The coal industry has recently planned to cut production by 20 to 30 million tons per year in the eastern United States, according to Thomas Hoffman, the vice president of external affairs at CONSOL Energy.
‘’A lot of that is going to happen in central Appalachia, which means the southern West Virginia mines, where the geology is more complicated,'’ he said.
Coal mining is like apple picking, according to Richard Bajura, director of the National Research Center for Coal and Energy at West Virginia University. The coal closest to the ground, like the lowest apples, are harvested first.
Bajura’s center is working on the industry’s ladder to find alternate ways to extract and use coal.
Now, the harder-to-mine coal costs more to mine, and those mines are being closed as demand has fallen. Bajura says this points to a rosier picture for coal research at least.
‘’We’re going to need new technology and new research to be done to maintain production (of coal and energy),'’ he said.
Some companies are using the unusual combination of low prices and high production costs to their advantage. Last week, Massey Energy, one the largest coal producers in the state, reported to Wall Street that profits were up and costs down.
Massey’s strategy is to buy mines that already have orders to sell coal at high prices. But the mines also have high costs for getting the coal out of the ground. Massey then closes those mines and fills the order with coal from mines where production costs are lower while still selling the coal at the higher price, according to The Associated Press.
But West Virginians depend on coal for two things: taxes and jobs.
The tax revenue taken in from coal is expected to have peaked this year. Most taxes on coal depend on tonnage and price, both of which have been falling over the last five years, according to Mark Muchow, the state’s deputy secretary of revenue.
Citing research from economists at WVU, Muchow said overall revenue from coal taxes is expected to fall from $340 to about $290 gradually over the next couple of years.
Though revenue is falling, the industry is still hiring.
‘’You go to the mayors and town councils of a 100 smaller places in West Virginia and ask, ‘What are your biggest challenges?’ They wont say drugs. They’ll say, ‘Keeping our young people around,”’ said Hoffman, the CONSOL vice president.
‘’We’re offering jobs that have good pay and career opportunities built into them that not only allows people to stay in the area … but I’ll also be surprised if people don’t come back,'’ he said.
CONSOL is hiring its first generation of new miners in a long time just to keep staffed, he said. The average CONSOL employee is 54 years old.
‘’Last year, we hired 1,000 people, but our company head count went up only 100,'’ he said. The other 900 retired.
The jobs are also changing due to technology. A lot of underground equipment is now software driven, and less brute force is needed below the ground.
Though some environmentalists are looking for ways to replace fossil fuels, demand for coal is still high, making up 70 percent of the nation’s electricity along with natural gas.
‘’Everyday we find new and interesting ways to use electricity,'’ Hoffman said. ‘’Fifty years from now when you’re an old man and I’m dead, I’m not sure w hat we’ll use, but coal is the foreseeable future.'’/By Ry Rivard
Source: da.wvu.edu
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