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MiningWeek Online
March 11, 2005 Volume 11, Issue 10
This Week's Issue:
Advanced clean coal technologies will drive ultra-low emissions from coal-based plants, CBGS leaders say
The co-chairs of the Coal Based Generation Stakeholders Group (CBGS) this week released a vision statement saying technological innovation is the key for enabling the nation to use coal, its most abundant energy source, for generating the growing need for electric power with ultra-low emissions.
Irl Engelhardt, chairman and CEO of Peabody Energy and an NMA board member, and Dr. Ruth Shaw, president and CEO of Duke Power, told a gathering on Capitol Hill that advanced clean coal technologies, currently in development or in limited use, will enable the next generation of power plants to achieve near-zero emissions while providing the estimated 45 percent increase in electricity the U.S. economy will need in the next two decades. Continued funding for clean coal technologies, said the CEOs, was the best strategy for putting the U.S. on the road towards greater energy independence.
In emphasizing the critical role of advanced technology, the CEOs elaborated on the industry’s “Coal Vision” report titled “A Vision for Achieving Ultra-Low Emissions from Coal-Fueled Electric Generation.” The report, the result of a six-month-long study by the industry, said that if properly funded, clean coal research is capable of ensuring that new coal-fired power plants commercially operational by 2025 to 2035 would feature unprecedented environmental benefits, including:
· Greater than 99 percent removal of SO2, NOx and particulate matter
· 95 percent removal of mercury
· 50-60 percent thermal efficiency, and
· Large-scale CO2 capture and sequestration capabilities
"No one technology will dominate in the process of achieving these advanced power plant capabilities," said the Coal Vision report. "Rather, a suite of technologies will be needed." The Department of Energy (DOE) plays a vital role in this enterprise, said the report. "Working together with industry, the DOE's research programs are vital to accelerate technology development in order to provide clean, affordable and reliable energy from coal."
Engelhardt and Shaw co-chair CBGS, an organization of coal, rail and power companies and their trade groups, including NMA, The Edison Electric Institute, the Association of American Railroads and the National Rural Electric Cooperative Association. The electric power, coal, and railroad industries have total revenues of almost $300 billion and directly employ almost 800,000 Americans. In conjunction with the vision statement’s release, Engelhardt and Shaw also appeared on E&ETV to discuss how clean coal technologies will drive ultra-low emissions from coal-based generation plants.
To view the full report, visit NMA’s website at www.nma.org.
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Fraser Institute study says attractive geology outweighed by bad government mining policy
A region’s attractive geology does not guarantee mining investment if government policies are bad, according to mining executives surveyed in the Fraser Institute’s (FI) Eighth Annual Survey of Mining Companies.
“While geologic and economic evaluations are always requirements for exploration, in today’s globally competitive economy where mining companies may be examining properties located on different continents, a region’s policy climate has taken on increased importance in attracting and winning investment,” FI said.
In the survey, companies responsible for a combined total of $798 million in international exploration (expected in 2005) rated the policy attractiveness and mineral potential of mining jurisdictions in North America and internationally. Included were Canadian provinces and territories, the Australian states, selected U.S. states and jurisdictions across Europe, Asia and Africa.
For the fifth consecutive year, Nevada is rated as having the best mineral policies. The only other U.S. state in the top 10 was Utah, which improved substantially over last year and ranked fourth. Arizona was ranked 11, Idaho, 13, Wyoming 21, New Mexico 28, Minnesota 29, Alaska 33, South Dakota 37, Colorado 41, Montana, 47, Washington 51, California 55 and Wisconsin 56.
“This is great news,” Nevada Mining Association President Russ Fields told the Elko Daily Free Press. “The mineral potential in Nevada is fantastic. It’s evident by the size of our gold mines, and clearly exploration people believe there is more to find. We can have both environmental protection and good business, and that means lots of jobs and positive impact for Nevada.”
FI’s Policy Potential Index measures the effects on exploration of government policies, including uncertainty concerning the administration, interpretation and enforcement of existing regulations; environmental regulations; and regulatory duplication and inconsistencies. Taxation, uncertainty concerning native land claims and protected areas, infrastructure, socioeconomic agreements, political stability, labor issues, geological database and security are also included.
