An official with the Federal Reserve recently made this rosy prediction: the jobless rate could dip below six percent this year. But there are still pockets of double-digit unemployment around the country. Take eastern Kentucky, where layoffs in the coal industry have helped push the jobless rate to 16 percent in some places.
Some point the finger at what they call President Obama’s “War on Coal.” “I blame him for trying to regulate coal fired power plants,” says 30-year-old Ryan Trent, a laid-off underground miner from Busy, Kentucky. “Because if it weren’t for that, we’d still have jobs.”
Certainly, the EPA’s crackdown on power plant emissions and mountaintop removal means fewer coal jobs in eastern Kentucky. The area has lost 40 percent of its coal-related jobs in just the last two years, acccording to Jason Bailey, director of the Kentucky Center for Economic Policy.
Yet Appalachian coal would still be at a disadvantage, according to Michael Dudas, managing director at Sterne, Agee in New York. “The cost to mine the coal in Wyoming is $10 a ton," he says. “The cost to mine that coal in eastern Kentucky can range from the low to mid-40s to upwards of $70 a ton.”
One reason it costs more to mine in eastern Kentucky is that coal companies have mined the mountains there for well over a century. They’ve already exhausted the easy coal. What’s left takes more work to get at.
“I don’t hardly see how there can be any more coal in these mountains," says Lee Sexton, 86, a legendary banjo player who retired from mining decades ago because of black lung. "There been so much of it took out, y’know.”
East Kentucky coal is also now competing against higher-sulfur coal from the Illinois Basin. That cheaper coal was a problem for utilities trying to meet federal clean air standards, but once many power plants invested in expensive scrubbers to “clean” the sulfur out, it gained a foothold in the marketplace.
Greg Pauley, president and COO of Kentucky Power, says his company will be burning less coal in the future, wherever it comes from. “As the cost of using coal continues to rise, we go away from that," he says. "And what do we go away to? Right now we go to gas.”
The EPA’s upcoming carbon pollution standards mean burning coal will cost more. Bill Bissett, president of the Kentucky Coal Association, believes eastern Kentucky coal will “continued to be mined for generations to come,” but the industry will play a smaller role in the region’s economy.
"Chances are," he says, "companies will be more privately owned, less multinational in footprint, and they’ll likely be taking more advantage of the spot markets than long term contracts, which can create uncertainty but I think at the same time it still provides livelihoods and puts food on people’s tables.”
Dee Davis, founder of the Center for Rural Strategies in Whitesburg, Kentucky, says it’s now up to east Kentuckians to figure out an economy beyond coal. “Coal is our history. Coal is our heritage. It’s been one pathway into the middle class for a lot of families. It’s been a friend, but it’s not our future.”
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