Coal Is King -- July 21, 2022

This is really quite amazing. 

I have a reader who has been predicting this ever since I started blogging: that eventually coal would "come back" despite the "green movement." 

I never knew the reader's timeline but I think we both thought in terms twenty years or so (remember: the blog is over twelve years old; fourteen years old if one goes back to the first post in 2007 -- I deleted the blog from 2007 to 2009 in a moment of insanity -- I changed the direction of the blog in 2009 and felt everything before was unnecessary). 

A digression, I apologize. I was saying.

I never knew the reader's timeline but I think we both thought in terms twenty years or so before coal made a comeback. I know I never, in a million years, expected coal to surge this soon. I was thinking maybe 2040 or thereabouts.

There are multiple reasons but I don't have time for that now.

But here's the headline, from John Kemp's column over at Reuters: global 2021 coal-fired electricity generation surges to record high. Link here. 

Global coal-fired electricity generators are producing more power than ever before in response to booming electricity demand and the surging price of gas.

The world’s coal-fired generators produced a record 10,244 terawatt-hours (TWh) in 2021 surpassing the previous record of 10,098 TWh set in 2018.

Coal-fuelled generation is on course to set an even higher record in 2022 as generators in Europe and Asia minimise the use of expensive gas following Russia’s invasion of Ukraine and U.S. and EU sanctions imposed in response.

By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have been replaced by newer and more efficient ones needing less fuel per kilowatt.

Global coal mine production was 8,173 million tonnes in 2021 compared with 8,180-8,256 million a year between 2012 and 2014.

But mine production is also likely to set a new record this year as the surging demand for coal-fuelled generation overtakes efficiency improvements.

So much more at the linked article. 

Favorite tag: Obama kills US coal industry. 

I do not believe Greta Thunberg contributed to this article.

Why I Love To Blog -- Reason #2 -- April 2, 2017

Updates

June 11, 2017: on a completely different note, but part of the "war on coal" story, and for the archives, the DrudgeReport banner today: coal mine opens in Pennsylvania. The story:

President Trump lauded the opening of the nation's first new coal mine in recent memory. Corsa Coal Company will operate the mine in Somerset County, Pa. - outside of Pittsburgh.

Corsa CEO George Dethlefsen ... praised Trump's easing of regulations and encouragement for fossil fuel exploration. Dethlefsen told Leland Vittert that for the 70 positions available in the mine, 400 people applied.

"It's a hard day's work every day, but it's worth it," one miner said. Vittert said the news contrasts with Hillary Clinton's message that she would "put a lot of coal miners out of work."

Pennsylvania Gov. Tom Wolf (D), who endorsed Clinton, joined the mine company in watching a video message from Trump commemorating the occasion.

Later, 7:58 p.m. Central Time: when it rains, it pours. A reader asked earlier about Trump, coal, natural gas. My longer reply is in the original post. Now, I see an article in PennEnergy:

Part of a coal-fired power plant in northwestern New Mexico is still scheduled for retirement despite President Donald Trump's executive order Tuesday to roll back measures aimed at tackling global warming.

And the state's largest electric provider has no plans to shift gears when it comes to promoting cleaner energy, a spokesman said.

The president argued his order would revive the coal industry and create a level playing field for workers.

"It will take time to see how the president's actions may or may not impact our business going forward," said Pahl Shipley, a spokesman for Public Service Co. of New Mexico. Pressure to limit regional haze-causing pollution and other emissions from coal-fired power plants resulted in an agreement between the utility and federal and state regulators to close two units at the utility's San Juan Generating Station by the end of 2017.

Trump made good on a campaign promise to unravel the previous administration's efforts to restrict coal use. Several of the mandates could be suspended, rescinded or flagged for review to boost domestic energy production in the form of fossil fuels.

Wow. Wow. Wow.

Original Post 

Earlier a reader asked if Trump was doing such a good job taking on Obama's "war on coal," why are so many natural gas power plants being built?

I love it when someone at the The New York Times reads my blog, or someone reads The New York Times and finds a better answer than the one I gave. I don't know if folks have noticed but it seems that for Trump if he can save one American job that's worthy of saving hundreds of thousands of American jobs. Just like a 1,000-mile journey begins with the first step.

And here we have a great example. No, no matter what President Trump does, he isn't going to turn back the tectonic tide  -- or should we say, tsunami -- set in motion by the Bakken revolution. No one is going to put natural gas back in genie's bottle and open the almost-limitless coal resources that the US has.

But if President Trump can save one American job by taking on Obama's "war on coal" he will consider that a job well done.

In this case, President Trump may have just save the livelihood of a number -- a great number -- of Native Americans. The story at The New York Times. Archived.

