The economic downturn in the United States has caused coal production nationwide to decline by 7 percent in 2009 through Oct. 31, compared to the similar time period in 2008, according to the Energy Information Administration.

Bucking this trend, however, is coal production in the Illinois Basin, where more tons of coal are being mined in Illinois, Indiana and western Kentucky than in 2008. This trend is very likely to continue in Illinois, where construction of new mines and approval of mine permits now under review could result in a resurgence in coal production that could exceed the 1990 level within five years.

The Clean Air Act Amendments of 1990, with its limits on sulfur dioxide emissions, was a knockout punch to the Illinois coal industry. Nearly all coal-burning power plants in Illinois switched to the lower-sulfur Western coal instead of installing scrubbers. With high-sulfur coal out of favor, coal production began a 13-year decline, from nearly 62 million tons in 1990 to the all-time low of 31 million in 2003 (see chart).

The economic impact in rural, southern Illinois was devastating, as mining employment dropped from 10,000 workers to 3,500 when more than half the mines closed. Coal production since 2003 has remained in the 32 million ton range despite the net loss of one mine.

Given this gloomy recent production performance, what causes the optimism for the future of Illinois coal?

One of the main factors is Illinois remains the Saudi Arabia of coal. With about 100 billion tons of recoverable coal, according to the Illinois State Geological Survey, Illinois has about 25 percent of the nation's bituminous coal reserves.

These reserves are attracting the attention of coal operators as new markets for Illinois coal appear to be emerging. These markets are:

• Coal-burning power plants in Eastern United States that are installing scrubbers.
• Coal gasification projects in the state (led by FutureGen, there are currently five projects in various stages of the planning phase).
• Exports to foreign countries.

These are strong markets for high-sulfur, but low-cost, Illinois coal. These factors have led to a large increase in permit applications to state regulatory agencies with jurisdiction over coal mining over the past few years.

Currently there are three underground mines under construction that will produce more than 20 million tons per year when fully operational in 2011. Two of these mines are part of the Cline Group. The Sugar Camp Mine in Franklin County and Deer Run Mine in Montgomery County are longwall operations, each scheduled to produce seven to nine million tons annually.

The third is the Lively Grove Mine, the six million tons per year coal source for the Prairie State Generating Company's 1,600 MW power plant now under construction at the mouth of the mine in Washington County. By the way, the Prairie State power plant/coal mine construction project is one of the largest in the United States, currently employing nearly 2,500 construction workers.

In addition to these projects under construction, the Office of Mines and Minerals currently has at least eight permit applications in various stages of review. The projected coal production from these mine applications totals nearly 35 million tons per year. Some of these permits are expected to be approved in 2010, so new construction could start next year if market conditions continue to hold.

Unfortunately, many of the pending permits are dependent on the outcome of climate change legislation being considered in Congress. Any cap and trade program that begins before carbon capture and storage technology can be successfully commercially deployed will cause a negative impact on coal production, even in Illinois.

So as it stands right now, the Illinois coal industry is poised for a big comeback. We in Illinois are excited at the prospect of creating new, good-paying jobs that will help to produce low-cost energy, thereby providing a significant economic impact to both the state and the nation.




Illinois Coal Production For Selected Years

Year          Tons in Millions            Mines
1985                  60.5                             52
1990                  61.7                             42
1995                  49.5                             28
2000                  33.5                            18
2003                  31.6                             20
2008                  32.9                            18
2009                  33.7                            19