Coal production down across the state, continues trend
The Kentucky Department for Energy Development and Independence recently released its 16th edition of Kentucky Coal Facts, an annual report on the coal industry at the county, state, and national levels.
The majority of coal producing states saw decreases in both production and employment in 2015. Kentucky was no exception to that trend, with employment and production falling at almost twice the national rate.
In 2015, Kentucky had the third highest coal production in the country, with Wyoming and West Virginia remaining the largest coal producing states. Production in Kentucky fell by 20.8 percent to 61.4 million tons while national coal output decreased 10.3 percent. Kentucky had the second highest coal employment in the nation employing 9,557 people in surface mines, underground mines, offices and in preparation plants. However, Kentucky coal employment dropped by 2,124 workers or 18 percent during the year. Only neighboring West Virginia lost more coal employment in absolute terms. At the national level, coal employment fell by 11.8 percent in 2015.
At the regional level, employment and production have continued to fall in eastern Kentucky. Historically, the region was home to the vast majority of the state’s coal miners, with 66,410 people employed in 1948. Now the region is approaching an employment level similar to that of western Kentucky, employing an average of 5,947 persons in 2015. Coal production in eastern Kentucky totaled just over 28 million tons in 2015, a 25 percent decline from the prior year. The cause for this unprecedented decline in eastern Kentucky is a combination of the lessened availability of easily accessible coal seams, increased price competition from other coal-producing basins, federal regulations, and increased competition from low-cost natural gas resulting from hydraulic fracturing and horizontal drilling.
In western Kentucky, production declined by 16 percent to 33.3 million tons in 2015 compared to 2014. Despite this decline, the region accounted for 54 percent of the total coal produced in Kentucky during 2015. The region also suffered losses in coal employment, with each of the top four coal producing counties losing jobs in 2015. While western Kentucky has historically produced less coal and employed fewer people than eastern Kentucky, it has experienced less volatility.
At the county level, Union County was the largest producer with 9.1 million tons. While that level of production is far more than any other county in Kentucky, Union county has seen a very sharp decline in production over the past five years, falling from almost 14 million tons in 2010, a rate of around one million tons per year.
Union County has suffered a sharp decline in coal employment along with a decline in production. Employment in the coal industry has fallen by 44 percent since 2014, with 689 people now employed. This is a sharp decline from a four-year trend from 2010 to 2014, where coal employment largely remained steady with about 1,200 people employed in mining jobs.
In eastern Kentucky, Pike County remained the largest coal employer and producer. Coal production there declined 33 percent to 6.9 million tons last year. The highest recorded production in Pike County was in 1995 at more than 35 million tons, and has declined at an average rate of 1.4 million tons per year ever since. Employment peaked in Pike County at 14,932 in 1948 and declined to 1,591 in 2015.
Deliveries of coal mined in eastern Kentucky have continued to decline since 2008. Known shipments of eastern Kentucky coal totaled 80 million tons in 2008, but have fallen to 17.4 million tons in 2015. Much of this decline is the result of the closure or idling of coal-fired power plants throughout the southeastern United States, which are the largest consumers of eastern Kentucky coal.
Coal-fired power plants in Kentucky that had traditionally burned eastern Kentucky coal have alternatively begun to use coal mined in Wyoming, Illinois and Indiana. In western Kentucky, coal deliveries have remained between 30 and 40 million tons since 2007. The steady demand for Western Kentucky coal is largely due to the region’s lower extraction cost which leads a lower delivery price. Also, much of western Kentucky’s coal is consumed within the Commonwealth, making transportation and delivery costs lower as well.
For more in-depth information, including the history of coal in Kentucky, coal’s relationship to electricity generation and detailed county profiles, please visit http://energy.ky.gov/Pages/CoalFacts.aspx.