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CME Group / NYMEX Central Appalachian Coal (CAPP) Futures Contract
CR Coking Coal Price Index
Coal News and Markets, Energy Information Administration (DOE)
Energy Information Administration, Short-Term Energy Outlook
NASDAQ OMX Global Coal Index
Coal is a fossil fuel formed from the remains of flora (peat) that existed millions of years ago and then were buried over the years by ever increasing soil and rock strata, resulting in thousands of pounds of pressure that converted the remains to the form of mineral. While there are several types of coal, overal it is primarily a mixture of carbon and hydrogen atoms, with very small amounts of sulphur (bound with carbon or iron) and other elements.
Thermal coal is used for heat generation, which is used primaily in steam-driven turbine electricity generation.
Metallurgical coal (coke) is used in steelmaking.
Lignite is sometimes referred to as brown coal while the other types are referred to as black coal.
| Coal Producing / Consuming Nations |
Many nations have coal deposits. The United States has the largest coal reserves of any nation. However, China is actually the world's largest annual producer of coal. Other large reserve nations include Russia, China, Australia, India, Ukraine, Kazakhstan, and South Africa. Other large annual producer nations include the United States, India, Australia, Indonesia (although it is not even in the top ten of reserves), Russia, South Africa, Germany, Poland, and Kazakhstan (one of the largest open pit operations in the world located at Ekibastuz, Kazakhstan).
The BP Statistical Review of World Energy June 2010, indicates that total combined world coal reserves were 826 billion metric tons . BP Statistical Review of World Energy, June 2010, p. 32
Australia
Australia has become on of the largest producers of coal (both coke and fuel) to Asia. The primary coal producing areas within Australia include the Bowen Basin (Queensland), Hunter Valley region (Sydney Basin and Gunnedah Basin, New South Wales, near the towns of Singleton, Muswellbrook), and the Gunnedah Basin (directly north of the Hunter Valley, and the Latrobe Valley (Victoria). In 2008-09, the value (free on board in Australian dollars) of Australia's coal (thermal and metallurgical) exports was $52.1 billion (Source: Australian Government, Department of Resources, Energy and Tourism). In 2008, approximately 70% of Australia’s metallurgical coal exports and approximately 94% of thermal coal exports was exported to the Asian region.
Australia’s coal (thermal and metallurgical) export destinations in 2008 were: Japan (47% export market share), Korea (15%), European Union (10%), Taiwan (10%) and India (10%). The major coal mining companies include BHP Billiton, Anglo American (UK), Rio Tinto (Australia-UK), and Xstrata (Switzerland).
In New South Wales, the Australian Rail and Track Corporation is a Commonwealth Government owned corporation, which leases and operates the Hunter Valley coal rail system.
Google Map Location of the Hunter Valley / Sydney Basin
Google Map Location of the Gunnedah Basin
Canada
Coal deposits are primarily located in the western Provinces of British Columbia, Alberta and Saskatchewan, and there are some minor deposits and mining on Nova Scotia and New Brunswick. Canadian total proved coal reserves are estimated at 8.7 billion tons. Of that amount, 6.6 billion tons are termed as recoverable using existing technology under current and expected local economic conditions. Almost all of its thermal coal produced in Canada is consumed domestically for coal-fired electricity generation. Canada also imports coal, primarily for electricity generation, as well as for metallurgical applications. However, it is forecasted that Canadian coal consumption may eventually decline in Canada as a result of environmental policies.
Teck Resources Limited owns a 80.1% interest in Fording Canadian Coal Trust, which in turn owns a 60% interest in several metallurgical coal (coking coal) companies, which are combined one of the largest exporters of coal in the world. The group of companies includes Elk Valley Coal, which is indirectly owned, and directly managed, by Teck. Another large coal mining company is Sherritt International. Canadian rail carriers Canadian National and Canadian Pacific provide transport service to the coal extraction industry.
Germany
Germany is also another important coal producer with mining regions located primarily in the Ibbenbüren, the Ruhr, and the Saar coalfields of the state of North Rhine-Westphalia (western region of Germany). The U.S. Department of Energy, Energy Information Administration (EIA), estimates that Germany's recoverable reserves amount to 7.4 billion tons, and also estimates Germany produced 222.7 million short tons (all types of coal) in 2006. Coal production is dependent upon subsidies from the Federal government and production has been declining as the subsidies have been reduced or withdrawn.
