Coal Production Down, Unlikely to Rebound Soon

Story by Pam Kasey
The State Journal (WV)
Posted Thursday, July 23, 2009 ; 06:00 AM

Coal production is in a slump.

“It is occurring,” said West Virginia Coal Association President Bill Raney.
“It’s a function of the economy. They’re not making as much steel, not needing as much electricity,” Raney said. “And it’s a function of the cheap price of natural gas,” he added. “Some (power) plants can switch — and they do.”

Nationwide, coal production is down 5.6 percent year-to-date through July 11, 2009, compared with the same period in 2008, according to the U.S. Energy Information Administration.

But in West Virginia, production is down 8 percent over the same period.

And in southern West Virginia, it’s down more than 11 percent.

In the northern part of the state, CONSOL Energy, for example, suspended longwall operations at its Blacksville No. 2 mine in June.

The company reassigned workers and stated its intention at that time to restart longwall operations on July 18, but has not done so according to the Dominion Post in Morgantown and admits layoffs are possible.

In the southern part of the state this year, Patriot Coal closed its Jupiter mining complex, idled the Remington complex and Black Oak mine and cut back production at the Wells and Hobet complexes — citing, in part, “soft market conditions.”
The Remington and Black Oak actions alone eliminated an estimated 400 positions.
More commonly though, Raney said, companies are cutting back hours in an attempt to prevent layoffs.

“We have operations moving from six 10-hour days to five 10-hour days or from five 10-hour days to four ... ,” he said. “What they’re wanting to do is to maintain their people, keep them working.”

Even when the economy turns around, it’s going to take time for coal demand and production to rise again. “The stockpiles have been built over the last year at the power plants, the loading facilities, the mines, to almost the maximum extent possible,” Raney said.

In fact, stocks held in April by electric power producers, the largest users of coal, were at their highest point in 10 years.