Boom and Bust
The story of coal mining in Illinois is, as it is in most places across the country and the globe, a story of continuing booms and busts. Economies dependent on coal once thrived during booms, but today’s method of mining relies more on machines than miners, and higher production doesn’t have the economic boom it once did.
Today, mining communities in central and southern Illinois are experiencing new job loss and economic downturns following a boom where Illinois coal mines produced nearly 58 million tons of coal in 2014. This represented a 58% increase in production over the prior 5 years. Today’s bust is not because the supply of coal has run out. In fact, Illinois has the highest reserves of economically-recoverable coal of any state east of the Mississippi. Instead, the reasons for decreased production and layoffs are because natural gas is cheap and competitive; electricity demand has remained stagnant; and banks are pulling financing.
Despite the recent upswing in use of renewable energy and natural gas, the United States still relies on coal to meet 33% of its electrical generation needs. The Energy Information Administration projects that coal will remain in our country’s portfolio for some time, even as we make the move from fossil fuels to greater energy efficiency and use of renewables like wind and solar.
Because the Illinois’ high-energy coal can be economically mined and modern pollution controls at power plants now allows the state’s high sulphur coal to be burned, we can expect mining to continue in Illinois. But mechanization has replaced the tens of thousands of coal mining jobs that once existed. Those jobs are not coming back, and communities now are facing the need to diversify their economies.
What’s Next for Communities
Eco-Justice Collaborative is part of a new movement, called the Community Futures Initiative (CFI). This state-wide initiative was created to promote a source of revenue for Illinois communities as they try to find a way to retain their families through good-paying jobs, quality education and health care, and infrastructure development, including repairs or upgrades to buildings; roads; and utilities.
CFI is building a grass roots movement that will educate and pressure elected officials to adopt a coal severance tax, the majority of which would go back to communities. Twenty-two of 25 coal-producing states have such a tax. Illinois is one of three that does not. A recent report by Downstream Strategies found a severance tax would not affect production or jobs. According to Downstream Strategies, a 5% tax on the value of coal mined in Illinois could have generated $141.5 million in annual revenue for state and local governments. By 2040, over $4.4 billion could be allocated.
This campaign now is in full swing, and representatives of CFI are working to get community support for an Illinois coal severance tax. We are recommending that funds collected from a 5% tax placed on the value of coal produced should be distributed equally to:
- Communities to help them diversify their economies.
- A permanent trust fund, where interest would accrue and could be disbursed to communities to fund projects in place (or planned) when coal production decreases.
- The State of Illinois, either directly to the general revenue fund, or to funds that would help communities making the transition from coal. Examples include: workforce training; economic development assistance, and environmental clean-up.