coal rebounds in 2010

CASPER — Wyoming coal producers fared well during a tumultuous year for the industry nationwide, increasing output by an estimated 2.6 percent in 2010. It’s a modest recovery in production, after slipping 7.8 percent in 2009.

Wyoming’s year-to-date coal production as of December 25 was 434 million tons, and the industry was on track to finish the year at 442.5 million tons, according to U.S. Energy Information Administration data.

Official production figures for 2010 will be available later this month.

“About the middle part of last year, we saw mining statewide kind of rebound,” said Terry Adcock, Wyoming State Inspector of Mines. “We’re not seeing layoffs anymore. We’re seeing hiring now, so things are coming back for us.”

Wyoming’s mining industry — all mining — added more than 2,000 jobs between third quarter 2009 and third quarter 2010, according to the Wyoming Department of Revenue’s Economic Analysis Division.

coal production for key Wyoming mines in 2010

Wyoming’s two largest coal mines had mixed results in 2010. The Peabody Energy Co. North Antelope Rochelle mine extracted an estimated 105.2 million tons for the year, an increase of nearly 7 million tons compared to 2009, according to EIA data.

Arch Coal Inc.’s Black Thunder mine produced an estimated 115 million tons. But its increase of 34 million tons was a result of merging the Jacobs Ranch mine and its average 38 million tons per year into the Black Thunder complex.

Overall U.S. coal production remained flat for most of the year, while the nation’s second-largest coal supply region — central Appalachia — declined 12 million tons through the third quarter.

In April, the nation experienced its worst mine disaster in decades, killing 29 miners at Massey Energy Co.’s Upper Big Branch mine in West Virginia. The U.S. coal industry had its worst fatality rate in more than 25 years, killing 48 miners, according to the federal Mine Safety and Health Administration.

Bucking the trend, Wyoming coal mines had no fatalities while producing an estimated average 63,200 tons of coal per employee in 2010. It was the second year in a row that Wyoming’s mining industry — coal, trona and shale — had no fatalities, according to Adcock.


Wyoming is the largest coal supply region in North America, and it supplied more than 40 percent of the nation’s coal during 2010. Nearly 97 percent of the state’s coal production comes from 13 active mines in the Powder River Basin in the northeast corner of the state.

coal trucks

Prices for Powder River Basin coal continued to tick upward in 2010. Spot prices for Powder River Basin coal topped more than $14 per ton in October. The average spot price for 8,800 Btu (British thermal heating unit) coal was about $13.40 in December, according to EIA, compared to $9 per ton in December 2009.

State economists said Wyoming’s higher volume of coal production, combined with increasing sales prices, was a key driver in the economic recovery during the past year. In recent years, the industry has injected about $1 billion into the state’s economy annually, according to the Wyoming Mining Association.

Jim Robinson, Wyoming’s senior economist at the Economic Analysis Division, is a member of the Consensus Revenue Estimating Group, which meets this week to update the state’s revenue forecast. He said a year ago, coal was a major source of concern among CREG members. But now, Wyoming coal is expected to maintain current production and pricing.

“A year ago, there were a lot of negative feelings in the coal market. But that’s kind of gone away now. Coal has kind of rebounded,” said Robinson.

This week, the focus among CREG members will likely be expectations of increased oil production from the Niobrara formation in southeast Wyoming, said Robinson.

“With oil prices staying in the $80-per-barrel range, it is encouraging people to continue to look for oil in the Niobrara,” said Robinson.


As U.S. utilities continue to shift from coal to natural gas for baseload power, Wyoming’s largest coal producers hope to help make up for the loss by shipping coal from the Cowboy State to China and other Asian markets.

Plans to expand seaport capacity along the West Coast are being vigorously opposed by environmental groups.

Some industry analysts say coal producers are so intent on serving the burgeoning Asian market that if environmental opposition blocks the development of new coal seaports along the West Coast, companies such as Peabody Energy and Arch Coal will shop for coal development opportunities in Indonesia.

“If no U.S. ports are built, these companies are going to go over — like Peabody already has — and start investing in the Indonesian market to be a player over there. They’ll either put the money in the West Coast (seaports) or go to the Indonesian market,” said coal industry analyst Randy Rahm, president of Topeka, Kans.-based CoalTech Consultants, Inc.

The implication of that analysis is that Arch Coal, Peabody Energy and other Wyoming coal producers could shift development capital from the Powder River Basin to Indonesia. However, the industry remains heavily invested in the Cowboy State.

Coal companies have nominated 14 new federal coal lease tracts for competitive bid in the Powder River Basin. The lease tracts span some 31,000 acres and contain 3.94 billion tons of coal, according to the U.S. Bureau of Land Management, which manages the public coal resource in the basin. At the current rate of production, that’s about 10 years’ worth of reserve.

