By Tom Ross
February 9, 2018 - Peabody Energy, in its 2017 earnings report that was released this week, gave some of the credit for improved performance in its Western U.S. operations to higher production at its Twentymile Coal Company in West Routt County.
Company margins in the U.S. averaged 25 percent, "largely driven by the benefit of a contractual settlement and improved cost performance in the Western segment related to higher Twentymile Mine volumes and favorable ratio changes at the Kayenta Mine," in Arizona, Peabody reported.
Stan Dempsey of the Colorado Mining Association told the Grand Junction Sentinel this week that Twentymile had produced 3.3 million tons of coal as of October 2017.
That's a marked increase from the 2.6 million tons of coal the mine produced in 2016. As recently as 2015, the mine produced 4.15 million tons, and going back to 2005, the mine’s annual production stood at 9.4 million tons of coal.
Coal production at the mine was curtailed in 2016 while the longwall mining apparatus was moved deeper into the mine.
Peabody reported this week that coal demand in the US. was negatively impacted last year by mild weather in coal-heavy regions of the country, low natural gas prices and increased demand for renewable sources.
But it was demand for coal abroad that gave U.S. production a boost last year.
"U.S. coal production increased approximately 5 percent over 2016 levels, driven by a nearly 60 percent increase in exports along with rising domestic consumption of Southern Powder River Basin Coal, (which is mined closed to major rail lines in Southern Wyoming)," the company reported.
Peabody announced April 3 of last year that it had emerged from bankruptcy after reducing its debt by more than $5 billion, down from the $6.2 billion that was reported in April, 2016, when the company filed for protection from its creditors.
The original news of the bankruptcy shook Routt County, where small towns like Oak Creek and Hayden have relied upon the coal mine for high-paying jobs and property taxes that fund schools, rural fire protection districts and even public libraries.
"Our team at Twentymile Mine plays a significant role in driving the success of Peabody," Williamson wrote in an April 2017 e-mail to Steamboat Today. "Moving forward, we will employ innovative practices as a world-class mining operation, deliver strong safety performance and continue contributing to the economic success of Routt and Moffat counties."
While the short-term outlook for Peabody improved last year, some energy experts say that coal can no longer compete with the low cost of natural gas. A number of electrical generation plants in the American West have switched from burning coal to natural gas, and there are plans to close others.
University of Colorado faculty member and Steamboat Springs resident Paul Komor, an expert on the subject, told Steamboat Today in September 2017, that across the Mountain West, utility companies are announcing plans to begin shutting down coal-fired power plants. He spoke in advance of a "Talking Green" speaking event here hosted by the Yampa Valley Sustainability Council.
“Worldwide, in most countries, coal is falling off the cliff,” Komor said. “But in the U. S., in particular, natural gas is proving to be a preferred option for generation. It’s plentiful, and it’s economical to begin with, due to the technologies involved in fracking shale to get at the gas."
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