Birth of a Utah Coal Mine in the Trump Era

 

 

By Amy Joi O'Donoghue

April 3, 2017 - American diplomat and political scientist Henry Kissinger once said that a diamond is a chunk of coal that did well under pressure.

Dan Baker says bring it on.

Even with coal mines closing around the country, coal-fired power plants shutting down by the hundreds and environmental groups waging an intense war against the fossil fuel, Baker is opening a new coal mine in Emery County, Utah in just a couple of months.

His catch phrase?

"No guts, no glory."

Baker is a plain talking Price native who has worked in mines around the world, including China, Australia and Indonesia.

His attitude epitomizes the name of his enterprise, Bronco Utah Operations, and like an untamed horse, Baker is intent on bucking the dreary and dismal trend that has plagued the coal industry.

"We see this mine as a great opportunity. One of the main reasons is the reserve base and the quality of the coal," he said. "The quality of the coal in the area has been reduced significantly over the years. This mine has got the best quality coal in the state of Utah."

Baker finalized the purchase of the former Consol Energy Mine in 2015, five years after the mine shut down and more than a decade after he first set his sights on acquiring the land flush with coal.

The purchase came before the election victory of President Donald Trump in a hotly contested race in which the media, the polls and the pundits predicted a win by Hillary Clinton.

Clinton had vowed to put coal miners out of work and to continue President Barack Obama's climate change legacy, a cornerstone of which is the Clean Power Plan targeting greenhouse gas emissions from coal-fired power plants. Obama, while in the White House, promised to "bankrupt" the coal industry, and from 2008 to 2012, more than 50,000 jobs in the industry were lost.

Cheap natural gas spurred by the fracking revolution and increasing federal regulations have put extreme pressure on coal, which has seen sharp price decreases, company bankruptcies, and production declines across the country.

But Baker, and the line of investors behind him, didn't flinch.

While he doesn't own a crystal ball and couldn't have foreseen Trump's unlikely victory, Baker unwaveringly believes coal has a future, as does his men.

"We were a little nervous there when the election was taking place," he said, putting his knuckles to his mouth as if biting his nails. "And it looked like Hillary Clinton was the leader in the process, according to the polls. But we sat and watched Donald Trump go throughout the country, and we felt like he was the kind of guy that we are — just simple Americans trying to provide for our families and our communities. We got a philosophy — no guts no glory — so we went for it."

Rising From the Dust

During a tour of the grounds where the coal mining infrastructure is being put into place, Baker gestures toward millions of dollars of equipment like a continuous miner machine, cranes, culverts and more.

He shows off the place much like the proud owner of a mansion, clearly excited to orchestrate the birth of a coal mine — something hasn't happened in Utah since 2010 when the Coal Hollow surface mine in Kane County began operations.

 

Workers watch drilling and blasting at the Bronco Utah Mine near Emery on Wednesday, March 29, 2017.

Last week, when Trump signed an executive order rolling back the Clean Power Plan and lifting the federal moratorium on new coal leases, optimism rippled through Utah's coal country.

"I feel like that was a move in the right direction. Sales will go up, consumption will go up, and mining will survive," said Russel Jensen, who has spent 40 years in the mining industry.

Jensen, Baker's maintenance superintendent, said the federal pressure on mining left a lot of casualties.

'"It's been devastating. Even vendors who have been in business 35 to 40 years have had to bail out. … People in the mining industry retired early and young kids had to move away."

Scott Turner, safety director for Scamp Excavation in Wellington, has a crew working at the Bronco Utah Operations mining site, preparing for startup operations.

Like Jensen, he said dwindling mining activity in Emery and Carbon counties has affected contractors like his company.

He praised Baker for having the courage to open a coal mine when a lot of gamblers wouldn't like the odds.

"It is a blessing we have the opportunity to do what we do," he said, "which is help supply energy for our nation and jobs for our local areas."

Politics and Optimism

Trump signed the executive order on energy independence flanked by coal miners, something that wasn't lost on Baker and others in Utah's coal country.

"We are very excited to think that President Trump is going to uphold his word and help energy move forward in the future," Baker said.

Carbon County Commissioner Jae Potter said in the same breath that Trump signed the executive order, two coal mine operators waiting on federal permits for well over a decade received word from the government they could move ahead with planned expansions.

