This Sept. 18, 2008 file photo shows a Massey Energy coal mining site near Slyvester, W.Va. (AP Photo/Jeff Gentner, file)
I’ve had a few questions from readers about the recent statements by the Tomblin administration saying that West Virginia has lost 5,000 coal jobs in 2012 alone. We’ve delved before into this murky world of coal-job figures — an issue greatly clouded by the career campaign consultants during last year’s presidential election. You can read my blog post on the matter here or, even better, go back and check out the great piece Pam Kasey wrote for the State Journal on the same topic here.
The Associated Press has reported on deputy revenue secretary Mark Muchow’s figures a couple of times, first in its coverage of Gov. Earl Ray Tomblin’s State of the State address and again this week in reporting on the Tomblin administration’s press release about coal exports. The second of those stories, for example, reported:
Despite the increase in exports, West Virginia coal production was still down more than 8 percent in 2012, and the mining industry in the state lost more than 5,000 jobs, according to the West Virginia Department of Revenue.
To try to explain this to Coal Tattoo readers, I put in a call to Mark Muchow, the deputy state revenue secretary quoted in the second of the AP stories. When I asked where this 5,000-jobs-lost figure comes from, Mark pointed me to this section of the Workforce West Virginia website. This is where I suspected the figure came from, and in fact it shows that as of December 2011, the state had 34,500 jobs in the “mining and logging” sector. By December 2012 (based on preliminary figures), that number of “mining and logging” jobs had dropped to 29,500 — the drop of 5,000 that’s been quoted in recent media accounts.
But read the name of the category again: Mining and logging. It’s not just coal mining. It’s all mining and logging. And it’s even more than that. As Muchow explained this morning, that category includes all jobs that are part of the North American Industry Classification System (or NAICS) category 21. As defined here, this category includes: Mining, Quarrying, and Oil and Gas Extraction. And there’s more. West Virginia’s “Mining and logging” category also includes all jobs in NAICS category 1133 for logging, which is defined here as: (1) cutting timber; (2) cutting and transporting timber; and (3) producing wood chips in the field.
Mark Muchow was clear — when I talked to him anyway — that the category under discussion goes well beyond coal mining:
It’s all those put together. It’s all sectors there, not just coal mining.
So, I asked him, if that’s true, how can he tell the media that the reduction in jobs of 5,000 during 2012 for the overall category means West Virginia lost 5,000 coal-mining jobs during that period? Mark told me that he believes that “coal probably represents the bulk of those losses.” Why does he say that? He told me he’s drawn that conclusion based on looking at production figures, and monitoring other trends in the industry through tax collections, wage data, etc.
But Mark isn’t — and can’t — cite any numbers that specifically prove his statement. And from what I’ve heard, his comments to the media and to lawmakers don’t reflect that uncertainty — and the media coverage of his statements certainly doesn’t reflect that uncertainty either. We’re talking about a state official’s theory — albeit a state official who is trusted by administration officials, lawmakers and the statehouse media — but we’re not talking about facts.
Is Mark Muchow’s theory correct? Maybe it is.
It’s certainly true that coal mining accounts for the bulk of the jobs in the “mining and logging” sector in West Virginia. We know that by looking at the more detailed industry-by-industry figures here, which show coal-mining providing 24,331 jobs in the 4th quarter of 2011, or about 70 percent of the 34,673 jobs in the overall “mining” sector (this is just NAICS 21 now, it doesn’t include logging too). The other big contributors to the mining sector are oil and gas extraction, support activities for oil ans gas, and support activities for coal mining.
The thing is, the data that would show whether Mark is right or wrong isn’t available yet. The more detailed industry-by-industry jobs figures don’t come out monthly (as the chart he points to does), but only quarterly — and the lag in collecting and releasing the data means that the most recent detailed breakdown that’s available is from the 2nd quarter of 2012. It’s interesting to compare those to the 4th quarter of 2011. If you do, you’ll see that “mining” in general (including oil and gas) dropped 1,680 jobs. Coal mining specifically lost 1,574 jobs — so that tends to support Mark’s contention that the bulk of the jobs losses in “mining and logging” come from coal.
