Coal Demand and Prices Surge… As Do U.S. Coal Exports!

Guest post by David Middleton

Coal_Price_Soars

Coal prices are on the rise again. With benchmark rates in Australia up over 30 percent since July — approaching the $100/t mark that prevailed in November 2016 after a massive run-up last year.

And a number of events the past week show that things could get even more heated in coal over the coming months.

The biggest story recently has been China. Where a push to restrict coal imports has driven local prices to multi-year highs. With data this week from Platts showing that 102 coal-laden boats are currently anchored offshore of Chinese ports, unable to deliver their loads.

[…]

And China isn’t the only place where demand is going up. With South Korea also seeing record coal imports of late — bringing in an all-time high 11.3 million tonnes in September, with October imports expected to set a fresh record at 12 million tonnes.

That’s reportedly coming as new coal-fired plants start up, and Korean nuclear plants experience downtime. Meaning Korean users are scrambling for supplies — even as mine output may be about to take a hit.

[…]

That threat of lost supply — and rising global demand — is all coming just as new and significant players are entering the coal space. Such as Bangladesh: where state minerals firm Petrobangla said this week it is looking at buying stakes in coal mines in South Africa, Australia and Indonesia.

Petrobangla’s stated goal is to acquire captive supply for export back to Bangladesh’s surging coal-fired power sector. Which would mean one more mouth to feed at a time when supply and prices are getting extremely tight.

Watch for ongoing import numbers in China and Korea, and for South African strike announcements and Bangladesh deals.

By Dave Forest

Oil Price Dot Com

What could be even better than “soaring” coal prices?  The resurgence of the American coal industry and surging U.S. coal exports!

chart (9)

Figure 1. U.S. monthly coal exports. August 2017 exports of 8.57 million short tons were twice as large as September 2016 (4.27 million short tons). U.S. EIA.

Why are U.S. coal exports surging?  The end of the War on Coal is one factor… But the fact that U.S. coal prices are far less than the $100/t level.

Coal Prices USt

Figure 2. Current U.S. coal prices ($/short ton). $57.85/short ton = $64.79/imperial ton). U.S. EIA.

Even better news for coal:  Despite the surge in prices, coal is still highly competitive with natural gas (~$3/mmbtu) in these nominally United States…

Coal Prices US

Figure 3. U.S. coal prices ($/mmbtu). U.S. EIA.

chart (10)

Figure 4. Average fossil fuel spot prices ($/mmbtu). U.S. EIA.

To paraphrase the great Samuel Clemens “The reports of coal’s death are greatly exaggerated.”

With Tesla and EV’s floundering and coal surging… What on Earth can save us from Gorebal Warming? (wink-wink-nudge-nudge)

 

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Resourceguy
noaaprogrammer

Ol’ King Coal was a merry old soul…

Paul Penrose

…and a merry old soul was he.

He called for a light in the middle of the night
To go to the WC.
The night was dark, the wind too light
To make renewable power,
But Ol’ King Coal had full control
To light up every hour.

Ron Long

I´m sure China is buying all of that coal so they can sequester it in some safe place and help save us all from Hell On Earth, which that nut-job Trump seems dedicated to achieving. What? THEY ARE GOING TO BURN IT IN ELECTRIC-GENERATING PLANTS? There is some kind of collusion with Trump? Help me!

SMC

Poe’s Law…

Ron Long

SMC, I had to look up Poe’s Law. I am now a more educated person. Also, I continue to be sarcastic and will find opportunities to include a peripheral reference to Poe’s Law in my sarcasm. The basic comment is this: China never had any intention to do anything other than what was best for them, and if they can throw some dysfunction into our culture while at it, so much the better, and President Trump sees this very clearly.

BigFire

Or rather, a lot of those coal are ‘assets’ used by Chinese companies for loans. These same ‘assets’ are used in hundreds of loans simultaneously that would give “The Producers” a run for their money for creative accounting.

Catcracking

Ron Long,
you are absolutely right, China never had any intention of reducing CO-2 emissions. Even Obama knew that when he proliferated the lie to the masses. Probably the MSM and all the left politicians also knew that be used it anyway conveniently leaving out the prolonged date they are going to start thinking about it because they have no integrity and it suits their agenda.
One wonders what Obama gave China to go along with the scam.

Griff

all this shows is the US is well placed to take advantage of temporary shortages…
These aren’t new and increasing markets.

US home power market still declining (no new plant announced since Trump came in… 12 closures announced)

SA mentioned – but not that SA courts halted plans for new coal plant…
I have my doubts about whether Bangladesh will fund/approve the 23 GW of coal it has announced.

Paul Penrose

But then Griff gets everything wrong; he even likes the new Star Trek which is a pile of excrement.

kaliforniakook

Hoping he keeps his record intact… Griff should hate Orville.

catweazle666

“The market says Griff got it wrong”

Griff gets EVERYTHING wrong!

