Bailey RichardsStaff Reporter
August 21, 2012
With so much uncertainty in the Kentucky coal industry lately, mines and miners received some good news last week in the form of a large international coal sale that could mark the beginning of more overseas sales.
Analysts have said for many years that with the United States moving toward exploring alternative energy sources, that much of the coal being mined in the United States, and especially Kentucky, will eventually make its way overseas. Currently, only around five percent of the coal mined in Kentucky is being exported, but that number has been expected to grow.
While this growth took a while to begin, a new deal with an Indian energy company could mark the start of more coal exports. Abhijeet Group has made a $7 billion deal for 9 million tons of coal each year for 25 years. They will be getting coal from Kentucky and West Virginia during this time.
Bill Bissett with the Kentucky Coal Association said that while KCA was not involved in this deal or any other coal sales, it is something he is glad to see and expects to happen more often. Bissett said that with so many people in the world and as more nations industrialize, the need for affordable energy will also increase.
It is not yet clear how the breakdown of this deal will go as far as using one company or multiple, or what regions of the states will be most affected.
“I am not sure what the percentage is between West Virginia and Kentucky Coal,” said Bissett.
However, having a long term consistent deal will help to sustain coal production for those involved for quite some time in a slowing American coal market.
“As we have more people living longer, building more things, they are going to need more electricity,” said Bissett.
While many of these developing nations are looking for ways to quickly get online with developed nations, they are going to be using coal, however, coal is not the only energy that they are looking at.
“I will admit that China and these sorts of developing countries are doing all sorts of energy development, but the primary driver is coal,” said Bissett.
This means that coal-fired energy is the fastest way to get electricity to these countries. Bissett said that the United States is a great example of how coal can be used to quickly and effectively get people on the grid.
“To me, the case study is the United States itself,” said Bissett. “At the turn of the century we had coal camps in Eastern Kentucky that had electricity before urban areas did.
The fear remains that eventually these emerging countries may also move away from the use of coal.
In the meantime, more deals are being worked out between Eastern Kentucky coal mines and emerging countries to meet energy needs. This is something that has been done in western coal fields for several years.
“It is happening with other coal markets,” Bissett noted. “When you look at the western U.S. production — Wyoming [and] Colorado — a lot of that goes over to China.”