Some Wyoming coal mines are likely facing extinction-level headwinds — even before the prospect of new federal coal pollution reduction rules taking effect in 2032, some market analysts say.
Wyoming’s two largest coal producers, Arch Resources and Peabody Energy — which, combined, operate five mines in the state — both reported lower-than-expected sales volumes as well as financial operating losses in the state during the first quarter of the year, a situation that’s likely to continue through the summer.
Though there’s been no official announcement, Arch President John T. Drexler told reporters on a recent conference call that, in response to the downturn, the St. Louis, Missouri-based company is in the process of “adjusting schedules, eliminating overtime, managing headcount, laying down equipment — doing all of the things that we’ve done, and we’ve done successfully in the past.”
Arch didn’t respond to a WyoFile inquiry for more details.
The hint at potential layoffs comes after major production declines in Wyoming, home to a coal mining industry that relies almost entirely on the nation’s shrinking fleet of coal-fired power plants. Those declines could have far-reaching effects here in the form of declining tax revenues and less business for the companies that serve the coal sector.
A mild winter in the U.S., which coincides with April as the 11th consecutive monthly warmest on record across the globe, helped drive down demand for Wyoming’s thermal coal by 20% during the first quarter of the year compared to the same period in 2023, according to federal data compiled by the Wyoming State Geological Survey. Wyoming’s first-quarter production also represented a 20% decline — 11.4 million tons — compared to fourth-quarter 2023.
Coal backlog
Even with shrinking production, the nation’s coal-burning power plant fleet remains over-supplied.
On-site stockpiles of the fuel at power plants are the highest in more than a decade, according to the U.S. Energy Information Administration. Typically, utilities demand more coal shipments after depleting winter stockpiles. Instead, some Wyoming coal producers, including Arch and Peabody, are now pushing some coal volumes originally contracted to be shipped this year to 2025.
The situation points to a dire outlook for Wyoming mines, perhaps for the next couple of years, according to Seth Feaster of the Institute for Energy Economics and Financial Analysis. Even if there’s an especially warm summer that compels customers to crank up air-cooling units, Feaster said, there’s plenty of coal on hand, as well as cheap natural gas and renewable sources of energy, to meet increased demand.
“It takes a year, sometimes two years, to bring those [coal] stockpiles back down,” Feaster told WyoFile. “We’re now in spring when renewable generation is really high and [natural] gas prices are low, so demand for power is being met by everything else.”
Coal-fueled electric power has lingered at less than 15% of the U.S. market for much of this year, falling from an average 23% in 2019, according to the EIA. Even as U.S. electrical power demand continues to grow — currently on track to jump 3% this year — it is being met with new wind and solar generation. Much of the remaining coal fleet, meanwhile, continues to operate at less than full capacity, according to the EIA.
Federal coal rules
Not only does the culmination of deteriorating coal market forces spell trouble for Wyoming’s mining industry, it’s a situation exacerbated by the U.S. Environmental Protection Agency’s recent suite of new coal pollution reduction rules published in April, according to Feaster and other industry analysts.
In addition to more stringent coal ash disposal parameters and reductions in various smokestack emissions of hazardous metals, the rules put forth a 2032 compliance deadline for all coal-burning power plants to either capture 90% of carbon dioxide, convert to natural gas or close altogether.
Though Wyoming and other coal proponents are preparing to sue to stop the rules, utilities with coal-burning power plants must act quickly on the assumption the rules might ultimately be implemented. Considering the pace of electric utility planning, 2032 “is like tomorrow,” Feaster said. “You’re going to have to make a decision pretty darn quickly about whether or not you’re going to commit to [upgrading] some of these plants.”
Meantime, the appetite for Wyoming coal continues to diminish at an alarming pace.
Arch and Peabody, whose mines in the Powder River Basin account for more than 60% of the state’s coal production, experienced first-quarter 2023 to first-quarter 2024 declines of 28% and 17%, respectively.
Declines, as a percentage, were much worse for some smaller mine operators.
Kiewit’s Buckskin Mine north of Gillette suffered a 47% decline for the same quarter-to-quarter comparison, and Navajo Transitional Energy Company’s Cordero Rojo Mine south of Gillette reported a decline of more than half.
“You can’t have this kind of decline continuing for too long without something breaking,” Feaster said.
When we flew the first manned satellite the only man produced object that they could identify was the smoke plume from the four corners power plant. An effort was made to clean it up somewhat. For the most part pollution produced by coal fired power was basically ignored. Coal produced electricity was cheap and should not be burdened with clean. Four corners should have been a wake up call but it wasn’t. Had coal started then to do what was necessary to produce clean energy it would not be in the mess that it is now. Too little! Too late! Short term profits be it fifty years has resulted in the demise of a great industry
Looks to me like the goose that’s been laying Wyoming’s golden eggs for the past fifty years is about to get cooked due to global warming.
