After the agency issued its annual report in February, the crucial question for many is whether the worst is over. They hope the slide reverses in 2014, or that production and job totals at least are stabilized, offering the possibility of a return to brighter days if the economy improves, natural gas prices continue to rise or at a minimum fail to return to historically low early 2012 levels, and the Obama administration decides not to double down on particularly onerous carbon dioxide rules.
Kentucky produced 80.7 million tons of coal last year, down 11.6% from 2012. Production at underground mines slowed to 54.6 million tons, a decrease of 6.4% from 2012. Surface mine production plunged even more, to 26.1 million tons, a staggering 20.8% decrease from 2012.
Output plummeted by 19.2% in eastern Kentucky to 39.9 million tons, 51% of which came from surface mines and 49% from underground mines. Production slowed at both surface and deep mines in the region, by 19.5% and 19%, respectively. In the fourth quarter of 2013, production continued to dip in eastern Kentucky, to 9.1 million tons. As a direct comparison, that was about 60% of the 15.4 million tons the region turned out in the fourth quarter of 2008, when Kentucky mines cranked out 121 million tons of thermal and metallurgical coal.
With a total of 10.9 million tons in 2013, Pike County remained the largest coal producing county in eastern Kentucky and the state’s second largest producing county overall, trailing only Union County in western Kentucky. Still, production fell by 16.9% in Pike County last year. Harlan County, another longtime coal producer in the region, registered a huge 35% decrease, while Martin and Perry counties checked in with 16.7% and 15.1% declines, respectively.
The situation comparatively was better in western Kentucky, part of the high-sulfur Illinois Basin that continues to gain market share at the expense of Central Appalachia.
Western Kentucky mined 41 million tons of coal in 2013, the vast majority — 86% — from underground mines. Still, the region’s total output decreased by 2.7% for the year and the rate of production for the fourth quarter was 9.9 million tons a quarter. The trend toward more underground mine was obvious in western Kentucky in 2013, with deep mining actually increasing by 2.8% over 2012.
Western Kentucky is home to the state’s largest underground mine — Alliance Resource Partners’ River View continuous miner operation near Uniontown in Union County. The mine produces more than 8 million tons annually.
Although production ticked down a bit, 1.6% in Union County, several western Kentucky counties posted gains in 2013, led by Daviess County, a 22.6% increase, and Ohio County, a 13.4% rise. On the negative side of the ledger, production mostly came to a grinding halt in Henderson County, down 99.1%, because Patriot Coal closed mines in the county.
Not surprisingly, employment at mines and prep plants took a major hit across the state in 2013, reaching historically low levels in eastern Kentucky. By the close of 2013, statewide mining employment stood at 11,781 down 16.5% from 2012. The 7,332 mining jobs in eastern Kentucky represented more than a 50% decrease from the region’s 15,418 mining jobs in 2008.
Average mining employment in western Kentucky held fairly steady last year, at 4,384 jobs. While that was down from 4,583 jobs in 2012, it still was significantly higher than the 3,357 jobs in 2008.
And, 2014 may be a year of growth for western Kentucky. Bill Bissett, president of the Kentucky Coal Association, said he has heard talk that plans for several new mines may be unveiled for the region this year. He declined to identify the coal companies involved.
“Moving forward this year, next year and the year after,” he said, “we’ll see some expansions and even new mines in western Kentucky.” The extremely cold winter of 2013-2014 has helped to burn down utility stockpiles and, as a result, is “good short-term news for us. We still mined about 40 million tons in eastern Kentucky last year,” making the region “the seventh-largest producer in the nation if it was a separate state.”
While the persistent decline in eastern Kentucky “is a great concern,” Bissett disagrees with detractors who predict “coal is over” in eastern Kentucky. “But that’s not true.”
