Montana coal mines are entering a second straight year of historically low production, industry records show.
Coal numbers through the first four months of 2017 show Montana mines producing a third less coal than they did just two years ago.
Through April, Montana mines had produced 9.8 million tons of coal, on track with the first four months of 2016 but off 4 million tons from two years ago. The production trend puts Montana coal on track for its worst production period in at least a decade.
Several factors are working against coal, said Bud Clinch, of the Montana Coal Council. Early year exports are always impacted by frozen-over shipping lanes in the Great Lakes. Pacific Northwest exports also received a dose of uncertainty in April as President Donald Trump imposed a 24 percent tariff on Canadian softwood lumber.
Canadian Prime Minister Justin Trudeau threatened to ban U.S. coal from British Columbia’s Westshore Terminal, the primary Pacific Northwest port for shipping Montana and Wyoming coal to Asia Pacific power plants.
The announcement caused Gillette, Wyoming, based Cloud Peak Energy’s stock to tumble 6.6 percent. Cloud Peak, which mines southeast Montana coal at its Decker and Spring Creek mines, depends on the Westshore Terminal.
However, saber rattling over the coal port seems to have subsided. Cloud Peak has nailed down agreements to sell coal this year into the Asia Pacific, where Korea is Cloud Peak's biggest customer for Montana coal.
In its first quarter report, Cloud Peak said that because of sustained international prices the company had booked 3.3 million tons of Powder River Basin coal for 2017 sales. The booked sales boosted its total export volume to 5 million tons for the year, provided that trains and coal ports could accommodate the shipments.
“The company continues to receive strong interest from Asian customers for its Spring Creek coal and will seek to layer in sales for the remainder of 2017 as opportunities arise,” the company reported to investors.
Internationally, Powder River Basin coal has been hurt by a glut of coal in the Asia Pacific market. Domestically, natural gas has supplanted coal as the nation’s leading energy source, according to the Energy Information Administration.