Jan 5 - Knight Ridder/Tribune Business News - Jeffrey Sparshott The Washington Times

The American coal industry, supported by burgeoning international demand for energy and continuing U.S. reliance on the fossil fuel for electricity, has seen steadily rising sales, revenue and investment following almost 20 years of stagnation.

"It is a thriving industry. We produce more coal year in and year out than ever before. It is still one of our lowest-cost, if not the lowest-cost, source of energy," said Trina Karolchik Wafle, associate director at National Research Center for Coal and Energy at West Virginia University.

A deadly accident at a West Virginia coal mine this week underscored the dangerous work performed by tens of thousands of miners to keep power plants and industries running worldwide.

Coal-burning power plants produce about half of all electricity in the U.S.

Rising prices for natural gas, caused by strong demand and exacerbated by hurricanes in the Gulf of Mexico this summer, has made some gas-fired plants too expensive to operate. They account for 23 percent of U.S. electric-generating capacity but less than 18 percent of output, according to the Energy Information Administration.

Regulatory limits on nuclear energy, which generates almost 20 percent of U.S. electricity, and technological barriers with other sources leave coal as one of the most cost-effective, if heavily polluting, sources of energy.

"Coal is still the predominant fuel used in generating electricity, and the demand for electricity continues to increase. Because of that, the demand for coal will continue to increase for the foreseeable future," said Pat Hemlepp, spokesman for American Electric Power, the largest U.S. coal consumer.

China, meanwhile, is demanding more fuel for its steel mills and growing electricity needs, prompting U.S. mines to export coal rather than leave it on the U.S. market. China is the world's largest coal producer and consumer.

"The wide-ranging economic expansion experienced in China in 2004 drove world markets for many commodities into overdrive and helped to re-establish the United States into Asian coal markets," the EIA said in a November report.

Rising global demand has been good news for U.S. mining companies, which sit on the world's largest coal reserves.

Third-quarter net income for Peabody Energy, based in St. Louis, increased 161 percent to $113.3 million. Arch Coal, also in St. Louis, said its third-quarter revenue increased 24 percent to a record $654.7 million, and Pittsburgh's Consol Energy reported record earnings of $377.0 million for its third quarter.

Most production comes out of Wyoming, with 396.5 million tons a year, followed by West Virginia (148.0 million tons), Kentucky (90.9 million tons) and Pennsylvania (66.0 million tons). Virginia is a relatively small source of coal, with 31.4 million tons extracted, according to the EIA.

With resurgent demand, production and profits, the industry is going through a small hiring boom. Coal companies had relied on improved mining technology to extract more from the ground with fewer workers -- miners extracted less than a ton of coal per worker per hour worked in the 1950s while today an hour of labor produces more than 6.8 tons.

But companies realize there is now a shortage of miners and engineers.

"The mining industry had been in the doldrums from early 1980s until early 2000 -- a 20-year period when they were hobbling along. They weren't hiring a lot of new people because of the economics," said Tom Novak, a professor at Virginia Tech's Department of Mining and Mineral Engineering.

"With the big resurgence, they realized they skipped a generation, both at the engineering level as well as with the labor force," he said.

Coal mining employment bottomed out at 68,300 in late 2003, but has since added almost 11,000 jobs, the Labor Department said.

Part of the attraction for workers is salaries that are competitive in the remote areas where mines are located. Nationally, the average weekly salaries for coal miners is $1,075.

But the work for miners is dirty and dangerous, although safety conditions have improved markedly -- from hundreds of fatalities a year in the 1960s and 1970s down to 28 in 2004 and 22 last year, according to the Mine Safety and Health Administration.

Twelve workers died in the West Virginia accident, the state's worst in more than 30 years.