Coal mining in the United States

Production

US coal production has declined since 2008, with 896 million short tons produced in 2015, the lowest since 1986.

Companies

Top ten coal-mining companies in the United States, 2014

In 2014, the production owned by the top ten companies was 72.6% of total US coal production.

Coal mining employment

US employment in coal mining peaked in 1923, when there were 863,000 coal miners. Since then, mechanization has greatly improved productivity in coal mining, so that employment has declined at the same time coal production increased. The average number of coal mining employees declined to 65,400 in 2015. This was below the previous low of 70,000 in 2003, and the lowest number of US coal miners in at least 125 years.

Because of the sharp declines in the U.S. coal industry, the Harvard Business Review discussed retraining coal workers for solar photovoltaic employment because of the rapid rise in U.S. solar jobs. A recent study indicated that this was technically possible and would account for only 5% of the industrial revenue from a single year to provide coal workers with job security in the energy industry as whole.

Areas

As of 2014 twenty-five states produced coal. The coal-producing states were, in descending order, with annual production in millions of short tons:

The decline in US coal production since 2008 has been unevenly distributed. Nationwide, coal production declined 15 percent from 2008 to 2014. Production from the largest producing region, the Powder River Basin of Wyoming and Montana declined 16 percent. Production from the second-largest producing region, the Appalachian Basin, declined 32 percent 2008 to 2014. The third-largest producing region, the Illinois Basin, increased its production 39 percent from 2008 to 2014.

Exports

The U.S. is a net exporter of coal. US net coal exports increased ninefold from 2006 to 2012, peaked at 117 million short tons in 2012, then declined to 63 million tons in 2015. In 2015, 60% of net US exports went to Europe, 27% to Asia. The largest individual country export markets were the Netherlands (12.9 million short tons), India (6.4 million short tons), Brazil (6.3 million short tons), and South Korea (6.1 million short tons). Coal exports to China, formerly one of the major markets, declined from 8.3 million short tons in 2013, down to 0.2 million tons in 2015.

In 2012, six coal export terminals were in the planning stages in the Pacific Northwest. They were scheduled to be supplied by strip mines in the Powder River Basin. The export markets were South Korea, Japan, China, and other Asian nations. Like the Keystone Pipeline the building of the terminals raised environmental concerns with respect to global warming. As of February 2016, four proposals for coal terminals had been withdrawn, leaving two still applied for. The withdrawals were ascribed to loss of demand and consequent lower coal prices.

Usage

In 2013, 92.8 percent of US internal coal consumption was for electricity generation. Other uses were industrial (4.7 percent), coke manufacture (2.3 percent), and commercial and institutional (0.2 percent).

Both the tonnage of coal used for electricity (1,047 million short tons) and the amount of US electricity generated from coal (2.02 million GWh) peaked in 2007. By 2015, electrical generation from coal had declined to 1.36 million GWh, and coal's share of total electrical generation in the US fell from 48.5 percent in 2007 to 33.1 percent in 2015. Most of the decrease in coal electricity was offset by an increase in generation from natural gas-fired power plants.

In 2006, there were 1,493 coal-powered generating units at electrical utilities across the US, with total nominal capacity of 335.8 GW (compared to 1024 units at nominal capacity of 278 GW in 2000). Actual power generated from coal in 2006 was 227.1 GW (1.991 trillion kilowatt-hours per year), the highest in the world and still slightly ahead of China (1.95 trillion kilowatt-hours per year) at that time. In 2000, US production of electricity from coal was 224.3 GW (1.966 trillion kilowatt-hours per year). In 2006, the US consumed 1,026,636,000 short tons (931,349,000 metric tons) or 92.3% of coal mined for electricity generation.

As of 2013, domestic coal consumption for power production was being displaced by natural gas, but production from strip mines utilizing thick deposits in the western United States such as the Powder River Basin in northern Wyoming and Southern Montana for export to Asia increased. In 2014, 3.0 percent of the coal shipments from Montana and Wyoming were exported. The 2014 coal exports from the two states of 13 .4 million short tons represented an increase of 1.2 million tons over 2012 export levels, which is 0.3 percent of the states’ 2014 total coal shipments of 439.8 million tons.

