The Resurgence of the American Coal Industry, Part Deux: An Unexpected Ally

Coal’s Unexpected Ally: Natural Gas

Guest post by David Middleton

I concluded my previous coal post, The Resurgence of the American Coal Industry, with the following:

The U.S. coal industry is doing exactly what the oil & gas industry did from 2014-2016.  In the face of oversupply relative to demand and a collapsing commodity price, the industry is making itself “leaner and meaner.”  Mr. Denning referred to natural gas as the “enemy” of coal.  That’s funny, I find oil & gas for a living and have never thought of coal or nuclear power as enemies.  Fair competition is good for business… And as an electricity consumer, I don’t like paying more than 10¢ per kWh for electricity.

Natural gas prices are unlikely to remain this low for very long.  $2.50/mmbtu is uneconomic in most of the shale plays and very uneconomic in the Gulf of Mexico, except on a cost-forward basis.   When natural gas production and consumption come back into balance, it will probably be at a price of $3.50 to $5.00/mmbtu.  Coal is very competitive with natural gas above $3.50/mmbtu.

However, many  of the comments continued to reflect the mistaken belief that coal can’t compete with its “enemy” natural gas.  Australia provides the perfect refutation of this notion:

Australia’s Energy Luck Runs Out

By David Fickling

April 9, 2017

With its abundance of mineral wealth and sun-kissed shores, Australia takes pride in thinking of itself as the “lucky country.”

That sounds good until you consider the full quote from which the phrase is derived — a warning that this natural endowment was being squandered by the second-rate way the nation is governed.

Politics lies at the heart of Australia’s current energy paradox: How can one of the world’s largest exporters be having trouble keeping its lights on?

Clearing Out

Australian wholesale electricity prices have doubled since the closure of the Hazelwood coal generator was announced

Australia_01

[…]

Wholesale electricity prices in Victoria have more than doubled since Nov. 3, when Engie SA announced plans to close its 1.6-gigawatt coal-fired Hazelwood power station. More shocks will follow: About 3.6 GW of coal generation capacity is scheduled for closure at present, rising to 7 GW by 2030 according to Bloomberg New Energy Finance.

[…]

Such changes shouldn’t cause this degree of difficulty. The U.S. has shut about 39 GW of coal-fired capacity since the end of 2012 without significant upsets, while the U.K. closed about 8.4 GW in the five years through 2015. Australia ought to be able to handle 1.6 GW dropping off the grid.

Part of the explanation is different trade dynamics. Thanks to its greater exposure to global export markets, gas in Australia has failed to undercut coal on price in the way it has in the U.S. and U.K.

Indeed, the country’s LNG plants are so hungry for volumes that they’ve been in direct competition with local generators. Since the closure of Hazelwood was announced, domestic gas prices have reset to match the regional spot LNG market:

Liquid Market

Australian natural gas prices have reset above those in the Asian LNG market

Australia_02

Rising fuel costs have been so damaging for the economics of gas-fired electricity that the Australian Energy Market Operator expects such generation to decline by about 15 percent between 2016 and 2021.Where coal is being replaced, it’s with renewables: Almost 70 percent of the additional planned capacity in the national electricity market is for wind-power plants, with a further 13 percent going to utility-scale solar.

It’s worth recognizing that this is good news. Faster withdrawal from fossil fuels is clearly better for the global climate, and the volume of wind and solar set to hit the market means there’s little risk of outright shortages over the next five years or so.

[…]

One challenge remains. If coal-power retirements accelerate, solar and wind will be unable to fill the gap quickly enough, especially given the way their variability can undermine the stability of the grid. The government’s plans to add 2 GW of hydroelectric capacity in the mountains southwest of Canberra will help, as will battery-storage proposals like the one Tesla Chief Executive Officer Elon Musk has offered for South Australia. They won’t make the problem go away altogether.

[…]

Bloomberg Gadfly

I just love how “Gang-green” can contradict themselves without missing a beat.

Faster withdrawal from fossil fuels is clearly better for the global climate, and the volume of wind and solar set to hit the market means there’s little risk of outright shortages over the next five years or so.

One challenge remains. If coal-power retirements accelerate, solar and wind will be unable to fill the gap quickly enough, especially given the way their variability can undermine the stability of the grid.

Priceless irony notwithstanding, Australia’s energy plight is indeed “good news” for both U.S. coal and natural gas producers:

JAN 31, 2016

The U.S. and Australian Race to Export Liquefied Natural Gas

Jude Clemente , CONTRIBUTOR
I cover oil, gas, power, LNG markets, linking to human development

Free market economies Australia and the U.S. will be in competition for the export of Liquified Natural Gas (LNG). Since 2010, Australia’s gas demand has increased 10%, but its gas production has increased 35%, compared to an 8% increase for use and 38% gain in production for the U.S. Per BP data, Australia and the U.S. have netted 75% of the 260 Tcf gain in proven global gas reserves since 2005.

In fact, through 2020, the two countries are expected to account for 90% or more new LNG exports. Overall, the global LNG market is set to increase by 50% between 2015 and 2020, nearly 20 Bcf/day. This year alone will see a 2.6 Bcf/day increase in LNG supply

Australia could add six new LNG export terminals by 2020, tripling its liquefaction capacity to over 13 Bcf/day. Although Cheniere Energy’s U.S. LNG export facility at Sabine Pass, the first of its kind in the continental U.S., was delayed until late-February or so, the country could be exporting 10 Bcf/day by 2020, almost equaling current global leader Qatar.

