PumpBlogs 
Is Coal Really King?
Don’t be too hasty in answering the question, let’s take a few minutes and look at a few facts, then we can review all of the unsubstantiated facts that seem to be clogging the media and energy industry.
Just the facts:
• We have an aging labor force the lack of skilled experience labor is impacting the mining industry. Several companies (James River Coal, Massey Energy Co. and Alpha Natural Resources are doling out gas money in hopes of avoiding labor shortages.
• Demand for coal is growing worldwide, china recently shifted from mostly exporting coal to mostly importing it. Soaring coal prices and international demand push the coal companies to produce as much product as possible (coal prices and demand have more then doubled since 2007). Rising wages and expensive new safety regulations have boosted the cost of mining coal.
• Emissions control systems, the average price cost for scrubber systems has gone up 83%, from 250M to 457M in the last couple of years, primarily due to material and labor. This additional cost will be past on to the consumer. It should also be noted that the scrubber system provide zero return on investment and reduces the output (net megawatts) of the power plant, in simplistic terms the scrubber is a liability.
• Currently, coal is the most reliable and affordable energy source in the United States. However, coal –fired power plants produce a significant amount of emissions.
• The U.S Geological Survey has lowered its estimates of the amount of “recoverable” coal in the nation’s largest coal fields
• The nation’s rail freight network (primary source of transportation for coal) is in shambles. By the year 2035, traffic jams could be so severe trains would grind to a halt for days with nowhere to go. The nation’s 140,000 mile network of rails devoted to carrying freight (coal) is already groaning under the strain of congestion. And it’s probably going to get worse over the next two decades.
• The average coal plant consumes 100 to 250 rail cars (100 tons per car)) of coal per day. Some of this coal is imported and blended with U.S coal
• Coal accounts for 48% of power generation in the U.S. today. Over the past several years, multiple power producers have announced plans to move forward with construction of a plethora of coal-fired generating units. At the peak of activity, well over 200 new coal-fired generating units were announced. Coal-fired power plants continue to generate a great deal of the energy consumed in North America, especially in the United States, and according to long-range projections, this is not expected to change in the near future. In fact, coal supplies approximately 48% of the electricity generated in the United States. The Department of Energy estimates that by 2030, our dependency on coal will increase to a point that 54% of our electricity will be supplied by this fuel source.
Now for the speculation and unsubstantiated comments:
• North American coal supply, I have heard estimates ranging from 600 years to 200 years. Are these number based on current usage or future usage, did they take into account exporting to India and China?
• Despite recent price increases, coal is still cheap compared to other fuels? For how long? What other fuels? Did they take into account renewable energy was Life Cycle Costing factored in? The price of coal has doubled since last year, largely due to surging energy use in China and India why wouldn’t we assume the cost will continue to rise, making coal cost prohibitive?
• Alternative / renewable energy is expensive (compared to coal). Wind, solar, bio-mass doesn’t depend on fossil fuels. Did they consider LCC and projected fuel cost over the life of the plant?
Our dependency on fossil fuels and resistance to change will eventually bring our economy to a stand still. It never ceases to amaze me that U.S consumer will rush out to buy the latest and greatest electronic device but fight every inch of the way when our perceived entitlements (utility services) are challenged. Wake up America the age of fossil fuel is a mere blip on the geological scale, its time to move on.
Is coal or for that matter fossil fuel really King? You be the judge.