The new leases, which had already gone through an environmental review, were not subject to the moratorium — but Potter said the timing added to the optimism.

Both the SUFCO and Skyline mines were hovering on the brink of being idled without the new leases, he added.

"They were up against the wall."

Alton's Coal Hollow Mine was looking to expand with a new federal lease, which now remains a viable option given the lifting of the federal moratorium.

Trump's actions, however, have already sparked lawsuits by environmental groups challenging his ability to lift the moratorium or pull the Clean Power Plan.

The lawsuits don't surprise Potter.

"The nongovernmental organizations have done a far better job saying how bad coal is compared to the industry saying how valuable it is," he said. "As coal producers, we have been made out to the bad guys, yet we provide great wages for families and we provide a stable power grid."

Potter accused the federal government of systematically trying to destroy the coal industry.

"I think the (Obama) administration had no other purpose than to close down all the coal in the United States," he said. "It dramatically affected us."

Potter said in the last couple of years alone, closure of the Deer Creek Mine and the Carbon Power Plant at Helper led to 2,000 lost jobs directly and in support industries like trucking and excavating.

"You don't have to be a coal miner to feel it."

When Trump signed the executive order on energy, Potter said there was a palpable shift in the mood of Utah's coal-producing region.

"Having been involved in the Clean Power Plan hearings and the coal moratorium, it was almost a sigh of relief that there was an opportunity that came about that would allow us to move forward with a very important part of our economy."

While there is now the promise of coming coal mine expansions, Potter says rural leaders are also keenly aware of the need to diversify their economy.

Trump's executive order buys coal-dependent communities more time, he added.

Rob Simmons, deputy director of the Governor's Office of Energy Development, said Trump's executive order is good news for the industry and the state.

"We are pleased to see the rethinking of unnecessary and industry-damaging federal policies like the coal moratorium and are dedicated to collaborating with our federal partners, industry and other stakeholders to improve policy and identify effective strategies to address current market challenges," he said.

Dependency on Coal

Coal production in Utah has been declining for years, and with it the money that supports coal-dependent communities. In 2015, coal production dropped to just over half of 2001 production levels. And for the first time in the nation's history, natural gas surpassed coal as the country's No. 1 source of energy in 2016.

A recent analysis by the U.S. Energy Information Administration, however, predicts there will be a slight uptick in coal production through 2018, with the sharpest increase occurring in the Western region of the United States in states like Utah and Wyoming.

 

U.S. Energy Information Administration, Short-Term Energy Outlook, February 2017

Baker says he has about 70 million tons of recoverable coal with his current permit on private land and if he is able to expand, there's another 40 million tons waiting to be mined.

"We have a strategy, but we will have to bang and clang to make it work," he said.

When his mine becomes fully operational in the latter part of May, Baker will have 100 people working for him.

"That's a big deal around here, throughout the state."

Baker, president and CEO of Bronco Utah Operations, grew up the son and grandson of coal miners and graduated in 1975 from the University of Utah with a degree in mining engineering.

His optimism for the industry — and particularly his new mine — is not tempered by the critics.

"If you go out and are on a hike and you see a coal outcrop, people think it's bad and dirty, but it's just another rock," he said. "I have been hearing that coal is going away for 40 years."

Even with utility-scale development of solar power and new geothermal leases being offered in south-central Utah, coal remains the top generator of electricity in the state, providing about 76 percent of the state's energy needs.

Utah, in fact, is one of only half a dozen states across the country that gets more than two-thirds of its energy from coal.

That dependency on a cheap source of fuel is likely to continue in the coming decades, but it won't happen without continuing pressure from environmental groups and the trend toward natural gas.

The Sierra Club's April Thomas said the anti-coal group was not "happy" with Trump's recent executive orders, but she believes the president's actions will not slow the move to clean energy.

"We feel pretty confident the clean energy economy is going to continue to grow," said Thomas, who is deputy press secretary for the environmental group.

Thomas pointed to a trio of cities in Utah — Salt Lake City, Park City and Moab — that have committed to being powered by 100 percent clean energy by 2032.

"The transition (away from coal) is already happening," she said.

Baker doesn't see it that way, saying people will want cheap, reliable energy powered by coal.

 

"It's not that I am a coal hungry guy, because I am not," he said. "We would not want to see coal burned if it was contaminating the environment and hurting people, but we don't believe it is."