High Prices Bring Upswing in U.S. Coal Industry

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Coal prices in Appalachia have doubled in the past three years. That has led operators to re-open mines once deemed not worth the trouble. And with demand for coal growing, mines have been working at full tilt.

ROBERT SIEGEL, host:

Those miners who died underground were helping to keep the lights here on the surface. The nation's appetite for electricity has led to a steady increase in demand for coal, and that has driven up prices in recent years. NPR's Scott Horsley has that story.

SCOTT HORSLEY reporting:

`Watching coal miners at work, you realize momentarily what different universes different people inhabit. Down there where coal is dug, it's a sort of world apart, yet it's the absolutely necessary counterpart of our world above.' George Orwell wrote that almost 70 years ago, and it's still true. Coal might have a 19th-century feel to it, but in the early years of the 21st century, coal still provides more than half the electricity in the United States, according to Mark Morey of Cambridge Energy Research Associates.

Mr. MARK MOREY (Cambridge Energy Research Associates): The economics of coal are pretty compelling. Today it's about a fifth the price of natural gas, so if you have a very large boiler as electric companies operate to generate electricity, coal has some very favorable advantages.

HORSLEY: The late 1990s saw a glut of coal that pushed prices down where some mines were hardly worth operating. But managing editor Jim Thompson of The Coal and Energy Price Report says that's reversed itself in the last three years as coal has once again become a hot commodity.

Mr. JIM THOMPSON (Managing Editor, The Coal and Energy Price Report): As natural gas prices accelerated, as demand for coal increased, the price of good central Appalachian coal essentially doubled. Now there are a lot of mines that weren't economic a few years ago that are economic, and those mines are being tapped. And I suspect that's the case with Sago.

HORSLEY: West Virginia ranks second in the country in coal production, far behind Wyoming, where coal from the Powder River basin can be mined more cheaply and burned more cleanly. But with demand for coal rising faster than supply, Thompson says Eastern coal is making something of a comeback.

Mr. THOMPSON: There are many, many, many coal companies in the East who would very, very much like to mine more coal, but there are shortages of labor, equipment, and many factors that are limiting coal production in the East.

HORSLEY: Just last month, the Labor Department announced a $3 million grant to help train new coal miners in West Virginia. Frank Hart heads the engineering school at Bluefield, West Virginia, State College. He says coal mining has become a highly skilled occupation, much in demand with the region's coal mining companies.

Mr. FRANK HART (Bluefield State College): They will basically just about hire every graduate that we have. There are just real opportunities there.

HORSLEY: Hart says a newly trained miner can easily earn a starting salary of $50,000 or more, and that's in a state with the nation's lowest household income. Even so, finding people who want to pursue a career in the boom-bust mining industry is not easy.

Mr. HART: Oh, I think in a lot of cases, parents really want their kids to get into some other type of industry when they graduate. Particularly a lot of them themselves have worked in the mining industry.

HORSLEY: In today's mechanized world, coal mining is no longer as physically punishing as it was in George Orwell's day, but the job is still demanding, dangerous and necessary. Scott Horsley, NPR News.

MICHELE NORRIS (Host): The increased demand for coal has introduced new safety challenges for the mining industry. You can learn why at our Web site, npr.org.

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