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by Global Energy is to examine production reported for the previous 12 quarters at the mine level, and multiply the highest quarter of production at each mine by four to estimate annual capacity.
The rationale is that each mine has demonstrated that it can produce the given volume for a sustained period. The capacity estimates have been confirmed by discussions with coal producers and by experience. Although they consistently exceed the annual estimates published by the EIA, this is likely because most producers are able to “coax” extra production out of their operations by mining in the best areas, pushing equipment to its maximum operating parameters, and adding short-term labor and other techniques when profitable sales opportunities occur.
Further, capacity upgrades occurring throughout the year are better reflected by this approach, and new capacity additions (less closures) show up in a more timely fashion. A comparison of the proved in-place methodology to the EIA reported capacity confirms that the capacity estimates of each approach track very closely and move in the same direction each year (see Figure 3) . However, the proved in-place approach yields a consistently higher capacity estimate than that reported to the EIA.
A second approach we used is based on more timely statistics, but is more aggregated. The EIA weekly coal production report provides weekly estimates for U.S. coal production by state based on railroad car-loading data. The report for the previous week is published on the EIA Web site six days after the end of the subject week. The release schedule provides for ongoing, short-term evaluation of capacity.
For each state, Global Energy selects the highest weekly production for the past 52 weeks, and multiplies it by 50 to get a capacity estimate by state. State estimates can then be aggregated to estimate regional ( e.g., Central Appalachia, Northern Appalachia, etc.) capacity. The multiplier is used to account for the fact that vacation schedules and holidays affect annual mine production. This method is called the state or regional “Max Week * 50” approach by Global Energy.
The approach yields a capacity that is lower than the EIA reported capacity. Fig. 4 summarizes total U.S. coal supply estimates calculated using each approach, the reported EIA capacity, and the reported production for the period 1992 to 2005.
Permitted Coal-Supply Capacity in the Powder River Basin
While permitted capacity is available at the state or U.S. Bureau of Mines (USBM) regional level, the data are not uniform and often change over short periods of time. Global Energy continues to collect and refine its understanding of all mining-permit data, but the best uniform mine data is available for the Wyoming and Montana sections of the Powder River Basin (PRB). The state air permits set a maximum limit on the production of PRB mines and can be used to compare current production, reported capacity, and other measured capacity levels with maximum permitted capacity.
However, permitted capacity far exceeds the estimated production capacity and the production since 1992 (see Figure 4) . Currently, production is limited by the rail transportation capacity available