By Taylor Kuykendall and Hira Fawad

The following data and article is the result of collaboration between West Virginia Public Broadcasting and SNL Energy. To see related data visualizations, media and more from West Virginia Public Broadcasting on this topic, please click here. For an on-the-ground look at how coal employment is affecting West Virginia communities, check out this article from the SNL Energy and West Virginia Public Broadcasting collaboration.

A narrow band of counties stretching through Central Appalachia continues to bear the brunt of coal job losses as nationwide demand for the fuel is in a prolonged collapse under the pressure of cheap natural gas and federal regulations.

An SNL Energy analysis of coal mine employment data from the U.S. Mine Safety and Health Administration shows that while most of the nation's coalfields are suffering, 16 of the 25 counties rocked hardest by average coal mine employment loss since late 2011 are in a contiguous band in Central Appalachia stretching across Kentucky, Virginia and West Virginia. For example, Boone County, W.Va., lost 2,689 employees in just over three years, representing a decline of 58% from the county's average coal mine employment in the last quarter of 2011. Letcher County, Ky., Leslie County, Ky., and Nicholas County, W.Va., have all seen average coal mine employment shrink more than 70% since the fourth quarter of 2011.

The data analyzed does not include a round of layoffs that occurred in the second quarter that will likely drag employment down even further. Murray Energy Corp. confirmed May 22 that it plans to lay off 1,240 workers across its Northern Appalachia and Illinois Basin coal mining operations. Alpha Natural Resources Inc. on May 22 said it would lay off 439 employees in Central Appalachia, adding to the 71 jobs cut earlier that month. And Rhino Resource Partners LP announced June 2 that it planned to idle the majority of its Central Appalachia coal mines.

Bennett Hatfield, the former CEO of Patriot Coal Corp., a company that recently fell back into bankruptcy since the recent coal market downturn, told SNL Energy that there does not appear to be much relief for the industry on the horizon. He grew up in Mingo County, W.Va., and has seen firsthand the effects of shriveling demand for Central Appalachia coal.

"Clearly, it's evident when you drive through town," Hatfield said of the hardship apparent to the region. "I was through Williamson, W.Va., just a few days ago visiting some friends and I still have family in the area. You see a lot of storefronts shuttered and a lot of homes that are empty. I think you see a lot of working age people moving out of the area for all the obvious reasons — it's going to be kind of ground zero of the correction in the coal markets."

Across the U.S., coal mine employment has been plummeting since late 2011, even in quarters where production was able to temporarily rebound, a phenomenon likely tied to declining productivity figures that have only recently began to show signs of reversing or leveling off. The industry hit a near-term high of 93,416 jobs in late 2011, but that number has since slid 24.1% to just 70,912 jobs as of March 31, even before the mass layoffs announced in the second quarter.

The situation for coal miners is unlikely to improve anytime soon. In its most recent short-term outlook for the industry, the U.S. Energy Information Administration projects lower demand for U.S. coal will depress coal production by an additional 7% in 2015, including a 13% decrease in production of Appalachia coal.

The primary driver of the decline, according to the EIA, has been low natural gas prices, which have made it more economical to run natural gas-fired generating units at higher utilization rates. However, the U.S. EPA's Mercury and Air Toxics Standards has also shuttered many coal plants consuming U.S. coal. The EIA is forecasting natural gas prices to remain low and coal prices to improve little through 2016 — an issue likely to compound the already stressed financials of domestic coal producers.

While early attempts have not been successful, the industry is fighting future EPA regulations that could further suppress coal demand. In an EIA analysis of the EPA's Clean Power Plan, an effort to restrict carbon dioxide emissions from existing plants, the agency projects coal production would drop as much as 38% by 2040 as a result of the rule compared to baseline projections.

Perhaps most distressing for some of the counties in Central Appalachia is that the EIA's Clean Power Plan analysis states that "Appalachian coal never shows signs of recovery." Appalachia coal production, the EIA notes, is expected to decline sharply after 2019 and then remain flat for a little over a decade before it begins to continue its decline post-2030.

'Ground zero': Central App bleeding coal jobs

"Central Appalachia is going to see the biggest piece of the correction pie with respect to the downsizing of coal-fired power from the combined effect of cheap natural gas and closure of coal-fired generation," Hatfield told SNL Energy. "Other basins are going to be impacted, but Central Appalachia is certainly going to be impacted most severely."

