#2 US coal company Arch Coal stock has fallen to close to $1 per share (i.e. $1.01)–again–despite the reverse 10:1 split done in August.Stocks that stay below $1 per share are not usually allowed to stay on the New York Stock Exchange, making the raising of capital very difficult–to say nothing of the strong likelihood that Arch will be filing for bankruptcy before very long–following the August bankruptcy filing of Alpha Natural Resources (formerly #3 US coal company)For Colorado readers, Arch is an important supplier to Xcel’s biggest Colorado coal plants.For US readers, Arch Coal provides over 10% of the country’s coal….It is unclear who will be financing coal mining in the not-too-distant future and coal does not “hop” on the trains itself…States should be making plans for how to keep the electrical grid stable without a supply of coal for each state’s coal plants.
Call it a one-two punch against coal. As global demand for U.S. coal exports continues to sag, domestic demand at power plants has been sliding as well.
For the first time ever, natural gas trumped coal as the top source of electric power generation in the U.S. In April, roughly 31 percent of electric power generation came from natural gas, whereas coal accounted for 30 percent, according to a recent SNL Energy report.
It’s a dramatic difference from April 2010, when coal accounted for 44 percent of the mix and natural gas just 22 percent.
“There’s been a change both from a regulatory and economic perspective in terms of the competitiveness of natural gas,” said Steve Piper, associate director of energy fundamentals at SNL Energy. “The transition from coal has been stunning.”
Stunning is right. Coal prices have continued to crater this year, extending a years-long downward trend.
Charleston (West Virginia) Gazzette-Mail:
Coal consumption is not likely to increase, regardless of whether new federal regulations on power plants go into effect, and, from coal’s perspective, the national debate on coal and climate change has largely been lost, the president of West Virginia’s largest electric utility told a roomful of energy executives Tuesday.
The Clean Power Plan, the Obama administration’s proposal to regulate greenhouse gas emissions from power plants, would cut coal consumption — but even if the regulations are blocked, coal consumption will not increase, Appalachian Power President Charles Patton said at the state Energy Summit at the Stonewall Resort.
“You just can’t go with new coal [plants] at this point in time,” Patton said. “It is just not economically feasible to do so.”
Patton acknowledged that entire communities, particularly across Southern West Virginia, are being decimated by coal’s decline. However, he laid out a series of stark economic realities.
By 2026, Patton said, Appalachian Power expects its use of coal power to be down 26 percent, with or without the Clean Power Plan.
That’s because of cheaper alternatives and already-imposed environmental regulations that make coal uncompetitive, Patton said.
The cost of natural gas electricity, including construction of power plants and infrastructure, is about $73 per megawatt hour, Patton said. For a conventional coal plant, it’s $95 per megawatt hour.
Even wind power, which is less dependable than coal, is still significantly cheaper, at $73 per megawatt hour, when a longstanding tax credit for wind energy production is factored in.
An advanced coal power plant, with carbon capture and storage to lower emissions, costs nearly twice as much, at $144 per megawatt hour, Patton said.
“With or without the Clean Power Plan, the economics of alternatives to fossil-based fuels are making inroads in the utility plan,” Patton said. “Companies are making decisions today where they are moving away from coal-fired generation.”
What’s more, the debate over the “war on coal,” which sucks up so much of the political air in West Virginia, has largely been settled in other states, Patton said.
He said 72 percent of Americans believe the earth is getting warmer and that man-made causes are partly attributable. Nearly two-thirds of Americans favor stricter emissions limits on greenhouse gases, Patton said, with even larger majorities among young people.
“Americans believe there is a problem, and while we in West Virginia believe that’s ludicrous and we have our view on coal, it’s really important to understand, if you’re not in a coal-producing state, your affinity for coal is not there,” Patton said. “The debate largely, at this point in time, has been lost.”
The BBC coverage of the UK coal phaseout included this:
Announcing the consultation, Ms Rudd said: “Frankly, it cannot be satisfactory for an advanced economy like the UK to be relying on polluting, carbon-intensive 50-year-old coal-fired power stations.
“Let me be clear: this is not the future.
“We need to build a new energy infrastructure, fit for the 21st century.”
So, coal is going out because alternatives are less expensive. No carbon tax needed.
If FF’s can be eliminated without regulation through pricing pressure, then the continued, if not greatly increased, subsidization of RE is what is crucial. Not a carbon tax or regulation of FF GHG emissions.
There are a lot of people around the web who want RE, but despise subsidies for RE. Makes no sense.
What makes no sense is your fixation on your “plan” for RE (increased subsidization and a national “public utility” scheme). Pie-in-the-sky thinking in the face of the ‘free market” forces that own our government.
Coal is dying but far from dead, and a carbon tax WILL kill it quicker. The low prices for all fossil fuels are now hurting the progress of RE (and have you noticed that the UK plans to drastically cut subsidies for RE?, as Ms. Rudd speaks out of both sides of her mouth and says “We need to build a new energy infrastructure, fit for the 21st century.”)
A national public utility makes no sense? The electric utility sector – as I have said a thousand times – is already half public. There are plenty of municipal coops making electricity, county coops. For all I know state coops.
But the scope of our next energy revolution is gigantic – so big only the Federal government can address it properly.
And by properly – I mean on time to save our asses. If we have learned anything from the past thirty years of almost no progress – the free market ain’t free, and we certainly should not lay all of our hopes on it.
RE for the U.S. is a 5 – 10 trillion dollar project. It needs national planning, national resources, and national funding.
PS
“Pie in the sky” is the watchphrase for those who refuse to fight for the best solution.
Hell – everything is PITS with Republicans in office. If you think a carbon tax is going to make the public fight for RE, as opposed to pushing for a system that will decrease their energy costs…. maybe it is your ‘plan’ that is PITS.
PS
No, “Pie in the sky” is the watchphrase for those who refuse to stand by and watch others babble on about good ideas that are never going to see the light of day anytime soon. What you call “fighting for the best solution” is a distraction from the real problem, which is political ideology and dysfunction and the dirty money behind it.
And you are aware of that, as is evidenced by you saying “Hell – everything is PITS with Republicans in office”.
And here you go again with the straw men, putting words in my mouth, and non sequiturs, as evidenced by:
“If you think a carbon tax is going to make the public fight for RE, as opposed to pushing for a system that will decrease their energy costs…. maybe it is your ‘plan’ that is PITS.
Even though you seem a lot more sober today, that is PITiful logic.
Can’t disagree with much of what you’ve said here. Reread my comment—-what makes “no sense” is your FIXATION, since it IS just wishful thinking in this Repugnant-dominated world we live in.
For now, the coal companies can still rely on Japan for financing.
And if all else fails, blame Obama.