Coal news and updates

According to a major new report from the Boulder, Col., -based nonprofit Clean Energy Action, the U.S. appears to have reached its “peak coal” point in 2008 and now faces a rocky future over the next 10 to 20 years of rising coal production costs, potential bankruptcies among coal mining companies and higher fuel bills for utility consumers. According to the analysis, much of the coal that is now left in the ground cannot be mined profitably.

 

The CEA report, titled “”Warning: Faulty Reporting of U.S. Coal Reserves”,” says the belief that the U.S. has a ‘200 year’ supply of coal is based on the faulty reporting by the Energy Information Administration (EIA) of U.S. coal deposits as ‘reserves.’ Most U.S. coal is buried too deeply to be mined at a profit and should not be categorized as reserves, but rather as ‘resources.’ The report recommends that decision makers at all levels should begin taking a hard look at coal cost and supply issues considering both geology and finance and begin thinking about scenarios that require moving the US beyond coal in significantly less than 20 years …. In short, the EIA’s reporting of over 200 billion tons of ‘Estimated Recoverable Reserves’ for US coal supplies has been like a ‘faulty fuel gauge for US coal estimates.”

Leslie Glustrom, director of research and policy, Clean Energy Action, and author of the study, said “Economically viable coal is a nonrenewable resource, and after examining currently available geological and financial data, there is good reason to believe we are rapidly reaching the end of US coal deposits that can be mined at a profit. If coal can’t be mined at a profit, not much of it will be mined. It is unclear how long the US coal industry will produce large quantities of coal and at what price, but the current financial distress of US coal mining companies could lead to significant changes in US coal production in less than a decade.”

 

“The rising cost of production is THE sleeper issue for those who follow coal and energy markets in the United States. It is a geological certainty and an economic fact that as mining activity matures in a region, production typically becomes more difficult and more expensive.” said Tom Sanzillo, director of finance, Institute for Energy Economics and Financial Analysis. “(T)he country is going through a transition in its energy mix for electricity. What will emerge is a more diversified set of suppliers for the nation’s electricity consumers. Coal’s relative monopoly at fifty percent of market share is likely to be replaced by growth in renewable resources, efficiency, natural gas and in some regions of the country by hydro ... The coal industry will be smaller with less producers, fewer mines and higher prices.”

 

Dr. Zane Selvans, geologist and assistant director of research, CEA said “The point of this report is that the fundamental constraint on coal is not from natural gas prices or government regulations, but from the geology of coal. The fundamental fact is that most of the coal in the US is buried too deeply to be accessed easily and we are rapidly approaching the end of accessible US coal deposits that can be mined profitably.” Said Dr. Zane Selvans, geologist and assistant director of research. “Independent of arguments about climate change and clean coal, coal’s days are very likely numbered due to questions of economic supply. Even if coal were perfectly clean or could be made to be so it would still be the wrong choice due to serious questions about long term US coal supplies.”

 

 

Source: www.stardem.com