The EPA’s rules, supporters say, will lead to more “green” jobs, such as making energy-efficient insulation or producing wind turbines and solar panels.
Still, coal jobs will take a hit.
Indiana ranks fourth for carbon dioxide emissions and has two of the nation’s top-polluting power plants.
“We will lose lots of coal production, and lots of coal jobs, and that will have a big impact on the Indiana counties that mine coal,” Hicks said.
A decade ago coal was mined in 19 of Indiana’s 92 counties, all along the state’s western border. It’s now concentrated in 10 mostly rural counties that historically have higher unemployment than the rest of the state. Here the loss of jobs is a rallying cry for opponents of the EPA’s plan — including Gov. Mike Pence.
Backed by the state’s biggest manufacturers, Pence says tougher standards will chill the state’s business climate by killing jobs and raising the price of electricity. He visited Bear Run in early July, when he told workers he stood with them in what he called the Obama administration’s “war on coal.”
Peabody Energy officials, reportedly counting on a $6 billion revenue stream from Bear Run, were glad to have him. They hope Pence’s warnings resonate beyond Indiana’s coal-producing counties and spur opposition.
The final carbon plan won’t go into effect until next year, and federal regulators are still in a public comment period that could alter the rules.
“We’ve got a tough story to tell,” said Keith Haley, who oversees Peabody’s Midwest operations, including Bear Run. “But the reality is that Indiana will be dependent on coal for a very long time.”
Booms and busts
Dugger’s existence has depended on coal for a long time. The town was named for the Dugger family that sunk the first mine in 1879. Within five years, Dugger was one of largest villages in eastern Sullivan County. The only place for 225 townspeople to shop was the store owned by the mining company, which paid workers in scrip.
By 1920, the area was dotted with mines, and the population peaked at more than 1,600.
There’s been a steady decline since. There’s not much else in the area to attract new residents. Sullivan County is mostly rural. After its two coal mines, the biggest employers are Hoosier Energy’s coal-fired power plant, a state prison, the county hospital and Wal-Mart.
Dugger, surrounded by old stripper pits now converted into lakes teeming with fish, is a 45-minute drive to the nearest interstate and the closest big city, Terre Haute.
Town Council President Larry Bedwell, a third-generation miner, said people understand the fluctuations of the coal industry. “Mining is nothing but booms and busts,” he said.
Bedwell retired in 2000 from Peabody Energy, as coal companies in Indiana were cutting back production and jettisoning union mines. Production in the Illinois Basin — which covers part of Indiana, Illinois and western Kentucky — shrank by more than one-third from 1990 to 2010 amid environmental concerns over the high sulfur content of its coal.
Anti-pollution technology changed that. A resurgence in Indiana coal stems from equipment mandated by an EPA rule in 2005 that required reductions in sulfur dioxide emissions. As some power plants installed sulfur “scrubbers” on their coal-fired boilers, which made the state’s easy-to-mine coal competitive again.
Peabody spent about $400 million to open Bear Run in May 2010, after announcing it had landed long-term contracts with Duke Energy and Hoosier Energy.
But the EPA’s plan to cut carbon emissions presents a new challenge. Dugger residents fear the quickest way for Indiana to meet the deadline is for its power plants to switch over natural gas, which produces much less carbon pollution.
Dr. Stephen Jay, of Indiana University’s School of Medicine, says the state must consider not just the fortunes of Dugger but the health of all its citizens. He worries that opponents of the EPA plan ignore evidence of coal’s damage. In 2006, he co-authored a study that calculated a $5 billion annual public health cost of burning coal. That included the effects of carbon emissions.
“The train has left the station on climate change. It’s real,” said Jay. “But we still have a lot of non-believers.”
But Jay said he also believes the state must invest in communities like Dugger that depend on the coal economy. “We need to be willing to spend the money on efforts that help miners and their communities move toward a more sustainable energy economy,” he said.
In 2004, he notes, the federal government agreed to make annual payments to tobacco farmers when it ended a quota and price support system that had been in existence since the Great Depression. The $10 billion program is funded by fees paid by tobacco companies.
Can’t afford to lose
Dugger’s concerns about its future aren’t just about jobs. Locals fear what could happen to their health care — and the community, itself.
Retired miners fear the EPA plan will push the nation’s biggest coal producers, like Peabody Energy, out of the United States. That would drain payments into the United Mine Workers’ health funds, which provide lifelong benefits to more 75,000 retired miners and their families.
“We’re worried that will close some of the black lung clinics,” said Cox, the retired miner and former UMW local leader. “We fought for those benefits and we can’t afford to lose them.”
Cox likens the loss of coal mining in Sullivan County to the loss of auto plants in other Indiana communities.
“What are they going to do? Go get a job Wal-Mart? There’s nothing wrong with a Wal-Mart job, but it’s not going to buy you a new car or let you build a nice house,” he said.
Fears of Dugger’s residents are projected onto other changes in town, including what appeared to be the imminent closing of their local schools, as part of a cost-cutting measures by district officials in the northern part of the county. The schools were saved when the Indiana Cyber Charter School, an online organization, agreed to partner with them to keep the schools open.
Bedwell called it a victory for his small town.
“You take a small town, if you lose any part of it, the body starts to die,” he said. “If you lose a school, you lose families who move away to be closer to their new school. If the jobs dry up, you lose people who move away to be closer to their new jobs. We lose either of those things, this town is going to die.”