The end of 2019 marks the close of a decade that has seen steep drops in coal production and consumption in the U.S.
Yet despite St. Louis’ position as a hub for coal companies’ corporate offices, the city doesn’t stand to feel significant employment effects from coal’s decline, according to an energy analyst.
Arch Coal, Foresight Energy and Peabody Energy all have corporate headquarters in St. Louis, but the companies’ collective employee count in the area is likely only in the hundreds, according to Karl Cates, an analyst with the Institute for Energy Economics and Financial Analysis, which advocates for a transition to “diverse, sustainable” energy.
A decade of decline
Bankruptcy has touched all of St. Louis’ biggest coal companies in the past few years. In late October, Murray Energy, which owns a controlling stake in Foresight Energy, announced it was filing for Chapter 11 bankruptcy protection.
According to data from U.S. Energy Information Administration, U.S. coal production and consumption has been steadily decreasing since 2008. Last year, production was 755.52 million short tons, a 35% decline when compared with 2008. Consumption saw a bigger drop, 38%, in the same period.
That trend has been driven by increased competition in energy markets, with the rise of cheap natural gas and renewable energy, including solar and wind power, competing with coal.
Missouri’s role in coal
In terms of coal production by state, Wyoming topped the country with more than 304 million short tons in 2018. The No. 2 state for coal production was West Virginia, with 95.3 million short tons. Missouri produced 259,000 short tons of coal last year, ranking 22nd nationally.
While Missouri does not play a major role in coal production, it houses those corporate headquarters. Cates said that’s because St. Louis is a transportation center, located in the middle of the country along the Mississippi River, key roads and railways, and because it’s close to important coal-producing regions.
Even with production and consumption declining, Cates said it would not have much impact on St. Louis’ economy because coal employment in the area is limited.
According to Peabody’s website, 350 of the company’s employees work at its headquarters. Foresight Energy and Arch Coal did not respond to Missouri Business Alert’s request for employee counts at their corporate headquarters, but Cates estimated total coal employment in St. Louis numbers in the hundreds.
He said the impact of coal’s struggles in St. Louis is minuscule when compared with what is happening in coal-producing regions across the country.
“Those are the communities that are really feeling pain and are going to feel more pain,” he said.