MORGANTOWN, W.Va. — Coal production in West Virginia will decline by 39 percent from 2008 levels during the next 20 years, according to a new report from West Virginia University’s Bureau of Business and Economic Research.
That report, titled “Coal Production in West Virginia: 2015–2035,” cited economic, environmental and regulatory factors in coal’s decline including weak export demand, reduced domestic use of coal in electricity generation, altered emissions compliance standards for utilities and “challenging” geologic conditions in southern West Virginia.
“We have a perfect storm going on right now. We have three major sources of downward pressure on the coal industry and those sources are very hard to overcome,” said John Deskins, who co-authored the report with Brian Lego, of “stiff competition, an unfriendly regulatory climate towards coal and the challenge from natural gas.”
On Thursday’s MetroNews “Talkline,” Deskins, the director of West Virginia University’s Bureau of Business and Economic Research, noted coal production declines have not been uniform throughout West Virginia.
Production in the two regions has “diverged significantly in recent years,” the report stated. While southern West Virginia has taken hard hits since 2008, Deskins said coal production in northern West Virginia has increased.
“We’ve been mining coal down there (in southern West Virginia) aggressively for a long time and what we have left over is a lot deeper in the ground and a lot harder to get to,” Deskins said, adding it costs more to mine coal in West Virginia.
“If you look at other parts of the U.S., especially places like Wyoming with its open pit mining, it’s just a lot of easier to dig the coal out of the ground and so they’re able to underprice us,” he said.
Coal competition also comes from other countries like Australia.
Other points from that WVU report:
— After reaching nearly 158 million short tons in 2008, West Virginia’s coal mine output has fallen in each successive year to an annual total of approximately 115 million short tons in 2014.
— The baseline forecast calls for state coal production to decline to approximately 104 million short tons in this year before contracting further to 98 million short tons in 2016.
— Coal production in West Virginia is expected to rebound moderately between 2017 and 2020, but for the remainder of the outlook period, statewide coal production is expected to fall, contracting to less than 96 million short tons in 2035.
— The downward trend in statewide production has been much more significant when compared to most of the nation’s other major coal-producing regions.
The most recent peak for the coal industry in West Virginia was in 2008.
“It is vital that we understand the recent decline in coal output and why it has occurred,” Deskins said. “We need to have a good idea of how much coal production we can expect to maintain in the state as we think about developing our economy going forward.”