Monday, September 07, 2009

When the coal runs out

When coal companies began moving into central Appalachia a hundred or so years ago, jobs came with them. And that is how coal companies have framed the debate over mining practices ever since.

Now environmental groups opposing mountain top removal and coal-fueled power plants are trying to frame the debate in terms of the environment. There is the loss of miles of streams, the destruction of viewsheds, the loss of habitat and species, the increase in carbon dioxide in the atmosphere, mercury in fish tissue, coal ash spills, the danger of slurry ponds.

Coal companies are fighting back with the same argument they’ve made for a century, and all over the region, people scared by the possibility of coal jobs going away are wearing “Coal, our future” t-shirts, and the state of Kentucky has even issued a “Friends of Coal” car license tag that pumps money into the industry advocacy group.

Guess which argument is resonating with the majority of Appalachian residents?

As James Carvel famously wrote on the wall of Bill Clinton’s presidential campaign headquarters, “It’s the economy, stupid.”

Well, what if it really is about the economy?

And what if the economic outlook for coal isn’t as rosy as the industry would have us believe?

We have been told repeatedly that there are 200 years of coal left in the Appalachians, but so far not one industry advocate I’ve heard has said what that estimate assumes. For one thing, it assumes all coal, not just economically mineable coal. For another, it makes no distinction between low-sulfur and high-sulfur coal.

According to the industry, the equation is very simple: Coal production good; environmentalists bad.

But what if the real danger to coal mining jobs isn’t environmentalists?

What if the real enemy is increased coal production?

What if 200 years is a fantasy, and what if we really have a tenth that long?

What if I’m not making this up?

The U.S. Geological Survey released the National Coal Assessment in July. That report says that coal companies in Appalachia can increase production levels for only 10 more years. That’s when economic coal reserves in the most heavily mined counties run out, and the production curve turns downward.


Production is expected to drop to less than a third of current levels before the end of the century.

What then?

There are undeniable economic truths in the coal industry. Coal is a boom or bust industry. When demand goes up, price goes up and the coal economy booms. Production goes up and employment goes up.

Up until now, the downside of that cycle was that companies tend to over-produce, causing market gluts, followed by declines in production and employment. But if the USGS report is right, we are about to enter a different kind bust cycle.

And this bust cycle won’t end with the next cold winter. It will continue until the coal runs out.

Demand will go up, price will go up, production will go up, and employment will go up, in the short term, but then the supplies will begin to dwindle. Price will continue to go up because supply will not be able to keep pace with demand. This time, production will be hamstrung by the lack of mineable coal. Employment will go down because there isn’t enough coal to warrant a large workforce.

Given this equation, coal becomes more than just an environmental emergency, it becomes an economic and an energy emergency.

We have to address these issues. If production continues to rise, jobs will run out.

As coal production declines, energy will become more and more expensive.

It’s only a matter of time – and less time than anyone is willing to admit publicly.

The question then, is what alternatives do we have? I’ll explore some options in the coming weeks, from reforestation to wind, to alternative mining techniques.

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