Coal production

Duncan Harris, Flickr Creative Commons

The outlook for the North American coal sector is negative. That's according to a bleak industry report released by the credit ratings agency Moody’s, on Friday.  

 

Listen To U.S. Coal Production Fall Off A Cliff

May 6, 2016
Wikimedia Commons

America’s coal industry is hurting: In the past year, thousands of workers have been laid off and a majority of the country’s major coal companies have filed for bankruptcy. Coal production is at 30-year low. Here’s what three decades worth of U.S. coal production looks like:

The drop off in the past year (the orange portion of the graph) is staggering. 

 

U.S. coal production in 2015 was lower than it has been in nearly 30 years, according to a report released by the Energy Information Administration today. 

EIA data projects that the U.S. produced 10% less coal in 2015 than it did the year before. Analysts attribute this drop to a combination of low natural gas prices, a slowing of international demand, and environmental regulations. Brian Park, an industry economist on the EIA's coal statistics team says Appalachia has been hit hardest by far. Wyoming's Powder River Basin in comparison, has lower operating costs.

With continued weak prices for coal, one of Wyoming’s largest coal companies is planning to reduce production.

During a meeting with investors to discuss third quarter results, Cloud Peak CEO Colin Marshall said the company is looking to cut 10 million tons at the Cordero Rojo mine near Gillette in 2015. That’s roughly 10 percent of the company’s overall production in the Powder River Basin.

Marshall said the plan won’t change unless prices rebound significantly.

“We're going down until things change enough to make it worthwhile going up.”

Irina Zhorov

Coal production and coal prices are down and stakeholders are offering up lots of reasons as the cause, from weather to new policies and competing fuels. Wyoming Public Radio’s Irina Zhorov reports that it’s a combination of all these factors. 

Irina Zhorov: There is no doubt coal is struggling right now. Karim Rahemtulla is the Senior Correspondent for investment blog Wall St. Daily.

Rahemtulla: The predominant trend that’s in the market right now is a slowdown in consumption, directly related to coal, not necessarily other energy sources.