US coal export capacity will be stretched -experts

By Bruce Nichols

MIAMI, Feb 1 (Reuters) - Potential port problems are the biggest threat to U.S. coal exports to Europe, but mines and railroads also could have issues, according to speeches and interviews at the Coaltrans Americas conference that ended Friday.

"Ports are the bottleneck to increased exports this year and perhaps next," said William Rieland, senior vice president for sales of CONSOL Energy Inc (CNX.N: Quote, Profile, Research), a mining concern that owns CNX Marine Terminal in Baltimore, Maryland.

CNX recently exemplified the risks, halting coal-loading for a month to fix a pier. It was expected to reopen this weekend.

Analysts predict 20 million tons of U.S. steam coal could go to Europe this year, up from 10 million in 2007, because traditional supplies have shifted to booming, higher-paying Asia, and Russia has had problems making up the shortfall.

Theoretically, the United States has capacity to meet Europe's needs, expected to last through 2009. But conference participants said actual performance may fall short.

U.S. ports have cut staff, parked equipment and arranged stockpiles to serve a much smaller coal export load, 6.5 million tons in 2006, experts said. Piles laid out for shippers bringing multiple coal types are not suited to a sharp export increase, analysts and industry officials said.

"Some of those things you can overcome, but it takes time to hire and train workers, to realign your piles," one coal consultant said. "It's not something that can get anywhere near capacity in 2008."

Miners of the most popular U.S. export coal, Central Appalachian, said they could have problems, particularly in 2009. Production has declined slowly as seams play out and investment in new mines is hobbled by government regulation and concerns that demand will not last, operators said.