Report shows coal’s big role in northwest Colorado

Coal is a small part of Colorado’s economy as a whole, but nearly half of the statewide industry is based in far northwest Colorado, where it helps boost average household income higher than the average for the state as a whole.

Those are among the findings of a newly released study that evaluates the role the coal industry plays in Moffat, Rio Blanco and Routt counties. The region plans to use the study in weighing in on discussions and debate about future policies surrounding coal.

While coal mining directly accounts for 4.6 percent of the region’s total employees, at 1,545 jobs, it makes up more than 17 percent of the region’s total economic output, says the report, by Broomfield economist Gary Horvath. Another 571 people are directly employed in the region’s electrical power generation industry, which is supplied by locally generated coal, and that industry is directly responsible for another 16 percent of the region’s gross regional product.

The report found that thanks to high-paying coal jobs, the region’s average household income is $110,449, compared to $107,655 for the state as a whole. Coal mining wages average $79,655 for surface miners and $84,413 for underground miners in the region, a figure that includes overtime but not benefits.

“Average wages for coal mining are significantly higher than the average for the region, and I think that’s a major point,” Horvath said in an interview.

The study was conducted for the Craig/Moffat Economic Development Partnership, Rio Blanco County and the Steamboat Springs Economic Development Council. Primary funding came from the Economic Development Council of Colorado trade association, and the study also is sponsored by the Colorado Department of Labor and Employment.

“We wanted to be able to talk to the community and our (state) legislators and our federal legislators about how important the coal industry is to our economy,” said Audrey Danner, director of the Craig/Moffat Economic Development Partnership.

She said the region’s coal industry also is of statewide significance because of the wages, its sizable output and the product’s use in power generation in Colorado. With new policies and legislation being considered that could affect coal use, such as the Environmental Protection Agency’s proposal to cut carbon emissions from power generation to fight climate change, “we wanted solid numbers to talk about what is our economy based on” in terms of coal and electricity generation, Danner said.

The region is home to Peabody Energy’s Twentymile Mine in Routt County, Western Fuels Association’s Colowyo Mine in Moffat and Rio Blanco counties, Trapper Mining Inc.‘s Trapper Mine in Moffat County, and Blue Mountain Energy’s Deserado Mine in Rio Blanco County. Coal-fired power stations include Xcel Energy’s Hayden Generation Station in Routt County and the Tri-State Generation & Transmission Association’s Craig Station in Moffat County. The Deserado Mine supplies the Bonanza Plant in northeastern Utah, and that plant’s economic impacts weren’t included in the study.

Some other findings of note in the study:

■ Statewide, coal mining accounts for just 0.11 percent of Colorado’s total direct employment and 0.37 percent of the state’s direct economic output. But the region studied in Horvath’s report employs 44.5 percent of the statewide direct coal employees and accounts for 45.5 percent of statewide direct coal mining economic output. “We’re a significant coal producer in the state,” Danner said.

■  When indirect and induced jobs are included, coal accounts for about 3,150 total jobs in the region. It directly contributes $478.6 million to the region’s gross regional product of $2.76 billion. Coal’s total contribution is $701 million, when indirect and induced contributions are included. Indirect jobs and activity derive from related industries such as those in the coal industry supply chain, while induced contributions stem from things such as miners spending money for groceries or gasoline.

■ Coal accounts for $138.5 million in direct labor income in the region, and $214.4 million in total labor income.

■ Power generation in the region directly contributes $441.3 million to the gross regional product, and $519.3 million in total economic output, and accounts for 1,233 total jobs, including indirect and induced jobs. It results in $64.3 million in direct labor income and $93.1 million in total labor income.

Horvath’s study uses 2012 employment data, the most recent for which economic multipliers have been developed, he said. Employment numbers consist of wage and salary employees, and also sole proprietorship and partnership jobs.

Horvath said coal jobs are important because they are what are called primary jobs, in which at least half of what is produced is sold outside the community. That means a significant amount of money comes back to the community, in part through high-wage jobs, and trickles down through the economy.

He said as the Western Slope knows due to a history of booms and busts, extractive industries “are wonderful for communities, but at the same time, if there are problems, if there’s a downturn, it’s really bad.”

From Delta County, also a coal-mining hotspot, to northwest Colorado, “if suddenly, they said ‘no more coal,’ that would be disastrous,” he said.

He said it’s important for local leaders to do what they can to support such industries, but also find ways to diversify economies. The three northwest Colorado counties have only 188 total industries, while there are more than 400 statewide, he said.

Horvath believes that rural-oriented industries such as energy, agriculture and tourism “are all really important to the state in ways that we forget about in the metro areas.”

“We sometimes don’t remember what’s going on in rural counties, we’re not aware of what’s going on in rural counties, and rural counties can add a lot to what’s going on in the state as a whole,” he said.


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