Coal news and updates

The prognosis for the U.S. coal sector may not be positive. But the outlook for natural gas is encouraging. It is not just a dim domestic picture for coal but also a bleak one for its overseas’ sales. Both China and India are cutting their coal exports while increasing their use of natural gas. There are several ways to slice this information, with the most obvious being that the United States is in a position to export its advanced carbon capture and natural gas drilling technologies. At the same time, this country is in a position to sell its liquefied natural gas, or LNG, to Asian nations. The problem, of course, is that the current tariff battle between the United States and China could have long-term implications — on both natural gas and coal exports.

“A recovery in domestic coal demand is not likely,” writes Samantha Gross, a fellow at the Brookings Institution. “Inexpensive natural gas and renewable power are not going away. New coal-fired generation capacity is much more expensive to build and more difficult to site and permit than natural gas or renewable facilities. Uncertainty about the future of climate and environmental regulation adds to the challenge, along with the potential that older coal plants will become obsolete …” The International Energy Agency is predicting a 3% decline in coal consumption going forward. In fact, China’s own National Energy Administration reported that it will close about 8,600 megawatts of coal capacity by year-end, which is equal to about 1% of its energy mix. Coal makes up about 59% of China’s electricity portfolio, a bit less than in previous years. And BP said in its annual energy review that China’s coal use will fall to 35% in 2040, although it will remain the world’s biggest coal user at that time. 

Meantime, China’s natural gas demand will jump by 30% between now and 2035, or 300 billion cubic meters. That’s according to PetroChina, which also says that because China will continue to rely on coal, it will be also deploying advanced coal technologies. A Reuters’ story says that Russia’s Gazprom and PetroChina have inked contracts to secure the gas. Gazprom will start off supplying 5 billion cubic meters next year with the goal of providing as much as 38 billion cubic meters. 

 

Source : https://www.forbes.com