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Home » Job Gains and Losses From Coal Shutdowns Land in Different Places

Job Gains and Losses From Coal Shutdowns Land in Different Places

December 5, 2021 by Pauline Lee

Mines in Utah feel pain from plant closings hundreds of miles away, while renewable jobs go elsewhere

by Shane Shifflett, Wall Street Journal, December 5, 2021

The decline of coal in the U.S. is playing out in rural Utah, where a mine is losing two top domestic customers because their power plants are switching to cleaner fuels. One reason: California is taxing and banning carbon-intensive energy sources to slow climate change.

The loss of business will potentially cost revenue and jobs for three counties where Wolverine Fuels LLC operates its mines. The economic benefits from the switch to cleaner fuels will be felt far away, across the state in Utah and hundreds of miles away in Nevada and California.

“How is rural Utah going to replace that revenue?” said Kent Wilson, a commissioner in Emery County, which could be hit with job and revenue losses if the nearby Wolverine mine produces less coal. “We will become a poor county the day those [coal-fired] power plants shut down.”

The shift to renewable energy is both costing and creating jobs, though generally not in the same place. That is one of the stresses caused by the multidecade transition away from fossil fuels.

The Utah mine’s customers are ending the use of coal more quickly than expected, driven by demand for cleaner and renewable energy. The plants accounted for more than half of the coal mine’s shipments to U.S. power plants in 2020. The plants are shifting—one to solar and the other to natural gas—as early as 2025, years earlier than planned.

The Utah power plant, in the town of Delta, is the state’s largest and sells most of its electricity to Los Angeles and surrounding cities. The plant will switch to natural gas to comply with a California state law limiting electricity generated by coal. “That’s going to be a very hard customer for us to replace,” said Garrett Atwood, Wolverine Fuels’ vice president of commercial operations.

The Nevada plant, owned by NV Energy and located in Humboldt County, will soon be the state’s last coal-fired power plant. The company is breaking ground in January on the solar plant that will replace it. “Losing that plant does hurt the coal industry,” said Mr. Atwood.

The California and Nevada cities moving to clean energy won’t likely suffer serious consequences from the shift. Most U.S. coal mines are concentrated in a handful of counties where the largest employer and taxpayer is a coal company, according to a Brookings Institution analysis.

More jobs are expected to be created in the green-energy economy than lost from giving up fossil fuels. The problem is many of the jobs will be in different places, said Phil Jordan, vice president at BW Research and leader of the firm’s energy practice that focuses on economic and workforce trends. “The big challenge that we face is that not every lost job can be replaced by a job in clean tech or clean energy,” he said.

More than 80% of U.S. customers are served by a power company that has set a carbon-reduction target, according to a survey of utility companies by the Smart Electric Power Alliance.

The boom in renewable energy jobs will last for years at the plants but will eventually end. At the Nevada plant, up to 700 construction workers will soon spend 18 months building the first solar plant, which will be able to generate 250 megawatts of electricity. In 2023, about 800 workers are expected to begin building the second, larger solar facility with 350 megawatts of generating capacity and 280 megawatts of battery storage.

Just 16 full-time positions will be needed to run the solar plants. That compares to 45 employees who currently operate the coal plant. They will be offered other roles at NV Energy, according to a company spokeswoman.

The salary ranges for the new jobs haven’t been disclosed but are expected to be competitive. The national median hourly wage in 2019 for a worker in the solar sector was about $24.50, while coal-industry employees brought in $28.70, according to the U.S. Energy and Employment Report on Wages.

Building new solar plants is projected to generate greater tax revenues for Nevada and local governments over the next three decades relative to other scenarios considered by NV Energy, including switching to natural gas, according to regulatory filings. But incentives offered by the governor will reduce taxes on the solar plant paid to the county by more than half, according to Humboldt County Assessor Andy Heiser.

In Utah’s Carbon and Emery counties, coal production dropped by 60% between 2010 and 2020 to 5.2 million short tons, according to Utah Geological Survey data, leading to job losses and population declines as miners left for opportunity in other regions.

Utah is currently one of the fastest-growing states in the nation, yet coal-dependent counties there are languishing. Employment in the counties declined by 21% between 2008 and 2018, while it rose in the rest of the state by the same amount, according to an analysis by the University of Utah’s Coal County Strike Team initiative, a program aimed at raising incomes of 10,000 households.

Poverty rates in the region are rising, unemployment might be higher if households weren’t leaving the counties, and opioid death rates are three times the statewide average, the analysis said.

Mr. Wilson said his three sons left Emery County for mines outside the state about five years ago after they lost their jobs when one of Utah’s largest mines closed in 2014.

“When we have had mines close, generally the skilled workers don’t stay there and try to work in a McDonald’s,” said Brian Somers, president of the Utah Mining Association. “They leave the state and go work in Wyoming or in the gold mines in Nevada.”

The mines still operating are major sources of revenue for the counties. Wolverine’s three mines in 2018 paid workers $85.3 million and federal, state and local governments another $41.9 million. Emery County receives between $1.5 million and $3 million in mineral leases from coal, Mr. Wilson said.

One mine straddling Carbon and Emery counties fueling both the Nevada and Utah plants employed nearly 1,500 direct and indirect workers in 2018 from miners to support staff including truckers, according to documents submitted to the Utah Legislature.

Wolverine produces more than 60% of Utah’s coal, and in 2018 roughly a third of the company’s fuel was shipped overseas, largely to Japan.

Wolverine recently sued a California port city after an ordinance was enacted that banned coal and could effectively block the company’s international exports. Utah joined the suit in January arguing the state relies on royalties from Wolverine’s international exports to fund schools and infrastructure, according to court filings.

“But if this coal is not allowed to go through this port…Utah essentially loses the Japanese market,” said Utah Assistant Attorney General Anthony Rampton last year in a Zoom webinar discussing the case. Mr. Rampton declined to comment.

Filed Under: Business Tagged With: clean energy, coal mining, coal-fired power plant, Nevada plant, NV Energy, power plants, replace revenue, shift to renewable energy

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