News Column

Kentucky Coal Jobs Lowest Since 1927

August 8, 2013

Bill Estep

coal

The number of coal jobs in Kentucky continued dropping during the second quarter of this year, hitting the lowest level since the state began tracking that figure in 1927, according to a new state report.

All the job losses from April through June happened in the Eastern Kentucky coalfield, where competition from natural gas and other factors have battered the industry.

Mines in the state's smaller western coalfield added 65 jobs during the second quarter, while mines in the eastern end of the state cut 916 jobs, according to the report from the Kentucky Energy and Environment Cabinet.

Those losses came on the heels of more than 4,000 coal-industry layoffs in Eastern Kentucky in 2012 and a continued slide during the first three months of 2013.

As of July, on-site employment at all Kentucky coal mines and related facilities, such as preparation plants, was estimated at 12,342 -- 7,951 in Eastern Kentucky and 4,391 in Western Kentucky.

Officials in Eastern Kentucky said some laid-off miners have moved away to get work, while others are driving long distances for jobs or working at mines so far from home they have to live away from their families for extended periods.

Some miners have given cars and trucks back to lenders because they couldn't make the payment and have cut spending; the ripples have spread and hurt the entire economy, said Letcher County Judge-Executive Jim Ward,

"It's tough on everybody up here," Ward said Wednesday.

State Rep. Leslie Combs, D-Pikeville, said a lot of people who have always worked hard and still want to are "scared to death" because they don't know what to do.

She has often fielded calls from people wanting help getting various jobs. Now, Combs said, "I'm getting rashes of calls for the same job."

The numbers tell a different story in the state's two coal-mining regions.

Since mid-2011, Eastern Kentucky has lost more than 5,700 coal jobs, or nearly 42 percent, while the decline in Western Kentucky has been 105 jobs, or 2.3 percent, according to the report.

Western Kentucky coal was once at a disadvantage in meeting clean-air rules because it has a higher sulfur content, but the installation of scrubbers at many power plants has helped fuel a comeback in the region.

Eastern Kentucky had long produced more coal than Western Kentucky, but that dynamic reversed in the first quarter of 2013 and continued in the second, when the western end of the state accounted for 50.2 percent of all production.

And Union County, in the western end of the state, again produced more than Pike County, which was the state's biggest producer for decades.

Statewide, coal production fell 1.3 percent in the second quarter. The percentage drop was about the same in the east and west, where production had gone up in the first quarter.

Looking longer term, however, production in Eastern Kentucky has declined 41.4 percent since mid-2011, the cabinet said.

The coal industry in Eastern Kentucky faces a number of challenges, including competition from relatively cheap natural gas and lower-cost coal from other parts of the country; higher mining costs and declining productivity, which reflect the fact that much of the best coal has already been mined; and tougher rules aimed at protecting air and water quality.

The current downturn continues a history of up-and-down production swings in Eastern Kentucky, but federal analysts have predicted production won't return to the level of even a few years ago.

Bill Bissett, president of the Kentucky Coal Association, said the industry hopes to at least maintain production in Eastern Kentucky the rest of the year, rather than weathering continued decline.

There also is concern about what will happen in early 2014 after supply contracts expire at the end of this year, he said.

The industry is looking to boost exports to make up for a loss in domestic markets, he said.

The downturn in production over the last two years has hurt coal-county budgets as well as workers, because counties receive a portion of the state severance tax on coal mined locally.

Ward said Letcher County's budget this fiscal year is $9.4 million, down from $10.7 million the previous year.

The county cut money for senior citizens, the sheriff's office, tourism promotion and other programs to deal with the shortfall, Ward said.

The drop in coal-severance revenue to counties will impact an ongoing debate over whether to give coal-producing counties back a greater share of the tax money derived from mining, Combs said.

Combs and Rep. Fitz Steele, a Democrat from Harlan, have pushed a measure to give each county all the severance tax from coal mined locally. Much of the money now goes to the state's General Fund.

That may not be a realistic goal, but with the coal counties suffering, they need a greater share of the money, Combs said.

"We need our tax base coming to us," Combs said.

Bill Estep: (606) 678-4655. Twitter: @billestep1.

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