West Virginia daily

St. Louis-based Arch Coal Inc., the country's No. 2 coal producer, says it is investing about $ 40 million to reopen Skyline coal mine in Helper, Utah, just two years after closing it and laying off 200 workers.

"We're in about as good a condition as we've been in some time," said Delynn Fielding, director of economic development for Carbon County, where the mine is located.

Fielding's words apply across the industry. Companies like Arch have seen profits surge and stock prices push toward records. Expansion plans are in the works, from new mines to coal-fired power plants. And in Washington, the new energy bill has lessened the fear of regulatory hurdles for future coal burning.

Coal is in the limelight this fall since increased demand and tight supply have pushed up prices, said Mark Reichman, an analyst with A. G. Edwards & Sons Inc. in St. Louis. Prices rose thanks to factors ranging from a train wreck last spring to economic growth in China, he said.

The price of a futures contract for a ton of coal in the Western United States rose from about $ 9 in June to $ 19. 50 in October, and that's no blip, Reichman said.

Globally, the coal supply tightened two years ago when China switched from exporting coal to importing to feed its own energy needs, said Rich Bonskowski, a geologist with the Energy Information Administration of the U. S. Department of Energy.

Supplies in the United States tightened further in May when two trains derailed on a track that carried roughly 370 million tons of coal annually, about a third of the nation's supply. Shipments will remain hindered until December, Bonskowski said.

The derailment had an outsized impact because utility companies hadn't built up coal reserves last year, expecting the price to drop, Bonskowski said. With winter around the corner and electricity demand expected to rise, utility companies now have little choice but to buy coal on the open market, he said.

Arkansas relies on coal for about 46 percent of its electricity. Entergy Arkansas, the state's largest electric utility, has two coal-fired power plants and said coal-supply problems were probably part of the reason for a 6 percent rate increase that took effect in October.

Coal carries hidden costs, such as the price of complying with air pollution rules, but as long as the price remains lower than other energy sources it will be attractive to utilities, Bonskowski said.

Arch executives have outlined $ 400 million worth of investment to open and expand mines from West Virginia to Utah, and Peabody's management has announced expansion plans that could generate 75 million tons of coal in five years.

Peabody's stock hit a record high Oct. 3 when it closed at $ 86. 12 per share on the New York Stock Exchange. Arch soon followed when its stock hit an all-time high Nov. 3, closing at $ 80. 31. Both stocks have declined slightly since that time.

New federal law, such as the 2005 Energy Policy Act passed in August, also is paving the way for coal's expanded use, Bonskowski said. The biggest regulatory changes are geared toward the electric utility plants, which consume about 90 percent of all coal in the United States, he said.

But Peabody has faced stiff opposition from the Sierra Club and other environmental groups as it presses forward with new power plants in the Midwest.

The Sierra Club plans to resist new coal plants where they are proposed nationwide because emissions from the plants increase cases of asthma and other respiratory diseases, said spokesman Brendan Bell.

"If even a fraction of these [power ] plants get built, we will be stuck with these plants for 30 or 40 years," he said. Information for this article was contributed by Arkansas Democrat-Gazette staff.

This is cache, read story here