Friday, April 01, 2016

Powder River Basin suffers first major coal mining layoffs, with 465 jobs slashed

The Powder River Basin on Thursday suffered its first major coal layoffs when the nation's two largest coal mines, both located in Wyoming, announced they were cutting 465 jobs, or 15 percent of their workforce at each mine, Benjamin Storrow reports for the Billings Gazette. Peabody Energy cut 235 people at North Antelope Rochelle, and Arch Coal said it was cutting 230 people at its Black Thunder Mine. "The layoffs are notable as they come at what are generally reckoned to be the largest and most cost effective mines in the country. North Antelope Rochelle and Black Thunder generally mine around 100 million tons of coal annually." (Peabody map)

"Layoffs in the Powder River Basin have been relatively limited," mostly due to efficiency of the region's operations, Storrow writes. "In 2013, the U.S. Energy Information Administration estimated the average Wyoming miner was responsible for 29 tons of coal per hour, whereas a West Virginia miner was credited with an average of 2.4 tons of coal per hour." Bob Hodge, a coal analyst at IHS Energy, told Storrow, "You’re talking about good, good mines. In the east, if you wanted to point a finger at a villain it would be the EPA. I think in the PRB the biggest villain is natural gas."
"Powder River Basin coal generally becomes economically competitive when natural gas prices reach $2.25 per million British Thermal Units or higher," Storrow writes. "Natural gas prices nationally have remained mired below $2, a dynamic industry analysts expect to continue throughout 2016. An unseasonably warm winter has only furthered coal's suffering. Peabody officials noted 2016 heating degree days—those when the temperature falls below 65 degrees Fahrenheit—are 17 percent below 2015 levels year-to-date. March heating degree days are down 30 percent against their 10-year average." (Read more)

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