Coal Keeps the Lights OnSouthern Legislative Conference

August 16, 2009

Alliance SnapshotCorporate Headquarters – Tulsa, Oklahoma

Alliance operates eight underground mining complexes in all major eastern coal producing regions

Four significant organic development projects identified in the growing Illinois Basin and Northern Appalachia high sulfur coal markets

Alliance currently has over 3,012 employees and expects to employ more than 3,700 by 2011

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Illinois

Indiana Ohio

Pennsylvania

Maryland

Virginia

WestVirginia

Kentucky

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Current Mining Operation Future Growth Project Transfer Terminal

Pattiki Complex

River View Complex

Dotiki Complex

Mount Vernon

Transfer Terminal

Warrior Complex

Hopkins Complex

Gibson Complex

Pontiki Complex

MC Mining Complex

Tunnel Ridge Complex

Penn Ridge Complex

Mettiki Complex

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Southern Legislative Conference States: Cost of Electricity and Coal Consumption

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Corporate HeadquartersTulsa, OK

States Where We Market Coal

Rank in Affordability of Electricity

Percentage of Electricity Generated by Coal

TX36th / 36%

OK21st / 47%

MO6th / 82%

AR12th / 47%

LA30th / 25%

SC 12th / 40%

MD40th / 59%

WV4th / 98%

#

%

Sources: National Mining Association (NMA);

Energy Information Administration (EIA) (2007)

It’s All About Jobs

President Lyndon Johnson’s “War on Poverty” in 1964

Robert F. Kennedy Visits Hazard, Kentucky in 1968

Energy Crisis of the 1970s

History of Electricity Generation by Fuel Source

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1949

1955

1965

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

(Bil

lio

n K

ilo

watt

Ho

urs

)

Coal Petroleum Natural Gas Nuclear Hydroelectric Other Solar / Wind

Source: EIA Electricity Net Generation: Total (All Sectors), Selected Years, 1949-2008

Current Consumption Sources of Electricity:• Residential – 39% • Commercial – 36% • Industrial – 25%

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Coal Consumption Grows with GDP

0

200

400

600

800

1000

1949

1954

1959

1964

1969

1974

1979

1984

1989

1994

1999

2004

Source: EIA, Bureau of Economic Analysis (BEA) 1949-2008

Coal Consumption GDP

0

2000

4000

6000

8000

10000

12000

1949

1954

1959

1964

1969

1974

1979

1984

1989

1994

1999

2004

An

nu

al

Co

al C

on

su

mp

tio

n (

Mil

lio

n S

ho

rt T

on

s)

Bil

lio

ns o

f D

oll

ars

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Source: EIA LTM 2009; BP Statistical Study 2009

Electricity Generation by Fuel Fossil Energy Reserves

Coal

Hydro

Wind

Other

Nuclear

Oil

Natural Gas

49%

Coal Is a Critical Component of the U.S Energy Portfolio

21%

20%

2%

93%

3%

6%

1%

4%1%

2008 U.S. Total Electric Power Generation:

4.110 Million Gigawatthours (GWh)

2008 U.S. Total Fossil Energy Reserves:

986.77 Billion Barrels of Oil Equivalents

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World’s Fastest Growing Fuel

27%

20%

16%

7%

4%

0 5 10 15 20 25 30

Coal

Hydro

Natural Gas

Oil

Nuclear

Five-year change in global energy consumption (2003 – 2008)

CAGR

0.7%

1.3%

3.1%

3.8%

4.9%

Source: BP Statistical Review of World Energy, June 2009.Figures represent change from 2003 to 2008. 12

China India

Coal

Hydro

Wind

Other

Nuclear

Oil

Natural Gas

80%

2%

15% 2%

68%

15%

8%

1%

2%

4%

China and India Greatly Depend on Coal to Generate Electricity

Source: International Energy Agency (IEA), 2006

2006 China Total Electricity Generation:

2.529 Million Gigawatthours (GWh)

2006 India Total Electricity Generation:

517 Thousand Gigawatthours (GWh)

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2006 U.S. Total Electricity Generation:

4.157 Million Gigawatthours (GWh)

compared to

Developing Nations will Increase Energy Use and Put Pressure on Global Supply

Electricity Usage Per Capita

0

3,000

6,000

9,000

12,000

15,000

$0 $10,00

0

$20,00

0

$30,00

0

$40,00

0

$50,00

0

GDP Per Capita (in $U.S.)

