GE Steam Power offers a broad portfolio of technologies and services predominantly for nuclear and coal power plants helping customers deliver reliable power as they transition to a lower carbon future.
President Trump tweeted about the coal industry years before he announced his candidacy for the nations top office. He complained about President Obamas policies and coal plants closing, even though market forces such as natural gas fracking were making coal less and less economically viable. Trump has embraced the coal industry and even appointed an ex-coal lobbyist to head the EPA.
Coal miners may be the hardest working Americans who do a very dangerous job in unhealthy conditions. Unfortunately for them, market forces, along with continued concerns about climate change, have pummeled the industry. Trumps desire and actions to help miners have at best kept the industry from declining further, while not investing in renewable energy, where there is progress, is hampering job growth and negatively impacting the environment.
In an economy with over 129 million people employed by businesses, there are only just over 50,000 coal miners in the U.S. or 0.04% of the total number of people working. While there was a small uptick in coal miners after Trump was elected by a few thousand, the latest jobs report shows that there are fewer coal miners now working vs. three years ago. This compares to over 6.4 million jobs being added in the past three years.
The Dow Jones U.S. Coal Index tracks the coal industry subsector. When Trump was elected in November 2016 the index was around 45 and closed on Friday at 8.57, down approximately 80%. There have been numerous mine closures and bankruptcies during his time in office, with little positive outlook for the industry.
The EIA or Energy Information Administration estimates that coal exports were less than 14% of total coal production in 2019. Thermal coal exports, used for power plants, was less than 6% of total production, while metallurgical coal exports, used for steelmaking, was 8%.
There is also a downward trend in coal exports this year as reported by S&P Global Market Intelligence by the Institute for Energy Economics and Financial Analysis. The data shows that through February 22 exports via the top five coal-export ports have declined from 13% to 69% year over year.
For the second month over the past year, renewable energy has generated more electricity than coal in the U.S. While the numbers are still being confirmed, having this occur during the winter season when coal generated electricity is in high demand highlights the continued decline in coal and the slow but gradual increase in renewables.
Even in Oklahoma, wind provided over 40% of the states electricity generation last year. This is an increase from 33% in 2017 and 36% in 2018. It has also been estimated that over $20 billion has been invested in renewable projects in the state, which I suspect is multiples of what has been invested in the entire U.S. coal industry over the same timeframe.
In Germany the Fraunhofer Institute for Solar Energy Systems estimates that, renewable energy sources provided a record 61.2% of Germanys net public electricity generation in February and that wind energy provided nearly half of the countrys electricity during the month. It added, Throughout the month, Germanys renewable energy sector regularly provided around 60% or above of the countrys electricity production including over a dozen days around or above 70%. Wind power generated almost 46% of the countrys total electricity for the month.
I provide independent research of technology companies and was previously one of two analysts that determined the technology holdings for Atlantic Trust (Invesco's high net worth group), a firm with $15 billion under management. Before joining Atlantic Trust I was the Internet Security Software analyst for Smith Barney (where I authored the most comprehensive industry report Internet Security Software: The Ultimate Internet Infrastructure) and an Enterprise Server Hardware analyst at Salomon Brothers. Prior to becoming an equity analyst, I spent 16 years at IBM in a variety of sales and manufacturing positions. I have a B.S. in Industrial Engineering from Stanford University and a Postgraduate Diploma in Economics from the University of Sussex, England.
I provide independent research of technology companies and was previously one of two analysts that determined the technology holdings for Atlantic Trust (Invesco's high net worth group), a firm with $15 billion under management. Before joining Atlantic Trust I was the Internet Security Software analyst for Smith Barney (where I authored the most comprehensive industry report Internet Security Software: The Ultimate Internet Infrastructure) and an Enterprise Server Hardware analyst at Salomon Brothers. Prior to becoming an equity analyst, I spent 16 years at IBM in a variety of sales and manufacturing positions. I have a B.S. in Industrial Engineering from Stanford University and a Postgraduate Diploma in Economics from the University of Sussex, England.
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Although Pittsburgh and southwest Pennsylvania is quite hilly, we are fortunate enough to have a number of fairly flat trails to go biking. Many of these trails are found on former train lines (rail trails), which thanks to their restricted grade makes for prime biking conditions.
In this one, we wanted to share a few of our favorite spots to bike in and around the city. So whether you're simply wanting to take a quick ride around the North Shore River Trail, ride the GAP, or go out for a few miles on a rail trail, this one is for you!
The Panhandle Trail is a nearly 30-mile long trail that runs from Walkers Mill in Collier Township, PA, to Wierton, WV. This converted rail trail offers a beautiful ride through many boroughs (closer to the city) and countryside (closer to West Virginia) with a small, but nearly consistent grade of about 1% which is most noticeable on the return from West Virginia.
Riders on this trail should note that the sections of the trail in Allegheny County and West Virginia are crushed limestone, while the ~20-mile stretch through Washington County to the border is paved. As such, when biking this one we often like to start in Oakdale (mostly to end at Helicon Brewery right on the trail) and bike towards West Virginia. In doing so you only have about two miles on crushed limestone before the easier-to-navigate paved section begins.
For those who are looking for infrastructure for snacks and water, note that the boroughs around Oakdale have more options than those found closer to West Virginia. As such, you should stock up with everything you need for the day if heading west on this trail.
The Montour Trail runs just over 60-miles from Moon Township to Clairton and features a mix of paved and limestone paths that covers a varied path that includes a mix of bridges, former rail tunnels, and more. On the western side of the trail in McDonald, the Montour train links up with the Panhandle Trail. On the eastern side at Clairton, a ~5-mile road ride will get you to the Great Allegheny Passage.
It should be noted that sections of this trail between Bethel Park and Clairton may still be under construction and require some road connections, so those who are wanting a purely dedicated bike trail may do well sticking closer to the western half of the trail. (Although it is worth noting you'll likely find more tunnels in the stretch between McDonald and Bethel Park!) Likewise, we noted more small potholes and fill-in patches on this trail over others in this guide, so you may need to pay just a bit closer attention to where you bike here.
The Butler-Freeport Community Trail is the only rail trail in this guide that runs north to south. This presents a unique scenario where a fair amount of the trail is likely shaded outside of the peak mid-day sun.
What we love most about this 20-mile ride (one-way) is that the grade is quite gradual- no more than 1% at any given time and only over short distances. As such, apart from the crushed limestone trail (and possibly some wet parts after rain), this one is pretty easy to ride for all skill levels.
For those who like a flowing creek, trees, and rock formations, sticking to the trails near Freeport is for you. If you like wide-open spaces, rolling hills, and farmland, the trail near Butler is the place to be. If you do it all, you'll have a wonderful, gradual change of scenery over the entire ride.
It is worth noting that despite the frequent parking areas and cross-streets found on this trail, only one support business is found on the path to sell food, snacks, and more. This is the Derailleur Bike Shop Cafe located about 5-miles south of the Butler trailhead.
