International Demand Fuels Market for U.S. Coal

The Washington Times (Washington, DC), January 5, 2006 | Go to article overview

International Demand Fuels Market for U.S. Coal


Byline: Jeffrey Sparshott, THE WASHINGTON TIMES

The American coal industry, supported by burgeoning international demand for energy and continuing U.S. reliance on the fossil fuel for electricity, has seen steadily rising sales, revenue and investment after almost 20 years of stagnation.

"It is a thriving industry. We produce more coal year in and year out than ever before. It is still one of our lowest-cost, if not the lowest-cost, source of energy," said Trina Karolchik Wafle, associate director at National Research Center for Coal and Energy at West Virginia University.

A deadly accident at a West Virginia coal mine this week underscored the dangerous work performed by tens of thousands of miners to keep power plants and industries running worldwide.

Coal-burning power plants produce about half of all electricity in the U.S.

Rising prices for natural gas, caused by strong demand and exacerbated by hurricanes in the Gulf of Mexico this summer, has made some gas-fired plants too expensive to operate. They account for 23 percent of U.S. electric-generating capacity but less than 18 percent of output, according to the Energy Information Administration.

Regulatory limits on nuclear energy, which generates almost 20 percent of U.S. electricity, and technological barriers with other sources leave coal as one of the most cost-effective, if heavily polluting, sources of energy.

"Coal is still the predominant fuel used in generating electricity, and the demand for electricity continues to increase. Because of that, the demand for coal will continue to increase for the foreseeable future," said Pat Hemlepp, spokesman for American Electric Power, the largest U.S. coal consumer.

China, meanwhile, is demanding more fuel for its steel mills and growing electricity needs, prompting U.S. mines to export coal rather than leave it on the U.S. market. China is the world's largest coal producer and consumer.

"The wide-ranging economic expansion experienced in China in 2004 drove world

markets for many commodities into overdrive and helped to re-establish the United States into Asian coal markets," the EIA said in a November report.

Rising global demand has been good news for U. …

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