Indiana News

Green Energy Group: There's Not As Much Coal As You Think

Researchers say 200 billion tons may be too costly to extract profitably

10/30/2013


The coal gasification plant at Edwardsport. (WIBC.com file photo: Duke Energy)

A Colorado green-energy group is warning U.S. coal reserves are much smaller than the government calculates.

The Energy Information Administration estimates there's enough coal in the U.S. to last well into the 23rd century. But Clean Energy Action argues the government is failing to assess how easily that coal can be mined.

Researchers Leslie Glustrom and Zane Selvans estimate 80% of those billions of tons of resources are buried so deeply that the cost of extracting the coal is too high for mining companies to turn a profit. And Tom Sanzillo with the Cleveland-based Institute for Energy Economics and Financial Analysis says the dilemma is made worse by falling prices for natural gas, which lowers the breakpoint coal companies must meet to make coal competitive.

Indiana is the seventh-leading coal-producing state, and CEA says the state has mostly escaped the production declines in the five years since the recession hit. But Indiana produces less than 5% of the nation's coal, compared to about 70% for the top five states. Glustrom says those states' production has fallen 13% since the peak year of 2008.

Glustrom cautions energy markets are impossible to predict with certainty, but contends the economics of coal mining and financial losses at some of the biggest companies are likely to continue pushing production down.

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