PAINTSVILLE, Ky. — A high-tech manufacturing training center in this eastern Kentucky town is widely regarded as a singular success story of federal support for revitalizing Appalachian coal country. 

The 40,000-square-foot training center here in Johnson County, shaded by the 80-foot highwall of a reclaimed abandoned coal mine, is the home of eKentucky Advanced Manufacturing Institute. In 2016 and 2017, the newly organized institute was awarded two grants totaling $3.5 million from the Abandoned Mine Land Economic Revitalization grant program. AMLER is a $115-million-a-year federal program supporting projects that produce new jobs on or adjacent to reclaimed abandoned mines. 

eKAMI, as it’s known, has run with that idea. The nonprofit institute has trained nearly 200 eastern Kentucky workers — most of them men, many of them laid-off coal miners — since its first class graduated in 2018. During the 15-week course, which also is supported by a separate federal grant, students learn to program and operate digital machining tools and autonomous robots. eKAMI’s students graduate to $28- to $32-per-hour jobs in the thriving Middle Atlantic intelligent manufacturing sector. The nonprofit group itself employs 8 people. 

eKAMI has established such a credible track record that it won $6.4 million more in AMLER grants in 2018 and 2020 to build and staff a similar training center 40 miles west at the medium-security Eastern Kentucky Correctional Complex in Morgan County, the state’s largest prison.

“Manufacturers are seeking a talented workforce. They’re here recruiting even before our classes graduate,” said Kathy Walker, a former coal industry executive who founded eKAMI in 2015. “Our waiting lists are long. We have a lot of people who want to work. It takes courage to flip the switch from mining to 21st-century advanced manufacturing. But they find out they can do it.”

Yet even as it is recognized in Washington and Frankfort — Kentucky’s capital — as a champion Appalachian job developer, eKAMI also illustrates the complexity and challenge of developing 21st-century economies in regions so heavily influenced by 20th-century fuels. Producing good jobs and revitalizing regional economies is exceptionally difficult. More money is just a start. 

“If you just look at the dynamics of what’s going on at eKAMI in terms of trying to build a new economy in eastern Kentucky, what’s happening is they’re training an able workforce and then shipping them out,” said Peter Hille, president of the Mountain Association, a nonprofit community economic development group in Berea. “That’s another form of extraction, right? The solution has to be really broad and integrated. The pieces have to knit together so that they build on each other.”

Walker notes that her primary goal is to recruit an advanced manufacturer to settle in Paintsville, or other small eastern Kentucky towns where reclaimed minelands qualify for AMLER grants. Buford Owens, an eKAMI instructor who worked for 30 years as an underground coal miner before he was laid off in 2017, added that while most graduates commute out of the region for jobs in northern Kentucky, Ohio, and Tennessee, they typically return home on weekends. 

“That’s wages that are circulating in towns around here. It’s helping the area,” he said. 

Still, the larger point that Hille raised is relevant, just as it’s been for more than half a century. In 1964, President Lyndon Johnson declared the War on Poverty and created the Appalachian Regional Commission to direct tens of billions of dollars to various job creation and development initiatives in 13 states from western New York to Mississippi. Eastern Kentucky’s efficient and scenic highway network, which ended the region’s transportation isolation, is one measure of the commission’s effectiveness. But Census data also shows that eastern Kentucky counties, including Johnson County, are entangled by poverty rates that are more than twice the national average.

Joe Biden is the latest U.S. president to direct Johnson’s poverty-fighting goal to job creation on ruined industrial landscapes. President Jimmy Carter first introduced the concept in 1977 when he signed the bill that has spent $7 billion so far to reclaim Appalachia’s abandoned coal mines. Carter signed a second bill in 1980 that authorized a total of $5 billion spent to date for cleaning up the nation’s Superfund toxic chemical sites. 

President George H.W. Bush approved the environmental cleanup program for the nation’s nuclear weapons plants in the late 1980s, which now spends almost $7 billion annually. In the early 1990s, President Bill Clinton approved the Pentagon’s even larger program to rid installations of chemical wastes and other toxic hazards. 

Shortly after taking office, Biden signed an executive order that promised to help rural regions move past their dependence on fossil energy markets, and his administration has identified $37.9 billion in existing federal grant and loan accounts, including AMLER, to meet its job creation and revitalization goals.  