[…]

This year’s expansion of the Panama Canal will up competition in the U.S. to ship LNG to Asia, where over 70% of the world’s LNG is consumed. The U.S. has lower production costs and lower capital costs for new infrastructure, namely liquefaction facilities. Bolstered by the “shale revolution,” for instance, the more difficult Gulf of Mexico now produces just 5% of U.S. natural gas, versus over 25% 20 years ago

 This is in contrast to the expensive offshore gas projects in Australia, now responsible for over 50% of all floating liquefaction capacity under construction. Over 90% of Australia’s traditional gas resources reside in the harder-to-develop North West Shelf offshore.
Escalating labor costs have been a key factor in Australia’s drastic LNG cost overruns. In Australia, oil and gas workers can make $165,000, 30-35% more than in the U.S. and double the world’s average. One Harvard expert finds that “Australian LNG seems to be the worst business case globally,” with costs range being 2-3 times higher than in the U.S. (see here).

[…]

Daniel Yergin just said that the Saudi’s “will not destroy the US shale industry…It takes $10bn and five to ten years to launch a deep-water project. It takes $10m and just 20 days to drill for shale.” U.S. gas production is rising by 1.5% per year, three times faster than consumption (projections here).

Thus, U.S. gas prices will remain lower than in other markets, and arbitrage opportunities for companies to ship LNG will remain. North America’s gas prices are mostly set at liquid trading hubs, more linked to supply and demand fundamentals.

The key importing nations are not expected to be producing much more gas, so the internationally traded market will increase its current share of 30% of total gas consumed, closer to the 60% of oil demand that is traded internationally. Making gas more of a global commodity like oil, LNG now accounts for about 33% of all traded gas and 10-12% of total gas demand. The LNG market is just another example of the obvious: the world continues to become more connected, not less.

Screen-Shot-2016-01-25-at-12.47.04-PM1

[…]

Forbes

Bear in mind the fact that U.S. coal is very competitive with natural gas when gas prices are above $2.50/mmbtu and natural gas exports are just now ramping up:

100th LNG Cargo Shipped from Sabine Pass Liquefaction Facility

Cheniere Energy announced today the 100th cargo of liquefied natural left the company’s Sabine Pass liquefaction facility on Saturday, April 1st, 2017. Including the 100th cargo, Cheniere has delivered cargoes to 18 countries on five continents since the first shipment on February 24, 2016.  “This milestone for Cheniere is a testament to the global demand for American LNG, the hard work and dedication of Cheniere’s workforce, and our unique business model that enables customers large and small to access this fuel,” said Jack Fusco, Cheniere’s President and CEO. “Our entire workforce shares in this milestone and in Cheniere’s future success.”

In February 2016, Cheniere became the first company to ship LNG from the contiguous United States in over 50 years.

[…]

LNG Global

By the end of 2018, the U.S. will be a net exporter of natural gas:

COMMODITIES | Wed Mar 29, 2017 | 6:38am EDT

After six decades, U.S. set to turn natgas exporter amid LNG boom

By Scott DiSavino

The last time the United States was a net exporter of natural gas was in 1957, when Dwight Eisenhower was president. That should change in 2018 when the country is expected to become the world’s third-largest exporter of liquefied natural gas (LNG).

By the end of next year, U.S. LNG export capacity in the lower 48 states will top 6 billion cubic feet per day (bcfd), or 8 percent of the country’s domestic consumption, up from zero at the beginning of 2016. Six bcfd of gas can fuel about 30 million U.S. homes, or almost every house in California, Texas and Florida combined.

That growth in U.S. LNG exports is set to transform world energy markets. Just a decade ago, before the shale revolution, the United States was expected to become a growing LNG importer, not an exporter, likely dependent on Russian, Middle East and North African gas, much as it has for decades depended on foreign crude.

[…]

Reuters

And is on the path to exporting 55 bcf/d (55 million mmbtu/d) by 2032:

55 Bcf/d of LNG Export Applications Received by DOE

in 360 Articles / Closing Bell Story / LNG / Natural Gas News by— Oil & Gas 360
March 21, 2017

65 export applications on file

Global LNG trading is expected to grow significantly in the next 15 years, and much of this growth will be fueled by exports from the U.S. The EIA reports that 65 applications have been filed to export LNG to other nations, with applications totaling nearly 55 Bcf/d. For reference, U.S. LNG exports from 1985 to 2011 were relatively steady and averaged about 164 MMcf/d.
[…]

Oil & Gas 360

The expansion of U.S. natural gas exports, combined with domestic demand will keep natural gas prices high enough for coal to be competitive.  Couple this with the “bumbling start” at the Department of the Interior and the American coal industry will be resurgent:

Secretary Zinke Issues Lease for 56 Million Tons of Coal in Central Utah

WASHINGTON – U.S. Department of the Interior Secretary Ryan Zinke today announced the approval of a $22 million coal lease on the Greens Hollow tract in central Utah to Canyon Fuel Company, LLC, a subsidiary of Bowie Resource Partners, LLC. Coal mining in the area currently supports nearly 1,700 mining and related jobs.

