Tech Talk - Coal prospects

Last week was the annual Society of Mining Engineers annual meeting, this year in Salt Lake City, with the title “Leadership in Uncertain Times.” To illustrate the point it had some 6,000 members or more in attendance, as I hear and was quite successful from that point of view. However, through the grapevine I also heard that some of the mining companies are less optimistic of the future, with job offers made for this summer being withdrawn in several cases.

There is a considerable question as to the future of coal, as the title reflects, and this has as much to do with concerns over the construction or not of additional coal-fired powered stations around the world and the changing market as older plants are withdrawn from service. Some of the reason for uncertainty can be seen in the predictions from the EIA for the domestic coal market over the next year or two.

Figure 1. The decline in coal production in the United States over the past two years. (EIA)

The EIA note that last year was the first that production had fallen below 1 billion tons in the past 20 years. It does however forecast that production will increase this year by 3.9% before falling 1.5% in 2015. In both years however it will remain above that billion ton mark. I have written recently about the recent report “Warning Faulty Reporting of US Coal Reserves,” (in which the conclusion is drawn: “Rather than having a “200 year” supply of coal, there is now abundant evidence that the US is rapidly approaching the end of economically recoverable coal.“)

The two stories are, to a significant degree, discussing different topics, although the beginning of the Clean Energy report also discusses the rising price of domestic coal, and why – as it rises – so the switch to other fuels can be anticipated to continue. However, in that regard it is worth noting this other graph from the EIA.

Figure 2. Spot price of coal by basin over the past three years (EIA )

For those who forget 1 MMBtu (million Btu) is roughly equivalent to 1,000 cu ft of natural gas. The EIA also record natural gas prices and, in comparison to the coal price, that of natural gas – for equivalent energy – is considerably higher.

Figure 3. Natural gas prices (Henry Hub) (EIA )

Why then does the Clean Energy Report suggest that coal costs are going up, when as the plot above shows the spot price has been remarkably stable?

Figure 4. Cost of delivered coal in the US from 2004 – 2012. (Clean Energy)

Notice however, in this case, that the cost is for delivered coal, and the cost of that delivery is what has been going up over the past few years. (And you wonder why Warren Buffet invested in railways?

Figure 5. Changes in Railroad freight costs since 1981. (Association of American Railroads)

If you look at the plot you will see that the cost per ton-mile has increased fairly steadily over the past four years from just above 3 cents to 4 cents a ton-mile, which explains a significant part of the increased fuel costs. Railroad income has risen, since 1981, from just under $3 billion to $12 billion.

So what is the future likely to be? Well there is an additional source of income to the industry, outside of the US power plants, and that is through exports. Yet here the story is not really that different. Since 2005 the value of coal exports from the United States have tripled. This is not just a volumetric increase (which has happened with steam coal) but includes an increase from higher prices for metallurgical coal. (Powder River steam coal at 8,800 Btu sells for around $12.35, while the 13,000 Btu Northern Appalachian coal goes for $68.65 a ton. (This is one of the discriminating factors within the coal market that the Clean Energy Report fails to fully discern). Exported coal saw a steadily rising price from 2007, when it averaged $70 a ton through 2011, when it was priced at $148 a ton before falling to $118 in 2012 and to $96 in 2013. Roughly 46 million tons went to Europe in 2013, down from 51 million tons in 2012, while roughly 22 million tons went to Asia (down from almost 26 million tons). Of this about half the European and a third of the Asian coal was steam coal needed to feed coal-fired power plants.

The problem that the industry faces is that this downturn in both domestic and export demand that became evident last year is likely to continue into the next few years. In the case of Europe pressure to close coal-fired power plants continues, despite increasing concerns that the existing base is approaching a point where supply will no longer be able to meet demand. The Sunday Times carried a story this Sunday about Npower and their owner RWE, which produces 10% of the electricity in the UK, but which is writing off hundreds of millions of dollars as it devalues its current power stations, which are being closed by regulation, even as it fails to build replacements, which it is reported to find unattractive in the current political climate. Last December the NPower CEO noted that over the past year the spare capacity in the UK had fallen from 15% to 5% and if that continued this year (and there are more scheduled closures) then by next winter the reserve may be gone and the country may see the start of blackouts that will continue for some years.

