CHEYENNE – Wyoming is experiencing a “new normal” in lower coal production levels, the leader of an energy economics center said this week.
Robert Godby, director of the Energy Economics and Public Policies Center at the University of Wyoming, talked about state coal production and its future Thursday at the 2017 Energy Summit in Cheyenne. The Wyoming Business Report sponsored the conference.
Godby was part of a panel that discussed using coal in new technologies.
He focused on current coal production and possible future levels, particularly with coal produced in the Powder River Basin. The basin is a geographic area located in northeast Wyoming and southeast Montana.
In 2008, Wyoming produced 460 million tons of coal per year. In 2010, production reached just 442.5 million tons per year.
“As you can see, and as we all know in Wyoming, that output level has radically been reduced,” he said. “Last year was by far the worst year.”
Coal production in 2016 in the Cowboy State dipped to 297.5 million tons.
“We haven’t been there for decades,” he said.
That year, production dropped 21 percent from 2015 and 33 percent from 2010.
“The first two quarters of last year were really scary,” he said. If production would have continued at the same level as in the first two quarters, only about 240 million tons of coal would have been produced all year.
That is “almost half of what we were only seven years before. But, luckily, there was a rebound in the later part of the year,” he said.
The drop in production also reduced the workforce. There were 5,636 miners in the Powder River Basin area in the fourth quarter of 2015, but that dropped to 4,612 employees in the first quarter of 2017.
The coal industry faces several challenges today, including increased production costs, continued low natural gas prices and a lack of growth in the demand for electricity, he said.
Industry concerns for the long term include greenhouse gas regulations and the fact that no new coal plants are being built, he said.
Forecasters predict a rebound, however, where the Powder River Basin could produce about 330 million tons of coal per year.
“Even under the best scenario right now (one in which there are no greenhouse gas regulations), we wouldn’t expect Powder River Basin coal output to get back to where it was in the 2010-2012 period until the mid-2020s,” Godby said.
“What we’re in is a new normal, a lower normal, and we expect that to continue. We can expect a new normal in the Powder River Basin in the low- to mid-300 (million tons) range. We do expect it to go up over time.”
One idea to help coal is to develop technologies that have other uses for it.
“Will there be a day when we might look back and say, ‘Why did we ever burn coal? There are so many more beneficial things we could do,’” Godby asked.
Gov. Matt Mead spoke during the summit and said the industry needs reasonable regulations, but there’s more to it than that.
“I think for too long we’ve looked at coal as you burn it, you create electricity. But there is more to coal than that,” Mead said. “My dream is to sell coal not only to the rest of the United States, but to sell it to the world.
“I think our destiny is less determined by politics than it is by research, innovation and (being) forward-looking in the state about how to maximize the wonderful resources we have.”