Claims that Trump’s rule re­peal saved 70,000 coal-min­ing jobs are overblown

The Washington Post Sunday - - POLITICS & THE NATION - GLENN KESSLER glenn.kessler@wash­post.com

“If we had not over­turned this rule, we were look­ing at nearly 70,000 jobs across the coun­try.”

— Uniden­ti­fied par­tic­i­pant in Pres­i­dent Trump’s sign­ing of H.J. Res­o­lu­tion 38, elim­i­nat­ing the Stream Pro­tec­tion Rule, Feb. 16, 2017

“I’m re­ally pleased that we re­pealed a reg­u­la­tion that was go­ing to be very, very dam­ag­ing to my state. I went to the White House this week to see him sign. The re­peal would have cost 77,000 jobs in the coal in­dus­try.”

— Sen. Rand Paul (R-Ky.), in­ter­view on ABC’s “This Week,” Feb. 19

The Stream Pro­tec­tion Rule (SPR) is one of those com­plex fed­eral reg­u­la­tions that can have an im­por­tant im­pact on par­tic­u­lar com­mu­ni­ties but may mean lit­tle to the rest of the coun­try.

The reg­u­la­tions, for­mu­lated late dur­ing the Obama ad­min­is­tra­tion, aimed to re­duce the ef­fect of coal min­ing on sur­face wa­ter, ground­wa­ter, fish and wildlife. The rule would have re­quired com­pa­nies to avoid min­ing prac­tices that per­ma­nently pol­lute streams and de­stroy drink­ing wa­ter sources; com­pa­nies would have needed to test and mon­i­tor the con­di­tion of streams be­fore, dur­ing and af­ter min­ing as well as re­store streams af­ter min­ing ac­tiv­i­ties are com­pleted.

That brief de­scrip­tion barely scratches the com­plex­ity of the rule, which when it was pro­posed in 2015 took up 262 pages in the Fed­eral Reg­is­ter, con­sist­ing of 150 pages of ex­plana­tory pre­am­ble and 112 pages of reg­u­la­tory text. The min­ing in­dus­try fought fiercely against it, say­ing it was un­nec­es­sary. Sur­rounded by law­mak­ers and min­ers, Pres­i­dent Trump on Feb. 16 blocked its im­ple­men­ta­tion — a re­ward to a com­mu­nity that had over­whelm­ingly sup­ported him in the 2016 elec­tion.

But did the pres­i­dent re­ally save 77,000 jobs?

The Facts

The 77,000 num­ber comes from an 82-page re­port on the pro­posed rule pre­pared in 2015 for the Na­tional Min­ing As­so­ci­a­tion (NMA) by Ram­boll En­v­i­ron, an en­vi­ron­men­tal, safety and health sci­ences con­sult­ing firm. So, al­ready caveat emp­tor, given that the re­port was re­leased by one of the lead­ing foes of the rule.

The 77,000 num­ber is the high-end es­ti­mate of di­rect min­ing jobs that the firm said would be lost as a re­sult of the rule. The low-end es­ti­mate was about 40,000 jobs. The re­port does not spec­ify a time pe­riod for the job loss, but Luke Popovich, an NMA spokesman, said most of the jobs would be lost over a 10-year pe­riod.

So, in ef­fect, the re­port con­cluded that at least 27 per­cent of the min­ing jobs would be lost as a re­sult of the rule. The re­port used as its base a to­tal of 103,312 em­ploy­ees, in­clud­ing 80,396 op­er­a­tor em­ploy­ees and 22,916 con­trac­tors. (The re­port says that is a 2013 fig­ure, but Popovich said that was a typo and should have said 2015.)

Now here’s the funny thing: The In­te­rior Depart­ment, which crafted the rule, in its own anal­y­sis pre­pared by In­dus­trial Eco­nom­ics, claimed that the fi­nal rule would re­sult in a net in­crease in em­ploy­ment. Although some jobs would be lost — just an av­er­age of 124 a year — the agency con­cluded that enough peo­ple would be hired for com­pli­ance that it would make up the dif­fer­ence. (Ini­tially, in the early years, about 500 jobs a year would be lost, but the hir­ing of com­pli­ance staff over time would help make up the dif­fer­ence, the re­port said.)

In­te­rior also con­cluded that the com­pli­ance costs would be about $80 mil­lion a year, but the costs would be passed on to con­sumers. The agency said coal pro­duc­tion would de­cline slightly, but it was due to de­cline any­way be­cause of mar­ket forces.

