US Energy: Fracking Towns 1, Coal Towns 0

♠ Posted by Emmanuel in at 1/07/2014 08:24:00 AM
And that accent you've tried so desperately to shed: pure West Virginia. What is your father, dear? Is he a coal miner? - Sir Anthony Hopkins as mad genius "Hannibal Lecter" in the Silence of the Lambs.

The recent US energy boom due to the large-scale application of fracking has not been a boon to everyone. In a country as large as the US, some energy-producing communities were bound to benefit and others to suffer from the gales of Schumpeterian "creative destruction." In other words, capitalism often produces innovations alike natural gas fracking which render older technologies and industries based on them obsolete. In the process, the latter lose their economic viability. Although the Stateside coal mining industry has faced several challenges in the past, it has not really been decimated in the same way Europe's has. Or, until recently, that is. The advent of fracking has thus benefited communities producing natural gas at the expense of those producing coal:
Unprecedented pressures on the U.S. coal industry and nearly two years of mine closures and layoffs are reshaping the heart of the Central Appalachian coalfields in ways that many experts believe could be permanent. While the coal industry overall is losing market share to abundant natural gas, mines in Central Appalachia have become increasingly uneconomical. Natural gas is cheaper, and so is coal mined in two other big coal basins centered in Wyoming and Illinois.

A Wall Street Journal analysis of Mine Safety and Health Administration data reveals that the picture is bleakest across a swath of 26 counties in Kentucky's eastern coalfields, where coal has been the lifeblood for more than a century. The number of coal-mining and related jobs in the region remained fairly steady between 2000 through 2011, fluctuating from one quarter to the next by an average of about 400 jobs, but never dipping below 11,400.
Since 2011, the area has seen an unrelenting decline that left eastern Kentucky with just 8,000 mining jobs in the second quarter of this year. State officials say there are now fewer miners working in Kentucky than any other time in records dating to the 1920s—a decline largely driven by the eastern slice of the state.
From an international political economy perspective, the interesting question is if the US (after a rather long lag) will follow the path long since taken by European countries which no longer have substantial coal industries. Environmental concerns helped do in coal there, and the same thing may be happening in the US:
The human toll is starkly evident. In Kentucky's Harlan County, the number of mining jobs had fallen 48% from 2011 through June, according to the Journal analysis. The county's unemployment rate had risen to 16.3% as of August, the 13th highest of more than 3,000 counties in the nation, according to Bureau of Labor Statistics estimates. Some declines are sharper in neighboring counties. As of June, mining jobs were down 54% in Letcher County from 2011, and laid-off miners are the equivalent of nearly half of unemployed workers. In smaller Knott County, mining jobs are down 68% from 2011, and the number of laid-off miners roughly equals the county's unemployed population.

Analysts have started to compare Central Appalachia to other mined-out areas around the globe, such as Germany's Ruhr valley, or Great Britain, which employed 6,000 coal miners last year, compared with 150,000 in 1983, according to the British government. 
The epic battle between the UK's liberalizing Prime Minister Margaret Thatcher and the unionist coal miner Arthur Scargill is legendary in helping break the power of unions in the UK. She famously broke his balls. Even after the Iron Lady passed away last year, bad blood persists three decades later. In the US, there is neither a champion of coal mining to rally around nor a strong union to back such interests. Hence, if coal mining goes Stateside, expect it to go quicker.