Published in August 2005 American Longwall Magazine

Blessed with more recoverable bituminous coal than any US state, Illinois was once a major coal producer, peaking at 90 million tons annual output 50 years ago.

But since the 1990 introduction of the Clean Air Act Amendments, which limited the sulfur dioxide emissions allowed from power generation plants, coal mining in Illinois has been in the doldrums. Given the relatively high sulfur content in Illinois coal the state’s coal mining industry was virtually decimated.

As power plant owners switched to lower sulfur western coal, Illinois coal production fell 50%, dozens of operations were closed and mine employment tumbled 65%.

Today some 20 surviving mines - 13 underground operations - produce 32Mt (2004 figures) but only 18% of that coal is used by Illinois utilities. The rest feeds power plants in other states such as Tennessee and Florida.

American Coal Company’s Galatia longwall mine is the state’s largest underground operation with 748 employees and an annual production of 6.5Mt (2004). With 65% of Illinois underlain by bituminous coal in two major seams, the Herrin No. 6 seam and the Springfield No. 5 seam, estimated recoverable reserves for the state total 38.040 billion tons … plenty of motivation to get the mining industry vibrant again.

In an attempt to generate a resurgence of coal mining in Illinois and reduce dependence on foreign energy sources, the state has been at the forefront of research for clean coal technology developments and programs to encourage communities and businesses to improve the coal extraction, preparation and transportation systems within Illinois.

Since its inception, the Office of Coal Development, part of the Illinois Department of Commerce and Economic Opportunity (DCEO), has awarded 285 infrastructure grants to projects related to coal production, transportation and utilization facilities, worth around $112 million.

In June, Illinois governor Rod Blagojevich signed three significant pieces of legislation underpinning his vision of developing a cutting edge energy plan for the state.

Public Act 094-0066 (PA), to take effect in January 2006, gives coal producers more flexibility to recycle coal combustion waste to make products such as concrete blocks and road paving materials. PA 094-0065 makes new gasification facilities that generate chemical feedstocks or transportation fuels derived from coal eligible for tax and financing incentives through the Illinois Coal Revival Program.

The most crucial piece of the new legislation, PA 094-0063, which took effect immediately, supports development of coal gasification facilities that will produce synthetic natural gas (SNG).

PA 094-0063 aims to develop new markets for Illinois coal by encouraging its conversion to SNG and could open up as many as 10-15 coal mines with coal reserves containing high levels of sulfur.

The legislation sets a price for SNG between 18-30% cheaper than conventional natural gas, potentially offering significant cost savings to consumers.

To further attract project financing for SNG facilities, the legislation permits gas utilities to enter into 20-year supply contracts with any SNG producer using Illinois coal.

Several projects already being discussed stand to benefit from the legislation that moves away from seeing coal purely in terms of power generation feedstock.

“Because the utility industry in Illinois is deregulated, developers can’t pass on the cost of building new power plants to the rate payers,” Office of Coal Development. chief Bill Hoback said.

“There are all these old power plants that use western coal rather than put on scrubbers to stay in compliance. Unless they absolutely have to build new power plants, they’re not going to. And because power prices are deregulated, we see more potential in developing chemicals like Fisher-Tropsch (F-T) derived products from coal, as opposed to just electric power. That is why we are focusing on the chemical side using F-T technology instead of dealing with a deregulated industry.”

The Fischer-Tropsch process converts coal into synthetic gas, a mixture of predominantly carbon dioxide and hydrogen, by either partial oxidation or steam reforming processes.

While efforts to revive the industry have not yet delivered a major turnaround, the future is promising.

In June, Kentucky-based mining company Clean Coal Power Resources paid $5.5 million for the rights to 159,000 acres of Fayette County coal, approximately 70 miles east of St Louis, Missouri.

Clean Coal Power Resources, which originally signed a 99-year lease deal for the coal rights in 2002, is believed to be planning a multi-longwall mining complex, producing around 17Mtpa. The coal will be used to produce power, using IGCC technology, and synthetic low-sulfur diesel fuel.

Steelhead Energy Company, LLC is developing a 545MW coal gasification production facility in Williamson County near the planned Steelhead underground coal mine. A conventional power plant was originally planned but the owners are now planning to undertake gasification and use potentially 2.8Mt of Illinois coal per year. Up to 95 million standard cubic feet per day of natural gas could be generated.

The company, linked with Cline Resources, obtained a mining permit in early-July and has started preparation work to develop the mine where the now-closed Zeigler No. 4 Mine was located.

Steelhead sold the reserves to in July to Natural Resource Partners, which were then leased to Williamson Energy, also a Cline affiliate.

DCEO has invested $3 million in the Royster-Clark Nitrogen project that aims to use coal as its feedstock instead of natural gas to produce fertilizer, the first plant of its kind to produce ammonia fertilizer together with clean diesel and electricity using ultra-clean coal technology and Illinois coal.

Coal gasification will produce ammonia for fertilizer, Fischer-Tropsch diesel and electric power. More than 200 coal mining jobs will be created.

Converting the Royster-Clark plant feedstock to price-stable, abundant coal eliminates dependence on the volatile natural gas market and will reduce operating expenses.

Peabody Energy, which has closed seven of its Illinois mines since 1989, has reestablished its presence in the state with the $1.5 billion development of its Prairie State Energy Campus, which will include a 6Mtpa coal mine and a 1500MW power plant, south-east of St Louis in Washington County.

Although the facility will use pulverized coal with state-of-the-art post-combustion technology, the project is presently on hold after environmental groups filed an ...click here to read on.