A company has scaled back production at a Western Colorado coal mine and eliminated 150 jobs there.
Bowie Resources announced that it’s reducing production at its Bowie No. 2 Mine near Paonia following the termination of a coal supply agreement with the Tennessee Valley Authority as well as what the company characterized as continued weakness in coal demand in the region. In the process, the company cut 150 positions at the mine.
“We regret the need to take this difficult action,” said Gene DiClaudio, chief operating officer. “We want to thank the hard-working employees at Bowie No. 2 for their dedication and their strong commitment to running a safe and productive operation.”
The reduction is expected to cut production by about 33 percent of the 3.3 million tons produced in 2013 and cut by 40 percent a work force that had numbered 375.
Bowie will provide employees who lost jobs at the mine 60 days of wages and benefits in addition to a severance package. Relocation assistance will be available to employees who fill positions at other mines operated by Bowie Resource Partners, the parent company of Bowie Resources.
“We hope to retain as many of these valued members of the Bowie team as we can — and plan to offer positions at BRP’s other mining operations to as many affected employees as possible,” DiClaudio said.
Bowie Resource Partners also owns and operates three underground coal mines in Utah. The company expects to sell a total of 17 million tons of coal this year.
There’s a possibility production some day could increase again at the mine near Paonia, DiClaudio said. “Although we are reducing production at Bowie No. 2 at this time, we believe there may be opportunities for Colorado coal in the future — both here at home and in the global marketplace.”
The layoff at the Bowie mine follows a decision last year to idle the Oxbow Mining Elk Creek mine near Somerset. The closure followed a fire that damaged mining equipment and led to the layoffs of most of the work force there.
Stuart Sanderson, president of the Colorado Mining Association, blamed the Bowie layoffs in part to laws and lawsuits aimed at reducing the use of coal in generating electricity.
What Sanderson called “sweetheart” settlements of lawsuits resulted in the closure of three power plants and the retirement of 27 boiler units operated by the Tennessee Valley Authority.
In Colorado, coal production hit a peak of nearly 40 million tons in 2004, but annual production has dropped more than 40 percent since then, Sanderson said.
“Since 2007, Colorado has launched a war on coal jobs and affordable energy through mandates for renewable energy and other high-cost energy sources like natural gas,” Sanderson said. “The so-called Clean Air Clean Jobs Act, which will shut down about 950 megawatts of coal power plants along the Front Range, will further constrain markets and cost producers up to 4 million tons in production and $100 million annually in sales.”
A federal plan to reduce carbon emissions from power plants could eliminate coal as a fuel for electrical generation, further affecting the economy and jobs, Sanderson said,.
An analysis of the proposed Environmental Protection Agency rules conducted for the U.S. Chamber of Commerce Institute for 21st Century Energy concluded annual gross domestic product would decline by $51 billion, leading to an average of 224,000 fewer U.S. jobs every year through 2030. Meanwhile, electricity prices would move higher, in turn reducing discretionary household income.