After More Mine Layoffs, Pondering What's Next For Colorado Coal Country

Oct 31, 2014

A coal mine in Delta County announced Wednesday it is laying off 150 workers, over 40 percent of its workforce. The Bowie #2 mine layoffs follow the shutdown one year ago of another area mine, which laid off nearly 300 workers.

Colorado's 12 coal mines produced almost 29 million short tons of coal a year, according to 2012 figures from the Energy Information Administration [.pdf]. These latest layoffs are part of a downturn in coal's fortunes, which could continue to affect rural areas of the state that depend on coal for high-paying jobs. 

"Coal production in Colorado hit its highest level in 2004, with coal production reaching about 40 million tons. It has fallen by about 40 percent since then," said Stuart Sanderson, president of the Colorado Mining Association.

The Bowie layoffs came as the company lost a contract for 250,000 tons of coal with the Tennessee Valley Authority, which found a cheaper source for that coal, a TVA official said.

In Delta County, which has many workers employed in three area mines, the layoffs have been "devastating across the board for the entire community," said Trish Thibodo, executive director of Delta County Economic Development.

"We've lost 60 percent of our mining jobs in just one year."

While losing 150 jobs may seem like a small number to those in urban areas, Thibodo compared it, from a per-capita perspective, to Denver losing 10,000 jobs overnight.

Coal mine jobs are also some of the highest paying in the county, with wages starting in the neighborhood of $70,000 a year, no college education necessary.

Her group, using grant money they received following the 2013 layoffs, is working to plan some economic alternatives for the county, to lessen the impact of future coal cuts.

"We have to look at multiple levels of diversification so we can make our economy more resilient," she said.

Four of Colorado's other coal mines are concentrated in the northern part of the state, in Rio Blanco, Moffat, and Jackson Counties, with a few others sprinkled in the state's southern reaches.

Coal's Fortunes Change With Natural Gas, Climate Concerns

Typically, about two-thirds of Colorado coal has been sent out of state, often eastward. That's because it has a lower sulfur content and is cleaner burning, and mixed with Eastern coal in power plants allowed them to burn more cleanly.

A coal train runs through Denver. Two-thirds of the coal produced in Colorado is shipped out of state.
Credit Joshua Schnable / Flickr-Creative Commons

But many say coal's fortunes are changing, at least in the United States. One reason is a cheap, abundant supply of natural gas, which can replace coal in power plants.

A second is a growing concern about climate change, with many states and now the U.S. Environmental Protection Agency setting targets for reducing greenhouse gas emissions. Since coal-fired power plants produce a lot of these, utilities like Xcel in Colorado are even transitioning some of their coal power plants to ones that run on natural gas.

Due to the state's Clean Air Clean Jobs Act, which aims to convert coal power plants to cleaner energy sources, "about a third of Xcel Energy's coal generating capacity will either be shut down by 2017 or converted to natural gas," said the mining association's Sanderson, predicting that 4 million tons of coal production in Colorado will be affected by that switch.

Sanderson's group is a loud critic of the Colorado act's impacts as well as plans by the U.S. EPA to implement a Clean Power Plan -- comments are being accepted on that plan until Dec. 1, 2014.

One hope for coal mines, however, is to export their product overseas. While national coal production has dipped slightly in recent years, internationally, coal production reached record levels in 2013. For developing countries, the fuel is a cheap, efficient way to power growth.

Sanderson is cautiously optimistic about his industry's ability to take up the national slack in coal demand with international sales.

"I think that there is some real potential for selling coal outside of the United States. But I think the challenge that we are going to face is being able to develop those markets and sell sufficient quantity of our tonnage to offset these terrible cuts that we are going to see at home."

For the rural Colorado counties that depend on coal as an economic driver, the answer to this question could decide their future.