Continental Coal carves out a niche

07/16/2013 12:00 AM

07/16/2013 10:39 AM

OAwakened by the blasts above, the Mulberry coal seam squints at the sun after 300 million years in the dark.

Its covers — a thin sheet of topsoil, then maybe 15 feet of clay and at least 50 more of blue shale — have been laboriously stripped off in a half-mile-long gash in the Bates County countryside. The pit is alive with crawling, ravenous machines, all big for their kind, all garbed in dirty Caterpillar yellow.

This is the Hume II, the last operating coal mine in Missouri.

Less than 90 miles south of downtown Kansas city, Phil Tearney’s pickup bumps behind a freshly fueled bulldozer breaking trail for the boss through the spoil slope, a scramble of rock, clay and mud. “We move a million cubic yards of this stuff a month,” he said of the rubble.

Not immediately obvious in the pit below was the point of all this effort — ancient algae and swamp vegetation squeezed into the shiny, ebony rock of carbon.

Tearney motioned to a section at the foot of the man-made cliff. A single excavator sat atop a band of black, clawing at it and swinging an arm toward a waiting truck.

“That’s the fastest part of the operation,” rued Tierney, the president of Continental Coal, watching his restless and relentless machines gobble up the 31-inch-thick Mulberry, “because there’s not that much of it.”

Not much perhaps, but here and there enough for his Overland Park company to have carved out a unique niche in the local economy. For the 36,000 tons of fuel it extracts in the average month, Continental coal has just four customers.

In contrast, a few miles away, endless trains of hopper cars dump Wyoming coal to be burned in power generators. Less sulfurous, the product of the Powder River Basin also sells for about a third of most Midwestern coal. Meanwhile, supplies of cleaner natural gas are expanding, and fields of wind turbines flail away to the west.

Even Continental’s truck scale is powered by a solar panel.

It’s a tightrope act, but the litle coal company has successfully kept its balance sheets amid the seismic shifts of American energy production. The latest, June’s fresh push by President Obama to slash carbon dioxide emissions, has not been good for the nerves, Tearney concedes.

Still, Continental has thrived since the Kansas-State-trained CPA, and his West Point and Harvard grad partner, William Moore, left their crude oil business to hopscotch their machines between old coal fields already worked out in previous centuries.

Passing a quarter section that promised beans on the way to the Hume, Tearney said: “There’s coal under that; we just don’t know when exactly we’ll come get it.” And then 60 feet of digging to get to 27 inches of coal seam. “We’re always looking for something with a little better stripping ratio.”

A moment later came treelines that cloaked spoil ridges and water-filled pits left by generations of colliers before them. Here and there on both sides of the state line, Continental roots up previously untouched pastures and fields, but unlike many of its predecessors, the company fills in the topsoil behind and leaves government-approved landscapes.

“They stripped with shovels all around us, but they could only go to about 40 feet. We come along 50 or 60 years later, find these pockets that they’d left. We core drill them, we prove them up, we permit them,” Tearney said. “They’re typically not real big areas. We have to pick up and move every two to three years.”

Smaller, more nimble than past colliers who relied upon deep-sunk shafts or creeping steam and then electric shovels, these contrarians make a good living for themselves and their workers in an industry thought dead in Missouri for decades.

“We sell twice as much coal, and we have four times as many employees,” Tierney said, as when they bought a small mining operation in 1995. But this is no ever-growing tech company, he emphasizes. Continental Coal has found its level of operational efficiency.

Changing business

Once, the hot-burning coal around Rich Hill fed locomotives, but railroads switched to diesel-electric in the 1940s and ’50s. Now there’s even talk of converting the big engines to natural gas.

Once the old locomotives waited patiently for the hoppers to fill with volitive and valued Bates County bituminous. No more.

“There’s no way to rail it,” Tearney said of his coal, “and you start to run into expense problems when trucking too far.”

