Coal! Buy it now. 2012 Coal = 2003 silver!

[Horn]

That 90billion that Obama vested in green energy is probably going to start turning frothy after last nights debate,

watch it.

i'm coming back up there to collect then run to the Caymen islands with the ganar.

[Errosion Of Accord]

Since I dig the stuff for a living I suppose I'll throw in my two cents. ANR (who I work for) is laying off more than 1000 and closing eight mines. BTU in the PRB is rating their employees so they can decide who to lay off if it comes to that. The idiots running the country are effectively pulling 10% of the coal generation fleet by making it illegal to burn coal in them. Meanwhile fracked gas is selling at $3 per million Btu which is right at the tipping point of making thermal coal competitive. Speaking of the coal generation fleet many of them have to retrofit in order to keep running which makes it even more expensive to burn the cheap thermal coal. Spain and China who make a lot of steel are watching their economies either slow down or crash so who needs coking coal. Peace sell but who's buying, same goes for met coal. I watched the following site with some trepidation in 2007 because the stockpiles started building and that was a sure sign that people were using less electricity.

http://www.eia.gov/coal/news_markets/elec_stocks.cfm

Meanwhile PRB coal mines are barely making cost at $9.20 a ton

http://www.eia.gov/coal/news_markets/

Obomany doesn't like coal that damned much and has spoken out against it in the past.

I'm not horribly worried that the wife or I will lose our jobs in the near term. Hell, like you I almost threw out enough for a couple of block of ANR when it was around $5. the only thing that stopped me was that I hate to buy into a company that I work for cause if the bastards told me that my job and my paper were both worthless I might come un-hinged.

The following is out of SNL Coal Daily

In a wide-ranging newspaper interview in Charleston, W.Va., Alpha
Natural Resources Inc. Chairman and CEO Kevin Crutchfield said the
coal industry could improve if Republican presidential nominee Mitt
Romney is elected in November, but the halcyon days of Central
Appalachian coal mining are probably over, regardless of the election.
“I think under a Romney administration, the perception is that
things would probably improve around coal,” Crutchfield said in an
interview with Charleston’s The State Journal. “I think that’s probably
right. I’ve read his energy policy. I believe he does understand
the importance of coal and an all-of-the-above energy strategy not
being just a bumper sticker but something we can put into practice.
“But then again, there’s been a lot of regulations put in place that
are going to permanently alter the landscape. We can’t be fooled into
thinking that this whole thing is going to get turned on its head …
because it won’t.”
Political rhetoric such as “war on coal” is not helping the industry’s
cause, Crutchfield said.
He told the newspaper that a high-ranking official in the U.S.
House of Representatives said he wished the industry called the
most recent package of bills the War on the Consumer Act because
the price of electricity could increase without coal.
H.R. 3409, the Stop the War on Coal Act of 2012, which passed
the House on Sept. 21, would prohibit the U.S. Department of the
Interior and the EPA from enacting new restrictions on coal mining.
“It will never get to the floor in the Senate,” Crutchfield told the
newspaper. “Even if it did and was taken up, it’s already characterized
as veto material.”
Crutchfield, while stopping short of the death knell sounded
by consultant Alan Stagg at an industry conference Sept. 21, said
the outlook for Central Appalachian coal remains bleak. Alpha
announced plans Sept. 18 to lay off more than 1,000 workers, idle
mines and cut production, mostly from higher-cost CAPP mines.
Even if the EPA suddenly stopped passing regulations, Crutchfield
said, CAPP would still remain a smaller industry.
“Central Appalachia, at its peak, was mining 300 million tons per
year. It’s probably on pace this year to mine 160 million tons. It’s
almost half of what it was back in 1997,” Crutchfield said. “That’s a
function of a globally competitive marketplace and these deteriorating
mining circumstances.”

The biggest toss up items I see in the near future. What is the longevity of all these newly fracked wells? Do they peter out as fast as they started producing? Does the highly regulated slave market figure out a way to ship LNG on the quick to Europe and other places where NG is still quite expensive at $12-15 per million Btu?
I could babble about this stuff for days in this disconcerted unorganized barely readable manner so if you have any question you think I might be able to help with fire them at me.

