Coal from the Appalachian region has really fallen out of favor in the United States. So much so that Wyoming mines accounted for nine out of the 10 top producing mines in 2012. This should come as no surprise to coal investors since the Powder River Basin is the most economically sensible coal to produce right now as compared to natural gas. CONSOL Energy (CNX 2.42%), which produces coal in Appalachia, is a perfect example of what producers in that region have been forced to do -- it has dedicated the bulk of its 2013 capital expenditures to natural gas production.
The two top mines are operated by Peabody Energy (BTU) and Arch Coal (NYSE: ACI), and together these mines accounted for 20% of total U.S. production. Why is this so important for these coal miners as they struggle to compete with natural gas? Tune in below.