Marion Loomis, executive director of the Wyoming Mining Association, said the functional role international exports have for Wyoming mines, at the moment, is to supplement an uncertain market at home.

“I don’t think they’re looking at exports to replace domestic production,” said Loomis. “It’s just a new market that historically we have not been able to compete in.”

Rahm disagrees.

“They see their growth in the Asian market,” said Rahm.

He said U.S. coal producers are absolutely hoping to make up for market losses at home by shipping more coal overseas — and that includes Europe as well as Asia. Rahm said that in the short term, perhaps the biggest gains for Powder River Basin coal will be to backfill eastern U.S. coal headed to East Coast and Gulf Coast seaports.

Peabody Energy, which produces about 140 million tons of coal annually from three mines in Wyoming, has made major investments in coal throughout Australia, Asia and Indonesia in recent years. On Dec. 20, Peabody Energy announced a preliminary agreement to buy several million tons of coal per year from PT Supra Bara Energi’s East Kalimantan mine and sell it to Asian customers through Peabody’s COALTRADE trading hub in Singapore.

“This agreement continues to demonstrate the strength of Peabody’s leading coal trading and brokerage platform to serve enormous demand growth in China, India and other key Asian markets,” Peabody president and chief commercial officer Richard A. Navarre said in a prepared statement. “The Asia-Pacific region is driving global demand for coal, and Indonesia is the world’s largest thermal coal exporter. Peabody expects to continue to grow its presence in Indonesia.”

Calls made to Peabody Energy and Arch Coal officials for comment were not returned by deadline.

U.S. coal exports increased by 23.4 percent to 22 million tons between first and second quarters of 2010, according to the EIA. Yet the volume of coal exported is a mere fraction of the nation’s annual production of more than 1 billion tons of coal.

Total U.S. coal exports were 26.2 million tons in 2009, according to the EIA. By October 2010, U.S. coal exports were 39.7 million tons.

Contact Dustin Bleizeffer at 307-577-6069 or

Dustin Bleizeffer is a Report for America Corps member covering energy and climate at WyoFile. He has worked as a coal miner, an oilfield mechanic, and for 25 years as a statewide reporter and editor primarily...

Join the Conversation


Want to join the discussion? Fantastic, here are the ground rules: * Provide your full name — no pseudonyms. WyoFile stands behind everything we publish and expects commenters to do the same. * No personal attacks, profanity, discriminatory language or threats. Keep it clean, civil and on topic. *WyoFile does not fact check every comment but, when noticed, submissions containing clear misinformation, demonstrably false statements of fact or links to sites trafficking in such will not be posted. *Individual commenters are limited to three comments per story, including replies.

Your email address will not be published. Required fields are marked *

  1. Think about it. PRB coal, a cheap, accessible, reliable and strategic U.S. energy resource being sent to China, a country that owns our debt and that does not necessarily have our best interests at heart. What does that leave us? Wind? A resource that is highly expensive, patently unreliable and visually polluting. Solar? See Wind. How about ethanol? It costs 1.08 units of other energy to process 1 unit of ethanol energy (I guess we make up the loss in volume). Nuclear? Think NIMBY. We have built 1 nuclear plant in the last 40 years. At that rate it would take 4000 years to replace a fraction (100) of the coal fired plants. Natural gas? A commodity that currently fluctuates in price from $2.50 to $10. If used for power plants, it will most likely go higher leaving us all poorer and colder. It appears to me that we, as a country, have a national energy policy driven by special interest groups and crony capitalism (i.e. Obama subsidizing GE’s manufacture of wind turbines (oh, I forgot, they are made in China too)). Let me ask, wouldn’t it be more sane to have our least expensive and most reliable energy resource used in this country? Wouldn’t it be better to spend $50 billion on technology to remove all the remaining pollutants from coal exhaust streams than $1 trillion or more to “transform” our energy structure into something that is costly and unreliable? Help me out here. The math does not add up, and my simple engineering mind is confused.

  2. I keep hearing the massive flooding in northeast Australia, Queensland state, has severely impacted the coal industry there. Australia is the world’s leading coal exporter, and four of its top 6 coal ports are in Queensland.

    The scuttlebutt at leading SB purveyors like the Wall Street Journal say that Wyoming coal may take up the slack and the price for it will rise even further. Not mentioned in this article because it does most of its work in Montana is Wyoming’s Cloud Peak Energy , which sends coal from just across the border in Decker Montana to Asia. There’s no reason to think that more Wyoming coal won’t find its way to East Asia and especially China , especially now tha Australia has been impacted.

    I’m not sure what I think about Wyoming coal being sold to China…