Consol Energy Aims To Be A Leading Force In Slowing The Shift To Renewable Energy

Consol Energy Aims To Be A Leading Force In Slowing The Shift To Renewable Energy

With 20 years left of coal under its Western Pa. mining complex, company says move to renewables can’t happen at high speed

ANYA LITVAK, Pittsburgh Post-Gazette alitvak@post-gazette.com, MAY 19, 2024

The trip into the belly of Consol’s Enlow Fork Mine, one of three in the company’s Pennsylvania Mining Complex which spans an area the size of Manhattan, is slow and a little bumpy.

It begins in an elevator that descends about 800 feet. From there, settle in for a 30-minute ride on a diesel-powered rail car. As walls narrow and overhead lights recede into darkness, the locomotive bumps along at 8 mph before turning into the active longwall section where a city’s worth of infrastructure is trained on cutting down walls of coal underneath Western Pennsylvania. It’s the speed of the actual mining — the ferocity of the shears that cut up to 2,000 tons of coal per hour — that stands out in contrast to the otherwise subdued pace underground.

Pacing is a multifaceted theme at Consol Energy Inc., a 160-year-old coal mining company with its headquarters in the oil and gas mecca of Southpointe in Washington County.

At the entrance to the mine’s portal in Prosperity is the first of many “Not So Fast” signs.

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A perfectly reasonable interpretation of the sign’s message is that cars should move slowly in the parking lot. But the slogan was developed with another collision in mind: the speed at which the country is shifting away from fossil fuels.

It’s both a call to slow down the transition to renewable energy and to challenge the thinking behind that shift.

Consol’s public relations campaign launched in the fall of last year with videos and social media posts. A recent example reads: “Is Paris on your bucket list? If so, then you better act quickly. Long-haul air travel might become restricted to reach net-zero targets by 2050. Learn more about other possible limitations to our freedoms at theCOALhardtruth.com.” An image of a wind turbine atop the Eiffel Tower accompanies the message.

Last Christmas season, Consol dispatched Santa Claus to Market Square, Downtown, to tell kids why coal is a gift (and to hand out toys).

CEO Jimmy Brock brought the message to the Society of Mining, Metallurgy and Exploration’s MineXchange conference in Phoenix in February.

“I’m here to introduce you to a new effort to tell the world why coal still matters, and will matter for decades to come,” he said.

“The current popular belief goes like this: coal brings no benefit to society. There’s no risk for renewables,” he said. “Not so fast.”

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“A transition cannot happen overnight,” Consol spokeswoman Erica Fisher added later.

To be fair, the transition has been in the works for a while. Coal, which has the highest carbon emissions of all the major electricity sources and emits other air pollutants when burned, has been a declining part of the electricity mix in the U.S. for years.

The biggest factor that drove many coal plants into retirement was cheap natural gas. To this day, Consol considers competition from gas to be its biggest threat, according to its public filings.

According to the Energy Information Administration, coal-powered electricity generation accounted for just 17% of electric supply in the U.S. last year. By 2025, the EIA expects that to shrink to 14%.

By comparison, wind power was at 11% last year, and natural gas at 42%.

Consol itself has been preparing for the shift. One of the company’s goals has been to move away from domestic powerplants and into exports, Mr. Brock said during an interview with the Post-Gazette in January.

That mission has been accomplished. Last year, most of the coal mined at the Pennsylvania Mining Complex was sent abroad, and more than half went into non-power markets such as steel or cement plants. Only five years ago, 82% of the company’s coal had been used for power generation.

Assistant mine superintendent Mike Koffler discusses mine operations on an elevator descent into the Consol Energy Enlow Fork Mine near Washington, Pa. on Thursday, May 9, 2024.(Sebastian Foltz/Post-Gazette)

The power grid and demand:

But a recent swell of concern about the reliability of the nation’s power grids has shifted something. Consol’s CFO Mitesh Thakkar talked up “long-term indicators for potential growth” in the U.S. power market during the company’s earnings call earlier this month.

“The biggest driver for this demand in the U.S. is expected growth in artificial intelligence on top of the already growing power demand for electric vehicles, heat pumps and the manufacturing of microchips, EVs and batteries,” he said, referencing a Wall Street Journal article whose headline read: “Renewables can’t keep up with growth, which means more coal and more emissions.”