Sheri

Doesn’t matter where we sell it, just that it gets sold.

Old England

The 1600 New Coal fired power stations being built around the globe in the next few years – 600 in China alone – rather suggests that coal markets are on the increase.

Griff

I note you don’t cite the number of shut downs alongside that.

and if you look at latest figures out of China and India, that figure is out of date/too high.

The figures change rapidly these days

Resourceguy

Wanna buy a Tesla? Put your money down and we’ll get back with you.

Old England

You never know it might even arrive before you’re too old to drive it.

Catcracking

Maybe not when thy go bankrupt and you do not get a refund.
Only moonbean can bail them out now.

Crispin in Waterloo

Griff, try to keep up.

These are new and increasing markets.
The US market is declining with its economy and efficiency improvements. If the economy grows, power demand will rise.
SA to me means South Africa. SA is now booting their gigantic new power plant at Khusile burning high ash coal.
Bangladesh won’t fund their new capacity, China will, as part of the ‘ocean’ version of their new Silk Road initiative. They also built the new capacity in Dushanbe and Bishkek. They are building economic hegemony while the West deconstructs theirs, as you noted.

Griff

https://www.platts.com/latest-news/coal/singapore/chinas-sep-coal-imports-rise-11-on-year-to-2708-26820700

“Yet, coal demand should weaken by the end of the year due to environmental crackdowns on industrial activities and supply cuts in steel production,” the analysts said. “This could in part ease tightened market and lessen demand for coal imports by the end of the year.”

LdB

Sorry to burst your bubble Griff but you only have to look at the forward contracts to see you are wrong or deliberately lying.

Meanwhile you better start stockpiling your money the UK is about to get belted in Brexit. Nasty little detail out the UK will 67 TWh of power from undersea interconnectors from Europe by 2030. You are importing more and more each year as you are failing at replacing local supply. What could possibly go wrong with this in a post Brexit era. God save the queen because she is going to need all the help she can get.

Sheri

Build more wind turbines. That was Denmark’s solution to the oil embargo, wasn’t it? Should work if the EU embargoes your imported energy.

LdB

Haha yeah but you only have 2 years .. you can see how UK is going to get tough on Brexit negotiations and say they aren’t paying all these outrageous debt. The EU goes okay and makes a ruling to stop any European country or company able to provide power to the UK … they have you in a bit of a spot.

First rule of negotiation never do it from a position of weakness.

Old England

LdB,

Not sure quite what economic fantasy you are having – EDF is a major UK electricity and gas supplier. You know, Electricitie de France, who own the French nuclear power stations that send electricity through the interconnector.

Of course the French Government and EDF are going to make sure that EDF’s huge UK business goes to the wall and they lose their share in Britain’s new nuclear plant.

You may have voted to remain ruled by Brussels but silly scare stories like this make you look deft or at least economically and business illiterate.

LdB

UK owes 64Billion Euros according to the EU the whole of EDF Market Value is 21Billion Euros .. which is bigger?
So who is economically and business illiterate???

You are sold and convinced and we only have 2 years to wait so we will know who is right soon enough.

Gerry, England

The Queen will be fine as she has a diesel generator on standby.

As to EDF, they will only be too grateful for a reason to drop out of Hinckley. Such a dumb scheme.

Griff

We also have the ability to export down those same cables and have done so to France. It isn’t a one way cable set up.

Yes, brexit is a concern.

Sheri – Denmark got 109% of electricity demand from wind last Saturday

MarkW

In Griff’s world, everything will start going his way … soon.

Old England

Never Never land ………. where childish green fantasies remain childlike forever and they never have to meet reality …….

AndyG55

Griff’s home !!

Roaddog

BHP, on the other hand, projects strengthening of met coal demand, due to further concentration of alloying facilities along the coast.

Catcracking

They need coal to make steel for all those 15 th century windmills that are are being retired prematurely or falling down.

so they can sequester it
===============
what a concept. bury coal in the ground and call it CCS. bypass. the burning step altogether which makes CCS so problematic.

1 ton of coal makes almost 4 tons of co2. so if the price of carbon credits gets much above $25 a ton you can make money buying coal at $100 a ton and burying it in the ground.

OweninGA

The beauty of that is that when the whole farce collapses in a few years you can dig it back up and sell it for even more profit. Dang I may have to buy myself some coal to bury on the back forty…

LdB

One of the funnier stories about Coal in Australia was the NSW Government selling the Vales Point Power Station for $1M AUD. You can read what happened next
http://www.abc.net.au/news/2017-10-24/coal-power-station-sold-for-peanuts-becomes-730-million-asset/9077582

The investors walked away with $40M each for the first year of operation and a valuation of $730M and a supply shortage to make buckets more in for the next couple of years.

What a debacle.

Crispin in Waterloo

That story is as green as it gets. They are rolling in green. It wouldn’t surprise me to hear the buyers are big promoters of you-know-what.