From the article:

“We don’t know Donald Trump,” said Henry Old Horn, 74, a Crow elder. “All we know is that he’s a good, successful businessman. And we also know that he’s not your typical politician. It’s like rolling the dice. Who knows, he may be our savior.”

Maybe.

I may come back to this one. It's important, as Peggy Noonan would say.

Later: Trump saves 600 jobs and the alt-left blows it off, suggesting 600 jobs is trivial. Tell that to the 600 folks/families who have jobs.  I get a kick out of this: from my perspective, President Trump seems to be the first president truly to be more concerned about folks that couldn't be more different than he is. Abraham Lincoln comes to mind, but Lincoln was coming from an easier valley.

Active Rigs Down To 140 -- February 4, 2015

Active rigs in North Dakota:

	2/4/2015	02/04/2014	02/04/2013	02/04/2012	02/04/2011
Active Rigs	140	190	184	202	165

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Odds And Ends, But Mostly "Ends"

Bookstore ends: Borderlands done in by minimum wage and ObamaCare.

Clean Coal Project ends: Obama administration shuts down "Clean Coal" demonstration project in Illinois. Many, many story lines: nuclear industry against this project; nuclear industry in financial trouble in some areas; enviro-nazis against any kind of coal energy; loss of jobs in a state that could use some jobs.

By decade's end: US government interest payments will exceed defense spending and non-defense spending.

US crude oil pace of production could end this year. FuelFix is reporting.

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How's That OXY Spin-Off Doing?

InsiderMonkey is reporting:

The spin-off of the subsidiary was completed on November 30, and California Resources Corp (CRC) began trading publicly on the NYSE on December 1 at $7.37, which was well below estimates of where the stock would open. Issued shares to Occidental shareholders began trading off-market in the middle of November at $8.45, which was 15% below the $10.00 range expected. However, slumping crude oil prices conspired to greatly limit the value of the new company from earlier estimates, and it would continue to drop over the following two months, to as low as $3.93 in late January.

See disclaimer. 

Today, CRC's EPS: a loss of 75 cents/share per Yahoo!Finance. CRC will report earnings on February 19, 2015.

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A Note for the Granddaughters

One of the more interesting initiatives that primary educators have instituted over the years has been an interdisciplinary approach in education starting in elementary grades. For example, arithmetic teachers were to use word problems to help students with reading comprehension, not simply arithmetic. Science teachers, likewise, were to assign more essays instead of multiple-guess questions in their assessments. I was mentioning to this to our younger granddaughter and she said her school does that. When the science teacher assigns them an essay, the science teacher checks the paper for scientific accuracy and then gives the essays to the language arts teacher who evaluates the essay on grammar, punctuation, spelling writing, etc.

We did the same thing when I was substituting as a teacher for a middle school in San Antonio, Texas, a few years ago. But I always wondered how physical education instructors would fit in.

Yesterday, our younger granddaughter told me a most interesting story. Yesterday, in physical education, the gym instructors (probably with assistance from the science teachers) set up an obstacle course in the gymnasium. The obstacle course was in the "shape" of a heart, with long tunnels for the aorta, arteries coming from the aorta, and the pulmonary arteries. When going through the lungs, the students were jerry-rigged into some kind of scooter - pulley system and pulled along, grabbing oxygen models along the way. 

She asked me about the aortic valve and about the arteries that went to the brain. This was all in her gym class yesterday.

This morning when I picked up the two granddaughters to take to school, she was on the computer looking at a model of a heart, and pointing out where I was wrong and that she was right all along. LOL.

She also knew that when looking at diagrams of the human body, they are usually reversed. The heart, for example, is pictured on the right -- in the diagram -- though, of course, it's on the left side of our body. This was in third grade that she's learning all this. And she's learning biology and the circulation of blood in physical education. I'm quite impressed.

I can't wait to hear what she says the boys do when they pretend to be going through the digestive tract next. LOL.

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The Fifties

Lost In The Fifties Tonight (In The Still Of The Night), Ronnie Milsap

Catching Up On The News From Earlier Today -- Maybe Killing The Coal Industry Wasn't All That Clever

Earlier today, the news was coming fast and furious, and I didn't have time to expand. The second bit of news had to do with the interesting Motley Fool article Don sent me.

I normally don't care for Motley Fool but once in awhile they have a good article. Their article on coal today was particularly good.

Arch Coal CEO John Eaves recently noted that Powder River Basin coal stockpiles were so low that, "Some of our customers have raised concerns about potential stockpile shortages..." That's because of weather driven demand, but, "Even more intriguing is what is happening in the natural gas market."

