In mature mining areas, especially those that are a decade or more past their years of peak production, both production decline rates and reserve decline rates coupled with coal reserve estimates can be used to construct predictive production rate models. In general, to extrapolate projections from declining production rates, historical production data are entered into spread sheets and are used to calculate year-to-year growth rates (this year's production/last years production). If there is an annual increase, the value is greater than 1; if there is a decrease, the value is less than 1. Mean production decline rates (mean negative growth rates) are calculated from the data and are, in turn, used to calculate the projection. Short-term production decline rates that are calculated during a period of economic downturn are likely to be misleading, however, and their use would result in a long-term projection that declined too steeply.
For reserve decline projections, historical data are entered into a spread sheet together with a hypothetical remaining reserve estimate for the current year. The remaining reserve for each preceding year is calculated by adding the annual production, year by year, back into the reserve estimate. Reserve decline rates are then calculated by dividing each year's remaining reserve by last year's remaining reserve. The value is always less than one. A mean annual reserve decline rate is calculated for the approximately 10-year period prior to the year from which the projection is to be made. Because the decline rates generally are not linear, a rate of change is calculated and applied to the reserve decline rate; this continuously changing decline rate is used to project remaining reserves into the future. Projected annual production rates are obtained by subtracting projected annual remaining reserves, year by year, and are used to construct the graphic projection.
The historical production curve for anthracite is used herein to illustrate the use of both production decline rates and reserve decline rates to forecast future production (figs. 3A, 3B). Anthracite production declined from 99.67 million tons in 1917 to 73.8 million tons in 1929 at an annual rate of 3.56 percent (excluding data for 1922 and 1923, when declines were excessive, perhaps because of strikes). In 1917, the year of peak production, cumulative production of Pennsylvania anthracite was about 2.8 billion tons. Seventy-eight years later, cumulative production was about 5.5 billion tons, almost twice the cumulative production at the year of peak production, reflecting the near-normal distribution of the historical production curve for anthracite. Although the extrapolation cannot predict the economically driven episodes of high and low production, such as occurred during the World Wars and the Depression, the calculated production decline is generally close to the observed production decline from 1929 to the present (figs. 3A, 3B).
Reserve decline rates can also be used to construct predictive models for future coal production, even before the year of maximum production is attained (fig. 3B). The use of a reserve decline rate, by its very nature, requires a reserve estimate and is not a simple extrapolation of historical trends into the future. Reserve decline rate models, therefore, may be improved as reserve estimates are improved and are a flexible tool in iterating production rate projections.
Figure 3A.Production decline projection:
Observed (solid line) and calculated (dashed line) historical
production data for Pennsylvania anthracite. The long-term production
decline rate was projected from the 3.56 percent decline rate
estimated from 1917 to 1929 production data. Although the calculated
decline rate missed production perturbations caused by the depression
(1929-1932) and World War II (1942-1945), it generally follows
the observed decline curve closely.
Figure 3B.- Reserve decline projection: Observed (dashed line) and calculated (solid line) historical production data for Pennsylvania anthracite. The calculation is based on a reserve estimate of 4 billion tons of anthracite in 1905 (cumulative production plus 5 mt/yr current production times 30 yr = 150 mt remaining reserves, as of 1/1/95). The initial annual reserve decline rate, from 1905 to 1906, was estimated as 1.9 percent. A rate of increase in the reserve decline rate was calculated from the geometric mean for the rate of increase for the preceding eight years as 0.082 percent per annum. Although the curve produced by using this decline rate fell short of the peak production in 1917 and missed production perturbations caused by the depression (1929-1932) and World War II (1942-1945), it generally follows the observed decline curve closely for the next 75 years.
Virginia has three historical mining districts of
significance: the Richmond basin of Early Mesozoic age, the Valley
coal fields of Mississippian age, and the southwestern coal fields
of Pennsylvanian age. Only the latter, which is an extension
of the great Pennsylvanian coal fields of the Appalachian Plateaus
into the southwestern corner of Virginia, is of any current economic
significance to the State. Because of the remoteness of the southwestern
Virginia coal fields from the industrial markets of the northeast,
full-scale development did not begin there until 1882 (Hibbard,
1990), much later than the first production of Pennsylvania anthracite
Figure 4. Comparison of historical production data for Pennsylvania anthracite and Virginia bituminous coal. Production commenced much later in Virginia than in Pennsylvania and peaked at a little less than half of the maximum production for anthracite.
Declining production from major beds.--Recent trends in coal production from the major
producing coal beds in Virginia are indicative of an imminent
production decline for the State. Coal is currently produced
from more than 50 coal beds in southwestern Virginia. Of these,
18 beds have produced about 84 percent of Virginia's coal since
1951 (table 5). Ten of these coal beds reached their year of
maximum production more than 10 years ago, and the remainder attained
their peak production year (thus far) 5 years or more ago. It
is apparent that half or more of these coal beds will never again
attain past production rates, and production from the remainder
may exceed current levels only if current mine closures are offset
by the opening of several additional large mines.
[The six top coal beds have produced more than 90 million tons of coal each, and each of these beds is more than 6 years past peak production.]
|Coal Bed||Cumulative production 1951-1995||Peak Year||Production||1995 production|
Total major beds: 1,298
Virginia cumulative production 1951-1995: 1,546
Percent In major beds: 84
Figure 5.- Declining coal reserves at Virginia's mines
|Year||>1,000K||500K-1,000K||300K-500K||Total production from large mines||Virginia annual production||Percentage of large mines|
Figure 6. Coal production from mines producing more than 300,000 tons of coal annually.