Secretary Zinke also announced Bureau of Land Management (BLM) career veteran Michael Nedd will serve as Acting-Director of the BLM. Previously, Nedd served as Assistant Director for Energy, Minerals, and Realty Management; his selection signals the Secretary’s focus on elevating responsible energy development on public lands where appropriate.

“The United States has more coal than any other nation on earth, and we are lucky to be at a time in our history that we have the technology available to responsibly mine coal and return our land to equal or better quality after,” said Zinke. “For many communities and tribes in Utah, Montana, New Mexico and other states across the west, coal on public lands has been both a boon and a missed opportunity. With the potential for thousands of jobs and millions in economic opportunity, the Interior Department is committed to balancing the development and conservation of these resources. The Greens Hollow lease sale is a sign of optimism for the Trump Administration and the pro-energy and pro-growth economic policies to come.”

On January 4, 2017, the Utah BLM office held a competitive coal lease sale for 6,175 acres of the underground Greens Hollow coal lease tract following several stages of environmental analysis. It is estimated to contain more than 55 million tons of recoverable, high-energy-producing coal. The bid of $22,850,000 by Canyon Fuel Company, LLC (Canyon Fuel) was determined to be the high and acceptable bid ensuring fair market value of the coal. Greens Hollow holds a lease adjacent to the mine which currently employs over 660 workers and 1,000 supporting jobs in the area.

The tract is part of the Wasatch Plateau Known Recoverable Coal Resource Area and is immediately adjacent to the operating SUFCO mine near Salina, Utah. The lease is wholly underground coal with approval for two small surface disturbances necessary for safety and essential mine services. The Greens Hollow lease is feasible to underground mining, which helps ensure the vital water, aesthetic, and archeological resources are protected.

[…]

BLM

Coal is back…

Interior agency’s website creates confusion

By Gregory Wallace, CNN
Updated 9:12 PM ET, Fri April 7, 2017

But when a tranquil hiking scene was replaced by a wall of coal on the home page of the Bureau of Land Management’s website, more than a few people took notice. The agency, best known for managing millions of acres of federal, often recreational land, replaced the photo with another scene on Friday.

Some questioned whether the bureau was telegraphing a change of priorities. Interior Secretary Ryan Zinke recently lifted Obama-era restrictions on coal mining on public land, and signed a $22 million coal mining lease for land in Utah.
Greenpeace USA tweeted: “Putting a giant wall of coal on the BLM site won’t bring back coal, the future is safer without it!”
The agency says the coal photo was not intended to signal a shift in priorities and is instead part of a new digital strategy, where each week it will showcase a different scene from its vast land holdings — some 245 million acres, mostly located in the western United States.
[…]
170407200647-bureau-of-land-management-2-medium-plus-169

Before

170407200645-bureau-of-land-management-1-medium-plus-169

After

The coal image has since been replaced; but it at least drew a moronic Tweet from Greenpeace and clear proof that “the war on coal is over”…

Trump’s Interior Secretary: The ‘war on coal is over’

By Joel Connelly, SeattlePI Updated 5:17 pm, Wednesday, March 29, 2017

U.S. Interior Secretary Ryan Zinke, in a one-two Trump administration bid to boost America’s beleaguered coal industry, has lifted the Obama administration’s moratorium on new coal-mining leases on federal land.

“It is certainly a signal that the war on coal is over,” Zinke, a former Montana congressman, said during a Wednesday telephone briefing for journalists.

The Interior Secretary’s action came a day after President Trump used an executive order to repeal the Clean Power Plan, an Obama initiative to make America’s power plants reduce emissions of greenhouse gases that cause climate change.

[…]

The U.S. Bureau of Land Management — known to critics as the “Bureau of Livestock and Mining” — has long played a major role in coal leasing throughout the West. Public land accounts 40 percent of America’s coal production.

BLM lands include the Powder River Basin in Montana and Wyoming, a supplier of coal to the Colstrip plants … and of the coal that industry and railroads have wanted to export from Northwest ports to China.

[…]

Seattle PI

Having lifted the moratorium on Federal coal leases, the next step will be to clear the obstacles to export markets:

TUESDAY 20, DECEMBER 2016

NW coal exports back on the table under Trump

by Kevin Taylor

[…]

Zinke’s selection has also drawn wide praise from some tribal leaders. A bulwark of his support in Indian Country is his alignment with the Crow Nation in Montana to push for coal export terminals. The Crow rely on coal deposits to fund tribal government and services.

In Congress, Zinke has been a staunch supporter of the Gateway Pacific Terminal, a $600 million facility proposed for Whatcom County that would export about 48 million tons a year of coal mined in western states to Pacific Rim markets.

Zinke also wants to lift an Interior-imposed moratorium on new leases for coal extraction on federal lands, 90 percent of which takes place in the Powder River Basin in Montana and Wyoming, and overturn a Corps of Engineers denial of the Gateway permit.

“The Gateway Pacific Terminal is incredibly important to Montana, the Crow, and even to the blue-collar workers in Washington State because it is literally the gateway to economic prosperity and rising out of poverty,” Zinke said in May. “It’s a sad day in America when even our Army Corps of Engineers can be wooed by special interests.”

But the Crows’ hopes for coal ports in Puget Sound have crashed into opposition from Washington’s coastal tribes, which argue that the facilities would imperil their treaty-guaranteed fisheries.

