October 27, 2011

While the coal industry tries to open up deep-water coal terminals on the Pacific coast of the United States to increase the export of coal to Asia, and the environmental movement tries to stop those ports developing, some of the impacts of the ports being built might be what neither side expects. On the one hand, environmentalists fear that the selling coal to China will just feed an increase in the total carbon emissions world wide, accelerating global warming. All the currently planned ports could only address 3% of China’s needs, and the sale of that coal could dramatically raise coal prices in the United States, forcing American utilities to phase out coal in favor of natural gas and renewables, which in turn may decrease US carbon emissions.

But the coal industry might also be in for a surprise: the last time coal prices spiked through international demand, Portland made a huge investment to become a coal export terminal, only to find that the international market crashed before a single ton of coal was shipped through the port, leaving the city with a very large unpaid bill.

Read article at http://www.npr.org/2011/10/27/141731707/it-s-economy-vs-environment-in-global-coal-trade

October 26, 2011

Hughie Elbert Stover, former director of security at Massey’s Upper Big Branch Mine has been convicted of destroying evidence and lying to federal officials as they investigated the explosion in April 2010 that killed 29 mine workers. Stover now faces sentencing of up to 25 years in prison for the two felony convictions.

The conviction is a result of families coming forth after the accident to describe Massey’s practice of using security guards to warn underground miners as federal inspection officials arrived for surprise inspections, which is currently only a misdemeanor offense with a maximum prison term of 6 months. But because he order his subordinates to destroy the documentation that this happened, officials increased the charge of destroying evidence, which is a felony.

Read article at http://wvgazette.com/News/201110260060

October 26, 2011

The Obama administration is floating a plan that would merge the two most significant regulatory bodies in coal mining: the Office of Surface Mining, which regulates and monitors the coal industry for safety, and the Bureau of Land Management, an office that handles many tasks including the responsibility for promoting coal mining through the leasing federal lands in the West.

While government officials say that such a merger will strengthen the Abandoned Mines program as well as mining regulations by combining the two tasks into a single office. However, others feel that the action would essentially kill the oversight capabilities of OSM. “I am concerned that OSM will be diluted, or denuded, and will not serve as the same repository of coalfield residents’ concerns,” said Nick Rahall (D-WV), the last legislator still in office who was present in Congress when the OSM was created in 1977.

Read article at http://wvgazette.com/News/201110260182

October 25, 2011

As the Crow nation, in southeast Montana near Hardin, tries to address its nearly 50% unemployment rate, pressure has grown for the tribe to exploit enormous coal reserves underneath the reservation. At present, the Absaloka Mine leases coal from some of the tribe’s reserves. But a 50-year $7B deal to partner with an Australian company to build a coal-to-liquids (CTL) plant first announced in 2008 has run into difficulties and opposition inside the tribe.

One source of the difficulties is the complex land arrangements on the reservation. Because the tribe only owns 20% of the land on the reservation, development must be approved by a large number of small “allottees”, who in turn have been concerned about damage to neighboring land, water pollution, as well as water consumption. Allottee groups have pushed for wind development instead. While the tribe has pushed most for the CTL project, it’s clear that the top priority is doing something sooner rather than later.

Read article at http://www.nytimes.com/2011/10/26/business/energy-environment/rich-in-coal-a-tribe-struggles-to-overcome-poverty.html

October 25, 2011

While MSHA has released its accident report on the death of Charlie Qualls at the Republic Energy Mine near Scarborough, WV, Ken Ward takes some time to reflect on the juxtaposition of Qualls’ death and the retirement of Don Blankenship from Massey Coal the previous day.

Others commenters to the article, including Mr. Qualls widow and eyewitnesses to the accident, provide information about the accident that both complements and to some extent contradicts the official MSHA report.

Read article at http://blogs.wvgazette.com/coaltattoo/2011/10/25/why-coal-miners-die-on-the-job-6/

October 23, 2011

The latest coal lease sale to be approved by the Bureau of Land Management is a new parcel of land adjacent to Arch Coal’s Black Thunder Coal Mine, which in 2010 was the country’s highest producing coal mine. The sale of the South Hilight Field Coal Tract, requested by Arch Coal, could expand Black Thunder by more than 200M tons of coal, and is important to the mine because it is between Black Thunder and other federal lands with unleased coal tracts. The lease sale will bring the total leased by the BLM in 2011 to more than 1 billion tons of coal.

