ENDI 08

Coal DA Index
Coal DA Index.......................................................................................................................................................................................1 Coal DA—1NC Shell.............................................................................................................................................................................2 Coal DA—1NC Shell.............................................................................................................................................................................3 Coal DA—Uniqueness—Coal Industry Strong Now............................................................................................................................4 Coal DA—Uniqueness—Coal Industry Strong Now............................................................................................................................5 Coal DA—2NC Must Read—Clean Coal Coming/Coal Key to US Econ............................................................................................6 Coal DA—Uniqueness—Clean Coal Coming NOw.............................................................................................................................7 Coal DA—Uniqueness—Clean Coal Coming Now..............................................................................................................................8 Coal DA—Uniqueness—Clean Coal Coming Now..............................................................................................................................9 Coal DA—Links—Electricity Generation...........................................................................................................................................10 Coal DA—Links—Electricity Generation...........................................................................................................................................11 Coal DA—Links—Environmental Regulations/Electricity Generation..............................................................................................12 Coal DA—Links—Domestic Demand................................................................................................................................................13 Coal DA—Links—Emissions Reductions...........................................................................................................................................14 Coal DA—Links—Emissions Reductions...........................................................................................................................................15 Coal DA—Links—Emissions Reductions...........................................................................................................................................16 Coal DA—Links—Emissions Reductions...........................................................................................................................................17 Coal DA—Links—Tradable Permits...................................................................................................................................................18 Coal DA—Impacts—2NC Energy Independence Module..................................................................................................................19 Coal DA—Impacts—US Economy Extensions...................................................................................................................................20 Coal DA—Impacts—US Economy/Energy Independence.................................................................................................................21 Coal DA—Impacts—Energy Independence Extensions.....................................................................................................................22 Coal DA—A2 Exports Key to Coal Industry......................................................................................................................................23 Coal DA—A2 Coal Bad Turns/Emissions...........................................................................................................................................24 Coal DA Answers—A2 Clean Coal.....................................................................................................................................................25 Coal DA Answers—No Internal Link 2AC Module............................................................................................................................26 Coal DA Answers—Exports Key to Coal Industry.............................................................................................................................27 Coal DA Answers—Coal Industry Will Shift Sales to Metallurgical .................................................................................................28

1

ENDI 08

Coal DA—1NC Shell
A. The coal industry is the hottest part of the energy sector—it possesses price advantages over other sources AND domestic consumption is strong US News & World Report 6/5/08 ("Skip Alternative Energy—Dig for Coal Stocks,"
http://www.usnews.com/articles/business/your-money/2008/06/05/skip-alternative-energy--dig-for-coal-stocks.html)
Hess Corp. is a U.S. name that is working alongside Petrobras in Brazil on this major new oil find. Hess will likely be able to double their proven reserves of oil from a small $36 million investment they made seven years ago. That said, we think the most exciting part of the U.S. energy sector today is

our nation's coal companies. According to the Energy Information Administration, the U.S. has the largest reserves of coal in the world, with a 27 percent share. Compared to other fossil fuels, coal is by far the cheapest fossil fuel in the world today.
Also, the dynamics are changing in the coal industry. Three situations have developed: First, China, which was once a big exporter of coal, has become an importer to feed its growing demand for electricity. Second, there have been major disruptions to the operations of the traditional coal exporters, with flooding in Australia and power outages in South Africa. Third, U.S. coal is more attractively priced than coal from other regions of the world. These dynamics have made for dramatic increases in the exports of U.S. coal, although traditionally, our coal was used primarily for domestic consumption. This export demand shows no signs of letting up in the future, as both India and China each plan to build more than 1,000 new coal-fired electricity plants over the next five years.

B. Insert specific link C. Strong US coal industry is key to the overall US economy NewsUSA 07 ("Coal Helps America Through Power and Jobs," http://about.newsusa.com/article-site.asp?ArticleId=2831)
You may not realize it, but the coal industry plays a large part in the U.S. economy. One major way coal affects the economy is through electricity. The majority of America's electricity comes from coal. So when coal prices are low, like they are right now, electricity is cheaper and the lower prices spur economic growth. Electricity is a crucial part of American life. In fact, it is a $200 billion a year commodity, making it the largest commodity in the United States. When the prices for large commodities, like electricity, stay low or go down, inflation stays low. So, commodity price fluctuations prove to be strong economic indicators.

The lower electric rates from low coal prices can affect inflation rates now and in the future. And low interest rates can help protect the savings and investments of millions of Americans.
In addition, new technology is linked to electricity usage and thus the economy. The increasing purchase and use of technological advances, like computers, cell phones and personal data organizers, greatly increases consumption of electricity from coal. Therefore, when consumers purchase these items, they drive the economy in two ways: with their purchase and with their electricity usage. America's need for electricity from coal can also be seen in the almost direct relationship between electricity use and economic activity. For example, every 1 percent increase in the gross domestic product has caused about a 1 percent increase in electricity demand. In addition to electricity, coal affects the economy through job creation, revenue and taxes. The coal industry and related business

have created more than 90,000 jobs in the United States alone and almost 1 million jobs worldwide. Thirty-seven billion dollars, or nearly 1 percent of all the earnings of Americans, comes from coal-related work. The value of coal produced in the United States each year is nearly $18 billion. Coal mining has a combined direct and indirect impact of $161 billion annually on the U.S. economy. This is $596 for every U.S. citizen. California and New York are two of the states benefiting most from coal, yet they are not home to any coal mining. In fact, every U.S. state benefits economically from coal. Coal businesses pay more than $11 billion in federal taxes each year. Nine billion dollars in coal revenues go to state and local governments annually.

2

ENDI 08

Coal DA—1NC Shell
D. US economic collapse goes global Mead 04 (Walter Russell, Kissinger senior fellow in U.S. foreign policy at the Council on Foreign Relations, “America’s Sticky
Power,” Foreign Policy, March/April, p. ebscohost)
Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States-government and private bonds, direct and portfolio private investments-more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan

would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes a strength, not a weakness, and other countries fear to break with the United States because they need its
market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance.

E. Economic collapse causes terrorism, environmental collapse, and wars that risk extinction
Douglas Torgerson, Professor and Chair of the Department of Political Studies – Trent University, Ontario, The Promise of Green Politics: Environmentalism and the Public Sphere, 1999, p. 145-6
By adopting an uncompromising posture, green radicalism serves to high-light the danger that green reforms might well be absorbed and rendered ineffective by the established order. Against reforims, green radicals emphasize the need to thoroughly transform prevailing institutions and ways of viewing the human/nature relationship. In the absence of coherent and plausible programs for radical transformation, however, desperate scenarios of crisis and catastrophe become inviting: “The very best thing for the planet,” one radical green has thus declared, “might be a massive worldwide economic depression”: “Amid the terrible hardships this would create for countless people, at least the machinery would stop for a while, and the Earth could take a breather.”5 Needless to say, this repugnant hope ignores the obvious range of potential consequences arising from such a scenario. Social insecurity and human

misery could intensify human conflicts and promote neglect of environmental concerns as people desperately sought to protect themselves, there could also be increased terrorism, even warfare of a type and scale that would prove enormously destructive to life on earth.

3

ENDI 08

Coal DA—Uniqueness—Coal Industry Strong Now
The US coal industry is strong now—tight global markets and greater export opportunities for coal producers Business Wire 6/4/08 ("Fitch: Muted Supply Response to Strong International Coal Demand for U.S. Coal Industry,"
http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080604005891&newsLang=en) NEW YORK--(BUSINESS WIRE)--U.S. coal producers are benefiting from tight global markets for both steam and metallurgical coal which is diverting imports from the United States and providing export opportunities for domestic producers, according to a Fitch Ratings report. The supply response to improving price conditions should be measured, given high operating and materials costs. Fitch expects only modest growth in U.S. coal production following a 1% contraction in 2007.

The US coal industry is booming thanks to rising demand Reuters 5/23/08 ("U.S. miners prosper as world demand for coal booms," http://uk.reuters.com/articlePrint?
articleId=UKN2321816620080523)
BROOKWOOD, Alabama (Reuters) - Two thousand feet under the west Alabama woods, dust flies as a machine chews into the Blue Creek coal seam, mining black gold for a booming world market that is lifting the once-laggard U.S. coal industry.

