Economy Resource Shift

The year: 2009. A Senator from Illinois named Barack Obama has just made history upon taking the presidential oath of office. The national economy is at a low point in the Great Recession. And the Pittsburgh Steelers are the first NFL team to win six Super Bowls.

Ten years later, as 2019 gives way to a new decade, the country is a radically different place, and the Ohio Valley is no exception.

The region’s economy improved, but more slowly and more modestly than for the nation as a whole. Coal, the Ohio Valley’s bedrock industry, declined sharply, bringing turmoil and uncertainty to the communities that had long depended on mining and burning coal for jobs. And an addiction crisis just coming into view in 2009 took a terrible toll on the region as it became a nationwide epidemic.

The ReSource team took a look at the trends that have shaped the region over the past ten years, and the data behind those trends in the Ohio Valley’s economy, environment and health.

Slow Growth

Population has grown across the region, but only Kentucky has seen a substantial increase since 2009. The Commonwealth has grown by about 4 percent. Ohio and West Virginia have seen slower population growth at about one percent.

Alexandra Kanik | Ohio Valley ReSource

A closer look on a county-by-county basis of the three states reveals a stark difference in population trends between rural and metro areas. Population loss is primarily in the rural regions, especially those that have been dependent on coal for employment. And population gains are primarily in the urban areas or those adjacent to cities.

Individual incomes have increased in Kentucky, Ohio and West Virginia, but they still lag behind the rest of the country. The type of work that offers the most money has shifted in some parts of the region and, as the coal industry continued to decline, other forms of energy arose.

All three states are behind the national average in wage growth. Of the three states, West Virginia saw the highest wage increases at 7.4 percent. Kentucky is increasing the slowest at 4.8 percent, and Ohio workers have seen a 6.3 percent increase from 2009 to 2018.

Alexandra Kanik | Ohio Valley ReSource

But an economist warned that those numbers have to be put in perspective.

University of Kentucky economist Michael Clark said he was surprised to see incomes growing more slowly in Kentucky than in West Virginia, where he says the state is facing an isolated recession.

“That’s really masking a lot of the problems that West Virginia has faced,” Clark said, “because they’ve been seeing a decrease in the number of jobs and a decrease in total wages.”

In West Virginia, the mining industry remained the employer that pays the most, even as that sector saw sharp declines in employment. In comparison, Kentucky moved from mining to finance and Ohio went from information to finance as the best-paying sectors.

Alexandra Kanik | Ohio Valley ReSource

Energy Shift 

It shouldn’t come as a surprise to anyone living in the Ohio Valley that the mining industry suffered losses over the past decade. Overall, the Ohio Valley experienced a 50 percent decrease in mining employment since 2009, and data from the federal Mine Safety and Health Administration show that between 2009 and 2018, the region’s coal production also fell by almost half, outpacing coal’s decline nationwide. Ohio has been hit hardest with a 68 percent decline in production, followed by Kentucky at 63 percent and West Virginia with a 30 percent decline.

Alexandra Kanik | Ohio Valley ReSource
Alexandra Kanik | Ohio Valley ReSource

While some dubbed the Obama administration’s focus on greenhouse gas emissions a “war on coal,” experts say the writing was already on the wall for coal’s decline.

The main reason: natural gas.

“When you look back at what did we know in 2009, what did things look like,  I think there was a clear indication that the decline of the coal industry was upon us,” said Jamie Van Nostrand, director of West Virginia University’s Center for Energy and Sustainable Development. “Fracking was really ramping up in the Marcellus shale and so you started to have natural-gas-generating plants displacing coal and a huge number of wells being drilled.”

EIA

According to the U.S. Energy Information Administration, the federal government’s independent, nonpartisan energy statistics arm, about 93 percent of mined coal is used for electric power generation.

Some regulations did increase the cost of burning coal, including the 2011 Mercury and Air Toxics Standards which caused some older coal plants to close rather than choosing to make costly pollution control upgrades. But Van Nostrand said the falling cost of natural gas and renewable energy are the main drivers of coal generation displacement seen over the last decade.

“I know the term is used too often, ‘a game-changer,’ but it really did fundamentally change how we generate electricity in the United States,” he said.

In addition, mining productivity was dropping “because basically all the cheap coal has already been extracted.”

Between 2010 and the first quarter of 2019, U.S. power companies announced the retirement of more than 546 coal-fired power units, totaling about 102 gigawatts of generating capacity nationwide.

EIA

In the Ohio Valley alone, 34 coal-burning facilities closed from 2009 to 2017.  And more are coming as electric utilities are moving up closure dates for more of their old coal burners. Communities in the Ohio Valley are expected to be hit especially hard as plant closures have major economic impacts on local communities.

Van Nostrand said he worries about how Ohio Valley political leaders are preparing, or rather how they are largely not. The region is hoping to attract jobs and new industries, but increasingly large companies demand access to renewable energy to power their facilities. Largely, Ohio Valley states are doubling down on coal and gas, while shading out renewable energy.

Energy costs in the Ohio Valley are going up too, which disproportionately affects low-income residents and is unappealing for businesses.

“It’s incumbent upon political leaders to help manage the states through this transition and to overcome this dependence upon coal, which does not serve the ratepayers or the general economy very well at all,” Van Nostrand said.

Coal Bankruptcies

The last decade also saw multiple waves of coal company bankruptcies. That included Ohio Valley giants Patriot Coal in 2012 and again in 2015, Alpha Natural Resources in 2015 and Arch Coal in 2016.

