Illinois coal’s last stand

It looks like a postapocalyptic landscape.

The people in this part of Harrisburg have disappeared, leaving their quaint, once-tidy homes behind only to be reclaimed by prairie grass and field mice. The cozy gazebos, children’s playground equipment, spacious porches, and basketball backstops that remain are cracked and peeling. Residents once enjoyed these amenities while gazing out at the rolling hills and lush forests of southern Illinois.

But that landscape has been replaced by huge gashes in the earth that reveal tumbled gray rocks, reddish soil, and the all-important seams of glistening black coal. The place now seems populated by a race of giant machines, massive yellow backhoes and dump trucks that ply the cluster of strip mines around Harrisburg and other small towns some 300 miles south of Chicago. Signs warn of the frequent blasting that has driven traumatized residents from homes on the perimeters of the mines. And waste from the mines is ubiquitous—sprawling, towering piles of it rise behind schools and the Cottage Grove Cemetery. Thick orange liquid oozes from the Willow Lake coal waste impoundment into a stream. And black coal dust coats cars and buildings in the still-populated areas just outside the footprint of the mines.

More than 200 coal-fired power plants nationwide have closed or have announced closures since 2010, including two shuttered in Chicago in 2012. And the nation’s largest coal companies have declared bankruptcy, as low natural gas prices, environmental regulations, and increasing amounts of renewable energy have turned coal from the bedrock of our country’s energy supply into an increasingly uneconomical power source.

But coal is deeply rooted in Illinois, on both the mining and electricity sides. And at places like the Eagle River and Rocky Branch Mines in southern Illinois, the industry still feels very much alive. One could say that coal is making its last stand in Illinois; and even as people bemoan its environmental and health effects, the prospect of its demise sparks fear and nostalgia.

Illinois is the first place coal was discovered by Europeans in North America, in 1673 along the Illinois River. Coal was once mined across the state, even in the Chicago region, hence place names like Coal City, Carbon Hill, and Carbondale. Today there are still 22 mines in operation, and Illinois is the country’s fifth-largest coal producer.

Illinois coal production increased to 59 million tons in 2015 from 33 million tons in 2010, though prices slumped for coal from the Illinois Basin—a geologic formation covering much of Illinois and parts of Indiana, Kentucky, and Tennessee—as coal prices plummeted nationwide. Illinois coal-mine employment has dropped even when production has risen, since modern technology requires fewer workers to extract coal.

There were 4,100 people employed in coal mining in Illinois at the beginning of 2015, according to the state’s Department of Natural Resources. Phil Gonet, president of the Illinois Coal Association, says that 732 jobs were lost last year, and another 600 layoffs have been announced for 2016, bringing the total below 3,000, with more layoffs likely to come. That’s compared to 10,000 Illinois coal miners in the mid-1980s and 50,000 in the 1930s.

“For some of these towns in southern Illinois that have a coal mine, that’s the only game in town,” says Gonet. “Coal miners are making $80,000 a year, and there are ancillary jobs that support the coal industry. If the coal mine closes, that means much more than the 200 or 300 jobs at the mine. It has a big impact throughout the area.”

That leaves residents of coal counties in a difficult situation, trying to demand environmental, economic, and labor protections from coal companies at the same time they fear the industry leaving or shrinking and taking jobs and taxes with it.

“Coal mining is all we know,” says Tom Vaughan, a county board member and former high school English teacher in Franklin County who, like his neighbors, grew up playing amidst the “gob piles” of coal-mine waste, burning coal to heat the home, and learning as a young boy not to “pee on a clinker” of spent coal fuel “because it smells really bad.”

“We’ve broken generations of men in the mines—they can’t lift their arms above their heads”—because of years of stress and injuries—”and they’re on oxygen,” Vaughn continues. “But they have a lot of respect, there’s a certain pride to it, a certain courage. There’s this feeling, this hope we’re going to bring it back. Because if the industry goes down, a lot of people go down with it.”

Only about a tenth of Illinois’s coal is used by power plants in-state. Illinois coal plants mostly import coal from Wyoming, which has lower energy content but less sulfur, burning more cleanly and allowing plants to meet state and federal clean air regulations even with outdated equipment. Since many power plants have installed pollution controls or will need to install them to meet upcoming regulatory deadlines, proponents of Illinois coal argue they can and should be using Illinois coal.

Most Illinois coal is exported to other states and sent abroad, as it can be easily shipped down the Mississippi River out to the Gulf of Mexico. China has been a hungry market for coal from the U.S., though demand there is dropping steeply as the economy slows and the country invests in renewable energy.

