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« To what extent China can copycat the fracking revolution in US | Main | Planning for less Chinese growth »
9:38AM

How fast King Coal gets fracked

Fascinating to watch all the "they're trying to kill clean coal" commercials on TV that target some politician, the Obama administration or so on (evil regulators).  In truth, what's killing King Coal right now is the uber-cheap price of gas in the US.  

Citing a WSJ story, the millions BTU price of natural gas in the US is about half of what it was just a year ago, and that previous price was at least half of the average global price - which is rising in most places given the lack of LNG and the difficulty in buying it for most emerging market players.

So, amidst that crazy glut in the US, made all the more worse by the mild winter that did not much draw down US natural gas stocks, and we're seeing stunning drops in the US use of coal to generate electricity. It fell by almost one-fifth (!) in the fourth quarter of last year, and we're expecting first quarter news any day now.

But as I've noted before, the answer for coal is exports.  The energy value of our coal is significantly higher than that found just about anywhere else, so if new market export relationships can be built, we can displace a lot of less-valuable coal from other sources.

My prediction is that America becomes a huge and important coal source for both India and China.  Just give it enough market change.

What got me tuned in on all this?  Wikistrat's recent simulation on the "North American Energy Export Boom."

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Reader Comments (1)

As I see you have John Robb on board of Wikistrat now.I have read his book "Brave New War" and took a look at his website "Global Guerillas".There I found a link to the webste of the Rocky Mountain Institute which publshed a study and a book "Reinventing Fire". This seems to be ultimate solution for a USA`in 2050 which wants a highly modern society with an economic power of 158% of todays level on the base of renewable energies.It would be interesiting if Thomas Barnett and/or Wikistrat comment on "Reinventing Fire".For me this seems to be a farlooking vision for all our energy problems.Or is this mere Jule Verne and utopia?

May 7, 2012 | Unregistered CommenterRalf Ostner

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