China Drives World Price of Coal Higher
China's coal miners are working overtime during the Lunar New Year holiday to fuel power stations that shut down over the past month amid the biggest snowfalls since 1954.The runaway growth in China's voracious appetite for coal promises to make China's 2030 CO2 emissions greater than that for the rest of the world combined.
Some 64 percent, or 2,882, of China's coal mines are operating during the holiday, double the number of a year ago, the official Xinhua News Agency said, citing the National Workplace Emergency Management Center.
Snowfall in central and southern China brought transport networks to a standstill, killed more than 80 people and caused direct economic losses of about 80 billion yuan ($11 billion), according to the Red Cross Society of China, Xinhua said Feb.6 ___Bloomberg
If China's carbon usage keeps pace with its economic growth, the country's carbon dioxide emissions will reach 8 gigatons a year by 2030, which is equal to the entire world's CO2 production today. That's just the most stunning in a series of datapoints about the Chinese economy reported in a policy brief in the latest issue of the journal Science.You would expect China's mad coal grab would drive the price of coal higher--once China starts importing large amounts of coal. This is exactly what is happening.
Coal power has been driving the stunning, seven plus percent a year growth in China's economy. It's long been said said that China was adding one new coal power plant per week to its grid. But the real news is worse: China is completing two new coal plants per week. ___Wired
The coal sector was shocked on rumours that an Asian steel company had recently paid US$275 a tonne for hard coking coal, almost triple last year's price. But record prices for thermal coal were observed too, with some European importers paying more than US$130 on the spot market. Last week, the Asian thermal coal price index broke the psychological barrier of US$100 for the first time ever.Of course, the sulfur and particulate pollution from China's coal plants will continue to poison the air, water, and soil of China. The soot particles from China's coal plants will continue to stain arctic ice and snow--accelerating melting and thereby increasing arctic warming. In fact, China's pollution spreads out like a shroud to poison the entire planet. And there is no end in sight.
Spot thermal coal prices have soared in the past few weeks in response to severe coal production and transportation constraints in Australia, China and South Africa at a time when power utilities are holding critically low inventories of coal. [...] We believe that the factors that have driven thermal coal prices higher in recent weeks will have a profound impact on 2008/09 contract negotiations. - Malcolm Southwood, Goldman Sachs JBWere's resource analyst
Our analysis points to a continued tightness in seaborne thermal markets extending to 2010. - Alan Heap, lead author, coal price outlook, Citigroup....Leading analysts now predict a 50% increase up to a doubling of prices, for the coming years.____Source
The high price of coal opens the door to wider use of biomass. Dried, compressed biomass bricks can be mixed with coal, or burned in place of coal.
Higher prices of coal will create the same impetus for better solid biofuels, as higher prices of oil do for liquid biofuels.
That is basic economics, which is clearly not taught to journalism students, K-12 government school teachers, or even most college professors. The general societal pessimism so often seen in advanced societies originates in the disconnect from reality so often pointed to by Al Fin articles. When media voices and celebrities are disconnected, along with academic voices being disconnected, students and young people have very few ways to become connected with reality. If and when they finally make the connection, the shock often drives them back into dominant fantasies and pessimistic quasi-conspiracy ideations.
That is the world our system of government and society is perpetuating. We shall have to see what we can do about it.