The recent layoffs by Arch Coal are bad news. They are additional evidence of the difficult economic straits the coal industry is in and provide further significant challenge to the economy and communities in Eastern Kentucky.
The reality is that the economics of coal are changing so much and so fast, it is time for a serious and forward-looking conversation. We must figure out new and innovative ways to move the region forward because the way we got here will not be the way we get out.
What we cannot do is ignore the signs of what is going on with the industry, holding on tightly to a sense of what was. Coal is important to the state. Coal jobs are important to people in the region. Thousands of people and communities have sacrificed for cheap electricity. But the signs clearly point to a lower-coal future, and it is critical that we start figuring out a new way. First, a review of the signs:
■ Natural gas prices are some of the lowest ever and are likely to stay low for some time, and coal from the west and the Illinois basin is cheap and increasingly competitive,
■ Diminishing reserves are making Central Appalachian coal more and more expensive to mine.
■ Aging coal-fired power plants across the country face expensive retrofits to meet longstanding clean air rules, and many are being retired.
All signs point to decline, and it is irresponsible to not prepare for an economic transition in the region.
U.S. Sen. Jay Rockefeller of West Virginia recently gave a speech on the Senate floor in which he described the coal transition and expressed his concern that the coal industry is spending too much time ignoring that reality by fighting the EPA instead of looking for new ways forward.
He said that "scare tactics are a cynical waste of time, money and worst of all coal miners' hopes. But sadly, these coal operators have closed themselves off from any other opposing voices and few dared to speak out for change — even though it's been staring them in the face for years."
As a state and a region, we have to do more to help our miners and communities transition to a different future. As a community economic developer, I can attest that economic development is difficult. And while there are many assets in the region, there are also many longstanding challenges. But we must focus less on ignoring or fighting the changing reality and more on developing solutions.
None of the solutions will be quick. All will require deeper and multiyear investment in the region. The following are some central ideas that should be pursued:
Create regional planning and funding infrastructure. We need a new and participatory body that can plan, implement, fund and evaluate economic development in the region. Tie it to the creation of a permanent fund using coal severance taxes, and we have a powerful new way to move forward.
Invest more in small business and entrepreneurship. We need more successful small businesses and more entrepreneurs with the potential to build larger businesses and create jobs. Building a more effective infrastructure to support entrepreneurs at all levels is key.
Support local leadership development and capacity building. Eastern Kentuckians must be central to solutions in the region. Building from and expanding existing efforts to support and involve local leaders in economic development is a central facet of a strong economy.
Build around economic sectors important to the region. We should create special support resources for key parts of the economy and communities — health care, tourism, child care, wood products, local foods, energy efficiency, housing — as all play important economic roles and could play a larger role with targeted support.
It is unlikely there will be any one solution to the long-standing economic problems in the region; we shouldn't waste time looking for a silver bullet, but work on finding silver BBs. And all of the above work only if we invest more in the basics — quality education, sound infrastructure, healthy families, a clean environment and the other elements of strong economies and communities.
But first, all of us, particularly our political leaders, have to acknowledge the reality in the region today and greatly expand our focus on solutions.