Which narrows the customer base, already skinny when your stunted band of coal is 3 percent sulfur and the public and government want the air clean. Wyoming’s coal beds, which can loom more than 10 stories high, measure at just a half percent, which in part explains all those heavy laden trains trundling in from the west.

Driving south by his biggest customer, the 736 net megawatt LaCygne power plant, Tearney noted that it consumed a good half of his mines’ production. “We provide 10 percent of the fuel of Unit No. 1 only.”

When Unit 1 of LaCygne came on line in 1973, the idea was to gorge from area pits run by giants such as Pittsburg Midway Mining or Peabody Coal. Now Continental’s local coal serves just as a hot sauce.

Missouri coal is dirtier, but it has less locked-in moisture, so it burns considerably hotter (11,000 British Thermal Units, about a third better than the Wyoming stuff). Mixed with western coal, it gets the BTU up.

Some coal is hauled to a couple of cement plants in the area, as well, but Tearney said the recession cut into their orders. And 20 semi-loads head north on U.S. 69 into Kansas City every day. Just like the old times, some Butler County coal still finds its way downtown to make steam at the venerable plant at 115 Grand Blvd.

Greenhouse challenge

Having spewed 8.4 metric tons of carbon dioxide into the atmosphere in 2011, the two units of the La Cygne power plant, owned equally by Westar Energy and KCP, are ranked as the second largest emitter in Kansas. The Iatan plant in Platte County’s two units released a similar amount.

Now comes Obama’s regulatory quest to cut America’s greenhouse gas emissions — 40 percent of which come from coal-fired power plants. The emphasis seems to be on negating construction of new plants to meet rising energy demands by pushing utilities to cleaner and increasing cheaper alternative energy sources and more conservation. As Philip Bump recently wrote for The Atlantic:

“Electricity production comes down to money, after all; if you figured out a way to generate gigawatts of power by leveraging the power of bare skin, America would be a nudist camp before sunset. We don’t love coal, we love that coal is cheap and is, by now, well-integrated into our power infrastructure.”

Coal is more lovable, though, if it’s sending your kids to college.

Already under pressure from expanding supplies of natural gas, the coal industry from Wyoming to West Virginia has argued that jobs — around 100,000 Americans dig and transport coal — are being snuffed out. The Hume mine creates no more than 50, inconsequential amid Washington policy struggles, but they’re mostly well-paying blue-collar jobs that any rural county can use.

“Any time the political climate comes against your industry, you’re always worried, especially if you’re a small businees,” Tearney said.

But the utilities already are pouring $1.2 billion into a major upgrade at LaCygne, new wet scrubbers, filters and catalytic systems to cut sulfur and mercury emissions — although not carbon dioxide, which involves a capture technology still not widely applied.

Chuck Caisley, KCL’s vice president for marketing and public affairs, said the retrofit made economic sense to keep LaCygne running for decades to come, and the numbers weren’t changing.

“While it is 40 years old, it is more efficient than some of the other plants in our system,” he said. “Obviously, if you produce more electricity for a ton of coal burned, that makes it more efficient, and burning less coal for more electricity means less carbon emission.

“We don’t know what our president’s rules are going to say for existing coal plants, and we probably won’t for several years,” Caisley said, but the bottom line is LaCyne is unlikely to be threatened.

Hume II’s niche

Making way for one of the Cat 777s, with its seven-foot tires carrying 80 tons of coal, Tearney laughed. “These are little trucks by today’s standards. The ones in Wyoming are 300 tons. You can’t imagine how big they are.”

Continental has a fleet of 22 highway semis to get the loads to the customers. But the real hardware, all of it Caterpillar, is at the mine: eight of the mammoth haul trucks, a dozen big dozers, eight of the largest excavators, smaller rubber-tired lifters, three drilling-blasting rigs, road graders for smoothing top soil, fuel trucks to keep it all moving.

The biggest machines can run more than million dollars new. Such expense may be justified by a big 24/7 production outfit, but Tearney says his is a daylight operation. He buys all of his equipment used, shipping it from as far as Canada or Japan.

