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CONSOL ENERGY COMMITTED TO
WILDLIFE PRESERVATION AND GROWTH
Domestic Mine article by Harold
Hough April/May 2008
It was an inauspicious beginning
for what was to become the largest underground coal producer in the United
States. Consolidation Coal Company was formed in 1860 with the merger of several
coal-mining firms in Western Maryland. Unfortunately, within months, the country
was embroiled in the Civil War. Since Western Maryland was a major battlefield
of the war, hostilities kept the new company from actually mining until after
the surrender of the South in 1865.
Today, things look a lot brighter
for CONSOL Energy (as it is now called). CONSOL is the largest producer of
high-Btu bituminous coal in the United States. It has also expanded into other
energy related fields. Thanks to skyrocketing natural gas prices, the expanded
use of coal by electric power producers, and the fact that the United States is
the world’s largest coal producer, CONSOL is becoming a highly profitable
energy producer.
Since the United States has
massive coal reserves, coal usage accounts for over half of the electricity
generated in this country. The biggest problem is that much of the coal in the
East has higher sulfur content than that found in the Powder Basin region of
Wyoming. The result has been that Eastern coal producers have had a tough time
as their customers left them.
That doesn’t mean that the
eastern coalfields don’t have advantages. CONSOL’s eastern coal reserves
allow it to produce the largest amount of low moisture, high-BTU bituminous coal
in the nation. It also improves the quality of the coal with a heavy media
liquid bath and mechanical sorting to eliminate the incombustible products like
rock. This gives the customer more energy per ton, lowers transportation and
storage headaches, and less ash to dispose of.
The biggest advantage of eastern
coalfields is location. While Wyoming coal is half a continent away and reliant
on a long rail system, coal from CONSOL’s fields is right in the Eastern power
markets. According to CONSOL, the key to their profitability is keeping their
coal production close to the marketplace. And, the northeastern quarter of the
nation, with its large population and cold winters, is a major energy consumer.
MORE ENERGY FROM COAL
CONSOL has also leveraged its
coal reserves to move into other energy fields like natural gas. Thanks to its
coal deposits, the company, though its subsidiary CSX Gas, has become a producer
of natural gas, through its coalbed methane gas collection. Today it produces
151 million cubic feet of coalbed methane a day.
Coalbed methane production began
in the early 1980s to reduce the risk in coal mines. First, wells are drilled
down to the coal seam and the coal is cracked by pumping in a fluid. The methane
then flows along the cracks to the wellhead.
Since each ton of coal can
produce from 350 to 650 cubic feet of gas, CSX Gas has become a major producer
of natural gas. Proved reserves on December 31, 2006 were 1.265 trillion cubic
feet (Tcf). This coalbed gas now accounts for five percent of the United States’
gas production and seven percent of its natural gas reserves. In addition, CSX
Gas expects production to increase by 25% in 2008.
CSX Gas is continuing to expand
its coalbed methane business. One new development is the Nittany project that
covers over 250,000 acres in three Pennsylvania counties. Eight wells were
drilled in 2007 and more are being planned for this year.
CSX Gas has earned a reputation
as a safe, efficient producer, with one of the industry’s lowest cost
structures. Low costs, when combined with the relatively high prices they
receive because of the proximity to East Coast markets, enables them to earn
near industry-leading margins and returns on capital. They are also locking in
the higher natural gas prices by hedging in the market. As a result, In May
2006, CNX Gas was cited as one of the top 100 Growth Companies in the by Business
Week magazine.
CONSERVING LAND
Although Eastern coal companies
have received a “bad rap” for despoiling the earth with open pit mining,
they are a strong advocate of preserving the wildlife of the region. CONSOL is a
corporate member of the West Virginia chapter of the Nature Conservancy and has
made many generous donations over the years.
One example of CONSOL’s
commitment to preserving the wildlife was that it was recently honored by the
National Wild Turkey Federation (NWTF) with its Energy for Wildlife Corporate
Achievement Award. The award recognizes corporations that demonstrate
outstanding efforts to improve wildlife habitat and promote conservation and the
country's hunting heritage.
Although CONSOL has maximized its
profits, as seen with the coalbed methane project, the company has managed to
keep the environment foremost in its mind. And, thanks to its efforts, the East
will keep some its land much as it was in 1860, when a small coal company began
its long history.
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