Wed. Dec 8th, 2021

Coal Demand Booms Under Biden As Prices Hit 2009 Levels

US coal is experiencing a massive boom under President Biden despite the administration trying to kill fossil fuels by touting net-zero goals at the COP26 climate conference in Glasgow. 

On Monday, S&P Global Market Intelligence released data that showed prices for coal from Central Appalachia jumped more than $10 last week to $89.75 per ton, the highest level since 2009. 

The reason for the surge has been the increasing amount of coal distributed to power stations across the US grid is expected to increase a mindboggling 20% to 521m short tons, according to the US Energy Information Administration. This means the dirtiest fossil fuel will surpass nuclear as the second-biggest source of US power, after natural gas. 

Awkwardly for Biden, who has promoted a carbon-free grid by 2035, the US wasn’t on the list of more than 40 countries at the UN meeting to phase out coal. “It’s very disappointing because the science is quite clear that we have to turn sharply away from coal this decade if we are going to meet our climate goals,” said Rachel Cleetus, policy director at the Union of Concerned Scientists.

“We need very clear signals that orientate the US towards clean energy,” Cleetus added. “The climate crisis is too dire to just wait for coal to fall out. It’s just another signal of the sway the fossil fuel industry still has over US politics.”

Coal’s return is due to power plants transitioning from natural gas to coal because rising prices have made it uneconomical to produce electricity. Idled rigs and slashed drilling has dampened US crude production that is putting a bid under crude prices. 

Another positive development for coal has been new weather models forecasting below-average temperatures for the Midwest, Mid-Atlantic, and Northeast through the end of the month. We noted a seismic shift in temperatures was upon us last week, though it wouldn’t begin to play out until after the mid-point of this month. 

December might be even worse. 

President Biden’s ambitious target of decarbonizing the power grid is already becoming an issue as power plants demand coal. With more natural gas plants burning coal this year, all those virtue-signaling Tesla owners will have very little to talk about as they will soon realize some of their power to charge their vehicles will be derived from coal. 

Tyler Durden
Tue, 11/16/2021 – 17:51

Author: Tyler Durden
Source: https://www.zerohedge.com/commodities/coal-demands-boom-under-biden-prices-hit-2009-levels

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