Coal Information

Coal Takes Millions of Years To Create

Coal is a combustible black or brownish-black sedimentary rock composed mostly of carbon and hydrocarbons. lt is the most abundant fossil fuel produced in the United States.

Coal is a non-renewable energy source bcause it takes millions of years to create. The energy in coal comes from the energy stored by plants that lived hundreds of millions of years ago, when the Earth was partly covered with swampy forests.

For millions of years, a layer of dead plants at the bottom of the swamps was covered by layers of water and dirt, trapping the energy of the dead plants. The heat and pressure from the top layers helped the plant remains turn into what we today call coal.

Coal Formation Picture
Source: National Energy Education Development Project (Public Domain)

Types of Coal

Coal is classified into four main types, or ranks (anthracite, bituminous, subbituminous, and lignite), depending on the amounts and types of carbon it contains and on the amount of heat energy it can produce. The rank of a deposit of coal depends on the pressure and heat acting on the plant debris as it sank deeper and deeper over millions of years. For the most part, the higher ranks of coal contain more heat-producing energy.

Anthracite contains 86-97% carbon, and generally has a heating value slightly higher than bituminous coal. It accounts for less than 0.5% of the coal mined in the United States.

All of the anthracite mines in the United States are located in North-eastern Pennsylvania.

Bituminous coal contains 45-86% carbon. Bituminous coal was formed under high heat and pressure. Bituminous coal in the United States is between 100 to 300 million years old. It is the most abundant rank of coal found in the United States, accounting for about half of U.S. coal production. Bituminous coal is used to generate electricity and is an important fuel and raw material for the steel and iron industries.

West Virginia, Kentucky, and Pennsylvania are the largest producers of bituminous coal.

Sub-bituminous coal has a lower heating value than bituminous coal. Sub-bituminous coal typically contains 35-45% carbon. Most sub-bituminous coal in the United States is at least 100 million years old. About 46% of the coal produced in the United States is sub-bituminous.

Wyoming is the leading source of sub-bituminous coal.

Lignite is the lowest rank of coal with the lowest energy content. Lignite coal deposits tend to be relatively young coal deposits that were not subjected to extreme heat or pressure, containing 25%-35% carbon. Lignite is crumbly and has high moisture content. There are 19 lignite mines in the United States, producing about 7% of U.S. coal.

Most lignite is mined in Texas and North Dakota. Lignite is mainly burned at power plants to generate electricity.

Benefits of Coal

Coal has an important role to play in meeting the demand for a secure energy supply. Coal is abundant and widespread. It is present in almost every country in the world with commercial mining taking place in over 50. Coal is the most abundant and economical of fossil fuels. At current production levels coal will be available for at least the next 118 years - compared to 46 years for oil and 59 years for gas. Indigenous coal resources enable economic development and can be transformed to guard against import dependence and price shocks.

Coal is also readily available from a wide variety of sources in a well-supplied worldwide market. It can be transported to demand centres quickly, safely and easily by ship and rail. A large number of suppliers are active in the international coal market, ensuring competitive behaviour and efficient functioning. Coal can also be easily stored at power stations and stocks can be drawn on in emergencies. Unlike gaseous, liquid or intermittent renewable sources, coal can be stockpiled at the power station and stocks drawn on to meet demand.

Coal is also an affordable source of energy. Coal prices have historically been lower and more stable than oil and gas prices and it is likely to remain the most affordable fuel for power generation in many developed and industrialising countries for several decades.

Coal-based electricity is well-established and highly reliable. Over 41% of global electricity is currently based on coal. The generation technologies are well-established and technical capacity and human expertise is widespread. Ongoing research activities ensure that this capacity is continually being improved and expanded, facilitating innovation in energy efficiency and environment performance.

Coal can also be used as an alternative to oil. The development of a coal to liquids industry can serve to hedge against oil-related energy security risks. Using domestic coal reserves, or accessing the relatively stable international coal market, can allow countries to minimise their exposure to oil price volatility while providing the liquid fuels needed for economic growth.

Use of Coal

About 93% of the coal used in the United States is used for generating electricity. Except for a small amount of exports, the rest of the coal is used as a basic energy source in many industries including steel, cement, and paper. The major uses of coal are:

For Electricity Power

Coal is used to create almost half of all electricity generated in the United States. Power plants burn coal to make steam. The steam turns turbines (machines for generating rotary mechanical power) that generate electricity.

In addition to companies in the electric power sector, industries and businesses with their own power plants use coal to generate electricity.

For Industry

A variety of industries use coal's heat and by-products. Separated ingredients of coal (such as methanol and ethylene) are used in making plastics, tar, synthetic fibers, fertilizers, and medicines.