An injured dozer sat idle, tracks and other massively heavy chunks lying in the mud, while a mechanic ministered to its ills with a welder. Other silent machines are lined up back of the action will be cannibalized so their comrades can keep moving. Kiddie-pool-sized tires, new and rethreads, are stacked near coils of rusting tracks headed for a scrap yard. Excavator buckets are laid out of the way, waiting to be called into the game.

Tearney points to them. “Those are just spares. The minute one breaks, cracks, it’s replaced. You’ve got to keep going.”

That’s the secret, he emphasized. Keep the momentum, keep the rhythm. And keep that rotary breaker over there fed. It crushes the coal down to roughly 2-inch nuggets while spitting out the chucks of iron pyrite and limestone that hide in the seam.

Farther south at West Mineral, Kan., is Brutus, a giant shovel that is a monument to all the coal that has been ripped from the earth on both sides of the state line. It’s also proof of the economic futility of trying to move and reuse such giants once the coal is exhausted.

Though minuscule in comparison with the deep navel-of-the-world pits out West, the scale of Continental’s operation is well suited for the terrain.

“We use more mobile equipment so we can move five miles down the road,” Tearney said.

About half of his machines, in fact, will roll west down the blacktop before long to open a new pocket in Kansas; the rest will shift to a field next door to the Hume pit.

Think of a ditch digger constantly throwing dirt over his shoulder, filling the trench behind him as he advances.

The creeping cut is freshly ripped on one side by daily shots of fertilizer and diesel oil chased by a stick of dynamite. The roaring dozers, some with 22-foot blades, shove away the tumbled tons of overburden in a continuous motion, padding the advancing slope of where they’ve already been.

At the moment, the coal is being excavated where the relatively flat limestone takes an odd, sharp dip, evidence of some unexplained geological event millions of years ago. Below the swayback, the single excavator scrapes it off a layer of fireclay, heaps it onto a waiting truck, and then taps its bucket on the load in a farewell pat.

Behind them will come the shapers and smoothers, quickly returning the top soil and sowing it with wheat to stem erosion.

“We’ve been in the Mulberry seam all these years,” said Tearney, with the exception of once when they bit into the deeper, richer Mineral seam. At around five feet thick, that was the one pursued by the Missouri’s coal barons in the 1800s who sent men deep to blast and claw the black stuff for 4 pennies a bushel. But usually the Mineral is economically out of reach to strippers, whether the old Pittsburg Midway draglines of the last century or Continental’s hydraulic excavators today.

“The way we mine, it makes reclamation a lot easier than if we were using a big dragline or shovel,” Tearney said.

In his Overland Park office just west of Corporate Woods, Tearney had shown visitors a just-received national award from the Interstate Mining Compact for reclamation of his previous pit, the Cottonwood Creek mine, a few miles from the current diggings.

Before the morning was over, he proudly showed off the company’s handiwork at Cottonwood Creek, a handsome, sprawling pasture of at least 600 acres with strategically placed watering holes. It, too, is sown with waving stalks of wheat used to hold the soil until the grasses take hold. It does not all end up in grazing; on the blacktop he had pointed to a rain wet field now in tillage that he had mined as well.

“When you follow the regulations and you’re compassionate about your product, you produce a good result,” he said, pointing to nearby woody areas that hid old mine workings. “Reclamation didn’t start until 1978,” after about a century of no environmental safeguards. “I find that amazing.”

Continental is responsible for this terrain for five years, fixing any erosion or other problems that might develop. One of the owners, who leased the land to Continental for the royalties, had no trouble selling his section just one year into the five that the company must babysit it, Tearney said.

“A dinosaur industry” is what he likes to call his business, nearly extinct around here. Though modern industries tickle microchips and microbes, his is old-school, tearing (and repairing) the earth with brute force.

But if it’s a dinosaur that he saddled up back in 1995, it’s been a pretty good ride.

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