Kentucky coal jobs continue their record-breaking decline

bestep@herald-leader.comNovember 18, 2013 

The coal industry continued to shed jobs and production in Eastern Kentucky in the third quarter of 2013, tightening the screws on a region already reeling from earlier losses.

Statewide, the coal industry reduced employment at mines and preparation sites by 439 workers, or 3.4 percent, during the period from July 1 to Sept. 30, according to a report released Monday by the state Energy and Environment Cabinet.

There are fewer coal jobs in Kentucky than at any time since the state started keeping track in 1927, but nearly all the losses have been in Eastern Kentucky, where the job losses have the feel of a crisis.

"It's just a sad time," Leslie County Judge-Executive James Sizemore said Monday. "All of these coal-producing counties are going to be hurting."

Of the lost jobs during the third quarter, the report said 403 were in Eastern Kentucky. That follows the loss of 5,700 coal jobs in the region from July 2011 through July 2013, a decline of more than 40 percent.

And more layoffs have been announced since the third quarter ended. This month, for instance, James River Coal Co. said it would idle four more mines in Eastern Kentucky.

The layoffs hurt families and the local economy, and the loss of production cuts the amount of money counties get from the state's coal-severance tax, Sizemore said. The region has been losing population, and there is a concern that will continue without significant improvement in the economy.

"They'll have to leave to get work," Sizemore said.

Gov. Steve Beshear, a Democrat, and Republican U.S. Rep. Hal Rogers have scheduled a summit in Pikeville on Dec. 9 in hopes of generating ideas to boost Eastern Kentucky's economy. As of last week, 600 people had registered.

The region's coal industry has been hurt by a variety of factors, including competition from natural gas and coal from other regions of the country, higher mining costs and declining productivity, and tougher rules aimed at protecting air and water quality.

Coal production historically has been cyclical in Eastern Kentucky, but federal analysts project that production won't return to the level of even a few years ago.

The report released Monday showed total coal production in Kentucky for the third quarter was 5.1 percent below that of the second quarter.

Again, it was a tale of two Kentuckys.

Western Kentucky production was down only 0.3 percent, while Eastern Kentucky production dropped nearly 10 percent.

Nearly every coal county in the eastern end of the state saw a decline. The slide was steepest in Leslie County, at 30.4 percent.

The state's western coalfield produced more total tons than the eastern coalfield, a marked shift from the past three decades.

Bill Bissett, president of the Kentucky Coal Association, said there was no good news for the industry in the report, although the slide was not as precipitous as in some previous quarters. The state shed 851 coal jobs in the second quarter, for instance.

Bissett said it was premature to say the coal industry had hit bottom in Eastern Kentucky, especially with some contracts expiring at the end of the year.

One key question will be whether companies can line up new or continued orders for Central Appalachian coal.

The answer to that question could depend largely on the price of natural gas. The average price of gas for 2013 has been higher than the record low prices seen in 2012, and federal analysts predict another increase in 2014, albeit a smaller jump than from 2012.

"It doesn't take a huge increase for coal to be competitive," Bissett said.

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

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