DOE Report Projects Greater Coal Production Drop
Charleston Gazette
23 January 2012
By Ken Ward Jr., Staff writer
Read the report : http://blogs.wvgazette.com/coaltattoo/
CHARLESTON, W.Va. -- Coal production in Central Appalachia may not
decline as sharply over the next five years as previously
projected, but the long-term forecast looks even worse, according
to a new U.S. Department of Energy report.
On Monday, DOE's Energy Information Administration increased its
estimates of annual regional coal production for each of the next
five years, but then projected steeper drops through the rest of
the decade, with output reaching a low of 77 million tons in 2020.
Overall, production from Central Appalachia -- mostly Southern
West Virginia and Eastern Kentucky -- is expected to drop to about
86 million tons, a decline of nearly 54 percent between 2011 and
2035.
Production in the Northern Appalachian coalfields of Northern West
Virginia and Western Pennsylvania is expected to increase over the
same period, but not nearly enough to make up the difference.
A larger share of Southern West Virginia's production comes from
mostly non-union surface mines, while the northern part of the
state remains a stronghold for underground operations that employ
United Mine Workers members. Northern West Virginia mines also
tend to producer higher sulfur coal, which can become more
attractive as more power plants install pollution control
scrubbers.
Rory McIlmoil, energy project manager at the Morgantown
environmental consulting firm Downstream Strategies, follows coal
production trends and co-authored a January 2010 report that
warned of major production declines coming to the region's mining
industry.
"Our 2010 report used EIA's projections, and since the publication
of that report, those projections have come true," McIlmoil said
Monday. "Central Appalachian production is on the decline.
"These projections suggest a far greater decline in coal
production for West Virginia than did last year's estimates," he
said. "Therefore, the new projections support to an even greater
extent the overall message put forth in our report: That Central
Appalachia needs strong policies aimed at diversifying the
regional economy and energy portfolio."
The new EIA projections are included in Monday's preview of the
2012 edition of the agency's Annual Energy Outlook, which examines
trends and tries to project future developments in energy supply,
demand and production.
Overall, the report predicts that the growth of energy use will
slow over the next quarter-century, reflecting an extended
economic recovery and increasing energy efficiency in end-use
applications.
Among other things, the DOE said the energy intensity of the U.S.
economy, measured as primary energy use per dollar of gross
domestic product, will decline by 42 percent from 2010 to 2035.
Over the next 25 years, coal's share of overall electricity
generation was projected to fall to 39 percent, well below the
49-percent share seen as recently as 2007.
EIA cited slow growth in electricity demand, continued competition
from natural gas and renewable plants, and the need to comply with
new environmental regulations.
The EIA analysis, though, does not include impacts from any
potential regulation of greenhouse gas emissions or the latest
U.S. Environmental Protection Agency air-toxics rule for power
plants. EIA has also noted that the cheapest coal reserves in
Central Appalachia have already been extensively mined, and has
not said that EPA's crackdown on mountaintop removal is a major
factor in projections for future production declines.
EIA analysts projected strong growth for renewable energy sources,
from 10 percent of U.S. electricity generation to 16 percent over
the same period.
Natural gas growth was projected as more modest, from 24 percent
of power generation in 2010 to 27 percent in 2035, according to
EIA.
In a speech last week to an industry conference, National Mining
Association President Hal Quinn cautioned against looking only at
the domestic coal market, arguing that coal exports are going to
be a bigger and bigger part of the industry's strategy.
"Asia's voracious appetite for coal to sustain its growth with
affordable power logically benefits the country with the world's
largest coal reserves," Quinn said. "We have the most of what the
fast growing countries want the most of."
But the EIA projects Appalachia will continue to account for a
smaller and smaller share of all U.S. coal output. The regional
share of domestic coal production, measured in terms of energy
output, is expected to drop from 39 percent to 29 percent, also
between 2010 and 2035, the EIA projected. EIA said the share of
domestic coal coming from western mines would increase from 47
percent in 2010 to 56 percent in 2035.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.