Citing a lack of market, the developers of a new coal mine in southwestern Wyoming on Thursday said they were suspending development after a year of work. The actions underscore concerns expressed in Wyoming and elsewhere about the state of the U.S. coal industry.
A combination of increasingly more stringent federal environmental regulations and continued low natural gas prices have shrouded coal in uncertainty. Wyoming Gov. Matt Mead has expressed the need to bolster the industry in his state, which is the largest U.S. producer of the fuel.
The Haystack mine, located northeast of Evanston, WY, was being developed my Omaha, NE-based Kiewit Corp., a global engineering firm involved in energy and mining. Up to a dozen workers are impacted by the decision, the company said.
While Kiewit spokesman Tom Janssen issued a statement on the project stoppage, there were few details about how far into development the mine was. A Kiewit spokesperson told NGI Thursday that the project could be resumed, but “only if the market for coal improved.”
Janssen said “challenging market conditions” have caused the project shutdown. “[We have] communicated with employees the need to suspend operations at [our] mine,” said Janssen. “It was driven by the challenging coal market conditions that have affected virtually the entire industry. Regrettably, this decision will affect all current employees. We are actively working with employees to identify and pursue other opportunities within our parent organization.”
The mine was expected to eventually employee up to 100 workers.
Pundits in Wyoming chalked it up to more stringent air quality restrictions on coal-fired electric generation plants, a mild winter, and stubbornly low gas prices. A recent study out of Duke University was cited in a Washington Post report last Monday warning that the coal industry was facing troubled times.
As much as 65% of the U.S. coal-fired generation fleet could find itself under siege in the months and years ahead, according to Duke peer-reviewed research that reportedly took a detailed assessment of the comparison in operating costs for coal-fired and gas-fired power plants. The Duke researchers concluded that an additional 56% of the U.S. coal plant fleet could become more expensive than gas-fired plants due to new air quality requirements from the U.S. Environmental Protection Agency.
Preliminary estimates from the U.S. Energy Information Agency (EIA) show that coal production dropped by 11.5% in the first three months of 2012. And in Wyoming for all of last year, 8% less coal was produced, and 3% of the coal workers in the state lost their jobs, according to EIA data.
Kiewit broke ground on the Haystack mine in December 2011. The mine had been permitted to ship 1.5 million tons of high-quality thermal coal per year, according to the developer.
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