August 21, 2007

2006 Coal Report -
   Annual Review
   and Forecast (pdf)

The Utah Geological Survey has released Circular 103, Annual Review and Forecast of Utah Coal: Production and Distribution for 2006.

Utah coal production in 2006 increased for the second straight year to 26.1 million short tons, 6.4% higher than 2005’s production total and 20% higher than the 10-year low experienced in 2004. This year’s increase was the result of renewed longwall mining at the Skyline mine and significant production increases at Aberdeen, West Ridge, and SUFCO.

In addition, Utah achieved record production in the Book Cliffs coal field, record production in Carbon County, and record production on State lands. In fact, in 2007, coal production on State lands is expected to out-pace federal coal production in Utah for the first time.

Despite this recent surge in production, many coal mine operators are experiencing increasingly difficult mining conditions, resulting in a higher ash product. To help mitigate this growing problem, two new coal-cleaning facilities have been built: Canyon Fuel’s Castle Valley Coal Preparation Plant and Headwater’s Wellington Cleaning Facility, both located near Price, Utah.

With more Utah coal available, distribution increased slightly to 24.8 million short tons, and out-of-state coal imports dropped to a 10-year low of 1.9 million short tons.

Despite the fact that three small mines went idle in 2006 – the Pinnacle, Bear Canyon #3, and South Crandall Canyon mines – Utah coal operators hired 191 new employees for a total workforce of 1,994, the highest since 1997. Furthermore, the average price of Utah coal increased in 2006 by 16.4% to $22.51 per short ton, the highest price in nominal dollars recorded in the past 20 years.

Utah’s coal industry will continue to be strong in 2007, with production expected to total 26.4 million short tons, possibly increasing in 2008 to around 28 million short tons, which would set a new state production record. This continued increase would mostly be the result of ramped up longwall production at the Skyline mine, higher production at SUFCO and Aberdeen, as well as new longwall production at Bear Canyon.

Coal-related employment in 2007 is projected to increase to 2,041 employees. The average price of Utah coal is expected to increase by about 5% to $23.60 per short ton. Overall, Utah coal distribution should increase to 26.2 million short tons, while imports, mostly Colorado coal going to the Bonanza power plant, are expected to remain steady at 2.0 million tons.

Two newly proposed coal mines are in various stages of the permitting process: the Lila Canyon mine in the southern Book Cliffs coal field in Emery County, and the Coal Hollow mine in the Alton coal field in southern Utah’s Kane County. As electricity consumption continues to increase, and with 1200 MW of new Utah coal-fired electric capacity in the planning process, these new mines, along with increased productivity at existing mines, will be needed to meet consumer demands.

The 2006 Utah Coal Report can be viewed on the Utah Geological Survey’s website at http://geology.utah.gov by clicking on “Energy” in the navigation menu, and selecting the “Coal & Coalbed Methane” link (direct URL: http://geology.utah.gov/online/c/c-103.pdf).

The report is also available at the Natural Resources Map & Bookstore for $12.95, 1594 West North Temple, Salt Lake City (801-537-3320, or 1-888-UTAHMAP; geostore@utah.gov).

Also available online is the “Utah Energy and Mineral Statistics” Web-based data repository, which includes current and historical energy and mineral data for the state of Utah (http://geology.utah.gov/sep/energydata/index.htm).

Any comments and/or questions should be directed to Michael Vanden Berg at 801-538-5419 or email to michaelvandenberg@utah.gov.