Guest essay by Eric Worrall
h/t Breitbart – White House National Economic Council director Gary Cohn has just re-opened the US Government’s war on coal.
Gary Cohn Relaunches War on Coal: Fuel from America’s Heartland ‘Doesn’t Make Much Sense Anymore’
White House National Economic Council director Gary Cohn, a former Goldman Sachs banking executive, has reopened the U.S. government’s war on coal in direct contravention of directions from President Donald Trump.
“Coal doesn’t even make that much sense anymore as a feedstock,” Cohn said in Europe on Air Force One, while speaking for the White House to the press, the New York Times’ Brad Plumer noted.
“Natural gas, which we have become an abundant producer, which we’re going to become a major exporter is, is such a cleaner fuel,” Cohn continued.
Trump adviser Gary Cohn a bit off-message on Air Force One, per pool report: “Coal doesn’t even make that much sense anymore as a feedstock" pic.twitter.com/0QLXZOik6k
— brad plumer (@bradplumer) May 26, 2017
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Frankly I’m getting very disappointed about this kind of thing. The Trump Presidency is supposed to deliver the straight shooting leadership we’ve all been waiting for, the White House administration which doesn’t have to be continuously reminded about the President’s campaign promises.
A chief economic advisor who despises coal has no place in the government of a President who expects future support from coal country.
While the US might continue using our abundant natural gas resources, we should continue mining our clean, high BTU content coal and selling it to China, to replace their dirty, low BTU content brown, practically peat stuff. Less pollution and more energy efficiency there; evening our the balance of trade here.
We should of course also quit buying their wind turbines and solar panels, made in processes which would violate US environmental restrictions left and right.
Besides which, coal gasification.
“While the US might continue using our abundant natural gas resources, we should continue mining our clean, high BTU content coal and selling it to China, to replace their dirty, low BTU content brown, practically peat stuff. Less pollution and more energy efficiency there; evening our the balance of trade here.”
The U.S. should also get credit for the subsequent reduction in CO2.
I think the U.S. has reduced its CO2 output by about 7 percent over the last ten years, by building new natural gas powerplants, and we should get credit for helping China reduce its output, too, when we sell them cleaner coal.
Manufacturing tends to be very energy intensive. If you just drive all your manufacturing to China your emissions will drop and you will be popular! Then all the rich Chinese will have to live with the stigma of being “dirty”. How awful for them! Oh wait a minute! You’ve already done that and the Chinese don’t seem to care!!
As soon as solar panels become waste, they are hazardous waste. Lots of heavy metals used to connect parts internal and external to the panels. The solar industry is still trying to deal with that.
Mr. Cohn only stated the obvious: coal is no longer the cheapest fuel. He did not call for banning it or regulating it to death. It should compete on a level playing field – Obama did load the dice heavily against it.
Coal feedstock will theoretically be more than competitive in the long term future because Nat Gas pricing has no where to go but up. With more and more long term LNG contracts being signed and more LNG trains being built in the gulf states in USA, as well as Oregon, demand for NG will be higher for LNG exports in the future. If Canada does’t build out its west coast LNG due to political strife, then there will be a huge supply of stranded continental NG available for piping to USA LNG and domestic NG. That will dampen the spike for NG domestic prices, however if Canada does build its LNG potential, then NG will be priced more globally in North America due to LNG feedstock demands and will be much more expensive than coal. Expect rising prices for everything the more LNG is shipped.
However, being an investor in coal, oil and gas, I would be surprised if the large corporations with deep pockets would start building any new coal fired plants. The political risk is just too high that after 2020 especially if Trump doesn’t get a second term, then coal will be a very high risk to expend a lot of capital on when maybe future Democrats will just turn the tables on coal again. I wouldn’t hold my breath that coal has a large future in North America for generation, just based on politics and potential pricing parity depending how much LNG does get shipped out of North America. Perhaps more coal for export, but probably not for domestic use. IMO, this isn’t an indictment or statement against coal, just an observation which way North America is going with its energy supply/security and NG will be the favourite fuel of choice going forward.
If he was with Goldman Sachs my opinion of them goes down, Unless, of course, they kicked him upstairs to clear the air in the office.
He and his cronies have probably made a lot of money in oil and gas by suppressing coal and more from wind and solar subsides.
Why does it have to be gas v coal ? Why can’t it be both ? I’d listen to the anti coal , pro gas argument if ,for example, they advocated pushing for more of the transport fleet changing to gas ( LPG ) –it’s not a new idea, been around for decades. Has anyone looked at the current economics of converting coal to liquid transport as they do in South Africa ( and what the Germans did in WWII).
I don’t know how well this development is going http://oilprice.com/Energy/Energy-General/US-Coal-To-Gasoline-Plant-Will-Be-The-Largest-In-The-World.html — maybe bogged down in red tape.
But the main argument for US coal has to be exports —maybe the politic threat mentioned by Mosher above will stop the development of new coal fired power stations in the USA but there are hundreds being built overseas and so if the USA coal mines can be very efficient then then will be markets.
In a capitalist system, the government has no place supporting one energy source over another. Let the market decide. When costs of keeping pollution to a reasonable level are included, let the supply and demand rule the day. Keep your ugly fingers out of the works.
Absolutely correct, Jeff! The answer to this conundrum is to give up the idea that we live in a capitalist economy. That has been eroded since the 60’s such that it virtually no longer exists. The welfare state, tax subsidies for corporations, regulations that have a political purpose rather than any practical benefit and massive state borrowing. All these things have eaten the heart of capitalism as government has grown without limits. We are past the point of no return. Next comes collapse. We got the governance we deserved. More people take from society than contribute now so democracy cannot fix itself.
Ya gotta love the “coal is dead” meme. Wishful thinking much? We still need coal. It is a natural competitor for NG, much in demand nowadays. Competition is good for everyone.
LOL use steel much? 70% of the steel produced in the US uses coal. But listen to the Mosh Pup. “Coal is dead”.
But 90% of US coal goes into power stations.
Coal is dead. 4 new plants in the pipeline, most every attempt at re licencing fails.
Yes competition is good. coal can’t compete. you own coal stocks? why not
Steel, not exactly an explosive growth market in the US. you own steel Stocks?
http://www.thespec.com/news-story/4190319-u-s-steel-natural-gas-process-will-soon-replace-coke/
coal is dead
Do you mean dead like Paris climate accord dead? Or dead like still forecast to comprise a substantial percentage of domestic electric power generation for decades dead?
We’ll see if the bright sparks with their tree ring circus can disprove a fundamental axiom of engineering that you can’t make a reliable system from unreliable componentry Mosher-
http://anero.id/energy/wind-energy/2017/may
Keep throwing taxes at that pure form of State sponsored dumping while thermal generators are being asked to pick up the insurance tab and going to the wall in the process and we’ll see if coal is dead in the long run when the rolling blackouts begin in earnest-
http://www.heraldsun.com.au/blogs/andrew-bolt/trump-could-save-our-electricity/news-story/411df86a4518caa7e535f748df39d81c
June 1st PSEG shuts down two coal fired power plants, reason they can’t compete with tracked gas.
http://www.philly.com/philly/business/energy/pseg-shuts-down-its-last-n-j-coal-plants-its-just-economics-20170530.html
Should be ‘fracked’ of course, spell checker problems!