Published: September 16, 2016 |

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The number of coal jobs in the U.S. has fallen by almost 50 percent since its peak five years ago, analysts say.

The regions of the country most dependent on coal mining have experienced a significant decline in average employment since late 2011, with Campbell County registering the third-highest average decline, according to a recent report from Standard and Poor’s.

Coal employment in Campbell County reached a high in 2011, with an average of 5,671 workers. That number had fallen to 3,985 by the second quarter of this year.

Boone County, in West Virginia, and Pike County, in Kentucky, led the list of percentage decreases.

The statistics are not surprising, considering that the industry is mired in a bust. The price of coal recently hit a 30-year low and forced three large Wyoming operating companies into bankruptcy.

However, the numbers may suggest that coal companies are adjusting to a new normal, finding a balance with fewer employees and lower production, the report said.

There is uncertainty about whether the drop in employment in places like Campbell County is a short- or long-term phenomenon. The issue hinges on whether this bust is a temporary dip in the commodity cycle or a permanent shift in the way the U.S. receives its electricity.

Future restrictions on greenhouse gases underline the fact that coal will face more than just a market battle in the coming decades. That will cut into profits and pose a risk to communities that rely on coal for their livelihoods.

Energy Information Administration projections of how coal will weather the Clean Power Plan are not promising.

Under the plan, the administration reports, coal production in the West will decrease by 155 million tons between 2015 and 2040.

Powder River Basin coal, which benefits from its low mining costs and low amount of sulfur, accounts for about two-thirds of that production.

Last year, the West accounted for 55 percent of the nation’s coal production. Under the Clean Power Plan, that could drop to 52 percent.

Moreover, natural gas continues to be a major competitor for coal, both in terms of emissions and its relatively cheap price thanks to new drilling technologies, analysts say.

Despite market pressures, Campbell County remains the strongest producer of the 25 counties in the report, with 51.3 million tons of coal mined in the second quarter of this year. That’s approximately half what was mined in the fourth quarter of 2011.

Powder River Basin coal will likely make gains from its current slump, albeit slowly, said Chiza Vitta, an analyst for Standard and Poor’s. But the possibly of a fundamental change is also likely, he said.

Campbell County-based coal producer Cloud Peak Energy has weathered the bust better than some of its larger competitors but faces the same prospective market as large bankrupt companies such as Arch Coal and Peabody Natural Resources.

“We worked very hard over 2015 and the first part of 2016 to manage decreased demand while avoiding layoffs and believe our workforce is where it needs to be to meet demand for the rest of the year,” said Cloud Peak spokesman Rick Curtsinger.

As coal mounts a slow comeback, the company expects to adjust costs to meet a volatile market.

“Looking forward for the next few years, I think that coal demand will fluctuate from year to year, dependent on the weather and natural gas prices,” Colin Marshall, CEO of Cloud Peak, said in a recent statement. “We will have to get used to this to ensure we can come through the slow years and make money in the good ones, so we can invest in the long-term future of our business. This will mean that we will all have to be flexible in the way we work to allow costs to be controlled and shipments met when trains turn up.”

Source: (September 11, 2016) Star-Tribune

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