A bipartisan way forward for American coalfield communities

Coalfield communities in the desert Southwest, in the high plains of Montana and Wyoming, and in the hills and hollows of Appalachia are in dire need of reinvestment as the U.S. coal industry continues its precipitous decline.

Rep. Tom O’Halleran (D-Ariz.) has made a good first step in drafting a bill that speaks to the situation on a regional basis. It suggests several ways for the federal government to move quickly to help communities that are being hit hard economically by the impending retirement of Navajo Generating Station and the recent shutdown of the Kayenta Mine that supplied it.

With the closures, some 800 jobs are being lost in a chronically high-employment region that can ill afford such a setback. In towns like Page and Kayenta, Ariz., plant and mine jobs have been the lifeblood of thousands of local households and small businesses since the mid-1970s.

Just as important, local tax bases risk being decimated.

The Navajo Nation is looking at a 23 percent revenue reduction. The Hopi government has depended on Kayenta mining royalties for 85 percent of its revenue. Non-tribal governments in northeastern Arizona will also be dealt a harsh blow. Coconino County, for instance, stands to lose $6 million annually, money that is crucial for operating local public schools, a community college and vocational training programs. Some of the revenue from the Navajo Generating Station, which will close shortly before Christmas, supports critical public-health services as well as fire and flood control.

O’Halleran’s bill is modeled loosely after programs that have been run for years by the Department of Defense Office of Economic Adjustment (DOD-OEA), set up in the 1980s to ease economic transition in places harshly affected by a series of military base closings around the country.

The bill aims to do for coalfield communities what the DOD did for former military communities. It would create an Office of Economic Adjustment within the Interior Department that would provide federal matching funds for 90 percent of the cost of coalfield economic redevelopment and 70 percent toward the cost of restoring infrastructure. It would also provide payments to tribal and local governments for revenues lost due to plant and mine closures under a schedule that would replace 80 percent of losses initially, with annual decreases of 10 percentage points, ending in 20 percent in the seventh and last year of the program.

The proposed legislation, written specifically for northeastern Arizona, suggests a template for broader application nationally. Such an initiative would be especially valuable to people in Kentucky and West Virginia and in the Powder River Basin of Montana and Wyoming, regions that are being disproportionately punished as demand for coal recedes, thanks mostly to the rise of lower-priced fracked gas and affordable renewable energy.

Coalfield communities deeply deserve our support. The coal industry during the 20th century drove an expansion of the U.S. economy that included the post-war booms of the 1950s and the 1970s and that brought national prosperity even as mining communities lagged. Federal policy facilitated the expansion of coal-fired electricity, and the government has a fundamental responsibility to help wind down an industry facing obsolescence—just as the Department of Defense took up the cause of communities affected by the closure of military bases.

While national politics of the moment have created a bitter divide on many issues, this is one on which both sides can agree. After all, Republicans and Democrats alike live in communities that are being severely tested by the decline of coal.

Key to the success of any such initiative will be congressional appropriations that support the repurposing of old plant sites and mines and that promote local economic diversification and growth.

One stark legacy today of the American coal industry—in places as demographically disparate as Arizona, Kentucky and Wyoming—is that its decline is leaving behind whole swaths of the country that lack economic alternatives to coal mining or coal-fired electricity generation.

Given a chance, however, these communities can and should be allowed to recover. The O’Halleran plan is a timely step in the right direction, and one that deserves urgent bipartisan backing.

Karl Cates is a Santa Fe-based research consultant for the Institute for Energy Economics and Financial Analysis. Tony Skrelunas is president of the Black Mesa Water Coalition in northeastern Arizona.