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Coal mining in the United States

Total US coal production graph
Total US coal production, 1870-2011

Coal mining in the United States is an industry in transition. Production in 2016 was down 37% from the peak production of 1,162,7 million tons in 2006. Employment of 50,000 coal miners is down from a peak of 883,000 in 1923.[1] Generation of electricity is the largest user of coal, being used to produce 50% of electric power in 2005 and 30% in 2016.[2]:1 The U.S. is a net exporter of coal. U.S. coal exports, for which Europe is the largest customer, peaked in 2012, and have declined since. In 2015, the U.S. exported 7.0 percent of mined coal.[3]

Coal remains an important factor in the 25 states in which it is mined. According to the U.S. Energy Information Administration (EIA), in 2015 Wyoming, West Virginia, Kentucky, Illinois, and Pennsylvania produced about 639 millions of short tons (MST) representing 71% of total U.S. coal production in the United States.[4]

Coal has been a disappointment to investors. In 2015 four publicly-traded US coal companies filed for Chapter 11 bankruptcy protection, including Patriot Coal Corporation, Walter Energy, and the fourth-largest Alpha Natural Resources. By January 2016, more than 25% of coal production was in bankruptcy in the United States[5] including the top two producers Peabody Energy[6][7] and Arch Coal.[5] [8]. When Arch Coal filed for bankruptcy protection, the price of coal had dropped 50% since 2011[9] and it was $4.5 billion in debt.[5][9] On October 5, 2016, Arch Coal emerged from chapter 11 bankruptcy protection.[10]

Contents

HistoryEdit

Coal, primarily from underground mines east of the Mississippi was the nation's primary fuel source until the early 1950s. Surface (strip) and mountaintop removal mining overtook underground mines in the 1970s. In 2000, the majority of coal was produced west of the Mississippi.

ProductionEdit

In 2016, US coal mining declined to 728.2 million short tons, down 37 percent from the peak production of 1,162,7 million tons in 2006. In 2015, 896.9 million short tons of coal were mined in the United States,[11] with an average price of $31.83 per short ton,[12] worth $28.6 billion dollars.

Nationwide, US coal production peaked in 2008, and has declined since then, with 896 million short tons produced in 2015, representing a drop of 10.3% year-over-year, the lowest annual production level since 1986.[13][14]

Coal in the US (Million Short Tons)
Production[15]

[16]

Net Exports[17][18][19] Net Available
2000 1,074 46 1,008
2001 1,128 29 1,099
2002 1,094 23 1,071
2003 1,072 18 1,054
2004 1,112 21 1,091
2005 1,131 19 1,112
2006 1,163 13 1,150
2007 1,147 23 1,124
2008 1,172 47 1,125
2009 1,075 36 1,039
2010 1,084 62 1,022
2011 1,096 94 1,002
2012 1,016 117 899
2013 985 109 876
2014 1,000 86 914
2015 896 63 833
2016 738.7 50.5 688

1 short ton = 0.907184 metric tonnes

Coal production by regionEdit

 
Coal regions of the United States
 
2010 coal production by region in short tons (US Energy Information Administration
 
Coal production trends in the top 5 US coal states, 1985-2015, data from US Energy Information Administration

The three regions producing the largest amount of coal are Powder River Basin of Wyoming and Montana, the Appalachian Basin and the Illinois Basin. In the United States, coal production declined from 2008 but the decline was unevenly distributed. Production from the largest coal mining-region in the U.S., the Powder River Basin, with most of the coal buried too deeply to be economically accessible,[2] declined 16 percent, the Appalachian Basin declined 32 percent 2008 to 2014 and the Illinois Basin increased its production 39 percent from 2008 to 2014.[20] In 2015, five states—Wyoming, West Virginia, Kentucky, Illinois, and Pennsylvania—produced almost 3/4 of all coal production nationwide. Wyoming produced 375.8 million short tons representing 42% of U. S. coal production, West Virginia produced 95.6 million short tons or 11%, Kentucky was third with 61.4 or 7%, Illinois was fourth with 56.1 or 6% and Pennsylvania was fifth with 50.0 or 6%.[4]

As of 2014, twenty-five states produced coal. The coal-producing states were, in descending order, with annual production in millions of short tons:[21]

Coal production by typeEdit

The hardest coal, anthracite, originally used for steel production, heating, and as fuel for ships and railroads, had by 2000 dwindled to an insignificant portion of production. Softer bituminous coal replaced anthracite for steel production. The even softer sub-bituminous and lignite coals overtook bituminous in the 2000's.

