Who Will Buy My Coal?
Conservative politicians love to cry that "There is a War on Coal" . Obama is trying to destroy the coal industry. His EPA regulations will close the American coal mines, leave the miners without jobs, and destroy a century old industry. If so, is he also responsible for closing the last coal mine in England? What about major coal reductions in China, and Europe? Does Obama have that much influence on the world's energy sources, or is it the power of the free market that is determining the energy industry? What are the facts? What are the real questions that ought to be asked?One presidential candidate proclaims that if elected he will return coal miners back to full employment. But this is not the more basic question facing coal. One friend asked me a more basic question. Let us suppose that the industry could restore full employment for all miners facing layoffs, WHO WILL BUY THE COAL? An industry with no market is simply one more commodity surplus, one where labor becomes unneeded. Coal will face an unfortunate demise simply because the free market will not purchase its product, not in China, not in Europe and ever increasingly not in the U. S. A. What are the unfortunate facts? - Coal employment has drastically decreased since the 1980's. - Eastern Kentucky coal fields have been mined for 125 years and it main veins have thinned out. - Coal companies have declared bankruptcy although the owners show little signs of being personally broke. Meanwhile the miners are denied their pensions. - China is the largest consumer of coal in the world , but Kentucky coal used in the production of steel is no longer needed given a glut of Chinese steel. - China is in the process of laying off 1.8 million coal and steel workers. - China aims to launch Swaps as a means of raising investment in its coal region. - Seven West coast ports are no longer considering transporting coal to Asia. - Kentucky coal competes with Australia and Indonesia for cheaper China imports. - China has declared plans using cheaper gas rather than more expensive coal. - Cheaper natural gas is now being used as energy in more American electric generation plants. = The Kemper County Energy Clean Coal project is two years over its deadline and billions over budget. - Arch Coal is in a new deal for bankruptcy as did Patriot Coal. - Murray Energy will announce layoffs of 1,800 coal workers. - With coal bankruptcies hundreds of millions of dollars in reclamation guarantees are now in "limbo" . Taxpayers will be stuck with cleanup bills for years. - In Pike County KY, the reality is that there is not much thick coal left to mine. - Is it economic to extract coal that is in 28 or 30 or 32 inch seams? - Wyoming produces twice as much coal as West Virginia and Kentucky and sells it at an 80% lower price. -China has the largest reserve of natural gas outside of the United States. - 5,600 Chinese coal mines out of 10,700 are projected to close. - Chinese coal imports have decreased from 10 million short tons annually to only 229,891 lbs. - Employment of the number of coal miners in the U. S. A. has decreased due to - automation and declining markets. - China plans to shed 45 million tons of steel production this year and 500 million tons less by 2020. - England recently closed its last and historic coal mine. - European coal import markets have radically diminished after a brief period of competitive pricing with natural gas. - The U.S. A. has begun to ship natural gas to Europe from its own fields. THE BOTTOM LINE Given the price of cheaper natural gas both nationally and worldwide, even if American coal production were to return to previous levels of production and employment, WHO WILL BUY MY COAL?