Virginia’s Energy Region Virginia Coalfield Economic Development Authority Joint Meeting of the Commission on Electric Utility Restructuring and the Coal

Virginia’s Energy Region

Virginia Coalfield Economic Virginia Coalfield Economic Development AuthorityDevelopment Authority

Joint Meeting of the Commission on Electric Utility Restructuring and the Coal and Energy

Commission

September 8, 2004


VIRGINIA COALFIELD ECONOMIC DEVELOPMENT AUTHORITY

Employment by Major Industry—12/31/91vs. 12/31/01

Employment Sectors

Virginia Employment Commission: 9,025 Jobs Gained; 6,053 Mining Jobs Lost; 779 Net Jobs Gained in these Sectors.

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3/31/19913/31/2003


Sector GainsSector Gains• Services—3,819 jobs gained (41%

increase)

• Government—1,848 jobs gained (15% increase)

• Trade—1,713 jobs gained (13% increase)


Sector LossesSector Losses

• Mining—6,053 jobs lost (52% decrease)

• Manufacturing—2,026 jobs lost (28% decrease)


Mining Industry TransitionMining Industry TransitionCoal production and employment:

1991 2001

Production (thousand short tons)

42,336 32,601

Production employment 9,756 5,261

Production wages

(in thousands of dollars)

268,177 194,741

Average productivity (tons per worker hour)

2.5 3.33

Source: Virginia Energy Patterns and Trends website, Virginia DMME, Division of Mines


Mining Industry TransitionMining Industry TransitionLargest employers

1991 2003Island Creek Coal Company (963 employed)

Paramont Coal Company Virginia, LLC (670 employed)

Clinchfield Coal Company (834 employed)

Consolidation Coal Company (391 employed)

Westmoreland Coal Company (556 employed)

A&G Coal Corporation (354 employed)


Virginia Coal Production, 1814- 1999Virginia Coal Production, 1814- 1999


Coal Industry EmploymentCoal Industry EmploymentYear Annual Employment Annual Average Weekly Wage

2003 5,288 $930

2002 5,737 $874

2001 6,236 $874

2000 5,989 $848

1999 5,985 $806

1998 6,832 $803

1997 7,747 $771

1996 7,413 $772

1995 8,139 $753

1994 9,032 $744

1993 9,964 $699

1992 10,543 $720

1991 11,192 $677

1990 12,260 $647

1989 12,770 No data

1988 12,707 No data

Source: Virginia Employment Commission ES-202 Annual Average Weekly Wage by Size Code and Annual Average Employment by Size Code. Note: 1999-2003 data is based on NAICS codes: 1988-1998 data is based on SIC codes.


Natural Gas ProductionNatural Gas Production

Source: Virginia Energy Patterns and Trends website


Natural Gas ProductionNatural Gas Production

1991 2001

Number of producing wells

886 3,521

Dry production (million cubic feet)

14,906 71,543

Source: Virginia Energy Patterns and Trends website, Virginia DMME, Division of Gas and oil

Largest companies:Equitable Resources/EREXConsol, Inc.Pocahontas Gas Partnership


Non-traditional economic Non-traditional economic development investmentsdevelopment investments

• Appalachian School of Law--$1 million loan

• Grundy Town Relocation—$1.5 million loan

• University of Appalachia School of Pharmacy—$3 million in matching loan funds

• Dickenson Community Hospital—$1,765,000 loan


Loans and grants as of Loans and grants as of 12/31/0312/31/03

Locality

Severance Tax Receipts

7/1/88-12/31/03% Total Funds

Approved%

TotalTotal Projects

Buchanan $22,155,738 44.3% $25,420,974 38.8% 46

Dickenson $8,752,244 17.5% $10,305,062 15.7% 18

Lee $1,095,017 2.2% $1,656,028 2.5% 11

Russell $1,927,800 3.9% $5,513,888 8.4% 14

Scott $17,657 0.04% $1,198,686 1.8% 3

Tazewell $1,913,269 3.8% $4,858,815 7.4% 20

Wise/Norton $14,170,314 28.3% $16,393,971 25.0% 30

Regional N/A N/A $100,000 0.2% 1

TOTAL $50,032,039 100.0% $65,447,424 100.0% 144


VCEDA Approved Funds 1988-VCEDA Approved Funds 1988-20032003

Property Acquisition, 3,552,444, 5.9%

New Industry, 28,616,463, 47.6%

Tourism, 756,083, 1.3%Site Dev. & Infra., 9,660,586, 16.1%

Miscellaneous, 377,961, 0.6%

Shell Buildings, 9,587,120, 16.0%

Existing Industry, 7,118,037, 11.8%

Planning/Feasibility, 405,939, 0.7%

This chart shows the amount of funds approved for loans and grants from 7/1/88-6/30/03, categorized by purpose.


Re-Branding of RegionRe-Branding of Region

• Consolidate into one organization– Drop Virginia Southwest Promise

• Simplify and unify VCEDA brand

• Slogan, “Virginia’s Energy Region”– Reflects natural resource history of

region while focusing on the skill and ingenuity of the workforce for present and future industries.


Target IndustriesTarget Industries• Automotive• Wood Products • Customer Contact Industry• Electronics• Metal Fabrication• Independent Power Producers


Industry AnnouncementsIndustry Announcements20042004

• New Industry– AOL/Virtus Marketing, Norton, VA

• 67 Jobs - $500,000 Investment

– Blue Ridge Wood Products, Bluefield, VA• 160 Jobs - $3,600,000 Investment

• Expansions– VFP, Duffield, VA

• 72 Jobs - $650,000 Investment

– Joy Manufacturing, Duffield, VA• 45 Jobs - $1,400,000 Investment


VCEDAVCEDADiversification HistoryDiversification History

• Since 1988, 61 companies have been recruited to the Coalfield region.–18 Information Technology & related

companies–4 Automotive companies–9 Wood Products companies–3 Electronic & related companies–11 Textile & related–14 Other


VCEDA Diversification History VCEDA Diversification History cont’dcont’d

• More than 9,298 jobs have been created as a result of these recruitment efforts

• Investment in these industries exceeds $184,327,540

• 31 Existing industry expansions have occurred, creating 2,098 new jobs and investing $81,867,956

Documents

Virginia’s Energy Region Virginia Coalfield Economic Development Authority Joint Meeting of the Commission on Electric Utility Restructuring and the Coal