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India
The major coal basins in India are located primarily in the eastern part of the nation within the federal states of Andhra Pradesh (northeast), Bihar (southeast), Chhattisgarh (north and south), Jharkhand, Orissa (central), and West Bengal. There are also basins within the center of the nation in the federal states of Madhya Pradesh (south), Maharashtra (east). There are also lignite deposits in the south of the nation in the federal state of Tamil Nadu, and in the northwest of the nation in the federal state of Rajasthan and further north in the federal state of Jammu and Kashmir.
Mozambique
There have been reports in the news media that there is a potential coal field depost of approximately 1 to 4 billion metric tons, referred to as the Lower Zambezi Coal Basin, in the Moatize / Cabora Bassa region of northwest Tete province. Riversdale Mining of Australia (Riversdale Mozambique Limitada) indicates that the company is developing the Benga Coal Project, which is a joint venture between Riversdale Mining Limited (65%) and Tata Steel Limited (35%), to develop 181.3 million metric tons termed as proved coal reserves and 92.0 million metric tons termed as probable coal reserves at Benga. Beng is scheduled to commence operations in 2011 at which time it would produce and ship 6 million tons of premium hard coking coal per year and 4 million tons of export-quality thermal coal per year by rail link between the Benga Project mine and the port of Beira.
Vale’s Moatize project is also under development.
The nation does not have such a large demand for coal for producing electricity as the Cahora Bassa hydroelectric plant located at Songo on the Zambezi River is the most powerful in Africa.
Google Map Location of the Tete / Moatize / Cabora Bassa Region
Peoples Republic of China
The Peoples Republic of China is the largest coal producer in the world with most of the productive coal mines being located in the province of Shanxi. The U.S. Department of Energy, Energy Information Administration (EIA), estimates that China's recoverable reserves amount to 126.2 billion tons and also estimates that China produced 2,620 million short tons (all types of coal) in 2006. Approximately 50% of coal consumed in china is used in the non-electricity sectors, primarily in the industrial sector for the production of coke, and notably for the production of steel and pig iron (China was the world’s leading producer of both steel and pig iron in 2007, accounting for 36% of global raw steel output and 50% of world pig iron production). Coal will remain the leading source of energy for China’s industrial sector for the immediate future. However, coal consumption is expcted to increase in response to growing electricity demand, which will be satisfied by coal burning electricity generating plants.
Shanxi Province coal fields include Datong Coalfield, Huoxi Coalfield, Xishan Coalfield (Qingjiao Mining Area; Xishan Nining Area). In Xinjiang Province is the Zhudong Coalfield. Within the Inner Mongolia Autonomous Region there are Chenqi Coalfield and Zhalainur Coalfield.
The China Shenhua Energy Company is the largest coal producer and export coal producer in China (the company also owns its own integrated coal transportation network, which consists of dedicated rail lines and port facilities).
Google Map Location of the Datong / Shanxi Province Region
Poland
Coal mines are located primarily within three basins: Upper Silesian, Lower Silesian, and Lublin Basins. The U.S. Geological Survey indicates that bituminous coal production in Poland declined by about 4.5% in 2008 compared with that of 2007, and brown coal and lignite production increased by about 4%. Lignite production was used almost entirely at thermal powerplants, which produced about 30% of domestic electricity production and accounted for about 12% of total primary energy consumption.
Some of the industry has been privatized but in 2008 the Polish Government owned Poland’s four major lignite mines through the PGE Polish Energy Group Plc (the Belchatow and the Turow Mines) and two independent mining companies (the Konin and the Turek Mines) (Source: U.S. Geological Survey). The largest company is Kompania Weglowa, and other companies include Katowicki Holding Co (KHW), Jastrzebska Coal Co (JSW), Bogdanka Mine Co., Budryk Mine Co.
Google Map Location of the Silesia Region
Russia
Russia possesses the second largest proved reserves of coal in the world. Most of Russia’s proven coal reserves are located in the coal basins to the east of the Ural Mountains (Russian Far East / Siberia). The 3 basin located west of the Ural Mountains are: Donetskii Basin (located along the border between Russia and Ukraine), Moscow Basin (located west southwest of Moscow), and the Pechora Basin (located in northeast Russia). The major producing basins located east of the Ural Mountains include: Irkutsk Basin, Kansk-Achinsk Basin, Kuznetski Basin (Kemerovo Region), Lenski (Lena) Basin, South Yakutsk Basin, Tunguski Basin
Since the 1990s, with the liquidation of the national coal monopoly under Rosugol, the Russian coal industry has slowly, but gradually, been restructured and privatized. Some of the largest coal mining companies include SUEK (Siberian Coal Energy Company), Kuzbassrazresugol, Evraz Group (Raspadskaya; Yuzhkuzbassugol), Mechel. Southern (Yuzhnyi) Kuzbass Coal is 94%-owned by Mechel.
