Powder River Basin coal production fell to 75.5 million tons in the last few months of 2017, about a 7 million ton drop compared to the final three months of the previous year, according the preliminary data from the Mine Safety and Health Administration.
However, production at the 12 mines in northern Wyoming, which provide the bulk share of the country’s coal supply, rose to 305.3 million tons in 2017, a 6.3 percent increase compared to the year prior.
Wyoming’s coal economy experienced a swift decline two years ago, as bad bets on metallurgical coal fell through and the first of the large, indebted companies, Alpha Natural Resources, sought bankruptcy.
Pressure from cheap natural gas and flat demand for electricity had also burdened the coal industry. Early in 2016, two more companies followed Alpha into bankruptcy. Nearly 500 miners lost their jobs on a single day of layoffs in March and over the two-year downturn, nearly 1,000 mining jobs disappeared.
Things have improved.
The coal industry limped through one of the lowest production quarters in decades after the layoffs. But Wyoming coal rebounded in the fall of 2016, flushing hopes that the market could heal as better than expected production continued into 2017.
The final numbers are lower than some expected, considering the high gas prices over the winter months, but still above the desperate production levels of the downturn.
Wyoming is likely sitting at a new normal, said Travis Deti, executive director of the Wyoming Mining Association. Deti declined to comment directly on the federal production count. The association relies on the state mine inspector’s data that is expected out in February.
“I’m not sure we’re ever going to see the days of 400 to 450 million tons,” he said. “We just have to get used to where we are.”
But despite the headwinds against coal in recent years, like plant closures that burn Wyoming coal, Deti said he believed Powder River Basin coal companies expected those and could likely absorb that diminished demand.
“Most of the closures were scheduled closures,” he said. “We’re hoping with some of the changes in Washington D.C., we can prolong some of those.”
Hopes were high in Wyoming that the Trump presidency would lead to a revival of coal, or at least provide a stoppage to the bleeding. The sector’s rebound appears more moderate than campaign promises, with about 88 jobs returning to the PRB, less than a 2 percent increase, since this time last year.
“It’s an improvement, and certainly a boon to those 88 new workers,” said Rob Godby, a University of Wyoming energy economist who’s studied the health of Wyoming’s coal industry on behalf of the legislature. “But not enough to provide the PRB region with significant economic recovery after the decline experienced in 2016.”
Revival of the coal industry would require a dramatic political influence on the market and the all-of-the-above support for fossil fuels from Washington right now does offer coal that kind of boon, he said.
One troubling factor from the Mine Safety and Health Administration data on the job front is that productivity per miner has changed. Though production has risen since the bottom of the bust, employment has not snapped back in kind, Godby said.
“In other words, even if coal production were to fully recover to levels seen before 2016, some job losses in that decline may appear to be permanent based on hiring patterns in the year since.”