Mark from the Midwest

Just hoping Soros is still holding some of his short positions on coal, he expected Hill-o-beans to win and was playing this one pretty hard.

Sheri

Not sure Hillary being elected was part of Soros plan. He’s a globalist. He makes deals with anyone around the world. If Trump won, then there’s China, India, etc.

Mark from the Midwest

But commodities are always traded based on global supply and demand except on the spot markets, and Soros was a huge contributor to the Clinton Foundation

kaliforniakook

I think you missed the part where Mark said Soros was shorting coal. China and India are buyers.

Samuel C Cogar

Arch Coal Bankruptcy Looms As George Soros And Leon Black Sell Shares

In the weeks following an August 4, 2015 stock split, shares of Arch Coal (NYSE:ACI) shot up from $1.00 to over $10.00. Much of the rise could be attributed to news reports linking famous investors George Soros and Leon Black to large share purchases of the struggling coal company. SEC filings dated November 16 show both of these investor’s firms sold off their entire Arch Coal holdings during the last quarter.

Source https://seekingalpha.com/article/3726006-arch-coal-bankruptcy-looms-george-soros-leon-black-sell-shares

Bruce Cobb

Coal is great
Coal is cool
And we thank it for our fuel.

chadb

Frankly I don’t believe the numbers on the EIA page are meaningful. When you flip over to the $/MWh page you have Powder River Basin coal coming in at 1/3 the cost of Natural Gas. And yet you have new natural gas capacity coming online in ERCOT while PRB coal is shutting down. I am pretty sure that if the cost of coal went to $0/ton you would still have coal shutting down due to the higher labor and compliance cost of coal plants.
Yes we might make some money selling coal overseas, but we sure aren’t digging much more out of the ground
https://www.aar.org/data-center/rail-traffic-data

John W. Garrett

Neither newbuild capacity planning in the generating business nor production in the mining industry respond to perceived short term commodity price fluctuations.

Nevertheless, it is not impossible that we are at the beginning of the end of the substitution of natural gas for coal.

Dave Kelly

For the U.S. that would require the removal of the EPA’s 111 D requirement that new coal plants be constructed using carbon sequestration. A present, it’s not all that clear they will do this. The new EPA properly admits the “Clean Power Plan” was unlawful constructed under the Clean Air Act. So the of the Section 111 B regulations – which target existing plants – are likely to be eliminated. Time will tell if the EPA kills off Section 111 D.

The coal prices above simply illustrate that new coal plants would be very completive with new natural gas plants if the Section 111 B GHG regulation was repealed.

Incidentally, the most competitive coals listed above are ILB 5.0 and PRB. Uinta is valuable if you have an uncontrolled plant and your pulverizer system can’t safely handle PRB (explosive hazards) OR you need the power and can’t take the derates that commonly come with using PRB. Uinta is in lower demand today than say in 2008; because, most U.S. plants in the Midwest, South, and East coasts were equipped with Flue Gas Desulfurization (FGD) system to meet the new CSAPR rules. Hence these plants can now handle a high sulfur 5.0 lb ILB for units equipped with wet FGDs or ILB/PRB blends (usually in 2.5 lb sulfur /MBtu range) for units with dry FGD systems.

Northern and Central Appalachian coals are high grade coals that tend to be used more for steel production. The only time you’d use an Appalachian coal is if your coal units were sensitive to the use of low Btu coals and/or unable to utilize a broader range of coals (slagging issues, start-up issues, etc.).

Crispin in Waterloo

David Kelly
Thanks for the cogent and compact update. I was reading that the new ESKOM plant in South Africa is designed to use coal between 38-42% ash, only. They are way over the limit on their NOx emissions so are funding PM2.5 offsets in poor communities as the penalty. I think that is a cool idea. The NOx isn’t bothering anyone and the PM is. As in the central US, the S emissions are just fertiliser. Huge buffering capacity in the soil.

Dave Kelly

Crispin in Waterloo @ November 4, 2017 at 1:47 am

When I was with the Tennessee Valley Authority’s National Fertilizer Development Center (unfortunately closed in the late 90’s) we recognized controlling sulfur emission was causing serious problems in the agricultural community and that this was a particularly acute problem for third world farmers.

In response, two colleges of mine (Larry Gullet and Charles Simmons) invented sulfur coated urea – United States Patent 4676821 (See here http://www.freepatentsonline.com/4676821.html ). This a U.S. government patent. As such it free to the public.

This particular technology provides four advantages: 1) It provides an economical way to replenish sulfur, 2) It slows the release of nitrogen and encourages more efficient nitrogen uptake, 3) The nitrogen content of the fertilizer is high to provide economical transport over long distances, and 4) It only requires a single application (i.e., no need to enter the field twice).

