Jobs and Coal in West Virginia: Up and Down?
An examination of the data in the Mountain State may surprise you.
Several weeks ago, I sat next to Daniel Weiss of the Center for American Progress at a hearing of the House Subcommittee on Energy and Power on “The American Energy Initiative: A Focus on EPA’s Greenhouse Gas Regulations.”
Weiss’s testimony focused on the historical context for the Environmental Protection Agency’s proposed new rules on point source emissions of carbon dioxide. The end of Weiss’s testimony strayed a bit from that topic and turned to the question of the coal industry vis-à-vis Obama’s so-called “war on coal.” Weiss argued that there was no “war” and the coal industry was doing just fine. End of story I thought, but I was wrong.
Towards the end of the hearing, it was Representative David McKinley’s (R-WV) turn to question the witnesses.
During a recent House hearing on greenhouse gas regulations, Rep. McKinley talked up the so-called “war on coal.” (His remarks begin around 1:36:02.) But is there really a war? Let’s look at some data.
He began by addressing himself to Mr. Weiss, and, in the vernacular, tore him a new one.
“Your comments earlier were disturbing,” Rep. McKinley said to Weiss, “when you say there’s no war on coal. You know better than that.”
McKinley went on to argue that there most definitely is a presidential war on coal and the people of West Virginia were its innocent victims — out of work, struggling to put food on the table, discouraged and disheartened. He then rattled off a list of some 20 (presumably coal-fired) power plants, including Lake Shore, East Lake, Muskingum River, Newcastle, Bay Shore, and Titus, that are presumably having layoffs, and followed with, “I would just suggest, Mr. Weiss, you go to those neighborhoods and you tell them this is not a war on coal when they’re sitting there home without a job.”
As is sometimes the case when representatives orate during their allotted Q&A time with witnesses, McKinley gave Weiss no chance to respond, and simply moved on to his next witness. Ouch. I drew a sigh of relief when it became apparent that I was not on the Congressman’s hit list — his five minutes expired without any diatribes directed at me.
A Presidential War or a Result of Market Forces?
Rep. McKinley’s argument and the whole notion that the coal industry was suffering because of a war waged by the Obama administration puzzled me. I was aware, from data released by the U.S. Energy Information Administration, that coal usage had declined in the past year or two, reaching its lowest level since 1973, and is expected to continue to decline as a percentage of our total energy mix in the coming decades. The reasons? It’s part of the whole market thing, with winners and losers. In this case, coal is the loser to the ongoing natural gas boom. As EIA put it in February:
“A few factors disadvantage the relative economics of coal-fired capacity: projected low natural gas prices, the continued rise of new coal-fired plants’ construction costs, and concerns over potential greenhouse gas emissions policies.”
In short, coal will be priced, a lot more than regulated, out of the market; indeed it already is to a large extent.
Now, it is true that EPA’s new so-called boiler MACT rule, which is designed to cut boiler emissions of mercury and other air toxics (and to work in conjunction with the Cross-State Air Pollution Rule that aims to reduce emissions of nitrogen oxides and sulfur dioxide), is expected to force some coal-fired plant closures. However, these plants are among the least efficient and are quite old, and some have argued [pdf] for modernizing the fleet and leveling the playing field with utilities in states where emission standards are already imposed.
But What About Jobs?
Still, Rep. McKinley’s depiction of all the Coal Country families as jobless and desperate because of a sagging coal industry was disturbing. And it is true that the EPA has taken some steps to slow the permitting of new mountaintop mining operations. So it’s fair to ask whether those moves are what’s causing a loss of coal-mining jobs in West Virginia. To find the answers, I decided to do a little digging around to see what was going on. Here’s what I found.
The number of coal-mining jobs in the Mountain State has been on a steady rise (rebounding from the dip at the start of the recession) essentially throughout the Obama administration. And while the state’s overall unemployment is higher now than it was at the end of 2008, it is below the national average. If there is a presidential war on coal in West Virginia, it’s been an ineffective one — at least from a jobs perspective.
How Can Mining Jobs Be up, While Coal Usage Is Down?
West Virginia Coal Association vice president and lobbyist Chris Hamilton told the Charleston Gazette that while he had not noted the increase in coal jobs, he did note that coal production in West Virginia and surrounding areas in 2012 has been down and said the gain in employment was likely due to a reduction in “Appalachian coal’s per-miner productivity.”
Why is coal-miner productivity down? Perhaps because, as Carol Raulston of the National Mining Association haspointed out, there has been growth in underground mining (which requires more workers) rather than in surface mining. Could the growth in underground mining at the expense of surface mining have been in reaction to the Obama administration’s position on mountaintop mining (i.e., surface mining)? I’m not sure, but if so, it would be an interesting twist, with Obama’s policies leading not to fewer but to more mining jobs.
In recent months, there have been announced job cutbacks at some coal-mining companies. On June 27, for example, Alpha Resources notified employees at four mines in West Virginia of layoffs. While 100 jobs will be affected, 30 people will lose jobs and 65 people will get reassignments. The reason for the layoffs? As Ted Pile, vice president of communications at Alpha, told the State Journal: “It’s all thermal coal, and all due to the thermal coal market.”
In other words, blame it on natural gas.
And Then There’s Those Billboards
The narrative pushed by Rep. McKinley at the hearing last month is one that is echoing through the media and in campaign ads. You may have heard about or possibly driven by the billboards that have been posted in West Virginia proclaiming the area to be “Obama’s no job zone.” Given that coal mining jobs are at their highest level in more than a decade and total unemployment in West Virginia, though higher than it was at the end of 2008, is below the national average, it’s being charitable to say that’s an odd claim.
But in our world of the new normal, odd ain’t so odd anymore.