|This article needs additional citations for verification. (April 2010)|
|Traded as||NYSE: CNX
S&P 500 Component
|Industry||Coal mining, Natural Gas Production|
|Headquarters||Cecil Township, Pennsylvania, United States|
|Revenue||US$5.236 billion (2010) |
Consol Energy Inc. // is an American energy company with interests in coal and natural gas production headquartered in the suburb of Cecil Township, in the Southpointe complex, just outside of Pittsburgh, Pennsylvania. Consol Energy is the leading producer of high-BTU bituminous coal in the United States and the U.S.'s largest underground coal mining company. As of 2011, Consol had 4.4 billion tons of proven reserves, mainly in northern and central Appalachia and produced nearly 64 million tons of coal in 2010. The company has natural gas reserves totaling 3.7 trillion cu. ft. as of 2011 and employs more than 8,800 people.
- 1 History
- 2 Operations and financials
- 3 Corporate responsibility
- 4 Naming rights
- 5 See also
- 6 References
- 7 Further reading
Consolidation Coal Company (1860–1991)
Consol Energy was originally created in 1860 as the Consolidation Coal Company after several small mining companies in Western Maryland decided to combine their operations. The company was formally established in 1864 and headquartered in Cumberland, Maryland for the first 85 years (1864–1945), where the company became the largest bituminous coal company in the eastern United States.
Western Maryland's coal production rose about 1 million short tons in 1865, exceeded 4 million short tons by the turn of the century, and reached an all-time high of about 6 million short tons in 1907. A small amount of the coal production in the early 1900s was premium smithing coal (as in blacksmith) that was specially processed and delivered in boxcars to customers throughout the United States and Canada. In 1945, Consolidation Coal Company was merged with Pittsburgh Coal Company and its headquarters were moved to Western Pennsylvania. 
With growing demand for natural gas in the U.S. following World War II, Consolidation Coal Company was acquired by the Continental Oil Company, or Conoco, in 1966. By the mid-1970s, Consolidation Coal Company operated 56 mines and employed nearly 20,000 miners. In 1981, Conoco along with Consolidation Coal Company was acquired by DuPont, which then sold some of its coal mining interests in Pennsylvania to the German energy company, Rheinbraun A.G.
Consol Energy (1991-present)
Looking to invest in coal reserves in North America, Rheinbraun A.G offered Dupont stakes in coal mines and $890 million in 1991 to join in an equal part joint venture creating Consol Energy. Despite the cost of coal dropping in the 1990s, Consol's long-term contracts and investments in longwall mining techniques allowed the company to remain competitive. In 1998, Dupont sold the large majority of its stake in Consol, leaving it with only a 6 percent share and Rheinbraun A.G with a 94 percent interest. Consol also acquired Rochester & Pittsburgh Coal Company in 1998.
In 1999, Consol underwent a public offering (NYSE: CNX) in order to pay down some of the debt the company had incurred with the majority buy-out from Dupont and the acquisition of Rochester & Pittsburgh Coal Company. Due to uncertainty surrounding demand for coal in the early 2000s, Consol began to place a greater emphasis on diversification, primarily into natural gas. Consol's first major natural gas investment was through the acquisition of MCN Energy Group Inc.'s methane reserves in southwestern Virginia for $160 million. In 2001, Consol acquired Conoco Inc.'s coalbed methane gas production assets in southwestern Virginia.
Consol subsidiaries CNX Ventures and CNX Land Resources also began diversification efforts during this time into methane gas and timber and farming. In 2006, Consol spun off its subsidiary CNX Gas as a standalone company, but retained 83 percent of the new company's shares. On June 28, 2006,Consol Energy entered the S&P 500 replacing Knight-Ridder. In 2007, CNX Gas also began investing heavily in natural gas exploration in the Marcellus Shale in Pennsylvania. In 2010, Consol acquired Dominion Resources Inc.'s natural gas production and exploration assets for 3.74 billion dollars, which included nearly 500,000 acres of Marcellus potential, tripling Consol's position in the Marcellus to approximately 750,000 acres. Consol also acquired all of the remaining publicly owned shares of CNX Gas for a cash payment of $991 million.
In 2010 Consol was also named by Forbes magazine as one of the "100 Most Trustworthy Companies." in 2011, Consol entered into two separate joint venture agreements to expedite its natural gas production. The first, an agreement with Noble Energy, Inc. will jointly develop the company's 663,350 Marcellus Shale acres in Pennsylvania and West Virginia. The second joint agreement, with Hess Corporation, will jointly explore and develop Consol's nearly 200,000 Utica Shale acres in Ohio. Consol also began an expansion of its Baltimore Terminal in 2011 to increase capacity from 14 million to 16 millions tons to increase its revenue from sales of its metallurgical coal.
Operations and financials
Divisions and areas of business
Consol Energy operates as a producer of multiple energy sources, primarily for electric power generation. The company's largest assets consist of its coal and natural gas divisions, but Consol also maintains support services including Baltimore Marine Terminal, River Division, Research & Development, Land Division, and Fairmont Supply Company.
Consol's Coal Division operates 12 coal mining complexes in four states in the United States, including Pennsylvania, West Virginia, Virginia and Utah. As of 2011, the company maintained an estimated 4.4 billion tons of proven and probable coal reserves and produced nearly 64 million tons of coal in 2010. The coal produced from these mining operations are sold from offices in Pittsburgh, PA, Philadelphia, PA, and Atlanta, GA. Consol's coal division received the U.S. Department of the Interior's Office of Surface Mining National Award for Excellence in Surface Mining for the company's innovative reclamation practices in 2002, 2003, and 2004.
