CHINA
Coal Splutters as China Seeks Breath of Fresh Air - MoneyBeat - WSJ There is already too much coal on the market, so China's decision to cut down its "energy intensity" will hurt miners. Australia has said it will scale back production. Australian thermal coal destined for Asia is near its lowest price since 2009, with Goldman Sachs suggesting a target of $83 a ton for 2014. And not only does China plan to buy less, it also wants to shop locally. China has trillions of tons of coal reserves that it could exploit.
China's rail shipments of coal up 10.7 percent in Aug On September 22, China's National Development and Reform Commission (NDRC) announced that in August this year China's coal shipments by railway totaled 190 million mt, up 18.27 million mt or 10.7 percent year on year. In the January-August period, China's rail shipments of coal amounted to 1.514 billion mt, up 4.16 million mt or 0.3 percent year on year. In particular, China's rail shipments of thermal coal in August alone and in the January-August period in the current year amounted to 132 million mt and 1.059 billion mt, up 9.7 percent and down 1.4 percent, respectively, both on year-on-year basis.
Worst polluting Chinese cities to be named and shamed each month | South China Morning Post The central government set its first provincial-level coal-reduction targets yesterday in a bid to clean up its air, as a foreign car executive said his mainland counterparts could do more to reduce emissions. The industrial region surrounding Beijing will be required to make cuts in its coal use and phase out the dirtiest industries under new, more detailed air pollution targets released yesterday by the Ministry of Environmental Protection. Four northern areas - Beijing, Tianjin , Hebei and Shandong - have been asked to cut teir annual coal consumption by a total of 83 million tonnes by 2017, according to an official document. The four areas currently use a combined 670 million tonnes of coal annually.
CNPC conducts trial LNG shipment to Tibet via rail - Interfax China National Petroleum Corp. has successfully transported an LNG shipment along a section of rail from Qinghai to Tibet, the state-run parent of PetroChina said on Sunday.
Wood Mackenzie sees Russian energy focus shifting to China - UPI.com Wood Mackenzie, a global energy research company, published a report Thursday on Russia's "pivot" to energy-hungry China. "As legacy West Siberian oil production declines, Russia is undergoing a period of renewed interest in exploring and developing the energy resources of its Far East and East Siberia regions," Ian Thom, director of the company's Russian research division, said in a statement Thursday. "These key provinces are sparsely populated, highly resource rich and adjacent to a large and resource-hungry Chinese population, and their development is a major priority for the Russian government."
China's Synthetic Natural Gas Plants Could Accelerate Climate Change - Businessweek Moreover, the scarcely populated hinterland regions earmarked for the SNG plants are dry, while converting coal to gas is a water-intensive process. "The water consumption for [synthetic natural gas] production could worsen water shortages in areas already under significant water stress," write Yang and Jackson. "Overall, the large-scale deployment of SNG will dramatically increase water use, [greenhouse gas] emissions, and additional air and water pollution.
China Faces Steep Climb to Exploit Its Shale Riches - NYTimes.com Several factors stand in the way of shale development. Most of China's shale deposits lie in the earthquake-prone and mountainous southwest or the remote arid deserts of the far west. ...The gas deposits are also deeper — often 4 kilometers, or 13,000 feet, below the surface, compared with 2 to 4 kilometers in the United States. ...According to the E.I.A., the first horizontal shale well drilled by PetroChina, the Chinese oil and gas firm that has been exploring shale most aggressively, took 11 months to drill compared with the usual two weeks in North America.The rough terrain, lack of paved roads and need to drill deeper "will require additional investment and higher upfront costs," says Fei Kwok, ....Unlike the deserts where much of China's shale deposits are located, the Sichuan basin has ample supplies of the water needed for the hydraulic fracturing process, better known as fracking, that unlocks the gas deep underground in the rock. ...Still, Mr. Beveridge believes that the biggest risk to shale gas development may be conflict over water.
China Gains New Friends in Its Quest for Energy - NYTimes.com On the northern reaches of the Caspian Sea, not far from this old Soviet town known for its oil and sturgeon, lies a vast new oil find, the biggest outside the Middle East. China was rebuffed when it asked for a stake 10 years ago. But when the pumps finally started this month , the China National Petroleum Corporation had won a share in the project, known as Kashagan, and President Xi Jinping was in the region recently to celebrate, another indication that China's influence has eclipsed even Russia's across the former Soviet republics of Central Asia. ...
