# Why did us coal production peak in 1929 and 2008 [closed]

Hint

Its because resource depletion causes recession

• I downvoted this because the question is very poor. "Hint: The answer is <wrong answer>. Otherwise prove me wrong." – user253751 Jul 10 at 11:10

The usual definition of recession can be simplified to be a drop in production across the economy (although various criteria are used by different bodies to determine recession dates).

Coal production is part of GDP. Hence, it is unsurprising that it falls in a recession.

In 1929 coal production peaked and then declined because all production did as pointed by @BrianRomanchuk in his +1 answer. A coal is an intermediate good that has, for most part, value only insofar as it can be used as an energy source for other production. A Great Depression has by now relatively well established origins in stock market crash that was related to radio technology. That was the original spark and as documented by Milton Friedman and Anna Schwartz in their book A Monetary History of the United States this recession was aggravated and turned into Great Depression by misguided action of the Federal Reserve which let money supply to collapse as response to recession instead of expanding it.

This is not the only reason for why Great Depression occurred but its the major accepted one. In fact it is so accepted that former chairman of Fed Ben Bernanke even officially acknowledged that the Great Depression had monetary origins.

In 2009 coal decline was inevitable. This is not due to depletion. In fact US coal reserves are so incredibly massive that according to US energy information administration:

As of January 1, 2019, the demonstrated reserve base (DRB) was estimated to contain 474 billion short tons. In the United States, coal resources are larger than remaining natural gas and oil resources, based on total British thermal units (Btu). Annually, EIA reports remaining tons of coal in the DRB, which is comprised of coal resources that have been identified to specified levels of accuracy.

Rather coals decline is inevitable as it is an industrial resource of bygone era. This is because as this brookings article explain, $$90\%$$ of coal production is devoted to later producing energy and in this aspect coal faces too much competition from the cheap oil, natural gas and to some extent renewable sources. In fact if coal production would not be heavily subsidized by government the industry would most likely already collapsed due to lack of demand.

The Great Recession has well established origins in a housing market boom, financial collateralization and rise of shadow banking (See Eichengreen's book Hall of Mirrors) and it had nothing to do with energy production per se. Production most likely again declined as a result of shock and fall in demand.

Furthermore, an idea that there exist any definitive link between production and resource depletion is absurd. In $$1000$$AD coal production was abysmal relative to the coal production in modern age. According to your logic that would imply that Middle Ages were a time of great coal depletion. Clearly the problem for our ancestor was not lack of coal but lack of demand for coal as there was no large scale use for it. As technology changes some resources become obsolete while other gain in prominence.

In fact as the statistics from Statista show that as time progresses our coal reserves increase as we find more and more sources of coal. Of course, amount of coal is not infinite but there is no indication that we will deplete all coal in our lifetime, maybe never as it is likely that coal industry will die before we even consume all coal there is on this planet.

Furthermore, as the Fed time series on coal production in US shows, where economic recessions are highlighted in grey color the drop in coal production almost always happens after recessions not before.

As the graph shows often you see coal production declining right after recession started because as overall production declines the demand for energy and consequently energy production declines with it. Furthermore, as the last part of the graph shows the coal production in US continued to collapse even long after Great Recession ended, and before the recent corona outbreak US was operating at near full employment. The US unemployment rate in 2019 was record low despite collapsing coal production.

Furthermore, as the data show the 2008 recession already started in 2008Q1 while the peak coal production occurred in 2008Q4, hence with almost a year lag.

One generally cannot draw causal conclusions and inferences from graph itself but data do not show anything resembling causation going from coal production to the general output rather the data point to the exact opposite.

Furthermore, for a resource depletion to be a cause of anything it first must occur. As the above shown data and sources show both US and entire World has enough coal for decades to come. Hence, the premise itself is wrong to begin with and if you argue from incorrect premises your conclusions will most likely be incorrect as well.

• Why are you spending this much time answering a troll? – Giskard Jul 9 at 6:59
• @Giskard because even though this user is just a troll the idea of impending economic doom due to running out of resources is somehow part of our culture so other people searching for it might find it useful – 1muflon1 Jul 9 at 10:02
• Question currently has 21 views, -3 votes and 3 close votes, it is unlikely to stay up. – Giskard Jul 9 at 10:05
• If you would like to reach a large number of people obsessing over economic doom, I can probably refer you to some popular conspiracy Reddit threads :) – Giskard Jul 9 at 10:06
• @Giskard that’s true but unless it gets deleted it will stay archived and it will be searchable. Anyway you might be right it was mistake to waste so much time on troll - I can’t go back in time now. – 1muflon1 Jul 9 at 10:10