I agree the the fate of coal has little to do with market economics. Instead, it has been killed by regulatory pressure and the “political winds,” as you say. Those are the forces that promised to kill coal, and they did. While economics may seem to be the explanation for a downturn in coal, those economics are the result of the political pressure surrounding the public marketing of “green energy.” I don’t think coal could make a comback now even if it were free.
You distorted JPS1’s remarks. Politics and Greens were not the reason electric companies have turned to natural gas over coal.
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Euclid
JPS1
My former employer - I am retired - has shut down and mothballed half of its coal fired steam electric stations. The others are on or near the chopping block. They are not coming back.
It is not just the economics of coal vs alternative fuels or alternative sources, i.e. wind, solar, etc. It is also emotions. The political winds, which are driven by emotions, are blowing against coal. It is unlikely that any new coal fired power plants will be built in Texas, and the push will be to retire the existing ones as soon as practicable.
I agree the the fate of coal has little to do with market economics. Instead, it has been killed by regulatory pressure and the “political winds,” as you say. Those are the forces that promised to kill coal, and they did. While economics may seem to be the explanation for a downturn in coal, those economics are the result of the political pressure surrounding the public marketing of “green energy.” I don’t think coal could make a comback now even if it were free.
You distorted JPS1’s remarks. Politics and Greens were not the reason electric companies have turned to natural gas over coal.
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Market forces were the cause of at least the coal plants replaced by cheap gas.
Read the posts of JPS1and Midland.
I read them both. I quoted JPS1, so I read his post very carefully. You have your opinion. I have mine. Midland Mike has his. Cheap gas is a market force, and so is expensive coal. Without the poltical promise to end coal by the rasing the cost of new regulations, coal would have been less expensive.
So, yes, the ultimate death of coal was caused by the market forces, but the market foreces were heavily influenced by the promise to destroy the coal market. If you scare away coal investment, it will raise the cost and price of coal.
And the resultant shifting of energy consumption to gas, due to the political threat to coal, will increase market for gas. Increasing the market for gas, could attract new investment to raise gas production to keep up with demand. New investment in gas infrastrucure could reduce the price of gas.
The ecnonomic market for fuels is influenced by expectations of supply and demand, and government threats of punitive regulations can influence those expectations. The market forces cannot be separated from government policy.
I think you have cause and effect reversed. You seem determined to blame the decline of coal for generation on Greens and politics but completely discount the political impact of Trump bellowing about a coal resurgence and loosening many EPA protections. Yet coal continues in decline because the political impact either way is minor.
The price of natural gas has been trending down for years. Since 2000, according to Microtrends, the price has dropped from a high of $19.40 an MCF in 2005 at the Henry Hub to a low of $1.49 last Friday. Over the last five years the price has fluctuated from a high of $4.75 in 2018 to Friday’s low of $1.49. In 2020 the high was $2.86.
The price of natural case is volatile. To manage it large scale buyers enter into long-term forward contracts, which they hedge using a variety of derivative instruments to help smooth the volatility. We rarely paid the spot market price for natural gas. The same was true for our long-term coal contracts.
My former employer, a Fortune 225 Corporation, has shutdown approximately half of its lignite (coal) fired steam electric stations. They are not coming back.
Although I have been retired for 15 years, I stay in touch with some of the company’s managers and key employees. They tell me that the major driving force for closing the coal plants was the decline in the price of natural gas, which is expected to stay low, along with the increasing cost of meeting the clean air requirements, maintaining ageing plants, and the increasing competitiveness of wind and solar energy.
Well, the political impact can be minor or major. With Trump being pro-coal, the impact was minor and not enough to offset the impact of Obama saying he will regulate the coal market so building new coal plants is not economically feasible. Who is going to take a risk building new coal plants with that cloud hanging over the future of coal economic viability?
And it is not just the two presidents affecting the market of coal. The politics of climate change science has marketed a whole new public consciousness that is convinced that renewable green energy of wind and solar must replace coal or the world will end in a couple hours.
No, coal is dead and it won’t come back even if its free. And natural gas is the next fuel to be targeted for the same fate.
If you understood JPS1’s posts, you would realize gas prices were dropping long before Obama or the Green agenda. Climate change is science-based for many years, with years of data to support what is now obvious to any sensate creature, not just another ridiculous Trump campaign promise/lie.
I do understand JPS1’s posts. I did not say that the fall of gas prices was entirely caused by politics. Instead, I said that the gas price drop was a relatively minor secondary effect of Obama’s war on coal, which was an all out concerted effort to kill coal, as Obama clearly stated. Part of that effect was to raise the price of coal.
But the popular myth is that coal was just chugging along minding its own business when super hero natural gas sprung upon the scene as the much cheaper alternative to coal. These market conditions do not not just come out of nowhere. They reflect human nature and beliefs about the future.
As I understand it, you currently have coal-burning power plants on the eastern seaboard who are having Powder River Basin coal sent to them by rail, rather than using the closer Appalachian coal, because the Powder River coal is the only coal available to them that can meet federal and state clean air regulations when burned. I suppose the government could change the regulations to allow more pollution so the eastern coal could be used more. Guess in an election year, a politician would have to decide if campaigning to add more coal jobs wouldn’t open them up to attacks on the increased pollution it would cause.
Obama promoted policies to move us away from a future where climate change would be irreversible, Euclid. Irreversible. Could not be fixed. Using less and less coal is part of that equation. It’s not like Obama hated the mineral or the people who mined it. He wanted our future to be something we could live in.
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Green folks don’t think natural gas is the answer to reduced carbon-based emissions. They see it at best as a transitional fuel and object strongly to fracking, which was the main reason why natural gas costs dropped because of a hugely increased supply.
I did not say he hated coal (as the mineral). I only said he wanted to kill coal (as the fuel).
We began mixing Powder River coal with lignite in the early 1990s to comply with EPA requirements for coal fired power plants. If I remember correctly, the rail transportation charge per ton to get it to Texas was more than the cost at the mine site.
Transportation, mine to user, has nearly always been a bigger cost in the use of coal than the cost of the coal itself.
Trains ran a very good special issue on coal about 8-12 years ago. Among other things it contained a article on the Powder River Basin coalfield’s history, and compared the qualities of various kinds of coal found across North America.
Wyoming coal is almost the worst quality (above only lignite), with a fairly low heating value and a high ash content. But it contains almost no sulphur and is incredibly cheap to mine, as 50’ thick seams are found very close to the surface.
The first thing the Clean Air Acts cracked down on were sulphur oxide emissions, which cause acid rain. Power plant operators found that they could avoid installing expensive scrubbers by switching to the Wyoming coal, despite having to pay more to ship it and burn a larger amount of coal to generate the same amount of electricity.
If I recall the article correctly, Colorado coal (Unita b
That was not true in the case of the lignite coal we mined in east Texas. The power plants were located within spitting distance of the open pit mines. It was the ability to co-locate the power plants and mines that made the lignite coal, sometimes referred to as brown coal, economically feasible.
As time when on we opened mines that required longer distance movement of the coal to the power plants. To do so we built a railroad at two of our plant sites. But the distances were less than 8 to 10 miles.
As an aside, one of the preceding commentators noted that coal produces a lot of ash, which has to be gotten rid of. We made money off of it. We were able to sell it to folks that could use it to help make roadway materials and, if I am not mistaken, pressboard.
As I said - nearly always - NOT always. Yes there are ultimate users that are co-located very near the mines that supply the user. In addition to users located a distance from the mines in the USA, there is still a business in the US exporting coal to foreign destinations - for both steam and metallurgical uses.