China's ENN Group eyes investments in Canadian LNG - Natural Gas | Platts News Article & Story Chinese energy firm ENN Group has started "preliminary" talks with Canadian LNG companies to invest in proposed greenfield gas liquefaction and export facilities in British Columbia, the company's international legal director Dong Ren said Tuesday. The group will primarily focus on acquiring an equity stake in the upstream and midstream sectors of an LNG project as well as enter into long-term offtake deals, she said in an interview on the sidelines of the Canada LNG Export Forum, hosted by the DMG Group. "We have identified some companies that are investing in LNG facilities and are in talks with them," she said, without identifying any firms. "Our talks now are focused on the percentage of equity stake, pricing of the equity stake and related commercial elements."...In late-2010, ENN signed a memorandum of understanding with the US' Cheniere to buy 1.5 million mt/year of LNG from the latter's Sabine Pass facility in Louisiana. But, there were no further developments. ...Five major LNG projects are planned for in British Columbia along the Canadian Pacific Coast. They are: Kitimat LNG, backed by Chevron and Apache; the Shell-led LNG Canada; WCC LNG by ExxonMobil and Imperial Oil; Petronas-backed Pacific Northwest LNG; and Prince Rupert LNG led by BG Group.
INDONESIA
Indonesia Weighs Limit on Coal-Export Terminals, Official Says - Bloomberg Indonesia may restrict the number of terminals allowed to export coal as it seeks to control shipments and boost revenue. "Coal can currently be exported from any loading point,which makes it difficult for us to control," Edi Prasodjo, the coal director at the Energy and Mineral Resources Ministry, said in an interview at an industry meeting in Bali today."We're discussing restricting exports in the future to certain ports or shipping points to avoid illegal deliveries."
UK banks financing coal boom destroying Borneo rainforests | The Economic Voice The top 5 UK banks (HSBC, Barclays, Standard Chartered, RBS and Lloyds) are complicit in fuelling climate change and destroying communities and the environment in the rainforests of Indonesian Borneo through their financing of an Indonesian coal boom, according to a new report released today (see video below).
UK-financed coal mining is devastating Indonesian Borneo - Campaigning - The Ecologist 83 per cent of coal produced in Indonesia's top coal mining province, East Kalimantan, is mined by companies part-financed by UK banks. The top 5 banks, HSBC, Barclays, Standard Chartered, RBS and Lloyds, are all involved in bankrolling the coal boom. The indigenous Dayak people of Kalimantan, who in recent decades have seen industrial logging seriously deplete the forests they rely on, are now confronting destruction on a much greater scale. Many have had to leave their homes to make way for coal mines, particularly in East Kalimantan where Indonesian company Bumi Resources runs a mining project with concessions covering 90,000 hectares. One Dayak community, Segading, has been displaced three times by the mines, and the local leader, Gagay, says his people are fighting against attempts to force them to move yet again. Open pit coal mining is a far cry from the deep underground mines we associate with the industry in the UK. Bumi Resources' mines have required the clearing of large areas of forest, with hillsides being cut open to expose layers of coal and earth. Once an area has been mined, the company moves on, leaving open scars and tailing ponds full of toxic waste.
AUSTRALIA
Chinese Demand for Coal Easing - WSJ.com ...Producers of thermal coal are scaling back plans, particularly in Australia, which is second only to Indonesia in thermal coal exports. A proposal to double capacity at Newcastle port, the world's largest coal export facility, has been shelved. Analysts predict that many new mines may become unviable, and that the most expensive existing mines will be forced to cut back or close. Smaller Australian miners will find it increasingly difficult to finance projects, while large, diversified resources companies are likely to shift their focus toward more attractive commodities. ...Global coal consumption could grow as little as 2% a year through 2017 in the face of weakening Chinese demand, according to the International Energy Agency's most recent coal-market report. Long-term estimates for Chinese coal demand, for the year 2035, range from 3.66 billion tons of coal equivalent, up from 2.29 billion tons in 2010, to as low as 1.51 billion tons, depending on Beijing's environmental policies. Further darkening the picture for international producers, most of the coal that Chinese utilities are likely to buy in the future will be local. That's because the country sits on trillions of tons of coal reserves, so domestic mines should meet most of China's demand for thermal coal as long as prices remain low and transportation costs affordable, says a Beijing-based coal trader who declined to be named. As a result, UBS expects Chinese coal imports to decline steadily.
