The number of American workers employed in the coal industry is at a near-record low.According to EIA, the total number of coal workers stood at 65,971 in 2015. This is the lowest figure since the agency started gathering data in 1978.
One of the major coal mining states in the US is West Virginia. Coal mining jobs in the state has been on the decline since the late 70s as shown in the chart below from US Funds:
Take a look at the 114-year history of the coal industry in West Virginia, the second-largest U.S. coal producer after Wyoming. Since shortly after World War II, the number of coal mining jobs has steadily decreased. In 2014, the state industry employed a little over 18,000 people, a far cry from the 125,000 it employed in 1948.
A recent FT Alphaville article discussed why Appalachian coal is unlikely to experience a recovery anytime.From the piece:
Here is one thing that is not true: Easing those rules, as President Trump’s executive order encourages, will lead to a coal-based Appalachian Renaissance. For one, some of the most strenuous regulations slated for review haven’t even been implemented, as they were still held up by court challenges at the time of Trump’s executive order.
But broadly, the biggest problem with expecting a coal revival in Appalachia is basic geology, not greenhouse-gas emissions. West Virginia’s coal boom started in the late 1800s, according to the state’s Department of Culture — yes, it exists, don’t get cute — and as extraction continued over the following century, miners had to go deeper and deeper into the earth to reach it.
So the productivity of mines in the Appalachian region is lower than that of mines in Illinois, and well below mines in Wyoming and Montana (the “west region” in the chart below):
That helps explain why mining provided such a large share of the jobs in West Virginia, since low-productivity mines require more hours of work. But it’s tougher to justify investment in those type of mines after an industry-wide debt reorganisation, with at least six bankruptcies of publicly traded coal companies in one year.
What’s more, regulations on US power-plant emissions don’t really affect the market for Appalachia’s hot-burning metallurgical coal, known as met coal, which is used in industrial processes such steelmaking.
“With met coal, you’re looking at completely different drivers” for the market, like “what does China do?” said Zachary Bader, senior distressed debt analyst with Reorg Research.