Economic growth in Asia has outrun world coal supply, pushing buyers to the United States -- a market traditionally viewed as too expensive -- for backup. Bad weather and producer problems around the world have fed the frenzy.
The new prosperity shows at Jim Walter Resources Mine No. 4. Walter has paid bonuses, bought new equipment and hired more workers. It is expanding a nearby mine. Parent company Walter Industries Inc (WLT.N: Quote, Profile, Research), which posted record first-quarter earnings, is shedding its home-building roots to focus on coal. "The company's a little bit freer with money," said John Storm, a supervisor who arrives at the working face of the seam by descending 2,000 feet in an elevator and then riding a tram through 5 miles of deep tunnels. George Richmond, chief executive of Jim Walter Resources, said improved profitability "does allow us to share some of the rewards." Walter produces mostly metallurgical (or "met") coal for steel-making and is neither the biggest nor smallest coal company. But it is representative of the industry turnaround. The Tampa, Florida, company recently sold met coal for $315 a tonne, triple the price of a year ago. Prices for the other major coal type, thermal coal used to make steam at power plants, also have nearly tripled to $110 a short ton ($121 a tonne).

Coal's upturn, which began in 2004 for the met side and 2007 for the steam side, has ended two decades of decline, said Pearce Hammond, who heads coal and alternative energy analysis at the investment bank, Simmons & Co. Since the beginning of the year, the Dow Jones coal index .DJUSCL is up 39 percent. Shares of Walter Industries, meanwhile, have skyrocketed more than 140 percent. "Companies are announcing expansions, opening new mines, and we're not seeing many close," said Phil Smith, spokesman for the
United Mine Workers of America, which represents about a quarter of U.S. coal miners. The count of U.S. coal mines fell to a historic low of 1,312 in 2003 but has now crept back to about 1,450, according to the National Mining Association. The number of miners employed is up 12,000 since 2003, when there were about 71,000, to more than 83,000 as of last year, according to NMA data. SCRAMBLING After years of cutbacks, mining companies are scrambling to rebuild the work force. "For years, there was never anybody added to the work force. Now, everybody's 50-something," said Keith Shalvey, manager of Mine No. 4. Some companies are offering incentives to keep veterans and hire rookies for a job that is already high-paying. The work remains dangerous, although it is much safer than in the past. Thirty-three people died in coal mines last year, U.S. Mine Safety and Health Administration data show. Union scale for a trainee is $21.27 an hour plus benefits, UMWA's Smith said. With overtime, some miners earn $90,000 or more a year.

The explosive growth of world demand and the increase in prices have had an effect on U.S. production. Year-to-date U.S. coal output rose to 447.7 million tons through May 17, compared with 433.3 million tons through May 17 last year, a 3.4 percent increase, according to the U.S. Energy Information Administration.

4

ENDI 08

Coal DA—Uniqueness—Coal Industry Strong Now
US coal industry strong now—rising stock prices, booming international demand, pricing Ray 6/6/08 (Russell, Tampa Tribune, "Coal's rise helps Tampa businesses,"
http://www.heraldtribune.com/article/20080606/NEWS/806060484/-1/newssitemap) The price of coal, a major ingredient in the production of electricity and steel, has doubled since January, pushing the stock prices and earnings of U.S. coal producers to new highs. The reason: Steel makers in developing countries have increased production to record levels and disruptions in global coal production have created a coal market that is undersupplied. In just five months, spot prices for U.S. coal have surged from about $55 a ton to more than $100. The booming international coal market means demand for U.S. coal may reach a record 1.22 billion tons this year.
Two Tampa companies, Walter Industries Inc. and TECO Energy Corp., are benefiting from the historical surge in coal prices. Both are major producers of metallurgical coal, which is used in steel production and is in high demand in countries such as India and China. "The demand from India and China has affected the global supply of this product," said Victor Patrick, vice chairman and chief financial officer of Walter Industries. As the price soars for metallurgical coal -- a higher-quality, hotter-burning coal -- other types that can be used to make steel are being sold in the higher-priced metallurgical coal market. As a result, prices for all types of coal have skyrocketed. "Any coal anywhere that can be used as a met coal is being pulled into the met coal market," Patrick said. "The growth of the steel industry in China and Brazil has been enormous." This week, coal industry analyst David Khani raised his 2009 price forecast for metallurgical coal to $250 a ton from $130 a ton. Although producers are ramping up production of metallurgical coal, supplies will remain tight through next year amid stronger-than-expected demand for steel, said the Friedman, Billings, Ramsey Group analyst. This year, supply contracts at Walter Industries range from $135 a ton to more than $315 a ton, for an average of $209 a ton. That is up from an average of $101 a ton last year. Although coal prices are expected to drop as producers replenish supplies, industry experts say the cost of coal will remain strong, citing rapid

industrial growth in China, India and Brazil.

5

ENDI 08

Coal DA—2NC Must Read—Clean Coal Coming/Coal Key to US Econ
The federal government is investing in clean coal technology now and IGCC tech is currently in place in parts of the country—coal remains vital to US energy security and economic growth Legge 6/7/08 (Jessica, Columnist, Times West Virginian, "New technology being put to the test,"
http://www.timeswv.com/business/local_story_159215815.html) FAIRMONT — The National Energy Technology Laboratory, which the U.S. Department of Energy owns and operates, has focused on making coal a cleaner source of energy for decades. NETL’s mission is “to improve both the efficiency of using coal in terms of getting as much energy and work out of a unit of coal as possible, as well as improving its environmental performance,” said Tom Feeley, technology manager for existing plants at the Pittsburgh
office. NETL conducts its primary research at laboratories in Pittsburgh, Morgantown and Albany, Ore. NETL has approximately 1,100 staff members in total, which includes federal and nonfederal support. The majority of the research is contracted through universities and the private sector, Feeley said. “We cover the gamut as it relates to coal-based power, from fundamental bench-scale research all the way to large-scale commercial demonstration of power,” he said.

Feeley said some of NETL’s major technology areas include carbon dioxide capture and sequestration, coal gasification, liquid fuels from coal, and fuel cell technology. The country has hundreds of years of mineable coal reserves, which is important for energy security, Feeley said.
“If you look at how much electricity is generated in the U.S. from coal, you can see the importance in conducting research to allow the country to use coal as part of its energy (source),” he said. Coal is being challenged by a number of environmental issues, such as mercury, climate change and carbon dioxide emissions. With the big role that coal plays in the nation and world, Feeley said it’s critical that technology be developed so coal continues to be part of the energy mix. “We are a coal state,” Jeff Herholdt, director of the West Virginia Division of Energy, said. The division, headquartered in Charleston, is part of the state Department of Commerce. Herholdt said the commerce of West Virginia has a vital interest in coal remaining a leading source of energy for the country. Right now, 52 percent of the electricity generated in the United States comes from coal,

he said. “It’s important that we retain that role,” Herholdt said. Coal is a leading economic engine in the state and is the nation’s energy provider. This resource has a positive impact on the economy, and it’s important for the country’s factories to have access to electricity from coal, Herholdt said. “We’re a manufacturing nation and ... we need to be competitive,” he said. “We need to make sure that our products remain in the world’s marketplace. Affordable energy is important in helping us to accomplish that.” The Mountaineer Power Plant in Mason County is an Integrated Gasification Combined Cycle power plant, which Herholdt called “the new generation or the next generation of electric power plants fueled with coal.” In this clean coal technology, the coal is gasified
and the pollutants are trapped in the gas stream, making it easier to separate them out. Herholdt said one area that the U.S. Department of Energy is focusing on is carbon sequestration. This process involves taking carbon dioxide from the water stream, liquifying it, and putting it underground to either stimulate oil or natural gas production or permanently seal it off. Through funding from the Department of Energy, West Virginia participates in the Midwest Regional Carbon Sequestration Partnership and the Southeast Regional Carbon Sequestration Partnership, which demonstrate the safe storage of carbon dioxide in underground reservoirs. Work is being done with the West Virginia Geological and Economic Survey to look at opportunities for sequestration in the state, Herholdt said. To comply with the Clean Air Act, the utilities in the state are investing billions of dollars in West Virginia to install new technology at coal-fired power plants, he said. Also, one of Gov. Joe Manchin’s pushes has been coal liquid. Herholdt said the key to these power plants is “to make them with no more environmental impact than conventional fuels.” West Virginia University’s National Research Center for Coal and Energy, located on the Evansdale campus in Morgantown, was founded in 1979. In the 1980s, the university center joined a consortium to examine coal liquids and processing coal with waste rubber, waste plastics and biomass. This is a very hot topic because of transportation, said Trina Wafle, deputy director of the NRCCE. “These coal liquids tend to be cleaner burning than petroleum-based fuels,” she said. “They would be substituted primarily for diesel.” The NRCCE is also looking at other technologies, such as capturing carbon dioxide and the sequestration of it, Wafle said. The faculty researchers at WVU have been looking at storing carbon dioxide in unmineable coal seams and lessening the emissions. The NRCCE is doing a joint project with Consol to test this out. The Zero Emission Research and Technology Center (ZERT), which is a consortium of schools doing research, is leading the particular program. NRCCE researchers are also growing switch grass on old surface mine to create energy. Wafle said that switch grass is a more efficient source of biomass for ethanol than corn. She said that coal liquids are near-term technology, while other technologies will not be put into play anytime soon. “If we’re going to look toward the impact of energy on our climate, we need to make more use of the resource we have right here in the U.S.A. than relying on foreign sources,” Wafle said. She said China is another country with a lot of coal. Any technology that the United States can develop and export helps address worldwide concerns about how clean and environmentally friendly coal is. “It’s kind of a backbone of our economy,” Wafle said. “It’s not a perfect fuel, and anything we can do (to improve it will help).”

