using techniques that blow the tops off ridges and deposit the debris in nearby valleys, has left parts of central Appalachia 40% flatter than before. Toxins from those mine sites are leaching into waterways.

Mine reclamation, required under the Surface Mining Control and Reclamation Act of 1977, has the potential to replace some lost coal jobs while preparing the land for new uses. But it also represents a massive liability with a history of misuse. More recently, reclamation has become a liability that the coal industry is deftly shirking through bankruptcy and the assistance of policymakers desperate to help mitigate the industry’s financial woes. 

Between 2012 and 2017, Alpha, Arch Coal, Patriot Coal and Peabody Energy shed nearly $5.2 billion owed for reclamation and miner benefits, in part by spinning them off to other companies, according to a Stanford Law Review study. 

Blackjewel, which held mining permits in Kentucky, Tennessee, Virginia, West Virginia and Wyoming, acquired more than 80% of its holdings from previous coal bankruptcies, including by Alpha Natural Resources and Arch Coal. In 2019, Blackjewel itself filed for bankruptcy, which played out in chaotic fashion and saw the company trying to jettison its own, largely secondhand, obligations. Its more productive mines and facilities were picked up by other companies, who simultaneously jockeyed to avoid its unreclaimed, unproductive mines. All this time, those unreclaimed mines have racked up reclamation violations.

“What we’re seeing is the inevitable end game of the industry here,” said Willie Dodson, central Appalachian field coordinator for Appalachian Voices. “What we’re seeing with the Blackjewel bankruptcy is this large number of permits that no reasonable person would expect to make money out of, different entities trying to shove them off on one another, and state regulators and insurance companies increasingly satisfied to just have any coal company on the hook, just to shield themselves from having the reclamation obligation.”

Wyoming strengthened its bonding and surety requirements for mine reclamation in 2019 in  response to coal company bankruptcies and moves to shed their cleanup liabilities. But taxpayers in the state could still get stuck with huge cleanup costs if a handful of companies forfeit bonds and walk away from their reclamation obligations.

Stacy Page, board member of the landowner advocacy group Powder River Basin Resource Council, said she worries that as profits shrink, coal companies will fall further behind on concurrent reclamation work, or lay off workers on reclamation crews. 

State regulators have been lenient in enforcing reclamation, looking for ways to let coal companies catch up on payments for violations instead of forfeiting the bonds set aside for reclamation should the company default, according to advocacy groups. The alternative is letting those costs fall on state taxpayers.

That’s because, critics say, most state systems for setting bonds are structurally flawed. In some cases, states allowed companies nearly $4 billion in “self bonds,” or guarantees that they had the money to reclaim mines. The majority of that amount was for companies that eventually went bankrupt. Many states no longer allow self-bonding. 

Kentucky, Virginia and West Virginia still all use bond pools, a collective fund paid into by coal operators. Bond pools work like insurance; if a mine operator goes under and can’t pay for reclamation, the difference is paid from the bond pool. 

However, all three central Appalachian states face situations where one operator’s bankruptcy threatens to completely destabilize their bond pools. In Kentucky, it’s Blackjewel. In Virginia, it’s companies that belong to the family of West Virginia Gov. Jim Justice. In West Virginia, it’s mines owned by Tom Clarke, who feuded with Justice before becoming a coal baron himself.

Their mines sit unreclaimed, scarring the landscape and leaking pollutants. They act as anchors slowing attempts by coal communities to build new economies. 

“If mines just sit unreclaimed because nobody is in a financial position to do that, the risk of flash floods and landslides and debris being washed off-site is just going to become worse,” Dodson said. “Any long-term treatment that is needed for water quality is not going to be happening. It’s pretty hard to keep your young people if places are dangerous and polluted. It’s certainly difficult to attract investment in that kind of place.”

Although surface coal mines in the Powder River Basin generally have a better environmental track record than historic and mountaintop removal mining in Appalachia, they still pose significant environmental and health risks if neglected.