“If someone wrote a script about a high council whose job it was to make a planet desolate & lifeless like Dune? You’d have #Trump’s cabinet,” Seattle author Gyasi Ross, a member of the Blackfeet Nation, wrote on Twitter.

Fawn Sharp, president of the Affiliated Tribes of Northwest Indians and chairwoman of the Quinault Indian Nation tells Crosscut, “Given the comments that have been made by Mr. Trump and some of his nominees, such as EPA Director Designee Scott Pruitt, it is certainly conceivable that efforts will be made to push for more fossil fuel exploitation and distribution.”

The affiliated tribes have opposed the Dakota Access Pipeline…

[…]

Crosscut

The Affiliated Tribes of Northwest Indians were defeated in the DAPL battle.  Permitting of the Gateway Pacific Terminal was blocked by the U.S. Army Corps of Engineers because Lummi Nation complained that it might interfere with their “usual and accustomed fishing rights.

“I have thoroughly reviewed thousands of pages of submittals from the Lummi Nation and Pacific International Holdings,” said Col. Buck. “I have also reviewed my staff’s determination that the Gateway Pacific Terminal would have a greater than de minimis impact on the Lummi Nation’s U&A rights, and I have determined the project is not permittable as currently proposed.”

Both the Lummi Nation and Pacific International Holdings, LLC, provided voluminous information regarding fishing practices, potential impacts, and mitigation to support their positions. The district’s evaluation of effects of the proposal on the Lummi’s U&A fishing rights is undertaken to fulfill the federal government’s responsibility to protect treaty rights. The Corps may not permit a project that abrogates treaty rights.

As part of its evaluation of the permit application for the Gateway Pacific Terminal proposal at Cherry Point near Ferndale, Washington, the Corps had been overseeing development of a Draft Environmental Impact Statement consistent with National Environmental Policy Act requirements until the applicant suspended this work April 1. As part of standard regulatory procedures, the Corps has continued evaluating the proposal consistent with the requirements of other federal laws and conducting consultations as needed consistent with the requirements of the Endangered Species Act, the National Historic Preservation Act, and our tribal treaty trust responsibility.

USACE

USACE can’t permit the Gateway Pacific Terminal for political (treaty) reasons, not for engineering or environmental reasons.  So, there is a clear pathway to constructing export terminals.

Conclusion

Coal is competitive with natural gas at current gas prices.  Current market trends will make coal even more competitive with natural gas over the next 15-25 years.  Political obstacles to coal mining, consumption and exports are already being dismantled.  Coal will not likely return to its heyday… However, to paraphrase Samuel Clemens, “The reports of coal’s death are greatly exaggerated.”

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75 thoughts on “The Resurgence of the American Coal Industry, Part Deux: An Unexpected Ally

  1. Political obstacles to coal mining, consumption and exports are already being dismantled….

    but unfortunately they can be re-mantled too

  2. A return to Advocacy Oligarchy is still possible in which a President is a mere puppet for advocacy speechwriting, including attacks from the podium on anyone who disagrees or might disagree.

    • Henning, gangrene was the inspiration for the poetic manipulation to Gang Green. I coined the a few years ago here on WUWT, but I haven’t seen it used much. Karlization of temperature was mine also – but Karl has retired from the NOAA and this term is likely to disappear. Glad to see them used.

  3. Looking good thus far. We must remember that this is still very early in the new administration.There are fears already that Trump will pull a Schwarzenegger, and turn RINO.

    • The MSM’s mission is to cast doubt on anything and everything Trump does, and anything and everything the Republicans do. Keep that in mind when reading their reporting.

      They never give Trump or the Republicans the benefit of the doubt. They always assume the worst, and that flavors their reporting.

  4. I’ve long said it’s stupid to squander the NatGas bonanza on electricity, especially when we have so much coal. It also emits more life-giving CO2. The biosphere will not be happy until it hits 2,000ppm (0.2%).

    • tab old soul
      Whilst agreeing about the biosphere, I think it important to highlight, again, that the current level of CO2, to the nearest one-tenth of one percent, is zero.
      When [IF] CO2 exceeds 500 ppm – say 501 ppm – then we can agree that it is at 1 one tenth of one percent, to the nearest one tenth of one percent.
      It will move up to two tenths when CO2 concentration effectively trebles, from 501 to 1501 ppm, which may not be his year – or this decade . . .

      Auto.

  5. I have a question somewhat related to this article, the PC term, bio-energy, could that also be applied to coal?

  6. I wouldn’t be too excited about building terminals to export our coal and natural gas. I would be more excited by the thought of getting our industry back.

    In North America, corporate tax rates have become more globally competitive, as has the cost of energy. Land is also far cheaper in North America. To find 500 acres for a large manufacturing facility in Alberta, you look out a window. In Guangzhou? Even five acres could be a challenge. When you also consider the additional cost of shipping goods from Asia to North America, the case for simply making it here becomes even stronger. link

    Cheap energy is a big advantage. We should think strategically.

      • the Australian model
        ===============
        sell low cost energy to your competitors will you maintain high priced energy at home.

        “dumping” energy is one of those commodities likely to come back and bite you.

