Sep 12 - McClatchy-Tribune Regional News - Debra McCown Bristol Herald Courier, Va.

As global energy demand continues to grow, higher energy costs are undoubtedly on the horizon, Alpha Natural Resources CEO Michael Quillen said Thursday.

Speaking to a group of more than 40 people from around the state during a LEAD Virginia conference, Quillen said with the energy crunch on everyone's mind, he hoped to dispel misconceptions about coal mining and its importance to the state and the nation.

"When we came to Abingdon and said we wanted to put our corporate headquarters here, we didn't get a real warm reception because they said, 'Are they going to put trailers over there? It's a coal company,' " Quillen said. "We did a little bit better than that."

Quillen's gave his speech Thursday at the Southwest Virginia Higher Education Center, which sits across from Alpha's imposing corporate headquarters.

He said he also hopes to counter the perception that mining is a dangerous, low-tech job that pays little and is only done by those with no other options.

"I started out as a superintendent, a foreman and a mine manager, and if I had a choice that's still what I'd do today. It's a lot better than being a CEO," Quillen said. "Most of the people in this industry, it just gets in your blood."

The talk was part of LEAD Virginia, a seven-month leadership program that brings people from around the state to seven different regions of Virginia, each with a three-day itinerary, in hopes of helping them understand each region and how they all fit together.

"When one region suffers, we all suffer. When one region succeeds, we all succeed," said Susan Horne, president and CEO of LEAD Virginia. "It really gives them [participants] a 360-degree perspective of Virginia."

Thursday was the first day of this year's Southwest Virginia portion of the conference; today the group is riding through Lebanon to see the much-talked about success of the town in drawing high-tech industries, and then to Wise County to see how land is reclaimed after surface mining. They will also hear talks on other aspects of the region.

Quillen talked about how coal is mined, what current safety regulations are in place and what kind of wages -- often more than $100,000 a year including benefits -- coal miners earn in the 21st century.

"It's something very vital to Southwest Virginia," he said, adding that the $8.7 million the company paid in severance taxes last year is important to the budgets of the state's three main coal counties: Wise, Dickenson and Buchanan.

He briefly described his company's history -- its creation in 2002 with the acquisition of three coal companies that were for sale after years of turning little or no profit and its dramatic success as the global demand for coal took off two years later.

He said demand for energy has continued to skyrocket in Asia, and while the U.S. may have 240 years of coal at the current rate of consumption, coal alone won't be enough to meet rising energy demand.

"The short answer is we're in a mess," he said when asked by an audience member about the nation's energy situation. "We use more electricity per capita than anyone else in the world, and we're getting slammed a little bit right now."

"The price is going up; there's no way it's not going to. But we're in a mess because too many people think we're going to solar power and wind power our way out of this," he continued.

"We're going to have to figure out how to use coal, how to use nuclear and how to use natural gas for the next 20 years ... but it's not as simple as we're hoping to make it. ... If we're going to solve this dilemma right here, we're going to have to figure out how to conserve."

He said the price of metallurgical coal has gone from $65 a ton to $250 a ton in a year's time because of rising demand from China. In the same time period, steam coal -- the type used to generated 50 percent of electricity in the U.S. -- went from $35-$40 a ton to $75-$100.

"China is building a power plant every week, and they have no pollution controls on them right now," Quillen said. "If they stay at that [growth rate], there's going to be no natural resources left in the world."

He said the price of energy is going to go up right now because of supply and demand, and in the future, because of greenhouse gas regulations that are expected from Congress.

"Here's a coal guy saying this, we are going to have to go nuclear in the United States in the next 15 years," he said. "It is going to be interesting to watch somebody get a nuclear permit on the first greenfield site. It's not going to be quick."

He said it's been so long since a nuclear plant has been built, no one knows what one will cost, there's more global competition to get a nuclear reactor, and there are very few nuclear engineers being educated today. But America will need them.

He said Dominion Virginia Power, whose new coal-fired power plant is under construction in Wise County, Va., thought it would be "relatively easy" to get a permit for the plant here but that "it was more than relatively hard."

He said environmentalists' efforts against the Dominion plant were misplaced.

"We shouldn't be stopping the cleanest technology we have today," Quillen said. "We need to worry about the old ones. Because in America today, what happens if we don't build the new plants? We're not going to shut off the electricity in the United States like they do in India; we're going to let the old ones run longer."

Quillen touched on several controversial topics, even commenting on Democratic presidential nominee Barack Obama's speech in Lebanon earlier this week.

"When Obama came to Lebanon the other day ... he said 'coal' maybe 25 times," Quillen quipped. "I bet he doesn't give that same speech in Berkeley [Calif.]."

Quillen also discussed another hot-button issue in the region: mountaintop removal, a surface mining practice that involves the blasting away of mountains to get to the coal.

He said it's not likely the region will see more large surface mines in the future. There aren't many sites left, he said, and with ongoing controversy, environmental regulations will change.

He said the controversy centers around valley fills, or the dumping of leftover rock and dirt into streams.

"When you hear that it's being dumped into waters, technically that is correct, but ... anything that leads to a navigable stream is considered water, whether there's water or not," he said. "Nobody has ever proven or even alleged that we have covered enough hollows to affect the ecosystem."

He compared to the bare look of a surface mine from the air to a construction site, and said that, from the air, reclaimed mine sites are almost indistinguishable from undisturbed land.

"Most of the problems I think come back to people who don't want to see the mountains lowered or moved, and I think that's a legitimate position," Quillen said. "My theory is ... somebody owns that mountain, they're paying taxes on it, they bought it, and if they do what is in compliance with the law, I can't tell them what to do differently with it."

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