Kentucky Coal. Virginia Mining Association. Appalachian Coal: Our Natural Advantage

Transcription

1 Kentucky Coal Virginia Mining Association Appalachian Coal: Our Natural Advantage 2009

2 Appalachian Coal: Our natural advantage Background: Coal has long been one of the region s leading industries. Coal mining provides: - Thousands of good paying jobs - Millions of dollars for local and state economies - Low cost electricity for state residents. The Coalition for Mountaintop Mining

3 Appalachian Coal: Our natural advantage A MOMENT OF OPPORTUNITY We have the opportunity now to become the nation s center of energy and commerce if we approach it correctly with reason, intelligence and common sense. Our state s role is critically important to our nation s quest to become energy independent. The Coalition for Mountaintop Mining

4 Appalachian Coal: Our natural advantage Poised for the Future: The coal industry is well-poised on high-growth opportunities as the country pursues energy independence and economic growth from a strong domestic energy industry The industry has great capacity Committed management teams in place Aggressive business plans Qualified, experienced workforce Strong will to succeed Coalition for Mountaintop Mining

5 Appalachian Coal: Our natural advantage Our future success is dependent on how we deal with today s challenges on the national and international scale Global climate change Cap and Trade legislation Increasing renewable portfolio National Energy Policy EPA s assault on coal War on mountaintop mining

6 Appalachian Coal: Our natural advantage THE BASICS West Virginia The second largest coal producing state in the nation (161 million tons) trailing only Wyoming The largest underground coal producing state (95 million tons) Surface mine production (65 million tons) The largest international coal exporting state 20 million tons) 70 percent of production shipped to 26 domestic states and 23 foreign countries. Coalition for Mountaintop Mining

7 Appalachian Coal: Our natural advantage The Basics Industry forms bedrock of the state s economy, providing for approximately 12 percent of the state s gross domestic product. More than 50,000 West Virginia families depend on the coal industry for their livelihoods. Coalition for Mountaintop Mining

8 Appalachian Coal: Our natural advantage The Basics Wages and Benefits: Average annual salary $62,700 Benefits include health, disability, life and retirement, etc. Production and Taxation: Estimated production value -- $6.8 B (WV) Coal severance tax -- $418 M (WV) Approximately $1 B in total taxes (WV)

9 Appalachian Coal: Our natural advantage THE ECONOMICS: The industry paid more than $400 million in severance taxes in West Virginia alone during FY Coal and electric utilities together pay more than 60 percent of the state s business taxes Coal mining is a $6 billion industry in West Virginia alone NOTE: The graph at right shows coal severance dollars growing from a floor of $183 million in 2001 to $475 million Collections $500,000, $450,000, $400,000, $350,000, $300,000, $250,000, $200,000, $150,000, $100,000, $50,000, $ Year Coalition for Mountaintop Mining

10 Mountaintop Mining Critical to the future of communities Surface Mining Production Selected Counties (West Virginia) County % Surface Mine Production Total Production Boone 62 percent 34 million tons Clay 95 percent 4 million tons Fayette 43 percent 4 million tons Kanawha 42 percent 12 million tons Logan 69 percent 15 million tons Mingo 53 percent 12 million tons McDowell 50 percent 6 million tons Nicholas 72 percent 4 million tons Raleigh 46 percent 9 million tons Wayne 55 percent 5 million tons Webster 88 percent 5 million tons Wyoming 46 percent 5 million tons

11 Mountaintop Mining Critical to the future of communities Surface Mining Production Selected Counties (West Virginia) County % Surface Mine Production Total Production Boone 62 percent 34 million tons Clay Boone, Logan 95 percent and Mingo 4 million tons Fayette 43 percent 4 million tons Kanawha Counties 42 surface percent mined 12 million tons Logan 69 percent 15 million tons approximately Mingo 53 percent 38 million 12 million tons tons McDowell 50 percent 6 million Nicholas 72 percent 4 million tons in 2008 Raleigh 46 percent 9 million tons Wayne 55 percent 5 million tons Webster 88 percent 5 million tons Wyoming 46 percent 5 million tons

