Some interesting arguments -- it is too bad the external costs of coal (carbon and other emissions) are not priced directly into the fuel cost.
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While coal is geologically more abundant than oil, cheap coal, close to population centers, is not. The biggest coal- producing region in the U.S. -- the Powder River Basin -- can get coal out of the ground for about $12 a ton. It costs roughly $60 a ton to ship it to power plants in the Ohio Valley. China’s vast reserves near Inner Mongolia can be mined for $25 a ton. But by the time it travels by rail across North China, then by sea to southern coastal cities, the cost rises to more than $125 a ton.
Shipping coal is more difficult and more expensive than shipping oil. Only a few coal-exporting countries are close to Asian markets; Australia and Indonesia dominate the trade. In 2011, countries with abundant accessible coal, such as Indonesia, began to demand high prices -- two times higher in fact. Coal became the new oil. An informal cartel of coal exporters emerged with the same strategic goal as the Organization of Petroleum Exporting Countries -- obtaining higher prices.
China and India, which had been counting on buying coal for $40 a ton, now find that imported coal at $120 a ton is “cheap.” Dozens of coal plants in China and India cut back capacity because of fuel costs and shortages. Indian power companies scrapped 42 gigawatts worth of new power plants. The Reserve Bank of India warned investors that coal projects were very risky. India’s largest coal company tried to raise its prices, only to be forced to back down by the government, which owns more than half of it. Eventually, Indian Prime Minister Manmohan Singh ordered Coal India to provide adequate coal deliveries for power projects in the pipeline. Coal India grudgingly agreed, but markets didn’t believe it could deliver; banks continued to refuse to lend, leading to Tata’s announcement. Meanwhile, in China, the government tried to reverse its previous deregulation of the coal-mining and transportation sectors in an effort to get prices under control, causing friction with state-owned coal mines.
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Of course Obama has largely caved to the coal industry and Rmoney (sic) is seriously in their camp - so the US may be a major supporter of coal use in the third world even as coal use plunges in the US with low natural gas prices, new emission standards, and an aging coal generator infrastructure.
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