Bright Outlook for Coal
Peter “Pete” Lilly
Peter B. Lilly, Chief Operating Officer, CONSOL Energy Inc., recently made keynote remarks at the Platts Coal Properties and Investment Conference in Fort Lauderdale, Florida.
Lilly, who chaired the opening session of the conference, told the audience of more than 200 that the outlook for the coal industry was much brighter than a few years earlier.
"Three years ago, this conference and many of us, were on something akin to suicide watch," Lilly remarked. "Today our speakers will tell us just how good things can get rather than how bad things are. What a difference a few years makes."
Lilly said that with the economy rebounding from the 2002 recession and the weather generally normal, supply and demand for coal were in delicate balance. "Even a problem at a single large mine can drive up the spot price for coal significantly," he said.
Speaking from the perspective of an eastern United States coal producer, Lilly told the audience he thought that the announced installation of scrubbers at many existing coal-fired power plants would create new market opportunities for northern Appalachian coal producers, whose coal has a higher energy content but is also higher in sulfur than some coals.
Scrubbers and other installed technologies capture emissions from the burning of coal before they are emitted into the atmosphere.
"I am not saying that installing scrubbers will increase the coal burn," Lilly explained. "But it will open up markets for the higher sulfur, higher Btu bituminous coals that could not be previously served because plants without scrubbers couldn’t burn the higher sulfur coal and still meet the emission standards."
Lilly also noted that recent federal regulations on the interstate transportation of sulfur dioxide and nitrogen dioxide, as well as a new federal rule regulating mercury issued recently, would further accelerate the installation of scrubbers on existing coal-fired power plants. "It is abundantly clear that all of us who make our living in the coal industry will benefit from the clean-up of existing power plants," he said.
Lilly urged the government to adopt policies that create an environment of certainty that will encourage further investment in technology. "Will this patchwork of regulations amount to a coherent, sensible policy for coal," Lilly asked? "Time will tell, but it would be better if Congress were to pass the Clear Skies Act. That would create a stable statutory and regulatory environment for coal, the fuel most responsible for creating low-cost, reliable electricity for the country."
CONSOL Energy Inc. is the largest producer of high-Btu bituminous coal in the United States. CONSOL Energy has 17 bituminous coal mining complexes in six states. In addition, the company is one of the largest U.S. producers of coalbed methane, with daily net gas production of approximately 139.6 million cubic feet from wells in Pennsylvania, Virginia, and West Virginia. cl
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