This edition of Coal Age has a few good stories sprinkled throughout a field of despair. If good news is what you crave, Adani Australia broke ground on the Carmichael mine in Queensland, Australia, which will likely be another major Australian coal producer for many years to come. Congratulations to them for overcoming a major uphill battle to permit and open a new mine. Ramaco received approval for its Brook mine near Sheridan, Wyoming. It is the first new coal mine Wyoming has permitted in more than 40 years. Alliance has restarted its Illinois Basin mines and said its customers have agreed to take all the contracted coal for 2020.
Offsetting those stories, readers will see Foresight Resources wending its way through the Foresight Energy bankruptcy. CONSOL Energy was forced to make the difficult decision of furloughing miners at Enlow Fork. Coal companies in the U.S., Canada, Poland, South Africa and Australia have had to idle operations due to the novel coronavirus (COVID-19), like lots of other businesses.
The double-whammy of COVID-19 and a complete collapse in energy markets has had a profound impact on the coal business. No one expected 2020 to be great, but… Who would have thought coal would be the most expensive fuel on a dollar-per-million Btu basis? Who would have ever thought that U.S. electrical demand would drop to a level that it could be supported by windmills and solar panels? That second question is based on alternative facts, but the mainstream press would like you to believe them as true.
As the rest of the country fixates on questionable COVID-19 figures and the riots in urban centers, structural changes in the form of regulatory relief are taking place in Washington, D.C. Most recently, the U.S. Council on Environmental Quality (CEQ) announced reforms for National Environmental Policy Act (NEPA) reviews, which had become increasingly burdensome. The NEPA process has been used to block projects completely. That follows the Department of the Interior’s proposed rules to streamline its policy on 10-day notices. The court dismissed a case that would have made the Mine Safety and Health Administration issue an emergency temporary standard for COVID-19, which could have been severely detrimental. The barriers created by excessive federal regulation are coming down.
We know the current situation will not last. Activity is growing in the auto business, which spurs the consumption of electricity, steel and coal. More people are returning to work and this tepid summer activity will soon transition into a full-blown recovery. Will things bounce back? It is definitely possible. The Spanish Flu was followed by the Roaring 20s. Enjoy this edition of Coal Age.