Gillette Wyoming coal

Blackjewel closures bad, but not the worst, officials say

in Energy/News

By James Chilton, Cowboy State Daily

GILLETTE – It’s been nearly a month since Blackjewel LLC abruptly shuttered its coal production operations, locking some 600 Gillette-area miners out of the Eagle Butte and Belle Ayr coal mines. And as Blackjewel continues to hammer out its fate in U.S. Bankruptcy Court, Gillette searches for silver linings to this latest economic cumulonimbus.

For as threatening as the Blackjewel storm cloud may be, the city has seen worse; and not all that long ago, either. Mayor Louise Carter-King said that during the Peabody Energy and Arch Coal bankruptcy proceedings in 2016, oil and natural gas prices were also bottoming out, leaving displaced energy sector workers with few places to turn locally for employment.

“Three years ago oil was down, natural gas was down, coal was down. It was like a perfect storm and it hit us very hard,” Carter-King said. “This time it was more due to (Blackjewel’s) mismanagement rather than the underlying economy, because both of these mines were profitable.”

While she expects the mine layoffs to have a ripple effect on the city’s sales tax revenues, it will be some time before that impact is seen because state remittance of sales taxes are backdated by two months. But Carter-King said she doesn’t expect any impact to be especially long-lived this time around, thanks to a stronger job market that’s provided fall-back opportunities for those who can’t afford to wait for the mines to reopen.

“I know some employees are holding out for that, but those who can get jobs that are equal or better are jumping ship,” she said. “The good news is, a lot of people have been able to find jobs.”

Rick Mansheim with the Wyoming Department of Workforce Services said the DWS Employment and Training office in Gillette took immediate steps to get information out about resources available to the displaced miners, as well as to address some of their most urgent economic questions. In addition, DWS called upon its community and statewide partners to swiftly assemble a job fair that brought in employers from across Wyoming and the Mountain West.

“Five days after the (mine) closings, we had a big job fair at Gillette College where we had 40 employers, not just local, but from Colorado, Utah, Arizona, Montana,” Mansheim said. “They saw over 450 people in one day; and I know a good percentage of people were actually offered jobs that day. So if there’s a bright side at all to this layoff or whatever you want to term it, it’s the fact there were jobs available and a lot of these people were able to find employment relatively quickly.”

For the rest, Mansheim said DWS has been helping walk people through applying for unemployment benefits and ensuring they know how to maintain their health insurance coverage.

“A lot of these people have never gone through something like this, so we’re helping them understand the unemployment process – because it is a process, it’s not something where you just come in, type in your name and that’s it,” Mansheim said. “We’ll probably do another job fair if we hear something about whether the mines are going to be bringing people back or not, and we keep in contact with the city and the county to make sure we’re on the same page.”

City Communications Manager Geno Palazzari said Gillette has also been working with nonprofits and social service agencies to marshal assistance in the aftermath of the mine closures. One of the first calls, he said, was to the Food Bank of the Rockies to enlist the aid of that group’s mobile food pantry, which will set up at Family Life Church, 480 S. Highway 50, from 1 p.m. to 6 p.m. July 29 and Aug. 19.

“They’re already mobilizing to get trucks up here,” Palazzari said. “We’ve also reached out to some of the social service agencies in the community we fund … to make sure they didn’t need an advance on the funding we provide them to make sure they can make it through these times.”

While Blackjewel has been an important contributor to the city’s tax revenue base, Palazzari and Carter-King said they don’t expect these latest closures to impact city services. That’s mainly because the city has been extremely conservative with its spending since the 2016 downturn, when it had to cut nearly four dozen positions and $60 million out of its budget.

“Those were tough days. We had to lay off people and we looked at everything with a microscope,” Carter-King said. “Three years ago woke us up and taught us that we’ve got to be prepared for things like this.”

Prior to 2016, the city had enough cash in reserve to keep things running for 90 days without any new revenues. In 2016, the city council voted to increase that to 120 days, and then to 150 days in September 2018.

“There’s approximately $14 million (of operating reserves) budgeted for Fiscal Year 2020,” Carter-King said. “Now, if not another dime came into this city, we could make it 150 days.”

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