CONSOL Executive: Region's Assets Need to be Touted
Washington PA Observer-Reporter
10 April 2010
By Michael Bradwell, Business editor
mbradwell@observer-reporter.com
McMURRAY - A Consol Energy executive said Thursday that this week's
mining disaster at a competitor's mine underscores the need for safety
to be tantamount to all other goals in the mining industry.
Nick DeIuliis, executive vice president and chief operating officer of
Consol Energy Inc., said Thursday that the disaster at Massey Energy's
Upper Big Creek mine in West Virginia "is a striking example as to why
safety needs to be a top priority for coal and gas extraction."
While acknowledging that the coal industry does not have the details of
the Massey disaster, "Safety trumps everything - it's more important
than production or unit costs," DeIuliis said during his address to the
Washington County Chamber of Commerce's Executive Series dinner at
Valley Brook Country Club.
"If your priorities get a little skewed, you're running the risk" of
endangering employees, he said.
DeIuliis, who also is executive vice president and COO of Consol's CNX
Gas subsidiary, stood in for Consol Energy Chief Executive Brett Harvey
on Thursday, explaining that Harvey was dealing with a bout of
laryngitis.
While safety is at the forefront of Consol's operations, DeIuliis said
he believes his company and the energy industry here need to do a
better job of telling the rest of the country about the vast amounts of
coal and gas reserves that are available in the region.
"We need to do a better job of articulating what this means to the
people of this region and what this region means to the rest of the
country," DeIuliis said, noting that the amount of energy that Consol
produces each year "is about 75 to 80 percent of what Exxon-Mobil
produces."
He noted that Consol's Bailey-Enlow Fork mine produces the equivalent
of 100 million barrels of oil a year, noting that the mine complex's
coal output "now goes as far afield as China and Brazil."
The Chinese demand for metallurgical coal prompted Consol to begin
branding its coal for the Chinese market earlier this year.
"China is basically coming to us" for its coal needs, he said, adding
that the sale of coal for export from Washington and Greene counties
and throughout Appalachia means that the region's economy can benefit
for years to come.
"The last time I checked, you can't move the coal deposits and shale
deposits from where they are," DeIuliis said.
Commenting on Consol's recent $3.5 billion deal to purchase the
Marcellus Shale assets from Dominion Resources, DeIuliis said the
combination of the additional 500,000 acres of Dominion's land in West
Virginia and Pennsylvania meshes perfectly with Consol's existing
assets, which includes existing coalbed methane and Marcellus acreage,
longwall mining and pipeline infrastructure.
While the combination should pay big dividends, DeIuliis said many
factors will determine its success.
"People keep asking us, 'Is the Marcellus Shale for real?'" he said.
"Absolutely, yes."
However, he said tapping the fairway's potential will require workers
with a variety of skill sets and adequate support services and
infrastructure "to make this happen sooner rather than later.
"Appalachia is the name of our game," he said, adding that Consol is
the largest natural gas producer in the chain.
However, as he has stated in previous discussions, DeIuliis said
regulatory issues, including the proposed cap-and-trade standards,
could blunt the region's ability to provide the natural gas that could
help the country achieve energy independence.
"We want to invest more than $1 billion in capital projects" in gas and
coal, he said. "But a lot of that investment is currently held up
because of regulatory issues."