Coal prices could double again

[phantom power]

All of a sudden coal, so long the Cinderella of fossil fuels, is not just in demand but in desperately short supply. A chance combination of crises in big producing and exporting countries has pushed the price of European imports to almost $140 per tonne – double the level of a year ago. But according to Gerard McCloskey, publisher of McCloskey's Coal Report, there is no quick fix to the coal crunch, and prices may still have a long way to go.

For weeks South Africa has suffered rolling blackouts caused in part by a shortage of coal, prompting the government to threaten to commandeer coal exports to solve the domestic crisis. Gripped by unusually bitter snowstorms, China has recently banned coal exports for the next two months. And in Australia, the world's largest exporter, torrential rains have hit production.

Although some of the issues are weather related, in an interview with lastoilshock.com and Global Public Media, McCloskey highlighted obstinate bottlenecks that are unlikely to be eased quickly. At Newcastle in New South Wales, for instance, port capacity is so tight that the queue of bulk carriers waiting to load coal has been known to stretch almost to Sydney – 150km to the south. In these circumstances, says McCloskey, there is no obvious ceiling for coal prices and some important markers might even double again from current levels.

Export coal prices are known as 'free on board' (FOB), meaning they exclude cost of shipping and insurance and are therefore substantially lower than import prices. The price of FOB coking coal (for steel-making) could rise from about $115 today to $210, says McCloskey. FOB steam coal (used for power stations, cement works etc), which has doubled in the past year, could jump another $30 to $150. That would inevitably put further upward pressure on import prices around the world.

http://globalpublicmedia.com/coal_prices

[Dogmudgeon]

1. Meanwhile, uranium prices are coming down -- hard

It's slightly more than half as expensive as it was at its recent peak in 2006.

Funny how we haven't heard about that lately.

--p!

[pscot]

2. Can't happen fast enough

n/t

[patch1234]

3. higher prices --> open more mines

coal is still cheaper than petroleum

[4dsc]

5. Peak coal production

Like peak oil they've gotten all the easy accessable coal and now its going to be harder to get and more expensive.. Just how much coal do you believe there is?? An infinate amount??

[patch1234]

6. hundreds of years worth ..

if not thousands

exploration for coal, has been less intense
than exploration for oil.

(I am not saying that is good or bad,
it is just the way it is)

[TheWraith]

7. It's estimated that we have about a 400 year supply of coal at current consumption rates.

...as little good as that fact may be. That's just for the US, I don't know about internationally.

[TheWraith]

4. Uh huh.

Not that I'm in any way opposed to the reduced use of coal--I think that anything else is vastly better. But a "sudden short supply" sounds suspiciously like profiteering to me.

[depakid]

8. "the queue of bulk carriers waiting to load coal."

is impressive (and not in a good way). Looking out from the kiosk at Bar Beach, they're lined up farther than the eyes (or binocs) can see.

Occasionally they come ashore... as the Pasha Bulker did off Nobby's in last winter's storm.

http://www.shipphoto.net/giff,s/grounded.pasha.bulker.jpg

There's a damn lot of coal in the Hunter Region (I have chunck of bituminous sitting on my desk that I found on the beach just south of here).



Newcastle harbor's pretty small by North American standards (it's amazing that those big ships get in at all) -and it seems to be working at capacity. Even weather permitting (it's been raining- sometimes heavily, all summer) I don't see how they're going to increase the exports rate from here.

[pscot]

9. Must be kind of awkward

loading from the beach like that. And how do they float them off once they get 'em full of coal? SNARK

[depakid]

10. The Pasha Bulker was almost a permanent resident

It was only by very good fortune that they got that thing off the sand.

http://www.abc.net.au/news/stories/2007/06/29/1965156.htm

Ironically, some have speculated that climate change was behind the huge storms that pushed it ashore- and caused historic floods throughout the region.

(This being Oz, I never curse the rain, but it's nicer when it doesn't fall all at once).

[Javaman]

11. Our home energy rate just went up...

however, by nothing but shear luck, I opted into the wind power program here in Austin. Locks me into a flat kilowatt charge for 15 years with no change.

I saw about a 20 dollar raise in my monthly bill, but given the fact that all fossil fuel is going to rise, I thought it a very small price to pay, especially in about 3 years when energy rates really start going up.