Monday, July 21, 2014

Coal goes bust in E. Ky. and booms in Wyo., but even there some wonder for how long

The U.S. coal industry is under perhaps its greatest stress ever, from natural gas and environmental regulations, but some areas still boom while others bust. Eastern Kentucky miner Henry Gibson told Bloomberg writer Mark Drajem, "We've gotten so dependent on coal, it's like we're on drugs." But while Central Appalachia is going through withdrawals, Wyoming is living the high life. "The reason: Kentucky’s coal costs three times as much to mine as Wyoming’s," Drajem writes in a detailed examination of the factors in both places.

"In the wide, vast plains of Wyoming’s Powder River Basin, where coal can be scooped out and piled high onto railcars headed for Texas and Midwest power plants, production is on a modest upswing," Drajem reports. "That’s sparked a boom in the town of Gillette, where the local unemployment rate is 2.9 percent, less than half the nation’s 6.1 percent, and the median family income is $77,000, more than 40 percent higher than then national average. Within the past year four new frozen yogurt shops opened, along with the $5.5 million Jordan’s Western Dining steakhouse."

"The scene is very different along Kentucky’s jagged eastern edge," Drajem writes. "The cheapest, easiest coal to mine was carved out decades ago, and now mining companies are shedding workers and seeking bankruptcy protection. The unemployment rate is 14.8 percent, and doctors are drug-testing their own patients to make sure they are taking—rather than hawking—pain medication."

Wyoming coal production doubled from 1990 to 2008, and nine of the nation's 10 largest mines are in the state, with the other one in neighboring Montana, Drajem writes. In southeastern Kentucky's Harlan County, only 27 of the 87 licensed mines are active, and "Harlan produced 4.6 million tons of coal last year, the lowest total since 1920. The county shed more than half its population in the past six decades, and locals say one of the only booming local businesses is renting U-Haul trucks for those fleeing."

"The coal industry sees the Appalachian travails as a warning signal," Drajem writes, quoting Kentucky Coal Association President Bill Bissett: "Eastern Kentucky is ground zero for what the coal industry is going through in this country." Clean Energy Action of Boulder, Colo., says U.S. mining will become increasingly expemnsive. “As they extract more and more of the coal, the cost of producing it rises,” Zane Selvans, author of a report for the group, told Dragem, who writes, "What Kentucky is experiencing today, many mines in Wyoming may face in the next seven to 20 years, he predicts." (Read more)

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