Published in the August 2007 American Longwall Magazine

Hill cited scrubber technology and the increased interest in coal-to-liquids and gasification for the return of the spotlight to the basin. With continued good luck, it said, the picture is even better for the area.

The strongest of the region's players, the group said, are those producers with the largest reserve holdings. Peabody Energy holds the top hat in that category, followed by other operators such as Cline, Alliance, Arch, International Coal, Murray Energy and Drummond.

Last year the top 15 producers in the Illinois Basin had controlling interests in 97% of the production being realized. Ten years ago, the top five producers controlled 49% of production; the number is now up to 77%.

Among the trend observations and predictions made by Hill is the likely depletion of larger surface mine reserve bases, and the development of a smaller area for mining. Add to that the probability that the underground reserve base, which Hill compares as fivefold to tenfold larger than the Pittsburgh No. 8 seam, will see development within the next decade.

"The study identifies enough projects to suggest that Illinois Basin production capacity will probably expand to 105 million tons in 2007," Hill said.

"Assuming demand is present, the Illinois Basin's production could expand to 154Mt by 2016 with an upside potential to nearly double that."

High sulfur coal will also see an increased interest in the coming few years, Hill noted. Power plants already in operation that are scrubbing or will begin doing so between now and 2010 will create a new demand for the coal - to the tune of 250Mt. By 2014, the supply scrubbed is estimated to be about 361Mt.

Transportation will also see some movement, the firm predicted, especially in the barge market thanks to competition from other regions such as the Powder River Basin. "Our analysis of the impact of higher transportation rates on the industry suggests the railroad's current pricing policies will squelch growth in the PRB," it said.

"The main benefactors of the higher transportation rates are higher demand for Illinois Basin, NAPP, CAPP, and imported coal."