Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from David Khani – FBR Capital Markets.
David Khani – FBR Capital Markets
Can you talk a little bit about your expectations for natural gas price because obviously it has a big swing factor both on the coal side and obviously on your current natural gas production?
Brett Harvey
Right. We expect 2010 to average $6 to $7.
David Khani – FBR Capital Markets
$6 to $7 okay, and second is, can you talk a little bit about your customer base and sort of the industrial nature, I guess, of the Northern App region? Are you starting to see signs that the industrial side is picking up and so therefore the demand for power would pick up?
Brett Harvey
Actually, David, we just see some movement, which would be considered bright spots, but all of our big utility customers on the industrial base side show very weak sales and that's why we think that 2010 is going to be a bridge year in terms of energy growth. We just don't see it at the utility side. They built inventories and they're not burning down the inventories, so we see it as flat for probably the next four quarters.
David Khani – FBR Capital Markets
And then going back a little bit to the $6 to $7 per Mcf or Btu, how much of an impact do you think that will be on the steam coal demand inside your region? Have you guys done that math there?
Brett Harvey
We think it shifts. It's about 25 million tons, but we think it shifts at about $5.50 per million. If you look at the cost structures of our big competitors in the Marcellus Shale, $5.50 where it breaks down. And they're not making money unless they're above $5.50 and we see that as a natural economic break and they'll shift back to coal at that point and time, so about $5.50 is where we see it right now.
David Khani – FBR Capital Markets
And then how much met, I think, do you guys expect to export for 2010 and then, are you seeing any signs also for the steam coal side for 2010?
Brett Harvey
We see the steam coal side as being a pretty bright spot. We expect to, on the met side, export about 3.5 million tons and on the steam side, we expect that to increase year to year. The price is rising right now. If you look at the Bailey-type coal, at the mine, it's up to about $53 into Europe if you look at all the components going all the way to Europe and that's rising.
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