Groundwater is a critical resource on the high arid plains, and in the past, mines have exceeded dust standards — a respiratory hazard. A surface mine in Wyoming, if left abandoned, could fill with toxic water, and leave hazardous highwalls and coal seams that could catch fire and burn underground for decades. Properly reclaiming disturbed surface in the Powder River Basin is essential to ongoing agricultural operations and the region’s wildlife.

The reclamation obligation for the thousands of square miles of surface mines in the Powder River Basin adds up to nearly $2 billion — which represents a financial and jobs opportunity that can help miners and service companies just as mines are closing. Coal Mine Cleanup Works, a July report by the Western Organization of Resource Councils, suggests reclamation at surface mines in five western states could create between 4,893 and 9,786 full-time jobs, mostly in Wyoming.

No coal community can afford to squander those reclamation opportunities, said Kate French, regional field organizer for the Western Organization of Resource Councils. She said there’s a tendency among policymakers to ease standards on the industry in the hopes and promise it will extend how long mines can operate, but it comes at a huge risk.

“That approach to helping the industry and, ostensibly, to help out the workers is rooted in something that is no longer the reality today,” French said. “It doesn’t matter how many regulations you cut or how many incentives you give the companies — the market doesn’t want  [coal]. It’s not going to change what’s happening in energy in the nation and around the globe.

“I think a lot of coal companies like to obscure where that [reclamation] money comes from,” French continued, adding that it comes from coal companies — a cornerstone to the deal they struck with the American people to mine coal in the first place. “They’ve been making money hand over fist for quite a while; why not give back to the communities that have really supported these coal companies and invest in them and invest in job creation?”

Correction: This article has been updated to correct the location at which the main photo was taken. It was at the Belle Ayr mine in the Powder River Basin.

Reckoning in coal country: How lax fiscal policy has left states flat-footed as mining declines is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Ideas range from retraining to relocation programs to funding to help towns realize tourism potential.

In 2017, when residents of the Hayden School District debated the merits of building a new pre-k through 12th grade school, little was said about the near certainty that a nearby coal-powered power plant would likely be retired long before the building’s debt was. The Hayden Generating Station pays 57% of property taxes in the district.

“Nobody wanted to talk about it. Now we’re talking about it pretty hard,” says Doug Monger, a life-long resident of Hayden and a Routt County commissioner. “When the power plant goes away, get your checkbooks out.”

Editor’s note: This is the second of two stories on Colorado’s transition from coal. The first installment was published Wednesday.

Smaller districts in and around Hayden will similarly see substantial revenue shortfalls. The West Routt Fire Protection District, for example, gets 62% of its property tax revenues from the power plant. The hospital, library and cemetery districts get 57%.

Such revenue shortfalls are among the many impacts to communities and workers addressed by a draft report issued Aug. 1 by the state’s Just Transition Advisory Committee. A final report is due state legislators on Dec. 31.

Created by a 2019 law, the committee was charged with devising strategies to assist workers and communities impacted by that transition.

The draft recommendations identify precise proposals to help the 2,000 coal miners, railroaders, and power plant workers who have or will likely lose jobs as Colorado shifts from coal-generated electricity to renewables during the next several decades. They’re spread across Colorado from Brush to Pueblo to Paonia. 

One recommendation calls for assisting workers with wage and health differential benefits for three to five years. Depending upon how long they were in the coal-dependent jobs, the workers would get part or all of the difference in reimbursement between the old jobs and new work.

Another provision calls for up to $30,000 in funding for new training or education for dislocated workers. Still another recommendation calls for assistance to workers who choose to relocate more than 50 miles for new work.

COVID-19 complicates potential aid from the revenue-strapped state government but also prospective help from foundations and other sources. As one committee memo notes, new sources of revenue must be developed. Then again, the bulk of coal plants — and all of them in the Hayden-Craig area — will not begin closing until 2025, possibly after the economy has recovered.

