Coal jobs and production fell sharply in Eastern and Western Kentucky in 2015

Coal production in Eastern Kentucky plunged in 2015 to a level not seen since the low point of the Great Depression in 1932, costing more than 2,000 people their jobs in the state’s beleaguered eastern coalfield.

Production and jobs also dropped sharply in Western Kentucky, according to a report issued Monday by the state Energy and Environment Cabinet.

Statewide, Kentucky produced 61.4 million tons of coal in 2015. That was down 20.7 percent from 2014 and was the lowest statewide total since 1954, according to the report.

The decline was 25.3 percent in Eastern Kentucky and 16.4 percent in Western Kentucky, according to the report.

Production in Eastern Kentucky last year totaled just 28 million tons.

With less coal being mined, jobs dropped sharply, down 27.7 percent statewide from 2014.

In Western Kentucky, the number of jobs at mines and preparation plants dropped 24.9 percent. In Eastern Kentucky, jobs declined 29 percent from 2014, or more than 2,000 positions, analysts said in Monday’s report.

There are fewer coal jobs in Kentucky than at any time since reliable records dating to 1927, and probably the fewest in more than a century.

Coal employment in Eastern Kentucky averaged 5,897 for 2015. In 2008, the number was 14,381, according to the cabinet.

Gary Hall’s job was among those that dried up in 2015.

Hall, 55, said he was able to hang on for several months after the Pike County coal-preparation plant where he worked shut down in March. He was a supervisor, so he had duties that continued even when the plant wasn’t running coal.

Ultimately, however, he left after the company went several weeks without paying him.

Now, after 33 years in the coal industry, he has no insurance and isn’t sure what his next job will be.

“There ain’t no coal jobs around here,” Hall said Monday.

Hall said many former miners from his area moved to mining jobs in Western Kentucky, where employment had been stable for some time compared to Eastern Kentucky — until last year.

The downturn in coal jobs and production in Eastern Kentucky — where jobs with comparable pay are limited — has hurt other businesses and tax revenue for local governments.

Harlan County Clerk Donna Hoskins said it’s clear vehicle and land purchases are down. Her office is where those transfers are registered.

“So many people are laid off. So many places are closing,” Hoskins said. “People are hanging on with hope, and the hope is going away.”

In Letcher County, where two-thirds of the remaining coal jobs bled away in 2015, the loss of severance tax revenue based on coal mining has forced the county to cut services, said Judge-Executive Jim Ward.

The county once received $400,000 to $600,000 a quarter from the tax, but got $170,000 in the most recent quarter, Ward said.

The county closed five senior citizen centers, turned over the recycling center to the city of Whitesburg, raised the tax on garbage collection, cut out overtime and cut funding to the sheriff’s office, and stopped funding community centers, Ward said.

“It’s hurt all around,” he said.

According to the state estimate, there were 101 coal jobs in Letcher County in the final three months of 2015, down from more than 600 a few years ago

The drop in production and associated job losses accelerated toward the end of the year.

Bill Bissett, president of the Kentucky Coal Association, said factors such as unseasonably warm weather and flooding in the Southeast that blocked shipments of Kentucky coal to power-plant customers played a role in making the numbers for the final three months of the year worse than expected.

However, the industry says tougher federal regulations are a key factor in the downturn in coal.

The Obama Administration has pursued limits on emissions of pollutants, such as mercury and carbon dioxide, that place coal-fired power plants at a disadvantage because of their higher emissions.

Federal regulations “that force the early closure of coal-fired power plants, in addition to the inability to build new coal-fired power plants, causes our national market to only contract and not grow,” Bissett said.

National numbers bear that out, said Bissett, who released an analysis by the Energy and Environment Cabinet that showed coal production declined in nearly every coal state in 2015.

The drop in production in Western Kentucky reflects that national trend, said Aron Patrick, an assistant director who analyzes coal production, employment and markets for the cabinet.

The coal industry and others are challenging federal Environmental Protection Agency rules to cut power-plant emissions of carbon dioxide, a greenhouse gas that traps heat in the atmosphere.

Many environmental groups support the tougher EPA rules, which are aimed at improving air quality and trying to slow global warming.

In addition to regulatory headwinds, analysts say other factors have played roles in pushing down demand for coal, most notably historically low natural gas prices that have figured into decisions by utilities to switch to gas for electricity generation.

“Environmental regulations are a clear factor in that they are causing the closure of coal-fired plants across the country,” Patrick said. “But they are not the only factor.”

The coal industry in Eastern Kentucky also faces a particular challenge because many of the thickest seams have been mined out, and production costs in the region are the highest in the country.

That’s significant because as coal companies across the country lose customers, Kentucky producers face increasing competition from other U.S. coal basins.

“The states with the highest-priced coal are the ones that are losing most,” Patrick said.

As sobering as the 2015 numbers were, it’s likely that Kentucky coal jobs and production haven’t hit bottom.

For instance, Alliance Resource Partners recently idled a large Webster County mine that employed more than 160 people, so that drop will show up in the first quarter of 2016.

State producers also face the loss of more power-plant business.

In one key example, the Tennessee Valley Authority’s giant Paradise power plant in Muhlenberg County, which bought more than 5 million tons of Western Kentucky coal in 2014, plans to close two of its three coal-fired units in 2017.

The plant has been the single largest consumer of Kentucky coal, but TVA is building a large natural gas-fired unit.

About 85 percent of the coal mined in Kentucky went to 89 power plants in 15 states, according to the report released Monday.

Of that amount, 3 percent went to plants that closed in 2015, and 13 percent was shipped to power plants scheduled to mothball coal-fired capacity by 2019, the report said.