It’s no surprise that 2015 was a tough year for coal and that 2016 is going to be tougher. Not only did 2015 represent a 30-year low in production in the U.S., but projections indicate 2016 will experience an annual drop in production not felt since 1958.
But the bleakness of 2016 promises to open the door wider than ever for a concerted and just transition away from coal. While it’s tough times for the industry, the silver linings–a boost clean energy, climate protections, and a move to more sustainable and prosperous economies–is brighter than ever.
Overall, just how grim are things looking? Well, we took a look at production data reported to the U.S. Mine Safety and Health Administration for the first quarter of 2016 and based these numbers, things are looking BAD. This is especially the case in the American West, which right now is the source of more than half of all coal produced in the U.S.
Our methods were simple and by no means a precise forecast, but they are insightful and certainly underscore that 2016 will stand as one of the darkest years for coal companies. And without a doubt, they certainly foreshadow the full collapse of the industry. Let’s take a look at how each state is faring.
Wow, things are looking bad in Colorado. The state already saw a 23-year low in production at the end of 2015, but the pace of mining in 2016 indicates something worse is in store.
We looked up production reports for all active mines in the state and for the first quarter of this year, a total of 2.4 million tons of coal was reported. Simply multiplying that by four, you get an annual rate of a little less than 10 million tons by the end of 2016.
Less than 10 million tons is quite a drop. In fact, based on historical production data for the state, coal production has not fallen below 10 million tons since 1976. That means Colorado is on track to hit a 40-year low in coal production, a staggering decline.
In a way, this projected decline mirrors the recent demolition of an iconic coal silo in the western Colorado town of Somerset. Quite literally, coal companies are collapsing in Colorado,
The alarms have been sounding over Utah’s coal decline for years now, but what’s happened so far pales in comparison to what 2016 is likely to bring.
Again looking up production reports for all active mines in the state and for the first quarter of this year, a total of 3.3 million tons of coal was reported. Simply multiplying that by four, you get an annual rate of nearly 13.5 million tons by the end of 2016.
That, too, is quite a drop. Based on historical production data for the state, the last time coal production was lower than 13.5 million tons was in 1985, a little more than 30 years ago. The chart below, based on recent and long-term data from the State of Utah, shows that, despite some ups, it’s been mostly downs since peak production in 1996.
Montana’s coal production has actually been relatively stable over the last several years, with production rates hovering around 40 million tons annually since the early 1990’s. That’s going to change this year.
Once again looking at production reports for all active mines in the state and for the first quarter of this year, a total of 7.4 million tons of coal was reported. Multiplying that by four, you get an annual rate of 29.68 million tons by the end of 2016.
To put that into perspective, the last time coal production in Montana fell below 30 million tons was in the early 1980’s. In fact, as of 1985, Montana was producing more than 33 million tons annually according to the U.S. Energy Information Administration. Once again, in 2016, we’re likely to see another more than 30-year low in production in a western state.
New Mexico’s coal production peaked at nearly 30 million tons annually around 2001, but has been in pretty steady decline ever since. In 2015, total production fell below 20 million tons for the first time since 1987. This year, the decline seems poised to continue.
Once again looking at production reports for all active mines in the state and for the first quarter of this year, a total of 4.2 million tons of coal was reported. Multiplying that by four, you get an annual rate of a little over 17 million tons by the end of 2016.
That rate of production hasn’t been seen in New Mexico since the early 1980’s. Once again, in 2016, we’re likely to see another more than 30-year low in production in a western state.
Ah, Wyoming. The largest coal producing state in the nation and home to the Powder River Basin, which produces more than 40% of all coal consumed in the U.S. We can’t possibly expect to see such substantial declines here, can we?
Amazingly, yes, although not as staggering as Colorado’s projected 40-year low. After suffering a 13-year low in 2015, it looks like the plummeting is slated to continue.
Looking at production reports for all active mines in the state (all 16 of them) and for the first quarter of this year, a total of 65.4 million tons of coal was reported. Multiplying that by four, you get an annual rate of 261.63 million tons by the end of 2016.
That’s a lot of coal projected to be produced in 2016! But wait, is it really? Well, yes and no.
The bad news is, according to the Wyoming Mining Association, the state hasn’t produced 261 million tons or less since 1994, 22 years ago. It’s no wonder that the state’s largest mining companies, including Peabody, Arch, and Alpha, have all filed for bankruptcy in the last year. Their Wyoming mines are the largest and often most profitable, yet even here, they can’t handle the pressure of coal’s demise.
The good news is, with 261 million tons likely to be produced in 2016, Wyoming will still rein as the top producer, for what that’s now worth.
The Take Home
Of course, these are just simple projections that presume the coal production rates reported for the first quarter of 2016 continue until the end of the year. The rates could go up, but they could also go down. Overall, they underscore that 2016 is going to be the roughest year yet in the recent history of coal.
And with companies laying off hundreds of workers, a moratorium on new federal coal leasing, coal industry bankruptcies, revelations that executives have run companies into the ground at the expense of miners, and studies continuing to find that keeping coal in the ground is necessary to meet climate protection goals, the writing on the wall seems to be turning into a best-selling multi-volume series.
That’s why this week, WildEarth Guardians kicked of its “Just Transition” Campaign, an effort to call attention to the need to help communities and workers move on from coal in the western United States. The push is starting with billboards in Casper, Wyoming and Salt Lake City Utah.
The demise of the coal industry is something to celebrate, but the collapse of coal shouldn’t leave people and communities behind. It’s time to make transition a reality and to invest the resources and expertise needed to make it happen.
2016 is going to be a terrible year for coal, but it looks like things are only going to get worse. Now, more than ever, is the time to move on.