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Murray: Obama cannot deliver on climate promises

Bob Murray, the outspoken CEO of US miner Murray Energy, delivered a rousing defence of the US coal industry.

Bob Murray, the outspoken chief executive officer of US miner Murray Energy, delivered a rousing defence of the US coal industry on Monday morning, saying calls for action on climate change are a “politically motivated power grab”.

Murray cautioned the audience at the World Coal Leaders Network in Barcelona against expecting that the Obama administration can deliver on any commitment at the COP21 talks in Paris in November, noting that Democrats do not control the US senate, which would need to ratify any agreement. Still, Murray described himself as “more pessimistic than anybody”, and sees few signs of an improvement in the market before 2017. He added that a variety of factors, including a potential victory for Hilary Clinton in the 2016 presidential election and a lack of approvals for liquefied natural gas export terminals, which would reduce a glut of domestic shale gas, might prolong the US industry’s pain beyond 2017.

Murray has five lawsuits pending against the Obama administration, which he blames for the closure of 411 power plants, and sees the industry’s task as convincing US voters that coal needs to retain a 30% share of electricity generation. With natural gas recently overtaking coal as a share of US generation, at 37%, coal producers have a limited amount of time to regain the initiative.

The US coal industry, suggested Murray, might be reduced to two producers following asset sales, restructurings and bankruptcies, and he wanted Murray Energy to be one of them.

Murray’s pessimism about the industry’s fortunes comes despite his company being one of the few active buyers of assets. In February, Murray Energy took control of Chris Cline’s Foresight Energy, while in August it bought the La Francia and El Hatillo surface mines from Goldman Sachs. Acquiring Foresight allowed Murray Energy to complement its Appalachian holdings with an Illinois Basin asset base, while the Colombian assets allow it to mix lowersulphur Colombian coal with its higher-sulphur US output.

When asked whether he had any plans to make any more international acquisitions, Murray noted that Murray Energy could increase its current 85 million tonnes per year production to nearer 115 million tonnes without any capital expenditure, but that he wouldn’t “close the doors on looking at anything. But what people have for sale at the moment are cats and dogs, and I don’t want them.”

He promised to stick by his “concentric ellipses” approach, which identifies mines close to power plants with scrubbing technology, and with high CV resources, low costs, longwall mining and low dependence on rail transport.

This content is provided by Coaltrans Conferences for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.

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