Minerals markets: coal is still 'King': Alaska coal deposits are second largest globally.

• Author: Wolf, Greg
• Position: SPECIAL SECTION: International Trade

Reports of coal's demise have been greatly exaggerated. Coal is still the reigning "king" of power production. Regardless of one's personal views on coal usage, the fact remains that coal is the predominant fuel for producing electricity in the United States and around the world. Currently, coal is used to generate approximately 40 percent of the world's electricity and heat generation.

Another fact is that Alaska has a lot of coal. Indeed, it is estimated that 17 percent of the world's supply of coal resides here in Alaska, beneath our feet. If Alaska were a country, we would rank as the second largest coal deposit in the world. When I mention this to people not familiar with our state, they typically respond about how lucky we are, and that there must be a lot of coal mines and coal mining jobs in Alaska. Sounds reasonable. Only makes sense, right?

But how many operating coal mines do we have in Alaska? The answer is one: The Usibelli mine in Healy, outside Fairbanks. This suggests that there is room for that company to grow and that there is room for other new entrants into the field. Coal is found in many parts of the state, some closer to tide water and shipping than others. While Usibelli is the only active mine in Alaska at this time, producing coal for the Alaska and overseas markets for more than seventy years, several other projects elsewhere in the state are at various stages of potential development, including the Chuitna Coal Project in the Beluga coal fields about forty-five miles southwest of Anchorage near Tyonek.

Strong Demand in Asia

While demand for coal has been declining in the Unites States and Europe in response to government policies and regulations, as well increased competition from natural gas and renewables, demand is strong and actually increasing in other parts of the world, especially Asia. For many lesser developed and emerging markets, coal is the fuel of choice for power generation, at least for the foreseeable future. While efforts are underway to reduce coal consumption in countries like China and India, the world's two largest importers, they currently both utilize coal for some 70 percent of their power production.

In a report issued late last year by the International Energy Agency, Keisuke Sadamori, the agency's Director of Energy Markets and Security Directorate noted: "Because of the implications for air quality and carbon emissions, coal has come under fire in recent years, but it is too early to...