The North Shore River Trail is one of our favorites in the city as it offers some fairly stunning views. Along the path you can see great views of the Allegheny River, the Three Sisters Bridges, PNC Park, Pittsburgh's skyline, Heinz Field, the Mr. Rogers Statue, the Carnegie Science Center and the USS Requin, the Three Rivers Casino, and more.
The trail itself runs approximately 9-miles from just before the McKees Rocks Bridge to the riverfront in Millvale, PA and the city's master plan for bike trials has this one set to expand in the near future.
For those who want a bit of a challenge, you add on 6-miles to this one by turning it into a loop once you get to the end of the trail at the McKees Rocks Bridge! To do this, you'll need to do the following (note: some segments of this loop are on surface roads without dedicated bike lanes):
At the end of the trail, turn right out onto Westhall Street. At the first intersection, turn right onto Beaver Avenue and then immediately turn left onto Eckert Street. One block down on Eckert Street here will be a fork in the road by Don's Diner. Veer left to turn onto McClure Avenue and take that approximately 750 feet. Another fork in the road will appear at Young Brothers Bar and you will veer right to continue on Woods Run Avenue.
Woods Run Avenue is approximately 0.5 miles long and as an elevation gain of about 450 feet, so you should expect a fairly steep climb over its distance. Near the top, this one turns into Mairdale Avenue and connects up to Perrysville Avenue at the top of the hill. At the light with Perrysville turn right and it'll be a coast downhill all the way to Federal Street*.
*Note: Perrysville Avenue connects up to Federal Street twice. Continue on Perrysville until the second meetup- it'll be a dead end where you can only turn left (uphill) or right (downhill). Turn right and coast your way back to PNC Park.
In this one, we have to give a nod to what is perhaps the longest bike trail in our region. The Great Allegheny Passage connects downtown Pittsburgh (from the Point) to Cumberland, Maryland, and is 150-miles in length- great for a multi-day ride!
Going even further than this, while in Cumberland, the GAP links up to the C&O Canal Trail which continues all the way to Washington DC. Together they offer a combined 334.5 mile ride which most riders will split up over a week or so one way.
While nearly 300 miles of the trail is fairly flat, you do have to climb over one mountain on the Great Allegheny Passage segment. The direction you travel here will surely make a difference as going towards Washington you climb 1,500 feet over 50 miles, while going towards Pittsburgh you climb nearly 2,000 feet in 25 miles! Suffice it to say, there is a reason why most riders prefer to take this trip from Pittsburgh to Washington and not the other way around.
Infrastructure along the Gap and C&O Canal Trail is fairly robust as you pass through many towns which offer services, bed and breakfasts and more. Third-party companies even offer fully-booked tours, return transportation, and luggage transfers for this one so all levels of bikers can be accommodated (although to be fair, you really should be prepared for multiple 60-mile days so it is best for some long-distance training).
For our next trails, we're heading a bit further out of the city. First up is the Westmoreland Heritage Trail which runs about 17 miles in total and is split between two sections- roughly eight miles between Delmont and Saltsburg and nine miles between Export and Trafford.
Like other trails in this guide this former rail trail is constructed mostly of crushed limestone, is relatively flat (although you'll notice a fairly consistent grade going away from Saltsburg and away from Trafford), and will have you out in the beauty of nature within moments of hitting the trail.
For those who like to be alone amongst the trees, the Delmont to Saltsburg segment is to you. At roughly the halfway point you'll find a pig farm, and on the Saltsburg side you'll find a few rivers and creeks and a connecting point to the West Penn Trail. For those who want a bit more, the Export to Trafford section has a good chunk of the trail passing Turtle Creek and has some really stunning views! (For this, you'll need to go a few miles outside of Export to really start getting the scenery, but it starts almost immediately from the Trafford end.)
The West Penn Trail is a 17-mile partial rail-trail that connects Saltsburg to Blairsville, PA. While this one has a connection point with the Westmoreland Heritage Trail (above), the trailhead for this one begins a few miles to the west such that starting at the connector would only be about 13-miles one-way in total.
This trail is, for lack of a better word, rough. It has conditions that run from paved stretches all the way to large gravel, fine gravel, and everything in between. The hardest part of this trail is the middle five miles which are no longer a rail-trail but instead go up and over several hills and is something mountain bikers would likely find more enjoyable over leisurely bikers. We had to walk ours up steep grades about ten times in our round-trip outing.
Still, this one offers stellar views of the Conemaugh River (especially the five miles nearest Blairsville) and, for those who tackle the middle segment, some pretty impressive views of Conemaugh Dam. That being said, this one may be best for a partial ride and a drive over to the dam versus tackling the whole thing.
If you find yourself in need of a bike trail northeast of the city, you may want to head to Indiana, PA, to check out the ~10-mile Hoodlebug Trail. This converted rail trail runs north-south from Indiana to Black Lick, PA, and connects up to the Ghost Town Trail at its southern terminus.
The scenery here is constantly changing between little boroughs, industrial areas, rolling hills, and crossings of several creeks and rivers. The trail is mostly crushed limestone and relatively well maintained; however, the last mile or so near Black Lick is extremely rocky by bike trail standards. We'd also say there is a relatively consistent upward grade going towards Indiana, but these are often slightly hilly segments such that you take a quick climb followed up by a nice drop to gain some speed.
The Ghost Town Trail starts in Black Lick, PA, just at the southern terminus of the Hoodlebug (above). But instead of running north-to-south, this one runs approximately 36 miles east (with 10 more miles on an extension trail that breaks off).
During our first visit to this one, we rode 25-miles out to Nanty Glo and were impressed with the wide array of sights you can see from gorgeous creeks, old coal deposits, a historic iron furnace, beautiful little boroughs, and so much more. Add in the fact that the ride was a steady 1% up for the first 20 miles (and a bit more intense 2-3% up for the next few), and the trail made for an easier return that allowed us to set a new distance record all the same.
When you think of Moraine State Park, odds are good you think of water-based activities thanks to the beautiful Lake Arthur that prominently resides within the park. But this gorgeous park is also home to a 7-mile (one-way) bike trail on the north shore that is simply a fun one to ride.
The reason for this is that the paved bike trail has frequent tight bends and small bunny hills (10-20 feet) that you pass through. If you catch enough speed on the first hill, you can use the momentum to take you to the top of the next (for many of them, at least), and makes for a really fun ride. Throw in beautiful lake views and other vistas with surrounding nature, and you have quite the fun outing at the park.
You might want to check out the section of the abandoned turnpike, out past Breezewood. https://en.wikipedia.org/wiki/Abandoned_Pennsylvania_Turnpike FYI you will need to wear headlamps to navigate thru the 2 tunnels.
The Great Allegheny Passage, in particular the section between Connellsville thru Ohiopyle to Confluence, is the nicest piece of bike trail within an hour drive of Pittsburgh. (Ghost Town Trail has some pretty stretches, but its not as unspoiled as the GAP).
