A US moratorium on coal-leasing spells doom for these mining towns

Like a trusty pickup truck, Gillette has bounced through tough times before and pulled through, thanks to coal.

Lately the bumps for an industry that's brought wealth and jobs to this town are getting bigger — bankruptcies of major producers, pollution rules that have made burning coal more expensive and the decline of a once-promising export market.

Now, another threat has struck coal's remaining U.S. stronghold: A potential end to relatively easy and cheap access to billions of tons of the fuel held in publicly-owned reserves across the West.

President Barack Obama's administration has ordered a three-year moratorium on sales of federal coal reserves, and it's putting a rare mood on folks in Gillette, a ranching-turned-energy town of 32,000: pessimism.

"Most of the time it comes back. This time, I don't know," said Bobbie Garcia, watching her daughter summit a two-story climbing structure at the town's $53 million recreation center largely built with coal money.

Until recently, the Powder River Basin of Wyoming and Montana remained a rare bright spot for the industry. Even as Appalachian mines shut down and cheap natural gas started crowding out coal as a power plant fuel, economies of scale kept the region rumbling.

Massive strip mines sprawled across tens of thousands of acres, much of it in the Thunder Basin National Grassland, produce roughly 40 percent of the nation's supply of the fuel.

For Gillette and other communities, that means more than 7,000 mining industry jobs. And not just fly-by-night, roughneck gigs, but the sort that sustain families year after year, pointed out Michael Von Flatern, a state senator who has lived in Gillette since the early 1970s.

"I cannot picture myself in Gillette without a coal mine," Von Flatern said. "That's a big part of it, the steadiness of it."

Coal's significance isn't easily overlooked here. Mining equipment businesses, offering everything from generators to front-end loaders for rent or sale, line the southern approach into Gillette on Wyoming 59 like a vast aisle of life-sized toys for boys.

Parking fine collection boxes downtown proclaim Gillette the "Energy Capitol of the Nation." Orange clouds of toxic gas released by mine blasting smudge the distant horizon.

Along with oil and gas revenues, coal has brought money for the state and local governments to build top-of-the-line schools and the rec center, which features a 200-meter indoor track and an aquatic center with a 3-meter diving platform.

Signs of economic troubles first appeared a few years ago, when drilling for natural gas trapped in water-saturated coal seams went bust. Thousands of wells were idled as companies shifted focus to fracking for gas in Texas and the Northeast.

Source: Business Insider