Editorial

    The 2002 U.S. coal production tonnage of 1,099,898 tons was about 1.9% down from the Energy Information Administration’s preliminary production figure for the previous year. The lower production level last year is attributed to a milder than normal weather, the slow economy, and abundant stockpiles in the first half of the year.
    Today, layoffs are widespread across Appalachia as coal companies struggle to get through the worst economic slump in more than two decades. More than 4,000 coal miners have lost their jobs during the past year and layoffs are continuing. Hardest hit was West Virginia losing 2,300 jobs. Pennsylvania followed with 800 coal miners losing their jobs and Kentucky lost 700 jobs. Some 240 miners in Virginia have been laid off. 
    Some analysts see no relief to the lagging coal sales and stagnant prices that have forced companies to cut back production and send workers home; others see more optimism. Electricity demand is growing and many parts of the country, including some of the major coal burning regions, have experienced substantially colder temperatures this winter compared to last. Meanwhile, natural gas is trading at levels more than double those of a year ago, which should result in power producers maximizing output at coal-fired power plants.
    Colder weather patterns and high natural gas prices may positively impact coal-fueled generation and increase coal demand. In addition, financial concerns for certain coal producers may affect industry production. With a sustained economic recovery, the severe weather, and natural gas shortages, the demand for generating capacity and coal supply should increase. Thus, throughout 2003 there should be steady improvements in coal demand. Let us hope that the major coal producers continue their focus on being market driven and do not produce over the demand. Improved price levels should occur to finally provide a satisfactory return on investment for America’s great coal industry, which has just completed its safest year on record.

Bill Reid

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