Ask a Scientist: What Can We Do to Help Displaced Coal Workers?

May 10, 2021
Xcel Energy decommissioned coal-fired power unit in Denver's Arapahoe Station.Will von Dauster, NOAA
Elliott Negin
Senior Writer

Despite the Trump administration’s attempts to preserve the coal industry, mining jobs hit a record low during his term. There were nearly 90,000 people working in the industry in 2012, according to the Bureau of Labor Statistics. In January, there were 42,400.

That’s not a surprise. Over the last decade, demand for coal has dropped precipitously, largely due to the availability of cheap natural gas, the dramatic drop in the cost of renewables, and flat demand for electricity. In 2010, coal-fired power plants generated 50 percent of US electricity. Last year, coal plants were responsible for only about 20 percent. The Biden administration’s goals for cutting carbon emissions will no doubt further accelerate the industry’s decline.

That’s good news for public health and the climate, but bad news for coal miners and coal-fired power plant workers, as well as the places where they live and work.

Dr. Jeremy Richardson, a senior energy analyst in the UCS Climate and Energy program, has been looking for solutions for this looming problem for years, and he has a personal stake in the matter. He grew up in West Virginia, the grandson, son, and brother of coal miners.

In 2013, Richardson organized a conference in Charleston, West Virginia, for workers, business leaders, public interest advocates, and government officials to explore ways to diversify local economies that have traditionally relied on coal companies, which often are the only major employer in town. There were no obvious answers. Opportunities in the wind and solar industries, which have expanded significantly over the last decade, are generally not based in coal country, at least not in West Virginian or Kentucky. Nor do they provide comparable pay, benefits, or union protection.

Some policymakers have recognized that no matter what states do, it is going to take a federal approach. The Obama administration increased funding across federal agencies to programs supporting economic development in coal country through its Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) initiative. And just a few weeks ago, the Biden administration floated a $2-trillion infrastructure plan, which would invest heavily in such critical infrastructure as broadband and water and wastewater treatment in rural communities, where many coal mines and large coal-fired power plants are located. Biden’s plan would rebuild bridges, ports and airports and promote good-paying union jobs. Even the United Mine Workers have endorsed it.

In any case, the reality is that coal workers not old enough to retire will have to find some other line of work as the industry continues to decline. That’s the assumption Richardson and Lee Anderson, the government affairs director at the Utility Workers Union of America, made in their new analysis, Supporting the Nation’s Coal Workers and Communities in a Changing Energy Landscape, which found that it is possible to help displaced coal workers at a relatively low cost. I had the following email exchange with Richardson on the eve of the report’s release to find out more.

EN: You propose a plan that would provide displaced coal workers with comprehensive resources and support. Why don’t you tell us briefly what you and your co-author envision.

Jeremy Richardson is a senior energy analyst in the Climate and Energy program at the Union of Concerned Scientists. Hailing from a third-generation coal mining family in West Virginia, and with more than ten years of experience in climate and energy issues, Dr. Richardson focuses on federal climate and energy policy development, specializing in the economics of energy.

JR: Our work builds upon the principles of a fair and equitable transition as envisioned by the BlueGreen Alliance, a coalition of labor unions and environmental groups, and the National Economic Transition coalition, which local, tribal and labor leaders in coal country launched last year. UCS and UWUA helped develop these principles.

First, dislocated workers should continue receiving their wages and benefits for five years after they lose their jobs. Why five years? It would provide workers—and their families—time to figure out what comes next. In many cases, that’s not at all obvious. Temporary wage replacement would allow workers to evaluate their options and further their education to prepare for new occupations. What often happens when workers lose their jobs is they will take the shortest training program available so that they can return to earning a living as quickly as possible. Giving them five years would enable them to be much more deliberate about it.

It’s worth emphasizing the benefits piece. Workers should continue to receive employer retirement contributions, either through 401(k) or pension plans, to protect their retirement security. And they will need health care coverage. So when we say full wage replacement, we mean salary and benefits.

Dislocated workers will also need access to flexible educational benefits, akin to the GI Bill benefits World War II veterans received, so they can attend appropriate educational programs at vocational schools, community colleges, or four-year colleges and universities for free. Our proposal extends this benefit to the children of dislocated workers to help alleviate generational poverty.

Existing federal programs can help with additional funding. Workers would be presumed eligible for programs such as the Dislocated Worker Program at the Department of Labor, allowing them to attend training programs and take advantage of job placement services. Workers also should be able to access mental health and counseling services and be eligible for relocation allowances when appropriate in individual circumstances.

EN: Between 2011 and 2019, more than 120 coal-fired power plants were retrofitted or replaced to burn other types of fuel, according to the US Energy Information Administration. Did you take that into account?  Will some of these power plant workers in your analysis wind up retaining their jobs if their plants are converted to burning natural gas?

JR: No. We assumed that the coal workers who do not reach age 65 will become “dislocated” and will need transitional support. It’s true that some utilities have been able to reassign workers to other jobs as plants close, but that will become more difficult as coal continues to decline. You also have to keep in mind that a large coal plant might employ 300 to 400 workers, while a comparable natural gas plant might only employ a few dozen. For our analysis, we estimated a reasonable ceiling for the costs of these policies to ensure no one is left behind.

EN: We are basically talking about retraining fewer than 90,000 workers. How much would that cost?

