Am I the only one that notices an inverse relationship between the amount of smoke we blow up our asses about our marvellous growth and progress, and the perception that we seem to be moving backwards faster and faster by the day?
Cheap coal comes at a price
Now that the price of coal is at a historic low relative to oil, there's no stopping consumers and producers alike from embracing Al Gore's nightmare. A ton of US coal is so cheap at about US$47 that European utilities will pay $50 to ship it across the Atlantic, according to Galbraith's, a 263-year-old London shipbroker. While oil and coal cost the same as recently as 1998, West Texas Intermediate crude is five times more expensive. Peabody Energy, Consol Energy and Arch Coal, the three biggest US coal companies, forecast the largest increase in exports in 20 years, degrading the call for a moratorium on coal plants by former US vp and this year's Nobel Peace Prize winner Al Gore. Coal use worldwide has grown 27% since 2002, three times faster than crude, said BP. US East Coast coal has risen 71%, while oil tripled on the New York Mercantile Exchange. "Coal is by far the cheapest fuel because there's no price on how much damage it causes," said John Holdren, a Harvard University professor of environmental science and director of the Woods Hole Research Center in Falmouth, MA. "Unless you get policies to put a price on carbon dioxide and other emissions, no other plants can compete." US coal prices are equal to $1.98 for each million British thermal units of energy, compared with $12.51 for fuel oil and $6.91 for natural gas, data compiled by Bloomberg show. A million British thermal units is the equivalent of eight gallons of gasoline. "There is a huge advantage with coal, and this will continue indefinitely," said Gianfilippo Mancini, the head of fuel purchasing for Enel, Italy's largest power company, which is spending $5.8-billion to convert oil-fed plants to run on coal. US coal exports to Europe for the first nine months of this year were 11.4 million tons, up 15% from the same period
in 2006, according to the US Energy Department.
But what is the environmental price of coal? It generates 41% of the world's man-made carbon dioxide emissions, blamed for the warming of the Earth's climate, Gulf of Mexico hurricanes and rising sea levels. And the rush to produce and use more coal continues. Pittsburgh-based Consol will open its largest metallurgical coal mine by Jan. 1, with as much as five million tons of annual production available to overseas buyers. More than 1,000 coal-fed power plants will be built in the next five
years, mostly in China and India, according to the US Department of Energy. Meanwhile, new cleaner-burning technologies for coal, such as one that converts the fuel to a synthetic gas, have been delayed or rejected as too costly. However, there are some cracks appearing in the coal success story - financing new North American coal plants may become more difficult as environmental groups step up efforts against lenders including Citigroup and Bank of America. But the bigger environmental
battle is overseas where US coal exports have increased 37% this year and will continue to climb because of record global demand and a weaker dollar.
(National Post 071106)