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Is There a Future for Western Coal?

Just weeks before the biggest mass layoffs in Powder River Basin history, it was business as usual at the Eagle Butte mine several miles north of town.

A truck the size of a small house ambled past every five minutes, brimming with 200 tons of inky black coal. The coal was dumped onto a slow-moving conveyor belt and carried to be pulverized into fist-sized chunks. It was then put into a series of silos to be distributed into rail cars. A thick, glue-like substance was sprayed on top to cut down on dust.

This process results in 80 to 100 trains of coal rumbling out of the Powder River Basin each day.

“In West Virginia, when they go underground, they’ll have a coal seam that’s 8 or 10 foot thick, and they think they’ve hit pay dirt,” boasted Phil Christopherson, CEO of Gillette-based business group Energy Capital Economic Development. “I was talking to a guy from West Virginia who came out here and saw a 100-foot-thick seam of coal, and he was just blown away.”

But it’s no secret coal isn’t the “pay dirt” it once was. U.S. coal output has declined steadily since 2008, with production in 2015 expected to be at its lowest level since 1986.

And although coal fuels about 32 percent of America’s power production, the U.S. Energy Information Administration recently reported that coal plants made up more than 80 percent of electric generating retirements last year. There is a glut of coal stockpiles at the coal-fired plants that remain, according to EIA, totaling 197 million tons at the end of 2015, the highest year-end inventory in the last quarter-century.

Most experts say cheap natural gas prices following the fracking boom ushered in the downturn, but other commonly cited reasons are declining international coal demand and environmental regulations that make it difficult for utilities to justify further investments in coal-fired plants.

Source: Scientific American