News Column

Coal operators offer views of anthracite's future

June 22, 2014

By Stephen J. Pytak, Republican & Herald, Pottsville, Pa.

June 22--Summer is a good time for anthracite coal operators to consider their futures.

Unlike the winter when business usually picks up, the season of sunburns reminds them that anthracite isn't the biggest commodity on the world market, demand can decrease and layoffs can occur.

"That makes me incredibly uncomfortable. I dislike it and impacting people's lives is a heavy burden," J. Greg Driscoll, president and chief executive officer at Blaschak Coal Corp., Mahanoy City, said Tuesday.

Blaschak's employs "about 150" full-time workers, Driscoll said. In spring 2013, Blaschak's laid off "about 100" of them for a month. On June 16, the coal company had to do it again. Driscoll said the workers will return July 14.

"Most of the industry did it for most of the last 12 months. The pricing and the market is in a very difficult place, and summer is our slow period. Most of our business is heating-related. Because of where the market is today, we have temporarily shut down all of our mining activity for a month. We do that because we have plenty of feedstock on the ground already that we've mined and we can continue to keep our processing plants full. And it's not advantageous for us to be spending money when we're not selling as much," Driscoll said.

But not all coal companies have seasonal layoffs.

"We don't," Brian R. Rich, president of Reading Anthracite, Pottsville, said. However, Rich said his company had a "curtailment" of more than 50 full-time strip mine workers from mid-January to mid-February because conditions were too cold to work in.

When asked about the future of the industry, Rich said Wednesday he was confident it would get brighter and brighter.

"Look at the world demand for coal. It's projected to go higher. As long as we intend to use steel and electricity, coal will be an integral part of that in the United States as well as the world. Like Mark Twain said, the report of my death has been greatly exaggerated," Rich said.

Whatever the future holds for the anthracite coal industry, a few things are certain, according to Driscoll, Rich and the website for the Pennsylvania Anthracite Council: There's a lot of anthracite underground in Pennsylvania, more than 4 billion tons. Government regulations will continue to challenge the industry and operators will always have to market their products to survive.

"We're always looking for opportunities in the world market," Rich said.

Blaschak operates three active strip mines: Centralia, Columbia County, Primrose, Schuylkill County, and Lattimer, Luzerne County.

"Blaschak holds mining permits covering approximately 2,000 acres and is operating on the Lattimer property in a permit held by the Glenn O. Hawbaker Company," Driscoll said.

During a seasonal layoff, Driscoll considers strategies to market anthracite and spur research to find other uses for its high-carbon content.

"We're curious about emerging technologies. Right now, we're working with consultants. We're evaluating research ideas that could drive the long-term value of our anthracite products. We're trying to rebuild the industry and bring it back. And I believe it could have a bright future. We have a great product," Driscoll said.

Driscoll believes its high carbon content is a key to its future.

"Anthracite contains the highest proportion of pure carbon -- about 86 to 98 percent -- and has the highest heat value -- 13,500 to 15,600 British thermal units per pound -- of all forms of coal," according to www.encyclopedia.com.

"If you look at carbon, either for heat, chemical processing or other applications, anthracite, this is a great product for that and I think in recent years Blaschak and the rest of the industry has been doing a better job of promoting those benefits throughout the marketplace. But anthracite coal prices are still at their lowest level since 2009," Driscoll said.

Recently, the Environmental Protection Agency proposed a Clean Power Plan to slash carbon dioxide emissions. A four-month public comment period on the plan began this week, according to www.climatecentral.org

It may not affect the anthracite business immediately, Driscoll said.

"We sell most of our coal for industrial and home heating applications, so it won't have a direct impact on us. However, as with a lot of things, our coal is used in some similar markets as some bituminous products. As that market changes, there might be some impacts on us. But it's hard to tell if those impacts will be positive or negative. It could impact co-generation plants. We don't run any of those facilities. We supply rock refuse and silt to some, but it's not our main business," Driscoll said.

Founded in 1871, Reading Anthracite, has "between 500 to 600" employees, according to Rich. It runs numerous companies, including two co-generation plants, Gilberton Power Company and Schuylkill Energy Resources Inc.

Rich isn't concerned about the plan.

"They established the levels that we must achieve using 2005 as the baseline, and we're well on our way to achieving that goal already," he said.

Its goal is to slash Carbon dioxide emissions from fossil fuel-fired power plants to 30 percent of 2005 emission levels by 2030, according to www.climatecentral.org.

Rich called the plan "political window dressing." And he did not think it was taking a historic step to fight climate change.

"The natural retirement of facilities that are obsolete will achieve their result, what they've identified as their goal. So, through natural attrition, they'll achieve this step they've identified. It's really not all that historic. It's a political, expedient way of distracting the population," Rich said.

Driscoll sees the anthracite business becoming "more structured and profitable."

"This industry has evolved over the years from the way it was back in the late 19th century, when it was big companies servicing other big companies. From there, it went to families operating almost on a cash basis and mining when they could. Now, it's reverting again to professional investment and the industry becoming more of a professionally invested industry," Driscoll said.

For example, Blaschak Coal was started in 1937 and acquired by Milestone Partners, Radner, Delaware County, in 2009.

"Most Anthracite reserves are found in the five counties of Schuylkill, Carbon, Northumberland, Lackawanna and Luzerne Counties. The Anthracite coal fields extend 50 miles east and west and 100 miles north and south covering approximately 484 square miles. Current estimates show 4 to 6 billion tons of reserves of anthracite left in the region," according to www.paanthracite.com.

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(c)2014 the Republican & Herald (Pottsville, Pa.)

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