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Impact of global coal demand evident locally
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Robert “Bobby” Burns was riding on a rough mountain road south of Trevorton last year when he noticed a large chunk of anthracite coal sticking out of the ground. It was the edge of a vein left exposed from prior illegal deep mining.
The fact that the vein was so close to the surface was good news for Burns, because he was surveying an area where he intends to open a new strip mine by year’s end.
The thought of a sizeable new mining operation in the lower anthracite region is unusual in the 21st century, particularly on the western fringe in Zerbe Township. But it may be another indicator that the local coal industry will indeed be called upon to help supply the growing global demand for coal.
Burns, vice president of Keystone Anthracite Corp., of Girardville, said most coal in the region today is sold pretty much the second it’s dug from the ground.
“With the demand and price, it is easy to sell,” Burns said. “There are no stockpiles anywhere.”
Burns isn’t alone in his optimism. In fact, Frederick Palmer, senior vice president of government relations for Peabody Energy, of St. Louis, Mo., the largest private sector coal company in the world, said it has never been a better time to be in the coal business, anthracite or bituminous.
Clark Harrison, a member of the National Coal Council and chief executive officer of CQ Inc., of Blairsville, said the industry recognizes that anthracite coal has a higher quality.
“There is an increase in demand for coal both domestically and internationally,” Harrison said.
Expensive proposition
Burns, who is leasing land for the mine from Girard Estates, of Philadelphia, will hire three new employees for his new operation. Already working on the project for nearly 18 months, Burns said he hopes production will begin as soon as permits are approved by the state Department of Environmental Protection (DEP), which he said could be within six months.
Burns said he began his study of the new mine site by examining cross-sections on old mine maps. He also conducted test drilling.
The mine will be a smaller operation then Keystone’s other mining operations near Girardville and Centralia, Burns said, with 900 acres on the permit. He said he will mine 20 acres at a time while following the coal vein. The pit will be filled in as the drag line removes the coal, he said, complying with Act 77 of 1977, requiring stripped mine land to be reclaimed by the company doing the mining.
Burns is unsure how much coal is beneath the surface or how long he will be mining the area.
Such unknowns, along with the cost of a new mining operation, will prevent any resurgence of smaller mine operations, Burns believes. The capital required is more than many can afford.
A bond valued at $3,600 per acre of ground that will be disturbed must be secured, and 90 cents per cubic yard of area to be disturbed must also be paid in advance.
The money is held by DEP until mine lands are reclaimed.
Tom Rathbun, spokesman for DEP, said anthracite coal mining is a niche industry and has just a handful of property owners controlling the majority of coal lands. With that, there hasn’t been a dramatic increase in permit requests in the anthracite region compared to the bituminous coal fields of western Pennsylvania.
Changing coal market
Several years ago, coal was much more difficult to sell, Burns said. But with the cost of oil and natural gas skyrocketing, the value and demand for coal has risen.
Burns said people recognize anthracite’s value over its competitors as a heating source, too. For example, 180 gallons of oil produces the same amount of BTUs as one ton of anthracite coal, Burns said. At $3.50 per gallon for oil, it would cost $630 to get the same BTUs as a ton of coal for $175.
Northumberland County has a further advantage, said Steve Bartos, director of the Northumberland County Planning Commission and a former DEP employee.
“The best coal in the world is right here,” he said.
He said there is an estimated six to seven billion tons of recoverable anthracite coal in Pennsylvania.
“We are seeing a dramatic increase because of counties like India and China,” Bartos said. “Especially anthracite, because of the high carbon content.”
Poised to prosper?
According to Bartos, several owners of local coal companies, besides Burns, are visiting the possibility of opening new mines. “There is some permitting activity at the county level,” he said.
Also, Bartos said, foreign investors are traveling to the coal region looking to purchase anthracite coal.
With electricity rate caps proposed to be lifted in 2010, Bartos predicted the demand for the waste coal also will be on the rise for electric power generation.
“Co-generation plants can generate electric power and the coal is already out (of the ground),” he said.
Overall, he believes Northumberland County will be in a “good position in the global energy market” for coal’s comeback, a connection that is expected to be revealed in further detail at a news conference Wednesday in Shamokin announcing a major energy and economic development initiative led by Northumberland County.
Competing with China
Burns said in recent years it had been difficult to compete with coal production in China. With lax mining regulations, operations there can produce coal very inexpensively.