Coal is also used to make steel. Coal is baked in hot furnaces to make coke, which is used to smelt iron ore into iron needed for making steel. It is the very high temperatures created from the use of coke that gives steel the strength and flexibility for things like bridges, buildings, and automobiles.

The concrete and paper industries also use large amounts of coal.

Coal Mining and Transportation

Coal miners use giant machines to remove coal from the ground. They use two methods: surface or underground mining. Many U.S. coal beds are very near the ground's surface, and about two-thirds of coal production comes from surface mines. Modern mining methods allow us to easily reach most of our coal reserves. Due to growth in surface mining and improved mining technology, the amount of coal produced by one miner in one hour has more than tripled since 1978.

Surface mining (including mountain top removal) is used to produce most of the coal in the United States because it is less expensive than underground mining. Surface mining can be used when the coal is buried less than 200 feet underground.

In surface mining, giant machines remove the top soil and layers of rock known as "overburden" to expose the coal seam. Once the mining is finished, the dirt and rock are returned to the pit, the topsoil is replaced, and the area is replanted.

Underground mining, sometimes called deep mining, is used when the coal is buried several hundred feet below the surface. Some underground mines are 1,000 feet deep. To remove coal in these underground mines, miners ride elevators down deep mine shafts where they run machines that dig out the coal.

Processing the Coal

After coal comes out of the ground, it typically goes on a conveyor belt to a preparation plant that is located at the mining site. The plant cleans and processes coal to remove other rocks and dirt, ash, sulfur, and unwanted materials, increasing the heating value of the coal.

Transporting the Coal

After coal is mined and processed, it is ready to be shipped to market. The cost of shipping coal can cost more than the cost of mining it.

About 71% of coal in the United States is transported, for at least part of its trip to market, by train. Coal can also be transported by barge, ship, truck, and even pipeline.

It is often cheaper to transport coal on river barges, but barges cannot take coal everywhere that it needs to go. If the coal will be used near the coal mine, it can be moved by trucks and conveyors. Coal can also be crushed, mixed with water, and sent through a "slurry" pipeline. Sometimes, coal-fired electric power plants are built near coal mines to lower transportation costs.

Coal Prices and Outlook

"Coal News and Markets Report" summarizes spot coal prices by coal commodity regions (i.e., CentralAppalachia (CAP), Northem Appalachia (NAP), lllinois Basin (lLB), Power River Basin (PRB), and Uinta Basin (UlB)) in the United States. The report includes data on average weekly coal spot market prices, average weekly coal commodity spot prices, monthly coal production, Eastern coal production trends, and average cost of metallurgical coal al coke plants and export docks. The historical data for coal commodity spot market prices are proprietary and not available for public release.



Transportation Costs Can be Significant

Once coal is mined, it must be moved to where it will be consumed. Transportation costs add significantly to the delivered price of coal. In some cases, as in long-distance shipments of Wyoming coal to power plants in the East, transportation costs can be more than the price of coal at the mine.

Most coal is transported by train, barge, truck or a combination of these methods. All of these transportation methods use diesel fuel and so increases in oil prices can significantly affect the cost of transportation and, in turn, the final delivered price of coal.

In 2009 the average sales of coal at the mine was $33.24 per ton and the average delivered price to electric utility power plants was $44.47 per ton, roughly implying a transportation cost of $11.23 per ton, or 25% of the total delivered price.

Most Coal Is Purchased for Power Plants

Over 90% of the coal consumed in the United States is used to generate electricity. The electricity produced from that coal accounts for almost half of all of our electricity.

Since 1976, coal has been the least expensive fossil fuel used to generate electricity when measured based on the cost per Btu (a unit of energy content). Although the cost of generating electricity from coal has increased, it is still lower than generating electricity from either natural gas or petroleum in most areas.

The Price of Coal Can Depend on the Type of Transaction

The majority of coal sold for electric power generation is through long-term contracts, in conjunction with spot purchases to supplement the demand. A "spot purchase" is a single shipment of fuel or multiple shipments purchased for delivery within one year. Spot prices can fluctuate based on short-term market conditions, while contract prices tend to be more stable.

In 2009, the average delivered price of coal to power plants was $44.47 per ton for coal sold under contracts and the average spot price was $52.07.

A More Expensive Coal Is Used To Make Iron and Steel

In addition to producing electricity, coal is also used to produce coke, which is used in smelting iron ore to make steel.

Coke is made by baking certain types of coal in special high-temperature ovens without contact with air until almost all of the impurities are driven off as gases. The resulting product, coke, consists principally of carbon. Coal used to make coke must be low in sulfur and requires more thorough cleaning than coal used in power plants and so is priced higher.

In 2010, the delivered price of coal used to make coke was $153.59 per ton - more than twice as much as the price of coal delivered to power plants.

Content Source: U.S. Energy Information Administration - http://www.eia.gov/