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PRB coal production could reach recent highs again by 2030 - EIA

Coal News - Published on Wed, 11 Jan 2017

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According to the Energy Information Administration’s Annual Energy Outlook, annual coal production in the Powder River Basin could return to a high of 400 million tons by 2030 if natural gas prices remain high and the Clean Power Plan is not implemented.

Every year the federal agency makes a number of energy projections based on varying prices, regulations and market scenarios.

Wyoming has depended on coal revenue for 30 years and watched in horror as the sector faced historic declines, bankruptcies and layoffs through 2015 and 2016. Though the hemorrhaging of employees has stopped and production has increased over the last six months, the outlook for coal’s future has remained grim.

The federal report offers the potential of an unexpected growth spurt for the dusty black rock, extending coal's reign as one of the most-used fuels for electricity generation for a little over a decade before it falters under pressure from competition with natural gas and renewable energy.

Coal will face declines after 2030 even if the Clean Power Plan goes away, experts say. However, they continue, in earlier projections the likelihood of Wyoming production reaching pre-bust highs was poor.

Mr Rob Godby, director for the Center of Energy Economics and Public Policy at the University of Wyoming, said that “This should be a bit of good news for coal miners in Wyoming, as the newest EIA projections suggest that under a Trump administration and Republican Congress that has threatened to repeal the CPP, [Powder River Basin] coal output would stabilize and actually grow.”

Much of coal’s future, unsurprisingly, hinges on natural gas prices.

Mr Godby said that “Without the Clean Power Plan, the PRB is expected to increase coal output by about an average 2.5 percent per year through 2030 under current natural gas price assumptions meant to describe EIA’s best thinking on the trajectory of natural gas prices over that period.”

According to the EIA, for years, natural gas has threatened coal as new technologies in fracking made gas cheap and abundant. Now, gas prices may rebound.

Travis Deti, director of the Wyoming Mining Association, said that “We are starting to see the gas prices creep up a little bit. As anyone who has paid attention to the industry knows, [gas prices] couldn’t stay as low as they were. When gas prices go up, Powder River Basin coal is competitive.”

However, the fate of the Clean Power Plan is uncertain. If implemented it would favor natural gas and renewable growth, just as it would deal a knockout punch to coal.

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Posted By : Rabi Wangkhem on Wed, 11 Jan 2017
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