Not to be outdone, Peabody Energy’sNorth Antelope Rochelle Mine, the largest producing mine in 2009, is nearing a lease sale for the North Porcupine and South Porcupine tracts which together total more than 1 billion tons of mineable coal. Under the “Lease by Application” rules, companies suggest to the BLM which parcels of land should be put up for a lease sale. As a result, few coal lease sales attract more than one bidder, and the two this year which did both set record prices.

Read article at http://billingsgazette.com/news/state-and-regional/wyoming/article_539b8f60-1d0a-5902-8498-4f865204de3d.html

October 23, 2011

A proposed simplification of the system that Wyoming uses to tax coal mining is being applauded by the mining industry, but could cost Wyoming taxpayers $16M over the next five years. The issue revolves around the way that the severance tax is computed; as mines increase their infrastructure, the severance tax levied by the state goes up. But as existing mines move West, the coal seams move deeper, which requires more mining infrastructure. So the mine owners must pay more taxes as it costs them more to mine the coal.

The proposed measure in front of the Wyoming legislature would base the tax solely on the price of coal and the amount of coal mined by the mine. In doing so, it’s expected that severance tax will drop by 6% as coal prices go up.

Read article at http://billingsgazette.com/news/state-and-regional/wyoming/article_c8ac63a9-885a-5fa5-96f7-04e8fb522d02.html

October 22, 2011

The proposed Wishbone Hill coal mine that is being proposed by the owners of the Usibelli Coal Mine has hit yet another delay as the company has pulled its request for an air quality permit for a second time. With Wishbone Hill, Usibelli is proposing a new mining in the Matanuska Valley that would produce 500 thousand tons of coal a year to ship overseas to Asian countries.

Opponents of the mine have expressed concern that there are more than 100 homes within a mile of where the trucks hauling coal from the mine will drive, as well as local geography that will funnel any fugitive dust into the residential areas. Usibelli says that the permit was pulled when the state Department of Environmental Conservation requested more data about the fugitive dust that would result from the mine and transport of the coal, but characterizes the move as part of the normal give and take associated with obtaining an environmental permit.

Read article at http://www.adn.com/2011/10/22/2133430/usibelli-withdraws-prermit-request.html

October 18, 2011

The same day that the Signal Peak Mine announced the sale of 30% of itself, the Bureau of Land Management announced that it had opened a new coal lease sale for 33M tons of coal adjacent to the mine, possibly enabling the mine to triple its production moving forward. Under the “Lease By Application” rules, mining companies can request that the BLM lease the rights to mine tracts of coal. Signal Peak originally requested the coal lease sale back in 2008, but lawsuits by local landowners and the Northern Plains Resource Council delayed the sale until now.

Opponents of the coal sale point out that the Montana legislature approved a $2.8M annual tax break just last year, and now that tax break is helping to ship coal to China. “The coal’s going overseas and the profits are probably going overseas,” said local cattle rancher Steve Charter. “What do we get out of the deal if we don’t get the taxes and we get the cracks and the holes in the ground?”

Read article at http://billingsgazette.com/news/state-and-regional/montana/article_c5578519-14d0-523c-88c5-2b3f23b2cf73.html

October 18, 2011

A one-third interest in the Signal Peak Mine has been sold to a commodities trader who intends to increase production and move all coal sales to oversees customers. The Gunvor Group plans to increase production from 9M tons to 15M annually and to ship all the coal through the Westshore terminals in Vancouver, BC to Asian markets beyond.

Gunvor paid $400M for its new stake in the mine, and joins existing owners FirstEnergy and Boich. FirstEnergy will maintain control of the mining portion of the operation whereas Gunvor will be in charge of the marketing and sales of the coal.

Read more at http://billingsgazette.com/news/state-and-regional/montana/article_5b349520-a087-5b9a-b1ad-aa5558ee1514.html