Coal news and updates

Coal Production In Wyoming’s Powder River Basin Falls 21%

Data released Monday by the Wyoming State Geological Survey shows 2024 first quarter coal production plummeted nearly 21% from the first quarter of 2023, when the state dug up more than 58 million tons of coal.

With the unveiling last week of new federal environmental rules that could accelerate the phasing out of coal-fired power plants by the early 2030s, signs of trouble ahead may already be emerging on the horizon for Wyoming’s coal industry.

First quarter data released Monday by the Wyoming State Geological Survey (WSGS) show coal production has slipped nearly 21% from the first quarter of 2023 when the Cowboy State dug up more than 58 million tons of coal out of the coal-rich Powder River Basin (PRB).

In the first three months of 2024, more than 46 million tons of coal was mined, according to the state data, a drop of more than a fifth.

Total employment in PRB mines stood at 4,103 workers at the end of the 2024 first quarter, down 101 jobs from the same year-ago period.

“Production is really down this quarter,” said WSGS Energy Minerals Geologist Kelsey Kehoe. “I wasn’t expecting to see such a large drop.”

Kehoe could not immediately explain the collapse in coal production in Wyoming’s Powder River Basin, which supplies roughly 40% of the nation’s thermal coal for coal-fired generation stations.

“It’s one of the largest percentage drops I’ve ever seen,” said Kehoe of the more than six years she’s been with WSGS.

The only other comparable quarterly drop in coal production came shortly after the COVID-19 pandemic locked down workplaces throughout the world in early 2020, she said.

At that time, quarterly production hit a low of 45.2 million tons produced in the second quarter of 2020, down 20% from the first quarter of that year and one of the lowest-producing quarters in many years, according to the WSGS data.

The 2024 first quarter drop in coal production is attributable to long-term structural challenges.

These include a mild winter, high inventories of coal stockpiled at coal-fired power plants run by electric utilities, and historically low prices for natural gas that have displaced coal for burning at power plants, explained Travis Deti, executive director of the Wyoming Mining Association.

“Gas prices have been stubbornly low,” Deti said. “We’re in one of those periods. These things go in cycles, and we’ll weather through this.”

The collapse in production comes just as coal-fired power plants across the United States, including in Wyoming, could close permanently within the next decade as a result of federal environmental rules released April 25 that significantly reduce pollutants emitted into the air and toxic wastes dumped into streams.

Litigation Coming

Wyoming Gov. Mark Gordon is threatening litigation to stop the federal government’s actions that he says could undermine the Cowboy State’s economy.

“The state will take legal action at an appropriate time,” said Michael Pearlman, a Gordon spokesman. “While that will likely be soon, I can’t provide a more detailed timeline.”

In Wyoming, the rules will hit many of the legacy coal-fired plants from Naughton and Bridger in the southwestern part of the state, to Dry Fork near Gillette and the Dave Johnston plant near Glenrock.

The rules represent a big economic hit to Wyoming’s Powder River Basin in the northeastern part of the state where more than 4,000 people are employed in the industry.

Just this month, the two largest coal operators in Wyoming have reported lower volumes coming out of the PRB.

St. Louis-based Arch Resources Inc. said April 25 that its 2024 first quarter performance fell short of expectations as thermal coal demands dipped from its PRB mines in northeastern Wyoming, with layoffs seen as a possibility.

Arch said that operations in the country’s largest coal producing region slipped into the red fiscally in the first quarter, principally due to competitive pressures from cheap natural gas and stockpiling of coal by utilities after a mild winter.

And St. Louis-based Peabody Coal Corp. said April 11 that it won’t hit financial guidance targets for its first quarter, partially in response to dismal coal production out of the PRB.

Peabody Coal expects to release first quarter results Thursday.

Peabody also cited lower coal shipments to coal-fired power plants on “unseasonably warm weather and continued low natural gas prices.”

Peabody said Thursday that coal volume fell to 18.7 million tons in the 2024 first quarter versus the 21 million tons that it forecast. A year ago, Peabody mined 21.9 million tons in its first quarter.

The coal mined in the first three months of 2024 is the lowest volume in Peabody’s first quarter since 2014.