    • I agree, look at this from the USA EIA:

      ” The U.S. Energy Information Administration estimates that as of January 1, 2014, there were about 2,474 trillion cubic feet (Tcf) of technically recoverable resources of dry natural gas in the United States. At the rate of U.S. dry natural gas consumption in 2014 of about 26.6 Tcf per year, the United States has enough natural gas to last about 93 years. The actual number of years will depend on the amount of natural gas consumed each year, natural gas imports and exports, and additions to natural gas reserves.

      Technically recoverable reserves consist of proved reserves and unproved resources. Proved reserves of crude oil and natural gas are the estimated volumes expected to be produced, with reasonable certainty, under existing economic and operating conditions. Unproved resources of crude oil and natural gas are additional volumes estimated to be technically recoverable without consideration of economics or operating conditions, based on the application of current technology.”

      The post above says the USA would be exporting over 50 bcfd per day (which I seriously doubt because prices will go through the roof and politicians won’t allow it). If total production starts approaching 50 TCF per year the USA would be running out of proved reserves in a hurry, which means it has to start using the “technical” resource. That technical resource can require high prices (it’s called technical because económics don’t figure much into the estimate). Thus the USA, should it really move to be a big time exporter, will see rising prices, then very high prices, and then it’s simply going to have one hell of an energy crisis.

      I would limit exports to Mexico, the U.K, and a few Caribbean islands such as Puerto Rico, Santo Domingo, and Cuba if the Castro dictatorship falls.

      • One very good reason to not use it for electrical production. Use coal for that. Save the natgas for home and business heating.

      • Its not that simple. Natural gas turbines are an excellent counterpoint to wind power, which I view more as a “natural gas extender” because it only works about 30 % of the time. I’m not that worried about co2 emissions, and more worried about saving fossil fuel resources. So the optimum seems to be to develop some wind power, add turbines to offset wi d intermittency, build up nuclear power very carefully, but steadily, and use coal as a base load generator. I would also encourage some nations to build coal power plants and give secure supply contracts.

      • @Fernando
        Windmills are just an excuse to shift electricity production to natural gas because as you say, windmills cant supply the grid without natural gas turbines to back them up. Further natural gas turbines without windmills are cheaper because you can run the turbines at optimum RPM without having to ramp the turbine up and down to balance the wind.

        It does not make sense to waste natural gas by burning it to produce baseload electricity. Coal and nuclear can produce electricity competitively when natural gas is allowed to be converted to methanol to substitute for oil. This would cap the oil price around $50 per barrel thus reducing the funds available to promote radical Islamic terrorism and saving the US economy from the recessions associated with high oil prices (think $150 per barrel in early 2008).

        Exporting natural gas for electricity production, will raise US natural gas prices to world levels, similar to the price of oil on an energy equivalent basis. By using natural gas for electricity production rather than transportation via conversion to methanol, the OPEC cartel is protected.

        Nuclear energy, regulated similar to airplanes that kill more people per year than nuclear has killed in 50 years, will become the dominant source for electricity production in the 21st century. Sodium fast reactors increase uranium efficiency by a factor close to 200 times. Pyroprocess recycling of spent fuel solves the waste problem (1 ton of waste per year per 1 GWe plant that returns to background radiation levels in 400 years).

        Sodium fast reactors with metal fuel and a pool design are walk away safe ie. run the reactor at full power, disable the active safety features, turn off all electric power, and walk away leaving the reactor to shut itself down without a meltdown. SFRs are about 1000 times safer than the current Light Water Reactors and the current Light Water Reactors are the safest source of energy by a wide margin.

        Further the Linear No Threshold model of radiation damage is wrong because it does not consider biological repair mechanisms for radiation damage. Radiation safety levels can be increased by a factor of 1000.

        Manufacturing of small (about 100MWe) underground reactors combined with regulatory changes will significantly reduce the cost of nuclear.

        Proliferation is a political rather than a technical issue. Uranium enrichment and recycling, not reactor operation, are the proliferation issues. Pyroprocessing, unlike PUREX, does not produce any intermediate product suitable for nuclear weapons. Regional enrichment centers (Russia, China, Japan, India, South Africa, Brazil, US, UK) could produce 2 cores enriched to about 15% and 400 tons of depleted uranium, sufficient to start a 1GWe reactor and run it for 400 years (sodium does not corrode stainless steel and electromagnetic pumps eliminate the only moving parts in a SFR). With onsite pyroprocessing, every country has security of energy supply.

        The only downside to nuclear is that it does not produce CO2.

  7. Just a little over 80 days since inauguration and promises are being kept. Quite the turnabout and the lack of meaningful push back from the environmentalists and alarmists means one thing….. they weren’t prepared for Trump winning. The difference this time is their cries of anguish will be met with real science and most likely the cloak of secrecy about CAGW will be lifted and their attempts to squash dissent will be answered for the people to hear. Yes Virginia, elections do have consequences.

  8. Mr. Middleton – I enjoy your frequent submissions, we appear to be like-minded on a number of issues (always a positive when one can find a kindred mind-set). Please, keep up the good work!

