While realizing record-low costs at its Powder River Basin operations, Peabody Energy Corp. continues to struggle with a depressed market for thermal coal amid another U.S. surge in the COVID-19 pandemic.
The world’s largest private coal producer has lost more than $1.7 billion so far this year, including $64.8 million in the third quarter reported Monday morning. At this time last year, the company had posted a net profit of nearly $102 million.
The pandemic and market have made 2020 “a year unlike any other,” said Peabody President and CEO Glenn Kellow. “The global economy and brutal markets continue to be impacted by the pandemic.”
Peabody’s North Antelope Rochelle, Caballo and Rawhide mines in Campbell County sold 23.6 million tons of coal in the third quarter, compared to 30.2 in the same period of 2019, a 22% decline, according to Monday’s quarterly report.
That’s reflective of an overall 24% decline in PRB coal production so far this year, while coal made up about 19% of the power generation in the United States, the company reports.
The $7.93 per ton cost realized by Peabody’s Wyoming mines is a record, said Peabody Chief Financial Officer Mark Spurbeck. Despite a 22% drop on coal shipments in the quarter, the low cost-per-ton helped the basin produce revenue of $11.26 per ton, up slightly from the $11.20 in 2019.
While the third quarter was a little better for Peabody’s PRB operations, the long-term outlook remains an accelerated decline, the company reports.
“In the U.S., the impacts of COVID-19 have accelerated a multi-year decline in coal demand,” according to the third-quarter report. “Year-to-date through September, coal generation is down 24% and represents 19% of the overall generation mix.”
Along with decreased production and demand, Peabody is “deeply disappointed” by a federal court decision to uphold the Federal Trade Commission’s denial of a proposed joint venture with Arch Resources Inc., Kellow said.
The joint venture would have put the companies’ Western thermal coal assets under one operational umbrella with Peabody owning 66% and Arch 34%. It would have allowed for savings of about $120 million a year for a decade while becoming more competitive with cheaper natural gas.
Since the denial, Arch has said it plans to divest itself of its Powder River Basin assets and expects to reduce production by 50% over the next couple of years.
Kellow didn’t give any indication Peabody is inclined to get out of the thermal coal business.
“With respect the Powder River Basin, it’s done an amazing job this quarter,” he said. “But the level of activity we’re seeing is below what (you’d expect) to see.”
Peabody also announced a new agreement with its surety providers to guarantee reclamation at its mines.
Argonaut Insurance Co. had filed a lawsuit against the company demanding more collateral from Peabody to continue guaranteeing about $203 million in reclamation bonds. Peabody had provided $75 million, but it’s “deteriorating” financial situation is unstable enough that it’s not enough, the suit claims.
Along with the difficulties faced by the coal industry, Peabody wrote down the value of its flagship North Antelope Mine by $1.42 billion earlier this year.
The company also has been hemorrhaging valuation as its stock continues a downward trend that has seen it lose nearly 88% of its value this year. Peabody stock was at $10.04 on Jan. 3 and was down to $1.22 Monday morning.
Peabody has negotiated a new agreement with “virtually all” of it surety providers, Spurbeck said. The company will provide another $75 million in collateral and $200 million worth of secondary liens on equipment. In return, the surety providers have agreed to not demand additional collateral until the end of 2025 or cancel the bonds.
The agreement is contingent on Peabody’s credit providers approving it.
Recalling stories of his father’s service during World War II, Doug Hughes begins with a peculiar memory.
“He said they bombed a lot of whales,” he said.
He then lets out a sharp, abbreviated laugh, a single “Ha!” as if he couldn’t believe the absurdity of the whole thing even as he said it.
“He” was his father, Bill Hughes, now a 99-year-old World War II veteran who lives at the Legacy Living and Rehabilitation Center in Gillette.
But more than 75 years ago, Bill was a flight engineer during the war, flying mostly on B-17 Flying Fortresses.