 
Trends in underground versus surface mining of US coal, 1949-2011
 
Location of surface coal mines in the US
 
Locations of underground coal mines in the US

CompaniesEdit

Top ten coal-mining companies in the United States, 2014
Rank Company Million short tons/Year Percent of total production Notes
1 Peabody Energy 189.5 19.0% Declared bankruptcy in 2016
2 Arch Coal 135.8 13.6% Declared bankruptcy in 2016
3 Cloud Peak Energy 85.8 8.6%
4 Alpha Natural Resources 80.1 8.0% Declared bankruptcy in 2015[22]
5 Murray Energy 62.8 6.3%
6 Alliance Resource Partners 41.0 4.1%
7 Westmoreland Coal Company 35.6 3.6%
8 CONSOL Energy 32.2 3.2%
9 NACCO Industries 31.6 3.2%
10 Energy Future Holdings 29.7 3.0%
Annual owned production, 2014. Source:[23]

In 2014, the production owned by the top ten companies was 72.6% of total US coal production.[23]

Coal mining employmentEdit

 
Average annual number of coal miners, 1985 to 2015 (Data from St. Louis Federal Reserve Board)
 
Average annual number of employed coal miners in the United States, 1890-2014

By the end of 2016, the coal industry employed approximately 50,000 miners.[1]

US employment in coal mining peaked in 1923, when there were 863,000 coal miners.[24] Since then, mechanization has greatly improved productivity in coal mining, so that employment has declined at the same time coal production increased. The average number of coal mining employees declined to 50,500 in 2016.[25] This was below the previous low of 70,000 in 2003, and the lowest number of US coal miners in at least 125 years.[26][27]

Because of the sharp declines in the U.S. coal industry, the Harvard Business Review discussed retraining coal workers for solar photovoltaic employment because of the rapid rise in U.S. solar jobs.[28] A recent study indicated that this was technically possible and would account for only 5% of the industrial revenue from a single year to provide coal workers with job security in the energy industry as whole.[29]

ExportsEdit

 
In China, coal production increased and coal imports declined. (Trends 1980-2012)

The U.S. is a net exporter of coal.[30] US net coal exports increased ninefold from 2006 to 2012, peaked at 117 million short tons in 2012, then declined to 63 million tons in 2015. In 2015, 60% of net US exports went to Europe, 27% to Asia. The largest individual country export markets were the Netherlands (12.9 million short tons), India (6.4 million short tons), Brazil (6.3 million short tons), and South Korea (6.1 million short tons). Coal exports to China, formerly one of the major markets, declined from 8.3 million short tons in 2013, down to 0.2 million tons in 2015.[18][31]

In 2012, six coal export terminals were in the planning stages in the Pacific Northwest.[32] They were scheduled to be supplied by strip mines in the Powder River Basin. The export markets were South Korea, Japan, China, and other Asian nations. Like the Keystone Pipeline the building of the terminals raised environmental concerns with respect to global warming.[33] As of February 2016, four proposals for coal terminals had been withdrawn, leaving two still applied for. The withdrawals were ascribed to loss of demand and consequent lower coal prices.[34]

UsageEdit

In 2013, 92.8 percent of US internal coal consumption was for electricity generation. Other uses were industrial (4.7 percent), coke manufacture (2.3 percent), and commercial and institutional (0.2 percent).[35][36] However, in 2016, the EIA calculated that coal would provide only 30% of electricity generation nationwide with natural gas providing 34%, nuclear, 19%, and renewables, 15%.[37]

Both the tonnage of coal used for electricity (1,047 million short tons) and the amount of US electricity generated from coal (2.02 million GWh) peaked in 2007. By 2015, electrical generation from coal had declined to 1.36 million GWh, and coal's share of total electrical generation in the US fell from 48.5 percent in 2007 to 33.1 percent in 2015. Most of the decrease in coal electricity was offset by an increase in generation from natural gas-fired power plants.[38][39]

