Markets For Southern Powder River Basin Coal (52e91515-cf94-4a48-b1d9-bcd7d99bfef0)

The Southern Powder River Basin (SPRB) now commands 30% of the US utility, coal market due to the region's low mine production costs, competitive rail rates and low sulfur content. In 1997, production exceeded 240 Mt (265 million st). This was an in¬crease of 104 Mt (115 million st) since 1989 and 4.5 Mt (5 million st) above 1996. Continued growth is expected as the second phase of the Clean Air Act Amendments (CAAA) approaches. This growth will be the greatest in the southern part of the Basin where coal quality is higher. Coal characteristics SPRB coal is classified as subbituminous due to its low heating value and high moisture content. The coal is characterized by low sulfur and ash contents, low ash fusion temperatures and high reactivities. In 1997, the average heating content was 8,593 Btu/lb, with an average sulfur and ash content of 0.79 lbs S02/million [ ] Btu and 5.13%, respectively. The distinguishing characteristic of SPRB coal is its low sulfur content. Most SPRB coal contains less than 1.2 lbs S02/million Btu. This is the approximate definition of "compliance" coal for Phase II of the CA AA. Much of the coal, particularly in the southern part of the Basin, is referred to as "super-compliance" coal due to SO2 contents of between 0.4 and 0.7 lbs SO2/million Btu. The SPRB is divided into three geographic clusters based on coal quality. Mines located in the southern part produce coal with the lowest average sulfur content and highest heating content, almost 400