Coal production and employment trends

As anyone living in the coalfields knows, coal production and employment in eastern Kentucky and Central Appalachia follow boom and bust cycles. But starting in the early 1980s, the close link between production and employment changed as mechanization and explosives replaced mine workers. Since then, coal production in Kentucky has declined by about 19% while employment has dropped by 62%.

Today coal mining provides about 18,000 jobs in eastern and western Kentucky, down from about 48,000 just 30 years ago. Those jobs are important for our workers and communities. They tend to pay well and are often concentrated in counties with few other economic opportunities. Coal mining in eastern Kentucky also provides an important source of revenue for local counties and school systems, including funds generated through the coal severance tax and unmined minerals tax.

But the full story of coal’s impact on our economy is more complicated and troubling.
  • Many eastern Kentucky counties with the highest percentage of mining jobs and historically high levels of coal production are among the state’s worst in terms of poverty and unemployment.
  • The public health costs of pollution from coal operations in Appalachia amount to a staggering $75 billion a year in increased health care costs, injury and deaths, according to a 2011 peer reviewed study.
  • Kentucky tax payers spent $115 million more in just one year to subsidize and regulate the mining industry than the state received in tax revenue generated by the coal industry, according to an analysis produced by the Mountain Association for Community Economic Development.

Peak Coal: the reality of a finite and declining resource

Coal production has been declining and mining jobs disappearing for a while now. Coal is a finite resource, and the region’s most accessible and profitable seams are now largely mined out. As the remaining coal in eastern Kentucky becomes more expensive to mine, coal companies are competing against cheaper fuels, including western coal, natural gas, energy efficiency, and some renewable sources.  

According the the U.S. Energy Information Administration’s Annual Energy Outlook, Central Appalachian coal production is projected to drop sharply between 2012 and 2020. Using figures provided by the U.S. EIA, a recent report by MACED calculated that coal production in eastern Kentucky is expected to fall by 70% in the eight years between 2012 and 2020. That’s in line with the rate of actual decline in recent years.

The 2009 National Coal Resource Assessment produced by the U.S. Geological Survey echoes that prediction, stating that “annual coal production from the Appalachian Basin will enter a period of irreversible decline during the next several decades.”