Wyoming coal trending upward

POWDER River Basin coal demand should enjoy some increased interest in the second half of the year after an interesting supply and demand scenario over the first portion of the year, a Wyoming Mining Association official said this week.
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Courtesy Wyoming Coal Association

Donna Schmidt

WMA executive director Marion Loomis told Wyoming Public Media he expected the remainder of 2013 to be better than the first half, when demand was up and supply was down.

“Certainly the inventories are down somewhat, and that has led to increased production,” he said of the trend first noted last week by the Energy Information Administration involving utilities’ use of stockpiles instead of purchasing fresh supply.

“We’ve been down most of the year, but the last numbers I’ve seen show us at about the same level as we were last year. So, we’re picking up a little bit of that lost production.”

Loomis said that the continued rise in natural gas prices might also lead to stronger PRB consumption. He specifically pointed to the $US4 per million cubic feet mark, nothing Wyoming coal would continue to be in demand if its competitor commodity remained at that price level.

“Right now it’s less than that, so some of the industry will be hard-pressed to compete,” he told the group.

“But Powder River Basin, Wyoming can still compete at those prices, and I think there will be some increased demand for Wyoming coal in the second half of the year.”

According to federal data, Wyoming coal production from January through June was down about 4.5% year-on-year.

Wyoming has been the top coal producing stats in the US since 1986, and most of the top ten producing US mines are located in the PRB.

According to WMA data, about 40% of America’s coal comes from Wyoming, and Wyoming coal is transported to 34 states.

Most Wyoming coal is sub-bituminous in nature, burning at about 8400 and 8800 British thermal units per pound. It also is clean burning, meeting the US Environmental Protection Agency standard of 1.2 pounds of sulfur dioxide per million Btus.

In 2011, coal’s financial contribution to the state of Wyoming in taxes, royalties and fees was more than $1.2 billion.

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