"It is well past time for the state's leaders to focus on the underlying trends and drivers of coal production in formulating long-term economic policy," said Jeremy Richardson, a West Virginia native from a coal mining family who is studying the issue for the Union of Concerned Scientists.
James VanNostrand, director of the Center for Energy and Sustained Development at the West Virginia University College of Law, said the new report "underscores the need for the state to engage in some serious discussions about a state energy policy and, more broadly, an economic policy that takes into account the forecasted declines in coal production in Southern West Virginia."
The 140-page Downstream Strategies report focuses on the coal industry in central Appalachia, a region that includes Southern West Virginia, eastern Kentucky, Virginia and Tennessee. It is an expanded follow-up analysis to a major report Downstream Strategies produced in January 2010 as part of its ongoing effort to link environmental and economic development concerns in the region.
"Since we released our 2010 report, the decline of the region's coal industry has been publicly acknowledged by both industry leaders and state policymakers," said Downstream Strategies President Evan Hansen. "Our new report illustrates how the industry's many challenges will likely lead to even lower production levels in the future."
Using a variety of data and dozens of charts and graphs, the new report traces the rise and fall of central Appalachian coal through two major shifts -- from 1985 to 1990 and again from 1993 to 1997 -- where coal production significantly increased, while mining jobs took a major plunge. Direct coal employment dropped from 70,000 miners in 1985 to 35,600 in 1997, while production peaked.
"This was the result of sharp improvements in labor productivity, which reflected a shift toward greater mechanization of the mining process, both for surface and underground mines," the report says. "At the same time, production was shifting toward surface mining, which requires less labor to produce each ton of coal than underground mining."
But since 1997, production has dropped, by 44 percent in eastern Kentucky and 37 percent in Southern West Virginia. And the most recent U.S. Energy Information Administration estimates project regional production will drop by 98 million tons between 2011 and 2040, with most of that decline coming by 2020.
Downstream Strategies discusses the impact of competition from natural gas and from other coal regions, and acknowledges that "some degree of impact is inevitable" from federal government regulatory moves. But it notes, "Numerous studies suggest that the strongest underlying influence on the overall declining trend in demand and production has been the exhaustion of the thickest, most accessible coal seams."
In West Virginia, industry and political leaders have focused their attention on fighting Obama administration regulatory efforts, blaming the industry's troubles on a U.S. Environmental Protection Agency "war on coal." As a result, the report notes, "more comprehensive policies to build the foundation for new economic alternatives in coal-producing counties appear to be absent."
Ted Boettner, executive director of the West Virginia Center for Budget and Policy, said the new Downstream Strategies report shows why the political climate around coal's future needs to change.
"As more people come to grips with the fact that coal is declining in the region and will not return to historic levels, it could present a tremendous opportunity to rethink our past and plan for the future," Boettner said. "It is going to take vision, strategies and leadership at the local and state level to ensure that the state has a soft landing instead of hard one. I think West Virginians are up for the challenge, but first we need to recognize the problem."
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.