MiningWeek Online
April 30, 2004 Volume 10, Issue 17

This Week's Issue:

• EPA extends mercury comment deadline
• Iron Range taconite industry on the upswing, press report says
• Senate rejects cloture on two energy amendments; energy tax provisions scheduled to be considered next week
• Clean Coal Technology vital to low emission electricity, future economic growth, Burke says
• NMA E-Mail system down 4/27
• NRC final rule revises licensing, inspection and annual fees
• DOE selects partners to fund new hydrogen research projects totaling $350 million
• Schwarzenegger launches hydrogen fuel initiative

EPA Administrator Mike Leavitt said that during the extension, EPA will conduct additional analysis on mercury emissions and controls which will be made available to the public. "The mercury rule will be finalized in time to meet the new court deadline of March 15, 2005," EPA said. "EPA still plans to finalize the Clean Air Interstate Rule, formally known as the Interstate Air Quality Rule, by the end of 2004."

Earlier in April, the Natural Resources Defense Council (NRDC), a plaintiff in the lawsuit against EPA, had offered to extend the original court ordered deadline for a final rule to March 15, 2005.

NMA with its members has conducted an extensive analysis of the mercury rule and will submit comments with EPA in compliance with the new deadline.

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Iron Range taconite industry on the upswing, press report says

Improvement projects at six taconite plants should total about $89.9 million during 2004, according to a report by Peter Clevenstine, the manager of engineering and development for the state Department of Resources Division of Lands and Minerals. The investment represents a sharp increase from $37.7 million in 2003 and $49.4 million in 2002.

"The reason behind it is that the two big companies, U.S. Steel and Cleveland-Cliffs, are doing better," he said. "They have to feel that when they put their money into a plant, that there is a payback." This year, Cleveland-Cliffs Inc. and Laiwu Steel Group, new owners of the former EVTAC, plan to spend $10 million at the facility, now called United Taconite.

"This is clearly an example that when the companies see an opportunity to be profitable, that they will make the needed investments," said Frank Ongaro Jr., president of the Iron Mining Association of Minnesota. "Companies make these decisions based on their ability to be profitable. The more profitable, the more they can invest."

Despite problems within the taconite and steel industries, the state's six taconite plants spent $617.7 million on capital improvements during the past six years, according to Clevenstine's report.

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Senate rejects cloture on two energy amendments; energy tax provisions scheduled to be considered next week

The increased activity began when Sen. Tom Daschle (D-SD) offered an ethanol mandate as an amendment to the Internet Tax Bill (S. 150) pending on the floor. As a response, Sen. Pete Domenici (R-NM) offered S. 2095, the "slimmed down" energy bill (without tax provisions), as an amendment to the Daschle amendment.

On Thursday afternoon, the Senate rejected by 40 to 59 a cloture motion on the Daschle amendment to impose a federal ethanol mandate, dealing a decisive blow in favor of comprehensive, rather than piecemeal, energy legislation. NMA opposed cloture on the Daschle amendment.

By a following vote of 55 to 45, the Senate then fell five votes short of the 60 needed to invoke cloture on the Domenici amendment, which was the text of the non-tax portions of the slimmed down energy bill, S. 2095. While falling short on cloture, a majority of the Senate is again on record in favor of comprehensive energy legislation. NMA supported cloture on the Domenici amendment.

The stage is now set for the Senate to take up the FSC/ETI corporate tax bill next week. NMA will continue to actively urge Senators to support the corporate tax bill and oppose attempts to delete its energy tax provisions, either in their entirety or via amendments to delete individual provisions.

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Clean Coal Technology vital to low emission electricity, future economic growth, Burke says

Emphasizing that America's enormous coal reserves supply 52 percent of U.S. electricity, Frank Burke, Vice President of Research and Development for CONSOL Energy Inc., endorsed Chairman Pete Domenici's statement that "actions to generate more low-emission electricity from coal should be taken today to prepare the nation for a future when oil and gas prices and availability limit their uses."

Burke said investment, including greater federal R&D funding, is needed today in new coal gasification, combustion and hybrid technologies to enable the nation to meet projected increases in demand for low-emission electricity from coal.

"The question is not whether we need or will use coal for human development, but how we will use it," said Burke, in testimony on behalf of NMA.

The Department of Energy forecasts that U.S. coal use will grow from 1 billion tons in 2003 to 1.4 billion tons by 2020. "This will require 120 gigawatts of new coal fired power plants, while maintaining most of our existing 300 gigawatts of coal-based capacity," said Burke.

