Moratorium pleases enviros, disheartens industry supporters

The Colowyo coal mine north of Meeker.

Coal production at Colorado mines has fallen this year after recovering somewhat last year following a major slowdown in 2016.

Production during the first half of the year totaled about 7 million tons, down 13 percent from the 8.1 million tons produced during the same period of 2017, according to federal Mine Safety and Health Administration data.

More recent data from the federal Energy Information Administration through Aug. 25 shows state production so far this year totaling 9.3 million tons, down 7 percent from the 10 million tons produced through the same period a year earlier.

"Colorado's drop is consistent with, but steeper than, the national trend," Ted Zukoski, an attorney with the nonprofit group Earthjustice, noted in an email to reporters.

The EIA reported that production nationally was down 2.7 percent so far this year through Aug. 25, he noted.

"Coal as an energy source is increasingly losing out to cheaper and cleaner fuel sources including wind and solar," he said.

As evidence, he cited recent approval by the state Public Utilities Commission of a plan by Xcel Energy to close two coal-fired power units in Pueblo and boost production from wind, solar, battery storage and natural gas.

Coal companies continue to pin some of their hopes on international markets, however. Arch Coal owns the West Elk Mine in Gunnison County, the state's largest-producing mine. Its production is down from about 2.7 million tons during the first half of last year to 2.33 million tons through June of this year. But it said in its earnings report for that quarter that "sub-standard rail performance" affected that mine and Arch Coal's Coal-Mac mine in West Virginia in June, affecting sales volumes at the mines and meaning that two export vessels from West Elk and one from Coal-Mac are now scheduled to load in the third quarter of the year.

The two mines produce thermal coal used in power production.

Arch Coal says the pricing for seaborne thermal coal has been persistently strong and, "coupled with strong demand for Arch's high-quality thermal products," will enable the company to export more than 4.5 million tons from its business segment that includes the two mines, a trend expected to continue into next year.

The state's second-highest producing mine, Peabody Energy's Twentymile (Foidel Creek) Mine in Routt County, produced 1.44 million tons during the first half of the year, down from 2.1 million tons for the same period in 2017. (The more current EIA data isn't broken down by mine.)

The Colowyo Mine, which supplies the Craig Station power plant in Moffat County, produced about 757,000 tons for the year's first six months, down from more than 1 million tons in 2017 as of the same point. But that drop was offset by production of more than 1 million tons at the Trapper Mine, which also supplies the plant and a year earlier had produced about 731,000 tons for the year's first half.

Production at the Deserado Mine, a Rio Blanco County facility that supplies a power plant in northeastern Utah, slipped slightly from 1.23 million tons during January-June 2017 to 1.1 million tons during the same period this year.

The King II Mine in La Plata County produced nearly 316,000 tons for the first half of the year, up from about 261,000 tons for the same timeframe in 2017. But the state's total for the first half of 2018 also was affected by the shutdown of the New Horizon Mine in Montrose County after producing about 33,000 tons during the first half of 2017.

The mine supplied the nearby Nucla Station, which Tri-State Generation and Transmission Association has committed to eventually shut down under a regional haze agreement under which one of the Craig Station coal-powered power units also will be shut down.

In 2016, Colorado had only 12.8 million tons of coal production, according to state Division of Reclamation, Mining and Safety data. It was the lowest level in nearly 40 years, and occurred in a year in which both Peabody and Arch Coal underwent bankruptcy reorganizations.

Last year, Colorado mines produced about 15.2 million tons of coal, as the industry and its backers cited regulatory relief from the coal-friendly Trump administration and robust demand from abroad.

Arch Coal and Peabody also have cited benefits from the tax bill passed in 2017.

Zukoski said that at the current rate, Colorado production this year would be the second-lowest since the late 1970s.

"I think one thing you can question is has there really been a 'Trump bump' in terms of coal production. This sure doesn't seem like it," he said in an interview.

He said coal companies are having to look overseas because the domestic market "is not that great," with coal plants being shuttered and not replaced because it's cheaper and better for the environment and climate for utilities to use renewable energy, battery storage and natural gas for power generation.

Recommended for you