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U.S. Coal A 21st Century Resource
Gasification Technologies Council Board Meeting February 6th, 2014 ~ St. Augustine, Florida
Janet Gellici NCC Executive Vice President & Chief Operating Officer
Presentation Overview
National Coal Council Update on the Coal Industry
National Coal Council - Purpose
THE NATIONAL COAL COUNCIL PROVIDES ADVICE AND
RECOMMENDATIONS TO THE
SECRETARY OF ENERGY ON GENERAL POLICY MATTERS
RELATING TO COAL AND THE COAL INDUSTRY.
Review of federal policies which affect the production, marketing and use of coal.
Advice on plans, priorities and strategies to address technological, regulatory and social impacts related to coal production and use.
Advice on the appropriate balance between various elements of federal coal-related programs.
Advice on scientific and engineering aspects of coal technologies.
Advice on the progress of coal research and development. Celebrating 30 years ~ 1984|2014
NCC is a Federal Advisory Committee organized under FACA legislation.
National Coal Council - Membership
Members are federally appointed, nominated to serve and approved by Secretary of Energy
110-125 members
Industry – coal suppliers, utility & industrial consumers & coal transportation
Support Services – engineering firms, vendors, consultants & attorneys
Academics NGOs – environmental &
trade association reps Government – PUC &
state energy officials
National Coal Council - Leadership John Eaves, NCC Chair
President & CEO Arch Coal, Inc.
Jeff Wallace, NCC Vice Chair Vice President Fuel Svcs Southern Company
Fred Palmer Coal Policy Committee Chair
Senior Vice President Peabody Energy
Bill Brownell, Esq. Coal Policy Committee Vice Chair
Chairman Hunton & Williams
Executive Committee ADA-ES Alliance Coal Ameren Energy Arch Coal CH2M Hill Connemara Ltd. CSX Transportation Elm Street Resources Hunton & Williams Peabody Energy PPL EnergyPlus PSEG PTI Resources LLC Shenhua Group Southern Company Tri-State G&T
National Coal Council - Studies Over 30 Studies Conducted for the Secretary of Energy 1984|2013 Extensive Range of Topics
Carbon Management Clean Coal Technologies Coal Exports Coal Conversion Coal’s Image Utility Deregulation Climate & Clean Air Regulations Building New Coal Power Plants Industrial Coal Use Externalities Interstate Transmission CCUS for EOR
Studies prepared by NCC members. At no cost to DOE.
A Decade of NCC Research 2000|2012 Coal is Good for the Economy Coal is Good for the Environment Coal is Good for People
Coal-based energy is the foundation of social development, allowing more people to live better and live longer.
Continued and expanded utilization of America’s vast coal endowment is overwhelmingly in the public interest, the epitome of energy security.
Coal conversion to electricity, liquid fuels, substitute natural gas and chemicals will enable the United States and the world to meet the ever-rising tide of energy demand.
Clean coal technologies, including: (a) higher efficiency generation and (b) carbon capture, utilization, and storage (CCUS) are the pathways to sustainable energy, economic growth and climate change policy goals.
Affordable and reliable electricity from coal enables the expansion of electro-technologies, which are the basis of modern society.
Update Coal Supply U.S. Coal Exports U.S. Coal Generation Energy Policy Technology Coal Conversion
Coal Supply
Coal Supply Production Discipline Cost-cutting Periodic short-term idling 4-day work week
Optimizing Assets Divestitures & Acquisitions Horizontal Integration
CORE Safety Initiative Pushback on Permitting Controlling CAPEX Prioritizing projects
Flex Contracts New Markets Exports
Coal Rising: World’s Major Source of Energy
Bio 10%
Nuclear 6%
Coal 27%
Oil 32%
Natural Gas 22%
12,730 MTOE/Day
Hydro 2% Other
1%
Nuclear 5%
Coal 30%
Oil 27%
Natural Gas 23%
Hydro 2%
Other 3%
Bio 9%
18,676 MTOE/Day
2010 2035
IEA Current Policies Scenario, 2012 11
U.S. Coal Exports
2004 2005 2006 2007 2008 2009 2010 2011 2012
Total 48 49.9 49.6 59.2 81.5 59.1 81.7 107.3 126
2004 2005 2006 2007 2008 2009 2010 2011 2012
Met 26.8 28.7 27.6 32.3 42.6 37.3 56.2 69.5 70
Steam 20.5 20.8 21.7 26.4 38.5 22.5 25 37.2 55
Record: 126 mst in 2012
In Million Short Tons Source: National Mining Association
Estimated: 118 mst in 2013
Source: CIA World Fact Book, United Nations Development Program’s Human Development Report.