Exposure to respirable crystalline silica (RCS) can cause serious and irreparable negative health effects, including silicosis and lung cancer. Workers in coal mines have the potential of being exposed to RCS found in dust generated by various mining processes. The silica content of respirable dust in one single mine can vary substantially over both time and location. The current monitoring approach for RCS relies on the use of traditional air sampling followed by laboratory analysis. Results generated using this approach are generally not available for several days to several weeks after sampling, and this delay prevents timely and effective intervention if needed. An alternate analytical method is needed to reduce the time required to quantify the RCS exposure of mine workers. The National Institute for Occupational Safety and Health (NIOSH) has developed a new method using commercially available portable infrared spectrometers for measuring RCS at the end of the sampling shift. This paper will describe the application of the new field-based RCS analytical process for coal mines, including the use of the new method with the existing Coal Mine Dust Personal Sampler Unit. In a case study conducted by NIOSH with a coal mine operator in West Virginia, field-based RCS analysis was completed at a mine site to evaluate the new technique. The RCS analysis results obtained by the field-based method in this case study showed sufficiently strong correlation with results obtained by the MSHA standard laboratory analysis method to allow the mine operator to use the field-based method for evaluating process improvements.
Kachuri L, Villeneuve PJ, Parent M-, Johnson KC, Harris SA (2013) Occupational exposure to crystalline silica and the risk of lung cancer in Canadian men. Int J Cancer 135(1):138148. https://doi.org/10.1002/ijc.28629
Laney AS, Petsonk EL, Attfield MD (2010) Pneumoconiosis among underground bituminous coal miners in the United States: is silicosis becoming more frequent? Occup Environ Med 67(10):652656. https://doi.org/10.1136/oem.2009.047126
Cohen RA, Petsonk EL, Rose C, Young B, Regier M, Najmuddin A, Abraham JL, Churg A, Green FHY (2015) Lung pathology in U.S. coal workers with rapidly progressive pneumoconiosis implicates silica and silicates. Am J Respir Crit Care Med 193(6):673680. https://doi.org/10.1164/rccm.201505-1014OC
Antao VCS, Petsonk E, Sokolow L, Wolfe A, Pinheiro G, Hale J, Attfield M (2005) Rapidly progressive coal workers' pneumoconiosis in the United States: geographic clustering and other factors. Occup Environ Med 62(10):670674. https://doi.org/10.1136/oem.2004.019679
Blackley DJ, Crum JB, Halldin CN, Storey E, Laney AS (2016) Resurgence of progressive massive fibrosis in coal miners Eastern Kentucky, 2016. Morb Mortal Wkly Rpt 65:13851389. https://doi.org/10.15585/mmwr.mm6549a1
Mazurek JM, Wood J, Blackley DJ, Weissman DN (2018) Coal workers pneumoconiosisattributable years of potential life lost to life expectancy and potential life lost before age 65 years United States, 19992016. Morb Mortal Wkly Rep 67(30):819824. https://doi.org/10.15585/mmwr.mm6730a3
Blackley DJ, Halldin CN, Laney AS (2018) Continued increase in prevalence of coal workers pneumoconiosis in the United States, 19702017. Am J Public Health 108(9):12201222. https://doi.org/10.2105/AJPH.2018.304517
Bang KM, Mazurek JM, Wood JM, White GE, Hendricks SA, Weston A (2015) Silicosis mortality trends and new exposures to respirable crystalline silica United States, 20012010. Morb Mortal Wkly Rpt 64(5):117120
Schatzel SJ (2009) Identifying sources of respirable quartz and silica dust in underground coal mines in Southern West Virginia, Western Virginia, and Eastern Kentucky. Int J Coal Geol 78(2):110118. https://doi.org/10.1016/j.coal.2009.01.003
Johann-Essex V, Keles C, Rezaee M, Scaggs-Witte M, Sarver E (2017) Respirable coal mine dust characteristics in samples collected in central and northern Appalachia. Int J Coal Geol 182:8593. https://doi.org/10.1016/j.coal.2017.09.010
Colinet J, Listak JM, Organiscak JA, Rider JP, Wolfe AL (2010) Best practices for dust control in coal mining. Information circular (National Institute for Occupational Safety and Health) ; 9517 National Institute for Occupational Safety and Health, Office of Mine Safety and Health Research.
Miller AL, Drake PL, Murphy NC, Noll JD, Volkwein JC (2012) Evaluating portable infrared spectrometers for measuring the silica content of coal dust. J Environ Monit 14(1):4855. https://doi.org/10.1039/c1em10678c
Miller AL, Drake PL, Murphy NC, Cauda EG, LeBouf RF, Markevicius G (2013) Deposition uniformity of coal dust on filters and its effect on the accuracy of FTIR analyses for silica. Aerosol Sci Technol 47(7):724733. https://doi.org/10.1080/02786826.2013.787157
Cauda E, Miller A, Drake P (2016) Promoting early exposure monitoring for respirable crystalline silica: taking the laboratory to the mine site. J Occup Environ Hyg 13(3):D39D45. https://doi.org/10.1080/15459624.2015.1116691
Cauda E, Joy G, Miller A, Mischler S (2013) Analysis of the silica percent in airborne respirable mine dust samples from U.S. operations. In: Harper M, Lee T (eds) Silica and Associated Respirable Mineral Particles. ASTM International, Atlanta, GA, pp 1227. https://doi.org/10.1520/STP 0
Many thanks to William Joe Archer and Elizabeth L. Ashley for their work in support of this project. Thanks to Elaine Rubinstein, Don Tuchman, and Jenise M. Brown for their helpful comments on the manuscript. A special thanks also to the safety team at Blackhawk Mining, LLC, in Charleston, WV, for their enthusiastic contributions to the project: Joey Athey, Michael Balser, Joshua Bell, Ricky Estepp, Derrick McMillion, Andrew Ramey, Mark Rhodes, and Chad Terry.
The findings and conclusions in this report are those of the author(s) and do not necessarily represent the official position of the National Institute for Occupational Safety and Health, Centers for Disease Control and Prevention. Mention of any company or product does not constitute endorsement by NIOSH, CDC.
Pampena, J.D., Cauda, E.G., Chubb, L.G. et al. Use of the Field-Based Silica Monitoring Technique in a Coal Mine: A Case Study. Mining, Metallurgy & Exploration 37, 717726 (2020). https://doi.org/10.1007/s42461-019-00161-0
"I usually walk to work and a lot of the trains are coal trains, at least a couple of times a week," said Hughes. "There are days when it is really windy that it does look like some of the coal blows out, but I stand pretty far back from the track."
About 350 miles away, just north of the Montana-Wyoming border, operators at Cloud Peak Energy's Spring Creek Mine near Decker, Mont., are conducting a relatively new protocol, spraying a solvent on coal as it is loaded into each rail car leaving the mine.
Environmental groups, including the Sierra Club, argue that applying surfactant to loads of coal transported in open rail cars doesn't ensure that no coal and dust will escape from the uncovered cars. Rather, they argue, dust and even chunks of treated coal blow off rail cars and land in waterways and along the tracks.
The Sierra Club is the lead plaintiff in a lawsuit filed last summer against Burlington Northern Santa Fe, claiming that as the owner and operator of rail cars, the company is responsible for coal, coal dust and other pollutants from open rail cars loaded with coal that has made its way into waterways in Washington along the route from the Powder River Basin to the West Coast. The suit claims the railroad's operation violates the Clean Water Act.