    Also, another proposal for a CONUS West-coast (or, nearly West-coast but actually alongside Puget Sound) LNG production facility is being considered at the Port of Tacoma, Washington State:

    https://www.cityoftacoma.org/government/city_departments/planning_and_development_services/planning_services/pse_proposed_tideflats_lng_facility/

    http://www.portoftacoma.com/puget-sound-energy-lng-facility

    http://www.ngvtoday.org/2014/09/03/puget-sound-energy-to-build-275-million-lng-plant-for-marine-bunkering-in-tacoma/

    However, the same forces are exerting pressures to stop the proposal in it’s tracks, such as ‘RedLine Tacoma’:

    http://www.ngvtoday.org/2014/09/03/puget-sound-energy-to-build-275-million-lng-plant-for-marine-bunkering-in-tacoma/

    We’ll see how this all progresses…up here in California North (err, Washington State, USA), there seems to be quite a bit of opposition to progress of any kind (ironic, seeing as they consider themselves as ‘Progressively-minded’ folk..)

    Respectfully,

    MCR

  9. The University of Austin appears to think natural gas and coal are cheaper than coal:
    http://www.powermag.com/natural-gas-and-wind-are-cheapest-sources-of-power-in-majority-of-u-s/

    93 coal power plants will close by 2020 and 5 might get built. 90% of US coal is currently used in power plants. A net loss of 88…

    Utilities are still announcing coal plant closures since the new administration came in.

    There is a declining domestic market for coal in the US in the next 4 years.

    Export prospects are little better:

    India and China are proposing to stop foreign coal imports…

    EU power producers are planning no new coal plant after 2020 in 25 nations. France, UK, Netherlands have close dates for all coal plant.

    • You continue to conflate the cost of power plants and fuel.

      It’s the University of Texas at Austin.

      Demand for coal in the US is not currently declining.

      EIA expects growth in coal-fired electricity generation to contribute to a 4% increase in coal production in 2017. Coal production is expected to be unchanged in 2018. EIA estimates the delivered coal price averaged $2.11/MMBtu in 2016, a 5% decline from the 2015 price. Coal prices are forecast to increase in 2017 and 2018 to $2.17/MMBtu and $2.21/MMBtu, respectively.

      https://www.eia.gov/outlooks/steo/report/coal.cfm

      And your ignorance of export markets is truly mind-boggling.

      U.S. coal exports were rising from 2004-2012. Obama’s “war on coal” temporarily halted that rise.

      Global demand for coal will continue to rise for decades.

      • Obviously a handful of far left wing professors know more about the oil/gas/coal industries than the people who actually work there.

      • Actually, the U.S. Energy Information Administration makes it easy. It’s one of the two useful parts of the Department of Energy.

      • Left-wing academics learn about 10% of an industry, then think they can run it.

        Which is only a subterfuge anyway, because the primary goal in any industry they take over is to destroy/bankrupt it.

      • I still fail to see how coal demand in the US can increase when 90% of it goes to coal power plants and coal power plants show no sign of a decrease in the rate of shut down.

        Less power plants can hardly burn more coal.

      • As always, Griff takes what ever has been happening for the last 6 months and assumes that it will continue forever.
        David has already answered that question Griff, over and over again.

    • Griff: “There is a declining domestic market for coal in the US in the next 4 years.”
      Do you understand the concept of inertia.
      With you it’s more the colossal drag factor of your intellect though.

      • In Griff’s world, any trend that he likes is guaranteed to continue forever. Any trend that he doesn’t like, doesn’t actually exist.

      • In Griff’s reality, any trend that he likes will continue forever, any trend he doesn’t like, doesn’t exist.

    • Actually, the U.S. Energy Information Administration makes it easy. It’s one of the two useful parts of the Department of Energy.

    • Griff, India and China will continue to build large numbers of coal fired power stations and the number will have no limits while the living standards of their populations continue to rise, this will be done in the main using low quality coal. Germany waved the white flag and are currently building 17 very large coal fired power stations burning brown coal. The UK is giving signals now that it wishes to retreat from the ridiculous EU and Climate Change Act requirements to convert to renewables.

      All that is happening in the USA now is that the playing field is being levelled and, when forced to compete without massive subsidy, renewables will find their correct place in the power supply chain. That is they will have only a niche market. Once the Climate Change movement is removed from the picture, as it must be, then the developing and developed world will get the lower cost energy that it needs. Eliminating disease, ignorance and high child mortality is vastly more important than impoverishing the world on the basis of a yet to be proved hypothesis and the almost criminal behaviour of political climate science.

      The practice of growing food to be converted to bio-Ethanol has to be stopped, the environmental destruction and increase in food prices for poor people is unacceptable.

      • “Martin Mason April 10, 2017 at 3:25 pm

        All that is happening in the USA now is that the playing field is being levelled and, when forced to compete without massive subsidy, renewables will find their correct place in the power supply chain.”

        In Australia last year a coal fired power station was shutdown, I can’t recall where it was. Yesterday, it was explosively demolished. Reason: Unable to compete with renewables. I guess that is possible when one considers the massive subsidies involved.

      • China and India are already building less coal power plants than was the plan as recently as 3 years ago.

        Both continue to truly massively invest in renewable energy.

        India plans to have 175GW of solar and wind by 2022 – and is delivering on rolling that out. India’s future provision of electricity to its citizens will be renewable.

        Germany has BUILT all the coal power plant it will ever do: the last of the 2008 programme are operational or near so: the pipeline is empty (The Dateln plant sometimes cited has no chance). One of the power plants may never switch on. By 2019 it starts shutting down its first token lignite plants… It continues to build out wind power.

