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One industry, many benefits

Published by
World Coal,

John Pippy, Pennsylvania Coal Alliance, US.

Coal has a long history of driving Pennsylvania’s economy. In 2014, the Pennsylvania Coal Alliance worked with the Pennsylvania Economy League of Greater Pittsburgh to release a report detailing the multibillion dollar economic impact that coal has statewide. In March 2015, we released a new report that highlighted Greene and Washington Counties to illustrate the data on a local level.

Greene and Washington Counties are among the top coal-producing counties in the state with Pennsylvania ranking fourth nationally in coal production. Longwall mining is a very specific type of underground mining used to extract coal and it takes place only in Greene and Washington Counties. It produces 33,733,448 of the 57,967,127 short t – or 58% - of the bituminous coal mined in the state every year and ranks Greene County as the third highest coal-producing county in the nation.

The longwall mining industry contributes US$1.94 billion to the county’s economies: US$535 million in labour income; US$1.3 billion in property income; and more than US$81 million in indirect business taxes to Washington and Greene Counties.

From supporting the day-to-day county functions to infrastructure maintenance, including updates to water systems, bridges and roads, Greene County Commissioner Morris recently spoke of the vital role the taxes paid by the longwall mining industry play his county. Additionally, Washington County Commissioner Maggi referenced upcoming bridge updates that would not be possible without a strong local tax base. Human service programmes, parks and recreation and other quality of life initiatives also rely on this tax revenue.

The positive impact extends to the education sector as well. Upon reading the report, West Greene School District Superintendent Thelma Szarell said: “The West Greene School District is 256 square miles. The coal industry is critical to our existence, funding programmes and curriculum with the majority of our graduating students retaining jobs directly in coal mining or with a company that would not exist without the industry. The construction of the new West Greene Elementary School would not be possible without adequate tax dollars and our local taxpayers would be burdened with higher taxes without the contribution from the mining industry to offset the rate.“

Approximately 7350 full and part-time jobs in Greene and Washington Counties are provided by the longwall mining industry, making it the third largest employer. For each of those direct jobs, an additional 1.1 jobs are added indirectly in the counties. Those indirect jobs support entire industries like the Mining Products Division of Enersys in Washington, which manufactures and supplies batteries used in the mining process. The impact of the longwall mining industry extends well beyond Washington and Greene County.

As a whole, the coal industry in Pennsylvania provides US$4.5 billion annually to the state economy, employs over 36 000 and provides 40% of the Commonwealth’s electricity, keeping rates low for residents and businesses statewide.

Brian Turk, Director of Government and External Affairs at Alpha Natural Resources said: “Any public discussion about coal mining is incomplete without taking a moment to acknowledge the ‘people impact’ of our industry. Beyond the well-paying jobs provided, coal mining is the economic backbone of entire regions of our country. When the industry struggles, so do our communities – from the local car dealerships and grocers to the tax revenues that help build schools and hospitals.”

Because of vast role mining plays in both the local and state economies, we have been fortunate in Pennsylvania to have elected officials from both sides of the aisle who understand the positive far reach of the industry and have worked to protect it. Unfortunately, is it clear that on the federal level, the ‘people impact’ has not been a consideration given the Environmental Protection Agency’s (EPA) proposed regulations under the Clean Power Plan (CPP).

This past December, the comment period on the CPP closed after roughly 1.6 million comments were received. The Pennsylvania Coal Alliance, along with legislators, public policy makers, electric ratepayers and labourers statewide took to paper and email to submit comments of opposition.

The proposed plan would require that by 2030 Pennsylvania will reduce carbon emissions by 32% over 2012 levels. However, the proposed reduction and timeframe for compliance is unachievable given the absence of currently available commercial technology and is essentially a ban on the coal industry.

A recent study conducted by NERA Consulting showed that if the CPP is enacted as proposed, Pennsylvania’s electric rates would increase by up to 31%. Roughly 2.4 million low-income and middle-income families in Pennsylvania spend almost 20% of their after-tax income on energy. These families are most vulnerable to the cost of living and would bear the brunt of the rate increases.

Grid operators nationwide have conducted their own reports and publicly opposed the severe timeline for carbon emission reductions as proposed by the CPP for fear of blackouts and a lack of electric supply. In Pennsylvania, the PJM Interconnection grid, which provides power to over 60 million consumers with a capacity of 142 GW, experienced demand of 141 GW on 7 January 2014 – over a 99% grid utilisation rate. With the new and scheduled retirements of coal-fired plants, the need for reliable baseload electricity is more important than ever.

In Pennsylvania, we are fortunate to have a strong and diverse supply of domestic resources that keep our prices low and attract businesses and industries that would otherwise go overseas such as manufacturing.

In 2012, manufacturing employed 574 000 Pennsylvanians, accounting for 10% of the total workforce with average salaries of US$64 913 – 44% higher than non-manufacturing sectors. Without this industry, Pennsylvania’s economy would be decimated. And without a supply of low-cost, baseload electricity, Pennsylvania would lose manufacturing.

This past October, Pennsylvania joined other states in legislative action when H.B.2354 (Act 175), was signed into law allowing for the inclusion of the state legislature, educated parties and hearings to ensure all aspects and outcomes of the proposed plan are weighed by the appropriate parties.

All of Pennsylvania anxiously awaits the EPA’s June 2015 Plan reveal and trusts that their elected officials will consider all of the consequences to both the local and state economies of a federal environmental regulation; and respectively a forced state energy policy when working with DEP to draft the State Implementation Plan.

Written by John Pippy. Edited by .

About the author: John Pippy is the CEO of the Pennsylvanie Coal Alliance.

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