Post by jeffolie on Apr 30, 2012 14:05:29 GMT -6
Nat gas dooms coal/nuke energy
Not only has nat gas tamed inflation, nat has has tamed pollution and all but eliminated the motivation for building nuke energy in Japan, Germany, other countries including America.
Nat gas and crude oil from hydraulic drilling also known as fracking, will soon reach over supply in America. The existing storage for nat gas in America almost is completely full.
The outlet for the oversupply would normally be to export. However, exporting requires specific equipment and nat gas port terminals that would take years to build if they got approvals. One future nat gas port facility is approved but that is nothing.
More supply will come in future fracking in other countries to add additional supplies to the glut. The low prices seem likely to remain for a significant period.
Demand for manufacturing and electrical generation switching to nat gas takes years not months. Demand most likely according to my predictions will decline when the recession in Europe spreads to the US and lastly China. When the worlds economy grows at a faster rate, then nat gas's oversupply eventually will switch to shortage and higher prices.
===================================
Is Coal Doomed?
By Jordan Weissmann
America's using less and less, and exports might not be able to save the industry.
Reuters
Slowly but surely, America is winding down its centuries-old love affair with coal. It's been a fine long-term relationship. But thanks to the deluge of cheap natural gas pouring from domestic shale deposits, the United States is burning less and less of the dirty black stuff to generate power.
The trend has become so dramatic that Bloomberg Businessweek is now asking a question that would have been unthinkable just a few years ago: "Is coal doomed?"
It's tough to say. While American demand seems to be entering a permanent state of decline, the world hunger for coal is growing strong. Will that be enough to save the industry stateside? We can only speculate, but here are a few keys to understanding the issue.
First, nobody expects the United States to wean itself off of coal entirely. Deutsch Bank has forecast that it could be producing as little as 20 percent of our power by 2030. Exxon sees natural gas replacing it as the top source of U.S. electricity by 2025. But demand could fall far enough that companies won't be able to make much of a profit mining it. The intense pressure from natural gas has already helped drag prices of western coal down by 45 percent, as Businessweek illustrates in this chart.
With things looking so dire in America, the industry is banking on export growth to save its bottom line. So far, it hasn't.
In 2011, the United States consumed 124 million short tons less coal than it did in 2007, as shown in the graph below from the U.S. Energy Information Administration. During that same time period, exports have grown by 48 million short tons -- a substantial, 44 percent leap, but not enough to offset declining domestic consumption. Of course, the recession played a significant role is dampening U.S. and global demand. But even if we just look at the last year, the picture isn't pretty. We burned 48 million short tons less stateside, and only sent 25 million tons more abroad.
Worse yet, much of that export growth came thanks to Europe, which bought 15.7 million short tons more American coal in 2011 than in 2010. It's safe to say that Europe isn't a dependable export partner at the moment.
Thus, America's big coal companies are looking east. Already, China uses three times as much coal as the United States, and in 2009 it moved from being a net exporter to an importer. India is third in global coal consumption, burning more than 700 million short tons a year, but its domestic mining industry is hamstrung by absurd inefficiencies. (Anybody interested in what job killing regulations actually look like should check out this New York Times piece.) As Businessweek notes, new power generation in the two countries could add as much as 300 million short tons of global coal demand this year.
But just because demand will be there, that doesn't mean U.S. miners will fill it. Traditionally, the U.S. is a fairly minor player in both markets. Last year, we sent just 5.8 million short tons to China, a 3.6 percent annual decrease, and 4.5 million to India, a 65 percent increase. In China's case, most North American shipments aren't for energy generation. Rather, they're used in steel production. This is partly a quirk of the way China's ports and rail systems are set up, which favor Indonesia as a provider of coal for electricity. To get a sense of just how small a role American coal has in China's market, take a look at this chart from the Carnegie Endowment for International Peace.
If the U.S. transition to natural gas slows down, or stops, this could all be a moot point. But if the U.S. coal industry has to stake its future on breakneck growth in Asia, it may indeed be doomed.
