How Government Rules Are Helping Create Coal Jobs

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Call off the last rites: the coal industry in the United States isn't quite on death's door. New data suggests that the industry has seen some recent growth — thanks in part to laws mandating cleaner air.

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Despite the amount of attention that's been paid to the Keystone XL pipeline, the heart of the political fight over the environment has been and continues to be the coal used to generate electricity. A third of all greenhouse gas emissions in the U.S. come from coal electricity production; coal energy production also releases soot, sulfur dioxide, and mercury pollution. Since the 1970s, the EPA has worked to tighten limits on these pollutants — effectively in the latter example, ineffectively in the former. Meanwhile, a mature coal industry is seeing production costs rise, as it becomes harder to find rich veins of coal. The combination of the two has resulted in several high profile coal company bankruptcies.

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Now, a bit of a bright spot. The Wall Street Journal reports that despite a drop in national coal production, there was a big increase in Illinois.

New technologies are the primary reason for the boom. The Midwest boasts easily accessible deposits of coal that tend to be thicker than the more depleted eastern coal fields. Mining companies long ignored coal in Illinois and surrounding states because of its high sulfur content, but with utilities adding new equipment called scrubbers that remove sulfur to meet emissions standards, they can burn Illinois Basin coal more efficiently.

In other words, this coal was readily accessible and in swollen seams, but it couldn't be extracted and burned in the United States because it emitted too many sulfur oxides. What changed were clean air laws. By mandating that electricity providers install technology to reduce the amount of sulfur that's emitted from smokestacks, the EPA inadvertently made Illinois' coal fields viable. These same fields were closed in the 1990s when the Clean Air Act was expanded to limit sulfur emissions; now, with the investment in what are known as "scrubbers," they can re-open. And as the Journal notes, "miners in the Illinois Basin are generally nonunion, which also keeps operating costs lower than in Appalachia" — the unions lost their members when the mines first closed.

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It's not only cleaner air technology that's bolstering the coal industry. International exports — increasingly to Asia — have allowed the industry to fill-in for the sales it's losing domestically, increasingly to natural gas. The Energy Information Administration shows that growth.

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There's at least one other way Appalachian coal companies are keeping margins low: they're avoiding having to pay fines levied by the government. The Cleveland Plain Dealer reported today on the extent to which companies avoid and delay money owed for violations, focusing specifically on Murray Energy of Ohio. The company paid a little less than two-thirds of what it owed the government in fines after being cited for violations at two mines. Murray Energy's CEO, Robert Murray, harshly criticized the president's "war on coal" during the 2012 presidential election, hosting a Mitt Romney rally for which workers lost a day's pay to attend.

The sort of regulation that Robert Murray lambasted on TV during the campaign — decreasing the nation's reliance on coal-powered electricity foremost among them — will certainly not always result in growths in the coal industry. But even Murray recognizes the value of reducing sulfur emissions: the Murray Energy website touts his recognition of the business opportunity in high-sulfur coal.