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Home / Business / Closures of mine in the top US coal region create new uncertainty

Closures of mine in the top US coal region create new uncertainty



GILLETTE, Wyo. (AP) – At two of the world's largest coal mines, the economy became so bad that the owner couldn't even get toilet paper on credit.

Warehouse technician Melissa Worden split what remained, giving four rolls to each mine and two to the mine supply plant where she worked.

Subsequently, mining owner Blackjewel LLC filed for Chapter 11 bankruptcy protection on July 1. Word is that the accounts would be settled quickly.

"The consensus was: In 30 days we will look back at this, and we will get through it, and we will be up and running, and it is a fresh start," said Worden.

What happened instead has shaken the charcoal-producing region of the United States. Blackjewel beat most of its Wyoming employees and laid down Eagle Butte and Belle Ayr mines, the first free of adversity since coal mining in the Powder River Basin exploded in the 1

970s.

It is a big hit for the region located northeast of Wyoming and southeast. Montana, where coal has quietly supported the economies of both states for decades and fuels a shrinking number of power plants in 28 states.

Negotiations that could reopen the two Wyoming mines under new ownership are halted more than two months later. About 600 employees are still in the job. And there is growing doubt about the long-term viability of the coal mines in the region.

"I don't think we'll ever be so naive again," said Worden, 44.

Blackjewel, based in Milton, West Virginia, told his Wyoming staff this week that the mines might be running again soon and to let the company know if they want the job back.

Worden said she felt little security. She is not the only one to question long-standing assumptions about Powder River Basin mines, which produce cleaner burning coal less expensive than mines in other parts of the United States and were not considered at risk.

But with coal in the long-term decline, how the pool can eventually scale down production to a sustainable level has become a big question, said Rob Godby, director of the Center for Energy Economics and Public Policy at the University of Wyoming.

"The irony here – and it's really a cruel irony – is all focused on getting these miners back to work. But the solution to creating a healthy industry is some mines nearby," Godby said.

[19659002] Currently, little seems changed in Gillette, a town of 30,000 in the heart of the pool with rolling grasslands where tattoo shops are plentiful and large, late-model pickup machines that still cruiser the main drag.

However, this year has been particularly stormy. Three of Powder River Basin's nine producers – Westmoreland Coal, Cloud Peak Energy and Blackjewel – have filed for bankruptcy since March. Two others, Arch Coal and Peabody, say they will merge assets in the region.

The turmoil comes as US coal production is down more than 30 percent since it peaked in 2008. Tools pull back aging coal power plants and switch to solar, wind and cheaper and cleaner-burning natural gas to generate electricity despite President Donald Trump's attempts to to support the coal industry.

A decade ago, about half of American electricity came from coal power. Now it's under 30 percent, a shift that heavy equipment operator Rory Wallet saw as tools became less willing to lock in multi-year contracts for Belle Ayr coal.

"The market has changed," Wallet said. "The bankruptcies tie everything together."

Wallet, 40, who followed his father into the mine in 2008, said the recent closures and the loss of $ 80,000 dollars a year surprised him. He has four children, and his wife says working at a restaurant in Gillette is their most important income while waiting for news about the mines.

Blackjewel said on Thursday that it was working on plans to restart the mines as they continued to sell them. However, there were no indications in federal bankruptcy filings that the mines were set to reopen.

"This is a quick and sometimes unpredictable process, and as a result, we do not have answers to all your questions at this time," the company's statement said.

The wallet is looking for a job and lobbying Wyoming lawmakers to fight harder to force Washington State to approve an expansion of port facilities that will allow more coal exports to Asia.

"The ports are going to be a big deal. Asia is going to be a big deal," Wallet said.

But Godby said that the amount of coal that the proposed export terminal could handle would offset only a small fraction of the amount that production has gone down.

The mines in the powder elbow pool employ about 5,000 miners – 20 percent fewer than eight years ago. The impact is even greater because another 8,000 jobs, from teachers to car mechanics, have indirect ties to the coal industry.

Locals cheered as Trump lifted a federal coal contract moratorium, but Worden and Wallet disagree that changing environmental regulations would do much good.

Both say that coal should continue to have a place next to renewable energy.

"It has to be a group effort, not green is on one side and black is on the other," said Worden. "We don't want this community to die."

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Follow Mead Gruver at https://twitter.com/meadgruver


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