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You ignore the cost of transportation to deliver the coal to generation plants.
Those are delivered costs in second graph.
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it's not economic to turn coal generators off and on whereas this is possible with natural gas generation which is why natural gas generation generally is used to meet peak demand.
I already went over that, try and keep up.
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In April, the cost of coal per million BTUs used by all U.S. electricity generation was $2.16 versus $2.42 for natural gas. See Table ES2.B here:
The natural gas price for that month is bottom of the barrel because of surplus driven by the mild winter. I guess if wanted to be misleading I could use the $6 figure in 2014 when it was in short supply.... neither has any relationship to the average cost.
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As mentioned, however, combined cycle natural gas generation is over 30 percent more efficient than coal generation due to a much lower "heat rate."
That is not going to make up for double the cost.
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One key factor can cause the price of delivered coal to vary significantly -- the cost of diesel fuel. The railroads have fuel adjustment clauses to pass through higher diesel costs, and diesel fuel prices have increased since April.
Yes it can, I can give you example from the anthracite industry. The lagest increase I've seen was leading up to the fall of 2008. Typically it goes up about $5 or $10 in the fall, it went from $180 to $200 that year(delivered to house price), a whopping $20 increase. It's back to one $180 now....
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Barring higher natural gas prices, please explain how Donald Trump would increase coal consumption unless he resorts to subsidies.
For starters the industry needs a clear and concise framework for what regulations they will need to meet far into the future. As long as the uncertainty exists of what is next it's done.
Show me the original document that says those are delivered costs. You can't deliver Powder River Basin coal for just over 50 cents to Ohio. The graph clearly says they are spot prices for the region, not delivered prices to anywhere else.
If Peabody could have delivered Powder River coal to Ohio for less than a $1/MMbtu, it wouldn't be bankrupt today.
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Originally Posted by thecoalman
I already went over that, try and keep up.
Candidly, I don't think you know what you're talking about. I don't have time to argue with an infallible-in-their own mind mini-Trump. If I repeated something that you said, clearly I was keeping up, and, in this case, just trying to explain the overall picture to those who would like an alternative position to your nonsense.
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Originally Posted by thecoalman
The natural gas price for that month is bottom of the barrel because of surplus driven by the mild winter. I guess if wanted to be misleading I could use the $6 figure in 2014 when it was in short supply.... neither has any relationship to the average cost.
Yet, despite these incredibly low prices, U.S. dry natural gas production has plateaued at well over 2 trillion cubic feet per month.
You seemingly know absolutely nothing about U.S. natural gas shale production, and most particularly about Marcellus and Utica production, if you think that $6 is a possibility for many years into the future. The Utica has been under production for less than two years, and productivity in the Marcellus has improved greatly since 2014. Actually development has been constrained by a lack of pipeline capacity.
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Originally Posted by thecoalman
That is not going to make up for double the cost.
Your assumption is that natural gas will top $4/MMbtu in the next several years? I don't believe that any longer, and, as I pointed out, neither do analysts at the likes of Morningstar, with their $3/MMbtu long-term projection of annual average prices.
If the Utica play works, natural gas prices will be falling towards $2/MMbtu, not rising towards $4.
I would never rule out natural gas prices above $4 for a few frigid months, but the supply response likely would be massive.
If you know of reputable analysts projecting $4 plus annual natural gas prices in coming years, please share them. I'll even help you out with the EIA long-term price model scenarios on page 33 here, but I would enjoy seeing a major analyst with a best case projection of over $4/MMbtu as an annual average. If you read this report, you'll note that EIA projects that natural gas exports will absorb U.S. excess production, linking U.S. natural gas prices to global prices, but there are many problems with that assumption.
I mixed up posts, I was referring to the second one in my other post.
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Candidly, I don't think you know what you're talking about
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Since you are repeating what I already posted I guess you don't know what you are talking about either. What I said was....
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Gas has it's place in particular for intermediate and peaking plants but they are not going to compete with base load coal. Vice versa coal is not going to compete against gas for intermediate and peaking plants. As noted the cost for gas since about 2008 BTU for BTU has been about double that of coal, they may be more efficient but they aren't that more efficient.
This is 100% accurate statement, if you wish to criticize what I'm posting you will need to be specific.
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if you think that $6 is a possibility for many years into the future.
I didn't say that, what I said was you using the recent low gas price as example would be like me using the high of $6 in 2014 as an example. Neither is relevant to the average price of about $4 since 2008. This topic is about the coal industry going bankrupt, you and others have suggested low natural gas prices are causing this but the fact is that on average it has not been cheaper than coal since the fracking boom started. Logically any reasonable person is going to consider other factors.
We can speculate on the prices all you want but it's just speculation in a market like oil that has historically seen significant swings in the prices. What do you think is going to happen when they start exporting it? If coal is no longer around to compete? Hmmmm?
Last edited by thecoalman; 07-21-2016 at 12:55 AM..
I understand your concern, for example NJ was suing PA over this. I have a very simple solution for this. Any electricity being exported from a state like PA into states like NJ that do not produce enough of their own power will have an environmental impact fee assessed on NJ residents and business's. We'll do the same thing with the coal or natural gas being exported from PA to feed NJ's own power plants. Certainly you would agree that PA residents should be compensated for the environmental damage being done in PA because of consumption in NJ.