The survey also calculates which jurisdictions have room to improve their regulatory environments. While many of the areas with the greatest room to improve are developing countries, “the worst performers are from the developed world and include Montana, California, Colorado, British Columbia, Arizona and the Yukon,” the Institute said.
“Mining executives are becoming increasingly willing to invest their exploration dollars around the globe,” said Fred McMahon, the survey’s co-coordinator. “Attractive geology is necessary, but not enough. Governments who want to maintain viable mining industries in their jurisdictions must enact favorable policies to encourage investment,” he said.
McMahon told the Elko Daily Free Press the U.S. “is both the best and worst of all worlds. Nevada is on top for mineral exploration, but California, Wisconsin and Montana tend to be at the bottom of the heap.”
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Coal will remain primary provider of electric power, Gerard tells Senate Committee’s Coal Conference
The marketplace has chosen coal as the current and future provider of electric power to the nation, “and public policy should support this choice to meet future demand and bring the nation closer to energy independence,” NMA President and CEO Jack N. Gerard told a Senate committee’s coal conference this week.
Gerard was one of 25 scheduled participants in the Senate Energy and Natural Resources Committee’s bipartisan coal conference, aimed at presenting and discussing solutions to developing and using coal in an environmentally friendly manner to meet growing U.S. demand for electricity. Among others testifying were Frank Burke of CONSOL Energy and Bret Clayton of Kennecott.
Gerard noted coal “generates more than half of the nation’s electricity – and is expected to generate one half or more of the 50 percent increase in electric power the country is projected to need by 2025. This means electricity generation will require at least 1.425 billion tons of coal in 2025 – or about 42 percent more than is used today.”
He said that plans have already been announced this year to build at least 106 coal-based plants totaling 65 gigawatts (GW) – “part of the nearly 100 GW of new coal- fired capacity expected to be built mostly after 2011. NMA projects U.S. coal production this year will break all records.”
He said the factors that account for this “resurgent coal demand are often overlooked, even though they are persuasive to energy markets:”
- In a time of growing energy dependence on offshore sources – when geopolitical uncertainty and growing demand for finite fuels haunts global energy markets – coal provides the U.S. with a 250-year supply of energy safely from within our own borders;
- In a time of energy price volatility, the price of coal remains “remarkably stable – and is expected to remain so.” The Energy Information Administration projects coal will maintain its significant cost advantage over natural gas well into the future. And,
- While the environmental challenges of coal utilization should not be overlooked, “neither should the impressive reductions that coal-fired plants have already made – or the continuing environmental contribution expected from a suite of advanced clean coal technologies.”
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High court lets stand health fund ruling; will hear mine accident case
The U.S. Supreme Court this week declined to consider whether federal law requires a former coal company to pay into the Coal Industry Retiree Health Benefit Fund, letting stand a lower court ruling against the former Pittston Coal Co. Meanwhile, the court agreed to hear arguments in the case of two men who sued the federal government following a mine accident.
In the first case, Pittston, now the Brink’s Co. and no longer in the coal business, maintained its payments under the Coal Industry Health Benefit Act of 1992 amounted to an unconstitutional form of taxation. It sought a refund of money paid into the fund, established to administer health benefit payments to United Mine Workers of America members from companies no longer in business.
Brinks argued the requirement unconstitutionally put government powers into the hands of a private entity. The Fourth U.S. Circuit Court of Appeals upheld the federal law, reasoning that the government’s delegation of powers to a private entity was not improper because its duties of collecting money were “clearly ministerial.” That is the decision the high court let stand.
In the second case, the court said it will review a lower court ruling that allows two former miners to pursue a lawsuit against the Mine Safety and Health Administration (MSHA), which they accused of failing to properly inspect Asarco’s Mission Complex near Green Valley, AZ. Last year, the Ninth U.S. Circuit Court of Appeals rejected arguments that the mine safety agency and its employees were immune under the Federal Tort Claims Act. MSHA argued it is in the best position to evaluate how inspections should be conducted.
When the Ninth Circuit ruled against MSHA, the agency filed an appeal with the Supreme Court, maintaining the appeals court used the wrong legal standard in making their decision. The appeals court found that although the law does provide some immunity, federal law also requires mine safety inspectors to respond with an “immediate inspection” when they receive written, signed safety hazards complaints.
