What About Coal Communities?



Author: Velocity Suite Data Analyst

The Overlooked Impact of Lower Coal Demand

It is no secret that coal companies are suffering from a decrease in coal-fired power generation. Various factors such as cheap, reliable natural gas and increased regulation on emissions are influencing many power plants to decrease their coal intakes. Due to multiple coal giants filing for Chapter 11 bankruptcy along with a plethora of mine closures in the past few years, coal-oriented communities are beginning to suffer.

Employee Count ABB
 
In Q4 of 2011, US coal mines employed almost 94,000 people. At the end of 2015 that number had been reduced to less than 61,000. That translates to a 35% drop in employment in just four years. Communities primarily dependent on coal mines for employment are witnessing higher unemployment and negative economic effects.

Coal Map #1 ABB
 
The map above displays the Central and Northern Appalachia coal basins during the third quarter of 2008. The combined basins maintained over 900 producing mines and employed 55,000 people.

Coal Map #2 ABB
 
A few years later, the number of employees fell to just over 31,000 as the number of producing mines declined over 50 percent. Decreased demand for coal is effecting the size and quantity of producing mines and threatens the livelihood of coal communities that rely on mine productivity.

Coal Mine Production Chart ABB
 
Clearly there is a strong correlation between mine production and the number of people employed by mines; this is to be expected. However, with the recent drop in production, government officials are recognizing a need for support in these communities.

On February 3, 2016 the RECLAIM (Revitalizing the Economy of Coal Communities by Leveraging Local Activities and Investing More) Act was introduced. The bill would release $1 billion from the Abandoned Mine Land Reclamation Program (AML) in an attempt to energize the communities that have heavily relied on coal. Currently, a tax on every ton of coal is in place which feeds the AML program in order to pay for the reclamation process. The RECLAIM Act would allow this money to be taken out of the program for reclamation of old abandoned mines, and aid the now unemployed workforce. The spotlight on this issue is growing, and suffering coal communities have the opportunity to become stable once again.

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