Coal Is One Answer To Our Energy Demands:Executive Calls Coal Key to Energy Needs
Posted on: Saturday, 15 March 2008, 12:00 CDT
By JASON WOMACK
Challenges facing electric utilities and the coal industry were addressed Tuesday by energy executive Joseph W. Craft III during the Friends of Finance speaker series.
"We're not building power plants at a rate fast enough to meet the demands of this country," he said during a luncheon presentation at the University of Tulsa.
Craft is president and CEO of Tulsa-based Alliance Resource Partners LP, the fourth largest coal producer in the eastern U.S. The company operates eight underground mining operations and has plans to invest $600 million to pursue growth opportunities.
The coal industry, Craft said, has suffered from "negative spin," but the fuel will continue to be a significant energy resource.
Coal is used to generate half of the nation's electricity, and that could grow to 57 percent of the nation's total power portfolio by 2030, absent carbon legislation, Craft said.
The increase is due, in part, to the low cost of the fuel.
The nation's three largest coal-producing states -- Wyoming, West Virginia and Kentucky -- generate 95 percent of their electricity from coal, and their residents pay some of the lowest prices for power, he said.
Craft noted that the nation demands more and more electricity. It needs nuclear power plants and natural gas plants, but each of those power sources faces obstacles.
Natural gas suffers from price volatility and international competition for the fuel, Craft said. Nuclear power plants are also important, but adding meaningful nuclear capacity remains years away.
Wind and solar power is intermittent, he said, and cannot be sufficiently stored to meet around-the-clock demand.
"Efficiency is going to be a component," Craft said. "We have to invest in technology not only for coal but for all our energy sources."
Craft said coal prices have risen as demand for electricity grows in China. And plans to build some coal plants have been stalled in anticipation of legislation curbing emissions of carbon dioxide.
However, construction of coal-fired power plants has not stopped. A total of 47 units are permitted, near construction or under construction in the U.S., and they are expected to add 23,166 megawatts of baseload capacity.
Craft said coal will remain the most stable and predictable source of energy over the long term. The U.S. has a coal supply that will last for 200 or more years, and coal is less expensive than many energy sources.
"There is such an abundant supply that the markets will continue to work," he said following the presentation.