By Jake Goodrick
August 3, 2022 - Halfway through 2022, Powder River Basin mines have produced about half of the total amount of coal as last year, keeping up the pace of production despite struggling to get enough trains to maximize on the continued demand for thermal coal.
The 12 Campbell County PRB mines combined to produce 115.7 million tons of coal this year through June. Last year, those same mines produced about 230 million tons, according to coal production data from the Mine Safety and Health Administration.
Spring Creek, a PRB mine in Montana, has produced 5.9 million tons this year through June compared to 13 million tons overall last year.
Last year’s productivity was a 10% increase from the year before that, when in 2020, a confluence of COVID-19 related factors led to just 206.9 million tons produced in Wyoming PRB mines.
Through six months, 2022 production is on par with last year, but rail issues have persisted into the second quarter, causing a slight dip from first to second quarter production.
Wyoming PRB mine production fell by 3 million tons from March through June, dropping from 59.35 million tons in the first quarter to 56.35 million tons in the second, according to MSHA data.
The “unexpected uptick” in coal production in 2021 was spurred by economic factors that emerged toward the end of the year and similar market forces have carried into 2022.
“We’re going to have a fairly good production year,” said Travis Deti, executive director of the Wyoming Mining Association. “We will probably meet what we did last year if not probably exceed that. I think there’s some conditions involved that are driving it.”
Natural gas prices have remained high, causing more utilities and customers to shore up coal reserves.
Cold winters and hot summers have kept energy consumption high as well, further driving energy demand across the board.
“Natural gas prices are very, very high right now,” Deti said. “That bodes well for Wyoming coal.”
As a rule of thumb, when gas prices hit $2.75 and higher, the price of higher Btu coal becomes competitive with gas, Deti said. Once that price goes above $3, demand increases for even the basin’s lower Btu coal.
“As long as these gas prices remain high, there’s going to be a demand.”