Electric Utility Fuel Procurement What Future Role Will Coal Play?
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MAY 2012 VOL. 117 NO. 5 FEATURE ARTICLES NEWS/4 ROOF BOLTING/26 26 Roof Bolting Technology Improvements in machine design and consumables make a tough job a little safer 34 Electric Utility Fuel Procurement What future role will coal play? 40 Finding a Perfect Balance Powder River Basin mine balances nature preservation with energy development 44 The Benefits of Slurry Pump System Optimization Improved energy efficiency and reliability enhance GPS GUIDANCE/40 OPERATING IDEAS/52 the bottom line 48 Coaltrans Miami Examines Exports Activity Shifting energy markets force more coal off-shore, but can the industry adjust fast enough? 52 Lubrication Plans Pay Dividends COAL IN THE NEWS 4 Anti-coal rally draws little attention in Portland 4 Markey calls for a review of coal leases in light of the export market 4 Ohio utility ordered to keep three coal-fired power plants online 5 CONSOL Energy restarts idled longwalls in May THIS ISSUE 6 Arch Coal renames Tygart Valley mine in honor of Steve Leer 6 Oxford files lawsuit against Big Rivers Electric 8 Craft remains optimistic This month, Coal Age offers a market perspective through 10 Foresight Energy seeks to raise more money through an IPO the eyes of a utility coal buyer. Other feature articles include 12 Illinois may soon decide on FutureGen 2.0 tips on pumping, roof bolting, and drilling. On the cover, 16 Ingram to acquire U.S. Barge Line an Atlas Copco Pit Viper drills blastholes in coal at Western 18 Clean coal campaign teams with NASCAR Fuels’ Dry Fork mine (Photo courtesy of Atlas Copco). 20 Federal judge issues injunction against Peabody subsidiary, supports UMWA organizing win DEPARTMENTS 22 2011 coal company CEO compensation 2 Editorial WORLD NEWS 4 Coal in the News 5 TransAlta abandons Canada’s largest carbon capture project 5 World News 12 Rio Tinto exporting coal from Mozambique in May People 14 Dateline Washington 6 Teck sees record coal revenue 16 Calendar Vele’s first coal destined for export market 18 Awards 8 China presses coal mining industry to improve safety 20 Letters to the Editor Dalrymple Bay: Coal ready for export 52 Operating Ideas Chinalco to acquire Mongolia’s South Gobi mine 54 Suppliers News 10 Colombian coal exports remain high 56 Product News BHP offers metallurgical coal update for Australia 61 Classified SAIL to import coking coal 64 Legally Speaking May 2012 www.coalage.com 1 editor’s note Utilities Abandon Carbon Capture www.mining-media.com hose that attended the Keynote session at Coal Prep 2012 Mining Media International Editorial Office learned firsthand of the headwinds the U.S. coal industry T 11555 Central Parkway, Suite 401 now faces. A fuel procurement manager from America’s largest Jacksonville, Florida 32224 U.S.A. coal-burning utility painted a rather grim picture for U.S. coal Phone: +1.904.721.2925 consumption (See Fuel Procurement, p. 34). It was something Fax: +1.904.721.2930 everyone in the room suspected, but until now no one from the Editor-In-Chief—Steve Fiscor, [email protected] utility side had said it publicly. Natural gas had taken a substan- Western Field Editor—Russ Carter, [email protected] tial market share from coal and proposed regulations from the European Editor—Simon Walker, [email protected] BY STEVE FISCOR Environmental Protection Agency (EPA) will force utilities to / EDITOR-IN-CHIEF close more coal-fired plants sooner than anticipated. Latin American Editor—Oscar Martinez, [email protected] In her introductory remarks, Kim Chilcote from American Electric Power (AEP) Associate Editor—Gina Tverdak-Slattery, [email protected] told the audience that the message she was about to deliver would not be pleasant. Associate Editor & Photographer— She said she was a coal person at heart and that made it difficult for her as well. She Lee Buchsbaum, [email protected] described how an unusually warm winter and low gas prices this year would segue Graphic Designer—Austin St. Clair, [email protected] into a diminished coal burn for years to come. Afterward she fielded questions and listened sympathetically to angry remarks. The hostility was not aimed at her, but Mining Media International toward the Obama administration and the EPA. Corporate Office During the Q&A session, someone asked about carbon capture and sequestra- 8751 East Hampden, Suite B1 Denver, Colorado 80231 U.S.A. tion (CCS). She reminded the audience that for several years AEP operated a CCS Phone: +1.303.283.0640 pilot plant at its Mountaineer facility in West Virginia. What the company learned Fax: +1.303.283.0641 was that the costs to build and operate the system were