Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Coal prices could double again (audio)
David Strahan, Global Public Media
All of a sudden coal, so long the Cinderella of fossil fuels, is not just in demand but in desperately short supply. A chance combination of crises in big producing and exporting countries has pushed the price of European imports to almost $140 per tonne – double the level of a year ago. But according to Gerard McCloskey, publisher of McCloskey’s Coal Report, there is no quick fix to the coal crunch, and prices may still have a long way to go.
For weeks South Africa has suffered rolling blackouts caused in part by a shortage of coal, prompting the government to threaten to commandeer coal exports to solve the domestic crisis. Gripped by unusually bitter snowstorms, China has recently banned coal exports for the next two months. And in Australia, the world’s largest exporter, torrential rains have hit production.
Although some of the issues are weather related, in an interview with lastoilshock.com and Global Public Media, McCloskey highlighted obstinate bottlenecks that are unlikely to be eased quickly. At Newcastle in New South Wales, for instance, port capacity is so tight that the queue of bulk carriers waiting to load coal has been known to stretch almost to Sydney – 150km to the south. In these circumstances, says McCloskey, there is no obvious ceiling for coal prices and some important markers might even double again from current levels.
Export coal prices are known as ‘free on board’ (FOB), meaning they exclude cost of shipping and insurance and are therefore substantially lower than import prices. The price of FOB coking coal (for steel-making) could rise from about $115 today to $210, says McCloskey. FOB steam coal (used for power stations, cement works etc), which has doubled in the past year, could jump another $30 to $150. That would inevitably put further upward pressure on import prices around the world.
Although the immediate causes of the coal market chaos are above ground – weather, mining and transport capacity – there is a small but growing body of opinion that coal production could reach its geological limits much sooner than commonly expected. See ‘The great coal hole’ , at lastoilshock.com.
(31 January 2008)
U.S. scraps ambitious clean-coal power plant
Mark Clayton, Christian Science Monitor
Citing high costs of FutureGen, the Energy Department funds less ambitious projects.
—
Prospects for nearly emissions-free coal power in the United States have dimmed in the wake of the US Department of Energy’s decision to pull the plug on a “clean coal” demonstration plant called FutureGen, observers say.
Instead of the $1.76 billion project, which was expected to capture and store underground 90 percent of its greenhouse-gas emissions, the Energy Department is budgeting $241 million for several commercial power-plant projects that will capture and store a smaller share of their emissions. Federal officials called it a money-saving move.
“This restructured FutureGen approach is an all-around better investment for Americans,” Samuel W. Bodman, secretary of Energy, said in a statement. The smaller projects will still show that at least 1 million tons of carbon dioxide emissions can be captured annually for underground storage, he added.
While the new projects will together sequester more carbon emissions than FutureGen by itself, and could be valuable demonstrations in a commercial setting, some observers questioned the wisdom of backing off FutureGen just as it was about to get going.
(1 February 2008)
Energy firm wants carbon freedom at new coal-fired plant
John Vidal, Guardian
The government is expected to approve the building of a coal-fired power station without insisting that it tries to reduce its climate change emissions, according to emails seen by the Guardian.
The correspondence, released under freedom of information legislation, apparently shows that civil servants caved in last month to pressure from German energy company Eon and agreed not to require “carbon capture and storage” technology as a condition for approval of the new Kingsnorth power station on the Medway estuary in Kent.
The technology, which is still in development, could reduce carbon emissions from the power station by up to 90%. It will be one of the country’s largest emitters of the main greenhouse gas.
However, emails between Eon and an official in the Department of Business, Enterprise and Regulatory Reform suggest that the company is confident that the secretary of state, John Hutton, will formally approve the 1600MW plant in May without it having to make assurances over carbon capture.
(1 February 2008)