The law also specifies that these plans must be local in origin. The state won’t tell a coal-mining community that it must become a place that manufactures, for example, tennis balls. The draft report recommends creation of new tools that could assist new business formation. One recommendation would create a state-wide investment fund focused on investments in coal transition communities.

‘The conversation changed’

In Hayden, Xcel Energy is the operator and primary owner of the power plant. A 2016 filing with state regulators projected one unit closing in 2030 and the second unit in 2036. That was the understanding voters were operating under when they approved the $23 million bond proposal in 2017, by a whisker-thin two-vote margin. 

But that was before prices of renewable electricity had dived, causing Xcel to rethink its options. In December 2018 it announced that it intended to reduce emissions from its power generation in Colorado and other states where it operates 80% by 2030 as compared to 2005 levels.

There had been uncertainty at the time of the 2017 vote, says the town manager, Matthew Mendisco. Xcel’s decarbonization pledge was sobering. “When they made their announcement, that’s when I think the conversation changed,” he says.

State legislators in 2019 made that pledge a legal mandate. Xcel early next year is expected to outline exactly how it will meet that requirement. Closure of the plant will also hit Peabody Energy’s Twentymile Mine, whose primary market is the Hayden plant. Production was already skidding from the mine. The mine is one of the primary employers in Hayden.

In Craig, one unit was already scheduled to close by 2025, but in January Tri-State Generation and Transmission, the operator and primary owner, announced closing of the two remaining units by 2030. Also almost certainly to close will be the two coal mines, Trappers and ColoWyo, that supply them.

In early March, when the Just Transition Advisory Committee held listening sessions in Craig and Hayden, they heard anger, grief and uncertainty.

“They don’t feel heard by the state Legislature. They know they can’t replace coal jobs, and they don’t see a future for Hayden without coal,” reported Beth Melton, a Routt County commissioner, relaying the comments expressed at her table. Fears of lifestyle loss were mentioned often in a session held in the airport cafeteria near Hayden. The coal-based paychecks allow a reasonable quality of life in smallish, uncongested towns — not poor places, but not places of wealth either. Always there are the mountains and high desert, and sheer canyon walls of ochre, too, the hay meadows and  other manifestations of a pastoral landscape just three or four minutes away.

If there was always an understanding that someday the plants would close, the coal would play out, it always seemed too far into the future to seriously contemplate. Even those with their eyes wide open thought they had 10 to 15 years to figure out a future.

Dinosaurs to the rescue?

In theory, the lost tax base from the coal plant can be offset by increased growth. Hayden has excellent water rights — a valuable commodity in the arid West — capable of serving a population of 4,000 to 5,000. It has real estate costs that should make it an attractive option for those unable to afford housing in the prosperous resort community of Steamboat Springs 25 miles to the east. In reality, Hayden has changed very little in the last 40 years, despite its relative proximity to Steamboat. The population of Hayden was at 1,600 in the late 1970s, only lately growing to 2,200.

In Craig, a town of 9,000 people, some residents can remember life before coal became king. They suggest it wasn’t a bad place then, either.

But even before the announcements of plant closures, the Yampa Valley towns needed to think about diversification, says Jennifer Holloway, director of the Craig Chamber of Commerce.

“It has been our community’s mission to provide electricity, and now it has to shift,” says Holloway. “Every community needs a purpose. We need to have something we work toward.”

Some hope for new manufacturing to replace the manufacture of electrons. But with the closest interstate highway 90 miles away by twisting roads, that appears unlikely.

Tourism offers more hope. Moffat County is only slightly smaller than Connecticut and with a population of 13,000. It’s uncluttered but relatively rich with high-desert attractions. For decades there has been talk about pushing for national park designation for Dinosaur, the national monument about 90 miles west of Craig. Local elected officials refused to endorse the idea for fear that it might adversely impact oil and gas extraction along its perimeter. Now, a coalition of regional governments and river groups is being stitched together for a September summit to address the idea as well as the idea of a field museum in Craig.

