Coal, an elephant in the room and the economic future

Note: The following article was published in The Charleston Gazette on Nov. 25, 2012. Opinionsdo not reflect those of our newspaper or our parent publication Heartland Publications.

A major coal industry consultant, geologist Alan Stagg of Cross Lanes, recently told a Pittsburgh conference that Central Appalachian coal “is going to run out some day” because thick, easy-to-reach, inexpensive seams nearly are gone, leaving only costly coal.

“This is the elephant in the room,” he declared. “No one wants to acknowledge that reserve depletion is profound. Mining conditions are difficult, and the cost to produce is high. That is a physical fact. It’s not pleasant. Nobody wants to acknowledge it. That is a fact, and companies that ignore that fact will not do so well.”

In a follow-up interview with The State Journal, Stagg reiterated: “If you look at production for Central Appalachia, it keeps coming down. Northern Appalachian production keeps coming down. All of Appalachia keeps coming down.” He said “glory days” won’t return.

Central Appalachia — mostly southern West Virginia and eastern Kentucky — produced 24 percent of America’s coal in 2000, but only 17 percent in 2010. Federal experts predict that the region’s output will sink from 186 million tons in 2010 to just 72 million by 2024.

West Virginia produced 157.8 million tons in 2008, but the U.S. Energy Information Agency forecasts a decline to 90 million by 2020.

Stagg said pollution controls have little to do with the steady loss. Cheap Wyoming coal undercuts Appalachia, and cheap Marcellus gas is causing electric utilities to switch to gas fuel.

“It’s about markets,” the specialist said, adding: “You’ve got coal-fired plants that are closing. Some have been on the board for five years or more to be closed. They’re old. They’re inefficient. It’s no secret.”

Reporter Ken Ward Jr. outlined last week that 288 aging U.S. power-generating units (plants or parts of plants) are scheduled to be retired soon — and the Union of Concerned Scientists says 353 more should be mothballed.

An Appalachian transition seems visible. Coal corporation stock prices are sinking. Hundreds of West Virginia miners have been laid off this year, inflicting agony on coal communities.

Some West Virginia leaders remain blind to what’s occurring. They blame all the trouble on federal pollution controls. But the governor and Legislature should face reality. They should launch in-depth studies to pinpoint facts about the looming change, and also plan the best approaches to the state’s economic future.