Kentucky

By Trevor Houser, Jason Bordoff, and Peter Marsters - Columbia Center on Global Energy Policy, School of International and Public Affairs, and the Rhodium Group, April 2017

From the introduction: Six years ago, the US coal industry was thriving, with demand recovering from the Great Recession, and global coal prices at record highs along with the stock prices of US coal companies. By the end of 2015, however, the industry had collapsed, with three of the four largest US miners filing for bankruptcy along with many other smaller companies. While coal mining employment has been on the decline for decades – from a peak of more than 800,000 in the 1920s to 130,000 in 2011 – the pace of job loss over the past six years has been particularly dramatic. After campaigning on a promise to end what he called his predecessor’s “War on Coal,” President Donald Trump signed an Executive Order in March 2017 ordering agencies to review or rescind a raft of Obama-era environmental regulations, telling coal miners they would be “going back to work.”

This paper offers an empirical diagnosis of what caused the coal collapse, and then examines the prospects for a recovery of US coal production and employment by modeling the impact of President Trump’s executive order and assessing the global coal market outlook. In short, the paper finds:

• US electricity demand contracted in the wake of the Great Recession, and has yet to recover due to energy efficiency improvements in buildings, lighting and appliances. A surge in US natural gas production due to the shale revolution has driven down prices and made coal increasingly uncompetitive in US electricity markets. Coal has also faced growing competition from renewable energy, with solar costs falling 85 percent between 2008 and 2016 and wind costs falling 36 percent.
• Increased competition from cheap natural gas is responsible for 49 percent of the decline in domestic US coal consumption. Lower-than-expected demand is responsible for 26 percent, and the growth in renewable energy is responsible for 18 percent. Environmental regulations have played a role in the switch from coal to natural gas and renewables in US electricity supply by accelerating coal plant retirements, but were a significantly smaller factor than recent natural gas and renewable energy cost reductions.
• Changes in the global coal market have played a far greater role in the collapse of the US coal industry than is generally understood. A slow-down in Chinese coal demand, especially for metallurgical coal, depressed coal prices around the world and reduced the market for US exports. More than half of the decline in US coal company revenue between 2011 and 2015 was due to international factors.
• Implementing all the actions in President Trump’s executive order to roll back Obama-era environmental regulations could stem the recent decline in US coal consumption, but only if natural gas prices increase going forward. If natural gas prices remain at or near current levels or renewable costs fall more quickly than expected, US coal consumption will continue its decline despite Trump’s aggressive rollback of Obama-era regulations.
• While global coal markets have recovered slightly over the past few months due to supply restrictions in China and flooding in Australia, we expect this rally to be short-lived. Slower economic growth and structural adjustment in China will continue to put downward pressure on global coal prices and limit the market opportunities for US exports. Indian coal demand will likely grow in the years ahead, but not enough to make up for the slow-down in China. The same is true for other emerging economies, many of whom are negatively impacted by decelerating Chinese commodities demand themselves.
• Under the best case scenario for US coal producers, our modeling projects a modest recovery to 2013 levels of just under 1 billion tons a year. Under the worst case scenario, output falls to 600 million tons a year. A plausible range of US coal mining employment in these scenarios ranges from 70,000 to 90,000 in 2020, and 64,000 to 94,000 in 2025 and 2030 -- lower than anything the US experienced before 2015.

These findings indicate that President Trump’s efforts to roll back environmental regulations will not materially improve economic conditions in America’s coal communities. As such, the paper concludes with recommendations for steps that the federal government can take to safeguard the pension and health security of current and retired miners and dependents and support economic diversification. Attracting new sources of economic activity and job creation will not be easy, and even at its most successful will not return coal country to peak levels of past prosperity.

But responsible policymakers should be honest about what’s going on in the US coal sector—including the causes of coal’s decline and unlikeliness of its resurgence—rather than offer false hope that the glory days can be revived. And then support those in America’s coal communities working hard to build a new economic future.

Read the text (PDF).

By Frank Ackerman, PhD and Tyler Comings - MACED, December 30, 2015

The steep, ongoing decline of coal mining has caused the loss of 30,000 coal jobs in eastern Kentucky in the last 30 years. Trends in energy markets and public policy make it clear that a coal‐based economy is not coming back. A successful response to this crisis, replacing the lost kingdom of coal with a sustainable, community‐controlled economy, is crucial to the hopes for forward‐looking economic development in the region.

The issue reverberates far beyond the coalfields, as the national search for clean energy alternatives confronts impassioned claims about the need to protect coal mining jobs. In Kentucky and in the nation, a common but misleading frame on the debate suggests that there is no alternative, that “real” jobs can only be created by traditional industries, even if they are environmentally damaging.

