Qualifier: Please do not let this thread turn into an argument about global warming. Whether real or not, global warming is certainly preceived and will have its effect on coal.
Although I do not think it is going to have a substantial effect on railroads in the next three-to-five years, I think we can all fairly say we are “starting to hear footsteps” threatening to dminish railroad’s haulage of coal as a result of EPA restrictions concerning its use.
Naturally, things could change to reverse this threat: (1) GE could be successful in its “clean coal” campain (2) it could be concluded that global warmin is not affected by coal; or (3) capitalism could trump our desire for our grandchildren to be able to walk on dry land . . .
However, a possibility that occurs to me–as it relates to railroads–is we could see the reemergence of an export coal business. The fact remains that coal is a relatively inexpensive fossil fuel. Thus, as energy sources become more expensive, if the EPA puts regulations that are more stringent than say–India, or some other industrialized country–there may be a growing market for railroads in export coal.
Where do you see any significant customer? The EU is going to be tougher than any US Regulations. PRB coal has too low heating value when you consider the long transport distances, to capture any overseas markets, and eastern coal just keeps getting more expensive to extract. Coal production in South Africa, Columbia, and Australia just keeps expanding.
Coal wil be around for a long time as a power plant fuel for several reasons.The posibility of reducing the so called green house gasses is being worked on by a lot of folks.
2.Replacing the coal fired plants with anything else will take at least 40 years with the enviromental and NIMBY factors we live with. Where is our spent fuel rod repository?
3.As far as coal becomming an export fuel, Just look at what Venzuela is trying to do with China.cut the U.S. out and ship up to 2 Million barrels a day to them. Some other far right nation could do the same with India.
4.A question for someone else,why isn’t the U.S. drilling industry drilling like mad, with the price per barrel so high? Are all the drill rigs busy off shore India and China?
These are interesting as a BNSF fan. I knew PRB coal burned cleaner, but a lower heating temp? Does this mean it’s not as effiecient a fuel even though it’s cleaner. Now I really have to read up on this. Anyone know of good sources?
“All of us” doesn’t include me. I have no fear about U.S. rail haulage of coal for domestic use diminishing, until the coal is mined out. I’m not seeing anyone in the industry planning for the end either.
Anything is possible but the fourth and more likely scenario is that CO2 will be sequestered, the cost will be absorbed by ratepayers (and be cheaper than the alternatives), and that is that. I’m already seeing large-scale coal-burning facilities being planned with 100% CO2 capture and sequestration, and making the economics work, too!
Unlikely that export coal from the U.S. (except Alaska) will grow. The market is amply supplied with S
PRB coal “burns cleaner” depending what coal one is comparing it to. Generally when people say this they are comparing PRB coal to high-sulfur Illinois Basin coal (mined in Illinois, Indiana, western Kentucky, and Missouri), a coal where consumption has been in steady decline for 30 years. Colorado/Utah coal and low-sulfur Eastern coal burns cleaner than PRB coal because there is lower ash content and higher heating value.
Because Alaska has a very small local market and several major fields are within 0-250 miles of tidewater. Eastern high-sulfur coal has a huge Eastern U.S. and Midwestern U.S. market which consumes more than the mines can supply, and Western U.S. “lower 48” coal either has a huge U.S. market or is a long long way from tidewater. Utah is the only western state that has had any presence in the export market, dating to 1979, and it’s been an on-again, off-again frustration for all concerned. Utah has mostly been a backstop buy against labor problems in Australia and political problems in South Africa, but those appear to be a thing of the past. Utah also has resource exhaustion issues in the currently rail-served fields.
That’s interesting, that Alaskan coal, with the reletive higher cost of production could be competitive with South American coal. Is it low sulfer, like the PRB, or high sulfer, like eastern coal?
Alaska coal isn’t very competitive at present with Colombian coal, but it might be in the future. What is currently being mined and shipped is low-sulfur sub-bituminous.
Eastern coal is not all alike! Eastern Kentucky and West Virginia have large reserves of low-sulfur coal. Western Kentucky, Ohio, Indiana, and Illlinois are mostly high-sulfur coal producers.
