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WVU reports finds coal production will decline by 2030

MORGANTOWN, W.Va. — Coal production will stabilize over the next few years, but then decline well below 80 million tons by 2030, according to a report from the Bureau of Business and Economic Research in the College of Business and Economics at West Virginia University.

The report titled “Coal Production in West Virginia: 2017-2040” looks at market and regulatory forces that affect coal production both domestically and internationally over the next few decades. It also highlights how West Virginia compares to other major coal-producing states.

On a national level, West Virginia, particularly the southern part of the state, had stepper declines in coal production compared to other states. Data shows production in the southern coalfields plunged 61 percent between 2008 to 2016, while northern West Virginia coal increased 8 percent over the same time period. Southern West Virginia mines, which accounts for more than two-thirds of the state’s coal output, now produces only 46 percent of the state’s coal.

In 2008, West Virginia produced nearly 158 million tons. In 2016, 80 million tons were produced.

“It was a gigantic collapse over a relatively short time frame,” said Brian Lego, research assistant professor with the WVU College of Business and Economics, who wrote the report.

Lego estimates coal production will reach about 89 million tons this year and remain in the upper 80 million ton range into the early 2020s. Production will fall below 80 million tons by 2030, he said.

“We’re probably going to be in the same upper 80 million ton range for the next several years, but after that it’s going to decline steadily. When you look at the 2030s, things will start to dip back down to what they were last year,” Lego said.

Lego said coal will rebound this year for two reasons: (1) because there is an increase in international demand for metallurgical coal to make steel and (2) because coal is needed in northern West Virginia to generate electricity at power plants.

The decline is happening particularly in southern West Virginia because more people are turning to natural gas due to its low prices and because people are turning elsewhere for energy.

“You just have this case of where there are fewer buyers for coal from southern West Virginia because those power plants were retired or the ones that stayed open just bought their coal from other parts of the country, so it’s kind of a double whammy for southern coal,” Lego said.

In addition, the report also provides scenarios to illustrate what the future of coal production looks like for national economic growth, natural gas prices and global coal demand.

To view the full report, CLICK HERE.

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