JR: Right. It’s not a large number of people. Approximately 90,000 people worked at mines and coal-fired power plants in 2019, but not all of them will need the resources we describe. Our analysis subtracts the workers who will reach retirement age over the lifetime of the program. And that assumption based on the lifetime of the program—or more specifically, the phaseout of coal—is the key driver of our cost estimates. That’s why we calculate the cost as a range, running from $33 billion to $83 billion.

On the low end, we assume coal exits the US energy system by 2040, meaning that the program lasts 25 years, given that benefits extend five years beyond the year the last workers lose their jobs. Over that 25-year period, many more workers would hit age 65 and therefore not need support. The price tag for the 25-year program would be $33 billion, or on average $1.33 billion a year.

On the high end, we assume a 2030 exit date for coal, implying a 15-year program, which would cost an estimated $83 billion—on average $5.53 billion a year.

EN: That seems counterintuitive. Why would a shorter program cost two-and-a-half times more? And $33 billion to $83 billion sounds like a lot of money.

JR: It is counterintuitive. But it makes sense when you consider that the longer it takes for all coal plants and mines to close, the more workers will reach age 65 and retire, not needing federal displacement assistance. Our analysis doesn’t consider the possibility of rehiring because we don’t have precise information about the demographics of the workforce or the dates when specific facilities will close. Again, we are using the ranges to bracket our cost estimate.

Our proposed investment in displaced coal industry workers is not that much money when you consider that we will need to invest trillions of dollars in our energy system over the next three decades to ensure we reach net-zero carbon emissions by midcentury. We strongly believe that investing in coal workers is not only the right thing to do, but it’s a reasonable amount of money in the context of the challenge we are trying to meet. Why should these workers bear the burden of the shift away from coal? We owe far more to the folks who have given us so much.

I also want to emphasize that this is just a down payment. We will have to invest a lot more in communities and infrastructure to ensure a fair and equitable transition to a clean energy economy. Done right, these investments can solve multiple problems. For example, reclaiming abandoned coal mines and remediating former power plant sites can simultaneously create employment opportunities in the precise places where coal industry workers have lost their jobs, clean up the air and water, and enable communities to attract new businesses and industries.

EN: You mention in your report that Germany has adopted comprehensive plans to assist displaced coal workers and coal communities. You also mentioned that Colorado has instituted similar policies. What about those programs stands out?

JR: Germany offers an interesting example because the country is grappling with exactly the same problem I hinted at earlier. But Germany is facing the problem head-on, while we are hamstrung at the federal level on whether we should do anything at all. The big question here is, how quickly can we accelerate the shift away from coal? From a climate perspective, we need to phase out coal sooner than later, hence our 2030 assumption; but from a worker perspective, we want these facilities to stay open longer to allow for a managed transition, hence the 2040 assumption. So there’s an inherent tension here.

When Lee and I visited Germany just before the pandemic, we saw that the government brought together stakeholders to hammer out a plan to balance competing priorities. It wasn’t a perfect process, but it was critically important that labor was at the table from the start. They wound up agreeing on a schedule for closing down plants and mines by 2038 and committed 40 billion euros to invest in coal communities and compensate workers for job losses.

The Colorado example is also a good one. The state set ambitious goals for reducing carbon emissions by 2050, and at the same time it set up a structure to identify the needs of coal communities. The state’s Office of Just Transition conducted a series of listening sessions in affected communities and developed a set of recommendations for moving forward based on that input. One of the recommendations called on the federal government to establish a national program to support workers who lose their jobs through no fault of their own, including providing full wage replacement, just what we called for in our report.

EN: Is there any precedent in the United States for this kind of program? Technological change and corporate decisions to leave communities have dislocated workers in the past.

JR: There are some examples of partial attempts to address worker dislocation, but I would say there has never been a comprehensive solution. For example, as part of the tobacco settlement, companies provided funds to tobacco-dependent states to help them diversify their local economies, but those funds have not always been used to good effect. The Trade Adjustment Act was intended to provide retraining for steel workers and others who lost their jobs due to international competition, but that program has never worked well for individual workers. Calling it a mixed bag would probably be generous. I think it’s safe to say that we’ve never had an industrial transition in this country that didn’t throw most workers under the bus while a few people got rich.

EN: Finally, who is going to pay for subsidizing and retraining coal industry workers? In your report, you state that coal companies and electric utilities should be held liable for those costs before saddling taxpayers with the bill. There have been a number of incidences in recent years where top executives at coal companies declaring bankruptcy have awarded themselves hundreds of thousands to millions of dollars in bonuses while gutting coal miner pensions. Their attitude is “take the money and run.”

JR: Yes, there are certainly some bad actors, vulture capitalists as some have called them. That’s the business model for coal companies: declare bankruptcy and get out of “liabilities,” defined as the commitment the companies made to cover worker pensions and health care as well as cleaning up the environmental mess they left behind. They are taking advantage of our weak bankruptcy laws, which favor creditors over workers.

Here’s a case in point: In the wake of the Blackjewel bankruptcy, coal miners in Kentucky sat on railroad tracks for months demanding the pay they already earned. The state even has a law that requires coal companies to post bonds to pay workers in the event of a payroll shortfall, but it has not enforced it.

Lawmakers need to close these loopholes and make sure that mining companies and utilities keep their promises to workers and clean up the environmental damage they caused. But ultimately taxpayers will have to underwrite at least some of the support we are recommending. Considering the generations of sacrifice that these workers and their families have made to keep our lights on for more than a century, it’s a reasonable price to pay.