Illinois coal is significantly cheaper to mine, per amount of energy content, compared to coal from West Virginia and the Powder River Basin in Wyoming, which were responsible for 11 percent and 40 percent of U.S. coal production, respectively, in 2014. Illinois had 6 percent of the nation’s coal production that year.

“The one thing Illinois coal has going for it is our coal is easy to extract, and we have plenty of coal,” says Gonet. “Appalachia has been aggressively mining coal for a long time, so the low-hanging fruit is gone. We have a lot of easy coal to extract, so our coal companies are going to be the low-cost producers. And in a shrinking market, the low-cost producer is going to win.”

Illinois coal has become even cheaper and easier to extract with the advent of longwall mining, an underground mining technique in which huge machines essentially chew into coal seams, extracting the coal and letting the ground collapse behind them. This is much more efficient than the traditional “room and pillar” underground method, where miners left columns of earth and coal holding up the roof of the mine.

There is much opposition to longwall mining in downstate Illinois, even from the many citizens who support mining as a whole. Longwall requires significantly fewer employees than other types of mining. And it involves massive subsidence, causing the earth to drop many inches or even feet, with often devastating consequences for the homes and farmland on top of the mine.

In Hillsboro, a central Illinois farming town, Larry Schraut points out where the gravel road cutting a straight line across the fields of brown corn stalks dips down about four feet. About 1,500 feet farther south the land rises by the same amount. The field between the dip and the rise has pools of standing water. A flock of snow geese seems to be enjoying the water, but the pools threaten to drown Schraut’s crops. Such subsidence is expected and taken into account as part of longwall mining.

This is the Deer Run Mine, owned by the company Foresight Energy and its parent since a troubled merger, Murray Energy. Schraut’s fields are in the “panel” next in line for extraction, he explains as he examines the map showing the mine’s 17 numbered panels and the names of the people who own the surface above each section of minerals. In Illinois, as in many states, ownership of minerals below the ground is separate from ownership of the land above. Once the coal is carved out below Schraut’s land, it will subside up to six feet, by the company’s own estimates, he says. Schraut thinks this will ruin his crops.

“They will be flooded, no doubt about it,” he says. “I don’t know what we’re going to do. The water will be trapped in here, it has no way to get out. They can come in and sink your land and there’s nothing you can do about it.”

Once billed as one of the region’s most productive mines, Deer Run has hardly produced any coal for a year now. That’s because of a fire smoldering belowground that company officials have so far been unable to extinguish, even after trying to seal the mine, pumping nitrogen underground to try to starve the blaze of oxygen, and other measures. Mining experts say company officials likely don’t know where the fire is, but they know it exists because of elevated carbon monoxide levels that led federal regulators to bar workers from the mine. Meanwhile, Foresight is pushing forward in seeking permits for a 7,700-acre expansion of Deer Run.

Schraut and neighbors who’ve formed the group Citizens Against Longwall Mining stress that they support mining as a whole—in fact, they can’t imagine their region without it. Schraut himself used to work at a coal-fired power plant, which is visible just beyond his fields, smoke and steam billowing from its two stacks.

“We’ve got to have coal,” he says. “I just don’t like the methods of mining that are taking place now.”

Illinois is one of only three of the nation’s 25 coal-producing states that don’t have a “severance tax” requiring companies to pay a small portion of their profits to the state or local counties. A small but growing coalition of Illinois activists and civic watchdogs is pushing for a coal severance tax to be implemented here. An October study by the Chicago-based Center for Tax and Budget Accountability found that a severance tax similar to those in other coal states could raise more than $60 million a year, which could fund services and infrastructure in coal-producing counties.

The funds could help repair roads damaged by coal trucks or other impacts of mining, and could be invested to spark other types of economic development so counties aren’t so dependent on coal.

The funds might also be necessary for environmental remediation, some worry, since coal companies in bankruptcy might not be able to fulfill their promises to clean up mines once mining stops.

Peabody Energy, the world’s largest privately owned coal company, is headquartered in Saint Louis and operates multiple mines in Illinois. Like other coal companies nationwide, it has an arrangement called “self-bonding” under which it promises the government that it will have the future assets necessary to clean up the land it’s mined to approximate its state prior to mining.

But Peabody’s financial fortunes have plummeted in recent months, and on April 13 the company announced its filing for Chapter 11 bankruptcy. Environmental groups are demanding that Peabody be forced to put money aside for future cleanup; otherwise the responsibility could fall on the cash-strapped state government.

“Peabody’s financial condition speaks for itself,” said Howard Learner, executive director of the Environmental Law and Policy Center. “Peabody’s management has not navigated the energy market, where low natural gas prices have outcompeted coal and energy efficiency is holding down electricity demand in the U.S. while China’s economy grows at a less robust rate than previous years. The risk is that Peabody’s responsibility to clean up from its mining operations will be washed away in a bankruptcy proceeding and Illinois taxpayers will be left holding the financial bag.”