The economic logic behind big land restoration programs is pretty clear. A study published in May by the Political Economy Research Institute at the University of Massachusetts calculated that every $1 million spent on reclaiming abandoned mines generates eight direct and indirect jobs.

The Abandoned Mine Lands Economic Revitalization grant program embraces those data points and advances them in several steps. It asks private businesses and local governments to collaborate on projects that join mineland restoration with job-producing results beyond earth removal and grading. Since it was established in 2016, with heavy lifting by U.S. Rep. Hal Rogers, a Republican of Kentucky and former chair of the House Appropriations Committee, the AMLER program has authorized $655 million in grants in six coal-producing states and for three tribes. Kentucky’s share so far is $140 million.

According to Kentucky authorities, 55 projects in 21 counties have been selected for AMLER grants; $42 million has been spent to date and $79 million more has been approved. Grantees, according to the state, “have projected over 4,000 jobs.” But neither the state nor the Department of Interior has conducted a formal assessment of the accuracy of that number.

Kentucky’s AMLER projects, like those in the five other Appalachian states, are typically small, scattered, and hard to find, just like the towns where they are located in the state’s heavily forested and steep Appalachian region. 

State authorities, who review applications for the federal grants, cite other successful projects that fall into two basic categories.

The first is assistance to build industrial parks and to help recruit new industries. For instance, Perry County won a $6.5 million grant in 2018 to add capacity to Dajcor Aluminum’s plant in the Coalfields Regional Industrial Park. The industrial park had already benefited from a $900,000 AMLER grant in 2017 for a natural gas service pipeline. The Canadian company has added 31 employees since December, according to the state.

The second category seeks to grow a new rural Appalachian economy from the natural and cultural resources at hand — reclaimed minelands, recovering forests, ample farmland, and eastern Kentucky’s intriguing history and mining culture.

A rails-to-trails project, for instance, opened this spring on a former coal railroad corridor in Prestonsburg with the help of a $1.95 million AMLER grant awarded in 2016. It serves as a foundation of the developing recreational economy in the town of 3,250 residents.

The developers of the Wilds of Emily Creek have applied for a $3.5 million AMLER grant to turn 7,000 acres of forest and reclaimed minelands into an ecotourism attraction on former mine sites in Martin and Pike counties. The project has already gained a $300,000 grant from the U.S. Department of Agriculture to control invasive plants. 

“We’ve got a big canvas here to work with,” said Kenneth Van Hoose, who manages the project. “We’ll take our time to make this a place people want to visit.” 

AMLER grants in the five other coal-mining states of the East are invested in similar projects promoting the reclaimed landscape. In southwest Virginia, Project Thoroughbred, a grain processing plant meant to bolster a nascent malted barley economy in coal country and generate 50 jobs, was awarded a $2 million AMLER grant in 2019.

The largest AMLER grant in Kentucky, $12.5 million, was awarded in 2016 to the Appalachian Wildlife Foundation, a nonprofit development group, to build an 80,000-square-foot wildlife center on abandoned minelands in Bell County, in the southeast corner of the state. That project, Boone’s Ridge, has evolved into a $56 million, 12,000-acre recreation destination that is under construction. The foundation has benefited from two other federal rural grants and loan programs — $3.1 million from the Appalachian Regional Commission for constructing infrastructure and $23 million in loan guarantees from the U.S. Department of Agriculture. 

Frank Allen, the foundation’s chair, projects that when it is completed in May 2023, Boone’s Ridge will be capable of employing almost 250 staff members and attracting 1 million visitors a year. But Allen has $10 million more to raise. 

“This is really hard work in this region,” he said. “There is only so much the federal government can do. I’ve learned the hard way. Investors would much rather go into urban environments.”

Few regions of the country know the “hard way” more intimately than eastern Kentucky. As recently as the early 1990s, eastern Kentucky mines produced 130 million tons of coal annually. Last year it was under 10 million tons, according to federal figures. Thousands of abandoned mines await reclamation, according to the Interior Department. In 1950, eastern Kentucky mines employed nearly 70,000 miners. Just over 2,000 miners are working now. 

eKAMI’s lengthy waiting list for students seeking training reflects that number. “These are new collar workers,” said Kathy Walker, the founder. “We need to train them in mass. Much more than we are capable of doing now. I can tell you, manufacturers have jobs waiting for them.”

