Recent years have not been good to the coal industry. Through the 20th century, the industry had a strong clamp on electricity generation with coal-fired power plants littering the US landscape. Electricity demand had been growing steadily, and coal executives were likely content.
But 2008 arrived. The recession surprised everyone and forced Americans to close their pocketbooks and conserve energy. Coal demand dropped suddenly and, although it regained pre-2008 levels in 2011, demand has remained relatively flat in the years since. At the same time, policy decisions have emphasized renewable energy and natural gas as an attempt to diversify the national energy portfolio and clean up our energy use (coal is the dirtiest fossil fuel). In addition, the finite quality of coal finally began to rear its head, as companies paid more to dig deeper into mines as easily accessed surface deposits became rare. As a result of these myriad forces, between 2008-2012, electrical energy generated from coal plants dropped 24%, natural gas generation jumped 40%, wind climbed a whopping 154%, and solar expanded 491%. And these trends show no sign of slowing! 18% of total coal capacity is expected to retire by 2020, whereas the natural gas and renewable boom continues to gain traction.
But how do these trends affect everyday people on the ground, trying to make a living? Is the decrease in coal demand costing jobs or are renewable industries compensating? These are the questions Haerer and Pratson answer in a recent paper in Energy Policy, with a unique focus on geographical changes in jobs in each industry. Their analysis reveals important trends, namely that large increases in natural gas and renewable jobs are not occurring in the same regions as losses in coal jobs. This disparity clarifies an important challenge for policymakers and officials – in a changing energy landscape, how can we help the old industries transition to the new to prevent cities supported by coal mining from turning into ghost towns?
For coal and natural gas, the authors use a model known as Economic Input Output-Life Cycle Assessment (EIO-LCA) to compare national hires with county-level specificity. This assessment tool tracks how changes in resource use affects jobs, environmental impact, and other aspects of the economy. The model takes as input a code corresponding to each job types to track in each industry of interest as well as an economic value in dollars for each. This data is not available for wind or solar, so the authors used employment data from the American Wind Energy Association and Solar Foundation. In the present study, the analysis only included operations and management positions, excluding construction and manufacturing jobs, because the latter are regularly outsourced, transient, or nomadic whereas the former are long-term positions that make up a larger percentage of total jobs in these industries.
The study analyzed two key markers of changes in each industry – power plant addition/retirement and job gain/loss. First, we look at changes in power plant development or retirement nationally across coal, natural gas, wind, and solar industries. The four US maps below outline each:The top left map shows retired coal plants in red and additions in green – coal plants are powering down throughout the upper Midwest and Eastern US, with West Virginia, Kentucky, Pennsylvania, and the Carolinas particularly affected. New power plants are only planned sporadically in the Midwest and South. Comparing these patterns to new natural gas facilities (top right) provides a clear visual representation of where energy production is heading. Natural gas plants are expanding along the Eastern coast, east of where coal plants are being shut down. These facilities must follow the location of shale deposits, so dense regions of increased facilities also pop up along the coast of California and in Texas.
Whereas coal and natural gas show both retirements and additions, solar and wind only show drastic increases in new plants across the country (bottom left and right, respectively). Solar is concentrated in the West and Southwest, where sun is guaranteed more days of the year, however an increase in facilities is seen even in the colder, cloudier Northeast. The largest increases in wind plants appears in the West and Midwest, where the Great Plains provide vast tracts of land suitable for large groups of turbines.
These power plant production patterns portend similar patterns in job changes between 2008-2012. Coal job gain/loss is shown here:Yellow to red regions show job loss where green indicates job gain (see legend). Again, dramatic job losses can be seen in West Virginia, Kentucky, and Pennsylvania, the heart of the coal industry. More losses occur in Utah and the Four Corners region in the West, with job gains only speckled across the country.
Natural gas shows job gain appearing in regions where new shale is found – the Marcellus Shale in the Northeast, the Permian Shale in Texas, and the Bakken Shale in the Dakotas (not pictured). However, both solar follows the same pattern seen from the the power plant production, with an explosion of jobs in the West and Midwest:Likewise, wind sees expanded jobs in the West and Midwest: Overall, the study predicts that coal lost 5 GW of energy production and 49,000 jobs between 2008-2012. During the same period, natural gas gained 46 GW of produciton and 94,000 jobs, and solar and wind combined to gain 79,000 jobs. Thus, from a national perspective, natural gas, solar, and wind have served to expand the economy and increase job opportunities. However, the local picture is more concerning. Since jobs in natural gas must follow the shale, opportunities leave coal-producing regions. Wind energy appears to boost employment in regions localized to the Great Plains and West. Solar, in theory, is possible anywhere, but the largest gains have been seen in the West and California, likely due to more progressive policies and renewable energy mandates.
The end result is that the Appalachian region, as well as locations in Wyoming and the West, are getting hit hard by this economic transition to diversified energy sources. Job losses in the coal industry are not being compensated in the same region by increases in natural gas or renewable energy jobs. This is key information for policymakers and government in that region – people in these regions are going to be left behind as we move to new sources of energy, so lawmakers must find ways to promote businesses to change direction.
As stated above, solar is in theory possible in any geographical region, so policy to promote photovoltaics in these industries along with programs to retrain workers could provide an economic boost to West Virginia, Kentucky, and nearby states. But, first, businespeople, lawmakers, and those involved in the coal industry have to accept these trends and prepare for change.
Haerer, D., & Pratson, L. (2015). Employment trends in the U.S. Electricity Sector, 2008–2012 Energy Policy, 82, 85-98 DOI: 10.1016/j.enpol.2015.03.006