Friday roundup, July 19, 2013

July 19, 2013 by Ken Ward Jr.

Germany Soapbox Race

Competitors race down a big stockpile in a homemade coal lorry soapbox race car in Herten, Germany, Sunday, July 14, 2013. About 40,000 spectators climbed the 220 meters mine pile in the center of the Ruhr valley to watch the Red Bull soapbox fun race. (AP Photo/Martin Meissner)

Here in West Virginia this week, the biggest coal-related news was the case going on over at the state Public Service Commission, where Appalachian Power is looking for PSC approval to increase its ownership of two coal-fired power plants. We’ve covered this case (see here and here)  and had a longer take-out Sunday piece a few months ago. But it’s well worth going over to The State Journal to check out the coverage from their excellent energy reporter, Pam Kasey.

For example, there’s this story asking the important question: Who should be responsible for the Mitchell coal ash pond?

The impoundment in question is the 71-acre Connor Run fly ash impoundment. Ohio Power uses the impoundment in cooperation with Consol Energy, which supplies coal to Mitchell from its adjacent McElroy mine.

Connor Run is a substantial facility. First commissioned more than 40 years ago and now more than 400 feet high, it is classified as one of 45 “high hazard potential” impoundments by the U.S. Environmental Protection Agency — a designation that reflects not the likelihood of a failure but the potential human life or property damage consequences of a failure.

APCo says the impoundment is well managed and in compliance with all regulations, an assertion no one disputed during the hearing. The company also says the impoundment and any associated liabilities come with the plant.

“Those liabilities, those risks, they transfer with the asset,” said APCo President and CEO Charles Patton on the first day of the hearing. “That’s the nature of a business where it’s an industrial business.”

But it doesn’t seem quite so straightforward in this instance, because Ohio Power has begun the process of transitioning its wet fly ash management to dry fly ash management by 2015. Even if the commission approves APCo’s acquisition of Mitchell on Jan. 1, 2014, as proposed, the company would use the impoundment for no more than one year of the 44 years it will have been in operation when dry ash management is fully in place.

And then there’s another story, headline Even with scrubbers, Amos, Mitchell use costly low-sulfur coal:

The decision in Appalachian Power’s billion-dollar proposal to buy generating capacity at Amos and Mitchell power stations could end up turning, in part, on the types of scrubbers APCo and its AEP affiliate decided earlier to install on those plants.

We discussed this issue in this Gazette story, but Pam added some interesting detail from former PSC consumer advocate Bill Jack Gregg’s testimony at this week’s hearings:

Gregg’s concern with regard to APCo’s proposal to purchase parts of Amos and Mitchell is that these plants are tied to higher-cost, lower-sulfur coal.

“It’s not only higher-priced, but it is inherently becoming more volatile because most of the cutbacks in production in the past several years have occurred in Central Appalachian coal region” where lower-sulfur coal is sourced, he said.

“I think we’re going to be condemned to riding a very scary price roller coaster for as long as we have to buy low-sulfur coal to supply these plants.”

It’s also worth checking out a couple of posts (here and here) about the ApCo case that Bill Howley wrote for his Power Line blog.

Meanwhile this week, there were some interesting stories about coal-fired power plants in other parts of the country. For example, the Buffalo News reported:

The massive coal-fired power plant that towers over Dunkirk harbor looks every bit like the giant industrial dinosaur that it is.

And if environmentalists get their way, it soon will be extinct.

They’ve joined in a strange-bedfellows alliance with the Business Council of New York State to resist a $506 million plan by the plant’s owner, NRG Energy Inc., to convert the electricity-generating facility to natural gas.

The company says the move to gas is necessary for the plant to survive – and that it would cut the facility’s carbon emissions, and thus its contribution to global warming, in half.

You might think environmentalists would like a plan that would end the plant’s reliance on the dirtiest fossil fuel of them all, but you would be wrong.

And it’s all because natural gas is so intimately tied to the environmentalists’ version of the F-word: “fracking,” the controversial gas extraction technique that’s spurred an energy boom as nearby as Pennsylvania but that remains off-limits while New York continues studying its safety.

