From the Wyoming Business Report:
According to a yet-to-be-released study by the University of Wyoming’s Center for Energy Economics and Public Policy, the Environmental Protection Agency’s planned carbon emissions standards for coal-fired power plants could cause a decline in Wyoming coal output by 20 to 45 percent in 2030.
University of Wyoming Professor Robert Godby presented the executive summary of the massive study to the Wyoming Infrastructure Authority (WIA) during their winter meeting. He said that when he first obtained the figures outlining the potential decline of Wyoming coal, “I felt like an astronomer, looking in the telescope and being the first one to see the asteroid heading towards earth.”
Since 1986, Wyoming has been the largest producer of coal in the United States, and for the past four decades coal has been the most stable source of state revenues. Yet despite coal’s importance to the state’s economy, few studies have been done to quantify the economic impact of the industry. Before Godby and company’s study, the most recent examination was done back in 2000.
The new study examined both the economic impact of coalmining itself and the ‘wider coal economy’ which takes into account all activity caused by the presence of coalmining, including rail shipping of coal and the coal-fired electrical power industry. The wider coal economy has a 14 percent share of the state’s gross economic product, while coalmining itself generated $1.3 billion, or 11.2 percent of all state revenues for fiscal year 2012, the most recent year that figures were available.
The study examined all of the influences on Wyoming coal production, which had already dropped 17 percent since 2008 due to falling natural gas prices, slow economic growth and the increase in the availability of renewable energy. The increasing depth of the coal deposits in the Powder River Basin, and the added expense of reaching them are also factors the study considered.
However, the study concluded that, “fundamental market factors pose a less serious threat to Wyoming coal production than those presented by potential carbon regulations.”
When the study began last May, the EPA’s proposed Clean Power Plan (also referred to as “111(d)” for the section of the Clean Air Act the rule- making falls under), was still in the development stages. The plan was supposed to be finalized in June. However on January 7, the EPA pushed the release of the final rules back to later this summer.
To define the potential impacts of 111(d), the study’s authors turned to the Rhodium Group, a New York-based consultancy who shared a set of proprietary simulations they developed to estimate the impact of the EPA’s proposed regulations on the national economy.
“Regardless of how the policy is implemented, imposition of proposed 111(d) rules results in a significant decline in projected Wyoming coal output across all cases,” the study summary read. “By 2030 these declines range from approximately 20 percent to 45 percent from 2012 levels, depending on the case considered.”
Even under the best circumstances, by 2025 Wyoming coal production is projected to fall by 32 percent from 2012 levels, with a total job loss across the state of 7,000.
“The effects of the regulations would be especially destructive to the Powder River Basin region, where almost one in ten jobs would be eliminated,” the study summary read.
Read the article.
- On February 8, 2015