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NAPP producers optimistic about rollback of Stream Protection Rule

Coal producers in the Northern Appalachia region are optimistic about the expected rollback of the Stream Protection Rule.

Gary Broadbent, a spokesperson for Murray Energy Corp., said the rule bans longwall mining, "the most environmentally acceptable method" to extract coal. "The Obama administration's so-called Stream Protection Rule, which bans the utilization of the longwall mining system beneath dry ditches, which are often 1,000 feet below the surface, is flagrantly illegal, with no environmental benefit whatsoever," he told S&P Global Market Intelligence. "This unlawful and destructive rule is nothing but a thinly veiled attempt to destroy our nation's underground coal mines and put our nation's coal miners out of work."

Brian Aiello, spokesperson for CONSOL Energy Inc., said the court case was something the company was monitoring closely. "In general, we're very encouraged about the prospect of a regulatory and political climate that recognizes the importance of our domestic energy resources," he told S&P Global Market Intelligence.

Analysts recently said a rollback of the rule a vote is expected to pass through the U.S. House of Representatives on Feb. 1 would especially help CONSOL and CNX Coal Resources LP's Pennsylvania mining complex in particular, and would incrementally help other producers in Appalachia and the Illinois Basin. Much of this is due to the differences in topography between these mountainous areas full of small streams and waterways and the flatter, more open areas common in the Powder River Basin.

CNX said in an earnings call recently that it had nearly sold out of coal for 2017 and was working on sales for 2018 and 2019.

Environmentalists decried the rollback of the rule. Sierra Club Executive Director Michael Brune said in a release that the attempt to scrap it was a "clear case of putting polluters' profits ahead of the basic well-being of vulnerable communities."

Broadbent said the rule has been "illegally taken from the Surface Mining Control and Reclamation Act of 1977 in which Congress specifically said, at least three times, that the law applies only to surface coal mining. Upon publication in the Federal Register, we immediately filed our lawsuit to block this illegal rule."