Underneath the Wyoming ground sits endless seams of coal from inches-thick veins near the Big Horn Mountains to 30-foot deep stratums in the heart of the Powder River Basin. Traditional uses for the ancient rock have sent billions to the state coffers, building and expanding schools and employing thousands of workers.
But that formerly stable industry has hit hard times. Competition from cheap natural gas and looming federal regulations slowed coal’s main use for electricity. And now a firm hopes to capitalize on the richness of Wyoming’s resources in a new and entrepreneurial way.
Ramaco Carbon has owned the mineral rights on a tract of land north of Sheridan since 2011. But since buying those resources, the value of coal produced for electricity has fallen and the viability of a new thermal coal mine competing in the Powder River Basin, the center of national thermal coal production, is uncertain at best.
In the face of a cantankerous market, the company recently announced it would mine coal for products like lightweight car parts and asphalt instead of the traditional use — shipping tons out of state at the expense of operators to feed power plants that create electricity. Moreover, it proposes building research and manufacturing facilities on-site to take coal straight from the mine to product development.
Some say Ramaco could bring an exciting new focus for Powder River Basin coal, while drawing a large workforce to Sheridan County. Others fear they’ve seen big coal ideas fail before, leaving little behind on the Wyoming landscape.
Ramaco’s facilities, surrounding the proposed Brook Mine, could bring more research, development and the creation of coal products to Wyoming, its leaders say. It would be a job creator and a revenue generator both for the region and the state. In a time when Wyoming coal is struggling to compete with cheap natural gas for the electricity market, many are looking for another way, another path for coal’s future. Ramaco’s plan is one step ahead of most coal companies, who are still lobbying for federal dollars on carbon sequestration to reduce emissions rather than create coal products, experts say.
But research and development are often separated from commercialization by a wide berth, where exciting possibilities are pushed out to sink or swim in the market.
Ramaco proposes bridging that gap.
“What we are trying to do in essence is mitigate those by building this from the ground up on the scene,” said CEO Randall Atkins. “The development usually takes care of itself. We are combining the science with the commercial.”
For now, many are curious, even hopeful, that Ramaco finds a way.
“I hope they have the silver bullet to figure that out,” said Jason Beggar, director of the Wyoming Infrastructure Authority. “There is so much opportunity there. I think Ramaco is right on in saying that coal is an incredible feed stock and burning it is the lowest denominator.”
Wyoming has spent millions in developing carbon capture, which would both reduce emissions and create a new product to sell: carbon dioxide. But like coal to product technology, carbon capture is still in the development phase. It needs public-private research dollars to make it cheap enough for business to take the risk of using it, Beggar has said before.
The key component in these endeavors for coal is adding value to Wyoming’s existing resource, before the market takes it away.
“It’s how can we take some that we already have and create more value out of that,” Beggar said. “Instead of putting it on a train at $10 a ton, can we make it into products that are worth hundreds of dollars per ton?”
Both Ramaco and the Infrastructure Authority face the challenges of commercializing new technology, he said.
“It would be a drastic step forward if they have a technology that they feel allows this process to be commercialized so much faster,” Beggar said.
Ramaco is not floating an unheard of idea. Researchers from the University of Wyoming and the University of Utah have been investing time and grant dollars into finding new uses for coal for years.
There is certainly a demand out there for some of the products that Ramaco has mentioned, said Rob Godby, director of energy economics and public policy at the University of Wyoming.
An added benefit of using coal for carbon fiber is that there aren’t the greenhouse gas concerns from burning coal, he said.
Lightweight carbon fiber, once it’s economical to develop, goes into a range of 21st-century fixtures.
Cars have gotten bigger and heavier at the same time that buyers want fuel efficiency and no-emission electric vehicles, he said. Carbon fiber could be used to satisfy those needs.
But it’s not as simple as looking for whether a product would be useful, he said, markets respond to availability.
While new products will likely be in the future for coal, the scale and the benefit to Wyoming are still uncertain.
Ramaco would be a small mine compared to its massive competitors in Campbell County, he said. It’s a drop in the bucket at this point in terms of revitalizing Wyoming’s coal sector.
