Despite Rhetoric, Coal Jobs Not Set to Increase in the Future

, senior energy analyst | January 26, 2018, 12:59 pm EST
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This post is a part of a series on Coal-in-Context

Given the administration’s rhetoric around coal, you’d think that the president sprinkles coal dust on his breakfast cereal each morning. That’s not true—well… at least as far as I know, anyway—but the problem is that there is a great deal of misinformation out there around coal (and honestly, on a whole lot of other issues too).

For example, the president and his senior appointees continually tout an increase in coal mining jobs over the last year as evidence that they are delivering on campaign promises to bring back the coal industry—such as EPA Administrator Scott Pruitt’s wildly wrong talking point about coal jobs last year.

Late last week, Reuters reported that while 2017 saw an increase of 771 coal mining jobs nationally, in fact most coal states actually saw coal mining jobs decline. And this week, a piece in the New York Times proclaims that coal’s decline continues, despite efforts by the administration to roll back environmental safeguards.

What do all these numbers really mean? Here at UCS, we believe that facts and evidence and science really matter, especially these days—and so today I’m kicking off a blog series that I like to call “Coal in Context” to offer some facts and perspective on coal. For this post, I’ll focus on jobs.

A person behind every number

First off, let me emphasize that tables and charts of jobs numbers can feel a bit de-humanizing. Ten jobs created might not sound like a lot, but it might well mean the world to one of those people that landed it!

So, in trying to put those 771 new jobs in context, I don’t mean to imply in any way that those additions aren’t meaningful. Coming from a coal mining family, I understand in my blood what those jobs mean—taking care of a family and providing new opportunities for your children.

Here, though, I want to look at the big picture questions—what do 771 new jobs mean in the context of the broader economy, and are they an indication of a new trend? Spoiler alert: there’s no evidence of a resurgence in the coal industry.

Employment in context

From a big picture perspective, is the administration succeeding in reviving the coal industry as they promised and frequently claim? One metric to evaluate that question (and there are others we’ll explore in this series) is jobs.

According to unreleased and preliminary data from the Department of Labor’s Mine Safety and Health Administration (MSHA), in 2017 net coal mining employment increased nationally by 771 jobs, to a total of 54,819 (an increase of 1.4 percent over the 2016 number). But as the Reuters piece points out, in most coal states the number of coal mining jobs actually declined.

For the top five states in terms of coal mining employment in 2016 (West Virginia, Kentucky, Wyoming, Pennsylvania, and Illinois) only West Virginia and Pennsylvania posted employment gains from 2016 to 2017. Notably, Pennsylvania’s gain will be erased early this year with the announcement of the closure of a mine in Greene County that will shed almost 400 jobs in the next few months—a painful reality for the rural community southwest of Pittsburgh, as the NYT article so vividly describes. Beyond the top five coal states, Virginia and Alabama also posted significant gains in coal mining employment (246 and 450 jobs, respectively).

Based on preliminary data from the Mine Safety and Health Administration, this chart shows the change in coal mining jobs by state from 2016 to 2017.

West Virginia far outpaced other states in terms of a net increase in coal jobs, at 1,345 jobs added in 2017. So, is the president correct when he claimed in a recent interview that, “I’m the one that saved coal. I’m the one that created jobs. You know West Virginia is doing fantastically now.”

First, there’s no evidence that this uptick will change the long-term trajectory of West Virginia’s coal mining jobs. West Virginia’s coal mining employment peaked in the middle of the last century, with around 130,000 jobs in 1940. Even with last year’s increase, the state’s total coal mining employment was still just 13,972—still just a shadow of what it once was.

Coal Mining Employment in West Virginia Since 1880. Data Sources: 1880 to 1982, West Virginia Office of Miners’ Health, Safety, and Training (http://www.wvminesafety.org/historicprod.htm); 1983 to 2015, MSHA data downloaded from OpenSourceCoal.org; 2016-2017, recent and unpublished data from MSHA.

Over the latter half of the last century, West Virginia’s employment numbers fell steadily, due to increasing mechanization of underground mines and a shift toward large scale mining operations out West. Further, in the last decade or so, cheap and abundant natural gas has steadily eaten away at coal’s market share overall. Electricity generation from coal stood at 51 percent in 2008, but by 2016 had fallen to 31 percent. During that time, the cost of producing energy from renewable sources like wind and solar also fell dramatically.

As much as we hear about coal jobs, you might think that it represents a sizable fraction of the West Virginia workforce. But if you look at the total number of people employed in 2016 in the state (the last year for which the Bureau of Economic Analysis has data)—892,900—the coal miners employed in 2016 represent just 1.4 percent of the state’s workforce. (It’s true that coal mining jobs help support jobs in other sectors of the economy, particularly in rural communities, but let’s save that for a future post.) According to West Virginia University’s Bureau of Business and Economic Research, which publishes the Business Outlook for 2018-2022, the state’s three largest economic sectors in 2016 were Government (20 percent); Trade, Transportation, and Utilities (20 percent); and Education and Health Services (18 percent). Natural Resources and Mining (a broader sector than coal alone that includes natural gas, for example) represented just 3 percent of the state’s economy in 2016.

And contrary to the president’s assertion about how fantastic West Virginia is now doing, the WVU report highlights a few critical issues facing the state, including the nation’s lowest labor force participation rate (53 percent), a declining and aging population, and improving health and education outcomes to make the state’s workforce more attractive to new businesses.

So why the increase?

Analysts who follow the industry agree that the uptick in coal production, which helped spur the increase in coal mining employment, had nothing to do with a change in federal policy. As this analysis shows, domestic coal consumption continued to decline last year. Domestic coal production increased because of a growth in exports and a decline in inventory draws. As the Rhodium Group puts it,

“A recovery in Asian coal demand, particularly for steel making, combined with supply cuts in China and Australia boosted global seaborne coal prices… This made US exports more economically viable, increasing Jan-Oct volumes 70% from the same period in 2016…”

The temporary coal supply disruption in Australia resulted from infrastructure damage due to Cyclone Debbie and led to China purchasing more coal from the United States in 2017 to make steel.

Surely the administration’s grand plan for increasing Appalachian coal mining jobs isn’t to promote Chinese steel production?

Economic models also suggest that natural gas prices are the main driver for coal’s economic competitiveness (or rather, lack thereof)—not environmental regulations. In another report, the Rhodium Group found that domestic coal consumption is expected to decline if natural gas prices remain near current levels or if renewable costs fall more quickly than expected—despite the administration’s plans to rollback Obama-era environmental standards. WVU projects that the recent uptick in coal jobs will come to an end, citing ongoing uncertainty about future coal use.

The bottom line

The reality is that a relatively small bump in coal mining employment does not suggest a major resurgence of the coal industry. It’s critical to put the numbers in context and understand the reasons behind the change in order to prepare for the future that’s actually to come. Sadly, this administration’s interest in reckoning with reality seems to be in short supply.

Still, there is hope. Folks in Coal Country understand that coal isn’t returning to its heyday anytime soon. Intrepid business leaders get that—and are hard at work creating over 100 jobs in the heart of Coal Country. Community leaders and folks all around the country are pushing Congress to pass the RECLAIM Act, which would free up existing money from the Abandoned Mine Lands fund and put people to work cleaning up old mine sites—with an emphasis on projects that support economic diversification. If the president really wants to help, this would be great place to start.

This is a series, so if you have ideas on other coal-related topics and questions that I might explore in future blog posts, please leave them in the comments!

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