Overview of West Virginia Coal Association 2019 Winter Symposium

On January 30th, the West Virginia Coal Association held its 46th annual Coal Symposium to recognize safe producers, provide legislative updates, and discuss the global and statewide industry forecast.  While the overall tone of this year’s Symposium was more optimistic than in previous years, an air of caution persisted among the 400+ in attendance. We’ve highlighted a few key takeaways from the event below.

  • Coal production in West Virginia went up 20% in 2018 and in 2019, could cross the 100-million-ton level! This report is excellent news for the industry, but it is still a long way from the record of 170 million tons produced in 2008.
  • The years between 2008 and 2016 were the toughest in industry history. This recession was due to Federal government anti-coal regulations and the conversion of many coal-fired powerplants to cheaper natural gas.
  • The Association fears that a more liberal administration might re-enforce many of the recently eased Federal government regulations – all eyes are on the 2020 run-up to the Presidency.
  • Steam coal is expected to remain in low demand in the US; however, the global need is quickly increasing. Between 2020 and 2040, 2,200 new coal-fired power plants are scheduled to go online.
  • Steam coal produces 38% of the electricity in the USA; however, during extreme temperatures, coal is called on to meet more than 50% of the nation’s electricity needs.
  • The Association has asked the West Virginia legislature to reduce the severance tax from 5% to 2% on steam coal. This reduction would allow producers to remain competitive with other Appalachian Basin steam coal producers.
  • India has become a significant market for West Virginia coal and is showing no signs of slowing down. In 2018, West Virginia sent the country record tons of steam and metallurgic coal.
  • Many mines have been acquired by companies that require steel or coal for their product. When a mining company couples with a company reliant on coal, it can extend the lifespan of the mine by 20–30 years.
  • Touchstone Research Laboratory (a West Virginia company) now holds 27 patents for new carbon products, many of which are used to support the country’s defense system (rockets, naval ship exhaust systems, etc.).
  • The mining industry is coming off of two of its safest years in history. Safety procedures have been very effective in the mining process. The focus is now turning to new methods of safety for the conveyor and transportation component.  Robots, drones, and satellites are being used to increase safety further and protect lives.
  • The mining industry employs 228,777 U.S. residents; 15,718 residing in West Virginia.

Are you prepared for what’s next?

This list is but a sampling of the trends that could impact the coal sector over the course of 2019 and beyond. We’re here to help you understand the unique effect each trend could have on your organization, so you can make well-informed decisions for the year ahead. If you’d like to explore how our energy practice could help your organization prepare for what’s next, please give us a call today.