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Gerard: Senate vote delays cleaner air for all Americans
This week’s vote by the Senate Environment and Public Works Committee to not report Clear Skies legislation for full Senate consideration will ultimately delay achieving cleaner air for all Americans, NMA President and CEO Jack N. Gerard said.“The coal industry and our employees and customers throughout the country are deeply disappointed by the failure to advance important legislation that would guarantee environmental progress while protecting economic growth,” Gerard said.
“Despite the strong personal efforts of Chairman (James) Inhofe (R-OK) and Sen. George Voinovich (R-OH), we’ve lost a key opportunity to provide regulatory certainty that could jump-start the next generation of coal-based power plants and ensure cleaner air for all Americans. Opponents overlooked the promise of further steep cuts in emissions and put aside the needs of working men and women who supported the bill because of job losses already resulting from higher energy prices. The fears expressed by both industry and labor throughout this debate — that legal challenges, absent legislation, will slow future development of affordable electricity from domestic coal — are fully justified,” he said.
“There is still strong bipartisan support throughout the country for legislation that will produce both environmental and economic benefits. While that support wasn’t reflected in the Senate committee’s vote, we’re hopeful the Senate will recognize that the nation’s growing demand for affordable electricity warrants serious future consideration,” Gerard concluded.
In the 9-9 tie vote, the committee’s eight minority members, along with Sen. Lincoln Chafee (R-RI), voted against the bill. The vote had been delayed several weeks by Chairman Inhofe in an attempt to forge a compromise; ultimately, Inhofe decided it was time to decide the issue and move on to other pressing committee issues.
Although Inhofe said he does not plan to revisit Clear Skies anytime soon, President Bush this week continued to urge Congress to act (see related story), saying he preferred a legislative approach, but added the Clean Air Interstate Rule (CAIR) released Thursday (see related story) and upcoming utility mercury rule would be good steps toward reducing utility emissions.
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Final CAIR rule signed by EPA Administrator Johnson
Noting the Bush administration remains “committed to working with Congress to help advance the President’s Clear Skies legislation,” Environmental Protection Agency (EPA) Administrator Steve Johnson this week signed the final Clean Air Interstate Rule (CAIR), which implements regulations aimed at reducing air pollution that moves across 28 eastern state boundaries.
CAIR will require a cap on emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) in the eastern U.S. When fully implemented, it will reduce SO2 emissions in 28 eastern states and the District of Columbia by over 70 percent and NOx emissions by over 60 percent from 2003 levels, EPA said. In many respects, the rule would achieve a result similar to President Bush’s Clear Skies initiative, which the Senate Environment and Public Works Committee failed to report this week (see separate story).
Johnson noted EPA next week is scheduled to issue the first-ever mercury control requirement for coal-based power plants. “That action, plus the CAIR rule, puts in place multi-pollutant controls on many of the largest sources of air pollution in the country,” he said.
Johnson said legislative action by Congress was needed “in order to achieve greater certainty and nationwide emission reductions. But we need regulations in place now to help over 450 counties in the eastern U.S. meet stringent new air quality standards.”
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Bush continues to press Congress for action on Clear Skies, energy bill
Undaunted by the failure of a Congressional committee to report his Clear Skies proposal to the full Senate, President Bush in a visit to Ohio this week urged Congress to pass the measure along with comprehensive national energy legislation, and again expressed strong support for clean coal technology.
“Clear Skies uses the power of free markets to reduce power plant pollution by 70 percent without disrupting the energy supply or raising electricity prices,” Bush told an enthusiastic audience of 1,000 people in Columbus, OH. “Clear Skies would allow almost every county in this state to meet strict new air quality standards, while being able to keep your commitment to coal, and therefore to reliable energy supplies, and therefore to jobs.”
Bush noted Congress is “debating the Clear Skies initiative, but I’m going to act to get results.” He noted the Environmental Protection Agency (EPA) “will finalize two rules similar to the Clear Skies initiative (see related story). The Clean Air Interstate Rule (CAIR) will provide Ohio and eastern states with a practical, market-based solution to the problem of power plant pollution that drifts from one state to another. The Clean Air Mercury Rule will provide the first ever national cap on mercury emissions from power plants and result in a 70 percent decrease in mercury levels.”
