Kentucky coal jobs at lowest level since state started counting in 1950

bestep@herald-leader.comMay 21, 2013 

A train load of coal ready to be transported was parked near Ky. 119 in Cumberland in August 2011. The first load of coal shipped by rail from Harlan County was shipped in August 1911, 100 years earlier.

PHOTO BY CHARLES BERTRAM | STAFF — Herald-Leader

The number of coal jobs in Kentucky has dropped to the lowest level recorded since the state started keeping count in 1950, according to the Kentucky Energy and Environment Cabinet.

An average of 13,109 people worked at coal mines and related facilities in the first quarter of 2013, a drop of 990 people since the end of 2012, the cabinet said in a report completed this month.

The pace of the continued slide was slower than in 2012, when more than 4,000 miners in Eastern Kentucky lost their jobs, but that was little consolation.

"These numbers are not surprising, but they're very concerning," said Bill Bissett, president of the Kentucky Coal Association.

In the last 18 months, on-site employment at Kentucky coal mines has dropped by nearly 5,700 people — down 30 percent from the September 2011 number of 18,804.

Eastern Kentucky has been hit hardest, by far. More than 5,500 of those layoffs were in the eastern coalfield, according to the state report.

Eastern Kentucky coal producers face a number of challenges, including competition from relatively cheap natural gas and lower-cost coal from other regions in the country, higher mining costs, and tougher rules aimed at protecting the environment.

Analysts have said the low price of natural gas was a key factor in undermining demand for coal from Eastern Kentucky in 2012.

Production in the region dropped nearly 28 percent in 2012. In the first three months of this year, production at underground mines in Eastern Kentucky ticked back up nearly 2 percent, but dropped 4.6 percent at surface mines, so production fell overall, according to the state report.

Eastern Kentucky coal production has dropped by 42 percent in the last 18 months, according to the state report.

The federal government has held up dozens of applications to open surface mines in Eastern Kentucky out of concern the permit conditions would not adequately protect water quality. Many people argue that has hurt the industry.

"A bitter fact of life is that the (U.S.) Environmental Protection Agency is following a policy designed to impede the Kentucky coal mining industry," Bissett said in a commentary published in the Lexington Herald-Leader this week.

Others argue the EPA's actions have not hurt production, given that many mines which already have permits are idled for lack of demand because of market factors.

In contrast, coal production in Western Kentucky was up in the first quarter of 2013, which made for a very slight statewide increase in production of 0.4 percent, according to the state report.

When coal-burning power plants needed low-sulfur coal to meet clean-air standards, Eastern Kentucky had an advantage over the higher-sulfur coal from the western end of the state, but the installation of scrubbers at power plants changed that dynamic.

The first-quarter report highlights the westward shift in Kentucky's coal production.

The Western Kentucky coalfield outproduced the Eastern Kentucky region, which covers far more counties, during the first three months of 2013. The opposite was true in 2012.

Western Kentucky counties produced 10.4 million tons of coal in the first quarter compared to 10.1 million tons in Eastern Kentucky, a ratio of 51 percent to 49 percent.

Union County, in Western Kentucky, edged past Pike County, in the far eastern end of the state, in 2012 to become the state's largest producer. Pike County had been in the top spot for decades.

"We seem to be in a real change position," Bissett said.

Coal production statewide has fallen 26 percent in the last 18 months, and 52 percent from the all-time high of 180 million tons in 1990, the report said.

If production continues all year at the first-quarter rate, it would be the lowest since 1963, the report said.

One longtime Pike County coal operator, Bill Smith, raised the hopes of some unemployed miners in recent days when he announced plans to open several mines that would employ an estimated 250 people.

The Eastern Kentucky Concentrated Employment Program, based in Hazard, is taking applications for those jobs, said Michael Cornett, spokesman for the regional employment program.

The agency also operates a program called Hiring Our Miners Everyday, or HOME, in which nearly 1,000 laid-off miners have enrolled. About 400 people have gotten jobs or are training for new careers through the program.

Many laid-off miners, however, appear to be waiting for a cyclical upswing in the coal industry in the region, Cornett said.

"We just aren't seeing that happen at this moment," Cornett said.

Bill Estep: (606) 678-4655. Twitter: @billestep1

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