During the summer of 2014, three major coal mining companies announced plans to lay off a total of 1,800 employees in West Virginia.
The largest announcements came from Bristol, Va.-based Alpha Natural Resources. In late July and early August, the company put 1,129 employees on notice at various subsidiaries in the southern half of the state, where mine productivity is low compared with other U.S. coal-producing regions.
The company cited several reasons for reducing its West Virginia operations, including persistently weak demand for coal, competition from lower-cost operators in other regions, competition from natural gas as an alternative to coal for power generation, and new regulations from the Environmental Protection Agency. (For more on the prospects for West Virginia coal, see "The Future of Coal," Econ Focus, Fourth Quarter 2013.)
"EPA's new MATS (mercury and air toxics standards) air emissions rule alone is expected to take more coal-fired power generation offline next year than in the previous three years combined," the company predicted. "Much of that is in markets historically supplied by Central Appalachian mines."
Other major layoff announcements during the summer came from Cliffs Natural Resources of Cleveland (397 employees) and Coal River Energy of Alum Creek, W.Va. (280 workers). Coal River Energy blamed its pending layoffs on "weak coal demand and government regulations," while Cliffs Natural Resources cited poor market conditions for metallurgical coal (coal used to make steel).
The summer's total number of announced layoffs represents 9.5 percent of the state's jobs in coal mining and coal mining support, but the industry's employment will not decline 9.5 percent because hiring will offset some of the layoffs. The net loss of jobs during the past two years, however, has accelerated a downward trend that began in 2012. Coal mining employment in West Virginia, including support positions, has plummeted from an 18-year high of 24,928 jobs in 2011 to a 10-year low of 19,040 jobs in the first quarter of 2014. The most recent wave of layoff announcements suggests that the number will continue to decline rapidly for at least the rest of the year.
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