Energy News Today

‘Perfect storm’ leads to coal rebound

CHARLESTON, W.Va. — The president of the West Virginia Coal Association says a “perfect storm” has led to increased use of coal.

While countries have been shifting away from coal for years, use in the United States, Europe and China has grown recently as businesses restart operations from a pandemic-related pause.

“There’s clearly a surge in production and pricing at the current time, and it’s primarily due to a very favorable supply-and-demand matrix here,” Chris Hamilton said on Monday’s “MetroNews Talkline.”

“We just endured a prolonged summer period where there has been increased energy consumption. Natural gas prices have slowly crept upwards, making coal generation in most areas more desirable.”

Chris Hamilton (File)

According to the U.S. Energy Information Administration, the average price for a short ton of thermal coal in the first quarter of this year was $61.71 compared to $113.93 for metallurgical coal. Hamilton said there are strong markets for both coal types, but added it is unclear how long the interest will last.

“There’s a lot of factors here at play. Use of power has increased,” he said.

Hamilton also touched on possible benefits of the U.S. Senate’s bipartisan infrastructure bill; senators approved the measure on Aug. 10, in which $550 billion in new spending will go toward physical infrastructure issues like roads and bridges, water and electricity systems, and resiliency needs.

“You cannot make steel out of anything but high-grade metallurgical coal,” he said. “None of the renewable or intermittent energy sources come into play with basic steelmaking.”

Hamilton noted problems in maintaining workers and the supply chain because of the coronavirus.

“That’s bittersweet,” he said. “Traditionally, we have rushed to increase our capacity, and we’ve actually hurt the favorable market by doing that. At the current time with all the difficulties and challenges to increase our supply, this may be something that is prolonged here for several months as we head into the fall at least.”

The Energy Information Administration reported last month renewable energy sources have surpassed coal as the second-most prevalent electricity source in the United States with 21% of all electricity coming from wind, solar and other sources compared to 19% from coal-powered facilities. The agency cited “significantly less coal use in U.S. electricity generation and steadily increased use of wind and solar” as factors.

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2021-08-23 21:39:59

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