Coal s Vital Role in America s Energy Future

Transcription

1 Coal s Vital Role in America s Energy Future Kim Link, Spokeswoman July 24, 2009 William Jewel College, Liberty, Missouri

2 Arch Coal is a leader in the U.S. coal industry One of the largest coal producers in the United States Supply roughly 12 percent of the U.S. coal supply Provide cleaner-burning, low-sulfur coal to domestic power producers to fuel 6 percent of the nation s electricity Ship coal to domestic and international steel manufacturers as well as international power producers Talented workforce operates large, modern and efficient mines Industry leader in mine safety and environmental commitment Source: ACI 2

3 Arch s national scope of operations and reserve base includes presence in four major U.S. coal basins Powder River Basin 1. Coal Creek 2. Black Thunder Illinois Basin Knight Hawk Western Bituminous 1. Arch of Wyoming 2. Skyline 3. Dugout 4. Sufco 5. West Elk Central Appalachia 1. Mountain Laurel 2. Coal-Mac 3. Cumberland River 4. Lone Mountain Free surface coal mine tour offered to the public during the summer at Thunder Basin Coal Company s Black Thunder mine near Wright, Wyoming. Fly into Rapid City, South Dakota and incorporate sight seeing at Mt. Rushmore and Devil s Tower. Call for details and reservations. Source: ACI assigned reserves at 12/31/08 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 Source: ACI 4

5 Where is coal found? Source: EPRI 5

6 What is coal used for? 2008 U.S. Coal Consumption: 1.1 billion tons Industrial, Residential & Commercial (5%) Metallurgical (2%) Coal (85%) Electric generation (94%) Source: EIA, Annual Energy Review 2008 Projected 6

7 Coal is the dominant fuel source for U.S. electric generation 2008 Net Electricity Generation by Source (per billion KwH) Nuclear (20%) Coal Coal (85%) (48%) Natural gas (21%) Hydro (6%) Other Renewables (4%) Oil (1%) Source: EIA Flash Report 7

8 Missouri gets nearly 82% of its electricity from coal 2008 Net Electricity Generation in Missouri (per billion KwH) Coal (82.4%) Nuclear (10.3%) Coal (85%) Natural gas (5.5%) Hydro (1.3%) Crude Oil / Other (.5%) Source: EIA State Electricity Profiles 8

9 Myth #1 Perception Mining coal is hard, back-breaking work performed for low pay Reality Modern coal mining is an engineering marvel performed by highly skilled and well-paid engineers, technicians and equipment operators 9

10 Today s coal mine is highly mechanized and computerized Workers are generally equipment operators, mechanics, electricians, engineers New generation of miners comfortable with joysticks and computers Among the most regulated industries in the nation Source: ACI 10

11 Anatomy of a longwall operation Copyright

12 A longwall is the most efficient method for extracting coal underground Source: ACI 12

13 Anatomy of a dragline operation Copyright

14 The dragline is one of the world s largest earthmoving machines Source: ACI 14

15 The dragline s bucket can dig an Olympic-sized swimming pool in 25 minutes Source: ACI 15

16 After the soil and rock are removed, electric shovels move coal to haul trucks Source: ACI 16

17 A single load of coal in the typical haul truck can power the average U.S. home for 30+ years Source: ACI 17

18 Coal is loaded in rail cars, barges or trucks and transported to power producers Source: ACI 18

19 Myth #2 Perception Mining is the most dangerous occupation in America Reality In terms of injuries, working in a coal mine is safer than working on a farm, in a factory or even at a retail outlet 19

20 Public perception of unsafe work conditions contradicts today s modern coal mining U.S. Coal Mine Safety & Productivity Trends ( ) U.S. Industry Injury & Illness Rates (per 100 employee-hours worked) No. of Fatalities Million Short Tons Fatalities U.S. Production Hospitals Transportation & Warehousing Manufacturing Construction Agriculture, Forestry & Fishing Retail Coal Mining The U.S. coal mining industry is safer than construction, forestry and fishing, manufacturing Sources: NMA, MSHA, Department of Labor Statistics 20

21 Myth #3 Perception Environmental issues outweigh any positive benefits for using coal Reality The increasingly clean use of coal has led to dramatic improvements in the quality of America s natural environment 21

22 Coal use is consistent with the nation s environmental objectives Comparison of Growth Areas and Emissions, Coal-based electricity has increased >180% since 1970 Source: EPA Air Quality Trends

23 Reclaiming the 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 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: ACI, West Virginia Department of Environmental Protection 23

24 Myth #4 Perception The United States must eliminate fossil fuel use to reduce global climate change Reality The developing world will continue to use indigenous energy sources, the U.S. must provide technology leadership to make an impact 24

