Articals of interest to the coal industry.

Friday, November 03, 2006

Virginia Energy Plan Comments by VMA

A Strategy for Increasing America’s Energy Independence with Coal
Comments submitted to the State of Virginia on September the 11, 2006 in Abingdon Virginia concerning the states “Energy Plan”.
By Dink Shackleford Executive Director of the:

Virginia Mining Association, located an
18, 7th Street, Park Ave Center, Suite 206
Norton, Virginia 24273

Virginia’s and America’s coal resources can be effectively used to move Virginia and the United States towards the goal of energy independence. Today coal provides nearly 49% of Virginia electricity.
The recent “Energy Act” called for the production of hundreds of new coal fired electrical generation plants to be constructed in the United State in the next 20 years to meet the ever growing increase in demand of 3 to 5% annually. If America is to avoid massive “brown outs and black outs” in the very near future the nation will have to come up with domestic reliable methods and sources of energy and electric development and production. The United States’ annual demand for coal could nearly double to over 2 billion tons by 2025 and lessen our dependence on imported energy, if current forecasts are realized and new markets for coal gasification and coal-to-liquids develop. A corresponding increase in domestic coal production – 1.1 billion short tons in 2005 – would be needed to meet this demand. America is facing an energy shortage and coal is the energy source most realistically able to meet this growing demand for electricity today as we face these challenges before us.

A number of factors contribute to this aggressive growth projection. Computers use 8% of all electricity generated today. When you add other information technologies to the mix, the number rises to 14%. This has been an increase no one projected 20 years ago and is a direct result of increasing technologies and the use of the personal computer. Coal is the fuel of choice for the next generation of electricity, and its share of the total electricity market is forecast to increase from roughly 50 percent today to as much as 54 percent by 2025. Today each American uses on average 33 pounds of coal a day through the use of electricity. A computer uses on average 3 to 5 pounds of coal a day to operate. Virginia employee’s nearly six thousand people in the mining of coal in Virginia and pays an average $50,000 dollars annually. According the U.S. Chamber of Commerce each high paying Virginia coal mining job creates another 3 to 5 within a community. The importance of these numbers becomes obvious when you look at the un-employment percentages that have run in the double digits through out the last several decades in the seven coal producing counties. Low cost generation of electricity can be used by the coal counties to help recruit electrical use intensive manufacturing industries.

Conventional oil and natural gas sources are constrained by availability and price even as demand for energy continues to grow. Wind generation is not capable at this time to realistically meet the growing energy demand and is becoming more and more controversial for environmental and destruction of wildlife species and endangered birds such as certain endangered species of bats. Hydroelectric generation has become impossible with existing environmental regulations concerning wildlife habitat destruction by the construction of any new dams. Conversely, the United States has a 250 year reserve and Virginia has nearly 50 to 100 years reserve (depending on the price per ton of coal) of abundant and affordable coal that can effectively contribute to lessening our dependence on foreign energy sources in the years to come.Coal used by electric utilities has increased from 320 million tons in 1970 to 875 million tons in 1995. During the same period, atmospheric levels of particulates from fossil fuel combustion dropped more than 60%.

In addition, coal gasification and coal-to-liquids technologies are opening promising new markets for coal in the residential, commercial, and industrial and transportation sectors. Production goals equivalent to 4 Tcf of pipeline quality synthetic natural gas (SNG) annually and 2.6 million barrels per day of liquid fuels from coal are possible by 2025. Over time, these modern coal conversion technologies, combined with an aggressive research program, could open the door to a hydrogen economy fueled by coal.
Ensuring that sufficient domestic coal is produced, transported and converted into the energy products demanded by a growing and increasingly energy dependent economy is a national imperative. Success requires a strong and coordinated partnership between coal producing, transporting and consuming industries to focus on actions and policies that:

