Environment
5:18 pm
Tue July 23, 2013

Eleven Months Later, Delays Continue in Kentucky's India Coal Export Deal

It’s been nearly a year since Kentucky officials announced plans to send up to 9 million tons of coal a year to India, and the first shipment still hasn’t been sent.

Last August, Kentucky Governor Steve Beshear stood with coal industry representatives to announce a landmark export deal. An Indian company called Abhijeet inked a $7 billion dollar deal with a company called FJS Energy to send 6 to 9 million tons of Appalachian coal annually to India. At the time, Beshear praised the deal as a promising first step, and a way to help revitalize the lagging Eastern Kentucky coal industry.

“International exports present a promising opportunity for Kentucky coal producers, as is demonstrated by this deal, and consequently for our communities whose economic vitality depends on coal,” he said. “This is a good first step, with the possibility for a lot of growth.”

But nearly a year later, the first shipment hasn’t left Appalachia.

Some of that coal was supposed to come from Booth Energy, but scandals in India’s coal industry emerged right after the deal was announced. Now, Booth Energy CEO Jim Booth says he’s waiting for Indian regulators and companies to resolve their issues before the first shipment of coal leaves.

Booth says his company has an MOU to provide the coal when it’s needed, but the deal doesn’t make him responsible for producing coal that India isn’t taking.

“I have a relationship with them that whenever the timing is right, I think I’ll have the first ability to get into their market,” Booth said. So right now, they have issues. I think a lot of it is beyond their control. And whenever they get those things resolved, I should be first in line.”

During the first quarter of this year, coal production in Western Kentucky for the first time surpassed Eastern Kentucky. Booth says he hasn’t given up on Eastern Kentucky coal, but that exports alone won’t make up for steep declines in domestic coal use.

“We can increase our exports, but relatively, on a scale that would not save the industry,” Booth said.

State data from 2011—the latest available—shows the commonwealth exported 5.5 million tons of Eastern Kentucky coal to foreign countries. That’s only a small percentage of the more than 68 million tons of coal the region produced that year.