TULSA — Coal may be the country's most unpopular fuel source, but that doesn't appear to be hampering Alliance Holdings GP LP.
Alliance is a regular among the state's top companies.
This year, the holding company that owns coal company Alliance Resource Partners LP's assets ranked No. 7 on the Oklahoma Inc. list, buoyed by a 62.5 percent increase in total returns.
CEO Joseph W. Craft III said coal remains an important resource in the U.S., despite regulations seemingly meant to curb its use.
“Low-cost energy has been the driver of the U.S. economy,” he said Oct. 9 at the Governor's Energy Conference in Tulsa. “We're seeing that today all across the globe.”
He said cheap coal is one of the reasons Oklahoma has the fifth-lowest retail electricity price in the United States.
Craft said coal production is expected to reach about 1 billion tons in the United States this year, with about 90 percent of that to be used domestically.
Alliance is the sixth-largest coal producer in the nation, with a footprint primarily in the eastern U.S.
He said domestic utility companies are Alliance's primary customer, noting coal is responsible for about 40 percent of the country's electric generation.
The U.S. Energy Information Administration projects coal still will account for about 37 percent of the country's electricity in 2035, so Craft remains optimistic about coal's future.
He said he expects coal to remain a significant part of the country's energy mix, despite becoming a partisan issue in Washington, D.C.
“Coal will continue to be competitive, primarily because it is a low-cost fuel,” Craft said.
Alliance has about 4,000 employees, including 100 at its Tulsa headquarters. Craft said it adds about 400 or so a year as production increases.
In July, Alliance reported record coal production for the first half of 2013, with revenues topping $1.1 billion.
The company expects to produce nearly 40 million tons of coal this year, while revenues could climb as high as $2.25 billion, despite lower coal prices, Chief Financial Officer Brian Cantrell said in Alliance's July 26 earnings call.
Craft said Alliance is on track for its 13th consecutive year of record results.
The holding company has announced distributions 12.5 percent higher than 2012, he said during the July earnings call.