KENTUCKY (8/11/13) - We have covered over past months and years the hard road that lies ahead for coal.
Now let’s talk about the many reasons—economic and otherwise—that coal needs to stay part of daily life in Kentucky.
The case for coal, so to speak, was made perfectly clear by the Kentucky Coal Association when it spoke to a state legislative committee in mid-July.
First, Kentucky coal remains essential to electricity production in the U.S. Nationally, Kentucky coal provides fifth of the nation’s energy, accounting for 37 percent of U.S. electricity production today. That is considerably less than the 44.9 percent of the nation’s electricity production market that coal captured just two years ago before the meteoric rise in natural gas usage, but it is still significant. (Natural gas is considered cleaner burning and cheaper than coal, accounting in large part for its increased use. Most utilities are switching to natural gas burning plants and the chance at getting any new coal-fired plant permitted by the federal government is, well, pretty grim, we are told.)
However, there is something on the energy horizon that could shake this new energy mix up, based on KCA numbers.
Between now and 2035, the nation’s demand for energy is expected to increase 21 percent with coal playing a key part in meeting that demand along with nuclear, natural gas, liquid fuel, biofuels and renewables. By 2030, the KCA reports that the U.S. will actually use 211 million more tons of coal than it does currently. Some of that will be Kentucky coal, which will also be shipped globally to meet energy demand—especially in China.
China uses more coal than the U.S. currently at an estimated rate of 2.83 billion short tons a year, the KCA reports. By 2030, the country’s usage is expected to grow by 2.085 billion tons for a total of 4.915 billion short tons used by China that year. Since most overall U.S. coal exports today are comprised of steam, or thermal, coal like we have here in Kentucky, our state should naturally share part of that export growth.
Another reason for coal’s importance in Kentucky is its role in keeping electricity affordable for Kentuckians. The proximity of our power plants to their fuel source makes coal not only responsible for over 90 percent of our state’s electricity generation, but makes keeping “the lights on” for Kentuckians relatively inexpensive compared to what other Americans pay, according to the KCA. The organization’s report to state lawmakers last month said the cost of electricity in Kentucky on average is 7.191 cents per kilowatt hour or “one of the lowest rates in the United States.”
For those in the coal regions like the very one we live in, there is another very important role for Kentucky coal: Job creation. While there are nowhere near the number of coal miners in the Commonwealth that there once was, there are still over 14,000 people employed as coal miners in our state (based on KCA data)—a number that makes it one of our state’s biggest employers.
Of course, as we know, many coal counties in our state have lost considerable mining jobs. The Lexington Herald-Leader’s recent series “Fifty Years of Night” reported on the hurt that changes in the coal industry and energy landscape (what is called far and wide as the War on Coal) has caused, especially in Eastern Kentucky.
There was some hope gleaned from the June 16 report in the series which talked about mining of harder-to-reach coal seams in Central Appalachia. The report said total coal employment in the region could rise over the next two decades as companies mine that coal.
That is good news for some counties but not all, the report went on to say. Counties that will not really benefit, based mostly on where their coal is transported, include Knott, Pike, and Letcher, the story said.
“The increase will be patchy...; some counties are likely to see increases in jobs and coal-tax revenue, but most will probably lose out,” the story stated.
It went on to say: “There might be mini booms and busts in the region in coming years, and exports could prop up some production, but the overall trend will be down... Higher natural gas prices could be a factor in slowing the decline, but they won’t reverse it... .”
So, there appears to be room for optimism as we look at Kentucky’s coal future, but there is also plenty of room for concern. Change is coming to the coalfields. It is probably not, as some say, the end of coal, but it is going to change coal’s place in Kentucky, the nation, and the world. We must work together through better returns on coal severance funds to coal counties, education, and other means to prepare our coal regions for this change, and look toward better days.
Have a good week.
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