Gov. Quinn announces Illinois coal exports set record in 2012, fuel economic growth

New report forecasts more gains for Illinois coal as global demand rises

[May 03, 2013]  SPRINGFIELD -- Gov. Pat Quinn released a report this week that forecasts continued major export growth for the Illinois coal industry due to the state's large volumes of coal, competitive prices, and access to prime water and land transportation routes. The state's coal output rose last year against the tide of shrinking U.S. production, as global demand for Illinois coal soared. The new report and its recommendations support Quinn's five-year-plan to double exports by 2014 and to continue providing an export-friendly business climate in Illinois.

"Illinois coal is in high demand overseas, and we have the resources and infrastructure to take advantage of this opportunity for economic growth," Quinn said. "Our rail lines and river ports, which we continue to improve under the Illinois Jobs Now! capital construction program, give us a unique export advantage over other states in the region."

Illinois exported a record 13 million tons of coal in 2012, a fivefold increase from 2.5 million tons in 2010, according to "Realizing Illinois' Coal Export Potential," a report by Energy Ventures Analysis Inc. for the Illinois Office of Coal Development. The report was released at a meeting of coal industry leaders Wednesday at St. Louis Downtown-Parks Airport near the Mississippi riverfront.

Thanks in part to the rivers and railroads that allow Illinois coal to cost-effectively reach export markets, Illinois' coal production is on the rise while U.S. coal production is falling, according to the Energy Ventures report. Total Illinois coal output rose 25 percent to 47.2 million tons in 2012, up from 37.8 million tons in 2011. Coal production nationwide fell 11 percent. Since 2010, when the revival of Illinois' coal industry began, total Illinois coal output has risen 42 percent.

"Illinois coal has made significant inroads into the global market in the last two years and, in doing so, has contributed to the increase in exports of U.S. goods," said Adam Pollet, acting director of the Illinois Department of Commerce and Economic Opportunity, which houses the state's coal development office. "We are working hard to raise the awareness around the world of Illinois coal and to help small producers in Illinois access overseas markets in Europe, Asia and South America."

Illinois coal was shipped to at least 18 countries in 2011 and 2012, according to the report. Illinois is now the fifth-largest coal-producing state in the U.S., up from ninth in 2009. The industry supports more than 4,000 jobs in Illinois.

The international steam coal market -- where coal is used to produce electricity and heat large boilers and industrial furnaces -- is booming. Illinois has the largest reserves of bituminous steam coal in the U.S.

Another Illinois advantage is the state's easy access by rail or barge to the Gulf of Mexico, where coal is loaded onto oceangoing vessels for overseas sale. To demonstrate the positive direction of coal exports, the meeting on Wednesday included a tour of American Milling Co.'s new $13.6 million coal terminal facilities at the nearby Port of Cahokia, which will be able to transfer up to 10 million tons of coal from rail to barges for export through New Orleans. The state invested $1 million in the project through its coal development efforts.

"Illinois coal exports have increased as a result of the overall growth in the global steam coal market, the marketing efforts of the major Illinois coal producers and traders, the relative competitiveness of Illinois exports on the global market, and the increased market acceptance of Illinois quality coal," said Emily Medine, a principal at Energy Ventures Analysis and author of the report.

The report recommends that Illinois can help promote continued growth in exports through three types of initiatives:

• Maintaining and improving Illinois' competitiveness from the mine to the customer. The report notes the importance of maintaining navigation on the Mississippi River and increasing the draft in the Gulf of Mexico to allow for the loading of larger classes of vessels referred to as "cape-sized." The ability to load the larger vessels benefits the Illinois coal industry and many other industries in the state.

• Providing technical assistance to the smaller producers of Illinois coal. This group, in general, does not have an international sales force or experience doing business overseas.

• Expanding the global awareness of Illinois coal. This includes educating Illinois trade representatives about Illinois coal, supporting trade missions to the markets that represent the best prospects for Illinois coal and potentially encouraging foreign investment in Illinois coal properties.

The Office of Coal Development, a division of the Illinois Department of Commerce and Economic Opportunity, is working with industry representatives on implementing several of the recommendations from the report. To view a copy of the report, visit illinoiscoal.biz.

[Text from file received from the Illinois governor's office]