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Front Page » July 20, 2010 » Carbon County News » Coal's decline could press economy - again
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Coal's decline could press economy - again


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By JOHN SERFUSTINI
Sun Advocate Reporter

Waves of immigrants flooded into Carbon County a century ago to work the mines, but for most of the years since 1950, the county has been a net exporter of people.

If scenarios by the Utah Geologic Survey and analysis by the University of Utah's Bureau of Economic Research prove correct, there could be downward pressure on population again if coal production declines.

The head count has had its ups and downs over the past 60 years, but overall more people have left the county than have come in. From the historic high of 24,800 in 1950, the population fell to 15,750 by 1970 when coal markets sagged. It rebounded to 24,300 by 1982 during the heyday of power plant construction, only to fall back to 19,848 by 2008. Those figures come from the Utah Population Estimates Committee, and they understate the outflow.

Consider that births have always exceeded deaths, leading to a "natural increase" in population. But out-migration has more than offset the effect that natural increase. In 1984, for example, the population was 23,100 - down 1,000 from the year before. But during that same year there were 342 more births than deaths in the county, so the exodus out of the county was really 1,342.

That statistical point was made in the Bureau of Economic and Business Research report, The Structure and Economic Impact of Utah's Coal Industry. As reported earlier, that study considers what the impacts on the local and state economy would be if coal production drops anywhere from 50 to 95 percent over the next decade.

What has been good for coal has been good for the Carbon economy. According to the BEBR analysis, every job in the mines represents about 2.5 jobs here. In 2007, there were 770 miners directly employed. Mine support industries - manufacturing, sales and service - add hundreds more jobs indirectly employed by mining. Finally, those directly and indirectly involved in the mining industry spend their money here, supporting even more jobs in local business.

BEBR calculates that the impact of the mines was 1,957 jobs in 2007. Those jobs supported a population of 2,936. That's about one-seventh of the county's population. Earnings for that year were $62.6 million.

Most of that starts to go away in 10 years in the worst case scenario. Carbon County production begins to decline over time to just 500,000 tons per year from its current level of more than 10 million tons. If that is the case, then that total job impact of mining drops from 1,957 to only 701 by 2030.

At that point, there are fewer than 200 miners going underground. They'll still require supplies and services, so there will still be some jobs in those industries. And they'll still spend money, so they'll still contribute to the local economy. But the bad news is that total employment across the board would go down by more than 1,200 jobs. That includes 151 jobs in wholesale and retail trade, 149 jobs in services (ranging from arts and entertainment to health care) and 227 in state and local government.

Where mining generated enough income to support 2,936 people in 2007, that will drop to 2,344 by 2030, according to the analysis.

Under the Utah Geologic Survey's high scenario of 5.5 million tons by 2030, impacts are not nearly so drastic. The high forecast assumes that some technological fix will allow coal to continue to fuel electric power plants and that foreign markets expand. After peaking at 2,081 total employment in 2014, the decline is slow and gradual to 1,378 over the next 16 years.

The population supported by the industries could even be higher, according to the model. The assumption is that wages will go up in real terms as efficiency improves.

Aside from BEBR's analysis, history shows the county has endured boom-and-bust cycles before.

In the 1950s and '60s, coal was being replaced by substitute fuels. Railroads and ocean freighters scrapped their coal-stoked boilers for diesel power. Natural gas and heating oil replaced coal for heating urban homes and industries. Carbon County's population dropped.

The state and national economies were growing, however. Electric demand was surging. Coal was headed for a comeback. That resurgence was helped along by the Energy Crisis of the early 1970s. Congress passed the Energy Supply and Environmental Coordination Act, which prohibited oil or natural gas to be used in power plants that could use coal instead. Coal was once again booming. Utah coal, being high in energy and low in sulfur, was competitive in national and international markets. Carbon County's population grew.

So what caused the big population dip after 1983? That was when Utah Power finished construction of the Hunter 3 unit and all the construction workers living in the area began to pull out.

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July 20, 2010
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