It's worth paying attention when Arch Coal's CEO finds something about the gas market interesting because natural gas is the primary competitor to coal in the utility space. Eaves notes that, "So far this winter, 1600 BCF has been drawn from natural gas storage. This represents a withdrawal rate 45% above the five-year average..." and, "...we share our customers concerns about the potential lack of grid reliability and fuel diversity..."

Utilities throughout the country have been building up their natural gas fleets.

Industry giant Duke Energy, for example, is working to increase its reliance on natural gas to nearly a quarter of its fuel mix by next year. That's up from a paltry 5% in 2005. Natural gas use at Southern Company has been increasing, too, with CEO Thomas Fanning noting that his company is the, "...second or third largest gas consumer in the United States."

This pair of giants isn't alone, but Gregory Boyce, CEO of Peabody Energy, echoed Arch Coal's concerns during his company's full-year 2013 conference call, "...it's our view that we're going to see some serious review of previous decisions as to the exact time frame when some of these [coal] plants are going to be retired..." That's because, "...we're seeing more and more evidence that people are concerned about the ability to supply power particularly in swing periods, whether it be the summer or the winter."

Maybe that plan to kill the US coal industry was not all that clever.  Sort of reminds me of Harvard's "best and brightest" that dragged us into the Vietnam conflict.

War On Coal -- Great Britain

Looking for love in all the wrong places.

When I think "coal exports," I think Asia. See earlier post.

But this is very, very fascinating. Read the wiki entry for Energy in the United Kingdom.

Based on earlier MDW stories, I knew that the UK is in an energy crunch. It's a huge story; the UK has got to be very, very concerned. Worse, by law, they are committed to worsening their own situation. My hunch is that Great Britain will dial back on some of their goals, but even so, the UK is an interesting case study to consider.

Right or wrong, this is my worldview: Great Britain is already in a huge energy crunch. It is banking on new off-shore shale fields, but it will take a bit of time to get them developed -- let's say two to three years, about the time the Panama Canal widening project will be complete (if I remember, I will connect those dots later).

Oil is not used for generating electricity, and alternate sources are grossly inadequate to make a dent in the British energy crunch. Nuclear power? LOL.

Okay. So, the first question: after the Iron Lady killed the coal industry in Great Britain, does that country even use coal any more? According to the linked wiki article above, yes. To the tune of about one-third of British energy needs.

A third is not trivial; I don't see further eroding of coal use in the British Isles in their current energy crunch.

How bad is the energy crunch?

Energy in the United Kingdom
	Capita	Prim. energy	Production	Import	Electricity	CO2-emission
	million	TWh	TWh	TWh	TWh	Mt
2004	59.8	2,718	2,619	135	371	537
2007	60.8	2,458	2,050	522	373	523
2008	61.4	2,424	1,939	672	372	511
2009	61.8	2,288	1,848	641	352	466
2010	62.2	2,355	1,730	705	357	484
Change 2004-10	3.9%	-13.3 %	-33.9 %	420%	-3.9  %	-10.0  %

Assuming I am reading the table correctly, look at the third and fourth columns.

• In 2004, Great Britain imported 135 "units" of their energy.
• In 2010, Great Britain imported 705 "units" of their energy.

• In 2004, Great Britain produced 2,620 "units" in-country.
• In 2010, Great Britain produced 1,730 "units" in-country.

Astounding.

And then look at how well conservation of energy is working in that country where natural gas is much more expensive than it is in the United States, and gasoline is two to three times more costly. One would think that the Brits would improve conservation of energy. But just the opposite (again, assuming I am reading the table correctly).

• In 2004, per capita usage: 60 units
• In 2010, per capita usage: 62 units

The increase is inconsequential except for the fact a) the push for conservation has been huge; and, b) the Brits are in a huge energy crunch.

Another graph from wiki: 


 
Again, oil is not used (hopefully) to generate electricity. Natural gas use dropped off a cliff in 2011, dropping back to levels not seen since 1995. One can argue that the drop in oil use is due more to the "recession" than availability. I'm not going to look for the links now, but it was widely reported that Great Britain came without hours (repeat: hours) of running out of natural gas this past winter.

Oh, connecting those dots. The UK is banking on off-shore shale deposits of natural gas but it will take a couple of years to get those fields under development. In a couple of years, the Panama Canal widening project will be completed. The connecting dot? Coal exporters can ship coal to Great Britain while anticipating the use of larger coal ships once the canal project is completed, in 2015, to ship coal to Asia. Asia and Europe should snap up American coal at fire-sale prices with the war on coal here in the US. If the Germans are clear-cutting forests in North Carolina for the wood to produce electricity, one would think they would be thrilled to get cheap coal.