Coal companies and industry backers oppose both forcing companies to put up more money for future remediation and imposing a severance tax. Gonet argues that the latter would make it harder for Illinois coal to compete with nearby states without a severance tax—namely Kentucky and Indiana—where coal companies might choose to mine instead.

Meanwhile Peabody officials have said their operations meet the requirements under federal law for self-bonding, and say that despite their current troubles, in the future they’ll have adequate funds to clean up their mines. Peabody did not respond to requests for comment for this story.

In many states, particularly in the south, the same companies generate power and sell it to customers, and they charge the customers directly for the cost of making power and building and maintaining power plants. That’s how it worked in Illinois until deregulation in the late 1990s. Now, in Illinois as in other deregulated power states, utility companies like ComEd or alternative electricity suppliers sell electricity to customers, and those suppliers essentially buy power from different companies.

(An obscure agency called the Illinois Power Agency actually decides where ComEd and the downstate utility Ameren buy their power, an arrangement meant to prevent conflicts of interest in part since ComEd’s parent company, Exelon, owns the state’s six nuclear plants and other power-generating facilities.)

In deregulated states like Illinois, power is sold on an open market, mainly through “auctions” where it’s purchased to send to Illinois customers. Since the explosion of horizontal hydraulic fracturing, or “fracking,” natural gas has been so cheap that electricity generated by burning natural gas often outcompetes coal in the auctions. Wind power is also cheaper than coal-fired power. Meanwhile the lingering effects of the economic crisis and increasing energy efficiency measures have caused power demands to taper off.

All this means that in Illinois, energy produced by coal is much less lucrative on the auction block than it used to be. The outlook for coal became so grim in 2014 that the company Ameren actually paid the company Dynegy to take over five of its Illinois coal plants. In May, Dynegy announced its plans to close multiple Illinois coal plants with the power to generate 2,800 megawatts—about 30 percent of southern Illinois’s total generating capacity, according to the company.

In 2015, 38 percent of the electricity generated in Illinois came from coal, and 50 percent came from nuclear power, according to Energy Information Administration data. In 2002, by contrast, 46 percent of the electricity generated was from coal and 49 percent from nuclear. Exelon says its nuclear plants have also become less profitable, and it’s threatened to close several of them if the state legislature doesn’t pass a bill guaranteeing more profits for nuclear energy.

Many Illinois coal plants are facing deadlines to install different types of pollution control technology because of state agreements negotiated by former governor Rod Blagojevich and federal limits on emissions of mercury and other toxins. If the federal Clean Power Plan to reduce carbon dioxide emissions survives ongoing legal challenges, Illinois and other states will also have to reduce the amount of carbon dioxide released from power plants. That will likely mean some kind of “price” placed on carbon emissions, making coal-fired power even less competitive in the energy marketplace.

There was a time when much research and investment was poured into the concept of “clean coal,” new coal plants with cutting-edge technology to remove almost all the carbon dioxide and other pollution from the plant’s emissions. The idea was to capture the carbon dioxide that would normally be emitted and store it underground somewhere. But such “carbon capture and sequestration” has never been done on a commercial scale, and all indications are that it is just too cumbersome and expensive.

“For the foreseeable future, there will be no clean coal,” says Dave Lundy, an energy and government affairs consultant who formerly promoted a proposed “clean coal” plant operated by the company Tenaska Inc. in Taylorville, Illinois. “The economics were challenging even when natural gas prices were high. There’s no chance now unless something dramatic changes,” Lundy says.

Central Illinois was the proposed home of the landmark FutureGen plant, meant to be a zero-emissions coal plant employing carbon capture and sequestration. But after years of efforts by the U.S. Department of Energy and Illinois politicians including Barack Obama himself, in February 2015 the Obama administration canceled the FutureGen project.

Another massive so-called clean coal plant that was built in central Illinois, the Prairie State Generating Station, has been a financial and technological debacle.

Peabody was originally a majority owner of the plant, which burns coal from a nearby Peabody mine. The developers convinced leaders of numerous towns in Illinois, Missouri, Ohio, and other states to sign long-term contracts to buy power from the plant at rates that turned out to be far above market price, and to cover construction costs that ballooned far beyond original projections. As the plant’s finances deteriorated, Peabody unloaded its ownership interest. The U.S. Securities and Exchange Commission launched an investigation, lawsuits were filed, and towns remain desperate to get out of their contracts.

For more than a decade, neighborhood activists and even national and international environmental groups demanded that Chicago’s two coal plants—in Pilsen and Little Village—be shut down. An agreement was eventually negotiated by Mayor Rahm Emanuel to close the plants. The owner of the plants, the company Midwest Generation, ultimately shuttered them even before the agreement required, in 2012, because it was so hard for the plants to make money.