It has nothing to do with exporting electricity. It has to do with coal-fired plants in Ohio/PA/WV, using coal mined in Ohio/PA/WV (or anywhere, really), sending pollutants into the air that travel into the western Carolinas, and then (A) pollute the air, and (B) impact the chemical composition of the rainfall.
And I don't want them to pay money for it, I want them to stop burning coal.
States like PA export electric into states like NJ along with the coal and gas to power their own facilities.
As far as North Carolina goes as of 2013 their primary source of electric is coal and they import roughly about 10% of their electric from neighboring states.
And I don't want them to pay money for it, I want them to stop burning coal.
I did not say they would pay money for it. What I said was you the North Carolina resident would pay for the environmental damage being done because of the electric and natural resources being imported into your state from a coal/gas producing state. If you want them to stop burning coal the first thing on your list is to pull the plug on power flowing into North Carolina.
Last edited by thecoalman; 07-21-2016 at 06:44 AM..
I mixed up posts, I was referring to the second one in my other post.
More rubbish. You're chart goes only through 2013, when the shale natural gas boom only was beginning. Natural gas prices subsequently have collapsed, and production has not materially abated despite the significantly low prices.
As I explained, natural gas must be at least 30 percent more expensive than delivered coal on a BTU basis, to halt its use over coal. Actually, considering other factors than higher efficiency, the needed premium likely is more than 40 percent.
And yes, even if by just 10 percent, higher diesel prices will result in higher delivered costs for coal.
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Originally Posted by thecoalman
I didn't say that, what I said was you using the recent low gas price as example would be like me using the high of $6 in 2014 as an example. Neither is relevant to the average price of about $4 since 2008. This topic is about the coal industry going bankrupt, you and others have suggested low natural gas prices are causing this but the fact is that on average it has not been cheaper than coal since the fracking boom started. Logically any reasonable person is going to consider other factors.
We can speculate on the prices all you want but it's just speculation in a market like oil that has historically seen significant swings in the prices. What do you think is going to happen when they start exporting it? If coal is no longer around to compete? Hmmmm?
You implied that natural gas prices will go higher and that it's inevitable. Analysts who believe in the shale boom believe that natural gas won't exceed $4 on average in many years. Do you believe the shale boom is a sham?
If not, there will be a massive demand response if natural gas approaches let alone exceeds $3, let alone $4, according to the analysts who believe in the shale boom.
The analysts who believe in the shale boom aren't "speculating." They are looking at the massive potential reserves available at low cost. They are looking at the massive natural gas by-product production associated with shale oil production, much of which has been flared due to lack of collection infrastructure.
You're the one speculating about the inevitable increase in the price of natural gas needed to make coal competitive once again.
Show us that the shale natural gas boom is a mirage, and then you can talk about speculation. Show us that the Utica shale field is not economical at $2 or $3 natural gas, and then you can promote the inevitable resurgence of coal.
Don't you believe the obvious that without the shale natural gas boom, that the coal industry wouldn't have imploded?
If you do recognize that the shale natural gas boom has decimated the coal industry, then you actually believe exactly what I've been explaining, and what the experts have been acknowledging.
Solar cannot and will never compete coal or other fossil fuels, period, end of story. Because of the cost, capacity and storage issues it's a supplementary fuel and that is all it will ever be.
This is the threshold you need to meet. It's January in the Northeast when the sun comes about 7 and sets by 5. It's cloudy, it's below 0 degrees and is going to stay like that for 2 weeks. Utilities are hitting record breaking consumption at night. How are you going to fulfill that demand with solar? Bahahaha
Yeah, technology never improves.
Here's just one expert who thinks you're wrong.
<<Concerning the future, and this may sound like a pun, the future of solar PV looks rather bright. The industry has consistently been able to lower the cost of solar panels. If this trend can be maintained for the next 10 years, and if subsidies are continued for that period, there is a real prospect for solar to become cost competitive on its own (that is, without a subsidy), at least for commercial installations. Utility-scale installations will take longer to become competitive; possibly 15 years, though it obviously becomes murkier to make projections that far into the future.>>
Many believe that like heating oil storage tanks, that some day, those using solar power can go off the grid, and use organic flow batteries within their homes to generate power at night or on cloudy days.
Candidly, you don't believe in technology changes, such as the shale natural gas revolution, even when they are patently obvious.
Good luck with that philosophy! Hope you didn't own many coal stocks in recent years.
That they did, for natural gas. It is the free market at play. Why pay for the expense of coal when natural gas is so much cheaper?
And a whole lot cleaner. Right now, there's a glut of natural gas, too. I have first hand knowledge of this as I own one gas well and parts of three others and get less in royalties than just a few years ago.
Part of the reason is the increased production that started with all the new wells drilled a few years back. Part of the reason is the high efficiency of gas appliances like furnaces, hot water tanks, etc.
No mention of the side effect of putting our nation's railroads in a recession? If this trend continues we might see quite a bit of shrinking in that industry and a further reduction in our vital freight rail network. Coal revenue helped offset smaller shipments that mostly broke even but kept trucks off the road, and now that is no longer possible.
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