Coal depletion forecast to hit Central Greene economy
WAYNESBURG – Central Greene School District will see a significant decline in the amount of revenue generated from coal within six years and will not be able to rely on it at all within 15 years, according to a mineral evaluation expert. Jeffrey Kern of State College-based Resource Technologies Corp. spoke before a small, yet interested group at the district’s administration building Tuesday evening to discuss the future of coal as a revenue source for the district, and for the county as a whole.
The county hired Kern for his assistance in the countywide property reassessment, to help the county assessment office arrive at fair market values for all of the coal mining operations and gas wells in the county. He said that, until this year, almost half of the county’s value came from coal, but that number is now down to almost one-third of the county’s total revenue.
“Last year, the total value of coal was $210 million. This year, it is more like $400 million,” he said.
Some of the reason for that increase came from changing the way each of the mining operations was valued. Before the reassessment, Kern said the entire operation was given a value, but now the mines are broken out into three distinct pieces: the active mine, the reserves and the mined out area.
The value was also arrived at by determining the present worth of the expected cash flow of each mine in the county, he said. Kern said a value of $26 per ton was the starting point for coal in Greene County, with fluctuations allotted for the amount of sulfur in each given area of coal.
Between 35 and 40 million tons of coal are mined out of Greene County annually and Kern said his research indicates that the trend will continue at that rate until all of the mineable coal has been extracted.
For the eastern part of the county, most – if not all -of the coal that was available has been taken, but for districts like Central Greene and West Greene, coal is still an important revenue stream. Central Greene derives 24 percent of its total $114 million market value from coal, according to district business manager Walter Stout, who said the district sees a 2 percent decline annually.
Stout said the district felt the effects of a major coal depletion in 1998 and continues to see the amount of coal revenue decline. He said the increase in surface properties has helped stave off the effects of the depleting coal revenue, but as the coal is mined faster and faster, not enough new surface properties will come into the district to make up the difference.
“Coal is a non-renewable resource and we see it going by on the train every day,” he said. “I show the directors every year in the budget process the assessed value of the district and they can see that the money from coal won’t be here forever.”
Kern said that revenue could be generated in other areas of the county if new mines or new permit areas for mining are established in the years to come, but Central Greene does not have that option, as all of the coal that is available to be mined will be extracted within the next 15 years.
“Essentially, coal is gone in Central Greene and it will start looking more like Carmichaels,” he said.
For the county, Kern said no new mines are in the works, no new permit applications have been filed for new mining areas in western Greene County, Consol Energy’s Bailey Mine will have only about seven years of operation left and Dilworth Mine is closing.
He said the county could start to feel a serious decline in value within three years and, if no new mines or permit areas open up, the county could eliminate coal revenue from its budget within 15 to 20 years.
Gas wells and gas storage facilities also were valued in the reassessment, which Kern said will most likely land the county in court with utility companies contesting their value claims. He said the coal companies also are expected to appeal the values of most or all of their parcels, and those appeals also could lead to court hearings.
Another meeting to discuss the mineral values with residents, local officials and school district officials in the Carmichaels, Jefferson-Morgan and Southeastern Greene districts will be held Thursday at 6 p.m. in the Carmichaels Area Junior-Senior High resource room.