In fact, the narrow, coal‐centered vision of “real” jobs is fading away, and discussion of newer, cleaner alternatives is already underway. Community organizations such as the Mountain Association for Community Economic Development (MACED) and Kentuckians for the Commonwealth (KFTC) have sponsored grassroots job creation initiatives, and have identified key sectors where employment growth should be possible. Both MACED and KFTC advocate for a Just Transition, a bigger picture that combines existing initiatives into a single vision of a working economy, mapping the sustainable occupations and industries that will fill the void left by coal.

Our analysis describes a new pattern of employment that Appalachian Kentucky could aspire to reach by 2030. It is a more challenging and longer‐term goal than is usually found in immediate grass‐roots campaigns. At the same time, it is more limited, detailed and practical than a grand statement of ultimate objectives. It occupies an intermediate level of abstraction, a mid‐range strategic vision of what the regional economy could look like in ten to twenty years.

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By Grant Mincy - Counterpunch, January 17-19, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

On Thursday, January 9 a dangerous toxin, 4-methylcyclohexane methanol, leaked from a busted tank and into the Elk River in West Virginia. It is believed that nearly 7,500 gallons of the toxin made its way from the 40,000-gallon tank into the river. It’s unclear how much actually entered the public water supply.

The busted tank is owned by Freedom Industries, which uses the chemical for coal processing. Some 300,000 people have been directly impacted by the disaster, forced to wait in long lines at fire stations to receive potable water. There’s been a constant run on stores for the precious resource as well.

This is a story to often told in Appalachia. The Massey Energy coal slurry spill in Martin County, Kentucky (where 306,000,000 gallons of toxic slurry hit the town) and the TVA coal ash disaster in Kingston, Tennessee, are also part of the history of industrial disaster in the region. This history is wrought with class struggle, environmental degradation and corporatism. From the expulsion of Native Americans to the rise of King Coal, the Hawks Nest incident, the labor struggle, the Battle of Blair Mountain and the wholesale destruction of mountain ecosystems via Mountaintop Removal, Appalachia is on the front lines of the war with the politically connected.

The coalfields of Appalachia have long been home to impoverished people, overlooked by the affluent in the United States. Still, the “War on Poverty” has made its way into the Appalachian hills several times. Most famously, US president Lyndon Johnson singled out the region for his “Great Society” programs, and presidents 42, 43 and 44 have all tried to help the region as well. Instead of offering a new way forward, their programs further damage the area.

Much of the “War On Poverty” has been fought via economic engineering, centralizing the economies of West Virginia and Eastern Kentucky (along with parts of Tennessee and Virginia) into the hands of extractive fossil resource industries — notably coal and natural gas. The mechanization of these industries, however, has reduced the labor force. Specialized labor moving to the region has caused short-term booms and long-term busts. Once an extractive resource is exploited and gone,  communities are left to deal with mono economies and irreversible ecological destruction.

By Jeremy Brecher - Labor Network for Sustainability, 2012

This manual is intended for anyone—communities, unions, environmentalists, native tribes, public officials, and others—involved with or affected by the retirement of coal-fired power plants. It is designed as a guide for those who wish to make the transition away from coal in a way that is most beneficial and least threatening to ordinary workers, consumers, and community members.

In the past decade, a broad-based campaign has formed to move America beyond coal and power the nation with clean energy. The movement includes people from all walks of life—medical professionals, faith leaders, environmentalists, business people, workers, decision makers, and local residents—who are working to address the serious pollution problems caused by coal and to seize the economic opportunity offered by clean, safe, renewable energy.

This campaign has been remarkably successful, preventing the construction of more than 165 new coal-fired power plants, and thereby keeping energy markets open for clean energy. In state after state, as newcoal proposals have stalled, advocates have launched campaigns to retire existing coal plants and replace them with clean energy, securing the retirement of more than 110 existing coal plants to date.The coal industry and their allies regularly claim that jobs, workers, and unions benefit from coal plants and that transitioning away from coal will harm them. Industry claims about creating or protecting jobs have often proved fallacious or hugely exaggerated. Still, this message resonates powerfully in tough economic times and presents a real challenge to coal retirement efforts.

Several recent campaigns have demonstrated that coal retirements can be structured in ways that take care of affected workers and the area economy, and even win the support of organized labor and local decision makers. As the case studies described in this manual show, addressing these economic challenges is most effective when the concerns of workers and the local economy are built into the campaign objectives, messaging, proposals, action, and interventions in policy arenas.

Read the report (PDF).