[Errosion Of Accord]

Oh yes and if that wasn't enough it looks like another warm winter which was the right uppercut to coal in 2012

http://www.cpc.ncep.noaa.gov/product.../churchill.php

Now that coal is down it looks like this winter is going to curb stomp it.

[mamboni]

Thanks for your thoughtful and informative posts E 0f A! We shall see going forward. It seems to me that coal has been bouncing off the bottom and can go no lower. I think fracking is a bubble and will burst one day when people realize how quickly these gas wells deplete (in weeks and months, not years) and when the inevitable lawsuits over polluted groundwater get settled. On the merits, coal beats them all: it is plentiful, it is highly concentrated, and it can be burned cleanly and safely.

[Neuro]

It seems to me it would be far more economical and probably also more environmental friendly to use coal to make Diesel and Gas for fuel, than it would be to use corn to make Ethanol, or oil to make diesel/gas. So coal is now at $9 per ton while oil is at around $600 per ton (I assume about 6 Barrels a ton)... I think you can make almost as much gas/diesel out of coal as you do from oil, but the process is a bit more energy intense.

[mamboni]

It seems to me it would be far more economical and probably also more environmental friendly to use coal to make Diesel and Gas for fuel, than it would be to use corn to make Ethanol, or oil to make diesel/gas. So coal is now at $9 per ton while oil is at around $600 per ton (I assume about 6 Barrels a ton)... I think you can make almost as much gas/diesel out of coal as you do from oil, but the process is a bit more energy intense.

It occurs to you and many many others, all known as thinkers. Actually, one would have to be dumber than dirt or have a corrupt MO to oppose coal in favor of corn-to-ethanol. I'll leave it at that.

[ShortJohnSilver]

It seems to me it would be far more economical and probably also more environmental friendly to use coal to make Diesel and Gas for fuel, than it would be to use corn to make Ethanol, or oil to make diesel/gas. So coal is now at $9 per ton while oil is at around $600 per ton (I assume about 6 Barrels a ton)... I think you can make almost as much gas/diesel out of coal as you do from oil, but the process is a bit more energy intense.

Germany was doing this before WWII - probably a principal reason for them getting smacked. Coal to oil = no more using oil to control the world.

[Errosion Of Accord]

Out here where the seams are 75' to 200' thick, an outfit called Linc Energy http://www.lincenergy.com/index.php is looking into burning the coal underground. I'm a strip miner. The process we currently use and so far as I can see the only method available to humanswill only allow us to mine overburden to a dept of about 450'-500'. Economics will not let us go much deeper at this time. Physics is another problem all together;

Economically to mine deeper requires more shovels at $30m apiece and more trucks at $5m apiece. At the depth we currently dig a shovel requires 3 trucks at the lower level of the mine (on top of coal) and as many as six trucks on the top bench. That is a lot of capital and the truck tires alone run $40,000. Under acceleration the trucks consume 100 gallons a minute and about 15-20 GPM while cruising. If you add another level (otherwise known as a bench) you add another shovel and about seven more trucks. All of the mines in the PRB are digging about four benches deep, a little less than 400'. Here's a pic, can't get them to imbed for some reason.

http://www.mining-technology.com/pro...es/image_2.jpg

The physics problem essentially is about the weight of the dirt. The deeper you go the less stability you have and the dumps fall over onto the coal you just uncovered. This problem could be alleviated but environmental laws would have to change and it would add even more to the cost. Miners all over the world aren't stupid, we take the easy stuff first. That means the more coal we ship the deeper we must dig to get more product from the ground. The coal used to be so shallow that Roosevelt sent the Civilian Conservation Core here during the Great Depression to put out the surface coal fires (spontaneous combustion, lightning stikes, etc) back in the 30's. Today all of those outcrops are gone and the coal is much deeper. Going back to the truck issues, the farther you have to haul the dirt to provide dump stability the more trucks you need and the shovels on the upper benches have to move far more dirt than the shovels on the lower benches because the benches get wider at the top of the mine and are a necessity for stability plus they leave a surface for the trucks to drive on. another pic

