CHARLESTON, W.Va. -- While multitudes of West Virginia miners and coal officials rallied in Washington against federal pollution rules, a new economic report said the coal industry's future is dubious, regardless of pollution concerns.
A study titled "Warning: Faulty Reporting of U.S. Coal Resources" by Clean Energy Action is accompanied by a news release saying:
"America does not have 200 years in coal 'reserves' since much of the coal that is now left in the ground cannot be mined profitably. ... The United States appears to have reached its 'peak coal' point in 2008 and now faces a rocky future over the next 10-to-20 years of rising coal production costs, potentially more bankruptcies among coal mining companies, and higher fuel bills for utility consumers."
The study says the U.S. Energy Information Administration's claim that America has 200 billion tons of coal reserves is misleading, because "significantly less than 20 percent of U.S. coal formations will likely be economically recoverable for mining purposes."
With low-cost Marcellus Shale gas grabbing many fuel markets, coal corporations would lose money if they tried to mine many expensive, difficult-to-reach seams that remain, it says.
Coal production has fallen 80 percent in Pennsylvania, 61 percent in Virginia, 50 percent in Ohio, 47 percent in Kentucky, 46 percent in Illinois, 44 percent in Arizona, 39 percent in Utah, 32 percent in Alabama and 31.8 percent in West Virginia, the analysis reports.
Tom Sanzillo of the Institute for Energy Economics and Financial Analysis is quoted:
"The rising cost of production is THE sleeper issue for those who follow coal and energy markets in the United States. It is a geological certainty and an economic fact that as mining activity matures in a region, production typically becomes more difficult and more expensive. The country is going through a transition in its energy mix for electricity. What will emerge is a more diversified set of suppliers for the nation's electricity consumers. Coal's relative monopoly at 50 percent of market share is likely to be replaced by growth in renewable resources, efficiency, natural gas and in some regions of the country by hydro. ... The coal industry will be smaller with less producers, fewer mines and higher prices."
The report cites various coal corporation bankruptcies and investment losses in the past few years. Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts.
As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.