25 Economic growth around the world is putting pressure on energy markets Electricity Consumption (percent change, billion kilowatt hours) 17.0% 60.1% 174.6% 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000 Worldwide Electric Generation & Forecast (billion kilowatt hours) OECD Non-OECD U.S. India China Electricity demand in developing nations will nearly triple the growth rate of the developed nations through 2030, as defined by membership in the Organization for Economic Cooperation and Development (OECD) Source: EIA International Energy Outlook 2009, EIA International Energy Annual 2006 (published 12-08) 25

26 Coal has been the world s fastest-growing fuel source in the past seven years Cumulative Percent Change in Global Energy Consumption (in million tonnes of oil equivalent) Since 2000, global coal use Coal 41% has grown by 41%, roughly double the consumption growth in natural gas Nat. Gas Hydro Oil Nuclear 6% 11% 19% 25% Growth in coal demand will continue to be driven by consumption in the developing world, with gains in the developed world as well Fossil fuels are expected to remain dominant global energy sources through 2030 Source: BP Statistical Review of World Energy

27 Coal s advantage: abundant, secure and widely dispersed billions of tonnes of oil equivalent 200 Coal Russia Natural Gas Oil North America Europe Middle East China India Central and South America Africa Other Asia Pacific Based on current production levels and proven reserves, coal should outlast both gas supplies and oil reserves by more than 3 times Source: ACI, Bank of America, BP Statistical Review 2009 and Blackwell Energy Research 27

28 Coal is an affordable and secure energy choice for America U.S. Energy Reserves (in trillion Btu) U.S. Petroleum Supply (million barrels per day, 2007) U.S. Fuel Prices ($/million Btu at 7/10/09) Coal: 94% OPEC 30% Domestic 35% Other Imports 35% >7x $0.50 ~23x $3.37 $10.33 = $60 per bbl Coal Natural Gas Oil Domestic OPEC Non-OPEC PRB 8800 FOB rail (3Q09) Natural Crude Gas Oil Wellhead (prompt month) Source: EIA, BP Statistical Review of World Energy 2008, Argus Coal Daily and NYMEX 28

29 Where will the United States get its future power, if not from coal? U.S. natural gas production is keeping pace with demand at current 20% market share levels but the ability to expand share significantly is questionable. Since 2000, nuclear utilization has been at or close to 90% and the fleet is aging. At least 30 new units are needed by 2030 just to maintain current market share. Hydro power is concentrated in the Northwest. No net additions to capacity are anticipated. While renewables can play a growing role (beyond 3% currently), they face enormous hurdles before achieving baseload status. Even if the U.S. can meet an ambitious goal of 25% renewable energy by 2030, it still leaves 75% of our power requirements to other fuels. Source: EIA, ACI and Baker Hughes 29

30 Coal can and will handle the lion s share of new electricity demand in the U.S. Net Generation by Fuel Type (in billion kilowatt hours) Coal ,022 2,414 Nuclear Natural Gas Hydro Renewables Crude Oil Source: EIA (2007 actual data; 2030 projected in AEO 2009) 30

31 Low-cost electricity enhances America s standard of living and global competitiveness 1% 7% 8% 22% #1 0% Coal: 94% 82% 37% 63% 91% 95% 74% 65% % = % of total generation from coal Note: Hydro states rank in top 10 states for low electricity prices 52% 66% 73% 37% 48% 60% 77% 81% 47% 66% 26% 48% 61% 14% 95% 85% 98% 44% 94% 61% 63% 41% 35% 51% 63% 53% 30% 2% CT: #49 Lower 48 states plus DC Least expensive Most expensive Hydro Power Costs (U.S. cents per kilowatt hour) Ireland 24.4 Germany 22.2 United Kingdom 21.9 Japan 17.8 France 15.8 United States 10.6 NY 18.8 CA 14.4 TX 12.8 MO 9.1 There is a strong correlation between coal use and power prices. Electricity is a major input cost in most economic enterprises esp. manufacturing. Source: EIA Electric Power Annual, March 2009, EIA International Electricity Prices for Households 31

32 Over the long term, clean-coal technologies can broaden market demand for coal A plug-in hybrid is one entry for coal into the transportation market Likely to create significant off-peak demand for electricity Coal can be converted into transportation fuel At current oil prices, coal-to-liquids facilities are economically feasible Public policy initiatives aimed at domestic energy security are spurring debate on energy legislation and incentives for clean-coal technology development Gasification can reduce emissions and transform coal into pipeline-quality natural gas IGCC and CCS should enable coal to prosper in a carbonconstrained world Source: ACI 32

33 Coal can play a significant role in meeting America s future energy needs Nearly half of electric generation and growing Coal conversion technologies will help satisfy America s oil addiction and provide greater U.S. energy independence Coal has an economic advantage versus competing fuels, and it has been proven more reliable Technology is enabling increasingly clean and carbonfriendly uses of coal America has well-developed and reliable infrastructure in place to produce and transport coal expansion is possible albeit with significant levels of investment Source: ACI 33

34 This presentation and other teaching materials and links are available online Source: ACI 34

35 is an excellent resource Source: American Coal Foundation 35

36 And a site for your students kcplkids.com 36