12 Appalachian Coal: Our natural advantage The Basics Kentucky PRODUCTION 120 million tons in 2007 total 75 percent mined in Eastern Kentucky 51 percent underground 49 percent surface 25 percent mined in Western Kentucky 87% underground 13% surface) Production peaked in 1990 at 179.4m Kentucky ranks third nationally behind Wyoming and West Virginia. TOTAL EMPLOYMENT Total of all types 17,893 - Underground n/a - Surface n/a - Prep Plants n/a - Contractors n/a

13 Appalachian Coal: Our natural advantage The Basics Virginia PRODUCTION 25 million tons (2007) Mining mostly occurs in western Virginia - 62 percent underground - 38 percent surface Total employment: Total of all types 25,346 Underground 15,731 Surface 9,615

14 Appalachian Coal: Our natural advantage THE ECONOMICS What s At Risk? Central Appalachian states (WV, KY, VA) surface mined 131 million tons in % of total US coal production Estimated 77,000 jobs (direct and indirect) sustained by surface mining in Central Appalachia Surface mines in WV produced 69 million tons or 42% of the state s total production 6,164 workers directly employed (2008 MSHA data) More than 30,000 other WV jobs depend on surface mining Using an estimate of $50 per ton, WV s severance tax of 5% generated approximately $172.5 million of the $410 million paid on all coal production in Coalition for Mountaintop Mining

15 Appalachian Coal: Our natural advantage Premise: It is in the region s best interest for its coal and energy industries to remain viable and competitive in global markets. Coalition for Mountaintop Mining

16 Public Image of Coal Pick and Shovel Destruction of the Land

17 Surface Mining What you always see! Active MTR and Contour Mining

18 Surface Mining What you always see! Active MTR and Contour Mining

19 Surface Mining What you always see! Active MTR and Contour Mining

20 Surface Mining What you always see! Active MTR and Contour Mining

21 Surface Mining What you always see! Active MTR and Contour Mining

22 Types of Mining Underground Room and Pillar Longwall Surface Mining Contour Mining Auger Mining Mountaintop Removal Mining

23 Mountaintop Mining A Diagrammatic Overview of the Process: MOUNTAINTOP MINING is simply coal mining that occurs at or near the topmost portion of a mountain. Step 3. Machines excavate lower layers of coal with natural material secured in a crevice Step 1. Layers of rock and dirt above the coal (called overburden) are removed Step 4. Re-grading begins as coal excavation continues Step 2. The upper seams of coal are removed with natural material secured in a crevice Step 5. Once coal removal is complete, final regrading takes place and the area is re-vegetated

24 Mountaintop Mining Surface mining methods are essentially the same as highway construction Valley fills are areas where the rock and dirt from mining excavation is placed according to a plan designed by engineers and approved by government agencies. The fills usually occur in dry stream beds of what are known as ephemeral or intermittent streams streams that flow only when it rains.

25 Mountaintop Mining Pre-mining streams impacted by mining

26 Mountaintop Mining There is no such thing as a valley fill Fills are actually placed in the very highest reaches of an existing ravine. No valley floors are filled as so often portrayed by the media. Note the surrounding natural land forms. Once restoration is complete, it will be difficult to tell this fill from a natural hill side.

27 Mountaintop Mining There is no such thing as a valley fill This is a fill similar to the one on the preceding page, except that it was built approximately 20 years ago. It was also built in the very highest reaches of a ravine. Had the line not been added it would have been very difficult to see the fill. It has blended into the surrounding topography. This is a good example of the great care our miners take in restoring our mountains once the coal is removed.

28 Mountaintop Mining Surface mining in general and mountaintop mining in particular, play an essential role in keeping West Virginia coal competitive in the global marketplace. Production from surface mine operations constitutes approximately 40 percent of the total production of West Virginia s coal mines (68 million tons of a total of 161 million tons).

29 RESTORATION The Facts in Photos

30 Surface Mining The Rest of the Story The second phase is revegetation.

31 Surface Mining The Rest of the Story Early Phase 3 reclamation reforestation

32 Surface Mining The Rest of the Story Mid- to late- Phase 3 Restoration

33 Surface Mining The Rest of the Story Constructed water features enhance post-mining wildlife.

34 Surface Mining The Rest of the Story Another shot of the naturalization of the land.

35 Surface Mining The Rest of the Story Naturalized Pond, Breathitt County, KY (2007)

36 Surface Mining The Rest of the Story Wild Horses in Breathitt County, KY (2007)

37 RESTORATION Before and After (22 years) Side drains of a valley fill

38 More naturalized side drains RESTORATION Photos after 22 years

39 RESTORATION Photos after 22 years Side drains (Floyd County)

40 Surface Mining The Rest of the Story This is an artist s approximation of what current operations at Kayford Mountain will look like after restoration. At right is the same picture today.