2019 marked another round of high-profile bankruptcies including West Virginia-based Blackjewel. The chaotic filing left more than 1,000 miners without their last paychecks for months. Dozens of miners took to the railroad tracks in Harlan County, Kentucky in protest.

The country’s largest privately-held coal company, Ohio’s Murray Energy, also filed for bankruptcy. Chapter 11 restructuring has allowed many companies to shed millions of dollars in healthcare, pension, black lung, and environmental obligations.

Just as the decade closed, however, there was a bright spot for retired union coal miners and their relatives. After nearly a decade of urgent advocacy, the United Mine Workers secured funding for the miners’ pensions and health benefits through the Bipartisan American Miners Act. That legislation was attached to the end of the year spending bill to fund the federal government.

Opioid Epidemic Peaks

Perhaps the biggest story in the Ohio Valley over the last decade has been the opioid crisis and its terrible impact on communities. After a decade of grim statistics about the mounting toll from overdose deaths, the latest figures indicate the death rates have finally peaked.

From 2017 to 2018 the Ohio Valley region saw about an 18 percent decline in overdose deaths. In West Virginia that was roughly a 6 percent decline. In Ohio the year-to-year death rate fell nearly 23 percent.

While that is welcome news, those lower annual overdose death rates for 2018 are still more than double what they were in 2009, and it is hard to fathom the profound grief and disruption the region has endured over the past decade.

Alexandra Kanik | Ohio Valley ReSource

Changing Attitudes

The unfortunate toll of the opioid crisis forced people to challenge their ideas about addiction. At the start of the decade, most people considered addiction to be a moral failing or a choice.

But the numbers regarding opioid deaths represent family, friends, and neighbors. It’s hard to find someone in the region who has not felt the impact of these deaths in some way.

Lyn O’Connell is the Associate Director of Addiction Sciences for Marshall Health in Huntington, West Virginia. She said public perception has started to catch up with the science that addiction is a disease, and that shift has aided efforts to combat the crisis.

“We see the federal government as being more willing to allocate funding, we see that state and local legislatures are more willing to pass laws that help people and we’ve seen communities be more willing to set up the necessary treatment and recovery support programs,” O’Connell said.

There’s still a way to go dismantling the stigma surrounding addiction, but O’Connell and others working to combat the crisis say it’s important.

The more people are accepting of those struggling with addiction, the more people get help and the fatal overdose rates continue to fall.

Health And Choice

The passage of the Affordable Care Act in 2010, followed by expanded access to Medicaid in some states, changed the healthcare landscape dramatically in the last decade. The ACA, also known as Obamacare, guaranteed a number of essential services, beginning with access to health insurance, and allowed people to gain insurance even if they had a pre-existing health condition, a frequent barrier with private insurers.

Jason Dunn is a policy analyst at Kentucky Voices for Health. He said the ripple effects of the ACA have been significant and, according to one study, some 700 lives have been saved in the state as people gained access to health care for the first time.

A key part of that is the expansion of Medicaid. Kentucky, West Virginia and Ohio have all expanded Medicaid, the federal health insurance program for people living in poverty.

The availability of health care is setting the stage for a more comprehensive approach to treatment that includes looking at social determinants of health like a clean environment and access to healthy food.

Dunn said Medicaid expansion has also been an important part of fighting the opioid epidemic. He said there has been a five-fold increase in substance abuse treatment because it is covered by Medicaid.

The last decade has also been a critical period for access to abortions, said Elizabeth Nash, senior state issues manager for the Guttmacher Institute, a national nonprofit research organization focused on reproductive rights.

Nearly half of all legislation aimed at restricting abortions has been approved over the last decade, according to the institute, many of them implementing longer waiting periods between the time a woman first visits a clinic to when the procedure is performed. According to the institute, Kentucky and West Virginia are among a handful of states with only one abortion clinic still in operation.

Hemp’s Comeback 

Ohio Valley’s farm country tracked some national trends over the decade, as smaller farms generally gave way to larger ones, amid a combination of low prices, overproduction, and a bruising trade war. The American Farm Bureau reported farm bankruptcies across the country increased 24 percent compared to last year.

However, the decade also brought a resurgence of a crop that used to have a strong foothold in the Ohio Valley: hemp.

Hemp is a variety of cannabis cultivated for its fiber, seed, and a chemical compound called cannabidiol, or CBD. The 2014 Farm Bill allowed states to create pilot programs to grow hemp for research purposes. Kentucky implemented a program in 2014, and West Virginia implemented a program in 2016. Ohio didn’t legalize the cultivation of hemp until 2019, under the latest farm bill that allowed states to legalize commercial hemp cultivation.

The regional hemp industry has boomed since the implementation of those programs, with much of the rising profits from the sale of CBD products.

Hemp advocates are waiting to hear from the U.S. Food and Drug Administration about how CBD will be regulated, potentially as a nutritional supplement that can be added into food, or potentially as a more-regulated pharmaceutical. Hemp farmers are also still learning how to grow the crop consistently and successfully.

Some Ohio Valley farmers have started growing hemp as a way to diversify their business and, perhaps, provide a new source of income for places hurt by the decline of other industries such as coal.

ReSource reporters Sydney Boles, Alexandra Kanik, Mary Meehan, Liam Niemeyer, Brittany Patterson and Aaron Payne all contributed to this story.  

CORRECTION: This story originally used the wrong first name for Kentucky Voices for Health analyst Jason Dunn. We regret the error. 

Based at WKYU in Bowling Green, KY, Becca Schimmel covers economy and infrastructure.