A Strategy for Increasing…

                                             A Strategy for Increasing America's Energy Independence with Coal

  Our nation's vast coal resources can be effectively used       An equally strong partnership between industry and
to move the United States towards the goal of energy           government is needed.
independence. The United States' annual demand for coal          While a range of polices and actions can affect the
could nearly double to over 2 billion tons by 2025 and         nation's ability to meet the anticipated demand for coal,
lessen our dependence on imported energy, if current           some are critical for success and require implementation
forecasts are realized and new markets for coal gasification   of an action strategy designed to harness the attention,
and coal-to-liquids develop. A corresponding increase in       innovation and capabilities of both public and private
domestic coal production ­ 1.1 billion short tons in           sectors. These constitute our "Strategy for Increasing
2005 ­ would be needed to meet this demand.                    America's Energy Independence with Coal" and
  A number of factors contribute to this aggressive            include:
growth projection. Coal is the fuel of choice for the          ·   Developing and deploying new technologies that
next generation of electricity, and its share of the total         enable the industry to advance the safety and health
electricity market is forecast to increase from roughly 50         achievements that have been attained to date, including
percent today to as much as 54 percent by 2025.                    effective training tools for the new generation of
  Conventional oil and natural gas sources are constrained         miners that will join the industry in coming years.
by availability and price even as demand for energy            ·   Promoting an aggressive coal conversion program
continues to grow. Conversely, the United States has a             that includes expansion of the nation's capability to
250 year reserve of abundant and affordable coal that can          generate clean electricity from coal and use coal
effectively contribute to lessening our dependence on              to produce pipeline quality synthetic gas and liquid
foreign energy sources in the years to come.                       transportation fuels. This can be facilitated through
  In addition, coal gasification and coal-to-liquids               new industry-government partnerships such as a
technologies are opening promising new markets                     Department of Defense-industry partnership to build
for coal in the residential, commercial, industrial and            coal-to-liquids plants that produce aviation grade fuel
transportation sectors. Production goals equivalent to 4           from coal.
Tcf of pipeline quality synthetic natural gas (SNG) annually   ·   Reaching a consensus on land use and access policies
and 2.6 million barrels per day of liquid fuels from coal          that:
are possible by 2025. Over time, these modern coal
conversion technologies, combined with an aggressive               a. Allows access to coal reserves on federally owned
research program, could open the door to a hydrogen                   lands and promotes accumulation of sufficiently large
economy fueled by coal.                                               reserve blocks on privately held lands;
  Ensuring that sufficient domestic coal is produced,              b. Allows timely expansion of the rail transportation
transported and converted into the energy products                    network based on projected production-to-market
demanded by a growing and increasingly energy-                        scenarios;
dependent economy is a national imperative. Success                c. Provides appropriate sites for new power
requires a strong and coordinated partnership between                 generation plants and coal gasification and coal-to-
coal producing, transporting and consuming industries to              liquids refineries; and
focus on actions and policies that:                                d. Provides access to rights of ways for expansion of
· Enhance coal-fueled electric generating capacity using a            the electric transmission system.
  suite of advanced clean coal technologies;                   ·   Developing regulatory policies and permitting
· Support the emerging coal gasification and coal-to-              procedures that ensure:
  liquids industries;                                              a. Coordination among federal and states agencies
· Expand domestic coal production in a safe and                       to facilitate the expeditious review of permit
  environmentally sound manner; and,                                  applications and the resolution of any conflicts;
                                                                   b. Expansion of existing coal production capacity
· Increase the coal hauling capacity of the nation's
                                                                      through the development of new, greenfield mines
   railroads, river systems and coastal waterways.
                                                                      as well as the expansion of existing mines;
A Strategy for Increasing America's Energy Independence with Coal

        c. Siting and permitting of expanded generating capacity;         for capital expenditures associated with new or
        d. Siting and permitting of new greenfield generating             expanded coal production, transportation, and
           plants;                                                        generating and refining capacity;
        e. Expansion of transmission capacity;                          c. Use of accumulated alternative minimum tax (AMT)
                                                                           credits for capital investment in capacity expansion;
        f. Siting and permitting of gasification and coal-to-
           liquids facilities; and                                         and
        g. Expansion of coal transportation systems.                    d. Repeal of the AMT.

    ·   Establishing environmental policies that balance the        ·   Implementing financial incentives, including loan
        need for expanded and affordable energy supplies with           guarantees, low interest loans, grants, price guarantees
        reasonable and sensible environmental protection                or other incentives to:
        requirements while providing the long term certainty            a. Encourage expansion of coal mines;
        needed for major investment, such as:                           b. Expand the coal transportation system;
        a. Retention of Nationwide Permitting 21 provisions             c. Accelerate installation of advanced pollution control
           and resolution of related Section 404 issues at coal            equipment at existing generating facilities; and
           mines;                                                       d. Promote construction of new generating plants and
        b. Resolution of particulate matter regulations so that            coal refineries using advanced technologies.
           coal production is not constrained by requirements
           that are not justified based on scientific and           ·   Providing full funding of research and development
           economic evidence and are inappropriate to coal              partnerships between government and industry to:
           mines;                                                       a. Meet the research goals originally set out in the
        c. Finalization of NSPS and mercury requirements for               Industry of the Future vision statement for mining;
           existing and new power plants;                               b. Fully implement coal utilization research,
        d. Development of environmental requirements                       development, demonstration and deployment
           for coal refineries that take new and advanced                  programs to meet the criteria and goals established
           technologies into account; and                                  by the Energy Policy Act of 2005;
        e. Opposition to all mandatory restrictions on carbon           c. Expand research on advanced pollution control
           emissions.                                                      technologies associated with the control of mercury
                                                                           and other criteria pollutants;
    ·   Undertaking aggressive employee recruitment
        and training programs at the technical level and at             d. Continue development of advanced clean
        university-level mining engineering programs to meet               coal combustion, gasification and liquefaction
        the demand to replace 55,000 mining employees in                   technologies;
        the next five to 10 years. In addition, at least 300 new        e. Allow for timely completion of the FutureGen
        mining engineering graduates are needed annually to                project;
        keep pace with projected retirements and growth in              f. Develop technologies to capture and sequester
        the industry.                                                      carbon; and
    ·   Enacting tax policies that not only encourage, but              g. Achieve cost-effective production of hydrogen from
        also ensure, timely and adequate investment in coal                coal.
        based energy infrastructure, including expansion of coal
                                                                      The National Mining Association (NMA) commits itself
        mine capacity, coal transportation infrastructure, and
                                                                    to the attainment of these objectives, which promote
        generating plant, transmission lines and coal refining
                                                                    the utilization of coal to fuel America's energy needs,
        capacity, such as:
                                                                    move our nation towards a greater degree of energy
        a. Full expensing of expenditures for exploration and       independence and support our quality of life. For more
           development costs;                                       information, please contact NMA at (202) 463-2600 or
        b. Either accelerated depreciation or full expensing        visit our web site at www.nma.org.