The Yampa River, one of the last undammed rivers of the West, flows past Craig and through Dinosaur. Already, it adds a bit of business to Craig, if mostly boaters stop to gas up and grab groceries at the City Market. Perhaps to highlight potential opportunities, Gov. Jared Polis, when traveling through Craig in March to a listening session, stopped by a small manufacturer of rafting gear called Good Vibes. Other ideas involve what has worked for other tourism-based communities; a water park in the Yampa River between the town and the power plant, to challenge the skills of kayakers? And, in time, mountain bike trails on the slopes now being created by draglines at the Trapper Mine?

Improved mass transit, possibly including trains, could better link Craig with the wealth of Steamboat, 42 miles away, and its visitors. Colorado has three other tourist-driven trains. There’s little interest, however, in becoming a bedroom community for Steamboat’s poorly paid service workers. Craig will have enough of its own once the $100,000-a-year-plus-benefits coal jobs are gone.

Others wonder if curriculum at the local Colorado Northwestern Community College can be developed to take advantage of the assets of the region, such as programs in wildlife management or archaeology.  

Then there’s hope for an art gallery on Craig’s main street. Like many small-town downtowns, it lost vibrancy when Walmart arrived at the edge of Craig along with fast-food franchises.

How can the state help?

Altogether, the efforts suggest strategies of creating more attractive communities, creating the sort of place that will draw location-neutral people. 

But to achieve this will require infrastructure — just at a time when budgets are being strangled by the pandemic. The Just Transition committee’s draft report emphasizes this challenge unforeseen by legislative authors of the law. 

“A significant amount of work remains to reach a final Just Transition Plan for Colorado,” says the report. “Most notably, we need to better develop funding options that will be viable given Colorado’s constitutional fiscal limits as well as new budget constraints in the wake of the covid-19 pandemic.”

Since March, when the committee was in Craig to take testimony, for-sale signs have popped up in front of houses. Craig has been drawing people interested in fleeing the Denver metropolitan area. Unlike Colorado’s mountain towns, you can buy a house in the Yampa Valley for $200,000 to $300,000. 

Taxing districts face huge gaps as the coal properties recede. In Routt County, the Twentymile Mine and the Hayden plant together deliver 2.3% of the county budget at the courthouse in Steamboat Springs. Farther west in Craig, taxes on the two coal mines and the power plant deliver 11.3% of revenues for Moffat County’s budget.

School districts will have layered effects. Colorado seeks to equalize funding for students across the state, so that in theory a student in the poorest school districts gets an equal opportunity with that in the richest. Coal assets today deliver 46% of the budget for the Hayden School District and 20.5% of the budget to Moffat County schools.

But there are other impacts, explains John Wall, the finance director for Moffat County schools. A diminished tax base reduces the district’s ability to borrow money to repair the aging schools, the newest of which is 40 years old, about the same age as the coal plants.

Colorado communities must look at their assets when seeking economic development, says Paul Majors, chief executive of the Telluride Foundation, and a member of the Just Transition committee. Northwestern Colorado’s rugged beauty, he suggests, lies at the top of the list.

The Just Transition committee proposes aid to the coal-impacted communities for co-work spaces, business accelerators and other initiatives. The lengthy draft report also identifies the need for new state-sanctioned tools that provide a funnel for capital investments. Legislation will help, says Majors. It will signal to investors that the state is all in, they want this to happen, they’re supportive.”

‘More work to be done’

The intent of the Just Transition effort is not to replace lost revenue, although that could be part of the assistance. Rather, it is to help communities craft new ways to generate revenue. But the committee also recommends study of how to overhaul Colorado’s tax structure, to see if constitutional requirements actually impair the ability of local jurisdictions to plan for ways to strengthen and diversify their economies.

Colorado is not known as a coal state in the same way as Wyoming or West Virginia are. But coal had been central to the economy of the Yampa Valley for the last 50 years. Because of that dependence and its relative isolation, it stands out as among the nation’s most interesting places to see how it transitions to life beyond carbon.