In 2006, there were 1,493 coal-powered generating units at electrical utilities across the US, with total nominal capacity of 335.8 GW[40] (compared to 1024 units at nominal capacity of 278 GW in 2000).[41] Actual power generated from coal in 2006 was 227.1 GW (1.991 trillion kilowatt-hours per year),[42] the highest in the world and still slightly ahead of China (1.95 trillion kilowatt-hours per year) at that time.[43] In 2000, US production of electricity from coal was 224.3 GW (1.966 trillion kilowatt-hours per year).[42] In 2006, the US consumed 1,026,636,000 short tons (931,349,000 metric tons) or 92.3% of coal mined for electricity generation.[44]

As of 2013, domestic coal consumption for power production was being displaced by natural gas, but production from strip mines utilizing thick deposits in the western United States such as the Powder River Basin in northern Wyoming and Southern Montana for export to Asia increased.[45] In 2014, 3.0 percent of the coal shipments from Montana and Wyoming were exported.[46] The 2014 coal exports from the two states of 13 .4 million short tons represented an increase of 1.2 million tons over 2012 export levels, which is 0.3 percent of the states’ 2014 total coal shipments of 439.8 million tons.[47]

Coal mining on federal landsEdit

As of 2013, 41 percent of US coal production was mined from federal land, almost all of it in the western US, where federal coal makes up about 80 percent of mined production. The federal coal program is overseen by the Bureau of Land Management (BLM) under the US Department of Interior. Federal coal lands are leased by competitive sealed bids, for the highest bonus (initial payment) offered. In addition, the government receives an annual rental of $3 per acre, and a fixed percentage royalty of the market value of coal produced. The royalty is 8 percent for underground mines and 12.5 percent for surface mines.[48] In 2014, the program generated about $1.2 billion in lease bonuses, rentals, and royalties for coal mining on federal lands.[27]

In January 2016, the Obama administration announced a three-year moratorium on federal coal lease sales on public land, effective immediately, and leaving around 20 years-of coal production under way. He noted that the program had not had a "top-down review" for the past 30 years.[49] This would affect 50 licenses.[14] Teh Trump adminsitration reversed the moratorium on .[50]

The Government Accountability Office has questioned whether bonus and royalty rates reflect coal's market value. Per GAO, since 1990 Colorado earned about $22 million less from bonus bids than Utah, though Colorado leased out almost 76 million tons more coal than Utah. BLM personnel noted that the coal mined in Utah was closer to its market, and so was more valuable due to lower transportation cost.[48]:27

The GAO report noted that the BLM publishes little information on federal coal lease sales, also does not include their appraisal report, because some of this information is "sensitive and proprietary"; this violates BLM's own guidance.[48]:44

The GAO also noted that the competitiveness of federal coal lease sales was limited by lack of multiple bids. Of the 107 tracts leased since 1990, 96 drew only a single bidder. This was attributed to the fact that most leased tracts were close to a single existing mine, and the large capital cost of installing a new mine discouraged competition. The BLM can reject bids which do not meet its estimate of fair market value, and 18 of the coal tracts leased since 1990 were tracts re-bid after the BLM had rejected the initial bids as too low. However, the GAO found that some BLM offices did not have the personnel to prepare adequate estimates of market value.[48]:16–19

A Boston-based think tank, the Institute for Energy Economic & Financial Analysis study estimated that, since 1991, $29 billion over a 30-year period was lost in the Powder River Basin, due to lack of competitive bidding.[51][52] The Institute’s mission statement notes that its goals include: “… to reduce dependence on coal and other non-renewable energy resources.”[53]

Energy valueEdit

 
Average heat content of coal mined in the United States, 1950-2015 (Data from US EIA)
 
Trends in US coal production by type of coal, 1949-2011

The average heat content of mined US coal has declined over the years as higher-rank coal production (anthracite, and then bituminous coal) declined, and production of lower rank coal (Sub-bituminous and lignite) increased. The average heat content of US-mined coal decreased 21% from 1950 to 2016, and 6.8% in the 20 years from 1996 to 2016.[54]