The five counties — all in Central Appalachia — shedding the most coal employment since 2011 may also be the ones that can least afford to lose jobs. According to 2009-2013 U.S. Census data, all five of those counties reported between one-fifth and one-third of their residents living below the poverty line. Every county in the top five — Boone County in West Virginia; Pike, Harlan and Perry counties in Kentucky; and Wise County in Virginia — recorded a rate of persons living below the poverty line higher than their respective states' overall rate.

"If you're going to make the $80,000-plus mark with benefits, you're going to have to leave," said Roger Horton, a former coal miner living in West Virginia who leads Citizens for Coal. "It's just that simple. The jobs that are available are sparse and few between. They're not actually living wage jobs. They're middle-of-the-road. Living wage is not available for the people in our area. That is what the mining industry provided us with."

Compounding the issue is that the region's topography and lack of transportation and communications infrastructure make coal mining one of the few viable means of supporting yourself in the region, even if that opportunity is withering.

"You get a little activity, at least in Central West Virginia from the gas business, but frankly, by and large, in the southern part of the state, it's tough to find new job opportunities best I can tell," said Hatfield, who recently joined the board of Illinois Basin coal operator Foresight Energy LP. "You have education and hospitals, but outside of those groups and Walmart and retail jobs, there just aren't many employment opportunities, particularly for people laid off from the coal mining industry with those skill sets."

Some coal miners may find opportunities in other regions. Back when Hatfield was helming Patriot, the company was among several recruiting Central Appalachia miners to more profitable Northern Appalachia and Illinois Basin operations, but Hatfield said recent pressures have been drying up those opportunities.

Bill Bissett, president of the Kentucky Coal Association, pointed out that not all miners want to leave.

"They want to stay at home in eastern Kentucky," he said. "That's because of the generational contacts in the area, not only parents and children and grandparents, but the familial history of the area. In a lot of cases, you have investments in that area where your money is in your home and with the market falling in coal, I've heard reports of a falling housing market there as well that's creating a lot of issues. People are not able to get the return on their residence that they need to relocate."

Horton has been organizing meetings to try to get community members in southern West Virginia to brainstorm about possibilities for either reinvigorating coal or diversifying the economy to provide miners with jobs in the places they want to live.

"You have a home that you built. You have land that you've taken on," Horton said. "Do you just want to break bonds with all your family members, your churches, your civic organizations and groups of that nature and just pull up strings and leave? Would you want to do that? Well, we don't either. We're just the same as everybody else. … We want our county and our state to prosper. For that reason, these jobs mean a significant amount to us."

Horton said the effects of job losses are already rippling through counties, including layoffs at county and state facilities as well as the closing of restaurants, shops and coal mine vendors. Miners from places such as Logan, Boone and Mingo counties in West Virginia are no longer shopping for vehicles at nearby car lots, and local tourism and recreation towns are suffering from a decline in revenue that coal miners once pumped into their economies.

"Well, it's just going to be a ghost town," said Steven Currence, a surface miner and union official in Boone County. "I mean if you shut down the mining industry here, the railroads will be gone … if they don't haul coal. What are you going to do? … If people got to take their kids out of state to support their family, then what's the teachers going to do? Who are they going to teach? There ain't going to be nobody around, unless you're on welfare. I guess that's what Obama wants, everybody on welfare."

However, it may not be all bad news. Even dire predictions for coal demand under the Clean Power Plan call for the losses to eventually level off, even if a full recovery in the region is not anticipated. Bissett points to rumored and announced interest in purchasing Central Appalachia's assets — such as Blackhawk Mining LLC's recent acquisition of James River Coal Co. assets and its announced intention to buy Patriot assets — as evidence producers are not necessarily turning their backs on the region.

"There's still interest in Appalachian coal and there's still money to be invested in Appalachian coal," Bissett said. "I think that's good news for [eastern Kentucky]."

Bissett noted that while he still hears of struggle in the eastern coalfields of Kentucky, it is nowhere near as precipitous as the drop in employment and production seen in the recent past.

"I think what's concerning is sometimes it's not overly visible unless you're looking for it," Bissett said of the effect of the industry's decline on communities. "I can see where politicians visiting the area or business leaders could possibly miss it. … Call anyone in eastern Kentucky and ask them about the economy there."

