Market News

 May 02, 2013
Illinois coal enjoyed record exports in 2012

 Illinois' abundant high-sulfur coal once shunned as a pollution source by U.S. utilities saw record demand oversees last year even as domestic coal providers broadly curtailed production as cheaper, competing natural gas crimped their sales, according to new report Wednesday.

Energy Ventures Analysis Inc.'s study, commissioned by the Illinois Office of Coal Development, found that 13 million tons of Illinois coal was exported last year, up from the 2.5 million tons in 2010 and the 5.5 million tons in 2011. Over the past two years, the report found, ore made its way to at least 18 countries, most notably China and other Asian countries where demand for coal has been ravenous.

Rising four spots since 2009 to become the nation's fifth-biggest coal-producing state, Illinois last year churned out 47.2 million tons of the natural resource, up 25 percent from 37.8 million tons the previous year. That surge came as U.S. coal production slumped 11 percent overall, as stubbornly soft demand --- partly because U.S. electric utilities switched to cheaper natural gas as their fuel source --- drove down coal prices and consumption.

Illinois officials attribute the increase in overseas demand for the state's coal to its wealth of it from its place in the resource-rich Illinois Basin, which also includes portions of Indiana and Kentucky. Illinois has the nation's biggest reserves of coal used in electricity generation and to heat large boilers and industrial furnaces, Wednesday's report noted.

Illinois' proximity to key shipping routes such as the Ohio and Mississippi rivers to get the coal to the Gulf of Mexico, along with coal producers' easy access to Illinois highways and rail lines, give the state "a unique export advantage over other states in the region," Gov. Pat Quinn said in a statement.

Illinois' coal production, which peaked in 1918 at 89 million tons and a work force of more than 100,000, took a beating in the 1990s after the federal Clean Air Act required coal-fired power plants to either burn low-sulfur coal or install costly "scrubbers" to curb the emission of sulfur dioxide, a cause of acid rain.

To meet those new requirements, Midwestern plants found it cheaper to import low-sulfur coal from Western states like Wyoming. In Illinois, an industry that produced 60 million tons of coal and boasted more than 10,000 jobs in 1990 plunged to 33 million tons and fewer than 3,500 workers just a decade later as many of the mines closed.

But Illinois in recent years has enjoyed a coal comeback, partly because U.S. coal-fired power plants increasingly have added more efficient anti-pollution technology capable of handling such high-sulfur coal and still being compliant with emission regulations, the federal Energy Information Administration reported last November.

The Office of Coal Development is a division of the Illinois Department of Commerce and Economic Opportunity.