By the way, if per capita energy use is going up, but overall energy is going down, it is interesting to look at the population numbers for Great Britain. There is a great interactive graph at wiki (again).

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A Note To The Granddaughters

In an earlier post, I mentioned how excited I was to be reading The Log of The Sea of Cortez by John Steinbeck. More than once, he has talked about Sally Lightfoots. Finally, curiosity got the better of me, so I went to wiki to find out more about these creatures.

Incredible.

Wiki actually quotes at length from Steinbeck's log of the Sea of Cortez. 

Many people have spoken at length of the Sally Lightfoots. In fact, everyone who has seen them has been delighted with them. The very name they are called by reflects the delight of the name. These little crabs, with brilliant cloisonné carapaces, walk on their tiptoes, They have remarkable eyes and an extremely fast reaction time. In spite of the fact that they swarm on the rocks at the Cape [San Lucas], and to a less degree inside the Gulf [of California], they are exceedingly hard to catch. They seem to be able to run in any of four directions; but more than this, perhaps because of their rapid reaction time, they appear to read the mind of their hunter. They escape the long-handled net, anticipating from what direction it is coming. If you walk slowly, they move slowly ahead of you in droves. If you hurry, they hurry. When you plunge at them, they seem to disappear in a puff of blue smoke—at any rate, they disappear. It is impossible to creep up on them. They are very beautiful, with clear brilliant colors, red and blues and warm browns.

And much more.  

War On Coal

Updates

Later, 6:15 pm: shortly after posting the notes below, Don sent me a link to a story that validates what is written below. It's not a war on coal in this country, it's a war on coal-using power plants. The US coal industry, railroads, and ports will simply ship US coal at fire-sale prices to the rest of the world.  

Original Post

This is a fascinating piece of work. 

Motley Fool is reporting:

What's interesting is that with the push-back from several West Coast locales to not allow coal export facilities to be built, it's really consolidating the coal market around a few select cities. In fact, five customs districts accounted for 90% of March U.S. coal exports (coal exports in tons/year):

• Norfolk, VA (6.1)
• New Orleans (2.2)
• Baltimore (2.1)
• Mobile, AL (1.4)
• Houston-Galveston, TX (0.5)

Norfolk:

The Norfolk area is home to coal-terminal operator Dominion Terminal Associates, among others. The facility is jointly owned by Peabody Energy, Arch Coal, and Alpha Natural Resources, which use it to ship coal around the world. It's a state-of-the-art facility that features many environmental safeguards to keep the 1.7 million net tons of coal storage capacity from causing any environmental damage. 

Overall, coal exports provide significant economic benefits to Norfolk as well as the state of Virginia as a whole. It's estimated that coal exports contributed to more than 19,000 jobs to the state and added $2.5 billion in related economic value.

Read about the rest at the link.

Will the fact that the west coast is shutting down coal exports affect the US coal export business? Hardly.

From wiki:

The Panama Canal expansion project (also called the Third Set of Locks Project) will double the capacity of the Panama Canal by 2015 by creating a new lane of traffic and allowing more and larger ships to transit.
The project will:

• Build two new locks, one each on the Atlantic and Pacific sides. Each will have three chambers with water-saving basins.
• Excavate new channels to the new locks.
• Widen and deepen existing channels.
• Raise Gatun Lake's maximum operating level.

 NPR also reports:

When the project to widen the canal is completed in 2015, longer and wider ships will be able to pass through its locks, giving them access to ports on the Gulf of Mexico and the East Coast. But at the moment, the Port of Baltimore is one of only two on the East Coast (the other is the Port of Virginia in Norfolk) that can handle the large cargo ships, known as post-Panamax ships. It recently completed a major expansion, which included building a 50-foot berth and dredging the channel.

Mark Montgomery, the president of Ports America Chesapeake, says much rides on the canal's expansion.

"It will allow a ship that is three times as big to come through the canal once the widening project is finished," he says. "It's a significant change in maritime economics."

Bigger ships mean more cargo containers, which can translate into an economic windfall for a port, says Adie Tomer, a transportation and infrastructure specialist at the Brookings Institution.

Even the NY Times seems to be excited to see all that American coal being shipped to countries where there will be less concern for all the "clean coal" technology:

The $5.25 billion project, scheduled for completion in 2014, is the first expansion in the history of the century-old shortcut between the Atlantic and Pacific. By allowing much bigger container ships and other cargo vessels to easily reach the Eastern United States, it will alter patterns of trade and put pressure on East and Gulf Coast ports like Savannah, Ga., and New Orleans to deepen harbors and expand cargo-handling facilities.