Those figures came out in November, and the 3rd quarter of 2012 will be out soon. But even that won’t definitively say if Mark’s numbers are right.
The thing is … there is another set of data out there that is more up to date. The U.S. Mine Safety and Health Administration collects reports from mine operators about their employment. The numbers are updated every quarter, and MSHA does a pretty good job of posting the public version within a few weeks of the end of each quarter. For example, the most recent available are jobs figures for the 4th quarter of 2012, which we reported on in the Gazette on Feb. 6:
New federal data shows that coal-mining employment in West Virginia dropped by more than 1,200 jobs during the final quarter of last year, continuing a trend that industry analysts project is likely to continue.
The number of mining jobs in West Virginia dropped to about 21,400 in the last three months of 2012, according to disclosures that mining companies file with the U.S. Mine Safety and Health Administration.
Strip-mining accounted for nearly two-thirds of the jobs losses, the data shows.
Production from strip-mining in West Virginia during the period was down to 8.1 million tons, half of the total during the fourth quarter of 2008, and the lowest quarterly figure in 25 years.
For the record, the latest MSHA data shows that there were 24,768 coal-mining jobs in West Virginia in the 4th quarter of 2011, and 21,441 in the 4th quarter of 2012 — a drop of 3,327 jobs, or 50 percent lower than the figures state officials prefer to cite.
Of course, these are two different sets of figures collected from two different agencies for two different purposes. And it’s worth noting that the state data also includes jobs figures for the sub-category of “support activities for coal mining,” an area that saw jobs drop from 1,845 in December 2011 to 1,698 in June 2012.
I’m not sure why state officials never seem to want to look at the MSHA figures. I do know that there’s reason to be skeptical about the state’s information on this issue, given how the administration has touted the number of mining layoffs as proof an Obama “war on coal,” all the while knowing that their figures — based on WARN notice and unemployment filings — didn’t show the whole picture.
Muchow, for his part, wants to be able to look at consistent figures across a broad range of industry sectors, so he says it makes sense for him to monitor the Workforce West Virginia data, rather than delve into the MSHA database. And I also know that I’ve heard from media types in other states that they don’t much care for the MSHA data, because using it required plugging a big data-set into software like Microsoft Access, rather than just looking at a chart on a website.
With all of that said, it’s probably too bad that questions about this 5,000-jobs-lost issue are what some readers (myself included) have focused on from this morning’s story by the AP’s David Gutman, because the story makes another more valuable point. The story explains that point that local industry officials and political leaders want to focus on regarding coal exports:
Much of the rise is attributable to increased demand from Asia. West Virginia coal exports to China increased more than fivefold, from $93 million to $567 million, between 2011 and 2012. Coal exports to Japan increased more than tenfold, from $29 million to $395 million.
But, the story notes that trend seems unlikely to bail the coal industry out of the mess it finds itself in:
Gov. Earl Ray Tomblin trumpeted the growth in exports in a press release Monday, but officials don’t see exports as a substitute for declining domestic demand for coal.
“The foreign markets are going to be erratic, there’s going to be good years and bad years for the foreign markets, whereas the domestic markets are more stable,” said Deputy Revenue Secretary Mark Muchow. “Overall, the numbers are negative; we see coal production decreasing in West Virginia.”
The extreme growth in Japan and China shows the volatility of the foreign coal market.
Japan, with very few domestic energy resources, is the world’s second-largest importer of coal. The 2011 tsunami that caused a disaster at the Fukushima Nuclear Power Plant also caused damage at several coal-fired power plants. This caused coal imports to plummet in 2011. Unlike nuclear, coal has since recovered as an energy source in Japan, resulting in the spike in coal imports.
Michael Mellish, a coal analyst at the U.S. Energy Information Agency, said that infrastructure problems within China have made it cheaper to import coal than to transport it from some of the interior provinces to the eastern provinces where it is needed.
The story concludes:
“It’s likely to go lower,” Muchow said of mining employment. “But the decrease we see in 2013 is likely less than it was in 2012.”
This story is especially important when viewed in contrast to what Gov. Tomblin has tried to promote: The notion that better days are coming for the coal industry, that another boom is just around the corner (see here and here). It makes you wonder if he talks to his own Department of Revenue …