Posted on 11/27/2005 9:55:30 AM PST by Diana in Wisconsin
Good times are back at the Skyline coal mine in Helper, Utah.
Arch Coal closed the mine and laid off 200 workers two years ago, when coal was just too cheap to justify extracting. But a mini coal boom is changing all that. St. Louis-based Arch is investing about $40 million to reopen the mine and local miners are lining up for work.
"We're in about as good a condition as we've been in some time," said Delynn Fielding, director of economic development for Carbon County, where the mine is located.
Fielding's words could apply to the coal industry overall. Companies like Arch have seen surging profits and record-high stock prices. Expansion plans are in the works, from new coal mines to coal-fired power plants like the controversial We Energies project in Oak Creek.
In Washington, a new energy bill has lessened the fear of regulatory hurdles for coal burning.
But while consumers pay close attention to gasoline prices, few follow the market for a rocky fuel that generates about half of the nation's electricity.
"For whatever reason, (coal is) not in the forefront of people's minds when they think about energy," said Fred Freme, a coal industry researcher with the U.S. Energy Information Administration. "But without it, half the lights in the country would go out."
Coal is in the limelight this fall since increased demand and tight supply have pushed up prices, said Mark Reichman, an analyst with A.G. Edwards & Sons in St. Louis. Prices rose thanks to factors ranging from a train wreck last spring to economic growth in China, he said.
The price of a futures contract for a ton of coal in the western United States rose from about $9 in June to $19.50 in October, and that's no blip, Reichman said.
"I think maybe we are entering a little bit of a new price range for coal," he said.
Big coal's profits
The benefit is clear for the nation's two biggest coal companies. The largest, Peabody Energy Corp., reported a 141 percent increase in profits during the third quarter. Arch reported a 75 percent increase.
Globally, the coal supply tightened two years ago when China switched from exporting coal to importing to feed its own energy needs, said Rich Bonskowski, a geologist with the Energy Information Administration. Coal consumers in Europe, the United States and India are bidding up prices on supplies from smaller producers like Australia and South Africa, he said.
Supplies in the United States tightened further in May when two trains derailed on a track that carried roughly 370 million tons of coal annually, about a third of the nation's supply. Shipments will remain hindered until December, Bonskowski said.
The derailment had a large impact because utility companies hadn't built up coal reserves last year, expecting the price to drop, Bonskowski said. With winter around the corner and electricity demand expected to rise, utility companies now have little choice but to buy coal on the open market, he said.
But coal remains a far cheaper energy source, said Bonskowski. In July, it cost about $17 to generate a megawatt of electricity for an hour using coal. It cost $59 to generate the same energy with natural gas and $64 with liquid fuels such as kerosene, Bonskowski said.
Coal carries hidden costs, such as the price of complying with air-pollution rules, but as long as the price remains lower than other energy sources, it will be attractive to utilities, he said.
Coal companies are increasing efforts to meet the demand and cash in on higher prices.
Arch executives have outlined $400 million worth of investment to open and expand mines from West Virginia to Utah, and Peabody's management has announced expansion plans that could generate 75 million tons of coal in five years.
Peabody's stock hit a record high Oct. 3 when it closed at $86.12 per share on the New York Stock Exchange. Arch soon followed when its stock hit an all-time high Nov. 3, closing at $80.31. Although they remain high, both stocks have declined since that time.
Regulatory incentives
New federal law, such as the 2005 Energy Policy Act passed in August, is paving the way for coal's expanded use, Bonskowski said. The biggest regulatory changes are geared toward the electric utility plants, which consume about 90 percent of all coal in the United States, he said.
The energy bill sets a limit on the plants' emissions, but gives utility companies wide discretion for meeting the limits, Bonskowski said. If a utility can't meet the standard, it can pay the government for extra emissions.
The energy bill doesn't mean it will be a free-for-all when it comes to building coal plants. Peabody has faced stiff opposition from the Sierra Club and other environmental groups as it presses forward with new power plants in the Midwest.
In Wisconsin, the Sierra Club and Clean Wisconsin are still fighting We Energies' expansion of a massive coal- burning power plant in Oak Creek, arguing that the Milwaukee utility neglected technology available to make it more environmentally sound.
However, construction has begun and some environmental allies conceded defeat after the state Supreme Court ruled in favor of We Energies in June. It would now take "extraordinary legal activity" to derail the $2.24 billion, 1,230- megawatt project due to be in service by 2010, We spokesman Thad Nation said.
Madison Gas and Electric and Sun Prairie-based Wisconsin Public Power Inc. are also investors in the Oak Creek plants.
In Kentucky, the Sierra Club filed a request with state authorities asking them to review Peabody's plans to build a new power plant. The move has stalled a regulatory process that Peabody began in 2002.
The Sierra Club plans to resist new coal plants where they are proposed nationwide because emissions from the plants increase cases of asthma and other respiratory diseases, said spokesman Brendan Bell.
"If even a fraction of these (power) plants get built, we will be stuck with these plants for 30 or 40 years," he said.
Coal Oil Bump
Fischer-Tropsch to the max!
BTW, how much uranium is there in typical coal-ash?
I think that Brendan would have a pretty hard time proving his case, with new construction plants that remove nearly all of the particulate emissions, which is what primarily cause the respiratory diseases he's referring to.
I have to admit that while I know Wisconsin has coal-fired electric plants, and I've stoked many a coal-fired furnace during my years at Ft. Mc Coy, the EnviroWackos here never say "Boo" about them, so I really have never given coal production a second thought.
I'm just kicking myself for not having stock in the company that posted a 141% gain. Yowzer! :)
Whatever happened to all that clean-burning coal in Utah?
I believe I read one time that coal plants do give off more radiation than nuke plants. It's all that uranium in the coal that goes up the plume.
It's still in the ground inside of a National Monument, of course.
PRICE GOUGING!
I remember using some coal stoves when I was in the Boy Scouts back when dinosaurs roamed the Earth. Man that stuff burns hot.
L
Ask, and Ye shall receive:
-That Trillion-Dollar Ripoff-- Clinton's Utah Coal Deal--
Be sure to ruminate on the tagline...
But then, slick was pandering to Robert Redford and the enviro-nazis.
"...back when dinosaurs roamed the Earth."
Hey! My kids say I resemble that remark, LOL!
Freepers are just soooo smart. I'm glad I posted this. Can't wait to read up on what Clinton buried; in this one case, anyway.
Not enough to mess with.
L
It is a pity that there isn't a way (that I know of) to legally just turn off the power to the Sierra Club and its supporters. Tell them that the power plant they opposed would have produced the power they want, but they stopped it. At the very least, when they lose a BS suit meant only to delay things, they should be fined or prevented from filing any suits for a certain period of time for abusing the legal system.
It helps coal in ALL of North America: Fording Coal bump.
I know that the radioactivity of coal-ash has been cited as an arguement
against coal-powered plants, but maybe that is changing:
http://www.fe.doe.gov/programs/powersystems/futuregen/index.html
I don't know if this scheme is actually workable (especially as
it's a guvmint project).
Also of interest:
http://www.learnaboutcoal.org
(takes a bit of time to load via dial-up)
I'm more interested in recovering the uranium for nuke fuel. 8-)
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