United Nations Links Affordable Energy to Quality of Life
U.S. Coal Export Opportunities
13
United StatesFinlandSweden
Canada
Qatar
South Africa
Brazil
ChinaIndonesia
India
Bangladesh
Ethiopia
Japan
Russia
Nigeria
DR Congo
GermanyUK
Argentina
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
U.N
. Hum
an D
evel
opm
ent I
ndex
Electricity Use Per Capita (kWh/year)
Every 10-Fold Increase in Per Capita Electricity Use Drives a
10-Year Increase in Longevity
U.S. Coal Trade
PRB
West Bit
ILB
Source: Wood Mackenzie Coal Market Service
CAPP NAPP SAPP
U.S. Coal Exports Coal demand from
emerging & developing nations
Addition of export capacity at U.S. East, Gulf & West Coasts
Northwest Passage?
Supportive rail rates Government
acknowledgement of coal’s contribution to U.S. trade balance & President’s National Export Initiative
Domestic Coal Generation
-120 -90 -60 -30 0 30 60 90 120 150 180
2012 2013 2014 2015 0
10 20 30 40 50 60 70 80 90
100
U.S. Coal Consumption million short tons (MMst)
Electric power (right axis) Retail and general industry (right axis) Coke plants (right axis) Total consumption (left axis) Consumption forecast (left axis)
annual change (MMst)
Source: Short-Term Energy Outlook, January 2014.
Forecast
0 25 50 75
100 125 150 175 200 225 250
Jan 2006 Jan 2008 Jan 2010 Jan 2012 Jan 2014
U.S. Electric Power Coal Stocks million short tons
Source: Short-Term Energy Outlook, January 2014.
Note: Colored band around stock levels represents the range between the minimum and maximum from Jan. 2006 - Dec. 2013.
18.8% 20.1% 21.6% 21.4% 23.3% 23.9% 24.7% 30.4% 27.4% 26.7%
49.6% 49.0% 48.5% 48.2% 44.4% 44.8% 42.3% 37.4% 40.0% 40.3%
Forecast
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
U.S. Electricity Generation by Fuel, All Sectors thousand megawatthours per day
Coal Natural gas Petroleum Nuclear Hydropower Renewables Other sources
Source: Short-Term Energy Outlook, September 2013
Note: Labels show percentage share of total generation provided by coal and natural gas.
Future U.S. Coal Generation
Factors Driving Generation Decisions
$
-120 -90 -60 -30 0 30 60 90 120 150 180
2012 2013 2014 2015 0
10 20 30 40 50 60 70 80 90
100
U.S. Coal Consumption million short tons (MMst)
Electric power (right axis) Retail and general industry (right axis) Coke plants (right axis) Total consumption (left axis) Consumption forecast (left axis)
annual change (MMst)
Source: Short-Term Energy Outlook, January 2014.
