This is almost funny enough to write an entirely satirical piece…… except. Except is demonstrates some people’s lack of understanding about what’s going on.
Note: It isn’t just Reuters and HuffPo that gets it wrong. Coal is used for base-load generation. A warm winter doesn’t effect coal usage very much. Plant closings, EPA regulatory intrusion, and piss poor economic performance does.
From Huff-n-Puff/Reuters
U.S. Coal Exports To Europe Rise Along With E.U. Emissions In 2012
Yes, as shown many times at this blog, (here and here for a couple examples) the U.S. will start becoming a major exporter of coal.
The Reuters report has this to say about why……
Shale gas has jolted traditional roles in the planet’s climate drama, giving cleaner fuel to the United States, whose displaced coal has headed to Europe to pollute the old continent.
Analysts at Point Carbon, a Thomson Reuters company, estimate increased EU coal-use will drive a 2.2 percent rise in EU carbon emissions this year, after a 1.8 percent drop in 2011. U.S. emissions, meanwhile, are expected to fall by roughly the same amount – 2.4 percent – chiefly because of reduced coal use, according to estimates from the U.S. Energy Information Administration (EIA).
“The renewable energy sector is to a large extent politically-determined. EU member states have committed to legally-binding renewables 2020 targets and therefore, we expect to see renewable energy capacity grow,” Morten Hultberg Buchgreitz, acting deputy chief executive of DONG Energy’s wind power division, said.
While shale gas production has provided a glut of cheap energy in the U.S. it has also driven out an oversupply of lower-cost coal to Europe.
U.S. coal exports to Europe rose 29 percent in the first quarter of this year compared with the same time in 2011, a trend that has curbed European gas demand by around 3 billion cubic feet per day, according to Bernstein Research.
Germany offers a stark illustration of this price difference. Its power producers have so far this year earned an average of 6.5 euros per megawatt-hour (MWh) for power produced the following month in coal plants, compared with a 7.9 euro per MWh losswhen burning gas, Reuters data showed.
TREND COULD END AFTER WINTER
“In Europe it would take a 50 percent increase in coal prices to erase the price advantage over natural gas,” said Paolo Coghe, senior analyst at Societe Generale. The EU Emissions Trading Scheme (ETS), which earlier this year hit a record low and at around 7 euros per tonne is still far too weak to discourage coal burning, is also expected to rally.
Okay, that’s enough quoting. Reuters says US nat gas is what caused the drop in price of coal. It may have contributed, but the main reason is regulatory intrusion. The EPA is strangling coal generated electricity in the US. We used to produce 1/2 of our electricity with coal. Yes, the nat gas price caused some decrease in use, but as I’ve shown earlier, the U.S. is closing over 200 coal plants in the next few years. This isn’t because of a temporary drop in the price of nat gas. This is because of the EPA standards imposed on them.
Reuters also states that the renewable generation will increase in Europe, and this is probably true. However, this will not offset the need for usable electricity. They point at Germany but fail to understand what they’re seeing. Germany is building coal plants, not shutting them down. (I wrote a piece on this a while back but our friend Paul has a more recent post.) In the mean time, demand for natural gas in Europe will only continue to increase, especially during the winter.
And, yes, the carbon credit costs are expected to increase, but only because bureaucratic intervention. It is likely that the EU will simply withdraw credits from the market to increase the costs. None of this changes electricity demand.
Lastly, carbon dioxide emissions are tied to economic growth and natural human activities. Quite frankly, I’m alarmed at the dismal metrics of emissions by both the US and the EU. If these lunatics don’t understand even the most basic concepts of energy use and supply and demand, then we can’t possibly trust them to guide the US or EU back to prosperity. They just don’t have the capability to do so.
suyts space 