So what you have are du­el­ing re­ports, pro­duced by two con­sult­ing firms, reach­ing com­pletely op­po­site con­clu­sions. The In­te­rior re­port is based on a “model mine” ap­proach, on the the­ory that the 853 coal mines in the United States make a mine-by-mine anal­y­sis im­prac­ti­ca­ble. So the con­sul­tants tried to mimic min­ing in dif­fer­ent re­gions. The NMA re­port, by con­trast, was based on data col­lected from 36 coal mines, from firms said to rep­re­sent more than 66 per­cent of the coal pro­duc­tion in the United States.

One can see the pit­falls in either ap­proach. The In­te­rior anal­y­sis may not re­flect the real world. (We find it highly un­usual that a com­plex rule, re­flect­ing at least $80 mil­lion in reg­u­la­tory costs, would re­sult in lit­tle or no job loss.) But the NMA ap­proach re­lies on the tes­ti­mony of mine op­er­a­tors that may not be re­li­able, as the re­port con­cedes: “Be­cause the SPR as pro­posed is not fi­nal and does [sic] is sub­ject to much in­ter­pre­ta­tion, many of the re­spon­dents strug­gled to com­plete the anal­y­sis. In some cases, re­spon­dents con­cluded that they would have to shut down op­er­a­tions in or­der to com­ply with the rule.”

Mine op­er­a­tors would be more likely to of­fer the most ex­treme in­ter­pre­ta­tion of the im­pact of the rule, which prob­a­bly ac­counts for the high es­ti­mate that as many as 64 per­cent of coal jobs would be elim­i­nated.

It’s also im­por­tant to put th­ese num­bers in con­text. Min­ing jobs have been de­clin­ing at a rapid pace in re­cent years, mainly be­cause of a de­cline in de­mand be­cause of com­pe­ti­tion from lower-cost nat­u­ral gas. Ac­cord­ing to the NMA, this is the to­tal em­ploy­ment in the coal in­dus­try in re­cent years, based on an anal­y­sis of La­bor Depart­ment data. 2011: 143,437. 2012: 137,650. 2013: 123,259. 2014: 116,010. 2015: 102,804. 2016: 81,406 (pre­lim­i­nary). In other words, since 2011, coal jobs have de­clined by more than 40 per­cent, or 62,000 jobs. There’s lit­tle won­der that Trump’s fre­quent (and un­re­al­is­tic) prom­ise to re­store th­ese coal-min­ing jobs res­onated in coal coun­try.

The NMA re­port also ap­pears to have as­sumed that coal jobs would re­main steady at the 2015 level. But the En­ergy Depart­ment fore­casts a con­tin­u­ing de­cline in coal pro­duc­tion as coal-fired plants are re­placed by nat­u­ral-gas plants, as well as so­lar and wind power. Coal pro­duc­tion is pro­jected to de­cline about 26 per­cent by 2040, though that loss could be mit­i­gated if the Obama ad­min­is­tra­tion’s Clean Power Plan is put on hold.

The steep de­cline in coal jobs since 2015 has al­ready made the fig­ures in the NMA re­port out of date. Even if one ac­cepted the es­ti­mates in the NMA re­port, the pro­jected job losses, ad­justed for 2016 data, in­di­cate that a low of 22,000 jobs and a high of 52,000 jobs would have been af­fected by the reg­u­la­tion.

The Pinoc­chio Test

All too of­ten in Wash­ing­ton, num­bers of du­bi­ous prove­nance are cited with cer­ti­tude. The 77,000 fig­ure was a high es­ti­mate in a pro­jec­tion with a sub­stan­tial range. More­over, it was based on re­ports from a rel­a­tively small sam­ple of coal op­er­a­tors — with a vested in­ter­est in neg­a­tive re­sults — and re­flected an out­dated fig­ure for coal em­ploy­ment. The In­te­rior Depart­ment es­ti­mate sug­gest­ing an over­all job gain is equally du­bi­ous.

Law­mak­ers and coal in­dus­try of­fi­cials would have been on firmer ground if they had cited the lower es­ti­mate and used a per­cent­age, rather than a raw job num­ber based on the high es­ti­mate. (In other words, one could say that one study found that the rule was pro­jected to re­duce coal jobs by 25 per­cent.) The 77,000 fig­ure, at this point, is sim­ply not cred­i­ble and wor­thy of Three Pinoc­chios.

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