Google Map Location of the Kuznetski Basin / Kemerovo Region
United States
U.S. Department of Energy, Energy Information Administration (EIA) - U.S. Coal Supply, Disposition, and Prices
U.S. Department of Energy, Energy Information Administration (EIA) - Major U.S. Coal Mines
U.S. Department of Energy, Energy Information Administration (EIA) - Coal Mining Productivity by State and Mine Type
U.S. Department of Energy, Energy Information Administration (EIA) - U.S. Coal Consumption by End Use Sector, by Census Division and State
The U.S. Department of Energy, Energy Information Administration (EIA), indicates that the state with the largest recoverable coal reserve is Wyoming (7,010 million short tons in 2008), which produced approximately 467 million short tons from only 20 mines in 2008. The next largest producer is the State of West Virgina, which produced 158 million short tons in 2008 (1,908 million short tons recoverable reserves in 2008). The next largest producer is the State of Kentucky, which has the largest amount of coal mines, approximately 469 mines, and produced 120.3 million short tons of coal in 2008 (1,167 million short tons recoverable reserve in 2008). The next largest producer was the State of Pennsylvania with approximately 266 coal mines, which produced 65.4 million short tons in 2008 (526 million short tons recoverable reserves in 2008).
Most of the coal recovered in the U.S. is utilized for electricity generation (supplying approximately 50% of the power needs of electricity producers) with a secondary demand for steel making. The U.S. is also a net exporter of coal to other nations. The nation's largest producer is Peabody Energy Corp., followed by Arch Coal, Inc., the nation's second largest producer. How much coal is in the United States? The U.S. consumes approximately 1.1 billion tons per year and the U.S. Department of Energy, Energy Information Administration (EIA) estimates that the nation's recoverable reserves are 270.7 billion tons. USGS geological and engineering studies indicate that continental U.S. coal deposits are actually in excess of one trillion tons but the location, deposit quality and existing technology prohibits excavation at a reasonable expense.
| Mining |
Coal production is from surface stripping and underground mining operations. Strip mining is also sometimes referred to as mountain top mining.
Private-sector / Government-owned Coal Companies
| Transportation |
Aprroximately 60% of the coal mined in the United States is transported to end users by railroad. The second largest volume mode of transportation is by river barge through the United States inland waterway system.
In Australia, the Port of Newcastle is world's largest coal export port. There is also an extensive rail system that ships coal to the port from the Hunter Valley mining region (which has 30 operating mines, including mines operated by Coal & Allied Industries, BHP Billiton and Xstrata). The rail system is operated by the Hunter Valley Coal Chain Logistics Team (HVCCLT), which consists of the Pacific National and QRNational as the train operators, Australian Rail Track Corporation, Rail Infrastructure Corporation and Railcorp as the track owners, Port Waratah Coal Services as the operator of the cargo assembly and ship loading terminal, and Newcastle Port Corporation who manage all vessel movements. HVCCLT estimates that "approximately 1,000 vessels are loaded each year" and "approximately 70% of the export coal goes to Japanese power stations, with Taiwan, Korea and Europe also receiving Newcastle coal."
Additional coal ports in Australia, in Queensland, include Hay Point (one of the largest bulk coal export ports in the world), Abbot Point, Lucinda, Mourilyan, Cape Flattery, Weipa, Karumba, and Skardon River.
The major coal importing ports in northwest Europe are Antwerp, Rotterdam and Amsterdam, also referred to as the ARA region (the actual ports include: Amsterdam, Antwerp, Delfzyl, Den Helder, Dordrecht, Eemshaven, Europort, Flushing, Ghent, Hook or Holland, Ijmuiden, Moerdyk, Ostend, Rotterdam, Sluiskill, Terneuzen, and Zeebrugge).
The major coal importing ports in Northwest Germany (North Sea) are Blexen, Bremen, Bremerhaven, Emden, Hamburg, Kiel Canal, Lubeck, Nordenham, Rostock and Wilhelmshaven.
| Coal Commodity Pricing |
Central Appalachian barge-delivered coal: For the NYMEX futures market, coal contracts specify delivery by seller to the buyer at barge terminals on two limited sections of river located in Central Appalachia, near the confluence of the Big Sandy and the Ohio Rivers. The sections are a 12-mile stretch of the Ohio River and the adjoining Big Sandy River (where coal barge terminals are within the lowermost 9 miles). The actual origins of the coal are not defined, but the coal must meet a set of specifications as to heat, ash, moisture, sulfur, volatile matter, hardness/grindability, and sizing and must be delivered in 1,550 ton trading units.
