Coal production across Wyoming continued to tumble throughout the start of the new year, with output during the first quarter setting a new two-decade low, data released by the U.S. Energy Information Administration shows.
Wyoming coal mines produced 54.6 million tons of coal, a sharp 10.8 million tons less than this time last year.
The coal industry has faced the threat of declining demand for several years, well before the coronavirus pandemic and corresponding economic collapse hit the U.S. Many utility customers have turned their back on thermal coal, looking toward less expensive power sources, like natural gas and renewable energy to produce electricity.
But the COVID-19 pandemic has also tempered electricity use from big industry and deflated demand for coal further, according to industry experts.
University of Wyoming economist Rob Godby concluded this year’s first quarter was “the worst quarter of production in over 20 years and only the second time since the 1990s that production in the Powder River Basin has been below 60 million tons for a quarter.”
A small silver lining amid this sobering news for the country’s leading producer of coal came during the final week of the quarter, when production at least mirrored 2019 output.
“That optimism should be tempered though,” Godby said in an email.
More declines could be around the corner. Some power plants conduct maintenance as electricity demand typically wanes during the spring nationwide. That, coupled with a recession, could spell trouble for the industry.
All in all, Godby called it a “rough start to the year.”
Executive Director of the Wyoming Mining Association Travis Deti said he wasn’t surprised by the new numbers.
“We’re using less coal in this country, and we’ve had an (economic) slowdown the last couple of months — that’s probably a factor,” Deti said. “It is what it is.”
The industry has already been adapting to the new normal of less demand for some time, he added, with reduced work forces, streamlined operations and overhead cuts.
“We have a much leaner industry than we did five years ago,” Deti said. “That is going to continue.” As production demand decreases, operators will have to adapt their operations, he continued.
Two coal firms with operations in the Powder River Basin announced plans to lay off dozens of Wyoming miners last month, citing tough market conditions.
But all 16 coal mines continue to operate in Wyoming, despite the spread of the coronavirus pandemic and calls by the medical community to keep workers home if possible.
Most coal companies operating in Wyoming have taken steps to protect workers’ health while on the job, Deti said, from staggering shift hours and taking employees temperatures at the entrance, to mandating gloves and face masks when working within 10 feet of someone.
“We want to stay open. We want to continue operating,” Deti noted. “We are a critical and essential industry, and if we do eventually go to a shelter-in-place order, we want to keep operating and keep our employees safe.”
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