Midwest Generation ultimately declared bankruptcy, and in 2014 the company NRG bought its six Illinois coal plants, including the two defunct Chicago plants. The other plants in that group are also on shaky economic ground, and experts expect that several of them will close in coming years.

That prospect presents a mixed blessing for residents of Waukegan, the majority-Latino city of about 90,000 residents on the shore of Lake Michigan 40 miles north of Chicago. A coal plant built in the 1920s sits on the lakefront right by downtown, providing jobs and tax dollars but also pollution. The plant has never been issued an operating permit in compliance with the Clean Air Act of 1990, since legal challenges by environmental groups have been going on for years. Opponents, including the Sierra Club and Environmental Law and Policy Center, allege the plant is not in compliance with air pollution standards, and that its cooling system—sucking in, then discharging Lake Michigan water—kills scores of fish. There is also toxic coal ash stored on-site, which in the past was found to have leached into groundwater.

Illinois has 22 coal ash impoundments, the second-highest number in the nation according to a 2011 report by environmental experts. Environmental advocates are worried that as power plants close, communities will be left with deteriorating coal ash reservoirs that could leak or collapse. The state government is currently drafting rules governing coal ash storage, but the version proposed by the Illinois Environmental Protection Agency is far from adequate, advocates say.

Growing up in Waukegan, neither David Villalobos nor Julio Guzman knew that the hulking brick building with three smokestacks right by the popular local beach was a coal plant. Guzman finally learned about it after studying environmental geography at Colgate University in New York and then returning to his hometown.

Once Villalobos learned about the coal plant and the health risks it poses, he made it an issue in his successful race for city council last year. Villalobos and other civic leaders dream of seeing Waukegan’s quaint downtown revitalized and parks built on former industrial sites. But the massive coal plant on the lakefront could be a major impediment. “If I was an investor I wouldn’t invest next to a coal plant,” Guzman says.

At a hearing of the U.S. Commission on Civil Rights in Chicago in March, Waukegan residents described the coal plant as an environmental justice issue, just like the Chicago plants in the Pilsen and Little Village neighborhoods. The particulate matter, sulfur dioxide, and other emissions from coal plants are linked to significantly higher rates of asthma and respiratory and cardiac disease for surrounding residents. And working-class Latino residents like those who live near the Waukegan plant are statistically considered more vulnerable to health problems, and disproportionately lack access to quality health care.

About three years ago Waukegan religious leaders came together with other local residents and Sierra Club organizers from Chicago to found the Clean Power Lake County Campaign. The campaign is focusing both on the negative impacts of the coal plant, and what will happen when it closes, which Sierra Club organizer Christine Nannicelli describes as an “inevitability.”

They are demanding NRG set aside funding and come up with a plan to help the city build a solar farm or other clean energy or economic development to replace the tax base and jobs that will be lost with the plant. A poll taken earlier this year showed 70 percent of Lake County residents want clean energy to replace the coal plant.

“The fear is that the company is just going to walk away and we’ll be left with this site contaminated and sitting in limbo for decades,” said Villalobos, 34, standing on the beach and gesturing at the massive pile of coal beside the plant on a warm afternoon in mid-April. He would like to see a brewery built on the site of the coal plant, maybe even in the historic brick structure itself.

In a statement, NRG spokesman David Gaier says that the company has “been very upfront about our plans for the Illinois fleet and we’ve kept our promises to invest in and deliver massive environmental improvements.”

“I think Waukegan is in the midst of reimagining itself,” adds Guzman, 22, who is starting a job with an energy delivery company. “How cool would it be if it becomes a green city on the North Shore? We can no longer be the path of least resistance where companies can do whatever they want. This needs to be a viable community that makes its voice heard.”

Back in Harrisburg, John Simmons says the demise of the coal industry can’t come fast enough.

A longtime construction contractor, Simmons loved the solid redbrick house he built himself on a wide expanse of lawn. But the Eagle River strip mine opened across the street, and Simmons felt like he was constantly experiencing earthquakes from the blasting. That and the noise and dust took a serious toll on his health, he says, and he ended up leaving the home, selling it for far below what he considered its market value.

“The coal companies have hurt more than they’ve helped,” says Simmons, whose car sports a homemade decal reading IF YOU DON’T LIKE BREATHING, USE COAL.

“The coal companies say there is a war on coal. Actually it’s the other way around,” Simmons says. “They’re shortening people’s lives and getting away with it. They’ve got people so over the barrel for a job. And it’s sold to China, it’s not even all-American coal. I’d like to see them lose every dime they have. Not the miners, but the owners.”  v