rick axthelm vice president, federal government & external ...africa/middle east: 2.1mm tons met...
TRANSCRIPT
Rick Axthelm Vice President, Federal Government & External Affairs Alpha Natural Resources
Statements in this presentation which are not statements of historical fact are “forward-looking statements” within the
Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of
future performance. Many factors could cause our actual results, performance or achievements, or industry results, to be
materially different from any future results, performance or achievements expressed or implied by such forward looking-
statements. These factors are discussed in detail in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
in our other filings with the SEC. We make forward-looking statements based on currently available information, and we
assume no obligation to update the statements made today or contained in our Annual Report or other filings due to
changes in underlying factors, new information, future developments, or otherwise, except as required by law.
Third Party Information
This presentation, including certain forward-looking statements herein, include information obtained from third party
sources that we believe to be reliable. However, we have not independently verified this third party information and
cannot assure you of its accuracy or completeness. While we are not aware of any misstatements regarding any third
party data contained in this presentation, such data involve risks and uncertainties and are subject to change based on
various factors, including those discussed in detail in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and in our other filings with the SEC. We assume no obligation to revise or update this third party information to reflect
future events or circumstances.
Forward-Looking Statements
A Few Coal Factoids
The U.S. has the largest recoverable coal reserves in the world –
more than 25 percent of all estimated global reserves, containing more
energy than all the world’s oil reserves.
Coal is mined in 25 states and accounts for about 200,000 direct
jobs. Each of those jobs creates 3.5 more jobs indirectly.
The average coal miner earns over $81,000 annually… $36,000 more
than the average U.S. worker.
Coal is responsible for roughly 40 percent of all electricity
generation in the United States.
Almost 70% of total global steel production depends on coal.
Over the course of a year, coal from just one surface mine in
Wyoming provides more energy than all the windmills and solar panels
in the entire U.S.
Alpha Overview
● Second largest U.S. coal supplier by revenue; among top 5 globally in production;
● America’s largest producer of metallurgical coal (70% of the world’s steel is made using met coal);
● 170 customers on 5 continents;
● More capacity to export coal overseas than any other U.S. supplier;
● Signature Running Right® operating philosophy – guides all aspects of how we do business, from safety to environmental stewardship.
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Natural Stream Restoration
Russell County, Va. Restored Paramont surface mine
Wise County, Va.
Restored Paramont
George’s Fork surface mine
Dickenson County, Va.
www.truthaboutsurfacemining.com
Alpha Is Environmentally Responsible
Alpha Is Operationally Diversified
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Western Coal Operations – FY 2013
38 Million Tons Thermal
Eastern Coal Operations –
FY 2013
29 Million Tons Thermal
20 Million Tons Met
Total Mines (as of 12/31/13): 81
Prep Plants & Loadouts (as of 12/31/13): 25
Alpha Is a Leading Global Supplier
Belgium
Brazil
Romania
Canada
France
Egypt
Sweden
Netherlands
Ukraine
Spain Turkey
United Kingdom
Sandusky, OH
Conneaut, OH
Newport News, VA
Lambert’s Point/Norfolk, VA
Baltimore, MD
Ashtabula, OH
Russia
New Orleans, LA
Argentina
Mexico
Finland
India
Japan
South Africa
China
Austria
Italy
Poland
Hungary Germany
Europe:
6.8mm tons Met
2.6mm tons Thermal
South America:
1.3mm tons Met
0.1mm tons Thermal
Asia:
3.6mm tons Met
0.3mm tons Thermal
Africa/Middle East:
2.1mm tons Met
1.6mm tons Thermal
South Korea
2013 Total Alpha shipments: 87 million tons
2013 Total Export shipments: 19 million tons
2013 Export Shipments:
19.5mm tons Total
14.9mm tons Met
4.6mm tons Steam
~170 Customers in 29 Countries on 5 Continents
Canada/Mexico:
1.1mm tons Met
Note: All amounts represent full year 2013 shipments in short tons