        The UK is talking about not making such a fuss over climate change with new trade partners. It is NOT going back on renewables. Just last weekend it set a new solar record and it set a new wind record in Q1 2017. The coal plants are closing or closed – there will be no more operating post 2025. The UK continues to install solar, wind, tidal power.

        Since Trump was installed, US power companies continue to announce coal plant closures and new renewable projects. States like Texas, California, New York and Hawaii continue with ambitious renewable plans.

        I agree with you on bio-ethanol – a peculiarly US obsession, rooted in Republican ideas for energy independence pre shale oil. It is not a substantial factor in Europe’s energy markets. shut it down, along with exporting wood to UK power stations. (There are many UK green groups opposing that who would be glad of a contribution…)

      • China drops the number of coal plants it expects to build from 2100 to 2000, and from this Griff concludes that the end of coal is just around the corner.

      • Let’s not overlook the fact that this ‘reduction’ in coal is due to nothing but the concerted effort of an agenda-driven US president over the course of eight years who promised to bankrupt the industry. There are no legitimate market forces at work. For Grift to cite stats after sabotage is simply dishonest.

  10. The term Progressive was adopted by the hard Left including and especially communists to soften their image and blur their brand. The campaign reached it apogee in the 1930’s with the Popular Front electoral combination of European Social Democrats and Communists designed to combat the rise of fascism. It was decreed by Stalin from Moscow to further the interests of the USSR.

    Today’s US Progressive’s find their roots in the 1960’s non-Stalinist New Left. Same problem same solution. The Left could not sell The Cultural Revolution in China (Beatles “Revolution”), Crushing of the Prague Spring, or other obvious forms of political violence occurring in the socialist/communist world. Out comes the term Progressive. Environmentalism like world peace before it has become the wispy fog of mental confusion used to disguise the hard edged ideological hammer of collectivism.

    Point of that screed… we are fighting the old enemy in his recycled clothing. Thanks for listening.

  11. Perhaps another aspect of increased coal and LNG exports from the U.S. would be how much of an effect those increased exports would have on our trade deficits—particularly with Germany and East Asian nations building more coal and/or NG plants. I can’t say what kind of an impact increased fossil fuel exports to Germany, the Far East and other regions would have on our trade deficits with them, but here are some U.S. deficit numbers from the last two years with a few of those countries:

    China $347 billion (2016) $367 billion (2015)
    Japan $68.9 billion (2016 and 2015)
    South Korea $27.67 billion (2016) $28.3 billion (2015)
    Germany $64.9 billion (2016) $74.9 billion (2015)

    Source: https://www.census.gov/foreign-trade/balance/index.html.

    At any rate, I believe that every little bit helps. We should make every effort to increase fossil fuel exports to help bring down our trade deficits with other nations around the world.

    • Exports of refined petroleum products put a YUGE dent in the trade deficit.

      A ten-fold increase in natural gas exports and an increase in coal exports will make a big dent too.

  12. Ouch Griff

    That was a particularly quick slap down even for you. Are you starting to see or feel the pattern here. You cough up shaky comments and those with real knowledge jump in to knock you down. Unless you’re a punching bag by nature questioning your sources of information should be taking place. Don’t believe BS. Think.

    Best

  13. In the end basic economics will rule. As long as there are competitive markets those that insist on more expensive fuel sources for what ever reason will find industries who’s processes are reliant on energy migrating away and their economies and thus eventually the standard of living of their populations will decline. This goes for both nations and to some extent states or providences within nations.

  14. It is a little ironic that Wa state perhaps won’t be building any new coal export facilities in the Puget Sound area in Whatcom County, a facility that would have shipped out up to 54 Million Tons per year. Even more more ironic is that British Columbia will ship that same coal out of the lower mainland mere miles from the proposed site at Cherry Point, Wa. And all the while charging $30 a ton carbon tax to its local citizens for all carbon based fossil fuels in BC, while also wanting to build massive LNG export facilities further north up the coast closer to Alaska, which maybe now don’t get built because LNG isn’t worth quite as much as it used to be. (Carbon tax exempt of course for both enterprises in BC)

    Just saying how politics can corrupt its own supposed values charging its own citizens for a carbon tax, while expanding its own coal export ports, or driving up the price for local domestic NG at the expense of the local citizenry paying more for domestic NG. I guess that is just good for the businesses that export coal and LNG and a hit to the local energy consumer that used to enjoy fair electricity pricing.

    Which really shows how mismanaged Australia really is when it can’t (or won’t) burn its own NG while shipping LNG to Asia for large profits, while suffering huge price increases and grid instability with its very stupid policies of shutting down a few critically required base load coal electricity plants. Something doesn’t quite add up with that story line, although the essay does conclude that Australia is massively messed up on its energy file which just says it all. Hard to fix stupid.

    The problem with shipping out too much LNG, is that the local consumer will pay closer to the global price for domestic NG, which in effect makes coal economic again. Great for the USA where there will be little regulation on coal mining now, but in effect, the consumers of Australia (or Ontario) and to some extant the USA, will pay for that new price differential based upon Asian demand for the LNG. Especially for states that are also banning coal fired electricity who will pay a lot more for domestic NG when Asian demand for LNG keeps growing as fast as we can compress and ship it, all the while also reducing the international price of LNG as evident over the last 3-4 years of LNG global price compression.