[Thank you. Consider writing a short article here describing the program, and what it did, and why it was apparently stopped. .mod]

Alan Watt, Climate Denialist Level 7

In the current US situation, natural gas for electricity has become the conventional and therefore safe bet. Lower capital cost, faster build, fewer environmental hurdles and historically low fuel prices. But the US situation does not apply everywhere, which is why other countries will absorb whatever US coal production we don’t use domestically.

I like having at least some coal generation for (a) fuel diversity and (b) on-site fuel storage. Coal and oil are found in two different geological formations using different recovery techniques and largely by different companies, which means there is meaningful competition. If a pipeline is disrupted, all the gas generating facilities using it will be offline very quickly. Coal plants can keep weeks or months of fuel stored at the plant and can therefore keep operating in spite of fuel delivery disruptions.

If we continue the transition to mostly CCGT power, the generating plants will move to the gas fields since it is easier to transport power than fuel. If a field will be productive for the 30-50 years of a CCGT plant life, that’s a good deal all around.

And don’t forget that roughly 15% of all coal mined annually goes into new steel production, which increases every year.

Coal will be with us for the foreseeable future.

Catcracking

The economics are even worse when you shut down a perfectly good operating coal plant and have to spend a fortune of capital to replace the energy supply with gas, windmills or solar panels even if the plant is less efficient. No good company replaces older good operating equipment without considering the capital cost unless mandated by a horrible regulation

Griff

“which is why other countries will absorb whatever US coal production we don’t use domestically”

will they?

India is attempting still to reduce imports (regardless of coal plants it may or may not build). EU and UK have stopped increasing coal plants and are closing them…

Competition from Russia and Australia…

The market is shrinking (if you allow for shut downs as well as the (reducing) new capacity) and there’s competition

MarkW

David, that’s covered under the “unless mandated by a horrible regulation” portion of catcracking’s post.

Dave Kelly

Chadb

Before I retired, I arranged to have the TVA Shawnee power plant scheduled to be fully controlled. We also had the pulverize system upgraded to allow the plant to handle PRB. The plant is now at the top of the dispatch list – beating our gas plants. Coal plants using PRB can be very competitive.

Dave Kelly

Chadb

Before I retired, I arranged to have the TVA Shawnee power plant scheduled to be fully controlled. We also had the pulverize system upgraded to allow the plant to handle PRB. The plant is now at the top of the dispatch list – beating our gas plants. Coal plants using PRB can be very competitive.

Joe Crawford

” in these nominally United States…” Nice slip,David <:)

Actually feel a small bit sorry for the blog pet alarmist Griff here. This would appear to be truly desperate news indeed. It is entirely possible that Trump can begin making significant inroads into the only real legacy Obama left which was massive and pointless national debt. Trump can at least potentially do this by heavily exploiting US fossil carbon reserves while the planet naturally cools or remains thermally paused via. oceanic and solar cycles. A ghastly concept for Griff but a properly funny prospect for the most of the blog regulars.

Griff

But still nobody is opening new US coal power plant and still they are shutting it down.

what is the real permanent market outside the US and EU?

Griff, *nothing* is permanent. You need to understand that. The dinosaurs probably thought they were permanent – until they weren’t. You also need to learn how to use Google or whichever is your browser of choice. https://www.bloomberg.com/news/articles/2017-02-17/u-s-coal-mines-are-opening-in-a-year-of-cautious-optimism

Griff

Right then… would ‘year-on-year’ be a better term?

omnia mutantur et nos in illis mutandis, for sure.

Michael C. Roberts

Griff – You are probably asleep, over there across the CONUS and then The Pond. I have been reading more than posting recently, but had to make a comment after seeing your continued band-wagon assertions, your appealing and downright rooting for power sources ‘other than conventional’.
IMHO – Simply, the whole cAGW ‘movement’ (bowel-related as it is) and it’s attendant projects to convert the worlds’ power generation to ‘unreliables’ has been driven by more political than fiscal issues. Plain, and simple.
Here in the USofA, those political drivers have been dialed back a notch (and, God-willing will continue to be), and we can see the changes in the mix of power generation starting to slowly change back. And, as Mr. Middleton shows us quite plainly there are distinct fiscal drivers regarding the various fuel resources that cannot be ignored.
However – As the energy playing field continues to be stripped of the political drivers, the rush to ‘unreliabes’ should slow down. I like to use the analogy that the entire cAGW issue (at least here in the USA) is like a vast oil tanker chugging along the sea lanes, and when the engine is shut down (analogous to the removal of onerous regulation) what we may see in the energy sector is akin to that oiler, merely continuing along under inertia, the energy once generated by her now-snuffed engines (like the removal of onerous regulation).
Once the projects in the pipeline are built out – the inertia playing out – dollars and sense should start to come to the fore, as far as power generation choices are concerned.

Regardless of your incessant assertions to the contrary.

Awaiting your return comment. Should be interesting.