The projected demand appears to have taken utilities and analysts by surprise. Just a few years ago, electricity sales were predicted to be relatively flat for years, with energy efficiency improvements and new renewable capacity balancing out coal retirements and increasing electrification.

In 2021, the Energy Information Administration projected demand for electricity wouldn’t reach 1% annual growth until close to 2050. Now, the agency thinks it will rise by nearly 3% by the end of 2024 and another 4% in 2025.

“We have to be concerned about the grid,” Mr. Brock said during a panel discussion at the mining conference in Phoenix.

Seated next to him was Jimmy Staton, president and CEO of the South Carolina utility Santee Cooper which had recently delayed its plan to retire coal generation by 2029 after seeing “just mammoth growth” from data centers and industrial activity. By the end of the decade, Mr. Staton said, his customers will require 40% more electricity.

“My concern in the near term is it takes two years to put a datacenter in place. It takes 10 years to build something to provide enough power for it,” he said.

He’s not alone in ringing alarm bells.

When the intelligence firm Grid Strategies analyzed data from utilities and electric grid operators and found “shocking” increases in peak demand, it also found a misalignment between the problem and the solution.

Despite the large pull expected from new datacenters, electric vehicles, and factories, Grid Strategies said there is “ample generation resources” in development to service the new need. “But projects are often bogged down in technical review processes that were built for a different age and different technologies.”

Fortifying a grid that relies more on renewable energy with better transmission connections would be cheaper (and cleaner) than building new, likely natural gas, powerplants, the analysis suggested. But today, transmission lines are about as hard to build as pipelines.

Arguing for time:

Consol is drawing on its own experience to suggest that change from the status quo takes time.

For 20 years, the company has been working on a concept for what it now calls the 21st Century Power Plant, named after the Department of Energy Program funding its initial design. The facility would burn waste coal and biomass like wood scraps, capture the carbon dioxide emissions and inject them deep underground for storage.

Consol is in the middle of drawing up blueprints which are expected to be done by the end of next year. Then there’s the issue of finding a good place to store the gas underground. Consol envisions having to first drill test wells to characterize hospitable layers under the surface, but it doesn’t have any immediate plans to do so.

All this pushes the potential start of construction on such a project into the 2030s. And that’s if it makes financial sense, cautioned Jacquie Fidler, Consol’s vice president, environmental and sustainability.

“It’s an awesome project. We love it,” she said. “But we’re also understanding the technical challenges and the economic challenges in making these projects a reality.”

Consol employed its experience on the project to argue against new regulations for carbon emissions from powerplants that were finalized by the EPA last month, alleging the rules are not practical or legal.

The regulations require coal plants to either add carbon capture systems by 2030 or retire by 2032.

Consol enumerated the challenges: carbon capture isn’t yet commercially viable because it’s expensive and hasn’t been demonstrated at scale; there are no carbon dioxide pipelines to carry the waste to disposal wells in Appalachia; and there are no disposal wells in the region.

“The foregoing concerns are fatal (to the regulation), but they are not permanent,” Consol wrote to the EPA. When pipelines are built and costs go down as more projects are tested, this may all become possible, the company argued. That would be the right time for the agency to introduce its rule, it said.

It was the technical way of saying, Not So Fast.

Assistant mine superintendent Mike Koffler directs visitors to rail cars during a media tour of Consol Energy Enlow Fork Mine near Washington, Pennsylvania, Thursday, May 9, 2024. The underground coal mine covers an area larger than the City of Pittsburgh.(Sebastian Foltz/Post-Gazette)

Long runway for longwalls

The intended audience for the Not So Fast campaign is anyone Consol believes has the wrong idea about coal’s value and longevity, or who might need reassurance.

That might include engineering students reluctant to study mining because they think there won’t be a future. It could be investors worried about putting money into a sinking industry. The public, policy makers, and even current miners are all being encouraged to “rethink the narrative.”

Consol’s operations depend on its investors and employees seeing a decades-long runway for coal. The Pennsylvania Mining Complex, with its 1,600 employees, has another 20 years of coal reserves left in the ground, Consol says.

