USA
The U.S. Supreme Court agreed to consider reviving an Environmental Protection Agency rule that would curb emissions from coal-fired power plants, in a clash over the Obama administration’s biggest air-quality effort.
A federal appeals court threw out the cross-state air pollution rule last year, saying the EPA had gone beyond its powers under federal law. That decision was a victory for coal companies and utilities, which called the measure one of the costliest ever issued under the Clean Air Act.
Book review in the Economist: The Power Surge. By Michael Levi.
Mr Levi’s thesis has an unusual twist. Rather than accepting that shale enthusiasts and environmentalists will never see eye to eye, he reckons both sides should work together. He suggests that environmentalists should help improve the way gas is extracted rather than attempt to block it. As for the gas brigade, he proposes that they work with the greens in a broad alliance that presses for environmental legislation to boost gas demand at the expense of coal (which is far dirtier).
This kind of pragmatic cooperation to achieve a greater good sounds reasonable -- if you've never met a human being before. Cooperation undermines a foundation of political organization: contempt for thine opponent as a source of passion. And allowing environmentalists to influence the technical process of extraction threatens profitability.
It’s part of a push by the nation’s coal industry, hobbled by plummeting demand as Americans turn to cleaner natural gas, to vastly expand what it sends to Asia and Europe. But the aggressive effort to rescue the $40 billion industry is running into fierce opposition from environmental groups, who say pollution caused by burning coal should not be exported to other countries.
The Army Corporation of Engineers said that it won’t consider climate change or other big picture issues when it reviews the environmental impacts of proposed coal export terminals.
Asian Oversupply Leads to 31% Drop in April and Fears of Lower U.S. Profits. The export spigot for coal is beginning to close.
In a troubling sign for U.S. coal producers, shipments fell 31% in April from the prior month, driven largely by an oversupply in Asia for metallurgical coal used in steelmaking. U.S. producers are now at a further disadvantage to overseas competitors because weakening metallurgical-coal prices are making high-cost U.S. production less profitable for export.
China Plan Puts High-Sulfur Coal From U.S. at Risk, XCoal Says Bloomberg Fitri Wulandari Jun 13
China’s plan to ban imports of power-station coal with relatively low heating value and high sulfur content may cut shipments of U.S. coal into the country, an American executive said.
PRB coal can still be exported if this plan goes through (low-sulfur and CV above the minimum).
U.S. coal exports have made steady inroads into the Asian market since 2007. Almost all the U.S. coal exported to Asia went to the world's top four coal importers: China, Japan, India, and South Korea. Asia's share of total U.S. coal exports increased from 2% in 2007 to 25% in 2012. While U.S. coal has also been gaining market share in Asia, it provided less than 4% of Asia's coal imports in 2012, and less than 1% of total coal consumed by the four large Asian importers.
Picking pockets. . .
U.S. loses millions on coal leases, inspector general report says - Los Angeles Times June 14th
The study found that since 1991, nearly all the lease sales had only one bidder, and that companies offered to buy the coal rights to public land at cut-rate prices.
US coal sold too low, taxpayers lose millions -government watchdog Reuters June 14th
Federal officials have often used a low benchmark price for determining the value of coal when a higher price was more fitting, the report concludes. Such an error in finding a fair market value (FMV) can add up to large sums when such large blocks of coal are auctioned, the report finds.
US losing money on coal leases: report Mining.com June 14th
A Boston group called the Institute for Energy Economic and Financial Analysis releases a report in June 2012 which estimated below-market-value coal leasing prices had lost US taxpayers about $29 billion during the previous 30 years.
History lesson:
L.A. Weighs Costly Exit From Coal Terminal (this is an article from 2003, after tens years of losses at the LA coal terminal)
Harbor Department General Manager Larry Keller said a slump in the coal export market has prevented the terminal from ever generating cash above operating expenses.
The facility has been hurt by the emergence of China as a major coal exporter, a strong U.S. coal demand, disruptions in U.S. coal supplies and a decline in export prices for coal in the Pacific Rim from $40 per metric ton to $30, with some spot prices as low as $23, Keller said.
The terminal "has determined that it cannot compete economically at these prices and sees no demand for the U.S. to export coal in the foreseeable future," Keller said in a report to the City Council.
Because of the slump, the terminal has stopped handling coal and owes the Harbor Department more than $11 million in back rent for the land.
JAPAN
Japan's Tokyo Electric Power Company is expected to settle its July 2013-June 2014 term contract to buy thermal coal from Australian miners at a floating price linked to the globalCOAL Newcastle index, a Japanese utility source said Monday.
AUSTRALIA
Rio, Glencore coal deal to create regional giant BY:MATT CHAMBERS From: The Australian June 13, 2013 12:00AM
RIO Tinto could merge some Australian operations with those of fellow mining giant Glencore-Xstrata in a cost-saving move that would have the potential to create a regionally dominant Hunter Valley coal giant.
Australia's Nathan Tinkler has handed his stake in Whitehaven Coal Ltd to lenders to pay off most of a $634 million debt, in a deal that may eventually put one of the country's biggest independent coal miners into play.
