Report: Kentucky lost more than 1 in 10 coal jobs during first three months of 2015 | Lexington Herald Leader

The number of coal jobs dropped sharply in both Eastern and Western Kentucky in the first three months of the year, hitting the lowest total on record.

Preliminary data show mines cut more than 1,200 jobs statewide during the quarter, according to a report released Thursday by the Kentucky Energy and Environment Cabinet. That was a drop of 10.6 percent, the steepest quarterly decline in more than two years.

The job losses were split about evenly between the state's eastern and western coalfields, with more than 600 each, but the percentage decline was worse in Western Kentucky because fewer miners work there.

Western Kentucky lost 13.7 percent of its coal jobs during the quarter compared to 8.7 in Eastern Kentucky, according to the report.

Western Kentucky had not seen the same steep job losses in recent years as Eastern Kentucky, but the shut-down of mines in Union County that had several hundred employees drove down jobs in the region.

The state's coal industry employed an estimated 10,356 people as of April 1, down from 11,586 the quarter before.

The first-quarter total was the lowest since 1927, according to information in Kentucky Coal Facts, a state publication. Job records before that are incomplete.

But at about 10,000 employees, it's likely Kentucky has the fewest coal employees since companies built entire towns such as Jenkins and Lynch from scratch in Eastern Kentucky in the second decade of the 1900s and hired thousands of workers.

And the bad news isn't over.

There were more layoffs announced in April that didn't show up in the first-quarter calculations, said Bill Bissett, president of the Kentucky Coal Association.

"This is concerning," Bissett said of the steep drop from January through March.

Looking further ahead, several power plants that bought Kentucky coal have announced they will close.

Of the plants currently receiving Kentucky coal, 17 have announced they will close by the end of the year, and another seven are slated to close by 2017, according to the report from the cabinet.

"We are not at the end of this," Aron Patrick, who analyzes energy issues for the cabinet, said of the downturn.

A number of factors have combined to sap demand for Kentucky coal.

They include competition from natural gas and from cheaper coal mined elsewhere in the country, and tougher federal rules to protect air and water quality. Utilities have switched to cleaner-burning natural gas to deal with air-quality rules.

"There's not enough demand for the coal" that Kentucky mines are producing, Patrick said.

Another issue in Eastern Kentucky is that many of the best reserves have been depleted after a century of mining. The remaining coal is more expensive to mine, so production costs — and the resulting coal prices — are higher in Eastern Kentucky, making it less competitive.

Production numbers reflect the downturn as well.

Tonnage dropped 11.5 percent in Eastern Kentucky in the first quarter of the year and 5.6 percent in Western Kentucky.

In the east, the downturn was all in surface mining — 23 percent, according to the report.

Bissett said that may be because it is easier to idle a surface mine in order to cut production than an underground mine. The investment to open a surface mine is much less than for an underground mine, creating incentive to keep the deep mine going if possible.

The report released Thursday showed Kentucky mines produced a total of 77.4 million tons of coal in 2014, with 40 million tons from Western Kentucky and 37.4 million in the eastern coalfield.

That was the lowest statewide production total since the early 1960s.

As recently as 2008, Eastern Kentucky mines produced 90.9 million tons of coal.

The 40 million tons produced in Western Kentucky last year was down from the year before, but well above the 30 million tons produced in 2008.

Bissett said industry analysts believe growth in Western Kentucky coal production in recent years would have been more significant if not for concerns among utilities about proposed tougher limits on carbon-dioxide emissions from power plants.

The drop in coal jobs has caused particular hardship in Eastern Kentucky because coal had long been a dominant piece of the economy.

Average annual employment in the state's eastern coalfield dropped from 14,412 in 2008 to 7,287 in 2014, according to the report released Thursday.

Sam Godsey, who owns a trucking business in Knott County that hauls coal, has lived through the downturn along with thousands of miners and other businesses.

He once had 11 trucks on the road, but now has only enough work for seven. Some trucking companies have closed, Godsey said.

"There's just not many people working now," he said.

Godsey said the Perry County mine his trucks are hauling from told him it would have work through the end of the year, but couldn't promise anything after that.

He's hauled coal since 1988. The current downturn is the worst he's seen, and he's not optimistic production in the region will ever recover to previous levels, which matches what analysts have projected.

"I don't see it coming back," Godsey said.