S. KOREA
'50 dirtiest' US power plants emit more greenhouse gases than South Korea - CSMonitor.com A new study by an environmental group suggests that reining in a handful of America's coal-fired power plants would have a major impact on greenhouse gas emissions. The study by Environment America paints a bulls-eye on the nation's biggest coal-fired power plants, suggesting that reining in a relatively small share of America's 6,000 electric generating facilities could have a significant impact on greenhouse gas emissions. The report comes as the Obama administration is preparing the nation's first-ever greenhouse gas emissions regulations for US power plants, which could be released as soon as this month. The administration's goal is to have power plant emissions regulations in place by 2015, and the new study provides a window into which plants could face steep federal fines unless they slash emissions or close.
JAPAN
ASIA THERMAL COAL: Newcastle spot prices jump as contract talks start in Japan - Coal | Platts News Article & Story A rapid rise in screen-traded Newcastle thermal coal prices overnight to $80/mt FOB got the Asian market talking Thursday, with some participants drawing a link between the higher prices and the start of discussions in Japan for October 1 yearlong supply contracts for Australian thermal coal. The price increase caught some Asian market participants by surprise, as they had not observed any significant changes in the Asian seaborne market that could drive Newcastle 6,300 kcal/kg gross-as-received basis prices higher, sources said. Japan's only functioning nuclear reactor at the Ooi power plant went offline last weekend for maintenance, but market sources did not consider it significant for Japanese thermal coal demand.
J-Power Plans to Start Japan Coal-Price Index to Cut Fuel Cost - Bloomberg Electric Power Development Co. (9513) ,Japan 's largest thermal coal buyer, wants to start a local coal-price index that includes freight and insurance as it seeks toreduce fuel costs. The power wholesaler, known as J-Power, and at least onecounterparty started a system that matches bids and offers toset a monthly price for Australian coal delivered to Japan,Atsushi Yoshida, the director of the company's energy businessdepartment, said in an interview today in Tokyo.
US
Coal Giant's Financials Reveal Export Weakness It's not unusual for commodities-based industries to use hedging as a kind of insurance against losses. But if you subtract the money Cloud Peak made from betting coal prices would fall, they earned only $200,000 exporting coal between April and the end of June. Williams-Derry says with prices expected to remain well below the highs that triggered the export terminal proposals in the first place, that window of opportunity may be closing.
The Local Election That Could Determine The Future Of American Coal - Think Progress The seven-member Whatcom County Council that will be elected next month will decide by majority vote whether to approve what is called a shoreline permit for the proposed export terminal. Four 'no' votes, and it's a goner. "It's a kill strategy: win and be done with it," said Brendon Cechovic, executive director of Washington Conservation Voters. But it's not an all or nothing strategy; if terminal opponents lose they have other opportunities, including the state commissioner of public lands' decision on whether to grant a marine permit and Gov. Jay Inslee's decision regarding clean water permits.
Exports Dip, But Coal Remains King Coal's dismal domestic outlook due to slumping coal export markets and increased environmental regulations from the Obama Administration resulted in no bids at a recent lease sale on federal coal land in Wyoming—the first time ever that no bids were received. In August, Cloud Peak Energy surprised many by not bidding to develop 145 million tons of federal coal adjacent to its Cordero Rojo site in Wyoming. According to Rick Curtsinger, a Cloud Peak spokesman, the decision not to bid on the coal reflected concerns about the ability to profitably mine the coal for sale to U.S. power producers, which would be the primary market for Wyoming coal. The company is telling us that because of coal's poor domestic outlook, it chose not to bid. The Obama Administration's "war on coal" through over regulation is having some unpleasant effects, which in addition to lost job opportunities, is reduced revenue from coal lease sales, which means less money for the U.S. Treasury and the states.