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Powder River Basin Coal Tops 300 Million Tons Again

 

 

By Greg Johnson


February 6, 2018 - Powder River Basin coal production cracked the 300 million tons for the 17th time in the last 18 years in 2017, including mining the basin’s 7 billionth ton of coal.


That milestone came in the second half of the year, which saw production slow slightly from the first six months of the year, according to production numbers reported to the Mine Safety and Health Administration.


Overall, the basin’s 12 mines produced 305.2 million tons of coal, a 6.7 percent increase over the 286.6 million tons produced in 2016, but off the 22.3 percent spike seen in the first part of last year. Still, the numbers are encouraging having just completed the first year of President Donald Trump’s administration, which saw the rollback of a raft of Obama-era regulations on fossil fuels and carbon dioxide emissions, said Travis Deti, executive director of the Wyoming Mining Association.


“In general, it was a better year for us,” he said. “We saw some some leveling out. … Going forward, we’ve hit a little stability and on the regulatory front there are no questions.”


The solid year also shows that coal production in the United States seems to have settled into what industry analysts have called its “new normal,” Deti said. After a prolonged downturn that saw sharp dips in production beginning in 2015 and continuing through 2016, U.S. coal accounts for about 32 percent of the nation’s electricity production, down from nearly 40 percent prior to the downturn and nearly 50 percent less than a decade ago.


“There’s no question that with the rise of natural gas as a competitor to coal, that’s huge, and that’s going to continue,” Deti said.


He also noted that, while coal still is a significant part of the nation’s energy portfolio, its dominance is shrinking as older coal-fired plants are retired and no new plants come online.


“Right now, it doesn’t make sense for a utility to pursue coal-fired generation, and that was by design from the previous administration,” he said.


Another obstacle is that renewables like wind and solar continue to enjoy huge subsidies and tax breaks that natural gas and coal don’t get, Deti said.


“Let’s make it a level playing field, and coal can be competitive,” he said. “Of all the basins (in the U.S.), we have some things going in our favor competitively.”


The MSHA reports not only show an increase in production in the Powder River Basin, they also show that employment remains steady at more than 4,700 full-time-equivalent jobs at the mines. That’s about what employment was at to end 2016.


However, Peabody Energy’s North Antelope Rochelle mine, the most productive coal mine in the world, shows an increase of 92 jobs. It also was the only mine to top 100 million tons produced in 2017 at 101.6 million. That’s an increase of 8.7 million tons (9.3 percent).


While the other mines reported either modest gains or small losses in production, the Buckskin mine, owned by Kiewit Peter Sons’ Inc., more than doubled its production in the year, from 7.1 million tons to 14.5 million tons.


In the long run, though, the real future for thermal coal is overseas, Deti said. While the United States is moving away from coal as a fuel to generate electricity, it’s being embraced in other countries like Japan.


“We have countries overseas on the Pacific Rim that want to buy our coal and we have to work on our options to export that coal,” he said. “Things can change, but the (overriding) issue is not going to go away. We still have to pursue carbon capture and storage options and ways to add value to our coal.”


Research and manufacturing that uses coal as a resource for carbon also is on the verge of a boom that could be historic, Deti said.

 

“No. 1, we need to power this country and coal continues to be the best, most affordable way to do that,” he said. “We also need to look at other ways to use the resource, and we’re right on the cutting edge of that right now. Carbon-based materials are the materials of the future. Our coal resource is that feed stock.”