Illinois Basin coal industry may benefit from stricter regulation of Appalachian coal

With environmental and mine-safety legislation pending in Congress, the future of coal mining in Central Appalachia may never have been more uncertain, so mining in the Illinois Basin may stand to benefit. "Illinois coal, once considered too dirty to be burned by utilities, is on the rise after the worst U.S. coal disaster in 40 years," Mario Parker of Bloomberg reports. "The Illinois Basin is poised for growth and we fully expect to see an environment over the next several years with companies vying for that market," John Hanou, vice president of coal research at Edinburgh-based Wood Mackenzie Consultants Ltd., an energy advisory firm, told Parker. "It looks rosier than Central Appalachia."

"St. Louis-based Peabody Energy Corp., the nation’s largest coal producer, holds the most reserves in Illinois," Parker writes. "Arch Coal Inc. and Alpha Natural Resources Inc., the second- and third-biggest coal companies, respectively, have expressed interest in Illinois deposits to circumvent the safety and regulatory challenges in the Eastern U.S." Arch has said it doesn't plan to bring its Illinois properties into production for several years, as they still aren't as profitable as Powder River Basin coal in Wyoming, rival executives expect Peabody to move faster, Parker reports.

Illinois Basin coal has the third-highest energy content of any regional U.S. coal deposit, but releases four times the sulfur dioxide as Appalachian coal. "The Clean Air Act put a huge disadvantage on the Illinois coal industry, and it saw a significant decline in production as a result of that over time," Warren Ribley, director of the Illinois Department of Commerce and Economic Opportunity, told Parker. The Illinois Coal Association reports only 3,500 workers are now employed by coal in the state, down from 10,000 in 1990. But now "scrubbers" that remove sulfur dioxide are more common at coal-fired electric plants.

Environmentalists remain wary of a shift in production from one coalfield to another rather than a move toward renewable energy sources. "This country needs to move beyond coal," David Graham-Caso, a spokesman for the Sierra Club, told Parker. "As that transition happens, there needs to be very careful regulation of any coal mining, whether it be in Appalachia or the Illinois basin." (Read more) For a U.S. Geological Survey report on production and depletion of coal in both basis, click here. (USGS map)