• Enhance coal-fueled electric generating capacity using a suite of advanced clean coal technologies;
• Support the emerging coal gasification and coal-to liquids industries;
• Expand Virginia coal production in a safe and environmentally sound manner; and,
• Increase the coal hauling capacity of the Virginia’s (and support the nation’s) railroads, river systems and coastal waterways. An equally strong partnership between industry and government is needed.
While a range of polices and actions can affect the nation’s ability to meet the anticipated demand for coal, some are critical for success and require implementation of an action strategy designed to harness the attention, innovation and capabilities of both public and private sectors. These constitute our “Strategy for Increasing America’s and Virginia’s Energy Independence with Coal” and include:
• Developing and deploying new technologies that enable the industry to advance the safety and health achievements that have been attained to date, including effective training tools such as the encouragement of existing and the development of new training programs in support of those now established at Virginia Communities College’s for the new generation of miners that will join the industry in coming years. This can be accomplished though programs like the Virginia Community Work-Force Development Board.
• Promoting an aggressive coal conversion program that includes expansion of the nation’s capability to generate clean electricity from coal and use coal to produce pipeline quality synthetic gas and liquid transportation fuels. This can be facilitated through new industry-government partnerships such as a
Department of Defense-industry partnership to build coal-to-liquids plants that produce aviation grade fuel from coal.
• Reaching a consensus on land use and access policies that:
a. Allows access to coal reserves on federally owned lands and promotes accumulation of sufficiently large reserve blocks on privately held lands;
b. Allows timely expansion of the rail transportation network based on projected production-to-market scenarios, and support the maintaining and development of new access ports for coal loading facilities in and around Newport News, Virginia.
c. Provides appropriate sites for new power generation plants and coal gasification and coal-to liquids refineries; and
d. Provides access to rights of ways for expansion of the electric transmission system in a timely manner.
• Developing regulatory policies and permitting procedures that ensure:
a. Coordination among federal and states agencies to facilitate the expeditious review of permit applications and the resolution of any conflicts;
b. Expansion of existing coal production capacity through the development of new, green-field mines as well as the expansion of existing mines;
c. Sitting and permitting of expanded generating capacity;
d. Sitting and permitting of new green-field generating plants;
e. Expansion of transmission capacity;
f. Sitting and permitting of gasification and coal-to liquids facilities; and
g. Expansion of coal transportation systems.
• Establishing environmental policies that balance the need for expanded and affordable energy supplies with reasonable and sensible environmental protection requirements while providing the long term certainty needed for major investment, such as:
a. State assistance in any conflicts that may arise in Nationwide Permitting 21 provisions and resolution of related Section 404 issues at coal mines;
b. Resolution of particulate matter regulations so that coal production is not constrained by requirements that are not justified based on scientific and economic evidence and are inappropriate to coal mines;
c. Finalization of NSPS and mercury requirements for existing and new power plants;
d. Development of environmental requirements for coal refineries that take new and advanced technologies into account; and
e. Opposition to all mandatory restrictions on carbon emissions.
• Undertaking aggressive employee recruitment and training programs at the technical level and at university-level and community college level in mining engineering programs to meet the demand to replace 55,000 (national), 3,000 (Virginia) mining employees in the next five to 10 years. (Based on the average age on current coal miners being 53 years of age, again Virginia has nearly 6000 current active coal miners today) In addition, at least 300 new mining engineering graduates are needed annually to keep pace with projected retirements and growth in the industry.
• Enacting tax policies that not only encourage, but also ensure, timely and adequate investment in coal based energy infrastructure, including expansion of coal mine capacity, coal transportation infrastructure, and generating plant, transmission lines and coal refining capacity, such as:
a. Full expensing of expenditures for exploration and development costs;
b. Either accelerated depreciation or full expensing for capital expenditures associated with new or expanded coal production, transportation, and generating and refining capacity;
c. Use of accumulated alternative minimum tax (AMT) credits for capital investment in capacity expansion; and
d. Repeal of the AMT.
• Implementing financial incentives, including loan guarantees, low interest loans, grants, price guarantees or other incentives to:
a. Encourage expansion of coal mines;
b. Expand the coal transportation system;
c. Accelerate installation of advanced pollution control equipment at existing generating facilities; and
d. Promote construction of new generating plants and coal refineries using advanced technologies.
• Providing full funding of research and development partnerships between government and industry to:
a. Meet the research goals originally set out in the Industry of the Future vision statement for mining;
b. Fully implement coal utilization research, development, demonstration and deployment programs to meet the criteria and goals established by the Energy Policy Act of 2005;
c. Expand research on advanced pollution control technologies associated with the control of mercury and other criteria pollutants;
d. Continue development of advanced clean coal combustion, gasification and liquefaction technologies;
e. Allow for timely completion of the Future Generation projects;
f. Develop technologies to capture and sequester carbon; and
g. Achieve cost-effective production of hydrogen from coal.

To summarize there is realistically no other form of energy but coal that can accomplish the three major goals of any rational energy plan. One; to provide the energy we need in an environmentally sound way. Two; to help free Virginia and America from energy sources where those who control them would do us harm. Three; to meet the increasing demand brought on by technologies that demand the use of electricity.

The Virginia Mining Association and the National Mining Association who helped prepare these comments and commits themselves to the attainment of these objectives, which promote the utilization of coal to fuel America’s energy needs, move our nation towards a greater degree of energy independence and support our quality of life.
Any questions can be directed to Dink Shackleford Executive Director, Virginia Mining Association at:

18, 7th Street, Park Ave Center, Suite 206
Norton, Virginia 25273
Phone (276)679-4211
Fax (276)679-4942

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