Bush said while the rules provide some of the same benefits as Clear Skies, “they are not a substitute for effective legislation. To protect the environment, to protect jobs here in Ohio and around our country, Congress needs to get a good Clear Skies bill to my desk now.”
Bush said it is also “time for Congress to act” to pass comprehensive national energy strategy legislation. “A sound energy bill must meet four objectives: it must promote conservation and efficiency, increase domestic production, diversify our energy supply and modernize our energy infrastructure. And, as we pursue all these goals, we will also uphold our responsibility to be good stewards of the environment.”
He stressed that increasing the country’s energy security “begins with a firm commitment to America’s most abundant energy source – and that is coal.” Bush said coal is “at the heart of Ohio’s energy strategy and should be at the heart of America’s energy strategy.”
The president said clean coal technology “is critical to the future of this country. It’s criticial for the job creators . . . and for the working people . . . .” He noted the administration is “funding research into innovative projects, such as the process for converting coal into clean-burning gas,” as well as FutureGen, “so that we can build the world’s first coal-fueled zero emission power plant. I believe it’s possible.”
“Clean coal technology will advance,” Bush concluded. “And when it does, our society will be better off. We’ll become less dependent on foreign sources of energy.”
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Bodman urges citizens to contact Congress in support of national energy legislation
Secretary of Energy Samuel W. Bodman this week strongly urged citizens to contact their senators and congressional representatives and ask them to pass a comprehensive energy bill this year.
During an online interactive forum called “Ask the White House,” Bodman said he has “talked to a number of congressmen and senators on both sides of the aisle and there’s a general agreement that we have a serious energy problem confronting this country. I don’t think this is a partisan issue – everybody has constituents that are paying $2 – plus for gasoline, and that’s a real burden. I encourage everyone reading this to get in touch with their senators and congressmen to urge them to pass a comprehensive energy bill this year,” he said.
Answering another question, Bodman strongly endorsed the expanded use of coal to generate electricity. “Wind and solar power are certainly important and desirable, but the technology just does not yet exist to get electricity in sufficient quantities from these sources. We are working to change that, but in the meantime, we need to keep using our abundant and affordable coal supply and improve its environmental performance,” he said.
Bodman added that clean coal technology “has greatly reduced emissions from modern coal power plants. New plants are becoming progressively cleaner and, in the long term, technology now under development can lead to zero-emission coal power plants. The President’s FutureGen Initiative, now under way, is an effort to develop a coal-fired power plant that will emit no pollution or greenhouse gases.”
Regarding Clear Skies, Bodman called it a “far-reaching plan to improve our air quality without sacrificing our energy supply” -- he said it would “improve the environment while also protecting jobs and promoting economic growth.” He also said the president’s Hydrogen Fuel Initiative is “on track” with the goal of having “affordable, practical vehicles in mass markets by 2020.”
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Newsbits
The Canadian mining company Noranda Inc. says it is planning to merge with Falconbridge Ltd., a major nickel and copper producer, by acquiring the 40 percent Falconbridge stake that it doesn’t already own. Noranda said the plan has been approved by the boards of both companies and the combined company would be named NorandaFalconbridge . . . . Arch Coal says for the fourth consecutive year, one of its subsidiaries has earned top honors for reclamation excellence from the West Virginia Department of Environmental Protection (DEP). Coal-Mac’s Phoenix Mine received the 2004 Greenlands award for “outstanding effort and the successful deployment of modern mining and reclamation techniques” . . . . Doe Run Peru, a subsidiary of the Doe Run Co., says it will sponsor a second “Smile in the Andes” campaign in La Oroya in 2005, enhancing life for hundreds of Peruvian children. The four-month project will bring experienced plastic surgeons to La Oroya, home of Doe Run Peru’s metallurgical complex, to perform free surgeries for children with cleft lips or palates and some other facial, ear or hand deformities . . . . Butler Machinery, a Fargo, ND-based heavy machinery dealership, will expand its operation to Pierre, SD, in April. The company, which is currently observing its 50th anniversary as a Caterpillar equipment dealer, also has business operations elsewhere in North and South Dakota . . . . Michelin says it will increase its production capacity of tires for the mining earthmovers “in consideration of the unprecedented growth of the surface mining industry worldwide and the market position” held by the company. The new capacity increase will complete measures already taken in 2003 and 2004 to boost capacity, Michelin said.
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