From The Economist:
Tighter regulation, bountiful natural gas and declining installation costs for renewable energy herald the end of America’s coal eraHT: Abnormal Returns
A FREIGHT train, its dozen cars loaded with coal covered in a light dusting of snow, snaked through the narrow valley, sometimes following the two-lane highway and sometimes crossing it. The valley was silent and snowy, and though it was two days into 2012 it could easily have been 1982, 1942 or 1922: coal has been mined in Appalachia and carried out by rail for well over a century.
And by some measures, coal is still going strong. It provides more of America’s electricity than any other fuel. Production has fallen off since 2008, but it remains high, as do prices, for which thank the developing world’s appetite. In Appalachia, coal remains a source of well-paid jobs in a region that needs them: for the first three quarters of 2011 employment in the Appalachian coal industry was at its highest level since 1997. And the Powder River Basin, which spans Wyoming and Montana, has become America’s major source of coal in the past decade, relieving overmined Kentucky and West Virginia. The Energy Information Administration (EIA) reckons America has enough coal to meet current demand levels for the next 200 years.
But if the raw numbers look good, the trends tell a different story. Regulatory uncertainty and the emergence of alternative fuel sources (natural gas and renewables) will probably make America’s future far less coal-reliant than its past. In 2000 America got 52% of its electricity from coal; in 2010 that number was 45%. Robust as exports are, they account for less than one-tenth of American mined coal; exports cannot pick up the slack if America’s taste for coal declines. Appalachian coal production peaked in the early 1990s; the EIA forecasts a decline for the next three years, followed by two decades of low-level stability. Increased employment and declining productivity suggest that Appalachian coal is getting harder to find....MORE
And from CBS News:
Coal miner Peabody Energy Corp. said Tuesday that fourth-quarter earnings increased 6 percent as demand from China and other developing nations helped the company sell more coal at higher prices.The second half of the headline is from a source I can't share.
Even though its financial results were up, they missed analyst expectations by a wide margin and shares fell nearly 4 percent in heavy trading.
Peabody, one of the world's biggest coal companies, said the coal industry is increasingly focused on supplying Asia's growing economies. U.S. coal producers increased exports 29 percent in 2011, more than making up for a drop in American consumption, Peabody said.
As U.S. utilities burned 5 percent less coal in 2011, China's power plants increased consumption 14 percent while India's power plants burned 9 percent more, Peabody said.
Those trends will continue this year. Peabody estimates that 90 gigawatts of coal-fired power plants will come online this year, and that will increase international demand by another 300 million tons....MORE