Yours in WUWT,

MCR

Rather, imagine that tremendous ship being driven forward by several propellers in the stern, each pushing its load based on economy, reality (airplanes and trucks and cars cannot use electric power directly, nor can they use electric power efficiently with batteries), ans for service (a farm harvester cannot run on cables, coal, nor batteries!, but diesel works just fine for a 16 hour harvest day.)

But in front, the enviro’s have deliberately installed propellers pushing backwards, policies that increase drag and weight and inertia and useless costs, and attitudes and taxes that deliberately slow the ship even more. Removing these artificial barriers and troubles will speed the ship up. But each one, by itself, only slows it a “little bit”, right?

Bruce Cobb

And as long as we didn’t burn it, but a developing or third world country does, the carbon doesn’t count under greenieaccounting roolz. Win-win.

Resourceguy

Then their economy grows and they burn more. It’s the carbon economy cycle.

Crispin in Waterloo

US farm production will rise wherever the coal is burned. That’s another win (if the CO2 rise really is human-induced).

Resourceguy

Rising oil prices from rising global economic growth will speed up all commodity markets and trade flows.

Hans-Georg

The fact that the profits of the coal industry will increase in 2017, however, must be due to increased production and increased consumption. So much the prices have not risen compared to 2016. Maybe you should disregard all statistics until the end of 2016 (Obama time) and turn to 2017.
So far, however, coal production in the first half of 2017 has been rising for the first time since 2014. It is clear that an idle coal production can not reach the figures of earlier years, the workers who have been laid off are missing. There are no buyers, which need to be recaptured. Even machinery has been thinned out and need to be bought again. This takes time, but the signs of the new Trump policy towards coal are obvious.
“US coal production totaled 187.1 million short tons during second quarter of 2017. This was 5.1% lower than the previous quarter and 16.6% higher than second quarter 2016. Production in the Western Region, which represents about 53.1% of total US coal production in second quarter of 2017, totaled about 99.4 million short tons (19.7% higher than second quarter 2016). ”
https://www.eia.gov/coal/production/quarterly/

Bruce Cobb

Uh-oh, now along with coal trains of death we’ll have coal ships of death.
That can’t be good.

Curious George

“102 coal-laden boats are currently anchored offshore of Chinese ports, unable to deliver their loads.” Because demand is so high, that prices shot up and nobody can afford to buy it, driving the demand even higher. A classical definition of a bubble.

Bruce Cobb

That makes no sense. If nobody can afford something, it drives demand lower, not higher.

Resourceguy

Not instantaneously

Crispin in Waterloo

It depends on the elasticity of the demand. If people have to have it to live, they will find a way to buy it, even if they can’t afford it.

Alan Watt, Climate Denialist Level 7

I heard similar reports during the ’73 oil crisis — that there were dozens of supertankers idling in the ocean waiting for prices to go up before delivering their loads. It was total bunk, or as they say these days, “breaking news from CNN”.

If you work out the daily operating expense of a cargo ship, it makes far more sense to deliver the cargo you have, get paid for it, then go back to get another load. Even at $100/short ton, the total cargo value relative to the operating expenses of a ship is not much; keeping a ship idle will quickly eat up any gain from rising prices.

Now a cargo ship full of iPhone 10’s on the other hand …

Catcracking

Alan Watt, your are correct the demurrage on a crude ship must be astronomical so I never believed the media claims. The crude prices already went up and we were facing a shortage.
Also some of those ships were being lightered via barges to allow them to enter port due to draft limitations.

Samuel C Cogar

“Yup”, me thinks that iffen one had a cargo ship full of new iPhone 10’s ….. they could surely “peddle” them in most any port of call.

But iffen they had a cargo ship full of crude oil, coal or wood pellets ….. they damn well better have a signed contract for delivery …… as well as a guaranteed payment for said shipment, …… otherwise they will have to accept whatever a buyer offers them ……. or take their cargo back to where they got it or dump it out into the ocean.

Lucius von Steinkaninchen

But the MSM told me that coal is on the way of the dinosaur and soon the whole world would be powered by plausible, scalable green energy sources like weather vanes and potato batteries. I’m confused…

karl

Annual coal consumption dropped from 8500 Million Tonnes in 2014 to only 7500 Million tonnes last year.

Why?

Because contracts for DELIVERED kWh for wind and solar are cheaper than what coal can do.

“In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate electricity from sunshine for less than 3 cents a kilowatt-hour, half the average global cost of coal power.”

https://www.bloomberg.com/news/articles/2017-01-03/for-cheapest-power-on-earth-look-skyward-as-coal-falls-to-solar

In Australia:

“After consulting an electricity price app on his phone, ARENA chief Ivor Frischknecht told the Senate Committee: “I can tell that right now, the electricity prices range from the low $80s (/MWh) up to $112/MWh in the various NEM states.

“So all of the prices right now, and in fact the average prices over the last year or so, have been above those numbers that I quoted (for new solar and wind),” Frischknecht said, in response to a question from Greens Senator Larissa Waters.

