As Sean and I have both touched on, one of the central factors causing the decline in Central Appalachia coal production is the exhaustion of thicker, more easy to mine, coal seams.
One way to gauge this trend is by looking at coal productivity. Coal productivity can be measured in two ways. The Energy Information Administration measures productivity as the average number of tons mined by a worker in an hour. Another way to gauge productivity is by looking at state coal mining real GDP per worker. Lets look at this one first.
As the chart below shows, coal mining output per worker as been declining since 2000 and fell to its lowest point in 2008. Manufacturing – which unlike coal over the period as been shedding jobs – has seen a growth in productivity. In 2000, real coal mining GDP per worker was just about $250,000 compared to just $150,000 in 2010. Manufacturing, on the other hand, grew from about $80,000 per work to almost $100,000 after adjusting for inflation.
Somewhat paradoxically, the decline of coal mining productivity has also been a factor in the rise in coal mining employment over recent years. As the chart below demonstrates, coal mining productivity according to EIA peaked in 2000 – the same year as it did using the alternative measure above – and has declined sharply since this time. However, over this same period coal mining employment rose from about 15,000 to about 20,000.
In 2000, W.Va. mined about 158.3 million tons or about 10,000 tons per worker. In 2010, W.Va. mined 135.2 million tons or about 6,600 tons per worker. While the drop in productivity was certainly a factor in the increase in Central Appalachian coal prices over this period, it was also a big factor in the jump in coal employment.
