1

Nemacolin Energy Institute2nd Annual National Coal ConferenceApril 23, 2013

Hal Quinn

President & CEO

National Mining Association

2

BTU-Hungry World

China Only part of the story unfolding

Developing EconomiesWill account for 80% Global GDP by 2050

Energy IntensitiesRemain just a fraction of developed economies

3

Scale and Pace of Developing World Urbanization• By 2020, developing

countries will account for almost 80% of the world’s total urban population

• The global growth is equal to adding the population of Mumbai every second month or Shanghai every third

1990 2010 2030

650

1,400

2,350

Total Urban Population in China, India and Africa (mil-

lion)

+750

EU US

~500~370

Total Population in De-veloped Countries (mil-

lion)

2030

+950

Source: McKinsey & Company

4

Coal Becomes World’s Primary Energy Source

2000 2005 2010 2015 2020 20252

3

4

5

6

Bill

ion

TOE

Coal

Oil

Natural Gas

Sources: Wood Mackenzie, IEA

5

Growing Opportunities: US Coal Exports

• State-by-State coal exports economic analysis• Includes total jobs, gross value

added, tonnage, capacity, employee compensation, and forecasting.

• Educate policy makers on the coal leasing program and the benchmark process for royalty payments.

• Advocate for new and expanded port capacity across the United States

Policies that enhance competitiveness of U.S. coal exports • New and expanded export capacity

nationwide

• Regulatory streamlining for mine-to-market infrastructure

Economic and trade benefits of increased U.S. coal exports• High-wage job creation throughout

national and regional supply chain

• Positive contribution to U.S. balance of trade

• Fueling growth of emerging economies and creating demand for U.S. products

Domestic Coal: Directional Assessment

• Energy Economics

• Politics and Policy

• Coal Repositions

• Coal Rebounds

Projected Coal Plant Retirements as a Percentage of Total Capacity by Region - 2020

Nationwide Retirements: 68 GW20% of capacity/14% of 2012 generation

7.4% 21% 30.3%

36.8%

4.4%

Source: EVA, NMA

Higher Capacity Factors for Remaining Plants Offset Retirements

U.S. Coal Fleet(In gigawatts of capacity)

Capacity at risk of retiring by 2020Expected capacity to remain onlineIncludes 7 GW New Capacity

277 GW

57%

76%

2010 2012 2020

2020: ~100 MST recovery from 2012 levels

68 GW

66%

U.S. Coal Plant Utilization (Remaining 277 gigawatts)

8Source: EVA, NMA

2012 2013 2014 2015 2016 2017 2018 2019 2020 240

250

260

270

280

290

300

310

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0.0%

9.4%

13.1%

2.1%

7.7%9.3%

11.0%12.5%

15.0%

Coal Generation Capacity and % Change in Generation from 2012

GW GWh

Capa

city

(GW

)

% ch

ange

in g

ener

ation

from

201

2 (G

Wh)

Source: EVA

Coal Fleet Size

2011 20200

50

100

150

200

250

300

350

400

5114

33

19

53

43

201

200

500+300-500200-300<200

Capa

city

(GW

)

• Smaller units (<300MW) comprise 75% of the retirements

• Almost 75% of the remaining coal fleet will be larger than 500 MW

Source: EVA

Coal Fleet Age

2011 20200

50

100

150

200

250

300

350

400

54 62

80

117

12263

82

34

<3030-4040-5050+

Capa

city

(GW

)

• By 2020—

• 65% of the existing coal fleet is >40 years old

• Youngest segment (<30 years) drops to 13% of entire fleet

Source: EVA

Coal Fleet Heat Rate (MMBtu/MWh)

2011 20200

50

100

150

200

250

300

350

400

5 1

4730

188

154

97

92<10,00010,000-11,00011,000-13,00013,000+

Capa

city

(GW

)

Emission Profile (#/MWh)

• SO2: - 25 %

• NOx: -11 %

Source: EVA

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Situation Assessment• Coal fleet shrinks—but • Larger units predominate (~75% > 500MW)• Higher utilization rates = increased coal generation

• New controls improve fleet emissions profile• Fleet continues to age• Aging fleet vulnerable to next round of EPA rules: • GHG NSPS standards for New Plants• GHG NSPS guidance for Existing Plants

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Greenhouse Gas Regulations

• EPA proposes a single coal/natural gas emission standard for new power plants

• Equivalent to NGCC emission rate (1,000 lbs/MWh of CO2)

NSPS Standard

• Best in class coal technology cannot meet standard without CCS

• Similar beyond current technology approach for existing plants could phase out coal fleet

Impact on Coal Plants • New plants: Separate

standards for natural gas and coal plants

• Existing plants: No impairment of existing fleet and no stranded investments to meet recent emission standards

NMA Objectives

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Coal Retirements & Incremental Natural Gas Supply

Source: EIA, AEO’12 early release, Reference Case . Notes: Gas replacement based on 2007 (pre-recession) electricity generation from units already announced for retirement to 2020 (appx 32 GW) and an additional 36 GW of units past 2020 at high risk for retirement based on anticipated non-CO2 regulatory environment identified by NETL

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0Lower 48 Unconventional (Shale-gas)

(Shale-gas only growth (6.7 Tcf);

Lower 48 ConventionalNet LNG Imports

Net Pipeline Imports

Alaska

Tcf

Net Domestic Supply Increment

Indexed to show growth from 2011

+1.6Tcf

(2035 vs. 2011)

+0.6 Tcf (2020 vs. 2011)

Gas to replace generation from known (~32GW) coal retirements

(1.35 Tcf by 2020)

Gas to replace generation from additional (~36GW) coal retirements

(3.1 Tcf by 2030)

(AEO’12er Reference Case - Indexed to 2011)

Technology Solutions vs. Fuel Bridges

17

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