In the same vein the United States is also cutting coal-fired production. An article in Motley Fool points to the trend over the next few years.

Figure 6. Projected coal fired power plant closure effects (EIA via The Motley Fool)

However this projection is possibly a little disceptive, since it does not foretell what might happen if “clean coal” can get a grip on the industry. As TMF points out:

But EIA's retirement projections may be too high. While air emissions standards will result in heavy fines, utilities may still foot the bill because of coal's relatively cheap production costs.

With natural gas prices up 50% this year to a four-year high, energy companies are scrambling to find cheaper energy. According to data compiled by Bloomber, an average natural gas plant makes $3.04 a megawatt-hour off its fuel, compared to a whopping $31.58 for coal-fired plants.

While coal might seem like a no-brainer bet, "clean coal" is far from a sure thing. Southern Company has been working hard to bring its 582 MW Kemper County, Miss., clean-coal plant online, but the $5 billion project is currently 65% over budget.

A Department of Energy report estimates that clean coal costs are roughly double that of coal, but companies like Southern Company are hoping to reinvent coal's future.

Unfortunately building new coal demand, when set against the destruction of current plant in both the US and Europe, will take some years and thus, while the future for coal might, in the long term be strong, in the shorter term one can understand why coal companies might be hesitant to hire new engineers. The reduced demand will, inter alia, lengthen to time that current supplies last, though I perhaps need to address that issue in a subsequent post.

Of temperature and coal supply predictions

It seems that while in my own professional life I had to change my opinion on several occasions, as new facts and experimental results showed that some our ideas were incorrect, that a willingness to change future projections of future energy supplies and their impact on the climate is less prevalent among the most quoted sources of opinion on these topics, even as the facts change over time.

This, of course, has some relevance to the many discussions that one might read on climate change, where model predictions usually assume that the same mix of fossil fuels will exist well beyond the year 2100, despite the future scenarios put forward increasingly by major oil companies that the mix will change and the role of oil and coal will diminish in the future. Part of this, in the case of the climate science modelers is perhaps because they have enough problems dealing with concerns over clouds and aerosols, without needing the additional needs to correct future prognostications for changes in the fuel mix that produces the greenhouse gasses of concern.

In this regard I was struck, in reading the testimony of witnesses at the Workshop on the American Physical Society Climate Change Statement Review about their inflexibility in changing future projections despite current data availability.

For example in the discussion following Dr. Santer’s presentation (page 255 line 18 and thereafter) it is noted that:

DR. KOONIN: But here, evidently IPCC needs to scale in order to match the observations; second, that many of the scaling factors are not consistent with one; they are smaller than one. The tightest ones are smaller than one. And there is a fair bit of variability in them. . . . But then I go to the centennial projections in chapter 12 and it says that, "The likely ranges do not take into account these factors because the influence of these factors on the long-term projections cannot be quantified." So, to me, it looks like they set a calibration against the historical data and then they wiped out that calibration in doing the centennial projections resulting in probably a 25, 30 percent over-prediction of the 2100 warmings. 1. . . . . . At least I conclude now from what I understand that the centennial scale projections temperatures are probably high? . . . By 30 percent, at least for RCP8.5 which is dominated greenhouse gases?

To which he did not get a responsive answer from those espousing the greater effects of greenhouse gases on the environment.

There is much in the discussion that is interesting, including the comment that if the hiatus continues for another 3 years then the predictive models of future temperature growth will have to be revisited, but then a time limit has been set before and then ignored after it passed.

It is, unfortunately, this illustrated inflexibility in the scientific mind that makes it difficult to predict the true likelihood of significant temperature increase within the next few decades, since the need for scaling of the greenhouse effect (perhaps down to 70% or lower) and the phasing out of fossil fuel use (in part because we are going to run out of oil) are both ignored by those whose opinions are most quoted in the press and by the government.

