Danielle Elkins: How much has coal declined locally and beyond?
Driving through Craig, you’re going to pass dozens of “Coal Keeps the Lights On” signs proudly displayed outside local businesses or in yards of coal-supporting households.
Coal does, in fact, keep the lights on. Yet, overall, it’s on an unfortunate decline.
The once booming coal industry is nowhere near where it used to stand — it’s suffering on a local, state, national and international level for several reasons, including the Environmental Protection Agency’s stricter emissions regulations on coal-fired power plants.
Locally, coal is on a huge decline at two of our coal mines, while one mine’s annual production has remained fairly steady.
Data collected by Yampa Valley Data Partners indicates that Colowyo Mine saw a 63.4 percent decrease in annual coal production between 2006 and 2015. Colowyo’s 2006 production of roughly 6.3 million tons dropped to nearly 2.3 million tons in 2015.
YVDP’s data comes from the Colorado Division of Reclamation Mining and Safety.
The same data sheds a different light on Trapper Coal Mine’s coal production. Trapper felt a slight increase of 1.8 percent in its annual coal production from roughly 2,080,372 tons of coal in 2006 to 2,117,628 tons in 2015.
Routt County’s Twenty Mile Coal Company, owned by Peabody Energy — which recently filed for Chapter 11 bankruptcy protection — shows a 51.8 percent decrease from the nearly 8.5 million tons of coal produced in 2006 to about 4.1 million tons in 2015.
Executive Director at YVDP, Eldon Holland, said that despite the drop in production from 2006 to 2015, the past five years have shown to be fairly steady for Colowyo and Trapper.
“Annual coal production for our two mines in Moffat County has been stable over the last five years, with slight variations from year to year,” Holland said. “Moffat County’s annual production of coal has also accounted for a larger percentage of Colorado’s production in recent years because of its quality and financial feasibility, and also due to the closure of other mines across the state.”
In May, a Denver Post article titled “Collapse of Colorado coal industry leaves mining towns unsure what’s next,” written by Bruce Finley highlighted that statewide coal production dipped by 50 percent since 2004, despite the fact that coal still generates a whopping 60 percent of electricity used in Colorado.
EIA reports that coal and natural gas are currently the primary sources used to generate electricity in the state. Coal-fired power plants provide about three-fifths of net generation, while natural gas provides more than one-fifth. Electricity generated from renewable sources has tripled since 2007 to one-sixth of net electricity generation in 2014 — almost all due to increased wind power generation.
As far as prices go, coal is losing out in Colorado, and across the nation, to its cheaper rival natural gas. Additionally, Colorado is one of the leading natural gas-producing states in the U.S., and state output has doubled since 2001, says the Colorado Energy Office.
Nationally, we saw coal production hit a high point in 2008, but it’s been steadily declining ever since due to lower natural gas prices, decreased international demand and environmental regulations put in place by Obama’s EPA.
U.S. coal production in 2015 was projected by the EIA to be 10 percent lower than in 2014, which would place it at its lowest level of production since 1986. In the five major regions of the country that produce coal, the Appalachian Basin has seen the largest decrease in production.
The Henry Hub, a key natural gas benchmark, saw its average daily natural gas spot price fall from $4.38 per million British thermal units (MMBtu) in 2014 to $2.61 MMBtu in 2015. This drop resulted in greater natural gas-fired electricity generation, states the EIA.
The International Energy Agency reported in 2015 that the stall of global coal demand was due in part to economic restructuring in China, which represents 50 percent of global coal consumption. The dip also was attributed to a global shift toward renewable energy.
Although coal is on the decline, it is not dead just yet, despite popular belief. It’s still hanging on for dear life in anticipation of the upcoming U.S. presidential election, which is predicted to have sweeping effects on the industry depending on the outcome.
Coal is still keeping the lights on all over the world. Last year, it accounted for 33 percent of total electricity generation in the U.S., and that number isn’t going to drop to zero overnight.
In fact, EIA’s prediction is that the need for coal will actually increase by 6.8 percent by 2040 due to a growing need for electricity.
We shouldn’t count coal out just yet. It might not be as profitable as it once was, but we aren’t in a position to abandon it or those who have worked so hard to mine it.
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