Quantifying The Coal Reserve Dilemma In The Central Appalachian Mining Region

Coal production in the Central Appalachian region has a long history, and it remains a major US coal-producing region. The coal industry consensus is that the region is in a state of decline as evidenced by the recent lower regional output. Are Central Appalachian coal reserves adequate for the region to continue as a major supplier of low sulfur coal? To answer that question, this paper focuses on the Central Appalachian coal reserve base estimates and production trends. Central Appalachian (CAPP) reserve evaluations face the difficulty that there are no publicly available databases that provide a thorough analysis of remaining CAPP reserves. Based on best available Energy Information Administration (EIA) data, a coal reserve estimate of 17.6 billion tons is developed. This estimate appears high according to industry perception. Recent United States Geological Survey (USGS), and other state agency coal reserve estimation projects are evaluated as alternative approaches to the re-serve estimation problem. Using the conclusions from these studies, the CAPP reserve base is estimated at 7.1 billion tons. Another perspective on the CAPP reserve base is provided by reserve holdings of major CAPP operating companies reported at 5.2 billion tons. A conceptual mining cost analysis indicates substantial price increases will be necessary to offset this deterioration in the economic viability of the reserve base.