In the shadow of a reclaimed mine, this Kentucky center is retraining coal workers for high-tech manufacturing 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.

This story was originally published by Southerly.

Nina McCoy has been waiting for an answer to a question for 40 years: What happens to a coal county and the people who live in it when all the coal is gone? She still has the 1981 articles from when both the New York Times and the Louisville Courier-Journal posed the same question. Now McCoy, the fellow residents of Martin County, Kentucky, and much of Appalachia are on the verge of finding out. In the fourth quarter of 2020, her county produced just over 25,000 tons of coal, according to the Kentucky Energy and Environment Cabinet — a 26% drop from the previous quarter and a 73% decline year over year. County officials say they expect mining to cease altogether within the next year. 

“When I started teaching at the high school, there were 1,100 kids there, and now there are closer to 600,” said McCoy, who retired in 2014 after 31 years teaching biology at Martin County High School. “You’ve just seen an exodus of poor people.”

The loss of people — and coal mines — means there’s a fraction of the tax revenue there once was. Dozens of counties in the central Appalachian states of Kentucky, West Virginia, and Tennessee rely on money from coal companies in the form of severance taxes, which are collected based on how much coal is extracted from the ground. The states place loose guardrails around the revenue that is supposed to go toward economic development efforts, with localities often using the proceeds to offset spending on daily operations. In Kentucky, coal-producing counties also use a percentage of it for civic and social services including public safety, environmental protection, public transportation, health, recreation, libraries, and educational facilities. 

Southerly covered this downward trend in 2019, and it’s only worsened in the two years since. Martin County’s economic assistance-based coal severance revenue fell from $1.2 million in FY 2011 to just $79,085 in FY 2021— a drop of 93% in just a decade. 

“Once we’re declared a non-producer, which is right around the corner, we won’t have any coal severance left,” said Martin County Judge Executive Victor Slone. “We’re operating on a bare-bones budget. There’s nowhere really to cut right now. The only other option is to raise taxes on the poorest people in the commonwealth.”

It’s a story playing out all over central Appalachia: Kentucky coal production declined by two-thirds from 2011 to 2019; West Virginia coal production fell 31%; Virginia fell 48%. And as coal mines have disappeared, so has the population. There are 2,000 fewer people in Martin County than in 2010, and the poverty rate has hovered between 34% and 45% for the last decade. 

For 50 years, economists and researchers have warned the coal industry would permanently wane, and yet political leaders continue to offer hollow promises about its prospects for a comeback. External support for a broad economic transition looks closer than ever before: President Joe Biden’s administration says it will prioritize coal communities, and the largest union for coal miners recently endorsed a plan to move towards clean energy if miners are offered well-paying jobs in the industry. During the COVID-19 pandemic, money has flowed in through the two congressional stimulus packages, offering a buffer against layoffs and related revenue plunges. 

Martin County received federal pandemic relief last year, and is slated for another $2.1 million through the American Rescue Plan, according to Slone. That money is largely set aside for broadband, sewer and water infrastructure, and COVID-19 relief. Nearby Harlan County has reduced its employees through attrition, cutting parks programs, and reducing the hours and seasonality of a boat dock. 

Harlan County Judge Executive Dan Mosley said he and his peers are preparing for the infusion by lining up needed water, sewer, and broadband internet projects. At the same time, infrastructure money can’t be applied to daily operations. “We don’t have the luxury to use it to balance the budget,” Mosley said. 

Without more substantial federal support or a clear plan, the long-term outlook is hazy. Residents and local officials are struggling, helping each other survive through a patchwork system of mutual aid networks, fundraisers, and small grant programs.  

“We’ve hit our new baseline [for coal revenue],”said Sean O’Leary, senior policy analyst at the West Virginia Center on Budget and Policy. “We’ve kind of bottomed out, and this is the new reality going forward.”

The COVID-19 pandemic has made the problem of lost revenue and civic services even more urgent. Rural mountain counties were among the last to see documented cases of COVID-19, but became fertile areas for its spread based on high rates of co-morbidities and a withered system of hospitals and clinics. The coalfields’ long-running decline in population has also resulted in lower school enrollment and a resulting drop in state funding, and during the pandemic, unreliable broadband service made virtual school harder for many families. 

