It's not like this anymore.

Photographer: Sasha/Getty Images

Coal's Itsy-Bitsy Comeback

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
Read More.
a | A

Amid a generally only OK jobs report, the coal mining comeback that began last fall continued in March, with the sector adding an estimated 100 jobs.

QuickTake Coal Power

Yeah, you read that right. A hundred -- from 50,200 to 50,300, seasonally adjusted. The overall employment increase since September is 1,700.

At Least It's Stopped Falling
Employment in coal mining, seasonally adjusted
 
Source: Bureau of Labor Statistics

Coal mining just isn't a very big employer in the U.S. anymore. Last week, the Washington Post's Christopher Ingraham pointed out that, even using an outdated (and thus larger) Census Bureau count of 76,572 coal mining jobs as of 2014, the industry employs fewer people than the fast-food chain Arby's. The current employment total, if one adds in the approximately 5,000 jobs in support activities for coal mining, puts the coal industry about on par with Morgan Stanley or Dollar Tree Inc.

That's not the end of coal mining's employment impact. The industry has a multiplier effect in which new jobs in the mines create other jobs in the neighborhood. Estimates of coal mining's multiplier vary, and they generally seem to rate it as smaller than the multiplier for other extractive industries and for manufacturing, but I think it's safe to say that every new coal mining job creates at least one other new job. Which brings us up to 200 or more new coal-related jobs in March, and a more impressive-sounding 3,400-plus since September.

Also, coal jobs aren't evenly distributed: they matter a lot more in some states than in others. Here are the biggest coal-producing states:

The Top Coal States
Production in short tons, 2015
 
Source: U.S. Energy Information Administration

And here are the states with the biggest number of coal mining jobs:

The Top Coal Jobs States
Employment in coal mining, 2015
 
Source: Bureau of Labor Statistics

Note the differences between the two charts. Wyoming is by far the country's biggest coal state, producing as much as the next seven added together. But as far as coal mining employment goes, it's an also-ran. That's because almost all of Wyoming's coal mining comes from surface mining, and surface mining is far less labor intensive than underground mining. Overall, surface mines produced two-thirds of the nation's coal in 2015 but accounted for just 40 percent of coal mining employment. 

I present all of this as context for President Donald Trump's pledge to bring coal jobs back by weakening environmental regulations. Last week, flanked by coal miners and coal executives in the White House, the president signed an executive order directing the Environmental Protection Agency to roll back the previous administration's Clean Power Plan, which would have imposed strict new carbon-emissions rules on coal-fired power plants. “My administration is putting an end to the war on coal,” he said.

This shift in policy surely will have some positive effect on coal mining employment. The question is how much, and whether it's worth it. The modest uptick in mining jobs since September of course predates the change, and seems to have a lot to do with a rebound in the price of metallurgical coal used in steelmaking, which is mined mainly in Appalachia. The vast majority of U.S. coal production goes to electricity production, and by far the largest share of that, as already noted, comes from Wyoming, where mining is much less labor-intensive. Also, coal has been losing ground in power generation to cheap, fracked natural gas, and that competition isn't going away. Could the coal industry create a few thousand more jobs? Sure. Tens of thousands seems like a stretch, though. Again, this just isn't a very big industry.

Still, jobs are jobs, and as somebody who works in an industry sub-sector (news syndicates) that employed just 12,190 people as of September, it seems churlish of me to dismiss coal mining just because it employs fewer people than, say, Bed, Bath and Beyond. The much bigger issue with coal is that those jobs come with significant environmental costs.

The latest estimate from the Clean Air Task Force is that particulate pollution from coal-fired power plants caused 7,500 premature deaths in the U.S. in 2014. That's down from 24,000 deaths a year in 2004, thanks to tighter regulation of sulfur dioxide and nitrogen oxide emissions from coal-fired plants. The Clean Air Task Force is an advocacy group focused on reducing pollution from America's coal-fired power plants, so you may choose to take those numbers with a grain of salt. But the basic point that coal is an especially dirty fuel is almost universally accepted. A 2011 study by economists Nicholas Z. Muller of Middlebury College and Robert Mendelsohn and William Nordhaus of Yale University concluded that coal-fired power generation caused 2.2 times the dollar value in gross external damages (mainly through sulfur dioxide emissions) that it generated in economic value added. That is, burning coal for power is a net minus for the economy.

That calculation doesn't even factor in the potential climate impact of carbon dioxide emissions from burning coal, which is what the now-doomed Clean Power Plan was aimed at. Include that and the ratio of damage to value from burning coal for electricity goes up to 2.8, according to the Muller-Mendelsohn-Nordhaus study. Numbers like that are of course full of assumptions and guesswork, and I get why actual jobs have more political salience than expert estimates of premature deaths and other environmental damage. But on the whole, the bargain here seems to be modest employment gains in exchange for uncertain but possibly much larger environmental costs. Which doesn't seem like a spectacular deal.

  1. Without the seasonal adjustments, the job gain was 200 in March and an identical 1,700 since September.

  2. This number isn't broken out in the monthly employment report, but is included in the Quarterly Census of Employment and Wages, which put it at 4,915 as of September.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net