Factors Governing Coal Consumption in the U.S.
From today’s Energy News:
Despite some evidence of a reviving coal market, it is a sector too tough to read:
* On one hand, the US Forest Service will likely allow expansion of Arch Coal Inc.’s West Elk mine, a 19,500-acre area known as the North Fork Coal Mining Area, in Colorado.
* On the other hand, total US coal rail traffic declined 3.2% year-over-year to 92,184 carloads, and year-to-date coal rail traffic has fallen 22.9%, a continued downtrend and the largest annual decline since record keeping began in 1949.
What’s the cause for confusion? The U.S. government, especially under the Trump Administration, is rolling back all environmental regulations if there is the remotest possibility that they might stand in the way of corporate profits. Yet at the same time, natural gas is offsetting coal, and other factors are joining in to conspire against coal consumption, i.e., wind, solar, and efficiency solutions. No reason for any head-scratching here.
In fact, all we’re really talking about is the theme of Bullish on Renewable Energy, i.e., that the forces of pure economics are in the process of making coal (and, eventually, oil and natural gas) obsolete.
That’s a no-brainer. But what requires analysis is this: will this happen in time to prevent the destruction of our environment?
In fact, analysis won’t suffice. Nobody knows.
Craig you Pose the Ultimate Question – can the Titanic Course be turned in Time ???
Tweet the trumpster that TVA announced last week they closing 29 of 52 coal plants they own within next 5 years or by 2025. TVA has NO coal in their latest 10 to 20 year IRP going forward.
DTE Detroit and Consumers Power in Mich ( who voted for him or it looks like they did ?) well they put 9 more coal plants on the execution block.
Ditto for Colstrip in Montana and Hayden Colorado and Four corners, San Juan, NM; and Intermountain in Utah as all cutting off 50 % of their boilers/ generators.
Tweet him the Reality Coal report. Perhaps he would appreciate it and change topics in his tweets! He w Sell Coal Junk bonds to his foolish clan of followers ! Leverage Feverish dreams of getting Rich amongst the foolish masses! Perhaps not !
This is what a disruption looks like… And truly big disruption, that of oil, is next.
We did’t need to stop using coal altogether, and we won’t need to stop using oil altogether for these huge industries to collapse financially. The collapse will happen just as soon as investors get wind of the eventual extinction of coal and oil. We still burn a lot of coal, but every major US coal company has been bankrupted within the last two years.
It is already clear that coal is on the path to extinction. Wind solar and natural gas are cheaper, and wind and solar are going to just keep getting cheaper and cheaper going forward.
With just about every major carmaker saying they will have electric cars in showrooms by 2020, and several European countries voting to ban ICE car sales altogether by 2030, or in some cases as soon as 2025, the writing is on the wall for oil, too. It won’t take much greater inroads by electric vehicles before investors start to write-off oil like they have already done with coal.
And, when oil starts to go, hang on to your hat. The employment and economic displacements we are seeing with coal are nothing compared to what will happen when oil goes down.
The Trump administration would do well to concente on what new industries can provide jobs for coal miners rather than finding more ways to burn coal. Similarly, they should start thinking about what soon to be displaced oil and oil related workers will do in a cleaner, greener future.
Craig,
As you point out, the US coal industry has been affected by a number of factors only some of which are political or environmental.
Most of the woes for coal are the sudden development of a huge new competitor in the form of US natural gas. Other factors such as environmental restrictions and the rising cost of mining coal in ever more difficult locations also have a negative impact on the industry.
The industrial uses for coal are limited to power generation, or direct blast furnaces. Coal is difficult to mine, transport and convert to energy. In comparison, NG is so much more versatile and can be “mixed’ with alternate energy with greater compatibility.
The concept of ” clean coal” consumption is a bit of misnomer, at best ‘cleaner’ coal use can be achieved, but at considerable economic expense rendering the resource even less competitive.
(another case of trying to make a square peg fit a round hole).
Coal production and use will remain in global areas where NG and other factors have less economic impact and Coal provides the only economically viable resource for large scale industrial power generation.
@ Randy I love the concept of Disruption – you are pointing out the coming Icebergs
Good points on Europe and other countries limiting IC Engines in the future so OIL may get hit with more demand destruction at the same time its production cost curve is rising ….that does not bode well.
But all this will take time. But Disruption is in the future
US Utilities have around 50,000 more megawatts of coal plants scheduled to shut down by 2025 . China may start buying more Metallurgical coal form US so a blip upward in sales may be seen but the Hey day is over beyond Twilight
As Marco says there just are not many uses for coal other than steel making and power production. Power Production with Coal is not growing and Clean Coal is not really totally clean and is high cost actually not competitive at all.
Trumper should not expend political capital on Coal there are more Important fish to try and Fry !
.
Silent,
Coal does have a certain resilience, especially in heavily industrialized nations with limited land area and typhoons.
http://phys.org/news/2016-11-sun-japan-solar-energy-boom.html
@ Marco yes thanks for the active link this one worked.
so Japan is going into a different phase.
For all these years going back 35 years us Americans were told that the Japan Model was so great and they would over take everyone ( now its the China bandwagon people hype up) with their Technical Know How and can do spirit etc.
If falling back on Coal is the best the Japs can do – especially with even China Man and India slowing down on Coal and switching to cleaner options Japan must be throwing in the towel….
they lost their creative edge.
I can see them re starting some of their Nukes not all of them are in bad shape or at Risk.
But falling back on Coal 40 plants what a major Fall backwards Shame on them. Yes land is at premium , limits large solar fields probably and maybe off shore wind is too risky with the Typhoons Marco mentioned? Perhaps.
But why are they not exploring SMR s ???
What does the Public think of their Governments new policies is it politically doable?
I always thought that Northern Japan had some good geo thermal resource – perhaps not?
The Rising Sun is a Myth! thank you Marco Japan looks weak to me.