And it’s too early to see if Ramaco, or its proposals, are a promised land for the Powder River Basin.
“It’s not going to happen tomorrow,” Godby said. “We are talking about a couple-decade process.”
Coal, which could be used to make anything from furniture to asphalt, will have to compete with oil and natural gas, both of which make some of the same products. And oil has been used as a feedstock for years. It’s ahead of coal, and it’s cheaper, experts say.
Whoever does find a way into this market will reap the benefits that come with the risk of being first, he said.
“The bottom line is, someone has to do the research, and if you can get in at the front end, the risk is high but that is where the benefits can be high.”
Knowing that the commercial success of coal products is a challenge, researchers in neighboring states have begun to focus purely on those economics.
The University of Utah recently announced a $1.6 million engineering grant for creating technology and cost-analysis that would take coal pitch and turn it into carbon fiber products. It’s also been the recipient of economic development grants.
The trend in Utah is to find the end products and markets first and then align coal from different regions of the country with those products.
“We have worked with our coal for so many years to burn it, so we know it inside and out,” said Greg Jones, assistant vice president for research at the university. “Can we work with the carbon fiber now … to make it inexpensive. … That’s the way we are looking now.”
Utah is still chasing Wyoming, where the technology is more advanced, he said. But the commercial piece Utah is investigating may create a coal to product market sooner.
For Wyoming, Ramaco’s proposals and the potential of other similar companies beg a number of questions, said Godby, the UW economist.
One question is revenue. It takes a lot less coal to create other products than it does to burn coal for electric.
In addition to the revenue picture, is the question of where coal refineries end up being located. If this sector grows, and it very well may in the years to come, Wyoming’s greatest benefit would be from manufacturing done in the state. If neighboring states get ahead of Wyoming in terms of refining coal for other products, then it finds itself in the same positions it is currently, shipping coal to other states, he said.
While Ramaco’s place in the future of coal is drawing attention throughout the West, some fear another Two Elk, a much-lauded coal project that amounted to nothing after decades of promises.
Then, too, there were questions early on and local incredulity despite support from the state and the local government over what would have been a large-scale project offering added value to Wyoming coal, local revenue and jobs.
“The neighbors would call it No Elk,” said Shannon Anderson of the Powder River Basin Resource Council, and a longtime critic of the Two Elk project. “The forest Service people would joke about it. There was a lot of local skepticism, but in the meantime they got multi-million dollar grants from the government. They got industry revenue bonds from the state of Wyoming. There was some credibility there that did get through.”
Like Ramaco, Two Elk brought in experts and had the support of research institutions. In Two Elk’s case, a leading national expert from Stanford. In Ramaco’s case, the Massachusetts Institute of Technology is said to be an early partner.
Also like Ramaco, Two Elk’s developers changed plans multiple times. From using waste coal to developing carbon capture, if there was federal or state grant money available, the company utilized it, Anderson said.
“We’ve just seen in this state a lot of projects like this,” Anderson said of Ramaco. “It looks shiny. It looks exciting. … There is some government money and at the end of the day it comes down to, is it going to pan out? Is it going to be viable? Is it going to create revenue?”
The news that the company wants to use its coal for carbon fiber products doesn’t necessarily allay the landowners group’s fears, which were initially related to how the coal is mined.
Ramaco’s CEO Atkins has promised that there will be more local communication to come as they unveil their intentions with the research facility.
That involvement will likely be welcome, as new questions have arisen in Sheridan County.
“There is no relation between the permit to mine and the application before [the Department of Environmental Quality] and this facility,” Anderson said. “It’s like they are two separate things that the company has been pitching and it is very confusing to us what are they actually going to do.”
Atkins has said issues with subsidence and water contamination in the mining permit have been addressed.
With multiple groups filing objections, the issue over Ramaco’s coal mining permit will go before the Environmental Quality Council, which hears contested environmental cases in the state.
Whether Ramaco can clear the market challenges ahead remains to be seen. If they can, the small mine north of Sheridan may take Wyoming one step closer to diversifying its coal industry.