The tonnage of mined coal hit a peak in 2008, and has declined since. The energy value of mined US coal hit its all-time peak a decade earlier, in 1998, at 26.2 quadrillion BTU. The energy value of US coal mined in 2016 was 14.6 quadrillion BTU, 44 percent lower than the peak.[55]

Energy content of US mined coal
Year Million short tons[15][16] Million BTU/short ton[54] Quadrillion BTU[56]
2000 1,074 21.07 22.74
2001 1,128 20.77 23.55
2002 1,094 20.67 22.73
2003 1,072 20.50 22.09
2004 1,112 20.42 22.85
2005 1,131 20.35 23.18
2006 1,163 20.31 23.79
2007 1,147 20.34 23.49
2008 1,172 20.21 23.85
2009 1,075 19.96 21.62
2010 1,084 20.17 22.04
2011 1,096 20.14 22.04
2012 1,016 20.22 20.68
2013 985 20.18 20.00
2014 1,000 20.15 20.29
2015 897 19.88 17.95
2016 728 19.88 14.58
36.68 million BTU = 1 tonne of oil equivalent (toe)

AccidentsEdit

 
Coal mining fatalities in the United States 1900-2014 (data from US Dept. of Labor)

Mine disasters have still occurred in recent years in the US,[57] Examples include the Sago Mine disaster of 2006, and the 2007 mine accident in Utah's Crandall Canyon Mine, where nine miners were killed and six entombed.[58] In the decade 2005-2014, US coal mining fatalities averaged 28 per year.[59] The most fatalities during the 2005-2014 decade were 48 in 2010, the year of the Upper Big Branch Mine disaster in West Virginia, which killed 29 miners.[60]

OppositionEdit

Concern about global warming in the US [61] - especially in the aftermath of Hurricane Katrina and Al Gore's receipt of the 2007 Nobel Peace Prize for his raising awareness of climate change - temporarily increased public opposition to new coal-fired power plants.[62][63] Simultaneously with these events, the anti-coal movement in the US - similar to that in the UK and Australia - had made coal-fired power projects more politically costly, and spurred further shifts in public opinion against coal-fired power.[64][65][66]

In a 2004 effort to foster positive public opinion of coal, many large coal mining companies, electric utilities, and railroads in the U.S. launched a high-profile marketing campaign to convince the American public that coal-fired power can be environmentally sustainable, despite the fact that coal is the largest contributor of CO2 emissions in the electricity sector.[67][68][69] However, some environmentalists condemned this campaign as a "greenwashing" attempt to use environmentalist rhetoric to disguise what they call "the inherently environmentally unsustainable nature of coal-fired power generation".[70]

ReservesEdit

Despite the decrease in U.S. coal production since 2006 as a result of cheaper gas and environmental concerns, reserves of coal may fill the gap when world petroleum production becomes cost prohibitive. The United States has 477 billion tons of demonstrable reserves.[71] The energy content of this coal exceeds that of oil and gas.

