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After calamitous year for coal, U.S. consumers hold key for rails

A shovel is placed over coal briquettes during a protest in front of the chancellery in Berlin December 3, 2014. Investors in U.S. railroad stocks, who have been punished in 2015 by an accelerating decline in high-margin coal shipments, now are pinning their long-term hopes on a resurgence in consumer spending. Their bet is that a strengthening economy will produce enough demand that railroads will be able to replace the income lost to years of declining coal use with so-called intermodal shipping – the movement of containers stuffed with clothing, furniture and other consumer goods. Thanks to environmental rules regulating power plant emissions, coal use has declined steadily since peaking in 2008. So far this year, freight volumes have tumbled 9.2 percent as low energy prices encouraged utilities to switch to burning cheaper natural gas, while the strong U.S. dollar has hurt exports. The accelerated decline this year has […]

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Coal mine starts continue to decline

graph of U.S. coal mine starts and total production, as explained in the article text Source: Mine Safety and Health Administration (MSHA) Note: Reactivated mines are those mines with production reported in previous years but not in the preceding year. The number of new and reactivated coal mines that began production in 2013 fell to the lowest level in at least the past 10 years. The addition of 103 mines in 2013 came as 271 mines were idled or closed, resulting in a 14% decline in the total number of producing coal mines from 2012 to 2013. The 2013 total was 397 fewer coal mines than in 2008, when coal production was at its highest. Although preliminary 2014 data on coal production from the Mine Safety and Health Administration indicate a slight increase both in production and in new and reactivated mines for 2014, these levels will still be […]

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Coal use in China is slowing

U.S. Energy Information Administration, China National Bureau of Statistics (NBS) Source: Economic deceleration, industry restructuring, and new energy and environmental policies have slowed the growth of coal consumption in China and are also driving more centralized and cleaner uses of coal. After nearly a decade of rapid growth, energy-based consumption of coal, which currently supplies two-thirds of China’s overall energy use, grew only 1% to 2% in 2012 and 2013 and was essentially flat in 2014. Total energy consumption in China has slowed as its economic growth has eased and as the composition of gross domestic product (GDP) has shifted. In 2013, the service sector share (47%) of GDP surpassed the industry sector share (44%) for the first time in Chinese history. The service sector share increased to 48% in 2014, already exceeding the government’s 47% goal for 2015. Policies to accelerate the development of service industries are likely […]

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BHP Billiton Sees Rocky Outlook for Coal

A multiyear downturn in the energy commodity, used to generate electricity and make steel, is worsening as miners continue to produce too much supply and China’s economy slows, said Mike Henry. China’s restrictions on certain types of highly polluting coa l, introduced earlier this year as part of an accelerating campaign to clean up its air, have added to a significant glut in the global market for the fuel, the mining executive said on Friday. “There are no signs of things getting better in the immediate term,” he said during a speech in Brisbane, Australia, according to prepared remarks. Coal prices have been tumbling since 2011 as cooling demand for the fuel was met by rising supplies from new mines planned when the market was booming. Price declines have deepened this year. The value of metallurgical coal, which is burned for steelmaking, is down as much as 30% from […]

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Coal’s Answer to Decade-Low Prices Is Even Lower Prices

Coking coal is testing one of the basics of Econ 101: that low prices are the cure for low prices. The global metallurgical coal benchmark for the fourth quarter settled last week at $89 a metric ton, down 4.3 percent from the previous period to the lowest level since March 2005, according to Doyle Trading Consultants, a Grand Junction, Colorado-based industry analyst. Even so, at least three-fifths of the material that moves by sea, some 180 million metric tons of the steelmaking component, are generating a return amid a glut as the crude oil rout and a weaker Australian dollar lower costs for the world’s largest met coal exporter, Bloomberg Intelligence data show. “The prices have to get low enough to where the Australians can’t even tolerate them,” said Jim Thompson, director of coal for IHS Inc. in Knoxville, Tennessee. “Then maybe we can get around to solving the […]

