Tag Archives: Coal

“That’s Something China Can’t Tolerate”: Tensions Erupt As China Slams Australia’s “Irresponsible Comments”, by Tyler Durden

Many nations commercial relationships with China are so extensive that China can throw its weight around. From Tyler Durden at zerohedge.com:

It all started in late February when we reported that a political row had erupted between China and Australia, with Beijing cracking down on imports of coal from Australia, cutting off the country’s miners from their biggest export market and threatening the island nation’s economy at a time when it and its fellow “Five Eyes” members who have sided with the US by blocking or banning Huawei’s 5G network technology.

In the weeks that followed, while Beijing disputed such a draconian export crackdown, China was overtly targeting Australian coal imports with increased restrictions – what Beijing claims were quality checks – that delayed their passage through northern ports. Given Australia has the highest level of income dependency on China of any developed nation as 30.6% of all Australian export income came from China last year, equivalent to US$87 billion (twice the trade volume with Japan, Australia’s next biggest trading partner), and Australia’s coal industry is deeply dependent on its exports to China, which account for 3.7% of Australia’s GDP, this prompted much speculation that Beijing is punishing coal companies as retribution for political acts by Canberra, one of Washington’s closest allies. “The last time Australia was so dependent on one country for its income was in the 1950s when it was a client state of Britain,” Sydney Morning Herald’s international editor, Peter Hartcher Hartcher said in March, according to the SCMP.

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Will Paris Riots Scuttle Climate Accord? by Patrick J. Buchanan

Environmentalism is great until somebody has to pay for it. From Patrick J. Buchanan at buchanan.org:

In Katowice, Poland, all the signers of the 2015 Paris climate accord are gathered to assess how the world’s nations are meeting their goals to cut carbon emissions.

Certainly, the communications strategy in the run-up was impressive.

In October came that apocalyptic U.N. report warning that the world is warming faster than we thought and the disasters coming sooner than we thought.

What disasters? More and worse hurricanes, uncontrollable fires, floods, the erosion of coastlines, typhoons, drought, tsunamis, the sinking of islands into the sea.

In November, a scientific report issued by 13 U.S. agencies warned that if greater measures are not taken to reduce global warming, the damage could knock 10 percent off the size of the U.S. economy by century’s end.

At the G-20 meeting in Buenos Aires, 19 of the attending nations recommitted to the Paris accord. Only President Trump’s America did not.

Yet, though confidence may abound in Katowice that the world will meet the goals set down in Paris in 2015, the global environmentalists seem to be losing momentum and losing ground.

Consider what happened this weekend in France.

Saturday, rage over a fuel tax President Emmanuel Macron has proposed to cut carbon emissions brought mobs into the heart of Paris, where they battled police, burned cars, looted, smashed show windows of elite stores such as Dior and Chanel, and desecrated the Arc de Triomphe.

In solidarity with the Paris rioters, protests in other French cities erupted.

Virulently anti-elite, the protesters say they cannot make ends meet with the present burdens on the working and middle class.

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This Chart Shows the Collapse of “King Coal” by State, and Why Miners Are Going Bankrupt, by Wolf Richter

A good analysis of the factors behind the demise of the US coal industry. From Wolf Richter at wolfstreet.com:

Technological innovation did it.

For decades, coal was the dominant fuel for power generation in the US. But now coal mining companies are being pushed into bankruptcy. Two weeks ago, it was the world’s largest privately held coal miner, Peabody Energy, that made the trip. They’re hounded by a slew of problems. Two of those problems are based on technological innovation.

Coal’s direct competitor in the power sector, natural gas, suffered a total price collapse starting in 2008, from which it has still not recovered. A surge of production from improved fracking technologies created a natural gas glut that has still not abated. Even today, inventories are at record levels.

It comes on top of a technical innovation in the power generation industry: the Combined-Cycle Gas Turbines (CCGT). The gas turbine operates like a jet engine but drives a generator instead of fan blades. The super-hot exhaust gases are then used to generate high-pressure steam to drive a steam turbine connected to another generator. Efficiencies of these sets reach 62% and beyond.

Coal-fired power plants only use steam turbines with efficiencies that average globally 33%. In other words, 67% of the energy in coal is wasted.

That combination — a highly efficient power generator and a price of natural gas that is so low that it is driving natural gas drillers into bankruptcy — has completely changed the dynamics of the power generation sector.

The decline of coal as a fuel in the power mix started in the early 1990s when the CCGT technology took off and started replacing coal-fired generators – the oldest, least efficient plants first – even when the price of gas was higher than today.