On the other hand there are those who predict that we will run out of coal much sooner than the industry (or myself) believes and predicts. The latest perhaps of these is the report by Leslie Glustrom “Warning: Faulty Reporting of US Coal Reserves,” for Clean Energy Action. The report is summarized as:

The belief that the US has a “200 year” supply of coal is based on the faulty reporting by the EIA of US coal deposits as “reserves.” Most US coal is buried too deeply to be mined at a profit and should not be categorized as reserves, but rather as “resources.” All decision makers should begin taking a hard look at coal cost and supply issues considering both geology and finance and begin thinking about scenarios that require moving the US beyond coal in significantly less than 20 years. Since coal is non-renewable, analyses should be based on recent trends—not those of the 20th century, which are not likely to be repeated.

This is actually an interesting point of view, since in my opinion much of the coal around the world is not even considered as a resource at the present time, let alone the reserve that it ultimately likely to become prior to use to solve the energy needs of countries that can no longer afford the higher prices of alternate fuels.

One of the problems that I have with the report is the lack of understanding of how incredibly simple and inexpensive it is to mine the surface coals of Wyoming and Montana. In essence large shovels just dig the coal out of the ground, put in trucks, transfer that to rail cars, and off it goes. It is hard to beat the simplicity and low cost of this operation. (Yes there are related costs for blasting and reclamation among others but it nevertheless remains cheap).

The assumption seems to be made that when coal seams get deeper, then the costs will rise rapidly. For the record I should point out that in the summer of 1963 I worked in the Snowdown Colliery of the Kent coal field mining a seam of about 6 ft thick IIRC at a depth of 3,000 ft. That coal seam stretched for miles, and was not the only coal within the stratigraphic column. It became too expensive to mine that, and the coal at other mines I worked in below 1,000 ft (and at seam heights down to one foot eight inches) because oil and gas in the North Sea became much more readily available at a lower price. Prior to their arrival the coal was a viable fuel. Thus after natural gas and oil begin to deplete the conditions will revert to those prior to the development of the North Sea fields. And, in the interim, there has been significant advance in the technologies that can be applied to extract the coal at lower cost – particularly with the increases in automation and remote control that are increasingly being used underground.

But I shall discuss this in more detail in a following post on the topic.

Resources, Reserves - the EIA - coal gas and oil for the future.

One of the significant issues that can get folk argumentative, is the role that price plays in determining whether a fuel source still buried in the ground is called a resource or a reserve. For example I have exchanged opinions several times with David Rutledge on his view of the declining reserve base for coal. Most recently he has written in The Oil Drum pointing to the latest paper he has written on the topic, which is available at his website. Part of my rebuttal comment inferred that as the price of the product increased (likely through the lack of other reserves to be able to sustain the energy supply need of countries around the world) so coal will be recognized more and more as a reserve, which will be used, rather than a resource that will not.

The argument is also made that as price goes up the viability of resources that would cost too much to produce would change a significant volume of those resources back into reserves. That holds true for crude oil, in just the same way as for coal, except that with so much of the world’s cheap crude having already been produced, the availability of the resource volume that will convert over as price rises is not necessarily that great. I bring this up because in this week’s TWIP, from the EIA, they address this problem in regard to how much increasing the price of crude in 2009 increased the amount of crude (including condensate). Their answer was 9% for crude and 11% for natural gas.
(And as 1 of 2 UPDATES to the story, Russia has stated - whether because of exploration or increased value is not clear - but that it fully replaced its oil and gas reserves this year (h/t Leanan).)

Gain in Oil reserves (EIA)

Gain in Natural gas reserves (EIA)

The gas gain, as the EIA note, occurred at a time where gas prices were suffering from the additional volumes made available from the shale deposits of the country.

Domestic production of crude has stabilized at around 5.6 mbd, while imports are running at around 8.5 mbd, and refinery input within the US continues to rise. Gasoline production continues to mirror, roughly, last year at this time, while demand is running around 300,000 bd more than last year. This time last year distillate production was reducing, this year it continues to increase, although demand, which dropped precipitately for the last month, is now stabilizing at about last year’s level. And ethanol production continues to creep upward.