China, however, because of its demand, has since become a net importer of coal, said Palmer from Peabody Energy. Even though it produces some 2.5 billion tons annually, it’s not enough.
The fact that the vein was so close to the surface was good news for Burns, because he was surveying an area where he intends to open a new strip mine by year’s end.
The thought of a sizeable new mining operation in the lower anthracite region is unusual in the 21st century, particularly on the western fringe in Zerbe Township. But it may be another indicator that the local coal industry will indeed be called upon to help supply the growing global demand for coal.
Burns, vice president of Keystone Anthracite Corp., of Girardville, said most coal in the region today is sold pretty much the second it’s dug from the ground.
“With the demand and price, it is easy to sell,” Burns said. “There are no stockpiles anywhere.”
Burns isn’t alone in his optimism. In fact, Frederick Palmer, senior vice president of government relations for Peabody Energy, of St. Louis, Mo., the largest private sector coal company in the world, said it has never been a better time to be in the coal business, anthracite or bituminous.
Clark Harrison, a member of the National Coal Council and chief executive officer of CQ Inc., of Blairsville, said the industry recognizes that anthracite coal has a higher quality.
“There is an increase in demand for coal both domestically and internationally,” Harrison said.
Expensive proposition
Burns, who is leasing land for the mine from Girard Estates, of Philadelphia, will hire three new employees for his new operation. Already working on the project for nearly 18 months, Burns said he hopes production will begin as soon as permits are approved by the state Department of Environmental Protection (DEP), which he said could be within six months.
Burns said he began his study of the new mine site by examining cross-sections on old mine maps. He also conducted test drilling.
The mine will be a smaller operation then Keystone’s other mining operations near Girardville and Centralia, Burns said, with 900 acres on the permit. He said he will mine 20 acres at a time while following the coal vein. The pit will be filled in as the drag line removes the coal, he said, complying with Act 77 of 1977, requiring stripped mine land to be reclaimed by the company doing the mining.
Burns is unsure how much coal is beneath the surface or how long he will be mining the area.
Such unknowns, along with the cost of a new mining operation, will prevent any resurgence of smaller mine operations, Burns believes. The capital required is more than many can afford.
A bond valued at $3,600 per acre of ground that will be disturbed must be secured, and 90 cents per cubic yard of area to be disturbed must also be paid in advance.
The money is held by DEP until mine lands are reclaimed.
Tom Rathbun, spokesman for DEP, said anthracite coal mining is a niche industry and has just a handful of property owners controlling the majority of coal lands. With that, there hasn’t been a dramatic increase in permit requests in the anthracite region compared to the bituminous coal fields of western Pennsylvania.
Changing coal market
Several years ago, coal was much more difficult to sell, Burns said. But with the cost of oil and natural gas skyrocketing, the value and demand for coal has risen.
Burns said people recognize anthracite’s value over its competitors as a heating source, too. For example, 180 gallons of oil produces the same amount of BTUs as one ton of anthracite coal, Burns said. At $3.50 per gallon for oil, it would cost $630 to get the same BTUs as a ton of coal for $175.
Northumberland County has a further advantage, said Steve Bartos, director of the Northumberland County Planning Commission and a former DEP employee.
“The best coal in the world is right here,” he said.
He said there is an estimated six to seven billion tons of recoverable anthracite coal in Pennsylvania.
“We are seeing a dramatic increase because of counties like India and China,” Bartos said. “Especially anthracite, because of the high carbon content.”
Poised to prosper?
According to Bartos, several owners of local coal companies, besides Burns, are visiting the possibility of opening new mines. “There is some permitting activity at the county level,” he said.
Also, Bartos said, foreign investors are traveling to the coal region looking to purchase anthracite coal.
With electricity rate caps proposed to be lifted in 2010, Bartos predicted the demand for the waste coal also will be on the rise for electric power generation.
“Co-generation plants can generate electric power and the coal is already out (of the ground),” he said.
Overall, he believes Northumberland County will be in a “good position in the global energy market” for coal’s comeback, a connection that is expected to be revealed in further detail at a news conference Wednesday in Shamokin announcing a major energy and economic development initiative led by Northumberland County.
Competing with China
Burns said in recent years it had been difficult to compete with coal production in China. With lax mining regulations, operations there can produce coal very inexpensively.
China, however, because of its demand, has since become a net importer of coal, said Palmer from Peabody Energy. Even though it produces some 2.5 billion tons annually, it’s not enough.
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