Kelli Roemer, a human geographer working on a dissertation at Montana State University, focusing on Colorado, Montana and Washington state, observes that Colorado stands out because of its attempt to provide planning tools. Montana and Wyoming, two states even more dependent on coal, have made no similar effort at planning.

Colorado has potential to become a model for other coal-dependent states, says Mark Haggerty, an economic geographer associated with the Headwaters Economics, a Montana-based think tank and an advisor on Colorado’s effort. “Discussions and draft recommendations are headed in the right direction, but there is more work to be done, and ultimately the model taking shape will need support from the Legislature and the governor.”

Correction: An earlier version of this story transposed the name of the ColoWyo mine.

As Colorado towns come to grips with a coal-free future, the state looks for ways to help is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

A new draft report provides more detail on the state’s strategy as COVID-19 accelerates the crisis

In early March, a few days before the dark curtain of COVID-19 fell, Colorado Gov. Jared Polis was in the coal community of Hayden to speak about the concept of just transition — the idea that workers and communities need help to new careers and new economic foundations as coal gives way to new energy sources. 

It’s an unprecedented goal in Colorado, and other states, too. But it remains an experiment.

Editor’s note: This is the first of two stories on Colorado’s transition from coal. The second installment will be published tomorrow.

Polis was in Hayden not to deliver answers, but rather to listen. Wearing a light-blue polo shirt buttoned at the color, Polis sat at a table normally occupied by town council members as he heard details of union contracts, updates on economic diversification strategies, and lectures, too. 

“You drive into our valley and you see nothing but blue skies,” he was told, a reference meant to draw a contrast to the often polluted skies over Denver — a source of resentment for some rural communities who feel they’re bearing the brunt of the state’s push to cut emissions.

In that long afternoon, he heard no easy answers for how Hayden, Craig and other coal-dependent communities in Colorado’s sagebrush- and aspen-edged Yampa River Valley will transition to life after coal. Days later, the coronavirus pandemic would begin occupying the governor’s every waking hour. It also muddled Colorado’s effort to assist workers and communities impacted by the transition from coal to other energy sources.

COVID-19 may temporarily frustrate the good intentions expressed by Colorado legislators in HB 19-1314, titled “Just Transition From Coal-based Electrical Energy Economy.” The state budget had to be cut 21%, and budget analysts expect deeper cuts next year and beyond. That will make it hard to find state funds to assist workers.

But then most of the impacts will begin in about five years. As one committee member says, it will probably be easier to ask for $10 million then than $1 million now. The law passed in May 2019 assumes state assistance, most directly for workers in coal mines and plants and on the railroads. It also seeks to assist impacted communities but does not presume to have all the answers.

An advisory committee whose 19 members are drawn from the ranks of state government, local governments, think tanks, and economic development institutions, has drawn up a draft report, released this week. A final report is due state legislators Dec. 31.

‘We have time to get this right’

Colorado’s Just Transition law, passed in the same early morning hour on the final day of the 2019 legislative session as a bill establishing Colorado’s decarbonization goals, is the most systematic effort in the United States in regard to coal, says Dr. Dimitris Stevis, a professor of political science at Colorado State University who co-edited a book, “Just Transitions: Social Justice in the Shift Towards a Low-Carbon World.”

Other states in the West and Appalachia have addressed elements of the transition from coal, but community development expert Chris Markuson contends that Colorado has an opportunity to create the national model.

“Colorado is the first state to think of just transition on a statewide basis,” says Markuson, who directs the Colorado economic transition policy for the BlueGreen Alliance, a national coalition of environmental groups and labor unions.

Some think an even broader perspective is needed. “There will be transitions and more transitions. Any number of towns will go through the same thing that coal towns are going through today,” says Suzanne Tegen, assistant director at the Colorado-based Center for the New Energy Economy.

Some think that the just transition model being developed for coal will be applicable to the oil-and-gas sector. Others, such as Will Toor, the director of the Colorado Energy Office, point out a key difference. Oil and gas has always been cyclical, booming and busting, whereas coal has been steady in places like Craig and Hayden. 

