bankruptcy – Just Transition Initiative

Summary

This case study examines whether attitudes toward the U.S. energy transition and just transitions changed following the bankruptcy and closure of two large coal mines in 2019 in the Powder River Basin (PRB) in Wyoming. PBR, the largest coal-mining region in the United States, is home to highly productive and environmentally sustainable mechanized mining and lucrative mining jobs.

The author sets out to empirically determine whether conditions exist that allow for decreased opposition to the transition and increased support for government intervention. The analysis relies on interviews from 13 local individuals, including elected officials, advocates, government officials, a local reporter, and coal industry professionals—but no coal industry workers, as they declined to be interviewed.

The interviews suggest the sudden closure of two mines reinforced negative perceptions toward the energy transition. In fact, there is strong support for continuing to develop the coal mining industry, with advocates claiming that the less invasive mechanized mining used in the region means that PRB coal is an environmentally sustainable option. The transition remains heavily contested in the area because of the strong economic impact of the coal industry on the PRB and the deep cultural ties to mining in the area. Additionally, because of its remoteness and distance from transportation hubs, there is little impetus for economic diversification in the PRB.

Summary

This report provides an analysis of the U.S. coal sector transformation over the last decade. It describes the decline of U.S. coal production after 2008 due to unfavorable market dynamics and a changing federal regulatory environment. It then discusses the shale gas revolution and the expansion of renewable sources of energy, which created competition with alternative fuels in utility sectors.

The report focuses on Obama-era environmental regulations, which had a significant impact on U.S. coal production between 2014 and 2016. The Obama administration’s decarbonization efforts, which set limits on carbon dioxide and other greenhouse gas emissions, led to a decline in domestic demand for coal. Moreover, the federal extension of renewables tax credits enabled wind and solar to become competitive in the energy market.

This report examines recent distributional impacts of the coal sector transition and discusses the various policy measures that were introduced, including their successes and their failures. The author argues that the Trump administration’s rollback of environmental regulations and tax cuts for coal companies will not be enough to revive the coal sector and emphasizes the need to manage impacts on coal communities.