The railway company argues the suit is only the latest attempt by the plaintiffs to stop the use of coal through litigation and legislation. The company filed to have the suit dismissed on jurisdictional issues. A status hearing on the suit is set for Dec. 10.
Outside of court, the mine and the railway say the newer surfactant application process is working, reducing the amount of coal dust that escapes by 85%, when compared with loads not treated by surfactants.
Coal dust loss is an issue where the cars are loaded, at mines, and becomes much less of a problem the farther the loaded cars travel, according to the rail company. As loaded rail cars travel, coal dust particles shift, or sift, their way to the bottom of the rail car as the car is shaken and jostled as it comes down the tracks, according to a company document, "Coal Dust Facts."
Groups such as the Sierra Club insist that is not the case. Their lawsuit says that "coal pollutant discharges occur despite the use of topping agents" and that the "topping agents, surfactants and suppressants themselves are pollutants."
"Our members are reporting seeing evidence of coal discharge where coal is shipped," Yarnell Loarie said. "I think the people in Washington are more vocal and have a heightened awareness of it because of the prospect of additional coal trains coming through the state."
SSA Marine is proposing the Gateway Pacific Terminal in Cherry Point, Wash., and Millennium Bulk Terminals in Longview, Wash. Coal mining companies, including Cloud Peak Energy, have contracts to ship from those facilities if they are built. Both facilities are the target of protests, including from the Lummi Indian Tribe. The Lummi Nation Reservation is near Cherry Point, Wash.
Right now, Powder River Basin coal sold to export markets in Asia typically about a quarter of production for Spring Creek Mine is shipped by train through Washington state to Canada to export facilities there. Most of the other three-quarters of Spring Creek's production is sold to domestic coal plants.
Cloud Peak Energy, which owns Spring Creek, exports now from Westshore Terminals facility in British Columbia, about 20 miles south of downtown Vancouver, just north of the U.S. border. It's the largest coal export facility in Canada.
The coal dust issue was raised by BNSF Railway in 2005 over concerns about track maintenance near coal mine sites. Coal dust deposits on BNSF's lines in and near the Powder River Basin required costly accelerated maintenance, the railroad company said.
BNSF, along with the Union Pacific Railroad Co., conducted track-side air monitoring tests of open rail cars loaded with coal and compared those with the results with air tests along tracks when the coal in the rail cars was treated with surfactant. The results of the 2010 "Super Trial" showed reductions in the quantity of coal dust detection of 75 percent to 93 percent.
Since October 2011, BNSF has required coal shippers to load coal in a low profile, a bread loaf shape, and apply one of five approved topper agents, the surfactant. Wallace said the approved topping agents are nontoxic and nonhazardous.
The loading operation is entirely mechanical and controlled by computers, with the operator stationed inside a control room that is about level with the top of passing rail cars. Coal is poured into the cars from above and a sprayer applies the surfactant as the coal chute drags across the top of the load to create the required "loaf" profile.
About 70 miles northwest of the mine at Crow Agency on the Crow Indian Reservation, trains loaded with Power River Basin coal roll through the town daily. The tracks bisect the town, with a HUD housing project where several generations often live, overcrowded, in small, run-down homes designed for families of four and a shuttered carpet mill on the west side and the tribal offices, Little Big Horn College and the largest building in town, the Indian Health Services hospital and clinic, on the east side.
ST. LOUIS, April 22, 2021 /PRNewswire/ -- Arch Resources, Inc. (NYSE: ARCH) today reported a net loss of $6.0 million, or $0.40 per diluted share, in the first quarter of 2021, compared with a net loss of $25.3 million, or $1.67 per diluted share, in the prior-year period. Arch had adjusted earnings before interest, taxes, depreciation, depletion, amortization, accretion on asset retirement obligations (ARO), and non-operating expenses ("adjusted EBITDA")  of $30.9 million in the first quarter of 2021, which included a $0.5 million non-cash mark-to-market loss associated with the company's coal-hedging activities. This compares to $12.9 million of adjusted EBITDA in the first quarter of 2020, which included a $0.7 million non-cash mark-to-market loss associated with the company's coal-hedging activities. Revenues totaled $357.5 million for the three months ended March 31, 2021, versus $405.2 million in the prior-year quarter.
"The Arch team maintained its world-class execution in the first quarter of 2021, once again delivering operational excellence in the key areas of cost control, safety and environmental stewardship," said Paul A. Lang, Arch's chief executive officer. "Notably, our performance improved steadily as the quarter progressed, in lockstep with the expanding availability of the COVID-19 vaccine and declining rates of infection at our operations. We expect to continue our positive operational and financial momentum in the second quarter, and to achieve a significant step-change in our overall performance in the third quarter with the startup of the Leer South longwall. Coupled with our intensified focus on long-term reclamation activities at our legacy thermal mines, Arch is extremely well-positioned to complete our strategic transformation into a pure play metallurgical coal producer in an accelerated fashion."
During the first quarter, Arch maintained its intense focus and exemplary performance across a wide range of environmental, social and governance (ESG) metrics. Arch's subsidiary operations achieved a lost-time incident rate of 0.58 per 200,000 employee-hours worked, which was nearly 40 percent better than Arch's industry-leading 2020 average. Arch also achieved a perfect score in both regulatory and water quality compliance. In addition, Arch reported continuing reductions in its Scope 1 and Scope 2 GHG emissions, which have been reduced by 55 percent since 2013, due in large part to the company's strategic shift towards higher-value but lower-volume metallurgical products.
With its strategic shift towards metallurgical products which are an essential input in the production of new steel Arch has realigned its value proposition to reflect the global economy's intensifying focus on de-carbonization. Arch believes that a significant amount of new steel will be required in a de-carbonizing world, given steel's importance in urbanization, infrastructure replacement and the construction of essential de-carbonization tools such as mass transit systems, wind turbines and electric vehicles.
"The Leer South team continues to hit milestones, on time and on budget, as they prepare for the third quarter startup of the longwall," said John T. Drexler, Arch's chief operating officer. "I'm pleased to report that all 212 longwall shields are now on site, development of the first longwall panel is nearing completion, and work on the underground setup room for the longwall mining system is well under way. The entire operations and marketing team is energized and ready for the rapidly approaching startup."
During the first quarter, Arch invested a total of $60 million at Leer South and has now expended a total of $342 million on the project net of the previously announced insurance recovery associated with the lost shields at Mountain Laurel. As previously indicated, Arch expects total capital spending on the project to come in at the high end of the original guidance range of $360 million to $390 million.
With the addition of Leer South, Arch expects to expand its High-Vol A metallurgical output by an incremental 3 million tons annually; enhance its already advantageous position on the global cost curve; strengthen its coking coal profit margins across a wide range of market conditions; and cement its position as the leading supplier of High-Vol A coking coal globally.
