“I felt like an astronomer, looking in the telescope and being the first one to see the asteroid heading towards earth,” University of Wyoming Professor Robert Godby said when presenting the executive summary of the study to the Wyoming Infrastructure Authority.
The study summary even stated that the EPA’s regulations have been more damaging than fundamental market forces – the supply glut which has caused coal prices to fall.
Wyoming, the country’s biggest coal producer since 1986, generated $US1.3 billion or 11.2% of all state revenues in the 2012 fiscal year alone, the most recent year that figures were available. The wider coal economy has a 14% share of the state’s gross economic product.
The study that reveals the looming devastation is the first of any significance done to quantify the economic impact of the industry since at least 2000.
Falling natural gas prices, slow economic growth and the increase in the availability of renewables – another big push of the Obama administration – are seen as the primary causes of Wyoming coal production plummeting by 17% since 2008, though the increasing depth of the Powder River Basin’s coal deposits and the added costs of reaching them haven’t helped the situation.
“Fundamental market factors pose a less serious threat to Wyoming coal production than those presented by potential carbon regulations,” the report said.
When the study began last May, the EPA’s proposed Clean Power Plan – also referred to as “111(d)” for the section under which the Clean Air Act the rule-making – was still in the development stages.
Though the EPA’s plan was originally slated to be finalised in June, the agency last month pushed the release of the final rules back to later this North American summer.
To define the potential impacts of 111(d), the study’s authors used New York consultancy Rhodium Group, which shared a set of proprietary simulations developed to estimate the impact of the EPA’s proposed regulations on the national economy.
“Regardless of how the policy is implemented, imposition of proposed 111(d) rules results in a significant decline in projected Wyoming coal output across all cases,” the study summary said.
“By 2030 these declines range from approximately 20% to 45% from 2012 levels, depending on the case considered.”
Even under the best circumstances, by 2025 Wyoming coal production is forecast to fall by 32% from 2012 levels, with a total job loss across the state of 7000.
“The effects of the regulations would be especially destructive to the Powder River Basin region, where almost one in ten jobs would be eliminated,” the study summary said.