CME Group / NYMEX Central Appalachian Coal (CAPP) Futures Contract
Coal spot price is sometimes referred to as the mine mouth price, or the mine gate price, wich is the coal that is sold on site of the mine.
The Free-On-Rail (FOR) price is the price for coal which is already loaded onto railroad cars for transport.
| Coal Bed Methane (CBM) / Coal Seam Gas (CSG) |
Coal bed gas or coal seam gas (CSG) is simply natural gas (methane) extracted from certain sub-surface coal seams. the gas is extracted by boring a well into sub-surface permeable coal deposits. The problem with the extraction operation is that a substantial amount of water is also extracted as part of the process of recovering CSG (water keeps the gas adsorbed as a thin film on the surface of the coal; process is call adsorption), and the water brought to the surface becomes contaminated as a result of the process (and must either be reinjected or disposed of properly). Coalbed methane, however, contains very little heavier hydrocarbons such as propane or butane, and no natural gas condensate.
In the United States, coal bed methane operations are located at the Black Warrior Basin (AL), Cahaba Basin (AL), Cherokee Basin (KS), Slater Dome Basin (WY & CO), Powder River Basin (WY & MT), Raton Basin (CO & NM), and the San Juan Basin (CO & NM).
In the Bowen Basin in the State of Queensland, Australia (one of the largest coal deposits in Australia), Origin Energy operates coal seam gas extraction facilities at Spring Gully Field (located north of the town of Roma and west of the towns of Taroom and Theodore in central Queensland; Fairview Field is also located just north of Spring Gully. The Peat Field is located near the township of Wandoan in central Queensland. The Walloon Coal Field is located near the south east Queensland towns of Miles and Chinchilla.
Google Map Location of the Bowen Basin
Origin Energy also operated CSG operations at Moomba Field and Ballera Field in the Cooper Basin, which is located in the northeast corner of South Australia along the border with Queensland.
Google Map Location of the Cooper Basin
| Coal Gasification |
By applying steam and oxygen under pressure to coal feedstock, coal can be "gasified" or separated into hydrogen, carbon monoxide and several other gases. This creates a fuel (syngas) that can be burned like natural gas and reduces emmission of mercury, sulfur, nitrogen and particulates (no-gaseous material). However, it is expensive to construct goal gasification plants and it requires substantial amounts of energy to complete the process.
| Environmental Issues |
There are a number of environmental issues related with utilizing coal in energy plants.
Air Emissions
When coal is burned by utility plants for energy generation, carbon dioxide, sulfur dioxide, nitrogen oxides, and mercury compounds are released. For that reason, coal-fired boilers are required to install selective catalytic reduction (SCR) control devices to reduce the amount of emissions that are released. The U.S. Environmental Protection Agency (EPA) indicates that the average emission rates in the United States from coal-fired generation are: 2,249 lbs/MWh of carbon dioxide, 13 lbs/MWh of sulfur dioxide, and 6 lbs/MWh of nitrogen oxides.
Coal Ash
Coal ash is the fine particulate residue byproduct left over after the coal has been combusted. When the ash is burned in a chamber and stack equipped with selective catalytic reduction (SCR) control devices, toxins such as mercury, arsenic and lead can become concentrated in the ash. The ash is usually piled (referred to as impoundment) in the property of the electricity generating plant where it is purposefully mixed with water and becomes a large mudlike, slurry pool that leaches the toxins into the ground.
In December 2008, there was the largest spill of coal ash in the United States at the T.V.A.-owned Kingston Fossil power plant in east Tennessee (Roanoke County), which covered approximately 300 acres of rural land and waterways (tributaries of the Tennessee River).
Water Resource Use
Large quantities of water are frequently needed to remove impurities from coal at the mine. In addition, coal-fired power plants use large quantities of water for producing steam and for cooling. When coal-fired power plants remove water from a lake or river, fish and other aquatic life can be affected, as well as animals and people who depend on these aquatic resources.
Strip Mining
Surface mining disturbs larger areas than underground mining. Open pits require the removal of a very large amount of surface soil and rock and the storage of these materials during the moning process. Access roads need to be cleared, and train track laid down, often through open areas in order to operate the mine and ship the coal to markets. Land reclamation after surface areas have been strip mined requires a substantial investment and ongoing monitoring program to make the area environmentally viable again.
Mine Employees
In addition to the environmental damage that the mining creates and the air pollution that the usage creates, there is also the toll on the miners themselves. Many miners have contracted black lung disease, which is the result of breathing in coal dust year after year during the underground extraction process.