Biodiesel production is a little harder number to come by, there is a plot through 2008:

Biodiesel production (National Biodiesel Board)

There are reported to be `173 companies engaged in producing biodiesel (from a number of sources and in a number of ways). If all of them ran at full production it would generate an average of around 175,000 bd, which is not yet much of a significant figure. Additional companies planning to get into production might raise production by 15% but this remains still only a small fraction of what is going to be needed.

UPDATE: I have been pointed to the note earlier this year that the EPA had slashed the cellulosic ethanol mandate for next year:

Cellulosic biofuel was 250 million gallons, now 6.5-25.5 million gallons
Biomass-based diesel was 800 million gallons, and stays there
Advanced biofuel was 1.35 billion gallons, and stays there. . . . . .

“We first considered whether it appears likely that the required biomass-based diesel volume of 0.8 billion gallons can be met with existing biodiesel production capacity in 2011…we believe that the 0.8 billion gallon standard can indeed be met…Of the remaining 0.15 bill gallons, up to 0.026 bill gallons would be met with the proposed volume of cellulosic biofuel. Based on our analysis as described in Section II.C, there may be sufficient volumes of other advanced biofuels, such as imported sugarcane ethanol, additional biodiesel, or renewable diesel, such that the standard for advanced biofuel could remain at the statutory level of 1.35 billion gallons.”

(end of update)

Which brings me back to my original point which is that a change in the perceived selling price of the product (I say that because of the gas situation) has led to significant investment that has raised the reserves of a commodity that is recognized to be getting into short supply.

However, to put this in perspective, the gain in oil reserves was 3.69 billion barrels. The United States uses around (rough number) 20 mbd of oil, or 7.3 billion barrels a year. The gain in reserves will thus provide the equivalent of a 6 months supply, and while production will be spread over a number of years, it really doesn’t change the arithmetic that much. What is forgotten in the discussion, however, is that the equivalent change in reserve size is also occurring in other parts of the world. And while many of these places are, like the United States, in an era where their fields are now depleting, the increased value of the product is likely to slow that decline somewhat.

Coal, which is also where the discussion started, is in an even more robust situation. Coal price is still driven by the cheapest producer to the world market. It is not practical to consider opening a new mine in, for example, Montana, if the power companies around the country are already being adequately served by local deposits and by trains from the Powder River Basin. No-one will put up the investment capital to open new mines without a market, and with the current transient switch to natural gas, that incentive does not exist in the United States.

However the rest of the world is somewhat different. Bear in mind that the prices that oil and gas will reach, in the non-too-distant future, will be significantly above what many nations can pay. If they have indigenous sources of energy – vide coal – and enough of it then they will start building coal-fired power stations. They don’t have to play games with taxing one form of energy to encourage another, they need the cheapest possible source of power. And at the moment we know what that is!

And just to emphasise that, here is the most recent projection for future demand from the EIA.


I will forgo a comment on the assumption at the top of the plot.

Future Coal Supplies - more, not less!

There has been a growing trend toward predicting an imminent peak to the production of coal. Just this last week Nature carried an article that précised Richard Heinberg’s recent book on Coal production, which I reviewed when it first came out. And while that was based, in turn, on David Rutledge’s application of Hubbert Linearization to coal production, (discussed here ) that underlying theme had also been picked up in an article in Energy by Tad Patzek. This latter paper had just come out when, at the beginning of last month, I gave a paper at the ASPO-USA meeting explaining why the approach was wrong. I did that with Kjell Aleklett sitting in the front row of the audience; his graduate student Mikael Höök had just presented a dissertation along the same lines.

Why am I so obdurate that this is wrong, in the face of such heavyweight opinion? Well let me run through the bones of my argument to explain why.

