A Year-End Review
Executive Advice
Monday, 02 April 2007
smc Coal's role in the economy
Reports point to a growing role of coal in the economy, and the steps needed to mine it safely.

The waning days of 2006 were relatively quiet in Washington, with most attention directed at the incoming 110th Congress. Even so, several important developments in November and December drew industry attention.

For instance, a new report on the nation's energy use contains information "both welcome and cautionary," said Kraig R. Naasz, president and CEO of the National Mining Association (NMA).

According to the U.S. Energy Information Agency's (EIA) Annual Energy Outlook for 2007, released in December, "coal is projected to play a growing role" in the economy of the United States through the year 2030.

"The forecast that coal will increase its share of the U.S. electricity generation market to 57 percent, and thus increase its share among major fuels, should be welcome news in a country blessed with the world's largest coal reserves," Naasz said. "EIA expects rapid growth in coal use for both electricity generation and for coal liquefaction, which by 2025 [is projected to] become the second-largest use of coal production after electric power generation."

Despite the expected popularity of coal, Naasz noted, the study forecasted that environmental emissions from coal-fired power plants actually will decrease in the early decades of the century. This includes a projected 70 percent drop in mercury emissions between 2005 and 2030, as well as a 64 percent decrease in sulfur dioxide and a 37 percent reduction in nitrogen oxide releases.

"Coal is expected to remain both abundant and affordable as the premier fuel for U.S. power production, enjoying both supply and price advantages over competing fuels," he said, but noting that the EIA report also contained a "cautionary message."

"[Coal's] continued value to the nation will be sensitive to policies that could arbitrarily ration or constrain coal's use," Naasz warned. "This would result in higher energy prices for U.S. manufacturers and consumers and greater reliance on costly imported energy."

Mine Safety
Also in December, the Mine Safety Technology and Training Commission issued its highly anticipated report. NMA had convened the panel in March in the wake of several fatal mining accidents.

"The commission's recommendations are both near-term and far-reaching in scope," Naasz said in a joint statement with NMA Chairman James F. Roberts. "Many endorse actions taken earlier this year by Congress in passing the Mine Improvement and New Emergency Response Act of 2006, which NMA supported and President Bush signed into law.

"Further, NMA and its members already have begun preparatory work on implementing some of the commission's recommendations, and we look forward to further work on its key findings."

Naasz and Roberts noted that although "the mining industry has achieved dramatic improvements in safety performance - by cutting the rate of injuries and fatalities in U.S. coal mines in half over the last 15 years - the tragedies in America's coal fields this year led us to take a new look at how we approach everyone's responsibility to operate and act safely.

"We challenged the commission to come back to us with a comprehensive analysis and meaningful recommendations by the end of the year. They have met that challenge, and the work is now up to us and those with whom we share responsibility for coal mining safety."

The report contains 75 recommendations to improve safety in underground coalmines. According to Dr. R. Larry Grayson, chairman of the commission, "it details a comprehensive approach to increase significantly the odds of survival for miners in emergency situations and to create a culture of prevention to address significant hazards that lead to injuries."

In general, Grayson said, the panel recommends:
· "Better technology in communications, mine rescue training, and escape and protection of miners;
· "More frequent and realistic training focusing on key principles;
· "A broadened and more professional emergency response and mine rescue capability;
· "Development of a culture that supports safe production at the business core."
The report can be found at www.coalminingsafety.org.

Reaching Out
Perhaps seeking to avoid the sort of bad publicity generated earlier in the year when gasoline pump prices soared, Red Cavaney, president and CEO of the American Petroleum Institute (API), reminded Congress that "gasoline prices have continued to fall" and home heating fuel costs have stabilized.

In a letter sent shortly after the mid-term elections, he assured lawmakers "we look forward to working with you to develop workable solutions to meet ... energy needs."

 
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