LOUISVILLE — Hard times are expected to continue in the Appalachian region that was once the heart of the nation's coal production, according to a new report.
The report from Morgantown, W.Va.-based Downstream Strategies said government data shows that production in Central Appalachia is projected to fall from 185 million tons in 2011 to 128 million tons by 2020, a 31 percent drop. Along with Eastern Kentucky and southern West Virginia, the region includes lower producing mines in Tennessee and Virginia.
The consulting group sounded alarms about the decline in a report a few years ago. The document released Tuesday titled "The Continuing Decline in Demand for Central Appalachian Coal: Market and Regulatory Influences," said the region's production is being squeezed by economics, government regulations and even its own geology.
"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 Evan Hansen, president of environmental consulting group.
The region reached a production peak of 294 million tons in 1990 and 291 million tons in 1997.
But much of the its easy-to-reach coal seams have been mined out, meaning it takes more workers to keep production levels up, translating to higher labor costs, the report said. And electric utilities, traditionally the region's best customers, are retiring coal-fired plants or upgrading plants to burn cheaper natural gas, a trend the report says will continue into the future.
Competition from high-producing western mines that can mine coal at a cheaper price is also putting economic pressure on Central Appalachia. The region was the dominant source of coal in the U.S. until it was eclipsed by western states, namely Wyoming, in the 1990s.
Last year, according to the U.S. Energy Information Administration, two massive surface mines in Wyoming accounted for 20 percent of the nation's coal output. By comparison, all the mines in Central Appalachia produced just 17 percent of U.S. coal in 2011.
The report also mentions tougher federal regulations being enforced by the Obama administration, which coal supporters and some elected officials in the region cite as a key reason for slowed production.
Mines in the mountainous areas of Central Appalachia have undergone a level of scrutiny that coal operations in other areas haven't been subjected to, said Bill Bissett, president of the Kentucky Coal Association, an advocacy group.
"This action, along with other regulatory effects from the federal government, have created an unfair atmosphere in Eastern Kentucky's coal production," Bissett said.