SEN. WATERS: So you’re saying that new wind and new solar is cheaper than existing coal or gas, or new coal or gas. Is that correct?

FRISCHKNECHT: That is correct.

This, or course, refers to the fact that wind energy contracts are being struck at a price of around $55/MWh and solar contracts are thought to be around $70/MWh, and falling fast.”

https://cleantechnica.com/2017/05/28/wind-solar-already-cheaper-coal-gas-lets-get/

That is for delivered electricity no cost of installation.

Steven F

Did anyone hear notice all the US coal information was from 2016 to pressent. Yes the article says it is goiing up in the last year. But US coal is now at a 30 year low in production.

https://wolfstreet.com/2016/06/13/why-us-coal-production-collapsed-to-lowest-level-since-1981/

So what? The article is about the demand for and price of coal now going up again. Isn’t it Steven?

Gary Pearse

I think electing Trump released a pent up demand for coal. Renewables were already proving to be a bust and the world needed “permission” to make the only move that had come to make sense, but dared not be mentioned by name.

The beautiful irony is that the world is pressing on with EVs as a proxy for saving the planet now that failing renewables are beginning to have life sustaining subsidies cut (sauve qui peut), and they’ll be powered by coal and natural gas fired electrical.

Griff

Renewables in the US – wind and solar – continue to expand, as does natural gas.

And I note recent research shows a car powered even by fossil fuel in europe saves more CO2 than a diesel

“It will all end in tears”, comes to the mind of the Greenies and Warmistas as they see the rise and rise of Old King Coal.

GREG in Houston

The export market for US coal has always been under-estimated. Greens try to block port loading facilities for coal – once again relegating the poor of the world to energy starvation.

karl

Not really,

The major consumers of Coal are in Asia

The largest producer of coal is China, #3 and #4 are India and Australia.

The ONLY reason there is a market for US coal is because CHINA has reduced production.

China produces 4 times the amount of coal the US does — 3.6 Billion Tonnes vs 922 Million Tonnes

AndyG55

Karl, Indonesia also produces large amounts of coal..

They were sort of neck and neck with Australia a couple of years back.

karl

@ Andy

Thanks for more supporting evidence.

AndyG55

Evidence that CO2 emissions will continue to climb and climb for the foreseeable future.

1600 new coal fired power plants.

Countries vying for top dog in the production and export of coal.

US production and export getting un-blocked as well.

Coal is KING, and will remain so for a LONG time to come. 🙂

So there will be PLENTY and PLENTY of highly beneficial atmospheric CO2 for decades, probably centuries to come.

And plant life will LUV it. !!

You are welcome. 🙂

Retired Kit P

Looking at the price of coal and gas without looking at demand for electricity can be misleading.Two things affect demand, the economy and weather.

Generating cost is the product of fuel price and heat rate (efficiency). The lowest generating cost plant comes on line first, then the second and so.

So when demand is low, natural gas prices are low. Newer efficient CCGT take market share from coal in the US. However, when demand is high the price of natural gas increases and the coal plants become the lower generating cost. Market share for coal increases.

This does not hurt the gas plants because they are still needed because of the higher demand.

On nice spring and fall days when demand is low, the Griffs of the world will brag about how good renewable are based on market share.

The test of the market comes on really ugly days of high demand. Even the oldest dirtiest coal plant is running flat out.

The not in my term of office politicians run on a campaign of closing coal plants. After elected the power company tells the politician how any will die without the coal plant. If the politician wants to get elected again they make a deal to close the plant in 20 years.

Dave Kelly

Just so. To add a bit. The Obama years resulted in heavy regulation of all the U.S. industries. One product was extra ordinary low GDP growth. As a result, utilities, mine included (I’ve since retired), projected low to flat electrical demand — as they were anticipating continued over-regulation of commerce and low long term GDP growth.

The pro-growth Trump economy is chugging along nicely with much higher than anticipated GDP growth and a resurgence in the growth of commerce. So I expect that, in about 2 years, utilities will to start revisiting there GDP growth projections and start to announce they need to building more power plants. (They are a financially conservative lot… so I don’t expect them to be doing much now).

At that point, I expect an initial spurt of growth in natural gas capacity. Natural gas (NG) plants first, simply because NG plants can permitted and built in roughly a 3 to 5 year time frame. Whereas, it takes between 5 to 9 years to get a coal plant permitted & constructed. So, assuming the EPA’s Section 111 D GHG rule for new coal plants are eliminated in the interim, I expect we will be seeing new coal plants being constructed beginning about 7 years from now.

karl

@ Dave

Over the next ten years there will be an order of magnitude or more electricity generated by new Wind and Solar than new NG.

we can see how well my prediction holds Christmas of 2027

Dave Kelly

karl November 4, 2017 at 5:15 pm

Good luck with that.

