• 2 hours ConocoPhillips Sets Price Ceiling For New Projects
  • 3 days Shell Oil Trading Head Steps Down After 29 Years
  • 3 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 3 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 3 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 4 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 4 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 4 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 5 days Africa’s Richest Woman Fired From Sonangol
  • 5 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 6 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 6 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 7 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 7 days GE Considers Selling Baker Hughes Assets
  • 7 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 7 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 7 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 7 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 10 days The Oil Rig Drilling 10 Miles Under The Sea
  • 10 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 10 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
Alt Text

Gold Prices Could Spike As India Resumes Imports

Gold purchases in India imploded…

Alt Text

Copper Prices Ignited By Chinese Demand Growth

Copper prices saw some gains…

Why You Might Want to Buy America's Dirtiest Coal

Why You Might Want to Buy America's Dirtiest Coal

I know I've written a lot about coal this week. There's simply been a lot of "can't miss" items emerging. (Which in itself might an indicator--often when I find my attention drawn to a sector repeatedly in a short time, it's because something important is unfolding there.)

This item too, I believe, is a critical trend in motion for the coal industry: the rise of dirty coal.

Platts this week reported some shocking data on this front, in regards to U.S. coal buying.

Most significantly with respect to major U.S. utility and heavyweight coal buyer The Tennessee Valley Authority. A firm that has made some surprising changes of late in its coal-purchasing patterns.

The company's power plants are located primarily in the southeastern U.S. Therefore, they've traditionally relied on feed of Central Appalachian (CAPP) coal for electricity generation, from nearby Kentucky and Tennessee.

But the numbers show that Tennessee Valley Authority has lately ceased purchases of CAPP coal almost completely. In fact, a company spokesman said that by 2016 the firm expects to source only 1% of the 45 to 50 million short tons it uses annually from Appalachia.

The reason is: CAPP coal isn't dirty enough.

CAPP is in fact one of the cleaner coals produced in the U.S. Because of that, it's desired by environment-conscious power producers--who pay a significant premium for CAPP as compared to dirtier coals. Today, CAPP coal sells for $65 per ton, while dirtier coals like Illinois or Powder River go for $46 and $10 per ton, respectively.

But increasingly exacting environmental standards are eroding CAPP's appeal. Tightening standards recently prompted Tennessee Valley Authority to spend $5.4 billion on new emissions controls at its plants. With this new technology in place, the generators can burn even the dirtiest coals without infracting amounts of air pollution.

Thus eliminating the incentive to pay a premium for clean coal. The company has stated that it plans to increasingly source coal from cheap basins like the Illinois, Unita and Powder River--providing significant cost savings for its now environmentally-insulated operations.

This speaks to a sea change in the American coal business. With environmental pressure increasing, more coal burners will go high-tech like Tennessee Valley has. And in such an environment, cheap and dirty coal may in fact become one of the most saleable products around.

That's a major turn-around. And likely an investable opportunity, through producers focused in formerly-parriah dirty coal basins.

Here's to cleaning up the dirt,

By. Dave Forest




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News