State coal exports up in 2009

Shipping costs fell last year, making it cheaper to sell coal overseas

Posted: Friday, December 18, 2009

FAIRBANKS - Alaska's coal exports have increased following a two-year slump, and the state's sole producer is optimistic they will remain strong despite international efforts to regulate fossil fuel use.

Shipments to Asia and Chile by Usibelli Coal Mine should reach 817,000 tons this year, more than the previous two years combined, company vice president Steve Denton said during a Wednesday night panel discussion about the state's coal industry.

Usibelli produces roughly 1.5 million tons of coal per year. The bulk goes either to cogeneration power plants, which produce both electricity and feed underground district heating networks, or is exported.

Denton said various factors make Alaska coal attractive to international buyers. Shipping costs across the Pacific Ocean fell last year, he said, making it cheaper to sell coal overseas and increasing profit at home.

"When price goes down on shipping, it's generally good for us," Denton said.

The presentation drew roughly 50 people a Fairbanks library. Some questioned Alaska coal's prospects given domestic and international efforts to reduce carbon emissions and state and federal subsidies for alternative energy. Denton said he expects coal markets to remain strong because it stands as one of the cheapest sources of power. Alaska has an estimated 5 trillion tons of undeveloped coal reserves, so it's a major potential supplier.

"It's pretty hard to see the end of coal as a resource," Denton said.

Rajive Ganguli, a mining engineer at the University of Alaska Fairbanks, said much of Alaska's coal reserves hold relatively low sulfur and mercury levels, making it environmentally cleaner than coal from many regions.

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