Tag: Metallurgical Coal

Contura Energy Will Accelerate Exit From Thermal Coal, Citing Global Transition From Fossil Fuels

 

A major Ohio Valley coal producer announced last week it will speed up its exit from producing coal used to generate electricity. In a call with shareholders last week, Contura Energy, Inc., said the move is tied to the ongoing global transition away from fossil fuels. 

“We recognize that the world is transitioning toward an economy that relies less on fossil fuels for power generation, and we therefore have accelerated our strategic exit from thermal coal mining,” said CEO David Stetson. 

The largest market for coal has traditionally been “thermal” coal, or that used in power stations. A smaller but lucrative market exists for “metallurgical” coal, which is used in making steel.  Executives said Contura plans to focus its operations solely on producing metallurgical and expects to be out of the thermal coal business by the end of 2022. 

The Tennessee-based company operates both thermal and metallurgical mines in West Virginia, Virginia and Pennsylvania. Contura in 2018 purchased Alpha Natural Resources. The companies previously split during bankruptcy in 2015. 

The 2018 merger turned Contura into the largest metallurgical coal producer in the U.S. Its portfolio also includes mines owned by Massey Energy, which in 2011 was acquired by Alpha Natural Resources following the April 2010 explosion of the Upper Big Branch Mine that killed 29 miners. 

Contura last year exited its thermal coal operations in Wyoming’s Powder River Basin. Earlier this year the company announced it is actively seeking a buyer for its Cumberland mine, which produces thermal coal, in Greene County, Pennsylvania. Operations will cease by the end of 2022 if a buyer isn’t found. 

The company also said the COVID-19 pandemic continues to hurt coal prices. In April, Contura idled its operations for several weeks to cut costs. 

Contura reported a $238 million net loss in its second quarter. Executives said the company will idle its Kielty mine, which produces both thermal and met coal, and the Delbarton prep plant in southern West Virginia in the next six weeks.

Three new metallurgical coal operations are in the works, at the Road Fork No. 52 Mine, Lynn Branch and Black Eagle Mine. 

“Even in spite of the disruptions caused by the COVID-19 pandemic, development at our new metallurgical mines remains on schedule,” said COO Jason Whitehead.

 

In 2018, federal data show Contura was the 10th largest coal producer nationwide.

Morrisey Asks EPA for Help With Air Program Permitting to Boost Coal, Steel Jobs

West Virginia Attorney General Patrick Morrisey filed a petition April 18 with the Environmental Protection Agency asking the agency for a new rule that would reduce the permitting burden for American steel producers.

The proposal asks EPA to modify the New Source Review, a program under the Clean Air Act that requires factories, industrial boilers and power plants to install emissions-control technologies or reduce air pollution when new plants are built or current ones modified.

Morrisey, who is also a Republican candidate for a U.S. Senate seat, said this request would protect West Virginia coal miners, who produce millions of tons of metallurgical coal each year used by more than a dozen steel blast furnaces in the U.S. He argues that under the current program, every-day repairs can become cost prohibitive and may lead to the plant’s closure when the New Source Review program is triggered.

“Federal regulations must be clear, concise and take into account economic impact,” Morrisey said. “Economic success cannot thrive with the inconsistent, case-by-case application of rules and, in this case, West Virginia needs legal certainty to protect coal jobs and the livelihoods of those who depend upon coal’s success.”

The petition asks EPA to define three terms that are central to the permitting program in ways that would reduce the burden plant operators face. The terms include “routine,” “maintenance” and “repair.” The definition of those terms have been subject to a decades-long legal debate.

Morrisey argues that in the past, EPA has required steel mill blast furnaces to apply for new, possibly more stringent emissions permits or install new, expensive emissions-reducing technologies when operators replace the clay refractory bricks that line the massive furnace chamber. The process is also known as relining.

Under his request, EPA could define actions like relining blast furnaces as “maintenance,” and therefore, not subject to the EPA program. Similarly, his request notes “routine” should be defined in a way that is industry-specific. For example, if a blast furnace only has to replace its bricks every 20 years, that should be considered normal maintenance in the lifespan of the unit.

“Such a rule would advance President Trump’s goal of revitalizing domestic steel and protect demand for West Virginia’s high-grade, metallurgical coal,” Morrisey’s news release stated.

Environmentalists Cry Foul

Environmental groups said Morrissey’s request is illegal. John Walke, director of the climate and clean air program with the Natural Resources Defense Council, said previous court decisions and past EPA enforcement actions do not fall in line with the request.

For example, under the George W. Bush administration, EPA crafted a rule changing the definition of “routine maintenance.” In 2006, the U.S. Court of Appeals for the District of Columbia Circuit said industry could not write off changes that cost below a certain amount as routine maintenance and invalidated the rule.

“If EPA embraced West Virginia’s demands for a rollback, it would eviscerate this clean air program and boost emissions by hundreds, if not thousands, of tons per year,” Walke said.

He said although this request is couched as an attempt to help steel producers, if EPA enacted Morrisey’s rule, all industrial facilities in the U.S. would be covered, including power plants, oil refineries, chemical plants and hazardous waste incinerators.

Walke said if EPA moves forward with this request, the agency can expect environmental and health advocacy groups to sue.

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