The most extreme of the positions on the imminent coal peak is that of Tad Patzek and Greg Croft. (Energy, Volume 35, Issue 8, August 2010, Pages 3109-3122) In that paper the authors had inserted a predictive graph on coal energy production rate, as follows:

From Patzek and Croft

As you may note, this suggests that we are right at that cusp of peak production and it is all downhill from here. With the major sources of energy for the planet currently coming from coal and oil, and with the recent comments both from the IEA and the Joint Services Command about the peaking of oil, that would transfer a lot of the load to natural gas, which is the third major source, according to the IEA. (And it should be noted that P&C did include the following from the IEA in their presentation.

IEA predictions of future energy supply sources (after P&G)

Gregor Macdonald at Seeking Alpha has recently highlighted the increasing world consumption of coal, which is rising much more rapidly than that of oil, which has almost stabilized. Much of that demand is coming from China, India and the growing economies of Asia.

Gregor MacDonald:

Much of the argument however for peak in production begins with the decline in the production of British coal. Famously, before the first World War, Winston Churchill converted the British Navy from the use of coal to that of oil, despite the UK having, at that time, no known indigenous oil supply yet having plenty of coal. It was a decision followed by Navies around the world. Britain still had the coal, - there were other reasons for the change.

Following the Second World War Britain had to rely on coal as a domestic and industrial fuel, and, in 1947 it nationalized the mining industry. As a part of that process it carried out a detailed physical inventory of the coal reserves of the country. That inventory has been published, and can be summarized in this table:

(From Trueman)
In the post-war years British coal production peaked at about 220 million tons a year in 1955.

British coal levels (Source Open University )

Current demand, as you may note, is just over 50 million tons a year – which might suggest that the UK has about 900 years worth of coal available.

But that is apparently not the case. If you look at a couple of data points, the World Coal Outlook, and then the BP estimate of reserves for 2005, there is nowhere near that amount of coal in the reserve:


The story is told in the difference between the resource and the reserve. At the present time folk would have you believe that the UK has very little coal left (4.5 years according to the BP report, from 2005, which suggests that the country is only staving off running out, since it is using about a quarter of that a year, by relying on imports).

So where did the coal go? Did some evil Voldemort-type character sneak into the country over night and magic it away? No! As the World Coal study shows, the coal is still there. It is just that, at the present time, the coal is not economically mineable and so it is not considered a reserve. It is, however, physically, still there, and thus, is still shown in the first column as a resource. And as the price of oil rises and the price of alternate fuels rises, so more of that resource will become a reserve. As a single example there has been talk of putting a new underground mine in at Canonbie in Scotland as part of a long-term plan to supply the Longannet power station.

It is thought that deep seams run for miles underneath the Canonbie area and could yield 400 million tonnes of coal, enough to keep the Longannet power station going for the next 80 years.

You may note that the 400 million ton figure is twice the volume that BP considered the totality of the British Reserve in 2005.

The predictions of the imminent death of the Coal Industry are likely thus to be somewhat premature.

Now let me close by addressing two other points. One of the technical advances that moved so much of the British reserve into the resource column instead was that it became, with the advent of larger mining equipment, much cheaper and simpler to mine coal from the surface deposits of places such as Wyoming or Queensland, than it did to mine it from underground. When the basic technology is not much more complex than using larger and larger shovels to dig the coal out of the ground there is, as yet, no need for the more complex technologies that might, at greater expense, make more of the coal a reserve, rather than a resource. The world has more than enough coal, and coal producers that its price is largely kept down by competition. (Technology was the second part of my ASPO paper, though I will forego going down that part of the argument in this post).

Consider, for example, that until recently Botswana found that it was cheaper to buy the power that it needed from South Africa, rather than expand its own coal-fired power system. Then South Africa decided it needed that power itself and so Botswana was thrown back on its own resources. It is expanding its sole coal mine and installing additional power stations to raise generation from 120 MW to 820 MW. In the process they have established that the coal deposits in the country may well be up to 200 billion tons of coal. However, since there is not that much demand, as yet, and Botswana is a land-locked country only 17 billion tons are currently counted as a reserve. However there was a strong Chinese presence during my visit there, and the situation may therefore change.

