GILLETTE, Wyo.—For generations, coal has been good to this bustling town of 32,000, where local mines have long offered well-paying jobs and filled government coffers.
Even as the industry collapsed in Appalachia over the past several years, Wyoming’s Powder River Basin, a resource-rich stretch of plains that produces about 40% of the nation’s coal, seemed destined for a softer landing. Locals in this northeastern corner of the state maintained that the lower cost of operating the region’s surface mines compared with mines elsewhere, and the quality of the coal here, would cushion them from the impact of the nation’s shift toward cheaper and cleaner natural gas—as well as tougher environmental standards.
But on July 1, two of the area’s 12 coal mines abruptly closed, leaving nearly 600 workers without jobs and sending shock waves through Gillette, which proudly dubs itself the “Energy Capital of the Nation.”
“It has been difficult to talk about the decline of coal in Wyoming,” said Robert Godby, director of the University of Wyoming’s Center for Energy Economics & Public Policy. “But…reality has come crashing through the door.”
Wyoming coal mines last year employed just over 5,500 people, about 1% of the state’s population, according to the Wyoming Mining Association. But coal’s economic footprint has been much larger. Revenue from coal, oil and gas has historically accounted for between 50% and 70% of Wyoming’s general fund, according to Mr. Godby.
That footprint has been shrinking, though. Wyoming’s coal production in the Powder River Basin declined 19% from 2015 through 2018, Mr. Godby said, and state figures show severance taxes paid by coal companies fell 26% over the past four fiscal years.
Gov. Mark Gordon, a Republican, said he sounded the alarm on the need to shift away from coal in his previous post as treasurer, and the two closures make the problem more urgent.
“Is it a wake-up call? No doubt,” he said in an interview.
Mr. Gordon said his administration wants a shipping terminal in Washington state so Wyoming can export its coal to Asian markets. West Coast communities have resisted, concerned about the environmental impact.
State-funded research to find more uses for coal is also under way in the Powder River Basin.
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Mark Christensen, a commissioner in Campbell County, which includes Gillette, said economic diversification has been difficult to sell in a region where coal has made life comfortable. The county’s estimated median household income in 2017 was the second-highest in the state, at $78,240, U.S. census data shows.
Work in the vast coal pits surrounded by rolling prairie outside Gillette can pay as much as $100,000 a year. Each day, coal trains rumble by the town’s Americana-styled Main Street, and local bars and restaurants are crowded day and night with miners just off their shifts. Tax revenue from coal has helped pay for a $55 million recreation complex.
Anticipating coal’s troubles, Mr. Christensen, a Republican, in 2017 backed a quarter-cent countywide sales tax to raise revenue. The proposal was rejected by voters.
“The writing has been on the wall, but it has been really hard to get people to acknowledge it,” he said.
The two shuttered mines are owned by West Virginia-based Blackjewel LLC, which filed for chapter 11 bankruptcy and closed down operations on July 1. It cited tens of millions of dollars in debt, including taxes and federal mining royalties. The company’s former president and chief executive, Jeff Hoops Sr., who resigned following the bankruptcy, couldn't be reached for comment. Lawyers representing the company in bankruptcy declined to comment.
“When we actually heard they were shuttering the doors and idling the mines, that just blew us away,” said Rory Wallett, who had worked as a pit hand at both mines for 11 years before they closed.
While Gillette was shaken like this once before, when several companies laid off about 500 workers in 2016, Mayor Louise Carter-King said the actual shutdown of two mines was different.
“We’ve never seen anything like that before,” she said.
About 1,100 workers in West Virginia, Virginia and Kentucky also lost jobs when Blackjewel filed for bankruptcy.
Contura Energy, formerly Alpha Natural Resources , which once owned the Wyoming mines, is trying to reacquire them—which could put miners back to work. But the deal may not go through, and even if it does, Contura’s chief financial officer said on a recent earnings call that the company isn’t interested in operating in the Powder River Basin long-term. A spokesman declined to comment further.
Melissa Peterson-Worden, a 44 year-old mother of three who has worked in the local mining industry for about 20 years, got a job at a Blackjewel warehouse in April. It lasted just a few months.
“For the entire time I lived here, they said this was the one thing that wouldn’t happen,” she said.
Write to Dan Frosch at dan.frosch@wsj.com
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https://www.wsj.com/articles/coal-mine-closures-shake-wyoming-11567589404
2019-09-04 13:46:00Z
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