Warm Weather Cuts Demand for Mountain Coal
Alpha Natural Resources is idling or reducing production at 10 mines in Kentucky and West Virginia. The company is blaming poor market conditions for coal. Alpha is idling two underground mines in Harlan County. The company also plans on phasing out production on two surface mines—one in Harlan County and one in Knott County. Alpha was able to relocate 52 of the miners to other operations, but 168 are without jobs. Three of the four mines were originally owned by Massey Energy, which Alpha bought last year.
Kentucky Coal Association president Bill Bissett says mine closures in the region are becoming more common—in part because of the unseasonably warm weather throughout Kentucky and the rest of the southeast.
“When we have that kind of temperatures in a winter season, you have less demand for electricity and thus less demand for coal,” Bissett said. “So, this is a market fluctuation, it’s not like the attacks we’re seeing out in Washington D.C., it’s more things we can’t control or really predict with the nature of the weather.”
Another coal company—Teco Energy—laid off 85 employees in Perry County last month.
Alpha spokesman Ted Pile says another factor is the increased usage of natural gas and coal from the Illinois basin.
“A lot of market share in the southeastern U.S. is being taken by coal from the Illinois basin, which is produced at a very low cost,” Pile said. So that’s cut into the market share for Kentucky coal’s most traditional markets.”
This is good news for coal mines in western Kentucky, since the area is part of the Illinois basin. But it’s not good news for Appalachian coal in eastern Kentucky. In its most recent annual energy outlook, the federal government predicted Appalachian coal production will continue to decline over the next two decades, but production in the Illinois and Powder River Basin will remain fairly stable.
Pile says the company has no plans to restart production at any of the mines. The company is offering all of the displaced employees two months of salary and benefits.