State Coal Production Rebounds in 2017

Via The Daily Sentinel:

Colorado coal production topped 15 million tons last year, rebounding from a dismal 2016 as the industry recovered somewhat nationally thanks to factors such as improved exports.

Colorado Division of Reclamation, Mining and Safety data shows that production last year reached almost 15.2 million tons, up from 12.8 million tons the previous year.

Much of last year’s production came from Arch Coal’s West Elk Mine in the North Fork Valley, with 4.86 million tons of production, up from 4.16 million tons in 2016, and Peabody Energy’s Twentymile (Foidel Creek) Mine in Routt County, with 3.84 million tons of production, up from 2.6 million in 2016.

The production improvements came after both Arch Coal and Peabody went through bankruptcy reorganization proceedings that let them reduce debt.

Other major producers last year included the Colowyo Mine in Moffat County, at 2.3 million tons, up from 1.85 million in 2016; the Deserado Mine in Rio Blanco County, at 2 million tons, up from 1.54 million tons; and the Trapper Mine in Moffat County, at about 1.58 million tons, down from 1.8 million tons.

Colowyo and Trapper supply the Craig Station power plant in Moffat County, and Deserado supplies a power plant across the Utah border.

The coal industry and its supporters say last year brought welcome changes by coal-friendly President Trump and his administration in areas such as regulatory relief. In recent quarterly news releases, both Arch Coal and Peabody pointed to benefits from the tax bill passed last year.

Both companies also are noting robust demand abroad for coal. Arch Coal said West Elk and its Coal-Mac Mine in West Virginia sent a combined 2.6 million tons of coal overseas last year, the highest amount exported from those mines since 2013.

“Arch expects to capitalize on this seaborne opportunity in 2018 as well,” the company said in its quarterly earnings release.

State data shows West Elk produced more than 450,000 tons of coal in January of this year.

The U.S. Energy Information Administration said in February that an increase in demand for U.S. coal exports, driven by Asian and European countries, more than offset a slight decline in domestic coal consumption last year. It said then that it expected total domestic production to total 773 million tons for 2017, which would be a 45-million-ton increase over 2016 and the largest annual growth by tons since 2001. It said it expects that last year’s coal exports will total about 95 million tons, a 58 percent jump from 2016.

The EIA said coal prices also rose in the United States last year, but prices for Rocky Mountain region coal used in power production, such as that produced in Colorado, remained flat.

The agency attributed last year’s domestic production growth in part to the bankruptcy reorganizations of several major producers that resulted in lower production costs.

Colorado production is still low by historical measures. Mines produced nearly 19 million tons as recently as 2015, and in the peak production year of 2004, they produced nearly 40 million tons.

The industry continues to face domestic challenges including a shift away from coal to other energy sources for power generation. Peabody says it expects retirements of coal-fired plants to reduce base demand for coal by 25 million to 35 million tons this year.

See the article here.

  • On March 28, 2018