The Office of Natural Resources Revenue issued a proposed change to the regulations that govern the value of certain oil, gas, and coal production for royalty purposes.

Comments must be submitted on or before March 9, 2015.

To read the proposed regulation or comment, please go to:

http://www.regulations.gov/#!documentDetail;D=ONRR-2012-0004-0001

January 9, 2015

Corsa Coal Corp. will be eliminating 130 full time positions and idling two mines in the PBS Coals Ltd. portfolio that it recently acquired when purchasing PBS from OAO Severstal in August.  These layoffs represent 25% of Corsa’s Northern Appalachia Division workforce.  The mines at issue are the Kimberly Run and Barbara mines.  The remaining personnel and equipment are to be transferred to Casselman and Quecreek mines to improve production and efficiency.  Corsa CEO blames the price of metallurgical coal production for the move, as to preserve the reserves for future development when the market is stronger.

Read more at: https://www2.snl.com/Interactivex/article.aspx?CdId=A-30542957-12332

January 7, 2015

Coal exports are down overall in the US, but planned production cuts are likely to offset the softening thermal coal market.  Last winter the polar vortex offset some market conditions, but the US mines should stay competitive even in the absence of another extreme weather event.

While survivable, the current market conditions are less than ideal for US producers.  The 2014 export total is anticipated to be around 97-98 million, the for 2014, with another 20% reduction anticipated in 2015.

Amidst this, Alpha Natural Resources has let their WARN notices expire at many surface mines without any layoff of workers.

Read more at: 

https://www2.snl.com/Interactivex/article.aspx?CdId=A-30503990-11063

January 5, 2014

Cloud Peak Energy really dislikes the U.S. Department of the Interior’s proposed regulation that would close a loophole in the way coal royalties are calculated.  Cloud Peak, a Powder River Basin producer believes that the proposed regulation will have a chilling effect on the industry while adding to the regulatory burden.

Read more about the issue at: https://www2.snl.com/Interactivex/article.aspx?CdId=A-30444357-12082

October 13, 2014

The Wishbone Hill [Coal] Mine has been re-approved by the Alaska DNR to resume surface coal mining of the Wishbone Mine.  It is approximately five miles west of Sutton, Alaska.  In 1997, Usibelli Coal Mine, Inc.  purchased the rights to the mining lease, the validity of which has been questioned by the federal Office of Mining and Surface Reclamation.

Read More at: http://www.groundtruthtrekking.org/Issues/AlaskaCoal/WishboneHillCoalMine.html

October 7, 2014

Consol Energy, Arch Coal, and Peabody Energy are all down one percent or more today at the 1 p.m.

See the numbers: http://www.cnbc.com/id/102067342 

October 3, 2014

One of the largest coal mining companies in the United States, Alpha Natural Resources, Inc. has announced the layoff of 250 workers, with the promise that more layoffs are coming.  The coal industry is often quick to blame the current Administration’s rules and environmentalists for the downturn.  However, the hydraulic fracturing technology which has allowed energy companies to reach tough natural gas deposits is also to blame for the decline in coal mining.

James Stevenson, IHS Energy’s Director of North American Coal estimates that it is a “50/50 split” between regulation and the newfound availability of natural gas causing the decline.  However in explaining the impact of markets versus regulations Stevenson cites that “the tipping point really has been caused by cheap gas.”  This is because existing coal generation facilities are competitive or economically advantageous over gas units, but new and predicted regulations encourage old coal power plants to close and increase the expense of new coal fired power plants.

Some Coal Markets Analysts believe that the Mercury and Air Toxics Standards (MATS) have accelerated the closure of the coal fleet.  However, analysts predict that remaining coal fired power plants will be “newer, more efficient and cleaner.”  Stevenson notes that this decade will see stable retirements, but an acceleration will likely be observed in 2030.

In addition to the regulations and natural gas competition, Appalachian coal mines are seeing changes as a result of technologies that allow higher-sulfur coal to be competitive again with the higher grade coal generally produced in the Appalachia unit.  Additional factors like mechanization, geologic constraints, and increased safety standards are to blame for the decrease in cost competitiveness of coal from the Appalachia unit, resulting in fewer jobs and a flagging industry.  The higher grade metallurgical coals available in Appalachia will continue to be in demand, but a flagging demand for power supply coal will be noted in the future.

The Powder River Basin is also experiencing a production reduction, however the outlook for production in this this area is still potentially robust, if the coal can make it out of the country given concerns about environmental issues as related to transport in the Pacific Northwest.

Ulimately, analysts believe that for the medium and long term the outlook for energy production and steel (metallurgical coal is used in steel production) is robust.

Read more at: http://www.eenews.net/stories/1060006890

October 3, 2014

Today coal company stock prices have fallen at 1 p.m.  Arch Coal and Peabody Energy both fell over four percent while Console Energy is down 1.6%.

See the numbers at: http://www.cnbc.com/id/102057870#.

September 24, 2014

Metallurgical and thermal coal markets remain weak causing coal companies to work aggressively to reduce operational costs and capital expenditures to stay afloat.  Market analysts believe that the metallurgical coal market is weak due at least partially to a weak demand due to economic slowdowns in global markets and the depreciation of the Australian currency, which has lead the Aussies to maintain a high metallurgical coal production rate, flooding the market despite weak pricing.

Read More at: http://seekingalpha.com/article/2518195-coal-companies-face-problem-of-oversupplied-markets-as-they-look-to-survive

September 19, 2014

Senator Ed Markey (D-MA) has renewed his call to suspend all sales of coal leases on federal land.  The Senator first called for this suspension in February after the Government Accountability Office issued its report detailing failures by the Department of the Interior and Bureau of Land Management.  Some of the issues identified by the GAO include: sub-value sale of coal, sale without proper competitive bidding, and improper valuation of the coal.  These problems, and other systemic problems with the coal leasing system have cost the taxpayers $30B over the past 30 year.

Read More: http://www.csmonitor.com/Environment/Energy-Voices/2014/0919/Why-one-senator-wants-to-halt-US-coal-leases