Profile of the Pennsylvania Coal Industry

Reserves
The Energy Information Administration (EIA) estimates the demonstrated US coal reserve base at 496 billion tons distributed geographically among 31 states; with 27 billion tons in Pennsylvania.  At current consumption levels, coal supplies will be available for at least the next 250 years.  In fact, on an energy equivalent basis, the 5,441 quadrillion BTUs of US coal surpasses the 4,446 quadrillion BTUs of Middle East oil. 

Production
Pennsylvania is the fourth leading coal producing state, mining 68 million tons last year.  Almost 80 percent of this output came from 39 underground mines and the remainder from 377 surface mining and reprocessing sites.

Economic Value
In addition, the Pennsylvania mining industry constitutes a major source of employment and tax revenue.  Last year, it created 49,100 direct and indirect jobs with a total payroll in excess of $2.2 billion.  Taxes on these wages netted over $700 million to the coffers of federal, state and local governments.

Markets
The steam coal market is the largest customer for Pennsylvania coal.  About 75 percent of Pennsylvania’s annual bituminous coal production goes to the electricity utility sector.

Coal has been and will continue to be the major fuel of choice for electricity generation.  Fifty percent of the United State’s electricity is generated by coal and coal accounted for 56 percent of the total amount of electricity produced in Pennsylvania last year.

In addition, coal is by far the least expensive fossil fuel on a dollar per million BTU basis for electric generation, averaging almost one-fourth the price of natural gas ($2/mmBTU versus $7/mmBTU).

Pennsylvania’s reliance on coal-fired electricity has made the Commonwealth one of the largest exporters of electric power in the US.  About 30 percent of the electricity produced in Pennsylvania is exported to other states.

Environmental Improvements
As coal use has increased, technological advances have allowed it to be processed in a cleaner manner.  For example, from 1970 to 2009, coal generation has increased by 225 percent while emissions of regulated pollutants decreased by 77 percent.

HB80 consists of two separate and distinct issues, both of which would have a profound impact on the generation of coal-fired electricity in Pennsylvania and a significant impact on coal production and employment.

One part of the bill would dramatically increase the Tier I requirements of Pennsylvania’s Alternative Energy Portfolio Standards Law (AEPS), which would negatively affect the use of coal; the other would provide incentives to encourage development and commercial deployment of Carbon Storage and Sequestration Technology (CC&S), which would positively affect coal use.