Fort Knox Gold Mine

This September, 2005 file photo provided by Fairbanks Gold Mining, Inc. shows mining at the Fort Knox Mine, which is currently the largest operating gold mine in Alaska.  A new study based on observations from space suggests the gold on Earth came from colliding dead stars in a cataclysmic event that occurred long ago. The research by the Harvard-Smithsonian Center for Astrophysics will appear in a future issue of the Astrophysical Journal Letters. (AP Photo/Fairbanks Gold Mining Inc., File) 

And The Associated Press had this story out of Virginia:

Dominion Virginia Power’s Altavista power station is now running on renewable biomass as part of a previously announced plan to convert three of its coal-fired power plants in the state to burn mostly waste wood left from regional timbering operations as fuel, the energy provider said Monday.

The subsidiary of Richmond-based Dominion Resources Inc. said the other plants in Hopewell and Southampton County should be operating on biomass by the end of the year. When in operation, the three plants are expected to produce a total of 150 megawatts of renewable energy, enough electricity to power about 37,500 homes.

In 2011, the company announced plans to spend about $165 million to convert the plants in a move it said provided environmental and customer benefits. Under Virginia law, Dominion will be able to recover certain costs related to the conversions.

And to understand what’s happening in energy markets, check out the graphic here from the National Journal.

Elsewhere this week, Manalapan Mining Company, Inc., received three years of probation and a $150,000 fine for allowing miners in Kentucky to work in hazardous conditions, while WFPL reports on a story that links mine safety issues to a group rating Kentucky Governor Steve Beshear one of the  “Worst Governors in America.”

And here’s a story about the U.S. Mine Safety and Health Administration’s plans to close its Wilkes-Barre, Pa., office.

The Christian Science Monitor reported on the “dirty coal behind Germany’s clean energy“:

Coal-fired power plants contributed 52% of Germany’s first-half electricity demand as output from natural gas-fired power plants and wind turbines fell, research organization Fraunhofer Institute (ISE) said.

Coal plants increased production by about 5% to 130.3 TWh in the first six months of 2013 as output from gas-fired power plants fell 17% to 21.9 TWh, said ISE, which collated data from Germany’s statistical office and the EEX transparency platform.

It get’s worse. Germany is not only building new coal plants, but they use lignite, a soft brown coal halfway between coal and peat with an even higher CO2  and ash content than hard coal. Germany is the largest lignite producer on earth – and get it from strip mining.

Meanwhile, China Daily reports:

Four Chinese officials are being investigated for alleged duty dereliction in two coal mine blasts that killed 53 people, the Supreme People’s Procuratorate said in a statement on Monday.

The four officials are Li Shijun and Zhang Yuzhong, both former officials with the Work Safety Bureau in Baishan City of northeast China’s Jilin Province, and Xu Shengxue and Wang Yuxi, who were officials with the Baishan Branch of Jilin Provincial Bureau of Coal Mine Safety.

On March 29, an explosion killed 36 people and injured another 12 at the Babao Coal Mine in the city of Baishan. The state-owned Tonghua Mining Group, the owner of the mine, reported 29 deaths.

Despite an order from provincial authorities that bans further mining, the group continued to send people into the colliery. Another blast that followed on April 1 killed 17 people and injured another eight.

And finally, we had this story from Bloomberg:

Gustavo Soler knew he was in trouble. It was 2001, and Soler was union president at a coal mine in Colombia owned by Drummond Co., which is controlled by the wealthiest family in Alabama.

Soler’s predecessor, Valmore Locarno, and Locarno’s deputy, Victor Orcasita, had been killed seven months earlier, and now Soler was getting threats, says his widow, Nubia, in an interview in Bogota. He told his family to pack up. They would leave the area as soon as he got home from the union office in Valledupar, a city in the country’s coal belt. He never made it.

Armed men stopped his bus, asked for him by name and abducted him. He was found under a pile of banana leaves with two bullet holes in his head, Bloomberg Markets magazine will report in its August issue.

After the killing, Nubia says, Garry Neil Drummond, chief executive officer of Drummond Co., sent a taxi to bring her to the Drummond offices near the coastal town of Santa Marta, where, in a meeting, he promised to put her children, Sergio and Karina, then 14 and 9, through school.

Nubia describes a tender moment for a tough man. Drummond, now 75, started working in his family’s coal mines around Jasper, Alabama, at 15. As an executive in 1969, he negotiated an export deal with a Japanese trading company and fulfilled the commitment by strip mining Alabama’s hills with colossal shovels and trucks. When those reserves dwindled, Drummond Co. opened its first mine in Colombia in 1995. It came under attack from the Revolutionary Armed Forces of Colombia (FARC), a group that had been at war with the government since the 1960s.

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