West Virginia, a major producer of coal and natural gas, should take a cue from Washington, a state whose energy system is dominated by hydropower but whose past featured coal.
As we decarbonize, we must help communities in Appalachia, and fossil fuel-reliant communities everywhere, transition to cleaner resources in an equitable and affordable way. Centralia, Washington offers a model that Appalachian towns would be smart to replicate.
For decades, Centralia was a “coal town.” In the 1990s, its economy looked like that of an Appalachian coal town. Centralia saw no job growth. Then, in 2006, its largest employer, a coal mine, closed, eliminating 600 jobs. And in 2011, news came that its coal-fired power plant would retire by 2025.
Amid predictions of economic disaster, Centralia did something unique. It used $55 million in economic transition funding provided by TransAlta Corporation, the owner of the mine and power plant, to invest in energy efficiency upgrades, distributed energy generation and education. The results offer a potential roadmap for other coal-dependent communities.
According to a 2021 Ohio River Valley Institute study, between 2016 and 2019, Centralia added 2,800 new jobs. That 12% increase in employment was twice the rate of job growth nationally. Wages also rose 50% faster than they did nationally.
Still, some residents and businesses, particularly those directly affected by the layoffs, have struggled with the transition. That’s why the grants program supports those individuals with enhanced education and retraining benefits. Meanwhile, the economic impacts in the community as a whole are both remarkable and understandable.
Energy efficiency, distributed generation and education are “shovel ready” and labor-intensive. Work is done by local contractors and workers, keeping money in the community. The transition grants prompt recipients, who see improved returns on investments, to add their own funds to upgrade heating systems, replace doors and windows and insulate homes and buildings.
Finally, energy efficiency upgrades reduce utility bills. Even when grant funding ends in 2025, residents will continue to enjoy increased disposable income and improved quality of life.
Centralia’s investment in the clean energy transition offers a better roadmap for Appalachia than continued reliance on fossil fuels.
Since the steel industry collapsed in the 1980s, the upper Ohio River Valley, encompassing parts of Ohio, Pennsylvania and West Virginia, has seen jobs and its population decline.
The Appalachian shale gas boom of the last decade was advertised as an economic game-changer that would create hundreds of thousands of jobs.
But, while natural gas production skyrocketed, jobs actually declined in the region and populations are plummeting, according to a new report from the Ohio River Valley Institute. And the ”Appalachian Energy and Petrochemical Renaissance” promoted by the Trump administration never materialized.
Now residents are understandably worried that a clean energy transition will worsen their plight as remaining coal mines and power plants close. The Biden administration and the United States Energy Department are trying to address these concerns by encouraging power generators to take advantage of Inflation Reduction Act tax credits to retrofit coal and gas-fired plants for carbon capture and sequestration (CCS). It’s widely expected that the region will be selected by the Energy Department as a hydrogen hub, which would attract additional federal dollars.
But, in addition to environmental concerns about this mitigation-based approach to decarbonization, there are serious economic problems with the Ohio River Valley becoming a hydrogen and carbon capture hub.
First, retrofitting coal and gas-fired power plants with CCS would more than double their cost of generating electricity at a time when prices for renewable energy are already lower and continue to drop.
Second, expected increases in demand for hydrogen, if confined to applications that make economic sense, can be met at less cost and with even fewer emissions by hydrogen made with renewable energy, which will outcompete the region’s hydrogen made with natural gas and CCS.
Finally, a hydrogen and carbon capture hub is likely to have little impact on jobs and prosperity because the industries involved suffer from many of the same structural problems that prevented the natural gas boom from delivering job growth and economic development.
Still, many local and regional policymakers remain convinced by the false promise of fossil fuel-based economic recovery. They may neglect more effective strategies based on a real clean energy transition, such as the one deployed in Centralia, where a $55 million coal transition program has delivered more jobs and prosperity than the more than $200 billion invested by the oil and gas industry in Appalachia.
That vastly superior return on investment would be deeply appreciated by Appalachian residents and taxpayers. But it can only happen if the region’s policymakers set aside failed fossil fuel-based economic development strategies and embrace genuine, clean energy-based approaches like the Centralia model.