“They were supposed to be training for submarines because there had been submarine activity,” Doug said. “This was around the continental U.S. now, so on their training missions, they did have live payloads and when they thought it was an enemy sub, they dropped them. He thought it was a lot of whales, he always told me.”
Toward the end of Hughes’s service, he was sent to Okinawa, Japan, to fly in B-29 Superfortresses with the bomber group that contained the Enola Gay, which dropped the world’s first atomic bomb in war.
Bill Hughes now lives at the Legacy and dementia has crept in to rob him of such memories. It would be difficult to ask him about the memories he’s retained because his hearing is failing him. It’s up to Doug to share his father’s war stories now.
He’s Bill’s only child, which makes Doug the keeper of a legacy of one of the state’s approximately 699 living veterans from that historic and world-changing struggle. Only two states — Alaska and South Dakota — have fewer living World War II veterans.
The U.S. Department of Veterans Affairs estimates that roughly 296 World War II veterans die each day and, in many instances, with them go their stories. From that great mobilization of American military might came more than 16 million troops who answered their country’s call. Today, barely more than 325,000 remain.
Holidays are retrospective events, a time for memories and stories, and Veterans Day is no exception. Originally called Armistice Day in November 1919 by President Woodrow Wilson to commemorate the cessation of hostilities in World War I. Then came World War II and Korea.
In 1954, Dwight D. Eisenhower, perhaps the most celebrated general-turned-president since George Washington, signed into law a bill that placed what had been renamed Veterans Day on America’s national calendar for Nov. 11.
There could hardly have been a better public figure to usher in the transition from Armistice Day to Veterans Day. In a public proclamation, Eisenhower presided over the official change so that “a grateful nation might pay appropriate homage to the veterans of all its wars who have contributed so much to the preservation of this nation.”
Eisenhower was talking about the likes of Bill Hughes, and 66 years later, Doug is talking about him, too.
Doug is fighting the good fight to prevent his father’s story from slipping from the world completely, but it’s a lonely fight.
“The problem is he’s outlived all of those types of contacts,” he said of Bill’s contemporaries. “There would have been a lot of them, but I can think of none that are still living.”
Family isn’t much help either.
“My cousins would know less than I do,” Doug said. “I’m about your only liaison.”
Bill Hughes began World War II not in the airplanes that he’d eventually occupy as a sergeant major, but in the civil service stationed in Annette Island, Alaska. He’d graduated from high school in 1939 and attended a few years of college, for a while at Black Hills State University and then at the University of Washington, where he studied business.
Doug said he thought the civil service seemed like a good option for his father.
“He was a business major, and I think it sort of fit with what he’d been studying,” Doug said. “He dealt more with personalities.”
That’s not to say he was far from the action of war. Around the time Bill Hughes arrived at Annette Island in June 1942, the Japanese attacked the continental United States for the first time by striking at Dutch Harbor, Alaska.
But the story that Doug remembers his father telling wasn’t one of battle; it was of an airfield crash.
“When he was on Annette Island, they had a USO show coming in,” Doug said. “It was a poor airfield, muddy and sort of marshy. Anyway, it was very foggy, and the cargo plane crashed and burned and killed the entire planeload of USO.
“He said it was a pretty bad deal. I don’t know how many were on it, but obviously it was a bad memory. It was a wartime casualty, but not from combat and they weren’t military personnel either, except for the pilots.”
By the time August 1943 rolled around, Hughes knew he needed to enlist if he wanted to avoid the randomness of the draft, and he chose the Army Air Corps. While he didn’t know the exact mechanism by which it happened, Doug said his dad’s civil service time kept him from going into the Air Corps as a private. He went in as a sergeant instead.
Bill’s father, Cecil Clyde Hughes, had served in World War I, so Bill and his younger brothers came by their military service honestly.
“His brother Cecil, a couple of years younger, was in Patton’s tank corps,” Doug said of his uncle. “He had it a lot rougher. They enlisted together — it’s a funny story.
