Thursday, August 11, 2011

Coal Losing Steam?



Even King Coal isn’t adverse to the effects of the dismal economy. U.S. stock prices for the energy behemoth have been down 30% in just three weeks. Coal isn’t just losing market stability, it may be losing market share to natural gas, which is impeding the demand for coal nationwide.

According to the Energy Information Administration, natural gas and other factors pushed the share of electricity generated by coal to the lowest level in 30 years.  

The Wall Street Journal said that analysts expect a permanent shift toward natural gas, which is not without its problems. Coal fueled 46% of the national electricity in the first quarter of the year, which is down six points since 2008. These numbers may be in decline, but the overall amount of coal mined is still expected to be around 1 billion tons. 

Coal is trying to curb this downfall with the consolidation of three companies and through exports. Though mostly from Australia, China imports reached 17 million tons in July, and consumption in that month was up 19%.

In a win for regulators, rules restricting impacts to streams from mining have also put pressure on the industry. If regulations increase or remain at acceptable standards, and with a push toward renewable energy, coal just may become a thing of the past, or reserved for the naughty during holidays. 

By Peter Browning

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