Coal mining on federal lands

As of 2013, 41 percent of US coal production was mined from federal land, almost all of it in the western US, where federal coal makes up about 80 percent of mined production. The federal coal program is overseen by the Bureau of Land Management (BLM) under the US Department of Interior. Federal coal lands are leased by competitive sealed bids, for the highest bonus (initial payment) offered. In addition, the government receives an annual rental of $3 per acre, and a fixed percentage royalty of the market value of coal produced. The royalty is 8 percent for underground mines and 12.5 percent for surface mines. In 2014, the program generated about $1.2 billion in lease bonuses, rentals, and royalties for coal mining on federal lands.

In January 2016, the Obama administration announced a three-year moratorium on federal coal lease sales on public land, effective immediately, and leaving around 20 years-of coal production under way. He noted that the program had not had a "top-down review" for the past 30 years. This would affect 50 licenses.

The Government Accountability Office has questioned whether bonus and royalty rates reflect coal's market value. Per GAO, since 1990 Colorado earned about $22 million less from bonus bids than Utah, though Colorado leased out almost 76 million tons more coal than Utah. BLM personnel noted that the coal mined in Utah was closer to its market, and so was more valuable due to lower transportation cost.

The GAO report noted that the BLM publishes little information on federal coal lease sales, also does not include their appraisal report, because some of this information is "sensitive and proprietary"; this violates BLM's own guidance.

The GAO also noted that the competitiveness of federal coal lease sales was limited by lack of multiple bids. Of the 107 tracts leased since 1990, 96 drew only a single bidder. This was attributed to the fact that most leased tracts were close to a single existing mine, and the large capital cost of installing a new mine discouraged competition. The BLM can reject bids which do not meet its estimate of fair market value, and 18 of the coal tracts leased since 1990 were tracts re-bid after the BLM had rejected the initial bids as too low. However, the GAO found that some BLM offices did not have the personnel to prepare adequate estimates of market value.

A Boston-based think tank, the Institute for Energy Economic & Financial Analysis study estimated that, since 1991, $29 billion over a 30-year period was lost in the Powder River Basin, due to lack of competitive bidding. The Institute’s mission statement notes that its goals include: “… to reduce dependence on coal and other non-renewable energy resources.”

Energy value

The average heat content of mined US coal has declined over the years as higher-rank coal production (anthracite, and then bituminous coal) declined, and production of lower rank coal (Sub-bituminous and lignite) increased. The average heat content of US-mined coal decreased 20% from 1950 to 2015, and 5.5% in the 20 years from 1995 to 2015.

The tonnage of mined coal hit a peak in 2008, and has declined since. The energy value of mined US coal hit its all-time peak a decade earlier, in 1998, at 26.2 quadrillion BTU. The energy value of US coal mined in 2015 was 18.2 quadrillion BTU, 31 percent lower than the peak.

Accidents

Mine disasters have still occurred in recent years in the US, Examples include the Sago Mine disaster of 2006, and the 2007 mine accident in Utah's Crandall Canyon Mine, where nine miners were killed and six entombed. In the decade 2005-2014, US coal mining fatalities averaged 28 per year. The most fatalities during the 2005-2014 decade were 48 in 2010, the year of the Upper Big Branch Mine disaster in West Virginia, which killed 29 miners.

Opposition

Concern about global warming in the US - especially in the aftermath of Hurricane Katrina and Al Gore's receipt of the 2007 Nobel Peace Prize for his raising awareness of climate change - temporarily increased public opposition to new coal-fired power plants. Simultaneously with these events, the anti-coal movement in the US - similar to that in the UK and Australia - had made coal-fired power projects more politically costly, and spurred further shifts in public opinion against coal-fired power.

In a 2004 effort to foster positive public opinion of coal, many large coal mining companies, electric utilities, and railroads in the U.S. launched a high-profile marketing campaign to convince the American public that coal-fired power can be environmentally sustainable. However, some environmentalists condemned this campaign as a "greenwashing" attempt to use environmentalist rhetoric to disguise what they call "the inherently environmentally unsustainable nature of coal-fired power generation".