In late March, President Biden announced his $2.25 trillion infrastructure package, the American Jobs Plan, in Pittsburgh — Appalachia’s most prominent city. Parts of the package are clearly aimed to relieve distressed coal communities by reclaiming abandoned coal mines and gas wells, creating thousands of union jobs, and laying the groundwork for new economic growth in sectors like clean energy.

Even if the Biden administration is able to pass the bill through Congress, McCoy, from Martin County, remains skeptical that it will be put to good use. She’s seen a lot of federal and grant money pass through Martin County in the past, starting in 1964 when President Lyndon Johnson traveled here to pitch his “War on Poverty” programs.

Martin County’s median household and per capita incomes lag the state’s by about 10 percentage points, for example. It trails the state average of people that have graduated high school or have a college degree by about 12 percentage points. Only 37% of Martin County residents over 16 are counted in the workforce, versus 59% statewide. 

Other coal counties across the region struggle with similar problems. They serve populations with higher poverty rates, older residents, and poorer health outcomes, while also dealing with challenges such as aging infrastructure and vulnerability to flooding. In recent months, residents have taken to Facebook and other social media to set up mutual-aid networks to ensure that every family that needs help can ask for it within an emotionally supportive environment. “We know that things are extra tough in the hills and hollers right now,” reads the group description for EKY Mutual Aid. Members post when they need clothes, food, help with rent, or are running free yard sales. 

Central Appalachian states need a more coordinated and supportive approach to helping residents, but each is dealing with these issues slightly differently due to varying partisan control. Democrats control the governorship and state legislature in Virginia. Republicans control them in West Virginia. And Kentucky is split between a Democratic governor and Republican state legislature.

Virginia lawmakers recently repealed the state’s two coal tax credits, which were intended to spur production of metallurgical (steel-making) coal and encourage the use of coal in power plants. The credits subsidized the coal industry; a study by Virginia’s audit commission found that they lost money and sustained only a handful of jobs. Their most concrete effects were propping up the industry and effectively replacing lost severance tax revenue to fund the Virginia Coalfield Economic Development Authority, which tries to attract new businesses and grow existing ones through marketing and providing low-interest loans. Now that the tax credit is gone and only four coal-producing counties have severance tax revenue, the authority will likely shrink its operations and perhaps eliminate the loans, said its director, Jonathan Belcher. 

West Virginia’s coal industry fared better the last several years than in Kentucky or Virginia. But it has shrunk. “Looking at the past 12 months, we’ve done basically OK,” said analyst O’Leary. “A lot of that can be attributed to the stimulus. But revenue projections for the out-years are down significantly.”

West Virginia Gov. Jim Justice aggressively pursued a proposal this year to cut the state income tax and raise other taxes — including changes to oil, natural gas, and coal severance taxes — but the supermajority Republican state legislature failed to pass it. Instead, they approved a bill that would affect how oil and natural gas infrastructure is taxed in ways that will likely reduce local revenue. In Boone County, which used to be West Virginia’s top coal county, commissioners recently ordered staff cuts that included losing five sheriff’s deputies. 

A similar situation happened in Martin County two years ago. Sheriff John Kirk went viral with his Facebook warning to residents about budget problems. Today, he says he’s still in the same position and without enough funds to operate. On Saturdays, he gets help from two deputies still training in the police academy, but other times he often responds to calls across the county by himself. He’s not confident those two deputies will stay in Martin County once they graduate — they typically leave. “Why would you work at a sheriff’s office with no healthcare insurance for $12 an hour, when you can go to another sheriff’s office with better pay?” he said.

McCoy is at the forefront of a push in Martin County to get the state and federal governments to address problems like these — especially failing and polluted drinking water infrastructure. She’s also grown weary of failed promises; when money has flowed in, its effectiveness is often disrupted by financial mismanagement and sometimes local corruption. Perhaps most of all, McCoy said she often wonders why nobody saw all of these problems coming sooner. 

“Since 1981, we’ve been waiting for this to happen,” McCoy said. “What is wrong with leaders that haven’t tried to answer that question that was asked 40 years ago? It’s a lack of vision.”