http://www.flickr.com/photos/earthfi...57631210519800

As for me, I think I might be able to retire here. The wife is a little younger and I'm pointing her toward Linc. The reason I want her to make that move, should Linc ever go into production is because underground mining has and will continue to prove unsuccessful in this region. Linc on the other hand intends to drill holes and start a chemical reaction extracting carbon from another drill hole and processing it into a viable fuel. BTW when they call America the Saudi of coal it is because of the deposits in WY and MT. These deposits will be surface minable for another 10 - 20 years in my estimation, after that the coal will be too deep.

New estimates from Doyle Trading
Consultants LLC peg U.S. coal-fired capacity
utilization at 55.2% in 2012, down from
72.9% just five years ago, but the research
firm expects utilization to slowly build ahead
the U.S. EPA’s Mercury and Air Toxics
Standards being implemented in May 2015.
Given DTC’s 2012 thermal coal demand
estimate of 842.6 million tons, environmental
regulations and low natural gas prices
erased more than 200 million tons of thermal
coal demand.
But DTC still projects increased coal
demand through 2014. In a recent research
report, DTC said it anticipates a complete
return of Powder River Basin and Illinois
Basin coal in 2013, based on increased natural
gas prices.
DTC estimates coal demand will increase
to 891.2 million tons in 2013 and remain flat
the following year before dropping down
to 836.3 million tons in 2015. DTC does not
anticipate a complete return of Northern
Appalachian or Central Appalachian coal
DTC: Rising gas prices should boost
US coal capacity utilization ahead of MATS
in its forecast, but does not rule out a possible return if
natural gas prices sail past $5/MMBtu.
Alpha Natural Resources Inc. already cut between 13 million and
14 million tons of eastern U.S. thermal coal this year, and various
other producers have taken similar action.
“Under our scenario analysis of higher natural gas prices and a
return of high-cost Eastern bituminous coal, 2015 coal demand
would rise by 46.4 million tons, or 40.1 million tons above the 2012
level, and the capacity factor would still only be 61.6%,” DTC said in
the report. “Clearly, our analysis demonstrates significant room for
higher capacity factors from the remaining coal fleet, and thus the
potential for incremental coal demand.”
Research conducted by DTC in July shows that newly developed
U.S. coal generation, often lost amid news of plant retirements, will
generate an estimated 27 million tons of new coal demand between
2012 and 2015.
But 2015, mostly due to the implementation of MATS, seems to
signal the beginning of secular decline in the U.S. domestic industry.
Several coal industry leaders said at an industry conference Sept. 20
that the MATS rule will likely render the recently vacated Cross-State
Air Pollution Rule moot.
Indeed, DTC estimates coal-fired capacity utilization dropping to
57.8% in 2015 in addition to the dip in coal demand.
“After the implementation of MATS in May 2015, almost every
operating coal plant will have a full suite of environmental remediation,
or be working to complete installations under a sanctioned
delay,” DTC said in the report. “The installation of remediation equipment
reduces the immediate and long term available power the
plant can dispatch due to parasitic power requirements — the power
needed to run the equipment. This reduces plant heat rate simply
because the plant is unable to sell that power.”

[Errosion Of Accord]

I was just reading another article out of SNL. If you really want to hop on the bandwagon I suggest you look at Cloud Peak Energy, They were spun off of Rio Tinto a couple of years back and have not taken the beating other companies in the PRB have. They are exporting their coal over seas through Canada because Canadians are a hell of a lot smarter than the enviros in Washington and Oregon therefore it isn't an issue to ship out of there.

[Errosion Of Accord]

just a snippet.


In the face of the weak market, analysts expect coal companies to
announce more production cuts to close the year. Analysts estimate
the need to cut roughly 40 million tons of annualized production
in order to keep coal stockpiles at utilities from becoming too high
heading into winter.