I can’t speak for other regions of the U.S. but… that’s not likely to happen in my region. Simply put, my capacity planning/fleet strategy team’s essentially put you renewable guys in a “box” that you can’t escape from.

Here’s the dilemma you face. During the recession we took advantage of low labor/construction cost to add a mix of new nuclear, new gas, and revamped coal. In addition we revamped the raccoon mountain water storage system and added purchased wind to our capacity inventory.

This had the following impacts

a) As a means of maximizing fuel flexibility we fully controlled all of our coal and gas units. This, in-turn, reduced our coal purchasing cost by roughly $1 billion/year and substantially decreased the generating cost of our remaining coal assets.

b) We retained our older coal units long enough to add a substantial amount of new nuclear. We then closed our oldest most inefficient coal units. (Sorry “Eco-activist” – closing these plants wasn’t a “win” for your side. It was our plan all along. )

c) We purchased number of gas units, mostly in Mississippi, as a means of capturing expected low long-term natural gas prices in areas of our region where gas was available and expected to remain cheap. Also a practical necessity given our coal fleet was roughly 60 years old.

d) We replaced the Allen coal plant, near Memphis, with a highly efficient base-load natural gas system – one of the most energy efficient in the world . For those “gas only” guys, don’t get too excited, the delivered coal/gas prices in the Memphis area have historically tended to track closely… the original Allen plant had been configured to used gas before it was converted to a coal plant. For the western “wind” guys, sorry but the cost of production at the new Allen plant is exceptionally competitive. We simply don’t need your capacity and can beat your cost.

e) We replaced the Paradise 1 & 2 units with a second highly efficient natural base-load natural gas system. For those “gas only” guys, don’t get too excited, this decision was a balance between the cost of fully controlling either the Shawnee or the Paradise units & the need for capacity flexibility in the area.. . particularly given local demand reduction resulting from the closing of a nearby nuclear fuel processing facility. Construct of the new gas plant allowed us to build more capacity than we immediately needed as a way of providing a capacity buffer in the area.

f) We used both items c, d, and e above as a mean s of adding a capacity buffer to the overall region. Meaning, that although many of gas units are “base-load”, we can run them as intermediate units in a “low growth” economy and still make money. If the economy surges into “high growth”, we run them as full base-load units and make even more money.

g) The revamped Raccoon Mountain energy storage facility is recharged with cheap hydro-power as opposed to expensive renewable power. So we can offer customers “energy storage” services at a substantially lower price and battery assets charged with expensive renewable power.
h) We added enough wind to satisfy the demands of the few customers we have that are actually willing to pay the additional cost of renewable. So, if you’re in our region, you free to be as “green” as you like – as long as you pay the full cost. (Don’t get too excited wind guys… only about 15% of this wind capacity is actually available when needed).

The short version is this: Our mix of assets is already “low carbon”, so even if the “Clean Power Plan” had been implemented it wouldn’t have impacted us one bit. Furthermore our capacity mix is flexible enough that we won’t need any additional capacity for years. Meaning, in a flat to low-demand growth environment we wouldn’t need any addition capacity for roughly the next 15-20 years. And in a high-demand growth environment, we likely wouldn’t need additional capacity for roughly the next ten years.

Now this is what you renewable guys are facing. We are not going to finance the construction of any renewable assets in our region… because we simply don’t need the capacity. (OK maybe a few token “political” units here and there… but nothing substantial).

Your perfectly welcome to build as much renewable as you want in our region… so long as you pay for the capital cost out of your own pocket and pay extra for the power you need when your assets don’t generate. (Of course you do have the dilemma that the renewable subsidies are ending… so the “risk” is entirely on you.)

And, oh by the way, those customers that what to be green? Well… were happy to sell them the renewable power we purchased when it was cheap and subsided… and with our substantial low-coal energy storage capacity we can offer “green” power at a much lower cost than the “battery dependent” guys.

See Karl… We “fossil” guys are a bit smarter than you think. You don’t have ten years.

Tom

There are technologies that can burn coal cleaner. Reducing the Mercury and fly ash, among other particuletes .A well tuned boiler also allows it to run at it designed parameters. Its like a cars engine running properly. Fuel Tech.

And what was the EPA Clean Power Plan supposed to accomplish? A 32% reduction in CO2 output from US power generation (not just coal). The US is responsible for about 16% of the world’s CO2 output. Power generation represents about 31% of US CO2 production. Therefore – 16% * 31% * 32% = 1.6%. CPP will reduce the global CO2 output by 1.6%.

China and India will cancel that out with their next dozen coal fired power plants.

Screw up the entire power industry, increase the price of electricity and not remotely solve the imaginary climate change problem. Nothing but political posturing! Wasting resources on a pointless exercise is truly harmful to the environment.

BTW since the utilities have been retiring older inefficient coal fired generators with more efficient combined cycle designs power generation’s share of CO2 is now less than that of the transportation sector.

