2012 Coal Market Strategies wrap up
The 2012 Coal Market Strategies Conference held August 20-22 at the Meritage Resort and Spa in sunny and beautiful Napa, CA was a well-received and well-deserved success.
Thanks must first go out to our conference program development committee for the hard work and the excellent selection of conference speakers and diverse range of topics covered. Thank you to:
- Judy Tanselle, New World Coal Management
- April Anderson, Black & Veatch
- Jesse McCabe, BNSF Railway
- Staci Pierce, Baker, Donelson, Bearman, Caldwell & Berkowitz PC
- Janet Gellici, American Coal Council
Our opening day was busy with the Board of Directors meeting held early and then followed up by our newly reinstated – thank you Charles! – ACC Golf Tournament and our Tomorrow’s Leadership Council (TLC) professional development seminar.
The TLC group was given an intense four-hour course on “Results Oriented Communication” by Alex Epstein, president of the Center for Industrial Progress (www.industrialprogress.net). The TLC group learned through several real-life examples, group discussion, and group work how to better target communications and publications to achieve a desired goal. They were also cautioned to research their expected audience(s), putting their efforts into a broader context before proceeding with development. Before finalizing the afternoon, the group worked through the real-life example of Northwest port expansion to help cement the concepts learned that afternoon.
That evening the TLC group also enjoyed a special networking dinner with several senior industry executives, giving the group a chance to meet and spend time with potential clients, contemporaries, and (possibly even) future employers. This dinner helps to vest these up-and-coming executives in the industry and allows them to build lifelong connections with other key industry contacts.
Moving into the general conference sessions, attendees were challenged by Alex Epstein’s opening keynote address. Epstein is an unabashed supporter of the benefits of fossil fuels and encouraged our industry to reject fallacious attempts to define us solely through some list of potential negatives dreamed up by special interests. He challenged the industry to instead stand up for the good that coal has brought our country and the world.
Considering our environment, wealth, and well being from the perspective of our ancestors, Epstein showed how coal has cleaned our air and water, bettered human living conditions, improved our health, increased our incomes, and strengthened our economies. He explained how, by improving human lives, we in the coal industry actually have the moral and environmental high ground and should be proud to openly say we work in the coal industry.
Bob Roth from PIRA Energy Group and James Lamoureaux from IGP Energy then considered what the role of coal will be as an American and international energy resource. While coal prospects in the U.S. are lagging due to an extreme list of new regulations and low natural gas prices, Roth noted that coal is expected to remain a key US power resource well into the future. He also noted that there is considerable work to be done in retrofits for emissions reduction equipment and that exports are a bright spot for the industry. Lamoureaux was unequivocally positive in his outlook for coal’s growth internationally, highlighting Chinese and Indian demand as key drivers.
Laurie Hennessey of the Alliance for Northwest Jobs and Exports (www.createnwjobs.com) then discussed the challenges facing Northwest port developments and the work being done to bring ports developments to the Pacific Northwest. Al Knapp of Ambre Energy–described the Morrow Pacific Project and the push to develop the Port of Morrow, a port property located on the banks of the Columbia River. While opposition to the idea of Northwest ports is getting much of the media attention, these speakers demonstrated that there is considerable support from public and the business community for the business and development opportunities they would bring to the Northwest.
Bernie Muich of CME Group followed by delving deeply into the mechanics of international trading markets, looking at the development of different derivatives markets for international coal sales. Fred Murrell then investigated the ability of Asian coal suppliers to outpace American producers. Murrell noted that significant opportunity exists despite stiff price competition from Australia and Indonesia as Chinese coal builds continue to skyrocket and Indian imports are forecasted to grow well into the future.
In an information-packed roundtable session, Mike Borgstadt and Block Andrews from Burns and McDonnell looked at the regulatory world facing US-based utility coal users. Borgstadt and Andrews discussed the list of pending environmental regulations; NAAQS changes, MATS, GHG new source performance standards, the just vacated CSAPR, regional haze SIP/FIPs, changing coal ash designations, and water issues. They also considered the compliance costs and options available to utilities, such as fuel switching, retrofits, and retiring/replacing. Given the costs involved, Borgstadt and Andrews suggested that “flagship” coal units would likely be retrofitted to meet coming regulatory requirements and as much as 80 GW of older units could be slated for retirement. If the retired units were to be replaced by gas CCGT, there would need to be a 38 percent increase in gas generation.
Robert Beck of the National Coal Council provided “The Compelling Business Case for CO2 EOR.” He noted that with widespread deployment of carbon capture and utilization, domestic oil production could grow by 3.5 million barrels per day for the next 40 years and US industry could continue to meet our growing energy needs while also playing a positive roll in meeting the current federal goal of 80% capture of CO2 emissions by 2050.
Ann Banks of Summit Power reviewed the Texas Clean Air Project and described how the development of their “polygen” facility could see the construction of clean coal generation capacity that also produced urea for fertilizer, CO2 for enhanced oil recovery (EOR), and other essential chemical byproducts. Banks described how this project is expected to operate below Texas limits for NOX, SOX, and PM, while also achieving a 90 percent CO2 capture rate. Given the growing EOR-based demand for CO2 in the project area, they expect demand to outstrip CO2 supply for 40 years.
Dr. Nina French of ADA-ES then described the CyClean and M45 Refined coal for cyclone and circulating fluidized bed combustion boilers. French showed how ADA-ES partnered with other companies and used the refined coal tax credit to meet the needs of a niche market requiring both mercury and NOX emissions reductions. French showed how utilities using this technology could reduce mercury control costs, cut NOX emissions, and receive a $1/ton payback with zero additional capital costs.
Gordon Howald of Doyle Trading Consultants (DTC) provided the closing keynote address, reviewing the findings of DTC’s just published 2012-2015 Coal Demand Analysis, titled “New Coal Generation – The Overlooked Factor”. Howald discussed the EPA’s prolonged war on coal, which DTC reported had or would cause over 41MW of coal announced retirements, and would also essentially shut down new coal builds after 2015 due to the GHG emissions standards for new sources. Looking out to 2015, Howald and DTC forecast US coal demand to drop to approximately 840 million tons. Howald also considered the continuing competition facing coal from renewables, gas, and nuclear, showing that even with our competitors receiving preferential subsidies and tax benefits, and with full environmental controls on coal, we remained essentially competitive against other energy forms. Howald closed out his discussion by suggesting, however, that the push to ban coal would create a “perfect storm” for ratepayers and that governments would suffer a substantial public backlash as electricity prices began to grow over the next several years.
The conference then wrapped up with the TLC group presenting their findings to date for their annual project. The group presented information on how coal has benefitted the country: providing high-paying jobs and positive economic impacts, improving human health and well being. They reviewed some of the attacks that have been made on coal and then provided suggestions for improving the public view of coal through education and positive, proactive marketing efforts on the part of the coal industry.
While dark clouds remain on the industry’s horizon, the coming election, expanding export markets, current construction of new coal power, and growing industry and public understanding of the costs of the war on coal all serve as breaks in those clouds. There is a bright future for the coal industry and the speakers and attendees at the 2012 ACC Coal Market Strategies Conference happily could start to see the sun shining through.
We do welcome your comments and input on the Coal Market Strategies conference, as well as our other events, please don’t hesitate to contact us at 202-756-4540 or firstname.lastname@example.org with helpful hints, constructive criticism, speaker, or topic suggestions.