June 4, 2022 - Montana coal production is up slightly as rising natural gas prices make the fuel more competitive.
Mines produced seven million tons through March, an increase of about 11% from the same period a year earlier, according to federal Mine Safety and Health Administration data.
The increase comes at a time when U.S. coal production is up 3% for the year so far. Montana mine production can be attributed partly to two things, increased exports and a slight rebound in coal demand at domestic power plants. The longer trend in production is for less coal. The state has one less mine than it did in 2020, when Decker Coal went bankrupt.
Signal Peak reported an increase of nearly 200,000 tons at Bull Mountain mine, which straddles Yellowstone and Musselshell counties. The mine is exclusively a source of export coal for customers in Japan and South Korea. Its 1.72 million tons produced in the first three months of the year marked its best first quarter since 2018 and its third best early-year performance in the last decade.
Likewise, Spring Creek Mine coal production was up 160,568 tons. At the beginning of the year, Spring Creek owner Navajo Transitional Energy Company forecasted improved demand in South Korea and Japan would spur production in its Montana and Wyoming mines.
Spring Creek is Montana’s largest coal mine. First quarter production has hovered around 2.7 million tons for several years. Prior to a 2016 coal slump, which lead to the bankruptcy of then owner Cloud Peak Energy, Spring Creek rarely produced less than 3 million tons in a first quarter.
Cheap natural gas and a global coal glut was credited for Cloud Peak’s coal crash in 2016. Rising gas prices and tight coal production are now credited for the mine’s improved production.
NTEC CEO Clark Moseley told Argus Media at the start of the year, that coal would benefit from higher natural gas prices in 2022. Just two years ago, NTEC was furloughing Spring Creek employees as the pandemic disrupted domestic coal consumption in the Midwest.
Spring Creek’s most productive period is usually between June and October as domestic demand for coal increases. Coal piled at power plants ahead of air conditioning season, and again ahead of winter heating, are the big drivers.
Westmoreland Mining LLC, which operates Rosebud and Absaloka mines, has increased production. The company’s Montana mines fuel domestic power plants, primarily Colstrip Power Plant in southeast Montana and the Sherburne County Generating Station in Becker, Minnesota. Both power plants have owners intending to phase out coal power in less than five years. SHERCO Unit 2 is scheduled to retire next year.
Rosebud mine, which serves Colstrip and a smaller power plant that burns waste coal, produced 130,000 more tons in the first quarter of the year, than it did in early 2021. The 1.9 million tons produced at the mine were the most first-quarter tons mined since 2019, which was the last year Colstrip Units 1 and 2 operated, before being shuttered.
Absaloka mine, the state’s smallest active mine, increased production to 550,674 tons in the first quarter, a 42% increase over the same period a year earlier.