This article available online at:
www.theatlantic.com/business/archive/2012/04/is-coal-doomed/256455/
Not only has nat gas tamed inflation, nat has has tamed pollution and all but eliminated the motivation for building nuke energy in Japan, Germany, other countries including America.
Nat gas and crude oil from hydraulic drilling also known as fracking, will soon reach over supply in America. The existing storage for nat gas in America almost is completely full.
The outlet for the oversupply would normally be to export. However, exporting requires specific equipment and nat gas port terminals that would take years to build if they got approvals. One future nat gas port facility is approved but that is nothing.
More supply will come in future fracking in other countries to add additional supplies to the glut. The low prices seem likely to remain for a significant period.
Demand for manufacturing and electrical generation switching to nat gas takes years not months. Demand most likely according to my predictions will decline when the recession in Europe spreads to the US and lastly China. When the worlds economy grows at a faster rate, then nat gas's oversupply eventually will switch to shortage and higher prices.
===================================
Is Coal Doomed?
By Jordan Weissmann
America's using less and less, and exports might not be able to save the industry.
Reuters
Slowly but surely, America is winding down its centuries-old love affair with coal. It's been a fine long-term relationship. But thanks to the deluge of cheap natural gas pouring from domestic shale deposits, the United States is burning less and less of the dirty black stuff to generate power.
The trend has become so dramatic that Bloomberg Businessweek is now asking a question that would have been unthinkable just a few years ago: "Is coal doomed?"
It's tough to say. While American demand seems to be entering a permanent state of decline, the world hunger for coal is growing strong. Will that be enough to save the industry stateside? We can only speculate, but here are a few keys to understanding the issue.
First, nobody expects the United States to wean itself off of coal entirely. Deutsch Bank has forecast that it could be producing as little as 20 percent of our power by 2030. Exxon sees natural gas replacing it as the top source of U.S. electricity by 2025. But demand could fall far enough that companies won't be able to make much of a profit mining it. The intense pressure from natural gas has already helped drag prices of western coal down by 45 percent, as Businessweek illustrates in this chart.
With things looking so dire in America, the industry is banking on export growth to save its bottom line. So far, it hasn't.
In 2011, the United States consumed 124 million short tons less coal than it did in 2007, as shown in the graph below from the U.S. Energy Information Administration. During that same time period, exports have grown by 48 million short tons -- a substantial, 44 percent leap, but not enough to offset declining domestic consumption. Of course, the recession played a significant role is dampening U.S. and global demand. But even if we just look at the last year, the picture isn't pretty. We burned 48 million short tons less stateside, and only sent 25 million tons more abroad.
Worse yet, much of that export growth came thanks to Europe, which bought 15.7 million short tons more American coal in 2011 than in 2010. It's safe to say that Europe isn't a dependable export partner at the moment.
Thus, America's big coal companies are looking east. Already, China uses three times as much coal as the United States, and in 2009 it moved from being a net exporter to an importer. India is third in global coal consumption, burning more than 700 million short tons a year, but its domestic mining industry is hamstrung by absurd inefficiencies. (Anybody interested in what job killing regulations actually look like should check out this New York Times piece.) As Businessweek notes, new power generation in the two countries could add as much as 300 million short tons of global coal demand this year.
But just because demand will be there, that doesn't mean U.S. miners will fill it. Traditionally, the U.S. is a fairly minor player in both markets. Last year, we sent just 5.8 million short tons to China, a 3.6 percent annual decrease, and 4.5 million to India, a 65 percent increase. In China's case, most North American shipments aren't for energy generation. Rather, they're used in steel production. This is partly a quirk of the way China's ports and rail systems are set up, which favor Indonesia as a provider of coal for electricity. To get a sense of just how small a role American coal has in China's market, take a look at this chart from the Carnegie Endowment for International Peace.
If the U.S. transition to natural gas slows down, or stops, this could all be a moot point. But if the U.S. coal industry has to stake its future on breakneck growth in Asia, it may indeed be doomed.
This article available online at:
www.theatlantic.com/business/archive/2012/04/is-coal-doomed/256455/