Coal: A Key but Threatened Part of State Economy

(Sheridan Press, August 14) – Born into a bedlam of state outcries, the Environment Protection Agency’s Clean Power Plan is the largest U.S. action constructed on climate change. Not even two weeks old and officials are already molding their lawsuits while others threaten that their states will not comply.

As the leader in coal production nationwide, Wyoming will be facing inevitable changes.

Seeking to cut carbon pollution by 32 percent, regulations outlined by the CPP tasks states to reduce their emissions to individual target rates.

The report said, “the EPA considered the ranges of reductions that can be achieved at coal, oil and gas plants at a reasonable cost.”

This was determined by three building blocks that examined: energy efficiency, the possibility of resource substitution and the use of renewable sources.

By 2030, Wyoming is legally obligated to decrease emission by 44 percent — one of the steepest, but not the highest targets in the nation. To accomplish this, the EPA recommends that the state begins taking action in 2022.

As determined by the case Massachusetts v. EPA, the agency has an obligation to regulate CO2 emissions and greenhouse gases.

Regardless of whether the CPP is the right action against climate change, its daunting regulations will affect Sheridan.

Cloud Peak Energy, the fourth-largest employer in Sheridan, expects to see rising costs of electricity throughout the state.

“The chief problem with the Clean Power Plan is that it will hurt lower income Americans by driving up electricity costs and hurt communities and states like ours where coal mining is an integral part of the economy and the community,” Rick Curtsinger said, Cloud Peak Energy’s spokesman.

The coal industry has certainly embedded itself in the Sheridan economy. During a July 16 board meeting for Sheridan County School District 1, Spring Creek Coal Mine General Manager David Scwend presented the financial benefits the industry has supplied to Sheridan, specifically the schools.

For SCSD1, that benefit was to the tune of $79.5 million. Sheridan County School District 2 supersedes that at $102.7 million. District 3 comes in around $6 million.

As a state that relies heavily on the profits of this industry — receiving around $1 billion a year in revenue — the law of supply and demand denotes an impact on economy and business.

Mullinax, which supplies resources to construction sites and coal companies throughout Sheridan and the state, has seen a drop in customers and use. Owner Nathan Mullinax is preparing for that decline to increase over the following years as the CPP takes effect.

“I’ll have to trim jobs, that’s for sure,” he said.

Working with the coal companies around Sheridan, Mullinax is familiar with this trend. If the coal industry booms, mines purchase gravel, pumps and various equipment, with profits spreading to the businesses they’re buying from, such as Mullinax. However, if they tighten up their budgets, the ripple is felt by suppliers.

This is a concern shared by Billy Craft, owner of Craftco Metals. Relying heavily on the energy industry as a whole, he expects negative economically consequences if natural resources, especially coal, struggle.

According to the U.S. Energy Information Association, coal will see a usage drop over the following decades.

“It’s guaranteed to cost this nation, especially this state,” Mullinax said.

The EPA provided suggestions in its report: an emissions rate-based or a mass-based energy approach. A rate-based approach would allow for energy credit trading. This could lead to a market demand that drives down costs.

This process is a feasible option Kipp Coddington said, a chemical engineer, lawyer and the director of the Carbon Management Institute at the University of Wyoming.

He expects the CPP to have three effects: increased electricity costs, job pressure and challenges to economic development as the state faces challenges in attracting more industry.

“This is a rule that comes down almost in a punitive way on Wyoming’s fossil recourse and could have substantial economic effects,” he said.

The problem will require creativity from the industry, Coddington said. However, if solutions are found — and it’s likely they will be, he said — the coal industry will continue to thrive. Other industries could show potential growth as well such as employment gains in the renewable energy sector.

However, health and environment is not a concern to overlook either, Coddington added. The largest benefits the CPP presents are $20 billion in climate benefits and $14 billion to $34 billion in health benefits.

Those most at risk are children, the elderly and individuals already managing health related concerns such as asthma. In Sheridan roughly 2,600 individuals with asthma could be at risk.

As a multifaceted problem, the state will need to consider health and economical benefits before drafting a plan.

“Sheridan and all of Wyoming is built on coal,” Curtsinger said. “People across the state enjoy a tremendous quality of life due to amenities provided, in large part, by coal production.”

Currently, UW’s Carbon Management Institute is analyzing the Clean Power Plan and working on proposals that are both economically and environmentally friendly.

With no clear answer, Coddington still believes coal’s best days are ahead of it.

Wyoming has until 2018 to submit its final plan to the EPA.

Original article here.