Peabody looks towards a cleaner future for coal

Amidst strong financial results from 2006 Peabody Energy (BTU-N) took the occasion of its annual meeting to delve into the issue of a cleaner future for coal.

President and chief executive, Gregory Boyce, said the steep increase in the worlds energy consumption over the next 25 years demand is expected to increase by 75% — means that coal will continue to be a part of the mix.

But, he cautioned, the industry must be driven by the ultimate vision of near-zero emissions and carbon capture and sequestration.”

Coals high carbon emissions continue to be of grave concern to environmentalists around the globe especially in booming economies like Chinas where high emissions are rampant.

While Boyce said most of the plants already in the proposal stage are “advanced combustion” which makes use of more efficient technologies, the industry must still do more to encourage carbon capture.

As a beacon to the industry Peabody is looking to fund and build a FutureGen plant a plant that would commercialize carbon capture and sequestration.

The company is a founding member of the FutureGen Alliance, and through the alliance will select a host site for the plant later this year with the aim of completing it within five years.

Boyce also said it was necessary to bring on carbon capture technologies for existing coal plants, and said with such technologies, all coal plants are “carbon-capture ready.”

“Technology is the key to the twin challenges of energy independence and carbon concerns, he told the conference. We must accelerate commercial deployment of technologies that will maintain a secure, affordable energy supply to satisfy our growing energy needs and achieve the important sustainable goal of an improved environment.

The company says global coal use could more than double in the next 25 years a situation that presents a continued opportunity for a country like the United States. The U.S has 27% of the world’s coal reserves and is the single largest holder of the commodity.

St. Louis-based Peabody is in the midst of a five year run of improving financial results and hit record sales of 248 million tonnes in 2006 making it the worlds largest private-sector coal company.

First quarter earnings rose 45% to US$0.33 per share on net income of US$88.5 million. Revenues increased to US$1.37 billion from $1.31 billion in prior year while cash flow from operations grew to US$247 million and debt went down by US$100 million.

The company also reaffirmed its full-year earnings target of $2.10 to $2.75 per share.

In New York on May 1 the companys shares fell 24 to $47.74 on roughly 4.3 million shares traded.