Coal Demand is Still Growing Robustly…
Source: Platts
For Steam Coal
Source: World Resources Institute
2014 Regulatory Agenda Impacting Coal
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PRODUCTION Agency January February March April May June July August September October November December
Federal Coal Lease Modifications BLM FINAL
Federal Coal Value--Advance Royalties ONRR PROPOSED
Lignite Exemption under Section 4121 Treasury PROPOSED
Sage Grouse Listing FWS FINAL
Stream Buffer Zone OSMRE PROPOSED
Toxic Release Inventory EPA PROPOSED
Waters of the United States EPA PROPOSED
SAFETY Agency January February March April May June July August September October November December
Black Lung Benefits Act--Standards for Chest Radiographs OWCP FINAL
Combustible Dust OSHA PROPOSED
Occupational Exposure to Crystalline Silica OSHA PROPOSED
Proximity Detection for Continuous Mining Machines MSHA FINAL
Proximity Detection for Mobile Machines MSHA PROPOSED
Refuge Alternatives MSHA FINAL
Respirable Crystalline Silica MSHA FINAL
Respirable Mine Dust MSHA FINAL
Response to Recs from UBB Investigation MSHA INFO REQUEST
COAL USE Agency January February March April May June July August September October November December 2008 Ozone National Ambient Air Quality Standards (NAAQS) EPA FINAL
2012 Particulate Matter NAAQS implementation EPA FINAL
Coal Combustion Residue OSMRE PROPOSED
Cooling Water Intake Structures EPA FINAL
Effluent Limitations Guidelines for Steam Electrical Power Plants EPA FINAL
GHG Standards for Existing Power Plants EPA PROPOSED
GHG Standards for Modified Power Plants EPA PROPOSED
GHG Standards for New Power Plants EPA PROPOSED Final
Social Cost of Carbon OMB COMMENTS
Source: Office of Information and Regulatory Affairs’ (OIRA) semiannual
“Unified Agenda of Federal Regulatory and Deregulatory Actions”
WATER
INFRASTRUCTURE • REGULATION: Attempts to add GHG Analysis to Permit Approvals for Port Capacity Projects
• LEGISLATION: 402/404 CWA Permit Reforms (Introduced)
OTHER
• REGULATION: Stream Protection Rule (Expected)
• REGULATION / LEGISLATION: Coal Ash Disposal (Proposed / Introduced)
• REGULATION: Selenium Rule (Expected)
SAFETY
AIR
• REGULATION: GHG New Source Performance Standards for New Units (Proposed)
• REGULATION: GHG New Source Performance Standards for Existing Units (Expected)
• LEGISLATION: Whitfield / Manchin NSPS Reforms (Introduced)
• REGULATION: Underground Coal Mine Respirable Dust Rule (Proposed)
• REGULATION: Pattern of Violations (POV) Rule (Final)
• LEGISLATION: Mine Safety Reforms (Expected to be Reintroduced)
• LEGISLATION: Comprehensive Tax Reform
• LEGISLATION: Possible Climate legislation, or Push for a “Carbon Tax”
KEY Regulations and Legislation on the Horizon
0
5
10
15
20
25
30
35
2011 2012 2013 2014 2015 2016-2020
GW
, M
illio
n T
ons
Retirements (GW) Calculated Lost Coal Consumption (mm tons)
Sources: SNL, EIA, Internal Analysis
From 2011 to 2020, approximately 42,000 MW of coal-fired capacity in 38 states has been retired or announced for retirement;
About 83%, or 35,000 MW, of the announced coal retirements is in the Eastern U.S.
The Toll on Our Grid? Idled Plants and Less Coal Use
Potential Impact: An additional 50-100 mm displaced coal tons
The Human Toll? Idled Mines and Lost Jobs
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• More than 150 coal
mines idled in the
first half of 2013;
• Those mines
employed 2,650+
workers;
• Coal production in
central App
declined 43% from
2008 levels;
• Kentucky coal mine
employment lowest
since 1920s.
Source: SNL
So, if Not Coal, then What?
In Review… DID YOU KNOW?
www.alphanr.com
Questions?
C o a l - I m p a c t e d C o u n t i e s R o u n d t a b l e
M a r c h 2 , 2 0 1 4
P a u l B a i l e y
A m e r i c a n C o a l i t i o n f o r C l e a n C o a l E l e c t r i c i t y
C H A L L E N G E S F A C I N G
C O A L - B A S E D E L E C T R I C I T Y
C O A L F L E E T
• 3 1 8 , 0 0 0 M W
• R e s p o n s i b l e f o r 3 9 % o f e l e c t r i c i t y d u r i n g 2 0 1 3
• 6 2 , 0 0 0 M W h a v e a n n o u n c e d r e t i r e m e n t b y 2 0 2 5
• $ 1 4 5 b i l l i o n i n v e s t e d b y 2 0 1 6 t o r e d u c e e m i s s i o n s
• S O 2 , N O x , P M r e d u c e d b y 9 0 % p e r k W h
C O A L R E T I R E M E N T S I N 3 3 S T A T E S L I N K E D T O E P A P O L I C I E S
R e t i r e m e n t s
C A R B O N E M I S S I O N S
• U . S . e l e c t r i c s e c t o r h a s r e d u c e d e m i s s i o n s b y
1 6 % .