During the first quarter, Arch made meaningful progress on its dual objectives of generating cash from its legacy thermal assets while driving forward with an accelerated reclamation plan at its Powder River Basin operations. The thermal segment achieved solid margins despite less-than-ratable volume levels, while expending little capital. Further, Arch completed work totaling $8 million towards the reduction in Coal Creek's asset retirement obligation, and an additional $2 million towards the reduction in Black Thunder's ARO.
"We are methodically harvesting value and cash from our legacy thermal assets, while working down our long-term closure obligations in a systematic and measured way," Lang said. "The team's objective is clear as we drive forward in completing the company's strategic transition towards steel and metallurgical coal markets, while remaining committed to our environmental stewardship across our operations."
As previously announced, Arch plans to discontinue production at the Coal Creek mine by the end of 2021, and to reduce the mine's total ARO by an estimated $40 million, or approximately 80 percent, by mid-2022.
"After overcoming virus-related challenges early in the quarter, our core metallurgical segment finished strong and turned in solid results in the first quarter," Drexler said. "Despite less-than-ratable production and shipping rates, we achieved coking coal costs of less than $60 per ton and maintained our durable position as one of the U.S. metallurgical coal industry's lowest cost operators. Once again, the Leer mine led the way, delivering costs in the $40-per-ton range, further underscoring the great potential of its companion mine, Leer South."
With the rapidly diminishing operational and economic impacts of the pandemic and the seasonal resumption of shipping on the Great Lakes, Arch expects metallurgical sales volumes to increase by 15 percent in the second quarter, and to increase still further in the year's back half, buoyed by the startup of Leer South.
Arch expects the second quarter results of its legacy thermal portfolio to be generally comparable to the segment's first quarter performance, as projected increases in export volumes from the West Elk mine in Colorado are expected to be offset by weak domestic shipments due to still-inflated power plant stockpile levels and typical power demand softness in the spring months.
As previously disclosed, Arch issued $45.0 million in tax-exempt bonds in early March, at a highly competitive interest rate of 4.125 percent. The proceeds are being used to fund the ongoing construction of the preparation plant and other waste management facilities at Leer South. At the end of the quarter, Arch had approximately $16 million of restricted cash that will become available for use as qualifying work is completed.
"With the completion of the second phase of this tax-exempt offering, Arch is poised to complete the Leer South buildout while maintaining a healthy and prudent level of liquidity," said Matthew C. Giljum, Arch's chief financial officer. "Following the ramp-up of the new longwall, we intend to prioritize debt reduction and further fortify our already sound balance sheet, in advance of ultimately resuming a measured capital return program."
U.S. East Coast metallurgical markets remain solidly supported, as the resurgence in global steel production has buoyed coking coal demand while acting to counterbalance the adverse effects of politically driven Chinese import restrictions. Steel output appears on course to recover to pre-pandemic levels as soon as this year; steel prices in all major markets remain at historic highs; steel mill capacity factors have rebounded to healthy levels; and key importing countries, such as India, are returning to the seaborne market to satisfy pent-up coking coal needs.
U.S. East Coast prompt metallurgical price assessments continue to enjoy a $30 to $50 per ton premium compared to premium Australian coals, and Arch continues to see strong interest in its yet-to-be-committed coking coal volumes. In addition, while Chinese import restrictions on Australian metallurgical coals have acted to dampen aggregate seaborne coking coal demand, Arch continues to explore opportunities both strategic and opportunistic to increase its direct metallurgical sales into China, which has sourced only modest volumes from the U.S. in the past.
During the quarter, Arch committed an additional 500,000 tons of metallurgical coal for delivery in 2021, bringing total commitments for the current year to 6.8 million tons and leaving just 1 million tons still to sell at the mid-point of guidance.
"We remain sharply focused on executing on our clear and actionable strategy for long-term growth and value creation," Lang said. "Supported by an accelerated global recovery, the advancement of infrastructure-driven stimulus efforts, and the build-out of a new, low-carbon economy, steel demand remains robust and poised to continue its upward trajectory. With our low-cost metallurgical assets, premium High-Vol A product slate, industry-leading ESG performance, top-tier marketing and logistics expertise and best-in-class growth project, we believe Arch is well-positioned to drive long-term value creation for our shareholders."
Arch Resources is a premier producer of high-quality metallurgical products for the global steel industry. The company operates large, modern and highly efficient mines that consistently set the industry standard for both mine safety and environmental stewardship. Arch Resources from time to time utilizes its website www.archrsc.com as a channel of distribution for material company information. To learn more about us and our premium metallurgical products, go to www.archrsc.com.
Forward-Looking Statements: This press release contains "forward-looking statements" that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "should," "appears," "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties arise from the COVID-19 pandemic, including its adverse effects on businesses, economies, and financial markets worldwide; from the impact of COVID-19 on efficiency, costs and production; from changes in the demand for our coal by the steel production and electricity generation industries; from our ability to access the capital markets on acceptable terms and conditions; from policy, legislation and regulations relating to the Clean Air Act, greenhouse gas emissions, incentives for alternative energy sources, and other environmental initiatives; from competition within our industry and with producers of competing energy sources; from our ability to successfully acquire or develop coal reserves, including the development of our Leer South mine; from operational, geological, permit, labor, transportation, and weather-related factors; from the effects of foreign and domestic trade policies, actions or disputes; from fluctuations in the amount of cash we generate from operations, which could impact, among other things, our ability to service our outstanding indebtedness and fund capital expenditures; from our ability to successfully integrate the operations that we acquire; from our ability to generate significant revenue to make payments required by, and to comply with restrictions related to, our indebtedness, including our ability to repurchase our convertible notes; from additional demands for credit support by third parties; from the loss of, or significant reduction in, purchases by our largest customers; from the development of future technology to replace coal with hydrogen in the steelmaking process; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. For a description of some of the risks and uncertainties that may affect our future results, you should see the risk factors described from time to time in the reports we file with the Securities and Exchange Commission.
Non-GAAP Segment coal sales per ton sold is calculated as segment coal sales revenues divided by segment tons sold. Segment coal sales revenues are adjusted for transportation costs, and may be adjusted for other items that, due to generally accepted accounting principles, are classified in "other income" on the consolidated statements of operations, but relate to price protection on the sale of coal. Segment coal sales per ton sold is not a measure of financial performance in accordance with generally accepted accounting principles. We believe segment coal sales per ton sold provides useful information to investors as it better reflects our revenue for the quality of coal sold and our operating results by including all income from coal sales. The adjustments made to arrive at these measures are significant in understanding and assessing our financial condition. Therefore, segment coal sales revenues should not be considered in isolation, nor as an alternative to coal sales revenues under generally accepted accounting principles.
Non-GAAP Segment cash cost per ton sold is calculated as segment cash cost of coal sales divided by segment tons sold. Segment cash cost of coal sales is adjusted for transportation costs, and may be adjusted for other items that, due to generally accepted accounting principles, are classified in "other income" on the consolidated statements of operations, but relate directly to the costs incurred to produce coal. Segment cash cost per ton sold is not a measure of financial performance in accordance with generally accepted accounting principles. We believe segment cash cost per ton sold better reflects our controllable costs and our operating results by including all costs incurred to produce coal. The adjustments made to arrive at these measures are significant in understanding and assessing our financial condition. Therefore, segment cash cost of coal sales should not be considered in isolation, nor as an alternative to cost of sales under generally accepted accounting principles.
