Coal Age

FEB 2015

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West Virginia Gov. Earl Ray Tomblin's recent signature on HB 2001 officially overturned the state's Cap-and-Trade Act that was signed into law in 2009. The West Virginia Coal Association (WVCA) applaud- ed the state's new legislative leadership for its quick work in moving the repeal through both Houses and onto the governor's desk. "This clearly shows how much things have changed in Charleston," said Bill Raney, president of the WVCA. "And this also shows the com- mitment our legislature and our governor have to taking the steps needed to begin getting our state's coal miners back to work. This is just the first component of that effort, and already, it is easy to see this truly is a new day for our state." Alliance Adjusts 2015 Production Alliance Resource Partners President and CEO Joe Craft sees demand for coal in the high-sulfur Illinois Basin (ILB), where his company mostly operates, stabilizing at 140 to 145 million tons annually for the next couple of years, barring a recovery in export markets, and he expects Alliance to grab at least its fair share of the business. The Tulsa, Oklahoma-based company posted both a record 2014 and fourth quarter in coal sales and production. Alliance recorded all- time high revenues of $2.3 billion and $500 million for the full year and quarter, respectively, translating to yearly net income of $497.2 mil- lion, 26% higher than in 2013. Sales totaled $39.7 million tons and pro- duction reached 40.7 million tons last year. In 2015, the company estimates sales of 41.4 million to 43.5 million tons and output of 40.4 million tons to 42.5 million tons. Last year marked the 14 th consecutive year of record financial and operating results for Alliance. Thanks in part to several new, large underground mines the company has brought online in recent years, including Tunnel Ridge in Pennsylvania and West Virginia, River View in western Kentucky and Gibson South in southern Indiana, Alliance has the capacity to produce even more coal if demand warranted. But for this year, at least, Alliance, which also has mines in Northern Appalachia and Central Appalachia, is going to keep its powder dry, so to speak, and produce approximately 4 million tons less than its installed capacity, Craft told analysts during a confer- ence call to discuss earnings on January 28. He cited tepid U.S. elec- tricity and export demand, regulatory pressures and low natural gas prices for that decision. Craft believes that, for the most part, the supply/demand equation in the ILB is more in balance "than what the markets are currently pro- n e w s 6 www.coalage.com February 2015 B R E A K I N G N E W S FutureGen Plan Scrapped The Obama Administration has suspended development funding for the billion-dollar proposed landmark project FutureGen 2.0, America's first near-zero emissions coal-fueled power plant project that would capture and store carbon dioxide. A Department of Energy (DOE) spokesperson said that the project's earmark, which had been in the form of stimulus funding, had been suspended to "best protect taxpayer interests." FutureGen, which developers had hoped would come online around 2017, would have been the only fully integrated carbon capture and storage project in the world. There are 22 carbon capture and storage projects in operation or construction globally, and the International Energy Agency initially called for at least 100 projects by 2020. The Meredosia, Illinois, project's first design was unveiled under the Clinton Administration's Vision 21 program and was introduced to the public by the Bush Administration in 2003. It was first shelved in 2008 after losing DOE support, becoming increasingly expensive, and, in the opinion of some, succumbing to political pressure. The reimagined FutureGen 2.0 project was unveiled in 2010. This week's suspension of the $1 billion in DOE funding has now left FutureGen essentially dead, as the FutureGen Alliance has told various media outlets they have no other way to make up the money. One producer and supporter quick to speak out was Peabody Energy; Chairman and Chief Executive Officer Gregory Boyce is now urging the administration to reconsider. "It makes no sense to pull the plug on $1 billion committed to America's signature near-zero emissions power project at such a criti- cal time for these investments in technology," he said. "The adminis- tration has pledged $1 billion for advanced coal projects in China, and I urge them to support investments in the United States. We have the knowledge to advance low-carbon technologies to commercial scale and must demonstrate our leadership and our will." Gov. Earl Tomblin (above) speaks to the WVCA (January 2014). WV Governor Signs Bill Repealing State Cap-and-Trade Act

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