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Kentucky Energy Chief Acknowledges Dismal Short-Term Outlook For Coal

The new head of Kentucky’s Energy and Environment Cabinet doesn’t expect any short-term rebound in the state’s struggling coal industry. In his first appearance before the state Senate Natural Resources and Energy Committee, Secretary Charles Snavely told senators the outlook wasn’t good over the next five years.

State Sen. Ray Jones, a Pikeville Democrat, told Snavely, a former coal executive,  about the suffering in his district as more miners are laid off, and asked if there was any hope that the industry would recover soon.

“Well, I regret you asked me that question in a public forum because if you ask me a question, I’m going to give you the answer,” Snavely said. “I don’t feel that within a 5-year timeframe in Eastern Kentucky that (there) will be a rebound in the coal industry. I don’t see it.”

The reasons why are complicated. Snavely said they include world economic conditions, competition from cheaper natural gas and regulatory uncertainty that’s making it more difficult for electric utilities to invest in new coal-fired facilities.

“And if you combine that with the fact that generally, for coal that’s used to produce electricity, Eastern Kentucky especially is on the higher end of the cost curve,” Snavely said. “The cheapest coal that’s produced in the United States, it comes out of the Illinois Basin or it comes out of Wyoming, Montana.”

Snavely wasn't asked about coal's long-term prospects, though many experts say it's unlikely to ever employ as many people in Kentucky as it has in the past.

The state’s latest quarterly coal report was released last week; it showed Kentucky's coal production at its lowest level since 1954, and more than 10,000 coal miners have lost their jobs since the fourth quarter of 2008.