41 Alternate Post-Mining Land Use and now, the rest of the story

42 Alternate Post-Mining Land Use SMCRA permits surface mined lands to be left in various non-original contour configurations if an alternative use is part of the planning (ie, recreation, industrial development, education, etc.)

43 Cross-section of mountain at a construction site showing why level land is needed in Appalachia MOUNTAINTOP MINING Targeted operations in a defined area Without mining, the people of Central Appalachia would be forced to build their homes and businesses on either a 20-year flood plain or perched on the side of a 45 degree slope.

44 Alternate Post-Mining Land Use MINING creates level land, land that has the potential for many other uses. Properly planned, mountaintop mining can truly be said to be building a new West Virginia. DEVELOPED SITES West Virginia: Pete Dye golf course Mount View High School built in 1980 New Hope Village - homes for 70 families Knights of Columbus Community Park built in the 1980 s by Buffalo Coal Co Davis Cemetery Robert Byrd High School built in the 1970 s Logan County Airport Weirton housing development and hospital Anker Sports Complex Twisted Gun Golf course Hilltop hunting preserve Hatfield-McCoy Trail

45 Alternate Post-Mining Land Use DEVELOPED SITES Kentucky AIRPORTS Big Sandy Regional Airport Carroll Airport Ford Airport Ohio County Airport PRISONS Federal Correctional Institute East Kentucky Correctional Complex Medium Security Prison Knot County Otter Creek Correctional Center Juvenile Boot Camp EDUCATION Clements Job Corps Center Army National Guard Training Center LANDFILLS Six solid waste landfills GOVERNMENT SERVICES Hazard Amory; jail and state police barracks FARMS Mapco/Morehead Agriculture Center Martin County Coal Corp. Farm DNR Brangus Farm Hawk Farm INDUSTRIAL PARKS Clay Industrial Park Coalfields Industrial Park

46 Alternate Post-Mining Land Use The Rest of the Story Former surface mines can provide the flat land so essential to industrial and community development Earl Ray Tomblin Hotel and Convention Center

47 Alternate Post-Mining Land Use The Rest of the Story Logan Airport is built on former surface mine lands and provides access to the area.

48 Alternate Post-Mining Land Use The Rest of the Story Mylan Park in Morgantown is built on a former surface mine site.

49 Alternate Post-Mining Land Use The Rest of the Story Post-mined land can also be used for commercial agriculture, such as this vineyard and commercial nursery

50 Alternate Post-Mining Land Use The Rest of the Story The FBI Center in Clarksburg is built on a former surface mine site. It provides jobs for hundreds and served as a development springboard for the area

51 Alternate Post-Mining Land Use The Rest of the Story The Twisted Gun Golf Course near Logan is an 18- hole gem that provide Britishstyle play. It is on a former mountaintop removal site.

52 Alternate Post-Mining Land Use Housing subdivision in Hazard.

53 Alternate Post-Mining Land Use The Rest of the Story A shopping mall in Bridgeport shows the wide range of development made possible across the state by the cooperation of mining and local planners.

54 Big Sandy Regional Airport (Martin County) 2003

55 Alternate Post-Mining Land Use The Rest of the Story Former mine lands provide sites for everything from hospitals to industrial plants, golf courses to schools and anything in between.

56 Vision for Tomorrow Active Reclaimed

57 Appalachian Coal: Our natural advantage What if - We stopped surface mining tomorrow?

58 Appalachian Coal: Our natural advantage Central Appalachian states (WV, KY and VA) surface mined 131 million tons of coal in percent of the total US coal production - 77,000 (est.) direct and indirect jobs are sustained by surface mining in the region. Surface Mines in West Virginia alone produced more than 69 million tons (42 percent) of the state s total production in ,164 surface miners are directly employed (2008 MSHA data) - More than 30,000 other West Virginia jobs depend on surface mining. Using an estimate of $50 per ton, West Virginia s severance tax of 5 percent surface mining generates approximately $172 million of the total severance taxes paid on coal production in 2008.

