The nation's largest coal producers are looking to merge mines delivering nearly 60% of Wisconsin coal | Local news
The nation's largest coal producers want to merge two Wyoming mines that delivered more than half of the coal burned in Wisconsin in the power plants, raising questions about the potential impact on taxpayers.
Peabody and Arch Coal last week announced plans to form a joint venture that controls seven mines, including five of the most productive mines in the country. The companies said the move would allow them to cut costs to compete with natural gas and renewables.
The plan's main stone would combine the country's largest mine ̵[ads1]1; Peabody's North Antelope Rochelle mine – with the second largest, The Black Thunder Mine, run by Arch.
The two mines, which share a 7-kilometer estate line in the Powder River basin, last year produced more than 10.4 million tons of coal delivered to Wisconsin power plants, according to the US Energy Information Administration ( EIA).
There are more than 57% of the state's total supply.
Bucking trend, Wisconsin supplies burned more coal in 2017; environmental managers warn against gas investments
What the merger, which is authorized by the Federal Trade Commission, means for Wisconsin tools and their interest payers are uncertain.
Representatives of the largest coal burning tools said the companies are still considering the potential effects.
"At this point it is too early to say what, if any influence this will have," said Brendan Conway, spokesman for We Energies, the state's largest tool, which last year received more than two-thirds of the coal from the two mines.
Arch and Peabody said in a press release that the joint venture would cost $ 120 million a year.
If these savings were to be passed on to customers, it remains to be seen, said Brett Watson, a resource economist studying the coal industry at the University of Alaska Anchorage.
"It is clear to me that they cannot be in a worse negotiating position," he said.
Godby
But if the prices are increased, it will probably come back by pushing tools to burn more gas instead, says Rob Godby, director of the Center for Energy , Economics and Public Policy at the University of Wyoming.
"They would be stupid to hurt their primary customers," Godby said. "Especially when it's not clear how long the golden goose will be around."
Blankman
Scott Blankman, former director of Alliant Energy, now leading the energy and air program for Clean Wisconsin, said the tools could see some of the cost savings, but there is also risk for industrial consolidation.
"Having a concentration in a vendor actually increases the risk of supply disruption. You can get some benefits if you're lucky … but now you're completely tied to a vendor," Blankman said. "There is never a position that businesses will be in."
Tough Times for Coal
The coal industry has beaten over the past decade and despite the fact that White housework, the future doesn't look much brighter.
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"They are facing a really uphill," Watson said.
According to EIA data, US coal production fell from 1.17 billion short tonnes in 2008 to 774 million in 2017 as hydraulic fracking has made natural gas cheap and abundant, while wind and sun have become the cheapest sources of electricity production.
The credit rating company Moodys considers the merger positive for the two companies, but does not expect that it will change the coal's downward sales stretch.
Moody's projects "modest" profits for the strongest mines and "stressed, or even non-existent" margins for the weakest.
Coal production tends to closely track power generation, the primary domestic market.
Money for Nothing: Consumer Groups, Tools That Contradict Who Pays to Close Plants [19659038] About 47,000 megawatts of coal power plants – including a dozen Wisconsin generators – have declined since then 2015 in the United States, according to EIA data, with essentially no new added to the system. More than half of the power plants that are expected to retire this year are coal fired.
Market move
Last year, natural gas coal exceeded the number 1 source of US electricity, and for the first time it was renewable coal in April.
Godby, who studied the potential impact of the Obama Administration's Clean Power Plan (CPP), said falling gas and renewable prices had an equally significant impact.
"The market is gone It was so bad it fast," he said.
The Environment Agency last week investigated the Regular Clean Energy rule, the Trump administration's replacement for the challenging efforts to curb greenhouse gas emissions.
While far weaker than CPP, which was never implemented, ACE is not expected to stop the development of coal-plating rods in Wisconsin.
Utilities say smoothly that they will stick to their carbon reduction plans.
"We see no change in how we're doing business," says Scott Reigstad, spokesman for Alliant Energy, who has pledged to reduce carbon emissions by 80% over the next three decades.
The Long Game [19659026] Blankman said the rule will not change the economy of the Midwestern grid, where the lowest cost generators are called at first to meet the demand.
"They should still have headwinds because they will be more expensive in the market than the sun and wind "I don't believe in the long run, it changes fundamentally."
And the coal industry's problems go beyond gas and renewable energy competition, Watson said. My operators are facing rising costs as coal seams closest to the surface are depleted , and their innovations do not comply with the deeper reserves.
Watson
"These innovations have long won" Watson said. "Around the turn of the millennium, geology began to win. "