extremely high and so were President/Publisher—Peter Johnson, [email protected] the parasitic losses. AEP funded the research and then pulled the plug on the pro- ject. An academic came unglued at the notion that utilities would simply walk away Vice President of Sales & Marketing—John Bold, [email protected] from CCS. He believed it was the linchpin to continued coal use and that rate pay- U.S. & Canada Sales Manager—Victor Matteucci, [email protected] ers would simply have to bear the cost. Scandinavia, UK and European Sales Manager—Colm Barry, [email protected] In World News this month, Coal Age also reports that another utility, based near German Sales Manager—Gerd Strasmann, [email protected] Edmonton, Canada, home of the Oilers, was throwing in the towel on its carbon Classified Advertising—Norm Rose, [email protected] capture project (See TransAlta Abandons, p. 5). Instead of sequestering or pump- Show Manager—Tanna Holzer, [email protected] ing the CO2 into a deep saline formation, Project Pioneer would use it for enhanced Ad Traffic Manager—Erica Freeman, [email protected] oil recovery (EOR). The drillers would pump CO2 into oil reservoirs to push out the remaining oil that did not flow freely from the formation. The study, however, proved that the efforts would not be feasible. If EOR is not practical in the middle of the Canadian oilfields, it’s a safe assumption that pumping CO2 hundreds of miles in the U.S. for the same purpose would not be feasible. The Worldwatch Institute, an advocacy group that support global sustainabili- ty, recently reported that there are 75 large-scale, fully integrated CCS projects in 17 Coal Age, Volume 117, Issue 5, (ISSN 1040-7820) is published monthly by Mining countries at various stages of development, but only eight are operational—a figure Media Inc., 10 Sedgwick Drive, Englewood, Colorado 80113 (mining-media.com). that has not changed since 2009. Currently, the storage capacity of all active and Periodicals postage paid at Englewood, CO, and additional mailing offices. Canada Post Publications Mail Agreement No. 40845540. Canada return address: Station A, PO planned large-scale CCS projects is equivalent to only about 0.5% of the emissions Box 54, Windsor ON N9A 6J5, Email: [email protected]. Current and back issues and additional resources, including subscription request forms and an editorial from energy production in 2010. In March, the EPA proposed regulations on CO2 calendar, are available online at www.coalage.com. emissions from power plants, essentially saying that power generators would be SUBSCRIPTION RATES: Free and controlled circulation to qualified subscribers. unable to build coal-fired power plants without CCS technology. Scaling up CCS Non-qualified persons may subscribe at the following rates: USA and Canada, 1 year, projects to the point that they could make a serious dent in emissions reduction $56.00, 2 year, $96.00, 3 year, $162.00, Student, $16.00, Outside the USA and Canada, 1 year, $77.00, 2 year, $137.00, 3 year, $225.00 surface mail (1 year, will require a massive investment. Who is going to foot the bill? $145.00, 2 year, $257.00 airmail delivery). For subscriber services or to order single copies, write to Coal Age, 8751 East Hampden, Suite B1, Denver, CO 80231 USA; call +1.303.283.0640 (USA) or visit www.mining-media.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of select- ed archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For microform availability, contact ProQuest at 800-521- 0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to Coal Age, P.O. Box 1337, Skokie, IL 60076 USA. REPRINTS: Mining Media Inc, 8751 East Hampden, Suite B1, Denver, CO 80231 USA Steve Fiscor, Coal Age Editor-In-Chief phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com [email protected] PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clearance Center (CCC) at +1.978.750.8400. Obtain further information at www.copyright.com. COPYRIGHT 2012: Coal Age, incorporating Coal and 2 www.coalage.com Coal Mining & Processing. ALL RIGHTS RESERVED. news Anti-coal Rally Draws Little Attention in Portland Millennium Bulk Terminals, a Columbia River port in Longview, Wash., has applied for permits to make it one of the largest coal exporters in North America. “I’m not sure a rally in Portland for a few hours will overshadow the commitment we’ve made to creating jobs here in Longview,” said Millennium Bulk Terminals-Longview President Ken Miller. “Millennium is making a significant investment in our community and we are proud of our plan to create hundreds of jobs in Cowlitz County.” Markey Calls for a Review of Coal Leases in Light of the Export Market Environmental lawyer Robert F.