As Carl Sagan observed, we have been bamboozled, hustled, conned by those wishing to steal and waste our money and rob us of our liberties. Hardly a new agenda.

http://writerbeat.com/articles/14306-Greenhouse—We-don-t-need-no-stinkin-greenhouse-Warning-science-ahead-

http://writerbeat.com/articles/15582-To-be-33C-or-not-to-be-33C

Amber

And to think Hillary and her bag man Tommy wanted to shut coal down . Pretty easy to see who will be going down now . My oh my who sold out USA uranium to Russia for cash ? Who paid to have a fake Russia dossier whipped up ? Who bought the Democrat party and forgot to tell Bernie he didn’t stand a chance ?
Coal thrives is certainly good news at least .

Catcracking

David, another great article with real data to understand the post.
Thanks

Brett Keane

Hivemind
November 2, 2017 at 1:16 pm: I suspect your nom de guerre gives you away, but the griffbot is designed to be an insult to the truth. Zero sympathy is waranted. We would indeed be insulted if we had reason to take her seriously….

David

Meanwhile, here in the UK…..
We’ve got this massive power station – built on top of a coalmine – called Drax….
Are they running it on coal..? Nah…..
They’re trashing the forests of North Carolina…. Shredding the trees into wood pellets….. Shipping them all the way across the Atlantic….. Loading them onto trains at the port to bring them to the power station (hoping that they don’t self-combust on the way or in storage)…. and then burning them – because its more ECO-FRIENDLY…..
Not missing anything, am I..?

Griff

Drax still has 3 of 6 units working on coal – but will be changing that (as UK moves towards total coal plant shut down in 2025)

http://www.yorkpress.co.uk/news/15619209.Drax_consultation_starts_on_gas_power_and_battery_storage/

and yes, the woodchip thing is not reducing CO2 or environmentally sensible.
https://www.chathamhouse.org/expert/comment/wood-not-carbon-neutral-energy-source

The UK govt is showing signs of recognising this…

Meanwhile you could join a campaign against Drax – google ‘axedrax’

AndyG55

I hope Trump realises he NEEDS to stop the devastation of the USA’s forests.

Battery storage.. dangerous stuff !!! FAR more dangerous than coal power, which is actually HIGHLY BENEFICIAL in its by-products.

Sustaining ALL LIFE ON EARTH…

Yes, even yours, griff, for what its worth.. !!

Robert from oz

Lot of money being made by buying old coal fired power stations , buy them cheap , keep them ticking over and when people wake up to the renewable scam and the fact its weather dependant and unreliable KA CHING .

karl

What renewable scam?

You can buy contracts for solar produced electricity for $.03 kWh

“In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate electricity from sunshine for less than 3 cents a kilowatt-hour, half the average global cost of coal power. ”

https://www.bloomberg.com/news/articles/2017-01-03/for-cheapest-power-on-earth-look-skyward-as-coal-falls-to-solar

GREY LENSMAN

Turn your 1GW coal power station into a battery. I think that the Germans have already done it. An al”gore”rythm turns on the power output when the price is right.

karl

The death of coal is less than 150 years away.

From the Coal Industry’s own website:

“There are an estimated 1.1 trillion tonnes of proven coal reserves worldwide. This means that there is enough coal to last us around 150 years at current rates of production.”

https://www.worldcoal.org/coal/where-coal-found

At an annual consumption increase of 1% (from the current 7,500 Million Tonnes/yr) that 150 years drops to 90

At an annual consumption increase of 2% (from the current 7,500 Million Tonnes/yr) that 150 years drops to 70

At an annual consumption increase of 5% (from the current 7,500 Million Tonnes/yr) that 150 years drops to 40

Coal should be used as the starting point for carbon nanotubes and graphene production — not electricity/heat generation and the production of useless toxic slag

AndyG55

Peak coal.. just keeps getting further and further away. 🙂

The world will ALWAYS need CO2 !!

And thankfully, this CO2-HATRED madness cannot last forever.

Sooner or later REALITY will triumph.

Dave Kelly

Shrug… in the U.S. we have a 500 year supply of coal.

DavidMid: this is a disturbing post. are
you really so wrapped up in the agw/Nagw
issue that you don’t see that coal emissions
are very hazardous to people — not to say
that mining it is
even
more so
to coal miners?

coal emits aerosols
and mercury. this kills
about 10^4 people in the
US a year, and poisons
baby’s brains.

coal polluting in CHN is
reducing lifespans by up to
10 years.

it is very dismaying that y0u
would ignore all this for the
sake of an ideological
argument.

AndyG55

Yet another incoherent mindless rant from crackpot.

You really are HIGH on something today, aren’t you !

catweazle666

“coal emits aerosols
and mercury. this kills
about 10^4 people in the
US a year, and poisons
baby’s brains.”

Ah, that’s your excuse, is it?

When you were a baby your brain was poisoned by mercury emissions from coal…

Yep, that figures…