clock menu more-arrow no yes

Filed under:

Utah's coal country: Long-term survival rests with diversification

SALT LAKE CITY — The Intermountain Power Plant built 30 years ago in Millard County was the biggest project ever constructed in Utah, generating $500 million over its history and creating an energy hub for the rural area.

It is also a great gobbler of coal, consuming 4.4 million tons in the last fiscal year, or roughly a third of Utah's production, to power Southern California homes and businesses.

In this community traditionally linked to farming and ranching, the two-unit, 1,800-megawatt power plant lit a fire under the economic prospects of the sparsely populated Millard County, growing more than 400 good jobs for local workers.

Just as the coal-fired power plant transformed this region of Utah, coal dependent communities are going through their own economic metamorphosis, as a new report points out, with pressure coming from dwindling jobs and declining production.

In its third installment in its series on coal, the Utah Foundation's report released Thursday details homegrown optimism that the fossil fuel will power homes for decades to come.

But the report also emphasizes that the communities that thrive long term will be those that aggressively embrace economic diversification, as opposed to towns that are pouting wallflowers late to the dance.

"I think it is important for rural Utah to realize they have a seat at the table," said Scott Barney, director of Millard County Economic Development.

"I think we need to shift our perspective a bit and see what our assets are. … It may be that the higher and better use for coal is actually not burning it," Barney said.

The coal industry has been undergoing a tectonic shift brought on by market forces that include cheap natural gas, efficiencies in production (leading to a need for fewer workers) and more-stringent environmental regulations leading to the early retirement of coal-fired power plants across the country.

As of 2015, the industry had seen reductions in its workforce by nearly 60 percent across the country. In Utah, the combination of coal mine closures and shuttered power plants have led to job losses in the thousands, with about 2,000 coal miners left in the field.

The resulting effect has been an unemployment rate in Utah's coal countries that is nearly 50 percent higher than Utah as a whole, the foundation's report notes.

Matt Hilburn, vice president of research and marketing for the Economic Development Corporation of Utah, said communities and employers need to work together to take advantage of those numbers.

"Everyone may not agree on coal, but what we all agree on is jobs," he said. "The unemployment rate provides a great opportunity. This is an available workforce. What that means is there is talent there."

The trick is giving rural communities more opportunity to attract viable employers with prospects for long-term living wage jobs.

Shawn Teigen, author of the report, notes some of that is already playing out in coal country, such as:

• Vernal is on the shortlist of a company that wants to build shipping containers, resulting in 200 potential new jobs

• Richfield is a strong contender for a tech support company that would add 130 jobs

• A third-party customer service and tech company is weighing several locations to boost an area's workforce by 40 and pay above minimum wage

Aside from state and federal efforts aimed at boosting rural economies suffering the effects of either the slowing coal industry or the recovering oil and gas market, Teigen's report notes there are several for-profit organizational support avenues to increase jobs in rural Utah.

Accelerant Business Solutions Provider, as an example, is a Utah company that focuses its efforts on rural communities. In partnership with another company, it established a pilot project in Price in 2016 that by a year later had brought on 60 workers.

The report also underscores the efforts to find new uses for coal that can keep mining jobs and ancillary industries going, including carbon fiber and transforming coal to liquids, as a plant proposes to do outside of Price.

Revolution Fuels would employ up to 60 people, but its permit from the Utah Division of Air Quality is under challenge by environmental groups.

Teigen said Utah's coal communities don't have to be another Youngstown, Ohio, a steel mill town that lost 40,000 good-paying jobs since the 1970s collapse of the steel industry. Nearly 40 percent of its residents continue to live in poverty, and more than a decade ago it decided to embrace its decline by deciding that being a smaller community isn't necessarily a bad thing.

"Utah communities don't have to follow (that) lead," the report notes. "Instead, these rural Utahns can look to themselves as to what they want to be."

Some of that introspection looms for Millard County in 2025, when it will get another chance to redefine itself as the power plant switches from coal to natural gas.

"They've been a great partner for the past 30 years. They have decided to move forward with new generation units, which they didn't have to, so we're appreciative of that," Barney said.

The new units burning natural gas will require a new natural gas line, which Barney said creates more opportunity in the region, including salt dome storage caverns that could make the Intermountain Power Plant capable of storing its fuel practically on-site.