Consol Energy Inc.’s shift from coal miner to natural-gas producer has pleased investors and kept the company out of bankruptcy. But it has come with a human cost.
Consol employs about a third of the roughly 8,900 workers that were on its payroll at the start of 2013, before the Pittsburgh-area company began selling off its mines, according to securities filings. Three years ago, nearly a third of its workers were United Mine Workers of America members. Now, none are in the union.
Though gas drilling is labor intensive at the onset, fewer workers are needed at production sites once wells are drilled and pipelines are built. That is very different from mines, which require hundreds or thousands of employees working for years to extract coal.
While some bottom-rung jobs on a drilling site might be filled with former coal miners, many positions on a drilling crew are highly technical. “It’s a very different skill set,” saidDavid Khani, Consol’s chief financial officer.
That trend has played out on a broader scale throughout Appalachia, where thousands of mining jobs have disappeared as the region has transitioned from Coal Country to Gas Land.
When David Baer was laid off last year from an $80,000-a-year coal-mining job with a Consol rival in southwest Pennsylvania, he sought work in the area’s booming gas business, figuring there would be plenty of openings.
“The only local blue-collar workers they were hiring were truck drivers,” he said. “I don’t have the right license.”
Miners who have managed to find work at drilling sites aren’t likely to be paid as highly as they were in the mines. “You’re looking at $15 an hour without any benefits, instead of $30 an hour with benefits,” said Ed Yankovich, a United Mine Workers official. “You dig the well and turn the tap on, and that doesn’t employ anybody.”
Some of the hottest drilling areas have been the hardest hit.
Greene County in Pennsylvania’s southwest corner, for example, boasts some of the most prolific gas wells that have ever have been drilled. The largest of them, named Scotts Run 591340 after the historic coal field that sparked a regional energy boom after World War I, produced so much gas last year that prices for the fuel plummeted as traders worried the gusher heralded more market-swamping supply. Consol’s operations, both its remaining mines and many of its gas wells, are located there.
Yet Greene County lacks the look of an energy boomtown. The poverty rate is about 15% and recent mine closures have eliminated another 1,700 jobs.
“The economy in Greene County is so sick it belongs in the ICU,” said Robbie Matesic, the county’s economic development chief.
http://www.wsj.com/articles/the-human-cost-of-consol-energys-shift-from-coal-to-gas-1481115601