Ol’ King Coal not so merry anymore
Colorado coal production in 2015 continues to fall after dropping to a 20-year low last year, state data shows.
Much of the drop can be attributed to mining cutbacks at Peabody Energy’s Twentymile (Foidel Creek) Mine in Routt County and to a lesser degree at Bowie Resource Partners’ Bowie No. 2 Mine in Delta County.
Statewide, 2015 production through August totaled 13.9 million tons, down from 15.5 million tons for the first eight months of last year. Production totaled nearly 40 million tons in 2004 and just under 23 million tons last year.
Twentymile production fell to 2.5 million tons through August, from 4.9 million for the same period last year, according to the Colorado Division of Reclamation, Mining and Safety. The Bowie mine produced about 1.4 million tons, down from 1.8 million.
Peabody Energy didn’t return requests for comment about the slowdown at Twentymile.
The Steamboat Today newspaper in Steamboat Springs early this year quoted a Peabody spokesman as saying falling production at the mine was from declining demand from utilities because of moderate temperatures and constrained rail service.
The state says Twentymile employs about 300 miners. It employed nearly 390 miners at the end of 2013.
Bowie last year announced the layoffs of about 150 people after losing a contract to sell to the Tennessee Valley Authority. The TVA has been cutting back on its use of coal for power generation as a result of a 2011 agreement with the Environmental Protection Agency and other entities. TVA also has been sourcing coal from mines back East at a lower price because of cheaper transportation costs.
In September, Bowie said it plans to lay off nearly 100 more people at the mine, leaving it with about 100 miners. It said it was making the cutbacks as it idles its underground longwall mining operation and takes an estimated year or so to prepare a new longwall panel for mining.
But it has warned the layoffs could be permanent, as it continues to evaluate the market for the mine’s coal.
That market has been challenging in Colorado and nationally because of everything from federal and state regulatory measures to competition from natural gas. The latest threat to coal comes from the EPA’s Clean Power Plan, which targets carbon emissions from power plants.
Jeremy Nichols, with the environmental group WildEarth Guardians, noted that while a federal judge ruled in cases brought by the group that federal agencies failed to disclose air-pollution and climate-change impacts in approving expansions at three Colorado mines, production at those mines subsequently has risen.
One of the lawsuits involved Arch Coal’s West Elk Mine and pertained to an area it had leased but not yet expanded into. The mine’s production is up slightly so far this year, at 4.1 million tons compared to 3.95 million for the first eight months of last year.
Arch Coal recently said it continues to have success selling the higher-quality coal produced by the mine.
However, Arch Coal has been struggling overall financially, losing $168 million in the second quarter of the year alone.
The Colowyo Coal Mine between Craig and Meeker so far this year has produced 1.9 million tons, up from 1.6 million over the same period last year. The Trapper Mine near Craig produced nearly 1.5 million tons through August, compared to about 1.27 million tons for the first eight months of last year.
The two mines supply the coal burned at Tri-State Generation and Transmission Association’s Craig Station power plant.
A court ruling involving those two mines found fault with previous approvals of expansions by the mines based on Wild- Earth Guardians’ concerns, and the ruling left the mines’ continued operations in question. The Interior Department recently cleared the way for Colowyo’s continued operations after a recently completed review of the expansion there, and Trapper has been able to keep mining while another such review begins.
The Deserado Mine near Rangely produced 1.7 million tons through August, up from 1.1 million tons over the first eight months of 2014. The mine supplies the coal burned by Deseret Power Electric Cooperative’s Bonanza Power Plant in northeastern Utah.
The future of that plant, and the mine, which is owned by Deseret and has no other customer, would be secured for the short term but left in doubt for the long term under a recent settlement proposal involving WildEarth Guardians, the Sierra Club and the Environmental Protection Agency.
The environmental groups have agreed to drop challenges of an EPA permit issued for the plant in exchange for new pollution controls at the plant. The deal also places a lifetime coal-consumption cap on the plant unless it commits later to further pollution-control investments, a provision that could lead to the plant’s closure around 2030, Nichols estimates. The EPA has the settlement proposal out for public comment.
WildEarth Guardians wants to see an eventual end to the federal government’s coal-leasing program because of the climate-change impacts.
Nichols praised the federal government’s recent grants of $50,000 to Moffat County and some $1.2 million to the Montrose-based Region 10 League of Economics Assistance and Planning to work on diversifying their region’s economies so they’re less reliant on coal jobs.
“We have an obligation to step up, to make sure that communities that are very dependent on coal can transition to be prosperous and sustainable as they lose that economic base,” Nichols said.
Said Stuart Sanderson, president of the Colorado Mining Association, “It’s a sad commentary if the day arises that these self-reliant communities would have to rely on assistance from the very entity, government, responsible for those job losses and production declines in the first place.”
He pointed to government policies like Colorado’s Clean Air Clean Jobs Act, which has resulted in more use of natural gas in power plants, and mandates in Colorado and elsewhere to produce some electricity from renewable sources.
Renewables don’t pay royalties, unlike the coal industry, Sanderson said. The coal industry in Colorado paid nearly $41 million in federal and state royalties in 2014, and that’s money that goes to public schools, he said.
The state puts total Colorado coal mine employment at about 1,450 people. Nichols said that according to news reports, just one wind turbine manufacturer, Vestas, employs about 3,000 people statewide, and overall, the wind industry in the state employs about twice that number.
Sanderson said the National Mining Association estimated in 2012 that coal is responsible for about 21,000 jobs in the state, when associated manufacturing, transportation, utility and service jobs are counted.
Sanderson said coal workers received an average of $122,000 in pay and benefits.
“Can renewables equal that in rural Colorado?” Sanderson asked.
But Nichols believe the costs of coal jobs and revenues are too high, with emissions from Colorado coal resulting in tens of millions of tons of climate pollution each year.
That doesn’t even count the methane that is vented during coal mining. Methane is considered more potent than carbon dioxide when it comes to climate change.
In 2013, Nichols said, the EPA estimated that methane pollution from just three mines in the North Fork Valley resulted in the equivalent of 1.3 million tons of carbon dioxide pollution.