Martin County spill photo 4

Tap water in a home downhill from Massey-operated surface mines and underground slurry injection sites in Mingo County, WV. Now, 700 families are suing the company.

Photo by Melissa Farlow; printed in Time Magazine on 23 March, 2008.

Top 20 Producers of MTR Coal, 2002-20061 Magnum Coal

2 Alpha Natural Resources

3 Massey Energy

4 Progress Fuels

5 TECO Energy

6 International Coal Group

7 Andover Enterprises

8 James River Coal

9 AMVEST

10 Apex Energy

11 Energy Coal Resources

12 Snap Creek Mining

13 Pine Branch Coal

14 Manalapan Mining

15 Remington Coal

16 Arch Coal

17 Roda Resources

18 Ruhrkohle Trading

19 Foundation Coal

20 A & G Coal

Based on database compiled by Appalachian Voices and satellite base maps produced by Skytruth, 2007.Visit http://www.ilovemountains.org/myconnection for more information on data sources.

Top 20 Producers of MTR Coal, 2002-20061 Southern Company

2 American Electric Power

3 Duke Energy

4 Progress Energy

5 TVA

6 Dayton Power & Light

7 Constellation Power

8 Dominion Resources

9 Consumers Energy

10 East Kentucky Power Coop

11 South Carolina Electric and Gas

12 E.ON

13 Santee Cooper

14 Cardinal Operating Company

15 Detroit Edison

16 Mirant

17 Eastman Chemical

18 NRG Energy

19 Cogentrix

20 South Mississippi Electric

Based on database compiled by Appalachian Voices and satellite base maps produced by Skytruth, 2007.Visit http://www.ilovemountains.org/myconnection for more information on data sources.

There Are Many Factors Determining Coal Prices, But Recent Inflation is Driven By Appalachian Trends

From: EIA Coal News and Markets, 28 March, 2008

$110/ton in Northern Appalachia!

$110/ton in Northern Appalachia!

Virginia Coal Production, 1880 - 2007

And Recent Production Trends Indicate Little CapacityFor Appalachian Mines To Respond to Price Spikes

Coal Production in the Appalachian Basin, 1850-2007 & USGS Projections Based on Estimates of Economically Recoverable Reserves

From: William Wolf, 2006. Presentation to the 15th Annual MEMS Conference. www.minecon.com/Proceedings06/Sess2Wolf.pdf

From: William Wolf, 2006. Presentation to the 15th Annual MEMS Conference. www.minecon.com/Proceedings06/Sess2Wolf.pdf

From: William Wolf, 2006. Presentation to the 15th Annual MEMS Conference. www.minecon.com/Proceedings06/Sess2Wolf.pdf

From: William Wolf, 2006. Presentation to the 15th Annual MEMS Conference. www.minecon.com/Proceedings06/Sess2Wolf.pdf

Demonstrated Reserve BaseDemonstrated Reserve Base

All Coal ResourcesAll Coal Resources

Technically Recoverable ReservesTechnically Recoverable Reserves

Economically Recoverable ReservesEconomically Recoverable Reserves

Measuring Appalachian Coal Reserves

20 bst in 2007 based on USGS (Milici, 1997)

16 bst in 2007 based on Global Energy, 2006

102 bst in 2005 Averitt,1974

???

bst = billion short tons

40 bst in 2007 based on Global Energy, 2006

54 bst in 2005 EIA, 2006

(46

bst i

n 20

07)

(46

bst i

n 20

07)

Min

ed O

ut R

eser

ves

Min

ed O

ut R

eser

ves

“Present estimates of coal reserves are based upon methods that have not been reviewed or revised since their inception in 1974... … only a small fraction of previously estimated reserves are actually minable reserves.”

How Good Are the Estimates That We’re Using For Energy Planning?

- National Academy of Sciences, 2007

The EIA has over-projected Appalachian coal production for the last 11 years

350.0

400.0

450.0

500.0

550.0

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

AEO 1996AEO 1997AEO 1998AEO 1999AEO 2000AEO 2001AEO 2002AEO 2003AEO 2004AEO 2005AEO 2006Actual

MM

ST

per

Yea

r

But even EIA’s extremely optimistic forecasts have declined a lot over the last 12 years

200 million tons/year drop in 2015200 million tons/year drop in 2015

“… coal mines of the future will encounter a range of new or more difficult mining and processing challenges as more easily accessed coal seams are depleted and the industry turns to less accessible reserves. Surface operations will mine deeper seams that require increased stripping ratios and multiple benches...”

How Is Coal Supply Related to Mountaintop Removal?

- National Academy of Sciences, 2007

While you won’t find anything about it in their filings to SUCs, energy companies are well aware of the risks to their customers from the controversy around mountaintop removal and 404 permits…

Demonstrated Reserve BaseDemonstrated Reserve Base

All Coal ResourcesAll Coal Resources

Technically Recoverable ReservesTechnically Recoverable Reserves

Economically Recoverable ReservesEconomically Recoverable Reserves

Measuring All US Coal Reserves

(61

bst i

n 20

07)

(61

bst i

n 20

07)

Min

ed O

ut R

eser

ves

Min

ed O

ut R

eser

ves

85-90 bst in 2007 based on Global Energy, 2006

100-120? bst in 2006 NAS, 2007

493 bst in 2005 Averitt,1974

???

bst = billion short tons

268 bst in 2005 EIA, 2006

From: William Wolf, 2006. Presentation to the 15th Annual MEMS Conference. www.minecon.com/Proceedings06/Sess2Wolf.pdf

0

5

10

15

20

25

30

35

40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

Imports and Exports of Steam CoalSource: Energy Information Administration, Annual Coal Report, 1996 - 2007

Imports

Exports

20022002

The Future of Rail Transportation

“…we should expect the “new normal” [in coal transportation] to be a pretty lengthy state of increasing costs, tight capacity, and related service performance challenges.”

- The New Normal: Why Businesses Should Redesign Now, and Not Wait for Freight Rates and Service to Get “Back to Normal” by Lee Clair and Dean

Wise. April, 2005.

“We are headed for a time of excitement and turmoil in the coal industry unlike anything we have seen before. Renewed interest in coal as a fuel source could increase demand by as much as 4% per year during the next twenty years, but very little attention is focused on the ability of the U.S. coal-chain infrastructure and reserve base to support such an expansion.”

- Gary L. Hunt, President, Global Energy Advisors