3 Rivers Clean Energy

Innovative Energy Solutions for the Future
From Southwestern PA and West Virginia

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Energy from Coal

About 52% of the nation's electricity is produced from coal-fired generation plants. Current plans call for the construction of 124 new plants with an additional 73 gigawatts (billion watts) of electricity to meet growing U.S. demand for electricity. Coal burning, primarily for power generation, also represents the second largest source of carbon dioxide emissions (believed to be a primary cause of global warming) among fossil fuels in the country (37%), behind petroleum (42%, primarily for liquid fuel use), with the remainder resulting from the use of natural gas (21%). As such, coal-fired generation and its climate effects are highly controversial across the world today.

Coal represents 90% of the country's hydrocarbon fuel reserves. At an extraction rate of 1 billion tons/year, it is estimated that there is enough supply for 250 years. Some experts say the reserve is twice as large. CONSOL, headquartered south of Pittsburgh, is the largest supplier of high energy (BTU) coal in the country.

Coal will be the provider of baseload electricity for decades to come and will likely be the primary source of fuel oil as the country struggles to move away from imported oil. Biofuels will make a significant contribution in the form of ethanol, but there are limitations (energy value per acre) that cap its level of potential contribution.

The ideal would be to move toward using only renewable energy sources, but the reality is that coal will be the world's energy source for as long as a century. Appropriately, much attention is being focused on developing clean coal technologies and practices to mitigate environmental impacts of both mining and burning coal. The federal government is providing hundreds of millions of dollars to the National Energy Technology Laboratory, which has its primary facilities in Morgantown, WV, and Bruceton, PA (south of Pittsburgh), to develop these technologies and processes. CONSOL devotes much of its R&D funding to clean coal as well. The federal government has launched a major program called FutureGen, which is working toward zero-emission coal-fired generation. The Department of Energy is also funding the National Carbon Project (NatCarb), to develop carbon sequestration strategies and methodologies. One of these projects is being administered by Battelle in Columbus, Ohio.

The region's coal industry is facing economic challenges as well. Because of deregulated markets, coal pricing is much more volatile than it has been historically. Utilities no longer want to enter into long term contracts, relying more on spot market purchases and reduced inventory holding levels. U.S. coal exports, chiefly Appalachian bituminous coal, make up a significant percentage of the world export market and are therefore impacted by the world marketplace - again causing instability in prices.

There is also domestic competition coming from the western U.S. that has been building since the 1970s. The Powder River Basin (PRB), spanning the Montana-Wyoming border, is the single largest source of coal mined in the United States (25% or 350 million tons/year). The region contains one of the largest deposits of coal in the world. Much of the output of the Basin's mines is used to fire power plants. Despite the low energy (BTU value) of the coal, the low sulphur and ash content of the PRB coal makes it very desirable. Power plants in the Three Rivers Region use PRB coal blended with local coal to help them meet emission standards until emission control investments can be made or until clean coal facilities are built. PRB is also selling at a quarter of the price of Appalachian coal. Even with transportation costs included, the PRB coal is still cheaper when it arrives in the region. DOE projects that most of the growth in coal use across the U.S. over the next 25 years will be due to increased sales of PRB coal. One reason for the cost difference is that most of the western coal is surface-mined, while most of the local coal comes from underground mines (Pennsylvania produces four times more coal from underground operations as surface mines; West Virginia mines 1.4 times as much from underground operations.)

West Virginia is the sixth largest producer of coal fired power, providing virtually all of West Virginia's needs, and exporting 70% of what is generated to other states. 297 mines across 26 of the 55 counties in West Virginia provide coal so diverse in grade and rank that nearly any needed specification can be filled. Productivity increases due to mechanization in the 80s and 90s are being reversed for both surface and underground mining as the mines are moving to thinner seams, which limits the ability to use larger mining machines.

Southwestern Pennsylvania is home to 27 of the 53 underground mines in Pennsylvania and 63 of the 213 surface mines in the state, but the region is responsible for 80% of the state's coal production. Southwestern Pennsylvania's coal production, though, is only about 1/3 that of West Virginia.

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©2007 Janet S. Lauer Consulting. All rights reserved.

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