(The following story by Gargi Chakrabarty appeared on the Rocky Mountain News website on March 22.)
DENVER — The state produced a disappointing 38 million tons in 2005, down from the record 40 million tons a year earlier.
And production is forecast to lose even more steam this year, by an additional 2 million or 3 million tons, according to the Colorado Geological Survey.
The shortfall in the billion-dollar industry is wholly attributed to incidents at the mines that halted or slowed coal production.
At the end of last year and early this year, two major underground coal mines in Somerset suffered unexpected production cuts.
Somerset’s West Elk mine was shut for more than two months beginning in late 2005 after smoldering coal led to a buildup of dangerous gas inside the mine. The Elk Creek mine shut down at the beginning of this year after the roof near a production area became unstable. The mine will reopen April 1.
“Production has been significantly down since late last year,” said Chris Carroll of the state geological survey. “At this point, we are projecting only about 35 to 36 million tons this year.”
Colorado’s rank among the nation’s coal-producing states fell one notch to No. 7 in 2005 from the previous year. Wyoming and West Virginia are the top producers, followed by Kentucky, Pennsylvania, Texas and Montana.
This year, it’s harder to predict Colorado’s likely rank partly because it depends on the performance of other states.
Last year was Colorado’s first slump in production since 2000, which put an end to the record-setting trend that began in 2001. Production had touched 36 million tons in 2003, compared with 2002’s 35 million tons and 2001’s 33 million tons.
Union Pacific Corp. – the nation’s largest railroad operator – has made it clear that its trains are not responsible for the production slump.
The operator was roundly criticized by the Somerset mines last year for running fewer trains to haul away the coal, causing those mines to cut back production.
Union Pacific spokesman James Barnes said problems at the mines have caused the production cutbacks.
“Production slowed down, so we slowed down the running of trains, too,” Barnes said. “It was not necessarily an issue of trains available but having the coal available to put into the trains.”
Barnes said the trains, slowed at the beginning of this year, would be ramped up to normal levels next month.
Stuart Sanderson of the Colorado Mining Association held out hope for 2006, although he admitted 2005 was disappointing. Given the increase in the demand for electricity, he said, there always will be robust demand for coal since it is a reliable and cheap fuel.
Also, Colorado’s coal production has increased nearly 50 percent since the mid-1990s – an indication of its stable growth pattern.
“Coal industry is like the stock market where you don’t look at yesterday’s results but at the long-term trend,” Sanderson said. “It is important to recognize that if the market is good, companies will still produce coal, but there are going to be bumps on the road.”
There are vast amounts of so-called Western coal in Colorado, Wyoming, Montana and other Western states. It is wetter and produces less energy than Eastern coal, which is mined in states such as Pennsylvania and West Virginia. As a result, Western coal sells for a fraction of the price of Eastern coal. But given the recent prices of natural gas, the price of Western coal has increased.
Nationwide, more than 100 coal-fired power plants, including five in Colorado, are either in the planning stages or under construction, according to Platts, a division of New York-based McGraw-Hill Co.
Xcel Energy is building a new $1.3 billion coal-fired power plant in Pueblo to be completed by late 2009.