Adjusted EBITDA is defined as net loss attributable to the Company before the effect of net interest expense, income taxes, depreciation, depletion and amortization, accretion on asset retirement obligations and nonoperating expenses. Adjusted EBITDA may also be adjusted for items that may not reflect the trend of future results by excluding transactions that are not indicative of the Company's core operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded from Adjusted EBITDA are significant in understanding and assessing our financial condition. Therefore, Adjusted EBITDA should not be considered in isolation, nor as an alternative to net loss, loss from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under generally accepted accounting principles. The Company uses adjusted EBITDA to measure the operating performance of its segments and allocate resources to the segments. Furthermore, analogous measures are used by industry analysts and investors to evaluate our operating performance. Investors should be aware that our presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The table below shows how we calculate Adjusted EBITDA.
As one of the most serious dynamic disasters in underground coal mining, coalgas outburst (CGO) leads to very high casualties and economic losses. To research the dynamic effects of disasters and further understand the mechanism of CGO, a large-scale physical simulation test system for coal mine dynamic disasters was used to conduct experiments. The results of this research indicate that there is an obvious choking phenomenon when the pressure drops in coal seams; the direction in which the pressure drop zone extends is consistent with the CGO cavern under the action of the geo-stress. The patterns of the two-phase flow of a CGO can be classified into three types: spurting flow, sparse flow and dense flow. There is a significant secondary acceleration process during the motion of pulverized coal in the roadway. The deposition characteristics of CGO coal exhibit a normal distribution in the roadway. In addition, the sedimentation of CGO coal has a good correlation with its particle size. In the initial stage of the CGO, the flow pattern in the roadway is dominated by weak disturbances, which are then superimposed as strong shock waves in the middle of the roadway. Based on the experimental results, a protean contraction and expansion flow model that contains a key structure for outbursts is proposed, and this model can properly describe the dynamic effects of the CGO based on fluid flow patterns.
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We gratefully acknowledge the financial support from the National Science and Technology Major Project of China (Grant No. 2016ZX05044-002) and the National Natural Science Foundation of China (Grants No. 51874055).
Zhou, B., Xu, J., Peng, S. et al. Experimental Analysis of the Dynamic Effects of CoalGas Outburst and a Protean Contraction and Expansion Flow Model. Nat Resour Res 29, 16171637 (2020). https://doi.org/10.1007/s11053-019-09552-y
"We've ended the war on clean beautiful coal. And we're putting our miners back to work," he said. "Last week a brand new coal mine just opened in the state of Pennsylvania. First time in decades. Decades. We've reversed it. And 33,000 mining jobs have been added since my inauguration."
And it is true that Labor Department data shows an increase of 32,600 jobs in the "mining" category so far this year. But that category includes a variety of types of jobs, including many in oil and gas extraction. Coal mining added 1,000 jobs.
Soon after the election, weeks before he took office, Trump got a lot of attention for claiming he saved 1,100 jobs at a Carrier furnace plant in Indiana that were headed Mexico. In fact, 300 of those jobs were always slated to stay in Indianapolis, so it was 800 jobs that stayed in the U.S.
And Carrier has said publicly that some of those 800 saved jobs would eventually be eliminated by automation. But well before that happens, another 600 Carrier jobs are still moving to Mexico. About half of those layoffs will be in July, while the rest will come by Christmas.
In January, before he was inaugurated, Trump took credit for bringing automaker jobs back to the United States from Mexico after Ford (F) announced it was scrapping plans for a new plant in Mexico to build small cars.
But Ford is still moving all of its small car production outside the United States. Why? To save money, and to free up U.S. factory space to build more expensive, more popular vehicles. And just this week, Ford said it would move production of the Ford Focus, which had been slated to move to Mexico, to a plant in China to save even more money.
On June 1 he claimed that there had been "more than 1 million private sector jobs" created since he took office. His chief economic adviser Gary Cohn explained he was using an estimate from payroll service ADP, which said 1.2 million jobs were added from January through May.
But that figure is questionable for a couple of reasons. First, it includes January, when President Obama was in office for most of the month. Without January the number of jobs added slips to under 1 million.
In addition, the ADP report is markedly different from the official numbers issued by Trump's own Labor Department. The department's latest data, reported June 2, shows that about 600,000 jobs were added from February through May. Trump had taken credit for 600,000 new jobs back in April -- so that claim finally came true.
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A Chinese bituminous coal was crushed in a jaw crusher and ground to micrometer size in a planetary ball mill. Three laboratory standard sieves, with a sieve size of 63, 100, and 200m, respectively, were used to obtain three coal fractions with different average diameter. The effect of particle size on the proximate composition and combustion properties of these samples was studied by proximate analysis, thermogravimetry (TG), differential thermogravimetry (DTG), and differential scanning calorimetry (DSC). Petrographic analysis showed that the content of vitrinite increased and that of inertinite decreased slightly with decreasing particle size, which was thought to contribute to increasing volatile yield (ad) for fine coal particles. When particle size decreased, the content of fixed carbon decreased and that of ash decreased and then increased. Combustion experiments in a thermobalance revealed that with increasing particle size, the whole burning profile shifted to higher temperatures, resulting in an increase in characteristic temperatures. It implied that finer coal particles exhibited higher reactivity. This was explained from the point of view of maceral enrichment effects, mass transfer effects, and different physical properties of coal particles and the resulting chars due to different particle size. The results also indicated that simultaneous reactions of volatiles and char might happen at low temperatures for small particles.
A massive wind turbine rises into the air about 60 yards from where I stand. Silhouetted against an endless blue sky, the structure is taller than the Statue of Liberty, and the tips of its three blades spin more than 150 miles per hour, fast enough to complete one revolution every four seconds or so. Looking up at it from the ground is disorienting; I feel as if I've shrunk. Even the Ford F-250 pickup I'm about to climb intoone of those monsters with a roaring engine and an extra bar to help you step up into the cabseems miniature. I listen, but if the turbine itself is making a hum or whir, I can't hear it over the relentless pounding of the wind, a white noise accompanied by the sound of the air snapping against the loose fabric of my jacket.
Opposite me, on the driver's side of the pickup, is Laine Anderson, director of wind operations at PacifiCorp, a public utility company that powers more than 140,000 square miles across six Western states. As I move to hop in the truck, Anderson cautions me to watch my door. He's never actually seen one blow off a vehicle, but PacifiCorp does cover the possibility in safety training.
