Kentucky suffers as coal use rises everywhere but in U.S.

06/18/2013 3:53 PM

08/11/2014 12:35 PM

Eastern Kentucky coal country is filled with people competing for nonexistent jobs, tied to the area by family and unable to sell their homes even if they want to leave.

People such as 50-year-old Frank Dixon, who was laid off from a coal mine right before Christmas. He has a son in college, another in high school and a mother in failing health. Dixon has worked in the coal industry since he was 21 years old, and he’s struggling to figure out how to make a living.

“I’ve been looking for a job. But there are so many miners laid off in this area that wherever you go there’s already been 20 or 25 other people there looking for the same job, or for any job,” Dixon said.

While Dixon and thousands of others in the United States have lost their jobs, coal is booming in the rest of the world. The International Energy Agency’s latest report forecasts that coal will become the world’s dominant fuel, with global burning of the fossil fuel rising by 1.2 billion tons over the next four years.

That’s the equivalent of adding the existing coal consumption of the U.S. and Russia combined. The agency’s executive director, Maria van der Hoeven, said coal made up a greater share of the global energy mix every year. “If no changes are made to current policies, coal will catch oil within a decade," van der Hoeven said.

The agency says America’s glut of cleaner, cheap natural gas is pushing out the use of coal in the United States. It considers that a good thing, saying that the rest of the world should learn from the American experience of how to reduce coal use and lower the carbon emissions blamed for global warming.

“Europe, China and other regions should take note,” van der Hoeven concluded.

The agency expects that coal demand will grow in every region of the world – except the United States. There were an estimated 2,000 layoffs last year in the mountainous coal counties of Eastern Kentucky. The U.S. Energy Information Administration forecasts that coal production in that region will be half as much in 2018 as it was in 2010.

Some Eastern Kentucky counties already have unemployment rates of 13.5 to 17 percent and are bracing for an expected continued decline in coal jobs. The loss of tax revenue from coal production is creating million-dollar budget shortfalls for county governments struggling to pay their bills.

Coal-burning power plants are closing or switching to natural gas. Even the Big Sandy electric power plant, in the heart of Kentucky’s coal country, plans to shut its coal-burning boilers rather than retrofit the plant to meet environmental regulations. The Sierra Club counts 54 coal plants that closed or announced plans to close in 2012, and 11 more in just the first month of this year, reacting to the nation’s natural gas boom and tighter environmental regulations.

That leaves 384 coal-burning power plants in the United States, according to the Sierra Club, down from 521 the group tallied at the beginning of 2010. Coal accounted for more than half of America’s power generation four years ago and is now down to about a third, similar to the amount that natural gas fuels.

At the same time, coal is on the rise globally. Even Europe, which touts green energy initiatives, is increasingly burning coal because it’s cheaper than available alternatives and because of a distaste for nuclear power in the wake of Japan’s 2011 Fukushima disaster. Most American coal exports are going to Europe.

But the global growth for coal is projected to come from India and particularly China, a nation that accounted for a whopping 87 percent of the 374 million-ton increase in worldwide coal burning in 2011, according to U.S. energy data. Coal has fueled China’s economic rise, but many of its cities are shrouded in smog.

China is now burning almost as much coal as the rest of the world combined, according to data compiled by the U.S. Energy Information Administration.

American coal companies are hoping that foreign demand will fill the gap left by the shrinking use of coal at home. But exports to China and India aren’t going to reverse the decline of the Central Appalachian coalfield, which includes the century-old industry in Eastern Kentucky, said James Stevenson, a coal analyst with the economic forecaster IHS Global Insight. The easiest coal in the region has already been mined, analysts say, and what’s left are thinner seams that are more difficult.

“It’s just really too expensive to out-compete the alternatives China and India have,” Stevenson said.

Five coal export terminals are proposed in Washington and Oregon, meant for exports of coal from mines in the Western United States to Asian nations. But they’ve met controversy in communities worried about the noise of coal trains and the climate impact. Stevenson said China had closer sources of coal and wouldn’t need that much from America. “I think one or two export terminals get built; I don’t think the economics are there to support five,” he said.

A deal to export Kentucky coal to India was announced with great fanfare last summer. But its future is unclear, with the first shipment months behind schedule.

“The pricing doesn’t make a lot of sense on that particular deal,” said John Morgan of the coal consulting firm Morgan Worldwide, in Lexington, Ky.

Easier places for India to get its coal are South Africa and new mines being developed in Mozambique, Morgan said. He said the good news for U.S. coal was there should be continued foreign demand for the high-grade metallurgical coal, found in West Virginia and places in Kentucky, that’s used to make steel.

But the forecast is tougher for producers of the central Appalachian coal that for generations supported Eastern Kentucky jobs and fueled American power plants.

Laid-off Kentucky coal worker Dixon said he believed that tight Environmental Protection Agency rules had led to the closure of the surface mine where he worked. “The EPA is playing such a hard role in it, and that’s kind of a good thing. But it’s kind of put us completely out of work,” Dixon said.

Dixon is saddened by what’s happening to Harlan County, where he grew up and still lives. People are forced to leave their families to look elsewhere in search of work, hoping to send for them later.

“This area here, everything, hospitals all the way down to the dollar store, always depended on coal mining. It’s just terrible, really, really terrible. It’s dried up,” he said.

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