The complex began with the opening of the Bailey Mine in 1984, followed by Enlow Fork in 1990 and the Harvey Mine in 2014. They are all connected underground but run as separate entities — each with its own administrative structure above ground, their own portals to the coal, and even their own mine logos and swag.

Enlow Fork’s Archer Portal opened in 2019. At the entrance is a bright open space, with an even floor and walls sprayed with concrete. Workers will be moving through this area for 30 years, said Mike Koffler, assistant superintendent at Enlow Fork, so it’s got to be maintained in good condition.

“Mining is kind of like building a city underground,” he said. It means running water pipelines, electricity, communication systems, air circulation, waste, signage, emergency shelters, its own fire brigade, and many miles of rail.

There are 50 miles of rail tracks in the mining complex, about twice as many as on Pittsburgh Regional Transit’s light rail system, which runs mostly above ground.

“People think it’s pick axes and donkeys,” said Gaven Verbosky, safety supervisor at Enlow Fork, on a recent tour of the mine meant to dispel that image.

Mr. Verbosky grew up 12 miles from the mine’s portal, listening to his grandfather tell stories of mine disasters. His parents were adamant that he stay out of the mines and most of his peers had no desire to go underground, he recalled. “It wasn’t even talked about,” he said.

Nevertheless, Mr. Verbosky got in the game, first with a contractor and then as a Consol employee. He mined at Enlow, where just getting to his worksite meant a 1-hour-and-15-minute ride on the rail car underground. (Miners would jockey for the window seats to squeeze in a nap before work, he said, and to this day, the somatic memory of those trips makes him fall asleep on airplanes during turbulence.)

The money was so good, he said, that his parents stopped objecting. By the time he was 28, Mr. Verbosky and his wife built their first custom house.

The draw was the money, he said. “With mining, you write your own check.” Unlimited overtime means that even beginner miners with a starting annually salary of $56,000 can bring in $100,000 a year.

In 2015, after a decade in the mines and nervous about the upcoming presidential election — “I didn’t think the Clinton thing would go the way it did” — he got trained to do electrical work underground, figuring it was a skill he could transfer above the surface if the coal industry was headed for troubled waters with a Democrat at the helm. He’s now working on an engineering degree from Penn State, on Consol’s dime.

“Jimmy says it: Don’t ever be ashamed to tell people what you do,” Mr. Verbosky said, quoting his CEO.

And he’s not. Coal, he said, has given him “everything I ever wanted.”

The next frontier:

The Not So Fast social media posts sometimes draw snarky comments. One post, which Mr. Brock flashed on the screen in Phoenix, mocked: “We burnt the planet to a crisp, but for a short while there we created a lot of value for our shareholders.”

He was proud of Consol’s response, which said that shareholder value was indeed a good thing.

Elsewhere, a social media post listing coal’s virtues prompted another reader to lament that it’s a shame to burn such valuable stuff.

Again, Consol took the opening. “We actually agree,” it responded, albeit with the caveat that the world still needs coal to burn.

If the first part of Consol’s strategy was to shift more of its coal from domestic to export markets, the second part is to go from power generation to non-power generation and, eventually to using coal as a material rather than a fuel, said Dan Connell, who leads Consol Innovations, a subsidiary in Triadelphia, W.Va.

In 2022, Consol bought out CFoam, a company that makes a hard foam material out of carbon fiber — the carbon comes from coal. The material is rigid but lightweight, with applications in aerospace and spacecraft, Mr. Connell said.

Last year, it acquired Touchstone Advanced Composites, a tooling supplier for the aerospace industry that uses CFoam. It also began testing coal as a carbon source for battery cathodes. There are prototypes of decking made with coal, tiles from coal, aggregate peppered with coal.

“The future vision is: how can we use coal in ways that are completely new and revolutionary, that don’t involve combustion, that have a very different emissions and sustainability profile?” Mr. Connell said.

It’s too early to say if or when the coal that lives under southwestern Pennsylvania will no longer be burned — either because the world shifts away from it or because it will become more popular as a material feedstock.

But it won’t be soon, Consol assures. Anya Litvak: alitvak@post-gazette.com