New normal

Coal mine haul trucks sit near the edge of Black Thunder Mine near Wright. Industries are adapting to the new normal in coal, oil and gas sectors. 

File, Star-Tribune

Wyoming’s fossil fuel industries have spent the last 12 months finding footing in the new normal for the coal, oil and gas sectors.

The price of crude and the production numbers at Powder River Basin coal mines both improved. The hemorrhaging of jobs during the previous years slowed and reversed course.

And the renewed hope has dampened fears fueled during the worst of the bust about the survival of the state’s rich resources, its funding model and its workers.

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The price of crude went up in 2017, though its current state of hovering below $60 would have been considered dismal before the bust. Oil and gas companies say they have made efficiencies throughout the downturn that make the new normal for crude pricing survivable.

Industry enthusiasm started early in the year, after the first quarter federal lease sale that netted $129 million, about half of which went to the state.

Land sale sparks industry enthusiasm in Wyoming

Similar sales in the Powder River Basin revealed a continued interest in staking out land in Wyoming’s key basin, some said, a notion small companies argue heralds long term growth beginning in the Powder River Basin.

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Coal improvements have also ignited hope, though the industry acknowledges long-term challenges.

As the regulatory environment became more favorable to coal companies after the election of President Donald Trump, pressure increased from coal plant retirements that continued to reduce demand for Wyoming’s keystone industry.

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Coal production beat last year’s numbers every quarter that had been reported, though is likely to stay below historic norms.

With that increased activity, some jobs returned of the nearly 1,000 lost between 2015 and 2016. But the comeback was marginal. About 330 jobs were reinstated as coal companies operated with new restraint post downturn.

Current employment is not expected to increase significantly, some say.

“It’s a pretty good snapshot of where we are going to be going forward,” said Travis Deti, executive director of the Wyoming Mining Association, of the job picture. “The industry has tightened its belt, it’s downsized. They are doing a lot more with less; they’re becoming more efficient and watching their pennies.”

Wyoming's coal sector has stopped bleeding, but most jobs probably aren't coming back

But the new discipline in the Powder River Basin, particularly by companies that emerged from bankruptcy last year, has shown up in improved earnings, despite declines in demand.

Wyoming coal shows positive earnings as the sector slowly defines its "new normal"

The year also brought some new players.

The Eagle Butte and Belle Ayr mines, owned by Contura Energy — a spinoff firm formed during the Alpha Natural Resources bankruptcy — will go to an Appalachian company.

Does the sale of Contura coal mines herald a change in the northeast Wyoming? Depends on who you ask.

Meanwhile, Ramaco Carbon is still fighting to dig coal in Sheridan County, after an independent council’s decision to refuse its coal mining permit until it had cleared up some issues in its mine plan.

Another new firm, Wyoming New Power, is drumming up financing to bring a coal treatment facility to the old Two Elk property in Campbell County. Proponents of coal treatment say that it can heighten the value of Powder River Basin coal, increasing its chance to compete in the new realities of the coal market and find buyers overseas.

It was a year of change and a year of stabilization. Some predictions of continued improvement in the price of crude next year have many hopeful. The coal sector, too, is looking ahead, but with a more measured expectation of what the new normal means.

Follow energy reporter Heather Richards on Twitter @hroxaner

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Energy Reporter

Heather Richards writes about energy and the environment. A native of the Blue Ridge Mountains in Virginia, she moved to Wyoming in 2015 to cover natural resources and government in Buffalo. Heather joined the Star Tribune later that year.

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