Economy

Fighting to save Colorado mining town

In a place where coal is king and provides good-paying jobs, an uncertain future looms as a major mine closes

The Oxbow Coal Mine in Somerset, Colo. has been one of the nation's most productive coal mines since 2003.
RJ Sangosti/The Denver Post/Getty Images

PAONIA, Colo. — Driving over McClure Pass in October reveals a sea of colors. Golden aspens blend with green firs on the hillsides. Above them, the first snows cover mountain peaks. Orange-clad hunters camp in the forest alongside the highway.

But arrive in tiny Somerset, 9 miles from Paonia, and coal black is the color. Above ground, elaborate equipment resembles an amusement park roller coaster, but the passenger is coal, low in sulfur and mercury, to be loaded onto rail cars.

Two mines operate in Somerset, with a third down the road in Bowie. At the beginning of the year, the mines employed some 1,000 people, most of whom live in Delta County, which has a total population just over 30,000.

But on Oct. 1, the Elk Creek Mine in Somerset let go 142 workers after an underground fire closed off much of the coal-mining operation.

Those layoffs, combined with uncertainty surrounding the coal-mining industry, have people in Paonia and the rest of Delta County feeling nervous. Coal-mining jobs average more than $100,000 in salary and benefits. The median household income in the county is only $41,856, compared with $57,685 for the rest of Colorado.

“If the coal mines shut down here, I think this valley will be a ghost valley,” said Gara Cristando, owner of Kut & Klip Barbers & Beauty on Grand Avenue in Paonia. “It’s not only the coal miners — we rely on their wives, their kids.”

A history of mining coal

The web of coal connections extends virtually everywhere in Paonia, even to Brad Harding, president of First Colorado National Bank. Harding grew up in Paonia and paid his way through college by working at the coal mines during the summer.

“It was very, very good for me,” he said. “Collectively, they’re the largest employer in the county.”

Drive east from Paonia, and the sign along Colorado Highway 133 welcoming people to Somerset reads, “Coal Mining Town Since 1896.” Scott Morley drives past the sign on the way to and from work at the West Elk Mine, up the hill from Elk Creek. He’s worked there for 32 years.

“I would like to get 10 more years,” said Morley, 60. “The likelihood of that is not very good.”

Despite a stellar safety record — it recently exceeded 2 million hours without an accident — even the West Elk mine faces uncertainty. Federal clean-air regulations are reducing the number of coal-powered energy plants, thus the declining demand for coal.

The intersection of 3rd and Grand streets in Paonia, Colo.
The intersection of Third and Grand streets in Paonia, Colo.
Steve Huntley/Wikipedia

Back in Paonia, Morley and his wife operate a bed-and-breakfast, A Simpler Time, in the old Victorian home where they raised four children. They also bought the house next door to expand, a move he now worries about.

“The base for this economy is the coal mines,” he said. “What will happen to the infrastructure of this town?”

Although West Elk and Elk Creek mines are both located in Gunnison County, two-thirds of the Elk Creek property taxes — about $1 million for the current fiscal year — go to schools in Delta County, said Rob Thurman, a senior financial analyst for Oxbow Mining, which runs the Elk Creek mine.

“Property taxes will fall off quite rapidly this year,” Thurman said. “We’ve had very little production.”

At The Diner in Paonia, Dawna Hart is worried about the broader impact of the layoffs as she serves the breakfast crowd. She’s heard that many of those who lost their jobs are now working out of state or even in Canada or Mexico. And, like others, she fears a future downturn in the coal industry.

“They employ so many people,” she said.

The ‘bump’

Unlike most layoffs, the Elk Creek terminations were not primarily caused by economic circumstances.

“On Dec. 2 (2012), we had what is called a bump,” said Mike Ludlow, executive vice president of Oxbow Mining.

The “bump” — basically a structural collapse inside the mine — started a fire. Elk Creek workers sealed the mine in an attempt to starve it of oxygen, then attempted to reenter and, at the very least, retrieve the equipment left behind. But the fire still burned, and company officials — wary of accidents like the one in Utah in 2007 in which nine miners died — decided to close the mine permanently.

Hence, the layoffs. Now 134 people work at Elk Creek.

We’re not Aspen, we’re not Telluride. This is a working-class county. It’s a big deal when 150 jobs are lost.

“It’s painful for us, emotionally, financially, it’s a hardship on the families,” Ludlow said of the layoffs. “The people who work here become like family.”

Elk Creek is the only coal mine owned by Oxbow Corp., an international energy and resources company founded and operated by Bill Koch, a brother of the politically active Koch brothers, David and Charles.

The company is looking at developing another mine in the county, but it’s a process that could take five to 10 years, Ludlow said.

Organic foods

While coal is the most significant economic driver in the North Fork Valley — so called because the North Fork Gunnison River flows through it — agriculture is also a historically significant contributor.

In 1984, Lynn Gillespie moved to the farm that her husband’s family settled in 1938. She wanted to stay home to raise her children, and began growing organic vegetables at what is now the Living Farm.

“My husband built me my first greenhouse, and now I have five,” she said.

In late October, winter veggies were replacing tomatoes, cucumbers and peppers in the greenhouses. Outside, sheep and cattle grazed while chickens ran about. The pigs, well, they were kept to themselves.

“They dug up the fields and they bit the chickens,” Gillespie said.

Two of her three children work on the farm; the third, Mike, returned to Paonia after culinary school to start the Living Farm Café, which makes gourmet meals from the farm’s bounty.

The Living Farm reflects a larger trend in the North Fork Valley. There are fruit groves, wineries and more, often catering to a tourism industry served by inns such as Morley’s.

“We’re the largest concentration of organic farming in the state of Colorado,” Gillespie said.

There are other energy ventures as well, including Solar Energy International, a nonprofit that trains people around the world to use renewable energy.

Still, for now, coal is king in the North Fork Valley.

“The coal miners are very good neighbors,” Gillespie said.

There’s one potential neighbor that few people in the valley would welcome — hydraulic fracturing, or fracking, for natural gas. While most in the valley consider coal mining a clean process, residents fear the impact of fracking on water supplies and don’t want the towers marring mountain views.

“There’s bumper stickers on nearly every car,” said Morley, a former town trustee. “The county is probably half environmentalists and half coal miners. The people have been very sympathetic of the coal miners.”

The future

“If the coal mines close, how does this place survive?” Elaine Brett wondered. “The clock is ticking. They know it, everybody knows it. They’ve got a finite number of years left.”

Brett is trying to plan for an economically viable future as an adviser with the North Fork Heart & Soul Project, a grant-funded community-planning effort in the valley.

“I really like this place,” Brett said. “I don’t want it to bust.”

Brett’s project is looking at five areas to ensure economic stability: energy, including renewable energy; agriculture and food; outdoor recreation; health and wellness, with an emphasis on alternative practices; and the creative sector.

“We have a very interesting collection of people who come here because they feel they can practice their art, from music to visual art to performance art,” she said. “Our hope for the future is that we can strengthen up in the areas of art and creative and energy alternatives.”

As a bank president and the president of Delta County Economic Development, Harding of First Colorado is involved in many of those efforts. But he’s also pragmatic about the economics of the area.

“This is Delta County and western Colorado, which is a boom-and-bust cycle in a lot of ways,” Harding said. “We’re not Aspen, we’re not Telluride. This is a working-class county. It’s a big deal when 150 jobs are lost.”

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