The Register-Herald, Beckley, West Virginia

Balancing Act

February 28, 2011

Coal industry leaders welcome natural gas, say both benefit W.Va.

BECKLEY — Though coal is still America’s top fuel for electrical generation, “King Coal” is increasingly sharing more market space with the natural gas industry. In West Virginia, coal officials say they welcome natural gas as a competitor and a partner.

Tom S. Witt, director of the West Virginia University Bureau of Business and Economic Research, said there is room for both industries in West Virginia.

“I think they are both energy sources, and many firms can use either natural gas or coal in the production of the products they produce,” Witt said. “I don’t think we should look at one as being necessarily a competitor of the other. They are part of a diversified resource base that we have in West Virginia that can be used for long-term economic development.”

Bill Raney, president of the West Virginia Coal Association (WVCA), admitted there is some competition among the two industries at the power plant level but said increased natural gas development from the Marcellus shale is good for West Virginia.

“The two natural resource industries are so critically important to West Virginia,” Raney said. “Of course, with the beginning of the discovery of the Marcellus shale, it’s going to be bringing more natural gas into the marketplace. I think it’s great for the state of  West Virginia. If you look now, we are one of the four states that have a budget surplus, and that puts us in a very unique position in this country.”

He said both industries are hoping for increases in the price of their respective commodities to foot the bill for increasing mining and drilling costs. When it is appropriate, Raney said the industries work together, but each also has its own unique struggles.

“We try to work together, because typically, where you have natural gas, you’ve got coal. We work out the spacing problems,” Raney said. “Companies are usually good about getting together and working out what is best for them. They’ve got a whole new set of regulations coming, and that’s their battle, not ours. We have plenty of regulations of our own to take care of.”

West Virginia is a net exporter of energy. Raney said he hopes the development of the shale will further West Virginia’s image as an energy-producing state.

“Hopefully, it will bring the recognition around that we truly are an energy state, and an awful lot of this country depends on what happens here in West Virginia,” Raney said. “The greater appreciation we have for that, the better off we’ll all be in West Virginia.”

With the rush to tap the resources of the shale, coal issues have largely been overshadowed in Charleston in recent months. One piece of legislation, the Intrastate Coal and Use Act, seeks to put regulatory authority of coal mined and used in West Virginia in the hands of West Virginia environmental regulators. Currently, the Environmental Protection Agency, a federal agency, can issue a final veto of a mine.

Raney said legislation such as the Intrastate Coal and Use Act could also benefit natural gas industries, and in many instances, natural gas, coal and natural resource extractors may be able to work together on such laws.

“The people here truly know what kind of water quality we need,” he said. “We know that air quality needs to be controlled, and you’re dealing with hills and hollows and a unique terrain and geology that truly can be better addressed by West Virginians.”

In a prior interview with The Register-Herald, WVCA Vice President Chris Hamilton said he sees natural gas as a partner in the state.

“I don’t really see natural gas as a threat to the coal industry,” Hamilton said. “Look, just a couple of years ago our economy was in full go-mode. We had lines at gas pumps with gas selling at $4 and $5 a gallon. We were selling every ton of coal we could mine, pumping all the oil we could pump and drilling for every cubic foot of natural gas, and we still couldn’t keep up with worldwide demand.”

Hamilton said that as the nation comes out of an economic downturn, it will be looking for every possible energy source it can get its hands on. He predicted that will include not only coal and natural gas, but also hydro, nuclear, wind and solar power.

Though many believe natural gas is a cleaner energy source than traditional coal-fired operations, coal may have its merits as well. If both sources of energy are viable options, Hamilton said coal still has some advantages over natural gas.

“Mining sustains many more good-paying jobs with higher payroll dollars and greater local and state taxes than natural gas,” Hamilton said. “Gas operations support a few jobs during the initial drilling phase but for a short duration of time. Also, in most instances, coal currently has the market when gas is considered, so it’s typically the case that gas is encroaching on a market that is traditionally fueled by coal.”

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