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Monday, 25 August 14
COAL CEOS: DEMISE OF COAL 'EXAGGERATED' - MARK WILCOX

By Mark Wilcox
Heads of some of the largest coal companies in Wyoming are saying the demise of coal has been exaggerated, though the industry definitely has some hills to climb.

At the Rocky Mountain Energy and Infrastructure Summit yesterday in Jackson, Gov. Matt Mead sat on a panel with bigwigs from some of the largest coal companies in the nation: Arch Coal, Cloud Peak Energy, Peabody Energy and Alpha Coal West to talk about the fate of the oft-controversial fossil fuel. In the next three years, about 60 gigawatts of coal-fired power plants are shutting down in the U.S., or about 20 percent of domestic capacity, according to John Eaves, CEO of Arch Coal.

“We do have some headwinds,” Eaves said. One of those headwinds is cheap and abundant natural gas, which also releases 50 percent less greenhouse gas emissions than coal according to American Gas Association Chairman Gregg Kantor. Eaves said coal has lost a lot of market share to natural gas as utilities switch to the abundant, cleaner fuel, but that hasn’t created hard feelings.

“We’re not against gas,” Eaves said. “We’re for all fuels, but we need a balanced portfolio.”

Still, Powder River Basin coal is more insular, and Eaves said natural gas prices would have to drop below $3 per mmbtu to really impact the PRB coal market. And that’s something he said he doesn’t foresee happening for a sustained period despite dramatic price drops below $2 in 2012 that forced budget cuts in state government.

Many lawmakers in the U.S. Environmental Protection Agency are proposing rules that continue to target coal, leading many to say the current administration is fighting a “war on coal.” Eaves said about 20 states, including Wyoming, are pushing back against the proposed rules.

“There is going to be a lot of litigation with these proposed rules,” Eaves said.

Gov. Matt Mead said that from a policy position, the rules are a horrible way to tackle the problem that ignores technological strides forward coal has made in terms of emissions and tries to artificially cull coal from the market.

“We didn’t change from the candle to the light bulb because someone said we're going to put a lot of regulations on candles,” Mead said.

He said government, instead of regulating coal out of the markets, should look to improve its use with innovations that turn the slipstream of coal from a liability to an asset. In the end, Mead said he thinks “good sense will prevail” when it comes to coal, and that the resource isn’t dead as many have proclaimed it.

Mead said in a brief interview that he had met with U.S. Secretary of Energy Ernest Moniz early Thursday morning to encourage more participation in coal solutions that don’t require regulating coal with strangleholds. According to Mead, the meeting went well.

This article was originally published in Wyoming Business Report



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