Coal Age

FEB 2015

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Foresight's Deer Run longwall mine in Montgomery County at 5.5 mil- lion tons; and Murray's New Era deep mine in Saline County, also at about 5.5 million tons and just slightly below Deer Run. In all, the Midwestern coal-producing state had 14 mines that turned out more than 1 million tons last year, EVA said. Other major producing mines included Prairie State Generating's Lively Grove underground mine in Washington County, Knight Hawk Coal's Prairie Eagle underground mine in Perry County, Alliance Resource Partners' Pattiki underground mine in White County, Peabody Energy's Gateway underground mine in Randolph County, and Arch Coal's Viper underground mine in Sangamon County. Phil Gonet, president of the Illinois Coal Association, said he was pleased with the industry's performance in 2015, which he noted was its best since the U.S. Congress passed the Clean Air Act (CAA) Amendments in 1990. Before then, Illinois consistently produced 60 million or more tons of steam coal annually. But the CAA's tighter air quality requirements caused some electric utilities to burn coal with a lower sulfur content than is commonly found in Illinois. As a result, the state's production steadily fell from about 62 million tons in 1990 to a low of 30 million tons in 2003. Now, Illinois individually and the Illinois Basin as a whole arguably are the brightest success stories in the U.S. coal industry. n e w s c o n t i n u e d B Y L U K E P O P O V I C H The Other Washington D A T E L I N E W A S H I N G T O N It is truly the winter of industry's discontent. Producers just survived a tough year and now they face another one that looks to be little better. Prices for this vital fossil fuel have collapsed, dropping more than 50% in six months while share prices nosedive. Yes, it's been a hard slog for the oil business these days. The point of this gallows humor is that coal isn't alone. The dramatic and unanticipated fall in energy prices is a global plague on all our houses. Natural gas producers are having their own year of living dangerously, struggling to pay back loans on highly leveraged acquisitions that just a few years ago seemed golden. So cheer up: if misery really does love company, this is a great time to be in the coal business. We've got plenty of miserable company. Maybe a sign of how bad things are is when the only good news comes from Washington. Yes, that's counterintuitive. Normally, if you say the nation's capital is the best thing fossil fuel has going for it over the next 12 months, you would be cut off from further refreshments and put in a cab home. But look beyond the Obama administration to the other Washington. The new Congress echoes our emphasis on boosting energy supply, not restricting it. It shares our view on the importance of fostering econom- ic growth rather than stifling it with regulations. And more congres- sional members believe in keeping energy costs affordable instead of raising them in the vain hope that developing countries will raise theirs, too. They want the market, not the Environmental Protection Agency (EPA), to determine which technologies are best. They get it. And with more mining state allies chairing major Senate committees, expect careful oversight of administration policies. The EPA may finally have adult supervision. The agency will explain exactly how it consulted with grid regulators in developing its Clean Power Plan when regulators at the Federal Energy Regulatory Commission (FERC) claim they weren't con- sulted. The Office of Surface Mining (OSM) may have to explain why we need a new stream buffer zone rule when impacts from mining are already regulated. Congress may want to know why the Mine Safety and Health Administration is misallocating mine safety resources, or suspending due process in its new Pattern of Violation policy. Appropriations bills offer opportunities for legislative relief, too. The president said he has a pen and would use it. Congressional appropria- tors can empty his inkwell. "Look for Washington to provide a counter- weight, if not a solution to our regulatory challenges," said National Mining Association (NMA) CEO Hal Quinn. Finally, there is the Supreme Court. The justices agreed to hear NMA's challenge to the mercury and air toxics rule. Arguments are expected expected March 25, when NMA's lawyers will remind the court that this rule delivers only $4.6 million in benefits at a cost of $9.6 billion annually. The EPA thought this was reasonable. If any Coal Age reader will pay $960 for something that costs between $0.04 and $0.06, please write to me today. By one estimate, overturning the mercury rule could restore up to 37,000 gigawatts of coal-based power. By upholding NMA's argument that costs must be considered, the high court can show where the EPA's discretion ends and respect for the law and common sense begins. That said, NMA has no illusions about the challenges still to come from the administration's coal agenda. That agenda was summarized in a recent statement by the U.S. cli- mate negotiator, Todd Stern. At the U.N. climate change conference in Lima, Peru, this winter, Stern told delegates that "The great imperative is to break the link between growth and fossil fuels." What about the enduring link between better living standards and fossil fuels? What of the link between Asia's reliance on coal and the alleviation of poverty? Coal and human welfare is the administration's missing link. Luke Popovich is a spokesperson for the National Mining Association, the industry's trade group based in Washington, D.C. " Look for Washington to provide a counterweight, if not a solution to our regulatory challenges. " — NMA CEO Hal Quinn 14 www.coalage.com February 2015

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