Speaking of global climate change, how about that Packers game? Game time temperatures were threatening to unseat the “Ice Bowl of 1967.” When Canadians are complaining about the weather, it’s cold. No one in the Upper Midwest is talking about global climate change right now, but they will be in July and August.
Climate change humor aside, Coal Age has the good, the bad and the ugly this month. Let’s start with the bad. In 2013, total U.S. coal production fell 20.7 million tons (2%) to 995.8 million tons. This is the first time in 20 years that figure has dropped below 1 billion tons. As readers will see on the top 10 chart on p. 7, Wyoming, West Virginia, and Kentucky were hit hardest falling 3.5%, 3.5% and 8.6%, respectively. For perspective, 3.5% in Wyoming is 14 million tons, while 3.5% in West Virginia is 4.2 million tons. In the end, it all equals out on a Btu basis, except the West Virginia tons likely represent more jobs in an area that desperately needs them. The market situation is addressed in-depth in the annual Forecast Survey, see p. 24.
The ugly: a chemical spill in Charleston. W. Va., further tarnishes the coal industry’s image (See Environment, p. 30). When the news that 4-methylcyclohexane methanol (4-MHCM), a chemical used to process coal, had leaked into the Elk and Kanawha rivers, fouling the Charleston water system, people began to clear bottled water from the shelves. Even though the tap water still smelled like licorice, they said the water was OK. The coal industry quickly distanced itself from what was clearly a “chemical spill.” The distinction as it turns out is not black and white. Had the good citizens of Charleston demanded that the owner of Freedom Industries be the first to drink the tap water, it would have been a coal operator.
Now the good news: All signs say that 2014 will be a good year for the coal industry in general. Yes, total production was down, but some states, such as Montana and those in the Illinois Basin, posted positive numbers. Looking at the bright side, the coal industry mined nearly 1 billion tons last year and Coal Age expects total production to grow by at least 27 million tons next year. Coal operators have more money in their capital budgets than last year. If they can justify the expense, projects are moving forward.
Utility coal consumption grew by 35 million tons or more in 2013 and that trend is likely to continue through 2014. Stockpiles at utilities are at two-year lows and the cold spell that has brutalized the Upper Midwest is sucking a lot of natural gas out of the market. Spot prices for coal are trending upward. When ratepayers get their utility bills, hopefully they will wake up and realize the Environmental Protection Agency should not dictate energy policy (See Dateline Washington, p. 14). In the meantime, coal operators need to make hay while the sun shines on the frozen tundra. Enjoy this edition of Coal Age.
