Coal s Vital Role in Our Energy Future

Transcription

1 Coal s Vital Role in Our Energy Future Kim Link Director Communications Park Hills, Mo. July 20, 2012

2 Arch is a top five global coal producer and a leader in safety and stewardship Global Coal Producers (2011, in millions of tons) Coal India Shenhua Peabody 251 Glen/Xstrata* 198 Arch 157 U.S. Coal Producers (2011, in millions of tons) U.S. Reserve Holders (2011, in billions of tons) Peabody 251 Peabody 9.0 Arch 157 Arch 5.6 Alpha 106 Alpha 4.7 Cloud Peak 97 Consol 4.5 Consol 63 Patriot 1.9 Sources: ACI, Ventyx, company filings, press articles *Pro forma Slide 2

3 Arch is the most diversified U.S. coal producer, and the No. 2 reserve holder in the nation 5.6 Billion Ton Reserve Base Operations extend to every major coal supply basin * Western Bituminous Region 422 million tons of reserves Powder River Basin 3,382 million tons of reserves Illinois Basin 722 million tons of reserves Appalachia 1, Met/PCI million tons of reserves *Pro forma reserves at 12/31/11 Slide 3

4 What is coal? Coal is a combustible rock formed from the remains of trees, ferns and other plants that existed and died during the time of the dinosaurs Slide 4

5 Where is coal found? Source: EPRI Slide 5

6 Coal is used for electric generation and steel making in the United States 2011 U.S. Coal Consumption: 1.0 billion tons 2011 U.S. Electrical Generation by Source Steel Making 2% Industrial, Residential & Commercial 5% Oil >1% Hydro 8% Renewables 5% Electric generation 93% Coal 42% Natural Gas 25% Nuclear 19% Source: EIA, Electric Power Monthly Slide 6

7 Missouri gets more than 80% of its electricity from coal Natural Gas 5 % Coal 81% Nuclear 10% Hydro <2% Other renewables 1% Storage 1% Oil <1% Source: EIA State Electricity Files 2010 Slide 7

8 Myth No. 1 Perception: Mining coal is hard, back-breaking work performed for low pay Electric Reality: Coal (82%) Modern generation coal mining is an engineering marvel performed 93% by highly skilled, well-paid engineers, technicians and operators Slide 8

9 Today s coal mine is mechanized and computerized, employees are highly skilled and specialized Mining Engineers Environmental Engineers Electricians Diesel Mechanics Accountants Heavy Equipment Operators Truck Drivers Maintenance Personnel Look Closer at Modern Mining Slide 9 Slide 9

10 Anatomy of a longwall operation (underground) Electric Coal (82%) generation 93% Copyright Arch Coal 2007 Slide 10

11 A longwall is the most efficient method for extracting coal underground Electric Coal (82%) generation 93% Slide 11

12 Anatomy of a dragline operation (surface) Electric Coal (82%) generation 93% Copyright Arch Coal 2007 Slide 12

13 The dragline is one of the world s largest earth-moving machines Electric Coal (82%) generation 93% Slide 13

14 The dragline s bucket can dig an Olympic-sized swimming pool in 25 minutes Electric Coal (82%) generation 93% Slide 14

15 After the soil and rock are removed, electric shovels move coal to haul trucks Electric Coal (82%) generation 93% Slide 15

16 A single load of coal in the typical haul truck can power the average U.S. home for 30+ years Electric Coal (82%) generation 93% Slide 16

17 Coal is loaded in rail cars, barges or trucks and transported to customers Power producers, steel makers, manufacturers and other end users employ a variety of safe, reliable coal shipment options Slide 17 Slide 17

18 Myth No. 2 Perception: Mining is the most dangerous occupation in America Electric Reality: Coal (82%) In terms generation of injuries, working in a coal mine is safer than 93% working on a farm, in a factory or even at a retail outlet Slide 18

19 U.S. coal industry has a good record on safety, and is committed to making further improvements Incident Rates of Occupational Injuries in U.S. (number of nonfatal incidents per 100 full-time workers in 2010) 6.3 Transportation, Utilities 4.9 Education, Health 4.5 Agriculture, Forestry, Fishing 4.2 Services Manufacturing Construction 3.7 Leisure, Hospitality 2.2 Mining 1.2 Financial Activities Coal mining has achieved enormous improvements in worker safety Most U.S. coal producers have strong safety cultures and make safety their top priority Arch is ranked No. 1 in safety among large, diversified U.S. coal producers Source: Department of Labor Bureau of Labor Statistics Slide 19

20 Myth No. 3 Perception: Environmental issues outweigh any positive benefits of using coal Reality: The increasingly clean use of coal has led to improvements in the quality of America s natural environment Slide 20

21 Reclaiming land is part of the engineering plan and carefully followed Great care is taken to return the land to a natural and productive state Every affected acre must be restored to an equal or better condition with governmental oversight In West Virginia less than 1% of the state has been, is or ever will be affected by surface mining, and some of those former sites are developed for economic diversity In the West, reclaimed land is virtually indistinguishable from surrounding terrain within a few growing seasons Source: West Virginia Department of Environmental Protection Slide 21

