Engineering & Mining Journal

AUG 2013

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USA MINING the last decade, and it is destined to surpass oil as the world's primary energy source by next year or the year after. The ongoing build-out of humanity is coal-centric. The infrastructure behind the world's most transformative action—lifting millions from poverty—requires steel, cement and, of course, more electricity as millions more plug into the grid. This will require at least another 1.2 billion tons of coal within five years. Second: In the U.S., coal faces headwinds from several directions—slow economic growth, unsustainably low natural gas prices and poor public policies. The first two will self-correct. The third—public policy—needs urgent attention. The coal industry does not fear competition from other fuels. But it is rightfully concerned about policies that do not allow it to compete. Take for example recent rules proposed by the EPA—they set standards for coal power plants that are beyond the reach of the best available technology today. Instead, they require technology that will not be available commercially for at least another decade. Now the EPA claims that this will not affect the reliability or cost of electricity. It insists that no new coal plants would be built anyway due to low natural gas prices—and that low natural gas prices are also the driver behind the sudden rapid retirement of so many coal plants. Unfortunately—for all Americans—the EPA is wrong on both counts. Even an independent study released recently by Duke University confirmed what the NMA told the EPA two years ago—only 9% of the nation's coal plants are economically challenged by low natural gas prices. Most of the plant closures are the result of EPA rules. There is a path to improving environmental performance at less cost and risk to our 78 E&MJ; • AUGUST 2013 "Coal's centrality to the world's future prosperity is indisputable. It has been the fastest growing energy source over the last decade, and it is destined to surpass oil as the world's primary energy source by next year or the year after." economic success if only the EPA would align its policies with the capabilities of the current best-in-class coal technologies. Third: U.S. coal will stabilize and rebound over the next several years. Despite the likely loss of almost 20% of the nation's coal capacity through 2020, coal generation will recover and increase by 15% from the 2012 lows. The remaining plants will be larger, more efficient and run at higher capacity factors. Potentially, we see at least 100 million tons of coal returning to the utility market during this time frame. And, the outlook for U.S. coal exports remains bright. The 125 million tons of coal shipped overseas last year is double the amount exported in 2008. With the build out of new port capacity currently under way, we have the potential to double that again. A recent study for the NMA found that for every 1 million tons of coal we export, we create and sustain 1,320 high-wage jobs here in the U.S. There's a thought for policymakers serious about jump-starting our economy. www.e-mj.com

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