A group of four Downstream officials, including president Evan Hansen and lead author Rory McIlmoil, say in the report that in addition to regulatory challenges and declining reserves, other issues have played a role in CAPP’s decline.

“What we were trying to do was provide a more comprehensive analysis of the full suite of challenges facing the region,” McIlmoil said.

“There’s a lot of uncertainty surrounding what those market trends will look like in the future and how they’ll impact Central Appalachian coal.”

The group looked at the central Appalachian industry in the report as well as the states from which its tonnage demand comes, including West Virginia, Kentucky, Virginia, and Tennessee, and noted that many of the coal-fired facilities in those states have already begun making the move to natural gas.

In fact, the authors found, 30 of the 137 power plants using CAPP coal are in line for retirements by 2016.

“Central Appalachian coal production reached an all-time peak of 294 million tons in 1990 and peaked a second time at 291 million tons in 1997,” the researchers said.

“Since then, production has declined by 55% in Tennessee, 44% in eastern Kentucky, 37% in Virginia, and 29% in southern West Virginia. As of 2011, regional coal production amounted to 185 million tons – 17% of total United States coal production.”

Additionally, it said, underground mining had declined to such an extent that it and surface mining now produce about the same tonnage.

“The share of regional coal produced by surface mining increased consistently from 1985 through 2007, as surface mining increased while underground mining decreased,” Downstream said.

“Since 2007, surface and underground mines have each accounted for roughly half of regional production, and production from surface and underground mines has declined relatively equally.”

It also looked at the issue of labor, noting labor productivity had been trending downward since 2000. This, the group said, was because more work was required to produce each ton because of the extinction of thick, easily accessible seams.

“Another implication of a decline in labor productivity is that CAPP coal mines are more expensive to operate compared with those in other basins and require higher coal prices in order for mines to be economical to run,” the firm said.

Additionally, the authors said coal exports were likely not an option for the CAPP region, at least for those mines in eastern Kentucky, as much export tonnage was metallurgical coal.

The state’s met reserves make up a lesser percentage than thermal, and it exported 5.1Mt in 2011 while West Virginia exported 29.3Mt.

Kentucky is on such shaky ground that the researchers called Pike, Knott, Letcher and Wise counties, Virginia “highly vulnerable” locations.

Pike in particular, they said, had 12 mines accounting for half of annual production. By 2011, seven had closed.

Additionally, Pike County produced 20 million tons of coal in 2001, but demand called for just 12Mt a decade later.

In response, Downstream called on the county’s policymakers to diversify its economy, along with other areas in the vulnerable zone.

“An additional 10 [counties] are classified as moderately vulnerable: Bell, Harlan, and Martin counties in Kentucky; Claiborne County, Tennessee; Lee County, Virginia; and Boone, Kanawha, Lincoln, Mingo, and Nicholas counties in West Virginia,” the authors said.

“These conclusions are vital for both state and local officials in determining where development efforts and financial resources should be focused.

“Indeed, comprehensive, focused policies and investments will be needed in order to build the foundation for new economic alternatives in coal-producing counties – especially those in which coal-related jobs will decline.”