Kilo

wa

tt-H

ou

rs P

er

Ca

pit

a

U.S.

Russia

Australia

U.K.

Italy

MexicoBrazil

India

S. Korea

China

Sources: World Bank (2208); United Nations Human Development Report 2007/2008; and United Nations World Statistic Pocketbook and Statistical Yearbook

Passenger Vehicles / 1,000 People

0

200

400

600

800

$0 $10,000 $20,000 $30,000 $40,000 $50,000

GDP Per Capita (in $U.S.)

Ca

rs p

er

1,0

00

Pe

op

le

U.S.

Russia

Australia

U.K.

Italy

MexicoBrazil

India

S. Korea

China

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Saudi Arabia

Saudi Arabia

0

500

1000

1500

2000

Po

pu

lati

on

in

Mil

lio

ns

of

Pe

op

le

2009 2050 Projection

China India United States

`

Population Growth in China, India, and the

United States

Sources: CIA World Factbook 2009; Population Reference Bureau 2009 15

Current Population Growth Rates• China – 0.66% • India – 1.55% • United States – 0.98%

U.S. Coal Use Expected to Accelerate over next Several Decades

0

500

1,000

1,500

2,000

2,500

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Billio

ns

of

KW

h

Coal Petroleum Natural gas Nuclear Renewables1 Renewables include hydroelectric, solar and wind.

Sources: EIA, Annual Energy Review 2008 and Annual Energy Outlook 2009 and 2009 Update

Percent Change

2008 – 2030

Renewables1 60%

Coal 48%

Nuclear 19%

Petroleum 9%

Natural Gas (24%)

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Coal has a History of Environmental Success

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2010

2015

2020

2025

2030

Electricity Generation from Coal Sulfur Dioxide Emissions (SO2)Nitrogen Oxide Emissions (NOx)

+26%

-41%

-57%

Coal for generating electricity has tripled over the past 30 years.

Technology has enabled the coal industry to significantly reduce emissions while generating additional electricity.

Today's coal-based electricity generating fleet is over 80% cleaner than it was in the 1960s (based upon emissions per unit of energy produced).

Sources: EIA; ACC; National Mining Association (NMA)

+90%

-78%

-73%

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Thousands Attend Coal Rally in Knott County, Kentucky

The Road to Recession

Debt

Over $11 Trillion for the first time ever

Over $36,000 for every U.S. citizen

Up from $10 Trillion September 30, 2008

$1 Trillion increase in just 5½ months

Fastest jump in U.S. history

$16.2 Trillion = 100% of U.S. GDP

Over $200,000 for every U.S. family

By September 30, 2012“It took the U.S. government 191 years – from 1791 to 1982 – to run up its first trillion dollars in debt.”

Two Different Approaches to Energy and the Environment

“A sound and healthy environment is critical to any prosperous economy, and the Gallup numbers show most Americans continue to believe that the seriousness of global warming has been correctly portrayed or even understated.”

“A prosperous economy is a necessary prerequisite to improving the environment.”

- United States Senator Harry Reid

- Joe Craft

“Right now, Americans are more concerned about the economy than the environment. The politician who says, 'I'm going to cripple jobs and shut down factories' would be in trouble in this economy.”

- Frank Newport, editor-in-chief of the Gallup Poll

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Principles for Creating Sound Energy Policies

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Promote Energy Independence

Improve Energy Efficiency

Examine the Science Behind Global Warming

Invest in Research and Development and Incentivize Technology to Address Environmental Concerns

Rely on All Forms of Energy

Protect National Security

Let the Free Market Work to Provide Low-Cost/Affordable Energy to Consumers, Support Economic Growth, and Create Quality Jobs

Continue to Build Coal-Fired Generation!

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Southern Legislative Conference

August 16, 2009

Joseph W. Craft, IIIChief Executive Officer