6

ENDI 08

Coal DA—Uniqueness—Clean Coal Coming NOw
Clean coal/IGCC is currently a practical option for power producers Jacob 6/15/08 (Jennifer, staff writer @ Meridian Star, "Touring a coal mine,"
http://www.meridianstar.com/local/local_story_167011235.html) The term "clean coal", which may sound rather oxymoronic, actually has nothing to do with the coal itself. The lignite that Mississippi Power plans to use at its clean coal plant is just like any other lignite. It's the way they use the lignite to generate electricity that defies convention. The proposed plant is still a coal-based plant and still creates pollution, but the amount of emissions created will, according to Mississippi Power, be significantly less than those of a conventional coal-fired power plant.
The way a conventional plant works is pretty simple. Coal is burned to heat water, which creates steam, which turns the turbines of a power generator.

With "clean coal", or Integrated Gasification Combined Cycle (IGCC), technology, coal is used to generate power in a completely different and infinitely more complicated way.
Mississippi Power's IGCC project coordinator Tommy Pinkerton attempted to put that complicated process into simplified terms, saying that the IGCC process works basically like this: Coal is put into a contraption called a gasifier, where it is heated in a low-oxygen atmosphere, converting it into a synthetic gas, or syngas, which is composed mostly of carbon monoxide and hydrogen. The syngas is then used to fire the turbine, working in a way similar to natural gas. This process

also allows Mississippi Power to take undesirable materials like sulfur out of the fuel before burning it. The process also creates carbon dioxide that can be captured and stored, and which can be used to drive residual oil from spent oil wells. Clean coal isn't an environmentalist's dream, but it's much less the environmentalist's nightmare than a conventional pulverized coal plant. IGCC technology doesn't really make coal clean, but it does make it cleaner. According to an article published by the Sierra Club earlier this year, the benefits of IGCC over conventional pulverized coal plants are numerous. IGCC "produces extremely low emissions of sulfur
dioxide, nitrogen oxides, mercury, and particulates," the article read, "In contrast to the pulverized-coal technologies, the IGCC method uses less water, generates less solid waste, and can concentrate carbon dioxide emissions, making CO2 easier to capture and store." For power companies, IGCC is a more practical option than building a nuclear power plant, for which is it much harder to gain permits, and which is more expensive and carries a stigma at least as bad as that of coal.

Major US utilities are working on clean coal projects using IGCC technology Your Industry News 6/4/08 ("GEand Schlumberger sign 'clean coal' alliance,"
http://www.yourindustrynews.com/news_item.php?newsID=7082) GE Energy's proven IGCC gasification process cleans heavy fuels and converts them into a high-value fuel that drives gas turbines in efficient combined-cycle systems.
GE Energy has been at the forefront of IGCC technology since supplying a gas turbine for Cool Water, the first IGCC demonstration project, which came on line in 1984. GE's IGCC technology also has operated at the TECO Polk I station in Florida for more than 10 years.

The company currently offers commercial scale IGCC plant designs that offer emissions better than advanced natural gas combined cycle performance for SOx, NOx and Particulate Matter. IGCC technology also meets Clean Air Mercury Rules (CAMR) for mercury emissions today and uses less water than a traditional pulverized coal plant. Several utilities in the eastern U.S., including Duke Energy, AEP and Tenaska, are currently working on proposed IGCC projects using GE's technology.

7

ENDI 08

Coal DA—Uniqueness—Clean Coal Coming Now
The race to bring clean-coal technologies to the market is gathering pace—more than half of all coal use will employ such technologies by 2030 Clark 10/11/04 (Martin, Petroleum Economist, lexis)
The race to bring clean-coal technologies (CCTs) to the market is gathering pace. CCT describes a new generation of energy processes that
sharply reduce air emissions and other pollutants compared with older coal-burning systems. With coal likely to remain one of the world's most popular fuels, at least for now, CCTs will play a key role in improving its overall economic performance and environmental acceptability.

A number of successful technologies are already in operation, including pollution controls for new and existing power plants, advanced combustion technologies and coal-gasification based systems. Viable long-term options A new World Energy Council study into the role of coal in global sustainable energy development suggests that synthetic gases, liquids and hydrogen produced from coal will emerge as viable long-term energy supply options for major coal-consuming states in the next few decades. Zbigniew Bicki, who headed the study, says coal will become more environmentally acceptable by 2030 because around 72% of coal-based power generation is likely to use cost-effective CCTs, given the right market conditions.

Clean-coal technology has been in use for years and will continue to improve and spread in the future —other countries are eyeing its success in the US CBS Marketwatch 5/17/04 (lexis)
Two plants that demonstrate current coal gasification technology have been up and running for eight years -- one near Terre Haute, Ind., and another in central Florida. Another mine-mouth plant, owned by the Basin Electric Power Cooperative in North Dakota, produces synthetic natural gas by burning coal. The gas is then piped to customers, including ones that use the gas to produce electricity. The plant converts about 13,000 tons of soft lignite coal
to about 160 million cubic feet of natural gas daily. The company won't disclose its price level of production, but due to the recent run-up in natural gas prices, "the plant is profitable now," says Floyd Robb, plant spokesman. In the future, companies hope to do more with gasified coal. Research is under way that would allow carbon dioxide, a greenhouse gas, to be separated and buried underground. That process would also separate pure hydrogen, which could also be used in fuel cells that could power automobiles and perhaps even manufacturing equipment. Under a roadmap for a zero-emission coal plant plan introduced last year called FutureGen, the technology would be demonstrated by 2012 -although some within Energy Department say the process could be demonstrated even sooner. Under the FutureGen roadmap, the cost of gasifying coal and separating and capturing CO2 would add only 10 percent to the cost of coal-fired electricity. The Energy Department's Card says the government and companies are preparing to enter into the contracting phase for FutureGen

projects. He says the project is being watched closely by governments in India, China, Russia, Japan, South Africa, Canada and other countries that have expressed also are interested in adopting zero-emission coal gasification projects, once the roots of it are established in the U.S.

8

ENDI 08

Coal DA—Uniqueness—Clean Coal Coming Now
US power plants are currently adopting clean-coal technology—effectively reduces harmful emissions and improves operational efficiency Korostash 04 (Yekaterina, J.D. Candidate, University of North Carolina School of Law, Spring, 5 N.C. J.L. & Tech. 295, lexis)
Fourth, the new rule is inconsistent with the technology-pushing objectives of the Clean Air Act. Congress intended for the CAA to provide an incentive for improvement and adoption of pollution control technology. 192 Clean coal technologies have the potential to remove almost all of the harmful emissions. 193 In [*325] general, clean coal technologies decrease pollution through improved operating efficiencies and lowered costs of air emission controls. For example, integrated gasification cycle 194 removes ninety-nine percent of sulphur and reduces the other emissions below standard, while improving operational efficiency from thirty-three to forty percent. There are already two plants in America that have adopted this technology. 195 The costs, however, remain high.

Major utilities are looking to clean coal in order to satisfy future electricity needs Cincinnati Enquirer 12/19/04 (lexis)
A confluence of rising environmental pressure, the availability and abundance of coal and the rising cost of alternative fuels such as natural gas is pushing both utilities to embrace technology to produce electricity not by burning it but by turning it into a synthetic gas to run generators.
But there is much at stake for customers. Based on projections that conventional fuels such as natural gas will continue to rise in price in the coming years, Cinergy said it believes coal-gas fired generating would be more favorable to rate-payers in the long term.

The discussion over such power plants is giving coal a better reputation among environmentalists and raising its status as not just a past source of power but one for the future as well.
"Hands down, it's a much cleaner technology than conventional coal plants," said Kurt Waltzer of the Ohio Environmental Council in Columbus. James Childress, executive director of the Gasification Technologies Council, an Arlington, Va.-based trade group, said Cinergy and AEP are

leading the

charge for coal gasification in the United States.
"They understand to use coal in the U.S. in the long term, you've got to gasify it," he said. "I

don't think there's a major utility in the U.S. that's

not looking at it seriously today."