59 Appalachian Coal: Our natural advantage Central Appalachian states (WV, KY and VA) surface mined 131 million tons of coal in percent of the total US coal production - 77,000 (est.) direct and indirect jobs are sustained by surface mining in the region. Surface Mines in West Virginia alone produced more than 69 million tons (42 percent) of the state s total production in ,164 surface miners are directly employed (2008 MSHA data) - More than 30,000 other West Virginia jobs depend on surface mining. Using an estimate of $50 per ton, West Virginia s severance tax of 5 percent surface mining generates approximately $172 million of the total severance taxes paid on coal production in 2008.

60 Appalachian Coal: Our natural advantage Where does our country get electricity? Coal 52% Nuclear 20% Natural gas 16% Hydropower 7% Oil 3% Renewables 2% (wind, solar, biomass and geothermal)

61 Overview of Eastern Coal Strengths, Weakness, Opportunities and Threats 2009

62 Appalachian Coal: Our natural advantage Poised for the Future: The coal industry is well-poised on high-growth opportunities as the country pursues energy independence and economic growth from a strong domestic energy industry The industry has great capacity Committed management teams in place Aggressive business plans Qualified, experienced workforce Strong will to succeed Coalition for Mountaintop Mining

63 Market Forces on Eastern Coal Declining coal prices Federal/state safety legislation Federal/state safety regulations Litigation Imports (36.2 million tons) Production expenses: fuel, steel, rubber tires, permitting delays Competition from Powder River Basin

64 Appalachian Coal: Our natural advantage Competitive Forces: The region s coal industry competes in regional, national and international markets where the tightest of margins exists Western coal is on the rise Imported coal encroaches on Southeastern and Mid-Atlantic markets Coalition for Mountaintop Mining

65 OUR COMPETITION Approximately 100 feet A Powder River, Wyoming coal Coal Seam

66 Coal Production in United States

67 Production Trends Note: Eastern production represents 42 % of the nation s coal output and 80 % of coal-related employment (62,000 versus 16,000 total employees)

68 Thousand short tons Appalachian Coal: Our natural advantage West Virginia Coal Production by State Coal Production by State Wyoming 450, , , , , , , ,000 50,000 0 Alabama Illinois Indiana Kentucky Maryland Ohio Pennsylvania Virginia West Virginia Wyoming Years

69 Appalachian Coal: Our natural advantage Challenges Unique to Appalachia: Today s Appalachian coal seams are more difficult to access, require more sophisticated preparation and are further from the transportation points of rail and barge Tough geology Thinner seams Higher ratios Mining costs, i.e., fuel, engineering, permitting and reclamation, personnel, equipment and supplies have all turned sharply upward Aging workforce Overall shortage of workers. It is, however, most critical for our region since 79.2% of the miners are working in the eastern and mid-western coal industry. Human infrastructure must be developed today Legal challenges and continuing unpredictability in the permitting process have further inhibited the ability of the industry to maximize its production opportunities. Coalition for Mountaintop Mining

70 Appalachian Coal: Our natural advantage Our future success is dependent on how we deal with today s challenges on the national and international scale Global climate change Cap and Trade legislation Increasing renewable portfolio National Energy Policy EPA s assault on coal War on mountaintop mining

71 Appalachian Coal: Our natural advantage CONCLUSION: WORLD ENERGY DEMANDS WILL INCREASE AND COAL WILL CONTINUE AS A PREDOMINANT ENERGY SOURCE COAL IS THE KEY TO ENERGY INDEPENDENCE! AMERICA S COAL INFRASTRUCTURE IS WELL ESTABLISHED RECOMMENDATIONS: The state executives and legislatures must preserve and protect the coal industry in the region including mountaintop mining which makes up a major portion of the region s energy portfolio! Appalachian states must advance an attractive environment for investment in coal and advance programs to foster economic growth, expansion and sustainability of their energy portfolio Coalition for Mountaintop Mining

72 Appalachian Coal: Our natural advantage Program to foster economic growth and expansion of energy portfolio - Fair, Growth-oriented tax structure - Predictable mine permitting process - Manpower assistance (recruitment & training) - Infrastructure and technology fiscal incentives - Mine (operational) research - Fair and consistent regulatory and enforcement framework

73 Appalachian Coal: Our natural advantage SEE YOU AT THE RECEPTION THAT FOLLOWS.. THANK YOU!