This chart from the EIA shows the collapse of coal use (black line) for electricity generation from about 58% of the mix in the late 1980s to just over 30% of the mix now. Gas fired generation (brown line) has grown from around 10% of the mix in the late 1980s to over 30% now. This year, it’s expected to exceed coal for the first time ever. Note the rise of wind and solar power (green line), benefiting from falling costs, federal tax credits, state-level mandates, and technology improvements:

The absolute quantity of coal used for power generation in the US peaked in 2007 at 1,045 million short tons (MMst), according to the EIA. With electricity production growing very little and even declining in some years since, and with coal losing market share, coal consumption by power generators took a huge hit: by 2015, it had plunged 29% to 739 MMst.

To continue reading: This Chart Shows the Collapse of “King Coal” by State, and Why Miners Are Going Bankrupt

China Warns “Social Stability Threatened” As 400,000 Steel Workers Are About To Lose Their Jobs, by Tyler Durden

From Tyler Durden at zerohedge.com:

In late September, we were stunned to read (and report) that in the first mega-layoff in recent Chinese history, the Harbin-based Heilongjiang Longmay Mining Holding Group, or Longmay Group for short, the biggest met coal miner in northeast China had taken a page straight out of Jean-Baptiste Emanuel Zorg’s playbook and fired 100,000 workers overnight, 40% of its entire 240,000 workforce.

For us this was the sign that China’s long awaited “hard landing” had finally arrived, because as China’s paper of record, China Daily, added then: “now, many migrant workers struggle to find their footing in a downshifting economy. As factories run out of money and construction projects turn idle across China, there has been a rise in the last thing Beijing wants to see: unrest.”

We added that “if there is one thing China’s politburo simply can not afford right now, is to layer public unrest and civil violence on top of an economy which is already in “hard-landing” move. Forget black – this would be the bloody swan that nobody could “possibly have seen coming” and concluded that as for the future of China’s unskilled labor industries, the Fifth Element’s Jean-Baptiste Emanuel Zorg has a good idea of what’s coming.

Fast forward to today when, if not a full million, Xinhua reports that as part of China’s proposed excess capacity production curtailments the country’s steel production slash will translate into the loss of jobs for up to 400,000 workers, estimated Li Xinchuang, head of China Metallurgical Industry Planning and Research Institute. Li said more people will be affected in the upstream and downstream industries. According to some estimates just like every banker job in New York “feeds” up to three downstream jobs, so in China every worker in the steel industry helps support between 2 to 3 additional job.s Which means, 400,000 primary layoffs would mean a total job loss number anywhere between 1.2 and 1.6 million jobs!

As a reminder, previously China had announced that it would cut steel production capacity by 100 to 150 million tonnes, while coal production will be reduced by “a relatively large amount,” according to a statement released Sunday by the State Council. We have yet to get an estimate of how many coal jobs will be lost.

The reason we were, and remain, skeptical about China ever following through on this production curtailment is precisely the massive layoffs that will result: layoffs which would enflame an already tenuous employment situation because as we showed recently, the number of worker strikes in China has gone parabolic in the past year, soaring to a record high over 2,700 in 2015, more than double the previous year’s total.

Li confirmed this very disturbing trend when he told Xinhua that “large-scale redundancies in the steel sector could threaten social stability.”

To continue reading: China Warns “Social Stability Threatened” As 400,000 Steel Wrokers Are About To Lose Their Jobs

Malinvestment Run Amuck: Mired In Massive Overcapacity And Pollution, China Approves 155 New Coal Fired Power Plants This Year, by Zachary Davies Boren

From Zachary Davies Boren at Energy Desk Greenpeace, via davidstockmanscontracorner.com:

China has given the green light to more than 150 coal power plants so far this year despite falling coal consumption, flatlining production and existing overcapacity.

According to a new Greenpeace analysis, in the first nine months of 2015 China’s central and provincial governments issued environmental approvals to 155 coal-fired power plants — that’s four per week.

The numbers associated with this prospective new fleet of plants are suitably astronomical.

Should they all go ahead they would have a capacity of 123GW, more than twice Germany’s entire coal fleet; their carbon emissions would be around 560 million tonnes a year, roughly equal to the annual energy emissions of Brazil; they would produce more particle pollution than all the cars in Beijing, Shanghai, Tianjin and Chongqing put together; and consequently would cause around 6,100 premature deaths a year.

But they’re unlikely to be used to their maximum since China has practically no need for the energy they would produce.

Coal-fired electricity hasn’t increased for four years, and this year coal plant utilisation fell below 50%.

To continue reading: Malinvestment Run Amuck

She Said That? 10/19/15

From Libby Schaff, Mayor of Oakland, California:

We will not have coal shipped through our city.

