New Mexico Geological Society Annual Spring Meeting — Abstracts

Coal production has played a significant role in the economic development of New Mexico beginning in the 1850s and continuing to the present. One of the first documented mines began operating in 1861 at Carthage by the U.S . Army, supplying coal to Fort Craig. With the westward expansion and arrival of the railroads in the 1880s many small coal areas, such as Monero and Madrid, were developed. The mines in these areas supplied coal for the steam engine locomotives and coal and coke to the smelters in the Southwest. Yearly production first exceeded 1 million short tons (st) in 1889. This first upward cycle of coal production peaked in 1918, with over 4 million st of coal. Production dropped after World War I and continued to decline with the economic depression of the 1920s and early 1930s. Conversion to diesel engines by the railroad and cheap natural gas also had an impact on the coal industry, and by 1958 New Mexico coal production had dropped to 86,000 st.

The next upward cycle began in the early 1960s because of the growing population in the Southwest and California and the need for economical energy. Several of the large surface mines operating today (McKinley, Navajo, San Juan) in the San Juan Basin began operation in the 1960s or 1970s. During this time, Kaiser Steel opened the York Canyon underground mine (now Pittburg & Midway property) in the Raton Basin, which operated until late 1995. The Lee Ranch (Hanson Natural Resources) and La Plata mines (BHP/San Juan Coal) in the San Juan Basin began production in the 1980s. Today, all of New Mexico's coal mines are surface operations. All of these are dragline operations except for La Plata, which is a truck and shovel operation. San Juan mine is started a pilot underground mine in 1997.

Most of the coal from New Mexico is used for electrical generation. Two-thirds of the State's coal production is consumed by the three generating stations (San Juan, Four Comers, Escalante) located in northwestern New Mexico. Half of the electricity produced here is sent over transmission lines to California and Arizona. The remaining coal produced in New Mexico is shipped by rail to generating stations in Arizona from Pittsburg and Midway's (P&M) McKinley mine and Hanson Natural Resource's Lee Ranch mine. P&M's Ancho surface mine near Raton ships coal by rail to Wisconsin.

New Mexico's 1997 coal production was 26.77 million st, up 8% from the previous year's production. New Mexico ranks 13th in coal production for the nation. Wyoming is first with ten times the production of New Mexico. Coal is one of the four mineral fuels produced in New Mexico, ranking third in value behind natural gas (including coalbed methane) and crude oil. Total revenues from coal were $34.3 million in 1997. The majority of these revenues from coal go into funds that support public schools and education. The coal industry is also a major employer in San Juan and McKinley counties.

Coal resources underlie 20 percent (15 million acres) of the state's total area. Surface minable coal reserves for the San Juan Basin have recently been estimated by NMBMMR at 6.35 billion st. The Department of Energy estimates an additional 0.75 billion st of surface minable coal in the Raton Basin. These reserves are low-sulfur coals of subbituminous to bituminous rank that have potential for
development.

New Mexico coal costs are high, average price per ton is $22.64 for 1997, compared to $6/ton for Wyoming coal. Cost factors are ratio of seam thickness to amount of overburden, health and safety regulations, and reclamation costs. New Mexico coal can not easily compete with Wyoming coal because of the tremendous difference in seam thickness and the lack of an integrated rail network, particularly in the San Juan Basin. Cost of mining and transportation are significant economic factors, particularly because of the deregulation of the power indUStry. These changes are requiring the New Mexico coal mining industry to be as competitive as possible.