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Historic slide in coal jobs continues in Eastern Kentucky; jobs down 10.6 percent in 2nd quarter

The historic slide in coal jobs that has undermined the economy of Eastern Kentucky continued in the second quarter of the year, with the industry cutting 10.6 percent of its workforce in the region.

The layoffs left an estimated 5,889 employed at coal mines and facilities in Eastern Kentucky, according to a report released Friday by the state Energy and Environment Cabinet. That was the lowest total in more than a century.

In the same quarter five years ago, there were more than 13,000 coal-industry workers in Eastern Kentucky.

The loss of thousands of jobs in a place where coal is iconic has been a shock, drying up income for families and businesses. Some people have moved away to find work; others are getting by on less or relying on relatives for help.

“Every time another coal miner gets laid off, it affects everybody,” said Letcher County Sheriff Danny Webb. “It’s hard times.”

The downturn also has cut money that local governments get based on the amount of coal mined in a county.

Letcher County, for instance, receives $2.2 million less in coal-severance tax revenue than three years ago, said Judge-Executive Jim Ward.

The county cut a dozen or more jobs through attrition, and this year it reduced the amount of financial support for the sheriff’s office, Ward said.

Webb, who said he had already cut his staff, has asked the fiscal court to restore some of the funding.

If that doesn’t happen, he will have to lay off deputies, leaving periods when there is no deputy to respond to calls, Webb said.

The industry also cut jobs in the Western Kentucky coalfield in the quarter from April 1 through June 30.

At 2.9 percent, however, the drop was not as steep there, according to Friday’s report.

Overall, coal employment in Kentucky went down 7.8 percent in the second quarter, compared to the previous three months.

There were an estimated 9,605 people employed in the coal industry in Kentucky as of July 1, according to the report.

Production also dropped statewide by 7 percent. The decline was 8.2 percent in Western Kentucky and 5.4 percent in Eastern Kentucky.

Still, Western Kentucky continued to produce more coal overall than Eastern Kentucky, largely on the strength of one giant underground mine in Union County called the River View Mine, owned by Alliance Resource Partners.

The mine produced almost 2.2 million tons of coal in the second quarter, according to the state report. That was more than the entire production of any other county.

The tonnage coming out of some Eastern Kentucky counties, including Pike and Perry, went up. However, others saw big declines as coal companies idled mines. Production in the quarter dropped 30 percent in Harlan County, for instance, and 24 percent in Letcher County.

If no more mines close this year — which is doubtful — the state would be on track to finish the year with 64 million tons of coal produced, according to the report. That would be the lowest total since 1960.

That was at the bottom of a steep drop in coal production and jobs that led hundreds of thousands of people to leave Eastern Kentucky for work, and helped make the region emblematic of poverty in America.

A number of factors have combined to sap demand for Kentucky coal, including competition from relatively inexpensive natural gas and from cheaper coal mined elsewhere in the U.S.

The price difference hurts Eastern Kentucky in particular.

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A week ago, the spot-market price of a ton of coal from Central Appalachia — which includes Eastern Kentucky — was $49.95 a ton, according to the U.S. Energy Information Administration. That compared to $34.35 for coal from the Illinois Basin — which includes Western Kentucky — and $11.55 from the Powder River Basin in Wyoming, the agency said.

Tougher federal rules to protect air and water quality also play a role in the downturn.

Utilities have switched from coal to cleaner-burning natural gas in order to produce electricity because of air-quality rules, in addition to price considerations.

A weak export market also affects demand for coal from the Eastern U.S., said Elias Johnson, an analyst for the federal Energy Information Administration.

“All these factors play a role, and the combination of them is really depressing Central Appalachian production,” Johnson said.

There are efforts underway to diversify and improve the economy of Eastern Kentucky, such as the Shaping Our Appalachian Region (or SOAR) initiative.

Gov. Steve Beshear and U.S. Rep. Hal Rogers started the effort in late 2013 to come up with ideas to improve the economy and a plan to put them in place.

Ward, the Letcher County judge-executive, said the initiative has not created many jobs so far but has identified a lot of good ideas. Now it will take money to put them in place, he said.

Beshear and Rogers have said there won’t be a quick turnaround for Eastern Kentucky, but that they are pleased with the progress of SOAR.

Meanwhile, the slide for Kentucky coal is not over, Friday’s report cautioned.

Most of the coal mined in Kentucky is used to generate electricity, both in Kentucky and in several other states. Of the power plants that now use Kentucky coal, 17 have announced they will shut down coal-burning units by the end of the year, and seven more plan shutdowns by 2017, the report said.

Taken together, those plants account for a third of the current coal production in Kentucky, according to the report.

This article was written by BILL ESTEP from The Lexington Herald-Leader and was legally licensed through the NewsCred publisher network.

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