(Oil & Gas 360) – It appears that a Christmas miracle of sorts would be required if Wyoming is to keep a 32-year coal production streak alive.
Coal, for decades the biggest source of revenue for the Cowboy State, is going to struggle to meet a 200 million metric ton production level for 2024. Failure to do so would mark the first time going back to the 1990s that the threshold wasn’t met. The state record was nearly 450 million metric tons set in 2008.
Industry experts note producers would have to produce five million tons a week through the end of the year to keep the streak alive, an amount that has yet to be produced in a single week this year.
While oil and gas have surpassed coal as the leading revenue generator for state coffers, coal production nonetheless generates hundreds of millions in payroll from thousands of good paying year-round jobs, and royalty revenue this year is projected to be about $430 million in a state with fewer than six hundred thousand inhabitants.
Oil and gas revenues are higher but experience more price volatility, making it harder for state treasury officials to budget. Coal today is about $442 per metric ton, down from nearly $458 a ton eighteen months ago. Arch and Peabody, two of the largest coal producers in the state, have both seen double-digit growth in their respective stock prices this year.
American coal has found itself living basically a double life between domestic energy policy and foreign market demand. Last year, for instance, saw record demand for coal around the planet with this year’s demand essentially flat. At the same time, domestic production is expected to be down almost 15% this year from 2023. Industry officials say a series of warm winters have left electrical power generators with large stockpiles. The mineral has been increasingly marginalized as a power source because of issues surrounding heavy metals residue management and carbon emissions, and cheap, cleaner natural gas has ascended as a substitute.
Wyoming accounts for over 40% of U.S. coal production, virtually all of it coming from the Powder River Basin. A single Powder River Basin mine, Black Thunder, was once the second most prolific coal mine in the world.
As coal’s share in the energy mix of most First World countries continues to shrink, nearly seventy percent of global consumption is from China and India, which roughly approximates those two countries’ share of the world’s population.
By Jim Felton for oilandgas360.com
