Defying trends, Wyoming eyes a new coal mine
Why a small operation is forging forward despite broader industry contraction.
Wyoming is poised to see the first opening of a coal mine in decades. The Brook Mine, near Sheridan, still has a few permitting issues to resolve before it can open, but it cleared a major hurdle in September.
The Wyoming Environmental Quality Council, an independent government-mandated review board, approved the proposal Sept. 28. But it still needs to be vetted by the federal government, and the state’s Department of Environmental Quality, which is currently reviewing its application. Ramaco, the Kentucky-based coal company proposing the mine, hopes to begin operations in early 2017.
While the mine could give a bump to Wyoming’s bruised coal mining sector, the proposed mine would be a relatively small outfit with fewer jobs than large operations in the state’s coal-rich Powder River Basin.
Given the cutbacks and bankruptcies that have afflicted other coal mines across the country recently, a new operation is unexpected. Arch Coal and Peabody Energy announced 465 layoffs at two major Wyoming coal mines; both filed for bankruptcy earlier this year. In September, however, Alpha Natural Resources and Arch Coal submitted plans to exit bankruptcy.
While it’s likely the major players will hang on, the coal mining sector has been in steep decline nationwide, with historically low natural gas prices out-competing coal, and stricter environmental regulations making coal’s long-term future hazy.
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One new coal mine doesn’t mean coal is back. But the Brook Mine’s approach may provide a road map for how coal could survive amid industry contraction:
It will be cheaper than other coal mines.
Unlike most mines in the Powder River Basin, which are open-pit surface mines, the Brook Mine would be a “high-wall mine,” which are less expensive to operate than open-pit or underground mines that require drilling into deep contours with more expensive and complicated machinery. And it would be require fewer employees, since it’d be “a mostly automated process,” Ramaco CEO Randall Atkins says. That also means the new mine wouldn’t make up for the gaps in employment that coal mine declines have created in Wyoming.
It’s starting off small.
The proposed mine would produce up to 8 million tons of coal a year. Compared to Wyoming’s two largest coal producers, Arch Coal Black Thunder and Peabody North Antelope mines, that’s not much: Together the complexes produced more than 100 million tons annually during Wyoming’s coal heyday. “We can find a market for this amount of coal,” Atkins says. “If you’re trying to start a 50-million-ton-a-year mine, that will be harder to place.”
Location, location, location.
The mine will also be on private land, unlike most of the region’s coal mines. That means Ramaco will not have royalty payments to the feds, a significant advantage, Atkins says.
However, its location has also been a source of conflict: While Ramaco owns the mineral rights to the coal underground, another company, Big Horn Coal, owns the land. Because of Wyoming law, though, Ramaco has the upper hand: Mineral rights in the state typically take precedence over surface rights. Ramaco filed a lawsuit against in 2015 over original permitting that shows Big Horn Coal had no plans to develop there, Atkins says. The case is pending.
Despite the promises of the proposed operation, there’s an outstanding question: As the demand for coal power declines, who will purchase the coal? Atkins declined to provide specifics about contracts the company has in place, but in 2014 he told the Casper Star-Tribune that Ramaco sought to export the coal overseas, a gamble other companies have made as well, with little success.
Paige Blankenbuehler is the assistant editor at High Country News. She tweets @paigeblank.
Note: This article previously included an image incorrectly identified as the Powder River Basin.
