No One Wants Coal Anymore?
Obviously coal prices have held up quite well in comparison to those for oil. Firstly oil has been subjected to much higher speculative forces to the upside then and now to the downside.
Secondly oil is mainly use for transportation, and consumers can cut back significantly with relative ease if necessary. Coal is responsible for half of the electric power generated in the US and guess what…. even in bad times, people around their homes more often still want to have their lights on and elevators running; be entertained with TV, games; prepare more home-cooked food and so on, and all of which result in higher electricity use. Good reasons to explain why coal prices haven’t collapsed like those for oil and most other commodities.
Think Obama to bankrupt coal-fired plants as said?
Will he not have enough bankruptcies to confront with - in autos, parts supplies, dealership, banking and every other business that are saddled with the credit crunch when he takes office?
Or will he ask 50% of Americans to live without electricity; and the same proportion of factories and businesses that survive to operate without it? Naïve thinking, isn’t it?
According to EIA projections, electricity demand will grow by 29% from 2006 to 2030 and coal’s contribution will increase from 49% to 54%. This demand projection most likely hasn’t taken into consideration one trend-shifting factor – electricity for motor vehicles.
Obama has said to put 1 million plug-in hybrids on the road by 2015. With or without his promotion, the era of practical electric vehicle has already arrived just in time. A Warren Buffett company has made substantial investment in BYD - a Chinese battery maker, now also a manufacturer of plug-in hybrids already available in its domestic markets. Current models can run on electric mode reaching 60 to 100 mile ranges and further development is expected to bring that up towards the 200 mile mark and can be quick-charged in 10 minutes to 50% capacity of the lithium-iron battery, which is said to have solved the overheating issue of similar battery technology.
Another technological advance in power storage is the development of Ultra-capacitor, which uses self-sustaining electric field to hold charges without involving chemical changes, thus allowing even shorter time for full-charging in several minutes.
The implication is huge for the electric system! We only need to worry whether it’s ready to cope with the extra demand from these ever increasing plug-ins as consumers flock to adopt them due to the cost, convenience and environmental advantages.
Now we can envision increasing demand for electricity and decreasing demand for oil in transportation use – a change that will help Obama achieve his goal of “saving within 10 years more oil currently imported from the Middle East & Venelzuela”.
He also said in his victory speech - to use more coal, the most abundant energy source in the US, for electricity generation of course and probably for manufacturing gasoline substitute. That’s right! CTL or Coal To Liquid technology is the next thing that will cut oil import further.
Unlike plug-ins, this is a technology that has existed for over half a century but only in practical use in S. Africa until recently. The rest of the world is now catching on for apparent reasons – China has 3 plants in construction and 3 in the planning stage, and guess what – The US has 1 in engineering and 12 in the planning stage!
(source:
https://www.flcmidwest.org/2008regionalmeeting/Headley.pdf)
And what raw material do those future plants use to produce “gasoline” again? COAL! Yes, that’s right - the stuff that Obama said Americans will use more of.
Obama also said he wanted to protect the environment.
Newer operating coal-fired plants are no longer poison spilling and smog causing entities. The next generation of coal plants employing gasification technology (IGCC) will be even cleaner and more efficient but involves about 25% more in capital costs. Another 25% will ultimately achieve “zero emission” by incorporating CO2 sequestration.
That’s where governmental incentive and regulations can steer the industry towards producing ever-increasing energy demand and at the same time addressing environmental issues.
Who want coal again? Obama, and Americans who want to use electricity in their homes, for their cars, to be independent from hostile and volatile fuel sources, and ease their sorrowfully large trade imbalances……...
That sounds like everyone in the USA, doesn’t it?
KT