Complex Market Forces Are Challenging Appalachian Coal Mining

http://www.americanprogress.org/issues/green/report/2014/10/06/98371/complex-market-forces-are-challenging-appalachian-coal-mining/
Center for American Progress
Complex Market Forces Are Challenging Appalachian Coal Mining
By Alison Cassady
October 6, 2014

Appalachian coal producers recently announced a new round of layoffs, eliciting a flurry of press releases from politicians that blamed the Environmental Protection Agency, or EPA, for the coal industry’s problems. While Appalachian coal production is falling, the EPA’s rules to cut carbon pollution and improve air quality are not the driving force behind the coal industry’s decline in Appalachia.

In September 2014, Alpha Natural Resources announced that it had laid off hundreds of workers in the company’s West Virginia coal mines, with the potential for more layoffs later this year. Earlier in the month, Patriot Coal also announced layoffs at its operations in Boone County, West Virginia. In their press releases, both companies acknowledged the challenging market conditions but placed an equal amount of blame on the EPA and its rules to clean up fossil-fuel-fired power plant pollution. Rep. David McKinley (R-WV) quickly blamed the EPA as well, saying these layoffs were “another example of how the lives of thousands of men, women, and children are being ripped apart by the actions of the EPA and its callous disregard for hardworking Americans.” West Virginia Gov. Earl Ray Tomblin (D) promised to “continue our efforts against the federal regulations that devastate our state, our communities and our families by forcing power plants in America and around the world to use a less attractive fuel source.”

The reality is much more complex than these sound bites portray. Appalachia’s coal communities are confronting a confluence of market factors that are years in the making. Alpha Natural Resources Chairman and CEO Kevin Crutchfield acknowledged as much in a document for investors, describing the coal market as “extremely challenging.” He cited numerous market factors, including low domestic and international prices for both thermal and metallurgical coal, soft natural gas prices, and increased imports—primarily from Colombia.

Many coal mines in Appalachia are closing or idling, with potentially significant effects on communities across the region. In order to mitigate these effects, it is important to understand the compounding market conditions contributing to the decline of Appalachian coal. Those who point fingers at environmental regulations are obscuring a more intractable reality about the market challenges confronting the Appalachian coal industry. Placing the blame on the EPA’s efforts to reduce pollution, mitigate climate change, and protect human health may provide an attractive political argument, but it simply clouds the discussion and slows progress toward meaningful solutions.... MORE at link provided above.