9

ENDI 08

Coal DA—Links—Electricity Generation
Electricity-sector consumption is the backbone of the US coal industry Investor's Business Daily 11/1/04 (lexis)
The heart of the business for coal producers is supplying electric utilities and independent power companies, which account for about 90% of domestic coal consumption. Growth in domestic power demand, which is driven by strength in the industrial economy, fuels the need for coal.
A number of factors have led to increased merger activity and industry concentration. Among them are severe cyclical swings, the capital-intensive nature of the industry, substantial retiree costs and the challenge of continuing to amass reserves and obtain permits for new production. "Since the profitability of a coal company is tied to production levels and coal prices, earnings variability can swing from a large profit to a loss depending on prevailing market conditions," wrote Smith Barney analyst David LaBonte. As in many commodity businesses, firms can ramp up only so far during the good times. Otherwise, they risk a swift turn in fortunes if supplies start to exceed demand. The bulk of sales to power customers are done through long-term contracts of more than a year, which limits exposure to short-term price moves. While coal producers reduce production in the face of weak demand, they typically wait until they can secure long-term contracts before raising output, LaBonte says. Still, in some ways the coal industry isn't a typical commodity market. "Coal is not as fungible as, say, natural gas and oil," said Jim Thompson, editor of the Coal & Energy newsletter. "The design of specific power plants will determine what kind of coal they can burn." Transportation challenges also can contribute to wide variations in pricing from one region to another, he notes. "What we've seen this year is that Eastern coal prices have exploded, while (the West's) Powder River prices are up marginally," he said. ** Name of the Game: produce coal efficiently and take advantage of strong pricing conditions, while guarding against industry downturns. 2. Market Coal provides 51% of the fuel used to generate electricity in the U.S., up from 50% in 2002. The closest competitors are nuclear at 20% and natural gas, which supplies 17%. While the other fuels are cleaner burning, coal has the advantage of being readily available and less expensive.

Like coal, natural gas has taken off in price recently. That's helping keep coal relatively cheap.
With coal prices where they are, natural gas prices would have to be $4 to $5 per million British thermal units to be competitive. But they've recently been trading in the $8 to $9 range, Thompson says. "As long as natural gas is at those high levels, that doesn't put a ceiling on coal prices," he said.

With nuclear energy plants operating close to maximum capacity and no new plants on the drawing board, coal will have to carry much of the increasing load.

Electricity generation is the foundation of the US coal industry—over 90% of mined coal is burned for electricity Roberts and Hunt 9/1/04 (Andy and Gary, vice president, Coal Advisory Services + vice president-Consulting and Advisory
Services at Henwood, a Global Energy Decisions company, Public Utilities Fortnightly)
Economic conditions and weather are key price factors. Nearly 90 percent of the coal mined in the United States is burned by U.S. electric generators. (Small amounts of coal are used in steel-making, industrial plants, and in the residential and commercial sectors. Small amounts of coal are also exported to steel-making and steam-generating customers. See Figure 1.) Coal markets are dearly dependent upon the electric generation industry, which makes them dependent on the level of electric sales. As the U.S. economy improves, coal burn usually increases; the

converse also is true.

US coal consumption in the electricity sector is set to remain strong—it will continue to be the primary fuel for electricity generation Caruso 3/16/05 (Guy, Administrator, Energy Information Administration U.S. Department of Energy, FDCH)
Total coal consumption is projected to increase from 1,095 million short tons in 2003 to 1,508 million short tons in 2025, growing by 1.5 percent per year. About 90 percent of the coal is currently used for electricity generation. Coal remains the primary fuel for generation and its share of generation is expected to remain about 50 percent between 2003 and 2025. Total coal consumption for electricity generation is projected to increase by an average of 1.6 percent per year, from 1,004 million short tons in 2003 to 1,425 million short tons in 2025.

10

ENDI 08

Coal DA—Links—Electricity Generation
90% of all coal is used for electricity production Britton 04 (Jodi, Winter, 12 Penn St. Envtl. L. Rev. 241)
Coal is the most abundant fuel source for electricity in America. 22 Ninety percent of all coal is used for electricity. 23 In 2000, coal [*246] accounted for fifty-two percent of fuel used for electricity. 24 Unlike other fuel sources, the price of coal has actually decreased since it peaked in 1982. 25 The projected price of coal is expected to remain low and coal is likely to remain the dominant fuel in the United States' future. 26 Unfortunately, regardless of its low cost and abundance, coal emits large amounts of greenhouse gases into the atmosphere. 27

Domestic electrical generation is the primary market for the US coal industry—more that 75% of US coal production is sold to electric utilities US Industrial Outlook 93 (January, lexis)
The principal domestic market for U.S. coal is the electric utility industry. Coal generates over half of U.S. electric power, and more than three-quarters of U.S. coal production is sold to electric utilities. An additional 11 percent is exported. Metallurgical coal used
in the U.S. steel industry accounts for about 3 percent of production. The balance is used in industries other than steel, and in the residential, commercial, and transportation sectors (Table 3).

11

ENDI 08

Coal DA—Links—Environmental Regulations/Electricity Generation
Environmental requirements are the single biggest threat to the coal industry—sales nearly entirely depend on domestic consumption in power generation NYT 2/17/02 (lexis)
Still, many critics say coal-fired power plants generate enormous environmental problems, including air pollution and acid rain. "A lot of folks make the argument that the full cost of coal, in terms of the environment and health, is not being accounted for," said William Spratley, executive director of Green Energy Ohio, a nonprofit group based in Columbus, Ohio, that encourages greater use of renewable energy sources. "Where the coal industry is vulnerable is on

new environmental requirements." THE United States produces about 1.1 billion tons of coal a year from 1,400 mines, mostly in Appalachia and in the Powder River Basin of Wyoming. About 92 percent of production is used for power generation. The remainder is metallurgical, or coking, coal used in making steel.

12

ENDI 08

Coal DA—Links—Domestic Demand
Domestic demand drives high prices and greater levels of investment which are key to the coal industry and coal-rich state economies Gross 9/10/04 (Daniel, Slate Magazine, lexis)
From wind farms to hydrogen-powered cars, alternative power sources are all the rage. But one of the greatest potential alternatives to oil and gas is one of the oldest: coal. It's not renewable, it's not clean, and it's not environmentally friendly. But we've got tons of it (literally). And it's hot. Behold the mighty Central Appalachian Coal Futures, also known as the Big Sandy barge coal contract.
The name may conjure up swimming holes, tubing, and fishing. But the Sandy River, a tributary to the Ohio River that forms part of the West Virginia and Kentucky border, is an industrial waterway. It's the place where coal mined from rich Appalachian seams is delivered. (Here's a description of the area.) Traded on the New York Mercantile Exchange since July 2001, the CACF represents spot prices for coal produced in the eastern portion of the United States. Most purchases of coal are conducted through long-term contracts between utilities or steel mills on the one hand and mining companies on the other. The spot prices

reflect marginal demand, what buyers need or want beyond the amounts contracted for. And these prices have been spiking. This chart shows that Central Appalachian Coal Futures are up 59 percent this year "to $63 per ton "and that the price has doubled since July 2003.
(Here's a Microsoft Excel file showing the raw data.) Why is this obscure economic indicator rising, and what does its rise tell us?

The recent rises seem to be more about growing demand than concerns about supplies. Ironically, the rise in spot prices for U.S.produced coal has come at a time when the supply of the commodity seems to be growing. In recent years, even as production from the historic mining terrain in the eastern United States has declined, Wyoming's Powder River Basin has emerged as a significant source. (The Energy Information Administration has invaluable material on its coal home page. Here's a map of states with coal.) It's a little as if oil
prices had gone up despite a new reserve the size of another Saudi Arabia going online, said Chris Briem, a researcher at the University of Pittsburgh. This impressive chart highlights Wyoming's rise as a coal supplier.In 2003, Wyoming accounted for about 35 percent of the nation's 1.07 billion-ton coal production, more than the combined total of West Virginia, Kentucky, Pennsylvania, and Texas. The state, according to the EIA, had more than 66 billion tons of reserves in 2000. Demand for coal seems to be rising domestically. In the United States, utilities burn coal to make electricity, despite the environmental problems it can cause. Why? According to Cambridge Energy Research Associates, it costs about half as much to generate electricity with Eastern coal as it does using plants powered by natural gas. And the large integrated steel mills, many of which are benefiting from higher global and local demand for steel, use coke "essentially baked coal "to fire their massive furnaces. The thirst for coal may be greater elsewhere in the world. China has an insatiable appetite for cheap electricity and for steel. (This chart shows how world coal consumption grew modestly but steadily over the course of the 1990s.) Demand on the part of China and other developing parts of the world has helped push up the prices of commodities such as oil, natural gas, and scrap metal for all buyers; the same thing is happening with coal. But coal is one of the few areas where rising global demand for power and electricity plays to the United States' advantage. America may largely be a helpless victim of the continuing global rise in demand for crude oil, but when it comes to coal, we're more like Saudi Arabia. In 2001, the United States, according to this chart, produced more than one-quarter of the world's bituminous coal supply. And America is a swing supplier of coal to the rest of the world, which means that when demand is greater than anticipated, extra cash flows into our coffers. U.S. coal exports rose 11.6 percent in 2003. The recent performance of the coal spot futures also seems to point to rising coal prices in the future. When the spot price stays high for long periods, the contract price tends to rise, as well. And this is having the effect of bringing greater investment into an industry that had been starved of capital "especially in the eastern part of the United States. Wilbur Ross, the New York investor who has become a big player in steel and textiles, has recently started investing in bankrupt coal-mining companies in Appalachia.

