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article imageU.S. power plant turns to Russia for coal

By Karen Graham     Jul 17, 2014 in Business
Power companies are now feeling the economic affects of this past winter's freezing temperatures, so much so that when New Hampshire's largest utility needed to replenish its coal supplies, they looked to Russia rather than Wyoming or Appalachia.
The Public Service of New Hampshire owns and operates Schiller Station in Portsmouth, New Hampshire. The plant sits on the western bank of the Piscataqua River which borders Maine and New Hampshire. All three units at Schiller were set up to originally burn oil, but in 1980, units 4, 5, and 6 were converted to burn both low-sulfur coal and oil, with Unit #5 being replaced by a wood-fueled generator in 2006.
American utility companies are scrambling for low-sulfur coal, with imports expected to increase 26 percent this year. The experts say this is because of several factors, one being a major bottleneck in rail deliveries in this country. An improving economy along with increasing demands on the electrical grid are also important indicators.
To this end, Russia, the world's third largest exporter of fuel plans on increasing their exports of low-sulfur coal 3.9 percent to 109 million metric tons this year. Last month, the Doric Victory, a two-football-fields-in-length bulk carrier, made the 4,000-mile trip from Riga, Latvia to Portsmouth, New Hampshire.
"Everyone’s aware that a number of plants have low stockpiles, so you hear Russian coal and they say, ‘Oh wow, people must really be desperate,’” James Stevenson, Houston-based director of North American coal at IHS, said in a July 8 telephone interview with Bloomberg.
While the New Hampshire utility refused to say how much coal was purchased, a bill of lading showed that 38,500 metric tons of "steam coal" were delivered. “A shipment of coal was contracted from Russia that met our operational and economic needs,” was all the utility was willing to say in an email.
In 2006, Unit #5 at Schiller was replaced with a wood-fueled electricity generator. As late as 2008, Schiller was getting their coal supplies from Columbia, the U.S. and Venezuela. The company said they were buying a total of 400,000 tons of coal a year. They said by converting one unit to a wood-fueled generator, they would reduce their dependence on coal.
It is interesting to note that the wood-fueled generator was touted as being able to produce enough electricity to power 50,000 homes, while reducing the use of coal by one-third, or 130,000 tons annually. But, in 2008, two years after Unit #5 was put into operation, Schiller Station burned 421,670 tons of coal.
Coal production in the U.S. for the past two years has centered on four of the nation's largest coal companies, responsible for over 50 percent of total production numbers. They are as follows, Peabody Energy Corporation, Arch Coal Inc., Alpha Natural Resources LLC, and Cloud Peak Energy. These four companies supplied 575 million tons, or 52 percent of total U.S. coal production. The remaining 48 percent was handled by about 500 smaller coal producers scattered around the country.
Even though the top four list has changed from time to time, it has become consolidated because of the expansion of mines in the Powder River Basin in the western United States. Here is where things can get a little sticky. According to the EPA, if a power plant is going to use a high-sulfur coal, they must install smokestack scrubbers that trap Sulfur-dioxide emissions before they can escape into the atmosphere. It is a costly process, and for this reason, many power plants will burn low-sulfur coal to get around the requirements.
But low-sulfur coal is much more expensive, yet it can reduce SO2 emissions by about 85 percent. Coal from the eastern states including Ohio, Pennsylvania, and West Virginia has higher sulfur content, accounting for 3.0 percent of its weight. Coal from western states like Wyoming, Montana, Utah, and Colorado can have sulfur content is less than 1 percent of its weight.
More about New hampshire, Schiller Power, increased electric demand, Imports, less sulfur
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