Biden vows to support struggling Appalachian counties, but residents are weary of failed promises 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.

Last fall, in the middle of a pandemic that has caused many Eastern Kentuckians to face even more dire financial situations, Kentucky Power filed a new rate proposal case in Frankfort that proposed higher electric rates for more than 165,000 customers in 20 counties, and significant changes to solar net metering rates.

Kentucky Power asked for a 25% hike in rates – their third hike in five years— and also included disincentives for much-needed energy efficiency upgrades that would save home and business owners money.

That’s why the Mountain Association, Kentuckians For The Commonwealth (KFTC) and the Kentucky Solar Energy Society, represented by Tom FitzGerald with the Kentucky Resources Council, jointly intervened in the case through formal proceedings. We sought to participate so we could advocate for reasonable rates and fair solar net metering policies.

Every year the Public Service Commission receives around 500 applications from utility companies for changes to rates and services. Nearly 85% of these cases go unchallenged. Our status as “joint intervenors” allowed us to contribute testimony and to cross-examine witnesses in order to bring more scrutiny to Kentucky Power’s proposed rate hike. Together, we raised awareness of the case. More than 250 public comments were filed through KFTC’s website. We encouraged virtual opportunities for public hearings so customers could safely comment during COVID-19, and ultimately three such hearings were held.

In January, the PSC issued an order declining to approve Kentucky Power’s rate increases as proposed. The PSC reduced the rate increase sought by Kentucky Power from $70 million to $52 million. Ultimately, this means residential rates will still go up 12.5% and small commercial rates will go up 12%, but by less than if Kentucky Power had prevailed.

The PSC agreed with us that the company’s plan to spend tens of millions of dollars on new, advanced meters and their proposal to recover those costs should be denied, sparing customers from additional charges to pay for those upgrades. They also rejected Kentucky Power’s plan to charge lower rates to their highest energy users. We argued that this “declining block rate” would discourage investments in energy efficiency. There are far better ways to help customers with high winter bills, including pay-as-you-save efficiency programs that will lower bills and improve peoples’ homes at the same time.

The commission did not agree with us that the fixed meter charge should not be increased, and approved the company’s request to increase that monthly charge that all residential and small commercial customers pay, regardless of their energy use. We had opposed this proposal because it discourages people from investing in efficiency, makes it harder for customers to manage their bills by conserving energy, and because the impact falls hardest on customers with low and fixed incomes.

The PSC deferred a decision on changes to Kentucky Power’s solar net metering rates. The utility had proposed cutting the credit provided to solar customers by 75%. The Commission criticized the utility for not providing a cost of service study to justify their new rates, and rejecting their attempt to base the rates on their “avoided costs.” If the PSC had approved those proposed changes to solar net-metering, it could have set a bad precedent for all other electric utilities in Kentucky. Instead, the commission said it will rely on the advice of a consultant and has set a new hearing to gather additional evidence in order to determine what is a fair value for electricity fed into the grid by solar net-metering customers. 

In the meantime, the PSC order allowed Kentucky Power to implement the proposed solar net metering rate, subject to having to refund customers if the proposed lower rate is not finally approved at the time of their deferred decision in May. Unfortunately, the decision of Kentucky Power to implement the rates before the case is concluded has created unnecessary confusion for customers considering solar.

The Mountain Association, KFTC, Kentucky Solar Energy Society and Metropolitan Housing Coalition are now intervening in rate cases filed by Louisville G&E and Kentucky Utilities. These cases also include significant changes to net metering policies for solar customers. Public comments, although accepted at any time, are suggested to be sent by the hearing, which has not been scheduled but is anticipated to be April 2021 or later. 

To file public comments in this rate case, include the case number (2020-00349 KU or 2020-00350 LG&E) within the subject line of your email to the Public Information Officer at psc.info@ky.gov and provide your full name and place of residence in the body of the e-mail; or send via mail to Public Service Commission, 211 Sower Boulevard, Post Office Box 615, Frankfort, KY 40602.

The PSC has an obligation to establish rates that are fair, just and reasonable to all ratepayers. Our organizations intend to help the PSC hold utilities accountable to those standards and to the ratepayers.

Commentary: Why we intervened in Kentucky Power’s 3rd rate hike in 5 years 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.

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.

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.