Coal is dying and nothing can save it. There is a reason the Coal Museum is powered by solar. Don’t cry your eyes out over coal, the buggy whip makers complained about change, too and it didn’t get them anywhere, either.
Totally. Wrong and insane
Huge pain for people depending on coal to make a living. Great for everybody else. Renewables are cheaper, (search Lazards LCOE+ 2023), particularly solar, no pollution, no CO2. It needs some grid storage, like grid scale batteries to smooth things out. BTW, Wyoming has fantastic wind resources. You just need some upgraded grid connections to the west coast.
Upgraded grid connections to the West Coast huh? Which would cost billions of dollars and which every affected person and political entity along the routes would oppose. When someone says solar or wind power is cheaper than fossil fuels they almost never account for transmission costs or even feasibility
I agree. My husband Robert Carter worked at cccc back in 76-83 in Hanna. Arch I and 2 also were in Hanna. Best years of our lives
Democrats and Republicans really have little to do with the declines in the coal industry, except that some want to keep it alive. Simply said, using coal has overwhelmingly contributed to climate change. Nothing can reverse what HAS changed, but using non-carbon energy sources CAN flatten global warming trends. All legislators, regardless of party affiliation, should recognize and accept this, in order to appropriately serve the people who are their constituents. We, the people, are intimately dependent on the lands, the animals, the plants, the waters — the Earth — all at grave risk from continually rising temperatures.
You’re not going to stop or even slow global warming by ceasing coal use. Fortunately we have had global warming since the event of the ICE AGE. The travesty is, man thinking he can control the weather.
Earth has suffered through climate change after climate change over the past 4.5 billion years, and that will not change – no matter how much the government taxes you for carbon credits.
Looks to me like the goose that’s been laying Wyoming’s golden eggs for that past fifty years is about to get cooked due to global warming. Global warming created by these coal companies now crying foul.
When exactly do these HIGH PAYING GREEN ENERGY JOBS START? Good paying jobs lost in energy section. When does these high paying green energy jobs start? With good benefits?
They already have, just not in Wyoming. Thousands are already working as wind turbine maintenance workers as just an example. I know several and they are well paid. In Texas alone they have almost 15,000 wind turbines and they have to be checked and maintained. A good friend’s son moved to Texas to do that work and within a year has already been able a buy a home. He recently came home to Vermont for a visit and he is loving life. Same with solar projects. People need to get their heads out of the sand and realize the coal/oil industry is going away. Did you even read this article?
Not exactly breaking news. After graduating from UW in 1976 I moved to Gillette and worked as a social worker. It was only for 2 years but I learned alot of the fast growing coal industry in Campbell County and had made some good friends who work there. The fossil fuel has been going downhill for years due to decreasing demand. Not rocket science. The fact that some Wyomingites, especially politicians refuse to accept this. The Bill Gates Natrium nuclear power being built in Kemmerer is a gift but many people are fighting it’s establishment.
EVERYONE- Needs to pay attention! If we DONT get the Democrats OUT of the White House.. & get more Republicans IN the House & Senate.. PLUS.. IN Wyoming.. It’s only going to get worse!! If you’ve been paying attention..You know what I’m talking about!…
Remember this when you VOTE!!
I can’t help but think if the resources put into green energy were put into carbon capture this would not be an issue .
Carbon capture is easy. Just keep the coal in the ground. Build windmills, put up transmission lines. Lots nicer jobs than digging coal.
Absolutley correct ,their climate change crap is going yo threaten basepower electricty in america.when in china they are opening a new coalfire plant every 2 weeks
If you haven’t made money in the last 4 years your head is in the sand. Stock market is at record highs.
Oh quiet down you quack. Next you’ll blame the “deep state” or say “Q” predicted this 😂 coal has BEEN going down the past 15 years since renewables are cheaper and cleaner. Can’t always have it your way until it DOESNT go your way and you want to blame the Dems. Wyoming should be happy about this. Time to diversify your industries Wyo.
Hard to believe that we need more Republicans in Wyoming, in the State Legislature or at county n local level. The party pretty much rules the roost the way it is, except of course when they start in fighting. What government needs is more individuals who pay less attention to political party and more attention to doing the right thing. It’s called being non partisan!
Rather than Republicans BJ, it would appear WY is in need of people with brains uninfected with GWD. The majority of comments I’ve seen here reflect just the opposite.