Alpha Natural Resources To Cut 1,100 Coal Miner Jobs As Coal Demand Falls; Demand For Natural Gas Increases

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Alpha Natural Resources said it would cut 1,100 jobs in West Virginia by mid-October, citing falling demand and EPA coal industry regulations. Reuters/Shannon Stapleton

One of the nation’s largest U.S. coal companies said it may lay off 1,100 miners in West Virginia this fall as competition from natural gas, falling prices and tougher regulations continue to squeeze the industry. Alpha Natural Resources Inc. (NYSE:ANR) announced the looming layoffs at 11 of its affiliated surface mines in the state.

“As difficult as these decisions have been, they’re essential for our organization in a business environment that’s undergone and enormous and fundamental transformation,” Paul Vining, president of Bristol, Virginia-based Alpha, said in a statement on Thursday. The job cuts are slated to take place by mid-October.

The announcement follows layoffs by Alpha’s competitor, St. Louis-based Arch Coal Inc. (NYSE:ACI), which last week cut more than 200 full-time jobs at its operations in Virginia and Kentucky. Arch Coal said it is “actively responding to currently challenged metallurgical coal markets while striving to enhance our overall competitive cost position in Appalachia.”

Industry forecasts put 2015 coal production from Central Appalachia at less than half of what it was in 2009, in part because of competition from other coal-producing regions, but largely because power plant operators are increasingly switching to cheaper, lower-carbon natural gas to generate electricity.

Coal plants accounted for about 40 percent of total U.S. electricity generation in 2013, down from about 52 percent in 2000. The Environmental Protection Agency expects that number to dip even further to 30 percent by 2030. Natural gas, meanwhile, climbed to 27 percent of all U.S. electricity demand last year, up from just 16 percent in 2000. In the next two decades, it could reach about 32 percent, the EPA projects.

Part of these reductions in coal -- and gains in natural gas -- will come from proposed EPA restrictions on carbon emissions from existing power plants. The coal industry and its supporters in Congress have vowed to fight the Obama administration on its so-called “war on coal.” On Thursday, several thousand unionized coal miners, electrical workers and others marched in downtown Pittsburgh to protest the EPA rules, the Wall Street Journal reported. Federal officials are set to hold public hearings there over two days this week.

At a recent Senate oversight hearing, EPA administrator Gina McCarthy rejected the idea that the federal government was attacking coal. She said that coal-rich states wouldn’t have to give up the fossil fuel -- they’d just have to use it more efficiently or find ways to capture and bury the carbon emissions. “This is a very consistent strategy to support the president’s all-of-the-above energy policy,” she told the Senate Environment and Public Works Committee on July 23.

Coal-state leaders on Thursday seemed unconvinced. “For years, we have tried to warn the EPA of the consequences of its irresponsible mandates and today, our fears have unfortunately become our reality,” West Virginia Gov. Earl Ray Tomblin said in a statement. “I again urge the EPA to reconsider its proposed plan and realize the real impact these new rules have on West Virginia miners, their families and our communities."

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