Coal, though, is now rapidly slipping. It has fallen from providing 68% of net electrical generation in Colorado to 45% in the decade ending in 2019, according to the U.S. Energy Information Administration, while renewables more than doubled, to 25%.

Colorado ranks 11th in coal production among U.S. states. Half the coal is exported out of state, and half that to other countries, reports the EIA, and half is used for power production in Colorado.

By 2030, coal consumption in Colorado will decline far more. Nine coal-burning units — three at Craig, two at Pueblo, three in or near Colorado Springs, and one north of Fort Collins — are scheduled to close. Others operated by Xcel Energy, the state’s largest electrical utility, could also close. 

“We don’t have time to waste, but we have time to get this right,” says Wade Buchanan, director of the Just Transition office. He is, and will be for the foreseeable future, the sole employee of the office.

This shift will be easier for some communities than others. Colorado Springs, a booming metro area of more than 700,000, will provide more opportunities for workers than the remote Yampa River Valley, which is more than three hours from Denver. There’s a major airport at Hayden, but the flights cater to the rhythms of the mountain resort economy of Steamboat Springs 25 miles to the east.

Hayden and Craig depend almost exclusively upon coal. There’s some agriculture, and tourism, too, especially during hunting season. Visitors also stop along the way to or from Dinosaur National Monument, which lies 90 minutes to the west of Craig.

But even the motels in Craig rely far more on work crews than other travelers. At the Elk Run Inn, co-proprietor Randy Looper estimates that two-thirds of his customers are workers, mostly in town for temporary jobs at the coal units. “Hunters are great; they’re neat people,” he says. “But workers make my business work.”

School and other taxing districts rely even more heavily on the coal mines and coal-burning plants because of their reliance upon property taxes. At the Hayden School District, the Hayden Generating Station pays 57% of the property taxes to pay for a new K-12 school. It pays the same proportions for the local fire district and other taxing districts. When the coal plants close, the taxes of others will necessarily rise.

“Coal built this country, whether you like it or not,” says Doug Monger, a life-time resident of Hayden and a Routt County commissioner. “We can go away from it now, but we need to figure out how not to throw us under the bus.”

From an academic discussion to reality

The Just Transition law is founded on obligation, one described in the statute as “a moral commitment to assist the workers and communities that have powered Colorado for generations.”

Colorado’s law also mentions the dirty side of coal beyond greenhouse gases, the “disproportionately impacted communities who have borne the costs of coal power pollution for decades.” A practical component also underlies the just transition movement. Creating a path forward for impacted communities eases the opposition to reducing emissions, points out Erin Overturf, deputy director of the clean energy program at Western Resource Advocates.

Colorado’s law came together conceptually in 2018 in a collaboration of social justice, environmental, faith and labor groups. The Colorado People’s Alliance, a social justice organization formed in 2015, and SEIU Local 105, a union representing health care and service workers, initiated the discussions and were soon joined by the AFL-CIO and environmental groups, including the Natural Resources Defense Council. The groups coalesced into the Colorado People’s Climate Movement.

A study was commissioned to probe what it would take to get Colorado in accordance with the goals of the Paris climate accords from 2015, and what a “just transition” would look like.

“A Green Growth Program for Colorado: Climate Stabilization, Good Jobs, and Just Transition,” found that 88% of all energy consumption in Colorado came from burning oil, coal and natural gas. To achieve climate stabilization, coal consumption needed to fall 70% by 2030 and oil and gas 40%. That same study reported investing $14.5 billion per year in clean energy projects in Colorado from 2021 to 2030 would generate about 100,000 jobs.

The Colorado AFL-CIO has had a major presence in both shaping the legislation and now sharpening the recommendation to legislators for what is needed next. Dennis Dougherty, the union’s executive director, says his perspective was shaped by a resolution at the AFL-CIO’s national convention in 2017. Resolution 55 recognized the need to rapidly shift from fossil fuel combustion because of warming temperatures and implicitly authorized members to work toward policies “at the center of creating solutions that reduce emissions while investing in our communities, maintaining and creating high-wage union jobs and reducing poverty.”