And there is also high-sulfur western coal, but no one mines it at present because there is no market for it.
Eastern high-sulfur coal continues to have a significant market because the cost of the coal (in delivered BTU) plus the cost of scrubbing is often less than the cost of low-sulfur coal w/o scrubbing. And many boilers cannot burn low-sulfur coal without very expensive modifications.
It seems like the only issue facing coal is the restrictions on CO2 emission. It also seems probable these restrictions will become more restrictive in the relatively short term. Complying with these growing CO2 restrictions is bound to raise the cost of electricity, and a rising cost will tend to cause a reduction of usage. The reduction of electricity consumption will reduce the consumption of coal, which will in turn, reduce the rate of mining and transportation of coal. I would think the average residential consumer could cut their electric usage by 25% if they put their mind to it. The only question is, will the price rise high enough for the consumers to make such a concerted effort to cut their usage?
As I understand it, there is no technological barrier to generating power from coal with zero CO2 emission. If this objective became the law of the land, and we were given say a ten-year period to achieve it, what would this zero CO2 achievement do to the cost of electricity based on today’s rates?
With a pre-emptive apology to S. Hadid for seeming to be always contrarian to his views…
[bow]
…the reason CO2 regulation could hurt railroads significantly is that such a mandate would push nuclear power past coal to the forefront of lowest-cost electricity production. (We’re assuming hydropower opportunities are maxed out.) Right now, PC coal plants are literally dirt cheap, IGCC plants are still commercially viable but just barely. CO2 sequestration would require the IGCC technology, and the added costs of sequestration puts IGCC in second place behind current nuclear technology.
See my post about a new merchant nuclear power plant proposal in Idaho…
…and realize that just a few years ago all such merchant proposals were for coal fired plants only. Now we’re starting to see a tipping point in favor of nuclear power, all due to this idiotic global warming/“CO2 is evil” propaganda campaign.
The one possible saving grace for the coal/railroad marriage is in the coal-to-liquids field. If oil prices can be guaranteed to stay above $40 a barrel for the next 20 years, then it becomes cheaper (not to mention more environmentally friendly) to make transportation fuels from coal synthesis than it is to refine transporation fuels from market priced oil.
I can only guess as to the elasticity of electric demand, but I would not assume that it is completely inelastic. It depends on how high the price rises. My 25% estimate arbitrarily represents what I think I could achieve if I
I looked at the graph, and I understand what you are saying, but I think we are making two different points. If consumption is rising, it makes sense to say that demand is rising, not falling. But demand and consumption are not exactly the same thing in terms of economics. Demand can actually be falling while consumption is rising. That seeming paradox manifests as rising consumption not rising as fast as it would rise if demand were greater.
This is one way to look at it: Say gasoline consumption is rising at 10% per year. Now say the price drops to 50 cents per per gallon. Would you expect the rate of consumption to continue increasing by 10%, or would you expect it to accelerate?
I have a problem with the way you’ve framed this statement. Why would run-of-the-mill global warming in and of itself have any effect on coal one way or the other?
Yes, I know what you’re saying, but to me it represents why this conceptualized bandwagon of populism has strayed so far from the proper intellectual discourse - you’re taking the “CO2 causes global warming” fallacy and giving it a standing alongside the Law of Gravity, E = m(cc), et al.
You really should step back and ask yourself why you so subconsciously do such a thing!
You are the one who keeps saying that the greenhouse falacy is being perpetuated. What do you think happens as a result of that perpetuation? Do you think people are going to go plant a tree, buy a bumper sticker and leave it at that?
Coal is a favorite target of the green movement.
I wish people would understand that urban sprawl hurts us more than all the SUVs and coal burning power plants put together, but I guess that is a bit off topic.
Your argument seems plausible, and you obviously know more about this subject than I. However, there is one factor that you do not seem to account for in your argument.
It seems to me–in my admitted state of ignorance–that coal costs are fairly readily calculable. The industry can be fairly certain what their expenses/exposure is with coal. However, the same can’t be said with nuclear. Nuclear is a much bigger political hot button. I think we only ne