Study: Production costs key in closure of Appalachian coal mines

first_imgStudy: Production costs key in closure of Appalachian coal mines FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):A new working paper focused on Appalachia coal mines concludes that mounting production costs were responsible for far more closures than [falling] natural gas prices in the time period they studied.“We used a model to analyze these different scenarios, and what comes out of it is, rather than these different demand-side factors, which have been recently attributed as the biggest heartache for Appalachia mining firms, we actually found that it was their own production costs that were likely the biggest drivers of the industry’s decline in that region,” said Brett Jordan, a postdoctoral researcher at the University Alaska Anchorage’s Institute of Social and Economic Research and the lead author of the paper.The paper modeled mine closure decisions as a function of expected profitability and concluded that between 2002 and 2012 — a period that largely precedes a boom in Marcellus shale development that flooded Appalachia and surrounding regions with abundant and cheap natural gas —about two-thirds of observed coal mine closures were caused by declining profits. Some of the factors leading to reduced profits include lower worker productivity, higher health and safety costs, and higher bonding costs. Natural gas prices and reduced electricity consumption independently explain about one-third of the mine closures in the observed period, the report concludes.The new working paper from Jordan and his co-authors found that between 2002 and 2012, the real per-ton extraction costs in Appalachia had nearly doubled, with companies attributing factors such as the price of machine capital, steel, replacement parts, labor and diesel fuel in their public filings. Companies mining in the region have also increasingly pointed to tightening environmental and labor regulations as the depletion of coal reserves continues to push these companies into thinner and lower-quality seams of coal in the region.“The conclusion that declining mine productivity explains more closures than declining coal demand is perhaps surprising, given the focus of the literature and public debate on demand rather than supply-side factors,” the paper said. “However, this conclusion is consistent with the magnitudes of the shocks. During the sample period, declining productivity reduced annual operating profits three times as much as did lower natural gas prices or electricity consumption.”Had there not been such a drastic change in productivity, coal prices may have been sufficiently low for coal-fired plants to be competitive with natural gas plants, the report’s authors wrote.More ($): Study points to supply-side costs as biggest driver of Appalachia’s coal woeslast_img read more

Teenage pair shine at WPGA event

first_img Two teenage players from England Golf squads led the amateur challenge at the latest event on the WPGA One Day Series when they tied for second place. Cloe Frankish (image © Leaderboard Photography), 15, from Chart Hills in Kent, and Aimee Wilson, 18, from Mickleover in Derbyshire, both scored two-under 72 at Little Aston. They were in a three-way tie for second place and finished two shots behind the winner, Jo Hodge of Hamptworth in Wiltshire. A third squad player, Megan Clarke of Cleckheaton & District in Yorkshire, also finished in the top six with a score of one-over par. The WPGA has opened up entry to its popular One Day Series to U16 and U18 girls from England Golf’s regional squads to give them the chance to develop their skills in a tournament arena. This was the second event in the series and both have showcased the skills of the emerging amateurs, after Bel Wardle of Cheshire was joint runner-up in the first tournament. Rebecca Wood, the England Golf Women’s Performance Manager, said: “This was another fantastic outcome for the England Golf programme. I cannot highlight enough what a great experience this is for the players to add to their development journeys and I hope more players sign up for the remaining events.” Aimee Wilson, who trains with the West Midlands U18 squad and is the Derbyshire champion, was playing in her first pro event and confessed to shaking beforehand! But her father – and caddy – Mark, said: “She played absolutely fantastic, I was really proud of her, and she really enjoyed the experience. She was very happy.” She had four birdies in her round and came home in one-under par, with immaculate play which resulted in a birdie on the 10th and eight straight pars to finish with. Cloe Frankish, who trains with the South East U16 squad, was playing in her second One Day event and her mum, Claire, commented: “She really enjoyed it and it’s given her such a big confidence boost.” She was giving a new putter its first outing during the competition and was rewarded with an excellent performance on the greens, including holing at least one 30-footer. Altogether she amassed five birdies in her round. Click here for the full scores 21 May 2014 Teenage pair shine at WPGA event last_img read more