Thursday, March 20, 2008

Spot coal prices have risen by half in last 5 months

The world price of coal on the spot market has jumped by half in the last five months, a greater increase than the much more widely reported increase in crude-oil prices, notes The Washington Post in a thorough, 2,461-word story. "Coal is suddenly in short supply and high demand worldwide," write Steven Mufson and Blaine Harden, due to "an untimely confluence of bad weather, flawed energy policies, low stockpiles and voracious growth in Asia's appetite."

"Mining companies are enjoying a windfall. Freight cars in Appalachia are brimming with coal for export," the Post reports. "While the price of coal has slipped slightly in recent weeks, many analysts and companies are wondering whether high prices are here to stay. As increasing numbers of the world's poor join the middle classes, hooking up to electricity grids and buying up more manufactured goods, demand for coal grows. World consumption of coal has grown 30 percent in the past six years, twice as much as any other energy source. About two-thirds of the fuel supplies electricity plants, and just under a third heads to industrial users, mostly steel and concrete makers. Meeting rising demand will prove difficult. To maintain its role as the world's producer of last resort, the United States will need to make major investments in mines, railways and ports."

And what about global warming? Mufson and Harden write, "If high prices last, that would raise the cost of U.S. electricity, half of which is generated by coal-fired powered plants. Expensive or not, coal is almost always dirtier to burn than are other fossil fuels. Although its use accounts for a quarter of world energy consumption, it generates 39 percent of energy-related carbon dioxide emissions. Climate-change concerns could lead to legislation in many countries imposing higher costs on those who burn coal, forcing utilities and factories to become more efficient and curtail its use. Climatologists warn that without technology to capture and store carbon dioxide emissions, burning more coal would be disastrous." (Read more)

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