Also this:
"He put his thoroughbred racing and stud empire up for sale, and his private helicopter has been seized by creditors."
What is it with Australia's mining tycoons? Kerry Packer & Rupert Murdoch seem like bolsheviks compared to the new moguls. Gina Rinehart, the world's richest woman, sees herself as some sort of Randian prime mover, thinks the minimum wage should be $2, and sued her children; Nathan Tinkler got his the only respectable way: leverage & dumb luck.
Chinese coals bosses can show the Aussies how to do it without moralizing: Coal bosses’ extravagant and wasteful lives — Hummer + buildings + pretty girls! Apparently for Chinese coal bosses “being warm and well fed leads to wanton lust” and renal failure. Dangerous business.
The UK’s BG Group and Australian groups Origin Energy and Santos are spending A$60bn (US$57bn) on three separate ventures near the port town of Gladstone to convert coal seam gas into LNG for export to high-paying customers in Japan and South Korea.
The Gladstone projects will help Australia overtake Qatar as the world’s biggest LNG exporter by the end of this decade.
The Climate Commission says fossil fuel reserves should be kept underground to avoid global warming. Source: AAP
IMAGINE a world without coal, one where mining companies didn't dig up fossil fuels but instead kept them in the ground where they couldn't be burned.
It's a challenging concept, but one Australia's climate change experts say we must come to terms with - fast - if we're to have any chance of avoiding the most dangerous consequences of an overheated atmosphere.
Australian unions start week of nightly strikes at PWCS coal terminals Perth (Platts)--21Jun 2013
Unionized workers at Australia's Port Waratah Coal Services terminals at Newcastle port are planning four-hour strikes every night through Wednesday to extend protests they started in mid-May over working terms, union and company sources said late Thursday.
RUSSIA
Russia to export more coal to Asia Pacific June 16, 2013 Vladimir Kobzev, exclusively for RBTH Asia
Russia intends to upgrade its port and railway infrastructure in the Far East in order to boost coal exports to Asia.
Russian tycoon to supply coal to China - Report
The framework agreement was signed in late March during a visit to Moscow by the Chinese leader, Mr Xi Jinping. En+ and Shenhua will undertake joint projects in coal exploration, mining and processing. However, they will also build roads and railways, power plants and sea terminals in Eastern Siberia and the Russian Far East. China Development Bank is expected to provide the financing.
Foreign investors, wary of endemic corruption and an expanding government role in the economy, are hanging back, depriving the economy of essential capital.
MONGOLIA
Mongolia coking coal mine troubles mount - FT -Leslie Hook in Beijing
A giant Mongolian coking coal mine has halted coal sales and delayed its planned public listing after it was forced to fund cash handouts to the electorate, a sign of growing troubles at the project that was supposed to be a flagship for Mongolian development. . . The problems of Tavan Tolgoi, the state-owned mine, highlight the challenges for resource-rich Mongolia as the country seeks to develop its vast deposits of copper, coal, gold and silver. Mongolia’s $10bn economy grew more than 10 per cent last year and is forecast to be the world’s second-fastest growing this year, primarily because of mining developments.
CHINA
China coal import ban sparks industry battle - FT - By Leslie Hook in Beijing June 12
Two of China’s most powerful energy lobbies are at loggerheads over a controversial proposal to ban imports of low quality coal which, if implemented, could radically reshape the global coal trade. At stake, claims the coal mining industry, are thousands of jobs and the future of one of China’s largest industries which has already seen at least 10 per cent of its coal mines shut down in the last year.
Responding to concerns within the industry, the National Energy Administration in May proposed to ban imports of low quality coal, which refers to coal with low heat value. Roughly one-fifth of China’s coal imports – or 50m tonnes per year – would be banned under the current proposal, which has yet to be formally adopted.However China’s power producers, which generate more than 70 per cent of their electricity from burning coal, are lobbying hard to get the proposal scrapped out of fears it would raise their costs.
A recent report in the People’s Daily that Beijing city will eliminate all large scale coal boilers within the city center by 2015 is another sign of the shifting winds in global commodity and asset markets. The move is certainly a self interested one on the part of China’s new leaders, who breathe the same filthy air as the proletariat when they leave the carefully filtered confines of their private compound in Zhongnanhai.
But a recent report by Wall Street colossus Goldman Sachs says this will be a transformational year for China, with its seaborne coal imports dropping for the first time since the global financial crisis of 2007 and 2008 and continuing to decline in the coming years. China’s own coal production has spiked, Goldman Sachs said, along with investment in Chinese railroads to move its coal.
China's influence on global thermal coal market to shrink: Deutsche Bank PLATTS Hunan, China 21Jun2013
China will no longer be the strong driver of the international thermalcoal market that it has been in the past three years, Deutsche Bank saidFriday in a report.
Using annualized year-to-date figures, Deutsche Bank said China's 2013 coal imports would grow by no more than 25% from 2012, compared with 44% inthe preceding three years. The country's total net imports are on track to reach 246 million mt in 2013, down from 280 million mt in 2012, Deutsche Bank said. It used data fromJanuary through April for the estimate.
