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FUGLEBERG: More coal exports, just not from Wyoming

Date: 20-08-2012
Subject: FUGLEBERG: More coal exports, just not from Wyoming
It’s the kind of deal that makes Powder River Basin coal producers lick their chops but still hurt from starvation.

A number of Eastern states and an Indian company announced a 25-year deal to sell 9 million tons of Appalachian coal each year to India.

For Kentucky and West Virginia, which both savored this week’s announcement, it’s said and done. It’s not very hard for them to transport coal to coastal terminals.

Gov. Steve Beshear of Kentucky trumpeted the $7 million deal between India’s Abhijeet Group and Booth Energy Group and River Trading Co., both Kentucky-based companies.

None of the speech-makers mentioned any concern about getting the coal to the coast.

For Wyoming and Montana coal producers aiming their product westward, it’s not so easy.

While there are multiple West Coast port proposals underway, protesters last week staged a rally in the Montana capitol to protest a coal sale, and opposition continues to gear up along the rail route and along the coast.

Concerns about exporting Powder River Basin to Asia are a potent mix of fears: coal dust; long, coal-laden trains; piles of coal; port pollution; and the long-term global climate effects of exporting more coal to burn elsewhere.

The coal industry is fighting to answer these concerns hand in hand with coastal communities eager for new jobs. Yet the battle for ports faces a powerful combination of local opposition and national environmental groups.

The equation is a bit simpler in India, which recently suffered power outages across a large chunk of the country — more than 600 million people lost service — partially due to a shortage of coal.

Securing a long-term contract for coal is crucial for the country, which can’t keep up with the demand for coal to power its industry and generate electricity for its huge population.

For Appalachian coal producers, the deal may be too little too late, a bandage on a wounded coal country that has lost business to the mines in the Powder River Basin.

“You’ve lost sort of 50, 60 million tons of production,” said IHS energy analyst James Stevenson, in an interview with Louisville, Ky., radio station WFPL.

“This is nine million, obviously that’s a small percentage of that. But probably the better upside here is that this could be the first of a number of deals,” he said.

It’s doubtful the deal or those that might follow will sail past without opposition. But that’s nothing compared to what Powder River Basin coal mine operators face to get coal aboard transport ships.

Still, all producers know the market’s cold hard truth: The U.S. is increasingly shedding coal-fired power plants and shifting to cheap, cleaner-burning natural gas. The U.S. will continue to burn plenty of coal from the Powder River Basin, but the basin’s future is fuzzier than it used to be, even a few years ago.

With the owners of coal mines here increasingly eying exports, the Appalachia-India deal means several things: It’s a hopeful sign of things to come but also a warning of future fights as U.S. coal producers vie for foreign customers.

One things seems clear: The battle continues for the future of Powder River Basin coal.

Source : trib.com

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