Coal production in Central Appalachia is likely to continue its 12-year decline,
and an environmental consulting firm said Tuesday it's time policy makers and
legislators in four states work to diversify the region's economy.
issued by Downstream Strategies of Morgantown predicts production in West Virginia,
Kentucky, Virginia and Tennessee will fall nearly 50 percent within a decade and
urges those states to adopt laws, low-interest loan programs and other measures
to support the development of renewable energy sources.
The report blames
the decline in part on increased competition from other coal-producing regions
and other sources of energy, such as natural gas. It also points to the depletion
of the most accessible, lowest-cost coal reserves and increasingly stringent environmental
The coal industry has long been concerned about Central Appalachia's
decline and faces even more challenges as legislators and the public grow interested
in global climate change, renewable energy options, and cap-and-trade legislation,
said Chris Hamilton, vice president of the West Virginia Coal Association.
the same time, the industry is struggling with a low supply of qualified workers
and record levels of imported coal from Colombia, Venezuela and Indonesia. To
protect both the industry's short- and long-term health, policy makers at all
levels must recognize and protect coal's role in providing low-cost, reliable
energy, he said.
The industry does not object to moderate growth in renewable
energy, he added.
"There's general acceptance that we're going to need
every form of power available to accommodate future growth in our energy demands
in our country, and it makes sense to have a balanced energy portfolio," Hamilton
said. "But coal is a finite resource and it should be managed within the context
of an overall energy portfolio based on volume and reserves."
The new report
was authored by Downstream Strategies President Evan Hansen and energy and climate
change researcher Rory McIlmoil.
McIlmoil is a former community activist
with Whitesville-based Coal River Mountain Watch, which has been advocating construction
of a wind farm on a mountaintop destined for strip mining, but Downstream Strategies
says its work was not funded by any group.
The report contends new jobs
and tax revenues could be created by focusing on renewable energy like wind, solar
and hydropower, and it says states should require that 25 percent of their energy
portfolios come from renewable sources by 2025.
Last year, West Virginia
lawmakers approved a measure requiring that 25 percent of the state's electrical
output come from renewable energy sources by 2025.
The report also calls
for tax credits, clean energy bonds, mapping projects and other measures to encourage
investment in alternatives to coal, including state-funded programs to measure
wind speeds that would help evaluate wind farm sites.
On Monday, Virginia
Gov. Bob McDonnell called on lawmakers in that state to approve a tax credit of
$500 per position for employers who create green jobs over the next five years.
McDonnell also said he wanted to turn Virginia into an energy leader by leasing
off-shore drilling rights and increasing coal, natural gas and biofuel production.
Annual coal production in Central Appalachia last peaked in 1997 at 290
million tons, but fell to 235 million tons by 2008 even as national production
climbed, the report said. It also says new projections suggest the region's production
may drop another 46 percent by 2020, and 58 percent by 2035, to just 99 million
Data on the federal Energy Information Administration's Web site
shows variations among the Appalachian states in recent years.
production levels in Kentucky and West Virginia were up 4.4 percent and 2.8 percent
respectively from the previous year, production fell 2.5 percent in Virginia and
12.1 percent in Tennessee. Statistics for 2009 were not yet posted, but the EIA
estimates production fell more than 7 percent nationwide as consumption declined.
Power plants, in particular, cut coal consumption by 10 percent last year,
the agency said.
The agency predicts coal production in 2010 will still
be down by about 4.6 percent.
Coal's effect on the region, however, is
clear: In 2008, the industry employed some 37,000 people directly or indirectly,
sometimes as much as 40 percent of a county's work force. Severance taxes generate
hundreds of millions of dollars for state governments.
Yet some coalfields
counties have the highest poverty and unemployment rates in the region, the new
report says, "and due to the dependence on coal for economic development, any
changes in coal production will have significant impacts on local economies."
On the Net:
Downstream Strategies: http://www.downstreamstrategies.com/
West Virginia Coal Association: http://www.wvcoal.com/index.php