22 Cattle graze on reclaimed mine lands in Wyoming Source: Thunder Basin Coal Co. Slide 22

23 Coal mining in the PRB offers significant land use advantages per Btu The Powder River Basin contains more than 100 billion tons of coal There are ~ 80 million tons of coal per square mile in the PRB Consequently, the industry is removing the coal from beneath The PRB supplies 45% of America s coal and over 20% of its power only ~ 6 square miles per year Together Wyoming and Montana total over 200,000 square miles Another 30% of U.S. coal comes from underground mining Only 10% of U.S. coal is mined in steep eastern terrain with surface techniques Slide 23 Sources: Bureau of Land Management, MSHA Slide 23

24 The U.S. power industry has a successful record of air quality improvements on which to build U.S. GDP (in 2005 $) +210% Coal-Based Electricity Generation +163% NO x Emissions -49% SO 2 Emissions -68% U.S. Population +50% 1970 to 2010 (percent change) PM 10 Emissions -75% Sources: NMA, EPA, EIA Emissions = Nitrogen Oxide (NO x ), Sulfur Dioxide (SO 2 ), Particulate Matter (PM 10 ) Slide 24

25 Myth No. 4 Perception: There s no such thing as clean coal; the United States must eliminate coal use to reduce global climate change Reality: The developing world will continue to use indigenous coal to fuel economic growth; the U.S. must provide technology leadership to make an impact Source: EIA State Electricity Files Slide 25

26 There are several primary sources of man-made carbon dioxide emissions World CO 2 Emissions by Sector Global CO 2 Emissions, Electricity & Heat Sector Residential 6% Other 10% Other 3% Electricity & Heat 41% Industry 20% Transport 23% Nat. Gas 15% Deforest. 25% Petroleum 31% Coal 26% Source: IEA CO2 Emissions 2011 Edition Slide 26

27 The developed and developing world must work together to address the climate challenge CO 2 Emission Trends (in giga-tonnes of CO 2 ) Non-OECD* OECD* China United States Rapid increases in CO 2 emissions in emerging Asia further underscore the need for clean coal technologies China is now the largest emitter of CO 2 and the developing world has surpassed the OECD nations in total emissions Clearly, we will need global solutions to address the climate challenge Slide 27 Source: World Energy Outlook 2008 *OECD = Organization for Economic Cooperation and Development

28 Investment in clean coal technologies is essential in addressing climate concerns Carbon Utilization Co-firing with Biomass Capture- Ready Plants Oxy-firing Carbon Capture & Storage Cleaner and more secure energy future IGCC Efficiency Gains Amine Scrubbing Hydrogen Coal Conversion Enhanced Oil Recovery The most promising way forward is via many separate paths. There is no one-sizefits-all solution that will meet the specific needs and requirements of every situation, or locale, or country For technologies in development, pursuing a portfolio approach is almost certain to be advantageous to lower the risk associated with any single technology and reduce the likelihood that an even better solution isn t left on the drawing board Slide 28

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30 Myth No. 5 Perception: The War on Coal is almost over, and natural gas will be named the victor Reality: While it s true that hydro-fracturing has unlocked new reserves of natural gas, coal will remain a vital part of the U.S. power sector s energy mix and a rapidly growing fuel source globally, as well as an integral part of the steel sector, too Slide 30

31 Coal is abundant, secure and widely dispersed 861 Proven Coal Reserves billion metric tonnes 6 Russia W Europe 23% 11% United States China India 7% 29% 14% Indonesia Colombia 1% 2% South Africa Australia 9% Source: 2010 BP Statistical Review 4% 30 Slide 31

32 Nations around the world are building coal plants to fuel electricity needs New Coal-Fueled Generation Coming Online by 2015 Capacity under construction, in GW, from CIS Countries Europe 16 United States China 4 6 India Middle East Africa Other Asia 31 Latin America 8 5 Under construction Total by GW 470 GW 950 million tons 1.6 billion tons Sources: ACI and Platts International, estimates based on plants currently under construction or planned Slide 32

33 Nations also will rely on U.S. metallurgical coal to feed the expansion of global steel consumption World Steel Production (in billions of tons of crude steel) Global Metallurgical Coal Use (in billions of tons of coal) P World steel consumption is projected to increase more than 50 percent Demand for steel is driven by rapid economic growth in Asia and continuous urbanization around the world Sources: ACI, World Steel Association and Steel Business Briefing Slide 33

34 Coal is an essential part of an all-of-theabove energy strategy Promoting the use of indigenous energy resources makes sense for any country, including the U.S. Huge coal supplies satisfy need for energy security, affordability and reliability Technology will continue to make coal use cleaner Promoting U.S. coal exports will encourage job growth and boost local and national economies Coal will continue to flow to energy hungry markets Participating countries will reap the benefits Slide 34

35 This presentation and other teaching materials and links are available on archcoal.com Slide 35

36 is an excellent resource Source: American Coal Foundation Slide 36

37 Take the America s Power Tour to get the scoop on coal-generated electricity Slide 37

38 Ameren s KidsActOnEnergy.com is a kid-friendly site Source: Slide 38