Investors like Ross and the companies that are plowing resources into Wyoming believe they can make money while contributing to American energy independence. We have more Btus in coal than the Arabs have in oil, he said. Ultimately, that could turn out to be good news for the impoverished regions in coal-rich Kentucky and West Virginia.

13

ENDI 08

Coal DA—Links—Emissions Reductions
Kyoto-style emissions reductions would devastate the US coal industry Murray 5/13/03 (Robert, Ohio Valley Coal Company, FDCH,lexis)
As for coal, there would be very little production of this fuel in the United States under a Kyoto type regime. The Energy Information Administration of the U. S. Department of Energy, analyzed the affects of a Kyoto Treaty on the energy markets and determined that it would cause a sixty-seven (67%) reduction in National coal production levels by 2010, and a 90% drop by 2020. [3] In short, by 2020 there would be no coal industry in Ohio, from which eighty-seven percent (87%) of the State's electricity is generated.
Furthermore, coal fired electricity costs about one- third (1/3) that from natural gas fired generation, and is even more economical than this over nuclear generated electricity. A better way to address the climate issue is by the plan outlined by President Bush in February, 2002, which, as I have stated before, is based on science, research, technology, efficiency, and voluntary actions. Such an approach will determine whether carbon dioxide emission reductions are beneficial or necessary, or not. If carbon dioxide reductions are proven to be necessary, we will be on our way. If they are not, we will still be moving well down the road to the more efficient use of coal with new technologies. There currently are several initiatives in Washington that will directly keep coal in the energy mix. On the Congressional front, the U. S. House of Representatives has just passed H. R. 6, the Energy Policy Act of 2003. This legislation includes two important provisions that we need to get advanced clean coal technologies into existing coal fired electricity generating plants and to build new ones. H. R. 6 also includes authorization for basic coal research and for the President's $2 billion Clean Coal Power Initiative, which will demonstrate advanced clean coal technologies. The aforementioned two provisions are also included in the Senate Bill, S. 14, that is now being debated on the Senate floor. But, S. 14 includes a third important element that was left out of the House passed legislation. The Senate Bill will include very important production and investment tax credits for a limited number of plants to encourage rapid use of new advanced clean coal technologies. It is important, Mr. Chairman and Congressman Ney, that you support the inclusion of these tax provisions in the final bill that goes to the President's desk. Another important initiative that the Administration has announced is the FutureGen Program, which is a $1 billion, ten (10) year, demonstration project to create the World's first coal- based, zero emissions, electricity and hydrogen power plant. The plant will capture carbon dioxide emissions and will be coupled with carbon sequestration so that it is literally a zero emissions plant. Over the long term, coal can be the major source for hydrogen energy for our Country. Mr. Chairman, not only is the coal industry opposed to mandatory reductions of carbon dioxide emissions, we are also opposed to programs that would require mandatory reporting on emissions, as well as schemes that would lead to carbon dioxide emissions trading. The voluntary approach that the industry is supporting will be the best way to preserve Ohio and tri-State area jobs and hold down electric rates for our households and our factories that must compete in the global marketplace.

The coal industry in the United States, at this time, is being economically devastated. Practically all of the major eastern U. S. coal producers are unprofitable or are currently in bankruptcy. This is largely the result of the depressed economy, huge amount of construction of new natural gas fired electricity generating units during the Clinton/Gore years, and importation of cheap coal from South America. This is the worst possible time for some in Congress to be advocating any mandatory requirements regarding carbon dioxide emission measuring, reductions, or trading.

Mandated carbon emission reductions kills the coal industry Sustainable Energy Institute 02 ("January 29 Senate Environment and Public Works Committee,Subcommittee on Clean
Air, Wetlands and Climate Change, Hearing onThe Clean Power Act of 2001," 1/29, http://www.s-ei.org/polreports/Jan29hearing.pdf) Impact of Mandated Carbon Cuts on the Coal Industry: There was debate over whether mandated carbon reductions would cause a large-scale shift away from coal and towards natural gas, or new clean coal technologies would be deployed on a broader scale allowing compliance with such reduction requirements. Voinovich, from coal-rich Ohio, warned that the Four-Pollutant bill will kill the coal industry and cause a massive shift to natural gas. DOE's Kripowicz agreed that mandated cuts would have a tremendous impact on the amount of coal use in the United States, until such time as Integrated Gasification Combined Cycle plants (an important example of clean coal technology) begin to have economic benefits. Henoted DOE estimates that a carbon cap would cause a 43% increase in electricity costs by2010 and a 38% increase by 2020. Sandor responded that there is insufficient data on pricing and that a trading system needs to be demonstrated in order to determine the impacts. Chairman Lieberman commented that coal can be part of the solution to climate change, and that we do not need to "move beyond coal," referring to the possible use of clean coal technologies.

14

ENDI 08

Coal DA—Links—Emissions Reductions
Strict emissions limits are a death sentence for the coal industry Chicago Sun-Times 4/26/04 (lexis)
Kerry also co-sponsors environmentalist Sen. James Jeffords' Clean Power Act, which the coal industry regards as a death sentence in eliminating 90 percent of mercury emissions by 2008. The nonpartisan Energy Information Administration estimates that the Jeffords bill would reduce coal consumed for electricity by 43 percent, resulting in the loss of 1 million jobs. Last year, Kerry voted for (while Byrd was voting against) the Lieberman-McCain Climate Stewardship Act, which would move the United States toward the Kyoto global warming protocol. The Energy Information Administration estimated the bill would reduce coal's share of electricity from 50 percent down to 11 percent, eliminating 50,000 coal industry jobs.

Kyoto-like emissions limits kill the US coal industry PR Newswire 8/11/03 (lexis)
In general, environmental legislation could have a devastating impact on the coal industry and on the U.S. economy. "The cost of coal-fired generation has been so much lower than the cost of other fossil-fired electricity that it has been able to absorb layer after layer of environmental regulatory costs for decades and still maintain or increase its share of electricity generation," DuLac said. "Eventually, however, coal's ability to absorb economic penalties of usage reaches a limit. The modeling results demonstrate how the latest round of proposed regulations finally causes coal usage costs to surge well past that limit." Hill & Associates draws a very clear distinction between economic trade off issues and simple prohibition by fiat. Previous forecasts from Hill & Associates have addressed the fact that Kyoto-type "global warming" CO2 limits tend to "kill" anywhere from one-third to one-half of the U.S. coal industry. But the CO2 situation is not primarily a "cost of cleanup" issue. Since there is no realistic way to "clean up" the CO2 emissions from existing coal- fired plants today, the CO2 issue collapses to a prohibition by fiat. "It is not a case of cleanup economics; there is simply no proven way to do it today," DuLac said. "Thus, coal burn would have to be reduced to meet the limit, without any regard to economics." Certainly, arbitrary reductions of carbon dioxide emissions would be a killer for coal.

Carbon emission constraints are the greatest danger to the US coal industry Wirth et al 03 (Timothy, Boyden Gray + John Podesta, President of the United Nations Foundation and a former U.S. Senator
from Colorado, partner at Wilmer, Cutler & Pickering and served as Counsel to former President George H.W. Bush, Foreign Affairs, July/Aug, lexis) The transition to this future will be tricky. The greatest danger the coal industry faces in the United States is that as carbon emissions are gradually constrained, it will give up market share piece by piece to natural gas and lose its ability to recover.
Washington must promote policies to mitigate that outcome, such as aggressive research and development on cheaper capture and storage of carbon, subsidies for advanced coal technology for sale in domestic and overseas markets, and incentives for power plants that commit to switching to carbon-free technology by a certain date. All of these tools could lessen the harm to the industry and its workers as coal is cleaned up.

