Party's Over: Coal Prices Up 143%, Never Again To Be Cheap
by David Sassoon - Feb 12th, 2008
in
The great argument for coal-fired electricity can be summed up in three words. Cheap. Cheap. And cheap.
Although those words have applied only to its price to consumers -- not its true cost to society -- the days of cheap coal are now over, likely forever. Read this report from today's Wall Street Journal (subscription required, alas), and you'll see why.
The price for a ton of coal has doubled in the United States since January 2007. It has risen 143% in Asia during the same period. Over the last five years, the price has gone from about $20/ton to more than $120/ton there, an increase of 600%.
Given surging demand in China that is not likely to relent, growing expansion of coal use in India, and challenges facing global suppliers in Australia, Russia and South Africa, it looks like the price of the fuel that supplies 40% of the world's electricity is on a permanently upward trajectory.
Figure in the the 30% rise in electricity prices that new "clean" coal plants in the US will require, and it doesn't take an MBA to see it would be a lot smarter to spend money on energy efficiency upgrades and the development of renewable energy alternatives instead of more hungry, coal-fired dinosaurs.
The latest measure of price pressure came from punishing winter storms in China, which added to problems caused by flooding mines and overcrowded ports in Australia, blackouts in South Africa, and rail-car shortages in Russia. These developments exacerbated a well-observed shift already taking place in global coal markets: China, which has historically been a huge exporter of coal, became a net importer.
China is doing for coal what it once did for oil: pushing prices to new
highs, adding more pressure to the creaking global economy.For the world, which uses coal for about 40% of its electricity, the
result is similar to what happened after China became a net importer of
oil in 1993. But the Chinese factor is unfolding much faster with coal.
The WSJ also published an eye-opening chart to accompany its article. It shows how much fossil fuel is left in the world, given current rates of consumption.
- Coal: 150 years
- Natural Gas: 64 years
- Oil: 42 years
The source of these estimates? The International Energy Agency's World Energy Outlook 2007, and BP's Statistical Review of World Energy 2007. It's the best information anyone has.
We also know -- because of global climate change -- that it would be supremely stupid to burn every last lump and drop of fossil fuel remaining in the world.
Why not cure the addiction to the stuff immediately, rather than when it's too late?
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Coal
Coal is a non-renewable unsustainable polluting resource. Solar is non polluting, renewable and the sun is perpetual for humankind. Once large Solar, thermal, electric plants are installed, they produce for the cost of maintenance, FOREVER! Like an oil well that never goes dry! The OPEC countries fear Solar more than death itself, and fight it every step of the way! Fortunately, they have less influence on Spain and Portugal, than in the U.S.A. and those countries have developed and are enjoying clean, perpetually free solar power today. The coal lobbies in the 'states are famous for bribing away any progress towards perpetual energy, be it solar, wind wave or geothermal! One day the Chinese will catch on, and we will not get a damn dime for our coal, they will be into perpetually free solar energy, and develop their deserts to produce it! Sell the damn dirty stuff to them before they catch on, and develop perpetually free solar thermal electricity for the U.S.grids with the money! The OPEC boys will soon start hoarding oil as their reserves run low, driving its price through the roof! Americans are running out of options and must choose soon, keeping in mind that switching power sources is an expensive process. Doing it once, to Solar is enough, never mind the nuclear B.S. it also is non-renewable, and more suited for submarines, aircraft carriers and icebreakers, where solar simply doesn't cut it!
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