EnergyBiz - September/October 2007 - (Page 24) EnergyBiz The link between coal burning and global warming is strong. As an industry, what do you think the best response is going to be? King coAl Leer The ultimate answer is technology. If you really are serious about stabilizing CO2 concentrations in the atmosphere, the only way to achieve that in any meaningful fashion will be to invest more in coal, not less. Emissions from power plants account for one-third of the U.S. emissions of CO2. When you look at the generation of power in the U.S., coal provides roughly about 52 percent. When you look around the world, coal use is growing faster than every other fossil fuel, particularly in developing Asia. China and India do not have any oil and gas to speak of, but they have a fair amount of coal. They’re using it. A lot of hope is tied to developing carbon sequestration and that’s not a proven technology. The only way you can be serious about stabilizing CO2 concentrations is that the United States and Europe invest in carbon sequestration technology, carbon capture technology and get on with it. We need 10 to 12 years and a meaningful investment of a couple billion dollars a year in these technologies, but we can get there. In the energy world, a 10-year time frame is extraordinarily short to bring on major projects. EnErgyBiz LEEr EnErgyBiz So you think that technology will be available in a decade? LEEr If the investments are made today, and we need to start today, they can do it by 2020. You need to get on with it because otherwise all the actions that we take in Europe or the United States will be overwhelmed by the actions that we see in developing Asia. EnErgyBiz Who pays the $2 billion a year? Should it be the electric utilities and their customers, the coal industry or both? LEEr It should be a combination of government research money and it should come from industry as well. Arch Coal Twelve months Ended 12/31/06 rEvEnuEs $2.5 billion nEt incomE $260.6 million Six months Ended 6/30/06 rEvEnuEs $1.3 billion nEt incomE Does that include your industry? We’re willing to try to do our part as well. We’re small compared to the electric utility industry, but this is a public policy issue and ultimately it will come from all of us. EnErgyBiz LEEr EnErgyBiz Do you think the federal government is showing enough leadership on this right now? LEEr That’s up to someone else to determine. There certainly are some thoughtful people trying to think it through. $130.2 million Six months Ended 6/30/07 rEvEnuEs $1.2 billion nEt incomE coaL to Liquids EnErgyBiz Arch Coal has acquired a 25 percent stake in DKRW Advanced Fuels. LEEr 24 percent. EnErgyBiz It is developing coal to liquid technology. If that technology succeeds, won’t that drive up the cost of coal for utilities? LEEr If you look at U.S. coal reserves, we can, over time, meet any reasonable demand. But it takes time and investment. Developing the technology of coal to liquids is one answer for trying to wean ourselves from oil providers that don’t like us. This morning, at $73 a barrel, oil is awfully expensive. EnErgyBiz What about the argument that from a globalwarming perspective, liquid from coal is less desirable than gasoline? $66.2 million Produces 11 percent of u.s. coal Provides coal to generate 6 percent of u.s. electricity operates 11 mining complexes in Wyoming, utah, colorado, West virginia, Kentucky and virginia Employs 4,000 24 E n E rgyB i z September/October 2007
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