I won’t comment much on the growth of coal in China, which is moving toward consuming about half the world’s production, Euan Mearns has just covered that in a much better way than I might. But I would add some thoughts to his post.

Firstly the Chinese have been building a lot of coal-fired power stations, and are unlikely to have built any of them without an assured supply of coal for each. Secondly this is not the only market for coal in China. I was in Qinghai province, over by Tibet. The province gets most of its power from hydro, but uses coal to power the brickworks that are ubiquitous in the region, as dwellings are being converted from mud-brick to fired brick.

China has a domestic problem to keep the many regions happy with the central government, and this is causing them to put in massive amounts of infrastructure to allow access to all regions of the country. It is at a scale much greater than that I have seen anywhere else, even in remote regions, such as some of those I travelled. Rail and truck transport of coal is not the only way it can be shipped. Coal pipelines are an alternate way of doing it, but oddly, whenever the technology reaches a point of serious discussion freight costs seem to reduce, at least temporarily. I do not see, therefore, that over the longer term, coal supply to the various power plants being as great an issue as others foresee.

My overall conclusion is, therefore, that there is plenty of coal. The price is kept down by its international availability, and because it is so ubiquitous I anticipate that as oil becomes more expensive, so the nations of the world will, increasingly move to using this as an available reserve.

Coal reserve considerations

I am still travelling but have found a book that will help me with the discussion of historic mining that is the usual current fare on Sundays (an autobiography from 1910 that is illustrated). Wanting to include some of this in the next post, I am going to step a little away from the topic this weekend and instead post again an earlier comment on coal reserves. It is also a topic that I will expand on in the future, but here is some background.

So you want to start a coal mine – where to begin? The first thing that you need is some coal, and in most cases today the coal seams that are exposed at the surface are known and owned by somebody else. So you will need to drill some exploratory boreholes down into the earth to find some suitable seams. For the sake of example I am going to use a project in South Africa. Other than having found it on the Web I know nothing about the coal, or the company so please don’t think of this as any endorsement or otherwise of the property.

Quite often new developments are based on where folk have found coal before. If there is a mine then, with deposits such as coal there may well be more coal, out beyond the boundaries of that original property. This is because of the way that coal was formed as vegetation spread over a large swampy area that ran for many miles. Unlike oil, once the vegetation was put in place, and slowly buried, it changed composition in place, and so coal seams may well run for many miles, although they may get different names in different places. Thus, for example the Pittsburgh seam extends over perhaps 8,000 sq. miles, while the Herrin seam in Southern Illinois has about the same range (And this does not include cannel coal, some of which is found in Kentucky, which was moved from the original site by the actions of water).

Because these quasi-horizontal seams were formed over such a large area, and because the stratigraphy (order of the rocks as you take a core down through them) will remain relatively constant, in many cases, it is not necessary to make the exploration holes that close together. Thus in the example above, the boreholes were placed some 4 km apart and the volume of coal inferred from the thickness of the beds found, and assuming that they ran continuously from borehole to borehole.


This is referred to as:

Reconnaissance Resource: is quantified as a minimum one cored borehole with coal quality data per 400 ha (approximately 2km spacing) for multiple seam deposit types, while for thick interbedded seam deposit types a reconnaissance coal deposit is quantified by a minimum one cored borehole with coal quality data per 1,600 ha (approximately 4km spacing).

In this case the property was drilled over an area that required 402 boreholes, and it identified 5 seams of coal that could be produced. However it brings me to the point of this post, which is how much of the coal can be counted and as what type of reserve. This is quite an important distinction, since in the debate that I have had with others in the past, including David Rutledge, the confusions of what has been counted and how it is defined is often overlooked. This is how the information was reported:


So what are the different definitions of the reserves? Isn’t this coal all a reserve, well no, the coal seam is divided into different quality of reserve, depending on how far it is from one of the proving wells. Let’s consider the official definitions:

Points of Observation This is the point where the coal presence has been physically seen either at an outcrop or in the recovered core from a borehole.

Inferred coal reserves are those that can be extrapolated from a Point of Observation but to a distance of no more than 2 km.

