Coal Tattoo

Production update: More bad news for coal industry

Perhaps Monday morning is as good a time as any to ponder what a world we live in.

On Friday afternoon, Rep. David McKinley’s press agents were promoting his legislation to strip EPA of its ability to regulate toxic coal as as a “jobs bill.” On the House floor, the West Virginia Republican said anyone who voted against his legislation was personally responsible for the loss of 316,000 jobs — a figure he got from a fairly questionable industry report, and a number contradicted by another recent report.

Earlier last week, officials from American Electric Power were telling lawmakers that new environmental rules deserved a huge part of the blame for increased electricity rates, but then adding this, according to the Gazette’s Phil Kabler:

Asked whether the environmental requirements were excessive, [AEP subsidiary Appalachian Power vice president Mark] Dempsey said, “There are plenty of studies that back up the reasons for the requirements placed on us.”

And then, there was a new announcement from the U.S. Department of Energy’s Energy Information Administration, adding more weight to the concern that our region’s political leaders need a plan for the coming declines in the coal industry.  As Platts explained:

The US Energy Information Administration expects a 3.9% decline in the electricity generation sector’s coal consumption in 2012, it said Wednesday.

That fall in demand is somewhat steeper than EIA’s expectations a month ago, in its September Short-Term Energy Outlook, when it forecast a 2.3% drop in consumption, data shows.

Meanwhile, the EIA is expecting US coal production to decline by nearly 24 million st, or 2.2%, to about 1.045 million st in 2012 as domestic consumption and exports fall and inventories at electric power plants decline. In September, the agency expected 2012 output to be level with 2011’s levels at around 1.061 million st.

By region, output in Appalachia is expected to fall 5.6% to 319.7 million st in 2012. Production in the Interior is expected to drop 7.9% to 145.8 million st. Western production is projected to improve 1.4% to 579.6 million st.