15

ENDI 08

Coal DA—Links—Emissions Reductions
Mandatory carbon emissions reductions severely damage the US coal industry—coal production would decrease by 50% Platts Coal Outlook 11/26/01 (lexis)
In testimony at the Senate Environment Committee, UMWA Government Affairs Director Bill Banig said that recent Energy Information Administration and Environmental Protection Agency studies of the bill show that the emissions reductions in it would cause utilities to switch away from coal, not install emissions controls. The studies show that would mean a 50% loss in coal production, Banig said. He pointed out that much of the coal market loss would be due to mandated 90% reductions in mercury and a reduction in plant carbon dioxide, CO2, emissions to 1990 levels. This would mean a lot of switching away from coal because technologies to control these emissions are still in their infancy, Banig said.

Mandated reductions in carbon-based fuels destroys the US coal industry Pittsburgh Post-Gazette, 11/21/97 (lexis)
While steel company executives say they can adapt to a ''flexible'' program for reducing emissions and still remain globally competitive, the coal industry is digging in for what it is portraying as a life-or-death struggle against mandated reductions in the use of carbon-based fuels. The Kyoto agreement is ''the death knell for the coal industry,'' John Grasser of the National Mining Association protested last week. ''There's no doubt that it has the potential to wipe out the U.S. coal industry.'' Insisting that there is ''no way'' that technological advances alone will be able to achieve the 7 percent reductions called for in the agreement, Grasser predicts that the administration will turn to new carbon taxes as a way to force down the use of coal and pay for its package of tax incentives to encourage alternative fuels. ''Coal is the highest-based carbon fuel, and this is going to hurt very, very severely,'' Grasser warned. ''That's why the United Mine Workers and the AFL-CIO have jumped on this. As energy prices go up, utilities will stop using coal and go to natural gas, and coal-mining jobs will go to China, India and Korea.''

16

ENDI 08

Coal DA—Links—Emissions Reductions
Carbon emission caps will completely eliminate coal consumption—destroys the US coal industry Petroleum Economist 11/13/03 (lexis)
A more ominous threat is the prospect of controls on carbon dioxide (CO2) emissions. Although the government initiative does not touch on
it, a more radical bill introduced in the Senate would not only set new caps on the pollutants addressed in Clear Skies, but would also regulate CO2. The proposal, known as the Carper bill, would require utilities to lower their CO2 emissions to 2005 levels by 2008 and to 2001 levels by 2012.

Although this regulation would affect all fossil fuels, coal would be the hardest hit. Kelly has said "Kyoto-type CO2 limits would tend to kill anywhere from one-third to one-half of the US coal industry." But the imposition of the caps outlined in the Carper bill would in essence completely eliminate coal consumption over time. "There is no realistic way to remove CO2 from the existing fleet of coal-fired plants," says Kelly. "As electricity demand creeps up, more and more units will bump against the cap and coal use will ratchet down." Kelly is the Cassandra of the coal industry. In his view, the environmental issues will ultimately sound the death knell for coal - the only question is when. He claims that whatever
proposal is adopted, its effects will be felt by the end of the decade, and cautions investors with prophetic words: "If your time horizon is less than seven to 10 years, then coal is really a good investment." He projects coal consumption is likely to grow by 200m short tons over the next seven to eight years, after which the impacts of environmental regulations will be so severe, that it will "just fall off the edge of the cliff".

Stricter emissions limits significantly reduce coal-fired electricity generation Thumb 5/8/03 (Steve, Principal Energy Ventures Incorporated, FDCH, lexis)
One of the significant impacts of the proposed increases in clean air requirements is that it will cause coal-fired generation to be reduced. A significant portion of this decline in coal-fired generation will have to be made up by additional gas-fired generation, as other forms of generation are
limited in their ability to increase significantly.[22] This higher level of gas- fired generation will increase natural gas demand requirements within the electric sector, which will further exacerbate the challenge to the U.S. gas supply sector. This increasing dependence of the electric sector on gas-fired generation is most evident in the recent experience of the industry. Since 1996 gas demand within the electric sector has increased approximately 1.7 TCF (i.e., 4.7 BCFD), or 45 percent. This is one of the major reasons for the current challenge within the U.S. gas supply sector. Of particular concern is both the acceleration of the target dates for the proposed changes in clean air requirements and the increases in the levels of emission reductions contained in some proposed initiatives. Accelerating the time line for these changes in clean air requirements will represent a significant challenge for the U.S. gas supply sector, as it is improbable that the time line for the large, complex and expensive emerging sources of gas supply that will be required to meet future demand increases can be accelerated. In fact, the more probable scenario is that there will be delays in the time lines for some of these emerging sources of supply, which has been the case for the development of the region offshore Eastern Canada. Similarly, increasing the levels of emission reductions will cause an even greater reduction in coal-fired generation and increases in both gas-fired generation and gas demand within the electric sector. This will only heighten the challenge for the gas supply sector. Of particular concern are the carbon dioxide limitations since the power industry has no viable control options and must rely totally upon switching generation to lower carbon containing fuels, of which the most significant is natural gas. Carbon dioxide limits, because they place an effective cap on fossil fuel generation, significantly increase the challenge for the U.S. gas supply sector.

17

ENDI 08

Coal DA—Links—Tradable Permits
Tradable permit schemes create significant short-term costs to the coal industry—inelasticity of coal industry Cramton and Kerr 99 (Peter and Suzi, Department of Economics @ Maryland, " The Distributional Effects of Carbon
Regulation: Why auctioned carbon permits are attractive and feasible," www.cramton.umd.edu/papers1995-1999/99eedistributional-effects-of-carbon-regulation.pdf) Three groups ultimately bear costs: consumers, workers (owners of human capital), and capital owners, especially current owners of physical capital. Consumers suffer loss of consumer surplus, workers suffer a fall in income, and capital owners suffer a fall in the value of their capital. The legal incidence of the regulation does not affect prices or cost bearing. Increased costs, due to the need to purchase a permit or pay a tax, are passed forward to consumers, and backward to factor suppliers, capital owners and workers. How the prices throughout the economy adjust depends on the elasticities of supply and demand at all levels in the economy. Prices will rise most where behavior is most inelastic. In Figure 1 we illustrate one possibility. The relatively inelastic demander faces a large price increase while the elastic supplier only suffers a small price decrease. Given a set of consumption price changes, consumers will bear costs in proportion to their expenditures on goods produced using fossil fuels. In the short run, fossil-fuel specific capital stocks such as oil-fired electric utilities, and the human capital and location of workers in industries such as coal mining, will tend to be inelastic. Thus capital owners and workers will suffer high short term costs. How these price changes translate into distributional effects depends on the distribution of ownership of physical and human capital. The effects on physical capital will be diffused across many shareholders when the companies are publicly owned. The effects on workers tend to be heavily concentrated in relatively few individuals and communities. In the long run, capital is mobile and workers will make appropriate choices of education and location. This will lower their costs as well as total costs. How long this requires depends on the rate of obsolescence of capital and how quickly individuals and communities can adjust. The outlook for some coal mining areas is not promising. After capital and labor have adjusted, consumers bear the ongoing costs of carbon regulation.

Emissions trading will signal the destruction of the US coal industry Lewis 4/4/03 (Marlo, Senior Fellow @ CEI, "Nix the Energy Bill," http://www.nationalreview.com/comment/commentlewis040403.asp) Transferable credits will limit energy diversity. Because coal is the most carbon-intensive fuel, Kyoto would decimate coal as a fuel source for electric-power generation. If adopted, transferable credits will send a political signal that coal's days are numbered. Companies
will thus switch from coal to natural gas, further aggravating the existing natural gas-supply crunch and price spikes that have already cost consumers billions of dollars.

18

ENDI 08

Coal DA—Impacts—2NC Energy Independence Module
--Coal is key to US energy independence Mann 01 (John, Professor Emeritus of Geology @ Univ. of Illinois, Chicago Sun-Times, 11/30, lexis)
Greater priority should be given to developing alternative energy sources, especially coal. The United States possesses more than 240 billion tons of recoverable coal reserves, or about one-fourth of the world's total. We have a greater share of the world's coal than Saudi Arabia does of the world's oil, and the supply could last as long as 300 years at current usage levels. Together with nuclear, solar, and wind power, the use of clean-coal technology can provide energy to reduce the dependency on oil in industry and transportation, at the same time it is improving our environment. In this regard, Bush and his energy team deserve credit for taking some important steps to re-establish the basics of a national energy strategy. Many aspects of the administration's energy plan are controversial, such as earmarking $2 billion over the next decade for clean-coal technology and speeding the renewal of operating licenses for commercial reactors and licensing a new generation of nuclear power plants. But initiatives such as these are crucial if we are to increase domestic energy production and gain energy independence.