China Sets New Rules Aimed at Curbing Air Pollution; New York Times, KEITH BRADSHER; Published: June 15, 2013
China’s cabinet has adopted 10 measures to improve air quality in the latest move aimed at responding to the dense smog that has repeatedly enveloped Beijing and other major Chinese cities in recent years.
First, perhaps the most important sentence in the announcement – that was not mentioned in the Xinhua or Reuters stories – is this one: “加强人口密集地区和重点大城市PM2.5治理，构建对各省（
This is a big deal, because it indicates for the first time that local leaders in China will be on the hook not just for vague, game-able targets like total emissions reductions, but actual improvements in measured ambient air quality. This would be similar to the US’ system of State Implementation Plans (SIPs). I predict this will have major implications by forcing provinces and cities to start doing real air quality planning in which they close the loop between emissions control measures and the air quality people are actually breathing.
Consumption of fossil fuel is biggest culprit behind early deaths and chronic diseases like asthma
Air pollution from 196 coal-fired power stations in Beijing, Tianjin and Hebei caused 9,900 premature deaths in 2011, with the province, a big coal consumer, deserving most of the blame, according to a new study.
SINGAPORE/EDINBURGH/HOUSTON, 4th June 2013 – Wood Mackenzie's report titled 'China: The Illusion of Peak Coal' says that despite efforts to limit coal consumption and seek alternative fuel options, China's strong appetite for thermal coal will lead to a doubling of demand by 2030. China’s demand will grow to approximately seven billion tonnes per annum (btpa) of thermal coal which is contrary to speculation that China's thermal coal demand may be reaching a peak in the next decade.
“Despite efforts to limit coal consumption and seek alternative fuel options, China’s strong appetite for thermal coal will lead to a doubling of demand by 2030,” the report concludes. Coal consumption in China, bolstered by a period of rampant construction of coal-fired plants that has only recently slowed, must rise to feed China’s explosive demand for power, which will nearly triple to 15,000 TWh by 2030.
WoodMackenzie has been the most bullish on export coal and China demand - their coal research arm was purchased a few years ago and is a dedicated coal group; they spins a different tale than other researchers who have large oil and gas clients.
As Beijing air pollution worsens, some American expats clear out June 20, 2013|By Don Lee, Los Angeles Times
Business opportunities abound in China, but some U.S. executives working in the capital say the health of their families is more important. BEIJING — After nearly two decades in Beijing, David Wolf knew it was time for a change when his 11-year-old son, Aaron, somberly asked him, "Dad, when you were growing up, did you ever have PE outdoors?"
International climate-change diplomats, who have had a rough decade, got some potentially exciting news in May when reports emerged that China will consider an absolute cap on carbon emissions in advance of the climate talks scheduled in Paris for 2015.4
IT COULD just be the breakthrough the world has been waiting for. After years of prevarication, China now reportedly wants to ensure its carbon dioxide emissions peak, perhaps as early as 2025 (see "China moots reaching emissions peak by 2025"). With US emissions also peaking, due largely to growing use of shale gas, the world's two biggest polluters may finally be committed to action – action made even more timely by recent studies that have eliminated some of the scarier climate scenarios, creating a window of opportunity.
China's Coal Import Policy Will Injure Smaller Mines in Indonesia - Financial Times
The planned restriction will affect several hundred small scale miners in Indonesia most severely, according to Xavier Jean analyst at S&P in Singapore.
Indonesia’s coal exports have anchored a multi-year growth spurt, but the party may be over. Prices for thermal coal recently touched a three-year low of below $90/ton, a far cry from their post-2008 rebound on the back of demand from China and India. At this price, some producers are digging coal at a loss. In addition to soft global prices, Indonesian miners face two regulatory threats. The first is China’s proposed import ban on low-quality coal, which Chinese utilities are resisting but which has the support of domestic producers. Around one-fifth of annual imports, or 50m tons, would be banned, the FT reports.
Two bonus China "stories of the week":
"We want fairness. There is no fairness if you do not let us cheat." - the gaokao, or national college admission exam
"By late afternoon, the invigilators were trapped in a set of school offices, as groups of students pelted the windows with rocks. Outside, an angry mob of more than 2,000 people had gathered to vent its rage, smashing cars and chanting: "We want fairness. There is no fairness if you do not let us cheat."
And this big NYTimes article on Li Keqiang's chengzhenhua policy which will increase the rate at which the GDP / energy ratio increases (that's second derivative; or, if you must, an increase in the rate of change of the rate of change). Just look at that dip in the 2001-2006 time period -- a stark decrease in energy efficiency measured as fraction of GDP; that happened at the same time that GDP was growing 10%+ and a dip like that is hard to imagine, everyone says that's what happens when you make a bunch of steel and cement . . . of course the buildings will still have to be rebuilt in 15 years because they are made of toufu. Did you know China's GDP numbers are not adjusted for asset depreciation, as they are everywhere else?