Bissett said that while estimates vary, the number of jobs supported directly and indirectly by the coal industry was likely at least three to every miner, but perhaps as high as 11, based on one study. Though the mine employment impacts are easy to measure, the effects trickle into the local economy as well as support staff like lawyers and accountants in population centers including Louisville and Lexington, Ky.

“ Living wage is not available for the people in our area. That is what the mining industry provided us with. ”

 Roger Horton, founder, Citizens for Coal

Bissett also noted that the support structures miners may need most at the moment, such as churches and nonprofits, are also thinning or disappearing. However, there are numerous efforts to revitalize the economies of Central Appalachia or provide relief to miners. Shaping Our Appalachian Region, or SOAR, is a bipartisan initiative aimed at diversifying the economy of Kentucky's coalfields and Hiring Our Miners Everyday, or HOME, aims to help workers relocate.

Bill Price, with the West Virginia Chapter of the Sierra Club, said he is advocating support for economic transition programs in Appalachia, including the Power Plus Plan pushed by President Barack Obama.

"[Job losses are] a concern of ours and something we've been telling decision makers in West Virginia for a long time would be coming and to prepare for it. … It's going to be a tough time because there's been such a delay in implementing policies on transition because a lot of our politicians have kept their head in the sand for so long," Price said.

He said that while leaders are looking to a lot of short-term opportunities for jobs, such as attempts to create new employment in the tourism sector, they also need to look further down the road at alternative energy jobs, though he acknowledges it may take some time to deploy those alternatives.

"We've always said renewable energy and energy efficiency is a job producer and we need to ramp that up," Price said. "That alternative should be noted, but if someone gets laid off next it's not going to provide them a job next week."

Why Central Appalachia struggles

Though some coal companies hold out hope for a better future, many in Central Appalachia likely face a tough road getting there. If there is to be success as a coal mine operator in that region in the near future, most are predicting relief is more likely to come from supply reduction — willingly or through financial failure — than it is to come from easing regulatory burdens or through higher prices for natural gas.

A large part of the problem is geology and mining history. The region has been extensively mined and, geologically speaking, the coal seams are getting thinner and more costly to mine. Meanwhile, productivity from Illinois Basin and Powder River Basin mines loom well over Central Appalachia coal.

"The geological factors come into play with respect to the cost position," Hatfield explained. "The cost of Central App is higher than it was 10 years ago when prices were in the $40s. Ten years ago we could still make money in certain areas. Two things have happened: the maturing of the coalfields and the mining of the lower-cost production first has generally pushed the cost curve up because of the more challenging geology, but secondly you've seen a heightened level of enforcement from the U.S. Mine Safety and Health Administration that has been a setback to what has historically been productivity improvements in Central Appalachia. That's pushing the costs up dramatically. Thirdly, the EPA oversight on surface mine operations, in particular, the prohibition of valley fill approvals, is causing the cost of surface mining to increase significantly."

While Hatfield said state lawmakers in West Virginia have been prudent in recent years by moving to tweak safety regulations, reduce the severance tax burden and otherwise throw a life preserver to coal producers in the state, there is little they can do to fight cost pressures from the federal government and market competition. He said that while anything state lawmakers can do to help is welcome, actions by the federal government that exacerbate pressure on the depleting basin may not be able to be completely overcome.

Many in the region, however, are still hoping relief from recent woes can be attained by fighting federal regulations.

"I do see a bright future for our coal market," Horton said. "Our problem is that we have to overcome the damage that has been done by this current administration's EPA. Granted, natural gas has been a factor and we've always had competition from the gas industry … but this is unlike anything we've ever seen. This is the first time in the history of this era, except for the Prohibition, that a government entity has tried to destroy an industry. That's in fact what they are doing."

Price said those who are convinced coal can make a comeback if only the federal government will get out of the way are becoming increasingly rare.

"The citizens don't believe that anymore," he told SNL Energy. "The citizens are standing up and saying, 'You know, this war on coal rhetoric isn't feeding my family' and they're beginning to hold them accountable for that."

SNL Energy's analysis of the data is gleaned from coal companies' reports to MSHA about how many employees, on average throughout the quarter, worked at individual coal mines. The data does not include contractors. Mines that had not yet reported to MSHA for the first quarter are excluded from both the current and historical totals.