(Wyoming Business Report, March 24) – Despite posting a 70 percent net income loss in 2013 compared to 2012, Cloud Peak Energy CEO Colin Marshall is saying coal is well-positioned for a comeback.
Marshall told CNBC Thursday that international demand is “tremendous” for coal and that the U.S. Energy Information Administration still expects the commodity to supply at least 40 percent of U.S. electricity through 2030. That’s on par with current figures, if not a little higher.
That comes as good news for companies like Cloud Peak, which powered 4 percent of the nation’s electricity in 2013 with its mining output. Many naysayers have pointed to coal as a commodity past its prime as federal regulations tighten on air standards that have made it all but illegal to build new coal-fired power plants that are commercially viable. Other rule changes on the horizon have existing power plants nervous.
Combine those facets with the shale-gas revolution that has generally cut prices for natural gas and demand from coal producers has been wounded. But natural-gas prices are back on the rise as producers have slowed production and cold weather through this winter have helped push prices. In fact, CNBC reported that natural gas prices have risen 24 percent in the past six months.
Cloud Peak’s revenue remained steadier than its income in 2013 with only an 8 percent drop. Taken all together, Marshall said the future is looking more solid for coal than it recently has.
“I’d say I’m optimistic about the way things are looking going forward,” Marshall told CNBC. “I wouldn’t say we’re there yet; we need prices to go up to more sustainable levels. But everything after two very tough years is actually starting to look like it’s going in the right direction.”
Meanwhile, Wyoming politicians continue to say the environmental issues surrounding coal continue to be overblown, and should be pushed aside to allow for progress.
“We’re the Saudi Arabia of coal and we’re not putting any money into researching it,” U.S. Sen. Mike Enzi told CNBC.
Finding more feasible ways to reach foreign soil may be the surest path forward for coal, with Cloud Peak and other coal companies closely tied to proposed export ports in the Pacific Northwest that could handle more exports to Asia. But those ports have largely been opposed by environmental constituents who say the dirty energy won’t be worth the new jobs and stronger economy, even if it’s shipped out of the country.