--Energy dependence constrains US strategic flexibility Minsk 02 (Ronald, Energy Consultant + special assistant to the president on the staff of the National Economic Council at the
White House during the Clinton administration, where he managed energy, environment, and agriculture policy, “Ending Oil Dependence As We Know It,” http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=116&subsecID=155&contentID=250158) First, our nation's dependence on oil has figured prominently in U.S. policy toward the Middle East in general, and has helped embroil us in conflicts such as the Persian Gulf War. Moreover, oil dependence constrains our foreign policy by diminishing our ability to act freely in our strategic interest and in that of our allies. In today's conflict, the actions of nations that should be strong allies in the war on terrorism -Saudi Arabia in particular -- appear to be inhibited by domestic concerns about Islamic extremism, straining relations between the world's largest oil consuming nation and its largest producing nation. In addition, many of our allies are more reliant on oil than are we; today's instability in the Persian Gulf could weaken or threaten our allies, particularly in Asia.

--US strategic flexibility is key to deter large-scale aggression and prevent conflict escalation Spencer 03 (Jack, Senior Defense Policy Analyst @ Heritage, "Focusing Defense Resources to Meet National Security
Requirements," 3/21, www.heritage.org/Research/NationalSecurity/bg1638.cfm)
Be prepared to fight with little or no warning in unanticipated places. The

emergence of global communications, advances in technology, and the globalization of terrorism provide many opportunities for surprise attacks against the United States and its interests. Maintaining the ability to fight and win wars in diverse situations and environments can discourage many of America's enemies from hostile acts.
Maintain adequate capability to deter aggression against America's allies. America faces enduring threats beyond terrorism, as demonstrated by North Korea's nuclear weapons program. There are nations in every region of the world that threaten America's vital interests in the near term.

Assuring stability in those regions and protecting U.S. interests requires the ability to defeat any nation or group that threatens America's allies, which itself provides effective deterrence against large-scale aggression. This should include both conventional forces and other capabilities such as an effective ballistic missile defense and reliable nuclear forces. The Administration should take every step to strengthen its important alliances and be ready to respond forcefully and immediately to aggression against America's allies.

19

ENDI 08

Coal DA—Impacts—US Economy Extensions
Coal contributes directly and directly to the U.S. economy National Coal Council 93 ("The Role of U.S. Coal in Energy, Economy, and the Environment—Special Report," February,
http://nationalcoalcouncil.org/Documents/THE%20ROLE%20OF%20U.S.%20COAL%20IN%20ENERGY, %20ECONOMY.PDF) The potential of clean coal technology provides an enormous future opportunity for the United States. Energy efficiency can be improved and the environment protected while coal use expands to generate electricity, promote growth, and improve the nation’s balance of payments. Coal, the nation’s largest source of domestic energy, contributes both directly and indirectly to the U.S. economy. Direct Economic Contribution. The $21 billion in current value of annual coal production yields an impact of $81 billion on the economy. While many U.S. industries have declined over the past two decades, the U.S. coal industry has increased its export position. The abundant coal resources of the U.S. provide opportunities to improve the nation’s balance of trade in the 1990s, strengthen basic infrastructure, and employ advanced technologies in the U.S. and overseas. Indirect Economic Contribution. The U.S. economy and the standard of living it supports depend on coal, primarily in the form of electricity. Electric power is the largest and fastest growing end-use sector in energy. Coal is the principal fuel used to generate electricity. Availability of low-cost coal has enhanced the electrification of the U.S. economy.

Coal is key to the US economy—over one million jobs, reduced fuel costs, tax revenue, exports, infrastructure/tech development National Coal Council 93 ("The Role of U.S. Coal in Energy, Economy, and the Environment—Special Report," February,
http://nationalcoalcouncil.org/Documents/THE%20ROLE%20OF%20U.S.%20COAL%20IN%20ENERGY, %20ECONOMY.PDF) The economic well-being of the United States depends substantially on coal, primarily in the form of electricity. Coal has been the nation’s largest domestic source of energy for nearly a decade. Electric power, the largest and fastest growing end-use sector in energy, is the primary market for coal. Accounting for 56% of total generation, low-cost coal contributed to the electrification of the economy over the past twenty years. If coal had not been available to meet the growth in electric demand, consumers would have incurred over $190 billion in additional fuel costs since 1971. Coal contributes over $80 billion annually to the economy and stimulates over one million jobs. Coal also contributes to the economy in terms of tax revenue, exports, and infrastructure and technology development. Further development of coal production, combustion, and emissions technologies can ensure that coal continues to contribute to energy security, economic growth, and environmental protection.

20

ENDI 08

Coal DA—Impacts—US Economy/Energy Independence
Coal can ensure US energy independence and strengthen the US economy through high-tech developments and production jobs Star Gazette 11/2/04 (lexis)
Cheap energy, cheap labor and innovation in production are criteria for a country to grow and compete in a free-trade world economy.
United States companies excel in innovative production methods. Unfortunately, free-trade policies have driven U.S. companies and good-paying jobs overseas. It should be evident that the U.S. labor force will not be able to compete with low wages and benefits and lower safety and environmental standards in developing countries. Although the oil and gasoline crisis of 1973 was a warning signal, the U.S. government failed to provide the necessary incentives to lead us

toward greater energy independence. Price per barrel of oil has reached record high levels in 2004, due less to scarcity than to instability in the major oil-producing countries. Natural gas prices have risen because of increased demand and lack of liquid natural gas terminals in this country. Slow economic growth, a
poor job market and higher trade deficits are directly related.

Record high oil and natural gas prices gives our government another chance to establish incentives toward alternative energy such as coal gasification, clean energy that would increase our energy independence. We have 25 percent of the known reserves of coal, and such incentive policy would provide high-tech development and production jobs at home, jobs unlikely to be exported unless legislation is poorly written.

21

ENDI 08

Coal DA—Impacts—Energy Independence Extensions
Coal is key to US energy security Clark 10/11/04 (Martin, Petroleum Economist, lexis)
The US has proved coal reserves worth more than 225 years of supply based on consumption estimates - it costs less than natural gas and is far less subject to price volatility. It also improves US energy security, reducing the dependence on foreign oil. "Its
future promise includes flexible feedstocks, process options and products, its ability to open new markets for coal, its potential for replacing combined-cycle gas plants through retrofits, the competitive cost of its electricity and its potential for lowest-cost emissions removal."

Coal consumption reduces US dependence on foreign oil Lear 5/1/02 (Elizabeth, Managing Editor, Motion Systems Distributor)
Recently, proposed oil drilling in the pristine wild lands of Alaska has spurred heated debate. If President Bush wants to reduce dependence on foreign oil, we should instead focus on cleaning up coal plants. Historically, coal has been the cheapest fuel and is expected to drop in price, but it's considered a dirty fuel and the root of widespread health problems. Nonetheless, the U.S. holds almost a third of the world's coal reserves, and half of America's electricity comes from coal. The Department of Energy (DoE) goes so far as to equate coal to the U.S as oil is to Saudi Arabia, and rightfully so, as our 250-year domestic coal supply is what powers the U.S. manufacturing enterprise.

22

ENDI 08

Coal DA—A2 Exports Key to Coal Industry
US coal markets are the coal industries main source of revenue—status quo indicators for the industry look positive PR Newswire 12/16/04 (lexis)
We have seen little change in the current quarter in the U.S. coal markets, our largest source of revenues. Coal demand factors remain positive, both short and long-term. A very disciplined response to this demand on the part of domestic mining companies means that selling prices, particularly for eastern coal, continue to be very strong. Longer-term demand drivers, including power plant construction and natural gas pricing, coupled with the age of the current population of mines, may create a sustained period of strong coal prices.

Unilateral emissions reductions destroy US coal industry's export opportunities Manne 95 (Alan, Prof Emeritus of Operations Research @ Stanford, "Global Carbon Dioxide Reductions -- Domestic and
International Consequences," http://www.accf.org/publications/reports/sr-globalco2reductions95.html) In any sector where energy inputs are significant (say, 5 to 20 percent of production costs), a unilateral agreement to limit carbon emissions would have serious impacts on our international competitiveness. These sectors include basic industries such as steel, aluminum, copper, petroleum refining, and petrochemicals production. Furthermore, coal is the most carbon-intensive of our fossil fuels, and this could virtually wipe out any prospects for coal exports from the United States.

23

ENDI 08

Coal DA—A2 Coal Bad Turns/Emissions
The price of coal-fired electricity continues to decline and coal-fired emissions have substantially decreased over the past decade Bezdek and Wendling April 04 (Roger and Robert, Management Information Services, Public Utilities Fortnightly, lexis)
The nuclear power industry in the United States has established an enviable economic and safety record, and a revived nuclear power option is essential for a balanced and secure U.S. energy future. The price of coal-fired electricity has been declining for more than 20 years and is forecast by the Department of Energy's Energy Information Administration (EIA) to continue declining for at least the next 20 years. Coal-burning electric utilities also have made impressive environmental advancements: The rate of emissions per ton of coal use has decreased nearly 70 percent during the past 30 years, and this trend continues. n1 n1 For example, over the past decade, sulfur dioxide emissions have decreased 28 percent, nitrogen oxide emissions have decreased 15 percent, and particulate matter emissions have decreased 13 percent.

