By Neil Powell and Taylor Kuykendall

Data feature produced by S&P Global Market Intelligence research groups in cooperation with the news department to highlight emerging trends and topics of interest.

As U.S. coal production continued its downward spiral in 2013, average coal mine employment for the year also maintained a free-fall that began in 2012.

An SNL Energy analysis of average coal employment data from the U.S. Mine Safety and Health Administration shows the average number of employees in 2013 fell about 9.3% year over year, to 82,338 employees. In the fourth quarter, the average employee count at U.S coal mines was 77,639, the lowest level since at least the first quarter 2009.

After quarterly declines in every quarter of 2009, coal mine employment began to pick up, temporarily recovering to levels above 90,000 employees in the second quarter of 2011 — and held above that level for about a year before taking another steep dive in the third quarter of 2012. From their near-term peak of 93,700 in the fourth quarter of 2011, average coal mine employment has dropped 17.1% at the end of 2013.

The reduction in coal employment comes as many producers focus on containing costs and jockey for position as low-cost producers. While some of have touted various degrees of success, many other coal producers, particularly those in Appalachia, have been driven to idle mines or even declare bankruptcy.

The U.S. Energy Information Administration expects domestic coal production to increase in 2014 before declining again in 2015, but the industry has already been battered by a combination of factors.

While many say the U.S. EPA's air emissions and mining regulations have played the largest part in the downsizing of coal production and employment, heavy price competition from a surge in domestic natural gas production has also played a major role. Meanwhile, recent price weakness in export markets may compound the industry's domestic issues, though coal export volume hit a near-record high in 2013.

Luke Popovich, a spokesman for the National Mining Association, said natural gas prices, particularly a trough of record-low prices in 2012, pushed a lot of coal capacity off the market. However, he said, many analysts are expecting gas prices to settle in a higher range as non-power markets develop for natural gas. "What we have to inform people about is gas prices probably only have one way to go — up," Popovich said.

'A pretty dark picture' looms for Appalachian job opportunities

The immediate impact of the EPA's Mercury and Air Toxics Standards, Popovich said, has been shown to have a much larger effect on coal production and employment than natural gas competition alone.

The EPA estimates the MATS regulations result in air quality improvements of $37 billion to $90 billion per year. Fossil-fuel power plants, the EPA says, are the biggest source of air emissions of mercury, a toxic chemical linked to numerous serious health impacts.

Even more regulations expected to heavily curtail coal's competitiveness in the marketplace are coming in the form of greenhouse gas restrictions aimed at slowing the effects of climate change. Popovich said the result will be a loss of high-paying jobs in the coal industry.

"There's a gross inconsistency, in our view, of this administration's insistence that it wants to create high-wage jobs and more of them, and the reality that their policies are having on the employment marketplace," Popovich said. "You're essentially condemning a lot of unemployed people to a much lower standard of living since in these regions there are no readily available jobs that can offer salaries that compete with a coal mine. It's a pretty dark picture, particularly in that region."

Popovich said there appears to be little effort by the Obama administration to draft an "all-of-the-above" energy policy that would include emission standards achievable by coal plants. "I think the administration's mind appears to be closed," Popovich said. "We're turning a lot of our attention to state legislatures, state elected and appointed officials, governors, county commissioners in the heavy coal states to inform them about the implications for their economies with a greenhouse gas rule on existing plants."

Job losses forcing miners to reconsider their occupation

In the increasingly tough-to-mine Central Appalachian region, coal job numbers took the hardest hit, MSHA data reveals. Coal employment in Central Appalachia is down to 28,828 average employees in 2013, a 16.3% year-over-year decline.

Ethan McGrew, a second generation coal miner from Mason County, W.Va., said he has been looking for work in the coal sector since he was laid off from a Central Appalachia mine in 2012.

McGrew worked at CONSOL Energy Inc.'s Fola Complex in Clay County, W.Va. , which the company shut down in 2012, citing a combination of market factors and increasing regulatory pressure on the industry. McGrew believes the Obama administration is playing a major role in the state of the industry.

"My human resource guy, before we shut down, told us our future in coal, working underground, would depend on the 2012 presidential election," McGrew said. "My dad was a coal miner and he lost his job back in 2008. … He lost his job in the first presidential election, the second election came around and I ended up losing my job."

McGrew said that while he occasionally finds coal-related job opportunities around the state, the number of laid-off miners seeking work makes competition tough, particularly for a 22-year-old with less than two years of experience. McGrew said most of the remaining mines are "small, single-owner mines" as bigger-scale operators begin to back out of the region.

"I don't look for the coal mine industry to pick back up a whole lot," McGrew said. "I'm actually still looking to get back into the coal mines. But as tough as it is now, I'm also looking to get into a different industry."

McGrew said he is now working toward the requirements of becoming a residential electrician.

"I think what people in the U.S. need to know is before they start voting against coal and voting for all this other energy is the eastern side of the United States — Kentucky, Virginia, Tennessee, Ohio, West Virginia — we all depend on coal," McGrew said. "There's a lot of families out there that depend on coal and when people vote against coal and vote for going green now, we lose our jobs and then we can't support our families."

Southern Appalachia, a smaller basin as production goes, is not far behind Central Appalachia in terms of year-over-year job losses. There, the average of 5,013 coal jobs available in 2012 declined 14.3% by 2013.

Northern Appalachia job numbers were slightly better, outperforming the U.S. average decline in coal jobs with just a 3.6% loss in average coal jobs from 2012 to 2013.

Illinois, Powder River basins better off, but jobs lost there as well

The Powder River and Illinois basins posted more moderate declines in average annual coal mine employment in 2013. In the PRB, jobs dropped just 4.6% year over year to 6,973 average coal mine jobs in 2013. The Illinois Basin lost about 3.7% of its total coal mining jobs, falling to 12,397 in the same period.

Phillip Gonet, president of the Illinois Coal Association, said that despite recent increases in Illinois Basin production, Illinois coal operators are worried about their prospects as well.

"We're concerned with the carbon policy of the president, and we'll just have to see where that goes," Gonet said. "Who knows what the future is going to be if the EPA's rules for existing coal-burning power plants are as stringent as the ones for new plants?"

Gonet said about one-fourth of Illinois production is currently going toward export markets, and that the Illinois Basin has begun to capture some markets from other basins such as Central Appalachia. Despite production growth, Gonet said most Illinois coal plants continue to buy lower-sulfur Powder River Basin coal while Illinois miners try to ship their higher-sulfur product to power plants with scrubber equipment installed.

The relatively small Four Corners and Western Region coal mining regions both posted double-digit percentage declines in 2013 coal employment.

Average coal mine employment in the Gulf Coast, Interior, Southern Wyoming and Northern Lignite regions changed less than 1% each.

The largest year-over-year percentage decline in employment among mines that remained active through 2013 was at OAO Severstal's Mine No. 1 mine in Northern Appalachia, where year-over-year production was cut from 941,861 tons in 2012 to 108,484 in 2013.

At Peabody Energy Corp.'s no longer active Willow Lake Portal mine in Illinois, the average employee count fell 92.9% in 2013 — from 407 to 33 — compared to the average count in 2012. About 16.5% of Willow Lake's 2012 shipments were destined for plants scheduled to retire between 2013 and 2015. The mine was shut down by Peabody over failure to meet safety standards.