Ask A Researcher

December 2021

North Dakota Lignite Energy Industry Workforce

Dr. Nancy Hodur is the director of the Center for Social Research at NDSU and has over 25 years of professional experience in applied research, public policy, and outreach education. Dean Bangsund is an economist in the NDSU Dept. of Agribusiness and Applied Economics. He specializes in Impact Assessment, and has over 25 years of experience conducting applied economic research. In this article, Nancy Hodur and Dean Bangsund share some of the findings of a research study that brings insight into the workforce characteristics of the lignite industry.

The lignite energy industry is an important part of North Dakota’s energy sector and statewide economy, providing stable, high paying jobs in an area of the state that historically has had few other employment opportunities.  In recent years, consumer preferences for electricity have shifted from fossil fuel sources to renewable sources.  Lignite, and coal in general, also has been forced to contend with competition from plentiful, inexpensive natural gas and the lower carbon footprint associated with burning natural gas. While North Dakota’s industry has, to date, largely withstood the downsizing found in other parts of the United States, recent developments with Coal Creek Station and Falkirk mine reveal that the state’s industry is not immune to the environmental and economic pressures on coal-fired electricity generation.

The uncertainty of potential workforce response to a plant and mine closure and the lack of general information on the age and residence of the industry’s workforce prompted an assessment of the lignite energy industry’s workforce in North Dakota1. The primary objective was to inform stakeholders and industry representatives of the general composition of the industry’s workforce. Further, workforce data could bolster evaluations of localized effects of changes in industry employment on host communities in central North Dakota.
Information on the industry’s workforce characteristics in 2020 was solicited from lignite mining, electricity generation, and electricity transmission and distribution firms.  Years of service, age, work location, employee residence, job description, and occupation classification were requested from lignite industry firms. These data form a baseline description of the industry-wide workforce and comparisons by industry segment.  Equal Employment Opportunity (EEO) codes were used to gain insights on the types of occupations, skill sets, and breadth of job types associated with the industry’s workforce. Secondary data was used to evaluate employee compensation rates.  Zip codes for work location and employee residence were used to measure commuting distances for workers.

Workforce Composition. Total employment associated with the lignite energy industry in North Dakota in 2020 was 3,388.  Seventy-seven percent of the workforce was associated with ‘Generation’ and ‘Mining and Reclamation’ segments of the lignite energy industry.
Jobs in the lignite industry include ‘Craft Workers’, who generally have specific training and represent skilled positions such as electricians, welders, diesel mechanics, etc.; ‘Operatives’, that have fewer training requirements and include positions such as equipment operators, truck drivers, material handling, etc.; and ‘Professionals’, jobs that require professional degrees and include engineers, computer technicians, etc. Jobs by category were similar across industry segments; however, ‘Craft Workers’ were more prevalent in the ‘Generation’ and ‘Distribution and Transmission’ segments than the ‘Mining and Reclamation’ segment, 50 and 51 percent, respectively, compared to 31 percent in ‘Mining and Reclamation’.  ‘Operatives’ were more prevalent in the ‘Mining’ segment than in ‘Generation’; 49 percent compared to 11 percent, respectively. ‘Professionals’ also were more prevalent in the ‘Generation’ and ‘Distribution and Transmission’ segments, 21 percent and 17 percent, respectively compared to 7 percent in the ‘Mining and Reclamation’ segment.

Compensation Rates
Compensation rates for the lignite energy industry are considerably higher than the average compensation rate for similar occupations in other industries and economic sectors in the state. Average total compensation (i.e., wages, salaries, and benefits) for all private jobs in the state was estimated at $74,689. Average total compensation for coal mining was estimated at $152,667, electricity generation at $165,498 and electricity transmission and distribution at $164,184. 

Workforce Age Distribution
Most employees (57 percent) in the industry are 31 to 50 years old.  About 7 percent of the workforce are age 61 or older. Most employees (59 percent) have been with their current employer 10 years or less. Workforce age is consistent with years of service in that approximately half of the workforce is age 40 or younger and 74 percent is age 50 or younger. Data provided by industry firms does not necessarily reflect the number of years worked in the industry.  Years of service reflect only years of service at their current employer.

In the mid-2010s, the industry was concerned about workforce recruitment as a substantial share of the workforce was expected to retire in the forthcoming three to five years. However, workforce age distribution suggests the industry workforce may be younger than generally perceived. Mass retirements in the industry are unlikely due to the overall age structure of the industry’s workforce. The long-held contention that the lignite energy industry workforce was characterized by older workers with substantial number of years of service who were nearing retirement is no longer accurate.

Residence of Workers
Geographic distribution of workers showed concentrations of workers residing near their place of work, with substantial concentration of workers in the central part of the state near mining and generation and conversion facilities.  A substantial number of workers are also living in the Bismarck/Mandan metro area. Workforce residency may be more geographically dispersed for any particular work location, although the majority of workers consistently live within 60 miles of work locations (i.e., plants and mines). While overall most workers commute 60 miles or less, workers in the ‘Mining and Reclamation’ segment were more likely to commute more than 60 miles.

While the state is facing a workforce shortage, workforce demand may not translate into the state’s ability to absorb a large infusion of lignite energy industry workers. Most of the jobs in the lignite industry have some specialized training and other trade-related requirements. While some jobs in the lignite industry could be directly transferable to other economic sectors, the distribution of workforce by type of occupation suggests that a substantial portion of workforce could potentially have difficulty in finding replacement jobs in their region.  Even if the state demand for workers could absorb the number and types of employment present in the lignite energy industry, most alternative employment would likely have a substantially lower pay scale given the lignite energy industry pay scale is roughly twice that of statewide averages for all other private employment.

Study findings bring new data to the discussion of what might happen if the industry was to contract or there were closures or layoffs at various facilities. While this study provides much insight into lignite industry workforce characteristics, the insights gained in the assessment do not go so far as to suggest what workers may do if faced with an industry contraction. The information gathered in this study is an important first step, but much more information would need to be compiled and analyzed before drawing conclusions about potential effects of an industry contraction.

1 Link to the full report:
Hodur, Nancy; Bangsund, Dean – North Dakota Lignite Energy Workforce. 2021.

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