Lizeth Chacon, co-chair of the Colorado People’s Alliance, said her group was motivated by reports of the poor air and water quality associated with energy development in disproportionately impacted communities, which tend to be lower income and places with people of color.

It was an academic discussion until the November 2018 election, when Democrats gained control of both houses of the Colorado Legislature. Dougherty said there was a realization that carbon-reduction goals and just transition had to go hand in hand. “We didn’t want to wait another year for a more perfect bill. We wanted to do it concurrently,” he says.

Draft legislation was altered in one significant way before adoption. The original bill specified wage differentials and other benefits for displaced workers for three years. Polis, the new governor, discouraged prescriptive precedent. Needs of displaced coal workers, for example, might be different from those of workers displaced by automation. Displaced workers in other industries might also expect the same benefits page.

Also, while it mentions disproportionately impacted communities, it gives little clear direction on how this is to be addressed.

The bill passed on a party-line vote in the Colorado Senate at 2 a.m. in the final hours of the session.

Colorado’s just transition report distinguishes between needs of impacted workers and those of the larger communities where they work. 

The draft report identifies a need for three and possibly four buckets of money to be drawn from state and philanthropic sources.

By far the largest need will be assistance to the 2,100 workers in coal mines, plants and railroads. Most make $80,000 to $100,000 per year, and it will be challenging, if not impossible, to find similar wages in new jobs while remaining in their communities.

A second monetary need will be the assistance to aid economic development by impacted communities. The Colorado law makes clear that the state won’t decide how Craig, Hayden and other impacted communities will reinvent themselves. That has to be driven largely from the grassroots. It can, however, assist them.

A third and overlapping fund will be needed to help with the private or public sector strategies to attract investment capital into the communities. How do you incentivize capital and entrepreneurs in a relatively risky environment?

The fourth and final bucket, much smaller, will be the financing to continue and perhaps expand the Just Transition office, which currently consists of one employee.

Instead of precise figures, the committee is trying to create a formula. But then again, every community’s needs will be different.

‘Coal keeps the lights on’

Craig and Hayden have generally resisted the energy transition. In 2015, when a WildEarth Guardians lawsuit threatened the ColoWyo Mine, signs went up around Craig saying, “Coal Keeps the Lights On.” Beer from a Colorado-based brewer who had supported WildEarth Guardians was removed from liquor stores and restaurant offerings. There was talk about economic diversification, but little energy was put into it.

Then in January, Tri-State said all three units at Craig would be closed by 2030. In the dark and cold of a hard winter, it shocked some in Craig.

Rawness remained in early March when Dougherty and other members of the Just Transition committee arrived in Craig to hear from the public. There was anger and denial, protests that “Denver” didn’t understand Craig. But others had already been thinking about what comes next. A few remembered Craig before coal dominated the town.

Strategies for the next career for Craig and Hayden remain incipient, little more than thoughts. Nobody has yet any notion of how to create anything that will substitute for the solid middle-class wages and the enormous tax payments delivered by the coal infrastructure to the local school districts, even the fire and library districts.

Jennifer Holloway, executive director of the Craig Chamber of Commerce, has a long view of coal extraction. In 1942, her great grandfather died in a coal mine explosion at Mt. Harris, a now-abandoned coal community near Hayden. Today, one of her brothers works at the power plant in Craig.

“Growing up here, the coal miners were all treated like astronauts,” she says. Miners made more money than people with bachelor’s degrees, and if it was hard and dangerous work, there was also a sense of mission, to help communities prosper with the electricity that is produced.

Now, with the coal plants closing, there’s a lost sense of mission. That loss may be just as important to the community psyche as the lost payroll and tax collections.

But coal also kept Craig from thinking about what else it might become, says Holloway. Now, it must confront that question directly.

Correction: An earlier version of this story transposed the name of the ColoWyo mine.

Amid the pandemic, can Colorado still lead on a just transition from coal? is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.