The Saratoga Sun -

King Coal dethroned

 


It is unlikely coal mining will return to Hanna according to state and county officials.

Opening federal lands for leasing to coal helps fund Wyoming Education. For the northern part of Carbon County, an area renowned for coal mining over a century, the news would seem to be a shot in the arm.

The Saratoga Sun contacted the Carbon County politicians and the Wyoming Mining Association (WMA) asking the same question to all: “How does any of this help a town like Hanna which has an established but defunct mine?"

Jerry Paxton, member of Wyoming legislature representing the 47th District, had this statement in an e-mail:

“Wyoming still has a large reserve of coal in the Thunder Basin Area that is easier to extract and is reported to be cleaner burning and has a higher BTU rating than Hanna coal. It stands to reason that when the coal industry starts to recover, coal companies will look to that area first for new leases. The benefits to Hanna are not direct benefits but come in the form of funding for the School Facilities Commission through coal lease bonus funds. In addition the taxes on production will benefit the School Foundation Trust Fund. The taxes will also go into the General Fund of the State which helps fund all counties, cities and towns in Wyoming.”

Carbon County Commissioner Leo Chapman answered in an e-mail that had representatives, Lindy Glode, Sue Jones concurring with Chapman’s assessment.

“I have virtually no experience in the mining industry, so I am unable to shed much insight to your question. That said, the story told to me during the past few years has been that the Hanna open pit mines, due to the slope of the geology, became too steep and became prohibitively expensive to remove the overburden. I can't speak to the underground mines, but they closed as well. Carbon County last received any depletion funds early in my commissioner career. I think it was in 2013. You can ask Cindy Baldwin the date we last received funds from coal mining operations. To my knowledge, the reclamation has been completed as well. In my opinion, the mine companies did a good job in that regard.

The heyday of the mining operations brought great wealth to Carbon County during the 70s and early 80s. They employed many people and brought a boom to Hanna and overflowed into Medicine Bow and to some extent Elk Mountain. I was a consumer banker in those days and had many excellent customers from those areas. Saratoga grew because of the mines as well.

The coal prices dictated the sale of coal. I worked in Denver for CIG (Communications Infrastructure Group) in the 70s. There were 5 large sales meters at the Public Service Generator site. Near the meters was a huge pile of coal nearly 40' high. When the price of natural gas got too high, or when inversion levels became less of an environmental issue they would discontinue using gas and switch to coal. The regulations have changed considerably now and those companies have installed very expensive scrubbers in their stacks, but increasingly they are being required to lower polluting conditions. That of course, lowers demand considerably. The most recent Obama EPA rulings have been challenged and I understand have been upheld, so further demand is certainly in question. Hanna has a dubious chance of coming back into the market due to those economic concerns. Books have been written on this, and I am certainly not an economist. But the use of Carbon County coal, in the present marketing practice, has little future. There was a push for a coal to gas plant near Elk Mountain that showed some promise, but it was largely dependent on the price of gasoline. Likewise for coal gasification converting coal into natural gas. Natural gas is so plentiful and easy to drill for that those schemes are also not economical in today's world.”

John Johnson, Carbon County commissioner agreed with Chapman’s analysis but added another point:

“I would offer one thought that has hampered coal companies in the Hanna basin and that is the ability to compete with exporting the coal; the UP Railroad being the only viable game in town gives them a monopoly and the ability to set both price and schedule at a rate that, to date, has pushed the cost up to a point where the coal is no longer economically viable in most instances. This somehow needs fixed.”

Travis Deti, Executive Director of the Wyoming Mining Association (WMA) also replied to the question by e-mail:

“Revenue from the mining of leased federal coal benefits the entire state of Wyoming. First, royalties paid to the state in federal coal accounted for an estimated $2.7 million in 2015 (I don’t have 2016 figures yet, but they will be lower). This money goes into the state’s general fund which (among other things) pays for funding of roads and highways across the state, as well as funding for county and local governments.

Revenue from ‘bonus bids’ paid by coal companies on federal leases goes directly in to the school capital construction account and has built and maintained all of Wyoming’s schools for more than two decades. Every county has benefited. In the Hanna-Elk Mountain region in Carbon County for example, money from federal lease paid for the Elk Mountain Elementary School. Regretfully, this funding stream is dry as there have been no recent leases. The state is in the unenviable position of having to find another source of revenue. Of course we are hopeful that our coal operators will begin leasing again and get this money flowing into the state coffers once more, but in the near term the revenue problem is significant.”

Currently there is no production of coal in Carbon County and only Arch of Wyoming LLC (Arch), employs any personnel at all, currently 18.

Coal industry jobs are among the best paying in the state. According to the WMA, Wyoming coal miners take home an average wage of $85,990 before benefits—almost twice the statewide average wage of $46,299 per worker. Estimates indicate each coal industry position lost drives the need for three additional jobs in the state said WMA.

Carbon County’s town of Hanna will likely see no coal production in its future—although there is always hope something can change in the times ahead. Arch is in the process of taking bids to have the last vestiges of it’s mining operations in the town get reclaimed as were the conditions of their lease with Bureau of Land Management.

Once that land is reclaimed, it is unlikely future generations will know of Hanna’s powerful position in King Coal’s history out west.

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