Coal Age Magazine - For more than 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.
Issue link: https://coal.epubxp.com/i/718122
26 www.coalage.com August 2016 u.s. coal report continued both North American and Luminant has dropped by a little less than 4 million tons, Alliance has grown its production by more than 13 million tons. Looking toward the future, the list will continue to evolve. It's already clear that overall production in 2016 will be lower than 2015. Next year, Murray Energy could move into the No. 4 position displacing Al- pha Natural Resources, the bulk of which will now be known as Contura Energy, which is expected to produce 50 million tons. The new Alpha Natural Resources will drop into the mid-teens on the top 20 list. ERP Compliant Fuels acquired sever- al Patriot properties and longwall opera- tions from Cliffs Natural Resources, which should place them among the midpoint of the top 20 U.S. coal producers. Regional Shifts in Coal Employment Comparing the number of mines and employment figures from 2015 to 2010 reveals the market shifts that have taken place. The number of coal mining opera- tions have declined from 1,287 in 2010 to 854 at the end of 2015. Overall employ- ment in the coal industry has declined by 23% to 57,992 miners from 75,327 miners in 2010. The mines in the eastern U.S. have suffered the most job losses. Employment in Kentucky and West Virginia dropped by 7,218 (46.1%) and 4,930 (26.2%), respec- tively. West Virginia saw more than 100 mines close in five years. In Kentucky, the number of mines dropped by about one- half from nearly 400 in 2010 to a little more than 200 in 2015. With a number of new longwall mining operations being commissioned, coal produc- tion and employment grew in Illinois during the last five years. Production in Indiana has remained about the same, and employment grew slightly. If the ILB, which includes Illinois, Indiana and western Kentucky, has stabilized or showed signs of improvement during the past five years, then eastern Kentucky, an area that desperately needs jobs, has felt the full force of the market downturn. In the American West, the impact during the last five years has been a mixed bag. Sub- bituminous coal production in Wyoming and Montana has slowed. Production in Wyoming actually dropped more than 66 million tons, or 15%, while employment only dropped 2.8%, which speaks volumes about the econ- omies of scale with those operations. The lignite mining operations in North Dakota remained about the same, four mines pro- ducing about 29 million tons, but employ- ment grew. Production in Montana declined by 2.8 million tons and employment grew, reflecting the commissioning of a new un- derground production facility (Signal Peak), which would require more manpower. The western bituminous mines in Colorado and Utah suffered declines on a similar percentage level as the eastern U.S. mines, albeit on a much smaller scale: 28.7% and 35.3%, respectively. Operating 10 mines or less throughout the period, they have lost more than 1,142 coal mining jobs. Trends in Power Generation Roughly 90% of the coal mined in the U.S. is burned for electrical power generation. The Energy Information Administration (EIA) recently reported that coal-fired gen- erating capacity in the United States has fallen 15% over the past six years, dropping from 317 gigawatts (GW ) at the end of 2010 to 276 GW in April. The EIA attributes the change to the competitive pressure from low natural gas prices, which lowers the marginal cost of natural gas-fired genera- Table 5 — Energy Generation Net Generation by Energy Source (millions of kilowatt-hours) Coal Natural Gas Nuclear Hydro Other Total 2010 1,847,290 987,697 806,968 260,203 222,902 4,125,060 2011 1,733,430 1,013,689 790,204 319,355 243,463 4,100,141 2012 1,514,043 1,225,894 769,331 276,240 262,257 4,047,765 2013 1,581,115 1,124,836 789,016 268,565 302,432 4,065,964 2014 1,581,710 1,126,609 797,166 259,367 328,754 4,093,606 2015 1,356,057 1,335,068 797,178 251,168 347,910 4,087,381 Net Generation by Energy Source (% of total) 2010 44.8 23.9 19.6 6.3 5.4 2011 42.3 24.7 19.3 7.8 5.9 2012 37.4 30.3 19.0 6.8 6.5 2013 38.9 27.7 19.4 6.6 7.4 2014 38.6 27.5 19.5 6.3 8.0 2015 33.2 32.7 19.5 6.1 8.5 Source: MSHA and the NMA Figure 1: Natural gas projections.