Wyoming partners with Japanese firms seeking coal

Mead signs memorandum of understanding in Cheyenne

CHEYENNE, Wyoming, July 26, (Agencies): Aiming to develop new export markets for a fuel source hit by declining domestic demand, Wyoming Gov Matt Mead on Monday signed an agreement calling for cooperation between the state and a consortium of Japanese companies in researching clean-coal technology.

Mead signed a memorandum of understanding in Cheyenne with the president of the Japan Coal Energy Center. It represents about 120 manufacturing and energy companies, including Mitsubishi Materials Corp and Kawasaki Heavy Industries, Ltd. Mead said he expects a conference will take place in Wyoming, the nation’s largest coal-producing state, within a year that would allow Japanese researchers to work on coal issues with researchers from the University of Wyoming School of Energy Resources.

He said his administration does not want the state to just “be a leader in the production of coal, we want to be a leader in the solutions for coal here in Wyoming.”

Wyoming’s state government depends heavily on revenues from production of coal and other fuels. But Mead has been forced to cut the state budget in recent months because of falling energy prices and lower demand for coal.

Wyoming also has been stymied in recent years in its push to send coal by train to ports in the Pacific Northwest for export to Asia. Opponents in Washington and Oregon are concerned about train traffic with dust, noise and possible environmental hazards plus the prospect of more global warming created abroad by coal-fired plants.

Mead said making progress in reducing emissions from coal plants could help Wyoming export coal to meet demand from Japan. He said the research will focus on cutting CO2 emissions through capturing it and using it to make other products.

“As we find solutions for Wyoming, the country and the world for coal — which is what we’re to do here — it certainly makes the lift for getting ports open in places like the State of Washington easier when we can point to it and say, ‘we’re not just making this ask, we actually are doing the heavy lifting in terms of trying to find solutions for coal,’” Mead said.

Undertaking

Osamu Tsukamoto, president of the Japan Coal Energy Center, said the consortium already is undertaking coal research and demonstration projects and expects the agreement with Wyoming will lead to useful information exchanges.

Coal-fired plants in Japan now get the fuel from Australia and Indonesia but want to tap sources from other parts of the world, he said.

Mark Northam, director of the University of Wyoming School of Energy Resources, said Japan has increased its reliance on coal for electrical generation following the 2011 Fukushima nuclear disaster.

Modern

“They’re relying on a modern, new coal fleet to replace the nuclear power that they have shut down because of the unfortunate accident they had a few years ago,” Northam said. “So our working with them is a way to develop that new advanced technology but also to ensure that it gets widely disseminated so that others can take advantage of it and use coal cleanly.”

In the midst of a deep coal downturn and widespread layoffs, the staff that remains at Rawhide is spending more time in 2016 on landscaping than mining. “We’re probably going to do four times the amount this year than we would normally do,” said Mary DeRudder, a 30-year veteran coal miner at Rawhide, which saw its workforce cut by more than half to 95 since jobs peaked at 225 in 2012.

Improving the environment with acres of prairie is a plus, but placing greater resources toward reclaiming stripped land is part of an effort by Peabody — the largest US coal miner — to reduce its $1.2 billion liability for future environmental cleanup costs.

The quicker Peabody can recreate native grass and sagebrush, the sooner it can cut costs, free up cash and make its mines more attractive to potential buyers. It can also help Peabody meet a target of emerging from bankruptcy by next April.

“We’re doing everything we can to reduce our liability to a minimum,” said Phil Dinsmoor, Peabody director of environmental services in Wyoming’s Powder River Basin, where Rawhide sits.

Before Peabody can exit bankruptcy, it must first overcome a $1 billion dispute between creditors — including some of Wall Street’s most litigious investment funds — over claims on the coal producer’s assets. In addition to planting grass, Peabody is also accelerating applications to regulators seeking approval of the reclamation of roughly 8,000 acres of land at its 28,000 acre North Antelope Rochelle, a mine adjacent to national parkland 50 miles south of Rawhide that produces more coal every day than anywhere else in the world.

If its application is approved, Peabody will be able to remove millions of dollars of liabilities from its books. The company declined to disclose the total amount by which it expects the accelerated cleanup efforts to reduce liabilities.