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Output per miner-hour rises as smaller coal mines close

graph of coal productivity and number of U.S. coal mines, as explained in the article text Coal mining productivity increased in 2013, averaging 5.5 short tons per miner hour, reversing a trend of declining productivity since at least 2000. Preliminary data from the Mine Safety and Health Administration indicate a further increase in 2014. Improved productivity at the largest mines, as well as the shrinking number of smaller coal mines, contributed to the rise in overall productivity. U.S. coal producers improved mining productivity by 6.7% in 2013, reaching 5.5 short tons per miner hour. Nine out of the 14 U.S. coal supply regions , representing 79% of 2013 coal production, showed productivity gains in 2013, the most recent year with detailed productivity statistics. While some productivity gains result from improved mining technology, most of the productivity improvement is attributable to the closing of less-efficient mines with lower labor productivity. […]

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Scotland examines next steps after coal plant closure

The Scottish government blames British policies for pushing utility company to decide to close coal-powered plant next year. File Photo by Stephen Shaver/UPI EDINBURGH, Scotland, Aug. 18 (UPI) — The Scottish government said Tuesday it was setting up a panel to look into the impact of the closure of the Longannet coal power plant, the country’s last. "ScottishPower’s decision to close Longannet in March 2016 is deeply regrettable and has far-reaching consequences for Scotland," Scottish Energy Minister Fergus Ewing said in a statement. "This is a worrying time for Longannet workers, and the Scottish government and its agencies will do everything possible to support the 230 directly employed staff who will be affected by this announcement." The utility said the combination of high carbon taxes and high transmission charges meant it had to shut down the coal plant by next year. With 46 years in service, Longannet is the […]

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The Trick That’s Going to Keep America’s Coal Alive

A miner operates the shearer in a longwall coal mine in Johnson City, Illinois. Photographer: Andrew Harrer/Bloomberg A 30-year-old mining technique is becoming all that’s keeping a group of U.S. coal producers from joining their competitors in bankruptcy. Coal, already locked in a battle with cheap natural gas, now faces federal environmental rules that threaten to reduce its share of power generation to the lowest in 66 years. Companies from Illinois to Northern Appalachia are responding by leaning more heavily than ever on longwall-mining, a technology that’ll be used to produce a quarter of America’s coal this year, up from 19 percent in 2013. Investors are backing the miners who rely on the efficient approach. Think of a giant deli slicer with multiple revolving blades that cuts coal from a seam into slices. Eighty percent of analysts covering Foresight Energy LP and CNX Coal Resources LP, both known for […]

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New Zealand marks end to coal power

The era of coal is over, the government in New Zealand says as it phases in more renewable energy on its electric grid. Photo by Reinhard Tiburzy/Shutterstock WELLINGTON, New Zealand, Aug. 6 (UPI) — Coal-fired power is coming to an end in New Zealand as the country focuses on taking the global pole position in renewables, the energy minister said. "Historically coal has played an important role in ensuring the security of New Zealand’s electricity supply, particularly in dry years where our hydro-lake levels are low," New Zealand Energy and Resources Minister Simon Bridges said in a statement. "But significant market investment in other forms of renewable energy in recent years, particularly in geothermal, means that a coal backstop is becoming less of a requirement." Utility Genesis Energy said Thursday it’s on pace to shut down its last two coal-fired power plants by December 2018, effectively marking the end […]

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Big U.S. coal miner Alpha Natural files for bankruptcy

Alpha Natural Resources Inc, one of the largest U.S. coal companies, became the latest in the hard-hit industry to seek bankruptcy on Monday. The move comes as President Barack Obama is expected to unveil tough new measures to cut greenhouse gas emissions from coal-fired power plants. Alpha blamed its Chapter 11 bankruptcy on tougher regulatory standards and policies that favor renewable energy, as well tumbling prices for its coal. Alpha is the world’s third-largest supplier of metallurgical coal used in making steel and has also been hit by a slowdown in China. Walter Energy Inc and Patriot Coal Corp also filed for bankruptcy protection this year. Energy Future Holdings Corp, a power company that also has a large coal mining business, has been in bankruptcy since 2014. Alpha Natural, with total liabilities of $7.11 billion, has reported adjusted losses for the past 14 quarters. The company said on Monday […]

Posted On : Published By : Tom Whipple