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Wyoming’s Coal Miners Are Worthy of Better

April 08, 2016
Tom Sanzillo

In bluntly discussing the hundreds of layoffs in his state by Arch Coal and Peabody Energy, Wyoming Gov. Matt Mead showed admirable compassion last week, promptly deploying various agency heads who manage unemployment benefits, health care and worker training and rehiring.

But his was a voice in the wilderness. Conspicuously absent when the job cuts were announced were coal executives and other government officials.

John W. Eaves, the president and CEO of Arch Coal, was nowhere to be seen. Nor was Glenn Kellow, Peabody’s president and CEO. Missing also were members of Wyoming’s congressional delegation. Notably absent, too: Federal officials who are in a position to help the state through its energy-economy transition.

Mead made several laudable points, among them that coal miners have contributed significantly to the economy of Wyoming. Indeed, miners for generations have made sacrifices for the greater good of the entire country, yet the response in Wyoming—and elsewhere—has been inadequate.

Here’s why:

  • First, no preparation has been made for coal-industry layoffs, which come as no surprise (contrary to some narratives). The industry has been in decline for six years running, after all, plenty of time to lay the groundwork for this day. In fact to Mead’s discredit, he opted last week to say he would continue to fight EPA pollution regulations and maintain his campaign to promote new coal-export terminals, strategies that are a waste of time and resources and that aren’t going to help because they aren’t likely to work.
  • Second, a truly substantial response to coal industry job losses can be mounted only with teamwork created by states acting in concert with the federal government, local governments and the business community. Mead said his insurance commissioner and staff were relying on resources under the Affordable Care Act to help laid-off miners and their families. Laid-off workers can also take advantage of COBRA benefits to maintain their health coverage for a time, but those tend to be expensive, and a more helpful response on this point might include getting some set-aside money at the federal and state levels to pay COBRA premiums.
  • Third, direct assistance to businesses is lacking. Governor Mead did a good job talking about the ripple effect of the downturn in the coal industry on suppliers, restaurants and all the many small businesses that are the fabric of any coal-mining community. One of his people said the state would provide small-business health care assistance—which is good to hear but is hardly enough. The state ought to be looking at other, immediate short-term support for businesses and perhaps long-term cash assistance. Such assistance isn’t an original idea, by the way. It’s what the federal government does when it closes a military base and leaves an area in straits similar to those many coal communities now face.
  • Fourth, Governor Mead and his counterparts in local government across Wyoming have not come to terms yet with the negative fiscal impacts of the layoffs—what the decline in coal means for public coffers. This requires preparing, perhaps, for mine closings. Federal offset dollars for state and local budget relief are in order on this point. 
  • Fifth, the state has not stepped up to yet to enforce reclamation-bond requirements as a way to gain a clear, sober view of the risk on this front to taxpayers and to the environment. Neither Wyoming nor the federal government can continue to wink and nod at coal-company accounting gimmicks that will leave taxpayers on the hook for cleanup costs.

Governor Mead deserves high marks for his initial heartfelt response to coal-industry layoffs. But he can do more. He knows, for instance, that highly skilled workers in Gillette and other mining communities across Wyoming can be employed in other industries. He knows Wyoming’s economy is not totally dependent on coal. He should act on this knowledge and work more aggressively with local communities, with his own staff and with the federal government to help laid-off coal miners find new work.

Wyoming is the biggest coal-producing state in the country. Its people need and deserve help, and their situation is urgent. Governor Mead must spearhead a response that is worthy of those most affected.

Tom Sanzillo is IEEFA’s director of finance.

Tom Sanzillo

Tom Sanzillo is Director of Financial Analysis for IEEFA. He has produced influential studies on the oil, gas, petrochemical and coal sectors in the U.S. and internationally, including company and credit analyses, facility development, oil and gas reserves, stock and commodity market analysis, and public and private financial structures. He also examines such areas as community and shareholder activism, institutional investment, public subsidies and Puerto Rico’s energy economics.

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