Plans for laid off coal miners uncertain

James Fenton
A dump truck moves down a service road on Jan. 13 at the San Juan Mine in Waterflow

WATERFLOW — While the steep decline in crude oil and natural gas prices has caused the hemorrhage of hundreds of local jobs in the oil and gas industry, another sector of regional energy-based jobs — coal mining — is expected to experience similar, although smaller, losses in the near future.

The San Juan Mine operation in Waterflow is pictured in January.

On Dec. 16, state regulators approved a plan by Public Service Company of New Mexico, or PNM, the majority utility owner of San Juan Generating Station, to shut down two of the coal-fired power plant's generating units. The plan was a compromise that allowed the plant to comply with federal haze regulations while allowing it to continue operations. Retirement of Units No. 2 and No. 3 is scheduled for completion by Dec. 31, 2017.

PNM officials have said they anticipate no layoffs at the plant. However, some jobs will be eliminated by attrition.

Entrance portals for the San Juan Mine are visible on Jan. 13 as seen from a service road at the mine in Waterflow

However, San Juan Mine, which employs nearly 480 workers and is the plant's sole supplier of coal, may need to cut workers after 2017 if the plant only requires half the tonnage it uses today.

BHP Billiton New Mexico Coal is currently transferring ownership of the underground mine to Colorado-based Westmoreland Coal Company.

Dan Ware, BHP spokesman, said the transfer will be concluded by Feb. 1.

According to data supplied by Ware, San Juan Mine employs 479 miners who work in various shifts scheduled to keep the operation running between 7 a.m. and 1 a.m. Ware said that BHP Billiton reduced its 2015 costs and spending by "multiple millions of dollars, which was key to the stipulation approval (that) extended the life of the mine and sustained good-paying mining jobs until 2022."

"BHP (Billiton New Mexico Coal) has worked tirelessly with (Westmoreland) to ensure a smooth transaction and the retention of as many jobs as possible," Ware said in an email.

Joe Micheletti, executive vice president of operations for Englewood, Colo.,-based Westmoreland, said the company "was excited" to become owners of San Juan Mine, but declined to talk about workforce levels before the transaction was finalized.

"We’re excited about the quality of people — they’re skilled miners," he said. "We need to get our boots on the ground and get the deal done. We feel a discussion is most appropriate after we’ve taken ownership. Transactions of this size are complicated. We communicate with our employees first.

"We want to be an integral part of the community," he said.

Regarding the transfer of ownership, Micheletti said "the sooner, the better." He declined to confirm the Feb. 1 transaction date supplied by BHP Billiton.

Coal moves on a conveyor belt and is deposited at a collection site on Jan. 13 at the San Juan Mine in Waterflow.

The San Juan Generating Station workforce will be downsized over the next five years, PNM officials said.

But those jobs would only be closed positions.

PNM officials expect to cut approximately 150 jobs that will be lost through attrition — when someone retires or leaves the company, the position is closed — and have insisted that there will be no layoffs at the plant. Those lost jobs will reduce the workforce at the plant to about 200, but the process of closing those positions could take several years after the two units are shutdown date to be finalized, PNM officials said.

But because electricity generated at the plant will drop by half after the end of 2017, there will a need for fewer workers at the San Juan Mine.

David Van Winkle, who testified before the state Public Regulation Commission as an expert in the PNM case, said he had heard nothing from mining companies regarding plans to help workers who lose their jobs. Van Winkle represented Santa Fe-based New Energy Economy, a group that promotes alternative energy sources such as wind and solar.

"The mine is actually around 200 people they will lose because of lower production levels to support the power plant," Van Winkle said in a phone interview. "The mining company, whether it is BHP or Westmoreland, they have not said a word about retraining or economic development for those workers. It's like it's not BHP's problem because they're selling the mine and it's not Westmoreland's problem because they haven't quite become owners of the mine."

Some of the 365 coal miners at Navajo Mine in nearby Nenahnezad may be at risk, too.

In December, Navajo transitional Energy Company, or NTEC, entered into a 15-year contract with the Bisti Fuels Co. — a subsidiary of the North American Coal Corp. — to operate Navajo Mine after BHP Billiton ends its operating contract there in December 2016.

Ware said no mining jobs at Navajo Mine are at risk. Those miners work for BHP Billiton until the end of the year, Ware said.

Erny Zah, NTEC spokesman, said, so far, no jobs are at risk.

"Our goal is to keep the workforce intact as much as possible," Zah said in a phone interview. "We want the mine to maintain the same amount of workers there. Operations are going to continue just as they are today. That’s our goal. We do have a new operator that will have the ability to operate the mine as efficiently as they see fit. Anytime there’s transition there is always going to be some amount of change, but we’re trying to keep the change to a minimum when it comes to our workers."

Any decisions regarding miners at Navajo Mine is "still months out," Zah said.

Whether coal miners are looking for other industries to work in today or anticipating a job change down the road, some relief might be available from area economic development and San Juan College officials.

In October, the college received a $1.4 million grant to help retrain displaced coal miners and workers in other industries, including oil and gas, from the Obama administration’s Partnership for Opportunity and Workforce and Economic Revitalization, or POWER, program.

Matt S. Erskine – deputy assistant secretary of commerce for economic development and chief operating officer of the U.S. Economic Development Administration, which is the primary agency for the POWER initiative – visited the school in December to spread the word that those federal dollars are meant to help displaced coal miners, while also assisting workers in other fossil fuel-based industries and boosting local economies.

"Waning reliance on coal-fired power generation is taking a toll in regions like this where plant shutdowns strike a blow to the economy," Erskine said at the college during his visit.

Also, Four Corners Economic Development's new series of Opportunity Expos are designed to help displaced or underemployed workers in the oil and gas, construction, coal and other industries find connections with employers who have openings.

Ray Hagerman, the economic development group's CEO, said the first Opportunity Expo held at San Juan College's Quality Center for Business on Jan. 9 attracted more than 350 displaced workers.

"We are planning to do another similar event in February," Hagerman said. "This time we will include folks who are looking for workers in La Plata County in Colorado. A lot of construction workers are needed up there. We're hoping to cure up the skill gaps when it comes to these workers."

Hagerman said he wasn't sure about the number of coal miners in need of job help, but said his organization is geared toward helping anyone in the area who is looking for retraining or a job in a related field.

"The job skills may not translate one-to-one, and the pay scales may not line up exactly, but at least we're trying to connect those who have lost opportunity with opportunities," Hagerman said. "That's one of the primary functions of what we need to be — to connect the people who need it with the one s who have it."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.