MORGANTOWN – Coal production in West Virginia is on a decline that is likely to continue, according to a report from West Virginia University.
The report from the Bureau of Business and Economic Research in the College of Business and Economics at WVU discusses the decline that has been occurring in coal production over the last several years and that likely will carry over into the future for West Virginia.
It cites the drive for stricter emission regulations for power plants and the diminishing use of coal as reasons for the decline, in addition to low natural gas prices. According to the report, West Virginia reached 158 million short tons of coal production in 2008, which dropped to only 95 million short tons in 2015 and is expected to fall to 68 million short tons in 2016.
“The industry saw a big drop in production over the last few years,” Brian Lego, research assistant professor at the WVU College of Business and Economics, told The West Virginia Record. “Going forward we expect things to level off over the near term, but then over the longer term that trend of downward production is expected to continue."
The expected coal production decrease will impact West Virginia in several ways as jobs will be lost and the state will lose revenue. Coal produced in the southern half of the state is used for both electricity and steel production, while coal produced in the northern half of the state is primarily used for electricity production.
“The coal industry, while it accounts for a relatively small percentage of jobs within the state, those jobs tend to be higher paying so those high-wage jobs are lost,” said Lego. “The industry accounts for somewhere around 16 percent of the gross state product. One of the things the state relies upon for cash collection is severance taxes, so with a drop in the output of coal and the price, state severance tax collections have fallen. That’s one of the reasons why the state is experiencing some difficulties with its budget.”
While natural gas production may be an area where West Virginia can recoup some of the lost revenue from coal, unfortunately it is not occurring in the same parts of the state that have coal production, creating a gap in jobs and financial resources.
“The state has seen a big jump in natural gas production over the past several years,” said Lego. "Unfortunately, the way things work geographically, the areas that have seen fast growth in natural gas production is not the same portion of the state that’s seen a rapid fall-off of coal mining jobs and coal production.”
Stricter emissions regulations for coal-fired power plants are also causing some of drop-off in coal production as plants look for ways to meet the regulations, often by reducing capacity.
“The easiest way that I think a lot of states are going to find to reduce carbon dioxide emissions from their power plants is to retire coal-fired capacity,” said Lego. “Ultimately, that will just cause the northern half of the state’s coal production to take a hit.”