Status quo investment and consumption of coal bodes well for the coal industry and such efforts will help reduce emissions Englehardt 10/14/04 (Irl, CHAIRMAN & CEO, PEABODY ENERGY CORP, Fair Disclosure, lexis)
In answer to the question where are the markets taking us, we believe the markets provide a bright future, both near- and longterm, for all of the members of the coal industry. First, customers are relearning the value of reliable producers and they are willing to pay and make commitments to obtain reliability. Second, we see customers that are switching to different coals for a number of their generating units, and this activity may open new markets for certain products. Third, large investments are being made to improve the emissions from existing coal plants and to build new coal plants, and those investments ensure that America will benefit from clean, low-cost electricity for many decades. Fourth, coal gasification is receiving renewed attention, creating yet another market for America's most abundant energy resource. We see an increasing recognition that coal is the key to solving America's energy supply problems. Generators are investing billions of dollars in emission controls and new coal plants. Both President Bush and Senator Kerry have expressed strong support for funding of additional clean coal technology, and those technologies offer the promise to be even more efficient and cleaner coal plants for the future.

Coal use has tripled since 1970 but emissions levels have correspondingly declined and will continue to do so CBS Marketwatch 5/17/04 (lexis)
Industry lobbyists laud that the U.S. has more than tripled its coal use for energy generation since 1970, while decreasing the levels of sulfur particulates and other major pollutants blamed for health problems such as asthma and cancer. They say additional emissions reductions are expected in the next five to 10 years, as additional technology required under the 1990 Clean Air Act is brought into service.

24

ENDI 08

Coal DA Answers—A2 Clean Coal
Clean coal is encountering numerous obstacles—this threatens the coal industry Wald 5/30/08 (Matthew, Columnist, "Mounting Costs Slow the Push for Clean Coal," NYT,
http://www.nytimes.com/2008/05/30/business/30coal.html?_r=1&scp=1&sq=coal&st=cse&oref=slogin) President Bush is for it, and indeed has spent years talking up the virtues of “clean coal.” All three candidates to succeed him favor the
approach. So do many other members of Congress. Coal companies are for it. Many environmentalists favor it. Utility executives are practically begging for the technology.

But it has become clear in recent months that the nation’s effort to develop the technique is lagging badly. In January, the government canceled its support for what was supposed to be a showcase project, a plant at a carefully chosen site in
Illinois where there was coal, access to the power grid, and soil underfoot that backers said could hold the carbon dioxide for eons.

Perhaps worse, in the last few months, utility projects in Florida, West Virginia, Ohio, Minnesota and Washington State that would have made it easier to capture carbon dioxide have all been canceled or thrown into regulatory limbo.
Coal is abundant and cheap, assuring that it will continue to be used. But the failure to start building, testing, tweaking and perfecting carbon capture and storage means that developing the technology may come too late to make coal compatible with limiting global warming.

“It’s a total mess,” said Daniel M. Kammen, director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley. “Coal’s had a tough year,” said John Lavelle, head of a business at General Electric that makes equipment for processing coal into a form from which carbon can be captured. Many of these projects were derailed by the short-term pressure of rising construction costs. But scientists say the result, unless the situation can be turned around, will be a long-term disaster.

Coal can never be cleaned of pollution Pittsburgh Post-Gazette 10/19/04 (lexis)
Then there is Kerry's embrace, like Bush's, of so-called clean coal. Kerry, like Bush, wants to win West Virginia, so he's calling for investing $10 billion over the next decade to create cleaner coal-fueled power plants. And he rejects, as his plan puts it, "the old view that coal cannot be part of a clean energy future." In truth, it can't. No matter how much coal is scrubbed, it will always remain a major polluter.

25

ENDI 08

Coal DA Answers—No Internal Link 2AC Module
No internal link to industry collapse A) Rising international demand for metallurgical coal is a key growth area for the US coal industry Natural Gas Week 6/28/04 (lexis)
That scenario could validate why there has been a resurgence of long-term supply contracts for many of the fuels used to generate electricity. Other factors continue to advance favor for coal, including increased energy demand, advancing clean-coal technologies amid tighter emissions limits and international demand for metallurgical coal used to produce steel. In 2003, the US coal industry shifted from a net importer to an exporter of the product for the first time in six years, hitting record export levels of 43 million short tons, according to the Energy Information Administration's preliminary estimates. Demand for US metallurgical coal -- produced in the East mostly by Massey Energy and Consol Energy -- climbed with the temporary closure of a major USeastern mine and increased global demand as Chinawent from being a coal exporter to an importer.

B) Non-electrical uses amount to 25% of the US coal industry US Industrial Outlook 93 (January, lexis)
The principal domestic market for U.S. coal is the electric utility industry. Coal generates over half of U.S. electric power, and more than three-quarters of U.S. coal production is sold to electric utilities. An additional 11 percent is exported. Metallurgical coal used in the U.S. steel industry accounts for about 3 percent of production. The balance is used in industries other than steel, and in the residential, commercial, and transportation sectors (Table 3).

26

ENDI 08

Coal DA Answers—Exports Key to Coal Industry
No internal link—rising world demand for coal means greater export revenues for the industry Gross 9/10/04 (Daniel, Slate Magazine, lexis)
But coal is one of the few areas where rising global demand for power and electricity plays to the United States' advantage. America may largely be a helpless victim of the continuing global rise in demand for crude oil, but when it comes to coal, we're more like Saudi Arabia. In 2001, the United States, according to this chart, produced more than one-quarter of the world's bituminous coal supply. And America is a swing supplier of coal to the rest of the world, which means that when demand is greater than anticipated, extra cash flows into our coffers. U.S. coal exports rose 11.6 percent in 2003.

No internal link—coal exports are increasingly strong now Investor's Business Daily 11/1/04 (lexis)
After several years of falling exports, coal exports are back on the rise in 2004. In the first half of the year, exports totaled 24.94 million tons, up 25% from a year ago. The demand is fueled by surging steel production in China and India, which has put a premium on the high-quality metallurgical coal used in steel processing.

27

ENDI 08

Coal DA Answers—Coal Industry Will Shift Sales to Metallurgical
US coal companies will increase their sales of metallurgical coal to fill-in the gap—current economic trends prove U.S. Coal Review 12/13/04 (lexis)
During 2004, some 11 more percent more of Alpha Natural Resources’ coal sales have been to metallurgical customers than was the case the year before, another illustration of how the coking coal market is sucking up tons that have gone to steam coal customers in the past.
With the launch of its IPO at hand, Alpha filed with the Securities & Exchange Commission a detailed business description. The company filed December 6 for an IPO valued up to $250 million. The company did not detail either the proposed number of shares to be offered or their anticipated sale price. It’s apparent, where met coal is concerned, that Alpha and undoubtedly others have found enough traction to turn a sprint into a mile run. “During 2003, most of our contracts to supply metallurgical coal were entered into on a one-year rolling basis or on a current market or spot basis,” Alpha reported. “However, due to current market conditions, the majority of the metallurgical coal sa les contracts we have entered into during the first nine months of 2004 have been long-term contracts.” At the end of 2003, just 18 percent of Alpha’s met coal sales were made under long-term agreements, as opposed to 65 percent of the company’s steam coal sales. As of November 10, Alpha had contracts to sell 93 percent of planned 2005 production. That included sales commitments for approximately 19.8 million tons, of which 12.3 million tons are steam coal and 7.5 million tons are metallurgical coal. The company also had contracts to sell 44 percent of planned 2006 production, including sales commitments for approximately 9.9 million tons, of which 6.7 million tons are steam coal and 3.2 million tons are metallurgical coal. As of November 10, Alpha also had commitments to purchase 3.5 million tons of coal during 2005 and 1.0 million tons in 2006. For the nine months ended September 30, Alpha sold a total of 19.4 million tons of coal, including 5.4 million tons of purchased coal. Approximately 32 percent of its coal sales (or about 6.2 million tons) during the first nine months of 2004 were made outside the United States, primarily in Canada and several countries in Europe and Asia. Alpha coal revenues increased in the first nine months of 2004 by $304.0 million or 60 percent, to $808.7 million, as compared to the first nine months of 2003, primarily because of a $9.64/ton increase in the average sales price of its coal, but also as a result of additional tons sold.

“The increase in the average sales price of our coal was due to the general increase in coal prices during the period and to our ability to take advantage of the exceptionally high metallurgical coal sale prices by processing and marketing as metallurgical coal some coal qualities that would traditionally have been marketed as steam coal,” Alpha reported.

28

Sign up to vote on this title
UsefulNot useful