“That might be one of the reasons Dad waited until ’43 to actually enlist because, his brother being two years younger, couldn’t enlist until then. They enlisted in the Army Air Corps together, but during the physical they discovered that his brother was color blind. They washed him out of the Air Corps, of course, and he ended up in an armored division stuck in a tank.”
Some of Bill’s stories made it easy for Doug to recognize the man he calls Dad.
“He always talked about (how) he was a ranking NCO, non-commissioned officer, and in the cafeteria at lunches and dinners, nobody could leave the table until the ranking officer left,” Doug said. “He was a very slow eater; the guy could chew forever.
“They’d always be sitting there for an extra 30 minutes waiting for him to eat, and it never made them too happy.”
Doug laughed at the thought as if he knew their frustrations all too well.
After he was discharged from the Army in 1946, Bill resumed a life that war had interrupted. He went back to college and graduated from the University of Wyoming with a business degree in 1948. He married Iris Bryan of Sundance in 1949.
He taught high school briefly in Buffalo, then went into business with his father-in-law at The Model Grocery in Sundance, first going in halfway as a partner and eventually buying his father-in-law’s share of the business. Bill eventually sold the store in 1957, at which time he went to Casper to work for Pan American Petroleum and Transport Co. for three years.
In 1960, he went into the clothing and furniture business with his father in Moorcroft, in the building that now houses Diehl’s Supermarket on North Bighorn Avenue. He eventually also bought his father’s share of the business.
Doug said his father in many ways lived an idyllic vision of the American Dream that thrived in the post-war years. He retired young, Doug said, at just 55 years old. The business acumen and frugality he’d exhibited since the war made that possible.
“He sent all of his military paychecks — he kept a tiny amount — and sent them all home to his dad to buy cattle for him,” Doug said. “His dad had a tiny ranch.”
The cattle were waiting on Bill when he got home from the service in 1946.
“And he sold them as needed to go to school,” Doug said.
Lifetime of service
Doug is convinced that his military service shaped the man he knew as father.
“It gave him a tremendous amount of organization and dedication,” Doug said. “He was a very successful businessman. He was very goal-oriented. He was very public-oriented. He was mayor of Moorcroft, councilman of Moorcroft, school board. I guess he volunteered a lot.”
Bill’s experience in World War II affected him, made him critical of war.
“I know he was very proud of his service,” Doug said. “He hated war. He hated the wars in Vietnam and Korea because he thought we were sacrificing a lot of lives in wars we weren’t really trying to win.”
Doug himself came of age during the Vietnam War in particular.
“I had a 2-S college deferment,” Doug said. “As long as I stayed in school, didn’t get expelled and kept my grades up, you had a 2-S. It had changed somewhat because I didn’t go to college until 1970, so there wasn’t a mandatory draft like the guys from ’66 to ’70. I never went. I never went into the military.”
As a result, Doug has no war stories of his own, only his father’s.
While Bill is 99, his son is nearing age 70 and when pressed to think about it, can’t remember many other stories about his father’s service in the war. It’s not because his memory fails him. It’s because those were all the stories he was told.
A reluctance to talk about or relive the horrors of war is something many veterans who have seen it have in common.
Could Doug have asked for more? Surely. Should he have asked for more? He’s not quite sure.
“That’s a tough question,” Doug said. “That era of men, it was mostly men then, they didn’t talk about it unless asked. Dad talked about some of the things I told you, and maybe that’s my fault for not asking him more, but it wasn’t a subject that he just brought up.”
With his father now in his twilight years, Doug knows new stories won’t be forthcoming. He knows his memories represent more than just his own.
“He was a good man,” Doug said. “Well, he is a good man. He’s just not the same man anymore. He can’t really communicate anymore.”
