Coal: abundant, but not easily converted to cash.

• Author: Schneider, Douglas
• Position: Alaska's coal industry - Industry Overview

Alaska's clean burning, low-sulfur coal could help ignite a bright future for Alaska's coal industry. But no one knows for sure when, if ever, Alaska will become a major international coal exporter, say industry representatives, university researchers and trade officials.

P.D. Rao, associate director of the Mineral Industry Research Laboratory at the University of Alaska Fairbanks, is optimistic. "Alaska's coal future should be very good," Rao says. "We have a very-high-quality coal that is quite competitive. The future looks very good."

Indeed, Alaska is poised with bountiful coal reserves. The state holds more than half of the nation's coal deposits, more than 160 billion tons. Also to its advantage, Alaska coal contains extremely low levels of sulfur -- far less than 1 percent and the kind likely to become more desirable as tougher clean-air standards take effect in Eastern Europe and Asia.

Usibelli Coal Mine, the state's only operating coal mine, hopes to cash in on those markets. Its mine near Healy in central Alaska ships 700,000 to 800,000 tons of subbituminous coal, worth some $30 million, to Korea each year.

"It's possible there could be more markets in Asia and Europe," says Charlie Green, marketing assistant at Usibelli. "Europe is adopting tougher clean-air standards which will require the use of low-sulfur coal or expensive technologies to reduce emissions. We may be able to capitalize on the changes and make the most of these markets. We are interested in getting our oar in the water in Europe."

But to its disadvantage, Alaska coal contains high levels of moisture, in excess of 25 percent. High moisture translates to less energy per ton of coal and boosts transportation costs.

"In other words, about every fourth ship we send out is carrying water, not energy. It makes it harder to...