Coal Making Comeback for Some Businesses


America’s new likely Energy Secretary, nominee Steven Chu, is on record saying coal is his "worst nightmare." Well, he obviously hasn’t been locked in solitary with a stereo looping that migraine-inducing terror of a song, "Bad Day." That is my worst nightmare, and I’d contend it’s far worse than anything coal will ever provide.

But Chu’s (and Obama’s) aversion to coal is hardly music to the ears of the nation’s coal producers, namely the top five producing states (Wyoming, West Virginia, Kentucky, Pennsylvania and Texas). This is likely why the Small Business & Entrepreneurship Council has a different take on coal:

For good measure, coal is affordable. On December 27, the New York Times ran a fascinating story titled "Burning Coal at Home Is Making a Comeback". While still a tiny fraction of the market, the story explained how the number of homes using coal as a heating fuel has risen. Coal consumption as a heating fuel, it was reported, hit a low in 2006, then rose by 7 percent in 2007 and more than 10 percent during the first eight months of 2008.

Opportunities have expanded for some small businesses. For example: "Dean Lehman, the plant manager for Hitzer Inc., a family-owned business in Berne, Ind., that makes smaller, indoor coal stoves, said his stoves were on back order until March. And Jeffery Gliem, the director of operations at the Reading Stove Company and its parent, Reading Anthracite, in Pottsville, Pa., which supplies coal and stoves to 15 states in the Northeast and Midwest, said the uptick in interest was the largest he had seen in 30 years. ‘In your typical year you might have five, six, seven thousand stoves being sold,’ Mr. Gliem said. ‘This year it was probably double that.’"

To get an idea on the cost differential, consider the following: "Coals vary in quality, but on average, a ton of coal contains about as much potential heat as 146 gallons of heating oil or 20,000 cubic feet of natural gas, according to the Energy Information Administration. A ton of anthracite, a particularly high grade of coal, can cost as little as $120 near mines in Pennsylvania. The equivalent amount of heating oil would cost roughly $380, based on the most recent prices in the state – and over $470 using prices from December 2007. An equivalent amount of natural gas would cost about $480 at current prices." 

UPDATE: The Heritage Foundation just released this series of questions for Chu, as well.

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