Consol's Gas Division deals with natural gas exploration, development and production, producing nearly 128 billion cubic feet of coalbed methane in 2010. With the acquisition of the exploration and production business of Dominion Resources in 2010, the company has access to over 3.7 trillion cubic feet of proved clean-burning natural gas reserves in Pennsylvania, West Virginia and Ohio, including coalbed methane and shale beds. The company currently has nearly 13,000 net producing wells.
As the owner of more than 430,000 surface acres in the U.S. and Canada, Consol Energy has a Land Division that oversees various projects, including selling reserve land that the company does not develop, land donation and conservation projects. Consol Energy has also been recognized for its reclamation efforts by national and state governments and has worked in partnership with several conservation groups on land reclamation projects.
Consol's River Division oversees transportation of coal and other products on the Monongahela, Allegheny, Kanawha, and Ohio Rivers with 22 tow and tugboats and over 620 barges. Consol's Baltimore Marine terminal provides coal transshipment services from rail cars to ocean transport ships.
Consol's Water Division is involved in water purification with a focus on treating wastewater produced as a byproduct of hydraulic fracturing. The company operates reverse osmosis water purification plants and has a minority interest in a company that develops solar-powered water purification systems which, as of July 2012[update], was conducting a pilot test at one of Consol's gas drilling sites.
Consol also maintains the Fairmont Supply Company, dedicated to the sale and distribution of mining services and equipment. Additionally, the company operates the largest privately owned research and development facility in the industry that is devoted exclusively to coal and energy utilization and production.
In 2010, Consol Energy had an annual revenue of $5.236 billion. Customers primarily include electric utilities and steel mills in the U.S., but demand from European utilities has increased during the 2000s. Consol Energy was ranked number 428 on the Fortune 500 list in 2011.
In September 2009, several thousand fish were killed in Dunkard Creek, Monongalia County, West Virginia. While state officials attributed the fish kill to a golden algae bloom, an investigation by the Environmental Protection Agency claimed that mining discharges from Consol Energy's Blacksville No. 2 mine created the conditions for the golden algae bloom. After halting operations at the mine following the fish kill, Consol was allowed to continue mining operations after coming to an agreement with the West Virginia Department of Environmental Protection to submit a proposal for discharge treatment plants by April 15 of 2010. Consol also invested $200 million in a water treatment facility and paid a $5.5 million federal penalty to the U.S. Department of Justice and half to the West Virginia Department of Environmental Protection in 2011. The company maintains that it was never found liable for the fish kill.
As a producer of coal and natural gas, the environmental impact of coal mining and natural gas drilling has been a subject of controversy for Consol Energy. Despite this, the company has been recognized for its efforts at environmental protection and was awarded the U.S. Environmental Protection Agency Climate Protection Award in 2002. Additionally, Consol maintains ongoing environmental efforts aimed at restoring and enhancing property managed by the company and has worked with conservation groups including Ducks Unlimited and the National Wild Turkey Federation on habitat restoration efforts.
An ad by the National Rifle Association critical of President Barack Obama that was filmed on Consol's Blacksville No. 2 coal mine in West Virginia became an issue of political debate in 2009. The National Rifle Association intended to ask miners the question "How do you feel about having your Second Amendment rights taken away if Obama becomes president." Word spread among pro-Obama miners who contacted their union, the United Mine Workers of America, resulting in 440 miners taking the day off to avoid appearing in the ad in a contract-sanctioned protest, halting production at Consol's Blacksville No. 2 coal mine.
Lobbying efforts on the part of Consol have also been an issue of controversy. In the first quarter of 2010, Consol spent $1.02 million in lobbying expenses on issues relating to the coal mining and natural gas industries.
Consol Energy has put its name to two sports facilities in its Pittsburgh-area. In 2007, Consol energy purchased the naming rights to Washington, Pennsylvania's minor league baseball team the Washington Wild Things' field, Consol Energy Park. Consol later purchased the naming rights to the Consol Energy Center in 2008; the arena that hosts the Pittsburgh Penguins National Hockey League team. It is estimated that Consol Energy won the bid for naming rights at a cost between $2.0 - $4.0 million per year, for 21 years.
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- "48 Individuals And Organizations Honored For Leadership And Innovation In Protecting The Climate And Stratospheric Ozone". Environmental Protection Agency. Retrieved 1/23/2012.
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- Simonich, Milan (December 16, 2008). "Consol wins naming rights for arena". Pittsburgh Post-Gazette.
|Wikimedia Commons has media related to Consol Energy.|
- Brugger, Maryland: A New Guide to the Old Line State, Johns Hopkins University 1999, ISBN 0-8018-5980-8
- Albert L. Feldstein, "Feldstein's Historic Coal Mining and Railroads of Allegany County, Maryland", Publisher Albert L. Feldstein, 2000, ISBN 0-9701605-0-X (This book consists of 135 historic Allegany County coal mining and railroad related photographs. These are primarily from the early 1900s. Accompanying each depiction is an historical narrative with facts, figures, dates and other information. Included within this number are 23 biographies of individuals associated with the history of coal mining in the region.)