The wind farm we're touring today is called Glenrock, one of nine that PacifiCorp operates in Wyoming; they are among the more ideally situated wind farms in the US. Wyoming's topographya series of mountain ranges and plateaus spread diagonally across the statecreates a sort of natural funnel. In some towns near the end of that funnel, the gusts are so strong and persistent that trees noticeably lean to the east. In fact, the wind blows harder and with more regularity here in south-central Wyoming than just about anywhere else in the US. And yet compared to Texas, Iowa, California, and several areas across the Great Plains, Wyoming lags far behind in wind development, ranking 16th for installed wind capacity. Glenrock stands in a state where renewable energy has been, if not quite embattled, then stigmatized and viewed with contempt. And the reason for this cold reception is, in a way, written on the landscape of Glenrock itself.
Anderson shifts the truck into gear and starts up a hill. Up high, you get a better sense of the wind farm's scope: 158 steel turbines that look like pinwheels copied and pasted into neat rows across 14,000 acres. You also get a sense of its backstory. Constructed in 2008, Glenrock was the first wind farm in the country to be built on top of a reclaimed coal minea feat of modern engineering that doubles as a particularly on-the-nose metaphor for the transformation that Wyoming has been reluctant to embrace. Right here on our left, this was an open pit, Anderson says, pointing to a rolling field.
Wyoming's attachment to fossil fuels runs deep. For more than a century, roughnecks have been scraping through layers of Wyoming's topsoil, mining coal and drilling for oil. In the 1980s, the state's coal sometimes accounted for a quarter of the energy consumed by the entire country. Coal mining jobs brought pride and a middle-class lifestyle. Taxes and royalty payments from subterranean resources have paved the state's roads and built its schools. So when the wind industry came along, it was greeted by many with a mix of uncertainty (because it was new), derision (because it was green), and fiscal opportunism (because energy has always been the state's golden goose).
Many of the people who work in Wyoming's wind sector have themselves made the transition from livelihoods defined by fossil fuels. Anderson graduated from the University of Wyoming with a degree in petroleum engineering in 1984 and then, as he put it, drilled wells from North Dakota clear down to Arizona. That lasted about five years, before the region's oil industry went bust. Anderson spent the next two decades on dude ranches, entertaining tourists on horseback rides and fly-fishing adventures. When he and his wife sent their two kids off to college, he started looking for a new challenge. PacifiCorp happened to have an opening in renewables. So that's what we did, he says. His first job was to help build Glenrock.
Casey Collins, who is Glenrock's day-to-day manager, is riding along in the pickup for the wind farm tour. He too was a former oil-field worker, and I wondered if the guys from his oil days give him a hard time for taking a job in renewables. I get shit all the time! he tells me. Most of it's based on misconceptions and ignorance, to be honest. I've been asked several times, How much natural gas do you have to pump up there to get those things spinning?
Just over a decade ago, in the late 2000s, the wind prospectors arrived in Wyoming. A New York Times piece from 2008 compared them to the brash oilmen snatching up acreage and drilling rights in the film There Will Be Blood. They drove miles out into the country, knocking on the doors of ranchers and other landowners, trying to secure easements that would be needed to construct future wind projects. It was the pit of the Great Recession, and for many Wyoming ranchers those deals were welcome news. PacifiCorp, in a joint venture with two other utility companies, had built the first full-scale wind farm back in 1999. Ten years later, the sector seemed primed to lift off.
In Cheyenne, the state capital, however, the prospectors were about to get schooled. Lawmakers at the gold-domed capitol building studied reports by consultants who suggested that Wyoming's wind was so superior that the industry could bear a tax on energy production. Michael Madden, a Republican state legislator from northern Wyoming, helped shepherd a proposal for a tax on every megawatt-hour generated by wind. Minnesota was the only other state with such a tax, but that was levied instead of a property tax on wind farms; Wyoming was considering adding the generation tax on top of an existing property tax.
The idea didn't seem all that edgy to Madden. Mining companies pay severance taxes for severing minerals from the land, and the way Madden saw it, wind farms were severing something toothe state's picturesque landscape. Turbines, jutting up into the horizon, are a stain on the state's rolling hills, mountain ranges, and big open skies, he argued. The pristine nature of the state, he said, was being violated.
Renewable energy proponents flooded the halls of the state capitol with counterarguments, contending the tax would impede the growth of a new industry, one that could bring new jobs, albeit not as many as coal. They also noted that coal extraction, with its gaping strip mines that slice across the terrain, disturbs the landscape too.
In the end, the legislature passed a $1-per-megawatt-hour tax, to be imposed after a three-year grace period. It was lower than the $3 tax Madden had wanted, but it was not the only one levied on wind. The lawmakers also let a sales tax exemption on renewable energy equipment, like turbines, expire in 2009which made construction costs more expensive. Wind proponents argued that the state effectively had imposed three taxes on the industryon sales, on generation, and on property.
Across the country, meanwhile, the Obama administration was trying to encourage wind energy projects by extending federal tax credits. Wind farm developers chose other states with steady wind and more hospitable legislatures.
From 2011 to 2017, while wind farms proliferated throughout the US, not a single company completed a new utility-scale wind project in Wyoming. The tax had a chilling effect on some developers wanting to invest more in the state, says Tom Darin, senior director of Western state affairs for the American Wind Energy Association, a trade group. At least one developer that was already working in Wyoming, Duke Energy, took its new efforts elsewhere, investing $3 billion in other states.
While wind development came to a standstill, calamity struck the state's main sources of revenue. In the decade since Wyoming's 2009 legislative session, coal production has fallen. In the first quarter of 2019, it was down about 30 percent compared with 10 years agodespite the Trump administration's repeal of the Obama-era Clean Power Plan, which aimed to reduce emissions from fossil fuels. No one is predicting a turnaround. Last fall, two of the state's largest mining companies filed for Chapter 11 bankruptcy, leaving nearly 600 miners without a job overnight. We're seeing the death of an industry the state has depended on for decades, says Robert Godby, deputy director of the Center for Energy Regulation Policy at the University of Wyoming. (Coal paid $199 million in Wyoming severance taxes in 2018; the power generation tax on the state's wind farms brings in about $4 million a year.)
It's not the wind turbines that are knocking coal off the grid, Godby says; but the mining crash has, if anything, only hardened the affinity for fossil fuels. In Wyoming, odds are you're never more than a person or two removed from someone making a living on coal. Renewables have come to be regarded as an existential rival. Hesid Brandow, community organizer for the Powder River Basin Resource Council in Sheridan, Wyoming, told me about ranchers who had quietly installed solar arrays; they liked the self-sufficiency and practicality but asked her not to mention to anyone that they had them.
There is truth to the idea that renewables are beginning to rival fossil fuels, even in Wyoming. Coal still accounts for 24 percent of the energy consumed in the US (and Wyoming coal for about 11 percent). But wind and other renewable sources are catching up, in large part because their cost is coming down. Wind, the fastest-growing source of renewable energy in the US, now compares favorably to both coal and natural gas. According to a 2019 analysis conducted by the financial advisory firm Lazard, coal costs between $66 and $152 per megawatt-hour of electricity generated, natural gas costs between $44 and $68, and wind is between $28 and $54.
