West Virginia Executive Spring 2017 | Page 82

NATURAL RESOURCES AND MINING The natural resources and mining sector experienced the biggest setback, losing jobs at an average annual rate of 8 percent in the last three years. Most job losses took place in the coal mining industry, which contracted at 11.1 percent per year. The oil and natural gas industry, on the other hand, grew 6.5 percent per year. In the next five years, the sector as a whole is expected to register a positive job growth of 0.5 percent per year. The coal mining industry will see limited opportunities for growth. The highly productive thermal coal mines in Northern West Virginia and lower-cost metallurgical coal mining operations in the state’s southern coalfields will be better positioned to raise output and bring some idled workers back into the fold. Even with these moderate improvements, the industry will see employment contract at an average annual rate of nearly 2 percent per year through 2021. On the flip side, the oil and natural gas industry is expected to add jobs at a rate of 4.6 percent per year. Natural gas production will likely rise at nearly 10 percent per year. Production and job growth will tend to be strongest during the late 2017-2020 timeframe as the price environment improves in response to new pipeline capacity entering service and allowing stranded supplies from the Appalachian Basin to reach markets seeing aggressive expansion in gas for electricity generation. Longer term, prospects for liquefied natural gas (LNG) exports directly from Cove Point, MD, around 2018 will allow shipments of Marcellus Shale gas to flow to European markets where prices are higher. Furthermore, the recent expansion of the Panama Canal also raises prospects for LNG exports since it offers enhanced access to Asian markets where overall energy use continues to grow rapidly. Figure 3.2: West Virginia Energy Sector Employment Graph 3.2 WV Energy Sector Employment Coal, Thousands 28 Graph 3.4 Natural Gas Production by County Oil & Natural Gas, Utilities, Thousands 26 Oil & Gas 24 10 9 Coal 8 22 20 7 18 6 16 Utilities 5 14 4 12 3 10 Source: US Bureau of Labor Statistics; WVU BBER Econometric Model SOURCE: U.S. Bureau of Labor Statistics and WVU BBER Econometric Model SOURCE: WV Department of Environmental Protection Graph 3.3 WV Coal and Natural Gas Production Graph 3.3 WV Coal and Natural Gas Output 170 Coal Production (Millions of Short Tons, SAAR) Natural Gas Production (Billions of Cubic Feet) 140 450 Coal 300 120 250 110 90 400 350 130 100 200 Natural Gas 150 100 80 50 70 0 SOURCE: U.S. Energy Information Administration and WVU BBER Econometric Model 80 Graph 6.4 Top Destination States for Shipments of WV Coal to Electric Utilities, 2008 vs. 2015 500 160 150 550 WEST VIRGINIA EXECUTIVE SOURCE: U.S. Energy Information Administration