Coal Age

DEC 2012

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news continued Until recently, Alliance largely avoided the export market. But that is starting to change. "We have been selling about one million tons a year into export markets," he said. Until recently, most of it was metallurgical coal. Now, Alliance is "seeing quite a bit of interest in thermal export markets out of our Gibson North and River View mines," a reference to underground steam coal mines near Princeton, Ind., and Uniontown, Ky., respectively. Going forward, the company anticipates its Gibson South mine under construction also near Princeton eventually could generate additional export sales. The mine's coal quality "is in high demand for export markets and domestic utilities," he said. Initial production is targeted for the fourth quarter of 2014, with five continuous miner units expected to be up and running in 2016, when Gibson South should be producing at the rate of 5 million tons a year. In May, longwall production got under way at the new Tunnel Ridge underground steam coal mine in Ohio and West Virginia. That mine is seen producing 2.1 million tons in 2012, 5.8 million tons in 2013 and, once the longwall is operating at DATELI N E WASH I NGTON Four More Years BY LUKE POPOVICH " that the EPA has violated the Clean Air Act by requiring controls for a suite of pollutants under the guise of targeting mercury, when in fact mercury is realistically a very small component of the benefits and the emissions. By imposing the same emissions standard on both gas and coal, the EPA wants to appear even-handed—like the king who proclaims his law is fair that forbids both princes and peasants from sleeping under bridges. The UMACT has persuaded power companies already tempted by the low price of natural gas to retire their older coal plants and retrofit their newer, bigger ones. The second troubling rule we face is the EPA's New Source Performance Standard (NSPS)—for controlling greenhouse gas emissions from new coal-based power plants. The proposed rule is not yet final but that hardly matters; by a quirk of the law the NSPS is already legally binding. The EPA has arbitrarily set the greenhouse gas emissions standard so low it can only be achieved by either natural gas plants or coal units equipped with carbon capture and storage technology, which doesn't exist at a scale coal plants can use. So the NSPS likely will mean no new coal-based plants will be built in this country. That would be the same country that has more coal than any other. No new coal plants would of course mean no new high-wage related jobs for organized labor. That prompted a half-dozen union heads to write the president this fall, congratulating him on his November victory but suggesting his EPA is forgetting who helped to elect him. The EPA's proposed NSPS "discriminates against new coal units," said labor leaders. Without "substantial change," they warned, "the rule would force all new base load generation to natural gas, abandoning our nation's largest fossil energy resource along with its jobs and infrastructure in mining, boiler and pollution control fabrication, construction and rail transportation." When coal has a headache, a lot of Americans feel it. That means it has lots of well-wishers. It's what comes of providing electricity to millions of households and businesses in dozens of states. Popovich is a spokesperson for the National Mining Association, the industry's trade group based in Washington, D.C. It's as if you were a passenger expecting a relaxing cruise only to learn Captain Ahab was at the helm. 18 " Or is it "for more jeers"? Here's how bad it's been. Given a choice between two presidential candidates who both pledged support for an "all of the above" energy policy—i.e. using all domestic energy sources—Americans elected the one who was just kidding. The president's "all of the above" line was for campaign consumption only. He had drawn the line above coal. In effect, the administration's real energy policy has been: Let's use as little as possible of the world's largest supply of affordable fuel. That's the sobering, post-election reality we will face for another four years. It's as if you were a passenger expecting a relaxing cruise only to learn Captain Ahab was at the helm. Naturally the environmental community wasted no time in claiming the president's victory constitutes a mandate for windmills, solar panels and carbon controls. The president ran from these notions for much of the campaign, wisely figuring that a shrinking middle class had more pressing concerns to worry about. But never mind. His win also gave rise to a chorus calling for a carbon tax. Some free market think tanks even legitimized the idea before funders pulled their chain, reminding one and all of the damage that the economy would suffer from rising energy prices. Thankfully, the election also left us with eager allies in the House, where they remain in charge, and good friends in the Senate, where they aren't. Our friends in both Houses may disagree on the size of spending cuts and the value of Obamacare but they all agree that a tax on carbon emissions won't happen: it is bad for the economy, jobs and terrible for coal. Eyes are turning to the regulatory front, where the battle is now joined. The EPA has set in motion at least two rules that could have a profound impact on coal-based power generation. The utility maximum achievable technology (UMACT) rule for controlling mercury and air toxic emissions is final but will be challenged in court. Various industry groups—including the NMA—and some states may argue December 2012

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