One reason costs have come down over the years is that turbine technology has steadily improved. Blade heads with sensors and 360-degree rotation can make the most of wind coming from any direction. Turbines have also grown taller and their blades longer; taller towers help in some regions, like the Southeast, by lifting the mechanism above the tree line, and bigger blades draw in more air. Both improvements mean you can generate energy more efficiently in places where the wind isn't blustery. There are more advancements coming. Companies are working on even bigger offshore turbines and modular components for turbine blades, which would make the parts easier to transport on smaller roads and through denser cities.
Another reason renewables are becoming more competitive is that states are swearing off fossil fuels. In 2015, Hawaii became the first state to make a 100 percent renewables pledge. California was second, announcing in 2018 that the state would get all of its energy from climate-friendly sources by 2045. Other statesNew Mexico, New York, Nevada, Washingtonhave since committed to transitioning to renewables. Some public utilities and large technology companies such as Google and Microsoft are making similar pledges.
In January, the US Energy Information Administration, which crunches energy statistics, forecast that all renewable energy would produce more of the country's electricity by 2050 than any other form of energy, much more than nuclear and coal and a bit more than natural gas.
That projected increase, from 19 percent to 38 percent of electricity production, assumes no new policies, regulations, or breakthrough technologies. In other words, wind and solar prices are now competitive enough to thrive without subsidies. (And just in time. After Congress passed a one-year extension late last year, the tax credit that the federal government has offered to companies to build wind projects will expire on January 1, 2021.)
All these changes in the engineering and economics of renewable energy have, taken together, begun to overcome the drag imposed by Wyoming's taxes. The incentives are just that strong. PacifiCorp is moving forward with plans to add nearly 2,000 megawatts of Wyoming wind as early as 2024 while also retiring a few of its coal-fired power plants early. We made a big bet on Wyoming back in the '60s and '70s when coal was booming, says company spokesperson Spencer Hall, referring to a time when PacifiCorp invested heavily in coal-fired power plants. And now we're betting on Wyoming again.
Another closely watched enterprise is making an even bigger wager on the state. Backed by Denver billionaire Phil Anschutz, an entity known as Power Company of Wyoming has set out to build one of the largest wind farms in the country. Unlike PacifiCorp, which is a utility with a built-in customer base, the Chokecherry and Sierra Madre Wind Energy Project, as the project is known, will sell its power to utilities and private customers.
It's a massive undertaking: The farm's 896 turbines will double the amount of wind generation capacity in the state. It took eight years for Anschutz's company to get environmental and other clearances, but the first turbines are expected to go up sometime in 2022, with the whole project completed by 2026. At that point the only problem will be how the heck to get all that energy captured from Wyoming's troposphere into the laptops, light bulbs, and Teslas that need it.
While Wyoming's geography produces some of the best wind in the country, it also complicates the process of exporting energy. The state produces 15 times more energy than it consumes, and its turbines are relatively far away from California and Nevada, where the big populations of electricity-hungry consumers live. Electricity moves around the US on three separate gridsone for the West, one for the Midwest and East, and one just for Texas. Wyoming taps into the Western grid. But many of the power lines within that grid are privately owned and have been leased to specific users, or are already overloaded.
One solution is more transmission lines, but getting them built is a bear. In the Eastern grid, the electricity flow is controlled by a handful of centralized organizations. Aside from one in California, there is no such authority in the West; the lines are managed by a patchwork of independent operators. To construct a new line from, say, Wyoming to California means getting permits and fulfilling rules and regulations across multiple jurisdictions.
Still, given the potential for cheap wind, PacifiCorp has a project in the works for about 400 miles of new power lines connecting a substation in southern Wyoming to another in Central Utah. Right now, the company has to dial back production when the lines are crackling to capacity. Once we get the new transmission line in, that should not happen, says Anderson.
For the Chokecherry and Sierra Madre project, the Power Company of Wyoming could buy its way onto one of the new PacifiCorp lines. More significantly, Anschutz is also investing in a $3 billion line, called the TransWest Express Transmission Project, that would carry wind energy along 730 miles of high-voltage lines from southern Wyoming to Las Vegas.
Another potential choke point is a familiar one. With revenues from coal drying up, and wind taking off, lawmakers have floated the idea of increasing the wind-generation taxto as high as $5 per megawatt-hour. Godby, of the University of Wyoming, argues that those who are considering a steep tax increase on wind are being shortsighted; if you discourage future wind projects, you might end up reducing overall tax revenue and undercutting the purpose of the tax. At some point, he says, you have to wonder whether the goal is less about filling state coffers than trying to stop wind development altogether.
Or to give a leg up to coal at wind's expense. In mid-February, Wyoming governor Mark Gordon, a Republican, threw his support behind the coal industry during his state-of-the-state address. We will not recklessly abandon our most abundant and reliable energy source just because it is unpopular with some people, Gordon said, while also calling for tax breaks for oil and gas. Legislators were right on it. One bill now being considered would subsidize the development of unproven carbon-capture technology to help keep coal viable and would require public utility companies like PacifiCorp to produce a fixed percentage of electricity from reliable sources. The bill goes on to define reliable as generated electricity that is not subject to intermittent availability. In other words, not wind.
Madden, the state official who first championed a generation tax, retired from the statehouse in 2018; but he's still outspoken about energy, and he still supports a wind tax. When I called him recently, he said the tax should be closer to $4 if we're going to be treating the sources of electricity creation equally. But during our conversation it was clear Madden's point about fairness ran deeper than just dollars and cents; he seemed irked by the attitude among some people working in renewables. The wind industry doesn't think they should be taxed, Madden said. They think, We're doing more good than we are harm.
In some ways, Wyoming's wind tax gambit has actually worked. Yes, it was at least partially responsible for a sustained period of non-development, but there is so much money to be made that at this point, developers might even tolerate a slightly higher tax. During one of my conversations with Godby, I asked if wind could actually help with Wyoming's depleted state budget. Renewables won't save Wyoming by directly replacing the economic loss the downturn in fossil fuels will cause, Godby says. But, potentially, it's a large part of the solution. It's a delicate balance.
Anderson pulled into a 74-turbine project known as Dunlap I and introduced me to the site manager, a big, friendly guy named Todd Looney. He's been in the wind business for 16 years. Most guys, he says, don't last more than a year or two. You're basically a mechanic, he says. But your toolbox is in a truck 300 feet down a ladder.
Then, Looney says, there's the wind itself: It takes a different person to work in the wind, blowing all day every day. That eats at people. I asked Looney what's made it possible for him to survive in this industry for so long. He turned and looked me in the eye: So, my last name is Looney; a lot of it's because I'm about half crazy.
After the tour in Carbon County, Anderson and I hop back in his truck. On the drive to Casper, he tells me that he sees customerslike Facebook, which opened a data center in Utahstarting to demand renewable energy. Change, in other words, is cultural as well as economic. The conversation made me think back to something he'd said earlier in the day: that any big shift toward wind is going to take time. Right now, wind is just a small bucket here in Wyoming, and they're trying to compare us to coal that produces billions in dollars, Anderson says. But they're trying to pick on us, You're not going to do what coal does. Well, no kidding: Coal's been around for 100 years. The challenge facing Andersonand all of usis that we don't have 100 years to wait.
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