FutureGen
FutureGen is the plan by a public-private partnership to construct a coal-fired electricity generating power plant with the capability to capture
carbon dioxide emissions and then store it underground. In January 2008, the U.S Department of Energy publicly indicated
that it would no longer be involved in the project. The DOE had indicated that the program’s budget had increased to
$1.8 billion (the electricity generating capacity was scheduled to be only 275 MW), approximately double the original estimate for the project thus it could no longer support it (the DOE
had originally committed to funding 74% of the project's development costs in 2003). The DOE's
partners in the project, the FutureGen Alliance, Inc., which is a consortium of coal companies and electric utilities,
publicly indicated that it disagreed with the DOE's position. The Alliance believes that costs have increased due to
inflation related to the market increase for the cost of materials (steel, concrete and power plant components) due to the
volume of costruction in the world thus the DOE's commitment is still the same proportion adjusted for inflation. Alliance members include American Electric Power, Anglo American, BHP Billiton, the
China Huaneng Group, CONSOL Energy Inc., E.ON U.S., Foundation Coal, Luminant, PPL Corporation, Rio Tinto Energy America,
Peabody Energy, Southern Company, and Xstrata Coal.
www.futuregenalliance.org/
FutureGen utilizes a technology referred to as CCS (Carbon Capture and Storage) to produce hydrogen gas to power the electricity generating turbines and then pumps the carbon dioxide underground, under pressure (referred to a carbon dioxide sequestering) into saline aquifiers thus the prototype plant would produce "zero" emissions. The key to the success of such a program would be the ability to perform the gasification of coal and the sequestering of the carbon impurities on a large enough scale to make a difference.
| Carbon Trading / Carbon Offset & Renewable Energy Credits |
Please see the separate Carbon Trading Page.
| Coal Information Resources |
American Coal Ash Association (ACAA) www.acaa-usa.org/
American Coal Council www.clean-coal.info/
American Coal Foundation www.teachcoal.org/
Australian Coal Association www.australiancoal.com.au/
Australia, Queensland Government, Department of Mines and Energy www.dme.qld.gov.au/
Australia, Government of Western Australia, Dept. of Industry and Resources, Minerals and Petroleum www.doir.wa.gov.au/mineralsandpetroleum/index.asp
Canada's Clean Coal Technology Roadmap www.nrcan.gc.ca/es/etb/cetc/combustion/cctrm/
Canadian Clean Power Coalition www.canadiancleanpowercoalition.com/Customer/ccpc/ccpcwebsite.nsf
Carbon Sequestration Leadership Forum (CSLF) www.cslforum.org/
Center for Energy and Economic Development (CEED) www.ceednet.org/
Centre for Low Emission Technology www.clet.net/
Coal Association of Canada www.coal.ca/
Coal-To-Liquids Coalition www.futurecoalfuels.org/
Coal Utilization Research Council (CURC) www.coal.org/
Confederation of UK Coal Producers www.coalpro.co.uk/
EURACOAL (European Association for Coal and Lignite) euracoal.be/
European Commission Clean Coal Technology Programme (Euro Clean Coal) www.euro-cleancoal.net/
Gasification Technologies Council (GTC) www.gasification.org/
globalCOAL www.globalcoal.com/
Hunter Valley Coal Chain Logistics Team (HVCCLT) www.hvcclt.com.au/
IEA Clean Coal Centre www.iea-coal.org.uk/
Illinois Clean Coal Institute (ICCI) www.icci.org/
Kentucky Coal Association www.kentuckycoal.org/
Lignite Energy Council www.lignite.com/
MIT, Carbon Capture and Sequestration Technologies Program sequestration.mit.edu/
National Coal council www.nationalcoalcouncil.org/
National Coal Transportation Association (NCTA) www.nationalcoaltransportation.org/
National Energy Technology Laboratory, U.S. Dept. of Energy www.netl.doe.gov/
National Mining Association (NMA) www.nma.org/
National Research Center for Coal & Energy www.nrcce.wvu.edu/
North Carolina Coal Institute (NCCI) www.nccoal.org/
Ohio Coal Association www.ohiocoal.com/
Ports Corporation of Queensland, Australia www.pcq.com.au/
United Mine Workers of America (UMWA) www.umwa.org/
U.S. Deptartment of Energy, Energy Information Administration, Coal www.eia.doe.gov/fuelcoal.html
U.S. Deptartment of Energy, Office of Fossil Energy www.fe.doe.gov/
U.S. Department of Labor, Mine Safety and Health Administration www.msha.gov/
U.S. Department of the Interior, Office of Surface Mining Reclamation and Enforcement (OSM) www.osmre.gov/
U.S. Geological Survey www.usgs.gov/
West Virginia Coal Association www.wvcoal.com/
World Coal Institute (WCI) www.worldcoal.org/
