Houston (Platts)--13Feb2009

Even as cost and climate concerns continue to mount, industry executives
say coal will remain the dominant force in meeting US energy demand in the
future.

Speaking at a Cambridge Energy Research Associates conference Friday in
Houston, Jone-Lin Wang, CERA managing director, said there is 17,000 MW of new
coal capacity currently under construction in the US, the highest level in
the last 20 years.

"New builds in coal have been attacked on two fronts -- capital-cost
escalation and [carbon dioxide] emissions," Wang said. "Despite these
problems, we have seen a surge in new coal plants. Coal is resilient."

She said, however, that there are still hurdles for building new coal
projects.

A weak economy has hurt the demand for coal, said Anna Belova, vice-CEO
of strategy and corporate development for Russian energy company SUEK.

Lower natural gas prices are also making that fuel option more attractive
for builders, she said, adding that increased energy efficiency and a strong
push for renewable energy have made the future of coal seem uncertain.

Renewable energy, however, has a long way to go before it can become
baseload generation, said Steve Leer, chairman and CEO of Arch Coal.

"No new hydro is anticipated, and we'll need at least 30 new nuclear
units by 2030 to make up the current market share. Is it possible? Yes, but
it's highly unlikely," he said.

In addition, inadequate infrastructure remains a problem for building
renewables, he said.

Coal will continue to be a major force in the future of energy, the
speakers agreed, although the industry will have to work on developing viable
carbon capture and sequestration technology.

Where coal can and should lead the way in dealing with carbon emissions
is in clean-coal technology.

"You cannot solve the climate change problem without dealing with coal,"
said Howard Herzog, principal research engineer at the Massachusetts Institute
of Technology. "Killing coal is not a real option. Carbon capture and
sequestration is the only real alternative."

--Leticia Vasquez, leticia_vasquez@platts.com