The Wall Street Journal, “Coal Hub Spurs City Brawl,” 10/19/15

Utah coal companies want to invest $53 million to redevelop an old Army base and ship their coal from Oakland to Asia. The facility would create jobs and tax revenues, and ship other commodities as well as coal,  but it is caught up in California’s environmental politics. Ports in Stockton, Richmond, and Long Beach already ship coal, but opponents don’t want Oakland to become what Jessica Dervin-Ackerman of the Sierra Club calls, “a thoroughfare for dirty coal.” The coal will travel in covered freight cars, so that concern is off base. Environmentalists worry that the coal will contribute to global warming. However, there is a huge glut around the world, and if Asia can’t get coal from Oakland, it will get it from somewhere else. Furthermore, the Utah coal has a low sulfur content and burns cleaner than most other coals, so the likelihood is that if Asia goes elsewhere, it will end up burning dirtier coal, thus increasing global warming more than if it used Utah coal.

But never mind, Oakland’s heavily minority population doesn’t need jobs at the proposed facility, which would pay appreciable more than the minimum wage. They can get lower paying but more environmentally sensitive jobs at Walmart or McDonald’s. And America’s coal companies, the ones who haven’t already gone bankrupt, don’t need to develop export markets to give themselves a chance to stay in business, although regulation and the low price of fracked natural gas have made it difficult to impossible to sell coal here. What does America need exports for anyway? It runs a perpetual trade deficit, but what’s more important, closing that gap and creating jobs in a city with high unemployment and crime rates, or satisfying the environmental sensibilities of the affluent East Bay, San Francisco, Silicon Valley, and Marin County crowd? The question answers itself.

Obama’s Climate Fascism Is Another Nail In The Coffin For The U.S. Economy, by Michael Snyder

From Micheal Snyder, at theeconomiccollapseblog.com:

Is Barack Obama trying to kill the economy on purpose? On Sunday, we learned that Obama is imposing a nationwide 32 percent carbon dioxide emission reduction from 2005 levels by the year 2030. When it was first proposed last year, Obama’s plan called for a 30 percent reduction, but the final version is even more dramatic. The Obama administration admits that this is going to cost the U.S. economy billions of dollars a year and that electricity rates for many Americans are going to rise substantially. And what Obama is not telling us is that this plan is going to kill what is left of our coal industry and will destroy countless numbers of American jobs. The Republicans in Congress hate this plan, state governments across the country hate this plan, and thousands of business owners hate this plan. But since Barack Obama has decided that this is a good idea, he is imposing it on all of us anyway.

So how can Obama get away with doing this without congressional approval?

Well, he is using the “regulatory power” of the Environmental Protection Agency. Congress is increasingly becoming irrelevant as federal agencies issue thousands of new rules and regulations each and every year. The IRS, for example, issues countless numbers of new rules and regulations each year without every consulting Congress. Government bureaucracy has spun wildly out of control, and most Americans don’t even realize what is happening.

In the last 15 days of 2014 alone, 1,200 new government regulations were published. We are literally being strangled with red tape, and it has gotten worse year after year no matter which political party has been in power.

These new greenhouse gas regulations are terrible. The following is a summary of what Obama is now imposing on the entire country…

Last year, the Obama administration proposed the first greenhouse gas limits on existing power plants in U.S. history, triggering a yearlong review and 4 million public comments to the Environmental Protection Agency. In a video posted to Facebook, Obama said he would announce the final rule at a White House event on Monday, calling it the biggest step the U.S. has ever taken on climate change.

The final version imposes stricter carbon dioxide limits on states than was previously expected: a 32 percent cut by 2030, compared to 2005 levels, senior administration officials said. Obama’s proposed version last year called only for a 30 percent cut.

In America today, the burning of coal produces approximately 40 percent of the electrical power used by Americans each year.

So what is this going to do to our electricity bills?

You guessed it – at this point even the Obama administration is admitting that they are going to go up. The following comes from Fox News…

The Obama administration previously predicted emissions limits will cost up to $8.8 billion annually by 2030, though it says those costs will be far outweighed by health savings from fewer asthma attacks and other benefits. The actual price is unknown until states decide how they’ll reach their targets, but the administration has projected the rule would raise electricity prices about 4.9 percent by 2020 and prompt coal-fired power plants to close.

In the works for years, the power plant rule forms the cornerstone of Obama’s plan to curb U.S. emissions and keep global temperatures from climbing, and its success is pivotal to the legacy Obama hopes to leave on climate change. Never before has the U.S. sought to restrict carbon dioxide from existing power plants.

And we must keep in mind that government projections are always way too optimistic. The real numbers would almost surely turn out to be far, far worse than this.

To continue reading: Another Nail In The Coffin for the U.S. Economy