(Casper Star Tribune, January 6) – Wyoming coal production hit about 302 million tons in 2016, according to preliminary counts from the Energy Information Administration, mirroring what some believed were overly optimistic predictions made by Wyoming economists in October.
Official data from the Mine Safety and Health Administration should be available by mid-January.
The numbers represent a bittersweet finish line for coal, like a celebration of moderate strength in a patient recovering from life-threatening injuries.
However, coal has showed its moxie. Production turned a corner in the third quarter of 2016, almost doubling from the second quarter, when only 60 million tons were mined in Wyoming.
State economists in October projected Wyoming would reach 300 million tons by the end of the year. It’s a far cry from the 400-million-ton norms of years past but a return that seemed impossible when coal began its historic decline.
“It was absolutely, 100 percent, unprecedented decline in coal production on an absolute basis and a percentage basis,” said Don Richards, co-chair of the Legislative Service Office, which prepares a biannual projection of state revenue.
The state uses a number of resources to build out its predictions, from past data to expert analysis. They don’t always hit the nail on the head.
Predictions at the start of the year didn’t see the historic downturn.
“I’m not going to pat ourselves on the back that we got the second half right,” Richards said. “I’m more critical that we missed the first half.”
In defense of Wyoming economists, few saw the decline coming in such severity, he said.
Somehow, Wyoming coal reached equilibrium all the same.
The downturn has been showing in the numbers for years, said Chris Carrol, coal geologist for the Wyoming State Geological Survey, which publishes quarterly coal data.
“I look at it as a market correction, from 400 million a year (norms) to 300 million a year,” he said.
The market has played the leading role in coal’s tragic story over the last few years. The revolution in fracking and resulting cheap natural gas is the undeniable villain eroding coal’s share of the market.
But natural gas isn’t the only factor determining how much coal comes out of the ground to generate electricity across the U.S., said Travis Deti, president of the Wyoming Mining Association.
“I think what gets left out of the discussion of market forces is the federal government has been weighing in very heavily on market forces for the last eight years,” Deti said. “The new incoming administration has made it clear that they are going to take a good hard look at the regulatory regime that’s been implemented and pick up a shift in policy. I think that’s going to be helpful to our industry.”
Congress has already begun its work to undo recent environmental regulations. However it will be the administration of president-elect Donald Trump, who promised to repeal regulations pressuring coal like Clean Power Plan, that will write the immediate future for coal, Deti said.
The fate of the Clean Power Plan is the great unknown for coal. If enacted, it would put increasing pressure on the industry. Though analysts and experts see coal surviving for decades under the plan, it would provide less and less of the electricity generation in the U.S., ceding ground to natural gas and increasingly cheap sources like wind and solar.
Deti hopes that utilities will be more willing to keep coal-fired generation in their business plans if there is less pressure on coal from federal powers.
Despite the uncertainties ahead, the coal rally at the end of 2016 isn’t a surprise to industry, he said.
“We were kind of expecting that with the increase in production in the last couple of quarters to probably hit around 300 million,” Deti said.
It’s a sign that brings fragile hope to an exhausted coal country as the new year begins.