New Data Reflects Coal Layoffs, But No Job Collapse
8 August 2012
By Ken Ward Jr.
CHARLESTON, W.Va. -- Coal-mining employment in West Virginia
dropped by nearly 1,300 jobs in the second quarter of the year,
according to preliminary numbers that illustrate the coal
industry's continued decline in the face of cheap natural gas,
declining reserves, and competition from other coal regions.
New data from the U.S. Mine Safety and Health Administration put
coal employment at about 23,300 during the period from April to
June, a decline of about 5 percent over the previous three months.
The numbers are the first government statistics to reflect recent
layoffs across the state's coalfields. But some observers said
they also show coal employment remains surprisingly strong, given
the political campaign that alleges new environmental rules are
destroying the industry.
Current statewide numbers are roughly the same as the last full
quarter of George W. Bush's presidency, according to jobs numbers
mine operators report to MSHA.
West Virginia mining employment is up by nearly 1,800 jobs -- more
than 8 percent -- since the Obama administration began initiatives
aimed at cracking down on mountaintop removal mining. And, the
most recent quarter's figures show the seventh-highest number of
jobs over the last 40 quarters, or 10 years.
Bill Raney, president of the West Virginia Coal Association, said
the MSHA figures reflect what he continues to hear from industry
officials: While jobs were on the rise over the last few years,
there are fears that the recent layoffs are the start of a new
"We had more people working, and thank goodness we did," Raney
said in a Wednesday interview. "But [continued layoffs] are a
concern, no question about it."
Another sign of the times for coal came with Wednesday's quarterly
financial report from Alpha Natural Resources. Alpha recorded $2
billion in losses, mostly attributable to writing down the
long-term value of its assets -- including its purchase last year
of troubled Massey Energy -- and restructuring based on the mining
"These are extremely challenging times in the U.S. coal industry,
with softness in both the thermal and now the metallurgical coal
markets and the pace at which the fundamentals changed," said
Kevin Crutchfield, Alpha's chairman and CEO.
While statewide coal employment is half of what it was just a few
decades ago, coal operations provide high-paying jobs with good
benefits that in some coal-producing counties are among the only
Concerns about mountaintop removal's impacts, air pollution from
coal-fired power plants, global warming, and miner safety and
health continue to pressure the industry, which claims an unfair
effort by President Obama to shut it down.
But government and private forecasts have for years projected a
decline in Southern West Virginia production, fueled by quality
reserves being mined out and increasing competition from giant
surface mines in Wyoming's Powder River Basin.
More recently, advances in natural gas drilling resulted in
extremely cheap prices, prompting many power producers to switch
fuels. Additionally, new U.S. Environmental Protection Agency
efforts to reduce toxic air emissions have forced some utilities
to speed up plans to close older, inefficient coal plants that
couldn't meet the EPA standards.
"It's the market forces that are pushing [coal] out of the
market," said Alan Beamon, director of electricity, coal, nuclear
and renewables analysis for the U.S. Department of Energy's Energy
In its Wednesday financial report, Alpha blamed low natural gas
prices and a mild winter for coal's current downturn, but said
tougher regulations are "exacerbating the situation."
Alpha said it plans to continue to "optimize" its Appalachian
operations "by adjusting our footprint, idling high-cost thermal
coal and lower-quality metallurgical coal production, while
focusing on our higher-margin metallurgical products."
"We sincerely regret the impact our production curtailments have
had on good employees and their families, but the market
environment with which we are faced left us no other options,"
Crutchfield said. "We will continue to evaluate market conditions
and will make further adjustments if market conditions warrant."
Late last month, Arch Coal said it was also making moves toward
"realigning our Appalachian asset portfolio towards" mines that
produce steel-making coal.
"Given the muted outlook for domestic thermal coal in that region,
we've taken the hard step and idled five higher cost thermal
operations that were unable to earn an adequate return in the
current market," said Arch CEO John Eaves. "It was a difficult,
but necessary, decision that was made to enhance our competitive
cost structure in Appalachia and to position Arch for long-term
MSHA figures show that much of the increase in coal jobs between
2008 and 2011 occurred at underground mining operations, perhaps
supporting the notion -- promoted by anti-mountaintop removal
groups -- that tougher limits on strip-mine pollution will
actually increase overall employment.
"The fact that West Virginia mining jobs have increased 8 percent
since the administration began more stringent review of surface
mine permits, despite the steep decline in demand for coal,
indicates that strong enforcement of mine safety and environmental
laws does not 'kill jobs' as coal CEOs claim," said Matt Wasson,
who monitors mining data for the group Appalachian Voices.
"Coal CEOs complain about MSHA and the EPA because running safer
and cleaner operations sometimes means hiring more workers, which
costs a little more money," Wasson said. "It seems they're more
concerned about profits for their shareholders than jobs for West
Virginians, not to mention the health and welfare of their workers
and the communities in which they live."
Some industry officials noted that the current heat waves in parts
of the country could fuel greater coal demand to power air
conditioning, and natural gas prices may be starting to increase
"We appear to be past the bottom," Alpha's Crutchfield said of the
Government forecasters aren't so sure, especially if the industry
is hoping for a major rebound in Appalachia.
Over the next 25 years, the projected coal share of overall U.S.
electricity generation is expected to fall to 39 percent, well
below the 49-percent share seen as recently as 2007, according to
At the same time, DOE projects that coal production in Central
Appalachian -- mostly Southern West Virginia and Eastern Kentucky
-- will drop by more than half between 2011 and 2035.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.