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news continued Representatives. It was unclear in late January if the measure stood much of a chance at passage in this year���s ���short��� session, which is scheduled to adjourn in late March. By allowing fuel-cost adjustments to occur outside of a formal rate case, ���this component of utility rates can change in a more contemporaneous manner to when the underlying costs are incurred by the utility,��� said the Kentucky Resources Council, the state���s leading environmental group. Utilities do not earn a profit on the use of a FAC, but instead pass through changes in fuel costs on a dollar-for-dollar basis. Anthracite Production Increases in Pennsylvania With Blaschak Coal and British-based Atlantic Coal plc among those leading the way, Pennsylvania���s anthracite coal producers bucked a national coal trend in 2012 by increasing their output of the hard mineral known for its high carbon content and few impurities. The Keystone state���s anthracite field typically turns out just over 2 million tons a year, a good portion of it shipped overseas. Anthracite production in Pennsylvania approached 1.8 million DATELI N E WASH I NGTON The World Economy Rebounds with Coal BY HAL QUINN, PRESIDENT & CEO, NATIONAL MINING ASSOCIATION Note: This is an abridged version of a January 16 speech to the 9th Annual State of the Energy Industry Forum in Washington, D.C., hosted by the U.S. Energy Association At this forum last year, I made the bold observation that coal would surpass oil as the world���s primary energy source in 2020, or soon thereafter. Well, today I must admit error. It now appears, according to Wood McKenzie, coal will surpass oil as the world���s largest energy source by 2015, if not before. What explains coal���s elevation to the global energy throne? Start with emerging economies that are following the industrialization and urbanization path paved by the West���only faster. China already has more than 160 cities with populations exceeding 1 million people and is on pace to reach an urban billion by 2030. That is a lot of people plugging into the grid, and a tremendous amount of infrastructure built and powered by coal for steel, cement and electricity. Ironically, focusing on the China story actually minimizes the growing coal demand elsewhere in the world. In India, where coal now generates almost 65% of electricity, coal will likely generate 80% of India���s electricity as the country seeks to double its power generation capacity within the next decade. Forty percent of Indians today still lack access to the electric grid. India���s per capita electricity consumption today is a mere 10% of the average in the developed world. Just bringing the city of Mumbai to our level of cooling would equal the air conditioning needs of the entire U.S. But the increasing appetite for coal is not confined to the developing world. Japan is expected to increase its coal imports to replace part of its nuclear capacity. Germany is also turning to more coal, in part to offset abandonment of part of its nuclear fleet but also in response to expensive gas across Europe���three times more expensive than U.S. gas last summer. The emerging world���s growing coal appetite and the coal renaissance in Europe all point to 1.2 billion tons of coal demand growth within five years. 16 www.coalage.com Let���s now turn to the U.S. On the export side, the 124 million tons we shipped abroad last year is twice the level exported three years ago. And the planned expansion of U.S. coal export infrastructure will support doubling that tonnage again. We���re happy to contribute to the president���s National Export Initiative by adding an $18 billion positive contribution to our balance of trade. Unlike the current debate over natural gas exports, there is no need for our domestic coal customers to fret about growing exports. We have the most of what the rest of the world wants��� almost one third of global coal reserves. Coal exports will not entirely off-set the dramatic reductions in coal consumption here in the U.S. We have experienced a 200 million ton drop-off in the utility market since 2008. But looking beyond today���s headlines, we believe coal���s resilience in the U.S. utility market will be underpinned by two factors. First, the recent and remaining build-out of 17 GW of new coal will be comprised of advanced high-efficiency units. Second, the remaining fleet of base load coal plants will be on average larger, more efficient and running at higher capacity factors. When we view the landscape of coal plant retirements forced by a combination of low gas prices and EPA policies, most of them are on average older, smaller and less efficient. A post2018 coal fleet comprised of approximately 280 GW of larger more efficient plants operating at pre-recession capacity factors of 72% can recover at least 100 million tons of lost coal consumption. This brings me to my final point. We are not well served by policies that deliberately halt building new advanced coal plants in the U.S. This will only slow development and deployment of cleaner coal technologies around the world tomorrow. It represents a failure of ambition and a failure of policy. The rest of the world is growing with coal. If we intend to compete with the fastest growing economies that will comprise 80% of global GDP in the not too distant future, we better keep all of our energy players on the field. February 2013