“Access to electricity is strongly correlated with every measurable indicator of human development”
- Berkeley Science Review, 2008
1
Ecowatts: Using more affordable kilowatts for economic growth and a cleaner
environment by avoiding fossil fuel combustion at the point of
use
Electro-technologies: The means to drive
the application of Ecowatts to create benefits
for society, including enhanced energy efficiency
Economic Growth Quality of Life Workplace
Improvement Environmental
Progress
2 3
Affordable Electricity is Good… More is Better
Beneficial Electrification: Improving the quality of life
through Electricity
Coal Generation Demand Energy Efficiency
1% increase in plant efficiency ↓ CO2 by 2%
Preserve Existing Coal Plant Investments Retain newer, efficient
plants with post-combustion CCS potential
Generation Diversity Maintain coal optionality Hedge against increasing
consumer $$$
Supportive Rail Rates
Energy Policy National Commitment to Coal Federal Investment in
Clean Coal Technology RD&D $$$ Focus on driving down $$$
of new technology
Policy Certainty ? An Oxymoron Litigation Paralysis Financial Paralysis Sue & Settle Process
Price on Carbon
Retrofit Programs Increase Efficiency, Decrease Emissions
Prior to commercial CCUS, existing plants can reduce CO2 emissions through the retrofit of the efficiency increasing technologies
Technologies are widely available and range from combustion improvements to enhanced heat transfer
AEP estimate: upgrades would yield reductions of more than 3.5 MMT of CO2 per year in its generation fleet
Millions of tons of CO2 reductions per year can be realized even with single-digit improvements
Additional oil is accessible in the residual oil zone (ROZ). The U.S.
ROZ may contain over 100 billion
barrels
U.S. Oil is There - We Need More CO2
Source: U.S. Department of Energy, 2011
20 years
The Goal: Near-Zero Emissions
Efficiency improvements at Existing Plants
Building New Supercritical and Ultra-Supercritical Plants
Demonstrating and Deploying IGCC and Carbon Capture, Utilization and Storage
Advancing Carbon Capture, Utilization and Storage and Btu Conversion
Retrofitting Existing Coal-Based Generation with Carbon Capture/Storage Up to 90% Lower CO2
CO2-Enhanced Oil Recovery, Producing 4 Million b/d
Technology is the Path to Achieve U.S. Environmental Goals
Technology Federal & Private Sector
Investment in Clean Coal Technology
Regulatory Framework Support for Technology Innovation
Creative Funding
Demonstration Projects Pursue EOR & Industrial
Applications to Accelerate CCS/CCUS
Stick to a Plan
Clean Coal Technologies Work
-100%
-50%
0%
50%
100%
150%
1970 1975 1980 1985 1990 1995 2000 2005 2011
% C
hang
e Si
nce
1970
+ 103%
- 89% - 93%
Sources: USDA 2011, EIA 2012, NETL 2011
+ 170%
28
Clean Coal Technologies for Energy Efficiency & Sustainability Goals
Carbon is a Product, Not a Problem: Used for EOR, Construction, Food Electricity
Industrial Gas
Pipeline SNG
Ethanol
Diesel
Jet Fuel
Hydrogen CO2 Capture and Sequestration
Conversion/ Gasification
Coal
Coal Conversion The Value of Coal Versatility
Chemicals and Fertilizers
In Association With
CTχ (Coal toχ) : The Value of Coal Conversion February 26th, 2014 χ Washington, DC
LUNCHEON KEYNOTE Dr. Holly Krutka, Executive Editor
Cornerstone Magazine World Coal Association
& Shenhua Group
Samuel S. Tam U.S. Department of Energy
Dr. Robert Freerks
Emerging Fuels Technology Mark J. Riedy
Kilpatrick Townsend & Stockton
West Virginia University
Catholic University of America The Ohio State University
University of Kentucky University of Wyoming
DKRW Energy LLC
LP Amina Adams Fork Energy Project Texas Clean Energy Project Synthesis Energy Systems
Clean Coal Refining Corporation
0
500
1,000
1,500
2,000
2,500
Coal to Hydrogen
Coal to Chemicals
Metallurgical Coal
Coal to Gas Coal to Liquids
Coal-Based Electricity
Total Coal Consumption
Mill
ion
Tons
Per
Yea
r Coal as the Sustainable Pathway to American Energy Sufficiency Clean Coal Technologies Will Unlock the Full Value of Coal
70 100
125
340
475
1,300 2,410
32
Coal Conversion “Stay the Course” support
for development of domestic transportation fuels from alternative sources
Creative financing; engage financial community in new projects
Janet Gellici 202-223-1191 ~ [email protected]
www.nationalcoalcouncil.org