Regional State of the State: Association Leaders Look to the Future

Recently, I spoke with the leaders of four of the nation’s state coal associations and asked them to discuss their experiences over the past few years, to assess the current status of the industry in their states and regions, and to share their views of the industry’s future strengths and opportunities.

Those interviewed included Phil Gonet, president of the Illinois Coal Association; Rachel Gleason, executive director of the Pennsylvania Coal Alliance; Bill Raney, president of the West Virginia Coal Association; and Travis Deti, executive director of the Wyoming Mining Association.

Headley: Prior to 2008-2009, what was your state’s level of coal production and employment? Has it recovered since the change in administrations?

Phil Gonet – Illinois may be the only major coal state that experienced production growth during the Obama years from 2008 to 2016. Illinois coal production increased over this time period by 32.2 percent compared to a decline of 37.9 percent in U.S. production.

In order to describe the current state of the Illinois coal industry and potential for the near term, it’s important to review the impact of the Clean Air Act amendments of 1990 on the industry. This federal law required power plants to drastically reduce sulfur dioxide (SO2) emissions.

Illinois coal is high in sulfur content. When the SO2 emission limits took effect, most of the investor-owned utilities with coal generation in Illinois switched to using low sulfur coal from Wyoming’s Powder River Basin (PRB) instead of installing scrubbers to use Illinois coal. Since the early 1990s, more than 50 million tons of PRB coal have been transported over 1,000 miles to be used each year in Illinois power plants.

From 1990 to 2003 Illinois coal production was cut in half and the industry lost two-thirds of the workforce. Illinois coal operators had to find markets out of state to survive. Coal production remained in the low 30 million tons per year level until 2011 when production hit 37.4 million tons. Production continued to increase, peaking at 57.8 million tons in 2014. However, the impact of the Obama MATS rule and other environmental regulations which are estimated to close over 400 units and over 75,000 mw of baseload power nationwide began to impact Illinois in 2015. Production declined 25 percent from the 2014 peak before slightly rebounding in 2017.