Illinois, Indiana, and western Kentucky, which combine to form the Illinois Coal Basin (IB), are experiencing a long-awaited resurgence of their coal mining industry.
The Illinois Basin is the second largest area of proven coal reserves in the United States. The return of a booming IB coal industry could result in the building of a number of GTL (gas-to-liquids) plants. GTL technology converts coal deposits into synthetic crude oil or clean synthetic diesel fuel. Using the IB coal to create synthetic diesel or crude oil has the added bonus of increasing Illinois’s and the United States’ use of a domestic alternative energy source.
The IB coal industry saw tough times in previous years after the enactment of the 1990 Clean Air Act Amendments, which reduced the amount of sulfur dioxide that fossil fuel electric generating plants could produce. Realizing that coal lower in sulfur than that found in the IB could be mined in the area spanning southeast Montana and northeast Wyoming known as the Powder River Basin (also the largest coal reserve in the nation), many companies moved west to take advantage of that region’s resources.
This western shift heavily impacted the Illinois coal industry, with approximately 20 mines shutting down and production falling from 60.4 million tons extracted in 1990 to 31.5 million tons in 2003. According to the Illinois State Geological Survey (ISGS), more than 211 billion tons of coal resources can be found underneath the state, and of that amount, 112 billion tons comprise a demonstrated reserve base. ISGS also estimates that Illinois coal holds more BTUs (British thermal units of energy) than the combined oil reserves of Saudi Arabia and Kuwait. Despite these large reserves, burning this high-sulfur coal cleanly enough to meet environmental regulations is expensive, and companies chose to overlook this vast resource.
However, in the past year, legislation that requires power plants to install flue gas desulfurization equipment (scrubbers) has been implemented. With utilities now having to scrub anyway, the high-sulfur content of Illinois coal is becoming appealing for companies seeking to buy coal on a cost-per-BTU basis because it is a higher energy coal source and provides more energy generating capacity. Also, while it may be more expensive to scrub the higher-sulfur coal, the costs to transport it within the South and Midwest are lower than coal mined in the Powder River Basin. In addition, future energy demands, new technology, and high natural gas prices could once again make Illinois coal a key energy resource.
The U.S. Geological Survey and the Illinois Basin Consortium have partnered in hopes to advance the geological understanding of the IB and its resources, and the forecast for Illinois coal mining looks promising. Almost a dozen power plants are in the planning stages, and Peabody Energy, the largest coal producer in the United States, has opened four new mines in Illinois in the last 5 years and is proposing future large mine projects.
In September 2005, Illinois Governor Rod R. Blagojevich declared almost $15 million in Opportunity Returns grants to coal-related projects. The grants will help fund the opening of a new mine in southern Illinois, expand existing mines, and add new mining jobs.