Coal reality check

 

It's a risky time to invest in coal. Production was down almost 8 percent in 2009, and consumption fell even further. Environmentalists have fought new coal-fired power plants tooth and nail -- and won. Some plants are already planning a switch to natural gas. Meanwhile, the shape of future federal carbon regulation, a looming threat to the industry, remains unclear.

Nevertheless, in March, Arch Coal successfully bid $86 million to lease 572 million tons of coal in southeast Montana. Other companies are reportedly sizing up Montana's untapped reserves, too. And in Wyoming, existing mines are asking the federal government to put 5.8 billion tons of new coal up for sale.

Declining Appalachian production and a rise in international demand for Eastern metallurgical coal, which can be used in steel-making, are expected to leave holes in domestic supply that Wyoming mines can fill. Domestic sales already rose in 2007 and 2008, thanks in part to growing Eastern exports, says Marion Loomis, executive director of the Wyoming Mining Association. He expects U.S. utilities to remain the primary -- and most reliable -- consumers of Powder River coal. But international markets are also being pursued: Peabody Coal hopes to establish an export terminal in the Northwest to send the basin's coal to China by the end of the year.

Loomis acknowledges that most new power will likely come from natural gas and renewables. Still, much of the existing demand will continue to be met by coal. Although natural gas is a formidable competitor, just to match the energy Wyoming coal provides, gas drillers in the state would have to about triple production. "It's just not going to happen in the next number of years," Loomis says.

Ultimately, the uncertainties surrounding coal are likely to wound the industry, not kill it, according to Rob Godby, a University of Wyoming economist. Coal-fired power plants generate large amounts of base-load electricity, the minimum amount of power utilities are required to provide to meet demand at any given time. "There's nothing to compete with that," Godby says. "Transmission already runs to (the plants), they're already built. Those all lead to a significant role for coal."

This sidebar accompanies the story, "Trouble in the PRB."

High Country News Classifieds
  • YELLOWSTONE TREASURES: THE TRAVELER'S COMPANION TO THE NATIONAL PARK
    Dreaming of a trip to Yellowstone Park? This book makes you the tour guide for your group! Janet Chapple shares plenty of history anecdotes and...
  • OLIVERBRANCH CONSULTING
    Non-Profit Management Professional specializing in Transitional Leadership, Strategic Collaborations, Communications and Grant Management/Writing.
  • SAGE GROUSE CCAA COORDINATOR
    The Powder Basin Watershed Council, headquartered in Baker City, Oregon, seeks a full-time Sage Grouse CCAA Coordinator. This position is part of a collaborative effort...
  • MARKETING COMMUNICATIONS MANAGER
    High Country News, an award-winning media organization covering the communities and environment of the Western United States, seeks a Marketing Communications Manager to join our...
  • EXECUTIVE DIRECTOR - OKANOGAN LAND TRUST
    Executive Director, Okanogan Land Trust Position Announcement Do you enjoy rural living, wild places, family farms, challenging politics, and big conservation opportunities? Do you have...
  • GREAT VIEWS, SMALL FOOTPRINT
    Close to town but with a secluded feel, this eco-friendly home includes solar panels, a graywater reuse system, tankless hot water, solar tubes, and rainwater...
  • EXECUTIVE DIRECTOR
    Powder River Basin Resource Council, a progressive non-profit conservation organization based in Sheridan, Wyoming, seeks an Executive Director, preferably with grassroots organizing experience, excellent communication...
  • COMMUNITY ORGANIZER- NORTHERN PLAINS RESOURCE COUNCIL
    Organize with Northern Plains Resource Council to protect Montana's water quality, family farms and ranches, & unique quality of life. Starts $35.5k. Apply now- northernplains.org/careers
  • BEAUTIFUL, AUTHENTIC LIVE YULE LOG CENTERPIECE
    - beautiful 12" yule log made from holly wood, live fragrant firs, rich green and white holly, pinecones and red berries. $78 includes shipping. Our...
  • CRAZY HORSE MEMORIAL DIRECTOR OF PROGRAMS FOR THE INDIAN UNIVERSITY OF NORTH AMERICA
    Crazy Horse Memorial, in the Black Hills of South Dakota, is currently accepting applications and nominations for the Director of Programs for The Indian University...
  • CRAZY HORSE MEMORIAL® MANAGER OF RESIDENCE LIFE FOR THE INDIAN UNIVERSITY OF NORTH AMERICA®
    Crazy Horse Memorial is currently accepting applications for the Manager of Residence Life for The Indian University of North America. This position is responsible for...
  • EXECUTIVE DIRECTOR
    Are you an art lover who dreams of living in the mountains? Is fundraising second nature to you? Do you have experience managing creative people?...
  • EXECUTIVE DIRECTOR
    The Public Lands Foundation, a non-profit organization supporting the multiple-use management of public lands managed by the Bureau of Land Management, seeks an experienced leader...
  • COLD WEATHER CRAFTS
    Unique handmade gifts from the Gunnison Valley. Soy lotion candles, jewelry, art, custom photo mandalas and more. Check out the website and buy Christmas locally...
  • EXECUTIVE DIRECTOR
    North Cascades Institute seeks their next Executive Director to lead the organization, manage $4 million operating budget, and oversee 60 staff. Send resume/cover letter to...
  • EDITOR-IN-CHIEF
    High Country News, an award-winning media organization covering the communities and environment of the Western United States, seeks an Editor-In-Chief to join our senior team...
  • LENDER OWNED FIX & FLIP
    2 houses on 37+ acres. Gated subdivision, Penrose Colorado. $400k. Possible lender financing. Bob Kunkler Brokers Welcome.
  • HISTORIC LODGE AND RESTAURANT - FULLY EQUIPPED
    Built in 1901, The Crazy Mountain Inn has 11 guest rooms in a town-center building on 7 city lots (.58 acres). The inn and restaurant...
  • POLLINATOR OASIS
    Seeking an experienced, hardworking partner to help restore a desert watershed/wetland while also creating a pollinator oasis at the mouth of an upland canyon. Compensation:...
  • ELLIE SAYS IT'S SAFE! A GUIDE DOG'S JOURNEY THROUGH LIFE
    by Don Hagedorn. A story of how lives of the visually impaired are improved through the love and courage of guide dogs. Available on Amazon.