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Coal rules

A haul truck carries coal at Contura Energy’s Eagle Butte Mine near Gillette.

Have an event, trend or general energy happening you’d like to see in the Energy Journal newsletter? Send it to Star-Tribune energy reporter Heather Richards at heather.richards@trib.com. Sign up for the newsletter at www.trib.com/energyjournal.

Last week in numbers

Friday oil prices: West Texas Intermediate (WTI) $62.06 Brent (ICE) $67.11

Natural gas weekly averages: Henry Hub $2.75, Wyoming Pool $1.99, Opal $2.05

Baker Hughes rig count: U.S. 1003, Wyoming 29

Quote of the Week 

 “It’s not like there’s no role at all (for 8,400 Btu coal), but it’s a smaller market ... The 8,800 are able to control the game a little bit more.”

-- Jim Thompson, coal analyst for IHS Markit

Eagle Butte and Belle Ayr are closer to belonging to newly formed Blackjewel LLC. The Contura Energy mines were sold to the Appalachian firm owned by Jeff Hoops last year. We knew the mines didn't go for much more than a transfer of cleanup liability. Contura also paid Blackjewel about $20 million to take the mines — money for taxes that haven't come due yet — according to financial statements.

The two mines may struggle in the new normal of coal where 8,400 Btu coal is under particular strain.

The mines employ about 500 and carry about $254 million in cleanup costs.

Coal forecasts should always be taken in context: In what scenario would such forecast come true? What are the mitigating factors? When the Energy Information Administration put out a blog post recently containing a coal forecast of 40 years flat demand from its Annual Energy Outlook, the building blocks of that scenario are important to consider. When the AEO comes out every year, it contains a slew of potential outlooks. What would happen to coal if natural gas prices fell? If the Clean Power Plan was revived? If the oil business takes off? Could coal demand remain stable for the forty years (after a slight slide in the next few years)? Yes, that's in there, but it's an all-things-remaining-equal scenario.

Environmental groups are already filing suits over the methane rule again. Compliance on the controversial standards that would restrict methane emissions from oil and gas infrastructure was stayed by a Wyoming federal judge last week. It's been pretty clear that though the rules were in place, they weren't being enforced. A revision is expected to go through that will roll back most of the controversial provisions and the fight over the adequacy of that rollback will begin.

Oilfield services firms say they are looking at a worker shortage, particularly drivers with a CDL who can pass a drug test. In a recent job fair in Casper, the maxim about workers leaving Wyoming during a downturn was clear as oil and gas service firms sifted through the crowd for fresh employees thanks to an steady uptick in the industry.

While we're talking jobs, tune in next week for the Energy Journal podcast, where we spent some time in Campbell County talking coal employment. If coal production has reached a new normal, what does that new normal mean for people's jobs? 

If you've missed out on the pod, here's an earlier episode looking at whether the Powder could be like the Bakken.

What'd I miss? There's never a shortage of important energy stories in  Wyoming. Take advantage of my open ears and let me know what you think about energy and the environment in this small town with long streets: heather.richards@trib.com. Twitter users can find me @hroxaner or @EnergyJRNL.

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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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