Right now, with its two lanes of locks that can handle ships up to 965 feet long and 106 feet wide — a size known as Panamax — the canal operates at or near its capacity of about 35 ships a day. During much of the year, that can mean dozens of ships are moored off each coast, waiting a day or longer to enter the canal.

The new third set of locks will help eliminate some of those backlogs, by adding perhaps 15 passages to the daily total. More important, the locks will be able to handle “New Panamax” ships — 25 percent longer, 50 percent wider and, with a deeper draft as well, able to carry two or three times the cargo.

No one can predict the full impact of the expansion. But for starters, it should mean faster and cheaper shipping of some goods between the United States and Asia.

With the US declaring "war on coal" our trading partners will be able to snap up coal at fire-sale prices.

For investors only: I don't invest in coal, and don't plan to, but there might be some opportunities here. One may want to look at Arch, Peabody, Alpha Natural Resources, and ask the question whether they may be oversold. Two of the companies pay a dividend.

The other big winners, possibly, will be the eastern US railroads. As the west coast shuts down coal exports, exporters will move coal to the east coast. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you might have read here.

Illinois Coal-Fired Utility Learns the Junior Senator Was Speaking the Truth

Updates

August 8, 2012: Black Hills Power to close more coal-powered plants.

Black Hills Corp. said Monday that its utilities will close some older coal-fired power plants because it would cost too much to bring them in compliance with new federal and state environmental regulations.

The company said its Colorado Electric subsidiary will idle a plant in Canon City, Colo., at the end of this year but keep it available for power-generation during peak demand until retiring the plant at the end of 2013.

Colorado Electric will also suspend operations at the end of 2012 for two units of a natural-gas-fired plant in Pueblo, Colo.

The Black Hills Power subsidiary will suspend operations Aug. 31 at a coal-fired unit in Rapid City, S.D., and retire the plant in March 2014. It also plans to retire plants near Gillette and Osage, Wyo., in March 2014.

Original Post 

This is truly incredible: Illinois coal-fired utility considering filing for bankruptcy:

Midwest Generation, which operates six coal-fired electric generating plants in Illinois, may be forced to seek bankruptcy protection along with its parent company, Edison Mission Energy, executives said Tuesday.

Three months ago, Midwest Generation executives announced they would shutter the outmoded Fisk and Crawford coal plants in Chicago in September. Midwest Generation also owns and operates the Powerton (Pekin), Joliet, Waukegan and Will County (Romeoville) power generation plants, which together with the Chicago plants provide electricity to nearly 5 million homes.

About 1,000 jobs. 

Note to the Granddaughters

On a more pleasant note, we all went "downtown" to Los Angeles to visit Chinatown, Olvera Street, and Little Tokyo.

Best kept secret: for $5.00, one can part all day in Metro Plaza Hotel at 711 North Main Street. All three locations are within easy walking distance, and lots of historical "stuff" to see along the way. Chinatown is about a ten-minute walk; Olvera Street is across the street from the parking garage; and Little Tokyo is 24 minutes.

It is not a grueling walk. The younger granddaughter, who turned 6 in July, walked all day, and walked the entire distance from Chinatown to Little Tokyo.

The Demise of the US Coal Industry

Updates

December 13, 2012: hundreds attend hearings in Vancouver, WA, regarding new terminals to ship coal to Asia. Economic suicide groups. 

June 25, 2012: the perfect storm. The administration vowed to kill the coal industry; the faux environmentalists put the regulations in place years ago; and, now, natural gas is so inexpensive, it looks like the administration has accomplished its mission. And with the demise of the coal industry, the end of a lot of pollution abatement. We're talking billions of dollars.

An indication of how much new emissions rules and cheaper natural gas have hammered the value of coal-burning generation will come when Exelon announces the results of the first big sale of U.S. coal-fired power plants in four years.

Exelon, the largest U.S. power company, may have to take a 40 percent discount for three Maryland plants it’s seeking to sell by the end of August. Bidders including NRG Energy Inc. have offered $600 million to $700 million for the units, which have a fair value of $1 billion, ...

Original Post

At Yahoo!InPlay:

9:00AM Alpha Natural Resources to reduce coal production from Kentucky Mines: Co plans to curtail coal mining operations in its northern and southern Kentucky business units as continued market pressures and new regulations on coal-fired power plants make production from certain mines in those areas uneconomic. Alpha's Kentucky affiliates will discontinue mining at four mines and idle two coal preparation plants in Pike and Martin counties. Production will be scaled back at several other mines, and four contract mines will close. In aggregate the production cuts will reduce Alpha's shipments of thermal coal by an additional two million tons this year and four million tons in 2013.