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EPA plan won’t change price advantage of gas over coal

first_imgEPA plan won’t change price advantage of gas over coal FacebookTwitterLinkedInEmailPrint分享The New York Times:America’s ailing coal industry was buoyed on Tuesday when the Environmental Protection Agency unveiled a proposal to relax pollution regulations on coal-fired power plants. President Trump traveled to West Virginia to tout the planned measure, telling supporters, “We’re putting our great coal miners back to work.”Yet the reality on the ground for the nation’s coal industry remains bleak. Even the Trump administration’s own numbers suggest that its latest proposal won’t reverse the sharp decline of coal power, which has been crushed by competition from cheaper natural gas and renewable energy over the past decade.More than 200 coal plants have shut down since 2010, and another 40 plants have announced they will close in the years ahead, with virtually no new coal plants being built today.At best, if finalized, the E.P.A.’s newest rollback could help a small number of those endangered coal plants stave off retirement for a bit longer, albeit at the expense of increased air pollution. But even in that scenario, the agency’s own analysis showed, coal power would still decline by 20 percent between now and 2030 and coal mining would drop by one-third. “This is like throwing a few snowballs into a blizzard,” said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis. “You might see a plant here or a plant there that benefits from the new rules. But we’re talking about very minor changes compared with the significant gap between the cost of coal and the cost of natural gas.”More: Trump’s New Pollution Rules Still Won’t Save the Coal Industrylast_img read more

S&P: First quarter U.S. coal production at lowest level since 1981

first_imgS&P: First quarter U.S. coal production at lowest level since 1981 FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):The shoulder season is typically a slow period for coal demand, but the second quarter of this year presents a triple threat of unusually high coal inventories and plunging electricity demand due to the COVID-19 recession along with low natural gas prices. Regional spot markets for natural gas also trended lower during March, with Chicago trading an average of 22 cents/MMBtu below Henry Hub at $1.58/MMBtu. TCO Pool and TETCO M3 averaged 33 cents below Henry Hub at $1.47/MMBtu. SoCal Border traded 17 cents/MMBtu below Henry Hub, at $1.62/MMBtu.Coal inventories rose 4.6% during January at a time when they are normally drawn down against competitive pricing to natural gas and higher winter demand in the Mid-South and Southeast. The U.S. Energy Information Administration, or EIA, estimated stockpiles at 134 million tons, an increase of 6 million tons over December 2019. With coal burn likely down in February and March, inventories may continue to grow, further slackening shoulder season coal demand. S&P Global Market Intelligence estimates normal levels at 108 million tons, indicating a 26 million ton surplus that will likely have shippers reducing to minimum takes during the second quarter.Powder River Basin coal prices have trended lower through the winter and into 2020, as backed up inventories increasingly grip the market. Moreover, competition is forecast to intensify over the next two years, limiting opportunities for upward movement in prices. S&P Global Market Intelligence projects long-haul PRB 8800 to remain below $13 per ton through 2023, when natural gas prices begin to rise. The comparatively flat price outlook reflects forecast demand that declines more rapidly than the region’s productive capacity. The economic distress of some PRB operators last year forced some shut-in production, but mines may need to be further idled to create conditions for price support going forward. S&P Global Market Intelligence has estimated that long-haul PRB demand is resilient to natural gas spot prices ranging from $2.85-3.00/MMBtu, but the current forward strip for natural gas is below this level even through the next two winter seasons, with regional forwards lower still.Bituminous producers face even greater domestic demand pressure, forcing them to rely increasingly on export and metallurgical coal markets to offset revenue losses from low steam demand. Recent price weakness suggests that export demand is weakening as well.…If forecast prices remain much below $50/ton, production of lower-rank bituminous coal will need fall further. S&P Global Market Intelligence projects that the combination of natural gas prices and coal retirements will pressure generation demand, with eastern coal demand falling by 60 million tons (21%) from 2019-2023. Demand is projected to remain essentially flat after 2023, with Illinois Basin the only bituminous region forecast to increase production.For the four weeks ending March 21, coal shipments fell to an average of 10.5 million tons, 19.8% below March 2019. Lower shipments reflect surplus inventories and natural gas prices that weakened further during March and show no immediate prospects for improving. Based on weekly production estimates, first quarter of 2020 production came in at 151 million tons, lower than at any time reported by the EIA since 1981.[Steve Piper]More: U.S. quarterly coal production sinks to 50-year lowlast_img read more