Do the stories Doug remembers represent the totality of his father’s World War II experience? Most definitely not. Were they the most consequential and important stories? Possibly not. Are they enough, in number, in substance, as a record of one veteran’s legacy?
Regardless of the answer, Doug knows they’ll have to be.
There won’t be patients in the Close to Home Hospice House anytime soon.
Campbell County Health has announced a new timeline for the suspension of its inpatient hospice services at the Gillette facility.
For the next three to six months, the hospice wing of Close to Home will remain closed as CCH and the Campbell County Healthcare Foundation work toward a long-term solution, they said in a joint statement.
The inpatient end-of-life services were stopped in September because there wasn’t enough demand for them, CCH CEO Colleen Heeter has said.
Also, as local COVID-19 case counts and infection rates have spiked in Campbell County, CCH has seen an increase in hospitalized patients and has dealt with staffing shortages throughout its system because of ill and quarantined employees.
“We anticipate these issues will continue for several months,” the statement said.
On Friday, CCH had 103 employees out either because of illness or quarantine, Heeter said.
For the past two months or so, Heeter said that CCH has had an average of about 80 to 120 employees out a day. With the ongoing pandemic rolling ahead through Campbell County, it is unclear how long those staffing issues may persist.
While dealing with those pandemic problems, reopening hospice services at the same time doesn’t seen doable, she said.
“We thought that that would give us enough time to really evaluate what the COVID status is in three to six months,” Heeter said. “That might be helpful when we don’t have as many staff quarantined or as many patients in-house where we need to care for them. We thought that would be a good time frame for us to evaluate those sorts of resources as well as our financial resources.”
Hospitals throughout the state have been approaching capacity as their beds become filled with COVID-19 patients. On Friday, there were 147 COVID-19 patients in Wyoming hospitals, according to the Wyoming Department of Health.
Heeter said that Campbell County Memorial Hospital has taken on patients from other hospitals, COVID-19 and otherwise, to help those who need the space.
“With all of the community contributions and constant fundraising that supports the (hospice) house in addition to all the other things the foundation does, it breaks my heart to see that happen,” said CCH Hospital Board Trustee Lisa Harry, the liaison between the hospital board and the Campbell County Healthcare Foundation. “At the same time, COVID has taken its toll on it.”
CCH supplies and provides financial support for the hospice care provided through inpatient services at Close to Home. From the Healthcare Foundation’s perspective, the facility was built with donated money and is unable to serve its purpose without that financial help from CCH.
“My heart is with hospice, but I’m very torn,” Harry said. “And believe me …. people are upset and they’re wondering where their money’s going that’s been donated. What people need to understand is that money doesn’t go to pay for hospice services.”
While she previously said a lack of demand for hospice services prompted shuttering the facility, Heeter now acknowledges it was more than that.
While the services were never meant to be a big money maker for CCH, current circumstances brought on by COVID-19 and ongoing staffing issues brought about the decision to suspend the services.
“We’ve always known the Hospice House wasn’t going to be a profitable venture,” Heeter said. “That wasn’t why it was created. If we continue to lose as significant numbers as we are, it’s difficult.”
Inpatient hospice services are available at the Legacy Living and Rehabilitation Center while the hospice wing of Close to Home remains closed.
CCH quietly shut down Close to Home’s inpatient services at the end of September. In mid-October, when word of Close to Home’s closure began circulating on social media, CCH released a statement and acknowledged the temporary shutdown of inpatient hospice services at the facility.
During a recent CCH Board of Trustees retreat, Ashley Montague, the director of Home Health Hospice, laid out some of the reasons for the change in services.
Close to Home had either zero or one patient for 27 days in March, 19 days in June, 12 days in July and 25 days in August, she said.
“The ability to provide hospice care is very important to all of us, and we value the community’s support for hospice in Campbell County,” the statement released Friday said. “We ask for your patience while we deal with these difficult issues. Hospice services continue to be available where the patient calls home or at The Legacy Living and Rehabilitation Center.”