Quantcast

Op-ed: Coal mining in Grand Staircase makes no sense

First Published      Last Updated May 27 2017 03:00 pm

It does not make economic sense to open up the Grand Staircase-Escalante National Monument to coal mining — which would be a possibility if the monument boundary is redrawn.

I have spent my career performing feasibility studies on coal mining projects around the world since I arrived in Utah 40 years ago. There is a time and place to develop a virgin coal project. This is neither the time nor the place. The coal deposit is in a high desert and very remote part of southern Utah with no paved roads or rail access.

Our politicians, quite rightly, want to encourage job creation in remote rural Utah and the depressed coal towns of central Utah.




Trying to develop coal mining in the Monument would be economic folly. Large reserves of good quality coal do exist in the monument. Small amounts of coal have been produced here over the last 100 years and interest peaked in the early 1990s, during a short-lived boom.

The big question (ignoring environmental concerns) is: Where is the market for the coal? Domestic markets for Utah coal have been in decline and will get significantly worse in the next few years. The large coal-fired plant near Delta has announced a decision to switch to natural gas by 2027. It accounts for nearly 40 percent of current Utah coal production. New mining would compete with the existing suppliers who are already hurting.

Some point to the increasing demand for thermal coal in China and India. These markets have experienced explosive growth in the last 25 years, but existing large coal producers, predominantly in Australia and Indonesia, have captured this market. Australian suppliers can deliver a similar quality product to the best coal reserves in the monument at lower cost. Indonesian mines have coals with some superior qualities that make them very attractive to consumers in India and delivered costs are, again, lower than Utah coals.

The combined thermal coal exports of Australia and Indonesia, in 2015, were over 500 million tons; more than a three-fold increase from 1995. Over the same period central Utah producers decreased Pacific Rim exports from 3 to less than 1 million tons. Simply, Utah coal cannot compete in this market to any meaningful degree and certainly not enough to invest in expensive infrastructure and new mine facilities.

Australia, Indonesia and the other significant competitor, South Africa, produce their export coal predominantly from lower cost surface mines with significantly lower transportation costs by both rail and ocean vessel. A theoretical mine in the monument would produce coal from an underground (more expensive) mine, load the coal into trucks, travel 200 miles by road to a rail load-out, 1,000 miles to a West Coast coal port followed by a long ocean trip to the Asian consumer. The delivered price numbers per unit of thermal energy do not make sense and market history confirms this.

Furthermore, Asian markets are projected to slow or even decrease. India recently announced record low prices for new solar power (24 percent cheaper than coal) and China has abandoned plans for over 100 new coal-fired power plants.

Mining has a history of booms and busts, but optimistic calls for a future Utah coal export boom are not confirmed by economic realities. If the president and Utah politicians really want to help, they should provide economic incentives to locate manufacturing facilities to these areas or initiate training programs for skilled jobs in growth industries.

Changing the Grand Staircase-Escalante National Monument boundaries will only give false hopes to rural communities. We need to continue the land protections that are in place.

Donovan Symonds is a retired mining consultant. He has a Ph.D. in coal preparation from the University of Nottingham, U.K., and is former president of the Coal Preparation Society of America.

 

COMMENTS
VIEW/POST COMMENT      ()