• C o a l f l e e t e m i s s i o n s h a v e d e c l i n e d b y a l m o s t
2 4 % f r o m 2 0 0 5 l e v e l s .
• E I A p r o j e c t s e m i s s i o n s f r o m c o a l f l e e t w i l l b e
1 9 % b e l o w 2 0 0 5 l e v e l s i n 2 0 2 0 .
I M P A C T S O F E P A R E G U L A T I O N S
• C o m p l i a n c e c o s t s o f $ 1 9 8 b i l l i o n t o $ 2 2 0 b i l l i o n
• J o b l o s s e s o f 5 4 4 , 0 0 0 t o 8 8 7 , 0 0 0 p e r y e a r
• C o a l r e t i r e m e n t s o f 5 4 , 0 0 0 M W t o 6 9 , 0 0 0 M W
N S P S
• R e p r o p o s a l - - J a n u a r y 2 0 1 4
• F i n a l r u l e - - T B D
• R e q u i r e s n e w c o a l p l a n t s t o u s e C C S
• M a k e s n e w c o a l p l a n t p r o h i b i t i v e l y e x p e n s i v e
• N S P S s h o u l d b e b a s e d o n s u p e r c r i t i c a l a n d u l t r a -
s u p e r c r i t i c a l u n i t s
S E C T I O N 1 1 1 ( D ) R E Q U I R E M E N T S
• P r o p o s e d E PA g u i d e l i n e s – J u n e 2 0 1 4
• F i n a l E PA g u i d e l i n e s – J u n e 2 0 1 5
• S t a t e p l a n s d u e – J u n e 3 0 , 2 0 1 6
• E PA a p p r o v a l / d i s a p p r o v a l – O c t o b e r 3 0 , 2 0 1 6
• E PA c o n s i d e r i n g “ s o u r c e - b a s e d ” a n d “ s y s t e m -
b a s e d ” a p p r o a c h e s
I M P A C T S O F A S Y S T E M - B A S E D P R O P O S A L
• C o n s u m e r c o s t s … . $ 1 1 6 b i l l i o n t o $ 1 5 1 b i l l i o n
• C o a l r e t i r e m e n t s … . 3 5 , 0 0 0 M W t o 8 3 , 0 0 0 M W
• N a t u r a l g a s e x p e n d i t u r e s … . $ 8 b i l l i o n t o $ 5 4 b i l l i o n
• J o b l o s s e s ( a n n u a l ) … . 1 , 0 0 0 t o 1 7 8 , 0 0 0
• E l e c t r i c i t y p r i c e i n c r e a s e s … . D o u b l e d i g i t s
49
11.4 6.7
1.5 0
10
20
30
40
50
60
G l o b a l G H G C h i n a & I n d i a C O 2 U . S . G H G U . S . C o a l C O 2
G H G E M I S S I O N S ( b i l l i o n t o n n e s / y r )
S E T T I N G 1 1 1 ( D ) S T A N D A R D S
• E s t a b l i s h i n s i d e - th e - f e n c e s t a n d a r d s b a s e d o n w h a t i s a c h i e v a b l e a t e a c h c o a l - f i r e d a n d g a s -f i r e d u n i t .
• O n c e i n s i d e - t h e - f e n c e s t a n d a r d s a r e s e t , a l l o w ou t s i d e - t h e - f e n c e f l e x i b i l i t y t o c o m p l y
Q U E S T I O N S ?
Partnership for a Better Energy Future
March 2, 2014 - Washington, D.C.
Major Partners
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Campaign Objectives
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1. Educate and mobilize elected and public officials to
call for the expansion of public comment.
2. Engage elected and public officials and stakeholders in taking action that will promote industry carbon regulation principles.
3. Conduct public affairs activities to earn media and build support for litigation efforts on 111(d) carbon regulations.
Targeted States
33
Target States
Tactical Activities
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• Model legislation • State coalitions • State legislative hearings • State resolutions • Governors’ letters
• Attorneys General • Utility commissioners • Environment and air
quality officials • Democrat letters
You are essential to success!
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1. Understand the policy issues and process
2. Participate in targeted state efforts
• Support Partnership activities
• Leverage your relationships and resources
3. Educate and advocate in non-target states