See alsoEdit

FootnotesEdit

  1. ^ a b Total employment: coal mining, Federal Reserve Board of St. Louis, accessed 21 Apr. 2017.
  2. ^ a b Inventory of Assessed Federal Coal Resources and Restrictions to Their Development (PDF) (Report). U.S. Departments of Energy, Interior and Agriculture. August 2007. p. 94. Retrieved March 28, 2017. 
  3. ^ U.S. coal exports fall on lower European demand, increased global supply, US Energy Information Administration, 3 Oct. 2014.
  4. ^ a b Which states produce the most coal?, EIA, February 28, 2017, retrieved May 9, 2016 
  5. ^ a b c Tracy Rucinski (January 10, 2016), Arch Coal files for bankruptcy, hit by mining downturn, Reuters 
  6. ^ "Peabody Energy Chapter 11 Petition" (PDF). PacerMonitor. PacerMonitor. Retrieved May 9, 2016. 
  7. ^ "Top coal miner Peabody files for bankruptcy". The Sydney Morning Herald. April 13, 2016. 
  8. ^ Matthew Brown and Mead Gruver (March 28, 2017), How Trump's executive order will affect coal industry, Billings, Montana, Associated Press and Billings Gazette, retrieved March 28, 2017 
  9. ^ a b John W. Miller and Peg Brickley (January 11, 2016), Arch Coal files for Bankruptcy, Wall Street Journal 
  10. ^ Chaney, Sarah. "Arch Coal Emerges from Chapter 11". wsj.com. The Wall Street Journal. Retrieved 6 October 2016. 
  11. ^ US Energy Information Administration, Table 1 Coal Production, Annual Coal Report, 2015.
  12. ^ US Energy Information Administration, Table 28, Average Price of Coal, Annual Coal Report, 2015.
  13. ^ Annual Coal Report, U.S. Department of Energy, November 3, 2016, retrieved March 28, 2017 
  14. ^ a b Oliver Milman Obama administration halts new coal mining leases on public land The Guardian, 15 January 2016, accessed 16 January 2016
  15. ^ a b Annual coal production, US Energy Information Administration, accessed Apr. 2016.
  16. ^ a b Quarterly coal production, US Energy Information Administration, accessed Apr. 2016.
  17. ^ Quarterly coal exports, US Energy Information Administration, accessed Apr. 2016.
  18. ^ a b Quarterly coal exports, US Energy Information Administration, accessed Apr. 2016.
  19. ^ Coal exports and imports, US Energy Information Administration, accessed Apr. 2016.
  20. ^ Coal browser, US Energy Information Administration, accessed 16 Apr. 2016.
  21. ^ Coal data browser, US Energy Information Administration, accessed 16 April 2016.
  22. ^ Jodi Xu Klein and Tim Loh (January 20, 2016), "The Coal Miner `On Everybody's List' as Next Bankruptcy Victim", Bloomberg Markets, retrieved March 28, 2017 
  23. ^ a b US Energy Information Administration, Top Coal Companies, 2014, accessed May 7, 2016.
  24. ^ Coal fatalities US Mine Safety and Health Administration, accessed 17 Apr. 2016.
  25. ^ Total employment: coal mining, Federal Reserve Board of St. Louis, accessed 21 Apr. 2017.
  26. ^ Historical Statistics of the United States, US Department of Commerce, 1960, p.358-359.
  27. ^ a b CORAL DAVENPORT In Climate Move, Obama Halts New Coal Mining Leases on Public Lands NY Times January 14, 2016.
  28. ^ What If All U.S. Coal Workers Were Retrained to Work in Solar? - Harvard Business Review. August. 2016
  29. ^ Edward P. Louie and Joshua M. Pearce. Retraining Investment for U.S. Transition from Coal to Solar Photovoltaic Employment. Energy Economics. 57,295–302 (2016). doi:10.1016/j.eneco.2016.05.016
  30. ^ http://www.eia.gov/coal/production/quarterly/
  31. ^ Coal prices and production decline in 2015, US Energy Information Administration, accessed Apr. 2016.
  32. ^ "Coal Scorecard: Your Guide To Coal In The Northwest". EarthFix Oregon Public Broadcasting. June 28, 2012. Retrieved March 26, 2013. 
  33. ^ Phuong Le (March 25, 2013). "NW governors ask White House to exam coal exports". The San Francisco Chronicle. Associated Press. Retrieved March 26, 2013. 
  34. ^ "What coal's decline means for Northwest export markets," Oregon Public Broadcasting, 17 Feb. 2016.
  35. ^ Pittsburghlive.com
  36. ^ US Energy Information Administration: Net generation by energy source, accessed 24 January 2009.
  37. ^ Natural gas-fired electricity generation expected to reach record level in 2016, EIA, July 14, 2016, retrieved March 28, 2017 
