Arch Coal and Peabody have announced that they plan on merging two of Wyoming’s most productive mines. These two mines alone were responsible for 60 percent of all the coal Wisconsin had burned. The Federal Trade Commission has yet to approve the move.
The two coal magnates stated last week that they intended to collaborate on joining several mines in the country. There are five other mines that will be joined in the operation, in addition to the two mentioned above. This move, in the companies’ words, is supposed to reduce costs by about $120 million every year. This cost cut will enable them to keep up with renewable and natural gas sources.
The two high-gain mines are the Black Thunder mine and Peabody’s North Antelope Rochelle mine. The former is controlled by Arch Coal, while the latter is the largest in the nation. Both share the same property line that stretches for 7 miles and have collectively provided 10.4 million tons of coal for Wisconsin’s power plants.
What Will the Merger Do?
Beyond the money Arch and Peabody will save, the extent of the consequences following this merger remains a mystery. Nobody is quite sure what effect it will have on Wisconsin utilities and those paying for their rates.
We Energies’ spokesman, Brendan Conway, stated that it was too soon to tell what the aftermath of this merger would be. We Energies is the state’s biggest utility and the user of 30 percent of the coal produced by the two mines.
It is also unclear if the savings made by the merger will reflect on the prices they place to their customers. Should the prices increase, they will likely face a backlash in the form of utilities consuming more coal.
Former Alliant Energy director, Scott Blankman, said that utilities might see an increase in their savings as well. However, Blankman, currently in charge of the air and energy program for Clean Wisconsin, says that the merger leads to problematic industry centralization. Following the monopolization, a lot of businesses would rely on just one provider — a position most would wish to avoid.
The Coal Industry in the US
The preceding decade was not kind to the coal industry in the U.S. While there had been an effort in the White House to improve matters, it seems that its future appears just as gloomy.
Technological breakthroughs have rendered other energy sources more profitable, significantly more so than coal. Natural gas has become more accessible, thanks to hydraulic fracking. Moreover, solar panels and wind are now among the cheapest ways to generate electricity. As a result, coal production dropped to 774 million short tons in 2017. In 2008, the rate stood as high as 1.17 billion.
Since 2015, a slew of coal power plants has been put out of commission. An overall value of around 47,000 megawatts in coal energy production was shut down. Among those, about a dozen were from Wisconsin. Meanwhile, next to no new plants of this kind have started operations. Furthermore, as many as half of the plants scheduled for termination are coal-powered.
In April 2019, renewable energy sources surpassed coal in productivity, which had never happened until this point. Additionally, last year, natural gas stripped coal of its title of the biggest energy source in the U.S.
To make things even worse for the coal industry, government policies have also exacerbated its situation. The Environmental Protection Agency came out with the Affordable Clean Energy rule, which is to continue this negative trend. Trump’s office designed the rule as a cudgel to quell greenhouse emissions. Though it does not clamp down as hard as Obama’s Clean Power Plan, ACE nevertheless promises to perpetuate the shutdown epidemic.