Power Generator's SO2 Emission Reduction Projects Set the Stage for the Comeback of High Sulfur Coal Mining

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Coal-fired power plant owners are lining up sources of high sulfur coal, after years of avoiding the fuel. Thanks to the Clean Air Act and the billions of dollars that power generators have invested in power plant SO2 emissions reduction projects over the years, high sulfur coal is staging a comeback. High sulfur coal fell out of favor after passage of the Clean Air Act, and many power generators switched to low sulfur or "compliance" coal, which in some cases has to be barged or railed from distances far away.

Take for example American Electric Power Company (NYSE:AEP )(Columbus, Ohio), which is underway with construction of a new $150 million, wet flue gas desulfurization unit at its Mountaineer power station in New Haven, West Virginia. In 2007, when the new FGD unit becomes operational, American Electric Power is planning to switch from compliance coal to less expensive high sulfur coal sourced from a new mine to be developed near the 1,364 MW power plant. Mountaineer used about 3.3 million tons of low sulfur coal in 2004.

AEP is also studying the possibility of constructing an IGCC unit at Mountaineer.

The new high sulfur mine, to be developed by a subsidiary of Cline Resource & Development Company (Beckley, West Virginia), will produce around two million tons per year. This will be a deep underground mining development and will include the construction of a new coal preparation plant.

For more information on this trend see related August 25, 2005 news article - Alliance Coal Expands Eastern U.S. Coal Production

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