The US Coal Industry Is Shuttering Mines and Its Market Value Is Plummeting, Says a New Study

For better or worse, coal helped build America. Now America seems to be leaving it behind.

But while coal is still the single biggest fuel in US power plants, its share of the market has dropped from more than 50 percent of electric production in 2000 to less than 40 percent last year. Production has dropped to levels not seen since the early 1990s, according to US Department of Energy figures.

The Carbon Tracker Initiative, a financial think-tank that focuses on the risks posed by climate change, estimates that US coal use peaked in 2007 and that more than 260 mines closed between 2001 and 2013. Since 2009, the market value of the US coal sector has dropped by 76 percent, the report found.

And Wall Street has responded by turning sharply bearish on the industry, with coal stocks going down for the past four years. The market consultants at Wood Mackenzie concluded last week that more production cuts "will need to happen sooner rather than later."

Andrew Ricci, editor of Levick Energy and a former aide to a coal-country congressman, said new concerns about climate change and advances in cleaner energy are "a very powerful one-two punch" that have coal consumers rethinking their plans.

"Other sources of energy are becoming cheaper, more reliable, and more accessible in a way that hasn't been the case before," Ricci told VICE News.

The hydraulic fracturing boom has produced a flood of cheap, cleaner-burning natural gas. New environmental regulations aimed at reining in carbon emissions and pollutants like mercury are putting the squeeze on utilities. Renewable power sources like wind and solar are also cutting into the electric market. Even one of the bright spots for the industry — the boom in coal-fired power plants in rapidly industrializing China and India — has dimmed as those countries seek cleaner alternatives or tap domestic coal supplies.

"It's costing the industry more to use coal, and the other options becoming more inexpensive make it hard to justify," Ricci said.

Environmentalists are cheering the trends. Coal is the most carbon-intensive fossil fuel, and the world needs sharp cuts in carbon emissions if humanity hopes to limit global warming to the UN goal of two degrees Celsius (3.6 Fahrenheit) by 2100.

"There's huge progress," the Sierra Club's Nicole Ghio told VICE News. "But the current trends not only have to continue, they have to accelerate."

Ghio was the co-author of a report last week that found the global boom in coal-fired power plants over the past decade appears to have peaked. Since 2010, two coal-burning power plants have been shelved or canceled for every one completed,the report found — a figure amounting to nearly 30 percent of planned projects. Meanwhile, the amount of coal-fired capacity in the United States and Europe has been shrinking, a trend Ghio said is bound to cloud the industry's prospects.

"Coal is a very risky investment," she said. "But the number of projects that are still in the works is way too much for us to stay below two degrees."

Related: 670,000 people died in China during 2012 because of pollution caused by coal burning

The industry and its supporters have blamed the Obama administration for much of the decline, accusing it of promoting a "war on coal." In February, coal boss Robert Murray told the Conservative Political Action Conference that President Barack Obama and "his bureaucrat appointees and political supporters" are trying to wreck the industry "for their own bizarre personal and political ends." Murray added that the climate-change "scare" is "purely political and not based on any science."

Coal fueled the mills and factories that made the United States the 20th century's leading industrial power, and the often-bloody history of American mining left its mark on American letters, movies, and song. And however good for the environment, its decline casts a shadow on the coal-patch towns where mines have been closing and workers have been getting laid off.

Ricci said some of those miners may get new jobs in the natural gas industry, particularly in states like Pennsylvania and Ohio where fracking is in full swing. But Evan Hansen, president of the West Virginia environmental consulting firm Downstream Strategies, said coal's slide has been tough on many towns in the southern half of the state. The mines there are older, the seams deeper and the black rock more expensive to extract, he said.

"It's the same southern coalfield communities that have very little diversification in their local community," Hansen told VICE News. "They're highly dependent on jobs and tax revenues from the coal industry and they're being hit very hard."

So is the state's budget, which depends on taxes on every ton of coal dug out of West Virginia hills.

"It a few hundred million dollars a year, but it's declining significantly," Hansen said. "It's a lot of money for a small state."

Related: Toxic Waste in the US: Coal Ash (full-length)

Ghio said companies are also using more destructive tactics like mountaintop removal to extract the remaining coal — tactics that require fewer workers — while spending more on new sources of energy "is good for jobs."

"A dollar invested in clean energy generates more jobs than a dollar invested in fossil fuels," she said.

But Hansen said the industries that promote the "war on coal" approach "are not appreciating the science of climate change and the need to address it."

"It's not really part of the public debate in West Virginia," Hansen said. "And to the extent that government leaders and regular people are not recognizing the need to address climate change, it does seem like the war on coal, because it seems to be coming out of nowhere."

Follow Matt Smith on Twitter: @mattsmithatl