Core Apps in Tough Times – Makin’ Steam and Coking Coal-a
Coal is having a tough year. Producers must be wondering what else can go wrong. In spite of everything, coal continues to play an invaluable role in supplying US energy and as a raw material in steel manufacture. Today we take a closer look at where coal comes from and how it is used.
By now nearly everyone knows the US coal industry is on the ropes. In “Old King Coal is Down in the Hole” we learned how coal producers were hurting to the point of closing mines and restructuring. NYMEX Central Appalachian Coal prices have fallen 22 percent so far this year from $69.67/ short ton (ST) on January 3, 2012 to $54.60/ST on Wednesday (October 17, 2012). As natural gas prices fell below $2/MMBtu in April, power generators switched from using coal as a baseload fuel to natural gas on an unprecedented scale (see Talkin ‘Bout My Generation). Since over 90 percent of coal demand comes from power generation, coal consumption fell as a result. World demand for more valuable metallurgical coal has also slumped as China reduced steel output and the European economies continued to court recession. On top of all that, environmental legislation threatens future coal plant construction as well as the life of legacy plants that have to be retro fitted with expensive pollution control hardware to meet higher Clean Air standards.
