Colorado and Coal in Today's Political Climate

Whether or not policy swings in coal’s favor, it remains an important piece of Colorado’s economy

Energy, like many things, witnessed a dramatic shift with the change in administration that has many asking, what’s in store for coal’s future?

First, it’s important to note that coal remains an important fuel source and economic driver across the U.S. and certainly here in Colorado. As noted in, “Why Mining Matters,” coal is not only a significant part of Colorado’s history, but of everyday life. Coal is used to generate electricity and plays a key role in the day-to-day materials we use.

Colorado is still heavily dependent on coal as an energy source. In fact, Xcel Energy reported in 2016 that coal was still its primary source for electricity in Colorado at 46 percent, followed by natural gas at 25 percent, wind at 23 percent, and hydro/solar at 6 percent. Other reports state that coal still generates as much as 60 percent of our state’s power.

When it comes to coal, its future depends more on commodity-prices than who sits in the Oval Office. And commodity-prices are driven by global trends. For example, environmental regulations can make it difficult or too costly to operate in an economically successful way. Coal, in terms of political currency, is complicated, and there has been a big push in recent years toward natural gas for power plants instead of coal. In the U.S., this is particularly true. In Colorado, coal production has plummeted steadily by 50 percent since 2004; and since the passing of the 2010 Clean Air Clean Jobs Act, the coal industry has faced further mounting pressure.

In short, coal has gained a reputation as an undesirable fuel. So what does that mean for coal in Colorado in 2018 and beyond?

Colorado and coal mining have a rich history, with coal responsible not only for jobs and energy production, but the building of entire communities in this state. Among recent changes, the New Horizon coal mine in western Colorado shut down in the summer of 2017, dropping the number of active coal mines in Colorado to just seven and the total number of employees to just shy of 1,000. But it’s not all bad news for the industry, as a proposed expansion of Arch Coal’s West Elk Mine near Somerset won approval in September of last year – a mine that employs about 220 people and last year produced 4 million tons of coal.

This follows a national trend on the part of the Trump administration to approve more federal lands for coal leasing, a trend that has not, as of yet, made significant increases to employment or activity in our state, but industry supporters are optimistic. During the Obama administration, new coal leases on public lands were banned due to environmental concerns, but with a new and more industry-friendly administration, coal is once again generating more interest.

Colorado ranks 11th out of 25 coal-producing states in the U.S. Whether or not policy continues to swing in coal’s favor, it remains an important piece of Colorado’s economy and one to continue to watch in 2018 as signs point toward an increase in activity.

Categories: Economy/Politics