Coal industry sees a tangled future

Environmental rules limit ability

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— Coal industry representatives expressed their concerns Friday about their ability to meet future power demands when political and legal barriers may prevent them from growing along with the population.

"A study panel last year indicated that by 2017, Colorado will need an additional 4,700 megawatts of power. That's like four new Craig Stations and Craig is the largest plant in the state," said Mac McLennan, Tri-State Generation and Transmission Association's external affairs coordinator.

But simply building new coal-fired power plants as the population grows is not necessarily an option.

Regulatory uncertainty, market development, environmental concerns and a negative perception of coal by some in the public are all serious barriers to the possibility of developing new coal resources in the region, McLennan said.

He and fellow coal mine and power plant employees were participating in the second day of the Northwest Colorado Coal Conference in Steamboat Springs.

There is no doubt that there is demand for coal, McLennan said, but the market is very competitive.

"Although Colorado coal is cheap you can buy a ton for about the price of a good lunch and a drink in Steamboat Wyoming coal is much more so. There, a ton of coal sells for about $3.50," said John Harmon, general manager for Colowyo Coal Co. and Kennecott Energy.

Twentymile Mine southwest of Steamboat Springs sold 8.5 million tons of coal last year but is projecting it will sell 2 million fewer tons this year, employee Gary Buchan said.

"That's why we had to eliminate about 25 positions earlier this year," he said about layoffs at the mine.

Environmental concerns appear to be the largest barrier to building new coal-fired power plants, mine and power plant representatives agreed.

"Permits for new plants are being based more and more on the cleanliness of the plant," Tri-State's McLennan said. "This makes it tough for a coal-fired plant."

Air quality standards for wilderness areas, toxic release inventories, the regional haze rule for visibility are a few of the environmental regulations coal-fired power plants are controlled by.

"Coal-fired plants use an enormous amount of water. So water issues, as well as the Endangered Species Act because this water use affects habitat are also big issues," McLennan added.

Waste disposal and mercury regulations also are tremendous sources of concern, mine and power plant representatives all agreed.

As these environmental concerns have reached the public, coal has developed a fairly negative reputation, McLennan said.

"Coal is perceived as old and dirty," he said. "We have to turn around this illusion. Coal is not a dirty and old fuel."

The future of coal as a viable industry in northwestern Colorado may depend on its reliability.

McLennan said coal-fired power plants have an significantly lower rate of brownouts and blackouts than other power suppliers. He also explained that although coal-fired power plants cost millions of dollars to develop, they have a very long-term return, unlike other types of plants.

Still, the future of the Colorado coal industry remains uncertain. Coal is a non-renewable resource, as employees at Seneca Coal Co. know all too well. The surface mine south of Hayden is running out of coal and is looking at its options.

"We will not necessarily be closing down in five years, as rumors suggest. It depends on what sales are," said Brad Brown, manager of Seneca Coal Co. "We're working on maybe opening underground, looking at all our options, checking out other surface reserves. If we brought in underground mines, the surface reserves would last longer.

"There is plenty of coal to at least last through our contract (with the Hayden Station power plant) in 2011."

Other coal industry executives are investing in natural gas turbines as sources of power, industry representatives said.

Some utility companies, such as Public Service Co. of Colorado are investing in alternative sources of power such as wind turbines. In April of this year, Yampa Valley Electric Association decided to buy into a wind farm.

"We found that wind power is the most cost-effective renewable energy source," said Jim Chappell, YVEA manager of consumer accounts.

Coal mine and power plant representatives all agreed that there is plenty of coal for several generations to come, but contending with environmental control and harnessing enough of it to meet demand is less certain.

To reach Bonnie Nadzam call 871-4205 or email bnadzam@amigo.net

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