Indicated coal reserves are those that can be extrapolated from a Point of Observation, but to a distance of no more than 1 km.

Measured coal reserves are those that can be extrapolated from a Point of Observation, but to a distance of more than 500 m.

So that, when we are assessing the amount of coal that we consider available at a site, if we are conservative, we are only reporting the measured coal reserves as that within 500 m of each of the boreholes, even though the consistency of the seam has seemingly been proven over many kilometers. It is a very conservative system, note that only 17% of the likely coal is considered a measured resource. To make this post more comprehensive, and to include some definitions that I will come back to in later posts, let me now go on to include the ranges of economically recoverable coal (in terms of thickness and depth) that are currently accepted.

In terms of international definition of resource the US Geological Survey has set up some definitions, that have also been adopted by the Federal Government, in their Code of Federal Regulations, which were just revised. The new regulations are a little more inclusive than the older ones (at the USGS site).

(5) Coal reserve base shall be determined using existing published or unpublished information, or any combination thereof, and means the estimated tons of Federal coal in place contained in beds of:
(i) Metallurgical or metallurgical-blend coal 12 inches or more thick; anthracite, semi-anthracite, bituminous, and sub-bituminous coal 28 inches or more thick; and lignite 60 inches or more thick to a depth of 500 feet below the lowest surface elevation on the Federal lease.
(ii) Metallurgical and metallurgical-blend coal 24 inches or more thick; anthracite, semi-anthracite, bituminous and sub-bituminous coal 48 inches or more thick; and lignite 84 inches or more thick occurring from 500 to 3,000 feet below the lowest surface elevation on the Federal lease.
(iii) Any thinner bed of metallurgical, anthracite, semi-anthracite, bituminous, and sub-bituminous coal and lignite at any horizon above 3,000 feet below the lowest surface elevation on the Federal lease, which is currently being mined or for which there is evidence that such coal bed could be mined commercially at this time.
(iv) Any coal at a depth greater than 3,000 feet where mining actually is to occur.
(6) Commercial quantities means 1 percent of the recoverable coal reserves or LMU recoverable coal reserves. . . . .
(19) Logical mining unit (LMU) means an area of land in which the recoverable coal reserves can be developed in an efficient, economical, and orderly manner as a unit with due regard to conservation of recoverable coal reserves and other resources. An LMU may consist of one or more Federal leases and may include intervening or adjacent lands in which the United States does not own the coal. All lands in an LMU shall be under the effective control of a single operator/lessee, be able to be developed and operated as a single operation, and be contiguous.
(20) Logical mining unit (LMU) recoverable coal reserves means the sum of estimated Federal and non-Federal recoverable coal reserves in the LMU.
(21) Maximum economic recovery (MER) means that, based on standard industry operating practices, all profitable portions of a leased Federal coal deposit must be mined. At the times of MER determinations, consideration will be given to: existing proven technology; commercially available and economically feasible equipment; coal quality, quantity, and marketability; safety, exploration, operating, processing, and transportation costs; and compliance with applicable laws and regulations. The requirement of MER does not restrict the authority of the authorized officer to ensure the conservation of the recoverable coal reserves and other resources and to prevent the wasting of coal. . . . . .
(23) Minable reserve base means that portion of the coal reserve base which is commercially minable and includes all coal that will be left, such as in pillars, fenders, or property barriers. Other areas where mining is not permissible (including, but not limited to, areas classified as unsuitable for coal mining operations) shall be excluded from the minable reserve base.
(24) Mine means an underground or surface excavation or series of excavations and the surface or underground support facilities that contribute directly or indirectly to mining, production, preparation, and handling of coal.

It is important to note item 23, since no underground method of mining will remove all the coal from a seam, but will leave significant quantities of the coal in place as pillars to hold the roof up, and thus protect the miners and their equipment from the roof falling in. (In the African example the percentage of coal that might be recovered is about 50% of the reserve volume).

I should be back with some quotes from the book, and discussion of the considerable progress that has been made in mining since the early days, starting back next week