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Severe weather impacts highlight coal's own susceptibility to climate change

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Severe weather impacts highlight coal's own susceptibility to climate change

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A Union Pacific train delivers coal in the Powder River Basin, where mining operations and railroad transport have recently proven susceptible to disruption during significant rainfall events.
Source: Alan J. Nash

U.S. coal companies are often scrutinized for the climate impacts of burning the fuel, but the sector has also proven vulnerable to the sort of severe weather that scientists predict will be increasingly more likely due to rising global temperatures.

While linking any one weather event to climate change is complicated, scientists agree that rising global temperatures lead to an increased likelihood of severe weather. In the past several months, extreme weather has taken a toll on U.S. coal operations. For example, heavy rainfall early in the spring led to significant flooding that is still proving a major obstacle to moving coal to customers domestically and abroad.

There has been little research into the negative impacts climate change could have on the broader mining sector, think tank and consultancy firm adelphi concluded in a 2016 research paper. Mining companies have started to think about their direct emissions and the impact on climate change, but relatively few are considering the impacts climate change could wreak on their businesses, said Lukas Rüttinger, a senior project manager with adelphi.

Risks to mining operations around the world include heavy rainstorms, tropical cyclones, drought, worker health risks and supply chain disruptions. Even reclamation could be more challenging as vegetation currently located on a former mining site may not grow under the environmental conditions present two to three decades later, Rüttinger said.

"We're talking now," Rüttinger said of climate impacts on mining operations. "Especially since it's extreme events that are the main impact because we've been seeing an increase in the number and intensity over the past years already and that trend will just continue."

Impacts on US coal

U.S. coal producers are accustomed to closely watching Australia's cyclone season as severe weather in the area is a regular driver of global coal price trends. Lately, impacts from severe weather have hit closer to home.

Cloud Peak Energy Inc.'s Antelope mine in Wyoming received 10.2 inches of rainfall in May, June and July 2018. That is significantly higher than the 10-year average rainfall in the period of about 6.8 inches of rain. Even though the company put new procedures in place after flooding occurred in 2014, the heavy rains in 2018 interrupted its mining operations with reduced cash flows resulting in limitations to credit availability and access to new capital, according to a May 2019 bankruptcy court declaration from Cloud Peak CFO Heath Hill.

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"Some scientists have opined that increasing concentrations of [greenhouse gases] in the Earth's atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts and floods and other climatic events," Cloud Peak listed as a risk factor in a recent annual securities filing. "If any such effects were to occur in areas where we or our clients operate, they could have an adverse effect on our assets and operations."

According to the National Oceanic and Atmospheric Administration, the 18-month period that ended in July has been the wettest on record in the U.S.

Even more disruptive to the U.S. coal industry as a whole has been recent flooding in the U.S. Midwest which has reduced transportation options both for moving coal domestically and abroad since mid-March. While the Mississippi River has not hit historic peak flows seen in other years, this year was the longest duration of high water on record, said John Barry, a journalist and historian who wrote Rising Tide: The Great Mississippi Flood of 1927 and How It Changed America.

"Obviously, no single event can be directly tied to climate change," Barry said in an email. "The record flood on the Mississippi for peak flow is still 1927, before anthropogenic climate change was a factor. So you can't say with any real conviction that this year's events are caused by climate change. Just as obviously, people who don't think climate change may have been a factor in this year's events or definitely will be a future factor are simply fooling themselves, and the biggest fools are those who fool themselves."

There is little being done in terms of comprehensive planning between states and other entities to reduce risks caused by water levels remaining higher for longer, said Gerald Galloway, a civil engineering professor at the University of Maryland's Center for Disaster Resilience and an expert on Mississippi River hydrology.

"We don't have the governance to deal with it," Galloway said. "So what we're doing is relying on people to deal with individual components of it, and they've not done that very well."

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Apart from severe weather, U.S. coal producers point to mild winter weather dragging down demand in recent years. Foresight Energy LP, Consol Energy Inc. and Peabody Energy Corp. executives all noted a mild domestic winter impacted demand for coal on calls with investors spread throughout 2016, 2017, 2018 and 2019.

"We need a good winter, just a normal winter," said Foresight President and CEO Robert Moore on a late 2017 call with investors. "A normal winter would be a catalyst — given where export prices are at and demand is at right now — would be a catalyst for some price improvement."

While it may be ironic that one of the "primary culprits of the climate crisis" is experiencing some of its economic impacts, this is not a moment to say "I told you so," said Mary Anne Hitt, senior director of Sierra Club's Beyond Coal campaign. Instead, the public should be working to help and support communities affected by both climate change and the ongoing decline of the coal industry, she added.

"The coal industry has long tried to promote itself as our most reliable source of power, but its vulnerability in a warming world is one more reason why we need to shift to renewable energy," Hitt said. "We must not bury our heads in the sand and pretend that these catastrophes are one-off events."