    Maybe things will work itself out with the new relaxed rules on coal mining, but shuttering and dismantling he domestic coal burning generators will not solve the fundamental problem with base load electricity generation. Or pricing for electricity. Or the ability to add new renewables to the grid.

    • Ron regarding this “Even more more ironic is that British Columbia will ship that same coal out of the lower mainland” . There still is a ton ( no pun) of opposition to that coal terminal, as there is against the NG proposed terminals in Prince Rupert etc and the oil pipelines ( Kinder Morgan). It is quiet right now but if NG becomes a player again and these projects get revitalized the greens will start all over again. They especially strong in BC (Like the rest of the Left coast).

  15. US coal deposits are the biggest solar energy ‘storage batteries’ any country could ask for! We have enough clean energy stored in those ‘batteries’ to meet our national energy needs for the next 200 years, at a 2016 annual consumption rate. And clean energy produced from solar coal is reliable day and night, sunny or overcast, calm or windy. With coal, you never have to worry about dams breaking and letting all of that stored coal energy flood out….. or having coal reactors go ‘critical’ and causing an uncontrolled nuclear fission reaction.

    Safe, clean, reliable, abundant coal!

  16. David, thanks for the informative post.

    While reading it, I was wondering what it would take to get the coal industry to strip mine Washington DC and turn it back into a swamp.

    • Unfortunately, the process of turning coal back into a swamp has yet to be discovered… ;)

  17. “go ‘critical’ and causing an uncontrolled nuclear fission reaction.”

    So J Mac, we should make energy choices because you are ignorant?
    “Safe, clean, reliable, abundant coal!”
    What planet do you live on?

    David only briefly touched on the ‘delivered’ cost and skips a 60 year forecast.
    re
    The largest factor for safety in power production is transportation. Fossil fuels are only as safe, clean, reliable, and abundant the supply system.

    Dependence on nuclear is related to how much coal you do not have. China is building nukes because importing coal to its coastal regions is a drain on its economy.

    • Yep. Nuke plants that are already up and running are safe and relatively inexpensive to operate. As are coal-fired plants. And fuel transportation is safer than gas… which is very safe.

      • And fuel transportation *for nuclear and coal-fired power plants* is safer than gas… which is *already* very safe.

  18. Patrick MJD April 10, 2017 at 5:58 pm
    “Martin Mason April 10, 2017 at 3:25 pm said:

    “In Australia last year a coal fired power station was shutdown, I can’t recall where it was. Yesterday, it was explosively demolished. Reason: Unable to compete with renewables. I guess that is possible when one considers the massive subsidies involved.”

    There is a video of the initial demolition on another (later) post – “South Australia Demolishes their Last Coal Power Station”. This way madness lies!

    The massive subsidies come from the ‘renewables’ being able to create “Renewable Energy Certificates” which the ‘non-renewables’ – basically coal and gas – are required to purchase or else face heavy fines. Last year one large and several small power companies paid the fines rather than buy the certificates, as paying the fines was cheaper, even considering our 30% profits tax. This puts the price of electricity from coal up, and reduces the price of electricity from ‘renewables’ – basically wind farms in the Australian context.

    As the cost of electricity from wind farms is so high, the cost to the consumer is far higher than need be. This is death to our manufacturing industry if a firm has to compete with foreign firms who can enjoy low cost electricity derived from the low cost coal we export.

    As I said, this way madness lies.

  19. “Australian wholesale electricity prices have doubled since the closure of the Hazelwood coal generator was announced”

    And Australia finishes at the NSW, Victoria and SA borders?

  20. The more I read, the more truth comes to light. All economic decisions are London vs Austria. Keynes vs Von Mises, Hayek and the grandpa of economic science, Adam Smith. Right now, the Fabian side of the London School are the tip of the spear. And as dangerous as their mascot, a wolf is sheep’s skin.

    • Thanks J

      It is post like this why I read WUWT. Always learning something new. That link leads to another story: “Grains piled on runways, parking lots, fields amid global glut”.

      Like the drought in California being over, now we can stop blaming ethanol and farmers in Iowa for world hunger.

      Also in the news is the US fleet heading to the Korea peninsula. This is a routine exercise. The air force also routinely sends B-52 from Barksdale AFB to refuel over Guam and fly over South Korea.

      China and Russia also conduct exercises.

  21. “Less power plants can hardly burn more coal.”

    Griff fails to see things because he is stupid. US nuke plants have been making more electricity with few plants for 20 years. The reason is power uprates and higher capcity factor.

    Since electricity is not stored, production equals demand. Demand depends on weather and the economy. Spark spread is the term industry uses when natural gas can compete with coal in a given market.

    It only takes a small increase in gas prices so shift generation back to coal. Fewer coal plants will be running at a higher capacity factor.

    If demand increases, both coal and gas plants will have a higher capacity factor. Go figure!

    • I wouldn’t call Griff stupid. Most people who don’t work in the energy sector have a very weak grasp of resource and energy economics.

      People often cite the fact that the US oil industry hasn’t been able to build a new refinery in decades, without realizing that we have been able to massively expand the capacity of existing refineries.

      https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MOCLEUS2&f=M

      The demise of the CPP essentially halts the premature shuttering of coal-fired plants. The rise in natural gas prices increases the utilization rate of existing coal-fired plants.

      This leads to a 30% increase in US coal consumption, relative to the CPP scenario, without building any new plants.

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