Alliance Resource Partners will invest $600 million over the next
three to four years to bring three new coal mines online, bringing
its inventory to 11.
That move reflects anticipated long-term growth for both U.S. and
world demand for coal, driven by increased electrical generation
needs, President and Chief Executive Joseph W. Craft III told a sold-
out University of Tulsa Friends of Finance audience Tuesday.
But investments such as Alliance plans come with increasing risk,
as scientists and politicians debate potential carbon emission
regulations, said Craft.
The head of the nation's fourth largest coal production operation
warned that those environmental steps, if taken without regard for
existing technological capabilities and increased research, could
have drastic impact on U.S. and world economic growth by reducing
usage of the key component to cheap power.
"The cost of electricity is driven by a large part on the percent
of coal used to generate it," said Craft, defending his industry's
performance and interests while linking future gross domestic
product growth to a continued abundance of inexpensive electricity.
"Coal remains the low-cost alternative."
Craft said electrical power generation by coal-fueled plants rose
50 percent last year to 3.9 billion kilowatts per hour.
Federal government projections estimate that will grow to 4.9
billion kilowatts by 2030, with improved sulfur removal technologies
allowing the coal-fired market share to hit 57 percent.
Coal usage is projected to rise 48 percent over that period, he
said, comprising the majority of power generation. Renewable sources
would increase 60 percent, he said, while nuclear power generation
would climb 19 percent and petroleum sources 9 percent.
Natural gas projections call for a 24-percent drop due to
insufficient production and forced imports of liquid natural gas.
But Craft warned carbon emission regulations could skew those
Craft did not urge regulators to turn away from alternative power
sources. He said he embraced increase usage of renewable, nuclear,
natural gas and other electrical power generators.
"The question's going to be, 'How are we going to generate that
electricity?'" he said, with the answer helping determine not just
future U.S. economic performance but its place in a competitive
Renewable sources, he said, can not be developed in a scale
necessary to replace the electricity generated by coal-fired plants.
The sources also remain plagued by intermittent availability and
continued storage problems. …