  38. ^ Coal: Consumption for electricity generation, US Energy Information Administration, 16 April 2016.
  39. ^ Net generation by energy source, US Energy Information Administration, 4 April 2016.
  40. ^ "Existing Electric Generating Units in the United States". Energy Information Administration. 2007. Retrieved 2008-06-19. 
  41. ^ "Inventory of Electric Utility Power Plants in the United States 2000". Energy Information Administration. March 2002. Retrieved 2008-06-19. 
  42. ^ a b "Electric Power Annual with data for 2006". Energy Information Administration. October 2007. Retrieved 2008-06-19. 
  43. ^ See Wikipedia article on the Chinese Economy
  44. ^ "U.S. Coal Consumption by End-Use Sector". Energy Information Administration. July 25, 2008. Retrieved 2008-08-29. 
  45. ^ Matthew Brown (March 17, 2013). "Company eyes coal on Montana's Crow reservation". The San Francisco Chronicle. Associated Press. Retrieved March 18, 2013. 
  46. ^ Domestic and international coal distribution, US Energy Information Administration, 2013.
  47. ^ US Domestic and Foreign Coal Distribution, US Energy Information, 2012.
  48. ^ a b c d Government Accountability Office Coal Leasing: BLM Could Enhance Appraisal Process, More Explicitly Consider Coal Exports, and Provide More Public Information GAO-14-140. Published 18 December 2013. Released 4 February 2014
  49. ^ CORAL DAVENPORT In Climate Move, Obama Halts New Coal Mining Leases on Public Lands NY Times, January 14, 2016, accessed 16 January 2016.
  50. ^ Henry, Devin (March 29, 2017). "Trump administration ends Obama's coal-leasing freeze". The Hill. Retrieved 25 September 2017. 
  51. ^ Matt Pearce Obama temporarily bans new coal leases on federal land Los Angeles Times, 15 January 2016.
  52. ^ “Report- Almost $30 billion in revenues lost to taxpayers by “giveaway” of federally owned coal in Powder River Basin”, Institute for Energy Economic and Financial Analysis, 25 June 2012.
  53. ^ “About”, Institute for Energy Economic and Financial Analysis, accessed 20 April 2016.
  54. ^ a b US Energy Information Administration, Table A5, Approximate heat content of coal and coal coke.
  55. ^ US Energy Information Administration, Total coal mined.
  56. ^ Primary energy production by source, US Energy Information Administration, accessed Apr. 2016.
  57. ^ "Census of Fatal Occupational Injuries Summary, 2006 Washington D.C.: U.S. Department of Labor". Bureau of Labor Statistics. (2006). 
  58. ^ "Panel to Explore Deadly Mine Accident". New York Times. Associated Press. September 4, 2007. 
  59. ^ Coal mining fatalities, US Mine Safety and Health Administration, accessed 27 June 2016.
  60. ^ Urbina, Ian (2010-04-09). "No Survivors Found After West Virginia Mine Disaster". New York Times. 
  61. ^ "Yale Center for Environmental Law & Policy 2007 Environment Survey" Archived 2008-08-28 at the Wayback Machine., Yale Center for Environmental Law & Policy website, March 7, 2007.
  62. ^ "Iowans Want Energy Conservation Before New Coal Plants", Environment News Service, December 21, 2007.
  63. ^ "Kansans Support Decision to Nix Coal Plants, Want Focus on Wind Energy", Lawrence Journal-World, January 4, 2008.
  64. ^ Nace, Ted. "Stopping Coal In Its Tracks", Orion, January/February 2008.
  65. ^ "Fight Against Coal Plants Draws Diverse Partners", New York Times, October 20, 2007.
  66. ^ "You're Getting Warmer" Archived 2008-02-05 at the Wayback Machine., East Bay Express, December 5, 2007.
  67. ^ "Coal Scores With Wager on Bush Belief", Washington Post, March 25, 2001.
  68. ^ "Spreading Misleading Messages", San Francisco Chronicle, November 3, 2004.
  69. ^ "Coal Industry Plugs Into the Campaign", Washington Post, January 18, 2008.
  70. ^ "Greenwash of the Week: Coal Industry Buys Off CNN debates" Archived 2008-10-03 at the Wayback Machine., Rainforest Action Network Understory blog, January 23, 2008.
  71. ^ "U.S. Coal Reserves". EIA. November 4, 2016. Retrieved 13 October 2017. 

Further readingEdit

  • Andrew B. Arnold, Fueling the Gilded Age: Railroads, Miners, and Disorder in the Pennsylvania Coal Country. New York: New York University Press, 2014.

External linksEdit