Coal workers keep eye on foreign markets

2013-02-18T00:15:00Z 2014-06-04T13:46:38Z Coal workers keep eye on foreign marketsBy ADAM VOGE Casper Star-Tribune The Billings Gazette
February 18, 2013 12:15 am  • 

GILLETTE, Wyo. — Communities in northeast Wyoming weren’t built on the coal industry’s back, but they reside there now.

In all of Campbell County and much of Sheridan County, businesses rely on income driven by coal.

Restaurants regularly seat large crowds of miners and mine service workers. Hotels serve as temporary housing for workers. Everyone from cosmetologists to construction workers regularly deal with mine employees, contract workers and their families. The industry’s influence is inescapable and yet immeasurable.

There would probably still be a Gillette without coal mines. And a Sheridan and a Wright. But whether they’d exist in the same way is debatable; even downturns hurt.

That’s why the industry’s future has the eye of so many in the northeast corner of the state, a hub for the coal industry both in Wyoming and nationally.

If some companies have their way, they could soon send to China or South Korea what was once unearthed near Gillette or Sheridan. To some in the industry, that is reason to be hopeful.

Looking to new markets

Times have been better for the coal industry.

Year-over-year production fell 9 percent in 2012, according to preliminary numbers from the Energy Information Administration. Industry officials have since said demand for the resource is down thanks to low natural gas prices, mild weather and proposed emissions laws that would make it much more expensive to run a power plant on coal.

And as demand drops so does the price. Powder River Basin coal sold for about $10.45 per ton in mid-January, according to the Energy Information Administration. The same product closed 2011 averaging about $13.50 per ton.

But things could look up soon. As more coal-burning plants come online in China, Japan and South Korea, international demand for the product increases.

Several coal and rail companies have in recent months proposed West Coast coal ports which could be the base for the industry’s shipments of coal to eastern Asia, especially China.

Proposed exports — as high as 160 million tons per year between five facilities — could help American coal find new buyers and offset some of the shrinking demand for coal at American power plants.

“We hope we can get started developing those markets,” said Marion Loomis, director of the Wyoming Mining Association. “But first we need export capacity.”

According to numbers from the U.S. Energy Information Administration, the Department of Energy’s research arm, about 17 million tons of Wyoming and Montana coal was distributed internationally in 2011. Loomis said current rail and export facilities could probably accommodate the six to eight daily trains needed to ship 40 million tons per year. But once plans extend beyond that, it’s tough.

“We don’t have the capacity to offload the coal,” he said.

Companies and coal analysts look at exports as a possible boost for the industry — and exports aren’t just a buzzword used by industry advocates and analysts. Coal miners have taken note.

Pat Cooper, an employee at Arch Coal’s Black Thunder mine southeast of Wright, said exporting coal is of “big-time importance” to local workers.

Cooper, a longtime coal worker, said the export market could help create jobs in the Pacific Northwest and maintain jobs in Wyoming.

Justin Cowley, a Wright resident who works at the North Antelope Rochelle mine, said his supervisors and their bosses are leaning heavily on exporting their material as a possible boost.

“They’re really pushing for it,” he said. “It would be just another place to sell coal.”

Cowley said the owners of the mine, Peabody Energy, haven’t made cutbacks at the North Antelope Rochelle mine, but he’s heard of reduced productions at other company-owned facilities such as the Caballo and Rawhide mines, both near Gillette.

Workers in peripheral industries are also hoping for increased production and demand likely brought on by new export opportunities.

Gillette resident Keith Adels manages FCT Water, a company that develops technology to suppress coal dust. Adels and one other employee work in coal suppression for the company. If exports gain traction, Adels said, he would probably bring in another two or four people.

“It would virtually double the business I do,” he said.

Local elected officials also look at coal exports as a potential boost to the industry and area economy, although they don’t expect it to create a new coal boom.

“If we can get these ports opened up, I don’t know that it will be salvation of the western coal industry, but it will certainly help to have that many more customers available,” said Dave Kinskey, the mayor of Sheridan.

Gillette Mayor Tom Murphy hopes exports could eventually offset demand lost by the mothballing of coal-fired power plants around the country.

“Coal exports are important to maintain the level of mining we presently have and revenue streams the entire state enjoys,” he said. “If we see a downturn or (coal ports) do not happen in the next three to five years, it will definitely be noticed in our community.”

Export opposition

The idea of establishing coal ports isn’t universally praised. Plans have been harshly opposed by environmental groups in Washington and Oregon.

Organizations like the Sierra Club, Rising Tide North America and Columbia Riverkeeper have stirred opposition along the West Coast, but many have had difficulties mobilizing Wyoming- or Montana-based opposition.

“In terms of organizing in Wyoming, it’s definitely challenging,” said Krista Collard, a spokeswoman for the Sierra Club’s Beyond Coal Campaign. “The politics are difficult.”

Collard said that Beyond Coal organizers — two are working in Wyoming and Montana — encounter more people unlikely to join their effort against coal exports in Wyoming than they ever would farther west.

“There are people who — mining is a part of their life, it’s all they know,” she said. “In Washington and Oregon, coal is not something people want or are very used to.”

Collard said organizers do encounter and enlist some anti-coal Wyomingites and don’t expect their movement to ever gain the traction it has in Washington and Oregon — but they will keep trying.

“We’re going to continue to gain momentum in Wyoming,” she said.

Another group, Rising Tide North America, tried to organize a Wyoming coal protest in July. But the group backed out shortly before the planned event. A national spokesman said the organization’s Wyoming branch, High Country Rising Tide, didn’t have the resources or leadership to prepare a protest yet.

A call to Rising Tide North America wasn’t returned. An email to High Country Rising Tide went unanswered.

Looking to the future

Kinskey said as coal goes, so goes Sheridan.

“It’s like a beer and a pizza or a hug and a kiss,” he said. “Sheridan wouldn’t be here if it wasn’t for the coal.”

It’s the same story farther south and east in Campbell County. Philippe Chino, executive director of the Campbell County Economic Development Authority, said the county’s population is expected to grow by nearly a quarter between 2010 and 2020, thanks largely to coal and jobs generated by area mines.

Even if exporting coal doesn’t catch on, Kinskey and others aren’t worried about what would happen to the industry.

“The long-term prognosis is that we’ll have a coal industry,” Kinskey said. “It may not be booming, but we’ll have a coal industry.”

Loomis said it would be in American coal producers’ best interests to win international contracts, but he added that coal will continue to be a viable fuel source no matter the outcome of the exports debate.

“We’re not going away,” he said. “We’re going to compete for every contract domestically. And I think we’re going to get a lot of them.”

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