To meet this need, he said, investments are needed now.

Federal funding for FutureGen, the $1 billion demonstration project to generate near zero-emission electricity from coal, is a critically important investment to make now, said Burke. The coal gasification project will sequester a million tons of carbon dioxide per year, he explained. CONSOL Energy is one of 10 companies in the FutureGen consortium that have offered to provide the private sector share of the resources to conduct the 10-year R&D project.

"The ability of the Government to commit to fully funding its share of FutureGen before major costs are incurred will be critical to its success," he said.

Equally important investment priorities, said Burke, are full funding for the core R&D and the Clean Coal Power Initiative programs and passage of tax incentives designed to help deploy clean coal technologies. These and related funding needs are supported by the Clean Coal Technology Roadmap developed jointly by the energy industry and the Department of Energy, which lays out the R&D investments needed by the next generation of coal-based power plants.

Burke applauded Senator Domenici for his leadership in advancing energy legislation that includes tax incentives for commercial deployment of clean coal technologies. He urged the Senate to approve the measure as well as program authorization consistent with fully funded research programs for clean coal technology.

For the full text of Burke's testimony, visit NMA's website at www.nma.org.

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NMA E-Mail system down 4/27

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NRC final rule revises licensing, inspection and annual fees

The Nuclear Regulatory Commission has issued a final rule revising its licensing, inspection and annual fees for Fiscal Year 2004.

Under the final rule, the annual fee for uranium recovery licensees will decrease significantly: The Class I fee decreases from $64,800 in FY 2003 to $14,500, and the Class II fee declines from $54,300 in FY 2003 to $12,900. The hourly rate applicable to the uranium recovery category of licensees also decreases from $158 in FY 2003 to $156.

The decrease in annual fees is a result of the re-baselining of the annual fees as well as the continuation of the 2002 determination that the Department of Energy must be assessed one-half of all NRC budgeted costs attributed to generic/other activities for the uranium recovery program. The final rule was published in the April 26 Federal Register.

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DOE selects partners to fund new hydrogen research projects totaling $350 million

President Bush this week announced the Department of Energy (DOE) has selected partners through a competitive process to fund new hydrogen research projects totaling $350 million ($575 million with private cost share) to "overcome obstacles to a hydrogen economy."

The projects include 28 awards to academia, industry and national laboratories and address four major areas:

• Creating Effective Hydrogen Storage: "Current hydrogen storage systems are inadequate for use in the wide range of vehicles that consumers demand. Exploratory research and development is needed to overcome the grand challenge for hydrogen storage."
• Conducting hydrogen vehicle and infrastructure "learning demonstrations": To complement laboratory research, "automakers and energy companies need to work together to develop integrated technology solutions for a national infrastructure. These demonstrations will provide important performance, cost, and durability data on fuel cell vehicle and hydrogen refueling infrastructure," Bush said. "This new data will allow us to refocus research priorities as progress is made."
• Developing affordable and durable hydrogen fuel cells: Currently, fuel cells are as much as 10 times more expensive than internal combustion engines. New cost-shared projects will be formed with five businesses to develop fuel cells for consumer electronic devices, and auxiliary power and off-road applications.
• Developing a Hydrogen Education Campaign: Bush said a new effort "will aim to build the next generation workforce, engage students in science and technology, and overcome the public education and acceptance barriers to achieving the hydrogen economy."

Bush said the initiative "represents nearly one-third" of his $1.2 billion commitment in research funding "to bring hydrogen and fuel cell technology from the laboratory to the showroom."

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Schwarzenegger launches hydrogen fuel initiative

California Gov. Arnold Schwarzenegger (R) this week created the California Hydrogen Highways Network, signing an executive order that establishes a private-public organization to help build 150-to-200 hydrogen fueling stations by 2010.

The initiative is essentially a pilot project that could have national implications for testing the feasibility of hydrogen-powered vehicles, the development of which is an energy policy priority for the Bush administration as well.

The first hydrogen refueling station in the country was dedicated this week at the University of California - Davis, at an event that included California EPA Secretary Terry Tamminen. The California Fuel Cell Partnership and other organizations estimate that the establishment of an early network of hydrogen stations will cost about $90 million, with the majority of money coming from private investment by energy companies, automakers, high-tech firms and other companies.

Schwarzenegger's executive order calls on the California EPA, with consultation from the legislature and California Energy Commission, to develop by Jan. 1, 2005, a California Hydrogen Economy Blueprint for the "rapid transition to a hydrogen economy in California."

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