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Report: Ky Coal Production Will Fall, But Employment Will Rise

According to a new report, central Appalachian coal production is down and will keep falling, but mine jobs will rise. CHART by Downstream Strategies, based on federal and other figures.
According to a new report, central Appalachian coal production is down and will keep falling, but mine jobs will rise. CHART by Downstream Strategies, based on federal and other figures.
May 16, 2013

CHARLESTON, W.Va. - For the next two decades, more miners will be digging less coal in Kentucky, according to an in-depth report. Consulting firm Downstream Strategies analyzed federal and other figures and pinned the cause on thinner coal seams - and, to a lesser degree, on cheap natural gas. By 2040, the report predicted, central Appalachian coal production will be about one-third of its 1997 peak.

However, Downstream president Evan Hansen pointed out, employment will actually rise.

"It will take more miners to produce a ton of coal," he said. "Generally, that's because the thickest, most easily accessible coal seams are being mined out."

Hansen said both production levels and per-miner productivity have already fallen a great deal in the last decade, and he predicted that will continue.

The industry has attacked what it calls a "war on coal" by regulators. However, Hansen explained, the real enemy is geology. The thinner coal seams and cheap gas mean much of the demand for central Appalachian coal to fuel power plants is going away, he said, adding that the regulations often just do not enter into it.

"If there's less demand, then frankly it doesn't matter how strict the regulations are," he said, "because people are not going to buy as much."

The report said that despite the decline in demand from power plants, the number of mining jobs will actually rise. That is in part due to a shift from highly mechanized surface mining (to supply coal for power plants) to more labor-intensive underground mining (for coal to make steel).

According to the report, three Kentucky counties - Pike, Knott and Letcher - will be the most vulnerable as production declines. Hansen acknowledged that they could face a tough patch, but he added that devoting part of the severance tax to a future fund could help pay for the transition.

"Set aside that fund so it can be used in these counties long into the future, as a perpetual source of funding to help diversify the economy," he urged.

The report is available at http://downstreamstrategies.com.

Dan Heyman, Public News Service - KY